🔒Activist investor seeks to replace CT furniture maker’s board, launches proxy fight

A 5% shareholder in Danbury-based Ethan Allen Interiors has launched a proxy fight to replace the company's entire board of directors, arguing the home furnishings manufacturer and retailer needs new leadership to reverse years of declining sales. Douglas Bergeron, the former CEO of payment technology company VeriFone and former chairman of Cantaloupe Inc., disclosed the 5% beneficial stake in a Schedule 13D filing with the Securities and Exchange Commission on Wednesday after nominating six director candidates for election at Ethan Allen's 2026 annual meeting. Bergeron beneficially owns about 1.275 million shares, including holdings through affiliated entities and call options to purchase an additional 275,000 shares, according to the SEC filing. The campaign follows Ethan Allen's fiscal 2026 earnings report released last week, which showed net sales fell 5.7% to $579.5 million and net income declined 22.7% to $39.9 million for the 12-month period ended June 30. Management attributed the results to sluggish demand, reduced business with the U.S. State Department, lower traffic at its design centers, broader macroeconomic uncertainty, global unrest and the impact of tariffs on margins. Ethan Allen — which manufactures and sells furniture, home décor and other home furnishings through a network of 171 retail design centers in North America — ended the fiscal year with $187.5 million in cash and investments and no debt. In announcing those results, Chairman, President and CEO Farooq Kathwari said Ethan Allen remained confident in its long-term strategy despite a challenging operating environment. He cited investments in products, technology, manufacturing and retail operations, and said the company plans to open five new company-operated design centers during fiscal 2027. In his filing, Bergeron argued Ethan Allen has failed to keep pace with competitors by underinvesting in marketing, digital capabilities and customer acquisition despite its strong balance sheet and established brand. Bergeron also questioned the company's leadership and succession planning. He noted that Kathwari, 82, has led Ethan Allen for 38 years and argued the board has not disclosed a succession plan or added directors with the retail, digital and growth expertise needed to compete in today's home furnishings market. He has nominated himself for the board along with former Chairish President Anna Brockway, former eBay Chief Strategy Officer Kristine Miller, former Wayfair Chief Commercial Officer Steve Oblak, former Barclays Group Chief Internal Auditor Lindsay O'Reilly and former Neiman Marcus Chief Integrated Retail and Customer Officer Stefanie Tsen Ward. The filing states Bergeron's group intends to solicit proxies in support of its nominees and may seek broader changes to Ethan Allen's capital allocation strategy, board composition or operations, including the potential sale of all or part of the company. Ethan Allen did not immediately respond to a request for comment.