John Caulfield, Contributing Editor
 vol. x, #25, June 21, 2004

IN THIS ISSUE: • Nardelli likes Canadian "testing ground" • Ace beefs up hardlines purchasing • Western Tool makes acquisitions • Hardlines Conference takes on international • Business turns to eBay to unload merchandise • Lowe's battles investor concerns

* * * * * * EARLY BIRD SPECIAL FOR HARDLINES CONFERENCE:: You know how excited I am about our upcoming Conference Series. I can't stop talking about it! But who can blame me? We've got some of the greatest retail minds in the world — bar none — coming to speak at this event! And from all over the world, including Los Angeles, Atlanta, Chile, and even Cornwall, Ont.! For the Early Bird Special, call Nancy at 416-489-3396 before June 30 to register. * * * * * * NOTE: Dollar amounts are stated in the currency of the country from which the story originates. — Michael McLarney, Editor & Publisher * * * * * *
"If you haven't got anything good to say about anybody, come sit next to me." —Alice Lee Roosevelt Longworth, daughter of Theodore Roosevelt (Term: 1901-1909)
TORONTO — With a limited number of stores and somewhat more autonomy than other divisions, Home Depot Canada has served as something of a testing ground for many of Home Depot's new ideas over the years, said Home Depot president and CEO Bob Nardelli.He spoke recently with Hardlines following a presentation he made at 2004 Store, the annual convention of the Retail Council of Canada. Nardelli noted that systems and programs can be tested, and managed, in a market that contains only 100-plus stores. When the bugs get worked out, successful programs can make an easy transition south of the border. In fact, the softer side of Home Depot was originated in Canada, by Canadian president Annette Verschuren and then-vice-president merchandising, Eric Peterson. Verschuren has since been made president of Home Depot's Expo division, in addition to her Canadian duties. "Annette has been at the forefront of looking at décor," said Nardelli. However, don't expect Home Depot's high-end décor format, Expo, to come to Canada anytime soon. Expansion of the division has stalled in the U.S. "But right now we're getting great results implementing the décor model into some of our existing stores," he added. "One of the things Annette and her team are doing in Canada is working the store size to suit the market," Nardelli said. Downscaled footprints, 15%-20% smaller than the traditional 135,000-sq.ft. store, have enabled the retailer to successfully penetrate markets that would not easily support a full-sized outlet. At-home services represent a market that Home Depot has "only scratched the surface" of, said Nardelli. But new approaches are being tested north of the border. In the Vancouver market, on Canada's West Coast, a landscape consulting service was introduced last month.
OAK BROOK, Ill. — The addition last week of two industry veterans to the lumber and building materials department at Ace Hardware Corp. marks an expansion of the LBM business of the largest dealer-owned buying group in North America.Jack Herr and Martha Johnson were both hired as hardlines managers within Ace's building materials department. Out of 4,800 retailers affiliated with Ace, 1,000 sell building materials sourced through the buying group. Their purchases account for one-fifth of Ace's wholesale revenue, according to company spokesperson Paula Erickson. In the fiscal year ended January 4, 2004, Ace generated $3.16 billion in total wholesale sales. The new additions to the team will both focus on hardlines aimed at the building center dealers in the Ace network, reflecting the growth of that business by these dealers, and giving them a more complete one-stop shop. Amy Pellerito, LBM manager at Ace, to whom Herr and Johnston report, calls it "a fast growing and highly important segment of our business." Herr, who has three decades of industry experience, joins Ace from San Diego-based Maintenance Warehouse, an industrial/commercial distributor owned by Home Depot, where he held various sales positions over the past two years. Prior to that, Herr was a building materials trader for Ace and Builder Marts of America (BMA), and held sales and management positions with American/Thunderbird Moulding, a business development manager for BMA. (BMA and Ace have had a strategic purchasing alliance for several years.) Johnson has spent 27 years in the business, including the last two as sales and marketing manager for Meranjil Landscaping Corp., a commercial and residential landscaper based in Chicago Heights, Ill. Johnson's diverse resumé also includes stints with Georgia-Pacific's roofing division, building products merchandising manager for TruServ Corp., and senior merchandising manager/inventory control manager for the now-defunct Handy Andy Home Improvement Centers.
