by Macy, Beth
Rob considered Fulton’s world more sophisticated than the one the furniture industry hailed from; more modern too. He admired his energy, especially when he told his young CEO in training, “We gotta get some shit done around here.”
That shit soon became clear to shareholder Spencer Morten, who paid a visit to Fulton shortly after he took over as CEO. “Our asset-management people said we had too many eggs in one basket [in Bassett Furniture stock], and there’s a lot of concern about all the textiles going to Mexico and China,” he remembers telling Fulton. “Paul, we’re concerned about where the company’s going.”
“Spencer, I’m not a furniture man, I’m a figure man. If Rob doesn’t make money on those plants, I’m gonna close ’em.” By 1998, furniture imports accounted for nearly a third of all wood furniture sold in the United States, up from 21 percent five years earlier. At the High Point Market that spring, industry executives told reporters that, wherever possible, they would try to beat their import competitors. But in cases where they couldn’t match the price of the competition, they would join them and outsource the furniture instead, developing a “blended strategy,” as it soon became known.
But that dual strategy soon blurred as many companies, including JBIII’s Vaughan-Bassett, started buying parts and finished furniture from overseas factories and selling it under their own names. The question for each company then became: How far should the importing extend?
Fulton embraced the blended strategy, but he also wanted Bassett to cash in on its brand name, which was a rarity in the industry, one cultivated from decades of furniture giveaways on Wheel of Fortune and copious ads in Reader’s Digest, Life, and Look.
Inspired by the Ethan Allen chain, in 1994 Rob had introduced the Bassett Direct Plus concept, gallery stores across the nation that sold only Bassett Furniture. It had been tough getting his dad on board at first. Rob had to get the store architect to bill him for the plans five times in five-hundred-dollar increments, which by then was the classic company circumvention around any purchase that exceeded the Bob Spilman spending cap.
But when he called his dad the weekend after Thanksgiving to tell him how much one store in Mississippi had sold that day—$70,000—his dad saw the wisdom in retailing.
“Goddamn,” Spilman said. “You be in my office Monday morning.” He wanted more stores. There were eighteen of them by the time Spilman retired in 1997, with plans to open thirty-three more—and add accessories—the following year.
Fulton vowed to take Bassett Direct to the next level, even though it meant the company would alienate many longtime retail customers, who would now be its competitors. Among his first moves was to hire Bain and Company, the umbrella group of the private-equity firm that Mitt Romney cofounded, to analyze and validate his retail strategy via interviewing store managers and franchisees.
“Bassett has got lightning in a bottle here, and they don’t even know it,” according to Bain’s glowing report.
The sea change was controversial, not just with retailers but also with board members and industry insiders. “Fulton came in and thought, My God, we can’t make it on manufacturing anymore; we’ve gotta go vertical and start importing things we can sell in our own stores,” said Dave Phillips, an investor based in High Point and part owner of the Market buildings where the showrooms are housed. (Phillips was on the board of Vaughan-Bassett until 2006, when President George W. Bush appointed him to be the U.S. ambassador to Estonia.)
Fulton left it to Rob to sort out the details. During a visit to an Omaha, Nebraska, electronics store that was bursting with energy, Rob told the manager, “This is hip! This is cool!” He tracked down the Seattle-based retail consultant that that store had hired and asked her to remake Bassett too.
It didn’t hurt that J’Amy Owens, thirty-eight, was gorgeous—down to her blond highlights, impeccable jewelry, and confident silver tongue. A cover story in Inc. magazine praised both her eye for design and her ear for being “well-tuned to the ka-ching of the cash register.”
Bassett was a paternalistic throwback compared with her typical clients, which included Nike, Starbucks, and Blockbuster. She began her pitch by telling the male executives that the Bassett conference room they were sitting in had been decorated when the song “Muskrat Love” was a hit, more than two decades before.
With a fast-paced delivery that would have made Don Draper proud, Owens skewered Bassett’s corporate culture by presenting a story-board collage of commentary on its factories, offices, and stores: grimy black-and-white smokestacks and white guys in ties sitting in wingback chairs, smoking cigars and drinking scotch. A picture of Sean Connery. Men who hunted and fished and drove fast cars when their wives let them get away with it—and she didn’t even know about the riverside shenanigans of the late Mr. Ed.
In the corner of her board crouched a cartoon of a woman letting out a horror-movie shriek.
Then she dramatically unveiled board number two.
“And this…,” she said, pausing for effect, “is your customer.”
It was full of pastel colors and smiling women who looked beautiful inside their warm, well-appointed homes.
Rob Spilman got what she was saying immediately: the people who ran Bassett were backwoods Neanderthals, completely out of touch with the customers they were trying to reach.
“Guilty as charged,” he said.
The company paid Owens $100,000 to elevate its brand, and, in a 180-degree strategy turn that resonates to this day, the business began a shift toward retail and marketing and, gradually, away from manufacturing. Though the company was importing only 8 to 10 percent of its products at the time, the emphasis on supplying the stores soon reigned supreme.
