They Know the Drill
The Falcone family have been innovators since 1926, when Rocco Falcone II’s grandfather opened his first hardware store in Springfield — and later doubled his profits with a foray into tool rentals. Now part of the Ace Hardware co-op, the family business has made plenty more pivots since then, adopting the home-center model in the ’70s and then shifting to a more targeted, customer-service-focused model in the ’90s to combat the rise of Home Depot. And today, at a time when the pandemic is crushing small, independent stores, Rocky’s is still growing, to 38 stores and counting.
Rocco Falcone II didn’t need a pandemic to tell him his business is essential.
His family business, Rocky’s Ace Hardware — helmed for the past 30 years by Falcone, its third-generation president and CEO — has been proving that for more than 95 years.
But when businesses of all kinds were shuttered almost two years ago, during the early days of COVID-19, hardware stores were, indeed, among the ‘essential’ businesses the state allowed to remain open.
And it’s a good thing, judging by the surge in demand that followed.
“What really took off with COVID, the first area we saw a spike, was home-improvement projects. When people were suddenly staying home, the biggest thing they were buying was paint. They wanted to be productive working at home, and have a nice home office.”
“We’re fighting with Home Depot and Lowe’s for these products, and you want to get your fair share, but there’s a disruption in the supply chain.”
When the weather warmed up, the next spike was backyard grills. “Everyone wanted to get outside because of COVID, and they were buying Weber and Traeger grills and the Big Green Egg — gas, charcoal, smokers, pellet grills … that business remained strong, and still is.”
He paused for a moment. “But we’ve had our challenges, too.”
The biggest have emerged during the second year of the pandemic, and affect industries of all kinds: namely staffing and supply-chain issues. At Rocky’s, the former involves making sure everyone is healthy.
“We employ more than 500 people,” Falcone said. “I would say not a day goes by when someone in the company isn’t out on quarantine with COVID. It’s a challenge staffing stores. We have a great staff, though, and people are willing to help out. If a store’s assistant manager is out, or two assistants are out, we have someone from another store hop over to that store.”
The supply issue, however, is more complex, and doesn’t necessarily involve the same products month to month. When Texas froze over in February 2021, paralyzing manufacturing and trucking down south, the situation crippled the supply of PVC piping and glues and adhesives — products produced in great volumes in Texas, a state most people associate more with oil and energy, Falcone said.
“The freezing created a big shortage in PVC, which you’d see when you’d go down the PVC aisles. The whole supply got disrupted.”
Oh, and back to those grills — it’s been very difficult at times to stock them, especially when big-box stores responded to the shortage by buying up six months’ worth. “That disrupted the supply chain even more. We’re fighting with Home Depot and Lowe’s for these products, and you want to get your fair share, but there’s a disruption in the supply chain.”
Or Stihl leaf blowers. “We’d be ordering at 8 in the morning, going on every day, seeing what they have. All our store managers were trying to reserve leaf blowers and other things. By 8:05, they were gone.”
All of which has spurred inflation, so store owners are seeing vendors push through price increases of 5% or 10% across the board, Falcone noted. “These are crazy times with the supply chain; now we’ve got price increases, and we’ve got to stay on top of that. It’s different for everyone. I know in the car business, new cars have gone up 5% to 10%, but used cars went up 25%. It’s kind of crazy. And we’re seeing that inflation in our prices, too.”
But here’s the thing: two years of economic disruption and shifts in customer expectations aren’t going to slow down a family business that has endured even more dramatic changes over the years — including, perhaps most notably, the rise of the big boxes starting in the early ’90s.
Tools for Success
The Rocky’s story begins much earlier that that, however — in 1926, to be exact — when Falcone’s grandfather, also named Rocco, opened a 500-square-foot hardware store at the corner of Main and Union streets in Springfield, soon relocated into larger quarters across the street, and later opened a rental center that would soon match the hardware store for annual revenue — just one of the family’s many smart ideas over the past century.
The original operation was a classic mom-and-pop operation, run by Rocco and his wife, Clara. Later, their son, Jim Falcone, would pitch in after school and on weekends. The venture survived the dark days of the Great Depression, and Rocco eventually expanded the operation in the early ’40s. When he passed away in 1965, his son, Jim Falcone, took the helm of the family business and, with his sister, Claire, as vice president, steered it toward steady growth.
“We started with rentals, hardware, paint, and wallpaper. By the ’60s and ’70s, when my father ran it, they were converting the stores to home centers, with kitchen cabinets, windows, lumber, and sheetrock.”
Rocky’s became a chain with the acquisition of a small hardware store on the corner of White Street and Belmont Avenue in Springfield, with another location soon to follow on the corner of Breckwood Boulevard and Wilbraham Road in the 16 Acres section of the city. The chain became regional with the acquisition of a small hardware store on Walnut Street in Agawam, owned by a longtime family friend.
In the mid-’70s, Jim recognized a shift in the hardware retail realm, one that would ultimately change the size and scope of the stores, increasing their size and shifting to a ‘home center’ model.
“We started with rentals, hardware, paint, and wallpaper,” the younger Rocco told BusinessWest. “By the ’60s and ’70s, when my father ran it, they were converting the stores to home centers, with kitchen cabinets, windows, lumber, and sheetrock.”
