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“How wonderful it is that nobody need wait a single moment before starting to improve the world.” — Anne Frank |
| HOME DEPOT TO TEST CONVENIENCE OUTLETS |
ATLANTA — Home Depot has announced plans to try out a convenience-store concept that will include a gas station and deli. The concept will involve putting convenience stores and gas stations right in the parking lots of four Home Depot stores on a test basis in Nashville, Tenn., beginning in December of this year. Two of the locations will have car washes attached to them.  The concept takes the convenience offerings currently inside the store, such as McDonald’s and donut shop, and enhances them outside the store, making for a convenience destination for anyone looking to pick up a jug of milk and a couple of two-by-fours.This test would represent the latest attempt by Home Depot to introduce the sale of food at its warehouse home centers. In the early 1990s, the company experimented with mini food courts in a few stores around Atlanta, and has also tested smaller versions of McDonald’s and Dunkin’ Donuts within its stores.
Canadian Tire announced a similar, but more refined, convenience model earlier in the spring. Called “Q,” it’s a convenience gas-and-groceries format that involves Canadian Tire gas stations, along with a scaled down Sobeys store, called “Sobeys Express,” which carries everything from fresh flowers to deli. The concept is rounded out with a Starbuck's and a Richtree restaurant. Two trials are up and running in Ontario so far – in Milton and Windsor. |
| HUDSON’S BAY HAS A PLAN TO IMPROVE RESULTS |
| TORONTO — Poor results continue to dog the world’s oldest retailer, and key investors, including U.S. businessman Jerry Zucker, are losing patience. However, the company has a three-pronged strategy to turn it around, one that focuses on power buys and large ticket sales.Pressure is coming from shareholders – especially millionaire investor Jerry Zucker, who owns almost 30% of Hbc stock – following a 1.4% drop in sales that resulted in a $41 million loss in its first-quarter. Sales declined in the Bay and Zellers, but were partly offset by an increase in the company’s Home Outfitters, which sells housewares, kitchenwares, bath décor and seasonal products. Same-store sales in the first quarter decreased by 2.1% at the Bay (including Home Outfitters), but increased slightly – by 0.4% – at Zellers. “The re-engineering of the company to our strategic plan, while arduous and multi-faceted, was essential to building the 'One Hbc' of the 21st century," said Hbc CEO George Heller in a prepared release. “We are confident that the improved internal and external environment is such that we can grow sales by two to three percent in the medium term.”
Like other Canadian retailers, such as Canadian Tire, Hbc is taking a page from Target’s book. For the Bay, that strategy includes ongoing upgrades of its existing stores, plus focus on higher end brands that deliver a value proposition at a slightly higher price. Those brands will often be purchased through “power buys” or in an off-price situation that finds them ending up in a new stand-alone format called “Designer Depot.” The company’s “Big Ticket Initiative” puts added emphasis on sales of home electronics, furniture and major appliances, all of which figure prominently in the Bay’s latest flyer promotions.
At Zellers, the discount department store chain, the focus is on upgrading and revamping existing stores to make them brighter, and adding focus to lines such as clothing, some grocery items and packaged foods. |
| FRESH IDEAS, NEW CONCEPTS RULE AT CONFERENCE SERIES |
TORONTO — How can you meet Rona, Home Depot, Home Hardware, Castle Building Centres, Canadian Tire, TruServ and Tim-BR-Marts all in one day? In one room? Easy. They’ll all be at this year’s Hardlines Conference Series and Awards Gala. The two-day summit, Sept. 12-13, is the gathering place for our industry’s leading retailers and suppliers. There, they’ll get first-hand insight into the latest retail trends, information and intelligence that will guide this industry – from some of retail’s leading experts.How will the cooling housing market affect your business? What impact will the age of housing stock have on the repair and renovation market? We’ll have our usual lineup of experts to explain the market. What are the hot retail concepts? How do you have to adapt your business to today’s changing customer?
