Welcome to the Ethan Allen 2019 Investor Meeting. Pleased to have everybody here today. I'm Corey Whitely, Chief Financial Officer. We'll go ahead and get started. As a reminder, the presentation today will contain forward-looking information, all the information should be taken in conjunction with the company's Annual Report on Form 10-K and any other reports filed with the Securities and Exchange Commission. With that, I'll turn it over to Farooq Kathwari, our Chairman and Chief Executive Officer.
Good morning, welcome to our investor conference, which is being webcasted. We are pleased several of our board members are here today and others are participating in the live webcast. Also with us are a number of our management associates. Our retail, manufacturing, and logistics management are in the field. Last four days of the month, as you know, are very important. Also, as you must have noticed, this morning we filed an 8-K, also a brief press release regarding the question that is always asked: How was business? As we reported, our written sales were up about 5% from January 1 to the Presidents' Day weekend. So far momentum is continuing. We have been profitable for 86 years. We have returned over $1 billion to our stockholders since our IPO in 1993 and invested close to $800 million in capital expenditures.
This fiscal year, so far, to January 31, that is seven months, we've distributed $42 million in dividends. A 73% increase from the previous year. Our focus is to grow our sales. As you know, our vertical integration provides an opportunity to increase our profitability. During the last few years, the impact of globalization, commoditization, and technology has impacted all businesses, creating major disruptions and an opportunity. We believe our focus on personal service is our competitive advantage. We believe there is a vacuum in many industries, especially ours, differentiating offerings and personal service. We design the products, source the materials, manufacture over 70% of our products in our workshops in North America, operate a global retail network with the largest interior design professionals. We focus all of our operations, keeping in view our social responsibility within, inside, and outside. Craftsmanship lives with us.
About 75% of our products are made in our own North American workshops. Complementary design service is key to our business. We have 1,200 designers in North America, a retail network, and 2,000 worldwide. Premier in-home delivery is very critical. It was late in the '80s, we decided to take over the logistics of our enterprise by delivering our products at one cost nationally. Today, we have a strong logistics network, which means not only great service, but it also is important for return to the product and also on the issue of profitability. We have expanded our product offerings to design to reach a larger consumer base. Our objective is to expand our reach to more people. If you go to our design centers, you will see products and offerings, and I would say this is an Ethan Allen you may not know.
More modern, more accessible, more affordable, scaled for smaller spaces, and many products available in 30 days or less, and can be customized with options with as little or as much as a customer wants. These are the products that all have been introduced in the last year or so. You can see this reflects in terms of style, the attitude. One thing is consistent, the level of quality at all our products is similar. Great offerings, great prices, and in fact, if you take a look at the prices, people are surprised that we are able to do this quality at the prices that we are doing. Again, this table has many options. The chairs have options. Customization is part of our business, as little or as much as customers want. We have a total home, from art to lighting, to rugs, home textiles.
A lot of variety. This is an Ethan Allen that brings the whole world home. Effortless elegance, livable luxury, curated looks, design influences from around the world. Here you can see more options, more customization. Again, you can take it the way it is, or you can do customization. Again, with the help of our interior designers, that is possible. Great products, variety of styles. Again, classics, but with a modern perspective. This, the third one, is this an Ethan Allen where everything is possible. Dramatic, iconic styles, detailed, exceptional customer options. These are products where you can now take it to the next level in terms of design, in terms of prices.
I sort of say, somewhat jokingly but not jokingly, that we are, to some degree, able to do this like great automobile companies like BMW or Mercedes and Audi have been able to do. They were at one time known for in the middle. I would say their 5 Series. They decided, "No, we've got to reach consumers who are," you might say, "the millennials or people who want something modern, smaller scale," so they introduced the 3 Series. They also introduced the 7 Series and 8 Series. Not many brands can do that. The brand has to be desired, and the brand has to be known, and you've got to be maintaining quality. We have that opportunity. For many years, we attempted to open up different stores with different brands. That was the time everybody was doing it. We have the option and opportunity that is unique.
That we can take our brand and make it available from, you might say, the three to the seven or the eight, and that's what we are looking at it. Another thing that's happened in our industry is that products of this nature, of this level of quality, and businesses that were doing it, many of them are out of business. Commoditization has taken over. Low quality, price factors. That gives us an opportunity because we can make these all available, even at a very, you might say, competitive and even affordable price for the level of quality that we have. This we are going to leverage as we move forward in our messaging, both in our interior design centers and then also in our communications. This is quality. This is design.
