Ace Hardware History: From Chicago Buying Group to Cooperative

Ace Hardware began with a practical problem faced by independent hardware merchants: larger competitors could buy in greater volume and use that scale to their advantage.

In 1924, Richard Hesse and other Chicago-area hardware dealers responded by organizing a buying group. By pooling purchases, the dealers could obtain merchandise in bulk while keeping their stores independently owned.

That basic idea became the thread running through the next century of Ace Hardware’s history. The organization expanded its distribution reach, transferred ownership to its participating retailers, imposed stronger retail standards when large home-improvement chains increased competitive pressure, and later added corporate-owned stores, broader wholesale operations, digital commerce, and home services.

A Quick Look at the History of Ace Hardware

Independent Dealers Build a Shared Buying System

The original Ace model was not built around a centrally owned chain of stores. It was built around independent merchants trying to gain some of the economic advantages available to larger competitors.

Richard Hesse and fellow Chicago-area hardware dealers organized the buying group in 1924. The participating dealers pooled purchasing volume so they could buy merchandise in bulk at lower cost while continuing to own and operate their own stores.

Ace’s corporate history says the partners adopted the Ace name in 1927. The business was incorporated in Illinois in 1928 as Ace Stores, Inc., and the corporate name changed to Ace Hardware Corporation in 1931.

The arrangement gave local stores access to centralized purchasing without requiring them to give up local ownership. That combination of shared scale and independent retail ownership became the foundation of the later cooperative.

From Regional Buying Group to a Wider Distribution Network

Ace expanded steadily beyond its Chicago origins. By the end of the 1940s, its corporate history reported that the organization supplied 133 stores in seven states.

The network continued to grow during the 1950s. Ace reported $24.5 million in sales and 325 stores in 1959.

Expansion accelerated geographically during the 1960s. Ace began pushing more deliberately into southeastern and western markets, and historical accounts place major distribution centers in California and Georgia by 1969. Those facilities extended the distribution system beyond its earlier regional base.

International activity also began to enter the story during this period. Ace International later described the company’s international involvement as beginning in 1968. Another Ace history page points to a Guam store in 1975 as an important early international retail milestone. Those dates describe different parts of the company’s overseas development rather than one single starting event.

A 1973 Successor Merger and the Cooperative Structure

By the 1970s, Ace had grown far beyond the original Chicago buying group. Its legal lineage also changed.

In 1973, the Delaware Ace Hardware Corporation became successor to the earlier Illinois Ace Hardware Corporation through a merger. A later SEC filing described Ace using cooperative and member terminology, reflecting the structure that remains central to the business.

Today, participating retailers own Ace Hardware Corporation, while most Ace-branded stores remain independently owned and operated. That arrangement differs from a conventional chain in which a central company owns every location.

Ace has been based in Oak Brook, Illinois, since 1974. During the following decade, the cooperative continued to expand its wholesale scale. Ace’s corporate history reports that wholesale sales passed $1 billion in 1985.

Local ownership still depended on centralized capabilities. As the network expanded, purchasing, distribution, and retailer support became increasingly important ways to give independent stores collective scale.

Big-Box Competition Changes the Retail Strategy

By the 1990s, large-format home-improvement retailers were putting more pressure on independent hardware stores. Shared purchasing alone was no longer the only issue. Store presentation, operating efficiency, growth, and customer experience were becoming more important parts of competition.

In 1990, Ace created Ace International Hardware Corporation as a separate organization to manage overseas brand and product demand.

Four years later, Ace officers and the board launched a strategic program known as the New Retail Age of Ace. Historical accounts describe the program as an effort to improve retail performance and operating efficiency, increase international growth, accelerate store development, and place stronger expectations on participating retailers.

The change marked an important broadening of the cooperative model. Ace still provided the advantages of shared purchasing and distribution, but management and the board were also putting more structure around how member stores presented the brand and operated.

By 1997, Ace’s corporate history reported more than 5,100 stores in 62 countries on six continents, illustrating how far the network had expanded beyond its original regional base.