At Owens’s suggestion, the company recruited Janice Hamlin, who’d worked for Disney and Mattel, to become its first vice president of marketing—the company’s first female corporate officer. Her job was to enlighten her bosses about what women wanted. Hamlin ran focus groups and hired spokeswomen, including TV pitch people who presented themselves as decorating advisers and encouraged customers to “Let yourself go!”
Cable TV home-decorating host Chris Casson Madden shared her opinions with the furniture designers on everything from table edges (rounded ones are safer for kids) to upholstered sofas (tauter fabric is wrinkle-resistant). Bassett stores were painted in warm earth tones, and fresh-baked cookies were set out for browsers in an effort to quell the anxiety the typical customer felt about making a big-ticket purchase.
The company would no longer sell just to the masses. It would also reach out to middle- and upper-middle-income customers, offering customized upholstery, in-store design centers, and a plethora of imported accessories. Interior designers greeted customers in Ethan Allen’s more upscale stores, but Bassett customers were greeted by “idea coordinators” wearing casual clothes and striving for a more approachable look.
Owens also suggested a name change from Bassett Direct (too factory-outlet-sounding, which she felt cheapened the product) to Bassett Home Furnishings, to evoke a higher-end feel. Everything was designed to give the company a softer focus that would be more appealing to women, who made 80 percent of household furniture-buying decisions.
Bassett’s transition was so sweeping that it caught the attention of the Wall Street Journal, which featured the company—along with the “softer side” peddling of J’Amy Owens and Janice Hamlin—in a front-page story. The new stores won national design awards.
Rob Spilman loved the attention the Daddy Rabbits were finally getting from the sophisticates in New York. With imports slowly taking over the business, he hoped the new strategy would “help the company survive the vagaries of the marketplace, to be more profitable, to utilize our brand,” he told me. “Also, it was an insurance policy against losing the J.C. Penney business”—a worry that kept many a Bassett manager up at night because that account alone represented $80 million in annual sales.
At the time, he believed opening the stores might “help
save the factories,” he said, even though the strategy cost the company thousands of accounts. Mom-and-pop dealers that had been selling Bassett Furniture for decades were no longer allowed to offer the product if they were located within fifty miles of a Bassett store.
The small independent dealers felt duped. “They had good intentions,” Mike Micklem, Vaughan-Bassett’s Virginia sales rep, said. “But the dealers out in the rural areas and small towns were really hurt. It was like Bassett was forgetting their roots, forgetting who’d gotten them to where they were.”
The misters would have turned over in their mausoleums. Mr. Ed had routinely dispersed Bassett reps to every rural corner of the country, demanding they “sell everybody you can sell as long as they can pay their bills.”
But the world was changing, and commerce along with it. Time would tell if J’Amy Owens’s vision for modernizing Bassett Furniture would go the way of Starbucks, with global outposts and upwards of twenty thousand stores, or the way of Blockbuster, which filed for bankruptcy in 2010.
If this was the “softer side” of selling furniture, the line workers knew they were in for a rough tumble. It was all part of a reorganization to focus the company on the core lines supplying its retail stores.
The old-timers still called COO Rob Spilman “the boy” behind his back, even though he was in his mid-forties, but one of the first unpleasantries he was tasked with wasn’t kids’ stuff. In May 1997, Rob Spilman stood before news cameras in Martinsville and announced that the W.M. plant was closing, a move that would eliminate four hundred jobs. And there was more bad news: the company’s low-end Impact Furniture Division, near Hickory, North Carolina—Bassett’s version of glit—would be closing at the same time, followed shortly by Bassett’s plant in Booneville, Mississippi.
Fulton hadn’t yet started his new job, but he was at the press conference in anticipation of it. “I support this restructuring, the strategic direction that it takes the company,” he said. “We intend to perform similar analyses relating to strategy, organizational structure and capital structure after my arrival on August 1.”
Months later, Rob Spilman swore that his plan had not been to do away with Bassett’s domestic workforce, but he also noted that the company was building a team of fifteen to twenty experts in global trade, particularly in China, where factories with millions of square feet devoted solely to American-style bedroom-furniture production would be up and running within the year.
From the rough end to the rub room, the company’s remaining line workers worried that the iceberg had already irreparably marred the ship. Like the chamber orchestra on the Titanic, the workers kept on at their jobs because, well, what else could they do? Their friends at Pannill Knitting and Sara Lee Knit Products were already out of work. So were seven hundred DuPont employees, thanks to growing international trade and, to a lesser extent, technological advances that resulted in fewer people running more computer-controlled machinery. (Fueled by NAFTA, Mexico overtook China as the number one clothing exporter to the United States in 1996.)
Henry County’s Frances Kissee bounced from one dying factory to the next, holding on as long as she could until the next pink slip appeared. In 1975, right out of high school, Kissee started her working career doing piecework for Sara Lee Knit Products, and she was earning ten dollars an hour plus benefits when it closed in 1994—not long after Chinese textile managers came and watched her work.
“In the beginning, we used to get truckloads of stuff they’d sewed badly, and we had to redo their mistakes,” she recalled. “No one ever said we’d be replaced.”
But replaced she was, first in the textile mills, then in the call centers—where it was workers from the Philippines who ultimately nabbed her call-center job at StarTek in 2011. It was her sixth layoff or company closing in eighteen years.
