HARDLINES Canada’s electronic information service for the home improvement industry June 11, 2001 Volume vii, #24 Michael McLarney, Editor & Publisher Phone: 416.489.3396 Fax: 416.489.6154 email: mike@hardlines.ca hardlines.ca <https://hardlines.ca/>

* * * * * * IN THIS ISSUE:

* Ace to try out "virtual" fall dealer show * CHS changes times to accommodate enhanced education program * Home Hardware focuses on upscale, female customer * Home Depot launches 1200th store

* * * * * * Ace Hardware Canada’s complete buying teams under its two group merchandise managers, Bernie Snider and Dan McMurdy, as well as its merchandising services group, have been named. Click here for full details: https://hardlines.ca/html/featured_event.html CORRECTION: Halifax-based Lumbermart is opening a 20,000-sq.ft. store in Dartmouth next week, but it will be a Do-it center, not Ace. The Halifax store has the Pro banner. * * * * * * NOW IN ITS 2nd PRINTING! (go to https://hardlines.ca/html/industry_report.html) "HARDLINES INDUSTRY REPORT: Home Improvement Retailing in Canada" is a comprehensive overview of the size of the market, how many stores are out there, who the key players are, their market position, the size and growth of the big boxes, the trends in housing and renovations, market trends — and much, much more! 120-plus pages filled with charts, graphs and photos. Regular price: $945, only $750 for subscribers! Contact Nancy Wright at nancy@hardlines.ca; phone: 416-489-3396 for more information.

* * * * * * BIG NAMES, NETWORKING, AT NEXT HARDLINES MARKETING CONFERENCE: Join Canadian Tire, RONA, Ace Hardware, American Tool, Turkstra Lumber and more. Where? The Sixth Annual Hardlines Marketing Conference — September 13, 2001 at the Four Points Sheraton! I am confident this conference will turn out to be the single best day of education, insights and networking you’ll have all year. Period. Only $389.00 per person — includes continental breakfast, lunch, cocktails, prizes and more! Contact bev@hardlines.ca for more info, or call me direct: 416-489-3396. — Michael (Some sponsorships still available for the event — call me for details.) (go to https://hardlines.ca/html/conferences.html)

To get our special hotel rate for the Hardlines Marketing Conference at the Four Points Sheraton, call 1-800-737-3211. ______________________________________________

ARE YOU UP ON OUR DAILY NEWS? Our website has daily updates on retail and industry news that matter to you. Keep informed. Visit hardlines.ca <https://hardlines.ca/> every day.

* * * * * * HOME HARDWARE KEEPS EYE ON ITS CORE CUSTOMER

Armed with a profile of its typical customer, the result of recent surveys, Home Hardware is sharpening its focus on its customers. Some of the aspects of that focus comprised a presentation by Paul Straus, vice-president and CEO of Home Hardware, to vendor members of the Canadian Hardware and Housewares Manufacturers Association last week.

The typical Home Hardware customer is 30-plus, lives in a smaller community with their family, does their own home improvements and repairs, and spends more than five times the national average to do so. And almost 50% of those customers are women. That revelation resulted in the change of the company’s slogan from "Home of the handyman" to "Help is close to home."

Home is also increasing its warehouse space to accommodate more SKUs —and the addition of more than 100 former Beaver Lumber stores. Expansion is currently under way at two of its three distribution centres: 96,000 sq.ft. is being added to the St. Jacobs, ON facility to house more than 60,000 products. Another 100,000 sq.ft. is being added, as well, to the 460,000-sq.ft. Wetaskiwin, AB site. In combination with the Debert, NS facility, Home will have a total of 2 million sq.ft of warehousing by this Fall. ______________________________________________

CANADIAN SHOW ADJUSTS TIMES, BOLSTERS SEMINARS

The Canadian Hardware & Building Materials Show has adjusted its hours and program for its next edition, which runs February 3rd through 5th, 2002 at The National Trade Centre in Toronto.

