Home Depot plans fewer stores, more acquisitions in 2006
MARKHAM, Ont.–Home Depot welcomed spring with the announcement of its growth plans in Canada for the coming year. Canada's largest home improvement retailer will open 18 stores this year, and focus further expansion efforts on additional acquisitions to add to its Home Depot Supply division in an effort to increase its business with pros and contractors.
Home Depot is responding to a number of trends as it develops new store formats and new product lines. These include a growing population, and the aging of a key demographic–baby boomers. In addition, the children of boomers are building families and owning homes of their own. People are getting more pressed for time, increasing opportunities to cater to a do-it-for-me market with installed sales, as well.
A lot of product lines are being expanded to cater to the aging customer. These include areas such as safety, with grab bars and shower seats; and pastimes such as gardening with kneelers and even motorized wheelbarrows. The female customer, which accounts for more than 50% of all home improvement spending and more than 80% of the decision-making when it comes to home improvement projects (according to a study by HARDLINES in conjunction with ACNielsen), represents a powerful segment that needs to be served, not just through product assortment, but in terms of store layout and services.
But the company is also preparing for the arrival in Canada of its biggest competitor, Lowe's Cos., which has announced it will open up to 10 stores here in 2007. Although Home Depot is actually opening two fewer stores this year than it did last year, its track record remains strong compared to the rest of the company. Home Depot worldwide will open about half as many stores over the next five years as it has in the past five, as it focuses on its wholesale supply business and online sales.
The Canadian store openings, which reflect a $450 million investment and the addition of 1.6 million sq.ft. of retail space, will include nine in Ontario (where Lowe's intends to make its debut), four in British Columbia.
RONA makes inroads in West, Quebec
BOUCHERVILLE, Que.–An acquisition and a brand new store marks the latest steps in RONA's expansion. Last week the company received necessary regulatory approvals to complete the purchase of a 51% interest in Matériaux Coupal Inc., one of Quebec's leading home improvement retailers. Coupal had 2005 sales of almost $125 million, 80% of that going to pros and contractors, a market that RONA is keen to expand into.
Coupal operates nine stores, representing approximately 53,000 sq.ft. of retail space, and employs about 540 staff. The company also operates two Truss Experts factories, which manufacture roof trusses, joists and pre-fabricated walls, and an interior finishing factory. Coupal's managers and staff will continue at the stores under the new ownership arrangement.
While building its pro business in one province, RONA also added to its traditional retail business last week in another. A RONA proximity store opened in Spruce Grove, Alta. At about half the size and half the staff of a regular big box RONA outlet, the proximity store, aka the neighborhood store, is RONA's version of a smaller big box that will fit into smaller, and typically more urban, markets. It houses about 25,000 SKUs within 52,000 sq.ft. of space, which includes a 29,210-sq.ft. sales area and 7,845-sq.ft. inside lumberyard. The exterior lumberyard covers nearly 2.5 acres.
"The new RONA proximity store concept, our neighborhood store as we call it, brings greater selection, service, and of course, our practical renovation expertise to help customers create wonderful living environments," said RONA president and CEO Robert Dutton, who was on hand for the opening.
Canadian Tire expands housewares department with Debbie Travis line
TORONTO–Canadian Tire has enhanced its decor accessories department, with a limited rollout that includes expanded lines of Debbie Travis branded accessories.
Travis, a décor and renovation celebrity whose face is familiar both on TV and in print, first signed with Canadian Tire last spring. At that time, the company launched the partnership with the Debbie Travis paint line. The DIY design angle of Debbie Travis products is based on choosing one of four "moods"– Dramatic, Nostalgic, Calm or Cheerful–and then realizing that mood through colours and patterns.
For spring 2006, Canadian Tire has unveiled a number of new lines bearing the Debbie Travis name and "mood" approach to decorating. They are: lighting, a collection of table and floor lamps; window coverings and decorative hardware; floor coverings, mainly a series of decorative rugs; decorative accessories such as picture frames, clocks, mirrors, vases, and scented candles; bathroom accessories; laundry, which includes scented baskets and canvas bags; and tabletop products, including plateware, cutlery, bowls, etc.
These new lines will be featured prominently in a refurbished décor and accessories department that Canadian Tire is rolling out in 80 stores to start. The enhanced department is closer to the front of the store, and features décor accessories as well as kitchenwares and housewares. The department was launched this past weekend in Canadian Tire's store in Pembroke, Ont. It will become part of the retailer's 20/20 store upgrade program, and be included in all new and renovated stores in the future.
Home Depot's Canadian buying team gets extreme makeover
TORONTO–Well, now we know why Gino DiGioacchino had to opt out of our HARDLINES Meet the Buyers Seminar last week (he was very ably replaced by Andra Matusevics. More on Meet the Buyers next week’ÄìMM)
. He got a promotion, one that's keeping him very busy indeed. He's now in charge of Home Depot Canada's merchandising team as Merchandising Vice-President. He was formerly Director of Merchandising, Hardlines.
