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True Value takes lessons from rivals

Hardware store co-op looks to battle the big box chains

CHICAGO -- True Value Co. chief Lyle Heidemann spends a lot of his time shopping these days. Roaming the aisles of big-box competitors and other retailers that have put hundreds of its member stores out of business, Heidemann and True Value are actively on the prowl for more customers after a restructuring that has cleaned up its financial problems and given it new momentum.

Whether it can regain business lost to home improvement behemoths Home Depot Inc. and Lowe's Cos. remains questionable. But after years on the defensive, the 6,000-store member-owned cooperative is fighting back with an aggressive marketing strategy and what its first-year chief executive calls ''a whole new beginning" for True Value. The quest: Attract more ''weekend warriors" away from the giant stores.

''We're trying to now not [just] survive but in essence put together a strategy for growth," Heidemann said in an interview at True Value's headquarters.

True Value always acted as a wholesaler to its retail members, but now it is focusing more on what will help them improve store sales and profits, he said.

In 1989, sales exceeded $2 billion and nearly one in every four US hardware stores bore the True Value name. Since then, the cooperative has been buffeted by the relentless expansion of giant discount-store competitors, financial losses, and accounting errors. More than 1,000 members have left, most closing down but some defecting to rivals such as Ace Hardware.

Retail consultant Howard Davidowitz isn't sure True Value can be viable in the face of continuing growth by the discount powerhouses.

''They do have a convenience element, and they have some niche businesses," said Davidowitz, chairman of Davidowitz & Associates Inc. in New York. ''But in this environment of Wal-Mart, Target, Home Depot, and Lowe's, can they be competitive on price? I think the book is out."

After listening to customer focus groups for months, True Value is targeting not bargain-hunters or advice-seekers but the ''do-it-yourself enthusiasts" who already account for an estimated 43 percent of its sales. The goal: to get them to come to True Value first for small projects such as painting, refixturing a bathroom, or changing lighting.

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