John Caulfield, Contributing Editor
 vol. x, #23, June 7, 2004

IN THIS ISSUE: • Home Depot faces discrimination suit • Winroc is sold to income trust • U.S. Commerce Department slashes softwood duties • Marvin's explores new markets • Kingfisher makes strong gains in 1Q • Bunnings faces Aussie big box competition • TruServ Canada signs supply deal with Ontario group • CSA re-brands a product testing organization

* * * * * * SHOWCASE YOUR PRODUCT VIA HARDLINES: A low cost way to get your new product message out quickly and inexpensively! Four times a year from Hardlines. Contact: Phyllis Nowell, Sales Manager: 416-489-3396; fax: 416-489-6154; . Deadline for next issue: August 10. * * * * * * NOTE: Dollar amounts are stated in the currency of the country from which the story originates. — Michael McLarney, Editor & Publisher * * * * * *
"Praise the Lord and pass the ammunition." — Lieutenant-Commander Forgy (at Pearl Harbor)
CALGARY — The Winroc Corp., a North American specialty drywall distributor, has been sold to Superior Plus, a Calgary-based income fund that already owns Superior Propane, Canada's largest propane distributor, for $101.2 million.Winroc, which consists of the distribution group, Winroc, and Allroc Building Products, a buying group which represents LBM dealers across Canada. will be operated as a separate division of Superior Plus. "Change in ownership will be transparent to customers and suppliers alike," says Bob Hancock, vice-president of Allroc. He adds that the Winroc management will stay intact, with one change at the executive level. Wayne Jack, Winroc's founder and chairman of the board, will exit the company, while Paul Vanderberg, president, will remain on. "The value proposition for Winroc's customers is based in part in service, in part in product diversity, and also in competitiveness, which will be enhanced, as we have a mandate to grow the distribution side exponentially through acquisition," Hancock says. He expects the company to be up to three times larger within the next three years. He expects access to a larger pool of products and an increased commodity base to make the Allroc business more appealing to potential dealers, as well. Winroc has annual revenues of $320 million with corporate revenue in Canada split evenly between Winroc and Allroc purchases. On a North American-wide basis, Winroc accounts for 70% of Allroc's volume.
NEW YORK — Home Depot has been accused by another group of its own employees of workplace discrimination, the latest dent in this company's reputation that its CEO felt compelled to defend publicly.Six women, all of whom are African-American, have filed a $12 million lawsuit against the industry's largest retailer. They claim that as human resource employees in the company's stores in and around New York City, they are earning less than white or black male counterparts. They also allege that supervisors altered records to obscure racial differences in pay, and rudely rebuffed their complaints. A spokesperson reiterated Home Depot's policy of zero tolerance for any kind of discriminatory behavior among its employees. In recent weeks, other, similar employees complaints in different markets have surfaced. Home Depot has since issued a statement saying "the suit has no merit." The day before Newsday reported on this suit, Aram Rubinson, a retail analyst with Banc of America, lowered his rating for Home Depot from buy to neutral. He explained that Home Depot's sales are likely to be affected by a slowdown in home sales. That prompted Bob Nardelli, Home Depot's chairman and CEO, to insist, in an interview with the Associated Press, that the company's strategy was working, and that he had no intention of adjusting it. Surprisingly, however, Nardelli conceded that impressions held about Home Depot, good or bad, are rarely in line with reality. "The company was probably never as good as was perceived, and it sure as hell is not as bad as it's perceived today," he told AP. Nardelli is understandably touchy, after shareholders held his feet to the fire last week because the company's stock price during his tenure over the past three and a half years is down 12%. Nardelli admitted that his "greatest challenge" is to convey how well the company has been doing financially to the public.
LEEDS, Ala. — Marvin's, a regional building supply dealer chain with stores in Alabama and Kentucky, ended 2003 with 18 stores, but it has aggressive plans to open more stores in the year ahead — five more in fact. Two stores have already been announced, a former Wal-Mart store in Selma, Ala., will open its doors on June 10, followed soon after by an outlet in Arab, Ala.Marvin's, a chain of retail-oriented stores, average 35,000 sq.ft. in size, plus an attached nursery and drive-through lumber yard. What's fuelling the growth of this DIY-oriented chain? "We've had some positive comp growth and we're just exploring other markets," says Darrin Gilliam, vice-president merchandising and marketing for Marvin's.
KITCHENER, Ont. — TruServ Canada Cooperative Inc. and TORBSA Ltd. have signed a wholesale supply agreement, giving TORBSA's building supply dealer members within Ontario access to TruServ Canada products and programs under a group arrangement.This latest deal reflects TruServ Canada's heightened focus on growth since the arrival of its new president and CEO, Bill Morrison, who joined the Winnipeg-based co-op wholesaler after heading up the growth of Home Outfitters, the home décor and accessories chain owned by Hudson's Bay Co. Morrison says he wants to see the company's sales increase threefold, in part by increasing TruServ's share of the giant Ontario market, which accounts for fully one-third of Canada's $31.7 billion in retail home improvement sales. Under the agreement, TORBSA members have the ability to purchase products from both the Kitchener and Winnipeg distribution centers. They can also take advantage of TruServ Canada's field and help desk services. TruServ operates and supplies a range of banners: True Value Hardware, V&S Department Stores, V&S Options, Country Depot and Pet Junction.