An hour has been shaved from both the top and bottom of each day of the show: hours are Sunday and Monday: 10:00 a.m. to 5:00 p.m.; Tuesday: 10:00 a.m. to 4:00 p.m. The late start has been incorporated to accommodate complimentary onsite educational programs that will run each morning from 8:00 a.m. to 10:00 a.m. (Maybe we can start the Hardlines Breakfast a little later too. I’ll keep you posted! — Michael) The early end to the day will allow more time for attendance at industry social events, especially the CHHMA fund-raising Gala on Sunday and Monday evenings.

Produced by the Canadian Retail Hardware Association in partnership with the Lumber and Building Materials Association of Ontario and the Paint & Decorating Retailers Association, CHS attracts some 18,000 industry registrants from Canada, the U.S. and abroad. ______________________________________________

ACE WILL VENTURE ONLINE WITH VIRTUAL DEALER SHOW

Ace Hardware Canada will hold a "virtual" show this Fall in place of its regular show. The online presentation of products and services will be made via a new Ace Canada website, scheduled to be up and running by July.

The decision to go virtual, says Dunc Wilson, Ace Canada’s vice-president merchandising and marketing, is admittedly a risky one. "But we’ve spoken to our dealers and to our vendors, and they say it’s the right thing to do."

Another pitfall of the virtual show is the message it may send to an industry already wary of Ace’s commitment to Canada. Wilson says emphatically that the move is in no way meant to suggest that Ace has any plans to exit the market. In fact, the company has just completed realignment of its buying teams (see "People on the move").

Wilson adds that all Canadian Ace dealers have access to Ace’s two shows in the U.S.

In an industry already riddled with shows, any move to reduce that commitment, from both the vendor and dealer side, should be a welcome one. D.H. Howden pulled its Spring show seven years ago, moving it in with the Canadian Hardware Show in an effort to reduce the burden on its vendors and to send a signal to the industry that more consolidation would be welcome. However, no other retailer followed suit. Unsatisfied with the outcome of the move, Howden re-instated the show this year. ______________________________________________

COMPANIES IN THE NEWS

Domtar Inc. will acquire four American paper mills from Georgia-Pacific Co. for US$1.65 billion. More than half of Domtar’s output will now come from the U.S., while only one-tenth of its sales will come from lumber. The assets involved are Georgia-Pacific’s stand-alone uncoated fine paper mills at Ashdown, Ark.; Nekoosa and Port Edwards, Wis.; and Woodland, Maine, as well as associated pulp facilities. This sale is the largest divestiture of assets in Georgia-Pacific’s history; its proceeds will be used to repay debt. The sale is expected to be completed early in the third quarter 2001.

Lumbermart in Halifax is opening its second store on June 18, this one in Burnside Park in Dartmouth. The AWARD dealer will fly both the Tim-BR Mart and Ace banners over the new 20,000-sq.ft. store (the original store is 12,000 sq.ft.). Lumbermart does a considerable business in closeouts and discontinued merchandise, which, says president Fred O’Hearn, helps compete against the big boxes in the Halifax market.

Nu-Gro Co. will purchase 70% interest in EroGreen Seeds Inc., in a transaction expected to close during the fiscal fourth quarter. Paul Gross, who founded EroGreen Seeds in October 2000, will retail a 30% interest in the company and continue as the general manager for the business.

Home Depot Inc. celebrated the opening of its 1200th store with the simultaneous opening of three locations in Arkansas, New Mexico, and New York. As part of its plan to open 200 new stores this year, the retailer is rolling out a new location every 43 hours. There are currently 83 stores outside of the U.S.; expansion plans include Canada, Puerto Rico, Chile and Argentina.

Appliance maker Maytag Corp. continues its effort to focus on its core business with the announced takeover of Amana Appliances. The deal will be worth US$325 million — 95% in cash and the remainder in Maytag stock — and is expected to close in the third quarter. _____________________________________________

CANADIAN STOCK WATCH

COMPANY	52-WK HIGH	52-WK LOW	CLOSE (FRI)
Canadian Tire	25.20	15.05	23.70
Canfor	16.95	7.65	11.20
Goodfellow	11.00	8.00	9.00
Home Depot	49.74	47.61	50.80
Hudson's Bay	17.65	12.40	16.45
Lowe's	64.90	34.25	73.57
Sears Canada	37.25	18.55	22.35
Taiga Forest	10.00	6.80	8.00
West Fraser	36.50	21.00	33.50

