Hardware Connection May/June 2022

Make These YOUR Brands

Orgill’s exclusive brands offer exceptional value and competitive features. Choose from thousands of everyday products across a multitude of categories. Build YOUR brand with Exclusively Orgill products!

COMPETITIVE VALUE

Great quality at great prices. Consumer satisfaction guaranteed! Choose the assortment that’s right for you. From pre-designed entire planograms or individual items. You choose! Be more competitive and make better margins!

Lighting, Faucets, Bath & Home Fashion

Watering, Pruning & Lawn Care Products

Raingear & Footwear

Grills & Grilling Accessories

Heaters, Fans, Cords & Electrical

Hand Tools, PTA & More

Christmas & Holidays Housewares

Locksets, Hardware & More

Patio

As Do it Best continues to introduce many innovative new programs unique to the industry, our goal will always be the same — to help you grow and achieve your dreams. A complete store design program overhaul is just one of the many examples, combining modern style, bright open floor plans, and engaging displays to create a superior customer experience. Add a wide range of products and resources with the flexibility to run your business your way, and you see why Do it Best is the first, best, and only choice to move your business forward.

Embrace what Do it Best can do for you. Join the thousands of Do it Best members who feel like they are our only member.

Publisher/Principal: Craig Cope craig@thehardwareconnection.com 804-690-0666

Editor/Founder/Principal: Chris Jensen chris@thehardwareconnection.com 317-514-8864

Marketing & Creative Director/Principal: Dan Akers dan@thehardwareconnection.com 317-797-6609

Founder/Principal: Tom Chasteen tom@thehardwareconnection.com 305-852-6126

Doug Donaldson, Gary Pittsford, John Fix III

By Chris Jensen

Are You Playing in the Game or Sitting on The Sidelines?

Iremember attending a wholesaler show in early 2020. It ended up being the last in-person event I attended for 18 months, since the pandemic kicked in soon after. I was talking with Gary Pittsford—the industry’s foremost authority on business succession and exit planning—and he remarked that the home improvement industry had entered an era of dramatic change spurred by the vast numbers of baby boomers reaching retirement age. Too many baby-boomer retailers didn’t have a formal succession plan or kids interested in taking over, he said, so they would be forced to find an interested buyer or liquidate.

The level of merger and acquisition activity had been on the rise, he added, and would continue to accelerate as more retailers faced hard decisions on exit strategy. Gary added that it was getting to the point where retailers could be grouped into two categories: are you a buyer or a seller?

Two years of pandemic-fueled sales make many stores look attractive with a superficial analysis, but it takes a disciplined approach to make sure you have the proper valuation on a business you’re interested in buying, and more importantly that it’s the right fit to merge

with your company. Everyone looks attractive in the bar until the lights are turned on at closing time.

This month’s issue features an in-depth Special Report on Retail Consolidation: Are You a Buyer or a Seller? Turn to page 30 to learn more about some of the key retailers, and wholesalers, who are active players in the flurry of acquisition activity overtaking the industry. Find out what buyers are looking for in an acquisition and don’t miss more sound advice from Gary, whether you might be a buyer or a seller.

Also, The Hardware Connection is proud to announce that we won a Regional Bronze Azbee Award from the American Society of Business Publication Editors in the category of best feature article-digital for my December 2021 Special Report on the Supply Chain Crisis. The Hardware Connection has now won 15 awards for editorial excellence in the past nine years. The nice thing about these awards is the fact they are based on how well our content meets the objectives of our mission statement and serves our readers, and that will continue to be our focus in the future. n

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Service counts and knowledgeable dealers are part of the STIHL difference. With 90,000 online reviews and counting, STIHL Dealers have an average 4.8 star rating and customers overwhelmingly say they would recommend their dealer to others. Thank you for your dedication and the essential services you provide your community. Together, we are STIHL Strong.

“The staff was helpful in assuring I got the best product to meet my needs.”

— Barry

By Craig Cope

Aren’t You Ready for a Relaxing Getaway?

With the “unofficial start of summer”—Memorial Day—less than two weeks away my mind wanders to a luxurious 5-star resort with sunsoaked white sand beaches and views that extend past the horizon. It can only mean one thing—hosting the 34th anniversary of The Hardware Conference at the JW Marriott Marco Island Beach Resort in Marco Island, Fla., situated on the Gulf of Mexico.

The Conference provides a mix of learning and networking and allows everyone to unwind while enjoying the natural beauty of Marco Island. This year’s event will follow our traditional agenda beginning Thursday, August 18 with the Epicor Technology Forum providing retailers with hands-on training to get the most out of their POS system. Technology Forum attendees receive a full day of training provided by Epicor plus breakfast, lunch and cocktail reception on Thursday. The Technology Forum fee also covers the Hardware Conference registration fee.

Friday features Do it Best Corp. and Orgill luncheons during the day. The night is capped off with the Beacon Awards cocktail reception and dinner awards banquet. The Beacon Awards honors the “Best of the Best” retailers in the industry. Saturday and Sunday provide ample time to engage with key manufacturers

and wholesalers while leaving time to enjoy the beautiful surroundings of Marco Island. Click here to view the full agenda.

Hardware Conference dealer registration is open and hotel rooms are filling up fast. Dealer registration fee is $119 per attendee and includes three cocktail receptions, two dinners, two breakfasts and your choice of activities.

If you wish to take part in the Epicor Technology Forum on Thursday, August 18 the registration fee is $299. Click here to book your Conference registration.

The Hardware Conference has and will always remain a family-friendly, affordable industry event with hotel room rates of $190 per night plus tax. This is a savings of over $800 per night versus the hotel’s normal rate! If you want to extend your stay our special room rate extends from August 15 through August 22 based on availability. Click here to book your hotel reservation at our special rate.

The Hardware Conference is one of the most unique events in the industry. When was the last time you stepped away from your store to reflect and think of ways to improve your business and talk with other store owners throughout the country? The Hardware Conference on Marco Island can be the relaxing escape you deserve. n

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HUMORHARDWARE STORIES

Iguess when you can afford a nice car and a $300 BBQ but you don’t want to pay a small delivery fee—you can’t make this stuff up.

Karla Robson Slavens True Value Hardware Cortez, Colo.

* Originally posted on Hardlines Digest

Crafty Beaver Home Center in Chicago.

Hentschel Hardware in Traverse City, Mich.

Twins Ace Hardware in Arlington, Va.

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– David Carroll, Co-Owner Rice Lumber

How’s

Business?

MIDWEST

Sales and customer counts in 2022? They were slow from January through March, because we had such a long winter. In April, sales and customer counts picked up. But sales and customer counts are about the same as they’ve been the past three years for those months. In the spring, we’ve been doing much better selling grass seed and fertilizer.

What new products are selling well? I put in a straw-hat display, and they’ve been selling great. Those straw hats have been going out the door like crazy. I also have a new display for bird feeders and hummingbird feeders. I haven’t sold those in the past and that seems to be doing well. The new synthetic furnace filters are popular, too.

New initiatives planned for 2022?

I hate to say it, but we’re looking at cutting back some of the staff. It’s been slower and wages are going up, and it’s been tough to manipulate our cash flow. I don’t like to get rid of people, but we’ve looked at ways to save money and there’s

nothing left to cut. I won’t fire or lay off people, but as staff move on we probably won’t replace them. That’s been a tough decision. I’m trying to plan for the future, and I don’t want to be caught with a lot of bills that can’t be paid. I’m also looking for ways to keep track of all the price increases. That’s been a major issue in the past six months. We’ve been working like crazy to keep our prices where they should be based on the market.

Strongest niche categories?

Service. We’ve been here 90 years in this community, and people come to us to ask questions about anything. Our employees are very knowledgeable about household repairs, and we train our clerks to know about the local housing market and age of homes. Our fastener display is the best in southeast Michigan. Car dealerships and auto repair shops come here for our big selection of metric nuts and bolts. We carry replacement plumbing, woodwork and hardware for the older homes in

Mike Frentz is fourth-generation co-owner of business founded in 1932.

How’s Business?

the area. We carry plumbing, faucets and paint and woodwork and screws and nails for older homes. The staff at the Home Depot and Lowe’s three miles away send us customers all the time. Their employees even shop here all the time.

What new technology systems have you adopted? We have an in-house server that runs our RockSolid POS, and we’re thinking about going to the cloud for that. We use the Google Pointy service and that’s been amazing. We can create ads to reach a 20-mile radius, and we’ve had a really good response.

Mike Frentz Frentz & Sons Hardware Royal Oak, Mich.

NORTHEAST

Sales and customer counts in 2022? We’re below last year, off about 12 to 15 percent. We’re still comparable to 2020, and I didn’t expect us to meet our 2021 numbers, but our cash flow is holding strong. The decrease has mainly been because of supply-chain issues. We’re a little bit of a different store with 7,000 square feet devoted to outdoor furniture and grills. In addition to supply-chain issues, price increases might be scaring off some people.

What new products are selling well? Ben Moore paint has been terrific.

Left: Jim Fisher’s parents started Seashore Ace Hardware in 1946.

