John Caulfield, Contributing Editor
vol. xi, #17, April 25, 2005

IN THIS ISSUE: • Home Hardware unveils new store look • Home Depot restructures Canadian division • TSG looks for new dealers • Canadian Tire seeks customers for life • Renos remain hot in Canada • Quebecers are keen to renovate • U.S. feels pinch of softwood tariff battle • Ace surveys why we love to garden * * * * * *

“The truth is that thinking like a woman can be a tremendous advantage.” Mary Kay Ash (founder of Mary Kay Cosmetics Inc.)
ST. JACOBS, ON The big news for dealers at Home Hardware’s latest dealer show was the much-awaited introduction of its newest store signage and merchandising program. The comprehensive package includes modified colours, enhanced end caps and sophisticated in-store signage, all developed for Home Hardware by Watt International (better known to this industry as The Watt Group). A comprehensive store package was last done in 1996, with ameliorations made along the way. But the decision to do something more comprehensive ties in with the company’s desire to build on the strength of the Home Hardware brand. “This is more than just a décor package,” says Bill Ferguson, dealer support manager for Home Hardware Stores. “What we’re trying to do is to meet our customers’ expectations. Customers are more demanding,” he adds, noting that Home stores don’t just compete with other hardware and home improvement retailers. They must earn mind share from other specialty retailers, other forms of entertainment, even Disneyland – anything, in fact, that will make demands on the consumer’s pocketbook. Starting with the outside of the store, colours have been brightened up, with greys replaced by blacks and reds, and the entrance more clearly marked by bold signage overhead. Inside, the stores will be “warmed up,” says Ferguson, with softer colours, such as sandstone coloured tiles on the floor, and cleaner colours on the walls, to replace the existing reds and whites. Department signs have been re-introduced, as well. Banner kits that hang from the ceiling are part of the new look, but these ones reflect the look of Home’s other printed promotional materials – and they’re easy to replace. Even sharp edges in the store are replaced by curved edges in an effort to appeal more strongly to the female shopper. Home Hardware wants the shopper to stop and smell the proverbial roses. “I know everybody is in a hurry, but these new elements help to slow people down. It creates an environment that’s warmer, more friendly. But at the same time,” he adds, “we’re trying to create a more effective shopping experience.” The overarching ambition of the new look is to tie the stores more closely to the promotional – and branding – efforts of other media, such as television ads, flyers and catalogues. “We have to be marketing in the store. It’s not just about merchandising,” says Ferguson. “The store is really part of the message and that’s what we’re trying to get across.”
CALGARY Homecare Building Centres and Commercial Independent Dealers celebrated a strong year at their recent annual meetings. More than 250 individuals from both buying groups joined here recently to celebrate the results and collect their rebates.The combined annual purchases by Homecare and CID Dealers grew by $50 million in 2004 to almost $400 million. In addition, the combined overall rebate revenue grew to a high of more than 8%. Homecare and CID represent the Ontario membership of the larger umbrella group, Matreco. At the end of last year, Homecare agreed to join with fellow Matreco member TIM-BR-Marts Ltd. Together, the combined purchases of TIM-BR-Marts reach almost $1.2 billion and are continuing to grow! Great opportunities currently exist for expanding TIM-BR-Marts nationally. During the meetings, leadership of both groups was turned over to Tim Urquhart, president of TIM-BR-Marts Ltd., as Don Nash, formerly president of both CID and Homecare, assumes the role of executive vice-president of TIM-BR-Marts Ltd. Cost savings are anticipated by combining head office functions, including accounting, buying, flyer advertising and TIM-BR-Mart marketing. Lots of new and enhanced programs are being introduced, arising from the ‘humongous’ buying power and large number of stores.
