Orlando, Florida — Financing and technology were among the new-and-improved tools that Ace Hardware executives rolled out onto the stage of the Ace Hardware general session here Wednesday morning.
At the same session, the co-op rallied around the morning’s slogan “Building Momentum,” and executives had statistics to back it up.
So far this year, the Oak Brook, Illinois-based co-op says year-to-date revenue is up nearly 15%, same-store sales are up 4.2%, and net income is up more than 50%, the company said.
Ace CEO John Venhuizen kicked off the proceedings with an examination of the ingredients of great companies, including financial superiority, distinctive impact and lasting endurance. He told the assembled retailers: “You can compete and win against the publicly traded big boys, and you can do it for generations.”
The top quartile of current Ace dealers are doing just that, he said, while flashing on the big screen a chart that compared key metrics of Home Depot and Lowe’s (all of their stores) with Ace’s top quartile. Ace’s top retailers fell somewhere between the two giants in sales per square foot, pre-tax net income and return on equity. Ace’s top players surpassed the giants in gross profit per square foot.
Among the new weapons in Ace’s sales arsenal are some back-office and Web tools. A big one is in-store pickup at Acehardware.com. “This is a huge deal for us,” said John Surane, executive VP of Ace. “It’s a tool we must go forward with.”
Stores that have rolled out the buy-online-pick-up-in-store programs say sales are up 40% on average versus 2013, and “retailers are telling us they are seeing new customers they haven’t seen before,” Surane added.
Starting in the first quarter of 2015, retailers supporting in-store pickup will receive 100% profit on all Acehardware.com orders, up from the current level of 70%.
The General Session also saw a video announcement from Bill Guzik, CFO, who explained an expanded store loan program. The program is expected to support Ace’s goal of helping 10% of the store base each year embark on a major store improvement project.
Expanding its store improvement loan program to up to 15$ per square foot, compared with a previous $6 per square foot. Guzik also announced an enhancement of its Ace to Ace acquisition patronage loan program, to help existing Ace dealers buy additional existing Ace stores.
Also during the morning general session, Ace promoted :
- Improvements in the supply chain are bringing reductions in wholesale costs on 5,000 items by Nov. 15;
- The co-op promoted business-to-business sales and the Ace Supply Place format as untapped opportunity for retailers; and
- The co-op plans for seven national paint events, up from four in 2014. It also promised a new look for Ace’s value-oriented Royal paint brand, with a new look coming in 2015.