Right: Seashore Ace Hardware is a destination for outdoor furniture.

The Solo Stoves, too. Yeti coolers are still hot for us. The giftware department has been doing much better as well.

New initiatives planned for 2022? We plan on doing more advertising, especially on social media. That’s probably the biggest initiative. We’re still trying to get enough employees to fill the hours, and payroll has gone through the roof. I run four or five vehicles for deliveries and getting people to do deliveries has been difficult.

Strongest niche categories?

Outdoor furniture and Benjamin Moore paint. Our Ben Moore rep says we’re the single largest seller in his area. Building here remains strong, so we also have a very strong builders’ hardware section, and we’ve gotten pretty heavy into nails.

What new technology systems have you adopted? We’ve been an Epicor store since 1987. We just went with the cloud, and we have Zebra Commerce guns. We’re also looking to get into Apple Pay through Ace. Our credit card machines are also touch free.

Jim Fisher

Seashore Ace Hardware & Outdoor Living Stone Harbor, N.J.

Recent Features From TheHardwareConnection

April 2022: Unlocking the Secret Formula for Growth— Discover how Shanna West has combined her social media savvy with energy and enthusiasm to reach new heights of growth with the family business, H & H Home and Hardware in Marion, Ky.

March 2022: Blackhawk Hardware’s Bold Solution to the Hiring Crisis—Andy Wilkerson, CEO of Blackhawk Hardware in Charlotte, N.C., shares a detailed, in-depth look at how his business adopted a bold solution to finding, hiring and retaining employees—he dramatically changed his pay scale and expectations for performance, which has had a profound impact on the store.

February 2022: Special Section: Orgill Celebrates 175 Years of Innovation and Service—Orgill, the industry’s oldest wholesaler, is celebrating its 175th anniversary this year. Learn more about the company’s long history of innovation, read a timeline of key dates in company history and gain insights into future initiatives through Q&A interviews with CEO Boyden Moore and Executive VP Marc Hamer.

December 2021: Special Report: Supply Chain Crisis: When Will It End?—Find out some of the background behind the supply chain crisis, discover how it has impacted retailers and others in the two-step channel of distribution, and see what experts have to say about when this crisis will end.

November 2021: How America’s Biggest and Best Hardware Store Got Better—It has been nine years since we introduced readers to Hartville Hardware’s massive 305,000-square-foot store in Ohio. Discover how America’s biggest and best hardware store has found new ways to improve. Learn how this impressive retailer has improved in four areas: merchandising, operations, technology and employee training and development.

September/October 2021: Beacon Award Profiles—Read profiles of the 2021 Beacon Award winners: Wood Shed Lumber & Hardware, Carrollton, Mo.; Bomgaars, Council Bluffs, Iowa; Ambridge Do it Best Home Center, Ambridge, Pa., and Bartlett’s Lumber & Hardware, Canadian, Texas.

archive of past issues.

How’s Business?

SOUTH

Sales and customer counts in 2022? Our numbers are up about 5 percent. Foot traffic is up as well as ticket average. With all the cost changes, margins are down, though. This town is smallbusiness friendly, and there are still lots of people working from home who come in and ask for us to help with their projects.

What new products are selling well?

Battery-powered lawn and garden tools. All the 18-volt Makita power tools with batteries. Some other higher-end items such as Traeger grills have done well.

New initiatives planned for 2022? Stay alive. I come from a food and beverage background, and it feels like similar guerrilla warfare now. Because of supply chain issues, I’ve had to buy gas canisters from Lowe’s just to have them available for customers. I’ll have to do a low-price guarantee to show that everything is on sale to earn the customers’ trust. I feel I need to prove that we’re not the highest price in town.

Strongest niche categories?

Plumbing, paint and lawn and garden. We have a pretty unique hardware assortment with odd, hard-to-find nuts and bolts. I have also started carrying local crafts and goods, such as honey, peanuts, barbecue sauce and artwork.

Epicor for Retail solutions equip your team with intuitive tools that streamline operations and drive more revenue and profitability. That’s working with you, for you.

SOUTHWEST

What new technology systems have you adopted? Nothing at all, and I’d like to get less and less. Technology costs more and more money and always breaks down. Right now, I’m battling credit card companies and have spent $40,000 in a year on credit cards fees. The credit card companies’ solution is to charge the customers, but I really don’t want to do that.

Waylon Cain

West Ashley True Value Hardware Charleston, S.C.

Sales and customer counts in 2022? We’ve had some crummy weather, which has hurt sales and customer counts. We’re down about 1,000 to 1,500 customers on the year, compared to last year. Dollarwise, we’re up, but that’s probably because of the price increases. I also think that people are going back to normalcy, so our grill and patio sales have dropped off as people start going on vacations again and not staying in their backyards as much.

What new products are selling well? Definitely the EGO Power+ battery-powered tools. People are really

9- and 12-year models*

West Ashley True Value Hardware opened in November 2016.

Upper: Cornerstone Ace’s engraving machine has turned personalized YETI cups into a niche.

Lower: Colorful flowers highlight the spring selling season at Cornerstone Ace.

making the switch to electric-powered lawncare tools.

New initiatives planned for 2022? Over the past two years, our transactions went up from 80,000 to 130,000, so we’re doubling down on being helpful and focusing on highvelocity inventory to support sales. It’s really more important to have the items in stock, or people will just go down the road.

Strongest niche categories? We’re known for our grills. We have more than 70 grills on display throughout the

salesfloor. Traeger is our number one seller, followed by Weber gas grills. We also have Hasty Bake, which is a local manufacturer that does well here. We also have Big Green Egg and Napoleon grills. Since 2015, we decided to be known for grilling. Two years ago we bought an engraving machine, and that’s been a huge strength. We’re a YETI dealer, so we’ll often sell YETI cups and engrave them. Personalized cups is a neat, little niche.

What new technology systems have you adopted? We’ve always been early adopters to any type of technology. We have Epicor POS and Zebra devices. One of the main things we look for in technology is to make it easy for employees to onboard. We

have quite a few online orders each day, and we encourage our customers to use the Ace Hardware app on their phones. Caleb Potter

Cornerstone Ace Owasso, Okla.

WEST

Sales and customer counts in 2022? Overall, we’re about steady with last year. This past month our sales were down about 5 percent from last year. We realize that this year’s sales were so much higher because of pandemic spending on lawn and

Point of Sale Your Way.

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15 Awards in the Past 9 Years

Award-Winning Editorial That Connects with Retailers!

The Hardware Connection has won 15 awards for editorial excellence in the past nine years including the following:

• 2022 Bronze Regional Azbee Award for Web Feature Article from the American Society of Business Publication Editors.

• 2021 FOLIO Eddie Awards (Honorable Mention) for Best Profile and Best Single Article.

• 2020 FOLIO Special Recognition Award for Overall Editorial Excellence.

• 2020 FOLIO Eddie Award for Best Single Article.

• 2020 FOLIO Eddie Award for Best Series of Articles.

• 2020 FOLIO Special Recognition Award for Editor of the Year.

• 2020 Regional Bronze Award for Best Individual Profile from the American Society of Business Publication Editors.

• 2017 Eddies Digital Award from FOLIO for Best Standalone Digital Magazine in the B2B category.

How’s Business?

garden. So, we were expecting to be a little bit down. Customer counts are down about the same, at least for April. But January through March, they were steady compared to last year.

What new products are selling well? We’re pretty straight hardlines. We stick with plumbing and electrical supplies. However, I’ve seen that some of the new, battery-powered lawn and garden tools are selling well. The EGO Power+ brand electric tools have done well.

New initiatives planned for 2022? We’re looking to expand the EGO Power+ line of outdoor power tools. Other than that, we’re trying to find people willing to work retail and get them to show up for work.

Strongest niche categories? We’re deep in plumbing and electrical. Contractors know we have the plumbing and hardware they need. What new technology systems have you adopted? We recently ordered digital bin tags. We found that with costs continuing to rise that we just don’t have the bodies to keep constantly changing the prices. Labor is a premium, so we’re hoping the digital bin tags can help. Plus, spending time changing prices takes away from serving customers.

Jeff Roark Pete’s Ace Hardware Castro Valley, Calif.

Upper: Linda, Jeff and Jason Roark represent the third and fourth generation of the family to run Pete’s Ace Hardware, founded by a Hungarian immigrant in 1926.

Lower: Lawn and garden sales at Pete’s Ace were through the roof during the pandemic.

HARDWARE PRODUCTS REVIEW ShopTalk

PRODUCT #1:

PREMIUM BATTERY LINE PROCELL

By Craig Cope

In 2020, the North American battery market was valued at $22.5 billion and expected to grow at an annual rate of 10.5 percent through 2027. It seems all the attention is focused on either electric vehicles (EVs) or the consumer electronic markets. However, one market that seems to fly under the radar is the professional market. Procell, a division of Duracell, is looking to provide hardware stores with the products and resources to service this valuable industry.

