John Caulfield, Contributing Editor
 vol. x, #17 April 26, 2004

IN THIS ISSUE: * AHMA Hardware Show: small is beautiful * Canadian Tire loves Target * Ace Hardware appoints Griffith COO * B&D enjoys strong year-end profits * Home Depot's latest Hawaiian store to help natives * TruServ Canada targets dealer growth * California needs more wood * Canucks decry latest U.S. softwood ruling * Ireland's leading chain wants to double business * BMR re-banners Matco stores

* * * * * * NOTE: Dollar amounts are stated in the currency of the country from which the story originates. — Michael McLarney, Editor & Publisher * * * * * *
"He who goes to law for a sheep loses his cow." — Spanish proverb
 AHMA Hardware Show 2004CHICAGO — Filling only 200,000 sq.ft. of space, the inaugural AHMA Hardware Show received mixed reviews from exhibitors and visitors alike.This new show, which is owned and operated by the American Hardware Manufacturers Association, replaces the National Hardware Show, which moves to Las Vegas next month. The AHMA broke off its partnership last year with Reed Exhibitions to go it alone in Chicago. But even compared with last year's event here, the show was less than half the size. However, that small size meant, for some, a more manageable show, one that made key buyers more accessible given the absence of many major vendors. Buyers, in turn, were likely to find more and smaller suppliers representing, in many cases, some true innovation and new product opportunities. Exhibitors included many firms that had not previously exhibited at the National Hardware Show, although many of them were not traditional hardware/home improvement companies, and looked better suited for a housewares show. According to the AHMA, Home Depot, Lowe's, Menard's, Ace Hardware, Do it Best Corp. and True Value were among the 15,000 visitors at the show. The show also managed to attract a number of international buyers — from 15 countries that included South Africa, Germany, the U.K., China and Chile. To its credit, the AHMA spared no expense in staging the show. It sponsored a lavish opening reception for buyers and exhibitors and a special reception another night for international attendees and exporting exhibitors. A seminar schedule offered insights on everything from selling hardware on the internet and international retailing, to other management and merchandising-oriented topics.
MARKHAM, Ont. — Canada's leading hard goods retailer wants new products to help it stand out. That was just one of the messages delivered by David Roussy, senior vice-president marketing, Canadian Tire Retail, speaking recently to the annual general meeting of the Canadian Hardware and Housewares Manufacturers Association.Roussy spoke about the importance of hardlines to Canadian Tire, a mass merchant that sells everything from patio furniture to automotive supplies. In total, hardware comprises almost one-quarter of Canadian Tire's business, at $1.4 billion annually. "We want to differentiate through new, exciting exclusive merchandise," he said, noting that his company, which has more than 450 stores across the country, has the resources to excel at style and design. Those elements are part of the company's efforts to better appeal to the female customer, a prime target of Canadian Tire's newest "20/20" store concept. Remarking on the increasing competition of the Canadian retail landscape, Roussy called retail "more intense" than ever. Wal-Mart Canada and Loblaw's now hold about 20% of the entire Canadian retail market, he said. He went on to quote his boss, Canadian Tire president and CEO Wayne Sales: "In retail, there are only winners and losers. There's no room in the middle." Canadian Tire sees itself fitting in alongside that competition as a retail winner by emulating Target Stores in the U.S., which brings a higher-end approach to mass merchandising to compete alongside Wal-Mart there. Canadian Tire believes there's room for only one mass merchant (Wal-Mart) but does see room for two or three other companies in the middle, or "hybrid" zone, Roussy explained. He sees Canadian Tire fitting in there. By being relevant and unique, it can be the "Target of Canada," he said.
HILO, Hawaii — Home Depot has signed a 65-year lease with the Department of Hawaii Home Lands to build a 130,000-sq.ft. store on department land here that is expected to generate more than $12 million in lease revenues over the first 25 years of the agreement.The Associated Press and Pacific Business News report that the store, which will employ 200 people, will provide the agency with funds that will go towards improving the quality of life of native Hawaiians. As part of this deal, Home Depot and the Department will renegotiate the terms of the lease after 25 years. Home Depot broke ground for the store last week, following a ceremonial blessing. The giant retailer currently operates six stores in Hawaii, but this will be its first in Hilo. It's scheduled to open in December.
