True Value, a company that serves 4,500 independently owned hardware store-type retailers, filed for Chapter 11 bankruptcy proceedings, and has sold itself to competitor Do it Best Corp.
The company says that this series of actions will help “better position the business and its iconic brand for the long term, including modernizing its legacy operations, driving greater efficiencies, and investing in additional marketing campaigns.”
In their announcement, True Value says that the agreement with Do it Best was “reached following a robust marketing process,” and that it will provide “significant cash consideration and meaningful assumption of liabilities related to the ongoing business.”
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According to news stories, True Value’s bankruptcy filing says they have between $500 million and $1 billion in total debt liabilities.
True Value “anticipates paying vendors in the ordinary course for authorized goods received and services rendered after the filing.” I have not seen any news or commentary about what will happen to the hundreds of millions of dollars owed to other parties prior to the bankruptcy filing.
Aside from one company-owned store in Illinois, True Value stores are independently owned and operated and not a part of the Chapter 11 proceedings.
Thank you to everyone who wrote in about this!
Trekker
True Value’s debt had gotten up to something like five times its assets. I assume the Do It Right purchase is heavily discounted.
ACON, a private equity firm, bought a 70% interest in True Value in 2018, which had been a cooperatively owned private business. I can’t find much about it on the ACON website since they deleted it all from their website (lots of “404 page not found” links from the web). https://www.retaildive.com/news/true-value-announces-buyout-deal-with-private-equity-firm/519414/
Robert
That’s a shame. Ace Hardware is more prevalent around me than True Value, but they fill the same niche. So what happened to True Value makes me worry about Ace. I really appreciate Ace’s customer service and more knowledgeable staff, compared to Lowe’s and Home Depot. What has added to this worry is the Ace near me doesn’t seem to be refilling its shelves. They say it’s due to a re-modeling coming up, but I fear it’s really that the store may be closed.
Bonnie
The pro and con of these independent hardware networks is that they’re all so different from each other. I’ve been in Aces with knowledgeable staff, and Aces with employees even less invested than Home Depot, with dirty shelves and aisles and higher prices than everywhere else.
But that variety can be real hard for a brand to establish any consistant image. TrueValue and DoItBest stores tend to have more obvious individual branding alongside their network. Like in my area there’s a local chain of Henery Hardware that are all DoItBest stores. There were a handful of TrueValue stoers but they all seemed to switch to DoItBest on their own a few years ago. The only place I still find the TrueValue logo is inside Wilco Farmstores.
Farmerguy
Are Ace stores independently owned, franchise, or all corporate stores?
JR Ramos
I think the majority of them are independently owned/local franchises. I may be wrong, though, and maybe someone who knows better can provide input. We have a bunch here and most of them are owned by the same family and are great stores. There must be some sort of franchise relationship with Ace as a parent company but I don’t know the extent of it. I know there are Ace company stores as well but not sure what the proportions are across the country.
MM
I worked for Ace many years ago. My information is out of date but at the time the majority of Ace locations were franchises though there were some corporate owned stores. My store was a franchise. The store bought maybe 70% of its merchandise from Ace, about 25% from a wholesaler named Handy Hardware, and maybe 5% directly from 3rd parties.
JR Ramos
Handy Hardware!! They were fantastic! Our tool/supply stores bought quite a bit from them and really helped to fill out the offerings. I was shocked to hear that they’d disappeared a few years back. We often got better pricing through them than we did directly from some vendors, which always left us with a little quizzical but sour taste in our mouths. It’s just weird how the entire supply chain has changed…evolved, I guess.
Scott
From Ace’s website
“Ace Hardware is a retailer-owned cooperative where independent owners operate most locations. Although Ace is sometimes considered a franchise system, Ace “franchisees,” or retailers, not only own their individual stores, but are shareholders in the organization”.
I knew any Ace store within a couple hours of me were franchise/independently owned,
I just wasn’t about nation wide until just looking it up.
