| HOME DEPOT WORKERS IN DETROIT REJECT BID TO UNIONIZE |
| DETROIT, Mich. — Workers at Home Depot's warehouse in Harper Woods, Mich., a suburb of Detroit, last weekend rejected a bid to join and be represented by the United Food and Commercial Workers union. Of the 173 eligible voters, 115 voted against joining the union, with 42 in favor, based on a preliminary tally that needed to be confirmed by the National Labor Relations Board. To win, the union needed a majority of voters to have cast in its favor.Had the workers voted that way, their store would have been the first Home Depot to be unionized. The UFCW is also trying to unionize workers at other Home Depot stores in Michigan, including Flint, which has gained a considerable measure of notoriety as the subject of two of director Michael Moore's films. UFCW Local 876, based in Madison Heights, Mich., represents about 22,000 workers in retail operations such as Rite Aid and Kroger. But the union's efforts to unionize Wal-Mart and other national retailers have been repeatedly rebuffed.
Home Depot said in a prepared statement that the vote rejecting unionization "not only represents a vote of confidence from our associates, but also confirms The Home Depot's reputation as an employer of choice." One of the main points of contention that led to the vote was the fact that workers said they were paying too much for their health insurance.
The same union has had better luck in Canada, as it attempts to organize the world's largest retailer. The Quebec Labour Relations Board has accredited the UFCW to represent workers at a Wal-Mart store in Saguenay, Que. Wal-Mart says it's not sure if it will appeal the ruling. The store, in this city about 150 miles north of Quebec City, has some 180 employees. Workers at another Wal-Mart store, in Brossard, Que., have also asked the Labour Relations Board for permission to join the union. |
| SODISCO-HOWDEN SALES DIP IN 2Q |
| MONTREAL — Sodisco-Howden's second-quarter revenues totalled $137.7 million, down 4.3% from the same quarter in 2003, reflecting bad weather and a drop in business in Ontario. Net earnings fell to $2.5 million from $3.1 million.Sales eased "moderately" in the second quarter, says Sodisco-Howden CFO James Shannon. While the company made no reference to the weather in its financials, the cold, wet conditions that prevailed through much of the late spring have had an impact on the home improvement industry in many regions of the country. In addition, a change in billing practices by a major vendor, which was not named, has resulted in billings going directly to Sodisco-Howden's customers. While Sodisco-Howden's volumes aren't affected, and it still gathers the rebate from those sales, the change has affected the company's sales reporting.
Add to that the effects of a drop in business from TIM-BR Mart Ontario, a major buying group customer for Sodisco-Howden.
TIM-BR Mart Ontario is a partner in Quincaillerie Matreco Hardware, along with Groupe BMR in Quebec and the AWARD buying group in Atlantic Canada. However, despite the drop in Ontario, where trucks began delivering early this year, shipments to Atlantic customers are reported to be holding their own.
Sodisco-Howden has historically restricted its LBM supply to Quebec. But Groupe BMR's foray into hardlines distribution has prompted Sodisco-Howden to counter by offering building materials distribution to customers in the Maritimes.
The move, says Shannon, is paying off.
Lumber and building materials are shipped to Atlantic customers from Sodisco-Howden's Rivière-du-loupe LBM distribution center. The service was introduced at the end of March 2004, and has proven especially popular with contractor-oriented dealers. |
| BMHC REPORTS HUGE SALES AND EARNINGS JUMP |
| SAN FRANCISCO — Building Material Holding Corp. the 14th-largest home improvement retailer in the U.S., continues to benefit from the country's strong housing market and soaring lumber prices.BMHC reported a 60.4% increase in sales, to $960.2 million, for the six months ended June 30, and its earnings during this period jumped 168.9% to $16.8 million. The pro dealer gets about one-third of its revenue from a division, BMC Construction, that provides framing and foundation labor to homebuilders. That division's sales through six months rose 125.1% to $325.1 million, and its operating income increased 140% to $20.1 million, mostly in the strength of acquisitions.
The corporation's BMC West division operates 60 lumberyards whose six-month sales increased 39.9% to $636.3 million. Their operating income grew 91% to $40.6 million. |
| HOME DEPOT CANADA MAPS OUT 2004 OPENINGS |
| TORONTO — Home Depot Canada has given Hardlines the list of openings still to come in 2004: Trois Rivières, Que. — August 25; Kitchener (West), Ont. — September 2; Vancouver (Park Royal), B.C. — September 30; and Charlottetown, P.E.I. — October/November.The following stores are slated to open during the company's fourth quarter, which ends January 31, 2005: Medicine Hat, Alta.; North Bay, Ont.; Cornwall, Ont.; Barrhaven, Ont.; Toronto (Gerrard Square); St-Constant, Que.; and Calgary (North Hills), Alta. The final opening of the fiscal year will be Sydney, N.S., marking the first Home Depot store on Cape Breton Island.
The Park Royal, Calgary North Hills, and Gerrard Square store in Toronto will all be "urban neighborhood" stores, slightly smaller than a typical Home Depot store, with assortments tailored to a more transient, upscale, apartment dwelling customer.
