True Value Q2 revenue up, profit down
Chicago-based True Value Co. has reported revenue of $529.5 million for the second quarter ended July 2, up 0.4% from $527.5 million in the same period a year ago. Net margin totaled $21.8 million, down 16.8% from $26.2 million in the second quarter of 2010.
For the six months of fiscal 2011, True Value reported revenue of $977.3 million, up 2.2% from $956.1 million in the year-ago period. Comp-store sales to core domestic hardware store outlets were down 0.1%. The 2011 year-to-date net margin was $29.8 million, down 13.1% from $34.3 million in the first six months of 2010. Total debt increased $34.8 million to $179.8 million from one year ago.
"I am pleased with our revenue increase for the year, particularly given the poor spring season in April and May, as well as softening consumer confidence," said president and CEO Lyle Heidemann.
True Value cited higher vendor-direct shipments to certain affiliate and international members for its overall revenue increase. However, the company pointed to three factors for its profit decline: True Value absorbed $2.2 million of outbound transportation cost increases, primarily fuel, for its members; inbound freight costs from suppliers were up $1.2 million; and a $1.3 million increase in employee medical expenses.
"In spite of the economy, our retailers are continuing to invest in their stores," Heidemann said. "They have implemented approximately 606,000 sq. ft. of the Destination True Value format so far this year, and with the projects currently scheduled for the last half of the year, we should achieve our goal of implementing 1.25 million sq. ft. for this year."
True Value, which counts approximately 4,600 independent retailers as members of its co-op. It posted annual sales of $1.8 billion in 2010.
New hardware store opens in Malibu
Malibu Hardware and Masonry Supply has held a soft opening and will offer a limited assortment of lumber to residents of this famous beach town, according to a story in the Malibu Patch.
The business, which is planning a grand opening in the fall, is owned by Malibu resident Dave Anawalt. The Anawalt family operates three home and garden centers in the West Los Angeles and Hollywood areas.
"We are selling a little hardware, nursery [items], garden redwood, things to make planters out of, building materials, cement, drywall, masonry [supplies] and ‘a little bit of lumber,’ "Anawalt told the Patch. He said his initial focus would be on masonry supplies because the previous tenant used the property as a masonry yard.
Anawalt originally tried to buy Malibu Lumber when it closed in 2005 but was outbid by a partnership that developed the site into the Malibu Lumber Yard mall.
Handy Hardware’s major milestone
Back in 1961, a group of 13 enterprising hardware retailers pooled together a cool $13,000 to open a warehouse in Houston.
Their goal was to join together in the collective support of the independent hardware store operator. It’s a concept that continues today at Houston-based Handy Hardware Wholesale, which will be celebrating its Golden Anniversary at its Fall Market later this month in San Antonio.
Much has changed. But much has stayed the same.
“Our core mission will be to continue serving the independent hardware store retailers,” said Mickey Schulte, VP purchasing and marketing for Handy. “We’ve learned over the years to service independent-minded dealers. And we’re blessed with a lot of those kind of people in our markets.”
While many of the co-op’s 1,300 or so dealer locations are in rural areas, big cities are part of the mix, too, and Schulte said there’s no reason why the model can’t work anywhere.
“We have territories where we support many rural dealers, but we’re also in two of the largest metroplexes in America — Houston and Dallas.
While the co-op has grown well beyond its Texas roots, it maintains a Southern character and expertise. “We’ve refined our inventory over the years to tack care of some of the unique characteristics of our regions,” Schulte said. “Marine products, hurricane prevention items, these are important to us.” He added. “It doesn’t hurt to have a Southern accent.”
Of course, with the addition of a new distribution center in Meridian, Miss., points East and North are considered fair game. “The key to our growth is our Meridian distribution center, as we move East and gain the ability to grow business efficiently,” Schulte said.
Ten years ago, on the occasion of the co-op’s 40th anniversary, Handy went in search of the original 13, with confusing results. It seems an overlapping entity called Handy Hardware Stores introduces uncertainty. But Houston-area dealers such as Werner Hardware, Martini Hardware and South Park Hardware were among the original founders.
“The special spirit and deep loyalty of Handy members today can be traced directly to these founding fathers,” read the Handy newsletter.
Based on profiles of Handy retailers in this special section, the same can be said today.