November 8, 1999 - Volume v, #45
Michael McLarney, Editor & Publisher
Ph: 416-489-3396 Fx: 416-489-6154

* * * * * * *

Thinking of attending the world's biggest Hardware/home improvement show? Call or e-mail me for details of our trip to Cologne, Germany, March 12-15, 2000.

* * * * * * *

REMEMBER - THE HARDLINES WHO'S WHO DIRECTORY OF CANADIAN RETAILERS, BUYING GROUPS, MASS MERCHANTS AND WHOLESALERS IS NOW AVAILABLE!

BEAVER DEAL FINALLY CLOSES WITH HOME

The proposed takeover of Beaver Lumber Co. Ltd. by Home Hardware got government approval last week, enabling the deal to close officially on November 4, a month later than originally anticipated. Beaver will operate as a separate business unit of Home, with Eric Konecsni, Beaver's new vice-president and general manager, reporting directly to Home's vice-president and CEO, Paul Straus.

Konecsni says the Beaver name will remain, based on the brand equity of the 93-year-old company. Beaver stores and Home building centres share markets in about 25 communities.

In the process, Beaver's name has changed to Beaver Lumber Inc. What won't change is Beaver's buying deal with Ace Hardware Canada, which Home will honour until the deal ends in June 2001. Konecsni admits, however, that the arrangement may be terminated earlier "if advantageous to both sides." Ace's vice-president international business, Paul Ingevaldson, has said the same thing.

The challenge facing Beaver is to help its dealers, which own 50% of their businesses, to take over the remaining portion, to conform to Home's model of dealer ownership. The acquisition adds Beaver's 138 joint-venture dealers, with sales of $684 million in 1998, to its own $2.1 billion network of 960 hardware and building centres. Home paid a total of $68 million, $33 million in cash and the balance in debt through a term loan extended by Molson.

* * * * * * *

RONA WANTS 250 STORES IN ONTARIO

At its latest dealer market, held last week in Montréal, RONA inc. announced plans to become a truly national player with 500 stores outside of Québec and 15% of the Canadian hardware and home improvement market by 2002.

That means 250 outlets in Ontario alone, including 12 warehouse stores and 15 regionals, for total sales of $1 billion there. Growth will come through investment by new and existing dealers, the establishment of corporate stores - and, says RONA chairman Henri Drouin - through a forthcoming acquisition.

RONA claims to have 32% of the Québec market already, with $1.4 billion in sales there. Plans for two more big boxes, seven additional regional centres, and another 100 smaller stores will give the company 500 outlets and $1.7 billion in retail sales in that province.

* * * * * * *

RESTORATION HARDWARE HITS TORONTO MARKET

Restoration Hardware has opened its second store in Canada, and the first in Toronto. The 7,500-sq.ft.store has been open for two weeks at Bayview Village, a small upscale mall in North York. The high-end, housewares and and lifestyle store originated in Eureka, Calif., in 1979 and now has 86 locations. Sales in 1998 were US$209 million.

A second Toronto location, weighing in at 9,000 sq.ft., will open November 25 at Yonge and Eglinton. It will be Restoration's 93rd store. A spokesperson for the company says there is no "master plan" for Canada, but adds Calgary is under consideration as a future site.

Réno-Dépôt Inc. has opened Ontario offices at 3780 14th Avenue, Suite 314, Markham, Ont. L3R 9Y5; telephone: 905-479-2500. The company will announce some additions to the team there today, including a new director of real estate for Ontario. Later in the month, the new name Réno-Dépôt will operate under outside Québec, as well as initial sites in the GTA, will be announced. None have been confirmed as yet.

Revy Home & Garden has secured its next Toronto location, a property on Comstock, south of Eglinton at Warden Avenue in Scarborough. It will open next year as part of a retail development that includes Wal-Mart and Canadian Tire.

RONA Inc. has launched the RONA Holiday Gift e-Boutique at www.rona.ca. A selection of 275 items is available to consumers as a trial for a bigger launch next Spring. Shoppers can choose to have their order delivered to their home, to the gift recipient or to the nearest RONA store for pick-up. Depending on the order, gifts will be delivered within 48-72 hours anywhere in Ontario, Québec, New Brunswick, Nova Scotia or Newfoundland.

Sears Canada will open a Sears Furniture and Appliance store on St. James Street in Winnipeg early next year. Winnipeg is the first city in the province to get one of the free-standing outlets. Also: Humboldt, Sask., was the scene of the opening of the 100th Sears Dealer store last Thursday. The first one opened in Pembroke, Ont., in August 1994.

