Ace Hardware builds through acquisition in the do-it-for-me market

Discussion
Photo: Handyman Matters
Sep 09, 2019
Tom Ryan

Ace Hardware has closed on the acquisition of Handyman Matters Franchise, a franchisor of home repair and maintenance services. 

Based in Denver, Handyman Matters has 57 franchisees who collectively employ approximately 250 handymen and women in 121 territories across 23 states. The craftsmen are “trained to handle a homeowner’s to-do list in addition to larger projects.” On-site services for consumers and small businesses include carpentry, plumbing, electrical, drywall, painting and flooring.

“The introduction of Ace Handyman Services provides a platform from which Ace can further deliver on our helpful promise to consumers while expanding our presence in the growing do-it-for-me segment,” said John Venhuizen, president and CEO of Ace Hardware.

Handyman Matters will become Ace Handyman Services and operate as a standalone subsidiary. Ace expects to complete the integration and re-branding initiatives by the first quarter of 2020. Andy Bell, founder and CEO, will continue to lead the day-to-day business operations for Ace Handyman Services. 

Mr. Venhuizen added, “Providing increased support to existing franchisees while aggressively recruiting more is part of a compelling evolution in our plan for strategic growth and our retailers’ continued success.”

The deal appears similar to IKEA’s 2017 acquisition of TaskRabbit, the on-demand platform, which links freelance workers with jobs, from handymen to movers to assistants. TaskRabbit was expected to boost IKEA’s delivery and assembly capabilities.

Jesper Brodin, CEO of IKEA Group, said at the time, “In a fast-changing retail environment, we continuously strive to develop new and improved products and services to make our customers’ lives a little bit easier.”

Home Depot and Lowe’s both offer installation services through independent contractors. In 2015, Amazon launched Amazon Home Services, which also works with external service providers. 

In its 2018 annual report, Home Depot wrote that demand for installation services is expanding “particularly for our ‘baby boomer’ customers who may have historically been DIY customers but who are now looking for someone to complete a project for them.” The retailer is focusing more on its professional service providers because they “perform services for our DIFM customers will help us drive higher product sales.” 

DISCUSSION QUESTIONS: What synergies do you see coming from Ace Hardware’s acquisition of Handyman Matters Franchise? What do you think of the overall growth opportunity for retailers aligning with the do-it-for-me (DIFM) market?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I can handle a fair amount of projects around the house with my own skills, but the minute a project elevates from DIY to DIFM, Ace now has a built-in solution."
"A great example of thinking laterally, and avoiding the usual “let’s just do more of what we already do.”"
"This is a great move by Ace. By creating a 360 degree solution for home DIY, they ensure their customers that they can always come back to Ace to get the job done..."

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21 Comments on "Ace Hardware builds through acquisition in the do-it-for-me market"


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Mark Ryski
BrainTrust

The synergies of this acquisition are obvious. Selling products to support DIY projects and now offering help to complete DIY projects is a natural fit. While it’s hard to say what impact aligning with the DIFM market will have on overall growth, it will create new sources of service revenue and deepen relationships with customers who are looking for goods and services to get DIY projects completed. This is a great move for ACE and their customers.

Cathy Hotka
BrainTrust

Neighborhood informational resources struggle to maintain lists of plumbers, electricians and the like, and those directories are no guarantee of finding the right expertise. With this idea, “Ace is the Place” indeed.

Dave Bruno
BrainTrust

This deal reflects perfect synergy between two highly complementary companies. My only concern is the branding – folding Handyman Matters into the Ace brand so quickly is risky, at minimum. If it were my decision, I might have continued with the independent and growing Handyman Matters brand for the foreseeable future.

Zel Bianco
BrainTrust

Ace is jumping on the bandwagon of Angie’s List, Home Adviser and a host of others in the space. It makes sense as one feeds the other and it is a logical revenue stream to add for continued growth.

Lee Kent
BrainTrust

And to that point, will Ace put their name and reputation behind these franchisees? People like to know, or know someone who knows, any person coming into their home like this. Otherwise, they like a big brand to back them. Great synergy, great plan as long as they work this part out. For my 2 cents.

Bethany Allee
BrainTrust

Ace can now compete with Home Depot and Lowe’s! They’re adopting a similar tactic to what Radio Shack did in their heyday. Radio Shack may seem like an antiquated comparison, but at their peak they were the largest retailer in the United States and they had a broader reach and footprint than any other retailer – by a significant margin. Radio Shack saw significant growth then they started offering installation services, because they were easy to access.

Ace is in a similar position. Almost every small town has an Ace. Now they can bring installation services to under-served areas where Home Depot and Lowe’s don’t have operations or where they charge large fees to transport installers out to. As someone who lives in between two very small towns, both with an Ace Hardware – and as someone who needs new windows – this is fantastic news.

Shep Hyken
BrainTrust

Ace wants to be known for more than just being the “helpful hardware folks.” They also want to be the most convenient place in the home repair and improvement industry. Adding the handyman level of service ties right into their lane.

One of the things Ace does for their customers is to create experiences that are different from the big box store competitors (Home Depot, Lowe’s, etc.). An acquisition in this area puts them in direct competition with these same stores, at least in the DIFM market. I’m interested to see how Ace is going to differentiate themselves in this area.

Georganne Bender
BrainTrust

What I love about this is the independent aspect of this partnership – indie retailers and Handyman Matters franchisees working together.

Ace store owners are a big part of their communities, they know their customers and what they need. This partnership brings the slogan “Ace is the place with the helpful hardware folks” full circle. Everything you need happens here.

