Where Are They Now?: Ace Hardware
Ace Hardware has been a trusted part of communities across America for more than 90 years. Along the East Coast in particular, as customers prepare for hurricane season each summer, they rely on their local Ace Hardware store for essential products and advice to prepare for and clean up after a storm. The owners of those stores rely on Ace’s robust network of distribution centers and warehouse facilities to supply them with a majority of the products sold in the stores. In 2011, Ace Hardware made the strategic decision to open a new Import Re-Distribution Center (RDC) to grow and balance its import infrastructure and better meet the needs of store owners. Ace Hardware chose the City of Suffolk as the location of this new facility, its first RDC on the East Coast.
The decision to open in Suffolk started a year prior, when a logistics study showed that Ace needed to expand to better suit the needs of its East Coast locations, particularly how the company supplied stores with storm related items for hurricanes, tropical storms and snowstorms. The study determined the optimum location for the company’s new Import Redistribution Center would be along the Gulf or East Coasts, and so Ace began a rigorous search to find the ideal location.
Ace Hardware's 336,000 sq-ft Re-Distribution Center located in Suffolk, VA.
Through a connection at CBRE’s Chicago office, Ace was introduced to Hampton Roads. After meeting representatives at the Hampton Roads Economic Development Alliance, The Port of Virginia and the Virginia Economic Development Partnership, they set up a visit to the port and the Hampton Roads region. Ace had an established relationship with CenterPoint Properties, so their visit also included a tour of CenterPoint’s brand new facility being built in Suffolk, the CenterPoint Intermodal Center. After touring a few other cities, Ace returned to Hampton Roads and made the decision that Suffolk was the right location for its new facility. The company’s September 2011 announcement represented $140 million in capital investment, created 75 jobs, and occupied 336,000 sq. ft.
Scott Flanders, who was part of the selection process and today works as the Manager of the Import Redistribution Center, shares that one of the most important considerations in the decision was the proximity to The Port of Virginia and its “unparalleled modernization and efficiency.” The Port of Virginia is a cornerstone of Hampton Roads’ economy and Ace’s selection was a prime example of why: the Port’s depth allows for larger ships and its centralized location on the coast means companies can reach more consumers at lower cost. Additionally, the Panamax, an expansion to the Panama Canal which was scheduled to be completed in 2014, was a consideration for Ace. The Panamax would allow larger vessels carrying international imports to more easily access East Coast ports, lowering land-transportation costs.
While the port and its impressive capabilities caught Ace’s attention, the opportunity to work with a developer and building they knew would accommodate their future growth really helped solidify the decision. In 2011, CenterPoint Properties was finalizing their new, 900-acre facility in Suffolk with up to 5.8 million sq. ft. of industrial space and offered excellent build-to-suit options, with built-in expansion capabilities for their tenants.
Economic development director for the City of Suffolk, Kevin Hughes says Ace coming to Suffolk was a “right place, right time” situation where everyone worked together to make something great happen. They were able to kick off the opening of their industrial park with a recognizable brand and it was encouraging to see private investment at the end of the recession. Hughes notes that he enjoyed building a relationship with Ace and their employees, both on the operational and corporate side as they were very easy to work with. He says that Ace has a unique setup for their stores because it is a cooperative, rather than a traditional franchise. This fosters a higher level of responsibility throughout the company and builds a strong corporate culture, which he says “is exactly the kind of company you want in your city.”
Since opening in 2012, Ace has experienced improved import service to its East Coast Retail Support Centers, which supply hundreds of retail stores. As a result of the increased productivity, Ace has seen growth throughout the company and has been able to bring different avenues of business into the Suffolk facility, which was previously not possible because of space limitations.
Building on its success, Ace Hardware announced in February 2017 that it will expand the Suffolk facility. Construction began in April and will add 138,000 sq-ft to the existing space. “Ace’s continued year-over-year sales growth has fueled our need for a larger facility in Suffolk,“ says Flanders, “and we’re pleased that the City of Suffolk and CenterPoint Properties are able to accommodate our needs as we increase our operations facilities to meet the needs of our business demands.” Once the expansion is complete, the facility will have the capacity to supply products to 10 of Ace Hardware’s 14 Retail Support Centers, reaching retail stores as far as Texas, New York and Florida.
Aerial view of the 138,000 sq-ft expansion to Ace's Re-Distribution Center.
Flanders also expressed that cooperation was an important part of the selection process and success thereafter. “From the first interaction with stakeholders in the region, including the Alliance, The Port of Virginia and State/Local officials,” he notes, “we have received excellent support. It was important for us to have confidence in the organizations involved to ensure the process could proceed seamlessly.” The Alliance is pleased to have played a role in said process and looks forward to Ace’s continued success in our region.
The upcoming expansion has a target completion date of November 2017. When asked about their future plans for the Suffolk facility, Flanders said that Ace looks forward to continuously growing the import model in Suffolk to support the company’s overall supply chain, and "exceed the expectations of our Ace store owners."