"Logic is the art of going wrong with confidence." Joseph Wood Krutch (American naturalist and author, 1893-1970)

TIM-BR MART gains Quebec foothold with new alliance

CALGARY—TIM-BR MARTS Ltd. has brought yet another buying group into its fold with the addition of Groupe Mat Plus, effective Oct. 1. I know what you're thinking: what the heck is Groupe Mat Plus? If you look on your Amazing Hardlines Buying Group Org Chart™ you won't find it. If you look in our Who's Who Directory you won't... (enough cheap plugs, already!—Editor). Brand new, Groupe Mat Plus was formed at the beginning of September by four members of the negotiating team that works with Servimat, a building supply distribution arm of CanWel that serves mainly Pro and Ace dealers in Quebec. Those four dealers — Carl Strulevich of Probex Building Supplies in Roxboro, Eric Lessard of Quincaillerie Andrˆ® Lessard in St-Georges de Beauce, Luc Grenon of Centre de renovation FDS in Jonquiere, and Bernard Hamel  — decided to spearhead a move to make the dealers more formidable by organizing them into a buying group. They had to look no further than their existing supplier for the man to helm the group. Daniel Thibault, formerly director of lumber with Servimat, is general manager of the group. Next, they began to shop for a better deal. They found it with TIM-BR MART, which is based here but has offices in Mississauga, Ont., and Bedford, N.S. Thibault's job will be to sit in on negotiations and to build membership. Presumably, he will be involved in a series of regional meetings that will begin this month with the 180 Servimat customers, confirming their commitment to be part of Mat Plus. This latest merger gives TIM-BR MART a foothold back in Quebec. That province had represented a gap in the group's coverage of the country since it split last fall with Longueuil-based Groupe BMR. Formerly, BMR and TIM-BR MART had an alliance under the umbrella buying group Matreco. TIM-BR MART now claims to surpass $2 billion in purchases annually, representing more than 550 locations across Canada.

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Quebec group's new alliance good for CanWel

MONTREAL—The announcement last week that a fledgling buying group out of Quebec has united with TIM-BR MART may mark, on one hand, the further consolidation of independent dealers within fewer, larger buying groups. But it also represents a further consolidation of building materials distributor CanWel's involvement in its customer base. The new entity, Groupe Mat Plus, actually comprises former customers of Servimat, a distribution arm of CanWel inside Quebec. The move appears mutually considered by both the dealers and the distributor: Daniel Thibault, who had served as director of lumber for Servimat, runs the new group, which claims to represent more than 180 independently owned retail stores formerly served by Servimat. Servimat's operations will be folded into Chalifour, another LBM distribution division that's also part of CanWel. By severing ties with its Pro and Ace dealers through Servimat, CanWel can fortify its role as a pure LBM distributor, a role that was blurred when it bought Sodisco-Howden Group at the end of 2004. That group already had bannered customers of its own (Ace and Pro), who competed with CanWel's own customer base, especially Home Hardware and RONA. CanWel had, in effect, bought a company that competed with its best customers. Now, CanWel leaves the banner management to its partner, TruServ Canada, under an alliance called Pro Retail Services. In addition, both TIM-BR MART and CanWel, through its CanWel, Hardware Division, are already linked by their membership in the umbrella buying group Spancan. TIM-BR MART is affiliated with SpanCan through its membership in IHDA, the Independent Hardware Dealers Association, and CanWel Hardware through its affiliation with Pro Retail Services (okay, I give up, where's that Org Chart™—Editor).

(Click on Chart to view Quarterly Report)

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Home Hardware president expects big gains in '06

ST. JACOBS, Ont.—Any slowdown being felt in the Canadian economy has yet to trickle down to the average home improvement retailer. At least, that's not the case among more than 1,000 Home Hardware dealers, says Home Hardware's vice-president and CEO, Paul Straus. Straus says sales year-to-date are up almost 9% over the same time last year. Same-store sales, an important gauge of ongoing performance, are up by almost 6%. ’ÄòWe use that as a barometer because, when you're dealer owned," he points out, "we have to find ways to help dealers grow." Even by August, when housing starts were off for yet another month, Home Hardware dealers continued to perform well, he says. "In general, across the country, even though there are some regional differences, everything is good," he says. "On the whole, they're doing well." In fact, he expects that his dealers in 2006 will be up 10% over last year. A year earlier, topline sales by Home's dealers increased by only 2.5%, reflecting the impact of tanking commodity prices in 2005. Nevertheless, that gain, albeit modest, ensured that Home Hardware held on to third place in Canada's list of top 10 home improvement retailers, behind Home Depot Canada and RONA inc.