Those of you who are here have seen our products, where we are expanding and increasing our reach in, you might say, in a more Relaxed Modern. It is casual, again, livable, relaxed, inspired by nature, transitional, mixed materials. This is going to be introduced in April and May of this year to our network. You can see the attitude here. Great quality and prices represents great value. Again, options in terms of finishes. This chair, you can take it the way it is, or it can be in 1,000 different fabrics. Our manufacturing, I will talk about that, gives us an opportunity to do customization right here in North America. Also, outdoor living is becoming important. While we have a program, it is okay. We are going to substantially increase our presence in what you might call the home and garden.
These products are being introduced actually also in April and May to our clients. As you can see, it reflects good design, good quality. Durability is important. Today also, as you know, outdoor living in terms of even upholstery is becoming important. Different from wood to metal. Very classic designs, but again, with a very modern perspective. Here you have also fireplaces. Outdoor fireplaces are becoming important. This is going to be marketed starting in the spring of this year from April onwards. Very important, what differentiates us is our in-store, our In Design Center experience. We focus on interior design. Our objective is to combine personal service and technology. Those of you who went to our Danbury Design Center, it is very different than it was five years back. In the five years back, you entered into a furniture store.
Now you are entering into an interior design center where upfront, our interior designers, their workstations, the technology that they need, and all the products they need to create beautiful homes is there. On a planned basis, we are converting our design centers all over the country. Obviously, we started the process about a few years back, but we are accelerating it because it is working well, and it gets the message across what our business is. Our tools are there, whether it is from rugs or upholstery fabrics or the various different finishes that our consumers can utilize. The opportunity is to sell great products as they are but give the people the option and opportunity to expand it. Our interior designers are tremendously important. 2,000, I think, about 1,500 or 1,200 or so in our own retail network. They also determine how we run our business.
Because for me, these 2,000 or so interior designers, especially the ones in North America, are tremendously important. They are our credibility. We could sell our products to others. We can even sell online a lot of product at different price points. We always say, "We have got to maintain the credibility with the consumers and our own entrepreneurs." Because these folks are entrepreneurs. They are professionals, they are dedicated, and I think as we move forward, will even further differentiate us from competition. Customization is critical, but you got to also do it faster. Five years back, if you delivered a custom sofa in four months, they thought, "Well, we are doing pretty good." Today, they expect it in less than four weeks. Our quick-ship upholstery that you have seen in our design centers. On the average, it is delivered in 15- 18 days all over the United States.
Technology and the way we have established it, is possible today. We have also been, as you know, repositioning our interior design network. Most of these design centers, we acquired them from retiring retailers. 20 years back, we had practically none. We just had this Danbury Design Center, and maybe two or three others. Today, as you can see, almost 65%-70% are in North America, we are operating ourselves. We had to relocate them, because most of these stores were opened in the 1950s and '60s. Today, as you can see, 69% have been relocated in the last 15 years. Just to give you a little idea of what's happening with Corcoran.
We just opened, about a month or so back, we built, actually, this one, we had purchased this land some time back. We purchased this in Denver, Colorado. This happens to be about close to 12,000 sq ft, average today is about 10,000 sq ft versus 16,000 sq ft. As you can see, we got 140 company-operated in the U.S., and we've got six in Canada. We have 42 with our independent retail licensees, and the rest is international. Albany, New York is under construction right now. Again, a retailer with us, as a family, for about, I think close to 60 years, retired last year, second generation. We took it over, we had to move it. This is a real good location. Same thing in Iowa, River Landing. This is in Cedar Rapids, Iowa.
We are in the process of constructing it, moving it. We also are moving one in Tysons Corner. This is a premier premium location design center. We also just in the process of all of these are under construction in Ann Arbor, Michigan. Also, in Western California, in Rancho Mirage, is under construction right now. Internationally, we continue to make progress. As you know, China has been our major growth and also, of course, but also in the last year or so, there've been challenges in China. Having said this, they are actually opening, in the next two weeks, one of their main, this is our partner, Markor, in China, a flagship design center in Wuhan, China. Our presence is about 15,000 sq ft. Dan Growe is actually going there for the grand opening in a couple of weeks.
