HARDLINES™ Five years serving Canada's home improvement industry November 20, 2000 - Volume vi, #44 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * Canadian Tire sales down in third quarter * Rona to focus big box growth in Ontario * Home Depot tries out HVAC installations in the U.S. * U.S. retail is down slightly in October * * * * * *   A VERY SPECIAL REPORT ON HOME IMPROVEMENT RETAILING IN CANADA: The Hardlines Industry Report: Home Improvement Retailing in Canada is almost ready to ship! This incredible book is a comprehensive overview of the size of the market, how many stores are out there, who the key players are, their market position, the size and growth of the big boxes, the trends in housing and renovations, market trends - and much, much more! 120-plus pages filled with charts, graphs and photos. Regular price: $945, but only $750 for subscribers. But call or e-mail Bev right away for more details because she's cooked up some kind of additional price special if your order Before December 31!!! * * * * * * THE HARDLINES SHOW BREAKFAST AT CHS: Mark February 4, 2001 on your calendar. That's the date of our Sixth Annual FREE Hardlines Breakfast at the Canadian Hardware and Building Materials Show, held exclusively for Hardlines subscribers and friends! (Yes, I know, it's very, very early in the morning, but there's no better way to kick off the Show!) - Michael * * * * * * THE HARDLINES MARKETPLACE It's a great place to announce new lines or acquisitions, services or lines available. And of course they are an effective, low-cost way to hire new people. At just $16 per line, here's what you get with each Marketplace Ad: - two weeks in the fax version - three weeks in the email version - posted on our website for three weeks - your ad read by more than 3,000 people every single week - thousands of hits on our Website! - our boundless thanks for your support of Hardlines! Bev takes care of the Classifieds so contact her: bev@hardlinesfax.com or call her at 416-489-3396.  
HOWDEN REINSTATES ITS OWN SPRING SHOW   After five years associated with the Canadian Hardware and Building Materials Show, Sodisco-Howden Group has decided to pull its support and reinstate its own spring dealer show in Ontario. The new show will be held March 31-April 1at the Toronto Congress Centre. For five years previous, Sodisco-Howden had used CHS as its spring showcase for its dealers. Howden suppliers at CHS were invited to offer special discounts and buys to Howden customers. In return, Howden promoted the show to its dealer base. Howden had made the move originally in an effort to begin reducing the number of shows in the industry. At the time, Howden executives and suppliers hoped to set a precedent for other distributors to follow suit, throw their support behind CHS and ease the glut of shows in this industry. But it never happened. Bob Elliott, executive director of the Canadian Retail Hardware Association, which owns CHS, notes that Sodisco-Howden will continue its presence at the national show and continue to support it. The Sodisco-Howden show will include, for the first time, Sodisco dealers from Québec. Although Sodisco hosts a small Christmas buying show, which will continue, it has never had a spring show of its own. West coast dealers served by the Smith-Barregar division are also being invited. * * * * * * RONA FINE-TUNES CASHWAY BANNER IN ONTARIO Rona's latest makeover of its Cashway stores in Ontario to Rona Cashway includes one exception. The Cambridge, ON store was reopened last Wednesday as Rona Home Centre. The 25,000-sq.ft. store added about 5,000 more SKUs, especially in décor and flooring, as well as an increased seasonal department and a Rona trademark - specialty boutiques for paint and doors and windows. The paint boutique includes more SKUs than before and all departments are being merchandised in a tidier, more "dressed up" fashion, says general manager Brian Salo. He expects the smarter look of the store, which departs from the more traditional LBM approach of the former Cashway, will be "a real traffic builder." Seasonal, a department Cashway had essentially exited over the past five years, is also expected to be a draw - especially for women shoppers - complete with artificial Christmas trees and outdoor decorations. Other departments, like windows and steel doors, now feature permanent displays. Henri Drouin, chairman of Rona Inc., says the Cashway stores will all be converted to dealer-owned within two years. As they change over, they will all become Rona Home Centres. * * * * * * SPOOLS LUMBER TO CLOSE, CITING ECONOMY, DESIRE TO RETIRE The economy is only one factor affecting the imminent closing of Spools Lumber after 60 years serving British Columbia's lower mainland. Spools president Harry Mortimer also feels it's just time to retire. The real estate alone the company sits on "is worth too much money," he says. Mortimer represents the second generation of the family owned operation. He's reluctant to give his age, but does admit he's been in the business for some 30 years. Spools's main store is in Richmond, the second in Surrey. In addition, the company owns non-retail facilities, including a pre-hung door manufacturing plant. They will wind down operations by year's end. Mortimer expects many of his staff to be picked up by other building centres, including Curtis Lumber, which has already hired a couple of his people.  
