Ace Hardware Profits in a Home Depot World
Ace Hardware Corp., a 90-year-old co-op that oversees nearly 5,000 locally owned hardware stores, never would be mistaken for trendy. But its recent growth proves the adage that everything old eventually becomes fashionable again.
“We are a service-based, high-touch, local business,” says John Venhuizen, CEO of the Oak Brook-based chain. “The shop-local trend is one that has served us well.”
So, too, has the small-box movement, in which recession-chastened retailers began shrinking their store footprints. Except for a failed experiment with a few larger locations in the mid-2000s, Ace always has focused on modest stores. Its average footprint is about 8,000 square feet, a mere couple of aisles in a typical 100,000-square-foot Home Depot. A healthier housing market and a slew of American homeowners empowered by low interest rates certainly don’t hurt, either.
Sitting on the sunny side of retail trends helped propel Ace to record profit and sales in 2013. Net income increased almost 28 percent to $104.5 million as revenue rose 8 percent to $4.15 billion.