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Michael McLarney, President & Editor mike@hardlines.ca Beverly Allen, Publisher bev@hardlines.ca John Caulfield, Contributing Editor Phone: 416-489-3396 |
| June 23, 2008, Vol. xiv, #25 | |
| In This Issue |
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“The hardest job of all is trying to look busy when you’re not.” — William Feather (American author, 1889-1981) |
| ILDC will stay focused on vendor programs under new structure |
| AJAX, ON — With a small, select membership of only 22 retailers, Independent Lumber Dealers Co-operative has always been known for maintaining strong adherence to the programs it negotiates with vendors. Unlike many groups, which have designated buyers at head office, ILDC’s buying is done by members themselves, organized into committees for each product category. Will that loyalty to vendor programs continue now that new members have joined who represent, in turn, hundreds of independent dealers?As reported last week in HARDLINES, Delroc, Federated Co-Operatives, La Coop fédérée, and the Sexton Group will join forces with ILDC, effective Jan. 1, 2009, creating a group that will represent sales volumes in excess of $4 billion.
“These four new members are expected to continue the way that the co-op has operated over the years,” says Andrew Battagliotti, general manager of ILDC. They joined forces with ILDC, he points out, because of the appeal of his group’s way of doing business. “Even with these new members, we expect to remain true to vendor commitments and to live up to our promises.”
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| Home Depot will localize its stores’ product mix |
CHICAGO — in an effort to improve its gross margins and its appeal to shoppers, Home Depot plans to customize the product assortments in its stores more to local customer tastes.Addressing investors and analysts here last week, Greg Menear, the retailer’s executive vice-president of merchandising, said that his company is now less concerned with store growth than it is in driving productivity “in assets we have.” In that regard, the company will now concentrate on what Menear calls its “core customer”: the DIY homeowner and the small repair and remodeling contractor. Last week, Home Depot’s CEO Frank Blake said that the company no longer saw installed sales as one of its growth drivers.
 The company has recognized that it needs to make changes in light of current market conditions that are significantly reducing Home Depot’s business related to home sales. High oil prices and rising unemployment are also cutting into Home Depot’s growth.
Menear told his audience that one of Home Depot’s goals is to raise its stores’ profitability over the next several years by between 1 and 1.4 percentage points. (In the three months ended May 4, the retailer’s gross margin on revenue of $17.9 billion was 33.9%, and its operating margin was 4.1%.) To that end, it has been eliminating categories like pet supplies and automotive (which it never really committed to in the first place) which are of little interest to its core customers.
More dramatic are Home Depot’s plans to localize its stores' product assortments. Its field merchants will be working more closely with buyers at its Atlanta headquarters to devise product mixes that align with buyers’ needs in particular markets. Menear added that, in some cases, products will be priced differently from market to market, too.
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| Mat Plus loses founding member to RONA |
| WEST ROXBORO, QC — The latest independent to join RONA inc. represents a strategic coup, as well as a recruitment victory, for the giant home improvement retailer. Probex Building Supplies, under its co-owner Carl Strulovitch, was the founder of Mat Plus, a buying group developed in Quebec to serve independent dealers being supplied by Servimat.The decision, made with his business partner, Morris Rudnitsky, to switch Probex, which does about $12 million annually in sales (Probex previously flew the PRO banner), reflected a combination of personal and business choices. Strategically, it fits with a desire to move the company, which currently sells about 80% to contractors, to become more retail friendly. “We’re hoping to get it up to about 30% or 35% [retail sales],” says Strulovitch. “It offers better margins, better cash flow.” The RONA name’s dominance in Quebec was also an attraction for him. On a personal note, the move will fit in, as well, with his own long-term plans for involvement in the business. But ultimately, it was a good deal, he admits. “It’s one of those things I didn’t expect. They offered me a deal I couldn’t refuse,” he says. As for his departure from Mat Plus, Strulovitch expresses his sadness. “On an emotional level, it was very, very tough. It was a very hard choice for me to make. But, at the end of the day, it was a business decision.” |
| Industry will stay buoyant despite declining growth |
| WORLD HEADQUARTERS, TORONTO — The retail home improvement industry is facing a slowdown, one that is expected to deepen over the next 18 months. But considering that it follows “the most buoyant decade of growth in modern history”, conditions will remain healthy enough to guarantee moderate growth over the year ahead. That’s the conclusion of a new report in the latest edition of Hardlines Quarterly Report.According to the report, the industry grew by a whopping 214% from 1997 to 2006. Even though signs of a slowdown began to emerge as early as 2005, the industry grew to almost $42 billion last year. Consolidation is again one of the driving forces in the industry, as a handful of companies — RONA inc., Home Depot Canada, Canadian Tire, and Home Hardware Stores — represent more than half of all sales by home improvement retailers in this country. The latest issue of HQR also features the Who’s Who Directory of the top retail customers in the country. More than 70 retail chains, buying groups, and co-ops are listed, with full contact information, executive teams, and complete buyer listings. (For more info and to order your copy of HQR, including the Who’s Who Directory at no extra charge, click here |
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Classifieds |
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Sales Representative Can-Save Position: Sales Representative (Ottawa & Kingston area) Location: Eastern Ontario, Start Date: Immediately Company Information: www.can-save.ca Can-Save, a progressive building materials distributor – specializing in specialty building products, doors, and kitchen and bath cabinets, has an immediate opening for an Outside Sales Representative for its Eastern Ontario territory The successful candidate will:
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SALES AGENT NORTHERN ONTARIO Colonial Elegance is looking for a Sales Agent for Northern Ontario. The ideal candidate will sell and promote all of Colonial Elegance’s products to building supply dealers across Northern Ontario. The territory is already established and has great earning potential. The position includes selling and servicing existing accounts prospecting and adding new clients within the building supply industry. The agent will report to the Sales Director for Ontario. Qualifications
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Black Eagle Consulting provides a variety of Career Transition services in the areas of Executive Search, Outplacement, and Career Counseling. President Richard Simms has many years of experience in the home improvement industry both as a manufacturer and consultant with a wide range of contacts. For more information: 905-842-3010 www.blackeagle.ca ______________________________________________________________________ |
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Marketplace |
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Sell your company - or buy one - with HARDLINES Classifieds!
