vol. ix, #1 January 6, 2003

* Sodisco-Howden awaits federal approval of Ace purchase * Hardlines exclusive: Rona's Robert Dutton (no fooling, a real interview) * Industry leaders, Tillman of Lowe's, converge on Cologne * Hardlines gets new look for 2003 * Home Depot opens 1,500th store * 84 Lumber tops US$2 billion
"Fortis fortuna adiuvat." (fortune favours the brave) - Terence (c. 195-159 B.C.) "Be fearless. But don't get crazy." - MM
NEW YEAR BRINGS NEW LOOK FOR HARDLINES:
2003 ushers in our 9th year serving you! And it brings a new look for Hardlines. With the help of BRANDID, a very exciting branding and packaging company, we've redesigned our logo and refocused our mission to remain the premiere news service for the home improvement industry! Watch for more to come as the year unfolds! - Michael
AND A NEW LOOK FOR OUR HARDLINES SHOW BREAKFAST:
Join Hardlines and Hardware Merchandising for the First Ever Industry Awards Breakfast to kick off the Canadian Hardware and Building Materials Show. It's on Sunday, February 2, 2003, from 7:30 a.m. to 9:00 a.m. at the Civic Ballroom, Sheraton Centre Hotel, Toronto. This year, we're combining the world famous Hardlines Industry Awards Breakfast with the Outstanding Retailer Awards. This combined program guarantees a great wakeup for the CHS. The Awards Breakfast is free to Hardlines subscribers, and to guests of Hardlines and Hardware Merchandising magazine (with some restrictions!). You must reserve your space, so please RSVP to Nancy at 416-489-3396; nancy@hardlines.ca . Remember, the Hardlines Show Breakfast is held exclusively for Hardlines subscribers and guests, so be sure and join us!
HARDWARE SHOW SPECIAL: YOUR PRODUCTS & SERVICES ONLINE!

Advertise your products online and take advantage of our bonus circulation at CHS. Reach 2,000 more qualified readers at Canada's premiere trade show! Be part of the excitement that is Hardlines. Contact Beverly Allen, Marketing Manager, for details: bev@hardlines.ca

