True Value Names New CEO and President as Hartmann Departs
True Value Company announced on April 20 that John Hartmann, who has served as chief executive officer since 2013 and led the company through its transition from a cooperative, will be leaving in May. The next day, Hartmann announced he was taking a job as the new chief operating officer of Bed Bath & Beyond.
Hartmann, who will remain on True Value’s board of directors, will be replaced as CEO by the company’s current chief commercial officer Chris Kempa, while Deb O’Connor, the current chief financial officer, will become president and CFO.
In a letter to True Value retailers announcing the news on April 20, Hartmann said, “After some serious deliberations, I have made the very hard decision to leave True Value to take the next step in my career.”
Hartmann added, “It has been my highest honor to serve the independent hardware retailer alongside the greatest support associates in the industry. I am proud of the relationships we have built and nurtured with our members, customers and vendor partners. I am equally proud of the relationship we have built with our financial partner, ACON Investments.”
ACON Investments acquired a majority stake in the company two years ago when True Value transitioned from a traditional dealer-owned co-op model.
“Over the last two years, we’ve accelerated investments in the business including the modernization of our supply chain, doubling the size of our sales force, implementing hyper-localized marketing and improving pricing across the best product assortment in the industry,” Hartmann said.
Kempa, who has been with True Value since 2019, previously served as CEO and group president of safety and tool product distributor ORS Medco and as an officer with Grainger with responsibility for its international business. O’Connor, who has been with True Value for five years, previously worked with OfficeMax, where she served as senior vice president of integration and finance, playing a critical role in the OfficeMax/Office Depot merger.
“There is still tremendous opportunity to be captured as we continue to find new ways to better serve the independent hardware retailers which anchor America’s communities,” Hartmann said. “I am confident that Chris and Deb are extraordinarily qualified to accomplish this, and I am thrilled to continue serving as a member of the board to support them in those efforts.”
“Chris has a long track record of successfully leading businesses in this channel and has rapidly implemented and executed an integrated merchandising, sales and pricing go-to-market strategy at True Value,” said Aron Schwartz, chairman of the True Value board of managers. “Deb has been with the company for five years and has been an instrumental leader in transforming the business and accelerating investments to further support all independent hardware retailers.”
Schwartz added, “I’d like to extend our sincerest appreciation to John. Over the last seven years, John’s leadership has shaped the company, including the last two with us, where he was the visionary behind the transaction unlocking over $250 million of retailers’ equity. He was the leading advocate of investments the company has made in supply chain, technology, as well as a number of merchandising and marketing initiatives, to better serve True Value’s customers.”
Paul Green also joined True Value as senior vice president of merchandising in March 2020. Green began his career as a Lieutenant in the U.S. Navy. He was a nuclear-trained Surface Warfare Officer, qualified in the operation and maintenance of Navy nuclear propulsion plants as well as ship-handling and navigation. Later at McMaster-Carr Supply Company, a multibillion-dollar e-commerce and catalog-based distributor of hardware, tools and maintenance equipment, Green began as a warehouse manager and rose through the ranks to become chief merchandising and supply chain officer.
Hartmann’s will start his new job as COO of Bed Bath & Beyond and president of buybuy BABY on May 18, 2020. He will report directly to Mark Tritton, president and CEO. On April 30, the company named four other top executives to join Hartmann on a streamlined and totally new senior leadership team.
Hartmann will lead key areas of the company’s transformation including IT, supply chain and real estate, working across the company’s five strategic growth pillars to accelerate decision-making and enhance connectivity across functions. He will also be responsible for re-engineering the company’s supply chain and technology infrastructure to enhance fulfilment, drive cost improvements, improve customer experience and support the introduction of omnichannel improvements such as Buy-Online-Pick-Up-In-Store (BOPIS) across its fleet of stores. As president of BABY, Hartmann will be responsible for further developing the growth strategy for this leading infant and small children retail brand.
Most of Bed Bath & Beyond’s stores have been shuttered for several months due to the pandemic, with one-fourth of the stores converted to regional fulfillment centers to support online sales. In February, the company cut 500 jobs. Bed Bath & Beyond lost $137.2 million in 2019 and is projected to lose $613.8 million this year.
Tritton said, “We continue to drive our growth plans and invest in strategic talent, while managing through the COVID-19 situation, backed by significant financial flexibility. John is a world-class leader with a passion for building high-performing teams and deep expertise delivering transformation in the retail sector. He will accelerate the execution of our vision to make it easy to feel at home with Bed Bath & Beyond, helping rebuild a modern, durable business and a deeper connection with our loyal customers across our portfolio of brands.”
Hartmann joins Bed Bath & Beyond from True Value Company, where he was president and chief executive officer for seven years. Hartmann led True Value through a significant business transformation after majority interest in the dealer-owned cooperative was purchased by ACON Investments in 2018.
Prior to this, Hartmann was CEO of Mitre 10, COO at HD Supply, and has held senior positions at The Home Depot, Cardinal Health and the Federal Bureau of Investigation.
“I am passionate about retail and thrilled to join the company to help transform this iconic brand. Together with the leadership team, I am confident we will continue to increase the pace of change to rebuild this business and support Bed Bath & Beyond’s omni-channel future,” said Hartmann.
Hartmann’s departure from True Value comes as the company is fending off complaints from former members who were due principal and interest payments for notes due at the end of last year. On April 1, these former members received a letter stating, “we have made the difficult decision to defer principal payment for our former members and only pay interest due at this time.”
Since then, True Value has reportedly told some former members that when the company was purchased by ACON, any prior agreements on payments and terms from the previous True Value Company became null and void, and the notes payable are now considered unsecured debts. The retailers were told True Value’s position is that they have no pressing obligation of when they have to pay back these notes, and that they will just remain “subordinated note debt” on the books at True Value.
Jean Niemi, True Value’s vice president of communications, clarified the situation by responding with this statement: “We made a decision in January, unrelated to COVID-19, to align note payments with our annual patronage dividend and rebate payments in the spring. When COVID-19 began to unfold, we paid former members the interest due and deferred the principal payment to ensure we are 100 percent focused on our current customers. It’s a not matter of if we plan to pay but when, as it remains our intention to pay former member notes in full.”
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