Tag - ETH

Ethan Allen Interiors Inc. (NYSE: ETH) CEO Farooq Kathwari said the furniture retailer is in the midst of a transition to become an interior design company from its traditional role as a consumer goods seller. Kathwari made the comments during a midday conference call.

“We are selling solutions and service. We’ve got about 100 of our [interior design] professionals here with me and they’re nodding their heads,” Kathwari said.

The chief executive said the firm’s new retail locations will be smaller, with “design consultants” doing most of their work outside of the office making sales pitches. He said the company is looking at converting some of its existing larger stores into smaller “design studios.”

For the reset of Ethan’s fiscal year, which ends on June 30, Kathwari said the firm’s main initiatives will be increasing the amount of offerings and improving the company’s “vertically integrated structure to provide interior design solutions.”

Over the next six months, Ethan Allen plans to open eight to 10 new design centers in various metropolitan areas, including Sacramento, Denver and Philadelphia. The firm’s flagship design center will open in Manhattan this spring. As of Dec. 31, Ethan had 305 design centers, 160 of which are owned directly by the company.

“We have substantially strengthened the caliber of interior design professionals in our design centers,” the chief executive said in explaining Ethan’s program of employee recruitment and training.

Ethan Allen is making “good progress” on its revamped website and expects to be online by the summer, Kathwari said. Because website orders will be forwarded to design consultants who will assist shoppers, the CEO said online orders will be a combination of personal contact and technology.

The announcement in early March by Bassett Furniture Industries Inc. (Nasdaq: BSET) appeared to hammer another nail in the coffin for the U.S. furniture industry. The century-old company said it would begin closing its manufacturing facility in the Virginia hometown that bears the same name.

While the shutdown will eliminate 280 jobs, or 15% at Bassett, the announcement also sounded another death knell for American-made furniture that can’t effectively compete with cheap imports, mainly from Asia.

The struggles of Bassett, Haverty Furniture Companies Inc. (NYSE: HVT) and even giant Ethan Allen Interiors Inc. (NYSE: ETH) have left investors wondering if they should chop down their losses and toss them on a funeral pyre for what is an industry blindsided by a transition that it failed to anticipate.

As Bassett, Va., becomes another Appalachian region company town without much of a company, Bassett Furniture will use its plant there to process imported goods. This year, more than half of the company’s products will be made outside the United States.

Robert Spilman, the president and CEO, said in a press release that shutting down furniture making at the plant was part of Bassett’s transition “from being primarily a domestic furniture manufacturing company to a retailer, manufacturer and marketer of branded home furnishings.”