John Caulfield, Contributing Editor
 vol. x, #24, June 14, 2004

IN THIS ISSUE: • Rona's new buying teams revealed • Home Depot unveils Asian expansion plans • Big boxes play catch-up in appliance sales • Lowe's provides community assistance • 84 Lumber develops new training initiative • Irly's new management focuses on expansion

* * * * * * CONFERENCE CALENDAR UPDATE: Wow, I can't believe the fabulous support we're getting for this year's Hardlines Conference Series, September 8-9. Rona is the latest retailer to lend their generous support to the event — they've purchased a table at our Gala Dinner on Wednesday, September 8. They'll be in good company: Home Depot, Sodisco-Howden, TSC and others are already signed up! I don't want you to miss this amazing event, so please call Nancy Wright at 416-489-3396 or email for info on an early bird special that will save you $$! — Michael * * * * * * NOTE: Dollar amounts are stated in the currency of the country from which the story originates. — Michael McLarney, Editor & Publisher * * * * * *
"Curst be the verse, how well soe'er it flow/That tends to make one worthy man my foe." —Alexander Pope (1688-1744)
TORONTO — Home Depot's recently announced plans for expansion into China (see elsewhere in this issue — Michael) are part of what appears to be a major growth spurt for the company. It recently completed its acquisitions of Home Mart in Mexico and White Cap Construction in Southern California.Bob and AnnetteAnd in a rare visit to Canada, Bob Nardelli, Home Depot's CEO, spoke with Hardlines about its plans here and abroad for expansion. Besides the installation of the Asian division, the Canadian division will open its first store in Newfoundland, one of 15 stores it will open in Canada this year. He did not reveal where the Newfoundland store would be, although Annette Verschuren, who accompanied Nardelli during the interview, the Canadian division's president, told Hardlines in a previous interview that the province's capital, St. John's, is the most likely location. Across the chain, Nardelli noted that the company spent $500 million on store remodels last year, with everything from new ceilings and floors to improved lighting. The investment in these "refreshes" will double in 2004, as the payoff is measurable. "Those stores are performing extremely well," he noted. As the stores get updated, they are also being made to follow a more rigid operational format. "When I came on, 50% of the stores were compliant with standards," Nardelli said. The objective now is to get that up to 100%. "A consistency of message is important," he continued. "It's a big part of our problem." In Canada, programs being introduced include self-checkouts, which will be in 41 stores by July, and the balance of Canada's 105 stores by the third quarter. (More on my interview with Bob Nardelli in next week's issue! — Michael)
ATLANTA — Having solidified its retail presence in North America, Home Depot now plans to plant its flag on Asia's soil. The retailer will attempt to extend its reach globally with the establishment of a new management team to examine growth opportunities in China.Bill Patterson, formerly president of Home Depot's Central division, is running the new Asian team. According to his boss, Bob Nardelli, president and CEO of Home Depot, the company plans to expand in China through a combination of new-store openings and acquisitions. "I couldn't be more proud of what the Asian team has done," Nardelli said. "They've met all their targets." B & QThe company did not reveal when it planned to open its first store in China, where, or how many it intended to open in that country. One thing for certain, though, is that Home Depot will encounter stiff competition in China, where U.K.-based B&Q and German DIY retailer OBI have already established footholds. Leroy-Merlin has affiliated itself with Home Way, the country's first Western-style big-box retailer, which Home Depot helped launch through financial and consultative support. By choosing not to become a fuller partner in Home Way in the mid 1990s, Depot left a wide door open that several European dealers walked through. B&Q has aggressive plans for Asian expansion, and OBI intends to have 100 stores in China by 2010. Two other domestic chains, Orient Home and Home Mart, will also provide competition for Home Depot upon its arrival in China. Currently, Home Depot has about 50 employees working in two buying offices set up last fall in Shanghai and Shenzhen, China. Its plans to open stores are being disclosed at a time when China's economy is booming; it grew by 9% last year, and that pace has kept up this year, at nearly 10% in the first quarter of 2004. Home Depot officials estimate that the Chinese spend $50 billion annually on home renovations, and that this spending is rising 20% per year. As the housing market booms in that country, Patterson estimated that about 70% of those expenditures go towards the completion of interior spaces in the home.
