Are Indonesia’s Kawan Lama Group and Ace Hardware breaking up?

This is following an announcement of the listed company that operates the Ace Hardware stores in Indonesia that it was changing its name from PT Ace Hardware Indonesia Tbk to PT Aspirasi Hidup Indonesia Tbk (PT Aspiration Life Indonesia Tbk) effective 21 June 2024.

Its logo has also changed from the ubiquitous Ace Hardware insignia with the tagline "a helpful place" to the initials "ahi", with the full company name beside it. A notarized disclosure also stated that the company also changed its domicile, contact details, and identity.  

The company, however, continues to trade under the symbol "ACES" at the Indonesian Stock Exchange, where it disclosed the changes.  "All documents in the form of agreements that still use the company's old identity that binds the company will  remain valid until the expiration of the agreement," it said in a disclosure.

In a separate disclosure, ACES announced that the company would be holding an extraordinary shareholders meeting on 2 August for plans to decrease its paid up and issued capital through a shares buyback exercise. Stock buybacks are typically done to consolidate ownership and increase equity value.

Citing ACES President Director Prabowo Widya Krisnadi, local media reported that the name change is a step "to reflect a more comprehensive role for the company, and become a source of aspiration and inspiration for a better life".  

To date, ACES has been silent on whether a renewal of its license agreement with Ace Hardware, which expires in 31 December 2024, is in the offing.  

CrossAsean Research founder and analyst Angus Mackintosh, who follows developments on the home improvement retailer closely, told DIY International that the changes are "undoubtedly about the end of the license agreement".  

"ACES has been doing very well this year and should continue to do so. Not many products are labelled Ace Hardware anyway. It has many other private labels like Kris and Krisbow," he noted.  

"I think it is a case of Kawan Lama deciding that Ace Hardware branded goods are insufficiently important to justify paying the royalty. This makes sense given that it has its own private labels," he added.  

The Kawan Lama Group has been operating Ace Hardware stores in Indonesia since 1996. Under the agreement, the company pays royalty  based on retail revenues derived from retail outlets in exchange for using the Ace brand for its stores. In 2023, royalties paid by the Indonesian company to Ace Hardware amounted to IDR 39.832 bn…