August 23, 1999 - Volume v, #33
Michael McLarney, Editor & Publisher
Ph: 416-489-3396 Fx: 416-489-6154

RÉNO-DÉPOT PREPARES TO ENTER ONTARIO

The guesswork has come out of Réno-Dépôt's plans for challenging Home Depot in Québec. With the hiring of two former Home Depot people, Réno-Dépôt has chosen to take its battle to the marketplace.

Réno-Dépôt had been challenged by Home Depot's recent decision to flout the non-compete clause that prevents the two companies from entering each other's markets. But the hiring of two ex-Home Depot executives, Dennis Kennedy as regional vice-president of operations for Ontario and James Jones as general merchandising manager for Ontario, confirms Réno-Dépôt intention to enter that province.

Réno-Dépôt president and CEO Yves Archambault would not confirm or deny the expansion move, but said, "The writing is on the wall." He would also not comment on whether Réno-Dépôt will continue its challenge of Home Depot in the courts.

Further details will be forthcoming as plans for Ontario expansion become fine-tuned. This will include choosing a name for the stores, as the Réno-Dépôt name cannot be used outside Québec. This is part of an agreement between Réno-Dépôt and Home Depot that is not part of the disputed non-compete clause.

Home Depot in the U.S. has reported a 45% rise in second-quarter net income of US$679 million, compared with US$467 million for the same period last year. Revenue rose 28% to US$10.4 billion from $8.1 billion, while the average sale per transaction increased 7%.

Same store sales were up 11% year to date, but Canada's stores were slightly higher than that, says Home Depot Canada's vice-president, merchandising, Jack Hayes. He adds that sales transactions per customer also increased faster than the company average.

Home Depot has recently launched its Villager Hardware test store in New Jersey. However, Canada will have to wait until at least 2001 before the concept comes here, says Hayes.

Sales at Sodisco-Howden Group climbed 13% to $205.4 million, up $23.1 million from $182.3 million in the same period of 1998. Net earnings for the first six months jumped 193% to $3.3 million, a $2.2 million increase over the same period last year. In addition, the company's working capital reached $16.6 million, compared with $6.2 million last year.

During the second quarter ended June 30, 1999, sales reached $130.8 million, up 18% from $111.2 million in the same period last year. The growth was attributed to improved results from its retail customers and the addition of new customers, both inside and outside the bannered network.

* * * * * * * *

Sales by RONA inc. increased during the second quarter ended June 30, reaching $303.7 million, up 17.7% from $258 million a year earlier. Net earnings for the second quarter were $5.8 million, up 12.5% from $5.1 million during the same period in 1998.

RONA has begun construction of its 12th L'entrepôt big box, this one in Brossard. The 145,000-sq.ft. store will open early in 2000 with a staff of 250. RONA will also open a Rénovateur Régional in Granby in September and one in St-Hyacinthe in November.

* * * * * * * *

T. Eaton Co. has filed for protection under federal bankruptcy laws. The move gives the 130-year-old company 30 days to provide a plan to its creditors. During this time it intends to pursue discussions with potential buyers of either its assets or shares. Eaton's expects to start the big liquidation sale early this week.

* * * * * * * *

Weyerhaeuser's planned acquisition of MacMillan Bloedel moved further toward closing last weekend when the U.S. Federal Trade Commission allowed the mandatory 30-day waiting period following pre-merger notification to expire without taking further action. This effectively ends antitrust review by the FTC. The transaction is still subject to other regulatory approvals, a favourable vote by MacMillan Bloedel shareholders, court approval in Canada, and other customary closing conditions.

* * * * * * * *

Nu-Gro's sales for the third quarter ended June 30 grew from $39.13 million a year earlier to $48.51 million. Net earnings grew from $3.28 million to $4.51 million. For the nine month period, sales were $106.58 million, up 50% over the same period in 1998. Acquisitions accounted for 29% of the increase.

* * * * * * * *

PMMI International has launched a new division, PMMI Industrial Ltd., to sell into the industrial hardware market. PMMI has a new address: 1145 Bellamy Rd. N., Unit 9, Scarborough, Ont. M1H 1H5; phone: 416-289-0588; fax: 416-289-0396.

