Federal Hill Ace Hardware Now Employee Owned

Federal Hill Ace Hardware, which is part of the A Few Cool Hardware Stores (AFCHS) group, is now employee owned. AFCHS owns 13 stores in the Baltimore and Washington, D.C. area including Canton Ace Hardware and Waverly Ace. All 13 AFCHS stores are moving to the employee-owned model.

AFCHS owners Gina Schaefer and Marc Friedman are selling their company through an Employee Stock Ownership Plan (ESOP). An ESOP allows business owners to sell their company to a trust which then allocates shares of that trust to eligible employees. Since stock is only made available to employees, the business therefore becomes “employee owned.”

ESOPs offer employees stake in a company through a stock allocation that accrues value over time, much like a 401(K) plan. The amount of stock distributed is determined by the number of employees receiving shares and each employee’s individual salary. This comes at no cost the employees. When eligible employees leave AFCHS, they are cashed out the value of their shares.

Schaefer and Friedman will transfer ownership of the organization over the next several years through the ESOP’s trust under the name “The Cool Hardware Company.” The upfront transfer of 30 percent of the company’s ownership took place on August 1, 2021.

AFCHS has more than 250 employees.

In a press release, AFCHS said: “The benefits of this transition from privately-owned to employee-owned include increased staff engagement in decision making processes, personal wealth building, and an active investment in the success and health of the business.”

“The ESOP model allows us to give back to the employees who have done so much for our company, while still aligning with the culture we’re proud to have built over the last 20 years of business,” said Schaefer.

AFCHS started in 2013. Federal Hill Ace Hardware opened in 2007 and expanded from about 8,000 sq. ft. to approximately 12,000 sq. ft. in 2017.

Photo from Federal Hill Ace Hardware

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