True Value 2008 revenue down 1.4%
True Value posted revenue of $483.5 million for the fourth quarter ending Jan. 3, an increase of 0.9 percent from $479.2 million for the same period in 2007.
The fiscal year included an extra week in the fourth quarter compared to the standard 52-week operating calendar. Excluding the 53rd week, fourth-quarter revenue was down 3.5 percent, or $17.0 million.
Net income for the fourth quarter was $20 million, up 24.2 percent from $16.1 million one year ago. The profit increase was primarily driven by higher product margins. Total year-end debt of $141.2 million increased 11.1 percent from $127.1 million at the end of 2007.
True Value reported revenue of $2.01 billion for the 2008 fiscal year, a decrease of 1.4 percent compared to $2.04 billion for the prior year ending Dec. 29, 2007. Revenue from new stores exceeded lost revenue from terminated stores by $1.9 million.
Comp-store sales were down 2.1 percent for the year; however, excluding the 53rd week, comp-store sales were down 3.3 percent, and revenue was down 2.4 percent or $49.2 million.
The co-op’s 2008 net income was $64.2 million, an increase of 0.6 percent, or $0.4 million, versus $63.8 million one year ago. This included a $3 million first-quarter gain related to a previous arbitration matter. Excluding this gain, net income was down 4.1 percent or $2.6 million.
Lyle Heidemann, True Value’s president and CEO, pointed out that True Value’s comp-store sales outperformed the home improvement industry in 2008 on both a wholesale and retail basis. “During the economic recession, homeowners are doing more repairs and refurbishing their homes in lieu of selling,” he said. “True Value retailers delivered the products, service and inspiration homeowners needed to complete their home projects.”
In Canada, RONA looks ahead cautiously
RONA posted net earnings of C$160.2 million (US$126.9 million) in the fiscal year ended Dec. 28—down 13.5 percent from C$185.1 million (US$146.6 million) in the prior year.
Same-store sales in the company’s corporate and franchise store network declined 4 percent for the year, as total sales increased 2.2 percent to C$4.89 billion (US$3.87 billion).
Highlights of the year included continued expansion of the RONA network, with six new RONA store openings, major renovations of 10 stores, including right Reno-Depot stores in Quebec, recruitment of 31 new independent dealers and completion of more than 160 upgrade and expansion projects in affiliated stores.
RONA president and CEO Robert Dutton pointed to future consolidation in the Canadian market. “The current environment remains highly favorable to ongoing consolidation of our market in Canada, especially through recruitment of independent dealer-owners who want to join a strong brand with a highly promising business development plan,” he said.
Dutton added that the company is being careful to adapt operations and capital spending to the “unusual economic conditions we anticipate in 2009.” The company plans to reduce capital investments 25 percent, or about C$50 million less than in 2008, he said.
Ace to open stores in Libya
Ace Hardware has signed a licensing agreement with Technology Corner, granting rights for development of the Ace brand throughout the country of Libya, the Oak Brook, Ill.-based co-op announced.
Technology Corner, which is owned by a consortium of Libyan businesses, has committed to opening six Ace stores within the next 10 years. The first two stores are set to open in 2009 in the capital city of Tripoli, with additional stores planned for Benghazi City, Misurata and Zwara.
“I hope to bring a new approach to home improvement retailing to Libya in a convenient and effective format,” said Hasan Zayed, director of Technology Corner. “Currently, Libya has no freestanding hardware stores. I feel this is an excellent opportunity, and Libya will benefit greatly from having access to the Ace brand.”
According to Mel Gregory, Ace International regional director, the plan to bring Ace retail locations to Libya has been in the works since a franchise conference in Egypt in November 2007.
“Our mission is to take the caliber of the Ace store we know in the U.S. and continue to extend it to other countries,” Gregory said. “We’ve had a lot of interest in the Mediterranean, so we’re excited to bring Libya into the fold.”
With the addition of the stores in Libya, Ace will have retail locations in more than 60 countries.