Archives

Mar22_04

 


John Caulfield, Contributing Editor
 vol. x, #12 March 22, 2004

IN THIS ISSUE:
* Cologne remains key show for European, Asian connections
* AHMA Show affirms commitment to Chicago venue
* Lanoga launches installed program for builders
* Rona unveils new-concept store
* Lowe’s assuages locals with extra hires
* Sears Grand gets going
* Quebec co-op expands hardware warehousing
* Home Depot gets sued over slogan

* * * * * *
NOTE: Dollar amounts are stated in the currency of the country from which the story originates.
Michael McLarney, Editor & Publisher

* * * * * *

“I never think of the future. It comes soon enough.”
Albert Einstein

COLOGNE SHOW REPORT PART ONE: CHANGE IS GOOD
COLOGNE, Germany — You know, it was actually a very good show. Many attendees talked about the changes to Practical World, the International Hardware Fair. About how it’s gone from an annual event to every two years. How there are so many Asian companies exhibiting now. Or how that specialty tools show, proposed for Practical World’s off-years, was cancelled. But the changes are good, whether they all stick or not. The main thing is that the show is making changes. Pro-active ones. By going biennial, it ensures its vitality and importance – before it declines. And sure, there were lots of Asians there, but they were also writing business, plenty of it, with Western buyers. But suppliers from France, Spain, Egypt and the U.S. saw lots of action too.

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

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

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

AHMA SHOW STRENGTHENS COMMITMENT TO CHICAGO
CHICAGO, Ill. — The AHMA Hardware Show is banking on the big brand name companies it says are supporting its show, and the centralized location here in the Windy City. “The real strong point our show is the strength of our exhibitors,” says Tim Farrell, CEO of the American Hardware Manufacturers Association, which owns and operates the brand new event.Farrell’s organization made headlines just over a year ago when it announced it would sever its partnership with Reed Exhibitions under which they jointly organized and mounted the National Hardware Show. This year, as Reed moves NHS to a new venue in Las Vegas, AHMA will put on its own show right here.

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

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

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

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

RONA UNVEILS NEW-CONCEPT STORE
BOUCHERVILLE, Que. — Rona Inc. has finally taken the lid off a new retail concept it has been working on in its home province of Quebec. Calling the program “upgraded traditional hardware store,” the new stores will carry the Rona Le Rénovateur banner here and operate under Rona Home Centre in Ontario and Western Canada. The first Rénovateur store opened last week here in Boucherville. In each case, the stores are upgraded from a traditional hardware store. Two more outlets being built or scheduled for construction in Prince Albert, Sask., and Fort McMurray, Alta. These stores will be slightly smaller, averaging 35,000 sq.ft. with the lumberyards adding another 40,000-80,000 sq.ft. The stores will take many of the merchandising techniques found in a Rona Regional, a smaller (65,000-85,000 sq.ft.) version of a big box, but with elements found in a more traditional store. The new concept, while still carrying aspects of a big box layout, draws even more strongly from a traditional one.

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

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

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

SEARS PLOTS STORE EXPANSION COURSE
NEW YORK — After nearly two decades of modest physical growth, Sears Roebuck & Co. is once again revving up its expansion engine. Speaking here at Reuters‘ Consumer Products and Retail Summit, Sears’ chairman and CEO Alan Lacy revealed that his company is planning to increase the number of its Sears Grand off-the-mall outlets over the next three years. That concept, which Sears launched last fall in Salt Lake City, has an expanded format, of 200,000 sq.ft., aimed at squaring off against the likes of Target and Wal-Mart. A typical Sears Grand store carries hardlines, appliances, consumer electronics and food.

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

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

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

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

FURNITURE IS HOME HARDWARE’S NEW “HOT” BANNER
ST. JACOBS, Ont. — With beefed up programs and expanded assortments, Home Hardware Furniture is attracting more dealers than ever. Although Home Furniture’s 60 stores account for only about $50 million of Home Hardware‘s almost $4 billion in sales by its 1,000 dealers across Canada, the member-owned wholesaler anticipates big growth from the division. Home added only two Furniture stores in 2002, but last year, a dozen signed on, with another six lined up to join the banner before year’s end.

