RONA CEO expects growth unhindered by slowdown

MONTREAL—Even as the first signs of a slight economic slowdown appear in the Canadian economy, including a fall off this year in housing starts, RONA inc. expects to continue growing at a rapid rate, says the company's president and CEO. Robert Dutton, speaking to more than 900 dealers and staff at the group's recent dealer market in Montreal, said, "Conditions do seem right for us to continue our growth." Despite suggestions of a slowdown, Dutton assured the group that RONA is well-positioned to weather any storm. "At RONA, it is not the economic conditions that affect us. We decide where we want to go." With $450 million in debentures and more than half a million dollars in unused credit, he said the company is able to finance that expansion. Most recently, the group has added 19 new affiliate stores to the RONA network, adding nearly $102 million to overall annual retail sales. Ten of the 19 new affiliates are in Ontario, three in Nova Scotia, two in Saskatchewan, one in British Columbia, one in Alberta, one in Manitoba and one in Quebec. With the addition of these stores, RONA has recruited 35 dealers in 2006, for total additional retail sales space of 305,000 square feet and some $197 million in additional retail sales. In 2004, RONA recruited 25 affiliate stores, representing retail sales of $105 million. In 2005, 31 affiliate stores joined, for an additional $191 million in retail sales. The recruitment campaign is part of the company's 7-07 program, which aims to add  $2 billion to RONA's annual retail sales in two years, bringing the network to $7 billion by the end of 2007. "We're expecting $400 million of those additional sales to come from newly recruited affiliates," said Claude Bernier executive vice-president of proximity and specialized stores, "and so far we're right on target to achieve our goal."

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Don Nash to leave TIM-BR MARTS

MISSISSAUGA, Ont.—Don Nash, long-time president of TIM-BR MART Ontario and most recently executive vice-president of TIM-BR MARTS Ltd., is leaving the company effective the end of 2006. Nash, who spent 25 years with the Ontario buying group Homecare Building Centres, was instrumental in converting his dealers to the TIM-BR MART banner, and became a vp when the group officially merged with Calgary based TIM-BR MARTS Ltd. two years ago. In what turns out to be a timely move, Nash has also been named to receive this year's Industry Achievement Award from the Lumber and Building Materials Association of Ontario. Looking back over his tenure at Homecare and TIM-BR MARTS, Nash is proud of his accomplishments, which include Homecare's sponsorship of the Toronto Blue Jays, the adoption of the Air Miles reward program, and the establishment of the commercial and industrial division, C.I.D. But he is especially gratified by the success of the TIM-BR MART merger. "My goal was to get the Homecare members transitioned to TIM-BR MART and that has happened," he says. "The transition has been good for the dealers, as they can enjoy lower costs, higher rebates, and they have the opportunity to build the national brand." Nash, who was in charge of recruitment and dealer programs for the group, intends to look for further opportunities within the industry. He expects his position at TIM-BR MART to be filled next by someone in a marketing role.

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Quebec's first Home Depot Urban store on track

PTE-CLAIRE, Que.­— Home Depot's first "urban" style store will is getting through planning and zoning issue, but is on track to open early in 2008. The store will be located in an existing retail mall/power centre. According to Home Depot spokesperson Nick Cowling, some refitting is needed to the site, but when it's finished the store will be exceed 70,000 square feet. Because of its urban location, where real estate costs are typically at a premium, this store, like its predecessors, will be on two levels. Home Depot has urban stores in Chicago and New York, while the prototype urban store in Canada is in the Park Royal power centre in West Vancouver. Meanwhile, Home Depot continues to open traditional stores, though smaller than in the past. The latest, which opened earlier in December in Collingwood, Ont., is only 80,000 square feet in size, but more suitable for this small tourist community.

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Home Depot extends credit-card benefits

ATLANTA — Holders of Mastercards bearing Home Depot's name will soon be eligible to redeem gifts and other rewards from the ThankYou Network, a free rewards program where members earn points for using participating credit cards to shop, bank or book travel. The products and gifts that are redeemable, according to its website, include electronics, toys, trips, sporting goods, jewelry and home living items such as appliances. This move essentially extends Depot's strategic alliance with Citigroup, the credit card provider that offers and manages the ThankYou program. In this latest agreement, Home Depot Rewards card members can continue to earn two points for every dollar spent at one of the retailer's home centers or Expo Design Center locations. And now, they'll be able to earn one ThankYou Point per dollar spent on all other purchases made with their card in the US. In addition, card members earn bonus points with their first purchase equivalent to a US$25 gift card reward. The transition to the ThankYou Network will be made in the spring of 2007. News of this agreement was first reported on wisemarketer.com's site.

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European retail group adds Italy and Spain to ranks

BERLIN — EDRA, the European DIY Retailers Association continues to grow. The association, an umbrella organization representing retail associations in countries throughout Western Europe, is adding Spain and Italy's associations to its ranks. EDRA, which originated five years ago when the German and French associations joined forces, now comprises retail associations in 14 countries. The group's head general secretary is John Herbert, who is also head of the German group, BHB. Herbert's background includes running Knauber, at the time one of Germany's most innovative home improvement retailers — in fact, a prototype Canadian Home Depot store that opened last month just west of Toronto features innovations that were developed more than a decade ago by this regional chain. He then moved to California as vice-president of Home Depot's Expo Design Centers, before returning to Germany to head up the German group. As front man for Europe's DIY, hardware and home improvement retailers, he has become an important spokesperson for that retail sector in a consolidated European Union. "EDRA provides major networking among nations and offers a strong voice against EU legislation," he told Hardlines.

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Stock acquires Phoenix-based framer

PHOENIX — Stock Building Supply, the Raleigh, N.C.-based pro dealer, gave itself an early Christmas present by acquiring Tondo Verde Construction, a framing company based here, as well as Tondo's Precision Forest Products four-acre yard. Terms of the purchase were not disclosed. Tondo, a five-year-old company with 172 employees, generated $37 million in sales in 2005. This acquisition follows on the heels of Stock's purchase of the pro dealer Kempsville Building Materials in November. All told, Stock operates 322 locations in 34 states, making it the industry's largest pro dealer.

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Home Depot resists attempts to alter board

ATLANTA—Home Depot has received notice from Relational Investors, LLC, an investment firm, that Relational intends to submit a proposal at Home Depot's next annual meeting. The proposal will request that the board of directors appoint a special committee of independent directors to evaluate the strategic direction of Home Depot, assess the performance of management, and consider strategic alternatives. Relational calls this proposal part of an "advocacy program" and it plans to solicit proxies to have its proposal adopted. Relational says it may nominate one or more directors for election at the 2007 annual meeting to further its cause. In addition, Relational is seeking a meeting with Home Depot CEO Bob Nardelli and members of the board. Meanwhile, Home Depot insists it has done a strategic review of its own and sees no need for further evaluation. It will therefore oppose Relational's resolution and proxy solicitation. According to a release from Home Depot, the company's board of directors unanimously supports the management team and its current plan "to continue enhancing value for all shareholders through the execution of its current strategy". That plan includes, most recently, the issuing of $5 billion in debt and a $3 billion accelerated share repurchase program. In fact, concerns that Home Depot is gradually moving to be taken private are being sparked by the aggressive rate of its share repurchases. This year alone, it has repurchased $6.7 billion of stock, representing 173 million shares. Home Depot has purchased more than 450 million outstanding shares since 2002, or roughly 19% of shares.

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