May 18 , 2015 Volume xxi, #20

“He who laughs, lasts.” —Robert Fulghum (American author and painter, 1937- )

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Despite profit drop, Q1 sales strong for Canadian Tire

TORONTO — In its first quarter, Canadian Tire Corp. reported a 3% drop in profits owing to higher taxes and poorer performance in the company’s financial services business, plus lower gasoline prices. However, retail sales were up 4.5% overall for the Canadian Tire Retail division. The company also enjoyed a rise in same-store sales for each of its principal banners: 4.7% at Canadian Tire, 8.6% at FGL Sports, and 5.5% at Mark’s.

CEO Michael Medline told HARDLINES that improvements over recent years in Canadian Tire’s automotive and apparel businesses were not made at the expense of core hardware categories. The “Living” and “Working” departments are getting bolstered now, “but behind the scenes we’ve been working on these other departments as well.”

He says, “Living is as strong as we’ve ever seen it,” and while he believes the company can “still do more” with Fixing, he adds that this category has always been very strong. The biggest gains, he says, have been in seasonal. “We’re really winning that battle.”

Medline also emphasized the focus the company’s putting on grooming buyers to be experts in their categories, rather than moving them every two or three years as in the past. “We want people staying in their jobs and getting results.”

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Buoyed by improved Q1 sales, RONA pursues “cautious” growth

BOUCHERVILLE, Que. — Positive first-quarter results saw RONA's sales increase by 1.9% and its losses shrink to $11.7 million from $16.5 million.

This mainly reflects a 5.9% increase in RONA’s Retail segment, stemming from a solid performance in Western Canada and repositioning of the Réno-Dépôt banner in Quebec. These factors led to a 5.0% increase in same-store sales in RONA's Retail segment. In the Distribution segment, revenues were down 5.6%, primarily due to the net change in the number of dealer-owners and poor weather in Quebec, but as the company narrows its losses, its share price continues to climb.

With healthy increases on the retail side, the company is moving ahead with the acquisition of the lease for the former Target store in Chilliwack, B.C. The new site will allow RONA to enlarge its current operation in the Fraser Valley city, and was one of six former Target properties for which the company participated in bidding.

The acquisition is part of RONA’s strategy of cautious growth. “We are not an organization...with deep pockets,” said CEO Robert Sawyer (shown here flanked by chairman Robert Chevrier on the left and CFO Dominique Boies) in explaining the company’s preference for targeted expansion efforts. RONA is focusing on Western Canada, with a preference for relocating existing smaller stores to larger settings, and the plans for the Chilliwack store fit both those priorities.

Likewise, Sawyer acknowledged a move to carrying a slightly wider variety of consumer products, without “becoming a grocery store,” while stressing that a number of SKUs not serving the core business had been eliminated.

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Lowe’s takes 13 Target sites, plus Milton, Ont., DC

TORONTO — Lowe’s Canada has reached an agreement to acquire 13 former Target sites as well as Target’s distribution centre in Milton, Ont. The deal, worth about $151 million, follows a real estate auction held after Target’s withdrawal from the country.

The locations include markets where Lowe’s is currently under-represented. Under bankruptcy law, the agreement still needs court approval to go into effect: the process is expected to be completed by the end of June.

Lowe’s Canada president Sylvain Prud’homme said the new stores “will accelerate our expansion across the country, enhancing our presence in Western Canada and strengthening our base in Ontario.”

According to a spokesperson from Lowe’s head office in Charlotte, N.C., the company “carefully evaluated the available sites and bid on locations that we believe best complement our existing store base or provide access to new markets where we believe the Lowe’s brand and offering will be well received.” 

However, Lowe’s would not reveal the exact locations of the new sites, saying these will be disclosed when the deal has closed, likely by June 30.

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TIMBER MART hosts off-road vehicle contest

VAUGHAN, Ont. — TIMBER MART has reprised its national off-road vehicle contest in partnership with recreational-vehicle manufacturer, Polaris. Through to July 19, TIMBER MART stores across Canada will be giving away eight off-road vehicles valued at $100,000.

