John Caulfield, Contributing Editor
vol. xi, #22, May 30, 2005

IN THIS ISSUE: • AWARD makes landmark alliance • Big box still big draw for women • Taiga to convert to income trust • Country Depot evolves with best practices • Home Depot teams with Ford • Lowe’s partners with realtors • Menard’s pollutes * * * * * *

“A prohibitionist is the sort of man one wouldn’t care to drink with, even if he drank.” H. L. Mencken (American humorist and author)
TORONTO – Women continue to be a driving force in both what and how home improvement projects are undertaken, says a new survey conducted by ACNielsen Canada for Hardlines Quarterly Report. “Women in Home Improvement,” which appears in the latest issue of Hardlines’ sister publication, HQR, reveals that even though women are spending more money – and making more decisions – at hardware stores, building centres and big boxes, not all of these retail formats are succeeding in appealing to this important customer. Women either singly or jointly with a significant other, are involved in 45% of the decision-making as to where to shop. That’s a significant increase from 2001, when the level was only 35%. Hardware stores remain a choice for women, thanks to their convenience, a characteristic highly valued by most women surveyed. However, in many cases, they value a one-stop shopping experience, which only the wide selection available in a big box can provide. Meanwhile, the efforts of one of Canada’s leading hardlines retailers, Canadian Tire, to woo women more effectively, is beginning to show positive results, according to the findings of the survey. The first choice for shopping for home improvement projects and products has changed since 2001, when the first “Women in Home Improvement” survey was conducted. Hardware stores have been the biggest losers, while big boxes continue to appeal most strongly to women. Although their overall popularity has in fact declined since 2001, big boxes remain the destination of choice for women with children. (“Women in Home Improvement,” a survey by ACNielsen exclusively for Hardlines, appears in the 2Q edition of our sister publication, Hardlines Quarterly Report. For more information, <click here> or contact Isabel Bisong here at the World Headquarters: or 416-489-3396.)
BEDFORD, N.S. – Members of the Atlantic LBM buying group AWARD voted on Friday overwhelming to join Tim-BR-Marts Ltd. The vote follows two months of evaluating other options, which included proposals from Home Hardware, other buying groups, and a submission by Rona inc. The group’s 52 members also considered continuing as an independent group. The result of the vote was that 50 out of 52 members – 96% – were in favour of joining Calgary-based Tim-BR-Marts. Tim-BR-Marts is already connected to AWARD through its joint membership in an umbrella buying group, Matreco. Another Matreco member, Homecare (TIM-BR Mart Ontario) elected to join with Tim-BR-Marts at the end of last year. “We have enjoyed a 25-year buying affiliation and we share the TIM-BR Mart brand across the country,” said Kevin Pritchett, chairman of the board of AWARD. “Joining Tim-BR-Marts makes sense for our members culturally and financially. This union will help our members buy better and sell better.” In the same meeting, John Morrissey was elected COO and general manager of AWARD, effectively replacing Tom Smith, who exited as head of the group following an unsuccessful proposal forwarded by Rona on March 3. Tim-BR-Marts has been at the centre of an effort to consolidate the many buying groups extant in Canada. Besides the addition of Homecare’s 150 stores, the group has added a number of other independents, including Nelson Lumber, a major independent in Saskatchewan, with nine stores, which departed Tim-BR-Marts about three years ago. The group now comprises some 400 locations representing more than $2 billion in sales per year.
KINGSTON, Ont. – The doors opened officially last week to TruServ’s very first ground-up Country Depot store in Western Canada. But much of the direction and merchandising philosophy of that store, in Okotoks, Alta., is, in fact, being tested and honed in a store some 3,700 km away. Country Depot is a banner first developed more than a decade ago to capture the evolving rural market. With more and more migration from the big cities, and gentrification of the farm market in general, Country Depot packaged up the farm and feed format, typical of a “Co-op” store, into something more defined. Country Depot has four main focuses: farm and hardware, work wear, garden, and pets and animals. TruServ now has 50 Country Depot stores, but the opening in Okotoks was a milestone as a foothold for the banner in Western Canada. But like each of TruServ’s banners, which also include True