HARDLINES™ Five years serving Canada's home improvement industry July 17, 2000 - Volume vi, #28 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
HARDLINES HAS MOVED! Thanks to the tremendous support we've received from you, our subscribers, over the past five years, we are very excited to be able to expand into a new location. Please note the new address of the World Headquarters:   542 Mount Pleasant Rd., Suite 302 Toronto, Ontario, Canada M4S 2M7 (Phone and fax remain the same) phone: 416.489.3396 fax: 416.489.6154 * * * * * * * IN THIS ISSUE: (okay, things are slowing down a bit - hey, it's summer!) * Renovations become more important in light of softer housing starts * Big box wars: parking, parking, parking * Sodisco-Howden completes purchase of Weber Retail * * * * * * COTTAGE FOR RENT: LAKE HURON Available August 19-26 and August 26-September 2, this 3-bedroom lakefront cottage sleeps 5 and has shallow-entry sandy beach ideal for kids, TV, fireplace, canoe. Pets ok. On Howdenvale Beach, near Owen Sound and north of Sauble Beach at the foot of the Bruce Peninsula. $775 for each week. For more information, contact Hardlines at: 416-480-3396, or e-mail: buzz@hardlinesfax.com * * * * * * HOUSING STARTS SAG BUT RENOS STAY STRONG The number of housing starts in June was down slightly from May, but many dealers are not as worried about the drop as they might have been in the past. The reason is that renovations and repairs continue to grow as an important - and profitable - part of the business. Housing starts fell 1.8% in June to 139,300 units seasonally adjusted, compared with 141,800 in May, indicating many homeowners are happy just to stay put and fix up. The market began to shift seriously to renos and repairs during the wretched housing market of the early '90s, giving new housing a run for the money and now accounting for as much as 50% of the home improvement industry in Canada. Despite the slowdown, 2000 is expected to be "as good or better than 1999," says Dave Morton, marketing manager for Castle Building Centres. Morton says the ratio of renovation spending to new housing is still behind the U.S., where it exceeds 60%. He blames the GST for encouraging people to fix up instead of moving. "The taxes associated with building or moving to a home are so high that people are going to renovate instead." BOXES WILL WAGE WAR IN PARKING LOTS Never mind price, selection and service: these are just the price of admission to the big box wars. The battle is being waged on new fronts - including the parking lot. With all other things being more or less equal - given that some companies may do one or two better than the others - two or three big boxes sitting across the street from each other will count on easy access and good parking to attract time-pressed customers. As the director of real estate and property development at one big box said, which store is easiest to get in and out of will have the edge over its neighbour. That's why a recent grant to a developer in Moncton, NB, by two levels of government has created such a furor. A total of $625,000, from the municipal and provincial governments will go toward the construction of off ramps and roads that will feed directly into Home Depot's parking lot from the adjoining highway. The direct access gives the new power centre an edge over a competing power centre on the other side of the highway. That site, which has no direct access from the highway, houses a Kent big box. The government grant, therefore, amounts to more than just the money. The highway access privileges could become, in fact, a key competitive advantage to the tenants of the new centre, as they vie for the best parking access.  
