HARDLINES™ Five years serving Canada's home improvement industry June 12, 2000 - Volume vi, #23 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * IN THIS ISSUE: * Not your average wholesaler: Can-Save keeps growing * Marchands Unis goes online today * Canadian Tire keeps step with industry trends with new code of ethics * Tim-BR-Marts gets a new merchandising director * Smart homes on the increase * * * * * * What's new from Hardlines … UNDERSTANDING THE CANADIAN MARKET: Seminar and reception for foreign consulates, international trade offices, commercial services and potential importers: June 28, 2000, in Toronto. Presented in partnership with the Canadian Hardware and Building Materials Show. If you're one of the above and didn't get an invite, call us! HARDLINES WHO'S WHO: Directory of Canadian Hardware & Home Improvement Retailers, Wholesalers, Buying Groups and Mass Merchants. This has become an industry standard. With more than 100 listings of the key companies in the country, including executives, buyers, sales and more. No salesperson should be without this little beauty in their briefcase. Third edition available in July. HARDLINES INDUSTRY REPORT: HOME IMPROVEMENT RETAILING IN CANADA. Back by popular demand! This incredible report is a soup-to-nuts on how the home improvement business works in Canada. It tells who the players are, what the trends are, how the industry is responding to the big boxes, etc. It also updates home improvement and renovation spending and figures out just how big this business is! FIFTH ANNUAL HARDLINES MARKETING CONFERENCE: September 14, 2000. An incredible one-day symposium featuring some of North America's leaders in retail! Expect about 200 retail and vendor executives to attend! * * * * * * CAN-SAVE BUCKS TREND WITH EXPANSION In an era which finds the role of the wholesale distributor under greater scrutiny - and greater threat - Can-Save has flouted conventional wisdom with its latest expansion. The specialty LBM distributor moved into new 80,000-sq.ft. facilities last month, with an official ribbon cutting last Thursday. Owned by brothers Larry and Cully Koza, Can-Save grew into 20% larger premises that will accommodate up to 55% more inventory. But their success has not been shared by some other regional distributors. Thornes virtually exited the retail business in Atlantic Canada last spring to rely almost solely on its industrial sales. On the west coast, faced with a fewer dealer customers and shrinking sales, Smith-Barregar sold out to Sodisco-Howden Group just last month. For Can-Save, success has meant steering clear of commodity products. Instead, the company has grown by selling specialty building materials that require a more personalized selling touch. With policies like no minimum order (the average order is $500; two-thirds of them are under $1,000) and a regional focus on Ontario and the Maritimes, Can-Save's own fleet of trucks serves its market more like milkmen of old than a large-scale wholesaler. Yet the service is less expensive than direct ship, says Dan Clements, the company's marketing manager. Can-Save did not ship during the first week of May, during the move. But the remaining three weeks of the month realized sales of $2.6 million, 25% greater than the entire month of May last year. Total sales in 1999, according to the Hardlines Who's Who, reached $26 million. * * * * * * MARCHANDS UNIS LAUNCHES ONLINE ORDERING FOR DEALERS TODAY Marchands Unis is unveiling an electronic catalogue for its member dealers today. The online program, developed in partnership with Ergonet, allows for access by the Québec-based co-op buying group's 383 member retailers to more than 30,000 SKUs online, complete with colour photos and detailed descriptions of the products and real time updates of inventory. The e-catalogue will also attempt to create an online community, which will allow Marchands Unis and its members to send and receive messages in the form of newsgroups, surveys, corporate messages, etc. While the first step is business to business, the program is designed to evolve into one customers can use, too. Retail sales through all of the 50-year-old company's stores totalled $200 million in 1999. * * * * * * CTC PRESENTS CODE OF ETHICS TO BUYERS Canadian Tire staff at its Toronto head offices and distribution centre found themselves presented with a new code of ethics last week. The code, a standard practice among many large organizations, was the first update at CTC in recent years. It reinforces the need for respect and dignity in the workplace and refines policies on new issues such as Internet use, including sharing of information via e-mail and access to inappropriate web content, which the company can monitor. The code also outlines policies for speaking with the media, which nobody is supposed to do without going through channels, but hey, that's what makes this job so interesting. Canadian Tire's move is a timely and proactive one that may well help to mitigate the kinds of behaviour emerging in many U.S. workplaces. According to a new survey by KPMG, a startling number of U.S. employees are observing illegal and unethical activity at work. The study reveals that 76% of 3,075 working adults surveyed nationally have personally observed violations of law or company standards (such as misleading customers, employment