Eighty years ago, Ethan Allen was founded in the shadow of the worst financial crisis ever witnessed by the United States.
As the Danbury furniture giant marks its 80th anniversary this month, it confronts what has been one of the slowest economic recoveries in the U.S. since the Great Depression.
“But,” said Ethan Allen Interiors Inc. CEO and Chairman Farooq Kathwari, “crisis does create an opportunity.”
Over the past several years, Ethan Allen, which designs, manufactures and markets all of its products, has hired more than 800 interior designers ”“ many of whom were unable to sustain their own businesses following the 2008 financial crisis ”“ and overhauled more than 60 percent of its product lines, Kathwari told the Business Journal.
“If you are around for 80 years, you”™re either reinvented by chance or by plan. We have done both, but more of the latter,” he said. “Over the last three years we have experienced a tremendous amount of progress. … If this great recession hadn”™t taken place, we wouldn”™t have done all that.”
Ethan Allen management has also placed an emphasis on custom-designed furniture, or what Kathwari calls “luxury made affordable.”
In the past, Ethan Allen would manufacture several hundred identical furniture pieces at a time, but over the last three and a half years, Kathwari said the company has substituted large-scale production runs with furniture pieces that are custom-designed by each individual consumer.
“In this age of commoditization, we”™re going to provide what we call luxury that is affordable,” Kathwari said. “Customization at excellent prices is a luxury, and that”™s what we”™re doing.”
The adjustments appear to have paid off.
In its 2012 fiscal year, which ended June 30, Ethan Allen earned $49.7 million, or $1.71 per share, up nearly 70 percent compared with fiscal year 2011 earnings of $29.3 million, or $1.01 per share.
Net sales for the 12 months ending June 30 increased to $729 million from $679 million for the 12 months ending June 30, 2011, representing an increase of 7.4 percent.
Kathwari also touted the company”™s expansion internationally, with 73 locations in China, and plans to open retail locations in Montreal and Brussels over the next several months.
“You constantly have to keep on reinventing,” he said.
That mantra was instilled by Ethan Allen co-founder Nathan Ancell, who preceded Kathwari as chairman and CEO and moved the company”™s headquarters from New York City to Danbury in 1972.
“At that time, I talked to him (Ancell) and I asked him, ”˜Why Danbury?”™” Kathwari said. “He said we want to be close to New York but away from the New York culture ”“ that we want to be in a community that takes a lot of pride in what they do and that the people who would be associated with us would be part of the Danbury area.”
Kathwari said he has noted a “tremendous amount of growth” in the Danbury area since Ethan Allen first arrived there.
“In Danbury, I see the benefits of having great people with a tremendous amount of pride in what they do and tremendous pride in the community.”
