At that point, the company retained New York-based Bridge Associates LLC, which specializes in restructuring and turnaround management. On January 20, it filed bankruptcy, and has since replaced its credit facility with debtor-in-possession financing totaling $100 million.

Jim O’Grady, Wickes’ president and CEO, blamed his company’s financial woes primarily on past capital expenditures it has made on what he called “non-core businesses,” which he did not identify specifically, but could be referring to Wickes’ “build a home in a day” turnkey framing program that failed to muster sufficient interest among home builders. (True believers will recall that Wickes presented this revolutionary concept at the Hardlines Marketing Conference in 1999—MM.)

O’Grady said that Wickes management made the decision to file Chapter 11 “reluctantly,” but added that his team saw no other way to buy time while it worked out its debt-reduction and corporate refocusing strategies.

That year, Wickes sold 37 of its yards to Lanoga Corp. Currently, Wickes operates 52 yards and 10 component facilities.

But last November, Wickes reported that its stores had lost $18.5 million during the six months ended June 28, 2003, on sales of $228 million, which were off 23%. Through the first half of 2003, the company’s long-term debt was stuck at nearly $100 million.

Dick certainly had no shortage of options. As a member of Tim-BR-Marts, he could have signed up for that Western buying group’s own store merchandising and signage programs, and continued to get his hardware needs supplied through Sodisco-Howden. He also had the option of taking on the Ace banner and store programs — or those of TruServ Canada, Home Hardware — or even another buying group.

But by signing with Rona, Dick has caused a furor that has surprised even him. Rona continues to belie expectations of the industry, recruiting dealers in Ontario, and now Manitoba, all the while upgrading existing stores across the country.

Dick says the reason he chose Rona over other organizations had a lot to do with his desire to capture more DIY business. Although the nearest big box is in Winnipeg (where both Rona and Home Depot have warehouse-format stores), people in his town are prepared to make the 45-minute drive “to save a dollar,” as he puts it. “How do you keep them in town? You have to offer them more,” he says.

However, says Jos Wintermans, president and CEO of Sodisco-Howden, one defection, however disappointing, does not signify a trend. Of those 50-odd Sodisco-Howden customers operating under the Do-it center banner, significantly more than half of them have already converted, or agreed to convert, to the Ace banner.

“We really felt Rona had the marketing tools and the merchandising programs to take our business to the next level.” And it wasn’t just a matter of price, Dick adds, “but a total package that they were able to work with us on.”

Depot officials recently told analysts and investors that a big part of that effort will be the expansion of its proprietary and exclusive brands, which currently account for 17% of its stores’ product mix. The success of its supply agreement with John Deere Co. — in 2003, Home Depot sold 200,000 John Deere tractors and increased its share of total retail tractor sales to 15% from 9% in 2002 — could serve as the model for other brand extensions.

In the spring, Ortho is scheduled to launch a new chemicals and fertilizer line called “Basic Solutions” that will be exclusive to Depot’s stores. The retailer will also develop proprietary brands on its own through global sourcing that, in the third quarter of 2003, accounted for 8.1% of its purchases, vs. 6% in third quarter 2001.

In 2003, one-third of Home Depot’s stores had at least one of their departments reset. Six hundred stores got new kitchen department resets, and 475 stores got the company’s new bilingual aisle and endcap signage program whose rollout is being accelerated. As previously reported, Depot intends to accelerate its store modernization program and spend more than $800 million this year on revitalizing its stores.

A typical store refreshening, which includes new paint, lights, etc., costs about $200,000 per unit. On the other hand, a total renovation, of which Depot did 14 units last year and will do 53 in 2004, runs $5 million per outlet.

The company projects that its sales in 2004 will increase by between 9% and 12%, which at the high end would bring Home Depot’s revenue this year to $72.4 billion. The company has calculated that its sales increase by $3 billion every time it is able to increase its average customer ticket by 5%. In fact, it managed to do just that in the third quarter of 2003 when the average customer ticket rose 5% to $51.30.

But the new deal further secures Sodisco-Howden’s position with Tim-BR-Marts and its 150 dealers throughout Western Canada, whose total retail sales are in excess of $1 billion. According to Jos Wintermans, president and CEO of Sodisco-Howden, the deal strengthens his company’s existing supply agreement by rewarding dealer loyalty. The greater the percentage of dealer hardware purchases that are made through Sodisco-Howden, the higher the plateau of favorable pricing.

Wintermans says he has been pleasantly surprised by the response from dealers, many of whom approached him during the show to express their enthusiasm for the program.

A majority of members of the export group Worldwide DIY Council reported recently that the weak dollar has enabled them to increase their sales an average of 16% during the last few months. And those who haven’t noticed its effect as yet are confident that their sales will rise at least an average of 12.5% in the future, as inventories get depleted or buyers realize how competitive American-made merchandise is now.

The dollar has fallen 26% against the euro since February 2002 and 14% against an index of all other trading partner currencies. Most of that decline has occurred in the last few months.

Sales increases registered so far range from a low of 4% to a high of 35%, with several manufacturers reporting gains of 30% or more. One building materials manufacturer said he was enjoying a 35% gain, while a tool manufacturer said sales were up 32%.

Sales into some countries are definitely benefiting from the dollar’s decline more than others. Australia, New Zealand, Canada and, to a lesser extent, the UK have all benefited. In fact, Australia was mentioned most frequently as the number-one country benefiting from the dollar’s devaluation. Spain was most frequently mentioned as the number-one European country for increased sales, as American products become much more competitive against European products.

Click here for more information on the Worldwide DIY Council.

With production moving more than ever to the Far East, China’s hardware industry has been developing rapidly in recent years, turning China into a production base for global hardware products. In turn, production here has benefited from Western input and joint ventures, as the quality of China’s hardware products has been greatly improved. Global hardware sourcers such as Home Depot, Lowe’s, Orgill, Ace Hardware and OBI all added buying offices in the Far East and steadily increased their sourcing of Chinese hardware products.

In response to the increasingly international nature of hardware production in the Far East, Shanghai became the site in 2001 for the China International Hardware Show. Organizers of Practical World-Koeln Messe GmbH, which mounts the largest show in the world — in Cologne, Germany — recognized the potential of CIHS, and brought Practical World Asia to CIHS in 2003. The two sides have formed a long-term cooperation agreement to create the China International Hardware Show/Practical World Asia.

After three years of development, CIHS/PWA has evolved into a leading trade show in China. Last year’s show played host to 35,000 attendees, including more than 2,800 overseas buyers. By 2006, when the 49th International Hardware Association Congress convenes in Shanghai, CIHS/PWA is expected to grow into the second-largest hardware show in the world, with an exhibition area of 80,000 square meters.

Sales for Fortune Brands increased 19% in its fourth quarter, while net profit reached $156.4 million, up from $131.4 million a year ago. Net sales rose 16% to $1.66 billion, with acquisitions adding 4%, and 3% coming from the benefit of the weak dollar. Home and hardware sales rose 27.8% in the quarter to $835.6 million.

MONTREAL — Tembec Inc. had gross sales for the first quarter of $766.3 million, down from $840.8 million in the same period last year. Net earnings were $52.2 million, compared to a net loss of $41.8 million a year earlier.

SLAVE LAKE, AB — Weyerhaeuser Co. has signed a letter of intent to sell its oriented strand board mill here to Tolko Industries for approximately $C56 million ($US43 million). The deal is expected to close on February 27, 2004 and is subject to necessary approvals.

MARKHAM, Ont. — Hammered by competition, White Rose Home and Garden Centres Ltd. has announced it will close nine stores in Ontario, leaving it with 12, by late February or early March. The stores in question are in St. Catharines, Barrie, Brantford, Sarnia, Kingston, Peterborough, Sudbury, Orleans and Bell’s Corners. White Rose has been through bankruptcy protection twice in the past five years.

BUFFALO, N.Y. — Gibraltar, a metals and plastics processor and commercial heat treater, has acquired Renown Specialties, a manufacturer and distributor of construction hardware. Terms of the acquisition were not disclosed, but it’s expected to add approximately $CD10 million from its 60,000-sq.ft. facility in Thornhill, Ont., near Toronto. This is the third building products company, along with Construction Metals and Air Vent, acquired by Gibraltar in the last year.

During its most recent recession, the U.S. economy was buoyed by home building and sales that never faltered. 2003 was the best year for housing in a quarter of a century, according to Commerce Department estimates: 1.85 million homes were started, representing an 8.4% increase over 2002 and the highest start total since 1978. In December of 2003, housing starts were percolating at a 2.09 million unit annualized clip, which was 15% higher than in December 2002 and the fastest rate of growth since February 1984.

Contrary to their previous predictions that homebuilding will fall off a bit this year, economists are now stating their belief that the housing market may actually increase again in 2004, especially given the fact that housing permits rose 6.3% last year to 1.86 million units.

Consumers paid 2.0% more in December for the goods and services included in the Consumer Price Index than they did in December 2002, says Statistics Canada. In November, the 12-month advance was 1.6%. The CPI excluding energy, which excludes the impact of the electricity refund, rose 1.7% from December 2002 to December 2003. This is very similar to the 12-month advance of 1.8% observed in November. On a monthly basis, the CPI advanced 0.1%, after rising 0.2% in November.

In the 1970s and early 1980s, Hechinger Co., which called itself in its ads and on its stores “The world’s most unusual lumberyard,” was considered to be one of the industry’s paragons. Manufacturers clamored to test their products in its stores, known for their pristine housekeeping. The company’s management team — which included Stephen Bachand, who went on to become CEO of Canadian Tire — was considered to be among the strongest in the field.

Hechinger Sr., who after World War II started working for the business his father Sidney founded in 1911, took the company public in 1972 and built it into one of the industry 10 largest dealers.

But Hechinger also lived to see his family’s operation, under his son John Jr., succumb ignominiously to competition from Home Depot and Lowe’s. In the late 1990s, Hechinger Co. was acquired by Los Angeles-based investment firm Leonard Green & Associates, and merged with Kmart‘s foundering Builders Square operation, moves that actually weakened the combined chain’s market position. Hechinger Co. filed for bankruptcy protection in June 1999 and liquidated its operations.

The company estimates that its revenue for fiscal 2003, which ends on January 31, will total $64.5 million, representing an 11% increase over the previous year. It expects its sales in 2004 to grow between 9% and 12%. Officials raised their earnings per share estimates for 2003 to $1.86, or around 18% higher than in 2002, and projected that earnings per share in 2004 would rise 10% to 14%.

Home Depot opened 175 stores in 2003, and will open 175 in 2004 — including 25 stores that previously had been scheduled to open in 2003. It will open 14 new stores in Canada, but does not plan to open any Expo Design Centers in either Canada or the U.S. in 2004.

Home Depot officials commented repeatedly on their company’s investment in technology, and how it has produced significant improvements to profitability, productivity and people management. Its Front-End Accuracy & Service Transformation (FAST) program introduced a new, more sophisticated point-of-sale system throughout the chain last year. Store managers now have at their disposal an electronic workload management system to help them prioritize and schedule the tasks of their associates.

In the second quarter of 2004, Home Depot intends to roll out what it’s calling its Back-End Automation and Re-Engineering program, or BEAR, which will include wireless scanned receiving and data capture capabilities, and a bar-code optimization process that will be linked to the stores’ POS systems and eventually be integrated with vendors’ databases.

“You should expect us to continue to invest in technology, modernization and our associates, ” said Home Depot chairman Bob Nardelli.

The suit contends that Reed inflated costs to exhibitors through cost-shifting of free goods and services, and that Reed demanded and received kickbacks. AHMA says Reed infringed on its trademarks, and that it continues to promote false and inflated exhibitor and attendee information and statistics for their 2004 show.

However, Cappiello insists he has signed contracts for all his exhibitors, which totalled 1,717 last week. “I really think this a desperation move,” he continues. “The industry has figured out that we have a better deal, a better show.”

Tim Farrell, president and CEO of the AHMA, disagrees. “Concerning 2004, we’re winning,” he says. “We have virtually every leading brand manufacturer in our industry across product categories, and the exclusive support and endorsement, and commitment of full attendance and participation from our industry’s buying organizations.” However, an examination of exhibitor lists from both shows failed to turn up a number of major vendors, including Bosch, Black & Decker, Makita, or Newell Rubbermaid.

Tim Farrell took over recently as head of the AHMA from his father, Bill Farrell, who remains as vice chair of the association. The lawsuit was filed by another son, William Farrell Jr., a partner at Gardner, Carton & Douglas, which acts as outside general counsel for the AHMA.

It’s may be too early to tell which show will be the winner, but so far NHS, which will be held May 10-12, 2004. is being unabashed about its numbers. As of the end of this past week, it had 1,717 exhibitors registered for Las Vegas, filling almost 400,000 sq.ft. of space. In fact, it is looking for additional space in the host venue, the Sands Convention Center, to accommodate demand.

“We’re not interested in playing a numbers game with a company who admitted to promoting false and inflated exhibitor information and statistics by including “undecided participants,’ which they continue to do,” says Farrell. AHMA won’t release the number of exhibitors that are registered for its show, but they are listed on the AHMA’s website. A quick count indicated close to 450 exhibitors.

In an interview with Hardlines, he explains that a large acquisition could materialize in Western Canada, and/or the signing of a major dealer out West. Dutton points out that 50 dealers from the West attended the retail distributor’s dealer show back in November, and the opening of Rona’s new Calgary distribution center in the spring all reflect the company’s growing focus on building its presence west of Ontario.

Rona established itself in Western Canada with the acquisition of Surrey, BC-based Revy Home Centres, and have recently been rebranded Rona stores. Rona also bought Réno-Dépôt, a chain of 20 big boxes in Quebec and Ontario, in a deal that closed last September, adding about $836 million in sales and bringing Rona’s 2003 sales to almost $4 billion.

Wilson, a 30-year veteran of Howden, takes over the position formerly held by Dave Street, who was merchandise manager of TSC — and a partner — until the company was sold off last year. Street will take a hiatus, then return on a contract to help guide TSC’s merchandising team, especially on the seasonal side.

Carter says the expansion of management gives the company the expertise to keep growing. Sales have increased more than 30% over the past three years, and sales for the current fiscal year, which began in September 2003, are already up more than 16%. Sales last year exceeded $80 million, and Carter says he’s targeting $90 million this year. In addition, the company plans two more store openings this year, Essex, ON in March and Goderich, ON in September, which will bring TSC’s store count up to 23. He also wants to open three stores by spring 2005, and will begin scouting out locations next month.

Other Howden alumni now working for the Ontario-based farm and hardware chain are Rick Larochelle, wholesale operations manager; Warrren Parr, TSC’s purchasing manager; Randy Chenier, working for Parr as purchasing assistant; Lois Stacey, warehouse supervisor; and Bill Gunton, a junior buyer. TSC has also tapped King Allaster, who served as CFO of Howden for many years, on a contract basis.