OAK BROOK, Ill. — Ace Hardware Corp., the dealer-owned buying group, promoted Ray Griffith to the positions of COO and executive vice-president. The 50-year-old Griffith will oversee the co-op's day-to-day operations, including its retail development, company stores, advertising and marketing. He also has responsibility for Ace's paint divisions, logistics, 15 distribution centers and support for its 4,800 dealer members.A 10-year veteran of the co-op, Griffith had been Ace's executive vp-retail since 2000. He's also held merchandising and operations posts. Before joining Ace, he was president of Coast-to-Coast, which became part of TruServ when ServiStar and Cotter & Co. merged several years ago. Griffith is traveling on business in Asia and unavailable for comment. But Dave Hodnik, Ace's president and CEO, said in a prepared statement that Griffith was responsible for much of the co-op's recent retail successes. Last year, Ace surpassed the $100 million mark in net income for the first time, increased its wholesale sales by 4.3% to $3.2 billion, and paid out a record $102 million in patronage dividends to its members. During the year, the co-op implemented nearly 4,000 new product displays in its dealers' stores, and increased its total retail square footage by 10%. In 2004, during which it will celebrate its 80th anniversary, Ace expects to add 80 stores and increase the total retail selling space within its dealer network by 1.6 million sq.ft. This year, the company will also open a one-million-sq.ft. distribution center in Sacramento, Calif., to support its west-coast growth.
WINNIPEG, Man. — The recent Spring Market for TruServ Canada was the showcase for a number of new programs, and the official introduction of the co-op wholesaler's new "growth team."A number of programs, which have been either introduced or enhanced through the acquisition of Growmark's retail business last summer, have been evolved into "store-within-a-store" concepts as a way of folding these programs efficiently into the existing businesses of TruServ dealers. These programs include Pet Junction, an extended line of pet foods and supplies, and HWC — Hardworking Canadians — a workwear program available to all of TruServ' banners. The emphasis on these programs is part of TruServ's efforts to define the future of the independent hardlines retailer, one that figures heavily on the spending power of the female shopper, says Bill Morrison, president of TruServ Canada. "Value continues to be an important part of the business for our dealers, so we've also had a lot of emphasis at the market on our 'Red Hot' deals," Morrison says. These special buys reflect large-quantity purchases that are made available to the dealers on a rapid-delivery basis. "It gets around having to plan out their purchases by six or nine months," he adds. Red Hot specials at the latest market included fertilizer and bird seed. Finally, a renewed commitment by TruServ Canada to help build the businesses of its members was underlined by the reorganization of its management team into new business development — under vice-president Tony DiEmanuele — and sales and operations, which concentrates on development for existing dealers — under vice-president Ray Falkenberg. Falkenberg's team of district managers will help dealers understand and utilize the latest programs coming out of TruServ to help them, in turn, build sales.
CHICAGO — Woodie's DIY, a chain of 17 successful home centers, plans to double its business, according to Ray Colman, CEO. He addressed members of the Worldwide DIY Council at the group's midyear meeting held here April 17.Ireland, with more than 1.6 million households, is a prime DIY market, he explained. 80% of Irish families either own their homes or are purchasing them. Woodie's is opening two stores this year and five more next year. Stores range in size up to 50,000 sq. ft., though a number are 30,000 sq. ft. Colman explained that the Irish government has put a cap on store sizes, restricting them to a maximum of 60,000 sq. ft. With an inventory of 30,000 SKUs, Woodie's includes housewares and decorative items to appeal to women. Its female customer count has doubled over the last few years. Decorating accounts for 29% of sales; gardening, 27%; DIY, 22%; home and housewares, 13%, and building materials, 9%. To bring in more female customers — and it's getting twice as many as it did some years ago — Woodie's inventory now includes everything from picture frames and decorative items to housewares and big Christmas decorative sections in season. It also runs how-to clinics for women, teaching them how to decorate, become a DIYer, improve their yards and gardens, etc. The company recently installed a new, upgraded POS system, Colman reported, and spends a lot of time and effort on developing its people. "Customer care is our constant concern," he explained. To encourage customer service, the chain recently has concentrated on recruiting mature personnel, as it finds older employees understand customer service and are enthusiastic in offering it. More information about the Worldwide DIY Council can be found at
MONTREAL — The Matco Ravary stores purchased last year by members of Le Groupe BMR are being overhauled and will begin re-opening this week.The former Matco stores have all been re-branded BMR-Matco and the first will re-open in Beloeil, on the south shore, on April 28. The hybrid name, says BMR president Yves Gagnon, reflects the strength of the Matco Ravary chain in the Montreal market, where BMR has not previously had a significant presence. Of the six stores, which had sales of about $60 million throughout the Greater Montreal Area, one, a small, 3,000-sq.ft. outlet on property not owned by the chain, has been closed down. The others are slated for renovation over the next two or three years. As part of its renovation, the former Matco outlet in Blaineville will also have a 25,000-sq.ft. warehouse added to it, which will be used to supply the other former Matco stores.
