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| VERSCHUREN TAKES REINS OF DEPOT'S EXPO DIVISION |
| Toronto, ON — The surprise appointment of Annette Verschuren, president of Home Depot Canada, as interim president of the Expo Design Centers division of Home Depot is not likely to result in any significant changes in that division's operations or business model.
Atlanta-based Home Depot currently operates 53 Expos. Its home decor format showcases interior design merchandising such as kitchens, baths, floorcoverings, lighting, appliances, and related hardlines, all displayed in room-like settings and sold mostly as special-order installation projects.
News of Verschuren's expansion of duties was first reported in the Financial Post. Verschuren was unavailable for comment when called by Hardlines.
David Sandor, Home Depot's director of public relations, says Verschuren will split her time between Atlanta and Toronto while the retailer searches for a permanent Expo president to replace Bob Wittman, whom Depot said had retired as of April 7.
Why the 44-year-old Verschuren? "It's the logical choice," asserts Sandor. "She's done an excellent job in her current role, where she's generated sales and has taken a leadership position." Before joining Depot in 1996, Verschuren was president of crafts retailer Michael's of Canada, whose merchandise mix includes some home decor products. In fact, Home Depot's first "female-friendly" stores were developed under Verschuren's aegis in Toronto. That format creates more showroom space within the warehouse for home decor, flooring, appliances, kitchens and lawn and garden.
During the six years that Verschuren has run Home Depot Canada, the division has expanded from 22 stores at the end of fiscal 1996 to 89 stores in fiscal 2002. Last year, the division increased its revenue by an estimated 17% to $3.9 billion. Home Depot Canada is expected to open at least 12 new stores this year.
Wittman, a longtime industry vet whose extensive retailing background included stints at Grossman's, Home Quarters Warehouse and Orchard Supply Hardware, was a member of the team that purchased 75% of Aikenhead's Home Improvement Warehouse in1994 and converted that seven-unit chain into Home Depot Canada, which it now owns outright. After rejoining Depot, Wittman's duties included supervision of the chain's ill-fated Villager's Hardware experiment.
Speaking by telephone from his home in Boston, Wittman declined to comment about his decision to retire or his tenure at Home Depot except to say that "I'm very satisfied and proud of my career and my accomplishments, but it was time to move on." He said he was looking forward to "getting reacquainted" with his family, and having more time for golf and tennis.
Once Wittman's replacement is found, says Home Depot's Sandor, that person will continue to work out of Atlanta but report to Verschuren, who will remain in Toronto and continue to run Home Depot Canada. Previously, Wittman had reported to Home Depot's CEO and chairman, Robert Nardelli. Expo's merchandising team will also continue to operate from Atlanta.
Verschuren takes over Expo at a time when its expansion philosophy is tacking a new course. Prior to the arrival of Nardelli in late 2000, Home Depot planned to have opened at least 200 Expos across North America by 2005. Now, the retailer wants to put Expos in the 100 largest metro markets, but has no stated timetable for doing so. The company has opened an Expo in Phoenix so far this year, and will open one in Cleveland later in 2003. Beyond that, the company has not revealed Expo's longer-range growth plans.
When asked whether Expo will finally make its debut in Canada, now that Verschuren is in control, Sandor responded "you never know," although Verschuren herself has stated in other interviews with Hardlines that she would rather see the bugs get worked out of the format in the U.S. before introducing it here. |
| CHS MAINTAINS COMMITMENT TO
BUILDING MATERIALS SECTOR IN 2004 |
 Mississauga, Ont. — Following last week's announcement that the association of Ontario lumber dealers will quit the Canadian Hardware and Building Materials Show and form their own show, CHS has been quick to reaffirm its commitment to serve the LBM industry.
"As our name suggests, we will continue to have a strong lumber and building materials component to CHS," said Maura Bella, CHS director, in a prepared statement.
CHS, which is owned by Canadian Retail Hardware Association, has relied on the involvement of a number of associations in recent years. Its most prominent ally has been the Lumber and Building Materials Association of Ontario, which joined CHS in 2000 after the demise of its own event, the Canadian Home Centre Show.
In fact, the LBMAO's contract with CHS continues through the 2004 show, which will take place in Toronto February 1-3. Even though the deal involves a financial stake in the show for the LBMAO (but no equity), the association will hold its own show in London, ON one week later. Bob Elliott, president of the CRHA, admits the LBMAO was not entirely happy with the terms of the agreement, but says his association had left the door open for renewed negotiations and is "disappointed the LBMAO has decided to go on their own."
The reasons to hold only one show instead of two, Elliott adds, will keep costs out of the industry and reduce expenses to both exhibitors and delegates. |
| EPA TO RECOGNIZE LOWE'S |
 WILKESBORO, N.C. — On April 15, the U.S. Environmental Protection Agency will honor Lowe's Home Improvement Warehouse as its Energy Star Retail Partner of the Year.
