Finance History | Jordan's Furniture, 13 November 1999 — Berkshire Added New England's Largest Furniture Retailer

On 13 November 1999, Berkshire Hathaway acquired Jordan's Furniture, then the largest furniture retailer in Massachusetts and New Hampshire. Berkshire purchased the company's assets for cash, bringing a regional operator into the home-furnishings group that already included Nebraska Furniture Mart and R.C. Willey. An asset purchase mattered because the transaction's goodwill could be amortized for tax purposes over 15 years under the rules described in Berkshire's 1999 shareholder letter. That tax treatment reduced the after-tax cost over time without changing the cash paid to the sellers at closing. Jordan's entered Berkshire's consolidated results for only about the final 45 days of 1999, so the first annual figures captured a small portion of its normal operations. Berkshire reported that home-furnishings revenue increased by US$124 million in 1999 dollars, or 15.6 percent, compared with 1998, with most of the increase attributed to Jordan's. The same group produced US$79 million of operating profit in 1999 dollars, up US$7 million, or 9.7 percent, from the prior year. Those figures showed how an acquisition can affect consolidated revenue immediately even when the parent leaves store operations and merchandising decisions with the acquired managers. Jordan's competed through large stores that combined furniture shopping with entertainment, giving customers reasons to visit physical locations while supporting high sales volumes. The format also carried risks because oversized properties, inventory commitments, delivery operations and discretionary household spending all respond to economic and housing cycles. Berkshire's decentralized model avoided combining Jordan's with its other furniture retailers, preserving the local identity and management practices that had built the business. The photographed Reading store at 50 Walkers Brook Drive is a later operating-site anchor rather than the location of the 1999 closing. Its dining and entertainment space illustrates the distinctive customer experience behind Berkshire's decision to own the regional retailer as a separate business. Photo: Todd Van Hoosear, CC BY-SA 2.0, via Wikimedia Commons.