Ace Hardware clarifies deal with Sears Brands
Speaking to Ace Hardware dealers at the co-op’s 2011 Fall Convention & Exhibits in Denver, Ace’s John Surane clarified Ace’s agreement with Sears regarding Craftsman and exclusivity.
"Our agreement gives Ace the exclusive rights to sell the craftsman brand in the convenience hardware channel until the year 2015," Surane told dealers during the General Session in Denver. He added the deal does not prohibit Sears, which owns the Craftsman brand, from selling to big-box retailers or the mass merchants.
The clarification followed news that Craftsman was being sold at retailers outside of Sears and Ace.
Surane, senior VP consumer marketing, merchandising and paint, described the Craftsman program as one of the most important ingredients to boost business and a clear differentiator for Ace stores.
"Ace has the widest most complete Craftsman offering outside the Sears stores in the market today," he said. "We cannot guarantee or dictate what happens with this or any other national brand in the future. However, what we can do is take full advantage of the exclusivity we enjoy today, and the differentiation that we have today."
Ace Hardware plays offense in Denver
Denver — The air was thick with sports metaphors during Ace Hardware’s General Session of the 2011 Denver Fall Convention & Exhibits.
Ace’s top marketing and merchandising executives mixed retail strategies with quotes from Knute Rockne and Vince Lombardi during a presentation in which they described the top 10 plays for winning at retail. The session even included half-time highlights of power tools and football touchdowns.
One of the top plays for Ace retailers, according to the co-op, is to get on board with Clark + Kensington, Ace’s new entrant in the premium paint category. "Clark + Kensington is the cornerstone to revitalizing our paint business," said Ken Goodgame, Ace’s general merchandise manager. "It’s easy to apply, easy to sell. It’s one of the greatest product launches ever in Ace history."
That statement is based partly on dealer acceptance of Clark + Kensington. So far, 1,500 stores have signed up to participate. The product will have a national launch in March, and the co-op is looking to have more than 2,500 stores participating.
John Surane, senior VP consumer marketing, merchandising and paint, said Craftsman outdoor power equipment and hand and power tools are two other top plays for retailers.
The 1,000 stores up and running with Craftsman hand and power tools have seen category sales increase 14% and gross profit increase 6%, he said.
The relaunch of AceHardware.com in 2012 will be a significant opportunity for Ace retailers, according to the merchants.
Other "top plays," as described by the Ace merchants, include:
• Participating in the five national advertising events planned for 2012;
• Fully integrated line reviews;
• The Ace Rewards Visa, which offers a $100 statement credit for consumers who sign up for the card;
• Live goods and lawn and garden opportunities; and
• Promotion of "own the mile," and the concept that Ace stores are important businesses to the community they serve.
Explaining the "own the mile" play, Jeff Gooding, Ace’s director of consumer marketing, said: "There is a growing movement among consumers to shop local. This [program] sets you apart from the boxes with compelling reasons to shop your store. They don’t have them. You do."
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At Ace Convention, Griffith points to sales momentum
Denver — Ace Hardware stores are showing strong same-store sales, while the distributor’s wholesale sales are running ahead of the budgeted 3% growth, CEO Ray Griffith told dealers.
Speaking Saturday morning at the General Session of the co-op’s 2011 Convention & Exhibits here at the Colorado Convention Center, Griffith said data from about 3,000 Ace stores show a 2.4% comparable-store sales increase over last year. In each of the last four months, the stores showed comp-sales increases of more than 4%.
"These results beat some pretty impressive retailers," Griffith said, pointing to Lowe’s, Wal-Mart, J.C. Penney and Kohls.
Turning to the Oak Brook, Ill.-based co-op’s financial performance, Griffith said wholesale sales year-to-date are running 5% ahead of last year. The co-op showed a 2.1% sales gain in 2010 and budgeted a 3% gain in 2011. The 5% increase is the largest sales increase since 2007.
Recent figures are even more encouraging, he said. September was up 15.5%, and October is trending at 13.3%. "There are many retailers, wholesalers and manufacturers who would love to say they have a 5% increase going in 2011," Griffith said.
The CEO added that the co-op is confident it will exceed its budgeted bottom-line net income goal of $75 million.
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