Since 2001, Lowe's has participated in the EPA's Energy Star program, which means its stores, which number nearly 860 units, promote the sale of products that protect the environment through energy efficiency. As the second-largest appliance retailer behind Sears, Lowe's has been particularly active using Energy Star in its advertising of major appliances.
"We believe that our role in promoting Energy Star … has a significant and positive effect on the environment and the lives of our customers," says Dale Pond, Lowe's senior executive vice-president merchandising and marketing, in a prepared statement.
This year, Lowe's has committed to increasing its sales of Energy Star-qualified appliances by 20%, and has stepped up its employee training related to that program. |
| STANLEY WORKS RESTRUCTURES AGAIN |
| New Britain, Conn. — Stanley Works disclosed last week that it will reduce its workforce by 7%, close several manufacturing plants and buy back more than 200 million shares of outstanding common stock.
These cutbacks are part of a restructuring plan, approved by Stanley's board, known internally as "Operation 15," according to a filing Stanley made to the Securities and Exchange Commission. The company's goal is to increase its operating margins to a 15% "run rate" by the fourth quarter of this year. John Trani, Stanley's chairman and CEO, said that this restructuring would change "the DNA of our company."
Operation 15 calls for the following measures:
- More than 1,000 of Stanley's employees are being laid off, most of them immediately;
- The company will liquidate and close its Mac Direct division, which supplies tools through a mobile direct-supply network. Stanley will also try to boost demand for its Mac Tool line of mechanic's tools;
- Five warehouses and four plants will be closed, although no specifics were revealed at press time;
- Two long-time Stanley executives - vp-marketing Ken Lewis and vp-corporate planning and development Paul Haviland - are leaving the company. Each division will now handle its own marketing;
- The company is currently negotiating with financial institutions to buy back US$100 million of its stock. It plans to buy back another US$113 million in the coming months. This would reduce the company's outstanding shares by 9%.
Stanley has stated that these reductions would eventually save it US$85 million annually. However, in the shorter term, the company said its earnings per share for the first quarter of this year would fall between 33 and 36 cents; Wall Street was expecting the range to fall between 44 and 46 cents.
For the past several years, Stanley has been restructuring parts of its operations and laying off its workforce. Last year, it reported modest increases in sales and net income. |
|
COMPANY |
52-WEEK HIGH |
52-WEEK LOW |
CLOSE (FRIDAY) |
| Canadian Tire |
33.65 |
26.80 |
30.55 |
| Canfor |
11.70 |
6.83 |
9.46 |
| Costco |
43.05 |
27.00 |
33.15 |
| Emco |
16.90 |
8.55 |
16.40 |
| Goodfellow |
13.99 |
9.88 |
10.00 |
| Home Depot |
50.46 |
20.10 |
25.90 |
| Hudson's Bay |
15.33 |
5.87 |
7.97 |
| Lowe's Cos. |
49.99 |
32.50 |
43.90 |
| Rona Inc. |
14.75 |
11.75 |
14.05 |
| Sears Canada |
25.10 |
13.60 |
15.05 |
| Sodisco-Howden |
2.00 |
1.06 |
1.35 |
| Taiga Forest |
7.00 |
5.75 |
6.80 |
| Wal-Mart |
61.85 |
43.72 |
52.98 |
| West Fraser |
39.45 |
26.27 |
34.25 |
|
| MARKET INDICATORS |
| Municipalities issued a total of $3.9 billion in building permits, down 9.8% from the record high in January, says Stats Canada. The value of residential building permits reached $2.4 billion in February, down 14.2% from January. So far this year, municipalities have issued a total of $8.2 billion in building permits, up 10.4% from the same period of 2002.
Canada's unemployment rate slid a tenth of a percentage point to 7.3 % in March as 14,000 new jobs were added, says Statistics Canada. The drop represents a slowdown in the robust job growth of last year. The 67,000 jobs created in the first three months of this year marked the smallest quarterly increase since the last quarter of 2001. Manufacturing continued to be a weak spot in March, with factory jobs falling by 37,000. Losses were concentrated in automotive and plastics, as well as food and wood products.
Independent retailers took in the largest share of operating revenues earned by retail stores in 2001, according to Stats Canada. The 194,079 retail stores in Canada reported operating revenues of $339.0 billion in 2001, up 7.3% from 2000. |
|
|
| COMPANIES IN THE NEWS |
| Quebec City, QC, — Canfor Corp. will purchase two privately owned timber harvesting
companies based in Quebec City, Daaquam Lumber Inc. and Produits Forestiers Anticosti Inc. Daaquam, with a lumber manufacturing operation in St-Just-de-Bretenières, has an annual capacity of 150 million board feet, and timber-cutting rights in the surrounding region. Anticosti holds additional timber rights and has harvesting operations on Anticosti Island. Under the terms of the deal, Canfor pay a total of $50 million in cash and assumed debt. The transaction is expected to close on May 30, 2003.
