John Caulfield, Contributing Editor
 vol. x, #8 February 23, 2004

IN THIS ISSUE: * Expo and Home Depot cross-over: more to come * Canadian Tire still working out the bugs in newest concept stores * Lowe's makes licensing deal with Michael Graves: why it matters * Rona hints at new store concept, expects more acquisitions * Huttig Building Materials ends 2003 with strong numbers * North American buyers prepare for Cologne Fair * Wal-Mart plans giant 50-acre large facility * Blue Mountain buys up IHDG * ILDC's new member marks new direction for group * TruServ restructures to serve dealer growth

* * * * * * NOTE: Dollar amounts are stated in the currency of the country from which the story originates. — Michael McLarney, Editor & Publisher * * * * * *
"Experience is the name everyone gives to their mistakes." — Oscar Wilde
SPECIAL REPORT — A lot of eyebrows have been raised over the installation of two standard Home Depot stores in California that incorporated a number of elements of Home Depot's sister chain, Expo Design Centers. However, according to the president of Expo, it may just be part of a larger trend. After all, the introduction of more and more "soft DIY" assortments into the traditional stores already signals a new direction for Home Depot.In fact, the first appearance of linens, window treatments and towels was in two stores in Canada, specifically Yorkdale and Leaside, both in Toronto. "You see bits of Expo in Canada," says Annette Verschuren, president of both Expo and Home Depot's Canadian division. She goes on to note that there's a tremendous opportunity to sell more than just the materials used to build and renovate. "The opportunity is inside the home and Home Depot is really moving to serve that décor segment." Verchuren says she's seen a distinct trend among homeowners to "reward" themselves with a more pleasing living environment. What Expo offers, she adds, is more and more complimentary to the traditional stores, "in that it's serving a customer that's higher end, aiming at households that earn $100,000 or more." And even though expansion of Expo has stalled for the year ahead, Verschuren is confident that opportunities for growth exist for the chain — both in the U.S. and Canada.
CHESTERFIELD, Mo. — Huttig Building Products, the 54-branch building materials distributor based here, reported a 14% gain in sales to $230.3 million for the quarter ended Dec. 31, 2004. That was the highest revenue the company has generated in that quarter since 1999. It also reported quarterly net income of $1.6 million, vs. zero dollars for the same period a year ago.For its fiscal year, Huttig, which distributes into 46 states, saw its sales rise 4% to $909.3 million (after two consecutive years of sales declines), and its net income improve to $3.4 million, vs. a loss of $11.7 million in fiscal 2002. Huttig has also negotiated new revolving credit terms with its lenders. Through a "lockbox" arrangement, Huttig can draw funds for general business purposes as long as the funds in the lockbox don't dip below a monthly average of $20 million. The company also announced that, henceforth, it would report its debt as a long-term — as opposed to a current — liability. Michael Lupo, Huttig's CEO, projects that sales in 2004 will reach between $950 million and $975 million, despite his belief that homebuilding in the U.S. will tail off this year. The company's growth is expected to come primarily from expansion of its product lines and value-added services, about which Lupo was not specific.
MOORESVILLE, N.C. — Lowe's Co., the industry's second-largest home improvement dealer, has joined forces with Masco's Delta Faucet division to introduce a line of kitchen and bathroom faucets under the label of designer Michael Graves. The Graves brand is probably best known among shoppers of Target, where it's present on an innovative line of housewares products. The Michael Graves Collection that Lowe's will sell and Delta will produce, includes a full range of kitchen, bar and bathroom faucets, as well as bathroom accessories and, via special order, a Roman-style tub. According to a statement issued by both companies, the faucets will range in price from $112 to $222. This line extension can be seen in the larger context of Lowe's ongoing effort to develop proprietary product lines under designer brands such as Alexander Julian.
TORONTO — Canadian Tire's newest store program, called Concept 20/20, is not being rolled out in full force — at least, not yet. Mark Foote, president of Canadian Tire Retail, the company's largest division, spoke to analysts at the recent CIBC World Markets Conference about the challenges in getting the 20/20 format fine-tuned. The program, which moves space from the warehouse into retail, expands departments such as KD furniture, décor, and sports wear and work wear, and sharpens its appeal to women shoppers with more high-end kitchenwares and appliances, is now in four stores, with 13 more planned for the year ahead. The next will be an 85,000-sq.ft. outlet in Kingston, Ont., followed by Kirkland, Que. and Mississauga, Ont. One problem of the expansion, though, is cannibalization of sales from existing stores. Foote called it a part of the growth process of the company, a part that requires constant monitoring of the impact on same-store sales for existing dealers. "We're watching that as we move forward with the expansion." Foote noted that the new concept pays special attention to the needs of the female of the household, with greater emphasis on housewares, lighting and seasonal. "Lawn and garden is a very fast growing business for us," said Foote. However, all the bugs have yet to be worked out of the new-format stores, says Foote. "The new 20/20 format is not firing on all cylinders yet. We've got a few things to fix." Canadian Tire opened 19 new stores in 2003, bringing the total of new-concept stores to 309. It plans to open 20 more in the year ahead, including 13 Concept 20/20 stores.
