Michael McLarney, President & Editor mike@hardlines.caBeverly Allen, Publisher bev@hardlines.caJohn Caulfield, Contributing Editor Phone: 416-489-3396
March 2 , 2009, Volume xv, #9
In This Issue:

“If we could be twice young and twice old we could correct all our mistakes.” — Euripides (Greek dramatist, ca. 484-406 B.C.)

Lowe’s to take over Sam’s Clubs in Ontario
MISSISSAUGA, Ont. — Wal-Mart Canada has revealed it will close its six Sam’s Club warehouse outlets in this country. Lowe’s Canada has confirmed that it is in discussions with Wal-Mart for five of the sites, in Pickering, Vaughan, Richmond Hill, London, and Etobicoke. The sixth, in Cambridge, is reportedly not part of the discussions.Lowe’s won’t reveal any more of its plans, including whether it will take over the existing Sam’s Club buildings or build new. However, it does plan to open five more stores in the current fiscal year, which ends Jan. 31, 2010. Locations for three of these stores, all in Ontario, have been announced so far. They’ll be in South Oshawa, North Scarborough, and West Scarborough and are scheduled to open by the end of September. Three Lowe’s stores have already been opened this year, all in January (i.e., in Lowe’s fiscal 2008 year): Whitby, Windsor, and Barrie, bringing the total number of Lowe’s stores in Canada to 11. The Sam’s Club outlets, meanwhile, never appeared to really take off with Canadian consumers, where Costco is firmly entrenched. When the format was introduced to Canada five years ago, with much fanfare by Wal-Mart Canada, the company at the time announced plans for up to 60 such stores. However, it never expanded beyond the initial six. “Despite our best efforts and the commendable work of our Sam’s Club associates, our six Clubs have not met our expectations,” said David Cheesewright, president and CEO of Wal-Mart Canada. About 1,200 jobs will be affected. Wal-Mart will focus its further Canadian expansion on its supercentre format, which combines the traditional Wal-Mart offerings with fresh groceries. The company has plans to relocate or refit existing stores, and open new ones, this year for a total of 26 more supercentres this year in Canada. This will bring the number of Canadian supercentres to 82 and Wal-Mart Canada’s overall store count to 316.


Home Depot reports fourth-quarter loss
ATLANTA — Home Depot, which has been a cash machine throughout its 30-year history, ventured into uncharted waters in the last three months of its fiscal year, when it lost $54 million, compared to a net earnings gain of $671 million in the same period a year ago. Home Depot’s revenue in the quarter dropped 17.3 percent to $14.607 billion, with its same-store sales off by 13 percent.Its quarterly loss is the result of several factors, not the least of which being a depressed housing market. Its business in Canada also deteriorated in the second half of the year. But other factors “distorted” its financial performance, according to CFO Carol Tomé. For one thing, the quarter had one fewer reporting week than in 2007. Second, during the fourth quarter the company announced that it was closing 34 Expo Design Centers, five Yardbirds outlets, and two design centers. To cover the costs of those closings, it took a $387 million pretax charge. There was residual impact in the quarter from a $564 million charge that Home Depot took earlier this year to cover both the closing of 15 warehouse home centers and the removal of 50 more locations from its future new-store opening pipeline. In the fourth quarter, Home Depot also wrote down $163 million, or 50 percent, of its 12.5 percent stake in HD Supply, a business that Depot sold off in 2007. Settling a dispute related to that sale resulted in a $52 million loss from discontinued operations. For fiscal 2008, Home Depot generated $71.29 billion, or 7.8 percent less than in fiscal 2007, with same-store sales off by 8.7 percent. The company’s earnings for the year were down 48.6 percent to $2.26 billion. For the year, its discontinued operations contributed $927 million in revenue, but also recorded an operating loss of $43 million. During fiscal 2008, the company’s stores transacted 4.8 percent fewer sales than in fiscal 2007 and the average ticket of those sales fell by 3.3 percent to $55.61, although some of that decline might be attributable to a new competitive pricing strategy that Home Depot put in place late last year.