Next week, along with opening a design center studio in Cambodia, he's also going to go to the grand opening. He really has a great time visiting all these grand openings. Plus, he's also visiting a number of U.S. embassies, I'll talk about that, in which we have the State Department program. On internationally, China was also impacted with this possible tariffs. It impacted the consumers over there. The Chinese economy has been softer, something that, of course, you all know. You have been reading about it. Our marketing focus is to expand to get the message across about our offerings, get the message across we're an interior design company. Focus on our quality, craftsmanship, service, value, our social responsibility. The main channels that we are using are direct mail, the digital, television in some key markets, and grassroots.
I'll talk more about that. In March, in fact, we decided to give you a copy of our March direct mail, which is really talking about what I was referring to earlier, the three stories in style. Getting our message across. You're going to see that projected in our design centers, in all our communications. The fact that we can differentiate, we have the opportunity of reaching a larger consumer base with the three attitudes that we have developed. In everything we do, we talk about our social responsibility in terms of in everywhere. For instance, in our operations in Silao, Mexico, in Honduras. We operate with similar environmental and safety as we have in Vermont. Not needed, we believe that's the right thing to do, and it has tremendous benefits.
We have the lowest turnover because it takes about one year or plus to train one person to be an upholsterer. You don't want turnover. Creating that is important. Craftsmanship is critical. We are known for that. Complementary design service and home delivery, as I talked about earlier. This is the message they're getting across in this. This is our March direct mail. In March, April, and May, we'll be sending it out close to 5 million direct mail to our clients. This is again, I'm just using my terminology. Many of you may not know the three series. We've got to make sure the message gets across, that we are strong in this. This is the second attitude. That brings the whole world home to Ethan Allen. More options. Classic designs with a modern perspective. This one, where everything is possible.
It's even more options, even at a higher end. This is where people may have to go to interior design places to buy, we provide that opportunity for clients. As I mentioned, in key markets, we're utilizing local broadcast, that's TV. Last year, we spent a fair amount on national television. This year, that is not the case, and that's why all the questions is going to be about our advertising. Last year, we spent a fair amount of money on advertising. I'll talk about it. This year is going to be still strong, but not as much as we spent last year, because we're not going to have that major national television campaign that we had last year in our Q3 and Q4 of last year. What I would like to do is this.
We have a whole team working on technology and in our marketing, because today, technology in every element is taking over. I'd like to have Corey, because Corey really started in technology, and I put him in finance. He's got a broad background in technology, and ask him to talk a little bit about the technology.
Yeah. Thank you, Farooq. Well, for our marketing to be effective, we really need to know who our current and potential customers are. We are upgrading our CRM system, which houses all of our consumer data under the integrated Salesforce marketing system. This system will allow us to better target existing customers and prospective customers to generate additional traffic and sales, as well as to make our advertising expenditures work harder. Connecting with the CRM or our customer relations management system, is a data management platform, a social studio, and our marketing cloud. This integrated marketing system provides the ability to harness customer data from any source based on attributes, browsing behaviors, and purchase history to build personalized messaging to effectively drive awareness and frictionless experiences.
With that, our digital marketing campaigns target and reach consumers in every part of the funnel, building awareness, placing the brand in their consideration set, messaging for conversion, and focusing on loyalty with the repeat purchase cycle. Over the past couple of years, we've invested about $1.6 million in developing an expansive library of photorealistic 3D models of our products and related 3D software applications, including our 360-degree product viewer on ethanallen.com, our newly launched 3D Room Planner, and the Ethan Allen inHome Augmented Reality app. The AR app includes over 3,000 3D digital assets that are all to scale, showing how Ethan Allen products look and fit in the home. Augmented reality or AR superimposes a digitally generated image over a user's real-world view.
With the Ethan Allen inHome app, a customer can visualize products in their own home using an iOS or Android phone or tablet. Augmented reality is a unique way to engage customers and contributes to better purchasing decisions. It's also the perfect complement to working with our designers and is transitioning the retail experience for our clients. The 3D Room Planner is a tool for our designers that enables them to enhance the customer experience in the design center. The application allows the 2D- 3D rendering in high definition. A designer can also work with a client, not only in the design center, but also remotely with an online customer to create photorealistic room settings so the customer can visualize how their room will look, easing the path to purchase. Combining technology with personal service starts online with our live chat tool on ethanallen.com.
