Now in its ninth year, the Hardlines Conference Series is an executive-level gathering of North America’s top retailers and vendors. Besides case studies from retail’s front lines, the event features speakers who provide insights into the latest trends shaping the industry today. In fact, we’ve just signed Ira Kalish, global director with Deloitte Research‘s Los Angeles office. He’ll give his amazing overview of the emerging markets, the next wave of consolidation, the changing consumer, and the international threats to national brands.

We’ll be introducing more speakers in the weeks to come, but mark your calendar today for the Hardlines Conference Series, September 8-9, in Toronto. We’re booking up one of the hotels by the airport, so make sure you come for the Outstanding Retailer Awards Lunch, presented by Hardware Merchandising magazine on September 8, followed by the Gala Dinner that evening. For more info, call us at 416-489-3396.

During the conference, the company disclosed that it would spend $3.4 billion this year and $3.6 billion in 2005 to open 140 and 150 stores in those years, respectively. At the end of fiscal 2003, Lowe’s operated 952 stores in 45 states that generated $30.8 billion in sales.

Tillman also told the audience that he did not foresee any reduction in plywood prices, which, according to Random Length‘s benchmark price for Western 1/2-inch 4-ply sheets, were $520 per 1,000 square feet on March 26, compared to $265 for the same period a year ago. “The supply is now pretty well managed,” he said, “There’s not an oversupply. There are fewer manufacturers.”

As China’s housing market opens up, and the populace shakes off the coils of socialism, the country is becoming a big market in its own right. “China is the fastest growing large country in the world,” said Kalish. “Its economy grew by 9% last year.” However, European companies, not those from North America, are taking advantage of that emerging market. Retailers such as German-based OBI and U.K.-based B&Q have made the Far East a major growth target in the years ahead. (Ira Kalish will speak at the Hardlines Conference Series September 8-9. Click here for more info — Michael)

The 75-year-old Davidson — with 325 employees, a distribution center and a large truss plant — is one of the few remaining large independent dealers left in the United States, after nearly a decade of aggressive acquisitions by pro dealers like BFS, Stock Building Supply, Lanoga and Building Materials Holding Corp.

A recommendation, or announcement about Sodisco-Howden’s future — and possible new investors — is expected within weeks.

In the meantime, armed with the full hardware and LBM program, Wintermans says Sodisco-Howden has made significant inroads versus BMR’s new venture joint venture, Quincaillerie Matreco Hardware. In fact, he says, Sodisco-Howden is selling more hardware to AWARD members than ever before. “We’ve signed up a significant part of AWARD’s membership,” he says, many of them already investors in AWARD Distribution Ltd., QMH’s distribution arm in Atlantic Canada.

But ILDC has steadily rebuilt its ranks with the likes of Calgary-based Totem Building Supplies, J&H Builders Warehouse in Saskatoon and McMunn & Yates, which has stores in Brandon and Winnipeg, Man. The addition of Star Building Centres, with a store in Winnipeg and another in Calgary, became ILDC’s 25^th member on April 1, adding $60 million in sales and bringing the total number of stores in the buying group to 153.

ILDC ended 2003 with combined sales of $2 billion, reaffirming its position as Canada’s largest single LBM buying group. But part of the growth has come from expansion by the dealers themselves, says ILDC’s general manager, Andrew Battagliotti. Many members, such as Totem and Kent, have added stores of their own over the past year. In fact, he notes, “Most of the members have been aggressive in adding stores.”

Another signing, in mid-February, of Chouinard Brothers/Gibson Building Supplies represents something of a departure for ILDC’s membership. This company is actually two vertically integrated businesses. Chouinard Brothers is a 40-year-old roofing company, while Gibson, barely three years old, is a specialty building supplies dealer with two outlets that specializes in roofing.

Star is expanding in its own right: the smaller store in Calgary will be replaced, as approvals have just come through for the conversion of a new, larger property into another Star outlet. The old store will be closed down and the new one, in the centre of the city, will open by fall 2004, a 60,000-sq.ft. building on eight acres, that will include a truss plant and warehouse.

Groupe BMR, which serves dealers in Quebec and French-speaking communities of New Brunswick and Northern Ontario, pushed its own BMR banner.

Now, a decade later, Otto, who works closely with AWARD, is consulting with the store design specialists from the other TIM-BR Mart groups, John Irwin in Ontario and David Beck in Vancouver. “We worked up a bunch of ideas, and now we’re taking the next step,” Otto says.

That includes trying to make the stores more appealing to women, and that means bringing some of the atmosphere and texture of one’s own home right onto the retail floor. “Part of the new initiative is to bring more a home-like atmosphere into the store.”

While reluctant to disclose specifics until the overall program is finalized, Otto says an example of this approach would be making signage on softer materials, that might be reminiscent of curtains in the home. The resulting effect, of “billowing,” is one that customers will find more soothing.

And as AWARD members tap into new lines of hardware, a result of their involvement in AWARD’s new distribution arrangement with BMR, Otto faces the challenge of putting them in the stores to best advantage. “Having the product is one thing, but actually having the ability to merchandise it effectively is another.”

“With two warehouses, east and west, we’re really well poised for excellent growth,” says DiEmanuele.

SCOTTSDALE, Ariz. — ImproveNet, which provides homeowners web-enabled access to qualified remodelers, distributors, architects and other home improvement professionals, has reverted to a more conventional means of communications, by opening a call center here. Twenty full-time employees staff the center, but the company expects its to expand that to more than 100 by year’s end. The eight-year-old ImproveNet, with annual sales around $3 million, continues to look for new ways to attract more customers to its services. Last September, it struck a deal with MSN to integrate its “Find a Contractor” service into MSN’s House and Home channel.

LIVERMORE, Calif. — Activant Solutions has been chosen by Do It Best Corp. as the exclusive technology provider to its members. This means that Activant’s Eagle and Falcon systems represent the exclusively endorsed “next generation” business management systems for Do It Best’s 4,400 independent members. Activant will provide a total technology solution including software, hardware, training and support to all Do It Best members.

TORONTO — Rona Inc. will officially rename its Building Box stores in Ontario today. The six stores, part of the acquisition of Réno-Dépôt by Rona which closed last September, will all switch to Rona L’entrepôt, including the store around the corner from an existing Rona big box in Toronto’s east end area of Scarborough. Rona’s 14 Réno-Dépôt stores in the Quebec market will continue to operate under that banner.

LONDON, UK — England’s largest DIY retailers, B&Q, will share a record bonus with its 34,000-plus employees in 320 stores. The bonus, worth £34 million, is a result of the company’s record profit last year, which increased 13% to reach £372 million. The bonus is equivalent to 10% of their salary.

NEW YORK — InterTan Inc., the Canadian retail holding company which owns 980 stores under the Radio Shack, Rogers Plus and Battery Plus names, is being bought by Circuit City Stores Inc. for U.S.$284 million in cash. In its 2003 fiscal year ended June 30, InterTan had revenue of $403.1 million and net profit of $7.7 million. The number-two consumer electronics chain in the U.S. follows its rival, Best Buy, which bought up Future Shop to make its entry north of the border.

TORONTO — Sears Canada Inc. is gradually exiting the auto repair business, and has turned over 36 of its 49 auto centres to Kal Tire, President Tire and Active Green & Ross to operate starting in May 2004. These three auto service and tire providers will re-brand the Sears outlets under three separate licensing arrangements.

MONTREAL — The Ducharme family, which owns a Rona store under the Rona Le Rénovateur banner in St-Césaire, on the south shore of Montreal, decided to invest in another, smaller store under the same banner, which will open on May 11 in St-Pie-de-Bagot. The St-Césaire store will supply the other Rona stores of the district, helping the Ducharmes leverage their position in their own market.

Laurie Blackwood Pike has joined Sodisco-Howden Group as territory manager for Newfoundland and Labrador. His background in the industry includes stints as an agent repping companies such as Weyerhaeuser and MacMillan Bloedel, as well as working for Ace Hardware Canada. He reports to David Dingwell, regional sales manager, Atlantic. (709-727-5030)

David Sparks has moved over from Giles Tools Agency to Robert Bosch Tool Corp., working for the Dremel and RotoZip divisions, as national accounts manager. In this new position, he reports to Dale Elliott, national sales manager for Dremel and RotoZip … Mike Russell, formerly at Vermont American, has also joined the Dremel and RotoZip team as national accounts manager for the mass merchant accounts. (905-826-6060)

The company, which has operated in the Atlanta market since 1958 and has weathered the market’s warehouse onslaught, generated an estimated $88 million in sales last year, according to Nursery Retailer magazine.

Dèry also stresses that the off-price products that were the company’s mainstay in the early years, have become a small part of Bargain’s overall strategy today, accounting for a mere 20% of sales.

While some were simply tire kickers, others were definitely interested in what they saw, Dèry says. One New Brunswick dealer had already signed up shortly before the show, and he expects another four to sign on before the end of the year.

Customers can set up a registry — which isn’t confined to weddings — free of charge. Canadian Tire handles the gift wrapping for online orders.

In the United States, home improvement dealers have been trying to crack into the gift registry market since the late 1980s. Even Home Depot experimented with the service in the past, most recently through its Villager’s Hardware stores. But now it’s introducing customers to its first-ever online gift registry, which includes 9,000 SKUS of tools, lawn and garden equipment and other home-related merchandise appropriate for special occasions like birthdays, Father’s Day and, of course, weddings.

To encourage registration, Home Depot is offering customers a chance to win everything in their registry, up to $4,500 in value. Customers can enter the contest by creating a personal online gift registry at www.homedepot.com. In May, the dealer will choose a winner from each of three registry categories, including weddings, housewarmings and Father’s Day.

Last year, US$40 billion were spent on weddings in the U.S., US$6 billion of it on gifts bought through registries, according to Conde Nast Bridal Infobank. In Canada, CD$350 million was spent on wedding gifts alone. And maybe it’s just a coincidence, but Home Depot and Canadian Tire are entering this market segment at a time when weddings and marriage are receiving a lot of media attention, and not just because of the gay marriage flap in the U.S. “Significant Others,” a television comedy in which actors play four couples in various stages of matrimony, has become a surprise hit for the Bravo cable channel. A new online magazine, called ElegantTouchesEvents.com, which will target brides whose weddings are in the $100,000 range, is scheduled to launch in June.

TORONTO — Home Depot will open its first “urban” store in Canada when the Park Royal shopping complex opens in Vancouver, probably in October of this year. The store is part of a toney retail development that will include Canadian Tire. The new-format Home Depot will be 50,000 sq.ft., plus a 17,000-sq.ft. mezzanine, making it the first two-level outlet by Home Depot in the country.

That property will likely end up back in the hands of the city.

Now a location in Toronto’s east end, at the Gerrard Square, is one of a few that the company has set its sights on. However, until a deal is signed, no start date for the store will be announced.

An urban store in Calgary has been confirmed though, in the city’s North Hills area. It is scheduled to open before the end of this year.

Home Depot has been experimenting with smaller stores in secondary centers such as Owen Sound, Ont., Penticton, B.C., and Trois-Rivières, Que. But the “urban” concept, which is being tested in the U.S. in Brooklyn and Chicago, reduces store size even more, by eliminating large building materials and commodities and beefing up everyday domestic products like storage, cleaning and décor accessories.

Verschuren says Vancouver could support two, or even three, urban stores. As for Toronto, she notes that downtowners are anxious for a store of their own. “Just find me some real estate,” she quips.

COLOGNE, Germany — Even as it searches for ways to stay ahead of the decay that’s eating at many trade shows — both in this industry and others — the world’s largest hardware show, the Practical World/International Hardware Fair, managed to draw record numbers of people.

Koelnmesse is also looking to forge alliances with organizations worldwide.

One agreement that was somewhat unconventional was its alliance with the National Hardware Show, being held May 10-12 in Las Vegas. Typically, Koelnmesse engages in a financial arrangement with another show, either purchasing it outright or forming a joint venture. For example, PRACTICAL WORLD ASIA represents an agreement between Koelnmesse and the Chinese International Hardware Show, which will host 1,300 exhibitors in 46,000 sq.m. of floor space. More than 40,000 overseas and local trade buyers are expected to visit the show.

The organization sees further opportunity in developing markets such as Eastern Europe to acquire new trade shows.