MARKHAM, Ont. — In a time when buying groups are aggressively vying for members, one group is particularly careful about admitting anyone new to its ranks. Independent Lumber Dealers Co-operative has barely two dozen members — and likes it that way — since those members represent some of the largest independent dealers in the country. So the addition of a new member to this exclusive organization would be newsworthy anytime, but the recent signing of Chouinard Brothers/Gibson Building Supplies has added significance. First of all, this company is actually two vertically integrated businesses. Chouinard Brothers is a 40-year-old roofing company, while Gibson, barely three years old, is a specialty building supplies dealer with two outlets, specializing in — you guessed it — roofing materials. "We're a very non-traditional member, no doubt," admits Larry Shanks, president of Chouinard Brothers/Gibson Building Materials. He says Gibson is a contractor-driven business, and is, in fact, Chouinard's own biggest customer. "We make ILDC even more of a major buyer on roofing," he says. Second, ILDC's newest member gives that group a foothold in the Greater Toronto Market, where a void has existed since Lansing Buildall, which had eight stores throughout the GTA, was bought up by Rona Inc. in July 2001. Besides the Markham store on the north end of Toronto, which opened in 1999, another location just opened in December 2003 in Milton, to the west. Shanks was already familiar with ILDC from his days on the other side of the negotiating table; he spent 12 years at CRC, and just before joining Chouinard Brothers he spent three years as vice-president and general manager of GAF Canada. Gibson won't ever become a broad-line LBM dealer, says Shanks, "but it will be a major mover of commodity products."
MONTREAL — Even though it failed to recruit Irly Distributors to its ranks, Rona Inc. continues to look for more acquisitions, and has the credit facilities to do it. Robert Dutton, president and CEO of Rona, has also hinted at the development of a new store format. Designed for markets outside of Quebec, it will replace the Rona Regional format, a "mini' big box that has proven highly effective as a dealer-owned concept in Rona's home province. At around 20,000-40,000 sq.ft. in size, the format will be a cross between a big box and a convenience hardware store, Dutton says, suitable for markets not large enough to support a large-format store. It's being tested in Quebec right now, and aimed at the repair and reno market, in place of the Regional stores in Quebec. Flush with the signing of its first two independent dealers in Western Canada, Dutton says he wants to sign another 50 new dealers by the end of the year. "We have a lot of potential in the West and Ontario," says Dutton. "I can recruit 50 dealers, but I'm really tough on credit, really tough on loyalty," he stresses. "I'm not looking for just any dealer. I want dealers who will be cutting edge, market leaders."
TORONTO — dmg worldmedia, an international exhibition and publishing company, has finalized a previously announced deal with Home Depot Canada, securing the country's largest home improvement retailer as the category-exclusive sponsor for all dmg's consumer Home Shows in 2004. The deal, worth what dmg calls a "seven-figure partnership agreement," will provide Home Depot with access to more than one million attendees through 13 shows across the country during the current year. Using an interactive booth to help attendees plan home improvement projects, Home Depot has put together a full-time "Home Show team," which will work with associates in each market to staff the shows. Cities on the Home Show circuit include Calgary, Edmonton, Ottawa, Montreal and Toronto. Using the slogan, "Stop Dreaming and Start Planning," the Home Depot booth features vignettes of a bathroom, kitchen, workshop, and deck and provides product ideas for homeowners who can do it themselves or make use of the retailer's professional installation service, At Home Services.
SPECIAL REPORT — Buyers and vendors from across the United States and Canada are preparing to gather in Cologne, Germany next month for the world's largest hardware and home improvement show. We're also getting a lowdown on some of the buyers heading off to Cologne from this side of the pond. Home Depot is rallying its troops for the German visit, including George Murphy, merchant for fasteners and builders' hardware, and Dwayne Goodwin vice-president merchandising for hardware. In addition, buyers from Home Depot Canada are reportedly heading over. Canadian Tire is sending a group, under the aegis of Dean Andrey, category manager for power tool accessories and tool storage, while Home Hardware Stores is sending Don Kenesky, plumbing buyer, and Ken Friedmann, buyer for hand and power tools. More than 70,000 visitors are expected in total at this year's International Hardware Fair/Practical World, which will be held March 14-17. Opportunities there to meet face-to-face with key buyers will range from the