John Caulfield, Contributing Editor
 vol. ix, #47 December 8, 2003

IN THIS *PRE-HOLIDAY* ISSUE: * Outstanding Retailer Awards find new home with Hardlines Conference * Bargain Building Materials adds 15th store, expands programs * Coop fédérée announces warehouse expansion * Construct Canada attracts pro customers to 15th trade show * Strober's may seek further acquisitions after Lowe's buyout * Home Depot to acquire plumbing wholesaler * Lowe's establishes 11th distribution centre * Home Depot to sign lease for new Chicago area distribution centre * Tembec and Home Depot make certified wood pact

* * * * * * CALENDAR ALERT — dates to mark now for 2004:
  • Cologne International Hardware Fair/DIY'Tec, March 14-17 (including the Amazing Hardlines Canada Night Reception, March 14, kindly sponsored by Koelnmesse;
  • Our mind-blowing Meet the Buyers Seminar on April 28;
  • International Hardware Trends, two seminars by Hardlines at the National Hardware Show in Las Vegas, May 10-12;
  • The Hardlines Conference Series, September 8-9, including the Hardlines Gala Dinner on the evening of the 8th, and introducing the addition of the Outstanding Retailer Awards (see story in this issue).
"If you want work well done, select a busy man; the other kind has no time." — Elbert Hubbard (1856-1915)
ST-ANTONIN, QC — Bargain Building Materials will open its 15th store tomorrow. The independent chain, based in this community near Rivière du Loup, operates in French Canada as Matériaux à bas prix, specializing in new and off-priced building materials. Newest Store - 1st in QC.The newest store, in Charlesbourgh, will be the first for the retailer in Quebec City. Another store already exists in St-Nicholas, near Levis on the south shore from Quebec City. Jacques Déry, general manager of Bargain, sees this latest store as an important step in developing the market right in Quebec City, and its performance will be scrutinized carefully with an eye to further expansion there. Quebec City has experienced a rapid influx of big boxes in recent years, first by Réno-Dépôt, then Home Depot, but Déry says he's not worried. "We are the alternative to the big boxes. What we offer the customer is different. There's a market for it, so whether we're going into Quebec City itself — or Montreal or Trois Rivières — it doesn't matter. The idea is to be the alternative to the big boxes." Déry wants to expand, not just through corporate stores, but through franchisees, especially outside of Quebec. But a new "authorized dealer" program is also getting a lot of attention. An authorized dealership can be picked up by paint stores, flooring dealers and other specialty dealers, "especially in outlying areas where we wouldn't normally put a store, because there wouldn't be enough volume, or in an area that's between two of our existing stores." Bargain signed up its first authorized dealer recently. Les bois Bellerose Inc. in St-Michel-des-Saints is a lumber dealer that also does some remanufacturing. The store will carry some of Bargain's products, including its own imported tool and hardware lines under the Tomak name. "We've got other people interested in our authorized dealership program, says Déry, "and we're negotiating final agreements with some of them." He expects to see the fruits of those negotiations by as early as next month.
TORONTO — Canada's most prestigious awards for hardware and building materials dealers have a new home. Starting next year, Hardware Merchandising Magazine will present its Outstanding Retailer Awards (ORAs) in association with the Hardlines Conference Series, held September 8-9, 2004. "The Outstanding Retailer Awards provide a way for the industry to recognize and celebrate the best in this business," says Steve Payne, Publisher of Hardware Merchandising. "It made perfect sense to ally ourselves with the Hardlines Conference Series, which has firmly established itself as the premier meeting place for the retail home improvement industry in this country." The ORA presentation will take place during a special Awards luncheon on day one of the Hardlines Conference Series, September 8, 2004. Developed more than a decade ago by Hardware Merchandising, part of Rogers Media, the ORAs identify the best Canadian retailers in hardware, building materials, paint and specialty, and large format stores. A new category recognizes the most effective dealers serving pro and contractor customers. This was a no-brainer for us here at Hardlines. The ORAs are the Academy Awards of the home improvement industry. We're pleased that the team at Hardware Merchandising has chosen our Conference Series as the forum for presenting their awards. It's an important step in establishing the Conference Series as the focal point for the entire industry to gather and share ideas. (We'll start announcing our lineup of speakers in just a few weeks — MM)
