Lowes Companies (NYSE:LOW)
Historical Stock Chart
2 Months : From Jun 2019 to Aug 2019
By Austen Hufford
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 11, 2019).
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.
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(END) Dow Jones Newswires
July 11, 2019 02:47 ET (06:47 GMT)
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