Ace Hardware 2014 Annual Report Download

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2014 ANNUAL REPORT

Table of contents

  • Page 1
    2 0 14 A N N UA L R E P O R T

  • Page 2
    "It is only through a thousand points of disciplined execution that 90-year-old companies can achieve record performance." - John Venhuizen, President and CEO

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    ...teamwork, passion and discipline throughout a number of our key initiatives fueled our growth. Chief among them in 2014 include: • A nearly irrational pursuit of amazing customer service. After being ranked "Highest in Customer Satisfaction with Home Improvement Retail Stores, Eight Years in a Row...

  • Page 5
    ... all about two things; customer engagement and store profit. To that end, 55% of Pinnacle Ace retailers reported in our year-end survey that 2014 was the most profitable year in their companies' history. This is the very sort of metric that continues to keep an improved store model as the passion of...

  • Page 6
    ... owners and their teams, our dedicated Ace team, our vendor partners and a strategy that is working. Our vision is "To be the best, most helpful hardware stores on the planet." This vision in action is our long-term retail growth strategy - 20/20 Vision. It exemplifies everything we are and drives...

  • Page 7
    Year in Review 7

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    ... Revenue 8 Year in Review $ 4.7 Billion Increased Retail Transactions Wholesale Revenue +1.4 2013 % $ 4.47 Billion 2014 2011 2012 2013 2014 Net Income New U.S. Stores from 2013 Up 14% $ 140.9 201 Million Up 35% from 2013 *80 Net New Stores Stores Now Supply Place Certified 1,646

  • Page 9
    Year in Review 9 Total Paint Resets New Ace Retail Space Service Levels 3,553 of U.S. Stores have new Paint Studio Million Sq. Feet 2 96. 1 % 83% Pinnacle Retailers Reporting Highest Profits Ever Stores Now Helpful Certified New Ace Rewards Members 2,008 3,440,013 55 %

  • Page 10
    10 RSCs Wilmer Retail Support Center West Jefferson Retail Support Center Exterior photo © Cory Klein Photography

  • Page 11
    ...,000 square feet to meet future growth needs. The facility is furnished with 84 dock doors as well as power equipment that is run by hydrogen fuel-cell technology. Latest Technology Delivers Results Order fillers make up Ace's largest employee group in the 14 RSCs. In 2014, these team members began...

  • Page 12
    ... mission of being the best provider of products, services and operating methods to convenience hardware retailers, Emery-Waterhouse and Jensen will advance Ace's wholesale strategy to be the best provider of hardlines products for independent lumber, paint, nursery, industrial and hardware outlets...

  • Page 13
    Wholesale 13

  • Page 14
    14 Retailer Stories

  • Page 15
    ... it was time to make a significant change in the business and relocate the store. She also Working with Ace, Lucille and her family moved their 8,000-squarefoot store into a 15,000-square-foot location, updating its inventory in order to remain relevant in the market and attract new customers. The...

  • Page 16
    ... first Ace Hardware store on Dale Street in 1992. Opening his second store in 2005 had been a dream come true for Kendall, and he didn't want to close Kendall's Ace Hardware. He worked out a deal with the city to sell the store and acquire a piece of property one mile south of his current location...

  • Page 17
    ... Can-Do Crew member knows they can invest up to $20 immediately and without approval to make things right with a guest. Additionally, they can call on help from a floor manager whose primary responsibility is to ensure that every customer leaves delighted. The entire staff is trained to understand...

  • Page 18
    ...key departmental reviews, including the Paint Studio, electrical, builders hardware and lighting Level 3 resets. Gary's goal for giving customers what they want when it comes to product assortment led to the development of a thriving nursery business that partners with local suppliers for live goods...

  • Page 19
    Retailer Stories 19 many businesses have come and gone. Today, the sky is the limit for this wildly successful home improvement center that has made Ace the place for nearly 50 years.

  • Page 20
    ...'s business was stable, it definitely was not thriving the way they had envisioned. Sales were flat and Barb and Perry were working 60 to 70 hours a week. After doing extensive research, they decided to join Ace in 2011 because of its proven growth strategy and the programs available to retailers.

  • Page 21
    ... team can overcome most of them. The Hahns have learned from experience: It's amazing what the power of positive thinking and energetic owners will do for a tired organization. Their journey epitomizes Ace's 20/20 Vision growth strategy: improve the store model, reduce atrophy and grow store count...

