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June 28, 2010, Volume xvi, #26
“To stumble twice against the same stone is a proverbial disgrace.”
—Cicero (Roman philosopher, statesman and orator, 106 B.C.-43 B.C)
Solid signs of improvement for industry in 2010
SPECIAL REPORT — The retail home improvement industry has been gradually regaining steam since the middle of last year, with a significant increase in performance in the first quarter of 2010, according to our First Quarter Business Conditions Survey. Business was better in the first quarter, compared to the same quarter a year earlier, as reported by both retailers (65.4%) and vendors (70.0%).
That compares to only 42.0% of the industry reporting a year-over-year improvement in the last quarter of 2009. Those reporting that business was down in the latest quarter compared with the same period a year earlier were correspondingly down.
Only 19.2% of retailers reported that business was worse than 1Q 2009, and vendors were even more upbeat, with only 13.0% reporting business was worse. By comparison, more than twice as many respondents were still down in the previous quarter, as industry-wide 40.0% said business in 4Q 2009 was worse than a year earlier.
That vendors were more positive about their business conditions in the last quarter reflects how hard-hit they were during the same time last year, when they felt the brunt of retailer caution as those customers slashed inventories in the face of falling consumer confidence.
Looking ahead, both vendors and retailers are optimistic about the next two quarters, although retailers were more cautious in their expectations. While 84.0% of vendors said they expect their sales to increase over the next six months, slightly fewer, or 76.4%, of retailers had the same expectation.
Looking further out, vendors’ forecasts become even more upbeat, while retailers’ longer-term expectations become correspondingly dimmer. When asked if sales are expected to increase over the next 12 months, 89.0% of vendors replied in the affirmative, while retailer response dropped to just 71.7%.
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Superior Plus buys Western insulation dealer
CALGARY — Superior Plus Corp. has entered into a definitive agreement to acquire certain assets of Burnaby Insulation Supplies, a commercial-industrial insulation dealer based in Burnaby, B.C. The deal, worth approximately $18 million, is being paid with $16 million in common shares of Superior and $2 million in cash. The deal, subject to normal adjustments, is expected to close June 30.
Consisting of three operating branches (besides Burnaby, the dealer has outlets in Edmonton and Calgary), the latest acquisition by the parent of Winroc will facilitate expansion of the company’s commercial and industrial distribution business in Canada.
“We are very pleased to enter into this transaction to expand our construction products distribution business as part of Superior's growth strategy,” says Grant Billing, Chairman and CEO of Superior. “The acquisition of a Western Canadian commercial and industrial insulation distribution business is a strategic fit and complementary with Superior’s construction products distribution operations in the U.S.”
In September 2009, Superior Plus purchased Specialty Products & Insulation Co., which has 70 locations in 28 states in the U.S. The purchase price was $138 million.
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Sexton’s Bob Mondy gets recognized for long-time service
WINNIPEG — Bob Mondy, former Vice-President and General Manager of the Sexton Group, was honoured last week at a retirement party at Mondy’s favourite golf club.
The fête was actually several months overdue, held up by Mondy’s own health issues. Nevertheless, he was in good form when industry representatives from across the country gathered to recognize his decades of service to the industry.
Mondy began as General Manager of Sexton at its inception in May, 1985. Prior to that, he had served as General Manager at Allroc. But, says Sexton Group President Brian Kusisto, “if you asked Bob, he would attribute his training to the ‘university of Beaver Lumber.’ “
Sexton started out with three Kenroc locations, but membership in the LBM buying group grew steadily under Mondy’s leadership. “He really took it from its inception to the size it is now,” says Kusisto. “In fact, if you asked a number of dealers why they became Sexton members, they would say, ‘Bob Mondy.’ Their trust in him and his integrity were instrumental in growing membership.
Today, the Sexton Group has 285 members representing about $1.3 billion in sales at retail.