Procell is a premium battery that exclusively serves the professional market. What sets Procell apart from the consumer market is the focus on “device-specific” applications for the hospitality, medical, infrastructure, industrial and safety/security markets. The power needs for a smoke detector (constant drain) are completely different than a paper towel dispenser (high drain). This device-specific approach extends the life of the battery. While extending the battery life does yield a cost savings, the real savings is realized in the reduction of labor required to change the battery. Labor accounts for 72 percent of a large commercial facility’s battery replacement cost. Click here to view a company video on the cost of battery replacement.

Procell’s full product line includes Alkaline Intense Power & Constant Power, Lithium Coin and High Power Lithium in standard sizes: AAA, AA, C, D, 9V, 2032, 2025, 2016, 123 and CR2. Click here to view the entire line. Explore the product pages for descriptions, features, recommended device usage and data sheets. Procell has also created an impressive suite of tools to help retailers educate

professional market on the potential total cost savings of using a devicespecific battery vs. a consumer brand battery – click here to view. They also offer additional calculation tools only available by contacting a Procell representative.

We supplied Procell batteries to local hotel owners and one commercial property company. Although not a scientific experiment, all testers reported longer life and better performance of their battery-powered devices in a wide range of applications— hotel door locks, paper dispensers, flashlights, etc. Prior to providing the samples we utilized Procell’s tools to help educate the property owner on the total potential cost savings. One owner’s quote summed up the Procell advantage: “With today’s economic conditions we are constantly looking for ways to lower our overhead, but never once thought to analyze our total battery replacement cost. We just bought the cheapest batteries we

Labor costs may account for 72% of a large commercial facility’s battery replacement costs. 72% Annual savings of 36% on the total battery replacement costs for an office of 500+ people are achievable.

Choosing the right batteries can mean 75% fewer batteries are used each year in a large commercial facility. 75%

could find and thought we were saving money.”

If your store services the professional market or you are looking to enter the market, contact a Procell representative to learn more about their products and resources to help make you successful. Click here to see a video on how these batteries fit in the industrial sector.

PRODUCT #2: SIKAGARD ® VINYL MAT/LINER SIKA

A floormat is more than just a decoration at the front of a home/business. The floormat helps prevent dirt and moisture from entering the structure, but it also provides traction if the surface is slippery or wet. However, not all floormats are created equal in both quality and performance.

Sika recently introduced the Sikagard ® Vinyl Mat/Liner that can handle the simplest of jobs to the most demanding. The vinyl mat/liner is designed for both interior/exterior applications, is impact/weather resistant, porous for quick drainage,

ShopTalk

and high traction certified by the National Floor Safety Institute (NFSI).

The mats are also easily trimmable, enabling customization to fit almost any application including steps, walkways, garages/sheds, exercise rooms, boats and more. Click here for additional product information. Click here to view a company video showing the countless uses for the vinyl mat/liner.

Considering the virtually limitless applications, we decided to supply samples to a wide group of testers for both commercial and residential use. While all testers reported the mats performed flawlessly, it was

the range of uses that grabbed our attention. One tester used the mat to stop plastic gas cans from sliding in a truck with a spray-in bedliner. Another tester lined the floor of an outdoor shower taking advantage of the mat’s anti-mildew feature.

The ultimate test came from a commercial boat captain who operates a marine towing and salvage company. Foot traction is critical and can be the difference between staying in the boat or going overboard. The captain reported the mats increased his traction on the wet fiberglass and reduced the impact of rough waves at sea. We may revisit this review in one year

to see how well the mats held up in the harsh marine environment and blazing South Florida sun.

Sika’s Sikagard® Vinyl Mat/Liner is an outstanding addition to any hardware store. Its application is only limited by the customer’s imagination.

PRODUCT #3: HAMMERLESS HINGE PIN REMOVER MAYHEW TOOLS

Growing up in a DIY home I often heard the phrase, “the right tool for the right job.” I quickly learned that using the “right tool” makes a project easier and faster, and delivers better results. We recently had the opportunity to test such a product using Mayhew Tools’ Hammerless Hinge Pin Remover.

The Hammerless Hinge Pin Remover is part of a new line from Mayhew Tools featuring 10 springassisted punches and chisels all designed for specific applications. The line of tools can mark, cut, start and set in both wood or metal. All products remove the need for a hammer and deliver 3,500 lbs. of striking force per impact. Removing the hammer provides added safety, accuracy and the ability to work in tight spaces where swinging a hammer is difficult, if not impossible.

Click here to view a company video reviewing the new line. We provided the Hinge Pin Remover to a group of DIYers for testing. Each one of our testers questioned if a springassisted tool could even remove a hinge pin let alone one that has been in service for years. All testers reported no issues removing door hinge pins, but also commented on how convenient it was not to use a hammer. One tester commented about an experience with a traditional punch/ hammer that resulted in door frame damage from an errant hammer strike. Regarding those older hinge pins, one tester noted shooting the pin completely out of the hinge and across the hallway!

The Mayhew Hammerless Hinge Pin Remover is made in the USA and features a lifetime warranty. Mayhew Tools, founded in 1856, is one of the oldest punch and chisel manufacturers in the U.S. and has delivered another outstanding product line to its impressive portfolio. The entire springassisted line makes a great addition to any hardware store looking to carry “the right tool for the right job.” n

Retail Consolidation Is Heating Up: Are You a Buyer or a Seller?

Retail consolidation has been a trend boiling above the surface for decades, but merger and acquisition activity accelerated during the pandemic and has shown no signs of slowing.

The confetti was still falling to ring in the New Year of 2022 when a flurry of deals were announced. The owner of Pague & Fegan Hardware bought Ritter’s True Value in Mechanicsburg, N.Y., on January 3. Rocky’s Ace bought Karp’s Hardware in Stamford, Conn., on January 4. Builders FirstSource acquired National Lumber’s 19 New England locations on January 5. TAL

Holdings acquired Bayview Building Materials on January 13, followed by Midway Building Supply on February 7 and Orofino Builders Supply on March 14. Central Network Retail Group acquired HomeFront Home Improvement Center’s two Mississippi stores on February 7.

Hang on to your hat, as the deals keep closing to reshape the retail landscape. The total number of home improvement stores may be holding steady, but the number of retail companies is shrinking as multi-store operators flex their muscle and expand their reach.

Owners of the two companies gathered in January after Rocky’s Ace bought Karp’s Hardware. From l to r: Johnny Falcone, David Fogel, Megan Fogel and husband Marc Fogel, Donna Falcone and Rocco Falcone.

The most interested observers are the wholesalers and co-ops, who have long been fearful of how an industry filled with aging retailers will successfully transition to a new generation of owners. The average age of hardware store owners is approaching 60, yet too many find the next generation is uninterested in taking over the business and qualified local buyers are often hard to attract. The response—at least from Ace Hardware, Do it Best and Orgill—has been to join the fray with ready-made solutions. Those Ace members who can’t find another Ace retailer to buy them can always turn to Westlake Ace. Do it Best has partnered with Nation’s Best Holdings to facilitate acquisitions within the Do it Best family, while a number of Do it Best members are in acquisition mode including Gillman Home Center, Mead Lumber and TAL Holdings. Orgill utilizes Central Network Retail Group to not only acquire top-performing retail companies (in and out of the Orgill family) but also to act as a lab to test retail best practices that can be shared with Orgill’s customer base.

TAL Holdings acquired Midway Building Supply in February 2022.

The farm and ranch sector underwent a shakeup last February when Tractor Supply Company acquired Orscheln Farm and Home, which operated 167 stores in 11 states. After that all-cash transaction for $297 million, the nation’s largest rural lifestyle retailer widened its lead against the rest of the field.

As the merger and acquisition activity heats up, hardware and home improvement retailers are increasingly forced to evaluate—am I a buyer or a seller? Read on to learn how this trend is playing out across the industry.

LBM SECTOR LEADING THE WAY

Pro-oriented, residentially focused construction supply companies acquired 671 locations and opened 154 new locations in 2021, capping one of the busiest years ever for lumberyards, specialty dealers and related firms, according to Webb Analytics’ 2021 Deals Report. The report counted 148 mergers and acquisitions last year by 73 entities, which is a 21 percent increase over the number of LBM sector deals in 2020.

“One-sixth of last year’s openings, as well as 78 percent of the largerthan-usual 67 closings, stem from what has happened since Builders FirstSource and BMC merged in 2020,” said Webb Analytics President Craig

SPECIAL REPORT

Webb. The combined company boasts a presence in 44 of the top 50 metro markets with 550 distribution and manufacturing locations across 42 states.

Since its founding in 2009 with 16 locations, US LBM has made more than 70 acquisitions and now operates 463 locations in 37 states. US LBM pursues strategic acquisitions that are culturally compatible and meet the company’s growth and business model criteria. According to the company website, ideal partners are distributors that already hold leading market positions in the local markets they serve with strong management teams.

The 2021 Deals Report is downloadable for free at www.webbanalytics.com, as is the 2022 edition of the Construction Supply 150, a detailed report on the size, scope and plans of the LBM’s top pro-oriented companies.

For Webb’s report on how three of LBM’s most acquisitive firms—US LBM, Nation’s Best Holdings and Kodiak Building Partners—value companies and predict what’s to come, click here.

