Behind closed doors, brows are furrowed. In an industry largely dominated by importers, many executives are finding themselves distracted by the threat of Chinese tariffs, years after most thought that battle had been fought.
Rob Spilman, Jr. has other things on his mind. The President and Chief Executive of Bassett Furniture Industries is busy presiding over another expansion of the company’s nationwide network of Bassett stores. The newest prototype opens this month in Dallas. A Greensboro, NC location is next on the list for conversion.
In line with the stores’ focus on personalized design and customized products, the new footprint is more streamlined than those that began appearing in the late ‘90s when the company first made the leap into “manu-tailing.” Shrunken to 80-some stores during the Recession years, the chain — which at its peak numbered 130 locations — is expected to encompass approximately 100 locations by year’s end. Two thirds of the stores are now company-owned. Most would be surprised to learn that nearly 75 percent of the home furnishings offered for sale inside them is domestically produced.
Inside the $460-million company’s corporate headquarters, another revamp is underway. Entire floors are cordoned off. A peek behind closed doors and heavy plastic sheeting reveals the areas are closed not for purposes of downsizing, but to put the finishing touches on sleek, contemporary light-filled work spaces, the kind that would be the envy of any vibrant tech concern in a major metropolitan center.
Across the parking lot, the bright and airy Bassett Design Center, built three years ago to serve as the company’s on-site retail prototype/product design war room, is filled with upscale, sophisticated silhouettes. Watching over the creatives at work here is a wall-sized reproduction of a vintage black-and-white photograph. It depicts a group of Bassett Furniture workers taken in the company’s nascent stages more than a century ago. The current CEO points to one of the men in the photograph and says, “That’s my great-great grandfather.”
If only pictures could talk.
The scion of a dynastic furniture clan that traces its lineage back to the Magna Carta and its fortunes to a land grant in Virginia bestowed by a king, Rob Spilman, Jr., could easily have chosen not to follow in the footsteps — some might say shadows — of his great-great grandfather, John D. Bassett, or his grandfather, John D. Bassett Jr., much less his own father, the late Robert H. “Bob” Spilman, one of the most powerful figures in the American furniture pantheon.
Growing up in a life of privilege in a town bearing his ancestral name, “Rob could easily have been a spoiled kid that became a spoiled adult,” notes industry analyst Wallace “Jerry” Epperson. “But he never did. He has always appreciated his heritage and has gone the extra mile to prove to people that he’s earned what he’s got. He hung in there when he didn’t have to, when he could have walked away.”
The Weight of the World
Back in the early ‘90s, when China began coming on hard and furniture companies began scrambling to deal with the cataclysm to come, Bassett Furniture Industries encompassed dozens of factories and some 4,000 employees. The elder Spilman sent his son and his cousin Jeb Bassett to get a read on what was happening overseas. “We were there for three weeks,” Spilman recalls. “When we got back he said, ‘What do you think?’ And I said, ‘We’re in deep you-know-what.’”
Long known for promotionally priced goods, Bassett was at that time positioned squarely in the dead middle of the marketplace. The young up-and-coming executive intuitively understood it was a deadly place to be. “We had always been programmed to have the cheapest hardware, glass, foam, all of it,” he says. “The mantra was always: Get the price down, Get the price down, Get the price down. But we weren’t the promotional guy anymore, and we didn’t have the cachet necessary to go and compete with companies like Thomasville and Century.”
Like most domestic furniture concerns enduring enormous pressures to cut costs, Bassett increasingly moved its production overseas, closing its stateside factories along the way. Unlike most however, it also actually constructed a domestic factory in 1999 outfitted with robotic equipment from Italy. At the time the company was working to perfect a quality issue with a high-gloss finish it could not overcome overseas. The problem involved formal dining tables made specifically for one of its largest accounts, J.C. Penney, and “the stuff was coming back faster than we were shipping it out.” Unfortunately, by the time the new factory was up and running, the market had begun shifting away toward more casual looks.
“We got around the table one day and said, ‘Now what in the hell are we going to do?”
While the company had already begun importing casual dining product from overseas, on the fly the plant was shifted to producing a small, special order program featuring three chair styles and three table styles in three finishes. “We called it custom casual dining and the damn stuff sold,” Spilman says. A seed was planted. Fast forward and three years ago, the company added onto that building to produce upholstered dining chairs. Today, the plant employs 140 people and is responsible for roughly $30 million in sales.
“It’s become a very important part of our store program,” Spilman relates.
The Future Held So Much In Store
Regarding that store program: Back when Bassett was sandwiched between the low-end importers and the industry’s better-end players, Spilman came to believe that the only way the company could control its destiny was to find a way to better control its distribution. At the time, Bassett had some 12,000 dealer accounts. He began the painful business of cutting off full-line retailers and launching Bassett’s store concept. “My parents were getting letters from the dealers about what a jerk I was,” he says ruefully. Even so, he persisted.
