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Bassett Furniture Industries, Incorporated BSET implemented workforce reductions to better align its cost structure with current business levels. These reductions, achieved through layoffs and retirements, are expected to generate annual savings of approximately $2.5 million.
The company has reduced its headcount by 11% in the past year, indicating ongoing efforts to streamline operations. It anticipates recording a $500,000 severance charge related to this initiative in the current quarter.
BSET Progresses on Restructuring Plan to Drive Savings
The company also stated that BSET is progressing with its five-point restructuring plan announced on July 10, 2024. This initiative is expected to result in annual cost savings between $5.5 million and $6.5 million.
The plan focuses on driving organic growth through Bassett-branded retail locations, expanding omni-channel capabilities and enhancing customization options. BSET has completed the consolidation of its Virginia-based wood production facilities and has seen improved performance from the remaining operations in the past two months.
Bassett plans to optimize inventory, drop underperforming product lines and invest in upgrading retail locations. The company has also shut down Noa Home, its Canada-based e-commerce furniture initiative, and is in the process of liquidating the remaining inventory.
BSET has reinforced its commitment to the restructuring plan with the recent cutbacks, despite the difficult decisions involving long-time associates. While there has been no noticeable increase in orders, the actions already taken have led to improved results. The company is pleased with the reception of its new products at the Fall High Point Furniture Market and anticipates these items will be available in retail stores by early 2025.
BSET remains focused on achieving the cost reductions previously outlined. With the workforce reductions included, the company now anticipates annual savings to be between $8 million and $9 million.
BSET’s Price Performance
Shares of the company have gained 13.1% in the past three months against the Zacks Furniture industry’s 0.1% fall. The company is benefiting from its ongoing restructuring initiatives aimed at fostering growth amid uncertain economic conditions. BSET has made progress with its plan to reduce costs and strengthen operations for top-line growth. The strategy leverages Bassett’s brand quality, design expertise and service, with a focus on driving long-term revenue growth and profitability.
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