| CANADA NIGHT IN COLOGNE - A BIG HIT AT PRACTICAL WORLD |
 Hardlines once again hosted a party in Cologne last week and just about every Canuck who was in town for the International Hardware Fair joined us for food and drink! Bev's in charge of this one, and this year she held it at a really cool nightclub right next to the fair grounds. More than 80 people, including guests from England, France, Germany and the U.S., joined in the fun. Our thanks to the Cologne Trade Fair organization for their generous support!
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| KINGFISHER SEEKS BUYER FOR MONEY-MAKING RÉNO-DÉPÔT |
 Montréal & London, UK — Kingfisher plc, the world's number-three home improvement retailer, reported a year-end profit increase of 24.0% to $1.25 billion within its home improvement division on retail sales of $13.5 billion, up 15.8% from the previous year. The company has also confirmed it's looking for a buyer for its big box chain in Canada, Réno-Dépôt. Kingfisher had previously announced its intention to expand only in markets where it can be the number-one or two player. In Canada, Réno-Dépôt is the number-three big box chain, following Home Depot Canada and Rona Inc.
Kingfisher confirms "it is pursuing exit options for Canada," which means simply that they're looking for a buyer. However, the decision to unload Réno-Dépôt was not based on the company's performance. In fact, the 20-store chain is the only profitable division among those being cut. Sales for Réno-Dépôt in the 2002-2003 fiscal year ended February 1, 2003 reached $829 million, with profits jumping to $21.3 million from $16.0 million a year earlier.
Rather, the company, which bought up Castorama last year and has more than 600 stores worldwide, wants to focus on Europe, mainly Poland and Italy, as well as the far east, particularly South Korea. The other countries Kingfisher will exit all comprise Castorama stores. Its other market in the Americas, Brazil, has three, while Belgium has two and Germany 61.
 Meanwhile, it's business as usual at Réno-Dépôt, which is launching a $4.5 million ad campaign this month on radio and TV in both English and French. The French-language campaign employs the slogan, "Si ça existait, on l'aurait!," which translates roughly as "If it existed, we'd have it!" In Ontario, where it has six stores under the Building Box banner, Réno-Dépôt will resurrect the comical mascot, "Hammerhead" and the slogan, "There's more in the box."
The company has no plans to announce further store openings at this time. Paul Hétu, vice-president advertising and communications at Réno-Dépôt in Montréal, says the company will continue to focus on its DIY and light trade customer, stressing the company's distinction as a traditional big box format that emphasizes a broad product mix. "Réno-Dépôt stands for selection," he says.
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| RONA LAUNCHES AGGRESSIVE MARKETING CAMPAIGN |
| Boucherville, QC — Rona Inc. will launch the biggest marketing campaign of its history this Spring, combining television, radio, Internet and print advertising, the production of more than 240 million flyers to nine million homes, in-store banners, targeted sponsorships and public relations. The Canada-wide initiative, in both English and French, will cost more than $60 million and is designed to consolidate the company's positioning after the acquisitions and rebranding of the Revy, Revelstoke, Cashway and Lansing banners in Ontario and Western Canada. Rona completed the conversion of its Revy and Revelstoke stores in Western Canada last Friday. All interior and exterior signage has been changed to Rona, but the Rona Revy name will appear on flyers and be used by staff when answering phones for a few more months. "We don't want to create confusion for the consumer," says Sylvain Morissette, Rona's director of communications.
Rona currently operates more than 525 corporate, franchised and affiliated stores in Canada totaling in excess of 10 million sq.ft. The retailer has about 16,000 staff nationwide.
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| SASKATOON DEALER'S SON CADDIES FOR THE STARS |
Pebble Beach, CA — Amidst a lineup of big stars that included Kevin Costner, James Woods and Ray Romano, a kid who works in a lumberyard in Saskatoon got the chance of a lifetime to caddie at the recent Celebrity Shootout at the annual AT&T National Pro Am. Rob Neufeld, a 16-year-old Grade 11 student, and son of Don Neufeld, co-owner of J&H Builders Warehouse, was caddie for comic actor Bill Murray.  They hit it off in more ways than one, as Murray told Rob that he too worked in his dad's lumber, as a youth growing up in Chicago. Murray also gave Rob important tips on everything from golfing to … spitting properly in front of the crowds. Rob recently survived cancer that robbed him of sight in one eye. |
| LIQUIDATION SALES CATCH ON WITH MAINSTREAM RETAILERS |
| Toronto, ON — More and more conventional retailers are relying on discounted goods and special buys. Hudson's Bay Co. began selling end-of-line items and cancelled order goods last year, along with regularly priced merchandise, across the company's three banners - The Bay, Zellers and Home Outfitters. More recently, Canada's largest grocer, Loblaw Cos., announced a pilot project to sell "dollar store" non-food items in selected No Frills stores in Ontario, and in Maxi outlets in Québec. The project, which is being rolled out over the next few weeks, is part of a company-wide push to expand categories. In Western Canada, the chain has added jewellery to its Real Canadian Superstores, while three Toronto-area locations have begun selling designer jeans. Electronics, health and beauty aids, housewares and linen departments have already become regular features in larger Loblaws stores.
