| BMR ANNOUNCES DISTRIBUTION DEAL WITH AWARD, TIM-BR MART ONTARIO |
| MONTREAL — Three building materials buying groups have announced a joint initiative that confirms the emergence of a new full-line hardware wholesaler in Canada. Quincaillerie Matreco Hardware is the name of the company, the product of an alliance among three of the four member groups within the umbrella buying group, Matreco, namely Le Groupe BMR, TIM-BR Mart Ontario (formerly Homecare Building Centres), and AWARD.
Yves Gagnon, president and CEO of BMR, will also serve as president of Quincaillerie Matreco Hardware. The Quebec-based member has in fact been developing its own hardware distribution since 1997, and at the beginning of this year opened an expanded hardware distribution facility in Longueuil, QC. With the formation of Quincaillerie Matreco Hardware, BMR can now ship to dealers beyond its own membership of 125 stores in Quebec, northern New Brunswick and eastern Ontario, giving the Longueuil facility an important boost to its volume levels.
The consolidated distribution entity has the potential to be a potent force. Matreco's members, including TIM-BR-Marts Ltd. in western Canada, represent combined retail sales of about $2.5 billion. BMR's hardlines wholesale purchases are expected to reach about $85 million this year, and with the addition of the TIM-BR Mart Ontario and AWARD business, that figure should at least double.
"Our plan is to be at $300 million in wholesale sales in three years," says Gagnon. He adds that he is in talks with Tim Urquhart, the new head of TIM-BR-Marts in the west, though nothing firm has been established yet.
Gagnon established hardware distribution for his own members to provide greater control of the buying group's purchasing. Within the past year, Tom Smith, president of AWARD liked what he saw at BMR, began establishing the feasibility of a warehouse for his own members. The result is the formation of AWARD Distribution Ltd., a satellite distribution centre located near Halifax in Bedford, NS that will carry about 5,500 fastest moving SKUs initially.
The 42,000-sq.ft. former Sobey's distribution centre cost AWARD $1.9 million and will reopen by December 2003. It was financed by an investment of $35,000 from each of more than 50 of AWARD's 60 dealer-members.
"Quincaillerie Matreco Hardware is all about competing with a consolidating industry," says Smith at AWARD. "We believe this initiative goes a long way to offering not only pricing, but products and innovations that will help our dealers compete."
"We're excited by the buying power that's emerging under the new alliance," says Don Nash, president of TIM-BR Mart Ontario. "BMR has outlined an important road map for our own distribution needs." But Nash is in no hurry to establish distribution for his own group in Ontario, preferring to wait until his members' hardlines purchases double over the next five years from their present level of about $50 million before proceeding. "When warranted, an Ontario distribution centre will be opened," he concludes. |
| AWARD'S NEW DC GETS BOOST FROM KEY MEMBER'S SUPPORT |
| MONTREAL — As he was about to board a plane back to Halifax, AWARD president Tom Smith revealed an 11th-hour signing of a key member to his buying group's new distribution centre deal.
Smith told Hardlines that AWARD's largest dealer, Chester Dawe, had confirmed its commitment to AWARD's new Halifax-area warehouse with a $35,000 investment in AWARD Distribution Ltd., which was formed as part of the newly created Quincaillerie Matreco Hardware (see preceding story).
Chester Dawe is AWARD's largest dealer. With retail sales approaching $70 million, it accounts for more than one-fifth of the group's dealer sales through its eight stores in Newfoundland. Its support was considered by many to be pivotal to the viability of ADL.
"The decision by Chester Dawe to join forces with AWARD Distribution Ltd. is a huge vote of confidence for our business model," says Smith. "Chester Dawe was a founding member of AWARD and their experience and expertise have always been an asset to our business."
Smith went on to acknowledge the decision by Chester Dawe president Phil Budden and his team to support ADL. "With their help and guidance, we expect AWARD will become a dominant retail force in Atlantic Canada." |
| HOME DEPOT LEADS PUSH FOR VENDOR COMPLIANCE TO DATA SYNC |
| TORONTO — Home Depot was there. And so was Home Hardware. And Canadian Tire. The topic of discussion was considered so important that Rona's top merchandiser sat in via remote telephone hook-up from Boucherville, QC.
Yet it's a topic that is only beginning to get the awareness it deserves. It's the synchronization of product data codes to a single global standard. Called data sync for short, the initiative is being driven in Canada by the Electronic Commerce Council of Canada, or ECCC, under its data sync arm, ECCnet. At the meeting, held last week, ECCnet's mandate got a big push when Home Depot Canada announced it wants all its vendors to comply by 1Q 2004, to coincide with the timetable of Home Depot – and Wal-Mart – in the U.S.
