|"NOT FOR SALE": SODISCO BOARD AFFIRMS WHOLESALER'S FUTURE
|MONTREAL — After months of evaluation by an international finance firm, hardlines wholesaler Sodisco-Howden Group has emerged with renewed commitment from its primary shareholder, Paribas Participations.The news came during the same shareholders' meeting where the company's first-quarter results were announced, results that saw revenues increase 1.7% to $89.1 million during the first quarter of 2004. In that meeting, company chairman Hubert de la Beaumelle announced that, following months of evaluation by RN Rothschild, Sodisco-Howden "is not for sale."
During the period, the company posted a profit of $199,000, compared with a loss of $394,000 in the first quarter of 2003. Recorded revenues were slowed by a change in billing practice by a vendor from last year; otherwise, revenues would have increased by 6%. The company also continues to strengthen its balance sheet. Bank debt was reduced 11.8% from the same time last year, and total term debt decreased to $12.8 million from $14.5 million.
Thanks to the acquisition of Ace Hardware Canada Ltd., a deal that closed back in February, 2003, Sodisco-Howden's hardware sales increased by 9%. "We've had good support from all the buying groups, and from our dealers in Quebec," says Jos Wintermans, president and CEO of Sodisco-Howden, "so the increases have been right across the board."
Wintermans points out that earnings per share gained one cent, after a loss of two cents in the same quarter a year earlier. "And we issued a ten-cent dividend to reward shareholders, which reflects our strong cash flow," he adds. "We are very bullish about the future."
|QUARTERLY SALES, PROFIT RISE FOR TRUSERV CORP.
|CHICAGO — TruServ Corp. reported a 10.4% increase in first quarter 2004 wholesale sales, to $499.4 million. The dealer-owned buying group also saw its profit for the three months ended April 3 hit $2.1 million — a big swing from the $3.9 million loss suffered in the same period a year earlier.Pamela Frances Lieberman, TruServ's president and CEO, called sales growth "the last piece of our turnaround puzzle." Perhaps the most remarkable part of the co-op's quarterly financial performance — and an indication of its renewed stability — was the fact that about half of its sales increase resulted from same-store sales improvements. TruServ distributes to a network of about 6,100 dealers, and the co-op was plagued by defections in recent years during its turnaround.
Lieberman added in a prepared statement that the company's profitability benefited from an earlier refinancing of its debt, which lowered its interest rate to 4% from 13%. The co-op did not release more specific financial information with this quarterly announcement.
TruServ expects its wholesale sales to continue to grow through the remainder of the year, as the U.S. economy continues to recover.
|HOME DEPOT ACQUIRES CONSTRUCTION SUPPLY COMPANY
|ATLANTA — As it prepares to share its first-quarter financial information with investors in a few weeks, Home Depot has made its boldest foray to date into the pro side of the business with its acquisition of White Cap Construction Co., a Costa Mesa, Calif.-based dealer and distributor of hardlines and building materials to the contractor trade.White Cap employs 1,720 people and generates an estimated $500 million annually. On its web site it lists 68 branches located in 17 states across the country. Its branches stock 65,000 items, and deliver three-fifths of what it sells to job sites. It will become part of the Home Depot Supply division.
White Cap's product mix includes tools and equipment (probably its strongest category), hardware, outdoor lighting, paint and work wear. Its yard features such construction materials as concrete, drainage and thermal and moisture protection products for commercial applications, as well as more conventional materials for home building and remodeling.
Home Depot estimates the size of the professional contractor market at $410 billion, and Jim Stoddart, president of Home Depot Supply, called White Cap "a leader in this highly fragmented market." In a letter to its vendors about this deal, White Cap's CEO Ted Nark said his company intended to "maintain business as usual," and sought to assure those vendors that "as we leverage our strengths to grow the business, you business will also grow."
The warehouse giant has a more personal connection with its newly acquired company, too. Dan Tsujioka, White Cap's former executive vice-president in charge of acquisitions, was Home Depot's vp-store operations in the 1980s, and at one point was in charge of opening every one of Home Depot's new stores in the early stages of the chain's expansion. He will remain on in a consulting capacity on further acquisitions.
Home Depot expects to complete its acquisition of White Cap within 30 days. It did not disclose the purchase terms, but noted that the deal would add to its earnings.
