November 15, 1999 - Volume v, #46 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154  
NEWSMAKER OF THE YEAR AWARD: Next year will mark the fifth anniversary of Canada's one and only newsletter for the home improvement industry. Be sure and join us at the Hardlines Show Breakfast at the Canadian Hardware and Building Materials Show on February 6, 2000. There we'll award the Newsmaker of the Year &endash; and kick off the show with a rock n' roll twist. Remember, this event is for Hardlines subscribers and guests only &endash; so don't miss it! - Michael * * * * * * * WHO ARE THE TOP PLAYERS IN THE U.S.? I get asked this question a lot, so now there's a handy directory with the answers you need. Our brand new TOP 50 Directory of leading home improvement retailers in the U.S. is a handy, affordable way to check out the action south of the border. It's not as comprehensive as our blockbuster Who's Who Directory of Canadian Retailers, so we've priced it accordingly &endash; just $45 for subscribers. Call or e-mail us for more information.  
This week in Hardlines: LBM EXHIBITORS GET ON BOARD CHS FOR 2000 The next edition of the Canadian Hardware and Building Materials Show, February 6-8, 2000, is the first to encorporate the LBMAO's own show and convention. The Canadian Home Centre Show was folded in favour of joining forces with the CRHA's own hardware show. CHS has already identified more than 50 new exhibitors who formerly exhibited at the LBMAO show. Many other LBM companies that had previously exhibited in both shows will return to CHS in 2000. The LBMAO will host an industry "Icebreaker" reception on Saturday night, February 5. The Industry Gala, mounted by the CHHMA to benefit the Easter Seals Society of Canada, will be held on Sunday night, February 6. Monday's Awards Night honours the industry's outstanding products and the LBMAO Annual Gala Dinner takes place later that same night. And of course, Sunday morning the show kicks off with the fifth Annual Hardlines Show Breakfast (see shameless promotion elsewhere in this issue). More than 20,000 delegates are expected to register as CHS celebrates its 95th anniversary in Y2K. For more information, call 905-821-3470; fax: 905-821-8946; e-mail: crha@crha.com, or click here: www.crha.com * * * * * * * RESULTS POISE SODISCO-HOWDEN FOR FUTURE ACQUISITION Sodisco-Howden Group's third quarter sales results showed a 20% increase over 3Q 1998 and a year-to-date sales increase of 15.1% to $319.1 million. This turnaround of the hardware wholesaler's fortunes marks its eleventh consecutive quarter of improved earnings &endash; and "positions the company for a possible future acquisition," says Sodisco-Howden president and CEO Tony Molluso. Buoyed by 3Q earnings of $3.6 million on sales of $113.7 million, versus $2.7 million on sales of $94.8 million a year earlier, Molluso repeated his desire to consider growing the company by acquisition. (For the nine-month period, net earnings grew 155% from $2.0 million to $5.1 million.) Molluso had previously announced (Hardlines, Oct. 25/99) that two companies were under consideration for possible acquisition, one of which he expected to close by year's end.  