Vernon Hills, IL — In a deal worth about US$13.9 million, Wickes was sold last week to a Dallas-based venture capital firm, Imagine Investments. The deal transfers all of the ownership of the company held by the Riverside Group to Imagine Investments, and manages to reduce Wickes's debt load to US$95 million. The 59-store building materials company's troubles can be traced back to the bankruptcy of its parent company back in 1988. When the building materials unit, Wickes Inc., went independent it got saddled with huge debt. The deal follows a previously announced intention by Bradco to buy up its remaining shares in Wickes for about $9 million.
Calgary, AB — Costco, which has been operating in Calgary since 1986, opened an expanded relocation in the southeast end of the city. With an additional 20,000 sq.ft., the location now totals more than 148,000 sq.ft. with some 4,000 SKUs and is the biggest of Costco's 61 stores in Canada.
Ottawa — The Forest Stewardship Council and the accredited certifier SmartWood have awarded an FSC certificate to Tembec for its forest resource management practices in the five million-acre Gordon Cosens Forest of Northeastern Ontario. Approximately four times the size of Prince Edward Island, the Gordon Cosens Forest is the largest FSC-certified forest in Canada, one of the largest in the world, and the first boreal (northern) forest to be certified in North America, says Tembec.
Delson, QC — Goodfellow Inc. suffered a loss of $403,000 for the second quarter, ended February 28, 2003, compared with a 2Q profit of $111,000 in the previous year. Sales, however, were up 12.3% to $114 million over last year's $101 million. For the first six months, net earnings were $3,000, compared with $1.3 million in the first half of the previous fiscal year. Sales rose about 14.7% to $242 million this year, from $211 million a year earlier.
Calgary, AB — Liquidation World Inc. had 2Q revenue of $38.6 million, an 8% drop from $42.0 million during the corresponding period in 2002. On a cumulative basis, revenue for the first two quarters of 2003 totaled $87.7 million, a 2% decrease from $89.6 million during the 26 weeks ended April 7, 2002.
Issaquah, WA — Costco Wholesale Corp. had net sales of US$3.88 billion for the five weeks ended April 6, 2003, an increase of 12% from US$3.46 billion in the same five-week period of the prior fiscal year. For the first 31 weeks of its 2003 fiscal year ended April 6, 2003, the company reported net sales of US$24.33 billion, an increase of 9% from US$22.36 billion during the comparable period of the prior fiscal year. Same-store sales March were up 8% and year to date were up 4%.
Montreal, QC — Domtar Inc. has found a buyer for its Daveluyville remanufacturing facility, which was closed on November 29, 2002. The operation has been sold to Denis Villiard of Sorel-Tracy, QC. Mr. Villiard has split the transaction into two companies: Séchoirs Daveluyville Inc., which will acquire all the land, buildings and dryers, and Pinextra Inc., which will acquire the edge-glued panel production equipment.
New York, NY — Black & Decker expects to save US$100 million annually as a result of consolidating most of its manufacturing activity into three countries outside the U.S. The Maryland-based supplier, which generated nearly US$4.4 billion in sales and US$230 million in net income in 2002, ultimately intends to generate 75% of what it sells out of two plants in China and one in Usta na Labem, Czech Republic. The restructuring is scheduled for completion by 2004. B&D has been working to recapture the US$30 million in business it lost when Home Depot decided to drop B&D's Price Pfister faucet line from its stores in the Eastern U.S. last year.
Vancouver, BC — Taymor Industries Ltd. has donated more than $30,000 in bath accessories to Habitat for Humanity Toronto. The donation will provide Habitat with enough towel bars, robe hooks, and toilet paper holders to outfit more than 150 homes in the Greater Toronto Area. |
| PEOPLE ON THE MOVE |
| Michael Trottman has been appointed director of Canadian operations for Easton, PA-based MCS Industries Inc., a manufacturer of picture frames, photo albums and wall mirrors, with manufacturing facilities in Pennsylvania, Mexico and China. He will oversee the startup of a Canadian division, complete with a Toronto showroom. Trottman will target the mass retail, office supply, drug trade, photo trade, gift trade, department store, DIY and hardware channels. MCS currently has 21 agents across Canada, primarily in the gift trade, drug and photo trade. He was formerly with Newell Rubbermaid Canada. (416) 574-2674)
Carl Durst has joined Century Vallen Industrial Supplies as territory manager for the Greater Toronto Area, effective April 21. (905-571-6161) |
| NOTED… |
| A loss of bank branches in Atlantic Canada over the last decade means that many small-business owners face enormous costs, risks and inconvenience, according to a study for the Atlantic Canada Opportunities Agency, a federal business fund. The finding is just one of the many headaches cited by small businesses in Atlantic Canada as they struggle to cope with a 16% reduction in the number of bank branches over 10 years. The report notes that the big five banks have turned out the lights at 92 Atlantic branches over the last decade. Newfoundland and Labrador have been hardest hit, losing 23% of all their branches, with almost two-thirds of those closures hitting rural communities. |
|
vol. ix, 15 April 14, 2003
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