by Company plans to announce a new top executive no later than June 30, 2027, when current CEO Farooq Kathwari’s contract ends
DANBURY, Conn. — The board of directors at furniture manufacturer and retailer Ethan Allen Interiors has announced a succession process aimed at ushering in the company’s next chief executive officer to replace longtime executive Farooq Kathwari when his current contract ends.
The Corporate Governance, Nominations and Sustainability Committee said it has engaged a nationally recognized executive search firm that is identifying and evaluating both internal and external candidates.
The board said it plans to announce Ethan Allen’s next CEO no later than June 30, 2027, which is when Kathwari’s current contract is scheduled to end. As part of the planned succession, the company said Kathwari has agreed to remain as a nonexecutive member of the board after June 30, 2027, until the company’s 2027 annual meeting, at which time he will step down from the board.
As part of the succession planning, Kathwari “will continue to lead the company’s management team and execute Ethan Allen’s strategic priorities while supporting the board’s search and an orderly leadership transition.”
“Ethan Allen’s board is focused on overseeing the company for the long-term benefit of all shareholders,” said David M. Sable, Ethan Allen’s lead independent director, chair of the company’s Compensation Committee, and a member of the Corporate Governance, Nominations and Sustainability Committee. “We have a leadership team that has built and continues to advance Ethan Allen’s designer-led, vertically integrated platform. The succession process has a clear timeline that reflects the board’s commitment to an orderly, well-governed leadership transition. The independent directors are conducting a thorough process to identify a leader with demonstrated experience who can build on and accelerate the company’s ongoing digital transformation, omnichannel retail strategies, and supply chain efficiency to best guide Ethan Allen’s next chapter.”
The move follows efforts earlier this past summer by Ethan Allen shareholder Doug Bergeron to usher in new leadership and a new board of directors at the company, amid what he describes as a failure to deliver meaningful growth over the past two decades.
“The board takes its succession and governance responsibilities seriously,” said Cynthia Ekberg Tsai, chair of the company’s Corporate Governance, Nominations and Sustainability Committee. “Succession is a standing agenda item where the board regularly evaluates the company’s leadership capabilities, emergency and long-term succession plans, and the capabilities required to execute our strategy over the long term.”
Kathwari has been president of the company since 1985 and has been chairman and CEO since 1988.
“I fully support the board-led, independent CEO succession process,” Kathwari said. “As Ethan Allen’s largest shareholder, I remain deeply invested in the company’s long-term success and committed to helping ensure a smooth and seamless leadership transition. I will remain focused on executing Ethan Allen’s strategic priorities while doing everything I can to support a successful transition.”
“This process provides an important period of leadership, continuity and stability,” Sable added. “It is also allowing the board to conduct a thoughtful, deliberate, and rigorous succession process on a timeline driven by the long-term needs of the company. We are grateful for Farooq’s leadership over the last four decades as he helped build an incredible brand known for craftsmanship and high-touch customer service and look forward to building on this legacy during our next chapter of growth. The board is confident in the strength and commitment of the company’s leadership team today, and we remain equally focused on ensuring we have the leadership, talent, and organizational depth necessary for continued success in the years ahead.”
During the transition process, Ethan Allen said it “will remain focused on executing its differentiated strategy, including its designer-led retail network, North American manufacturing and logistics, technology investments, and disciplined cost management.”
The board also said it will remain engaged with shareholders by providing “appropriate updates on the succession process.”
In a statement issued Monday, Bergeron said the company’s announcement that it plans to transition to new leadership is “too little, too late.”
“Questions about CEO succession have hung over Ethan Allen for more than a decade,” said Bergeron, who along with his affiliates and associates, own 5.2% of Ethan Allen’s outstanding common stock. “The company’s board of directors had years to develop a thoughtful succession plan. Yet only when pressured by our campaign did the board’s ‘plan’ suddenly come to light. This last-ditch announcement is an abject failure of governance, and continues a pattern of rash and reactionary maneuvers by the board following the company’s special dividend declared last month.
“The chronology is difficult to ignore. On August 7, Chairman and CEO Farooq Kathwari stated publicly that succession was an issue the board had ‘never raised.’ On September 10, we announced that our alternative slate of director candidates had launched an independent CEO search. The next day, Ethan Allen filed its preliminary proxy statement without disclosing a formal CEO search or a specific transition timeline. Today, the board describes an ‘ongoing formal’ process and says a search firm is already identifying and evaluating candidates. A credible succession process should not have needed a proxy contest to become visible to shareholders.”
He added that a board “comprised of loyalists to Farooq, who repeatedly extended his tenure and increased his compensation while he presided over a shrinking, less competitive, and less valuable business, is utterly unqualified to select the next CEO of Ethan Allen.”
“The board now says it needs a CEO to accelerate digital, omnichannel, and supply-chain execution – areas Farooq has spent years insisting Ethan Allen was ‘well positioned’ to address, and precisely the shortcomings our campaign has highlighted… .Shareholders should ask themselves whom they trust to identify the next CEO: the board who failed to act until forced, or our nominees who made the company act. In other words, are the directors who presided over Ethan Allen’s shortcomings the right people to select the leader now charged with fixing them?”
He also voiced concern that Kathwari will continue to serve as chairman and CEO throughout a process that could run through June 30, 2027.
“Ethan Allen cannot afford nine more months of the same leadership while the incumbent board manages a transition it should have commenced years ago,” Bergeron said. “Two decades of deteriorating operating performance, culminating in the company’s disappointing fourth quarter and full year fiscal 2026 results, do not argue for patience — they underscore the cost of delay and the need for independent board leadership now. Shareholders should not be fooled by claims of continuity and stability, which, in reality, means continued contraction and declines in sales, profits, and relevance.
“It is time for a fresh start. Ethan Allen’s next chapter requires a new board that is capable of maximizing the company’s potential. We already have a CEO search underway, led by high-caliber nominees who have proven records of revitalizing brands while driving results and accountability, and who have the expertise needed to restore profitable growth at Ethan Allen. Ethan Allen shareholders deserve a board that is thoughtful, qualified to govern a modern retail business, and committed to working tirelessly on behalf of shareholders, not just when backed into a corner. If the current board remains in control of the company, shareholders should expect more of the same: incompetence and underperformance.”
