While the announcement of the pending sale of Lowe’s Canada by its parent, Mooresville, N.C.-based Lowe’s Cos., has the media buzzing, many RONA dealers are welcoming the news of the new ownership.

Lowe’s sale of its Canadian division to Sycamore Partners, a New York investment firm, is expected to formally close early in the new year. The cash price was US$400 million plus an unspecified “performance consideration.”

The Lowe’s business in Canada consists of about 450 stores. Of those, 61 are Lowe’s big boxes, another 31 are RONA big boxes, plus 20 Réno-Dépôt box stores in the province of Quebec, and five contractor yards in British Columbia and Alberta under the Dick’s Lumber banner. About 120 more are corporate RONA building centres.

The remaining 213 are affiliate stores, owned by about 150 dealers. Those stores range from small local hardware stores to some of the largest networks of regional building centres in the country. And the collective retail sales of these RONA independents are huge, estimated at around $2 billion. If they formed a buying organization of their own, their collective volumes would be bigger than many major buying groups.

RONA management is currently meeting with the dealers to outline the opportunities available to them under the new regime. Those opportunities likely include the chance to have RONA dealers take over some Lowe’s stores. The focus in the future will be on the RONA brand: the Lowe’s name in Canada will disappear within a reported two years.

But other factors have the dealers excited, as well. A big one is the fact that RONA will be privately held for the first time since RONA went public in 2002. That means dealers will no longer be concerned about how quarterly results might affect how they get treated. They will also have access to the full range of Lowe’s programs, like VIPpro for contractor customers, and Lowe’s brands including Ego, Craftsman, and Flex.

One of the biggest RONA independent dealers in the country is Fraser Valley Building Supplies (FBVS), with six locations in B.C. FVBS President Ray Cyr said the news was “very positive.”

“It’s an opportunity for us to acquire some corporate stores,” Cyr said. “I believe Sycamore will take a year to evaluate what they’ve got.” Cyr said he liked the idea of Sycamore taking ownership “because they are specialists in the retail arena,” owning Staples and other retail brands. “The supply chain is still under some pressure,” Cyr said. And because of the performance clause in the deal, “Lowe’s have a vested interest to keep that supply chain flowing.”

Another large RONA independent dealer in B.C., Michael Allen, of B.H. Allen Building Centres, with three locations, said that Lowe’s was always going to find it tough slogging when they arrived in this country in 2007. “What they did wrong was they were the last big box in,” Allen said.

Allen told Hardlines that it would have been nice to see the independent dealers offered the opportunity to buy the firm, instead of a secret deal with Sycamore that wasn’t disclosed to the dealers until the public announcement on Nov. 3. “Dealers could have ponied up that $400 million,” Allen said. “I know we ourselves would have put in whatever was needed to have a good position. That was always the negative [under RONA when it went public and later when Lowe’s bought them in 2016]: we didn’t have control of the brand.”

(We’ll have more coverage of how RONA dealers are responding to the new ownership at Lowe’s Canada in this Wednesday’s edition our sister publication, Hardlines Dealer News. It’s a free subscription, so click here now if you’re not signed up for Dealer News!)

BMR CEO sees opportunity with the sale of Lowe’s Canada

Lowe’s decision to sell off its Canadian division will effectively mark the exit of the Lowe’s brand from Canada over the next year to 18 months. And that has other Canadian home improvement retailers watching the deal with interest. That interest lies mainly in the future of the affiliate, or independent, dealers flying the RONA banner.

Chief among these competitors is BMR Group. That company would have the advantage of keeping the dealer business inside Quebec and run by Quebecers. This has been a sensitive point in that province, given the history of the RONA business, which got sold off in 2016 to Lowe’s Cos. of North Carolina.

BMR is watching the deal with interest, but remains cautious about making any big moves of its own, Alexandre Lefebvre, CEO of BMR Group, told Hardlines, “especially as we’re looking at the market ahead with concern.”

However, he notes that his group has had success converting existing RONA dealers looking for an alternative. “We look at the last couple of months and years and we’ve signed independent RONA dealers.” Lefebvre has stated previously that BMR’s expansion over the next couple of years will be focused on adjacent markets in the Maritimes and especially in Ontario.

