| NEW CANADIAN SHOW SEEKS INDUSTRY COLLABORATION |
| ATLANTA — The newly reformed trade show for home improvement retailers in Canada is getting closer to its "launch" date under a new name and owner. Now called H2X, it's being held in conjunction with a show for the paint and décor industry, called D2X, that's being put on by the Paint and Decorating Retailers Association. The new combined event will be held at the Toronto Congress Centre near Pearson International Airport from February 20-22, 2005. According to Messe Frankfurt, the German trade show organization that owns H2X, 149 exhibitors are registered, many of them displaying under the PDRA's aegis.In fact, one décor company alone has about 30 booths. James Mumby & Associates will represent 14 companies, including its own Dynamic Paint Products line. Geoff Fleming, Dynamic brand manager, says the company has a lot of new products to showcase, in what it calls its line of "paintware," accessories and sundries for all aspects of paint preparation and application. "We determined that we were positioned with good quality and a decent price in the Dynamic line, with a lot of innovative products." The upcoming show will be a good venue for featuring a range of new or recently launched products, he says.Although other exhibitors have had misgivings, resulting in some cancellations, the current number of 149 exhibitors is up from 142 a month ago. Still more are waiting until the last minute, says Daniel MacKinnon, director of North American Trade Shows for Messe Frankfurt, which is based in Atlanta. "We're feeling really positive," he notes.
"We would have liked to have more hardware people exhibiting at the show, but we think they're sitting on the sidelines, taking a 'wait-and-see' attitude." MacKinnon says, admitting he can't blame their reticence. "I hope they will see a need for this show and take part in 2006. We have to prove ourselves, and we hope that we will."
Pre-registration has so far reached 723 retail and designer guests. These include contractors and home builders, who have not been excluded from attending. But the show's change of date (the former Hardware Show always began on the first Sunday of February) has affected other groups, such as the Independent Lumber Dealers Co-operative. The giant buying group typically holds its winter buying meetings at the same time as the show. This year, says ILDC general manager Andrew Battagliotti, the group couldn't change its dates. Therefore, a formal contingent of Canada's largest independent retail groups can't be counted on to attend.
However, the show's organizers also hope to beef up the event with a full seminar program on February 19, the day before the show opens. In addition, heavyweight breakfast speakers have been lined up. Robert Dutton, president and CEO of Rona inc., will speak on February 21, and Bill Morrison, chief officer of TruServ Canada, will get up on the podium the following morning. There's been a lot of positive response to the seminars, MacKinnon adds, especially the paint and window seminars.
MacKinnon says Messe Frankfurt is keen to collaborate with other groups, and cites the success of PDRA's support. "We're going to sit down with exhibitors and get a round table of the most influential people in the industry and ask them what they want. Do they want us to do this show, do they need this show?" Those are the questions, he says, Messe Frankfurt needs answers to if it's going to grow the show. |
| CHHMA FOLDS SHOW GALA, BEEFS UP OWN AGM |
| SCARBOROUGH — In anticipation of its own upcoming annual general meeting, the annual gala dinner presented by the Canadian Hardware and Housewares Manufacturers Association will not be held this year. Traditionally held during the time of the former Canadian Hardware and Building Materials Show, the event brought together industry leaders while raising money for Easter Seals. Since that show has folded, CHMMA has chosen not to mount another gala during the time of the new show, H2X. Instead, the association will hold a dinner after its own AGM on April 6, 2005. The dinner will feature David Chilton, author of "The Wealthy Barber."According to Steve Johns, communications manager for CHMMA, a number of other topics will be covered during the day, as well. Donald Drummond, senior economist for TD Bank, will return to offer an overview of economic conditions in the country. Joel Marks, director of merchandising for hardlines at Home Hardware Stores Ltd., will be the featured retail speaker. A series of breakout sessions will address topics ranging from sales and marketing to effective hiring practices. |
| WHAT'S THE FUTURE FOR HOME DEPOT'S EXPO? |
| ATLANTA — When Home Depot officials recently gave investors and analysts a sneak peek at the company's financial targets for 2005, no mention was made of Expo Design Center, the 52-unit home décor chain initiated in 1991, whose future continues to be evaluated by company officials.Information about the Expo stores is still posted on Home Depot's website, and Expo still has a significant presence in California (where it operates 14 stores), Texas, Illinois and New York (where it has five in each state). But this concept remains in expansion limbo. The Cincinnati Business Courier reported last week that an Expo that was scheduled to open in that market this spring in the suburb of Oakley, Ohio, remains a vacant lot.Nobody from Home Depot or its Expo division was available for comment. However, last October, Verschuren told the Atlanta Journal-Constitution that Home Depot was committed to serving customers whom Expo targets. In addition, elements of Expo have been finding their way into Home Depot's urban neighborhood stores, a trend that is likely to continue, according to Bob Nardelli, Depot's chairman and CEO.
