Our major challenge in 2007 has been to continue to dedicate operating and capital resources to staff our retail organization, to invest in our marketing strategies, and to design and construct our new prototype store while suffering through the worst industry wide sales slump in memory.
Robert H. Spilman Jr., President and CEO, Bassett

Bassett Furniture Industries Inc. (Nasdaq:BSET) announced sales for it's fiscal year ended November 2007 fell 12% versus the prior year. Fourth quarter sales fell 6%.

Company officials said the sales decline is primarily due to continued soft furniture retail conditions, which have impacted both retail sales and wholesale shipments.

On the positive side, the company stated that margins increased slightly due to a shift in wood product mix from domestic to imported and improved retail margins.

"Overall conditions for our industry and our Company have been difficult all year and continue to be difficult today," said Robert H. Spilman Jr., Bassett's president and chief executive officer. "Our major challenge in 2007 has been to continue to dedicate operating and capital resources to staff our retail organization, to invest in our marketing strategies, and to design and construct our new prototype store while suffering through the worst industry wide sales slump in memory."

On Monday, Stanley Furniture CEO Jeffrey R. Scheffer said the furniture industry is "mired in the longest and deepest furniture recession in a generation." See story.

Spillman continued, "Although we are certainly not pleased with our results this past year, we have addressed many key issues including the closing of our last major casegoods facility, the closing of several underperforming stores, major reductions in costs associated with our sales expense in the field, and the downsizing of our wholesale showroom. 2008 will feature continued cost reduction efforts balanced with the necessary support for the retail initiatives that are the foundation of the Company's future plans."

"We have been pleased with the performance of our two new prototype stores that were opened in Atlanta and Charlotte during the fourth quarter. These stores better communicate our interior design and custom furniture capabilities and the consumer has responded favorably. Organized around four targeted lifestyles, the store successfully portrays a more stylish residential feel and works in concert with our new consumer catalog that was mailed to more than nine million consumers in 2007."

Bassett will use the prototype as a guideline to standardize all stores. Implementation will occur in stages during 2008.

Bassett Furniture operates 130 retail locations.