Totem, with sales of about $225 million, is one of Canada’s top 10 home improvement retailers, and one of the largest truly independent chains extant in the country. Its customer base largely DIY, but it also services a strong contractor customer base with its outside sales force.

The new contractor sales office is expected to be open by fall 2004.

“Since my dad died, I’ve had time to reflect on what I’ve learned from him, and I’ve come to realize that if we had stayed a lumberyard, we would not be here today,” says August Bering IV, the company’s CEO and owner, in an interview with Hardlines.

The Bering’s chain sells a full complement of hardlines and home improvement products in all three stores, but last year the dealer discontinued the lumberyard operation at its headquarters store to allocate more room to furniture and gifts. It has also expanded its baby products department over the past six months. A store in San Antonio that Bering’s purchased in 2000 has made a name for itself over the years for its tea room — complete with chef.

The company did not release its sales, but Hardlines estimates that Bering’s generates about $26 million annually from those three outlets.

Meanwhile, a store opens next week in Brattleboro, VT, which, at 65,000 sq.ft., is among the smallest in the chain. But unlike the other small stores, this one is not a new-concept “urban” store, designed for downtown markets. Rather, it’s a traditional format, and expected to be much the same as the former Villager Hardware store in New Jersey, which was converted back to a regular, albeit downsized, Home Depot, after the Villager experiment was terminated. The new Brattleboro store, which opens January 22, will be the third Home Depot store in Vermont. A fourth store in the state is scheduled to open in Bennington sometime in the future.

Home Depot spent more than $4 billion upgrading existing stores in 2003 and plans to open 175 new stores in fiscal 2004.

Last month, the town of Madison, MI, near Jackson, approved plans for Lowe’s to build 130,000-sq.ft. store across the street from a Wal-Mart there. The Lowe’s would be part of a 25-acre development that will include a 16-screen movie theater complex. The retailer has also presented a proposal to the planning commission in Wheeling, W.Va., for a 165,000-sq.ft. store on 15 acres, which could begin construction this summer. This store would be part of the proposed Wheeling Gateway Center.

Lowe’s is looking at virtually every market, large or small, into which it might expand, and that size may be less important to the company right now than market share — and making sure it can go head to head against Home Depot in many of these markets.

MONTREAL — Domtar Inc. and Gogama Forest Products Ltd. have formed a 50-50 joint venture to create a fully integrated sawmill, kiln, and planer operation in Northern Ontario. Gogama brings the Ostrom Siding sawmill to the new company while Domtar contributes a dry kiln and its stud planing line at Nairn Centre. The planing line will be modernized at a cost of $2.6 million.

SAINTE-MARIE, QC — Bath products manufacturer MAAX Inc. had sales of $160.2 million in its third quarter, up 4.7% over $153.1 million in the same quarter a year earlier. Net income totalled $8.3 million, compared with $9.8 million. The decline was due in large part to $4.7 million in non-recurring items. Not including these non-recurring items, net income grew by 15.7% to $11.4 million or $0.47 per share, and the net margin rose to 7.1% from 6.4%.

BERLIN — Retail giant Metro Group will move ahead with plans to implement radio frequency identification tagging in its stores. About 100 of its top suppliers will begin attaching RFID tags to pallets and packages of goods headed for 10 Metro central distribution warehouses and 250 stores beginning in November. The company wants the system in all its 800 German stores by 2007.

CHICAGO — Kmart Holding Corp. has acquired a 1.5-million-sq.ft. warehouse it had previously leased in Manteno, about 50 miles south of Chicago.

MacConnell is taking the reins of a company whose parent makes solid pine interior doors, finger-joint pine and medium-density fiber molding. Over the next three years, the Chilean plantation that the parent company operates is expected to yield “substantially more product,” and MacConnell says he’s been charged with finding more buyers for that product in North America.

“We need to identify what those markets are and to figure out the logistics,” MacConnell told Hardlines. He expects Terranova’s primary customers to be distributors and OEM suppliers. He added that Terranova’s products would have an advantage in the market because they have been certified by the Forest Stewardship Council.

Even after the record-breaking sales levels of 2002, Canada’s housing market increased again in 2003, as the number of homes sold increased 3.8%, says the Canadian Real Estate Association. A total of 307,505 new and existing homes were sold, and records were set in a number of markets, including Vancouver, Toronto and Montreal.

Meanwhile, the giant European market beckons.

So when Home Depot reportedly met with representatives from Europe’s largest home improvement retailer before Christmas, the persistent rumor about Home Depot’s interest in acquiring London-based Kingfisher resurfaced with a vengeance last week.

Analysts and investors may be sceptical. Kingfisher’s stock price rose only 3% on the day the rumor broke and the U.S. dollar’s sinking value against the euro and the British pound sterling would make such a deal more costly for Home Depot than even a year ago. But such a blockbuster merger would immediately position Home Depot as the number-one retailer in several European countries, and provide it with a firm footing in Asia, where Home Depot has tread cautiously to this point. This deal would also place under Home Depot’s reins a corporation that has been at great pains in recent years to shore up both its balance sheet and market position.

Through the nine months ended November 1, 2003, Kingfisher was operating 601 home centers in 10 countries — the United Kingdom, France, Germany, Turkey, Italy, Spain, China, Taiwan, Korea and Poland — either directly or through joint venture agreements. Those stores represent 4,066,000 square meters of selling space and 57,492 employees. Through nine months, the company’s sales were up nearly 13% to 5.82 billion euros, and its profit rose 26.2% to 518.2 million euros.

Over the past year, Kingfisher has been exiting markets where it has decided it cannot secure dominant market share. Consequently, it sold its Réno-Dépôt chain in Quebec to Rona Inc. and sold off its Nomi stores in Poland. It has also agreed to sell its three stores in Brazil to Casa e Construcao in a 4 million-euro deal that should be completed this month, and it’s closed the stores it operated under the Castorama banner in Germany, where it has a joint venture agreement with the Hornbach chain.

Kingfisher’s Eastleigh, U.K.-based B&Q division, with 326 units, generates nearly two-fifths of Kingfisher’s revenue, and has boldly staked its claim in the Pacific Rim. As of November 1, it operated 14 stores in China (including the largest B&Q in the world, in Beijing), and 16 in Taiwan. It also operates stores in Korea. B&Q has stated its intention to be operating 58 home improvement warehouse outlets in China by 2005, and 126 by 2010.

With the DIY part of the business being cleaned up, one may wonder what would be left of Kingfisher if this were sold off. But even other parts of the company have been restructured to stand alone. Last July, Kingfisher spun off its electricals business into a separate company called Kesa, which includes the Comet chain in the U.K. and Darty in France.

BOUCHERVILLE, QC — Rona Inc. is moving ahead with the consolidation of the Réno-Dépôt business, a chain of 20 big box stores in Quebec and Ontario. Six of them are in English-speaking Ontario, and they will all be converted to Rona Home & Garden by the end of the first quarter. In Quebec, which is largely French speaking, the stores will continue to operate under the Réno-Dépôt name, which is well established there, at least until the end of 2004.

The buyout, which was completed last September, brought the total number of big boxes within the 530-store Rona network to 62, and established Rona as the number-two home improvement retailer in Canada. However, one of the conditions of the acquisition, as laid out by the Competition Bureau, was to sell off a Réno-Dépôt store in Sherbrooke, QC to a competitor. To date, no buyers (read: Home Depot) have come forward to take the store off Rona’s hands. The store is unionized, which may have been reason enough for Home Depot Canada president Annette Verschuren to pass on the deal.

Rona remains committed to expansion: as many as seven new Rona big boxes will be announced in the year ahead, in addition to five traditional DIY-oriented building centres under the Rona Home Centre banner.

“We know we have to be national,” says Jim Bradshaw, vice-president building materials for Taiga, “or else.” The numbers bear out the growth, with sales in 2003 exceeding $1 billion for the first time.

Quebec, he adds, is a natural move for the LBM wholesaler. Last fall, industry veteran Pierre Racette was hired on to develop the distribution centre network in that province, which already consists of distribution centres in Boucherville and St. Augustine. Racette has a long history on the distribution side, having worked for both Sodisco-Howden Group and Rona Inc.

Besides Central Canada, however, Taiga remains strong in the West, says Bradshaw, and the U.S. remains ripe for expansion, where its first facility in the United States opened about 20 miles outside of Sacramento. Says Bradshaw, “It’s going extremely well. And we will expand there. “

ST. ALBERT, AB — Calgary-based Totem Building Supplies opened its 14th store in this city adjacent to Edmonton last Friday. Totem, a major independent chain in the province, has been on an expansion track in recent years, despite the incursion of big boxes into its key markets of Calgary and Edmonton. Sales last year hit an estimated $225 million in sales, and Totem is one of the top 10 home improvement companies in Canada.

But the last three Totem stores that opened — in Camrose, Sherwood Park and Airdrey — were slightly smaller than the newest one, a 31,000-sq.ft. store with 12,000-sq.ft. drive-through lumber yard, sits on 5^1/2 paved acres, including a two-acre parking lot, adjacent to a Wal-Mart. According to Colin Robertson, Totem’s vice-president marketing, the increased size is not due to the expansion of departments or an increase in SKUs. “We’ve just used more space, widened the aisles, to make it more customer friendly. “

“This year will be a great opportunity for us to fine-tune Expo,” says Verschuren, who is also president of Home Depot’s Canadian division. “We continue to refine the strategy and we’re working to improve the project management side of the business.”

Expo operates more as a showroom geared to buy-it-yourself (BIY) customers than a source for materials, and most sales are on a special-order basis. In fact, more than two-thirds of Expo’s revenue is generated by installed or pro sales, catering to a higher-end customer than the DIY orientation of a typical Home Depot customer. “These are the people who want projects that are managed by a pro. They come into Expo stores for project ideas, design tips,” she says.

Where once upwards of 200 stores were envisioned for the Expo chain, Verschuren adds that she has no immediate plans to open any more, nor will any be opened in Canada in the near future. However, two traditional Home Depot stores in California have attracted attention for implementing a large number of Expo features.

Nearly 70 members of the Worldwide DIY Council heard from Juan Jose Jaen, president of Brico Group, comprised of 17 building material distributors; Manfred Maus, president of Germany’s OBI; and Hans-Jorg Greimel, a key executive and board member of Austria’s Baumax, and other retail leaders.

European retailers are looking eastward for their expansion, said Maus and Greimel, whose firms already have dominant positions in those emerging markets. Eastern European homes need modernizing and updating, and consumers in most of those countries are sophisticated DIYers with a pent up demand.

OBI is operating now in 11 countries, including China, while Baumax is in six countries.

Eastern European countries are beginning to enjoy bright new stores, shopping centers and improving retail productivity as western European retailers bring advanced merchandising and marketing techniques to the region.

Both Maus and Greimel explained that their stores are tailoring merchandise assortments and brand selections to the needs of each country, with a high concentration of purchases being made locally, though customers in those lands are eager to accept western brands and are looking for “new things” previously not available to them.

More information about the DIY Council and its activities, including its group pavilion at the upcoming DIY & Garden Show in London this month can be found at: www.wdiyc.org.

Last week, about 50 workers from several unions, joined by two local freeholders, picketed the construction site, where Lowe’s began building this 142,000-sq.ft. store last July. The workers vowed to continue picketing the store after it opens, and promised to boycott its products. One freeholder, Louis Maguzza, said that the state should rescind taxpayer-funded incentives and other benefits that Lowe’s is scheduled to receive for building in this market.

The Vineland Daily Journal quoted Jennifer Stansberry, a Lowe’s spokesperson, as saying that it was up to the general contractor on the project to decide which workers it uses, and that, in fact, union earth movers, ironworkers, brick masons and painters were part of the crew. At least one union representative, however, disputed that claim.

Large retailers such as Wal-Mart, Lowe’s and Home Depot have been careful to keep unions out of their stores. Many observers believe that Home Depot passed on buying Quebec-based Réno-Dépôt because its stores are unionized.

In an interview with Hardlines, Meidan insisted that the deal with BYGGmax was “very premature” at this stage. He did not elaborate or return other phone messages requesting more information.

Home Centers operates 44 stores in Israel (where it controls an estimated 13% of the market’s sales) and a 35,000-square-foot home center in Cyprus, in which it has a 49% stake.

To qualify for the scholarship, high school seniors must have a 3.5 grade-point average and demonstrate some level of community service. They must also fill out an online application as well as an essay about what they feel will be the most critical issue facing the country over the next five years and how they would solve it.

VANCOUVER — Daiso is a “high-end” bargain retailer with 2,500 stores and $6.3 billion in sales in Japan. But it’s virtually unknown on this continent. Now Fairchild Property Group entered a joint venture with Daiso-Sangyo Co. of Japan and opened the first Daiso store in Richmond, BC, a suburb of Vancouver. The 30,000-sq.ft. store sells some 50,000 SKUs, everything from kitchen utensils, hardware, cosmetics, snack food and fabric flowers, all for only $2.

HOFFMAN ESTATES, IL — Emerson Electric was given some of Sears‘ Craftsman benchtop tools in 1998 to develop private label products for Sears, but the company didn’t bother to return them. Sears later charged Emerson with knocking off the Craftsman products for the benefit of Sears’ competitors. Now Sears has won a lawsuit worth $10.8 million. Emerson did not admit to any wrongdoing.

NATIONAL REPORT — Lumber dealers in the U.S. began voluntary compliance last week to an agreement to eliminate chromated copper arsenate-treated lumber from its yards. CCA is an inexpensive and effective treatment against rot and insects, but major dealers like Saginaw, MI-based Wolohan Lumber have been weaning themselves off it for months. Under the agreement, which is similar to one in Canada, dealers can continue to sell CCA-treated wood as long as their existing supplies last. New forms of treated wood are expected to cost as much as 50% more than CCA.

TOWSON, MD — In a deal that will expand the tech applications of its wireless car control systems, Johnson Controls has forged a partnership Black & Decker to produce a new wireless remote control system that will be compatible with HomeLink. With it, homeowners will be able to turn on their lights, Black & Decker coffee pots, door locks and more from their vehicle.

BENTONVILLE, AK — Wal-Mart Stores has authorized a new $7 billion share repurchase program that replaces a previous program valued at $5 billion. The giant retailer had already repurchased $3.1 billion in common shares through its third quarter.

Wholesale inventories in November were valued at $292.7 billion, says the Commerce Department. That’s up 0.5% from last month and up 2.2% from the same month a year ago. Wholesale sales were up 0.3% from October to $247.4 billion, and up 5.5% from November 2002.

• Cologne International Hardware Fair/Practical World, March 14-17 (including the Amazing Hardlines Canada Night Reception, kindly sponsored by Koelnmesse);

• Our mind-blowing Meet the Buyers Seminar on April 28;

• International Hardware Trends, two seminars by Hardlines at the National Hardware Show in Las Vegas, May 10-13;

• The Hardlines Conference Series, September 8-9, including the Hardlines Gala Dinner on the evening of September 8.

Home Depot initiated this test program for its stores’ electrical department. The retailer retains the service reps and the vendors whose products are being detailed must pay a fee to defray costs.

