New Quebec buying group looks beyond core membership

MONTREAL — A buying group comprised of Pro and Ace dealers in Quebec is growing gradually, and opening its doors to other potential members, including unaffiliated dealers and those from other banners. Groupe Mat Plus emerged last September from the restructuring of Servimat, the LBM division in Quebec of CanWel, Hardware Division. At that time, Servimat’s director of lumber, Daniel Thibault, left Servimat, which was itself restructured. (It now continues under another CanWel operation, Chalifour. Thibault is now general manager of Mat Plus.) When Mat Plus was created, it was the brainchild of just four dealers, including Carl Strulovitch of Probex Building Supplies in Roxboro. Shortly after its formation, the group had to pitch its offering in a series of regional meetings to roughly 180 other former Servimat customers, mainly Pro and Ace affiliates. They all came on board, says Strulovich. “They saw it as a positive move.” The deal makes even more sense given Mat Plus’s further affiliation with Calgary-based TIM-BR MARTS Ltd. In fact, the addition of Mat Plus gives TIM-BR MARTS a foothold in Quebec. That province had represented a gap in the group’s coverage of the country since it split in fall 2005 with Longueuil-based Groupe BMR. Formerly, BMR and TIM-BR MARTS had an alliance under the umbrella buying group Matreco. “So now we have the best of both worlds,” Strulovich adds. “It’s a win-win situation.”

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Atlantic Canada looks for growth in renos in 2007

MONCTON, N.B. — While homebuilders and contractors in Eastern Canada are expected to feel the effects of the softening housing market in 2007, the industry is betting that renovation construction will contribute to a healthy year, according to Don Sherwood, president of the Atlantic Building Supply Dealers Association. (See story below re: Canadians’ renovation intentions.) “On the business side of things, I sense the retailers are very positive and are stocking up on their inventories,” says Sherwood. “Some did complain about just-in-time inventory practices among wholesalers as they watch their turns closely. And so dealers are forced to source from more than one supplier, as price volatility is so high. “What we’re spotting there, as commodities move around a bit, is the wholesalers being a little cautious.” “We still see 2007 to be a reasonable year, and most dealers are budgeting increases of between 3% and 5%. But the business is moving more and more from new housing to the renovation market in Atlantic Canada.” The focus there will be on improving gross margin and getting away from buying business simply on price, adds Sherwood.

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Big U.S. building products distributor sets up shop in Canada

MISSISSAUGA, Ont. — PrimeSource Building Products Inc., a major U.S. distributor with 34 warehouses across the country, is setting up shop in Canada. Like a number of U.S. suppliers, the market north of the border has garnered increased attention with the expansion of Lowe’s here. PrimeSource is already listed in the U.S. with majors such as Lowe’s and Home Depot. Now it wants their business in Canada, which represents a market roughly the size of California. PrimeSource has a foothold in Canada already. It’s managed to get listed with Lowe’s Canada. To get ready for that business, and the anticipated business from other key customers, a new facility is being readied in Mississauga, Ont. The 120,000-square-foot office and distribution centre will start accepting product by April or early May, says Phil Brown, general manager of PrimeSource for Canada. Brown, who was formerly general manager for Weyerhaeuser in Ontario, expects to start pushing PrimeSource’s presence in Canada aggressively once the distribution is in place. PrimeSource specializes in fasteners, but also has a private-label lines of tools, including pneumatics, plus a full assortment of building products. Customers include traditional building centres, and a specialty tool and fastener dealers.

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New study: bath renos top the list for Canadian homeowners

TORONTO — More than one in four Canadian households (27%) say they plan to do home renovation and/or remodeling work during 2007, according to a new survey by global market research firm Synovate. Activity will be greatest in Atlantic Canada and the Prairies, where one-third of all households report their intention to fix up homes. This means that up to 3.5 million Canadian households could be upgrading their homes this year. These improvements include anything from installing new bathroom fixtures to upgrading the kitchen or creating additional living space by finishing the basement. But the bathroom was the most popular reno, cited by nearly half of all Canadians surveyed. Among those planning bathroom renovations, the most popular items include new faucets (54%), sinks (49%), and lighting (49%), followed by bathroom cabinets (44%), vanity areas (40%), shower heads (40%) and bathtubs/whirlpools (34%).

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U.S. moulding distributor follows Lowe’s to Canada

ZEELAND, Mich. — Empire Co., one of America’s largest regional distributors of moulding and other millwork products, will distribute outside of the United States for the first time as a supplier for Lowe’s Cos., the warehouse retailer that is gearing up to open its first dozen stores in Ontario. Empire has sold to Lowe’s for more than a decade, and will likely distribute to that dealer’s Canadian operations from its 200,000-square-foot plant in Zeeland, one of seven facilities it operates in the U.S., according to the Grand Rapids (Mich.) Press. Tom Highley, Empire’s president, told the newspaper that following Lowe’s north could reap big dividends for his company down the road, as Lowe’s has been talking about placing 100 stores here eventually. He added that this move is part of his company’s larger strategy to expand its market penetration through home centres and pro dealers.

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Loblaw posts first annual loss in 19 years

TORONTO, Ont. — While Loblaw Cos. lost $219 million in 2006, sales of general merchandise, which includes housewares, posted gains over the prior year across all regions of the country. The company cited lack of “structural agility and vigour to address its changing environment”, along with losses connected to the closure of 19 stores in Quebec as factors contributing to the poor performance. Its annual report also identified changes in how food retailers compete and in consumer habits as obstacles to success over the last fiscal year, adding that the company’s own structure also hindered growth, because it was “more complex and less responsive than it should have been.” The company also alluded to problems related to restructuring in 2005, which saw the reorganization of merchandising, procurement and operations groups, the establishment of a new national head office and store support centre in Brampton, Ontario, and the relocation of general merchandise operations from Calgary to that centre. But those changes proved problematic, disrupting inventories and adding costs—issues the company says have now been resolved. Moving forward, Loblaw says it will open fewer stores with smaller footprints and cut prices on food. It will also increase its product mix of the President's Choice brand to 35% from 25% and pump $50 million into its promotion. Increased focus will also be put on the Joe Fresh apparel line, which the retailer expects to grow into a $1 billion business within two years. It has also recently launched a marketing campaign to increase visibility of apparel and home-related products among the home improvement media.

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