Ace Hardware 2015 Annual Report Download

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2015 ACE HARDWARE ANNUAL REPORT

Table of contents

  • Page 1
    2015 ACE HARDWARE ANNUAL REPORT

  • Page 2
    " Our vision to be the best, most helpful hardware stores on the planet requires both a differentiated retail strategy and a world-class wholesale strategy." - John Venhuizen, President and CEO

  • Page 3

  • Page 4
    ...to report that 2015 marked the best financial performance in Ace's history. We expect the team to operate this company as if they owned the place, for we believe that mindset is solid footing for good stewardship. We recognize that as shareholders, you have meaningful investments in your stores and...

  • Page 5
    ... of $8.8 million. The new management team is poised for further success. Thanks for making Ace the place with the Helpful Hardware Folks! ACE WHOLESALE HOLDINGS Collectively, Emery-Waterhouse and Jensen Distribution grew revenue 6% to $346 million, generated operating income of $5.5 million and...

  • Page 6
    ... of our overall strategy: On behalf of the entire Board, thank you for a great 2015 and for being the best, most helpful hardware stores on the planet. Together, your Board of Directors, Ace leadership, and vendors will continue to work hard to honor our greatness as a company and ensure that...

  • Page 7
    ...RETAIL SPACE 2,305 STORES BECAME HELPFUL CERTIFIED +1.9% INCREASE IN RETAIL TRANSACTIONS 3.32 MILLION NEW ACE REWARDS MEMBERS 96.72% SERVICE LEVELS 2,328 STORES NOW SUPPLY PLACE CERTIFIED $ 4.79 BILLION G RA ND OPENING 226 (96 NET NEW STORES) WHOLESALE REVENUE NEW STORES YEAR IN REVIEW 5

  • Page 8
    ..."Doing the hard but necessary work of partnering with our customers to build regional customer-centric assortments is a big win for Ace," says Jay Heubner, President and General Manager of AIH. From a supply chain perspective, the network of Regional Distribution Centers located in China, Panama and...

  • Page 9
    ... get home safely at the end of each day. Impressive new facilities, cutting-edge technology, and highly effective programs helped deliver phenomenal growth in 2015. For 2016 and beyond, we'll be putting these assets to work with a continued focus on proven core processes to drive supply chain...

  • Page 10
    ... of convenience and variety that most big boxes lack and will continue to grow Ace's market share. We backed 2015's new assortment with competitive pricing, aggressive advertising, and dedicated end caps so stores could have a permanent home for LED. LED Bulbs for Consumers In addition to being...

  • Page 11
    ...potential customers with the incredible savings available to them. To support the program, Ace provided district managers with in-depth training on both LED technology and the sales process, plus tools to coach and support retailers selling LED for Business. "The training and investment that Ace has...

  • Page 12
    B2B SALES SHINE EVEN BRIGHTER WITH THE LED RETROFIT PROGRAM NOBLESVILLE ACE HARDWARE Noblesville, Ind. Be the Supply Place Ace Hardware received the highest numerical score among retail stores in the proprietary J.D. Power 2007-2015 Home Improvement Retail Store StudiesSM. 2015 study based on ...

  • Page 13
    ...is big,'" recalls Pat. Noblesville Ace was already Supply Place certified, with a thriving B2B business, and the Dearys saw the fantastic sales opportunity the LED retrofit program presented their existing B2B customers. Pat and Alison started their strategy by converting their own store to LED so...

  • Page 14
    HELPING CUSTOMERS IN ABSOLUTELY EVERYTHING THEY DO HOMETOWN ACE HARDWARE Gloucester, Mass. Fulfill the Helpful Promise 12 RETAILER STORIES

  • Page 15
    ..., which has the added benefit of creating a valuable marketing opportunity. "Last year, we gave out $5 coupons," says Jay. "This year it was 4,000 Ace paint T-shirts. It's a great use of advertising dollars." Hometown Ace also supports CMN Hospitals, gives out Christmas trees to needy families...

  • Page 16
    OPTIMIZING INVENTORY AND BEST PRACTICES LEADS TO SUCCESS 14 RETAILER STORIES

  • Page 17
    ... collecting more than 1,500 email addresses for Ace Rewards, and brought their scan rate up to an impressive mid-50% range. Training has also played an important part in Dave's game plan. Dave and Mahin started with an Ace business coach, then ran the store themselves, open to close, for the first...

  • Page 18
    ... local competition - no big boxes, no other hardware stores, just a farm and ranch store run by another co-op. Owners Mark and Betty Vergets saw this as a unique opportunity to grow their business and better serve the community they call home. The Vergets' store was 10,000 square feet and it was...

  • Page 19
    ... community, in turn, supports Newberg Ace, resulting in strong sales that culminated in an increase of 31.9% for 2015. "The benefits this community focus has provided for our business simply can't be counted," Mark says. Working together with Ace helped make it all possible. RETAILER STORIES 17

  • Page 20
    SEEKING OUT UNFULFILLED NICHES LEADS TO GROWTH 18 RETAILER STORIES

  • Page 21
    ... the Ace show and ended up making a large gift section in the middle of our store," he says. "Now we're getting a lot of female shoppers too." The Pauls brought in plants from Ace's live goods program and used underutilized outdoor space to display generators, patio sets, fountains and outdoor decor...

