Ethan Allen CEO Farooq Kathwari is out after an activist investor won three board seats and quarterly sales fell 12%.
If you sell premium furniture or home goods through a high-ticket store, this one lands on your numbers. One of the best-known names in the category is being rebuilt by directors who came from Wayfair, eBay, Chairish and Neiman Marcus. At Ecommerce Paradise I track brand moves like this because they hit the three things you control: ad costs, supplier terms and pricing.
Below I cover what Ethan Allen announced, how the proxy fight got here, what it does to your Shopping costs and margins, and the five moves I would make this month. If you are new to the model, start with my guide to what high-ticket dropshipping is.
Big brands rewrite their channel rules fast, so your supplier list is your edge. My paid supplier directory points you to high-ticket suppliers you can approach for authorized dealer terms before the next reorganization hits. Browse the supplier directory →
Ethan Allen Names Ward Interim CEO as Kathwari Exits
Ethan Allen announced the leadership change at 7:00 a.m. ET on Nov. 10 from its Danbury, Connecticut headquarters. According to the company’s press release, the changes took effect Nov. 9 and Kathwari is no longer with the company.
Stefanie Tsen Ward is interim chief executive, effective immediately. The release says she was most recently chief integrated retail and customer officer at Neiman Marcus Group. She will run daily operations and lead what the company calls a strategic reset while the board searches for a permanent CEO.
Activist investor Douglas Bergeron is now executive chairman, and Kristine Miller is lead independent director. The board added Anna Brockway, Lindsay O’Reilly, Adam Treanor and Ward on Nov. 9. Continuing directors elected at the annual meeting are Bergeron, Maria Eugenia Casar, Miller, Steve Oblak and Tara Stacom. The release describes Oblak as a former chief commercial officer of Wayfair and Brockway as a co-founder and former president of Chairish.
Bergeron framed the day as a starting gun. “Today marks Day One of our 100 day plan,” he said in the release. New directors are working on-site with management to find early wins, and management is visiting manufacturing facilities in Vermont, Virginia and North Carolina.
The numbers landed the day before. Ethan Allen reported results for its fiscal first quarter, ended Sept. 30, on Nov. 9 at 4:05 p.m. ET. Per Retail Dive, net sales fell 12% from the same quarter a year earlier to $130 million. Retail sales dropped 11% and wholesale sales fell more than 9%, and orders in both segments edged down.
Consolidated gross margin fell 180 basis points to 59.6%, which puts the year-ago figure near 61.4%. Retail Dive reported that tariffs, higher designer floor sample sales and lower manufacturing production drove the drop, partly offset by sales mix, reduced headcount and a higher average ticket. Net income fell 84% to $1.7 million. The board still declared a quarterly dividend of $0.20 per share.
Shares fell about 11% to $18.01 in early trading on Nov. 10, down from a $20.34 close, according to RTTNews. The 52-week range runs from $17.40 to $25.26.
The boardroom turn came a week earlier. Shareholders voted at the annual meeting on Nov. 4 and elected three of Bergeron’s five nominees. Kathwari, who has led Ethan Allen since 1988 per Retail Dive, was not reelected to the board. Attempts to reach him for comment were unsuccessful, Retail Dive said.
How Bergeron’s Proxy Fight Cracked Ethan Allen’s Board
Bergeron, a former Verifone CEO who holds about 5% of the stock through DBG Investment, went public in early August. According to Home News Now, he asked shareholders to replace the entire board and the CEO, and he called the business a “melting ice cube.”
His case rested on digital. Bergeron’s campaign said Ethan Allen draws about 420,000 monthly site views, the lowest among premium peers, and that peers pull 25% to 37% of their traffic from paid search and social against under 20% for Ethan Allen. It also said ecommerce was under 5% of net sales when the company last disclosed it in 2022. Those are the activist’s figures, not audited company data.
The sales slide is the company’s own. Business of Home reported that sales fell from $818 million in fiscal 2022 to $579 million in fiscal 2026, while net income dropped from $103 million to $40 million. The stock was down about 30% over two years.
The board pushed back. It announced a $3 per share special dividend worth about $76 million in August and launched a CEO search in September. On Oct. 12 it told shareholders that “Claiming the potential to triple shareholder value is not an operating plan,” per Business of Home. Kathwari pointed to a “debt-free balance sheet, sustained levels of profitability and confidence in our long-term strategy.” Bergeron called the dividend a “transparent attempt to deflect attention from mounting calls for change,” according to Business of Home.
The result was not a clean sweep. Shareholders also reelected two company nominees, and Retail Dive called the outcome a “mixed message” while noting investors agreed Kathwari’s time was up. Business of Home reported that Glass Lewis and Egan-Jones fully backed Bergeron while ISS backed only two of his five picks. Telsey Advisory Group analyst Cristina Fernandez said Kathwari’s contract, which ran to June 30, 2027, would likely be terminated early. Less than a week later he was out.
I have tracked pressure on this category all year. In July I covered Wayfair’s bet on big stores while furniture demand stayed soft. Then came flat furniture sales in June.
What the Ethan Allen Reset Means for Furniture Store Owners
My read is that this is a demand story and a digital story at the same time. Treat them separately.
Demand first. A 12% sales drop at a brand with a 59.6% gross margin tells me premium furniture buyers are still holding back. One quarter is not a trend, and Ethan Allen blamed part of the damage on its own mix of designer floor samples and lower production. It still fits what I saw when confidence rebounded while big-ticket buying plans kept falling.
Tariffs are the second piece. Section 232 duties of 25% on upholstered wood furniture and on kitchen cabinets and vanities remain in force, and increases to 30% and 50% were postponed to Jan. 1, 2027, according to STR Trade. I wrote up the cabinet side in my post on the Jan. 1 cabinet tariff step.
