HARDLINES™ Five years serving Canada's home improvement industry October 2, 2000 - Volume vi, #37 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * IN THIS ISSUE: * New head buyer at Tim-BR-Marts talks about partnering with vendors, the power of branding * Ace in U.S. introduces new wrinkles to its vision for its stores * Wal-Mart is newest entry into large appliances sales * Sodisco changes name of Québec show * * * * * *   HARDLINES WHO'S WHO 2000-2001 EDITION: The only annual guide to Canada's leading hardware and home improvement retailers, wholesalers, buying groups, mass merchants and co-ops. It lists more than 100 companies. Each listing features executives, product categories, sales, number of outlets, buyers, etc. No salesperson or marketing person should be without this little beauty! In fact, some of our subscribers are buying three and four copies, so the whole sales force will be armed with the right names and numbers while they're on the road. Don't be caught without it! The cost is only $125 for subscribers, or $165 for non-subscribers (+ GST/HST). Order online or call us at 416-489-3396.  
TIM-BR-MART'S NEW PURCHASING DIRECTOR:   EXCLUSIVE INTERVIEW Hardlines caught up with Randy Martin at Tim-BR-Marts Ltd. last week. He joined the Vancouver-based buying group recently to oversee purchasing for the group's 184 dealer/members, who stretch from the Lakehead to Vancouver Island. With sales by all dealers of $1.2 billion last year, Tim-BR-Marts is one of the largest buying groups in the country. It is also part of Matreco, whose combined membership represents $2.5 billion in retail sales annually. Martin has been with some of the country's leading retailers, including Totem Building Supplies and Home Depot Canada. Q: What do you see as the key objectives of your role as merchandising director for Tim-BR-Marts Ltd.? A: To continue to market quality products at competitive prices. We need to improve and enhance our advertising initiatives to sell the products and the Tim-BR-Mart brand. We need to consolidate our buying practices across Canada, to try and gain some efficiencies in cost and selection of product. Q: How is the relationship between buyer and vendor evolving? A: I think the relationship is evolving into a true partnership once both sides have committed. We both realize we have the same objectives, that is, to sell more product. The retailer is allowing the vendors to become more involved with their products at the store and in the advertising. Let's face it, the vendor is an expert in his product category and the end user is also their customer.The relationship is no longer one of intimidation. However, it requires a lot of aggressive work on both sides to develop a deal that works for both sides. They realize we have to be profitable and we also realize they need to remain profitable, or they won't be around to support our product needs in the future. Q: what are the opportunities for the Tim-BR-Mart brand as it is developed into a national entity? A: The most obvious is to gain efficiencies in our buying and marketing. We also have an opportunity in the long term to become as recognizable as some other branded retailers in our various markets. We have the vision for the future that a customer can confidently go into a Tim-BR-Mart store anywhere in Canada and expect to see similar products, services, signage and store image. We will have developed a kind of retailer that can be recognized and trusted to be able to deliver the products and services that our customer associates the with the Tim-BR-Mart brand, that is, quality home improvement products. Q: Many groups are pushing their own private label programs. What is the potential for the Tim-BR-Mart brand? A: I like the nationally branded products that have advertising campaigns behind them. These nationally branded products already have a following. There are some categories of product that do not require a strong brand, and these categories have an opportunity to be private or proprietary brands, as long as the product is top quality - the best value on the market. The old philosophy for private branding was to have the cheapest priced product, but that has changed. If you are going to own annd develop a brand of product, you want a very good value/quaity product. Q: How are Tim-BR-Mart dealers trying to differentiate from the big boxes? What are their competitive strengths? A: Tim-BR-Mart dealers have a lot of advantages over the box stores. The box stores are able to put together a great selection at a good price, but have difficulty properly executing the services side of the business - installations, deliveries, special orders, consistent service, in house charge accounts, blueprint take-offs, building packages, etc. These are all areas that a smaller independent store can excel at, particularly the consistent knowledgeable service. We can offer pricing that is very competitive when compared with the box stores - as they also need to make a profit. * * * * * * NEW ACE DÉCOR TRIES LIFESTYLE APPROACH A new signage and décor program for Ace Hardware stores was unveiled at the company's latest dealer show last week in St. Louis, MO. The white and red look has been modified to feature wood grain with black and red accents combined with signage that tries to convey a lifestyle approach to shopping. Signage will be smaller and attached to aisles, rather than hanging from the ceiling, conveying a less cluttered look. Endcaps will feature large photos of people undertaking home improvement activities. Products will be grouped by project, rather than strictly by category. The program is part of Ace's Vision 21 strategic plan for its stores. While stores in the U.S. will start adopting the new look by next spring, Ace Hardware Canada will continue to use the Ace 2000 program. Almost 100 such stores are in place here. * * * * * * WAL-MART TO START SELLING WHITE GOODS Large appliances have become the hot new category for retailers. Sears in the U.S. is that country's largest seller of white goods, followed by Lowe's. Home Depot is getting into the game and now Wal-Mart has thrown its hat into the ring. Starting this month, four Sears stores in the U.S. will sell General Electric appliances. Another eight will start selling them by year's end. Wal-Mart will showcase up to 40 GE models and make another 150 models available in its electronic kiosks.