COMPANIES IN THE NEWS The Ontario Municipal Board has rejected Home Depot Canada's proposal to erect a store at Cherry Street and Lakeshore Boulevard in downtown Toronto's waterfront area. According to an article in the Globe & Mail on Friday, the proposal met with opposition from downtown businesses, politicians and associations. Large retail development does not fit in with the OMB's plans for redeveloping the waterfront. The area may also be developed as part of a proposal for Toronto to bid for the Olympics in 2008.   UFA Farm Supply Co-op has reached an agreement with Ace Hardware Canada to have Ace supply some hardware to two of its 34 corporately owned stores in Alberta on a test basis. The stores, in High River and Claresholm, will increase their hardware offerings with new programs from Ace. Product lines are now being finalized, with plumbing, electrical and hardware under consideration.   Amazon.com Inc. is broadening its product selection online to include home improvement products, as well as computer software and video games. The launch was timed to the Christmas season, steered by Amazon president Joe Galli, former president of Black & Decker. Products will include hardware, hand and power tools &endash; and even benchtop tools &endash; and all will have a US$4.95 shipping charge. Amazon recently bought a North Dakota-based catalogue company, Tool Crib, to facilitate its expansion into home improvement. Although reportedly being the most visited site on the Internet, Amazon has yet to make a profit after four years. (It lost US$197 million in the third quarter.)   Last week, RONA opened its latest Le Rénovateur Régional, this one in St-Hyacinthe, Qué. The 90,000-sq.ft. store carries 40,000 SKUs. The dealer-owners are André Gagnon and Jean-Guy Hébert (who was also named RONA's retailer of the year). Both are also co-owners of the Rénovateur Régional in Granby, which opened September 15.   Five Wal-Mart stores opened last Friday: Leamington, Owen Sound and Pembroke, Ont.; Langley, B.C.; and Saint John, N.B.   Home Depot in the U.S. now sells gift certificates online. Called Home Depot Gift Cards, they can be purchased in amounts of $10, $25, $50 or $100, redeemable only at Home Depot stores in the U.S.   Corning Consumer Products Corp. (CCPC) Holding Co. Inc. has completed the acquisition of General Housewares Corp., following approval by General's shareholders to accept US$28.75 per share in cash. General's key brands include Chicago Cutlery and Olfa. Annual sales in 1998 were U.S.$97 million.   Nu-Gro Corp. has broken off negotiations to purchase Consolidated Envirowaste Industries Inc. Nu-Gro will seek alternative ways to expand its soil operations in Western Canada.  
CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
Canadian Tire 46.00 29.00 34.30
Canfor 13.30 4.25 14.80
Goodfellow 11.80 6.00 11.10
Hudsons Bay 23.85 4.00 17.20
MacMillan Blo. 27.85 12.05 24.50
Sears Canada 34.35 15.25 37.10
Taiga Forest 14.75 8.65 13.50
West Fraser 41.00 9.05 33.00
"There is no fear in love; but perfect love casteth out fear." - John iv: 18
PEOPLE ON THE MOVE Pierre Langevin has joined In-Store Services Canada Inc. as director of business development. Langevin has spent 30 years in the industry and will now work with In-Store Services to meet the growing demand for merchandising services. One of his initial responsibilities will be to establish the company's presence in Québec. (905-507-3119)  
MARKET INDICATORS Housing starts in Canada slipped 2.2% in October to 147,500 units, down from 150,800 units seasonally adjusted in September, according to CMHC. Urban multiple starts rose 0.7% to 54,700, while urban singles decreased 5.1% to 72,100 units. * * * * * * * The new housing price index increased 1.2% in September over the same month a year earlier. This was the highest annual increase since December 1997, says Stats Canada. This index of contractors' selling prices for new houses rose 0.2% from August to September. Calgary had the highest annual increase (+4.3%), while significant increases also occurred in Halifax (+3.9%) and Ottawa-Hull (+3.6%). Vancouver and Victoria had the greatest decreases (-3.3% and &endash;4.6% respectively). St. John's increased 1.1%, Montréal was up 2.7%, Toronto up 1.7%, Winnipeg up 3.0% and Edmonton up 2.3% over September 1998.  
"As of today, more than $50 million worth of forest products have been sidelined or diverted to other ports at great cost to industry. As this lock out drags on, sales will be lost and valued customers will be snapped up by competing jurisdictions. Even the ability to maintain operations at our mills will soon be in jeopardy." &endash; from a letter to Prime Minister Jean Chrétien from the Council of Forest Industries, urging the PM to legislate the re-opening of the Port of Vancouver's and other B.C. ports. Labour Minister Claudette Bradshaw later imposed a Sunday deadline for both sides to reach a collective agreement. "It's the merchandising support that they're bringing to the table that is really the coup for them." &endash; Barry Hofstetter, senior buyer for UFA, on the recent supply agreement it has signed with Ace Hardware Canada.  
COME TO THE COLOGNE HARDWARE FAIR WITH HARDLINES: Join us to attend the world's largest hardware show March 12-15, 2000. Here's why:
1. Escorted travel from Toronto to Cologne via Frankfurt -let us help you make your voyage worry-free by taking care of the details.
