Berkshire Hathaway's Benjamin Moore to Become Main Paint Supplier for Ace Hardware -- 2nd Update
July 10 2019 - 7:03PM
Dow Jones News
By Austen Hufford
Ace Hardware Corp. said it is making Berkshire Hathaway Inc.'s
Benjamin Moore its main paint supplier, pushing paint made by
Sherwin-Williams Co. out of its thousands of U.S. home-improvement
stores.
The deal is a setback for Sherwin-Williams as a few big U.S.
paint makers buy up small rivals and jostle for market share. Four
companies make 90% of the paint used on homes and buildings in the
U.S., according to ChemQuest Group: Sherwin-Williams, PPG
Industries Inc., Masco Corp. and Benjamin Moore.
Sherwin-Williams struck a deal last year for Lowe's Cos. to sell
its paint, stains and brushes exclusively. That pushed most
products from PPG out of the second-biggest home-improvement chain.
Lowe's rival Home Depot Inc. is the sole retailer for Masco's Behr
brand and heavily markets those paints.
Benjamin Moore has long said that it would sell paint only
through independent dealers and hardware stores, forgoing large
home-improvement chain stores like Home Depot. Warren Buffett,
Berkshire Hathaway's chairman, forced out a previous Benjamin Moore
chief executive who wanted to depart from that strategy.
"We are fully committed and are going to continue serving and
supporting that independent channel," Benjamin Moore Chief
Executive Dan Calkins said Wednesday in an interview.
Benjamin Moore said it would start making Ace Hardware's house
paint brand, Clark+Kensington, later this year. The Montvale,
N.J.-based unit of Berkshire Hathaway said it also would sell more
of its own Benjamin Moore-branded paints in more Ace stores.
Benjamin Moore executives said they want to reach about 3,500 of
Ace's 4,500 stores. The paint maker said it would add sales staff
and expand shifts at its factories to accommodate a projected
increase in sales through Ace. Benjamin Moore said it expects the
deal to expand its 30% share of paint sold in U.S. hardware
stores.
Some Benjamin Moore products are currently sold at about 1,000
Ace locations. Ace stores are independently owned, meaning that
owners ultimately determine which brands they stock, and some don't
stock much paint.
Sherwin-Williams said many of its products beyond the store
brand and its Optimus paint will continue to be sold at the
three-quarters of Ace stores that currently carry them, including
its Valspar paints and Minwax stains. Sherwin-Williams bought
Valspar in 2017.
Valspar in turn bought Ace's own paint-making business in
2013.
Shares of Sherwin-Williams dropped slightly after The Wall
Street Journal reported the new partnership and closed down 1% on
the day. Berkshire Hathaway's shares fell 0.3% on Wednesday.
John Surane, Ace's chief merchandising officer, said the company
wanted to work with a paint maker focused on smaller paint shops.
Sherwin-Williams makes most of its sales at Lowe's and its own
4,000 stores in the U.S.
"Benjamin Moore is fiercely loyal to the independents," Mr.
Surane said.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
July 10, 2019 18:48 ET (22:48 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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