COMPANIES IN THE NEWS   For the third quarter ended September 30, Sodisco-Howden Group Inc. reported sales of $100.3 million, compared with $113.7 million at the same date last year. (This quarter had one week less in billings than last year's.) However, the company's net earnings were up 55% to $2.8 million, from $1.8 million last year. The increased profitability was attributed to a greater focus on higher-margin products and services. For the nine months ended September 30, 2000, sales increased $2.3 million to $321.4 million. Net earnings were $8.7 million, compared with $5.1 million for the same period in 1999. The Home Depot saw sales rise 17% in its third quarter ended October 29, to US$11.545 billion, from US$9.877 billion in the same period a year earlier. Same-store sales for the third quarter rose 4%. The company blamed these lower-than-expected results on low lumber and building materials pricing at retail this year. But it also said strong sales in 3Q '99, due to the hurricanes and Y2K-related sales, made it a tough act to follow. Net earnings reached US$650 million, up 13% from US$573 million in 1999. Home Depot says it expects the fourth quarter results to be affected by the same conditions. Sales for the year to date were up 21% to $35.275 billion, from US$29.260 billion. A US$1 billion takeover of Benjamin Moore was initiated last Friday by Warren Buffett's holding company, Berkshire Hathaway. The outcome will result in Benny Moore becoming a wholly owned subsidiary of Berkshire Hathaway. The deal calls for a cash tender offer of US7.82 per share to holders of Benjamin Moore common stock by a wholly owned subsidiary of Berkshire Hathaway. The Board of Directors of Benjamin Moore has unanimously approved the merger agreement. A bid for shares of Maytag Corp. by a Canadian company is being considered hostile. Maytag's board of directors has advised its shareholders to reject an unsolicited "below-market mini-tender" offer by TRC Capital Corp. to acquire about 3.4% of Maytag's outstanding common stock. The"mini-tender" is reportedly at a below-market price of US$25.50, 11.7% below last Thursday's closing market price for Maytag's stock. Nu-Gro Corp. had sales of $28.04 million for the fourth quarter ended September 30, up from $24.58 million a year earlier. The increase reflects the acquisition of Scott's ProTurf business last spring. Net earnings rose from $1.14 million to $1.29 million. Sales for the year were $142.71 million, up from $131.15 million.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 37.35 15.10 17.90
Canfor 19.80 8.10 8.80
Goodfellow 12.55 8.50 8.50
Home Depot 70.00 34.68 36 1/4
Hudsons Bay 21.65 12.50 14.60
Lowe's Cos. 67.25 34.25 39 15/16
Sears Canada 42.50 20.00 23.30
Taiga Forest 14.20 6.80 8.85
West Fraser 39.50 25.80 27.30
    "Were't not for gold and women, there would be no damnation." - Cyril Tourneur (from "The Revenger's Tragedy")
PEOPLE ON THE MOVE   Bernie Bosch has moved over to Gardener's Delight as director of sales and marketing. She was formerly national sales manager at Wells Lamont. (519-756-4330)  
OVERHEARD …   "You want a Christmas tree? Come on down!" - Brian Salo, general manager of the newly refurbished Rona Home Centre (formerly Cashway) in Cambridge, ON. Moving away from Cashway's more traditional lumber yard approach, the store has broadened its product range and customer appeal by expanding certain categories - and by getting back into seasonal products. "Sodisco-Howden fully intends to draw on its excellent financial position and national marketing program to expand its market share in Canada. Further acquisitions or strategic agreements continue to be a priority for the company." - Tony Molluso, president and CEO of Sodisco-Howden Group, referring to the strength of the company's third-quarter results.  