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

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

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

SUNSHINE ACE SUES HOME DEPOT OVER SLOGAN
NAPLES, Fla. — In what its attorney characterized as “the most significant trademark infringement case in U.S. history,” a local retailer, Sunshine Ace Hardware, is suing Home Depot and asking for $1 billion in compensatory damages. The suit claims Home Depot illegally used Sunshine Ace’s advertising slogan “You Can Do It, We Can Help,” which Sunshine claims to have been using for two years before the warehouse giant introduced it. The disagreement between Depot and Sunshine Ace, which operates four stores in Florida, has been going on since June 2003, when Sunshine Ace sued Home Depot in a federal court in Fort Myers, Fla., claiming that the competitor infringed on its trademarked slogan. A deal couldn’t be settled out of court, however, as negotiations collapsed last week.

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

LOWE’S DELIVERS ON LOCAL DEVELOPMENT PROMISES
NORTHAMPTON COUNTY, N.C. — When big box retailers enter a market, they almost always claim they will bring more jobs and higher tax revenues to the community. Opponents typically contend those claims are overblown, especially when the retailer receives tax incentives just for coming into the market. They insist big box dealers should be made to pay more for such things as road, sewage and land development improvements. For example, Home Depot initially was to receive $1 million in tax abatements from the village of Carpenterville, in southern Illinois, to open a 130,000-sq.ft. store there. But after several months of negotiations, it now appears that the village’s board is considering a $900,000 tax break, 60% of which would go to Home Depot on the condition that it comes up with a better plan to manage storm water runoff.

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

CO-OP FÉDÉRÉE EXPANDS WAREHOUSE
QUEBEC CITY — Regional co-op wholesaler Co-opérative Fédérée is expanding its distribution center, adding 35,000 sq.ft. to the existing facility, bringing the overall size of the warehouse up to about 165,000 sq.ft. According to Claude Gingras of Co-op Fédérée, the work is under way now and he expects it to be completed by August. Expansion is being undertaken mainly to accommodate increased inventory in hardware, as the company beefs up assortments to service both existing hardware and LBM members, and a small but growing group of independents being served by Co-op Fédérée under a banner it launched late in 2002, Unimat. Last year, it added five new members under the fledgling Unimat banner. The program, an alternative format for non-member retailers, has appeal to both hardware and building centers.

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

MSN PROVIDES NEW OUTLET FOR SERVICEMAGIC
GOLDEN. Colo. — MSN, the internet service provider whose web venues attract more than 350 million visitors each month, is expanding its reach to home improvement. Now customers can access ServiceMagic‘s online network of more than 45,000 pre-screened contractors through MSN’s House and Home web site. Rodney Rice, ServiceMagic’s co-founder, said in a prepared statement that he expected this strategic alliance to add significantly to his company’s customer base. Christine Andrews, MSN’s product manager, predicted that this deal will make the site “a top destination for anyone looking for home improvement resources.”

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

COMPANIES IN THE NEWS
REDMOND, Wash. — Lanoga Corp. has launched an installed sales program of its own, but unlike many – including Home Depot – the program is aimed at pros. Lanoga dealers, which operate under the United, Spenard, Lumbermens, Home and Dixieline banners, will do more than just sell builders the windows for a home, it will have them installed, as well.WASHINGTON — Ace Hardware Corp., with some 3,700 members who collectively represent 4,800 stores, plans to open another 150-200 outlets this year. At its dealer market being held here recently, the Oak Brook, Ill.-based company reported net income of $100.7 million in 2003, up 22.7% from the previous year, while sales through the warehouse were up 4.3% to $3.16 billion. Retail sales are projected to hit $13 billion, as the company focuses more and more on upscale products, especially in the hardware and lawn and garden departments.

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

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

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

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

PEOPLE ON THE MOVE
At the Building Supply Dealers Association of BC (BSDA) Annual Gala, held March 6, the association presented its ORION Awards. In the category of most outstanding supplier – individual service, the award went to Garry Anderson of Irly Distributors Ltd., Surrey, B.C. (604-596-1551)Kim Gonzalez has joined Do it Best Corp. as education services specialist in the company’s communications department. She’s responsible for facilitating year-round training programs, and organizing special events at the co-op wholesaler’s buying markets. Gonzalez was most recently executive assistant for The Lutheran Foundation. (260-748-5300)

