John Caulfield, Contributing Editor
vol. xi, #5, January 31, 2005

IN THIS ISSUE: • IRLY offers new store package • Tim-BR-Marts counts on growth • ILDC looks west for members • Building stays hot in U.S. • True Value sharpens buying focus

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"Life is a succession of moments. To live each one is to succeed." — Corita Kent (artist, teacher and a Sister of the Immaculate Heart of Mary)
SURREY, B.C. — IRLY Distributors, the Western-based wholesaler and buying group, has unveiled a new store design program. It's part of a move by the group to get more aggressive in both its recruitment and retention efforts.Designed for both new and existing dealers, the program has been developed in-house by Brad Dixon, dealer development manager for IRLY, along with Catherine Brownlow, advertising manager. "The new look maximizes the existing strengths of our program, while giving it a fresh look, to keep costs down for our dealers," says Dixon.But despite the sensitivity to a dealer's pocketbook, the new program is a comprehensive one. It includes interior and exterior signage, store layouts, yard layouts, merchandising and racking, truck identification and staff uniforms. And it's being supported by a new marketing program with a new slogan: "Big enough to serve you, small enough to know you." The new initiatives mark a major response by IRLY to intensifying competition. A year ago, the 54 IRLY dealer members rejected a proposal to merge with Rona inc. Even though a couple of dealers decided on their own to join Rona, most stayed put — but recognized the need for more. "Dealers understand that it's time for change," says Dixon. "They've looked at the Rona program, but decided to stay with us." The solution being offered is what Dixon calls "a store in a box," with all the elements needed for a dealer to update their business. Three stores have already committed to the new program, and Dixon says the entire membership is keen to get involved.
AJAX, Ont. — One of Canada's largest buying groups may have lost one of its newest members, but increased sales from its remaining member companies continues to drive the group's growth.Independent Lumber Dealers Co-operative lost more than $260 million in retail sales with the sell-off of Totem Building Supplies to Rona inc. last month, but ILDC general manager Andrew Battagliotti says the group will be choosy about filling the hole. "It becomes obvious that we will want to replace some of that lost volume in the west," he says. "But our own members have grown, and will continue to grow."Although there are only 24 members in ILDC, that membership represents almost 140 stores generating approximately $2 billion in sales at retail. This "elite" cadre, most of them privately held companies, is very picky about who can join. "It's more than just membership," says Battagliotti. "There's a sense of camaraderie, generated by like needs among similar businesses. And as a co-op, everyone contributes to operations" — including buying decisions and the sharing of best practices. But with no members in British Columbia or Alberta, ILDC nevertheless wants to beef up its ranks there. "Obviously, we're looking for people," Battagliotti notes. "We're looking for people of a like ilk. They have to fit."
CALGARY — The addition of Steve Stremecki to the ranks of Tim-BR-Marts Ltd. underlines this member-owned buying group's emphasis on growing its ranks. Stremecki assumes the title of director of business development for Ontario and Western Canada. Formerly with BPB Westroc, where he served for many years, most recently he managed the U.S. Division for Kenroc in Minneapolis.In fact, before joining Tim-BR-Marts, Stremecki was expected to move to another Kenroc company, Sexton Group, which is also a competitor to Tim-BR-Marts.Tim Urquhart, president of Tim-BR-Marts, explains what the hire means to the group. "What keeps me awake at night is realizing there are so many opportunities out there in Canada for our dealers, and not having enough time to get after them all before the competition does," he says. "Steve's going to help us go after those opportunities." Growing the member ranks is certainly one of those opportunities, and Tim-BR-Marts has added four new members recently.
WASHINGTON — What bubble? Predictions that homebuilding in the United States would tail off in 2004 proved premature, as the number of homes started for the full year rose 5.7% to 2,004,000 units, according to the Commerce Department. Single-family starts grew by 7.3% to an annualized rate of 1,678,000 units. All areas of the country showed gains except the Midwest, which was pulled down by a sharp decline in multi-family building activity.Evidence of a robust industry can be found in the quarterly reports of several of the industry's leading builders. D.R. Horton, the country's largest builder, reported a 31% increase in sales, to $2.7 billion, or 9,901 homes, for the three months ended Dec. 31, 2004, which represents Horton's first quarter in fiscal 2005. The Centex Homes division of Dallas-based Centex Corp., the country's fourth-largest builder, reported a 17% increase in quarterly domestic home sales, to $2.24 billion. "It is our view Centex will continue to achieve strong results in fiscal 2006 [its coming fiscal year] even in an environment of incrementally higher mortgage rates," says Centex's CEO Tim Eller.Despite these results, however, some industry watchers still anticipate a downturn in the housing market in 2005. Margaret Whelan, a housing analyst with New York-based UBS Investment, observes that the industry's "third soft landing is unfolding" (the other two being in 1994-1995 and 1998-2000), and that "further declines" in homebuilding activity would occur over the next 12 months. Like many analysts, Whelan expects the industry's largest builders to continue to gobble up a bigger share of the market, of which the 10 largest companies now control more than 20%.
