Phone: 416-489-3396
Michael McLarney, Editor & President
mike@hardlines.ca
Beverly Allen, Publisher
bev@hardlines.ca
Brady Peever, Client Services Manager
brady@hardlines.ca
John Caulfield, Contributing Editor
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November 30, 2009, Volume xv, #45 |
In This Issue:
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“True genius resides in the capacity for evaluation of uncertain, hazardous and conflicting information.” —Winston Churchill (British politician and author, 1874-1965) |
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Our Holiday publishing Schedule: Hardlines will publish once in December, as we always do. You’ll get your issue next week, Nov. 30, then again on Dec. 14. There will be no issues on Dec. 7, 21 or 28. However, the World Headquarters remains open until at least Dec. 23. |
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Castle head touts role of independent | |||||||||||||||||||||||||||
TORONTO — Ken Jenkins believes that the independent dealer is the heart and soul of the home improvement industry. The president of Castle Building Centres Group talked about the role of the independent at the latest Hardlines Executive Breakfast, speaking before a group of vendors and retail representatives.His role, heading up a group that represents some 226 of those independents, is to support them in what he believes is the group’s key function: buying.
That’s something that Castle stays focused on, even while other banners, says Jenkins, are broadening their services to dealers.
“They’ve morphed into marketing machines, advertising machines and sponsorship machines. At Castle, we are a buying machine. We employ the best buyers in the industry.”
Castle dealers are typically contractor-oriented outlets. With large yards and retail space that’s typically under 5,000 square feet, these dealers are focused on their local markets. In fact, 60% of Castle members choose not even to carry a Castle banner, but rather put their own brand front and centre.
Does a national brand or a full flyer program work for a business like this? Jenkins says that decision is left to his members. But he also believes that his members must be educated to the full costs of involvement in banners that are based on distribution. “It’s up to me to educate my members on what drives those business models and make my members understand the cost that goes along with that.”
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FCL to support Roughriders with branded products | |||||||||||||||||||||||||||
TORONTO — Federated Co-operatives Ltd. will partner with the Saskatchewan Roughriders football team next year, supporting the sports club’s 100th anniversary with the introduction of a range of private-label products.According to Rod Baergan, director of merchandising for FCL’s general merchandise division (which includes hardware and building materials), the sponsorship will extend to about 15 private label products such as mugs and hats, all available at Co-op locations across the West. The most notable product, however, and the one modeled personally by Baergan, is a foam-padded “watermelon” hat, suitable, of course, for wearing at any Roughriders game. Baergan was speaking to vendors last week at a meeting in Toronto hosted by the Canadian Hardware and Housewares Manufacturers Association. | |||||||||||||||||||||||||||
Strategic initiatives poise RONA for recovery | |||||||||||||||||||||||||||
MONTREAL — At RONA’s dealer show on this past weekend, the giant retailer showcased a range of new products and programs, all against the backdrop of a company that is working to position itself in a recovery mode.The show returned to RONA’s home province after one foray outside of Quebec. In 2008, the show was held in Toronto, with plans for Calgary to host the show this year. The economic downturn, however, put those plans on hold. The company made a number of gains under phase one of its PEP program (productivity, efficiency, profitability). The first was to improve the profitability of the corporate store network. Although gross margin was down in the third quarter due in part to the liquidation of seasonal products, the sell-off managed to reduce inventory levels, increase stock rotation rates and improve inventory quality. A turnaround plan for underperforming stores resulted in these stores posting relatively higher increases in sales and operating income than the network as a whole during this quarter. Efforts to optimize the supply chain resulted in further inventory reductions of $51 million or 6.0% in third quarter. Including acquisitions and new stores, inventories were reduced by $38 million. Reduced transportation costs and ongoing improvements in demand management resulted in a reduction of nearly $1 million in logistics costs in the quarter, as well. “With the gains made so far under the PEP program, coupled with RONA’s increased financial flexibility in the wake of a common share issue back in June, the company believes it is ready to commence phase two of its 2008-2011 strategic plan,” says RONA CEO Robert Dutton. These initiatives will focus on the re-acceleration of RONA’s development activities, including the recent launch of its dedicated paint and décor banner, STUDIO by RONA. | |||||||||||||||||||||||||||
