Dive Brief:
- Continuing its brick-and-mortar expansion, Ace Hardware is opening 60 more stores by the end of the year and plans to open three new warehouses over the next five years, the hardware retailer announced on Wednesday. The company so far this year has opened 105 stores.
- The addition of the three warehouses will add 4.4 million square feet of capacity to its distribution network. Over the past four years, the hardware retail chain has added more than 2.5 million square feet of warehouse space for its distribution network.
- The company currently operates more than 5,600 hardware stores across 70 countries, including the U.S. It has opened more than 840 stores over the past five years, per the press release.
Dive Insight:
Ace Hardware's decision to open more distribution facilities was driven by the need to keep up with the new stores it plans to open, according to the company.
It has distribution capabilities in China, Panama and the United Arab Emirates, as well as the U.S.
"With over 100 new stores already opened for the year, we remain enthusiastically bullish about the continued prospect for new store growth," Ace Hardware President and CEO John Venhuizen said in a statement. "I applaud our local Ace owners for the pace with which they've integrated our digital efforts with our physical assets. Seventy percent of Acehardware.com orders are picked up in store and 20% are delivered to customers by our own red vested heroes, thus further advancing the relevance and necessity of our neighborhood stores."
Though Ace Hardware is expanding its physical presence, the company has recently made some cuts. After acquiring a majority stake in e-commerce curation retailer The Grommet in 2017, Ace Hardware shuttered the platform in June and laid off 44 employees. Jules Pieri, founder of The Grommet, announced its closure on LinkedIn.
Ace Hardware announced the rollout of new stores and distribution centers following a successful first quarter. Its Q1 2022 revenue rose 8.9% to $2.2 billion, and its net income saw a 13.7% bump to $119.8 million. At the time, the retailer reported increased sales across most of its departments, with its outdoor power equipment, plumbing, and lawn and garden categories seeing the most significant gains.
But as Ace Hardware enjoys an uptick in sales, its competitors are starting to see the demand for home improvement products cool. Home Depot's Q1 sales only grew 3.8% year over year, and Lowe's reported a 3% decline in Q1 total sales compared to last year.
