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Kathwari: Staying stateside a major plus for Ethan Allen

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DANBURY, Conn. — While many on the supply and retail side of the home furnishings industry are struggling with product shortages stemming from importing issues, those who deal in domestically made goods are singing a different song.

Take, for instance, home furnishings maker and retailer Ethan Allen, which boasts around three-fourths of its assortment from within North America.

“We have a strong presence in Vermont and North Carolina,” Farooq Kathwari, president, chairman and CEO of the Top 100 retailer, told Furniture Today. “We’ve invested a great deal in technology, and today, about 75% of our products are made in our own workshops. That is an advantage.”

Kathwari said the decision to remain stateside is one the company has stood by for more than two decades ago. Today, its North American operations include facilities in the U.S., Mexico and Honduras.

“Twenty years back, there was the impact on globalization and commoditization. Our industry, like others, went offshore, mostly to east Asia. We decided we would maintain manufacturing right here in North America,” he said. “It wasn’t an easy decision. We decided to invest and consolidate our manufacturing to our best plants.”

While much of its production takes place in the U.S., that’s not to say Ethan Allen hasn’t felt the impact of the product shortages, particularly in raw materials. But Kathwari said the company has pivoted to come up with creative solutions.

“We’ve run into some issues: foam, for instance, springs, things of that nature. Those issues are less than they were six or nine months back,” he said. “Fortunately, on the lumber side, we have a major lumberyard and sawmill in Vermont, so we produce a lot of our lumber.”

Although backlogs remain, Kathwari feels Ethan Allen has managed them well.

“It varies from product program to product program. For instance, we did a very good job in leather upholstery,” he said. “Keep in mind, more than 75% of the products we sell are custom made; all of our upholstery is custom, and 75% of our case goods are custom. We make it when we get the order. It’s an advantage, but it means you don’t have inventory sitting there; you have to have the raw materials and parts.”

And while Kathwari feels good about how the company is keeping its materials pipeline open, he also feels good about keeping Ethan Allen’s factories staffed. Recently, the company announced pay increases in its factories in Beecher Falls and Orleans, Vt., in order to attract and retain strong talent.

Kathwari said while he was in Vermont on vacation, he decided to visit the facilities to see where they could use help.  “About five or six weeks back, I had gone up to Vermont and New Hampshire to hike, and within a couple of hours of (where I was), we’ve got plants that were struggling to get people,” Kathwari recalled. “To get people, we have to increase wages. I said, let’s increase them. What are we waiting for? … It’s important for us to make sure we get good people. I think we’re going to get over that hump also.”

While the decision to pay more will help keep the factory workforce steady, he said Ethan Allen’s preference for hiring designers to staff stores is paying off as well. Kathwari said the personal level of service offered in store is a competitive advantage vs. other stores and the Internet.

“Sometimes (consumers) feel better about buying online because the service they get in stores isn’t that great,” he said. “When you have the physical locations and very knowledgeable designers, that’s where the difference is. Otherwise, people aren’t going to go to stores if they can buy it better online.”

Those designers have also helped ease consumers’ concerns as it relates to getting product in a timely manner. Kathwari said that level of attention creates a level of goodwill that translates throughout the brand.

“Because today, personal service is a luxury, and that’s a luxury we provide. We have a very disciplined product program. It’s us. We determine whether to expand our offerings, and we maintain strict levels of quality across the board,” Kathwari said. “The benefit of having a brand that is recognized and liked is very important. Our designers benefit and our clients benefit, too.”



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