Over 600 of our Ethan Allen design professionals connect online client activity with the brick-and-mortar design services. About 75% of sales derived from chats move offline into our design center channel. Very effective in starting the process and then continuing it in our brick-and-mortar, taking online, brick-and-mortar, and combining them together. Farooq.
Thanks, Corey. As you can understand, it's an integrated team that does it from a technology to our marketing team, and is very, very important in terms of reaching more customers today. Continuing with that, I was talking about our local marketing. One of the major focuses that we have is grassroots marketing with our 1,200 interior designers, really our 1,200 ambassadors. Giving them the tools to reach clients in their local market is critical, and that's where a lot of the focus is in terms of having designer showrooms, special events. All of that is taking place all over the country, and we'll accelerate it as we go forward. I also mentioned that in addition to our main focus on Ethan Allen, as you know, we only market our products to our Ethan Allen network.
We have been tempted to go and sell our products to others. As I said, our focus is to do right and to make sure that we also treat all our clients and our own internal entrepreneurs with dignity, and also make sure that they see a future. However, where we have found the opportunities is in the Department of State, where we have had, as you know, we've done well, and I'll talk briefly about it. We have also been involved with hospitality, in some real estate resort communities and others. The GSA, Department of State is a five-year program. First year and a half, as you know, is public, that we have to be involved and go and compete with a company that was, for a fair part of last year, under bankruptcy.
They had made a lot of product inventory, and they were selling it and actually bidding on it at prices that were pretty low. We decided that we'll bid, and we won most of them, but the result was that it did impact on sales and profitability for that program. Now starting late December and onwards, we have been able to bid, and we are getting a fair amount of the business and margins that are much, much higher than we did last year. It is a brand that is known and preferred. As Dan said, in addition to going to these grand openings, he will be visiting a number of embassies. In fact, one of our associates, which is also right now coming back from Armenia and Georgia, and we just had a discussion with somebody in Tajikistan.
All of these, interestingly, had American products supplied by companies that are no longer in and out of business. They came to us. We are working with them to establish Ethan Allen Galleries in the whole of Central Asia and other countries as well. You've also heard about our involvement with the Margaritaville program. The main one right now is in Orlando. There's 1,000 vacation homes and a hotel, which we've just furnished as hotel, 200 rooms. The 1,000 homes are about $17,000 per home, so approximately $17 million of opportunity. We're also in the process of discussing future locations with the Margaritaville hotels in the country. We also have some contract. We will expand it. We have a master sleeper program with Disney, where all the sleepers are. At this stage, they have a master program with us.
I also want to talk about manufacturing. We are a vertically integrated company, it also has an impact on our financials. We have a great operating leverage and business increases, on the other hand, our operating margins are impacted if we don't keep our manufacturing busy. It's a balancing act that we have to do. A lot of folks in our industry, hardly anybody has as much manufacturing as we do. If the business is slow, it's somebody else's problem. We've got to keep our people busy. If they're not busy, it impacts on our profitability. As you've seen in the past, the vertical integration has a tremendous opportunity for growth, we've got increased sales. We have, at this stage, operations in four major areas. Vermont is where, of course, where Ethan Allen started.
We have a strong wood manufacturing from a sawmill to manufacturing. Our big major area in our upholstery is in North Carolina, where we have three major plants. We opened up a 40,000 sq ft plant, Valparaiso in Silao, Mexico is now 600,000 sq ft, 1,000 people, which is an upholstery plant, and went to Honduras to establish a wood plant from zero- 500 people right now. We are well set in North America. Our focus is to manufacture, to have it under control. Over 70% of our products are made in our own workshops in North America. These are some of the plants that I mentioned. In Vermont, in North Carolina. We also have a plant in Passaic, New Jersey, that does some of our accent products. Technology is critically important. We have invested a great deal for all these years.
As you know, the good thing is we own all the facilities. All our manufacturing is owned by us. Where we've had investing is in technologies. That has an impact in terms of making it efficient and better quality. We just, in the last three years, spent $11 million all just in new equipment. A lot of this, in fact, we're also able to purchase from companies that are no longer in existence, so we can get it at good values. In addition to our products, a lot of our accent products are made offshore. Whether it is in Indonesia, some even still in China, India, Italy. We also are very strong in making sure that our standards of safety and social responsibility are met. Otherwise, we don't do business with them. Logistics is critical in our business.
