Buffett bullish on Reno
By Gary James -- Furniture Today, January 29, 2006
Reno, Nev. — Berkshire Hathaway Chairman Warren Buffett may have been wrong about R.C. Willey's previous expansions in Las Vegas and Boise, Idaho, but when it came to Reno, the billionaire investor jumped on the bandwagon early, he says.
"I think I actually suggested Reno," he said. "This looks to me like an ideal location. You've got a growing, vibrant market that we can serve better than it has been served. When people are shopping for home furnishings, they want lots of variety, good prices and great service. I thought we could bring that to Reno like we have in these other cities."
In a press conference at R.C. Willey's store opening here, Buffett poked fun at the fact he first didn't think the retailer's decision to expand to Boise and then Las Vegas "was a very good idea. But thankfully, (R.C. Willey Chairman) Bill Child thought otherwise. We went to Boise, and that was a huge success. And then Bill said we've got to go to Las Vegas, and he proved me wrong again."
Buffett said he first visited Reno in 1952 on his honeymoon. "At that time, there were only about 10,000 or 12,000 people here. Even I could figure out that this town had a great future. Reno will just get larger in the next five, 10, 20 years."
Nevada, he said, "is a terrific place for business. It's a very business-friendly state. The big thing is you've got people coming in to live here. There's nothing like a growing population to make anybody look good."
Buffett was apprehensive on R.C. Willey's first move outside Utah because "the people in Utah ... understood about the company not being open on Sunday. We thought when we went outside the state that people would say, 'I can go to x, y and z on Sunday instead'."
After all, Buffett added, Sunday is a big day in the furnishings business: "At our other furniture operations, it's the second-biggest day." But the closed-on-Sunday approach worked in Idaho and Las Vegas. "I told Bill ... that maybe we should close on Saturdays too," Buffett quipped.
R.C. Willey remains one of Berkshire Hathaway's star performers, said Buffett, who singled out the company for attention in last year's letter to shareholders. And when the next annual report comes out in a few months, "I'll bet you that (in 2005), R.C. Willey did the best of our furniture operations on a comp-store basis," he said.
Furniture remains a very challenging business, Buffett said. "There's never going to be a huge boom. It's a tough game. (And) people generally aren't opening big stores.... This gives us an opportunity. It's why we're going to Sacramento (with a new store opening in June)."
In addition to the press conference, Buffett also held a two-hour question-and-answer session with students at the University of Nevada, Reno. During that session, he said the U.S. trade deficit is a bigger threat to the U.S. economy than either the federal budget deficit or consumer debt and, if it continues to escalate, could lead to "political turmoil."
That morning, Buffett also announced Berkshire Hathaway's acquisition of Business Wire, a distributor of business-related news releases.
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Buffett bullish on Reno
Jan 30, 2006
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