Bassett Furniture Announces Plans to Increase Imports.

Business Editors

BASSETT, Va.--(BUSINESS WIRE)--Aug. 21, 2001

Bassett Furniture Industries Inc. (NASDAQ:BSET) announced today its decision to significantly increase its levels of its imported occasional tables and cribs.

This decision will result in the phasing out of operations late this fall at its Bassett Chair plant and its associated rough mill in Bassett, Va.

"We have struggled with this decision for several months and regret the impact it will have on many of our employees, however we are confident this decision is in the best interests of our customers, our employees, and our shareholders," said Rob Spilman, president and chief executive officer.

The Company expects this decision to result in the loss of approximately 250 to 300 positions or around 8 percent of its total workforce. The annualized pre-tax cost savings are expected to be approximately $8 million or $.48 per share after tax. The Company will be taking a charge in its fiscal third quarter, ending August 25, 2001. The total restructuring and one-time charges related to this decision are expected to be in the range of $4 million to $5 million or $.24 to $.30 per share after tax, the majority of which will be non-cash.

"We recognize that our employees at these facilities have worked hard to meet goals and this decision is in no way a reflection upon them," said Mr. Spilman. "These employees have shown tremendous dedication through this trying situation. However, sound business strategy dictates that we constantly review our operations to be sure we are price competitive and delivering value to our customers."

Bassett will continue to invest in its remaining domestic manufacturing facilities. "We continue to believe that a combination of compelling domestically produced products along with value priced imports will provide the strongest presentation for our retail customers," explained Mr. Spilman.

The latest announcement constitutes one more step towards a more global integration of Bassett's manufacturing processes, including worldwide sourcing of certain key components for its domestic manufacturing plants as well as importing finished goods. Bassett will continue to solidify its import infrastructure with worldwide product procurement and this decision enhances its global supplier relationships.

The Company has completed a thorough review of its entire fixed cost structure and with this decision is better sized to be more profitable on its current level of sales demand. The consolidation should strengthen several of the Company's remaining manufacturing facilities, allowing the domestic plants to manufacture products more competitively, while providing Bassett's consumers with a greater selection of imported products at lower price points.

Bassett's focus during the remainder of the year will be to continue to conservatively manage the balance sheet and to grow its targeted sales channels including Bassett Furniture Direct, At Home with Bassett, and Five Star dealer network. "The long-term prognosis for the Company and the industry remains positive. Our strong balance sheet and high brand name recognition will continue to provide the foundation for the Company as we transition from a furniture manufacturer to a combined manufacturer, importer, and retailer of home furnishings," added Mr. Spilman.

Bassett Furniture Industries Inc., based in Bassett, Va., is one of the world's leading manufacturers and marketers of branded home furnishings. Bassett's products, designed to provide quality, style and value, are sold through Bassett Furniture Direct(TM) stores, At Home with Bassett(R), Five Star dealers and other furniture and department stores. The company's common stock is traded on the NASDAQ market under the symbol BSET. More information about Bassett is available on the company's Internet site at www.bassettfurniture.com.

Certain of the statements in the immediately preceding paragraphs, particularly those preceded by, followed by or including the words "believes," "expects," "anticipates," "intends," "estimates," "should,"or similar expressions, or those relating to or anticipating financial results for periods beyond the second quarter of fiscal year 2001, constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended. For those statements, Bassett claims the protection of the safe harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. In many cases, Bassett cannot predict what factors would cause actual results to differ materially from those indicated in the forward looking statements. Expectations included in the forward-looking statements are based on preliminary information as well as certain assumptions which management believes to be reasonable at this time. The following important factors affect Bassett and could cause those results to differ materially from those expressed in the forward looking statements: the ability to achieve anticipated savings, and the economic, competitive, governmental, technological and other factors identified in Bassett's filings with the Securities and Exchange Commission.