Bassett Announces Continued Reopening Plans

May 12, 2020  by Laurie Northington in Business Strategy, Industry   

The company expects to reopen 19 more stores by the week of May 18, 2020.  The remaining four stores, which are located in Maryland and New Jersey, will not reopen until state and local authorities permit.

Due to the level of disruption in the home furnishings industry, coupled with the uncertainty both of the pace at which the U.S. economy will recover and the level to which it will recover, Bassett also announced the following:

• A 25% permanent reduction in workforce, representing approximately 600 employees, throughout the retail, wholesale and logistics operations;
• That 42% of the remaining workforce will remain on furlough through at least May 31, 2020 with the Company paying for health care benefits; and
• The permanent closure of the Grand Prairie, Texas upholstery manufacturing operation with production shifted to the manufacturing location in Newton, North Carolina.

The company will continue to evaluate the pace of business to determine when to bring back the furloughed employees. No significant severance or restructuring charge is expected due to the above.

“We are living through an unprecedented period of time in the life of our country,” said Rob Spilman, chairman and CEO. “The short-term effects of the global pandemic have been tragic, not only from a national health perspective but also in terms of our collective economic well-being. Closer to home, Bassett’s wholesale revenue from March 23rd through the end of April declined by more than 80%. Accordingly, the announcement of the permanent downsizing of a large portion of our workforce and the extension of previously communicated furloughs reflects the new reality in which we must operate. These decisions were made regretfully but with the long-term survival of the company in mind. It is our hope that as our business improves, we will be able to return a significant number of our furloughed associates to their former positions and to our payroll.”

“While it is impossible to predict the rate at which sales will return to anywhere near ‘normal’ levels, we have seen incoming wholesale orders improve in each of the past four weeks,” observed Spilman. “Meanwhile, we have taken the eight weeks of disruption to our routine to introspectively examine many facets of our business including the levels of the raw material inventory, total product line SKUs, architecture of our custom furniture programs, and user experience on our website. While we remain committed to our signature custom capabilities, we acknowledge that this form of selling becomes compromised when our fleet of brick and mortar retail stores is forced to close. Furthermore, we believe that the omnipresent migration to digital commerce accelerated during this highly unusual period of ‘stay at home’ behavior. We are therefore working to streamline our custom offerings and the manner in which they are presented on the web with the intention of generating more e-commerce and store sales alike. In this regard, we are striving to turn the unfortunate elements of today’s announcement into the foundation of a leaner, more nimble, reinvented Bassett of the future.”