The Indomitable Spirit of Mrs. B: Pioneering Nebraska Furniture Mart's Expansion to Austin

Discover the remarkable journey of Nebraska Furniture Mart and the indomitable spirit of Mrs. B, from its humble beginnings to its ambitious expansion into Austin. Learn how this expansion is not just a strategic move for the company, but also a valuable addition to Berkshire Hathaway's investment portfolio, with significant economic and cultural impact. Join us in exploring the blend of tradition and innovation that characterizes NFM's approach to business, and draw inspiration from Mrs. B's extraordinary legacy.

Introduction

In the annals of American entrepreneurship, few stories resonate as profoundly as that of Rose Blumkin, affectionately known as Mrs. B. Her tale is a testament to the indomitable spirit that has long defined the pursuit of the American Dream. This Belarusian immigrant, who arrived on American shores at the age of 23, unable to speak English, would go on to build a retail empire from the ground up ² ↗. In 1937, with a modest $500—earned from selling her own furniture and appliances—Mrs. B founded Nebraska Furniture Mart (NFM), a small but ambitious home furnishing store in Omaha, Nebraska ¹².

From these humble beginnings, NFM burgeoned into a billion-dollar business, generating approximately $1.6 billion in yearly sales, and becoming a North American home furnishing colossus ¹. The store's expansion and success caught the eye of none other than Warren Buffett, leading to its acquisition by Berkshire Hathaway in 1983, a move that would further cement the legacy of Mrs. B and her family's business ¹².

As we turn the pages to the latest chapter in NFM's storied history, we find the company poised to expand into Austin, Texas. This move is not just a continuation of NFM's innovative legacy and expansion strategy; it represents a significant opportunity for Berkshire Hathaway shareholders, showcasing the economic potential and strategic positioning of the company in a burgeoning market ³⁴⁵.

In this article, we will delve into the historical, political, and economic dimensions of NFM's growth, from Mrs. B's initial foray into the furniture business to the upcoming Austin expansion. We will explore the genesis of this iconic brand, its cementation under Berkshire Hathaway's stewardship, and the future that lies ahead for a company that has become synonymous with resilience, quality, and the entrepreneurial spirit.

The Genesis of Nebraska Furniture Mart

In the heart of Omaha, Nebraska, amidst the economic turbulence of the 1930s, Rose Blumkin laid the foundation for what would become one of the largest home furnishing stores in North America. Nebraska Furniture Mart's genesis in 1937 was marked by the audacious spirit of Mrs. B, who, despite facing language barriers and the daunting economic context of the Great Depression, was determined to succeed ¹².

Mrs. B's business model was simple yet revolutionary: undercut the competition and maintain a no-frills approach that focused on volume selling and razor-thin margins. This philosophy resonated with customers and allowed NFM to thrive in a competitive market ¹.

The growth trajectory of NFM is a chronicle of strategic expansion and unwavering commitment to customer service. The company expanded to Iowa in 2000 and Kansas City in 2003, further solidifying its presence in the Midwest ¹. In 1989, Mrs. B opened "Mrs. B’s Clearance and Factory Outlet," a testament to her relentless drive to meet customer needs and adapt to market demands ¹.

Warren Buffett's acquisition of a 90% stake in NFM for about $55 million in 1983 was a pivotal moment in the company's history ². Buffett himself has praised Mrs. B, stating that she would "run rings around" the best corporate executives and business-school graduates in America, a nod to her unparalleled business acumen ².

Event	Year
Nebraska Furniture Mart founded in Omaha	1937
Warren Buffett buys 90% of the company	1983
Mrs. B starts "Mrs. B’s Clearance and Factory Outlet"	1989
Mrs. B dies	1998
Nebraska Furniture Mart opens second location in Clive	2000
Nebraska Furniture Mart opens third store in Kansas City	2003
Nebraska Furniture Mart opens fourth location in Texas	2015

The cultural and economic impact of NFM on the Omaha community cannot be overstated. It has been a local staple, a source of pride, and an embodiment of the entrepreneurial spirit that defines the region ³.