In the case of the NHS deal, however, the arrangement is much looser, involving joint marketing, promotion and sales. Is it something Koelnmesse will continue into next year, when NHS will be on but Practical World will be in an off year? “It’s part of the contract that we see and evaluate the results of our new co-operation,” said Hans Kampen onsite at Practical World. However, he expects to continue involvement with NHS into 2005.

Practical World is also looking to more co-operation, including from organizations such as Fediyma, the Federation of DIY Manufacturers Associations in Europe. “We’ve had some discussions to move their Congress to Cologne in March [in time for the show], from Brussels,” said Kampen. This year, the Presidents Council hosted a lunch that featured Paul Hylbert, president and CEO of Lanoga Corp., and Ira Kalish, global director for research at Deloitte Services LP.

The Hardlines Industry Reception, held on the first evening of the fair, proved for the fourth year running to be a major draw for top buyers internationally. Hosted by Hardlines and sponsored by Koelnmesse, the Reception attracted senior international buyers from Do it Best Corp. and TruServ Corp., as well as buyers from companies such as Canadian Tire Corp. and Co-opérative Fédérée.

Kampen also deflected concerns that the show has been injured by the defection of the big power tool guys, led by Bosch and Black & Decker, who pulled out of this year’s show at the last minute. He pointing out that 1,900 tool companies were exhibiting this year, including a dozen leading power tool companies.

BOUCHERVILLE, QUE. — When Rona Inc. unveiled a new concept last week for its Renovateur banner, the test store was not a corporately owned “laboratory” store. It was a dealer-owned operation. Louis Turcotte is an independent who owns the newly refitted Renovateur in Boucherville, close to Rona’s head office and distribution centre.

Renovateur, which is being implemented under the Rona Home Centre banner in English-speaking Canada, has a lot of appeal to dealers as a way to improve their front end, appealing to both male and female customers with a blend of big box elements (high ceilings, warehouse-style racking toward the back of the store and in the LBM departments) with the comfort and expertise found in a traditional store.

“Now we have a solution for centres with 25,000-30,000 people, to offer a store with a high level of service combined with a larger selection of goods, all in a presentation that is similar to a big box,” says Sylvain Morissette, director of communications at Rona.

But it’s just one of the ways that Rona dealers are growing their businesses. Roy Perkins, co-owner of the Rona Home Centre in Cornwall, Ont., used the increased value of his shares to buy out his partners, increasing his stake in the business. “I was able to use the equity that I had in my shares to re-invest in my business,” Perkins says.

Lanoga had sales last year of $1.96 billion, 80% of that going to contractors, primarily home builders. These customers, says Hylbert, want reliable delivery of both products and services. “We can develop relationships with these builders, who want consistent programs.”

As a result, he notes, Lanoga’s companies own a lot of the builder business in the West and Northwest, where those stores are primarily located. Lanoga operates under the United, Spenard, Lumbermens, Home and Dixieline and banners.

However, would AHMA consider moving the show to another city? “Absolutely,” says Farrell. “We’re open to investigating other venues.”

For now, though, AHMA and Chicago will continue to work together. In fact, the show’s dates for next year, April 3-5, 2005, are being heavily promoted along with this year’s show, an obvious counter-attack to concerns that the show won’t survive its first year.

EEOC’s complaint, filed in U.S. District Court here, alleges that the retailer denied applicants a job “because of their race.” The complaint identifies Curtis Carter and Tiffany Carter among the applicants in question.

Lowe’s has consistently declined to respond to trade press requests for comment about its operations. But a company spokesperson, Chris Ahearn, said in a statement that Lowe’s has “a deep commitment to diversity,” although she did not speak directly to the EEOC suit.

EEOC stated that it filed the complaint after failing to reach a settlement with the retailer. It is seeking back pay, interest and compensatory and punitive damages on behalf of the plaintiffs.

Lowe’s has encountered similar accusations of racial bias in the past. On Aug. 28, 2003, a law firm in Florida filed discrimination complaints with EEOC on behalf of eight Afro-American employees of Lowe’s store in Winter Haven, Fla., who claimed they were passed over “many times” for promotions in favor of white employees the plaintiffs claimed were less qualified and experienced.

According to Tom Stafford, vice-president hardware and pharmacy for Zellers, “The introduction of a paint mixing service has had a huge impact on the accessories side of the business.” He adds that training staff in the paint department to use the new color-matching system has been an important part of the program rollout.

AJAX, Ont. — ILDC, the Independent Lumber Dealers Co-operative, has added a new member: Star Building Supplies in Winnipeg, Man., becomes the 25th member company in this buying group, whose members represent about $2 billion in sales through 153 stores. Star has one store in Winnipeg, with sales in 2003 of more than $40 million.

ST-LAURENT, Que. — Richelieu Hardware has signed its first U.S. retail customer. The fast-growing cabinet hardware and fastener vendor, based here, has landed an account with Westlake Ace Hardware, the largest single member of Ace Hardware Corp. Based in Kansas City, Westlake has 78 stores, 61 of which will feature Richelieu’s four-foot program of cabinet fittings and fasteners.

COTATI, Calif. — The discovery that a local home improvement dealer was helping to fund an effort to keep a Lowe’s store from opening here has led this city’s Council to request a criminal investigation into whether a local citizen’s group violated campaign disclosure laws. The Council, according to the Santa Rosa Press-Democrat, is asking the Sonoma County district attorney and the state Fair Practices Commission to look into the paperwork of this group, known as Cotati Residents Against B. Last November, Measure B passed by only 34 votes, and allowed Lowe’s store application to move forward. The Press-Democrat reported that Yardbird’s, a local dealer with 10 stores in the area, has been subsequently identified as that residents’ group’s chief financial backer prior to the vote. Yardbird’s reportedly contributed $26,000 to that group’s cause, unbeknownst to voters.

TORONTO — A new finance package from Home Depot Canada is aimed at letting homeowners spend more. The “Home Improvement Loan” is an unsecured line of credit ranging from $3,000-$30,000, that provides six months interest and payment free to purchase materials for repair and renovation projects. But after the six-month period, the account is closed to additional purchases and the customer can choose to repay the loan at anytime or assume fixed monthly payments over a seven-year term at a 15.99% fixed interest rate. The initial purchase must be a minimum of $2,000 and subsequent add-on purchases must be at least $250. There are no administration or application fees and no penalties for prepayment at anytime during the term of the loan.

BARRIE, Ont. — Building materials wholesaler Can-Save will hold its 2004 Buying Expo on June 17, 2004. Due to years of increased attendance, the show will be held off-site for the first time, moving to the Barrie Curling Club. Continuing with tradition, this year Can-Save has booked Canadian blues rocker and six-time Juno Award winner Colin James, for the live entertainment. For more information, contact: Larry Koza 705-722-7283, ext. 2223; email: lkoza@can-save.ca; or Amanda McPhee at ext. 2256; or email: amanda@can-save.ca.

Chicago — The AHMA Hardware Show reports that it was able to register hundreds of international buyers during the recent Practical World/International Hardware Fair in Cologne, Germany. In addition, a number of companies signed contracts to exhibit at the show, scheduled for April 3-5 in McCormick Place. The show announced that it has also secured the endorsement and support of the Worldwide DIY Council, which consists of about 150 manufacturers from the United States and Canada who are active exporters.

Hoffman Hills, Ill. — The chairman and CEO of Sears Roebuck, John Lacey, got a cut in his package based on disappointing results from the giant department store retailer. Although his base salary remained at a paltry $1 million, his bonus was cut in half, to a mere $1.8 million.

COLOGNE, Germany — You know, it was actually a very good show. Many attendees talked about the changes to Practical World, the International Hardware Fair. About how it’s gone from an annual event to every two years. How there are so many Asian companies exhibiting now. Or how that specialty tools show, proposed for Practical World’s off-years, was cancelled.

But the changes are good, whether they all stick or not. The main thing is that the show is making changes. Pro-active ones. By going biennial, it ensures its vitality and importance – before it declines. And sure, there were lots of Asians there, but they were also writing business, plenty of it, with Western buyers. But suppliers from France, Spain, Egypt and the U.S. saw lots of action too.

And was the traffic down? When you’re talking about upwards of 74,000 people — a 10% increase over last year — it’s hard to tell. One North American vendor said he’d seen Canadian Tire and OBI (Germany’s largest DIY retailer) already the first day.

“The challenge for us was and is to position the fair in such a way that it fulfils the requirements of the sectors involved and the changing market conditions,” said Oliver Kuhrt, executive director of Koelnmesse. “The clear increase in visitor figures … confirms that we are now on the right track.”

With the prospect of a two-year wait for the next show, 3,677 companies from 59 countries came to show off their wares at Practical World 2004.

Farrell adds that, along with the leading brands, his show has attracted the support of the buying organizations in the U.S. to attend the AHMA Hardware Show, which now has more than 500 exhibitors. “Anybody in the trade show business knows those are the two factors needed for the success of a show.”

One of the criticisms of the show, when in Chicago, was the high cost of support services. The AHMA is not the only group that has identified that services provided by union labor remain high. Mayor Richard Daley has attempted to initiate changes, even though labor relations is a state-level jurisdiction.

Nonetheless, Farrell is optimistic that changes can be made. “We are working with the city and [McCormick Place] and all organizations to address any negative factors that may exist,” he adds, noting the AHMA has already taken huge costs out of the show. Drayage, the cost of getting a company’s booth and products to its exhibit space on the show floor, was considered outrageously high by many exhibitors, due to union labor. That cost has been absorbed outright by the association, says Farrell.

“We really believe Chicago is the premier trade show venue in the country.”

The stores aim to attract both male and female DIYers, as well as a strong base of contractor business. Dedicated environments within the store are designed to suit different consumer needs. Interior decoration and renovation projects are boutiqued in dedicated sections featuring paint, moldings, lighting, decorative items and related products. Lumber and tools are among the products and services featured at the contractor counter.

“Within the next year, Rona plans to invest about $30 million in building new retail locations,” said Robert Dutton, president and CEO of Rona, in a prepared statement.

Rona will invest more than $125 million over the next few months in the construction or renovation of stores. In addition to implementing the new Rona Rénovateur program, the company will build five Rona Home and Garden big-box stores this year. They will be : in Kitchener-Waterloo and Barrie, Ont.; Regina, Sask.; Richmond, B.C., and in Calgary North. As well, two Rona Building Centres, which cater more to trades and contractors, will be constructed in Peterborough, Ont.; and Calgary, Alta.

A second store will open this Wednesday in Chicago, at the north suburban Gurnee Mills Mall. Three more will open in 2005, and “a more significant number” in 2006 and 2007.

Lacy also disclosed that the company is considering stand-alone Lands End outlets in upscale shopping malls, although he wasn’t specific about Sears’ plans. In existing stores, Sears is dropping computers from its inventory to make more room for larger, pricier televisions and a new line of DVD movies.

Lacy projected that Sears same-store sales in 2004 would be flat to mid single digits.

One of the reasons why Sears wants to start adding more stores again is to maintain its market share in appliances. Alan Lacy, its chairman, conceded that the company was in danger of sacrificing share to Depot and Lowe’s “until we’re in a position to grow our store base more rapidly.”

Some are new dealers, others are existing Home Hardware dealers who have chosen to expand their business. Don Gautreau in Moncton, N.B. will open two Furniture outlets next month. Others, such as Southpark, P.E.I., have expanded with a “store within a store” in his existing Home Hardware Building Centre.

“Dealers have the ability to do more merchandising with Home Furniture because it has more margins,” says Morgan McCabe, merchandise manager for Home Furniture. In fact, he adds, “Our dealers aren’t feeling the impact of Home Depot at all.”

The move into furniture has been a natural one for many dealers, especially those who are already in LBM. The new banner focuses on furniture, both finished and unfinished, as well as heavy appliances, which tie in with building centres that already carry kitchen cabinets.

The Naples Daily News, citing court documents, reported that Home Depot has spent between $1 billion and $2 billion on its nationwide “You Can Do It” ad campaign. Sunshine wants Home Depot to stop using that slogan in all markets, not just Florida, where the Atlanta-based dealer operates more than 120 stores.

In Northampton County, infrastructure improvements that support a Lowe’s regional distribution center there were partly funded by a $1 million block grant that county received. Apparently, the investment is paying off, as the country recently disclosed that the Lowe’s DC has hired 310 people, 198 of whom had previously held low-to-moderate income jobs.

