BUYING GROUPS ATTEMPT TO JOIN TOGETHER |
CALGARY & MISSISSAUGA, Ont. — Two major Canadian buying groups are reportedly in talks with their dealers to create one larger group. The merger, if confirmed, would involve Tim-BR-Marts Ltd., based in Calgary, consolidating their operations with TIM-BR Mart Ontario (formerly Homecare), into one larger company, under the TIM-BR Mart name.Both organizations have been allied for many years as co-members of an umbrella buying group, Matreco. The first step toward greater consolidation was the formation of Quincaillerie Matreco Hardware, which also involved the two other Matreco members, Le Groupe BMR and AWARD. From BMR's own hardware distribution center in Longueuil, Que., AWARD dealers in Atlantic Canada and TIM-BR Mart Ontario members have been receiving hardlines since the beginning of 2004.
Tim-BR-Marts in the West has taken a "wait-and-see" attitude toward this new source of hardlines supply, choosing instead to rely on existing suppliers, especially Sodisco-Howden Group. However, it could end up becoming instrumental in more substantive consolidation.
The Ontario group, which represents 150 stores representing both traditional TIM-BR Mart dealers and commercial/industrial yards within the CID group, had $350 million in purchases. If combined with the larger Western group, which had $565 million in purchases in 2003 to 153 dealers, combined retail sales would reach close to $2 billion.
Further anticipated results of this consolidation would include: better buying and improved rebates, lower overheads, and more cohesive store planning and flyer programs across the country. |
LATEST SIGNINGS EXCEED RONA'S 2004 RECRUITMENT TARGETS |
BOUCHERVILLE, Que. — The signing of another five dealers across Canada has enabled Rona inc. to exceed its targets for added sales volumes for the year.That target, of $100 million, was surpassed with the addition of four dealers representing five stores — three in Ontario, one British Columbia and another in Quebec. Together, they represent combined annual sales of $30.9 million, bringing the Rona network's total sales increase from 2004 recruitments to more than $101 million.
The five new stores have also added some 52,200 sq.ft. to Rona's total retail selling space.
"It's only mid-October, so we're very proud to have already topped the ambitious growth target we set at the beginning of the year," says Claude Bernier, executive vice-president, traditional and specialty stores. "We've got another 10 weeks to go before the end of 2004, another 10 weeks to advance our position as the Canadian leader in the hardware and home renovation industry."
In Ontario, the new members are Windsor-based Angileri Brothers Building Materials Ltd. (with two locations) and Hook's Hardware in Cloyne. In British Columbia, Earlys Building Supplies Inc. in Campbell River has joined as a Rona Building Centre. In Quebec, the Espérance Group has acquired the Centre de rénovation Pointe et Meunier in the Montreal suburb of Carignan and converted it to a Rona Le Rénovateur. |
SEARS ADDS APPLIANCES TO 28 HARDWARE STORES |
HOFFMAN ESTATES, Ill — Sears has added appliance departments to 28 more of its 160 Sears Hardware stores, and upgraded the appearance and product assortment in those stores' other departments. But there are no plans in the near term to duplicate the venture in Canada.The U.S. stores now offer about 50 models from six manufacturers — Amana, Frigidaire, GE, Maytag, Whirlpool and Kenmore, Sears's proprietary brand — and a total assortment of 260 models. Like the store shown here, in Batavia, Ill., the appliances are merchandised right on the sales floor, plus boxed for "take it home today" purchases.
"Sears is the leading retailer of appliances with double the market share of our closest competitor. This format gives us the ability to extend our great appliance offering in a new way, right in our customers' neighborhoods," says Bob Gartner, vice-president and general merchandise manager of Sears Hardware.
These stores feature changes in other departments that include permanent displays of patio furniture and grills; the elimination of both "top stock" inventory and signs over the aisles to improve visibility and lighting; and a new assortment of hardware merchandise, the specifics of which Sears did not disclose.
Sears has only recently launched the Sears Hardware format in Canada, with three pilot stores that opened last month. The outlets, which range in size from 8,500 to 10,000 sq.ft., were former Sears Auto Centers in the parking lots of full-line department stores. These stores don't stock appliances, and there are no immediate plans to do so. However, according to Sears Canada spokesperson Vincent Powers, "We can always learn from what's successful in the States," and the addition of appliances "in time" might be a possibility.