The contest is open to the public and ballots will be accepted in-store only, designed to increase foot traffic in TIMBER MART stores through the key spring and summer seasons. The contest was confined in prior years to Ontario members, but was expanded this year. “We decided to expand it across Canada and give away two vehicles per region, one of each in the Atlantic, in the province of Quebec, Ontario, and out west,” says Jon Irwin, TIM-BR MART Group’s vice president of retail services.

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Roussy leaves TSC, Jenkins steps in as COO

LONDON, Ont. — David Roussy has tendered his resignation as president and CEO of TSC Stores, effective June 4. Roussy joined the retail farm and hardware chain in June 2006, coming over from Canadian Tire Corp.

He is moving over to Golfsmith International as CEO. He will oversee a chain that operates more than 160 stores and two e-commerce sites, under the Golfsmith brand in the U.S. and Golf Town in Canada.

Darryl Jenkins, who is currently chief merchandising officer, will take on the role of COO, assuming responsibility for all operating functions of the company. He will report directly to the board. Scott Bennett remains in place as vice president, merchandising and will lead the buying team. Larry Martel will continue as VP of finance.

Roussy joined TSC when the retailer’s owners brought in Birch Hill, a private equity company based in Toronto, as investors. That company in turn brought Roussy, who was a VP at Canadian Tire, along with Greg Hicks—also from Canadian Tire—to serve as COO. Together, they led the company as it grew to more than 50 stores representing a quarter of a billion dollars in retail sales annually (source: Hardlines Who’s Who Directory. Don’t tell me you haven’t bought one yet? -Your Shameless Editor).

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FROM THE ARCHIVES: This week in 1995

Already having trouble fitting all the news in every week, we added a page to the HARDLINES fax newsletter and called it HARDLINES-Extra. Exactly 20 years ago, Cashway, a 55-store chain in Ontario, was looking for a buyer under the leadership of investment wunderkind Craig Graham. A buyer was not found until RONA picked it up five years later. Graham went on to run Liquidation World (later Big Lots) among other companies. He is currently executive chairman and CEO of Rainmaker Entertainment Inc., which makes computer-generated animated films. Click here to read it yourself!

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CLASSIFIED ADS

Dynamic Leader To Head BH Paints Jamaica
B-H Paints is a subsidiary of Harris Paints International Limited and one of the leading manufacturers and retailers of paint in Jamaica. The business has been operating for over 50 years in Jamaica and a great opportunity has emerged for a business leader to head the company. Harris Paints International Limited is a regional group of companies which distributes and retails paint, accessories and performance coatings in 17 countries across the region, with manufacturing and retailers operations in Barbados, Dominica, Jamaica and St. Lucia. Web site: http://championsofcolour.com/
Wolf Gugler Executive Search has been retained to conduct this search on Harris Paints’ behalf.
The head of this business unit will be responsible for the general management of all resources of the company in Jamaica. A key focus will be the ability to engage at diverse levels with the objectives of implementing decisions and the general progression of the business with profit optimisation and continuous improvement of shareholder value.
This position will report directly to the Chief Executive Officer of Harris Paints International Limited. The position will be based in Jamaica.
Duties will also relate to the following:
Commercial and Retail Sales and Marketing
Human Resource Management
Financial Management and Corporate Governance
Strategic Management
Production and Operations Management
Skills and behavioural attributes for the position:
Track record in planning and directing commercial and retail operations
Human Resource and Sales Management in developing and coaching teams to high performance
Excellent initiative and judgement, underpinned by strong values
Experience in strategic planning and execution
Ability to build strong business alliances through networking
Highly computer literate with Microsoft Office

Qualifications required:

• Management degree or related area together with five years of corporate leadership experience
• Strong verifiable record of driving sales leading to growth and profit optimization.
• Experience in the Paint and Manufacturing Industry would be an asset.

A comprehensive package including salary, bonus and relocation assistance will be provided. Looking to repatriate to the Caribbean? This is your opportunity!
Interested and qualified candidates can contact Wolf Gugler  in strict confidence. You can apply direct at www.wolfgugler.com/opportunities or call Wolf at 888-848-3006. All responses will be acknowledged.
Wolf Gugler Executive Search & Outplacement, www.wolfgugler.com

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