HARDLINES™ Five years serving Canada's home improvement industry January 22, 2001 - Volume vii, #3 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * TruServ trims some programs * Sodisco-Howden Group intergrates buying offices * Home Depot shares falter following anticipated soft quarterly results * National Hardware Show in Chicago reduced to three days * Price Costco to consolidate east and west offices * Sears Canada sales up 10% in 2000 * * * * * *   PLEASE JOIN HARDLINES AT ITS SIXTH ANNUAL SHOW BREAKFAST to kick off the Canadian Hardware & Building Materials Show. Don't miss this key industry event on Sunday, February 4, 2001, 7:30 a.m. to 9:00 a.m. in Room 103 at the National Trade Centre, CNE grounds, where we will present the 2000 Newsmaker of the Year Award. We're ecstatic over how popular this event has become, but the result is that space gets really limited. Please book early to avoid disappointment! RSVP Nancy at 416-489-3396, send a fax to 416-489-6154; or email: hardline2@on.aibn.com We welcome NATIONAL RETAIL CREDIT SERVICES (NRCS for short) as our newest sponsor. These folks do private label credit cards and let me tell you, they really have their act together! They're in good company - our other sponsors are: * THE CANADIAN HARDWARE AND BUILDING MATERIALS SHOW * HARDWARE MERCHANDISING/CANADIAN CONTRACTOR * NEWELL RUBBERMAID * NORAL INSTORE * STERLING COMMERCE * WRIGHT'S SEND-A-BASKET * WOLF GUGLER & ASSOCIATES * * * * * * HARDLINES CLASSIFIEDS AT CHS: Put your classified ad in our February 5th, 2001 issue of Hardlines, and take advantage of our INCREASED CHS CIRCULATION. That's thousands of industry eyeballs! Plus, you get all the regular benefits of The Hardlines Marketplace: your ad is read by over 3,000 people for two weeks in the fax version, three weeks in the email version and on our website. All that for just $16 per line. Deadline for all classified ads for CHS issue is January 30, 2001. Please contact Eugenia at 416-489-3396 or email: buzz@hardlinesfax.com  
SODISCO-HOWDEN GROUP FOCUSES ITS BUYING PRACTICES   The addition of a new vice-president to the executive ranks at Sodisco-Howden Group is just part of a refocusing of the company to bring its two divisions closer together. Rona veteran Robert Harritt joined as executive vice-president and CFO at the beginning of this year, while Pierre Racette, vice-president of marketing, also became president of SHG's buying group, Spancan. Under the reorganization, says Racette, category managers, both in the Howden division in London, ON and Sodisco in Victoriaville, QC, will work closer together to create national programs. The need is driven, in part, he says, by the company's electronic catalogue initiative. "Despite having two buying offices, it's sales under one person, marketing under one person," says Racette. The two buying offices have historically been a perplexing challenge for vendors, who were often unclear where the senior purchasing decision resided. Racette insists the geographic distinction no longer matters. "It's irrelevant because they're working on the same team, working for the same boss - and they're on the same agenda." The newest addition to the company's distribution network, the Smith-Barregar division in Langley, BC, was fully integrated into SHG's distribution network by the end of 2000. As the company's western facility, it serves dealers in British Columbia, Alberta and Saskatchewan. * * * * * * TRUSERV TRIMS SOME PROGRAMS, STAFF The departure of one key merchandiser, along with five support staff at TruServ Canada (see "People on the move"), are part of a realignment of some of the co-op wholesaler's programs. The most prominent is the Crafts 'N More banner, which TruServ will no longer recruit dealers for. The banner currently has 27 members. "We'll continue serving those stores and try and change them to our [V&S] Variety format where appropriate," says Leo Charriere, COO of TruServ Canada. In addition, the Just Ask rental program will still be available, but will now be managed and marketed by Wilf Gerhardt, TruServ's sales development manager. On the other hand, the Pet Junction program is gaining momentum, with 37 independent pet dealers already signed up. TruServ is also supplying another 60 unaffiliated stores. Charriere says the company expects sales of pet products and supplies to double this year alone. Even True Value and V&S stores with pet supply departments have enjoyed huge growth by adopting parts of the Pet Junction program, he adds.  