Trois-Rivières, QC — Coopérative fédérée de Québec has announced it will invest $2.5 million into expansion of its existing 130,000-sq.ft. distribution centre. The expansion will add more than 35,000 sq.ft. to the facility, bringing it to more than 165,000 sq.ft. The expansion is required to service Coop fédérée's growing network of CO-OP hardware and home improvement stores. Over the past five years, the group has grown by 42% and now numbers 153 dealers throughout the province. This increase, combined with the creation of a new banner called Unimat for independent dealers outside the co-op, has already seen $25 million invested over the past four years to expand and renovate 57 stores. Faced with increasing demand from independent dealers for its products, Coop fédérée created a new banner, independent from the members-only CO-OP name. Coop fédérée's board of directors chose the Unimat banner (actually the resurrection of a name extant in the early '90s). The response has been very positive, says Claude Gingras, director for the hardware and farm machinery sector of Coop fédérée, adding that four Unimat stores have already joined the program since its inception at the end of 2002. "We are in a rural and semi-rural niche market where CO-OP plays a leading role," says Gingras. "With the strength of its presence in the regions, and being owned by and for agricultural producers, the network of CO-OP hardware stores can adapt to the realities experienced by communities on the outskirts of large urban centres. We know our clients well and are capable of accompanying our affiliated cooperatives in the development and growth of their hardware stores." Coopérative fédérée is the fourth largest company in Quebec, with revenues of $4.2 billion.
ATLANTA & MONTREAL — Home Depot is ramping up its commitment to certified wood products through a new agreement with Tembec Forest Products Group, a major Canadian softwood lumber producer. The deal provides for Tembec to supply Home Depot larger amounts of FSC-certified SPF lumber. Back in 1999, Home Depot issued its wood purchasing policy, under the auspices of Canadian president Annette Verschuren. The company's policy gives preferential treatment to suppliers offering certified wood products. "Today, we sell more FSC-certified wood than anyone in North America," said Ron Jarvis, Home Depot's merchandising vice-president in a prepared statement, adding that the Tembec deal solidifies that commitment. Jim Lopez, president of Tembec, added that the agreement will strengthen the two companies' business relationship and enhance the market penetration of Tembec's FSC-certified products.
TORONTO — A show aimed directly at builders, renovators architects and property managers is gaining momentum here. Construct Canada, which ran December 3-5 at the Metro Toronto Convention Centre, attracted an estimated 21,000 delegates to visit 650 companies in 950 booths, up from 20,100 delegates in 2002. Now in its 15th year, the show was held concurrently with three other events: Homebuilder & Renovator Expo, PM Expo and Design Trends. The event also presented a strong educational component, with 320 speakers offering 200 seminars over the course of the show. One of the big draws was a series of sessions on "green" building. Each of the three sessions, which sold out quickly, drew upwards of 100 people. Home Depot BoothThe importance of reaching the contractor market was not limited to manufacturers of products and systems; Home Depot was there for the third year with its Commercial Direct division, selling products directly to end-users.
STERLING, VA — Home Depot has agreed to acquire Economy Maintenance Supply, which will move the retailer more aggressively into the supply of maintenance, repair and operations products for the hospitality industry. The deal will fold EMS into Home Depot's San Diego-based Maintenance Warehouse subsidiary, which offers around 12,500 items through the Internet and its catalogues, with shipments and deliveries through 21 warehouses. Maintenance Warehouse is part of Home Depot's Supply division. EMS was started in 1985, and specializes in the supply of plumbing specialty parts such as faucets and fittings, primarily to hotels. Its 4,000-plus SKUs include appliances, drill bits, electrical, hardware, HVAC, lighting, sundries, and tools, which it distributes from its warehouse in Sterling — mostly to commercial customers along the East Coast. EMS also has an Internet-aided purchasing site. Maintenance Warehouse provides maintenance and repair products to owners and managers of multi-housing, lodging, educational and commercial properties and healthcare providers. Home Depot does not release sales data on this subsidiary, whose annual revenue is estimated by analysts to range between US$125 million and US$150 million. John DeCanio, EMS's president, declined to provide Hardlines with sales data about his company.
BROOKLYN, NY — The Strober Organization expects to increase its annual sales by 80% as a result of its agreement to acquire 26 Contractor Yards from Lowe's Cos., a deal that is expected to close January 2004. In 2002, Strober was the industry's 21st-largest home improvement retailer, with sales of US$460 million from 43 locations. Fred Marino, Strober's chairman, told Hardlines that his company was interested in the Contractor Yards to expand its geographic reach into the U.S. Southeast, where Lowe's operated these lumberyards in nine states. "We have a number of [builder] customers that are multi-regional and we felt we needed to move with them," he explains. Marino says Strober will run the new acquisition, along with its 950 employees, as a separate subsidiary, with its own president and management and a new divisional headquarters somewhere in North or South Carolina. He also suggests that this subsidiary could serve as a "springboard" for possible future acquisitions in other parts of the South. "Strober is a very acquisition-minded company," says Marino. Lowe's stopped opening Contractor Yards after it made its commitment in the early '90s to transform itself into a chain of warehouse home centres. It is not clear when Lowe's started shopping its yards around to potential buyers, but the deal with Strober appears to have happened relatively quickly.
