Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 4, 1993 TAG: 9302040043
SECTION: BUSINESS PAGE: B5 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: BASSETT LENGTH: Medium
BASSETT'S FURNITURE SALES ROCKIN' TO A STRONGER BEAT
There were a lot of smiles at Bassett Furniture Industries' annual meeting Wednesday. The weather was better than for last year's meeting, and so was the news.Sales were up 10 percent for the past two months from the same period a year ago, said Chairman Robert Spilman. And the meeting was the official occasion for him report that net income increased 39 percent, to $27.5 million, from $19.8 million a year earlier.
Bassett reported 1992 net sales of $473.4 million, up 18 percent for the year ended Nov. 30.
In keeping with the upbeat news, Bassett's directors voted a 10 percent increase in the quarterly cash dividend, to 23 cents a share from 21 cents.
But Spilman warned stockholders not to think it's smooth selling now for the furniture industry. "As consumer confidence goes, our future will go," he said. "And consumer confidence went up a tick in December, but leveled out in January."
"If the economy is in a turnaround, it is not the dramatic turnaround" seen after past recessions, Spilman said.
The company has cut its overhead costs in a variety of ways, including improvement of data interchange between sales staff and headquarters and a 10 percent reduction in administrative personnel, said Glenn Hunsucker, president. The company employs about 8,500 people in 11 divisions with 45 operations in 16 states.
Hunsucker said the creditworthiness of retailers - Bassett's customers - is still a "major concern." He said 2,000 furniture retailers, representing $1.7 billion in liabilities for the industry, went out of business in the first nine months of last year.
The list of Bassett's top accounts changes continuously, and 50 percent of the retailers who were on it five years ago now are gone, he said.
However, Bassett's write-off for bad debts dropped 27 percent last year, from $2.2 million to $1.6 million.
Hunsucker noted that Bassett, with its many divisions, is competitive across a wide range of prices and items. The company almost doubled its recliner sales last year, to $50 million from $26 million in 1991. And it is eighth among sellers of bedding, with $50 million in sales in '92.
Last year, Bassett bought a bedding plant in Washington state, expanded an upholstery plant in Los Angeles and built an addition to a plant in Booneville, Miss., that makes recliners and other motion furniture.
Stockholders also learned that most of the problems have been solved in Bassett's newest venture, a polyester finish plant in Hickory, N.C. The company started the project, which Vice President Rob Spilman Jr. said is the only of its kind in the country, a little more than a year ago.
The plant represents an investment of more than $5 million. It uses equipment bought in Italy, which has been the United States' largest supplier of high-gloss furniture. At the Hickory plant, fiberboard is coated with high-gloss polyester finish, then cut and assembled into contemporary furniture.
Not only will the plant allow Bassett to regain its market share in metropolitan areas where contemporary designs are most popular, Spilman said, but it also can use the fiberboard made at a Bassett plant in Henry County.
He said the polyester plant is capable of producing $30 million worth of furniture annually, and he thinks sales can match production.
J.C. Penney Co. just bought some of the polyester designs, he said. Bassett is Penney's largest furniture supplier.
Stockholders re-elected the board of directors, which includes William H. Goodwin Jr., president of CCA Industries in Richmond, who was elected in May to replace J.C. Wheat Jr., who died in April. Bassett directors are paid $10,000 annually, plus $500 for each meeting attended.