John Venhuizen, Ace Hardware president and CEO, recently took questions from Hardware Retailing about the co-op’s purchase of The Grommet, an e-commerce startup company. Ace announced the purchase Oct. 3.
Hardware Retailing (HR): Why did Ace purchase a majority stake in The Grommet?
John Venhuizen (JV): There are three main reasons why we decided to purchase ownership of The Grommet:
1. Ace retailers will now have even earlier access to up-and-coming companies discovered by The Grommet, some of whom will develop the next big thing.
2. Ace retailers will benefit from greater exposure provided by The Grommet’s marketing assets for innovative products discovered by the Ace product innovation team.
3. Makers, innovators and inventors will have a clear line of sight to sustainable growth through our combined premium quality brands without having to bow down to the altar of Amazon.
HR: What new benefits will Ace be able to offer its retailers because of the purchase?
JV: More innovation, more exclusivity and cool stuff for Ace retailers to share with their local neighbors.
HR: Is buying the company part of Ace’s plans to enhance e-commerce capabilities for retailers?
JV: In addition to our acquisition of The Grommet, we are also investing a substantial amount of capital to relaunch acehardware.com.
Today, retailers already get 100 percent of all gross profit from every sale on acehardware.com–and in April of next year, we will provide further localization so the site feels even more like the neighborhood hardware store for our consumers.
HR: Does Ace have plans to grow The Grommet?
JV: The Grommet has grown significantly this year, and will continue to do so. On the day of the announcement, their online traffic increased 95 percent.
HR: How is the purchase important to Ace’s growth overall?
JV: We continue to believe that our future is largely predicated on our pursuit of amazing customer service and our devotion to high-quality, differentiated and locally relevant products. The acquisition further accelerates this initiative.
HR: How many Ace stores offer products from The Grommet?
JV: We have nearly 300 stores that have a full display of The Grommet products and thousands that carry some of the most successful individual products.
HR: Is Ace looking for other strategic business acquisitions?
JV: At this time, we have nothing to report.