October 17, 2016 Volume xxii, #39

“The important thing is not to stop questioning.”
—Albert Einstein (German theoretical physicist, 1879-1955)

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Lowe’s ups price for RONA with new offer to buy preferred shares

MOORESVILLE, N.C. & BOUCHERVILLE, Que. — Lowe’s Cos. says it has entered into a definitive agreement for the acquisition of RONA’s outstanding Class A preferred shares for $24 per share in cash. Lowe’s will make the purchase through its wholly owned Canadian subsidiary.

The latest offer is worth $165.5 million to the holders of the 6.9 million preferred shares. The initial offer from Lowe’s for RONA, which totalled $3.2 billion, included an offer of only $20 per share for the preferred shares. Those shares at the time were valued at $25, which left a lot of those shareholders opposing the deal outright. Lowe’s says the new offer reflects the company’s desire to simplify accounting around the RONA takeover—but it also means dividends would no longer have to be paid to the preferred shareholders.

RONA’s board of directors has unanimously approved the transaction and will hold a meeting for preferred shareholders to vote on the decision sometime in November. The deal needs approval by two-thirds of the shareholders to be accepted. However, Fidelity Investments Canada, a major holder of the preferred shares, has announced it will vote in favour of the sale.

If it goes through as planned, the deal is expected to be completed before the end of the year.

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Home Hardware ranked one of Canada’s top brands

ST. JACOBS, Ont. — Home Hardware Stores Limited has once again been recognized as one of the most influential brands in the country. According to this year’s ranking by Canadian Business magazine, Home Hardware came in at number two. Sports equipment and clothing company MEC (aka Mountain Equipment Co-op) held on to the top spot for the second year in a row.

The list of Canada’s Top 25 Brands is reserved for companies that connect most with their customers. An online survey asked approximately 1,500 Canadians to provide their opinions on key aspects of a company’s reputation, including the quality of its products and services, customer service, commitment to innovation, and community involvement. A score is then given to each brand based on the results. 

“We are extremely proud to be recognized as one of Canada’s top brands,” said Terry Davis, CEO, Home Hardware Stores. “Canadians know our brand stands for exceptional customer service, quality products, and expert advice.” The dealer-owned co-op climbed in the rankings from number 12 last year.

In the category of “Product and Service Quality,” Home Hardware took first place, with a 99.6% overall brand rating.

The list included companies from all sectors of business, including WestJet (number three) and Tim Hortons (number four). In the retail home improvement sector, RONA weighed in at 21st spot, down from 18 last year. Canadian Tire was number six, climbing seven spots from number 13 last year.

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Store management lessons: leading by example

SPECIAL REPORT — For Jillian Sexton, COO of Hector Building Supplies in Pictou County, N.S., leadership is about your actions. As a young girl, she worked her way up in the family business rather than walking into a management position. And she continually works to prove her commitment simply through her presence.

“I think showing up, being there, that’s really key,” says Sexton. “If we hold a big event on the weekend, I show up too. I’m not just asking them to go in and do things. I really think that’s the secret to both your customers and your employees feeling like you’re invested.”

Susan Robinson took over Fletcher Ace in Princeton, B.C., in 2012. She moved to the small community of 2,700 from the Lower Mainland, nearly three hours away. The resource-dependent town has changed a lot since a local mine reopened, but it still faces the challenge of isolation. Princeton is at least an hour and a half away from any major centres.

Robinson’s charitable efforts in town focus on addressing those needs. She says the store contributes to about 50 to 75 charities in a year, with a focus on medical-related support, since there are only a few doctors in town.

It’s easiest for staff to get on board when their boss is passionate about their work. That kind of enthusiasm is catching. As Kim Ytsma, from Alliston Home Hardware in Alliston, Ont., says, “When you lead by example, others will follow.”

(Our full article on leadership appears in the upcoming edition of our sister publication, Hardlines Home Improvement Quarterly magazine. Free to dealers across Canada! Click here to see a recent digital edition and subscribe yourself! —Editor)

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Canadian housing starts shoot up in September

OTTAWA — Housing starts climbed in September, rising 19.8% to 220,617 units, up from 184,201 units in August. Urban starts increased by 19.7% seasonally adjusted to 201,848 units, with the biggest gains in multiple urban starts, which were up 22.3%. However, single-detached urban starts showed healthy gains, as well, increasing by 14.5%.

“Housing starts were on an upward trend in September, as residential construction increased across the country, with the exception of Ontario, where the multiples segment softened to levels that are more consistent with household formation,” said CMHC Chief Economist Bob Dugan. “Quebec saw the largest gain in housing starts due to the development of new rental apartments intended for seniors.”

In September, the seasonally adjusted annual rate of urban starts increased in British Columbia, Quebec, the Prairies, and Atlantic Canada, but decreased in Ontario.

In the Greater Toronto Area, Canada’s single largest market, housing starts dipped to 30,232 units seasonally adjusted in September, down from 40,406 units in August. The decrease was mainly a result of fewer apartment starts. “September saw fewer apartment starts in Toronto than earlier in the year, slowing the overall housing starts trend in the GTA,” said Dana Senagama, CMHC principal market analyst for the GTA.

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The Western Retail Lumber Association has chosen a new president. Liz Kovach will take over managing the WRLA, effective November 14. She will replace Gary Hamilton, current president. A native of Winnipeg, Liz has dedicated the past 10 years to the non-profit sector, most recently as executive director for the Manitoba Camping Association and Sunshine Fund, whose mission is to send underserved children and youth to organized summer camp. Prior to that, she held senior positions with the Heart and Stroke Foundation and Folklorama.

Vince Morency has joined TSC Stores as category business manager for tools, power equipment, hardware, and automotive. He was formerly senior category manager at Orgill Canada.

At Armstrong Flooring, COO David Schulz is leaving the company. Just six months after a split from its parent company Armstrong World Industries, Armstrong Flooring will eliminate the COO role on its executive team, effective Oct. 15. He will receive a $1.26 million severance payment, plus a pro-rated annual incentive bonus. Formerly with Procter & Gamble, Schulz joined Armstrong in 2011.

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CLASSIFIED ADS

WANTED: VENDORS INTERESTED IN INCREASING THEIR E-COMMERCE SALES

We’re seeking vendors who want to meet top North American e-Retailers. HARDLINES is hosting meetings with senior buyers at the first-ever Home Improvement eRetailer Summit.

The eRetailer Summit, October 26-28, 2016 in Fort Lauderdale, Fla., has been developed to connect home improvement manufacturers and distributors with prominent online retailers who are interested in increasing online sales of home improvement products.

The Summit will provide a forum for eRetail leaders to share their vision and objectives with a select group of vendors, who will get face time and the chance to share strategies. The intimate environment of the eRetailer Summit will help all sides work better together to optimize the Internet as a distribution channel. Click here to see the full lineup of eRetailers confirmed so far: http://eretailersummit.com/.

This is an invitation-only event that will be held at the Hilton Fort Lauderdale Beach Resort, October 26 to 28, 2016 in Fort Lauderdale, Fla. Special Introductory rates for Hardlines Subscribers. Contact Beverly Allen: 1-647-880-4589 or bev@hardlines.ca.

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