July 20, 2015 Volume xxi, #29

“Those who look only to the past or present are certain to miss the future.”
—John F. Kennedy (35th President of the United States, 1917-1963)

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SUMMER PUBLISHING SCHEDULE

There will be no weekly edition of HARDLINES on August 3, 17, or 31. The World Headquarters will remain open, however, during this time. The regular weekly schedule will resume September 7.

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RONA to acquire its franchise stores in Quebec and Ontario

BOUCHERVILLE, Que. — After six months of negotiations, RONA inc. has signed a letter of intent to acquire the 20 franchise stores in its network. Those stores consist of 15 big box L’éntrepôt stores and three RONA proximity stores in Quebec, plus two big box RONA Home & Garden stores in Ontario—in the Nepean and Gloucester communities of Ottawa. Together, they represent more than $500 million in retail sales.

The company’s stated purpose for making the acquisition is further consolidation in an effort “to simplify our business model and focus on the sales of our independent dealers,” according to President and CEO Robert Sawyer.

Luc Rodier, executive vice president at RONA, offered more details in an interview with HARDLINES. The stores are all well run and very profitable, he notes, adding that they have been operated by “very, very good dealers; very strong supporters of the RONA brand.” But the new structure, he says, will make RONA more responsive and efficient by removing a layer of management. The move, he insists, is aimed at simplifying the business and increasing RONA’s profitability, and not a play to prepare the company for sale.

Ownership of the 20 franchise stores is currently spread over nine different retail groups, some of which are family operations. Four of those groups will continue to own and operate multiple RONA proximity stores. While Rodier wouldn’t provide details, he insisted the deal would preclude any of the groups from opening new stores under other banners.

The franchise stores represent a partnership RONA struck with some of its biggest members when the company decided to enter the big box market in 1994. It did so with what was, at the time, a unique strategy: allying with independents to help them build big boxes of their own to compete against the incursion of Home Depot and other large-surface chains at the time.

With this deal, RONA will have 236 corporate stores. Seventy-nine are big boxes, with 60 operating as either RONA Home & Garden in anglophone markets or RONA L’éntrepôt in Quebec. Another 19 big boxes operate as Reno-Depot. In addition, RONA has a strong network of 275 independent “affiliate” dealers that source their products from RONA’s distribution network. In total, RONA will have 511 stores.

Rodier says the new structure will also let RONA focus better on those remaining affiliate dealers, which are located across the country.

(Click here for a full listing of store sites.)

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Outstanding Retailer Awards: deadline in two weeks!

WORLD HQ, TORONTO — The Outstanding Retailer Awards are the industry’s only independent awards program dedicated to celebrating the achievements of hardware, home improvement, and building supply dealers in Canada. In its 23-year history, the program has honoured more than 140 retailers. Now it’s your turn!

All Canadian home improvement retailers that have operated under the current ownership for at least two years are eligible to enter their stores. But the deadline is 5 p.m. EDT, July 31, so act now to get your entry in!

Dealers may submit their entries directly, while chain and buying group head offices may select their best dealer(s) and prepare their entries for them, in collaboration with the dealer. Head offices may enter more than one store per category. Vendors can get involved, as well, by identifying specific outstanding retailers for entry.

Categories to enter:
1. Best Hardware Store (any size)
2. Best Building Supply/Home Centre (under 15,000 square feet)
3. Best Building Supply/Home Centre (over 15,000 square feet)
4. Young Retailer Award (a store manager 35 or under; entrants may be owners or chain employees)
5. Marc Robichaud Community Leader This award is open to all stores. Its purpose is to celebrate the outstanding contributions/events, charitable donations, etc., made by a store’s staff/managers/owners to the community they serve.
6. Best Large Surface Retailer (over 65,000 square feet)
7. Best Contractor Specialist Store

It’s easy to enter. You can submit  your entry online or print out this 2015 ORA PDF Entry Form or ORA Word Document Entry Form. If you send hard copy, submit your entry in a three-ring binder containing text and photographs describing your business successes.

Remember: deadline for entries is July 31, 2015 by 5:00 pm EDT. Winners and their banners or buying groups will be notified shortly after the judging, by a panel of industry professionals, is completed.

Award recipients will be honoured at the 2015 Outstanding Retailer Awards Gala Dinner on October 21, 2015, at the Westin Bristol Place Toronto Airport Hotel and Conference Centre, as part of the 20th Annual Hardlines Conference. Tickets and tables for the Gala can be purchased at www.oras.ca or by calling 416-489-3396.

(If you have any questions, please contact our Editor, Michael McLarney, at 416-489-3396, ext. 1, or mike@hardlines.ca.)

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Big boxes seek new ways to woo pros

SPECIAL REPORT — Both Home Depot and Lowe’s are looking for ways to attract customers who have typically been the domain of independents: contractors and pros.

Lowe’s has been putting emphasis on what it calls “pro-heavy categories,” watching sales in some categories grow by double-digits through the first part of 2015. Those products include siding, power tools, commercial lighting, fencing, and power tool accessories. In addition, pressure-treated decking, compressors, windows, tile-setting materials, concrete, board, insulation, and fasteners have all had comps above the company average.

Lowe’s own field merchants, supported by the company’s planning and assortment tools, are constantly refining assortments. Some product categories are sourced nationally and some are sourced regionally, based on customer preference. A delivery program is currently being piloted in a couple of markets in the U.S. that would reduce wait times for pro customers, offering two-hour, four-hour, and next-day delivery options.

The push to capture the pro customer may be going faster in the U.S. than here. There, it’s estimated to be as high as 35% of the business for Lowe’s and Home Depot, while in Canada, pro sales are estimated to be closer to one-quarter of sales (source: 2015 Hardlines Retail Report). At one of its newest stores, in Brampton, Ont., Home Depot’s amenities for contractors are clearly evident, such as a revamped checkout with more space to get large orders through. An order area for pros has terminals with computer screens and electronic card readers.

Mark Getty, Home Depot Canada’s regional vice president for Eastern Canada, says, “There’s room to grow our pro business. We’re making it a lot easier to park—and we have a drive through.”

Lowe's is likewise wooing the contractor customer in Canada with revamped assortments of key products, including flooring, while at the same time reducing other categories, such as cleaning and consumables.

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