John Caulfield, Contributing Editor
vol. xi, #8, February 21, 2005

IN THIS ISSUE: • Home Depot's Expo format facing big changes • CanWel will focus Sodisco-Howden unit on distribution • U.S. hardware association comes to Canada • Top buyers will share tips • Home Depot allies with Hispanics, mature workers • National brands under siege: a new report * * * * * *

"Yield thou not to adversity, but press on the more bravely." — Virgil
TORONTO — Sodisco-Howden Group was de-listed last Wednesday from the Toronto Stock Exchange. The move was just the latest by its new owners, CanWel Building Materials, to re-position the hardware distribution company's focus on supplying product.Tom and AmarEffective today, Sodisco-Howden becomes a wholly owned subsidiary of CanWel, with CanWel's president Tom Donaldson serving as acting president and CEO. Amar Doman, chairman of CanWel, is also chairman of Sodisco-Howden. (For more executive appointments at Sodisco-Howden, see "People on the move" in this issue—MM)In an exclusive interview with HARDLINES, Doman and Donaldson both stressed that Sodisco-Howden will not be in the retail business. It will not develop either of its existing banners, in favour of the distribution business. "That is our target for Sodisco-Howden Group," says Donaldson. "We are serving the independent dealer." There will no longer be any dealer development in Sodisco-Howden, he continues. "Our job is not to convert a dealer from one banner to another." "Banners aren't our business," says Doman. He wants to stress the distinction, because it's an important one for CanWel's strategy. Growing its retail banner programs has historically put Sodisco-Howden in direct competition with other retail groups that are existing customers for CanWel's building materials distribution business. Sodisco-Howden currently has two active banners, both licensed from groups in the U.S.: Ace and Pro. But by staying true to its wholesale roots, Sodisco-Howden can co-exist with other groups, such as Home Hardware and Rona inc., two of CanWel's largest customers. "Sodisco-Howden Group is safe waters now," says Donaldson. "When it comes to the Sodisco-Howden Group business, that is a rifle shot at the independent," he adds.
ATLANTA — We recently reported that Home Depot's plans for its 54-unit Expo Design Centers remain up in the air. HARDLINES has since learned that this division plans to unveil a number of new twists in the spring, and that Expo's merchandising and design teams continue to work on upgrading the stores' physical appearance and product mix.Jean Osta, Expo's public relations manager, confirms that Home Depot wouldn't open any Expos in 2005. "We're working with the stores we have this year," she states. Much of the emphasis of that work is being placed on improving those stores' back-end systems, reflecting a strategy that has been chain wide.She noted, however, that other changes are afoot. Taylor Hastie, a former Williams-Sonoma and Martha Stewart Home executive, was hired last June as Expo's director of trends and analysis. He has assembled this division's first "visual" team, which Osta says is resetting the stores with an eye toward "making them cleaner, overall." In April, Expo will introduce the first of four "style initiatives," vignettes that will group different home décor products to present appealing room settings. The first will be called "Mediterranean," which will reflect ideas Osta said Hastie gleaned from recent travels throughout Europe. Subsequent vignettes, which will rolled out in Expo's stores over the next several months, will be called "Asian Fusion," "Modern Elegance," and "Scandinavian Country." Hastie's team is also working with Bruce Nelson, the former Marshall Field executive whom Expo hired as its vp-merchandising last May, to align the stores' product assortments closer to its target customers' tastes and pocket books. Expo president Annette Verschuren had stated in a previous interview her displeasure with the way the product mix at Expo was being positioned with its target customer. Osta says Home Depot hasn't shut the door to the possibility that, if these changes produce the intended results, it might consider opening new Expos at some future date. However, Osta was careful to point out that expansion currently is not on the front burner.
INDIANAPOLIS, Ind. — The National Retail Hardware Association has renamed itself set its sights on Canada. Now the North American Retail Hardware Association, it's offering Canadian home improvement retailers membership in the expanded organization through a newly formed operation, NRHA Canada.Upon hearing that the Canadian Retail Hardware went bust just before Christmas, just short of hitting a century of service, the NRHA quickly determined that the Canadian dealers could benefit from its programs. John Hammond, managing director of the NRHA, and publisher of the association's trade magazine, Do-It-Yourself Retailing, hired Scott Hoy, himself the former publisher of a trade magazine in Canada, Hardware and Home Centre.Renaming itself the North American Retail Hardware Association but keeping the same acronym — NRHA — the association is offering Canadian home improvement retailers membership in the expanded organization through its newly formed Canadian operation, NRHA Canada, with Hoy at the helm. "Following the announcement that CRHA was closing, we felt retailers in Canada needed representation, as well as the services we provide," said the NRHA's Hammond in a prepared release. "NRHA bylaws allowed us to expand our organization to provide these services and create an entity to meet the needs of those retailers." Membership costs dealers $250 annually, and that price includes full access to the NRHA's "E-Access Education and Training" website, which offers an online dossier of NRHA education and training tools, with training courses for staff. Now these education and business management tools are available to Canadian dealers. "We are delighted to have a man of Scott's caliber bringing association programs and services like this online education and training package to Canadian retailers," said Hammond. Hoy will also be calling on the major retail and buying groups in Canada offering electronic membership packages. One such package has been developed already for Home Hardware Stores Ltd., headquartered in St. Jacobs, Ont. Included in the Home Hardware Education and Training website are the NRHA Advanced Course in Hardware Retailing and the Building Materials Product Knowledge employee training courses. Both have been tailored to the Canadian market. In addition to his association responsibilities, Hoy now represents Do-It-Yourself Retailing magazine in Canada, selling trade advertising in Canada.