MARKET INDICATORS   The new housing price index rose 2.4% in September, compared with September 1999, the fifth consecutive month of year-over-year increases, says Stats Canada. On a monthly basis, the index of contractors' selling prices rose 0.2% from August to September. Municipalities issued $3.3 billion worth of building permits in September, up 1.2% from August, reflecting the non-residential sector's best monthly performance in 11 years. However, residential permits fell 13.4% to $1.6 billion, mainly because of a drop in multiple-family construction (-34.2% to $429 million). Permits for single-family housing were down 2.4% to $1.2 billion. Year to date, the value of construction intentions reached $28.2 billion, up 8.2% from the same nine-month period in 1999. U.S. housing construction was up slightly in October, as multiple starts grew but singles were down. According to the U.S. Commerce Department, builders began work on new homes at a seasonally adjusted annual rate of 1.53 million last month, up a mere 0.1% seasonally adjusted from September. Multiple starts were up 1.3% while single-family homes fell by 0.2%.  
Are you reading your own copy of Hardlines? Find out about our special company rates!    
Hardlines Marketplace   THE HARDLINES MARKETPLACE: It's a great place to announce new lines or acquisitions, services or lines available. And of course they are an effective, low-cost way to hire new people. At just $16 per line, here's what you get with each Marketplace Ad: - two weeks in the fax version - three weeks in the email version - posted on our website for three weeks - your ad read by more than 3,000 people every single week - thousands of hits on our Website! - our boundless thanks for your support of Hardlines! Beverly takes care of the Classifieds so contact her: bev@hardlinesfax.com or call her at 416-489-3396. at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2000 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. 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.)  
  HARDLINES™ Five years serving Canada's home improvement industry November 20, 2000 - Volume vi, #44 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * Canadian Tire sales down in third quarter * Rona to focus big box growth in Ontario * Home Depot tries out HVAC installations in the U.S. * U.S. retail is down slightly in October * * * * * *   A VERY SPECIAL REPORT ON HOME IMPROVEMENT RETAILING IN CANADA: The Hardlines Industry Report: Home Improvement Retailing in Canada is almost ready to ship! This incredible book is a comprehensive overview of the size of the market, how many stores are out there, who the key players are, their market position, the size and growth of the big boxes, the trends in housing and renovations, market trends - and much, much more! 120-plus pages filled with charts, graphs and photos. Regular price: $945, but only $750 for subscribers. But call or e-mail Bev right away for more details because she's cooked up some kind of additional price special if your order Before December 31!!! * * * * * * THE HARDLINES SHOW BREAKFAST AT CHS: Mark February 4, 2001 on your calendar. That's the date of our Sixth Annual FREE Hardlines Breakfast at the Canadian Hardware and Building Materials Show, held exclusively for Hardlines subscribers and friends! (Yes, I know, it's very, very early in the morning, but there's no better way to kick off the Show!) - Michael * * * * * * THE HARDLINES MARKETPLACE It's a great place to announce new lines or acquisitions, services or lines available. And of course they are an effective, low-cost way to hire new people. At just $16 per line, here's what you get with each Marketplace Ad: - two weeks in the fax version - three weeks in the email version - posted on our website for three weeks - your ad read by more than 3,000 people every single week - thousands of hits on our Website! - our boundless thanks for your support of Hardlines! Bev takes care of the Classifieds so contact her: bev@hardlinesfax.com or call her at 416-489-3396.  
