Bassett Furniture Industries, Inc.

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Bassett Furniture Industries, Inc.

P.O. Box 626
Bassett, Virginia 24055
U.S.A.
(703) 629-6000
Fax: (703) 629-6400

Public Company
Incorporated: 1902 as Bassett Furniture Co.
Employees: 6,800
Sales: $490.8 million (1995)
Stock Exchanges: NASDAQ
SICs: 2511 Wood Household Furniture; 2515 Mattresses & Bedsprings; 2512 Upholstered Wood Household Furniture

Bassett furniture is sold through major retailers, with 14 percent of the company’s revenue coming from J.C. Penney stores in 1995. Bassett Furniture Industries, Inc. also operates more than two dozen Bassett Direct Plus Galleries, furniture superstores that carry only the Bassett lines. In addition to Bassett, the company manufactures furniture under the Impact, Weiman, and Mount Airy brand names.

In 1995, Bassett Furniture Industries had earnings of $22.9 million on sales of $490.8 million, The company had manufacturing operations in 15 states.

Nineteenth-Century Origins

As the 19th century came to a close, the Bassett family of Henry County, Virginia, owned two sawmills that had been built to provide track ties and bridge timbers to the Norfolk & Western railroad. However, ever since the railroad from Roanoke to Winston-Salem was completed in 1892, the Bassetts had been looking for new buyers for the abundant hardwood in the area. Much of the marketing was done by John D. Bassett, who negotiated the family’s first non-railroad contract with the Turner-White Coffin Co. in Winston-Salem. From there, he went to High Point, Carolina, where he was able to obtain two minor contracts with small furniture companies. That success led him to Jamestown, New York, and Grand Rapids, Michigan, two of the major furniture-producing areas of the day.

For the next half dozen years, J. D. Bassett continued to develop relationships with Northern furniture makers. Then in 1902, Bassett, 36, called a family meeting that was attended by two brothers, Samuel and Charles C. Bassett, and a brother-in-law, Reed L. Stone. At the meeting, J. D. Bassett proposed that the family go into the business of making furniture. As he recalled years later, “Here I was, shipping raw lumber from Henry County to Jamestown, New York, and to Grand Rapids, Michigan, where factories converted that lumber into finished furniture to be shipped everywhere, including the South. It seemed to me that furniture certainly could be made in Henry County at a tremendous advantage.”

At the time, the Southern economy was still recovering from the Civil War, and the Bassetts knew almost nothing about making furniture. But Bassett figured the savings in freight alone would give them an advantage over Northern manufacturers. “I was convinced that the time for such a venture in Henry County was ripe because the South was then recovering rapidly,” Bassett recalled. “Among the necessary commodities, furniture was in growing demand. I believed that this demand would continue for many years to come.”

The four family members raised $27,500—somewhat less than J. D. Bassett figured they needed—and formed the Bassett Furniture Co. They decided to start with basic bedroom furniture because it seemed less complicated to make and none of them really knew anything about the business, except J. D. Bassett, who had absorbed what he could on the road. Up to that point, J. D. Bassett had also been a teacher, a tobacco farmer, and a drummer for a wholesale grocery business. He also owned his own grocery, the Bassett Mercantile Co., that doubled as the local post office, which later resulted in the small, western Virginia community becoming known as Bassett.

The Bassett Furniture Co. was set up in a wooden shed, later to be sheathed in metal. J. D. Bassett, president of the fledgling company, paid a traveling designer from Grand Rapids $100 to develop working prints, and hired about 50 of his rural Virginia neighbors, who were paid 5-cents an hour, to work in the factory, which was soon turning out beds, dressers, washstands, and chifforobes made of oak. He also signed contracts to sell the furniture through stores in Virginia, West Virginia, and North Carolina. Company records show that beds originally wholesaled for $1.50 each.

