| HOME DEPOT EXPECTS HEALTHY SALES GROWTH FOR YEAR |
| ATLANTA — Home Depot held an investors' conference last week, in anticipation of the company's year end on January 31, 2005. Home Depot executives shared company projections for the year ahead, as well, with expected fiscal year 2005 sales growth of between 9% and 12% and earnings growth of 10%-14%. Same-store sales are expected to increase 4%-7%. The company also plans to update existing stores and add 175 new ones for a capital investment of $3.7 billion.However, the stated number of new stores for Canada was only 19, lower than the 25 already promised by Home Depot Canada president Annette Verschuren.During the conference, Home Depot also mapped out plans to expand its auto-replenishment programs, which promises to take more costs out of the supply chain. Currently some 10% of SKUs are on the program; by year's end, that percentage is expected to double.
The company also offered some expected results for fiscal 2004: sales growth of 12.5% to $72.9 billion; earnings per share of $2.26, an increase of 20%; same-store sales increase of 5%; and gross margin expansion of approximately 160-180 basis points. |
| LOBLAW TO RELOCATE GENERAL MERCHANDISE BUYING TO TORONTO |
| CALGARY — Grocery giant Loblaw is centralizing its operations to a new facility Southern Ontario, which means the company's general merchandise buying teams will relocate from here, where they currently operate within the company's West Fair offices.The Canadian grocery giant has been aggressively expanding its ranges of hard goods, including patio furniture, barbecues, kitchenwares and décor items, especially in its new Supercentres.Centralization of the Loblaw operations will take place at the new Weston Centre, in Brampton, about an hour north of Toronto, starting in June 2005. I don't know how many will actually make the move, but they are being offered a package to relocate. However, many had relocated just a few years ago, many from Toronto in the first place. During that time, housing prices in Toronto have skyrocketed, making the notion of moving back a fiscally challenged one. As a result, a number are reportedly not planning to take up the offer.
Besides Calgary, Loblaw's team in mid-town Toronto (Yonge and St. Clair) must decide whether to move to suburban Brampton or commute there for up to two hours daily. |
| MILWAUKEE TOOL ADDS POWER TO CORDLESS LINE |
| BROOKFIELD, Wis. — Milwaukee Electric Tool is adding considerably more juice to its line of cordless power tools for professional customers — with help from a Vancouver company.The company, based here, announced this week that it is rolling out a new line of cordless tools that company officials say will be the first to be powered by 28-volt batteries, which reportedly will have twice the life of more conventionally used 18-volt batteries. The line will be introduced in April and will include a band saw, circular saw, reciprocating saw, impact wrench, hammer-drill and work light. A cordless rotary hammer and two-way radio will follow in 2006.Milwaukee, which was recently acquired by Techtronic Industries, spent more than $10 million developing its battery technology in partnership with E-One Moli Energy of Vancouver, B.C. The lithium-manganese batteries deliver high power and longer-lasting charges, and the circuitry is as much of a breakthrough as the use of lithium batteries, explains Gary Meyer, Milwaukee's research and development manager. "Essentially, it optimizes battery performance by regulating the charging and discharging of the battery," he says. Each battery comes with a "fuel gauge" so that users know how much power remains.
"I would say it's the biggest breakthrough in the 81-year history of the company because it involves an entire platform of tools," said Joseph Smith, vp-marketing at Milwaukee Electric Tool, in an interview with the Milwaukee Journal-Sentinel. Smith cited statistics which show that demand for power and hand tools in the U.S. would increase 4.7% this year, to $14.2 billion. "Basically, all of the growth in the power tool category has come from cordless tools," Smith said.
The 28-volt tools will cost about 40% more than 18-volt, professional-grade tools, Smith said. Most of the 28-volt tools will be made at the company's plants in Arkansas and Mississippi. |
| SCOTTY'S LIQUIDATION ENDS AN ERA |
| WINTER HAVEN, Fla. — The decision by Scotty's, once one of the dominant home improvement dealers in the United States, to liquidate its remaining 40 stores removes from the market perhaps the last major regional retail chain to have withered under the competitive onslaught of Home Depot and Lowe's.After filing for protection under Chapter 11 of the U.S. Bankruptcy Code last September, and stating that it had liabilities of nearly $46 million — including $12.3 million in long-term debt — to more than 200 creditors, Scotty's was unable to negotiate new financing for its operations. Its managers filed documents on Dec. 17 citing their decision to close down the company.At the end of 2004, the company operated 53 stores that generated $32.5 million. When it started closing its stores in early January 2005, it had 470 employees.
