by Macy, Beth
Lexington responded with a second threatening letter, saying the suite still violated the company’s trade dress and arguing that it had sole authority to bring a design back from history because it had been the first in recent history to do so.
John usually tried to play nice. But by now it had become clear that somebody had to take on this multibillion-dollar Goliath, and as John Bassett was wont to think: It might as well be him.
We’re going to sue you was the next volley from Lexington’s New York lawyers.
Bring it, John Bassett said, and grabbed his two favorite tools: a legal pad and a telephone.
This was John Bassett in the catbird seat: A mostly female jury in a Greensboro courtroom filled with piece after piece of furniture, if not exactly of his making then at least made largely of his design. He smiled as his workers hauled in the items, his leg bouncing up and down in anticipation, as it always does when he’s about to do one of his favorite things: lecture.
He would compare and contrast his suite with the Lexington suite and with similar reproductions made by myriad other companies, all of which drew inspiration and detail from one another and from the reign of Queen Victoria, of course.
Asked years later if he’d been nervous, he said, “As a whore in church!” But he masked the perspiration well. The moment the judge gave him permission to walk around the courtroom, roaming from dresser to dresser, John Bassett wasn’t just sitting in the catbird’s seat. He owned it. In his nearly four decades of practicing law, John’s lawyer Warren Zirkle said he has yet to encounter a more impassioned trial witness.
John rubbed a cornice piece with his hands, signaling his love of the materials and the craft. He looked the female jurists in the eye, knowing that women handle the bulk of furniture purchases. He spoke so knowledgeably about his favorite subject that if he hadn’t already explained that he’d grown up checking on his family’s factories en route to Little League games, they would have intuited it. Jurors could practically smell the sawdust emanating from his sweat.
Then came the folksy drawl, the diphthongs, the preponderance of dropped g’s.
“He is very adept at wrapping himself in the red, white, and blue,” Zirkle told me. “He used every opportunity he could to tie his argument back to why he felt so strongly about his right to sell this furniture—and why it was in the consumer’s best interests for that to be so.”
The Lexington lawyers had prepared for a case that enumerated the many ways in which Vaughan-Bassett had ripped off Lexington’s design. But Zirkle made that argument moot by countering: We admit we copied it, and we have a right to—not just because the styles were popular in Queen Victoria’s time but also because copying ultimately serves the consumer by encouraging competition and therefore lower prices.
The company’s other ace in the hole? The weekend before the two-week trial began, Wyatt holed up in his parents’ Roaring Gap guesthouse poring over Lexington’s pending-patent applications. And he noticed something: Lexington’s newest catalog featured six collections that included the patent-pending label. But Wyatt had a copy of the company’s patent applications, and when he cross-checked, he found that none of the six in question were actually on the patent-pending list.
So Vaughan-Bassett countersued, at which point Lexington argued that its patent-pending labels were simply mistaken. “They thought they could just scare everybody off [from knocking off their designs], then after a year or two claim we had violated their trade dress,” John Bassett said.
“They were gonna totally change the business for us, and if they had won, they could have gotten triple damages—well into the millions. It could have broken this company.”
The trial lasted ten days and included a surprising witness for the defense—Bob Spilman—who talked about how Bassett Furniture had played the same knockoff game as Vaughan-Bassett, as had everyone else in the mass-market price category. The jury knew it wasn’t just a typical brother-in-law testimony when John explained that he’d left Bassett Furniture in 1982 because the company wasn’t big enough to hold the both of them.
“Self-preservation is the first law of nature,” explained Bob Merriman. “Over the years, Bassett Furniture probably copied more people than anybody I know. Bob pretended like he testified to try to help John, but he was also making sure his ox didn’t get gored in this thing.”
Spilman testified out of loyalty to Jane and to people like B.C. Vaughan and Buck Higgins, according to Bunny Wampler, the CEO of Pulaski Furniture, who also testified as a witness for Vaughan-Bassett. “All we did was tell the truth—that there is no originality in the furniture business, no matter what anybody says,” Wampler said.
In the end, the knockoff tradition prevailed, and Lexington’s furniture was deemed not so distinctive as to provoke a trade-dress violation. The jury also decided that Lexington’s patent-pending labels were in “reckless disregard for the rights of Vaughan-Bassett” and ordered Lexington to pay Vaughan-Bassett one dollar in damages, a symbolic victory.
John Bassett had no clue that a much bigger legal battle awaited him, against an opponent that was more hostile than Spilman and worth even more than Masco. It would also thoroughly upend his argument about putting the consumer’s dollar first.
But for now, anyway, his company was safe.
16
Trouble in the ’Ville
By God, Johnny, this doesn’t smell like springwater to me.
—BOB BRAMMER
Though his uncle’s legacy would soon come into play, John didn’t know much about the venerable W.M. Bassett. In fact, he remembers only one story about his late uncle Bill.
The families were all at the compound in Hobe Sound, Florida, circa 1946. Mr. J.D.’s house was first in the line, followed by the vacation homes of John’s aunt Anne Stanley, his aunt Blanche Vaughan, his uncle Bill, and, finally, his father. Little John was nine years old and so bored that he took to dribbling his basketball up and down the concrete sidewalks and driveways of his relatives’ homes in the afternoon—when the head of Bassett Furniture just happened to be taking his nap.
