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Bassett Furniture optimistic about future
Company's revenues climb in ’12
Bassett Furniture President and CEO Rob Spilman Jr. talks about the company’s 2012 fiscal year Wednesday during its annual meeting. (Bulletin photo)
Thursday, March 7, 2013
By GINNY WRAY - Bulletin Staff Writer
By GINNY WRAY
Bulletin Staff Writer
Bassett Furniture’s fortunes improved in 2012, and the company is optimistic about its prospects for the future, its president/CEO said Wednesday.
Robert H. “Rob” Spilman Jr. told shareholders at Bassett’s annual meeting that the company is predicting 5 to 10 percent revenue growth this year.
“Things are looking up,” he said. After weathering the “battle scars” of the downturn in the economy and housing industry, “in 2012 our fortunes began to improve.”
Its optimism is based in part on 2012 results, he said.
Bassett had $270 million in net sales and $26.7 million in net income in 2012. It posted 6.7 percent revenue growth, including 21 percent in the fourth quarter; returned to profitability; and distributed $28.4 million to shareholders. All three of its divisions — upholstery, wood and corporate retail — posted sales gains and higher operating profits, according to its annual report.
Also, the company’s stock price appreciated 40 percent in the fiscal year and 66 percent in the calendar year, Spilman said at the meeting.
In addition, he said, the housing market is improving and the recession has weakened some of Bassett’s competitors; the Bassett Home Furnishings stores are improving and closings are over; and its balance sheet — including $40 million in unencumbered liquidity — is strong enough to support its plans.
This year, Spilman said the company plans to open two new licensed stores and four new corporate stores as well as repositioned three corporate stores.
At the end of 2012, there were 86 Bassett stores — 53 that were company owned and operated and 33 licensed locations. There was a 9 percent comparable store sales increase in 2012, Spilman said, calling that “the best in recent memory.”
This year, Bassett plans to build on its strategic partnership with HGTV, which has a penetration of 99 million households in the United States.
The alliance is two-pronged — in-store and out, Spilman said. In the Bassett stores, it is evident in rebranded design centers which feature Bassett’s custom upholstery and market the idea of a “home makeover” such as those on HGTV.
An advertising campaign has been developed that combines the fact that 30 to 33 percent of store sales come from home visits by Bassett staff and the makeovers viewers see on HGTV, Spilman said. He showed a television commercial in which newlyweds work with a Bassett consultant to make over their bedroom with pieces and fabrics in the HGTV line.
“Are you ready for your big reveal?” it asks, referring to the “reveal” when makeovers are unveiled on HGTV.
Outside the stores, the HGTV alliance has resulted in a new line of furniture exclusively branded HGTV, with no visible Bassett name, Spilman said. It includes casegoods and upholstery and currently is being shown on more than 50 retail floors, he said.
Bassett posted a 22 percent increase in open market sales (outside the stores) in 2012 and added two new major accounts — Nebraska Furniture Mart and Buy Buy Baby, he said.
Merchandising is critical to make customers feel furniture is a desirable product, Spilman said. To that end, Bassett grew its custom upholstery franchise by $7 million and had two successful wood collection introductions — Moultrie Park and Cosmopolitan.
Sales of upholstered headboards jumped 64 percent, Spilman said, and contemporary design seems to be a growing trend.
The company also plans to unveil a new store concept — The Bassett Custom Shop —in Raleigh, N.C., this spring. Spilman said larger stores have more sales volume, but smaller stores have more sales per square foot. So while the larger, freestanding Bassett stores have 14,000 to 18,000 square feet and its small stores in specialty neighborhood centers have 7,000 to 11,000 square feet, The Bassett Custom Shop will have 3,200 square feet, he said.
The company also is opening two new warehouses, in Minneapolis and Seattle, to shorten shipping times, lower costs and improve service. It also is consolidating its showroom space in High Point, N.C., on one floor of the International Home Furnishings Center.