In addition, says Powers, Sears Canada is "considering" bringing in patio sets and barbecue grills into the new Hardware stores for the spring selling season.
Meanwhile, the locations in the U.S. with new appliance departments are in Connecticut (three stores), Illinois (five), Indiana (one), New Jersey (10), Pennsylvania (seven) and Wisconsin (two). During grand opening weekend, consumers could enter a drawing for a $1,000 shopping spree; a $1,000 set of Frigidaire appliances; 0% financing; discounts of $5 off a $25 purchase or $10 off a $50 purchase. |
DO IT BEST TURNS BACK RECORD REBATES TO MEMBERS |
FORT WAYNE, Ind. — Do it Best Corp. president and CEO Bob Taylor delivered his annual address to the co-op's members at the member-owned co-op wholesaler's recent fall dealer market. Taylor highlighted the industry leading and record-setting rebate by Do it Best Corp. to its members: a total of $107.5 million, including five members who received rebates in excess of $1 million."Just four years ago, we celebrated that two members, for the first time, received rebates in excess of $1 million," said Taylor. "This year, five Do it Best Corp. members received rebates in excess of $1 million. And another 10 received rebates in excess of $500,000."
Other factors helping members grow their businesses, Taylor noted, are the retail programs and services offered by Do it Best Corp. One of the services highlighted was the doitbest.com web site, an e-commerce site for Do it Best Corp. members.
"Sales through doitbest.com continue to grow, up 50% over last year," Taylor said. "Over half of our members have a site linked to doitbest.com and more than three million unique visitors shop doitbest.com each year." This year, the group added a delivery service that enables online customers to pick up orders at their local store. |
REPORTING HEALTHY PROFITS,
STANLEY SELLS HOME DÉCOR BUSINESS |
NEW BRITAIN, Conn. — Stanley Works announced early last week that it intends to sell its Home Décor business unit to New York-based equity firm Wellspring Capital Management. The Home Décor unit distributes mirrored closet doors, closet organization and wall décor, and generates about $150 million in annual revenue. Stanley anticipates $65 million in after-tax proceeds from the sale.Last month, Stanley also sold existing accounts receivable related to its MAC Advantage financing program to HSBC for $47 million, of which about $35 million was used to reduce amounts outstanding under the company's receivables securitization facility, and $12 million was applied to reduction of outstanding debt.
This news emerged as Stanley reported a 53.2% increase, to $63.9 million, in net income for the quarter ended Sept. 30. That profit rise was on sales of $665.6 million, which rose 18.9% over the same period a year ago. Through nine months, Stanley's revenue increased 20.3% to $2.36 billion, and its profits jumped 280.4% to $278.8 million.
Much of that net gain, though, is attributable to an $81.9 million pre-tax charge against earnings that Stanley took to cover its ongoing restructuring, which included $10.1 million for its exit during the latest quarter from its MAC Direct retail business.
The company's consumer products group has helped to drive its financial performance this year. In the latest quarter, that group's sales increased 6.4% to $296.4 million, and its operating profit grew by 10.9% to $43.6 million. Through nine months, the group's revenue was up 13.8% to $900.7 million, and operating profit rose 33.8% to $132.1 million.
Overall, Stanley's net sales in the quarter from continuing operations — excluding the effects of recent acquisitions that included CST/Berger, Blick plc and Frisco Bay Industries — were up 10% to $791 million.
"Our consumer hand tools business and eight Industrial Tools and Security Solutions business units — fastening systems, industrial mechanics' tools, industrial storage, specialty tools, laser measuring, assembly technologies, hydraulic tools, and access technologies — achieved double-digit percentage organic sales increases this quarter," stated John Lundgren, Stanley's chairman and CEO.
