Dealer profile: Thompson True Value

A fan of the co-op model, and critic of his company’s transformation.

BY Ken Clark

David Thompson of Thompson True Value Hardware & Rental in Marshalltown, Iowa, remembers clearly the day he became a True Value member.

The year was 1972. He was 24.

“John Cotter shook my hand the day I bought my store,” he told HBSDealer. “In fact, he was the reason I bought my store. He gave me my backing. I’ll never forget the opportunity I was provided.”

Cotter wasn’t Thompson’s first brush with a home improvement legend. Growing up in Eau Claire, Wis., Thompson and his family would often share their dinner table with a young entrepreneur named John Menard.

As a retailer, Thompson takes community to heart. He’s a county supervisor (similar to a business manager) in Marshall County. The store is active in Little League and various fund-raising efforts. “We have huge community support, and we give it back,” he said.

Thompson’s retail background and his roots in the Midwest — where co-ops played instrumental roles in the dairy and farming industry — shaped a positive feeling toward the co-op business model.

He bled True Value red during his retailing career. In a True Value promotional picture with his son, Paul, the headline read “The Value of Being the Local Expert.”

Then came the new deal — ACON Investments’ purchase of 70% of the company. True Value said the deal was accepted by more than 80% of voting members. Thompson was not among them.

“I withheld my vote,” he said. “In effect, my vote was one of no confidence. The only reason I can imagine any store owner voted ‘yes’ was in fear of losing their investment. Getting 70% of your investment back was better than getting nothing.”

Will he use his windfall check to invest in the business? “I have invested in the business from day one and will continue to do so.”

Will he go to the True Value Reunion in Denver? “Yes. I will go to many other shows, too.”

What is his post-transaction strategy? “Wait and see.”

Critical of the handling of the transaction, Thompson called the 30-day window (it was extended by a week) an “absurd” amount of time for such a momentous decision. “This was a transaction of a member-owned organization that involved people’s life work and lifetime savings. It was unconscionable,” he said.

He also takes issue with the requirement to pay $150 per store per month for True Value branding and participation in ship-to-store. “A name that many of us had worked a lifetime to build and are now being charged $150 a month to use — it’s an insult.”

There are plenty of alternative opinions regarding the True Value deal. For instance, Dorn True Value of Madison, Wis., emailed the following: “There is change happening in all of retail, and old structures and ownerships need to change to survive. I think True Value is ready to grow again.”

As for Thompson, he expressed a feeling of good fortune that his family will carry on the business: “The greatest issue facing our industry today is succession planning,” he said. “I’m very fortunate that I have a son that has been through school and understands the opportunity. He has a solid future ahead of him.”

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