HARDLINES™ Five years serving Canada's home improvement industry July 31, 2000 - Volume vi, #30 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * IN THIS ISSUE: * Revelstoke sees growth in its traditional stores * Canadian housing starts expected to continue growing into 2001 * Wal-Mart may cut a deal with German competitor * * * * * *   NO HARDLINES FOR THE NEXT TWO WEEKS We're taking our summer hiatus, so Hardlines will be published only once this month. The next issue will come out August 21, following our trip to the National Hardware Show in Chicago. However, the World Headquarters will remain open during this time, with business continuing as usual. - Michael  
REVELSTOKE: MORE THAN JUST BIG BOXES   Its big box stores may seem to stay in the spotlight, but Revelstoke continues to develop its traditional home centres, as well. While new locations are on hold as expansion efforts focus on Revy big boxes in the the Greater Toronto Area, the company continues to invest in existing stores under 65,000 sq.ft. A 35,000-sq.ft. site in Calgary (West Hill) has been refurbished to accommodate about 30% more inventory, for a total of 30,000 SKUs. The more traditional gondolas have been replaced by palette presentation, reflecting big box merchandising in a more upscale environment, says Terry Crofford, vice-president store operatons for Revelstoke's home centre division. "The site has a big box store look and feel and presentation," he notes. In addition, aisles have been narrowed and lighting levels improved. The Calgary store is in a mall location with a one-acre yard, a formula that has proved successful elsewhere. A mall store in Maple Ridge, BC was refurbished last fall. The 34 traditional Revelstoke stores, which serve a combination of contractors and DIYers, depending on the market, accounted for an estimated 45% of Revelstoke's $800 million in sales last year. Even though the Revelstoke stores had healthy sales in the first part of the year, the whole company suffered, starting in March, as poor weather throughout much of Canada began to take its toll. Sales for the latest quarter for the entire Revelstoke division were $21 million, about the same as last year. * * * * * * WAL-MART EYES DEAL WITH GERMAN RIVAL Wal-Mart Stores Inc. is considering an alliance with German rival Metro AG whereby the two retailers would exchange stakes in firms and avoid the other's business specialty, according to the German newspaper Welt am Sonntag. Under the proposed agreement, Metro would transfer its Real department store chain and Extra grocery chain to Wal-Mart, speeding up that company's expansion in Germany. Metro, in turn, would take over Wal-Mart's Sam's Club wholesale chain of some 1,000 stores, bolstering its profitable Cash & Carry division. The deal may be a result of shareholder resistance to Wal-Mart's out-and-out takeover of Metro. Three main shareholders own more than 60% of its stock. Duesseldorf-based Metro made a profit on ordinary activities of 1.35 billion DM last year on sales of 85.7 billion DM.  
COMPANIES IN THE NEWS   Rona's first big-box style store in the GTA is now slated to open in spring 2001. The store, to be located in Brampton, has been delayed from November 2000. It will be followed by a store in Mississauga. In anticipation of the fall re-opening of Eatons stores across the country, Sears is holding career fairs in Victoria, Calgary and Toronto. It intends to hire about 2,500 people over the next few weeks. Imperial Manufacturing Group made two acquisitions earlier this month. Design Krolon Ltd., a maker of aluminum columns and associated products, will fall under Imperial's Kool-Ray banner starting in 2001. The second purchase was Vancouver-based Break Thru Products Inc., a seller of pop-up vent deflectors, which will now be manufactured in Imperial's register plant. Ace Hardware Corp. in the U.S. broke ground last week on a new 778,000-sq.ft. distribution centre in Prince George, VA, about 35 km south of Richmond, according to a report in The Hard Fax. The new facility will house about US$40 million worth of inventory and serve some 325 Ace retailers in the U.S. mid-Atlantic region. Envirogard Products Ltd. has appointed J. Wright Sales Ltd. as its manufacturer's agent for Atlantic Canada, handling both the plumbing and retail channels. In Manitoba and Saskatchewan, J.L. Sales Ltd. has been appointed to handle Envirogard's wholesale plumbing market. Canwest Agencies Ltd. will handle those duties in Alberta and Barclay Sales will cover British Columbia. Distribution America, a US$3.1 billion independent distributor network, and Solutions On-Site (SOS), a web-based, customizable product selection service for the residential home building industry, have announced a strategic alliance. The SOS service helps design and building professionals guide their customers through the selection process of a full range of products for new home construction and renovation/remodelling.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 43.40 18.40 20.60
Canfor 19.80 10.10 11.80
Goodfellow 12.55 8.75 10.10
Home Depot 70.00 35.75 52 11/16
Hudsons Bay 23.85 12.50 16.10
Lowe's Cos. 67.25 40.37 42 1/4
Sears Canada 42.50 29.00 34.40
Taiga Forest 14.75 7.50 7.50
West Fraser 41.00 28.00 30.00
    "There were wild ducks here yesterday." - Leo Tolstoy (1828 - 1910)