______________________________________________

"Leadership, like swimming, cannot be learned by reading about it." — Henry Mintzberg (Canadian educator) _______________________________________________

MARKET INDICATORS

Building permits were up 4.8% from March to April, reports Stats Canada. However, residential intentions sagged 4.8%, to their lowest level in 12 months. Permits slowed for both the single- and multi-family construction. For the four months from January to April, municipalities issued $13.5 billion in building permits, up 14.0% from the same period of 2000. It was also the highest level for the first four months of any year since 1990, the result of advances in both the residential and non-residential sectors.

Sales by the group of large retailers totalled $6.2 billion in March, an 8% increase over March 2000, and $5.1 billion in February, a 4.2% increase over the same month last year. All major commodity groups recorded year-over-year increases except hardware and lawn and garden products. Health and personal care products and home furnishings and electronics posted the largest gains in March for the group. ______________________________________________

PEOPLE ON THE MOVE

A number of appointments have been made at Ace Hardware Canada: John Penner has been appointed national franchise development manager in addition to his role as Western sales manager. He will oversee development of the Ace franchise business across Canada. Stanley Neumann, John Dawson and Lawrence Anderson will report directly to John in their roles as retail sales consultants … Mark Mossman has been appointed Eastern sales manager, in addition to his role in the Ontario market. Retail sales consultants Warren Smith, Ed Barrett, Steve Dorcas and a rep yet to be named for Nova Scotia will report directly to Mossman … Leon Penchuk has been named design and retail development manager. He will continue as store designer and will also manage Ace’s store merchandisers and the bin taggers … Anne Root has been promoted to sales support consultant, which will include many of the responsibilities of retail services supervisor. (905-475-1188)

Also announced: Ace Hardware Canada’s complete buying teams under its two group merchandise managers, Bernie Snider and Dan McMurdy, as well as its merchandising services group, have been named. Click here for full details: https://hardlines.ca/html/featured_event.html (or order the latest issue of the Hardlines Who’s Who, available in a couple of weeks! — MM)

Larry Shanks has been named president of Chouinard Brothers Ltd., a roofing contracting company based in Markham, ON. Shanks was formerly national accounts manager at Westroc and vice-president and general manager of GAF. The move takes effect June 25, 2001. (416-752-7300)

Home Depot Inc. has announced that Mark Baker, executive vice-president, merchandising, will leave the company by the end of Summer to pursue other business. Baker assumed his current position as chief merchandising officer in October 2000. In March 2000, he was named executive vice president and chief operating officer for Home Depot's U.S. stores. A successor has not been named. ______________________________________________

NOTED ...

Retailers like Home Depot and Lowe’s will benefit from rising lumber prices as last year’s glut thins out and U.S. suppliers crank up production again. Steep increases in April and May resulted in prices more than 60% higher than last year, says a report from the industry newsletter, Random Lengths. ______________________________________________

OVERHEARD ...

"Everybody is waiting to see which retailer will be next to drop — and which ones will survive." — Paul Straus, vice-president and CEO of Home Hardware, to vendor members of the Canadian Hardware and Housewares Manufacturers Association last week. He said he was glad Revy got purchased by a company that has such close ties to Home Hardware (both are members of the same buying alliance). ______________________________________________

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THE HARDLINES MARKETPLACE: just $16 per line. A classified ad with Hardlines is the most direct way to industry eyes. Over 3,000 executives in the industry come in contact with our email and fax publications … and have you seen our Marketplace in our new website? https://hardlines.ca/html/classifieds_new.asp Publish your ad where it matters. Get industry exposure today. Contact Eugenia Canas at 416-489-3396 or email: buzz@hardlines.ca ______________________________________________

Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2001 by Michael McLarney. HARDLINES™ the electronic newsletter hardlines.ca Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: mike@hardlines.ca Eugenia Canas, Assistant Editor: buzz@hardlines.ca Beverly Allen, Marketing Manager: bev@hardlines.ca Nancy Wright, Circulation Manager: nancy@hardlines.ca ______________________________________________

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