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Tag: Bassett

Bassett Furniture reduces workforce by 40

Bassett Furniture has announced a series of layoffs and retirements in a bid to better match its cost structure to the current rate of business, the home furniture manufacturer and retailer said in a news release Wednesday.

This round of reductions, which included layoffs, early retirements and attrition, impacted 40 workers. Since the start of the year, Bassett has reduced its workforce down to around 1,250 workers from 1,400, an 11% reduction.

The workforce reduction is inline with its restructuring plan announced last July. Initially projected to save the company between $5.5 million and $6.5 million annually, these layoffs will now allow for savings between $8 million and $9 million, Bassett said. The company expects to record a $500,000 severance charge in the current quarter.

“The cutback announced today reinforces our commitment to press on with the restructuring plan we announced back in July,” Bassett CEO Rob Spilman said in a statement. “These decisions were quite difficult as several long-time associates were involved. While we have not seen a measurable uptick in orders, the actions that we have already taken have begun to yield better results.”

The restructuring plan has five points:

  • Drive organic growth through Bassett-branded retail locations, omnichannel capabilities and enhanced customization positioning to expand dedicated distribution footprint.
  • Rationalize U.S. wood manufacturing from two locations into one primary location, supported by a small satellite operation.
  • Optimize inventory and drop unproductive lines.
  • Improve overall cost structure and invest capital in refurbishment of current retail locations.
  • Close the Noa Home e-commerce business.

“Specifically, we have completed the consolidation of our Virginia-based wood production facilities and have seen better performance from the remaining concern the past two months,” Spilman continued. “Noa Home, our Canada-based e-commerce furniture foray, has officially shut down, and we are liquidating remaining inventory …

“We received several new commitments for our Bassett Design Studio concept at the [High Point] Market, and our e-commerce sales have consistently grown the past five months. We head into fiscal 2025 with our strong balance sheet intact and resolved to improve our financial results no matter what the overall economy presents.”

Bassett has struggled to remain profitable as of late, having reported losses for the past five quarters.

Bassett Furniture names new chief marketing officer

Home furniture manufacturer and retailer Bassett Furniture has named Tony Chivari as its new chief marketing officer.

Chivari has held similar positions with 1-800-Flowers.com, Gem Shopping Network and Things Remembered.

“We are very excited to welcome Tony to the Bassett team as we continue our journey to become a national omnichannel provider of home furnishings,” Rob Spilman, Bassett chairman and CEO, said in a statement. “Tony has worked with our digital marketing and e-commerce organization for most of 2024 as a consultant, and we mutually concluded that the opportunity to grow Bassett’s business would be better served by Tony becoming a full-time member of our team.”

Before Bassett, Chivari was CEO for Atlanta-based Whimsical Gifts. He’s also worked as an independent consultant, marketing leader for 1-800-Flowers.com and president of Gem Shopping Network.

“In addition to the good work already underway on the digital front, Tony will lead a comprehensive review of our brand strategy across all media where we market our broad range of transactional and custom-designed products,” Spilman continued.  “We are excited by the progress that we have made this year and believe that Tony’s leadership will place the Bassett brand on a path to future growth.”

Bassett reports Q3 loss, with performance hurt by cyberattack

Bassett Furniture reported $75.6 million in consolidated third quarter sales, a 13.3% decline from last year and a 9% drop from last quarter. It also recorded an operating loss of $6.4 million, its fifth consecutive loss. The overall loss included a $1.2 million loss on a logistical services contract the company chose to abandon to help it save costs.

Net wholesale sales fell 16% to $47.8 million, while retail sales fell 9.6% to $47.3 million.

Gross margin was 53%, which included $600,000 in manufacturing wages paid during a one-week manufacturing shutdown in July due to a cyberattack. Excluding the wage charge, gross profit margin would have been 53.8%, a 1.1% increase over last year.

“The integration of our industry, with the weak housing market, continued to pressure sales during the quarter,” CEO Rob Spilman said on an earnings call last week. “Although mortgage rates started to ease since the Fed’s 50 basis point rate cut three weeks ago, overall housing affordability and inventory affordability remain impediment in the short term.”

Besides the cyberattack, Spilman highlighted two other external events that impacted the quarter: Hurricane Helene and the East Coast port strike.

