October 31, 1999 - Volume v, #44
Michael McLarney, Editor & Publisher
Ph: 416-489-3396 Fx: 416-489-6154

November 5, 1999

REMEMBER &endash; THE HARDLINES WHO'S WHO DIRECTORY OF CANADIAN RETAILERS, BUYING GROUPS, MASS MERCHANTS AND WHOLESALERS IS NOW AVAILABLE!

* * * * * * *

The purchase of Beaver Lumber by Home Hardware Stores Ltd. was given government approval and the deal is now finalized. As previously reported in Hardlines, Eric Konecsni is in charge of Beaver, reporting directly to Home's vice-president and CEO, Paul Straus... I was at the RONA Show in Montreal on Monday, as well. This company has VERY aggressive expansion plans, including 250 stores in Ontario by 2002. Find out more about both these stories in this weekend's edition of Hardlines the electronic newsletter.

Cheers,

Michael

* * * * * * *

REMEMBER - THE HARDLINES WHO'S WHO DIRECTORY OF CANADIAN RETAILERS, BUYING GROUPS, MASS MERCHANTS AND WHOLESALERS IS NOW AVAILABLE!

ACE REAFFIRMS CANADIAN COMMITMENT WITH FIRST SHOW

"Discover Ace" was the theme of Ace Hardware Canada's first dealer show, held October 24 in Toronto. The show, which attracted over 900 people, many of them Homecare and AWARD dealers,was a chance for Ace to introduce four new merchandising departments to its dealers. The categories, paint, electrical, plumbing and hand and power tools, were developed by Ace in the U.S. and were featured here in a turnkey merchandising environment.

The show was also an opportunity for Ace to try and dispel rumours of its future in this country since its largest customer has been bought by its largest competitor. "Ace is here to stay," said Paul Ingevaldson, vice-president, corporate strategy and international business, for Ace in the U.S.

With the pending sale of Beaver Lumber to Home Hardware Stores, Ace will lose an estimated $100 million in sales, still well over half its business here. Ace's agreement ends June 2000. But Ace never counted on the Beaver deal lasting more than five years, Ingevaldson said. Ace Canada now ships to more than 500 stores weekly and has 80 bannered Ace dealers.

* * * * * * *

CASHWAY BUYS UP CO-OP'S DO-IT STORES

With its latest acquisition, Cashway Building Centres has gained access to a pocket of central southwestern Ontario previously underserved. Hensall District Co-operative Inc. has sold off five of its Do-it Center stores to Cashway to focus on the agri-business and petroleum side of its business. The stores are located in Exeter, Zurich, Seaforth, Ilderton and Forest. Hensall will hold on to the Parkhill Do-it Center until it can be sold off too. Do-it sales account for about $20 million of Hensall's overall sales of $140 million. The acquisition will bring Cashway's store count up to 66.

* * * * * * *

HOMECARE LAUNCHES NEW CREDIT CARD PROGRAM

Homecare Building Centres has extended its adoption of the Tim-BR Mart brand to a new credit card program. Users of the existing Homecare consumer card will be converted automatically to its "Preferred Customer" card, while a brand new card has been added for contractors called "Professional Advantage."

The cards, supplied by Hamilton Discount, will roll out December 1, with a promotional push backed by flyer and POP support in the Spring of 2000.

Canadian Tire Corp. had third quarter consolidated earnings before tax of $82.2 million, up 10.8% from $74.2 million a year earlier. Consolidated net earnings for the quarter were up 5.2% from $49.9 million to a record $52.5 million. Associate dealers' third quarter retail sales were up 5.3% over the same quarter in 1998. Third quarter same-store sales were up 0.5%. For the first nine months of 1999, retail sales were up 6.7% over 1998. Same-store sales in the first nine months were up 2.3% over last year.

MacMillan Bloedel shareholders approved the proposed acquisition by Weyerhaeuser, paving the way for final court approval of the deal, which occurred October 29.

Home Depot Canada opened its fourth Edmonton store last week. A fifth store, in the east end, is scheduled for early next year.

RONA Inc. has opened a 46,000-sq.ft. Rénovateur store in Atholville, N.B. It features a 21,000-sq.ft. indoor drive-through and a 50,000-sq.ft. outdoor lumberyard. The new store carries almost 30,000 SKUs and represents a $5 million investment. The dealer-owner is Rhéal Lagacé.

Hudson Bay Co. has unveiled a plan to remodel its downtown Toronto store and eliminate discounting, although markdowns will still be available in suburban mall stores. CEO George Heller said the retailer was changing its image "from reliable to desirable."