* * * * * * * *

Sears in the U.S. will change its Orchard hardware stores back to Sears Hardware. Orchard Hardware & Garden was bought by Sears in 1996 and the name was applied to Sears Hardware stores. However, the Orchard name failed to attract women shoppers, while the Sears name had better recognition among traditional customers. The change will affect 250 hardware stores across the country.

* * * * * * * *

EXPO Design Center, a division of Home Depot in the U.S., will expand into Boston, San Francisco, New Jersey and Detroit with a total of 11 new stores. EXPO currently has 12 stores with plans to build three more this fiscal year. The 11 stores planned for 2000 will bring the total to 26. Home Depot plans to operate 200 of these large interior-design showrooms in North America by 2005. However, no schedule has been determined for any stores in Canada.

* * * * * * * *

The Stanley Works received the Vendor of the Year Award at the National Hardware Show in Chicago last week. The award recognizes the one supplier that demonstrated the greatest overall commitment to serving home center and building material dealers in the past year. It is sponsored by National Home Center News.

CANADIAN STOCK WATCH

COMPANY	52-WEEK HIGH	52-WEEK LOW	CLOSE (FRI.)
Canadian Tire	45.00	29.00	38.35
Canfor	10.75	4.25	11.90
Goodfellow	10.25	6.00	10.95
Hudsons Bay	35.10	14.00	22.30
MacMillan Blo.	20.40	11.50	25.65
Sears Canada	32.00	15.25	32.25
Taiga Forest	13.30	8.65	14.00
West Fraser	39.50	19.05	37.75

"Warmed up cabbage wears out the poor master's life."
-Juvenal (60-130 A.D.)

PEOPLE ON THE MOVE

At LePage, Doug Whaley has been promoted to director of Canadian sales for DIY, office products group and professional accounts. He was formerly national accounts manager - Richard Marcoux has been named national acounts team leader for Québec. He was formerly key account manager for the region - Alan Moyer becomes national acounts team leader for Western Canada, from key account manager. Barry Boniface assumes the role of national acounts team leader for for the Maritimes and Ontario, also from key account manager. (905-459-1140)

Susanna Trebuss has been promoted to director of marketing for Masco Corp. She was formerly director of retail sales. She will still be responsible for all retail accounts in Canada. (313-792-4401)

Gary Minaker has joined Task Tools and Abrasives as key account manager. (519-751-1077)

John Frizzell has joined Northern Marketing and Sales Inc. in a senior sales position with key account responsibility. He moves over from Brass Craft Canada, where he was vice-president of sales. (519-680-0385)

Philip Orsino, president and CEO of Premdor Inc., has been diagnosed with a form of leukemia and is currently undergoing treatment in Toronto. He will continue to run the company. (905-670-6500)

National housing levels dropped 4.5% in July, to 145,000 units seasonally adjusted from 151,800 in June, says CMHC. Urban single starts were up 2.1% to 76,100 units, while urban multiples decreased 15.6% to 46,500 units. Ontario was down 10.8% to 60,600 units. Starts in Québec were up 2.9%. British Columbia was up from 11,400 units to 11,900 units. In Vancouver, starts were up to 7,900 from 6,400 the previous month. Prairie housing starts remained unchanged at 26,300 units. A decrease in Alberta was offset by strong gains in Saskatchewan and Manitoba. Starts in Atlantic Canada dropped to 6,100 units from 6,800 in June. The drop was due to a decline in Nova Scotia and New Brunswick; Prince Edward Island was up and Newfoundland remained stable.

Building permits increased 4.9% in June from the previous month, according to Stats Canada. This is the first year since 1991 that building permits have reached or exceeded $3 billion in more than one month. Housing intentions rose 1.4% in June, following a 10.5% jump in May. Single-family units rose 6.8% while permits for multi-family dwellings fell 11.2%.

-"In our research, we asked customers where they liked to shop and they said Sears Hardware, and that they preferred it not only to Orchard, but also to the competition. They told us they wanted Sears Hardware back."- Chuck Merydith, a spokesperson at Sears headquarters in the U.S., on the company's decision to eliminate the Orchard Supply name.

* * * * * * *

HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: hardline@terraport.net © 1999 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST=$212.75) per year (GST #13987 0398 RT). Please make cheque payable to McLarneyCom.