SODISCO-HOWDEN PURCHASE OF ACE GETS DELAYED
Montréal, QC — Federal regulators are holding up the closing of Sodisco-Howden Group's acquisition of Ace Hardware Canada, pending review under the Competition Act. The review by the federal Competition Bureau is necessary to obtain regulatory clearance of the deal, but the approval didn't come through before the end of 2002. As a result, the deal's closing has been delayed into 2003, and is now expected to close before the end of the first quarter. The delay does not, however, bode ill for the deal, says Sodisco-Howden president and CEO Jos Wintermans. "The parties are working well together," he says, referring to his company's negotiations with both Ace and the Competition Bureau. "There's no reason to believe that this won't be closed in this quarter, or at the latest early in the next quarter." He explains that a routine investigation is under way, delayed more by the Christmas holidays than any complications in the deal itself. Wintermans has met with them already, and has additional briefs prepared to send them this week. On October 22, 2002, Sodisco-Howden announced it had signed a letter of intent with Ace Hardware Corp. of Oak Brook, IL to purchase the assets and outstanding shares of Ace's Canadian operation. The result will be a strategic alliance that sees Sodisco-Howden licensing the Ace banner in Canada.
DUTTON SPEAKS: RONA SEEKS WESTERN EXPANSION
Boucherville, QC — With more than one-quarter of its business already coming from Western Canada, Rona Inc. wants to continue expanding its dealer base in the West, says Robert Dutton, president and CEO of Rona. In an exclusive interview with Hardlines Quarterly Report, Dutton outlined his plan to make Rona a household name west of Ontario. "That's why we want to build a new distribution centre in the West in 2003," he says. "Our facility in Calgary is currently 80,000 sq.ft. To accommodate growth, we'll need around 200,000 more sq.ft. That will give us a good base for recruitment and to expand our Revelstoke and Revy stores." Dutton has made clear his intention to continue looking for further acquisitions. While he admits to having some discussions with retailers, no deals are on the table at this time. Rona owns almost 11% of the hardware/home improvement market (according to HQR's ranking of the industry's top retailers). Dutton wants to push that share to 20% by 2007. (For the full interview with Robert Dutton, see the latest issue of our sister publication, Hardlines Quarterly Report. Also in that issue: our annual Retail Trends Report and the incredible Buying Group Org Chart.)
COLOGNE SHOW WILL FEATURE WORLD-CLASS CONFERENCE
Cologne, Germany — A world forum on home improvement retailing will kick off the 2003 edition of Practical World, the International Hardware Fair/DIY'TEC. Organized by BHB, the German association of hardware retailers, the one-day conference will be held on Saturday, March 8, 2003. Practical World Conference will feature Joseph Galli, Jr. of Newell Rubbermaid, former Home Depot executive Jim Inglis, Gilles Caille of Fediyma (and past presenter at the Hardlines Marketing Conference), George Adams of Britain's B&Q, and many others. The highlight of the day will be a keynote by Robert L. Tillman, president & CEO of Lowe's Cos. Topics of the day will include panel discussions on the international DIY scene, partnerships between retailers and suppliers, and new concepts in consumer preferences. The day concludes with a cocktail reception, beginning at 5:30 p.m. Cost for the Practical World Conference is 490 euros + VAT. This includes lunch, beverages and admission to the Practical World Hardware Fair, which begins the following day. Discounts are available for multiple registrations. (For more information about attending Practical World and the Practical World Conference, contact: Barbara Hills, Canadian manager for Cologne International Trade Shows: 416-598-3343; colognet@idirect.com. )
NOTED…
Don't miss Practical World 2003, the Cologne International Hardware Fair/DIY'Tec. The 2003 show is March 9-12. For show information, contact Barbara Hills at 416-598-3343 or email colognet@idirect.com. To book your flight and hotel, call Carol-Ann Itel at Trade Show Travel, 1-877-873-7469 or email tradeshowtravel@shaw.ca . And new this year is the V.I.P Reader Trip— ask Carol-Ann!
   
