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Berkshire Hathaway Inc. Message Board

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  • bobo21029 bobo21029 Apr 13, 1999 10:59 AM Flag

    annual meeting 2

    ......this is a very tough business.....at one
    time my old company had 33 factory stores....ended up
    closing them all. In the late 80's and early 90's outlet
    malls were all the rage....it was not uncommon to see
    chartered buses pulling up in the parking lot loaded with
    eager shoppers.........origionally the stores offered a
    chance for manufacturers to dispose of closeouts, but if
    your company is running smoothly, you shouldn't have a
    lot of closeouts.....so you have a problem keeping
    the stores shelves stocked.....we had to ship in
    first run ware in and low-ball the price....when you do
    that, the buyer at Wal-Mart will threaten to throw your
    line out.....so then you might have to make a private
    label run just for him that has a "blind" retail price
    point.....more complications that eat into your factory's
    efficiency....also, you diminish the strength of your brand
    name.....ask Gucci and Laura Ashley what happened to the
    strength of their brand when they went into the outlet
    biz.....and finally the shoppers wised up that a lot of the
    so-called bargins really weren't such bargins after
    all.....from a mall managers point of view, there's a lot of
    store turnover...these "hot" name brands go up and down
    like bottle rockets....remember Bugle Boy?...the
    outlets are still alive but the big,fast profits aren't
    around like they used to be........the beat goes on.....

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    • Would love seeing some dialogue from
      knowledgeable posters concerning chances for inclusion in S&P.
      (Also, does anyone have an opinion on whether inclusion,
      at this point, is desirable, and would Buffett
      considerate it to be?)>>>thanks

      • 1 Reply to gogoGurrrl
      • if you plan to sell in the next couple of years,
        inclusion is preferable because it is likely to spike the
        stock. Buffett has said that inclusion is likely to be
        "inevitable" but, of course, no one knows when. He is
        indifferent to the addition to the S&P. It may require more
        conversions of A's to B's to ensure enough liquidity in one
        of the classes. The current wide divergence in the 2
        share class prices could cause this.

 
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