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DISTRIBUTORS/CO-OPS

Ideas from the Ace show floor

BY HBSDealer Staff

Atlanta — Ace Hardware Corp. has set its sights on expanded sales per square foot across the retail network — from $204 in 2016, to $210 in 2017.

Achieving that goal will require some merchandise experimentation, according to Ace.

“If you think you’re going to increase sales by selling the exact same stuff you sold last year, you’re probably going to fail,” CEO John Venhuizen said.

He was speaking during the general session of the 2017 Ace Hardware Spring Convention and Exhibits, which rolled into Atlanta for three days of buying, networking and setting a course for growth.

About 1,200 exhibitors participated in the March 16-18 event, bringing ideas with a diverse range from trim-a-tree to barbecue sauce.

Above are some highlights captured by guests from HBSDealer.

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Westlake paints a picture of growth

BY HBSDealer Staff

Westlake Ace Hardware announced it is the first hardware retailer to offer the full line of Magnolia Home by Joanna Gaines Premium Interior Paint in its store. Personally crafted by Joanna Gaines, interior designer and nationally recognized home renovation expert from HGTV’s “Fixer Upper,” the line of 150 interior paint colors were designed by the Kilz Brand to help do-it-yourselfers recreate her hallmark “modern farmhouse” style.

The move is part of Westlake's continual effort to find ways to distinguish itself from competitors and big box stores, while providing a compelling shopping experience, according to Westlake CEO Tom Knox. “One way we do that is by offering highly localized, unique and stylish products that help our customers in new and exciting ways,” he said.

Along with offering other product lines like Magnolia Home by Joanna Gaines Paint and Stihl power equipment, Knox noted that Westlake places a premium on the quality of staff it employs and the service they provide to customers.

The retailer's growth strategy combines quality products with helpful employees, he said.

“Our customer promise to be the best, most helpful hardware stores on the planet wouldn’t be possible without our knowledgeable and service-oriented associates," he said. "The passion they show for their jobs comes to life every day when they interact with customers, and offer advice and product recommendations. As such, we are always creating ways to engage and develop them to their fullest potential, and create an atmosphere that’s attractive to future associates."

Westlake Ace Hardware, the largest member of the Ace Hardware co-op, has added 13 stores since 2015, bringing their total number of stores to 98 in Iowa, Kansas, Missouri, Nebraska, North Carolina, Oklahoma, Texas and New Mexico. According to Knox, that kind of consistent growth will likely continue in the coming years.

“To fuel the expansion of our national footprint, we will continue to pursue acquisitions and organic growth plans that make sense for our customers and business," Knox said.

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Ace draws up battle plans

BY Ken Clark

Atlanta — The military metaphors flew like bullets on a battlefield here at Ace's Spring Convention general session.

Weapons, enemies, battle plans, blitzkriegs — even a cross-section illustration of the WWII French Maginot Line — all served as symbols of the challenges facing hardware stores in 2017.

Marshaling all of these concepts, CEO John Venhuizen promoted sound business (and military) strategies — know the enemy, find their weakness and attack them relentlessly.

He also tackled service, convenience, and quality — "these are the three battles we've got to win," Venhuizen exhorted.

While sounding the alarm to rally its troops, the co-op also celebrated its financial strength. Ace Chairman Jim Ackroyd pointed to running success stories, including four consecutive years of increased customer transactions, seven consecutive years of increased same-store sales, and five years in a row of net new store growth.

He added that 2016 produced the co-op's strongest balance sheet yet, while the co-op's warehouse dividend grew to 5.18.

Meanwhile, the retail battle rages on. Diving into military history, Venhuizen described the failed French Maginot Line defensive fortification from WWII as a classic example of "fighting the last war," and he encouraged dealers to prepare for new threats — most prominently, Amazon.com.

In the Ace military analogy, Amazon plays the role of the blitzkrieg lightning attack.

"Folks, this is quite arguably the single most disruptive business in retail history," Venhuizen said, explaining that almost half of everything bought online is bought from Amazon.

Amazon's biggest weakness, he said, is they don't have local owners embedded in the communities they serve.

"Amazon doesn't have 5,000 stores," he added. "It would be a big mistake if we didn't exploit that. We've got to win the battle of convenience, and it's under attack."

Venhuizen pointed to recent success in the grill category, where promotions, strong selection of leading brands and an assembly-and-delivery program combined to boost grill sales significantly. The result of focus on quality and convenience is two consecutive years of stealing market share in this important category.

Venhuizen encouraged new store openings. "We need more stores with great owners," he said, adding that 98.5% of new stores are working and growing. The co-op's new Ace-to-Ace acquisition program allows dealers to tap into their capital stock to facilitate acquisitions.

And in a message designed to promote the independent hardware store as the channel through which vendor partners can build their quality reputations, Venhuizen described the big boxes and Amazon.com as “places that premium brands go to die."

Executive VP John Surane added his own advice: "Retail is as hard as it has ever been, and we realize how many fronts you're trying to battle on. My wish is that we make the next three days in Atlanta famous for something. Put a stake in the ground."

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