AUBUCHON ADOPTS MULTI-BRAND STRATEGY

As a Century Club retailer that was founded in 1908, Aubuchon Hardware has aggressively entered the acquisition sector to the point the company needed to rebrand. After acquiring Lyndonville Hardware

Lumber & Building Materials in Vermont in December 2019, it didn’t make sense to rebrand that store as Aubuchon Hardware, since it carried lumber and building materials.

Additional purchases soon followed of Village Hardware in Virginia, and four True Value stores in Pennsylvania, as the company recognized the importance of adopting a multi-brand strategy.

In February, the company announced it would now be known as The Aubuchon Company, even though many of its stores would still be called Aubuchon Hardware.

“For us, being a multi-brand company means marketing multiple similar, yet distinct brands to customers. We believe our new multibrand strategy will allow us to discover new markets, better serve customer needs and increase sales,” the company stated.

“As we celebrate 114 years as a private family company, we look ahead to the next generation. Our goal is to build the strongest group of local hardware stores, and more often than not, we find the best stores locally branded and rooted in history. Thinking of ourselves as ‘The Aubuchon Company’ vs ‘Aubuchon Hardware’ is one of many meaningful steps we are taking to be the buyer of

choice for these great companies— pushing away from our own track record of homogenization to shine all the light on our local brands (including ‘Aubuchon Hardware’) because we believe local matters more,” said Will Aubuchon IV, president and ceo.

WHO ARE THE TOP BUYERS?

Aubuchon’s decision to pursue acquisitions dates back to 2017, the year the company decided to stop operating its own distribution center. Once they realized they weren’t restricted to operating exclusively in the Northeast, the company ended

Source: Webb Analytics’ The Construction Supply 150, company reports, research by The Hardware Connection Footnotes:

* Denotes sales estimate

1 ARH includes Westlake Ace Hardware: 151 stores in 12 states; Great Lakes Ace: 59 stores in 4 states.

2 Does not include wholly owned subsidiary R.P. Home & Harvest: 22 stores in 4 states.

Team members of Cornell’s Hardware and The Aubuchon Company gathered for a dinner to celebrate the agreement to combine operations.

up buying stores in Virginia and Pennsylvania.

In a deal announced May 10, 2022, The Aubuchon Company reached an agreement to acquire a fellow Century Club member—Cornell’s Hardware in Eastchester, N.Y., operated by thirdgeneration owners John Fix III, Mary Beth (Fix) Wellington and Thomas Fix.

“The Fix family has owned and operated Cornell’s Hardware for nearly 100 years, serving the home repair and improvement needs of friends and neighbors with a passion for personal and attentive service,” said Aubuchon. “John, Mary Beth and Thomas all care deeply about their customers and staff, and we promise to do the same.”

“Our grandfather took over Cornell’s Hardware in 1932 from the Cornell brothers (Charlie and Bailey), because they had no next generation to take over as they neared retirement. Some of our children have worked in the hardware store at various points in their lives, but none got the hardware bug,” said John.

“Much like the Cornell brothers wanted to be sure that their hardware

store continued to serve their community after their departure, we also want to be sure that Cornell’s Hardware continues to serve our town as we move forward looking for other ways to be of service to the community,” said Thomas.

“We embarked on a search for a suitable partner to take Cornell’s Hardware into the next 100 years, and we feel we have found the perfect match in The Aubuchon Company,” said John.

The store will continue to operate as Cornell’s Hardware, and the Fix family will continue to be involved in various roles as employees of the Aubuchon Company. “It’s an honor to carry on the legacy of Cornell’s Hardware,” said Aubuchon.

In a post on the Hardlines Digest chatroom that he runs, John said, “We spoke to potential buyers that were planning to keep the Cornell’s brand and some who were looking more at a cookie-cutter Ace/True Value planogram store. We didn’t have as much appeal to those looking for the planogram approach since our product mix is very eclectic and tinkering with it would likely not be accepted by the customer base.”

WESTLAKE ACE EXPANDS REACH

Century Club retailer Westlake Ace Hardware has been a wholly owned subsidiary of Ace Hardware Corp. since 2012. Over the past decade the

company has used acquisitions to expand its territory beyond its roots in Kansas, Oklahoma, Iowa and nearby Midwest states.

Some of the store brands that were acquired like Haggerty’s Ace in New York were rebranded as Westlake stores, while other acquisitions have retained their previous store brand like Outer Banks Ace Hardware in North Carolina, Ace Hardware of Chico (Calif.) and Buikema’s Ace Hardware in Illinois.

Westlake has expanded into Washington state through three acquisitions. In 2018, they acquired five-store Dennis Company Ace, which dates back to 1905. Then in February 2020 the company acquired single-store North Bend Ace Hardware in North Bend, Wash. Those six stores retained their original store identity, but two Town Center Hardware locations that were acquired in early 2021 were rebranded as Westlake Ace stores.

“We are excited to continue Town Center Hardware’s outstanding tradition of customer service in Kirkland and Lake Forest Park,” commented Joe Jeffries, president and CEO of Westlake Ace.

LOOKING BACK AT RECENT DEALS

The Hardware Connection has chronicled a flurry of acquisitions. Here is a look back at some of the deals over the past 15 months.

• Aubuchon Company Acquiring Cornell’s Hardware

• Nation’s Best Acquires Sparr Building and Farm Supply

• Handyman Ace Hardware Acquired by Rocky’s Ace Hardware

• Nation’s Best Acquires Weiss Do it Best Lumber of Arkansas

• CNRG Acquires HomeFront Home Improvement Centers

• Bliffert Lumber & Hardware Merges with Oostburg Lumber

• Aubuchon Company acquiring Delray Plus

• CNRG Acquires Frattallone’s Ace

• RP Lumber Acquiring Alexander Lumber

• RP Lumber Acquires Stock+Field

• Nation’s Best Acquires Hometown Hardware

• Nation’s Best Acquires BTU Do it center

R.P. RESCUES 22 STORES

R.P. Acquisition Corp., a wholly owned subsidiary of R.P. Lumber Co., acquired the assets of the Stock+Field family of stores after the company filed

R.P. Acquisition Corp. saved 22 stores from closing when it acquired the assets of Stock+Field and rebranded them as RP Home & Harvest.

for bankruptcy in January 2021 and announced plans to close its stores. This saved over 800 jobs across 22 store locations.

“We recognized that the loss of these stores would leave a difficult hole to fill in each of their local communities,” says Jason Plummer, president of R.P. Acquisition Corp. “Retailers like Stock+Field provide many jobs and are often one of the top contributors of tax revenue in local communities, thus serving as a cornerstone for local economies.”

After a renaming contest attracted 3,000 entries from customers, the locations were rebranded as R.P. Home & Harvest in fall 2021. “These locations have a decades-long tradition as part of the fabric of the community,” Plummer says. “We love

the farm and ranch space, but perhaps even more importantly, we saw this as an opportunity to invest in rural America, contribute to the growth of these great communities and help keep many good, hard-working people employed.”

Locations were remerchandised with assistance from Orgill and redesigned with new fixtures, LED lighting, new parking lots and paint. Company-wide sales are 13 percent above 2022 projections.

CNRG TARGETS TOP OPERATORS

Central Network Retail Group (CNRG) was founded in 2011 by Jimmy Smith of Natchez Home Center and Boyden Moore of Tyndale Advisors, joined a few months later by Doug Gregory of Morrison Terrebonne Lumber. CNRG’s vision has been to bring together some of the best retail operators in the home improvement industry with complementary strengths to take advantage of synergies through leveraging supply chain relationships and administrative expenses.

The company has grown quickly but strategically with acquisitions such as Marvin’s Home Centers (28 stores) in 2015, McLendon’s Hardware (7 stores) in 2017, Mac’s Hardware (14 stores) in 2018 to more recently HomeFront Home Improvement Centers with two stores in Mississippi, which was acquired in February 2022.

Along with his two sons, Larry Frattallone, who founded Frattallone’s Hardware in 1975, sold the company’s 22 stores to Central Network Retail Group last November.

One of their biggest deals to date came last November when it was announced that Larry Frattallone, founder and operator of 22-store Frattallone’s Ace Hardware in Minnesota, and his two sons, Tom and Mike Frattallone, had agreed to sell their business and operating assets to CNRG.

“Our family is excited to be partnering with an industry-leading retailer like CNRG,” said Larry, who opened his first store in 1975. “Frattallone’s and CNRG are a great fit. We both understand the importance of taking care of customers and operating first-rate local hardware stores. Tom, Mike and I have worked hard to build the Frattallone brand in the Minneapolis/ St. Paul area and I am very comfortable knowing CNRG will maintain and grow what we have built together.”

Frattallone’s Hardware & Garden became the 18th brand operated by CNRG. Their most recent store opened in January 2021 in Little Canada, Minn.

The brand is known throughout the Twin Cities and operates the largest small engine repair shop in the area.

“We are thrilled about the opportunity to work with the Frattallones,” said John Sieggreen, CNRG president. “Their reputation in the Twin Cities is unparalleled. There is so much we will be able to learn from them and apply to our other brands throughout the company.”

