John Caulfield, Contributing Editor
 vol. ix, #26 June 30, 2003

* TruServ cuts supply deal with Sexton Group * Do it Best parts company with Sodisco-Howden over Ace deal * Home Depot includes Manhattan in Northeastern expansion plans * Homeowners want simple reno ideas that work * Rare toad holds up Lowe's new distribution centre * Florida independent sues Home Depot over slogan use * Home Depot gets zoning approval for store in Northern Ontario

"Every man is guilty of all the good he didn't do." — Voltaire (French author, humanist, rationalist, & satirist, 1694-1778)
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Winnipeg, MB TruServ Canada has forged a supply agreement with Sexton Group, the building materials buying group. The deal is structured as a group arrangement that gives all 275 of Sexton's members across the country access both to a warehouse full of hardware products and to a range of dealer programs. Under the arrangement, these include services that would typically be reserved for dealer members only. Besides that, both sides expect greater synergies by virtue of the simple fact both TruServ and Sexton are headquartered in Winnipeg. Over the years, TruServ has made similar supply agreements with other buying groups, including Castle Building Centres. About 40 Castle dealers currently fly both the True Value and Castle banners, and seven Sexton already customers operate under a dual-banner arrangement. However, the latest deal is structured to make more programs available to Sexton dealers without having to sign on for a full bannered program. It's all part of TruServ's effort to offer a wholesale hardlines alternative to independents. "We're not necessarily going to provide a full program, because that's what the groups do," says Ray Falkenberg, vice-president business development and marketing for TruServ Canada. "They can use TruServ as a wholesaler and can then grow within the program, if they choose." He stresses that even if an independent takes on a full bannered True Value program, that program will be managed through the buying group, rather than requiring the dealer to join TruServ. In its efforts to become a full-line national wholesaler, TruServ has been attempting since late last year to develop customers outside its base of members dealers, wooing independents from other buying groups. In fact, TruServ Canada already supplies about 25 Castle dealers on a similar basis, and two Sexton members have just committed to the new supply agreement on a strictly wholesale basis. Both dealers have said they would consider a full banner program down the road. "We're just trying to adapt to the marketplace, so we have a bannered program and a non-bannered program," Falkenberg says. "It brings us in as a serious player. We really feel there's a demand out there outside of Sodisco-Howden to supply these stores."

Fort Wayne, IN The previously announced decision of Sodisco-Howden Group to switch its Do-it center dealers to Ace Building Centre got a nudge from the banner's licensee, Do it Best Corp. Considering that Sodisco-Howden purchased the assets of Ace Hardware in Canada, a major competitor of Do it Best, the U.S. co-op retailer has decided to terminate its agreement with Sodisco-Howden.

"It was our feeling that [the Ace purchase] was not consistent with our goals in Canada," says Bill Zielke, vice-president of marketing and international development for Do it Best. "As a result, we sent a formal letter to Sodisco-Howden expressing our desire to terminate the agreement." Jos Wintermans, president and CEO of Sodisco-Howden, disagrees that his deal with Ace is inconsistent with the Do it Best agreement. "We certainly thought there was no violation and we looked at the agreement carefully before doing the [Ace] deal," he says. In Canada, both the Ace and Do-it center banners are operated under license by Sodisco-Howden, a publicly traded for-profit wholesaler. In the U.S., these banners are owned by dealer-owned co-ops. Although Sodisco-Howden services only about 60 Do-it centers in Canada, they are typically strong building centres that generate a lot of sales for Sodisco-Howden. Zielke affirms that his company had been pleased with the arrangement in the past, which managed to provide Do it Best with some brand recognition in Canada. It has also enabled the retailer to co-exist with two other Canadian co-ops, Home Hardware and Rona, with whom it shares membership in a hardware buying group, Alliance International LLC. "We were really comfortable with the Sodisco-Howden agreement until the Ace deal." Does the termination of the deal with Sodisco-Howden signal any further interest by Do-it Best in moving north of the border? "We'll have to take a look at the Canadian market," says Zielke, which includes looking at other licensing agreements or some other form of presence in Canada. "Anytime you incorporate change you have to take the opportunity to re-evaluate your goals and opportunities."

