Castle names new vice-president

MISSISSAUGA, Ont.–Castle Building Centres Group has completed its search for a new executive within its ranks. Ken Jenkins has been named vice-president, effective Monday, March 27, 2006. Jenkins was formerly at CGC, most recently in charge of the development, negotiation and management of that supplier's national customer buying programs. He will report to Provan Wylie, president of Castle, in a role that is being considered a succession position to the president's job. Jenkins will work alongside Wylie over the coming months as the incumbent prepares for retirement. In a prepared release to members last week, Wylie pointed out that Jenkins' appointment "was the unanimous choice and has the full support of the board of directors." In his new role, Jenkins will be responsible for the leadership and direction of marketing and growth. This will include the responsibility for specific objectives to market products to Castle members to grow their existing businesses, as well as growth through the acquisition of new members.

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Dealers pick up Castle's new look

MISSISSAUGA, Ont.–A new store design and image program for Castle dealers is quickly evolving past the prototype stage, as dealers line up to adopt the new look for their own operations. The program, which extends to everything from retail footprint, colour scheme, displays and signage to building design and yard layout, was first installed in the Castle outlet in Windsor, Ont. But that store is larger than the average Castle outlet (at 24,000 sq.ft.). Now, a second store is close to completion, this one in Sturgeon Falls, Ont. The 8,500-sq.ft. store is more typical of the buying group's membership, and gives them a clear template for their own stores. The program was developed by Burlington Merchandising Group, a store design and branding team that includes ex-RONA vice-president Rob Wilbrink and Phil Dwyer, former director of operations for RONA Cashway. The program aims to provide a cohesive look to the Castle brand, while enabling individual member stores to retain those features of their operations that suit them to their respective markets. BMF is also doing work outside the home improvement industry, including developing new Nike departments inside 10 SportChek stores across Canada. The Sturgeon Falls Castle store will have a grand opening in May, and other stores will follow in rapid succession, says Wilbrink. A ground-up store in Morinville, Alta. will open later this week, followed by a number of new and existing stores that will all begin re-merchandising by the fall. "We have close to 50 stores that have signed on to the program and I'm sure that as the dealers see what we've done in Sturgeon Falls, more will want to sign on," he adds.

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TIM-BR MART's consolidation creates $2 billion buying machine

CALGARY–Consolidation over the past year within the ranks of Canada's LBM buying groups has put one group firmly on top. TIM-BR MARTS Ltd. has managed to combine the operations of three other groups–TIM-BR MART Ontario, AWARD in Atlantic Canada, and a relatively new group for gypsum supply dealers called The Signature Group–within the past two years. The result is a behemoth that now represents close to $2 billion in building materials sales annually. But TIM-BR MART has not stopped there. It has also forged deals with other groups, including a supply agreement with CanWel, Hardware Division. Another alliance, with rival buying group ILDC, finds it negotiating alongside a competing organization. Nevertheless, both sides consider the new group, Independent Hardware Dealers Association, to be nothing less than a play to strengthen the independents as they compete against the likes of Home Depot and RONA. As a result, TIM-BR MART's director of purchasing for hardware and building materials, Randy Martin, believes the industry needs to understand the weight of TIM-BR MART's presence in the industry and the ins and outs of its partnership under IHDA. That's why Martin will speak at the upcoming Meet the Buyers Seminar being held in Toronto by HARDLINES. "Given the way TIM-BR MART has evolved over the past several months, we believe it's important that we are present at this Meet the Buyers to explain how we go to market," says Martin. He adds that vendors need to recognize the power of the independent in home improvement retailing. "The combined sales of TIM-BR MART dealers this year should reach $1.7 billion," he says, to underline his point. The date of the HARDLINES Meet the Buyers Seminar in Toronto is April 3, 2005. For more info, click here or contact Isabel Bisong at the World Headquarters: isabel@hardlines.ca.