In the home improvement industry, retailers have dabbled in closeouts with mixed success over the years. Lumber Guys, a privately held chain with nine stores in Toronto, relied on closeouts in its final years as it attempted unsuccessfully to compete against the incursion of big boxes. |
|
COMPANY |
52-WEEK HIGH |
52-WEEK LOW |
CLOSE (FRIDAY) |
| Canadian Tire |
33.65 |
26.80 |
31.15 |
| Canfor |
11.70 |
6.83 |
9.55 |
| Costco |
43.05 |
27.00 |
31.23 |
| Emco |
16.90 |
8.05 |
16.52 |
| Goodfellow |
13.99 |
9.88 |
11.00 |
| Home Depot |
50.46 |
20.10 |
25.78 |
| Hudson's Bay |
15.55 |
5.87 |
8.81 |
| Lowe's Cos. |
49.99 |
32.50 |
42.54 |
| Rona Inc. |
14.75 |
11.75 |
13.85 |
| Sears Canada |
25.10 |
13.60 |
15.75 |
| Sodisco-Howden |
2.07 |
1.06 |
1.41 |
| Taiga Forest |
7.00 |
5.75 |
6.75 |
| Wal-Mart |
63.44 |
43.72 |
54.67 |
| West Fraser |
40.38 |
26.27 |
35.50 |
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| NOTED… |
| Nearly one in five gardeners admit they secretly prefer gardening to being intimate with their partners. Women are twice as likely (23%) as men (12%) to pick plants over partners, says a new survey commissioned by HGTV Canada. (Yikes — MM) |
| PEOPLE ON THE MOVE |
 Léo Charrière has been named CEO of TruServ Canada Cooperative Inc., in addition to his title as president of the company. Charrière joined TruServ in 1982 as assistant controller and named controller in 1987. He moved through the ranks, holding various titles, including vice-president finance and administration and vice-president business development. In 2000, he was appointed COO and became president in 2002. (204-453-9511) At the recent annual general meeting of the Building Supply Dealers Association of British Columbia, the 2003-2004 board of directors were presented: chairperson is Carole Hamanishi, Wilway Lumber Sales Inc., Abbotsford … Directors: Terry Crofford, Rona Inc., Langley; Dave Flaig, Park Pacific Lumberworld Ltd., Victoria; Bob Grant, Windsor Plywood, Coquitlam; Rick Mielke, Summerland Home Hardware, Summerland; Jim Ramsden, Dryco Building Supplies Ltd., Langley; Leah Ratz and Norm Williams, Cameron Ashley Building Products, Delta. (604-513-2205) |
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| COMPANIES IN THE NEWS |
| Boucherville, QC — Rona Inc. will begin construction of a distribution centre in Western Canada in May 2003. Located in Southeast Calgary, AB at the corner of 23rd Ave. and 60th St., the 300,000-sq.ft. facility will be built at a cost of $30 million. The state-of-the-art warehouse will house 28,000 SKUs with a capacity for 25,000 pallets. It's expected to open by January 2004.
Surrey, BC — The WestCoast 2003 trade show and convention drew almost 10% more delegates this year, representing 18.3% more retail outlets than last year. The event, put on by the BSDA of B.C., was held March 13-14 in the Vancouver Convention & Exhibition Centre and the Delta Pinnacle Harbourview Hotel and Conference Centre.
Toronto, ON — Canadian Tire Corp. will open six new PartSource stores in Ontario this summer. The addition of six outlets to the company's national chain of auto parts specialty stores will bring the number of Ontario stores to 19. This also brings PartSource's national total to 39 stores. Three of the 7,200-sq.ft stores will be introduced in Ottawa, two in London and one in Sarnia.