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

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

U.S. MARKET INDICATORS:
The U.S. Commerce Department reports that housing starts in February were 1,855,000, down 4% from January but up 13% from one year ago. Despite a disconcerting rise in the jobless rate, low interest rates have managed to keep the new housing market strong, as the level stayed the same from February to March, according to the National Association of Home Builders. The index, a measure of builder sentiment on sales and buyer traffic, was at 64, unchanged from February’s downwardly revised reading.
CANADIAN MARKET INDICATORS:
Existing home sales in February in major markets totalled 24,368 units on a seasonally adjusted basis, according to the latest report from the Canadian Real Estate Association. That’s up 1.4% from the previous month. New listings amounted to 38,885 units, up 4.0% over January. Tight market conditions, combined with solid demand for higher priced homes, caused the residential average price to rise 10.5% year-over-year to $233,921.
MEET CANADA’S TOP HOME IMPROVEMENT BUYERS
Home Depot, Canadian Tire, Home Hardware and more! Hardlines will host its third annual Meet the Buyers Breakfast Seminar, April 28, 2004. For more details, call Bev Allen at 416-489-3396 or bev@hardlines.ca.
NOTED
Maple Leaf Night, a Canuck tradition during the National Hardware Show, is following the show to Las Vegas. The event is held by the Canadian Hardware and Housewares Manufacturers Association, which surveyed its retail customers to find the majority have chosen to attend NHS in Las Vegas over the AHMA Hardware Show in Chicago. Maple Leaf Night will be held Monday evening, May 10, 2004 at the Mirage Hotel. Contact: CHHMA at 416-282-0027 for more info.
OVERHEARD…
“I haven’t felt this kind of excitement at a show since Chicago eight years ago” — Jason Mayer, who was at Practical World in Cologne searching for new lines for his London, Ont.-based rep agency, Northern Marketing.

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HELP WANTED

DISTRIBUTOR WANTED:

A distributor is sought for a patented Australian product, Kableflags. Kableflags is a power-plug identifier system designed to ensure that you never unplug the wrong power plug again. There are six versions, each with ten pre-labelled identifiers for cables used in Home Entertainment, Kitchen, Home Threatre, Home tools, Computers and Office cables. A blank version is available to personally customize the flags.

Attaching Kableflags takes seconds and will save you money as many appliances, although switched off, still draw power and worse still, can be susceptible to damaging power surges or brown outs.

For more details, contact Fareeda Chand, Austrade tel: 416-323-1418 or email: fareeda.chand@austrade.gov.au

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Mar15_04

 


John Caulfield, Contributing Editor
 vol. x, #11 March 15, 2004

IN THIS ISSUE:
* Home Depot wants suppliers in sync with data sync
* Las Vegas Show strong in lawn and garden
* Rona launches Benjamin Moore boutiques
* Lowe’s to debut in Maine
* Zellers overhauls hardware department
* Weyerhaeuser faces lawsuit
* Sears beefs up power tool offerings

* * * * * *
NOTE: Dollar amounts are stated in the currency of the country from which the story originates.
Michael McLarney, Editor & Publisher

* * * * * *

“Half of the failures in life arise from pulling in one’s horse as he is leaping.”
— Julius and Augustus Hare

GP ANNOUNCES SELLOFF OF LBM DISTRIBUTION BUSINESS
ATLANTA — Georgia-Pacific Corp. announced on Friday that it’s made a deal to sell its building products distribution business to a new company owned by Cerberus Capital Management L.P., a private, New York-based investment firm. Members of the GP distribution business’s management team are also involved in the purchase.GP has had the division on the block for at least a year. The deal is valued at about $810 million, which includes the assumption of $630 million of working capital at closing and includes the separate sale of the business unit’s real estate assets, valued at $100 million. Georgia-Pacific expects the transaction to result in net after-tax proceeds of approximately $780 million, which will be used to reduce debt.

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

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

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

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

THE HARDWARE DEPARTMENT GETS OVERHAULED AT ZELLERS
MISSISSAUGA, Ont. — The hardware department at Zellers has been renovated, with more emphasis on convenience, and less on project orientation.“We saw an opportunity to really sharpen our focus,” says Tom Stafford, vice-president hardlines and pharmacy at Zellers. By going after the impulse buy, he says, Zellers can better complement the project that would be initiated at a more traditional hardware or home improvement outlet. “For example, we can’t sell the cabinetry, so we sell the cabinet hardware.”

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

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

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

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

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

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

HOME DEPOT DEMANDS DATA SYNC COMPLIANCE FROM SUPPLIERS
ATLANTA — By mid year, Home Depot plans to stop exchanging product information manually with its suppliers, and has insisted that they adopt UCCnet product registry standards for data synchronization and electronic data interchange.Information Week quotes Mark Healy, Home Depot’s merchandise operations senior director, as stating, in so many words, that the retailer would stop buying from vendors that don’t comply with its edict. “If the supplier doesn’t have an electronic solution, it’s going to be difficult for them to get information to us.”