COMPANIES IN THE NEWS   Réno-Dépôt inc. has formed a major partnership with downhill ski champion Mélanie Turgeon. Besides being a veteran of the Canadian Ski Team, the native of Québec City is a self-described "keen do-it yourselfer." Her three-year contract includes making store tours and participating in conferences, seminars and workshops on behalf of Réno-Dépôt. On July 14, Sodisco-Howden Group finalized the acquisition of the hardware related assets and inventory of the Retail Sales Division of Weber Supply Co. in Kitchener, ON. Products formerly purchased from Weber will now be available from Sodisco-Howden. The transaction, which was subject to a due diligence, was paid in cash. Sales at Ainsworth Lumber Co. for the first six months of the year rose to $233.7 million from $208.4 million in the first half of 1999. Net earnings in the second quarter were $9.5 million, compared with $6.4 million for the same period in 1999, an increase of nearly 50%. The company has taken aim at the growing market in Japan for OSB, and an OSB plant in High Level, AB, is slated to begin production by mid-October. Lowe's Cos. has strengthened its alliance with Whirlpool Corp. to include an expanded product line, a Lowe's exclusive on certain new Whirlpool products, and exclusivity as home centre distributor of a new line of Whirlpool water heaters and air purification products. Nu-Gro Corp. has renewed and expanded its agreement with ICI Canada Inc. to use ICI's C-I-L trademarks for home and garden products until 2020, with an option to renew for another 20 years. Wal-Mart Canada Inc. has been the target of protests for selling clothing made in Myanmar, which is ruled by a "brutal military regime." However, the company has responded to the criticisms and stopped ordering from the Asian country (formerly Burma) and will make no new orders after the current ones are filled over the next few months. Premdor Inc. has formed a partnership with Toledo, Ohio-based Owens Corning to expand OC's acoustic system business to make Premdor's Safe 'N Sound doors available prehung as part of OC's QuietZone Acoustic Door System. Owens Corning, for the second quarter ending June 30, 2000, had net sales US$1.295 billion, slightly below US$1.310 billion for the same period a year ago. This reflects weaker demand in roofing, siding and insulation businesses, as construction activity slowed due to concerns about interest rates. Net income (excluding a charge reflecting an addition to the asbestos reserve, and the proceeds from an insurance settlement) was US$61 million, compared with US$76 million.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 43.40 18.40 22.30
Canfor 19.80 10.10 13.40
Goodfellow 12.55 8.75 10.00
Home Depot 70.00 35.75 55 7/16
Hudsons Bay 23.85 12.50 16.30
Lowe's Cos. 67.25 40.40 47 7/8
Sears Canada 42.50 29.00 35.50
Taiga Forest 14.75 8.05 8.80
West Fraser 41.00 28.00 29.60
    "Once a word has been allowed to escape, it cannot be recalled." - Horace (65 - 8 B.C.)
PEOPLE ON THE MOVE   Heather Janisse has been promoted to the role of president of Canadian In-Store Merchandising. Formerly eastern regional manager, she replaces David Mosley, who has left the company. (416-249-9779) Richard Friesen has resigned from his position as president of Cameron Ashley Canada, effective June 30, 2000. Bruce Allen, formerly vice-president of operations, takes over from Friesen as business unit leader for Canada. (905-677-4545) Lowe's Cos. Inc. has appointed Thomas Whiddon to the newly created position of executive vice-president, logistics and technology. He was previously executive vice-president and CFO. Whidden will oversee distribution and inventory replenishment functions, management information services and the Internet business group … Robert A. Niblock has been promoted to the position of senior vice-president and CFO. He was formerly senior vice-president of finance.  
MARKET INDICATORS   The annual rate of housing starts in Canada fell 1.8% in June to 139,300 units seasonally adjusted, compared with 141,800 in May, according to CMHC. Urban single starts were up 2.3% to 72,600 units, compared with 71,000 in May. Urban multiples starts were down 8.6% to 43,400 units, compared with 47,500 in May.  
HARDLINES WHO'S WHO: Directory of Canadian Hardware & Home Improvement Retailers, Wholesalers, Buying Groups and Mass Merchants. This has become an industry standard. With more than 100 listings of the key companies in the country, including executives, buyers, sales and more. No salesperson should be without this little beauty in their briefcase. Third edition available in July.   HARDLINES INDUSTRY REPORT: HOME IMPROVEMENT RETAILING IN CANADA: Back by popular demand! This incredible report is a soup-to-nuts on how the home improvement business works in Canada. It tells who the players are, what the trends are, how the industry is responding to the big boxes, etc. It also updates home improvement and renovation spending and figures out just how big this business is! FIFTH ANNUAL HARDLINES MARKETING CONFERENCE: September 14, 2000. An incredible one-day symposium featuring some of North America's leaders in retail, including Home Depot, McMillan/Doolittle, Gardener's Supply, J&H Builder's Warehouse and much more! Expect about 200 retail and vendor executives to attend! THE WOMEN'S CONSUMER PRODUCTS NETWORK August 15: Breakfast meeting during the CGTA Show. Featuring the proven communication methods of Robin Kennedy, vice-president of Communicare. September 21: "Fully Alive From 9 to 5!" Featuring author Louise LeBrun. Details coming soon. Meanwhile, check out her website at: www.partnersinrenewal.com For more information about these events, please phone: (905) 212-3826; fax: (905) 274-7646; email:wcpn99@yahoo.com, or check out their website: www.wcpncanada.org  
Hardlines Classifieds   Got new products? Looking for new staff or lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2000 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST = $212.75) per year (GST #13987 0398 RT). (Please make cheque payable to McLarneyCom.)  