PEOPLE ON THE MOVE   At Imperial Manufacturing, Luc Lemonde has been promoted to the position of general manager - Imperial Kool-Ray. (506-523-9117) Joseph Galli Jr. has been appointed president and CEO of VerticalNet Inc. , a business-to-business online marketplace. Galli moves over from Amazon.com, where he had served as president and COO. He leaves on the heels of the company's second-quarter loss of US$317.2 million. Amazon's stock dropped 9% on the news of Galli's departure. Galli's career includes heading up Black & Decker's worldwide power tool division, where he orchestrated the relaunch of DeWalt as a specialty brand of B&D. (215-328-6100) U.S. farm and ranch store chain Tractor Supply Co. has promoted Stanley L. Ruta to the position of senior vice-president - store operations. Tractor Supply operates 296 retail farm stores in 27 states. (615-366-4600)  
MARKET INDICATORS   Housing starts should rise to 158,300 units this year and 163,400 in 2001, compared with 149,968 in 1999, according to CMHC's third quarter Housing Outlook report. Total housing starts are expected to grow from 149,968 seasonally adjusted in 1999 to a forecasted 158,300 seasonally adjusted this year, and 163,400 in 2001. Sales of existing homes are expected to fall short of 1999's level, but rebound to 343,100 in 2001. Renovation spending will also increase to reflect these sales, from $24.9 billion last year to $25.9 billion in 2000 and $27.1 billion in 2001. Starts in Toronto will increase to 37,500 this year, representing half the homes built in the province. Construction will be up substantially in many Ontario centres, including Ottawa. Single-detached starts will grow from 92,190 in 1999 to an estimated 98,200 in 2000 and 100,100 in 2001. Multiple housing starts will grow from 57,778 in 1999 to 60,100 this year and 63,300 in 2001. The average MLS selling price for a house in Canada will grow from $158,064 in 1999 to a forecasted level of $164,700 this year and $171,000 next year.  
OVERHEARD...   "This isn't rocket science. It's still the quality of the people on the floor that makes the difference."- Leonard Lee, president, Lee Valley Tools Ltd., talks to Hardlines about customer service.  
HARDLINES SEMINAR AT CAN-SAVE We are pleased to be part of the Can-Save Summer Buying Expo 2000 at Can-Save's new warehouse in Barrie, ON on August 22. We'll present a seminar called: "Winning strategies of independents who compete alongside the big box" (or something like that!). We share the bill with Canadian Contractor magazine, which will do a presentation on "Installed Sales." For more information about the day, call Can-Save at 1-800-461-5411. - Michael   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 31, 2000 - Volume vi, #30 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * IN THIS ISSUE: * Revelstoke sees growth in its traditional stores * Canadian housing starts expected to continue growing into 2001 * Wal-Mart may cut a deal with German competitor * * * * * *   NO HARDLINES FOR THE NEXT TWO WEEKS We're taking our summer hiatus, so Hardlines will be published only once this month. The next issue will come out August 21, following our trip to the National Hardware Show in Chicago. However, the World Headquarters will remain open during this time, with business continuing as usual. - Michael  
REVELSTOKE: MORE THAN JUST BIG BOXES   Its big box stores may seem to stay in the spotlight, but Revelstoke continues to develop its traditional home centres, as well. While new locations are on hold as expansion efforts focus on Revy big boxes in the the Greater Toronto Area, the company continues to invest in existing stores under 65,000 sq.ft. A 35,000-sq.ft. site in Calgary (West Hill) has been refurbished to accommodate about 30% more inventory, for a total of 30,000 SKUs. The more traditional gondolas have been replaced by palette presentation, reflecting big box merchandising in a more upscale environment, says Terry Crofford, vice-president store operatons for Revelstoke's home centre division. "The site has a big box store look and feel and presentation," he notes. In addition, aisles have been narrowed and lighting levels improved. The Calgary store is in a mall location with a one-acre yard, a formula that has proved successful elsewhere. A mall store in Maple Ridge, BC was refurbished last fall. The 34 traditional Revelstoke stores, which serve a combination of contractors and DIYers, depending on the market, accounted for an estimated 45% of Revelstoke's $800 million in sales last year. Even though the Revelstoke stores had healthy sales in the first part of the year, the whole company suffered, starting in March, as poor weather throughout much of Canada began to take its toll. Sales for the latest quarter for the entire Revelstoke division were $21 million, about the same as last year. * * * * * * WAL-MART EYES DEAL WITH GERMAN RIVAL Wal-Mart Stores Inc. is considering an alliance with German rival Metro AG whereby the two retailers would exchange stakes in firms and avoid the other's business specialty, according to the German newspaper Welt am Sonntag. Under the proposed agreement, Metro would transfer its Real department store chain and Extra grocery chain to Wal-Mart, speeding up that company's expansion in Germany. Metro, in turn, would take over Wal-Mart's Sam's Club wholesale chain of some 1,000 stores, bolstering its profitable Cash & Carry division. The deal may be a result of shareholder resistance to Wal-Mart's out-and-out takeover of Metro. Three main shareholders own more than 60% of its stock. Duesseldorf-based Metro made a profit on ordinary activities of 1.35 billion DM last year on sales of 85.7 billion DM.  