In its first year, the Bassett Furniture Co. earned $15,000 on sales of $76,000. The next year, 1903, the company earned $25,000 on sales of a little more than $100,000. By the end of the third year, the family members had recouped their entire investment and the company was debt free. Even in 1907, with the nation in the grip of a financial panic, the Bassett Furniture Co. reported net income of $606. That same year, the company made its first outside acquisition, buying the American Furniture Co. of Martinsville, Virginia, for 10,000 shares of Bassett stock. J. D. Bassett also established his own bank, the Bank of Bassett Inc., capitalized at $13,000, which later became the First National Bank of Bassett.

By 1911, the economy had recovered and the Bassett Furniture Co. added sales representatives in several major Northern cities, including New York, Detroit, and Chicago. The company also paid its first dividends to shareholders, declaring a 5 percent dividend in February and an additional 5 percent in July.

Six years later, on Dec. 31, 1917, disaster struck when fire destroyed the Bassett Furniture Co. factory. But the company soon resumed operations in a modern brick building with motor-driven woodworking equipment, abandoning the belt-driven line-shaft system that had been a hallmark of the industrial revolution. In 1920, the board of directors voted to increase capital stock to $1 million; the Bassett Furniture Co. had become a million-dollar business in 18 years. J. D. Bassett was then earning $5,000 a year as president.

Bassett Versus Bassett, the 1920s

In 1921, J. D. Bassett took the unusual step of forming a second furniture business, the J.D. Bassett Manufacturing Co., apparently to test the abilities of his oldest son, William M. Bassett. J. D. Bassett was president of both companies, but his son was named vice president of the J.D. Bassett Manufacturing Co. and was largely responsible for day-to-day operations. The J.D. Bassett Manufacturing Co. developed its own sales staff and retail distribution network but, confusingly, both companies used the same trade name, “Bassett.”

In 1923, William Bassett succeeded his father as president of J.D. Bassett Manufacturing Co., while J. D. Bassett’s second son, John Douglas Bassett (later known as J. D. Bassett, Jr.) became vice president. By then, the Bassett furniture businesses had become totally self-sufficient. In 1920, J.D. Bassett and his partners in the Bassett Furniture Co. had purchased the Valley Veneer Co. to produce veneers exclusively for Bassett furniture. In 1923, J. D. Bassett formed the Bassett Mirror Co., which set up operations in a 15,000-square-foot building next to the Bassett Furniture Co.

Fire struck again in 1925, this time destroying a large part of the J.D. Bassett Manufacturing Co. When the business was rebuilt, it added a facility to manufacture dining room furniture—marking the first time the Bassett name would venture outside bedroom furnishing.

Two years later, in 1927, William Bassett, apparently unhappy with his prospects in the growing Bassett family of businesses, left his job as head of the J.D. Bassett Manufacturing Co. John Douglas Bassett succeeded him as president. William Bassett then bought the Craig Furniture Co. in nearby Martinsville, which he renamed the W.M. Bassett Furniture Co.

Other family members had also left the fold to form their own furniture companies, including J.D. Bassett’s son-in-law, Thomas Bahnson Stanley, a future governor of Virginia, who started the Stanley Furniture Co. in 1924 on land adjacent to the Bassett plants. That same year, J. Clyde Hooker, the son-in-law of J.D. Bassett’s brother, Charles, formed the Hooker-Bassett Furniture Co. in Martinsville, which later became the Hooker Furniture Corp.

J.D. Bassett also backed another son-in-law, Taylor Vaughan, and his brother, B. C. Vaughan, when they formed their respective furniture businesses, the Vaughan Furniture Co. and the Vaughan-Bassett Co. Cabell Philpott, the son of a Bassett Furniture Co, board member, also worked for Bassett before leaving to form the United Furniture Co. in Lexington, North Carolina.

Company Perspectives:

Today Bassett is one of the world’s largest furniture manufacturers, reflecting some 90 years of innovation and growth. This growth is rooted in two closely adhered to principals. The first is that Bassett knows there can be no success unless our dealers are successful. We constantly keep our dealers in mind when making changes and improvements. Secondly, Bassett has strictly adhered to logically planned expansion. Every change and addition has been related to our existing business.