MONTREAL Home Depot’s most successful division has been re-organized, as Home Depot Canada moves from three divisions to two. Formerly, the country was divided into East, Central and West, with Ontario comprising the Eastern region. That province has been divided, with Southern Ontario, including the densely populated Greater Toronto Area, becoming part of Canada East.Roger Plamondon, formerly in charge of Quebec and Atlantic Canada as regional development director, has taken a new title – and increased responsibilities – as regional vice-president of operations for Canada East. With that Central region now under his auspices, Plamondon divides his time between Toronto and Montreal, reporting to Home Depot Canada president Annette Verschuren. Jeff Kinnaird is now regional vice-president of operations for Canada West, which includes Northern Ontario. The move, says Plamondon, will allow Home Depot Canada to strengthen its core functions. It also better reflects the organization of the parent company, based in Atlanta. “The vp structure aligns the Canadian structure more with the U.S. structure,” he says. “It also better reflects the reality of what the marketplace really is, identifying Western and Eastern markets.”
MISSISSAUGA, ON Last week’s announcement that Leon’s Insulation Inc. had joined Rona makes a hole in the ranks of Canada’s newest buying group, The Signature Group. TSG has a small, but powerful roster of members, all specialty gypsum and insulation dealers. But Leon’s, with sales of $95 million last year, is the largest GSD in Ontario, and was one of TSG’s largest members. Leon’s was sold for $48.5 million to Winroc, a division of Superior Plus.But the departure of Leon’s from the group only opens up opportunities for new members, says TSG’s president, Doug Skrepnek. “With everything that occurs, an opportunity creates itself,” he says philosophically. “This actually leaves room for other Ontario dealers who could fill the void.” Skrepnek says he’s been in regular contact with other commodity dealers in Southern Ontario who would be more than willing to replace Leon’s in the group’s membership. He adds that the group will add more members from other regions, as well. “We’re still as big as any group in Canada, and frankly, we’ll make some moves over the next six months to fill the gap.
MONTREAL Almost three-quarters of Quebecers are regularly involved in renovation and DIY projects, reveals a new study by the Quebec association of home improvement dealers, ADMACQ. The Rénovex ADMACQ Index indicates that the level of renovation activity is down only slightly in the first quarter of 2005, compared with September 2004 and January 2005, when the Rénovex ADMACQ Index reached 76% and 70% respectively.The results support what ADMACQ’s dealer members have recognized themselves – that the DIY trend remains healthy in Quebec, says Donald O’Hara, president and general manager of ADMACQ. “Since the very first Rénovex ADMACQ Index, nearly three households in four have stated that they are regularly involved in renovation or do-it-yourself projects.” As warm weather arrives in the province, Québec households are expected to step up their renovations on the outside of their homes. In fact, nearly one in four households is planning exterior renovation work in the coming months, says the Rénovex ADMACQ Index. That’s up by 5% over the Index results from January 2005. For more information on the study, contact: Donald O’Hara at: 450-646-5842, or
TORONTO The recent release of details of a five-year strategic plan by Canadian Tire Corp. included a mandate to build customer loyalty among its retail customers, while increasing the company’s global sourcing.Canadian Tire’s newest store format, Concept 20/20, placed a high emphasis on keeping customers in the store longer, increasing their inclination to shop from department to department, thereby increasing the overall basket size of each customer transaction. But the new strategy will focus on ensuring those customers keep coming back to Canadian Tire. Everyone within the stores, from staff to Canadian Tire associate dealers, will be encouraged to “perform in a manner that supports our goal of developing life-long relationships with our customers,” explains a recent release. The end result, higher sales, will satisfy Canadian Tire’s overriding mission to increase shareholder value. Canadian Tire also wants to increase the number of products it sources globally, to maintain product margins, increase sales and “improve the customer value proposition by offering greater product innovation.” The giant hard goods distributor opened its first office in Hong Kong last fall. The company expects to spend $350-$400 million annually to support its continued expansion and the development of its infrastructure.
