Ethan Allen Ousts CEO Farooq Kathwari as Chair in Activist-Led Board Shake-Up

By Priya Raman

Ethan Allen shareholders voted on Wednesday to replace three directors with nominees backed by activist investor Doug Bergeron, and board chair and CEO Farooq Kathwari — who has led the furniture retailer for nearly four decades — was not reelected, according to a preliminary vote count. Only two of the company's five nominees won seats.

Bergeron, who owns roughly 5% of Ethan Allen's stock, launched his campaign in August, criticizing Kathwari's leadership and nominating candidates to replace the entire board. Bergeron himself won a seat on the new slate. The result splits the difference: shareholders approved nominees from both the company and its critic, but they agreed with Bergeron on the central point that Kathwari's tenure should end.

What does the vote change for the CEO search?

The pressure had already forced movement. Under Bergeron's campaign, Ethan Allen announced a CEO search in September. At that stage, the plan called for Kathwari to stay on longer: the retailer said it expected to name a new CEO no later than June 30, when Kathwari's contract ends, and for him to remain a nonexecutive board member until the annual shareholder meeting a year from now.

Wednesday's vote could accelerate that timeline. Telsey Advisory Group analysts, led by Cristina Fernández, wrote on Thursday: "With the activist investor gaining effective control of Ethan Allen's board of directors, CEO Farooq Kathwari's contract, which expires on June 30, 2027, is likely to be terminated early."

Ethan Allen did not immediately respond to requests for comment about Kathwari's plans following the vote.

Who leads next?

Bergeron has already signaled his preference. Last month he urged the board to appoint Stefanie Tsen Ward as interim CEO after this week's meeting. Ward was one of Bergeron's five nominees but did not win election — that does not disqualify her from the top job.

"Ms. Ward brings meaningful experience with brands and retailers, most recently serving as Chief Integrated Retail and Customer Officer at Neiman Marcus," Fernández said.

Bergeron, in a statement, said Wednesday's result "marks a new chapter in Ethan Allen's storied history" and that shareholders had given his team "the mandate to restore accountability, revitalize the business and return Ethan Allen to profitable growth."

He also struck a conciliatory note toward the outgoing chief. "We will also work with Mr. Kathwari to ensure an orderly transition for Ethan Allen's employees, customers and partners," Bergeron said. "We recognize and appreciate his decades of service to the Company and the role he has played in building Ethan Allen into the brand it is today."

For marketers and retail partners, the immediate signal is governance-driven change at a heritage home brand, with a CEO exit now likely ahead of the contractual June 30, 2027 endpoint. Ethan Allen reports its fiscal Q1 results on Monday, which will give the new board its first hard look at the business it now controls.