vol. ix, 8 February 24, 2003

* TruServ establishes distribution in Southern Ontario * Réno-Dépôt ends strong year, remains under scrutiny of UK parent * Kent's Valcour decries flagging support for CHS * Sodisco-Howden's purchase of Ace closes * Emco to be sold to U.S. company * Retail sales advance 6% in 2002

"Leave earlier. Drive slower. Arrive alive." — electronic message over Highway 401 in Toronto
Join Hardlines in Cologne during Practical World, the International Hardware Fair/DIY'TEC, for the 4th annual Canada Night Reception on March 9, 2003. The show, March 9-12, 2003, has become a major draw for Canucks. Kolsch is on us! If you don't have tickets to Practical World yet - call Barbara Hills, Canadian Sales Representative, at 416-598-3343 or email b.hills@koelnmessenafta.com today. — Michael
London, UK - Kingfisher, Europe's largest home improvement and household retailer, and number three in the world after Home Depot and Lowe's Cos., ended the year with a 10.8% increase in sales. Its home improvement division, comprising Castorama Group and a stake in Hornbach, a German big box chain, grew by a healthy 18% in 2002, from £5.8 billion (CDN$13.9 billion) to £6.8 billion (CDN$16.3 billion), despite a tough consumer market in many parts of Europe. But a number of units in Castorama's international division are still under review, including Réno-Dépôt in Canada. Kingfisher has already stated it will consider selling off its holdings in any country where it is not the industry leader. However, in Canada, where Réno-Dépôt is the number three big box player, after Home Depot and Rona's big box stores, it remains a profitable operation, with overall sales up an estimated 7.3% in 2002. Kingfisher's decision to drop the chain will have more to do with its desire to focus on Europe and Asia. With sales hitting an estimated $786.5 million in 2002, Réno-Dépôt remains profitable, even though same-store sales were down somewhat in the fourth quarter year over year, a strong 4Q in 2001 made the latest results a tough act to follow. In fact, Réno-Dépôt's same-store sales were "in line" with the international division's, at around 5%. Despite a U.K. report that Réno-Dépôt may be sold off, its future is far from conclusive. Any plans will be the result of Kingfisher's review of its international operations, which is expected to conclude sometime in March. Réno-Dépôt opened only one store last year, a Building Box in Windsor, ON, bringing the chain to 20 outlets. Plans for continued expansion will be unveiled sometime next month.
Winnipeg, MB — TruServ Canada continues to consolidate its presence in Central Canada with the establishment of a distribution centre in Kitchener, ON. The 236,000-sq.ft. facility has been leased by the hard goods wholesaler to support the addition of 150 stores in Ontario, acquired when it purchased the retail division of Growmark earlier this year. The distribution centre will service 150 Country Depot and FS co-op stores, which comprised Growmark's former retail division. "We will also use the facility to handle certain other merchandise for our member stores," says Léo Charrière, president of TruServ Canada. TruServ already has 140 True Value and V&S member stores of its own in Ontario. TruServ has seen the Growmark acquisition as a key strategic step in increasing its critical mass as a contender to be a hardlines supplier coast to coast. The move will consolidate its presence in Canada's largest province, eventually giving it quicker access to customers in Atlantic Canada. Sixteen people have been brought over from Growmark to join the new TruServ team, including a buying team that will operate out of Kitchener, overseeing pet and farm products for all of TruServ (see People on the move). Growmark will sub-lease part of the new distribution centre to handle agro products for its own farm co-op outlets. The Growmark deal may be the beginning of a trend, as TruServ keeps its eye open for more acquisitions. "We are looking for more," says Charrière.
Markham, ON — Sam's Club, Wal-Mart's club store banner, will have both the "treasure hunt" approach to merchandising and a range of fixed merchandise when it arrives in Canada. Speaking last week at a breakfast meeting of the Canadian Hardware and Housewares Manufacturers Association, Randy Edwards, senior vice-president of Sam's Club Canada, explained that continually bringing in new merchandise appeals to the impulse nature of club shopping. "For our personal members, it's all about change," he says. But the club's business members come to rely on consistency of supply on certain products and supplies. "For our business members, it's a little more static. They don't like change." The seasonal changes in Canada are ideal, he says, for the "treasure hunt" aspect of club shopping. "Our policy is 'early in, early out.' This is especially important in seasonal. We'll change seasons earlier than anyone else." Edwards expects Sam's to break ground on its first stores sometime next month, with an estimated six stores opening by September or October of this year. The first stores will be in the Greater Toronto Area. While there are already 61 Price Clubs in Canada, he says the country can sustain another 40-60 club stores.