VANCOUVER, B.C. — The U.S. Department of Commerce will cut the countervailing and antidumping cash deposit rates for all Canadian softwood lumber exports to the U.S. A preliminary country-wide countervailing rate of 9.24% and an "all other's" antidumping rate of 3.98% has been established — a significant drop from the current countervailing rate of 18.79% and the existing antidumping rate of 8.43%.The combined preliminary rate totals13.22%, less than half the current rate of 27.22% imposed on Canadian shipments of softwood lumber. Shipments made by Canadian suppliers between May 22, 2002 and April 30, 2003 are also being reviewed and final determinations for these reviews will be made by December 7, 2004. However, if a negotiated settlement is not reached between the two countries by then, the old rate could be re-introduced. "We are pleased to see that the rates have been cut by more than half," said John Allan, president of the B.C. Lumber Trade Council, in a prepared release. "We are confident that the DOC will not be able to fairly find any subsidy in the final determinations." The council maintains that Canadian softwood lumber is not subsidized and not dumped in the U.S. and expects all duties to be removed eventually. Its member companies account for about half of Canadian lumber production and half of Canadian lumber exports to the United States.
CLEVELAND, Ohio — As offshore sourcing becomes the norm among North America's biggest hardlines retailers, the value of product testing becomes into ever sharpening focus. One testing facility, CSA, has recently re-branded and repositioned to capture this growing market.Now called OnSpeX, the consumer testing and database management facility is aiming to expand its consumer product evaluation, data management and consulting services in the U.S., where it goes head to head with Underwriters Labs, and must contend with a raft of smaller independent testing companies. Ray Gabel, vice-president, merchandising and marketing — hardlines for Home Hardware Stores Ltd., acknowledges the importance of testing, saying it's "very, very important." and notes that quality is a challenge as pressure continues to provide better pricing. "People are demanding better quality," he says, adding that his dealers hate poor quality because of increased returns — and the buyers have to answer for it. "I get my head in a sling over it," he adds. That's why OnSpeX takes the testing function beyond specs testing to help retailers and consumer products manufacturers quantify and analyze the performance of products from a more consumer-friendly perspective. The new division was developed, in large part, as the result of inquiries from major retailers and certification testing customers of CSA International. OnSpeX is part of CSA Group, an independent, not-for-profit membership association serving business, industry, government and consumers.
LISMORE, Australia — The Bunnings Warehouse Property Trust has purchased an existing 10,000-square metre Bunnings Warehouse property here for AU$7.75 million from BBC Hardware. That brings the total number of Bunnings stores to 50 Australia-wide.In April, Bunnings, Australia's leading hardware and home improvement retailer, sold off its West Gosford warehouse in New South Wales to ICA Property Group for AU$11 million (US$7.6 million). The terms of the deal include a 10-year leaseback to Bunnings Pty Ltd., the largest operating division of Bunnings' parent, Wesfarmers Ltd. The expansion is in line with Bunnings' ongoing expansion plans, as its home improvement business has enjoyed 29% growth of the past two decades, the highest on the Australian stock exchange, but anticipated slowdowns in the housing market here are expected to slow that growth. Bunnings continues to look for sites for its big box stores, and is preparing for its first big site in Dunedin, where it faces new competition from Mitre 10, the co-op chain that is launching its own dealer-owned big boxes (Holy Rona-style model for growth, Batman! — Michael). Martin Dippie, a Dunedin businessman and developer who owns Jacks Mitre 10, recently purchased land to build a AU$10 million megastore.
LONDON — Sales for home improvement retailer Kingfisher Plc grew by 10.1% in the first quarter of the year, bringing sales to £1.9 billion (US$3.5 billion). Same-store sales were up 5.8%. Retail profit grew 18% to £145m.Sales by Kingfisher's flagship chain B&Q grew 6.5% in the U.K. and Ireland, which accounted for 60% of the group's sales. Same-store sales were up 2.5%. The company was negatively impacted by poor weather in March and April, reducing sales. During the period, nine smaller stores were converted to B&Q's new Mini-Warehouse format, bringing the total to 37. In addition, one new B&Q Warehouse was opened. In France, Kingfisher's Castorama division saw total sales grow by 11.9%, with strong same-store sales of 8%, driven, in part, by Castorama's foray into entry-level products for the price-conscious French consumer. The Brico Depot discount banner enjoyed saw sales growth of 19.2% in constant currency. Kingfisher's international sales grew by 59%, as two stores were opened in Italy and one in Spain. Sales in Poland were very strong, rising 68.8%.
"We have no intention of getting into the appliance market. We will leave it to others who dominate it. We're focusing on our other categories and that's what we want to pursue, that's where we have our expertise." — Robert Dutton, president and CEO of Rona Inc., when asked recently whether the home improvement retailer would consider competing with Home Depot on sales of heavy appliances.
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ATLANTA — The previously announced acquisition by Home Depot of Home Mart, a 20-store chain in Mexico, was completed last week. The deal brings the number of Home Depot-owned outlets in that country to 39, almost double what it had before taking on Home Mart. Terms of the deal were not disclosed. Home Depot entered the Mexican market in 2001 when it bought up the Del Norte chain. MOORESVILLE, N.C. — Lowe's president Robert A. Niblock recently explained at an investors' conference that the retailer's plans to add 140 stores this year include moving into three new states — Minnesota, Wisconsin and Maine. In addition, a new regional distribution center is going up in central Florida. Niblock said Lowe's merchandising strategy will target two emerging consumer groups, "serial renovators," typically homeowners who continually upgrade their kitchens, baths or family rooms for reasons of fashion or product upgrades, and "home entertainers," primarily younger, educated professional women who are brand loyal. BURNABY, B.C. — Forestry giant Taiga Forest Products Ltd. ended