| RONA SHOWS RECORD 2Q PROFITS,
LUMBER PRICES AFFECT TOP LINE |
| BOUCHERVILLE, QC — Rona Inc. has reported its best quarter ever with net earnings of $27.0 million for the second quarter ended June 29. This marks a 47.1% increase over the same quarter a year earlier and the 33rd year-over-year increase in quarterly earnings.
Since the transaction has not yet been completed, the operating profits generated by the Réno-Dépôt stores have not yet been consolidated into Rona's results.
Consolidated net sales (sales through the warehouse to dealer members and sales at retail through its corporate retail holdings) for the first six months of the year amounted to $1.17 billion, compared with $1.16 billion a year earlier.
During a conference call with analysts, Rona president and CEO Robert Dutton added that more details of Rona's plans for consolidation of the Réno-Dépôt purchase and Canadian expansion will be unveiled at next week's Hardlines Marketing Conference. |
| TRUSERV UNVEILS NEW DISTRIBUTION CENTRE IN ONTARIO |
 KITCHENER, ON — It's a long way from Winnipeg, but that's just the point of TruServ Canada establishing a new distribution centre in Southwestern Ontario. With the addition of more than 100 retail customers through its acquisition of Growmark's retail business in Ontario at the beginning of 2003, TruServ wants to beef up its presence in Eastern Canada and position itself as a full-line distributor.
The 240,000-sq.ft. distribution centre, with 15,000 sq.ft. of office space, is about one hour west of Toronto, and right across the road from Home Hardware's own LBM  distribution centre. Officials from TruServ in Winnipeg and from Growmark in both the U.S. and Canada were on hand for the ceremony, including Tony DiEmanuele, who will be in charge of the new facility, and Ray Falkenberg, vice-president of business development and marketing for TruServ Canada.
The significance of the move means this Winnipeg-based co-op distributor wants to be the alternative of choice in an industry that has seen intense consolidation at the wholesale level. The buyout of Ace Hardware's assets in Canada by competitor Sodisco-Howden Group meant independents had very little in the way of options for a full-line hardware wholesaler. TruServ wasted no time attempting to fill the bill, with a pilot project with Castle Building Centres that has since expanded to include Sexton Group.
Meanwhile, Groupe BMR in Quebec has expanded its hardware distribution, and has been wooing fellow Matreco members to sell them hardware. In fact, BMR will officially launch the expanded distribution centre later in September. |
| A BIG QUARTER FOR TWO BIG BOX COMPETITORS |
|
 SPECIAL REPORT — Home Depot and Lowe's, the industry's two largest retailers, reported strong sales and earnings gains for the three months ended August 3. However, investors weren't as impressed with Home Depot's performance as they were with Lowe's.
Depot's sales grew by 10.5% to US$17.99 billion for the quarter, and its same-store sales increased 2.2%, compared to same-store declines in the two previous quarters. The retailer's net income rose 9.9% to US$1.299 billion. Through the first six months of its fiscal year - during which it spent US$1.7 billion on capital improvements in its stores - Home Depot's revenue increased 8.3% to US$33.09 billion and its earnings jumped 8.2% to US$2.21 billion.
Lowe's quarterly sales increased 17% to US$8.77 billlion, and its same-store sales grew by a robust 6.9%. Quarterly earnings rose 27.8% to US$597 million. Through six months, Lowe's profit increased 25.5% to US$1.02 billion on sales of US$15.98 billion that were up 14.5%.
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| PEOPLE ON THE MOVE |
| Gail Walker has been promoted to vice-president marketing at The Mibro Group. She was formerly director of marketing. (416-285-9000) Tim Farrell has been appointed president, CEO and secretary of the American Hardware Manufacturers Association, a promotion from his most recent position at the AHMA as executive vice-president and COO. He replaces his dad, Bill Farrell, who will move into a vice-chairman role, working on building the new AHMA Hardware Show and maintaining some of the association's international programs. |
| NOTED… |
| COLOGNE, GERMANY – The range of products being presented at Practical World, the International Hardware Fair/DIY’TEC next spring will once again represent three distinct, but related, sections of home improvement: World of Tools, World of Security, Locks and Fittings and World of Home Improvement/DIY. Practical World will be held March 14-17, 2004. For more information, contact Barbara Hills, Canadian Sales Manager, at 416-598-3343 or b.hills@koelnmessenafta.com |
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| DUTTON, GALLI TO SPEAK AT CONFERENCE |
| TORONTO — The Hardlines Conference Series is just days away. But we keep adding more great stuff. Albert Plant, national manager, consumer products and retailing at RBC Royal Bank, was a definite hit at last year's Conference. Well, he's agreed to join us again this year, with a breakout session called "Tomorrow's Customers and Tomorrow's Stores." Other breakouts are on data synchronization, by the Electronic Commerce Council of Canada, and managing your merchandising "real estate" by ACNielsen. If you haven't registered for September 3 and 4, read on!
International Business Seminar: Hardlines believes strongly in companies building their businesses by looking beyond traditional borders - geographical or otherwise. This session will give everyone a load of concrete tips, contacts and money saving leads for building your overseas business. Featuring Industry Canada, the Council of American States in Canada, and more!!!
Retail Strategies Symposium: This half-day seminar will explain what the latest trends in housing and demographics mean for retailers and suppliers in home improvement. It's also a great primer on the industry itself: size of the market, breakdown by store type and product category, niches and strategies of the key retailers, etc. Featuring Deirdre McMurdy of Global Television and Peter Norman of Clayton Research.
Jos Wintermans, president and CEO of Sodisco-Howden: With an eye to change, and a sensibility that takes a longer term outlook, in the last two years he's made the changes to Sodisco-Howden that this company has needed for a decade. He is going to talk about the role of Canada's only remaining full-line hardware wholesaler. He says Sodisco-Howden is going to be around for a long time. Let's find out why.
John Herbert, general manager, German Retail Association: I can't say enough about this guy. He has this amazing, brilliant retail mind. If anyone has ever seen the Knauber chain in Germany you'll know what I mean (and I know a lot of you have, including Home Depot and Canadian Tire, which both borrowed ideas from this pioneer of "soft DIY"). He then joined Home Depot as vice-president of the EXPO division, before returning to Germany. Be sure not to miss this one!
Tanya Hanson-Rocca, Roblynn Home Hardware: Out of all the young retailers in all of North America - not just Canada, but the U.S. too - Tanya was chosen as last year's Young Retailer of the Year Award winner! She has managed to double sales and increase customer counts a gazillion times over. She rocks! Of all the people to tell the story from the front lines, this year it's definitely Tanya.
Joe Galli Jr., head of Newell Rubbermaid: The branding wunderkind, he developed the DeWalt sub-brand, which provided a brand for Black & Decker that quickly established itself as the choice for pros. Now he's working his organizational magic at Newell Rubbermaid. Acquisitions such as the recent American Tool takeover prove Joe's definitely still on top of his game. I met Joe just once, at a press conference in Chicago a few years ago and he's one dynamic individual.
Robert Dutton, president and CEO, Rona Inc.: With the acquisition of Réno-Dépôt, expected to close in a matter of weeks, Rona will be the number-two home improvement retailer in Canada. So it's nothing short of amazing that Robert Dutton, the top man at Rona, has agreed to close the two-day event.
I am confident this is going to be the strongest Conference Series yet. I look forward to seeing you on September 3-4, 2003! Call for details: 416-489-3396 or <click here>. |
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John Caulfield, Contributing Editor
vol. ix, #32 August 25, 2003