John Caulfield, Contributing Editor

vol. xi, #31, August 02, 2005

IN THIS ISSUE: • Home Depot, TruServ, Canadian Tire join executive conference • Saint Gobain ups bid for BPB • Stock makes acquisitions • Profits up for top chains * * * * * *

“Discovery consists of seeing what everybody has seen and thinking what nobody has thought.” — Albert Szent-Gyorgyi (American scientist)

RETAILERS COME FACE-TO-FACE AT UPCOMING HARDLINES CONFERENCE

SPECIAL REPORT — North America’s top retail executives will meet and present at the 10th Annual Hardlines Conference Series and Awards Gala this fall. The two-day summit for the home improvement industry’s leading retail executives, innovative independents and industry suppliers will be held September 12-13, 2005 at the Hilton Suites Hotel in Markham, Ont. There, you’ll get first-hand insight into the latest education, retail trends and intelligence that will guide this industry – right from the experts.Here are some of the highlights of the incredible two-day event: “A view from the top: where do we go from here?” As the number-two guy at the number-one home improvement retailer, John Costello, Executive Vice-President of Merchandising and Marketing for Home Depot, joins us from Home Depot’s headquarters in Atlanta to make a rare public appearance in Canada. A well-known and highly respected marketing and retail executive, Mr. Costello has more than 25 years of experience in consumer goods, retailing and technology. He is currently responsible for Home Depot’s merchandising, marketing, branding, advertising, visual merchandising, public affairs, e-business and global sourcing. He was named one of the 50 Most Influential People in Marketing by Advertising Age and was elected to the Retail Marketing Hall of Fame in 1997. Not to be missed! “Foresight is 20/20: Canadian Tire’s vision for the future of retail” Mark Foote is President of Canadian Tire Retail. Find out how Canada’s largest hardlines retailer continues to re-invent itself – and redefine the scope of hard goods retailing. Mr. Foote’s responsible for marketing, merchandising, advertising and supply chain management for Canadian Tire Retail and the company’s consumer e-commerce business. Canadian Tire is one of Canada’s Top Four home improvement retailers, making it a huge customer for some – and a major competitor for others. Mr. Foote will talk about the most daring – and most successful evolution of Canadian Tire to date. Learn about Canadian Tire’s newest strategies to maintain and grow its dominance! “Re-inventing the role of the independent” Wal-Mart, Home Depot, and now Lowe’s! The threat faced by the independent in Canada is a serious one, yet independents are finding their place in the retail scene, and thriving. If you want to hear a truly amazing retail mind at work, don’t miss Bill Morrison, President and CEO of TruServ Canada as he offers his insightful observations on the realities facing home improvement retailing today. With a background that includes Foot Locker and Home Outfitters, Mr. Morrison is well suited to offer a better understanding of the demands of today’s consumer – and how best to meet those demands to build your business. “Lessons learned: a home improvement expatriate’s perspective” Stephen Bebis, President and CEO of Golf Town, is the man who brought the home improvement big box to Canada. In 1991, he came to Canada to start Aikenheads Home Improvement Warehouse. When Home Depot purchased 75% of Aikenheads in 1994, he stayed on for two years as President and Chairman of the Partnership Board. In 1998, he joined Golf Town.

CERTAINTEED PARENT BIDS FOR GYPSUM PRODUCER

PARIS — Saint-Gobain, the biggest distributor of building materials in Europe, was expected to make a higher bid today for its rival, U.K.-based BPB plc, the world’s largest plasterboard maker, after BPB last week rejected Saint-Gobain’s cash offer, valued at the equivalent of US$5.9 billion.BPB, based in Great Britain, produces an estimated one-fifth of the world’s demand for gypsum wallboard. It reported a 29% increase in profits for the year ended March 31. BPB is said to be planning new factories to meet worldwide demand in Spain, eastern Europe, Asia and South Africa. The question, however, is how much Saint-Gobain is willing to ante up for the company. Investors speculate that its bid could increase by anywhere from 3% to 11% of its original offer.