  HARDLINES™ Five years serving Canada's home improvement industry July 17, 2000 - Volume vi, #28 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
HARDLINES HAS MOVED! Thanks to the tremendous support we've received from you, our subscribers, over the past five years, we are very excited to be able to expand into a new location. Please note the new address of the World Headquarters:   542 Mount Pleasant Rd., Suite 302 Toronto, Ontario, Canada M4S 2M7 (Phone and fax remain the same) phone: 416.489.3396 fax: 416.489.6154 * * * * * * * IN THIS ISSUE: (okay, things are slowing down a bit - hey, it's summer!) * Renovations become more important in light of softer housing starts * Big box wars: parking, parking, parking * Sodisco-Howden completes purchase of Weber Retail * * * * * * COTTAGE FOR RENT: LAKE HURON Available August 19-26 and August 26-September 2, this 3-bedroom lakefront cottage sleeps 5 and has shallow-entry sandy beach ideal for kids, TV, fireplace, canoe. Pets ok. On Howdenvale Beach, near Owen Sound and north of Sauble Beach at the foot of the Bruce Peninsula. $775 for each week. For more information, contact Hardlines at: 416-480-3396, or e-mail: buzz@hardlinesfax.com * * * * * * HOUSING STARTS SAG BUT RENOS STAY STRONG The number of housing starts in June was down slightly from May, but many dealers are not as worried about the drop as they might have been in the past. The reason is that renovations and repairs continue to grow as an important - and profitable - part of the business. Housing starts fell 1.8% in June to 139,300 units seasonally adjusted, compared with 141,800 in May, indicating many homeowners are happy just to stay put and fix up. The market began to shift seriously to renos and repairs during the wretched housing market of the early '90s, giving new housing a run for the money and now accounting for as much as 50% of the home improvement industry in Canada. Despite the slowdown, 2000 is expected to be "as good or better than 1999," says Dave Morton, marketing manager for Castle Building Centres. Morton says the ratio of renovation spending to new housing is still behind the U.S., where it exceeds 60%. He blames the GST for encouraging people to fix up instead of moving. "The taxes associated with building or moving to a home are so high that people are going to renovate instead." BOXES WILL WAGE WAR IN PARKING LOTS Never mind price, selection and service: these are just the price of admission to the big box wars. The battle is being waged on new fronts - including the parking lot. With all other things being more or less equal - given that some companies may do one or two better than the others - two or three big boxes sitting across the street from each other will count on easy access and good parking to attract time-pressed customers. As the director of real estate and property development at one big box said, which store is easiest to get in and out of will have the edge over its neighbour. That's why a recent grant to a developer in Moncton, NB, by two levels of government has created such a furor. A total of $625,000, from the municipal and provincial governments will go toward the construction of off ramps and roads that will feed directly into Home Depot's parking lot from the adjoining highway. The direct access gives the new power centre an edge over a competing power centre on the other side of the highway. That site, which has no direct access from the highway, houses a Kent big box. The government grant, therefore, amounts to more than just the money. The highway access privileges could become, in fact, a key competitive advantage to the tenants of the new centre, as they vie for the best parking access.  