As I mentioned earlier, we operate a wholesale network which goes from our manufacturing to our national distribution centers, and from there to our retail service centers. We have approximately 1 million sq ft of distribution centers. Now, keep in mind, we would require for our volume, most likely at least 2x or 3x the size if we didn't do as much custom. That product, we don't even warehouse. That product is made, in fact, all our upholstery, which represents close to 55% of our total business, is made one at a time. No finished goods inventory. Big difference. Our wood products also, almost half of that is custom. Again, we make it when we get the order. We have to make sure we have the parts and inventory. That has an implication on inventories and also has an implication on our logistics.
From our national distribution, it goes to our 28 retail division service centers. We go from our manufacturing to our national distribution centers and from there to our retail, then it is delivered, you might say, a white glove service to our consumers. I briefly have been mentioning about social responsibility. All this information you have available to you, that we have focused on sustainability. 2010, we implemented American Home Furnishings Alliance environmental management standards. You can see in terms of the amount we have reduced carbon footprint by 34%, electrical usage by 10%, water usage by 21%. Recycling is up 13%. Greenhouse gas are down 27%. Landfill waste is down 15%. If we had not been doing this for the last 15, 20, 30 years, it would not be possible. This is a great focus across our enterprise.
For instance, with Shrink Smart, we used to buy cottons. Whether the product was 50% the size or 60%, we used that cotton. Today, all our packaging is customized. That reduces a tremendous amount of waste. It reduces the amount of space we have in our trucks. It reduces the space in our distribution centers and work centers, and is good for environmental and sustainability. Again, switching to LED. We have re-lamped 90% of our distribution center. It has a tremendous impact in terms of less energy, and also these bulbs last a long time. The focus on our code of conduct in all areas, whether it is, as I said, we have a strong focus on social responsibility. We have a Senior Executive, that's their main job, and to make sure we take a look at all the companies we're dealing with.
We don't want any child labor. We want to make sure that the people are not using involuntary labor. Health and safety, certainly in our own operations, is important. For instance, when we went to Mexico, I found that those folks had to travel two, three hours to get to our plants. We now operate 27 buses. We bring them in. It's good for our profitability because we get people who are not spending three hours traveling. Similarly, we also run the health clinics, even in North Carolina, in Mexico, in Honduras. All of those are very, very important in terms of maintaining people. We talked about our international labor standards. Rigorous implementation is tremendously important. We audit. We use outside companies like Elevate and Intertek, comprehensive non-harassment and non-discrimination policies in all our organizations.
Just in terms of our stockholder, obviously, people are more interested in what we've done recently, I like to show that we have paid over $400 million in dividends, including, of course, a strong one, the $41 million just in the last seven months. We have also purchased a lot of shares. 42% of our company, we repurchased. I was just mentioning that when I took the company private, and J.P. Morgan, when I meet Jamie Dimon, I do remind him that we had taken the company private with 90% debt, up to 18% interest, and I know how we survived. We did, and we then, for the next 12, 15 years or so, generated $2 billion of free cash, we're able to do this. Comes the great recession, that we are still in the process of fighting it.
We have purchased a lot of shares, over $600 million of shares. Capital expenditures have been important. Keep in mind, we owned all our properties, so all our expenditures, to a great degree, has been to improve what we have. I mentioned also this 73% increase in dividends in the last seven months, including a $1 special dividend that we gave. Six months of financials, you are familiar with it. I wanted to just briefly. Corey, you have some information for me? I just want to say that to give a little bit more than this. You're familiar with it. Let's see. I asked Corey to give me a little bit information about our. For six months, our gross margin was at 54.6% versus 54.8% the previous year. Our operating income at 7.3% was at 7.8% in the previous year.
Was impacted to some degree by our business with the State Department, somewhat lower shipments. In the past, we have been operating at much higher operating margins, which we have an opportunity. Our cash flow has been good. We have continued to pay dividends. I think that as you move forward, you will see that. I also want to briefly talk about this opportunity scenario, some of this, as you have been listening to and seeing it for a long time, that we believe this is an opportunity. This is where the focus is. That is at a $900 million- $1 billion, which is not that far from where we are. We have an opportunity of doing an operating income of about close to 11%-12%.
