Berkshire retail earnings fall, but Star, NFM report gains
April 5, 2010-- Furniture Today,
In his annual letter to shareholders, Berkshire Hathaway Chairman Warren Buffett gives a nod to Nebraska Furniture Mart leaders Irv and Ron Blumkin and Star Furniture CEO Bill Kimbrell for increasing profits last year even as sales declined in a tough economic environment.
In the letter, widely followed by the investment community, Buffett said Berkshire's net worth grew by $21.8 billion last year.
For the fourth quarter, net earnings for the corporate giant rose to $3.06 billion from $117 million for the same period a year ago, with the 2008 quarter reflecting investment and derivatives losses of about $3.5 billion.
For the year, earnings increased 61.3% to $8.06 billion from nearly $5 billion in 2008.
However, net income from the businesses under its manufacturing, service and retailing operations — which includes Berkshire's furniture division — declined 51.2% to $1.1 billion from $2.3 billion in 2008. Revenues in the segment fell 6.7% to $61.7 billion.
Among Berkshire's home furnishing holdings are Omaha, Neb.-based Nebraska Furniture Mart and its Homemakers Furniture division in Iowa; Salt Lake City-based R.C. Willey; Houston-based Star; and Taunton, Mass.-based Jordan's Furniture.
“Almost all of the many and widely diverse operations in this (manufacturing, service and retailing) sector suffered to one degree or another from 2009's severe recession,” Buffett said. One exception was groceries, confections and non-food items distributor McLane.
Nebraska's Blumkins and Star's Kimbrell were named with seven other CEOs as leaders in this sector who managed to increase profits as sales contracted, “always an exceptional managerial achievement,” he said.
The other Berkshire companies whose leaders were noted for their performance were Benjamin Moore (paint), Borsheims (jewelry), H.H. Brown (shoes), CTB (agricultural equipment), Dairy Queen, Pampered Chef (direct sales of kitchen tools), and See's (candy).