Note 18 - Segment Information

12 Months Ended

Nov. 28, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

18. Segment Information

We have strategically aligned our business into three reportable segments as defined in ASC 280, Segment Reporting, and as described below:

● Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned stores retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations as well as all corporate selling, general and administrative expenses, including those corporate expenses related to both Company- and licensee-owned stores. Our wholesale segment also includes our holdings of short-term investments and retail real estate previously leased as licensee stores. The earnings and costs associated with these assets are included in other loss, net, in our consolidated statements of operations.

● Retail – Company-owned stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.

● Logistical services. With our acquisition of Zenith in 2015, we created the logistical services operating segment which reflects the operations of Zenith. In addition to providing shipping and warehousing services for the Company, Zenith also provides similar services to other customers, primarily in the furniture industry. Revenue from the performance of these services to other customers is included in logistics revenue in our consolidated statement of operations. Zenith’s operating costs are included in selling, general and administrative expenses and total $73,913, $78,220 and $81,468 for fiscal 2020, 2019 and 2018, respectively.

Inter-company sales elimination represents the elimination of wholesale sales to our Company-owned stores and the elimination of Zenith logistics revenue from our wholesale segment. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate, and the elimination of shipping and handling charges from Zenith for services provided to our wholesale operations.

The following table presents segment information for each of the last three fiscal years:

	2020			2019			2018
Net Sales
Wholesale	$	221,075		$	261,105		$	255,958
Retail		211,944			268,693			268,883
Logistical services		75,158			80,074			82,866
Inter-company eliminations:
Furniture and accessories		(95,347	)		(125,933	)		(122,372	)
Logistical services		(26,967	)		(31,852	)		(28,480	)
Consolidated	$	385,863		$	452,087		$	456,855
Income (loss) from Operations
Wholesale	$	4,587		$	11,456		$	12,274
Retail		(9,497	)		(7,009	)		(312	)
Logistical services		1,245			1,855			1,398
Inter-company elimination		2,647			1,144			1,494
Asset impairment charges		(12,184	)		(4,431	)		(469	)
Goodwill impairment charge		(1,971	)		(1,926	)		-
Early retirement program		-			(835	)		-
Litigation expense		(1,050	)		(700	)		-
Lease exit costs		-			(149	)		(301	)
Consolidated income from operations	$	(16,223	)	$	(595	)	$	14,084
Depreciation and Amortization
Wholesale	$	3,125		$	3,178		$	3,038
Retail		6,578			6,303			6,096
Logistical services		3,777			4,019			4,069
Consolidated	$	13,480		$	13,500		$	13,203
Capital Expenditures
Wholesale	$	2,434		$	5,650		$	4,194
Retail		695			8,473			12,769
Logistical services		2,900			3,627			1,338
Consolidated	$	6,029		$	17,750		$	18,301
Identifiable Assets
Wholesale	$	176,243		$	144,392		$	144,209
Retail		169,105			91,997			96,241
Logistical services		57,201			39,377			51,191
Consolidated	$	402,549		$	275,766		$	291,641

A breakdown of wholesale sales by product category for each of the last three fiscal years is provided below:

	2020				2019				2018
Bassett Custom Upholstery	$	128,200	58.0	%	$	152,415	58.4	%	$	141,321	55.2	%
Bassett Leather		21,436	9.7	%		19,220	7.4	%		21,589	8.4	%
Bassett Custom Wood		39,311	17.8	%		46,082	17.6	%		46,074	18.0	%
Bassett Casegoods		32,128	14.5	%		40,920	15.7	%		42,875	16.8	%
Accessories (1)		-	0.0	%		2,468	0.9	%		4,099	1.6	%
Total	$	221,075	100.0	%	$	261,105	100.0	%	$	255,958	100.0	%

(1) Beginning with the third quarter of fiscal 2019, our wholesale segment no longer purchases accessory items for resale to our retail segment or to third party customers such as licensees or independent furniture retailers. Our retail segment and third party customers now source their accessory items directly from the accessory vendors.