Bassett Furniture Industries, Incorporated engages in the manufacture, import, and retail of home furnishings in the United States. The company operates in three segments: Wholesale, Retail, and Logistical Services. It is involved in the design, manufacture, sourcing, sale, and distribution of furniture products to a network of company-owned and licensee-owned Bassett Home Furnishings (BHF) retail stores, as well as independent furniture retailers; and wood and upholstery operations. As of January 21, 2016, the company operated a network of 93 stores, including 60 company-owned and 33 licensee-owned stores. It also provides shipping, delivery, and warehousing services to customers in the furniture industry. The company was founded in 1902 and is based in Bassett, Virginia.
(Summary) (Company) (Chart)
2 October 2016
1yr Target $28.67
Payout Ratio 24.34%
1yr Cap Gain 23.31%
1yr Tot Return 24.90%
EPS (ttm) $1.52
EPS next yr $1.67
Forward P/E 13.95
EPS next 5yr 16.00%
1yr Price Support $26.72
Market Cap $251.10 Mil
Revenues $440.10 Mil
Earnings $16.60 Mil
Profit Margin 3.77%
Quick Ratio 1.20
Current Ratio 1.90
1yr RevGR 26.46%
3yr RevGR 16.72%
5yr RevGR 12.86%
1yr EarnGR 116.09%
3yr EarnGR -7.87%
5yr EarnGR ---
1yr DivGR 12.5%
3yr DivGR 30.68%*
5yr DivGR ---
Bassett is a leading vertically integrated manufacturer, importer and retailer of high quality, mid-priced home furnishings. With 93 Bassett Home Furnishings stores in November 28, 2015, they have leveraged their brand name in furniture into a network of corporate and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories.
Bassett created their store program in 1997 to provide a single source home furnishings retail store that provides a unique combination of stylish, quality furniture and accessories with a high level of customer service. The store features custom order furniture ready for delivery in less than 30 days, more than 1,000 upholstery fabrics, free in-home design visits, and perfectly coordinated decorating accessories. The company believes that their capabilities in custom furniture have become unmatched and their manufacturing team takes pride in the breadth of its options, the precision of its craftsmanship, and the speed of its delivery. Sales people are referred to as Design Consultants and are trained to evaluate customer needs and provide comprehensive solutions for their home decor.
In order to reach markets that cannot be effectively served by their retail store network, the company distributes their products through wholesale channels including multi-line furniture stores, specialty stores and mass merchants. They use a network of over 25 independent sales representatives who have their own specific geographical territories. These sales representatives are compensated based on a standard commission rate.
For several years the company owned 49% of Zenith Freight Lines. During that time the strategic significance of their partnership rose to include the over-the-road transportation of furniture, the operation of regional freight terminals, warehouse and distribution facilities in eleven states, and the management of various home delivery facilities that service Bassett Home Furnishings stores and other clients in local markets around the United States. On February 2, 2015, Bassett acquired the remaining 51% of Zenith, which now operates as a wholly-owned subsidiary of Bassett.
The acquisition of Zenith brings to the company the ability to deliver best-of-class shipping and logistical support services that are uniquely tailored to the needs of the furniture industry, as well as the ability to provide the expedited delivery service which is increasingly demanded by the furniture industry.
In September of 2011, the company announced the formation of a strategic partnership with HGTV (Home and Garden Television), a division of Scripps Networks, LLC, which combines Bassett's heritage in the furniture industry with the penetration of 96 million households by HGTV. As part of that alliance, the in-store design centers have been co-branded with HGTV to more forcefully market the concept of a “home makeover”, an important point of differentiation for Bassett stores that also mirrors much of the programming content on the HGTV network. In October of 2015 Bassett announced the extension of that partnership with HGTV through 2019.
Structural Alignment of Operations
Bassett has been strategically aligned along three reportable segments: Wholesale, Retail and Logistical services.
Wholesale Operations. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of BHF stores and independent furniture retailers. The wholesale segment accounted for approximately one half of net sales, excluding logistical services, during fiscal 2015, 2014, and 2013, respectively.
The wholesale furniture industry is very competitive and there are a large number of manufacturers both within and outside the United States who compete in the market on the basis of product quality, price, style, delivery and service. Additionally, many retailers source imported product directly, thus bypassing domestic furniture manufacturers and wholesale importers. Bassett believes that they can be successful in the current competitive environment because their products represent excellent value combining attractive prices, quality and styling, prompt delivery, and superior service.
Retail Operations. The retail furniture industry remains very competitive and includes local furniture stores, regional furniture retailers, national department and chain stores and single-vendor branded retailers. As a whole, the Bassett store network, with 60 company-owned stores and 33 licensee-owned stores, ranks in the top 30 in retail furniture sales in the United States. The company plans to continue opening new stores, primarily in underpenetrated markets where we currently have stores.
Logistical Operations. Zenith is a specialized supply chain solutions provider, offering the home furnishings industry the benefit of an asset-based network to move product with greater efficiency, enhanced speed to market, less damage, and a single source of shipment visibility. Bassett provides fully integrated solutions with the highest commitment to customer care and service as they seek to go beyond their customers’ transactional expectations to create collaborative partnerships that provide a single source network to:
- Better manage inventory across multiple locations and provide total audit-ready accountability
- Reduce line haul and delivery costs
- Ensure availability of high-volume items in stores
- Integrate the omnichannel nature of today’s retail supply chain
- Management and predictability of the total landed cost of goods
- Achieve full visibility from vendor to showroom to final delivery