While manufacturers have griped about how this new program didn’t provide anywhere near the same level of service as vendor-managed programs, they have little choice but to comply, and it’s likely Home Depot will expand the practice to other departments.

This backlash against vendor-controlled rep groups has been building for nearly two years, ever since Lowe’s Cos. CEO Bob Tillman publicly bewailed the fact that his company was shelling out upwards of $250 million per year on in-store reps. At that time, he stated that Lowe’s was committed to reducing the number of rep organizations servicing its stores’ plumbing and electrical departments from 22 to two.

TORONTO — Retail grocery giant Loblaw Cos. has backed away from a deal to take over the historic Maple Leaf Gardens and convert it to a complex that includes a Loblaw’s Superstore. Loblaw claims the costs of converting the historic 72-year-old building are too great.

The Gardens will now turn to the other companies that had vied for the property, including Home Depot Canada. Annette Verschuren, president of Home Depot’s Canadian division, in an earlier interview with Hardlines, made clear her disappointment over not securing it the site, but Loblaw made the better offer.

Bob Hunter, a spokesperson for Maple Leaf Gardens, says Loblaw was not scared off by the demands of Toronto’s Historical Board in converting the historic art deco structure. “The only parameters are retaining the four walls, and the roof is included in that,” he notes. The building, built during the Great Depression, was the home to the Toronto Maple Leafs, and entertainment including that Rolling Stones concert in 1974… (never mind the idle rock ‘n roll reminisces — Editor).

The Gardens site would have been an ideal location for a first “urban” type Home Depot store in this city of 3.5 million. “I really wanted that site,” Verschuren told Hardlines. Home Depot will open its first urban store later this year, but across the country in Vancouver. Another site has been secured in Calgary. Home Depot already has urban stores in Chicago and New York.

The urban store opening in Vancouver will be 50,000 sq.ft. with another 17,000 sq.ft. on a mezzanine level. The store sacrifices some floor space typically devoted to LBM, relying on neighboring full sized stores to make commodity deliveries to customers. It’s scheduled to open sometime in the latter half of the year.

Home Depot erected 13 stores in Canada in 2003; another 14 are scheduled to open in 2004.

The offer gives noteholders a choice of converting their current investment for 50 cents on the dollar plus another 25 cents on the dollar in the form of a new convertible note offering, or for cash amounting to 65 cents on the dollar. Wickes is currently in discussions with Imagine Investments, a major investor, and its lending syndicate led by Merrill Lynch Capital, regarding financing for the exchange offer if the company is unable to convert the $20 million in notes prior to the expiration date.

“It is imperative for holders of our senior subordinated notes to act promptly on our exchange offer,” said Wickes’ CFO James Hopwood. He adds that the company is trying to figure out how to complete the exchange even if the needed amount of notes are not converted, in order to pay other creditors, namely non-tendering note holders, as lenders are unwilling to make more funds available.

If the exchange offer can in fact be completed as planned, Wickes intends to make the required cash payments to tendering holders with funds borrowed from its lenders on a senior secured basis. In the event that the company were eventually liquidated in a bankruptcy proceeding, the asset values remaining for senior subordinated notes would be less than the liquidation value of the company.

BMR’s trucks started delivering hardware to the other QMH partner, TIM-BR Mart Ontario, earlier in December, on a direct-ship basis only.

The AWARD buying group established a distribution facility of its own to serve its members throughout Atlantic Canada. AWARD has 67 members with 98 stores, and so far 55 have signed on to invest in the new DC, at a cost of $35,000 per member. However, says Tom Smith, president of AWARD, these dealers represent the largest members and the largest stores, including Chester Dawe Ltd., an eight-store chain in Newfoundland with sales of approximately $70 million.

Smith is optimistic about the future of QMH. His group’s DC has been renovated “on time and under budget,” he says. And nine trucks have arrived in Halifax, the beginnings of ADL’s own fleet. “It’s a lot of work, but it represents a new world for our dealers. “

Opie, a former vice-chairman with General Electric (Trani came from there, too), has been on Stanley’s board since 2000. The company’s operations will be managed for the time being by two executives: Joseph D’Angelo, executive vice-president of the company’s tool group; and Stanley’s CFO, James Loree.

Stanley has been searching for Trani’s replacement since he disclosed his intention to retire last May. The currently interim appointments were disclosed only days after Stanley announced that it paid about $165 million to acquired Blick plc, a British-based supplier of security, communications and time management systems for healthcare facilities, with annual sales of about $120 million. Early last month, Stanley also sold its entry door business, headquartered in Charlotte, NC, to Toronto-based Masonite International Corp. for an estimated $160 million. At the time, Trani said that the door business, which generates about $200 million in annual sales, didn’t fit into Stanley’s business strategy, which now focuses on tools and “security solutions.”

Stokan’s firm conducted its third annual holiday survey for Yorkdale Shopping Centre, a major retail complex in Toronto, polling 250 female customers. More than one-third of respondents (36%) said they planned to spend more on gifts than in 2002. However, while spending is up, practicality is a key focus for the holidays, with a discerning eye for bargains and a preference for practical gifts over luxurious ones. Popular gifts included gift certificates and items for the home. Almost half of respondents (48%) indicated they would enhance the interiors of their homes in preparation for holiday entertaining with changes such as new paint, wallpaper, window treatments and furniture.

When asked to estimate their holiday spending this season, on average, 35% claimed they intended to spend more than $1,000, up from 27% of respondents in the 2002 survey. Almost half said they would spend between $500 and $1,000 on gifts.

Confidence in the economy for the New Year is strong, with 90% of those surveyed indicating that they are somewhat to very confident in Canada’s economic prospects for 2004.

The show will be organized under three themes, virtually three shows in one. The sectors are Tools, along with Security, Locks and Fittings and finally, the building materials component, Home Improvement/DIY. The fair will cover a total exhibition area of 255,000 square meters, comprising nearly the entire Cologne exhibition grounds.

North Americans joining the show, either as vendors or buyers, will have a number of opportunities to gather and network with potential customers and suppliers. The fourth annual Canada Night Reception, hosted by Hardlines and sponsored by the show, will be open to all North Americans — and all faithful Hardlines subscribers. The Reception will be held March 14, adjacent to the Fair grounds themselves. (We’ll provide more info on this exciting event in the weeks to come — Michael)

In 2001, the company took a $93 million charge against earnings to cover the cost of closing several building products plants in response to weak market conditions. Building materials manufacturing accounted for 22% of G-P’s total sales in 2002 and 38.9% of its total operating income that year.

Prior to its decision to combine several of the division’s business units, it had been broken down into five segments: structural panels: In 2002, G-P was North America’s largest producer of structural panels. This unit’s 20 plants produced 8.7 billion sq.ft. of panels, which represented nearly 20% of the market’s panel capacity that year; industrial woods: In 2002, G-P was the largest producer of industrial wood panels and the fourth-largest producer of hardwood plywood in North America. This unit produced 1.4 billion square feet of panels that year, or 17% of the market share. It also produced 35% of the particleboard substrate flooring made in North America. Lumber: G-P is the fourth-largest producer of lumber in North America. This unit’s 33 mills had the capacity to produce 2.5 billion board feet annually, or 4% of North America’s lumber production.

The division’s two other business units, gypsum products and chemicals, will be kept separate from the wood products group. The new wood products unit will led by executive vp Ronnie Paul. Elliott Savage, president of the industrial wood products, will become senior vp of wood product sales reporting to Paul.

The antipathy towards service reps is hardly a new phenomenon. Builders Square, the now-defunct warehouse home improvement dealer, caused a stir in the 1980s when it started pushing service reps out of its stores. But when Wal-Mart made similar moves and began questioning the value of reps in general, it became clear to vendors and dealers alike that their relationships were entering a new era.

One factor that may have caused this sea change could be the propensity of large dealers to season their inventory mixes with proprietary and private labelled merchandise, much of it imported. Dealers need to hire their own service reps to maintain departments that feature these products, which in some cases makes redundant what vendors’ service reps are doing in their stores. That dealers want more control over this maintenance, and its costs, isn’t surprising.

In its annual report, Newell Rubbermaid said this initiative “allows the company to enhance product placement and minimize stock outages and… maximize shelf space potential,” with those retailers Newell has identified as its most important partners, specifically Home Depot and Lowe’s. These college grads, in essence, replaced the rep organizations that Newell had been using to service its retail accounts.

The Phoenix program is still in place, according to Newell’s latest documentation. In fact, the company attributed the increase in its SG&A costs through the first nine months of 2003 partly to “investments” it made in its Phoenix and Strategic Partners programs. Whether Phoenix has had any meaningful impact on Newell’s profitability, however, is hard to gauge because the company is still struggling. Through nine months, it took a $166 million restructuring charge against pre-tax income, so it’s still in the process of trying to reduce costs.

BREA, CA — Home Depot has added a number of elements from its Expo store format to a couple of traditional stores in Southern California. In place of warehouse style racking, the front of the stores are dominated by showrooms for kitchen and bathroom, carpet and rugs, etc. Commodity items and hardware are relegated to the back. While the company denies the emergence of a new format, Home Depot has been searching for ways to make its upscale Expo concept more viable, and this may become one answer.

ATLANTA — Lowe’s will build its first store within the Atlanta city limits. The 116,000-sq.ft. outlet will be in the Edgewood Retail District on Moreland Avenue near DeKalb Avenue. The store is slated to open in 3Q 2004. Lowe’s already has 23 stores in the greater Atlanta area.

STOCKHOLM, Sweden — Assa Abloy has received regulatory approval to acquire Nemef BV in the Netherlands and Corbin Srl in Italy from Black & Decker. The previously announced deal is expected to close tomorrow and is valued at 66 million euros.

The Worldwide DIY Council has elected its new officers and directors for the coming year: Betty Perez-Koukounaras, H. D. Hudson Manufacturing, Chicago, has been elected chair… Jim Ness, Meter-Man Inc., Winnebago, MN, is now vice-chair… New directors are Dale Fortenberry Jr., AccuSharp International, Marble Falls, TX; and Sandra Pierce, Mr. Longarm Inc., Greenwood, MO… Ian Wallace of Better Living Products, retiring chair, becomes ex officio director for the coming year… Tom Delph continues as executive secretary.

Tracy Fellows has been named vice-president consumer marketing and advertising for Canadian Tire Retail. Formerly director of advertising, Fellows replaces Eymbert Vaandering, who has left the company.

Sylvain Toutant, who left the helm of Réno-Dépôt Inc. just four months ago to head up Les Boutiques San Francisco Inc., has resigned as president, CEO and a director of the insolvent apparel retailer. He had been president and CEO of Réno-Dépôt until it was sold to Rona Inc. Les Boutiques San Francisco filed for court protection from creditors on December 17.

Home sales fell 2.4% to 1.082 million seasonally adjusted in the third quarter, according to the Commerce Department. The economy overall was buoyant, with real gross domestic product up at an annual rate of 8.2% in the third quarter of 2003. That’s the best advance in 20 years, says the Commerce Department, and follows a 3.1% growth rate in the previous quarter. However, GDP is expected to grow in the fourth quarter by about 4%, half the rate of 3Q. For the third quarter, consumer spending reached a rate of 6.9%, the best showing since the third quarter of 1986.

Retail sales were up only 0.2% to $26.4 billion in October as consumer spending remained weak in several sectors, says Statistics Canada. Lower gasoline prices made an impact, while retailers of big ticket items such as automotive, household furniture and appliances, as well as general merchandisers, clothing stores and drug stores, posted essentially flat sales. Cumulative retail sales for the first ten months of 2003 were up 3.5%, a much weaker performance than the 6.4% growth observed in the same period of 2002.

Wholesale sales remained essentially unchanged in October, down only 0.1%, during which time wholesalers sold $36.6 billion worth of goods and services, says Statistics Canada. This followed a strong 6.4% rebound in wholesale sales in September. Compared with the same period in 2002, wholesale sales have increased 3.1% during the first ten months of 2003.The largest gains were in the computer and electronic equipment sector (+3.4%), while lumber and building materials were down 3.7%.

“It’s not a price war out there any more. It’s a service war.” — Robert Dutton, president and CEO of Rona Inc., Canada’s number-two home improvement retailer. He’s just one of the retail leaders giving their take on the challenges in the year ahead. Read it in the upcoming issue of our sister publication, Hardlines Quarterly Report.

• Cologne International Hardware Fair/DIY’Tec, March 14-17 (including the Amazing Hardlines Canada Night Reception, kindly sponsored by Koelnmesse);

• Our mind-blowing Meet the Buyers Seminar on April 28;

• International Hardware Trends, two seminars by Hardlines at the National Hardware Show in Las Vegas, May 10-13;

• The Hardlines Conference Series, September 8-9, including the Hardlines Gala Dinner on the evening of September 8.

Great American Group, a Los Angeles-based asset management firm, has taken over the company’s assets and started conducting the liquidation of 93 stores and $28 million of inventory, which is expected to conclude no later than Jan. 31, 2004. The dealer’s stores, which average around 5,000 sq.ft., are located mostly in strip malls. It also has a 99,000-sq.ft. distribution facility in Amesbury, MA.

Woodworkers Warehouse employed just under 600 workers.

As part of its court-ordered bankruptcy proceedings, Woodworkers Warehouse has agreed to accept returned merchandise that had been sold within 30 days of its bankruptcy filing. Attorneys General in several of the states where Woodworkers Warehouse operated stores estimate that up to $680,000 worth of gift certificates and credit slips could be outstanding, and have urged consumers to redeem them as quickly as possible.

This was the second time in three years that Woodworkers Warehouse has filed for bankruptcy protection. The first time was on August 11, 2000 under its former corporate name, Trend-lines. It emerged from that bankruptcy 14 months later with a new business model and a new $30 million line of revolving credit. The company had disposed of its Golf Day stores, catalogue and website. However, Woodworkers Warehouse’s reorganization strategy never appeared to take hold; in fact, its last annual report warned investors that its stores were not generating enough cash flow to sustain the business. Part of that strategy also called for the company to issue new common stock to unsecured creditors, but its stock was not listed or traded at the time of its Chapter 11 filing.

One of the retailer’s trade creditors — toolmaker Porter Cable — rejected delivery of 1,180,480 shares on December 16, 2002 as remuneration for more than $4 million merchandise it had shipped to its stores.

For the year ended March 3, 2003, Woodworkers Warehouse sales were actually up 2.2% to $113.7 million from 24 stores in New York, 11 in Pennsylvania, 17 in Massachusetts, 12 in New Jersey, seven in Connecticut, seven in Maine, three in Delaware, two in Rhode Island and one in Vermont. However, the company reported a net loss of $4.5 million that year.

The red ink continued to flow through the next six-month period, during which Woodworkers Warehouse reported a $2.2 million loss for the 26 weeks ended August 30, 2003 (compared to a $3 million loss for the same period a year earlier), on sales that were off 3.5% to $51.1 million.

