John Caulfield, Contributing Editor
 vol. ix, #28 July 14, 2003

* Former Réno-Dépôt exec develops big boxes in New Zealand * Rival hardware shows begin selling space * Hardlines Conference adds media awareness lunch seminar * Housing starts stay strong in first half of year, B.C. bouncing back * Home Depot tries to land Florida site for distribution centre

"A lawyer with a briefcase can steal more than a hundred men with guns." — Mario Puzo (American novelist)
Auckland, New Zealand A Canadian is showing New Zealanders how to develop big boxes of their own. Benoit Leduc, a veteran of Montreal-based Réno-Dépôt Inc., left that company about 18 months ago to work for the Mitre 10 Hardware Group in New Zealand. The dealer-owned co-op wholesaler is similar to Home Hardware or Rona in Canada, and like Rona, it wants to develop a big box strategy of its own. (In fact, all three companies are part of an international association of dealer-owned companies called Interlink, which meets annually to share ideas. Two years ago, former Rona chairman Henri Drouin spoke to this group at its annual meeting.) Mitre 10 has more than 900 stores throughout Australia and New Zealand. Now it wants to add up to 25 big boxes under the MEGA banner. Leduc spent eight years at Réno-Dépôt, and was with the company during its efforts to transform itself from a traditional chain of building centres in the Montreal area into a big box player. Leduc started out as a store manager in Quebec and then Ontario when Réno-Dépôt rolled out The Building Box, its banner for English-speaking Canada. By the time he left, he was director of logistics and supply chain for Réno-Dépôt. Now he's helping the Kiwis to battle the arrival of Bunnings, the largest home improvement chain in Australia, with 110 warehouse stores, 100 traditional stores and about 14% of the market there. Bunnings already has a presence in New Zealand. Bunnings’ owner, Wesfarmers, bought the Hardwarehouse chain in 2001 and converted them to big boxes, including three in New Zealand. The retailer will open another store, this one in Christchurch, in October. The arrival of the big box is being met with some incredulity. "My belief is that they are struggling with the economies of scale in a country with a population of only four million,"” says Ross Middleton, group editor of Marketplace Press Ltd., which publishes New Zealand Hardware Journal. "My contention has always been that big boxes are not suitable or sustainable in this country." This isn't the first time Mitre 10 has relied on Canuck expertise. The company's banner and look were developed by Toronto-based The Watt Group back in the mid-80s.
Toronto, ON — Understanding how best to promote your company amidst a clutter of media messages will be the focus of a special Media Awareness Lunch at the Hardlines Conference Series this fall. Presented by the industry magazine, Hardware Merchandising, and sponsored in part by Meadwell & Associates, the lunch, on September 3, 2003, will feature Meadwell's president and senior brand strategist, Len Meadwell. Staying top-of-mind with retail, DIY and pro customers is a huge challenge. Join Meadwell over lunch and find out how to meet that media awareness challenge head on. With more than 30 years of marketing, communication and branding experience for clients that include General Foods, CIBC, Sun Life, Bell Canada and Molson Breweries, he will deliver valuable pointers on optimizing any company's brand and increasing media awareness. Hardware Merchandising has partnered with Hardlines to present this important session, which will be part of our incredible two-day Conference Series. The event will be available at no charge to registered delegates of both the Hardlines Retail Strategies Symposium on September 3 and the Hardlines Marketing Conference on September 4. To book your seat, contact us at 416-489-3396.

Atlanta, GA Home Depot continues to look in southern Florida for a location where it can place a distribution centre that local development sources say will be between 500,000 and 750,000 sq.ft. in size.

The Palm Beach Post reports that the retailer is considering several locations, including Port Everglades and the Palm Beach Park of Commerce, where Walgreen's, the drug store chain, currently operates a large facility. However, the South Florida Business Journal has already reported that Home Depot has gotten cold feet about the Port Everglades location, where it was expected to signed a 30-year lease for 54 acres by this month. The newspaper reported that Home Depot, which is working through Industrial Developments International, is also considering the Beacon Lakes industrial park in Miami-Dade County.
