True Value 2014 Annual Report Download

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PASSION
THE VALUE OF
2014 Annual Report

Table of contents

  • Page 1
    THE VALUE OF PASSION 2014 Annual Report

  • Page 2
    THE VALUE COVER: Co-op member Michelle Deschamps brings her passion for successful retailing to Leeway True Value in North Smithfield, Rhode Island. See page 16 for her full story. LEFT: Kenny Sutton, Superintendent, Springfield True Value Distribution center

  • Page 3
    ... change in progress at True Value. We're laser-focused on three pillars- engagement, growth and efficiency-aimed at taking quantum leaps forward in all aspects of our business, together. That's the value of passion. That's the new True Value. OF PASSION TRUE VALUE 2014 ANNUAL REPORT 1

  • Page 4
    This is our strategy An aggressive action plan designed to create a True Value capable of competing in a dynamic marketplace, today and tomorrow ENGAGEMENT GROWTH EFFICIENCY 2 TRUE VALUE 2014 ANNUAL REPORT

  • Page 5
    ... Retail Excellence Suppliers Vendor Engagement Associates at Stores & TV Co-op Education New Stores Store Growth Store Remodels Wholesale & Retail Pricing Product Assortment Productivity Brand Brand Awareness Omni-channel Capability e-Commerce International International Market Expansion...

  • Page 6
    .... The goal: to create a more effective, more consumer-relevant True Value. IMPACT AREAS KEY INITIATIVES Consumer Marketing Analytics Communication Retailers Retail Excellence ENGAGEMENT Suppliers Vendor Engagement Associates at Stores & TV Co-op Education 4 TRUE VALUE 2014 ANNUAL REPORT

  • Page 7
    ...financial management and more. ENGAGEMENT ASSESS ROADMAP TO RETAIL EXCELLENCE PLAN EXCELLING IN RETAILING'S FIVE Ps CREATES A SIXTH: PERFORMANCE What gets measured gets done Product. Price. Promotion. Place. People. In 2014, we created the Roadmap to Retail Excellence, a tool to help our members...

  • Page 8
    ... at every location. IMPACT AREAS KEY INITIATIVES New Stores Store Growth Store Remodels Wholesale & Retail Pricing Product Assortment Productivity GROWTH Brand Brand Awareness Omni-channel Capability e-Commerce International International Market Expansion 6 TRUE VALUE 2014 ANNUAL REPORT

  • Page 9
    ... better stores, products and assortments; more effective pricing and greater brand awareness. Many more stores We're assisting members with planning new branches and helping new members choose store locations with a sophisticated tool for analyzing trade area dynamics to select the right sites for...

  • Page 10
    ... IMPACT AREAS KEY INITIATIVES Inventory Productivity Supply Chain Optimization Global Sourcing Optimize Logistics Network Data and Technology EFFICIENCY Infrastructure Application Simplification Business Process Simplification & Improvement Improved Processes 8 TRUE VALUE 2014 ANNUAL REPORT

  • Page 11
    ... and other measures-and drive more responsive service. Product development efficiency We reformulated True Value paint in record time to meet exacting third-party test standards and align with consumer preference-at the same member price. EFFICIENCY ANALYZE IMPROVING INVENTORY EFFICIENCY...

  • Page 12
    ... the strategic plan is already driving growth. Over the next few years, we will be making investments to build the co-op for long-term success-the 2014 patronage dividend, issued in March of 2015, was $41.1 million. Our conversion team had a record year attracting new members to the co-op, signing...

  • Page 13
    ... taking shape from the ground up. Sincerely, INTRODUCING OUR STRATEGIC PLAN AT FALL REUNION, 2014 Building the new True Value together John R. Hartmann President and Chief Executive Officer Brent A. Burger Chairman of the Board "WE ARE CREATING OUR OWN DESTINY." TRUE VALUE 2014 ANNUAL REPORT 11

  • Page 14
    ... REVENUE $ IN MILLIONS UP $1,883.8 6.0% $2,014.8 $1,900.0 UP $1,398.0 5.9% $1,495.0 $ 1,411.5 "The next 5 years are going to be some of the most exciting growth years in True Value's history." JOHN HARTMANN, PRESIDENT & CHIEF EXECUTIVE OFFICER 2012 2013 2014 2012 2013 2014 Retail Sales...

