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Michael McLarney, Editor & President
mike@hardlines.caBeverly Allen, Publisher
bev@hardlines.caJohn Caulfield, Contributing Editor
Phone: 416-489-3396
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March 23, 2009, Volume xv, #12 |
In This Issue:
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“Men are the only animals who devote themselves assiduously to making one another unhappy.” —H.L. Mencken (American editor and essayist, 1880-1956) |
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Anti-competition legislation may challenge buying groups | |||||||||||||||||||||||||||
SPECIAL REPORT — When the Conservative Government put through its latest budget bill on March 13, an amendment to the Competition Act was put through at the same time. That new legislation, which takes aim at price-fixing cartels, may have caught buying groups in its cross-hairs.The major revision to the law that could affect this industry is the one that states that agreements between competitors “that relate to fixing prices, allocating customers or markets, or agreeing on supply will be illegal regardless of the effects on competition.” In other words, even if the group’s collective buying efforts do not have an impact on the final selling price to their customers, the buying group arrangement could come under scrutiny.
“The Competition Bureau looks upstream and downstream,” says Richard Annan, Counsel for Goodmans LLP in Toronto. In the case of competing buying groups that have joined forces, “it could be problematic.” He adds that his observations do not constitute legal advice, especially as the law has yet to be tested. However, he says as a policy matter, a strong argument could exist for the Bureau to test the buying group arrangement that involves competing groups.
Andrew Battagliotti is general manager of Independent Lumber Dealers Co-operative. This national buying group counts now in its membership some other groups, including Sexton and Delroc, and two co-ops, Federated Co-operatives and Coop fédérée, whose members compete against one another in certain markets nationally. In addition, ILDC is a member, along with another competing group, TIM-BR MART, in the hardware buying group Spancan. He notes that, although the member groups buy together, they have no relation on the selling side and none of the members ever fixes or discusses pricing with another member.
ILDC’s organization was based on an interpretation of the anti-competition law from more than a decade ago. Nevertheless, Battagliotti is doubtful that the revised legislation will have an impact. “I don’t think that either ILDC or Spancan are in any way affected by this.”
However, that may not be enough. “Basically, the policy here is to get at the hardcore cartels that covertly fix prices and allocate customers,” Annan admits, but adds, “The fact that it’s above-board doesn’t necessarily mean it’s legal.”
The latest revisions to the Competition Ace will not be implemented for one year. The delay will enable companies and groups to review their structures and get guidance from the Competition Bureau.
(For a summary of the new bill, click here)
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RONA is “Doing it Right” in newest ad campaign | |||||||||||||||||||||||||||
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B.C. association postpones trade show until next year | |||||||||||||||||||||||||||
SURREY, B.C. — The Building Supply Industry Association of British Columbia, in response to concerns from retail and supplier members throughout the province regarding the current economic conditions in the province, will suspend its annual trade show for one year.According to a release sent out to the members last week, the BSIA board of directors “decided to act in the best interests of the members, and postpone the Westcoast Building & Hardware Show scheduled for May 7-8, 2009.”
The show is rescheduled for May 6-7, 2010, in Penticton.
