True Value Company Details New Vision, Retail Strategy

Friday, March 23, 2007

Building on one of the top earnings performances in company history, True Value Company today outlined its new vision, drawing the blueprint for continued success at retail and profitable growth. The approach is pillared by a three-year strategy to improve retail support to members; build retail relevance competitiveness; and grow new retail outlets by helping retailers open new store locations and expand the physical size of existing stores.

True Value's Spring Market is one of two large-scale annual events where more than 1,000 vendors display the latest in hardware and home improvement products to 4,600 invited member retailers. During today's general session meeting, President and CEO Lyle Heidemann explained how True Value will stay competitive among increasingly discerning consumers and a retail marketplace that is dominated by big boxes. "Our vision is to help every True Value be the best hardware store in town," said Heidemann. "Being the best is more than just growing in size; from our new Retail Growth Program to our continuous line reviews of product offerings, it's our responsibility to equip our members with the tools and resources needed to operate a profitable retail store and continue providing their customers with the top-notch service and expert advice that they've come to expect from their local True Value." GROWING TRUE VALUE'S FOOTPRINT The largely organic growth plan which True Value will implement from 2007-2009 increases the level of co-op support available to store owners who are ready to grow, and enhances the company's market intelligence capabilities and programs to enhance store owner profitability through the implementation of retail best practices. True Value's Retail Growth Program is intended to help members open new store locations, relocate their existing store to a better location or expand their current location. The co-op's top priority is to invest in its current retailers, with a secondary focus on outside investors.

True Value's goal over the next three years is to add over 1.5 million square feet of retail and $225 million of retail sales a 154 percent increase over the past three years. With the boost provided by the Retail Growth Program, True Value's goal is to open or expand one store per week by mid-2007, then increase the pace of growth to two expansions or store openings per week by 2008. EXPANDED ADVERTISING CAMPAIGN Taking a cue from consumer feedback that True Value is the place for expert advice, the co-op's new print and television advertising campaign for 2007 depicts a depth of True Value associate experiences and a broad array of product offerings for many different types of small home improvement and repair projects. "Customers have always rated True Value high for offering expert advice," stated Carol Wentworth, vice president of marketing for True Value Company. "As our 2007 consumer advertising campaign illustrates, True Value also has a wide selection of quality products that customers need to get their small projects done right the first time around." These new ads are currently in magazines on newsstands across the country, and television spots are set to air starting April 16.

PRODUCT FOCUS True Value's wide range of products allows member retailers to customize their store assortments based on customer needs within the communities that True Value retailers serve. In 2007, the co-op will continue its successful product line review program to help further differentiate True Value retailers from their competitors. With more than 90 Certified True Blue assortments now available, store owners can buy items knowing that they are getting the latest, most up-to-date, competitively priced products in the industry.

"Members are realizing the benefit of our Certified True Blue assortments through greater category sales, increased inventory productivity and improved bottom line," said Steve Mahurin, chief merchandising officer of True Value Company. "Our line review program also gives customers outstanding choice and value in key departments throughout True Value stores." Since the start of these programs in 2004, the merchandising team has generated cash and product cost reductions in excess of $50 million, which is passed back to True Value retailers in the form of lower prices out of warehouse, higher retail margins and year-end patronage dividends. RECENT FINANCIAL PERFORMANCE True Value Company reported revenue of $2,050.0 million for the year ending December 30, 2006, an increase of $7.0 million compared to $2,043.0 million for the same period the year before. The co-op posted earnings of $72.8 million, an increase of $25.2 million versus $47.6 million one year ago. This year's earnings were the co-op's highest since 1988 and the third highest in the company's history. True Value, headquartered in Chicago, is one of the world's largest retailer-owned wholesale hardware cooperatives with sales of $2.0 billion in 2006. The True Value cooperative includes approximately 5,600 independent retailer locations worldwide operating under the store identities of True Value, Grand Rental Station, Taylor Rental, Party Central, Home & Garden Showplace and Induserve Supply. Additional information on True Value and its retail identities is available at www.truevaluecompany.com.

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