Paint leads way to Ace Q2 sales
With heavy investment in its Paint Studio and a corresponding media blitz to promote it, wholesale sales at Ace Hardware Corp. jumped double digits in the second quarter, the co-op reported Wednesday morning.
Ace reported wholesale revenues were $1.25 billion, an increase of 14.1% as compared to the prior-year quarter. The co-op said increases were noted in virtually every department, with the paint, electrical, and lawn and garden categories showing the largest increases. The company has remodeled and re-equipped over 3,300 stores as part of the new Paint Studio initiative, which contributed meaningfully to second-quarter wholesale revenues and record retail sales in May.
Based on POS data from the 3,100 Ace retailers who transmit it to headquarters, same-store sales were positive 3.6%. For the first half of 2014, same-store-sales at these stores were up 4.2 percent.
Record revenues, which include sales of corporate-owned stores, increased 13.4% to $1.33 billion. Net income of $66.5 million increased 57.2% from last year.
“Companies our size and age do not grow double digits by accident,” said John Venhuizen, Ace president and CEO. “It’s only through a thousand points of disciplined execution from great people that results like this occur.”
Retail revenues from Ace Retail Holdings (“ARH”) were $79.7 million in the second quarter of 2014. This is an increase of 2.6% from the second quarter of 2013, which resulted from increases across nearly all departments, with lawn and garden and tools showing the largest increases. During the second quarter of 2014, same-store sales at ARH were up 3.5% versus the prior year and are up 5.7% for the first half of 2014.
Ace added 43 new stores and cancelled 44 stores in the second quarter of 2014 for a net decrease in store count of 1. This brought the company’s total global store count to 4,877 at the end of the second quarter of 2014, an increase of 136 stores from the second quarter of 2013.
“It’s a privilege to work with such a dedicated and effective team,” continued Venhuizen. “For 90 years now, we’ve taken a stand for the small, mostly family-run businesses who duke it out every day with many of the biggest, most well-funded companies on Earth. Our exceptional small business owners have once again generated record financial results by consistently delivering award-winning service to their neighbors.”
The company said its debt increased by $91.4 million compared to the second quarter of 2013, the result of factors including the addition of Valspar-branded inventories to all of its Retail Support Centers, and the acquisition of Emery-Waterhouse in the first quarter of 2014.
Investments made by the company since the second quarter of 2013 have also led to an increase in equity of $60.6 million, Ace said.
Do it Best names new divisional manager
Fort Wayne, Indiana-based Do it Best Corp. added Nick Talarico as a divisional manager, effective Aug. 1.
In his new role, Talarico will oversee the hand tools, plumbing, cleaning, housewares and InCom departments within merchandising. He had previously served as the co-op’s manager of internal audit since May 2011.
“This is a strategic move that enables our Merchandising team to benefit from and build on Nick’s previous experience leading our internal audit team,” said Steve Markley, VP of merchandising. “In his prior role, Nick gained valuable Do it Best Corp. leadership and management experience, working closely with all other departments within the co-op. We’re excited to have him bring his unique skill set to our team and lead these growing merchandising departments.”
Talarico joined Do it Best Corp. in 2009, serving as general auditor before his promotion to manager of internal audit two years later. Prior to joining the co-op, he worked for public accounting firm Crowe Horwath, serving a variety of national and international clients, including Do it Best Corp. He earned a Bachelor’s degree from the Krannert School of Management at Purdue University and an MBA from the University of Notre Dame.
“It’s an honor to join the fantastic Merchandising team and get the opportunity to help our member-owners grow their businesses through a broad selection of competitively priced products,” Talarico said. “It’s my belief that my passion for collaboration, along with a drive for continuous improvement and a willingness to listen and learn will combine to make a positive impact on our team and, most importantly, our members.”
The co-op is promoting Betsy Hartman to replace Talarico as manager of internal audit. Hartman started as the co-op’s Internal Auditor in 2011, most recently serving as the assistant credit manager and senior credit analyst in the finance division.
Ace awards ‘cool’ to six of its stores
As is its annual custom (now in its fourth year), Ace Hardware Corporation recognized a new spate of Ace stores in its 2014 "Coolest Hardware Store" awards. Six stores nabbed the title out of 4,850 Ace stores worldwide, named officially during Ace's Platinum Conference held in Las Vegas.
“Being a ‘Coolest Hardware Store’ isn’t just about having a unique building and products," said VP retail operations and new business Kane Calamari. "It’s about meeting the community’s needs in a way that only a small business can, just as the teams at these stores do every day. Congratulations to all of this year’s winners for their commitment to providing a consistently amazing — and cool — shopping experience for their customers and community.”
The winners included Palestine, Texas-based Braly Builders Supply, which makes good use of historic decor from the former Rusk Elementary School that houses the location; Mary's Ace Hardware in New Orleans, which is based in the ever-cool French Quarter and houses a restaurant and kitchen supply section, as well as specialty goods for homeowners in the historic district; and Nutter Hardware in Upper Arlington, Ohio, which is tricked out with a functioning potbelly stove and other vintage hallmarks of a classic general store (such as a willingness to help out in a city-wide emergency).
Grand Rapids, Michigan-based Rylee's Ace Hardware also made the cut, thanks to its unique used ice skates section and its free weekly cooking demonstrations. Steamboat Ace Hardware in Steamboat Springs, Colorado, nabbed a designation for its community involvement and log cabin exterior with two covered patios and a 20-ft. water wheel. Last but not least, Ace honored Steve's Ace Home & Garden in Dubuque, Iowa, which features three greenhouses and a two-acre nursery, as well as a variety of special events, such as Ladies DIY Night, Terrarium Making Class, wine and cheese tastings and canning classes.