|“Kind words can be short and easy to speak, but their echoes are truly endless.” — Mother Theresa (1910-1997, humanitarian)
|AWARD PREPARES TO ENTERTAIN OFFERS – AGAIN
|BEDFORD, N.S. — Following a meeting of dealers on March 3 that ended in a rejection of an offer by Rona inc. and the resignation of president and CEO Tom Smith, the Atlantic-region buying group is considering proposals anew. A statement from AWARD last week indicates that senior management and the board of directors “will analyze proposals from all outside parties who have shown an interest in partnering with AWARD, and present them to members with their recommendation on the group’s best option for culture fit, long term stability and growth.” The group will weigh all proposals against continuing as an independent Atlantic-based group.While a number of proposals were expected to be put forth at that last meeting, only the Rona deal was in fact put on the table. But despite the outcome of that last meeting, AWARD and its members are still looking for some kind of partnership within the industry.
"We need a partnership with a strong national player, especially in light of consolidation in the industry,” says John Morrissey, vice-president marketing and product development.
At the top of the list will be a proposal from Tim-BR-Marts Ltd., the Western buying group with whom AWARD shares membership within the umbrella buying group Matreco. They also share the TIM-BR Mart brand.
Morrissey admits it’s an obvious contender. “We have a longstanding relationship with Tim-BR-Marts, and we’ve spent a lot of time, blood and sweat to grow the TIM-BR Mart brand in Atlantic Canada.” In fact, while Tim-BR-Marts had always been a group designation, the creation of a cohesive TIM-BR Mart banner for dealers was developed in Atlantic Canada, by AWARD’s agency, Image Design.
Tim Urquhart, general manager of Calgary-based Tim-BR-Marts, is optimistic about working more closely with AWARD. Late last year, he spearheaded the merger of Homecare/TIM-BR Mart Ontario into the Western group. “I would hope that our proposal will be strongly considered,” he says. “We are an independent buying group for independent dealers, rather than a corporate operation – and we share a name. We think we have all the pieces to offer them, to help them to be part of a larger organization.”
But other hardlines distributors will likely line up to make their pitch, as well. Another outcome of the fateful meeting in March was a decision to close the distribution business initiated by AWARD late last year. That business, funded by the AWARD dealers themselves, was a partnership with Groupe BMR, the Quebec-based buying group and wholesale distributor – and another Matreco member.
However, one offer is decidedly corporate. Will the Rona proposal be reconsidered? “We’re not excluding anything,” says Morrissey at AWARD. The outcome of the last meeting was to evaluate the future “with a clean slate,” he adds.
|CANADIAN TIRE LAUNCHES DEBBIE TRAVIS PAINT
|TORONTO — Canadian Tire Corp. has officially launched a line of paint under the name of its new spokesperson, design diva Debbie Travis. The Debbie Travis Paint Collection is a premium paint line based on Travis’s own approach to decorating, which insists one “first choose a mood for a room... then choose a colour.” Developed with ICI Canada, the collection consists of 348 paint colours, each individually selected by Travis and categorized into four moods, Nostalgic, Calm, Dramatic and Cheerful. “Quite often, people are looking to create a certain look or feel to a room but they are unsure of how to go about it," says Travis. “If you first think about choosing a mood for the room, based on how you want the space to feel – nostalgic and welcoming, cheerful and bright, dramatic and eclectic, or calm and relaxing – and then choose the colour, it becomes easy to get the look you're after.”
|LOBLAW’S CONSOLIDATES SUPPLY CHAIN,
EXPANDS GENERAL MERCHANDISE FACILITIES
|TORONTO — Loblaw Cos. Ltd., the giant grocery retailer, continues to streamline its supply chain network, with announced warehouse closures that will affect 1,400 staff. Loblaw, which has more than 1,000 corporate and franchised stores from coast to coast, will close six of its 32 warehouse facilities over the next three years. All the closures will be in Ontario and Quebec. The stated benefits of the consolidation include cost savings, improved margins, a smoother flow of products to the stores and better customer service levels. According to Geoff Wilson, senior vice-president, investor relations and public affairs, “This is all part of our strategy of creating a national network for our supply chain.” The upgrades will enhance Eastern Canadian operations, he told Hardlines.They’re also expected to head off possible expansion by Wal-Mart of its grocery business. Loblaw’s own Superstores feature a wide range of hard goods, or general merchandise, reflecting the retailer’s aggressive growth in both seasonal and housewares categories. The two closures are partly offset by the establishment of a third-party general merchandise warehouse for Eastern Canada.