“Many customers and employees were deeply affected by the hurricane,” he said. “It impacted our distribution center in Catawba County, North Carolina, which was shut down to damage and power outages in the first week of October. We have recovered as quickly as possible. The longer-term impact on logistics and distribution is related to the damage to the I-40 infrastructure, which is our main route to the West. And while the East Coast dock strike was just three days, the impact on our business has pushed shipments back one to two weeks.”

Revenue in both segments was down, with greater pressure on retail, due to a higher level of fixed costs, Spilman said.

“Heading into the quarter, our Memorial Day event and Fourth of July event produced increases over last year, but the ‘in-between’ weeks were especially difficult as consumers stayed on the sidelines,” he said.

The 9% drop in wholesale sales was attributable primarily to a 22% decrease in shipments to the open market, a 13% drop in shipments to its own retail stores and a 6% drop in lane venture shipments. Gross margin rose 50 basis points, primarily due to improvements in club leather.

In retail, despite a 5% sales drop, gross margin improved due to “higher home delivery income and better margin on clearance inventory.” Spilman said the average retail ticket was $3,900, up 5%.

Inventories were down more than $10 million year-over-year, and slightly down sequentially, which Spilman says reinforces the company’s belief that it can run with leaner inventory.

Finally, the company highlighted its ongoing restructuring plan, which should help save costs of between $5.5 million and $6.5 million per year starting in fiscal 2025.

“We are running a leaner operation, reducing expenses and investing in new products and services,” Spilman added. “We are committed to returning to profitability.”

Manufacturing 2023: ROBERT H. SPILMAN JR.

Spilman, who has been CEO of home furniture manufacturer and seller Bassett Furniture since 2000, said in March that the company has fulfilled a large backlog of orders and subsequent supply chain disruptions created during the pandemic. In the second quarter, consolidated revenue declined by 22% compared with last year, although the reported $100.5 million in revenue was nearly 5% above the same period in 2019. The company plans to launch a revamped website before the end of August.

Spilman, a Vanderbilt University alum, has been with the 121-year-old company for nearly 40 years and succeeded his father, Robert H. Spilman Sr., as CEO. He also is lead director for Dominion Energy’s board, serves on the Virginia Foundation for Independent Colleges’ board and previously chaired New College Institute’s board.

In 2022, Bassett finalized the sale of its Zenith Freight Lines hauler subsidiary for $87 million to J.B. Hunt Transport Services, which will still deliver furniture for Bassett. The company now has about 100 retail locations in the United States.

J.B. Hunt to acquire Bassett Furniture subsidiary for $87M

A subsidiary of Lowell, Arkansas-based transportation company J.B. Hunt Transport Services Inc. has entered into a definitive agreement to acquire a subsidiary of Bassett-based home furniture manufacturer and marketer Bassett Furniture Industries Inc. for $87 million, the companies announced Monday.

J.B. Hunt Transport Services’ wholly owned subsidiary, J.B. Hunt Transport Inc., will acquire Bassett Furniture’s wholly owned subsidiary, Zenith Freight Lines LLC, in a transaction expected to close by Feb. 28. J.B. Hunt will fund the transaction with its existing cash balance.

In the 2021 fiscal year, Zenith posted $87 million in revenue, with Bassett representing one-third of its business. Zenith is based in Conover, North Carolina and provides specialized less-than-truckload transportation services for furniture manufacturers and retailers. Zenith performs more than 250,000 moves annually and has about a million square feet of warehouse space.

“The sale of Zenith opens an exciting new chapter in our quest to provide the highest level of service to our customers,” Bassett CEO and Chairman Robert H. Spilman Jr. said in a statement. “As discussions with J.B. Hunt progressed, we came to understand the benefits that the scale of J.B. Hunt could provide in terms of equipment, technology, driver recruitment, intermodal transportation and warehousing density.”

Zenith founders Jack and Debbie Hawn will join J.B. Hunt, and Zenith will be part of J.B. Hunt’s Final Mile Services segment, which has 116 locations and more than 3.5 million square feet of warehouse and facilities space.

Upon the transaction’s close, the two parent companies will enter into a master services agreement in which J.B. Hunt will continue to provide Zenith’s service to Bassett for almost 50 years.

“This investment enhances J.B. Hunt’s furniture delivery capabilities by expanding our nationwide end-to-end supply chain solution for our customers, and we look forward to establishing a long-term connection with Bassett, a manufacturer and retailer of high-quality home furnishings and a leader in the industry,” J.B. Hunt President and CEO John Roberts said in a statement.