Small farmers will grow business for Home Hardware

ST. JACOB'S, Ont. —  Home Hardware is looking to rural Canada to fuel growth, and its retail network is well-positioned to capture this lucrative market, according to Bill Ferguson, dealer support manager for Home Hardware. "You often hear that half of Canadians live close to VETCOM (Vancouver, Edmonton, Toronto, Calgary, Ottawa and Montreal)," says Ferguson. "Well, the flip side to that is that the other half lives outside that area, and we are already there," he says. Growth in this market will be spurred by a demographic shift of Canadians leaving cities for a more bucolic life. "People are moving from urban centres to rural areas, so we are making strides in markets like Picton, Ont. and Canmore, Alt. But those urban customers now expect metropolitan service in such places," which Ferguson is confident Home dealers can deliver. There's also a new focus on serving small farmers, says Todd Cressman, product manager–farm, rental and construction for Home Hardware.  "We've always had that category, but we started expanding it a few years back, looking specifically at the rural customer, the family who has a small acreage, and owns a couple of horses or raises their own chickens."  To that end, Home Hardware has doubled its skus of farm–related items, such as fencing and animal husbandry products, from about 500 to 1,000 since 2005. The horsey set is of particular interest.  "The sunny spot in the over–all farm/rural category is definitely equine, so we started expanding the line and adding items, especially in the area of tack— tubs, buckets, grooming products," says Cressman. Home has ramped up its marketing efforts in this area, producing an equine catalogue, expanding its flyer program and establishing a presence at horse shows.

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Sexton focuses on core strengths

WINNIPEG —  While some buying groups may be adding new services and supports in a bid to win members, Sexton will strengthen its position as the no–frills buying option for dealers, says Steve Buckle, vice–president of the buying group, which currently has 287 members. This tight focus will contribute to the company's success, explains Buckle. "Because we don't have banner or advertising requirements, the advantage is that we can operate under a pretty big tent. The main commonality of our dealers is that they operate independently and come together in buying," he says. Sexton has recently picked up a couple of new members, including two locations of the Moneys Worth Liquidators chain in eastern Canada (watch for more on this emerging chain in Hardlines soon – Editor.) "This retailer is expanding quite rapidly into building materials and interior items like cabinets. We see ourselves as being very well-positioned to offer specific services, such as purchasing power and distribution, to those kinds of members," says Buckle. While Buckle won't put a figure on the number of new dealers Sexton would like to have by the end of 2007, he says they are definitely hoping for "more members by the end of this year." But he adds, potential new members "have to be strong and growing". With just 10 Sexton employees overseeing $1.4 billion in retail sales annually, Buckle says the group has earned its reputation as a low-cost partner that allows members the freedom to act in the marketplace. "We're out there selling our vision and our members understand where we fit versus the competition," he says.

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Jenkins named new president of Castle

MISSISSAUGA, Ont. —  Two weeks ago, at a dinner in his honour, Provan Wylie stepped down as president of Canada's oldest buying group after 14 years at the helm. But his replacement was already waiting in the wings. Ken Jenkins had been hired a year ago as vice-president of Castle Building Centres Group Ltd., spending his time preparing for the top job upon Wylie's retirement. Jenkins, who was previously with CGC, will work together with James Jones, who joined Castle last year as director of national marketing and was recently promoted to vice-president of marketing, to lead the dealer-owned group as it positions itself for the future. Castle has some 235 member dealers who generate more than $1.2 billion in retail sales annually.

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Masco adds to contractor services stable

TROY, Mich. —  Masco Corp. has added two western U.S.-based installation companies to its expanding contractor services division. It acquired Erickson Construction, a turnkey residential framer that provides wall panels and millwork to builders in California, Arizona, and Nevada. It also bought Guy Evans, Inc., which installs millwork and bath hardware for builders in Arizona and California. Masco will incorporate these companies into its Masco Services Group, which has relationships with 90 of America's 100 largest builders and installs more than 20 product categories. By adding Erickson, Masco can now offer the entire framing process to builders in its markets, the company stated. Masco projects that these businesses should add $200 million in sales to the company in 2007. Any boost will be helpful, as Masco reported last week that its corporate revenue for the three months ended March 31 were off by 9% to $2.88 billion, and that its net income fell 29.9% to $143 million. The company noted that its first-quarter performance was adversely affected by lower sales volume from installation and other builder-related services, such as door, window and cabinet assembly. The company stated that future economic conditions "remain uncertain."

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French and Chilean dealers to start hardware chain in Colombia

PARIS — France's biggest supermarket chain is teaming up with Chile's biggest retailer to launch a chain of hardware stores in Colombia. Bloomberg News, quoting from an email letter issued by the partners, reports that Casino Guichard-Perrachon SA in France and Cencosud SA in Chile plan to invest up to US$200 million in this venture over the next five years. Casino would own 30% of the venture, Cencosud the rest. It appears that this combination stems from an attempt by both companies to purchase Exito, Colombia's largest food retailer. Casino, which had already owned a minority stake in Exito, recently announced its plans to exercise an option to purchase a 24.5% interest. That announcement led Cencosud to withdraw its bid to purchase Exito outright. The hardware-store venture would allow Cencosud to enter Colombia for the first time.

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Israeli chain expands to Russia

RISHON LEZON, Israel — Home Centers (DIY) Ltd., a leading home improvement retailer here, has opened its first store in Russia, where the company intends to have a dozen outlets by 2009 and 22 by 2012, according to Globes, an online business website. The first store is located in Yaroslavi, Russia, in a shopping mall owned by a subsidiary of Fishman Holdings, Home Centers' parent company and one of Israel's largest conglomerates, which over the next three years intends to invest US$65 million in Russia. The company's second store in Russia will open Volgograd later this year. Eliezer Fishman, the chairman of Fishman Holdings, said that Home Centers, which operates 40 stores in Israel and three in Cyprus, would become a subsidiary of Home Center International in December. Home Center International is a holding company registered in The Netherlands, whose stock, says Fishman, will be traded on NASDAQ or the London Stock Exchange within the next three years. Fishman Holdings has decided to expand its private bond placement to 250 million New Israeli shekels (US$62.1 million), from NIS 175 million.

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