Bassett reduces inventory levels to improve working capital

10 Oct '08

5 min read

The Bassett Furniture retail store program had 120 stores in operation as of August 30, 2008. For the first nine months of 2008, three new stores were opened (two licensee- and one corporate-owned) and 13 stores were closed (10 licensee and three corporate-owned). Although management will continue to work closely with its licensee stores to ensure the success of both the licensee and Bassett, the Company expects that three to five additional underperforming stores will close during the remainder of 2008.

"Despite our overall disappointing results, we believe that progress was made in key areas of our operations," said Robert H. Spilman, Bassett's president and chief executive officer. "We continue to show improved gross margins in both the wholesale and retail divisions over 2007 and our new product introductions have been well-received. We also have been successful in reducing our overall cost structure through targeted spending reductions. We remain encouraged by the sales results from our new retail store prototype despite the ongoing difficult home furnishings environment. Sales per square foot in the new format continue to meet our expectations and to noticeably outperform our existing fleet average.

"Given the difficult and somewhat unprecedented environment, we have had no choice but to take several important actions aimed at improving our results in the short-term. These include:

• Aggressively working with certain licensees to close those stores that are underperforming thereby limiting further exposure in our accounts receivable.
• Reducing our inventory levels to improve working capital and cash flow.
• Right-sizing our expense structure in both our wholesale and corporate retail divisions.

"Although we have these short-term actions in place, we will continue to think and act in the best long-term interests of our shareholders. We will continue to thoughtfully invest in store prototype conversions and remodels and work diligently with our licensed network to improve their operating results. With the improvements in our retail program and our strong balance sheet, we are well positioned to not only survive these turbulent times, but also to gain market share as some of our competitors exit the industry."

Click here to view more:

Bassett Furniture Industries Inc

More Bassett Furniture Industries Inc News... More Textiles News - United States Of America...