PLAINFIELD, CT — Lowe's Cos., the industry's second-largest dealer, has agreed to build a 1.36-million-sq.ft. distribution centre here. When completed, it will support at least 125 Lowe's warehouse home centres along the Northeast, from Maine to New Jersey. The Mooresville, NC-based retailer is expected to invest more than US$80 million in the new distribution facility, which is expected to create 525 jobs by the time it starts receiving inventory in February 2005. It will be constructed on 215 acres of land. "We are excited about the opportunity we now have to become part of the Plainfield community," said Lee Herring, Lowe's senior vice-president distribution, in a prepared statement. Connecticut has been working with Lowe's for two years to find an appropriate site for the distribution centre, and went the extra mile to secure this deal. The state's Urban Reinvestment Tax Credit Program granted the retailer US$20 million in tax credits, which in essence means that Lowe's won't have to pay nearly 60% of the estimated US$35 million in taxes this facility was expected to generate through 2013. The city of Plainfield agreed in April to construct a US$6.9 million road to the site and waive roughly US$395,000 in building permit fees and US$1.9 million in water and sewer hookup fees, according to the New London Day, a local newspaper. A local group protesting the tax breaks and the prospect of increased truck traffic greeted Connecticut Governor John Rowland during the board-cutting ceremonies for the distribution centre, which took place at Plainfield's Town Hall. At that ceremony, Lowe's donated US$5,000 towards the renovation of the town's pool.
Canadian Tire 42.60 27.85 38.60
Canfor 11.68 7.60 10.42
Costco 39.02 27.00 35.82
Goodfellow 13.00 9.75 12.75
Home Depot 37.89 20.10 34.72
Hudson's Bay 12.97 7.75 10.63
Lowe's Cos. 60.42 33.37 55.87
Rona Inc. 28.10 11.75 28.00
Sears Canada 21.50 13.60 18.70
Sodisco-Howden 3.35 1.28 2.89
Taiga Forest 8.10 6.00 7.85
Wal-Mart 60.20 46.25 53.48
West Fraser 39.05 29.25 36.10
ST. JACOBS, ON — Home Hardware Stores Ltd. is promoting its Gift Card program beyond just point-of-sale. The gift cards, launched earlier this year, take the place of gift certificates, and can be "reloaded" with cash value. Now the company, which represents more than 1,000 hardware, furniture and home improvement retailers across Canada, has launched an incentive program for businesses who want to reward or motivate their own staff. Discounts on the cards range from 1% on card purchases under $25,000, and up to 5% for purchases exceeding $100,000. MONTREAL — Sodisco-Howden has added a night shift to its Howden division warehouse in London, ON to increase its fill rates. CHICAGO, IL — Home Depot is reportedly planning to open a giant distribution centre in the Chicago suburb of Romeoville, in addition to an existing warehouse in neighboring Bolingbrook. According to Crain's Chicago Business, Home Depot is expected to sign a lease on December 15 for the 700,000-plus-sq.ft. facility in Windham Lakes Business Park, a 500-acre industrial park off Interstate 55. LONDON, UK — Shares of Kingfisher plc jumped last week as rumours heated up — yet again — of possible interest in the company's home improvement business by Home Depot. However, the rumours appear well-timed as Kingfisher will announce its quarterly results on December 10. Since the demerger of its Kesa Electricals division this past summer, Kingfisher has become a focused DIY retailer through its B&Q operations. B&Q is Europe's biggest DIY retailer and recently made a foray into China. But there wouldn't be much left of Kingfisher if its sold off B&Q, now would there? Home Depot Kids GiftTORONTO — Home Depot Canada has released a new a Holiday Gift Guide with everything from power tools to microwave ovens. In fact, emphasis is on soft DIY and décor, with "Ikon" branded (Y-IKEA!) book shelves, plus telephones and even crock pots. One clever gift idea is the "Crafty Kid's Gift Box." ATLANTA — A gang of crooks was arrested for allegedly switching bar codes from cheaper items to high-end products such as rugs at Home Depot and Lowe's stores in Georgia, Tennessee, Alabama, North Carolina and South Carolina. They would then go through the checkout paying low prices for the merchandise, returning later to return the products at their full value. Issued credit vouchers for the returned items, the nefarious thieves would then auction off the vouchers on eBay. ISSAQUAH, WA — Costco Wholesale Corp. reported net sales of US$3.79 billion in November, an increase of 17% from US$3.23 billion in the same month a year earlier. For the first 13 weeks of its 2004 fiscal year, net sales reached US$11.28 billion, up 15% from US$9.83 billion a year earlier. Same-store sales for November were up 14%, boosted by a weak dollar and labour unrest at Southern California grocery chains BENTONVILLE, AK — Claiming the fees are too high, Wal-Mart says it will no longer accept MasterCard signature debit cards at its U.S. stores. It will, however, continue to accept the credit cards. STELLARTON, NS — Sobeys Inc., the giant Canadian grocery chain, is buying Commisso's 15 Food Markets stores and the wholesale business of Commisso's Grocery Distributors group of companies in Southern Ontario. The sticker price is $65 million.