August 23, 1999 - Volume v, #33
Michael McLarney, Editor & Publisher
Ph: 416-489-3396 Fx: 416-489-6154

RÉNO-DÉPOT PREPARES TO ENTER ONTARIO

The guesswork has come out of Réno-Dépôt's plans for challenging Home Depot in Québec. With the hiring of two former Home Depot people, Réno-Dépôt has chosen to take its battle to the marketplace.

Réno-Dépôt had been challenged by Home Depot's recent decision to flout the non-compete clause that prevents the two companies from entering each other's markets. But the hiring of two ex-Home Depot executives, Dennis Kennedy as regional vice-president of operations for Ontario and James Jones as general merchandising manager for Ontario, confirms Réno-Dépôt intention to enter that province.

Réno-Dépôt president and CEO Yves Archambault would not confirm or deny the expansion move, but said, "The writing is on the wall." He would also not comment on whether Réno-Dépôt will continue its challenge of Home Depot in the courts.

Further details will be forthcoming as plans for Ontario expansion become fine-tuned. This will include choosing a name for the stores, as the Réno-Dépôt name cannot be used outside Québec. This is part of an agreement between Réno-Dépôt and Home Depot that is not part of the disputed non-compete clause.

Home Depot in the U.S. has reported a 45% rise in second-quarter net income of US$679 million, compared with US$467 million for the same period last year. Revenue rose 28% to US$10.4 billion from $8.1 billion, while the average sale per transaction increased 7%.

Same store sales were up 11% year to date, but Canada's stores were slightly higher than that, says Home Depot Canada's vice-president, merchandising, Jack Hayes. He adds that sales transactions per customer also increased faster than the company average.

Home Depot has recently launched its Villager Hardware test store in New Jersey. However, Canada will have to wait until at least 2001 before the concept comes here, says Hayes.

Sales at Sodisco-Howden Group climbed 13% to $205.4 million, up $23.1 million from $182.3 million in the same period of 1998. Net earnings for the first six months jumped 193% to $3.3 million, a $2.2 million increase over the same period last year. In addition, the company's working capital reached $16.6 million, compared with $6.2 million last year.

During the second quarter ended June 30, 1999, sales reached $130.8 million, up 18% from $111.2 million in the same period last year. The growth was attributed to improved results from its retail customers and the addition of new customers, both inside and outside the bannered network.

* * * * * * * *

Sales by RONA inc. increased during the second quarter ended June 30, reaching $303.7 million, up 17.7% from $258 million a year earlier. Net earnings for the second quarter were $5.8 million, up 12.5% from $5.1 million during the same period in 1998.

RONA has begun construction of its 12th L'entrepôt big box, this one in Brossard. The 145,000-sq.ft. store will open early in 2000 with a staff of 250. RONA will also open a Rénovateur Régional in Granby in September and one in St-Hyacinthe in November.

* * * * * * * *

T. Eaton Co. has filed for protection under federal bankruptcy laws. The move gives the 130-year-old company 30 days to provide a plan to its creditors. During this time it intends to pursue discussions with potential buyers of either its assets or shares. Eaton's expects to start the big liquidation sale early this week.

* * * * * * * *

Weyerhaeuser's planned acquisition of MacMillan Bloedel moved further toward closing last weekend when the U.S. Federal Trade Commission allowed the mandatory 30-day waiting period following pre-merger notification to expire without taking further action. This effectively ends antitrust review by the FTC. The transaction is still subject to other regulatory approvals, a favourable vote by MacMillan Bloedel shareholders, court approval in Canada, and other customary closing conditions.

* * * * * * * *

Nu-Gro's sales for the third quarter ended June 30 grew from $39.13 million a year earlier to $48.51 million. Net earnings grew from $3.28 million to $4.51 million. For the nine month period, sales were $106.58 million, up 50% over the same period in 1998. Acquisitions accounted for 29% of the increase.

* * * * * * * *

PMMI International has launched a new division, PMMI Industrial Ltd., to sell into the industrial hardware market. PMMI has a new address: 1145 Bellamy Rd. N., Unit 9, Scarborough, Ont. M1H 1H5; phone: 416-289-0588; fax: 416-289-0396.

