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May 19, 2014 Volume
xx, #20
“Men and nations behave wisely when they have exhausted all other resources.” — Abba Eban (Israeli politician and diplomat, 1915-2002)
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RONA posts Q1 losses, banks on success of new-look Réno-Dépôt
BOUCHERVILLE, Que. — Store closures and the renovation of 11 Réno-Dépôt outlets contributed to a drop in revenues for RONA, with consolidated revenues of $764.3 million down 8.2% from $832.9 million for the first quarter of 2013.
The decrease primarily reflects the closure of underperforming stores, harsher weather conditions that had a negative impact on stores that sell building materials in Quebec and Ontario, and more difficult conditions in the industry as a whole stemming mainly from a decline in housing starts across the country. Sales were also affected by major renovations at Réno-Dépôt stores as that banner was re-positioned during 2013.
These factors contributed to a 4% decrease in same-store sales in the first quarter.
RONA achieved cost-savings of $23.7 million through lowered selling, general and administrative expenses, and the positive impact of closing the underperforming stores, which helped to narrow RONA’s losses and boost adjusted EBITDA, which totalled $10.0 million, or 1.3% of revenues, compared to $1.6 million, or 0.2% of revenues in the first quarter of 2013.
RONA bought back $23 million in shares in the first quarter, and has been authorized to purchase up to 8,578,384 additional shares by November 17, 2014.
The re-positioning of the Réno-Dépôt stores is another strategy that appears to be working. “We are encouraged by the initial change in the trend of sales observed in the newly renovated Réno-Dépôt stores,” said Robert Sawyer, president and CEO of RONA in a release.
“Given these positive indicators, we have accelerated the repositioning of this banner. To date, 11 stores have been fully renovated under the new concept and we expect to complete all 16 Reno-Depot stores by the end of the second quarter of 2014.”
From there, the company has plans to roll out aspects of the Réno-Dépôt strategy to other markets, but wouldn’t put a timeline on that expansion. “It’s a different concept from our competitors and we’re anxious to go outside of Quebec,” said Dominique Boies, CFO of RONA.
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Chalifour Canada wins JDA planogram award
LONDON, Ont. — Chalifour Canada has won JDA Software Group’s 2014 Real Results Award for best in Space and Category Management. Nine companies that used JDA’s software to achieve “industry-leading results and business-process excellence” were honoured at JDA’s 24th annual global conference in Las Vegas, April 27-30.
“By partnering with JDA to transform our space planning processes, Chalifour Canada created more than 330 dynamic planograms across three departments,” said Rob Brown, Chalifour Canada’s planogram specialist. As a result, Chalifour Canada gained market share nationally and increased its in-store footprint by 120%, while delivering a 200% increase in planogram sales over the past three years.
“We are honoured to have been selected from among JDA’s more than 4,000 global customers and represent companies that have the best supply chain success stories. Providing the optimal solution for our dealers is key to our growth,” said Andrew Pantelides, Chalifour Canada’s procurement and merchandising manager, shown here (l) with Rob Brown.
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LP’s attempted takeover of Ainsworth stalls
VANCOUVER — Following months of trying to satisfy anti-competition bureaus on both sides of the border, Louisiana-Pacific Corporation’s attempted acquisition of Ainsworth Lumber Co. Ltd. has stalled. That, despite approval of the $1.1 billion deal by the Supreme Court of British Columbia on October 31, 2013.
Since announcing the intended deal in September 2013, LP and Ainsworth have been in regular contact with the United States Department of Justice and the Canadian Competition Bureau with respect to antitrust and competition matters. To help facilitate the process, LP and Ainsworth have provided the CCB and DOJ with “significant amounts of information and analysis and met with them on multiple occasions,” according to a release.
However, both the CCB and DOJ have indicated they are unwilling to permit the transaction to be completed without further divestitures of both LP and Ainsworth assets that go beyond the framework of the original deal.
Although LP and Ainsworth continue to explore possible solutions and alternatives, Ainsworth is in fact considering litigation against the CCB and/or DOJ.
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Homebuyer preferences a big theme at NRHA Conference
LAS VEGAS — An integral part of the National Hardware Show again this year was the North American Retail Hardware Association’s All-Industry Conference. This educational program featured ongoing presentations at the “NRHA Village Stage,” situated at the front entrance of the show at the Las Vegas Convention Centre. A number of topics addressed consumer trends in home buying.
In the “Millennial Home Buying Preferences” keynote presentation, Jill Waage, editorial director for home content for Better Homes and Gardens, says millennials are coming to market armed with knowledge and a sense of personal style aesthetic, but they still need retailers to give them guidance through the process.
Additionally, Waage noted millennials’ creative urgency is what sets them apart from other generations. They are also tech-savvy and ready to purchase when they’ve made up their minds on projects: According to a 2013 Gfk Roper study, 74% of millennials who use apps and 68% who use social networks to get ideas about home improvement plan to do home redecorating this year.
“Retailers and other members of the home improvement industry have the opportunity to collaborate on their wish list and goals,” she says. “Will you be their collaborators on their paths to purchase?”
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EXCLUSIVE: Can RONA demonstrate its commitment to independents?
Luc Rodier, senior vice president of RONA inc., admits that getting the new executive team at his company to focus more on its independent dealers was “just a matter of priority.”