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

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

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

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

NEW PRODUCTS, LAWN AND GARDEN DOMINATE LAS VEGAS SHOW
LAS VEGAS — The National Hardware Show is already surpassing last year’s event in size and exhibitors. Through March 9, 2,165 exhibitors had leased 463,880 sq.ft. of net exhibition space inside the Sands Expo & Convention Center here, where the show is scheduled for May 10-12. According to the show’s Web site, more than 12,000 attendees from 72 countries have registered for the event.“This is the first year-on-year growth for the show since 1999,” says Rob Cappiello, President of NHS. Cappiello attributes some of that increase to lawn and garden exhibitors, which account for 200,000 sq.ft. of show space.

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

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

RONA LAUNCHES BENJAMIN MOORE BOUTIQUES
TORONTO — A new paint program appeared last week in select Rona Lansing stores around the Greater Toronto Area. In partnership with Benjamin Moore paints, the eight Rona Lansing stores around the GTA will feature the Benjamin Moore Signature Boutique, a program that’s been used with traditional paint dealers since its inception in 1998, but the installation in these Rona Lansing stores marks the first venture for the retailer with this program, which has been mounted as a “store within a store.”While Sico is the dominant brand in Quebec — and in Rona stores in that province — and both Sico and CIL are the brands being offered nationally, Lansing, a familiar chain in the Toronto area since its inception in the early 1950s, has offered Benjamin Moore throughout that time.

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

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

BIG BOXES FACE OPPOSITION IN NORTHEAST
AUBURN, Maine — Lowe’s Home Improvement Warehouse plans to open 140 stores nationwide this year, including its first store in the state of Maine. And like its major competitor, Home Depot, it’s discovering some opposition in the Northeast.The Associated Press reports Lowe’s has budgeted $16.5 million for a 150,000-sq.ft. store in Maine, which will be located next to an existing Wal-Mart. The store will open with 175 employees sometime in the fourth quarter of 2004.

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

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

LBMAO SHOW GOES HEAD TO HEAD WITH CHS IN 2005
MISSISSAUGA, Ont. — The Lumber and Building Materials Association of Ontario has confirmed it will go ahead with its Winter Buying Show next year, following the inaugural event last month. It will take place once again in London, Ont., February 5-6, 2005. The show will target more than 2000 retailers and 150 vendors.However, the dates overlap directly with next year’s Canadian Hardware and Building Materials Show, being held in Toronto February 6-8, 2005.

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

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

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

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

SEARS BEEFS UP NATIONAL BRANDS IN TOOL CORRAL
TORONTO — Sears Canada has added three leading national brands to its assortment of power tools. DeWalt, Makita and Milwaukee will now sit aside Sears’s own Craftsman brand.In the U.S., a mix of national brands within a Sears department store’s hardware has been in place, in its “Tool Territory,” for some years, but in Canada, Sears has traditionally relied on its own Craftsman brand, which is produced by Ryobi.

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

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

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 45.24 28.70 44.75
Canfor 14.70 7.60 13.84
Costco 40.42 27.92 38.30
Goodfellow 16.00 9.75 15.50
Home Depot 37.89 21.66 36.09
Hudson’s Bay 14.15 7.75 13.80
Lowe’s Cos. 60.42 35.45 53.09
Rona Inc. 35.00 13.70 31.99
Sears Canada 21.50 13.60 16.89
Sodisco-Howden 3.35 1.30 3.12
Taiga Forest 8.76 6.31 8.30
Wal-Mart 61.31 46.50 58.48
West Fraser 43.25 29.25 41.25
COMPANIES IN THE NEWS
MONTREAL — Maax Inc., North America’s third-largest bathroom fixture and kitchen cabinet maker, is being purchased by a consortium that includes a U.S. investment firm, the private equity arm of the Ontario Municipal Employees Retirement Board, and some of Maax’s own managers. The deal is worth about $555 million, in which the shares of Maax will be sold to the group at $22.50 a share, representing a premium of 22% over the closing price on the day before the sale process was announced last September. The sale includes the assumption of about $85 million of Maax’s debt.TORONTO — Department store giant Hudson’s Bay Co. saw sales and revenue for the fourth quarter ended January 31, 2004 increase by $17 million to $2.46 billion. Same-store sales in the quarter fell 4%, while operating income (earnings before interest and income taxes — EBIT) in the fourth quarter increased 9% to $156.2 million. Prior to normalizing for non-comparable items, however, net earnings in the quarter declined to $89.6 million, reflecting a generally weaker holiday season, primarily in apparel categories, and the company’s commitment to everyday low pricing over excessive discounting and promotional activity. For the year, sales and revenue reached $7.40 billion, an increase of $16 million, or 0.2%, above $7.38 billion over the previous fiscal year. EBIT increased 10% to $158.3 million and net earnings were basically unchanged from last year. Zellers, HBC’s discount department store chain, posted its highest operating profit in seven years, although same-store sales in 2003 decreased 2.6% at Zellers and 2.3% at the Bay.

