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:

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.
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

📚 Historical Mentions & Citations (1)

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1993 LetterExcerpt Available

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Harold Alfond, who started working in a shoe factory at 25 cents an hour when he was 20, founded Dexter in 1956 with $10,000 of capital. He was joined in 1958 by Peter Lunder, his nephew. The two of them have since built a business that now produces over 7.5 million pairs of shoes annually, most of them made in Maine and the balance in Puerto Rico. As you probably know, the domestic shoe industry is generally thought to be unable to compete with imports from low-wage countries. But someone forgot to tell this to the ingenious managements of Dexter and H. H. Brown and to their skilled labor forces, which together make the U.S. plants of both companies highly competitive against all comers. Frank has known Harold Alfond and Peter Lunder for decades, and shortly after our purchase of H. H. Brown, told me what a wonderful operation they managed. He encouraged us to get together and in due course we made a deal. Frank told Harold and Peter that Berkshire would provide an ideal corporate “home” for Dexter, and that assurance undoubtedly contributed to their decision to join with us.

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