Canada’s electronic news service for the home improvement industry
February 26, 2001
Volume vii, #8
Michael McLarney, Editor & Publisher
Phone: 416.489.3396
Fax: 416.489.6154
email: mike@hardlinesfax.comhardlines.ca
* * * * * *
IN THIS ISSUE:
* Cologne Fair draws Canucks amidst continued
consolidation of European market
* Home Depot sales up 19% in 2000
* Retail sales up in 2000
* Home Depot CEO announces retirement
* * * * * *
COLOGNE HARDWARE FAIR FEATURES MODEST
CANADIAN PRESENCE AMIDST CONTINUED RETAIL CONSOLIDATION
Last week’s International Hardware Fair in Cologne, Germany, was host to 3,800 exhibitors, 53,000 visitors – and untold rumours. The European market is still bracing for the anticipated arrival of Home Depot, where, like in Canada, it is expected to arrive through acquisition. Key targets of such a takeover include Castorama, the DIY division of Kingfisher, which also owns Réno-Dépôt in Canada.
Other rumours involve Home Depot's potential merger of number one European player OBI’s big box stores in Germany. Home Depot appears best suited to follow Wal-Mart’s strategy of securing a local merchant that has knowledge of the market and can hasten the giant’s successful entry into Europe.
Meanwhile, European retailers focus on expansion into other countries, such as OBI’s move into southern Europe and now China, where it has one store. Baumax, one of the top 10 in Europe, has 117 stores and while not the market dominant, is securing a stronghold in smaller countries where it positions itself as a market leader.
Canadians’ willingness to take a more global view of the marketplace appears to come in fits and starts. Attendance by Canadian manufacturers was down this year over last. A group stand hosted by External Affairs Canada featured only 12 exhibitors, down from as many as 25 in years past. However, the companies that did exhibit were unanimous in their positive response to their involvement.
Jayne Seagrave from Vancouver Tool Corp. has in fact been busy throughout Europe. She began by establishing contacts at the DIY Show in the U.K. earlier in the month. Then she flew to the Cologne show as a first time exhibitor. Here she made a connection with supplier that will package her company's product in Europe to regional specifications.
She still has her sights set on the U.S., so she raced back to the west coast in time for a 20-minute appointment at Home Depot's open to buy day in California at the end of the week.
From the buyer side, a number of major retailers were conspicuous by their absence. Aside from Sears Canada, which brought a coterie of buyers, and Réno-Dépôt, a number of large Canadian retail players failed to send anyone to search out new ideas, new products or new merchandising on behalf of their stores. “We think it's the best show for us,” says Eric Scrafield, national business manager for Sears Canada’s Craftsman Home Team. “There's more to see – more products, more innovations and more ideas – and a show is about ideas and about building future relationships.”
Even TORBSA, an Ontario buying group comprising 50 contractor-oriented yards, saw the value of sending a representative, Don Bastien from Target Building Supplies in Windsor, ON was in town for all four days of the show.
The two key shows on the international market are coming down to Cologne and Chicago, which hosts the National Hardware Show each August. But even the frequency of these events is coming into question, as large manufacturers, notably Bosch and Black & Decker, now alternate their presence between each show from year to year.
A manager for the Cologne Hardware Fair indicated that large scale changes are planned for next year's show to accommodate those vendors that exhibit only every two years.
______________________________________________
HOME DEPOT YEAR END REMAINS
STRONG DESPITE 4Q SLOWDOWN
Sales growth continued for Home Depot Inc. in 2000, but that growth came largely in the first half of the year – and from the addition of new stores. For the fiscal year ended Jan. 28, 2001, sales worldwide increased 19% to US$45.7 billion, compared with US$38.4 billion for the same period a year earlier. The company’s profitability was also healthy, up 11% to US$2.6 billion, from US$2.3 billion for fiscal 1999. Same-store sales rose 4% in 2000, lacking the benefit of both last year’s Y2K uncertainty and two hurricanes, which caused tremendous devastation in many southern U.S. states.
Sales for the fourth quarter of fiscal 2000 totalled US$10.5 billion, an increase of 14% over the fourth quarter of 1999. However, the company was faced with a 20% profit decline for its fourth quarter. Sales during the period rose 14% to US$10.46 billion, from US$9.17 billion, but same-store sales were flat. The company said these were hurt by 2% deflation in lumber pricing, which reached an eight-year low during the quarter.
According the Home Depot's new president and CEO, Robert Nardelli in prepared statement, “The uncertainty of the current economy continues to put tremendous pressure on consumer spending. However, we are confident of our ability to control operating expenses while rolling out major innovative merchandising and customer service programs and opening 200 new stores during the coming year.”
