Category: Nebraska Furniture Mart

Nebraska Furniture Mart Has Record $9 Million Day

Post author By David Mazor
Post date June 1, 2015

(BRK.A), (BRK.B)

The Berkshire Hathaway annual meeting not only brings lots of people to Omaha, Nebraska, it also brings lots of business to Berkshire’s Nebraska Furniture Mart.

Shareholders receive a special discount during the week of the annual meeting, and Tuesday, April 28, 2015, saw sales at the furniture retailer’s Omaha store top $9 million for the day.

The previous one-day record was $8.2 million set in 2014.

Shareholders are Valuable Customers

Over 40,000 shareholders descend on Omaha the first weekend in May each year, and Nebraska Furniture Mart counts on $20 million in sales during the week of the Berkshire annual meeting. It has likely topped that this year, as Berkshire’s shareholders were coming into town having seen a 27.25% rise in the share price in 2014.

While the $9 million day is a record for the Omaha store, (and probably for any furniture retailer anywhere), it could be threatened by Nebraska Furniture Mart’s new 560,000-square-foot store in Dallas, Texas, which is already drawing huge crowds. Customers are driving from as far as 300 miles away to visit the massive store.

For more info on Nebraska Furniture Mart, read a MazorsEdge Special Report on the new Dallas store.

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.

Tags Nebraska Furniture Mart

5 Things You Probably Didn’t Hear at the Berkshire Hathaway Annual Meeting, Even if You Were There

Post author By David Mazor
Post date May 3, 2015

(BRK.A), (BRK.B)

Here are five things gleaned from the Berkshire Hathaway Annual meeting in Omaha, Nebraska, that you might not have learned, even if you were there.

1. That new DOT tank car standards will lower tank car capacity from 31,800 gallons to 30,300 gallons, but BNSF can maintain capacity by adding three extra cars per train.

2. That Berkshire’s HomeServices Lending is now originating $250 million in mortgages a month.

3. That Nebraska Furniture Mart currently has no plans to follow-up its new mega-store in The Colony, Texas; with new stores in other markets.

4. That Dairy Queen’s overseas growth is bypassing Western Europe to focus on Eastern Europe and other emerging markets.

5. That even with new federal tank car standards coming, Union Tank Car is not making the manufacture of new oil tank cars its biggest priority, because they recognize that new pipelines will get built.

And One Thing You Probably Did Hear

“If other people weren’t so often wrong, we wouldn’t be so rich!”—Charlie Munger.

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Tags Berkshire Hathaway Home Services, BNSF, Charlie Munger, Marmon Group, Nebraska Furniture Mart

Nebraska Furniture Mart Special Report

Special Report: Can Berkshire’s Nebraska Furniture Mart go for $2 billion with Dallas store?

Post author By David Mazor
Post date September 10, 2014

(BRK.A), (BRK.B)

A furniture chain that produces over a billion dollars in annual revenue is a big deal, and it’s an even bigger deal when the chain has only three stores.

This is the case with Berkshire Hathaway’s Nebraska Furniture Mart (NFM), which with only 3 stores located in Omaha, Nebraska; Kansas City, Kansas; and Des Moines, Iowa, generates almost $1.04 billion in annual revenue.

That’s enough business to land NFM on the National retail federation’s “Hot 100” for 2014 despite its limited number of outlets.

The big question is whether NFM can reach $2 billion in annual sales when it opens its fourth store in the spring of 2015 at The Colony of Dallas-Fort Worth, Texas. Dallas-Fort Worth is the 4th largest metropolitan area in the United States.

Bigger is Best

NFM is known for its mega-sized stores, which include its flagship 420,000 square-feet facility in Omaha.

The new Dallas-Fort Worth store will up the ante, boasting a 1.9 million-square-foot facility featuring a 560,000-square-foot showroom that is expected to generate over $600 million in revenue annually.

A New Real Estate Play

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 is crafting a powerful regional draw that takes up lots of actual physical space rather than just cyberspace.

NFM stores have traditionally been stand-alone facilities, but with the new Dallas store NFM is developing 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 facility will include a hotel and amphitheater, office space, and ±300 multi-family units. 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.

Excitement is running high even among the retailers that will be outside of the actual Grandscape footprint, and some are planning to build duplicate stores on either side of the highway to take advantage of Grandscape’s anticipated drawing power.

Average household income in the 12 county area is $57,431 with a total population in North Texas of 6.5 million. In addition, NFM believes it can draw from a huge four-state area with people traveling from as far as 300 miles away.

Revenue Projections

Is $2 billion in annual revenue realistic for four stores? Even four mega-stores? NFM is projecting that sales will grow 7% annually for the first decade with 3% growth thereafter. While 7% annual growth sounds optimistic, it is less than half of NFM’s 15.4% growth in sales in 2014.

Perhaps the bigger question is who says you have to stop at four stores?

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Tags Nebraska Furniture Mart, Special Report