John Caulfield, Contributing Editor
 vol. x, #20, May 17, 2004

IN THIS ISSUE: NHS: viva Las Vegas Home Depot buys Mexico's largest big box chain Canadian Tire's 1Q profits jump Playboy wants Home Depot girls Home Hardware: cross-promoting to profits Do-it Best plans new distribution center

* * * * * * NOTE: Dollar amounts are stated in the currency of the country from which the story originates. — Michael McLarney, Editor & Publisher * * * * * *
"I am a part of all that I have met." —Alfred, Lord Tennyson (from "Ulysses")
 Home MartMEXICO CITY — Home Depot has strengthened its market position in Mexico by agreeing to acquire Home Mart, that country's first big-box home improvement retailer and currently its second-largest chain. The terms of this deal were not disclosed.The 11-year-old Home Mart operates 20 stores that average 69,000 sq.ft. and generate an estimated US$220 million in annual sales. This deal represents Home Depot's third acquisition in that country in three years: in 2001 it bought four Total Home stores, and one year later acquired four stores that operated under the banner El Norte. Home Depot added to that mix with new stores of its own. With the addition of Home Mart, Home Depot's Mexico operations expand to 39 stores, and puts Home Depot into seven new markets. "We anticipate a smooth transition," says Ricardo Saldivar, president of Home Depot Mexico. Mexico's retail home improvement industry generates an estimated $15 billion in annual sales. The country has 100 million residents living in nearly 25 million dwellings, and the government estimates that Mexico will need at least 23 million more homes by 2030, just to keep up with a population that is expected to grow by 2 million per year. Mexico's president Vicente Fox has made housing formation a priority of his administration, and has set as a goal the construction of 750,000 homes in 100 cities per year by 2006. However, retailers must pick their spots, as home ownership is limited by the fact that two-fifths of Mexico's population lives below that country's poverty level, and the country's mortgage financing system remains restrictive. "We look forward to offering product innovations, compelling store presentations, and exceptional service to even more customers in Mexico," said Frank Blake, Home Depot's executive vp-business development and corporate operations, in a prepared statement. With this acquisition, Home Depot has raised its forecast for total store openings in 2004 from 175 to 185.
Saint John, N.B. — Prince Edward Island's largest home improvement retailer is being bought by J.D. Irving. M.F. Schurman represents a broad-based range of businesses including a chain of retail stores, rental centers, three concrete plants and steel fabrication.The purchase price was not disclosed, but the five Schurman stores have sales of about $30 million, according to the Hardlines Who's Who. The deal is expected to close in August. Both Schurman and Irving-owned Kent Building Materials are members of Independent Lumber Dealers Co-operative, and have worked shoulder-to-shoulder through the years, sharing buying power and best practices. Kent has no stores on P.E.I., but has been expanding aggressively into new markets, primarily in its home province of New Brunswick, over the past couple of years.
LAS VEGAS — Delegates from all over the world gave a solid thumbs-up to the National Hardware Show's first run in this city, which ran last week from May 10 to 12. The show drew 2,303 exhibitors who used 489,023 sq.ft. of exhibit space in the Sands Hotel and Convention Center, spilling into the adjoining Venetian Hotel as exhibitor registration swelled during the final months running up to the event.The show moved here from Chicago following a much-publicized, and rancorous, split with the American Hardware Manufacturers Association. The AHMA turned around and mounted a show of its own, which took place a month earlier than NHS, and was marked by its smaller size, poor attendance and widespread dissatisfaction among delegates. Floor - NHS 2004 - Las VegasHowever, a different mood pervaded the Las Vegas event, as the first morning of the show was jammed with people, preparing their booths for visitors, attending the morning conference sessions, and lining up for their registration badges. An important part of the show was an expanded conference program, which ran from 8 a.m. to 10 a.m. each morning. The show itself then opened at 10 a.m. Above all, NHS attracted that all-important element — buyers. Many of North America's largest home improvement retailers were represented, including Home Depot, Ace Hardware, Rona, Sears and Canadian Tire. International turnout was also strong, with buyers present from companies such as Sodimac (Chile), Mitre 10 (New Zealand), Leroy Merlin (France) and Hornbach (Germany). Other countries walking the show included Switzerland, Greece, Denmark and Mexico. While some anticipated that the show was strongly lawn and garden, it in fact featured three strong components — hardware, seasonal and paint and decorating. Familiar names, such as MD, Zircon, Benjamin Moore, Fiesta, and Minwax, were outnumbered by lesser-known companies, a plus, many buyers admitted, for finding new products. The Las Vegas location attracted a strong contingent of west-coast vendors — including a lot of well-tanned Californians. The show also featured a number of less than conventional exhibitors, reflecting the increased blurring of the lines between various types of retail. Pfizer had a strong presence, promoting, of all things, Listerine. eBay was on hand, as well. The online auction service has been seriously pursuing the business-to-business market over the past couple of years, as a means for dealers and vendors alike to unload unwanted merchandise. U-Haul returned to NHS after an absence of several years. The company's trailer rentals typically serve a new home buyer, a prime customer for a home improvement retailer. And, of course, Hardlines was there in full force, garnering interest for its weekly breaking news service, and for its Annual Conference Series (September 8-9, 2004).