Co-opérative Fédérée also has a 30,000-sq.ft. warehouse, plus another 100,000 sq.ft. of yard, to store lumber and building materials.

The six-year-old ServiceMagic also provides access to real estate professionals, and last October branched out providing connections to pre-screened lenders through a joint venture with Cornerstone Mortgage. ServiceMagic generated $20 million in sales last year.

LONDON, U.K. — Although sales fell 18% to 8.8 billion pounds, Kingfisher Plc, Europe’s largest home-improvement retailer, and third-largest in the world, reported a 35% increase in profits, helped by its B&Q DIY chain in the U.K., following the demerger of its consumer electronics division, Kesa Electricals. Net income rose to 229.6 million pounds ($417 million) in the fiscal year ended January 31, from 170.6 million pounds a year earlier. Kingfisher intends to focus on Europe’s $232 billion home improvement market, which is expected to grow by 20% by 2007. Growth in France is being led by almost doubling the size of its 59-store Brico Depot chain.

MONTREAL — Hardware distributor Sodisco-Howden Group reported a fourth-quarter increase in net earnings of 20%, and an increase year-over-year of 225% over the previous year. During the fourth quarter, revenues totalled $128.7 million, up 2.1% from
the same quarter in 2002. The increase was driven by Ace dealers, whose revenues primarily comprise warehouse hardware sales – Sodisco-Howden’s most profitable segment. The Ace dealers also helped drive full-year revenues to a record $485.4 million, while net earnings totalled $7.7 million.

BOISE, Idaho — Boise Cascade Corp. will sell approximately 79,000 acres of timberland
in western Louisiana for approximately $84 million. The timberlands are being bought up by the Hancock Timber Resource Group, based in Boston, Mass. The deal is expected to close by March 31, 2004. Boise continues to own or control more than two million acres in the United States, including about 610,000 acres of timberland in Louisiana.

TORONTO — Canadian Tire is unveiling today a new in-store gift registry service. The registry, already a feature on CTC’s home page, will launch next Saturday, March 27.

Garry Fairbrother will retire from Federated Cooperatives on April 30, 2004. He worked for Fedco for 35 years, including as manager – general merchandise for the past 20. (A dinner and roast in his honor will take place April 3, during the Federated Coop’s spring dealer show in Saskatoon. For more info, contact: Vaughn Crofford at the Canadian Hardware Housewares Manufacturers Association at (416-282-0022, ext. 30; or 1-800-488-4792).

TruServ Canada has promoted Ralph Dunham, formerly district manager for Northern Alberta, and a 21-year veteran of the company, to the position of regional manager, sales, operations & member relations (East). He reports to Ray Falkenberg and will relocate to TruServ’s Kitchener office. (519-893-8383)

In addition, Georgia-Pacific will enter into a five-year agreement to keep selling its manufactured structural panels, lumber and other building products to the spun-off distribution business.

The distribution division had net sales last year of $4.3 billion through 63 warehouses in the U.S. and one location in Canada. It sells some 10,000 products across 14 categories, including structural panels, hardwood plywood, roofing, insulation, metal products, lumber, paneling, vinyl siding and particleboard.

All current employees of the distribution business, including the current management team led by Charles McElrea, president — building products distribution, are expected to join the new company. Closing, which is expected to occur during the second quarter, is subject to customary conditions.

“This agreement is yet another major step forward in reducing debt and sharpening the focus of Georgia-Pacific,” said Pete Correll, Georgia-Pacific’s chairman and CEO in a prepared statement.

But knobs and pulls represent just one area of focus for the 298-store mass merchant, which is owned by Hudson’s Bay Co. It de-listed about 10% of its hardware assortments, adding back in another 1,000 or so SKUs, increasing the total hardlines department to about 5,000 items. By re-aligning assortments, says Stafford, the retailer has maintained the same footprint in its stores for the department, relying on techniques such as sliders and shorter pegs to maintain facings.

Stafford says that Zellers learned from other divisions within HBC, picking up tips especially from Home Outfitters, the fast-growing chain of housewares, bedding and seasonal stores.

“If you want a picture hanger, we’ve got it. If you want a screw — they’re all there,” Stafford notes. But you’ll no longer find a full array of items such as hammers. Instead, a few all-purpose hammers are now available. Brand names include Stanley hand tools and measuring tapes, and Black & Decker power tools.

A similar metamorphosis has occurred in the automotive department. Where once a full array of tune-up and repair items such as oil filters was available, the emphasis is now on car décor and accessories, with steering wheel covers and conversion kits for TVs exemplifying the department. “Now,” says Stafford, “you’ll find things to make life inside the care more convenient.”

The automotive department also reflects more emphasis on seasonal needs, with wiper blades and a full line of ice scrapers, while summer assortments include a new line of Coleman power washers.

Although Zellers reported a decline in its hardlines sales in the fourth quarter of 2003, home décor made gains during the period. The hardlines side, overall, says Stafford, is on the rise, unlike the softlines.

The trade magazine reports that Home Depot will provide vendors with a schedule in the third quarter of this year about when it expects suppliers in specific categories to be using UCCnet. Healy says, and about 1,000 of Home Depot’s 5,000-plus suppliers are among them.

Home Depot Canada, in line with the U.S. head office, issued a letter to suppliers last fall, demanding that its suppliers register with UCCnet’s Canadian counterpart, ECCnet, before October 15, 2003. However, so much confusion surrounded the process, and ECCnet’s role in the process, that the deadline was extended into 2004.

A major component in Home Depot’s store productivity strategy this year has been to improve the fluidity of its back-end receiving. This summer, the retailer plans to begin using wireless devices that can capture information about products as they are received at its stores. Information about returns and product movement will also be accessible to suppliers, with the goal being improved synchronization and transparency between vendors and the stores.

Product listing through a data sync registry such as UCCnet and ECCnet is much more standard for other industries, especially grocery. But suppliers are wary of benefits, and many consider the program just one more way in which streamlining of a retailer’s logistics falls on the backs — and pocketbooks — of the vendors themselves. However, Wal-Mart has determined that adoption of data sync will provide savings that reach into the billions of dollars.

Cappiello says the convention will include a 6,400-sq.ft. area for new products that can accommodate two demonstration areas. He also plays up the show’s educational program, which will include 15 “tracks” and 60 sessions. (Hardlines will participate with two sessions on key retailing perspectives internationally.)

NHS has commissioned research that’s being conducted by the Home Improvement Research Institute and will be presented at the show, which examines the extent that the sales of existing homes affect purchases of home improvement products in different categories.

“This program reflects regional needs,” says Normand Dumont, senior vice-president merchandising at Rona Inc. “Rona has the ability to give what the customer expects in each market, and paint is one area that has high brand recognition.”

Dumont, along with Pat Bennett of Rona and David Haigh, general manager — central region for Benjamin Moore, and Doug Funston, regional and marketing manager — central region, were on hand last Thursday for an official “opening” of the Signature Boutique at Rona Lansing’s Lambton store in Toronto’s west end. Situated at the back of the store, laminate hardwood has been installed on the floor, while lifestyle murals hang atop smartly faced up, consumer-friendly paint lines that represent a newly expanded palette of colors.

Farther south, however, Lowe’s has encountered some opposition to the construction of an $80-million distribution center in Plainfield, Conn. Union contractors have been staging protests outside nearby Lowe’s stores because Lowe’s general contractor is using non-union labor from out of state on that job.

Meanwhile, Home Depot opened a store on January 22 in Brattleboro, Vermont. At 65,000 sq.ft., it’s among the smallest in the chain. However, the store, the third in the state, is close to existing stores, and raising the ire of locals who are resisting the big box incursion. A fourth store in Vermont is scheduled to open in Bennington sometime in the future.

“I’m very disappointed that this has been done,” says Bob Elliott, head of the Canadian Retail Hardware Association, which owns CHS. “We all try and stay away from each other’s dates, to make a schedule that makes sense for everybody in the industry. [This overlap] makes it tougher for retailers and exhibitors who might want to go to both.”

Kimberley Clarke, the new show manager of the LBMAO’s Winter Buying Show, admits there’s a conflict, but only in the dates. CHS, she points out, is attempting more of a conference approach to its event. The dates chosen, she adds, were based largely on availability of the venue, London’s Western Fairgrounds.

“We don’t see a huge crossover in traffic. We’re targeting lumber dealers — it’s a buying show. And where there’s a crossover, retailers will come to both shows.”

Clarke replaces Peter McLean of the show management company McLean Hart as show manager. She was hired — on a contract basis — because of her industry experience, which includes sales and marketing roles at both Dimensions Retail Systems and LBMX, and her location, Clarke says. She lives in London, and has lots of contacts within that city to help her with the show from a planning perspective.

In an effort to broaden the appeal of its hardware department, Sears has added the well-known names to cater, not just to DIYers, but to professional builders and renovators. It’s also expanded the assortments in a number of categories, including drills, saws, sanders, routers and grinders.

“We have customers who are regular home owners, but we also have the Craftsman Professional series, so Craftsman spans the homeowner and the professional,” says Vincent Power, a spokesperson for Sears Canada. He adds that the appeal of Craftsman celebrity spokesperson Bob Vila increases the appeal of the Craftsman line.

COLOGNE, Germany — With the Cologne International Hardware Fair/Practical World moving to a biennial event, the owner of the show, Koelnmesse, had originally planned a specialty tools show in alternating years. Now that event, called Tools Cologne, has been cancelled, in favor of devoting more energy to the Practical World Show, which actually starts today and runs until March 17. The next instalment of the show will be in 2006.

PALM DESERT, Calif. — Although data warehousing is still considered by many as a discretionary program that’s hard to measure, Ace Hardware Corp. has managed to boost the size of retail purchases through one of its loyalty programs by $1.03 per transaction, and increased the customer response to marketing campaigns through data reuse. The company shared its successes at an IT conference by ComputerWorld that was held here recently.

ST. JACOBS, Ont. — Canada Post will issue a new 49-cent stamp on April 19 honouring the 40th anniversary of the founding of Home Hardware Stores Ltd. In 1964, 128 independent Ontario hardware retailers purchased Hollinger Hardware of St. Jacobs, Ont. This resulted in the formation of a dealer-owned hardware co-operative that has since grown today to more than 1,000 dealers and almost $4 billion in retail sales.

CALGARY & TORONTO — Shell Canada Products have made a deal to sell 10 Shell retail locations to Canadian Tire Petroleum. The gas stations will be re-branded and operated by Canadian Tire. The sites, which are located in Ontario and western Canada, are slated for physical conversion beginning in May. The purchase is part of Canadian Tire’s efforts to grow its network of gas stations through both acquisition and increased sales from existing sites.

Kingfisher has been aggressively repositioning itself in recent months, determining only to remain in markets in which it can be the number one player. That meant pulling out of countries such as Poland, and also Canada, where the Castorama unit owned 20 Réno-Dépôt big boxes. Those were subsequently sold to Rona Inc.

Kingfisher also demerged its electrical retail business last year so it could concentrate on the retail home improvement market. Since the demerger, Kingfisher has continually been plagued by rumours that it could be a target for a takeover by Home Depot, however, even Home Depot’s chief officer, Bob Nardelli, has admitted the weak dollar in relation to the pound sterling would make any such takeover highly unattractive at this time.

Weyerhaeuser’s legal woes are not over yet, though. In its statement, the company said it’s a defendant in two similar antitrust cases scheduled to go to trial on May 11 and June 1, respectively. In addition, the supplier has filed an appeal with the U.S. Court of Appeals for the Ninth Circuit in an attempt to overturn a verdict against it in another alder-related case. It took a first-quarter charge last year of $52 million for that case, according to Reuters.

With those sales spread across 450 stores and 12 component plants in 34 states, 84 Lumber is known for its smaller, contractor-oriented outlets, However, five of them managed to hit $20 million in sales in 2003. “Our associates are a determined group of people who always go above and beyond the goals and expectation set,” said Hardy-Magerko, who often cites the importance of 84’s 6,500 employees when talking about her company’s successes.

Founded by Magerko-Hardy’s father, Joe Hardy, in 1956 in this town, 84 Lumber plans to open almost 30 new stores and six component plants in the coming year.