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Quebec association hosts first-ever conference | |||||||||||||||||||||||||||
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Quebec convention-goers learn about small-store strategies | |||||||||||||||||||||||||||
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“Dream Ace” dealer announces plans to close | |||||||||||||||||||||||||||
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Green building products could yield big sales by 2013 | |||||||||||||||||||||||||||
CLEVELAND — Annual sales of green building materials, which last year hit an estimated $57 billion in the U.S., could shoot up beyond $80 billion within the next five years, according to the latest study of this market by the research firm Freedonia Group, which tracks the shipments and sales of many construction- and home improvement-related products.To achieve that increase, the market for green building materials would need to grow at an annual rate of 7.2 percent. And that growth will undoubtedly hinge on how quickly America’s housing market recovers from its current recession. Freedonia predicts that the rate of growth for green building materials will outpace the growth of construction expenditures in general through 2013. The researcher also foresees faster growth for such “green” products as water-saving plumbing fixtures and energy-efficient electrical items. Freedonia expects demand for such products to increase by double-digit annual rates over the next five years. Freedonia also believes that the greatest gainer could end up being floor coverings made from renewable resources, such as bamboo. The same could be true for concrete made from recycled materials, whose demand Freedonia expects to increase by 8.4 percent per year, to $14.3 billion in 2013. | |||||||||||||||||||||||||||
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NEWS IN BRIEF |
ATLANTA — Home Depot CEO and Chairman Frank Blake discussed recently the slowdown of new store development with company investors, saying that the retailer has “dramatically reduced (its) new store pipeline” in order to focus on improving efficiency and sales at existing stores. Blake spoke at the Bank of America-Merrill Lynch 2009 Consumer Conference and said that Home Depot will open only “a dozen” stores in fiscal 2009; half of those will be located in the United States. The company plans on adding six to seven regional distribution centers in 2009 and completely revamp its distribution system by 2010, Blake says. The year ahead is expected to be a rough one: total sales are expected to decline by 9 percent.EIGHTY FOUR, Pa. — The downsizing continues at 84 Lumber. The national pro dealer closed another six stores last week, a move that affected 50 of its employees. That leaves the company with 304 retail yards nationwide, as well as six component plants. A company spokesman told the Pittsburgh Post-Gazette that the stores were closed in Erie, DuBois and Mount Pocono, Pa., as well as in Vineland, N.J., Crystal Lake, Ill., and West Houston, Tex. As previously reported in Hardlines, 84 Lumber reported a 33 percent decline in its 2008 revenue, to $2.1 billion. MONTMAGNY & DRUMMONDVILLE, Que. — Mercier Wood Flooring has been registered as compliant with the International Standard ISO 9001:2000. Founded in 1980 in Montmagny, Mercier is a hardwood floor designer and manufacturer that has grown by developing leading-edge technological processes. The company has 230 employees. BENTONVILLE, Ark. — Wal-Mart is revamping much of its product line under its Great Value house brand. The private label will benefit from a reformulation of hundreds of grocery and household products as the giant retailer looks for more ways to capture consumer dollars during the downturn. CHANDIGARH, India — Moen India will open two more faucet boutiques in the coming months. The two stores are in Bangalore and Mumbai, which will join 15 other cities in the country that now feature Moen outlets. LONDON — Sales by the U.K. retail group Argos fell 1.6 percent, and its home improvement subsidiary, Homebase, suffered a 10.2 percent drop in sales for the first two months of the year. TORONTO — Loblaw Companies Ltd., the giant Canadian grocery chain, has launched a line of cosmetics under its “Joe Fresh” label. The “collection of stylish and well-priced” cosmetics is called Joe Fresh Beauty and will be available this month in more than 250 stores across Canada. |
HARDLINES Quarterly Report 1Q * How many new home enhancement store formats were introduced to Canada last year? * How many buying groups disappeared last year?![]() |
PEOPLE ON THE MOVE |
Kingfisher plc, Europe’s leading home improvement retailer, has announced that Chairman Peter Jackson will retire after the company’s annual general meeting on June 3, 2009. He has indicated a desire to reduce his business commitments … Daniel Bernard has been selected to take his place as chairman. Bernard is currently deputy chairman of Kingfisher … John Nelson will continue as the senior independent director and become deputy chairman.In memoriam: Bill Davidson, the owner and CEO of the glass and insulation giant Guardian Industries, died on March 13, after a lengthy illness, at the age of 86 in his home in Bloomfield Hills, Mich. During his 52 years with the company, Davidson helped build Guardian into one of the world’s largest manufacturers and distributors of float glass and glass insulation products. Along the way, Guardian acquired the employee-owned distributor Builder Marts of America in 1989 and the national distributor Cameron Ashley Building Products in 2000. Guardian filed for bankruptcy protection in 1957, two years after he became the company’s president. (It emerged from Chapter 11 in 1960.) But he took the company public in 1968, and its shares began trading on the New York Stock Exchange five years later. Davidson oversaw the global expansion of a company that now has 19,000 employees in 21 countries. Davidson’s interests beyond his manufacturing businesses included his ownership of the Detroit Pistons professional basketball team. (Davidson was inducted into the NBA’s Hall of Fame last September.) He also owned the Detroit Shock in the WNBA and until last year owned the Tampa Bay Lightning professional hockey team. As a philanthropist, Davidson reportedly gave away more than $80 million of his wealth. Recipients included the University of Michigan, where he was one of its largest donors. Today, the centerpiece of the college’s new Ross School of Business facility bears his name: The Davidson Winter Garden. 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 mike@hardlines.ca. We reserve the right to edit items for length.—Michael |
