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Michael McLarney, President & Editor mike@hardlines.ca Beverly Allen, Publisher bev@hardlines.ca John Caulfield, Contributing Editor Phone: 416-489-3396 |
| November 17, 2008, Vol. xiv, #43 | |
| In This Issue | ||||||||||||||||||||||||
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“There are many beautiful things, but the silent beauty of a flower surpasses them all.” —Sofu Teshigahara (Japanese floral artist and founder of the Sogetsu School of Ikebana, 900-1979) |
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| RONA sales up, profits down in 3Q | ||||||||||||||||||||||||
BOUCHERVILLE, Que. — RONA, Canada’s largest home improvement retailer, had a 2.3% increase in its consolidated sales in its third quarter, to $1,381.7 million, from $1,350.5 million in 2007. Same-store sales, however, decreased by 2.3% in the quarter, reflecting a drop in consumer spending related to the decline in consumer confidence. Net earnings dropped 10.2% to $53.4 million. Excluding $6.4 million in extraordinary items, which included the cost of closing some stores, net earnings were $59.8 million, or 0.6% higher than the $59.4 million in 2007. Operating income was also down, by 5.0% to $115.5 million. Profitability was positively impacted by improved operating efficiency and lower inventory — both aspects of the company’s “PEP” program, an initiative to improve results through 2008.
RONA performed well in many parts of the country — for example, in Quebec, investments in updating its Réno-Dépôt stores are paying dividends and same-store sales rose 2%, although the Ontario and Alberta markets have dragged. The company’s independent dealers in smaller markets across the country also fared well.
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| PRO dealers get chance to switch to Ace | ||||||||||||||||||||||||
 MONTREAL — At its recent dealer show for Ace and PRO dealers, held here, PRO Retail Services personnel introduced the new programs that will support the Ace banner in Canada.That support includes management of the banners by a dealer development team from TIM-BR MART. In a meeting during the show, Josée Desrosiers, sales manager, and Steve Stremecki, vice-president retail services, for TIM-BR MART, outlined plans for the two banners. They talked about the thrust of TIM-BR MART’s involvement and Stremecki offered his company’s vision for the Quebec stores — one that invited them to embrace Ace.
The PRO dealers in attendance were overwhelmingly positive about this option, and many of them will make the switch to Ace. However, PRO will continue to be supported, and there will be a PRO flyer in 2009.
TIM-BR MART is reportedly making gains in Quebec, as the new TIM-BR MART recruitment team for that province, under Desrosiers, adds new members that will carry the Ace banner. Desrosiers’ team is also implementing the PRO and Ace store-branding program in conjunction with TIM-BR MART’s retail programs.
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| IRLY’s wholesale biz benefiting from TIM-BR MART alliance | ||||||||||||||||||||||||
SURREY, B.C. — The union of IRLY Distributors with the larger buying group, TIM-BR MART, has resulted in greater purchasing volumes for both sides, but IRLY has been taking advantage of a further benefit, one that is helping drive its wholesale business.IRLY joined TIM-BR MART last fall, but retains its own offices, store identity, and — most significantly — its own distribution centre. From that DC, IRLY not only supplies its own members, but has expanded its operations to provide fill-in lines to independents from other banners, as well through a division called Western Hardware. The alliance with TIM-BR MART has opened the door for Western to supply those TIM-BR MART-bannered dealers on a more consistent basis.
 Garry Anderson, executive vice-president and general manager of IRLY, says the alliance between the two groups has given IRLY the opportunity to “prove that we can do a good job for them.” He adds that the Western division has been able to buy better, “because of their volume on a lot of products.” Some of the lines that have been expanded under the new relationship include plumbing. “We just didn’t have the volume before,” says Anderson. “It just adds to the mix.”
“The partnership is working great,” says Tim Urquhart, president of TIM-BR MART. “The IRLY truck is going out weekly and many of our dealers are now getting delivery.” Western started more than a decade ago selling to fewer than a dozen dealers. It now makes deliveries to more than 100 independents.
Through its alliance with TIM-BR MART, Western Hardware is now a member of Independent Hardware Dealers Association (IHDA), along with Independent Lumber Dealers Co-operative. Urquhart says there is room to continue growing the relationship between IRLY and TIM-BR MART. “Everything is open right now.”
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| Zellers, Target cater to cheap chic appeal | ||||||||||||||||||||||||
| BRAMPTON, Ont. — Two recent reports indicate that Wal-Mart is not the only retailer hoping to cash in on the economic downturn. Target has begun a marketing campaign that plays on the latter half of its slogan, “Expect more. Pay less.” The notion of paying less will figure prominently in its promotions well into 2009. The Minneapolis-based retail giant has started a marketing campaign that will be dominant for the rest of this year and in 2009.The retailer’s biggest competitor is Wal-Mart, which sells on the basis of low prices. Target offers a more style- and service-oriented shopping experience than its larger rival — and is sometimes perceived as higher priced. Target’s latest efforts are designed to overcome this perception. Meanwhile, north of the border, Mark Foote, the new president and CEO of Canada’s home-grown discount mass merchant, Zellers, believes his company is well-positioned to capture cash-strapped consumers’ share of mind and wallet. According to the Globe and Mail, Foote reports that Zellers is already enjoying a lift in sales, as the Canadian economy has slowed right down. “As a value retailer, a bad economy is a good thing,” Foote was quoted as saying. He took over the top job at Zellers, a division of Hudson’s Bay Co., in August following the purchase of Hbc by the U.S. holding company that also owns Lord & Taylor. Like Target, Zellers faces its stiffest competition from Wal-Mart. Foote has had experience on that front, however. He was at Loblaw, the giant grocery chain, for two years previously, as it battled to ward off the effects of Wal-Mart’s incursion into grocery. Before that, he was president of Canadian Tire Retail. | ||||||||||||||||||||||||
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JUST RELEASED! |
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The Hardlines Retail Report |
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THE ANNUAL RETAIL REPORT IS HERE: How big is the industry? How fast has it grown in the past decade? What are our forecasts for growth in 2008 and 2009? What's the lowdown on the key retail players? All this and so much more. In handy PPT format, featuring more than 140 slides, 30 charts, graphs and maps and tons of other cool stuff! Click here to order your Copy today — Beverly
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At T.S. Simms & Co. Ltd., Paul Pettersone has been appointed as Ontario sales representative. He brings with him more than 25 years of sales experience in the Canadian hardware industry.