The 2007 Accounting Problem Forces a Restatement

Ace encountered a major internal control problem in 2007 while management was exploring a possible conversion from the cooperative structure to a more traditional corporation.

An internal review found a large difference between inventory recorded in the general ledger and the company’s perpetual inventory records. Early reporting put the discrepancy at approximately $154 million.

Ace suspended the proposed structural conversion and brought in outside advisers to investigate. The company later restated its financial statements for 2004 through 2006. Reporting after the investigation described the inventory-accounting discrepancy as $152 million and said improper entries had been made by a mid-level finance employee.

The restatement reduced previously reported net earnings by $33.5 million for 2004, $19.3 million for 2005, and $18.9 million for 2006. Contemporary reporting also quoted management saying that no money or physical inventory was missing.

The episode exposed a significant accounting and control failure. Ace corrected earlier financial reporting, strengthened finance controls and staffing, and continued operating as a cooperative.

The practical lesson from this period is narrower than a generic warning about growth. Even a long-established cooperative with a successful operating model can create serious problems when financial controls do not keep pace with organizational complexity.

Ace Expands Beyond the Traditional Cooperative Role

The years after the restatement brought a different kind of expansion. Ace began adding businesses that went beyond the central cooperative’s traditional role as a wholesaler and support organization for independent retailers.

In 2012, Ace acquired Westlake Ace Hardware, then described in Ace’s historical material as its largest member, for $88 million. The acquisition materially expanded Ace’s direct involvement in retail operations. Most Ace-branded stores remained independently owned, but the organization now had a growing corporate-owned retail platform as well.

John Venhuizen became chief executive officer in 2013. Ace’s historical material says he launched the 20/20 Vision strategy that year.

The organization also expanded its wholesale capabilities outside the traditional Ace member network. Ace acquired Emery-Waterhouse in 2014 and Jensen Distribution Services in 2015. Those businesses became Emery Jensen Distribution under Ace Wholesale Holdings LLC.

The changes made the enterprise more diversified. Ace still supported independent retailer-owners, but it also operated a corporate retail business and a broader wholesale distribution business.

That distinction is important when reading later Ace store counts. Most Ace stores are locally owned and operated, while Ace Retail Group represents a separate portfolio of stores directly owned and operated within the larger enterprise.

Digital Commerce and Home Services Broaden the Model Again

Ace added another capability in 2019 when it acquired Handyman Matters. The business was later rebranded as Ace Handyman Services and became part of a broader home-services strategy.

The timing mattered because consumer behavior was also changing. Digital channels were becoming more important, and management later described a gradual shift in some home projects from do-it-yourself work toward consumers hiring professionals.

The COVID-19 period accelerated several of those trends. Ace reported full-year 2020 revenue of $7.8 billion, up 27.9% from 2019, with net income of $316.9 million. Management attributed the exceptional year to factors that included essential-retail status, supplier and supply-chain capacity, and a surge in home-and-garden demand.

Digital commerce grew sharply at the same time. Ace reported that revenue through acehardware.com increased 272% for the year.

The growth of digital ordering did not replace the local-store model. It added another way for consumers to use it. Local inventory, pickup, delivery, online ordering, and physical-store service increasingly operated as parts of the same retail system.

Home services extended the model in another direction. By 2024, Ace reported more than 400 home-services locations across the continental United States, although the available services varied by market.

The Centennial Era: Stores, Supply Chain, and Home Preservation

Ace reached its 100th year in 2024 with a business that looked much broader than the original dealer buying group.

The company reported 2024 revenue of $9.5 billion and net income of $314.1 million. It also reported 215 new domestic stores during the year and more than 5,900 stores in the annual-report presentation.

At the same time, management was investing in the physical store network rather than treating digital growth as a replacement for stores. In a 2024 interview with the National Retail Federation, CEO John Venhuizen described a planned $1 billion program called Elevate Ace focused on new and remodeled stores and more experiential presentations in categories including paint, power, backyard and barbecue, and home preservation.

Venhuizen summarized the underlying objective simply: “It’s about staying relevant to the customer.”

