DANBURY, CT - Ethan Allen Interiors kicked off what may prove to be a tumultuous annual meeting here today as hedge fund manager Thomas Sandell looks to replace a number of board members of the residential furniture maker. But the company has scored a winning blow as its choices for the board of directors all have won a majority of the vote of shareholders. Sandell has a history of being able to place at least one board member at almost every one of the companies that his firm, Sandell Asset Management Corp., has invested in, so it remains to be seen if he will continues to buy stock in Ethan Allen and remain an activist investor. His firm currently owns 5.5% of Ethan Allen.
Ethan Allen recently opened showrooms in Germany and Qatar, in the Middle East,
all while an investor seeks to take control of the company.
Focus on eCommerce, Millenials in the Coming Year
The presentation just concluded at the annual meeting was a review of successes and a look toward the future. "Quality is the cornerstone of our brand." Chief Executive Farooq Kathwari said in a review of the strengths and the accomplishments of his team. "After the Great Recession we've strengthened our Interior Design Network," noting that the company has taken over the direct management of 25 stores to strengthen their impact with customers.
CEO Kathwari also touted improvments in order fulfillment: "Eighty percent of our product is made when we receive an order. We make it right here in America (to improve the quickness of delivery) so we had to make sure our manufacturing and our sourcing was in sync."
"Reaching millenials is what you're going to see next year" from Ethan Allen, Kathwari added. The company's focus on ecommerce is not only designed to improve the experience for all customers, but also to draw in younger consumers. He also noted "90% of clients visit our website before they come into the store. We want our customer to interact with our designers (both online and in-store)."
As a sign of his management team's success and positive momentum, Kathwari pointed out that "Our average ticket price was up 5% last month from October of last year." He has initiated an aggressive marketing plan this year. The company has mailed thick, multi-page promotional magazines, supplemented by a mix of TV, radio and print advertising, to boost sales and gain market share. Sales in the third quarter were flat compared with last year, so the strength in October is a welcome sign. The company said last month that it expects strong sales in October and November, but that it might taper off in December as customers move toward purchases of lesser-priced accents in the final month of the year.
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