COMPANY 52-WEEK HIGH 52-WEEK LOW NOON FRIDAY
Canadian Tire 33.47 23.96 33.30
Canfor 11.70 6.83 9.35
Costco 46.90 27.90 28.25
Emco 12.79 6.30 12.70
Goodfellow 13.99 9.00 11.45
Home Depot 52.60 23.01 21.38
Hudson's Bay 15.55 5.87 9.21
Lowe's Cos. 49.99 32.50 36.92
Rona Inc. 14.75 13.25 13.70
Sears Canada 25.10 15.15 17.28
Sodisco-Howden 2.20 1.06 1.69
Taiga Forest 7.00 4.77 6.39
Wal-Mart 63.94 43.72 50.00
West Fraser 44.42 28.90 35.60
OVERHEARD…
"Dealers representing more than 725 stores attended. That indicates to us that we had about a two-thirds turnout, which is fabulous." - Jos Wintermans, president and CEO of Sodisco-Howden Group, on the turnout by dealers to Sodisco-Howden's first-ever combined dealer show in November 2002. The event brought dealers from across the country, served by both its Howden and Sodisco divisions.
NOTED…
Two home improvement groups get top marks in Chatelaine's annual survey of top customer service experiences. Castle Building Centres was cited for the third year in a row, getting special mention for knowledgeable staff, whose "individual attention made you feel as if you were talking to a hired contractor." True Value got kudos for staff that "showed a true concern for the customer's needs."
COMPANIES IN THE NEWS
Sodisco-Howden Group reported attendance at its Fall dealer show in Montréal in November 2002 of 2,500 dealers and their families and staff. This represented roughly 70% of the wholesaler's bannered customers. The show was the first-ever to combine two separate shows from its Howden and Sodisco divisions and generated $30 million in sales, an increase over the two shows a year earlier. Sodisco-Howden has committed to reprise the combined Fall show in 2003. Goodfellow Inc. reported 1Q sales of $128 million, up from $109.6 million a year earlier. Net profit for the period was $406,000, compared with $1.2 million during the first quarter of the previous year. The dent in profits was attributed in part to extremely competitive markets since September 2002, combined with a sharp downturn in U.S. business. Goodfellow is Eastern Canada's largest independent re-manufacturer and distributor of lumber products and the largest distributor of hardwood flooring products in Canada. Home Depot said it expects its profit for fiscal 2002 to be between US$1.53 and US$1.55 a share, versus earlier expectations of US$1.57. The retailer blamed lower-than-expected U.S. holiday sales of power tools and hardware, and a "challenging environment" well into fiscal 2003. Home Depot earned $1.29 a share in fiscal 2001. Home Depot opened its 1,500th store last month, this one one in Abilene, TX. The company expects to finish the fiscal year, which ends January 31, 2003, with a total of 200 new locations. Softwood lumber producers got a Christmas present from the federal government, $15 million to help them while Canada battles with the U.S. over its ridiculous tariffs on Canadian softwood. The money will be used by lumber industry associations that have acted as liaisons between Ottawa and the sector. 84 Lumber Co. reached a milestone at the end of 2002, exceeding more than US$2 billion in sales for the first time in the company's history. The Pennsylvania-based retailer, which focuses on professional contractors, claims to be the largest privately-held building supply company in the U.S., with 435 stores in 34 states and another 11 component plants in nine states. Sales in 2002 rose16.5% over 2001. Canarm Ltd., a producer of consumer lighting products and ceiling fans, was awarded as one of Canada's Top 50 best managed companies.The awards program recognizes Canadian companies that have world-class best business practices in a range of industries, including technology, retail, manufacturing and services. Intercraft, a division of Newell Rubbermaid, relocated at the end of December 2002. The new address is: 6711 Mississauga Rd., Unit 404, Mississauga, ON, L5N 2W3; phone: 905-363-2350. Restoration Hardware anticipates that fourth-quarter results will fall well below plan, citing weaker-than-expected Christmas holiday sales. The California-based high-end home furnishings retailer expects to post a net profit of 25-30 cents a share, down from previous guidance of 41-42 cents. Restoration is projecting same-store sales to grow a modest 2-4% in the fourth quarter, compared with its initial target of high single-digit to low double-digit growth. In December 2002, the company delayed filing its quarterly report to correct accounting irregularities. The errors will have no effect on earnings for the current fiscal year, the company said.
PEOPLE ON THE MOVE
Robin Lee has assumed the helm of Lee Valley Tools. Formerly vice-president of marketing, he is now president of the specialty woodworking and garden catalogue company, taking over from his father and Lee Valley founder, Leonard Lee, who will assume the role of chairman. (613-596-0350) Greg Bolig has been appointed vice-president of sales for Builders FirstSource's Southeast Group. The newly created appointment is part of a revised sales strategy for the retailer. He will direct and support the group's sales efforts to create a stronger, sales-oriented approach to the business.
IN MEMORIAM
I'm sad to report the passing of Ken Judd of London, ON on December 12, 2002. Ken was a longtime member of the hardware industry, working for many years at the Howden division of Sodisco-Howden Group before joining Rona Ontario nine years ago as development manager for Western Ontario. He is survived by his wife, Wendy Judd, his children, Dale Judd and Teresa Davies, and his brothers Chris, Rick and Barry Judd, and sisters Gaye Smith and Dawn Craig.
MARKET INDICATORS
Retail sales advanced 1.7% in October to $26.0 billion, after remaining essentially flat since June. Consumers went on a shopping spree in October, spending heavily on clothing and automobiles. Before June, which was up 1.8%, sales by retailers had remained essentially unchanged since the start of the year. Canadian consumers experienced a 4.3% increase in inflation in November, compared with the same month a year earlier, according to Statistics Canada's Consumer Price Index. This increase is considerably larger than October's 3.2% rise, but due largely to low energy prices last year. Wholesale sales rose 0.6% in October to $35.5 billion dollars, says Statistics Canada. However, not including automotive products, which were up 3.6%, total wholesale sales would have been flat (-0.1%). Otherwise, wholesale sales have been on the rise since the fall of 2001. Housing starts in the U.S. edged up in November by 2.4%, partly reversing a big slide in October, says the Commerce Department. But home building intentions, as tracked by sales of building permits, were down 2.7%. Sales of new homes in the U.S. rose 5.7% in November, according to a government report. The lowest mortgage rates in more than three decades encouraged buyers, especially first-time buyers, as affordable, single-dwelling housing led the way.