COMPANIES IN THE NEWS   Sodisco-Howden Group has renamed its Québec dealer show PROexpo from SODexpo. The change follows the conversion of its dealers in that province to the Pro name, a change that was rolled out across Canada early last year. The show will be held in Québec City from November 4-6. For the three-month period ended July 31, 2000, Matco Ravary Inc. had sales of $20 million, up from $19 million in the third quarter of last year. This marked a 5.4% increase, due primarily to internal growth and, for the last four weeks, to sales generated by the company's Centre de rénovation le Géant, which it acquired in June 1999. The company posted net earnings of $832,645, down from $989,420 a year earlier. The decline was attributed primarily to higher transportation costs, as well as to the increase in interest and depreciation expenses resulting from last year's expansion. Canada's largest Sears department store opened last week at Edmonton's Southgate Centre mall. The former Eaton's location was acquired by Sears in January 2000 and has since been transformed into a new-format Sears department store measuring 265,000-sq.ft. on three floors. The new store will replace the Heritage Mall Sears, which is half the size and will remain open until the end of the year. The Nu-Gro Corp. has announced its intention to purchase Pursell Vigoro Canada from Alabama-based Pursell Industries. The deal will add about $20 million to Nu-Gro's sales and is expected to close sometime this fall. A joint venture by North Central Plastics and Daniel Loewith has resulted in the creation of Red Snap'R of Canada. The new company will market North Central's line of Red Snap'R fencing and fencing accessories for the farm and hardware markets. Home Depot Inc. was believed to be among the companies rumoured last week to be interested in bidding for Kingfisher Plc, according to a Reuters report. However, the company declined to comment on the rumour (Hardlines does not care to report on rumours either, but I figured you should know what's buzzing across the Atlantic). Other groups thought to be attempting a buyout or merger include French retail group Pinault Printemps-Redoute, which also denied that it was close to any merger or takeover by Kingfisher. Home Depot president Arthur Blank told me in June that the rumours at that time were unfounded. "We have not had any conversations with Castorama," he told me then. The latest rumours did manage to push Kingfisher shares up about 11%.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 37.35 18.40 19.10
Canfor 19.80 9.75 10.20
Goodfellow 12.55 8.75 9.60
Home Depot 70.00 39.37 52 15/16
Hudsons Bay 21.65 12.50 15.40
Lowe's Cos. 67.25 40.37 44 7/8
Sears Canada 42.50 30.75 34.00
Taiga Forest 14.20 6.80 8.35
West Fraser 39.50 27.00 28.00
    "… it has now been demonstrated to us by a few misguided persons just how fragile a democratic society can be." - Pierre Elliott Trudeau (1919-2000)
PEOPLE ON THE MOVE   George Ireland has been promoted to the position of general manager at Vermont American Canada. He was formerly national sales manager there. (905-564-1155) Germain Voyer has been appointed general manager, Québec region, for CanWel Distribution Ltd. A 25-year veteran of sales and marketing management, he was most recently eastern general manager for Westroc Inc. (418-878-6030) OSRAM Sylvania has made some changes in the structure of its sales organization: Michael Gentile has been promoted to vice-president sales, with responsibility for both industrial/commercial and consumer markets, as well as automotive sales and sales operations. He was formerly vice-president, sales and marketing for consumer markets … Paul Bristol, formerly vice-president, industrial/commercial sales and marketing, has been promoted to vice-president, sales and business development. (905-673-6171)  
OVERHEARD...   "The Canadian division will be a lot different in a very short time." - Eric Petersen, vice-president merchandising at Home Depot Canada, on the changes in store for the company. He was speaking at the Third Annual Hardlines Marketing Conference, held recently in Toronto.  