discrimination, shipping substandard products, falsifying earnings and mishandling confidential information) in the past year. Employees from consumer markets companies reported the highest level of observed misconduct - 81% - pointing to the need for more sophisticated approaches to compliance management. Almost half of employees (44%) from consumer markets companies reported that the types of misconduct they observed could result in "significant loss of public trust" if discovered. The findings suggest that compliance messages are, in fact, getting out, but the messages are not being integrated with individual value systems - or just coming across as practical. For example, 80% of consumer markets employees have been provided with information to help them understand their company's code of conduct; but 78% just don't take the company's policies seriously. And some of the reasons for cheating might actually indicate a kind of "battle fatigue" among employees: 73% said they feel the need to cut corners to meet deadlines and 67% feel pressure to meet overly aggressive earnings goals. In fact, when asked for their input on how to improve the situation, only 26% of employees called for tighter auditing and controls. The lion's share of responses underscored the slavish pace maintained by so many consumer markets companies today: 54% of surveyed employees called for more time and resources to perform their jobs properly and 40% called for more realistic performance goals. * * * * * * CONSTRUCTION OF "SMART" HOMES GROWING IN POPULARITY "Wired" homes will continue to increase in popularity says a new study from Allied Business Intelligence. Interest in wiring the home for digital services is gaining momentum as homebuilders embrace the concept. The number of installations in the U.S. grew from 34,500 housing units in 1998 to 83,900 in 1999. Up to 195,700 additional new homes are projected to get some form of wired system built into it this year. Total revenues from installations more than doubled from US$67 million in 1998 to US$147 million in 1999. Revenues are anticipated to double again in 2000 and to reach just over US$2 billion by 2005. According to the study, most homes do not have the telecommunications infrastructure to meet emerging data and entertainment needs.
COMPANIES IN THE NEWS Effective June 1, Dauphin, MB-based McMunn & Yates has purchased G. K. Smith & Sons in Eriksdale, MB. The 3,000-sq.ft. yard was a Tim-BR-Mart member like McMunn & Yates, and has been in operation 85 years serving the Inter-Lake trading area. The purchase took place following the retirement of owner Ray Smith. Ray's nephew, Brian Smith, will continue on as manager of the store. Revy Home & Garden opened its fourth store in the Toronto area on Saturday, this one in Scarborough. The 150,000-sq.ft. outlet employs 250. Home Depot will open The Home Depot Floor Store in Plano, TX, on July 13. The 45,000-sq.ft. store will include 33,000 sq.ft. of selling space and a service installation area. The Floor Store will offer 15,000-plus products, including carpet, area rugs, ceramic tile, laminates, wood, vinyl and flooring installation products, as well as blinds and wallpaper. The store is one of several specialty concepts Home Depot is testing, including a lighting chain and a plumbing wholesale business, both which were acquired by Home Depot last year.
CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
Cameron Ashley 18.31 7.25 18 5/16
Canadian Tire 46.00 19.10 24.00
Canfor 19.25 4.25 13.70
Goodfellow 12.25 7.50 11.00
Home Depot 70.00 35.75 48 3/16
Hudsons Bay 23.85 12.70 17.90
Lowe's Cos. 67.25 40.75 433/8
Sears Canada 42.50 29.00 36.20
Taiga Forest 14.75 9.00 9.50
West Fraser 41.00 28.00 33.30
"I think air pollution will only be dealt with when it affects TV reception." - Barbara Gowdy (Canadian fiction writer, speaking at the recent TED-City Conference in Toronto)
PEOPLE ON THE MOVE David MacKenzie has left Tim-BR-Marts Ltd., where he served as vice-president of merchandising. Effective June 19, Randy Martin will join the company as director of merchandising. Martin was most recently a merchant for Home Depot Canada, working in its Vancouver office, then briefly in Toronto before deciding to move west again to join Tim-BR-Marts. (604-736-8501) Dave Anklith, a veteran Canadian Tire buyer, has left the company. His duties as housewares buyer have been filled by Mike Santos, who also oversees storage and organizing products. (416-480-3000) At Surrey, BC-based Irly Distributors, the following British Columbia dealers have been elected to the company's 2000-2001 board of directors: Ron Moss of Burg & Johnson Builders' Supply in Powell River is now president; Mark Perry of Kerrisdale Lumber Co. in Vancouver becomes vice-president; and Vern Bigelow of Greenridge Supply in Vernon has been elected secretary. Other board members are Andy Anderson of Ashcroft Building Centre in Ashcroft, Milt Grieves of Capital Building Supplies in Prince George, Rex Millard of Nechako Trading Co. in Vanderhoof, and Mark Sternberg of Coldstream Building Supplies in Vernon. Scott McKellar has been appointed vice-president of Henkel Canada Corp. and general manager, LePage Division of Henkel Canada. McKellar joined LePage in 1998 as director, supply chain. He was previously with Livingston Logistics and Loctite Canada Inc.  
