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Beginning July 1, Ace Hardware became the wholesale supplier to Mitre 10, a New Zealand cooperative comprised of 81 member-owned stores. Hardware Retailing magazine interviewed Robert Moschorak, president of Ace Hardware International regarding some of the details of the agreement in the following exclusive interview.
Hardware Retailing (HR): What prompted the new partnership? How does Mitre 10/New Zealand play into Ace’s overall international objectives?
Robert Moschorak (RM): As the leader in the market, Mitre 10 continually seeks opportunities to increase its value contribution to its retailers. Mitre 10 feels that Ace offers the product assortments and retail programs necessary to extend its competitive advantage in New Zealand. Access to Ace’s vendors, including our Shanghai based purchasing office will also bring great value to the group in terms of Ace’s many “China Direct” programs driving improved product margins for the retailers.
HR: Is this new partnership a merger or a simple sourcing partnership? Will Mitre10 be sourcing only certain products from Ace? All products? Are there any particular products/assortments or brands Mitre 10 is particularly looking to source through Ace?
RM: The initial focus of the Agreement will be to make the entire range of Ace products, more than 100,000 SKUs, available to Mitre 10. Mitre 10 has interest in many of Ace’s private label and national brands that have been so successful in the USA. Additionally, Mitre 10 also now has access to a wide assortment of products and programs exclusive to Ace international retailers that have been adapted to the international markets they serve.
HR: What happens to Mitre 10’s current suppliers?
RM: Mitre 10 will continue to manage its supplier relationships at its discretion. With respect to working with other US-based hardware coops, Mitre 10 has chosen to work exclusively with Ace.
HR: Will Mitre 10 stores ultimately become Ace stores?
RM: The Mitre 10 brand is positioned extremely well in New Zealand and, as such, the current Agreement does not contemplate Mitre 10 stores converting to Ace branded stores.
HR: What challenges does Ace face by supplying product in New Zealand? Are there any unique shipping or sourcing challenges?
RM: Each country has its particular characteristics in terms of consumer tastes, cultural idiosyncrasies, and import regulations. Ace has an international merchandising team focused on developing products that meet local needs and demands, and we do not anticipate any particular challenges to servicing New Zealand. Mitre 10 has a well-developed product offer and supply chain for its retailers and Ace plans to complement that infrastructure.
HR: How does the new partnership ultimately benefit domestic Ace retailers?
RM: The Ace/Mitre 10 alliance will add more purchasing through Ace thereby increasing Ace’s volume purchases and supporting revenue growth of Ace International. The more Ace retailers that buy through Ace, the greater the purchasing power Ace generates with vendors around the world which benefits the entire Ace retailer family in terms of product range and lower prices to the retailer.
