Bassett Sees Lower 1Q Sales, Shuts Plant

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Bassett Sees Lower 1Q Sales, Shuts Plant
Bassett, VA, March 6, 2007--Bassett Furniture Industries Inc. said Monday a steady drop in demand sent fiscal first-quarter sales sharply lower and led the company to announce plans to shutter its hometown manufacturing plant in a move that will reduce its total work force by 15 percent.

The plant closure is expected to result in a first-quarter charge of $3 million to $3.6 million pretax, or 15 cents to 18 cents per share. The company expects a second-quarter charge of $1 million pretax, or 5 cents per share.
 
Bassett plans to replace lost production by cutting some product lines and importing furniture. It expects to close the plant in the next two to three months, leaving some 280 people out of work.
 
"With the current business levels, it was no longer feasible to continue to operate the large Bassett manufacturing facility even with the efficiency improvements and investments made over the last two years," the company said.
 
Bassett said it expects to report sales in the period ended February 24 fell 16 percent to 18 percent from a year ago.
 
"Like many other retailers, we have seen a continued softening in consumer traffic amid the backdrop of a nationwide housing slump, higher interest rates and higher gasoline prices all serving to limit the discretionary spending of many consumers," the company said.