I agree about their customer service. The employees have been nothing but great any time I go into my local Ace store. The local Do it Best location I can’t say the same thing about. I stopped going in there a few years ago and I’m not the only person that’s had less than pleasant experiences there in the past.
TomD
The Aces I know of are franchises and apparently Ace doesn’t clamp down terribly hard (as each Ace around here has additional product that is obviously not sourced through the Ace distribution network).
This is actually nice because I’ve seen an Ace that’s basically a small town general store, one with an entire crafts department (yards and yards of cloth) and one with a garden department to rival a nursery.
JR Ramos
Oh, wow, that’s big news. We only have a few True Value stores around here in a sea of Ace, HD, and Lowe’s for retail outlets. I hope one local True Value is able to continue on…they’ve been there for at least 40 years, probably longer. Traveling around the state and country I’ve always found True Value stores to be well stocked with a lot of the bits and bobs that even Ace doesn’t always have, and this particular local store often has some great NOS items that are worth scooping up. Recently I was hunting for a 9/16″ nutsetter bit and amazingly, the True Value had it in stock, saved the day (that’s a hard size to find anyway, let alone on a store peg…).
I knew True Value wasn’t doing great but wasn’t aware it was so bad. I guess that should be more evident in today’s world of HD and Lowes dominating, plus e-commerce for both and everywhere else. Our local Ace stores (8 or 9 or them) are excellent seem to be going strong, and in recent years I’ve tried to shop there more (and that True Value) than I do at HD or Lowes…sometimes it’s a winner, sometimes it’s a wash, sometimes I pay a little more, but it’s worth it to keep these stores going, imho.
fred
I just looked at the True Value store locator. Only 2 stores within 8 miles of my location – versus Ace having 5 within the same radius. I don’t recall if and when I last shopped at any of them. Local mom and pop hardware stores – some really big ones – once dominated the landscape before Home Depot took over. They were to go to spots for many items not carried by the home centers of the day. HD – then the internet made them less and less relevant. Lumberyards and building (masonry. tile, electrical. plumbing etc.) supply stores still survive – providing what HD/Lowes can’t – but it sounds like the True Value franchises may not have been producing enough revenue for the parent to survive. I like the idea of competition and small business – but I (probably like many others) don’t do much to support it when I buy from Amazon and HD.
Rog
Our local True Value switched to an Ace store a few years back, but we still have another TV store nearby. I didn’t realize they were doing so poorly. I also would have wrongly assumed Do It Best to be in no position to buy TV. They’ve always struck me as the weakest player in the home center franchise game.
fred
As Trekker said – Do-it-Best probably got it at a bargain price.
Only 1 Do-it-Best store within an 8-mile radius of me – and I’ve never shopped there.
Peter
I did not even know that they were still around.
ACE is the only smaller player I have seen in a long time besides some truly mom and pop stores.
Joe E.
There are a small handful of True Value locations in the Cincinnati/Tri-State area. One in particular is owned by the same family and recently closed a location. Their other location is quite busy for being in a not so good part of town. I usually stop there after work to pick up the supplies I need for whatever project I’m working on that week. They have everything from paint, landscaping, plumbing, electrical and tools.
Speaking of tools, their house brand Master Mechanic is Apex sourced, rebranded GearWrench essentially.. same tools you’ll find in current Husky and Duralast. I’ve bought quite a bit of it over the years and have been quite happy with them.
Scott K
I read about this earlier today – my cynical impression is, “Here’s another business that was destroyed by private equity.” We have a Do it Best nearby and I don’t visit nearly as often as I do HD. With that being said, Do it Best is where I go when I want more guidance than I expect from HD or for harder to find hardware. I was once told that the hardware drawers at my local HD are maintained by a 3rd party and they are rarely full and organized.
fred
Here is what Wikipedia says about TV:
“The True Value Company uses several different retail identities, including but not limited to True Value, Grand Rental Station, Party Central, and Taylor Rental, Induserve Supply, and Home & Garden Showplace.
