| RETAIL GIANTS SAY "I DO" TO GIFT REGISTRIES |
| SPECIAL REPORT — Two of North America's largest home improvement retailers, Home Depot and Canadian Tire, announced separately last week that they have launched gift registry services — at a time when the institution of marriage is suddenly drawing more attention.Toronto-based Canadian Tire's national wedding gift registry is now available at all 452 of its stores, after being online at its website for a couple of years. The retailer is banking on its diverse product mix — which runs the gamut from housewares and sporting goods to consumer electronics and tools — to lure gift-giving shoppers looking for more choices and selection. According to Jennifer Sexton, a company spokesperson, tools are among the top three purchases newlyweds make within the first 12 months of their marriage.
Customers can set up a registry — which isn't confined to weddings — free of charge. Canadian Tire handles the gift wrapping for online orders.
In the United States, home improvement dealers have been trying to crack into the gift registry market since the late 1980s. Even Home Depot experimented with the service in the past, most recently through its Villager's Hardware stores. But now it's introducing customers to its first-ever online gift registry, which includes 9,000 SKUS of tools, lawn and garden equipment and other home-related merchandise appropriate for special occasions like birthdays, Father's Day and, of course, weddings.
To encourage registration, Home Depot is offering customers a chance to win everything in their registry, up to $4,500 in value. Customers can enter the contest by creating a personal online gift registry at www.homedepot.com. In May, the dealer will choose a winner from each of three registry categories, including weddings, housewarmings and Father's Day.
Last year, US$40 billion were spent on weddings in the U.S., US$6 billion of it on gifts bought through registries, according to Conde Nast Bridal Infobank. In Canada, CD$350 million was spent on wedding gifts alone. And maybe it's just a coincidence, but Home Depot and Canadian Tire are entering this market segment at a time when weddings and marriage are receiving a lot of media attention, and not just because of the gay marriage flap in the U.S. "Significant Others," a television comedy in which actors play four couples in various stages of matrimony, has become a surprise hit for the Bravo cable channel. A new online magazine, called ElegantTouchesEvents.com, which will target brides whose weddings are in the $100,000 range, is scheduled to launch in June. |
| EAST-END TORONTO IS PROPOSED SITE OF HOME DEPOT URBAN STORE |
 TORONTO — Home Depot will open its first "urban" store in Canada when the Park Royal shopping complex opens in Vancouver, probably in October of this year. The store is part of a toney retail development that will include Canadian Tire. The new-format Home Depot will be 50,000 sq.ft., plus a 17,000-sq.ft. mezzanine, making it the first two-level outlet by Home Depot in the country.But Home Depot Canada president Annette Verschuren is anxious to open more, especially across the country in Canada's largest city, Toronto, where real estate is very expensive — and downtown sites difficult to find. A bid to buy Maple Leaf Gardens — right downtown — was withdrawn due to high development costs for the historic site. Another site, which Home Depot has owned for years, is indeed right downtown, and is part of the city's former industrial port lands, a vestige of Toronto's roots as a major port on the Great Lakes. That property became, for a while, a PR nightmare for the company. Not only does it sit on contaminated soil, but it was, for a time, home to an entire community of indigents, and known as "Tent City."
That property will likely end up back in the hands of the city.
Now a location in Toronto's east end, at the Gerrard Square, is one of a few that the company has set its sights on. However, until a deal is signed, no start date for the store will be announced.
An urban store in Calgary has been confirmed though, in the city's North Hills area. It is scheduled to open before the end of this year.
Home Depot has been experimenting with smaller stores in secondary centers such as Owen Sound, Ont., Penticton, B.C., and Trois-Rivières, Que. But the "urban" concept, which is being tested in the U.S. in Brooklyn and Chicago, reduces store size even more, by eliminating large building materials and commodities and beefing up everyday domestic products like storage, cleaning and décor accessories.
Verschuren says Vancouver could support two, or even three, urban stores. As for Toronto, she notes that downtowners are anxious for a store of their own. "Just find me some real estate," she quips. |
| COLOGNE SHOW REPORT PART TWO: SEEKING ALLIANCES |
 COLOGNE, Germany — Even as it searches for ways to stay ahead of the decay that's eating at many trade shows — both in this industry and others — the world's largest hardware show, the Practical World/International Hardware Fair, managed to draw record numbers of people.The most talked-about change has to be the decision by the giant trade fair organization Koelnmesse, which owns Practical World, to operate that show every two years, instead of annually. In fact, many other shows in Europe are already biennial, or even every three years. Somehow, though, the show seemed to survive the blow: attendance this year was up 10% over last year's show, attracting some 74,000 visitors.