OTTAWA — A letter signed by organizations representing about half the Canadian lumber industry warns that U.S. conditions for settling the softwood dispute are not acceptable. Under the terms of a draft by the U.S. Commerce Department, full right of arbitration on provincial forestry reform would rest in the hands of Washington.A policy bulletin issued by the Commerce Department would empower it to arbitrate whether provinces have restructured their timber pricing (stumpage fees) to satisfy U.S. rules. Such conformity would re-open doors to the U.S. market, without the burden of duties and taxes. Those penalties have so far cost Canadian mills about US$2 billion on softwood exports to the United States.
SACRAMENTO, Calif. — America's largest state — and its most active housing market — currently draws between 70% and 80% of the lumber it consumes annually from other states and overseas. That is an almost total reversal from 1988 when, according to the state's Forest Products Commission, about 75% of its lumber came from in-state production.In its first-ever "State of the Industry" report, the commission — which is funded solely by lumber producers and whose board includes officials from Roseburg Forest Products, Georgia-Pacific and The Collins Co. — notes that logging in the state has fallen by 60% over the past 15 years, and that 1.66 billion board feet of timber were harvested last year, down from 4.67 billion board feet in 1988. During this period some 15,000 logging-related jobs have been lost in the state. "Overregulation is devastating rural communities, shuttering family-owned businesses and hurting those who practice responsible, sustainable forest management in California," said Donn Zea, the commission's president. The Commission attributed the sharp decline in harvesting to two primary factors: a near-elimination of harvesting trees on government land (which has fallen 90% since 1988) and increasing regulatory red-tape that makes it harder and excessively expensive to responsibly harvest trees on privately-owned lands. Environmentalists have argued previously that mechanization has had as much to do with logging job losses in the western U.S. as environmental laws. The timing of the release of this report probably isn't accidental, as the U.S. Forest Service is advancing a plan to triple logging in 11.5 acres of national forests in the Sierra Nevadas, and is pushing to log beetle- and drought-ravaged trees that are still standing after the record number of wildfires in Southern California last year. Indeed, the commission contends that the decline in harvesting on publicly owned land is what caused those fires because government policies prevent their maintenance.
SACRAMENTO, Calif. — Ace Hardware officially opened its latest regional distribution center this past weekend. The million-sq.ft. DC in Placer County sits on 82 acres and carries an estimated $45 million in inventory and serve some 375 Ace retailers in Northern and Central California, Nevada, Hawaii, the Pacific Rim and Asia. It replaces a facility in nearby Rocklin that Ace outgrew a couple of years ago. ATLANTA — Home Depot is now carrying cut flowers in about 200 of its stores, along with live goods. A limited test last winter is being expanded to other stores in the chain, in conjunction with local florists, such as FTD. HOFFMAN ESTATES & TORONTO — Sears Roebuck reports that it lost $20 million in its first quarter ended April 3, compared with a profit of $192 million a year earlier. However, its counterpart in Canada, Sears Canada, saw its 1Q revenues rise 3.8% to $1.331 billion, from $1.282 billion for the same period last year. Same store sales increased 8.1%. Lincolnshire. Ill. — Fortune Brands Inc. saw its 1Q profits jump 40%. Strong consumer demand, favorable currency-exchange rates and cost-saving initiatives were all cited as contributing to the rise. Net income was $139.7 million, up from $99.5 million a year earlier. MISSISSAUGA, Ont. — Masonite International Corp. has reported a 36% increase in first-quarter profit on sales that were up 16%. Net income was $27.7 million, up from $20.3 million, on sales that climbed to US$468 million from US$402.2 million during the same period a year earlier. GLENVIEW, Ill. — Illinois Tool Works enjoyed a sales increase of 17% in its first quarter, to $2.71 billion. Net income rose to $290.2 million from $195.4 million, while income from continuing operations increased to $290.0 million from $199.5 million a year earlier. ITW completed 10 acquisitions in the quarter, representing $250 million of acquired annual revenues. BOISE, Idaho — Boise Cascade Corp. reported first quarter 2004 net income of $63.5 million, compared with a net loss of $27.5 million in first quarter of 2003. Sales in first quarter nearly doubled to $3.5 billion, compared with $1.9 billion a year ago. Sales increased primarily because of the acquisition of OfficeMax in December 2003, but were also aided by strong product prices in Boise Building Solutions. The quarter's results include a pre-tax gain of $59.9 million, from the sale of 79,000 acres of timberland in Louisiana. Before this special item, the company posted first quarter 2004 net income of $26.9 million. GREENSBORO, N.C. — Oakwood Homes Corp. has sold substantially all of its operations and non-cash assets to Clayton Homes Inc., a subsidiary of Berkshire Hathaway Inc., for $372.5 million in cash. The asset sale was approved by the Company's creditors pursuant to applicable bankruptcy law. The sale proceeds and substantially all assets not sold to Clayton were conveyed to a liquidation trust for ultimate distribution to the company's various constituencies as described in the company's final amended plan of reorganization, under U.S. Bankruptcy Court for the District of Delaware.
