Tuesday, August 22, 2006

An American Legend...Off topic but I love her story

An American legend, Rose Blumkin (Mrs. B), knew early in life that honesty and integrity would serve her well. Those beliefs laid the foundation for Nebraska Furniture Mart's rise to its status as a Midwestern retailing legend.

Born outside of Minsk, Russia, in 1893, Rose Gorelick followed her husband, Isadore Blumkin to America in 1917 to take on the American dream. By 1922, the young couple had scraped together enough money to have her family flee Russia and join them in America. In addition to raising their four children, Mrs. B helped with her husband's business ventures, including a second-hand clothing shop. Finding deals on men's suits and accessories, she printed 10,000 circulars that offered to outfit a man from head to toe for five dollars - an amazingly fair deal for the times. It worked nicely, and she made a respectable profit.

In 1937, the Nebraska Furniture Mart was founded in the basement of her husband's shop. Her belief in selling at tiny margins created rough going early on with the manufacturers boycotting Mrs. B at the urging of local competition, who generally operated on higher markups. Traveling by train to Kansas City, Chicago and New York, she became a proficient furniture bargain hunter by buying from large furniture stores at 5% over their cost, and still making a profit using her low markup sales strategy. Still, battling reluctant suppliers and a depressed Korean War economy in 1951, Mrs. B filled Omaha's City Auditorium with the store's inventory for an all-out, three-day sale. In three chaotic days, she took in $250,000 and eliminated her debt forever.The growing success led to moves to various downtown locations, and the flagship store at 2205 Farnam eventually expanded to 120,000 square feet and operated in tandem with the present 72nd street location from 1970 to 1980. Joining his mother in the business in post-war 1946, son Louie contributed immeasurably to the growth and success of the business.

A devastating tornado in 1975 caused only a minor blip on the business record of the business. With millions of dollars in damage to the 72nd street store, Mrs. B and her son simply rebuilt bigger and better. Impressed with the success, business savvy and honest dealings of the Blumkins, investor Warren Buffett and Mrs. B used a simple handshake to seal the purchase of 90% of the business for Buffett's Berkshire Hathaway portfolio in 1983. The 'Historic Omaha Handshake' plus a simple two-page written agreement were all that were required - no audit of the store's books, no inventory of its merchandise. Daily dealings with her customers over the years, long work days and later in life, her motorized cart buzzing around her store, she was always bringing a smile to a customer'sface with a great deal.Throughout the years Mrs. B supported many causes and various community events, many times behind the scenes. The most notable is the Rose Blumkin Jewish Home and the renovation of the Astro theater into 'The Rose', - the Rose Blumkin Performing Arts Center - the home of the Emmy Gifford Children's Theater.Until her death in 1998 at 104, Rose Blumkin rode the crest of a simple business tenet: "Sell cheap and tell the truth." The store, now under the leadership of her son Louie, and three grandsons, still adheres to this advice as Mrs. B's philosophy continues to help them meet each new challenge.--Off topic but I love this woman's story and wanted to share it with you.


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