TORONTO Canadians homebuyers are spending top dollar to purchase the “perfect” home, only to invest tens - sometimes hundreds – of thousands more to renovate, decorate and customize, says a new study by RE/MAX. “Today's Canadian purchasers are more educated, more sophisticated and more demanding than their predecessors, says Michael Polzler, Executive vp, RE/MAX Ontario-Atlantic Canada, in a prepared release. “Their level of disposable income is also higher. They are making housing decisions that reflect their needs, while renovating to realize their dreams and desires. He says potential home buyers will view properties with their contractors or architects in tow, to evaluate its renovation potential. The average expenditure on a home renovation exceeds $14,000, with 10% of homeowners planning to spend $25,000 or more. Much of the expenditure will be fuelled by inheritances that ageing baby boomers are receiving. The total value of that inheritance money is expected to reach $550 billion nationally over the next 10 years, says a report by Ernst & Young. According to Statistics Canada, renovation spending in Canada will reach a record $38 billion in 2005, climbing to more than $40 billion in 2006. Nearly 40% of all homeowners plan to undertake some kind of home improvement this year, with a minimum expenditure of $1,000. The most popular renovation projects, which also provide a solid return on investment, asserts the RE/MAX study, include bathrooms, kitchens, exterior projects such as a new roof, paint, windows, and flooring.
WASHINGTON — A bipartisan contingent in the U.S. House of Representatives is calling on President Bush to stop the country’s current trade war with Canada over softwood imports. More than 45 congressmen, including six members of the Ways and Means Committee, sent a letter urging Bush to end duties on those imports, which amount to more than 20%, that by some estimates are causing home prices to rise and are pricing 300,000 families out of the market. “Essential to a strong housing market is the U.S. construction industry’s access to a reliable supply of softwood lumber, because sufficient quantities and appropriate substitutes do not exist in the U.S. for the type of lumber manufactured in Canada,” stated the letter.Some $4 billion in collected duties are being held in escrow, and the U.S. has stated that it would not comply with the North American Free Trade Agreement and return those duties if they are found to be illegally collected. The signatories, as well as the American Consumers for Affordable Homes, an alliance that has been fighting for free trade and open lumber sales between the two countries, are urging the President to honor the U.S. commitment under NAFTA’s dispute resolution process, and assure that duties illegally collected are returned to Canada. U.S. and Canadian producers have battled over lumber turf since the early 1980s. More than 100 bipartisan members of the U.S. Senate and House of Representatives have called on the Bush administration, over the past four years to end its challenge to Canada, and not impose any export taxes, duties, or quotas on lumber that is essential to the domestic housing market and economy.
OAK BROOK, Ill. A new study commissioned by Ace Hardware Corp. reveals some DIY habits of Americans, including an overwhelming urge to garden and landscape. “Why Americans DIY”, a study of 1,000 U.S. homeowners found that 83% said they personally work in their yard or garden, reflecting the passion people have for these outdoor extensions of their homes. Benefits cited by these “green thumbers” range from simply relaxing in the great outdoors and personally harvesting fruits and vegetables to making their homes more attractive. And this trend shows no sign of slowing down. According to the study, gardens will continue to be a strong focus of outdoor projects for DIYers throughout 2005. Nearly half of the respondents to the study – 45% -- said they will add flowers; almost one-third will plant trees or shrubs; and 32% will grow vegetables.“Yards and gardens offer a wonderful retreat from today's frenetic, fast-paced world,” says Lou Manfredini, Ace Hardware's “Helpful Hardware Man” and national home improvement expert. “Plus, people greatly appreciate the simple pleasure of working with their hands to grow living things.” Women are more likely to dig in the garden than men, however. Fifty-six percent of women said they like planting flowers, versus 34% of men. Male involvement in the yard and garden was reflected in purchasing intentions: 10% of respondents say they’ll buy a new gas grille this year.
The National Hardware Show in Las Vegas, May 16-18, will once again offer a comprehensive conference program. Join Hardlines, in conjunction with the Presidents Council, for a world-class retail panel, “Global Retailers: Best Practices from Around the World,” on May 18 at 3 p.m.Panelists are: John Herbert, general manager of the European association of DIY retailers; and Robert Collins, Director of International Sales and Retail Development, Ace Hardware Corp. Harald Lux, head of Emil Lux in Germany, which includes OBI, has also agreed to join us. If that wasn’t fantastic enough, we also have a commitment from Jim Lowe of the leading home improvement retailer in England, Focus, to participate.This innovative event will be followed by an international reception from 4:30-5:30 p.m. For more info, click here .
