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April 21, 2014 Volume
xx, #16
“Small opportunities are often the beginning of great enterprises.”
—Demosthenes (statesman and orator of Ancient Greece, 384–322 B.C.)
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Home Depot’s Rapid Deployment Centres will aid online sales
ATLANTA — To support inter-connected retail efforts, Home Depot has recently opened the first of three new direct fulfillment centres. Each facility will have capacity to hold as many as 100,000 SKUs for direct ship to customers. It’s part of the giant retailer’s strategy to combine online sales with bricks-and-mortar retail.
These facilities now expand capabilities to ship most orders the same day they are received.
The company also views its 2,000-plus retail locations across the U.S. as ideal “mini-distribution centres” for customers who can buy online. If they don’t want to have the product shipped directly to their homes, they can pick up their orders at their local Home Depot store.
As another part of its inter-connected strategy, Home Depot acquired Blinds.com at the beginning of 2014. Blinds.com is an online window coverings retailer. Home Depot expects not only to expand its window treatments offerings but to use the expertise within the newly acquired company to improve its own capabilities for selling more special-order products online.
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Home improvement execs make big salaries
SPECIAL REPORT — While various provinces, and all of America, debate the benefits of raising the minimum wage, executives at the top of many home improvement companies are collecting big paycheques.
Nolan Archibald, former executive chairman of Stanley Black & Decker, topped the list in 2013. He made $52.5 million before stepping down in March of last year. While he was well ahead of the boss at Lowe’s Cos., Robert Niblock’s total pay increased last year by more than 50%, to $18.7 million, from $12.1 million in 2012. The increase was due largely to a bigger stock grant and a bonus on top of his $1.2 million base salary.
By comparison, RONA CEO Robert Sawyer made $6.6 million in 2013—for nine months of work (he started at the beginning of April). His base salary was $605,000, with the rest in stocks, options, and other incentives. His predecessor, Robert Dutton, earned just $2 million in his last complete year there, 2011. However, Dutton received another $4.5 million upon his termination.
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Dealers will have lots to do at National Hardware Show
LAS VEGAS — The National Hardware Show will be held May 6-8 in Las Vegas. And the North American Retail Hardware Association’s All-Industry Conference, which will offer a free series of educational seminars and breakout sessions, will be co-located with it. For independent dealers, the combined events offer a range of opportunities to grow their business.
Most retailers who attend the show are looking for new products. It makes sense—hundreds of new products are set to be launched at this year’s show. The Inventor’s Spotlight area houses products from several categories, including Hardware & Tools, Housewares, and Plumbing & Electrical. And in the International Sourcing area, attendees can meet exhibitors and see products from more than 20 countries around the world.
The NRHA All-Industry Conference will offer a full slate of speakers. Mark Herbek, an Amazon specialist with the Cleveland Research Group, will share reports about Amazon’s continued growth. Jill Waage, editorial director of home content at Better Homes and Gardens, will discuss the Millennial generation’s home buying preferences, while David Crowe, chief economist at the National Association of Home Builders, will talk about the current state of the housing market. Pat Murphy, from the International Society of Social Media, will offer some insights for dealers on how to stay current with today’s technology and how it can help one’s marketing plans.
Dealers can also attend breakout sessions, where they can discuss in small groups specific elements of the business, such as NRHA’s newly updated Basic Training program.
The National Hardware Show is the place to network with fellow dealers from across North America. Adam Busscher, owner of Picton Home Hardware in Picton, Ont., found out first-hand when he attended last year. “The National Hardware Show offers a great opportunity to network with other independent retailers and suppliers,” he says. “There is no better show in North America or a better way to connect with suppliers and colleagues in the home improvement industry.”
The NRHA All-Industry Conference will be held May 6-8 at the Las Vegas Convention Centre. Attendance is free with registration with the National Hardware Show. (For more information, click here.)
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Exchange-A-Blade launches rebrand
VANCOUVER — Exchange-A-Blade, the manufacturer of exchangeable and environmentally sustainable power tool accessories, is announcing the change of its corporate name to EAB Tool Company Inc., and the marketing of its core line of exchangeable products under the brand name EAB.
The move is meant to hearken back to the company’s origins as a supplier and remanufacturer of exchangeable circular saw blades for the retail hardware and building supply markets, while better representing the breadth of its power tool accessories product line. With the announcement comes the launch of the rebranding of the company’s exchangeable EAB products, and its non-exchangeable products under the existing StaySharp name.
The rebrand encompasses all logos, graphics, product packaging and in-store displays and will be rolled out to retail dealers in Canada and the U.S. during 2014. “We’re very excited about the new EAB,” said founding president Rob Forbes, describing the step as “an evolution of the brand.”
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ANALYSIS: Lumber prices heading for a super-cycle?
A lumber “super-cycle” is a lengthy period of buoyant prices for lumber. For much of 2012 and 2013, there were predictions of a super-cycle, where demand would outstrip supply of lumber and the mills that were left (after years of mill closures) would reap the profits.
The super-cycle was first predicted in 2008, but a number of factors, including the global financial crisis have delayed its progress. The question is whether, with the U.S. housing market on the path to recovery, the global economy recovering, albeit slowly, and increasing exports to China, will the super-cycle occur this year, in the near future—or at all?
In Canada, there were other disasters affecting the lumber industry. The mountain pine beetle epidemic in British Columbia is a significant event in the trajectory of the Canadian forestry industry. The epidemic is an unprecedented forest-altering event: the most severe bark beetle infestation in North America. As of 2012, the epidemic had killed an estimated 710 million cubic metres of commercially valuable pine timber—53% of the pine in British Columbia. Furthermore, that devastation is predicted by the Government of British Columbia to grow to 58% by 2017, significantly decreasing the supply of timber available in that province.
On the other side of the country, Quebec has also enacted major restrictions on the allowable annual cut for softwood species. In 2005, the annual allowable cut of softwood species was decreased by 20-30%. In April 2013, this was reduced by another 10%. In the last decade, hundreds of mills have closed and the Quebec Ministry of Natural Resources estimates at least 15,000 jobs have been lost since 2005.
Overall, the devastation in the forest sector has led to the loss of 87,000 full-time jobs in Canada and 322,000 in the U.S. since 2005.
Additionally, hundreds of sawmills across North America have been closed and investment in sawmill technology has virtually stopped. With a devastated forestry sector across North America, many of those in the skilled trades have left the forestry industry for other sectors.
At the end of 2013, Wood Markets changed its forecast to a delayed super-cycle due to continued uncertainty in the U.S. economy. For much of 2013, lumber prices retreated, instead of growing exponentially as predicted. It is unclear where the forestry industry is headed but in the short-term a super-cycle seems unlikely.
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