Home Hardware forms strategic alliance with Toyota
ST. JACOBS, Ont. — Home Hardware Stores Limited is leveraging its reach with Canadian consumers — and with Canadian contractors — through a new marketing partnership with Toyota Canada. Toyota becomes the “official vehicle” for the co-op wholesaler, which represents more than 1,000 hardware, home improvement and furniture stores across Canada. Conversely, Home Hardware has become Toyota’s “official home improvement retailer”.The partnership will find the two companies working together on in-store marketing promotions, trade-show appearances and other promotional materials. For example, Toyota vehicles will be displayed at Home Hardware’s “Tough as Nails” contractor shows around the country, where Toyota will feature its line of “ready-for-work” trucks. Toyota Canada supports more than 300 dealerships across Canada, with its head office in Scarborough, Ont., and regional offices in Vancouver, Halifax, Montreal and Calgary.


Sales strong at Atlantic show despite bad weather
MONCTON , N.B. — The 2009 Atlantic Building Materials Show hosted a roster of Atlantic and national suppliers, a range of dealers and buyers from across the region, and a breakfast featuring some of the top retail leaders in the industry.The show made some changes this year, being held a month earlier and lasting only two days instead of three. However, attendance by dealers was impaired somewhat by severe storms that prevented a number of them from Northern New Brunswick and Newfoundland from getting in to Moncton. Nevertheless, show organizer Don Sherwood, president of the Atlantic Building Supply Dealers Association (ABSDA) was optimistic about the event. His optimism was shared by a number of the exhibitors, many of whom were there for the first time. While some felt traffic was down, those companies selling commodities, and rep houses with a range of lines, reported favourable response — and healthy sales. The show featured, for the first time, a breakfast meeting that featured Paul Straus of Home Hardware, Robert Dutton of RONA, Castle’s Ken Jenkins, and Tim Urquhart of TIM-BR MART. Each industry leader offered insights into the direction of the Canadian — and Atlantic — economy, including some good news, for the independents in the packed room. For example, Jenkins from Castle limned the evolution of consumer spending, noting that vacations, furniture, electronics and other non-essentials would suffer in today’s economic climate. “However, when a window breaks or a roof leaks, [consumers] will spend.” Top
Positive outlook pervades Orgill Spring Dealer Market
ORLANDO, Fla. –The mood was upbeat among retailers and manufacturers attending Orgill, Inc.’s Spring Dealer Market, held here Feb. 19-21.“The atmosphere at the Market was perceptively positive among both the dealers and the vendors,” said Ron Beal, Orgill’s president and CEO. “The general mood of attendees was that they were cautious in their buying habits, realistic in their perceptions about their local economies and optimistic about being able to weather the current economic climate.” Beal also reported that both registrations for the Spring Dealer Market and sales during the market were up over Orgill’s Fall Dealer Market held in Chicago last August. “All in all, this registered as our third-largest Dealer Market of all time,” said Beal. “Considering that we were unsure about what to expect given the current economic conditions, we were very pleased with the event.” Another highlight of the three-day buying show was the number of retail prospects on hand during the event, said Beal. “We had 188 prospective customers attend the show from all over the country and we got a lot of positive feedback from this group as well.” Many of those prospects were Canadians, including McDiarmid Lumber in Winnipeg, Preston Hardware from Ottawa, Vineland Hardware from Ontario’s Niagara region, and representatives from Castle Building Centres.



Regional Sales Manager

We are a market leading manufacturer in the Building Materials Industry. Canadian owned and operated with production facilities worldwide. We are currently seeking motivated and results oriented regional sales manager to join our team. Territory management and strong organizational skills are essential. Covering the province of Ontario, the manager must be able to maintain and grow our business within the region. Sales and management skills are essential to be considered for this position. The company offers a comprehensive compensation package including salary, bonus, company car and a complete benefit package.


Roxul is a leading manufacturer and marketer of mineral wool insulation products in the North American marketplace with our head office in Milton and production facilities in both Milton (ON) and Grand Forks (BC). Our expanding company is a subsidiary of Rockwool International, manufacturing quality, high performance mineral wool products. We are searching for a talented, energetic individual with drive and determination to join us at our Milton  facility. National Accounts Manager • Retail Products A strong leader with proven business acumen, you will work to increase our retail product sales through our Canadian accounts, provide business and promotional direction to our sales team, implement and evaluate key performance indicators, initiate and foster strong strategic relationships, and ensure cost efficient operations. A college or university graduate, you have at least five years’ experience in a sales/marketing role and progressive experience preparing and presenting business plans. You also have solid communication, organizational, and interpersonal skills, negotiating expertise, and a proven track record in sales with demonstrated achievements. This is a unique opportunity to join a highly-developed technical organization as we expand in North America. We offer a dynamic environment with significant growth potential and have an excellent benefits and remuneration package. Please apply in writing to: Human Resources, ROXUL Inc. 420 Bronte Street, Suite 105 Milton, ON L9T 0H9 e-mail: jobs@roxul.com fax: (905) 878-8077 We thank all applicants; however, only hose under consideration will be contacted.


