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Phone: 416-489-3396 Michael McLarney, Editor & President Beverly Allen, Publisher Brady Peever, Client Services Manager John Caulfield, Contributing Editor
June 29, 2009, Volume xv, #26
In This Issue:

“It isn’t the people you fire who will make your life miserable; it’s the people you don’t fire. ” —Harvey McKay (American executive and business writer, 1932- )

Industry slide began in’08 as market continues to dip
SPECIAL REPORT — Canada’s retail home improvement industry began to slide into a funk last year as more than a decade of growth came to a halt. New research from Hardlines on the size of the industry reveals that sales by home improvement retailers actually dropped last year — falling victim to the effects of a retreating housing market, declining consumer confidence and steadily increasing unemployment, plus flat commodity lumber prices.That’s the first annual drop in retail sales since Hardlines began tracking the industry in 1996. Home improvement retailing generated $40.29 billion in 2008, down from $40.92 billion in 2007, a small — but significant — drop of 1.5%. The industry is forecast to shrink even more in 2009.






By comparison, retail sales from all sectors in Canada totaled $425.3 billion in 2008, an increase of 3.2% over 2007. For most of the past decade, this industry kept pace with, or ahead of, total retail sales growth in Canada, so that it represents just over one-tenth of retail sales in this country. The range of factors affecting the market has created a decline that actually began in 2007, as growth slowed significantly to 4.7%, after years of growth in the range of 5%-8%. The full study, which appears in the latest issue of Hardlines Quarterly Report, further reveals that big boxes in this country are reaching maturity as the market faces saturation. At the same time, smaller-format retailers are making gains. (Get the full report on the size and growth of the industry, including the retail winners and losers — plus a special report on the latest retail formats — in the 2Q edition of our sister publication, Hardlines Quarterly Report Click here for more info.


Lowe’s Canada looks northward for continued expansion
SCARBOROUGH, Ont. — With 12 stores already under its belt, Lowe’s Cos. Canada opened two more outlets last week in Toronto’s east end. To avoid having a potentially unlucky 13th store, both are being called “store number 14.” The locations are both in Scarborough. The first, at Steeles East and Markham Rd. (“Scarborough North”), is in a heavily Asian population. The store features extensive Chinese signage and the grand opening even featured a dragon dance ceremony. The other store, at Warden Ave. below Eglinton Ave. East (“Scarborough West”), is in a former Wal-Mart store that sits beside a RONA Home & Garden.Lowe’s currently has 29 more sites under active consideration (meaning they are anywhere from just being evaluated to having almost all approvals in place to proceed with a build). According to Don Stallings, president of Lowe’s Canada, the next sites to be announced, though still in Ontario, will be north and east of the current concentration of expansion, which ranges from Windsor to Belleville, Ont. One of them will be in the Ottawa region. Stallings wouldn’t confirm a more specific location, but did say that a number of sites and communities are currently being evaluated. The other site will be in Northern Ontario, but until final red tape is cleared, he declined to name to exact location (Hardlines will have that news for you just as soon as it breaks—helpful Mike). In addition, Lowe’s continues to evaluate five of the six Sam’s Club stores that have been shuttered by Wal-Mart here in Canada, all of them in Ontario. Stallings said none of these stores has been finalized yet, but that talks with Wal-Mart are continuing. He also reiterated the company’s previously stated intention to open up to 100 stores across the country within the next eight years. Lowe’s ended last year with eleven stores and estimated sales of approximately $100 million. (A full listing of the sales, store counts, executive teams and buyers for Lowe’s Canada, Canadian Tire, Home Depot Canada, Home Hardware and 70-plus other retailers is in the newest Who’s Who Directory. Click here to order! —Michael)


CanWel reduces amount of annual distributions
VANCOUVER — Faced with the slowdown in the housing market in Canada, CanWel Building Materials Income Fund, the hardware and building supplies distribution company, has announced it will reduce the amount of its annual distributions to $0.50 per unit from $0.70 per unit. The fund also declared a cash distribution for June of $0.04166 per trust unit.The reduced amount makes sense in light of the economy, says Amar Doman, chairman of CanWel, while enabling the organization to conserve cash flow. “I feel this is a responsible level for the fund in the current economic environment we are facing.” The June cash distribution will be paid on July 20. The fund’s policy is for unit holders to receive distributions on or about the 20th day of the month following the end of the previous month.