Value and V&S Variety, Country Depot is being subjected to a Best Practice program. The metrics of a single store are scrutinized on a weekly – and daily – basis. Everything from traffic, basket size, and customer closing ratios are measured, in an effort to arm independent retailers in the face of mounting competition from large-surface retailers such as Wal-Mart and Sobeys. And the store that is the test case for Country Depot’s best practice program is here in Kingston, mid-way between Toronto and the nation’s capital, Ottawa. From this sophisticated benchmarking exercise have come some simple results. For example, the Kingston Country Depot, which weighs in at 6,000 sq.ft. of retail, introduced shopping carts last winter. “People were terrified at first,” says Marie Havekes, who, with her husband Bill, owns the store. Other changes, though more subtle, were likewise accepted. For example, with the strong emphasis on pets and livestock in the store, a section devoted to accessories for dogs and cats was put right at the front, generating more impulse purchases. But merchandise for animals is throughout the store. At the very back is the tack shop, complete with wooden rails and a metal corrugated “roof” overhanging from the back wall. “People don’t hesitate to spend money when it comes to their pets – and horses,” says Havekes. Another growing category is birds and bird feed, especially with older customers. “Retirees spend a ton of money on birds.” While the store already has an extensive lawn and garden department – including a 2,500-sq.ft. outdoor garden centre – TruServ has been encouraging Bill and Marie to take on more decorative garden products, something that was met with some resistance at first. But despite her admitted skepticism, Marie says the gift and décor items are gaining in popularity.  
BURNABY, B.C. – Taiga Forest Products Ltd. has announced its intention, approved by the board of directors, to convert to an income fund-like structure using stapled units. The company, one of Canada’s major building materials distributors, released the news in tandem with its results for the year ended March 31, 2005, wherein sales increased more than 22%.The conversion will occur by way of a plan of arrangement that must be approved by Taiga shareholders at the company’s annual meeting, which will be held June 27, 2005. Under the reorganization, current shareholders will exchange their common shares of Taiga for stapled units of Taiga Building Products Ltd. Each stapled unit will consist of one common share and a 14% unsecured subordinated note of the newly formed Taiga Building Products. The timing for the conversion is good, says Bill Kushlick, president and COO of Taiga. “Lots of companies in Canada are going to an income trust and we think that it’s a good investment strategy,” he adds, noting that low interest rates combined with aging baby boomers looking for higher yields provide a good milieu for the move. CanWel, another B.C.-based building materials distributor, recently made the switch to an income trust structure, as well. Taiga will float a treasury offering and secondary offering of stapled units, totaling approximately $110 million. Following the reorganization and treasury offering, Taiga expects that the new company will have approximately 36-37 million issued and outstanding stapled units. Net proceeds of the treasury offering will be used to reduce indebtedness under Taiga’s existing credit facilities. Taiga has retained BMO Nesbitt Burns Inc. to act as its financial advisor in connection with the reorganization, which is not expected to affect the business and operations of Taiga. (See “Companies in the news” for Taiga’s year-end results–MM)
NEW YORK — Ford Motor Co. and Home Depot have entered into a national strategic marketing agreement whereby Ford pickup trucks will be showcased right in Home Depot stores. The auto maker will display its F-series Super Duty and F-150 pickup trucks at the retailer’s 1,700 retail outlets across the United States through August 5. Ford is also offering potential customers who buy or lease these vehicles an incentive that will allow them to choose either one of four home-improvement packages, valued at up to US$870, or a US$500 Home Depot gift certificate. The promotion also includes a sweepstakes for a chance to win a Ford F-150 or a $10,000 gift certificate from Home Depot. The 3,800 Ford dealers in the U.S. will feature Home Depot advertising in their showrooms, according to, the automotive pricing guide. BrandWeek reports that Ford developed the program, called “Bring it Home,” in-house with help from the advertising firm JWT in Detroit. The campaign will include network television, print, point of sale and online ads. Ford will also expand its