Sales up 5.1% for Canadian Tire stores at year-end

TORONTO–-Canadian Tire Corp. enjoyed strong results across most divisions in 2005, as net earnings jumped 13.3% to $330.1 million from $291.5 million in 2004. Fourth-quarter net earnings totaled $118.2 million, up 17.7% from $100.4 million. Sales for Canadian Tire’s retail division, CTR, enjoyed 7.1% fourth-quarter retail sales growth, from $1.93 billion to $2.07 billion. Same-store sales increased a healthy 5.4%, led by strong sales in the car care and accessories, tools, home repair and maintenance, and auto custom categories. For the year, CTR's 2005 retail sales grew 5.1% to $6.86 billion, from $6.52 billion in 2004. The retail division’s fourth-quarter pre-tax earnings climbed 11.5% to $86.9 million from $78.0 million in the comparable 2004 period. The improvement in earnings largely reflects, among other things, higher shipments in the quarter, which were up 7.8% over the previous year, and higher vendor rebates. Canadian Tire also benefited from its global sourcing initiatives, which were expanded last year through the addition of a new sourcing office in Hong Kong. CTR opened 17 new Concept 20/20 stores and retrofitted an additional 11 stores to the same format during 2005, bringing its total number of Concept 20/20 stores to 53. The CTR network now totals 462 stores with total retail space of 14.9 million sq.ft. In the year ahead, Canadian Tire Retail plans to accelerate the rollout of its Concept 20/20 store format, with up to 80 new, replacement or retrofit projects on the books that will add about 1.5 million sq.ft. of retail space.

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LBM shows remain the place for deals

SASKATOON & LONDON, Ont.–-In the dead of Canadian winter, dealers are least likely to be pricing out major renovation or building jobs, which makes this time ideal for leaving the store and doing a little shopping themselves. Leading off the show season is the Prairie Showcase and Convention, held Jan. 19-21 in Saskatoon by the Western Retail Lumber Association. Now in its 13th year, many suppliers consider it the number-one buying show in the country. This year’s attendance, by dealers from across the Prairies, was up 10% over last year. The numbers were boosted by an additional 100 dealers from 85 stores in British Columbia, thanks to a cross promotion with WRLA’s sister association in B.C., the BSDA. However, another strong buying show is coming up in March, in Moncton, N.B. The 2006 Atlantic Building Materials Show has been extant much longer than the one in the West, and is facing the challenges of a consolidating marketplace. Nevertheless, it remains an important buying show that manages to draw dealers from throughout Atlantic Canada, including a very strong contingent from Newfoundland. It also attracts exhibitors from across the country, who are familiar with the value of the show. The Atlantic Building Supply Dealers Association runs this one from March 23-25. In between these shows is a relative newcomer, the Winter Buying Show, held two weekends ago by the Lumber and Building Materials Dealers Association of Ontario. In only its third year, this show’s star is still on the ascendancy, as it gains more critical mass each year, including double the pre-registration of last year’s event. However, because its dealer base is drawn from Ontario, most of these dealers, especially in central and southern parts of the province, have the benefit of easier access to the vendor base, which is largely located here. As a result, the show does not provide as unique a buying opportunity for the dealers. Nevertheless, this new show is fast becoming regarded as a must-attend for the LBM community in the province.

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RONA's latest deal marks serious play for contractor customer

BOUCHERVILLE, Que.—RONA’s purchase of a 51% interest in Matériaux Coupal Inc., a major independent home improvement dealer in the Greater Montreal area marks an aggressive bid by Canada’s number-two home improvement retailer to expand its pro business. Matériaux Coupal is a family owned operation that serves mainly pro and contractor customers through nine stores, plus a number of businesses, including two truss plants, that focus strictly on trade customers. It had retail sales of close to $125 million last year. By investing in a majority, but not all, of Coupal’s business, RONA will keep existing staff and management, and its corresponding expertise in pro sales, within the Coupal ranks. In this regard, the deal is similar to RONA’s acquisition, just over a year ago, of Totem Building Supplies. That company is also very strong on contractor sales. RONA expects to build its pro sales even more and promises more such deals to emerge in coming months. “We want to continue to invest in companies, not only on the retail side, but on the pro side,” says Sylvain Morrisette, RONA’s national director, corporate communications and public relations.

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Hardlines Conference will move to same time, place as new hardware show

WORLD HEADQUARTERS, Toronto—Canada has a new show. The National Hardware Show Canada is owned by Reed Exhibitions, the same organization that mounts the successful National Hardware Show in Las Vegas. It will take place Oct. 17-18, 2006, at the Toronto Congress Centre, near Toronto’s International Airport. The new show is not expected to compete directly with the regional association LBM shows. Rather than focusing on just building materials, NHS Canada will be a hardware/home improvement/paint & décor/lawn & garden/outdoor living show, dedicated to the broader idea of "Home Enhancement". Here at HARDLINES, we’ve been invited to hold our incredible Annual HARDLINES Conference during the same time. We have moved the date and location of the Conference so that those delegates who also wish to attend the new National Hardware Show, which follows right on from our event, can easily do so. The new dates of the combined Conference and Show are Oct. 16-17, 2006, which overlap with the Show’s on Oct. 17 and 18. Not only that, but the one and only Outstanding Retailer Awards are coming too. Those prestigious awards, presented by Hardware Merchandising magazine, first joined with the Hardlines Conference two years ago.

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Sears begins takeover play for Canadian subsidiary

HOFFMAN ESTATES, Ill.–-Sears Holdings Corp. made its takeover bid for its Canadian arm official last week. The company mailed an offer to acquire all outstanding common shares of Sears Canada Inc. Sears Holdings already hold about 53.8% of the shares of its wholly owned subsidiary. The offer price was CD$16.86 per share in cash. The offer is open for acceptance until March 17. “Our offer represents full and fair value for Sears Canada,” said Alan Lacy, vice-chairman of Sears Holdings in a prepared release. Even here, however, his comments on Sears Canada’s mediocre performance were pointed. “We firmly believe that our offer provides the best alternative for all Sears Canada shareholders and that Sears Canada's current market price reflects unrealistic market expectations for a higher bid,” he said. Only by taking over 100% of Sears Canada will the parent be able to help its Canadian division compete effectively against large U.S. and Canadian retail competitors, said the release. Following the takeover, Sears Holdings will resist converting Sears Canada to an income trust, a popular gambit among Canadian companies of late. In this case, however, it could have negative tax consequences to Sears Holdings. Therefore, Sears Holdings says it will not approve such a conversion.

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