John Caulfield, Contributing Editor
 vol. ix, #39 October 14, 2003

* Home Hardware prepares to wind up Markham operations * Pro Group anticipates keeping Sodisco-Howden in the fold * Home Depot will open sixth Hawaiian store * Builders FirstSource buys Mid-Western dealer * Industry needs to be more data savvy

We're starting to get a lot of inquiries here at the World Headquarters about the shows next year. Undoubtedly, Practical World, the Cologne International Hardware Fair/DIY'TEC, is a must-attend for North American vendors who want to find new product and packaging ideas – and, of course – new customers. Buyers go in droves to find new sources of supply and new strategic alliances. For more information, contact Barbara Hills, b.hills@koelnmessenafta.com , 416.598.3343 or Beverly Allen here at Hardlines, bev@hardlines.ca.
"Don't try to die rich but to live rich." — Thomas Bird Mosher (American publisher, 1852-1923
PRO GROUP KEEPS ITS EYE ON SODISCO-HOWDEN
CENTENNIAL, CO — Pro Group, the wholesaler marketing organization based here, expects to keep Sodisco-Howden, its only distributor-member in Canada, in its fold even if Sodisco is acquired. Steve Synnott, Pro's newly appointed president, calls Sodisco-Howden "a good partner," and lauds Jos Wintermans, Sodisco-Howden's CEO, for "positioning that company for profitability." Synnott concedes, however, that Sodisco's hiring of investment banker NM Rothchild & Sons to review its business alternatives gave all indications that the wholesaler was being shopped around to potential buyers. Synnott says there is "zero possibility" that Pro, with 51 members that generate US$3.4 billion in annual revenue, would bid for Sodisco-Howden to maintain its market position in Canada. However, he feels confident that his organization can negotiate a membership agreement with any buyer, even Rona Inc., whose name regularly crops up during any speculation about Sodisco-Howden's future. About 700 dealers in Canada fly the Pro banner. Pro Group has expressed concern with Sodisco-Howden's program to allow some of its dealers to use the Ace Hardware name on their storefronts and in their advertising. (Earlier this year, Sodisco-Howden acquired Ace Canada's inventory and receivables for about $15 million.) "We're not big fans of dual identity," says Synnott.
HOME HARDWARE PREPARES TO WIND UP MARKHAM OFFICE
ST. JACOBS, ON — Four years after the purchase of Beaver Lumber by Home Hardware Stores, the last vestiges of the Beaver entity are about to disappear. According to Eric Konecsni, Home's vice-president operations, Beaver's original Markham, On offices, which have been wound down since moving most of Beaver's people and operations to Home's headquarters here in St. Jacobs, ON, still have three people working there, administrating the remaining former Beaver dealers who still operate with Beaver's proprietary computer system, BLISS. The last holdouts have a deadline of spring 2004 to make the switch to Home Hardware's own Prism system, after which Home's presence in Markham will be finished. Right now, says Konecsni, there are about 17 dealers who have yet to switch over, but, he notes, "The bulk have already moved. The final conversion will be over by April."
RETAILERS NEED TO GET MORE DATA SAVVY
MISSISSAUGA, ON — "Canadian retailers are great at spotting trends," says Randy Harris, "but they're slow to move." Harris, president of Trendex, spoke recently at the Hardlines Marketing Conference. One area retailers have been slow to move on is data collection and management. He pointed out that in the '90s there was a lot of money spent on POS equipment that would give real-time indications of sales. "But so far, very few retailers are using data to better manage their business." Using data which defined hardlines as power tools, lawn and garden items and homecare/comfort products, Harris says Sears is currently the largest retailer in Canada, followed by Canadian Tire and Home Depot. He adds, however, that no one retailer maintains consistent share across all markets. Harris also predicts the death of at least two buying groups and the emergence of "lifestyle centres" in Canada. Harris says the middle market is shrinking, while pointing out the emergence of new categories of luxury items, the effect of globalization on price and quality, and increasing wealth, especially in older households. He urges retailers to make sure product lines reflect changing population patterns. The 45-59 age range will grow 24.7% between now and 2011, and the number of Canadians between the ages of 60 and 74 will rise by 34.3%. During the same period, however, population growth of the 30-44 age range will drop by 8%.
HOME DEPOT TO OPEN SIXTH HAWAIIAN STORE
LIHU'E, HAWAII — Home Depot is scheduled to open a 125,000-sq.ft. warehouse store on the Hawaiian island of Kauai, on October 23. The retailer, which first invaded Hawaii in 1993 when it opened a store in Honolulu, will employ 140 associates at the newest location, its sixth store in the state. The Kauai Beach Press reported on its web site that the company paid nearly US$8 million for this project. The newspaper also reported that a number of local competitors have made some changes in their operations to differentiate themselves. The three-unit Hale Kauai, for example, introduced "The Contractors' Store" that will allow its pro customers – who account for around 80% of its sales – access to its building materials section, home-planning department and a kitchen-cabinet showroom through the entrance of its lumberyard here. The impact that Home Depot can make on any market, when it opens a new store, is evinced by the fact that it interviewed more than 500 people to fill the job slots in its new store.
INDUSTRY STOCK WATCH
COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 38.10 27.45 36.95
Canfor 10.95 6.83 9.34
Costco 39.02 27.00 32.87
Goodfellow 12.24 9.75 11.50
Home Depot 35.49 20.10 34.92
Hudson's Bay 10.50 5.87 9.97
Lowe's Cos. 58.51 33.37 56.94
Rona Inc. 22.25 11.75 21.81
Sears Canada 20.00 13.60 18.37
Sodisco-Howden 3.35 1.15 3.10
Taiga Forest 8.10 6.00 7.35
Wal-Mart 60.20 46.25 58.42
West Fraser 39.05 26.27 34.00
 