This will bring the total of Home Depot stores in Canada to 115. |
| HOUSING STARTS WILL REACH 17-YEAR HIGH IN 2004 |
| OTTAWA — Housing starts are expected to hit 225,700 units, up from 2003's robust pace of 218,426 starts, making 2004 the strongest year since 1987 for new home construction, according to Canada Mortgage and Housing Corp.'s third quarter Housing Outlook.Total housing starts in the second quarter were at 232,700 seasonally adjusted, up slightly from the first quarter. "In March of this year, the five-year mortgage rate was at the lowest level since April 1951. Although rates have risen, they remain very low and together with solid employment and income gains will propel housing starts to a 17-year high, " said Bob Dugan, chief economist at CMHC. "As mortgage rates continue to rise next year, demand for new homes will cool and starts will slow to 204,200 units."
MLS sales will increase to 457,000 units in 2004, up 5.1% from last year's pace. Moderate increases in mortgage rates in 2005, along with higher house prices, will cause existing home sales to edge lower to reach 433,100 units, while growth in the average price of existing homes will slow to 4.6% in 2005, compared with 9.2% this year.
Spending on renovations is expected to rise 9.1% in 2004 to reach $36.3 billion. this pace will continue in 2005, reaching $38.5 billion, 6.0% higher than 2004. |
| BOISE CASCADE FINALLY TO EXIT THE LUMBER BUSINESS |
| BOISE, Idaho — In a move that will complete its transformation to an office products supplier and dealer, Boise Cascade Corp. has agreed to sell its paper, forest products and timberland assents to a newly formed company run by Boise affiliates. The selling price is $3.7 billion and the deal should be completed by mid November.The acquiring company, Boise Cascade, LLC, will be privately held and headquartered in Boise, Idaho. Its CEO will be Tom Stephens, former president and CEO of MacMillan Bloedel Ltd. and former chairman, CEO and president of Manville Corp. The new company was formed by Madison Dearborn Partners LLC, a Chicago-based private equity investment firm, with financial backing from J.P. Morgan Chase and Lehman Brothers.
Included in the sale are the Boise Cascade Corp. headquarters building here, and substantially all of the assets of Boise Building Solutions, which produces plywood, lumber, particleboard, and engineered wood products for independent wholesalers and dealers, and through its own wholesale building materials distribution outlets. Boise manufactures wood products at 22 facilities in the United States, Canada, and Brazil. Boise's 27 building materials distribution facilities in the U.S. sell a wide range of building materials to retail lumber dealers, home centers specializing in the do-it-yourself market, and industrial customers. Boise Building Solutions' first half 2004 sales totaled $1.9 billion.
The new company will own Boise Paper Solutions, a manufacturer of office papers, value-added and recycled papers. This division operates five pulp and paper mills, two paper converting facilities, six paper distribution centers, and five corrugated container plants in the United States. Boise also owns or controls about 2.3 million acres of timberland in the United States, 35,000 acres of eucalyptus plantation land in Brazil, and a 16,000-acre cottonwood fiber farm near Wallula, Wash.
After this deal is consummated, Boise Office Solutions — what's left of Boise Cascade — will become known as OfficeMax Corp., the office products company that Boise acquired for $1.15 billion last year. |
| HARDLINES PARTNERS WITH ONLINE RECRUITER |
| Hardlines has partnered with canadianretail.com to offer the industry an easy and affordable way to place job openings on the Internet. To post a single job on canadianretail.com at the special price of $150.00 plus GST for 60 days, just click here to Register and Post a Job. Click here to read More about the program. |
| NOTED... |
| The second annual Charity Golf Tournament on behalf of the Daily Bread Food will be held on September 9 at Station Creek Golf Club, Gormley, Ont. Organizers invite support — and prizes. Last year, the event raised over $29,000 and this year's goal is $60,000. Corporate wear, product samples and cash donations are all welcome. For more info, contact: Tony Irwin, 416-318-4850; or kindly send prizes, tagged "DBFB Golf," to: Bryan Gilbart, c/o Envirogard Products, 446 Major Mackenzie Dr., Richmond Hill, Ont. L4C 4X9. |
| HARDLINES WHO'S WHO AVAILABLE IN AUGUST! |
| Order now to receive your copy of the 2004/2005 Hardlines Who's Who Directory. With 50% of the content changing every year, you don't want to miss this valuable knowledge. For more information, click here. Or call or email Nancy Wright, nancy@hardlines.ca, 416-489-3396, to reserve your copy! |
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| COMPANIES IN THE NEWS |
| VANCOUVER — West Fraser Timber has filed a prospectus to distribute an offering to finance the forestry giant's acquisition of Weldwood of Canada from International Paper Co. The cash deal is worth $1.26 billion and is expected to close during the fourth quarter, subject to certain closing adjustments. West Fraser expects to raise approximately $250 million from the offering, which is being co-led by Scotia Capital and TD Securities. The offering has not been registered for distribution in the U.S.BREWTON, Ala. — Marvin's Building Materials & Home Centers, the Leeds, Ala.-based pro dealer, plans to open its 22nd store here later this year in a former Kmart. The 35,000-sq.ft. unit will include a complete line of home improvement products, as well as an attached garden center and drive-through lumberyard. Marvin's, the 95th-largest home improvement retailer in the U.S., ended last year with about $101 million in sales. It currently employs 533 people at its 21 stores in Alabama and Mississippi.