Koelnmesse is also looking to forge alliances with organizations worldwide.
One agreement that was somewhat unconventional was its alliance with the National Hardware Show, being held May 10-12 in Las Vegas. Typically, Koelnmesse engages in a financial arrangement with another show, either purchasing it outright or forming a joint venture. For example, PRACTICAL WORLD ASIA represents an agreement between Koelnmesse and the Chinese International Hardware Show, which will host 1,300 exhibitors in 46,000 sq.m. of floor space. More than 40,000 overseas and local trade buyers are expected to visit the show.
The organization sees further opportunity in developing markets such as Eastern Europe to acquire new trade shows.
In the case of the NHS deal, however, the arrangement is much looser, involving joint marketing, promotion and sales. Is it something Koelnmesse will continue into next year, when NHS will be on but Practical World will be in an off year? "It's part of the contract that we see and evaluate the results of our new co-operation," said Hans Kampen onsite at Practical World. However, he expects to continue involvement with NHS into 2005.
Practical World is also looking to more co-operation, including from organizations such as Fediyma, the Federation of DIY Manufacturers Associations in Europe. "We've had some discussions to move their Congress to Cologne in March [in time for the show], from Brussels," said Kampen. This year, the Presidents Council hosted a lunch that featured Paul Hylbert, president and CEO of Lanoga Corp., and Ira Kalish, global director for research at Deloitte Services LP.
 The Hardlines Industry Reception, held on the first evening of the fair, proved for the fourth year running to be a major draw for top buyers internationally. Hosted by Hardlines and sponsored by Koelnmesse, the Reception attracted senior international buyers from Do it Best Corp. and TruServ Corp., as well as buyers from companies such as Canadian Tire Corp. and Co-opérative Fédérée.
Kampen also deflected concerns that the show has been injured by the defection of the big power tool guys, led by Bosch and Black & Decker, who pulled out of this year's show at the last minute. He pointing out that 1,900 tool companies were exhibiting this year, including a dozen leading power tool companies. |
| RONA DEALERS, FLUSH WITH CASH, INVEST IN GROWTH |
 BOUCHERVILLE, QUE. — When Rona Inc. unveiled a new concept last week for its Renovateur banner, the test store was not a corporately owned "laboratory" store. It was a dealer-owned operation. Louis Turcotte is an independent who owns the newly refitted Renovateur in Boucherville, close to Rona's head office and distribution centre.Like many other Rona dealers, who were shareholders before the company went public in November 2002, their stake in the company has grown as Rona stock has risen dramatically. As a result, they represent a new wave of industry growth and consolidation, as they build new stores, or buy out competitors.
 Renovateur, which is being implemented under the Rona Home Centre banner in English-speaking Canada, has a lot of appeal to dealers as a way to improve their front end, appealing to both male and female customers with a blend of big box elements (high ceilings, warehouse-style racking toward the back of the store and in the LBM departments) with the comfort and expertise found in a traditional store.
"Now we have a solution for centres with 25,000-30,000 people, to offer a store with a high level of service combined with a larger selection of goods, all in a presentation that is similar to a big box," says Sylvain Morissette, director of communications at Rona.
But it's just one of the ways that Rona dealers are growing their businesses. Roy Perkins, co-owner of the Rona Home Centre in Cornwall, Ont., used the increased value of his shares to buy out his partners, increasing his stake in the business. "I was able to use the equity that I had in my shares to re-invest in my business," Perkins says. |
| LANOGA FACES CHALLENGE OF BUILDER CONSOLIDATION |
| REDMOND, Wash. — For Lanoga Corp., the huge consolidation that's occurring amidst its prime customer base — home builders — counts as both a challenge and an opportunity.According to Paul Hylbert, president and CEO of Lanoga, the top 10 builders in the United States now control about 25-30% of single-family housing construction — and that clout will only continue to grow. "They have a definite advantage over medium-sized builders when it comes to acquiring land. They have more ability to overcome the difficulties in acquiring title," Hylbert says.
Lanoga had sales last year of $1.96 billion, 80% of that going to contractors, primarily home builders. These customers, says Hylbert, want reliable delivery of both products and services. "We can develop relationships with these builders, who want consistent programs."
As a result, he notes, Lanoga's companies own a lot of the builder business in the West and Northwest, where those stores are primarily located. Lanoga operates under the United, Spenard, Lumbermens, Home and Dixieline and banners. |
| AHMA: WILL CONSIDER MOVING AHMA SHOW FROM CHICAGO |
| CHICAGO — The fledgling AHMA Hardware Show is currently staking its success on its location. As an opening gambit, and a way to differentiate itself from the competing National Hardware Show, the AHMA show will remain in NHS's former location, McCormick Place in Chicago. The show is being held April 18-20.Calling it "the best convention city in the country," AHMA CEO Tim Farrell says his organization has been working hard to lower costs — or eliminate them altogether — to ensure the viability of the host city.