****HARDLINES MARKETPLACE**** Check out Hardlines Classifieds on the web: https://hardlines.ca/html/classifieds_new.asp

HELP WANTED ONTARIO RETAIL ACCOUNT REPRESENTATIVE(commissioned sales) The MIBRO Group, a leading North American supplier of Power Tool Accessories, Chain, Chain Accessories, and Lawn and Garden Products is expanding its Sales Team. We are looking for an enthusiastic & competitive “road warrior” to grow our non-key account business throughout Ontario. Qualifications: Proven track record in sales to retail accounts, merchandising skills, a “road warrior” (extensive travel throughout the province) with a reliable vehicle & valid drivers license, and computer-literate. Please submit a resumé by email stating qualifications and income expectations to esmith@mibro.com. *********************************************************************************** NATIONAL ACCOUNT MANAGER & MARKETING COORDINATOR The Company: Maxtech Manufacturing, one of the fastest growing designers, manufacturers and distributors of hand and power tool accessories is looking for an account manager to grow our expanding Canadian and U.S. customer base. We have over 28 U.S. utility patents with many more pending. We offer a dynamic work environment, a solid customer base, and innovative products to sell. We are a multi industry, multi location privately held company based in Waterloo, Ontario. At Maxtech: Strength through People, Diversity and Innovation. Visit us at our Web site: http://maxtech-mfg.com We are recruiting for two positions: NATIONAL ACCOUNT MANAGER Represent Maxtech in sales presentations to a large customer base in N. America, extensive travel required. Work with Sales Agents to manage and direct their sales activities. Devise sales strategies for his/her accounts, plan product positioning and create promotional ideas to increase customer base and increase product penetration with existing customers. Provide inventory requirement forecasts to our purchasing team. Provide feedback about price competitiveness, competitor activity, and customer reaction to our product and its features. Budget sales by customer and sku annually and complete weekly customer activity/progress reports. Organize and attend trade shows. Your Personal Tool Box will include: -Demonstrated ability to grow sales in the DIY Hardware/Power Tool Accessory market with a keen sense of the market, US experience an asset. -Strong analytical skills. -Self Starter with good organizational and prioritisation skills. -Excellent Communications (written and oral) and Presentation skills, ability to recognize/identify customer needs and translate into product sales. -Degree /diploma in marketing or sales an asset. MARKETING CO-ORDINATOR As a key member of our sales and marketing team, you will work closely with the Director, Sales & Marketing, Marketing Communications Associate, National Account Managers, and others, to provide assistance, research, recommendations and in some cases be solely accountable for the marketing aspects of : -New Product Development; -Competitor analysis; -P.O.P. Material; -Product Launch; -Catalogue Development; -Trade Show Co-ordination; -Customer Service/Support. Your Personal toolbox will include: Relevant post secondary education in marketing. Marketing degree or diploma preferred. Previous experience in the D.I.Y. hardware industry preferred. Demonstrated ability to apply program management skills to brings issues from the concept to fully implemented stage. Ability to think outside the box, and problem solve in a team setting. Effective communications skills to represent Maxtech to Customers. Self starter with ability to multi-task and prioritize. Proficient in standards Microsoft Office Products. Ability to occasionally travel and attend week-end and evening trade shows. If you are interested in either of these opportunities, please forward your resume to: Director, Sales & Marketing, Maxtech Consumer Products Group, 600 Weber St. N, Waterloo, Ontario N2V 1K4; Fax: (519) 884-5327; Email: davem@maxtech-mfg.com (this is the preferred option, as a WORD attachment)