The company has appointed two veterans within its organization, who are currently regional vice president, to run these divisions, which go into effect January 1, 2004. Rick Damron, who joined Lowe’s in 1981 and had been supervising its store operations in New Jersey and Pennsylvania, is now senior vice-president of the company’s Northeast division. Robert Wagner, who has been with Lowe’s for 27 years, and oversaw its stores in Washington and Oregon, now will be senior vice-president for its Western Division.

The company did not disclose whether it planned to set up local offices for either of these two divisions, although the announcement about the formation of the Northeast division came only days after Lowe’s agreed to build a 1.36-million-sq.ft. distribution center in Plainfield, CT.

As part of its operational realignment, Lowe’s has re-formed three other divisions to cover the South Central, North Central and Southeast parts of the country. They will be run, respectively, by Mike Brown (who was senior vp-operations for the company’s former Western division), Nick Canter (senior vp-operations for what had been the company’s Northern division) and Greg Wessling (who was senior vp-operations for the chain’s Southern division).

In a prepared statement, Lowe’s senior executive vp-operations Larry Stone explained that the retailer decided to sub-divide its operations so that it could execute with greater efficiency “key initiatives in the stores” as well as maintain “its high customer service standards.” Stone did not elaborate.

Lowe’s operates more than 925 stores in 45 states, and plans to open 140 stores next year. Interestingly, it is dividing its operations into more business units at a time when its main rival, Home Depot, has been consolidating its operations. Home Depot recently announced plans to merge its Northwest division into its Western division, forming a 355-unit, 46,000-person operation.

“We’re testing that store size because we can get into so many markets with that size,” says Home Depot Canada president Annette Verschuren. The store sacrifices some floor space typically devoted to LBM, but aside from that, it looks like a typical Home Depot big box. “When you walk it, you can’t tell the difference,” Verschuren says.

The store, in the heart of Canada’s beef country, has felt the impact of mad cow disease, which has hammered the beef industry, but Verschuren is undaunted and plans to keep opening the smaller-sized outlets. The latest store, number 102 in Canada, is one of them. It’s a 95,000-sq.ft. (plus 15,000-sq.ft. garden centre) operation in Courtney, BC, on Vancouver Island. It opened last Thursday.

Verschuren erected 13 stores this year, and expects to open another 14 in 2004.

He expects to announce a significant addition to the Rona business by the second half of the year, implying a large operation in Western Canada will either be taken over or signed up as a Rona member. He notes that 50 dealers from the West were at the Rona show in Montreal in early November. Western expansion will be supported by the opening of a new distribution centre in Edmonton, AB in spring of 2004.

The company remains on track for organic expansion, as well. Its next big box opening under the Rona Home & Garden banner will take place in Edmonton, AB on February 12, 2004 and summer openings will occur in Kitchener/Waterloo, ON and in Regina, SK. He promises another store for the national capital region by the third quarter with an opening in Hull, QC, across the river from Ottawa. Dutton says he is awaiting approval by the board of directors of two or three more land acquisitions for a total of up to seven new big box stores by the end of 2004.

Another five traditional home centres will also be built next year, under Rona’s Home Centre banner. The focus for these stores, says Dutton, will be Ontario and the West.

In addition, he expects all the Building Box stores in Ontario, which were part of Rona’s acquisition of Réno-Dépôt, will be converted to the Rona Home & Garden banner by the end of the first quarter.

That Irly has its own distribution and sells beyond its membership makes it somewhat unique. Only Groupe BMR in Quebec could ever make the same claim, although AWARD in Atlantic Canada is about to open a facility of its own, as well. And BMR, TruServ Canada and even Cooperative fédérée in Quebec have recently established strategies for selling beyond its own membership. But while these are startups for these organizations, Irly established Western Wholesale as a spin-off business years ago.

Stuart Joule, who is executive vice-president and general manager of both Irly and Western, says Western’s wholesale business is filling a vacuum caused by the exit of other Western distributors over the years — everyone from Marshall Wells to Smith-Barregar. And while a number of distributors, including Sodisco-Howden Group and TruServ, supply dealers from London, ON and Winnipeg respectively, delivery times through the mountains make for long waiting times.

Western’s sales efforts are supported by two salespeople on the road, Joule says. “There’s a lot of Friday afternoon shopping,” he notes, from dealers wishing to stock up for the beginning of the next week, and can’t afford to wait for a shipment to come from back east.

“Independents need to get product quickly, and at a competitive price in smaller quantities. We sell him in the quantities he wants in the time frame he wants.”

And watch for Hardlines at the National Hardware Show in Las Vegas, where we’ll present a seminar series on international retail trends.

But before that, Hardlines will be at two trade shows in Ontario, kicking each one of them off with a breakfast event. The first is the Hardlines Industry Breakfast at CHS, which will be held Sunday morning, February 1, 2004 at the National Trade Centre on the CNE grounds in downtown Toronto. There we’ll host a special Industry Breakfast. This Editor will emcee a celebration of the show and its contribution to the industry over the years. In addition, the Grand Opening Breakfast will pay tribute to many of the individuals who have made their mark in hardware/home improvement retailing over the years.

The following week we head down to London, ON to participate in the first-ever LBMAO Winter Buying Show. This time, we’ll team up with Hardware Merchandising magazine at a free breakfast and seminar for dealers on Saturday, February 7. We’ll offer lots of tips on selling to two important customer groups — women and contractors. Hardlines has just finished a major survey of women’s home improvement shopping habits, in association with ACNielsen. We’ll report on this ground-breaking survey in this seminar. Hardware Merchandising, through its sister publication, Canadian Contractor, will offer insights into growing sales to the important pro/builder customer.

Just send us your gift list, along with contact information – address, phone number, fax and especially e-mail addresses – we’ll do the rest! Gift recipients will be eligible for all our regular subscriber perks – daily news updates, personal access to HARDLINES website and archives, special subscriber rates on our other products (Who’s Who, Retail CD, etc.), and special rates for all of our conferences.

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Volume Discounts Available – Call Nancy Wright (416) 489-3396

REMEMBER: Santa & Hardlines only take Christmas orders until December 24, 2003.

Reporting to Reg McLay in business development: Ed Johnston, leading global sourcing effort as divisional vice-president for global sourcing. He was most recently general merchandise manager of hardware. He will be focused on the global pipeline, including the Far East. Exclusive products are key to CTC, and Mike De Paul is on Ed’s team now as import manager. He was formerly global sourcing manager … Fareed Ansari is director of category management.

Reporting to Peg Hunter in leisure: Brian Murphy, line of business director for outdoor recreation … Mike Ross is now line of business director for lawn and garden … Michael Santos is now line of business manager for sports.

Reporting to Laila Zichmanis in home products: line of business director for home décor and repair is John Jobin, who was previously running value-added services in Canadian Tire Direct … kitchen and consumables line of business director is Greg Breedon, formerly lead category manger for kitchen … Tony Whitehouse leads the tools business is line of business director for tools … Mike McGinnis is now line of business manager for electric and home organization. He was formerly category manager for storage and organization.

No head of automotive has yet been named to replace David Roussy. But the auto team comprises: Greg Hicks in charge of auto parts marketing and operations…Tom Mondoux is director of auto service … Rob Szekszer is director of car care and accessories … line of business manager for tires and batteries is Tony Del Vasto.

Pam Pike, formerly category manager for lighting has left Canadian Tire, taking on a director of maketing job for a tech company on the West Coast.

MOORESVILLE, NC — Lowe’s Cos. intends to buy back up to $1 billion of its common stock. The buyback represents about 2.3% of Lowe’s 786 million shares outstanding. Companies use buybacks to increase earnings per share by reducing shares outstanding. The repurchase program also will allow Lowe’s to offset the effect of employee stock options.

VANCOUVER — Canfor Corp., Canada’s largest lumber producer, has come out squarely opposed to a proposal to settle the Canada-U.S. softwood lumber dispute out of court. The company claims it’s already over-paying under the current tariff, and any broad-based settlement would not credit this. The settlement framework provides no recognition for the preliminary Department of Commerce decision that Canfor’s CVD rate should be 12.24% as opposed to the industry rate of 18.79%. Canfor has therefore over-paid duties by approximately $60 million of which only 52% will be returned under this proposal and 48% will go to its US competitors under the Byrd amendment.

TORONTO — Jerry Zucker, a U.S. industrialist who heads up South Carolina-based InterTech Group., has bought up 10% of Hudson’s Bay Co., sparking rumours of a takeover. The move sent HBC’s stock price up almost 15% last week. Zucker would reportedly keep HBC intact, holding on to current management and strategy, if he decided to bid for the retailing operation.

TORONTO — CSA International, a leading certification and testing organization, today announced that Ace Hardware Corp., the giant retailer-owned hardware distributor in the U.S., now formally recognizes the CSA certification mark on electrical, mechanical and gas-fuelled products. This is an important step in CSA’s effort to establish itself as a truly North American certification body. Hardlines broke the story just weeks ago of CSA’s success in getting recognition by UL for CSA-approved electrical components.

LONDON, UK — Wal-Mart’s supermarket chain here, Asda, has made a bid to buy 70 of Safeway Plc‘s stores for almost $3.48 billion. The offer is being regarded as an effort to thwart a rival offer by Asda’s smaller competitor, William Morrison Supermarkets Plc, whose existing bid has been cleared by regulators to bid for the whole of Safeway, as long as it sells off 53 of the stores to competitors.

TORONTO — Masonite International is buying up the residential door business of Stanley Works for $160 million. The cash deal is expected to add about $200 million in sales to Masonite’s business, which was worth $1.62 billion last year.

BOISE, ID — Boise Cascade has received approval of its acquisition of OfficeMax Inc., with 72.49% of the outstanding shares represented. The deal was valued at about $1.4 billion.

ISSAQUAH, WA — Costco Wholesale Corp. had net sales for the first quarter of fiscal 2004 of $10.31 billion, up 14% from $9.01 billion during the first quarter of fiscal 2003. Same-store sales were up 11%. Net income for the first quarter of fiscal 2004 increased 10% to $160.2 million, or $.34 per diluted share, from $145.7 million, or $.31 per diluted share, during the first quarter of fiscal 2003.

DELSON, QC — For the first quarter ending November 30, Goodfellow Inc. had net earnings of $3.4 million on sales of $118.9 million. That compares to earnings of $0.41 million on sales of $128.0 million for the first quarter last year. Sales were down 7% due to the low dollar exchange rate on U.S. exports, combined with the impact of the tariffs on softwood sales.

Eric Roberts is no longer with Osram Sylvania; a mutual parting last week. No replacement named yet.

Stephanie Burns has been named CEO at Dow Corning, effective January 1, 2004. Burns, 48, replaces Gary Anderson, who will stay on as chairman.

Dunc Wilson has joined Quincaillerie Matreco Hardware. He actually started last month, but has no official title, reporting to Yves Gagnon, president of QMH. He’s working on negotiating deals for the three groups involved in the new hardware distribution company, namely Groupe BMR, AWARD and TIM-BR Mart Ontario.

Joseph C. High has been appointed senior vice-president, human resources at Owens Corning, effective January 1, 2004. Formerly vice-president human resources for ConocoPhillips, he replaces Ed Mirra, who has retired after 41 years at OC.

Torlys has appointed Cam Bowen to the newly created position of national contract sales manager, leading a team of eight builder consultants focused on growing the construction/commercial portion of Torlys’s business … Chris McNamara has joined Torlys as a flooring consultant for its Western Region. Based in Winnipeg, he is responsible for the Torlys retail floorcovering dealer network and the builder market throughout Manitoba and parts of Northwestern Ontario … Stephen Aked has been named Ontario region sales manager. He was formerly a flooring consultant for the Western Region … Aked replaces André Tesolin, who has been promoted to vice-president, operations … Steeve Guimond has joined the company as a retail flooring consultant, responsible for the Torlys dealer network in the Gaspé and Northern New Brunswick. He is based in Edmunston, NB. … Lucie Pelletier will be developing retail dealer sales in the Montreal area. She has seven years of retail sales experience in the floorcovering industry, most recently with Armstrong World Industries … Serge Crevier has also joined, as builder flooring consultant in Quebec. He was previously Quebec district manager for Armstrong World Industries. (905-612-8772)

Ed Healy has been promoted to Canadian retail sales manager for Planters’ Pride, a division of ITML Horticultural Products, a leading North American supplier of pots and containers to the horticultural industry. Planters’ Pride is the flagship retail brand of the retail horticultural division of Kord Products Inc. and ITML, which acquired Kord in 1999. (905-791-2600)

Retailers enjoyed a merry start to the holidays with a rise in retail sales in November, says the U.S. Commerce Department. However, rising unemployment is putting a damper on the numbers, especially as retail got a big lift from auto sales. Retail and food services were up 0.9%, at $322.4 billion. But excluding automotive, the increase was only 0.4%. Retail and food service sales were up 6.9% from November 2002. Excluding automobiles, year-over-year sales increased 6.5%.

Wholesale inventories in October were $291.2 billion, up 0.5% from September and up 1.9% from one year ago, reports the U.S. Commerce Department. Sales were $246.8 billion, up 2.0% from September and up 6.6% from October 2002.

Housing starts in Canada fell to 213,000 seasonally adjusted in November, from 237,300 in October, reports CMHC. Urban single starts increased 3.5% to 104,400 units seasonally adjusted, an increase reflected in all regions of the country except in the Atlantic region. Year-to-date actual starts have exceeded last year’s level by 6.5%. In November, urban single starts increased 3.5% to 104,400 units seasonally adjusted, from 100,900 units the previous month. This increase was reflected in all regions of the country except in the Atlantic region where urban single starts decreased slightly. Canada-wide, year-to-date actual urban single starts are 3.2% lower than the same period in 2002. Urban multiple starts dropped 25.2% to 82,700 units in November from 110,500 units in October. Year-to-date actual urban multiple starts increased 19.7% over the same period in 2002.

Canada’s New Housing Price Index rose 0.4% in October, down slightly from September’s increase of 0.5%. Year over year, this index of contractors’ selling prices rose by 5.0%. Victoria, BC led the way with an increase of 1.0%, followed by Calgary (+0.9%), Regina (+0.8%) and Edmonton (+0.8%).

Despite attempts to lure them out earlier, shoppers still tend to wait until the last minute, says a new report from Statistics Canada. But when they get around to it, they spend big. Last year, Canadians spent $30 billion in retail stores in the month running up to Christmas. That’s 10% of total annual retail sales, or about 1.5 percentage points above the monthly average.

“The Saturday morning breakfast with Hardlines/Hardware Merchandising will be fun and informative. The comedy duo of Steve Payne and Michael McLarney has proven in the past to be witty and a bit provocative. I sometimes think they have missed their calling…” — Dave Campbell, president of the Lumber and Building Materials Association of Ontario, referring to the education program being put on to kick off the LBMAO’s new dealer show in London, ON February 7-8, 2004.