Here is hypothetical math, not a reported figure. Say your store sells $100,000 a month of furniture at a 25% gross margin, so supplier cost is $75,000. A supplier passes through a 5% cost increase and your advertised price cannot move. Cost becomes $78,750 and gross profit drops from $25,000 to $21,250. That is a 15% cut in gross profit from a 5% cost change, so ask every supplier now whether minimum advertised pricing will move with cost.
Digital is the part I would watch hardest. The new board is stacked with marketplace and omnichannel people. Business of Home lists Miller as a former eBay strategy chief, and the company release names Oblak of Wayfair, Brockway of Chairish and Ward of Neiman Marcus. Bergeron’s whole pitch is that Ethan Allen under-invests in paid search and social. The company has not said it will change that, and its release describes no specific ecommerce initiatives.
If the 100-day plan does act on it, expect a legacy brand to bid harder on its own furniture terms in Google Shopping. Search already favors the big names, which is why I flagged Ashley beating Walmart 66.5% to 13.4% in Google AI answers. A brand with a $579 million sales base and a mandate to grow online can outspend a small store on its own name.
Hypothetical again. You spend $10,000 a month on Shopping and average cost per click rises 10% on contested furniture terms. The same budget buys about 9% fewer clicks, and with flat conversion and order value your revenue from that spend falls by the same 9%. What I’d do is set a trigger now. If cost per click on your category terms climbs more than 10% over your four-week average, shift budget to the products where you hold the best margin before you add spend. My piece on why high-ticket stores need a different search strategy covers the structure. Google telling PMax advertisers to fund brand search shows the auction pressure on brand terms was already building.
I see three outcomes. The new team stays quiet and the first 100 days produce cost cuts only. The team pushes paid digital and your auction gets pricier. Or it opens a new online dealer or marketplace channel, which would create supplier openings for stores that already know how to sell furniture online. I’d put the second as most likely, but that is my judgment and not reporting.
The counterpoint is real. Turnarounds are slow, shareholders split their vote, and the board’s own warning that tripling shareholder value is not an operating plan could prove right. A weak plan from a legacy brand leaves the field exactly as it is today.
This is why I like high-ticket stores built lean, with phone sales and tight margin control. If you want my team to handle the build and the ad setup while you pick the niche, that is what my turnkey done-for-you store build is for. If you already have a store and cost per click is the problem, my scaling service covers ads, supplier onboarding and content.
Legacy furniture brands are racing to get online. Want my team to build and run your high-ticket store for you? See the turnkey done-for-you service →
Five Moves to Make Before Ethan Allen’s 100 Days End
Do these in order. The 100-day plan runs to roughly mid-February 2027 and the tariff step lands Jan. 1.
- Baseline your Shopping costs today. Pull four weeks of cost per click, impression share and auction insights for your top 10 furniture or home products and save the sheet. Then check the paid and organic keywords on ethanallen.com in SEMrush every two weeks.
- Email every supplier this week. Ask in writing whether cost increases are coming with the Jan. 1 tariff step and whether pricing policy changes in 2027. My list of reliable authorized high-ticket suppliers shows who to call first. My breakdown of wholesalers versus manufacturers explains why the answers differ.
- Make the phone your closing tool. Premium buyers research for weeks and often want a person. Put your number in the header and run it through Quo for business calls and texts. Then follow the process in my high-ticket sales follow-up guide.
- Capture email from visitors who do not buy. A long consideration cycle is a follow-up problem. Build a browse and cart flow in Omnisend that sends the exact product viewed, your phone number and a financing mention if you offer it.
- Pick a category where legacy brands are slow. Use my free high-ticket niches list to find product lines with thin digital competition and confirm suppliers before you commit. If you want a second set of eyes on the pick, 1-on-1 coaching is built for that.
Frequently Asked Questions
Who runs Ethan Allen now?
Stefanie Tsen Ward is interim CEO and Douglas Bergeron is executive chairman, per the company’s Nov. 10 release. The board is searching for a permanent CEO.
Did Ethan Allen announce any ecommerce plans?
No. The release describes a 100-day plan and a strategic reset but no specific ecommerce initiatives. It points only to board members with digital and omnichannel experience.
Can I sell Ethan Allen products on my store?
The coverage I reviewed does not say whether Ethan Allen authorizes outside online dealers, and I would not assume it does. Ask the brand in writing, and read how I pick a high-ticket niche from a consumer brand before you build around any single name.
Will furniture tariffs rise on Jan. 1?
According to STR Trade, scheduled increases to 30% on upholstered wood products and 50% on cabinets and vanities were delayed to Jan. 1, 2027, and the current rate is 25%. Check for new proclamations before then, because trade deals can change the date.
Does a 12% sales drop mean furniture demand is collapsing?
One quarter at one brand is not proof. Ethan Allen pointed to tariffs, designer floor samples and lower production, so pair it with other data before you cut your ad budget. My guide to turning Google Shopping clicks into sales shows where to look first.
What platform should a furniture store use?
I build high-ticket stores on Shopify. I compare the options in my guide to the best ecommerce platform for furniture.
Legacy brands are changing fast and you do not have to read the signals alone. Work through your supplier and ad plan with other store owners and me inside the Ecommerce Paradise Academy. Start the 7-day free trial, then it is paid. Join the Skool community →
I will cover the next real development at Ethan Allen when it lands. Until then, put your tariff and cost per click baselines in a spreadsheet today and email your suppliers. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.
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Trevor Fenner is an ecommerce entrepreneur and world traveler from Seattle, Washington, and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.
He maintains homes in Seattle and Bali, spends most of the year overseas, and usually returns to Seattle for about a month each summer.
