“If you took the Fortune 500 CEOs and I gave you first draft pick on 10 of them – I’d put them in competition with Mrs B. She’d win.”
This is what billionaire investor Warren Buffett told Charlie Rose in a 2006 interview when speaking about Rose Blumkin – aka Mrs B.
Blumkin had no education and spoke no English, yet managed to start a retail empire and inspire a revered businessman like Buffett in the process.
At the age of 23, Belarus-born Mrs B immigrated from Russia to the US in 1917 after managing to talk her way past a border guard.
When she arrived in the US, she had no formal education and did not know a word of English.
However, this did not stop her from starting her own used clothing store.
She learned English from her daughter, who would come home after school and teach her mother all the words she had learned that day.
After 20 years of running a clothing store and using the money to put her daughter through school, she managed to save up $500.
With this money – which would be worth $10,388 today – she realised her dream of opening a used furniture store.
She named it Nebraska Furniture Mart and quickly made a name for herself and her business by offering competitive prices – much to the dismay of bigger retail stores.
It was not done without effort, however. Mrs B, when faced with financial constraints, would sometimes sell the furniture and appliances from her home to pay back creditors.
When the big retailers realised that they could not compete with Mrs B’s prices, they threw lawsuit after lawsuit her way and pressured manufacturers not to sell to her.
Despite their best efforts, Mrs B continued to source and sell products at prices big retailers simply could not compete with. She even sold a rug to one of the judges in a fair trade lawsuit – which she won.
In 1983, Nebraska Furniture Mart generated over $100 million in annual sales out of only one store, giving every furniture store in the US a run for its money.
Mrs B’s motto was “sell cheap, tell the truth, don’t cheat nobody”.
In 1983, this store – and its impressive owner – caught Buffett’s eye. His company Berkshire Hathaway bought a 90% share of the company for $60 million.
“They buy brilliantly, they operate at expense ratios competitors don’t even dream about, and they then pass on to their customers much of the savings,” Buffett told Berkshire Hathaway’s shareholders in a 1983 letter.
“It’s the ideal business – one built upon exceptional value to the customer that, in turn, translates into exceptional economics for its owners.”
Although Mrs B retired shortly after this sale, she was not gone for long.
She returned to the world of business at the age of 96, only three months after retiring. She started a rival furniture store – Mrs B’s Clearance and Factory Outlet – directly across the street from Nebraska Furniture Mart.
Buffett told his shareholders in that letter, “One question I always ask myself in appraising a business is how I would like, assuming I had ample capital and skilled personnel, to compete with it. I’d rather wrestle grizzlies than compete with Mrs B and her progeny.”
It explains why, a year after this new business became profitable in 1991, Berkshire Hathaway also acquired Mrs B’s Clearance and Factory Outlet.
Blumkin continued to be a part of the store’s day-to-day operations for the next seven years until shortly before she passed away at the age of 104.