Saint John, NB — Large shows such as the Canadian Hardware Show and the U.S. National Hardware Show are important for smaller retailers, says Stew Valcour, general manager of Kent Building Materials. The otherwise taciturn head of Kent becomes quite outspoken when railing at the lack of support given to these shows. Their demise, he says, will deprive independents of important venues for networking and sourcing new products."These shows are not in the interest of the big boys," he says, "and they'll find a way to shoot the shows down." He insists the lack of support is a calculated move, one that will leave independents without a show of their own seriously hindered. Both CHS and NHS in Chicago have faced criticism for falling attendance. At this year's CHS, 13,426 people registered, down 20% from 16,985 a year earlier, despite a range of show programs and special buys. "The big players, such as Home Depot, Rona and even Home Hardware, don't need the Canadian Hardware Show," he continues, "but it's the only place for smaller guys like us to find new products and new ideas, so it puts us at a competitive disadvantage." Valcour's company, a business unit of J.D. Irving, is no small potatoes in its own right. With sales estimated at around $250 million, it's one of the 10 largest home improvement dealers in the country. it's the largest member of the Independent Lumber Dealers Co-operative. It now has 22 stores, since the addition of three former Pro stores in Edmunston, NB. However, its sales are still only one-third those of Réno-Dépôt, while the combined sales of Home Hardware's dealers is nearly 14 times greater, with a show of its own. Valcour sent his buyers to walk CHS, following ILDC buyer meetings held in Toronto during the time of CHS.
Canadian Tire 33.65 23.96 29.10
Canfor 11.70 6.83 9.35
Costco 46.90 27.09 30.00
Emco 16.90 7.25 16.49
Goodfellow 13.99 9.69 10.95
Home Depot 52.60 20.10 22.41
Hudson's Bay 15.55 5.87 8.75
Lowe's Cos. 49.99 32.50 36.02
Rona Inc. 14.75 11.75 14.00
Sears Canada 25.10 15.15 17.38
Sodisco-Howden 2.20 1.06 1.50
Taiga Forest 7.00 5.05 6.50
Wal-Mart 63.94 43.72 48.90
West Fraser 44.42 28.90 40.00
2022841 Ontario Inc., has made a bid to purchase Emco Ltd. The numbered company is an indirect division of Delaware-based Blackfriars Corp., is a substantial privately held investment company with major interests in manufacturing and wholesale distribution. The tendered price is $285 million in cash, or $16.60 per share, which offers a 12.5% premium on Emco's February 19 closing price of $14.75 a share. The deal has been accepted by the Emco board and by its largest shareholder, Masco Corp., which owns about 42% of the company and which has been seeking to sell off its investment since last year. The deal, subject to due diligence and approval by the Competition Bureau, is expected to close by the end of March 2003. The purchase of Ace Hardware Canada by Sodisco-Howden Group, announced in October 2002, has finally closed. In the deal, that got stalled by the Canadian Competition Bureau during the holiday season, Sodisco-Howden struck an alliance with Ace Hardware Corp. of Oak Brook, IL to buy up all issued and outstanding shares of the Canadian subsidiary. Net sales for Canfor grew in the fourth quarter to $480.5 million, up $22.9 million over the same quarter in 2001. For the full year, the company's profit fell to $11.5 million, down from $26.4 million in 2001. Net sales for 2002 were $2.11 billion, up $126.6 million. Budget Canada has signed a five-year deal with Canadian Tire to install car rental kiosks in 100 Canadian Tire stores across the country. The program will roll out over the next 12-24 months. People who get their cars repaired at Canadian Tire, as well as Auto Club members, will get discounted rental rates. Rona Inc. has opened its first store under the Rona Building Centre banner. The 40,000-sq.ft. former Rona Cashway in Midland, ON is similar in concept to Rona's Québec banner, Rona l'express Matériaux, but with a more distinct focus on contractors, tradespeople and heavy DIYers. The 40,000 sq.ft. store carries 20,000 SKUs, and includes a building materials warehouse, a "Tool Zone" for electric and manual tools, and specialty boutiques for paint, floor coverings, kitchens, and doors and windows. Wal-Mart's net sales for the year ended January 31, 2003 were up 12.3% to US$244.524 billion. Net income for the year was US$8.039 billion, up from US$6.671 billion. Earnings in the fourth quarter ended January 31 reached US$2.53 billion, compared with US$2.19 billion a year earlier. Sales for the quarter were US$71.07 billion, up 10.7% from $64.2 billion a year earlier. Benjamin Mooore has been voted Canada's most trusted brand in paint, according to the third annual Reader's Digest Trust Poll. The survey, which looks at the level of trust Canadians place in different professions and brands, asked respondents to assess factors such as honesty, integrity and product quality. In preparation for the busy Spring season, Home Depot is looking for an additional 60,000 part-time staff for its 1,500 stores North America-wide. The giant retailer has entered into an initiative with the U.S. Department of Labor, using the agency's career centres to recruit. Wal-Mart has opened a new export office at its Arkansas headquarters to identify U.S. products that can be shipped worldwide. The new office, "GP USA Export," is a branch of Wal-Mart Global Procurement, an internal buying agency formed by the company in 2002. Wal-Mart Global Procurement has sourcing offices in 17 countries, working directly with Wal-Mart merchandise buyers in the States, Puerto Rico, Canada, Mexico, Argentina, Brazil, China, Korea, Japan, the U.K. and Germany.
