Bassett Furniture faces higher transport, material costs
Spilman described the cost hikes as "fairly significant," with the company planning to pass the added expenses on to customers in the coming weeks.
Bassett Furniture is contending with higher costs in its supply chain as fuel prices remain elevated due to the Iran war, which has disrupted oil transport through the Strait of Hormuz.
However, at this time, the war's more direct impact on the furniture retailer has been limited to products it imports from India that pass through or near the strait, Spilman told analysts on the call.
"And for us, and we really haven't had a noticeable issue on this, and we haven't seen container prices spike," Spilman said. "I think that's just because of overall tepid demand across our industry and other consumer goods since all this stuff has started. But at the moment, I haven't seen an accessibility issue."
Other industries are also enduring ripple effects from the conflict within their supply chains.
For example, household chemicals maker WD-40 has reported higher supply costs for certain petroleum-based-specialty chemicals due to the geopolitical disruption. Meanwhile, packaging companies have sought out domestic suppliers, amid other tactics, in light of the ongoing conflict.
Bassett Furniture's plans to raise prices to mitigate the disruption parallel its approach to offsetting increased tariff costs over the last year. The company instituted a tariff-related price increase during Q1, following one from July, according to Spilman. The second hike came after the U.S. put in new tariffs on furniture imports in October, but the company delayed the move until Q1 so as not to hike prices twice in such a short time period, Spilman said.
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