Ethan Allen (ETH) - Get Report is looking for a little magic from Disney (DIS) - Get Report to help sustain its growth in 2016. The company has teamed up with Disney to create a new line of furniture and home décor that will be introduced in stores in the U.S. and Canada later this year.
"We believe it has tremendous potential. We have not, in all these 83 years, associated ourselves with any other brand. But Disney, and Ethan Allen, we are two great iconic American brands,' said Farooq Kathwari, CEO of Ethan Allen. "The objective really is to get children in and get their parents, and their parents happen to be mostly millennials. So it expands our reach to an age group that's very, very important." Kathwari discussed the Disney deal during a visit to the New York Stock Exchange Thursday.
The deal is just one initiative the company has recently undertaken to boost sales. Ethan Allen has also been focusing on developing its digital platforms to help draw in more customers. In its last quarter, Ethan Allen's sales increased 5.3%. Kathwari is feeling good about 2016.
"We feel confident. We always have to be somewhat cautious, but we are confident about the fact of what we can do in terms of our quality, in terms of our service," said Kathwari. "When you take a look at the economy, you look at the information coming in, there are lots of issues in the world, international issues, domestic issues. But as an enterprise, you really have to position yourself so that you're able to take advantage of challenges. So I think we are positioned well."
Ethan Allen is adding two new manufacturing plants in North America this year, and set up a display of furniture on the floor of the New York Stock Exchange to show off American craftsmanship. Most of the company's furniture is built in America. Kathwari, who's been the CEO of Ethan Allen since 1987, recently won a proxy fight after an activist challenge from Sandell Asset Management.
"It was somewhat of a surprise," said Kathwari, who discussed the lessons learned from the proxy battle. "What we learned was, instead of getting advisers and consultants, we could talk our shareholders, which we did. And then they know us, they know our perspective. And I'm very, very happy and pleased that we were overwhelmingly supported by our shareholders." Ethan Allen's board of directors was re-elected by a wide margin at the company's annual shareholder meeting late last year.