  • Page 15
    ... REUNION SPIFFS/RACKING MARKETING REIMBURSEMENTS GROWTH CREDITS & LOANS PROMOTIONAL FREIGHT INTEREST ON NOTES TOTAL CREDITS & DISCOUNTS % OF PURCHASES $ 10,853 $ 33,725 $ $ 3,599 6,207 230 NEW STORES 74 CONVERSIONS 969,000 RELEVANT SQUARE FEET ADDED $ 155,188 8.2% TRUE VALUE 2014 ANNUAL REPORT...

  • Page 16
    ...'re key to our future success. They grew up thinking first of big-box stores for home improvement supplies. We're changing that. With new levels of commitment to a full range of media and marketing strategies, we're creating greater awareness, recall and positive perception of the True Value name...

  • Page 17
    ..., social and search media during peak selling seasons through a smart mix of brand and priceand-item spots. The program includes free circulars to support each event, and members can co-op 100 percent of the distribution costs. Our January coupon book was supported with a television advertisement...

  • Page 18
    ...at Leeway True Value in North Smithfield, Rhode Island, and it captures perfectly owner Michelle Deschamps' passion for the hardware business and the key to the store's success against big-box competition. A true family business Michelle has helped out around Leeway True Value, the store her parents...

  • Page 19
    OUR CUSTOMERS." TRUE VALUE 2014 ANNUAL REPORT 17

  • Page 20
    ... Home Center True Value, located in McKinleyville, a small town in northern California. He saw a problem and he solved it-with a major DTV remodel that drove sales growth north of 30 percent. Contractor heritage Thomas Home Center started out in 1971 as a home construction business. The business...

  • Page 21
    True Value member Lee Rector PROBLEMS." TRUE VALUE 2014 ANNUAL REPORT 19

  • Page 22
    ... and culminated in being the international winner of the Best Hardware Store in Town award in 2013. A three-part future plan With True Value's help, Kenny developed a three-part plan for the future-improve efficiency, expand and grow-and today the company employs 800 people and operates well-lit...

  • Page 23
    True Value member Kenny Yuja, far right, and his wife, Jenny, and their three children INNOVATION." TRUE VALUE 2014 ANNUAL REPORT 21

  • Page 24
    ...national big-box retailers, local hardware stores and the latest market entrant-an aggressive 1,400-location national farm store chain. Ready to compete Wilco is up to the challenge. They opened three new locations in 2014, with plans to open one more in 2015 and another in 2016. "True Value is part...

  • Page 25
    TO SUCCESS." TRUE VALUE 2014 ANNUAL REPORT 23

  • Page 26
    ... of our strategic plan. A key supplier and partner With a name that's synonymous with quality and durability, Milwaukee Tool has long been a key part of True Value's power tool offerings. "We provide the co-op with a very wide range of products," says Shad Hansen, Milwaukee Tool VP of Sales. "The...

  • Page 27
    Tom Simeone, Director, Product Marketing leads product training with Milwaukee Tool sales professionals TO DO THE JOB." TRUE VALUE 2014 ANNUAL REPORT 25

  • Page 28
    ... White REGIONAL DISTRIBUTION CENTER OF THE YEAR Finalists: Cleveland Springfield Woodland Winner: Cleveland PRESIDENT'S AWARD OF DISTINCTION Winner: The Core Strategic Planning Team Andy Balzer Lori Birkey Paul Farber Bill Hancox Michael McCann Mike Novosel Dave Patrizi Jean Saelens Theresa Shea...

  • Page 29
    ... True Value retailers and local clubs. More members partnering with this strong, wellHands-on help, one new home at a time At Fall and Spring Reunions, True Value members, associates and suppliers work on a Habitat for Humanity® project. The co-op and its suppliers also donate truckloads of tools...

  • Page 30
    ... VALUE HARDWARE Killingworth, Connecticut LOUISA HARDWARE Louisa, Virginia MARTENS REEDSBURG TRUE VALUE Reedsburg, Wisconsin STANLEY'S TRUE VALUE HARDWARE Philadelphia, Pennsylvania TABLE ROCK TRUE VALUE Kimberling City, Missouri TRUE VALUE HOME CENTER Mandaluyong City, Philippines TRUE VALUE...

  • Page 31
    ..., Annapolis, Md.1,8 Brian Webb, Neenah, Wis.1,8* Alan Bryant, Oakhurst, Calif.1,8 Thomas Markert, Delray Beach, Fla. 2,8 Kathleen Guion, Austin, Texas2,6,7 Richard George, Elmhurst, Ill. 2,6,7,Ëš Director Designations 1 Store Owner 2 Outside Director 3 Chief Executive Officer 4 Board Chair 5 Board...

  • Page 32
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