Ethan Allen to Halt Production at 2 Plants

September 6, 2006  by in UnCategorized   

By Home Furnishings Business in Case Goods on September 2006 Danbury, Conn.-based Ethan Allen Interiors said yesterday it will shutter production at two factories—a case goods plant in Spruce Pine, N.C. And an upholstery facility in Atoka, Okla.

The factory in Oklahoma will be converted to a regional distribution center. About 465 people will lose their jobs.

In connection with this initiative, production will be allocating among its remaining domestic manufacturing locations and selected offshore vendors.

The 280,000-square-foot North Carolina factory was built by Ethan Allen in 1989. The Oklahoma facility, built in 1973, uses about 159,000 square feet for upholstery production and the remaining 97,000 square feet for distribution.

Ethan Allen has nine remaining plant locations, including four case goods plants, four upholstery plants, and one accessory plant. These facilities total nearly three million square feet and employ about 2,300.

“We sincerely regret the impact that this decision will have on many of our employees,” said Farooq Kathwari, chairman and chief executive officer. “We believe, however, that this action will strengthen our logistical capabilities and improve the company’s remaining U.S. manufacturing operations.”

Ethan Allen will record a pre-tax restructuring and impairment charge of approximately $13.5 million to $14.5 million, the majority of which will be non-cash in nature. Most of the earnings impact is expected to occur in the company’s first fiscal quarter ended Sept. 30.

Kathwari will be presenting today at the Goldman Sachs Global Retail conference at 11:55 a.m. Eastern time. The presentation includes a question and answer session.

Listen in via Web cast at ethanallen.com/investors.