For the three months ended September 30, Unican Security Systems Ltd. had sales $110.7 million, compared with $106.2 million for the same period last year, a 4.2 % increase. Net earnings increased 12.9 % to $7.0 million.

Sears Canada has launched a Christmas promotion called "Shop, Wish and Win!", a giveaway of 25,000 prizes worth more than $2 million. The contest gives shoppers a chance to win a prize every time they make a purchase through any of Sears shopping channels, including department stores, Sears catalogue and www.sears.ca.

Newell Rubbermaid Inc. has acquired the consumer products division of McKechnie plc. Companies acquired include Harrison Drape, a manufacturer and marketer of drapery hardware and window furnishings, Spur Shelving, a manufacturer and marketer of shelving and storage products, Douglas Kane, a manufacturer and marketer of cabinet hardware, and Nenplas/Homelux, a manufacturer and marketer of functional trims. Combined estimated 1998 revenues for the companies were approximately 95 million pounds sterling.

New Jersey plumbing contractors have temporarily stopped Home Depot from installing water heaters in the state. The New Jersey State League of Master Plumbers filed multiple complaints against Home Depot for using unlicensed plumbers to do the work. State law also requires the company offering the installation to be partly owned by a licensed plumber, a requirement, says the league, which Home Depot does not fulfil.

Owens Corning plans to invest US$27 million in Chester County to build a 200,000-sq.ft. Cultured Stone manufacturing facility in Chester County, S.C. The facility is intended to complement existing regional locations in California and Ohio. Productions is expected to begin during the third quarter of 2000.

CANADIAN STOCK WATCH

COMPANY	52-WEEK HIGH	52-WEEK LOW	CLOSE (FRI.)
Canadian Tire	46.00	29.00	33.10
Canfor	13.30	4.25	13.95
Goodfellow	11.80	6.00	11.10
Hudsons Bay	23.85	4.00	18.50
MacMillan Blo.	27.85	12.05	24.50
Sears Canada	34.35	15.25	35.00
Taiga Forest	14.75	8.65	14.00
West Fraser	41.00	9.05	32.00

"I'd rather have a bottle in front of me than a frontal lobotomy."
- Tom Waits

PEOPLE ON THE MOVEHome improvement retailer Cluny Sheppard, president of Notre Dame Agencies in Lewisporte, Nfld., has been recognized as one of Atlantic Canada's top 100 businesspeople for 1998-'99. In a list published in a recent issue of Atlantic Progress magazine that included all business disciplines, Sheppard earned the number 70 position. His company, which includes seven Castle dealerships and three furniture stores in Newfoundland, has more than $21 million in retail sales. (709-535-8691)

Steve Kornai has joined the Innovak group of companies as industrial account manager. He ws formerly with Richard-Duskes, division of Westburne Inc. (514-695-7221, ext. 366)

Here's why:

1. Escorted travel from Toronto to Cologne via Frankfurt -let us help you make your voyage worry-free by taking care of the details.

2. "Canada Night" Reception in Cologne&endash; A night of networking with fellow Canadian retailers and vendors, and a presentation by key European buyers.

3. Pre-show seminar &endash; Hardlines and the Canadian office of the Cologne Trade Fairs will jointly present tips on how to maximize your presence at the Show.

4. Hardlines Handbook of the European market &endash; a helpful guide to European markets.

5. Store tours &endash; We'll take you on a tour of the European big-boxes and independents so you can take home the latest ideas for merchandising, packaging and store layout.

6. Spouses' program &endash; Join us to discover the sights and scenes of historic Cologne.

Come to the Cologne International Hardware Fair/DIY'TEC with HARDLINES, March 12-15, 2000, in Cologne, Germany.

Travel to the International Hardware Fair in Cologne to position yourself as a key player in the 21st century. Find out where the growth opportunities lie, discover how the world's markets are changing and learn about the latest new products.

Hardlines has arranged special travel packages that will make your trip painless and affordable. Not only will we help you with your travel arrangements, but we'll also ensure your trip is beneficial to both you and your company.

Affordable, comprehensive travel packages are available in two- and five-star accommodations. Just email us for more information. Our recommended Canadian travel agent will contact you to arrange your personalized travel package.

* * * * * * *

HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: hardline@terraport.net © 1999 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. 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.