Home Depot in the U.S. is using a new wood purchasing policy to phase in certified wood and wood products derived from responsibly managed forests. The company has awarded commendations to J.D. Irving and Columbia Forest Products for leadership in gaining independent certification. (I guess those displaced Trappist monks don't count! &endash; M. M.) Certification is provided by the Oaxaca, Mex.-based Forest Stewardship Council. Over the next three years, Home Depot intends to stop selling wood products from environmentally sensitive areas.

Camar Publications, which publishes Canadian Home Workshop, Canadian Gardener and Outdoor Canada, has changed its name to Avid Media Inc.

Ivanhoe Inc., a Canadian property management firm, will buy the Eaton's store in downtown Montréal for $34 million. The art deco-style building occupies more than a million square feet. Possible tenants include Sears, continuing the Eaton's banner, and Ailes de la Mode.

Sears in the U.S. plans to open 15 home decorating and remodeling stores over the next 18 months. Called The Great Indoors, the first store is in Denver, Colo., and a second 133,000-sq.ft. store will open in Scottsdale, Ariz., on November 4. The next four locations will be near Dallas and Denver, and two stores are planned for suburban Detroit. A total of 150 outlets in 40 U.S. markets are planned. The Great Indoors has more than 50,000 SKUs, including lamps, rugs and appliances, and features 75 room layouts plus design consultants, classes on home improvement, cafés and a resource library with decorating books and magazines.

CANADIAN STOCK WATCH

COMPANY	52-WEEK HIGH	52-WEEK LOW	CLOSE (FRI.)
Canadian Tire	46.00	29.00	35.70
Canfor	13.30	4.25	11.95
Goodfellow	11.80	6.00	11.20
Hudsons Bay	23.85	4.00	19.75
MacMillan Blo.	27.85	12.05	22.90
Sears Canada	34.35	15.25	32.95
Taiga Forest	14.75	8.65	13.85
West Fraser	41.00	9.05	32.00

"Ask yourself whether you are happy, and you cease to be so."
-John Stuart Mill (1806-1873)

PEOPLE ON THE MOVE

Jacqueline Burlock has joined the sales and marketing team at Broan-NuTone Canada Ltd. She was formerly in the same role at Karcher Canada and Nilfik-Advance. She reports to the two sales vice-presidents, Cec Norman and Scott Stevens. (905-670-2500, ext. 263)

- "We realize there is a lot of emotion and history that is part of this transaction. But we believe this merger creates a growth company that will provide our people and communities with a future that is full of opportunities. Weyerhaeuser is a company that is as committed to safety, the environment and community values as we are." - Tom Stephens, president and CEO of MacMillan Bloedel, on the finalization of the selling off of one of British Columbia's largest employers to a U.S. company.

- "Three years ago, everyone waited for Sodisco-Howden to go out of business and then move in and pick up the pieces. Now we seem to be the only stable environment out there." &emdash; Tony Molluso, president and CEO of Sodisco-Howden Group, to dealers and vendors at the recent Howden market in Toronto.

Housing starts should hit 146,500 units this year and 153,200 in 2000, compared with 137,439 in 1998, according to CMHC's fourth quarter Housing Outlook report. Home building will become much more active in Ontario while starts will benefit from a resilient economy, strong job creation, and rising in-migration. This performance will continue into 2000.

Increased starts, forecast for the Atlantic region in 1999, reflect the positive effects of numerous megaprojects. Starts will slow in 2000 as megaproject spending winds down in Nova Scotia. Housing starts will rise in Québec where steady economic growth and increasing employment in high-technology sectors will support more home construction through 2000. In Alberta, falling net migration from recent record levels and lingering concerns over job security will mean fewer housing starts this year and next. Although activity will slow in Alberta, construction will remain at relatively high levels in all three Prairie provinces this year and in 2000. Reduced consumer confidence and lower interest from offshore home buyers will reduce housing starts in British Columbia this year. Recovery in the forest sector, tighter resale markets, and stronger migration should trigger more housing construction in 2000, but starts will remain substantially below the average.

Sustained employment gains and low interest rates will continue to support the resale market. Sales of existing homes should reach record levels, rising to 333,300 this year and 340,600 in 2000. Solid average price growth nationally will reflect increased sales in the higher-priced B.C. and Ontario markets.

* * * * * * *

HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: hardline@terraport.net © 1999 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. 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.