the fiscal year ended March 31, 2004 with sales of $1.1 billion, up 18.6% from $912.7 million in 2003. Earnings for the year were $10.7 million, up from $7.8 million in the year prior. Net profit for the fourth quarter was $3.9 million on sales of $273.9 million. TROY, Mich. — Kmart will sell off as many as 24 of its outlets to home improvement giant Home Depot. The exact number of stores, and their locations, will be determined over the next couple of months. The deal is expected to be worth up to $365 million. Kmart has more than 1,500 stores in 49 states. It emerged from bankruptcy protection last year, but sales continue to drop despite the turnaround. NEWTON, Iowa — Appliance maker Maytag Corp. will undergo a comprehensive business restructuring that consolidates the Hoover Floor Care, Maytag Appliances and corporate headquarters organizations. The consolidation of the operations is expected to take advantage of the different divisions' overlapping customer bases, thereby improving Maytag's competitiveness, with a planned 8% operating profit margin goal in the first quarter of 2005. The integration of Hoover and Maytag Appliances will result in the elimination of about 20% of the salaried workforce. ATLANTA — A former Home Depot subcontractor named Raymond Hammond has filed a lawsuit in North Carolina against the retailer, claiming wrongful contract termination after he had alerted the retailer's former heads, Bernie Marcus and Arthur Blank, that Home Depot had overpaid him for every installation he did in November, 1999 in upstate New York. The L.A. Times reports that Hammond has received emails from about 70 other contractors across the country who were also overpaid for window and kitchen installations. The Times reports that the overpayment was usually minor — around $20 per job — but sometimes ran as high as 20% above the actual costs. However, several days after reporting the overpayments in August 2001, Hammond's contract with Home Depot was terminated, according to his lawsuit. ISSAQUAH, Wash. — Costco Wholesale Corp. reported net sales of $3.80 billion for the four weeks ended May 30, 2004, an increase of 19%, compared with Wal-Mart, which had gains of 12.8% from $3.20 billion. For the 39-week period ended May 30, Costco reported net sales of $35.15 billion, up 15% from $30.67 billion from the similar period a year earlier. TORONTO — Tremco Retail Brands has changed its name to Rust-Oleum Consumer Brands Canada. The change reflects Tremco's integration into the Rust-Oleum family of companies since being purchased by Rust-Oleum Inc. in 1997. Tremco's brands include Tremco, Flecto, Mono, Varathane and Watco. HOFFMAN ESTATES, Ill. — Sales for Sears Roebuck and Co. in May fell 4.7% to $2.08 billion, from $2.18 billion in the same month a year ago. Same-store sales fell 3.7%. MILWAUKEE, Wis. — Briggs & Stratton, the industry's leading supplier of gas engines for outdoor power equipment, has signed a definitive agreement to acquire Port Washington, Wis.-based Simplicity Manufacturing, which sells power equipment products under the Snapper, Ferris, Giant-Vac and Simplicity brands. Simplicity expects to generate $350 million in sales for the fiscal year that ends June 30, 2004. B&S will pay $227.5 million in cash for the company, and expects to close this deal by the first quarter of 2005. Simplicity's management team will stay in place. TORONTO — Owens Corning Canada Inc. has become a member of the Canadian Green Building Council, affirming the insulation maker's commitment to environmental responsibility. The CaGBC is a group of representatives from different areas of the design and building industry working to change industry standards, develop green building guidelines and create educational tools to support its members in implementing sustainable design and construction practices. STE-MARIE, Que. — The sale of bath and accessories maker MAAX closed last Friday. The previously announced acquisition was undertaken by a syndicate comprising a number of investment groups, including J.W. Childs Associates, Borealis Private Equity and the Ontario Municipal Employees Retirement System. CHICAGO — Housewares maker Home Products International Inc. has announced that its chairman and CEO, James Tennant, will buy the company outright for $1.50 per share. Tennant owned about 6.5% of the company's outstanding shares as of early February, according to Reuters data. The transaction would value the part of the company Tennant does not already own at about $11 million. Home Products had sales of $233.6 million in 2003.
Ace Hardware Corp. has strengthened its growing lumber and building materials business with the appointment of Jack Herr and Martha Johnson as hardlines managers in the Ace LBM department. Herr was most recently a field sales representative for wholesale distributor Maintenance Warehouse, a Home Depot company. Johnson comes over from a sales and marketing manager position at Meranjil Landscaping Corp. They will be responsible for selling building materials and hardware to some 1,000 Ace building centre dealers.
Construction in April climbed to $970.4 billion, up 1.3% from March and up 11.3% from the same month a year ago. Private non-residential construction was up 1.3% to $219.2 billion, up 1.3% from last month and down 0.1% from April 2003.Construction spending rose 1.3% to a seasonally adjusted annual $970.39 billion rate in April, the third consecutive record high, and upward revisions to March pointed to a higher-than-previously reported figure for first-quarter gross domestic product. Two of the three components, private residential construction and public construction, were at record highs in April.
Canadians invested $7.1 billion in new housing in the first quarter of 2004, up 14.3% from the first quarter of 2003. The largest dollar increase was in expenditures on new apartments/condominiums (+32.3% to $1.5 billion), the result of continuing work on apartment and condominium projects begun in late 2003, combined with a rise in the average value of dwelling units. Expenditures on new single-family dwellings increased 7.2% to $4.4 billion. The total value of investment in the housing sector in the first quarter was $13.8 billion, up 15.4% from the first quarter of 2003. Spending on renovations to existing housing stock totalled $5.3 billion, up 14.2% from the first quarter of 2003. Acquisition costs jumped 26.5% to $1.4 billion.