MISSISSAUGA, Ont. — The merger of two buying groups, Calgary based Tim-BR-Marts Ltd. and Tim-BR-Mart Ontario, may have created combined purchasing power in excess of $1 billion — but that's just the beginning, says one of the combined group's executives."Their dealers are very similar to our dealers," says Don Nash, executive vice-president of Tim-BR-Marts. "They are very excited about this merger, and they're waiting to see what the next step is going to be. There's lots of momentum there."Nash believes this move will create pressure within the industry to see more consolidation, even within the next 12 months. "I think this is going to be a watershed year," Nash says. "We're growing and we think there's an opportunity for others to look our way."
WORLD HEADQUARTERS, TORONTO — The Far East has long been a key source of supply for manufacturers seeking low-cost sources of supply. But guess what, the very retail customers these manufacturers sell to are now establishing offices of their own there.According to a new report, "The End of Brands," which appears in the latest edition of HARDLINES Quarterly Report, vendors will face their biggest competitive challenge in coming years from the very customers they sell to.Today, almost every major hardlines retailer in North America has a beach head in the Orient. Hong Kong, Taipei, and now Shanghai are home to buying offices for Home Depot, Ace Hardware, Canadian Tire. Last year alone, Canadian Tire and Ace Hardware opened offices in Hong Kong, Home Depot added offices in Shanghai, while giant hardware wholesaler Orgill opened its first there. And of course, Wal-Mart has been in the Orient with numerous offices for years, and accounted for a whopping $15 billion in imports from the Far East in 2004 alone. Now retailers such as Rona, Canadian Tire and Home Hardware are investing heavily in their own brands. Sometimes it's with the help of existing manufacturers, but more and more, they're doing the sourcing themselves. The result has been massive consolidation among vendors, as brand names get bought up by an ever-shrinking handful of major companies, such as Newell Rubbermaid and Black & Decker. According to the HQR study, vendors can defend the value proposition of their own national brands, but this will require working more closely than ever with the companies they sell to. ("The End of Brands" appears in the latest issue of HARDLINES Quarterly Report, our newsletter of research and analysis on the retail home improvement industry. For more information, call me at 416-489-3396, or click here .—Michael)
ATLANTA & TORONTO — Home Depot has announced hiring partnerships on both sides of the border. In the U.S., the giant retailer has teamed with four national Hispanic groups, the ASPIRA Association, Hispanic Association of Colleges and Universities (HACU), National Council of La Raza (NCLR), and SER — Jobs for Progress National. Home Depot will work with these organizations and their strong network of local offices and contacts to help recruit candidates for full-time and part-time positions across the country.At the same time, the Canadian division has formed a hiring partnership with an association representing people over 50. Home Depot Canada will tap into the mature workforce represented by the Canadian Association of Retired Persons (CARP) to provide a pool of experienced workers. The move is expected to help Home Depot expand its workforce, while providing an experienced and stable pool of employees.The Hispanic community will constitute an estimated 25% of the national workforce by 2050, says a release from Home Depot. This community is the fastest-growing consumer segment in the nation and already represents 14% of the U.S. population. By 2008, Hispanics will have an estimated annual purchasing power of approximately US$1 trillion, or 9.6% of the U.S. GDP.
OAK BROOK, Ill. — Ace Hardware Corp. ended its 80th year of business with record profits for the second year running. Net earnings in 2004 for the dealer owned co-op reached US$101.9 million, up 1.0% over 2003. Consolidated wholesale sales hit US$3.289 billion, up by US$129.4 million, or 4.1%, from the previous year. Excluding the impact of the 53rd week in 2003, 2004 sales increased 5.2%.Dealers were rewarded at year end with a return totalling US$174.5 million. The 2004 rebate included US$100.3 million in patronage dividends and US$60.1 million in upfront dividends. For the first time, Ace will also pay out "rewards" given to retailers who successfully adopted the company's Vision 21 program. Nearly 1,900 high-performing retailers who achieved all of the program's brand, merchandising and customer service initiatives receive incentive awards based on 1% of their handled purchases. This year, that rebate totals US$14.1 million.During the year, Ace managed to open 133 new stores. Of those, 75 were branch openings by existing Ace retailers, 39 were conversions from other co-ops, and 19 were opened by new investors. More than 1.6 million square feet of retail space was added in the process. A one-million square-foot distribution center was opened near Sacramento, Calif., double the size of the former facility in the region. The new DC serves about 350 retailers in California and Nevada. And a buying office was opened in Hong Kong, for Ace's new division, AGD Asia Ltd., to source a wide array of products for Ace retailers around the world. Ace Hardware Corp. is the largest retailer-owned hardware co-operative in the U.S. Annual retail sales for Ace's 4,800 hardware and building center dealers worldwide total approximately US$13 billion.