The latest moves by Loblaw anticipate the company’s reorganization of its head offices. The general merchandise buying teams are being relocated from Calgary to new offices in Brampton, just west of Toronto. The head offices in mid-town Toronto are also being relocated. “We’re still on track for fall of this year for the new head office,” says Wilson.
|UFA APPOINTS NEW CEO, FOCUS ON GROWTH
|CALGARY — United Farmers of Alberta Co-Operative Limited has named Dallas Thorsteinson as its new president and CEO. Thorsteinson moved over from UFA’s Farm Supply Division, where he served most recently as vice-president. He replaces Geoff Southwood. “As vp of our Farm Supply Division, Dallas Thorsteinson has earned the respect and unanimous support of the board,” says Clarence Olthuis, UFA’s chairman of the board. “He is an exceptional visionary and a committed change agent who has proven himself capable of providing meaningful business improvements during tough times.”Under former CEO Southwood, UFA had focused on improving organizational capabilities and developing a strategic plan to grow the co-op. Thorsteinson now has a mandate to help implement each component of UFA’s long-range strategy.
Thorsteinson has been with UFA for three years. During his tenure the Farm Supply Division experienced double-digit growth each year, despite the impact of prolonged drought and the devastation created by mad cow disease. In addition, he oversaw the development of the company’s new flagship Regional Centres. This retail concept, initiated Red Deer and Camrose, offers a larger footprint than a typical UFA store, and is designed to be a destination shop for a wider range of customers. Thorsteinson also introduced a number of initiatives to strengthen the organization’s value proposition, service offering and brand throughout rural Alberta.
UFA has 34 farm and ranch supply stores, 115 cardlock and bulk fuel petroleum outlets, employs 1,100 and has more than 110,000 members in Alberta.
|HOME DEPOT WILL PITCH WITH MAJOR LEAGUE BASEBALL
|ATLANTA — Home Depot has entered into an extensive marketing partnership with Major League Baseball, one which Home Depot officials say will serve as a platform for heightened exposure for several of its key vendors during the spring and summer selling seasons. Home Depot has been designated “Official Home Improvement Warehouse of Major League Baseball,” and its agreement will include exclusive category rights, advertising, special event, community relations activities and in-store promotions. The retailer will be the presenting sponsor of Wednesday Night Baseball aired on ESPN, and will sponsor the opening night game between the New York Yankees and Boston Red Sox on April 3. The price tag for this marketing program was not disclosed.
Home Depot and Scotts Co., the dealer’s largest supplier in sales volume, are planning a co-branded TV campaign that features Atlanta Braves’ pitcher John Smoltz. In April, Home Depot also plans to distribute through its nearly 1,900 stores the “2005 Major League Baseball Official Fan Guide,” which includes schedules for all 30 pro teams.
John Costello, Home Depot’s executive vp-merchandising and marketing, said that this marketing campaign could incorporate other vendors’ products, such as Weber grills, Toro outdoor power equipment and Husky tools.
The retailer also has local club sponsorship agreements with the Braves, Red Sox, Cincinnati Reds, Seattle Mariners, Los Angeles Angels, and San Diego Padres.
|TRUE VALUE: BUYING SMARTER, SHIPPING BETTER
|CHICAGO — With news of product recalls becoming common in the news today, companies sourcing offshore have to put to rely more than ever on testing, third party or otherwise. But that doesn’t deter companies like True Value Company, which is making aggressive moves to replace existing brand-name suppliers with products sourced directly. Steve Mahurin, senior vice-president and chief merchandising officer for True Value Company, is adamant about the value that can be derived from doing one’s own sourcing, but quality has to be monitored, he admits. Quality can be obtained, “if you deal with factories that are reputable. Many of them are the same factories that are being used by companies like Home Depot and Lowe’s,” he says. “And many people have QC [quality control] people right on the floor at these factories.”In fact, True Value Company announced to its member dealers at the last True Value show that its line of mechanics’ tools will henceforth be sourced from the same factory used by Stanley, which had previously supplied the line. Another deal was announced that replaces Black & Decker with a private label line of power tools made by the same factory used by B&D.