Mike Frattallone, who handles dayto-day operations for Frattallone’s, commented at the time of the deal, “Our team of associates is excited about partnering with CNRG and gaining access to new products, technology and retail programs that can help them take care of our loyal customers even better.”

After the deal closed, Mike and Tom Frattallone joined the CNRG team to play key leadership roles for both the local Frattallone’s brand and CNRG.

NATION’S BEST PARTNERS WITH DO IT BEST

Nation’s Best was started by Chris Miller as a holding

Chris Miller is president and CEO of Nation’s Best Holdings, which has quickly grown to 28 stores.

SPECIAL REPORT

company in 2019 after he realized small independent businesses in the industry were facing challenges with succession. Miller, an industry veteran with prior experience as president of Parker’s Building Supply and vice president of operations for US LBM, saw an industry that was consolidating rapidly and he felt smaller companies needed to find a way to stay relevant in a market increasingly dominated by large players.

In August 2020, Do it Best Corp. announced a joint venture with Nation’s Best Holdings, which at the time had 10 stores in three states.

“In the highly competitive home improvement business environment, growth is an absolute imperative,” said Do it Best President & CEO Dan Starr. “We are committed to fueling growth in ways that drive sales today and position the cooperative for sustained growth over the long term. To continue that momentum, Do it Best entered into a joint venture with Nation’s Best Holdings.”

Sparr Building and Farm Supply’s four locations in central Florida have been acquired by Nation’s Best Holdings.

The investment in Nation’s Best Holdings aligned Do it Best with a retailer committed to building a nationwide network of independent stores. Miller is focused on building a premier hardlines and LBM business by acquiring outstanding hardware and lumber businesses throughout the United States.

Nation’s Best has been busy executing a number of acquisitions including Sparr Building and Farm Supply, Weiss Do it Best Lumber and Woodland Building Center this year.

As part of Nation’s Best’s acquisition strategy, these retail brands maintain operations under their existing names with their key leadership teams overseeing company operations alongside Nation’s Best, which provides the strategic and financial support necessary to drive optimal growth and profitability.

HOW CNRG APPROACHES ACQUISITIONS

Founded in 2011 and based in Collierville, Tenn., Central Network Retail Group (CNRG) is a multi-format, multi-brand company operating 141 hardware stores, home centers and lumberyards in 16 states across the U.S. John Sieggreen, president of CNRG and executive vice president-retail for Orgill, shared insights into how CNRG approaches the acquisition process.

1. CNRG continues to take a measured approach with its acquisitions. Have you seen an increase over the past 2 years in the number of retail companies approaching CNRG about an acquisition?

I would say the deal flow has been steady and increasingly active of late. When the pandemic started, we had a lot of questions about what that would do to the market for acquisitions. We also had a number of questions about how the deal market would “adjust” earnings for the impact of the pandemic. Of course, at the time, we didn’t understand what the net impact would be on earnings or what way we would be adjusting. We all found out quickly that, for the industry and most dealers, stimulus funding and consumers’ focus on their homes led to a surge in top and bottom-line performance.

For acquisition activity, this has created two phenomena: 1) some retail companies (sellers) have determined that

the results of the past 2-3 years have created a unique opportunity to consider selling their businesses; and 2) other retail companies (buyers) have determined that the balance sheet improvement created by strong financial results and PPP funds has created a unique opportunity to consider expansion through acquisition.

John Sieggreen

2. What does CNRG look for when deciding whether a retail company is a good fit for an acquisition and has the pandemic changed any of the factors you consider?

We haven’t changed any of the factors we consider because of the pandemic alone. Our key factors have always been that we want to partner with companies that have built a strong, profitable business and developed a brand that resonates with customers in the market where the business operates. Because CNRG functions as the “laboratory” for the retail programs Orgill suggests for its dealer base, it is deliberately multi-format. This means that the universe of acquisition targets may be somewhat larger for CNRG than for a potential acquirer with a very narrow set of criteria for whether an opportunity might be a good fit.

The other major criterion we look for in an acquisition is the quality of the management structure and store team(s) in place at the target. The correlation between this factor and the financial and

SPECIAL REPORT

brand strength I mentioned above is obvious. We don’t have a bunch of people waiting in the wings to take over day-to-day operations at an acquired business, nor would we want to work to that goal. We need and expect the local team to continue delivering the same quality of customer experience postacquisition as they have done all along.

We have typically not focused on turnaround situations because of the disproportionate amount of work such acquisitions often demand, but there have been some selected exceptions to this. The exceptions typically come when there is some unique aspect of the business we believe we can leverage in a way the previous ownership could not, or chose not to.

Finally, we always ask ourselves whether we will be able to provide adequate support for the acquired company, based on how the target company fits into our current footprint. For example, we may be presented with a single-store opportunity that we pass on because it is located at a meaningful distance from any of our existing brands. If, however, we are able to fold that same store into one of our existing brands, it can create immediate and powerful synergies.

3. Once you have acquired a retail company and brought it within the CNRG family, where are you having the most success finding synergies and how dramatic are some of those improvements?

The places where we initially focus our energy after making an acquisition are the “back room” or non-customerfacing parts of the business. Examples of this might be payroll processing, liability or casualty insurance, or accounting process and software. In many cases, we also guide the business through a conversion process, wherein we shift to Orgill as the primary hardlines supplier to the business, if it wasn’t already.

Conversion to Orgill drives tremendous synergies for the business but it is challenging to accomplish because it touches so many aspects of the store’s operations: data, merchandising, product preference, etc. Depending on the situation, the conversion can happen gradually or will sometimes need to be more immediate. Of course, we do our best to avoid disruption to the business.

In the medium term, we look to layer in some of the technology offerings that have proven valuable to CNRG’s brands and other Orgill dealers, such as ecommerce or the Fanbuilder loyalty platform.

And then, longer term, we may consider other enhancements to the business, such as making more significant changes to the store layout, adding new product categories, or store relocations and additions. We always, however, make these decisions in a collaborative environment with our people at the brand level, both legacy ownership and local management.

ARE YOU BUYING OR SELLING A BUSINESS?

By Gary Pittsford, CFP®

Many store owners across the country have a good feeling about their business and are seriously beginning to look for a buyer, because the last three to five years their company has done well and they are finally ready to transition the business to someone else.

At the same time, many store owners that want to grow their organization are aggressively looking for that second, third or fourth store to add to their company. Over the last six to eight years, I have seen a lot of business owners that had one store and now they have four or five stores. There are a lot more multistore owners across the country than there used to be, as the hardware industry is definitely going through a consolidation phase.

ARE YOU A SELLER?

If you are seriously thinking about transitioning your company to a new owner and letting them run it for the next 30 years, then there are a few key items that you should be looking at for your company.

First, you want to make sure that your balance sheet and profit and loss statement is accurate for the last

three to four years. If you think that the inventory is not accurate or loans from stockholders or loans to stockholders are not accurate, then prepare a short memo and explain what the correct numbers should be.

Second, work on your profit and loss statement. Try to increase your gross margins 1% or 2% each year for the next two or three years. Also, try to reduce expenses 1% or 2% each year for the next three years. By increasing gross profit income and decreasing expenses by a few dollars each month, you are drastically adding a lot of value to the business.

Third, make sure your employees are well trained and that they have the right job that fits their personality and that their salary and benefits fit their position at the company and their years of service.

If you are selling to another store owner in your industry, then the negotiations are usually more detailed, and the due diligence done by the buyer goes into more detail.

ARE YOU A BUYER?

There are more buyers today than there were 20 or 30 years ago. There are more multiple store owners than ever before. There are also several large companies that own a hundred

stores or more. All these organizations are speeding up their activity to buy the retail stores that have been run by baby boomers for the last 30 years.

If you are a buyer, you are probably looking for a retail hardware store that has sales of $1.5 million to $4 million. When you do your due diligence, you are going to be looking for the company that has the highest gross margin and excellent profitability. You may also be looking for a special situation such as a store that is bigger than normal in lawn and garden, or a commercial/contractor business.

You have probably groomed one or two key managers that can take over a store, but it is also important for the company you are buying to have excellent employees.

In your due diligence, I know that you are going to look at tax returns, profit and loss statements, and balance sheets for several years. Or perhaps you will review a valuation report prepared for the seller summarizing all that financial data.

When buyers are meeting with the sellers, I would suggest that you try to listen carefully to what the seller wants. Many times, the seller may be flexible in how the transaction is structured. Paying all cash at closing is expensive for the buyer and it may not be the best option for the seller.

If the buyer is talking to a seller that has a C corporation, be creative and

help the seller minimize taxes. Many times, these ideas are not only good for the seller, but also good for the buyer. Does the seller own the real estate and are they willing to lease it under reasonable terms?

As a buyer your due diligence will take some time. You want to look at every item on the balance sheet and every entry on the profit and loss statement.

As a buyer you are wanting to nail down exactly what the assets are that you are buying, and you also want to know what is the usable cash flow of this company, or what accountants call EBITDA.