OVERHEARD... "We sell more tires and batteries than Canadian Tire." - Paul Walters, chairman and CEO of Sears Canada. He was speaking at a recent CHHMA member breakfast, explaining how Sears is cutting into CTC's business. That's okay: a couple of weeks later Wayne Sales at CTC explained to me how his company is going after Sears's business with more upscale housewares and kitchenware.  
MARKET INDICATORS The new housing price index, the index of contractors' selling prices for new houses, was up 0.2% in April compared with March, according to Stats Canada. The largest monthly increase was in Halifax (+1.4%). Other increases occurred in Hamilton (+0.5%) and Montréal (+0.4%). Calgary was up slightly (+0.1%). The index was up 2.1% year-over-year from April 1999. Residential renovation continues to grow, according to a new report from Toronto-based Clayton Research Associates. The report anticipates 5% growth both this year and next, bringing total residential renovation spending (products and contractor fees) to $25 billion in 2000 and $26 billion in 2001. Strong sales of existing homes and overall aging of Canadian housing stock are combining with a growing trend among consumers to improve their homes, fuelled by an expanding economy. About two-thirds of the total value of residential renovations is contract work; the balance is DIY, says the report.  
THE WOMEN'S CONSUMER PRODUCTS NETWORK June 27: WCPN Golf Tournament (Sorry - sold out!). August 15: Breakfast meeting during the CGTA Show. Featuring the proven communication methods of Robin Kennedy, vice-president of Communicare. For more information about these events, please phone: (905) 212-3826; fax: (905) 274-7646; email:wcpn99@yahoo.com, or check out their website: www.wcpncanada.org  
Hardlines Classifieds Got new products? Looking for new staff or lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: bev@hardlinesfax.com © 2000 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST=$212.75) per year (GST #13987 0398 RT). Please make cheque payable to McLarneyCom.  
    HARDLINES™ Five years serving Canada's home improvement industry June 12, 2000 - Volume vi, #23 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * IN THIS ISSUE: * Not your average wholesaler: Can-Save keeps growing * Marchands Unis goes online today * Canadian Tire keeps step with industry trends with new code of ethics * Tim-BR-Marts gets a new merchandising director * Smart homes on the increase * * * * * * What's new from Hardlines … UNDERSTANDING THE CANADIAN MARKET: Seminar and reception for foreign consulates, international trade offices, commercial services and potential importers: June 28, 2000, in Toronto. Presented in partnership with the Canadian Hardware and Building Materials Show. If you're one of the above and didn't get an invite, call us! HARDLINES WHO'S WHO: Directory of Canadian Hardware & Home Improvement Retailers, Wholesalers, Buying Groups and Mass Merchants. This has become an industry standard. With more than 100 listings of the key companies in the country, including executives, buyers, sales and more. No salesperson should be without this little beauty in their briefcase. Third edition available in July. HARDLINES INDUSTRY REPORT: HOME IMPROVEMENT RETAILING IN CANADA. Back by popular demand! This incredible report is a soup-to-nuts on how the home improvement business works in Canada. It tells who the players are, what the trends are, how the industry is responding to the big boxes, etc. It also updates home improvement and renovation spending and figures out just how big this business is! FIFTH ANNUAL HARDLINES MARKETING CONFERENCE: September 14, 2000. An incredible one-day symposium featuring some of North America's leaders in retail! Expect about 200 retail and vendor executives to attend! * * * * * * CAN-SAVE BUCKS TREND WITH EXPANSION In an era which finds the role of the wholesale distributor under greater scrutiny - and greater threat - Can-Save has flouted conventional wisdom with its latest expansion. The specialty LBM distributor moved into new 80,000-sq.ft. facilities last month, with an official ribbon cutting last Thursday. Owned by brothers Larry and Cully Koza, Can-Save grew into 20% larger premises that will accommodate up to 55% more inventory. But their success has not been shared by some other regional distributors. Thornes virtually exited the retail business in Atlantic Canada last spring to rely almost solely on its industrial sales. On the west coast, faced with a fewer dealer customers and shrinking sales, Smith-Barregar sold out to Sodisco-Howden Group just last month. For Can-Save, success has meant steering clear of commodity products. Instead, the company has grown by selling specialty building materials that require a more personalized selling touch. With policies like no minimum order (the average