May 1, 2017 Volume xxiii, #18

“Never thought that I could shake and groove it, now I’m a dancin’ fool.”
—Burton Cummings & Dominic Troiano (watch the Guess Who lip sync “Dancin’ Fool on ’70s Dutch TV. Worth it just for the outfits!)

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Delroc weathers drop in Western economy, eyes further expansion in the East

VANCOUVER — With most of its stores in the West, it’s no wonder that the past couple of years have posed their challenges for Delroc Industries. But 2017 is shaping up to be much more positive for the Vancouver-based buying group. Already in the first quarter, says Delroc General Manager Dave Boyce, “It’s been relatively strong.”

Noting that sales by all members dipped over 2015 and 2016, as Alberta—and Calgary in particular—and Edmonton, as well, had a pretty rough 2016. “But it bottomed out last year,” he notes.

Another factor putting a damper on sales and margins has been the ruling on gypsum imposed by the Canadian International Trade Tribunal, which has resulted in big price increases and corresponding shortages in Western Canada. “It’s been pretty disruptive to the industry.”

In British Columbia, despite one of the snowiest winters in years, sales keep growing for his dealers, Boyce says. “The snow slowed construction at the beginning of the year, but it picked up in March.”

But while 29 of Delroc’s stores are in Alberta and 69 are B.C. (source: 2017 Hardlines Who’s Who Directory), the company has been slowly adding stores in the East. “We’re still a small player in Ontario and Atlantic Canada,” he admits—and expansion into Quebec is not in the cards. “We would need feet on the ground to recruit effectively in Quebec.”

But last year alone he has added some “solid, smaller dealers” in the East, three or four each in both Ontario and the Atlantic. “They’re not big players, but they’re good, entrepreneurial independents.”

Delroc can offer them competitive pricing, significant purchasing power (the buying group’s overall sales from all members exceeded $700 million last year, (according to the 2017 Hardlines Who’s Who Directory), and lean operating costs. And in an increasingly crowded field, “We can pass along savings to members and provide an alternative to Home Hardware, Castle, and the like,” Boyce says. “We are an option for these guys.”

He also believes there’s more room for Delroc in those markets. “I think there’s still room for growth in the East. It’s just about finding the right opportunities.”

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With a push to continued expansion, Canac sets sights on Montreal

QUEBEC CITY — Count on Canac to open two stores per year for the next two or three years. According to Groupe Canac’s president, Jean Laberge, two stores a year suits his company’s capacity to build out additional locations.

For this year, he’s pleased to see stores going into Thetford Mines, Que., but more significantly, a store is opening this month in Granby, about an hour east of Montreal. Built at a cost of $5.5 million and employing about 85 people, the 60,000-square-foot store will be Canac’s 25th. Sales from the new stores have provided solid returns, helping drive Canac’s sales to almost $600 million in 2016 (source: 2017 Hardlines Who’s Who Directory).

“We are getting big growth from our new stores in new markets.”

The giant chain is considered one of the country’s largest independent home improvement retailers. And while Quebec City and environs have been the company’s base for years, it has gradually expanded down the eastern part of the province, and is steadily encroaching on the Montreal market. Exactly a year ago, it erected its first store in the greater Montreal area, in Beauharnois, southwest of the city on the south shore on Autoroute 30.

Next year, he plans to erect a store even closer to the island. “We hope to have a store in Montreal in 2018, on the south shore.” That store will be in St. Hubert, in Longueuil. After that, he says, the company will expand on the north shore. “Mirabel and Laval are also on the books.”

Also in 2018, Canac has confirmed a store in Pont-Rouge, in the west end of Quebec City. This, he says, will complete Canac’s expansion efforts in that market. “It is now well served by Canac.”

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Lowe’s relocates its Toronto offices to Mississauga today

MISSISSAUGA, Ont. — Lowe’s is moving its regional support centre in Toronto today. The offices, which were the original offices for Lowe’s Canada when the company launched in 2007, were in Toronto’s north end on Yonge Street above Sheppard Avenue. Following the acquisition of RONA inc. last year, Lowe’s made RONA’s Boucherville, Que., head office and distribution centre its new headquarters. The Toronto office was renamed the Lowe’s customer support centre.

Now it needs more space as well, and has been relocated to Toronto’s “airport corridor” at 5150 Spectrum Way, Mississauga, Ont., L4W 5G2. The main phone number for the new location is 905-219-1000. The move-in is effective today, May 1.

Jim Caldwell, executive vice president for Lowe’s Canada Big Box Retail, heads up the facility. He will continue to drive that business from the Mississauga offices, rather than from Boucherville. Lead merchant is Alan Blundell, divisional vice president, merchandising for the Lowe’s stores.

Rona Inc. owns the master license rights to use the Ace brand in Canada and those operations are moving from Winnipeg to Toronto, as well. Bill Morrison, divisional vice president for Ace, has relocated to Toronto, as have some of the support and buying functions for that banner, including Kim Leclair, Ace Canada’s new merchandising director.

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Lumber industry braces for new round of tariffs from the U.S.


SPECIAL REPORT ― New countervailing duties imposed by the U.S. Commerce department last week met with swift denunciation from Canadian lumber industry groups, who decried the move as bowing to protectionist pressure from the U.S. lumber industry.

Susan Yurkovich, president of the B.C. Lumber Trade Council, said in a statement that “American demand for lumber exceeds what the U.S. lumber industry currently produces,” and is great enough to allow room for U.S. producers to grow their business alongside Canadian imports. The Forest Products Association of Canada warned that the measures would threaten Canadian jobs—a concern echoed by federal Natural Resources Minister Jim Carr—and harm customers in both countries.

Softwood lumber has been a perennial sticking point in trade relations between the two countries since 1981. The dispute has seen countervailing tariffs imposed intermittently on Canadian softwood, but adjudicators for both the North American Free Trade Agreement and the World Trade Organization have consistently overturned them as violations of free trade.

U.S. President Donald Trump had made revisiting the NAFTA agreement a point of his election campaign. Taking to Twitter last week, he hinted that other industries may be targeted next, complaining that Canadian dairy imports hurt farmers in Wisconsin and the border states. (Trump has since backed off on his threat to dismantle NAFTA.)

In the meantime, prominent voices are weighing in on the dispute. Two diplomats who served as U.S. Ambassadors in Ottawa under Trump’s Democratic predecessors have criticized his comments as detrimental to U.S.-Canadian relations. Bruce Heyman, appointed by Barack Obama, told a panel organized by the Council of the Great Lakes Region that the president’s words “have not been constructive” and called for a shift to “a different tone and style.”

James Blanchard, who was governor of Michigan before being appointed ambassador by Bill Clinton, called Trump’s intervention “goofy stuff, unbecoming of our relationship and frankly unbecoming of the leader of our country,” adding that it will pose an obstacle to any renegotiation of NAFTA.

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Sven Johnson has joined Taiga Building Products as General Manager – Flooring. He comes over from Primco Limited, where he spent 36 years, working his way up to become a co-owner. Charged with growing Taiga’s floor business, he will be based out of Calgary. Flooring Product Manager Paul McDonald and Eastern Canadian Flooring Sales Manager Rick Churchill will report directly to Johnson. (sjohnson@taigabuilding.com; 403-805-5815)

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