May 25, 2015 Volume xxi, #21

“Most of us would rather risk catastrophe than read the directions.” —Mignon McLaughlin (American journalist and author, 1918-1983)

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Titan’s acquisition of Slegg leads gypsum dealer into retail

VAUGHAN, Ont. — For Doug Skrepnek, one of the principals of WSB Titan, the acquisition of Slegg Lumber last year was just part of an ongoing growth strategy for the giant gypsum dealer.

The company already consists of some of the largest commercial and gypsum supply dealer (GSD) locations in Canada—WSB stands for Watson-Shoemaker-Beauchesne. The addition of Slegg, with nine retail locations and a door plant on Vancouver Island, plus one yard on Salt Spring Island and a contractor location in Vancouver, not only expands Titan’s footprint to 36 points of sale, but leads it into a more retail-oriented building materials business model.

Skrepnek is excited about the retail side that Slegg presents, calling it “a great foray into that segment of the business for us.” He wants the sales team at Slegg, which is much more customer facing than his other sites, to be well trained. That includes using product knowledge and sales skills training from the North American Retail Hardware Association.

Slegg’s product mix, which is much broader than a typical GSD, opens doors for Titan. “We can now observe and monitor whether some of those product lines will be a good fit for our dealers”—especially in smaller centres, “where a builder buys his own materials, things like doors, mouldings and siding. It could be very advantageous to our locations in outlying areas.”

Does Skrepnek anticipate more growth in the near future? “Slegg was a big acquisition!” he admits. “We’re taking a breath.”

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Changes at Lowe’s International as Aussie venture drains cash

MOORESVILLE, N.C. — Lowe’s international division, which oversees Canada, Australia, and Mexico, has undergone some reorganization. Doug Robinson, president of international operations and development, has stepped back from his role for personal reasons. He was replaced earlier this year Richard Maltsbarger, chief development officer, who has also been appointed to lead international operations and development.

Robinson is familiar to the Canadian industry as the man who led Lowe’s entry into Canada in 2007. His first successor was Don Stallings, a regional VP who had helped Lowe’s build its business in Texas. Stallings eventually moved to Australia to head up the Masters Hardware chain, a joint venture between Lowe’s and Australia’s largest retailer, Woolworths. He was succeeded here by Alan Huggins, who had been on the operations side at Lowe’s Canada since its inception. Huggins left in 2013 to work with Robinson as VP international operations and development. Sylvain Prud’homme, a former EVP from Loblaw, was then hired to head up Lowe’s Canada.

Now, Huggins is no longer with Lowe’s, either. In addition, Prud’homme has replaced Robinson on the board at Masters.

While the departure of Robinson is unrelated to the performance of Lowe’s in Australia, the company there is facing a different situation from the one in Canada. Growth down under came faster, but at a cost. With 53 stores (compared with 38 in Canada), the Masters chain has lost more than AU$3 billion (CA$2.9 billion) so far, and stores there continue to lose sales, with average sales per store sinking below AU$20 million (CA$19.5 million). Break-even is considered to be AU$30 million. The company is expected to lose up to AU$200 million this year.

In Canada, Lowe’s was slow to catch on with customers, but under Prud’homme sales have taken off in the last two years and per-store sales are reportedly ahead of the U.S.

(How big are Lowe’s sales in Canada? Find the answer in our Who’s Who Directory of Retailers and Buying Groups! —MM)

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Home Depot, Lowe’s results include strong Canadian comps

MOORESVILLE, N.C. & ATLANTA — Both Lowe’s and Home Depot posted solid profits and sales for the first quarter. While Home Depot’s profits grew at a rate almost double that of its rival, Lowe’s managed to squeeze out a bigger increase in sales for the quarter.

Sales for Home Depot were up 6.1% to $20.9 billion, as were same-store sales, while U.S. stores had positive comp sales of 7.1%. Lowe’s sales increased 5.4% to $14.1 billion from $13.4 billion, while same-store sales for the quarter increased 5.2%. The number-two home improvement retailer had Q1 net earnings of $673 million, up 7.8%, while net income for Home Depot rose 14.5% to $1.58 billion.

Both companies boasted healthy performance from their operations in Canada. Lowe’s had its eighth consecutive comp sales increase in Q1, which reached into the double digits–and its highest comp since entering Canada in 2007. Home Depot Canada posted comps in local currency above the company average, representing 14 consecutive quarters of positive comps.

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Castle dealers grow locally


MISSISSAUGA, Ont. — Kindersley Castle Building Centre in West-Central Saskatchewan is the newest member to join Castle Building Centres Group. The operation is a start-up partnership established by Richard Reaburn, Melody Fries, and Sheldon Goodheart.

Reaburn and Fries, formerly with Namraw Lumber in Kindersley, have been in the hardware and building materials industry for more than 20 years. Their 5.2-acre lot will be the site of a 12,500-square-foot retail storefront, with the remaining space for warehouse, lumberyard, and customer parking. A grand opening is scheduled for late summer or early fall.

Like many independents, Castle members are also growing locally, buying up local competitors or opening new greenfields operations. The most recent is Peterborough, Ont.-based Alf Curtis Home Improvements, which will open its third Eastern-Ontario location, this time in Belleville. Founder Alf Curtis first opened in Peterborough in 1975 and erected a second location in Lindsay, Ont., in 2005.

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RONA could add consumables as it cuts back other SKUs

BOUCHERVILLE, Que. — RONA stores could offer a wider selection of consumer products and impulse purchases, CEO Robert Sawyer indicated at a press conference following the company’s annual shareholders’ meeting last month.

Gesturing to his bottled water, Sawyer suggested that more SKUs could be given over to items such as that—within reason, he added. Despite his own grocery background, Sawyer contrasted the company’s cautious approach with that of Canadian Tire, which is, he said, “becoming a grocery store.”

The CEO’s comment is in keeping with RONA’s strategy of growth while focusing on its core business and transforming its banners. This includes the back-to-basics overhaul of its Reno-Depot banner in Quebec and its expansion outside of that province.

Sawyer underscored that the company is happy with Reno-Depot’s core business of catering to contractors. The overall trend has been to reducing SKUs that don’t serve that contractor business. Reno-Depot has already streamlined its inventory to that end and similar cuts are anticipated for other RONA stores.

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FROM THE ARCHIVES: This week in 1995

Home Depot opened its largest Canadian store exactly 20 years ago. The retailer took over 11 acres at Toronto’s Stockyards and erected a 151,000-square-foot outlet. At the same time, sites were announced for Saskatoon, Winnipeg, Regina, and Ottawa. Also: Canadian Tire actively expands its Quebec stores and IRLY gets a U.S. member. Check out this blast from the past for 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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