The wholesaler supports its retailers through 13 regional distribution centers and approximately 2,500 employees in 60 countries.[1] The corporate headquarters are located in the O’Hare neighborhood of Chicago.[5]
Historically it was a cooperative owned by retailers,[6] but in 2018 it was purchased by ACON Investments.[7]”
But when you look at the ACON Investments webpage – TV is not listed as part of their portfolio – and most of the Google search pages for ACON and TV now return 404 error messages. Just speculation – but ACON’s acquisition of 70% of TV – may have loaded them up with debt.
Scott K
“Currently owned 100% by its independent retailers, Acon under the deal would buy 70% of the stock in the company — leaving the retailers with 30% — for $136 million as well as all of the retailers’ outstanding promissory notes for $72 million. Acon would also pay True Value’s owner-retailers a $20.6 million dividend as part of the transaction. True Value CEO John Hartmann said in an interview that the buyout would not leave any additional debt on the company’s books.”
If this held true, then I stand corrected and wonder what went so wrong.
Full article from 2018: https://www.retaildive.com/news/true-value-announces-buyout-deal-with-private-equity-firm/519414/
MattT
I greatly prefer my local True Value to the local Ace. Better stocked, and the employees are more knowledgeable. That said, I generally don’t go to TV unless I’m in the middle of a project and need something fast. They’re usually just too expensive to be my general supplier for DIY stuff.
I generally prefer to shop small local hardware stores because of the (usually) knowledgeable staff, and the typically small town “olde time” feel of the places. But I’ve got to watch out for my wallet, too, so that can only go so far. I always buy from the TV if they helped me with a project or product. I’ll also buy there if their price isn’t outrageously higher than the Big Box Stores. But if it’s a bigger purchase that will mean a significant difference in spending, sorry, yeah, it’s off to a Big Box.
Josh R
Having never heard of Do It Best hardware stores, I was very confused by how True Value selling itself was the best way to do bankruptcy.
Stuart
Unless I am mistaken, I am guessing that the bankruptcy is to shed or restructure some of the debt liabilities, so that Do it Best doesn’t inherit all of it.
MM
I think what Josh might have been suggesting was that it’s surprising for a company one has never heard of to suddenly be announced as buying a company one does know about, especially a fairly big one like True Value. I had no idea who/what Do it Best was until I read this article. I’d seen the logo once or twice before online but I didn’t know what it referred to. I have never seen or heard of a Do it Best store. I’ve never encountered their website despite often searching for and buying tools online. If you had asked me a couple days ago what Do it Best was I’d have guessed it was a homeowner/DIY-focused blog or youtube channel.
You need a big customer to buy your company out of bankruptcy; the surprise comes when we learned that Do It Best not only exists, but is big enough to do that.
fred
Here is what Wikipedia says:
“Do It Best Corp., formerly known as Hardware Wholesalers, Inc. (HWI), is a member-owned hardware, lumber, and building materials cooperative based in Fort Wayne, Indiana. Do it Best Corp. is the second-largest co-op in the industry with over $5 billion in annual sales.[2] Do it Best Corp. does not mandate store identities, so member-owners may or may not display the Do it Best brand name in their businesses.”
Stuart
My only experience with Do it Best was years ago when they asked me to review a Channellock vacuum.
https://14cyiuhvcgv.com/channellock-wall-mount-vacuum-review/%3C/a%3E%3C/p%3E
There are a lot of stores that are regional. I’ve never seen a Menards.
When I posted about Tractor Supply and their Porter Cable partnership, I was surprised to find that they had higher sales revenue figures than Ace Hardware, and that they had more than 200 more stores in the USA than Lowe’s, and nearly as many as Home Depot.
I didn’t think there were any True Value stores near me, but it seems the local rental place was.
Hmm. Looking at Do it Best’s store locator, apparently my local paint supply and hardware store is one of theirs.
TomD
Do It Worst (as we called it) was very low-key branding.
Ace will have a giant Ace Hardware sign and maybe the franchisee name in small print, whereas Do It Best would have the store name huge and if you looked you might find a smaller DIB logo somewhere, often the size of the logos of the tools they carry.