traditional — meetings, chance or otherwise, in-booth — to the irreverent (watch for Canadian buyers and vendors who will gather on the steps of the Dom Cathedral at 4 p.m. on the Saturday before the show for an informal Canuck-style "pub crawl"). New this year, Hardlines will host a "Meet the Buyers Luncheon" onsite at the Cologne Fair at noon on Monday, March 15. Sponsored by KoelnMesse, the Cologne international trade fairs organization, it will feature a group of European and U.K. buyers in search of new products and suppliers, who will be on hand to meet vendors over lunch and cocktails. Vendors from North America may pre-register for this important first-time event by contacting Nancy Wright here at the World Headquarters: 416-489-3396. On a much more informal basis, Hardlines will sponsor another Canada Night Reception on Sunday, March 14. This one's free, again kindly sponsored by Koelnmesse. Call us if you didn't get your invitation!
WINNIPEG, Man. — TruServ Canada has restructured its member development and member services departments in an effort to generate growth with both new and existing members. The result is a national recruitment team that has three components. The first is a business development team to call on potential new members for all three of TruServ's banners, namely True Value, V&S Department Stores and Country Depot. This team of "national growth managers" will be responsible for business development and retail partnerships. The second part of TruServ's growth initiative involves the development of a national business consulting team to drive growth and profitability of its 700-plus existing stores. This will include working in a business consulting role with existing member stores, and providing project leadership to handle new member training, new store set up and existing member renovations. The growth in TruServ's dealer ranks has also necessitated the beefing up of its support desk at the Winnipeg head office. (See People on the Move in this issue for appointments related to TruServ's restructuring.)
TORONTO — The beleaguered Imperial Home Décor Group, one of the largest suppliers of wallcoverings in North America, has agreed to sell its assets to Blue Mountain Wallcoverings, based here, for an undisclosed sum. New York-based IHDG, which has struggled under bankruptcy protection, is being merged with a manufacturer and distributor that has more than 30 years experience, and is one of the world's largest contract printers of wallpaper. The combined company will be known as Blue Mountain Wallcoverings, with a national accounts office in Cleveland, a factory in Quebec and a distribution center in Knoxville, Tenn. Blue Mountain will continue to make and distribute its own line of wallcovering brands, which include Sanitas, Sunworthy, Imperial, Katzenbach & Warren, and Sterling Prints. The company also distributes its collections through two divisions, Olney Wallcoverings in the U.S. and Beauport Wallcoverings in Canada. In addition, IHDG brings a number of licensing agreements to the deal.
Canadian Tire 44.25 27.85 42.70
Canfor 13.30 7.60 12.93
Costco 39.50 27.00 38.18
Goodfellow 16.00 9.75 15.75
Home Depot 37.89 21.45 35.70
Hudson's Bay 14.15 7.75 13.63
Lowe's Cos. 60.42 34.83 58.38
Rona Inc. 35.00 12.26 34.90
Sears Canada 21.50 13.60 17.27
Sodisco-Howden 3.35 1.30 3.07
Taiga Forest 8.10 6.31 8.00
Wal-Mart 60.20 46.50 59.43
West Fraser 39.99 29.25 39.00
BENTONVILLE, Ark. — Wal-Mart Stores saw 4Q profit increase 11% to $2.7 billion, while sales in the quarter were up 12% to $74.5 billion. Same-stores sales rose 4.8%. For the year, Wal-Mart earned $9.05 billion, up from $7.96 billion. Revenue rose to $258.68 billion from $231.58 billion in 2002.HOFFMAN ESTATES, Ill. — Sears Hardware stores are getting a makeover, with the addition of heavy appliances in 35 of its stores. Parent Sears, Roebuck & Co. says the remaining 103 Sears Hardware outlets will start selling appliances by the end of the year. Sears has historically been the number-one appliance seller in the U.S., with 41.6% of that market in 2003. But the number-two player is Lowe's, who has been closing the gap, with 14.1% last year, along with rival Home Depot, whose share climbed to 6.2%. EASTLEIGH, U.K. — Kingfisher plc, Europe's leading home improvement retailer, saw total sales grow 13.7% to £1.6 billion during the fourth quarter ended 31st January 2004, while same-store sales increased by 4.5%. NORWALK, Conn. — The Paint & Decorating Retailers Association has announced it will roll its annual Paint and Decorating Show into the 2004 National Hardware Show, May 10-12 at the Sands Expo and Convention Center in Las Vegas. For more than 55 years, PDRA has staged the premier trade event for paint and sundries manufacturers and retailers in the United States. It is moving from its previous March 2004 venue in Las Vegas. Now, this event will be part of the National Hardware Show, starting with May 2004. CHICAGO — Grainger, a distributor of facilities maintenance supplies, has unveiled a new product comparison feature on its website, to help customers shopping online for industrial maintenance products by allowing them to view multiple products and their attributes on one page. Grainger generated $479 million in sales through the Internet in 2003. TORONTO — Staples Business Depot has joined a national program called Charge Up to Recycle!, which helps consumers recycle used portable rechargeable batteries at the office products retailer's 220 stores nation-wide. The program