The connection between the two companies goes deeper than this latest deal. The contractors Home Depot uses to build its stores have had White Cap included among their preferred suppliers for some time, says Karen Haggerty, company spokesperson.
|RED GREEN WILL LEND "EXPERTISE" AT HARDLINES CONFERENCE
|WORLD HEADQUARTERS,TORONTO — The latest addition to the line-up of personalities participating in the Hardlines Conference Series is also perhaps the most famous. Red Green, star of television's popular "The Red Green Show," will offer valuable tips on using hardware — and duct tape — at the Hardlines Gala Dinner on September 8, 2004. The Dinner is just one of the events during the two-day Conference Series, being held in Toronto September 8-9, 2004.Now in its ninth year, the Hardlines Conference Series is an executive-level gathering of North America's top retailers and vendors. Besides case studies from retail's front lines, the event features speakers who provide insights into the latest trends shaping the industry today.
The lineup this year includes Jim Inglis, a former Home Depot executive and retail consultant; Joe Scarlett, chairman of the fast-growing Nashville, Tenn.-based Tractor Supply Co.; and Jos Wintermans, president and CEO of Sodisco-Howden Group, which has recently re-positioned itself as a primary force in hardlines distribution in the country.
Hardlines is proud to host the illustrious Outstanding Retailer Awards Lunch, presented by Hardware Merchandising magazine, this year, followed by the Gala Dinner that evening, with Red Green, on September 8.
We'll be introducing more speakers in the weeks to come, but mark your calendar today for the Hardlines Conference Series, September 8-9, in Toronto. This year, the Conference Series moves to the brand new Renaissance Airport Hotel. For more information, click here or call us at 416-489-3396.
|CANWEL TO LAUNCH INITIAL PUBLIC OFFERING
|VANCOUVER — This Thursday, May 13, CanWel Building Materials will launch an IPO, offering 5,118,000 shares of common stock to the public. The price has been fixed at $8.50 per share, as the recently renamed company makes a bid to raise more than $43.5 million to fund its growth.CanWel's initial public offering would place 45% of the company's ownership in the hands of outside investors. The other 55% will continue to be controlled primarily by the Futura Corp., a company owned by CanWel's chairman, Amar Doman. Key senior-level managers also own a small part of the company, says Paul Johnston, CanWel's CFO.
Earlier this year, CanWel recently changed its name from CanWel Distribution Ltd. to CanWel Building Materials. "We wanted a name that better reflects who we are today, who we'll be in the future," said CanWel's president, Tom Donaldson, in a recent interview with Hardlines.
Last year, CanWel generated $542 million in revenue, and around $7.5 million in net income, from the sale of building products from its 13 distribution centers, says Johnston. He confirms that, aside from some debt reduction, the money raised from the IPO will be used to fund acquisitions. "We want to be the dominant building materials distributor in Canada," he says.
According to Donaldson, the company has a big opportunity to grow, and he observes that the industry is enjoying "a very positive business environment that will continue for quite a while."
|WAL-MART BUYER TELLS POTENTIAL VENDORS HOW TO CONNECT
|TORONTO — Don't expect to see fresh food and produce in Wal-Mart's Canadian stores, but like its U.S. counterpart, you can expect just about everything else.That's just one of the many insights offered by Jim Pilkington, division merchandise manager of home electronics at Wal-Mart Canada, speaking recently to a room full of vendors at the latest Hardlines Meet the Buyers Breakfast Seminar. Pilkington joined fellow merchants from Canadian Tire, Home Depot Canada and Home Hardware Stores Ltd.
While the process for getting listed with Wal-Mart has always been rigorous, its gotten even tougher, he says, as the scandals plaguing companies such as Enron have spurred the business community in general to add more controls. "The approvals and agreement process have been stepped up a notch, and now we have even higher accountability." However, he added, the company maintains an "open-door policy" for vendors when it comes to airing their own concerns.
Wal-Mart stands behind everyday low prices, which means, for vendors, everyday low cost. "We're going to negotiate hard price, that's a given," Pilkington said. But being well-armed with knowledge of one's item and category, and how it's carried in Wal-Mart, goes a long way to building credibility. Also, companies should point out whether their products are already selling well in other channels or in other countries. These factors will earn a potential supplier added points when trying to make contact with the giant retailer.
But if a vendor does make that contact, they'd better be able to deliver. "If you get interest from a buyer, prepare for a wild ride," said Pilkington, warning that the process "will move fast — believe me."
|MASCO CORP. REPORTS STRONG SALES GAINS
|TAYLOR, Mich. — Masco Corp., the multi-product manufacturer and distributor of home improvement products, saw its sales increase 19.2%, to $2.81 billion, in the three months ended March 31. However, the company's net income rose only 1.2%, to $168 million.The company noted, however, that its financial performance from continuing operations was much stronger. Net income from these businesses was $241 million. Masco is in the process of disposing of several of its "non-core" companies in Europe, which should be completed by year's end. Masco expects to incur a loss from those divestitures, and took a $76 million after-tax charge to reflect those expectations.
