BOUCHERVILLE, Que. — Lowe’s Canada made the news last week with its announcement that it will shutter 34 stores across the country.

Most of the closings will be effective January 31, 2020, with some, including three in Nova Scotia, to take place mid-February. The move follows what the company called in a release “a detailed strategic review of its operations to improve performance and better position itself for the future.” The closings include Lowe’s and RONA stores across the country, plus a Reno-Depot in Trois- Rivières, Que.

Lowe’s Canada will also undertake a process to simplify multiple store banners, “to drive efficiency and reduce operational complexity.” However, it insists that it will continue to support its core banners. “We are taking decisive action to build a healthy business which will provide us with the flexibility to reinvest in our future growth. This includes having a clear strategy for our banners, built on the strength of our Lowe’s, RONA and Reno-Depot brands,” said Tony Cioffi, interim president of Lowe’s Canada.

He added that the strategy will include supporting the affiliated dealers.

Further changes will continue at the Boucherville head office, as well. These include reorganizing the retailer’s support structure by reducing the corporate workforce across the country. It will also include rationalizing product assortments with the possibility of inventory liquidation, as well as accelerated depreciation and amortization and severance as the staff is reduced.

“We’re also reorganizing our corporate support structure across Canada to more efficiently serve our stores and we plan to migrate Canada to the U.S. IT platform to eliminate efficiencies and unnecessary technology duplication,” said Ellison on a call to analysts following the release of the third-quarter results.

Lowe’s third-quarter results, released at the same time as the announcement of the Canadian store closings, included $53 million of non-cash pre-tax charges resulting from the company initiating a strategic review of its Canadian operations during that quarter. As a result of the continued Canadian restructuring, Lowe’s expects to incur additional pre-tax operating costs and charges of $175 million to $225 million in the fourth quarter.

(Click here to see a full list of the Lowe’s Canada stores that will be closed.)

KING CITY, Ont. ― At the 24th annual Hardlines Conference, held earlier this month in King City, Ont., speakers addressed topics ranging from social media marketing to employee retention and brand differentiation. With the theme, “It’s all about the experience”, the two-day event explored ways that retailers can maximize their offerings and expertise, both in-store and online.

Tanbir Grover, eCommerce and omnichannel VP at Lowe’s Canada, talked about making bricks-and-mortar retail spaces and online sales work in tandem. “The online channel represents an opportunity to be successful beyond your four walls,” he said. “For all of us who are battling Amazon, the biggest advantage we have is our physical space.

Joe Franquinha shared the experience of Crest Hardware in Brooklyn, N.Y., which his father Manny founded in 1962. He commented that friendly staff are not enough if they don’t know their merchandise. “Beyond making sure your staff are attentive and friendly, ensuring sales associates have the product knowledge is the other piece of the puzzle,” he said.

Fred Pennell of Princess Auto spoke passionately about the importance of removing barriers to customer satisfaction. He took aim at the “asterisk” in a flyer or coupon that adds extra stipulations and needless friction to the shopping experience, as is often the case when it comes to discounts and return policies. At Princess Auto, Pennell said, employees aren’t hamstrung by policies that restrict them from meeting customers’ needs: “They can make a decision on the floor.”

The strategy is necessary, he says, to ensure both customer loyalty and staff morale. Transparency, too, is key to the culture at Princess Auto. “We share everything,” Pennell told the delegates. “Everyone in the company knows the sales numbers. We bring out our vendors and tell them. We don’t hold that back.” The result, he added, is a turnover rate half the Canadian retail average.

The conference ended on a high note with a presentation by John Hartmann, president and CEO of True Value Company. Under Hartmann, the U.S. retailer recently overhauled its ownership structure from a pure co-op to a hybrid wholesaler model which dropped the membership requirement. The question in the minds of dealers, said Hartmann, was, “Why can’t I have access to my equity in the company?” Previously, he explained, those assets were “trapped until an individual chose to leave the organization.”

True Value therefore “opened up a new chapter in the history of the company,” Hartmann said, by releasing equity to dealers. “We believed that a good portion of that money would be reinvested in the local business and it has been great to see just that.”

The Hardlines Conference offered two days of learning and networking, with insights and examples of a well-curated retail experience. This year’s event drew more than 150 people from across Canada and beyond.

MOORESVILLE, N.C. — Lowe’s Cos. has reported sales for the third quarter of $17.4 billion and a consolidated comparable sales increase of 2.2%. Comp sales for the U.S. home improvement business increased 3%. Net earnings reached $1 billion, up from $629 million in the third quarter of 2018. The period included non-cash pre-tax charges of $53 million related to the performance of the Canadian business, whose stores experienced negative comps.

Despite concerns about Lowe’s Canada (see our top story—your ever-helpful Editor), the parent company turned in strong results, driven by stronger markets south of the border. Earnings reached $1.41 per share, up 35.6% from the same period last year. (Hardlines estimates that the Canadian business from all its stores here represents about 9% of Lowe’s total sales.)

Lowe’s also reaffirmed its support of the business in Canada. “We are committed to the Canadian market and are taking decisive action to improve the performance and profitability of our Canadian operations,” said Marvin Ellison, president and CEO of Lowe’s Cos.

Lowe’s upped its forecast for fiscal 2019, with expected earnings in the range of $5.63 to $5.70 per share, up from $5.45 to $5.65 per share. It still expects comparable sales growth of around 3%.

BURLINGTON, Ont. — IKEA Canada has developed a new city centre market approach in Toronto as it seeks to become more accessible to customers in urban areas.

“We continue to see positive growth in the Canadian market, all while innovating and developing our business for the future,” said Michael Ward, CEO and chief sustainability officer for IKEA Canada. “We want IKEA to be there for our customers, whenever and however they choose to meet us.”