Bob DeRodes, Home Depot’s chief technology officer, told analysts that, through mid January, 120 million purchases had been transacted through the self-service terminals, and that Depot had been able to reduce its checkout queue time during weekends by 40%.

Annette Verschuren, Home Depot Canada’s president, adds that 30% of all transactions at Home Depot stores now go through self-service checkouts, and she has been looking forward to having the technology in her own stores. “Our front end has been strong, and the reception of our cashiers has been exceptional” to the company’s Front End Accuracy & Service Transformation, a program known internally as FAST, that’s aimed at improving cashier productivity and getting shoppers out the door quicker.

“We’re trying to keep our business local,” Frank Auria, Chase-Pitkin’s vice-president merchandising, told the Syracuse Post-Standard. “We figure it’s a great partnership, us offering our customers a value proposition when purchasing a new kitchen. The next step is buying appliances. We figure to capture the appliance-buying business by turning it over to the local expert.”

A spokesperson for Chase-Pitkin told Hardlines that, while the program is available to customers at all of the dealer’s stores, it is being marketed primarily at the nine stores with kitchen design centers.

Currently, Sodisco-Howden is in a quiet period, awaiting the results of an evaluation by an international finance company, N M Rothschild, that will make recommendations on the future of the company. In the meantime, some uncertainty hangs over the fate of Sodisco-Howden.

Nevertheless, says Wintermans, dealer loyalty is strong and so are the company’s financials. “We’re up significantly in January to February. We’ve started off the year with a bang.”

Sodisco-Howden also continues to keep ties with its key customers, the LBM buying groups. In January, the company signed a major new supply agreement with Western buying group Tim-BR-Marts Ltd., and says Wintermans, the members of AWARD in Atlantic Canada who have signed on with Atlantic Distribution Ltd., based in Halifax, “are still maintaining ties with Sodisco-Howden Group.”

Sodisco-Howden owns the license to Ace Hardware in Canada, and that program has become the option of choice for Sodisco-Howden’s dealers who currently operate under the Do-it center banner. That program is being phased out, and Wintermans says most of his Do it center members are switching to Ace. “The exception is Newton Enterprises, which went with Rona, but nobody has followed Newton’s lead,” he notes. Newton is a two-store chain with a mix of DIY and pro customers about 45 minutes outside of Winnipeg. It became the first independent dealer in Western Canada to sign on with Rona.

“When you want to be a true independent, going with Rona or Home Hardware is not the way to go,” he adds.

That campaign was funded by Pacific Lumber.

In a March 2003 filing, Gallegos accused Pacific of lying to state regulators during a highly controversial land-use deal four years earlier. The deal ended up pitting environmentalists, who were trying to preserve ancient redwoods, against the producer and local workers who depend on timber harvesting for their livelihood. According to the Los Angeles Times, prosecutors contended that Pacific Lumber fraudulently harvested about $40 million worth of trees each year — on 211,000 acres supposedly protected by logging restrictions.

Pacific Lumber and its corporate parent, Houston-based Maxxam Inc., paid $8 a signature to get the recall on the ballot. The Times reported that the timber company and its contractors donated more than 80% of the money — $266,000 disclosed so far — to the marketing campaign to vote Gallegos out.

The D.A.’s supporters raised $180,000 and put together teams of volunteers to counteract the ad campaign. “This recall election wasn’t about me, it’s about a corporation trying to control politics here in Humboldt County,” said a triumphant Gallegos. “This is about a defendant getting rid of the prosecutor.”

The Asbury Park Press reported that the building’s landlord, Starwood Heller Seaview LLC, had issued Lowe’s a long-term warranty against major defects. The newspaper also reported that the township knew about the cracks last March, when the store opened.

The 123-acre landfill at one time was on the U.S. government’s Superfund list of potential hazardous waste sites. It was removed from that list in 1991. Lowe’s operates four other stores within the vicinity of its Ocean Township unit.

The show will stay in London at least one more year, but may begin moving locations after that. Other cities under consideration are Kingston, Ottawa, Peterborough, and maybe even Toronto, though out on the edge of town, near the Toronto Airport, says Campbell.

Regardless of where it ends up, suppliers appear to be supportive. “We’ll definitely be back next year,” says Covin.

In addition, the company plans to leverage its famed private brand, President’s Choice, so common on higher-end foods, in new ways. Four President’s Choice car washes are scheduled to open in 2004. “President’s Choice is the most important brand we’ve got,” he said.

SURREY, B.C. — Irly Distributors has been quietly gaining ground in Western Canada, adding six new dealers over the past two years. The latest to join, Barriere True Value in Barriere, B.C., like about half of Irly’s membership, are co-bannered with True Value. Barriere becomes the 44th shareholder in the group, which represents more than 50 stores through British Columbia, the Yukon and Alberta, and prides itself on rarely seeing a member lost to another banner.

BENTONVILLE, Ark. — Wal-Mart Stores has bought a Brazilian supermarket chain from Dutch retailer Royal Ahold NV. Bompreco, which has 118 stores. The purchase cost the world’s largest retailer $300 million and gives Wal-Mart more presence in the northeast of Brazil. The Bompreco stores raise the company’s network of outlets in Brazil to 143.

HOFFMAN ESTATES, Ill. — Sears Roebuck reported total sales for February declined about 0.5%, to $1.74 billion from $1.75 million in the year-earlier period. Same-store sales increased only 1.1% in February, although sales were strong in lawn and garden products, power tools and fitness equipment. This helped to counter sales on the apparel side, which were flat overall.

TORONTO — The Canadian Society for Training and Development each year recognizes the country’s best training programs with Ontario’s Top Training Excellence Recognition Awards. This year, the top award in the most competitive category — Best External Training Program — was awarded to Benjamin Moore & Co. for its Training Triad of courses, designed to raise standards of performance in the retail environment.

DUNCAN, B.C. — Still battling under bankruptcy protection, Doman Industries has received a stay of proceedings until April 5, 2004 from the province’s supreme court. All six of the company’s sawmills will remain in operation, at least for the short term, according to the latest report from Doman’s auditor, KPMG. However, the Port Alice pulp mill remains closed, and efforts are being made to find a buyer separate from the rest of Doman’s operations.

BALTIMORE, Md. — A shipment coming to Ace Hardware‘s distribution center in nearby Loxley had a rare boa constrictor trapped inside. No zoo wanted the two-foot-long critter, so it’s going home. The snake, which came in a shipment of pallets being returned from Ace Hardware dealers in Puerto Rico, can grow up to six feet long and belongs to an endangered species indigenous to that Caribbean island.

LONGUEUIL, Que. — Sico Inc. enjoyed stronger sales in 2003, thanks to its acquisition of Para Inc. in May 2003, along with growth in its architectural division. Sales totalled $283.6 million, compared with $257 million in the year-earlier period, an increase of 10.4%. However, profits slipped, with net earnings down to $11.2 million for fiscal 2003, compared with $12 million. For the fourth quarter, the company posted a net loss of $883,000 on sales of $58.1 million, compared with a net profit of $20,000 on sales of $48.7 million a year earlier.

Chad Murray has joined the sales team of Quest Plastics Ltd. (905-270-4438)

Black & Decker is reorganizing its executive team in an effort to sharpen the distinction between its two top brands, Black & Decker and Dewalt. Thomas D. Koos has been named group vice-president and president of the Black & Decker Consumer Group. Koos joined the company in 1999 and has served as president of Black & Decker consumer products in the U.S. since 2000 … John W. Scheich has been appointed group vice-president and president of the Dewalt Professional Group. Scheich joined Black & Decker in 1980 and had served as president of Dewalt Professional Products in the U.S. since 1999 … Ian Carter, who was most recently head of the power tools and accessories business in Europe, has been named president for Europe and Asia, which includes Australia and New Zealand … Edward J. Scanlon, previously in charge of North American commercial operations, has been named president of commercial operations for North and South America … Paul F. McBride has been appointed to the newly created post of senior vice-president for human resources and corporate initiatives. He succeeds Leonard A. Strom, the previous senior vice-president of human resources, who has retired … Christopher T. Metz has been named group vice-president and president of the hardware and home improvement group. He previously headed up the Kwikset security hardware business.

Job creation fell short of expectations in February, as the unemployment rate remained unchanged at 5.6% seasonally adjusted and the workforce increased by only 21,000 new positions. About 8.2 million people were unemployed in February.

Americans are starting to feel better about the financial situations, reflected in a rebound in consumer confidence over the past month. The AP-Ipsos consumer confidence index rose to 97.7 this week. That’s an improvement from a reading of 91.7 in early February when consumer confidence took a hit.

ATLANTA & MOORESVIILE, N.C. — The rivalry between Home Depot and Lowe’s may be raging, but both retailers continue to thrive in a U.S. market whose economic heart beats to the rhythm of home building and remodeling activities.

	Home Depot	vs. ’02	Lowe’s	vs. ‘02
Sales ($bil.)	64.82	11.2%	30.84	18.1%
Net income ($bil.)	4.30	17.5%	1.88	27.6%
Same-store growth	3.8%		6.7%
Net stores opened	175	11.4%	84	11.5%*
Employee	300,000		121,000

(* includes sell off by Lowe’s of 26 Contractor Yards)

In its fourth quarter alone, Lowe’s reported a 27.6% jump in earnings, to $407 million, on sales of $7.25 billion that rose 20.1% over the same period in 2002. Depot’s fourth-quarter net income grew 38.6% to $951 million, on sales of $15.1 billion, which represented a 14.5% increase. More importantly, Home Depot’s same-store sales in the fourth quarter — 7.6% — bested Lowe’s same-store gain — 7.3% — for the first time in several quarters.

Home Depot, which ended its fiscal year with 1,707 stores (including 102 in Canada), plans to open 175 more units in 2004, most of them in the second half of the year. Lowe’s is sticking to its plans to open 140 stores this year and 150 in 2005, despite carrying a significantly heavier debt-to-equity burden than Home Depot’s.

Lowe’s strategy seems focused on reaching a level of critical mass in as many markets as possible, with an emphasis on major markets that gives Home Depot a run for its money. Home Depot has spent $10 billion over the last three years — and will spend probably as least another $5 billion over the next three — remodeling and renovating its stores to recapture customers who may have been turned off by erosion in its stores’ appearance and customer service. The recent sell off of its Contractor Yard division to Strober indicates a stronger focus on the traditional big box format — and the DIY customer.

Home Depot now goes to market with no fewer than six store formats, and even its warehouse home centers come in different sizes that range from 66,000 to 130,000 sq.ft. Those stores now target a broader range of customers, especially homeowners who are looking for professional installation and remodeling help: last year, installed sales grew by 40% to $3 billion in products and labor, and the company projects that the installation of HVAC systems alone will exceed $250 million in 2004.

Home Depot’s strategy, abetted by its investment in technology and associate training, revolves around increasing its stores’ foot traffic and getting shoppers to spend more money in its stores. Last year, the company’s average ticket rose to $51.50 per customer, the highest in its 25-year history.

Retail sales through all stores were up 26.7% to $1.76 billion; while much of that growth was due to the addition of Réno-Dépôt, the 20-outlet chain of big boxes it bought in early September, retail sales were up 10.9% not including Réno-Dépôt. Same-store sales for the year were up 3.7%.

Rona’s net earnings for the year were $77.9 million, an increase of 80.8%; earnings jumped 31.3% year over year, the thirteenth consecutive year of annual increases.

The company ended the year on a strong note as well: consolidated net sales for the fourth quarter reached $790.7 million, up 46.4% from the same month a year earlier. Combined sales from all stores were up 73.9% in 4Q. Excluding sales from Réno-Dépôt, sales were up 7.6% and same-store sales were up 4.9%.

On the distribution side, sales through the warehouse were up 7.9% for the year and 21.2% in the fourth quarter. Distribution sales amounted to $953.7 million for the year, an increase of 0.8%. The weak rise here was due largely to lower LBM orders by dealers in the second quarter of 2003, when prices were running high.

Rona says it already realized $10 million in operations savings through synergies derived from the Réno-Dépôt purchase. By the end of this year, another $25 million in savings will be realized, for a total saving of $35 million, which will be recurring in years ahead.

With the U.S. economy showing positive signs of an upturn, home improvement retailing managed to maintain growth of almost 6% in 2003 and the industry now amounts to about $375 billion in sales. Like Canada and other countries that have experienced consolidation in recent years, a disproportionate amount of the market rests in the hands of a few large companies, most notably Home Depot, followed by its rival, Lowe’s Cos.

