Ace breaks down its record year

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Ace breaks down its record year

By HBSDealer Staff - 05/07/2020
Oak Brook, Ill.-based Ace Hardware Corp. published its annual report Thursday morning, documenting what CEO John Venhuizen described as a record-breaking year on many fronts.

The co-op Thursday morning released its annual report highlighting its accomplishments, including a 6.2% sales gain that pushing across the $6 billion mark for the first time in the co-op’s history. More than 80% of those sales came from wholesale purchases.

Ace's distribution center in Wilton, N.Y.

“Management’s primary responsibility to shareholders is to deliver a return on the investment you have in both your stores and in this company,” said CEO John Venhuizen. “I’m proud to report that with a patronage distribution of $182.2 million, Ace owners, in aggregate, received a 33% return on their equity in Ace.”

(The co-op released its fourth quarter and full year financial report in February.)

The company’s store count also increased, from 4,476 at the beginning of the year, to 4,556 at the end. And as the store count increased, so did the number of retailers with multiple outlets --  671, up from 643.

The number of company-owned retail outlets grew from 123 to 186 in 2019, and hit total revenue of $466 million. Westlake Ace Hardware was up 12.8% and Great Lakes Ace was up 19.7%.

The company also pointed to total patronage distributions in 2019 of $182.2 million, a record dividend to retail shareholders and up 28% from the prior year.

Other highlights from the annual report.

  • Warehouse sales of private label Ace brands were more than $659 million in 2019, or about 14% of the company’s domestic wholesale merchandise sales.

  • Ace rewards: At the end of 2019, Ace had about 50 million Ace Rewards members.

  • Ace received more than 102 million visitors in 2019, and revenues of the e-commerce site were up 59%.

  • Charitable giving. All told, the co-op raised 15.6 million to charities, including the Children’s Miracle Network and the Red Cross.

  • Not all Ace ventures were positive in 2019. Ace International was down 2.5% -- a solid, but not a great year, said CEO Venhuizen. The company’s Emery Jensen Distribution subsidiary reported a loss of $27 million.

  • Led by paint, merchandise sales remained steady. Here’s the breakdown of warehouse sales for the past two years:

2019    2018

Paint, cleaning and related                 19%    20%
Plumbing and heating supplies          14%     14%
Garden, rural equipment                    17%     17%
Electrical supplies                               9%       9%
Hand and power tools                        11%     11%
General hardware                               9%       9%
Sundry                                                 17%     15%
Housewares and small appliances     4%       5%

The full annual report is available here.