I’ve also seen TV switch to DIB or Ace for a hardware store but never seen anything switch FROM Ace.
S
I really think it’s a regional thing. For my area in the northern Illinois/Indiana area, ace/true value/do it best are literally all the same stores. Some are only ace, some are ace true value, and some are ace do it best.
For me, this is like Nike announcing that “just do it” is buying the company. Still very weird
Scott F
I never realized these were two separate companies, always thought it was the same parent marketed differently. Sad to see, but not surprising looking at the hardware store landscape. In the last six months, two of my local hardware stores in rural upstate NY shuttered, leaving for the most part only the local building supply co in town, and HD/Lowe’s in the “cities” 25 minutes out of town.
In the case of my local stores, they were run for the last 40+ years by the owners. Now that those folks are nearing retirement age, I’m sure we will continue to see consolidation.
TomD
There’s a huge wave of “supports a family but can’t support the debt load to buy the business” shutdowns coming. If the kids don’t want to run the business nobody can afford to buy it, because it makes enough money to liver comfortably – if you’re not paying off acquisition debt.
JZ
True value used to be a co op until it was purchased by private equity. PE loaded the balance sheet with debt, cashed out dividends and now the inevitable bankruptcy filling. Rinse and repeat…..
WastedP
One of the two local True Value stores switched over to Ace a few years ago. The other steadily declined in inventory, cleanliness, and service over time. They were a good source for weird hard-to-find items sometimes. On one trip in, I noticed that their bathroom door had a message, written directly on the door in Sharpie, that said the doorknob was broken and didn’t lock. Next to that, someone had written, “Better run to HD and pick up a new one.” That store closed within two years.
TomD
Years ago the TV hardware store was always the last ditch – I’d find items on the shelf with a price tag from 20+ years ago but when you need a weird part or tool, they would sometimes have it.
Often they’d even sell it at the 20 years old price, never knew how that worked but ok.
SamR
I used to go to True Value in Bloomington, IN. I found everything I needed regarding hardware, lawn, and garden supplies.
While the store was a convenient one-stop shop, the absence of discounts and seasonal offers and the need for a more competitive rewards system were significant drawbacks.
However, I was disappointed that the tools were outdated and not selling well, especially considering the high prices, particularly for Milwaukee tools. Other retailers often offer hefty discounts or free batteries, making True Value prices hard to accept.
I think True Value was meant to service the surrounding communities in case quick repair and maintenance jobs/works are needed.
With the current economic situation, True Value’s poor pricing made me more inclined to wait for online purchases, even if it meant delaying the work. This is a significant shift in consumer behavior that True Value should consider when setting its prices.
Pretending it was True Value’s fault for doing awful business is unfair. We have all already seen the same unprofessional, greedy business practices from most PEs. I guess the story keeps repeating itself.
SteveP
Neither Ace nor True Value (both common near me) do a very good job at e-commerce. The individual stores each have their own character – both good and bad. One may have a so-so assortment but is closer, one has a terrible parking arrangement (encouraging me to go elsewhere) one is strong on paint but not hardware, another has a great well and pump supply section, etc. etc.
But try and order something not in stock and it can be maddeningly difficult. Ace especially seems not-joined-up between individual stores and the “parent” website
There’s only one Do-it-Best store anywhere near me (up to now) and I have never been in, so I guess time will tell
But even HD and Lowe’s – with all the space on their shelves – seem to be reducing inventory, and just spreading more of the same stuff out further (and then locking it up). I tried to buy sanding sheets in an assortment of grits and all they offered was large packs of one coarseness. I would have needed to spend $75 to get an assortment I ordered online for $10…
Walter Bordett
I own Estwing hammer and Channelock pliers branded as Master Mechanic about 20 years old. They were often on good discounts at Father’s Day and Holiday season.
Stuart
I’m sorry, but I don’t see how that connects to True Value declaring bankruptcy to sell itself to Do it Best.