Berkshire stores earn $106M pretax
By Jay McIntosh -- Furniture Today, March 15, 2004
Omaha, Neb. — Omaha, Neb.— Berkshire Hathaway said its furniture retail group had pretax earnings of $106 million in 2003, although it didn't disclose sales for the group or comparable earnings numbers for previous years.
Among Berkshire's other home furnishings holdings, carpet and rug maker Shaw Inds. had pretax earnings of $436 million, a 2.8% increase from 2002. Berkshire also owns furniture rental company Cort, but doesn't break out its earnings or revenues.
The furniture retail group includes Nebraska Furniture Mart, based in Omaha, Neb.; R.C. Willey, Salt Lake City; Jordan's, Avon, Mass.; and Star Furniture, Houston.
In his annual letter to shareholders, Berkshire Hathaway Chairman Warren Buffett said R.C. Willey and Nebraska Furniture Mart "opened hugely successful stores last year, Willey in Las Vegas and NFM in Kansas City, Kan. Indeed, we believe the Kansas City store is the country's single largest-volume home furnishings store. (Our Omaha operation, while located on a single plot of land, consists of three units.)"
He said the Kansas City store's 25-acre parking lot "has at times overflowed."
While the furniture retailers earned $106 million pretax last year, Berkshire's other retail operations — See's candy and jewelry stores Borsheim's, Helzberg Diamond Shops and Ben Bridge Jewelers — earned $118 million. The retail group's total earnings of $224 million were up 2.3% from 2002, while sales rose 9.9% to $2.3 billion.
Buffett praised Shaw, whose 2003 sales of $4.7 billion were up 7.5% from the previous year.
"Led by Bob Shaw, who built this huge enterprise from a standing start, the company will likely set another earnings record in 2004," Buffett wrote. "In November, Shaw acquired various carpet operations from Dixie Group, which should add about $240 million to sales this year, boosting Shaw's volume to nearly $5 billion."
Despite their significant size in the home furnishings industry, Shaw and the furniture retail and rental operations are small parts of Berkshire, which had total net earnings last year of $8.2 billion on revenues of $63.9 billion. Success with insurance and a broad range of investments carried the company to a 90% increase in earnings over 2002.
