Bassett CEO: 3 strategies drove Q2 return to profitability

With inflation, tariffs and political uncertainty all stubbornly weighing on the industry, Henry County-based Bassett Furniture managed to buck the trend, posting a return to profitability in its second-quarter earnings report.

In an earnings call on Thursday, Bassett CEO and Chairman Rob Spilman Jr. outlined three ways the manufacturer is working to overcome headwinds and drive growth.

He said the company is leaning into the design side of the business, streamlining its marketing strategy with a renewed focus on e-commerce, and expanding into new brick-and-mortar markets to broaden its footprint.

“We are somewhat late to the party on this whole migration of the business to the design strength that, according to the officials in High Point, over 60% of the attendees now are designers,” Spilman said. “This is a big shift in the higher end of the market, and there’s a whole section of town that is dedicated to the designers.”

He noted that Bassett’s long-standing custom manufacturing capabilities position the company well to meet that demand.

“What we do every day in our stores, with our dedicated distribution, is to make things one at a time and on a custom basis quickly — and it’s exactly what designers are looking for,” he said. “We do [customer’s own material]. We do a lot of things that designers use every day.”

Spilman reported that sales in the design trade channel rose by double digits in the quarter, adding, “The progress is always slower than we want, but we’re seeing positive traction.”

“We are doing things with our systems and management and bringing on a couple of new folks to get really noticed in this area,” he said. “So stay tuned on that because we really think we could grow that channel.”

He also pointed out that tariffs have been less disruptive for the designer segment compared with retail.

“I don’t think the tariffs have really impacted the design business very much,” Spilman said. “Retail is so cost conscious and has such a tight set of operating metrics, but designers are really focused on two things: having great product lines and delivering great service and communication. Those are kind of the basic tenets of being successful there.”

New markets for brick-and-mortar

Bassett is also investing in expanding its physical retail footprint as part of its long-term strategy.

“We are moving ahead with architectural plans to open in two new markets, Cincinnati and Orlando, [Florida],” Spilman said. “We plan to start construction this fall in both locations and expect to have these stores open in the first quarter of fiscal 2026.”

He said the company sees opportunities to serve customers in those regions with a combination of showroom experiences and local delivery capabilities.

“Our Concord, N.C., corporate store has been closed since April for remodeling and will reopen in October,” he said. “We’re excited to get that location refreshed and back in operation before the holiday season.”

Marketing tweaks

Spilman said the company has been focused on evolving its omnichannel strategy to keep pace with changing consumer habits.

“We are looking forward to getting a large product introduction from the April show on the retail floor this fall as we felt we had a particularly strong market of placements in April,” he said. “Those new collections should give us fresh stories to tell in both digital and in-store channels.”

He pointed to significant growth in online sales as evidence the strategy is working.

“Written sales at bassettfurniture.com were up 31% in the quarter versus last year, despite the housing issues,” Spilman said. “This follows an increase of 36% in Q1, so we’re very encouraged.”

While website traffic was relatively flat, the company achieved better conversion rates through a combination of targeted campaigns and site improvements.

“We continue to tweak the technology drivers to improve traffic, improve the user experience and improve our site conversions,” he said. “We made changes to our marketing mix in the second quarter to drive brand awareness, introduce new product lines and emphasize our customer design services.”

Spilman said the company shifted away from an exclusively digital approach to one that also leverages traditional marketing.

“Last year we relied exclusively on digital marketing for the quarter,” he said. “This spring, we had success in using direct mail for the launch of the Copenhagen line and that is now part of our marketing strategy for the remainder of the year. We also tested spot TV in key markets with mixed results.”

Bassett also adapted its targeted sales tactics on a key holidays in the quarter, Spilman added.

“We brought back our private sale to key customers three weeks ahead of the public Memorial Day sales event, he said, “allowing them to get ahead of the rush and have more opportunity at inventory.”

As Bassett looks to the second half of the year, Spilman emphasized that the company would continue honing its approach as it navigates and adapts to a difficult market.