Know someone who is between jobs? We will send a complimentary subscription to anyone who is seeking a job. We also offer a free Online Resumé Service. Ask them to call or email us here at the World Headquarters. (And why not tell your HR department about this service!) Email Brady for more info. —Beverly
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Publishing Details: HARDLINES is published weekly (except monthly in December and August) by HARDLINES Inc. 360 Dupont Street Toronto, Ontario, Canada M5R 1V 9 © 2009 by HARDLINES Inc. HARDLINES™ the electronic newsletter www.HARDLINES.ca ; Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney - Editor & President - mike@HARDLINES.ca Beverly Allen, Publisher - bev@HARDLINES.ca Brady Peever - Circulation Manager - brady@HARDLINES.ca The HARDLINES "Fair Play" Policy:Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read HARDLINES each week - but let us handle your internal routing from this end! Subscription:$285 (Canadian subscribers add $14.25 GST = $299.25 per year/ GST #13987 0398 RT).Secondary subscriptions at the same office are only $46 (Canadian subscribers add $2.30 GST = $48.30).Ask about our reduced rate for branch offices.You can pay online by VISA/MC/AMEX at our secure website or send us money. Please make cheque payable to HARDLINES.


2009 National Hardware Show®, May 5-7 at the Las Vegas Convention Center, debuts its 7-events-in-1 strategy. Re-designed to reflect how retailers buy, explore over 2,800 companies in the seven major home improvement categories: Hardware & Tools, Lawn, Garden & Outdoor Living, Paint & Accessories, Homewares, Plumbing & Electrical, Storage & Organization and International Sourcing Convention.

HARDLINES Quarterly Report 1Q Just Released!

* How many new home enhancement store formats were introduced to Canada last year?

* How many buying groups disappeared last year? * What one thing are RONA, Canadian Tire and Home Depot all doing to compete with independents? * Where is Home Depot quietly offering a new at-home service through its stores?  
MISSISSAUGA, Ont. — TIM-BR MART Ontario, the GTA-based marketing and member support office for the national LBM buying group, has a new address: 20 Floral Parkway, Unit A, Concord, Ont. L4K 4R1. The phone remains the same at: 905-671-2424; fax: 905-671-4479.SURREY, B.C. — IRLY Building Centres has added a new member, Arbutus Building Supplies on Gabriola Island, B.C. The store is owned and operated by brothers Curtis and Dallas Smith, who took over in November 2008 from their parents, who established the business in 1986. The 2,000-square-foot store sits on two acres and serves a mix of contractor and consumer customers on Gabriola Island and the other gulf islands. TORONTO — Sears Canada Inc. had total revenues for the year ended Jan. 31, 2009 of $5.73 billion, down 1.9% from $5.85 billion in fiscal 2007. Same-store sales decreased 1.6% for the year. Net earnings decreased 5.1% to $288.6 million, from $304.2 million. For the fourth quarter, sales were down 5.8% to $1.62 billion and same-store sales fell by 6.2%. Profits for the fourth quarter were down 19.7% to $95.5 million. OAK BROOK, Ill. — Ace Hardware Corp., which has dealer-members in more than 60 countries worldwide, will add one more nation to its list this year when it extends its brand to stores in the North African nation of Libya. Ace has signed a licensing agreement with Technology Corner, a consulting and franchising company in Libya. Technology Corner will develop the Ace brand through Libya, and has agreed to open six Ace-named stores over the next decade. The outlets will reportedly be Libya’s first freestanding hardware stores. Mel Gregory, Ace’s International regional director, added that this franchise agreement has been in the works since November 2007. “We’ve had a lot of interest in the Mediterranean, so we’re excited to bring Libya into the fold.” TORONTO — IKEA, through its corporate philanthropy arm, IKEA Social Initiative, is further expanding its support for children with a $48 million donation for UNICEF programs in India. This most recent donation will support UNICEF programs aimed at improving the health and survival of tens of millions of women and children in some of India’s most deprived areas. UNICEF also announced that, with this donation, IKEA Social Initiative has become the agency’s biggest corporate partner, with total commitments of more than $180 million from 2000 to 2015. BENTONVILLE, Ark. — Wal-Mart saw its profits for the fourth quarter fall 7.4 percent to $3.79 billion. Sales for the period, however, were up, reaching $109.12 billion from $107.34 billion. Same-store sales rose 2.8 per cent in the quarter. DALLAS — Former President George W. Bush recently visited Elliott’s Hardware to pick up a few items and joked that he was looking for a job. Earlier last month, Kyle Walters, president and CEO of Elliott’s Hardware, had written a letter that was published in a Dallas newspaper offering Bush a job as a store greeter. Bush jokingly said that he was “looking for a job” when he visited the store, but ended up buying batteries, flashlights and WD-40, the store said in a news release. Bush has not accepted the position. “We are thrilled Mr. Bush was able to stop and get a few items for his new home,” says Andrea Bond, a spokeswoman for Elliott’s Hardware. DALLAS — The pro dealer Builders FirstSource continued to suffer from a weakened housing market in 2008, during which it reported a net loss of $139.5 million, on top of the $23.8 million it lost in 2007. The company’s revenue fell last year by 32.4 percent to $1.03 billion. During its fourth quarter, which ended Dec. 31, 2008, Builders FirstSource generated $201.3 million, or 30.6 percent less than the same quarter a year earlier. During that period, the company lost $58.9 million, vs. a $20.4 million loss in the fourth quarter of 2007.
Join Hardlines for coffee in Cologne at APS on Sunday, March 1. We’ll share our tips for maximizing your visit to this important show. Contact Beverly Allenbev@hardlines.ca at the World Headquarters for more details! www.asia-pacificsourcing.com