Once you know what the real cash flow is, then you know how to structure the sale and you also have accurate information that you can give your bank if you are going to be getting a loan for part of the purchase price. n

Gary Pittsford, CFP®, partner/chief valuation officer at Creative Planning, has helped hundreds of family business owners with business valuations, exit planning, estate documents, retirement income security and protecting their net worth over his more than 45-year career.

Retail Technology Trends Shaping the Future: Part II

By Chris Jensen

Busy Beaver Building Centers recently opened its 25th neighborhood home improvement center in Delmont, Pa. Formerly a movie theater, the 44,000-square-foot store features an array of state-of-theart technologies. It is the first home improvement center in the United States to fully use Pricer electronic shelf labels (ESL), a system that provides greater pricing accuracy by electronically maintaining the price signage. Imagine never having to worry about price changes or losing margin when prices aren’t updated promptly.

Further automation at Busy Beaver’s store comes in the form of Badger Technologies’ autonomous robot equipped with Badger® Retail InSight software, which scans the entire store every day and alerts management to out-of-stock and misplaced products. Robots can help with other inventory

Upper: Bella in Aubuchon Hardware’s Ipswich, Mass., store is sporting the new Theatro communication system.

Lower: Busy Beaver’s new store in Delmont, Pa., is the first in the U.S. to fully use Pricer electronic shelf labels.

management functions like zero auditing and cycle counting and Badger Technologies is working on ways these machines can help put away freight. Both technologies relieve the staff of time-consuming tasks and give them more time to service customers. In addition, the ESL system and robot

TECHNOLOGY TRENDS

significantly speed up the handling of online orders, a popular shopping option at all Busy Beaver locations.

“Technology is a key imperative in our mission to be the favorite home improvement center in the communities we serve,” says Adam Gunnett, Busy Beaver’s director of IT and marketing. “We relentlessly look for innovative ways to increase efficiencies and empower our associates to provide legendary customer service.”

If you missed it, click here to see Part I of “Retail Technology Trends Shaping the Future” from the April issue of The Hardware Connection. Read on to gain more insights into retail technology trends.

INVESTING IN THE FRONTLINE

Will Aubuchon IV, president and CEO of the Aubuchon Company—a Century Club retailer with 107 stores in eight states—gave a presentation at Orgill’s 2022 Technology Symposium on “Investing in the Frontline.” Click here to watch the video.

He stated, “Never has there been a more important time for us to be investing into the frontlines, saving people time on their everyday mustdos, so they have more time for the good stuff like helping customers.”

As detailed in Part I, Aubuchon Hardware has been testing Theatro, a voice-powered platform designed to connect frontline employees. The company is in the midst of rolling this

out with a goal to have in all stores by the end of this year. “You cannot use it without an earpiece and it is not using radio frequency. It is using our Wi-Fi network in our stores. We had to invest significantly in improving Wi-Fi networks in our stores to make Theatro work,” Aubuchon said.

He points out, “When an employee shows up to work, they look themselves up in the system, find their name and pair the communicator ID on the back of a charged communicator with their name. That’s how the system knows who’s who.”

So far, the number one benefit of Theatro is eliminating the party line— there is less chatter, according to Aubuchon. “You can have a one-to-one conversation with anyone else in the store. In our beta stores, two-thirds of all messaging through Theatro was oneto-one communication. We eliminated two-thirds of noise and chatter. One-toone communication is also critical for reducing walk-to-talk time. You can do a manager huddle message every day that goes to any employee clocking in, making sure everyone is on the same page for the day,” he said.

Only 15 percent of employees at the Aubuchon Company have email, because they’re on the frontlines and don’t work at a desk, Aubuchon pointed out. “That leaves them in the dark too often. We can send leadership messages to everyone in our company.

It helps us celebrate birthdays and anniversaries. We can send helpful alerts in real time to the whole store or to certain individuals,” he added.

The Theatro voice platform lets the appropriate staff discover a new online order has arrived or to confirm a curbside arrival or a propane fill. “Imagine being the cashier and ringing up a loyalty member at the register but they don’t have an email address on the account. The cashier gets a prompt in her ear saying this is one of our best customers, please ask for their email,” Aubuchon said.

“There’s a real opportunity with freight and stocking. You can use voice technology to break down that freight and put it away efficiently.”

Handheld devices are another key retail tool in use at Aubuchon Hardware. “We are currently using a device from Janam that runs multiple apps, but there are other great companies like Motorola,” Aubuchon said.

Aubuchon’s handheld device is called Elvis and its app is Taking Care of Business (TCB), which was the name of Elvis’s band, Aubuchon pointed out. “Being able to clock in and out with the Chronos time-tracking app is something we want to enable. Think of it as a real-time chat feature, connecting everyone in the company to share ideas on merchandising, displays and visual images,” he said. “Capture app enables everyone on the frontlines to capture images and videos, creating content for

Will Aubuchon IV, CEO of the Aubuchon Company, outlined how frontline employees can be supported with technology tools.

social media channels. That is critical for us moving forward and we want to empower everyone on the frontlines to be part of the process.”

Aubuchon’s TCB app has functions such as Product Info, Online Orders and Tasks. It has a scanner that works well. “We want everyone on the frontlines to get any info available about a SKU. We have employees manage online orders with Elvis and we’re currently focused on the curbside experience,” Aubuchon said.

This spring the company plans to roll out a project they have been working on for a while with Feynman Group—Tasks. “We want to get rid of clipboards, paper and handwritten work lists. Imagine having a Bluetooth finger scanner attached to Elvis. You’ll be able to scan an item and get the aisle, bay and slot sent to Theatro hands free so anyone can put away freight in a hardware store. We have to streamline tasks for the frontline,” he said.

Every employee should start his or her day with a work list, according to Aubuchon. “Managers should walk their stores every day using Speak to Text function to create tasks. They can

TECHNOLOGY TRENDS

add an image to the task. Tasks can be assigned to an individual employee or to the pool. Any employee can go into pool, grab a task and complete it. They can now print bin tag labels on the sales floor,” Aubuchon said.

Adopting all this technology does cost a lot, Aubuchon admitted, from upgrading wireless and networks, investing in hardware and developing apps. “The one-time cost to get Theatro and Elvis going is $24k a store and $2,500 annually,” he said.

“When you think about where wages are going, we have to make productivity a priority on the frontlines. For far too long we’ve overlooked the frontlines and we can’t any longer. We’ve got to give them better tools,” Aubuchon said.

BIG-BOX INNOVATION

In February, Lowe’s Cos. and Instacart, the leading online grocery platform in North America, announced a partnership to pilot same-day delivery in as fast as one hour. Customers can now have about 20,000 Lowe’s items, everything from building supplies to garden essentials, delivered from the store to their door. Same-day Lowe’s delivery via Instacart was initially available in Boston and Charlotte, with plans to expand to additional markets in the coming months.

Lowe’s is the first dedicated home improvement partner available on the Instacart marketplace, addressing a

growing consumer need as both home improvement product purchases and demand for online delivery continue.

“Online is a key piece of our omnichannel strategy, and the combination of Lowe’s home improvement expertise and Instacart’s ability to help deliver right to your door within hours offers a new, convenient way to shop,” said Mike Shady, Lowe’s senior vice president of online. “As we explore a suite of solutions to meet our customers’ same-day and nextday delivery needs, this partnership is enhancing the customer experience and providing the choices today’s customers demand.”

Not to be outdone, The Home Depot recently announced the formation of Home Depot Ventures, a venture capital fund created to identify, fund and partner with early-stage companies to accelerate emerging technologies that aim to improve the customer experience and shape the future of home improvement.

The $150 million fund aims to invest in companies that help Home Depot provide a seamless interconnected shopping experience and deliver operational excellence while better serving customers and associates.

Some of the areas the company hopes to address are finding ways for associates to collaborate more easily, helping pro customers more efficiently manage and grow their

businesses, and delivering value for customers through platform innovation, delivery optimization and application of data science.

“With Home Depot Ventures, we’re lending our support and expertise

OvercOming Barriers tO Building an Online Presence

Now more than ever, consumers want to research and purchase items at their convenience. According to a recent survey, 81 percent of consumers say that in the past six months they had looked up inventory on a retailer’s website before visiting the store.

This figure demonstrates how critical it is for retailers to showcase their products online with a proper website that is set up for ecommerce. But for many retailers, building and managing an effective website can seem unattainable.

John Maiuri, president of the LBMH Division at ECI Software Solutions, shared insights into how hardware and LBM retailers can get past initial barriers to build an effective online presence.

“As the world changed and further accelerated on the digital front in early 2020 as a result of the pandemic, we saw a growing need for further development in this area and it played pretty well with our engagement

to enable rapid scale of innovation,” said Richard McPhail, executive vice president and chief financial officer of The Home Depot. “This is an exciting opportunity to find and scale the next big ideas in technology and retail.”

with the eCommonSense® platform,” Maiuri said. “A very small subset of the industry was structured to be able to address ecommerce well.”