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

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

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

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

PEOPLE ON THE MOVE
At Home Hardware Stores Ltd., Patty Uhrig has moved over from Bill Ferguson‘s office to join the Home Furniture team as a facilitator on the dealer development team. She reports to Georgette Carriere, who is now dealer development manager for all of Canada. (519-664-2252)
U.S. MARKET INDICATORS:
Retail sales were up a bit in the U.S. in February, but mainly due to auto sales and performance by department stores, says the Commerce Department. Retail sales rose 0.6% to a seasonally adjusted $327.17 billion in February, but sales other than vehicles were flat compared with January.Concerns about offshore manufacturing taking over domestic production will no doubt increase, given the latest news that the trade deficit widened to a record $43.1 billion in January. The gap was blamed on rising oil prices, which helped keep imports near historic highs, reports the Commerce Department.
CANADIAN MARKET INDICATORS:
Housing prices rose only 0.3% in January, relatively unchanged from December’s monthly increase, seasonally adjusted. Year over year, this index of contractor’s selling prices rose 5.1%, up slightly from December’s annual increase of 5.0%Housing starts were up in February, as the seasonally adjusted annual rate increased to 214,100 from 195,500 in January, according to CMHC. The seasonally adjusted annual rate of urban starts rose 10.9% to 188,500 units, with most of the increase coming from multiples. Multiple starts increased 18.6% in February to 88,500, while single starts rose 4.9% to 100,000. Year-to-date actual urban starts were 7.1% lower in February than in February 2003. Single starts declined 3.5% and multiple starts were off 10.3%.
MEET CANADA’S TOP HOME IMPROVEMENT BUYERS
Home Depot, Canadian Tire, Home Hardware and more! Hardlines will host its third annual Meet the Buyers Breakfast Seminar, April 28, 2004. For more details, call Bev Allen at 416-489-3396 or bev@hardlines.ca.
B&Q HAS BIG PLANS FOR 2004
B&Q, the U.K.’s largest DIY retailer, plans to hire 3,500 people this year to staff the 20 stores it intends to open in 2004. This will bring its total number of B&Q outlets to 337, with 39,500 staff.Both B&Q and French DIY retailer Castorama are part of Kingfisher plc.

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

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

WEYERHAEUSER SETTLES ANTITRUST SUIT
PORTLAND, Ore. — Weyerhaeuser has agreed to pay $34.5 million to settle a lawsuit filed by four hardwood mills in Oregon. The suit alleges that the forestry company attempted to gain monopoly power by altered prices on alder wood to drive competitors out of business.Weyerhaeuser admitted no liability in its settlement agreement. The plaintiffs were seeking $117 million in damages, and the same attorneys representing the mills won a $78.9 million verdict against the lumber giant last year over accusations of anti-competitive tactics, which led to the demise of Longview’s Ross-Simmons Hardwood Lumber.

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

****HARDLINES MARKETPLACE****
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https://hardlines.ca/html/classifieds_new.asp

HELP WANTED

SENIOR MANAGEMENT OPPORTUNITIES

TruServ Canada, a 100% Canadian-owned cooperative, has two exciting employment opportunities available! We provide hardware and general merchandise product and support programs for approximately 675 True Value Hardware, Country Depot and V&S Department stores across Canada.

  1. Regional Manager, Sales, Operations & Member Relations (East) — Responsibilities include: maximizing Corporate and Member growth, profitability and market share within the region through existing Member stores; leading and managing the District Managers to achieve store growth, retail, wholesale and profit objectives — this includes directing, training and leading the Member to participate and execute the essential retail programs for the specific banner; managing the existing base of stores through the District Manager, and through store visits, by working closely with the District Managers, including travelling with them and developing their skill sets. This position is based in our Kitchener office.
  2. National Growth Manager, True Value / V&S — Responsibilities include: Creating a professional business development and recruitment process coordinating all aspects of prospecting; researching and enhancing the True Value / V&S retail brands for future market development inclusive of marketing/advertising/communications, building décor, and small to large prototype models — this includes the conceptual development of prototype stores (by size); implementing an Active Brand Management process that targets prototypical markets and enhances brand equity. This position is based in our Winnipeg office.

