Ace makes over LBM division

ACE CHANGES Ace has restructured its LBM division, promoted here at the co-op’s 2007 fall market.

Mike Rehmer, merchandising department manager at Ace, called the changes a “restructuring” of the department that improves the relationship between the LBM division and the building materials buying team. Previously, the LBM team concentrated on building material sales on a drop ship basis, while the building products team concentrated on developing Ace warehouse programs for both Ace LBM and Ace Hardware stores.

As a result, Rehmer said, the efforts of the two teams “overlapped during vendor negotiations. Now, under a single buyer and centralized team, drop ship and warehouse (Retail Support Center) programs will be combined.”

Ace hired Pellerito, who is no longer with the company, as a lumber trader in 1989. When Ace spun off its lumber division in 1999 to Builder Marts of America, she continued with Ace in store planning and design. When Ace resumed its LBM efforts with a focused division in 2003, the co-op put Pellerito in charge. In 2006, she had four territory managers in her department.

Two LBM specialists—Jeff McGuire and Beth Stewart—remain with the LBM division, according to McGuire, who pointed to market conditions as one of the reasons for the structural change.

Rehmer said he expects the changes to have a minimal effect on Ace’s LBM store retailers, but some of these retailers expressed concerns about the program.

“They pretty-well gutted it. That’s the way I interpret it,” said Kent Porter of Porters Building Centers, Kearney, Mo., an Ace dealer with seven locations. Porter was one of the original dealer members of the co-op’s Dealer Advisory Council, formed in the mid-1990s to increase Ace’s role as a supplier to pro dealers.

With a large number of its 4,700 dealers owning lumberyards, Porter said Ace “could absolutely dominate in building material distribution, but they just can’t figure it out or don’t want to figure it out,” he told Home Channel News. One specific complaint, he said, was the co-op regularly failed to maintain enough inventory in LBM products such as drywall compound and gun nails—merchandise that could have been bigger sellers for the co-op.

Moynihan Lumber, an Ace dealer with three lumberyard and two hardware store locations, was one of the earliest lumber dealers in New England to join the co-op. Kevin Spicer, Moynihan’s purchasing manager and store manager, described the co-op’s history in LBM as mercurial. “This is not just a one time thing,” he said. “This has cycled up and down a few times. They brought it back slowly over the last four or five years.”

Spicer says the restructuring of Ace’s LBM division hasn’t had a noticeable impact on the dealer’s day-to-day operations.

Moynihan relies more heavily on ENAP, the regional buying group, of which Moynihan was an early member. If Ace offers a better deal, Moynihan takes advantage of it. But, he added: “The ties go to ENAP.”

Regional buying groups, Spicer said, seem to be more responsive to the needs of the local dealers and more in tune with regional buying patterns. “Ace is a big ship,” he said. “It’s sometimes hard to steer that to your favor.”

Still, he pointed out that Ace is very strong in critical areas of Moynihan’s hardware business. “The name carries a lot of weight on the buying side and the customer side,” he said.

George Hooper, owner of W.F. Paulett & Son, in Scottsville, Va., ordered his lumber from Ace for several years. “Ace basically got out of the lumber business [in 1999], and I began to go to other resources,” Hooper said.

Ace’s Rehmer emphasized that LBM-oriented Ace stores are valued members of the co-op. He pointed out that about half of all LBM-oriented Ace stores are Vision 21 stores, meaning the owners have committed to supporting the Ace brand in a high-performance retail location.

“We understand LBM is an important segment for many Ace stores, which is why these stores will continue to see the same support, resources and vendor programs,” Rehmer said. “The only difference is now there is one centralized team in the buying office as opposed to separate teams for LBM and building materials.”

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