COMPANIES IN THE NEWS   Lansing Buildall in Toronto ended 2000 with contractor appreciation breakfasts at all eight of its locations. They were held on various dates throughout December. Typical of the events was the one at the Scarborough store, which hosted upwards of 600 contractors and tradespeople, including roofers, framers, plumbers and electricians. They came for eggs and sausages, vendor demos and a chance to be photographed with one of the three Toronto Argonaut cheerleaders on hand. Costco Wholesale Corp. has announced its intention to merge its two Canadian offices. The estimated consolidation costs of US$15.6 million will be spread over the next four quarters, beginning with the second quarter ending Feb. 18. The two offices have so far operated separately: the Western Canada region based in Burnaby, BC and the eastern Canada region in Laval, QC. Costco expects to complete the consolidation by its fiscal year ending Sept. 2 and recoup the cost of the move within a year. Home Depot in Atlanta expects fourth-quarter earnings to be down 20% from the same period last year, due to a slowing economy and falling prices for building materials. Sales were previously expected to grow by 4% but are now anticipated to be flat. The soft performance is expected to continue right through the first half of 2001. Home Depot shares closed last week at US$41, down from $44*. Sales for Sears Canada for the fourth quarter ended December 30, 2000 were $2.109 billion, up 10.4% from $1.910 billion last year. Sales for the year were $6.356 billion, up 10.0%. For the full year, Sears posted net earnings of $225.8 million, compared with $199.6 million in 1999. Ainsworth Lumber Co. Ltd. did not make the interest payment of approximately $17,000,000 due January 15, 2001 on its 12*% Senior Secured Notes. This does not constitute an event of default under the notes until such non-payment continues for more than 30 days. Ainsworth expects to make such payment from its operating cash flows prior to February 13, 2001. Ainsworth continues to pursue financing for its Footner OSB Project and, in addition, has initiated negotiations with third parties concerning asset dispositions with a view to reducing Ainsworth's ongoing cash requirements, including those for Footner. LBMX, an e-commerce solutions provider to the hardware and building materials industry, has been contracted to develop e-marketplaces for two Western Canada-based retail organizations. For Sexton Group, LBMX will develop a Sexton branded e-marketplace whereby dealers can order products from vendors using electronic invoicing. TruServ Canada will use LBMX to move warehouse and, eventually, dealer-direct purchases, to LBMX's web-based EDI. Scotty's has announced its affiliation with the Do it Best Corp. in the U.S. The Florida-based chain of 115 stores will expand the number of products available from 17,500 to 68,000 SKUs. The conversion is expected to take approximately four months. Plastmo Ltd. has appointed Can-Save as its new Ontario distributor for vinyl gutter lines, including Half Round and Ksnap. Lowe's Cos. Inc. will begin construction this year of its sixth regional distribution centre. The 900,000-sq.ft. facility, in Cheyenne, Wyoming, will cost US$60 million and employ 425-plus people. When completed in about two years, it will supply 25,000 SKUs to 70 stores in the Central and Western U.S. Online gardening products retailer Garden.com Inc. sold its content assets to Walmart.com and its brand assets to Burpee Holding Co., the parent company of W. Atlee Burpee & Co.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 37.35 15.10 21.50
Canfor 19.80 8.10 8.20
Goodfellow 12.55 8.50 9.60
Home Depot 70.00 34.68 41.00
Hudsons Bay 21.65 12.50 13.80
Lowe's Cos. 67.25 34.25 44.38
Sears Canada 42.50 20.00 25.30
Taiga Forest 14.20 6.80 8.10
West Fraser 39.50 25.80 29.95
    "You can do very little with faith. But you can do nothing without it." - John Sutro (British writer)
PEOPLE ON THE MOVE   Gary Hamilton, formerly group merchandise manager for softlines, pet and housewares, has left TruServ Canada. No replacement has been named ... Wally Stefaniuk, formerly national sales manager specializing in TruServ's paint lines, has also exited the company. (204-453-9511) After 10 years at Wal-Mart Stores Inc., most recently as vice-president of merchandising, John P. Owen has moved over to Kmart Corp. as head of merchandising for all products other than home and apparel lines. He will be responsible for toys, electronics, appliances, car care products, sporting goods and photo services. He replaces Jerry Kuske, who left Kmart last week.