October 31, 1999 - Volume v, #44
Michael McLarney, Editor & Publisher
Ph: 416-489-3396 Fx: 416-489-6154

November 5, 1999

REMEMBER &endash; THE HARDLINES WHO'S WHO DIRECTORY OF CANADIAN RETAILERS, BUYING GROUPS, MASS MERCHANTS AND WHOLESALERS IS NOW AVAILABLE!

* * * * * * *

The purchase of Beaver Lumber by Home Hardware Stores Ltd. was given government approval and the deal is now finalized. As previously reported in Hardlines, Eric Konecsni is in charge of Beaver, reporting directly to Home's vice-president and CEO, Paul Straus... I was at the RONA Show in Montreal on Monday, as well. This company has VERY aggressive expansion plans, including 250 stores in Ontario by 2002. Find out more about both these stories in this weekend's edition of Hardlines the electronic newsletter.

Cheers,

Michael

* * * * * * *

REMEMBER - THE HARDLINES WHO'S WHO DIRECTORY OF CANADIAN RETAILERS, BUYING GROUPS, MASS MERCHANTS AND WHOLESALERS IS NOW AVAILABLE!

ACE REAFFIRMS CANADIAN COMMITMENT WITH FIRST SHOW

"Discover Ace" was the theme of Ace Hardware Canada's first dealer show, held October 24 in Toronto. The show, which attracted over 900 people, many of them Homecare and AWARD dealers,was a chance for Ace to introduce four new merchandising departments to its dealers. The categories, paint, electrical, plumbing and hand and power tools, were developed by Ace in the U.S. and were featured here in a turnkey merchandising environment.

The show was also an opportunity for Ace to try and dispel rumours of its future in this country since its largest customer has been bought by its largest competitor. "Ace is here to stay," said Paul Ingevaldson, vice-president, corporate strategy and international business, for Ace in the U.S.

With the pending sale of Beaver Lumber to Home Hardware Stores, Ace will lose an estimated $100 million in sales, still well over half its business here. Ace's agreement ends June 2000. But Ace never counted on the Beaver deal lasting more than five years, Ingevaldson said. Ace Canada now ships to more than 500 stores weekly and has 80 bannered Ace dealers.

* * * * * * *

CASHWAY BUYS UP CO-OP'S DO-IT STORES

With its latest acquisition, Cashway Building Centres has gained access to a pocket of central southwestern Ontario previously underserved. Hensall District Co-operative Inc. has sold off five of its Do-it Center stores to Cashway to focus on the agri-business and petroleum side of its business. The stores are located in Exeter, Zurich, Seaforth, Ilderton and Forest. Hensall will hold on to the Parkhill Do-it Center until it can be sold off too. Do-it sales account for about $20 million of Hensall's overall sales of $140 million. The acquisition will bring Cashway's store count up to 66.

* * * * * * *

HOMECARE LAUNCHES NEW CREDIT CARD PROGRAM

Homecare Building Centres has extended its adoption of the Tim-BR Mart brand to a new credit card program. Users of the existing Homecare consumer card will be converted automatically to its "Preferred Customer" card, while a brand new card has been added for contractors called "Professional Advantage."

The cards, supplied by Hamilton Discount, will roll out December 1, with a promotional push backed by flyer and POP support in the Spring of 2000.

Canadian Tire Corp. had third quarter consolidated earnings before tax of $82.2 million, up 10.8% from $74.2 million a year earlier. Consolidated net earnings for the quarter were up 5.2% from $49.9 million to a record $52.5 million. Associate dealers' third quarter retail sales were up 5.3% over the same quarter in 1998. Third quarter same-store sales were up 0.5%. For the first nine months of 1999, retail sales were up 6.7% over 1998. Same-store sales in the first nine months were up 2.3% over last year.

MacMillan Bloedel shareholders approved the proposed acquisition by Weyerhaeuser, paving the way for final court approval of the deal, which occurred October 29.

Home Depot Canada opened its fourth Edmonton store last week. A fifth store, in the east end, is scheduled for early next year.

RONA Inc. has opened a 46,000-sq.ft. Rénovateur store in Atholville, N.B. It features a 21,000-sq.ft. indoor drive-through and a 50,000-sq.ft. outdoor lumberyard. The new store carries almost 30,000 SKUs and represents a $5 million investment. The dealer-owner is Rhéal Lagacé.

Hudson Bay Co. has unveiled a plan to remodel its downtown Toronto store and eliminate discounting, although markdowns will still be available in suburban mall stores. CEO George Heller said the retailer was changing its image "from reliable to desirable."