November 8, 1999 - Volume v, #45
Michael McLarney, Editor & Publisher
Ph: 416-489-3396 Fx: 416-489-6154

* * * * * * *

Thinking of attending the world's biggest Hardware/home improvement show? Call or e-mail me for details of our trip to Cologne, Germany, March 12-15, 2000.

* * * * * * *

REMEMBER - THE HARDLINES WHO'S WHO DIRECTORY OF CANADIAN RETAILERS, BUYING GROUPS, MASS MERCHANTS AND WHOLESALERS IS NOW AVAILABLE!

BEAVER DEAL FINALLY CLOSES WITH HOME

The proposed takeover of Beaver Lumber Co. Ltd. by Home Hardware got government approval last week, enabling the deal to close officially on November 4, a month later than originally anticipated. Beaver will operate as a separate business unit of Home, with Eric Konecsni, Beaver's new vice-president and general manager, reporting directly to Home's vice-president and CEO, Paul Straus.

Konecsni says the Beaver name will remain, based on the brand equity of the 93-year-old company. Beaver stores and Home building centres share markets in about 25 communities.

In the process, Beaver's name has changed to Beaver Lumber Inc. What won't change is Beaver's buying deal with Ace Hardware Canada, which Home will honour until the deal ends in June 2001. Konecsni admits, however, that the arrangement may be terminated earlier "if advantageous to both sides." Ace's vice-president international business, Paul Ingevaldson, has said the same thing.

The challenge facing Beaver is to help its dealers, which own 50% of their businesses, to take over the remaining portion, to conform to Home's model of dealer ownership. The acquisition adds Beaver's 138 joint-venture dealers, with sales of $684 million in 1998, to its own $2.1 billion network of 960 hardware and building centres. Home paid a total of $68 million, $33 million in cash and the balance in debt through a term loan extended by Molson.

* * * * * * *

RONA WANTS 250 STORES IN ONTARIO

At its latest dealer market, held last week in Montréal, RONA inc. announced plans to become a truly national player with 500 stores outside of Québec and 15% of the Canadian hardware and home improvement market by 2002.

That means 250 outlets in Ontario alone, including 12 warehouse stores and 15 regionals, for total sales of $1 billion there. Growth will come through investment by new and existing dealers, the establishment of corporate stores - and, says RONA chairman Henri Drouin - through a forthcoming acquisition.

RONA claims to have 32% of the Québec market already, with $1.4 billion in sales there. Plans for two more big boxes, seven additional regional centres, and another 100 smaller stores will give the company 500 outlets and $1.7 billion in retail sales in that province.

* * * * * * *

RESTORATION HARDWARE HITS TORONTO MARKET

Restoration Hardware has opened its second store in Canada, and the first in Toronto. The 7,500-sq.ft.store has been open for two weeks at Bayview Village, a small upscale mall in North York. The high-end, housewares and and lifestyle store originated in Eureka, Calif., in 1979 and now has 86 locations. Sales in 1998 were US$209 million.

A second Toronto location, weighing in at 9,000 sq.ft., will open November 25 at Yonge and Eglinton. It will be Restoration's 93rd store. A spokesperson for the company says there is no "master plan" for Canada, but adds Calgary is under consideration as a future site.

Réno-Dépôt Inc. has opened Ontario offices at 3780 14th Avenue, Suite 314, Markham, Ont. L3R 9Y5; telephone: 905-479-2500. The company will announce some additions to the team there today, including a new director of real estate for Ontario. Later in the month, the new name Réno-Dépôt will operate under outside Québec, as well as initial sites in the GTA, will be announced. None have been confirmed as yet.

Revy Home & Garden has secured its next Toronto location, a property on Comstock, south of Eglinton at Warden Avenue in Scarborough. It will open next year as part of a retail development that includes Wal-Mart and Canadian Tire.

RONA Inc. has launched the RONA Holiday Gift e-Boutique at www.rona.ca. A selection of 275 items is available to consumers as a trial for a bigger launch next Spring. Shoppers can choose to have their order delivered to their home, to the gift recipient or to the nearest RONA store for pick-up. Depending on the order, gifts will be delivered within 48-72 hours anywhere in Ontario, Québec, New Brunswick, Nova Scotia or Newfoundland.

Sears Canada will open a Sears Furniture and Appliance store on St. James Street in Winnipeg early next year. Winnipeg is the first city in the province to get one of the free-standing outlets. Also: Humboldt, Sask., was the scene of the opening of the 100th Sears Dealer store last Thursday. The first one opened in Pembroke, Ont., in August 1994.