Scotty's saga over the past 25 years represented a case study of how warehouse retailing has disrupted and transformed home improvement retailing in North America. A small lumberyard retailer that began operations in 1924, Scotty's grew to become Florida's largest retailer of hardlines and building products, with 164 stores. In the late 1970s and early 1980s, it had what was generally thought to be one of the industry's strongest merchandising teams. Its gregarious president, Ray Cooney, was a high-profile presence at industry functions and trade shows. And the company was ahead of its time by operating a separate wholesale division that supported its stores and its commercial/industrial account business.
However, when Home Depot opened its first Florida stores, in Orlando and Tampa, it specifically targeted Scotty's, whose prices Home Depot portrayed as being exorbitant and whose product mix the rapidly growing big box operator depicted as being anemic. Apparently, Floridians agreed: as Home Depot deepened its penetration into Florida, and opened a regional headquarters in Tampa, Scotty's seemed to feel the brunt of that competition more than any other dealer.
Its response — to open warehouse stores of its own — proved disastrous. In 1988, the Belgium-based GIB Group, which had owned a piece of Scotty's since 1979, bought the company outright, and owned it for a decade until its current president, Tom Morris, assumed control in a management-led $100 million buyout.
Morris did what he could to revive the company by scaling back its store count and store size, and converting the company to more of a hardware-store operator. But for at least the past four years, Scotty's has been on life support.
The liquidation of its stores, equipment and inventory is expected to run through March 31. |
| CANADA'S SECOND-OLDEST RETAILER FACES BANKRUPTCY |
| BARACHOIS, Que. — A Canadian retail tradition is getting pressure from the banks to close its doors once and for all. Robin Jones & Whitman began in 1766 selling fishing supplies in this community in Northern Quebec. (Only Hudson's Bay Co., founded in 1670, is older.) Lawrence Legros, the owner of Robin Jones & Whitman, is a direct descendant of the stores' founders, who emigrated from England.But now the venerable retailer is under court protection from creditors, mainly the Bank of Montreal and the Business Development Bank, but that protection expires in mid-February.The store here, atop the Gaspé peninsula, has been in business since 1909, and it's the only one out of the six stores in the $10-million chain that sells lumber. Its manager, Carl Bond, has been there for 38 years. He says his store was, until two years ago, a BMR member, though not a bannered dealer. Another BMR dealer was already nearby, so Bond's store relied on BMR, a Quebec City-based wholesaler and buying group, for product only.
Because of his remote location, BMR encouraged him to order direct from the suppliers, he said. Servimat, the LBM distribution arm of Sodisco-Howden Group, became a key supplier, as a result. Then, in the summer of 2003, BMR held its annual golf tournament up on the peninsula. "They saw Servimat products in the yard," says Bond. After that, BMR stopped supplying the store.
Bond regrets that they didn't have a banner affiliation. He thinks that might have helped their buying position. Competition is starting to heat up: while the nearest Canadian Tire is 130 kilometres away, a new Home Hardware store is reportedly going up nearby. |
| HARDWARE RETAILER YIELDS TO GUN TOTERS |
| FAIRFIELD, Ohio — The power that the gun lobby exerts in the United States extends even to retail policies. Consider Handyman Ace Hardware, a seven-unit dealer based here, that recently agreed to remove signs which stated that customers bearing concealed firearms could not shop in its stores.In a recent letter sent to the political action committee "Ohioans for Concealed Carry," Handyman's president David Grimes wrote that the signage was not meant "to offend anyone, but rather to try to make all of our customers feel comfortable." He said that his stores had removed the signage, and requested that Handyman be removed from OFCC's "list of retail stores to boycott by your members."On its website, OFCC stated that several other local retailers, including Home Depot and the supermarket chain Kroger, had "responded to questions about why these businesses were posting signs" which the group characterized as discriminatory. It stated that Handyman had made "a responsible decision that is in the best interests of its customers."
