Ethan Allen’s Big Ambition for China

on January 29 2013 | in Retail | by | with No Comments

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For years, the American furniture industry has been bowled over by China’s vast outpourings, but a new trend is emerging: American-made furniture is being targeted to – and bought by – affluent Chinese.

Ethan Allen, an upscale furniture brand based out of Danbury, Connecticut, has carved out a niche in the market domestically for customizing most of the furniture it sells. Now, the brand is seeing results as it applies the same tactics to foreign markets.

Sales outside of the U.S., and those mostly Chinese, account for 6.6 percent of the $729 million in sales Ethan Allen earned in FY 2012. Though this is up just a hair’s breadth from 6.3 percent in FY 2011, Farooq Kathwari – Ethan Allen’s CEO – believes that the future of his brand lies in international sales: partly to offset America’s own economic downturn, and partly to give his company more long-term growth potential.

Ethan Allen furniture is available in 77 stores in China operated by Markhor Furnishings Co, the brand’s local retail partner. Film director David Huang spotted some of the pieces in a Markhor store in Beijing and was unimpressed. “But I expect many Chinese people will like this brand because it looks expensive and is made in the U.S.,” he said. Experts, like Steve Lush, president of Robb & Stucky International Inc., a Florida retailer of high-end home furnishings, agree. Lush recently said there is a big demand for American made goods among new wealthy Chinese.

Approximately 50 percent of Ethan Allen’s furniture being sold in China is produced in U.S. plants located in Vermont and North Carolina. The remainder comes from Mexico, Honduras, and other countries. While Kathwari may eventually open a plant in Asia, the CEO said Chinese furniture plants typically aren’t set up for customized upholstery choices that Ethan Allen emphasizes. With shipping costs from the U.S. to China costing about two-thirds of what the reverse trip does, he believes the North American plants can handle this business for now.

[wsj]
photo credit: ethan allen

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