A Conversation with Farooq Kathwari
A Conversation with Farooq Kathwari
This webinar is a conversation with the CEO of Ethan Allen, Farooq Kathwari. Mr. Kathwari has been at the helm of Ethan Allen since 1988 and has extensive experience and knowledge of the furniture industry growing and managing Ethan Allen. In this conversation, he brings his insight into retailing, marketing, manufacturing, finance, and strategic planning and many lessons for retailer survival in times of uncertainty.
In addition to experience with Ethan Allen Interiors Inc., Mr. Kathwari has served as an advisory member of the New York Stock Exchange and as a director and former chairman of the National Retail Federation. He has been inducted into the American Furniture Hall of Fame and received the Yale School of Management’s Chief Executive Leadership Institute Lifetime of Leadership Award and Ernst & Young’s Entrepreneur of the Year Award. He has also been recognized by Worth magazine as one of the 50 Best CEOs in the United States.
Takeaways from a conversation with Farooq Kathwari
- Challenges of cost increases in materials and transportation will probably remain for the foreseeable future.
- 75% of Ethan Allen products are made in North America, and 100% of their upholstery is custom. The benefit of vertical integration affords Ethan Allen 5-7 weeks for shipping from plants instead of others who have lead times of several months.
- The extremely high levels of consumer interest in furnishing we’ve seen over the past two years are likely to flatten out. Still, our industry’s market share of consumers’ disposable income probably won’t decrease too much.
- Retailers must have the ability to be sensitive to the needs of the clients
- Once Ethan Allen recognized they had a labor shortage, they decided to raise wages across the country, and now they do not have a labor issue. They also pay associates upon the sale, not delivery.
- Turnover is expensive – train your people, keep your people.
- Create a culture of recognition in your organization to show appreciation of your team’s value.
- Smaller retailers would benefit from technology that shows products they cannot show on the floor and create virtual interior design options for clients.
- Good talent and good technology are important for all retailers, regardless of size.
- Relevancy in our industry means being consistent and focused on: your company culture, financial stability, carrying the right products, maintaining knowledgeable talent, internal and external marketing, technology, and social responsibility.
- Internal marketing is geared to the internal communications within the organization to provide information and get feedback.
- External marketing includes seeing each associate as a marketing agent with tools to promote the company’s brand.
- Retailers must meet the customers where they are in their buying cycle, and communication is critical.
- The future of retail has technology and personal service playing an important role.
- Having interior design options through 3D technology is an important aspect of helping customers.
- Social responsibility starts at home – take care of your internal people and then branch out to your community.
- Working from home (for yourself and staff) is fine if it makes sense if you have the technology to do so and doesn’t negatively impact business. Sometimes, allowing a few days a week to work from home makes sense.
- #1 Job as a leader is to be authentic and help people become better. Motivate them by setting an example doing the right thing, and working hard.