John Caulfield, Contributing Editor
 vol. ix, #29 July 21, 2003

* Rona makes peace with Matco Ravary * Breakouts added to Hardlines Conference * Retailers go after tax refund cheques * U.S. economy shows positive signs * Stanley division plans takeover of rival * Georgia-Pacific, Boise, West Fraser report results

“Gratitude looks to the past and love to the present; fear, avarice, lust and ambition look ahead.” —C.S. Lewis
Please note that Hardlines will not publish on the following dates: August 4, August 11, and August 25. But never fear – the World Headquarters will remain open during this time. We’ll be busy covering the National Hardware Show in Chicago and preparing for our incredible Hardlines Conference Series from September 3-4. Michael
Montreal, QC — Rona Inc. and Matco Ravary have settled their differences, following the sale of the Montreal area chain of building centres by Matco’s board of directors to a consortium of BMR dealers. Rona, which owned about a third of the Matco shares, had disputed the sale to a major competitor, and had tried unsuccessfully to block the sale with an injunction. The conflict had ended up in both sides suing each other. Last week, however, both sides managed to come to an agreement to settle their respective lawsuits out of court. Neither side would disclose any details, as the terms of the settlement were confidential. Matco Ravary recently released its second-quarter results, which reveal a company stripped of substantially all its assets following the sale to BMR. In the second quarter and for the six-month period ended April 30, 2003, Matco Ravary recorded revenues of $1.3 million resulting mainly from the sale of 108,736 Rona shares, as well as interest income from investments. Bonuses for the two senior officers of Matco Ravary, Carmel Chaput, chairman, and Gilles Nolet, president and CEO, plus the cost of professional services, made a $0.7 million dent on the books, while another $0.4 million was payable to the two executives’ pension funds following the sell off.
Toronto, ON — A presentation on the buying habits of Canadian consumers is just the latest addition to the Hardlines Marketing Conference this fall in Toronto. Randy Harris, president of Trendex North America, and a recognized expert on Canadian retailing trends, will provide unique insights into current Canadian retail sales patterns for hard goods, including the performance of each of Canada’s largest hard goods retailers and the hard goods purchasing behaviour of Canadian consumers. Trendex North America is one of North America’s largest consumer syndicated marketing and research firms specializing in the Canadian market. The company regularly tracks consumer purchases of household equipment, household textiles, soft goods and sporting goods. The Hardlines Marketing Conference is part of the Hardlines Conference Series, being held September 3-4, 2003 at the Delta Toronto Airport West Hotel.

Toronto, ON — What's ahead for the supply chain? Now you can find out at the Hardlines Marketing Conference on September 4. We’ve just signed the Electronic Commerce Council of Canada (ECCC) to one of our breakout sessions at the Conference to give a valuable and timely update on the latest changes and standards being applied in data synchronization. ECCC is the organization in Canada working to harmonize standards and bring this industry in line with initiatives being developed jointly with UCCnet in the U.S.

Michael Sadiwnyk of ECCC will discuss the rationale of global e-commerce standards for the supply chain. Data synchronization will be a key driver of this coming e-collaboration. Sadiwnyk will describe the global standards landscape and present the key players involved internationally and nationally, and explain how data synchronization can benefit and enhance the efficiency of the supply chain. The data sync session is one of three breakouts being offered at the Hardlines Marketing Conference. For more information about the whole Hardlines Conference Series, September 3-4, 2003, call 416-489-3396 or click here.
Washington, DC — Despite still-high unemployment, the U.S. economy continues to show steady signs of recovery. Last Thursday, the Census Bureau reported that single-family housing starts in June rose to an annualized rate of 1.462 million units. That’s 7.6% higher than the rate in June 2002. Overall housing starts, which include multi-family dwellings, increased 5.5% to 1.803 million units. Mel Martinez, the Secretary of the Department of Housing and Urban Development, stated that the Bush administration remains committed to increasing home ownership among minorities by 5.5 million by the end of the decade. As part of that effort, the administration this year has proposed a US$113 million increase for the Department’s HOME Investment Partnerships Program; US$200 million for the “American Dream Downpayment Fund” to help low- to moderate-income families become first-time homeowners; US$2 million for research to help reduce regulatory barriers to affordable housing; and US$10 million toward housing counseling to help low-income individuals and families find and maintain homes. On the same day, the Labor Department reported that weekly jobless claims fell to 412,000 in the week of July 12, from a revised 441,000 the prior week. The four-week running average declined to 424,000 from 427,500. And continuing claims fell to 3,654,000 in the week of July 5 from 3,771,000 the previous week. “The rate of loss seems to be abating,” Mark Zandl, chief economist for, was quoted by Reuters. “The economy is still losing jobs, but at a slower rate, so we’re heading in the right direction.”

