Ethan Allen to close two plants, impacting 465 workers

Ethan Allen Interiors Inc. on September 6 announced a plan to close its Spruce Pine, N.C., case goods manufacturing facility and convert its Atoka, Okla., upholstery manufacturing facility into a regional distribution center. In connection with this initiative, the company will permanently cease production at both locations, allocating production among its remaining domestic manufacturing locations and selected offshore vendors. The decision impacts approximately 465 employees.

The Spruce Pine facility, which totals approximately 280,000 square feet, was built by the company in 1989. The Atoka facility, which totals approximately 256,000 square feet, was built in 1973 and currently utilizes approximately 159,000 square feet in the production of upholstery manufacturing with the remaining 97,000 square feet utilized as part of the company's existing distribution operations. Ethan Allen has nine remaining plant locations, including four case goods plants, four upholstery plants and one accessory plant. These facilities total nearly 3 million square feet and employ approximately 2,300 people.

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

The company will record a pre-tax restructuring and impairment charge of approximately $13.5 to $14.5 million ($8.4 to $9.1 million, after-tax), or $0.26 to $0.28 per share, 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 September 30.