______________________________________________
INSULATION AND HEATING SMARTS GET
BEST NEW CANADIAN PRODUCT AWARD
Canadian innovation got the nod in a tied decision for Best New Canadian Product Award at this year’s Canadian Hardware and Building Materials Show. Heat-Line Corp. and Ever Ready Closures Inc. beat out nearly 100 other new products entered in the competition, which was sponsored by the Canadian Hardware and Housewares Manufacturers Association.
Heat-Line was a recipient for its Paladin-I, a self-regulating heating cable system that microscopically compensates for temperature variables and prevents the formation of ice and snow on roofs and freeze-up in pipes.
Ever Ready received the award for its Fire Rated Retrofit Door Kit, which converts existing doors into 20-minute fire-rated doors. This DIY product also increases the insulating value of existing doors and helps to eliminate drafts and noises.
The competition was limited to firms exhibiting at the show. All entries had to be manufactured in Canada and have gone into production in the last 18 months.
______________________________________________
COMPANIES IN THE NEWS
Sales in 2000 climbed 10% for Wal-Mart to US$56.56 billion from US$51.39 billion. The Wal-Mart stores segment saw sales rise 12% to $35.48 billion and the Sam's Club unit recorded sales of US$7.48 billion, up 6.1%. Sales at the McLane Co. unit, a convenience-store distributor wholly owned by Wal-Mart, jumped 28% to $3.54 billion, while the international segment turned in sales of $10.06 billion, up 2.2%. Same-store sales rose 3.1%, with the Wal-Mart stores reporting a 3% increase and the Sam's unit up 3.3%. Wal-Mart is reportedly also in negotiations to enter the Philippines with a regional headquarters and stores.
Kingfisher Plc in the U.K. is considering the selloff of its German electrical division, Wegert, which bleeding red ink, says a Reuters report. Kingfisher is focussing on the operation of its DIY chains, Castorama and B&Q.
Rona held an open house on February 22 to promote recruitment for 600 new jobs at the following L’entrepôt stores in Québec: Anjou, Laval, Mascouche, Saint-Laurent, Brossard and Saint- Bruno-de-Montarville.
Emco Ltd. announced fourth quarter and year end results for the year ended December 31, 2000, reporting a net loss for the fourth quarter of $1.9 million, compared with a loss of $0.8 million for the same period last year. Emco's total sales for the fourth quarter were $302 million, a decrease of 3%, compared with $311 million in 1999. For the 12-month period, net earnings were $1.8 million, versus $10.7 million in 1999. Sales were $1.25 billion, flat compared with the previous year.
______________________________________________
CANADIAN STOCK WATCH
Canada’s electronic news service for the home improvement industry
February 26, 2001
Volume vii, #8
Michael McLarney, Editor & Publisher
Phone: 416.489.3396
Fax: 416.489.6154
email: mike@hardlinesfax.comhardlines.ca
* * * * * *
IN THIS ISSUE:
* Cologne Fair draws Canucks amidst continued
consolidation of European market
* Home Depot sales up 19% in 2000
* Retail sales up in 2000
* Home Depot CEO announces retirement
* * * * * *
COLOGNE HARDWARE FAIR FEATURES MODEST
CANADIAN PRESENCE AMIDST CONTINUED RETAIL CONSOLIDATION
Last week’s International Hardware Fair in Cologne, Germany, was host to 3,800 exhibitors, 53,000 visitors – and untold rumours. The European market is still bracing for the anticipated arrival of Home Depot, where, like in Canada, it is expected to arrive through acquisition. Key targets of such a takeover include Castorama, the DIY division of Kingfisher, which also owns Réno-Dépôt in Canada.
Other rumours involve Home Depot's potential merger of number one European player OBI’s big box stores in Germany. Home Depot appears best suited to follow Wal-Mart’s strategy of securing a local merchant that has knowledge of the market and can hasten the giant’s successful entry into Europe.
Meanwhile, European retailers focus on expansion into other countries, such as OBI’s move into southern Europe and now China, where it has one store. Baumax, one of the top 10 in Europe, has 117 stores and while not the market dominant, is securing a stronghold in smaller countries where it positions itself as a market leader.
Canadians’ willingness to take a more global view of the marketplace appears to come in fits and starts. Attendance by Canadian manufacturers was down this year over last. A group stand hosted by External Affairs Canada featured only 12 exhibitors, down from as many as 25 in years past. However, the companies that did exhibit were unanimous in their positive response to their involvement.
Jayne Seagrave from Vancouver Tool Corp. has in fact been busy throughout Europe. She began by establishing contacts at the DIY Show in the U.K. earlier in the month. Then she flew to the Cologne show as a first time exhibitor. Here she made a connection with supplier that will package her company's product in Europe to regional specifications.
She still has her sights set on the U.S., so she raced back to the west coast in time for a 20-minute appointment at Home Depot's open to buy day in California at the end of the week.