 “Taking our business to the customer: the power of B2C”: Albert Plant, retail consultant and RBC Retail Industry Advisor, is will launch the Conference on Day One as our keynote. What are the top issues facing retailers today? And how can you cope with those issues – and better yet – profit from them? Plant, our numero uno retail guru, has wowed Conference audiences in the past – don’t miss him this year!
 “Growth Mining: the new imperative for retailers”: Al Meyers, Senior Vice-President with Retail Forward, will continue our program on Day One with information that will make you re-think how you do business. (I’m not exaggerating here – both these guys will give you profitable, business-building insights! — Michael)
Finally, Michael McLarney, your very own Hardlines Editor, will offer the latest data on the size of the industry, and identify which retail formats are growing fastest – and why.
For more info on the Hardlines Conference Series, Sept. 12-13, <click here> or call Isabel Bisong at 416-489-3396; isabel@hardlines.ca. |
| RONA EXPANDS WESTERN PRESENCE WITH VERNON STORE |
| Vernon, B.C. — Rona continues to expand its presence in Western Canada with the opening today of a Rona Home Centre in this community at the north end of the Okanogan Valley. A $10-million-plus investment, the new store weighs in at 52,000 sq.ft., with a two-acre lumber yard. It replaces an existing Rona store there, and adds to Rona’s presence in the West, where growth has relied on dealer conversions, and in one high-profile instance, an acquisition, with the takeover of Calgary-based Totem Building Supplies, which has 16 stores in Alberta representing $260 million in sales.The Vernon store, while not as large an operation, will nevertheless further Rona’s plans to create corporately owned traditional-style operations across the country. The importance of the opening was evinced by the presence of Rona president and CEO Robert Dutton for traditional the “beam-cutting” ceremony. The new Home Centre creates 35 new jobs on top of the 45 existing staff being transferred from the former location. |
| ACE WANTS MORE CONTROL OF DEALERS’ INVENTORIES |
| OAK BROOK, Ill. — In an effort to strengthen the company through greater dealer loyalty at the supply level, Ace Hardware Corp. continues to exercise greater control of products and brands in dealer inventories. The move may reflect new CEO Ray Griffith’s experience at the erstwhile Coast to Coast, where head office selected products and brands so that advertising and assortments were common among all Coast to Coast stores. Individually, Coast dealers could supplement and diversify their selections by buying from other wholesalers, but there was far more uniformity in inventories than among any other group of hardware stores.However, a number of dealers have developed some very powerful brands, and those dealers have built up strong sales promoting those brands. It would seem that Ace would not want to interfere with those distribution agreements.Griffith, whose career ranges from his Coast to Coast experience to a stint with ServiStar Coast to Coast when ServiStar acquired Coast, wants to avoid the kind of upheaval that decimated the former number-one wholesaler, Cotter & Co., when it merged with ServiStar Coast to Coast and became TruServ. In the process, it suffered severe financial and operational problems, losing a large number of retailers – many to Ace.
To avoid upsetting younger, aggressive dealer-members, Griffith has formed a “progressive Ace leader” advisory council of dealers 40 and under. It is this next generation of owners that Ace realizes it must satisfy as it seeks to grow. |
| N.Y.-BASED FIRM INVESTS IN GERMAN RETAILER |
 DORTMUND, Germany — A New York-based firm that specializes in sale-leaseback arrangements has agreed to purchase 16 stores from the home improvement retailer Hellweg Die Profi-Baumärkte GmbH & Co. KG for US$154 million. In exchange, Hellweg will lease back those stores, located in 16 different cities, through a 25-year agreement. This would represent the largest single investment in Europe to be made by the investor, WP Carey & Co., which last year struck a $31 million deal in Finland with a company called Plantasjen ASA. “We anticipate an increase in our investment volume in the months ahead as more European companies realize the benefits [of sale-leaseback transactions],” WP Carey’s president Ed LaPuma stated. All told, WP Carey has invested about US$540 million in Europe over the past 16 months. Hellweg operates 73 stores across Germany and seven in Austria. |
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| COMPANIES IN THE NEWS |