The newest store, in Charlesbourgh, will be the first for the retailer in Quebec City. Another store already exists in St-Nicholas, near Levis on the south shore from Quebec City. Jacques Déry, general manager of Bargain, sees this latest store as an important step in developing the market right in Quebec City, and its performance will be scrutinized carefully with an eye to further expansion there.

Quebec City has experienced a rapid influx of big boxes in recent years, first by Réno-Dépôt, then Home Depot, but Déry says he’s not worried. “We are the alternative to the big boxes. What we offer the customer is different. There’s a market for it, so whether we’re going into Quebec City itself — or Montreal or Trois Rivières — it doesn’t matter. The idea is to be the alternative to the big boxes.”

Déry wants to expand, not just through corporate stores, but through franchisees, especially outside of Quebec. But a new “authorized dealer” program is also getting a lot of attention. An authorized dealership can be picked up by paint stores, flooring dealers and other specialty dealers, “especially in outlying areas where we wouldn’t normally put a store, because there wouldn’t be enough volume, or in an area that’s between two of our existing stores.”

Bargain signed up its first authorized dealer recently. Les bois Bellerose Inc. in St-Michel-des-Saints is a lumber dealer that also does some remanufacturing. The store will carry some of Bargain’s products, including its own imported tool and hardware lines under the Tomak name.

“We’ve got other people interested in our authorized dealership program, says Déry, “and we’re negotiating final agreements with some of them.” He expects to see the fruits of those negotiations by as early as next month.

“The Outstanding Retailer Awards provide a way for the industry to recognize and celebrate the best in this business,” says Steve Payne, Publisher of Hardware Merchandising. “It made perfect sense to ally ourselves with the Hardlines Conference Series, which has firmly established itself as the premier meeting place for the retail home improvement industry in this country.”

The ORA presentation will take place during a special Awards luncheon on day one of the Hardlines Conference Series, September 8, 2004.

Developed more than a decade ago by Hardware Merchandising, part of Rogers Media, the ORAs identify the best Canadian retailers in hardware, building materials, paint and specialty, and large format stores. A new category recognizes the most effective dealers serving pro and contractor customers.

This was a no-brainer for us here at Hardlines. The ORAs are the Academy Awards of the home improvement industry. We’re pleased that the team at Hardware Merchandising has chosen our Conference Series as the forum for presenting their awards. It’s an important step in establishing the Conference Series as the focal point for the entire industry to gather and share ideas. (We’ll start announcing our lineup of speakers in just a few weeks — MM)

The expansion is required to service Coop fédérée’s growing network of CO-OP hardware and home improvement stores. Over the past five years, the group has grown by 42% and now numbers 153 dealers throughout the province. This increase, combined with the creation of a new banner called Unimat for independent dealers outside the co-op, has already seen $25 million invested over the past four years to expand and renovate 57 stores.

Faced with increasing demand from independent dealers for its products, Coop fédérée created a new banner, independent from the members-only CO-OP name. Coop fédérée’s board of directors chose the Unimat banner (actually the resurrection of a name extant in the early ’90s). The response has been very positive, says Claude Gingras, director for the hardware and farm machinery sector of Coop fédérée, adding that four Unimat stores have already joined the program since its inception at the end of 2002.

“We are in a rural and semi-rural niche market where CO-OP plays a leading role,” says Gingras. “With the strength of its presence in the regions, and being owned by and for agricultural producers, the network of CO-OP hardware stores can adapt to the realities experienced by communities on the outskirts of large urban centres. We know our clients well and are capable of accompanying our affiliated cooperatives in the development and growth of their hardware stores.”

Coopérative fédérée is the fourth largest company in Quebec, with revenues of $4.2 billion.

Back in 1999, Home Depot issued its wood purchasing policy, under the auspices of Canadian president Annette Verschuren. The company’s policy gives preferential treatment to suppliers offering certified wood products.

“Today, we sell more FSC-certified wood than anyone in North America,” said Ron Jarvis, Home Depot’s merchandising vice-president in a prepared statement, adding that the Tembec deal solidifies that commitment.

Jim Lopez, president of Tembec, added that the agreement will strengthen the two companies’ business relationship and enhance the market penetration of Tembec’s FSC-certified products.

Now in its 15^th year, the show was held concurrently with three other events: Homebuilder & Renovator Expo, PM Expo and Design Trends. The event also presented a strong educational component, with 320 speakers offering 200 seminars over the course of the show.

One of the big draws was a series of sessions on “green” building. Each of the three sessions, which sold out quickly, drew upwards of 100 people.

The importance of reaching the contractor market was not limited to manufacturers of products and systems; Home Depot was there for the third year with its Commercial Direct division, selling products directly to end-users.

The deal will fold EMS into Home Depot’s San Diego-based Maintenance Warehouse subsidiary, which offers around 12,500 items through the Internet and its catalogues, with shipments and deliveries through 21 warehouses. Maintenance Warehouse is part of Home Depot’s Supply division.

EMS was started in 1985, and specializes in the supply of plumbing specialty parts such as faucets and fittings, primarily to hotels. Its 4,000-plus SKUs include appliances, drill bits, electrical, hardware, HVAC, lighting, sundries, and tools, which it distributes from its warehouse in Sterling — mostly to commercial customers along the East Coast. EMS also has an Internet-aided purchasing site.

Maintenance Warehouse provides maintenance and repair products to owners and managers of multi-housing, lodging, educational and commercial properties and healthcare providers. Home Depot does not release sales data on this subsidiary, whose annual revenue is estimated by analysts to range between US$125 million and US$150 million. John DeCanio, EMS’s president, declined to provide Hardlines with sales data about his company.

In 2002, Strober was the industry’s 21st-largest home improvement retailer, with sales of US$460 million from 43 locations.

Fred Marino, Strober’s chairman, told Hardlines that his company was interested in the Contractor Yards to expand its geographic reach into the U.S. Southeast, where Lowe’s operated these lumberyards in nine states. “We have a number of [builder] customers that are multi-regional and we felt we needed to move with them,” he explains.

Marino says Strober will run the new acquisition, along with its 950 employees, as a separate subsidiary, with its own president and management and a new divisional headquarters somewhere in North or South Carolina. He also suggests that this subsidiary could serve as a “springboard” for possible future acquisitions in other parts of the South. “Strober is a very acquisition-minded company,” says Marino.

Lowe’s stopped opening Contractor Yards after it made its commitment in the early ’90s to transform itself into a chain of warehouse home centres. It is not clear when Lowe’s started shopping its yards around to potential buyers, but the deal with Strober appears to have happened relatively quickly.

The Mooresville, NC-based retailer is expected to invest more than US$80 million in the new distribution facility, which is expected to create 525 jobs by the time it starts receiving inventory in February 2005. It will be constructed on 215 acres of land.

“We are excited about the opportunity we now have to become part of the Plainfield community,” said Lee Herring, Lowe’s senior vice-president distribution, in a prepared statement.

Connecticut has been working with Lowe’s for two years to find an appropriate site for the distribution centre, and went the extra mile to secure this deal. The state’s Urban Reinvestment Tax Credit Program granted the retailer US$20 million in tax credits, which in essence means that Lowe’s won’t have to pay nearly 60% of the estimated US$35 million in taxes this facility was expected to generate through 2013. The city of Plainfield agreed in April to construct a US$6.9 million road to the site and waive roughly US$395,000 in building permit fees and US$1.9 million in water and sewer hookup fees, according to the New London Day, a local newspaper.

A local group protesting the tax breaks and the prospect of increased truck traffic greeted Connecticut Governor John Rowland during the board-cutting ceremonies for the distribution centre, which took place at Plainfield’s Town Hall. At that ceremony, Lowe’s donated US$5,000 towards the renovation of the town’s pool.

MONTREAL — Sodisco-Howden has added a night shift to its Howden division warehouse in London, ON to increase its fill rates.

CHICAGO, IL — Home Depot is reportedly planning to open a giant distribution centre in the Chicago suburb of Romeoville, in addition to an existing warehouse in neighboring Bolingbrook. According to Crain’s Chicago Business, Home Depot is expected to sign a lease on December 15 for the 700,000-plus-sq.ft. facility in Windham Lakes Business Park, a 500-acre industrial park off Interstate 55.

LONDON, UK — Shares of Kingfisher plc jumped last week as rumours heated up — yet again — of possible interest in the company’s home improvement business by Home Depot. However, the rumours appear well-timed as Kingfisher will announce its quarterly results on December 10. Since the demerger of its Kesa Electricals division this past summer, Kingfisher has become a focused DIY retailer through its B&Q operations. B&Q is Europe’s biggest DIY retailer and recently made a foray into China. But there wouldn’t be much left of Kingfisher if its sold off B&Q, now would there?

TORONTO — Home Depot Canada has released a new a Holiday Gift Guide with everything from power tools to microwave ovens. In fact, emphasis is on soft DIY and décor, with “Ikon” branded (Y-IKEA!) book shelves, plus telephones and even crock pots. One clever gift idea is the “Crafty Kid’s Gift Box.”

ATLANTA — A gang of crooks was arrested for allegedly switching bar codes from cheaper items to high-end products such as rugs at Home Depot and Lowe’s stores in Georgia, Tennessee, Alabama, North Carolina and South Carolina. They would then go through the checkout paying low prices for the merchandise, returning later to return the products at their full value. Issued credit vouchers for the returned items, the nefarious thieves would then auction off the vouchers on eBay.

ISSAQUAH, WA — Costco Wholesale Corp. reported net sales of US$3.79 billion in November, an increase of 17% from US$3.23 billion in the same month a year earlier. For the first 13 weeks of its 2004 fiscal year, net sales reached US$11.28 billion, up 15% from US$9.83 billion a year earlier. Same-store sales for November were up 14%, boosted by a weak dollar and labour unrest at Southern California grocery chains

BENTONVILLE, AK — Claiming the fees are too high, Wal-Mart says it will no longer accept MasterCard signature debit cards at its U.S. stores. It will, however, continue to accept the credit cards.

STELLARTON, NS — Sobeys Inc., the giant Canadian grocery chain, is buying Commisso‘s 15 Food Markets stores and the wholesale business of Commisso’s Grocery Distributors group of companies in Southern Ontario. The sticker price is $65 million.

Residential construction in Canada remains hot, reaching $17.6 billion in the third quarter, says Stats Canada. That’s up 11.1% from the $15.8 billion invested in the third quarter of 2002. This robust growth reflects steady increases in all three components of residential construction investment, namely new housing, renovations and acquisition costs. Since the start of 2003, the value of investment in the housing sector has reached $45.3 billion, up 11.2% from the first three quarters of 2002.

The value of building permits fell 4.9% in October, reflecting a drop in both the residential and non-residential sectors. October’s drop left the overall value of permits for the month at $4.3 billion. Residential permit values fell 3.3% from September’s record level to $2.8 billion. The value of non-residential permits, meanwhile, slid 7.7% to $1.5 billion.

Construction in October in the U.S. was US$922.0 billion, up 0.9% from September and up 7% from one year ago, reports the Commerce Department. Private construction was US$697.4 billion, up 0.8% from September, and public construction was US$224.7 billion, up 1.2%.

We’ll send a welcome gift card indicating this “gift of knowledge” is from YOU!

HERE ARE OUR RATES:
A primary subscription is only $219.00 per year. Secondary subscribers within the same company pay only $34.00 – these subscribers must be physically working at the same office location.

Branch offices get a special rate of $135.00 for their primary subscriber and the usual $34.00 for subsequent subscribers at the same location.

Regional Sales Managers working basically on their own but affiliated with the home office, also have a special rate of $68.00 per year after a primary subscription has been purchased.

Volume Discounts Available – Call Nancy Wright (416) 489-3396

REMEMBER: Santa & Hardlines only take Christmas orders until December 24, 2003.

For travel arrangements, contact Carol-Anne Itel at Trade Show Travel, 877.873.7469; tradeshowtravel@shaw.ca

Nevertheless, as big box growth in Canada begins to face saturation, the market share of the independents has begun to stabilize. The remaining players in the independent sectors are themselves undergoing a new wave of consolidation, making the remaining players stronger – and more competitive – than ever.

Also in this issue of HQR, get a telling insight into the buying patterns of women home improvement shoppers. Do they prefer price or convenience? (a special preview of our exclusive Study, “Women in Home Improvement,” conducted for us by ACNielsen). You’ll find the full report in our 1Q 2004 issue of HQR.

Taking a page from the big box book, Canadian Tire has finally unveiled its latest store concept. What are the competitive implications of this format? HQR brings you exclusive photos and explanations of the 20/20 format.

In addition, each issue of HQR features updated housing and economic indicators for the latest quarter and forecasts for the year ahead.

LIMITED TIME OFFER: Get 10% off the old rates! Subscribe by January 30^th, 2004 to take advantage of this exciting offer – pay only $359 + taxes.

The offer involves Slocan shareholders receiving 1.3147 Canfor shares for each Slocan share. Upon completion, the combined company will be the largest spruce/pine/fir lumber manufacturer in the world, with the second largest lumber capacity in North America.

They met last Friday for a gala dinner at the Westin Bayshore here to toast – and roast – the outspoken Sali, who over the years has carried a reputation as Canada’s toughest negotiator. On hand was a virtual who’s who of the industry, including some of the most successful dealers in the West and top executives from the vendor community. Also on hand were Sali’s wife, Roxanne, and their two sons, Max and Harrison.

Tim-BR-Marts is a part of the umbrella group Matreco, and fellow Matreco executives took the podium to pay tribute. Tom Smith of AWARD, Yves Gagon of Groupe BMR and Don Nash of TIM-BR Mart Ontario all paid their respects, and awarded him with a Baume et Mercier watch.

Sali started in 1970 as general manager of the Tim-BR-Marts, which at the time had 18 members and $1 million in sales. today, the group represents more than 150 stores, with combined annual sales that exceed $1 billion.

Sali has been succeeded by Tim Urquhart, who takes the president’s title effective January 1, 2004.

“Finding good quality employees is an ongoing challenge for every retailer,” says Brenda Dumont, President of canadianretail.com. “Hardlines, through its website, hardlines.ca, and www.canadianretail.com are pleased to bring the power of the Internet to Hardlines subscribers.”

“With canadianretail.com’s powerful job board capabilities at their fingertips through our own website, our readers can now improve significantly their ability to attract good quality employees,” says Michael McLarney, Editor and Publisher of Hardlines.

Internet Recruiting is becoming the recruiting method of choice, with over 80% of all job seekers now searching for new job opportunities online. Through this partnership, home improvement/home decor retailers and wholesalers who visit Hardlines.ca can enjoy preferred job posting rates on canadianretail.com.

With nearly 450 retail jobs advertised daily on canadianretail.com, job seekers can see the diversity and range of jobs available in the retail industry in Canada. One in nine Canadians work in the retail industry – a jobsite designed strictly for this huge sector was essential.

canadianretail.com is the only job board in Canada focused solely on the retail industry. Established in 2001, canadianretail.com provides strictly retail job postings plus information on retail education and retail as a career. For more information, contact: Brenda Dumont at bdumont@canadianretail.com.

