Fruit of the Loom

Though the agreement was reached in late 2001, the acquisition was finalized in early 2002. Berkshire purchased the company out of bankruptcy.

Business Model

One of the most recognizable brands in the world, Fruit of the Loom manufactures basic apparel, primarily underwear and t-shirts. Its competitive advantage lies in its low-cost manufacturing and massive brand equity.

Berkshire Acquisition

📈 2002 Performance: The Turnaround

In its first partial year under Berkshire (commencing May 2002), Fruit of the Loom delivered a spectacular turnaround.

• Financial Result: Generated $232 million in pre-tax profit.
• John Holland: Buffett credited the success entirely to CEO John Holland's return. Holland revitalized the company's manufacturing and morale after its bankruptcy.
• Gadsden Success: Buffett highlighted the excellence of the Gadsden facility as a key driver of the company's cost advantage and quality.

Quotes

• "John Holland is a man we know and admire... He has the 'Fruit' in his blood." — 2001 Letter
• "Whatever we paid for the company, it wasn't enough." — 2002 Letter (paraphrased)

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• References: 2001 Letter, 2002 Letter, 2002 Meeting
• Index: index