Product trends emerge in run up to International Hardware Fair | |||||||||||||||||||||||||||
COLOGNE, Germany — With less than four months to go, 2,500 suppliers are getting ready to show off their newest innovations next February in Cologne. Show dates are set for Feb. 28–March 3, 2010 (www.hardwarefair.com).The event will be held in 11 halls of the Koelnmesse Expo Center. Products are segmented in five overall categories: Tools, Industrial Supplies, Fastening & Fittings, Locks & Fittings and Home Improvement. Based on early product announcements, the following trends are emerging: Tools: Tool lines will be more diverse with a wider range of applications. A new generation of tightening tools, abrasive tools able to separate and deburr materials will be shown for the first time as well as diamond cutting tools designed for engineering projects. Fastening Technology: A new line of screws used in woodworking that do not require pre-drilling. A clear trend towards smaller and environmentally-friendly packaging. Industrial Supplies: Computer-aided accounting software able to track costs and efficiency of tools and materials. Ladders with higher load-bearing capability (up to 500 pounds) and ladders with new foot-cap materials providing extra protection for floors. Locks & Fittings: New sound absorbing techniques for hinges and furniture fittings. New materials, forms and colours for decorative products and extension systems for drawers. DIY: Soft pastel colours will be more prevalent on walls, switches, sockets and mouldings. New store presentation and organizational ideas for retail spaces. More demand for “soft-product” items such as porcelain and ceramic and a stronger overall demand for high-quality products with longer life spans. One of the event’s highlights will be the special exhibit “Modern Power Tools: Productivity – Safety – Ergonomics,” featuring the latest trends and developments in this industry segment. The exhibit is supported by the Association of German Tool Manufacturers and by the country’s leading power tool manufacturers, including TTS Tooltechnik Systems, Robert Bosch, AEG & Milwaukee Elektrowerkzeuge, C. & E. FEIN, Black & Decker, Hilti and WERA-WERK. Online registration is now available at http://www.hardwarefair.com/tickets/index.php. For information about exhibiting, attending or traveling to the International Hardware Fair Cologne, please contact Chris Beavers, North American project manager, at 773-326-9928; c.beavers@koelnmessenafta.com. (You won’t want to miss our Hardlines Canada Night Reception in Cologne. For more info, contact Beverly Allen, Publisher of Hardlines, at bev@hardlines.ca .) | |||||||||||||||||||||||||||
National Hardware Show is filling up fast |
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NORWALK, Conn. — Exhibition space at the National Hardware Show is more than 86% filled with six months left until the show opens.The event runs May 4-6, 2010 in Las Vegas. “Manufacturers from all over the globe have reserved their location on the show floor, with many companies expecting to unveil new products at the show,” says Ed Several, Group vice-president and show manager, National Hardware Show. “We are optimistic that the expected market recovery in mid-2010 will encourage retailers to diversify their inventory mix by reviewing hundreds of thousands of new SKUs in a variety of price points and gaining valuable insight, ideas and inspiration.” A number of major suppliers are already committed to exhibit at the National Hardware Show. They include: 3M, Ames True Temper, Arrow Fasteners, Bond Manufacturing, Brinkmann Corporation, Channellock, Coleman Cable, Cosco Home & Office, Elmer’s Products, Fiskars, ITW, Jarden’s First Alert brand, Karcher, Franklin Electric and MTD Products. Other national brands that will be present include ShurTech Brands, Stanley National Hardware, Stanley Tape, Vaughn & Bushnell, Worx and The Scotts Company. “New programs, products, insights and customer value have all contributed to this early commitment to next year’s show, we believe,” says Several. A series of “Discovery Zones” will let retailers see the latest new products for the categories in which they buy, while brand new custom research will be unveiled by the North American Retail Hardware Association. | |||||||||||||||||||||||||||
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DID YOU KNOW…? |
…that the market share and sales and market share of every retail banner in the country is now available from Hardlines? The Hardlines Market Share Report is now available. Click here for more info and to get your copy now! —Michael |
NEWS IN BRIEF |
MOORESVILLE, N.C. — Lowe’s Cos., in cooperation with the U.S. Consumer Products Safety Commission and Health Canada, has recalled 664,700 gas barbecue grills, following reports that 21 people who used the grills had suffered burns from irregular flames or the grill lid catching fire. Seventeen hundred of the grills have been sold in Canada, the rest sold in the U.S. The grills were made in China by Lucas Innovations Inc, and sold exclusively by Lowe’s under Perfect Flame SLG brand, from September 2005 through May 2009 in the U.S., and from December 2007 through May 2009 in Canada. There have been about 40 reports of irregular flames from the grills, and 23 incidents of the lid catching fire.