Atlanta, GA Home Depot reportedly is evaluating once again how best it can open at least one store in Manhattan, as it moves forward on its plans to open another 31 stores in the Northeastern U.S. this year. New York is one of Depot's biggest markets. The dealer has 76 stores in the Empire State, and an estimated 300 stores in the Northeast, which the chain defines as ranging from Fredericksburg, VA to northern Maine, according to Tom Taylor, president of Depot's eastern division, which oversees more than 600 stores and stretches to Puerto Rico. In an interview with Reuters, Taylor said Home Depot is looking at New York's borough of Manhattan "for the first time in quite a while." Several years ago, rumors circulated within real estate and retail circles that the retailer was seriously looking at the land vacated by Alexander's in midtown Manhattan. The retailer has multiple stores in every other borough, including its smaller urban neighborhood store format in Brooklyn and Staten Island. It is highly likely that Home Depot would use the smaller format in Manhattan, said Taylor. He told Reuters that the company has already identified several prime locations, although he did not specify where. The urban neighborhood format ranges from 60,000 to 80,000 sq.ft.
New London, CT An anti-social toad is one of the reasons Lowe's has decided to redesign its plans for 30-acre warehouse and 40-acre parking lot in nearby Plainfield. The rare eastern spadefoot toad, along with a vesper sparrow and blue-spotted salamander, are endangered or threatened in Connecticut, so Lowe's has redesigned its building plans to make sure wetlands where the endangered animals reside remain undisturbed, says a report in The Day, a local newspaper. In fact, the retail giant will devote US$125,000 over the next three years to study the three species and maintain their habitat.
Naples, FL Sunshine Ace Hardware, the four-unit dealer that has served this market for more than 40 years, has filed a lawsuit against Home Depot, claiming the retail giant has illegally expropriated Sunshine's marketing tagline. Home Depot started using the tag, "You Can Do It. We Can Help," as part of the TV ads it ran during the Grammy Awards in February. The Atlanta-based dealer has included the tag in all of its ad materials as part of its effort to expand its marketing image beyond low price and assortment. Hardlines confirmed that Sunshine Ace has accused Home Depot of infringing on its trademarked slogan. It is seeking an injunction that would bar Home Depot from using the tag in any form. Sunshine is seeking more than US$500,000 in damages and wants Home Depot to open its books to reveal how much profit it has made during the time it has used the slogan. Jerry Wynn, Sunshine's president, told Hardlines that his company had informed Home Depot about its objections to the use of its tag on March 19. Home Depot asked for more documentation "and we haven't heard from them since," he says. Jennifer Whitelaw, the attorney representing Sunshine Ace, says her client has a federal protected trademark, and she has received "no substantive response" from Home Depot, which has 20 days from June 25 to answer the complaint.
Toronto, ON Despite the plethora of TV shows touting innovative, trendy and downright outrageous interior design, the average consumer is looking for something more practical that will work with their existing look and fit with their family. According to a survey of designers from The W Network's show, "The Decorating Challenge," conducted by Zellers, functionality was the predominant design challenge during consultations with consumers. Asked about the most common design dilemma, 68% of designers responded that questions regarding room layout and functional furniture topped the list. Eighty percent of Canadians are fairly happy with their existing home décor and merely seek advice on enhancing what's already in their homes, as opposed to striving for a brand new look. Colour questions were next on the list, representing 42% of the design questions posed during the tour. Surprisingly, the kitchen and bathroom were at the bottom of the list of rooms designers were asked about, garnering only 18% of questions. The room with the most design-related questions was the living room (28%), followed closely by the den (23%) and master bedroom (19%).
Canadian Tire 37.29 26.80 32.20
Canfor 11.50 6.83 9.00
Costco 39.55 27.00 36.01
Goodfellow 13.99 9.75 10.80
Home Depot 38.50 20.10 32.47
Hudson's Bay 13.90 5.87 9.50
Lowe's Cos. 46.43 32.50 43.12
Rona Inc. 19.40 11.75 18.55
Sears Canada 24.25 13.60 16.65
Sodisco-Howden 1.90 1.06 1.70
Taiga Forest 7.40 5.85 7.21
Wal-Mart 58.03 43.72 53.80
West Fraser 39.46 26.27 36.00
Kitchener, ON TruServ Canada took its first orders last Friday at its new distribution centre here, and began shipping Sunday. The facility is geared up to supply former Growmark dealers that operate FS and Country Depot stores, and will cross-dock some merchandise for existing TruServ and V&S customers in Eastern Canada. Sault Ste. Marie, ON City council here has given approval for rezoning that will open the doors for the city's first Home Depot. The retailer has been considering the site for about three years, choosing it over the Michigan Sault area, primarily because of the greater population base. Although city council's approval was unanimous, there is a possible stumbling block to an early start on construction if the rezoning has to go for approval by the Ontario Municipal Board. Vancouver, BC Weyerhaeuser Co. has announced that five Crown timberlands operations and five sawmills on the coast of British Columbia will take periods of downtime in July. The company blamed weak market demand, falling prices resulting from a general oversupply of lumber, high costs associated with operating on the B.C. Coast, softwood duties, and a rapidly rising Canadian dollar. All five of Weyerhaeuser's Crown timberlands operations on the coast, including West Island, North Island, Stillwater, Port McNeill, and Queen Charlotte Islands, will be down for the month of July. On the mill side, Somass and Island Phoenix Division will be down for four weeks, Alberni Pacific division for three weeks, New Westminster for two weeks and Chemainus for one week. Easton, MD Pettinaro Enterprises, a real estate company based in Wilmington, DE, has paid US$4.9 million