True Value posts best growth since 1994

A focus on efficiency and improved customer engagement helped True Value boost same store sales and report its strongest growth in 20 years.

The hardware co-op's total gross billings for fiscal 2014 were $2.015 billion, up 6% compared with the prior year, and the highest in two decades. Same store sales to retailers were up 5.2% on a gross billings basis. Destination True Value retail comps were up 4.8%, and overall same store sales were up 3.1%, the company reported.

“Our strategic plan is driving powerful, positive transformation across True Value as we experienced some of the strongest growth we’ve seen in the last 20 years,” said president and CEO John Hartmann. “These achievements are the result of our members’ support and the hard work of our associates as together we make the changes needed to drive new levels of engagement, growth and efficiency.”

Amid the sales growth, the co-op's earnings declined 25.7%, largely the result of $13.2 million of "strategic plan related expenses," the company said. For the full year, earnings were $41.1 million. A year ago, the co-op's earnings were $55.3 million.

Hartmann also pointed to a record year in attracting new members, as gross billings from new stores exceeded lost billings from terminated stores by $23.6 million. The co-op added 230 new stores in 2014, including 126 new ground-up stores.

True Value continued its support of the members’ investment in their stores. In 2014, the co-op provided over $16.7 million in loans to retailers that implemented the Destination True Value retail format. Retailers remodeled, expanded or opened 969,000 sq. ft. of DTV retail format in 2014, up 12.2% from the 864,000 sq. ft. implemented in 2013. That brings the total to approximately 6 million sq. ft. since inception of the format rol out in 2008. Stores that have implemented the DTV format continue to outperform stores that have not.

In December, the company completed an amendment to its existing revolving credit facility to support implementation of its new strategic plan. Changes included increasing the size of the facility to $450 million from $250 million and extending its term to December 2019. The company ended the year with $97.6 million of borrowings outstanding on its revolving credit facility.

True Value Company, headquartered in Chicago, is one of the world’s largest retailer-owned wholesale hardware cooperatives with gross billings of $2 billion and revenue of $1.5 billion in 2014. The True Value cooperative includes approximately 4,500 independent retailer locations.