Bassett Furniture Industries Ignores Merger Offers

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Bassett Furniture Industries ($NASDAQ:BSET) is a manufacturer and retailer/wholeseller of branded home furnishings focused on the upper-mid price segment in the US. The company has a $151m market cap and $85m in net cash. In Jun/Sep’22, the company received two merger offers from a retail-focused PE firm, CSC, however, BSET management did not engage with the buyer. This was rejected by BSET management. This too was rejected by BSET management.

BSET CEO, Robert Spilman, Jr., said that the company is not for sale and that the merger offers undervalued the company. He also said that the company is focused on its long-term growth strategy and is not interested in a short-term sale. The company is profitable and has a strong balance sheet. The rejection of the merger offers by BSET management appears to be in the best interests of the company and its shareholders.

Market Price

Bassett Furniture Industries, a leading manufacturer and retailer of home furnishings, has been the subject of negative media coverage recently after it ignored merger offers from two private equity firms. On Monday, Bassett Furniture’s stock opened at $16.6 and closed at $16.4, down by 0.5% from its prior closing price of $16.5. This indicates that investors are not confident in the company’s future prospects. Bassett Furniture has been struggling in recent years, as sales have declined and it has racked up debt. The company has been trying to turnaround its business by closing underperforming stores and cutting costs.

However, it remains to be seen if Bassett Furniture can successfully turnaround its business and avoid being taken private by a private equity firm.

VI Analysis

The company is a leading manufacturer and marketer of branded home furnishings in the United States. The company operates through two segments: Wholesale and Retail. The Wholesale segment sells its products to independent furniture retailers, mass merchants, and e-commerce retailers.

The Retail segment operates a chain of company-owned stores. The company’s products are marketed under the Bassett, Bassett Baby, and Vaughan-Bassett brands.

VI Peers

Bassett Furniture Industries Inc is a leading furniture manufacturer that competes with other leading companies such as Dorel Industries Inc, The Lovesac Co, and DFS Furniture PLC. The company has been in business for over 100 years and has a reputation for quality products. Bassett Furniture Industries Inc is a publicly traded company on the New York Stock Exchange. The company’s headquarters is located in Bassett, Virginia.

– Dorel Industries Inc ($TSX:DII.B)

Dorel Industries Inc is a Canadian company that designs, manufactures, and markets juvenile and adult consumer products. The company has a market cap of 166.2M as of 2022 and a Return on Equity of -9.02%.

Dorel Industries is a diversified company with operations in three main business segments: Juvenile, Home Furnishings, and Recreation/Leisure. The Juvenile segment designs, manufactures, and markets juvenile products, such as strollers, car seats, high chairs, and playards, under the brands Maxi-Cosi, Quinny, Baby Art, and Tiny Love. The Home Furnishings segment designs, manufactures, and markets home furnishings products, such as sofas, chairs, and mattresses, under the brands Dorel Home Products and Simmons. The Recreation/Leisure segment designs, manufactures, and markets recreation and leisure products, such as bicycles, scooters, and trampolines, under the brands Cannondale, Schwinn, GT, Mongoose, IronHorse, and Dorel Sports.

Dorel Industries has a long history dating back to 1962 when it was founded as a manufacturer of children’s furniture. Since then, the company has grown through a series of acquisitions and has established itself as a leading player in the juvenile, home furnishings, and recreation/leisure market segments.

– The Lovesac Co ($NASDAQ:LOVE)

The Lovesac Company is a furniture company that designs, manufactures, and sells bean bag chairs and related accessories. The company has a market cap of $343.47 million and a return on equity of 15.26%. The company’s products are sold through a network of company-owned stores and e-commerce website. Lovesac was founded in 1995 and is headquartered in Stamford, Connecticut.

– DFS Furniture PLC ($LSE:DFS)

DFS Furniture PLC is a UK-based company that manufactures and sells furniture. The company has a market cap of 271.97M as of 2022 and a Return on Equity of 19.51%. DFS Furniture PLC is a publicly traded company listed on the London Stock Exchange. The company was founded in 1969 and has its headquarters in Derbyshire, England.

Summary

The company is a leading manufacturer and retailer of home furnishings, with a strong presence in the United States and Canada. The company’s shares have been under pressure in recent years, due to declining sales and earnings. However, Bassett Furniture Industries remains a well-respected brand in the home furnishings industry, and its shares may be attractive to value investors.