Lundgren projected that Stanley's sales for the year would be up nearly 20%, with a two percentage-point improvement in operating margin and 35% growth from continuing operations. He expected 3%-5% organic revenue growth and double-digit percentage earnings growth in the year 2005. |
CORRECTION: |
Mike Haining, (not Jim Haining, as reported last week) is TruServ Corp.'s senior vice-president distribution, logistics and manufacturing. Haining works hand -in-hand with Steve Mahurin, SVP Chief Merchandising Officer, and Steve's direct report, Jim Richardson, Divisional vice-president Global Sourcing, on TruServ's initiative to set up offices in the Far East. |
NOTED... |
On November 4, the Australian Trade Commission will showcase Australian consumer products. All Canadian importers, distributors, agents, and buyers interested in Australian companies are welcome. Product lines include: housewares, paint sundries, air registers and filters, and much more. November 4, 1-7pm at the Conference Centre, Suite 306, 175 Bloor St. E., Toronto. Tel: 416-323-3909, ext. 2318; or Fareeda Chand, senior business development manager, Australian Trade Commission; tel: 416-323, ext. 1418; fareeda.chand@austrade.gov.au |
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COMPANIES IN THE NEWS |
PERTH. Australia — Crikey, mate. Could Australia's Wesfarmers Ltd., which owns the largest home improvement retailer in Australia, sell its Bunnings big box chain to Home Depot? Wesfarmers says it has no comment on media reports that U.S. retailing giant Home Depot Inc. (HD) is looking at acquiring the Perth-based conglomerate's hardware unit. "We never comment on market speculation," a Wesfarmers spokesperson is reported to say in Dow Jones Newswires. Although Wesfarmers is one of the world's 10 largest coking coal exporters, the Bunnings hardware division is the company's biggest profit maker.MESQUITE, Nev. — An official groundbreaking ceremony took place last week for a new retail service center here for Do it Best Corp. This distribution center, which is expected to open in June 2005, will serve 250 stores throughout the southwestern United States. It joins the ranks of DCs in Dixon, Ill.; Cape Girardeau, Mo.; Montgomery, N.Y.; Medina, Ohio; Woodburn, Ore.; Lexington, S.C.; and Waco, Tex.
KELOWNA, B.C. — The board of directors for Riverside Forest Products stated that a sweetened offer for their company made by Tolko Industries is "superior" to an offer tendered by International Forest Products (Interfor). Interfor's $39 per share offer was seen by industry watchers as a life preserver for Riverside from a hostile $29-per-share bid that Tolko had made earlier. Interfor's officers and directors had committed their 28% stake in their company to the Interfor bid in a lockup agreement. However, on October 14, Vernon, B.C.-based Tolko upped its all-cash bid to $40 per share, which suddenly looked a lot friendlier to Riverside's board and investors. (Tolko already owns nearly 19% of Riverside's stock, and has stated that two other major shareholders, Montreal-based Tembec Inc. and Van Berkom and Associates, have agreed to tender their shares to Tolko's bid.)
HOFFMAN ESTATES, Ill. — Sears, Roebuck and Co. reported a 3Q net loss of $61 million, a swing from net income of $147 million in the third quarter of 2003. The drop was attributed to "softer retail demand, larger than expected costs associated with seasonal transitions and a slower ramp up of sales following certain business resets," according to chairman and CEO Alan Lacy.
TORONTO — Sears Canada reports total third-quarter revenues of $1.50 billion, up 4.5% from $1.43 billion in the same quarter of 2003. Same-store sales increased 1.1%. Net earnings for the quarter, excluding non-comparable items, were $19.4 million, from $12.1 million last year. Net earnings including non-comparable items were $14.0 million.
WEST JEFFERSON, N.C. — Black & Decker's acquisition of Pentair's Tool Group is resulting in a paring down of operations, as 240 staff here will lose their jobs to factories in China. Seventy-five more jobs will be phased out by year's end at a B&D facility in Jackson, Tenn., while another 330 are being terminated at a plant in Fayetteville, Kansas.
GLENVIEW, Ill. — Illinois Tool Works Inc. had a 23% rise in profit due to strong demand in both North American and international markets, although higher raw material costs kept results below expectations. Illinois Tool posted a net profit in the third quarter of $330.1 million, compared with $268.9 million in the year-earlier quarter. Sales in the quarter rose 17% from the year-earlier period to $2.97 billion.