However, would AHMA consider moving the show to another city? "Absolutely," says Farrell. "We're open to investigating other venues."
For now, though, AHMA and Chicago will continue to work together. In fact, the show's dates for next year, April 3-5, 2005, are being heavily promoted along with this year's show, an obvious counter-attack to concerns that the show won't survive its first year. |
| LOWE'S ACCUSED OF RACE BIAS |
| KNOXVILLE, Tenn. — Lowe's Cos. is the latest large retailer to be accused of denying employees of color equal access to positions within its company.The U.S. Equal Employment Opportunity Commission is suing the industry's second-largest retailer, claiming that Lowe's discriminated against Afro-American applicants for jobs at the company's Vonore, Tenn., distribution center.
EEOC's complaint, filed in U.S. District Court here, alleges that the retailer denied applicants a job "because of their race." The complaint identifies Curtis Carter and Tiffany Carter among the applicants in question.
Lowe's has consistently declined to respond to trade press requests for comment about its operations. But a company spokesperson, Chris Ahearn, said in a statement that Lowe's has "a deep commitment to diversity," although she did not speak directly to the EEOC suit.
EEOC stated that it filed the complaint after failing to reach a settlement with the retailer. It is seeking back pay, interest and compensatory and punitive damages on behalf of the plaintiffs.
Lowe's has encountered similar accusations of racial bias in the past. On Aug. 28, 2003, a law firm in Florida filed discrimination complaints with EEOC on behalf of eight Afro-American employees of Lowe's store in Winter Haven, Fla., who claimed they were passed over "many times" for promotions in favor of white employees the plaintiffs claimed were less qualified and experienced. |
| CUSTOM TINTING GETS RE-INTRODUCED TO ZELLERS PAINT DEPARTMENT |
| MISSISSAUGA, Ont. — The paint department at Zellers has just gotten brighter. The discount department store chain has introduced paint mixing, to beef up its service level beyond the handful of pre-mixed colors it sold in the past.The new initiative has been tested in two stores, an urban store in Burlington, Ont., and a rural store in North Bay, Ont. This month, another 50-plus stores were equipped with the new program, which features both Zellers private-label brand and Sico.
According to Tom Stafford, vice-president hardware and pharmacy for Zellers, "The introduction of a paint mixing service has had a huge impact on the accessories side of the business." He adds that training staff in the paint department to use the new color-matching system has been an important part of the program rollout. |
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| COMPANIES IN THE NEWS |
| WARWICK, R.I. — Home Depot has expanded its service offering through a new joint venture with MetLife Auto & Home and Home Depot's stores in the U.S. Together, they will provide repair materials and installation services for MetLife Auto & Home Depot customers. The service will be available nationally to customers reporting insurance claims that involve home repairs. The program will focus initially on flooring replacement, with Home Depot providing materials and installation for a wide variety of products.
AJAX, Ont. — ILDC, the Independent Lumber Dealers Co-operative, has added a new member: Star Building Supplies in Winnipeg, Man., becomes the 25th member company in this buying group, whose members represent about $2 billion in sales through 153 stores. Star has one store in Winnipeg, with sales in 2003 of more than $40 million.
ST-LAURENT, Que. — Richelieu Hardware has signed its first U.S. retail customer. The fast-growing cabinet hardware and fastener vendor, based here, has landed an account with Westlake Ace Hardware, the largest single member of Ace Hardware Corp. Based in Kansas City, Westlake has 78 stores, 61 of which will feature Richelieu's four-foot program of cabinet fittings and fasteners.
COTATI, Calif. — The discovery that a local home improvement dealer was helping to fund an effort to keep a Lowe's store from opening here has led this city's Council to request a criminal investigation into whether a local citizen's group violated campaign disclosure laws. The Council, according to the Santa Rosa Press-Democrat, is asking the Sonoma County district attorney and the state Fair Practices Commission to look into the paperwork of this group, known as Cotati Residents Against B. Last November, Measure B passed by only 34 votes, and allowed Lowe's store application to move forward. The Press-Democrat reported that Yardbird's, a local dealer with 10 stores in the area, has been subsequently identified as that residents' group's chief financial backer prior to the vote. Yardbird's reportedly contributed $26,000 to that group's cause, unbeknownst to voters.