BUILDERS FIRSTSOURCE ISSUES FIRST QUARTERLY STATEMENT

DALLAS — Strong homebuilding activity propelled the growth in quarterly sales and profit at Builders FirstSource, the fifth-largest pro dealer in the United States, with 62 yards and 50 manufacturing facilities in 11 states. Builders FirstSource stated this week that its net income for the three months ended June 30 soared by 58.5% to US$20.2 million, on revenue of US$618.6 million that was up 12.9% over the same period a year ago. During that quarter, the company increased its gross margin to 25.1% of sales, from 21.9%. Builders FirstSource made its quarterly results public for the first time, having completed an initial public offering of 12,250,000 shares of common stock on June 22. The money it raised from that IPO helped reduce its debt to $365 million as of June 30, from $510.2 million on the same date in 2004. However, the company also stated that it had $36.4 million in stock compensation expenses through the first six months of its fiscal year, compared to only $437,000 for the same period a year ago. As a result, Builders FirstSource’s net income for the first six months of the fiscal year was only $1.3 million, compared to $16.6 million for those six months of 2004. Its first-half sales, though, rose 15.9% to $1.128 billion. Floyd Sherman, Builders FirstSource’s president and CEO, projected continued growth through the remainder of this year, driven primarily by “market share gains and strong customer demand for our prefabricated components product offering. Our operating strategy will continue to focus on increasing market share and improving our operating leverage as well as continued expansion of our manufacturing capacity to meet customer demand.”

COMING HARDLINES EVENTS:

Early Bird Special for the Hardlines Conference Series, Sept. 12-13 extended Tuesday ONLY; includes Outstanding Retailer Awards at the Hardlines Gala Dinner Sept. 12

COMPANIES IN THE NEWS

MONTREAL < — Forest products company Tembec saw sales for the third quarter drop to $.96 billion, from $1.03 billion in the comparable period last year. Net loss increased to $142.5 million, from $12.6 million in the third quarter of 2004. EBITDA was $27.5 million, compared with EBITDA of $91.2 million a year ago. RALEIGH, N.C. — Stock Building Supply, the largest pro dealer in the U.S., has expanded its market reach in the South by acquiring dealers in Florida and New Mexico. The company bought J.C. Baldridge Lumber, a 124-year-old institution in Albuquerque, N.M., that employs 75, generates more than $33 million in annual revenue. Stock has also acquired Adams Building Materials, a Winter Haven, Fla.-based dealer with seven locations that generated in excess of $118 million in revenue in 2004, virtually all of it from professional customers. The 44-year-old company employs 443 people. SAN FRANCISCO — Building Material Holding Corp, a leading pro dealer and service provider, reported a 225% increase in net income, to US$54.6 million, for the six months ended June 30. The company’s sales during this period rose 32.7% to $1.27 billion. BMC Construction is in the due diligence phase of acquiring three more businesses: San Diego-based HnR Framing Systems; Campbell Cos., a contractor that provides installation for builders in Las Vegas and southern California, and Home Building Components, another framer. BRENTWOOD, Tenn. — Tractor Supply Co. has signed a letter of intent to purchase Del’s Farm Supply Inc., a privately owned chain with 17 stores based in Lakewood, Wash. The stores, which operate mainly in the Pacific Northwest, specialize in rural lifestyle products, including the equine, animal and pet category. Del’s had sales in 2004 of approximately $34 million. The deal is expected to close in the third quarter. Tractor Supply expects to continue operating the stores under the Del’s Farm Supply name. NEW BRITAIN, Conn. — Profits for Stanley Works rose by 7% in the second quarter to US$65.9 million, compared with US$61.4 million in the same period a year earlier. Earnings from continuing operations totaled $66 million, up from $58.8 million a year earlier. Stanley’s sales rose 9% to US$824 million. SANTIAGO, Chile — Department store company Falabella, the parent of giant Chilean home improvement chain Sodimac, has made a deal with Grupo Corona to open stores and offer credit services in Colombia, part of its expansion throughout South America. Grupo Corona is a private, family-owned group specializing in manufacturing ceramics for house-building. Falabella will also increase its stake in Sodimac Colombia to 49% from 35%, based on the purchase of additional stock worth about $20 million.

