DANBURY, Conn.–Ethan Allen Interiors Inc. said today it will consolidate about 12 of its retail design centers and two service centers. About half the 175 full- and part-time employees affected by the move are expected to transfer into nearby operations.
Farooq Kathwari, chairman and chief executive officer, said that as the vertical home furnishings retailer focuses more on providing interior design service and solutions, it needs fewer neighborhood locations in major markets, including New York. In New York, two design centers in Manhattan and one in Queens will be consolidated into one major new flagship design center located on Third Avenue across from Bloomingdale’s, which is scheduled to open by May. The 12 design centers that are being consolidated represent about $34 million in annual sales, about 50 percent of which is expected to be consolidated into the new Manhattan location. “We expect most of the remaining business to be picked up by our other design centers,” Kathwari said. “We expect this consolidation will improve operating profits by about $3 million to $4 million annually starting in fiscal 2009.”
Ethan Allen expects to record a pretax charge of $9.5 million to $10.5 million in the second half of its fiscal year ending June 30.
As of Dec. 31, Ethan Allen has an international network of 305 design centers, of which 160 are company-owned and 145 are independently owned.