During that interview, Verschuren noted that the retailer has been making improvements in Expo's service levels, primarily by using call centers to track fulfillment of orders. Some stores have experimented with new merchandise assortments that include bedding, mattresses and furniture. The company claims that its Expo division is profitable (although it does not break out sales and operating profits), but it still seems to be retooling this concept's operations and product selection. |
| RONA DEVELOPS PRIVATE LABEL POWER TOOL PROGRAM |
| BOUCHERVILLE, Que. — With input from the buying expertise of buyers from its Réno-Dépôt division, Rona inc. will ramp up its private label offerings in power tools.The first big push takes place this spring, with the introduction of 13 SKUs of power tools, tailored for both trade and DIY customers. The line, bearing the "Rona" name, replaces an existing Rona private label program. "But it wasn't well-positioned," says Jean Lamarche, Rona's merchandise director for hardware, paint and décor, who was part of the Réno-Dépôt buying team when the chain was bought by Rona. "They saw what I had developed for Réno-Dépôt and said, 'we want that for Rona — get going!" This time, the line is being sourced by Rona directly from the Orient.Rona's Réno-Dépôt division has its own power-tool line, called McAllister. Originally a brand found at Kingfisher stores in the U.K., it reflects Réno-Dépôt's connection with its former owners. The brand will continue for now, says Lamarche.
Rona's mix of private label products was up to about 11% of its inventory in 2004, up from about 9-10% the year before. The company wants to get that level up to 15% within two years. |
| BARGAIN BUILDING CELEBRATES ANNIVERSARY WITH 20TH LOCATION |
| RIVIÈRE-AU-RENARD, Que. — Bargain Building Materials has marked its 20th year in business with the recruitment of its latest dealer. Marcel Dumaresq, a building center operation in Quebec's Gaspesie region, becomes the fifth authorized Bargain retailer, under a kind of franchise agreement that gives the dealers a banner and private label merchandise program.Bargain also has a chain of 15 corporately owned stores.The newest dealer, located in Quebec's Gaspesie region, brings Bargain's total number of stores under its banner to 20. For Armand Dumaresq, vice-president of Marcel Dumaresq, the attraction to Bargain's program included the growing regional awareness of the banner, improved purchasing power, and a greater selection of product.
"We ... are marketing five lines of products that are in high demand by do-it-yourselfers and contractors: recycled paint and accessories, MDF mouldings, electrical and cordless tools, imported hardware and floor coverings, which include floating floors, wood floors and self-adhesive tiles," says Dumaresq, in a prepared release.
The family owned, one-store operation is now in its fourth generation.
Bargain has big plans to continue expansion, not just in Québec (under the banner, "Matériaux à bas prix"). It has two stores in Ontario. It added four stores last year in Quebec, and signed its first dealer in Atlantic Canada, in Summerside, P.E.I.
"We hope to add from four to five each year," says Christian Richer, president of Bargain Building Materials. He adds that growth will focus on Eastern Canada, at least for now. "It's not time to go west yet," says Richer. |
| ACE IN TALKS WITH CANWEL TO GROW CANADIAN PRESENCE |
| CHICAGO — Representatives from Ace Hardware Corp. have maintained involvement with Sodisco-Howden Group following the Canadian hardware distributor's sale to CanWel.Rob Collins, director, international sales and retail development for Ace, says the strategic alliance established with Sodisco-Howden to license the Ace name remains in place. He met with executives from Sodisco-Howden in Montreal last week.Sodisco-Howden got the Ace name in Canada when it purchased the operations of Ace Hardware Canada two years ago. There are approximately 230 dealers in Canada flying the Ace banner. About 100 of those are Sodisco-Howden dealers who switched banners after the Ace acquisition. Under a strategy to eliminate some of its own banners, Sodisco-Howden converted a number of its dealers to Ace, reducing the number of its banners from five to just two, Pro and Ace.
