TSC wants 80 stores nationally by 2010

MARKHAM, Ont. — Historically, TSC Stores has been a niche regional player. But over the last five years, during which time there have been a couple of ownership changes, expansion plans have been ramped up. In fact, says Greg Hicks, COO of the London, Ont.-based chain of farm and hardware stores, the company wants to almost triple its store count within the next five years. Hicks spoke last week to a group of vendors at a meeting hosted by the Canadian Hardware and Housewares Manufacturers Association. It had sales of $100 million in 2005, and currently has 31 stores all in Ontario, and eight more are planned for this year. So far, Arnprior, Leamington, and Kemptville are confirmed. But another four stores will be relocated and two will be refitted for grand re-openings. By 2010, TSC wants 80 stores in total. "We're going to be on an aggressive store expansion strategy over the next few years," Hicks said. He added that the company's strategy envisions upwards of 200-300 stores nationally, though he did not put a timeline on that number. Driving that expansion is a belief in the viability of a market that is neither strictly farm nor urban: "The store is really for someone who enjoys the country lifestyle," Hicks said. TSC's strategy for exploiting that market is based on a number of points of differentiation, but two stand out. First is people — a "customer first" culture that focuses on service. "The company prides itself on offering an incredible customer experience," said Hicks. Second is a product mix tailored for its core customer base of hobby farmers and small farms, and secondarily to larger farmers, commercial/industrial accounts, and contractors. Farm and country home improvement, working the land, and outdoor hobbies are the pillars of TSC's merchandising mix. That means building expertise in farm, equine, animal health, and farm-related power equipment such as generators. Hicks had some good news — and bad — for vendors. TSC wants to expand its range of products, but it also expects to consolidate its key suppliers. Areas that are open to growth include power tools, seasonal, including small sports vehicles (ATVs), and even some LBM products, including dimensional lumber, railroad ties, and fenceposts.

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Home Hardware launches home design software

ST. JACOBS, Ont. — Home Hardware has launched a new renovation planning software package called HomeWorks, and is about to give it a big promotional push. Using a photograph of one's own home or room — or stock images — the user can highlight areas of the home, such as roof, walls or trim, then add products and colours available from Home Hardware suppliers. Both homeowners and contractors can digitally visualize their interior and exterior construction and design products before starting the job. HomeWorks retails for $24.97, and includes a $25 gift card offer. The package was introduced without much fanfare at the end of last year, but Home Hardware dedicated its front page of Saturday's flyer to the software. A new TV commercial has been launched today and will run through to December 2007, while a web demo will be ready to go live in a few weeks. The new package is already attracting consumer attention, says Andrew Pantelides, national product manager, lumber & building materials, for Home Hardware, who also oversaw the development and implementation of HomeWorks. "Without any media exposure we are averaging approximately 800 registrants per week on our website," he says.

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Royal Woodworking celebrates anniversary with new facility

AURORA, Ont. — Royal Woodworking, which manufactures mouldings and millwork, celebrated its 30th anniversary in December, and at the same time hosted an open house in the company's new facility in nearby Bradford. The new 70,000-square-foot warehouse is being used for raw material storage, manufacturing and storage of finished products. Hosting the event were owners Frank, Donna and Rick Gerrits.

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Lowe's is Mexico-bound

MONTERREY, Mexico — Lowe's will expand into Mexico, and expects to open between three and five stores in Monterrey in 2009. The company said it would invest between $18 million and $20 million per store on that expansion, which is expected to create 800 new jobs. It has already opened an office in Monterrey, headed up by Francisco Fernandez, who will run Lowe's operations in that country. Fernandez joined Lowe's five years ago, and has 16 years of retailing experience, including seven with Total Home, the Mexican chain that was purchased by Home Depot in 2001. Lowe's did not disclose its longer-range expansion plans for Mexico, where the Central Bank estimates that the country's growth rate in 2007 would be between 3.5% and 3.6%, depending on how well the U.S. economy does. However, Robert Niblock, its chairman and CEO, said in a prepared statement that his company has been looking at moving its operations beyond U.S. borders for several years. "With homeownership rates in the market growing at a rapid pace, we see Monterrey as a tremendous opportunity to offer Lowe's products and services to homeowners and commercial customers in a superior shopping environment with customer service that is recognized as among the best in retail." Lowe's first step internationally was into Canada, where it set up offices last spring. The first Lowe's store in Canada is expected to open in October.

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New Home Depot chairman could receive nearly $9M this year

ATLANTA — Frank Blake, Home Depot's new chairman and CEO, will be paid a base salary of $975,000. However, his total compensation for 2007 could hit $8.9 million, based on a formula tied to the company's performance. For example, he could earn up to $5 million more depending on how well Home Depot's stock performs. In a filing with the Securities and Exchange Commission dated Jan. 23, Home Depot stated that Blake's bonus would equal 200% of his base salary if the company hit predetermined performance targets. Through a long-term incentive program, Blake could also earn 100% of his base salary. He will also receive $2.5 million in what the company is calling "performance shares" of stock whose value is tied to shareholder return and will be paid out at the end of a three-year period. Blake will also receive $2.5 million worth of vested options that will vest only after the Company's stock price has increased 25% over the grant date price for at least 30 consecutive trading days. The company also disclosed the 2007 compensation formulas for Joe DeAngelo, its COO; and for Carol Tome, its CFO and executive vice-president. Their base salaries will be $875,000, and any further compensation is also linked to the company's stock performance. These performance formulas are the company's response to criticisms about the compensation package it paid for CEO Bob Nardelli, which wasn't moored to Home Depot's stock price or shareholder return.

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Stock cuts 1,500 more jobs

RALEIGH, N.C. — Stock Building Supply, the largest pro dealer in North America, is reducing its staff by 1,500 more associates in response the persistent downturn in homebuyer demand that is affecting its builder customers. Stock's parent, U.K.-based Wolseley plc, also announced that it was laying off 500 jobs at Ferguson Enterprises, the Virginia-based plumbing distributor. In a statement posted on its web site, Wolseley reported that, for the five months ended Dec. 31, 2006, lumber and structural panel prices — which account for 45% of Stock's annual revenue — were off 22% and 35%, respectively, as housing starts fell by 22%. Stock's same-store sales during that period were off 9%, and its operating income was down 40%, after accounting for a one-time charge of $11 million related to closing 22 of its branches and laying off 3,500 employees. Overall, Wolseley's pretax income was off 14% during that five-month period.

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