Keep in mind, before that we had even higher, but at that time, we didn't have as much retail sales. Most of our sales used to be wholesale sales. When you combine the retail sales, our gross margins improve, but operating margins are somewhat lower. We have that opportunity, and that is really where our focus is, too. You can see the leverage of EPS. At $900 million, you're talking of $2.71, and $1 billion at $30.38. I believe that with all the things that we have done, our next opportunity is to have between A and B in a relatively short period of time. That's what our objective is. With that, I thought what we'll do is we'll open it up for any questions that you might have. Corey, how did we do in the folks on the webcast? How did they get on? Okay.
He said there was a two-way on there. All right. If you could please identify yourselves so that the folks on the webcast can hear who's asking. Please.
I'm sorry. Hi, Cristina Fernández from Telsey Advisory Group. I wanted to see if you can expand on marketing, which is a big topic. You mentioned today more efforts on grassroots marketing. Perhaps you can share a couple of details about what plans or what will the interior designers do to be able to make that more of an effort. Also, perhaps some comments on social media influencers. How are you using marketing on that aspect?
Yeah, I think this is a very important question, the more we look into this, the opportunities of getting us more visible at the local level is important. What we are doing is we are looking and providing tools to our designers that they can utilize in the local markets. We are using, in fact, many of these 1,200 designers are the influencers. We are giving them the tools to be as an influencer in their markets. They are doing it in terms of using the digital. All of them have their own social media sites that they utilize, our objective over here is to provide them with the tools. Bridget DePasquale, she is the Vice President of Marketing. She's deeply involved with that very important question. Yeah, please elaborate on that.
Absolutely. No, I'd love to. Thank you. Our designers, obviously, it's all relationship-based with their clients, and it's also relationship-based with their community, so they do a lot of social networking. They have Instagram handles. They love Pinterest. It's very hyper-local at the design center level. They have events in their design centers or even out in the community where they're sharing their trade and giving information on trends and inspiration. They're very proud of what they do in their communities, and we like to give them everything that they need, whether it's branded images or assistance with any of the new social medias and tips and tricks and trends.
We're constantly communicating with them and showing them what's new, and they're communicating back and showing us sometimes what's new, since we've been bringing a lot of the younger designers on board, and they've been sharing their information with us. Local grassroots is key. It's important. They love being in their communities, and we've seen a lot of positive interaction and benefit from it.
Well, I'll also say, Cristina, that every week, and actually it was last Sunday, yesterday, about 60 of our management associates send a report. Most of them don't report to me, but they send a report, and they talk of five things, and this relates to also the question that you have asked. First thing, they have to give a report on what have they done to improve talent, to motivate people. Second thing is what they have done in marketing, especially local marketing from the field. Third, they talk about what they have done in improving service. Fourth, they talk about what they have done in incorporating technology, and fifth, they talk about what they have done in social responsibilities. Every week, 52 weeks a year. They also give what we then utilize, we call it internally a wow event.
The designers give information on what they have done to wow the customer, whether in the design center or outside or through the grassroots medium, and every week we get at least 100+ of those. In fact, they are posted for everybody else to see, because you got to create that culture.
I have a follow-up on the marketing, but from a financial perspective. Last year, you spent a lot on marketing. If my numbers are right, about 5.7% of sales or so. This year, it's going to be less. With those savings, could we expect those to flow through the bottom line, or would you reinvest some of those savings in other parts of the business?
The last year. You're talking of the Q3 , right? Last in the Q3 , we spent 7.6% on advertising. We spent about the same in the Q4 , reflecting those two quarters, we used a very strong national television advertising. This year, we will have strong advertising because we have been running the past quarter at about 4% or so. In the next two quarters, at this time, for planning purposes, we'll do about 5%, not 7.6%.
Bobby Griffin with Raymond James. For today, we talked a lot about widening out the product portfolio, different styling, more modern, more price points. Can all that be accomplished though, in a 10,000 sq ft store on average, or is there an opportunity that we might see some larger stores going forward as you continue to relocate the portfolio?
No, I think that's a very good question. If you are in a business of selling a product as a commodity, you need large stores. If you have sales for people who are selling it and not with an interior design background, you need larger stores. Because of our business model, in fact, we had 15,000, 16,000 sq ft stores. Today, the opportunity of selling in a smaller space is tremendously important for lots of reasons. If we didn't have the tools today, you went to the design center and you saw that at every interior design station, they had a screen, and they have tablets. Today they can show products and designs, which only 10 years back, you had to show on the floor.
