RONA buys majority share of major Quebec independent

BOUCHERVILLE, Que.–RONA inc. has acquired a 51% interest in Matériaux Coupal Inc., a major independent home improvement dealer in the Greater Montreal area. Coupal is a family owned operation that serves mainly the pro and contractor customers. Its nine stores comprise a total retail sales area of about 53,000 sq.ft. and 1.6 million sq.ft. of outdoor storage area, with a staff of more than 540. In 2005, Coupal posted retail sales of close to $125 million in 2005. The company also operates two “Truss Experts” factories, which manufacture roof trusses, joists and prefabricated walls. One, formerly known as Chevrons Rivard, is located in Granby and the other, formerly Toitures Deslongchamps, is located in St-Lin-des-Laurentides. Coupal also operates an interior finishing factory in Granby. Together the factories total some 60,000 square feet. By investing in a majority, but not all, of Coupal’s business, RONA regards the deal as something of a joint venture. "It’s a complimentary business to ours,” says Sylvain Morrisette, RONA’s national director, corporate communications and public relations. He believes the deal will reinforce the strengths of both RONA and Coupal. “We think it’s the best way to continue,” Morissette adds. “These people have the expertise in that market and we want to continue to count on that expertise and their support.” Coupal was founded in 1914 in Henryville, 65 km south of Montreal, by Orpha Coupal. It is currently controlled by the Doucet family, the main shareholder, and François Doucet was president of Coupal. It was formerly a member of the Independent Lumber Dealers Cooperative, a small group of large home improvement retailers whose collective sales exceed… ILDC members have been targets for RONA in the past; Totem Building Supplies was its most recent–and most notorious–acquisition from that group. RONA wouldn’t disclose how much it paid for its 51% of the Coupal business, but it did pay $100 million for Totem, which, in terms of sales volume and points of sale, is about twice the size of Coupal. The deal, subject to the usual conditions and approvals, is expected to close in by the end of June. RONA expects the transaction to have an immediate positive impact on net earnings.

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Home Hardware adds dealers in GTA

St. Jacobs, Ont.–Home Hardware Stores Ltd., Canada’s largest hardware, lumber and building materials and furniture co-operative, has beefed up its presence in the Greater Toronto Area with the addition of two new dealers. The first is right in mid-town Toronto, minutes from Highway 401. Michael and Tony Rumolo, Dealer-owners of Dickson Home Hardware, a long-time Pro dealer, have recently changed banners to join Home Hardware. The 10,000 square foot hardware store offers a traditional assortment of hardware and home improvement products, as well as a wide range of barbecues and barbecue accessories. In Markham, Murray Wicks, Dealer-owner of Markham Home Hardware, has converted to the Home Hardware banner as well. Located at 5762 Highway 7, the store offers a traditional selection of hardware and home improvement products in a 9,000 square foot store. Wicks also offers a wide selection of barbecues and barbecue accessories. Although Home Hardware is Canada’s number-three home improvement retailer, with more than 1,000 stores, its strength has been in secondary and rural market. But like the rest of the industry, it has watched as both Home Depot and RONA have set their sights on more urban locations, typically better suited to the smaller formats offered by independents such as Home Hardware. However, the co-op retailer is not always well represented in the big cities. It has only nine stores in Vancouver, for example, and the two new additions to the Greater Toronto Area bring the total in that market to only 26. Despite having 115 stores in Alberta already, Home had to secure a foothold in Edmonton by opening a ground-up store. Northland Home Hardware Building Centre opened in October 2005. That 60,000-sq.ft. operation features a 14,000-sq.ft. mezzanine-level showroom, as well as a 23,000-sq.ft. drive-through lumber yard. Home Hardware is focused on growing its retail space through expanding existing locations and adding new stores and members. The company added 39 new dealers in 2005. Another 42 stores were renovated and re-merchandised. “We’re happy to welcome these dealers to the Home Hardware family,” said Paul Straus, vice-president and CEO of Home Hardware Stores. “We’re committed to the success of independent dealers all across Canada, ensuring they can offer their communities great selection, value and service.”

