John Caulfield, Contributing Editor
vol. xi, #32, August 29, 2005

IN THIS ISSUE: • Home Depot’s new top merchant will speak at Conference • Industry sizzles in ’04 • Canadian Tire gets new concept in Vancouver • TSC strikes deal with co-op • CanWel’s results impacted by conversion • Ace, True Value report 2Q • Whirlpool and Maytag merge • Scotts to buy Rod McLennan * * * * * *

“How many men would be mute if they were forbidden to speak well of themselves and evil of others.” —Mme. de Fontaine (18th century French novelist)
ATLANTA – Home Depot is rearranging its corporate suite again after the sudden announcement that its chief merchant has resigned. John Costello, the dealer’s executive vice-president merchandising and marketing, has left the company to “pursue other business opportunities,” according to a statement issued by the company.Costello–slated to speak at the upcoming Hardlines Conference–has been replaced by Tom Taylor, 39, a 22-year company veteran who most recently was executive vice-president stores. And in an incredible show of support by Home Depot itself, Taylor has stepped in to fill Costello’s shoes at the Conference itself on Sept. 13.Among other changes in Atlanta, Carl Liebert, 40, who had been senior vice-president stores, will assume Taylor’s former job. He also oversees Home Depot’s retail operations in the U.S. and Mexico. He’s been with Home Depot for only two years. In what appear to be unrelated corporate personnel moves, Home Depot also promoted Joe DeAngelo, president of its Home Depot Supply division, to executive vp; and Marvin Ellison, its vp logistics, to senior vp. In addition, Bill Patterson, president of the recently formed Home Depot Asia division, is retiring at age 59. Asia’s vice-president operations, 40-year-old Chris Elias, will head up that division until Home Depot finds a permanent replacement for Patterson.
SPECIAL REPORT – The first half of the decade has been one of tremendous growth for the retail home improvement industry. Housing starts reached a 17-year high in 2004, while an ever-aging stock of existing housing, not to mention the sheer popularity of renovation and remodeling that is more style- and fashion-driven than ever before, has made this sector one of the fastest-growing in the country.According to the latest market study in our Hardlines Quarterly Report, 2004 was no exception.Last year, those sales totaled $34.85 billion, up almost 9% over 2003. This sector’s growth even exceeded the level experienced from 2002 to 2003, when the industry at retail grew by an unprecedented 8.8%. In terms of retail formats, where did the growth come from? The biggest growth continues to be in the big box format, which, through a combination of new store growth and same-store sales increases, managed to add $573 million in sales to the industry. But to focus solely on big boxes is to underestimate the growth that continues among building centres. Once considered the most perilous of all formats in the wake of big box expansion, building centres are proving to be tenacious, especially in smaller markets – and particularly among those dealers organized into LBM buying groups. For more info on this report, which appears in our sister publication, Hardlines Quarterly Report, .
VANCOUVER – Last week, Canadian Tire Corp. opened the doors to a new store here that will be the flagship for retail development in downtown areas. The 63,000-sq.ft. outlet, at Cambie St. and 7th Ave., puts Canadian Tire’s Concept 20/20 format into a distinctly urban-market environment. Complete with West Coast-inspired interior design, the latest trends in home décor and new and expanded product offerings, it’s part of Canadian Tire’s efforts to accelerate the replacement of existing stores within the 457-store chain with its 20/20 look.The store was developed specifically for the urban Vancouver market and boasts West Coast-inspired interior features, such as hardwood floors and shelving, an expanded home décor area, a roof top garden centre, and West-coast art throughout. With some 55,000 SKUs, the store features expanded product assortments in categories such as home décor, sports and leisure, footwear and apparel, cleaning products, storage and organization and ready-to-assemble furniture. The store also features a 13-bay Automotive Service Centre.“As part of our 2005-2009 Strategic Plan announced earlier this year, one of Canadian Tire Retail's top priorities is accelerating the replacement of traditional stores and building new, more modern stores to better serve our customers,” says Mark Foote, president, Canadian Tire Retail, who was on hand for the grand opening earlier this month.
