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Warren Buffett Borsheim’s Investment

Warren Buffett Borsheim’s Investment. Why Warren Buffett bought Borsheim’s, a reputable jeweler based in Omaha. This again showed the large variety of businesses Warren Buffett is interested in. Borsheim’s has now become one of the must-go destinations for visitors to Omaha, especially during the annual Berkshire Weekend in May.

Buffett bought an 80% interest in Borsheim’s Jewelry in 1989. This Omaha-based jewelry retailer belonged to the Friedman family. It sold fine jewelry and had a strong reputation as one of the top jewelers in America. A lean operation run by CEO Susan Jacques, Borsheim’s is a quality jeweler with a sterling reputation in the business.

Borsheim’s Competitive Advantage

There was much that Buffett liked in Borsheim’s:

First, it had rapid inventory turnover, in part due to its large variety of merchandise and in part due to its competitive pricing.

Second, it had extremely low operating expenses. This was because it was a shrewd buyer, able to purchase in large volumes; it was also exceptionally well-run with high operating efficiency. This meant that Borsheim’s gross margins could be maintained at a highly competitive level while delivering prices far below those of its competitors.

Third, it had extremely good customer service. It offered personalized, friendly customer service with family members available at all times. This significantly enhanced the customer experience and allowed Borsheim’s to generate a loyal following of customers.

Fourth, it had top management that paid careful attention to detail. Top managers were always in the store every day and made sure that store operations were run exceedingly well.

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