Bassett is a leading vertically integrated manufacturer, importer and retailer
of high quality, mid-priced home furnishings. With Bassett Home Furnishings
(“BHF”) stores, we have leveraged our strong 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. We created
our 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.
We believe that our capabilities in custom furniture have become unmatched in
recent years. Our manufacturing team takes great pride in the breadth of its
options, the precision of its craftsmanship, and the speed of its delivery.
The selling philosophy in the stores is based on building strong long term relationships
with each customer. 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 our
retail store network, we also distribute our products through other wholesale
channels including multi-line furniture stores, many of which feature Bassett
galleries or design centers, specialty stores and mass merchants. We use a network
of over 25 independent sales representatives who have stated geographical territories.
These sales representatives are compensated based on a standard commission rate.
We believe this blended strategy provides us the greatest ability to effectively
distribute our products throughout the United States and ultimately gain market
share.
For several years we owned 49% of Zenith Freight Lines, LLC (“Zenith”).
During that time the strategic significance of our partnership with Zenith had
risen 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, we acquired the remaining 51% of Zenith,
which now operates as a wholly-owned subsidiary of Bassett. Our acquisition
of Zenith brings to our 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 our industry. We believe that our
ownership of Zenith will not only enhance our own wholesale and retail distribution
capabilities, but will provide additional growth opportunities as Zenith continues
to expand its service to other customers.
We have strategically aligned our business into three reportable segments:
Wholesale, Retail – Company-owned stores, and Logistical services.
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 (licensee-owned stores and Company-owned retail stores) and independent
furniture retailers.
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. We believe that we
can be successful in the current competitive environment because our products
represent excellent value combining attractive prices, quality and styling;
prompt delivery; and superior service.
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, our store network with 60 Company-owned
stores and 33 licensee-owned, ranks in the top 30 in retail furniture sales
in the United States. We plan to continue opening new stores, primarily in underpenetrated
markets where we currently have stores. In this regard we are currently considering
several locations for new store expansion over the next three years, with at
least three of these planned to open in fiscal 2016. We continue to evaluate
all stores in our fleet and plan to close three underperforming stores this
year as well.
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. We provide fully integrated solutions with the highest
commitment to customer care and service as we seek to go beyond our 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