Steve Buckle took over as Vice-President of Sexton in 2008, and Mondy stayed on working on key initiatives for the last two years. (Bob’s integrity and openness were always shared with HARDLINES. We thank him for his years of support and friendship.—Michael)
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RONA beefs up Atlantic presence with Piercey’s deal
BOUCHERVILLE , Que. — RONA inc. has closed its acquisition of Piercey’s, the building centre chain based in Dartmouth, N.S. That company’s financial statements will be consolidated within RONA’s financials starting June 21.
Piercey’s operates five building centres ranging in size from 17,000-69,000 square feet throughout the greater Halifax market. RONA also has a big-box store of its own in Halifax, which opened in April 2008.
RONA’s expansion in Atlantic Canada has not been as aggresive on the dealer recruitment front as in other parts of Canada, but it has made some significant acquisitions there besides the Piercey’s deal. It bought Chester Dawe, with eight stores, in 2006 in St. John’s, and acquired Bishop’s Building Center in Bay Roberts, Nfld., two years later. It has also opened corporate stores of its own.
RONA now has 31 stores in the Atlantic Provinces: 12 in Nova Scotia, 10 in Newfoundland and Labrador, and nine in New Brunswick, representing a total of 575,000 square feet of retail space.
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Survey reveals location is tops for consumers
EDMONTON — Location, location, location. The mantra rings truer than ever, based on the latest research by HARDLINES, in association with the University of Alberta’s Faculty of Retail Studies.
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Factor
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% Frequency
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Location
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33.7%
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Selection
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18.4%
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Prices
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14.3%
|
|
Service
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8.2%
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|
Variety
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6.1%
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|
Layout
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8.2%
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Loyalty
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4.1%
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Stock
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2.0%
|
|
No reason
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4.0%
|
|
Air Miles
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1.0%
|
|
Total
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100.0%
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In exit surveys of home improvement shoppers in Edmonton, respondents were asked to indicate which factors were most important to them when shopping at home improvement stores. Unprompted, location was the major factor in determining their preferred shopping location, cited by more than one-third of respondents. Store selection (18.4%) and prices (14.3%) were also important factors in the decision process.
To further examine variables consumers consider when picking a retail home improvement store to shop at, the survey asked respondents to rank specific variables from 1 to 5, 1 showing the greatest importance, and 5 the least. (Respondents were able to rank more than one variable with the same rank if they saw them equal in importance.)
Once again, the factors that were rated with the greatest importance were location – rated number one by 48% of respondents, followed by prices (42%) and variety/selection (38%).
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RONA tweaks Noble name for ICI division
CONCORD , Ont. — The major part of RONA’s industrial-commercial-institutional business is Noble Trade, which it acquired in 2007. In fact, Noble Trade hence became the name for RONA’s entire commercial and professional plumbing specialties segment, which now counts 26 points of sale and distribution facilities in Quebec and Ontario.
 Effective last week, however, that brand has been modified and the division is known simply as Noble, complete with a new logo. This new identity can be seen on Noble’s updated website.
RONA next acquired Best-MAR, a plumbing specialities company with three points of sale in the Ottawa area. In 2009, Noble Trade’s main distribution centre underwent a 188,000-square-foot expansion to allow it bring in more lines of heating, ventilation and air-conditioning appliances, and related products.
In March 2010, Noble entered the Quebec market with the acquisition of Plomberie Payette & Perreault.
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Classifieds
Category Product Manager - Toronto
This well-established, successful Toronto-based Canadian company is thriving and looking to grow their retail hardware category share. This new position reports to the National Marketing Manager and involves leading the category strategy efforts, defining and launching new products and securing new product designs. You’ll also be involved in sourcing (including offshore), pricing and competitive analysis, all of which are important parts of this role.
Ideally you’ve developed and promoted multi-sku consumer products and can demonstrate five years' plus business intelligence in both your creative and analytic abilities in new sku or line development. Familiarity with key customers such as Home Depot, Canadian Tire and Rona would be beneficial. Your experience may be on the vendor or retail side. Post-education in marketing or business is strongly preferred.
Please respond to Wolf Gugler quoting PM-Toronto. You may also apply online on the” Opportunities” page at www.wolfgugler.com. Phone: 888-848-3006. SKYPE: hdhntr53
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