ECONOMIC INDICATORS |
Retail sales rose 1.9 percent in January to $33.7 billion, after declining 5.2 percent in December. Sales rose in five of the eight retail sectors, led by a 3.8 percent increase in the automotive sector (+6.4 percent). However, two sectors registered sales declines in January —building and home supplies stores fell 1.4 percent, while sales at furniture, home furnishings and electronics stores were down 0.7 percent. (Stats Canada)The Consumer Price Index rose 1.4 percent in February from the same month a year earlier, up from the 1.1 percent increase in January. Food and shelter costs were the main culprits, with food prices up 7.4 percent. Shelter costs increased 3.0 percent. However, gasoline prices were down 19.7 percent from February last year. (Stats Canada) Wholesale sales declined 4.2 percent to $41.1 billion in current dollars in January. Lower activity in the automotive products sector was a major factor behind the decrease. Excluding the automotive products sector, which fell 22.9 percent, wholesale sales fell only 0.9 percent. However, the building materials sector was down by 6.2 percent. (Stats Canada) Manufacturing sales decreased 5.4 percent to $41.7 billion in January, falling to the lowest level in almost 10 years. The auto industries, particularly in Ontario, reported record decreases during the month. Excluding motor vehicles, parts, and accessories, manufacturing sales decreased by a more moderate 1.2 percent compared with December. (Stats Canada) |
NOTED... |
The Worldwide DIY Council will host a seminar on May 4th, the day before the National Hardware Show in Las Vegas. With speakers from Ace Hardware, Arrow Fasteners, DAP and Asia Inroads, the program is designed to get members and guests in tune to the very latest hardware business climate around the world. The program will begin at 4 p.m. in room N231 at the Las Vegas Convention Center and a cocktail and hot buffet reception will follow at 7 p.m. in room N233. Cost for members of the Council is $100 per person and $150 for non-members.On May 7, the Worldwide DIY Council will again host its annual retail store bus tour for international visitors to the National Hardware Show. The tour will include visits to an Ace Hardware Store, a Home Depot, a Lowe’s, a Wal-Mart, and a large building supply store. A cocktail reception will follow. Cost is $100 per person for international visitors and Council members; $150 for others. For more information and to register, contact Don Droesch at ddroesch@cox.net. |
Industry Resumés |
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A sales leader experienced in coaching, managing and developing sales teams. Click here to download this resumé |
A high energy, results oriented, hands on sales professional with proven successes. A leader and team player , able to get the job done. Click here to download this resumé |
Results-oriented, charismatic and confident female for Account Management in the Calgary area. Inherent aptitude and seven renovation projects under belt ensures industry product knowledge. Click here to download this resumé |
A problem solving Sales and Marketing Manager with over 25 Years of marketing, sales and communication experience with major retail, industrial and automotive accounts in Canada. Click here to download this resumé |
LBM and home improvement industry specialist looking for a position that he can add value to the corporation or buying group. Click here to download this resumé |
Accomplished strategic marketing management professional and team leader who leverages strong interpersonal skills, flexibility and teamwork to achieve business objectives. Click here to download this resumé |
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I am an accomplished sales professional and solution-oriented person who thrives in challenging, fast paced environments where my performance directly impacts the bottom line. Click here to download this resumé |
Experienced Sales Accounts Manager - Senior Buyer with 20 years of knowledge and contacts in the building supply industry. Click here to download this resumé |
Enthusiastic, versatile buyer/category manager with experience in sourcing a wide assortment of goods and services. Click here to download this resumé |
Entrepreneurially focused, front-line retail marketing professional with organizational and strategic marketing talents. Click here to download this resumé |
Seasoned Territory Manager - skilled in building and maintaining customer relationships in the retail building supply channel and industrial tooling & consumables sector. Click here to download this resumé |
Well respected Sales Professional, established relationships in Mid West and South West Ontario. An excellent team player who achieves ongoing success with peers and customers. Click here to download this resumé |
Strategic Sales and Marketing Executive available to achieve your top line and bottom line results during these challenging economic times…..If it is leadership, entrepreneurial spirit and passion you seek, look no further. Click here to download this resumé |
Sales professional - established relationships with key clients in the hardware, building materials, and paint industries, team player, superior business development skills, competitive, enjoys challenges. Click here to download this resumé |
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