Dive Brief:
- Bassett Furniture Industries on July 10 identified that a “threat actor” gained unauthorized access to a portion of its IT systems, according to a filing with the U.S. Securities and Exchange Commission.
- The responsible party disrupted business operations by encrypting a portion of the company’s data files.
- Bassett Furniture began taking steps to contain the incident and shut down some of its systems. As a result, the company is currently not operating its manufacturing facilities.
Dive Insight:
Although Bassett Furniture stores and its e-commerce operations are open, the company’s ability to fulfill orders has been impacted by the attack.
Upon detecting the breach, the retailer began taking steps to contain the incident and launched an investigation. As part of an incident response plan, the company shut down some of its systems, including its manufacturing facilities.
The company doesn’t believe customers’ personal information was impacted, however the full scope of the incident is still unknown.
“The Company has not yet determined whether the incident is reasonably likely to materially impact the Company’s financial condition or results of operations,” the business wrote in its filing.
Bassett Furniture is working to get impacted systems back online and is identifying means of continuing offline operations to mitigate disruptions.
On the same day the company identified the cyber incident, it reported its Q2 earnings. For the quarter, revenues decreased 17% year over year to $83.4 million. The furniture company reported an operating loss of $8.5 million, compared to an operating profit of $2.5 million in the year-ago quarter.
The company also revealed that it is embarking on a restructuring strategy.
“While we are going through a down period for the industry, we are setting the table for the inevitable rebound in consumer purchases for the home. This plan is designed to grow our business and to get the most out of our revenue and our working capital to drive profitability,” CEO Rob Spilman said on a call with analysts, according to a Seeking Alpha transcript.
The company further revealed its decision to close its mid-price e-commerce furniture offering, Noa Home, which had operations in the U.S., Canada, Singapore and the U.K. The brand will wind down its operations by the end of the fiscal year.
“Despite providing Noa consistently with the working capital that was needed starting in 2022, they were not able to generate sales growth,” Spilman said.
