vol. viii, #44 November 18, 2002  

* Rona committed to investment in existing dealers * Sodisco-Howden satisfied with recent acquisitions * Canadian Hardware Show puts more focus on buying * Canadian Tire wants to start own bank * Carry on doctor: Loblaw's will include clinics

"Four be the things I'd been better without: Love, curiosity, freckles, and doubt." - Dorothy Parker (1893-1967)
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We're being deluged with orders for the special report by Albert Plant of RBC Royal Bank. Albert was a hit at our recent Hardlines Marketing Conference. Now RBC Royal Bank has updated his presentation and bound it into a special report that's available to Hardlines subscribers: "Consumer Fulfillment - The rules of the game don't change." Call now to receive a free copy of this report. Contact Nancy Wright here at Hardlines: 416-489-3396, or nancy@hardlines.ca.

Montréal, QC - If merchandising and presentation are everything for good store layout, then why not for the environment in which the dealers themselves are expected to buy? The spare, sensible warehouse presentation of some dealer shows was nowhere to be seen at the Rona show last week, held downtown at the Palais de Congrès (or, for that matter, the BMR show, held this past weekend in Québec City. More on BMR next week - Michael).

And good thing, too. The Rona show, which featured 500-plus vendors, accounts for about 60% of total year's purchases by the dealers. New vendors were asked to come with innovative merchandising ideas for their products and all this was reflected in the look of the show. Attention to detail included an abundance of plants and flowers throughout the aisles and common areas enhanced by wood flooring underfoot. A model home - a four-sided structure to showcase the latest windows right in the walls - was also featured. A move to more high-end offerings was clearly visible on the show floor, including hot tubs built for two, sophisticated lighting and high-style faucets. Rona's Paint Café attracted a lot of interest, this year featuring plans for a scaled down version that will fit against the wall in smaller stores. The gala dinner held Saturday night hosted 1,700. Highlights included a presentation by Rona president and CEO Robert Dutton, who gave an emotional, heartfelt tribute to his mentor, former chairman Henri Drouin. In his speech to the dealers, Dutton commented on the company's commitment to keep growing the retail base. Corporate expansion, with large format stores, will focus on Québec and Ontario, while Rona's recent IPO will help fuel investment in the dealer owned network. "We have continued to recruit independent owners and especially to support our dealer owners in the expansion and modernization of their stores. Since 1999, we have renovated nearly 300 points of sale," Dutton noted. "The quest for operational efficiency," he continued, "… is definitely critical to our success. First of all because it allows stores to function and respond to customer needs. And then because it has an enormous impact on the profitability of the entire network. For example, we save about $20 million a year through synergies arising from the Rona, Cashway, Revy and Lansing integration. And that's actual savings, not projected savings." While Dutton said in his speech that the Revy name will be dropped in Rona's Western stores by the end of 2003, expect the change to take place much faster - within the first half of the year. The Lansing and Cashway names in Ontario will, however, remain in place for now.
Montréal, QC - Sodisco-Howden Group recorded its second consecutive quarter of positive results with revenues of $132.1 million for the third quarter. That reflects an increase of 22% over the same period a year earlier. The top line was boosted by Sodisco-Howden's acquisition of the hardware and building materials assets of Marchands Unis last February. In addition, its lumber and building materials division, which operates in Québec, had strong performance during the third quarter. Profits for the company hit $1.2 million, up from $0.3 million. For the nine-month period, revenues were $367.2 million, up 22% over the same period in 2001. While Sodisco-Howden continues to strengthen its financial position, president and CEO Jos Wintermans says the company is not about to rest on its laurels. "But the strategy of continual strengthening of our results, thanks to our strategy of growth to increase the top line and productivity to enhance bottom-line results, is paying off." Sodisco-Howden took a hit in its first quarter, a one-time integration charge of $1.8 million to absorb the Marchands Unis acquisition. The buyout of Ace Hardware Canada will close at the end of this year. "Howden gives us strength in English Canada, and especially in Ontario," says Wintermans. "The Ace acquisition more equally divides our strength across Canada." As for further acquisitions, Wintermans says the company remains open to opportunities, "but for now, we have a perfectly good lineup of banners and strength in the marketplace. Now, it's a question of winning more business from these customers - of winning more hearts."
Mississauga, ON - The fortunes of the 2003 Canadian Hardware and Building Materials Show are being staked on its ability to turn itself into more of a buying show - a move that retail groups have been calling for. Making this job one at CHS has resulted in a groundswell of support from exhibitors. In fact, the push for more emphasis on making deals begins with the exhibitor application form itself. "Right at the top of contract we said we expect [exhibitors] to offer rebates or introductory offers exclusive to the show," says Bob Elliott, president of the Canadian Retail Hardware Association, which owns CHS. "It's very important to us that we get the vendors to support the concept. We've been told by dealers and dealer groups that this has to be more of a buying show." Elliott adds that the show has always offered specials; part of CHS's job is to raise awareness of that. According to Elliott, almost one-fifth of exhibitors have already confirmed they will offer retailers special or extended terms, while 15% will offer merchandise displays and 12% have committed to volume discounts. The 2002 show drew 16,985 and played host to 1,006 exhibits from 464 participating companies. The 2003 show will be held February 2-4, 2003 at the National Trade Centre, Exhibition Place, Toronto.
