Published on 30 - April - 2008

News

Hardware co-operative in deal with environmental department.

US – Ace Hardware has struck an agreement with the Department of Environmental Services so that homeowners and small businesses can recycle used flourescent lamps.

Users of energy saving compact fluorescent lights (CFL) can recycle the bulbs at participating Ace Hardware stores as the spiral shaped bulbs contain a small amount of mercury and cannot be discarded in regular bins.

Ace hopes to attract repeat customers by offering to recycle CFLs.

An owner of two Ace Hardware stores told cbs4denver.com: "What more natural place to recycle the CFL than the place where you're going to get the new one?"

Ace is also accepting broken CFLs, but they must be sealed in a zip-lock bag.

Profits drop

Earlier this month, Ace Hardware reported 2007 net income of $90 million (£47m), down from $95m (£48m) in 2006. The slight drop in profit was due to the opening of a new distribution centre.

Wholesale income (that is, sales made to Ace's co-operative of independent store owners) rose to $3.97 billion (£2.01bn) from $3.93 billion (£1.99bn) in 2006, driven by higher international revenues.

The co-operative has 4,600 hardware stores worldwide that generate about $13bn (£6.6bn) in retail sales a year.

However, Ace is facing a membership concerned with its move to switch from a dealer-owned co-operative to one that is corporation owned.

Shortly after announcing the conversion, Ace management discovered an accounting error that erased $152m (£77m). Ace restated financial results for 2004, 2005 and 2006 and cut the annual dividend it pays its members.

It led to the formation of an opposition group of dealers that has submitted its own candidates to run for four of 12 open seats on Ace's board of directors.

A group called the Concerned Ace Owners (CAO) enlisted the support of The National Cooperative Business Association (NCBA) to help the CAO elect new board members that it believes are more representative of the Ace membership and pledge to maintaining the company as a co-operative.

"It was shocking to so many of us in the co-operative community when Ace management announced last year their intention to turn from a locally oriented cooperative to a for-profit stock corporation," said Paul Hazen, NCBA president and ceo.

More than 700 Ace owner-members registered with the CAO on its website, according to the organisation.