relationship with Cabela’s, setting up truck displays in the outdoor outfitter's stores, according to Brandweek quoted Phil O’Connor, the F-Series’ marketing manager, who explained that the national effort is an extension of a program Ford and Depot conducted last year in Atlanta, Dallas and north Florida. That promotion, he said, featured a chance to win a Ford F-150 SuperCrew Lariat 4x4 or a US$10,000 Depot gift card. Last fall, Ford showcased its next-generation F-series Super Duty truck in nearly 400 Home Depot stores in six markets nationwide. The event led to 7,000 test drives and more than 500 truck purchases. O’Connor claimed that his company’s market research shows that DIYers are 43% more likely to buy a pickup truck than the average consumer.
MOORESVILLE, N.C. — Lowe’s Home Improvement Warehouse will provide savings, rebates and home improvement tips to homebuyers as part of a marketing program it has entered into with Washington-based National Association of Realtors. Through NAR’s Realtor VIP Alliance Program, consumers who buy, sell or are looking to purchase a home will receive these benefits, courtesy of Lowe’s, from the local realtor they are working with. The Home Improvement Research Institute estimates that 52% of homebuyers make improvements to their homes within the first year of that purchase, and spend, on average, US$4,900, a figure that rises to an average of US$7,000 among buyers of older homes. “Our customers have varying needs, and it is our business to ensure that they have the products and services they need to suit their lifestyles,” said Bob Gfeller, senior vice-president for Lowe's, in a prepared statement.
BURNABY, B.C. – Taiga Forest Products had sales for its fiscal year ended March 31, 2005 of $1.33 billion, an increase of 22.4% over $1.09 billion in fiscal 2004. Net income before tax improved to $36.6 million, from $15.2 million in the prior year. Net income increased to $26.7 million, from $10.5 million, an increase of 250%. Sales for the three months ended March 31, 2005 were $282.4 million, up 3% from $274.3 million for the same period last year. Net profit for the quarter was $14.6 million, compared to $3.7 million for the same period last year. ST-ANTONIN, Que. – Bargain Building Materials/Matériaux à bas prix has moved into expanded warehouse and office facilities. The 25,000-sq.ft. expansion will better enable the privately held retailer to service its 20 building centres and growing roster of franchised dealers. TORONTO – Canadian Tire Corp. has struck an exclusive distribution deal to sell a new line of Troy-Bilt outdoor power equipment. The line includes mowers, tractors, leaf blowers and chain saws. EAU CLAIRE, Wis. — Menard’s, the third-largest home improvement dealer in the U.S., pleaded guilty to discharging pollutants in state waters without a permit between September 2001 and September 2003. The misdemeanor could cost the retailer anywhere from $1,000 to $2.5 million in fines, according to Dawn Sands, Menard’s attorney and spokesperson. The state dropped a felony count of disposing hazardous wastes without a license after an Eau Claire County judge expressed doubts prosecutors could support the more serious charge. Sands asserts that the discharge from Menard’s distribution center here was unintentional and was shut off as soon as state officials alerted the company to the problem. ISSAQUAH, Wash. – In its third quarter ended May 8, Costco Wholesale Corp. reported net sales of US$11.75 billion, up 10% from US$10.67 billion during the third quarter of fiscal 2004. Same-store sales were up 7%. Net income for the third quarter increased 6% to US$209.8 million, from US$198.7 million during the third quarter of fiscal 2004. Net sales year-to-date increased 10% to US$35.50 billion, from US$32.31 billion. Same-sales during the first thirty-six weeks of fiscal 2005 increased 7% over the prior year’s level. LONDON – Kingfisher, which owns the DIY chains B&Q and Castorama, saw sales rise in its first quarter by 2.2% to £1.94 billion, even as same-store sales fell sharply by 5.6%. Retail profits also fell, by 15.6% to £125.9 million. In the U.K., Kingfisher’s B&Q division experienced a 2.8% drop in sales, to £1 billion, with same-store sales down 7.7% and profits off by 16.5% to £73.2 million. In France, the Castorama business had sales of £382.3 million, while profit fell 27.3% to £20.2 million and same-store sales declined by 4.4%. The French Brico Depot chain, however, enjoyed a sales increase of 23.1%, to £269.3 million, and the B&Q business in China grew 38.7% to £44.1 million. TORONTO – Sales at Hudson’s Bay Co. for the first quarter ended April 30 declined 1.4% to $1.48 billion, reflecting a comparable decline in square footage operated by the company, and sales