provides disposal for used portable rechargeable batteries and for batteries commonly found in cellular and cordless phones, laptop computers, cordless power tools and camcorders. The Charge Up to Recycle! program is operated in the U.S. and Canada by the Rechargeable Battery Recycling Cooperation, a non-profit public service organization. HOUSTON, Tex. — Wal-Mart intends to build a giant, 2-million-sq.ft. distribution center in Chambers County, which will be one of the largest import centers in the country. Sitting on more than 230 acres, the building itself will cover about 50 acres of land under one roof. Construction is slated to begin this summer. ATLANTA — Home Depot is partnering with Maytag to become the exclusive retail partner to sell Maytag's new SkyBox, a home beverage machine. SkyBox vendor units will be available at Home Depot stores nationwide beginning March 1. The estimated retail price of the SkyBox vendor unit is $607. Smaller than a traditional vending machine, the new device can hold 64 12-ounce cans, 32 12-ounce bottles or a combination of each, dispensed from four selection buttons. Front and side panels can be customized on the front and side panels with sports logos. MINNEAPOLIS, Minn. — Homax Products Inc., part of Harbour Group Ltd., has been sold to Olympus Partners for more than $100 million. Homax's home care products include Goo Gone, Homax, Oops! and Rhodes American.
Leon Penchuk, formerly at Convex Systems Ltd., has joined Burlington Merchandising & Fixtures as director of store development & design. His retail planning background includes a background working at Ace Hardware Canada and The Watt Group, where he worked on the original Do it center program. (905-467-6881)Jim Johnston, formerly of McDonald Sales, has joined Xtreem Sales as sales manager for Ontario. A number of changes have been made at TruServ Canada, effective March 1, to accommodate newly announced restructuring there: To accomplish these initiatives, the following appointments have been made effective March 1, 2004: Janice Mundell, formerly format marketing manager for the Country Depot banner, has been promoted to national growth manager, Country Depot. She reports to Tony DiEmanuele, vice-president, business development & growth. Mundell will continue to work from TruServ's Kitchener, Ont. office ... Hugh Matson, formerly regional manager (East), has been named manager, store projects & renovations, reporting to Ray Falkenberg, vice-president, sales, operations & member relations, and based in Winnipeg ... Wilf Gerhardt, formerly regional manager (West), has been appointed regional manager, sales, operations & member relations (West), also reporting to Falkenberg. (204-453-9511) David Creglia, formerly vice-president marketing at Globe Electric, has left the company. No replacement has been named as yet.
WASHINGTON — The sizzling pace that the home construction industry has set for the rest of the economy cooled off a bit more than economists expected in January, when housing starts fell 7.9% below December 2003, to an annualized rate of 1.90 million units. That's still 4.1% higher than the rate in January 2003, but could be a sign that building activity is beginning to level off.The National Association of Home Builders, in fact, estimates that housing starts in 2004 will be around 1.79 million units. However, the group also reports that its housing market index (an index of current sales, expected sales and buyer traffic) is now at its lowest level since July. The cold weather across the country was fingered by housing experts trying to explain January's homebuilding freeze. For example, residential construction in New England, where the winter has been severely cold this year, was off 14% in January. The Midwest incurred an even steeper decline, at 21%. However, housing experts still expect 2004 to be the second-best year for new and existing home sales in the country's history, following a record-breaking 2003. A lot will depend on mortgage rate stability: the average 30-year mortgage is now 5.66%, and some economists are predicting that could increase to 6.5% by year's end.
In 2003, consumers paid an average of 2.8% more for the goods and services in the Consumer Price Index basket than they did in the previous year. This rise was slightly larger than the 2.2% annual average gain in 2002, and similar to the increase of 2.6% in 2001. Most of the upward pull in 2003 occurred in the services sector, where prices rose 3.6% on average. In comparison, prices of goods, which are influenced much more by the impact of the stronger Canadian dollar, increased only 1.9%.Homeowners' replacement costs, which represent the expenditures necessary to compensate for house depreciation, and are estimated using new housing prices (excluding land) — were up 6.4% on average, the strongest increase since 1989. The rate of increase in the index has been accelerating in the last four years, as the housing market in Canada has been heating up, helped by low interest rates.
Hardlines will host its third annual Meet the Buyers Breakfast Seminar, April 28, 2004. Canadian Tire and Home Hardware have already agreed to join us, but watch for more details. To register, contact Nancy Wright; or 416-489-3396.
"Home Shows provide a self directed permission marketing environment where consultative selling takes place." — Using the latest media-speak, James Peterson, president of Quantum Marketing, says something about the deal putting Home Depot Canada in Home Shows across the country.