TORONTO Sears Canada Inc. recorded total revenues for the first quarter ended April 2, 2005 of $1.32 billion, down 0.8% from $1.33 billion for the same period in 2004.13 weeks ended April 3, 2004. Same store sales decreased 2.5%. Net earnings for the quarter, including non-comparable items, were $13.9 million, down from $16.6 million. Net earnings for the quarter, excluding non-comparable items, were a loss of $3.8 million, a swing from the profit of $7.7 million in the same quarter last year. The results were blamed on the long winter and the early arrival of Easter. NEWTON, IA Maytag Corp. reported first-quarter consolidated sales of US$1.168 billion, down 4.2% from sales of $1.219 billion in the same period last year. Consolidated net income for the first quarter was $7.7 million, compared with US$38.7 million a year earlier. Lower net sales and higher costs, primarily for steel and energy-related items, plus higher distribution costs reduced first-quarter profitability. NEW YORK Tembec, the giant Canadian forest products company, has teamed with environmental organization ForestEthics to identify and protect endangered forests in North America’s largest remaining wilderness, the Canadian boreal forests. The two groups will rely on certification by the Forest Stewardship Council to assure buyers that products are free of social and environmental controversy. Tembec has committed to seeking FSC certification for the forests under its care by the end of 2005. The boreal forest of North America is one of the largest intact forest ecosystems left on earth, with 25% of the earth's remaining intact, road-less forests. This region supports some of the planet’s largest populations of wildlife, including grizzlies, wolves, woodland caribou and lynx. FORT WAYNE, Ind. — The dealer-owned buying group Do-it Best, will include a first-time exhibit at its annual spring market that combines the Farm & Ranch and pet supplies categories.The exhibit area will have several components, including an outdoor display area for equipment and related products, as well as suggested planograms for different-sized stores and marketing tips. More than 350 clip strip ideas will be on display, featuring items targeted for sale during the months of January through July. The co-op stated that dealers can aim this merchandise at several target customers: people who actually own farms and ranches; the “hobby farmer,” whose numbers are growing beyond rural markets; and the 70% of Americans who own at least one pet, and who spend $31 billion annually on pet supplies. The program can fit into 20 ft. or up to 400 ft., depending on the dealer’s needs. The exhibit will be part of Do-it Best’s spring convention, to be held at the May 14 through May 17 at the Indiana Convention Center in Indianapolis. NEW YORK Sherwin-Williams had earnings of US$83.3 million for the first quarter, up 62% from US$51.5 million during the same quarter a year earlier. 1Q sales rose to US$1.54 billion, from US$1.32 billion in the same period a year earlier. Sales were up 17% to US$1.54 billion, from US$1.32 billion. Revenue was driven, says the company, by architectural paint sales to contractors and DIYers, but adds that consumer sales growth was weak. MONTREAL Hart Stores Inc., the chain of mid-sized department stores, recorded net earnings of $5.1 million for the fiscal year ended January 29, 2005, down from $5.4 million a year earlier. Total revenues for the period increased to a record $133.8 million, from $127.8 million. Subsequent to the fiscal year end, Hart Stores opened three new stores, including a 40,000-sq.ft. outlet in Whitby, Ont., the company’s third store in Ontario and its first in the Greater Toronto Area. Hart Stores Inc. operates a network of 67 mid-sized department stores under the Hart, Bargain Giant and Géant des Aubaines banners. BRENTWOOD, TN Tractor Supply Co., the largest retail farm and ranch store chain in the United States, enjoyed first-quarter net sales of US$377.2 million, a 14.1% increase over US$330.6 million last year. Same-store sales increased 4.2% versus last year’s 12.4% gain. Gross profit increased 13.0% to US$112.1 million and gross margin was 29.7%, compared with 30.0% for the comparable quarter in 2004. Net income for the quarter was US$0.7 million, down from $3.4 million for the same quarter in 2004. Tractor Supply opened 13 new stores and relocated another two during the quarter. GLENVIEW, IL Illinois Tool Works Inc. has posted a 7.6% increase in quarterly profit, thanks in part to acquisitions and strong demand in its North American specialty systems business. The company, whose products range from fasteners and beverage holders to food service equipment and countertop materials, earned $312.3 million, up from US$290.2 million in the same period a year earlier. Sales were up 13% to US$3.07 billion, from US$2.71 billion. TORONTO Norbord Inc., one of the world’s largest producers of OSB, particle board and plywood, comes off a first quarter of strong earnings with the announcement that its board of directors has approved a series of capital initiatives to enhance shareholder value and increase the earnings capacity of the company. The four initiatives include payment of a special dividend to common shareholders, redemption of all outstanding preferred shares, continuation of common share repurchases under a normal course issuer bid, and expansion of the company's North American OSB capacity.