Ottawa An increase in housing starts in June is the latest indicator that Canada's housing market continues to stay healthy well into 2003. According to CMHC's Bob Dugan, economic factors helping shore up starts include mortgage rates that are at a 47-year low, healthy consumer confidence, and labour markets that are still fairly tight despite recent shrinkages. Housing starts had dropped slightly in May, to 197,900 units seasonally adjusted, but they increased again a month later, hitting 210,400 seasonally adjusted in June. Year to date, overall actual starts in Canada are up 2.6% over the first half of 2002. Actual urban multiple starts have increased 12.6% when compared with the same period in 2002. However, year to date, actual urban single starts are down 4.7% compared with the first six months of 2002. So far this year, housing is at 213,800 units seasonally adjusted, putting starts ahead of the CMHC's forecast of 205,500 for 2003. As a result, Dugan expects a bit of slowing in the second half of the year to conform to the CMHC forecast. Starts for the year to date are up 5.3% over the 203,050 units seasonally adjusted in the first six months of 2002. "The pace of activity in Canada's housing market is just great," says Dugan. "In spite of some mixed signals coming out of the economy, the key drivers for housing markets - labour markets, consumer confidence and interest rates - continue to ensure that the housing market remains at a high level." Looking at markets regionally, the only area where urban single starts actually fell in June was in British Columbia, down 3.8%. The biggest boost in starts there came from urban multiples, especially in the Vancouver area, increasing 11.0% to 82,800 units seasonally adjusted in June 2003, from 74,600 in May. Carol Frketich, British Columbia/Yukon regional economist for CMHC, says that, despite the drop in single starts, the decline is nowhere near what had been forecast. "What we've been seeing to drive year-to-date singles in B.C. is the super low interest rates and the market tapping into a lot of pent-up demand." For the rest of the year, she expects single starts to plateau and multiples to keep increasing. June singles hit 10,200 seasonally adjusted and multiples reached 10,800. Year to date, multiples in B.C. are up 20.8% and singles are up 17.2%. "Combined starts in this province are up almost 19%," she points out, noting that the housing market remains very healthy - and a key factor in the growth of the province's economy. Elsewhere in the country, the biggest increase from May to June was in Ontario, where starts were up 13.5%. Multiples were up 28.2% seasonally adjusted from May, while singles were up 3.9%. Unlike B.C., however, total starts from January to June in Ontario were down 2.4%, compared with the same period in 2002. Seasonally adjusted starts for the first six months were down 1.9%.

Norwalk, CT — As of last Monday, the two organizations mounting industry hardware shows in 2004 were able to start selling booths for their respective events.

Both Reed Exhibitions, based here, and the American Hardware Manufacturers Association, in Schaumburg, IL, are partners this year in the National Hardware Show, which takes place August 9-11 in Chicago. But their partnership ends with this year's show; in 2004 they'll both have shows of their own. Reed continues with the National Hardware Show name, mounting a show in Las Vegas from May 10-12, 2004, while the AHMA will keep the venue, McCormick Place in Chicago, with the AHMA Hardware Show, April 18-20. According to Robert Cappiello, industry vice-president for the National Hardware Show, in the past week his team was able to sign up more than 200 exhibitors and fill close to 50,000 sq.ft. of space. "For the first week," he says, "I can't complain." Both organizations are looking to gain converts from the existing show. However, that show's base of support has shrunk over the years, and at aproximately 500,000 sq.ft., is less than half the size it once was. The AHMA's own membership comprises a percentage of the existing show, a factor expected to add to the support of its own show in 2004, which it touts as "the industry's official show." It already has the support of several retail organizations, as well as the U.S. Department of Commerce and its "International Buying Program." However, Reed's Cappiello says many of the exhibitors that have signed up for his event are in fact companies that had already opted out of the existing show. "One-third of our exhibitors are not currently at NHS," he says. "To have that many people returning is a big deal." William Farrell, president and CEO of the AHMA, was not available for comment at press time.
