SPECIAL REPORT — From personnel changes to banner expansions, 2019 was action-packed with news. In this first issue of 2020, Hardlines takes time to revisit the most-read stories of the past year.

Our readers as always responded with enthusiasm to our coverage of People on the Move. Home Hardware saw several major developments on that front, including President and CEO Kevin Macnab’s first full year in the post. Macnab sat down with Hardlines shortly after his first anniversary on the job and spoke about the company’s efforts to extend a consistent offering and store experience across the banner.

Meanwhile, in the summer, Home restructured its merchandising teams to establish clearly distinct chains of command for the hardware and LBM sides of the business. Several appointments here kept readers on the alert. Then, in September, the company promoted Rob Wallace from senior director to VP of marketing. And in December, Jessica Kuepfer was promoted to the post of communications director, which has her reporting directly to Wallace.

Personnel announcements from Lowe’s Canada also garnered high readership. In October, CEO Sylvain Prud’homme’s (shown here) surprise departure left the industry speculating about succession, as no immediate permanent replacement was named. Tony Cioffi took the reins as interim president. Then, in December, we reported that IT chief Tanbir Grover, just days after his well-received talk at the Hardlines Conference, had left his position as VP, eCommerce and omnichannel. He moves to the insurance sector as VP digital at The Co-operators.

Staffing changes at Orgill caught readers’ attention as well. In December, the distributor reassigned CEO responsibilities from Chairman Ron Beal to President Boyden Moore (see follow-up story in this issue―Editor). Orgill had already announced in June that it was adding a 780,000-square-foot fulfillment centre in Rome, N.Y., to its network. The warehouse was designed to take some of the pressure off the company’s West Virginia facility to better service Orgill’s expanding Northeastern U.S. customer base.

Corporate expansions and acquisitions resonated with Hardlines readers in 2019. The year saw BMR Group gearing up to expand its interests outside Quebec and pursue the contractor market more aggressively. In a bid to assert itself as a truly national player, the group continued to add dealers in Ontario.

At the same time, BMR settled into its new multi-banner strategy. The BMR Pro banner, geared to a contractor clientele, opened its first store in Madawaska Township, Ont., early in the year, which was joined by the first Quebec Pro store (in Trois-Rivières) in September. In July, the company penetrated the high-rise construction market with a stake in Laval’s Lefebvre & Benoit. Meanwhile, the La Shop urban proximity concept got its second location, in the town of Mount Royal, Que., joining the flagship store in Montreal’s Griffintown.

One acquisition that ventured outside the industry’s confines was Canadian Tire’s takeover of U.S.-based Party City. That deal attracted a lot of attention from our readers―and marked the next level for CTC’s leverage of its Triangle rewards program data and its outreach to a younger market.

Similarly, stories about movement among buying groups were among the hottest in our 2020 issues. Castle Building Centres attracted attention when it welcomed Winnipeg’s The Lumber Hub in April, as well as dealers in Ontario in February and September. TIMBER MART expanded its ranks, capping off the year with the addition of three eastern Ontario dealers.

(Stay tuned during 2020 as we continue to bring you all the news you need to know from across Canada’s home improvement industry!)

ST. JACOBS, Ont. — A letter has been issued to Home Hardware vendors advising them of the implementation of a deduction off all existing contracts commencing January 1. The amount of the rebate is 1.5% and it’s just the latest move by a company that is rapidly evolving in the face of a tough competitive landscape.

The letter to hardware vendors was signed by Joel Marks, vice-president, merchandise hardlines, while Vice President, Merchandise LBM Marianne Thompson’s name appears at the bottom of the letter sent to building materials suppliers.

According to the letter, the rebate, or “Growth Investment Initiative”, will be used entirely to invest in infrastructure, e-commerce and marketing. The letter comes with an agreement to be signed by the vendor. Home Hardware will assume compliance from companies that do not reply.

Reaction by vendors to the letter has ranged from acceptance to exasperation. However, the overriding response has been an acknowledgement that Home Hardware is just adopting competitive practices already being used by some of its competitors.

“It is an exciting time at Home Hardware. We are growing and building on the best of the past towards a bright future for everyone—dealer-owners, our employees and our business partners,” Marks and Thompson said in a statement sent to Hardlines.

“We know that our future success lies in investing in our business today—which is why we recently shared a letter with our supplier partners informing them that Home is investing over $100 million over a two-year period in areas that will enable us to continue to deliver the results and success that our suppliers have come to expect as a valued partner of Home Hardware.”

The deduction, Marks and Thompson noted, “will be invested in new growth for both parties.” The growth plan includes a focus on supply chain efficiencies, stronger POS data insights, online investments and improved marketing programs as the company continues its reinvention as an integrated retailer, rather than a wholesaler.

“We look forward to growing together with our supplier partners,” Marks and Thompson concluded.

MONTREAL ― Richelieu Hardware has added another strong Canadian company to its roster with the acquisition of The MIBRO Group.

MIBRO is a supplier of hardware, hand tools and power tool accessories. And while its products are carried by most majors in Canada and the U.S., it is also known for its private-label offerings in these lines. In addition, it has rope and chain divisions under King Chain and King Cord, and sells the Wolfcraft brand, a renowned German manufacturer of specialty woodworking tools, for North America.

MIBRO joins Richelieu’s existing lineup of retail brands, Onward, Reliable, Madico, Feltac, Cedan and Nystrom. Richelieu offers more than 110,000 SKUs and boasts that it sells to more than 80,000 customers in North America through 78 facilities, including 42 DCs in Canada. Company sales exceeded $1 billion in 2018.

