True Value makes gains in 2016
For True Value Company, the proof was in the numbers for its full fiscal year in 2016: namely that its strategic growth plan was bringing in results.
Most notably, the company reported net margin of $23.7 million, up 24.4% year-over-year.
The co-op also reported total gross billings of $2.07 billion for the fiscal year ending Dec. 31, 2016, up 2.0% from 2015. Revenue was $1.51 billion, up 1.1%.
Its Destination True Value (DTV) format stores performed measurably better, with comparable store sales up 3.7%. Total comparable store sales were up 2.5%, with increases occurring in 11 of 12 U.S. regions and 6 out of 9 merchandise categories, led by Farm Ranch Auto & Pet, Lawn & Garden, and Paint.
2016 was also True Value's sixth consecutive year of increased annual sales and third year of sales from new stores exceeding the lost sales from terminated stores.
According to president and CEO John Hartmann, this was evidence that the co-op's strategic growth plan was creating long-term profitability.
“True Value is two years into executing a plan that will serve our retailers’ needs and ensure their long-term growth and profitability, making them relevant for generations to come,” said president and CEO John Hartmann. “We have broken a nearly decade-long trend of negative net new sales growth; for the past three consecutive years, the sales volume from our new stores has exceeded sales from terminated stores. I am proud of our accomplishments in the areas of growth, infrastructure improvements, product assortments and operations.”
Other notable benchmarks for the co-op in 2016: a record 101 remodeled stores and record 68 completed ground-up stores; retrofits of three distribution centers, enabling two-day shipping; average retail sales up 4.7% in the Customized True Blue assortment program; an international sales boost of 14.5%; an 11.6% increase in paint sales; and a $3 million reduction in transportation costs via a fleet transition.
Click here for the full infographic illustrating these results.
We’re looking for All-Star material
In 2011, HBSDealer launched an All-Star idea — recognize a high-performing hardware or building supply dealer in each one of the 50 states.
The trend continues in 2017 with the STIHL Hardware All-Stars awards, to be presented in the May issue of HBSDealer.
To date, HBSDealer has recognized about 300 hardware stores, lumberyards and farm and ranch retailers across the country as All-Stars.
All-Stars contain one or more of the following attributes:
1) High levels of customer service;
2) High performance – growth, sales, profit or any other metric;
3) Deep involvement in the community;
4) Innovative culture;
5) Outstanding merchandising and store design;
6) Willingness to take risks;
7) A passion for philanthropy;
8) Excellence in training;
9) Ability to adapt to trends and society; or
10) Generally, just an all-around all-star retailer
Do any of these qualities describe a store in your neighborhood? We’d love your input.
To nominate a store for recognition in the STIHL Hardware All-Stars awards program, just send a sentence or two about the store to [email protected]. Please include the store’s full name, as well as its city and state.
Check out last year’s All-Star class here.
Sporting goods, anyone?
The list of bankrupt or struggling sporting goods chains is growing.
The parent company of Eastern Mountain Sports filed for Chapter 11 in early February. Shortly after that, reports swirled about a similar possible fate for Gander Mountain. These events follow a year that saw Sports Authority declare bankruptcy and close 300 stores. Also last year, Sport Chalet went out of business.
Given the presence of sporting goods — from coolers to canoes to camping gear and beyond — at all the major hardware buying markets, the struggles of the large sporting goods chains raises a timely question for independent dealers: If Sports Authority can’t compete with Dick’s Sporting Goods and Bass Pro Shop — or Walmart and Amazon for basketballs and bikes — what chance does an independent hardware store have? A pretty good chance, actually, according to distributors who spoke with HBSDealer.
At Fort Wayne, Ind.-based Do it Best Corp., the co-op said it has members who are planning for sporting goods growth in 2017-18, because of opportunities in their markets, and that the current state of retail sporting goods bodes well for independent dealers.
According to Do it Best merchandise manager Shane Burnworth, the merger of Bass Pro and Cabela’s has put a lot of pressure on other large box sporting goods retailers, like Gander Mountain and Sports Authority.
A large retailer leaving a market is a clear positive for an independent. But also, independents have the luxury of dealing in sporting goods as a niche to capture additional sales, as opposed to an all-in, make-or-break effort, he said.
At Hardware Distribution Warehouses, Craig Cowart, president of the Houston division, said he also sees opportunity for independents in sporting goods, and any other niche category underserved by big boxes in a local market.
“We see home improvement retailers successfully catering to local market needs in sporting goods as part of their diversification,” Cowart said. “Most of those that carry the category either work on the edges featuring promotional items to bring in traffic, or try to be the one-stop shop in select categories such as hunting products, camping, collegiate apparel.”
Cowart said he sees many of his customers succeed in gifts, housewares and sporting goods alongside traditional hardware staples.
“Stocking multiple unrelated categories under one roof — it's what makes local retail exciting to shop and profitable to run,” he said.
However, one area of sporting goods that has seen recent year-over-year declines is firearms. Demand appears to have dropped thanks in part to the recent political transition to a president and Congress deemed less likely to legislate restrictions on gun sales.