Bassett Announces Retailing Joint Venture.

BASSETT, Va.--(BUSINESS WIRE)--Oct. 15, 1999--

Corporate Stores to be Merged with a Leading Licensee's Operations

Bassett Furniture Industries, Inc., a manufacturer and marketer of branded home furnishings, today announced that it has reached an agreement in principle to merge its corporate store operations with those of the licensed Bassett Furniture Direct (BFD) stores operated by Phillip and Ronnie Ladin.

The Ladins, who currently operate five BFD stores in Texas and Las Vegas, are among Bassett's most successful licensees, with store volumes substantially higher than average. The plans are subject to signing a definitive agreement, which is anticipated by November 30, 1999.

The agreement calls for Bassett's 10 corporate stores and the Ladin organization's five stores to be merged into a new company (Newco), to be established when the definitive agreement is reached. It is anticipated that Newco will be managed by the Ladins and will be owned 51% by Bassett and 49% by the Ladins and their partners. Newco is expected to operate these 15 stores and to develop approximately 10 new BFD stores per year in major metropolitan areas.

Paul Fulton, Bassett's chairman and chief executive officer, explained, "Bassett's joint venture with the Ladins has several distinct advantages. It brings immediate scale to the overhead infrastructure of both organizations, while reducing Bassett's corporate overhead by more than $1 million. In addition, it puts Bassett's corporate stores under the management of one of our most successful licensees."

Expanding on the concept, Robert H. Spilman Jr., Bassett's president and chief operating officer, stated, "As Newco expands, it will have the complementary advantages of the Ladins' retailing skill and Bassett's strong balance sheet, which will enable us to secure and finance the best sites. This new arrangement will enable our corporate retailing organization to focus on aggressive expansion of our network of licensed BFD stores. As we move toward our goal of 200 or more BFD stores nationwide, we expect that approximately two-thirds of the units will be licensed outside of Newco."

Bassett Furniture Industries, Inc., based in Bassett, Va., is a manufacturer and marketer of branded home furnishings. The company operates 14 plants in five states, and operates or licenses 45 Bassett Furniture Direct stores nationwide. The company's common stock is traded on the NASDAQ market under the symbol BSET. More information about Bassett is available on the Internet at http://www.bassettfurniture.com .