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Phone: 416—489—3396 Michael McLarney, Editor & President Beverly Allen, Publisher Brady Peever, Client Services Manager John Caulfield, Contributing Editor
October 26, 2009, Volume xv, #40
In This Issue:

“All the world’s a stage and all the men and women merely players: They have their exits and their entrances; and one man in his time plays many parts.” —William Shakespeare (British playwright, 1564-1616)

Re-investment in stores essential says Canadian Tire vp
TORONTO — Canadian Tire has managed to grow its sales when others saw theirs fall, and a key to their success has been ongoing process of upgrading its stores. Reg McLay, senior vice-president, Marketing and Sourcing Services for Canadian Tire Retail, told his story last week to more than 150 retail and supplier executives. They had gathered here at the 15th Annual Hardlines Conference.To that end, Canadian Tire has added 400 new or refurbished stores to its network of 426 outlets during the past 15 years. It’s part of an overall effort, as McLay said, “to know your customers and manage your brand, something, he added, that’s “easy to say but tough to do.” In the process, he noted, its important not to take the Canadian Tire brand for granted. During slowdown of the past year, Canadian Tire proved “recession-resistant,” as the company looked for more ways to get repeat traffic into its stores through increased sales of consumables, including household maintenance and cleaning products and, to a limited degree, food. But mainly, Canadian Tire found itself focusing on ways to maximize productivity and efficiency to drive growth. Efforts have included two new store strategies, the Smart store, which replaces the 20/20 concept, and the smaller market store, downsized to penetrate smaller rural communities. The company has six already, and plans another four by this fall.


Buying groups look to gain share in down market

SPECIAL REPORT — The slowdown that began in earnest in this industry in 2007 caught up to the buying groups in 2008, and this year holds little promise of a significant turnaround. However, the independent dealers have been faring better than their main competitor, the big boxes.

And dealers organized within LBM buying groups were better off than other independents, according to the latest Buying Group Report from Hardlines. Building centres as a retail sector saw sales drop by 3.4% in 2008, the buying groups collectively were down by almost half that. Buying group purchases remained steady through last year, as well, and these are expected to improve slightly in 2009, as dealers look for ways to consolidate their purchases in a more meaningful fashion. Some groups have proved incredibly resilient this year. Castle Building Centres, with almost 90 dealers in the relatively stable Atlantic Canada market, has managed to stay almost on par with last year's sales, according to the report's estimates. Consolidation continues among the groups, as well. In recent years, Canada's largest buying group has been TIM-BR MART, with $3.4 billion in retail sales generated by more than 650 dealers across the country. TIM-BR MART was overtaken effective Jan. 1, when two buying groups, Delroc Industries and Sexton Group, and two co-ops, Federated Co-operatives Ltd. and La Coop fédérée, joined Independent Lumber Dealers Co-operative. ILDC now represents more than $4 billion in sales through 1,000-plus outlets. Despite consolidation, smaller niche groups continue to flourish. IRLY Distributors, based in Surrey, B.C., continues to add members (see story, this issue), while TORBSA, based in Bolton, Ont., has also seen its membership grow. (The Buying Group Report — including the Incredible Buying Group Org Chart — appears in the latest Hardlines Quarterly Report, being sent this week to our HQR subscribers. To get your copy, contact us at the Information World Headquarters! — Michael)


Roots: build your brand inside and out
TORONTO — Communicating your brand — and your company's values —- has to be a process that includes both your customers and your own personnel. That was the central message of one keynote speaker at the latest Hardlines Conference. Robert Sarner is the director of communication and public affairs for Roots Canada — one of the country's best known brands. Sarner, speaking to an audience of more than 150 retail and supplier executives last week, demonstrated how Roots stays in touch with its customers through a regular magazine that appears in select retail stores, including its own outlets, and online at its own website. Sarner stressed that every company has a story and underscored the importance of telling that story. The magazine, Called "The Source," regularly describes the Roots story through anecdotes, snapshots of staffers, and even product knowledge. However, it's a far cry from a product catalogue. Instead, it tells the company's story through Roots' involvement in events and community activities. "Community support is essential," he told the audience. But it also highlights the personal activities, interests and involvement of staff in community events and personal achievements and reflects the company's own overall commitment to staying involved. Sarner closed by urging every company represented in the audience to look for ways to look for ways to tell its story. That telling, he said, does not have to be done with hype, but with passion. Everyone who was looking for a copy of "The Source" magazine at our conference can view their most recent issue here.


Crossroads C&I partners with Johns Manville
EDMONTON — Johns Manville, the insulation provider owned by Berkshire Hathaway, has been selected as the primary supplier of mechanical insulation products and accessories to Crossroads C&I Distributors, a 46-year-old company based here. Under the agreement, Crossroads C&I will serve as JM's authorized full-line distributor of mechanical insulation products in Alberta, British Columbia, Yukon and Northwest Territories, handling distribution of all of JM's pipe, equipment and air handling insulation products. "Crossroads C&I is the service leader in their markets, and Johns Manville is fortunate to partner with a company so focused on customer satisfaction," says Dave Skelly, director of sales for Johns Manville's Insulation Systems business. "We are excited to establish a full-line relationship with Crossroads C&I for this important geographic region." Beginning immediately, Crossroads C&I customers will have access to the full line of JM pipe and equipment and air handling products.
IRLY's newest member has grave product selection
SURREY, B.C. — IRLY Building Centres has signed a new member, Townsite Maintenance Centre in Bella Coola, B.C. It's owned by James Hiltz, who purchased the then 12-year-old business in 1985. It was 5,000 square feet in size until 1989, when a fire destroyed the building. Another 1,000 square feet were added to the building when it was rebuilt, and it now totals 6,000 square feet.Hiltz also has three lots nearby to store building materials. "I'm going to expand my building materials offerings now that I can get everything from one place and promote it with the IRLY flyer," Hiltz says. Hiltz's top lines are paint and plumbing, but he also carries hardware, housewares, small appliances and garden supplies. The store has one more unique offering - coffins. After the local hospital's supplier in Williams Lake closed shop, Hiltz was approached to fill the void. "They needed a source, so I bring in one model." Hiltz first began his relationship with IRLY about a year ago as a member of IRLY's Western Hardware wholesale division. He found IRLY Distributors to be a good fit and decided to become an IRLY member. "I'm very happy with the service," he adds.



