True Value’s General Session highlights
A company embraces change at its 2018 Reunion in Denver.
Denver, Colo. — In the first True Value Reunion of the ACON Investments era, the general session got down to business as usual – with too many quotes, statistics and points of interest to include in a single article.
But there were a few notable changes. The event was the first for the former co-op since its deal with ACON Investments — a move that brought some $200 million of equity to members in exchange for 70% of the company. And opened the door for True Value to cast a wider net outside its previous member base. Include in this year’s session were some detailed descriptions of how dealers were using their recent cash infusions from the transaction, and also a video presentation from ACON managing partner Aaron Schwartz.
Schwartz emphasized ACON’s confidence in the True Value model.
“We did not invest in True Value expecting to make a quick buck by selling off parts of the company,” he said. “To the contrary, we invested in True Value because we believe there is still so much more to be achieved, and specifically so much more that this management team could accomplish if it had the resources to do so.”
In the state of the art Bellco Theater at the Colorado Convention Center, and with some pretty cool visual graphics and a flash-mob dance number adding to the energy, the general session hammered on the theme of bring the company into the future. President and CEO John Hartmann kicked off the session explaining the value of the ACON deal, including “more flexibility and more independence to do what’s right for your stores now and in years to come.”
From the stage, Hartmann welcomed more than 100 new True Value customers and dozens of prospects to the Denver Reunion.
Perhaps the biggest announcement from the session was a plan for a major supply chain investment. It’s the “first time in decades that we made this level of investment to enhance our distribution network,” said Hartmann.
Abhinav Shukla, True Value senior VP and COO, explained that fill rates have been consistent with prior years, but they can be improved. The current year “has been very challenging with inbound fill rates, and that’s driven outbound customer fill rates lower than we are satisfied with,” he said. The plan calls for an investment of “$100 million in the next year for new distribution capacity, which will help accelerate the modernization of our supply chain. A long term solution to alleviate congestion in our buildings, lower operating costs and improve in-stock rates.”
The company said it will add more than a million square feet of distribution space to its network. More specifics will be announced in coming months.
Unleashing trapped equity was a theme and major principal of the ACON sale, and it was one of the first topics addressed during a scripted conversation of company leaders. Tim Mills, senior VP of growth, described some of the ways stores are reinvesting.
“It really runs the full gamut, everything from full remodels to ground-up stores, thousands of additional investments in [Customized True Blue] assortments, and hundreds and more are making investments in the market today, and basic repairs of facilities.”
Fellow panelist and sixth-generation hardware store retailer Brian Webb added: “We recently put a new roof on our store, and although that doesn’t sound very sexy, it was very expensive, long overdue and I’m glad we had the opportunity to do it.”
True Value gets ‘Future Ready’
The hardware distributor welcomes dealers to a Reunion in Denver.
True Value Company’s Fall Reunion promises a weekend of products, education and networking here at the Colorado Convention Center.
With a theme of “Future Ready,” the Sept. 27-30 event in Denver will mark the first Reunion since the company underwent a major restructuring that included a sale of 70% of the company to ACON Investments, returning more than $200 million to members in the process. The company is hosting retailers regardless of affiliation with a slate of buying opportunities, educational sessions and discounted prices on merchandise.
Several dealers interviewed by HBSDealer during the Reunion’s opening-night Bargain Burners Reception in the exhibit hall explained that they were going about their business as usual.
“We’re all curious about what’s going to happen, but for now it all seems normal,” said Matt Martin, of Ross True Value in El Reno, Okla. “We just got here, but so far it looks pretty similar.”
Also from Ross True Value, Chase Smith said he appreciates True Value’s new approach to marketing, which allows the individual dealer to pick and choose a method that works for the individual dealer. “One of the biggest things for us, since we’re in a small town in Oklahoma, is that we’re more rural. So certain things that are advertised nationally don’t work for us. So now, we can digitally go in and target our ads for people in our area. It’s been a big change. We’ve definitely seen an increase in foot traffic. It’s definitely helped generate a lot more interest in the store.”
A big talking point in Denver is the impact of the ACON Investments deal.
At the Bargain Burners Reception, Jim Waters from Waters True Value of Salina, Kansas, said he knew the ins and outs of the transaction pretty well – he was on the co-op board that approved it. “I thought then that it was a smart thing to do, and I haven’t changed my mind,” he said. “There was a heck of a lot of consideration. It was not an easy decision. But I very much believed, and still do, that it was the right decision.”
True Value Company President and CEO John Hartmann and other True Value executives are expected to share their insights on the company and its direction during a Friday afternoon general session. “The transaction we made earlier this year changed the independent hardware industry in a way it has never experienced before,” said Hartmann in a recent press release. “Our doors are now open to all independent hardware retailers across the globe.”
More than 80% of True Value dealers voted to adopt the deal back in April. One retailer, out of a dozen or so interviewed during the reception, was unenthusiastic about the transaction. Ryver Hankins of Hankins Hardware True Value of Portland, Ore., said he was “disheartened” by the loss of the previous True Value member-owned structure.
Meanwhile, the Reunion continues with nearly one million sq. ft. of exhibits, and an open-door policy for dealers. Jean Niemi, VP of communications for True Value, said this Reunion’s “Future Ready” slogan was selected partly because it reflects the need to adapt in a changing world.
“We’ve gone through a transition this year that has positioned us to be future ready,” she said. “Every business has to be flexible and ready to change as the future dictates.”
House-Hasson tackles hurricane needs
The hardware distributor has about 500 customers in impacted areas.
Even before Hurricane Florence arrived on North Carolina’s shores, House-Hasson Hardware said it prepared to meet the demand for building materials and hardware supplies from businesses and homeowners setting out to rebuild and recover from the storm.
The regional hardware distributor that serves hardware stores and pro dealers has about 500 customers in North Carolina, South Carolina, and Virginia.
“High-demand items from our dealers are things like generators, gas cans, and bottled water, but it’s certainly not limited to those products,” said Don Hasson, the company’s president.
“Independent hardware stores and lumberyards are in the vanguard of reconstruction and recovery efforts,” Hasson added. “People depend on their local stores even when no emergency exists; when something as devastating as a hurricane hits, those stores are their go-to places for what they need.”
House-Hasson also donated a truckload of bottled water to Remote Area Medical for distribution in the stricken areas. “That’s a basic need we want to help meet,” Hasson said.
Trucks lined up at House-Hasson’s 400,000 square-foot warehouse, loaded with items for dealers. And they’re heading back with more.
The distributor has been met with flooded roadways in some cases. Bbut for the most part deliveries are being made to stores that are open and to which travel isn’t restricted.
“If we can’t get there immediately it’ll be as soon as humanly possible,” Hasson said.
House-Hasson said it typically sees increased activity during hurricane season, usually for its Caribbean Basin customers.
“We’ve had customers get badly slammed in the past by hurricanes, so we help them as much as we can to get operating again for their benefit and for the benefit of the people who are counting on them,” Hasson noted.
Based in Knoxville, Tenn., House-Hasson Hardware serves about 2,500 dealers in 21 states and the Caribbean Basin.