OVERHEARD ...   "I think an ongoing challenge for trade shows is that organizers are always torn between constituents - the attendees, exhibitors, etc - who want a longer show and those who want a shorter one. For some, the time at a show is just not long enough to walk around to all areas. For others, things seem to slow down after a certain number of days. "Our show went from four to three days about 11 years ago. It was a decision made by acting proactively on feedback from our constituents, and by trying to accomplish what was felt were important goals for the show. The U.S. show just appears to be responding to its constituents with this move." - Bob Elliot, executive director of the Canadian Retail Hardware Association, commenting on the news that the National Hardware Show in Chicago will be shortened from four days to three, effective this August. * * * * * * NOTED ... Fediyma, the Federation of European DIY Manufacturers' Associations, has announced its first European DIY forum, to take place in Brussels September 28-29, 2001. The forum, themed "Today's Three Challenges for the Success in DIY," will include presentations by international retailers and ample opportunity to meet with attending delegates.  
MARKET INDICATORS   The price of new homes continues to increase at a strong rate, according to Statistics Canada. The new housing price index, an index of contractors' selling prices, increased 2.5% in November 2000, compared with November 1999. This was the highest annual increase since May 1990, when the index rose 3.8%. For the fifth consecutive month, Ottawa-Hull registered the largest monthly rise (+2.0%) from October 2000. On an annual basis, new home prices in Ottawa-Hull rose 11.8%. Kitchener-Waterloo, Montréal, St. John's and London also posted notable increases on an annual basis. Victoria registered the largest annual decrease (-1.8%)  
Are you reading your own copy of Hardlines? Find out about our special company rates!    
Hardlines Marketplace   THE HARDLINES MARKETPLACE: It's a great place to announce new lines or acquisitions, services or lines available. And of course they are an effective, low-cost way to hire new people. At just $16 per line, here's what you get with each Marketplace Ad: - two weeks in the fax version - three weeks in the email version - posted on our website for three weeks - your ad read by more than 3,000 people every single week - thousands of hits on our Website! - our boundless thanks for your support of Hardlines! Beverly takes care of the Classifieds so contact her: bev@hardlinesfax.com or call her at 416-489-3396. at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 1995-2001 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. Subscription: $199+$13.93 GST = $212.93 (or $29.85 HST = $228.85) per year (GST #13987 0398 RT). You can pay online by VISA at our secure website or send us money. Please make cheque payable to McLarneyCom. 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. Let us handle your internal routing from this end!  
  HARDLINES™ Five years serving Canada's home improvement industry January 22, 2001 - Volume vii, #3 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * TruServ trims some programs * Sodisco-Howden Group intergrates buying offices * Home Depot shares falter following anticipated soft quarterly results * National Hardware Show in Chicago reduced to three days * Price Costco to consolidate east and west offices * Sears Canada sales up 10% in 2000 * * * * * *   PLEASE JOIN HARDLINES AT ITS SIXTH ANNUAL SHOW BREAKFAST to kick off the Canadian Hardware & Building Materials Show. Don't miss this key industry event on Sunday, February 4, 2001, 7:30 a.m. to 9:00 a.m. in Room 103 at the National Trade Centre, CNE grounds, where we will present the 2000 Newsmaker of the Year Award. We're ecstatic over how popular this event has become, but the result is that space gets really limited. Please book early to avoid disappointment! RSVP Nancy at 416-489-3396, send a fax to 416-489-6154; or email: hardline2@on.aibn.com We welcome NATIONAL RETAIL CREDIT SERVICES (NRCS for short) as our newest sponsor. These folks do private label credit cards and let me tell you, they really have their act together! They're in good company - our other sponsors are: * THE CANADIAN HARDWARE AND BUILDING MATERIALS SHOW * HARDWARE MERCHANDISING/CANADIAN CONTRACTOR * NEWELL RUBBERMAID * NORAL INSTORE * STERLING COMMERCE * WRIGHT'S SEND-A-BASKET * WOLF GUGLER & ASSOCIATES * * * * * * HARDLINES CLASSIFIEDS AT CHS: Put your classified ad in our February 5th, 2001 issue of Hardlines, and take advantage of our INCREASED CHS CIRCULATION. That's thousands of industry eyeballs! Plus, you get all the regular benefits of The Hardlines Marketplace: your ad is read by over 3,000 people for two weeks in the fax version, three weeks in the email version and on our website. All that for just $16 per line. Deadline for all classified ads for CHS issue is January 30, 2001. Please contact Eugenia at 416-489-3396 or email: buzz@hardlinesfax.com  
