Tag - Bset

Bassett Furniture Industries, Inc. (Nasdaq: BSET) posted an increase in its third-quarter net income despite a drop in sales, the branded home furnishings retailer announced after the close on Thursday.

The net income for the three months ended Aug. 25 was $0.68 million, or $0.06 per share, compared with a net income of $0.06 million, or $0.01 per share, during the same quarter of 2006.

The profit rise was partially due to an increase in gross margins, which were 35%, compared with 30% a year earlier. The Bassett, Va.-based company shifted its product mix from domestic to imported and changed the way it invoices freight on wholesale shipments.

However, third-quarter sales fell 9% to $70.5 million, from $77.6 million a year earlier. Bassett Furniture, which operates a total of 132 stores, blamed the decline on continued soft furniture retail conditions.

“Our industry continues to suffer from sluggish consumer demand coupled with a weak housing market and a growing consumer credit crunch,” said president and CEO Robert Spilman Jr. in a statement.

At closing, Bassett Furniture Industries (BSET) shares had gained $0.66, or 7%, to $10.66. That’s not far from the 52-week low of $10, which was reached on Oct. 4. The 52-week high is $18.80, established on Dec. 15, 2006.
 

The announcement in early March by Bassett Furniture Industries Inc. (Nasdaq: BSET) appeared to hammer another nail in the coffin for the U.S. furniture industry. The century-old company said it would begin closing its manufacturing facility in the Virginia hometown that bears the same name.

While the shutdown will eliminate 280 jobs, or 15% at Bassett, the announcement also sounded another death knell for American-made furniture that can’t effectively compete with cheap imports, mainly from Asia.

The struggles of Bassett, Haverty Furniture Companies Inc. (NYSE: HVT) and even giant Ethan Allen Interiors Inc. (NYSE: ETH) have left investors wondering if they should chop down their losses and toss them on a funeral pyre for what is an industry blindsided by a transition that it failed to anticipate.

As Bassett, Va., becomes another Appalachian region company town without much of a company, Bassett Furniture will use its plant there to process imported goods. This year, more than half of the company’s products will be made outside the United States.

Robert Spilman, the president and CEO, said in a press release that shutting down furniture making at the plant was part of Bassett’s transition “from being primarily a domestic furniture manufacturing company to a retailer, manufacturer and marketer of branded home furnishings.”