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Michael McLarney, President & Editor mike@hardlines.ca Beverly Allen, Publisher bev@hardlines.ca John Caulfield, Contributing Editor Phone: 416-489-3396 |
August 25 , 2008, Vol. xiv, #31 |
In This Issue | |||||||||||||||||||||||||||
“Computers are useless. They can only give you answers.” —Pablo Picasso |
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Orgill market features focus on Canada | |||||||||||||||||||||||||||
CHICAGO — U.S. and Canadian retailers looking for new sources of hardlines supply were in Chicago last week for the Orgill fall market. Already a fixture in more than 60 countries worldwide, the giant hardlines wholesaler has made clear its intentions to enter Canada, and many Canuck hardware and building supply dealers wanted to see for themselves what thousands of U.S. dealers know already.![]() ![]() Top. |
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Retail giants beat analysts’ quarterly expectations | |||||||||||||||||||||||||||
ATLANTA & MOORESVILLE, NC — Home Depot and Lowe’s each reported declines in profit for their most recent quarters. Yet, each company’s financial performance exceeded what analysts had projected. However, the companies themselves expressed caution about any sustained recoveries in their businesses until at least next year.For the eighth consecutive quarter, Home Depot recorded a decline in its profit, which for the three months ended August 3 fell 24.3% to $1.2 billion, on revenue of $20.99 billion that was off 5.4%. Home Depot’s same-store sales for the quarter were off 7.9%. One ray of light could be found in the fact that its earnings per share, while down 12.3% to 71 cents, beat the 51-cents-per-share estimate analysts were anticipating. Home Depot’s financial performance was also skewed because the same quarter a year ago had one more reporting week, which meant that its second quarter was negatively impacted by about $160 million.
On nearly every store productivity measure, however, Home Depot was off last quarter: its customer transactions were down 4.2%; its average sales per customer were off 1.2%, and its weekly sales per store fell 8.4%. Through the first half of its fiscal year, revenue declined 4.5%, to $38.9 billion, and its net income plummeted 40.8% to $1.56 billion.
Like Home Depot, Lowe’s Cos. — the industry’s second-largest home-improvement retailer — got a boost from the government’s distribution of federal tax rebates that gave consumers some temporary spending power. Those rebates, along with strong sales of seasonal products, propelled Lowe’s revenue to $14.51 billion for the three months ended August 1, a 2.4% increase over the same quarter a year ago. This was the first time in three quarters that Lowe’s sales have grown over the same quarter the previous year.
More significant was Lowe’s net income during the quarter, which fell by 7.9% to $938 million. That decline, on an earnings per share basis, was less than what analysts — and, apparently, some company officials — had expected. Lowe’s CEO, Robert Niblock, pointed specifically to the retailer’s cost control as a factor in its profit performance, even though its selling and general administrative expenses, at 20.78% of revenue during the quarter, were slightly higher than the same period a year ago.
Through the first six months of its fiscal year, Lowe’s profit was down 12.1%, to $1.55 billion, on revenue of $26.52 billion, which was marginally better than the first half of 2007. Larry Stone, the retailer’s COO, told analysts during a teleconference that his company had seen “stability” in its sale of maintenance and repair products, which could reflect market conditions where more people are fixing up their homes rather than moving.
During its latest quarter, Lowe’s opened 23 stores, bringing its total as of August 1 to 1,577 units in North America. This year, Lowe’s expects to open a total of 120 stores (down from earlier projections of 140), but projects that its sales for stores opened at least a year would be down between 6 and 7%. (Lowe’s same store sales for the latest quarter were off 5.3%.)
Niblock told analysts that his company remains “cautious” about the future, particularly in light of the fact that Lowe’s sales of bigger-ticket projects continue to lag, in line with the nagging housing downturn.
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BMR consortium buys Potvin & Bouchard | |||||||||||||||||||||||||||
JONQUIERE, QC — A group of dealers within Le Groupe BMR has purchased Centres de renovation Potvin & Bouchard, a major independent in Quebec’s Saguenay-Lac St-Jean region. The five-outlet chain, with estimated sales in excess of $50 million (according to the Amazing Hardlines Who’s Who Directory—Editor) is a former member of Independent Lumber Dealers Co-operative. The deal is similar to one several years ago involving the acquisition of Matco Ravary, a Montreal area chain. Both chains retain their own banners, while existing within the BMR umbrella.BMR is a privately owned distributor with its own buying group of more than 170 ![]() |
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RONA’s 2Q results up on performance of acquisitions | |||||||||||||||||||||||||||
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Canadian presence grows at NRHA Convention | |||||||||||||||||||||||||||
MONTEREY, CA — Independents from both sides of the border gathered here recently to share ideas and best practices at the annual convention of the North American Hardware Association. The event, which featured a series of seminars and workshops, also had a full social program for the many dealers who brought their families with them.While dealers came from all over the country, a small contingent of Canadians was also present. That group was represented mainly by Home Hardware dealers, as Home has a group membership with NRHA for all its members. But other independents, such as Preston Hardware from Ottawa, were there, as well, reflecting the growing presence of NRHA in this country (NRHA is represented in Canada by Hardlines—Editor). The Convention also played host to the annual Young Retailer of the Year Awards dinner. The awards (sponsored by the AHMA, Cooper Hand Tools, The Scotts Company and 3M), recognized seven young innovators for their commitment to independent retailing. Attendees had an opportunity to learn more about each of the honorees’ business operations and hear from each individual during the presentation. One winner was a Canadian: Maurice Chevalier, owner of Morinville Home Hardware in Morinville, AB. The Convention was also the farewell for John Hammond, NRHA’s managing director, who is retiring from the industry. | |||||||||||||||||||||||||||