As for the number of recalls hitting the news, he does not consider it such a major concern, given the sheer volume and range of product coming over. “Quality control should be a small issue for products coming out of China.”
Admittedly, he adds, there was a time when importing any products carried with it the tarnish of lower quality, “but it’s all in how you spec.”
The savings derived from obtaining products in China can be up to 30-40%. With that kind of return, says Mahurin, the co-op can afford to re-invest 10-20% back into the quality of the product, to ensure differentiation and product quality.
Besides sourcing better, True Value is moving product to its dealers more efficiently. At the same show, member dealers were informed that the company's fill rates improved by one percentage point. Year to date in 2005, those fill rates are at 97% – and as high as 98% on A items.
Annual revenue totaled $2.024 billion in 2004, generating net income of $43.2 million, more than double last year's profit. At the same time, True Value continued to reduce debt, ending the year with $170.3 million in total debt, a reduction of 11.4% from the end of 2003. During 2004, 355 members left the co-op. That was offset in part by the recruitment of 202 new members.
|HOME DEPOT TO EXPAND IMPORT DISTRIBUTION NETWORK
|ATLANTA — Home Depot will open two distribution centers in Georgia and Texas to handle the increasing volumes of import merchandise flowing into its stores. In Corsicana, TX, Home Depot will convert a 1,453,000-sq.ft. former Kmart distribution center into an import warehouse that will employ 250 people. The building is being leased from Equity Industrial Partners, which paid $22 million for what was the largest industrial sale in the state in several years, according to the deal’s broker Binswanger. The building includes 13,248 sq.ft. of office space.The retailer also plans to take over facility in McDonough, GA, which will employ 250. Home Depot will move into the existing 570,000 sq.ft. building right away, while additional space, which will be completed by July 2005, will give Home Depot a total of more than 1 million sq.ft.
The two facilities will feed merchandise to hundreds of Depot’s stores in the South. Home Depot currently operates 12 import DCs.
|See Classified Section for more information on CSA anti-counterfeiting seminar:
|COMPANIES IN THE NEWS
|KITCHENER, Ont. — TruServ Canada has launched its newest banner across the country starting with the first ground up Country Depot in Okotoks, Alta. Okotoks is now open and preparing for its grand opening celebration in early May. Also, the Buckerfield's group of British Columbia has joined TruServ with its six-store operation, under the Buckerfield's Country Depot name.LONGUEUIL, Que. — Sico Inc. has signed a distribution agreement with Kent Building Supplies, the largest home improvement retailer in Atlantic Canada. Under this agreement, the company will supply Sico branded paint and Mulco caulking and adhesives to all 29 Kent Building Supplies outlets, including seven big-box stores located in all four Atlantic provinces. The distribution agreement will be supported by joint advertising efforts. The deal is expected to increase considerably Sico’s market share in Atlantic Canada.MILL VALLEY, Calif. — Hunter Douglas, the maker of custom window coverings, has launched its first Hunter Douglas Canada corporate website and an extranet. The site has been constructed with software by ChannelNet, called ChannelNet SiteBuilder. The site provides company and product information to visitors in both English and French, and lists available Hunter Douglas dealers. Check out www.hunterdouglas.ca.
TORONTO — Sears Canada Inc. has announced a change in ownership of its controlling shareholder following the recent merger of parent company Sears, Roebuck and Co. and Kmart Holding Corp., which formed Sears Holdings Corp. Sears, Roebuck, the owner of approximately 54.3% of the issued and outstanding shares of Sears Canada, is now a wholly-owned subsidiary of Sears Holdings. The Sears-Kmart merger was completed on March 24, 2005, resulting in the third-largest retailer in the United States, with approximately US$55 billion in annual revenues and nearly 3,500 retail stores, including 2,350 full-line and off-mall stores, and 1,100 specialty retail stores. Sears Canada has 122 full-line department stores, 218 off-mall stores, 64 home improvement showrooms.
MONTREAL — Richelieu Hardware posted 1Q consolidated sales of $76.1 million, up 17.6% from the equivalent period in 2004. Last year's acquisition in the U.S. of Allied Hardware and Allied Casework Supply accounted for 6.9% of the increase. Richelieu's Canadian business, which represented 94.8% of first-quarter consolidated sales at $72.1 million, was up from $61.0 million a year earlier. Total sales in Canada increased by 10.9% to $67.4 million or 88.6% of consolidated sales, compared with $60.8 million or 93.9% of total sales for the same period in 2004. All three major Canadian geographic markets made a solid contribution to this growth, with a stronger performance in Western and Eastern Canada. Sales in the United States totaled $8.7 million, up 120.5% over $3.9 million for the first quarter of 2004. Earnings before income taxes, interest, depreciation, amortization (EBITDA) totaled $8.3 million, up 15.9%.
