Ace rolls out new financing program
Ace Hardware is making moves to further encourage members to build and expand.
Under a new financing program for Ace Hardware store owners announced on Friday, members will now be able to receive up to $200,000 in a dollar-for-dollar equity match loan for opening a new ground-up store or acquiring a competitor’s store.
These loans can be repaid immediately using the owner’s existing Ace Hardware Corporation stock or over time using future non-cash patronage distributions (rather than with cash). Ace store owners are exclusive shareholders of the company, and a percentage of all wholesale goods purchased by a store through the Ace supply chain is returned to the owner each year in a patronage dividend. This amassed stock can be used to repay the loan, allowing Ace stores to leverage the equity of their existing stock to boost their growth.
“With this exciting announcement, Ace Hardware store owners now have even more resources to help them achieve their goals of expanding their businesses,” said Dan Miller, Vice President, Retail Operations and New Business, Ace Hardware Corporation. “In the last three years, new ground up stores at Ace have reported a nearly 99% success rate, and the average store is yielding sales per square foot of $138/ft. in their first year – it’s an exciting time to be growing with Ace.”
The new financing program is available to qualified, existing Ace owners with two or more stores, and all Pinnacle-achieving Ace retailers, both single-store and multi-store owners.
Strasser True Value celebrates 100 years
Kansas City-based Strasser True Value recently celebrated its 100-year anniversary with the biggest sale in its history.
The retailer celebrated 100 years on the occasion of its anniversary this past May 6.
Additionally, Strasser held its 10th annual Tool Sale in April, netting a $100,000 bump in sales over last year. This was the largest Tool Day in the store's experience, owing in part to heavy promotion in local radio, TV and print advertising, with the addition of social media outreach.
“We were thrilled to support Strasser’s 100 year anniversary event," said Brian Barbour, National Account Manager True Value, Milwaukee Tool. "The loyalty Strasser’s has built in the Kansas City market is second-to-none, so it is no wonder they have been able to thrive for so long. Their event is always well attended and has helped us to build a tremendous partnership!”
Co-owner Leroy Andrews and his son Travis made sure to provide a full tool assortment that appealed to its wide array of customers, which span contractors, pro users and DIYers.
"It was such an honor to be a part of such a historic event at Strasser’s True Value," said Chandra Stoupa, National Account Manager True Value, Stanley, Black & Decker. "Travis made this event very special with incredible deals to say thank you to their customers. It is so rare to find the family atmosphere that you find at Strasser’s. I am blown away by the number of customers they know by name. This level of customer service is what got them to 100 years as a retail icon in Kansas City, and no doubt will take them to 200."
Ace gains on income with minimal movement on revenue
Ace Hardware reported a slight increase in revenue during the first quarter, as well as more substantial progress in net income.
Revenue came in at $1.2 billion, up 0.1% from the first quarter of 2016. Net income of $28.3 million was up 8.4% over the year.
Same-store sales were down 0.2% due to decreased customer traffic, reported by the approximately 3,000 Ace retailers who share daily retail sales data.
John Venhuizen, president and CEO of Ace, acknowledged the somewhat lackluster sales performance.
“I’m delighted to report an 8.4% increase in net income, a double digit jump in accrued patronage dividends for our owners and surpassing a global store count of 5,000 stores in the quarter," said Venhuizen. “While revenue improved, our increase fell short of our expectations. And despite the obvious temptation, I’ll resist pinning the blame on the less than favorable weather.”
Retail revenues from Ace Retail Holdings were $52.0 million in the first quarter of 2017, however, up 2.8% from the first quarter of 2016 thanks to the addition of new retail stores. However, same-store-sales decreased 3.0%.
The co-op also added 16 new domestic stores and cancelled 21 for a net decrease of 5 stores during the quarter — a total domestic store count of 4,358. This was still up 56 stores from the first quarter of 2016.