Ace Hardware Corp. has appointed Lori Bossmann vice-president, supply chain planning. Bossmann, a 23-year Ace veteran, will oversee integration and efficiencies of the supply chain, merchandising and finance areas. She joined Ace from KPMG Peat Marwick in 1986 and served as general accounting manager before being promoted to assistant controller, then controller and later vice-president, controller in 1997. In 1999, Ace promoted Bossmann to vice-president, finance and a year later promoted her to vice-president, merchandising … Ace has hired John Surane to fill Bossmann’s role as vice-president, merchandising, advertising and marketing, effective March 30. Surane joins Ace from Robert Bosch Tool Corp., where he was president of the Skil Power Tool division for three years.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


Retail sales were down 5.4% in December to $33.0 billion. Although this was the largest monthly drop in over 15 years, blame the auto sector, which was the biggest culprit, accounting for three -quarters of the overall retail decline. Excluding automotive, retail sales fell 1.8%. ( Stats Canada )Sales of existing homes in the U.S. fell to an annualized rate of 4.49 million, which was 8.6 percent below the same month a year earlier and the lowest level since 1997. The median price of existing homes, at $170,300, was down 26 percent from its peak in July 2006, and hit the lowest level since March 2003. (National Association of Realtors) The annualized rate of new-home sales in the U.S. in January was 309,000 units, or 48 percent below the same month a year earlier. The median price of a new home, at $201,100, was the lowest it’s been since December 2003. (Commerce Dept.)
National Hardware Show to host Black & Decker seasonal store concept: Black & Decker announced that it will unveil the new Black & Decker branded “Seasonal Outdoor Store Concept” at this year’s National Hardware Show, held May 5-7 at the Las Vegas Convention Center. The presentation will occupy 1,000 square feet of show floor space and feature products including lawn and garden power and non-power tools; outdoor storage products; personal protective and safety equipment; and outdoor painting equipment.“The ‘Seasonal Outdoor Store Concept’ offers retailers the chance to preview new products alongside merchandising and POS ideas in time for the seasonal and fall products buying cycle,” says Cam Jenkins, on behalf of B&D. “We believe the powerful Black & Decker brand, presented through the ‘Seasonal Outdoor Store Concept’, will stimulate retailers’ sales and ignite consumers’ interest in the outdoors.”
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