Ace Hardware buys majority stake in online startup
Ace Hardware Corporation has acquired a majority, controlling stake in e-commerce curation retailer the Grommet, the companies said in a press release on Tuesday. The company’s founders, Joanne Domeniconi and Jules Pieri, and their employees will continue to have some equity ownership of the company, according to the release.
The two retailers began working together in 2016 to bring products picked by the Grommet into select Ace stores. The Grommet sells items created by independent entrepreneurs, and has helped launch more than 2,500 consumer products, including FitBit, IdeaPaint, OtterBox, SimpliSafe and SodaStream, the companies said.
Ace intends to provide considerable autonomy to the Grommet, with no plans to change its strategic direction. The amount of the transaction was not disclosed.
Traditional retailers and e-commerce retailers these days are increasingly coming together. The giants in each space, Walmart and Amazon, have each grabbed a piece of the other’s turf — Walmart with its Jet acquisition last year and a slew of e-commerce buys this year and Amazon with its $13.7 billion purchase of grocer Whole Foods.
The tie-up between Ace Hardware and the Grommet may be even better aligned than those blockbuster deals, at least in terms of merchandise and customers; both appeal to do-it-yourselfers, tinkerers, camping enthusiasts, gardeners and the like. And thanks to their relationship before the acquisition, there’s evidence of the overlap: The Grommet’s customers visit Ace over 50% more often than, and spend 2.8 times as much as, the average Ace Rewards customer, the companies said Tuesday. It’s a "high quality path to meaningful growth, without having to bow down to the altar of Amazon," Ace Hardware president and CEO John Venhuizen said in his statement Tuesday.
"From the very beginning we have appreciated our alignment in support for and advancement of the independent maker," he said. "Under Ace’s ownership, I believe the Grommet can offer our customers more of that which fuels global economies and makes America special — the unbridled creativity of the local entrepreneur."
Ace is now poised to attract more of the Grommet’s customers to its site and its stores, while the Grommet could benefit from Ace’s scale, its strong position among similar customers, its expansive supply chain and a brick-and-mortar network of 5,034 stores. The Grommet co-founder and CEO Jules Pieri certainly thinks so, suggesting in a statement that the two will make a strong partnership.
"The Grommet has often been called a 'general store for innovation,' and Ace is a trusted destination for the goods and services homeowners need to take care of their homes. That is a powerful combination," he said. "Both companies have a deep heritage of helping local businesses thrive, so our values are uncannily compatible. And how fitting is it that our company is named after a humble piece of hardware? There is some destiny at work here."
- press release via BusinessWire Ace Hardware Acquires Majority Stake In E-Commerce Startup, The Grommet
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