By Craig Webb
Dan Starr’s predominately sweet talk was laced with a bit of vinegar when he described what True Value was like before Do it Best acquired the dealer network last November.
“The business had been mismanaged at the highest levels,” Starr (pictured above) said March 21 at the kickoff for Do it Best’s spring market. True Value was “led by a private equity group that unsurprisingly put their own interests ahead of the retailers they were meant to serve,” he said. “And adding insult to injury, private equity awarded themselves significant management fees ... to the tune of more than $11 million. Nearly $2 million over the last two years to recoup as much as they could. … [W]e were compelled to step in.”
Starr then poured more vinegar when he said unnamed other companies could have bid to acquire True Value”but decided to stand on the sidelines to try to pick off the retailers they wanted. Do it Best stepped in to prevent massive disruption to all retailers.”
Those darts represent two of Do it Best’s arguments as it strives now to retain as many of the roughly 1,000 True Value dealers despite wooing from other distributors, particularly Orgill and Ace. Do it Best maintains it showed devotion to the the co-op cause, promoting itself as the “Champion of Independents.” It also values a True Value brand name that still enjoys 70% name recognition. The co-op plans to promote that name anew, and wouldn’t object to current Do it Best members embracing it.
The Spring Market in Orlando was the first event to include True Value stores and the second market to have people from United Hardware, which Do it Best took over in April 2024. The result was a flourishing of logos on shirts among the 11,000 attendees—a cornucopia of brands that Do it Best plans to support under the Do it Best Group umbrella. That includes two national brands (True Value and Do it Best), multiple specialty and service brands (Hardware Hank, Agway, Home & Garden Showplace, and True Value Rental), and whatever brand the member chooses to have.
The market’s “Bigger. Stronger. Faster.” theme definitely was visible on the show floor, Do it Best members saw a 25% increase in the number of vendors, while True Value dealers could choose from twice as many vendors as at their last show.
Organizationally, the Do it Best Group operates as two divisions—one for True Value members and the other for companies in the pre-merger Do it Best (including United Hardware stores). They keep separate financial books and have separate management teams. How long this will last isn’t certain; Starr said Do it Best is “running True Value in the short term as a separate entity to focus on the significant turnaround efforts needed to make True Value profitable again.” One benefit of doing that is that it keeps Do it Best members from thinking their rebate checks will be drained by the money Do it Best is spending on True Value.
Roughly 50% of True Value’s employees have been hired full-time by the Do it Best Group, typically to keep serving True Value customers. Another 20% of the team is on temporary service agreements, as many of them work at distribution centers that Do it Best is expected to close.
Do it Best’s LBM operation is the sole place for True Value’s more pro-oriented dealers to go, as True Value didn’t have an LBM branch. That group announced initiatives March 23 at a special marketing breakfast.
One was a replenishment buying service, in which a dedicated procurement team will manage members’ purchasing strategies on their behalf. The service is designed to cut the member’s workload, but with two caveats, both involving trust. That’s because the Do it Best staffer will be regularly looking at the members’ sales and business to make timely purchases, and because the member dealer has to believe Do it Best will negotiate a better dealer than the member can get on its own.
Do it Best also beefed up its consulting side by announcing the hire of Scott Morrison, one of the industry’s best-known experts on workflow efficiency.
Aside from those two initiatives, Do it Best also reminded dealers of its robust work in lumber futures contracts, including a new futures contract for Southern yellow pine that will begin trading this spring.