ORLANDO, Fla. — Despite unsettled weather through much of the American Midwest that affected dealers travelling from as far as Atlantic Canada, a healthy contingent of Canadians arrived late last month in Orlando for Orgill’s Spring Dealer Market.

TIMBER MART had a strong turnout of more than 100 dealers, many coming from that buying group’s own show, which was held a week earlier in Toronto. Other groups, like ILDC and Castle—including several individuals from head office—were also there. The Canadian presence was rounded out by dealers from existing banners looking for expanded assortments or fill-in lines.

Product showcases included Impulse Buys, the Worldwide Sourcing Showcase, Canada Smart Start Showcase and the Spring Promotional Showcase, which featured Orgill’s “Spring is Here” lawn and garden program.

“We’re showcasing a number of displays and specialty areas to help our customers find ideas to grow their businesses,” said Phillip Walker, senior vice president of merchandising services. “We hope they discover creative ways to merchandise their inventory and discover innovative products to offer their customers.”

The response of the dealers to the offerings at the show was typified by the comments of Jeremy Paine, from Bulkley Valley Home Centre, a Castle dealer from Northern British Columbia who found the show specials and promotional products particularly valuable to his business. “I’ve been coming here for years,” he said. “We always find it worthwhile, especially considering how far we come.”

TORONTO — The president and CEO of one of the country’s largest buying groups thinks the internet is a great opportunity for many dealers willing to enter the game. But Bernie Owens also warns that it holds some dangers for small business owners who are susceptible to spam and hacking.

Owens spoke with Hardlines during the recent TIMBER MART show, held in Toronto February 15 and 16.

The show, which launched a number of new programs for its dealer members, included marketing to help those dealers sell more effectively on the internet. Owens said support for building social media, including templates for creating Twitter and other accounts, were among the services introduced at the show.

But that online presence opens dealers up to attack, as well. He warns that independents need to be cautious of credit card scams that will attack their server, leaving them vulnerable to security breaches and illegal credit card use. “We’re warning our dealers about phishing.”

He notes one example of some of his dealers recently receiving an official-looking letter by email that appeared to be from TIMBER MART head office, complete with proper letterhead and logo. But it was a scam to get dealers to turn over important banking and personal information.

Owens also cites another casualty of the internet—the traditional hardware store. “It’s the fastest shrinking business in Canada and the web is killing it." While home centres and lumber yards have the advantage of dealing in larger products, commodity purchases and project sales, many of the items available at hardware stores are easily price-shopped, sourced and shipped through online purchases.

Building supply dealers, on the other hand, have some protection from online competitors, by virtue of the size and complexity of many of the products they sell.

And dealers have other advantages over online and big box competitors. “The beauty of independent building supply dealers is that they can react quickly to local market conditions. They can react to the direct needs of their good customers and quote accordingly,” he says. They can offer services—he cites additions such as a boom truck—to continually fine-tune their operations. “The big boxes—they can never touch that.”

He adds that dealers will have to watch their businesses more closely than ever. “It’s going to be about terms and managing their inventory. He notes that TIMBER MART’s new distribution centre in Mount Forest, Ont., which opened last month, will be able to help dealers in that market get products quickly so they can keep their inventory down and turns up.

MOORESVILLE, N.C. — Lowe’s Cos.’ fourth-quarter earnings included a net loss of $824 million, a swing from net earnings of $554 million a year ago. The results were impacted by pre-tax charges of $1.6 billion, due mainly to the costs attached to reorganizing its operations toward the end of last year.

Those costs included $952 million non-cash goodwill impairment charge related to the Canadian business, an accounting decision made to reflect the anticipated continued weakness in the Canadian housing market, exerting pressure on the Canadian business outlook over the near term.

Growth forecasts for the Canadian operations aren’t as strong as projected at the time of the acquisition of RONA. This cautious outlook reflects overall economic conditions in Canada, but also the impact of new mortgage rules that went into effect on January 1, 2018, which are slowing housing sales across the country as well as housing starts, also expected to continue to decline in 2019.

Lowe’s President and CEO Marvin Ellison acknowledged the disparity in market conditions and admitted that business conditions in Canada would not likely support the kind of growth the company expects in the U.S. “We anticipate continued weakness in the Canadian housing market in the near term, but remain confident in our market position in Canada and the long-term potential of that business.”

Lowe’s also took a charge of $150 million associated with the closing of under-performing stores in Canada and the U.S. and $208 million related to the exit from Lowe’s Orchard Supply Hardware business in the U.S.

Comparable sales for the quarter were up 1.7%, with the U.S. home improvement business actually up 2.4%. The Lowe’s business in Canada had negative comps for the quarter. Sales for Lowe’s for the year were $71.3 billion, up 4% from $68.6 billion in fiscal 2017.

Lowe’s has set forecasts for fiscal 2019 of total sales to increase about 2%, while comparable sales are expected to increase approximately 3%.

ATLANTA — The Home Depot posted record results for its fourth quarter and year end, reflecting gains in a number of product categories and ongoing penetration of the contractor and homebuilder markets in the U.S.