TORONTO — Profitability for Canadian Tire Corp. increased in its first quarter, rising to $35.2 million from $31.9 million a year earlier. Revenue increased to $1.47 billion, up from $1.41 billion a year earlier.At the same time, the company had "uncharacteristically small margins" on gas sales because of "extremely high wholesale gasoline prices," said Canadian Tire president Wayne Sales. Retail performance was strong, with a 5.0% increase in sales during the quarter, and a 3.1% increase in same-store sales. Sales were particularly strong in the hardware, sporting goods, and lawn and garden categories. Nor is the company content to sell hardlines and gasoline. Canadian Tire is aiming to pump up sales by providing busy commuters with prepared meals and movie rentals at its "next generation" convenience stores. The broad-based hardlines retailer will enhance its gas bars with fast and ready-to-prepare foods, such as frozen meats, fresh and frozen pizzas, sandwiches, and fruits and vegetables. The company is also looking to partner with a major movie rental company, and may even introduce photo finishing. The expanded convenience stores should help drive sales at Canadian Tire's petroleum division, which operates 243 gas bars and 52 car washes. That division grew quarterly sales by 3.7%, with a 33.8% rise in car wash sales and a 22.2% hike in convenience store sales. However, the high cost of wholesale gasoline lead to a pre-tax profits drop in the petroleum division of 97%, to $100,000 for the quarter. Canadian Tire plans to open 21 stores in 2004, of which 11 will be the Concept 20/20 format.
OAK BROOK, Ill. — Celebrating its 80th anniversary this year, Ace Hardware Corp. reported that first-quarter wholesale hardlines sales increased 9.2% over first quarter 2003. The gain was driven by an 8.7% increase in domestic sales and an increase in international sales of 27.6%. Net sales were $789.1 million for the quarter, compared with $722.4 million in the same period a year earlier. Sales got a boost from strong performance in seasonal products and a "very successful national President's Day Bag Sale," said Ace president David Hodnik.Net income also rose, up 17% for the quarter to $16.7 million from $14.3 million. Ace's 4,800 independently owned hardware and building materials retailers represent more than $13 billion in sales. The quarter was marked by the opening in April of a new, 1 million-sq.ft. regional distribution center just outside Sacramento, Calif., which replaced a nearby, existing center half that size in response to growing retail sales in the region, and the recent opening of an international buying office in Hong Kong.
ST. JACOB'S, Ont. — A number of programs were introduced or offered in an enhanced form at Home Hardware's recent Spring Market, in an effort to promote complementary retail programs or services. Programs such as the new Purolator "shipping agent depot" work especially well in smaller markets, says Bill Ferguson, dealer support manager at Home Hardware Stores, as a way to extend Purolator's reach as a courier service, while helping bring more people into the local Home Hardware store.Also presented was a new knife sharpening system that dealers can install right in their stores. This is something, Ferguson notes, that will work effectively in any market. "Where do you get knives and scissors sharpened anymore? Now you can get professionally honed knives and scissors with our new cutlery sharpening system."
FORT WAYNE, Ind. — Do-it Best Corp., the industry's third-largest dealer-owned buying group, plans to invest $20 million to develop and build a 525,000-square-foot distribution center, its eighth, on 50 acres in Mesquite, Nev. Construction is scheduled to begin next month, and the DC should be ready to begin shipping to members by January 2006.Right now the co-op is serving its dealer-members in the western U.S. through its centers in Waco, Texas, and Portland, Ore. It chose Mesquite — over other sites in California, Nevada and Arizona — for the town's proximity to Las Vegas, which is 90 miles away, and to local interstate highways. Bob Taylor, Do-it Best's president, said that the buying group has been experiencing strong dealer growth in the southwest for several years. He expects the new DC to attract even more attention from potential new dealers in the region. The co-op expects to hire 65 employees for this facility in June 2005, a number that could double within a year.
COLOGNE, Germany — The second edition of the International Hardware Fair/Practical World Asia will be held in Shanghai October 19-21, 2004, running in tandem with the China International Hardware Show. So far, 40 companies from 11 countries have registered or confirmed their participation. The largest exhibitor contingents at Practical World Asia come from Germany, Taiwan, India, Italy and the U.S. For the first time, new exhibitors from Great Britain, Russia and Mexico will also participate.More than 200 suppliers from four continents are expected, while a total of 1,300-plus exhibiting companies will participate at the combined event. Expansion of the Asian event coincides with the scaling back of Practical World in Cologne, which will now be held every two years. The next one is in March, 2006.
