Billionaire Hirschfeld Uncovers Riches in Nebraska Jeans

Demand for designer bluejeans, skimpy tank tops and other fashion fads has made a billionaire out of a low-key Nebraskan.

Daniel J. Hirschfeld, the 71-year-old chairman of The Buckle Inc., a 443-store retailer based in Kearney, Nebraska, has seen his net worth soar to $1.3 billion, according to the Bloomberg Billionaires Index. The company’s shares reached an all-time high yesterday.

“He really is a very humble man, and I wouldn’t want to say more than that out of respect for his desire to stay low-profile,” Karen Rhoads, Buckle’s chief financial officer, said in a phone interview Tuesday.

Hirschfeld, who serves as an elder in his church, according to the church’s website, and has given millions of dollars to Nebraska schools through anonymous donations, declined to comment.

The Buckle reported first-quarter earnings per share of 78-cents this morning, a one-cent decrease from a year earlier. Same-store sales increased 1.2 percent in the quarter, including a 6.2 percent surge in April, more than double analyst estimates. Shares were down 5.9 percent at 10:21 a.m. in New York.

In a conference call with analysts this morning, Chief Executive Officer Dennis Nelson said sales were hurt by a lack of supply in some women’s denim styles due to a switch of some private label suppliers.

Photographer: Tina Fowble/Daily Ardmoreite/AP Photo

A customer, right, browses through the selection of jeans at The Buckle Inc. store in Mountain View Mall in Ardmore, Oklahoma. The Buckle reported first-quarter earnings per share of 78-cents this morning, a one-cent decrease from a year earlier. Close

A customer, right, browses through the selection of jeans at The Buckle Inc. store in... Read More

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Photographer: Tina Fowble/Daily Ardmoreite/AP Photo

A customer, right, browses through the selection of jeans at The Buckle Inc. store in Mountain View Mall in Ardmore, Oklahoma. The Buckle reported first-quarter earnings per share of 78-cents this morning, a one-cent decrease from a year earlier.

“We believe now we have got that taken care of and we should be close to normal before too long,” Nelson said.

Female shoppers accounted for 60 percent of Buckle sales in the quarter.

‘Right Product’

“If you have the right product in store, for teenagers that’s all that matters,” said Poonam Goyal, sector head of retail research at Bloomberg Industries in Princeton, New Jersey.

The Buckle labels itself in its monthly sales reports as a “denim destination,” and trains its sales staff to suggest items to assemble whole outfits around the jeans. Denim clothing generated more than 46 percent of sales in fiscal 2013, according to the company’s annual report.

GRAPHIC: Bloomberg Visual Data

GRAPHIC: Bloomberg Visual Data

The Buckle operates in 43 states in the U.S., mostly in rural and smaller urban areas. Its closest location to Los Angeles, for instance, is in neighboring San Bernadino County. It has no New York state locations south of Albany.

Brass Buckle

Under Nelson, whom Hirschfeld appointed in 1991, the company has focused on getting new styles into its stores each week, and shifts slow-selling items to locations where they are in stronger demand. For cash-strapped buyers, it offers layaway sales, an option used by about 4 percent of its customers, according to the annual report.

The retailer never holds store-wide sales and invests little in marketing. It spent $10.2 million last year on advertising, in-store displays and the company’s website, about 0.9 percent of annual sales. Pittsburgh-based American Eagle Outfitters Inc (AEO). spent about 2.5 percent of its 2012 sales on advertising alone, according to the company’s annual report.

Hirschfeld owns about a third of the company’s shares outstanding. He has sold more than $165 million of Buckle stock since 2005 and has collected more than $300 million in dividends, according to data compiled by Bloomberg.

The billionaire took over his father’s apparel store in Kearney, a town about 180 miles west of Omaha in 1965. Two years later, he bought a second location and named it Brass Buckle. Hirschfeld concentrated on denim clothing, renamed the shops The Buckle, and expanded the chain to about 100 Midwest locations by the time he stepped down as chief executive officer in 1991.

Anonymous Giving

The company held its initial public offering in May 1992. Since that time, Hirschfeld has allowed Nelson to occupy the spotlight.

“He probably hasn’t spoken to investors since the roadshow for the IPO,” said Rhoads, Buckle’s CFO.

Hirschfeld, who lives in Kearney, also takes a low-profile approach to his charitable giving. Over the past decade, he and his wife, Trudy, have given $3 million to York College, $4 million to the University of Nebraska Foundation and $3 million to Faith Christian School, an elementary school, according to the tax returns of their Hirschfeld Family Foundation filed with the U.S. Internal Revenue Service.

Tim Bruner, assistant to the president at York College, a Christian liberal arts college in York, Nebraska, said Hirschfeld asked that the gifts be anonymous. The University of Nebraska Foundation hasn’t issued any press releases about the billionaire’s gifts and declined to discuss his donations, said Dorothy Endacott, a school spokesman. A Faith Christian School official didn’t return calls for comment.

The couple’s foundation held more than $145 million in assets as of Aug. 31, 2011, the end of its latest disclosed fiscal year. More than half of the foundation’s assets consist of Buckle stock.

To contact the reporters on this story: Brendan Coffey in Boston at bcoffey10@bloomberg.net; Zohair Siraj in New York at zsiraj1@bloomberg.net

To contact the editor responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net

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