Ethan Allen CEO says he expects furniture production backlogs to be resolved in four to six months


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Ethan Allen CEO Farooq Kathwari told CNBC on Tuesday the company expects its production backlogs to catch up by early next year after a series of pandemic-induced supply issues. 

One of the advantages we have is that first of all, you know, we have the right kind of product lines. And then secondly, we have the opportunity of combining the personal service of about 1,500 interior designers with technology … Having said this, we are also impacted by service issues,” Kathwari said on “Power Lunch.”

“We are making improvements,” he said. “We are very high backlogged, but I think in the next four to six months we’ll catch up.”

The interior design manufacturer and retailer hopes to go back to its “normal” rate of being able to make custom products in less than eight weeks, Kathwari said, rather than its current rate of 12 to 16 weeks or longer. 

Ethan Allen produces custom-made products, while the majority of the furniture industry relies on its stock products, he said, adding that 75% of Ethan Allen items are made in North America. The company sells furniture and decorative home products online and through about 300 design centers in the U.S. and abroad.

Kathwari said the company is seeing “record sales” as consumers’ interest in homes increased toward the end of the summer season. He said Ethan Allen closed more than 250 of its locations and furloughed more than 4,000 employees when the pandemic hit the U.S. early last year.

Kathwari said the current service issues include delays in fabrics and raw materials such as foam and lumber. He said the company was affected by a myriad of issues including severe storms in its Texas plants, which delayed production of foam used in upholstery and couches, and an initial lack of workers in its original Vermont plant. 

“Custom is tremendously important. It was a challenge but became an opportunity with the involvement of our interior designers, with involvement of technology, and the fact that … we stayed here, and today that’s a great advantage,” Kathwari said about maintaining its business in the U.S. 

Effective Monday, Ethan Allen is also changing its ticker symbol from “ETH” to “ETD” to avoid confusion with Ethereum news in search results, according to an Aug. 4 press release. Kathwari said the change to the letter “D” reflects the company’s focus on design.

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