These two retailers dominate the DIY scene in the U.S. Home Depot has almost 1,700 stores and sales approaching $65 billion. Lowe’s, with sales of $30.8 billion generated by approximately 1,000 stores, is aggressively opening stores alongside Home Depot in major centres such as New York, Atlanta and Chicago.

Together, these two companies account for one-quarter of the U.S. retail home improvement industry.

The number-three retailer is Menard’s, a privately owned chain of 187 stores located in nine Mid-Western states. Considered the incumbent in these areas, Menard’s is bracing as more and more competitive big boxes begin opening up in its markets.

Meanwhile, the independents have remained strong, collectively increasing sales. Ace‘s net income last year increased 22.7% to $100.7 million on wholesale sales of $3.16 billion — up 4.3% over 2002, while its sales at retail top the $13-billion mark.

*stores in the U.S., Canada and Mexico. Sherwin-Williams also operates about 60 stories in other countries, whose sales are not included in its total revenue.

*Stock’s numbers are for the fiscal year ended July 31, 2003.

Last week, Menard’s opened a 225,000-sq.ft. store, which includes a drive-through lumberyard and a 25,000-sq.ft. covered seasonal area, in Lima, Ohio. For the past year, Menard’s has been growing almost exclusively using this format, which provides considerably more space to lawn and garden products and broader inventory depth in most categories.

Lowe’s is planning to open a 162,000-sq.ft. store, that would anchor a 362,000-sq.ft. retail development, in Kent, Wash., which is scheduled to open in Spring 2005, according to the Puget Sound Business Journal. Typically, Lowe’s total square footage includes lawn and garden departments that range from 22,000-30,000 sq.ft.

It remains to be seen, though, just how many super-sized warehouses of this type are in Lowe’s future. Last year, the retailer’s stores averaged 114,286 sq.ft. Next year, the company intends to open 140 stores and increase its total square footage by 14%, which would mean that the average size of its new stores in 2004 would be 108,800 square feet. In addition, Lowe’s officials have stated that a 95,000-sq.ft. format will play a big role in its future growth.

Quota still hangs like a pall over the Canadian lumber industry, as both the U.S. and Canada appear to be no closer to realizing a substantive resolution to the differences that separate both countries.

The Canadian method of leasing government-owned land to forestry companies, and charging a “stumpage fee,” has been a continual sticking point for less efficient suppliers in the U.S. attempting to compete with the sheer volume of available softwood lumber from Canada. However, says Jim Bradshaw, vice-president building products for Taiga, neither side is benefiting under the standoff, as U.S. home builders — and homeowners — feel the impact of duties placed on Canadian softwood when they get to the cash register.

“We believe the hurt has been felt on both sides of the border and its time to resolve it,” he says.

Another challenge, says Bradshaw, is the move to more direct selling, as mills try to bypass distributors such as Taiga and sell directly to the likes of Home Depot and other big customers. However, customers are inclined to turn to distributors to get value-added in the form of special packaging, proper lifts of product, correct stamping, etc. “They recognize that the best way to do that is through private distribution,” he says.

In fact, he adds, the quality demanded by the big boxes is often coming from smaller, specialized mills that really rely on distribution to get their product to the retail customer.

HALIFAX, N.S. — With a core of six or seven key categories, AWARD Distribution Ltd. has begun shipping to its dealers, only weeks after members of Tim-BR Mart Ontario began receiving hardlines from its new hardware supplier, Groupe BMR in Longueuil, Que. Although BMR is a fellow regional buying group, it has established distribution facilities of its own, including newly expanded hardware warehouse.

The groups have long been associated under the umbrella organization, Matreco. Now, not satisfied with selling only to its own members, BMR has turned to fellow members of Matreco as an alternative source of hardlines supply.

Together, three of the four Matreco members (the fourth is Tim-BR-Marts Ltd. in Vancouver) have established a new hardware company, Quincaillerie Matreco Hardware, or QMH. But rather than just have BMR ship directly to its own members, AWARD has in turn opened a warehouse of its own in nearby Bedford, under the name AWARD Distribution Ltd., or ADL. The new entity required an investment of $35,000 from more than 50 of its members, and was open for business early this year.

Beginning with between 6,000 and 7,000 core SKUs, sources say the warehouse expects to buy $5 million on hardware from the BMR warehouse, $9 million through direct ship, and another $4 million in hardlines shipped direct to the ADL warehouse.

According to Don Nash, president of Tim-BR Mart Ontario, more than 100 of his dealers have signed on — and invested — in the new distribution entity or QMH. But unlike his counterpart in Atlantic Canada, Nash is in no hurry to build a facility of his own. Rather, he’s chosen to take a wait-and-see approach, even though the potential volume is greater than ADL’s. Nash expects BMR to be able to take over the $40 million in hardware purchases currently made by Tim-BR Mart Ontario’s dealers from other sources. And, he adds, that volume has the potential to double within the next 3-5 years.

“We’ve got sufficient funding to build the warehouse whenever we choose,” says Nash. “But we’re happy to work through the BMR warehouse.”

BOUCHERVILLE, Que. — Rona Inc. has announced it will close two Rona Cashway stores, as they now overlap with Building Box stores acquired by Rona when it bought up the Réno-Dépôt chain from Kingfisher in September 2003. The stores in question, both corporately owned, are in Windsor, Ont. and Cambridge, Ont. Rona expects the business from these stores to be transferred to the nearby big boxes.

NORWALK, Conn. — The 2004 National Hardware Show has reported that 2,054 exhibitors have signed up for this year’s show in Las Vegas. The show has grown to about 451,500 sq.ft. of exhibit space at the Sands Convention Center and the adjacent Venetian Ballroom. In addition, more than 12,000 retailers and buyers have pre-registered to attend. The show will be held May 10-12. Click here for more info.

The biggest component of residential investment is new home construction, which rose 11.3% to $31.4 billion, thanks largely to big spending on new single family dwellings. This level grew 8.4% to $20.9 billion in 2003, while multiple housing construction —apartments and condos — was up 27.3% to $5.6 billion.

The renovation sector remained strong, as well, in line with a trend among dealers to rely as much on repairs and renos as on new housing. Renovations were up 11.5% to $24.6 billion from 2002, accounting for 40% of the total value of residential construction investment. Acquisition costs rose 12.1% to $5.4 billion.

Although the latest report from CMHC shows that 2004 has gotten off to a slightly slower start, it follows a record year of activity: 2003 was the busiest for starts since 1988. January’s starts reached 195,000 seasonally adjusted, down 11.4% from 219,400 starts in December, with the biggest drop coming from multiples, which were down 15.4% seasonally adjusted. Single starts were down 7.9%. However, 2004 is forecast to remain strong, with overall housing starts expected to decrease by 6.6% overall, while resales are expected to fall off from last year’s record high by 5.6%.

Verchuren says she’s seen a distinct trend among homeowners to “reward” themselves with a more pleasing living environment. What Expo offers, she adds, is more and more complimentary to the traditional stores, “in that it’s serving a customer that’s higher end, aiming at households that earn $100,000 or more.”

And even though expansion of Expo has stalled for the year ahead, Verschuren is confident that opportunities for growth exist for the chain — both in the U.S. and Canada.

Huttig has also negotiated new revolving credit terms with its lenders. Through a “lockbox” arrangement, Huttig can draw funds for general business purposes as long as the funds in the lockbox don’t dip below a monthly average of $20 million. The company also announced that, henceforth, it would report its debt as a long-term — as opposed to a current — liability.

Michael Lupo, Huttig’s CEO, projects that sales in 2004 will reach between $950 million and $975 million, despite his belief that homebuilding in the U.S. will tail off this year. The company’s growth is expected to come primarily from expansion of its product lines and value-added services, about which Lupo was not specific.

The Graves brand is probably best known among shoppers of Target, where it’s present on an innovative line of housewares products. The Michael Graves Collection that Lowe’s will sell and Delta will produce, includes a full range of kitchen, bar and bathroom faucets, as well as bathroom accessories and, via special order, a Roman-style tub. According to a statement issued by both companies, the faucets will range in price from $112 to $222.

This line extension can be seen in the larger context of Lowe’s ongoing effort to develop proprietary product lines under designer brands such as Alexander Julian.

The program, which moves space from the warehouse into retail, expands departments such as KD furniture, décor, and sports wear and work wear, and sharpens its appeal to women shoppers with more high-end kitchenwares and appliances, is now in four stores, with 13 more planned for the year ahead. The next will be an 85,000-sq.ft. outlet in Kingston, Ont., followed by Kirkland, Que. and Mississauga, Ont.

One problem of the expansion, though, is cannibalization of sales from existing stores. Foote called it a part of the growth process of the company, a part that requires constant monitoring of the impact on same-store sales for existing dealers. “We’re watching that as we move forward with the expansion.”

Foote noted that the new concept pays special attention to the needs of the female of the household, with greater emphasis on housewares, lighting and seasonal. “Lawn and garden is a very fast growing business for us,” said Foote.

However, all the bugs have yet to be worked out of the new-format stores, says Foote. “The new 20/20 format is not firing on all cylinders yet. We’ve got a few things to fix.”

Canadian Tire opened 19 new stores in 2003, bringing the total of new-concept stores to 309. It plans to open 20 more in the year ahead, including 13 Concept 20/20 stores.

So the addition of a new member to this exclusive organization would be newsworthy anytime, but the recent signing of Chouinard Brothers/Gibson Building Supplies has added significance. First of all, this company is actually two vertically integrated businesses. Chouinard Brothers is a 40-year-old roofing company, while Gibson, barely three years old, is a specialty building supplies dealer with two outlets, specializing in — you guessed it — roofing materials.

“We’re a very non-traditional member, no doubt,” admits Larry Shanks, president of Chouinard Brothers/Gibson Building Materials. He says Gibson is a contractor-driven business, and is, in fact, Chouinard’s own biggest customer. “We make ILDC even more of a major buyer on roofing,” he says.

Second, ILDC’s newest member gives that group a foothold in the Greater Toronto Market, where a void has existed since Lansing Buildall, which had eight stores throughout the GTA, was bought up by Rona Inc. in July 2001. Besides the Markham store on the north end of Toronto, which opened in 1999, another location just opened in December 2003 in Milton, to the west.

Shanks was already familiar with ILDC from his days on the other side of the negotiating table; he spent 12 years at CRC, and just before joining Chouinard Brothers he spent three years as vice-president and general manager of GAF Canada.

Gibson won’t ever become a broad-line LBM dealer, says Shanks, “but it will be a major mover of commodity products.”

Robert Dutton, president and CEO of Rona, has also hinted at the development of a new store format. Designed for markets outside of Quebec, it will replace the Rona Regional format, a “mini’ big box that has proven highly effective as a dealer-owned concept in Rona’s home province.

At around 20,000-40,000 sq.ft. in size, the format will be a cross between a big box and a convenience hardware store, Dutton says, suitable for markets not large enough to support a large-format store. It’s being tested in Quebec right now, and aimed at the repair and reno market, in place of the Regional stores in Quebec.

Flush with the signing of its first two independent dealers in Western Canada, Dutton says he wants to sign another 50 new dealers by the end of the year. “We have a lot of potential in the West and Ontario,” says Dutton.

“I can recruit 50 dealers, but I’m really tough on credit, really tough on loyalty,” he stresses. “I’m not looking for just any dealer. I want dealers who will be cutting edge, market leaders.”

Using an interactive booth to help attendees plan home improvement projects, Home Depot has put together a full-time “Home Show team,” which will work with associates in each market to staff the shows. Cities on the Home Show circuit include Calgary, Edmonton, Ottawa, Montreal and Toronto.

Using the slogan, “Stop Dreaming and Start Planning,” the Home Depot booth features vignettes of a bathroom, kitchen, workshop, and deck and provides product ideas for homeowners who can do it themselves or make use of the retailer’s professional installation service, At Home Services.

We’re also getting a lowdown on some of the buyers heading off to Cologne from this side of the pond. Home Depot is rallying its troops for the German visit, including George Murphy, merchant for fasteners and builders’ hardware, and Dwayne Goodwin vice-president merchandising for hardware. In addition, buyers from Home Depot Canada are reportedly heading over.