CHICAGO — The co-op channel has been paying too much for product, asserts Steve Mahurin. He's the senior vice-president and chief merchandising officer for the True Value Company.The member-owned co-op was renamed from TruServ, effective the beginning of the year. But the name is just one of many ways it's reinventing itself — a new mindset is emerging that reflects the influx of talent from other major retail segments. "All the co-ops need to evolve, if they want to compete," says Mahurin, in an exclusive interview with Hardlines. "And they have to continue to evolve to stay competitive."The evolution of the buying team has resulted in a much-publicized purge, as the department was reorganized to include the global product merchants, the product merchants and the merchandising assistants. "We've organized this to have fewer decision makers and more support staff, which will free the merchants up to develop new products and new programs, and make decisions faster." The change is aimed at giving the lead merchants more time to focus on product development, less encumbered by administrative duties. It reflects the new blood on the team, which includes Jim Richardson, formerly with Home Depot, now division vice-president of imports in charge of global sourcing; Lee Pell, now division vice-president of merchandising, who came over from was Rep-Tech, a consulting group; John Bonnot, who came over from Lowe's to serve as division vp of merchandising; and Laura McInnes, who brings her experience at Radio Shack to her role as division vice-president of inventory management.
WINNIPEG, Ont. — TruServ Canada has added the following new members: Alberta Hardware & Variety Ltd., Fort McLeod, Alta.; Swarbrick Enterprises, Frontier, Sask.; Ponass Lake Building Supplies, Rose Valley, Sask.; Border View Lumber, Cartwright, Man.; Acme Farm & Building Centre, Acme, Alta.; Hopedale Hardware, Oakville, Ont.; Onoway Lumber and Building Supplies, Onoway, Alta.; Marshall's Town and Country Supply, Strathroy, Ont.CALGARY, Alta. — Rona inc. has opened a new store here, at 3005 Ogden Road S.E. The 12,000-sq.ft. outlet, replaces a smaller one there. Operating as a Rona Building Centre, it features a contractor showroom and a technical centre that designs and sells roof and floor trusses manufactured by Rona Timbertec Truss. It sits atop a 10-acre lumberyard, carries 12,000-plus SKUs, and employs more than 100.ABBOTSFORD, B.C. — At the recent Westcoast 2005 Trade Show and Convention, the Building Supply Dealers Association of B.C., gave out its dealer awards. The winners are... Best in Class (under 5,000 sq. ft.): Sunbury Cedar, Delta; Best in Class (5,000-10,000 sq. ft.): Westside Building Centre, Kelowna; Best in Class (over 10,000 sq. ft.): Dick's Lumber & Building Supplies, Burnaby and Surrey. BARRIE, Ont. — Can-Save, the LBM distributor, will feature Canadian rock legend David Wilcox at its next Buying Expo. It will be held June 16, 2005 at the Barrie Curling Club. For more info, contact: 705-722-7283. WELLAND, Ont. — Prime Way Corp., a product development company, has struck a licensing deal with Sunbeam to use that brand name for Prime Way's line of storage and organization products for kitchen, laundry, bath, and home. Prime Way will convert its existing line of 50-plus wire storage products to the Sunbeam brand and plans to unveil many new items at the March International Home & Housewares Show in Chicago. EAU CLAIRE, Wis. — The U.S. Internal Revenue Service has ruled that Menard's, the third-largest home improvement retailer in North America, owes nearly $6 million in back taxes, asserting that the company wrote off more of its owner's salary seven years ago than it was entitled to. The IRS ruling comes after a judge decided in September that the company overpaid owner John Menard — the richest person in Wisconsin, according to the Milwaukee Journal-Sentinel — by $13 million in 1998. TOWSON, Md. — Black & Decker Corp. enjoyed a 29% sales increase in the fourth quarter, rising to $1.73 billion from $1.34 billion. In addition, profits rose 36%, due mainly to strong sales of its DeWalt and Black & Decker brands. Profits reached $135.3 million for the quarter, up from compared with $99.5 million. TORONTO — Sears Canada reported operating income of $140 million for the fourth quarter, compared with $109 million in the fourth quarter of 2003. Revenues increased 4.0% to $1.6 billion. Sales declines across most major merchandise categories were offset by favorable foreign currency exchange rates. Same-store sales decreased 1.7%. FEDERAL WAY, Wash. — Weyerhaeuser reported earnings of $1.3 billion for 2004, on net sales of $22.7 billion. That's up from $277 million on net sales of $19.9 billion for 2003. Fourth-quarter 2004 earnings were $199 million on net sales of $5.9 billion. Last year, Weyerhaeuser reported fourth-quarter net earnings of $92 million on net sales of $5.1 billion.
Jacques Déry has left Bargain Building Supplies, where he had served as general manager. No replacement has been named for him. His duties are now being covered by others at this St-Antonin, Que.-based retailer.At Lowe's Cos., Robert Niblock has assumed the additional roles of chairman and CEO. Niblock, 42, has served as president for the past two years, and served as chairman and CEO-elect and a member of the board of directors since April 5, 2004. He succeeds retiring chairman and CEO Robert Tillman, who spent 42 years with Lowe's.Aurelio Perrella has joined First Alert/ BRK Brands, a division of Sunbeam as vice-president, new business development. This post will find Perrella relocating to the Chicago area.
Retail sales in Canada dipped slightly by 0.1% in November, to $29.5 billion, says Statistics Canada. Sales in general merchandise stores were off by 2.3%, while sales in furniture, home furnishings and electronics stores dipped by 1.9%. Shoppers spent 1.4% more in building supplies stores.
The western trade show, the Prairie Showcase, put on by the Western Retail Lumber Association, managed to withstand only a slight drop in attendance due to bad weather last week. Despite the snow, 213 exhibitors filled 422 booths — and wrote business — at the two-day show, which was held in Saskatoon. This was the WRLA's 12th annual show.

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