Shanghai hardware show offers gateway to Asia | |||||||||||||||||||||||||||
COLOGNE, Germany – Whether it’s Olympics or hardware, China has become the world focus of attention. That’s why Koelnmesse, the giant trade show company based here, which owns and operates Practical World – The International Hardware Fair, has partnered with a Chinese show. The combined event, backed by Western expertise, the China International Hardware Show Powered by Practical World, will take place September 17-19 in Shanghai. Featuring more than 100,000 square meters of gross exhibition space, this will be the biggest CIHS to date.As China’s largest hardware trade show, CIHS has positioned itself as a gateway to the Asian market. Some 2,000 international and Chinese exhibitors are expected to showcase their products in four sections: Tools; Security Systems, Locks and Fittings; Home Improvement/DIY products; and Gardening products within nine halls of the Shanghai New International Expo Center. Spain, Italy, and Germany are among the Western countries represented in group stands, along with Taiwan. The event will include a comprehensive program of seminars for visitors and exhibitors featuring a series of industry updates and technology. Some of the topics include: “How buyers choose suppliers”, “How to deal with unfair legal situations in export trade", “Kitchen and bathroom products and accessories”, “Evolution of China’s power tools market”, and “India's hardware market”. For more information, click here. | |||||||||||||||||||||||||||
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Yeow! Only six days left to get the Early Bird Special for the 13 th Annual Hardlines Conference. Book now and save more than $100 off the regular price. —Beverl |
Speakers - Registration
Questions contact Brady at 416-489-3396 |
COMPANIES IN THE NEWS |
BURNABY, BC — Taiga, the lumber products wholesaler, had net earnings for the first quarter ended June 30 of $4.2 million, compared with $3.9 million in the same period in 2007. Sales slipped 2% to $284.4 million, from $289.7 million in 2007. The drop was attributed to the continued weakness in lumber and panel prices over the comparative period.GATINEAU, QC — A Wal-Mart has finally been unionized. Eight staff in the store’s auto shop here have successfully ratified a contract for collective bargaining with the giant retailer. The last time Wal-Mart workers were able to get a collective agreement was in 2005 in Jonquiere, QC, but Wal-Mart closed down the store before the contract could be imposed, calling the outlet “unprofitable”. LAVAL, QC — Hart Stores Inc., the mid-sized department store chain, has completed the purchase of the assets of SAAN Stores Ltd., consisting of the leases and equipment relating to eight SAAN retail stores, of which seven are in Quebec and one in Ontario. The eight locations are scheduled to open this fall, and bring the total number of Hart stores to 89. HARTLAND, MI — Menards, the third-largest home improvement dealer in the U.S., will expand into the southeastern sector of Michigan. The Eau Claire, WI-based retailer, which already operates 20 stores in Michigan, reportedly has purchased 17 acres in Hartland Township, where it plans to build a 162,000-square-foot store, according to the Ann Arbor News and Livingston (Mich.) Daily. CHICAGO — True Value Company reported revenue of $571.3 million for the quarter ending June 28, 2008, a decrease of 3.9% or $23.1 million from $594.4 million for the same period a year ago. Same-store sales to core hardware store outlets were down 3.7% in the quarter. Revenue from new stores exceeded lost revenue from terminated stores by $2.4 million in the quarter. The co-operative posted a quarterly net margin of $18.5 million, a decrease of 31.5% from last year. For the six-month period, revenue fell 4.3% to $1.04 billion. FEDERAL WAY, WA — Some 1,500 jobs are being cut at the headquarters here of Weyerhaeuser, the giant timber company. The move reflects a focus on “core” businesses and a 2Q loss of $96 million. |
PEOPLE ON THE MOVE |
At Hudson’s Bay Co., retail veteran Mark Foote has been appointed president and CEO of Zellers. He’s best known for his extensive career at Canadian Tire Corp., where he worked for more than 20 years, including five years as president of Canadian Tire Retail … Bonnie Brooks has been named president and CEO of the Bay, the country’s oldest department store. Brooks has more than 25 years of retail experience, working at companies such as Holt Renfrew, Lane Crawford, Harvey Nichols, and stores in Asia. She will start in early September.Pamela Forbes Lieberman has joined the Advisory Board of WHI Partners, a private equity firm. Lieberman’s background includes executive stints at ShopTalk, a voice application software company; Martin-Brower, one of the largest distributors in the McDonalds system; and Fel-Pro, an automotive parts supplier. But she is best known for in this industry as CEO of True Value (then known as TruServ) from 2001-2004. Lieberman is currently vice-chair of the board at Winning Workplaces. |
ECONOMIC INDICATORS |
Consumer prices rose 3.4% in July compared with July 2007. Higher gasoline prices continued to exert the strongest upward pressure on consumer prices, due mainly to higher gasoline prices. (Stats Canada)Wholesale sales rose 2.0% to $45.2 billion in June, the fifth increase in six months. After removing the effect of price changes, sales in constant dollars increased 1.0% during the month, largely a result of higher demand for automotive products. Sales excluding the automotive sector rose 0.4%. (Stats Canada) |
OVERHEARD |
“Men think ‘I love you’ is like duct tape. It’ll fix anything.” — Comedian Buzz Sutherland, speaking at the NRHA’s annual convention, held recently in Monterey, CA. |
Resumé |
Highly effective relationship management skills with a track record of developing and executing programs effectively. Strong strategic thinking and management background. Solid propensity for team building, coaching, mentoring and developing others. A competitive manager with a proven sales, marketing, merchandising and, leadership record. |
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