| BURNABY, B.C. — Taiga Forest Products Ltd. has taken further steps in its conversion to an income fund type of structure under the name Taiga Building Products Ltd. At the company’s annual meeting held last week, shareholders passed a resolution in support of the previously announced proposed arrangement, under which the company will be converted through the exchange of shares of the Taiga Forest for stapled units of Taiga Building Products. Completion of the arrangement is subject to a number of conditions, including the completion of the previously announced initial public offering and secondary offering of stapled units of New Taiga and the final approval of the Supreme Court of British Columbia.OAKVILLE, Ont. — The two major shareholders of GSW Inc. are in discussions for a possible sale to A.O. Smith Corp., a Wisconsin-based manufacturer of electrical motors and water heaters. GSW is a manufacturer of durable consumer products through two divisions, Water Products and Building Products. It also owns 20% of appliance maker Camco. GSW’s roots date back to the McCleary Manufacturing Co., which made heavy appliances (our first hand-me-down fridge when I was a junior Hardliner growing up in Scarborough, Ont., was a McCleary — nostalgic Mike) since 1847. The company now employs 600 in Canada and 1,000 in the U.S, with profits in 2004 of $4.5 million on sales of $144.9 million.ST. JACOBS, Ont. — To celebrate Canada’s 138th birthday, Home Hardware dealers, together with the Tree Canada Foundation, planted hundreds of trees across the country this past weekend. In total, 41 communities participated in the nationwide tree planting initiative. Home Hardware has worked with the Tree Canada Foundation for the past six years, with the planting by dealers of thousands of native evergreen trees, and donations from head office of more than $300,000.
MOORESVILLE, N.C. — Lowe’s has announced it will add even more space to its ever-growing headquarters facilities here. The Charlotte Observer reports that the industry’s second-largest dealer will begin construction early next year on the expansion that will allow Lowe’s to accommodate 2,000 more employees, including 500 information technology associates who will relocate from another Lowe’s facility in Wilkes County, N.C. The construction should be completed by 2008. Fifteen months ago, Lowe’s announced it would add to the Mooresville campus to handle another 600 employees. That construction should be completed this fall. Ultimately, the Mooresville site will have the capacity to hold 8,000 associates.
ATLANTA — Home Depot has finalized the acquisition of a pro-oriented lumber yard chain, Williams Brothers Lumber. The company has 16 outlets, selling exclusively to residential and commercial builders. It will operate within Home Depot’s pro supply division, Home Depot Supply. The acquisition adds sales of US$444 million to Home Depot.
SUMNER, Wash. — Ace Hardware has announced it will open a warehouse in this area near Tacoma, to handle imported products from the Orient. Ace spokeswoman Natalie Danaher told the Tacoma News Tribune that Ace will bring imports into the 427,000-sq.ft. warehouse for distribution to its 15 regional distribution centers, or on a direct-ship basis to its stores. Ace opened a buying office in Hong Kong last year to facilitate exports from the Far East, mainly China. |
| PEOPLE ON THE MOVE |
| At its recent annual meeting, the TORBSA Group, the Ontario-based LBM buying group, elected its 2005 board of directors: Joe Driscoll of Byron Building Supplies Ltd. North Bay, has been elected as president of TORBSA … The other members are: Mike Mayhew of Select Acoustic Supply Inc., Concord, past president; Martin Lieberman of Blair Building Materials Inc., Maple, vice-president operations; Claude Morin of Morin Bros. Building Supplies Inc. Ottawa, secretary; Blake Oldershaw of Oldershaw Building Supply Co. Ltd., Chatham, treasurer; and Ed Caklos, Chauncey Builders’ Supply Inc., Toronto; vice-president. |
| MARKET INDICATORS |
| Consumer spending and business investment drove first-quarter growth, according to an assessment of current economic conditions by Stats Canada. Its June edition of the Canadian Economic Observer reports that these gains were offset in part by a drop in housing and a slowdown in inventories, while the growth of imports continued to outstrip exports. Business investment rose 8% in volume year-over-year. |
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John Caulfield, Contributing Editor
vol. xi, #27, July 04, 2005
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(01/05)