Please visit our web site www.truserv.ca for more details on these two positions, including qualifications required. Interested candidates may submit a resume via email: employment@truserv.ca or confidential fax: (204) 453-9414.

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RETAIL ACCOUNTS EXECUTIVE

Master Lock, an industry leader in the security hardware industry, is seeking a Retail Accounts Executive.

A strong understanding of the retail market is a must, along with at least 3 years experience with large retail national accounts, specifically in the hardware wholesalers and warehouse home centers. Preference given to candidates with:

  • 5 years overall marketing/sales experience including preparatory field sales and marketing assignments,
  • proficiency in Microsoft Office,
  • exposure to key accounts’ vendor software,
  • fluent French.

Education equivalent to college degree required, preferably marketing or business administration.

Master Lock Canada is conveniently located in Oakville. Nearby highway access includes the QEW at Winston Churchill and 403 at Dundas Street.

Qualified applicants should send resume via email to tmedeiro@mlock.com. No phone calls please.

**********************************************************************************

QUEBEC BASED SALES REPRESENTATIVE


One of the largest plumbing manufacturers is in need of a sales representative to take full advantage of Quebec market based opportunities.

Responsibilities include managing and directing the sales process for various Quebec based accounts, including buying offices targeting Consumer sales areas. On the Retailer’s behalf, you’ll provide leadership into all category management issues including competitive positioning, sales data and forecasting, and cross-selling opportunities. You’ll work with a cohesive, dynamic team on product development, packaging, and PK/educational requirements.

Looking for an employer who continually demonstrates a commitment to teamwork and partnering with Retailers in their competitive position? To explore these opportunities in complete confidence, please contact Diana @ Human Resources. Interviews will be held during the weeks of February 16th and February 23rd. Email: DDavi79331@aol.com

**********************************************************************************
PRODUCTS OFFERED

 

 

 

ERAPRO
ERAPRO Winter Tools     877-372-9273     sales@erapro.ca

**********************************************************************************

 

Reiker

**********************************************************************************  
SERVICES OFFERED

RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America’s leading manufacturers, managing their lines for Canada’s top hardware retailers, big boxes and mass merchandisers.

Contact Dave Leslie at 905-702-9443, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com

**********************************************************************************

SELL YOUR COMPANY – OR BUY ONE – WITH HARDLINES CLASSIFIEDS!
DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE.

ONLY $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS.
TO PLACE YOUR AD, CALL
PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: buzz@hardlines.ca

Hardlines is published weekly (except monthly in December and August)
by McLARNEYCOM
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© 2004 by Michael McLarney.
HARDLINES™ the electronic newsletter hardlines.ca
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Mar8_04

 


John Caulfield, Contributing Editor
 vol. x, #10 March 8, 2004

IN THIS ISSUE:
* Home Depot Canada to launch self-checkouts

* 84 Lumber sales up 18%

* Chase-Pitkin makes deal to sell appliances
* Ace ships snakes, Lowe’s gets sinking feeling
* Sodisco-Howden says loyalty remains high
* LBMAO evaluates future locations for show
* Loblaw wants your barbecue business!

* * * * * *
NOTE: Dollar amounts are stated in the currency of the country from which the story originates.
Michael McLarney, Editor & Publisher

* * * * * *

“Sentimentality is only sentiment that rubs you the wrong way.”
—Somerset Maugham (1874-1965)
84 LUMBER ENDS YEAR WITH STRONG SALES
Eighty-Four, PA — 84 Lumber Co., the nation’s largest privately-held building supply company, announced that sales for 2003 finished at $2.5 billion dollars, an increase of 18% over the previous year.Maggie Hardy-Magerko“2003 was another successful year here at 84 Lumber,” said 84 Lumber president Maggie Hardy-Magerko in a prepared statement. “None of this would be possible without each and every one of our associates. I am very proud of them; they never cease to amaze me.” The company managed to crack the $2-billion mark two years ago, when sales in 2002 topped $2.1 billion.