He added that they started out looking to partner with eCommonSense® and the situation evolved to purchasing them outright to be a further foundation of ECI’s digital program. The eCommonSense® platform is an ecommerce and product information management (PIM) solution specifically designed for hardware and LBM dealers. It helps these businesses provide a positive online shopping experience that rivals national chains. For more on eCommonSense® click here.

Maiuri noted that there has been a reluctance in the industry to embrace investment in technology that really pushes forward to ecommerce to the extent Amazon has invested.

One of the biggest barriers to an online presence is the need for rich, digestible content to put in front of customers, he pointed out. “Keeping it up to date is a core component of having an online presence and that’s very integral to our solution. Pricing needs to be

TECHNOLOGY TRENDS

to be updated in real time and relevant when the customer needs it,” he said.

Another hurdle to overcome is the belief you can hire a marketing firm or developer to build the website and that the rest is easy, according to Maiuri.

“Nothing could be further from the truth. It’s very hard to build your own site and manage your own online presence. We can capitalize on the scale of one to many while an individual retailer will struggle because they’re trying to do it on their own,” he said.

“Ecommerce is not easy. It takes a champion, a commitment, a fundamental change in discipline,” according to Maiuri. “The notion of having an online presence that says you have one of something on your website and then someone drives 30-40 miles with the expectation that product will be there for them and arriving to find out your inventory discipline is not accurate to ensure the product is there and available for pickup is a problem. Those disciplines of execution have to be resolved when you have an online presence. There’s little opportunity to change the game when somebody is submitting an order. It becomes a costly endeavor to modify that expectation,” he added.

“One of the things retailers have the ability to control is their ability to engage customers at a service desk, the physical part of shaking their hand and looking them in the eye. That gives you a great deal of forgiveness if there’s an issue,”

Maiuri said. “You can lose all of that in your online presence. It’s much more clinical where people have an expectation of perfection—the bar has been set extremely high by companies like Amazon. Nobody is going to keep up with the likes of Amazon online, but you have to be able to do your level best to deliver a similar experience at an acceptable cost.”

He added that he thinks independent retailers can compete with Amazon. “The companies that are really good at this today are taking a lot of their common sense, traditional business practices and replicating the online experience around them and doing it quite well. Having it ready when you say it will be ready. How well you execute your business determines your customer’s experience.”

According to Maiuri, “One of the challenges businesses face today is reducing the amount of unproductive time spent engaging with technology so they can focus on core initiatives like the potential introduction of digital to their footprint. Having your website located in the same cloud infrastructure as your POS solution shortens that distance, reduces cost and creates efficiency, which was the underlying goal of the eCommonSense acquisition.” n

John Maiuri

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• It features an aggressive adhesive that is capable of holding strong during tough outdoor projects— such as keeping poly sheeting in place during spray painting—yet it

removes cleanly, without residue, for up to three days.

• Not only does it stick to difficult, uneven substrates, but it also adheres well to painted wood, aluminum, steel and vinyl. Plus, its crepe paper backing allows it to conform easily to bends and turns, making a quick task of masking around exterior doorways and windows.

Shurtape Technologies/FrogTape® www.frogtape.com/contractors

EL MARKO ® PAINT MARKERS

• The El Marko® brand has been revived by Century Club manufacturer C.H. Hanson.

• El Marko® brand includes a full line of permanent markers, paint markers, china markers and lumber crayons.

• Available in red, black, blue, white and yellow.

• These paint markers deliver permanent, high visibility marks on all surfaces—even oily, rusty and greasy films.

18V BRUSHLESS 1/2” HAMMER DRILL/DRIVER

• GSB18V-975CN 18V Brushless Connected-Ready Brute Tough 1/2 In. Hammer Drill/Driver has a powerful brushless motor that provides efficient power for up to 975 In.-Lbs. of max torque and 0-31,500 beats per minute, but weighs only 3.4 lbs.

• Features KickBack Control and variable-speed settings: high speed (0-2,100 rpm) and high power (0-480 rpm) and a precision clutch with 25 settings to reduce fastener damage.

• Rapid mode selection switches between drilling mode and driving mode without needing to adjust the clutch.

• The drill features connectivity (module sold separately), which links users to a connected device via the Bosch Toolbox App to customize settings. Robert Bosch Tool Corp.

CATEGORY REPORT

HARDWARE & FASTENERS TRENDS

Sales of Door Locks (Independent Hardware Channel)

12 Months % Change vs. Year Ago Door Locks:

Source: Epicor’s Industry Data Analytics

Unit Sales Breakdown for Door Locks Total of 1,466 Items with Sales

Epicor’s Industry Data Analytics tracking information is based on sales from a representative sample of hardlines retailers located throughout the U.S. For more information, call 512-278-5800 or email

Source: Epicor’s Industry Data Analytics epicorindustryanalytics@epicor.com

HARDWARE AND FASTENERS MERCHANDISING :

Upper Left: Farmer’s Pro Hardware, London, Ky.

Middle Left: Hartville Hardware, Hartville, Ohio

Lower Left: Hardymons Home & Hardware, Maysville, Ky.

Upper Right: HomCo Lumber and Hardware, Flagstaff, Ariz.

Middle Right: Landers Trade, Monterey, Tenn.

Lower Right: Richert Lumber Ace Hardware, Pleasanton, Calif.

The Hardware Connection provides a pictorial look at store murals. Send pictures to chris@thehardwareconnection.com.

Doc’s Hardware, Albion, Ind.

Skokie Ace Hardware, Skokie, Ill.

Kueter True Value, Bellevue, Iowa

Solenberger’s True Value, Winchester, Va.

Valley Ace Hardware, Westcliffe, Colo.

Shafer’s Ace Hardware, Eureka, Calif. Hebron True Value Hardware, Hebron, Neb.

HPM Building Supply, Hilo, Hawaii

Tanis Hardware, Haledon, N.J.

St. Andrews Ace Hardware. Queensbury, N.Y.

Wilensky Hardware, Brooklyn, N.Y.

Taylorsville Hardware, Taylorsville, Ky.

UPCOMING EVENTS

MAY

Epicor Insights 2022

May 23-26, Gaylord Opryland Resort, Nashville, Tenn.

JUNE

Hardlines Distribution Alliance

Group Merchandising Conference

June 20-23, Embassy Suites Buckhead, Atlanta

House-Hasson Hardware Summer Dealer Market

June 10-11, Sevierville Events Center, Sevierville, Tenn.

spoga+gafa

June 19-21, Koelnmesse, Cologne, Germany

United Hardware Summer Buying Market

June 23-25, Mayo Civic Center, Rochester, Minn.

AUGUST

Ace Hardware Fall Convention

August 16-18, McCormick Place, Chicago

Orgill Online Fall Buying Event

August 15-26

The Hardware Conference

August 19-21, JW Marriott, Marco Island, Fla.

SEPTEMBER

Blish-Mize Fall Dealer Market

September 16-17, Overland Park Convention Center, Overland Park, Kan.

Do it Best Fall Market

September 9-12, Indiana Convention Center, Indianapolis

Eisenwarenmesse International Hardware Fair

September 25-28, Koelnmesse, Cologne, Germany

Home Hardware Fall Dealer Market

September 23-25, Enercare Centre, Toronto

Horizon Distribution Fall Dealer Market

September 9-11, Yakima Convention Center, Yakima, Wash.

Lumbermen’s Association of Texas 136th Convention & Expo

September 12-14, Omni Frisco Hall, Frisco, Texas

True Value Fall Reunion

September 16-18, Colorado Convention Center, Denver, Colo.

Wallace Hardware Fall Dealer Market

September 27-29, Sevierville Events Center, Sevierville, Tenn.

OCTOBER

GIE+Expo 2022—The Green Industry & Equipment Expo

October 19-21, Kentucky Exposition Center, Louisville, Ky.

LMC Expo

October 12-14, Philadelphia Marriott Downtown, Philadelphia

Taiwan Hardware Show

October 19-21, Kaohsiung Exhibition Center, Kaohsiung City, Taiwan

For a complete listing of calendar dates, click here.

“Where Relationships Are Formed”

3 Days of Networking, Relaxing and Learning

Meet colleagues and new friends at the industry’s largest conference for independent hardware retailers. Share ideas with top retailers on how to grow your business, interact with key vendors on how to increase sales in your store and attend educational seminars, all-industry cocktail receptions and dinners in an exclusive 5-star resort setting.

Learn More About Your POS System at the Hardware Technology Forum

Epicor will offer full-day, hands-on training sessions for their retailers. Bring your tablet or laptop so you can log right into your store as you learn new “tips and tricks” to make your POS software more productive in your store.

Honor the Industry’s Best Retailers at the 2022 Beacon Awards

The Beacon Awards are an important recognition program that honors the best of the best dealers who represent the future of the industry.

Sponsors: Co-Sponsors:

IN THE NEWS

NEW STORES:

• Tum-A-Lum Lumber opened a new location in Pendleton, Ore.

• Waters Hardware acquired seven Nuts & Bolts stores in Missouri and Kansas.

• R.P. Lumber Co. has opened a new location in Mt. Vernon, Mo.