BOUCHERVILLE, Que. — Here's the line-up for the new buying teams at Rona that I promised you. With the assimilation of the Réno-Dépôt business, Rona has combined the respective buying teams. The Réno-Dépôt division, which was headquartered in Montreal, will move into the Boucherville offices and distribution center of Rona. But along with some of the Réno-Dépôt team comes the model for fashioning the new team.While Rona had previously split up merchandising duties between buyers who negotiated prices and deals, and a merchandising team, which managed the programs and advertising specials, Réno-Dépôt's practice of combining the duties under a single merchandiser has been adopted by Rona. The new system is meant to provide more clearly defined merchandising roles for the buyers, which will further facilitate new product development and increase efficiency. We'll start at the top: Normand Dumont was promoted to the role of executive vice-president, merchandising. Under him are Luc Nantel, vice-president merchandising, hardware; Jeff Kilgour, vice-president merchandising, lumber; Larry Jarvis, vice-president merchandising, building materials; and Gabriel Rousseau, senior director, store sales support. Six hardlines teams report to Nantel, as vp hardware merchandising. They are: paint, decoration and flooring, under Suzanne Maggi, director; hardware, tools, furniture and storage, under Jean Lamarche, director; plumbing, kitchen, kitchen and ventilation, under Manon Bouchard; electrical, lighting and heating, overseen by Joseph Piro, director; seasonal, garden, housewares, stoves and fireplaces, under Yves Bergeron, director; and special projects and flyer coordination, headed by Pierre Rodrigue, director. Lumber under Jeff Kilgour: Ronald Tu, director, commodity trading, Western Canada; Wayne Sellars, director, technical services; and Josée Julien, director, lumber purchasing. Larry Jarvis' building materials team consists of: Rémy Harvey, director, building materials merchandising; and Hubert Robitaille, director, millwork merchandising, who will also play a key role in supplier negotiations. Rousseau's store sales support team will implement merchandising strategies within the stores, and be responsible for renovations, store openings and planograms. They are: Trevor Pocaluyko, regional director, store sales support, Ontario; Colleen Barker, regional director for Western Canada; and Nicole Plamondon, director, Ambiance Boutique and Decoration. Rousseau himself will be directly responsible for store sales support in Quebec.
LOUISVILLE, Ky. — Lowe's Cos. has added a new twist to its community outreach efforts here. It is partnering with the Louisville Metro Police and the Department of Neighborhoods to help stem what has been a rash of burglaries in four urban neighborhoods.The Louisville Courier reports that the Lowe's store on Dixie Highway is donating $4,000 worth of window and door locks and security lighting for 600 to 800 residents in the neighborhoods of Germantown, Schnitzelburg, Shelby Park and Smoketown. The retailer will also provide free installation through its "Lowe's Heroes" employee volunteer program. Each installation team includes a police officer, an employee from the Department of Neighborhoods and a Lowe's volunteer from its Dixie Highway, Preston Highway or Hurstbourne Parkway stores. "We look at this as an opportunity to educate residents about home security, encourage formation of block watches and increase positive interaction between the community and police," said Major Larry Watkins, commander of the district that includes the neighborhoods. The installation teams will conduct door-to-door home security inspections through July 23.
Surrey, B.C. — After an extended leave of absence, Stuart Joule, executive vice-president and general manager of Irly Distributors, has been succeeded by Garry Anderson, who takes the role of general manager of the wholesale buying group. Anderson, a 27-year veteran, was most recently operations manager.The final days of Joule's tenure were rocked by a takeover bid from Rona Inc., which is aggressively seeking new independents to join its banners in Western Canada. The Irly board of directors voted against any merger with Rona, but a couple of dealers ended up defecting on their own. With Anderson at the helm, the group is also taking a more focused approach to building its ranks, resulting in the formation of a new title, manager of the dealer development/sales department. Brad Dixon, formerly buyer for hardware, assumes the new role. He will be responsible for getting Irly's 50 bannered stores more fully on board with the many programs available through the group, including re-merchandising existing stores and recruiting new members. Irly owns a general wholesale division, Western Hardware, which sells hardware to a growing range of independents outside the Irly banner. Dixon will be charged with increasing these sales, as well. The new management has a mandate to regain direction for the group. Anderson says Irly has many advantages, including its position as a regional supplier, one that has been entrenched in the British Columbia market for a long time. "We do have the distribution center here — it's right in B.C., and it carries a fairly extensive line of hardware, as well as building supplies," he says.
WASHINGTON — Home Depot and a primary supplier of oscillating fans, China-based Shell Electric Manufacturing, have agreed voluntarily to recall a whopping 2.2 million of Shell's fans sold by Home Depot's stores. The recall is being orchestrated in co-operation with the U.S. Consumer Products Safety Commission.CPSC found that the fan's power cord can be damaged by its oscillating motion, a flaw that has already resulted in at least 31 incidents causing smoke and fire. Home Depot sold the fans under the "SMC" brand — for SMC Marketing Corp., which represents Shell in the United States — for around $20 each between January 1997 and October 2001. CPSC added that other dealers also sold the fans, although some of them have since gone out of business. Home Depot will issue a store credit for a returned fan, or customers can contact SMC Marketing Corp., which is based in Grand Prairie, Tex., for instructions on receiving a refund.