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

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

HOME DEPOT CANADA TO ADD SELF-SERVICE CHECKOUTS
TORONTO — Home Depot Canada plans to begin installing self-service checkouts in its stores by early April.These checkouts, which can be monitored by only one cashier, are part of Home Depot’s larger effort to upgrade its information technology in the front and back ends of its store. In 2003, the Atlanta-based company installed more than 90,000 electronic devises in its stores across North America, including 31,328 touch-screen POS terminals and self-service terminals into around 800 stores.

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

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

CHASE-PITKIN TEAMS WITH LOCAL APPLIANCE DEALERS
ROCHESTER, N.Y. — Chase Pitkin Home & Garden, a 15-unit home improvement dealer based here, is jumping on the appliance bandwagon, but without the inventory and in-store space commitments that competitors like Lowe’s, Sears and Home Depot are devoting to the category.This regional dealer, with estimated annual sales of more than $200 million, has formed strategic alliances with retail appliance dealers in several of its markets. Through a new program called Appliance Advantage, shoppers who purchase kitchens from Chase-Pitkin are now entitled to a 10% discount on appliances purchased from its partners.

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

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

WINTERMANS SAYS SODISCO-HOWDEN ON TRACK
MONTREAL — Deflecting criticism of his company’s low profile of late, Sodisco-Howden Group president and CEO Jos Wintermans says his dealers are satisfied with the wholesale distributor’s service levels.Back from the annual dealers meetings, he says, “I haven’t seen the dealers as positive and optimistic as long as I’ve been with Sodisco-Howden.” Wintermans took over the company two and one-half years ago. His tenure has been marked by acquisitions of other regional distributors, consolidation of operations between its two main warehouses — Victoriaville, Que. and London, Ont. — and rebuilding relations with Sodisco-Howden’s often disgruntled dealers, most of which fly the Pro banner.

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

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

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

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

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

D.A. SURVIVES RECALL BACKED BY LUMBER COMPANY
EUREKA, Calif. — Voters in Humboldt County, Calif., rejected a recall of District Attorney Paul Gallegos that had been bankrolled by Pacific Lumber Co., which Gallegos had accused of fraud.In a turnout that far exceeded the state-wide turnout for California’s presidential primary, three-fifths of voters in the county decided to retain the 41-year-old D.A., who had been barraged by a multimedia ad campaign depicting him as soft on crime.

That campaign was funded by Pacific Lumber.

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

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

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

LOWE’S STORE GETS THAT SINKING FEELING
OCEAN TOWNSHIP, N.J. — Lowe’s Home Improvement Warehouse recently decided to close indefinitely its 150,000-sq.ft. store here as a precaution — because the store is slowly sinking into the ground.Although the store is barely a year old, cracks have formed in its floor slab, caused by the settling of the landfill on which this store was built. The damage has to be repaired before customers will be allowed back in.

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

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

SATISFIED WITH FIRST SHOW, LBMAO PLANS FOR 2005
MISSISSAUGA, Ont. — Flush with the success of its first Winter Buying Show, the Lumber and Building Materials Dealers Association of Ontario is making plans for next year. The Winter Buying Show, put on by the LBMAO, was inaugurated this year after splitting from the Canadian Hardware and Building Materials Show. According to LBMAO president Dave Campbell, the event was considered a success, both financially and in terms of attendance, despite its modest size relative to the national show.Many exhibitors shared that view, with more than 600 purchase orders signed over the course of the two-day event. “The show was a little light,” says Dave Covin, regional manager — Ontario, at Emco Building Products. “But I would never judge an event by its first time.

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

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

LOBLAW MAKES BID FOR OUTDOOR PRODUCTS
TORONTO — Loblaw, the giant Canadian grocery retailer, wants to be dominant in certain hardlines, as well. John Lederer, president of Loblaw Cos. Ltd., speaking recently to an audience at the CIBC World Markets Conference here, said his company is now sourcing its own products, lines such as barbecues. At up to $400 less expensive than a leading U.S. brand name, Loblaw can offer an affordable alternative. As a result, he said, his company could own one-third of the Canadian barbecue market within five years.Other areas Loblaw is moving into include digital cameras, TVs and other electronics, said Lederer.

