Bassett Furniture Industries (NASDAQ:BSET) is focused on driving organic revenue growth by increasing sales productivity in its existing store base, while also expanding selectively through new corporate-owned stores and opportunistic acquisitions of licensed locations, Chief Financial Officer Mike Daniel said during a fireside chat at the WTR Insights Conference hosted by Water Tower Research.
Daniel told Managing Director Doug Lane that the company’s top priority is “to grow our sales in our existing store boxes,” across both corporate and licensee stores, citing store economics and the need to leverage occupancy costs. He noted that in the first quarter of fiscal 2026, wholesale sales were roughly flat and retail sales declined 1.4% versus the prior year.
Product and brand initiatives to support sales
Among recent launches, Daniel highlighted new casegoods collections introduced over the past year that have received strong customer response, describing them as “whole home” type collections. He also cited momentum in the company’s HideAway Dining program, which features solid hardwood furniture made through Bassett’s BenchMade process and assembled and finished in Martinsville, Virginia. The tables are designed to store extension leaves within the table itself, which Daniel said has been “really selling well.”
Upholstery remains central to Bassett’s mix, Daniel said, estimating that roughly 75% of what the company sells is upholstery. He described the company’s True Custom upholstery program as a competitive strength, allowing customers to order sofas in six-inch increments across a wide size range and choose from more than 400 fabrics. Daniel said Bassett can manufacture these orders in less than three weeks and deliver into homes in approximately 30 to 45 days, calling the offering “best in class.”
In outdoor furniture, Daniel said Bassett is shifting its in-store branding approach by integrating the Bassett Outdoor brand into Lane Venture, a brand Bassett owns that he said has “more brand recognition than Bassett Outdoor.” Customers will see the Lane Venture brand in stores going forward, which Daniel said should improve recognition of Bassett’s outdoor capabilities.
Store expansion and licensee acquisitions
On physical expansion, Daniel said Bassett is opening two new corporate store markets this year—Cincinnati, expected to open next month, and Orlando, expected to open late in the third quarter. He said the company had been evaluating both markets for the last couple of years, noting that leases and store development involve a lengthy process.
Daniel also said the company is repositioning its Long Island store to a location with “a much better rent factor,” after concluding that occupancy economics in its prior location “just never worked out.” He said capital expenditures will be “considerably more” this year than last year’s $4.5 million due to store openings and relocations.
On licensee activity, Daniel said Bassett is seeing some licensees age out of the business without succession plans, creating opportunities for the company to acquire those operations. He noted that Bassett recently took over a licensee operation in the Philadelphia market and said he expects similar opportunities could arise, though he emphasized the company is “not out there trying to buy out our licensees.”
Looking ahead, Daniel said the company’s long-term goal is to reach a cadence of two to three new stores per year, though he does not expect that pace next year based on the current development pipeline.
E-commerce and an omni-channel approach
Daniel said Bassett’s website historically functioned primarily as a marketing tool, but the company has become more “aggressive in e-commerce” over the past couple of years, including implementing a new platform in 2023. He reported that e-commerce was up 25% in the most recent quarter, following significant gains over roughly the last six quarters.
At the same time, Daniel said many customers at Bassett’s price points still prefer to visit stores to see finishes and test furniture before purchasing. He said the company is working toward a “true omni-channel model” where customers can seamlessly move between online browsing and in-store engagement before placing an order.
Daniel added that expanded delivery capabilities have supported online growth, including the ability to deliver across the 48 contiguous U.S. states through a delivery partner, enabling sales in markets where Bassett does not have physical locations.
Wholesale growth through gallery concepts and designers
On the wholesale side, Daniel said about 60% of wholesale sales go to Bassett’s licensed and corporate store network, with the remaining 40% going to traditional third-party retailers. He described two “store-within-a-store” concepts as primary vehicles for expanding the brand within third-party retail accounts:
- Bassett Design Centers: Roughly 3,000 to 5,000 square feet inside a retailer, featuring a broad representation of Bassett product, including True Custom upholstery and custom wood programs.
- Custom Studios: About 1,000 square feet focused solely on the True Custom program, designed to require little inventory and serve as an entry point for retailers.
Daniel said Bassett has about 60 Custom Studios, a concept introduced a little over a year ago. He said three retailers moved from the Custom Studio format up to a Bassett Design Center in the last quarter, which he characterized as a positive sign.
Daniel also discussed efforts to expand into the interior designer and design firm channel, which he said Bassett has not historically emphasized. He framed the initiative as a way to reach another customer base as the number of independent furniture stores declines. Daniel said Bassett is in the early stages of developing tools and training for its field sales representatives and is in the process of moving its Bassett showroom to a location with more designer traffic.
Additionally, Daniel said Bassett has started a Bassett Hospitality division targeting contract commercial projects and has hired an experienced leader for the effort, describing the work as “pick and shovel” in nature.
Tariffs, rising input costs, and shareholder returns
Daniel said tariffs have been disruptive for the furniture industry, noting that there are still evolving interpretations affecting inputs such as steel. He said Bassett implemented a “regular” price increase early in the summer and later added a tariff surcharge on the wholesale side. Daniel said the company did not immediately raise retail prices at that time, which pressured retail margins in the fourth quarter of last year and the first quarter of this year, but added that Bassett implemented a retail price increase in January and expects margins to improve going forward.
He also cited higher fuel costs driving increased delivery surcharges from partners, prompting Bassett to institute a fuel surcharge to offset those costs. Daniel further highlighted rising foam costs—important in upholstery—saying he had seen reports of 10% to 20% increases and that Bassett is receiving a 12% increase starting mid-month.
On capital allocation, Daniel said the company aims to protect its dividend “above all” and repurchases shares opportunistically without a set formula, evaluating purchases frequently. He credited the company’s conservative balance sheet for providing flexibility through cyclical downturns, while noting that the housing market is a major driver of demand and a key variable in the current environment.
Looking three to five years out, Daniel said Bassett plans to keep investing in innovation across product, e-commerce, and its custom upholstery platform, while building out new stores and pursuing designer and hospitality initiatives. He added that Bassett has reduced costs and believes it can leverage improved sales when the housing market provides support.
About Bassett Furniture Industries (NASDAQ:BSET)
Bassett Furniture Industries, Inc (NASDAQ: BSET), headquartered in Bassett, Virginia, is a vertically integrated manufacturer and retailer of residential home furnishings. The company designs, produces and markets a range of furniture items, including upholstered seating, wood case goods, bedroom collections, dining room sets and home décor accessories. Bassett is known for its emphasis on craftsmanship, offering both ready-to-assemble pieces and made-to-order products that cater to varying design preferences and space requirements.
Bassett’s products are sold through a dual-channel distribution network comprising company-owned Bassett Home Furnishings stores, a franchise and independent dealer network, and an e-commerce platform that provides online shopping, virtual design consultations and customization tools.