The company told investors to expect higher sales and profit for the remainder of the year.
Masco provided a breakdown of some of its business segments. It reported that sales of cabinets and related products rose 18%, plumbing sales grew by 19%, decorative products gained 28%, and specialty products increased 20%. The company's Masco Contractor Services division, which installs a range of products for large production homebuilders, saw its sales rise 16%.
The supplier also reported that business from Home Depot, Lowe's and Wal-Mart, its three largest dealer customers, increased 21%.
|TRUSERV ROLLS OUT TRADING SPACES PAINT
|CHICAGO — This month, Trading Spaces paint becomes available at participating True Value hardware stores in the U.S. General Paint & Manufacturing, a subsidiary of TruServ, obtained the license for the brand last fall from Discovery Consumer Products."We already carry top lines of paint, such as EZ Kare and WeatherAll," said Carol Wentworth, vice-president of marketing, in a prepared statement. "Now, we are adding this nationally-recognized branded paint line for customers who want a top-quality designer paint at an affordable price."
The new line will be priced below other upscale paint brands, and will include a full line of Trading Spaces accessories, such as paint brushes, rollers, trays and sponges.
|DOMAN RESTRUCTURING TAKES SHAPE
|DUNCAN, B.C. — Forest products company Doman Industries continues to buy time while it operates under bankruptcy protection. But a new structure is emerging, whereby Doman's pulp and solid wood assets of Doman would be separated into two new corporate groups. The first is Lumberco, which would hold the lumber assets of Doman. The second is called Pulpco, which will operate as a wholly owned subsidiary of Lumberco. Pulpco would hold the majority of Doman's pulp assets. Lumberco will take over from Doman as the public parent company.Meanwhile, the unsecured debt of Doman and its subsidiaries, including its pre-filing trade debt, will be compromised and converted to 75% of the equity of Lumberco, subject to cash elections. Secured note holders will have their holdings refinanced in full through a combination of an offering of warrants to the unsecured creditors and a private placement to Tricap.
Existing Doman shareholders will not be entitled to any distributions or other compensation under this latest plan, nor will they have voting rights, but will be granted the option, through warrants, to purchase up to 10% of the shares of the newly formed Lumberco. The warrants would have a five year term.
|COMPANIES IN THE NEWS
|SAN FRANCISCO — With the onset of Mother's Day, many hardware retailers have positioned themselves as a destination for gifts. TruServ Corp.'s website offers products for the handy-mom." Ace Hardware's online offerings are more traditional, but both companies are typical of many hardlines retailers, who have found that half or more of their customers are women.
RED DEER, Alta. — Peavey Industries Ltd. has joined the hardware buying group, Mutual Hardware. Peavey is a privately owned hardware and farm supply retailer with 26 stores throughout Western Canada, and sales of more than $100 million. Peavey is the 22nd member of Mutual, which consists of retail chains, co-ops and industrial suppliers of hardware in Canada.
ISSAQUAH, Wash. — Costco Wholesale Corp. had net sales of $3.56 billion for the four weeks ended May 2, 2004. That's an increase of 13% from $3.14 billion in the same four-week period of the prior fiscal year. For the first 35 weeks of its 2004 fiscal year, the company reported net sales of $31.35 billion, an increase of 14% from $27.47 billion.
MINNEAPOLIS — Water Industries Inc. had net sales from continuing operations for the third quarter of $5.3 million, up 6.8% from $5.0 million during the same period a year earlier. Net income for the third quarter was $169,000, up from a loss of $53,000.
CINCINNATI - Procter & Gamble Co. reported that third-quarter earnings rose 20%, while sales were $13 billion, up 22% from nearly $10.7 billion a year ago, thanks to strong sales in beauty care, health care.
AVON, Ohio — Henkel Consumer Adhesives has purchased the retail business of Tape Specialties Ltd., which includes the Painters Mate brand of adhesive tapes. Tape Specialties is a Canadian manufacturer of environmentally friendly water-based rubber adhesives.
