Harold Alfond

Summary

The founder and driving force behind Dexter Shoe. He started in the shoe business making 25 cents an hour before building Dexter into a domestic shoe manufacturing giant. In 1993, he sold Dexter to Berkshire Hathaway in a stock-swap transaction.

Timeline & Role

• 1934: Begins working in a shoe factory at age 20, earning 25 cents an hour.
• 1956: Founds Dexter Shoe in Dexter, Maine with $10,000 of capital.
• 1958: Partners with nephew Peter Lunder to scale the business, eventually producing 7.5 million pairs annually.
• 1993: Sells Dexter Shoe to Berkshire Hathaway. Alfond insists on being paid in Berkshire stock rather than cash, creating a tax-free exchange and preserving their equity in a broader portfolio. 1993 Letter
• 1993–2001: Continues to run Dexter Shoe post-merger. Buffett maintains a strict hands-off policy, writing: "At Berkshire, we do not tell .400 hitters how to swing."

Strategic Importance

Alfond is key to the corporate history of Berkshire for two reasons:

1. Domestic Competitiveness: He and Lunder successfully defied the conventional wisdom that domestic manufacturing was dead, keeping Dexter highly competitive through superior operational management and distributor relationships.
2. The Stock Exchange Precedent: Alfond's insistence on Berkshire stock created a blueprint for private owners looking to solve a reinvestment problem tax-free while continuing to run their businesses as partners. However, this stock-payment structure ultimately made the acquisition Berkshire's most expensive mistake as Dexter's value declined.

🔗 Connections

• Entities: Peter Lunder, Frank Rooney, Dexter Shoe, H. H. Brown Company
• Sources: 1993 Letter