Valspar CEO likes his chances with Ace
After signing a long-term deal to supply paint for Ace Hardware, Valspar CEO Gary Hendrickson expects to ride the recovery to increased sales.
"The recently announced Ace Hardware acquisition will expand our retail presence in the U.S. and deliver additional revenue from Ace’s private-label paint which we now manufacture and sell," said Hendrickson.
During a conference call with analysts, Hendrickson said the store-level decisions on stocking Valspar paint lie with the individual Ace members, but the co-op can certainly influence those decisions.
"The individual storeowner can make their choice of the brands that they want to carry," Hendrickson said. "The co-op makes it a lot easier for them though, to pick the brands that the co-op has agreements with."
Valspar will have a shipment and fulfillment advantage over paint competitors, he said, "and that's the big advantage."
Valspar is also planning an expansion in the United Kingdom through an alliance with retail giant B&Q. That deal will put Valspar branded paint in more than 300 stores in the United Kingdom and Ireland. But it's the United States that has Hendrickson most excited.
He told analysts to stay tuned for a another "significant retail program in the U.S.," but he said he couldn't talk about it yet.
"The Ace acquisition and the retail program underscore our confidence in the U.S. housing market and will position us well as the market continues to recover," said Hendrickson. "We believe that any investment we make now and the recovery of the U.S. housing market is a good one for the long term."