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Hardware giant Ace builds future on the Net

Ace Hardware jumps into online sales next week through a partnership with Net start-up OurHouse.com.

Ace Hardware plans to jump into online sales in the first week of November through a partnership with Internet start-up OurHouse.com, according to the upstart's chief executive.

OurHouse.com will offer some 220,000 different products online and will provide Web sites of Ace's 5,100 retail stores, according to Philip Airey, OurHouse.com's chief executive. Ace bought a 25-percent stake in OurHouse.com in June with a $5.3 million investment.

"This is an innovative combination of clicks and bricks," Airey said.

Ace's move comes as chief rival Home Depot struggles to get its own Web store up and running. The home improvement giant originally planned to launch a limited Web store by the end of this year, but now plans to launch an expanded store early next year.

Tight ties
Evanston, Illinois-based OurHouse.com intends to tie its store tightly to Ace. Not only will Ace link from its current Web site to OurHouse.com, but OurHouse.com will also set up online storefronts for Ace outlets that choose to participate in its program.

Ace is a cooperative of independently owned hardware stores across the nation; more than 1,000 Ace stores have linked up with OurHouse.com, according to Airey.

Airey said that OurHouse.com will set up the stores' Web sites for free, and will drive traffic to their offline stores. In return, the stores will share the revenue from their online stores.

OurHouse.com, however, will not carry Ace's entire inventory online, Airey said. Instead, it will offer many products that wouldn't be found in the company's stores. Early next year, OurHouse.com will set up kiosks within Ace's retail stores to let customers order products that they can't find in the stores.

More than just hardware
Eventually, OurHouse.com wants to let consumers post requests for house painters, roofers, and other home improvement service providers.

"The line between home improvement and home d?cor will blend together," Airey said.

OurHouse.com and Ace also have a comarketing agreement in place that will promote the new Web store with about $100 million in advertising over the next year.

In addition to the investment from Ace, OurHouse.com recently closed a $20 million round of venture funding, with investments from Technology Crossover Ventures and Redpoint Ventures.