A listing of Ohio retailers that have removed signs banning concealed-weapon holders from their stores includes Wal-Mart, True Value Hardware, Beechwold Ace Hardware, and all of Carter Lumber's stores in the state. |
|
| COMPANIES IN THE NEWS |
| LEBANON, Ore. — Lowe's intends to build a 1.4-million-sq.ft. regional distribution center here that, when completed in two years, would support its stores in six western states. The Albany (Ore.) Democrat Herald, quoting local government officials, reported that this DC, on 204 acres, would employ between 400 and 750 workers, and could be expanded to nearly 2.2 million sq.ft. if market demands warrant. At press time, however, the city of Lebanon and Lowe's had not signed a definitive agreement and reportedly were still working out the details of the pact. If consummated, construction on the DC could begin in September. If Lowe's does decide to build this DC, it would be adding to a distribution network that includes 11 large regional distribution centers and 12 flatbed distribution centers for the handling of lumber, building materials and other long-length items.DURHAM, N.C. — A jury here has awarded $500,000 to a family whose eight-year-old son sustained brain damage when a 154-pound, eight-foot-high door fell on him inside a Home Depot store in March 2001. The jury deliberated for four days before deciding that Home Depot had negligently created or allowed a dangerous condition to exist in the store, and that the injuries suffered by the boy, Will Baker, were severe and permanent. Home Depot's attorneys presented evidence that the boy had been playing with the door displays in the store, and also tried to prove that Baker had learning disabilities before the accident occurred. The parents of the boy, James and Martha Baker, had sought $20 million in damages for physical pain and mental anguish. Their attorney presented evidence that the door had not been properly attached to its display for 40 months before the Baker boy was injured.VANCOUVER — CanWel Building Materials confirmed last week the successful purchase of fully 90.2% of the common shares of Sodisco-Howden Group, enabling the new parent of this national hardware wholesaler to take Sodisco-Howden private.
CHICAGO — Grainger, a North American supplier of facilities maintenance products, today announced its Lab Safety Supply subsidiary has signed a definitive agreement to acquire AW Direct Inc., a direct marketer of products to the service vehicle accessories market. AW Direct sells general towing and work truck equipment and accessories to customers in the auto service, utilities, government, and construction markets. The deal is expected to close in the first quarter of 2005.
NEW YORK — Facing a lot of bad press of late (everything from store overdevelopment and low wages for staff to union bashing), Wal-Mart is going on the offensive to shore up its bruised rep. The campaign includes a full-page ad that ran last week in more than a hundred U.S. newspapers, describing the employment opportunities and benefit packages awaiting would-be workers. |
| PEOPLE ON THE MOVE |
| At Georgia-Pacific Corp., Tyler Woolson will rejoin the company as senior vice-president of finance and strategy, effective Jan. 24, 2005. He will assume the additional title of treasurer upon the retirement of Phillip Johnson, the company's vice president and treasurer, at the end of February. Woolson will report to Danny Huff, Georgia-Pacific's executive vice-president of finance and CFO. Currently CFO of Consolidated Container Co., Woolson previously worked for Georgia-Pacific from 1995-2001. |
| U.S. MARKET INDICATORS |
| Retail sales for December 2004 were $349.4 billion, up 1.2% from the previous month and up 8.7% from December 2003, reports the Commerce Department. Excluding automobiles, retail sales were $266.7 billion. Total sales for 2004 were up 8.0% from 2003.Wholesale inventories in November 2004 were $326.8 billion, up 1.1% from October and up 11.5% from one year ago. According to the Commerce Department, sales were $283.7 billion, up 0.7% from October and up 14% from November 2003. |
| CANADIAN MARKET INDICATORS |
| Housing starts reached a seasonally adjusted annual rate 234,400 in December, down from 242,600 in November, according to CMHC. For the year, however, new home construction posted a 17-year high in 2004 reached an estimated 233,000 starts, up 6.7% over 2003 — and a 17-year high. Residential construction in December fell 3.8% to a seasonally adjusted annual rate of 205,900 units, although urban single detached starts inched higher (+0.9%), while urban multiple starts declined 8.1%. December is expected to mark the beginning of a trend, as housing starts are forecast to decrease 9.8% to reach 210,200 units in 2005.The price of new homes in Canada rose 5.3% in November compared with the same month in 2003, according to Stats Canada's New Housing Price Index. |
| OVERHEARD... |
| "We are staying on our strategy of enhancing the core, extending the business and expanding the market." — Bob Nardelli, president, chairman and CEO of Home Depot, during a conference in Atlanta last week for the investment community. |
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****HARDLINES MARKETPLACE****
Don't miss the products and services on the Hardlines web Marketplace:
https://hardlines.ca/html/marketplace.html
And check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp
HELP WANTED
TSC STORES LTD. is a Canadian owned company with 25 retail stores in Ontario and a distribution center located in London, Ontario. We have been in the hardware, automotive and farm supply retail sector for over 35 years in Canada and have an aggressive plan for future growth.