Hoffman Hills, IL — Losses continued for Sears Roebuck as it suffered its 22nd consecutive month of same-store sales declines in June. The retailer reported that its revenue for the five weeks ended July 5 fell 4% from the same period in 2002, to US$2.6 billion. The same-store sales decline was a bit more modest, at 1.8%. In May, the company’s same-store sales were off 1.9%. Colder weather last month affected Sears's home appliance sales, especially air conditioners. That category has emerged as a primary battlefront in Sears's efforts to cling to its market share in appliances, which has been eroding in recent years due to competition from home improvement big boxes. Sears captures nearly 39% of the US$36 billion appliance market, but that's down from 41% in 2001. Lowe's, now the number-two seller of heavy appliances in the U.S., and, to a lesser degree, Home Depot, have been pinching the Sears appliance business, which has led the mass merchant to cut its prices and match those of its big box competitors for the first time. Sears is also is trying to reduce its warehousing and delivery costs by encouraging more customers to take home their appliances on the day of purchase.
Canadian Tire 37.29 26.80 33.15
Canfor 11.49 6.83 8.16
Costco 39.02 27.00 36.94
Goodfellow 13.99 9.75 10.25
Home Depot 35.75 20.10 33.17
Hudson's Bay 13.80 5.87 9.45
Lowe's Cos. 46.43 32.50 46.87
Rona Inc. 19.40 11.75 18.30
Sears Canada 23.40 13.60 15.51
Sodisco-Howden 1.90 1.06 1.80
Taiga Forest 7.65 5.85 7.10
Wal-Mart 58.03 43.72 56.53
West Fraser 39.05 26.27 33.01
Delson, QC Goodfellow Inc. has reported a profit in its third quarter of $2.8 million, down from a net profit of $4.3 million in the previous year. Sales decreased 1.7% to $142 million from last year’s $145 million. For the first nine months of the year, net earnings were $2.8 million, down from $5.6 million a year earlier. However, sales year to date rose 7.9% to $384 million this year from $356 million. Atlanta, GA Home Depot's CEO Bob Nardelli wants his company to become more than just a DIY retailer. He foresees a role as a "home aggregator," supplying both goods and services for every aspect of home improvement, according to a report in the Financial Times. With more than 1,500 stores, the company is fast reaching saturation, and the new initiative should open doors to a US$500 billion industry. He expects the company's financial stability and credit terms to appeal to larger contractors, and he also anticipates moving the company into other at-home services, including installing water treatment systems or at-home power generation. Bentonville, AR Wal-Mart Stores Inc. reported net sales in June of US$24.64 billion, up 11.1% from the same period a year earlier. Year-to-date sales were US$101.96 billion, up 10.2% from US$92.50 billion a year earlier. The Wal-Mart division's sales for the five-week period were US$16.70 billion, up 9.5%. The division's year-to-date sales reached US$69.24 billion, up 9.3% over US$63.40 billion during the same period a year earlier. Sam's Club sales for the five-week period were US$3.38 billion, up 8.0 %. Club sales for the twenty-two weeks were up 7.4%. Issaquah, WA Costco Wholesale Corp. reported net sales of US$4.28 billion for the five weeks ended July 6, 2003, up 11% from US$3.85 billion a year earlier. For the first 44 weeks of its 2003 fiscal year ended July 6, 2003, the company reported net sales of US$34.95 billion, an increase of 9% from US$32.00 billion during the same period a year earlier. London, England Kesa Electricals had a healthy introduction to the London and Paris stock exchanges last week. Made up of the former Kingfisher electrical retail chains, Kesa began trading as a spin-off of parent company Kingfisher plc following a successful demerger of the Kesa unit. Kesa operates 790 stores in seven European countries, with sales of around £3.4 billion. London, England Kingfisher Plc has sold off its French specialist builders merchant business, Dubois Materiaux, to Point.P, a division of Saint-Gobain Building Distribution. The deal is worth for 100 million euros (C$157 million). Proceeds from the sale, which is expected to close by fall 2003, will be used to reduce Kingfisher's debt. The company says it wants to focus on large-scale, mass merchandise home improvement retailing through its B&Q, Castorama and Brico Depot banners. Beijing, China Wal-Mart opened its first club store in this city last week, and has plans to open at least two more. Wal-Mart already has 26 outlets in China, including four existing Sam's Club stores. Boca Raton, FL Spear & Jackson, a vendor of garden tools with world headquarters in Sheffield, England, has made a deal, through its French division, with OBI, one of the largest home improvement retailers in Europe. The deal calls for Spear & Jackson to supply a new line of garden tools to OBI's 27 stores in France.
