Lowe's packaging requirements affirm commitment to Canadian expansion

COLOGNE, Germany–Vendors supplying the world's second-largest home improvement retailer have the company's commitment to international expansion and an extra hurdle to being fully compliant. Frank Loncar, President of International Sourcing for Lowe's, revealed this, and other insights about the world's second-largest retailer, at the Practical World Forum, held here recently during the International Hardware Fair/Practical World. The Forum itself hosted a gathering of some of the world's top retail executives to hear the latest on international growth strategies. Besides Lowe's, other retailers represented on the podium included Easy Home Centres, the largest home improvement chain in South America, and Kingfisher, the world's number-three player after Lowe's. Loncar revealed how Lowe's structures its relationships with vendors to ensure the kind of performance that boosted the company's sales by 18.6% last year to US$43.2 billion. He started off by stressing the importance of import business, which he expects to grow by 13-14% this year. Already, its contribution to total sales–26.7%–is double the company average. Imports from the Far East accounted for 9.25% of sales last year, and is expected to reach 10.24% in 2006. "Roughly 45% of the products sold in Lowe's are made outside of the country, even if the manufacturer is domestic," Loncar said. So how do vendors fit in with that offshore scenario? "The four components we expect from our key suppliers are innovation, differentiation [from other companies], simplifying the shopping experience, and creating value–what makes shopping at a Lowe's store a compelling opportunity; what makes the customer want to drive past the big orange box to come to us." Loncar told HARDLINES that Lowe's now insists on trilingual packaging, a move that reflects the company's commitment to Canada by adding French to the existing English and Spanish. Practical World Forum was put on by the European DIY Retail Association, the German DIY association BHB, and Koelnmesse.

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Crack the buying group Da Vinci Code at Meet the Buyers

WORLD HEADQUARTERS–Quiz: What do TruServ Canada; CanWel, Hardware Division; TIM-BR MART; ILDC; SpanCan; and IHDA have in common? If you are like a lot of vendors watching Canada's key groups shift and consolidate, you want answers to build your sales. That's why the alliance of TruServ Canada and CanWel, Hardware Division, called Pro Retail Services, will participate in the upcoming Meet the Buyers Seminars, with a full complement of buyers at both locations: Toronto and Montreal. The Montreal Meet the Buyers Seminar is being held April 5, 2006 in association with Donald O'Hara of the Quebec building materials association, ADMACQ. This event is quickly gaining momentum as the lineup of buyers keeps growing. Claude Chalifour, senior director, merchandising, CanWel, Hardware Division, will present, and be joined by Leslie Cunningham, category manager, seasonal; Stephan Fradette, category manager, plumbing; and Louise Bergeron, category manager, electrical. Chalifour, Fradette, and Stephane Picard, category manager, hardware and fasteners, will also sit in on the Toronto session, on April 3. They will support Tony DiEmanuele, vice-president business development and growth for TruServ Canada. BMR Le Groupe, which is aggressively expanding its reach in an effort to become a national buying group and wholesaler, will feature Dunc Wilson, director, who overseas hardware buying, presenting in Toronto. But he'll be joined by Christian Nadeau, director, who is in charge of LBM purchases for the group. In Montreal, Nadeau will present and Wilson will sit in. Also at this year's Meet the Buyers Seminar in Toronto: Eric Cantin, Merchandiser for Paint, RONA inc.; and Gino Digioacchino, Director of Merchandising Hardlines, Home Depot. In Montreal, Roger Plamondon, vice-president, Canada East, Home Depot Canada (shown here); and RONA's Eric Cantin. To sign up for Meet the Buyers, contact Isabel here at the World Headquarters: 416-489-3396, or Isabel@hardlines.ca.

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Lowe's to extend its distribution network

HENDERSON, Colo.–Lowe's Cos. plans to spend between $10 million and $15 million to retrofit a former Transportation Management Services distribution facility that the retailer plans to use as a distribution center of its own serving more than 45 stores it operates in the western U.S. The Mooresville, N.C.–based retailer has started retrofitting the 200,000-sq.ft. facility, which is on 19 acres, and expects to start shipping products from it to its stores by July. According to a prepared statement, the flatbed center will receive rail and truck shipments of lumber and building materials that will be quickly loaded onto flatbed trucks for shipment to stores in Colorado, Wyoming, South Dakota, Utah, Idaho, Montana and New Mexico. The Colorado DC will represent Lowe's 14th flatbed facility in the U.S.

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Sears Holdings off marginally in 2005

HOFFMAN ESTATES, Ill.–The combination of Sears and Kmart has yet to ignite sparks on the balance sheet of Sears Holdings, the corporation formed by that merger, which occurred a year ago and now includes 2,300 full-line and 1,100 specialty stores in the U.S., and 370 full-line department stores in Canada. In its fourth quarter, profits more than doubled to $648 million. Other results were more mixed: revenue dropped to $16.1 billion in the quarter, from $16.8 billion a year earlier. Same-store sales dropped by 12% at Sears stores, and were up only 0.9% at Kmart stores even though that marked the first increase in same-store sales in four years. In a pro-forma statement that aggregates the two companies' financial reports for the last two years, Sears Holdings said that its revenue for the year ended Jan. 28, 2006 fell by 3% to $54.26 billion. The company's combined net income for the year was down 10.7% to $789 million. As of Jan. 28, the corporation had $31 billion in assets and $12 billion in equity. Its total debt, excluding capital lease obligations, was $3.2 billion, and its inventory was valued at $9.1 billion, down slightly from $9.3 billion in the same period a year ago. The company also cut back on its capital expenditures, which totaled $546 million in fiscal 2005, from $1.1 billion for the two companies in 2004. But in December, Sears Holding agreed to acquire the remaining 46% in Sears Canada it didn't own already. Its takeover bid started in February 2006.

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New study pegs size of lumber wholesale industry

There are 5,500 lumber wholesalers in the United States that, in 2005, generated a combined US$65 billion in revenue, according to a new quarterly report on that industry sector that's recently been made available by Research and Markets, a Dublin, Ireland-based company that touts itself as the world's largest market research source. The 10-page report, which is being sold for 138 euros (US$167.70; CD$193.26), notes that the industry's 60 largest wholesalers led by the 63-branch Georgia-Pacific with annual sales exceeding $100 million, control about half the market. The report also notes that about 900 of these companies generate more than $10 million in sales per year. Lumber wholesalers of all sizes have benefited mightily from the growth in new-home construction, which hit another record level in the U.S. last year. More information about the report is available at http://www.researchandmarkets.com/reports/c34418.

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