Page 45 - Hardware July 2019

global eyes
company, we identified a way to unlock the majority of our retailer’s equity to allow them to invest in their business as they know best.
“A year ago, we closed on the transaction with a financial sponsor that unlocked True Value members’ equity and transitioned the business from a co-op model to becoming a pure-play wholesaler, while continuing to offer access to nationally recognized brand and suite of retail services.
“True Value is now best-placed to allow the independent hardware retailer to thrive, by creating a more flexible, growth-oriented business model.
“With the return of over $230 million to more than 4,000 independent hardware retailers— they are now able to invest in their business to ensure they stay relevant for generations to come.
“The move not only opened a new chapter in the history of our company, but it also began the transformation of the industry, by paving the way for the continued growth of all independent hardware retailers.”
You have talked about modernising the channel’s business model – what were the key drivers?
“As the retail industry continues to transformaroundus,retailersmust constantly improve their business, so that they can continue to offer customers thechoice,valueformoneyandsuperb service that differentiates them.
“The co-op model has been in existence for decades. And while we absolutely respect the legacy of the co-op model, times have changed since its inception in the hardware industry.
“We needed to start to think differently. We knew we could offer retailers the same great relationship without their hard-earned money being trapped in an antiquated model.
“Thinking differently changed the structure of our business and allowed us to return our retailers’ trapped equity while at the same time, accelerating
our strategic investments, importantly without financial burden to them.
“More than $100 million of the returned equity has been reinvested back into their businesses through the purchase of new stores, remodels, new assortments, and digital advertising.
“Now, with an infusion of money, these
independents are better positioned to compete, provide jobs and remain the heartbeat of their communities.”
Describe the benefits of these changes for True Value Company one year on? “Now, as the only hardlines wholesaler with an iconic, globally recognized brand and no stock requirement, more and more retailers are seeing the advantages of True Value.
“In fact, since the transaction, more than 500 retailers have come on board.
“From May 1st through the end of last year, we had record setting growth with more than 300 retailers joining True Value. An amazing trend that is continuing with more than 250 new customers so far this year.
“These include traditional hardware stores – both individual and multi- location, major lumber and building material dealers like Carter Lumber, and a variety of non-traditional customers.
“We’re also making the largest investments in the history of True Value to more effectively and efficiently serve our independent hardware retailers.
“In the past year, we:
• Implemented the first phase of Hub
and Spoke in the Midwest – fill rates
are now at 99%.
• Introducedtheindustry’smost
innovative and effective, hyper-local
marketing programs
• Beganthedoublingofoursalesforce
to better serve current accounts while
growing our customer base
• Broke ground on a $100 million state-
of-the-art distribution center.”
“We’ve been busy,” concludes John Hartmann, with perhaps just a touch of understatement.
“It has been a year that we are proud
of – proud to keep the commitments we made to our members and customers and proud to move the needle in the areas most important to them.
“The historic change, and achievement, was possible because we allowed ourselves to think differently.
“We were able to think outside the co-op model and put trust in a plan that outlined the importance and benefits of independence.
“We remain humble and hungry to serve independents around the world.”
International bits & pieces
Ace sees “solid” Q1 growth – Following on from Q1 numbers released by The Home depot and Lowe’s (see the last issue), Ace Hardware recorded best ever Q1 revenues of US$1.38 billion (+5%), net income of US$22.6 million (+89.9% thanks to new stores and the timing of vendor funds earned) with US same store sales +3.9%. Online revenue was +55%.
www.acehardware.com
What is “Generation T”? – Generation
T is a movement of some 60 US construction-related organisations,
led by Lowe’s, which is targeting the skills gap that’s being seen pretty much worldwide these days. US analysts predict the gap will amount to no less than 3 million jobs by 2028 but Gen T aims to reduce this by exposing children to trade education and encouraging students to explore career options beyond four-year degree programs. Gen T also connects prospective skilled trade professionals to apprenticeships and jobs through its website.
www.wearegenerationt.com
Get with the program – Rust-Oleum and True Value have launched the Rust-Oleum Certified Hardware Retailer Program in the US intending to “help independent hardware stores establish themselves as a paint destination for consumers”. Participating retailers receive product training, special promotions and a wide variety of marketing elements for Rust-Oleum products.
www.truevalue.com
www.truevaluecompany.com
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JULY 2019 | NZHJ 43