NEW YORK, Oct. 23, 2026 /PRNewswire/ — Egan-Jones recommends that shareholders of Ethan Allen vote FOR all five dissident nominees put forward by DGB Investment on the WHITE card at the company’s November 4 annual meeting, according to its commentary on the proxy contest. The piece applies a lesson from Warren Buffett’s years in textiles to the 94-year-old furniture maker.
Buffett took control of Berkshire Hathaway in 1965, when it was a New England textile maker, and kept the mills running for twenty years before closing the business in 1985. He later wrote that he should have quit sooner. Egan-Jones cites his general rule that in a commodity business it is impossible to be a lot smarter than your dumbest competitor.
Egan-Jones finds the furniture business largely commoditized, with easily copied designs, low brand recognition and little pricing power. Competitors include Costco, Wayfair, IKEA and Amazon, as well as resale platforms such as Facebook Marketplace. Ethan Allen has sought to move toward the upper end of the market through customized furniture, but the commentary concludes that it does not qualify as designer furniture.
The financial record shows the strain. Ethan Allen’s sales have fallen four years in a row, and because its stores and factories are largely fixed costs, the lost sales cut deeply into profit. In fiscal 2026 the company paid more in dividends than it generated in free cash flow, and two weeks after the contest began it declared a $3.00 special dividend, about $76 million.
Egan-Jones contrasts this with Williams-Sonoma, which succeeded by designing its own products, building distinct brands and leading early in e-commerce. DGB’s slate includes the former chief commercial officer of Wayfair and eBay’s former chief strategy officer. Its plan starts with winning new customers online, along with a brand refresh, a new assortment and a store-by-store review, and DGB plans to name an interim CEO on November 4 if it wins.
Unlike Buffett’s mills, Ethan Allen still has a known brand, its own factories, a design service and a debt-free balance sheet. Egan-Jones believes the DGB nominees are better placed to put those assets to work, and recommends voting FOR all five on the WHITE card.
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SOURCE Egan-Jones Ratings Co.