Consumers paid 2.3% more in March than the same month a year earlier for the goods and services included in the Consumer Price Index basket. This increase followed a 12-month rise of 2.1% in February. The increase owed a lot to rising gasoline prices. The CPI, excluding energy, was up 1.7% from March 2004 to March 2005. From February to March, the CPI rose by 0.6%. Wholesale sales increased for the fourth time in the past five months, gaining 1.1% in February, says Stats Canada. Since September 2003, total wholesale sales have generally been rising, following declines since March 2003. Of the 15 trade groups, seven posted gains in February, which accounted for 65% of total sales.
According to the U.S. Commerce Department starts of new homes fell in March to their lowest levels since January 1991. Starts declined by 17.6%, compared to March, to an annualized rate of 1.837 million units, the lowest level since last November’s. Starts of single-family homes fell 14.4% to 1.529 million units. In addition, building permits, which usually augur future construction activity, declined in March by 4% to 2.023 million units.
“Tembec is raising the bar in terms of what practices are acceptable in the forest and the products available in the market.” – Lafcadio Cortesi of ForestEthics, whose organization has partnered with forestry giant Tembec Inc. to expand the base of “forest-friendly,” FSC-certified products.

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Our Client is a North American leader and manufacturer of a broad range of products for a variety of construction applications. An energetic, proven Manager to be responsible for all aspects of national sales to building supply dealers is required. You will be responsible for bottom line objectives, customer negotiations and managing the retail products sales force. To be successful, you’ll already possess strong building products marketplace knowledge and multiple channel experience…and have proven sales and supervisory successes. You thrive as being part of the management team and possess strong customer presentation skills. Competitive compensation and benefits package and the opportunity for career advancement are in turn offered for this Ontario based opportunity. To apply, please call or forward your resume in strict confidence to Wolf Gugler or Lesley Fulton, quoting Retail Business Sales Manager. Wolf Gugler & Associates Limited. Email: Web site:, (888) 848-3006. (4.25/5.02.09/05) **********************************************************************************   NATIONAL SALES MANAGER – VANCOUVER This well established and growing Canadian mid sized building products manufacturing company is their niche market leader, and is adding to their management team. Based at their corporate office, you’ll manage and motivate a small national sales force and business development, while being the point person for major accounts including Rona and Home Depot. Significant growth opportunities exist in Eastern Canada and the United States, and you’ll benefit financially based on your success, with a generous open-ended bonus program. You have successfully managed a regional or national sales group, or are ready to make the transition from key account sales to the next level. Working knowledge of the building materials industry is essential, along with a proven record of business development successes and a willingness to travel as necessary. Post-secondary education preferred. A competitive salary, bonus, car allowance, company benefit package, and relocation assistance are offered. Enjoy the lifestyle that the west coast has to offer! To explore this opportunity in complete confidence, please contact Wolf Gugler. Wolf Gugler & Associates Limited. Phone; (888) 848-3006. Email: Web site: (4.18.25/5.02/05) **********************************************************************************   SALES REPRESENTATIVE Dynamic power tool accessory company looking to expand their national manufacturer rep network and develop new Retail accounts including, Sodisco-Howden , Rona, Home Depot, Home Hardware and ILDC among others. Perfect opportunity for independent manufacturer agent with proven contacts within these organizations. Please forward resume to or fax to 905 513 7924 Attn. Sales Manager. ( **********************************************************************************

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