Ethan Allen CEO Defends Leadership After Activist Challenge

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessEthan Allen CEO Defends Leadership After Activist ChallengeEthan Allen Interiors Inc. Chief Executive Officer Farooq Kathwari, responding to an activist investor’s proxy challenge this week, said the furniture store is focusing on long-term retail sales over short-term digital sales.Author of the article:Mengqi Sun and Dani Burger You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Ethan Allen Interiors Inc. Chief Executive Officer Farooq Kathwari, responding to an activist investor’s proxy challenge this week, said the furniture store is focusing on long-term retail sales over short-term digital sales.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountKathwari, in an exclusive interview on Bloomberg TV Friday, said the company has been focusing on its showrooms and providing in-person and interior design services to its customers over online and other sales channels. “We felt we could’ve done that, our sales would have gone up, but we felt that was not the right thing to do,” given the company’s long-standing relationships with its large number of interior designers, Kathwari said.The CEO acknowledged that “the business on the website is less.” But he argues that the company encourages customers to meet with their interior designers at stores when they browse on its website because “sales are three to five times more when the customer interacts with the interior designer,” he said.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againKathwari’s interview was the first time he or the company publicly responded since the activist launched a proxy campaign.DGB Investments founder Douglas Bergeron announced on Wednesday that he has built a stake in Ethan Allen and is seeking to replace the company’s entire board of directors. Bergeron said that Ethan Allen has a strong foundation but has failed to grow due to an outdated strategy and an over-tenured management and board.Bergeron, who previously served as CEO and chairman of payment processing company VeriFone, added that the company’s strategy failed to focus on digital initiatives despite online sales growing in the furniture industry. He is nominating himself and five other former executives at companies such as eBay Inc. and Wayfair Inc. as directors.Last week, Ethan Allen reported a 5.7% year-over-year decline in net sales for the fiscal year ended June 30. The Danbury, Connecticut-based company offers free interior design services to clients and sells a range of home furnishings, including dressers, sofas and wall decor.Shares of Ethan Allen, which have fallen 19% over the past year, rose 0.6% to $23.63 at 1:40 p.m. Friday in New York trading, giving the company a market value of $602 million.Bergeron, the activist who holds an about 5% stake in the company, argued in a Bloomberg TV interview that Ethan Allen should also replace Kathwari, who is in his 80s and has held that position since 1988.Kathwari said he found Bergeron’s comments to be “amazing and wrong,” adding that he is very active, does mountain climbing and looks younger than his age.“The fact is, if I believe that I don’t have the energy or the ability or the mind to run a business, then I should not be doing it,” he said. “Our board has never raised the issue.”Bergeron said Kathwari’s interview Friday was “dismissive, defensive and detached from reality.” This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.