New Rochelle resident Farooq Kathwari vividly remembers his youth in the mountains of Kashmir, where his grandfather brought him into his family’s arts-and-crafts business at the age of 13. Honing his keen eye for beautiful design, along with his marketing and business acumen, Kathwari embarked on a long journey that would lead him to become the, CEO, president, and chairman of Ethan Allen Interiors, a position he’s held since 1988.
Kathwari, 77, has been the driving force behind Ethan Allen’s ascension to one of the top furniture companies in the world, with some 200 design centers located in North America and 100 overseas. Founded in 1932 as a manufacturer of Early American/Colonial-style furnishings, the company has greatly expanded its design styles under Kathwari’s leadership while continuing to offer the high-quality craftsmanship it has been known for since its inception.
Ethan Allen’s CEO, president, and chairman Farooq Kathwari with his team at the brand’s Hartsdale location. The company celebrates 90 years of innovation this year.
Looking back on his career, Kathwari says, “When I came to New York at age 20, I somehow got a job as a bookkeeper, although I had never seen a calculator in my whole life. My grandfather wanted to help me earn some extra money, so he sent me 12 wicker baskets of Kashmiri arts and crafts and told me to sell them and just send the cost back.” This helped Kathwari pay for the business degree in marketing that he received in 1968 from New York University (which he attended at night).
Kathwari then climbed the ranks on Wall Street — starting as an analyst and becoming CFO of Rothschild & Co. by age 27 — all while selling his imported Kashmiri arts and crafts. In the early 1970s, one of his associates introduced him to Ethan Allen cofounder Nathan S. Ancell.
Kathwari says Ancell spoke to him about the company’s hand-embroidered Kashmiri crewel fabric for its upholstery fabrics. “[Ancell] said they never came in on time and that there were lots of problems importing them and asked me if I could help. I had no idea, but I said yes. He gave me a sample, and long story short, I got into the fabric business,” says Kathwari. A year later, he helped Ethan Allen out again by finding and importing rugs from Romania and India.
In 1973, Kathwari was invited to partner with Ethan Allen in a joint venture called Kathwari Ethan Allen, or KEA. “My offices and warehouse were located in a former bowling alley in Larchmont,” he says. Kathwari traveled the world, including Italy, India, China, and Portugal, importing goods for KEA.
In 1980, Kathwari merged his company with Ethan Allen and became a vice president. He rose to become president in 1985 and CEO in 1988. Kathwari’s vision has brought many changes to Ethan Allen, starting with an ongoing expansion and update of the company’s offerings in furnishings and accessories. Reflecting today’s demands, the company currently has products under three styles: Classic, Country and Coastal, and Modern. “We’ve given people the opportunity of selecting products with a variety of styles but continue to maintain our focus on great design, great quality, and something our customers can live with every day,” he says.
Kathwari has also made a company commitment to producing more than 75% of its products in North America, in an effort to retain control over quality and craftsmanship. In addition, the company has chosen to promote interior designers from within the company to manage its stores, as a means to run them as all-in-one, whole-home custom-design centers (many Ethan Allen retail stores had been licensed by family businesses before their owners retired and sold their shops to the firm).
Under Kathwari’s leadership, the company has also placed a major investment in new technology. “About 10 years back, we said we’d help our interior designers by giving them PC tablets, so they could work with the clients in the design centers and in their homes. Then, we installed big touchscreens in the stores so that clients and designers could work together and discuss different design options with our 3D Room Planner technology,” he says. This 3D technology, which has an online version for customers, became even more essential when COVID-19 hit and enabled Ethan Allen designers to continue to do business with clients on a virtual basis.
“I live here; it’s one of our flagship locations, and over the next few months, you’ll see how we’re going to take it to the next level.”
While Ethan Allen’s headquarters are in Danbury, the company’s 12,000-square-foot Hartsdale store is very close to Kathwari’s heart. “This spring, we will update the building and freshen up the outside and inside. In addition to the furnishings, accessories, and design-technology products (as well as workstations filled with samples of custom fabrics, leathers, and finishes), there will be new lighting, rugs, and outdoor-furnishing studios. We will also have all the new product lines that have been held up for the past year and a half because of COVID,” says Kathwari. “I live here; it’s one of our flagship locations, and over the next few months, you’ll see how we’re going to take it to the next level.”
Looking to the future, Kathwari says he has frequently been inspired while having breakfast or getting coffee at the BLD Diner in Larchmont. “About a year back, I did a plan on a napkin for a 30,000-square-foot design center,” says Kathwari. “People were shocked because technology has enabled us to reduce, not enlarge, the size of our design centers. Then I said, ‘No, I want a virtual design center, so our designers will have the ability to work with clients and take them through a virtual tour of the entire store.’” When launched in the near future, clients will be able to see everything they need to decorate their homes, from bedroom sets to living room lamps, in a virtual space.
It’s a glass half-full, glass half-empty moment in the home furnishings industry. There are those who, eyeing their balance sheets, which are fat from the home spending boom of the COVID era, feel optimistic that this surge will keep going for another year at least. Then there are those who are quietly watching the world return to a new normal and anticipating a decline in demand for sofas and side tables.
Farooq Kathwari, the longtime CEO of Ethan Allen, falls in the latter camp—though he has an even-keeled view of the matter. “This has been an incredible run. But I think that people are now coming out of their homes, so as we go forward, we are preparing for the fact that it’s going to be harder,” he tells Warren Shoulberg on the latest episode of the Retail Watch podcast. “People are going to be more cautious. They’re going to demand better quality and service. [Demand is] not going to remain at the levels we’ve seen, which means that we have to work harder and differentiate ourselves to gain market share. That's what we intend to do.”
To be fair, it’s not as though Kathwari hasn’t already been working pretty hard over the course of the past two years. Ethan Allen certainly enjoyed some advantages over its competitors going into COVID—for one, it manufactures 75 percent of its goods in North America, meaning the company wasn’t quite as vulnerable to the ballooning cost of overseas shipping. However, its lead times have still been bogged down by raw-material shortages.
“We have one of the highest backlogs we’ve ever seen, even though we make [most of] the products ourselves,” he says, pointing to the foam crisis and a shortage of upholstery springs. Kathwari’s strategy has been to let clients know what to expect. And if you happen to use that touch point to let them know good news too? All the better.
“You’ve got to be very proactive, and reach out to your customers—don’t wait for them to complain,” he says. “[But] we still haven’t raised our prices to the level we should. So our clients are benefiting—that message is going to them, that this is a good time to buy. You have to take adversity and turn it into something positive.”
In this episode of the podcast, Kathwari weighs in on a variety of hot topics in retail, ranging from the sensitive relationship with China to why he’s betting on smaller stores more than some of his competitors are. He also shares a thumbnail sketch of an incredible life story that took him from the mountains of South Asia’s Kashmir region to leading a venerable American retail brand for more than 30 years.
Listen to the podcast below. If you like what you hear, subscribe on Apple Podcasts or Spotify.
Homepage photo: Farooq Kathwari | Courtesy of Ethan Allen