"A man is not old until regrets take the place of dreams." - John Barrymore (American actor, 1882-1942)
vol. viii, #9 March 4, 2002  
* Rona's retail sales hit $3 billion * Para forms buying group for paint accessories * TSC launches hardware specialty boutique * Home Depot, Lowe's record profits in 2001 * Profits strong for TruServ Canada year end
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TSC LAUNCHES HARDWARE BOUTIQUE IN BUILDING CENTRE
TSC Stores will open its newest outlet on March 15 — with a twist. At 6,000 sq.ft., the latest addition to the 18-store chain is almost one-quarter of the size of a typical TSC — but has to be to fit inside Prout's Building Centre in Forest, ON. The boutique approach is something new both for TSC and for Prout's, a Castle member with a strong contractor customer base. But Prout's wants to expand its hardware offerings, and is willing to let TSC do it, so it's turned over its retail showroom to TSC. Prout's traditional retail contractor customers continue to get served from the service desk at the back of the store. Called TSC Villager, the smaller size store features about 75% of the assortment found in a larger 22,000-sq.ft. TSC outlet, but in smaller quantities. Existing core lines of hardware, plumbing and electrical, formerly purchased through wholesalers such as Howden, are being replaced by TSC's own selection (TSC is a member of Mutual Hardware). New lines will reflect TSC's emphasis on the rural market, with the addition of workwear, safety clothing and equipment, pet supplies and farm products. The Villager experiment has been given a one-year trial period. Prout's existing staff, plus some new people, will work the TSC Villager sales floor, under a management contract forged between TSC and Prout's. TSC also opened its 19th stand-alone store in Ontario this weekend, this one a full-sized, 22,000-sq.ft. outlet in Peterborough. Another store will follow in Bowmanville in June.
PARA SERVES INDEPENDENTS WITH BUYING GROUP
The buying expertise of the building materials industry has been adopted by the paint industry with Para Paint's adoption of a buying group of its own. Para ProSource is headed up by Doug Munro, general manager. Formerly a buyer with Homecare Building Centres, he was approached by Para just over a year ago to provide better sourcing and purchasing power to 300 Para dealers across Canada. The result was Para ProSource, which is owned by Para, but operated by Munro on a contract basis. The buying group does not deal in paint. Instead, it gives dealers better access to accessories and décor lines, which many paint dealers are moving into in a bigger way. Everything from flooring and carpet, blinds and wallpaper are handled by Munro's group. Para ProSource helps the paint supplier build loyalty among its dealer customers. "This is really geared for the independent paint and wallpaper store," he says. "The dealers have become extremely loyal to Para and the program has helped us develop new members." Munro is also developing private label products within the group. He's just launched ProSource private-label brush program, in addition to existing programs for window blinds and wallpaper. "Nothng like this has been done before [for paint dealers]," he notes. "All these dealers had to run around to different suppliers on their own."
HOME DEPOT PUTS PUSH ON U.S. CONTRACTOR STORES
Home Depot in the U.S. has has a mandate to more than double the number of contractor-oriented stores in 2002. The next one will open in Texas as Home Depot Supply. It will be set up as six stores under one roof, each catering to different trades, and will incude a rental shop. Two test stores are currently operating as Home Depot Pro, a name which will be discontinued. Two more stores, in California and Colorado, will open this year. In addition, Home Depot plans to extend its pro services package to 400 existing stores in the U.S. over the next year, in addition to 535 stores outfitted during the past fiscal year. The company claims that 30% of its business comes from contractors (it's closer to 25% in Canada). It seeks a greater piece of the estimated US$276 billion contractor market south of the border.