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

SENIOR MANAGEMENT OPPORTUNITIES TruServ Canada, a 100% Canadian-owned cooperative, has two exciting employment opportunities available! We provide hardware and general merchandise product and support programs for approximately 675 True Value Hardware, Country Depot and V&S Department stores across Canada.
  1. Regional Manager, Sales, Operations & Member Relations (East) ­ Responsibilities include: maximizing Corporate and Member growth, profitability and market share within the region through existing Member stores; leading and managing the District Managers to achieve store growth, retail, wholesale and profit objectives ­ this includes directing, training and leading the Member to participate and execute the essential retail programs for the specific banner; managing the existing base of stores through the District Manager, and through store visits, by working closely with the District Managers, including travelling with them and developing their skill sets. This position is based in our Kitchener office.
  2. National Growth Manager, True Value / V&S ­ Responsibilities include: Creating a professional business development and recruitment process coordinating all aspects of prospecting; researching and enhancing the True Value / V&S retail brands for future market development inclusive of marketing/advertising/communications, building décor, and small to large prototype models ­ this includes the conceptual development of prototype stores (by size); implementing an Active Brand Management process that targets prototypical markets and enhances brand equity. This position is based in our Winnipeg office.

Please visit our web site for more details on these two positions, including qualifications required. Interested candidates may submit a resume via email: or confidential fax: (204) 453-9414. ********************************************************************************** RETAIL ACCOUNTS EXECUTIVE

Master Lock, an industry leader in the security hardware industry, is seeking a Retail Accounts Executive.

A strong understanding of the retail market is a must, along with at least 3 years experience with large retail national accounts, specifically in the hardware wholesalers and warehouse home centers. Preference given to candidates with;

  • 5 years overall marketing/sales experience including preparatory field sales and marketing assignments,
  • proficiency in Microsoft Office,
  • exposure to key accounts’ vendor software,
  • fluent French.

Education equivalent to college degree required, preferably marketing or business administration.

Master Lock Canada is conveniently located in Oakville. Nearby highway access includes the QEW at Winston Churchill and 403 at Dundas Street.

Qualified applicants should send resume via email to No phone calls please. ********************************************************************************** QUEBEC BASED SALES REPRESENTATIVE One of the largest plumbing manufacturers is in need of a sales representative to take full advantage of Quebec market based opportunities.

Responsibilities include managing and directing the sales process for various Quebec based accounts, including buying offices targeting Consumer sales areas. On the Retailer's behalf, you'll provide leadership into all category management issues including competitive positioning, sales data and forecasting, and cross-selling opportunities. You'll work with a cohesive, dynamic team on product development, packaging, and PK/educational requirements. Looking for an employer who continually demonstrates a commitment to teamwork and partnering with Retailers in their competitive position? To explore these opportunities in complete confidence, please contact Diana @ Human Resources. Interviews will be held during the weeks of February 16th and February 23rd. Email: ********************************************************************************** PRODUCTS OFFERED      
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