HARDLINES™ Five years serving Canada's home improvement industry May 1, 2000 - Volume vi, #17 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * Home Depot consolidates western buying office * TruServ rebates up, unaffected by U.S. troubles * Rona mounts comprehensive assault on e-retailing * Tim-BR-Marts has best year ever * * * * * *   Check out our Hardlines Classifieds: Looking for new personnel or new lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. Get results fast. Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * Looking for new personnel or new lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. Get results fast. Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * HOME DEPOT CONSOLIDATES ITS WESTERN BUYING OFFICE The western buying office of Home Depot Canada was scaled back as of last week. A number of buyers are being brought back to the main office in Toronto, effective today, leaving behind nine people, including "field merchants," regional buyers who will continue to make regional buys in lumber, some building materials and seasonal products, especially live goods. The field merchants will report directly to Toronto. This arrangement, using regional buyers to handle far flung markets within a division, reflects Home Depot's buying structure in the U.S. Three senior buyers have been put in charge of the entire country: Eric Schmidt, who formerly ran the western office, is now divisional merchandise manager for seasonal, plumbing and heating; Joe Allen is divisional merchandise manager for LBM and hardware; and Rick Keeper is now divisional merchandise manager for décor. In the shuffle, three merchants are gone, including Rob Lawton in the east, and Peter Thompson, a junior buyer for millwork from the west. * * * * * * TRUSERV CANADA NOT AFFECTED BY U.S. ACCOUNTING WOES Recent accounting woes plaguing TruServ Corp. in the U.S. have not affected the Canadian operation in any way, says TruServ Canada president David Grubbe. "Because we operate as a separate company, we're not tied into their financing." TruServ Canada's only fiscal connection is a small annual royalty fee and repayment of the loan financed by TruServ Corp. for the initial buyout of Mcleod-Stedman Inc. More than US$131 million disappeared from the books of the U.S. operation, resulting in a loss of dealer dividends for 1999. In Canada, however, says Grubbe, not only will patronage dividends be paid out, but they are 6% higher than they were for 1999. The discrepancy in the U.S. arose as Cotter and ServiStar/Coast-to- Coast merged operations over the past two years. ServiStar's product costs, were, on average, higher than Cotter's. But product from ServiStar was added to TruServ's inventory at its higher cost, and the lower value was not subsequently written down to reflect TruServ's input costs. * * * * * * RONA WILL INVEST $50 MILLION TO EXPAND ITS E-COMMERCE Rona Inc. has joined with nurun Inc., the information technology division of Quebecor, to expand Rona's online selling capabilities. Under the agreement, nurun will provide the tech know-how to develop Rona's e-commerce hardware business. Rona intends to invest $50 million over five years to underwrite the venture and expects to reap $500 million in sales within three years. The agreement provides for analysis and implementation of five key functions: integration of product databases, an Intranet, customer relation management, business intelligence tools, and an Extranet. The business relationship between nurun and Rona began when a division of nurun called Intellia set up Rona's website in 1998. The company's first foray into online selling began last fall, when it introduced 500 products online at http://www.rona.ca for the Christmas season. Eventually, says Rona president Robert Dutton, the company intends to sell more than 25,000 products online, using Rona's dealer network to help distribute them. The project will initially target Rona's industrial customers, sold under Rona's Industrium banner. Dutton says the new venture is part of an overall strategy to redefine Rona's business. "Using nurun expertise, Rona will develop a business model that goes well beyond the actual online sales site. Needless to say we will be asking some deep questions about our conventional ways of doing business."  
