Rose Blumkin Oral Interview.

Oral Interview Abstract

ROSE BLUMKIN (103 years old)
Founder of Nebraska Furniture Mart
and Frances Batt (her daughter), Omaha, NE

Interviewer: Interview by Roy Briggs, AFHF
(Abstract by Russell Bienenstock).

Note: The AFHF interview with Rose Blumkin founder of Nebraska Furniture Mart is literally a rags to riches story. A smart, talented and driven individual, Mrs. Blumkin was responsible for the building and survival of Nebraska Furniture Mart, one of the largest and most successful retail home furnishings companies.

The AFHF makes the full text of oral interviews available to serious historians, by appointment only. This summary, made available to our general readership, outlines the topics, people and companies discussed in the interview

SUMMARY

Rose Blumkin, often called Mrs. B, the founder of Nebraska Furniture Mart always remembered what it was like to be poor. Born in 1892 in Shchedrin, Belarus (Russia). Her father was a rabbi/ scholar but the responsibility of supporting eight children fell upon her mother. When she was six years old, Rose had already set her life's goal. She said to her mother, “When I grow up, I am going to get a job. I'm going to earn money. I'm going to go to America. When I go to America, I'm going to make more money, get another job and send for you and the whole family.” That is what she did.
Her husband Isadore Blumkin, who died in 1921, left Russia for the US in 1914 and she followed him three years later, traveling through China, Siberia and Japan.

When she arrived in Seattle, her husband was peddling junk. She told him, “No, I need my family here. I'll go to Omaha to a big town and open up a small business.” I know the business. I was in dry goods. I sell 10 above cost, not 50 and I'll make money to bring them.”

Rose didn't have much formal education, but she did have a talent for commerce, and a nose for opportunity. Her business philosophy was simple, “Tell the truth, sell cheap and don't cheat, don't lie… and don't take kickbacks.”

During the interview, her daughter, Frances Batt noted that, “She started out in the basement selling stuff like, somebody would say, “ I need a work shirt or a fur coat.” Well somebody said, “You know I need a bed. Do you know anyplace where I could buy a bed? Do you know anyplace where I could buy a carpet?” She would say, “I can get it. I can get it for you wholesale.” That's how she really started.”

She sometimes obtained goods to sell in Isadore's store (a pawn shop) with a technique she called “bootlegging”. She had all her relatives purchase loss leaders, for example, Levis that were being sold at below cost as a promotion.

In order to make ends meet, she would sell anything that her customers asked for. She sold everything at near cost.

Mrs. B tells a story of how her husband Isadore sold shotguns for hunting. During the depression when nobody had any money to buy guns, he rented them for $3 a day with a $25 deposit. The first day of this promotion, she recalls, there was a line around the block.

At that time in Omaha, she related, the “big city stores” were selling goods at “50% profit”. Mrs. B rented a “shack” for $15 per month, found a wholesaler (Orchard and Wilhelm) and purchased “rugs, a couple davenports and start to sell. Everybody was getting 50%. I sold for 10%. That made me rich.”

There was huge furniture store in town called Union Outfitting that sold furniture for $1 down and $1 a week. The financing was arranged to return a 200% profit.

Mrs. B. said, “I don't think that's right, when people have no money. First of all, I'm not going to charge them too much profit because I know what it is to be poor.”

The road from poverty to riches wasn't an easy one. She had trouble obtaining credit at first.

In 1937 she and her daughter traveled to the Chicago Furniture Market. Her daughter, Mrs. Batt remembers being packed in like “sardines” in the elevator and seeing hundreds of people in the halls.

The country was just coming out of the depths of the depression and Mrs. B was looking for quality furniture that was “in”, by which she meant furniture that would last, but also met an average person's needs. If furniture looked cheap she would say, “that's no bargain. When we sell to somebody we want it to last forever.”

Since she didn't have any established vendors or credit, so, Mrs. Batt remembers, she would state very honestly, “I don't have any money but if I buy something from you, you give me whatever the terms are. One thing I'll never do is cheat you, or not pay my bill.”

Alexander Smith at Phoenix Furniture was the first supplier to see her potential and sold her $1,000 worth of hard rock maple furniture on credit. The dresser, bed, side rails and night stand grouping cost $39.
She had some trouble selling it, and took out a newspaper ad. Eventually she raised the money, in part by selling the household furniture, and personally brought Mr. Smith a check.

Still she said that at that time, “Nobody wouldn't sell me nothing. I always had to pay in advance for ten years straight. They were rotten. Then, when I start to do business, they come to beg me, I should buy from them.”

But she did get goods, and for example, would sell a refrigerator that cost $90.00 for $95.00 including all expenses, lights, electricity and a dollar for delivery. She said, “A profit is a profit. Don't worry if the profit isn't large.”

This policy didn't earn her the admiration of other local merchants who were unhappy with her price-cutting.

One day a local merchant came to visit. He was about 6'4” and said, “Mrs. B. you can't sell things below the regular fair trade price.” Mrs. B, a diminutive woman said to him, “You get out of my store. This is my business.”

Perhaps thinking of this interaction she said, “The American people are the best in the world. The middle class, not the big shots. I don't have no respect for big shots. They think they own the country.”