Collins says Ace and Sodisco-Howden will work to grow the Ace banner on a couple of fronts. Ace will provide necessary retail programs to support dealer growth, while offering its expertise in merchandising, and its clout in sourcing, especially overseas. "We're putting the pieces in place for our two organizations to work together," he adds. |
| LONDON DIY SHOW GETS SUPPORT FROM NORTH AMERICAN EXPORTERS |
| LONDON, U.K. — As trade shows in Europe (like the big one, Practical World, in Cologne) shift to every-other-year schedules, the smaller DIY & Garden Show, held in London Jan. 16-18, grew substantially this year, and even added a new section "Totally Tools," which included power tool giants such as Black & Decker and Ryobi.Among the several hundred exhibitors were more than 34 members of the Worldwide DIY Council, which this year involved 20 members in its own pavilion, plus approximately 14 more who exhibited on their own or with local agents/distributors. In fact, Council members represented almost 10% of the total exhibitors.Pre-registrations for the show were considerably stronger than the year before, especially from other countries, reflecting the fact that this year there is no Cologne Hardware Fair. Traffic at the show remained steady right up to the final day.
Members of the Worldwide DIY Council reported holding interested discussions with potential distributors and agents, from countries that included France, Germany, Ireland, Spain, Sweden, Belgium, Scotland, Greece, Denmark, Wales and Slovenia.
With the dollar at such a low point against the pound and euro, both American and Canadian members found their products very attractively priced for European and U.K. customers.
Next year's DIY & Garden Show/Totally Tools again will be held at Earl's Court in London in mid-January. More details can be found at: www.diyandgardenshow.com. |
| CANADIAN TIRE CEO WINS PR AWARD |
| TORONTO — Canadian Tire got recognized recently for how well it communicates, both to the community and to its own people. The recognition came in the form of an award to Canadian Tire president and CEO Wayne Sales, who won an award for communications effectiveness.The award recognized Canadian Tire's — and Sales' — effectiveness creating and communicating a vision of what the company stands for, not only with the industry, but within the company to its own people.He got high marks for outstanding skills communicating to his team, with initiatives that included "Coffee with the CEO," ongoing informal meetings with random teams within the CT organization, plus 12-16 "state of the Tire" meetings over the course of a year.
Other considerations were Tire's charitable and community involvement, such as environmental stewardship and "Foundation for Families."
Sales' contract with Canadian Tire was renewed at the end of last year, and extended to June 30, 2007. |
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| COMPANIES IN THE NEWS |
| TORONTO — Home Depot Canada has informed Hardlines of some of the 19 openings that are scheduled for fiscal 2005. Here are the ones we know about so far: St-Jerome, Que., March; St. John's, Nfld., April; Toronto (Dufferin & Steeles — and not an urban store), April; Vaudreuil, Que., July; and Spruce Grove, Alta., in July. According to Home Depot, another 14 stores are slated to open in 2005, plus one relocation.BRAMPTON, Ont. — Henkel Canada, Consumer Adhesives will begin downsizing operations following the announcement recently that it will close its 225,000-sq.ft. manufacturing facility here by the end of 2005. The closure comes as a result of a global restructuring program. The Brampton facility manufactures adhesives and sealants primarily under the 128-year-old LePage brand. Its closure will impact approximately 140 employees. However, the company will continue to maintain sales, marketing, regulatory, and distribution offices in Canada. Its production will be integrated within other Henkel facilities. Henkel Canada is part of the Henkel Group, a German-based vendor of home care, personal care, adhesives, sealants and surface treatments with 50,000 employees worldwide, and 2003 sales of 9.4 billion euros.TORONTO — Wal-Mart Canada will start carrying a plant food made from organic waste that has been (ahem) treated by earthworms. TerraCycle Inc. claims to be the first company to make and package a product entirely out of waste, has received its first major retail order from Wal-Mart Canada. TerraCycle's plant food is produced by feeding organic waste to millions of earthworms, which transform the waste. The worm poop is liquefied and bottled in used soda bottles, many collected by elementary school students across North America.
MISSISSAUGA, Ont. — Fireco, the housewares and accessories supplier, has voluntarily filed for protection under the Companies Creditors Arrangement Act in the Ontario Supreme Court. The move comes on the heels of the loss of the Sobey's account after 40 years. Under the CCAA protection, the company is attempting to develop a restructuring plan. In the meantime, Fireco reports it will conduct "business as usual" for customers throughout the restructuring, although payments have been frozen to all existing Fireco creditors.