By the late ’80s, the Rocky’s chain had grown to seven locations and launched an affiliation with the Ace Hardware co-op, which offered Rocky’s the buying power of a national chain, national advertising, and the computerization of accounting and inventory procedures while still maintaining its identity.
“We really focused on automation, computerizing the business, streamlining inventory,” he recalled. “These individual-owner stores weren’t able to do that; they were still ordering with pencil and pad in the ’70s and ’80s. We got everything automated, and it took a lot of labor out of the process. That way, we could focus more on sales and customers, and spend less time ordering stuff.”
Rocco II, who moved up the ladder from store manager to director to vice president of store operations, eventually took over as president and CEO in 1992, during the rise of Home Depot — a painful time for Rocky’s and all other small hardware chains, which coincided with a long recession that impacted home buying and remodeling.
When the Falcone family was honored by BusinessWest as its Top Entrepreneur for 2006, Jim told the magazine that these larger, national chains, rather than chasing Rocky’s from the scene, provided a much-needed wake-up call, one that would ultimately make the company more efficient, competitive, and service-oriented.
“When I became president in ’92, I said, ‘hey, wait a second,’” Rocco said, and seriously reconsidered the company’s place in the industry — specifically, where they could compete most effectively on price, and where they couldn’t. So they got rid of the kitchen-cabinet business, as well as doors, windows, insulation, sheetrock, and other staples of large-scale projects.
“We got out of the building materials, and a lot of stores got smaller. In the ’90s, when Home Depot came in, we got out of new construction and focused more on maintenance and repair.”
“No one wanted to come buy sheetrock from us,” he said. “We got out of the building materials, and a lot of stores got smaller. In the ’90s, when Home Depot came in, we got out of new construction and focused more on maintenance and repair.”
Yet, the footprint kept growing. In the late ’90s, Rocky’s acquired eight stores from a chain in Eastern Mass. that was experiencing financial problems, doubling the size of the operation. Today, with 38 stores in Massachusetts, Connecticut, Florida, Maine, New Hampshire, New Jersey, Pennsylvania and Rhode Island, Rocky’s is the largest family-owned Ace retailer.
Working on Additions
While the pandemic may have tested Rocky’s, it convinced others, mainly single-store operators, to leave the game, and Rocky’s has picked a few of those stores up.
The two most recent additions are Karp’s Hardware in Stamford, Conn. and Clarke’s Ace Hardware in New London, N.H. “In both those cases, individuals owned them, they were family businesses, and they didn’t have other family members ready or willing to take over the business when the owners were stressed out with COVID and wanted to sell,” Falcone said.
Those acquisitions followed expansions into Bath, Maine; Washington, N.J.; and Forks County, Pa. over the past five years.
“We’re in a growth mode now; we’re looking to continue to grow our business, continue to expand business,” he said. “There is this little pocket of hardware stores, where the people who own them are in their 60s and 70s, and this whole COVID situation has done them in. They’re just stressed out; they’ve created a nest egg and want to unlock the capital they’ve created in their business by selling.”
Rocky’s, on the other hand, thrives in an attractive niche between the big boxes and those individual owners, with an economy of scale that allows it to roll with industry change, always innovating, while focusing on customer service in ways Home Depot and Lowe’s aren’t necessarily known for, and which are impossible on the internet.
“People don’t want to buy paint online,” Falcone told BusinessWest. “You could, but you want to match the right color, and you want someone to reassure you that you’re making the right decision. We have high-service, high-touch paint experts.”
Then there’s power equipment. “We teach the customer how to use it and not hurt themselves, how to use the right fuel, the right mixture, things like that. People don’t want to buy chainsaws on the internet.
“And some gas grills are big and bulky,” he went on. “We assemble them, and assemble them right, so the gas connections are done properly. Now we’re coming up with white-glove delivery; instead of dropping it at the mailbox, for a slight added fee, we set it up on your deck and take away the old grill.
“We’re finalizing that now,” he added, along with the ability to buy from Ace online and pick up the product at a store (and get that lesson in how to use it, too).
Even the way stores are laid out has changed over the years, Falcone added, noting that making it easy to find products is part of customer service, too.
Hammering It Home
The fourth generation has joined the Rocky’s team, Falcone said: his son Johnny currently works in merchandise and buying — as noted earlier, a job with some added challenge these days.
Staffing can be a challenge as well, and it varies by store. “We try to treat people fairly,” Falcone said, and that goes beyond pay and benefits, and involves a culture of training.
“Our people tell us amazing stories: ‘I’m a homeowner, and now I know how to fix all these things — a light fixture, toilet, under-sink repair — where I’ve never done that type of thing before.’ That great training helps people grow over time as individuals. You can’t understate the value of that.”
It’s another way Rocky’s Ace Hardware is making people’s lives a little easier. Its success in doing so, and continued growth as it approaches a century in business, is a testament to a model — and a willingness to change it when necessary — that has seen this family business survive recessions, the big-box home-improvement boom, and a whole lot more.
Joseph Bednar can be reached at [email protected]