We are currently looking for a Chief Financial Officer at our Corporate Office in London, Ontario.
The Chief Financial Officer is responsible for accurate and timely financial reporting, budgeting, investment management and debt management. Responsible for all areas of finance within a chain of retail stores that are corporately owned. The Chief Financial Officer holds full collaborative authority and accountability for all decisions made and is accountable for the complete execution of company policies, practices and plans. The CFO would be the liaison with external auditors and banking institutions, and would negotiate and execute contracts, drafts and loan agreements. This person would provide direction and leadership to an accounting department of six.
The ideal candidate must possess 8 to 10 years management experience with an extensive, multi-unit progressive retailer. Must have CA designation. Must have superior communication and presentation skills and the ability to effectively communicate with all levels of management and across all functional areas. Must possess strong computer skills (MS Office – Excel, Word).
We offer a competitive salary and benefit package. Please apply by January 17th to:
TSC Stores Ltd.
1950 Oxford Street E.
London, Ontario
N5V 2Z8
Fax: 519-451-1235
e-mail: humanresources@tscstores.com
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DIRECTOR, SALES & MARKETING—HOME DEPOT
Based in Atlanta, you’ll be the key point of contact and plan and direct all activities of Home Depot retail sales and marketing activities, objectives and initiatives. This pertains to HD North America, and affiliated operations, e.g. Expo, Home Depot Supply, etc.
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Focusing on Customers including Lowes, Wal-Mart, and Target you’ll develop growth plans and strategies to maximize retail sales goals. Manage multiple sales agencies across the country and lead by example. You’re as comfortable with profitability analysis as you are making presentations to major Customers.
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Wolf Gugler & Associates Limited. Telephone: 405-848-3006
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DIRECT MARKETING MANAGER-Harrisburg, PA
This well-established home improvements company has built their success on top quality service for window, door and siding products and recently added the Owens-Corning basement finishing system to their portfolio. Business growth requires the addition of a Marketing Manager to complement their existing management team. Reporting to the President, he/she will operate and manage all marketing staff and programs to obtain leads for their inside and outside sales forces. Consumer marketing areas include marketing collateral development, direct mail programs, media buys, referral programs development, community relations, trade show involvement and market trend analysis.
Currently a US-based Manager, others would typify you as the “lead generation guru” in a home improvement firm that knows how to get the most out of your staff. Open and forthright, you’re good at developing two-way communication channels throughout your company and managing by example. Home improvement company experience is essential.
Located in central Pennsylvania with Baltimore, Washington and Philadelphia all in relative proximity, Harrisburg is a family-friendly community that recently ranked as America’s #2 least-stressful city.
To inquire further about this opportunity, please contact Wolf Gugler in strict confidence, quoting Direct Marketing Manager-PA.
Wolf Gugler & Associates Limited, 1000 West Wilshire, Oklahoma City, OK 73116. (405) 848-3006 email: resumes@wolfgugler.com Web site: www.wolfgugler.com
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U.S. REGIONAL SALES DIRECTOR
A highly successful Canadian firm is taking advantage of their extensive product line and business success in an up economy by spearheading their new US efforts. To assist in this, a Regional Sales Director for the Northeastern US is sought. Reporting to the VP, Sales, the Director will communicate the company’s strategic direction, goals and values to sales staff in NY, NJ, NH, MA, PA and Ohio.
Currently a US-based Manager, you can demonstrate the proven ability to optimize retail Customer & market mixes, maximize sales returns (margins) within a region, and are able to get the most out of your staff through open, consistent communications, motivation and follow-up processes.
To inquire further about this opportunity, please contact Wolf Gugler in strict confidence, quoting Regional Sales Director-US.
Wolf Gugler & Associates Limited, 1000 West Wilshire, Oklahoma City, OK 73116. (405) 848-3006 email: resumes@wolfgugler.com
Web site: www.wolfgugler.com
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Experienced Rep Agency seeks established lines to represent to the Hardware, Building Materials, and Industrial Supply Industry. We can offer both sales, and detail services to the Ontario market. As a small, focused agency, our committment is to higher service levels, strong product knowledge, and 110% customer satisfaction.
For details, please contact Shawn Hamill, at Indusport Agencies, (519)239-3534, or indusport@primus.ca.
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TO PLACE YOUR AD, CALL PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: phyllis@hardlines.ca |
John Caulfield, Contributing Editor
vol. xi, #3, January 17, 2005