His comments also framed Amazon and changing convenience expectations as important competitive pressures. Ace’s response, as he described it, combined digital investment with local inventory, service, differentiated in-store experiences, and a broader focus on home preservation.

Supply-chain investment continued as well. In 2025, Ace opened a 1.5-million-square-foot Retail Support Center in Kansas City, Missouri. For the full year, the company reported revenue of $10.0 billion, $361.8 million in patronage dividends, and 180 new stores.

Where Ace Hardware Stands in 2026

Ace Hardware Corporation remained a retailer-owned cooperative at the September 29, 2026 research cutoff. John Venhuizen served as President and Chief Executive Officer, and Steven Burggraf served as Chairman of the Board.

The organization had become much broader than a shared purchasing group. Its operations included the cooperative’s wholesale and retailer-support functions, Ace Retail Group, Emery Jensen Distribution, international operations, and Ace Hardware Home Services.

For the second quarter of 2026, Ace reported record quarterly revenue of $3.0 billion and net income of $155.6 million. At the end of the quarter, the company reported 5,283 domestic stores and said its broader global network served more than 8,950 locally owned and operated stores.

Recent strategy continued to focus on new stores, remodeling through Elevate Ace, digital commerce, supply-chain investment, and home-preservation services. Those were announced and ongoing directions at the research cutoff, not guarantees of future results.

A Cooperative Model That Kept Expanding Its Tools

Ace Hardware’s history is not simply a story of adding more stores. The more important pattern is how the organization repeatedly added new forms of scale while keeping retailer ownership at the center of the model.

The first tool was joint purchasing. Distribution followed. Retail standards became more coordinated as competition changed. Later came corporate-owned stores, broader wholesale distribution, digital commerce, and home services.

The structure became more complex, and the 2007–08 accounting restatement showed that complexity could create serious internal weaknesses. Yet the cooperative itself remained intact.

By 2026, Ace Hardware Corporation connected thousands of locally owned stores with centralized purchasing, distribution, digital systems, corporate retail operations, wholesale businesses, and home services. The business had moved far beyond its original 1924 buying group without abandoning the central idea that independent retailers could gain scale by working together.

Timeline

This timeline highlights the major milestones that shaped Ace Hardware’s development from a Chicago buying group into a retailer-owned cooperative with a broader set of retail and service businesses.

1924

Richard Hesse and other Chicago-area hardware dealers organize a buying group so independent stores can pool purchasing volume.

1928

Ace Stores, Inc. is incorporated in Illinois.

1931

The Illinois corporation changes its name to Ace Hardware Corporation.

Late 1940s

Ace’s corporate history reports that the organization supplies 133 stores in seven states.

1959

Ace reports $24.5 million in sales and 325 stores.

1963–1969

Ace expands more deliberately into southeastern and western markets. Historical accounts place major distribution centers in California and Georgia by 1969.

1973

The Delaware Ace Hardware Corporation becomes successor to the earlier Illinois corporation through a merger.

1974

Ace establishes its corporate base in Oak Brook, Illinois.

1985

Ace’s corporate history reports that wholesale sales pass $1 billion.

1990

Ace International Hardware Corporation is created to manage overseas brand and product demand.

1994

Ace officers and the board launch the New Retail Age of Ace program to strengthen retail performance, operating efficiency, international growth, and store development.

2007

Ace discloses a major inventory-accounting discrepancy and suspends a proposed conversion from the cooperative structure to a traditional corporation.

2008

Ace restates its 2004–2006 financial statements after the accounting investigation.

2012

Ace acquires Westlake Ace Hardware, materially expanding its corporate-owned retail operations.

2013

John Venhuizen becomes CEO. Ace’s historical material says the 20/20 Vision strategy begins that year.

2014–2015

Ace acquires Emery-Waterhouse and Jensen Distribution Services. The businesses become Emery Jensen Distribution under Ace Wholesale Holdings.

2019

Ace acquires Handyman Matters, which is later rebranded as Ace Handyman Services.

2020

Ace reports $7.8 billion in full-year revenue and a sharp increase in digital commerce during the COVID-19 period.