For the three months ended September 30, Unican Security Systems Ltd. had sales $110.7 million, compared with $106.2 million for the same period last year, a 4.2 % increase. Net earnings increased 12.9 % to $7.0 million.

Sears Canada has launched a Christmas promotion called "Shop, Wish and Win!", a giveaway of 25,000 prizes worth more than $2 million. The contest gives shoppers a chance to win a prize every time they make a purchase through any of Sears shopping channels, including department stores, Sears catalogue and www.sears.ca.

Newell Rubbermaid Inc. has acquired the consumer products division of McKechnie plc. Companies acquired include Harrison Drape, a manufacturer and marketer of drapery hardware and window furnishings, Spur Shelving, a manufacturer and marketer of shelving and storage products, Douglas Kane, a manufacturer and marketer of cabinet hardware, and Nenplas/Homelux, a manufacturer and marketer of functional trims. Combined estimated 1998 revenues for the companies were approximately 95 million pounds sterling.

New Jersey plumbing contractors have temporarily stopped Home Depot from installing water heaters in the state. The New Jersey State League of Master Plumbers filed multiple complaints against Home Depot for using unlicensed plumbers to do the work. State law also requires the company offering the installation to be partly owned by a licensed plumber, a requirement, says the league, which Home Depot does not fulfil.

Owens Corning plans to invest US$27 million in Chester County to build a 200,000-sq.ft. Cultured Stone manufacturing facility in Chester County, S.C. The facility is intended to complement existing regional locations in California and Ohio. Productions is expected to begin during the third quarter of 2000.

CANADIAN STOCK WATCH

COMPANY	52-WEEK HIGH	52-WEEK LOW	CLOSE (FRI.)
Canadian Tire	46.00	29.00	33.10
Canfor	13.30	4.25	13.95
Goodfellow	11.80	6.00	11.10
Hudsons Bay	23.85	4.00	18.50
MacMillan Blo.	27.85	12.05	24.50
Sears Canada	34.35	15.25	35.00
Taiga Forest	14.75	8.65	14.00
West Fraser	41.00	9.05	32.00

"I'd rather have a bottle in front of me than a frontal lobotomy."
- Tom Waits

PEOPLE ON THE MOVEHome improvement retailer Cluny Sheppard, president of Notre Dame Agencies in Lewisporte, Nfld., has been recognized as one of Atlantic Canada's top 100 businesspeople for 1998-'99. In a list published in a recent issue of Atlantic Progress magazine that included all business disciplines, Sheppard earned the number 70 position. His company, which includes seven Castle dealerships and three furniture stores in Newfoundland, has more than $21 million in retail sales. (709-535-8691)

Steve Kornai has joined the Innovak group of companies as industrial account manager. He ws formerly with Richard-Duskes, division of Westburne Inc. (514-695-7221, ext. 366)

Here's why:

1. Escorted travel from Toronto to Cologne via Frankfurt -let us help you make your voyage worry-free by taking care of the details.

2. "Canada Night" Reception in Cologne&endash; A night of networking with fellow Canadian retailers and vendors, and a presentation by key European buyers.

3. Pre-show seminar &endash; Hardlines and the Canadian office of the Cologne Trade Fairs will jointly present tips on how to maximize your presence at the Show.

4. Hardlines Handbook of the European market &endash; a helpful guide to European markets.

5. Store tours &endash; We'll take you on a tour of the European big-boxes and independents so you can take home the latest ideas for merchandising, packaging and store layout.

6. Spouses' program &endash; Join us to discover the sights and scenes of historic Cologne.

Come to the Cologne International Hardware Fair/DIY'TEC with HARDLINES, March 12-15, 2000, in Cologne, Germany.

Travel to the International Hardware Fair in Cologne to position yourself as a key player in the 21st century. Find out where the growth opportunities lie, discover how the world's markets are changing and learn about the latest new products.

Hardlines has arranged special travel packages that will make your trip painless and affordable. Not only will we help you with your travel arrangements, but we'll also ensure your trip is beneficial to both you and your company.

Affordable, comprehensive travel packages are available in two- and five-star accommodations. Just email us for more information. Our recommended Canadian travel agent will contact you to arrange your personalized travel package.

* * * * * * *

HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: hardline@terraport.net © 1999 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. 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.