After Buyout, Grommet CEO Pieri Says: “Ace Wants Us to Be Ourselves”
For Jules Pieri, the purchase of a majority stake in her company, The Grommet, by Ace Hardware was perhaps preordained.
“How fitting is it that our company is named after a humble piece of hardware?” she asks. “There is some destiny at work here.”
Also at work was a year-long partnership with the national cooperative of hardware stores that culminated Tuesday with the announcement that Ace had acquired a controlling stake in the Somerville, MA-based e-commerce startup. The match—between a nearly century-old hardware store brand and a website designed to market makers’ creativity—might seem unlikely on its face. But Pieri says that as much as 60 percent of The Grommet’s products are related to merchandise found at Ace Hardware. While some Ace stores are small and hyper-focused on home repair tools, for example, she says others are more akin to large department stores that carry a wide variety of consumer products.
Terms of the deal were not disclosed. Pieri says she and her co-founder, Joanne Domeniconi, as well as their employees will continue to work at The Grommet as they did prior to the acquisition. The Grommet currently has 85 employees.
“It’s like when you date somebody and you hope they want you to be yourself,” Pieri says. “That’s what this is like. It’s like Ace is doubling down on us being ourselves.”
Ace and The Grommet’s pairing up comes less than a week after furniture giant Ikea announced it was picking up TaskRabbit, a website that connects users with “Taskers” who can provide services such as yard work, household chores, or constructing Ikea furniture. Two days before that deal, Walmart said it will use Facebook’s business software—essentially an enterprise version of the social network—to let employees share documents and chat internally. (Walmart also announced today it has acquired New York delivery startup Parcel.)
Pieri says the spate of marriages between traditional brick-and-mortar retailers and e-commerce and online marketplace upstarts makes sense. “It’s a faster route to their own growth and keeping on the edge,” she says. “It ups their competitive game in the most efficient way possible.”
Still, she acknowledges that the overall competitive landscape in the retail industry is tough. “The record’s 50/50. [Buying a startup] is not a guarantee that it’s a sure route to success,” she says. “But Ace has the right leaders. Most leaders in retail have been put in place by private equity or they’re waiting out for their retirement and don’t have the ability or freedom to think long-term.”
The Grommet was founded in 2008 as The Daily Grommet, an e-commerce site that brings together “makers” to market and distribute their products in a retail environment otherwise dominated by Amazon and big-box stores. Today’s featured items on the site include a smart fingerprint padlock and a foam slingshot called “Mischief Maker.” In 2013, The Grommet dropped “Daily” from its name and announced that Rakuten—sometimes referred to as the “Amazon of Japan”—had acquired an undisclosed but controlling stake in the company. Pieri says that stake was sold to Ace in the current acquisition.
The Grommet grew to having 3.5 million customers and products in 10,000 retail stores such as museum shops, gift stores, and other specialty stores. Being able to expand into Ace’s 5,000 stores will further expand the company’s reach, Pieri adds.
“It’s not waiting and hoping to see if retailers will see the value [in the products] that we do,” she says. “The makers can get some certainty.”
Pieri says she believes The Grommet will be able to preserve its culture of what she calls “citizen commerce” even as it becomes part of Ace. “I learned yesterday that their executives have a mandatory response time when store owners call,” she says. “It’s short, like 24 hours or something. You cannot let that message sit there.”
Likewise, digital businesses can be “like a tomb” when it comes to interacting with customers on a personal level, but Pieri says The Grommet’s employees pick up the phone. “My ambition is to preserve that.”