Homemade fudge, $500 leather luggage and elegant crystal jewelry are not typical hardware store inventory, but these luxury gifts have helped keep Bradenton's Crowder Bros. Ace Hardware alive despite a big Home Depot two miles away.

"Our gift shop brought in $1 million of $4 million in sales last year, " says owner Ron Crowder, who took over three of his family's 10 Southwest Florida hardware stores when his father, John, died in 1988. (John Crowder had founded the business in 1955. The remaining Crowder stores were purchased by his siblings, sold or shuttered.)

Running an independent hardware store has been a struggle in the last 20 years. Low-priced chains such as Home Depot have shrunk the number of independent hardware stores, from 23,900 in 1980 to 20,200, according to the National Retail Hardware Association.

Gifts have a profit margin of 50 percent compared to 36 percent for hardware. So when Crowder and his wife, Jina, built their new store at 54th and Manatee Avenue West in 1999, they decided to expand their gift section, which had comprised only an aisle or two in the old store. Also in 1999, Crowder joined with Ace, a cooperative that provides marketing, volume buying power and company ownership to its affiliates.

The Crowders opened the new 23,000-square-foot store with an adjoining 4,000-square-foot building for Crowder Gifts and Gadgets.

They made sure that each store had a separate entrance since exclusive gift companies were reluctant to have their goods sold in a hardware store and customers were uncomfortable buying them there. Jina manages Crowders Gifts and Gadgets, which has inside access to the hardware store. Both stores' customers can check out at either location.

Crowder says one challenge is marketing the upscale gift store, because many "people just can't get it in their mind that they can find gifts like this in a hardware store," he says. Consequently, he spends about two percent of his revenue on advertising, regularly devoting a page of a four-page mailer and newspaper insert to the gift store.

The new hardware store is almost three times larger than the typical 8,000- to 10,000 square-foot Ace store and carries more inventory.

"To compete, we had to have a bigger store," Crowder says. And he's convinced that service also gives them a competitive edge. "We spend a lot of money on staffing," he says. "Any one of our guys can take you to any department." The store's 50 employees wear headsets to quickly respond to cashiers' price checks and to aid customers. And the store stocks hard-to-find items, such as cleaning products.

Crowder believes they have survived the riskiest period, and Walt Johnson, a spokesman for the National Retail Hardware Association, agrees. "Competition from the big warehouses is less of an issue today," he says. "If you were going to get pushed out, it would have happened already. The good hardware stores are still here."

Interestingly, the biggest challenge Crowder faced had nothing to do with competition from Home Depot. "When our lease expired in 1999, it didn't look like there was anything available that was affordable or big enough," Crowder says. "We thought maybe that was it."

A real estate agent located his current location, which has been a boon to business. "Our sales have doubled since 1999," Crowder says. When a nearby Scotty's home improvement store closed in 2002, Crowder's business increased $250,000.

Crowder would like to open another store on the east side of Bradenton, but so far the high cost of land has made it prohibitive. But he isn't complaining.

"The business has been good to us," he says. "My dad always believed that if you ran a successful hardware store, you could sell anything."