order is $500; two-thirds of them are under $1,000) and a regional focus on Ontario and the Maritimes, Can-Save's own fleet of trucks serves its market more like milkmen of old than a large-scale wholesaler. Yet the service is less expensive than direct ship, says Dan Clements, the company's marketing manager. Can-Save did not ship during the first week of May, during the move. But the remaining three weeks of the month realized sales of $2.6 million, 25% greater than the entire month of May last year. Total sales in 1999, according to the Hardlines Who's Who, reached $26 million. * * * * * * MARCHANDS UNIS LAUNCHES ONLINE ORDERING FOR DEALERS TODAY Marchands Unis is unveiling an electronic catalogue for its member dealers today. The online program, developed in partnership with Ergonet, allows for access by the Québec-based co-op buying group's 383 member retailers to more than 30,000 SKUs online, complete with colour photos and detailed descriptions of the products and real time updates of inventory. The e-catalogue will also attempt to create an online community, which will allow Marchands Unis and its members to send and receive messages in the form of newsgroups, surveys, corporate messages, etc. While the first step is business to business, the program is designed to evolve into one customers can use, too. Retail sales through all of the 50-year-old company's stores totalled $200 million in 1999. * * * * * * CTC PRESENTS CODE OF ETHICS TO BUYERS Canadian Tire staff at its Toronto head offices and distribution centre found themselves presented with a new code of ethics last week. The code, a standard practice among many large organizations, was the first update at CTC in recent years. It reinforces the need for respect and dignity in the workplace and refines policies on new issues such as Internet use, including sharing of information via e-mail and access to inappropriate web content, which the company can monitor. The code also outlines policies for speaking with the media, which nobody is supposed to do without going through channels, but hey, that's what makes this job so interesting. Canadian Tire's move is a timely and proactive one that may well help to mitigate the kinds of behaviour emerging in many U.S. workplaces. According to a new survey by KPMG, a startling number of U.S. employees are observing illegal and unethical activity at work. The study reveals that 76% of 3,075 working adults surveyed nationally have personally observed violations of law or company standards (such as misleading customers, employment discrimination, shipping substandard products, falsifying earnings and mishandling confidential information) in the past year. Employees from consumer markets companies reported the highest level of observed misconduct - 81% - pointing to the need for more sophisticated approaches to compliance management. Almost half of employees (44%) from consumer markets companies reported that the types of misconduct they observed could result in "significant loss of public trust" if discovered. The findings suggest that compliance messages are, in fact, getting out, but the messages are not being integrated with individual value systems - or just coming across as practical. For example, 80% of consumer markets employees have been provided with information to help them understand their company's code of conduct; but 78% just don't take the company's policies seriously. And some of the reasons for cheating might actually indicate a kind of "battle fatigue" among employees: 73% said they feel the need to cut corners to meet deadlines and 67% feel pressure to meet overly aggressive earnings goals. In fact, when asked for their input on how to improve the situation, only 26% of employees called for tighter auditing and controls. The lion's share of responses underscored the slavish pace maintained by so many consumer markets companies today: 54% of surveyed employees called for more time and resources to perform their jobs properly and 40% called for more realistic performance goals. * * * * * * CONSTRUCTION OF "SMART" HOMES GROWING IN POPULARITY "Wired" homes will continue to increase in popularity says a new study from Allied Business Intelligence. Interest in wiring the home for digital services is gaining momentum as homebuilders embrace the concept. The number of installations in the U.S. grew from 34,500 housing units in 1998 to 83,900 in 1999. Up to 195,700 additional new homes are projected to get some form of wired system built into it this year. Total revenues from installations more than doubled from US$67 million in 1998 to US$147 million in 1999. Revenues are anticipated to double again in 2000 and to reach just over US$2 billion by 2005. According to the study, most homes do not have the telecommunications infrastructure to meet emerging data and entertainment needs.