If you're a seller of a product as a commodity and they cannot develop designs, they cannot show you other options, you have to show it. Not in our case. That's a great advantage, and that's why we have been able to relocate as many of these stores. For instance, I just mentioned Tysons Corner. Tysons Corner, Doug, it's about 10,000 ft. Where's Doug Dieffenbach? Doug, the new one is 10,000. Yeah, 10,000 against what, 20, or what was it? 18,000. This is a key market in Tysons Corner in Washington area. We've gone from 18- 10, but a much stronger area and location. Yeah.
I guess as a follow-up, how should we think about store growth opportunities in absolute numbers over the next couple of years? Are you comfortable with the size of the portfolio today? Is there opportunity to add three, five stores a year going forward? How should we think about that?
I think what you've got to think about it is that we got to do a lot more volume from what we have. The day is gone when you thought that the more stores you have, somehow you're going to get more business. You can get more expenses. Our focus is, we're going to continue to relocate stores. For instance, right now, we just had to make a decision in Green Bay, Wisconsin. We've had this for maybe 70 years. We have some independent family. 50, 60 years was okay. We had to make a tough decision because we have one in Milwaukee. We have one that we are looking at in Madison, Wisconsin. Putting them in the right places becomes more important. In some cases, where we had two locations close by, one is more important than two.
We're not going to have a lot of new stores, but we're going to have stores in the right locations, and we got to do a lot more business. That's also important for our designers and our profitability. Any more questions, comments? While you're thinking and eating, which is good. We've gone through such tremendous changes, not just for our home furnishings. We talked about everything in retail. When you take a look at the chaos that has taken place in brick and mortar. When you say to yourself, how are you going to increase your sales? How are you going to be better? I think that for us, our focus on providing great offerings, reaching a larger consumer base with professional interior designers, controlling the quality of the products, and then we've got to get the message out even more.
We've got to get more people into our design centers. You see, today, traffic is down because people are window shopping on the internet. We used to have 3,000 designers 12, 15 years back. 3,000. Half of them were basically there helping people window shop. A good thing is they're more productive, but on the other hand, we need to get them to our design centers. Our business' model is not just for them to sell online. We have increased our online business by, I think, an average of what? 50% a year. Still small, but 50% increasing every year. Corey talked about chat. They chat, and then they come to our design centers. When you look at our online, you think that somehow we should be doing a lot more.
When we bring them into our design centers and work with our designers, that's what we prefer. That's where the opportunity is. Yes, please.
Thanks, Farooq. Dillard Watt with Stifel. Wonder if you could talk a little bit about your international markets. Canada and China had been a challenge, but perhaps some of that is short-term due to some of these international trade discussions.
Yes. This is an important question because we have a great partner. As I said, they're just in the process of opening up a great, big, huge, maybe 150,000 sq ft store in Wuhan. This is the largest presence of Ethan Allen. They are 15,000 sq ft. They've invested a great deal. They're also finding in China that consumers are somewhat cautious. There is a lot more competition than they had four or five years back. The business has been impacted. The business was also impacted in China with some attitudes about America. With this trade war going on, people were somewhat, in the back of their minds, were even thinking better, how does it affect American products? All of those factors affected our business, but I think that we have a great partner who's investing, who wants to show to increase our business.
I think that after this period in the last six, nine months of going down, the chances are they will go up. We have other partners, smaller, but opening up, whether we opened up design centers in Korea, in Bangkok. I just mentioned Cambodia. We have a number of them in the Middle East. We talk of Middle East, they've also been affected. Business in Middle East has been tough. We have a design center in Kuwait, in Saudi Arabia, in Doha, Qatar, in Dubai, all these cases, and Jordan. Those were impacted. What we hear is that now they are starting to go back up from the bottom. Cristina. Yeah, go ahead, Cristina.
Yeah. Hi. I have a couple of follow-ups. On the Margaritaville opportunity, you talked about it, $17 million over three years. I think it's the same number you gave last year. Where are you on that three-year period in being able to capitalize on that opportunity?
Daniel M. Grow, Corey Whitely, how much have you received in Margaritaville so far? $3 million, or what? What was the number?