  • Page 22
    ... hardware aisles and helps integrate complementary grocery departments with their Ace counterparts. Merchandising teams from both sides work together to create product lineups. "There are so many dual merchandising opportunities," says Jack. Ace's pricing keeps the store competitive with big boxes...

  • Page 23
    ... online training through Helpful 101 and 201, a practice they continue. The results speak for themselves. Sales are up, and customers love the convenience of having an Ace Hardware right in their favorite grocery store. "It's a key point of difference from our competitors," says Jack, "and it gives...

  • Page 24
    EXCELLING AT CUSTOMER SERVICE SERVES THEIR BUSINESS WELL HAYNES ACE HARDWARE Conway, Ark. Fulfill the Helpful Promise 22 RETAILER STORIES

  • Page 25
    ...simple foundation: delivering the very best customer service he can, at a level no one else can match. "What sets us apart from the competition is that we do everything we can to treat customers like valued guests and make them a part of our family," he says. To guarantee this happens, store manager...

  • Page 26
    HOME-GROWN EXPERTISE BRINGS SUCCESS 24 RETAILER STORIES

  • Page 27
    ... worked with Ace to develop a regionalized mix for categories like plumbing. The latest signage and store decor is always in place to give his store a distinct and unique look. The store is also Supply Place certified, which has helped Mark's Ace land several large commercial contracts. Success...

  • Page 28
    ... hard work, the store celebrated its grand opening in October 2015. "We're grateful Ace has everything we need." Foster Ace Hardware now comprises nearly 15,000 square feet and has seen huge sales growth thanks to the expansion. Paint, Craftsman and a new Stihl lineup have all proven to be big hits...

  • Page 29
    ...of paper goods. "Paper products are our stepping stone to get into a business," says Mark. "Everybody uses them." Once they get a foot in the door, the store builds sales with other in-demand products such as cleaning supplies, shovels and ice melt. Corporate training and support programs play a key...

  • Page 30
    ... when it makes sense." That includes mirroring Ace's consumer research methods, bringing Ace Rewards on board to take advantage of the data analytics, and using other best practices for store layout. Some of Ace Philippines' strategies involve putting a local spin on a tried-and-true business plan...

  • Page 31
    ... have helped grow their business with Ace International 78% year-over-year. Training also plays a big part in moving Ace Philippines forward. Bernard has a simple plan to make this happen: formal training for all through Helpful 101 and 201. As a result, Ace Philippines certified six stores...

  • Page 32
    ... TOP 10 FUNDRAISING ACE/CMN HOSPITAL MARKETS $ 1 2 3 4 5 30 355,348 HOUSTON 6 7 8 9 10 $ 77,364 HONOLULU $ $ 291,485 CHICAGO 72,265 ATLANTA $ 123,288 DENVER $ 68,487 PORTLAND, ORE. $ 102,265 SALT LAKE CITY $ 67,605 61,913 ST. LOUIS MINNEAPOLISST. PAUL $ $ 89,929 KANSAS CITY ACE...

  • Page 33
    ... 5 FUNDRAISING CHAINS IN 2015* BASED ON THE AVERAGE RAISED PER STORE (CALCULATED BY TOTAL DOLLARS RAISED DIVIDED BY NUMBER OF STORES) 1 Ace Hardware & Paint Bob Mitchell Portland, Spokane, Seattle Ace Hardware $ 5,253 2 St. Louis Joseph Findysz Tucson $ 5,221 3 Chicago Sykes Ace Hardware...

  • Page 34
    ... $ STORE PARTICIPATION 69,177 47% INCREASE OVER $2.09 MILLION IN 2014 $ $ $ RACING FOR A MIRACLE 980 GOLFERS MOTORCYCLE MIRACLE MISSION $ 817 , 750 DOLLARS RAISED VENDOR GOLF OUTING RSC FUNDRAISING RETAILER FUNDRAISING VENDOR FUNDRAISING CORPORATE FUNDRAISING 32 ACE FOUNDATION

  • Page 35
    ... Bill Murff. Whoever's market could raise more funds for CMNH in 2014 would get to enlist the "loser" to help with his market's fundraising efforts. Dan and several members of his Chicagoland committee ended up ï¬,ying down to Houston to fulfill their part of the bargain. They worked the 2015...

  • Page 36
    A STARRING ROLE 34 ACE FOUNDATION

  • Page 37
    ... on Parker. He loved everything about visiting an Ace Hardware store, learning the lingo (he's been known to ask customers if they have an Ace Rewards card) and wanting to help customers. At one store the employees showed him how the key-cutting machinery worked, and from then on, Parker was hooked...

  • Page 38
    ... business, you have to , and I feel Ace is the best company to move forward with." progress an walk back into our Spicewood store nd things are operating exactly the same as n I left." "We're happy to jump on a register, whatever is requir at the moment, whatever it takes to help the custome "At...