🔒Activist investor seeks to replace CT furniture maker’s board,...
About the role
Activist investor Douglas Bergeron has launched a proxy fight to replace Ethan Allen Interiors' entire board of directors, arguing the home furnishings manufacturer and retailer needs new leadership to reverse years of declining sales.
Background
Bergeron, the former CEO of VeriFone and former chairman of Cantaloupe Inc., disclosed a 5% beneficial stake in a Schedule 13D filing with the SEC on Wednesday after nominating six director candidates for election at Ethan Allen's 2026 annual meeting. He beneficially owns about 1.275 million shares, including holdings through affiliated entities and call options to purchase an additional 275,000 shares.
Financial context
The campaign follows Ethan Allen's fiscal 2026 earnings report, which showed net sales fell 5.7% to $579.5 million and net income declined 22.7% to $39.9 million for the 12-month period ended June 30. Management attributed the results to sluggish demand, reduced business with the U.S. State Department, lower traffic at its design centers, broader macroeconomic uncertainty, global unrest and the impact of tariffs on margins. Ethan Allen ended the fiscal year with $187.5 million in cash and investments and no debt.
Company response
Chairman, President and CEO Farooq Kathwari said Ethan Allen remained confident in its long-term strategy despite a challenging operating environment. He cited investments in products, technology, manufacturing and retail operations, and said the company plans to open five new company-operated design centers during fiscal 2027.
Investor concerns
Bergeron argued Ethan Allen has failed to keep pace with competitors by underinvesting in marketing, digital capabilities and customer acquisition despite its strong balance sheet and established brand. He also questioned the company's leadership and succession planning, noting that Kathwari, 82, has led Ethan Allen for 38 years, and argued the board has not disclosed a succession plan or added directors with the retail, digital and growth expertise needed to compete in today's home furnishings market.
Board nominees
Bergeron has nominated himself for the board along with:
- Former Chairish President Anna Brockway
- Former eBay Chief Strategy Officer Kristine Miller
- Former Wayfair Chief Commercial Officer Steve Oblak
- Former Barclays Group Chief Internal Auditor Lindsay O'Reilly
- Former Neiman Marcus Chief Integrated Retail and Customer Officer Stefanie Tsen Ward
Next steps
The filing states Bergeron's group intends to solicit proxies in support of its nominees and may seek broader changes to Ethan Allen's capital allocation strategy, board composition or operations, including the potential sale of all or part of the company. Ethan Allen did not immediately respond to a request for comment.