SALEM, Ore. — Western Tool Supply is "still in a growth mode," according to its president Kevin Kiker, even as it absorbs two recent acquisitions in the U.S. and Canada that increased its store count to 61 units. "We see a lot of opportunities out there," says Kiker, who founded Western 23 years ago and has built it into one of the larger regional tool and hardware dealers in North America.Western made its first foray into Canada recently by purchasing, for an undisclosed amount, the nine-unit House of Tools, an Edmonton, AB.-based specialty dealer that he projects will generate CD$42 million in 2004 sales. Kiker told Hardlines that these stores continue to operate under the House of Tools banner. Western had previously entered into an agreement to purchase House of Tools in April 2002, but that deal fell through when the two sides couldn't agree on the price. Acquisition talks resumed last December, he said, after House of Tools had made some internal shifts that included consolidation. In early 2004, Western also acquired 13 of Woodworkers Warehouse's stores, after the Revere, Mass.-based retailer decided last December to close its doors and liquidate. Kiker says these stores — in New York, Vermont, Connecticut, Maine, New Hampshire and Massachusetts — were profitable even when Woodworkers ran them. At one point last fall, Western showed interest in acquiring all of Woodworkers Warehouse. "What we were able to do eventually was cherry pick its best stores," he says. The acquired Woodworkers stores are now bannered as Western Tool Supply, and Kiker says their niche is far more contractor-focused (Western's tagline is "The Contractor's Choice") than under Woodworkers, which targeted consumers at a time when big boxes like Home Depot and Lowe's have come to dominate the retail tool market. In 2003, Western, which still operates 35 stores in six western U.S. states, generated $38 million, and ranked 290th among the 500 largest home improvement retailers in the United States, according to Home Channel News' annual Retailer Scoreboard. "And we're still moving up," says Kiker, though he declined to name companies Western might be eyeing for possible future acquisition. Western operates stores in some big markets like San Francisco, Anaheim and Salt Lake City, but its main focus is secondary communities such as Augusta, Maine, or Klamath Falls, Ore.
WORLD HEADQUARTERS, TORONTO — From a global picture of the world economy and how it will affect us all back home, to one of the brightest lights on the independent retail front right here at home, the Hardlines Conference Series will focus on what's hot in home improvement retailing today.The two-day event, being held at the Toronto Renaissance Airport Hotel September 8-9, is the annual industry summit aimed at providing profitable tips and insights into the latest trends in home improvement retailing. It brings together the industry's top retail and manufacturing executives in Canada and the U.S. — and the speaker roster is a who's who of retailers and specialists from around the world. From Los Angeles, Ira Kalish of Deloitte Research will give us a real global perspective, one that will help all of us understand how to run our businesses better back here at home. China's economy is surging ahead at almost 10%, and is fast becoming the next "gold rush" for retailers. And why do we care? Because the consumer trends and demographics that fuel that expansion is affecting your competitors — and your customers. Meanwhile, closer to home, we've got one of the smartest — and most outspoken — independents in the country, Roy Perkins of the Rona Home Centre in Cornwall, Ont., to join us. A great example of smart retailing put into front-lines practice. Jim Inglis, a former vice-president at Home Depot and a true veteran of big box retailing-, will come up from Atlanta to share his depth of experience. From South America comes Guillermo Aguero, the head of Sodimac, the company that held its ground when Home Depot came to town — then had to leave! Day one of the Conference Series, our Retail Strategies Symposium, will feature a more educational bent, with an update on the size of the market, who the industry leaders are, who's gaining market share and who's losing. Peter Norman, of Clayton Research, is back by popular demand to make sense of the housing market, and how housing forecasts will have an impact on home improvement retailing. Add in an incredible morning session by Donald Cooper (more about this next week!—Michael), insights from our favorite retail guru, Anthony Stokan, plus the incredible Outstanding Retailer Awards put on by Hardware Merchandising, and our amazing Gala Reception and Dinner, and you're guaranteed two days of money making tips, profitable insights, and executive-level networking. For more info, click here or call us at: 416-489-3396.