With the money, Bradco Supply will turn around and purchase, then lease back, two Wickes properties, one in Walden, NY and the other in Exton, PA. In addition, Wickes senior management has agreed to purchase all of the 1.3 million shares of Wickes common stock owned by Segal, Bradco and their affiliates, giving the senior management team more than 15% interest in the company upon completion of the exchange offer.

“This arrangement has the potential to be a real win-win for our employees, for our noteholders and stockholders, and for everyone else interested in contributing to Wickes’ success,” said Jim O’Grady, president and CEO of Wickes, in a prepared release.

TORONTO — Hudson Bay Corp.‘s profits in its third quarter rose 12% to $8.6 million on flat sales. The company said net earnings in the three months ending October 31 amounted to 8 cents per share, matching analysts’ expectations. Sales were $1.71 billion, almost identical to sales in the same period in 2002.

MOLINE, IL — Deere & Co. are reporting worldwide net income of US$70.6 million for the quarter and US$643.1 million for the year ended October 31. This compared with net quarterly income of US$68.0 million and yearly sales $319.2 million.

Kent Rombough has been appointed Ontario Plywood Specialist for CanPly, the Canadian Plywood Association. He was formerly with Riverside Forest Products. After training in Vancouver, Rombough will operate from his office in London, ON. (Try the head office for now: 604-981-4177)

Home Depot has announced some changes to its board of directors: William Davila, 72, president emeritus of The Vons Cos., and a member of Home Depot board since 1999, has reached the company’s mandatory retirement age and won’t be eligible for re-election at the completion of his term in May 2004 … Richard Grasso, former chairman of the New York Stock Exchange and a member of the board since 2002, has confirmed an earlier decision not to stand for re-election at the completion of his current term in May 2004.

Canadians kept an eye on their pocketbooks in September as retail spending dropped 0.8% to $26.4 billion, Stats Canada reports. The first decline in five months, it follows a 0.3% sales increase in August. However, third-quarter sales increased 1.1%, after remaining essentially unchanged in the second quarter. Previously, retail sales had been generally increasing since the fall of 2001. In constant dollars, retail sales fell 0.8% in September but rose 1.0% in the third quarter.

Wholesale sales in Canada reached $36.6 billion, a 6.1% increase over the previous month, according to Stats Canada. All trade groups posted an increase. Before this, sales had been generally trending downwards since the start of the year, after mainly rising from fall 2001 to January 2003.

Canada’s composite index increased by 0.6% in October after an 0.8% hike in September, says Stats Canada. Household demand, dominated by the housing market, spurred the increase. All the indicators related to household demand improved, dominated by the housing sector. Housing has accelerated every month since a dip in April 2003, with a 3.6% jump in October raising the level to a 30-year high. Both housing starts and existing home sales contributed to this record-setting performance.

Gross domestic product in the third quarter in the U.S. rose a whopping 8.2% seasonally adjusted, more than double the 3.3% gain in the second quarter – and the strongest quarterly advance in almost 20 years. A month ago, says the Commerce Department, GDP advanced at a 7.2% rate.

We’ll send a welcome gift card indicating this “gift of knowledge” is from YOU!

HERE ARE OUR RATES:
A primary subscription is only $219.00 per year. Secondary subscribers within the same company pay only $34.00 – these subscribers must be physically working at the same office location.

Branch offices get a special rate of $135.00 for their primary subscriber and the usual $34.00 for subsequent subscribers at the same location.

Regional Sales Managers working basically on their own but affiliated with the home office, also have a special rate of $68.00 per year after a primary subscription has been purchased.

Volume Discounts Available – Call Nancy Wright (416) 489-3396

REMEMBER: Santa & Hardlines only take Christmas orders until December 24, 2003.

For travel arrangements, contact Carol-Anne Itel at Trade Show Travel, 877.873.7469; tradeshowtravel@shaw.ca

The event will kick off another chapter in the legacy of this important buying show – the only trade show that has a mandate to serve the entire $29.6-billion retail hardware/home improvement industry on a truly national basis. The event also ties in with Hardlines’ own celebration – of its 10th year in operation.

“The readership of Hardlines includes the key retail buyers in this industry,” says Bob Elliott, President of the Canadian Retail Hardware Association, which owns CHS. “These are the very people whose attendance marks the success of CHS.”

To celebrate the enduring legacy of CHS, your faithful editor and publisher, Michael McLarney, will emcee a celebration of the show and its contribution to the industry over the years. In addition, the Grand Opening Breakfast will pay tribute to many of the individuals who have made their mark in hardware/home improvement retailing over the years.

In the three months ended October 31, each chain reported sizable gains in their sales and profits, and both vowed to continue their aggressive store-opening strategies. Home Depot was a bit more upbeat than Lowe’s in predicting what its fourth-quarters numbers might be, but what seems clear is that both business models can claim to attract a wide range of home improvement shoppers.

Atlanta-based Home Depot generated in excess of US$16.60 billion in sales during the latest quarter, or 14.7% more than the same period in 2002. Sales from its stores opened more than one year, which has been the company’s Achilles’ heel over the past two years, rose 7.8%, its highest same-store sales gain since the fourth quarter of 1999. And Home Depot’s earnings shot up 22% to US$1.15 billion. Through nine months, Depot earned US$3.35 billion, or 12.6% more than in 2002, and its sales for this period increase 10.3% to US$49.69 billion.

In its latest quarter, Depot saw increases in its customer transactions (up 9.4%), which company officials said were abetted by the self-service checkouts that have been installed into 760 stores and accounted for 40 million of the 313 million sales transacted during those three months. The company’s average ticket also rose by nearly 5% to US$52.10 per shopper. In the quarter, Depot opened 36 new stores (including its 100th unit in Canada), bringing its total to 1,643. And one key component of the company’s business strategy – installed sales – increased 45% in the quarter.

Bob Nardelli, Home Depot’s chairman and CEO, attributed his company’s financial performance to its investments in technology and store remodeling, and claimed that his company increased its market share during the quarter. Still, Lowe’s business continues to expand, too. Perhaps the strongest barometer of that growth was the Mooresville, NC-based retailer’s 12.4% increase in same-store third-quarter sales, which was the highest percentage gain in the company’s history, according to its chairman and CEO Bob Tillman. Through the first nine months of its fiscal year, same-store sales were up 6.5%.

In the third quarter, Lowe’s earned US$452 million, or 33.3% more than its profits in the comparable period in 2002. During the most recent quarter, its overall sales jumped 23.5% to US$7.92 billion. Through nine months, the chain’s sales increased 17.4% to US$23.90 billion (which is more than Lowe’s generated for the entire 2002), and its earnings grew 27.5% to US$1.47 billion. Its average ticket in the third quarter topped US$60 per transaction for the first time in Lowe’s history.

Both organizations are harmonized under NAFTA, but each has traditionally considered UL the organization for the U.S. and CSA for Canada. However, CSA is no longer a government agency, and is seeking to brand itself more universally – and, in turn, build revenue – by establishing itself as a truly North American standards body.

And now, thanks to two of North America’s largest hardlines retailers, CSA’s role in product testing is taking on a new dimension.

Both Lowe’s and Canadian Tire have approached CSA to conduct “performance tests” on a range of products in their stores. The need from the retail side comes from the fact that so much product is sourced offshore that, despite adherence to compliance standards under either UL or CSA, the standard of quality from an end-user’s perspective may be lacking.

According to Grant Carter, CSA’s vice-president of marketing and communications, these retailers recognized the benefit of using CSA because it has established credibility among both manufacturers and consumers. “Even though no mark is put on the products after this kind of testing, retailers are confident in our 85 year-plus history of expertise in testing,” says Carter. “Especially as more and more product is coming from offshore, this testing will ensure that this stuff is of the highest integrity, so as not to disappoint their customers.”

The new testing program, tentatively called “Consumer Product Evaluation for Retailers,” is in a start-up mode right now with Canadian Tire and Lowe’s, but Carter expects it to roll out early in 2004. He says there’s huge growth opportunity in this kind of testing, especially in plumbing, electrical, gas related products and personal protective equipment – and it’s growing by 20% a year.

As an example of the kind of testing that might be done under the new program, a retailer could ask for a number of barbecues from competing suppliers to be evaluated for things such as heat consistency over various parts of the grilling surface, or even on how many pieces are left over after assembly.

CSA’s new mandate is getting from heavyweight guidance from some of the retailers themselves. Greg Thomas of Alliance International LLC has joined the board of directors of CSA, along with other retailers such as Paul Straus of Home Hardware Stores Ltd., and David Grubbe, former CEO of TruServ Canada, who has been active within CSA since before his retirement from that co-op wholesaler.

The rollout in Quebec, completed last month, involved converting 75 Sodisco-Howden customers, including all of its Ferplus and Bâtitout stores, to Ace. Now, says Sodisco-Howden president and CEO Jos Wintermans, the publicly traded wholesaler is mounting an offensive to drive the program in the rest of the country.

Sodisco-Howden purchased the shares of Ace Hardware Canada Inc. from Ace Hardware Corp. in Oak Brook, IL in February, 2003. The deal gives Sodisco-Howden’s independent dealers who sign on with Ace access to a wide range of Ace programs and private-label products.

Paul Ingevaldson, senior vice-president international and technology for Ace, is pleased with the progress the banner is making in Canada, since Ace itself retreated from this market. “It’s been going very well,” he notes.

Wintermans expects to have about 200 Ace stores by the end of 2004.

The recent news that Ace Hardware Corp. would replace National Manufacturing with their own private-label hardware line was met with a mixture of opportunistic delight bound up in concerns that Ace’s move is anti-American and will cost more jobs back home.

However, in the end, the potential to source product cheaper – up to 25% cheaper, in this case – will likely prove too attractive for most independents trying to compete against large-format competitors.

Paul Ingevaldson, senior vice-president international and technology for Ace, admits a trend is emerging of retail customers bypassing raditional vendors, many of whom simply go to a foreign source themselves. “The trend is to get away from third-party deals and go direct.”

In fact, the trend to move closer to the source of supply began with retailers such as Wal-Mart and Home Depot, which have led the way in sourcing products themselves out of the Far East. According to a recent article in the Toronto Star, Wal-Mart accounts for about 10% of all imports by the U.S. from China. Canadian Tire has had offices in Hong Kong and Seoul for decades. “We’re looking at offices in Shanghai and Beijing,” says Mark Foote, president of Canadian Tire Retail.

“If you can’t operate in the Far East, you’re cooked,” he says, “especially if you’re in the retail branded product line.”

Others are following at a rapid rate. Ace will open its first Asian office early next year, while B&Q in the UK. already has one, and Orgill put one in place in Shanghai back in the spring.

The Memphis-based wholesaler has had an office in Tapei for many years, but the Shanghai office puts the company in the heart of what Ron Beal, senior vice-president and general manager of Orgill’s hardware division, calls the “centre of the new China.”

In fact, in many cases, Taiwanese suppliers are establishing factories of their own in China. “A considerable amount of product in Taiwan is now being produced in Mainland China,” says Beal.

The push to get product cheaper is coupled with the rising importance of private labels and proprietary brands. Companies such as Canadian Tire and Home Depot and are increasingly able to develop these brands directly with the factories themselves.

Foote at Canadian Tire believes two of the three best-known brands in power tools in Canada are private brands: Craftman by Sears, Canadian Tire’s own Mastercraft, followed by Black & Decker. However, he adds, “retail brands are enormously important, and a growing area for Canadian Tire.”

However, many of those brands, although nationally known, are in fact proprietary, including Schwinn and Raleigh in sporting goods, and the company’s own Yard Works and Persona lines in garden and kitchenwares respectively. Ridgid and Ryobi at Home Depot are examples, as well.

Marc Dufresne, executive vice-president of purchasing and logistics at Rona Inc., admits that his company is placing greater importance on products from the Far East, “But we believe as much as possible in sourcing Canadian products,” he adds. However, Rona’s private-label lines have grown by more than 15% since last year to about 1,500 SKUs today. Private label now accounts for about 10% of Rona’s total sales, and Dufresne sees it growing to as much as 15-18%.

The latest announcement builds on a long-standing strategic alliance between the two organizations. TruServ, a full-line hardware wholesaler based in Winnipeg, maintains only a licensing arrangement with its counterpart in the U.S. and shares none of the U.S. co-op wholesaler’s financial woes. It has been a preferred supplier to Castle’s 255 member stores across Canada for almost a decade. But the agreement came with restrictions, including, at one point, the requirement that Castle dealers co-brand with the True Value banner.

The deal never really worked to the full satisfaction of both sides, admits Pro Wylie, president of Castle. The new agreement simplifies things, offering a more straightforward wholesale arrangement that gives Castle dealers a choice of whether to join True Value or simply use TruServ on a supply basis. It also reduces up-front costs and builds in a provision for rebates to Castle dealers based on volume of purchases.

Roughly two-thirds of the expenditures were devoted to contract work, while the remaining one-third represents materials purchased by the homeowners themselves. The split in how homeowners spend their renovation dollars remains unchanged from previous years.

A total of $23.4 billion was spent by homeowners buying materials or paying contractors for repairs and renovations in 2002, an increase of nearly 11% from 2001, and about 75% higher than the decade low of $13.4 billion in 1996. (NOTE: Stats Canada figures indicate homeowner expenditures, and not total hardware and home improvement sales at retail. For full details on the size of the Canadian market at retail, you’ll want to check out our Retail Report CD — MM)

MOORESVILLE, NC — In a move that will change the company completely over to the big box format, Lowe’s Cos. has entered into an agreement with The Strober Organization, based in Brooklyn, NY, to sell 26 commodity-focused yards operating under Lowe’s The Contractor Yard banner. Stober’s has 45 stores in seven states, from New York through to Virginia and west to the Mississippi, and US$463 million sales, following a couple of years of acquisition. The deal is expected to close by the end of the year. Strober claims this deal will make it the seventh largest pro dealer in the U.S.

VANCOUVER, BC — Canadian Forest Products has received certification of tracts of land in the northern interior of British Columbia, under the CSA’s Sustainable Forest Management standard. The latest audits put Canfor’s Houston operations in the Morice Timber Supply Area and the Fort St. John Timber Supply Area Pilot Project under the SFM standard. The two certifications will add about 1.8 million cubic metres of Canfor’s annual harvest to existing certifications, resulting in a total of 8.5 million cubic metres, or 91% of Canfor’s total, being certified to sustainable forest management standards under either CSA or SFI.

BARRIE, ON — For the first time next year, Can-Save will host its annual Buying Expo outside of its own warehouse. Due to an increase in volume and attendance, the Ontario-based building materials wholesaler will hold the event in the Barrie Curling Club on June 17, 2004.

ATLANTA — Home Depot will extend its support of the Olympics and the Paralympics to 2008, renewing an agreement that was set to expire next year. The giant retailer has been investing heavily in its support of sporting events, including the sponsorship by Home Depot’s Canadian division of NHL hockey. Home Depot will also increase its employment program for Olympic athletes, providing them with full pay for a flexible 20-hour work week.

