November 16, 2015 Volume xxxiv, #43

“I suppose I didn’t know what I’d become, but I always wanted to be extremely brave and I wanted to be a constant reminder to the universe of what passion looks like. What it sounds like. What it feels like.”
—Lady Gaga (American songwriter, singer and performance artist, 1986- )

IN THIS ISSUE:

• RONA’s third-quarter sales dip on increased profits

• Increased focus on building products at BMR buying show

• CanWel makes change to new EWP supplier with care

• High tech is a high priority at Lowe’s

• PLUS: Castle adds Nfld. dealer, Canadian Tire results, Tree Island purchase, mixed message from Sears Canada, housing stalls, Cologne hardware award, Lowe’s settles suit, Hamilton Beach —and more!

RONA’s third-quarter sales dip on increased profits

BOUCHERVILLE, Que. — Consolidated revenues for RONA in its third quarter totalled $1.16 billion, down from $1.17 billion in the third quarter of 2014. This dip results from a 6.9% decrease in distribution segment sales, reflecting in part an early slowdown in purchases by 20 franchised big box stores that RONA acquired during the quarter.

However, retail segment sales were up 1.3%, helped by 1.1% growth in same-store sales. RONA reports that the increase in same-store sales reflects the success of the repositioned Reno-Depot banner and a strong performance in Ontario and British Columbia. However, the company reported that difficult market conditions persisted in Alberta and Quebec.

The acquisition of the franchised stores, all except two of which are in Quebec, marked a move by RONA to take greater control of its big boxes following the repositioning of its Reno-Depot stores, which are also big boxes. That repositioning has proved successful in Quebec, and is being rolled out to other traditional RONA big box stores across the country.

Increased focus on building products at BMR buying show

QUEBEC CITY — Last week, Groupe BMR’s 2015 buying show welcomed its dealers at the Quebec City Convention Centre, where 500 partners and suppliers gathered to showcase their products.

Dealers walked the aisles of the three-day show, interacting with the vendors. The vendors HARDLINES spoke with reported that the show was quite busy and extremely productive. 

Bruno Baldessari, BMR’s vice president of purchasing for LBM, noted that this year’s show featured far more building products than before. One of the new LBM products showcased on the floor was a line of wall coverings. This category was traditionally housed downstairs but brought up to the main floor this year. The Agrizone, BMR’s line of farm and agriculture products, was moved downstairs for this year, but Baldessari noted that the plan for next year is to have the entire show on one floor.

During the gala on the final evening, in addition to the annual store awards, Groupe BMR CEO Pascal Houle took a moment to acknowledge and honour two employees, Jacques Pelletier and Jean St-Maurice, for their exceptional work this past year in integrating La Coop fédérée’s stores into the BMR fold.

CanWel makes change to new EWP supplier with care

BLAINEVILLE, Que. — CanWel Building Materials Division, the national lumber and building materials wholesaler, has recently changed one of its key suppliers. But it does not take that change lightly.

The company sent out a release recently announcing it had concluded a supply agreement with Louisiana Pacific to carry that company’s SolidStart line of engineered wood products in Canada. The line includes a wide range of joists, LVL (laminated veneer lumber), and LSL (laminated strand lumber) beams, which will be stocked in all 15 of CanWel’s distribution centres across the country.

In the coming months, CanWel will work with its customers, including all the major LBM buying groups, to help them transition to the new EWP lines.

The move to LP’s SolidStart lines marks a departure from a multi-year relationship with Boise Cascade. But according to Michel Walsh, national director of product management and marketing for CanWel’s specialty products, important product lines such as engineered wood EWP command long-term relationships—relationships that CanWel respects. He adds that CanWel values the relationship it had with Boise, to the point that he was reluctant to make a big deal in print about the change, beyond ensuring that customers were aware of it.

Boise was a good supplier, but a range of factors forced the change to LP. “The big change for us is that most of LP’s products are made in Canada. That wasn’t the driving factor, but it was certainly an important one,” says Walsh.

High-tech is a high priority at Lowe’s

SAN FRANCISCO — A 3D printer in space is just the latest example of how Lowe’s is pursuing retail innovation through technology. The giant home improvement retailer will provide NASA with a 3D printer that will be used in the International Space Station. The device, built by a company called Made in Space, features the Lowe’s logo and will be used to create tools in space.

“It is the first hardware store in space,” Kyle Nel, executive director of Lowe’s Innovation Labs, told Space.com.

Besides partnering with NASA, Lowe’s has made other breakthroughs through its Lowe’s Innovation Labs, the retailer’s proprietary technology development centre. A “holoroom” that was introduced in a Toronto-area store late last year lets customers visualize how they could use tools and materials sold at Lowe’s.

Through a partnership with virtual reality technology provider Oculus VR and Google, Lowe’s has upgraded the holoroom and begun rolling it out in 19 stores across the U.S. this month.

FROM THE ARCHIVES: This week in 1995

Following its acquisition of 122 Woolco stores a year earlier, Wal-Mart would continue aggressive expansion in Canada at a rate of five new stores a year. It was nipping at the heels of mass merchant market leader Zellers by putting pressure on prices. Plus: Ontario farm co-op Growmark was promoting its “Country Depot” banner at its latest show; and Canadian Tire money moves to Western Canada. Walk through memory lane with us by clicking here right now!

