Ace Focuses on Advancing Growth at Spring Convention

Ace Hardware executives took some time to reflect on the company’s history in recognition of Ace’s 90th anniversary at the general session of the co-op’s Spring Convention and Exhibits on Monday morning in Houston, but Ace President and CEO John Venhuizen made clear his mission was to keep the co-op constantly looking to the future: “No one is going to talk about the legacy of Ace unless those of us living right now have the courage and the fortitude to continue to advance the ball upfield,” he said. “It’s up to us to keep the flame burning brilliantly for the next 90 years.”

While Ace just announced a set of record-setting fourth-quarter and fiscal 2013 financials last week—the co-op reported same-store sales were up 3.5 percent in the fourth quarter and up 4.3 percent for the year, with 75 percent of retailers surveyed reporting record net profits—the company’s strategy remains focused on growth.

Executives’ Eyes on the Future

Venhuizen pointed to the recent announcement of Ace’s purchase of regional wholesale distributor Emery-Waterhouse for $33 million as an example of how the company is leveraging its infrastructure in the wholesale hardlines distribution sector to pass along financial benefits to Ace retailers. (For more on the Emery-Waterhouse acquisition, click here and here).

“The last decade we sat back idly and let our competitors and enemies grow bigger and stronger in this business. We’re going to stop that,” he said. “The No. 1 best thing we can do for our stores is to get them a lower cost of goods to compete with the behemoths like Home Depot, Lowe’s and Menards.”

From a retail standpoint, Ace is expanding its brand investment in the paint category, with the co-op’s national Paint Studio launch scheduled for May 1 and an aggressive, female-focused ad campaign planned for launch this summer, while continuing to develop its retailer training program, Helpful 101, and business-to-business initiative, Supply Place.

Ace is also focusing efforts on in-store pickup from orders placed online and increasing its investments in e-commerce to keep up with consumers’ online shopping habits. “We’ve got to be thinking hard about the changing customer dynamic. 86 percent of shoppers now are starting their shopping experience online, by their phones or by their tablets,” said John Surane, Ace’s executive vice president of merchandising, marketing and sales. “We’ve got to be better at the core value proposition that we offer those consumers, or we’ll get gobbled up, and all this record-breaking performance will be yesterday’s news.”

Retailers Ready to Grow

Overall, retailers said they liked where the co-op is headed with its new initiatives and were eager to buy now that the housing market is on an upswing and warmer weather is on its way across much of the U.S.

Rich and Kathy Kelly, owners of Ace Hardware and Outdoor Center in Dixon, Ill., said while they’ve had a record-setting year for ice melt so far this winter, they’re more than ready for spring to arrive to see how paint sales in their store will be affected by Ace’s official Paint Studio launch and female-centric ad campaign.

Rich said he’s also interested to see how Ace’s acquisition of Emery-Waterhouse will affect his operation.

“Hopefully it will increase our buying power and be a win-win for everyone,” he said.

Similar to Kelly, Steve Herren, president of Harris Lumber and Hardware Inc. in Big Spring, Texas, said he was optimistic about the possibility of Ace’s increased buying power through the Emery-Waterhouse acquisition.

Unlike the Kellys, however, sales at Herren’s operation haven’t been affected much by winter weather, but they have been climbing due to the recent oil boom in his area. The 8,000-square-foot store is big into lumber, appliances and housewares—all big sellers for the influx of new homeowners in his market.

“With housing going up, we’re getting more and more new DIYer and builder customers all the time,” he said. “We’re always looking for new items to get them what they need.”

The convention runs through Feb. 26 at the George R. Brown Convention Center in Houston.