Apr 3rd, 2007 by Martin Lee
R.C. Willey Home Furnishings
R.c. Willey Home Furnishings was a business discovered by Irv Blumkin of Nebraska Furniture Mart while he was walking around.
Bill Child, CEO of R.C. Willey took over the company from his father-in-law in 1954 and grew the sales from $250,000 to $257 million in 1995.
The fact of it is that retailing is a tough business. During Warren Buffett’s investment career, he has seen a large number of retailers enjoy terrific growth and high ROE for a while, only to suddenly nosedive into bankruptcy.
This happens more often in retailing than in manufacturing or in the service industry. The reason is because a retailer is easily copied so he has to constantly come up with new ways to attract customers.
And shoppers are always faced with new merchants.
On the other hand, there are kinds of businesses whereby the owner only has to be smart once. By being early in the game, he can coast and still turn out pretty well.
Just how many managers can Warren Buffett handle reporting to him? His answer:
“If I have one person reporting to me and he is a lemon, that’s one too many, and if I have managers like those we now have, the number can be almost unlimited.”