RONA CEO explains strategy vs. Lowe's

TORONTO–The investment community supports RONA's strategy for growth, says RONA CEO Robert Dutton. That strategy includes building and buying new stores–but does not involve selling to Lowe's. Speculation (something Hardlines doesn't deal in-your conscientious Editor) has run rampant that RONA may decide to offload its big box stores to Lowe's to boost its share price, or at least sell the Ontario sites. Those stores, especially six former Building Box stores in Ontario acquired when RONA bought Réno-Dépôt, have only gradually increased their sales year-over-year. Nonetheless, Dutton is emphatic about not selling. "It's not true that the success of this company relies on its sale to Lowe's," he stated firmly in a recent interview. Asked to comment on the performance of his Ontario big box stores, he replied, "I am satisfied with the performance of our big boxes in Ontario." Dutton also stated emphatically that he is not in talks with Lowe's, though HARDLINES did hear that Dutton got a call from an exec at Lowe's Canada. According to Dutton's recounting to his managers, the individual from Lowe's announced they were RONA's new neighbour. "But," Dutton told his team, "neighbours don't have to be friends." Dutton is confident that there's room for a strong number-three player in North America and has already announced plans to pursue mid-sized dealers in the U.S. Northeast beginning in 2007. Smaller independents or chains with sales under $200 million will be the prime targets. That means, for example, he has not talked with John Menard, owner of Menards, the number-three home improvement chain in the U.S. –and, with estimated sales in excess of US$7 billion, the current number-three player in North America. "When we go to the U.S., we want to be prudent," he said. But overall, Dutton is very optimistic. "For the next 10 years, North America is going to be a good playground."

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Allroc grows U.S. presence quietly

CALGARY–Considerable debate–and scepticism–typically surrounds any announcement by a Canadian company of its intention to enter the U.S. market. Somehow, the successes of a Couche-Tard as recently as this month cannot erase the memory of a Canadian Tire fully two decades ago (see lead story this issue–Editor). Yet, Allroc Building Products, the privately owned buying group affiliated with Winroc and owned by Superior Plus, has had a healthy, if modest, presence south of the border for years. Although it serves just under 50 outlets, mainly commercial gypsum dealers, Allroc supplies eight Winroc stores of its own (both companies are owned by Superior) in the U.S., mainly in the American South and Midwest. Expansion there has been slow and steady; after years with just seven stores, the eighth was added only last year. But with the booming American housing market, further expansion is always a consideration. In fact, same-store sales in Allroc's U.S. stores are higher than in its domestic locations, even though supplies of gypsum board are even tighter there than they are in Canada," says Bob Hancock, vice-president of Allroc. "Our U.S. operations continue to do very well," he adds, "and we continue to have our eyes open to acquisition opportunities. But it's difficult because the industry there is so robust that people are less likely to sell when they're making money." Another option is to build satellite operations in existing markets. Phoenix and Salt Lake City are two examples of likely targets, says Hancock.

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Canadian Tire launches energy saving website

TORONTO–A new website, devoted exclusively to energy saving and energy efficient products for the home, has been launched by Canadian Tire Corp. The site, www.canadiantirepower.ca, offers products in four categories–solar panels, wind generators, inverters, and batteries. Another section of the site offers guidelines for homeowners to develop their own energy generating systems in both off-grid and on-grid configurations. According to the Toronto Star, Canadian Tire has a lot of stores in rural Canada, which are selling more and more renewable-energy products for homes that are not connected to local or regional energy grids.

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Lowe's, Do-it Best donate to schools, homebuilding

MOORESVILLE, N.C. & FT. WAYNE, Ind.–Lowe's Cos. and Do-it Best Corp. both flexed their philanthropic muscle recently with charitable contributions that are earmarked to assist schools and affordable housing. Lowe's Charitable and Educational Foundation has awarded $3.6 million in "Toolbox in Education" grants to 680 schools around the country. That donation includes $500,000 for school improvements in urban schools or school districts. These latest grants are on top of the $1.3 million in educational grants to 300 schools that Lowe's made in February. Toolbox for Education is a nationwide program created by Lowe's in 2005 in partnership with PTO Today, a leading parent-teacher assistance organization. At Do-it Best, the dealer-owned buying group, 116 vendors contributed more than $186,000 in products at the co-op's recent dealer market, which will go to 11 affiliates of Habitat for Humanity International, the Georgia-based affordable housing builder. The donated products will be sold through Habitat's "ReStores", which specialize in reusable hardlines and building materials. Penske Truck Rental is also providing free truck rentals for all 11 affiliates, allowing them to transport the products at no cost. Ten of the affiliates are located in Indiana, and for the first time, Habitat of Greater Cleveland is receiving contributions through this effort.

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