Bassett Furniture (BSET) is a leading manufacturer, marketer, and retailer of branded home furnishings. Its stores offer custom-order furniture, free in-home design visits, and other services. Besides the retail sector, the firm also operates in wholesale markets and owns Zenith Freight Lines.
No moat around the business at the moment
The company's retail and wholesale markets are extremely competitive, which likely helps to explain why the firm struggles to earn economic profits (where its return on invested capital exceeds its weighted average cost of capital).
Intense competition tends to drive down any returns above a company's cost of capital in the long term, unless it has a strong enough differentiated brand - like Coca-Cola (KO), for instance - or has some kind of unique niche or sustainable competitive advantage.