SODISCO-HOWDEN GROUP FOCUSES ITS BUYING PRACTICES   The addition of a new vice-president to the executive ranks at Sodisco-Howden Group is just part of a refocusing of the company to bring its two divisions closer together. Rona veteran Robert Harritt joined as executive vice-president and CFO at the beginning of this year, while Pierre Racette, vice-president of marketing, also became president of SHG's buying group, Spancan. Under the reorganization, says Racette, category managers, both in the Howden division in London, ON and Sodisco in Victoriaville, QC, will work closer together to create national programs. The need is driven, in part, he says, by the company's electronic catalogue initiative. "Despite having two buying offices, it's sales under one person, marketing under one person," says Racette. The two buying offices have historically been a perplexing challenge for vendors, who were often unclear where the senior purchasing decision resided. Racette insists the geographic distinction no longer matters. "It's irrelevant because they're working on the same team, working for the same boss - and they're on the same agenda." The newest addition to the company's distribution network, the Smith-Barregar division in Langley, BC, was fully integrated into SHG's distribution network by the end of 2000. As the company's western facility, it serves dealers in British Columbia, Alberta and Saskatchewan. * * * * * * TRUSERV TRIMS SOME PROGRAMS, STAFF The departure of one key merchandiser, along with five support staff at TruServ Canada (see "People on the move"), are part of a realignment of some of the co-op wholesaler's programs. The most prominent is the Crafts 'N More banner, which TruServ will no longer recruit dealers for. The banner currently has 27 members. "We'll continue serving those stores and try and change them to our [V&S] Variety format where appropriate," says Leo Charriere, COO of TruServ Canada. In addition, the Just Ask rental program will still be available, but will now be managed and marketed by Wilf Gerhardt, TruServ's sales development manager. On the other hand, the Pet Junction program is gaining momentum, with 37 independent pet dealers already signed up. TruServ is also supplying another 60 unaffiliated stores. Charriere says the company expects sales of pet products and supplies to double this year alone. Even True Value and V&S stores with pet supply departments have enjoyed huge growth by adopting parts of the Pet Junction program, he adds.  
COMPANIES IN THE NEWS   Lansing Buildall in Toronto ended 2000 with contractor appreciation breakfasts at all eight of its locations. They were held on various dates throughout December. Typical of the events was the one at the Scarborough store, which hosted upwards of 600 contractors and tradespeople, including roofers, framers, plumbers and electricians. They came for eggs and sausages, vendor demos and a chance to be photographed with one of the three Toronto Argonaut cheerleaders on hand. Costco Wholesale Corp. has announced its intention to merge its two Canadian offices. The estimated consolidation costs of US$15.6 million will be spread over the next four quarters, beginning with the second quarter ending Feb. 18. The two offices have so far operated separately: the Western Canada region based in Burnaby, BC and the eastern Canada region in Laval, QC. Costco expects to complete the consolidation by its fiscal year ending Sept. 2 and recoup the cost of the move within a year. Home Depot in Atlanta expects fourth-quarter earnings to be down 20% from the same period last year, due to a slowing economy and falling prices for building materials. Sales were previously expected to grow by 4% but are now anticipated to be flat. The soft performance is expected to continue right through the first half of 2001. Home Depot shares closed last week at US$41, down from $44*. Sales for Sears Canada for the fourth quarter ended December 30, 2000 were $2.109 billion, up 10.4% from $1.910 billion last year. Sales for the year were $6.356 billion, up 10.0%. For the full year, Sears posted net earnings of $225.8 million, compared with $199.6 million in 1999. Ainsworth Lumber Co. Ltd. did not make the interest payment of approximately $17,000,000 due January 15, 2001 on its 12*% Senior Secured Notes. This does not constitute an event of default under the notes until such non-payment continues for more than 30 days. Ainsworth expects to make such payment from its operating cash flows prior to February 13, 2001. Ainsworth continues to pursue financing for its Footner OSB Project and, in addition, has initiated negotiations with third parties concerning asset dispositions with a view to reducing Ainsworth's ongoing cash requirements, including those for Footner. LBMX, an e-commerce solutions provider to the hardware and building materials industry, has been contracted to develop e-marketplaces for two Western Canada-based retail organizations. For Sexton Group, LBMX will develop a Sexton branded e-marketplace whereby dealers can order products from vendors using electronic