As Merchandising Vice-President, DiGioacchino takes over from Glenn Bingley, who has "accepted" the position of Regional Merchandising Manager for Canada West. He'll remain based in Vancouver.
In a letter to vendors that went out last week, DiGioacchino said, "I want to ensure [the vendors] our team is prepared for the aggressive growth that our Division continues to experience." That meant a wholesale shakeup of the buying team, including the creation of a new position within the Canadian office.
John DeFranco, formerly merchant for some seasonal products, including barbecues and outdoor power, has been appointed Divisional Merchandising Director, Hardlines. He will work closely with Karol Hurrell, who is divisional merchandise director, Soft Lines, and with DiGioacchino.
A number of promotions were made, as well, to a newly created position of Senior Merchant. These positions will report directly to the DMDs and will provide leadership for their specific departments. On the hardlines side, Ian Cleghorn, formerly merchant for electrical, has been named Senior Merchant, Seasonal; and Colin Ayers has moved from lumber merchant to the position of Senior Merchant, Lumber and Building Materials. A Senior Merchant for Hardware has yet to be named, but is expected soon.
On the softlines side, Andra Matusevics, formerly merchant for kitchen and bath, has accepted the position of Senior Merchant, Flooring and Organization. Shawn Ettinger has been promoted to Senior Merchant, Kitchen, Bath and Appliances.
Independent dealer finds good ideas at Cologne Fair
COLOGNE, Germany–Almost 75,000 trade visitors from 140 countries worldwide attended the recent International Hardware Fair’ÄìPractical World trade show. The four-day event provided business opportunities for executives and buyers from the world's leading home improvement companies. But opportunities abounded even for independents traveling from as far away as Western Canada.
Just ask Hugh Schneider. The owner of Schneider's Building Supplies in Leduc, Alta., used the show as a way to tie in some personal travel via London before flying into Cologne. "We looked at this show for a couple of years and talked about it," said Schneider. The results were positive for his business, which does a lot of retail, but also has strong sales to the agro market with specialized storage buildings for agricultural and light commercial applications.
Although many of the building products he saw are not distributed in North America, Schneider took away some ideas that he will present to his own suppliers. "We found a good manufacturer of overhead doors from Italy. It was very interesting," he continued. He said innovative products enhance his company's position as a specialty supplier, and they provide better margins. "We don't want to keep our head in the sand about new ideas."
Proposals must be persuasive says CHHMA speaker
MARKHAM, Ont.–A series of breakout sessions and presentations from industry and economic experts marked a two-day conference held recently in conjunction with the annual general meeting of the Canadian Hardware and Housewares Manufacturers Association. Content was aimed at helping the vendor members of the association understand their market better, and enhance their business skills.
Speakers include Don Drummond, senior vice-president and chief economist for TD Bank, whose annual input at the conference provides insights into the direction of the country's economy. Another presenter was Michael Sloopka, a negotiating expert who gave some valuable tips on how to make a proposal that really sells. (Don't tell me’Äìhe was on right before dinner was served–Editor)
Sloopka started by challenging everyone to identify their product or service's own selling features and benefits. After all, if you aren't crystal clear about them, how will you communicate them to your prospective customer? But even that isn't enough, because in the end, customers don't want F&B, they want solutions to their own problems, results that can give them lower prices or better systems.
For example, Sloopka said your opening line or first PowerPoint slide should identify how the prospect will make money with you. That takes persuasion–something a proposal should be, above all. "Writing an effective proposal," he pointed out, "is the difference between informing and persuading."
84 Lumber culls "underperforming" stores
EIGHTY-FOUR, Pa.–84 Lumber, the pro dealer chain that has been among the industry's most aggressive expansion companies in recent years, will close 67 of its 521 locations. The stores to be closed are in mostly rural and slower-growth areas in 19 states, and were deemed "underperforming" by company officials. A dozen of those stores are in its home state, as well as 13 in Ohio, seven in Tennessee, five in New York, four in West Virginia, three each in Kentucky, Michigan and Indiana; and two in Georgia. The closures will affect around 600 employees nationwide.
84 Lumber has set as its goal to increase revenue’Äîwhich last year was a shade under US$4 billion’Äîto US$10 billion by 2009. To that end, the company intends to open 125 stores over the next four years in faster-growing areas in 20 states, where it will also add 1,000 salespeople. Its plans include 50 store openings this year, and at least 42 in 2007. The company is reportedly reviewing 20 sites for openings in 2008.
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Lowe's Home Improvement is a Fortune 50 retailer experiencing phenomenal growth. With more than 1,150 stores and 175,000 employees across the U.S.A., we've doubled in size in the past five years and are now expanding across the border.
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