LONDON, Ont. – TSC Stores L.P. and Waterloo-Oxford Co-operative Inc. have formed a unique relationship in Woodstock, Ont. to offer more assortment to Co-op members while cross-promoting the two companies. Effective September 1, 2005, the co-op will close its Woodstock outlet and relocate its business within an existing TSC location in town. The co-op’s agronomist, Dave Robertson, and feed specialist, Doug Gee, will set up shop in the store, with offices to serve the co-op members. But those members will now shop for their farm-focused consumer products from TSC. In turn, the Woodstock TSC will expand its bagged feed program.Under the new agreement, purchases made by Waterloo-Oxford Co-operative’s Woodstock members at any TSC location will pay patronage dividends to the members of the co-op.The TSC store will expand next year to better accommodate the new enterprise. “This is just the first phase of a very compelling mutual relationship in Woodstock,” said Roy Carter, president and CEO of TSC. “The gears are in motion to build a new 18,000 sq.ft. store across the street that will open in the spring of 2006. It will house an expanded Waterloo-Oxford Co-operative agronomy office, where members will have the full services of the co-op at their disposal.”
ATLANTA — Home Depot has awarded a multi-year contract to Miami-based Ryder Services, Inc., to manage the warehouses and equipment at Home Depot’s huge new distribution centers in Atlanta and Dallas, which together exceed 2 million sq.ft. Ryder, best known for its transportation and rental services, is expected to be fully integrated into those facilities’ management by September. The financial terms and the length of this agreement were not disclosed, but a joint statement said that these DCs have been opened to help accelerate Home Depot’s expansion in the U.S.
OAK BROOK, Ill. – Ace Hardware Corp. reported that wholesale hardlines sales reached US$913.9 million in the second quarter ended June 30, an increase of 4.9% over the second quarter 2004. Net earnings for the second quarter were US$33.5 million, compared to US$36.7 million in 2004. On a year-to-date basis, net earnings were US$48.1 million, compared with US$53.4 million in 2004. Ace enjoyed a 5.2% increase in sales through its 15 retail support centers, along with a surge in international sales of 12.4% for the quarter. Year-to-date, Ace’s wholesale sales have increased 3.2%, with total international sales increasing 7.4%.“Ace experienced solid sales results in the second quarter, thanks in part to the spring selling season, continued growth of the lawn and garden category in our stores, our Memorial Day Weekend Sale, and unseasonably hot weather in June throughout many areas of the country,” said Ray A. Griffith, Ace president and CEO, in a prepared release.Continued investments in retail locations and in technology initiatives caused a decrease in net income for the quarter of US$3.2 million. During the second quarter, 21 Ace stores opened across the country, adding about 300,000 sq.ft. of retail space to the Ace banner.
Chicago, Ill. – True Value Company experienced a 4.1% drop in revenue to US$551.6 million for the quarter ended July 2, down from US$575.3 million for the same period a year ago. Net margin for the quarter was US$19.4 million, up 15.0% or US$2.5 million from US$16.9 million a year ago. True Value also reported revenue of US$1.06 billion for the six months ended July 2, 2005, a decrease of 1.8%, or US$19.5 million, from the same period a year ago. Net margin for the six-month period was up 15.9% however, to US$22.1 million. Same-store sales during the period were essentially flat.
MOORESVILLE, N.C. — Lowe’s Cos. and Habitat for Humanity, which specializes in the construction of affordable housing, are offering Lowe’s customers a way to contribute to Habitat’s efforts through their purchases at Lowe’s stores. Last week, the companies introduced a Lowe’s Habitat Card, an “affinity” card that allows customers to select which local Habitat chapter to credit, and scan the card with each purchase at a Lowe’s store. Grants of $5,000 will be awarded to the eight Habitat affiliates with the greatest number of points. Through the Lowe's Habitat card, Lowe’s will award a total of $40,000 to affiliates in 2005.The card, which will be available through December 31, is being launched at Lowe’s 135 stores in Texas, Oklahoma and central Louisiana, where Habitat has 120 affiliates. In other Habitat news, its Canadian division received CD$514,000 from Home Depot and its vendors. The money was raised from an annual golf tournament conducted by the retailer and its suppliers. Habitat is fast approaching the construction of its 1,000th home in Canada.