TOWSON, Md. — Black & Decker, the power tool manufacturer, saw its profits from continuing operations jump 69%, to $74.3 million, during the three months ended March 28, over the same period a year ago. The company's quarterly sales rose 16.4% to $1.09 billion.Nolan Archibald, B&D's chairman and CEO, noted that the company's margins during the quarter increased two percentage points. He attributed much of the company's sales gains to a recovering economy and the strength of its DeWalt professional line of tools. In fact, power tools and accessories accounted for 63% of the company's revenue, which appears to have weathered the decision by Home Depot, one of B&D's major retail customers, to give more shelf space to its own Ridgid tool line. B&D also saw sales from its Hardware and Home Improvement segment grow 14% in the quarter, with revenue from Price-Pfister brand faucets and bath accessories increasing 20% on the strength of Lowe's taking on that line chain wide. During the quarter, B&D added to this segment through its acquisitions of Baldwin Brass and Weiser Lock, which are currently being integrated into B&D's Kwikset security hardware business, which itself is in the process of being restructured to reverse soft sales. In the quarter, that restructuring resulted in $20 million in savings, and the company projects the total savings for the year could be $45 million. The integration of the new companies into this business is expected to yield a $40 million improvement in operating income in 2005 and 2006 combined.
Denise Goodchild has left TIM-BR Mart Ontario, where she served as supervisor, marketing and communications. She's moved over to The Mibro Group, where she's been appointed key account manager, reporting to Steve Jones, vice-president sales. (416-285-9000)At the recent annual general meeting of the Hearth, Patio and Barbecue Association of Canada, the members of the 2004 board of directors were presented: John Vukanovich of Selkirk Canada in Stoney Creek, Ont., was named president ... Fred Robinson of Crusoe Sales & Marketing in Barrie, Ont., was elected treasurer ... Patrick Bourque of Maritime Fireplace Ltd. in Moncton, N.B., is past president. The following members have joined as directors: Marc-Antoine Cantin of Stove Builder International in Quebec City; Chris Barker of Union Gas in Toronto, Ont.; and Louis Olsacher of Enbridge Gas Distribution in Ottawa. (705-788-2221)
The price paid for materials to farms, factories and refineries, climbed 0.5% in March, reports the Labor Department. Excluding volatile food and energy costs, the Producer Price Index increased by only 0.2%.
The composite leading index rose by 0.7% in March, after upward revised gains of 0.6% in January and February and 0.5% in December.The Consumer Price Index rose 0.7% in March, over the same month a year earlier. This 12-month increase was identical to the increase in February, which was the smallest since December 2001. Between February and March 2004, the CPI rose 0.3%, pushed up in large part by higher gasoline prices.
Wal-Mart, Home Depot, Canadian Tire, Home Hardware and more! Hardlines will host its third annual Meet the Buyers Breakfast Seminar, April 28, 2004. For more details, call Bev Allen at 416-489-3396 or
Hardlines has partnered with to offer the industry an easy and affordable way to place job openings on the Internet. Recruiting for good employees using the Internet is now the preferred method for all types of retailers. The results are fast, efficient and very effective. Instead of exposure for just one day, advertisements on the Internet are posted for a full sixty (60) days. The program for visitors is easy - and specially priced! To post a single job on at the special price of $150.00 plus GST for sixty (60) days, just click here to Register and Post a Job. Click here to read More about the program.

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