COMPANIES IN THE NEWS   Rona's first big-box style store in the GTA is now slated to open in spring 2001. The store, to be located in Brampton, has been delayed from November 2000. It will be followed by a store in Mississauga. In anticipation of the fall re-opening of Eatons stores across the country, Sears is holding career fairs in Victoria, Calgary and Toronto. It intends to hire about 2,500 people over the next few weeks. Imperial Manufacturing Group made two acquisitions earlier this month. Design Krolon Ltd., a maker of aluminum columns and associated products, will fall under Imperial's Kool-Ray banner starting in 2001. The second purchase was Vancouver-based Break Thru Products Inc., a seller of pop-up vent deflectors, which will now be manufactured in Imperial's register plant. Ace Hardware Corp. in the U.S. broke ground last week on a new 778,000-sq.ft. distribution centre in Prince George, VA, about 35 km south of Richmond, according to a report in The Hard Fax. The new facility will house about US$40 million worth of inventory and serve some 325 Ace retailers in the U.S. mid-Atlantic region. Envirogard Products Ltd. has appointed J. Wright Sales Ltd. as its manufacturer's agent for Atlantic Canada, handling both the plumbing and retail channels. In Manitoba and Saskatchewan, J.L. Sales Ltd. has been appointed to handle Envirogard's wholesale plumbing market. Canwest Agencies Ltd. will handle those duties in Alberta and Barclay Sales will cover British Columbia. Distribution America, a US$3.1 billion independent distributor network, and Solutions On-Site (SOS), a web-based, customizable product selection service for the residential home building industry, have announced a strategic alliance. The SOS service helps design and building professionals guide their customers through the selection process of a full range of products for new home construction and renovation/remodelling.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 43.40 18.40 20.60
Canfor 19.80 10.10 11.80
Goodfellow 12.55 8.75 10.10
Home Depot 70.00 35.75 52 11/16
Hudsons Bay 23.85 12.50 16.10
Lowe's Cos. 67.25 40.37 42 1/4
Sears Canada 42.50 29.00 34.40
Taiga Forest 14.75 7.50 7.50
West Fraser 41.00 28.00 30.00
    "There were wild ducks here yesterday." - Leo Tolstoy (1828 - 1910)
PEOPLE ON THE MOVE   At Imperial Manufacturing, Luc Lemonde has been promoted to the position of general manager - Imperial Kool-Ray. (506-523-9117) Joseph Galli Jr. has been appointed president and CEO of VerticalNet Inc. , a business-to-business online marketplace. Galli moves over from Amazon.com, where he had served as president and COO. He leaves on the heels of the company's second-quarter loss of US$317.2 million. Amazon's stock dropped 9% on the news of Galli's departure. Galli's career includes heading up Black & Decker's worldwide power tool division, where he orchestrated the relaunch of DeWalt as a specialty brand of B&D. (215-328-6100) U.S. farm and ranch store chain Tractor Supply Co. has promoted Stanley L. Ruta to the position of senior vice-president - store operations. Tractor Supply operates 296 retail farm stores in 27 states. (615-366-4600)  
MARKET INDICATORS   Housing starts should rise to 158,300 units this year and 163,400 in 2001, compared with 149,968 in 1999, according to CMHC's third quarter Housing Outlook report. Total housing starts are expected to grow from 149,968 seasonally adjusted in 1999 to a forecasted 158,300 seasonally adjusted this year, and 163,400 in 2001. Sales of existing homes are expected to fall short of 1999's level, but rebound to 343,100 in 2001. Renovation spending will also increase to reflect these sales, from $24.9 billion last year to $25.9 billion in 2000 and $27.1 billion in 2001. Starts in Toronto will increase to 37,500 this year, representing half the homes built in the province. Construction will be up substantially in many Ontario centres, including Ottawa. Single-detached starts will grow from 92,190 in 1999 to an estimated 98,200 in 2000 and 100,100 in 2001. Multiple housing starts will grow from 57,778 in 1999 to 60,100 this year and 63,300 in 2001. The average MLS selling price for a house in Canada will grow from $158,064 in 1999 to a forecasted level of $164,700 this year and $171,000 next year.  
OVERHEARD...   "This isn't rocket science. It's still the quality of the people on the floor that makes the difference."- Leonard Lee, president, Lee Valley Tools Ltd., talks to Hardlines about customer service.  
HARDLINES SEMINAR AT CAN-SAVE We are pleased to be part of the Can-Save Summer Buying Expo 2000 at Can-Save's new warehouse in Barrie, ON on August 22. We'll present a seminar called: "Winning strategies of independents who compete alongside the big box" (or something like that!). We share the bill with Canadian Contractor magazine, which will do a presentation on "Installed Sales." For more information about the day, call Can-Save at 1-800-461-5411. - Michael   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.)