ST. LOUIS — Huttig Building Products, one of America’s largest millwork distributors, opened its first distribution center in Minnesota last week. The 73,000-sq.ft. facility includes pre-hung interior and exterior door assembly lines, and is stocking a variety of interior and exterior door options as well as mouldings, columns and stairway systems. The DC, Huttig’s 45th in 47 states, supplies pro dealers and homebuilders within a 150-mile radius of Minneapolis.
OAK BROOK, Ill. — Ace Hardware Corp. is now offering “designer” clothing on its website, www.acehardware.com. Carhartt, the maker of rugged outdoor and workwear, will be represented on the site with a full range of coats, jackets, shorts, overalls, vests and jeans. Some Ace stores already carry the Carhartt brand in their stores.
Wal-Mart will move its Asian headquarters from Hong Kong to Shenzhen, China next year. The move is expected to be completed by August, 2006. It’s the location of Wal-Mart’s partner in China, Shenzhen International Investment Commercial Property Com.
|PEOPLE ON THE MOVE...
|The following members were elected to the board of directors at AWARD Wholesale and Retail Distributors Ltd.’s annual meeting recently: Kevin Pritchett, Pritchett’s TIM-BR Mart, Gambo, NF (Chairman of the Board); Paul Parsons, Fraser’s Pro Home Centres, Annapolis Valley, NS; Tim Tompkins, TNT TIM-BR Mart, Keswick Ridge, NB; Kurt Nauss, Nauss TIM-BR Mart, Bridgewater, NS; Gary MacLeod, Sherwood TIM-BR Mart, Charlottetown, PE; Claude Boudreau, Arthur Boudreau & fils, Petit Rocher, NB. At Pentair, Charles Brown rejoins the company today as president and COO of Pentair Water Group’s Pump and Pool operations. In the newly created position, Brown reports to the office of the chairman, which consists of Pentair chairman and CEO Randall Hogan and vice-chairman Richard Cathcart. Brown had served as president and COO of Pentair’s Tools Group from 2003 until it was acquired by Black & Decker in October 2004.
|CANADIAN MARKET INDICATORS
|Stats Canada has released its figures for retail sales in 2003. Operating revenues of retailers rose at their slowest pace in seven years in 2003, following a series of negative shocks to the economy. A slowdown in personal disposable income growth and events such as the SARS outbreak and the power outage in Ontario restrained revenues, margins and operating profits. Store retailers reported operating revenues of $356.3 billion in 2003, up only 3.7% from the previous year. It was the slowest annual rate of growth since 1996 when retail sales grew just 3.3%. Personal disposable income advanced at a similar pace, with an increase of 3.0% in 2003.
|U.S. MARKET INDICATORS
|Construction spending in February 2005 was $1,047.3 billion, up 0.4% from January and up 10.0% from February 2004. Total non-residential construction was $461.1 billion, virtually unchanged from last month but up 7.4% from one year ago.
|CSA will host a one-day anti-counterfeiting conference April 7 in Toronto. Every year, millions of counterfeit products find their way into the marketplace, many bearing counterfeit certification marks. If not legitimately tested and certified to applicable standards, products can pose a serious risk of fire, shock or other hazard to the user. In the U.S. alone, counterfeit products cost industry more than $200 billion a year. For more info, contact:
email@example.com or click here.
|RETAIL LEADERS COMING
TO LAS VEGAS SHOW
|The National Hardware Show in Las Vegas, May 16-18, will once again offer a comprehensive conference program. Join Hardlines for a world-class retail panel, “Global Retailers: Best Practices from Around the World,” on May 18 at 3 p.m. Panelists include John Herbert, general manager of the European association of DIY retailers; and Robert Collins, Director of International Sales and Retail Development, Ace Hardware Corp. We also have a commitment, from the leading home improvement retailer in England, Focus, to participate, with more to be announced. This innovative event will be followed by an international reception from 4:30-5:30 p.m. For more info, click here .