In Foresight, Founders and Fortitude: The Growth of Industry in Martinsville and Henry County, Virginia, Dorothy Cleal and Hiram H. Herbert noted, “At first J. D.’s attitude about competition appears paradoxical. With a strong wedge in the southern furniture field, why did he risk weakening his position by inviting competition, even in his own family?” They go on to suggest that Bassett was more consumed by a “personal struggle” to establish the South as the dominant furniture-making region in the United States. “If this is so,” the authors concluded, “then it must be deduced that J. D. Bassett, Sr., had phenomenal foresight. By the time he died in 1965 at the age of 98 he was able to see dramatic changes taking place in America’s preference for furniture produced in the South as opposed to furniture produced in the North, the cradle of the American furniture industry.”

Bassett Furniture Industries Forms in 1930

Two years after William Bassett bought his own furniture business, and John Douglas Bassett rose to the presidency of the J.D. Bassett Manufacturing Co., J. D. Bassett called another family meeting. With the Depression beginning, he suggested the three Bassett furniture businesses could be more efficiently run as a single enterprise. Readily agreeing with that assessment, in 1930, the Bassetts and their investors formed Bassett Furniture Industries, Inc., a holding company for all three furniture manufacturers.

The accounting firm of Ernst & Ernst conducted an inventory of each business and placed a value of $1.875 million on the consolidated companies, which issued 187,500 shares of preferred stock. J. D. Bassett was named president of the new corporation. John Douglas Bassett, by then known as J. D., Jr., was vice president, and William Bassett, secretary-treasurer. Later that year, J.D. Bassett was elected chairman of the board and William Bassett succeeded to the presidency.

Despite the rigors of the Depression, the new corporation adopted an aggressive position in the industry. In 1931, Bassett Furniture Industries formed the Bassett Chair Co. Three years later, it acquired the Ramsey Furniture Co., later to be known as Bassett Superior Lines, in a public auction for $117,000. Bassett Furniture Industries, although forced to cut back on its workers’ hours and wages, continued to operate throughout the Depression, at one point bringing in a railroad carload of Virginia hams for its employees.

In 1938, Bassett Furniture Industries introduced its massive and elaborate Waterfall design. Two years later, with the nation in the midst of an economic boom following the outbreak of war in Europe, the company raised more than $2 million in an offering of common stock. The proceeds were used to retire the preferred stock in the Bassett Furniture Co., the J.D. Bassett Manufacturing Co., and the William M. Bassett Furniture Co., making them wholly owned subsidiaries of the holding company. Later that year, the three furniture companies, along with the Bassett Chair Co. and Bassett Superior Lines, were merged into a single enterprise.

The following year, when the United States entered World War II, Bassett Furniture Industries realized that furniture was not going to be a high priority item in a time of government rationing. As they did when the market for railroad ties dried up in 1892, the Bassetts had to find another market. Although the company was unsuccessful in its efforts to obtain government contracts, J. D. Bassett, Jr. negotiated a sizable contract with the Yellow Cab and Coach Co. in Detroit to manufacture wooden truck bodies.

When the war ended in 1945, the nation experienced another economic boom—and rising expectations. Cleal and Herbert explained: “Throughout the nation there had been countless war-time marriages, and now the couples wanted homes of their own… With the new homes came demands for furniture to fill them.” Bassett Furniture Industries invested $6 million to modernize its plants, all internally financed. The Bassett Chair Co. also began manufacturing coffee tables and other occasional pieces to fit the changing American lifestyle, culminating in 1957 with the formation of the Bassett Table Co. By 1960, corporate-wide sales had reached $60 million, employment had risen to more than 3,000, and Bassett Furniture Industries had become the world’s largest manufacturer of wood furniture.

Marketing, however, was beginning to pose headaches for the growing company. In 1959, there were still four separate marketing organizations for Bassett products—the Bassett Furniture Co., J.D. Bassett Manufacturing Co., William M. Bassett Furniture Co., and the Bassett Table Co. All three organizations handled sales for Bassett Superior Lines. As a result, a salesman for one Bassett line often found himself vying for retail space with another. Differences in design were usually minor, which left furniture dealers confused and often angry.