Atlanta, GA — The supremacy of Sears as the leading large appliance retailer in the U.S. is being challenged by Lowe's and Home Depot. Lowe's managed to nearly double its share of the appliance market in 2002, while Sears's share slipped from 39.8% to 39%, according to Midwest Research. Home Depot's share climbed to 6% from 3.3%, squeezing Best Buy out of the number-three spot.
Eighty Four, PA — 84 Lumber, the sixth-largest home improvement retailer in the U.S., will sustain its aggressive store expansion strategy of the past few years with its plans to open 16 stores and two component plants between April 1 and August 5. The company, which gets 80% of its sales from pro customers, is also looking at "several other sites" for possible new-store locations in 2003 beyond those already identified.
Corte Madera, CA — Restoration Hardware reported net sales for fiscal 2002 of US$400.3 million, up 9% from US$366.5 million in fiscal 2001. The company's loss was reduced year over year to US$3.5 million from a net loss of US$35.8 million. Same-store sales increased 6%. Net earnings for the fourth quarter were US$9.7 million, up from a net loss of US$12.0 million in 4Q 2001. Net sales for the fourth quarter were US$155.1 million, up 7% from US$144.4 million. Same-store sales for the fourth quarter increased 3%.
Troy, MI — Kmart faces the closing of 316 stores in 44 U.S. states over the next few weeks, as it tries to restructure under bankruptcy protection. The cuts will result in the loss of about 32,000 jobs.
New York, NY — Despite the plethora of home decorating shows on television, Sears Roebuck has decided to throw its hat into the ring. Together with WE: Women's Entertainment, a "women's interest" cable network, Sears will build a 2,500-sq.ft. house worth upwards of US$1.5 million in Long Island's ritzy East End neighborhood. The show, called "She House," will appear Friday nights from July 11 and the house will ultimately be given away in a draw.
Shanghai, China — Wal-Mart wants to break into China's wealthy east coast, and is in talks with a Chinese property developer to lease space in Shanghai. Wal-Mart already has 26 outlets in China, but they're mainly in the north and south. Entry into Shanghai will put Wal-Mart up against France's Carrefour and Germany's Metro AG.
London, UK — Wal-Mart is anxious to expand into the UK and it wants to buy the supermarket chain Safeway in order to do so. However, bids are being referred to the Competition Commission. The Office of Fair Trading is also reviewing bids from rivals Tesco, Sainsbury's and Morrisons, plus a bid from the retail entrepreneur Philip Green. |
| MARKET INDICATORS |
| Wholesale sales of goods and services rose for the eighth consecutive month in January, increasing 1.8% to $36.7 billion. This has been the longest period of growth since 1998-1999, says Statistics Canada. Despite the weakness of the U.S. economy, which is a major market for Canadian wholesalers, wholesale sales have remained strong in the Canadian market. U.S. wholesalers, on the other hand, posted an increase of only 0.6% in January.
The Consumer Price Index increased 4.6% from February 2002 to February 2003. Energy prices, and especially gasoline prices, were the main factor behind the rise. This is the highest increase in inflation since 1991.
A survey of real estate agents reveals that the biggest point of concern for a new home buyer is the kitchen. The survey discovered that 88% per cent of real estate agents identify the kitchen as the room primarily looked at by homebuyers, followed by living rooms, master bedrooms and bathrooms. The survey was mounted to identify the big renovation question of which rooms best enhance resale value.
Canada's composite leading index grew by 0.7% in February, the largest gain in seven months, says Stats Canada. The increase was driven by housing, which rebounded strongly in February after a brief dip the month before. Multiple housing starts were especially strong, despite cold weather, nearly doubling. Starts of single-family homes recovered almost all of their retreat in January. Spurred by the gains in housing, furniture and appliance sales recorded their largest increase in nine months. The U.S. leading indicator began the new year with a 0.1% increase, but, unlike Canada, there were only limited gains outside of the financial market components.
U.S. housing starts fell 11% in February, says the Commerce Department. The drop, to 1.622 million seasonally adjusted in February from 1.822 million in January, constitutes the lowest rate since April 2002 and the biggest decline in nine years. Starts of single-family homes fell about 14% to 1.295 million. For all of 2002, housing remained high by historic standards, with 1.705 million starts, the highest since the mid '70s. |
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vol. ix, 12 March 24, 2003
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