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Phone: 416-489-3396
Michael McLarney, Editor & President
mike@hardlines.caBeverly Allen, Publisher
bev@hardlines.caJohn Caulfield, Contributing Editor
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| May 18, 2009, Volume xv, #20 | |
In This Issue:
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“I spent the afternoon musing on Life. If you come to think of it, what a queer thing Life is! So unlike anything else, don’t you know, if you really see what I mean.” —P.G. Wodehouse (Prolific British author and playwright, creator of characters such as the resourceful Jeeves the butler and dimwitted Bertie Wooster; 1881-1975) |
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| Weather, West affect RONA’s 1Q sales | |||||||||||||||||
BOUCHERVILLE, Que. — In its first quarter, RONA inc., Canada’s largest home improvement retailer, had a 7.2 percent decline in consolidated sales (sales through its distribution centre plus sales or percentage of sales from stores owned wholly or in part by RONA). They went from $911.5 million in 1Q 2008 to $846.0 million. The decline was attributed largely to bad weather during the first two months of the year, coupled with the drop in housing starts in Western Canada. RONA blamed especially bad weather in Western Canada in March, where record precipitation levels fell on Alberta.The company experienced a first-quarter net loss of $2.5 million, compared with a net loss of $2.4 million in the same period in 2008, reflecting, the company said, downward pressure on sales in the renovation and construction industries, plus poor weather. Same-store sales fell 8.5 percent.
However, there was good news, as well, as inventory levels continued to decline, distribution sales were up, and commercial sales continued to grow:
Top. |
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| TruServ reports cautious optimism in first quarter | |||||||||||||||||
| WINNIPEG — Despite a slowdown toward the end of last year, hardware wholesaler TruServ Canada managed to see an increase in shipments to its dealers for the year. Sales by TruServ’s member dealers, who operate under the True Value Hardware, V&S Variety, and Country Depot farm and hardware banners, enjoyed an overall sales increase of between 2 and 3 percent, says company President and CEO Bill Morrison.The last quarter of 2008 was when the economic slowdown began to really hit his dealers, he says, although there were regional variations. Saskatchewan and Manitoba stayed relatively strong, while Alberta, subject to the vulnerability of the oil industry, was down for the period. The slowdown continued into the first quarter of this year, as well, as bad weather took its toll on much of the West. TruServ dealers began to bounce back in the spring, although, says Morrison, they retained “a little bit of caution. A lot of dealers were either flat or up or down 1-3 percent,” he noted. | |||||||||||||||||
| Canadian Tire Retail sales up in first quarter | |||||||||||||||||
TORONTO — Canadian Tire reported a drop in first-quarter sales of 2.7 percent vs. the same quarter a year ago. The decline was due mainly to lower prices at Canadian Tire’s gas bars. However, retail sales by the Canadian Tire Retail Division were actually up 4 percent, reflecting, says the company, strong sales through much of the quarter, especially in seasonal products. Net earnings were down 25.9 percent, while adjusted net earnings were down 10.9 percent for the period, reflecting higher distribution and operating expenses in the Retail Division, as a new eastern distribution centre was completed during the quarter.
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| Information, Networking Play Key Role at NHS | |||||||||||||||||
LAS VEGAS — The National Hardware Show, held here May 5-7, featured a range of information sessions and seminars, providing a full education component in addition to the aisles of new products on exhibit.As part of a new International Sourcing Convention at NHS, our own editor, Michael McLarney, hosted a panel that talked about how to deal with Asian factories. This International Sourcing Session, sponsored by OnSpeX, the quality assurance and product testing organization, featured Larry Lucyshyn, vp sales for The MIBRO Group; John Tizzard, president of Tizzard Marketing; Greg Orloff, manager, new business development for OnSpeX, and Manuel Gonicman, president of California Air Tools and Goni.
 The North American Retail Hardware Association (NRHA) teamed up with the show’s organizer, Reed Exhibitions, to create an All-Industry Summit. This ongoing event, located on a stage right at the entrance to the show, provided delegates with a wide range of seminars that included NRHA’s own research. Topics at the All-Industry Summit ranged from examining the impact of global economics on the home improvement industry to focusing on the impact of today’s green movement on the home improvement industry.
(If you missed the International Sourcing Session at NHS in Las Vegas, we’ve got good news for you. The session is being reprised in Toronto in mid June with a special industry update from 2Q HQR. Stay tuned.)