TORONTO — A new finance package from Home Depot Canada is aimed at letting homeowners spend more. The "Home Improvement Loan" is an unsecured line of credit ranging from $3,000-$30,000, that provides six months interest and payment free to purchase materials for repair and renovation projects. But after the six-month period, the account is closed to additional purchases and the customer can choose to repay the loan at anytime or assume fixed monthly payments over a seven-year term at a 15.99% fixed interest rate. The initial purchase must be a minimum of $2,000 and subsequent add-on purchases must be at least $250. There are no administration or application fees and no penalties for prepayment at anytime during the term of the loan.
BARRIE, Ont. — Building materials wholesaler Can-Save will hold its 2004 Buying Expo on June 17, 2004. Due to years of increased attendance, the show will be held off-site for the first time, moving to the Barrie Curling Club. Continuing with tradition, this year Can-Save has booked Canadian blues rocker and six-time Juno Award winner Colin James, for the live entertainment. For more information, contact: Larry Koza 705-722-7283, ext. 2223; email: lkoza@can-save.ca; or Amanda McPhee at ext. 2256; or email: amanda@can-save.ca.
Chicago — The AHMA Hardware Show reports that it was able to register hundreds of international buyers during the recent Practical World/International Hardware Fair in Cologne, Germany. In addition, a number of companies signed contracts to exhibit at the show, scheduled for April 3-5 in McCormick Place. The show announced that it has also secured the endorsement and support of the Worldwide DIY Council, which consists of about 150 manufacturers from the United States and Canada who are active exporters.
Hoffman Hills, Ill. — The chairman and CEO of Sears Roebuck, John Lacey, got a cut in his package based on disappointing results from the giant department store retailer. Although his base salary remained at a paltry $1 million, his bonus was cut in half, to a mere $1.8 million. |
| PEOPLE ON THE MOVE |
| Manfred Seitz has been named president of Robert Bosch Tool Corp., effective April 1. Seitz will be responsible for all of Bosch's North American power tool, accessory and lawn and garden business units, and will serve as president of the company's senior executive team. In addition, Seitz will be a member of the management board of Bosch Power Tools Division for Robert Bosch GmbH.At the Building Supply Dealers Association of BC (BSDA) annual general meeting, held earlier this month, the members of 2005 board of directors were presented. They are: Rick Mielke of Summerland Home Hardware in Summerland was named chairman ... The directors are: Bob Grant of Windsor Plywood, Coquitlam; Carole Hamanishi, Wilway Lumber Sales in Abbotsford; Brian Higgins of Baywest Hardware Ltd. in Victoria; Larry Jarvis from the head office at Rona Inc. in Surrey; Jamey Paterson of Paterson Products Ltd. in Langley; Jim Ramsden of Dryco Building Supplies Ltd. in Langley; Leah Ratz of CanWel Distribution Ltd. in Langley; Shawn Smith of Westman Steel Industries in Langley; and Norm Williams of Guardian Building Products, Delta B.C. (604-513-2205) |
| U.S. MARKET INDICATORS: |
| New home sales increased 5.8% to a 1.163 million annual rate, up from the record 1.09 million sold last year, says the Commerce Department. Year over year, new home sales were up a healthy 24.4% from February 2003. Sales were strongest in the West, up 28.5% from January, and in the Northeast, up 12.0% gain — their highest level since January 1997. Sales in the Midwest slid 10.6%; home sales in the South were down by 1.2% in February.Real gross domestic product grew at an annual rate of 4.1% in the fourth quarter of 2003, according to the Commerce Department. This follows an 8.2% growth rate in the third quarter. Corporate profits increased $81.4 billion in the fourth quarter of 2003, compared to an increase of $101.4 billion in the third quarter. |
| CANADIAN MARKET INDICATORS: |
| Canada's leading indicators rose by 0.4% in February over January. Six of the 10 components advanced, one more than in January, as the money supply turned up. Manufacturing led the gains, after lagging behind most of last year. Household demand was mixed. |
| MEET CANADA'S TOP HOME IMPROVEMENT BUYERS |
| Home Depot, Canadian Tire, Home Hardware and more! Hardlines will host its third annual Meet the Buyers Breakfast Seminar, April 28, 2004. For more details, call Bev Allen at 416-489-3396 or bev@hardlines.ca. |
| NOTED |
| The Honourable David Ramsay, Ontario's Minister of Natural Resources, and FSC-U.S. president Roger Dower will join the roster of speakers at the 5th Certification Watch Conference in Vancouver, B.C., April 1-2, 2004 in conjunction with the PricewaterhouseCoopers Global Forest & Paper Conference, which takes place on March 31. For further information, visit www.CertificationWatchConference.org or contact: Kristy Westlake kristy@sfcw.org. |
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John Caulfield, Contributing Editor
vol. x, #13 March 29, 2004
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