In the early days, because she had so little money, she would take out a two or three line classified in the “World Herald” newspaper that read “Buy cheap. Come to Nebraska Furniture Mart.” She also hired local kids to distribute fliers for 5 cents per hour to houses in select neighborhoods.

During tough times she would always find a way to serve her customer... to sell near to cost... extend credit on a handshake and hold merchandise without a deposit.

She worked at building long term customers. For example, when a customer made a substantial purchase such as a bedroom, she might say, “You're renting a new apartment. You bought all of this from me. You are so nice. You came to me to buy. You trust me. I am going to give you a present, a lamp.” That was one of her trademarks.

Nebraska Furniture Mart also had a policy of taking care of legitimate complaints right away. She would tell customers, “don't worry, Mrs. Jones, I'll send out our finisher and we'll finish it. If it's broken we'll take it back and we'll get you another one.” If a woman called and said, “I picked the wrong color, I made a mistake but I hate it,” she would say, “don't cry, bring it back and we'll take care of you.” This idea of providing excellent customer service paid dividends in terms of positive word of mouth advertising and repeat business.

It also helped that people in town knew that she sold cheap and that she would beat any price.

She had a talent for promotion. In 1951 when times were tough, she rented the downtown Omaha City Auditorium to hold a three-day sale. Nebraska Furniture Mart took in $250,000. She also engineered sidewalk sales and garage sales, selling anything she could buy really cheap and turn a profit.

One of her innovations was the warehouse sale. One day she said, “Lets try something different. Things are not good. We've got to sell the inventory. We've got too much inventory.” So, the family and employees went off to the warehouse to get rid of the inventory.

She always knew what her competitors were doing. That was one of her secrets. After work she didn't go for a walk in the park. She would get in a car and shop every competitor. That was the nightly routine.

She said, “You don't rest; you go watch your competitor. Go see what your competitor is doing.” She would also look in the paper to find out what they were selling and what they were charging. Then she would sell it for less.

She also knew how to buy at a discount. If a supplier said they could not sell at a discount, then she would say, “Then, I can't buy from you, I got to have a discount.”

In 1937 the original Nebraska Furniture Mart store was located at 1312 Farnum. In 1940, they moved up the street to 1918 Farnum. Five years later the store moved to 2205 Farnum where NFM achieved big volume increases and was able to provide even bigger bargains.

In 1961 a fire destroyed the store and it was under-insured. NFM should have been closed for a week or month, but Mrs. B. decided to open the next day. They had a fire sale, discounting heavily. There were lines around the corner. Local people were supportive, even paying their invoices in advance to help her out.

In 1975 the Farnum store was hit by a tornado and destroyed, so NFM moved downtown and did even better business because all the people whose homes were affected needed furniture.
In 1981 the downtown store was closed and Nebraska Furniture Mart became a single store operation.

The consolidated store had the advantage of a convenient location and free parking at the door.

In 1983 the operation was sold to Berkshire-Hathaway.

Topics discussed:

Page 1: Upcoming meeting with Warren Buffet of Berkshire-Hathaway.

Page 3: Alludes to charitable endeavors, details of sale to Berkshire-Hathaway and her feelings about that sale and current stock price.

Page 6: Mentions conversation with Alexander Smith.

Page 7: Relationship with Phoenix Furniture and experience of selling the household furniture to pay for inventory.

Page 9: Relationship with Robbie Brown who believed in Mrs. B.

Page 10: Advertising and margins in 1940.

Page 11: City Auditorium promotion.

Page 16: Discusses South Dakota flood, Hurricane Andrew and natural disasters where Mrs. B sent clothes and assistance.

Page 17: Looks at her selling style, bargaining technique.

Page 18-22: Early days in Omaha, deprivation and survival techniques, helping customers.

Page 23: Childhood in Russia.

Page 24: Store locations and details.

Page 25-26: 1961 Fire.

Page 28: Story about Mrs. B discovering fraud in carpet weight.

Page 29: Expanding parking at the downtown location.

Page 30: Anti trust case brought by Mohawk against NFM for discounting ends with ruling in favor of NFM. Judge ends up buying carpet at a discount. Store receives a public relations bonanza.

Page 31-33: Judging character in customers and hiring. Hiring practices including hiring customers, hiring within families. Looks at attitude toward formal education and hiring. Policy about paying family members in the early days.

Page 35-36: Discussion of family members in industry. Louis Blumkin and Irving Blumkin mentioned

Page 38-43: Mrs. B's early life in Russia and travels to USA.

Page 44: People who helped Mrs. B after her arrival in Fort Dodge.

Page 45-46: Discussion of the warehouse sale and “bootlegging”.

Page 47-49: First trip to the Chicago Market

Page 49: Union Outfitting Company, discussion of treating customers with respect.

Page 51: Life in the 1920s, early business practices.

Page 52: Free family labor, vacation policies and her fur coat business.

Page 53: Dealing with customer complaints.

Page 54: Personal business philosophy.

Page 56: Establishment of Rose Blumkin Performing Arts Center, Rose Blumkin Theater.

Page 58: Establishment of the Rose Blumkin Jewish Home.

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