Oliver Guy
BrainTrust

In many respects this seems similar to IKEA buying Task Rabbit. It makes sense but can it scale?
It struck me that competitors can undertake similar approach using ecosystem partners – independent contractors who are “certified” by the retailer and whose services can be sold through the retailer’s website by means of an API. The benefit of this approach is that it avoids the need to make a financial acquisition.

David Naumann
BrainTrust

Ace has built its business on the high level of service and assistance it provides its customers in their stores. Ace’s loyal customers are attracted to the higher service level provided – a level much better than big box hardware stores. Extending this service level to home repairs is a logical strategy and it will be welcomed by loyal Ace customers. The big question is, will it attract new customers to Ace? Even if it doesn’t it will offer Ace a new revenue stream.

Kevin Graff
BrainTrust

A great example of thinking laterally, and avoiding the usual “let’s just do more of what we already do.” While this type of acquisition/addition of new services isn’t new, it makes perfect sense. Be more important to your customers than just a bunch of boxes on a shelf with price tags!

Michael Terpkosh
BrainTrust

This is a coming together of two business that can mutually support each other. Ace Hardware has the products for the Handyman business and Handyman can tell customers that the local Ace Hardware is supplying the products for home fixes. In many towns the local hardware store is considered to be providing a “community service like retailing” for the consumers in the towns. I agree Baby Boomers will be excited about this service. So will Millennials who are more likely to hire someone to come in-home for projects.

Jeff Sward
BrainTrust

More and more retailers have to extend their brand promise from being in the “stuff” business to being in the “service” business. This is a perfect example. I can handle a fair amount of projects around the house with my own skills, but the minute a project elevates from DIY to DIFM, Ace now has a built-in solution.

Bob Phibbs
BrainTrust

Such a smart move that only builds value for anyone based on their decades of marketing as helpful, trusted locals.

Kai Clarke
BrainTrust

This is a great move by Ace. By creating a 360 degree solution for home DIY, they ensure their customers that they can always come back to Ace to get the job done should they realize that they need help. For Ace this compliments their current product-based offerings, while expanding their marketing exposure in the hardware industry through increased hardware services. This ensures more customers as Ace broadens their appeal.

Gene Detroyer
BrainTrust

I am not a big fan of acquisitions. Most fail because they are executed for the wrong reasons. But this one makes perfect sense. It is consistent with the Ace business model of franchising. When it comes to franchising, Ace leads the way. It extends the brand naturally. It uses a brand name which has great equity to propel a service that is much needed. The Ace brand is one of the most reliable and known and endeared brands in America.

Brilliant.

Rich Kizer
BrainTrust

The concept of having this service is becoming incredibly important to many home owners, and this will grow. But Ace has created a huge “ace” in this acquisition, here is why: when handy men/women are independent workers that do not work for the home improvement stores, the store loses the ability to control every action of working with the customer. That has had some negative repercussions for retailers who do not have “control” of all the work quality of the independent contractor. It leads to unhappy customers who blame the store. Ace understands those brand-smashing repercussions, and so to make sure they extend quality through the end performance, they don’t hire outside independent contractors, they acquire Handyman Matters. What is better is that Andy Bell, founder and CEO of Handyman Matters, will continue to lead the day-to-day business operations for Ace Handyman Services. Well thought out.

Steve Montgomery
BrainTrust

Having been a franchisee and then part of a franchise organization I have seen the good, the bad, and the ugly of franchise systems. Ace has done a great job in establishing a reputation as a good go-to place for the service and products it provides. Like Dave I am surprised that Ace was so quick to rebrand Handyman Matters to its name plate.

They have placed a great deal of confidence in the existing Handyman franchise network. Let’s hope it is justified. I do have to wonder how their existing franchisees feel about Ace now owning something that could be seen as a competitor.

Mel Kleiman
BrainTrust

Everyone is talking about the win for Ace but just think of the win for the Handyman Matters franchisee. This gives them a real leg up in any market where they compete.

Real win for Ace, Handyman Matters, and the homeowner.

Ananda Chakravarty
BrainTrust
First a hats off to Jeff Sward for formally joining the BrainTrust community. I believe he’s been commenting and sharing his wise and thoughtful responses before I joined. Service is an integrated part of retail merchandising. The shift is important and is tied to the challenges of big box players (not just in DIY). The best retailers bring a host of service functions to the customer. Lowe’s and Home Depot are surviving because of their customer and servicing capabilities. Buy a fence, here are 3 qualified fence installers. Buy a garage door, here are two local firms to install it for you. Step back to Walmart: for instance, do you need eyeglasses? Here’s the store in-store ophthalmologist. The service component is a key factor in the retail experience. Why? Because customers are looking for a problem to be resolved, not just a product to be bought. For Ace, this becomes a tool to solve customer problems along a service spectrum and not just a single stopping point. Assessment – this is the fixing blueprint Tools… Read more »
Patricia Vekich Waldron
Staff

As an urban-dweller, I think this is a big win. It’s tough to get small repairs and other jobs sourced. Using a contractor associated with my neighborhood Ace Hardware store will help me — and other consumers — cross projects off our respective to-do lists!

wpDiscuz
Braintrust
"I can handle a fair amount of projects around the house with my own skills, but the minute a project elevates from DIY to DIFM, Ace now has a built-in solution."
"A great example of thinking laterally, and avoiding the usual “let’s just do more of what we already do.”"
"This is a great move by Ace. By creating a 360 degree solution for home DIY, they ensure their customers that they can always come back to Ace to get the job done..."

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