Canada will get new hardware show

TORONTO-The company behind the National Hardware Show, Reed Exhibitions, will attempt to replicate its success with that show, which flourished after moving to Las Vegas almost three years ago, by starting a new hardware show for Canada. The show, which will remain here in North America's fifth-largest city, has been named the National Hardware Show Canada. It will be branded as a regional extension of NHS, with Reed promoting the new Canadian show to every delegate that registers for Las Vegas, and with every vendor that exhibits. Rob Cappiello, president of the National Hardware Show at Reed, believes there's room for a show that unites buyers with vendors in Central Canada and the Northeastern and Midwestern U.S. NHS Canada's strength will be in allying with existing events. In fact, about half the show in the first year will be taken by a lawn and garden show owned by Landscape Ontario, called Garden Expo/Florist Expo. Reed has agreed to co-locate the new hardware show with this event at the Toronto Congress Centre near the city's airport, Oct. 17-18, 2006. Also joining the new show will be our very own Hardlines Conference. That event will be moved from its usual September time slot to co-locate with the new show Oct. 16-17, creating one monster three-day event from Oct. 16-18. The creation of this new show comes less than two years after the demise of the Canadian Hardware Show, which ran for almost a century before the association that owned it, the Canadian Retail Hardware Association, went under in 2003. Only a year later, a giant German trade show company, Messe Frankfurt, tried to revive the show virtually unchanged, and failed. However, Reed succeeded in bringing NHS back to life after it all but expired in Chicago. The show was moved to Las Vegas, co-located with other events, and enhanced with a strong conference program. The newly combined Canadian event will cover 200,000 sq.ft. of floor space, half devoted to Garden Expo/Florist Expo, and the other half to the hardware/home improvement exhibitors. Show organizers expect approximately 1,000 exhibitors. (For more information about the show, email inquiry@hardware.reedexpo.com. For info about the Hardlines Conference, call us at 416-489-3396.)

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Home Depot to test gas stations

NASHVILLE-As part of its latest effort to diversify its operations, Home Depot is about to test the first of four gas convenience stores in this market. The store, called Home Depot Fuel, is scheduled to open in Brentwood, Tenn., on Feb. 1. The other stores will open by June. Frank Blake, Depot's executive vp-business development and operations, told Cox News Service that the company expects these stores to generate between $5 million and $7 million annually. If the test succeeds, Depot intends to roll out 300 of them in the next five years, with the goal of generating $1.5 billion in annual revenue by 2010. By opening gas convenience stores, Depot would be joining other big box dealers, including Wal-Mart, Costco and the supermarket chain Kroger, that have diversified into those types of outlets. Cox quotes statistics from Energy Analysts International, which found that 3,580 supermarkets, discount retailers and warehouse clubs captured nearly 8% of total fuel sales in 2005. By 2008, that 8% market share is projected to almost double to nearly 15.5%.

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Why RONA won't go to the U.S. - at least, for now

BOUCHERVILLE, Que.-RONA inc., Canada's second-largest home improvement retailer, is keen to recruit, or outright purchase, new dealers, but it won't likely look south of the border in the near future. "We know each state and have proven we know how to integrate, so we could do something in the U.S. if the time came," said Claude Bernier, RONA's executive vice-president of traditional stores. He spoke recently at a presentation by RONA execs. Even if his company did make a move, it would likely be in markets close to the Canadian border. RONA's president and CEO, Robert Dutton, echoed Bernier's comments. "We have no plans for now," he said. The reason, Dutton added, was a simple one: "We have enough to do in Canada. We've been flooded with prospective dealers and offers to sell from companies across Canada. Some," he added cryptically, "would surprise you." RONA has made significant inroads, with the recruitment of new dealers to one of its Home Centre, Building Centre, Hardware or specialty banners. The signing of a three-store operation on Vancouver Island, Duncan Pacific, was reached in November of last year. But RONA's acquisitions have been the newsmakers in recent years. The purchase of Alberta's largest home improvement retailer, Totem Building Supplies, which closed in the second quarter of 2005, made a significant impact, not only on RONA's sales last year, but on its profitability, as well. RONA plans to open 15-20 new stores in 2006-almost double the number of openings last year.

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Luxury consumers continue on a spending spree in 2005

STEVENS, Pa.’ÄîCustomers are still spending on luxury items, but more dollars are going to luxury experiences than products, says one expert. Pam Danziger, president of Unity Marketing, says luxury consumers kept spending in 2005. In fact, the average amount spent by an affluent household on luxuries, including luxuries for the home, personal luxuries, automobiles and luxury experiences, rose 3.8% to $52,588 last year, from $50,640 in 2004. But their spending continues to shift towards the experiential, while they are spending about the same or slightly less in traditional luxury goods categories. Danziger's figures are drawn from her company's latest luxury spending survey. The average luxury consumer household actually spent 4.6% less on home luxuries in 2005 as 2004-$19,990 compared with $20,948 in 2004. Personal luxury spending, including apparel, fashion accessories, jewelry and watches, wine and spirits, pet luxuries and pens and desk accessories, rose 5.6% to $10,007 in 2005. Spending on luxury experiences, however, such as travel, dining, entertainment, spas and beauty services, and home services, nearly doubled, from an average of $11,632 in 2004 to $22,746 in 2005. For luxury goods marketers and retailers, says Danziger, the challenges are daunting. Luxury consumers are spending more, in many cases lots more, on life-changing experiences, while their need for luxury goods is waning. However, there may be some good news in there for retailers that are beefing up their at-home services. Danziger attributes much of the spending shift to the rising age of baby boomers, who make up 57% of all households with incomes of $100,000 or more. As more and more of them turn 60, they have already acquired the material trappings of luxury. Buying another mink coat, diamond necklace or designer handbag just doesn't have the same appeal. Instead, they are looking for new experiences and this will tip the entire luxury business to the experiential simply because of the generation's size.

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Tembec will sell off its OSB division

MONTREAL-Tembec Inc., the integrated forest products company, is selling off its oriented-strand board business in Saint-Georges-de-Champlain, Que. to Jolina Capital Inc. for $98 million, $88 million of which will be payable on closing and the balance payable in the form of a $10 million interest-bearing note. Jolina is a company controlled by Emanuele (Lino) Saputo, a major Tembec shareholder. The deal, subject to customary closing conditions, is expected to close before the end of March 2006. The sale comes on the heels of Tembec's announced first-quarter results, in which the company's consolidated sales fell from $888.8 million to $809.8 million. Tembec suffered a net 1Q loss of $74.9 million, deepened over a loss of $0.7 million.

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U.S. home sales continue to slide

WASHINGTON-America's housing market continues to show signs of weakening. The National Association of Realtors reported that sales of existing homes fell 5.7% in December, compared to the previous month, to a seasonally adjusted annual rate of 6.6 million units. That was the third straight monthly decline. However, 2005 was still a banner year for sales. NAR reported that existing home and condo sales for the year hit 7.072 million units, up 4.2% over 2004 and representing the fifth consecutive year of gains. The realtors reported that the median price for an existing house sold in 2005 rose to $208,700, up 12.7% from 2004. That was the biggest annual increase since a 14.4% rise in 1979. In addition, December's new home construction was up almost 2% over December 2004. "The bloom is definitely off the housing rose. Housing peaked last summer and has been weakening ever since," Mark Zandi, chief economist at Moody's Economy.com, told the Washington Times. Other analysts are predicting that existing home sales will fall this year anywhere from 3-10%. For example, analysts at Goldman Sachs estimated that the housing slowdown will begin to be a drag on economic growth by mid-year and by early 2007 will be trimming growth by around 1.5 percentage points.

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