Home Depot in the U.S. is using a new wood purchasing policy to phase in certified wood and wood products derived from responsibly managed forests. The company has awarded commendations to J.D. Irving and Columbia Forest Products for leadership in gaining independent certification. (I guess those displaced Trappist monks don't count! &endash; M. M.) Certification is provided by the Oaxaca, Mex.-based Forest Stewardship Council. Over the next three years, Home Depot intends to stop selling wood products from environmentally sensitive areas.

Camar Publications, which publishes Canadian Home Workshop, Canadian Gardener and Outdoor Canada, has changed its name to Avid Media Inc.

Ivanhoe Inc., a Canadian property management firm, will buy the Eaton's store in downtown Montréal for $34 million. The art deco-style building occupies more than a million square feet. Possible tenants include Sears, continuing the Eaton's banner, and Ailes de la Mode.

Sears in the U.S. plans to open 15 home decorating and remodeling stores over the next 18 months. Called The Great Indoors, the first store is in Denver, Colo., and a second 133,000-sq.ft. store will open in Scottsdale, Ariz., on November 4. The next four locations will be near Dallas and Denver, and two stores are planned for suburban Detroit. A total of 150 outlets in 40 U.S. markets are planned. The Great Indoors has more than 50,000 SKUs, including lamps, rugs and appliances, and features 75 room layouts plus design consultants, classes on home improvement, cafés and a resource library with decorating books and magazines.

CANADIAN STOCK WATCH

COMPANY	52-WEEK HIGH	52-WEEK LOW	CLOSE (FRI.)
Canadian Tire	46.00	29.00	35.70
Canfor	13.30	4.25	11.95
Goodfellow	11.80	6.00	11.20
Hudsons Bay	23.85	4.00	19.75
MacMillan Blo.	27.85	12.05	22.90
Sears Canada	34.35	15.25	32.95
Taiga Forest	14.75	8.65	13.85
West Fraser	41.00	9.05	32.00

"Ask yourself whether you are happy, and you cease to be so."
-John Stuart Mill (1806-1873)

PEOPLE ON THE MOVE

Jacqueline Burlock has joined the sales and marketing team at Broan-NuTone Canada Ltd. She was formerly in the same role at Karcher Canada and Nilfik-Advance. She reports to the two sales vice-presidents, Cec Norman and Scott Stevens. (905-670-2500, ext. 263)

- "We realize there is a lot of emotion and history that is part of this transaction. But we believe this merger creates a growth company that will provide our people and communities with a future that is full of opportunities. Weyerhaeuser is a company that is as committed to safety, the environment and community values as we are." - Tom Stephens, president and CEO of MacMillan Bloedel, on the finalization of the selling off of one of British Columbia's largest employers to a U.S. company.

- "Three years ago, everyone waited for Sodisco-Howden to go out of business and then move in and pick up the pieces. Now we seem to be the only stable environment out there." &emdash; Tony Molluso, president and CEO of Sodisco-Howden Group, to dealers and vendors at the recent Howden market in Toronto.

Housing starts should hit 146,500 units this year and 153,200 in 2000, compared with 137,439 in 1998, according to CMHC's fourth quarter Housing Outlook report. Home building will become much more active in Ontario while starts will benefit from a resilient economy, strong job creation, and rising in-migration. This performance will continue into 2000.

Increased starts, forecast for the Atlantic region in 1999, reflect the positive effects of numerous megaprojects. Starts will slow in 2000 as megaproject spending winds down in Nova Scotia. Housing starts will rise in Québec where steady economic growth and increasing employment in high-technology sectors will support more home construction through 2000. In Alberta, falling net migration from recent record levels and lingering concerns over job security will mean fewer housing starts this year and next. Although activity will slow in Alberta, construction will remain at relatively high levels in all three Prairie provinces this year and in 2000. Reduced consumer confidence and lower interest from offshore home buyers will reduce housing starts in British Columbia this year. Recovery in the forest sector, tighter resale markets, and stronger migration should trigger more housing construction in 2000, but starts will remain substantially below the average.

Sustained employment gains and low interest rates will continue to support the resale market. Sales of existing homes should reach record levels, rising to 333,300 this year and 340,600 in 2000. Solid average price growth nationally will reflect increased sales in the higher-priced B.C. and Ontario markets.

* * * * * * *

HARDLINES the electronic newsletter. Michael McLarney, Editor & Publisher. Published weekly (except monthly in December and August) by McLARNEYCOM 283 Belsize Dr., Toronto, ON Canada M4S 1M5. 416-489-3396; fax: 416-489-6154. E-mail: hardline@terraport.net © 1999 by Michael McLarney. Reproduction in whole or in part is strictly forbidden. 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.