MARKET INDICATORS
Housing starts fell to 234,600 units seasonally adjusted in September, from 237,200 in August, reports CMHC. However, year-to-date starts are up 6.7% over the same period in 2002, supported by low mortgage rates, which helped offset the impact of rising house prices. Nationally, urban single starts were 100,500 units at seasonally adjusted annual rates in September, unchanged from the previous month. Multiple starts fell 2.4% seasonally adjusted to 104,500 units in September, from 107,100 units in August. Nationally, year-to-date actual urban multiple starts are up 20.7%. Sales of existing homes fell 9.1% in August, following a record-breaking level in July, says the Canadian Real Estate Association. However, the average price of a home rose to a record $208,525 from $207,619 set in July, up 12.8. Sales for the first eight months of the year were up by 1.7%. The value of construction intentions dropped in August as municipalities issued $4.1 billion worth of building permits. That's down 13.4% from July. However, July's level of $4.7 billion was a record high, and August's seasonally adjusted level was still up 3.8% over the same month a year earlier. Permits for housing declined 8.3% to $2.6 billion, halting three straight monthly gains.
COMPANIES IN THE NEWS
LONDON, UK — Lowe's execs were touring Europe last week, and their visit to the offices of Kingfisher plc raised a lot of eyebrows. Kingfisher owns the retail chain B&Q, considered a possible takeover target by Home Depot, but Lowe's says it's merely "spreading the Lowe's message" (um, whatever —Editor). VERNON HILLS, IL — Wickes, the U.S. building supply chain that was delisted from the NYSE last week, is getting a leg up from its major shareholder, Imagine Investments, which will provide up to US$10.5 million of financing. With its affiliate partners, Imagine owns approximately 51.7% of Wickes' common stock and the cash infusion will enable Wickes to meet debt obligations that come due December 15, 2003. DALLAS, TX — Only days after announcing it would pull up stakes in the Denver market, Builders FirstSource has jump-started its growth machine again by acquiring Davidson Lumber and Space Concepts, two businesses operated by Davidson Industries in Indianapolis. Builders FirstSource operates 58 yards and 82 manufacturing plants in 70 cities in 11 states. The addition of Davidson's operations, which include truss and wall panel manufacturing, will add US$60 million to BFS's revenue. BENTONVILLE, AK — Wal-Mart had sales for September of US$23.39 billion, an increase of 13.0% from the same month a year earlier. Sales year-to-date were US$163.51 billion, up 11.2% from the first eight months of 2002. The Wal-Mart division's sales for the five-week period were US$15.85 billion, up 12.7%, while year-to-date sales reached US$111.122 billion, up 10.6%. Sam's Club sales for September were US$3.21 billion, a gain of 11.8%, and year-to-date sales were US$22.343 billion, up 8.6%. Sales by the international division were US$4.330 billion, up 14.9%; year to date they were up 15.8%. FEDERAL WAY, WA — Weyerhaeuser Co. has agreed to the sale of approximately 168,000 acres of timberlands in west-central Tennessee to Fountain Investments Inc. Weyerhaeuser will use the after-tax proceeds, totaling about US$65 million, to pay down debt. The deal is expected to close in the fourth quarter of 2003. Earlier this year, Weyerhaeuser announced it would sell off its timberlands in Tennessee and North and South Carolina. The sale process in the Carolinas is expected to conclude later this year. Weyerhaeuser also acquired 1.7 million acres with the purchase of Willamette and now owns or manages approximately 7.6 million acres in the U.S. ISSAQUAH, WA — Costco reported net sales for fiscal 2003, which ended August 31, of US$41.69 billion, up 10% from US$37.99 billion during the prior fiscal year. Profits for the year grew 3% to US$721.0 million, up from $700.0 million. Same-store sales increased 5% over the previous year. Net sales for the fourth quarter increased 11% to US$13.42 billion, while same-store sales during the period increased 7%. Profit for the fourth quarter decreased 3% to $239.4 million. MEDINA, OH — Paint maker RPM International Inc. saw first-quarter profits rise 8%, thanks largely to its consumer business, although the industrial side is still lagging. The paint manufacturer, whose brands include Rust-Oleum, says its fiscal first-quarter net income rose to US$47.7 million from US$44.2 million a year earlier.
PEOPLE ON THE MOVE