VANCOUVER — TIM-BR-Marts Ltd., the 127-member buying group based here, will move its offices to Calgary, Alta., to consolidate and centralize its operations. The move is expected to take place on or around July 31. Another office, in Winnipeg, Man., which houses the accounting function of TIM-BR-Marts, will be moved into the new Calgary location soon after. BOUCHERVILLE, Que. — Rona Inc., the Canadian home improvement distributor and retailer, has added four new locations to its retail network, two in British Columbia and another in Manitoba. But expansion is not just focused on hardware and building center dealers. Rona has also cut the ribbon at a 12,000-sq.ft. Botanix-L'Union des Jardiniers garden centre in Rivière-du-Loup, Que., the largest store of its kind in the province east of Quebec City. ATLANTA — Georgia-Pacific Corp. has completed its previously announced sale of its distribution division to a newly formed company owned by Cerberus Capital Management, a private, New York-based firm, and members of the distribution business's management team. The transaction was valued at about $810 million. The distribution business will continue purchasing structural panels, lumber and other building products manufactured by Georgia-Pacific for the next six years, as a result of an agreement between the buyer and seller. MONTREAL — RCR has been listed with Lowe's Cos. for the first time, with product shipping into the Wyoming DC and stocking for 85 stores for carpet bar, 425 stores for carpet rolls, supplied from its Elgin, Ill. warehouse. BENTONVILLE, Ark. — Wal-Mart Stores Inc. saw first-quarter profit increase by 16% as sales rose at the fastest pace in more than two years. Net income climbed to $2.17 billion from $1.86 billion. DUNCAN, B.C. — As it prepares to emerge from debt restructuring, Doman Industries has reported a 1Q net loss of $44.3 million, deepening the loss of $14.5 million in the preceding quarter and marking a swing from net earnings of $52.2 million in the first quarter of 2003. The strength of the U.S. dollar versus the Canadian currency accounted for an unrealized foreign exchange loss of $10.0 million. LAKE FOREST, Ill. — Kitchenwares company Salton Inc. posted a third-quarter loss of $58 million on sales of $191.4 million, compared with a loss of $12.1 million on sales of $166.4 million during the same period a year earlier. As a result, Salton says it will cut expenses by at least $40 million to reduce domestic operating costs. Brands include the George Foreman grill and Westinghouse home appliances.
The Retail Council of Canada has announced that Wayne Sales, President and CEO of Canadian Tire Corp., has been named Distinguished Canadian Retailer of the Year. The award will be presented at a gala dinner on Monday June 7 in Toronto, during RCC's annual Convention. By the way, the conference line-up includes Bob Nardelli, president and CEO of Home Depot in Atlanta. For more information, click here.
The trade deficit reached a record high of $46 billion in March, up 9.1% from February, reports the Commerce Department, as imports climbed 4.6% to a record $140.7 billion. But even though imports grew faster than exports, exports were still strong, as sales of U.S. goods and services to other countries were up 2.6% to $94.7 billion.
The New Housing Price Index rose 0.3% in March, down slightly from February's monthly increase of 0.4%. In most places, the increases were caused by higher prices for labor and building materials.Housing starts reached 241,600 at a seasonally adjusted rate in April, compared with 252,900 in March, according to CMHC. This year, 208,500 starts are expected, down slightly from the 2003 level but still the second best year since 1989. Urban multiple starts decreased 6.0% in April to 107,800, while single starts declined 3.6% to 103,000 on a seasonally adjusted annual basis. Rural starts were estimated at a seasonally adjusted annual rate of 30,800 units, a 1.9% decrease from March 2004. Year-to-date actual urban starts were 7.1% higher through April than for the same period last year. Single starts were up 3.0%, while multiple starts were up 11.4%.
"We think that over the longer term there are additional opportunities for us in terms of looking at new concepts, looking at additional acquisitions, looking at the potential of geographic expansion." — Wayne Sales, president and CEO of Canadian Tire Corp. He was commenting on the success of the purchase of clothier Mark's Work Wearhouse, saying Canadian Tire is looking for more acquisitions.
Hardlines has partnered with to offer the industry an easy and affordable way to place job openings on the Internet. The program for visitors is easy — and specially priced! To post a single job on 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.
NEW YORK — Playboy magazine plans to put out a calendar featuring women who work at Home Depot. The Washington Times reports that the glossy magazine is actively soliciting Home Depot's female employees to submit headshots and full-body photographs of themselves either nude or in a bikini. Candidates who want to be considered for the calendar also need to supply proof that they are 18 and that they are actually employed by the home improvement dealer.A company spokesman, Jerry Shields, said that Home Depot was aware of Playboy's campaign, which he said the dealer neither supports nor endorses. He said he did not know how many of Depot's 300,000-plus associates are women, nor could he say whether Depot's human resource policies would, in any way, restrict a willing employee from participating in Playboy's venture. Home Depot would be the latest retailer to get this treatment from Playboy, which has used the "Women of ... " theme for nude pictorials of female employees of such companies as Wal-Mart and Starbucks.

****HARDLINES MARKETPLACE**** Don't miss the products and services on the Hardlines web Marketplace: And check out Hardlines Classifieds on the web: HELP WANTED 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

********************************************************************************** TIM-BR-MART OntarioMARKETING MANAGER 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 or by mail to 6470 Viscount Road, Mississauga, Ontario, L4V 1H3.
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