Mark Healy from Home Depot in the U.S. explained the status of the retailer's efforts below the border, where it's working with UCCnet to get vendors onside by the end of 2003.
Healy urges other retailers to adopt the mandate. "We're all in this together," he said. "We're not competitors in terms of data. Let's streamline it, make it easy as possible for our suppliers."
Canadian Tire and Home Hardware voiced their commitment to the data synchronization process, but added they will do it at their own speed.
Mark Dufresne, executive vice-president of purchasing and logistics for Rona, commented by telephone that as much as 20-25% of the information with each shipment can be wrong. If the purchase orders are correct, then payment gets processed faster and everyone wins, he noted. |
| SAM'S CLUB OPENS FOUR LOCATIONS IN CANADA |
| MISSISSAUGA, ON — Wal-Mart Canada celebrated the launch of its first Sam's Club warehouse operations in Canada with simultaneous openings in four Ontario communities last week: Etobicoke, Pickering, Richmond Hill, and Vaughan.
Wal-Mart is taking on Costco Wholesale Canada. With 60 stores, in every province except Prince Edward Island, Costco has, until now, had the Canadian warehouse club market to itself. With a similar format to Costco's, Sam's Club offers a limited, ever-changing assortment of about 4,000 items, including appliances, home and office electronics, office supplies, apparel, optical, home furnishings, books, batteries, and auto supplies. Sam's Club also features fresh case-ready meats, produce, frozen foods, and fresh bakery items.
The warehouse approach is reflected in each store's appearance: a 120,000 sq.ft. box with cement floors and high ceilings, and merchandise often stacked on shipping pallets and steel racks from floor to ceiling.
The Sam's Club outlets represent a combined investment of approximately $80 million by Wal-Mart Canada. More openings will be announced over the coming months. |
| CANADIAN HARDWARE SHOW ADDS INCENTIVES |
| TORONTO — The Canadian Hardware and Building Materials Show is developing new features to lure attendees in 2004. It kicks off with a "Grand Opening" celebration at the National Trade Centre, which will pay tribute to companies and individuals that have made contributions to the industry over the years.
CHS also plans to provide free parking from one of the parking lots that serves the show at Exhibition Place. In addition, the show's owner and organizer, the Canadian Retail Hardware Association, will offer e-learning sessions at the CRHA's booth at the show. Retailers and vendors alike will be able to sample modules on loss prevention, product knowledge and store compliance training.
As large "brand" manufacturers have drifted away from the show, CHS has been relying more and more on new and smaller companies to fill the exhibitors' ranks, a move that worked well for the show last year. In fact, space for new vendors is already sold out, and show organizers are now opening up the floor plan to facilitate additional new vendors. Called "New Vendor Avenue," the area was introduced at CHS in February 2003 and the space next year will include companies from Canada, the U.S., China and India.
CHS takes place February 1-3, 2004 at the National Trade Centre in downtown Toronto. |
| EAGER DIYER GIVES TRUSERV IDEA FOR PAINT SAMPLES |
 WINNIPEG — At its latest dealer market, TruServ Canada Cooperative Inc. unveiled a beefed-up paint and décor program for its dealers, complete with a computerized color match system. The new "Color Made Simple" paint and décor area also features a two-foot section with more than 40 large "idea cards," decorating samples that showcase a colour scheme for an entire room, rather than a single colour.
The idea cards were inspired by a customer, says Ray Falkenberg, TruServ's vice-president, business development and marketing. A True Value customer in Western Canada actually painted his entire house following the colour scheme of a home featured on one of the retailer's flyers, tipping them off that consumers are hungry for coordinated décor inspiration.
But the idea cards are just one part of an enhanced paint and décor department that was unveiled at TruServ's recent market. The newly branded Color Made Simple paint and décor program features an updated color centre in both eight- and four-foot sizes. The eight-foot program features more than 900 colours and has been moved to the front of the department, to make it more visible to the customer. New stores and renovated stores will present the department at the front right-hand side of the store for maximum exposure and impact.
Other enhancements include new "trend brochure" with oversized peel-and-stick colour chips, an expanded how-to section with brochures, magazines and books, and the addition of a monthly newsletter dedicated to paint and decorating called "The Painters Palette." |
| MAPLE LEAF GARDENS WILL GO GROCERY |
| TORONTO — The venerable Maple Leaf Gardens, built during the Great Depression as a sports and entertainment facility, has sat empty in recent years, but now its owner, Maple Leaf Sports & Entertainment Ltd., has sold the Gardens to the real estate arm of Loblaw Cos. Canada's largest food distributor.