Jim Hunter has moved to Philips Lighting's North American head office in Somerset, NJ as director of strategic marketing. He was formerly director of marketing and retail sales in Canada (732-563-3572)Kris Ovstaas, formerly Philips's national sales manager for Home Depot, has been promoted to director of consumer sales in Canada. Sheryl Hawkes has been promoted to the role of manager strategic marketing in Canada. She was most recently marketing manager. (905-201-4500)
Builders took out $3.9 billion worth of building permits in May, down 2.0% from April, says Stats Canada. Municipalities issued $2.4 billion in permits for housing, as demand for multi-family dwellings pushed the total value of residential permits up 0.8%. In contrast, the value of permits for single-family dwellings fell for the fourth straight month, hitting a 17-month low. Despite the fluctuations, though, the value of building permits year-to-date is higher than in 2002. In the non-residential sector, the value of permits fell 6.2% to $1.5 billion. Year to date, the value of permits was higher than during the same five-month period in 2002. In total, municipalities issued $19.7 billion in permits from January to May, up more than $1 billion from the same period of 2002. Consumers spent a total of $68.6 billion on goods and services in the first quarter, says Stats Canada, up 4.7% from the first quarter of 2002. Year-over-year spending in retail stores in the first quarter was up for all major commodity groups, except automotive. Despite following a 4.9% year-over-year increase in the fourth quarter of 2002, these gains were the slowest since the third quarter of 2001, when sales were affected by the events of September 11. Consumer spending on home furnishings and electronics reached $5.2 billion, up 1.4%. Within the home furnishings and electronics commodity grouping, sales of indoor furniture declined 2.9%. Spending on home furnishings (floor coverings, draperies, bedding and home decorating products) was up 2.9% and sales of major appliances rose 3.7%. New house prices continued their climb in May, as the New Housing Price Index reached 116.0 (1997=100), up 0.6%, from April. According to Stats Canada, this index of contractors’ selling prices increased 4.4% on a 12-month basis. A favourable housing market and higher prices for labour and land continued to push prices up nationally. Land increases were observed in seven of the 21 urban centres surveyed. St. Catharines-Niagara, ON led the way with an increase of 1.3%, followed by increases of 1.1% in Toronto and Saint John-Moncton-Fredericton. Significant increases were observed in Vancouver (+0.8%) and Hamilton, ON (+0.6%). Affected by bad weather, the value of U.S. construction projects under way in May fell 1.7% from April to US$869.8 billion seasonally adjusted, according to the U.S. Commerce Department. That's the third monthly decline this year. Spending on new residential housing units reached US$322.1 billion seasonally adjusted in May, 0.7% below April's estimate of US$324.5 billion. Non-residential building construction dipped 0.4% US$157.0 billion. U.S. wholesale inventories in May were US$289.3 billion, down 0.3% from April but up 2.3% from the same period a year ago. Sales were US$233.4 billion, down 0.5% from last month but up 2.6% from May 2002. May 2003 sales of merchant wholesalers were US$233.4 billion, down 0.5% from April, but up 2.6% from May.