invoicing. TruServ Canada will use LBMX to move warehouse and, eventually, dealer-direct purchases, to LBMX's web-based EDI. Scotty's has announced its affiliation with the Do it Best Corp. in the U.S. The Florida-based chain of 115 stores will expand the number of products available from 17,500 to 68,000 SKUs. The conversion is expected to take approximately four months. Plastmo Ltd. has appointed Can-Save as its new Ontario distributor for vinyl gutter lines, including Half Round and Ksnap. Lowe's Cos. Inc. will begin construction this year of its sixth regional distribution centre. The 900,000-sq.ft. facility, in Cheyenne, Wyoming, will cost US$60 million and employ 425-plus people. When completed in about two years, it will supply 25,000 SKUs to 70 stores in the Central and Western U.S. Online gardening products retailer Garden.com Inc. sold its content assets to Walmart.com and its brand assets to Burpee Holding Co., the parent company of W. Atlee Burpee & Co.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 37.35 15.10 21.50
Canfor 19.80 8.10 8.20
Goodfellow 12.55 8.50 9.60
Home Depot 70.00 34.68 41.00
Hudsons Bay 21.65 12.50 13.80
Lowe's Cos. 67.25 34.25 44.38
Sears Canada 42.50 20.00 25.30
Taiga Forest 14.20 6.80 8.10
West Fraser 39.50 25.80 29.95
    "You can do very little with faith. But you can do nothing without it." - John Sutro (British writer)
PEOPLE ON THE MOVE   Gary Hamilton, formerly group merchandise manager for softlines, pet and housewares, has left TruServ Canada. No replacement has been named ... Wally Stefaniuk, formerly national sales manager specializing in TruServ's paint lines, has also exited the company. (204-453-9511) After 10 years at Wal-Mart Stores Inc., most recently as vice-president of merchandising, John P. Owen has moved over to Kmart Corp. as head of merchandising for all products other than home and apparel lines. He will be responsible for toys, electronics, appliances, car care products, sporting goods and photo services. He replaces Jerry Kuske, who left Kmart last week.
OVERHEARD ...   "I think an ongoing challenge for trade shows is that organizers are always torn between constituents - the attendees, exhibitors, etc - who want a longer show and those who want a shorter one. For some, the time at a show is just not long enough to walk around to all areas. For others, things seem to slow down after a certain number of days. "Our show went from four to three days about 11 years ago. It was a decision made by acting proactively on feedback from our constituents, and by trying to accomplish what was felt were important goals for the show. The U.S. show just appears to be responding to its constituents with this move." - Bob Elliot, executive director of the Canadian Retail Hardware Association, commenting on the news that the National Hardware Show in Chicago will be shortened from four days to three, effective this August. * * * * * * NOTED ... Fediyma, the Federation of European DIY Manufacturers' Associations, has announced its first European DIY forum, to take place in Brussels September 28-29, 2001. The forum, themed "Today's Three Challenges for the Success in DIY," will include presentations by international retailers and ample opportunity to meet with attending delegates.  
MARKET INDICATORS   The price of new homes continues to increase at a strong rate, according to Statistics Canada. The new housing price index, an index of contractors' selling prices, increased 2.5% in November 2000, compared with November 1999. This was the highest annual increase since May 1990, when the index rose 3.8%. For the fifth consecutive month, Ottawa-Hull registered the largest monthly rise (+2.0%) from October 2000. On an annual basis, new home prices in Ottawa-Hull rose 11.8%. Kitchener-Waterloo, Montréal, St. John's and London also posted notable increases on an annual basis. Victoria registered the largest annual decrease (-1.8%)  
Are you reading your own copy of Hardlines? Find out about our special company rates!    
Hardlines Marketplace   THE HARDLINES MARKETPLACE: It's a great place to announce new lines or acquisitions, services or lines available. And of course they are an effective, low-cost way to hire new people. At just $16 per line, here's what you get with each Marketplace Ad: - two weeks in the fax version - three weeks in the email version - posted on our website for three weeks - your ad read by more than 3,000 people every single week - thousands of hits on our Website! - our boundless thanks for your support of Hardlines! Beverly takes care of the Classifieds so contact her: bev@hardlinesfax.com or call her at 416-489-3396. at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 1995-2001 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. Subscription: $199+$13.93 GST = $212.93 (or $29.85 HST = $228.85) per year (GST #13987 0398 RT). You can pay online by VISA at our secure website or send us money. Please make cheque payable to McLarneyCom. 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. Let us handle your internal routing from this end!