BOUCHERVILLE, Que. ― Lowe’s Canada continues to streamline its business with the announced sale, through RONA Inc., of the assets of the Ace Canada business to Peavey Industries. As part of the transaction, RONA, which is part of the Lowe’s Canada group, will assign to Peavey the licence and distribution agreements between RONA and Ace Hardware International Holdings, Ltd., which is in turn a subsidiary of Ace Hardware Corp.

Peavey, which is headquartered in Red Deer, Alta., with 92 farm and hardware stores from Ontario to British Columbia, will take over the Ace Hardware brand in Canada, plus a corporate Ace Hardware store in The Pas, Man. The agreement also transfers to Peavey the agreements with 104 independent Ace Hardware stores in Canada, which have been supplied through the wholesale business of RONA. Peavey will gradually assume responsibility for those stores over a six-month transition period to ensure no interruption of service. In addition, Peavey will take over the Ace Canada retail operating systems and the Ace Canada website.

Lowe’s Canada, which inherited the Ace licence when it acquired RONA in 2016, will continue to act as a wholesaler of lumber and building materials for the Ace dealers that carry those products.

The financial terms of the transaction are not being disclosed.

Despite the number of stores involved in the deal, the Ace business represents less than 10 percent of the total sales volume of Lowe’s Canada’s affiliated dealer division, says Tony Cioffi, executive vice-president, finance, affiliate dealers, Dick’s and real estate for Lowe’s Canada. Those stores tend to be smaller, with a different product mix than RONA stores. He admits that the Ace stores will make a better fit with Peavey.

“The sale will also help the company focus more directly on the RONA-affiliated dealer base,” Cioffi added. “This transaction is in line with our plan that was announced last November to simplify our multiple store banners in order to drive efficiency and reduce operational complexity.”

Jean-Sébastien Lamoureux, senior vice-president of communications, public affairs and compliance at Lowe’s Canada, reinforced that message. “We believe in the RONA dealer network and will continue supporting it.”

He adds that the six-month transition will give Peavey time to take over the new business effectively, “to allow for a smooth transition so dealers will see no difference in the service they’re getting, whether from RONA or Peavey.”

Why the Ace brand will make a good fit for Peavey’s small-town roots

RED DEER, Alta. ― The acquisition of the license and distribution business for Ace Hardware in Canada by Peavey Industries will provide a good fit, and a powerful growth generator, for the Red Deer-based farm and hardware chain.

“I believe it’s the right fit and makes a lot of sense for Peavey and for Ace Hardware, quite frankly,” says Doug Anderson, president and CEO of Peavey Industries. Peavey owns three banners totalling 92 retail stores across five provinces: 49 TSC Stores in Ontario, 40 Peavey Mart stores across Manitoba, Saskatchewan, Alberta and British Columbia and three MainStreet Hardware stores in Alberta.

Peavey’s head office and distribution centre is in Red Deer, Alta., with a second distribution centre and regional office in London, Ont., that had been the head office for the TSC business.

Anderson had already proven himself a canny acquisitor. His company began the takeover of TSC Stores back in July 2016, gradually increasing its stake in the business before taking over completely within two years. By the end of 2019, Peavey had completed integrating systems between the two businesses, rolling buying functions and systems into the Red Deer office.

Taking over the Ace business in Canada turned out to be the next step—and yet another good fit. And it was something Anderson began working on about nine months ago. He also wants to stress that Peavey approached Lowe’s Canada about this deal. “Lowe’s wasn’t out shopping this around to dump it,” he says emphatically. “This is something we see real value in.”

The Ace stores tend to be smaller than RONA stores, with more emphasis on categories such as farming and convenience hardware—something that Peavey already specializes in. He says both sides spent about six months making sure the fit was a good one. “RONA and Peavey spent a lot of time making sure this transaction would have the best interests of the Ace dealers in mind.”

Anderson notes that the Ace stores share a dedication to their local markets, backed by strong customer service. “Also, it is a great opportunity for us to serve new markets with the addition of this great brand.”

Ace in Canada is managed, as it is in other markets outside the U.S., through Ace Hardware’s Ace International division. “This is an exciting new chapter for Ace Hardware International and the Canadian Ace Hardware retailers,” said Jay Heubner, president and general manager of Ace Hardware International. “We are thrilled to team up with Peavey Industries, an organization that shares our values and has a strong commitment to service and community.”

ORLANDO — In the midst of a snowstorm north of the border in Central Canada, Canadians found warm weather and hot deals in Orlando at this year’s Orgill Spring Dealer Market. The market took up nearly one million square feet at the Orange County Convention Center and ran from February 27 to 29.

The show got off to a busy start the first morning, as the dealer registration line stretched across the convention centre’s main entrance. Canadians, in colour-coded badges, could be found in groups in the Door Busters, Canada Coupons and Canada Market Busters areas browsing the many show deals on offer.

New this year was the Impulse Showcase, an area on the perimeter of the show floor that displayed the latest best practices and products for dealers to try in their check-out lines.

Canadian vendors were generally pleased with show turnout. Dave Pestill of CashierPro was happy with business on the first morning. He doesn’t typically see his customers until the second day of the show, once they’ve already investigated the show deals, but noted that a number of dealers had stopped by early in the day.

Pestill says his company started attending the show to reach Canadian independents but has found in recent years that he’s been able to pick up some U.S. dealers as well.

Richard Defee, who was representing Oatey at the show, echoed Pestill’s positivity about the first morning. He said he had nearly surpassed the number of customers he typically sees at the show overall by mid-morning the first day.