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CanWel's sales grow despite weak commodity market in '05

VANCOUVER–CanWel Building Materials Income Fund reported its results for the three-month and full year periods ended December 31, 2005. For the fourth quarter, revenues increased by 61% to $205.5 million, from $128 million for the same period in 2004. Gross margin for the quarter was 12.3%, or $25.3 million, versus 9.0% or $11.5 million in 2004. (For year-over-year comparison purposes, fiscal 2005 results include the effect of the acquisition of Sodisco-Howden Group in February 2005.) For the twelve-month period, revenues increased by 68% to $1.0 billion, compared with $598 million in 2004. During the period, the Fund's percentage of sales of lumber and panel products increased by 8.5%, but decreased as a percentage of total sales from 63% to 41% in 2005. This sales increase was accomplished despite the average price of lumber decreasing approximately 13% and the average price of panel products decreasing approximately 25% in 2005. Specialty and hardware product sales also increased on a year-over-year basis to $593 million, representing a 167% increase. "Despite the weak commodity environment in 2005, we managed to grow the top line, and fully integrate the Sodisco-Howden acquisition," said Tom Donaldson, president and CEO of CanWel Building Material Income Fund. "We have completed all the necessary realignments and created an efficient, scalable infrastructure which will allow CanWel to better leverage its position as a leading national distributor of building materials." Gross margin for the year was 10.2% or $102.1 million versus 10.0% or $59.6 million in 2004. The lower than expected gross margins on lumber and panel products, increased one-time expenses associated with the trust reorganization, and costs associated with the Sodisco-Howden integration combined to reduce operating earnings to $18.1 million compared to $19.5 million in fiscal 2004.

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True Value asks what's in a name?

CHICAGO–The dealer-owned buying group True Value Hardware is banking on a new slogan and branding program to re-position its members' stores against big-box competition. In what its CEO, Lyle Heidemann called "a new start," True Value has launched a marketing campaign with the goal of raising its dealers' profiles with DIYers, and getting them to shop in those stores more frequently. The campaign offers a national advertising program with a new tagline, "True Value: Start Right. Start Here," that will support local marketing and promotional efforts. "We're trying to now not [just] survive but in essence put together a strategy for growth," Heidemann told the Associated Press in an interview at True Value's headquarters. "The biggest difference is that we're focused on retail versus wholesale." He went on to say that the company's marketing will be geared toward winning home-repair and small-project customers away from larger retailers such as Home Depot and Lowe's. To do that, the company will emphasize its members' product assortment, convenience and lower prices. Time will tell how True Value's latest marketing program will differ from what's already in place, but the co-op apparently will place considerably more emphasis on its private-label and proprietary products. In an address to members at the co-op's recent buying show in Houston, its chief merchant Steve Mahurin (a former Home Depot exec), noted that the company continues to review all category lines with an eye toward reducing wholesale prices to its membership. In several cases, that's meant bringing on imported lines that members can sell under the co-op's brands.

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Home Depot to fund eco-wood registry

ATLANTA–The Home Depot Foundation, the philanthropic arm of Home Depot, has awarded the Forest Stewardship Council a two-year grant of $380,000 to develop a "global forestry registry" that would help companies selling wood products to find sources that are harvesting forests in a sustainable manner. However, the announcement's timing is somewhat vexed: a report has come out almost simultaneously uncovering practices by both Home Depot and Lowe's to sell illegally harvested hardwood. Nevertheless, since 1999, Home Depot has been striving to purchase wood products that come from suppliers practicing sustainable harvesting practices outlined by FSC. The weight that Home Depot threw behind this effort eventually prompted most of its major competitors to make changes in their own wood-purchasing policies. "The global forestry industry has made tremendous strides during the past several years, and the development of this global registry clearly is the next step in ensuring socially responsible procurement," said Ron Jarvis, Depot's vp-merchandising, in a prepared statement. However, the industry's appetite for lumber isn't always sated in environmentally friendly ways: a report published last week by the Environmental Investigation Agency and its partner in Indonesia, Telepak, accused Home Depot and several other dealers, including Lowe's, of selling a wood flooring called merbau, harvested from rainforests in Indonesia's Papua province, that is logged illegally and trafficked by criminal syndicates into the U.S. Home Depot Canada discontinued selling the Indonesian merbau more than a year ago.

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Labor shortages hamper construction industry

SPECIAL REPORT–Shortages of skilled trades in developed countries are putting pressure on building and renovation activity. And it's being felt in nations as far apart as the U.K. and Canada. Efforts by DIY retailer B&Q to expand its range of installed services has it looking to Poland for manpower. B&Q, which is part of Kingfisher plc, is the U.K.'s largest DIY home improvement retailer. It already offers kitchen and bath installations, and has recently added painting and decorating to its service offerings. However, a shortage of experienced workers is making the program tough to execute. Therefore, it would like to bring in thousands of them from Poland–a move that has domestic trades up in arms. In Canada, builders have opposed a proposed move by the federal government to crack down on illegal immigrants. According to the Toronto Star, workers, many of them illegal, from Portugal and other countries, are proving vital to the country's burgeoning building industry.

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