Ethan Allen to consolidate 12 retail centers

DANBURY, Conn. Ethan Allen Interiors today said it plans to consolidate operations at about 12 retail design centers and two service centers.

The company said that the majority of the business serviced by these locations will be transferred to other locations serving the same general market area. The company said about 175 full and part-time positions will be affected by this decision, with about half expected to transfer to nearby operations.

In the second half of our fiscal year ending June 30 the company expects to record pre-tax restructuring, impairment, and other related charges of approximately $9.5 to $10.5 million, the majority of which will be non-cash in nature representing an after-tax impact of $6 to $6.6 million or 20 cents to 22 cents per diluted share.

Ethan Allen said expects to generate pre-tax gains of $4 million to 5 million from the sale of the properties it does not own. The company owns five of the locations being consolidated.

Farooq Kathwari, chairman and ceo, commented, “As Ethan Allen has evolved into a business model focused on providing interior design service and solutions, including free in-home design consultations, we do not need to have as many neighborhood locations in major markets."

Among the locations being consolidated are two New York City design centers, one in Manhattan, the other in Queens. According to Ethan Allen these two locations will be combined into one major new flagship design center on Third Avenenue, scheduled to open in May.