It was pre-air-conditioning, and the windows were open, with white mesh screens to keep the no-see-ums out. He was perfecting his dribble when he heard the raising of a screen in his uncle Bill’s bedroom window. A crisp dollar bill appeared, fluttered in the warm breeze, and landed gently near his feet.
Little John picked up the dollar, held it like the secret it was, and knew exactly what it meant. He took his ball and left W.M. Bassett to nap in peace.
The following afternoon, the dribbling commenced again, and the manna from heaven reappeared. No one said a word about the exchange. When on the third day a five-dollar bill floated down before him, Little John knew instinctively what that meant too: No dribbling for a week.
In those days, Bassett kids were blessed with a weekly allowance of one dollar—and Mr. Doug expected his son to save half and not blow the whole thing playing slot machines over in “black town,” as most whites called the segregation-era black commercial district.
“How much money do you have left from your allowance, son?” Doug Bassett wanted to know.
John carefully retrieved fifty cents from his pocket.
“That’s a good boy, son,” Doug said, having no clue about the remaining $3.50 John had stashed in his room—or the fun he’d had playing the slots.
JBIII didn’t know his uncle well at all, but he has long relished the memory of that floating dollar bill—not to mention the lesson on what money could do for a clever boy who knew when to talk and when to keep his mouth shut.
As former Bassett vice president Howard Altizer put it, W.M. Bassett was probably the best furniture man in the entire extended clan. “But he’s the one Bassett that gets overlooked in the company history because for the thirty years that he ran it there was no sensationalism.”
But W.M was soon to experience sensationalism, with his namesake plant at the center of controversy. Had the men at Bassett Fur
niture known what was about to hit them, they might have heeded Mr. W.M.’s favorite bit of advice:
“Gentlemen, get out your smelling salts!”
JBIII had never worked with his uncle Bill, though early in his career, during his stint in quality control, he regularly stopped by the plant W.M. Bassett had founded. It was a big factory, four stories high and seven hundred thousand square feet, down a hill from a residential neighborhood in Martinsville and not far from downtown.
It was also possibly, as John Bassett learned soon after the Lexington trial, about to be sold.
He knew the factory had a state-of-the-art finishing room, and, even better, it had retained its environmental permits from earlier years. He knew a buyer wouldn’t have to bother with those pesky new EPA regulations; the finishing room at the W.M. plant was grandfathered in under the older, more liberal rules.
JBIII also knew exactly where the sewer line was located because one time back in the 1970s, he’d overseen the building of a new lumberyard on the site—only to have a contractor mistakenly nip the sewer line with his bulldozer. He thought the contractors had hit springwater, but before long, a stench engulfed the town, and it traveled all the way to the DuPont nylon plant, the region’s best-paying employer for miles.
John called in Bob Brammer, the head of plant expansions, who sped to the W.M. plant so fast he left a trail of dust in his wake. His hooked nose twitched like a rabbit’s the moment he got out of his car. “By God, Johnny, this doesn’t smell like springwater to me,” he said.
It was two decades later now, and John Bassett could recall exactly where the sewer line was beneath the W.M. plant. “I even knew where the damn springwater was. They weren’t gonna fool me with this one.”
He knew too that NAFTA was already running roughshod over the workers in the region’s textile plants: By 1997, thousands of sewing jobs had moved to Mexico and overseas, and rumors were that the great ship DuPont and the other sweatshirt and textile companies that still employed eleven thousand people in Henry County would soon be sunk.
Bassett had closed its original Old Town factory in 1989, but its remaining Henry County plants were running full steam. Spilman, now nearing retirement, had hit a record sales peak of $510 million in 1994, the same year NAFTA’s “giant sucking sound” commenced. But sales were now in decline, owing to the rise of importers who were underselling domestic producers at every turn. “We were always the Fords, and suddenly the retailers started going for the Toyotas… and then the big buyers started bringing in container loads of the stuff,” recalled Bassett sales executive Joe Meadors. “We lost a lot of our market share because we were trying to fight off the imports.”
The California Public Employees’ Retirement System, the largest pension fund in the country and an institutional shareholder in Bassett, put Bassett on its list of ten underperforming companies in 1996 and 1997. CalPERS also submitted a proposal to the company’s board to separate the positions of CEO and chairman—a move widely viewed as a jab at Spilman.
Spilman, sixty-nine, was also taking heat from some shareholders for being overly committed to other corporate boards, from coal companies and insurance giants to several colleges and banks. A Businessweek story pointed out that five NationsBank directors served on the Bassett Furniture Industries board in a rubber-stamp arrangement that the magazine deemed clubby, incestuous, and “little more than a claque of the CEO’s cronies.”
“The board acquiesced to Bob Spilman too much,” said one longtime member, who asked not to be named.