Gary Robb has been hired to manage operations at Peavey Industries as general manager of the 26-store specialty hardware chain. He was formerly with Cameron Ashley. (403-346-8991)
NOTED...…
Centre magazine is soliciting nominations for Buyer of the Year and Vendor of the Year Awards. Retailers are invited to submit name(s) of manufacturers/suppliers; manufacturers/supplier, are asked to submit name(s) of retail buyers deserving of recognition. Send your submission to Elena Opasini: eopasini@centremagazine.com or vote at www.centremagazine.com.
OVERHEARD…
"Increasingly, lumber is coming from Canada, Eastern Europe, China and a little bit out of South America. As those grow, they're coming in because they're lower-cost. So now the challenge becomes, out here in the Northwest, how do you keep your costs down in order to be able to compete?" — Mark Suwyn, chairman and CEO of Louisiana Pacific, in an interview with the Oregonian after LP's announcement that it would move its headquarters to Nashville, TN from Portland, OR

****HARDLINES MARKETPLACE**** Dont' miss the products and services on the Hardlines web Marketplace: https://hardlines.ca/html/marketplace.html And check out Hardlines Classifieds on the web: https://hardlines.ca/html/classifieds_new.asp

HELP WANTED DIRECTOR OF DEVELOPMENT RONA Inc. is looking for an experienced manager to fill the position of Director of Development for the GTA and Central Ontario. The job incumbent's main responsibilities will be to recruit new affiliated dealers and to oversee the development of RONA's affiliated stores in these regions. Interested individuals must submit their application by October 30, 2003 to Mr. Serge Vézina by fax at (514) 599-5141 or by e-mail at vezs@rona.ca. **********************************************************************************   JOIN A WINNING TEAM A dynamic growing building supplies company is looking for an Assistant Manager with a strong sales and operations background. Qualifications: : Knowledgeable in the building materials and construction industry. : Above average communication skills. : Ability to proved leadership and work with other employees in a fast pace environment. : Ability to multi task and maintain good organizational skills. : Enthusiastic and posses strong customer service skills. : Business education and basic computer skills an asset. : Have a strong desire to advance. Apply in writing or by fax to Dryco Building Supplies ATTN: Manager # 1-501 Rowntree Dairy Rd. Woodbridge ON. L4L 8H1; Fax 905-265-1845 ********************************************************************************** TSC STORES LTD. is a Canadian owned company with 21 retail stores in Ontario and a distribution center located in London, Ontario. We have been in the hardware, automotive and farm supply retail sector for over 35 years in Canada and have an aggressive plan for future growth. We are currently looking for a Merchandise Manager at our Corporate Office in London, Ontario. This senior position is responsible for supporting a team of Category Managers in the implementation of category objectives through the execution of company retail processes. This includes developing product assortments that achieve sales, gross margin return on investment and product turn targets while maintaining our Company Image, developing and maintaining strong vendor relationships to cultivate new business, ensuring that effective product training programs are in place for sales staff and flyer implementation. This person will also work with multiple departments including Store Operations to provide effective merchandising of all categories. The ideal candidate will possess post-secondary education in a related discipline with 10 years management experience with a retail chain. Buying experience in a retail environment is required. Candidates must have excellent communication, negotiation and analytical skills and the ability to lead others. We offer a competitive salary and benefit package. Please respond in complete confidence to Wolf Gugler. Wolf Gugler & Associates Ltd., 416-386-1719, email: resumes@wolfgugler.com. **********************************************************************************

AGENTS/REPS WANTED

Exterior Deck Screw Products We hold together the Boardwalk in Atlantic City! The perfect choice for Decks, Fences, Stairs and all other types of exterior projects Patented product blows away the competition. Can be drilled as close as 1/8 of an inch from edge of the wood and not split or fray. Excellent choice for use in all high corrosion areas. This Illinois based firm, Abbott-Interfast Corporation, is seeking independent manufacturers representative to grow their business in Canada. Exclusives available for all Territories. Please contact Ms. Denise Scott at 416 695-9888. State of Illinois Canadian Trade and Investment Office 1 Eva Road Suite 301 Etobicoke, ON M9C 4Z5 Email: Illinois@iltrade.toronto.on.ca ********************************************************************************** SERVICES OFFERED Your products deserve the best representation they can get. NORAL MARKETING knows the Canadian retail customer. Don't settle for anything less! Contact Al Vanderveen at 519-439-6800, ext. 201, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com  

**********************************************************************************

SELL YOUR COMPANY - OR BUY ONE - WITH HARDLINES CLASSIFIEDS! DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE. ONLY $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS. TO PLACE YOUR AD, CALL PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: buzz@hardlines.ca
Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2003 by Michael McLarney. HARDLINES™ the electronic newsletter hardlines.ca Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: mike@hardlines.ca Beverly Allen, Marketing Manager: bev@hardlines.ca Nancy Wright, Circulation Manager: nancy@hardlines.ca Phyllis Nowell, Sales Manager: buzz@hardlines.ca ______________________________________________ THE HARDLINES "FAIR PLAY" POLICY: Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week - but let us handle your internal routing from this end! ______________________________________________ Subscription: $219+$15.33 GST = $234.33 per year (GST #13987 0398 RT). Secondary subscriptions at the same office are only $34 + $2.38 GST = $36.38. Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to McLarneyCom.
s