Oh, excuse me. We're right now on the total Margaritaville program, probably right at $3.5 Million.
Okay.
We have two new hotel-
$14 million to go. All right.
Yeah.
Okay.
Great.
Yeah, go ahead.
One more. One thing that seemed new to me today was the outdoor living, where you talked about expanding meaningfully that assortment. Can you give us a sense perhaps on SKUs, how many more, or floor space where that could make a difference in your design centers?
Yeah. I'll just tell you this, that in fact, I had Craig Stout, who gave a presentations. Craig, of course, has been with Ethan Allen for a long, long time as a senior merchant, and he's now responsible for our furniture merchandising. He talked about the fact that the opportunities we have in expanding that is major. We introduced this, I'm just using my terminology, the attitude, the three attitude. We said in January that, "Let's promote it." If you get it, take a look at a program that we call Start Something Amazing, in which we basically focus on those with objective of reaching, you might say, the newer customer, the younger customer. It has been a major impact. It is not just a question of products. You're going to see some products, more introductions.
We are also looking at products that we can make right here in the United States. We have a tremendous opportunity in Vermont. We have a sawmill. We have access to forests and lumber. You're going to see us utilizing our American facilities much more fully than we have done in the past.
Okay.
Yeah.
Bobby Griffin again with Raymond James. Can you give us an update on the Amazon partnership? Is there any plans to expand the number of SKUs on Amazon? I guess lastly, will the new Relaxed Modern collection that we saw, will that be offered on Amazon to maybe address a little bit younger of a consumer that could be interested in that product? Thank you.
Yeah. With Amazon, we have sort of downplayed it for a number of reasons. First is that they have been very aggressive in developing a lot of products themselves. Secondly, our model is different than more or less what they do, and they're doing it very successfully. That is, they buy the product, they sell the product. We don't do that. We want customer to experience Ethan Allen in terms of our deliveries, of our designers. Because of that, we have been very sort of a low-key and not very aggressive. Our focus really is, even the folks on Amazon who come there, we believe they end up coming to Ethan Allen site and chatting with our designers and coming to our design. That's what we really want.
I think our business model really is to reach customers ourselves and not to sort of commoditize our business by these external websites.
Hi. Joe Feldman, Telsey Advisory Group. Are you seeing anything new or different on the competitive front? If there's a need to promote more or if people are not valuing the quality as much as they used to?
I mentioned by saying that commoditization. I said globalization, commoditization, and the technology. That has affected every business. In our case, what it's done is it has commoditized by having folks sell furniture as a commodity. That has resulted in a lot of people who are making better quality using some service. A lot of them can't make it. Nothing in furniture, it is something in every category. That creates an opportunity because the more commoditization creates an opportunity because customers are looking for an experience. An experience of service, an experience of quality. If you meet our clients that come in, they get surprised. We just have to get more people. I think we've gone through a stage, in my view, of commoditization in the last, what, 10 years or so.
You see the effect on the Toys "R" Us, and you've seen the effect on even JCPenney set up. They're not going to have furniture. All these mass folks have been replaced by commodity sellers who are selling the product as a commodity. In fact, Walmart is getting into furniture. Right? What it does is creates competition. We always had competition. What the positive thing for us is that better quality and service, there's not much competition. That gives us an opportunity. That's why our focus is on that.
Thanks. Actually, could I follow- up with-
Yes, Joe
Another one? Since you've changed the front and the feeling of the stores, have you seen a difference in maybe usage of the interior designers, or any change in behavior of customers and how that's helped to drive sales?
It has, you see what's happened is continuously, which is a challenge, that traffic is down because the fact people today are doing a lot of their window shopping and shopping online. We, in fact, are increasing our business online by chatting. We had it in the last week, somebody purchased, I think, $70,000, one of our design centers, just on chatting with our designers. Think of that. You could not imagine that could take place. That's a high number. Generally, it is $5,000 or $10,000. Still, we want them to come and experience because our designers take a customer and turn them into a client. That's our difference. All right. I think that I'm very, very glad that we had this opportunity, and I know that lots and lots of folks are listening or seeing it on webcast.
A number of our board members are on this. This is very important because I believe that this meeting is important because it really positions and gives us the opportunity to discuss the positioning that we have done for a long time. We are more ready today than we were even the last year. Thanks very much for coming and participating.