declines in the Bay (excluding Home Outfitters) and Zellers. The drop in sales deepened the department store chain’s loss to $41 million from $23 million. Same-store sales in the first quarter of 2005 decreased 2.1% at the Bay (including Home Outfitters) and increased 0.4% at Zellers. OTTAWA – Costco Canada has launched a website for shoppers,, with more than 1,000 products being offered. Products available range from computers and sports equipment to furniture. Approximately 80% of the products featured on the site are different than those offered in the warehouse, and there’s more emphasis on seasonal and off-season items. As new products are added, 3,000 products are expected to be available online within the next few months. NIAGARA, Ont. – Direct Energy Essential Home Services, North America’s largest competitive energy and home services retailer, is expanding its list of at-home services, with the launch of its Plumbing and Drain service in the Niagara region. Homeowners here can call Direct Energy for plumbing and drain servicing, and sign up for protection plan for problems like a clogged drain or broken pipe.
Mario St-Louis has been appointed vice-president, big box store operations for Eastern Canada at Rona inc. He will be responsible for Rona’s Le Régional and L’entrepôt locations, including the two Ottawa region stores, in Nepean and Gloucester. He will also be in charge of store operations for Réno-Dépôt. NAIMA Canada, a trade association for manufacturers of fibre glass, rock wool and slag wool insulation in Canada, has announced the appointment of Stephen Koch as its first executive director. Koch has been working with NAIMA Canada as an independent consultant since the association’s inception in July 2004. As executive director, Mr. Koch will lead NAIMA Canada in promoting its energy efficiency and environmental preservation initiatives. NAIMA Canada membership includes Cafco Industries Inc., CertainTeed Corp., Fibrex Insulations Inc., Johns Manville, Knauf Insulation, Owens Corning Canada, and Roxul Inc.
Canada’s leading indicator rose 0.4% in April, reports Stats Canada. That’s the largest advance since last fall, when the Canadian dollar began to retreat from its 12-year high. Labour demand and domestic spending both improved. The housing index was the only component to decline, continuing to back off slowly from its 25-year high set last July.
April was a strong month for sales of existing homes in the U.S., says a report by the National Association of Realtors. Sales were up 4.5% to an annual rate of 7.18 million units. The national median price for previously owned homes was also up last month, hitting $206,000, up 15.1% from the same month a year earlier.
“I believe that the difference between the [retail] winners and the losers today is how they use information.” – Brian Kilcourse, chief strategist, Retail Systems Alert Group, speaking at the recent meeting of members of the Presidents Council during the National Hardware Show in Las Vegas. Speaking on IT solutions and best practices, he noted that retail is late to catch on to the supply chain efficiencies that IT can offer. But all is not lost, he added, as retailers can learn from more sophisticated sectors, such as manufacturing, aerospace and financial services.

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

RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America's leading manufacturers, managing their lines for Canada's top hardware retailers, big boxes and mass merchandisers. Contact Dave Leslie at 905-702-9443, to find out how Noral can boost your sales in Canada. (01/05) **********************************************************************************  



Manchester Tank NORTH AMERICA'S "PREMIER MANUFACTURER" of Propane Cylinders

NOW available in Canada


(5 lb. through 420 lb. propane cylinders available)

. Recognized Market Leader . . Unsurpassed Quality . . Reliable Delivery . . Outstanding Customer Service . Contact us today for more Information
Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2005 by Michael McLarney. HARDLINES™ the electronic newsletter Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: Beverly Allen, Director of Sales & Marketing: Isabel Bisong, Circulation Manager: ______________________________________________ THE HARDLINES "FAIR PLAY" POLICY: Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week - but let us handle your internal routing from this end! ______________________________________________ Subscription: $241 (Canadian subscribers add $16.87 GST = $257.87 per year/ GST #13987 0398 RT). Secondary subscriptions at the same office are only $38 (Canadian subscribers add $2.66 GST = $40.66). Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to Hardlines/McLarneyCom.