A Legacy Cemented by Berkshire Hathaway

The acquisition of Nebraska Furniture Mart by Berkshire Hathaway not only cemented the legacy of Mrs. B but also brought the company into the fold of one of the most respected conglomerates in the world. The deal, valued at $60 million, was a testament to the value and potential that Warren Buffett saw in NFM and in Mrs. B's extraordinary business savvy ¹².

Buffett's admiration for Mrs. B extended beyond the acquisition. He recognized her as a titan of industry, whose impact on corporate America was profound ². Even after selling the majority interest to Berkshire Hathaway, Mrs. B continued to work at the store until she was 103, demonstrating her unwavering dedication to her life's work ¹. Her competitive spirit shone through when she opened a rival store at the age of 95, which Buffett later bought and merged with the family business ².

The leadership transition to non-family members, with Tony Boldt appointed as president, and the involvement of the fifth generation of the Blumkin family, underscored the adaptability and forward-thinking approach that has characterized NFM throughout its history ³.

Under Berkshire Hathaway's ownership, NFM has enjoyed growth and stability, with strategic store openings and leadership changes that have kept the company at the forefront of the industry ↗. NFM has become an integral part of Berkshire Hathaway's portfolio, contributing significantly to the conglomerate's overall success and showcasing the enduring value of Mrs. B's founding principles.

Here's what Warren Buffett had to share on Nebraska Furniture Mart founder Rose Blumkin in a 2019 interview with CNBC's Becky Quick:

The Economic Impact of NFM's Expansion

Nebraska Furniture Mart's (NFM) planned expansion into Austin, Texas, is not just a strategic business move; it's a significant economic event with far-reaching implications. The expansion includes a 1.2 million-square-foot facility set to open its doors in 2026, promising to be a beacon of economic prosperity for the region ³.

The mixed-use development in Cedar Park, affiliated with NFM, is a testament to the company's innovative approach to growth. This development is expected to include a 250-room hotel, a 30,000-square-foot convention center, and ample retail and warehouse space ⁴. Such a project is set to generate a staggering $435 million in new city tax revenue over its first 25 years, marking a substantial financial windfall for the local economy ⁴.

Let's break down the projected financial impact of this expansion:

Component	Projected Impact
City Tax Revenue	$435 million over 25 years
State Net Benefits	Approximately $1 billion over 25 years
Job Creation	725 jobs in the first year
Capital Investment	$400 million

The strategic choice of Cedar Park as the location for this expansion is no coincidence. With a population of 77,595 in 2020, Cedar Park has been experiencing a surge in economic development, including headquarters relocations and expansions from various companies ⁴. This demographic trend makes it an ideal location for NFM's new venture.

The performance-based development agreement with Cedar Park City Council, coupled with the potential for additional state tax rebates, underscores the symbiotic relationship between NFM and the local government, where both parties stand to benefit significantly ⁴.

However, with great expansion comes great challenges. Finding the right people to uphold the company's values and ensuring that family members who join the business are genuinely interested and not merely fulfilling an obligation, are some of the hurdles that NFM will need to overcome ³. As we look at the economic impact of NFM's expansion, it's crucial to compare and contrast it with other major corporate expansions in the U.S., which often bring a mix of opportunities and challenges to the communities they enter.

The Challenges of Growth and Modernization

The Omaha headquarters of Nebraska Furniture Mart, while a cornerstone of the company's success, faces its own set of challenges. Flood-plain related regulations and the age of the surrounding infrastructure have put a cap on the potential for modernization, with the flood-plain ordinance limiting cumulative improvement investment to 50% of an existing structure’s assessed value ⁵. This presents a significant hurdle for a company that prides itself on innovation and growth.

Despite these limitations, the Omaha headquarters continues to be a major economic contributor, employing more than 2,000 people with a $104 million local payroll and generating substantial tax revenue for both the city and the state ⁵. However, the anticipated new flood plain maps could further restrict improvements to the property, placing an even greater portion of NFM's property in the flood zone ⁵.

In contrast, the Austin expansion offers an opportunity for NFM to build a modern counterpart to the Omaha headquarters, free from the regulatory constraints that have hindered growth. This new facility can serve as a blueprint for modern retail and distribution, incorporating the latest in technology and design.

Maintaining the company's core values and customer service philosophy amidst rapid expansion is paramount. NFM will need to navigate these challenges strategically, possibly drawing on historical parallels of businesses that have successfully managed growth pains and regulatory challenges.