BOISE, Idaho — Boise Cascade Corp. enjoyed third-quarter net income of $61.1 million, up from $32.9 million in the third quarter 2003. Sales in third quarter increased 73% to $3.65 billion, compared with $2.11 billion in third quarter a year ago and $3.40 billion in second-quarter 2004. Year-over-year sales increased primarily because of the acquisition of OfficeMax in December 2003. Sales were also aided by strong product prices in Boise Building Solutions and improving product prices in Boise Paper Solutions.
CHICAGO — W.W. Grainger Inc. enjoyed a 19% increase in earnings per share for the third quarter ended September 30, 2004, from 62 cents to 74 cents. Sales were $1.3 billion, up 8% versus the prior year's third quarter. Net earnings were up 19% to $68 million, the highest net earnings for any quarter. Sales for the nine months ended September 30, 2004, were $3.8 billion, up 8% over the first nine months of 2003. Net earnings increased 19% to $197 million, compared with $165 million in 2003. |
PEOPLE ON THE MOVE |
Home Depot has begun bolstering the management team of its Expo Design Center division with the hiring of Bruce Nelson as merchandising vice-president. Formerly senior vice-president, merchandising for the home segment of Target Corp.'s Marshall Field's department store division, Nelson reports jointly to Annette Verschuren, president of Expo and Home Depot Canada, and to Bill Lennie, senior vice-president, merchandising — decor at Home Depot ...Nelson takes over from Rick Vasques, who is now working for Home Depot in Mexico.At National Manufacturing, Mike Mohaupt has been promoted to director of category management (North America). He was previously director of sales and marketing (Canada). In this position, he takes lead responsibility for category management with National's trading partners in Canada, the United States and Mexico, from National's home office in Sterling, Ill. ... Dale Elliott has been appointed vice-president sales — Canada. He was most recently national sales manager with the Dremel division of Robert Bosch Tool Corp.
At Do it Best Corp., Stan Hardman has been named chairman of the board for the 2005 fiscal year. Hardman is the co-owner of seven Hardman's stores throughout W.V. He succeeds Bruce Ellis, of Roswell Lumber Do it center in Roswell, N.M.
Kmart has announced the hiring of a fast-food executive, Aylwin Lewis, as its new president and CEO. Lewis, 50, was formerly with Yum Brands, which owns and franchises KFC, Pizza Hut, Taco Bell, Long John Silver's and A&W. He replaces Julian Day, who presided over the company during its time under bankruptcy protection last year. Day remains on the Kmart board of directors.
Mike Springer has been appointed vice-president sales at Horizon Plastics, a custom molder based in Cobourg, Ont. (905-372-2291)
John T. Butcher, executive vice-president and CFO of Sears Canada Inc., has announced his intention to retire from at the end of the year. Butcher has been with the company since 1976, serving in various roles within the finance side of the business, before assuming his current assignment in 1996. Sears is currently conducting a search for a replacement. |
U.S. MARKET INDICATORS |
Housing starts fell by 6.0% in September, dipping to a seasonally adjusted annual rate of 1.898 million, from a 2.020 million pace in August, reports the Commerce Department. Single-family starts posted their biggest drop since February 2003, down 8.2% to a 1.540 million unit level. Multi-family housing starts were up 4.7% for the third straight month, to a 358,000 annualized rate.Building permits were up 1.8% in September, according to the Commerce Department. They reached an annual 2.005 million unit rate, up from a 1.969 million pace in August, and up 3.2% from the same month a year ago.
The Conference Board has released its Index of Leading Indicators, a barometer of future economic activity, showing that fell 0.1% in September —the fourth consecutive monthly decline, suggesting that the recovery may be cooling. The Index was down 0.3% in August and July, and down 0.1% in June. |
CANADIAN MARKET INDICATORS |
Retail sales reached a record $29.1 billion in August, up 0.8% from July, says Statistics Canada. Retailers posted sales advances in every month so far this year, except for April, which was down 0.7%.Sales by large retailers cooled in August, falling 1.6% and partly offsetting July's 1.9% gain. Six of eight major commodity groups posted decreases, with the sharpest drops in sporting and leisure goods, and clothing, footwear and accessory sales. Although declining in August, food and beverage and hardware, lawn and garden product sales remained above June levels. |
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