DISTRIBUTORS/CO-OPS

Hardware Store All-Stars: Washington, Oregon and Idaho

BY Steph Koyfman

HCN congratulates the 50 hardware store, home center and farm & ranch retailers who made the annual HCN Hardware Store All-Star list.

Now in its third year, HCN’s annual list of high performers recognizes hardware stores — one from each state — that are outstanding in their field. The complete list and analysis can be found in the September issue of HCN. Meanwhile, HCN Daily will work its way across the country with mini profiles, continuing this week with Washington, Oregon and Idaho.

  • Washington: As outlined in "Seven Secrets of the Hardware Store All-Stars," many retailers succeed when they faithfully reflect the needs of their community. Island Do it Best Home Center and Lumber, located on the island of Vashon, features a broad assortment of upscale products tailored to the local waterfront homeowners. Owner Earl Van Buskirk expanded from 30,000 sq. ft. to 7.5 acres since buying the business in 1988 to make sure customers find everything they need on the remote island.
     
  • Oregon: Hardware stores don’t always fall within the purview of "cool," unless you’re talking about Parkrose Hardware in Portland. Recently, It was one of five stores across the entire Ace cooperative to be awarded the title of "Coolest Hardware Store." With a savvily designed website, cotton candy machines for rent and some classic how-to guides and videos, Parkrose meets its community’s needs in style.
     
  • Idaho: There may be more than one D&B Supply scattered across the state of Idaho, but their ratings are consistently good. Specializing in farm and ranch, as well as rodeo equipment and other hard to find products, D&B manages to speak to the heart of its community and stay current (live Chicken Chats on Facebook, anyone?). This is truly a one-stop shop, featuring farm & ranch, clothing, lawn & garden, pet supplies, home decor, automotive, toys and hardware.

Next week, HCN Daily will highlight Nevada, Utah and Arizona honorees. For the full state-by-state list of HCN Hardware Store All Stars, click here.

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Ace continues splash in paint department

BY Ken Clark

Orlando, Fla. — First came a roll out of Clark & Kensington private label paint. Next came a blockbuster deal with Valspar. And now comes the introduction and unveiling of the Paint Studio, the new brand for Ace Hardware’s self-described “Paint Reinvention” program.

It’s all part of Ace Hardware’s efforts to get relevant and make noise in the retail paint arena, said John Surane, senior VP merchandising, marketing and sales.

“We are going to launch the Paint Studio across the nation in May 2014 in a very big way,” Surane told the General Session audience during the Ace Hardware Fall Convention & Exhibits here at the Orange County Convention Center.

“We’re not interested in being a small player, and being less relevant than the other guys,” Surane said.

In the next seven months Ace is hoping to bring the Paint Studio format to some 3,000 stores. 

Market share has moved from about 4% is about 6.4%, “but we’re just getting warmed up.” Grabbing paint business market share becomes more difficult as the co-op moves closer to its goal of 10%.  

With Valspar’s support, the Ace paint team is fueling its paint store makeover with $75 million investment in stores to launch the paint studio. 

Surane said it won’t be easy. “There’s going to be problems and issues, but you have a support team that’s going to help you through those,” he said.

The Paint Studio is branded with a four-sided overhead sign that brands the store within the store as “the Paint Studio” and the tagline “dream in color.”

It also included 8-foot color displays of Clark + Kensington on one side, and Valspar on the other. A center gondola endcap serves up promotional graphics and an optional video screen.

Ace has collected 2,375 completed agreement forms with retailers to start the process toward the store-remodeling program, Surane said.

Ace says it will spend $25 million just in paint in 2014 beginning in May. “I’m pretty sure we’re going to reach a lot of customers,” he said.

 

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Venhuizen’s rule: no standing still

BY Ken Clark

Orlando, Fla. — Ace Hardware CEO John Venhuizen took the stage in Orlando during the co-ops Fall Convention and energetically spelled out reasons for Ace stores to be optimistic. He also declared: We lack the luxury to stand still.

Venhuizen went on to detail some of the major themes emanating from the Oak Brook, Ill.-based hardware co-op, including the idea of investing in its people and its infrastructure.

Venhuizen, who earlier this year succeeded Ray Griffith as Ace CEO, described Ace as a co-op on solid ground while investing in its future.

Wholesale revenues year to date are about $2.4 billion, up 3.2%. More impressive, he said, are the numbers at retail 4.1% same store sales growth. With that momentum, he said the co-op has a chance to stem the nine-consecutive-year declines in transactions. 

The co-ops debt to equity ratio improved dramatically as the co-op reduced external debt by more than a hundred million in the past year. And record-high service levels appear to be rising from fill rates of 97.1% a year ago to 97.3% today.

He also pointed to seven consecutive J.D. Power & Associations awards as signs of customer engagement.

Are things perfect? Far from it, Venhuizen said. "There is a long list of things about which we should be productively paranoid. But on balance, youre company is solid.

Surveying the retail industry shows causes of competitive concern amid consolidation. Venhuizen pointed to two developments on this front. One is the bankruptcy and subsequent purchase of Orchard Supply Hardware by Lowes that brings a 50 billion retailer that owns 72 hardware stores in California. Another is the growth of Nashville-based Central Network Retail Group (CNRG), that went from zero to 44 stores in a little more than two years mostly through acquisition.

Around us each day you can almost feel the changing landscape in our industry, he said.

Against that backdrop, Venhuizen pointed to investments in retail and wholesale. More than $100 million in retail profits has been spent on the co-ops 2020 Vision strategy.

Included in that are investments in the brand. Sales are being boosted by $3 million this year and another $7 million to $10 million next year in national advertising. Ace Rewards and Ace instant savings and Ace Supply Place programs are also being expanded. 

In distribution centers, a project to bring pick to voice technology across the enterprise is in the works, and the co-op is rolling out to distribution centers software to help optimize productivity. 

You either change and grow, or you die, Venhuizen said. Growth is a requirement and growth requires capital.

He added: We are investing today’s assets to secure tomorrow’s future.

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