Canadian Tire is sending a group, under the aegis of Dean Andrey, category manager for power tool accessories and tool storage, while Home Hardware Stores is sending Don Kenesky, plumbing buyer, and Ken Friedmann, buyer for hand and power tools.

More than 70,000 visitors are expected in total at this year’s International Hardware Fair/Practical World, which will be held March 14-17. Opportunities there to meet face-to-face with key buyers will range from the traditional — meetings, chance or otherwise, in-booth — to the irreverent (watch for Canadian buyers and vendors who will gather on the steps of the Dom Cathedral at 4 p.m. on the Saturday before the show for an informal Canuck-style “pub crawl”).

New this year, Hardlines will host a “Meet the Buyers Luncheon” onsite at the Cologne Fair at noon on Monday, March 15. Sponsored by KoelnMesse, the Cologne international trade fairs organization, it will feature a group of European and U.K. buyers in search of new products and suppliers, who will be on hand to meet vendors over lunch and cocktails. Vendors from North America may pre-register for this important first-time event by contacting Nancy Wright here at the World Headquarters: 416-489-3396.

On a much more informal basis, Hardlines will sponsor another Canada Night Reception on Sunday, March 14. This one’s free, again kindly sponsored by Koelnmesse. Call us if you didn’t get your invitation!

The result is a national recruitment team that has three components. The first is a business development team to call on potential new members for all three of TruServ’s banners, namely True Value, V&S Department Stores and Country Depot. This team of “national growth managers” will be responsible for business development and retail partnerships.

The second part of TruServ’s growth initiative involves the development of a national business consulting team to drive growth and profitability of its 700-plus existing stores. This will include working in a business consulting role with existing member stores, and providing project leadership to handle new member training, new store set up and existing member renovations.

The growth in TruServ’s dealer ranks has also necessitated the beefing up of its support desk at the Winnipeg head office. (See People on the Move in this issue for appointments related to TruServ’s restructuring.)

The combined company will be known as Blue Mountain Wallcoverings, with a national accounts office in Cleveland, a factory in Quebec and a distribution center in Knoxville, Tenn. Blue Mountain will continue to make and distribute its own line of wallcovering brands, which include Sanitas, Sunworthy, Imperial, Katzenbach & Warren, and Sterling Prints. The company also distributes its collections through two divisions, Olney Wallcoverings in the U.S. and Beauport Wallcoverings in Canada. In addition, IHDG brings a number of licensing agreements to the deal.

EASTLEIGH, U.K. — Kingfisher plc, Europe’s leading home improvement retailer, saw total sales grow 13.7% to £1.6 billion during the fourth quarter ended 31st January 2004, while same-store sales increased by 4.5%.

NORWALK, Conn. — The Paint & Decorating Retailers Association has announced it will roll its annual Paint and Decorating Show into the 2004 National Hardware Show, May 10-12 at the Sands Expo and Convention Center in Las Vegas. For more than 55 years, PDRA has staged the premier trade event for paint and sundries manufacturers and retailers in the United States. It is moving from its previous March 2004 venue in Las Vegas. Now, this event will be part of the National Hardware Show, starting with May 2004.

CHICAGO — Grainger, a distributor of facilities maintenance supplies, has unveiled a new product comparison feature on its website, www.grainger.com to help customers shopping online for industrial maintenance products by allowing them to view multiple products and their attributes on one page. Grainger generated $479 million in sales through the Internet in 2003.

TORONTO — Staples Business Depot has joined a national program called Charge Up to Recycle!, which helps consumers recycle used portable rechargeable batteries at the office products retailer’s 220 stores nation-wide. The program provides disposal for used portable rechargeable batteries and for batteries commonly found in cellular and cordless phones, laptop computers, cordless power tools and camcorders. The Charge Up to Recycle! program is operated in the U.S. and Canada by the Rechargeable Battery Recycling Cooperation, a non-profit public service organization.

HOUSTON, Tex. — Wal-Mart intends to build a giant, 2-million-sq.ft. distribution center in Chambers County, which will be one of the largest import centers in the country. Sitting on more than 230 acres, the building itself will cover about 50 acres of land under one roof. Construction is slated to begin this summer.

ATLANTA — Home Depot is partnering with Maytag to become the exclusive retail partner to sell Maytag’s new SkyBox, a home beverage machine. SkyBox vendor units will be available at Home Depot stores nationwide beginning March 1. The estimated retail price of the SkyBox vendor unit is $607. Smaller than a traditional vending machine, the new device can hold 64 12-ounce cans, 32 12-ounce bottles or a combination of each, dispensed from four selection buttons. Front and side panels can be customized on the front and side panels with sports logos.

MINNEAPOLIS, Minn. — Homax Products Inc., part of Harbour Group Ltd., has been sold to Olympus Partners for more than $100 million. Homax’s home care products include Goo Gone, Homax, Oops! and Rhodes American.

A number of changes have been made at TruServ Canada, effective March 1, to accommodate newly announced restructuring there: To accomplish these initiatives, the following appointments have been made effective March 1, 2004: Janice Mundell, formerly format marketing manager for the Country Depot banner, has been promoted to national growth manager, Country Depot. She reports to Tony DiEmanuele, vice-president, business development & growth. Mundell will continue to work from TruServ’s Kitchener, Ont. office … Hugh Matson, formerly regional manager (East), has been named manager, store projects & renovations, reporting to Ray Falkenberg, vice-president, sales, operations & member relations, and based in Winnipeg … Wilf Gerhardt, formerly regional manager (West), has been appointed regional manager, sales, operations & member relations (West), also reporting to Falkenberg. (204-453-9511)

David Creglia, formerly vice-president marketing at Globe Electric, has left the company. No replacement has been named as yet.

The cold weather across the country was fingered by housing experts trying to explain January’s homebuilding freeze. For example, residential construction in New England, where the winter has been severely cold this year, was off 14% in January. The Midwest incurred an even steeper decline, at 21%.

However, housing experts still expect 2004 to be the second-best year for new and existing home sales in the country’s history, following a record-breaking 2003. A lot will depend on mortgage rate stability: the average 30-year mortgage is now 5.66%, and some economists are predicting that could increase to 6.5% by year’s end.

Rona already has two big boxes in Edmonton, and three in Calgary. According to Robert Dutton, president and CEO of Rona, the company plans to open up to six more big boxes before the end of the year, including Kitchener-Waterloo, Ont., and he hints at “more acquisitions in the year to come. Keep your ear to the ground,” he says.

Ace said that it will pay out a record $159.4 million in patronage dividends to members for purchases of products and services.

Dave Hodnik, Ace’s CEO, attributed the co-op’s financial performance to strong home sales and home improvement activity. He also noted that Ace’s strategy to strengthen its members’ market position, through merchandising, marketing and store redesign programs, was paying off.

In 2003, Ace opened 1.2 million sq.ft. of new retail selling space, which translated into 118 new stores, conversions and branch additions, according to company spokesperson Paula Erickson. In the year ahead, the co-op expects to add at least 80 stores, totaling 1.6 million sq.ft.

Donald McInlay, a five-year company veteran, was named president of Stanley’s tool group. McInlay had been running the company’s Door Systems division and also oversaw Stanley’s Consumer Sales America business. McInlay’s resumé includes stints with Newell Rubbermaid and Gibson-Homans. At Stanley, he replaces Joe DeAngelo, who is joining one of the manufacturer’s biggest customers, Home Depot, as senior vp-pro business and tool rental, two sectors that Depot has identified for future growth. DeAngelo becomes the latest alumnus of General Electric, where he worked for 17 years, to join Depot since early 2001, when Bob Nardelli — who ran GE’s Power Systems division — took over as president, chairman and CEO.

A week before McInlay’s appointment, Stanley tapped John Lundgren to replace John Trani as its chairman and CEO, effective March 1. Prior to joining Stanley, Lundgren ran Georgia-Pacific‘s $2 billion consumer products division in Europe for four years. He will expand his international pedigree at Stanley, which sells tools and hardware in 41 countries around the globe.

William Schultz, formerly president of the GP’s Dixie business, has since been promoted to president of European consumer products, replacing Lundgren. Schultz, 42, will be based at Georgia-Pacific’s European headquarters in London. (For more appointments at GP, see this issue’s “People on the Move” — Michael)

The 52-year-old Lundgren, whose resume includes stints at James River Corp., Gillette and American Can, will be taking over a company that, for the past several years, has been restructuring and downsizing its operations. Despite nearly doubling its fourth-quarter profits over the previous year’s total, Stanley still reported a 41.7% decline in net income, to $107.9 million, for fiscal 2003, on sales that rose 12.4% to $2.68 billion. During the year, Stanley’s hand tool and fastener sales were strong across all channels, but the company discontinued its entry door business, which generated another $182 million in revenue.

The year end numbers show strong performance too: net earnings were up 21.8% from $202.4 million to $246.6 million, and retail sales from all divisions — Canadian Tire, PartSource and Mark’s Work Wearhouse — cilmbed 8.7% to $7.9 billion.

For its Canadian Tire division, Canadian Tire Retail, dealer sales from all 452 stores reached $6.25 billion, up 7.0% from 5.84 billion in 2002. Sales to its dealers through the warehouse were also up 7.0%, to $4.64 billion. The company attributed the strong year-over-year sales to a number of factors, including increases in core categories such as hardware, lawn and garden, and sporting goods. In addition, the company enjoyed strong response to a number of special promotions and flyer-driven promotions throughout the year.

Same-store sales were up 9.4% in the fourth quarter, and up 4.7% year over year.

During 2003, Canadian Tire tested a new store format called Concept 20/20 stores in four markets. The concept will be further tested in 2004 as 13 more stores get retrofitted under 20/20.

The show, held last week at the Western Fair Grounds in this city about two hours west of Toronto, was put on by the Lumber and Building Materials Dealers Association of Ontario. Undoubtedly, the board of the LBMAO, including the new president, Dave Campbell, were keenly aware of the success of regional shows put on by sister associations in Western and Atlantic Canada. Those successes, coupled with the LBMAO’s dissatisfaction with a former partnership it had with the Canadian Hardware and Building Materials Show, helped push the Ontario group to go it alone.

Dealers from throughout the province came in for the show and the LBM focus was a big draw. “There are no pots and pans,” says Kim Emmerson, president of Emmerson Lumber Ltd. in Haliburton, Ont. Despite having most of his bookings for the spring in place, he says he place a number of orders — and this is where the winter timing of the show works to the dealers’ benefit. The LBMAO had a show of its own up to four years ago, but it was in November, too early for spring bookings.

Emmerson is a member of the Castle Building Centres buying group, whose members, along with those of competing group TIM-BR Mart Ontario, comprised the majority of dealers walking the show (the absence of many Home Hardware dealers was due to show’s conflict with the annual meeting for Home Hardware’s building centre dealers).

Dealers came from as far away as Kapuskasing, 1,000 kilometers (650 miles) north, and another dealer came all the way from Moosonee, on the shores of James Bay. Scott Knowles, of Kapuskasing Building Centre, says the show was a good place to do some buying. “I always like to touch base with our suppliers and we’re always looking for new things,” he says.

Delroc is part of the umbrella buying group, Reliance, and even though TruServ is not part of that group (despite what you may have read in the weekly electronic press—MM), it already has supply agreements with other Reliance members besides Delroc, namely Mississauga, Ont.-based Castle Building Centres and Sexton Group, which, like TruServ, has headquarters in Winnipeg.

Delroc is a national buying group with over 100 members across Canada representing about $350 million in retail sales. While many of them are specialty building materials dealers or gypsum supply dealers (GSD), more than half of Delroc’s membership consists of the Windsor Building Supplies chain, which operates under the banner Windsor Plywood. These stores are more retail oriented, with about 60% of their sales going to DIYers.

TruServ Canada currently supplies four Window Plywood stores, because of their geographical proximity. Three of them are in Winnipeg; a fourth is in Brandon, Man.

The company stated that while it has made improvements in its store productivity — same-store sales increased by 5.4% in December 2003 and by 2.6% in January 2004 over the same months in the previous years — it continues to be saddled with lease agreements that its president and CEO, Jack Lewis, called “uneconomical.” Lewis said that by filing Chapter 11, Garden Ridge would have time to “improve liquidity and reject uneconomical leases.”