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Venerable Canadian retailer faces bankruptcy

BARACHOIS, Que.–Hudson’s Bay move over. Another Canadian retail landmark is under siege: Robin Jones & Whitman has closed its general store here, a 96-year fixture in Quebec’s Gaspé region that sold everything from building materials and hardware to groceries. The venerable company has five other stores, but they’ll be shuttered if the firm doesn’t find financial aid to pay back its creditors by Feb. 19. The store here has been in business since 1909, and was the only one in the $10-million chain that sells lumber. The sign out front betrays the company’s maritime roots: “Poissonnerie meubles”–fish and furniture. But Robin Jones & Whitman is much older. The Robin Company began in 1766 when Charles Robin, who emigrated from England’s island of Jersey, established a fish plant in Arichat on Cape Breton Island. (Only Hudson's Bay Co., founded in 1670, is older.) Lawrence Legros, the current owner of Robin Jones & Whitman, is a direct descendant of the stores' founders. Today, however, unable to keep up in the face of mill closures and the collapse of the cod fishery, the retailer is under court protection from creditors, mainly the Bank of Montreal and the Business Development Bank.

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U.S. lumber industry challenges NAFTA

WASHINGTON–A group of American-based lumber suppliers has taken its opposition to Canadian imports to a new level by challenging the constitutionality of how U.S.-Canada trade disputes are settled. The Coalition for Fair Lumber Imports, the group that has been led by Georgia-Pacific and other giant lumber suppliers, filed court papers here that allege its members are being deprived of due process under the North American Free Trade Agreement, or NAFTA, which has panels that include Canadians who are involved in deciding issues under U.S. law that affect American companies. This is the latest salvo in an ongoing battle being waged by U.S. lumber suppliers, which have long claimed that Canada subsidizes its lumber industry, which the Canadian industry has disputed. The Coalition is appealing a decision by the U.S. Commerce Department to effectively drop countervailing duties on Canadian lumber shipments. On Nov. 22, Commerce said it would comply with an earlier NAFTA panel ruling by effectively dropping countervailing duties on Canadian softwood lumber imports, which are currently around 16 percent. But the U.S. government also said it would continue to collect the countervailing duties as long as the litigation between the two countries continued. Since May 2002, when duties were first imposed, Canadian producers have lost more than $5 billion Canadian in revenue.

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RONA launches program to provide funding to Olympic athletes

MONTREAL–RONA has pledged a multi-million dollar commitment to support Canadian athletes who hope to compete in the Beijing 2008 Olympic Summer Games or the Vancouver 2010 Olympic Winter Games. A five-year funding program worth a minimum of $4 million will help prospective Olympians. The program also features an in-store fund-raising that could provide up to $2 million in additional funds for the athletes over the five-year period. According to RONA, the program, coined “Growing with Our Athletes”, is one of the most ambitious corporate support initiatives ever undertaken with the Canadian Olympic movement. RONA will sponsor 100 young athletes as chosen by the Canadian Olympic Committee, in consultation with its member National Sport Federations, as strong prospects for the 2008 or 2010 Olympic Games. These athletes, chosen from across the country, will receive financial support from RONA to help them offset living, training and competition expenses. “RONA is deeply committed to the Olympic movement and the advancement of our Canadian athletes on a world level,” said RONA president and CEO Robert Dutton in a prepared release. RONA will complement its funding with a matching program that assigns a neighborhood store with each athlete. Local customers can provide direct financial support to that athlete by purchasing a special “RONA Renovation Kit”–an Olympic carrying case that includes contains a RONA Vancouver 2010 tape measure, pen, and three renovation planning guides. The kit will also contain an Olympic notepad, courtesy of another retail sponsor, Hudson’s Bay Corp.

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Tractor Supply reports healthy year-end

BRENTWOOD, Tenn.–Tractor Supply Co. reported fourth-quarter net sales of $597.9 million, a 31.1% increase from $456.0 million a year earlier. The company, which claims to be the largest retail farm and ranch store chain in the U.S., enjoyed a same-store sales increase of 10.0%, with the biggest improvement in agricultural, seasonal, livestock and pet products, and clothing, and the greatest strength in the southern stores. During the quarter, net income rose by 40.4% to $30.9 million, compared to $22.0 million for the comparable quarter in 2004. For the fiscal year, net sales increased 18.9% to $2,068.0 million and same-store sales increased 5.7%, vs. 2004’s 9.9% gain. Fiscal 2005 included an additional week compared to last year, which accounted for approximately 1.8% of the sales increase. Net income for fiscal 2005 increased 33.7% to $85.7 million, from $64.1 million. During fiscal 2005, Tractor Supply opened 65 new stores, acquired an additional 16 stores through the purchase of Del's Farm Supply, relocated 18 stores and closed one store. In the prior year, the Company opened 53 new stores, relocated 20 stores and closed one store.

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