DISTRIBUTORS/CO-OPS

House-Hasson tackles tariffs

International trade was among the topics at the distributor’s recent market.

BY HBSDealer Staff

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.”

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Ace Hardware reports record Q3 results

New store growth and digital sales are highlights of the co-op’s third quarter

BY HBSDealer Staff

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.”

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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.”

 

 

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Do it Best names Rental Merchandise Manager

The Indiana-based co-op announced the promotion of Lauren Wilson.

BY HBSDealer Staff

Fort Wayne, Ind.-based Do it Best promoted Lauren Wilson to Merchandise Manager. Wilson will develop, implement and communicate comprehensive programs for the co-op’s Rental, Impulse, Snacks and Store Supplies departments, as well as work closely with vendors to deliver profitable promotions and pricing on behalf of member-owners.

The move will take effect Dec. 3.

“Lauren’s extensive experience as a part of our merchandise team will allow her to make immediate contributions in this important role on our team,” said Dent Johnson, VP of merchandising at Do it Best. “She’s already proven her ability to drive results for our members – and we are excited to see how she will help them grow even more with the right products and programs for these categories.”

Wilson is a six-year veteran of Do it Best, most recently serving as the associate merchandise manager for the Lawn & Garden Green Goods department. She’s also worked as the associate merchandise manager in global sourcing. Wilson earned an MBA from Indiana University in 2008.

“I am honored to take on the challenges and opportunities presented by this role,” Wilson said, “and I’m eager to help drive growth for our members through these profitable categories.”

 

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