William Bassett, then chairman and chief executive of Bassett Furniture Industries, also worried that Bassett-branded furniture would find its way into cut-rate discount stores—a new force in American retailing—if the internal competition continued. Under his direction, top salesmen from the three companies were organized into a single sales force to represent the entire Bassett line in a three-state trial area. The test was so successful that the program was expanded nationwide within a year. William Bassett also died in 1960, after 30 years at the helm of Bassett Industries, and was succeeded as chairman and chief executive by his younger brother, J. D. Bassett, Jr.

In 1960, Bassett Furniture Industries also initiated its first nationwide marketing campaign, advertising in consumer magazines with a combined readership of 70 million to establish the Bassett image. By 1964, when Bassett Furniture Industries became the first furniture manufacturer to advertise in Reader’s Digest, the marketing program was reaching more than 445 million readers. In addition to Reader’s Digest, with its 22 million readers, Bassett advertised in Ebony, Seventeen, Brides Magazine, Better Homes & Gardens, Sunset, Modern Bride, Good Housekeeping, and Bride’ & Home. In 1963, Bassett Furniture Industries had also rounded out its product line by acquiring the Prestige Furniture Corp. in Newton, North Carolina, which made upholstered furniture. Afterwards, Bassett Industries could claim to make and sell furniture for every room of the house.

J. D. Bassett, Jr., then 65, died unexpectedly in 1966. He was succeeded as chairman and chief executive by John Edwin Bassett, Sr., a cousin and the son of Charles C. Bassett, one of the original founders of the Bassett Furniture Co. in 1902.

Expansion Through Acquisitions, 1960s–80s

In 1967, Bassett Furniture Industries opened its first retail outlet, a freestanding showroom on Interstate 85 between High Point and Thomasville, North Carolina. That same year, the company formed Bassett Furniture Industries of North Carolina, a wholly owned subsidiary, to manufacture juvenile furniture in Statesville, North Carolina. Two years later, Bassett Furniture Industries acquired the Art Furniture Manufacturing Co. in Macon, Georgia, and the Art Table Co. in Barnesville, Georgia. Those companies were reorganized as Bassett Furniture Industries of Georgia. The expansion continued in 1969 with the purchase of the Taylorcraft Furniture Co. in Taylorsville, North Carolina, which became a subsidiary of the Prestige Furniture Corp. Bassett Furniture Industries’ sales topped $139 million in 1969.

Bassett Furniture Industries continued to expand through acquisitions during the 1970s. In 1971, the company entered the mattress market by purchasing the E.B. Malone Bedding Co. That same year, it purchased the National Mount Airy Furniture Co., a manufacturer of upscale furniture in Mount Airy, North Carolina, followed by acquisition of the Weiman Co., a manufacturer of heirloom-quality furniture in Christianburg, Virginia, in 1979.

In 1984, Bassett Furniture Industries launched its Bassett Gallery program, a cooperative marketing program for retail dealers who were willing to set aside a portion of their floor space exclusively to settings of Bassett Furniture. The company also acquired Impact Furniture Inc., a manufacturer of low-end occasional and bedroom furniture in Hickory, North Carolina, followed by the purchase of Motion Chair Inc., a maker of recliners, in 1986.

The 1990s

In 1993, Bassett Furniture Industries built the first U.S. finishing plant for 100 percent polyester furniture in Catawba County, North Carolina. The furniture was marketed under the brand names Vision One by Bassett and Nova by Impact.

Two years later, Bassett Furniture Industries introduced its first ready-to-assemble line of furniture, a line of home-office furniture that was carried by the Staples chain of office superstores. Matt Johnson, then national sales manager for the division launching the home-office line, said the growth of home-based businesses convinced Bassett Furniture Industries that consumers would pay more for a better grade of furniture than traditional ready-to-assemble products. However, Johnson said the company had no plans to expand its ready-to-assemble line. In 1995, the company also launched its Bassett Direct Plus Dealership program of franchised furniture superstores that carry only the Bassett line.