2024

Ace reaches its centennial year. Management also describes the Elevate Ace investment program for new and remodeled stores.

2025

Ace reports $10.0 billion in annual revenue and opens a 1.5-million-square-foot Retail Support Center in Kansas City, Missouri.

2026

Ace reports $3.0 billion in second-quarter revenue, 5,283 domestic stores, and a broader global network serving more than 8,950 locally owned and operated stores.

FAQs

Question: Who owns Ace Hardware?

Answer: Ace Hardware Corporation is owned by its participating retail entrepreneurs and shareholders. Most Ace-branded stores are independently owned and operated rather than being branches owned directly by the central corporation.

Question: Is Ace Hardware a franchise or a cooperative?

Answer: Ace Hardware Corporation’s defining ownership structure is a retailer-owned cooperative. Ace also uses franchise-development terminology in some recruitment material, but participating retailers own the central cooperative.

Question: Who founded Ace Hardware?

Answer: Ace traces its 1924 founding to Richard Hesse and fellow Chicago hardware dealers E. Gunnard Lindquist, Frank Burke, and Oscar Fisher.

Question: Why was Ace Hardware created?

Answer: The original dealers formed the buying group so independent hardware stores could purchase merchandise together in bulk, lower purchasing costs, and compete more effectively.

Question: Does Ace Hardware Corporation own every Ace store?

Answer: No. Most Ace stores are locally owned and operated. Ace also has a separate corporate-owned retail portfolio through Ace Retail Group.

Question: What happened in Ace Hardware’s 2007 accounting problem?

Answer: Ace found a large discrepancy between its general-ledger and perpetual inventory records. The company suspended a proposed structural conversion, investigated the problem, and later restated its 2004–2006 financial statements.

Question: What businesses does Ace operate beyond supporting independent hardware stores?

Answer: The modern Ace enterprise includes corporate-owned retail through Ace Retail Group, Emery Jensen Distribution, international operations, and Ace Hardware Home Services in addition to the cooperative’s wholesale and retailer-support functions.

Interviews & Firsthand Resources

John Venhuizen on Ace Hardware’s Experiential Store Strategy

This National Retail Federation interview with CEO John Venhuizen covers the Elevate Ace program, digital commerce, competitive pressure from Amazon, home preservation, and Ace’s approach to differentiating its stores. It is especially useful for understanding the company’s strategy during the centennial era.

View the resource

Retail Unwrapped Interview With John Venhuizen

This 2024 conversation with Venhuizen looks at Ace’s cooperative model during its centennial year and discusses the company’s newer store concept. It provides a firsthand management perspective on how Ace described its retail direction at 100 years.

View the resource

Staying Close, Moving Fast

This trade-publication Q&A with Venhuizen focuses on convenience, local inventory, digital capability, and current change in the hardware business. It adds another firsthand view of how management is positioning Ace’s combination of local stores and centralized capabilities.

View the resource

Sources

• Ace Hardware Corporation: Life at Ace Hardware, About Ace Hardware, International Careers
• U.S. Securities and Exchange Commission: Ace Hardware Corporation Form 10-K
• Encyclopedia.com: Ace Hardware Corp
• Daily Herald / Associated Press: Ace Hardware Finds $154 Million Error
• CFO.com and Franchising.com: Poorly Trained Finance Worker Makes $152M Flub, Ace Hardware Announces Restated Financial Results for 2004–2006
• Ace Hardware Corporation: John Surane Officer Bio, Officer Bios, 2025 Board Announcement
• Ace Hardware Corporation: 2019 Annual Report — Message to Shareholders, Ace Hardware Home Services Milestone
• Ace Hardware Corporation: 2020 Full-Year Results, 2020 Annual Report — Message to Shareholders
• National Retail Federation: Ace Hardware CEO John Venhuizen on the Retailer’s New Experiential Format
• Ace Hardware Corporation: 2024 Annual Report, 2025 Annual Report, Kansas City Retail Support Center Announcement
• Ace Hardware Corporation: Second Quarter 2026 Results