COMPANIES IN THE NEWS   Tim-BR-Marts Ltd. reported its best year ever for 1999, despite the still-slow British Columbia economy. Profits hit a high, says president and CEO Barrie Sali, while sales overall reached $1.1billion. Tim-BR-Marts has 125 dealers with 189 yards. Revy Home & Garden Warehouse opened its "stockyards" location on Saturday, its third big box in the Greater Toronto Area. It's beside a Home Depot and Canadian Tire. The 85,000-sq.ft. outlet features a one-acre yard and 15,000-sq.ft. garden centre. The distribution function of Stanley Garage Doors & Openers in Canada has been taken over by Standor, which will serve the retail dealer and professional installer markets across Canada from 1401 Meyerside Dr., Mississauga, Ont. L5T 1G8. Phone: 905-565-0703. For the first quarter ended April 1, 2000, unaudited net income for Sears Canada Inc. increased 36% to $23.5 million, compared with $17.2 million during the same period a year earlier. Sales for the quarter increased by 13.9% to $1.434 billion, compared with $1.259 billion last year. Same-store sales rose 10%. Emco Ltd. had first quarter sales of $274.5 million, an 11% increase over the last year. Net earnings were $1.0 million, compared with $0.6 million for the same period in 1999. Operating earnings for the first three months of 2000 were $5.9 million, up 47% from $4.0 million in 1999. Emco Distribution's first quarter sales were $209.8 million, up 9%. Westburne Inc. had sales for the first quarter ended March 31, 2000, of $648.3 million, up 26.5% from the same period last year. The increase was due both to acquisitions and strong growth of 10.5%. Canadian operations generated a year-over-year growth of 14% (12.5% excluding acquisitions), primarily in Ontario and Eastern Canada.  
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
Cameron Ashley 17.81 7* 17*
Canadian Tire 46.00 18.10 20.40
Canfor 19.25 4.25 18.00
Goodfellow 12.25 7.50 10.50
Home Depot 64 9/16 58 58*
Hudsons Bay 23.85 12.70 17.60
Lowe's Cos. 51 3/16 49 1/8 49*
Sears Canada 42.50 18.25 36.00
Taiga Forest 14.75 9.40 9.85
West Fraser 41.00 28.00 35.50
    "Creative minds always have been known to survive any kind of bad training." -- Anna Freud
PEOPLE ON THE MOVE   Dave Ferguson, president and CEO of Wal-Mart Canada Inc., was named Distinguished Canadian Retailer of the Year for 2000. The award, presented annually by Retail Council of Canada, honours outstanding achievement and leadership in both the corporate and community sectors. (416362-1711) Some changes at GE Lighting Canada following the departure of Patrick Smith as Canadian general manager: Sue Feere is the new channel manager, consumer, responsible for Canadian sales on the consumer side … Pat Haughey is newly appointed channel manager, commercial and industrial for Canada … Mark Odorico has been named channel manager, automotive for Canada … Kevin Breakingbury has been appointed marketing manager for Canada … Lyne Castonguay is now eastern sales manager … Kathleen Simard is Pacific northwest region sales manager, responsible for Western Canada and Washington, Oregon and Alaska … Peter Gurney is now ballast manager for Canada. (905-849-2924)  
Overheard … How do you like that traffic. They're driving right by Home Depot's parking lot. - Carl Grittner, president of Revy Home Centres, at the opening of the third Revy big box in Toronto. The store is at the back of the Stockyards property, behind a Home Depot and Canadian Tire.   Overheard … "I wish I'd had 'em earlier." - John Kitchen, president of president of Lansing/Revy, comments on the quick payback from large- surface stores, compared with traditional building centres. The new Revy store is expected to be profitable within a year. Noted … Annette Verschuren, president of Home Depot Canada, will be the guest speaker at the first event by the Women's Consumer Products Network. It will be held May 16 at the Sheraton Parkway Hotel in Richmond Hill, Ont. The WCPN is also holding its annual golf tournament on June 27. For more information about either event, call: 905-212-3826; fax: 905-274-7646.  
MARKET INDICATORS   Retail trade dropped by 1.1% in February from January, according to Stats Canada. Total purchases by consumers were $22.3 billion. However, sales were up 4.9% in February over the same month in 1999. Department stores wer down 2.2%. "Other retailers" (including hardware) were down 1.2% from January to February.  
CALENDAR UPDATE:   Hardlines Networking Event Registrations are starting to pour in for our third annual Hardlines Networking Event. This is a great way to hone your personal management skills, meet some colleagues from the retail packaged goods industry and enjoy a live country and western band. It's on May 24 in Toronto at the Rancho Relaxo Bar & Grille. It features Estelle Gee, an organizational expert who will tell us how to clear the clutter from our desks - and our lives. Call Beverly at 426-489-3396, ext. 2, or e-mail: bev@hardlinesfax.com for details! Tickets are only $79 + GST each and include drinks, fajitas, entertainment, door prizes, giveaways, free parking and more! Check out last year's event!  
Hardlines Classifieds   Got new products? Looking for new staff or lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: bev@hardlinesfax.com © 2000 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST=$212.75) per year (GST #13987 0398 RT). Please make cheque payable to McLarneyCom.  
