REUTERS/Rick Wilking
- NetJets and Brooks Running, both owned by Warren Buffett’s Berkshire Hathaway, are among the few companies benefiting from the pandemic.
- NetJets, which sells fractional ownership of private jets, has tripled its number of new customers this year, and plans to add at least 40 planes to its fleet annually for the next few years.
- Brooks attracted 1.6 million new runners in the first 10 months of this year, and expects to grow its sales by 27% this year after a record third-quarter performance.
- “We’ve got so much support from Warren and Greg Abel and everyone at Berkshire to build this brand,” Brooks CEO Jim Weber said in a Cheddar interview.
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Warren Buffett’s Berkshire Hathaway has been hit hard by the pandemic, but at least two of its businesses are flying down the track.
The famed investor’s company owns NetJets, which sells fractional ownership in private jets, and Brooks Running, a sportswear retailer. NetJets has seen a spike in demand from wealthy people who want to travel but prefer to avoid busy airports and crowded airplanes during the pandemic.
Meanwhile, Brooks has benefited from surging interest in running while gyms remain closed and outdoor activities restricted during lockdowns.
NetJets expects to bolster its fleet with 30 new aircraft this year, and plans to add at least 40 planes annually over the next few years, Patrick Gallagher, president of Berkshire's business aviation unit, said at a virtual conference last month, according to Forbes.
"We think we have a nice long runway of an increase in new business," he added. Indeed, NetJets has signed up about three times as many new customers this year as it did in 2019, he told Reuters.
Meanwhile, Brooks' revenues soared 39% year-on-year to a record high last quarter, spurring the running-shoe seller to forecast 27% sales growth this year. The brand attracted 1.6 million new runners in the first 10 months of this year, gained more market share than its rivals, and boosted its digital sales to 42% of total sales, up from 35% in 2019.
CEO Jim Weber said the gains might mark the "beginning of a new running boom" in a Cheddar interview this week. He suggested the potential return of events such as the Olympics, marathons, and group runs next year could be a "turbocharger to the growth that we're seeing now."
Weber also emphasized the value of Buffett's backing to his company.
"It's probably a significant competitive advantage for us because we've got so much support from Warren and Greg Abel and everyone at Berkshire to build this brand," he said. Abel is one of Buffett's top lieutenants and the head of Berkshire's non-insurance operations.
"We're playing for the long haul here and it's great to have Berkshire Hathaway's support," Weber added.
Berkshire acquired NetJets for $725 million in cash and stock in 1998. Buffett and his family had enjoyed its planes for years, so the investor invited Rich Santulli, the boss of NetJets' parent company, Executive Jet Aviation, to call him if he ever wanted to sell the business. Santulli took him up on the offer.
Fruit of the Loom, a Berkshire-owned apparel retailer, bought Brooks' former parent company, Russell Athletics, in 2006. Buffett and his team spun off Brooks into an independent subsidiary in 2012. Brooks has taken part in Berkshire's annual meetings for the better part of a decade, selling commemorative shoes and organizing charity runs for attendees.