Q&A with the CEO

True Value CEO Lyle Heidemann, a former Sears executive and current member of the Home Channel Hall of Fame—into which he was inducted last year during the Home Channel News Golden Hammer awards in Las Vegas—shared his thoughts on expansion, the economy and success in hardware retailing. He spoke with Home Channel News in February.

Home Channel News: How do you view growth for the co-op and its members?

Lyle Heidemann: I think that, independent of the economy, you have to step back and wonder whether you need to make that investment or not, to either retain your competitiveness in the marketplace or to gain competitiveness. Last year we had over 50 retailers participate in our growth funds; we anticipate something north of 100 this year. Our plans this year are to remodel or relocate or open over 1 million sq. ft. to Destination True Value. We’re well on our way after six weeks into the year—we’re well on our way to accomplish that goal.

HCN: Can you talk about how the Destination True Value concept is fine-tuned or maybe evolved a little bit, if at all, from last year?

Heidemann: I think probably the biggest thing that we’ve figured out is we’ve reduced the time from conception at the local store to actually remodeling the store or opening the store. So, I think what we’ve done is we’ve learned an awful lot of things from a process standpoint that in most cases takes time and effort out of the remodel process or the new store process.

HCN: Obviously, the economy is weak. How does that factor into member growth plans, and when is the right time to expand?

Heidemann: I think most economists believe that the economy in general has bottomed out. I think most of them would agree that the recovery is going to be a slow recovery. I think with what’s happened from a money supply standpoint and what the federal reserve is doing, I think that most believe that the cost of money is going to go up probably starting in the latter part of this year and going into 2011. The goods and services that you need to employ to remodel your store or build a new store are going to be more expensive 12 months from now. This is a good time to continue to invest in your business.

HCN: What do your members need to do in order to survive and thrive in 2010, and how would you describe a retailer that’s going to have a good year? What are some of the characteristics of that retailer?

Heidemann: First off, certainly going into the year they have to do two things that I think they learned to do better in 2009; that is to become better operators and better cash managers. But I think they have to maintain that in 2010. But then I think it gets back to a good hardware store is known for its convenience, its customer service and being in stock, and I think that what we found last year is you have to be aggressive from a marketing standpoint and provide value to the consumer. And I think that we have to continue doing those things in 2010.

HCN: How would you describe what True Value’s message is going to be in 2010?

Heidemann: Our message is still “Start Right. Start Here.” I think you’re better off being consistent for a extended period of time so that consumers can identify with the message you’re giving.

HCN: Can you give us the hardware trend that you think is going to surprise people this year?

Heidemann: I don’t know that there’s any one thing in the industry that would be a big surprise. But I think if there’s one thing that True Value would do is that we surprise our consumers every time we remodel or open up a store.