Garden Ridge, which celebrates its 25th anniversary this year, sells a unique blend of merchandise that includes silk floral and greenery, pottery, crafts, housewares, home décor, candles, baskets, party supplies, art, frames and mirrors; home textiles, and seasonal decorations. In its court papers, the company stated that its sales for 2003 were $460.5 million. (The company did not state it sales for 2002, which Hoover’s, the business information database, estimated at $400 million.)

Over the following 45 days, Garden Ridge plans to close an undisclosed number of stores, and will enter into discussions with its landlords to renegotiate the terms of other leases. If those talks prove unsuccessful, Garden Ridge has indicated that one option would be to move stores to another location, with better lease terms in the same market.

Lewis expects the company to emerge from Chapter 11 within 90-120 days.

Over the previous eight years, Bridgeford has served in senior-level marketing, merchandising and business development positions. One of his mentors was the company’s former chairman, Robert Strickland, who regularly relied on trend analysis to guide the company’s strategic direction.

“[Bridgeford’s] ability to keep a finger on the pulse of consumer trends will continue to be invaluable to Lowe’s — and help us continue to deliver an outstanding experience for our customers — well into the future,” said Robert Tillman, Lowe’s chairman and CEO, in a prepared statement, which also pointed out that Bridgeford played a role in devising the plan that, in the late 1980s, transformed Lowe’s into a warehouse retailer.

“Record housing starts and low interest rates kept prices strong,” says G-P’s chairman and CEO, Pete Cornell. As a result, revenue from the company’s building materials manufacturing division increased 14.2% last year to $5.84 million, and the division’s operating profits jumped 194% to $379 million.

Sales from the company’s building materials distribution division — which is the largest in the U.S. — rose 13.8% to $4.31 billion, and net income from distribution increased 98% to $98 million.

For its fiscal year, G-P reported total net sales of $20.26 billion, down 12.9% from fiscal 2002. However, the company achieved a significant, positive reversal in its profitability, as its net income jumped to $254 million, versus a loss of $735 million in fiscal 2002.

Even though its business model now focuses on consumer products, G-P’s manufacturing and distribution of building products still play starring roles on its balance sheet. The company saw plywood and lumber prices increase 15% and 6% respectively, and OSB prices soar by 74%.

The year 2003 began with a procurement policy update by Home Depot, generally praising North American forestry practices. In addition, Time Inc., the world’s largest paper buyer, unveiled ambitious targets for its procurement of certified products, while another major corporation, Boise, issued an environmental statement that attracted praise from its long-time detractor, the environmental group Rainforest Action Network.

Forest Certification Watch presents its fifth conference April 1-2, 2004 in Vancouver, B.C., which will feature an exhibit area, field tour and a training workshop. For more info, click here www.CertificationWatch.org.

WICHITA, Kan. — Star Lumber, the 10-unit pro dealer based here, is donating $250,000 worth of tools and building materials to Habitat for Humanity’s resale store here. Habitat, which builds affordable housing for low-income people who participate in their homes’ construction, opened that store, called HomeMart, last October to raise funds for its home-building activities.

HOUSTON, Tex. — Canfor Corp. officially opened the world’s largest sawmill in here yesterday, a state-of-the-art facility that has the capacity to produce 600 million board feet per year. The giant sawmill is considered a hedge by the Vancouver-based company against the damaging effects of U.S. softwood lumber duties and penalties.

ITASCA, Ill. — Kitchen Distributors of America may go up for sale. It’s parent company is in Chapter 11 and KDA has been hurt by the likes of Home Depot and Lowe’s, which both enjoy extensive sales of kitchen cabinets through their installed sales programs… KDA, which has 19 showrooms in the Chicago area and another five in the Philadelphia market, is controlled by owners of Builders Plumbing & Heating Supply Co., which filed for Chapter 11 protection in bankruptcy court last December, owing creditors more than $29 million.

LONDON, U.K. — The 10^th DIY & Garden Show ended on an upbeat note, following strong attendance by buyers internationally, reports the show’s organizers. The show added a DIY Industry Forum, which featured Manfred Maus, chairman of the German DIY chain, OBI, and Ian Cheshire, CEO, international development, for Kingfisher.

LONGUEUIL, Que. — Canada’s newest hardware wholesaler, Quincaillerie Matreco Hardware, began shipping last week to Ontario customers belonging to the TIM-BR Mart Ontario buying group. TIM-BR Mart Ontario has invested in 10 trailers to handle product distribution, while logistics are being handled by Groupe BMR, which owns the warehouse that ships on behalf of QMH.

OAKVILLE, Ont. — Mutual Hardware formally welcomed the Sexton Group into its ranks at its recent annual general meeting. The group, Canada’s only buying group for hardware products, represents 26 companies in industrial and retail hardware sales.

MISSISSAUGA, Ont. — Wal-Mart Canada opened its fifth Sam’s Club warehouse operation in Canada last week, this one in London, Ont. It is the first Sam’s Club store outside the Greater Toronto Area.

At its AGM held recently, hardware buying group Mutual Hardware Inc. elected its new board of directors for 2004: Terry Derraugh of TruServ Canada has been elected chairman … John Roy of Mac-Mor Industries has been elected vice-chair … Robert Bouchard of Guillevin International, Yves Gagnon of Groupe BMR, and Claude Gingras of Cooperative Fédérée de Québec have been named to the Financial Committee … additional board members: Lawrence Divorski, Can-Cell Industries; Gordon Illes, TSC Stores; Norman Krivoshen, Federated Cooperatives; and Glenn Wood of Windsor Factory Supply. (905-826-3970)

Mette Petersen has been appointed president and managing director of Koelnmesse Inc., the North American office, based in Chicago, of Koelnmesse GmbH. She was most recently at Hanover Fairs USA. Koelnmesse owns and operates more than 40 trade shows, including the Cologne International Hardware Fair/Practical World coming up March 14-17, as well as Practical World Asia. It also has a partnership agreement with the National Hardware Show in Las Vegas, being held May 10-12.

John McGinnis has joined Storeimage, a retail décor and instore design company, based in London, Ont. McGinnis’s background includes business development at Emco and store planning and design for the AWARD buying group. He’ll be in charge of branded environments. (519-756-6185, ext. 338)

Brant Danard has been hired as service rep for box stores in the Greater Toronto Area, a newly created position at Colonial Elegance. Danard reports to Marianne Thompson, national director of sales. He was previously with Plastival as their Building Box sales rep. (1-800-361-2030)

Daniel Paré has joined Royal International Corp. as a sales manager, based in Montreal. Formerly with M-Laser Inc., he will report to Jean-François Lachance, vice-president sales and marketing. (514-735-4566) … Chris Arel, formerly president of M-Laser, will stay on with Royal International on a consultancy basis. (1-888-386-8486)

Silk Systems Inc. and its subsidiary, Dimensions Retail Systems Inc., have made some changes to its top management team: Adriano Botelho has been appointed chairman and CEO of Silk Systems and Dimensions. In his new role, he will also head up product development … Glenn Viney will assume the title of president of the two companies, taking over from Botelho. He was formerly vice-president operations for Silk Systems. Silk Systems provides business management information systems to equipment, retail, and distribution companies throughout North America. Dimensions specializes in computer software solutions for the home improvement and building materials industries. (800-731-9026)

TORONTO — For every vendor at the Canadian Hardware & Building Materials Show last week who said they wouldn’t be back, another insisted they had enjoyed a good show. But a good show nowadays is different than it was 10 years ago. For many, that good result meant having a chance to get face to face with a handful of key buyers, who in the past would have found their time being taken up chatting in the booths of the major brand suppliers. In the absence of (most of) the major brands, buyers had a chance to find new, hitherto undiscovered products, which the show has been filling its halls with since last year’s show.

The shift in emphasis may not even be all that calculated; it’s just the way the market appears to be going. Faced with rampant consolidation both in the U.S. and Canada, the big deals with the big customers are being made in those customers’ offices, and any new products are being introduced to those buyers well in advance of any wider launch at a trade show.

In addition, both shows face stiff competition from new events: CHS is up against the Winter Buying Show, put on by the Lumber and Building Materials Dealers Association of Ontario. That show ran this past weekend in London, Ont. NHS is being challenged by the AHMA Hardware Show in Chicago.

For many attending CHS in Toronto last week, the show elicited a pang of nostalgia. “I’ve been coming here for thirty years, and this brings a tear to my eye,” said one buyer.

Two things that won’t change next year, however, are the date and location. It will remain in Toronto, either in late January or early February.

In the U.S., Koelnmesse GmbH, the trade show company based in Cologne, Germany, which competes on the worldwide trade show stage with Messe Frankfurt, has forged an alliance with North America’s leading hardware show, the National Hardware Show, which will be mounted in Las Vegas this spring.

Bruce Davidson, vice-president finance for IRLY, has confirmed that there is no agreement, and that “it’s business as usual at IRLY, and we’ll continue to grow our sales and grow our membership,” he says. “I think the membership is happy — and so are the staff.”

Rex Millard of Nechako Trading Co., vice-president of the board and an IRLY dealer for 17 years, says the decision was strongly in favor of remaining independent. “I can tell you overwhelmingly that our dealers voted to remain independent,” he says.

Rona has made clear its intentions to expand aggressively in Western Canada, and the opening this spring of a new, 300,000-sq.ft. distribution center in Edmonton, Alta., is expected to support that expansion, along with a budget of some $80 million to market in the West over the next year, part of a $200-million expenditure the retailer is making in the year ahead.

“RetailSTART! offers members a comprehensive market and site analysis, and demographic research,” says Phil Koenig, national RetailSTART! manager for Do it Best. That includes project financing, inventory assistance and project management.

“In addition, retailers who take advantage of RetailSTART! can utilize incentives, such as substantial discounts and dating on new warehouse inventory,” he adds. “We’ll also provide an allowance for professional merchandising assistance and support for the new location’s grand opening.”

The reasons for the Eastern Canada focus are twofold: the True Value hardware banner is well established in the West, and especially the Prairie provinces; and the addition last year of a dedicated distribution center in Kitchener, Ont., gives the co-op wholesaler the infrastructure — and the credibility — to keep growing eastward.

Morrison says expansion will continue in Atlantic Canada, while Quebec, despite the French language differences, is also ripe for growth. TruServ has two reps serving Quebec, including one who is permanently stationed there, and the wholesaler offers full bilingual support from its DC. “We’re committed to being a Quebec retailer,” says Morrison.

Canada’s total certified area is now about double that of the U.S., where certification stagnated in 2003, registering only modest increases in SFI and FSC-certified areas. In the U.S., certification was achieved for 16 million hectares (41 million acres) by the end of the 2003.

“The supply of certified products in the U.S. seems increasingly constrained by the large share of forest products originating from non-industrial private forest lands, where certification is much harder to implement.” says Jean-Pierre Kiekens, editor of Forest Certification Watch.

The report shows the three dominant North American forest certification programs — Forest Stewardship Council, Canadian Standards Association and Sustainable Forestry Initiative — all contributed significantly to the surge in certified areas in Canada, with CSA now the predominant system in Canada.

Forest Certification Watch presents its fifth conference April 1-2, 2004 in Vancouver, B.C., which will feature an exhibit area, field tour and a training workshop. For more info, click here.

He noted that the mall market is maturing, and that a younger generation is not as inclined to shop at malls as they are to patronize big boxes or specialty retailers. The new strategy “will give this channel a new lease on life,” something, he said, “we can build without the mall ‘subsidy’.” He expects two to be launched in a test before the end of this year.

Cohen also sees an opportunity for more specialty stores, which isolate certain departments in its Sears Home store format. He said a window and flooring store will be launched, as well, that will be smaller than the Home store. He noted that Sears already owns one-third of the window treatment market in Canada.

TOLEDO, Ohio, — Owens Corning has announced it intends to unload its Vytec Vinyl Siding division in London, Ont. A part of OC’s Siding Solutions business, it’s being dumped so that the company can focus on growing its Homeside and Norandex Reynolds lines of vinyl siding and accessories instead. Vytec’s manufacturing operations, which employ 233 employees, was acquired by OC in 1997.

