MARCH 2010 ENTREPRENEUR OF THE MONTH:
Gina Schaefer, owner
ACE Hardware, D.C.
Article by Hope Katz Gibbs
Owning a string of hardware stores in downtown Washington, D.C., isn’t what you’d expect Gina Schaefer to say she does for a living when you meet the perky, petite 39-year-old. But she and husband Marc proudly stand at the helm of an $19 million company that owns 9 ACE stores in Washington, DC and Baltimore.
Why did the woman who graduated with a degree in political science, and worked for a few years at the Children’s Defense Fund, get into the hardware business? “We were young and dumb,” Schaefer says with a grin. But the real answer seems to be equal parts necessity, opportunity, humility — and true grit.
WHAT SHE DOES:
Bring customer-friendly, home-maintenance shops back to Main Street
Gina Schaefer was the manager of intangible assets (which meant she arranged great beer parties and spoiled the staff) at a high-tech firm in Bethesda back in 2002. That was before the tech bubble burst, and Gina had an inkling it was coming.
One day she came home from work and told Marc Friedman, her husband of just a few months, that she wanted to quit and open a hardware store in Logan Circle. She’d worked in a hardware store as a teen, but never got to handle the hardware because girls could only run the register. That didn’t stop her.
And neither did Marc. “She was so adamant that even if I wanted to I knew that I couldn’t stop her.” He sent emails to ACE Hardware and True Value.
After all, he understood why Gina saw that a D.C. hardware store was needed in the neighborhood.
She explains: “We had just moved into a fixer-upper, and so had all of our friends. The only place to get tools and nails and toilets and wood was at Home Depot in D.C. Or, you had to get into a car and trek out to the suburbs. I didn’t want to do that. I didn’t even want to own a car, and actually sold it years ago. But I did want to fix up our new condo. I figured if the mountain won’t come to Muhammad, Muhammad must go to the mountain.”
ACE apparently agreed with her reasoning, and within a week a representative responded to Marc’s query.
A hardware cooperative based in Oak Brook, Illinois, ACE was founded in 1924 to provide a centralized purchasing organization to supply members’ stores. Total revenues for the fiscal year ended January 2010 were $3.5 billion.
“Even back in 2002 ACE had its act together, and I liked that,” Gina says. In June 2002, she and Marc incorporated their company. By March 2003, they had leased space in Logan Circle, taken a training course, and stocked the tiny store with close to 20,000 products.
WHY SHE DOES IT:
“We used to joke that because there isn’t a hardware store nearby to purchase light bulbs, picture hooks or toilet repair kits, city dwellers are sitting in the dark with pictures on the floor, listening to a running toilet. I wanted to change that.”
Admittedly, when Gina told people she was opening an urban hardware store, they thought she was crazy.
“But I knew it was the right thing to do. I am a firm believer in the concept of the mom and pop shop. In the 1950s, people only shopped on Main Street in D.C. The riots of the ’60s changed that but by 2002, people were tired of the suburbs and wanted to support independent retailers again. I wanted to be part of that resurgence.”
Immediately, the store was a hit. In fact Marc, who kept his day job for a while — just in case — quit three months later and became the company’s CFO. Marc jokes today: “When we used to sit on a panel at new investor orientations for ACE, I’d describe her as ‘Hurricane Gina’ because she just goes in and makes things happen.”
Gina says she simply didn’t know what she didn’t know, so she constantly asked for help and advice. “The men at ACE were so helpful. I just had to do exactly what they said, and it worked.”
Indeed. In 2005, Gina and Marc opened a second store, and a third in 2006, adding about one store per year thereafter. She’d like to eventually open 10.
“We really love owning these stores and are so pleased that from the first month we were in business, the local people embraced us. We’d go to a town hall meeting to introduce ourselves, and we’d get a standing ovation. It is clear that people want to shop locally, and we are more than happy to fill that need.”
According to Barry C. Lynn, author of the new book, Cornered — The New Monopoly Capitalism and the Economics of Destruction, Gina and Marc are part of an important trend. “The dream of owning a successful small business is still alive in America and remains an essential part of our national self-image.”
Click here to read about Cornered.
HOW SHE DOES IT:
Spoil the customers, spoil the employees, sell great products
Although Takoma Park Ace Hardware isn’t technically an urban store like Glover Park or her 5th Street store, Gina thinks the density is high enough there that people shouldn’t need to leave Takoma Park to shop for basic necessities.
Like the other stores, it will feature an enhanced lawn-and-garden section, and traditional home-maintenance departments such as paint, cleaning, tools, plumbing, hardware, outdoor, house wares and novelty gifts. It will also offer a variety of services including key-cutting, glass and woodcutting, tool rentals, delivery, paint matching, lock re-keying, and knife and scissor sharpening.
The secret to her success, she believes, is treating her customers right. One customer recently said: “I love the personal service offered. I see familiar faces that want to help me. Our dogs drag me into the store whenever we pass it so they can get a treat. I like that they think of them. We have been going to the Logan Circle store since it opened.”
Gina uses the same nurturing approach with her employees — and thinks it might be those old instincts coming through from her days as manager of intangible assets. “But really, my philosophy is to treat the staff well because then they’ll be more likely to treat the customers well. It’s not hard. It’s nice. And it’s good business.”
Case in point: Eddie. Although she didn’t set out to help her underprivileged neighbors when she opened her stores, she has established a training program for her employees. Eddie Foster, in fact, was 14 when she hired him to work as an intern in the summer of 2008.
She and her managers taught him the ropes of the hardware business, explained that a smile gets you farther than a grimace, and Eddie became a star employee. This fall, he went off to college. “I felt like a proud mother. It was so great.”
Gina also works closely with Jubilee Jobs, a D.C. organization that helps her find employees. Often, these candidates are working to overcome an addiction.
“Our motto is that we give second chances. I figure that if I don’t do it, who will? Everyone makes mistakes, and it’s often because people don’t have good role models. We are trying to provide that safe haven. The result is that we help people — whether that means selling them a wrench to fix the toilet or find a job so they can get off welfare or drugs. It seems like a good way to run a company.”
Click here to read Gina’s Tips for Entrepreneurs.
