In many ways, it is the worst of times at Best Products Inc.

Profits for the nation's largest chain of catalogue showrooms are down sharply -- so much so that the company issued a statement to investors last month, warning that this year's earnings will not reach even half of last year's level of $37 million.

What is more, the company said it expected little improvement in its financial health until the last half of 1985 -- at the earliest.

"Even if sales in November and December are strong, earnings will fall below last year's levels, as we are continuing a major repositioning of the company," Best said. "Many of these changes entail costs in the near term and will not reflect favorably on our financial results until the last half of calendar year 1985 and in 1986."

As gloomy as the short-range forecast is, the company is in the hands of a new management team that confidently predicts a profitable future. "We've got a lot to do to restructure the company," and make it more profitable, Bernard Cohen, the company's new executive vice president, said last week. "It will take time. I don't expect to see results before 1986." But by then, he predicted, "The results will be breathtaking."

The Richmond-based company still is trying to digest its two major 1982 acquisitions -- the $5.4 million purchase of Basco Inc. and the $110 million purchase of Modern Merchandising Inc. The acquisitions of these two catalogue showroom chains nearly doubled Best's size, to make it the nation's 34th-largest retailer.

Best already has disposed of another expansion effort -- a specialized computer store chain called Data Base Co. Inc. Founded two years ago -- just as Best was buying up Basco and Modern Merchandise -- the chain proved a poor fit for Best. It was sold last March to a California chain of computer stores.

In addition to undergoing a major restructuring, the 27-year-old company also is going through a series of major personnel shifts.

Its founder, Sidney Lewis, has retired as the company's chairman and chief executive office. His son, Andrew, who had replaced his father as president eight years ago, has moved upstairs, assuming his father's titles.

Assuming responsibility for the day-to-day operations of the company is a brand new management team. Robert E. R. Huntley, president of Washington and Lee University for 15 years and a Best director until he joined the company as executive vice president in January, has taken over as president. Cohen, former president of Consumers Distributing U.S.A., another catalogue showroom, is executive vice president, overseeing all the company's stores -- including its 204 showrooms in 28 states, its chain of 30 Ashby's discount-clothing stores for women and its 11 Best Jewelry stores.

Together Huntley and Cohen are determined to make Best better.

In the seven months that Huntley and Cohen have been at Best's helm, they have hired a host of new executives, many from other catalogue-showroom companies.

At the same time, they have begun a major reorganization to make the company more centralized and efficient. By ordering goods from one central office instead of several, Best hopes to make better deals with manufacturers and pass those savings on to consumers.

Cohen now has turned his attention to the showrooms themselves, planning to spruce up their looks and update their wares. He plans to cut back some merchandise lines where there is an overassortment of goods, offering 20 types of coffee makers, for example, instead of 40. At the same time, Cohen hopes to expand other lines, such as sporting goods and exercise equipment. Despite their increased popularity among consumers, the company has not expanded those lines significantly in recent years, Cohen said.

"We have really abdicated that business, losing a tremendous profit opportunity," he said.

Financial analysts who have met the fast-talking and enthusiastic Cohen say he is the key to Best's future. Before joining Best, Cohen headed three other unprofitable retailers, including Consumers Distributing and Herman's World of Sporting Goods, and earned a reputation for turning each around.

However, the task will not be easy, noted Michael Mead of the Richmond investment firm Scott & Stringfellow Inc. One reason: Best and other catalogue-showroom companies face increased competition not only from specialty retailers, such as Circuit City, but also from general-merchandise discount stores, such as Bradlee's. Both those retailers offer competitive prices and often a greater variety than Best.

"It is questionable to me whether catalogue showrooms -- which is a concept of the 1960s and 1970s -- can be viable in the mid-80s," Mead said. "When they first got off the ground, it was easy to put items in catalogues and have the prices stand up throughout the year. But the competitive situation has greatly changed, with Best's competititors engaging in very aggressive pricing and advertising through weekly advertisements," Mead said.

Best can respond up to a point with weekly advertisements of its own, he said. For the most part, however, the company must rely on pricing decisions made a year in advance when it plans its catalogue. "That makes it real tough," Mead said.

Cohen, however, discards these doubts quickly. "Some of our showrooms are selling $18 million of merchandise a year. No one is going to tell us no one likes us," he said.

David E. Nelson, an analyst with Legg Mason Wood Walker Inc., agreed. "There's a place for Best. Their customers have been doing business there in spite of the way they are treated, not because of the way they are treated."

Cohen added: "I'm looking at a gold mine where the gold is on the ground. All you have to do is pick it up and put it in your pocket. You don't even have to find it. . . . I've turned around three companies prior to this, and this one is certainly a lot more fixable than some of the others. Every problem we have is fixable."

According to Cohen and financial analysts, one of the company's main problems was its failure to infuse new blood as it grew into a major national chain.

"Best Products has been a very inbred operation," Cohen said. "When I came here, most people had been here 17 years and these people were very young -- 37 to 39 years old."

The president, Andrew Lewis, is 38. "When his father stepped down, he was a natural successor," a company spokesman said.

"The Lewis family was capable and had done a good job," Legg Mason's Nelson said. "But there was a point at which they began to lose control of the business. That was in the late 1970s and early 1980s, when they grew national in scope."

Although Best's revenue totals more than $2 billion a year, "it had the structure of a $400 million business when I came in," Cohen said.

For instance, Best had about six different buying organizations across the country, each leftover from before the acquisitions. No single person was responsible for making deals, representing Best as the $2 billion company it was. As a result, the company failed to realize the deals and substantial savings it could have achieved, Cohen said.

From now on, "all negotiations of every single item in the company will be done in Richmond. The ability to make a much better deal on a national scale is awesome."

Cohen also complained that Best has failed to keep up with the times in its showrooms. "Best's format has been the same as it has been for the last 20 years. I hired one of the finest design firms in the country the day I got to the company."

Together, the two will begin transforming their stores next year.

"When you walk into a supermarket, you have to go through 15 aisles before you get to the bread and other essentials," Cohen said. Cohen will use the same principle in his stores. "To order and pay for merchandise, we will have to walk through all the departments -- especially jewelry and giftware, the company's biggest sellers. That will bring in more multiple purchases and increase everyday sales" -- perhaps as much as 28 percent, Cohen said.