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
Canadian Tire 28.20 18.50 25.00
Canfor 12.60 8.08 10.35
Emco 9.55 3.35 8.85
Goodfellow 10.25 8.00 10.00
Home Depot 53.73 30.30 50.00
Hudson's Bay 20.10 12.50 14.30
Lowe's Cos. 48.88 24.99 45.25
Sears Canada 26.50 12.50 19.29
Sodisco-Howden 2.63 0.75 190
Taiga Forest 11.05 6.80 10.55
West Fraser 43.00 26.13 43.00
TRUSERV ENDS YEAR ON UPBEAT NOTE
Even though sales remained flat through 2001, profits were way up for TruServ Canada, says president Léo Charrière. "We would have liked more sales," he admits, "but thanks to internal restructuring and a lot of activity in the field, our bottom line had a 64% increase." Since severing ties with its U.S. parent last fall, TruServ Canada has been working internally and externally to help dealers run their businesses better. "We were held back somewhat by the U.S. over the past few years," Charrière admits. "You can expect a sharper focus on our members' needs." Just last week the company launched True Value X-Sell 2002, a series of "in field" meetings to help individual hardware and building materials dealers refocus their businesses and identify new market opportunities. More than 100 stores will be involved in the initiative, which will continue until early June.
COMPANIES IN THE NEWS
Rona Inc. had net earnings of $24.6 million for fiscal 2001, up 36.8% over 2001. Sales grew 39.2%, from $1.3 billion in 2000 to $1.8 billion, reflecting the acquisition last June of Revy Home Centres. That sales number accounts for Rona's wholesale sales, as well as retail sales from 125 company owned stores, including part ownership in several big boxes. Total retail sales by all Rona dealers reached $3 billion in 2001. Home Depot in the U.S. reported a 53% increase in its 4Q profits, while sales were up 29% to US$13.5 billion. Profits for the fiscal year were up 18% to US$3.0 billion on sales of US$53.6 billion. Number-two player Lowe's Cos. posted a 26% increase in profits to US$1.2 billion. While Home Depot's profit level grew by double of Lowe's, the latter saw same-store sales increase 7.4% in 2001, while Home Depot's same-store sales were flat. Rona has broken ground on a site in Mississauga, ON for another Rona Home and Garden big box. The store is scheduled to open in September 2002. Meanwhile, a site in Goucester, ON is on track to open around the third week of May. Stanley Works has forged an agreement with Home Depot in the U.S. to become the supplier of choice for hand tools. The five-year deal includes Stanley Bostitch pneumatic tools. Stanley will also continue a 1992 deal whereby it manufactures Husky, Home Depot's proprietary brand of mechanics' tools and tool boxes. Stanley also now has the exclusive on builders' hardware in Home Depot.
PEOPLE ON THE MOVE
The following changes have been made at CanWel Distribution in Ontario: Ken Brown has been promoted to account manager industrial sales for Toronto and Southwestern Ontario. He was formerly Inside sales representative — industrial … Ryan Baron has been promoted to inside sales representative — industrial. He was formerly a warehouse associate … Henry Kou, formerly marketing/field representative with Canply, has joined the inside sales team — industrial. Peter Miller, formerly national key account manager, has left CanWel to pursue other interests. (905-457-8500) Home Depot in the U.S. has created a new management team for its contractor business. Ron Bogdanovich has been named vice-president of pro operations … Jim Stoddart is vice-president of national accounts … Dave Krumbholz was named vice-president of Home Depot Supply, sales and services. The group will report to Lynn Martineau, division president of new growth businesses.
MARKET INDICATORS
The economy grew by 0.5% in the fourth quarter of last year, says Stats Canada. While the advance was slight, it was the best in five quarters and effectively marked Canada's escape from recession. The economy in Canada grew 1.5% over the year.
NOTED…
Greg Dinsdale, senior vice-president of LBMX, just got back from Russia and Germany, where he accompanied Prime Minister Jean Chretien and the rest of Team Canada as they promoted business opportunities overseas. Annette Verschuren was in Ottawa last Thursday to meet with Canada's International Trade Minister, Pierre Pettigrew. The Home Depot Canada president was there as part of the Coalition for Fair Lumber Imports, which is lobbying for duty-free sotwood lumber trade with the U.S.
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