Ethan Allen Initiates CEO Search Amid Investor Pressure
The furniture retailer has begun seeking a successor for CEO Farooq Kathwari, whose contract expires in 2027, following public calls from a major shareholder for new leadership.
Ethan Allen Interiors Inc. has initiated a search for a new chief executive officer, aiming to replace Farooq Kathwari, who has led the home furnishings company for nearly four decades. The Danbury, Connecticut-based retailer announced on Monday that it has engaged an executive search firm to identify both internal and external candidates for the position.
The company has committed to naming a successor by June 30, 2027, which is the scheduled end date of Kathwari's current contract. Following his departure as CEO, Kathwari is expected to remain on the board as a non-executive member until the company's 2027 annual shareholder meeting. Kathwari has held leadership roles at Ethan Allen since the late 1980s, serving as president since 1985 and as chairman and CEO since 1988. He was instrumental in taking the company public in 1993.
The announcement comes after investor Doug Bergeron, who holds a stake of over 5% in Ethan Allen, publicly stated earlier this month that he had begun his own search for a new CEO. Bergeron had expressed concerns about the company's "apparent unwillingness" to address CEO succession and argued that the current leadership was not equipped to select an appropriate successor.
Bergeron had also nominated an alternate slate of board members in August for the upcoming shareholders' meeting. In response to Ethan Allen's Monday announcement, Bergeron issued a statement calling the company's acknowledgment of the need for new leadership "too little, too late." He criticized the board, describing it as composed of "loyalists to Farooq," who he contends have overseen a decline in the company's value and competitiveness during Kathwari's tenure.