“I like’d to died,” Sallie Wells of Bassett told the Martinsville Bulletin on the day the W.M. plant closing was announced. She’d spent ten years working in its sanding room. The company had said it would shift most of the workers to other Bassett plants, but the transition grew trickier to pull off because Paul Fulton remained true to his word: he closed any plant that wasn’t making money.
At the end of 1997, the company reported $19.6 million in losses on sales of $446.9 million. Between 1997 and 2000, Bassett Furniture went from operating forty-two factories to fourteen.
“We used to brag about how many plants we had,” Rob Spilman said. “But Paul would say, ‘I’d like to brag about how few plants we have—and how much money we make.’
“Look,” Rob added, sighing and sounding not unlike his uncle when annoyed. “Throughout that whole process, in the back of my mind, I didn’t know how many factories we would end up with. But I did think the salvation, if we were going to keep any of the factories going at all, was to open a lot of stores and sell the furniture, okay?”
W.M. machine-room operator Ralph Spillman (different spelling, no relation) told the Martinsville Bulletin he planned to go into heating and air-conditioning after taking some community college courses paid for by Trade Adjustment Assistance, a federal program that provides training and resources to workers displaced by foreign competition.
But participation in TAA is low—30 percent in Virginia—and the results among blue-collar workers who do participate are uneven, with half earning a fraction of their former pay, and many unable to find work in their designated fields, according to Government Accountability Office studies. Many end up quitting their classes the moment another job becomes available. Spillman took a year’s worth of classes, then quit when he found a textile job across the state line in North Carolina, fifteen minutes from his home.
By the time that factory eventually closed, Spillman was on disability. “For my nerves,” he told me. “Working in textiles was stressful, and worrying about everything—the closings, how you’re going to eat—that has messed a lot of people up.”
He recalled employees at the W.M. plant, where his mother and his grandfather had both worked, crying on their last day. The factory closed as most do: not with a final slamming of the doors and hundreds of workers unloosed en masse but gradually, with small, gloomy batches of good-byes. The last pieces of furniture came down the line, and after each department finished its work on the cutting, its employees were let go. That way, the layoff remained orderly, efficient, and true to the bottom line.
A few months later, as Ralph struggled to adjust to life on unemployment, he was buoyed by a bit of good news. Bassett Furniture had donated the W.M. plant to the City of Martinsville. The company would get a sizable tax write-off from it, and the city would be able to tear down the building and use the site to lure higher-paying employers, preferably in high-tech industries, to the area.
But that wasn’t what Ralph considered the good news. This was: John Bassett wanted to buy the old plant from the city and turn it into a modern youth-bedroom-furniture factory that would employ as many as four hundred people. He’d already hired a lawyer to examine the deed to see if there were any restrictions on the gift, knowing the tax write-off was greater when a gift was given free and clear. There weren’t.
The possibilities reminded John of his uncle Bill’s dollar bills floating down from the window overhead. And he thought, Why not?
As John tells it, he and Wyatt paid a visit to Tom Harned, Martinsville’s assistant to the city manager. Harned told them the city planned to tear the building down and turn the property into an industrial park.
“Why tear it down when you can sell it to us?” JBIII said. He was willing to pay $5.25 million for the property and guarantee the hiring of two hundred and fifty workers at the start. He was willing to write a check for $20,000 to hold the property; city officials would have it by Monday, the next business day.
Harned was dumbstruck. He recognized his last name but had no idea what Vaughan-Bassett was or why John Bassett seemed to know every square inch of the W.M. plant already, down to the positioning of its sewer li
ne.
“Let me get back to you,” Harned said.
News reached Rob Spilman and Paul Fulton that the perennial bad penny had turned up again while the two were at the year-end company retreat at Pinehurst, the North Carolina golf resort. Buck Gale was running the Bassett plants in Georgia at the time, but he had flown to North Carolina for the meeting, and he was sitting near the two executives when an underling whispered to Rob that John Bassett was sniffing around the W.M. factory.
Gale, whose father had once run the W.M. plant, recalled Fulton’s response down to the word: “He’s just a rich boy trying to get back at us.” (In an interview, Fulton, now retired from the corporation but still the Bassett chairman, denied he’d said this and claimed he’d had nothing to do with the W.M. dispute.)
The company plane was dispatched to ferry Joe Philpott and another lieutenant back to Martinsville to run interference on the deal, according to several retired Bassett managers, including Joe Philpott.
“Look, the agreement was when we gave it to the city that it could not be sold to another furniture manufacturer,” Philpott said. “It was supposed to be torn down. So my ass had to come home.”
Rob Spilman said he knew who the potential buyer was before he heard his uncle’s name. The deal didn’t smell much like springwater to him either.
According to Rob, John called him the night Rob announced the plant closing to say, “Well, y’all are finally doing something.” Then he asked his nephew to detail his plans for the remaining Bassett plants: “What are y’all doing with the J.D. plant? How about Macon?” Rob recounted the questions in a cackling impression that made JBIII sound like Foghorn Leghorn (which, honestly, he kind of does).