Still trying to get that appointment with Home Depot? Can't get in the door at Canadian Tire? Take heart. Vendors now have the opportunity to learn how to sell Canada's top retailers — directly from the buyers themselves.The Fourth Annual HARDLINES Meet the Buyers Seminar is an information-packed morning — this year being held in both Toronto and Montreal. That way, we can ensure representation from the key players in this industry. Be there for selling insights from the buyers themselves!In Toronto, April 26, 2005, meet:
  • John DeFranco, Merchant for Outdoor & Barbecues, Home Depot;
  • Bill Wilson, Merchandise Director, TSC Stores Ltd., also representing Mutual Hardware;
  • Décor Merchant TBA, Canadian Tire Corp.;
  • Scott Urie, National Merchandise Manager: Craftsman, Home & Electronics, Sears Canada.
In Montreal, April 28, meet:
  • Normand Dumont, Exec. VP Merchandising, RONA;
  • Roger Plamondon, Home Depot's Regional Development Director, Eastern Canada.
(Note: *Representatives of each company subject to change) We've kept pricing down for another year: HARDLINES subscribers pay only $179.00 plus taxes. Non-Subscribers pay only $285.00 plus taxes. For more information on these business-building events, contact Isabel Bisong at the World Headquarters: 416-489-3396 or
VANCOUVER — West Fraser Timber had fourth-quarter earnings of $41 million on sales of $552 million. Earnings were up, from $34 million, against slightly lower sales of $467 million. For the year, earnings were $212 million on sales of $2.40 billion. This compares to earnings of $43 million on sales of $192 billion in 2003. Lumber EBITDA for the quarter, after accounting for duties, was $55 million or 17% of sales, up from $41 million or 14% of sales in the fourth quarter of 2003.EAU CLAIRE, Wis. — Menards, the third-largest home improvement dealer in North America, says it will relocate a plant that makes store fixtures to Belgrade, Minn. The retailer claims that the state of Wisconsin has refused to issue building permits requested by Menards to consolidate its existing plant at its headquarters complex. Menard's reportedly found Wisconsin's Department of Natural Resources difficult to negotiate with. The DNR had refused to grant the permits. DNR spokesperson Dave Weitz said he's familiar with only one permit Menards requested recently, which involves a warehouse to be built in a wetland.ATMORE, Ala. — Marvin's Building Materials, one of the 100 largest home improvement dealers in the U.S., has opened its newest store at the site of a former Kmart here. The 35,000-square-foot store, Marvin's 23rd, includes an attached garden centre and a drive-through lumberyard. Unlike other lumberyards in the area, the Marvin's outlet is geared primarily to serve DIYers. Leeds, Ala.-based Marvin's generated US$100.6 million in sales in 2004. ATLANTA — Newell Rubbermaid Inc. has entered into an agreement to sell off its Curver business to Jardin International Holding BV. Curver, the company's European indoor organization and home storage division, contributed approximately $140 million of revenue in 2004. The sale reflects Newell Rubbermaid's intention to divest itself of non-strategic businesses and concentrate on leveraging brand strength and product innovation in its core portfolio of businesses. The transaction is expected to close in first quarter 2005, subject to regulatory approvals. This transaction will not impact 2004 results. LONDON, U.K. — In its fourth quarter, Kingfisher plc had a 7.1% sales increase to £1.76 billion, from £1.65 billion in 4Q 2004. Same-store sales were up 0.6%. For the year, sales were up 8.7% to £7.65 billion, up from £7.04 billion, while same-store sales rose by 3.9%.
Denis Lanoë has moved from CanWel Distribution, where he served as general manager for Atlantic Canada, to take over as general manager of Sodisco-Howden Group for Quebec and Atlantic Canada. He will work out of Sodisco-Howden's Victoriaville offices ... Mark Fortin has been appointed director of finance at Sodisco-Howden. He was formerly assistant comptroller ... Pierre-Claude Bourke has been named director of HR ... They both join Serge Tremblay, recently appointed vice-president of marketing, in Sodisco-Howden's Montreal offices.At Newell Rubbermaid Inc., Ray Johnson has been promoted to president global manufacturing and supply chain. In this newly created position, Johnson will oversee the continued global implementation of the company's productivity program, Newell Operational Excellence, as well as manufacturing, purchasing, distribution and transportation ... Nathaniel Milburn has been hired as vice-president global licensing, responsible for identifying strategic licensing opportunities for the company's brands to further develop the company's pipeline of innovative new products. Both men report to Joe Galli, CEO of Newell Rubbermaid.
WASHINGTON — The housing industry in the United States continues to churn out new homes at a record pace. The U.S. Commerce Department reported that housing starts in January were at their highest estimated annualized rate in 21 years. The seasonally adjusted rate rose 11.6% over January 2004 to 2,159,000 starts. Single-family start jumped 12.5% to 1,760,000 units. Building permits, a harbinger of future construction activity, grew by 6.8% to 2,105,000.
The composite price index for non-residential building construction reached 130.1 in the fourth quarter, up 1.3% from the third quarter and 8.6% higher compared with the fourth quarter of 2003. This year-to-year percentage increase was mainly due to higher prices for construction materials and was the highest measured since the 10.2% advance in the second quarter of 1982.