  • Page 22
    ... way - especially their commitment to help stores provide truly great service to their customers," says Jerrold. "In my opinion, Ace's incentive program to assist both current and new retailers grow their store base is second to none." Their first in-store Ace Hardware opened in December 2013 inside...

  • Page 23
    ... Ace Hardware & Rental in Chestertown and Price & Gannon Ace Hardware and Rental in Centreville, John reports record sales and profits. He appreciates how customer and retail-focused everyone at Ace corporate is. "It's refreshing to see a marketing program that actually works," he says. "Our flyers...

  • Page 24
    ... pivotal move from their small Tafeta location to their current 25,000-squarefoot store in Malaeimi. In addition to a retail super store, they have a 12,000-square-foot warehouse and a full-service lumberyard. The Scratch family credits the support of the local community and its loyal customers with...

  • Page 25
    ... to 'help up' and not 'hand out' so that all families in American Samoa are self-sufficient and prosperous." American Samoa is a small island, and Neil's Ace Home Center is not the only hardware or home center, but by striving to offer the highest level of customer service every day, Neil's Ace Home...

  • Page 26
    ...and help that customers just don't find in larger chain stores. The store professionals are comprised of Providing specialized attention and solving problems for 107 years Rich Lawrence, who has served as the company's president since 1980, makes sure the high-volume, wellstocked hardware store is...

  • Page 27
    ... excellent service. They always solve my problems. This store is a landmark due to the excellent, knowledgeable staff," says one loyal customer. Emigh Ace Hardware is passionate about consistently providing the best customer service in the market. It starts with the hiring process. Emigh hires for...

  • Page 28
    ... the buyers at Ace corporate also have kept certain SKUs at top levels to ensure Fisher's gets product when needed. The team at Fisher's is energized and enthusiastic to be The Supply Place B2B success gains the competitive edge in a crowded marketplace Fisher's Ace Hardware & Rental is located in...

  • Page 29
    ... 2014 tell the story: • House account sales increased 117% • Total sales increased 15.3% • House account average ticket increased 30.5% • Number of house accounts added increased 73.2% (resulting in 99 new business customer accounts) Clearly, Fisher's Ace Hardware & Rental is supplying...

  • Page 30
    30 Retailer Stories

  • Page 31
    ... of the best tools Carl has discovered for bringing in new customers. By following his 20/20 Vision growth plan, TMC's Ace Hardware achieved Pinnacle status in 2014 - the highest level of Ace retailing. Sales continue to grow, and it is now the place to shop in Maize. Thinking outside the box leads...

  • Page 32
    32 Ace Foundation al t To i nc e of r ea s 20 % ov $2 .3 er 20 13 M Retaile $2.0 9 r Fu nd r ing s i a 8 M ar or P nd Ve $ raised during 2014 for 5.8 M tners Ac e C $1.33M aff orpo rate & Field St Retailer Fundraising increase in 2 years $2.09M CMN Bucket Promotion $ Store ...

  • Page 33
    ... retailers, vendors and corporate team members to raise funds for and donate to CMN Hospitals. The result was a record-breaking $5.8 million raised for CMN Hospitals in 2014 and donor engagement within the Ace world at an all-time high. "At Ace Hardware, we're committed to being 'The Helpful Place...

  • Page 34
    ... our customers but for our staff," said Ace Board Member Dave Karsten of Karsten's Ace Hardware. "He inspired our customers to donate and our team to make that ask. Aiden and Jenni really became a part of the Ace family this year." The Phoenix area stores rallied for Aiden and other children treated...

  • Page 35
    Ace Foundation 35 Not only did Aiden's video interview with Ace President and CEO John Venhuizen go viral in the Ace world, it was also recognized by Home Channel News, naming Aiden one of its 2014 People of the Year. HCN noted that the video shown in Orlando was "one of the most inspirational and ...

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    36 Ace Foundation Minneapolis Philanthropi Ace All-Star Retai Corporate Per

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    .... As part of his recognition, Proctor & Gamble donated $25,000 in Mike Frattallone's name to Gillette Children's. "Mike embodies the ideal caring, community-minded, helpful Ace retailer," says Jimmy Alexander, Ace's Senior Vice President of Customer Care and President of the Ace Hardware Foundation...

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    Ace Hardware Corporation 2 2 0 0 Kens in gton C ou rt | Oak Brook, IL 60523 WWW.ACEHAR DWAR E.COM