With sales up almost 11% in Q4 and up 7.2% for its fiscal year, Craig Menear, chairman, CEO and president of Home Depot told analysts, “Fiscal 2018 was another record year for our business as we achieved the highest sales and net earnings in company history.”

Menear was quick to identify where the growth is coming from. “Pro business continues to grow faster than DIY, and Home Depot keeps working on services for its pro customers,” he noted.

In the fourth quarter, Home Depot announced a consolidated go-to-market approach for its pro customers under the banner Home Depot Pro. “And we continue to invest in a more personalized offering for our pro customers with a new B2B website experience.”

With 100,000 pro customers already using the portal, the company intends to add new features to enhance interactivity and roll it out to more than a million pro customers in 2019.

Overall, Home Depot is making ongoing investments into its digital business with an improved website and mobile applications. Online sales grew 22.7% in the fourth quarter and 24.1% in fiscal 2018, representing 7.9% of the company’s total sales.

At BMR Group, Jason Hamburger has been named to the newly created position of business development manager, Ontario. The Elmira, Ont., native has more than 20 years of experience in the retail industry, including almost a decade as product manager for Home Hardware. Under the direction of Pierre Nolet, BMR’s VP of business development, Hamburger’s main role will be the recruiting of new dealers in Ontario.

Saint-Gobain has announced the appointment of Mark Rayfield as CEO of Saint-Gobain North America. Along with his new role, he will continue to serve as CEO of CertainTeed, Saint-Gobain’s building materials division. Rayfield succeeds Tom Kinisky, who now takes on the role of chairman of the North American company and chief innovation officer for Saint-Gobain worldwide.

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ATLANTA — Home Depot reported Q4 sales of $26.5 billion, a 10.9% increase from a year ago, with comparable sales up 3.2%. Net earnings for the quarter were $2.3 billion, compared with $1.8 billion in Q4 2017. In addition to one-time tax charges, the company took a hit from a snowy winter, which dampened construction activity in the U.S. Sales for the fiscal year reached $108.2 billion, an increase of 7.2%. Comp sales for the year were up 3.2%, with U.S. comps positive 3.7%, while Canada was essentially flat.

BOUCHERVILLE, Que. — BMR Group has acquired a minority stake in maple-sugaring equipment manufacturer CDL. The Saint-Lazare-de-Bellechasse company is majority-owned by the Chabot family.

BOUCHERVILLE, Que. — Lowe’s Canada has launched a new corporate website. In addition to providing the latest news on the organization, this new responsive platform gives an overall view of the company operating the Lowe’s, RONA, Reno-Depot, Ace Canada and Dick’s Lumber banners. The website was created to host all corporate information under one roof.

SUPPLIER NEWS

DWAYNE, Pa. — Unilog and Orgill are teaming up on a new promotional e-commerce program, which enables Orgill dealers to establish an online retail presence for a small monthly cost. This new offering builds on a partnership the companies announced in August where Unilog was named the preferred e-commerce partner for Orgill. Each month, Orgill will feature items that its dealers can choose to promote on their e-commerce site. Retail customers can then place online orders for these items and pick them up at their local store.

BARRIE, Ont. — LinkGreen, a technology company that provides suppliers and distributors with online ordering for their retail customers, has launched a platform for Scotts Canada to manage that garden products company’s wholesale online ordering. All online orders received through LinkGreen’s system are automatically delivered into Scotts Canada’s system through EDI.

LANCASTER, Pa. — Armstrong World Industries reported that consolidated net sales in Q4 increased by 11.4% from the prior year to $238.9 million, driven largely by higher volumes in the architectural specialties segment. Operating income surged by 21% to $52.5 million.

ECONOMIC INDICATORS

Housing starts in the U.S. declined by 11.2% in December to a rate of 1.08 million, the lowest since September 2016. The drop affected both single-family dwellings and apartment buildings. In the past 12 months, housing starts have fallen by a total of 10.2%. Meanwhile, building permits edged up 0.3% in December, with single-family permits down 2.2% from November and down 5.5% from the previous year. (Commerce Department)

Sales of existing U.S. homes declined 1.2% in January to a seasonally adjusted annual rate of 4.94 million units. That figure was the lowest since November 2015 and fell considerably short of analyst estimates of 5 million units. Compared to a year ago, sales were down 8.5%. At the same time, December’s estimated rate was revised slightly upward. (National Association of Realtors)

NOTED...

Dealers who headed to Orlando, Fla., recently for the show specials and latest merchandising programs from Orgill also had a chance to meet their fellow retailers from across Canada. Hardlines once again hosted its Canada Night Reception, at the end of day one of the show. It drew about 160 dealers, family members and store staff, who enjoyed a drink courtesy of the sponsoring vendors who supported the event.

OUT & ABOUT

Michael McLarney and our Quebec Field Reporter Geoffrey McLarney will attend the AQMAT Gala Reconnaissance at the Queen Elizabeth Hotel in Montreal this coming weekend. It’s the premier event for the Quebec market. Look for them there!