  HARDLINES™ Five years serving Canada's home improvement industry May 1, 2000 - Volume vi, #17 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * Home Depot consolidates western buying office * TruServ rebates up, unaffected by U.S. troubles * Rona mounts comprehensive assault on e-retailing * Tim-BR-Marts has best year ever * * * * * *   Check out our Hardlines Classifieds: Looking for new personnel or new lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. Get results fast. Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * Looking for new personnel or new lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. Get results fast. Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * HOME DEPOT CONSOLIDATES ITS WESTERN BUYING OFFICE The western buying office of Home Depot Canada was scaled back as of last week. A number of buyers are being brought back to the main office in Toronto, effective today, leaving behind nine people, including "field merchants," regional buyers who will continue to make regional buys in lumber, some building materials and seasonal products, especially live goods. The field merchants will report directly to Toronto. This arrangement, using regional buyers to handle far flung markets within a division, reflects Home Depot's buying structure in the U.S. Three senior buyers have been put in charge of the entire country: Eric Schmidt, who formerly ran the western office, is now divisional merchandise manager for seasonal, plumbing and heating; Joe Allen is divisional merchandise manager for LBM and hardware; and Rick Keeper is now divisional merchandise manager for décor. In the shuffle, three merchants are gone, including Rob Lawton in the east, and Peter Thompson, a junior buyer for millwork from the west. * * * * * * TRUSERV CANADA NOT AFFECTED BY U.S. ACCOUNTING WOES Recent accounting woes plaguing TruServ Corp. in the U.S. have not affected the Canadian operation in any way, says TruServ Canada president David Grubbe. "Because we operate as a separate company, we're not tied into their financing." TruServ Canada's only fiscal connection is a small annual royalty fee and repayment of the loan financed by TruServ Corp. for the initial buyout of Mcleod-Stedman Inc. More than US$131 million disappeared from the books of the U.S. operation, resulting in a loss of dealer dividends for 1999. In Canada, however, says Grubbe, not only will patronage dividends be paid out, but they are 6% higher than they were for 1999. The discrepancy in the U.S. arose as Cotter and ServiStar/Coast-to- Coast merged operations over the past two years. ServiStar's product costs, were, on average, higher than Cotter's. But product from ServiStar was added to TruServ's inventory at its higher cost, and the lower value was not subsequently written down to reflect TruServ's input costs. * * * * * * RONA WILL INVEST $50 MILLION TO EXPAND ITS E-COMMERCE Rona Inc. has joined with nurun Inc., the information technology division of Quebecor, to expand Rona's online selling capabilities. Under the agreement, nurun will provide the tech know-how to develop Rona's e-commerce hardware business. Rona intends to invest $50 million over five years to underwrite the venture and expects to reap $500 million in sales within three years. The agreement provides for analysis and implementation of five key functions: integration of product databases, an Intranet, customer relation management, business intelligence tools, and an Extranet. The business relationship between nurun and Rona began when a division of nurun called Intellia set up Rona's website in 1998. The company's first foray into online selling began last fall, when it introduced 500 products online at http://www.rona.ca for the Christmas season. Eventually, says Rona president Robert Dutton, the company intends to sell more than 25,000 products online, using Rona's dealer network to help distribute them. The project will initially target Rona's industrial customers, sold under Rona's Industrium banner. Dutton says the new venture is part of an overall strategy to redefine Rona's business. "Using nurun expertise, Rona will develop a business model that goes well beyond the actual online sales site. Needless to say we will be asking some deep questions about our conventional ways of doing business."  
COMPANIES IN THE NEWS   Tim-BR-Marts Ltd. reported its best year ever for 1999, despite the still-slow British Columbia economy. Profits hit a high, says president and CEO Barrie Sali, while sales overall reached $1.1billion. Tim-BR-Marts has 125 dealers with 189 yards. Revy Home & Garden Warehouse opened its "stockyards" location on Saturday, its third big box in the Greater Toronto Area. It's beside a Home Depot and Canadian Tire. The 85,000-sq.ft. outlet features a one-acre yard and 15,000-sq.ft. garden centre. The distribution function of Stanley Garage Doors & Openers in Canada has been taken over by Standor, which will serve the retail dealer and professional installer markets across Canada from 1401 Meyerside Dr., Mississauga, Ont. L5T 1G8. Phone: 905-565-0703. For the first quarter ended April 1, 2000, unaudited net income for Sears Canada Inc. increased 36% to $23.5 million, compared with $17.2 million during the same period a year earlier. Sales for the quarter increased by 13.9% to $1.434 billion, compared with $1.259 billion last year. Same-store sales rose 10%. Emco Ltd. had first quarter sales of $274.5 million, an 11% increase over the last year. Net earnings were $1.0 million, compared with $0.6 million for the same period in 1999. Operating earnings for the first three months of 2000 were $5.9 million, up 47% from $4.0 million in 1999. Emco Distribution's first quarter sales were $209.8 million, up 9%. Westburne Inc. had sales for the first quarter ended March 31, 2000, of $648.3 million, up 26.5% from the same period last year. The increase was due both to acquisitions and strong growth of 10.5%. Canadian operations generated a year-over-year growth of 14% (12.5% excluding acquisitions), primarily in Ontario and Eastern Canada.  
