|
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
Steve Payne , Contributing Editor
|
| November 9, 2009, Volume xv, #42 | |
In This Issue:
|
|||||||||||||||||||||
|
"Money can't buy poverty." — Marty Feldman (British-born writer and actor, 1934-1982) |
|||||||||||||||||||||
| Please play fair: We ask all our Faithful HARDLINES Subscribers to abide by our "Fair Play" Policy. Help us protect our copyright (and get our kids through college). Please don't pass along your copy to someone who could be a subscriber themselves. We have very low rates for additional subscribers at your company or in the field. Call Brady for more information, or click here to see our low rates —Michael | |||||||||||||||||||||
| Changes at RONA as it fine-tunes Ontario big boxes | |||||||||||||||||||||
| TORONTO — The latest executive change at RONA reflects the giant retailer's ongoing efforts to tweak its big box business in Ontario.Michael Rushton, formerly vice-president operations for big box stores in Ontario, left the company last week. He's been replaced by Luc Rodier, who was brought in from the Boucherville head office, where he had been a regional manager in charge of RONA's "Adrenalin" program, which focused on revitalizing under-performing
Réno-Dépôt stores in Quebec.
Rushton, who had been with RONA for six years, had come over originally from Sobeys, where he had served as vp operations and logistics.
RONA, whose big boxes in Quebec and proximity stores in markets across the country are performing relatively well in light of the overall market, continues to look for ways to solidify its big box business in the highly competitive Southern Ontario market, where it has 21 big boxes. Their performance has been challenged by both the slow economy and the arrival of Lowe's, which already has 14 stores along the Windsor-Kingston corridor with two more set to open before Jan. 31, 2010. (The first of those will open later this month in Orleans in the Capital Region, the second in Sudbury sometime after Christmas.)
According to insiders, the existing RONA big box stores seem not to be impacted adversely by the Lowe's stores and some are in fact holding their own. However, some expansion plans for RONA in Ontario are definitely stalled. A store in Bowmanville was completed but sits empty and is now up for sale, according to a report in Durhamregion.com.
However, the store being built in Aurora, just north of Toronto, is still on track and will open sometime in the first quarter of 2010, says Julie Seidel, spokesperson for RONA.
Top. |
|||||||||||||||||||||
| Stanley and Black & Decker to Merge in $4.5 Billion Deal | |||||||||||||||||||||
|
NEW BRITAIN, Conn. & TOWSON, Md. — Stanley Works and Black & Decker have announced a definitive merger agreement to create Stanley Black & Decker, resulting in a hand, power tool and accessories company worth $8.4 billion globally. Stanley is orchestrating the takeover through an all-stock transaction valued at approximately $4.5 billion. Black & Decker shareholders will receive a fixed ratio of 1.275 shares of Stanley common stock for each share of Black & Decker common stock, which will result in Stanley shareholders owning about 50.5% of the new company. The merger, which joins two of the industry's best known brands, is expected to create $350 million in cost synergies. Much of that will come from trimming staff, up to 3,000 jobs are expected to be lost over the next three years. The company expects an earnings accretion effect of $1 per share by the end of year three of the merger. The combined company will retain a presence in both Connecticut and Maryland, with its corporate headquarters in New Britain and the power tools headquarters remaining in Towson. John F. Lundgren, chairman and CEO of Stanley, will be president and CEO of the combined company. Nolan D. Archibald, B&D's chairman, president, and CEO, will be executive chairman of the combined company for three years. The transaction is expected to close sometime in mid-2010 and is subject to regulatory approvals and the approval of Stanley and Black & Decker shareholders.Top. |
|||||||||||||||||||||
| CMHC reaffirms forecast for 2010 housing increase | |||||||||||||||||||||
| OTTAWA — In its latest Market Outlook, CMHC forecasts that housing starts will reach 141,900 for the year and increase to 164,900 for 2010. That marks the beginning of a much-awaited recovery, says CMHC, as starts are expected to continue to improve in the second half of 2009. Actual housing starts are down a whopping 37.5% compared to the still-high levels of the first nine months of 2008, but the report remains optimistic about the rest of the year. "We expect housing markets across Canada to strengthen leading into and over the course of 2010, as economic conditions improve," says Bob Dugan, chief economist for CMHC. "Demand for existing homes has rebounded since the beginning of the year. In addition, lower inventory levels characterize both the new and existing home markets. As a result, stronger housing demand will be reflected in higher levels of housing starts in 2010," he adds. Existing home sales, as measured by Multiple Listing Service, have been strong in the second and third quarters, reflecting, in part, pent-up demand from the previous two quarters, says the report, although in fact they are still down 1.6% year-to-date compared with last year. Nor is the momentum expected to last, says the report, instead "moving back closer in line with anticipated economic conditions." As a result, existing home sales as measured by the MLS will reach 441,300 units in 2009 and increase to 445,150 units in 2010. The average MLS price is expected to be $312,950 in 2009 and $324,500 in 2010. | |||||||||||||||||||||
| Canada's prospects for recovery brighter than U.S., says retail guru | |||||||||||||||||||||
TORONTO — The wide disparity between the Canadian and American versions of this latest retail sales downturn was clearly described by Dallas-based retail consultant Al Meyers during his "Recession to Recovery," presentation at the recent 14th Annual Hardlines Conference. Referring to the "peak of the trauma" south of the border, Meyers, vice-president of Retail Forward, said that "we had people eating out of their pantries and not even going to the supermarket. We had people not refilling their prescription drugs."But things have been significantly less dire in Canada, Meyers noted. Even at the lowest ebb in this country, Meyers explained, citing Statistics Canada data, monthly retail sales in Canada never dipped below 0% year-over-year. By comparison, they had dropped almost 6% year-over-year in the worst months of the U.S. recession, near the end of last year.
