Ethan Allen shareholder likens company to ‘melting ice cube’

PARK CITY, Utah — Doug Bergeron, a 5% shareholder of furniture manufacturer and Top 100 retailer Ethan Allen, has nominated six new director candidates in an effort to overhaul the company’s board and revive growth.

In an open letter to shareholders, Bergeron compared the Danbury, Conn.-based company with a “melting ice cube” and argued that the company has failed to grow due to an outdated strategy and leadership that has been in place for too long.

Bergeron positioned his campaign as a reinvestment strategy rather than a cost-cutting campaign. He argued that the company’s healthy balance sheet — including $187.5 million in cash and investments and no debt — would allow it to invest in brand-building, customer experience and digital initiatives aimed at driving traffic and recapturing market share.

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“Right now, Ethan Allen‘s business is behaving like a melting ice cube. And melting ice cubes eventually disappear. On last week’s earnings call, the CFO acknowledged that lower sales are driving fixed cost deleveraging and pressuring operating margins,” Bergeron wrote. “If sales continue to decline, operating margins will continue to come under pressure and further threaten the earnings power that should support future reinvestment in brand, digital capabilities and stores.

“If allowed to continue for too long, the melting ice cube analogy becomes a self-fulfilling prophecy. This reinforces the case for broad governance and leadership change now.”

In his letter, Bergeron noted Ethan Allen’s CEO and Chairman Farooq Kathwari, 82, has held both roles for 38 years and that the board has not disclosed a succession plan or demonstrated what Bergeron characterized as the modern retail, digital and growth expertise Ethan Allen now needs. He argued that in an era when three out of four furniture purchases begin online, the company appears to view e-commerce as a threat rather than central to its growth strategy.

“Ethan Allen’s failure to modernize its business raises the risk of missing out on an entire generation of design-conscious customers who are now buying homes and are in their peak home improvement years,” he wrote.

Bergeron pointed to the past 20 years to state his case for change. He noted that Ethan Allen’s annual revenue was $1.066 billion in 2006 and has since declined to $579 million in 2026. In its most recent earnings report, Ethan Allen showed what he characterized as a “meaningful annual sales decline, weaker written orders in both retail and wholesale, compressed adjusted operating margins and lower earnings per share.”

During that same period, Williams-Sonoma grew from $3.73 billion in 2006 to $7.81 billion in 2026, RH grew from $713 million in 2006 to $3.44 billion in 2026, and Arhaus, which did not disclose its earnings in 2006, grew from $495 million in 2016 to $1.38 billion in 2026.

Bergeron, a former CEO of VeriFone and chairman of Cantaloupe, nominated himself along with Anna Brockway, Chairish co-founder and former president; Kristine Miller, former eBay chief strategy officer and head of North America retail practice for Bain; Steve Oblak, former chief commercial officer of Wayfair; Lindsay O’Reilly, former Barclays Group chief internal auditor; and Stefanie Tsen Ward, former Neiman Marcus chief integrated retail and customer officer.

“Our goal is simple: growth and revitalization. With modern leadership, a brand-focused strategy, disciplined capital allocation and improved digital execution, I believe a new board can deliver significant upside to shareholders within 24 to 36 months alongside a long-overdue re-rating opportunity,” he wrote.

Ethan Allen confirmed receipt of notice from Bergeron and his nominations and provided the following statement. “The Board and its Corporate Governance, Nominations and Sustainability Committee will review the proposed director nominees and present the Board’s recommendation regarding director nominees in the Company’s definitive proxy statement, which will be filed with the U.S. Securities and Exchange Commission (“SEC”) and mailed to all Ethan Allen shareholders eligible to vote at the 2026 Annual Meeting. Ethan Allen shareholders are not required to take any action at this time.”

Story originally published by Home Accents Today sister publication Furniture Today. FT has reached out to Ethan Allen for comment.