TORONTO — Staples Business Depot and Grocery Gateway have announced an online partnership for product deliveries in the Greater Toronto Area and Southern Ontario. A small range of office supplies, such as toner and scissors, are now available through Grocery Gateway’s website www.grocerygateway.com. Additional products will be added over the coming months. Staples joins Home Depot Canada and the LCBO as companies using Grocery Gateway’s network of delivery trucks to ship products.

BRANTFORD, ON — The Nu-Gro Corp. has completed the sale of its commercial Ice Melt business in Tillsonburg, ON to the Kissner Group, Cambridge ON. Nu-Gro also entered into a supply agreement with Kissner related to the packaging of consumer Ice Melt products. Nu-Gro’s brand names include CIL, Wilson, Vigoro, Pickseed, So-Green and Plant-Prod. Through its subsidiaries in the U.S. and Canada, the company makes controlled-release nitrogen raw material for the fertilizer industry worldwide.

DUSSELDORF — The Henkel Group reported a substantial 12.4% increase in operating profit for its third quarter to 172 million euros, as sales rose by 3.8% to 2.4 billion euros after adjusting for foreign exchange effects. In the first nine months of 2003, the Henkel Group realized sales totaling 7.1 billion euros and an operating profit of 520 million euros. Sales at the Consumer and Craftsmen Adhesives business sector in the third quarter rose by 8.3% over the prior-year figure after adjusting for foreign exchange effects.

OAK BROOK, IL — Fast-food giant McDonald’s is taking bold steps to leverage its brand into other areas. It’s launching a massive product licensing initiative called McKids, with everything from action-oriented toys and interactive videos and books to casual clothing (extra-large sizes, I expect — Editor). In what is yet another aspect of its ongoing effort to revitalize the company, none of this stuff will be sold in McDonald’s restaurants (maybe a clue there — Editor), but they’re trying to get it into Wal-Mart, Toys R Us and Target by next spring.

Eric Peterson, a 10-year veteran of Home Depot, has been named president, strategic markets, based in Atlanta. In this new position, Peterson will be responsible for optimizing operations, in-store merchandising, store prototypes and human resource strategies within targeted growth markets. Peterson most recently served as Division President of the company’s Northwest division based in Seattle, WA. Before that, he was vice-president merchandising for Home Depot Canada… Home Depot will also combine its Northwest division into its Western division. Bruce Merino, president of the Western division, will take the helm in the existing Orange County, CA facilities.

Housing starts are expected to reach 204,100 units in 2004, after reaching a 14-year high in 2003, says CMHC. Consumer confidence and low mortgage rates combined with recovering employment growth, are considered important factors in the buoyancy of the market, which is expected to remain strong into 2004

The Consumer Price Index rose only 1.6% in October, showing signs that inflation is at its lowest level since June 2002. Lower prices for electricity, gasoline, clothing and automobiles all helped, said Statistics Canada.

Residential construction in the U.S. reached its highest level in 17 years, says the Commerce Department. Housing starts reached 1.96 million units seasonally adjusted, up 2.9% from September. October’s high marks the strongest month for residential starts since January 1986. Single-family starts were strongest, at a record high pace of 1.62 million units, up 5.7% from September. Multiple starts, namely apartments, condos and other multi-family dwellings, declined by 3% to 319,000 units seasonally adjusted.

His “inside track” on the Home Depot fast track to success made Caulfield a natural to be interviewed for the A&E program “Biography,” when it airs an episode on Home Depot on November 26 at 8 p.m. EST, as part of a week-long series called “Shop Till You Drop.”

Caulfield enjoyed ongoing access to the company’s founders, Bernie Marcus and Arthur Blank, and to other key Home Depot executives, as the retailer rose from its humble beginnings in California more than 25 years ago to a chain of 1,643 outlets and 300,000 associates today.

For travel arrangements, contact Carol-Anne Itel at Trade Show Travel, 877.873.7469; tradeshowtravel@shaw.ca

Standing last week in front of the same group, Dutton affirmed the pride he has in his team, for bringing Rona’s growth plan closer to reality. “The Rona brand is solidly established in Ontario and Western Canada.”

He gave some insights into the future of Rona’s latest acquisition, Réno-Dépôt. The name is well known in Quebec, mainly in Montreal and Quebec City, and will continue to operate under this banner for the near term. The Building Box name, however, is much newer and much less well established in the Ontario market. Those stores will be converted within the next year to another banner, but he did not say concretely that they would become Rona Home & Garden stores, like Rona’s other big box stores in English Canada. “The Building Box banner is not so well known, so our team is working on which banner to go with.”

The company has yet to determine if the Réno-Dépôt name will be phased out over the long term, or in fact repositioned as another banner for Rona, representing a more traditional, contractor-friendly big box format.

He added that Rona expects to build an additional six big box stores over the next eight months. “They could be Réno-Dépôt, they could be Rona or they could be Building Box,” he said. However, based on his previous comments that night, it’s not likely to be the latter. In fact, the next three, in Edmonton, Regina and Kitchener-Waterloo, will all be Rona Home & Garden stores.

“Five years ago, we were leaders in Quebec. Now, thanks to the strength of our team, we are leaders right across Canada,” Dutton concluded.

One of Canada’s leading hard goods retailers, Canadian Tire had total retail sales in the third quarter of $1.93 billion, up 4.6% from $1.84 billion in 2002. Consolidated gross operating revenue for the quarter increased 7.3% to $1.56 billion compared to $1.46 billion in 2002.
The company realized an increase in its consolidated net earnings of 13.9% to $56.6 million for the third quarter, from $49.6 million in 2002. Net earnings, excluding non-operating gains and losses, were up 11.7% to $55.4 million from $49.6 million.

“Canadian Tire has delivered another strong quarter and we are pleased with our sales and earnings momentum heading into the all-important fourth quarter,” said Wayne Sales, president and CEO of Canadian Tire, in a prepared release. “We are confident in our ability to meet our established objectives and targets for the year, as all of our businesses are performing well and we continue to make good progress in implementing our strategic agenda.”

Canadian Tire opened four new-format 20/20 stores recently, and plans to open 19 new stores in total by the end of this year.

Consolidated gross operating revenues rose 8.9% to $4.65 billion from $4.27 billion last year. Net earnings increased 10.4% from $138.5 million to $153.0 million for the first nine months. Excluding non-operating gains and losses, net earnings were up 11.2% to $148.7 million from $133.6 million in 2002.

For its retail operations in the Canadian Tire Retail division, third-quarter sales were up 3.7% to $1.6 billion from $1.5 billion in 2002. Same-store sales increased by 1.9% from the third quarter of 2002. Sales growth was led by strength in the automotive, housewares and lawn and garden categories.

There was a big emphasis on certain areas, namely seasonal, which was double last year’s size, plus a big push on the private-label offerings, which have grown since last year by more than 15% to about 1,500 SKUs.

Buyers are looking for more integration of product lines, as well. For example, patterns found in a series of glassware are replicated on the surface pattern of a patio table.

The biggest cohesive push was toward a decorating mindset in presentation of products. “We believe décor overall is more and more a trend driven thing,” said Marc Dufresne, executive vice-president of merchandising for Rona. By example, he said, “Even millwork is a décor element. It’s not just a millwork product.”

The new millwork presentation was perhaps one of the most dramatic at the show, a large display with overhead in-use photocards atop a range of actual mouldings in suggested applications on the wall. Below were a series of labelled drawers, inside which were more ideas, complete with pictures and profile diagrams of the moulding style. Much like Ikea, customers can then note the number of the moulding, then go to the stack of moulding nearby to complete their selection.

Here, as in other cases, Rona has relied on suppliers to bring them ideas. The millwork section was developed with Roland Boulanger.

Other innovations included an expanded Ambiance program, Rona’s “store-within-a-store” concept that showcases décor accessories — everything from window coverings and linens to plateware and candles.

The Rainforest Action Network here has launched a new attack campaign against the Sustainable Forestry Initiative, the forest management and certification program developed a decade ago by the American Forest & Paper Association. Michael Brune, RAN’s executive director, told Hardlines that his organization’s campaign is a response to the aggressive marketing effort by the industry over the past several months to promote SFI through media outlets such as Forbes magazine, the Wall Street Journal and National Public Radio.

“SFI’s advertising doesn’t reflect what’s happening on the ground,” says Brune, citing what he sees as a failure of SFI’s standards to protect forests’ ecosystems, limit clear cutting or protect old-growth forests. In a prepared statement, Brune called SFI a “phony green label,” which on RAN’s website is shown — without a hint of irony — being cut down by a chainsaw.

Michael Klein, a spokesman for AF&PA, countered that RAN has long been against commercial logging (something RAN officials don’t dispute, for the most part, especially in national forests). He insisted that RAN’s claim that the industry dictated the standards used under SFI protocols was inaccurate. In July 2000, AF&PA placed SFI under an independent 15-person Sustainable Forestry Board, which in 2002 was granted non-profit status.

That the battle between competing certification and forest management schemes is heating up again was evinced by Montreal-based Domtar‘s announcement last week that it has agreed, in concert with the World Wildlife Fund Canada, to certify all of its forests and mills to Forest Stewardship Council standards, subject to the successful completion of two pilot projects. FSC’s standards are the only ones that RAN supports. However, there are only 21 million acres of forests in North America certified under FSC, compared to 136 milion enrolled in SFI’s program, according to its Web site. SFI also makes note of the fact that, since its inception in 1995, forest companies subscribing to its standards have planted more than 4.6 million trees.

Brune says his group’s goal has always been to reach some level of agreement with industry about certifying forest management practices. “And I think SFI will continue to make incremental improvements. But we’re still a ways away from each other.”

However, CSA has been accepting the UL mark on components for many years, says Grant Carter, CSA’s vice-president of marketing and communications. Now UL will accept the CSA mark on components. For example, a switch for an electric drill that’s already been approved under CSA would not have been accepted by UL, when that switch turned up in a power tool seeking approval by the U.S. body.

Carter called the accord “a very important win for producers of components and end-products covered under the agreement.” It’s also an important step in enabling CSA to establish its credentials as a truly North American standards organization. “All we’ve asked for as a company is a fair shot at the market.”

However, he adds, it’s not comprehensive, covering about 30%-40% of the components market. “The agreement won’t address the needs of all our electrical manufacturers, but I expect it to be expanded in time.”

CSA, although it has its roots in Canada, now has more offices in the U.S., and its second-largest office is in Cleveland.

However, after a year during which it has sold off 38 of its yards and four component plants, Wickes continues to lose money. In its most recent quarter, the company reported a net loss of US$3.3 million, compared with a US$2.2 million loss in the third quarter of 2002. Through the first nine months of its fiscal year, Wickes has lost US$48.4 million, compared to a US$362,000 loss in that same period last year. Now down to 52 yards, Wickes generated US$372.7 million in revenue through nine months, a 17% decline from the nine-month totals in 2002.

The world’s largest retailer, which employs more than 1.7% of the U.S. workforce, expects its fourth-quarter profits to be slightly below analysts’ projections, as they were in the third quarter, when the company’s net income rose 13% to US$2.03 billion and revenue increased by the same amount to US$62.5 billion. Same-store sales for its stores in the U.S. were up 6.1% in the quarter.

Lee Scott, Wal-Mart’s CEO, said that while consumers continue to spend, “I don’t see the strength many of you in the investment community appear to see. We’re seeing cautious customers … timing their expenditures around the receipt of their paycheck, indicating liquidity issues.” He noted that there’s still a lot of concern among consumers about unemployment rates, despite third-quarter indicators of significant shrinkage in jobless claims.

THUNDER BAY, ON — Bob Nardelli, chairman, president and CEO of Home Depot in Atlanta, made a rare visit to Canada last Thursday to join Annette Verschuren, president of both Home Depot Canada and EXPO Design Centers in the U.S. for the opening of the Canadian division’s 100th store in this city in Northern Ontario.

OAK BROOK, IL — For the third quarter ended September 27, Ace Hardware Corp. had wholesale hardlines sales of US$768.8 million, up 3.4% from sales of US$743.3 million for the same period in 2002. 3Q net earnings were up 3.0% to US$33.0 million, compared with US$32.0 million a year ago. Sales for the nine-month period were US$2.323 billion, an increase of 1.9% over sales of $2.279 a year earlier, while net earnings for the nine-month period were up nearly 11% to US$81.8 million, from US$73.8 million.

ATLANTA — Home Depot continues to buy up companies that provide installation services to its customers. The giant retailer has announced the signing of a definitive agreement to purchase RMA Home Services, which has been installing replacement windows and siding for the chain since 1998. RMA is the third-largest installer in the US$7.9 billion window and siding replacement market. The deal is expected to close next month. Terms were not disclosed.

DALLAS, TX & CASHIERS, NC — In its third acquisition announcement in a month, Builders FirstSource has signed a letter of intent to buy Bond Builders Supply Inc. of Cashiers, NC. Builders FirstSource already has a store in Brevard, NC, about an hour and a half away. Terms of the acquisition were not disclosed, but the deal is expected to close before the end of the year.

MONTREAL — Domtar Inc. and World Wildlife Fund Canada have signed an agreement on forest stewardship that commits both organizations to work together to ensure the long-term conservation of forests in Canada. The agreement involves Domtar agreeing to certify all of its forests and mills to the standards of the Forest Stewardship Council, subject to the successful completion of two pilot projects.

BENTONVILLE, AK — Wal-Mart reported third-quarter net income of US$2.03 billion, up from US$1.8 billion a year earlier. The results in the year-earlier period included earnings of US$17 million from discontinued operations. Sales rose 13% to US$62.48 billion from US$55.24 billion a year earlier, as U.S. same-store sales rose 6.1%. The Wal-Mart division’s sales were up 13% to US$42.39 billion. Sales at Sam’s Club increased 11% to US$8.61 billion and international sales grew 16% to US$11.49 billion.

ATLANTA — Home Depot released its first-ever holiday catalogue. Entitled “Holiday Inspirations,” the 68-page tome, featuring more than 250 holiday gift items, is being sent out to five million Home Depot customers as part of an expanded multi-channel marketing initiative designed to enhance Home Depot’s appeal as a holiday shopping destination (so where’s our copy? — Editor)

MONTREAL — Tembec‘s consolidated gross sales for the fiscal year ended September 27 were $3.3 billion, down 1.3% from the prior year. Net earnings climbed to $11.4 million, after a net loss of $116.2 million in fiscal 2002. For its fourth quarter, Tembec had gross sales of $838.6 million, down from $877.1 million in the same period last year. The company narrowed its 4Q net loss to $51.5 million, from $77.2 million $70.5 million in the previous quarter.

CORTE MADERA, CA — Restoration Hardware had third-quarter sales of US$95.8 million, an increase of 6% from $90.8 million in the third quarter a year ago. Same-store sales were up 3%. Net sales for the Direct-to-Customer division, which includes catalogue and Internet sales, increased 46% on top of a 66% increase last year. Same-store sales for the quarter increased 3%, on top of a 15% increase in last year’s third quarter.