****HARDLINES MARKETPLACE**** Don't miss the products and services on the Hardlines web Marketplace: And check out Hardlines Classifieds on the web: HELP WANTED BRANCH MANAGER Mitten IncMitten Inc. is a leading manufacturer and distributor of vinyl siding products. We are currently looking for a Branch Manager for our new locations in Montreal Quebec and Oshawa Ontario scheduled for opening in the spring of 2005.

The Montreal Branch Manager will develop and manage the sales territory within a one hundred kilometer radius of Montreal. Responsible for the performance of the sales territory and the Montreal distribution centre, reporting to the Canadian Vice President of Sales. The Oshawa Branch Manager will develop and manage the sales territory east of Toronto and centered in Oshawa. Responsible for the performance of the sales territory and the Oshawa distribution center, reporting to the Canadian Vice President of Sales. The successful candidate(s) will possess a University degree in business or some business related discipline. They will possess above average communication skills, highly motivated, be an organizer of both office and warehousing tasks, responsible for all aspects of Health & Safety, be able to work with minimal supervision and have good leadership skills. The candidate(s) must be willing to travel for periods of up to 1 week within the sales territory or to the Mitten head office (up to 40%). Knowledge of retail lumber and the Wholesale Building Materials Industry will be considered an asset. The successful Montreal candidate will also be fluent in both French and English. We offer a competitive base salary, an auto allowance, a complete benefits package and a performance related bonus. If you are interested in the above position please email or mail your resume and covering letter by June 30th, 2004 to: Mitten Inc. P.O. Box 2005 70 Curtis Avenue North Paris, ON N3L 3T2 Attn: Human Resources No telephone calls or faxes please — only those candidates selected for an interview will be contacted.  