* * * * * * * *

Sears in the U.S. will change its Orchard hardware stores back to Sears Hardware. Orchard Hardware & Garden was bought by Sears in 1996 and the name was applied to Sears Hardware stores. However, the Orchard name failed to attract women shoppers, while the Sears name had better recognition among traditional customers. The change will affect 250 hardware stores across the country.

* * * * * * * *

EXPO Design Center, a division of Home Depot in the U.S., will expand into Boston, San Francisco, New Jersey and Detroit with a total of 11 new stores. EXPO currently has 12 stores with plans to build three more this fiscal year. The 11 stores planned for 2000 will bring the total to 26. Home Depot plans to operate 200 of these large interior-design showrooms in North America by 2005. However, no schedule has been determined for any stores in Canada.

* * * * * * * *

The Stanley Works received the Vendor of the Year Award at the National Hardware Show in Chicago last week. The award recognizes the one supplier that demonstrated the greatest overall commitment to serving home center and building material dealers in the past year. It is sponsored by National Home Center News.

CANADIAN STOCK WATCH

COMPANY	52-WEEK HIGH	52-WEEK LOW	CLOSE (FRI.)
Canadian Tire	45.00	29.00	38.35
Canfor	10.75	4.25	11.90
Goodfellow	10.25	6.00	10.95
Hudsons Bay	35.10	14.00	22.30
MacMillan Blo.	20.40	11.50	25.65
Sears Canada	32.00	15.25	32.25
Taiga Forest	13.30	8.65	14.00
West Fraser	39.50	19.05	37.75

"Warmed up cabbage wears out the poor master's life."
-Juvenal (60-130 A.D.)

PEOPLE ON THE MOVE

At LePage, Doug Whaley has been promoted to director of Canadian sales for DIY, office products group and professional accounts. He was formerly national accounts manager - Richard Marcoux has been named national acounts team leader for Québec. He was formerly key account manager for the region - Alan Moyer becomes national acounts team leader for Western Canada, from key account manager. Barry Boniface assumes the role of national acounts team leader for for the Maritimes and Ontario, also from key account manager. (905-459-1140)

Susanna Trebuss has been promoted to director of marketing for Masco Corp. She was formerly director of retail sales. She will still be responsible for all retail accounts in Canada. (313-792-4401)

Gary Minaker has joined Task Tools and Abrasives as key account manager. (519-751-1077)

John Frizzell has joined Northern Marketing and Sales Inc. in a senior sales position with key account responsibility. He moves over from Brass Craft Canada, where he was vice-president of sales. (519-680-0385)

Philip Orsino, president and CEO of Premdor Inc., has been diagnosed with a form of leukemia and is currently undergoing treatment in Toronto. He will continue to run the company. (905-670-6500)

National housing levels dropped 4.5% in July, to 145,000 units seasonally adjusted from 151,800 in June, says CMHC. Urban single starts were up 2.1% to 76,100 units, while urban multiples decreased 15.6% to 46,500 units. Ontario was down 10.8% to 60,600 units. Starts in Québec were up 2.9%. British Columbia was up from 11,400 units to 11,900 units. In Vancouver, starts were up to 7,900 from 6,400 the previous month. Prairie housing starts remained unchanged at 26,300 units. A decrease in Alberta was offset by strong gains in Saskatchewan and Manitoba. Starts in Atlantic Canada dropped to 6,100 units from 6,800 in June. The drop was due to a decline in Nova Scotia and New Brunswick; Prince Edward Island was up and Newfoundland remained stable.

Building permits increased 4.9% in June from the previous month, according to Stats Canada. This is the first year since 1991 that building permits have reached or exceeded $3 billion in more than one month. Housing intentions rose 1.4% in June, following a 10.5% jump in May. Single-family units rose 6.8% while permits for multi-family dwellings fell 11.2%.

-"In our research, we asked customers where they liked to shop and they said Sears Hardware, and that they preferred it not only to Orchard, but also to the competition. They told us they wanted Sears Hardware back."- Chuck Merydith, a spokesperson at Sears headquarters in the U.S., on the company's decision to eliminate the Orchard Supply name.

* * * * * * *

HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: hardline@terraport.net © 1999 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST=$212.75) per year (GST #13987 0398 RT). Please make cheque payable to McLarneyCom.