Residential construction in Canada remains hot, reaching $17.6 billion in the third quarter, says Stats Canada. That's up 11.1% from the $15.8 billion invested in the third quarter of 2002. This robust growth reflects steady increases in all three components of residential construction investment, namely new housing, renovations and acquisition costs. Since the start of 2003, the value of investment in the housing sector has reached $45.3 billion, up 11.2% from the first three quarters of 2002.

The value of building permits fell 4.9% in October, reflecting a drop in both the residential and non-residential sectors. October's drop left the overall value of permits for the month at $4.3 billion. Residential permit values fell 3.3% from September's record level to $2.8 billion. The value of non-residential permits, meanwhile, slid 7.7% to $1.5 billion. Construction in October in the U.S. was US$922.0 billion, up 0.9% from September and up 7% from one year ago, reports the Commerce Department. Private construction was US$697.4 billion, up 0.8% from September, and public construction was US$224.7 billion, up 1.2%.
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****HARDLINES MARKETPLACE**** Dont' miss the products and services on the Hardlines web Marketplace: And check out Hardlines Classifieds on the web: HELP WANTED

SALES & MARKETING REPRESENTATIVE, EASTERN ONTARIO/WEST QUEBEC Wood specialty Products - Flooring Division Goodfellow Inc., a leading Canadian Wholesale Distributor / Manufacturer CANDIDATES SHOULD BE: -Sales and marketing oriented; -Self motivated and require little supervision -Well organized and disciplined -Willing to transfer to other Canadian Divisions -Preferably bilingual (French / English) but not a prime requirement BENEFITS include Salary and profit sharing; Full company program (medical/dental/pension) Our company offers very good opportunities for advancement and promotion. Please send resume to: Branch Manager, Goodfellow Inc, Ottawa; Email: or fax at: (613) 244-0488


SERVICE REPRESENTATIVE GREATER TORONTO AREA Colonial Elegance is the Canadian leading manufacturer and distributor of staircase components, mirror doors and other building material products related to Home Renovation Centers. You are the candidate we need, if you have a minimum of 1 year service experience and can work under minimal supervision. You know how to establish strong relationships with customers and have the aptitude for representing & servicing our current customers. As a member of the Ontario sales and service team, you will regularly visit our customers, be fully responsible for the service of our range of products, complete product set-up and resets and conduct product knowledge training sessions in one of our exclusive territories: GREATER TORONTO AREA We offer a competitive compensation and benefit package. Please submit your resume with confidence to:

COLONIAL ELEGANCE INC. Att: National Sales Director 3800 Du Tricentenaire Blvd. Montreal, QC H1B 5T8 Fax: (514) 640-4307 e-mail:

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