to acquire Black & Decker's 58-acre, 245,910-sq.ft. manufacturing complex here. Previously B&D, the Towson, MD-based toolmaker, had announced its plans to close the plant as part of its ongoing efforts to move at least 75% of its manufacturing offshore to Asia or the Czech Republic. B&D had listed the property at US$5.9 million, according to the Washington Post. B&D is working with the developer to find new tenants for the facility. Chicago, IL Fresh from bankruptcy, Kmart Holding Corp. posted a loss in the first quarter ended April 30 of US$862 million, but the retailer's loss narrowed from the US$1.44 billion loss it reported a year earlier, and its gross margin improved, sending its stock up more than 20%. However, same-store sales fell 3.2% the quarter. Bellingham, WA Fluid Enterprises, a subsidiary of Harbour Group, has acquired The Gonzo Corp., a Massachusetts-based manufacturer of branded cleaning products. Gonzo will become part of Harbour's Fluid Enterprises group, which includes Homax, Krusin International and Tile Care Products. New York Bed Bath & Beyond Inc. has reported a first-quarter profit of US$57.5 million, a 24% increase over US$46.3 million during the same period a year earlier. Sales rose about 15% to US$893.9 million from US$776.8 million a year ago. Same-store sales were up 4.4%.
Paul Hètu, who has served as vice-president of advertising and communications at Réno-Dépôt Inc. since 2001, is taking over as vice-president in Montréal of the Canadian Association of Announcers, effective July 7. (1-800-883-0422) Cam Silverson is retiring from Tremco Retail Products effective July 1. He's been with the company since 1968 and vice-president and general manager since 1977 … Tony Duffy has been appointed the new vice-president and general manager, replacing Silverson. He was formerly vice-president of sales and marketing … Tom Lee has been named director of field sales. He was formerly national accounts manager. Reporting to Lee are: Monique Arsenault, customer service manager, and Chris Hatfield, field sales manager. Reporting to Hatfield are Rod Bubel, district manager for Western Canada, and Michel Olivier, district manager for Quebec … Dominic Iuticone is now director of national accounts at Tremco. He was promoted from national accounts manager … Replacing Iuticone as national accounts manager is Mark Gibb, who has joined Tremco from Norton Canada, where he was national accounts manager … Lawrence Genga has joined Tremco as trade marketing manager. He comes over from Dundas Jafine, where he was marketing manager. (1-800-387-9879) Weyerhaeuser Co. has appointed Fred Rowson vice-president, Alberta. Rowson will continue in his role as Softwood Lumber area manager for Weyerhaeuser's three Alberta lumber mills in Grande Cache, Drayton Valley and Grande Prairie, and its lumber mill in Big River, SK … Rowson replaces Cathy Slater in her role as leader of the company's Alberta Management Council. Slater has moved to Weyerhaeuser's Port Wentworth, GA mill as vice-president and pulp mill manager. Walter Hachborn, president and co-founder of Home Hardware Stores Ltd., has been presented with the Queen's Golden Jubilee medal. Lynn Myers, MP, Waterloo-Wellington, presented the medal last week on behalf of the Governor General of Canada. The medal is awarded to Canadians who have made a significant contribution to their fellow citizens, their community or to Canada, and it's part of the Jubilee year celebrations organized by the Department of Canadian Heritage. (519-664-2252)
Retail sales fell 0.9% in April following a 0.8% drop in March, cancelling out the 1.8% gain observed in February. These declines left consumer spending in retail stores at $26.1 billion in April, virtually the same level as in January. Previously, retail sales had generally been increasing since the September 2001 slump. The "other" category, which includes hardware, was flat from month to month. Retailers in Ontario experienced weaker sales (-2.6%) in April, but the biggest drop was in Toronto, where the fear of SARS dampened spending. Retail sales in the Greater Toronto Area were down 3.8%, compared with a 1.8% decline in the rest of Ontario. Retail sales in the Toronto metropolitan area account for approximately 40% of all sales in Ontario and about 15% nationally. Higher property prices in the second quarter of 2003 helped to slow housing sales to normal levels in some parts of the country, says a mid-year report released today by Royal LePage Real Estate Services. However, markets on the east and west coasts experienced some of the heftiest price appreciation year-over-year. Strong housing activity in 2002 resulted in best-ever sales performance in many markets, but Toronto, Ottawa and Calgary are now trending towards more balanced conditions, says the report. The composite leading index rose 0.2% in May, the sixth straight monthly increase. Half of the components edged up or were stable in May, while five components fell, one more than in April. The financial market indicators took over from household spending in offsetting the weakness in manufacturing that arose from slow export demand. Within household demand, only furniture and appliance sales continued to expand. The drop in the housing index in March and April moderated to just 0.1% in May, as existing home sales rose for the first time in four months. U.S. consumer confidence went flat in June following a slight improvement in May, reports the U.S. Conference Board. The consumer confidence index stood at 83.5 in June, down 0.1 from May. However, consumers are optimistic about the future: the expectations index rose to 95.9 from 94.5 in May. Housing sales in the U.S. are expected to rise this year, says a report from Bloomberg News. About 1.08 million new homes are forecast to be sold this year, up from 973,000, a record high set in 2002. Sales of existing housing rose 1.2% last month to 5.92 million annually adjusted, from 5.85 million in April.
The Canadian Professional Sales Association is developing an on-line directory of manufacturers' agents called agentSource. The directory will be available to government trade agencies, particularly in the U.S., that seek to source Canadian manufacturers' agents in a wide variety of industries. A listing in agentSource is free. Profile forms available at

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