February 21, 2000 - Volume vi, #7
Michael McLarney, Editor & Publisher
Ph: 416-489-3396 Fx: 416-489-6154 Check out our incredible Classifieds section at the end of this issue!HARDLINES CONTRACTOR CONFERENCE 2000Presented by HARDLINES in association with CANADIAN CONTRACTOR magazine Wednesday, February 23, 20009:00 am &endash; 3:00 p.m.Radisson Hotel Markham, OntarioThis important one-day symposium will give dealers and vendors alike valuable insights into selling more effectively to the $21-billion builder and contractor market.Some of the areas that will be covered include:The size and dynamics of the contractor marketplaceHow contractors make buying decisionsHow leading retailers are profiting in this marketHow leading wholesalers are driving sales in this marketWhat YOU have to do to win more businessSPONSORED BY THE LUMBER & BUILDING MATERIALS ASSOCIATION OF ONTARIOThe Program:
How to combat price shopping by your contractor customers: Robert Koci, Executive Editor, CANADIAN CONTRACTOR.Selling hardware to contractors: Peter Baldasarra, President, Interline HardwareIncreasing profit with installed sales: Brad West, Co-owner, Bigford's Castle Building Products.Building contractor loyalty on-line: Ian Gray, President and CEO of Dimensions Retail Systems.Building profitable three-way partnerships among retailers, distributors and contractors: Cully Koza, Co-owner, Can-Save.Sales growth potential of the contractor and builder market: Stephen Payne, Publisher of CANADIAN CONTRACTOR. This week in Hardlines:CASTLE STRIKES E-COMMERCE DEAL WITH WEBER SUPPLYIn an effort to broaden its hardware selection to its customers, Castle Building Centres has struck a deal with Weber Supply Co. to provide the buying group with its own online catalogue. The consumer, or the dealer on the consumer's behalf, will simply go to www.castle.ca and click on a new link, "Castle's Hardware Department," which will be up and running by March. The link will be entirely branded for Castle, and make no reference to Weber. Online shoppers can order via credit card or debit card and take advantage of three delivery options: direct to their homes, picked up from their local Castle outlet, or delivered by that Castle dealer. All payments will be handled by Weber Supply, and the difference between the wholesale and the retail price will be passed along the the local Castle dealer, as chosen by the customer, whether they pick it up there or not.The program builds on Weber's existing Won-Net system, a real-time online system that enables Weber's building supply dealer customers to access the full Weber inventory of hardware products. "We re-developed the Won-Net platform and reconfigured it for an e-commerce application," says David Weber, president of Weber Supply. The wholesaler has, in effect, created a private label application for Castle.The new service provides benefits for both sides. Each Castle outlet now has the "clicks" &endash; a virtual catalogue of 50,000 SKUs of hardware available to it. Weber gets the "bricks" it says it needs to substantiate its online presence. "That's the thing that's changing about e-commerce," says Weber. "We want the consumer to know that, if they've got a problem or want to touch and feel the product, they can go into any of Castle's 220 stores."Another advantage of the system, says Weber, is that ordering can be done in real time. Because they're connected to the Weber inventory, shoppers will know immediately whether the product they seek is available.* * * * * * *CASTORAMA DISCOUNTS HOME DEPOT TAKEOVER RUMOURA rumour that Home Depot Inc. solicited a major Castorama shareholder has been discounted by a spokesperson for Castorama's division in North America, Réno-Dépôt."I can assure you, nothing is happening," says Sylvain Toutant, vice-president marketing and development for Réno-Dépôt in Montréal. Home Depot declined to comment, referring to the rumour as "a speculative report." Castorama is half-owned by U.K.-based Kingfisher.Toutant is himself recently back from several days in Europe, where he had met with representatives from Castorama, none of whom gave credence to the rumour. "We believe it comes from an analyst in London," Toutant says. The Dubois family, which was reportedly approached by the Depot, owns 50% of Castorama's stock, while Kingfisher can only exercise 50% of the 57% it will be able to exercise as of July 2001."Castorama is not in a position to sell its shares because Kingfisher has the right of first refusal," Toutant explains. "No one can make a hostile move against the other."* * * * * * *MERGER PUTS RONA IN CANADA'S TOP FIVERONA's acquisition two weeks ago of Cashway Building Centres gives it estimated combined annual retail sales (1999) of more than $1.8 billion, putting it in fourth place in hardware/home improvement sales in Canada. Home Hardware, in combination with Beaver Lumber, weighs in at number two with about $2.9 billion based on 1999 figures. Home Depot is in the number-three spot now, with $2.1 billion, while Canadian Tire maintains the top spot with $3.8 billion by all its retailers. However, if you back out sporting goods and automotive, Canadian Tire drops to an estimated $1.7 billion in hardware/home improvement sales. (From the Hardlines Database of Retailers and Wholesalers)* * * * * * *Softwood lumber agreement losing support in U.S.Some House members in the U.S. are pushing for an end to the U.S.-Canada Softwood Lumber Agreement. These enlightened individuals admit the deal inhibits free trade and drives up prices for U.S. consumers, says a report from Associated Press. A "sense of Congress" resolution was introduced saying the 1996 pact should not be renewed when it expires in April 2001. The measure does not carry the force of law but could influence U.S. negotiators in their talks with Canada. The Coalition for Fair Lumber Imports, a group representing U.S. lumber producers, favours dumping the agreement but called the resolution unbalanced and misleading. It wants to see a mechanism put in place that protects the U.S. producers. The 1996 agreement allows Canada to ship 14.7 billion board feet of duty-free lumber to the U.S. each year but sets fees for shipments beyond that level.COMPANIES IN THE NEWSSlocan Forest Products Ltd. Has released its audited results for 1999, including previously announced sales of $1.1 billion, up from $936.2 million a year earlier. Cash flow from operations for 1999, after reforestation expenditures and before change in non-cash working capital, was $236.9 million, compared with $18.8 million or 2% of sales for 1998. Net earnings were $110.3 million. The company also announced it is investing up to $5.4 million at its Uneeda operation in the Fraser Valley to produce structurally rated, kiln dried laminated beams for the Japanese housing industry. The plant is expected to be up and operating by late March and will employ about 35. For the fiscal year ended January 28, 2000, Lowe's Cos. reported sales increased 19% to US$15.91 billion. Same-store sales increased 6.2% in fiscal 1999. Net earnings grew 38% to US$689.8 million while diluted earnings per share increased 34% to $1.79, excluding the one-time charge of US$0.04 per share for costs related to the merger with Eagle Hardware & Garden on April 2, 1999. As of year end, Lowe's operated 576 stores in 37 states. Retail square footage grew to 57.0 million last year, up 19% over the previous year. Cameron Ashley Building Products reported first-quarter sales for the period ended January 31, 2000, of US$255.8 million, up 14.5% from US$223.4 million in the same period a year earlier. Same-store sales grew 6.8% overall and 5.4% in Canada. The company reported a net loss of US$1.2 million, which included an operating expense of US$567,000 associated with software/systems development in the Cameron division.Last Thursday, Sears opened its second Furniture, Appliances and Home Improvements Store in Québec, and the fourth in Canada, this one in Brossard. The 60,000-sq.ft. outlet has a staff of 45, including 23 trained furniture/home decor and major appliance consultants. A 10,000-sq.ft. HomeCentral showroom showcases home products such as floor and window coverings, model kitchens and bathrooms, gas fireplaces, windows, doors, etc. Channellock Inc. will open a new warehouse in Rotterdam, the Netherlands, in March 2000. The facility will be used to maintaint and ship inventory to Channellock's European customers.CANADIAN STOCK WATCH