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Ace History
Ace grows through the decades: General Overview From growing pains to profits gained: 1940-1960 As Ace Hardware came out of the 1930s, the company was flying high, with stores in five states and more expansion on the horizon with a push for store modernization. By 1940, Ace Paint had become so successful its manufacturer couldn't mix it fast enough to keep up with the demand. But the rest of the world was not enjoying similar security. War was brewing overseas as Hitler's army advanced through Europe, invading Denmark, Norway, Holland, Belgium and Luxembourg and bombarding England from the air. Italy declared war on Britain and France just before President Franklin D. Roosevelt and Congress passed the Selective Service Training Act. More than 16 million men received registration cards for the country's first peacetime draft. 
This meant that suddenly capable and reliable help became difficult to find, and Ace's growth surge, like other companies in the U.S., slowed immediately. Although five new Ace stores were added in 1940, this would be the last promising growth Ace would see for years. On Dec. 7, 1941, Japanese forces launched a surprise attack on Pearl Harbor, Hawaii, and within hours, the United States was at war. Thousands of American men and women, including key Ace personnel, such as Buyers Charles McClaskey and George Cichy and Merchandise Manager Henry Oetjen, were called upon to defend the U.S. Several of the manufacturers who worked closely with Ace also answered the call to war by converting to munitions plants, drawing crowds of laborers who wanted to support the armed forces. Ace projected the war would have a severe influence over the industry and eliminated advertising expenses and reduced inventories in preparation for losses. In June, Ace hardware posted its first loss of volume since the company's inception. The loss was especially challenging because the shortage of merchandise forced the company not to accept franchise applications and no new stores were added in 1942. But, as always during challenging times, Ace directors and dealers came together to brainstorm a way to weather the loss. They sought a unique idea that would speak to the consumer's wartime need. In response to the wartime merchandise shortage and meat rationing, Ace began selling baby chickens, or "Ace Chicks," advertising them as a "conscientious way to make money." These Ace Chicks were a success for Ace during the war, despite the fact that no stores were added in 1943, and four had to be liquidated. Even with Ace's ingenuity under pressure, the company was facing hard times. Then, in 1944, 156,000 troops stormed the beach at Normandy in what was to become the most successful and decisive battle of the war. The victory boosted America's economy, but excitement of this rebound was tempered by the death of Oscar Fisher, one of Ace's five founders, who died on August 5 after complications from surgery. Fisher's duties were handed over to co-founder Lindquist, but Fisher's death left the founders with a newfound concern–what to do with the corporate stock of directors who pass away or retire? It was decided that the stock would be resold only to Ace storeowners as long as they remained with Ace. It was the beginning of Ace's perpetuation blueprint, one that would eventually lead to realizing the dream of a retailer-owned cooperative. With the end of the war, Charles McClaskey and Henry Oetjen came home and began working for Ace once again, while manufacturing plants converted back to peacetime merchandise. Once again, Ace's warehouses could be stocked and applications for new stores could be accepted. That year, Richard Hesse reported that Ace had posted sales exceeding any year in company history. By the end of 1945, six new Northwest stores joined Ace Hardware, including three in Minnesota and two in North Dakota. In 1946, Ace added a total of 10 new stores. Within this cyclone of growth, Ace began to feel cramped in its Michigan Avenue location and embarked on a plan of relocation that would take several years to complete. Having evaluated and been impressed with the operation of stores in other industries, namely grocery, pharmaceutical and automotive businesses, the first "Super Ace Store" was launched, showcasing wider aisles and departmentalized self-service displays. The Super Store concept caught on quickly, particularly in the Northwest Territory, and by 1948, several Minnesota stores were converted to this format. 
By the end of the 1940s, Ace Hardware Corporation was supplying 133 Ace stores in seven states, with wholesale sales topping $7.26 million. As the 1950s began, America remained optimistic in the midst of the Korean War, and this optimism was reflected in buying behavior. Volume sales of consumer goods, including hardware goods, increased significantly throughout the year. As consumers purchased hardware, Ace retail stores expanded, and the expansion was sustained by Ace's new Blue Island Avenue headquarters. Its spacious rooms, electric conveyor belts, gasoline-powered handling trucks and enclosed shipping area combined to help Ace post the lowest operating cost and the highest sales volume–almost $9 million–in its history. By the end of 1952, the self-service concept began to spread from store to store. Hardware clerks' responsibilities began to evolve into less hands-on and more advisory roles. Ace became a place to browse, linger and "help yourself" when the first completely "self-service" store was established in Merrillville, Ind. The success of this self-service phenomenon was tempered, however, by the death of another Ace founder–E. Gunnard Lindquist. With his passing, the Ace Perpetuation Fund, which ensured the corporate structure would continue after the passing of the last surviving owner, was established on June 8, 1953, when shareholders met to discuss the future of the company. The plan levied that each every participating Ace dealer would contribute $3,000, either in lump sum or installments. As the 1950s progressed, the Ace organization grew increasingly aware of the company's status as a national corporation. The officers wanted to capitalize on the Ace reputation, create a broader awareness of the company and solidify national recognition. During the summer convention and toy show in 1954, the dealers agreed to change all of their store signs from Ace Stores to Ace Hardware. By the 1955 convention, Hesse reported the fourth consecutive annual sales volume increase for Ace Hardware. It seemed there was no end to the potential for growth, particularly with more than 200 stores and untapped national territory. It was at this time that Ace decided to begin opening stores in Toledo, Ohio. The first three Ohio Ace dealerships were so successful that, within a year, several other Toledo stores had signed up and the expansion led to soaring profits. But this also had an overwhelming effect on the company's Blue Island warehouse. For the fifth time in its history, Ace would move–this time, to a warehouse in Bedford Park, Ill. It would take months for Ace to eventually negotiate an acceptable price for the building and move in, but the agreement began in 1959, the same year Ace celebrated its 35th anniversary with wholesale sales of $24.5 million and 325 stores. With all eyes forward Ace's team members headed into the 1960s with hope of continued expansion. They didn't know then how far the next decade would take the company. From Ace's first IBM computer to new stores in Georgia and California, Ace chartered new territory–in many ways–during the 1960s. |