At Westlake, an appetite for growth
Westlake Ace Hardware, the retail division of Ace Hardware Corp., opened its 101st store in early August through the acquisition of Indian Hills Ace Hardware in Wichita, Kansas.
The purchase of Indian Hills Ace comes right out of the strategic playbook drawn up when Ace Hardware Corp. purchased Westlake back in 2012. Among the rationale for that industry-shaking deal was the idea that the Lenexa, Kansas-based hardware chain could be positioned to buy other Ace stores that were looking to sell.
Westlake has embraced the role, especially recently. It acquired Seagoville Ace Hardware in Texas in July of last year. In December, two Williams Ace Hardware stores in the Wichita area joined Westlake. And in June, Westlake acquired two Q.P. Ace Hardware stores in Omaha, Nebraska.
“We have an appetite for growth, and we’re looking to take advantage of our footprint,” said Westlake Ace CEO Tom Knox. “By and large, we’re buying profitable, really good hardware stores. And we want to look for ways to grow.”
When Westlake Ace buys what it believes is a quality store, there are few plans to shake things up. Cases in point are the two new stores in the Raleigh, North Carolina market. The stores carried the Ace Hardware banner, and Westlake sees no reason to change the banner by introducing the Westlake brand that’s more famous in Kansas City than Carolina.
"We’re not trying to make a ton of changes,” Knox said. “Where there is already a local following and brand equity, we want to keep it that way.” The two stores in North Carolina mark the farthest outpost for the Westlake empire. Westlake intends to build up the footprint in the Carolinas to find synergies in advertising and distribution.
Knox, along with the company’s President and COO Joe Jeffries, spoke with HBSDealer recently about the retailer’s culture of growth and its commitment to convenience – a term that both men believe is crucial to understand and embrace. Both executives are also quick to describe the relationship with the co-op as cordial and collaborative, without any top-down marching orders from Oak Brook.
According to Jeffries, the relationship between owner and wholly owned subsidiary is “a very positive experience and a very collaborative environment.”
Westlake’s structure includes a board with two Ace Hardware co-op officers, and two Ace dealers. Knox explained that’s about as far as corporate’s control extends over the operations of the Kansas-based retailer.
“We are not forced to try things. We like participating in tests, and we like to try new programs and be test stores wherever we can,” he added.
Even more collaboration comes from within the Westlake family. According to Jefferies: “We pay a lot of attention. to what works in each of our markets and regions. And we’re always looking to adopt best practices.”
And then there’s new niches. According to Knox, Westlake constantly asks itself “how can we introduce new product niches inside our stores and continually focus on our store-level productivity? That is at the top of the priority list.”
One of the biggest niches to come along recently is in the Kansas City area, where Westlake introduced Westlake Pet Supply. It’s been operating for more than three months now, and “it’s doing spectacular,” said Knox. Two more are in the works.
‘We totally reset the store and created a store-within-a-store concept,” Knox said. “It has a separate entrance. It’s a great niche for a lot of our stores, largely because people will spend money on their pets.”
And while the retailer flexes its brick-and-mortar muscle, it’s also aware of the challenges placed on retailers by new competitors, including Amzon.com.
‘We are taking steps,” said Jeffries. “We’re working in partnership with Ace Corp. A lot of our success has to do with how we define convenience and how the consumer of tomorrow is certainly going to define it. We have to know that, and we have to make sure that we maintain that top-of-mind position in convenience.”
He added 75% of online orders are picked up in the store, which is good for the customer and good for size of basket metrics.
Westlake also recently added Stihl outdoor power equipment to 70 stores. “We’re continually looking at the breadth of our product mix,” said Knox. “Service and convenience, that’s what’s going to win.”