NOTED…   Centre magazine is rounding up nominations for its third annual "Outstanding Buyers Awards." It is also introducing a "Vendor of the Year Award." So make my friend Elena Opasini's job easier: submit your vote by going to www.centremagazine.com; or call her at 416-442-2108 for a nomination form.
Are you reading your own copy of Hardlines? Find out about our special company rates!
 
MARKET INDICATORS   The new housing price rose 0.2% from June to July, says Stats Canada. The highest monthly increase was in Ottawa-Hull (+1.9%), while increases also occurred in St. John's (+0.6%) and Kitchener-Waterloo (+0.5%). Prices nationally in July were 2.4% higher than they were in July 1999. The composite index slowed to 0.4% in August from July, according to Stats Canada. Business spending was a big source of growth, while household demand for new housing slowed. Even Ontario was down a bit, following a boost in housing a month earlier after strikes there were settled. While furniture and appliance sales were up 0.2%, sales of other durable goods remained flat. The consumer price index was down 0.2% in August from July, however, year over year, the CPI was up 2.5%. Energy prices remained the largest contributor to the increase.  
WHY HARDLINES SUPPORTS THE WOMEN'S CONSUMER PRODUCTS NETWORK   Given the growing number of women in this industry, we are delighted there is finally a forum for them to meet and exchange ideas and insights. Anyone in hardware/housewares/packaged goods or related industries would benefit from checking out this organization. September 21: "Fully Alive From 9 to 5!" Featuring author Louise LeBrun. Details coming soon. Meanwhile, check out her website at: www.partnersinrenewal.com For more information, please call: (905) 212-3826; fax: (905) 274-7646; email:wcpn99@yahoo.com, website:www.wcpncanada.org (Hardlines is proud to be a sponsor of the WCPN)  
Hardlines Marketplace   Got new products? Looking for new staff or lines? Hardlines Marketplace is read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2000 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST = $212.75) per year (GST #13987 0398 RT). (Please make cheque payable to McLarneyCom.)  
  HARDLINES™ Five years serving Canada's home improvement industry October 2, 2000 - Volume vi, #37 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * IN THIS ISSUE: * New head buyer at Tim-BR-Marts talks about partnering with vendors, the power of branding * Ace in U.S. introduces new wrinkles to its vision for its stores * Wal-Mart is newest entry into large appliances sales * Sodisco changes name of Québec show * * * * * *   HARDLINES WHO'S WHO 2000-2001 EDITION: The only annual guide to Canada's leading hardware and home improvement retailers, wholesalers, buying groups, mass merchants and co-ops. It lists more than 100 companies. Each listing features executives, product categories, sales, number of outlets, buyers, etc. No salesperson or marketing person should be without this little beauty! In fact, some of our subscribers are buying three and four copies, so the whole sales force will be armed with the right names and numbers while they're on the road. Don't be caught without it! The cost is only $125 for subscribers, or $165 for non-subscribers (+ GST/HST). Order online or call us at 416-489-3396.  