The Future of Nebraska Furniture Mart and Mrs. B's Enduring Legacy

Looking to the future, Nebraska Furniture Mart's expansion in Austin is a stepping stone to potentially broader horizons. With the fifth generation of the Blumkin family taking an interest in the business, NFM is poised to continue its growth trajectory while staying true to the entrepreneurial spirit of its founder, Mrs. B ³.

Mrs. B's legacy is an integral part of NFM's identity. Her tenacity and business acumen have left an indelible mark on the company, guiding its direction even after her passing. As Warren Buffett once praised, Mrs. B could "run rings around" the best corporate executives and business-school graduates in America ². Her influence is evident in the company's bold moves and its adherence to the principles of hard work and customer satisfaction.

The transition to non-family leadership under Tony Boldt and the involvement of family members who are passionate about the business are crucial to maintaining the balance between tradition and innovation ³. The Austin expansion is likely to significantly impact NFM's market share and competitive positioning in the home furnishing industry, setting the stage for future growth.

As NFM looks to the future, it may explore new markets and product lines, drawing on historical growth patterns as a guide. Innovation and adaptation will be key to sustaining the business legacy that Mrs. B established.

The lessons that Berkshire Hathaway shareholders can draw from NFM's story and its expansion plans are manifold. The company's ability to grow while preserving its founding values, to adapt to modern challenges, and to continue to make a significant economic impact are all testaments to the indomitable spirit of Mrs. B that lives on in Nebraska Furniture Mart.

Conclusion

As we reflect on the journey of Nebraska Furniture Mart (NFM) from its humble beginnings to its ambitious expansion into Austin, we are reminded of the indomitable spirit of its founder, Mrs. Rose Blumkin, affectionately known as Mrs. B. Her story is not just one of personal triumph but a testament to the power of vision and perseverance in the American business landscape.

Mrs. B's legacy began with a mere $500 and a relentless work ethic, birthing a retail giant that now generates approximately $1.6 billion in yearly sales ¹². The expansion of NFM under the auspices of Berkshire Hathaway has been a strategic move, not only for the growth of the company but also as a valuable addition to Berkshire's investment portfolio. The upcoming project in Austin is poised to further this trajectory, with a 1.2 million-square-foot facility that underscores NFM's commitment to growth and innovation ³.

The economic and cultural impact of NFM's expansion has been significant. Each new store has brought jobs, revenue, and a boost to local economies, as seen in the projected $435 million in new city tax revenue from the Cedar Park development ⁴. Furthermore, the company's expansion efforts have been met with full support from local communities, recognizing the mutual benefits that NFM brings to the table.

The story of NFM is also a narrative of overcoming challenges. From the limitations faced by the Omaha headquarters due to flood-plain regulations ⁵ to the challenges of maintaining a family-owned ethos in a corporate world, NFM has shown resilience and adaptability. The company's ability to modernize while staying true to its roots is a balancing act that many businesses strive to achieve but few master.

Looking ahead, the Austin project is not just an expansion; it is a continuation of Mrs. B's enduring legacy. It embodies the lessons of her life—a blend of tradition and innovation, of family values and bold business strategies. Mrs. B's story teaches us that with the right mix of grit and wisdom, even the loftiest business goals are attainable.

For shareholders of Berkshire Hathaway, NFM's expansion is a reminder of the broader implications for the future of retail and corporate governance. It illustrates the potential for companies to grow while maintaining their core values and responding to the evolving needs of consumers and communities ↗.

As we anticipate the opening of the new facility in Austin, let us draw inspiration from Mrs. B's remarkable journey. Her impact on the world of retail and her legacy as a trailblazer in business are as relevant today as they were decades ago. The blend of tradition and innovation that characterizes NFM's approach to business serves as a blueprint for success in an ever-changing market.

The story of Nebraska Furniture Mart and Mrs. B is one of extraordinary achievement and unwavering spirit. It is a narrative that continues to unfold, promising new chapters of growth and success. As shareholders and observers, we are not just witnessing a company's expansion; we are part of a legacy that transcends time—a legacy that teaches us the enduring value of hard work, family, and the courage to dream big.

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