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HELP WANTED SENIOR SALES EXECUTIVE A leading Canadian supplier of Hand Tools & Power Tool Accessories to North American market, has an opening for a senior position in its Sales & Marketing department The incumbent will be responsible to manage & coordinate the Sales Agents/Agencies in US for devising sales strategies, increase customer base, increase product base to existing customers to ensure that budgeted sales numbers are met or exceeded. In addition, you will be responsible for some of the house accounts in US also. Experience in the industry, managing sales agencies & willing to travel is essential. Prior experience in US market is desirable. Salary & perks based on experience, qualification & previous achievements. If you are a self-starter with management skills, able to recognize the market needs & willing to take the challenge, please contact ; P.O. Box 211 in subject line or fax to: 416-489-6154 in confidence. ********************************************************************************** REPS/AGENTS WANTED SUPERIOR BRASS LOOKING FOR SALES REPS IN WESTERN CANADA AND ONTARIO Superior Brass is an established Australian company and the market leader in brass hardware for the home and office. We are actively seeking sales representatives currently serving the hardware and home décor market to represent our product line. Please contact us at (416) 712 - 2218 or by e-mail at You can view our 4000+ product line at ********************************************************************************** QUEBEC SALES AGENT TradeMASTER Tools & Machinery Ltd. A national distributor of power tools and accessories is looking to establish a strategic alliance with a Quebec sales agency that is looking to expand their business. Please fax resume to TradeMASTER Tools & Machinery at 519-622-4472 or email; ********************************************************************************** SERVICES OFFERED RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America's leading manufacturers, managing their lines for Canada's top hardware retailers, big boxes and mass merchandisers. Contact Al Vanderveen at 519-439-6800, ext. 201, to find out how Noral can boost your sales in Canada. ********************************************************************************** CANADIAN PATENT CONFIRMED FOR THE DRICORE® SUBFLOOR SYSTEM The Canadian Intellectual Office of Industry Canada confirmed that, effective May 13, 2003, the DRIcore Division of Longlac Wood Industries has been awarded a patent for its free-floating sub-floor panel. The DRIcore subfloor system is designed as the first step to a successful finished basement. Since Dricore panels are raised off the porous concrete floor on polyethylene cleats it works to mitigate the transfer of cold and dampness and helps prevent the formation of mold and mildew. The result is a subfloor that installs faster and performs better than conventional subfloors and provides a comfortable, durable platform for most finished floors. For more information visit or call 1 866-976-6374. ANNOUNCING THE DRICORE SALES & MARKETING TEAM Sam Mowat, General Manager, Sales & Marketing, Longlac Wood Industries is pleased to announce the reorganization of the sales and marketing team at the DRIcore Division to better service its customers. Dave Murray, Director of Marketing, brings to Dricore his versatile marketing experience with Canadian manufacturers of home improvement products, most notably, Premdor Inc. (now Masonite International). Grant Cowx, Sales Manager - North America joins DRIcore after sales and marketing assignments at Scott Paper Ltd and Duracell Canada Inc. Kim Laurienzo, Trade Services Marketing Manager, provides DRIcore with her proven skills in trade marketing in the retail box store environment after her tenure at Bailey Metal Products Limited. Gilles Quirion, Sales Representative, brings his enthusiastic energy to DRIcore as one of the original sales team when Longlac Wood Industries established the DRIcore Division in Mississauga in 1999. For more information call Sam Mowat at 888-566-4522, ext 224 ********************************************************************************** SELL YOUR COMPANY - OR BUY ONE - WITH HARDLINES CLASSIFIEDS! DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE. ONLY $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS. TO PLACE YOUR AD, CALL PHYLLIS NOWELL AT 416-489-3396 OR EMAIL:
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