Don't miss Practical World 2003, the Cologne International Hardware Fair/DIY'Tec. The 2003 show is March 9-12. For show information, contact Barbara Hills at 416-598-3343 or email colognet@idirect.com. To book your flight and hotel, call Carol-Ann Itel at Trade Show Travel, 1-877-873-7469 or email tradeshowtravel@shaw.ca .
Canadian Tire 33.15 23.96 31.77
Canfor 11.70 6.83 7.43
Emco 12.77 5.75 11.15
Goodfellow 13.99 8.50 11.53
Home Depot 52.60 23.18 27.87
Hudson's Bay 15.55 5.87 7.00
Lowe's Cos. 49.99 32.50 41.78
Sears Canada 25.10 15.15 17.55
Sodisco-Howden 2.20 1.06 1.50
Taiga Forest 7.00 4.55 6.25
West Fraser 45.00 28.90 36.00
Canadian Tire could keep the costs of administering its MasterCard credit card if it were its own bank. So it's applying to start a bank within its financial services division that will let it reduce costs attached to provincial laws governing the marketing of credit cards. Costco Canada Wholesale Corp. announced, then postponed selling new cars to its members. When the pilot project goes, cars will be displayed in test stores in the Ottawa region; customers will be directed to one of four local Chrysler or Ford dealerships to close the deal - with a Costco discount of up to $400. Beginning January 2, 2003, CGC's building centre dealers in Canada will be able to order CGC ceiling tile and grid through the company's customer service centres. The centres already handle CGC's line of gypsum products, interior finishing products and cement board. CGC ceiling products are distributed by CanWel Distribution Ltd. On the heels of a 36% increase in its 3Q profits, Loblaw announced that its next two new stores will include medical clinics. The service will complement the pharmacies in the stores, which will be located in Richmond Hill, north of Toronto, and Ottawa. The latter will have doctors onsite. (But will they help bag groceries during peak times, too? - Editor) The Paint and Decorating Retailers Association and the Walls Windows Furnishings Association are returning to the Canadian Hardware and Building Materials Show to create a show within a show entitled the Décor Showcase. More than 100 exhibits will be featured, plus certification workshops and seminars aimed at both retailers and decorators. Wal-Mart's 3Q earnings hit US$1.82 billion on sales of US$58.7 billion, up from US$1.48 billion a year earlier. Sales were up 11.5%. Same-store sales were up 3.5% during the quarter; Wal-Mart stores were up 4.2% and Sam's Club rose 0.4%. Restoration Hardware began airing its own television special, "Restoration Home For The Holidays," this past weekend. It's hosted by Restoration founder Stephen Gordon and will appear in 100 U.S. markets. Segments include Christmas crafts and traditions and building a cozy fire. Target Corp. earned US$277 million on sales of US$10.2 billion for the quarter. That's up 9.3% from sales of US$9.3 billion a year ago. The company expects to earn 15% per share growth for the year.
Val Wheatley has moved to head office at Rona Lansing as merchandise manager, tools and hardware. Before that, she worked at Rona's big box stores in the Greater Toronto Area, most recently in Woodbridge, ON as manager, décor and operations. (416-241-5129) At Selkirk Canada Corp., Bob Emmell has been appointed to take on additional responsibilities as national sales manager - Canada. In his new role, he will be responsible for sales of Selkirk, Supervent and SuperPro Chimney venting and fireplace brands to the Canadian retail, wholesale and hearth distribution channels. (1-800-263-9308)
The New Housing Price Index rose 0.2% in September from August, and was up 4.2% from September 2001, says Statistics Canada. Strong demand for new houses, combined with increased costs of skilled labour and building materials, continued to push up prices. Non-residential building construction in the third quarter was up 0.3% from the second quarter and up 1.6% from the third quarter of 2001, reflecting a healthy non-residential building construction sector, says Statistics Canada. Edmonton's index rose 0.8% from the second quarter, followed by Calgary (+0.6%), Halifax and Toronto (+0.4%), and Montréal, Ottawa and Vancouver (+0.3%). October's retail sales in the U.S. were flat, says the U.S. commerce department. The stalled results follow a drop of 1.3% in September. Consumers spent less on cars and restaurants, but more on fashion.
"It's encouraging to see our efforts of the last 12 months translated into positive results." - Jos Wintermans, president and CEO of Sodisco-Howden Group, on the hardware distributor's performance in the third quarter.
Albert Plant, national market manager of consumer products and retailing for RBC Royal Bank, was a hit at our recent Hardlines Marketing Conference. Now RBC Royal Bank has updated his thought-provoking and informative presentation and bound it into a special report for Hardlines subscribers: "Consumer Fulfillment - The rules of the game don't change." Albert invites anyone who wishes to receive a free copy of this report to contact Nancy Wright here at Hardlines: 416-489-3396, or nancy@hardlines.ca.
If you are doing budget planning, developing next year's marketing plan, pitching a new client who needs hard data, a foreign head office that needs the definitive Canadian snapshot, in need of competitive intelligence, call Nancy Wright, 416-489-3396, to find out more!