LONDON, U.K. — Kidde, the maker of fire safety products, is being taken over by United Technologies Corp., a U.S. industrial conglomerate. The deal is worth US$2.8 billion, and is expected to close around the end of March 2005. Until then, business will continue as normal, both here and abroad. UTC's portfolio includes Otis elevators, Carrier HVAC systems and Chubb electronic security.
CLEVELAND — The Sherwin-Williams Co. had consolidated net sales in the fourth quarter of $1.50 billion, up 16.7% from $1.28 billion in the previous year's fourth quarter. For the year, sales were up 13.1% to $6.11 billion. Net income increased 16.5% in the fourth quarter to $82.5 million. For the year, profits were up 18.4% to $393.3 million, from $332.1 million. The Paint Stores segment had a 4Q net sales increase of 22.8% to $1.02 billion, and 14.6% increase for the year to $3.98 billion.
ATLANTA — Home Depot has signed a deal with the producers of reality shows such as "Survivor" and "The Apprentice" to position the Home Depot name on its programs. Television company Mark Burnett Productions will ensure that Home Depot products and services get integrated into its programs. The terms of the deal, which spans a number of programs over several years, were not disclosed. Among the shows that will be included in the promotion strategy are "The Apprentice III" and a new program, "The Contender."
BRENTWOOD, Tenn., — Tractor Supply Co., the giant retail farm and ranch chain, had fourth-quarter net sales of $456.0 million, up 17.4% from $388.5 million in the previous year's fourth quarter. Same-store sales increased 7.7%, up from last year's 9.6% gain. Gross profit increased 18.6% to $145.4 million, while net income increased 32.0% to $22.3 million. During the fourth quarter, the Company opened 15 new stores and relocated another seven stores compared to two new and six relocated stores in the fourth quarter of 2003.
BENTONVILLE, Ark. — Sales at Wal-Mart grew by 9% in January, but same-store sales were a bit lower than expected, due mainly to performance by its Sam's Club stores. Total sales, including new stores, for the four-week period ended Jan. 28 rose 9% to $19.8 billion from $18.1 billion. Same-store sales grew 2.5%.
HOFFMAN ESTATES, Ill. — Sears, Roebuck and Co. had total domestic store revenues of $1.61 billion for January, up 1.7%. Same-store sales during the period were up 0.8%. Lawn, garden and reported increased sales, and so did tools and automotive. Specialty retail sales also strong in January, as the company reported sales increases for Sears Hardware, Orchard Supply and The Great Indoors.
HOLLAND, Mich. — Tomkins plc, through its Air Systems Components business, has acquired Milcor Inc. from Gibralter Industries. Terms of the sale were not disclosed. Milcor is a multi-brand manufacturer of building materials, selling to the U.S. residential and commercial construction markets. It operates two manufacturing facilities, in Lima, Ohio, and two in Bensenville, Ill., and employs about 350. It will be integrated into Tomkins' residential air systems business, Hart & Cooley. |
| PEOPLE ON THE MOVE |
| Serge Tremblay has joined Sodisco-Howden Group as vice-president marketing. He brings with him 23 years experience at Hudson's Bay Co., including eight years as Eastern Canada officer. He then spent time at Eaton's before that department store chain folded. Most recently, he was at Loblaw's, where he served as vp merchandising and marketing. (514-286-8986)Following the announced licensing of the Sunbeam brand for its own line of storage and organization products, Prime Way Corp. has hired Gail Jaseliunas as Canadian sales manager. She was formerly Canadian sales and marketing manager for Contact Brand shelf paper ... Bob McBride has been appointed director of the Sunbeam license, adding to his current duties as national sales manager. (905-732-5445)Scott Hoy, formerly publisher of Hardware and Home Centre magazine, a trade magazine serving the retail home improvement industry, has left the publication. No replacement has been named at this time. (416-442-5600)
Habitat for Humanity International, the faith-based organization that is one of North America's largest builders of affordable housing, has fired its founder, Millard Fuller, primarily because he was uncooperative during the several months the builder investigated allegations of his inappropriate conduct towards a female staff member. |
| MARKET INDICATORS |
| CMHC forecasts that new housing construction in Canada will likely slow this year and in 2006, but is expected to remain above 200,000 units during that time, says CMHC. Housing starts are expected to reach 216,300 starts, down from 2004's 17-year high of 233,431 units. It's forecast to dip further, to 201,100 units, in 2006. |
|
John Caulfield, Contributing Editor
vol. xi, #6, February 7, 2005
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