The Register Citizen (Torrington, CT)
Furniture retailer builds pandemic recovery
With furniture sales hitting a record high amid an historic real estate boom, the CEO of Ethan Allen Interiors says that supply issues continue to hold back even bigger receipts but that things are improving weekly.
On Tuesday, Ethan Allen joined the handful of Connecticut-based companies to have reported results from a full fiscal year embedded entirely in the COVID-19 pandemic. Ethan Allen is among Danbury’s largest corporate employers, while operating as a side venture the Ethan Allen Hotel adjacent to its headquarters overlooking Interstate 84.
Between July 2020 and last month, Ethan Allen saw retail sales increase 16 percent to $685 million from the prior 12-month stretch, which included closures of furniture stores to contain the spread of COVID-19. But revenue remains well off from earlier fiscal years, when Ethan Allen sales topped $750 million.
In addition to its Danbury headquarters design center, Ethan Allen’s other Connecticut locations are in Stamford, Milford, Clinton, Canton and Manchester among just over 300 nationally. The company has scrapped a retail outlet adjacent to the Norwalk Department of Motor Vehicles that is being replaced with a Garavel auto dealership.
Speaking on a Tuesday conference call, CEO Farooq Kathwari said the pandemic continues to impact Ethan Allen, including the cost of transportation. Freight and delivery companies have been dangling big signing bonuses to recruit more drivers, including Greenwich-based XPO Logistics, which has been offering $6,000 bonuses to new hires in Connecticut and elsewhere.
“Our backlogs are exceedingly high and need to be delivered,” Kathwari said Tuesday. “It is ... a question about catching up to high orders.”
Other Connecticut-based furniture retailers include Bob’s Discount Furniture in Manchester and Lovesac and Design Within Reach in Stamford. The latter is operated as a subsidiary of Herman Miller which completed its 2021 fiscal year a month in advance of Ethan Allen.
In Herman Miller’s own conference call six weeks ago, an executive cited similar challenges in delivering on customer demand this spring.
“Certainly as we bring customers into the funnel, we leave dollars on the table when those customers don’t convert because of longer lead times than normal,” said Debbie Probst, president of retail at Herman Miller. “Outdoor [furniture] in particular has been impacted.”
The trade publication Furniture Today reported that sales rose 2 percent last year for the 100 largest furniture companies. Matching that increase was Ashley HomeStore, the nation’s largest chain with locations in Norwalk, Brookfield, Orange, Newington, Waterbury, West Hartford and Manchester.
But home furnishings sales have spiked significantly since. In each of the first six months of 2021, furniture sales receipts were higher than in any single month prior to this year according to the U.S. Census Bureau, including April sales of $12.55 billion that remains the record high.
Regardless of demand, furniture makers continue to grapple with supply shortages for some key items — including commodities like glue needed to join furniture parts. While Ethan Allen has caught back up on needed inventories for lumber, a gap remains for foam used in upholstered sofas and chairs.
“A lot of this happened because of the problems in the Texas area where a lot of these foam factories are,” Kathwari said Monday. “It’s still not where it needs to be, but we see gradual improvement every week.”