HARDLINES CONFERENCE UPDATE

I’m please to announce that Ian Hardgrove, President and General Manager, 3M Canada, will offer a “Vendor’s perspective: Working with retailers to create brand dominance” at our Conference, Sept. 12-13. Mr. Hardgrove will explain why strong brands are important for vendors, retailers and customers. He believes that strong brands create a more competitive market that benefits everyone.—Michael

NOTED…

Hardlines will not be published for the next 3 weeks, Aug. 8, 15, or 22nd. We’ll be busy at the World Headquarters, however, getting ready for the Hardlines Conference and Awards Gala, which takes place Sept. 12-13. Since we're publishing this special issue of Hardlines, Bev says we'll extend the Early Bird Special until Aug. 2nd – sign up now because she won't let me do this again! Click here or contact Isabel Bisong, isabel@hardlines.ca — Michael

****HARDLINES MARKETPLACE**** Don't miss the products and services on the Hardlines web Marketplace: https://hardlines.ca/html/marketplace.html And check out Hardlines Classifieds on the web: https://hardlines.ca/html/classifieds_new.asp

HELP WANTED DEVELOPMENT MANAGER - MANITOBA & SASKATECHEWAN The Company RONA is the leading distributor and retailer of hardware, home improvement, and gardening products in Canada. The Objective Reporting to the Director, Traditional Banners/Development - Western Canada, the successful incumbent will be an energetic professional with expertise in development and operations and /or have a thorough understanding of the home improvement industry. The key responsibility will be to oversee implementation of the organization’s strategic development plans for each existing banner while recruiting and building relationships with new dealers. Responsibilities • Implementation of RONA’s strategic development plan for each existing banner • Be responsible for the recruitment and integration of new dealers within your assigned region - Analyses the territory - Evaluates potential dealers - Presents the organization to prospective dealers - Qualifies dealers according to membership criteria - Ensures mentoring of new dealers for a period of 6 months after they join RONA • Other duties and responsibilities as assigned by the Director, Traditional Banners/Development - Western Canada Qualifications • A minimum of 5 – 10 years of experience in the hardware, building material and/or home improvement industry • Experience in recruiting new members • Excellent ability to build relationships with dealers • Ability to interpret financial statements and present budgets • Flexibility to changing priorities with short notice to meet business needs • Exceptional communicator with strong planning and organizational skills • You must be comfortable with travel as there will be some overnights • Motivated, self-starter able to work independently and as part of a team. • Computer literate with strong understanding of Microsoft Office software • Valid drivers license and safe driving record • Autonomous • College diploma an asset To apply for this position please send your resume to john.penner@rona.ca. Thank you for your interest; however, only candidates selected for an interview will be contacted. (08.02_09.05)

********************************************************************************** NATIONAL SALES MANAGER

Kempston is a leading Canadian supplier of Router Bits and Saw Blades. Responsibilities: • Represent Kempston in sales presentations to a large customer base in North America, travel required. • Establish US sales networks. Work with existing sales agents in Canada to manage and direct their sales activities. • Budget sales by customer and SKU annually and complete weekly customer activity/ progress reports. • Organize and attend trade shows.