****HARDLINES MARKETPLACE**** Don't miss the products and services on the Hardlines web Marketplace: And check out Hardlines Classifieds on the web: HELP WANTED


We are a leader in the manufacturing, supply and distribution of brand name hardware & tools in the Canadian marketplace. We require a dynamic sales professional to join our team.

 This position calls for a highly organized self-starter to plan, implement and execute sales strategies for new business and existing account base in the province of Alberta. Your primary focus will be to create, drive and execute sales strategies to increase profitability through increased sales and market share of our product line. A Bachelor degree in business administration with a major in marketing coupled with 3 years experience preferably in the tool/hardware industry and a demonstrated track record of sales successes and new business development is required. If you are aspiring to work for an industry leader and to take your career to the next level you are invited to submit your resume in confidence to: (

********************************************************************************** SERVICES OFFERED  


We are looking for commissioned reps in the paint and sundry market/building yard market. Territories available: Ontario and Quebec. The product line includes a full product mix of latexes that is well positioned for growth in these markets. A full merchandising package with current distribution in place is available. Please reply in full confidence to - quoting BOX 802 (

**********************************************************************************    WHETHER OR NOT IT GETS PAINFUL IS UP TO YOU.

Sterling CommerceUCCnet services compliance is being strongly encouraged by retailers from Wal-Mart® to The Home Depot® because it makes supply chains more efficient. But implementation can be challenging. Sterling Commerce will guide you through every step. To find out more, click here for a free copy of, "Data Synchronization: From Compliance to Collaboration." ********************************************************************************** RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America's leading manufacturers, managing their lines for Canada's top hardware retailers, big boxes and mass merchandisers. Contact Dave Leslie at 905-702-9443, to find out how Noral can boost your sales in Canada. (01/05)  




Manchester Tank NORTH AMERICA'S "PREMIER MANUFACTURER" of Propane Cylinders

NOW available in Canada

(5 lb. through 420 lb. propane cylinders available)

. Recognized Market Leader . . Unsurpassed Quality . . Reliable Delivery . . Outstanding Customer Service . Contact us today for more Information
Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2005 by Michael McLarney. HARDLINES™ the electronic newsletter Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: Beverly Allen, Director of Sales & Marketing: Isabel Bisong, Circulation Manager: ______________________________________________ THE HARDLINES "FAIR PLAY" POLICY: Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week - but let us handle your internal routing from this end! ______________________________________________ Subscription: $241 (Canadian subscribers add $16.87 GST = $257.87 per year/ GST #13987 0398 RT). Secondary subscriptions at the same office are only $38 (Canadian subscribers add $2.66 GST = $40.66). Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to Hardlines/McLarneyCom.