ACON’s vote of confidence
Managing Partner Aron Schwartz explains the True Value investment strategy.
Among the highlights of the True Value Reunion General Session was a presentation from Aron Schwartz, managing partner of ACON Investments.
In a three minute-video, Schwartz explained the reasons for ACON’s interest in True Value, and the Connecticut-based investment company’s confidence in True Value’s direction.
“We did not invest in True Value expecting to make a quick buck by selling off parts of the company,” Schwartz 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.”
Here is Schwartz’ full statement:
“You have heard from your leadership team about all the ways they are working to continue to push the business forward. What you have seen and heard today are the reasons ACON Investments wanted to invest in True Value, and its mission of supporting the independent hardware retailer.
“Let me share a little bit about ACON’s approach to investing.
“We are a private investment firm. We are business builders. And throughout our 22 years of investing, we have worked closely with management teams to grow companies across a range of industries. To do so, we actively seek out capable management teams at businesses that are full of potential. We then provide these teams with the capital to implement their vision for growing their companies.
“We did not invest in True Value expecting to make a quick buck by selling off parts of the company. 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.
“There were three things that got us excited about investing in True Value and made us determine to be your partner.
“First, True Vale is an iconic brand. It is tough to find someone who doesn’t know True Value and love True Value. True Value is woven into our nation’s communities. And we think the independent hardware retailer, with the service and convenience that it offers, is going to thrive for decades to come.
“Second, as I said before, we were drawn to True Value’s strong management team and associate base. They have a well-thought-out strategic plan and a solid strategy for ensuring the growth and profitability of both retailers and the company.
“And the third and most impressive element was you, the more than 4,000 independent hardware retailers that go to work every day to support your communities with unrivaled service and expertise.
“In short, ACON is not here to change what you love about True Value. To the contrary, we are impressed with the significant steps the business has made in the last few years. And True Value is going to continue to make progress because we are committed to making smart significant investments, ensuring the company continues to have the best products, best assortments and best fill rates in the industry. Selectively welcoming new customers into our network so that we can continue to drive the cost of fulfillment down while ensuring that dependable, reliable and consistent service remains a top priority — And doing all of this at market competitive prices.
“Let me conclude by thanking you for your trust and for permitting ACON to be your partner in True Value. Rest assured, management is working hard to grow the value of your remaining equity in the business. And that all of us hope that the return the return of the majority of your capital earlier this year has unlocked the opportunity for you to invest further in your business. And this is why I genuinely believe that True Value is well placed to support your growth and profitability for generations to come.
ACON Investments acquired a majority ownership of True Value Company in April.
NAHB responds to housing bill
The $475 billion bill is designed to create housing for low-income and middle-class Americans.
Sen. Elizabeth Warren (D-Mass.) has introduced legislation – the American Housing and Economic Mobility Act – designed to stimulate more affordable housing for the nation.
The $475 billion bill is designed to create housing for low-income and middle-class Americas, including the construction of new homes along with the rehabilitation of existing ones.
The current housing situation sees many possible buyers remaining on the sidelines due to affordability issues. At the same time, a lack of housing has continued to push prices up in 2018 and placed homes further out of reach for many.
The bill also includes $2 billion in support for homeowners who are still underwater on their mortgages long after the financial crash.
Warren’s bill is designed to be funded by an increase in the Estate Tax in addition to taxes on the 10,000 most wealthy Americans.
The National Association of Home Builders has responded to the bill saying that, while there are good intentions in the proposed legislation, it could ultimately hurt small businesses.
“A key component of the American Housing and Economic Mobility Act would eliminate unnecessary local land use rules that drive up construction costs and harm housing affordability,” said Randy Noel, chairman of the National Association of Home Builders (NAHB), said in a prepared statement. and a custom home builder from LaPlace, La.,
“However, funding many of the provisions within this broad-based bill by raising the estate tax could hurt many small, family-run businesses by imperiling the ability of the owners to pass on their business to future generations,” Noel said.
Readers Respond: Sears in the headlines
A question about the “B” word brings a landslide response.
Sears Holdings in recent years has been one of the most talked about retailers in American business, and for many of the wrong reasons. Store closings and poor financial results have regularly sparked doom-and-gloom headlines.
And those headlines in the financial press are back, and many are predicting the B-word: “bankruptcy.” But the company is hoping to hold it off with a restructuring of debt and a sale of more property.
HBSDealers asked readers: “Will Sears Holdings avoid bankruptcy, in your opinion?”
The vast majority of readers – 93% — said “no.”
The poll remains open on the right side of the screen (or scroll down your handheld device). Or, tell us your thoughts on Sears’ future here. We invite your comments.