Bentonville, AK & Wilkesboro, NC — Anticipating a wave of Americans who will want to use their federal tax refund for home improvement projects, Lowe’s will allow easy cheque cashing this year in its stores. As a convenience to its customers, no purchase will be required.

“Historically, we know when consumers have access to additional cash, many homeowners will choose to spend a portion of that money on projects that improve their largest asset – their homes,” said Larry Stone, senior executive vice-president of operations at Lowe’s, in a prepared statement. Starting July 25, the U.S. government will begin mailing out 25 million tax rebates totaling US$14 billion. A few days after the Lowe’s announcement, Wal-Mart said it would offer the same kind of service. Customers will be able to cash their federal tax refund cheques at any Wal-Mart or Sam's Club store. According to Wal-Mart, 20% of its customers don’t have bank accounts.
Atlanta, GA — Georgia-Pacific’s revenue for the second quarter declined 19% to US$5.04 million. But the manufacturer and distributor of building and consumer products saw its net income jump to US$62 million from a loss of US$83 million in the same period a year ago, when the company incurred a US$235 million pretax loss from its former Unisource business. The company’s building materials distribution division reported a 31% increase in its quarterly operating profit to US$21 million. Through the first six months of its fiscal year, G-P generated US$9.62 million in revenue, down from US$12.02 million in the first half of 2002. (Unisource contributed US$2.8 million of those 2002 sales.) Profit stood at US$34 million, compared with a US$567 million loss in the first six months of last year. Pete Correll, G-P’s CEO, said that “every segment” of his company’s business was performing below last year’s pace and that profit gains were the result of cost-cutting measures.
Canadian Tire 37.29 26.80 33.42
Canfor 11.10 6.83 8.85
Costco 39.02 27.00 36.61
Goodfellow 13.10 9.75 10.80
Home Depot 34.90 20.10 33.08
Hudson's Bay 13.60 5.87 9.34
Lowe's Cos. 48.05 32.50 47.03
Rona Inc. 19.40 11.75 18.24
Sears Canada 22.50 13.60 15.90
Sodisco-Howden 1.90 1.15 1.89
Taiga Forest 7.65 5.85 7.14
Wal-Mart 58.03 43.72 57.00
West Fraser 39.05 26.27 31.78
Vancouver, BC — West Fraser Timber Co. suffered a second-quarter loss in profitability, even as its sales increased. It had a loss of $5 million on sales of $379 million, a swing from a profit of $71 million on sales of $420 million in the second quarter of 2002. For the first half of 2003, earnings were $6 million on sales of $764 million, a big drop from the $98 million profit it enjoyed on sales of $800 million in the first half of 2002. The drop was attributed to the strengthening Canadian dollar, low product prices and continuing duties on U.S. lumber shipments, as well as an ongoing strike at West Fraser’s Kitimat facility. Dryden, ON — Weyerhaeuser Co. will close its pulp and paper operations here as the forest products market continues to shrink. The closure, effective October 11, 2003, will be a permanent one, affecting about 330 hourly positions. Weyerhaeuser will take a US$7 million after-tax charge against its second-quarter earnings for costs associated with the closing. Toronto, ON — Hudson's Bay Co. has arranged a new line of credit, secured by the company’s inventory. The 364-day $650 million secured revolving credit facility will be used for “general corporate purposes” and replaces the company's current unsecured $480 million operating line. GE Corporate Financial Services will act as administrative agent for the credit line, and work with Bank of America as lead arranger. Inventory at the end of the first quarter was valued at $1.7 billion. Oak Brook, IL — Ace Hardware has struck a partnership with paint supplier Pratt & Lambert, allowing the co-op’s members to expand their paint lines into a higher-end price point. By November, Pratt & Lambert, one of Sherwin-Williams’ architectural coating brands, is scheduled to start supplying its Accolade and Red Seal lines to Ace dealers. Eighty Four, PA — 84 Lumber is opening three stores this month, including one in Montgomery, AL. The building centre chain operates eight other locations in Alabama, including Albertville, Bessemer, Chelsea, Huntsville, Irondale, Northport, Pelham, and Pell City. The building centre, the company’s 449th, is more than 40,000 sq.ft. in size. The other two new outlets are in Gainseville, FL and Cartersville, GA. Boise, ID — Timber and paper giant Boise Cascade is making a strategic repositioning to migrate into the office supply business with the announced acquisition of OfficeMax Inc. for more than US$1.5 billion. The move will provide alternatives to the company’s ailing paper business and expand on the office supplies business that already exists in Canada. Boise is paying a 25% premium over the July 12 closing share price, and the deal is expected to close in the fourth quarter. Nashville, TN — Tractor Supply Co. had a 50.3% increase in profitability during its second quarter, with net income reaching US$27.4 million, from US$18.2 million in the prior year period. Net sales in the second quarter grew 14.6% to US$449.4 million, compared with US$392.0 million last year. Same-store sales increased 1.2%. During the second quarter, the company opened 13 stores. Tel Aviv, Israel — ZAG, a division of Stanley Works that is considered the world’s leading supplier of toolboxes, reportedly has agreed to purchase the toolbox business from an Israeli rival, Keter Plastics, for US$30 million. The pact calls for ZAG to acquire Keter’s toolbox business, and Keter to continue making the boxes for ZAG as a sub-contractor.
Home Depot has hired John Phillips as vice-president of its newly formed Government Solutions Group. Phillips is a longtime veteran of the armed forces and defense community, whose background includes a stint as vice-president, government services for Honeywell. He was also the Clinton administration’s Deputy Under Secretary of Defense with a specialty in logistics between 1993 and 1996, and served for more than 30 years in the U.S. Air Force, retiring with the rank of Major General. He will report to Home Depot Supply division president Jim Stoddart. Anthony Sabo has been named general manager of the rental business at TruServ Corp. Bringing 15 years of rental experience to the position, Sabo was most recently director of fleet operations for United Rental in Greenwich, CT. Now he will manage TruServ’s in-store and stand-alone rental businesses: Just Ask Rental, Grand Rental Station, Taylor Rental, and Party Central. He will report to Fred Kirst, vice-president of maintenance repair and operations for TruServ’s Rental Division and Home & Garden Showplace.
Sales of existing homes were up 8.2% in June, hitting 26,167 units seasonally adjusted in Canada’s 25 major markets, led by Vancouver, Durham Region (east of Toronto), Hamilton and Kitchener-Waterloo, ON. According to the latest numbers from the Canadian Real Estate Association, resale housing last month was the strongest it’s been in a decade. Falling mortgage rates continue to fuel the market. Wholesale sales edged up 0.2% in May with $35.9 billion in goods and services sold, reports Stats Canada. The uptick ends three consecutive months of contraction. Since the start of 2003, sales have fallen an average of 0.1% per month. Despite the weakness in sales since the start of 2003, total sales for the first five months of the year were up 6.1% over the same period of 2002. Retail sales in the U.S. grew by 0.5% in June to US$310.4 billion, says the U.S. Commerce Department. After flat sales in May, the June increase was the biggest gain since March. Excluding automobiles, retail sales were actually US$236 billion, up 0.7% from last month and up 3.8% from June 2002.

