True Value’s first 100 Days

CEO John Hartmann says the company is ‘off and running.’

BY Ken Clark

Chicago — July 29 marks the 100th day since True Value’s members voted in favor of the ACON Investment deal that converted the company from a co-op to a no-stock-required hardware distributor. As part of the deal, True Value members kept 30% of the company, and received payouts totaling some $230 million.

True Value CEO John Hartmann pointed to a number of achievements in the first 100 days of the new deal. Topping them off was the return of equity to the dealers.

“Almost a quarter of a billion dollars have flowed back to dealers in the last 100 days,” he told HBSDealer in an interview at True Value headquarters in Chicago. “We’re still in the early days, and we’re seeing a lot of that money reinvested in retailers’ business,” including in the form of new branch locations, paint programs and inventory purchases.

During the first 100 days, a number of boxes have been checked:

  • True Value delivered $210 million in capital to shareholders within three weeks of the close;
  • The company mailed patronage dividend checks in late July, a month ahead of schedule;
  • The company sold more Customized True Blue assortments in the last 90 days than were sold at the previous market; and
  • In the first half of 2018, 69 new customers have come on board, with the vast majority post transaction. That figure is well above the 19 new members who came on in the first half of each of the two prior years.

Of those roughly 70 new customers, a third of them are going to fly the True Value flag,” he said. “So, we are off and running.”

There’s no surprise, he added, that some of the ambiguity and uncertainty during the transitional period from co-op to distributor resulted in lost business. Some customers were unsettled by the rumors, he said.  But since the members voted 84% in favor of the deal, new business has more than made up for the lost time.

Meanwhile, Hartmann remains bullish on the growth opportunities of the independent retailer who invests in their business and maintains a relevant offering of products and services. “I believe firmly in the capability of our independent retailers to continue to innovate and adjust as they have for decades and generations,” he said. “Amazon isn’t the first challenge for these guys.”

Neither is the big box. And True Value has seen countless examples or dealers of all stripes who continue to thrive in the shadows of Home Depot, Lowe’s and Menards.

John Hartmann

Hartmann elaborated on the strength of the independent. “It’s the differentiated service model. Whether it’s a professional contractor-based model, or a core hardware store, the successful independent typically (though not always) operates out of a smaller format; they are embedded in the community, they know their customers. They offer quick in and out. And they not only have the products that customers need, they have the knowledge and ability to explain to customers how to use them.

“Those attributes can’t be duplicated by a drone,” he said.

Looking ahead, Hartmann said he can’t wait for the company’s first post-deal market – the True Value Reunions in Denver in late September. “I’m fired up about Denver,” he said. “Our message will be: ‘Here we are, nothing’s changed. And you’ll see the same passion for the independent retailer.”

And looking back at the first 100 days since the transaction, Hartmann’s assessment is one of business as usual, and business fuel-injected with previously untapped equity for True Value dealers.

“We have met every commitment that we made to our shareholders and members of the cooperative. Our premise was to continue to constantly serve our existing customers while we get stronger as a whole company by adding new customers. And we are just keeping our mouth shut and doing exactly what we said we were going to do.”


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