HOWDEN REINSTATES ITS OWN SPRING SHOW   After five years associated with the Canadian Hardware and Building Materials Show, Sodisco-Howden Group has decided to pull its support and reinstate its own spring dealer show in Ontario. The new show will be held March 31-April 1at the Toronto Congress Centre. For five years previous, Sodisco-Howden had used CHS as its spring showcase for its dealers. Howden suppliers at CHS were invited to offer special discounts and buys to Howden customers. In return, Howden promoted the show to its dealer base. Howden had made the move originally in an effort to begin reducing the number of shows in the industry. At the time, Howden executives and suppliers hoped to set a precedent for other distributors to follow suit, throw their support behind CHS and ease the glut of shows in this industry. But it never happened. Bob Elliott, executive director of the Canadian Retail Hardware Association, which owns CHS, notes that Sodisco-Howden will continue its presence at the national show and continue to support it. The Sodisco-Howden show will include, for the first time, Sodisco dealers from Québec. Although Sodisco hosts a small Christmas buying show, which will continue, it has never had a spring show of its own. West coast dealers served by the Smith-Barregar division are also being invited. * * * * * * RONA FINE-TUNES CASHWAY BANNER IN ONTARIO Rona's latest makeover of its Cashway stores in Ontario to Rona Cashway includes one exception. The Cambridge, ON store was reopened last Wednesday as Rona Home Centre. The 25,000-sq.ft. store added about 5,000 more SKUs, especially in décor and flooring, as well as an increased seasonal department and a Rona trademark - specialty boutiques for paint and doors and windows. The paint boutique includes more SKUs than before and all departments are being merchandised in a tidier, more "dressed up" fashion, says general manager Brian Salo. He expects the smarter look of the store, which departs from the more traditional LBM approach of the former Cashway, will be "a real traffic builder." Seasonal, a department Cashway had essentially exited over the past five years, is also expected to be a draw - especially for women shoppers - complete with artificial Christmas trees and outdoor decorations. Other departments, like windows and steel doors, now feature permanent displays. Henri Drouin, chairman of Rona Inc., says the Cashway stores will all be converted to dealer-owned within two years. As they change over, they will all become Rona Home Centres. * * * * * * SPOOLS LUMBER TO CLOSE, CITING ECONOMY, DESIRE TO RETIRE The economy is only one factor affecting the imminent closing of Spools Lumber after 60 years serving British Columbia's lower mainland. Spools president Harry Mortimer also feels it's just time to retire. The real estate alone the company sits on "is worth too much money," he says. Mortimer represents the second generation of the family owned operation. He's reluctant to give his age, but does admit he's been in the business for some 30 years. Spools's main store is in Richmond, the second in Surrey. In addition, the company owns non-retail facilities, including a pre-hung door manufacturing plant. They will wind down operations by year's end. Mortimer expects many of his staff to be picked up by other building centres, including Curtis Lumber, which has already hired a couple of his people.  
COMPANIES IN THE NEWS   For the third quarter ended September 30, Sodisco-Howden Group Inc. reported sales of $100.3 million, compared with $113.7 million at the same date last year. (This quarter had one week less in billings than last year's.) However, the company's net earnings were up 55% to $2.8 million, from $1.8 million last year. The increased profitability was attributed to a greater focus on higher-margin products and services. For the nine months ended September 30, 2000, sales increased $2.3 million to $321.4 million. Net earnings were $8.7 million, compared with $5.1 million for the same period in 1999. The Home Depot saw sales rise 17% in its third quarter ended October 29, to US$11.545 billion, from US$9.877 billion in the same period a year earlier. Same-store sales for the third quarter rose 4%. The company blamed these lower-than-expected results on low lumber and building materials pricing at retail this year. But it also said strong sales in 3Q '99, due to the hurricanes and Y2K-related sales, made it a tough act to follow. Net earnings reached US$650 million, up 13% from US$573 million in 1999. Home Depot says it expects the fourth quarter results to be affected by the same conditions. Sales