Bassett Investments Outperform Market but Will Impact Third Quarter Results.

Business Editors

BASSETT, Va.--(BUSINESS WIRE)--Aug. 16, 2002

Bassett Furniture Industries Inc. (Nasdaq: BSET) announced today that in the last two months its alternative asset fund (which is 90% of its total investment portfolio) has out performed a declining market characterized by historically high credit spreads and a S&P 500 Index down 15%.

During the two months ended July 31, 2002, the Bassett Alternative Asset Fund managed by Private Advisors, LLC of Richmond, Va., was down 2.8% or $1.6 million and was a non-cash, mark to market loss. Year-to-date this investment is up 1% or $.5 million compared to an S&P Index loss of -19%. A loss in the quarter will, however, impact third quarter 2002 results as the Company had planned on a positive return.

This investment, whose audited financial statements fully describe the funds and the strategies they employ, and are included in Bassett's most recent 10K, had total assets of $58.7 million on November 30, 2001 and $56.1 (after $3.0 million in withdrawals) on July 31, 2002. Bassett originally invested $50.0 million in July of 1998, has withdrawn $18.5 million, and the balance is currently $56.1 million. The primary objective of this investment is preservation of capital. These funds are diversified with seven different fund managers.

The following table demonstrates the performance of these funds relative to several indices.

                   Fiscal      YTD     Annualized since      Total
                    Year    (8 months)  Inception 7/98    Return since
                    2001       2002        to 7/02            7/98
                   ------   ---------- ----------------   ------------
Pretax Income
 (in millions)     $ 5.1      $ 0.5          $ 6.1          $ 24.6
Net Return            9%          1%            11%             52%
S&P 500 Return      -12%        -19%            -4%            -15%(1)
Russell 2000 Return   5%        -14%            -2%             -9%(1)
Lehman Aggregate
 Return              11%          4%             7%             32%(2)

(1)  source - Investorforce.com
(2)  source - Bloomberg LP

"We have conservatively invested these funds to preserve capital and achieve a return for our shareholders," said Robert H. Spilman Jr., president and chief executive officer. "We plan to use this money in the future to expand our Bassett Furniture Direct (BFD) retail program." Given the current market environment, the Company will continue to evaluate its investment alternatives. The Company's existing share repurchase program previously approved by the Board of Directors has a remaining $12 million available to purchase.

Currently, the Company has 79 BFD stores and plans to reach 85 stores by year-end 2002, with a goal of 300 stores by 2010.

Bassett plans to release earnings and its 10Q for the third quarter during the first week of October 2002. Sales and operating earnings are expected to improve over the prior year due to cost reductions associated with its manufacturing restructuring and the expansion of the BFD retail program.

Founded in 1902, Bassett Furniture Industries Inc. 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(R) stores, At Home with Bassett(R), Five Star 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 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," or similar expressions, or those relating to store openings, sales, earnings or future improvement of financial results for periods beyond the second quarter of fiscal year 2002, 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: economic, competitive, governmental, or sourcing issues and other factors identified in Bassett's filings with the Securities and Exchange Commission.