RONA CashwayBOUCHERVILLE, Que. — Rona Inc., the Canadian home improvement distributor and retailer, has erected a new Rona Building Centre store in Peterborough, Ont. The 41,000-sq.ft. store, built at a cost of $9 million, is on the site of a former Rona Cashway.On the same day last week that the Peterborough store had its grand opening, a newly renovated Rona Cashway in nearby Lindsay, Ont. had its grand opening as well. According to Claude Bernier, executive vice-president of Rona, who was on hand for the openings, the Lindsay upgrade cost $200,000. Launched just last year in Midland, Ontario, Rona's Building Centre concept was created in response to the specific needs of trades people, contractors and DIYers looking for a range of décor and renovation products for major projects.
CEDAR RAPIDS, Iowa — Maytag Corp. will cut its salaried workforce by one-fifth by the end of 2004 as part of a consolidation strategy aimed at producing annual savings of $150 million.The company plans to trim 500 salaried workers from its Hoover Floor Care division, and 600 from its Maytag Appliance division and corporate headquarters. The company would not state whether cuts were planned at its Amana Refrigeration operations, which was merged into Maytag in 2001. Ralph Hake, Maytag's chairman, referred to these maneuvers as its "one company" strategy, and said Hoover's and Maytag's sales forces would be merged. But financial considerations also played a role in these reductions, as Maytag disclosed that it would not meet its earnings forecasts for the year and its second fiscal quarter. Sales of floor care products and home appliances in April and May did not meet projections, Hake said in a prepared statement. His goal is for Maytag to achieve an 8% operating profit margin by the first quarter of 2005 Maytag's plans may be complicated by the latest news that it was unable to reach a negotiated settlement with the union workers at its Newton Laundry Products plant in Newton, Iowa, resulting in a shut down of production.
Hardlines has partnered with to offer the industry an easy and affordable way to place job openings on the Internet. To post a single job on at the special price of $150.00 plus GST for 60 days, just click here to Register and Post a Job. Click here to read More about the program.
EIGHTY-FOUR, Pa. — 84 Lumber, the $2.85 billion pro dealer based here, has selected an Ohio-based company to provide its contractor-oriented employees with training courses. The Dayton Business Journal reports that Butler Learning Systems will customize one of its training courses, "The Habit of Negotiation-Selling," for 84's 2,000-plus contractor sales representatives, outside sales people, sales managers and store managers. The course will be offered through more than 50 one-day seminars at 84 Lumber locations nationwide. 84 operates 450 stores in 34 states. NEW YORK — Both Home Depot and Lowe's continue to increase their share of the heavy appliance market, taking away from the number-one player, Sears, says a survey by TWICE, a trade magazine. U.S. appliance sales rose 10% overall last year, to $18.1 billion, from $16.4 billion in 2002. Lowe's, the number-two seller, had growth of 17% to $3.5 billion, but Home Depot is narrowing the gap, as its appliance sales grew by 23.6% to hit $2 billion last year. Sears added more assortment in its white goods last year, but its sales increased by only 3.7%, to $5.6 billion. RIVIÈRE-DU-LOUP, Que. — A program to expand Bargain Building Materials' dealer base beyond its home province of Quebec is starting show results. With a network of 15 corporate stores (13 in Québec and 2 in Ontario) and one 250,000 sq.ft. distribution centre, Bargain began promoting its authorized dealer concept in earnest in 2003. The program provides independent hardware stores, home decorating centers, lighting and furniture stores, floor-covering retailers, etc., with five product lines: recycled paint and accessories, MDF mouldings, electric and cordless tools, imported hardware and floor coverings. Bargain has three authorized dealers in Quebec, and has gained a foothold in the Maritimes with the signing of a new dealer in Summerside, P.E.I. Sales by Bargain were $33.5 million in 2003. ST. JACOBS, Ont. — By the end of the month, Home Hardware Stores Ltd. will have added 18 new locations, rivalling the 22 new stores added in all of 2003. Along with the new stores, expansion by existing dealers brings Home's total retail space to more than 8.3 million sq.ft. Aggressive plans for growth extend to Home Furniture, the company's home furnishings banner, which has added 12 new locations in the past year, bringing the total number of stores to 62. The company has also broken ground on an expansion at its main warehouse and office facilities here. The project, which will add nearly 340,000 sq.ft., will be completed in four phases over a three-year period. TORONTO — Following a recent announcement that his company will acquire 24 Kmart stores in the U.S., Home Depot chairman and CEO Bob Nardelli said such a large-scale purchase could happen in Canada. He