A separate buying team has been established for TruServ Canada's new distribution centre in Kitchener, ON. That team, which moved over from Growmark Canada, is led by Tammy Maddock, senior merchandise manager. She was formerly buyer for lawn and garden at Growmark … John Inglis has been appointed buyer for pet supplies … John Templar and Shawna MacNeil are in charge of purchasing for farm. (905-826-0200) Chris Henwood has joined Prosel Marketing as sales manager. He was formerly senior buyer for home décor at Ace Hardware Canada. (416-661-1414) Rob Capiello has moved over from his role as publisher of Home Channel News, the U.S. trade magazine for the home improvement industry, to work for Reed Exhibitions. He is now industry vice-president, in charge of the National Hardware Show, which is held in Chicago each August. (203-840-5493)
Retail sales reached $306.4 billion in 2002, an increase of 6.0% from 2001, says Stats Canada. While retail sales growth was sporadic over the year, retailers managed to post their second largest annual sales increase in five years, thanks to strong gains from October 2001 to January 2002. Year-over-year sales of existing homes in Canada fell 13.3% in January, even as housing prices continued to rise, says the Canada Real Estate Association. The number of existing homes sold last month dropped from 20,236 to 17,552 units, compared with January 2002. However, the average selling price increased by almost 10% from January 2002. Wholesalers posted a seventh consecutive monthly increase in their sales in December, with sales reaching $36.1 billion, up 0.3% from November. Wholesale sales of lumber and building materials had the strongest growth in December of the 11 trade groups tracked by Statistics Canada, growing 3.2%. This rebound follows a 2.1% drop in November. For the year, wholesale sales were up 6.2%, compared with only 2.5% in 2001. U.S. wholesalers posted a 1.5% gain in 2002. The group of about 80 large retailers in Canada had sales increase 6.1% in 2002, says Statistics Canada, surpassing the healthy 5.6% gains in both 2000 and 2001. These retailers represent about 38% of total annual retail sales, excluding recreational and motor vehicle dealers. Sales in December reached $10.2 billion, up only slightly from December 2001. Home furnishings and décor were up 7.8% year-over-year, while hardware and lawn and garden products were up 4.5%. The U.S. Commerce Department reports that housing starts stayed high in December, at a rate of 1.850 million units seasonally adjusted. That's up 0.2% from 1.847 million units in December 2001.
The Canadian Professional Sales Association is developing an on-line directory of manufacturers' agents called agentSource. The directory will be available to government trade agencies, particularly in the U.S., that seek to source Canadian manufacturers' agents in a wide variety of industries. A listing in agentSource is free. Profile forms available at www.cpsa.com/PDFFolder/AgencyProfile.pdf.