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TRADE MARKETING MANAGER Our Toronto-based Client is seeking a Trade Marketing Manager to join their company, a consumer durables firm consistently #1 in their category and continuing to grow and dominate with high market share. As a key member of the senior management team, take true ownership of this function that reports directly to the Vice President, Sales & Marketing. The successful candidate will have an immediate impact on the organization through their outstanding marketing, analysis and people management abilities. Regular involvement in product line extensions/reviews, packaging, pricing/margin management, seasonal promotions, POP development, and assisting the Field Sales Management team in applying fact-based selling. REQUIREMENTS:* 7-10 Years experience in trade marketing/sales of consumer durables. * Enjoys working in a streamlined organization that has enjoyed spectacular growth and is poised to continue growing through market share and competitor acquisition. * Hands-on management by example; knows how to motivate direct reports and other work colleagues.* Business degree/diploma, bilingual advantageous. Looking to help a company continue its marketing sophistication level? Please contact Wolf Gugler in complete confidence, quoting file # C-26. Wolf Gugler & Associates Limited. 1370 Don Mills Road, Suite 300, North York, Ontario M3B 3N7. Phone: 416-386-1719. Email: resumes@wolfgugler.com Web site: www.wolfgugler.com *********************************************************************************** TERRITORY SALES MANAGER Our continued growth in Canada has opened up an opportunity for an energetic and self-motivated individual to join our team. We are looking for a territory manager for Ontario and Quebec who will provide direction for our regional sales staff and help grow our business in lumber yard markets. Qualifications: Minimum 5 years account management experience, highly developed interpersonal and communication skills, good analytical skills and experience with mass merchandise retailers. Must be bilingual and willing to travel. This is a management position and this person will report to the Canadian Sales Manager. Please submit a resumé by email or fax stating qualifications and income expectations to Mitten Vinyl Inc., c/o Human Resources to freddie@mittenvinyl.com; fax: 519-442-3214. *********************************************************************************** PRODUCT MANAGER The INNOVAK GROUP, a Canadian manufacturer and importer of hand tools and related products, is seeking to expand its marketing and sales team. The successful candidate will have the responsibility of managing the key product lines of the company, with specific emphasis on new product development, introducing new products as well as merchandising the product line. Working out of Montréal, the candidate must have 3 to 5 years of marketing background with specific experience in the retail hardware industry. Strong merchandising, analytical and computer skills are a definite asset. Please reply in confidence by fax to 514-695-4997 [attention Director of Marketing] or via email to: jbazar@innovak.com.

*********************************************************************************** KEY ACCOUNT EXECUTIVE Our continued growth in the United States has opened up an opportunity for an energetic and self-motivated individual to join our sales team. We are looking for a Key Account Executive to help grow our business within our Tier 2 accounts in the USA and to assist in developing our secondary markets.

  Necessary qualifications: 3-5 years account management experience, highly developed interpersonal and communication skills, good analytical skills and experience with Mass Merchandise retailers is preferred. This is an intermediate position and the successful candidate will be working out of our world-wide headquarters in Woodbridge, Ontario.   Please submit a resumé by email or fax stating qualifications and income expectations to: Camillo Caperchione, Vice President Sales & Marketing, Better Living Products, Telephone: 905-264-7100 Fax: 905-264-3690 Email: camillo@dispenser.com

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Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2003 by Michael McLarney. HARDLINES™ the electronic newsletter hardlines.ca Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: mike@hardlines.ca Beverly Allen, Marketing Manager: bev@hardlines.ca Nancy Wright, Circulation Manager: nancy@hardlines.ca ______________________________________________ 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. We do want as many people as possible to read Hardlines each week – but let us handle your internal routing from this end! ______________________________________________ Subscription: $199+$13.93 GST = $212.93 per year (GST #13987 0398 RT). Secondary subscriptions at the same office are only $28 + $1.96 GST = $29.98. Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to McLarneyCom.