mentioned the Zellers chain, as a possible example. The discount department store chain with almost 300 stores across the country, is owned by Hudson's Bay Co., and has suffered from slow growth over the past several years, compared with its key competitor, Wal-Mart Canada. Wal-Mart entered Canada just over a decade ago when it purchased some 200 Woolworth stores. MISSISSAUGA, Ont. — Bakor, the roofing company, has launched a product training center, calling it the first-ever for the roofing industry. The facility has been designed to train Bakor's staff, as well as architects, specifiers, distributors and contractors, on the proper application of Bakor's own products, but it's also intended to provide a broader forum for teaching application techniques of building products such as roofing, air barrier and waterproofing. The training facility is located in Bakor's new Canadian headquarters. It features a classroom with seating for 24 and a 1,000-sq.ft. demonstration area. MINNEAPOLIS — May Department Stores Co. will buy Marshall Field's department stores and nine Mervyn's locations in the Twin Cities for $3.24 billion in cash, in a deal that's expected to close in either the third or fourth quarter. May will keep using the Marshall Field's name in a move that strengthens its presence in the Midwest, giving it a total of 62 Marshall Field's stores, mostly in Chicago, Detroit and Minneapolis-St. Paul. BERLIN — A German law dating back to 1891 has been upheld by that country's highest court. According to the ruling, shopkeepers will have to keep their doors closed on Sundays, public holidays and after 8 p.m. on weekdays. The Federal Constitutional Court turned down an appeal by the giant retailer Metro AG, which had been pushing to get the law updated. EDMONTON, Alta. — Sears Canada Inc. is putting its department store at West Edmonton Mall through a major renovation, which is scheduled to be done by October. The 103,000-sq.ft. retail area will increase by 2,500 sq.ft., offering a broader selection of home fashions and apparel. The project is part of a multi-year, multi-million dollar initiative to update all the stores at least every seven years. Four other sites will be renovated in 2004, including the store at Guildford Town Centre in Surrey.
Troy Rice, formerly senior vice-president-operations at Home Depot, has been appointed president of Home Depot's 600-store Central division. He replaces Bill Patterson, who has been appointed president of the newly formed Asian division (see lead story) ... Carl Liebert, who joined Home Depot from Circuit City last year, fills Rice's former position as senior vice-president-operations.TORBSA Ltd., an Ontario LBM buying group with 43 member-owned stores, appointed its board of directors at its recent annual general meeting. Mike Mayhew of Select Acoustic Supply Inc. in Concord was appointed 2004 president ... The 2004 board also includes past president Martin Lieberman of Blair Building Materials Inc. in Maple, secretary Joe Driscoll of Byron Building Supplies Ltd. in North Bay, treasurer Blake Oldershaw of Oldershaw Building Supply Co. Ltd. in Chatham, vice-president Peter Adamo of Rex Building Supply in Toronto, and vice-president operations Ed Caklos of Chauncey Builders' Supply Inc. in Toronto.
Wholesale inventories in April were $301.2 billion, down 0.1% from March, but up 3.7% from one year ago. Wholesale sales reached $268.7 billion, up 0.8% from the previous month and up 15.1% from April 2003.The jobless rate in the U.S. was up for the last week in May, as initial claims for jobless benefits rose to 352,000, says the Labor Department. The number of people continuing to collect unemployment insurance fell in the prior week to the lowest in three years. Companies added 1.2 million jobs in the first five months of this year.
Canada's rate of housing starts in May dipped 1.2% from the previous month, but remains high at 238,800 seasonally adjusted, compared with 241,600 in April, according to Canada Mortgage and Housing Corp. Year-to-date actual starts were up a record 10.4%. Urban starts fell 1.3% overall to 208,000 units seasonally adjusted, in May. Of that, urban multiple starts decreased 6.2% to 101,100 but urban single starts actually rose 3.8% to 106,900 on a seasonally adjusted annual basis. Rural starts in May were estimated at a seasonally adjusted annual rate of 30,800 units.Canada's home building market remains red hot, with housing intentions in April, measured by the value of residential building permits issued, up 4.9% to $3.12 billion, says Stats Canada. The biggest gain was in multi-family building permits, up 15.5%. Non-residential building permits rose 9.5% in April from March to $1.4 billion. The average price of a new home in Canada was up 0.7% in April from the previous month. Year over year, the rise in prices was up 5.6%, the highest annual increase in 14 years, says Statistics Canada.

****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.  

MANUFACTURER'S 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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