Rose Blumkin, widely known as “Mrs. B,” was a Russian-born entrepreneur who founded Nebraska Furniture Mart (NFM) in the basement of her husband’s second-hand clothing shop in 1937. “Sell cheap and tell the truth,” was her motto and she used these principles to grow her basement business into the largest home furnishings store in North America.
In 1983 and at the age of 89, Mrs. B sold 80 percent of NFM to Warren Buffett’s Berkshire Hathaway on a handshake agreement. Standing only 4’10”, she had the harmless facade of a sweet elderly woman. Mr. Buffett assumed the handshake agreement without a non-compete clause would be sufficient considering Mrs. B’s age, but underestimated her tenacious business acumen.
Shortly after acquiring NFM, Mr. Buffett made some changes to the store that Mrs. B did not initially approve of after retiring in 1989. Knowing that the deal had been made through a handshake without a non-compete clause, she decided to open up a rival store across the street called Mrs. B’s Clearance and Factory Outlet. By 1991, it had grown into the third largest carpet outlet in Omaha, prompting Buffet to acquire her spin-off store. This time Mr. Buffet brought the paperwork. Warren Buffett remained a big fan of Mrs. B and found humor in the whole mishap. He recalled doing business with Mrs. B in a letter to his shareholders several years ago. He jokingly wrote,
“I’d rather wrestle grizzlies than compete with Mrs. B and her progeny.”
In a 2013 letter to his shareholders, he wrote a second time about the amount of respect he has for Mrs. B, stating:
“Aspiring business managers should look hard at the plain, but rare, attributes that produced Mrs. B’s incredible success. Students from 40 universities visit me every year, and I have them start the day with a visit to NFM. If they absorb Mrs. B’s lessons, they need none from me.”
Mrs. B passed away in 1998 at the age of 104 and to this day her values remain visible within the company. She was grateful to the country that had given her so much and Nebraska Furniture Mart remains one of the few major retailers that are closed on federal holidays.Watch: A little gem of a 1980s NBC News story about Rose Blumkin.