November 12, 2012, Volume xviii, #43
“Let us run with perseverance the race that is set before us.”
— Hebrews, 12:1b (New Revised Standard Bible)
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Dutton gone as head of RONA
BOUCHERVILLE, QC — He had a vision, but it wasn’t everyone’s vision. And now, Robert Dutton, CEO of RONA since 1992, is gone.
The news of his departure comes just a day after RONA turned in weak third-quarter results (see story below), and follows a harrowing battle to ward off a “friendly” takeover by Lowe's Cos. But it also comes after 20 years of heading up a company in active growth mode. Now, that company has entered an era of reinvention. Perhaps both Dutton and the RONA board recognized the need for a new kind of leader.
Dominique Boies, executive vice president and CFO, has stepped in as acting CEO. The board has hired the firm Korn/Ferry International to find a successor to Dutton.
Dutton joined RONA in 1977. Under the mentorship of then-chairman Henri Drouin, the young Dutton could not speak a word of English when he became CEO in 1992. But that was just one of the obstacles he overcame as he pushed his dream to build Canada's largest home improvement retailer, one that, in his own words, would provide Canadians with jobs, and one that would become a role model for corporate sustainability.
Under his direction, RONA expanded beyond its original Quebec market, and became largest home improvement retailer in the country, with combined sales from all points of sale exceeding $6 billion. RONA’s consolidated sales during that time increased from $450 million to more than $4.8 billion and the RONA chain grew from fewer than 500 affiliated stores to more than 900 outlets that range from corporately owned and franchised to affiliated independents.
(Click here to view our interview with Robert from last fall. —Michael)
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RONA’s third-quarter reflects tough conditions
BOUCHERVILLE, QC ― RONA’s latest results reflect the company’s efforts to reinvent itself in a marketplace that has been inconsistent, at best. The giant wholesaler and retailer recorded net income of $33.1 million before unusual and non-recurring items, down from $47.8 million a year earlier. The $14.7 million drop was attributed to lower margins on building materials, “and to the deterioration in the renovation and construction market across the country.”
But profit after unusual items dwindled to $5.1 million. Those items included the cost of closing or converting some big boxes and the price tag for sponsoring the Olympics.
Consolidated revenues for the third quarter were $1.34 billion, down 0.8%. The decrease stems from the 1.0% decrease in same-store sales, partially offset by the opening of new stores and dealer recruitment. Same-store sales for RONA’s retail and commercial segment were down 1.8%.
For the nine-month year-to-date, consolidated revenues rose to $3.69 million, up 1.5% over 2011. The increase was due to an 8.4% increase in sales in the Commercial and Professional Market Division, new store openings, the recruitment of new dealer-owners, and higher same-store sales in the RONA network, particularly in distribution sales to affiliate dealers.
Same-store sales for the RONA network as a whole (retail, commercial and distribution) remained flat. This performance stems from a 6.2% increase in same-store distribution sales to affiliate dealer-owners. Same-store sales in the retail and commercial segment were, however, down 1.2%.
Gross profit year-to-date was 1.006 billion, down 2.0% from 1.025 billion a year earlier.
RONA continues to rely on its 2012-2014 business plan, “New Realities, New Solutions,” reflected in the company’s move away from big boxes to its smaller “proximity” stores, with their focus on accessibility and customer service to appeal to a new, younger customer demographic.
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Appointment marks new direction for TORBSA
BOLTON, ON ― TORBSA Limited has hired Ken Pompey as business development manager. The move marks an important evolution of the building materials buying group, which has historically been content to keep a low profile ― and a limited membership. (The group’s 2011 dealer sales totalled $396 million from 48 dealer locations, according to the Hardlines Who’s Who Directory .)
With Pompey on board, the group joins the ranks of many other groups and banners in Canada that see active dealer recruitment as vital to long-term growth.
“We’ve looked at opportunities in the last little while and we think we have something different to offer,” says Bob Holmes, general manager of TORBSA. “We’re shareholder owned and transparent ― and we have no frills.” He adds that his dealers are diverse, specializing in everything from drywall to roofing to block and cement. “And they’re all treated the same in the group.”
The adoption of a dealer development person takes the boutique group beyond being a regional entity to one that is willing to look farther afield — and even, eventually, nationally, says Holmes. “We’ve got the ability to provide service and support across a broad scope of the market,” says Holmes.
“We’ve been passive in the past and now we want to put our best foot forward.”
TORBSA has always been open to growth, but, he notes, “It’s a tough market out there and margins are under pressure. Everybody is waiting for the next order and everybody has to pick their niche.”
He sees the addition of Pompey as the logical next step. Formerly part of the The Signature Group (TSG), Pompey later moved to TIM-BR MARTS Ltd. when that organization took over TSG. There, he worked on their “non-core” services, namely anything that could be bought as a group that is not for resale — from trucks to uniforms to insurance.
At TORBSA, Pompey will be back to focusing on the group’s core strengths. “He’s going to bring value to the group,” Holmes says.
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Canadian Tire stores up slightly in third quarter
TORONTO — The acquisition last year of Forzani Group has been good to Canadian Tire. Consolidated sales for giant retailer in its third quarter were up 8.0% and consolidated revenue increased 4.6% to $2.8 billion in the quarter as a result of the inclusion of revenue from FGL Sports, while Marks, financial services, and petroleum all helped the numbers, as well.
However, the cost of the Forzani acquisition had an impact on Canadian Tire’s consolidated net income, which fell 3.7%.
