By 1967 Warren is running a very unusual investment fund. Rather than following convention by only taking minority stakes in stock market quoted companies he positions the Partnership as the majority shareholder of a broken textile company, Berkshire Hathaway (with an insurance subsidiary to be added soon).
© Mike Hodges
In addition $5m of the partners’ money (about 10% of the fund) has been used to buy an 80% stake in a brand new company called Diversified Retail, and he became Diversified’s CEO.
This organisation borrows an additional $6m and purchases the department store business Hochschild-Kohn in 1966.
Then in early 1967 Warren and the minority shareholders in Diversified Retail agree to expand the retail empire by buying Associated Cotton Shops, a dress shop chain.
The business
Associated Cotton Shops was started in 1931 by Benjamin Rosner (with Leo Simon, who died in the mid-1960s) with a single shop in Chicago using only $3,200.
Thirty-six years later…….
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