2. "Canada Night" Reception in Cologne&endash; A night of networking with fellow Canadian retailers and vendors, and a presentation by key European buyers. 3. Pre-show seminar &endash; Hardlines and the Canadian office of the Cologne Trade Fairs will jointly present tips on how to maximize your presence at the Show. 4. Hardlines Handbook of the European market &endash; a helpful guide to European markets. 5. Store tours &endash; We'll take you on a tour of the European big-boxes and independents so you can take home the latest ideas for merchandising, packaging and store layout. 6. Spouses' program &endash; Join us to discover the sights and scenes of historic Cologne. Come to the Cologne International Hardware Fair/DIY'TEC with HARDLINES, March 12-15, 2000, in Cologne, Germany. Travel to the International Hardware Fair in Cologne to position yourself as a key player in the 21st century. Find out where the growth opportunities lie, discover how the world's markets are changing and learn about the latest new products. Hardlines has arranged special travel packages that will make your trip painless and affordable. Not only will we help you with your travel arrangements, but we'll also ensure your trip is beneficial to both you and your company. Affordable, comprehensive travel packages are available in two- and five-star accommodations. Just email us for more information. Our recommended Canadian travel agent will contact you to arrange your personalized travel package.  
Hardlines Classifieds  
FIND THAT NEW PERSON, NEW AGENCY OR NEW LINE WITH HARDLINES CLASSIFIEDS. THEY'RE A LOW-COST WAY TO REACH MORE THAN 2,000 PEOPLE EVERY WEEK. ONE AD RUNS FOR TWO WEEKS IN THE FAX EDITION AND THREE WEEKS IN THE E-MAIL EDITION OF HARDLINES. TO PLACE YOUR CLASSIFIED AD, JUST CALL BEVERLY ALLEN AT 416- 489-3396, EXT. 2. * * * * * * * 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: hardline@terraport.net © 1999 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.  
    November 15, 1999 - Volume v, #46 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154  
NEWSMAKER OF THE YEAR AWARD: Next year will mark the fifth anniversary of Canada's one and only newsletter for the home improvement industry. Be sure and join us at the Hardlines Show Breakfast at the Canadian Hardware and Building Materials Show on February 6, 2000. There we'll award the Newsmaker of the Year &endash; and kick off the show with a rock n' roll twist. Remember, this event is for Hardlines subscribers and guests only &endash; so don't miss it! - Michael * * * * * * * WHO ARE THE TOP PLAYERS IN THE U.S.? I get asked this question a lot, so now there's a handy directory with the answers you need. Our brand new TOP 50 Directory of leading home improvement retailers in the U.S. is a handy, affordable way to check out the action south of the border. It's not as comprehensive as our blockbuster Who's Who Directory of Canadian Retailers, so we've priced it accordingly &endash; just $45 for subscribers. Call or e-mail us for more information.  
This week in Hardlines: LBM EXHIBITORS GET ON BOARD CHS FOR 2000 The next edition of the Canadian Hardware and Building Materials Show, February 6-8, 2000, is the first to encorporate the LBMAO's own show and convention. The Canadian Home Centre Show was folded in favour of joining forces with the CRHA's own hardware show. CHS has already identified more than 50 new exhibitors who formerly exhibited at the LBMAO show. Many other LBM companies that had previously exhibited in both shows will return to CHS in 2000. The LBMAO will host an industry "Icebreaker" reception on Saturday night, February 5. The Industry Gala, mounted by the CHHMA to benefit the Easter Seals Society of Canada, will be held on Sunday night, February 6. Monday's Awards Night honours the industry's outstanding products and the LBMAO Annual Gala Dinner takes place later that same night. And of course, Sunday morning the show kicks off with the fifth Annual Hardlines Show Breakfast (see shameless promotion elsewhere in this issue). More than 20,000 delegates are expected to register as CHS celebrates its 95th anniversary in Y2K. For more information, call 905-821-3470; fax: 905-821-8946; e-mail: crha@crha.com, or click here: www.crha.com * * * * * * * RESULTS POISE SODISCO-HOWDEN FOR FUTURE ACQUISITION Sodisco-Howden Group's third quarter sales results showed a 20% increase over 3Q 1998 and a year-to-date sales increase of 15.1% to $319.1 million. This turnaround of the hardware wholesaler's fortunes marks its eleventh consecutive quarter of improved earnings &endash; and "positions the company for a possible future acquisition," says Sodisco-Howden president and CEO Tony Molluso. Buoyed by 3Q earnings of $3.6 million on sales of $113.7 million, versus $2.7 million on sales of $94.8 million a year earlier, Molluso repeated his desire to consider growing the company by acquisition. (For the nine-month period, net earnings grew 155% from $2.0 million to $5.1 million.) Molluso had previously announced (Hardlines, Oct. 25/99) that two companies were under consideration for possible acquisition, one of which he expected to close by year's end.  
