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.”
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