TSC joins forces with farmers’ association
GUELPH — TSC Stores, the farm and hardware retailer based in London, Ont., has struck a deal with Ontario’s largest association of farmers, the Ontario Federation of Agriculture, to provide discounts to its members. The first promotion that OFA members can participate in is a “Member Days” event at TSC’s 40 locations in Ontario from June 19 to July 2. By showing their OFA member card, farmers will receive a 15% discount on most regular-priced merchandise. TSC has even created and mailed a special “mini” catalogue promoting the savings that are exclusive to OFA’s 37,000 members.Although the new partnership is being marked by this time-limited event, the association will be an ongoing one, says David Roussy, president and CEO of TSC Stores, as the OFA looks for ways to add value for its members. “We’ve been able to become their preferred retailer on a number of products,” he says. Partnerships like this one — and another, with Viterra Inc. in Manitoba (see our February 9/09 issue) — give TSC the means to promote itself and broaden its customer base. “It’s tough to match the bigger retailers when it comes to advertising spending,” Roussy notes, “so we have to be a lot more strategic with our promotions and our ad dollars.” Roussy himself joined TSC three years ago from Canadian Tire Corp. Last month, Hardlines announced that TSC had begun testing Stephenson’s Rental counters in two of its stores, in Uxbridge and Bowmanville, Ont.


Home Depot gives high priority to project selling
ATLANTA — Home Depot currently generates $270 per square foot in sales across all its stores. However, it wants to bump that number up eventually to between $340 and $350. A critical component in that effort will be getting customers to spend more money per visit, which is why the company is redoubling its efforts to sell projects that involve multiple products.Project selling “is part of our legacy,” says Craig Menear, executive vice-president of merchandising. Store employees have been receiving more sophisticated training so that they can connect the product dots for project-oriented customers. And Home Depot has recently rolled out a training program for its installed-sales associates who go to people’s houses, says Marvin Ellison, executive vice-president of U.S. Stores. (Last year, installed sales were placed under the umbrella of the company’s merchandising and operations departments.) At the company’s meeting with analysts recently, Ellison noted that the retailer is adding between 300 and 400 more man-hours to its stores to ensure that it has sufficient personnel on the sales floor at the right selling periods. And by cutting down on its requirements for memos, meetings and emails, store associates will be able to spend more time with customers, he said. However, the spirit of entrepreneurialism that drove Home Depot’s success in the past is being replaced by simplicity and a greater uniformity in its store operations to make them more productive. Home Depot’s Canadian division is currently testing a new Enterprise Resource Planning (ERP) system, dubbed SAP (for Systems, Applications and Products in Data Processing), to analyze and fine-tune each of its stores’ planograms, with an eye towards increasing turns and improving inventory management. Home Depot is assessing the results from this system to determine if it should be rolled out to its stores in the U.S. next year.



Our St. Jacobs Merchandise - Hardlines Department currently has the following opportunity...

Product Manager - Hardlines #702SL

Responsible to the Director, Merchandise – Hardlines, you will execute the plan to buy and the plan to sell for the Hand and Power Tools portfolio. Specifically, you will develop and maintain a well-rounded wholesale assortment in the distribution centres as well as products on a direct basis, and source Controlled brand / National brand product both domestically as well as internationally (travel to shows, stores, vendors as required – Domestic and International). Additionally, you will handle vendor negotiations to support corporate initiatives and build strong vendor relationships, supervise/mentor direct reports, and support marketing initiatives.

You are a high energy professional with an entrepreneurial attitude, have excellent communication, planning, organizational, and negotiating skills, and are willing to work ongoing extended hours. You have solid computer skills, are a team player, and have the ability to multi-task, complete priorities, and meet deadlines. Retail experience with related products an asset. We offer a competitive salary and great working conditions. If you are interested in becoming part of Home Hardware, please forward your resume, quoting Product Manager - Hardlines # 702SL, by Monday, July 6th, 2009 to: Human Resources Department, Hardware Stores Limited, 34 Henry Street West, St. Jacobs, Ontario N0B 2N0 e-mail: Fax: 519-664-4711 (Microsoft Products Only)

REGIONAL SALES MANAGER Point-of-sale and ERP systems for retailers and distributors

With a well-established client base throughout Canada, OGC is our industry’s leading developer and installer of computer systems for home improvement retailers and their vendors. A progressive company with more than three decades of experience in the field, we provide state-of-the-art management information (ERP) and point-of-sale solutions.

We are currently searching for a dynamic, self-starting Regional Sales Manager to expand our client base and service our existing customers in Ontario.

The ideal candidate will

  • Report to our Montreal head office out of their own location close to the Greater Toronto Area
  • Possess a good working knowledge of the hardware and building supply industries, allied with excellent verbal and written communication skills
  • Have a demonstrated track record of being able to build excellent relationships with new clients
  • Be creative, autonomous and diplomatic; be open to new ideas and possess good business instincts
  • Be willing to travel extensively and work flexible hours as required for sales and installation processes
  • Possess 5-10 years of experience in sales of information systems and/or sales of products and services to the Canadian home improvement retail industries.

This is a permanent, management-track position that offers a highly-competitive compensation package consisting of a base salary and commissions.

Interested candidates should send their CV and a letter outlining why they feel they are a good candidate for this post, to the attention of our Human Resources Manager, at (or by fax, 1-866-900-2112) by the deadline of July 31st. Please quote Job Ref. 2009M03 “Regional Sales Manager”. OGC Inc., 7575 Transcanadienne, Suite 403, Montreal, Quebec, H4T 1V6


A leading GTA based housewares manufacturer/distributor is seeking a sales professional responsible for all sales to retail housewares clients in Canada, supervision and development of sales personnel, and new business development.