COMPANIES IN THE NEWS The Ontario Municipal Board has rejected Home Depot Canada's proposal to erect a store at Cherry Street and Lakeshore Boulevard in downtown Toronto's waterfront area. According to an article in the Globe & Mail on Friday, the proposal met with opposition from downtown businesses, politicians and associations. Large retail development does not fit in with the OMB's plans for redeveloping the waterfront. The area may also be developed as part of a proposal for Toronto to bid for the Olympics in 2008.   UFA Farm Supply Co-op has reached an agreement with Ace Hardware Canada to have Ace supply some hardware to two of its 34 corporately owned stores in Alberta on a test basis. The stores, in High River and Claresholm, will increase their hardware offerings with new programs from Ace. Product lines are now being finalized, with plumbing, electrical and hardware under consideration.   Amazon.com Inc. is broadening its product selection online to include home improvement products, as well as computer software and video games. The launch was timed to the Christmas season, steered by Amazon president Joe Galli, former president of Black & Decker. Products will include hardware, hand and power tools &endash; and even benchtop tools &endash; and all will have a US$4.95 shipping charge. Amazon recently bought a North Dakota-based catalogue company, Tool Crib, to facilitate its expansion into home improvement. Although reportedly being the most visited site on the Internet, Amazon has yet to make a profit after four years. (It lost US$197 million in the third quarter.)   Last week, RONA opened its latest Le Rénovateur Régional, this one in St-Hyacinthe, Qué. The 90,000-sq.ft. store carries 40,000 SKUs. The dealer-owners are André Gagnon and Jean-Guy Hébert (who was also named RONA's retailer of the year). Both are also co-owners of the Rénovateur Régional in Granby, which opened September 15.   Five Wal-Mart stores opened last Friday: Leamington, Owen Sound and Pembroke, Ont.; Langley, B.C.; and Saint John, N.B.   Home Depot in the U.S. now sells gift certificates online. Called Home Depot Gift Cards, they can be purchased in amounts of $10, $25, $50 or $100, redeemable only at Home Depot stores in the U.S.   Corning Consumer Products Corp. (CCPC) Holding Co. Inc. has completed the acquisition of General Housewares Corp., following approval by General's shareholders to accept US$28.75 per share in cash. General's key brands include Chicago Cutlery and Olfa. Annual sales in 1998 were U.S.$97 million.   Nu-Gro Corp. has broken off negotiations to purchase Consolidated Envirowaste Industries Inc. Nu-Gro will seek alternative ways to expand its soil operations in Western Canada.  
CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
Canadian Tire 46.00 29.00 34.30
Canfor 13.30 4.25 14.80
Goodfellow 11.80 6.00 11.10
Hudsons Bay 23.85 4.00 17.20
MacMillan Blo. 27.85 12.05 24.50
Sears Canada 34.35 15.25 37.10
Taiga Forest 14.75 8.65 13.50
West Fraser 41.00 9.05 33.00
"There is no fear in love; but perfect love casteth out fear." - John iv: 18
PEOPLE ON THE MOVE Pierre Langevin has joined In-Store Services Canada Inc. as director of business development. Langevin has spent 30 years in the industry and will now work with In-Store Services to meet the growing demand for merchandising services. One of his initial responsibilities will be to establish the company's presence in Québec. (905-507-3119)  
MARKET INDICATORS Housing starts in Canada slipped 2.2% in October to 147,500 units, down from 150,800 units seasonally adjusted in September, according to CMHC. Urban multiple starts rose 0.7% to 54,700, while urban singles decreased 5.1% to 72,100 units. * * * * * * * The new housing price index increased 1.2% in September over the same month a year earlier. This was the highest annual increase since December 1997, says Stats Canada. This index of contractors' selling prices for new houses rose 0.2% from August to September. Calgary had the highest annual increase (+4.3%), while significant increases also occurred in Halifax (+3.9%) and Ottawa-Hull (+3.6%). Vancouver and Victoria had the greatest decreases (-3.3% and &endash;4.6% respectively). St. John's increased 1.1%, Montréal was up 2.7%, Toronto up 1.7%, Winnipeg up 3.0% and Edmonton up 2.3% over September 1998.  
"As of today, more than $50 million worth of forest products have been sidelined or diverted to other ports at great cost to industry. As this lock out drags on, sales will be lost and valued customers will be snapped up by competing jurisdictions. Even the ability to maintain operations at our mills will soon be in jeopardy." &endash; from a letter to Prime Minister Jean Chrétien from the Council of Forest Industries, urging the PM to legislate the re-opening of the Port of Vancouver's and other B.C. ports. Labour Minister Claudette Bradshaw later imposed a Sunday deadline for both sides to reach a collective agreement. "It's the merchandising support that they're bringing to the table that is really the coup for them." &endash; Barry Hofstetter, senior buyer for UFA, on the recent supply agreement it has signed with Ace Hardware Canada.  
COME TO THE COLOGNE HARDWARE FAIR WITH HARDLINES: Join us to attend the world's largest hardware show March 12-15, 2000. Here's why:
1. Escorted travel from Toronto to Cologne via Frankfurt -let us help you make your voyage worry-free by taking care of the details.
2. "Canada Night" Reception in Cologne&endash; A night of networking with fellow Canadian retailers and vendors, and a presentation by key European buyers. 3. Pre-show seminar &endash; Hardlines and the Canadian office of the Cologne Trade Fairs will jointly present tips on how to maximize your presence at the Show. 4. Hardlines Handbook of the European market &endash; a helpful guide to European markets. 5. Store tours &endash; We'll take you on a tour of the European big-boxes and independents so you can take home the latest ideas for merchandising, packaging and store layout. 6. Spouses' program &endash; Join us to discover the sights and scenes of historic Cologne. Come to the Cologne International Hardware Fair/DIY'TEC with HARDLINES, March 12-15, 2000, in Cologne, Germany. Travel to the International Hardware Fair in Cologne to position yourself as a key player in the 21st century. Find out where the growth opportunities lie, discover how the world's markets are changing and learn about the latest new products. Hardlines has arranged special travel packages that will make your trip painless and affordable. Not only will we help you with your travel arrangements, but we'll also ensure your trip is beneficial to both you and your company. Affordable, comprehensive travel packages are available in two- and five-star accommodations. Just email us for more information. Our recommended Canadian travel agent will contact you to arrange your personalized travel package.  
Hardlines Classifieds  
FIND THAT NEW PERSON, NEW AGENCY OR NEW LINE WITH HARDLINES CLASSIFIEDS. THEY'RE A LOW-COST WAY TO REACH MORE THAN 2,000 PEOPLE EVERY WEEK. ONE AD RUNS FOR TWO WEEKS IN THE FAX EDITION AND THREE WEEKS IN THE E-MAIL EDITION OF HARDLINES. TO PLACE YOUR CLASSIFIED AD, JUST CALL BEVERLY ALLEN AT 416- 489-3396, EXT. 2. * * * * * * * 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: hardline@terraport.net © 1999 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.