The sale is expected to close early in 2004, and within a year it will be turned into a combination food and non-food market anchored by a Loblaws grocery store. The Gardens has been closed since the Toronto Maple Leafs relocated to the Air Canada Centre in February 1999. Other reported suitors for the large, downtown facility included Home Depot Canada.
(This editor's grandfather was the original accountant for the Gardens, and ended up as box office manager, reporting directly to Mr. Conn Smythe. Our season's tickets to the Leafs games were second row blues, right behind the home net. Mrs. Keon and Mrs. Shack had their seats right in front of us. To my two younger brothers and I, they were the most beautiful women we'd ever seen, and thrilled when they showed up in their bouffants and mink coats. After my grandfather died, Coca-Cola, which supplied pop to the Gardens, sent a wooden case of Coke to my grandmother every week for the rest of her life.— MM) |
| NEW BUILDERS' HARDWARE LINE SHAKES UP ACE MEMBERS |
| OAK BROOK, IL — For the first time in its 80-year history, Ace Hardware Corp. is about to offer its dealer-members a complete builders' hardware program under its own name. However, even though that private label program won't be rolled out until next spring, it has already stirred up controversy among some members.
Ace displayed a sampling of the 1,100-SKU program and its packaging at its fall buying show last week. Paula Erickson, a spokesperson for the co-op, told Hardlines that dealers would be able to purchase the program out of Ace's warehouses at prices more than 25% below what they've been paying for comparable builders' hardware from National Manufacturing, the Illinois-based supplier that has long been the co-op's primary stocking vendor for this category.
The Ace line promises considerably higher margins, too. To make the transition easier for dealers, Ace would continue to stock National's line. But Erickson said that based on demand, Ace's line could eventually replace National's in the Ace's distribution centres. |
| INDUSTRY STOCK WATCH |
|
COMPANY |
52-WEEK HIGH |
52-WEEK LOW |
CLOSE FRIDAY |
| Canadian Tire |
40.90 |
27.85 |
40.84 |
| Canfor |
10.95 |
7.09 |
8.70 |
| Costco |
39.02 |
27.00 |
35.45 |
| Goodfellow |
12.40 |
9.75 |
12.25 |
| Home Depot |
37.84 |
20.10 |
37.07 |
| Hudson's Bay |
11.28 |
6.41 |
11.00 |
| Lowe's Cos. |
59.95 |
33.37 |
58.93 |
| Rona Inc. |
24.95 |
11.75 |
24.50 |
| Sears Canada |
20.31 |
13.60 |
20.25 |
| Sodisco-Howden |
3.35 |
1.15 |
2.85 |
| Taiga Forest |
8.10 |
6.00 |
7.45 |
| Wal-Mart |
60.20 |
46.25 |
58.95 |
| West Fraser |
39.05 |
29.25 |
33.65 |
|
|
| COMPANIES IN THE NEWS |
KINGSTON, ON — Rona's latest Home & Garden store opens in this community east of Toronto later this week. The 120,000-sq.ft. store will be the company's 62nd big box store.
 MARKHAM, ON — Canadian Tire Corp. officially launched its new 20/20 store format in four stores across the country last week. The newest spin on Canadian Tire's ongoing enhancements to its stores, this one shrinks the backroom, putting more merchandise on the shelves, with more room for housewares and kitchen gadgets, and other categories that appeal to women shoppers. It also expands the footwear and apparel sections (the Markham store even has a change room), with a brighter retail environment and more room to move around. (We'll have more for you on the new concept, including more pics, in next week's issue. — MM)
ENGLEWOOD, CO — PRO Group and Distribution America will jointly present an Executive Planning Conference November 13-15. The event, which will be held in Naples, FL, will offer a forum to some 450 delegates for 2004 strategic planning and goal setting.
Eighty Four, PA — 84 Lumber cracked the US$2 billion mark a month and a half earlier than it did last year, when it cracked the sales threshold for the first time. With growth that has been fuelled by aggressive store openings, including three last month in Louisiana, 84 Lumber finished last year with sales of US$2.2 billion and expects to end this year with sales of about US$2.5 billion.
LONGUEUIL, QC — For the third quarter of 2003, Sico Inc. recorded sales of $80.1 million, up 18.3% over the same quarter in 2002. Growth came largely from a 23.2% increase in the architectural sector's sales, which rose to $70.3 million, mostly as a result of the three-month contribution of newly acquired Para Inc. Net earnings reached $3.2 million for the third quarter, and $12.0 million for the nine-month period, after accounting for pre-tax restructuring expenses of $3.6 million.
ATLANTA — Newell Rubbermaid Inc. had flat third-quarter sales of US$1.9 billion, which were flat compared with 3Q 2002. Net income in the quarter was US$75.2 million, a dip from US$76.2 million a year earlier. Excluding charges, net income in the third quarter was US$109.4 million, versus US$122.9 million in 2002.