Mary Elizabeth Morten remembers when the extended family finally decided Bob Spilman needed a not-so-subtle nudge off the CEO chair. Joined by her cousin Tom Stanley, Bonce Stanley’s son, the pair leveraged their stock holdings and made the case that it was time for Spilman not just to relinquish his post as president but to step down entirely from the operation.
“Has Mrs. Morten sought legal counsel?” one of the pro-Spilman directors wanted to know.
She might have been retiring and unerringly polite—Mary Elizabeth showed up to our first interview wearing a skirt suit with a matching hat in the style of Jackie Kennedy—but she had very definitely sought legal counsel. “It scared them,” her husband, Spencer Morten, recalled. “Mrs. Morten was maybe going to sue them for malfeasance. By this time, Bob was [or had recently been active] on twenty-three different boards, and he had no time to run the company.”
By the time Spilman’s retirement was official, in August 1997, the company had slid to number seven on Furniture/Today’s list of the top twenty-five American manufacturers. Of the eighteen publicly owned companies on the list, only three—including Bassett—performed worse in 1996 than they had in 1995. The company hadn’t had a real growth spurt since 1992.
When a Roanoke Times reporter called John Bassett for his reaction to the news of his brother-in-law’s “retirement” from the company, only an insider would have known John’s tongue was firmly in his cheek. “Bob has been one of the more unforgettable people in our industry,” he said.
Spilman was praised for overseeing numerous acquisitions and expansions and for his role in organizing the purchase of the International Home Furnishings Center in High Point—the main Market showroom building—to keep the trade show from migrating to Dallas or Atlanta.
Neither the local media nor the trade press carried the real story behind Spilman’s departure. “The Jupiter Island crowd, they were displeased” with his performance, Rob said, referring to his relatives. But the family no longer had the stockholding clout to force a retirement, he said, disputing Spencer Morten’s account. Rob Spilman said his father and the board mutually conceded that since he was sixty-nine and the company was no longer on the upswing, it was time for him to step down.
Barber Coy Young said word filtered down to the masses in town as it usually did.
“He was still in charge of the port authority,” Coy said. Spilman had helped transform it from a place ships passed on their way to Baltimore into one of the busiest ports along the East Coast. He’d personally called on governors for funds and shepherded the reunification of the Norfolk and Hampton Roads ports.
“He was still blowing around town like he always did—as Mr. Spilman, CEO. But you could tell he was wounded.
“The air was definitely out of his sails.”
Rob Spilman was named president and chief operating officer, and, if Bob and Jane’s succession plan came to fruition, before long Rob would be CEO.
Rob had grown up in Bassett—before he went away to boarding school, anyway—when his family’s company was top dog. As a kid attending the High Point Market with his parents in the 1960s, he watched his father and uncles implement an astonishing six-week moratorium on accepting new orders from retailers. Back then, the factories were so busy, they could barely keep up.
Like his uncle John, he learned early on that it wasn’t so easy to be an heir apparent. He distinctly remembers a Bassett Elementary teacher going around the room and asking students what they wanted to be when they grew up. When Rob said he wanted to be a lawyer, the teacher said, “You can’t do that. You have to run the company.”
Some kids resented his family’s power and picked on him simply because, as Rob said, “You are who you are, and there’s only one of you”—another Bassett heir, another silver spoon.
When he was fourteen, his father picked up the phone and told the manager of Bassett’s Arkansas plant, “My son’s gonna come live with you for the summer.” Neither Rob nor the plant manager had a choice in the matter. “Dad and I fought like cats and dogs,” Rob said. “When I was a teenager, he was a black belt ass-chewer.… I was dying to get away from Bassett.”
After graduating from Vanderbilt and doing a six-year retail stint in Houston, Rob went to work for the family business. It was 1984, a time when Bassett’s police force was still operated by the company, and residents still paid their power bills at the Taj Mahal.
With blue eyes and receding blond hair, Ro
b looks like a younger version of John Bassett. He shares a competitive if somewhat easier relationship with his uncle than his father did—though they don’t exactly trade horses either, as Junior Thomas would say. John was among several Bassett relatives who offered his opinion via letter to the Bassett board just before Bob Spilman left, arguing that Rob Spilman was too young to assume the CEO mantle during such rocky times, so soon after the CalPERS kerfuffle and just as the battle over Asian imports was becoming a full-on war.
Rob did fly to Atlanta to interview for the position of Bassett CEO, but he didn’t get the job. Not then. He lost out to Paul Fulton, the dean of the University of North Carolina’s business school and a twenty-nine-year veteran of Sara Lee Corporation. Fulton had helped pioneer the egg-shaped container for L’eggs panty hose as company president and was known for his shrewd management of company brands that included Hanes, Isotoner, and Jimmy Dean.
“He was an operator’s operator, a businessman who… started out as a trainee in a Hanes Hosiery plant and ended up running a global monolith,” Rob said admiringly. Fulton was plainspoken, and he dropped F-bombs left and right. Rob was happy to take a backseat to him, he told me, hoping to soak up some of his marketing genius and big-picture acumen. “He’s been one of the great influences of my life,” Rob said of Fulton, the only person outside the Bassett family to hold the CEO title in its century-plus of operations.