DEVELOPMENT MANAGER The Ontario division of RONA is currently looking for a Development Manager. Responsibilities include recruitment and integration on new independent dealers to the RONA banner. Candidates must be a self starter, able to work independently and able to build relationships. A minimum of 5 years in the retail industry, specifically the Ontario hardware and building materials market is required.

Interested candidates can submit their resumes to RONA ONTARIO, 1170 Martingrove Rd, Etobicoke, ON, M9W 4X1, Fax: 416 246-5276 attention: Human Resources.  

SALES REPRESENTATIVE Indusport Agencies, a manufacturer's Rep firm, offering sales and merchandising services to building materials, and industrial products manufacturers, seeks commissioned reps to cover northern Ontario, and eastern Ontario.

Must have sales and merchandising experience to the hardware, home improvement and industrial supply industries. Please fax information to fax Shawn Hamill, (519)220-1372.  

ACCOUNT MANAGER, FLOORING SPECIALIST — BRAMPTON CanWel — one of Canada's leading distributors of building materials to the retail and industrial markets, is continuing to grow. We are looking for a motivated individual to join our sales team at our Brampton Customer Service Centre.

We are looking for a results-driven and sales-orientated individual with excellent communication, interpersonal and negotiation skills. Familiarity with the building materials industry would be beneficial. Reporting to the Branch Manager, you will develop and oversee a customer base to maximize profits as well as create new sales opportunities throughout the Greater Toronto area, operating out of our Customer Service Centre in Brampton. This position will provide a focused approach to CanWel's business to the marketplace and create new sales opportunities. This role also includes providing customer information to regional sales staff to support ordering and shipping. You will apply your minimum 3-5 years of flooring industry experience with hardwood, laminates, engineered woods and underlayments along with your demonstrated outstanding sales performance and customer service skills. In return for your contribution, a competitive salary/benefits package is offered. Please forward your resume to: Human Resources CanWel Building Materials Ltd. 15 West Drive Brampton, Ontario L6T 3T5 Fax: 905.457.7251 Email: We thank all applicants for their interest; however, only those selected for an interview will be contacted.  
********************************************************************************** INDUSTRIAL INSIDE SALES REPRESENTATIVE — BRAMPTON CanWel one of Canada's leading distributors of building materials to the retail and industrial markets, is continuing to grow. We are looking for a motivated individual to join our sales team at our Brampton Customer Service Centre. As part of our inside sales team, you will work closely with the Outside Account Managers/support staff and deal directly with customers to provide full service/sales support. We are seeking a results-driven and sales-oriented individual with excellent communication, interpersonal and negotiation skills. The successful candidate will have:
  • 1-3 years industrial sales' experience
  • Strong organizational skills
  • Excellent administrative skills
  • Problem solving skills
  • Knowledge of JDE One World an asset
Familiarity with the building materials industry and industrial products and their application would be beneficial. Post secondary education (preferably in sales and/or marketing or the equivalent of two years' sales experience. In return for your contribution, a competitive salary/benefits package is offered. Please forward your resume to: Human Resources CanWel Building Materials Ltd. 15 West Drive Brampton, Ontario L6T 3T5 Fax: 905.457.7251 Email: We thank all applicants for their interest; however, only those selected for interview will be contacted.
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