Opening stores that featured only Bassett product quickly led to another realization. “It’s one thing to sell a guy two bedroom sets, but when you have a whole store and every single piece in it is yours, your responsibility for quality and transparency in everything that you do is exponentially heightened,” he says, adding that in those days, all of the Bassett stores were owned and operated by third parties. “There was one seminal moment here in the office when the dealers essentially revolted. They said, ‘You guys are obsessed with price, but you just need to make nicer stuff.’ We needed to upgrade our finishes, our fabrics, our quality, everything.”
The interesting thing was that consumers had an elevated perception of the Bassett brand all along, well beyond how the industry saw the company. “I guess it was because we had been around so long consumers just knew the name, but it became clear to us that we needed to not only upgrade our quality, but we had to style up the merchandise too. We couldn’t just pound out cannon fodder and have a great store.”
All the Right Moves
The successful casual dining program was followed by a move into the special-order upholstery business. That required changing the manufacturer’s existing production-line mindset to a cellular manufacturing strategy, an extremely radical move in those days.
“We had a little program in which the customer could choose the arm, the base and the back of a silhouette, something that is today standard fare in our industry,” he relates. “We took it as far as we could, but we were not able to do it within the confines of the environment,” he reveals now. Experts were hired and given the latitude they needed. The result was a program they called Simply Yours. Again, he says, “the damn thing took off.”
These days Bassett no longer stacks fabrics to the ceiling and all fabric cutting is done on routers. There is no frame inventory, or for that matter, finished goods inventory. Foam is delivered by a supplier every day at 3:30 p.m. for the next day’s run. Upholstered products, available in some 800 fabrics, are shipped out the door in a week’s time. Eventually, the little program that began life as Simply Yours grew into Bassett Upholstery, and ultimately, a $60 million powerhouse known as HGTV Design Studio by Bassett.
Oh yes, that. Seven years have now passed since Spilman put heads together with industry icon and creative strategist Jena Hall to create a licensed furniture line bearing the HGTV name. It came at the tail end of the Recession, the same year that Bassett sold its stake in the International Home Furnishings Center (IHFC) in downtown High Point. Certainly, that afforded the company — scarred like any other during the economic downturn — the luxury of flexibility and the ability to make such a blockbuster deal.
The story of how Spilman fought to win the HGTV deal has been well-documented. What has not is that the executive was driven by more than the prospect of adding a well-known name to the signs over the Bassett stores’ front doors. In recasting Bassett’s business model, he had come to believe that the success of its special-order dining and upholstery programs rested not so much in the ability to make the goods, but in finding the right people to present them to consumers.
“What really sets us apart now was the realization that we needed a design culture in the stores, not just furniture sales. We needed designers who could put an entire room or house together. From day one, we knew that to be successful we had to offer a better experience, to slow the process down and let people have what they really wanted and to take care of the process all the way through. For a long time, shoppers weren’t really getting it, but I was sure that with the addition of HGTV, we could market that concept and people would understand what we were trying to do.”
A couple of years after the HGTV deal, he read a story in an airplane magazine about small-batch bourbon makers. “Guys in bib overalls were being celebrated in Beijing and Tokyo like international stars because they were making bourbon in old factories,” he relates. “All these artisan vibes were floating around, and I thought, ‘This could be something for us.’”
He called a meeting with his cousin Jeb and sales executive Bruce Cohenour. “I had all this stuff cut out of shelter magazines and I put it all up on the wall,” he recounts. “I asked Jeb whether we could do it from a manufacturing standpoint.” It turned out that in a prescient move, Jeb had renewed all the company’s finishing permits, even though the factories’ machinery had been sold and the workers had moved on. Another little program was launched. Called the Bench Made Collection, the dining room furniture crafted in solid red leaf maple and red oak quickly became “a touchstone” for the company’s employees in Bassett stores across the country.
“Initially, we thought it was going to be a cool little story within our stores because I thought the product would be too expensive for the rank-and-file retailers who visit our showroom,” Spilman says. “Then Bruce came to me and said, ‘Let us give it a try,’ and so in October of 2014 we put Bench Made in the showroom at market and in January of 2015 it went into production. Today we’re selling $5,000, $6,000 and $7,000 dining rooms every week. We’ve since added bedrooms to the mix.”
Beyond the plants’ walls where Bassett is producing these better-end, American-made goods, Bassett, VA is slowly springing back to life too. The train station where Dwight Eisenhower and Chuck Berry once stopped is being remade as an event center; a kayaking business thrives in a gas station once owned by his mother and her siblings. Another family member’s beautiful old home was purchased by a winemaker. It oversees a vineyard that recently took second place for its Pinot in Napa.
His company and the surrounding area coming full circle. Rob Spilman, Jr. pauses and looks around the Bench Made plant humming with activity. “It’s so much fun to come over here,” he says. “We got some bad breaks and then some good breaks, but we’ve come out with a viable business model that is allowing the company to prosper. A lot of people showed grit and determination through the journey and we do feel a sense of accomplishment and pride, almost vindication,” he says. “It’s a good story. I just wish Dad had lived to see us make it to the other side.”