The future of the Lowe’s Canada wholesale business that supplies those independent stores will depend on Sycamore’s intentions, he admits. “We don’t now what Sycamore is going to do with that business, but we’re ready to pick them up now if dealers feel we’re a better fit for them. With our family approach to our membership, we think some of them would be interested—and we’re definitely interested in signing them.”

Would BMR be prepared to take over Lowe’s Canada’s wholesale supply business as well? “It’s too early to say if BMR would have interested in acquiring the RONA business,” Lefebvre admits. But regardless of the future of the economy, he says his company can continue to have a strong appeal for RONA dealers. “This is an opportunity for BMR—100 percent.”

Contractor events are back—but labour shortages make them harder to attend

Dealers say that the main obstacle to restarting pro-oriented events isn’t pandemic trepidation, but time and people. Dave Roode of HubCraft TIMBER MART in Truro, N.S., says that busy contractors often can’t spare the time away from the jobsite. And the industry’s labour shortage isn’t helping matters, either.

“We don’t have enough staff” to spare to organize pro events, says Brent Perry (shown here at left), president of Alf Curtis Home Improvements, whose three locations are headquartered in Peterborough, Ont. Perry said he was challenged to find enough people when business was booming early in the summer.

Charlie Hotham, a Sexton dealer in Windsor, Ont., agrees that organizing events is tougher when you’re shorthanded. “Right now, I’m looking for a counterperson. During the pandemic, I was behind the counter almost every day, and my son, who’s usually in the field, was making deliveries. It took us months to find quality people who wanted to be drivers, warehousemen.”

Alf Curtis is reaching out to pro customers in new ways, namely through its e-commerce website, which went live in March, and an app that Perry hopes to roll out this fall. Perry sees his company’s sales growth coming primarily from e-commerce.

And if dealers have learned anything from the past few years, it’s that staying in contact with pros doesn’t begin and end with splashy events; it’s the little, day-to-day details that count just as much. For example, Alf Curtis’s delivery trucks arrive at jobsites with coolers of water and Gatorade to quench workers’ thirst.

(This piece is excerpted from an in-depth article that appears in the latest issue of our sister publication, Hardlines Home Improvement Quarterly. HHIQ is a print magazine that goes out to 11,000 dealers and managers across the country. Click here to learn more and subscribe! HHIQ is mailed free to dealers and managers!)

Billing itself as the largest hardware trade show in the world, the International Hardware Fair in Cologne, Germany, normally occurs every two years. But with interruptions caused by Covid, Eisenwarenmesse–as the show is known in German—returned in late September after a four-year hiatus. The published attendance was some 25,000 visitors, hailing from 125 countries.

Those attendees included around 1,400 exhibitors from 50 countries, who took advantage of the opportunity to present their products and innovations to the entire hardware globe once again. The spectrum of products presented ranged from tools and accessories to building and DIY supplies, as well as fasteners, fixings, and fittings.

And while the show was successful in terms of both exhibitors and delegates, it still had to confront the challenges of ongoing travel restrictions in Asia (from where many of the exhibitors hail), the acute energy and raw materials crisis, and the war in Ukraine. As a result, those attendance numbers, as impressive as they might be by North American standards, still fell short of the show’s heyday, when it could attract up to 50,000 people worldwide.

“Of course, after the coronavirus pandemic, it’s great for the industry to get together again at Eisenwarenmesse – International Hardware Fair,” said Ferdinand Munk, owner and Managing Director of Munk Group. However, he was still satisfied. “The number of contacts may not be as high as it used to be yet, but the quality is exceptional because the visitors are enthusiastic about returning to Cologne to maintain their business relationships in person.”

The next Eisenwarenmesse – International Hardware Fair in Cologne will be held March 3 to 6, 2024.

Doug Anderson, CEO of Peavey Industries, has been recognized as a winner of the 2022 EY Entrepreneur of the Year awards in the Prairies region. This annual award aims to recognize businesses that are leading in the areas of economic vitality and confronting challenges to improve the world.