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HELP WANTED TERRITORY SALES REPRESENTATIVE, CALGARY: As a leader in Specialty Flooring, Torlys Inc. (www.torlys.com) is actively seeking a dynamic Territory Sales Associate to be based out of Calgary and cover from the US Border north to and including Red Deer. *Minimum 3-5 years sales experience required; *Should have experience in Floor Coverings either retail, wholesale or similar home renovation products; *Ability to work independently and be accountable for performance; *Excellent Communication and Computer Skills *Develop products knowledge within customer base Please reply in total confidence to Mary Kerr, Organizational Development Manager, Torlys Inc., 905-696-2374 or by e-mail at HR@torlys.com. *********************************************************************************** TERRITORY SALES REPRESENTATIVE, EDMONTON: As a leader is Speciality Flooring, Torlys Inc. (www.torlys.com) is actively seeking a dynamic Territory Sales Associate to be based out of Edmonton and cover from Red Deer north. **Minimum 3-5 years sales experience required; *Should have experience in Floor Coverings either retail, wholesale or similar home renovation products ; *Ability to work independently and be accountable for performance; *Excellent Communication and Computer Skills *Develop products knowledge within customer base. Please reply in total confidence to Mary Kerr, Organizational Development Manager, Torlys Inc., 905-696-2374 or by e-mail at mary@torlys.com.

*********************************************************************************** PRODUCT MANAGER: Leader in the industry, ROYAL INTERNATIONAL CORP., operating from Montreal, is an importer and manufacturer of hand tools and hardware products for the industrial and retail markets. Reporting directly to the V.P. of Sales and Marketing, the successful candidate will be responsible for the following: managing the product line, introducing new products, coordinating the creation and the production of packaging and promotional materials, providing product knowledge and training sessions, and producing competitive analyses. We are seeking a fluently bilingual (written and spoken) candidate with 3 to 5 years experience in the management of products in the hardware and/or retail markets, a degree in Marketing and comprehensive knowledge of Word, Excel and Outlook. We invite qualified applicants to submit their candidacy by fax to 514-735-8702, or by e-mail to: careers@royalinternational.com. ***********************************************************************************


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Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2002 by Michael McLarney. HARDLINES™ the electronic newsletter hardlines.ca Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: mike@hardlines.ca Beverly Allen, Marketing Manager: bev@hardlines.ca Nancy Wright, Circulation Manager: nancy@hardlines.ca ______________________________________________ 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: $199+$13.93 GST = $212.93 per year (GST #13987 0398 RT). Secondary subscriptions at the same office are only $28 + $1.96 GST = $29.98. 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 McLarneyCom.