(BRK.A), (BRK.B)
These days when a company lasts a decade everyone pops champagne, but for Berkshire Hathaway’s Nebraska Furniture Mart this August marks the 80th anniversary of the company’s founding in 1937.
Founded in Omaha by Rose Blumkin (affectionately known as Mrs. B.) the company started in the basement of her husband’s pawn shop with $500 borrowed from relatives.
Mrs. B., despite being only 4 feet 10 inches tall, was legendary for her toughness and work ethic.
Her escape from Russian persecution at the dawn of WWI, when as a passport-less, 23-year-old, store clerk from Minsk she crossed the Chinese-Siberian border by promising the guard she would bring back a bottle of fruit brandy, and her six-week voyage on a peanut boat could in itself be a movie.
Unable to speak English, and as an immigrant unable to get a bank loan, she prided herself as over the years she toppled Omaha’s “Big boys.”
As NFM grew to dominate the Omaha furniture market, Warren Buffett took notice and in 1983 Berkshire Hathaway bought the store for $60 million without even doing any formal due diligence. It didn’t stop Mrs. B. from working seven days a week, and she continued to oversee the store until age 103.
Along with NFM, Berkshire owns three other furniture retailers, including Jordan’s Furniture, R. C. Willey Home Furnishings, and the Star Furniture Company.
Today, NFM is the largest home furnishing store in North America selling furniture, flooring, appliances and electronics, doing volumes with only four mega-stores that put furniture retailers to shame. Make that every other furniture retailer to shame.
The chain has four stores in Omaha, Kansas City, Des Moines, and Dallas, and a valuation of well over $1 billion.
Day-to-day operations are overseen by Tony Boldt as the president and chief operating officer, with Ron Blumkin and his brother Irv Blumkin as chairman and CEO respectively.
While all the stores are large, none is larger than the store in the Dallas area, which opened its doors in March 2015.
The newest Nebraska Furniture Mart in The Colony in Dallas, Texas, was an immediate success and adds roughly $600 million a year to the furniture chain’s revenues, which already had 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.
The Dallas store is the anchor to Berkshire’s $1.5 billion Grandscape development, the first of its kind for Berkshire. The development is a 400+ acres, 3.9 million square-feet mix of retail, entertainment, dining and attractions that won’t be fully built-out for another decade.
The elaborate Grandscape complex will feature a $45 million boardwalk-themed restaurant district, a hotel and spa, a recently announced 16-screen luxury movie theater, and 1.5 million square feet of residential and office space that is billed as the lifestyle center.
It’s all a long way from Mrs. B.’s basement, and the fact that Grandscape will be another decade before its completed just means that it will be done in time for NFM’s 90th anniversary.
© 2017 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.