Retooled and ready

CHICAGO — True Value Co. CEO Lyle Heidemann spends a lot of his time shopping these days — and that’s a good thing for a chain that had lost its way in retail.

Roaming the aisles of big-box competitors and other retailers that have put hundreds of its member stores out of business, Heidemann and True Value are actively on the prowl for more customers after a restructuring that has cleaned up its financial problems and given it new momentum.

Whether it can regain business lost to home improvement behemoths Home Depot Inc. and Lowe’s Cos. remains questionable. But after years on the defensive, the 6,000-store member-owned cooperative is fighting back again with an aggressive marketing strategy and what its first-year CEO calls “a whole new beginning” for True Value. The quest: Attract more “weekend warriors” away from the giant stores.

“We’re trying to now not (just) survive but in essence put together a strategy for growth,” Heidemann said in an interview at True Value’s headquarters. “And … probably the biggest difference is that we’re focused on retail versus wholesale.”

True Value always acted as a wholesaler to its retail members, but now it is focusing more on what will help them improve store sales and profits, he said.

True Value was synonymous with hardware for many Americans for decades following its establishment in 1948 by hardware wholesaler and distributor John Cotter, who formed a Chicago-based cooperative of 25 dues-paying retailers and called it Cotter & Co. By his death in 1989, sales exceeded $2 billion and nearly one in every four U.S. hardware stores bore the True Value name.

Since then, the cooperative — which became TruServ Corp. and then was renamed True Value Co. last year — has been buffeted by the relentless expansion of giant discount-store competitors, financial losses and accounting errors which led to a Securities and Exchange Commission investigation and a restatement of earnings for 1997-99. More than 1,000 members have left, most closing down but some defecting to rival such as cooperative Ace Hardware.

Financial specialist Pamela Forbes Lieberman was brought in to straighten out the mess in 2001 and headed the company until last June, when she was replaced with Heidemann, an industry veteran. Heidemann spent 36 years with Sears, Roebuck and Co. before retiring in 2003, overseeing at various times its hardware, tools and paint, and lawn and garden businesses, among others.

The 61-year-old Heidemann credits Lieberman for leaving True Value in solid shape, including four straight years of improving profits and same-store sales growth of 2 percent last year, when revenues totaled $2.04 billion. That momentum has enabled him to undertake new retail initiatives, such as adding regional items — for example, snow shovels in the north, fire ant killer in the south and moss killer for the Northwest — and changing pricing and inventory procedures, along with making the marketing push.

Heidemann says True Value, which also operates Grand Rental Station, Taylor Rental, Party Central and other stores, isn’t trying to be “a little box carrying all the big-box items.” But it is providing its member stores with more detailed information about competitors’ prices in individual markets in order to help them compete better head-to-head in its core areas: plumbing, electrical, lawn and garden and paint.

After listening to customer focus groups for months, True Value is targeting not bargain-hunters or advice-seekers but the “do-it-yourself enthusiasts” who already account for an estimated 43 percent of its sales. The goal: to get them to come to True Value first, not Home Depot or Lowe’s, for small projects such as painting, refixturing a bathroom or changing lighting.

“We are a very well-known brand,” said Carol Wentworth, vice president of marketing. “But the key in retail is to be top of mind when someone says ‘I’m going out to do a project’ — who do you think of first. And when you do a survey of the entire industry and all the customers who are active in the industry, True Value’s not top of mind.”