COMPANIES IN THE NEWS   Réno-Dépôt inc. has formed a major partnership with downhill ski champion Mélanie Turgeon. Besides being a veteran of the Canadian Ski Team, the native of Québec City is a self-described "keen do-it yourselfer." Her three-year contract includes making store tours and participating in conferences, seminars and workshops on behalf of Réno-Dépôt. On July 14, Sodisco-Howden Group finalized the acquisition of the hardware related assets and inventory of the Retail Sales Division of Weber Supply Co. in Kitchener, ON. Products formerly purchased from Weber will now be available from Sodisco-Howden. The transaction, which was subject to a due diligence, was paid in cash. Sales at Ainsworth Lumber Co. for the first six months of the year rose to $233.7 million from $208.4 million in the first half of 1999. Net earnings in the second quarter were $9.5 million, compared with $6.4 million for the same period in 1999, an increase of nearly 50%. The company has taken aim at the growing market in Japan for OSB, and an OSB plant in High Level, AB, is slated to begin production by mid-October. Lowe's Cos. has strengthened its alliance with Whirlpool Corp. to include an expanded product line, a Lowe's exclusive on certain new Whirlpool products, and exclusivity as home centre distributor of a new line of Whirlpool water heaters and air purification products. Nu-Gro Corp. has renewed and expanded its agreement with ICI Canada Inc. to use ICI's C-I-L trademarks for home and garden products until 2020, with an option to renew for another 20 years. Wal-Mart Canada Inc. has been the target of protests for selling clothing made in Myanmar, which is ruled by a "brutal military regime." However, the company has responded to the criticisms and stopped ordering from the Asian country (formerly Burma) and will make no new orders after the current ones are filled over the next few months. Premdor Inc. has formed a partnership with Toledo, Ohio-based Owens Corning to expand OC's acoustic system business to make Premdor's Safe 'N Sound doors available prehung as part of OC's QuietZone Acoustic Door System. Owens Corning, for the second quarter ending June 30, 2000, had net sales US$1.295 billion, slightly below US$1.310 billion for the same period a year ago. This reflects weaker demand in roofing, siding and insulation businesses, as construction activity slowed due to concerns about interest rates. Net income (excluding a charge reflecting an addition to the asbestos reserve, and the proceeds from an insurance settlement) was US$61 million, compared with US$76 million.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 43.40 18.40 22.30
Canfor 19.80 10.10 13.40
Goodfellow 12.55 8.75 10.00
Home Depot 70.00 35.75 55 7/16
Hudsons Bay 23.85 12.50 16.30
Lowe's Cos. 67.25 40.40 47 7/8
Sears Canada 42.50 29.00 35.50
Taiga Forest 14.75 8.05 8.80
West Fraser 41.00 28.00 29.60
    "Once a word has been allowed to escape, it cannot be recalled." - Horace (65 - 8 B.C.)
PEOPLE ON THE MOVE   Heather Janisse has been promoted to the role of president of Canadian In-Store Merchandising. Formerly eastern regional manager, she replaces David Mosley, who has left the company. (416-249-9779) Richard Friesen has resigned from his position as president of Cameron Ashley Canada, effective June 30, 2000. Bruce Allen, formerly vice-president of operations, takes over from Friesen as business unit leader for Canada. (905-677-4545) Lowe's Cos. Inc. has appointed Thomas Whiddon to the newly created position of executive vice-president, logistics and technology. He was previously executive vice-president and CFO. Whidden will oversee distribution and inventory replenishment functions, management information services and the Internet business group … Robert A. Niblock has been promoted to the position of senior vice-president and CFO. He was formerly senior vice-president of finance.  
MARKET INDICATORS   The annual rate of housing starts in Canada fell 1.8% in June to 139,300 units seasonally adjusted, compared with 141,800 in May, according to CMHC. Urban single starts were up 2.3% to 72,600 units, compared with 71,000 in May. Urban multiples starts were down 8.6% to 43,400 units, compared with 47,500 in May.  
HARDLINES WHO'S WHO: Directory of Canadian Hardware & Home Improvement Retailers, Wholesalers, Buying Groups and Mass Merchants. This has become an industry standard. With more than 100 listings of the key companies in the country, including executives, buyers, sales and more. No salesperson should be without this little beauty in their briefcase. Third edition available in July.   HARDLINES INDUSTRY REPORT: HOME IMPROVEMENT RETAILING IN CANADA: Back by popular demand! This incredible report is a soup-to-nuts on how the home improvement business works in Canada. It tells who the players are, what the trends are, how the industry is responding to the big boxes, etc. It also updates home improvement and renovation spending and figures out just how big this business is! FIFTH ANNUAL HARDLINES MARKETING CONFERENCE: September 14, 2000. An incredible one-day symposium featuring some of North America's leaders in retail, including Home Depot, McMillan/Doolittle, Gardener's Supply, J&H Builder's Warehouse and much more! Expect about 200 retail and vendor executives to attend! THE WOMEN'S CONSUMER PRODUCTS NETWORK August 15: Breakfast meeting during the CGTA Show. Featuring the proven communication methods of Robin Kennedy, vice-president of Communicare. September 21: "Fully Alive From 9 to 5!" Featuring author Louise LeBrun. Details coming soon. Meanwhile, check out her website at: www.partnersinrenewal.com For more information about these events, please phone: (905) 212-3826; fax: (905) 274-7646; email:wcpn99@yahoo.com, or check out their website: www.wcpncanada.org  
Hardlines Classifieds   Got new products? Looking for new staff or lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2000 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST = $212.75) per year (GST #13987 0398 RT). (Please make cheque payable to McLarneyCom.)