BALTIMORE — Stanley Works’ $5.4 billion deal to acquire Black & Decker has some shareholders seething. The Baltimore Sun reports that at least four lawsuits have been filed by investors in an attempt to block consummation of the all-stock transaction, in which Connecticut-based Stanley would become B&D’s majority owner. The suits—three of which are seeking class action status— accuse Towson, Md.-based Black & Decker and its board of breaching their fiduciary duties by undervaluing the company and agreeing to terms that are preferential to Stanley and benefit a few company insiders, reports The Sun.
NATIONAL REPORT — Both Lowe’s and Home Depot report that they are reducing their orders for artificial Christmas trees this season. Instead, U.S. shoppers are looking to save money by buying the real thing, according to Bloomberg.
BOUCHERVILLE, Que. — RONA’s sponsored TV show, Ma Maison RONA, will be renewed on TVA for the eighth consecutive year. In spring 2010, the reality show will be shot in the Quebec City region and follow the adventures of two families as they design, build and decorate two new houses. Viewers then choose one family to win the house they have built, furniture and all. The show will be hosted by actress Mélanie Maynard, broadcaster and co-host of TVA’s Deux filles le matin. Families wanting to participate in Ma Maison RONA can register at any RONA store, at www.rona.ca or at www.tva.canoe.ca between Nov. 30 and Dec. 17.
MOLINE, Ill. — Deere & Company has reported a worldwide net loss of $222.8 million for the fourth quarter ended October 31, compared with net income of $345.0 million for the same period last year. Affecting fourth-quarter 2009 results were charges of $364.8 million pretax and $321.8 million after-tax. Without the items, earnings for the quarter would have been $99.0 million. For the full year, net income was $873.5 million, down from $2.1 billion. Worldwide net sales and revenues declined 28 percent, to $5.33 billion, for the fourth quarter and were down 19 percent, to $23.112 billion, for the full year.
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PEOPLE ON THE MOVE |
Taiga Building Products Ltd. has made some changes to its executive team, effective Jan. 1, 2010. Trent Balog will step into the role of executive vice-president, operations. Kevin Bradshaw will assume the role of executive vice-president, supply management. Grant Sali will become executive vice-president, allied products and treated wood products. In addition, Jim Bradshaw, president and CEO, will retire. He will join the Taiga board as a non-executive director. The CEO position will be taken over by Cam White, who is currently Taiga’s evp, sales and operations and COO. He will assume his new position April 1, 2010. |
ECONOMIC INDICATORS |
Retail sales in current dollars rose 1.0% in September to $34.9 billion, the seventh increase in nine months. In volume terms, retail sales increased 1.2% in September. The sector has been rising since the beginning of 2009, following a sharp decline at the end of 2008. On a year-over-year basis, sales in September were 3.3% lower than in September 2008. (Stats Canada) |
OVERHEARD... |
“If you grew up anywhere on the Prairies, you know what co-op is all about.” —Vaughn Crofford, president of the Canadian Hardware and Housewares Manufacturers Association, during his introduction of Rod Baergan of Federated Co-operatives Ltd. Baergan was speaking last week at a CHHMA breakfast meeting. |
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