In Orgill’s continued efforts to appeal to Canadians, a number of booths indicated where customers could be served in both official languages and the Memphis-based company even had a French customer service desk.

Capping off the first day, Hardlines hosted its popular Canada Night event at B.B. King’s, a nearby nightclub. About 150 Canadian retailers and vendors turned up for drinks, snacks and a live band.

The next Orgill Dealer Market will take place in at the Las Vegas Sands Expo and Convention Center from August 27 to 29, 2020.

BOUCHERVILLE, Que. ― Against a backdrop of positive annual sales from its parent, BMR Group has tied its dealer-members even tighter into the co-op structure.

Sollio Cooperative Group (formerly La Coop fédérée) reported a record $7.282 billion in consolidated sales in 2019, up $766 million from the previous year. Earnings before refunds and taxes were $79.4 million, a decline from previous years as global geopolitical and trade tensions marked 2019.

BMR Group, which comprises Sollio’s retail division, posted annual earnings of $16.7 million, down slightly from $16.9 million last year. Tighter controls and more advantageous trade agreements were tempered by an increase in some operating expenses. These included transportation costs (the result of a labour shortage) as well as storage costs due to a need for additional space.

However, 2019 marked the first year the BMR dealer-members received a dividend from Sollio. The co-op returned a patronage refund of $3.5 million to the dealers that will be shared based on their purchase volumes. The patronage refund was made possible by a change in the co-operative’s by-laws.

DID YOU KNOW...

... that dealers can now enter this year’s Outstanding Retailer Awards? The nomination forms are available online. We look forward to celebrating the country’s top hardware and home improvement dealers at the 25th annual Hardlines Conference on October 27. Meanwhile, check out the party we had last year with this brief video featuring last year’s amazing winners, on Hardlines TV!

RETAILER NEWS

JONQUIÈRE, Que. ― BMR Group and appliance retailer Corbeil are launching a pilot project to integrate their product offerings under one roof. The store-within-a-store will consist of a Corbeil space within BMR’s Potvin & Bouchard store in Jonquière. The store is being remodeled to accommodate the Corbeil section, with a new storefront and redesigned aisles. Corbeil has 30 stores in Quebec and Ontario.

SASKATOON ― At its recent AGM, Federated Co-operatives Ltd. announced revenues of $9.2 billion, down four percent from $9.6 billion the previous year. From those revenues, it realized earnings of $959 million, with $649 million returned to local co-ops and their communities in Western Canada. “Last year was one of our best financial years ever,” said CEO Scott Banda.

QUEBEC CITY ― On February 28, the independent retail chain Canac held the grand opening of its 30th store. The company has been expanding aggressively in recent years, adding about one store per year. The new store is in in Prévost, Que. According to Jean Laberge, president of Canac, this latest store is modelled after the previous store, which opened in May 2019 in Notre-Dame-des-Prairies. 

BOUCHERVILLE, Que. ― Lambton BMR Pro of Petrolia, Ont., is its newest store to come under the BMR Pro banner. Dave and Kristen Van Stempvoort have owned the store for the past five years, and it had been with its previous banner for almost a decade.

SUPPLIER NEWS

LÉVIS, Que. ― Maibec has reached an agreement to purchase LP Building Solutions’ East River, N.S., factory along with assets and brand rights for CanExel, the fibre-based siding product manufactured there. The transaction is expected to close in the second quarter.

MONTREAL ― Intertape Polymer Group has announced a series of measures designed to enhance the sustainability of its product offering, operations and supply-chain management. In addition, IPG is launching the Curby line of recyclable shipping materials.

COLOGNE, Germany ― The European Federation of DIY Manufacturers is renaming itself the Home Improvement Manufacturers Association (HIMA). Its new mission statement is to “enable our members to face the future,” on the three pillars of networking, knowledge and lobbying.

LANCASTER, Pa. — Armstrong World Industries reported Q4 profits of $51.5 million, a 40.7 percent hike from $36.6 million a year prior. Sales of $246.9 million represented a 3.3 percent gain from Q4 2018. For the fiscal year, profits of $242.3 million were up 27.8 percent. Sales for the year totalled $1.04 billion, a 6.4 percent increase.

ECONOMIC INDICATORS

Construction spending in the U.S. in January reached $1,369.2 billion seasonally adjusted, up 1.8 percent from the previous month. The January figure is 6.8 percent above the January 2019 rate of $1,282.5 billion. (U.S. Commerce Dept.)

NOTED

Eisenwarenmesse, the International Hardware Fair,  in Cologne, Germany, has been rescheduled for February 21 to 24, 2021. The postponement of this year’s event was announced at the end of February, a week before the show, after major buyers from North America, along with several European exhibitors, pulled out due to concerns about the spread of the SARS-CoV-2 virus in Europe. The show, which usually runs in alternate years, will take place in both 2021 and 2022.

OVERHEARD...

“While it will allow Lowe’s Canada to focus its energy exclusively on the RONA banner for its affiliated dealer network, Ace affiliated dealers across the country will find in Peavey Industries a partner whose value proposition is better adapted to their operating reality and customers’ needs.”
―Tony Cioffi, executive vice-president, finance, affiliate dealers, Dick’s and real estate for Lowe’s Canada, on the sale of the Ace Hardware license in Canada to Red Deer-based Peavey Industries.

OUT AND ABOUT

Our Editor Sigrid Forberg and VP and Publisher David Chestnut are off to Halifax this week for the ABSDA Building Supply Expo. Got a new product or a story scoop? Be sure and stop by Booth 117 and fill Sigrid in! And if you need help promoting your company and products, David is the person to connect with!