Sales at Canadian Tire Retail increased 0.3% while same-store sales declined by 0.2% in the quarter. The company cited strong growth in backyard living, outdoor recreation, and kitchen, thanks to increased marketing and new assortments. Categories that fared less well included electronics, home décor, and household cleaning. Year to date, sales are up 1.4% and same-store sales increased by 0.8%.
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Retailers help each other, homeowners after Hurricane Sandy
SPECIAL REPORT ― Retailers along the East Coast are still dealing with the aftermath of Hurricane Sandy, both at home and in their stores. Keeping their shelves stocked for customers was a challenge made just a little easier by other dealers stepping in to help.
Jon Phillips, owner of Phillips Hardware in Albany, NY, is just one retailer who reached out to help others. Because the storm hadn’t done much damage in the Albany area, Phillips had 28 extra generators and, knowing they were needed in areas more heavily affected by the storm, began calling different stores to see who could use them.
“We’d gotten lots of business with the hype about the storm coming, but we were fortunate that nothing happened,” Phillips says. “We had generators and flashlights that we knew we wouldn’t be selling the next day or two.”
Eventually, he spoke with Howie Levine, who owns Denville Do it Best Hardware in Denville, NJ. The two had met years ago at a Do it Best market. Phillips agreed to bring the generators to Levine at his store.
Phillips and his father, Abbott, loaded the generators and other emergency supplies into their truck and made the drive, arriving in a dark town without electricity but with plenty of customers eager to get a generator. The generators were sold on a first-come, first-serve basis and sold out quickly.
On his way to Denville, Phillips even dropped off a few more at a school in New York that didn’t have electricity.
Phillips says he was glad to be able to help those affected by the storm, and especially to be able to help someone he knew. “It was bizarre,” he says. “I looked at the list of stores and happened to see Denville Do It Best. I’ve known Howie for 20 years. It’s great to be able to help other members you have longstanding connections with.”
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Classifieds
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Commodity Lumber & Panel Buyer
CASTLE BUILDING CENTERS GROUP LTD. is the premier, independently owned buying group of lumber and building materials in Canada. Located in Mississauga, Ontario, Castle has an immediate opening for a Commodity Lumber & Panel Buyer.
Job Duties/Responsibilities:
- Execute, prepare, and organize all information flow between the Members, Vendor Partners with respect to Commodity Lumber & Panel programs and products.
- Liaise with members, and vendors in various programs in real time and in “Cloud” distribution and flow of Products.
- Develop and implement the Castle/CBS electronic vendor powered virtual trading board to execute purchases and trades in real time.
- Responsibility to include all Provinces and Territories for Castle/CBS in Canada
Qualifications:
- Minimum 5 years in Commodity Lumber Trading & Buying.
- Ability to travel to all Canadian and U.S.A Mill Sawmill Operations.
- Advanced Microsoft Office skills, excellent communication skills and strong organizational skill are a must.
- Ability to think outside the box.
- Bilingual, English & French both written and spoken would be an asset.
Qualified applicants are invited to submit their resumes and salary expectations in Microsoft Word or PDF format to ypatton@castle.ca . We thank you for your interest in this position however, only the most qualified applicants will receive responses.
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Hardlines Specialist Representative
ALBERTA
Castle Building Centres Group is an industry leader among Buying Groups in the Lumber and Building Materials segment in Canada. Due to the rapid growth of our hardlines solution, we are seeking a candidate in the Province of Alberta.
You are a highly motivated individual with strong relationship and communication skills that can manage and develop our future hardlines growth. This position requires an individual who is knowledgeable of standard concepts, practices and procedures within the hardlines industry, willing to travel extensively and accustomed to working remote from head office. Qualifications include a minimum two years experience in the wholesale or retail hardware / lumber and building materials industry.
Reporting to the Regional Business Development Manager, you welcome the opportunity to work with a dynamic group of independent LBM dealers while planning and executing our hardlines solution. Providing continual and proactive communication to our members while understanding their needs is fundamental to your success. Sound computer and presentation skills; combined with good administrative qualities are imperative.
Castle Building Centres Group offers a comprehensive compensation package including full benefits.
All submissions will be treated with complete confidentiality. Please forward your resume in confidence to:
Yvonne Patton
Castle Building Centres Group Ltd.
100 Milverton Drive, Suite 400
Mississauga, Ontario
L5R 4H1
E-mail: ypatton@castle.ca
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Hardlines Specialist Representative
BRITISH COLUMBIA
Castle Building Centres Group is an industry leader among Buying Groups in the Lumber and Building Materials segment in Canada. Due to the rapid growth of our hardlines solution, we are seeking a candidate in the Province of British Columbia.
You are a highly motivated individual with strong relationship and communication skills that can manage and develop our future hardlines growth. This position requires an individual who is knowledgeable of standard concepts, practices and procedures within the hardlines industry, willing to travel extensively and accustomed to working remote from head office. Qualifications include a minimum two years experience in the wholesale or retail hardware / lumber and building materials industry.
Reporting to the Regional Business Development Manager, you welcome the opportunity to work with a dynamic group of independent LBM dealers while planning and executing our hardlines solution. Providing continual and proactive communication to our members while understanding their needs is fundamental to your success. Sound computer and presentation skills; combined with good administrative qualities are imperative.
Castle Building Centres Group offers a comprehensive compensation package including full benefits.
All submissions will be treated with complete confidentiality. Please forward your resume in confidence to:
Yvonne Patton
Castle Building Centres Group Ltd.
100 Milverton Drive, Suite 400
Mississauga, Ontario
L5R 4H1
E-mail: ypatton@castle.ca
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Resumés
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