HARDWARE STORES

In Atlanta, Ace is the place for change

BY HBSDEALER Staff

By Bill Addison

ATLANTA

The 2009 Ace Hardware Fall Convention & Exhibits kicked off yesterday morning with a general session, which focused on the many changes about to happen at Ace.

The session started with Dave Ziegler, chairman of Ace’s board of directors who told a room of more than 2,000 members and vendors alike that the folks at Ace are prepared to make changes.

“This is a time of great change for all of us; a changing economy, changing consumer behaviors and a changing competitive landscape,” said Ziegler. “Powerful actions are necessary for any thriving organization, and now is time to take a hard look at how and why we do things here at Ace and see where we can all improve and simplify.”

John Surane, VP merchandising, advertising and marketing, highlighted the need for doing things differently and set the stage for the changes to come.

“Just because we did it one way yesterday doesn’t mean it’s the right thing to do today, and it’s certainly no excuse to continue on that way. We have to challenge it. The market, the business, the way consumers shop — how they shop, what they buy — will continue to change and we have to change with it.”

This idea applied to the convention itself, which touted the tag line “Anything But Conventional.”

On the show floor, Surane pointed to buyers’ booths in the center of the departments, no longer on the end of the aisles, as well as new products being moved to the center of the showroom floor. He also pointed to a new feature to help showcase new products, Innovation Theater — a stage where vendors bring products for a show and tell.

“This is all about putting the experts in front of you with their newest greatest products and demonstrating them live for you,” said Surane. More significant were the changes in Ace’s strategic planning and new marketing campaigns.

“First we’re going teach consumers how and when to use Ace,” said Brian Wiborg, director of consumer marketing. “We’ll differentiate Ace from the big boxes not by owning certain customers, but by owning certain occasions. We’re going to reestablish our rightful role by breaking the convention of home improvement. And finally, we will restore the pride in taking care of your home and not chase after the type of business that’s being slaughtered in this recession.”

That strategy puts the focus squarely on home maintenance and repair. Wiborg said that the company needs to break the home improvement mindset that places Ace in the same group with Home Depot and Lowe’s. Instead, the co-op hopes to establish the mindset that Ace is the place to take care of your home.

The key to this will be in Ace’s new marketing campaign set to launch this spring. The tagline will remain “Ace the helpful place” and the mantra will be “Get In, Get Help, Get on with your life.”

One of the categories Ace is prepared to take the big boxes head on with, however, was paint. Surane said that the company’s current 4% of the paint market share was not enough. He set an ambitious goal of doubling that market share to 8% by 2012. His confidence is based in part on the company’s launch of a new paint line called Essence, which Ace will be offering its customers at a lower price point. He said the company has also relabeled and rebranded its Royal line, to give it a more attractive professional look.

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Stanley’s Q3: struggling but stabilizing

BY HBSDEALER Staff

Net sales at New Britain, Conn.-based Stanley Works declined 16.3% to $935.5 million in the third quarter.

The company posted net earnings from continuing operations of $62.1 million, down 19.8% from the same quarter last year.

Stanley Works — the iconic brand that describes itself as a diversified worldwide supplier of tools and engineered solutions for professional, industrial, construction and do-it-yourself use — said its consumer do-it-yourself (CDIY) segment experienced stabilizing sales trends during the quarter in almost every region across the globe. CDIY showed a 23% sales decline compared with the same quarter last year, and an 11% profit decline.

The company’s other segments — security and industrial — fared better and worse, respectively. Security achieved 3% sales growth and 13% profit growth compared with the prior-year quarter; and industrial was down 31% in sales and 53% in profits.

On the positive side of the ledger, SWK reported a record gross margin rate of 41.3% in the quarter. And the company’s integration with Bostitch is exceeding its internal expectations, it said.

The company also raised its 2209 earnings forecast to the range of $2.84 to $2.94 per share, up from a previous forecast of $2.34 to $2.84.

“We are encouraged by the second consecutive quarter of record gross margins despite the market-driven volume headwinds we experienced through September,” said John Lundgren, chairman and CEO. “Our ongoing success in tailoring our product and service offerings to best fit our customers’ needs is producing market share gains within a majority of our businesses while positioning us to take full advantage of the mild stabilization we are experiencing in select end markets.”

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Around the Web: Community rallies to save Montana hardware store

BY HBSDEALER Staff

In an article by the Billings Gazette, Melstone, Mont., residents, anxious over the fate of local hardware store Lazy JC Drug and Hardware, are attempting to create a cooperative to purchase the store and keep it running in the event that current owner Anne Coles, 60, decides to retire.

The residents will need to raise approximately $500,000 to purchase the store and its inventory. They are selling shares to Montana residents for $250 or preferred shares for $2,500.

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