This past Wednesday, Warren Buffett mentioned that he chose to replace the CEO from Benjamin Moore & Co. in order to keep a promise that he made to keep Benjamin Moore paint out of big-box retail stores.
As well while on CNBC’s Squawk Box TV program, Mr. Buffett also declined to comment about the way Tracy Britt, chairwoman of Benjamin Moore, handles the company. Tracy is Warren Buffett’s financial assistant and an executive at Berkshire Hathaway.
Warren Buffett is the CEO and chairman of Berkshire Hathaway based out of Omaha, Nebraska. The investment company owns Benjamin Moore.
Buffett says that he made this commitment, which also included a video, to a group of Benjamin Moore dealers. At the time, they were very nervous that they were going to lose sales to the larger retailers.
He mentioned that he removed Denis Abrams last year as the company CEO because he was about to make an agreement that would have Benjamin Moore selling through a larger retailer.
Bob Merritt, Abrams’ replacement, was a former veteran manager that came from the restaurant industry. Merritt recently left the company this past September for reasons that were undisclosed, and was then replaced by Michael Searles just last week. Michael was a top executive at Stage Stores Inc., a retailer.
Also while on CNBC, Buffett said that he is not able to comment on the reasons why Merritt departed the company. He also chose to decline comments about the critical New York Post article in regards to Britt hiring Bob Merritt.
Warren Buffett did mention that he was an active participant in hiring Searles, who was part of a small group of three potential candidates. Buffett also mentioned that Searles is “doing very well.
It’s unusual for Warren Buffett to make such rapid executive changes, since he is typically the type to rely upon management for the long-term. But he does own over 80+ businesses, and management has changed throughout the years.
Buffett also talked about Benjamin Moore’s performance, saying that the company has performed well while earning $1.5 billion in profit over the last 10 years. Remember, this took place during the housing market crash and the economic downturn. Plus, Hurricane Sandy shut down the Newark, New Jersey paint plant that just reopened recently.
It’s also important to note that the budget debate taking place in Washington did not affect Berkshire Hathaway one bit when it came to buying the beverage dispensing machine business from IMI PLC, based out of Britain, for a total of $1.1 billion.
Buffett and Berkshire Hathaway have agreed to go through with this purchase on behalf of the company subsidiary Marmon Group. The officials that Marmon say that the IMI unit is going to fit in perfectly with the other food related businesses.