LONDON, UK — Kingfisher plc, Europe’s leading home improvement retailer, saw third-quarter sales from its home improvement businesses grow 13.3%. Same-store sales were up 3.6%.

Bill Morrison, has joined TruServ Canada Cooperative Inc. as president and CEO. Morrison, whose cv includes Footlocker Canada and HDS Retail, was most recently general manager of Home Outfitters, the home décor division of Hudson’s Bay Corp. He replaces Leo Charrière, who left the dealer-owned co-op earlier this year to join the North West Co. Morrison will oversee the growth of Winnipeg-based TruServ’s banners, True Value Hardware, V&S Department Stores, V&S Options, and Country Depot. (205-453-9511)

David Giguere has been moved over from the Réno-Dépôt team at Rona to become vice-president of strategy and development. He was formerly vice-president of marketing at Réno-Dépôt. In this newly created position, Giguere will elaborate and refine the big box and traditional formats at Rona for the future. … James Jones, formerly general merchandising manager for Réno-Dépôt’s Building Box stores in Ontario, is now vice-president of operations for Rona’s big box stores in Ontario, comprising the Rona Home & Garden banner and the newly acquired Building Box stores … Luc Nantel, formerly vice-president merchandising for Réno-Dépôt, is now vice-president merchandising for Rona and Réno-Dépôt. His duties include overseeing the harmonization of the Rona and Réno-Dépôt product lines, which together represent 180,000 SKUs. (514-599-5100)

Kingfisher plc has announced a number of changes to its executive team: Bill Whiting will retire from the board in February 2005 and from his current position as CEO of B&Q at the end of the current fiscal year, January 31, 2004 to take up a part-time executive role reporting to Gerry Murphy, Group CEO … Whiting will be succeeded as CEO of B&Q by Rob Cissell, who is being promoted from his current position as B&Q’s managing director, commercial … Helen Weir will resign as group finance director. She will also step down from the board at the end of this financial year … Duncan Tatton-Brown, currently finance director of B&Q, will join the board as group finance director. He joined B&Q in 2001 … George Adams, currently group commercial director is being promoted to the new post of CEO, commercial reporting directly to Gerry Murphy.

The New Housing Price Index rose 0.5% in September, unchanged from August’s monthly increase. On a 12-month basis, the index of contractors’ selling prices rose 5.1%.

The composite price index for non-residential construction in the third quarter was up 0.6% from the second quarter and 3.3% from the third quarter of 2002. The year-to-year percentage changes for each of the last three quarters were the highest measured since an increase of 3.7% in the second quarter of 2001.

For travel arrangements, contact Carol-Anne Itel at Trade Show Travel, 877.873.7469; tradeshowtravel@shaw.ca

He spoke at the recent Sodisco-Howden Fall Market, which attracted 2,000 people representing 900 stores, 35% of them from outside Quebec.

Both in front of his dealers and in private conversations, Wintermans hammered home a message about the importance of running an organization that discloses where its profits go, such as Sodisco-Howden, which is publicly traded. “We are not going to take this lying down. We are going to fight for our dealers. When they see the facts, they are going to stay with [a distributor] that is going to be transparent with their customers.”

Quincaillerie Matreco Hardware, the new kid on the block, is the culmination of the growth of BMR’s own ambitions to establish its own hardware distribution facility. Already an important wholesaler of building materials to its own dealer members, in 1997 BMR added hardlines to its warehouse in Longueuil, QC in an effort to oversee its own destiny on that side of the business. About two years ago, Yves Gagnon, president of BMR, began efforts to expand the hardlines distribution side, and soon after, Sodisco-Howden stopped shipping to BMR, recognizing the growing threat to its own business.

This year, the BMR warehouse is expected to ship about $85 million in purchases to its 125 dealers throughout Quebec, New Brunswick and Northern and Eastern Ontario.

AWARD, BMR and TIM-BR Mart Ontario (along with Tim-BR-Marts Ltd. based in Vancouver, which is not part of the deal), are affiliated within a collective buying group called Matreco. Now AWARD wants to model its group after its French-Canadian sister. With a $35,000 investment from each of 51 of its 96 members, AWARD will open a 42,000-sq.ft. distribution centre of its own in Bedford, NS, near Halifax. The facility will carry about 5,500 of BMR’s fastest-moving items, and has reportedly committed to buy $5 million worth of products from BMR in its first year of operation. The new distribution entity, called AWARD Distribution Ltd., is also expected to buy $4 million worth of products from other sources and funnel an additional $9 million in direct shipments to dealers.

TIM-BR Mart Ontario, meanwhile, will offer BMR as a supplier of choice to its own members, but will rely on BMR’s trucks, which will be co-branded with the TIM-BR Mart and AWARD logos, to supply product.

However, it doesn’t add up for Sodisco-Howden’s Wintermans. “In the last 10 years, since Home Depot started shipping direct, all the people that don’t have enough volume in distribution have gone by the wayside. Now, [Quincaillerie Matreco Hardware] is going the other way and adding costs. It just doesn’t make sense,” he insists.

Although dogged by problems of its own as it attempts to consolidate its banners (it bought the Ace business in Canada at the beginning of 2003 and the hardware business of Marchands Unis a year earlier), Sodisco-Howden showed strengthened results in its latest quarterly results (see “Companies in the News” in this issue).

Called 20/20, the new-concept stores are designed to “take back” up to 20% of available space from the warehouse of each store, and, in turn, increase sales for these stores by 20% in the first year. 20/20 stores are already open in Kitchener, Markham and Pembroke, ON, as well as in Prince George, BC.

The broad assortments typical of a Canadian Tire store have been reorganized under four themes: Driving (automotive), Fixing (home improvement), Living (leisure products), and Playing (sporting goods). The additional space has been turned over to a number of areas, including expanded housewares and kitchen gadgets, new work wear department that looks like a clothing retailer, complete with change room, and more attention to household cleaning products, seen as a way to increase return traffic for customers, especially women.

“We’ve done a good job for dad. We’re not sure we’ve done as good a job for mom and the kids,” said Mark Foote, president of Canadian Tire Retail, as he outlined the strategy behind the new concept.

Besides expanding existing product lines, some new categories have been introduced under the new design. These include greeting cards and gift wrap, cut flowers and indoor plants, and home office supplies – everything from knock-down furniture to writing instruments, paper and binders.

Not all the new available space has gone to merchandise, however. The stores have been opened up, as well, to allow for wider aisles and more breathing room at checkout. The front of the store is dominated by the “Marketplace,” a power display area devoted to bi-weekly promotions.

The two shows will align in a sales and marketing agreement whereby both parties will seek delegates and exhibitors that can participate in both events.

“The collaboration with the National Hardware Show creates benefits for everyone involved,” says Mette Petersen, the North American president and managing director of Koelnmesse Inc., which owns the Cologne show. “The extensive sharing of services and transfer of knowledge between Koelnmesse and Reed Exhibitions [which owns NHS] will enable our customers to focus all of their attention on the trade visitors and attendant business activities.”

The Cologne show already has partnerships in other countries, Practical World Asia in Shanghai, and the Taipei International Hardware & DIY Show in Taiwan.

The move to join with NHS in the U.S. is an important step in re-establishing Cologne’s dominance worldwide, and is a coup for the legitimacy of the Las Vegas show, which is in a well-publicized battle for attendees – and credibility – with the rival AHMA Hardware Show, being held in Chicago by the American Hardware Manufacturers Association. Both shows will be held only weeks apart, with the AHMA’s Chicago event taking place April 18-20, and the Las Vegas show May 10-12, 2004.

KINGSTON, ON — A $20-million investment in this community about three hours east of Toronto has culminated in the opening of Rona‘s 62nd big box store, and the 19th under the Rona Home & Garden banner. The 120,000 sq.ft. store will carry some 45,000 SKUs and feature a 3,400-sq.ft. greenhouse, 26,000-sq.ft. garden centre and a large seasonal department, offering everything from Christmas decorations to lawn fertilizer.

Rona’s president and CEO, Robert Dutton, was on hand for the opening, which attracted a line-up of hundreds of customers, who waited for the doors to open last Wednesday morning. He called this newest store “the latest and most developed version of our successful big-box concept.”

The store has an added aesthetic touch: a group of hardwood trees, more than a century old, were preserved in the construction of the new store, preserving the venerable atmosphere of the neighbourhood.

In addition, an existing Rona Cashway store in Kingston will continue operating, serving as a platform for the big box store’s LBM orders and deliveries to construction sites.

For the past few years, Castle has in fact been trying to strengthen its membership across the country. Most recently, since the hiring of Alan Schoemperlen, who joined from Winnipeg-based TruServ Canada just over two years ago as western business development manager, Western Canada has been a special focus of the buying group, even as Ron Douglas has been consolidating membership in Atlantic Canada in his role as business development manager there.

“It’s time for us to revisit where the company was born, in Ontario,” says Pro Wylie, president of the 256-store group. “It’s a maintenance thing here in Ontario. We want to remain strong.”

Frame will handle recruitment and dealer service in Eastern Ontario, while Ron Marchetti, national business development manager, will narrow his coverage, which formerly extended to the whole province, to Western Ontario. According to Wylie, another person may still be recruited, someone who is bilingual and can talk to dealers in Northern and Eastern Ontario. “We’re taking the Ontario market very seriously,” he says.

In fact, the company’s Canadian division has just signed a multi-year agreement with the National Hockey League, with the retailer as corporate partner of the League in Canada in the home improvement category. Home Depot Canada will continue its NHL advertising on TSN and CBC’s Hockey Night in Canada. But it’s also going to develop a national contest, in which fans are invited to build their own backyard hockey rink. The segment will be produced by CBC to air during Hockey Night in Canada.

The show’s owner, the Lumber and Building Material Association of Ontario, pulled its support from the Canadian Hardware and Building Materials Show, which will be held a week earlier, February 1-3, 2004. CHS is owned and operated by the Canadian Retail Hardware Association.

A deal between the two organizations had left the LBMAO dissatisfied with both the apparent lack of buying at CHS, and its own share of the revenue from the event, driving it to split off. In so doing, the LBMAO is following the lead of its sister LBM associations in Western and Atlantic Canada, both of which have successful buying shows of their own.

To date, more than 110 exhibitors have signed up for the new show, including AFA Forest Products, Alexandria Moulding, All Weather Windows, Atlas Polar Co., Brite Manufacturing, Can-Save, Dimensions Retail Systems, Sico and Stanley Canada. For more information on the show, click here.

The news, which comes on the heels the Hardware Fair’s alliance with the National Hardware Show in the U.S., is seen as a pro-active move on the part of the show’s owner, Koelnmesse Inc., as it faces dwindling exhibitor participation, especially from key power tool manufacturers such as Bosch and Black & Decker, which have been participating in alternating years for some time.

The decision to change the show’s frequency has been met favourably. John Herbert, head of the BHB, the European retail hardware association that represents dealers in Germany, Austria and Switzerland, calls it “a bold decision” that is being taken before the show starts slipping. “We welcome it. We think it’s going to be a first-class fair – and the whole world will be there.”

The International Hardware Fair/Practical World will be held March 14-17, 2004 and is expected to feature more than 3,500 exhibitors.

OTTAWA — Thirty-five Home Hardware dealers in Eastern Ontario have announced their sponsorship of Roger’s House, a program spearheaded by the Ottawa Senators and Ottawa Senators Foundation in tribute to hockey hall of famer, Roger Neilson, the former Senators assistant coach who passed away in June after a lengthy battle with cancer. As first founding sponsor, Home Hardware will provide an initial donation of $100,000. As part of the partnership, Home Hardware purchased a suite at the Corel Centre, which will be sold to dealers and auctioned off for special events to raise money for Roger’s House.

GRANDE CACHE, AB — Weyerhaeuser Co. has announced it will close its lumber mill here on February 8, 2004, affecting about 156 jobs. The closure comes following failed attempts by the company to find a buyer, and will result in a fourth-quarter after-tax charge of US$8 million.

BRANTFORD, ON — The Nu-Gro Corp. recently finalized its purchase of the assets and business of Greenleaf, including its brands, Greenleaf Products Inc., Later Chemicals Ltd. and Midpoint Product Inc. The acquisition is valued at approximately $8.7 million, and will add an expected $27 million in sales to Nu-Gro’s business.

BENTONVILLE, AK — Wal-Mart Stores reported net sales for October of US$19.07 billion, up 11.8% from US$17.05 billion in October 2002. year to date, sales were up 11.3%. Sales for the thirty-nine week period were US$182.312 billion, up 11.3% over US$163.81 billion a year earlier. Sales by the Wal-Mart division for October were US$12.720 billion, up 10.7%. Sales from the Sam’s Club division were US$2.64 billion in October, up 9.7%. The International division’s sales for the month were US$3.71 billion, up 17.6%.

ISSAQUAH, WA — Costco Wholesale Corp. had net sales in October of US$3.42 billion, an increase of 14% from US$3.01 billion. For the first nine weeks of its fiscal year, the warehouse club retailer reported a 13% increase in sales, which climbed to US$7.49 billion from US$6.60 billion.

BENTONVILLE, AK — Wal-Mart Stores is working with 100 of its largest vendors to ramp up the implementation of radio-frequency identification, a new high-tech inventory-tracking system, that is causing quite a stir throughout the retail industry. Wal-Mart wants these suppliers to start attaching RFID tracking tags to products by January 1, 2005. RFID tags, which contain special microchips and antennae, are designed to relay to computers precise information about the contents of product packages and containers.

Steve Metcalfe has joined Maxtech Consumer Products Group as sales and marketing manager. He was formerly at Emerson Electric. (519-885-5336)

Ed Lanctot, longtime general merchandise manager of Cotter & Co. (now TruServ) has died. Lanctot was Cotter founder John Cotter’s first employee. They had worked together at Kelley How Thompson in Duluth, MN, before John Cotter started Cotter & Co. As general merchandise manager, Lanctot was also in charge of advertising, and for many years considered the best known merchandiser in the hardware industry. He was 84.

In the biggest monthly employment increase in 19 months, Canada’s unemployment rate fell to 7.6% in October, down from 8.0% a month earlier. During this period, the Canadian economy created 65,400 jobs, with gains being spread across most segments of the work force.

Steve Rogel, Weyerhaeuser’s chairman and CEO, signed this pact with Jiang Zehui, president of the Chinese Academy of Forest. The agreement calls for the two organizations to cooperate on forest management, wood technology and silviculture. Specifically, they will research opportunities for eucalyptus forests in southern China, including possible uses for the wood, cooperate on product development and market assessment, and develop ways to reduce sedimentation and improve water quality in China’s forests.

For the past three years, Therma-Tru has been owned by the New York-based investment firm Kenner & Co. The day before the Fortune Brands deal was announced, Kenner revealed that it would acquire Dallas-based Atrium Cos., one of the largest window manufacturers in the U.S., in a deal valued at US$610 million.