3rd Generation Entrepreneurs: Tatelman Brothers Build Family Business, Sell to Buffett
When Eliot and Barry Tatelman joined their family's retail furniture business, Jordan's, in the early 1970s, they and their father constituted half of the company's workforce. The business had grown little from the single suburban Boston location that their grandfather founded in 1928. But when they sold the business last year to Warren Buffett's Berkshire Hathaway, they had four stores, nearly 1300 employees, $250 million in sales, and sales per square foot of six times the industry average. This third generation of family owner/managers brought marketing and management genius to what had been a rather mundane opportunity to be one's own boss. That's what their father offered them when he encouraged his sons to join the business and that's what he delivered by stepping aside as they did their own thing. The Tatelman brothers' "own thing" was to break the mold. They became pioneers marrying waterbeds to more traditional bedroom suites. Inspired by Disney, they adopted the philosophy of their ad-man older brother, an essential consultant to the business, who maintained "there's no business that's not show business." Their highly creative TV and radio spots have saturated the Boston market for 25 years, and unlike their competitors, never touted price. Their goods are always one low price-no sales events ever. Their marketing genius was backed up by exceptional execution in inventory control, delivery and customer satisfaction. Sales people receive daily report cards based on telephone-solicited customer feedback which includes, among other criteria, how much "fun" the customer had while making the purchase. When Irv Blumkin, second generation CEO of the legendary Nebraska Furniture Mart purchased by Warren Buffett, asked the Tatelman boys if they'd like to meet the wizard of Omaha, they eagerly agreed. They weren't thinking about selling they simply wanted to meet the famous investor. Retail furniture is an area of Buffett's interest, however, with stores owned in Houston and Salt Lake City in addition to Omaha. Despite Barry's and Eliot's great succession experience, they feared the transition to the next generation. Would there be family strife? How could they assure fairness? That fear, combined with the opportunity to partner with Buffett and his organization, proved persuasive. As with other Buffett acquisitions, the Tatelmans will remain in charge and have tremendous freedom. And if their children want to come into the business and, if they are able, run it someday that fits the Berkshire Hathaway model just fine. The change in ownership will be transparent to Jordan's employees and customers. The Tatelman brothers have again disproved that old cliche about shirtsleeves to shirtsleeves in three generations. Entrepreneurial creativity and energy can burst forth in any generation
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