The "Monster Deal" that Jordan's Furniture concocted last spring would likely have any CFO biting his nails. The Massachusetts-based furniture retailer promised full rebates on any sofa, dining table, bed, or mattress bought between March 7 and April 16, if the Red Sox won the World Series. Guess what happened?
The promotion was a home run with Red Sox Nation, driving some 30,000 qualified purchases. Then the Olde Towne Team delivered the goods, beating the Colorado Rockies in four straight games.
Jordan's, a division of Berkshire Hathaway Inc., could have taken a hit worth at least $15 million. Luckily, a prize-insurance policy covering the losses kept the company — and its CEO, Eliot Tatelman — rooting for the Sox. Jordan's refuses to disclose the cost of the policy or who underwrote it, but it's always nice when your parent company is in the insurance business.
Such policies are typically taken out for sports promotions, such as those tied to a golfer hitting a hole in one. Companies analyze statistics, past wins, and the season's schedule to derive a probability-driven insurance quote, says Robert Hartwig, president of the Insurance Information Institute. And in this case, Jordan's probably had an inkling that the Sox would be contenders. "Given that the Red Sox had won the World Series [in 2004] and the team was relatively good," says Hartwig, "there was certainly a better-than-average risk that they would win the World Series."
As for Jordan's CFO David Stavros, he's not saying who he was rooting for. But he can rest assured that many Sox fans were on the edges of their about-to-be-free sofas.