From the buyer side, a number of major retailers were conspicuous by their absence. Aside from Sears Canada, which brought a coterie of buyers, and Réno-Dépôt, a number of large Canadian retail players failed to send anyone to search out new ideas, new products or new merchandising on behalf of their stores. “We think it's the best show for us,” says Eric Scrafield, national business manager for Sears Canada’s Craftsman Home Team. “There's more to see – more products, more innovations and more ideas – and a show is about ideas and about building future relationships.”
Even TORBSA, an Ontario buying group comprising 50 contractor-oriented yards, saw the value of sending a representative, Don Bastien from Target Building Supplies in Windsor, ON was in town for all four days of the show.
The two key shows on the international market are coming down to Cologne and Chicago, which hosts the National Hardware Show each August. But even the frequency of these events is coming into question, as large manufacturers, notably Bosch and Black & Decker, now alternate their presence between each show from year to year.
A manager for the Cologne Hardware Fair indicated that large scale changes are planned for next year's show to accommodate those vendors that exhibit only every two years.
______________________________________________
HOME DEPOT YEAR END REMAINS
STRONG DESPITE 4Q SLOWDOWN
Sales growth continued for Home Depot Inc. in 2000, but that growth came largely in the first half of the year – and from the addition of new stores. For the fiscal year ended Jan. 28, 2001, sales worldwide increased 19% to US$45.7 billion, compared with US$38.4 billion for the same period a year earlier. The company’s profitability was also healthy, up 11% to US$2.6 billion, from US$2.3 billion for fiscal 1999. Same-store sales rose 4% in 2000, lacking the benefit of both last year’s Y2K uncertainty and two hurricanes, which caused tremendous devastation in many southern U.S. states.
Sales for the fourth quarter of fiscal 2000 totalled US$10.5 billion, an increase of 14% over the fourth quarter of 1999. However, the company was faced with a 20% profit decline for its fourth quarter. Sales during the period rose 14% to US$10.46 billion, from US$9.17 billion, but same-store sales were flat. The company said these were hurt by 2% deflation in lumber pricing, which reached an eight-year low during the quarter.
According the Home Depot's new president and CEO, Robert Nardelli in prepared statement, “The uncertainty of the current economy continues to put tremendous pressure on consumer spending. However, we are confident of our ability to control operating expenses while rolling out major innovative merchandising and customer service programs and opening 200 new stores during the coming year.”
______________________________________________
INSULATION AND HEATING SMARTS GET
BEST NEW CANADIAN PRODUCT AWARD
Canadian innovation got the nod in a tied decision for Best New Canadian Product Award at this year’s Canadian Hardware and Building Materials Show. Heat-Line Corp. and Ever Ready Closures Inc. beat out nearly 100 other new products entered in the competition, which was sponsored by the Canadian Hardware and Housewares Manufacturers Association.
Heat-Line was a recipient for its Paladin-I, a self-regulating heating cable system that microscopically compensates for temperature variables and prevents the formation of ice and snow on roofs and freeze-up in pipes.
Ever Ready received the award for its Fire Rated Retrofit Door Kit, which converts existing doors into 20-minute fire-rated doors. This DIY product also increases the insulating value of existing doors and helps to eliminate drafts and noises.
The competition was limited to firms exhibiting at the show. All entries had to be manufactured in Canada and have gone into production in the last 18 months.
______________________________________________
COMPANIES IN THE NEWS
Sales in 2000 climbed 10% for Wal-Mart to US$56.56 billion from US$51.39 billion. The Wal-Mart stores segment saw sales rise 12% to $35.48 billion and the Sam's Club unit recorded sales of US$7.48 billion, up 6.1%. Sales at the McLane Co. unit, a convenience-store distributor wholly owned by Wal-Mart, jumped 28% to $3.54 billion, while the international segment turned in sales of $10.06 billion, up 2.2%. Same-store sales rose 3.1%, with the Wal-Mart stores reporting a 3% increase and the Sam's unit up 3.3%. Wal-Mart is reportedly also in negotiations to enter the Philippines with a regional headquarters and stores.
Kingfisher Plc in the U.K. is considering the selloff of its German electrical division, Wegert, which bleeding red ink, says a Reuters report. Kingfisher is focussing on the operation of its DIY chains, Castorama and B&Q.
Rona held an open house on February 22 to promote recruitment for 600 new jobs at the following L’entrepôt stores in Québec: Anjou, Laval, Mascouche, Saint-Laurent, Brossard and Saint- Bruno-de-Montarville.
Emco Ltd. announced fourth quarter and year end results for the year ended December 31, 2000, reporting a net loss for the fourth quarter of $1.9 million, compared with a loss of $0.8 million for the same period last year. Emco's total sales for the fourth quarter were $302 million, a decrease of 3%, compared with $311 million in 1999. For the 12-month period, net earnings were $1.8 million, versus $10.7 million in 1999. Sales were $1.25 billion, flat compared with the previous year.
______________________________________________
CANADIAN STOCK WATCH