The addition of MIBRO “will really reinforce the enterprise offering for hardware retailers,” says Richelieu President and CEO Richard Lord (shown here). He notes that 70% of MIBRO’s business is south of the border. “This will really reinforce our presence in the U.S. for the hardware retailers,” Lord adds.

MIBRO’s offices and warehouse in Scarborough, in Toronto’s east end, will remain in place, with management and operations remaining intact. Larry Lucyshyn will continue as general manager of MIBRO. That company’s sales team will be added to Richelieu’s to better serve dealers across the country and in the U.S. MIBRO also has a warehouse in Buffalo, which will also be part of Richelieu’s expansion plans for retailers in the U.S.

MEMPHIS ― Orgill has announced changes to the roles of its top-level executive team. Effective January 1, President Boyden Moore has added the position of CEO to his current responsibilities. Ron Beal, who had been both CEO and chairman, will remain in the latter post, with Byrne Whitehead continuing as vice-chairman.

“Ron and Byrne have led Orgill through our most dynamic growth, from a small regional distributor to the fastest growing, most successful distributor in the industry,” said Moore. “And while they are stepping away from their day-to-day management duties, we are pleased to have their continued guidance and support for years to come.”

Moore took over as president last year after serving as general manager of retail and president of Orgill subsidiary Tyndale Advisors. At the same time, Orgill also announced the retirements of two long-time team members, Grady Gennings and Mike Ferrell, at the end of 2019. Gennings led Orgill’s corporate accounts team and has been with the company for 31 years, while Ferrell managed Orgill’s LBM category and has been with Orgill for 26 years.

Paul Wybrow has joined Liteline Corp. as Ontario sales manager. Wybrow brings more than 30 years of experience in the lighting industry, ranging from inside sales to manufacturer sales roles.

DID YOU KNOW...

... that 2020 marks the 25th anniversary of Hardlines? That’s right! It all started in 1995 with a fax newsletter to the industry. We’ll be celebrating all year in lots of fun ways, so stay tuned!

BURLINGTON, Ont. ― IKEA Canada has recently announced it will begin opening smaller urban stores in Canada, starting in Toronto, according to the Globe & Mail. The retailer has an eye to following up with locations in other urban centres like Montreal and Vancouver. Two formats are being tested: one in the range of 50,000 square feet, offering a similar assortment of products as IKEA’s big boxes with delivery to home or pick-up points in lieu of an on-site warehouse. A smaller format, closer to 5,000 square feet, would offer a limited inventory based on neighbourhood needs.

BOUCHERVILLE, Que. — Lowe’s and RONA stores united to collect new toys during Lowe’s Canada’s annual Toy Drive, held from November 18 to December 15. For the first time since the campaign was launched in 2010, 35 RONA stores joined forces with Lowe’s-bannered stores and the Salvation Army to collect toys for under-privileged children in Ontario, Manitoba, Saskatchewan, Alberta and British Columbia.

HOFFMAN ESTATES, Ill. — Sears Holdings has sold its DieHard brand of car batteries to Advance Auto Parts in a $200 million deal. Similar to the terms of its sale of the Craftsman brand to Stanley Black & Decker, Sears retains certain rights to DieHard, which it created in 1967. It will continue to carry the line in its stores and can still launch its own DieHard products, as long as they aren’t auto related, such as its DieHard boots.

MOORESVILLE, N.C. — Lowe’s Cos. is teaming up with Yardi, a provider of real estate management software, to allow users to purchase inventory from LowesForPros.com. Beginning in January, Yardi users can log in and select Lowe’s as their vendor, adding items to their cart directly from Lowe’s pro website. 

SUPPLIER NEWS

WARWICK, Que. — Roland Boulanger & Cie ltée filed for bankruptcy in November 2019, according to the documents from the Office of the Superintendent of Bankruptcy. The wood mouldings manufacturer saw its sales fall 30% after RONA was acquired by Lowe’s and turned to other suppliers. It initially closed its doors as a temporary measure, faced with a lack of funds and dogged by litigation with banks over its recovery plan.

VANCOUVER ― Minority shareholders in Canfor have voted down a bid by Jim Pattison to take the forestry firm private. The B.C. magnate made a proposal in August to purchase the 49.1% of the company not already owned by his Great Pacific Capital Corp. for a cash price of $16 per share cash, or $983.8 million.

ECONOMIC CONDITIONS

Retail sales decreased 1.2% to $50.9 billion in October 2019. A 3.1% drop in LBM and garden equipment sales, along with lower motor vehicle sales, contributed to the decline. After removing the effects of price changes, retail sales in volume terms decreased 1.4%. (StatCan)

Sales of existing Canadian homes inched up by 0.6% in November 2019, the ninth straight monthly gain. Higher sales across much of British Columbia and in the Greater Toronto Area offset a decline in activity in Calgary. Year-over-year actual (not seasonally adjusted) activity was up 11.3% in November. (Canadian Real Estate Assoc.)

U.S. housing starts rose by 3.2% to a seasonally adjusted annual rate of 1.365 million units in November 2019. Single-family construction reached a 10-month high, while multi-family starts rose for a second consecutive month. (U.S. Commerce Dept.)

NOTED

Ten months into 2019, Canadian retail sales were just 1.5% above 2018 values, not seasonally adjusted, notes retail consultant Ed Strapagiel. “At this rate,” he adds, “2019 will very likely clock in as a 10-year low for retail sales growth.” With the population growing at a rate of about 1.4% per annum and inflation near 2.1%, retail sales would have to grow by about 3.5% “just to keep pace.”