Dealing with pain, looking for growth
Orlando, Fla. — Record attendance, international growth and an overhaul of Vision 21 were just some of the topics covered during the morning merchandising and consumer marketing presentation at the 2010 Ace Fall Convention Oct. 28.
The event, held at the Orange County Convention Center, saw an increase of more than 600 members in attendance over the 2009 Fall Convention, the company said. Total attendance, including vendors and dealers, approximated 14,000.
One of the major agenda items at the morning presentation was the co-op management’s update on the recently implemented SAP supply chain system; a process John Surane, VP merchandising, advertising and marketing, equated to a traffic jam through road construction. He had a simple message to those retailers who were struggling through the implementation. “We have to make the pain worth it,” he said. “At the end of the day, that roadway is going to open up. They’re going to remove the cones, and the flags are going to get out of our way, and you are going to have a wider road with a fresh blacktop.”
The new system went live at the end of September, and the co-op has been working out the kinks in the system over the past month.
“Nobody expected this to roll out perfectly,” said David Ziegler, Ace chairman and retailer with Ziegler’s Ace Hardware in the Chicago area. “But we all know there have been many issues that are continuing to affect each one of us. As we meet here today, many of those issues have been resolved, and the lingering ones are being addressed on a daily basis."
Ray Griffith, president and CEO, told members that despite the hiccups, the new supply chain system is going to enhance the functionality of the Ace supply change, with the ultimate goal of making it easier for retailers to do business with Ace.
Griffith is also looking for more dealers to do business with Ace, particularly on the international front. The co-op is making structural changes to help it realize its international goals.
“We feel confident that our international division has ample opportunity to grow. Despite stagnant growth from the United States, it’s a good time to move into the international arena,” he said.
With a presence in 60 countries — including its first location in Jordan, announced recently — Ace’s international division will be restructured into a separate entity. Griffith said international members will convert their existing Ace stock into equity in the Ace International Holdings company, in which Ace will hold a majority stake. Formation of the new Ace International will be completed Jan. 1 and will have its own management team and board of directors.
According to Griffith, expanding internationally will increase purchasing scale, enhanced global brand building, improve sourcing opportunities through greater import scale and thus reducing the cost of goods.
Another upcoming overhaul in the Ace lineup was the change of Vision 21 to Platinum Performance Retailing.
Kane Calamari, VP retail operations said the new Platinum program will stay true to the original Vision 21 values of achieving higher customer satisfaction and increased transaction size, higher levels of retail support and reliable in-stock positions of products that the customers want delivered when they need them.
The co-op said it will remove the financial incentives for achieving Platinum status, as well as focus on improving the store model, driving top-line sales and profits, strengthening the Ace brand and providing direction and establish clear differentiation from competition.
Calamari said Platinum retailers with especially strong retail performance will be upgraded to five-star status.
Do it Best emphasizes positive financial metrics
In a statement released today, the co-op pointed to gross sales of $2.38 billion, down 3.1% from a year ago. Sales were down 10.8% in the first half of the fiscal year, but were buoyed by a 5.8% increase in the second half.
Gross sales per employee at Do it Best Corp. remained at an industry high of $1.76 million, twice that of its nearest competitor, according to the co-op.
President and CEO Bob Taylor noted the company maintained strong expense control during the year and continued to benefit from technology innovations such as voice pick, which helped trim warehouse returns and allowances by 11.1%. Meanwhile, outbound freight expenses were reduced by 4.2%, he said.
Do it Best also pointed to continued growth of the industrial/commercial sector. The InCom division at Do it Best Corp. continued to outperform the market and delivered exceptional results, the co-op said. The division added 60 new members and grew sales by 8.4% this past year. The lumber division was also a bright spot, as sales jumped 7.2% for the year.
Fire at Madison, Wis., hardware store
A fire caused $500,000 worth of damage to Hilldale Ace Hardware store in Madison, Wis., according to a City of Madison press release.
The Oct. 17 blaze was first discovered at about 10 p.m. when an alarm for the store on North Midvale Boulevard alerted the fire department.
According to the city: Firefighters “walked through the building and gained access to the warehouse area through a doorway and started to extinguish the flames. The large warehouse garage door was forced open by another fire crew from the outside, in order to help ventilate and assist in extinguishment. Firefighters found a forklift in the warehouse area and sprayed water on the gas tank in order to keep it cool. Black smoke and flames were seen after crews cut a ventilation hole in the roof of the building, but was quickly extinguished. No injuries were reported. Damage is estimated around $500,000. The cause of the fire is under investigation.”