ST-ANTONIN, Que. — Matériaux à Bas Prix ltée (Bargain Building Materials) has signed on a new authorized dealer, L'Entrepôt du Bricoleur, an independent in Val-d-Or, Que. The grand opening is this Wednesday, August 11.
MISSISSAUGA, Ont. — A new packaging company has been created as a division of Mumby and Associates. DPP Manufacturing Inc. grew out of Mumby's own product packaging facilities as a stand-alone packaging company. DPP is headed up by its president, Steve Bedford, formerly with Rona Ontario. The company specializes in co-packaging, bonus packs and quarter-pallet displays, all of which can be shipped directly to the retail client. (To contact Steve, call: 905-542-2722)
FORT WAYNE, Ind. — Following up on its previously announced support of Habitat for Humanity International as its cause of choice, Do it Best Corp. announced last week its first corporate-driven "home build," near its headquarters here in Fort Wayne. The dealer-owned distributor has contributed nearly $200,000 so far, in the form of donated product from displays at the company's buying markets.
BOCA RATON, Fla. — U.S. Plastic Lumber, a manufacturer of composite lumber and decking products, has filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The company also sought debtor-in-possession financing so that it could continue operating while it reorganizes its business. The company has retained a New York-based turnaround firm, Triax Capital Advisers, to direct its reorganization. By contrast, one of U.S. Plastic's primary competitors, Trex Co., has reported that its revenue for the six months ended June 30 rose 24.1% to $159.7 million. In June, Trex began selling its decking products in Home Depot stores in selected markets.
ISSAQUAH, Wash. — Costco Wholesale Corp. had July net sales of $3.72 billion, an increase of 12% from $3.32 billion in July 2003. For the first 48 weeks of its 2004 fiscal year ended August 1, Costco reported net sales of $43.51 billion, up 14% from $38.27 billion from the same period in the prior fiscal year.
BENTONVILLE, Ark. — Sales at Wal-Mart were up 10.9% in July, to $20.61 billion, from $18.59 billion a year earlier. Year-to-date sales were $135.07 billion, an increase of 12.1% over $120.52 billion in the prior year. Same-store sales were up 3.2%.
HOFFMAN ESTATES, Ill. — At Sears, Roebuck and Co., total store revenues were $1.84 billion for July, down 4.0% from the same month in 2003. same-store sales decreased 2.6% in July. The only segments to report any sales growth were consumer electronics, lawn, garden and fitness equipment; home fashions and household goods.
BENTONVILLE, Ark. — Wal-Mart is leaving pharmacies open round the clock in five of its stores in Arkansas and Texas, in an effort to increase its share of the drug dispensing market. The company has more than 3,000 retail pharmacies in the U.S. |
| PEOPLE ON THE MOVE |
| Marvin Ettinger has been appointed vice-president administration and development at Le Groupe BMR. Ettinger is a veteran of the industry since 1974, when he worked for the Castor bricoleur chain. Most recently, he served as vice-president, operations, at the Réno-Dépôt division of Rona Inc. He replaces Jean St-Maurice, who had been finance director for BMR. (450-463-2441)Maura Bella left the Canadian Retail Hardware Association last Friday, after 24 years there, to run the Real Estate Institute of Canada as executive vice-president. Bella worked for 24 years at the CRHA, moving last year into the role of show manager for the Canadian Hardware and Building Materials Show. The show was recently renamed the H2X, to reflect its re-positioning as a dual show with the Paint and Wallcoverings Association.
Tim Valters has been appointed president of Selkirk Canada Corp. He will be responsible for commercial and industrial products in the Canadian market. He was formerly vice-president and general manager of Selkirk Canada ... Bob Emmell has been appointed director of sales at Selkirk. He was most recently national sales manager ... John Vukanovich has been promoted to the role of director of marketing at Selkirk Canada. He previously held the position of national marketing manager. (888-735-5475) |
| U.S. MARKET INDICATORS |
| Construction spending in June fell by 0.3% from May, reports the Commerce Department. The value of buildings put in place was $985.2 billion seasonally adjusted in June, and follows a slight gain of 0.1% in May.Housing starts fell 8.5% in June in the face of rising interest rates. Building permits, a sign of builder confidence in future demand, fell to their lowest level since February, posting the biggest monthly decline in more than 10 years, says the Commerce Department. |
| CANADIAN MARKET INDICATORS |
| Employment didn't change much in July, up by only 9,000, following three consecutive monthly gains, says Statistics Canada. The unemployment rate edged down 0.1 percentage points in July to 7.2%, as fewer people entered the labor market in search of work. Employment over the past 11 months is up 2.1%. |
|
John Caulfield, Contributing Editor
vol. x, #32, August 9 , 2004
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