June 15, 2015 Volume xxi, #24

“You miss 100% of the shots you never take.” —Wayne Gretzky, aka “The Great One,” Canadian professional hockey player, (1961- )

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Lowe’s Canada president expects LBM focus to drive growth

TORONTO — “We’re really focusing on home improvement.” That assertion by Lowe’s Canada President Sylvain Prud’homme underlies the changes being made in some of its stores. Areas of focus for pros include lighting and flooring while reducing emphasis on other areas. “We’ve really reduced areas like cleaning [products],” Prud’homme points out. “We’ll leave that to the other guys. Our focus is on the home improvement.”

His comment makes reference to the likes of Canadian Tire, with a store in sight across the parking lot from the Kipling and Queensway store we were talking in. In addition, RONA is toying with the idea of offering a wider selection of consumables in its stores, as indicated by CEO Robert Sawyer last month (see our May 25 issue for that story. —Editor).

The shift in focus makes sense, given the growing importance of contractors to Lowe’s Canada. The company enjoyed its eighth straight quarter of positive same-store sales in Q1. However, Prud’homme stresses that Lowe’s will continue on a twin path, wooing both pros and DIYers. “We also successfully improved our assortment and differentiation in both outdoor fashion and nursery and live goods this year.

“As you can see, our approach is well balanced between the two important customer segments we serve: pro and retail.”

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Report analyzes growth of big boxes, buying groups

HARDLINES EXCLUSIVE — Amidst slow growth, depressed oil prices, and newly revised forecasts from CMHC that anticipate weaker-than-ever housing markets ahead, the home improvement industry is enduring major changes.

A new study by HARDLINES outlines the changes, and analyzes the strengths and weaknesses of the industry’s top retail players.

The 2015 Hardlines Retail Report tracks the renewed growth of Home Depot, Lowe’s, and RONA on the big box front. It examines why Lowe’s is gaining momentum with customers in Canada and how Home Depot is focusing on online sales for growth.

The buying groups offer another source of continued growth. The Report looks at where that growth is coming from, including the addition of members, even as the groups’ own dealers expand locally with new stores or acquisitions of their own. Many of those new members don’t fit easily into the definition of a traditional LBM dealer, as specialty stores, installers, and pre-fab home builders swell the ranks of this industry.

It also studies the huge shifts in the balance of retail power in Quebec, as La Coop fédérée has completed the takeover of Groupe BMR. This combined entity is now the number-two player in Canada’s second-largest home improvement market, while the number-one, RONA, repositions itself for the future.

The 2015 Hardlines Retail Report provides market share information and trends analysis to help you develop your marketing plan for 2016. It features more than 180 PowerPoint slides for easy access. It will be released at the Hardlines Retail Conditions Breakfast on June 24 at the Westin Bristol Place Hotel near the Toronto International Airport. Pre-order your copy of this indispensable Report and get breakfast for free! Click here to learn more about the Breakfast Event.

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Home Hardware CEO shares next steps

ST. JACOBS, Ont. — Terry Davis is very excited about the next generation at Home Hardware. As CEO of the dealer-owned co-op, he is watching not just the stores themselves, where a new demographic of young leaders is taking the helm of the family business. He’s also concerned with next steps at head office. That includes his role.

“Frankly, I’m not going to be a long-term CEO,” he says. He was put into the role with a distinct mandate and limited time frame. “I have a short time to accomplish a lot of things.”

Part of his role is extending the Home Hardware corporate culture deep into the DNA of each of the company’s 1,100 stores (see related story in our June 1 edition. —Editor) But he knows the company will want to continue a decades-long policy of hiring from within wherever possible. (Davis, just the third CEO since Home’s inception 51 years ago, got his first job working at Home Hardware 40 years ago.)

He says the next generation must understand the Home Hardware culture to ensure strong succession. And, he adds, “I think we’ve got strong bench strength here.” Dealers are onside with the company’s direction, he notes. “They are very positive. They like what they see. They like where we are going.”

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CanWel’s latest acquisition will take it into California

VANCOUVER — CanWel Building Materials Group Ltd. plans to expand into the California market with a letter of intent to a privately-owned building products distribution and treating company based there.

While the name of the company is being kept under wraps (until the deal closes later next month), the purchase price is not: approximately US$45 million, plus the assumption of debt to the tune of US$9 million. According to a release, the deal will give CanWel entry into the U.S. market.

The company under consideration has operated for more than 45 years and services California, Nevada, and Arizona from facilities in Northern and Southern California. These locations will be used by CanWel under long-term leases. Many of its customers and suppliers are common to CanWel.

“The acquisition will provide CanWel with an immediate presence in the robust California market and is a logical extension of our existing business, demonstrating continued execution of our growth strategy,” said Amar Doman, CanWel chairman and CEO.

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FROM THE ARCHIVES: This week in 1995
A couple of our favourite chains were in the headlines this week 20 years ago. Windsor Plywood took over a location in Whistler, B.C., which had been abandoned by Garibaldi Lumber when that dealer went out of business. And TSC Stores opened its 15th outlet, this one in Owen Sound, Ont. From Winnipeg, we reported on the latest efforts by Dominion Lumber to reposition itself before Home Depot opened its first store there. Click here to read these classic stories for yourself!

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