Over the past year, IKEA has opened city centre locations in major cities, including New York, Paris, Moscow and London. Toronto is the first market in Canada to see this new city centre approach.

The city centre model involves becoming more accessible through new locations in the urban core and enhancing IKEA’s digital presence. The final details and locations around Toronto are still to be determined.  

The city centre concept is aimed at a growing demand for convenience and will complement existing stores in the market. “As one of the fastest growing and most diverse cities in North America, Toronto is a natural first choice for us to target growth in the city,” said Ward.

Over the past year, IKEA Canada has added to its fulfilment network with new customer distribution centres in Richmond, B.C., and Kleinburg, Ont.

DID YOU KNOW...

... that the 2019-2020 Hardlines Market Share Report breaks out the sales and store counts of every key home improvement banner by province? This invaluable marketing tool will help you identify sales and market opportunities and align your own forecasts with regional market breakouts. Now available in a special package with our Hardlines Retail Report, which provides valuable forecasts for the industry for 2019 and 2020, including analysis of the top players. (For more info, click here!)

VAUGHAN, Ont. ― TIMBER MART has announced that Cornerstone Building Supplies of Kingston, Ont., is the newest independent retailer to join the buying group. Cornerstone Building Supplies opened in September of last year. It has 7,500 square feet of retail space on top of a warehouse and yard and serves a clientele that ranges from contractors and DIYers to architects and interior designers.

MOOSONEE, Ont. — The Mushkegowuk Development Corporation (MDC) in Moose Factory, Ont., owned by First Nations members of the Mushkegowuk Council, has purchased MDC Supply GP, which operates as Great North Builders. Great North primarily served the First Nations of the James Bay area for 40 years, until founder Jack Hood retired and closed the business at the end of 2018. MDC will manage the store, which is in Moosonee, Ont., and is a member of Castle. It’s expected to reopen in early 2020.

ATLANTA — The Home Depot reported third-quarter sales of $27.2 billion, an increase of 3.5%, over 2018. Comparable sales were positive 3.6%, with comp sales in the U.S. positive 3.8%. That includes positive comps being reported from Home Depot Canada. Net earnings for the third quarter dipped to $2.8 billion from $2.9 billion. Craig Menear, chairman, CEO and president of Home Depot, admitted that “sales were below our expectations.” The company has downgraded its 2019 forecasts, with sales expected to grow by about 1.8% and comp sales to increase roughly 3.5%.

SYDNEY, N.S. — Santa Claus is coming, by helicopter no less, to Cape Breton Island. He and his elf were to have landed at the local Royal Canadian Legion branch, courtesy of a local TIMBER MART dealer. According to Saltwire.com, Art Mullins of Woodland Timber Mart in Glace Bay is paying for the helicopter.

BOUCHERVILLE, Que. —The RONA Viger-Leblanc store in Laval, Que., has been renovated and reopened. The store, owned by Serge Viger and Manon Leblanc, has been affiliated with the RONA banner for 45 years. It underwent a complete transformation, with an investment of nearly $400,000, that included renovating the sales floor to add 3,000 products and completely redesigning the store’s racking.

SUPPLIER NEWS

PARIS ― Saint-Gobain has reached a $1.4 billion agreement to purchase U.S.-based drywall maker Continental Building Products Inc. The deal will see Saint-Gobain pay $37 per share in cash. Continental’s gypsum wallboard production will be folded into a Saint-Gobain unit to be newly created. Saint-Gobain aims to streamline some $50 million in costs through the transaction.

IRVINE, Calif. ― Budget Blinds franchisees throughout Canada will sell the Hunter Douglas line of window coverings under the terms of a deal between the two firms. Beginning earlier this month, Budget Blinds’ 74 franchisees in Canada became eligible to join the Hunter Douglas Aligned Dealer Program and add the brand to their consultation and installation service.

MIDDLETON, Wis. ― Spectrum Brands Holdings reported that its Q4 sales rose 1.9% to $993 million, from $974.4 million for the comparable quarter in 2018. However, the company’s net loss was $122.6 million, or $2.51 per diluted share, compared with a net loss of $116.2 million ($2.51) a year ago. In the hardware and home improvement segment, sales edged up 1.1% to $364.9 million, with gains in residential security partially offset by decreases in builders’ hardware and plumbing sales.

ECONOMIC CONDITIONS

Sales of existing Canadian homes were unchanged in October. Activity is now almost 20% above the six-year low reached in February 2019 but remains 7% below heights reached in 2016 and 2017. Higher sales in Greater Vancouver and the Fraser Valley, as well as Ottawa, offset a decline in activity in the Greater Toronto Area and Hamilton-Burlington. Actual (not seasonally adjusted) activity rose 12.9% year-over-year. (Canadian Real Estate Association)

U.S. homebuilding was on the rebound in October, with housing starts on the rise and permits hitting a 12-year high. Housing starts rose 3.8% to a seasonally adjusted annual rate of 1.314 million units as single-family construction increased for the fifth consecutive month. The value of building permits rose by 3.2% to its highest level since August 2007, largely on the strength of the single-family segment. (U.S. Commerce Department)

U.S. retail sales recovered by more than expected in October. After declining by 0.3% in September, the value of sales rose by the same percentage in October. Excluding the automotive and petroleum categories, retail sales edged up by 0.1%. (U.S. Commerce Department)

NOTED

Online seller Alibaba says its Singles Day event generated some $13 billion in sales within its first hour alone—nearly double the estimated haul of Amazon’s Prime Day in July. The first-hour sales represent a 32% increase from last year’s Singles Day, an annual event aimed at single young people.