BASSETT, Va. - Bassett Furniture, the ninth largest residential furniture maker on the FDMC 300 list of biggest woodworking companies, has reported a 16.3 percent drop in third quarter sales. Both its retail and wholesale segments saw double-digit declines thanks to disruptions caused by COVID.
Consolidated sales reached $91.6 million, compared with $109.4 million over the same period last year.
“The 2020 roller coaster churned on in our June-August quarter,” said Rob Spilman, chairman and CEO. “In short, business has boomed since the Memorial Day holiday at the end of May. Wholesale orders increased by 117% on a sequential basis compared with the May quarter, and we ended the quarter with a $37.4 million wholesale backlog, 223% more than our backlog of August 2019.
“Unfortunately, a new series of challenges has arisen that has compromised our ability to turn the robust sales trend into revenue,” Spilman added. “The pandemic has disrupted all aspects of the traditional supply chain and resolution of the situation will probably take months to fully unfold.”
One of the company's biggest challenges lies in its workers. Spilman said Bassett has faced challenges in ramping up its manufacturing headcount that had been temporarily reduced due to furloughs.
“Efforts to ramp up manufacturing headcount were compromised in part by the $600 per week wage augmentation program stipulated by the CARES Act,” he noted. “Although the labor market has loosened a bit, ramping up staffing levels remains a major problem, especially in-home delivery, warehousing and upholstery manufacturing.”
Nevertheless, the company remains committed to its "Made in America" principle.
"A major hurdle that must be overcome in this journey is the development and retention of the next generation of manufacturing and logistics associates – a big job,” he added. “Made in America” requires skilled Americans, and the post- COVID environment has made a difficult task even more so as our labor pool has become more scarce and competitive to attract. Our team has embarked on an introspective examination of our facilities, work environment, compensation, and the requirements for every position to provide Bassett the fundamentals for staffing the “workforce of the future.”
Supply chain issues are also present, particularly with fabric suppliers.
“In many cases, in fact, they have not been able to meet pre-COVID levels, much less to increase them,” he said. “Disruptions in the chemical industry on the U.S. Gulf Coast has impeded the production of ample stocks of a key ingredient in the manufacturer of polypropylene foam.”
“Import wood suppliers are also striving to achieve production levels that match current sales volume, although they have returned to pre-COVID strength, Spilman said. “Finally, a major container shortage brought about by the shipping companies’ quick shutdown in March has meant that there are currently not enough containers in Asia to meet demand, at least at the prices for which we have contracted.”
Wholesale sales dropped 11.4 percent from last year and retail sales dropped 27.6 percent.
See the full earnings report here: https://www.globenewswire.com/news-release/2020/10/01/2102228/0/en/Basse...
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