“We are not trying to be everything to everybody,” says Ethan Allen CEO Farooq Kathwari on the latest episode of The Business of Home Podcast—and the approach is paying off. Kathwari, only the second CEO of the home furnishings company in 91 years, has successfully led it through decades of economic change, including the pandemic. In the process, he has turned Ethan Allen’s business model on its head.
Only 25 years ago, 80 percent of the brand’s products were in stock and not made-to-order. Now, 75 percent of its products are custom. Thanks to new technology, the company’s showrooms virtually showcase all of its offerings without having to have them on the floor. Where Ethan Allen once flourished in spaces exceeding 20,000 square feet, it now only needs 5,000 to accomplish the same thing. Looking ahead, Kathwari hopes to continue to increase productivity in the most efficient ways possible.
Elsewhere in this episode, Kathwari tells host Dennis Scully about Ethan Allen’s unique production and delivery system, its design network, and the strategic focus that has allowed it to thrive when similar companies have collapsed.
Crucial insight: After decades as head of the company, Kathwari keeps five things in mind when evaluating his business: talent, marketing, offerings, technology and strong leadership. “To be able to stay in business, to progress, to be profitable, you have to constantly innovate,” he says. “You have to say, Are you relevant in your offerings? Are you relevant in your marketing? Are you relevant in the people that you have? Are you relevant in your technology? You have to constantly ask yourselves.”
Key quote: “Technology has to be combined with talent,” says Kathwari. “Technology on its own is not going to do anything. If you think somehow technology will take care of our problems—no. Technology and talent is what makes it happen.”
The Thursday Show
BOH executive editor Fred Nicolaus joins host Dennis Scully to discuss the biggest news in the industry, including a big AI investment from Airbnb, a study on the state of luxury, and a surprising new board member for House of Hackney. Later, designer Heidi Caillier joins the show to talk about her debut book, Memories of Home.
Listen to the show below. If you like what you hear, subscribe on Apple Podcasts or Spotify.