HARDLINES™
Five years serving Canada's home improvement industry
July 4, 2000 - Volume vi, #26
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:
* Rona will launch B2B industrial portal
* Shuffle at Home Depot Canada HQ
* Canadian Tire announces western distribution centre
* Mills await strike action in BC interior
* * * * * *
HOTEL
ROOMS AT OUR 5th ANNUAL HARDLINES MARKETING
CONFERENCE:September
14, 2000. We have a limited number of rooms set aside for this
incredible one-day symposium featuring some of North America's
leaders in retail! To make your reservation, call the
Eaton
Centre Marriott Hotel:
1-800-905-0667; refer to the Hardlines Marketing Conference and/or
McLarney Communications.* * * * *
*Anybody out
there ever a Bonzo Dog Band fan? If so, give me a call or send me a
note! - Michael* * * * *
*B.C. MILL
STRIKE NOT EXPECTED TO AFFECT SUPPLYA strike by
workers in British Columbia's coastal mills last Tuesday came as a
surprise to an industry that is already plagued by oversupply and low
prices. Some 12,000 BC forest workers went on strike, members of the
Industrial Wood and Allied Workers representing the coastal
operations at 70 companies. Another 20,000 workers in the province's
interior can go on strike as of Wednesday.Canfor,
bargaining separately, reached a settlement with its 1,700 workers in
the interior on Friday, quelling fears the action might spread to the
20,000 other forestry workers in the province's interior. Canfor
forestry workers got a three-year deal that included pay increases of
2% per year and a base rate of $21.94 an hour by the end of the
contract. The agreement also includes pension and benefit
increases.The strike
action comes on the heels of extensive shut downs announced for the
summer, an attempt by the mills to rationalize the glut of product in
their inventories. Two or three mills are even expected to shut down
altogether before summer is out, suggests one industry insider.
"Nobody has
any idea why they went on strike," says Doug Butterworth,
vice-president of Taiga Forest Products in Burnaby, BC. He doubts the
interior mills will follow suit, especially after the settlement by
Canfor.Because the
strike will help rationalize oversupply, it's actually good news for
the mills. The coastal industry is seriously oversupplied because it
doesn't have the allowable annual cut enjoyed by other regions, and
the Asian market for green hemlock has dried up
considerably.The strike
may also boost the rock-bottom prices for lumber that were further
depressed by a poor selling season in the rainy first quarter. During
that time, lumber prices fell as low as US$255 per 1,000 board ft.
from a high of US$410 a year ago. They have since bumped up about
US$10 per board foot following the news of the strike."There's
North American oversupply of product," Butterworth says. "The best
thing in the world for this industry is if they did go on strike for
three or four weeks."Prices of
other wood products are also expected to be affected. "In the past
8-9 weeks we've seen prices of sheet goods go up 30-33%, which is
uprecedented," says Alan Jack, a trader at AFA Forest Products in
Bolton, Ont. "And even if the strike ends quickly, we'll have
containment on both lumber and sheet goods."But, he
adds, because of alternative sources in Alberta and elsewhere, even a
protracted strike will not affect supply dramatically.HOME
DEPOT CANADA ANNOUNCES SENIOR MANAGEMENT CHANGESSince the
arrival of a new vice-president from the U.S., Home Depot Canada has
made further changes to its management team in Toronto. Pat Bennett,
formerly vice-president of operations, left last week and has been
replaced by Mike Roy.Born in
Ottawa, Roy is a 23-year veteran of retail, and has been with Home
Depot for eight years, most recently as a district manager in the
company's Northwest Division, where he had worked with Eric Petersen.
Petersen came up recently from that division to assume the role of
vice-president of merchandising in Canada.Bennett's
departure follows the exit of Jack Hayes in mid-June. Hayes was first
moved over to a position as vice-president of marketing and
logistics, making way for Petersen's arrival. He left the company
soon after that. He will not be replaced; instead, his duties will be
covered by Petersen.RONA TO
DEVELOP ONLINE MAINTENANCE AND REPAIR MARKETPLACEA new
partnership forged by Rona Inc. will enable it to develop an
e-commerce platform for the industrial market. The deal is with
Mediagrif Interactive Technologies Inc., a developer of vertical
business-to-business e-commerce marketplaces.The two
companies will join to create "Virtual Maintenance Repair Operations"
&endash; www.vmro.com
&endash; which, it claims, will be Canada's first portal exclusively
for trading among industrial and institutional maintenance companies.
Besides simple buying and selling, the concept will offer users a
highly customized vertical marketplace for their
maintenance/repair/operations (MRO) needs.The site
will feature an integrated database of industrial and institutional
MRO products. It will also offer research, analysis and comparison
tools, as well as extensive customization options specific to each
buyer's profile. It is expected to be up and running by September
2000.Under the
agreement, Rona will be responsible for getting various integrated
product databases up and running and ensuring service and delivery of
MRO products through its dealer network of about 500 store locations
in eastern Canada. Mediagrif will supply all the information
technology applications needed to operate the new next-generation
online supply.CANADIAN
TIRE TO ERECT DISTRIBUTION CENTRE IN WESTCanadian
Tire Corp. says it will open a new distribution centre in Calgary's
southeast end. The agreement involves the purchase of approximately
63 acres of land from the City of Calgary, an agreement conditional
upon city council approval and corporate approvals. If approved, the
500,000-sq.ft. facility will include trailer parking and storage, and
employ up to 180.Canadian
Tire is currently negotiating with an external firm to operate the
facility."A new
distribution hub in Calgary allows us to cost-effectively add the
required capacity to support our continued growth, which has
increased nearly $1.5 billion in the past five years alone," says
Stephen Bachand, CTC's president and CEO.Subject to
approvals, construction of the new facility will begin in the fall of
2000, and is scheduled to start operations in the spring of 2002. It
is expected to serve the company's 125 stores in Western Canada with
increased capacity, better in-stock positions for customers and
reduced product handling and transportation costs.COMPANIES IN THE NEWSCanadian
Tire will begin offering its customers Canadian Tire money
electronically on their Canadian Tire credit cards starting this
fall. Customers who pay by cash, debit card or cheque will continue
to receive paper Canadian Tire money, which has been a tradition
since it was conceived by CTC co-founder A.J. Billes in 1958 to
attract shoppers to CTC gas bars. Users can also earn the money on
their Options MasterCard.Wal-Mart
Canada has entered into an agreement with Canada Post to be the
exclusive retailer for a range of commemorative keepsakes that
celebrate Canada's heritage. The Canadian collectible items,
developed and supplied by Canada Post, include a Canada Day
Millennium keepsake containing commemorative and postage stamps, and
a medallion from the Royal Canadian Mint.Selkirk
Canada has moved to new offices: Selkirk Canadian Operations, 375
Green Rd., Stoney Creek, ON L8E 4A5; phone: 905-662-6600; fax:
905-662-5352.For the
third quarter ended May 31, Richelieu Hardware Ltd. recorded sales of
$51.9 million, up from $43.4 million for the same period a year
earlier, an increase of 20%. This marks the company's 19th
consecutive quarter of continuous growth. Earnings before income
taxes, interest, depreciation and amortization (EBITDA) rose 26% to
$6.9 million, compared with $5.5 million a year earlier. Net earnings
grew by 32% to reach $3.4 million, up from $2.8 million. Sales for
the first half of the year reached $92.1 million, up 20% from $77.0
million for the first six months of fiscal 1999. EBITDA totalled
$10.9 million, up 24%. Net earnings reached $5.3 million, up 31% from
$4.0 million. CANADIAN
STOCK WATCH