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| NEWS IN BRIEF |
| TORONTO — Canadian Tire is launching a new savings program for customers undertaking home improvement and renovation projects this spring, called “Small Jobs Big Returns”. From May 9-June 5, customers who buy eligible home improvement products can receive $25 for purchases of at least $199, $75 for purchases of $299 or more, and $150 for purchases of $499 or more. The rebates come in the form of Canadian Tire gift cards.MONTREAL — At its annual general meeting last week, executives from RONA inc. assured investors that the company intends to keep up an aggressive pace of dealer recruitment. In fact, it intends to add up to $150 million in additional sales through the addition of new independents during fiscal 2009. Robert Dutton, president and CEO of RONA, said that 56 percent of the industry is still in the hands of independent dealers, and one-quarter of them don’t have a succession plan in place. TORONTO —Home Outfitters, the kitchen, bed and bath specialty chain owned by Hudson’s Bay Company, has added five new locations, bringing its nation-wide total to 67. The retailer hosted simultaneous grand-opening events on May 9, featuring special sales in each location. The new stores are in Victoria and Coquitlam, B.C.; Winnipeg; and Burlington and Vaughan Mills, Ont. BENTONVILLE, Ark. — Wal-Mart Stores reported diluted earnings per share for the first quarter of fiscal year 2010 of $0.77. Net sales for the period were $93.47 billion, a decrease of 0.6 percent from $94.04 billion in the first quarter of last year. Without the negative impact of currency exchange rates, equal to $4.84 billion, net sales for the quarter increased 4.5 percent to approximately $98.31 billion on a constant currency basis. ATLANTA — Net sales for Newell Rubbermaid for the first quarter ended March 31, 2009 were $1.20 billion, a 16 percent drop from $1.33 billion for the same three-month period a year earlier. Excluding acquisitions and foreign currency, sales declined approximately 15 percent domestically, and 14 percent for the company’s international business. However, Rubbermaid reports it has begun rehiring, and is looking to fill 165 positions worldwide. This comes just months after it announced it would lay off upwards of 1,000 people. PARIS — Compagnie de Saint-Gobain has secured a new four-year bond issue valued at €750 million with an annual coupon of 6 percent. The bond issue will serve to refinance existing debt. Earlier this month, Saint-Gobain reported consolidated first-quarter sales of €8.78 billion, compared with €10.30 billion for the year-earlier period, a decline of 14.8 percent. Saint-Gobain, best known in this country as the parent of CertainTeed, is a €43.8 billion ($69.3 billion) company, with 209,000 employees in 59 countries. MISSISSAUGA, Ont. — Walmart Canada will invest $115 million to build a distribution centre in Balzac, Alta. The 40,000-square-foot facility, which Walmart claims will be one of the largest refrigerated buildings in Canada, will serve as a distribution hub for fresh food destined for Walmart stores in Western Canada and represents the expansion of Walmart’s Supercentre format. The DC will open in late 2010 and will be operated by Canadian logistics firm Centric Retail Logistics. Walmart Canada says it has invested $220 million in the past year to modernize and expand its distribution network. The network now supplies 312 stores nationwide from eight distribution facilities. CHARLOTTE, N.C. — Pro-Build Holdings has revealed it will close its corporate offices here, laying off about 65 people by the end of the year. The facility is one of four regional offices for Denver, Co.-based Pro-Build. MINNEAPOLIS — Zareba Systems, the maker of electronic perimeter fence and security systems, reported net sales for the third quarter of $6.7 million, down from $7.0 million a year earlier. Net income for the third quarter was $78,000. Net loss was $489,000, or $0.20 per share. Net sales for the first nine months of fiscal 2009 were $20.5 million, compared with $22.4 million in fiscal 2008. |
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PEOPLE ON THE MOVE |
| At CertainTeed Gypsum, Eric Marceau has been named director of sales for Quebec and Eastern Ontario. He was formerly warehouse manager at the company’s facility in Montreal. The Quebec sales team will report to Marceau. He has a degree in chemistry and a Master’s in business. (514-889-2116; eric.marceau@saint-gobain.com )To place a listing in our “People on the Move” section, please send me the information, including the person’s name, title and contact email or phone number, if desired at mike@hardlines.ca. We reserve the right to edit items for length. —Michael |
| ECONOMIC INDICATORS |
| The composite price index for non-residential building construction decreased 4.2 percent to 145.1 in the first quarter, compared with the previous quarter. The quarterly decrease was mostly the result of declines in construction material prices and competitive conditions due to a weaker non-residential building construction market, most notably in Western Canada. (Stats Canada) |
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NOTED… |
| RONA’s latest results included a drop in same-store sales of 8.5 percent enterprise-wide. However, independent dealer-owners in RONA posted a comparatively strong retail performance, with a decline of only 3.2 percent in same-store sales in the first quarter. |
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