MARYSVILLE, Ohio — Scotts Miracle-Gro, the largest supplier of lawn care products in North America, has signed a definitive agreement to acquire Rod McLellan Co., a San Mateo, Calif.-based supplier of soil and landscape products that are marketed under brands that include Supersoil, Whitney Farms and Black Magic. Scotts said in a prepared statement that it will pay about $20 million for the company, which has 100 employees and three soil manufacturing facilities in California and Oregon. The deal is expected to close by October 3.McLellan specializes in selling its product to independent garden centers, so its addition would supplement Scotts’ business in potting soils, lawn and garden soils and mulches, which it sells broadly through home centers, garden centers and mass merchants.Scotts has also just announced the promotion of Robert Bernstock to the position of president and COO, effective Oct. 1. Bernstock, 54, joined the company in 2003 as president of the North American business group.
At the Hardlines Conference Series, September 12-13: Our special rate at the Hilton Suites Hotel, Markham expires Aug. 31 Monday morning, September 12, hear the entire women's report from ACNielsen, excerpted in the Hardlines Quarterly Report.
VANCOUVER – CanWel Building Materials Income Fund enjoyed record second-quarter sales of $301 million, up from $176 million for the comparable period in 2004. Net earnings before costs associated with the conversion into an income trust were $5.1 million, compared with $3.9 million in 2004. Net earnings for the period were $2.3 million. However, EBITDA before the one-time costs related to the conversion was $9.9 million, or $8.7 million after the one-time costs, compared with $8.2 million for the comparable period last year. Despite the reorganization, sales during the quarter were strong, increasing by 68.7% over 2Q 2004. BEAUMONT, Texas — Redmond, Wash.-based Lanoga, Corp., the 10th-largest home improvement retailer in the U.S., is expanding into Texas for the first time through the acquisition of Parker Lumber, a pro dealer based here that operates 13 yards that generated US$32 million in revenue last year. Lanoga operates more than 300 locations from five divisions in the Western and Midwestern U.S., and its expansion strategy over the past several years has been to buy strong regional dealers — such as Dixieline Lumber in southern California and Home Lumber in Denver — and use them as springboards to expand in those markets. It is likely to follow that pattern with Parker Lumber.BENTON HARBOR, Mich. & NEWTON, Iowa – Whirlpool and Maytag have signed a definitive merger agreement in which Whirlpool will acquire all outstanding shares of Maytag in a cash and stock merger valued at US$21 per share. One half of the per-share consideration will be paid in cash and the balance in a fraction of a share of Whirlpool common stock. Prior to signing the Whirlpool merger agreement, Maytag had to pay a US$40 million termination fee to Triton Acquisition Holding and, thereafter, terminated the agreement it had previously made with Triton. In turn, Whirlpool has reimbursed the US$40 million to Maytag. The aggregate transaction value, including assumption of approximately US$977 million of debt, is about US$2.7 billion. The transaction is subject to customary regulatory approvals and Maytag shareholder approval. MISSISSAUGA, Ont. – Taymor Industries Ltd., a Canadian supplier of builders' and decorative hardware, has moved to a new Toronto-area distribution centre. The new centre is located in Mississauga at 6460 Kennedy Rd., Unit A, L5T 2X4, and features over 50,000 sq.ft. of warehouse space, as well as the offices for the national sales management and eastern sales teams. The new centre replaces an old facility in Downsview, Ont. Taymor’s head office will continue to support the new facility from its location on Annacis Island in Delta, near Vancouver B.C. OAKVILLE, Ont. – Imperial Manufacturing has moved into a new 102,000-sq.ft. facility here that is home to a new building products manufacturing operation designed to support Ontario builders and contractors. In addition, it’s also carrying Imperial galvanized products. BURNABY, B.C. – Taiga Forest Products Ltd. has received final approval from the Supreme Court of British Columbia for the amended arrangement under which Taiga intends to convert to an income fund-like structure using stapled units. Taiga expects the conversion to close on September 1, 2005.