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Lowe's again lowers 2006 earnings estimates

LANDSDOWNE, Va.—For the third time in four months, Lowe's Cos., the industry's second largest home improvement retailer, lowered its earnings-per-share forecast for fiscal 2006, citing the continued softening in buyer demand for housing as its main reason. Officials for the 1,275-unit chain, which is preparing to enter Canada for the first time, told analysts here that profit for the year through Feb. 2 would be at the low end of a previously forecast range of $2 to $2.07 per share. The Mooresville, N.C.-based retailer also projected that earnings would grow by between 10 and 14%, compared with the average estimate among analysts of 11%. Lowe's officials believe that the downturn in the housing market could last as long as 18 months. Housing is one of three factors — the other two being consumer income and employment — that Greg Bridgeford, Lowe's executive vp of business development, identified as the drivers of the home improvement industry. Lowe's admitted that it has experienced some "pullback" in its kitchen installation business. But Larry Stone, its senior executive vp of merchandising and marketing, said the company continues to gain market share in all 20 of its merchandise categories. The company also observed that consumers are still trading up to higher-priced appliances and doors. Another key trend being pursued by Lowe's is installed sales. Bridgeford said in the meeting that expansion beyond the traditional retail offering will provide more growth — and better margins. He pointed out the increasing importance of the do-it-for-me customer, vs. the DIY customer. Lowe's has identified this same trend in Canada. It expects installed sales to play a key role in its plans north of the border, where they will be offered from the get-go. Despite some market softness, Lowe's will continue to push ahead with its expansion plans. It intends to open 305 stores in 2007 and 2008, and forecasts that sales in those two years would rise by 10 -14% and 12-16% respectively. "We remain focused on strategies to drive market share, however, near-term pressures on the U.S. consumer have led to a more cautious outlook for the second half of the year," explained Robert Niblock, Lowe's chairman, president and CEO, in a prepared statement. "Despite the backdrop of declining housing turnover, elevated energy costs and difficult comparisons resulting from active 2004 and 2005 hurricane seasons, I'm confident we have the plans and people in place to ensure we continue to meet the needs of consumers and gain market share.

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Volunteer line-up reflects Home Depot president's clout

TORONTO—When Home Depot Canada president Annette Verschuren went looking for some corporate clout to support her company's grassroots playground building initiative, the results were nothing short of impressive. Fully 20 of Canada's major corporate leaders joined her last week to build a KaBOOM! playground for underprivileged kids. Executives who joined Verschuren included George Cope, president and COO, Bell Canada; Kevin Layden, president & COO, Best Buy Canada Ltd.; Jim Shepherd, president & CEO, Canfor Corp.; Lou Pagnutti, chairman & CEO, Ernst & Young; Garth Issett, vice-president, IBM Canada; Murray Taylor, Bill MacKinnon, CEO, KPMG; Phil Sorgen, president, Microsoft Canada; Kevin T. Boyce, CEO, Molson Canada; Paul Desmarais Jr., CEO, Power Corp. of Canada; and Mario Pilozzi, president, Wal-Mart Canada Corp. The CEOs are part of a newly formed Corporate Council on Volunteering, co-chaired by Verschuren and Volunteer Canada president Marlene Deboisbriand. This event kicked off the Council's first "Corporate Challenge on Volunteering", an initiative that challenges Canadian businesses to support employee volunteerism. The CEOs were accompanied by a contingent of more than 500 corporate volunteers and another 100 community residents from Toronto's Lawrence Heights. The initiative, a first for Canada, is designed to encourage businesses of all sizes to support volunteer activity within their communities.

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Will Canada become Lowe's testing ground?

TORONTO—Home Depot Canada has long served as a kind of "skunk works" for the larger U.S. organization, where new ideas were tested on a smaller scale before being rolled out — or discarded. Will Lowe's use its new Canadian division in a similar way? Take loyalty cards, for example. Even though no such beast exists in the U.S. yet, Canada just might be a good testing ground for such a product. One clue that it might is the hiring of Uwe Stueckmann as vice-president of marketing. Stueckmann's track record includes establishing the Optimum loyalty card for Shoppers Drug Mart, where he worked as vice-president customer relationship management before joining the new Canadian Lowe's team. Before joining Shoppers he worked as a senior consultant for MicroStrategy, a company that created CRM strategies for a range of companies in both the U.S. and Canada

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Kingfisher expands home handyman program

LONDON— In an effort to diversify beyond retail, Kingfisher plc is testing a new version of its "Hire a Handyman" service in two of its B&Q stores in the greater London area. The new program represents an increased range of services offered through that service. Kingfisher is already established in kitchen installations, but the latest program includes installing doors, locks, faucet and lights. If considered successful, these additional services will be rolled out to other B&Q stores in major centres throughout the U.K. One of the challenges faced by the giant home improvement retailer is the shortage in Britain of skilled labour. Kingfisher already tried earlier in the summer to bring in 2,000 skilled painters from Poland.

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