Prospects for recovery are, similarly, brighter in Canada, Meyers said. One of the reasons for that, he suggested, is that "90% of the trillion-dollar Obama stimulus hasn't even gotten into the economy yet." Meyers praised Canada's federal stimulus packages as "prudent" compared with "your drunken cousins down south."
The timing of the two recessions has also been different. The U.S. officially went into recession at the end of 2007 while Canada did not follow suit for about 10 more months, entering recession in October 2008.
|
|||||||||||||||||||||
|
 |
| DID YOU KNOW…? |
| … that Quebec's share of the Canadian retail home improvement market has grown in recent years from just over one-fifth to one-quarter? Did you know that RONA and Castle have similar market shares in Saskatchewan? All this and much, much more in the HARDLINES Market Share Report, available NOW! (To order, call us at the World Headquarters: 416-489-3396 or click here. -Michael) |
 |
| NEWS IN BRIEF |
|
VANCOUVER — CanWel Building Materials Income had third-quarter sales of $188 million, down from $227 million for the comparable period in 2008. The decrease in revenue was attributed to both an overall decrease in lumber and panel prices year-over-year, as well as the continued downturn in the Canadian economy. Gross margin as a percentage of sales increased, however, to 13.0% or $24.5 million, from 12.6% or $28.6 million a year ago.
MONTREAL — RONA inc. is preparing the launch of its much-awaited new paint and home decoration banner. Called "STUDIO by RONA", it will be unveiled at a location in the Montreal suburb of St-Leonard, one of three such stores that will open Nov. 12. This is the first designated retail format for RONA aside from Botanix, its lawn and garden chain.
LONGUEUIL, Que. — Lively hues will replace neutral colours in home décor in 2010-2011, according to a report from Sico Paints. The trend,
 says the company, is "all about using colour as a mood-lifter in the midst of challenging times." "People have had enough with doom and gloom and are looking for a change, a new beginning," says Stéphanie Pelland, marketing communication manager for the Sico brand and member of the international colour forecaster Colour Marketing Group. Colourful hues such as deep reds and purples, vivid blues and greens, pigment-infused pastels such as baby blues and pinks, and earthy golds and clays will be among the new colours featured in next year's palette.
CHICAGO — True Value Company had revenue of $432.0 million for the quarter ending Oct. 3, a decrease of 12.4% or $61.1 million from $493.1 million for the same period a year ago. The co-op's net margin was also down, by 3.9% to $19.7 million. For the nine-month period, True Value reported revenue of $1.42 billion, a decrease of 7.4% from $1.53 billion for the same period a year ago. The 2009 year-to-date net margin was $58.7 million, up 32.8%. Total debt declined 17.5% by $24.9 million to $117.5 million from a year ago.
ISSAQUAH, Wash. — Costco Wholesale Corporation reported net sales of $5.68 billion for October, an increase of 7% from $5.30 billion in the same four-week period last year. For the first nine weeks of its reporting period ended Nov. 1, the company reported net sales of $12.53 billion, up 5% from the similar period last year. Same-store sales for October were up 5% and up 3% year-to-date.
OSOYOOS, B.C. — Our good friend (and former Outstanding Retailer of the Year) Frances Sologuk of Osoyoos Home Hardware is more than just a retail provider in this scenic, wine-making region of British Columbia's Okanagan Valley. Her in-store cooking classes, which began as a way to demonstrate Home's latest kitchen appliances, have taken on a life of their own, and become part of the destination experience for the region, says a report in the National Post.
ISSAQUAH, Wash. — Following a test in a limited number of stores in New York, Costco has rolled out a program to accept government food stamps. The company intends to make the program available in about 200 of its stores in the U.S. and Puerto Rico by American Thanksgiving pending regulatory approval in each state.
SEATTLE — Nordstrom, the upscale department store chain, has introduced international shopping online. Customers in 30 countries can now browse and buy merchandise from www.nordstrom.com in different currencies and have the products shipped.
|
 |
|
PEOPLE ON THE MOVE |
| At IRLY Distributors, Shannon Cupskey has joined as account manager. She brings with her extensive experience within the industry, most recently as account manager for Ingersoll Rand Security Technologies in the Schlage Lock Residential Sales Division. Cupskey started her career in hardware retail, became a manufacturer's agent, worked with a manufacturer, and then moved into the builder/renovator channel for the last six years. (604-596-2551)Julie Seidel has joined RONA inc. as new director of communications and public affairs. She replaces Eva Boucher-Hartling, who left RONA to join Telefilm Canada. (514-599-5900) |
 |
|
ECONOMIC INDICATORS |
| Real gross domestic product decreased 0.1% in August after being unchanged in July. Oil and gas extraction and, to a lesser extent, manufacturing were the main sources of the decline in August, offset somewhat by gains in retail trade (up 0.3%), the public sector and utilities. |
|
NOTED... |
| Rod Baergen, general merchandise manager, Federated Co-operatives Limited, will speak at a breakfast hosted by the CHHMA, Nov. 23. It will be held at the International Centre in Mississauga, Ont. For more info, visit http://www.chhma.ca. |
 |
|
Hardlines Products |
| Hardlines Quarterly Report Hardlines Retail ReportHardlines Hot Product ShowcaseHardlines TV Free daily news updates |
|
Did you know you can have this newsletter sent to someone else in your office for less than a dollar an issue! |