"A faithful friend is the medicine of life." - Ecclesiasticus (6:16)
vol. viii, #10 March 11, 2002  
* Cologne provides international opportunities * Home Depot gets new Canadian merchandising vp * European retailers form new association * Ace forms international agreement * Newell takes over American Tool * Can-Save increases provincial distribution

With 3,880 suppliers from 59 countries on hand to meet some 90,300 trade visitors, space at the International Hardware Fair/ DIY`TEC in Cologne, Germany, March 3-6, was sold out. But the 286,000 square metres of exhibition space at KölnMesse featured only seven exhibitors from Canada. But while exhibitors were down from as many as 26 in the past, the presence of buyers and other companies seeking product and merchandising ideas were at a record high for Canadian participation.

The focal point for the more than 100 Canucks at the show was the Third Annual Canada Night Reception, held March 3 on the fair grounds. There, buyers and executives from Canadian Tire, Sears, Home Hardware, Ace Hardware, Acklands-Grainger and Lee Valley Tools enjoyed German beer and rubbed shoulders with representatives from companies such as Ryobi, Weiser, Mibro, Bosch, LePage and more. This year, the event took on a more international aspect, as the heads of the French manufacturers' association, Unibal, the British Hardware and Housewares Manufacturers Association, and the European federation Fediyma, were on hand; additional representatives from as far away as Australia also showed up. This is the first year that attendees at the International Hardware Fair found themselves using the Euro. This new currency replaces the mark in Germany and the currencies of 11 other countries in the European Union. The effect is expected to be positive for consumers, as price comparisons from one country to another become instantly easier, both for end users and retailers themselves. The downward pressure on pricing at both wholesale and retail will have an impact on suppliers, as well. During the Lord Mayor's dinner just prior to this year's show, a new name and logo were unveiled. Beginning next year, the show will be called Practical World, a vague catch-all for the three main sections of the event: tools, locks and security and building materials. Next year's show will be held March 9-12, 2003. (Next week: more on what we saw in Cologne - Michael)
Ace Hardware's international team has just inked a deal with Euro-Mat S.A., a buying group that represents 3,250 stores in 20 countries throughout Europe. Its membership comprises mainly home centre dealers and represents about $22 billion in retail sales and is considered a good fit with Ace's hardware expertise. Negotiations between the two groups began last year at at the International Hardware Fair/DIY'TEC in Cologne, Germany, where Lucien Hardt, general manager of Euro-Mat, first met Paul Ingevaldson, Ace's vice-president international, logistics and new business. Euro-Mat had had some previous discussions with Do-it Best Corp. which failed to produce results. According to Euro-Mat's Hart, "This is the first-ever intercontinental buying relationship." Both organizations, he adds, can share their expertise and suppliers to better compete against big boxes.
Retail trade associations from Germany, France and the U.K. have agreed to band together to form a European association for DIY retailers. The union was announced last week by Jon Herbert, managing director of the German retail hardware association BHB, at the International Hardware Fair/DIY'TEC in Cologne, Germany. The aim of the new association, says Herbert, will be to address some of the issues facing the heavily saturated DIY home improvement industry in Europe, including shrinkage and logistics. A proposed promotional campaign to increase consumer awareness and increase the size of the consumer market is also under consideration. The new association will be launched officially at the BHB's annual congress in Berlin in April, when other countries from the European Union are expected to join. This initiative by the retail associations follows the formation two years ago of Fediyma, the federation of European DIY manufacturers' associations.
Canadian Tire 28.20 18.50 27.70
Canfor 12.60 8.08 10.85
Emco 9.55 3.35 9.25
Goodfellow 10.25 8.00 10.25
Home Depot 53.73 30.30 48.94
Hudson's Bay 20.10 12.50 14.88
Lowe's Cos. 48.88 24.99 45.75
Sears Canada 25.00 12.50 20.10
Sodisco-Howden 2.63 0.75 1.90
Taiga Forest 11.80 6.80 12.75
West Fraser 43.10 26.13 41.00
Giles Bowman has been appointed merchandising vice-president for the Canadian division of Home Depot (hmm, they're not calling it Home Depot Canada anymore - Editor). He has held various merchandising positions in the company since joining in 1996, including merchant, division merchandising manager and global product merchant. He most recently served as merchandising vice-president for the Home Depot's Southwest division. Prior to joining Home Depot, Bowman spent 10 years with Lowe's Cos. as a buyer and merchandiser. (416-609-0852) Sears Canada has announced the retirement of William R. (Bill) Turner, president, merchandising, marketing, and logistics, effective April 17, 2002. Turner began with Sears in 1966 as a management trainee in Ottawa. In 1986, he was appointed vice-president, merchandising and assumed the additional duties of catalogue and distribution in 1989. He was promoted to his latest position in 1997. (416-362-1711)
Can-Save has increased its Ontario distribution with three new shipping hubs, located in London, Ottawa, and Sudbury. The new facilities are designed to enable Can-Save to provide next-day delivery and multiple delivery runs during peak periods. TruServ Canada is currently upgrading its website with enhancements to the members-only site. Phase two of the website's development is expected to be completed by September 2002, at which time the site will offer online ordering, as well as sales information and trends based on POS information from the stores themselves. Hudson's Bay Co. has reported that sales for the year ended January 31, 2002 increased 0.6% to $7.45 billion. Net earnings for the year were $73.4 million. The Bay had sales of $2.67 billion, down 1.3% from last year, with same-store sales down 4.8%. At Zellers, sales increased 1.9% to $4.69 billion; same-store sales increased 1.1%. Newell Rubbermaid has taken over American Tool Cos. Newell already owned 49.5%, and paid US$419 million for the remainder, including assumption of debt. American Tool had 2001 sales of US$443.6 million and employs 4,600 people. This latest acquisition will be operated within Newell's Levelor/Hardware Group, which had US$1.4 billion in sales and is led by B&D alumnus James Roberts. Allen Petersen, former head of American Tool, will continue with the new group as a consultant. Kmart Corp. will receive $2 billion in new financing to help it through its reorganization, thanks to a decision by a bankruptcy court judge yesterday. The discount retailer will also get up to $150 million to distribute bonuses to its key executives and store managers. In an undisclosed cash deal, Bed Bath & Beyond in the U.S. has purchased Harmon Stores Inc., which operates 27 health-and-beauty stores.
Housing starts in Canada declined 12.3% in February to 179,800 units seasonally adjusted, from 205,100 units in January, according to CMHC. Urban singles were up 11.6% to an annual rate of 99,700 units from 89,300 in January, while urban multiple starts fell 37.3% to 60,100 units from 95,800. Estimated rural starts remained at 20,000 units seasonally adjusted. Weak job growth in 2001 and 2002 is considered the main reason for a small decline in housing starts this year, says CMHC in its first quarter Outlook. They are expected to drop to 156,100 starts from 158,000 in 2001. A stronger economy in 2003 is expected to boost demand again in 2003, with starts forecast to reach 159,200. Alberta is considered where the strongest growth will occur, while British Columbia is expected to continue rebounding from its slump.
Mark your calendar for this year's convention and annual meeting of the National Retail Hardware Association in the U.S.: July 14-16, 2002, Manchester Grand Hyatt, San Diego, CA. For more info, contact Diane Allen, 317-290-0338.
"We're not merchandisers. we never have been. We're back-end guys, selling houses and projects to contractors and retail customers." - Frank Rizzo, vice-president of Prout's Building Centre in Forest, ON. He's turned over his retail sales floor to another retailer, TSC Stores, to sell hardware for him on a test basis.
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