TIM-BR-MART'S NEW PURCHASING DIRECTOR:   EXCLUSIVE INTERVIEW Hardlines caught up with Randy Martin at Tim-BR-Marts Ltd. last week. He joined the Vancouver-based buying group recently to oversee purchasing for the group's 184 dealer/members, who stretch from the Lakehead to Vancouver Island. With sales by all dealers of $1.2 billion last year, Tim-BR-Marts is one of the largest buying groups in the country. It is also part of Matreco, whose combined membership represents $2.5 billion in retail sales annually. Martin has been with some of the country's leading retailers, including Totem Building Supplies and Home Depot Canada. Q: What do you see as the key objectives of your role as merchandising director for Tim-BR-Marts Ltd.? A: To continue to market quality products at competitive prices. We need to improve and enhance our advertising initiatives to sell the products and the Tim-BR-Mart brand. We need to consolidate our buying practices across Canada, to try and gain some efficiencies in cost and selection of product. Q: How is the relationship between buyer and vendor evolving? A: I think the relationship is evolving into a true partnership once both sides have committed. We both realize we have the same objectives, that is, to sell more product. The retailer is allowing the vendors to become more involved with their products at the store and in the advertising. Let's face it, the vendor is an expert in his product category and the end user is also their customer.The relationship is no longer one of intimidation. However, it requires a lot of aggressive work on both sides to develop a deal that works for both sides. They realize we have to be profitable and we also realize they need to remain profitable, or they won't be around to support our product needs in the future. Q: what are the opportunities for the Tim-BR-Mart brand as it is developed into a national entity? A: The most obvious is to gain efficiencies in our buying and marketing. We also have an opportunity in the long term to become as recognizable as some other branded retailers in our various markets. We have the vision for the future that a customer can confidently go into a Tim-BR-Mart store anywhere in Canada and expect to see similar products, services, signage and store image. We will have developed a kind of retailer that can be recognized and trusted to be able to deliver the products and services that our customer associates the with the Tim-BR-Mart brand, that is, quality home improvement products. Q: Many groups are pushing their own private label programs. What is the potential for the Tim-BR-Mart brand? A: I like the nationally branded products that have advertising campaigns behind them. These nationally branded products already have a following. There are some categories of product that do not require a strong brand, and these categories have an opportunity to be private or proprietary brands, as long as the product is top quality - the best value on the market. The old philosophy for private branding was to have the cheapest priced product, but that has changed. If you are going to own annd develop a brand of product, you want a very good value/quaity product. Q: How are Tim-BR-Mart dealers trying to differentiate from the big boxes? What are their competitive strengths? A: Tim-BR-Mart dealers have a lot of advantages over the box stores. The box stores are able to put together a great selection at a good price, but have difficulty properly executing the services side of the business - installations, deliveries, special orders, consistent service, in house charge accounts, blueprint take-offs, building packages, etc. These are all areas that a smaller independent store can excel at, particularly the consistent knowledgeable service. We can offer pricing that is very competitive when compared with the box stores - as they also need to make a profit. * * * * * * NEW ACE DÉCOR TRIES LIFESTYLE APPROACH A new signage and décor program for Ace Hardware stores was unveiled at the company's latest dealer show last week in St. Louis, MO. The white and red look has been modified to feature wood grain with black and red accents combined with signage that tries to convey a lifestyle approach to shopping. Signage will be smaller and attached to aisles, rather than hanging from the ceiling, conveying a less cluttered look. Endcaps will feature large photos of people undertaking home improvement activities. Products will be grouped by project, rather than strictly by category. The program is part of Ace's Vision 21 strategic plan for its stores. While stores in the U.S. will start adopting the new look by next spring, Ace Hardware Canada will continue to use the Ace 2000 program. Almost 100 such stores are in place here. * * * * * * WAL-MART TO START SELLING WHITE GOODS Large appliances have become the hot new category for retailers. Sears in the U.S. is that country's largest seller of white goods, followed by Lowe's. Home Depot is getting into the game and now Wal-Mart has thrown its hat into the ring. Starting this month, four Sears stores in the U.S. will sell General Electric appliances. Another eight will start selling them by year's end. Wal-Mart will showcase up to 40 GE models and make another 150 models available in its electronic kiosks.