MISSISSAUGA, Ont. — Torlys Inc. is moving into a new 86,000-sq.ft. facility that is almost double the size of its current head office and warehouse. The move will occur sometime in April, and is expected to accommodate expansion over the next 10 years. The address is: 1900 Derry Road, Mississauga, Ont. L5S 1Y6. The new property includes a two-storey, 19th-century brick Heritage farmhouse that will be restored and redeveloped by Torlys as a training center and showroom.

MONTREAL — Royal International Corp., which supplies hand tools and hardware to major retailers in Canada, the U.S., Europe and South America, has completed the acquisition of M-Laser Inc., based in Drummondville, Que. M-Laser Inc. supplies laser level products under the brand names M-Laser and Maxall Tools.

BENTONVILLE, Ark. — Wal-Mart Stores reported net sales for January of $18.40 billion, an increase of 14.3% over the $16.12 billion a year earlier. Sales for the year were $256.026 billion, up 11.5% over $229.679 billion over the prior year. The Wal-Mart division’s sales for January were $12.131 billion, up 13.5% over sales of $10.690 billion in the similar period in the prior year. The division’s sales for fifty-two weeks of $173.579 billion were up 10.8% over the $156.702 billion in the similar period in the prior year. Sam’s Club sales reached $2.48 billion, up 10.4% over January a year earlier, while sales for the year were $34.38 billion, up 8.7% over $31.61 billion in the prior year.

formerly a buyer at Dick’s Lumber in Burnaby, B.C., has joined Surrey, B.C.-based IRLY Distributors as hardware buyer, working with Richard Tan, hardware manager. Marsh replaces Brad Olsen, who has left the company. (604-596-1551)Following a total reorganization of the company, Janet Oh has joined Globe Union Canada Inc. as director, private label business. She was formerly at News Marketing Canada. (905-907-7220)

Colleen Kelly has been appointed national marketing manager, consumer and automotive channels, at OSRAM Sylvania Canada, reporting to Stefan Popescu, vice-president, marketing. A 10-year veteran of the company, she will be responsible for the development of marketing programs for OSRAM’s consumer and automotive business in Canada … Larry Daw, merchandising planner, will now report directly to Kelly. (905-671-5582)

Enter TruServ Canada, which includes in its ranks a number of IRLY dealers who get their hardlines through the Winnipeg-based co-op wholesaler (TruServ Canada severed its ties with TruServ in the U.S. more than a year ago). TruServ’s Ray Falkenberg, recently promoted to vice-president, sales, operations & member relations (see “People on the move,” this issue), and Wilf Gerhardt, TruServ’s manager of sales and operations for Western Canada, hit the road last week to present their case for being an alternative source of hardware supply. Joining them were Ron Marchetti and Dave Morton of Castle Building Centres Group, who accompanied the TruServ team to share information on how it currently supports the LBM needs of many existing TruServ members.

“Since TruServ is one of our suppliers, it made sense for us to accompany them on this,” says Marchetti. IRLY, TruServ and Castle already share an affiliation under the umbrella buying group, Reliance.

According to Bill Morrison, president and CEO of TruServ Canada, about 10 IRLY members are also TruServ dealers, “and there are other IRLY members who have expressed interest in attending these meetings,” he adds.

“We believe we have a compelling offer on the hardware side of the business, and with Castle, a great source of supply on the LBM side,” Morrison adds. “Together, we have a great one-step solution.”

But Home Depot is not alone. Private label and proprietary brands are considered an important way to differentiate from competitors — and a way to increase margins on already competitive products. Both Orgill and Ace Hardware are committed to beefing up their private label offerings. Orgill opened a buying office in Shanghai last year, and Ace expects to have one of its own in place in the Far East by sometime later this month.

Rona Inc. has also been beefing up its private label program, which now accounts for about 10% of Rona’s total sales, and is expected to grow to as much as 15-18% in the next couple of years.

Bruce Dale, who took over as Frank’s CEO in April 2003, resigned that post suddenly last week. The beleaguered retailer, with 170 stores in 14 states, has hired a turnaround specialist, New York-based Abacus Advisors, to run the organization temporarily. Frank’s has also negotiated an amendment to its line of credit with Kimco Capital Co., which will allow the dealer to borrow up to $45 million.

Through three quarters, Frank’s reported losses of $10.5 million. It has become increasingly difficult for specialty lawn and garden dealers to compete with big box dealers such as Home Depot, Lowe’s and Wal-Mart, whose stores usually include nursery departments of 16,000-30,000 sq.ft. But Dale won kudos for shifting Frank’s merchandise mix away from ancillary products like crafts, and giving more emphasis to live goods, gifts and floral arrangements. Neither Dale nor the company offered an explanation for his sudden departure.

The Associated Press quoted Frank’s CFO, Alan Minker, as stating that the retailer plans to introduce new product lines that include patio furniture and grills to complement its lawn and garden merchandise. Minker said that merchandise accounts for 60% to 70% of the company’s sales, which through the 40 weeks ended November 2, 2003 were $248.3 million.

When the Nasdaq Small-Cap Market exchange opened on Jan. 30, Calloway’s stock was no longer listed. Nasdaq removed that stock from its listing because the retailer’s shareholder equity had fallen below the exchange’s $2.5 million requirements.

Calloway’s has stated its intention to go private, a move company officials estimate will save the chain $500,000 a year. Last fall it filed a Schedule 13-E-3 with the Securities and Exchange Commission to terminate its standing as a public company and to begin repurchasing its outstanding stock at 90 cents per share.

The 26-unit dealer, which operates under the Calloway’s, Wolfe Nursery and Cornelius Nursery banners, lost $4.8 million on $47.3 million in sales in the fiscal year that ended September 30, 2003.

So after about four months of discussions, Pound left Allroc and signed with Rona.

“We realized that this was the direction we wanted to take our business in,” says Pound. His store, which did about $2 million in sales last year, has a customer base that’s only about 30% DIY right now. He’d like to get that up to about 50%. Besides enjoying higher margins on the retail side, he sees it as a way to “break out from the competition.”

Lumber One’s conversion follows on the heels of the switch by Newton Enterprises, a two-store operation near Calgary, a week earlier, which drew attention for being the very first independent dealer west of Ontario to sign with Rona.

The latest conversion involves adding about 50% more floor space, which will make it almost 6,000 sq.ft. in size. The store will add a paint boutique, a signature department for Rona, while the seasonal department will double in size and new categories, such as a coffee bar and DIY library, will be added.

“It’s not going to even look like the same store when we’re done,” says Pound.

Zoller, an MBA whose career includes stints with a retail home improvement dealer and a plumbing distributor, plans to use the next two or three months to consider his options, including those that might take him outside of the industry.

Zoller said he would seek counsel from an executive and long-time associate whom he described as a “career guru,” but whose name he declined to provide. He noted, though, that he’s probably leaning more towards opportunities in sales and marketing, and pointed specifically to a move made by former Do-it Best colleague, Dave Davis, who is now an executive with Aubuchon Hardware, the Massachusetts-based retail chain, as the kind of career change that appealed to him. Zoller and his wife, Vicky, would also prefer to live in the southern half of the U.S.

When Zoller met with his staff on January 16 to tell them he was leaving, one of the reasons he gave, in the form of advice, was that workers, if they can, should “re-pot” themselves every decade. Zoller told Hardlines that he had been getting feelers from headhunters and other companies since last summer, and his decision to resign “came into focus” in early January. He said the co-op’s president, Bob Taylor, was “extremely considerate” in trying to find another fit for him within Do it Best. “But I had decided my next move should be outside the company.”

Through its dedicated “intranet” system, called Home Xtra, dealers are now able to make claims and process returns electronically, reducing processing times from days and weeks to instantaneously. “It’s suitable for dealing with all of our claims,” says Tony Krotz, dealer education manager of Home Hardware Stores Ltd., “and that should encourage a lot of dealers to get on the internet.”

Krotz says about 50 dealers are already on the system, as part of a beta test that actually began last fall. Home is supporting the rollout with a series of three-day seminars at each of its three distribution centers across the country, in Debert, N.S., St. Jacob’s, Ont., and Wetaskiwin, Alta. The program is being headed up by Ron Harwood, manager of Home’s credit and returns department.

Central has agreed to pay $69 million for new England Pottery, whose annual sales are around $75 million.

In a prepared statement, Glenn Novotny, Central’s CEO, said New England Pottery would be a good strategic fit with Central’s Norcal Pottery brand. New England’s founders will continue to run that company for Central, he said.

For the fiscal year ended Sept. 30, 2003, Central’s sales rose 6% to $1.15 billion, and its earnings increased 21.4% to $34.6 million. The company is projecting an increase in net income in 2004 of between 16% and 21%.

Like many parts of Canada and northern parts of the U.S., Falcon Lake has been hit by incredibly cold weather over the past week, with temperatures here reportedly the second-coldest in the world. Last Tuesday the thermometer dropped as low as -41 C (-42 degrees Fahrenheit).

“On days like this, we even give the hot chocolate away,” Nichol adds.

MEMPHIS, Tenn. — When Orgill hosts its Spring Market February 12-14, the event will be held in Orlando, Fla. for the first time since 1999. It’s also moving into a brand new one-million-sq.ft. convention center there. According to Steve East, Orgill’s director of advertising, “Tampa became too small and we took every square inch of that building. Our plan is to go back to Orlando for the next few years in the spring.”

Hoffman Estates, Ill. — Sears Roebuck earned $2.7 billion in the fourth quarter ended January 3, up from earnings of $848 million a year earlier. The results include a pre-tax charge of $791 million from early debt retirement and a pre-tax gain of $81 million from the sale of its National Tire & Battery business. Quarterly revenue rose 3.6%, while same-store sales fell 2.1%.

VANCOUVER, B.C. — After a long struggle under bankruptcy protection, Doman Industries has submitted a new restructuring plan to get out of creditor protection. That restructuring will leave the Doman family, which founded the company in 1955, without an ownership stake. Under the plan, Doman’s unsecured bondholders will convert about $750 million in debt into new equity in the revamped company. Another $250 million will be refinanced in secured notes. Existing shareholders of Doman will not get an equity stake in the restructuring.

TORONTO — Sears Canada reported net earnings for 2003 of $134.7 million, up from $52.2 million in 2002. Annual operating earnings totalled $140.9 million, compared with $138.7 million. Total revenue for the year was $6.22 billion, down from $6.5 -billion the year before. Same-store sales for the year were down 4.6%. For the quarter ended January 3, Sears had net earnings of $96.9 million, down from $134.4 million.

Glenview, Ill. — Illinois Tool Works earned $286.9 million in its fourth quarter, up from $227.9 million a year earlier. Sales rose to $2.63 billion from $2.43 billion. Revenue that was not generated through acquisitions, often referred to as organic sales, increased 0.4% after falling 2.9% in the third quarter. ITW acquired five companies during the fourth quarter, adding annual revenues of $32 million. Fourth-quarter net income increased to $283.3 million from $223.0 million.

ATLANTA — Georgia-Pacific Corp. and KoCell LLC, a wholly owned subsidiary of Koch Industries, have signed a letter of intent for Koch to acquire Georgia-Pacific’s non-integrated fluff and market pulp operations for $610 million, which includes assumption of $73 million of debt. The sale, which is subject to regulatory approvals, is expected to be finalized 1Q 2004. The estimated after-tax cash proceeds will be $535 million. Georgia-Pacific will use proceeds from the sale to repay debt.

CHICAGO — Blaming high costs, the National Restaurant Association may be the next group to pull its trade show from McCormick Place and move to another city, possibly Las Vegas. That’s where the National Hardware Show has moved for the first time this year.

With a new boss in place (former Home Outfitters general manager Bill Morrison), TruServ Canada has aggressive growth plans, which include newly expanded roles for two of its key executives. Tony DiEmanuele has been promoted to vice-president, business development and growth, leading all growth activities of the company. He will create a national growth team and develop a “National Growth” charter. He will be headquartered in TruServ’s Kitchener, Ont. office. (519-893-8383) … Ray Falkenberg has been named vice-president, sales, operations & member relations. Ray will create the national sales team, the national store support organization, and store project groups. He will be headquartered in the Winnipeg, Man. office. (204-453-9643)

Roger Detter has been appointed senior vice-president and general merchandising manager at Sears Roebuck, where he will be responsible for home fashions, hardware and paint, lawn and garden, recreation and automotive. Formerly vice-president, general merchandising manager, full line stores for Sears’ Western region, he reports to Mark Cosby, president, full line stores.