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
Cameron Ashley 17.81 7* 17*
Canadian Tire 46.00 18.10 20.40
Canfor 19.25 4.25 18.00
Goodfellow 12.25 7.50 10.50
Home Depot 64 9/16 58 58*
Hudsons Bay 23.85 12.70 17.60
Lowe's Cos. 51 3/16 49 1/8 49*
Sears Canada 42.50 18.25 36.00
Taiga Forest 14.75 9.40 9.85
West Fraser 41.00 28.00 35.50
    "Creative minds always have been known to survive any kind of bad training." -- Anna Freud
PEOPLE ON THE MOVE   Dave Ferguson, president and CEO of Wal-Mart Canada Inc., was named Distinguished Canadian Retailer of the Year for 2000. The award, presented annually by Retail Council of Canada, honours outstanding achievement and leadership in both the corporate and community sectors. (416362-1711) Some changes at GE Lighting Canada following the departure of Patrick Smith as Canadian general manager: Sue Feere is the new channel manager, consumer, responsible for Canadian sales on the consumer side … Pat Haughey is newly appointed channel manager, commercial and industrial for Canada … Mark Odorico has been named channel manager, automotive for Canada … Kevin Breakingbury has been appointed marketing manager for Canada … Lyne Castonguay is now eastern sales manager … Kathleen Simard is Pacific northwest region sales manager, responsible for Western Canada and Washington, Oregon and Alaska … Peter Gurney is now ballast manager for Canada. (905-849-2924)  
Overheard … How do you like that traffic. They're driving right by Home Depot's parking lot. - Carl Grittner, president of Revy Home Centres, at the opening of the third Revy big box in Toronto. The store is at the back of the Stockyards property, behind a Home Depot and Canadian Tire.   Overheard … "I wish I'd had 'em earlier." - John Kitchen, president of president of Lansing/Revy, comments on the quick payback from large- surface stores, compared with traditional building centres. The new Revy store is expected to be profitable within a year. Noted … Annette Verschuren, president of Home Depot Canada, will be the guest speaker at the first event by the Women's Consumer Products Network. It will be held May 16 at the Sheraton Parkway Hotel in Richmond Hill, Ont. The WCPN is also holding its annual golf tournament on June 27. For more information about either event, call: 905-212-3826; fax: 905-274-7646.  
MARKET INDICATORS   Retail trade dropped by 1.1% in February from January, according to Stats Canada. Total purchases by consumers were $22.3 billion. However, sales were up 4.9% in February over the same month in 1999. Department stores wer down 2.2%. "Other retailers" (including hardware) were down 1.2% from January to February.  
CALENDAR UPDATE:   Hardlines Networking Event Registrations are starting to pour in for our third annual Hardlines Networking Event. This is a great way to hone your personal management skills, meet some colleagues from the retail packaged goods industry and enjoy a live country and western band. It's on May 24 in Toronto at the Rancho Relaxo Bar & Grille. It features Estelle Gee, an organizational expert who will tell us how to clear the clutter from our desks - and our lives. Call Beverly at 426-489-3396, ext. 2, or e-mail: bev@hardlinesfax.com for details! Tickets are only $79 + GST each and include drinks, fajitas, entertainment, door prizes, giveaways, free parking and more! Check out last year's event!  
Hardlines Classifieds   Got new products? Looking for new staff or lines? Hardlines Classifieds are read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: bev@hardlinesfax.com © 2000 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST=$212.75) per year (GST #13987 0398 RT). Please make cheque payable to McLarneyCom.