Do your executive search, find new lines or get new reps in the HARDLINES Marketplace.
Only $2.75 per word for three weeks in the classifieds.
To place your ad, call Barb Hills at 416-489-3396 or email: barb@hardlines.ca
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More Information |
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To ensure you receive your HARDLINES newsletter each week, please add bev@HARDLINES.ca to your address book.
Did your email system make this newsletter unreadable? You can read it online instead. call us to find out how. Publishing Details: HARDLINES is published weekly (except monthly in December and August) by HARDLINES Inc. 360 Dupont Street Toronto, Ontario, Canada M5R 1V 9 © 2008 by HARDLINES Inc. HARDLINES™ the electronic newsletter www.HARDLINES.ca ; Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney - President - mike@HARDLINES.ca Beverly Allen, Publisher - bev@HARDLINES.ca Brady Peever - Circulation Manager - brady@HARDLINES.ca Barb Hills - Sales Manager - barb@HARDLINES.ca The HARDLINES "Fair Play" Policy:Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read HARDLINES each week - but let us handle your internal routing from this end! Subscription:$285 (Canadian subscribers add $14.25 GST = $299.25 per year/ GST #13987 0398 RT).Secondary subscriptions at the same office are only $46 (Canadian subscribers add $2.30 GST = $48.30).Ask about our reduced rate for branch offices.You can pay online by VISA/MC/AMEX at our secure website or send us money. Please make cheque payable to HARDLINES. |
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Who are Canada’s leading home improvement retailers? How big is the industry they operate in? And who are the top few that control the lion’s share of the market? Find out in the latest issue of our sister pub, HQR! Includes our incredible Who’s Who Directory, now free to all HQR subscribers! |
| COMPANIES IN THE NEWS |
| CALGARY — TIM-BR MART has added two new dealers and three locations to their cross-Canada network. Hickeys’ Building Supplies operates two retail locations in Newfoundland – Conception Bay South and Harbour Main – and selling primarily to contractors. Cleave Management & Investment Services (operating as “Renovators”) in Picton, ON has also joined, identifying TIM-BR MART as an important component to their retail growth in the area.BURNABY, BC — Taiga Building Products Ltd., the building products distributor, reported a dividend of $0.0150 per common share and the stipulated monthly interest payment of $11.6667 per $1,000 principal value subordinated notes. The payments will be made to shareholders and noteholders of record on June 30, 2008 and will be payable on July 15th, 2008. MISSISSAUGA, ON — Weiser Lock has launched a national marketing campaign with the movie version of the great old “Get Smart” TV series. Playing on Weiser’s “Get Smart. Get Weiser.” advertising campaign, the two-month co-promotion with Warner Brothers Entertainment means that every purchase of Weiser SmartKey handlesets or SmartScan products will include tickets for the “Get Smart” feature film, starring Steve Carell. The promotion will run through to July 31, 2008. NEW BRITAIN, CN — In an effort to further diversify its operations beyond residential construction and remodeling, Stanley Works will spend $275 million in cash to acquire Sonitrol Corp., a security monitoring business, from a group comprised of three private equity investment firms. Stanley has also agreed to sell CST/Berger, its laser measuring business, to Germany-based Robert Bosch Tool Corp. for $205 million. Stanley expects the net proceeds from the CST deal to hit $155 million. QUEBEC CITY — Novik anticipates record-breaking quarter for its second quarter. Revenue for Q2 2008 is anticipated to be in the $7 million range, which would represent growth of close to 55% compared to same period last year. In 3Q 2007, Novik reached $5 million in sales, which anticipated that 2008 second-quarter sales would surpass the company’s previous record by 40%. |
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ECONOMIC INDICATORS |
| Consumer prices rose 2.2% in May compared with May 2007, up from the 1.7% increase reported in April, driven by big significant increases in gasoline prices, which were up 15.0% year-over-year. The 0.5 percentage point acceleration in the Consumer Price Index was the sharpest since September 2007. (Stats Canada)Retail sales in April increased by 0.6% to an estimated $35.6 billion, the fifth monthly increase in seven months. This gain followed a pause in March that could largely be attributed to adverse weather conditions. (Stats Canada) Wholesale sales rose again in April, this time by 1.4% to $43.4 billion, largely as a result of increased demand in the personal and household goods and the machinery and electronic equipment sectors. The rise in April follows a 0.7% increase in March. (Stats Canada) |
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NOTED... |
The kind folks at Black & Decker Hardware & Home Improvement Group held an open house recently for their new head  offices in Mississauga, ON. Two good looking guys in attendance were hockey legend Wendel Clark (r), former captain of the Toronto Maple Leafs, and my brother Pat. —Michael |
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