for the year to date were up 21% to $35.275 billion, from US$29.260 billion. A US$1 billion takeover of Benjamin Moore was initiated last Friday by Warren Buffett's holding company, Berkshire Hathaway. The outcome will result in Benny Moore becoming a wholly owned subsidiary of Berkshire Hathaway. The deal calls for a cash tender offer of US7.82 per share to holders of Benjamin Moore common stock by a wholly owned subsidiary of Berkshire Hathaway. The Board of Directors of Benjamin Moore has unanimously approved the merger agreement. A bid for shares of Maytag Corp. by a Canadian company is being considered hostile. Maytag's board of directors has advised its shareholders to reject an unsolicited "below-market mini-tender" offer by TRC Capital Corp. to acquire about 3.4% of Maytag's outstanding common stock. The"mini-tender" is reportedly at a below-market price of US$25.50, 11.7% below last Thursday's closing market price for Maytag's stock. Nu-Gro Corp. had sales of $28.04 million for the fourth quarter ended September 30, up from $24.58 million a year earlier. The increase reflects the acquisition of Scott's ProTurf business last spring. Net earnings rose from $1.14 million to $1.29 million. Sales for the year were $142.71 million, up from $131.15 million.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 37.35 15.10 17.90
Canfor 19.80 8.10 8.80
Goodfellow 12.55 8.50 8.50
Home Depot 70.00 34.68 36 1/4
Hudsons Bay 21.65 12.50 14.60
Lowe's Cos. 67.25 34.25 39 15/16
Sears Canada 42.50 20.00 23.30
Taiga Forest 14.20 6.80 8.85
West Fraser 39.50 25.80 27.30
    "Were't not for gold and women, there would be no damnation." - Cyril Tourneur (from "The Revenger's Tragedy")
PEOPLE ON THE MOVE   Bernie Bosch has moved over to Gardener's Delight as director of sales and marketing. She was formerly national sales manager at Wells Lamont. (519-756-4330)  
OVERHEARD …   "You want a Christmas tree? Come on down!" - Brian Salo, general manager of the newly refurbished Rona Home Centre (formerly Cashway) in Cambridge, ON. Moving away from Cashway's more traditional lumber yard approach, the store has broadened its product range and customer appeal by expanding certain categories - and by getting back into seasonal products. "Sodisco-Howden fully intends to draw on its excellent financial position and national marketing program to expand its market share in Canada. Further acquisitions or strategic agreements continue to be a priority for the company." - Tony Molluso, president and CEO of Sodisco-Howden Group, referring to the strength of the company's third-quarter results.  
MARKET INDICATORS   The new housing price index rose 2.4% in September, compared with September 1999, the fifth consecutive month of year-over-year increases, says Stats Canada. On a monthly basis, the index of contractors' selling prices rose 0.2% from August to September. Municipalities issued $3.3 billion worth of building permits in September, up 1.2% from August, reflecting the non-residential sector's best monthly performance in 11 years. However, residential permits fell 13.4% to $1.6 billion, mainly because of a drop in multiple-family construction (-34.2% to $429 million). Permits for single-family housing were down 2.4% to $1.2 billion. Year to date, the value of construction intentions reached $28.2 billion, up 8.2% from the same nine-month period in 1999. U.S. housing construction was up slightly in October, as multiple starts grew but singles were down. According to the U.S. Commerce Department, builders began work on new homes at a seasonally adjusted annual rate of 1.53 million last month, up a mere 0.1% seasonally adjusted from September. Multiple starts were up 1.3% while single-family homes fell by 0.2%.  
Are you reading your own copy of Hardlines? Find out about our special company rates!    
Hardlines Marketplace   THE HARDLINES MARKETPLACE: It's a great place to announce new lines or acquisitions, services or lines available. And of course they are an effective, low-cost way to hire new people. At just $16 per line, here's what you get with each Marketplace Ad: - two weeks in the fax version - three weeks in the email version - posted on our website for three weeks - your ad read by more than 3,000 people every single week - thousands of hits on our Website! - our boundless thanks for your support of Hardlines! Beverly takes care of the Classifieds so contact her: bev@hardlinesfax.com or call her at 416-489-3396. at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2000 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. 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.)