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Publishing Details: HARDLINES is published weekly (except monthly in December and August) by HARDLINES Inc. 360 Dupont Street Toronto, Ontario, Canada M5R 1V 9 © 2009 by HARDLINES Inc. HARDLINES™ the electronic newsletter Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney — Editor & President — Beverly Allen, Publisher — Brady Peever — Client Services Manager — Chiaki Nemoto — Accounting — 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:$299 (Canadian subscribers add $14.86 GST = $315.21 per year/ GST #13987 0398 RT).Secondary subscriptions at the same office are only $48.75 (Canadian subscribers add $2.44 GST = $51.19).Ask about our reduced rate for branch offices.You can pay online by VISA/MC/AMEX at our secure website or send us money. Please make cheque payable to HARDLINES.


Thanks to all our Faithful Hardlines Subscribers and friends who joined us for the 14th Annual Hardlines Conference last week. Bev, Brady and I all feel confident that this was our best event ever! We started the first day with Susan Robinson of IRLY Distributors, who got us working with some great networking exercises. Then we finished on day two with a one-on-one interview with the first lady of home improvement retailing, Annette Verschuren of Home Depot Canada and Asia. What a time we had! — Michael
…that we are just exhausted after our Conference (but pleasantly so what an amazing time we had!), but can't think of anything more you should know for this week. We'll be back on track by our next issue Michael.
PICKERING, Ont. — Signature Aluminum Canada Inc. has announced that it will discontinue the manufacture of aluminum ladders. Referring to "changes in the market place," the company says it will focus on its core business of aluminum extrusions manufacture. Signature has stopped taking orders, but will continue to ship existing orders until Nov. 20. SILVIS, Ill. — Two Former Ace dealers in the Quad Cities area have filed a suit against Ace Hardware. The plaintiffs charge that Ace's "Vision 21" store program did not achieve sales goals promised by the company. The dealers invested in three larger-format Ace stores between 2005 and 2007, of which two have since closed. NEW YORK — Wal-Mart CEO Mike Duke told investors here recently that expansion plans will include smaller, "more efficient" stores that will have about 25,000 fewer square feet than regular 195,000-square-foot outlets. The new stores, which will carry food and general merchandise, are seen as a way for Wal-Mart to increase its presence in urban markets. SAN JOSE, Calif. — Law enforcement officials have placed into custody a married couple who allegedly embezzled at least $1.3 million from Payless Hardware & Rockery, a local Ace Hardware-affiliated store. The Santa Clara County's District Attorney's office has charged Desiree and Ruben Herrera with 14 counts of grand larceny, money laundering and tax fraud. Ms. Herrera had been an accounts receivables clerk with the store from 2002 through 2009. The San Jose Mercury-News reports that the store's office manager, Karey Thatcher, discovered what was going on when, in the process of switching accounting systems, she asked Herrera to begin providing her numbers. Those numbers didn't sync with Thatcher's numbers. BRENTWOOD, Tenn. — Tractor Supply Company has reported a 1.9% increase in net sales for the third quarter to $747.7 million from $733.9 million. Same-store sales decreased 5.1%, compared with a 6.2% increase in the prior year's third quarter. The same-store sales decline resulted primarily from softness in sales of seasonal big-ticket items and the lift in sales last year of hurricane-related merchandise and seasonal heating products. However, sales in core consumable, usable and edible categories, including animal and pet-related products as well as repair and replacement parts, helped offset the decline. KINGSLEY, England — The Tesco Express that has just opened here has no cashiers. Instead, the store offers five self-serve checkouts. The company, Britain's largest retailer, is calling it an "assisted service store." CLEVELAND — Sherwin-Williams, the largest paint company in North America, saw its earnings decline only slightly, by 1% to $175.2 million, during the three months ended Sept. 30. The company's revenue during that period, though, took a steeper dip, by nearly 12% to $1.997 billion. Through nine months, the paint maker's sales were down 12.5% to just under $5.5 billion, and its profit was off 13.2% to $370.5 million. TOWSON, Md. — Black & Decker saw profits for the third quarter slip 35% to $55.4 million from $85.8 million last year, on revenue of $1.21 billion that was down 23% from $1.57 billion. The company reported weak sales across all categories. Sales were down 20% in the consumer products group and down by more than that for its industrial-products group.


Retail sales in current dollars rose 0.8% in August to $34.5 billion, offsetting the decline in July. The bulk of the increase came from higher sales at gasoline stations and new car dealers. Excluding these retailers, sales were flat. Sales in the building and outdoor home supplies store sector increased 0.5%, the second consecutive monthly increase. However, despite following an upward trend in 2009, sales in this sector have not yet offset the substantial decrease in December 2008. (Stats Canada)


A new survey from WorkPlace Media found that approximately one in three working Americans will do at least 40% of their holiday shopping on the way to or from work, online at work, or during a work break. Also, 43% of those surveyed said they would be spending less than they did last year.


"A company must not only do right, it must be seen to do right." — Robert Sarner, director of communication and public affairs, Roots Canada, on the importance of a company finding ways to tell its story to both customers and staff in a consistent and passionate manner. He spoke last week at the Hardlines Conference in Toronto.
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