LAS VEGAS — Hate being stuck with vendor take backs, or facing dead stock on your retail shelf? eBay wants to help. The online auction service has been pursuing the business-to-business sector more intensely over the past two years, offering a means of unloading unwanted, outdated or undesirable merchandise. In fact, 70% of what's sold through the online service is practical in nature, far exceeding the collectible side that eBay built its reputation on.Hardlines ran into eBay at the National Hardware Show, held in May, where eBay came to spread the message — whether you're a retailer or a vendor. "We're here to explain to independents — and anyone in the supply chain — that eBay is an opportunity to unload unwanted inventory," said Dan Serpico of eBay. The eBay team held a series of seminars — and their message was aimed at everyone from reps, dealers and distributors to "mom and pop operators who have excess inventory sitting on their shelves," Serpico said. He added that using eBay offers sellers instant access to an existing community of more than 40 million active buyers, who bought $24 billion in goods. "It's a great opportunity to for a new and higher margin cost-recovery channel." Many manufacturers have issues with buybacks, said Serpico, and that's why eBay is so convenient. "It's a great way to reach more buyers, because we have those buyers already."
Tired of trying to figure out which group is affiliated with which? Can't tell the difference between TIM-BR Mart and Tim-BR-Marts? Want to know how Groupe BMR can belong to Mutual and to Matreco, but fellow Matreco members aren't part of Mutual? Which buying group does Home Hardware belong to? Does AWARD belong to Matreco, or BMR, or both?Confused? Don't despair! All this and more is revealed in this year's BUYING GROUP ORG CHART, included in the latest issue of Hardlines Quarterly Report. Plus: a complete report on the country's buying groups — strategies, expansion plans and more. Click here to order your copy!
AUSTIN, Tex. — Home Depot is considering moving its data center, which it currently operates in Georgia, to this Texas capitol. The Austin Business Journal, relying on unnamed sources, reports that local and state government officials are putting together an incentive package in an effort to convince Home Depot that Austin is a better place to run the center, described as the "brain" for the retailer's electronic operations, linking its 1,740-plus stores, including six within a 20-mile radius of Austin. Home Depot reportedly will either expand its current center in Georgia or relocate it to Austin. A new center would reportedly include $250 million in equipment and employ 500 people. The retailer's board is scheduled to meet next month to decide. CHARLOTTE, N.C. — Worries about a slowdown in the U.S. housing market could have a serious impact on the performance — and share price — of Home Depot and Lowe's. Executives of Lowe's Cos. had to deflect investor concerns that rising interest rates will hurt the company's fortunes. During a Credit Suisse First Boston Corp. investor conference last week, Robert Hull, CFO, and Larry Stone, senior vice-president of operations at Lowe's, tried to reassure the audience that the industry will benefit from an aging populace that will rely more and more on Lowe's for help on remodeling projects. In addition, the growing Hispanic population in the U.S. is proving a fertile market, Hull and Stone said. ST-ANTONIN, Que. — Matériaux à Bas Prix ltée has signed its newest authorized dealer, Chic Metal Profil, a retailer in Saguenay. This ground-up dealer, open just over a month, is the first for Matériaux à Bas Prix ltée in the Saguenay region. CHARLOTTE, N.C. — Towson, Md.-based Black & Decker is preparing to expand its distribution facilities here with the construction of a 350,000-sq.ft., multi-million-dollar hub in ProLogis Park West Pointe, a business park in the west end of the city. B&D acquired Baldwin and Weiser back in October, 2003 from Masco Corp., and the added lines account for the need for the new facility. Completion is expected by the fourth quarter. AMSTERDAM — Dutch retailer Ahold, the world's third biggest stores group, continues to battle red ink, as sales fell 11% to 15.4 billion euros in the first quarter, due to the strong euro and divestments, including selling its supermarkets in Brazil and Asia. Not counting these factors, the stores group's sales grew roughly 1.3%. The company suffered a net loss of 405 million euros ($486.4 million), versus a profit of 84 million euros a year earlier. Ahold is still recovering from an audit scandal last year, when the group found a $1.46 billion hole in the accounts of its U.S. subsidiary, Foodservice. TERRACE, B.C. — Workers at the Wal-Mart here are trying to get union representation, a move that could have dramatic impact on the Wal-Mart chain. The majority of staff have signed membership cards and applied to the Labour Relations Board of British Columbia for union representation with the United Food and Commercial Workers Canada.