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HELP WANTED WANTED: TWO TRAIL BLAZING SALES MANAGERS Ready to bounce ideas off the Canadian executive team instead of waiting for Head Office U.S.A. to give its blessing? An entrepreneurial Canadian supplier of a wide range of branded and private label products sold to the home improvement and mass merchant markets is growing. Their expansion has lead to new opportunities in various categories in Retail and Industrial Markets. As the Ontario-based Regional Sales Manager, you'll continue the growth and addition of new business with accounts such as Wal-Mart, Zellers, Home Hardware and others. You'll also develop opportunities in the automotive aftermarket, electronic, food and drug channels, while supervising the company service merchandising function. As the U.S. Sales Manager, you'll trail blaze and pursue opportunities in major home improvement and retail accounts with the support and the encouragement of a Canadian marketing and product development team. Build and work with a network of sales agents to keep your efforts top-of-mind with your Customers. U.S.-based candidates preferred. Both positions require a minimum of five years' sales success in the home improvement and/or retail markets. The ability to work autonomously, yet communicate effectively with key company contacts is a must. The returns include a competitive compensation package and a chance to be recognized within a dynamic, growing enterprise. Please contact Wolf Gugler in complete confidence, quoting Trail Blazer-Canada or Trail Blazer-U.S. Wolf Gugler & Associates Limited, (416)386-1719 or (405)848-3006. Email: Web site: ********************************************************************************** REPS/AGENTS WANTED SALES AGENTS NEEDED Kempston Canada Ltd, a supplier of premium wood working accessories to the retail market, requires sales agents for the province of Alberta and the Maritimes. Previous experience in the woodworking industry is desirable and pioneering spirit a must. Please forward resume by email to, or by fax: 905 513 7924, Attn National Sales Manager. Kempston CANADA LTD, 250 Shields Court, Unit 23, Markham, Ontario, Canada L3R 9W7. Phone: 905-513-6843; Fax: 905-513-7924; ; ********************************************************************************** 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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