DID YOU KNOW…?

RETAILER NEWS

MISSISSAUGA, Ont. — Castle Building Centres Group Ltd. has added a new member in Atlantic Canada. Burgeo Castle in Ramea, Nfld., is a retail store expansion of the company, which was founded as a general store in 1977 by Earl and Mary Walters on Northwest Island, off Newfoundland’s southern coast. Their son Craig has taken over the business, rounding out the assortments of hardware and building supplies for this island community.

TORONTO — Canadian Tire Corp. turned in solid results for its third quarter. Although overall retail sales were essentially flat (+0.1%), consolidated revenue was up 1.9% to $3.13 billion, and reflects the impact of lower year-over-year gas prices at Petroleum. In the retail segment (which also includes FGL Sports, Mark’s, and Petroleum), Canadian Tire-branded stores saw sales growth of 1.5%, with same-store sales up 3.4%, reflecting strong seasonal and non-seasonal sales and a shift in sales mix, as the company’s installed business was pared back to re-focus on products that are sold exclusively within Canadian Tire stores. Sales in all categories (Automotive, Fixing, Living, Playing, and Seasonal) grew in the quarter, with particular strength in Backyard Fun, Camping, and Kitchen sales.

TORONTO — Now under new leadership, with the recent appointment of Carrie Kirkman as president and chief merchant (see last week’s edition—Editor), Sears Canada is looking for ways to rejuvenate its brand. Perhaps taking a page from HBC’s playbook, Sears appears to be staking its future, at least in part, on tapping into its heritage with Canadian consumers, as suggested by this quote from a recent release: “A broad segment of Main Street Canadian consumers are underserved and nostalgic for Sears Canada and its heritage brands like the Wish Book to return to the forefront of Canadian retail and outfit their lives with the products and brands they love.”

MOORESVILLE, N.C. — Lowe’s will refund $1.1 million to more than 16,000 New York customers as part of a settlement with the state Attorney General’s office. The company was being investigated for deceptive sales practices around flooring installations, with the state alleging that Lowe’s billed customers for the square footage of materials ordered rather than those actually installed. In addition to the refund, Lowe’s will pay the state $900,000 in legal costs.

SUPPLIER NEWS
VANCOUVER — Tree Island Steel Ltd. has announced that its wholly-owned subsidiary, Tree Island Industries Ltd. has entered into an agreement to acquire substantially all of the assets of Calgary’s Irving Wire Products Corp. Under the terms of the purchase agreement, Tree Island will acquire, among other assets, the production equipment and inventories related to Irving’s mesh business and will lease Irving’s existing facility in Calgary where the company will continue to manufacture steel mesh products.

COLOGNE — Exhibitors of the International Hardware Fair are encouraged to submit applications for the 2016 EISEN Awards through late January. Applications will be accepted for the Corporate Social Responsibility Award until January 22 and for the Innovation Award until January 26. In co-operation with the Federal Association of the German DIY, Building, and Garden Specialist Stores (BHB), Koelnmesse is distinguishing companies that combine economic success with social responsibility and an environmentally friendly approach with the CSR Award. In the Innovation category, the award is conferred by Koelnmesse together with the Central Association of the Hardware Trade (ZHH) for the best products in the tools, fasteners and fixings/fittings, and industrial supply sectors. Click here for more information.

CLEVELAND, Ohio — Hamilton Beach reported net income of $6.4 million and revenues of $163.3 million for the third quarter of 2015, compared with net income of $6 million and revenues of $135.2 million the same time in 2014. Operating profit increased to $11.6 million from $9.5 million. Financial results include $9.5 million of revenues and $0.8 million of net income from Weston Brands, which Hamilton Beach acquired in December 2014. Excluding the impact of the Weston Brands acquisition, revenues increased approximately 14%, or $18.6 million, primarily due to an increase in sales volumes in the U.S. consumer market, partially offset by unfavourable foreign currency movements of both the Canadian dollar and Mexican peso, which weakened against the U.S. dollar.

ECONOMIC INDICATORS
Housing starts fell to 198,065 units seasonally adjusted in October, down from 231,304 units in September. Urban starts decreased by 16% in October to 181,442 units. Multi-unit urban starts decreased even more, by 22.4% to 122,187, while the single-detached urban starts segment increased by 1.3% to 59,255 units. In October, the seasonally adjusted annual rate of urban starts decreased in Ontario, Quebec, the Prairies, and Atlantic Canada, but increased in British Columbia. (CMHC)

PEOPLE ON THE MOVE
Home Hardware co-founder Walter J. Hachborn has been inducted into the Waterloo Region Entrepreneur Hall of Fame. The ceremony in Kitchener represented the return of the honour after a three-year hiatus. Initiated by the Prosperity Council in 2006, the award was revived by Waterloo Region this year. Accepting the accolade on Hachborn’s behalf, Home Hardware CEO Terry Davis praised his “innovation, hard work, and commitment” throughout a career spanning nearly eight decades.

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