Lee Pell has joined TruServ Corp. as divisional vice-president of merchandising for a range of hardlines. He will be responsible for creating and implementing strategies for a range of hardlines, including auto, hand and power tools, toys, garden, outdoor power equipment and outdoor living. He was formerly president of the consulting group Rep-Tech ... Laura McInnes has joined TruServ Corp. as divisional vice-president of inventory management. A veteran with 18 years of retail experience, she was formerly at Radio Shack.Ace Hardware Corp. has promoted Ann Marie Boberg to the position of corporate communications manager. She was formerly a communications supervisor. In her new role, she will oversee all internal electronic and print communications for Ace to its retailers, staff and vendors. Prior to joining Ace, Boberg worked at Wickes Lumber ... Natalie Danaher has likewise been promoted at Ace. She assumes the role of public relations supervisor, directing the day-to-day PR and media relations function for the company. She was formerly a senior public relations specialist for Ace. Grainger, the North American distributor of facilities maintenance supplies, has named James A. Garman to the role of senior vice-president of human resources. In this position, Garman will be responsible for Grainger's human resource policies, including benefits, compensation, organization effectiveness and staffing. Garman also will lead the company's efforts to maintain effective employee relations across the entire company, which includes nearly 600 worldwide branches, 17 distribution centers and 15,000 employees.
Retail sales in the U.S. were up 1.2% in May to $335.8 billion seasonally adjusted, thanks in large part to brisk auto sales. According to the Commerce Department, sales not including auto were up 0.7%, while sales excluding autos and gasoline were up 0.3%. Sales of autos and auto parts alone were up 2.7%.Inflation was up last month as the U.S. consumer price index rose 0.6% in May. According to the Labor Department, the economy is bracing for a rise in interest rates at the end of the month. However, the "core" CPI, which excludes food and energy costs, was up only 0.2%. For the first five months of the year, the core CPI is up 2.9%, marking a definite inflationary trend. Housing starts fell 0.7% in May, as homebuilders began construction on 1.967 million units a seasonally adjusted annual rate, from 1.98 million the previous month. It was the fourth decline in starts in the last five months, although the level of single-family starts, at 1.640 million, was the highest level since December. Building permits, an indicator of confidence in future sales, jumped in May to a seasonally adjusted annual rate of 2.077 million units, from a 2.006 million pace in April. Single-family permits rose to a 1.590 million pace, the highest on record.
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.

****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. 
**********************************************************************************   SERVICES OFFERED WHETHER OR NOT IT GETS PAINFUL IS UP TO YOU. Sterling CommerceUCCnet services compliance is being strongly encouraged by retailers from Wal-Mart® to The Home Depot® because it makes supply chains more efficient. But implementation can be challenging. Sterling Commerce will guide you through every step. To find out more, click here for a free copy of, "Data Synchronization: From Compliance to Collaboration." ********************************************************************************** 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 Dave Leslie at 905-702-9443, to find out how Noral can boost your sales in Canada.


Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2004 by Michael McLarney. HARDLINES™ the electronic newsletter Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: Beverly Allen, Director of Sales & Marketing: Nancy Wright, Circulation Manager: Phyllis Nowell, Sales Manager: ______________________________________________ THE HARDLINES "FAIR PLAY" POLICY: Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week - but let us handle your internal routing from this end! ______________________________________________ Subscription: $229 (Canadian subscribers add $16.03 GST = $245.03 per year/ GST #13987 0398 RT). Secondary subscriptions at the same office are only $36 (Canadian subscribers add $2.52 GST = $38.52). Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to Hardlines/McLarneyCom.