Orgill tests Canadian market

Who knew? North America's largest non-bannered home improvement distributor is already shipping to a handful of Canadian customers, and Orgill's Ron Beal says he "likes what we see in the Canadian market." He revealed this at the recent Hardlines Conference. Beal, the president and CEO of the Memphis, TN-based Orgill Inc., described his company's growth to a room full of industry representatives. From six U.S. distribution centres, Orgill ships about 63,000 SKUs to both un-bannered independents and, to a much lesser extent, those affiliated with banners like Ace, Do-it Best and True Value. (There is a much larger population of un-bannered independents in the U.S. than in Canada.) Sales exceeded $1 billion last year. Orgill offers a no-frills supply chain with little in the way of retail programs and almost no mandatory rules, regulations or compliance policies, Beal said. Orgill's bannerless customers are far from weak or inferior in their marketplaces, compared to the national brands, Beal said. "The perception of store brand is very often a local phenomenon, driven by location, service, price offering and other factors," he added. "We supply some of the best home improvement stores in America. Nobody owns all the ideas; nobody has a patent on a well-maintained, well-presented hardware store." Orgill's growing supply lines from Asia will be soon be supported by an important Canadian connection. He said the state-of-the-art New World Port at Prince Rupert, B.C., is scheduled to receive its first container from the Orient on Oct. 31. A rail line that runs through Edmonton, Saskatoon, Winnipeg and Chicago will deliver containers to Orgill's head office DC in Memphis within four days of arriving on the West Coast. "Prince Rupert is now the closest North American container port to Asia," Beal said. "you are going to be hearing lots about this in the news." As far as Orgill taking the Canadian connection any further at this point, Orgill told the Hardlines audience that "there were no immediate plans" for an expansion into Canada, although "there is lots of potential."

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TruServ Canada launches dealer rewards program

WINNIPEG — TruServ Canada launched an innovative  rewards program for its dealers at it fall market, held here last week. Under the new program, TruServ dealers earn rewards points for participating in merchandising programs and for purchasing from vendor "partners". The program is supported so far by more than 60 vendors, all of whom were exhibiting at the fall market. TruServ's dealers operate under a range of banners, including True Value Hardware, V&S Variety, and Country Depot. The new program also generates points when dealers participate in TruServ's advertising programs. For example, A dealer can earn 25 points for each flier it signs up for and distributes. Other activities, such as signing up users for its private-label credit card and gift card, ordering staff uniforms, and utilizing TruServ's technology programs, will all earn points for dealers. The reward points can be accumulated by store owners, manager and their staff, and directed toward earning attendance at the TruServ Annual convention, which will be held in February, 2009 on the Mayan Riviera."

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Independents can flourish: interview with TruServ's Bill Morrison

Bill Morrison, president and CEO of TruServ Canada, offered some observations about the direction of retail in Canada, during an exclusive interview with Hardlines at the retailer's recent fall show. He had a lot to say about the future of various retail formats in Canada, noting that the independent has a real advantage in terms of convenience, if they back that up with good service and strong product knowledge. Morrison also predicts the wane of large-format stores as they reach the peak of their lifecycle. "It's going to be the fight of the mega stores like Wal-Mart and Loblaws, and big or small will succeed, but not [retailers in ] the middle," he said. "Retailers need to find the right combination of services to encourage customers to shop with the independent and not at the big box." Lifestyle retailers like LuluLemon represent retailers that are emerging, he noted, while mass merchants like the Bay are on the decline. In fact, he doesn't expect Zellers or Sears to survive the next few years. Citing company founder Roland MacLeod, who started MacLeod's in 1917 (which became MacLeod-Stedman, and was eventually bought by TruServ in the U.S. before splitting off), he challenged his dealers to be imaginative and look for new ways to offer service when confronting new forms of competition.

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Look for opportunities amidst problems says ex-Beaver prez

Jack Bingleman, the former president of Beaver Lumber in the 1970s and' 80s — and the man who founded Business Depot in Canada — shared some of his hard-earned business philosophies with Hardlines Conference attendees, Oct. 15 at the Toronto Congress Centre. "My father, who sold farm equipment, introduced me to the concept of 'booms,' " Bingleman said. "For him, there was a boom when gasoline tractors switched to diesel and another one when hay balers came on the market." Bingleman advised today's retailers to identify today's more subtle, but equally profitable, booms—new products, new techniques, new trends. "Success comes when you latch onto these incremental opportunities," Bingleman said. Bingleman reviewed the market changes he experienced during his more than two decades at Beaver Lumber, and he recounted the day he was fired from his role as president. "I went home that night and said to my wife, "I just got fired, we just became millionaires and I think I'm happy." Subsequently, Bingleman decided to tackle the office products market. "I knew that Canadians were paying way too much for office products and I could see there was an opportunity based on low price, everything under one roof, and two ways to buy — catalogue and retail." He raised $21-million from private investors and opened the first pilot Business Depot store in Toronto in 1990. "You are wasting your time with banks. They are not into high-risk investing," Bingleman advised retailers in the audience contemplating financing options for growth. "And you can never get enough money from family and friends. You need to find the pro investors." After building Business Depot into a flourishing chain in Canada, Bingleman sold out to U.S.-based Staples in 1994 and became Staples' North American president into the bargain. He now pursues a number of private investment opportunities, as well as sitting on the boards of Domtar and Tractor Supply Co. Bingleman's last word on "booms"? "Whenever I hear of massive problems I think of massive opportunities," he told the Hardlines Conference delegates.

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Do it Best CEO affirms commitment to co-op model

Fort Wayne, IN — Do it Best continues to embrace the co-op structure, says Bob Taylor, president and CEO of Do it Best Corp. Speaking to shareholders at the recent Do it Best Market in Indianapolis, he said the co-op business model is the right fit for Do it Best Corp. After announcing the highest rebate in the company's history — $126.2 million — he said "…while others might look to move away from a co-op structure, we embrace it and see it as the perfect way to align the interests of Do it Best Corp. with those of our members and keep our team focused on our number one goal…helping members grow." Taylor was referring to the recent announcement by rival Ace Hardware Corp., which has expressed a desire to switch to a corporate model. RONA inc. made  similar switch five years ago when it became a public company. More recently, TruServ Canada became a corporate entity as of Jan. 1, 2007. Taylor went on to defend the advantages of the co-op model, saying "A for-profit company cannot provide the same alignment of interest and return on investment that Do it Best Corp. can to our member-owners. Over the past 10 years, Do it Best Corp. has grown by 64%. That's more than double our nearest co-op competitor."

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