MONTREAL — Norcross Safety Products has acquired Kachele-Cama Latex GmbH, a German manufacturer of hand protection products with production in Hungary and the Czech Republic. KCL will continue to market as a stand-alone company, but will be integrated into the North Safety Products family and will report to Claude Roberge, president of North Safety Products Canada, a manufacturer of occupational health and safety products.
CLEVELAND, OH — Sherwin Williams, North America's largest paint manufacturer and retailer, reported that sales from its 2,671 paint stores increased 5.4%, to US$989 million, in the three months ended September 30. Same-store sales grew by 4.5% over the same period a year ago, but the stores' operating income inched up only 0.73% to just under US$141 million.
TORONTO — From its head office here, Sears Canada Inc. announced last week a number of store re-openings following expansion. These included two full-line stores in Sorel, QC, one in Victoriaville, QC and another in St-Georges de Beauce, QC.
VANCOUVER — For its third quarter, Canfor Corp. had net income of $80.1 million, an improvement over its loss of $11.8 million in the same quarter of 2002. The company recorded pre-tax operating income of $41.9 million in the quarter, $89.4 million more than the second quarter and $44.1 million more than the same quarter in 2002. Net income for the nine-month period was $119.2 million, compared with $69.5 million a year earlier. The 3Q results included a $60.7 million after-tax gain on the sale of BC Chemicals.
BUFFALO, NY — CertainTeed broke ground last week on a new 250,000-sq.ft. plant in South Buffalo that will mark a US$13.5 million investment in the area. |
| PEOPLE ON THE MOVE |
|
DARTMOUTH, NS — Sandy Welsh, formerly vice-president of Cameron Ashley Canada's Atlantic division, has been recruited by the AWARD buying group, which serves 95 building centre outlets in Atlantic Canada. Welsh will provide his expertise in building products distribution for the buying group, as it ramps up for a strategic partnership formed last week with Le Groupe BMR in Quebec. (902-835-7242)
Do it Best Corp. elected a new board of directors at its annual shareholders' meeting recently. Bruce Ellis of Roswell Lumber Do it center in Roswell, NM has been elected as chairman … Stan Hardman of Hardman's, a seven-store chain in Spencer, WV has been named vice-chairman … Mitch Newenhouse of Charlie's Hardware in Mosinee, WI will serve as secretary. (260-748-5300) |
| MARKET INDICATORS |
| Feeling the impact of the energy blackout in Ontario back in the summer, Canada's economic activity shrank in August, says Stats Canada. Gross Domestic Product plummeted 0.7% as residents in Ontario were asked to cut back consumption, affecting everything from manufacturing to transportation. The last time the economy experienced such a large setback was in September 2001, when GDP fell 0.6%. Ontario represents about 42% of the total Canadian economy.
The U.S. economy is being described as "red hot," as its Gross Domestic Product grew by 7.2% in the third quarter. According to the U.S. Commerce Department, consumer spending was up by 6.6%, encouraged by tax cuts, making the increase in consumer spending the biggest since early 1988. This 3Q growth follows the 3.3% increase in the second quarter of 2003. Consumer spending (personal consumption expenditures), along with computers and software, residential fixed investments and exports contributed to the 3Q increase.
New home sales in the U.S. in September reached 1.15 million seasonally adjusted. That's down 0.2% from the preceding month, but up 8.3% over September 2002. |
| LAS VEGAS SHOW CONTINUES TO BOLSTER RANKS |
| NORWALK, CT — The National Hardware Show, taking place in Las Vegas next spring, has announced the signing of 1,514 vendors so far, including familiar brands that include Briggs & Stratton, Scotts and Zinsser.The exhibiting manufacturers at NHS 2004 represent approximately 351,445 sq.ft. of space. In addition, more than 3,000 retailers, wholesalers and distributors have already registered to attend the show.
The National Hardware Show, owned and operated by Reed Exhibitions, will be held May 10-12, 2004. However, it's up against a competing show, the AHMA Hardware Show, being held in Chicago just weeks earlier, from April 18-20. Both shows have been battling for exhibitors – and credibility. |
|
John Caulfield, Contributing Editor
vol. ix, #42 November 3, 2003
FSE Inc. makes product management and data distribution easy. FSE have assisted over 80 companies in streamlining the corporate data management process.
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Contact Michael Owens, Director of Business Development at 416-847-2137, or email to michael@accessfse.com, to find out how FSE can help you load product data to UCCnet in the USA and ECCnet in Canada. http://www.accessfse.com
(Nov. 17/03)
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