by BASSETT, Va. – Bassett Furniture’s strong Q4 and year-end results announced this week put the company in a good position to invest in its operations moving forward.
In addition, the home furnishings maker and retailer will be building on its cash position with the upcoming sale of its Zenith Freight Lines subsidiary to J.B. Hunt Transport Services. After taxes that sale will net the company about $65 million, which will bring its cash assets to about $100 million, not including its inventories, accounts receivable and short term investments.
According to its latest financial statement, Bassett plans to invest as much as $30 million in various capital improvements 2022. These investments are in several key areas that the company believes will make it more competitive both in the short and mid-term. This compares to just under $10 million the company spent last year and a more typical $15 million to $20 million per year, Bassett Chairman and CEO Robert H. Spilman Jr. told Home News Now.
“We are saying $30 million — that’s a lot for us,” Spilman said. “But we have a lot of things cooking, so that is what we want to do.”
Spilman outlined several key areas where the company is putting money back into the business.
This includes technology, where Bassett is reformatting its business data system with a new Product Information Package. It also plans to launch a new website platform this fall.
In the retail segment, it plans to open two new format stores this year. One of these will be in a new market the company did not identify in its report, while the other will be the repositioning of a store in the increasingly competitive Dallas market. The company also said it plans to remodel three other locations.
In manufacturing, the company is adding new machinery for its Newton, N.C. upholstery operations and its Bassett and Martinsville, Va.-based woodworking operations. The company said it also is investing in new material handling equipment to improve the ergonomic environment of its facilities, while also further protecting its products as they are being shipped to customers.
In the area of outdoor, which the company said grew 28% in its latest fiscal year, the company is negotiating to purchase a currently leased domestic facility in Haleyville, Ala. along with another adjacent building. The company said this move along with further upgrades will contribute to the growth of its outdoor segment moving forward.
The company is making these investments all while managing a backlog that has grown to just over $90 million according to its latest financial statement. Investing in the business will likely help lower that backlog, while also supporting its growth.
“Our business has notably improved since the return from the first phase of COVID in May 2020,” Spilman said in the company’s latest earnings report. “Sales have grown and we have developed new capabilities and new sales channels, particularly with our Club Level motion line and with a deepening commitment to the outdoor furniture category. The partnership with J.B. Hunt and the upcoming investments in technology and new growth strategies represent a tremendous opportunity for us to build on the successful elements of our business and to augment them with new products, better technology, and higher levels of service.”
Spilman added that the company will provide further details into its business and capital allocations strategies once the transaction with J.B. Hunt closes.
