When Berkshire Hathaway opened its newest Nebraska Furniture Mart in The Colony in Dallas, Texas, the goal was to generate an additional $600 million a year for the furniture chain, which already has the highest per-store volume of any furniture retailer in the United States.
Boasting a 1.9 million-square-foot facility, and featuring a 560,000-square-foot showroom, the new Dallas NFM dwarfs even the chains other megastores in Omaha, Nebraska; Kansas City, Kansas; and Des Moines, Iowa.
Now, it looks like Berkshire is meeting its goal.
The newest NFM generated roughly $500 million in revenue last year despite having only been open since March 2015.
According to Berkshire’s 2015 annual report, the new store had an immediate impact.
“Revenues of our home furnishings retailers in 2015 increased $572 million (24%) over 2014, driven by Nebraska Furniture Mart, which opened a new store in March of 2015, and from increases at R.C. Willey and Jordan’s.”
NFM’s Biggest Challenge Isn’t Amazon
Unlike many companies that see Amazon and the internet as the big hurdle these days for brick and mortar retailers, NFM says its biggest hurdle is making customers aware that it sells things besides furniture. After all, the company has furniture in its name. When customers get in the store the discover it has one of the most extensive selections of appliances of any retailer.
Flying in the face of the adage that the era of the mall is dead, with retail migrating more and more to the internet, NFM has crafted a powerful regional draw that takes up lots of actual physical space rather than just cyberspace.
The new Dallas store is part of a 400+ acres, 3.9 million square-feet mix of retail, entertainment, dining and attractions that is going by the name of Grandscape.
In addition to retail, the mixed-use real estate development, which will have a ten year build out, will include a hotel and amphitheater, office space, and ±300 multi-family units.
Also included in the development is a $45 million “boardwalk,” district that abuts an 11-acre manmade lake.
NFM is betting that 18 million visitors will come to Grandscape each year, with 8 million of those visitors hopefully shopping at Nebraska Furniture Mart.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.