Carter Lumber teams with True Value
The Ohio-based pro dealer and the newly structured distributor announce a partnership.
True Value Company added 146-unit Carter Lumber to its list of customers. The two companies announced a partnership agreement early Monday morning.
Based in Kent, Ohio, and with locations in the Midwest, Southeast and Northeast, Carter Lumber had sales of $1.365 billion in 2017, according to the latest HBSDealer Top 300 report.
“We were delighted to welcome Carter Lumber to our recent Fall Reunion in Denver, to share what we’re all about—our energy, our innovation and our vision for the future,” said John Hartmann, president and CEO of Chicago-based True Value Company. “This proved to be the catalyst to welcome their business into our family. I look forward to our collaboration enhancing both companies and continuing to transform the industry.”
Following ACON Investment’s acquisition of True Value in April 2018, and the subsequent change in the former co-op’s business structure, Carter Lumber expressed interest in doing business with the new company, according to the announcement.
“Though the former co-op model wasn’t relevant to us, True Value’s new business model intrigued us to explore their offering,” said Adam Lombard, VP of product management, Carter Lumber. “We found that True Value offered a different focus on growth, dedicated to our needs and goals. Above all, the team took the time to understand what matters to us and put a great deal of thoughtfulness into our business plan.”
True Value’s commitment to retailers’ growth – from single stores to multi-store chains – along with its flexibility and focus on independence, resonated with Carter Lumber’s leadership by offering superior support, access to new and customized categories, and innovative resources.
“True Value is bringing an impressive service and value-added program to the table,” added Justin Drerup, Director of Hardlines, Carter Lumber. “Their people are engaged and display a genuine excitement in Carter Lumber. We’re anticipating the True Value partnership to be impactful as we continue to grow.”
The privately held, family-owned Carter Lumber was founded in 1932. In 2007, the company received the HBSDealer ProDealer of the Year award.
House-Hasson tackles tariffs
International trade was among the topics at the distributor’s recent market.
Higher tariffs were on the mind of House-Hasson Hardware executives, and their customers, during the latest dealer market.
“Maintaining dealer profitability in the face of the potential tariff increases was a factor in our October dealer market buying programs,” said Don Hasson, House-Hasson Hardware president. “Dealers took advantage of the market to buy items at lower cost that they can sell at competitive prices even if the tariffs go into effect.
The Knoxville, Tenn.-based hardware distributor’s Fall Dealer Market took place in Sevierville, Tenn.
“If the tariff increase doesn’t occur, or if the tariffs overall are reduced or eliminated, our dealers will be in an even better profitability position because of the savings they achieved at the market. Either way, it puts a premium on thoughtful and information-driven decision making,” Hasson added.
On Jan. 1, 2019, tariffs will increase to 25% on $200 billion in Chinese goods imported into the U.S.
“We’re advising and consulting individually with dealers both at our markets and in our regular contacts with them to help them prepare,” said Pat McCutcheon, House-Hasson’s vice president of sales.
“At the same time, the economy is remaining strong, which is a positive. The better the deals give dealers, the better they can serve their customers,” he said.
Hasson said that compared to 2017, October market vendor participation was up 10%, with sales up 14%. The company says it sells to 2,500 dealers in 21 states.
“In January dealers want to start showcasing their spring goods, and what makes our markets so attractive is that dealers can buy for the future at lower costs through our bonus buys, drop-ship specials, pallet buys, and other programs.” McCutcheon added. “In our planning for the Jan. 2019 market in Nashville, Tenn., we can see that dealers are thinking ahead about the tariffs.”
McCutcheon said that industry analysts have differing views on the tariffs’ effects, which means the combination of dealer and House-Hasson local market knowledge is the primary factor in planning for the future.
“Industry trends overall may impact everyone, but in other areas what affects a dealer in Pennsylvania and the Caribbean Basin may be very different from a dealer in Arkansas or Georgia,” McCutcheon said. “That’s why the planning with our dealers individually is vital to ensuring everyone’s success.”
Ace Hardware reports record Q3 results
New store growth and digital sales are highlights of the co-op’s third quarter
Oak Brook, Ill.-based Ace Hardware reported $1.43 billion in third quarter revenues, up 6.3% from the same quarter last year. That record figure was fueled by new store growth, comp-store sales growth and a big jump in e-commerce.
The hardware industry’s largest retailer co-op also reported a third-quarter decline in net income, the result of higher expenses including those related to tight labor market and employee turnover at warehouses. Net income was $36.3 million for the third quarter, down from $53.8 million in the third quarter of 2017.
Read the full press release here.
“Strong new store growth, increased same-store sales, and a 35% increase in acehardware.com revenues helped us realize a healthy 6.3% increase in revenues during the third quarter,” said John Venhuizen, President and CEO. “However, we are not immune to the pain of the tight labor market. Expanded product assortment, higher inventory and increased warehouse employee turnover drove expenses up and profits down for the quarter.”
During the quarter, the co-op pushed its total, worldwide store count to 5,210 – 4,449 in the United States. Ace added 50 new domestic stores in the third quarter and cancelled 24 stores. Compared to the third quarter of 2017, Ace’s has added 83 stores in the U.S.
The company said its wholesale operating expenses increased $13.2 million, or 11.4%, from the third quarter of 2017. The increase includes higher payroll expenses from prior year to support higher revenues and lower distribution center productivity due to high employee turnover, labor costs incurred to setup the new Fredericksburg center while shutting-down the Prince George facility. Higher advertising expenses also factored.
Retail revenues from Ace Retail Holdings – essentially the co-op owned Westlake Ace Hardware –were $79.0 million in the third quarter, up 20.6%. The increase was the result of new retail stores added since the third quarter of 2017. ARH operated 122 stores at the end of the third quarter of 2018 compared to 108 stores at the end of the third quarter of 2017.
Venhuizen also highlighted the efforts to perform in extreme weather conditions. “I’d like to thank the entire Ace team for their heroic efforts to get products to our retailers that were affected by the devastation of hurricanes Florence and Michael.”