• Sunshine Ace Hardware is opening a new store in Naples, Fla.

• Busy Beaver Building Centers opened its 25th store in Delmont, Pa.

• Brad Christianson is opening a new Ace Hardware store in Yakima, Wash.

• Jessie and Jackie Kueter held grand reopening for Kueter True Value Hardware in Bellevue, Iowa, after purchasing the business from the Lampe family last year.

• Colmar True Value Home Center opened in North Cape May, N.J.

• R.P. Lumber Co. has opened a new location in Mt. Vernon, Mo.

• Nyberg’s Ace Hardware is opening new stores in Watertown and Sioux Falls, S.D.

• Steve’s Ace Home & Garden opened a new location in Peosta, Iowa.

• Lambert Ace Hardware opened in Pueblo West, Colo.

• Matthew Dowdell and Tom Shellenberg are opening Ace Hardware stores in Evergreen and Columbia Falls, Mont.

• Jerad and Jeremy Harlow are opening Waynedale Hardware in Fort Wayne, Ind.

• Nick Visser acquired Holland Ace Hardware in Holland, Mich., and renamed it Visser Ace Hardware.

• Dipak Patel and Rick Vora opened Ace Hardware in Lake Zurich, Ill.

KUDOS TO:

• Century Club retailer Gates Hardware of Curwensville, Pa., is marking its 145th year of operation including 100 at its current location.

• Pointe Hardware & Lumber

Tum-A-Lum Lumber

Colmar True Value Home Center

in Detroit is marking its 70th anniversary.

• Navarre True Value in Wayzata, Minn., is celebrating its 75th anniversary.

• STIHL Inc. announced an expansion of the Hearts of STIHL program, an initiative to care for the environment through the preservation of our nation’s state parks. The 2022 Hearts of STIHL program will provide a $20,000 grant to a park in each of the nation’s six regions for a total of $120,000 in 2022.

PEOPLE ON THE MOVE:

• Do it Best Corp. has hired Ryan Dunbar as associate merchandise manager and Bob Turecki as retail project manager and promoted Alex Gilliom to category management and analytics manager, Sarah Krey to merchandise manager for lawn & garden, Laci Scheib to merchandising manager for farm & ranch, Ed Somerville to merchandise manager for plumbing, and Lauren Wilson to merchandising pricing and training manager.

• Jason Rasmussen has been named vice presidentmerchandising at HouseHasson Hardware.

IN MEMORY:

• Harvey Katz, who opened Harvey’s Hardware in Needham, Mass., in 1953 and turned it into a local institution, died March 28 at the age of 89. His grandfather had started a hardware store in Revere, Mass., that Harvey worked in briefly with his father before striking out on his own. Up until a few years ago Harvey worked every day in the store, now run by sons Gary and Jeff. Click here for more.

FOR THE FULL STORY:

• Do it Best announces re-envisioned spring market experience. Click here.

• Stihl rolls out Made in America campaign and posts record results. Click here and here.

• 7 home improvement retailers added to NY Historic Business Preservation Register. Click here.

• Ace Hardware Corp. moving to new headquarters. Click here.

• Do it Best hires Jason Hanegan as national sales manager. Click here.

Bob Turecki

Alex Gilliom

Laci Scheib

Ed Somerville

Jason Rasmussen

Jason Hanegan

Sarah Krey

Harvey Katz

RETAIL IDEAS

CREATIVE WAYS TO BOOST SPRING SALES

With Scotts 4-step program a very popular spring purchase, Connolly’s Do it Best Hardware & Rental in Fort Wayne, Ind., has taken to merchandising the four-bag program by pre-stocking small shopping carts right by their larger displays of the product. So, all customers have to do is come up and grab the cart.

As a bonus, there’s still room in the basket for customers to continue their shopping and add to the sale. When employees see a cart has been taken, they refill another one so it’s ready for the next customer.

Grant Umber, division manager for Connolly’s, said the idea came from staff at their Illinois Road location. “They have done it for a few years now. I am currently reviewing doing something like this throughout the rest of the store,” he said.

For example, in plumbing you could pair up some supply lines, thread tape and plumbers putty as a quick grab pack. Or in lawn in garden, pairing potting soil, fertilizer and flower pots. “Then we would offer the package at a slight discount from buying the items individually,” Umber said.

He added that customers have mentioned the ease of having the pre-stocked carts for the 4-step

Upper: Connolly’s Do it Best Hardware prestocks shopping carts with the Scotts 4-step bags to encourage sales of the full program.

Lower: Connolly’s lowered prices across the store with an “Inflation Vacation” event.

program. “My father (retired retailer Dave Umber) always taught me that the main key to successful service is

saving people time and this does just that,” he said.

Spring weather has not been kind with lots of cold and wet weather, so the fact Connolly’s 4-step program has held steady compared to previous years is counted as a win, according to Umber.

Against the backdrop of rapid inflation and rising consumer prices, Connolly’s also introduced another creative spring promotion. Starting in early April, Connolly’s began the process of lowering prices on more than 90,000 items across its five Fort Wayne home improvement locations. To celebrate these lower prices that would help shoppers complete their spring and summer projects more cost-effectively, they hosted an “Inflation Vacation” event. Running through the end of May, the event spotlights vacation-themed decor and giveaways, in addition to new, lower prices on merchandise storewide.

“The response to our Inflation Vacation has been positive. People seem to be responding well to lower prices. I would view this promotion as a success,” Umber said. “We are using this a bit differently than just a promotion however, but more of a full culture shift within our stores and directly attacking a high-price image.”

He said the key is the employee buy in. “We spent a couple weeks prepping the employees so that everyone knew exactly why we were doing this. We also made sure every aspect of our

stores sent the same message. From our front-end advertising to our in-store decoration and even to our cashiers circling how much the customer saved at the bottom of the receipt and saying ‘you save x dollars by going on vacation with us.’ I think the Walt Disney quote is ‘There is no magic in magic, it’s in the details’ and that is what we were going for on this one,” Umber said.

For more, click here.

GETTING CHARGED

McLendon Hardware’s stores in Renton and Tacoma, Wash., have installed Blink EV charging stations so customers can charge their electric vehicles while they shop.

QUIET ON THE SET

Still Lumber in Conyers, Ga., has evolved into a leading supplier of film and studio supplies in Atlanta and other parts of Georgia. Some of the film productions that Still Lumber has supplied materials for include: Vampire Diaries, Sleepy Hollow, Valor,

Join us for this important recognition program that honors the best of the best dealers who represent the future of the industry.

The Beacon Awards are held annually at The Hardware Conference in beautiful Marco Island, FL, and are co-sponsored by The Hardware Conference and The Hardware Connection magazine. The Hardware Conference will be held Aug. 19-21, 2022 For more information about attending this event along with all other educational seminars, open floor discussions and social activities at the 2022 Hardware Conference, visit www.TheHardwareConference.com

American Reunion, Goosebumps, Shaft, Bad Boys, MacGyver and Black Lightning. They offer dependable delivery, hard-to-get items and custom-cut lumber.

ROLLING OUT A MOBILE WORKSHOP

Aubuchon Hardware has partnered with the Shelburne Craft School to make a mobile workshop available to serve the community with mobile woodworking classes and digital fabrication demos. The toolbox on wheels is outfitted with everything from drills and saws to a 3D printer and laser engraver, and it is powered by a solar panel.

RAISING MONEY FOR UKRAINE

The owners and staff of Cameron’s Ace Hardware in Oxford, Pa., jumped into action when the war in Ukraine started. The store had a student who had worked there who came from Ukraine, which made the suffering they saw more personal.

After offering to match donations and raffling off paintings, they ended up raising $4,000, which was sent to UNICEF to aid the children and families who had been displaced and forced to flee the country.

To read more, click here.

SLEEPING ON THE JOB

Providence Do it Best Home Center in Providence, Ky., has developed a niche selling mattresses—that business is called Slumber Yard Mattress Shoppe. The retailer also sells flooring, cabinets, furniture and appliances, making it a true one-stop shop. n

BEHIND THE NUMBERS

$382.5 billion

Size of U.S. home improvement consumer market in 2023, up 2.8% from 2022 sales, according to Home Improvement Products Market Forecast by the Home Improvement Research Institute (HIRI).

6.0%

13.3%

Percentage U.S. home improvement consumer sales increased in 2021, following a 15% increase in 2020, according to HIRI.

3.2%

Projected percentage of annual growth in the U.S. consumer market for home improvement products between 2024 and 2026, compared to 4.8% annual growth in the professional market, according to HIRI.

7.9%

Percentage of growth in the U.S. professional market in 2022, according to HIRI.

Compound annual growth rate for the U.S. consumer market of lawn and garden equipment and supplies between 2022 and 2026, according to HIRI—the top-growing merchandise line for consumers— followed by dimensional lumber and boards, 5.1%; and doors and molding, 5.0%.

7.6%

Compound annual growth rate for the U.S. professional market of dimensional lumber and boards, according to HIRI—the top-growing merchandise line for professionals—followed by doors and molding, 7.5%; and plywood and related products, 7.2%.