The IRLY Building Centres, and its distribution arm, IRLY Distributors Ltd., have announced the appointment Mark Jarman as hardware buyer at the distribution centre. Jarman worked most recently at Army & Navy and his career includes positions at Canadian Tire, Shoestrings and Sport Mart. (604-596-1551)Mike Crockford has joined Johns Manville as territory manager for British Columbia. He will be stationed in Langley, B.C. Crockford was formerly at RONA inc. (800-561-0943)Al Holton, formerly development manager for RONA inc. in Ontario, has left that company to pursue other interests. No replacement has been named for him as of yet. (He can be contacted at 519-473-3686) Louise Hudon has been appointed as marketing director for Roland Boulanger & Co. Ltd., a Canadian manufacturer of decorative mouldings for the residential and commercial markets. Reporting to the general manager, Hudon will be responsible for marketing strategy and execution. She will also support the company’s retail and industrial sales departments with their communications, merchandising and category management needs. Hudon brings to Boulanger expertise in marketing and communications for Canadian and multinational retail and manufacturing organizations … She replaces Mario Cloutier, who will assume new responsibilities within the company. Founded in 1942, Roland Boulanger & Co. Ltd. (819-358-4100) Imperial Building Products’ Oakville, Ont., operations have had some additions to its team: Danny Pittana has been named national sales manager, leading a Canada-wide sales organization … Paul Biasucci, joins as territory sales manager … Minh Ly joins the Oakville staff as building products customer service representative. Can-Save has promoted Stephanie Brown to the newly created position of business development, Kitchen & Bath Division. Brown will be responsible for helping progressive dealers grow their kitchen & bath categories. (705-795-2611)  
Retail sales bounced back 1.1% in June to $30.8 billion after falling 1.2% in May, reports Stats Canada. While half of the eight retail sectors enjoyed sizable sales gains, about two-thirds of June’s increase came from stronger auto sales. Excluding auto sector sales, retail sales advanced by 0.4% in June, following a 0.3% decline the previous month.
Housing starts in July were 2.04 million, down 0.1% from June but up 2.8% from July 2004, says the Commerce Department. Permits reached 2.17 million, up 1.6% from June and up 2.5% from July 2004. The single-family home sales recorded the largest gains of 0.5% to a 1.71 million units, helping to partially offset a 3.2% decline in multi-family housing starts, which held at a pace of 331,000 units. Retail sales in July were $357 billion, reports the Commerce Department, up 1.8% from June and up 10.3% from one year ago. Excluding automobiles, retail sales were $271.4 billion, up 0.3% from June and up 8.1% from July 2004.Construction spending in June was $1,093 billion, down 0.3% from May but up 7.9% from June 2004. The latest report from the Commerce Department indicates total non-residential construction spending was $483.9 billion, down 0.1% from last month but up 6.5% from one year ago.
In today’s saturated and intensely competitive retail landscape, it is harder than ever to grow by rolling out more stores and SKUs. The search for profitable growth opportunities starts with a commitment to one “big idea” – the key factor that clearly differentiates a retailer from the competition and creates a compelling consumer value proposition. Learn from the retailers that have achieved long-term significant revenue and profit growth despite a challenging environment from Al Meyers, Senior Vice-President with Retail Forward. During his career, Mr. Meyers has assisted retailers in the development of strategies and implementation plans for improving market positioning, customer focus, competitive appeals and merchandising economics. He’s also an expert in Wal-Mart. If you thought Wal-Mart was an impetus for change during the past five years, watch out for the next five! Join Mr. Meyers at our incredible 10th anniversary celebration at our Hardlines Conference and Awards Gala, Sept. 12-13, 2005. For more information, .

****HARDLINES MARKETPLACE**** Don't miss the products and services on the Hardlines web Marketplace: And check out Hardlines Classifieds on the web:

HELP WANTED   PPG Canada Inc., a global leader in the production and technology of coatings and related products, has an immediate opening for a MARKETING CO-ORDINATOR This is an exciting opportunity for an energetic individual with a strong work ethic to become a part of our Architectural Coatings Group. You will be responsible for managing a variety of projects in a fast paced, deadline driven, project based environment. You will interpret, adapt and communicate corporate marketing initiatives to ensure optimal benefit to the Canadian dealer and sales operation as well as identify market trends and develop implementation programs and strategies to ensure market penetration and increased profits for the Canadian Architectural Coatings product offerings. You will possess a Business degree, preferably majoring in Marketing with 2 – 4 years of related experience with familiarity in the paint, design or home improvement industry. We are looking for a goal-oriented candidate who possesses excellent written and verbal communication skills, is extremely organized with a positive mental attitude and possesses outstanding organizational and time management and computer software application skills. Fluency in the French language would be desirable but not mandatory. All interested qualified candidates, should E-Mail their resume to or fax their resume to (905) 855-6642 (08.29_09.12)   

**********************************************************************************   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 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 (07.25_08.29) **********************************************************************************


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