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HELP WANTED AREA GENERAL MANAGER A visionary leader to optimize marketing strategies at our Customer Service Centre, Brampton (Greater Toronto Area), ON. Weyerhaeuser Company Limited — a Fortune 200 company — is a major, dynamic player in the integrated forest products sector. With numerous operations across Canada and the US, Weyerhaeuser is one of the largest organizations of its kind worldwide. Our Building Materials division has an annual volume of $160 million. You will be called upon to support, measure and ensure the effective execution of business strategies. You will assume full accountability for the division’s financial performance by managing the overall operations, including: Sales & Marketing; Administration; Warehousing & Delivery; and Asset Management. Your passion for financial excellence is coupled with a demonstrable ability to deliver it. We envision you as someone who accepts accountability for results and embraces change as a competitive advantage. Capable of developing and implementing a customer-focused strategy and organizational culture, you bring to this key role: · building materials management experience · proven leadership capabilities · well-developed business acumen as evidenced by your ability to analyze and implement financial/strategic plans. For information on Brampton, please visit www.city.brampton.on.ca. If you are interested in joining a world-class organization that believes in safety and employment equity, and offers a competitive salary and a full range of benefits, then consider this opportunity with Weyerhaeuser. Please submit a résumé, citing job number #000784/HAR (essential), to: Weyerhaeuser Company Limited, Recruiting, Staffing & Diversity. Fax: 206.374.2210; email (with résumé contained in the body of the message, not as an attached file): resume@weyerhaeuser.com. Weyerhaeuser is an Equal Opportunity Employer building a capable, committed, diverse workforce representative of the communities we serve. This position is open to those legally entitled to work in Canada. www.weyerhaeuser.com NATIONAL SALES MANAGER—CANADA Air King Limited, a leading and growing Manufacturer of Consumer Ventilation & Humidification Products since 1961, is currently seeking a National Sales Manager — Canada. This senior-level individual must have the ability to initiate, expand and maintain relationships with primary retail customers and retail buying groups. The person will call on national retail accounts and manage a network of successful retail sales representatives. Candidate must have 3-5 years of retail customer sales experience preferably with seasonal products. Communication ability, analytical/organizational skills, effective computer use, and leadership qualities are essential. Minimum expectation is an undergraduate degree; MBA is preferred. Travel required. We are prepared to offer an attractive starting salary plus a comprehensive benefit package. If interested, send your Resumé with salary history to: Air King Limited, 110 Glidden Road, Brampton, ON L6T 2J3. Fax: (905) 456-1015; Attention: Human Resources Department. No Phone Calls Please. ***********************************************************************************  ONTARIO SALES REPRESENTATIVE Leading manufacturer of Flooring Related Products has an immediate opening for an ONTARIO SALES REPRESENTATIVE. The ideal candidate will have 3-5 years of sales experience as well as a post-secondary degree/diploma in a related field. Your sales background will include thorough knowledge in sales forecasting/budgeting as well as call reporting using the MS Office Suite. You must have strong communication and interpersonal skills, the ability to recognize customer and market needs and a proven ability to follow up and close on those opportunities. This position is best suited to individuals who possess mechanical/technical aptitude and who feel comfortable demonstrating products and various applications. Knowledge of the Flooring Industry would be an asset. A clean driving record and the ability to travel within Ontario is a must. If you feel you are qualified for this role, please email your resumé, along with income requirements bev@hardlines.ca (put Box 317 in the subject line) or fax c/o Box 317, 416-489-6154. *********************************************************************************** SALES REP AND TRAINER Cognicase-Omni, the largest provider of Turn-Key Management Solutions for the Hardware and Building Supply Industry, is now expanding by opening an office in the Vancouver area. We are looking for career minded individuals who enjoy working in the hardware and building material business and have an interest in assisting dealers by providing management solutions. Computer experience is not necessary but preference will be given to those that have industry experience and want to work closely with a proven Software system. Positions are available in Sales and Training. Please submit a resumé by email to Frank Rizzo, frizzo@attcanada.ca

*********************************************************************************** REP/AGENCY WANTED Polar Distribution is looking for reps calling on the electrical distributors and retail electrical departments. We are introducing a new ETL/CSA approved mounting block (e-mount) for exterior applications for light fixtures and electrical receptacles.

Please forward your companies details to dynamics@rogers.com. Click on www.polardistribution.com for product details.


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Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2003 by Michael McLarney. HARDLINES™ the electronic newsletter hardlines.ca Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: mike@hardlines.ca Beverly Allen, Marketing Manager: bev@hardlines.ca Nancy Wright, Circulation Manager: nancy@hardlines.ca ______________________________________________ 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: $199+$13.93 GST = $212.93 per year (GST #13987 0398 RT). Secondary subscriptions at the same office are only $34 + $2.38 GST = $36.38. 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 McLarneyCom.