When Robert Sawyer took over from long-time CEO Robert Dutton back in the fall of 2012, he came hot on the heels of an unsuccessful takeover bid by Lowe’s Cos. He found himself defending the company against the criticisms and scrutiny of analysts and investors. Putting out fires on Bay Street meant a lot of RONA’s strong dealer base were feeling neglected and disenfranchised.
On top of that, a number of those dealers were coming to the end of the 10-year agreements RONA forged with them when it went on a recruitment spree outside of Quebec beginning around 2003.
Rodier admits that a number of dealers have left over the past 18 months. “Yes, a number of dealers have gone to other banners, and that’s all part of the dynamic of the market.” But he makes an important point to distinguish RONA’s recruitment strategy from the heady days of pell-mell expansion that typified the company pre-2008. The company in fact made a conscious decision not to attempt to retain many of them. “Not all dealers are a fit for RONA.”
He says the company wants to serve a wide range of dealers, as long as they are a good fit. “We can’t sell what we are not,” he stresses. “We can’t be everything for everybody. Part of a good banner strategy is knowing what you can be the best at.” He says the company wants to serve a wide range of dealers and notes that certain dealers are a very good fit. He also says that not all the dealers that went elsewhere to kick tires stayed away. “Many people saw RONA dealers at, say, the last Orgill show but some of those dealers came back and said, ‘It’s not for us.’ That’s probably the biggest change for the company—to work with the dealers we’ve got and make them more profitable.”
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Dealers show willingness to keep investing in RONA
BOUCHERVILLE, Que. — RONA’s strategy to align itself with like-minded independents (see previous story —Editor) is definitely resonating with some dealers. A new dealer location in Pincourt, Que., will open September 3, representing an $18 million investment by dealer Richard Allard. Allard, who currently operates a RONA proximity store in nearby Ile-Perrot, will be doubling his selling space with the opening of the 82,000-square-foot Pincourt store.
The Turcott Group, which already owns a number of RONA stores in the Capital Region, bought a RONA corporate store in Stittsville, Ont., back in March. The 12,000-square-foot location allows the group to expand its operations outside the Ottawa-Gatineau area.
And Glacier Building Supplies Ltd., which operates a RONA-affiliated building supply and garden centre in Revelstoke, B.C., also expanded its operations in March by acquiring the 20,000-square-foot RONA corporate store in Salmon Arm. Lawrie Shears, director of operations for Glacier Building Supplies, said, “We have extensive plans to upgrade the Salmon Arm premises and business operations and are looking forward to offering our customers a new level of service, commitment, and excellence that is the hallmark of the RONA brand.”
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Classified Ads
TORBSA is a Shareholder-owned Canadian Buying Group of independent building material dealers established in 1966. The Group’s focus is to offer the independent business, whether it is a Commercial or Specialty Dealer or Lumber Yard, a transparent, low-cost, and relationship driven choice. It is the Group’s collective buying power that allows us to develop, negotiate and facilitate opportunities to grow the Shareholders’ businesses.
Job Opportunity
Business Development Manager
Under the supervision of the General Manager, the Business Development Manager will be responsible for growing TORBSA Limited’s presence across the Canadian marketplace. As the Business Development Manager, your duties will also include the facilitation of selected communications and job responsibilities, as outlined below:
Role
- Promote mission and values of the organization
- Solicit, establish, and maintain business relationships with prospective independent building material dealers to generate growth of the group across the Canadian marketplace
- Aid in the support of existing shareholders
- Research sources for developing prospective shareholders and further information to determine their potential
- Participate in trade shows and conventions related to the building or construction sectors
- Assist in the management of various marketing programs and special buys of products that are pooled purchases available to all member companies
Skills
- Undergraduate degree required - preference given to studies in engineering, sales & marketing
- 10 - 15 years of direct work experience in the building material supply sector
- Excellent organizational, strategic, planning and implementing skills that will benefit each member as well as the Group as a whole
- Strong presentation, communication and written skills are considered a valuable asset
- Ability to speak French is an asset
- Must be computer literate
- Ability to become proficient in the management and modification of the Group’s website
- Excellent negotiation skills are highly desired
- Knowledge of building materials and the building material industry is a strong asset
- Knowledge of buying groups and how they function in our marketplace essential
- Must possess a willingness to travel relevant to the growth aspirations of TORBSA
- Proven abilities to develop and maintain excellent internal and external relationships with the staff of TORBSA, the members of the Group and all vendors that make TORBSA the success it is
To Apply: Please forward current Resume and Cover Letter to cheryl@torbsa.com . Indicate Job Title in subject line.
We will accept resumes for this posting up to May 25th
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Fusion Products Limited
Inside Sales Support Associates
Fusion Products Ltd. is a leading supplier of solar garden lighting to the Canadian marketplace, with head office in Mississauga, Ontario. The company is seeking two positions: both are Inside Sales Support Associates. One position requires a bilingual (French and English) candidate, and the other position requires an English candidate—both preferably with experience in the hardware industry.
Each Inside Sales Support Associate will focus on Home Improvement retailers in specific regions to promote Fusion products, develop new business, support agents, provide product knowledge to retail associates and work industry trade shows. Must have proficiency in Microsoft office including power point. Competitive compensation package offered.
To apply for this exciting employment opportunity, please send your resume and cover letter to: zaf@fusionproducts.ca
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