Ace Hardware (ACES IJ), Biggest Ace ever - CLSA

In just 3 days of opening, the world’s largest ACES store in Alam Sutera (ASRI IJ) has already met its entire month sales target!

Duo shopping aficionados, Jessica Irene and Mita “the Komodo”, wrote about the phenomenal turnout for the grand opening. The day saw over 10,000 people visiting the 15,000sqm store in its first day of operation.

Noteworthy that ACES is not using stronger rupiah to expand its margins. Rather, they are pursuing more volumes and transferring the benefits to consumers (in the form of more discounts). We like this strategy. ACES’ priority should be establishing their brands and take full advantage of first mover advantage.

OutPerform call maintained, with TP 3,100 indicating 19% upside.

Key points from report:
Entire month’s sales target for the new store was met in first 3 days of operation
15,000sqm store in Serpong (Living World Mall), a new residential hotspot that three big real estate developers are aggressively expanding in
10,000 visitors on just the grand opening day, with carparks jammed at midnight for sales. Top selling items were lifestyle products (folded bicycles, laptop lap tray)
Channel checks indicates the Kawan Lama Group (parent) might develop similar concepts in other areas to site Ace Hardware and furniture shop, Informa
24% YoY operating growth expected for 2011, boosted by new store contribution
Maintain OutPerform, with TP 3,100 indicating 19% upside