COMPANIES IN THE NEWS Effective June 1, Dauphin, MB-based McMunn & Yates has purchased G. K. Smith & Sons in Eriksdale, MB. The 3,000-sq.ft. yard was a Tim-BR-Mart member like McMunn & Yates, and has been in operation 85 years serving the Inter-Lake trading area. The purchase took place following the retirement of owner Ray Smith. Ray's nephew, Brian Smith, will continue on as manager of the store. Revy Home & Garden opened its fourth store in the Toronto area on Saturday, this one in Scarborough. The 150,000-sq.ft. outlet employs 250. Home Depot will open The Home Depot Floor Store in Plano, TX, on July 13. The 45,000-sq.ft. store will include 33,000 sq.ft. of selling space and a service installation area. The Floor Store will offer 15,000-plus products, including carpet, area rugs, ceramic tile, laminates, wood, vinyl and flooring installation products, as well as blinds and wallpaper. The store is one of several specialty concepts Home Depot is testing, including a lighting chain and a plumbing wholesale business, both which were acquired by Home Depot last year.
CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
Cameron Ashley 18.31 7.25 18 5/16
Canadian Tire 46.00 19.10 24.00
Canfor 19.25 4.25 13.70
Goodfellow 12.25 7.50 11.00
Home Depot 70.00 35.75 48 3/16
Hudsons Bay 23.85 12.70 17.90
Lowe's Cos. 67.25 40.75 433/8
Sears Canada 42.50 29.00 36.20
Taiga Forest 14.75 9.00 9.50
West Fraser 41.00 28.00 33.30
"I think air pollution will only be dealt with when it affects TV reception." - Barbara Gowdy (Canadian fiction writer, speaking at the recent TED-City Conference in Toronto)
PEOPLE ON THE MOVE David MacKenzie has left Tim-BR-Marts Ltd., where he served as vice-president of merchandising. Effective June 19, Randy Martin will join the company as director of merchandising. Martin was most recently a merchant for Home Depot Canada, working in its Vancouver office, then briefly in Toronto before deciding to move west again to join Tim-BR-Marts. (604-736-8501) Dave Anklith, a veteran Canadian Tire buyer, has left the company. His duties as housewares buyer have been filled by Mike Santos, who also oversees storage and organizing products. (416-480-3000) At Surrey, BC-based Irly Distributors, the following British Columbia dealers have been elected to the company's 2000-2001 board of directors: Ron Moss of Burg & Johnson Builders' Supply in Powell River is now president; Mark Perry of Kerrisdale Lumber Co. in Vancouver becomes vice-president; and Vern Bigelow of Greenridge Supply in Vernon has been elected secretary. Other board members are Andy Anderson of Ashcroft Building Centre in Ashcroft, Milt Grieves of Capital Building Supplies in Prince George, Rex Millard of Nechako Trading Co. in Vanderhoof, and Mark Sternberg of Coldstream Building Supplies in Vernon. Scott McKellar has been appointed vice-president of Henkel Canada Corp. and general manager, LePage Division of Henkel Canada. McKellar joined LePage in 1998 as director, supply chain. He was previously with Livingston Logistics and Loctite Canada Inc.  
OVERHEARD... "We sell more tires and batteries than Canadian Tire." - Paul Walters, chairman and CEO of Sears Canada. He was speaking at a recent CHHMA member breakfast, explaining how Sears is cutting into CTC's business. That's okay: a couple of weeks later Wayne Sales at CTC explained to me how his company is going after Sears's business with more upscale housewares and kitchenware.  
MARKET INDICATORS The new housing price index, the index of contractors' selling prices for new houses, was up 0.2% in April compared with March, according to Stats Canada. The largest monthly increase was in Halifax (+1.4%). Other increases occurred in Hamilton (+0.5%) and Montréal (+0.4%). Calgary was up slightly (+0.1%). The index was up 2.1% year-over-year from April 1999. Residential renovation continues to grow, according to a new report from Toronto-based Clayton Research Associates. The report anticipates 5% growth both this year and next, bringing total residential renovation spending (products and contractor fees) to $25 billion in 2000 and $26 billion in 2001. Strong sales of existing homes and overall aging of Canadian housing stock are combining with a growing trend among consumers to improve their homes, fuelled by an expanding economy. About two-thirds of the total value of residential renovations is contract work; the balance is DIY, says the report.  
THE WOMEN'S CONSUMER PRODUCTS NETWORK June 27: WCPN Golf Tournament (Sorry - sold out!). August 15: Breakfast meeting during the CGTA Show. Featuring the proven communication methods of Robin Kennedy, vice-president of Communicare. For more information about these events, please phone: (905) 212-3826; fax: (905) 274-7646; email:wcpn99@yahoo.com, or check out their website: www.wcpncanada.org  
Hardlines Classifieds Got new products? Looking for new staff or lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: bev@hardlinesfax.com © 2000 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST=$212.75) per year (GST #13987 0398 RT). Please make cheque payable to McLarneyCom.