In its second-largest acquisition, Amazon buys the company for $970 million.
Though it still only accounts for a small percentage of all revenue, Ace Hardware pounded out a 37% increase in 2008 web sales while total sales remained flat.
Though it still only accounts for a small percentage of all revenue, Ace Hardware Corp. hammered out a healthy increase in 2008 web sales while total sales declined.
For the year, Ace, No. 473 in the Internet Retailer Top 500 Guide, increased web sales by 37.2% to $11.8 million from $8.6 million in 2007. Total sales in 2008 declined by 2.8% to $3.86 billion from $3.97 billion in the prior year. Ace, a cooperative representing 4,600 independent hardware, home center and building materials retailers, doesn’t break out comparable store sales. The web accounted for 0.3% of total sales in 2008 vs. 0.2% in 2007. Net income for Ace declined year over year by 1.2% to $85.8 million from $86.9 million.
Ace, which uses GSI Commerce Inc. to manage its e-commerce platform, doesn’t break out quarterly e-commerce sales. But total sales declined by 0.19% to $956.1 million from $957.9 million in the fourth quarter of 2007. Q4 net income decreased by 27.1% to $15.3 million from $21 million in the fourth quarter of the prior year.
Despite its small e-commerce sales base, Ace still expects big things from its web store to drive multichannel sales. About 77% of all shoppers on AceHardware.com now use the site’s order online/pick-up in store program, says Ace e-commerce marketing supervisor Mark Lowe.
When they pick up an item ordered online, about one-third of shoppers also make additional store purchases, says Lowe. “We had a strong year on the web in 2008 and shoppers and Ace store owners like the order online/pick-up in store option,” he says. “The program drives customers to AceHardware.com and our network of stores and increases customer loyalty.”