COMPANIES IN THE NEWS   Sodisco-Howden Group has renamed its Québec dealer show PROexpo from SODexpo. The change follows the conversion of its dealers in that province to the Pro name, a change that was rolled out across Canada early last year. The show will be held in Québec City from November 4-6. For the three-month period ended July 31, 2000, Matco Ravary Inc. had sales of $20 million, up from $19 million in the third quarter of last year. This marked a 5.4% increase, due primarily to internal growth and, for the last four weeks, to sales generated by the company's Centre de rénovation le Géant, which it acquired in June 1999. The company posted net earnings of $832,645, down from $989,420 a year earlier. The decline was attributed primarily to higher transportation costs, as well as to the increase in interest and depreciation expenses resulting from last year's expansion. Canada's largest Sears department store opened last week at Edmonton's Southgate Centre mall. The former Eaton's location was acquired by Sears in January 2000 and has since been transformed into a new-format Sears department store measuring 265,000-sq.ft. on three floors. The new store will replace the Heritage Mall Sears, which is half the size and will remain open until the end of the year. The Nu-Gro Corp. has announced its intention to purchase Pursell Vigoro Canada from Alabama-based Pursell Industries. The deal will add about $20 million to Nu-Gro's sales and is expected to close sometime this fall. A joint venture by North Central Plastics and Daniel Loewith has resulted in the creation of Red Snap'R of Canada. The new company will market North Central's line of Red Snap'R fencing and fencing accessories for the farm and hardware markets. Home Depot Inc. was believed to be among the companies rumoured last week to be interested in bidding for Kingfisher Plc, according to a Reuters report. However, the company declined to comment on the rumour (Hardlines does not care to report on rumours either, but I figured you should know what's buzzing across the Atlantic). Other groups thought to be attempting a buyout or merger include French retail group Pinault Printemps-Redoute, which also denied that it was close to any merger or takeover by Kingfisher. Home Depot president Arthur Blank told me in June that the rumours at that time were unfounded. "We have not had any conversations with Castorama," he told me then. The latest rumours did manage to push Kingfisher shares up about 11%.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 37.35 18.40 19.10
Canfor 19.80 9.75 10.20
Goodfellow 12.55 8.75 9.60
Home Depot 70.00 39.37 52 15/16
Hudsons Bay 21.65 12.50 15.40
Lowe's Cos. 67.25 40.37 44 7/8
Sears Canada 42.50 30.75 34.00
Taiga Forest 14.20 6.80 8.35
West Fraser 39.50 27.00 28.00
    "… it has now been demonstrated to us by a few misguided persons just how fragile a democratic society can be." - Pierre Elliott Trudeau (1919-2000)
PEOPLE ON THE MOVE   George Ireland has been promoted to the position of general manager at Vermont American Canada. He was formerly national sales manager there. (905-564-1155) Germain Voyer has been appointed general manager, Québec region, for CanWel Distribution Ltd. A 25-year veteran of sales and marketing management, he was most recently eastern general manager for Westroc Inc. (418-878-6030) OSRAM Sylvania has made some changes in the structure of its sales organization: Michael Gentile has been promoted to vice-president sales, with responsibility for both industrial/commercial and consumer markets, as well as automotive sales and sales operations. He was formerly vice-president, sales and marketing for consumer markets … Paul Bristol, formerly vice-president, industrial/commercial sales and marketing, has been promoted to vice-president, sales and business development. (905-673-6171)  
OVERHEARD...   "The Canadian division will be a lot different in a very short time." - Eric Petersen, vice-president merchandising at Home Depot Canada, on the changes in store for the company. He was speaking at the Third Annual Hardlines Marketing Conference, held recently in Toronto.  
NOTED…   Centre magazine is rounding up nominations for its third annual "Outstanding Buyers Awards." It is also introducing a "Vendor of the Year Award." So make my friend Elena Opasini's job easier: submit your vote by going to www.centremagazine.com; or call her at 416-442-2108 for a nomination form.
Are you reading your own copy of Hardlines? Find out about our special company rates!
 
MARKET INDICATORS   The new housing price rose 0.2% from June to July, says Stats Canada. The highest monthly increase was in Ottawa-Hull (+1.9%), while increases also occurred in St. John's (+0.6%) and Kitchener-Waterloo (+0.5%). Prices nationally in July were 2.4% higher than they were in July 1999. The composite index slowed to 0.4% in August from July, according to Stats Canada. Business spending was a big source of growth, while household demand for new housing slowed. Even Ontario was down a bit, following a boost in housing a month earlier after strikes there were settled. While furniture and appliance sales were up 0.2%, sales of other durable goods remained flat. The consumer price index was down 0.2% in August from July, however, year over year, the CPI was up 2.5%. Energy prices remained the largest contributor to the increase.  
WHY HARDLINES SUPPORTS THE WOMEN'S CONSUMER PRODUCTS NETWORK   Given the growing number of women in this industry, we are delighted there is finally a forum for them to meet and exchange ideas and insights. Anyone in hardware/housewares/packaged goods or related industries would benefit from checking out this organization. September 21: "Fully Alive From 9 to 5!" Featuring author Louise LeBrun. Details coming soon. Meanwhile, check out her website at: www.partnersinrenewal.com For more information, please call: (905) 212-3826; fax: (905) 274-7646; email:wcpn99@yahoo.com, website:www.wcpncanada.org (Hardlines is proud to be a sponsor of the WCPN)  
Hardlines Marketplace   Got new products? Looking for new staff or lines? Hardlines Marketplace is read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2000 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST = $212.75) per year (GST #13987 0398 RT). (Please make cheque payable to McLarneyCom.)