Diana Windsor has been appointed senior vice president, sales for Blanco North America. She will lead all strategic and operative market activities for the company in Canada and the U.S. Windsor has more than 13 years of sales and management experience in the plumbing industry. Prior to joining Blanco, she was at Waterworks and held multiple senior roles at Watts Water Technologies and at Kohler

Chris West has been named president and CEO of Mega Group, the co-op buying group based in Saskatoon. While he was most recently at Lowe’s Canada in the role of SVP merchandising, his background includes roles at a number of European retail chains, plus stints at Walmart Canada and Canadian Tire.

DID YOU KNOW...?

Canadian Tire Corp. reported Q3 net income of $184.9 million, down from $243.7 million a year earlier. Revenues rose to $4.23 billion from $3.91 billion in the comparable period last year. Comp sales at Canadian Tire Retail were up 0.7 percent, driven by growth in automotive and seasonal and gardening categories.

A move to unionize a Home Depot store in Philadelphia has been voted down. Workers voted 165 to 51 against organizing a union at the store. Some of the concerns were over wages, staffing, and training. The U.S. National Labor Relations Board (NLRB) filed an unfair labour practices charge against Home Depot last month. The retailer was charged with engaging in unlawful surveillance and interrogating workers at the Philadelphia store. Home Depot has about 500,000 employees in North America, including about 32,500 in Canada.

IKEA Canada plans to expand its small-store format with a new location in Scarborough, Ont. It’s set to open at the Scarborough Town Centre in the summer of 2023, serving residents in the east end of Toronto. It will be the company’s second small-format store in Canada, at nearly 81,000 square feet in size. The expansion comes as IKEA Canada reveals that national store visits have increased by 123 percent to 26 million, while IKEA Canada sales increased 1.3 percent to $2.6 billion in the fiscal year ending Aug. 31.

SUPPLIER NEWS

Taiga Building Products reported sales for the third quarter ended Sept. 30 of $533.1 million, up 10 percent from $484.6 million in the same period last year. The increase was largely due to higher selling prices for commodity products. Net earnings for the quarter increased to $18.6 million from a loss of $5.2 million, due mainly to higher gross margin. Sales for the nine-month year to date were $1,791.9 million, dipping from $1,807.2 million over the same period last year. Year-to-date net earnings were $78.9 million, compared to $82.4 million.

The Western Retail Lumber Association is gearing up for its 2023 WRLA Building & Hardware Showcase, being held Jan. 19 20, 2023, in Winnipeg. Dealers who register for the show before November 15 can save 15 percent on their ticket. After the early bird ends, individual passes are available for $49 each. Dealers can save money and skip the in-person registration line at the show by signing up today. Want to exhibit? Click here!

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Finance minister and Deputy Prime Minister Chrystia Freeland visited Rockwool’s Milton, Ont., manufacturing plant last week along with local MP Adam van Koeverden. There they learned about how Rockwool turns molten rock into building insulation. The tour comes on the heels of the Ministry of Finance Fall Economic Statement, which includes a Multigenerational Home Renovation Tax Credit to facilitate in-home suites for the elderly and vulnerable.

Resolute Forest Products Inc. had net income of $87 million for the quarter ended September 30, up from $80 million in the same period in 2021. Sales were $974 million in the quarter, an increase of $157 million. Excluding special items, the company reported net income of $85 million, up from $67 million in the third quarter of 2021.

ECONOMIC INDICATORS

The total value of building permits in Canada fell 17.5% in September to $10.2 billion, the largest monthly decline on record. This was the first time all survey components posted monthly decreases since September 2019. Residential intentions were down 15.6 percent to $7.0 billion, while the non-residential sector plummeted by 21.5 percent to $3.2 billion. (StatCan)

NOTED

IKEA Canada customers made over 189 million online visits between September 2021 and August 2022. During that time, 1.77 million orders were delivered, while 776,510 click-and-collect orders were processed.

OVERHEARD...

Becoming a leader is synonymous with becoming yourself. It is precisely that simple. And it is also that difficult.” —One of the opening quotes of the presentation by 2022 Hardlines Conference speaker Zaida Fazlic, VP people, culture and change at Taiga Forest Products. Fazlic was citing Warren Bennes, a scholar who pioneered the field of leadership studies.