Emery CEO embraces change
Emery-Waterhouse CEO Steve Frawley anticipates changes now that Ace Hardware has acquired the 170-year-old regional wholesale distributor. Some will be subtle, some substantial, and some as yet unknown.
The deal, terms of which were not revealed, also marks the beginning of a separation between Portland, Maine-based Emery and Distribution America, the co-operative of nine regional distributors that pool together as a buying group.
“We are working out a transition plan,” Frawley said. “We are one of the founding members [of Distribution America], and they’ve done a terrific job for us.”
On the new business arrangement with Ace, Frawley described the Emery model as a “high-touch, high-service personalized business.” Looking at Ace, he sees a lot more clout on the buying side and “world-class distribution,” he said.
While the plan calls for Emery to operate independently as a majority-owned subsidiary of Ace, both companies say they expect to benefit through combination. Frawley says he is excited about the potential for sharing of best practices. And as previously reported, Ace CEO John Venhuizen said both Ace retailers and Emery customers would see additional scale and expanded assortments.
The two companies’ differences make for an intriguing combination. Emery is a wholesale distributor with retail customers. Ace is a co-operative with retail member-owners. Emery has two distribution centers, one in Portland, Maine; one in Pittston, Pa. Ace operates 14 “Retail Support Centers” around the country. Some 65% of Emery’s business is focused on the pro dealer, whereas Ace is a convenience hardware powerhouse.
“We think we have an opportunity to offer our customers the best of both worlds,” Frawley said. “Compatibility is there. And so is the ability to add more value and services to the customer.”
Emery’s focus is on the Northeast and Mid-Atlantic, but the deal introduces the possibility of expansion beyond its traditional boundaries, as long as the distributor continues to improve and win customers, Frawley said.
He also sees the Ace deal as a move that puts Emery in a better position to navigate intense industry competition and consolidation.
“When you look at this world, you see it getting just more competitive,” Frawley said. “And it’s not necessarily the independents competing against each other. It’s the Wall Street guys -- Home Depot and Lowe’s – that are the real challenge.”
Frawley added: “The sale is not going to define Emery. What’s going to define us are the decisions we make now, and how we service our customers.”