TORONTO — U.S. industrialist Jerry Zucker, of South Carolina-based InterTech Group Inc., is close to owning enough shares of department store chain Hudson's Bay Co. to make a takeover bid. Zucker now owns 18.1% of Canada's oldest company. At 20%, he would be forced to make an offer to buy the entire company.
|U.S. MARKET INDICATORS:
|Investment in housing construction reached a record high in March, according to the Commerce Department. Total construction spending rose 1.5%, the biggest increase since last July, to a seasonally adjusted annual pace of $944.05 billion from $930.02 billion in February, the Commerce Department said. Private residential construction was up 0.7% to a $507.194 billion rate.
|CANADIAN MARKET INDICATORS
|Housing starts are expected to remain strong in 2004, reaching 208,500 units, down slightly from 2003 levels but still their second highest level since 1989, according to Canada Mortgage and Housing Corp. Low mortgage rates, economic growth and continued consumer confidence are all expected to contribute to sustained strong levels of housing. Rates are expected to increase gradually over next year and starts are expected to drop to 192,200 units in 2005. Existing home sales this year are also expected to decrease slightly from 2003's record levels.The value of building permits in Canada fell 4.2% in March, due to a drop in non-residential construction intentions. However, the value of residential building permits was up 4.5% from February, totalling $2.91 billion. However, the value of non-residential permits plunged 19.4% to $1.29 billion, their lowest level since April 2002. On a quarterly basis, builders took out $8.6 billion worth in residential permits, up 14.6% from the same period in 2003. In contrast, non-residential permits fell 7.5% to $4.3 billion.
|Hardlines will present the International track at the Industry Summit at the National Hardware Show. Two sessions, "The Key Retailers in Global DIY," and "Hot Retail Tips and Trends from around the World," will be offered today and tomorrow at NHS. Click here for more info. — Michael
|HARDLINES PARTNERS WITH ONLINE RECRUITER
|Hardlines has partnered with canadianretail.com to offer the industry an easy and affordable way to place job openings on the Internet. The program for Hardlines.ca visitors is easy — and specially priced! To post a single job on canadianretail.com at the special price of $150.00 plus GST for 60 days, just click here to Register and Post a Job. Click here to read More about the program.
Don't miss the products and services on the Hardlines web Marketplace:
And check out Hardlines Classifieds on the web:
SALES FRANCHISE AVAILABLE
Exclusive distributorship: EXCHANGE-A-BLADE, an established manufacturer and distributor of power accessories is seeking a dynamic sales oriented individual to take over an existing Ontario franchise with existing accounts with solid growth potential. The candidate must have an entrepreneurial spirit and be comfortable with "hands on" sales and service. Investment required. Financing available to the right person. Training and support provided. Call (519)679-6760, ask for Andy Moncrieff.
You are a senior marketing professional with many years of retail and contractor experience. As a team player, you possess strong communication, managerial and interpersonal skills. Strong organizational skills are required for overseeing the budget and critical execution paths. You are a very motivated, 'hands-on' individual who will be responsible for developing and executing various marketing programs, including print, radio, television and web media. You will also work with a team of on-site Merchandisers to ensure our stores are properly branded and merchandised. Experience in setting up trade and consumer shows and special events would be an asset.
TIM-BR Mart is the national retail brand for hundreds of building centres across Canada. This management position is dedicated to ensuring that our stores in Ontario project a strong retail image at store level. Your goal is to strengthen the TIM-BR Mart brand in the marketplace.
We offer a competitive compensation package and a pleasant working environment near the airport. We thank all applicants for their interest; however, only those selected for an interview will be contacted.
Please submit your resume, in strictest confidence, to the Executive Assistant at email@example.com or by mail to 6470 Viscount Road, Mississauga, Ontario, L4V 1H3.
SENIOR SALES EXECUTIVE
O.G.C. Inc. Information Systems provides fully integrated POS and accounting solutions tailored for the hardware retail/merchandising and distribution industry, since 1982. The systems are UNIX — LINUX based, and the software is a 4GL programming language.
We are seeking a Senior Sales Executive to develop Western Canada. This challenging senior position requires a seasoned sales executive with proven relationship-building skills, a high degree of integrity, professionalism and the ability to work autonomously.
The ideal candidate must have a strong sales background and a proven track record in the hardware merchandising, building materials industry, combined with the knowledge of POS and integrated accounting software.
Our ideal candidate:
- Is highly motivated
- Willing to travel 40% of the time (B.C., Alberta, Saskatchewan and Manitoba)
- Able to work independently and under pressure
- Possesses excellent communication and analytical skills
- Has a university degree with 5 to 10 years professional work related experience
Attractive base salary, commission and over quota achievement bonus, expense account and comprehensive company benefits package. This position is located in Calgary; hiring will be conducted through the Montreal head office. Send resume, relevant accomplishments and salary history by fax to 514.331.2112 to the attention of Yvon C. Beaudet or email firstname.lastname@example.org.
WHETHER OR NOT IT GETS PAINFUL IS UP TO YOU.
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