Key competencies required are a proven ability to acquire new business, strong analytical skills, team player. Minimum qualifications for this position are: post secondary degree; experience in the housewares/tableware/glassware/cookware industry with a minimum of 15 years in retail sales and marketing - sales experience is mandatory, and some marketing education/experience required; ability to travel; MS Office Suite proficiency. Bilingual (English/French) would be an asset. Please submit your résumé via email to: Black Eagle Executive Search c/o Richard Simms at



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Recent Industry Resumés
Leadership, sales and communication skills, seeking a challenging and results-oriented environment.
A creative, strategic thinking and results oriented Sales Professional.
Dynamic business development specialist seeking managment opportunity
Well-spoken, energetic, confident, and personable, the type of person on whom your customers and employees will rely.
A seasoned veteran with a wealth of experience, on the front lines of Retailing. Personable, energetic and dedicated to providing Exceptional Customer Service.
A sales leader experienced in coaching, managing and developing sales teams.
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Publishing Details: HARDLINES is published weekly (except monthly in December and August) by HARDLINES Inc. 360 Dupont Street Toronto, Ontario, Canada M5R 1V 9 © 2009 by HARDLINES Inc. HARDLINES™ the electronic newsletter Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney - Editor & President - Beverly Allen, Publisher - Brady Peever - Client Services Manager - Chiaki Nemoto - Accounting - 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:$299 (Canadian subscribers add $14.86 GST = $315.21 per year/ GST #13987 0398 RT).Secondary subscriptions at the same office are only $48.75 (Canadian subscribers add $2.44 GST = $51.19).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.


Coming in July: Update your business library with the Hardlines 2009-2010 Who's Who and the 2Q Quarterly Report on the states of the industry.Hardlines helps you know more for better planning and decision-making.
BOUCHERVILLE, Que. — RONA has been recognized for its corporate responsibility by being counted in the eighth annual Corporate Knights Corporate Citizens ranking. Included in the ranking for the first time, RONA made it to number 18 out of 50 companies in the list, achieving the second-highest score in the retail sector and highest in home improvement retailing. The Corporate Knights Best 50 methodology for grading corporate citizenship is based on environment, social and governance indicators found in the public domain, and acknowledged RONA’s embedded life-cycle approach to product development. “At RONA, it was always clear that our commitment to sustainable development called for rigour and transparency,” said Robert Dutton, President and CEO, RONA, adding that the company has made the life-cycle approach the basis for all of RONA’s environmental initiatives.MEMPHIS, Tenn. — The giant hardlines distributor Orgill Inc. expects to start shipping out of its new, 800,000-square-foot distribution center in Sikeston, Mo., in early August. The Sikeston facility’s geographic location is roughly halfway between two antiquated DCs in Vandalia, Ill., and in Memphis that it is replacing. MOORESVILLE, N.C. — This month, Lowe’s launched a campaign offering cash-strapped customers advice about how they can save money through a new signage program that highlights how product purchases can be cost-reducing investments. This “Build Your Savings” campaign goes beyond price discounts, according to the In-Store Marketing Institute, whose Web site reported on the new program. The signage, which is supported throughout the stores by purple and green stanchions with informational literature, explains how certain products can help homeowners save money over the long term, with shelf tags that provide money-saving tips in three categories: tax credits, utility costs and do-it-yourself savings. POWELL RIVER, B.C. — Last week, the RONA affiliate dealer here had a grand reopening. The town is unique as one of the few large communities in Canada with no direct road access to the rest of the province. RONA products, like everything else that must come into the community, arrives by barge. Pat Hull, general manager and one of the owners of this uniquely staff-owned store, points out that RONA ECO products sell well to the aging hippie community here.


Jennifer Slobodian has rejoined the sales team at Can-Save, the Barrie, Ont.-based specialty building materials distributor. She started with Can-Save in a customer service role in 2002, and was promoted to territory sales representative in September 2006. After several successful years, Slobodian resigned. However, she returned with the opening of the Toronto west – Golden Horseshoe Territory.OSRAM Sylvania has named Rick Leaman as president and CEO, effective Oct. 1. Leaman will succeed Charlie Jerabek, who will assume a new role as the company's vice chairman. Under Jerabek’s leadership, OSRAM Sylvania grew to sales of €1.75 billion (CD$2.82 billion) in fiscal 2008. Leaman will serve as chief executive for OSRAM Sylvania’s consumer lighting, professional lighting and specialty lighting business units in Canada, Mexico and the United States. He will also serve as a member of the OSRAM Sylvania board of directors. To place a listing in our “People on the Move” section, please send me the information, including the person’s name, title and contact email or phone number, if desired at We reserve the right to edit items for length. —Michael
“A couple of orange shirts were in here already today. They’ll have to match us on price, but they can’t match us on our service.” —an associate at the new Lowe’s store in Scarborough North, overheard speaking to a customer. The store was one of two that opened to the public last Monday.
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