Qualifications: • Minimum 2 years experience in tool/hardware. • US experience is necessary. • Demonstrated ability and drive to grow sales in the Power Tool Accessory market. • Excellent communication (written and oral) and presentation skills. • Computer-literate; Excel, Word, Outlook and PowerPoint. Email resumes to sales@kempston.ca. (07.25_08.29)

********************************************************************************** PRODUCT MANAGER McKenzie Seeds, Canada’s leading supplier of packaged seeds and related gardening products, is seeking a Product Manger to join our dynamic team in our head office, located in Brandon, Manitoba. The Product Manager will provide valuable oversight and expertise to ensure positive business results for specific product areas. This position will analyze market information and recommend initiatives to senior management for approval. Specific responsibilities include management of the development of new products that compliment our existing products, managing existing products for maximum profit and efficiency, analyzing market/product trends, costing, pricing, developing marketing material and display formats, maintain inventory control and participate in team decisions. The successful candidate will have marketing experience in a retail environment with knowledge of margins/shelf impact/creative design. The successful candidate will also have a Bachelor’s Degree in Business Administration or related discipline, or equivalent experience. Demonstrated experience with analysis of market/products is required as is strong communication and interpersonal skills. Excellent project management skills and the ability to work with tight turnaround times; the ability to make effective decisions with multiple priorities and strong negotiation skills are critical to this position. Strong computer-based skills with an understanding of current technological tools including Microsoft office are required. The successful candidate must have the ability to travel to serve local and national clients at their sites Experience with industry software is considered an asset, as is interest in horticulture. McKenzie Seeds offers a competitive salary and exceptional benefits package. If you are interested in contributing to the continued growth of a progressive national company, please forward your resume, including 3 references, in confidence to: Kathy Johnson, searchbrandon@mnp.ca by Friday, August 5, 2005 (07.18_08.02)

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SALES OPPORTUNITIES Exchange-A-Blade Ltd., is a leading Canadian distributor and manufacturer of power tools accessories with sales agents and independent distributors throughout North America. Exchange-A-Blade is looking for candidates in Ontario who have several years of sales experience in the hardware or building materials industry, who are customer relationship focused and who are well organized. Opportunities include a salary and commission based sales representative package or business investment opportunities for individuals interested in investing in their own distributorship. For further information, please see our web site at www.exchangeablade.com. Interested candidates should send a resume and covering letter to Andy Moncrieff, Regional Sales Manager, by fax to 519-679-4917 or by email to amoncrieff@exchangeablade.com (07.11_07.25)

********************************************************************************** SALES AGENT: MARITIMES AND NEWFOUNDLAND

Kempston Canada Limited, a leading Canadian supplier of Router Bits and Saw Blades is looking for an established sales agency to expand our market share in the Maritime Provinces including Newfoundland. Only agents with successful experience and contacts in the Power Tool and Accessories markets need apply. If your company has the above experience and the ability to pioneer a high quality, competitively priced product please e-mail resumes to: sales@kempston.ca (07.11_07.25) **********************************************************************************

SERVICES OFFERED

RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America's leading manufacturers, managing their lines for Canada's top hardware retailers, big boxes and mass merchandisers. Contact Dave Leslie at 905-702-9443, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com (01/05)

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MARKETPLACE

(08.01.05_08.31.06)

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********************************************************************************** SELL YOUR COMPANY - OR BUY ONE - WITH HARDLINES CLASSIFIEDS! DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE. ONLY $2.60 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS. TO PLACE YOUR AD, CALL ISABEL BISONG AT 416-489-3396 OR EMAIL: isabel@hardlines.ca

Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2005 by Michael McLarney. HARDLINES™ the electronic newsletter hardlines.ca Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: mike@hardlines.ca Beverly Allen, Director of Sales & Marketing: bev@hardlines.ca Isabel Bisong, Circulation Manager: isabel@hardlines.ca ______________________________________________ THE HARDLINES "FAIR PLAY" POLICY: Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week - but let us handle your internal routing from this end! ______________________________________________ Subscription: $241 (Canadian subscribers add $16.87 GST = $257.87 per year/ GST #13987 0398 RT). Secondary subscriptions at the same office are only $38 (Canadian subscribers add $2.66 GST = $40.66). Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to Hardlines/McLarneyCom.