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

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 44.98 28.70 44.90
Canfor 14.70 7.60 14.00
Costco 40.42 27.00 38.15
Goodfellow 16.00 9.75 15.75
Home Depot 37.89 21.51 37.45
Hudson’s Bay 14.15 7.75 13.17
Lowe’s Cos. 60.42 35.45 55.47
Rona Inc. 35.00 13.65 32.99
Sears Canada 21.50 13.60 17.30
Sodisco-Howden 3.35 1.30 3.10
Taiga Forest 8.76 6.31 8.55
Wal-Mart 61.31 46.50 60.24
West Fraser 43.25 29.25 41.00
COMPANIES IN THE NEWS
HOFFMAN ESTATES, Ill. — A new format by Sears Roebuck, the retailer’s first off-mall discount store, is exceeding revenue forecasts. And even though expenses being incurred by the new Sears Grand are still too high, company executives say that’s just part of the process of working out the bugs in the five pilot stores. The first Sears Grand store opened last fall in West Jordan, Utah, 17 miles southwest of Salt Lake City. It’s bigger than most Wal-Mart stores, complete with everything from toys to groceries.ISSAQUAH, Wash. — Costco Wholesale Corp. had net sales for the second quarter of fiscal 2004 of $11.33 billion, up 14% from $9.92 billion in 2Q 2003. Net income for the second quarter increased 25% to $226.8 million, from $182.1 million in 2Q 2003. Net sales for the first half of fiscal 2004 increased 14% to $21.64 billion from $18.93 billion. Net income for the first half of fiscal 2004 increased 18% to $387.0 million.

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

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

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

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

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

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

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

PEOPLE ON THE MOVE
At TruServ Corp., Steve Mahurin has been named chief merchandising officer. A veteran of Home Depot and Payless Cashways, Mahurin has worked in the retail home improvement field for more than 20 years. He replaces Bill Godwin, who had been TruServ’s senior vp-merchandise supply chain since April 2001 and has been with the co-op since 1995, when he worked for Coast to Coast. Godwin is leaving the company to pursue other business opportunities, according to TruServ.Rona Inc. has added to its dealer development team in the West. Lawrie Shears, a 30-year veteran of the hardware and building supply industry, has been appointed director of development, Western Canada, handling British Columbia. (604-882-6244)John Penner, whose history in the industry goes back 23 years and includes Ace Hardware Canada and Beaver Lumber, has joined as director of development, Northwestern Ontario and Prairie Provinces. (403-257-8332)

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

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

U.S. MARKET INDICATORS:
Spending on new construction slid in January by 0.3% to $931.18 billion seasonally adjusted, says the Commerce Department. This was the first such drop since May 2003. Much of the decline was due to a weakness in commercial building.Gross domestic product grew in the fourth quarter of 2003 at a healthy 4.1%, says the Commerce Department, fuelled by brisk business spending.

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

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

CANADIAN MARKET INDICATORS:
The value of residential building permits in Canada was up 1.1% from December to January, setting a new high of $2.98 billion. However, non-residential permits fell by 4.9% in January, says Statistics Canada, bringing the overall drop in building permits down 0.9% to $4.38 billion from the previous month, and down 1.4% from January 2003. This overall drop follows a rise in December of 6.3%.
MEET CANADA’S TOP HOME IMPROVEMENT BUYERS
Home Depot, Canadian Tire, Home Hardware and more! Hardlines will host its third annual Meet the Buyers Breakfast Seminar, April 28, 2004. For more details, call Bev Allen at 416-489-3396 or bev@hardlines.ca.

****HARDLINES MARKETPLACE****
Don’t miss the products and services on the Hardlines web Marketplace:
https://hardlines.ca/html/marketplace.html
And check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp

HELP WANTED

DISTRIBUTOR WANTED:

A distributor is sought for a patented Australian product, Kableflags. Kableflags is a power-plug identifier system designed to ensure that you never unplug the wrong power plug again. There are six versions, each with ten pre-labelled identifiers for cables used in Home Entertainment, Kitchen, Home Threatre, Home tools, Computers and Office cables. A blank version is available to personally customize the flags.

Attaching Kableflags takes seconds and will save you money as many appliances, although switched off, still draw power and worse still, can be susceptible to damaging power surges or brown outs.

For more details, contact Fareeda Chand, Austrade tel: 416-323-1418 or email: fareeda.chand@austrade.gov.au.

**********************************************************************************

SENIOR MANAGEMENT OPPORTUNITIES

TruServ Canada, a 100% Canadian-owned cooperative, has two exciting employment opportunities available! We provide hardware and general merchandise product and support programs for approximately 675 True Value Hardware, Country Depot and V&S Department stores across Canada.

  1. Regional Manager, Sales, Operations & Member Relations (East) — Responsibilities include: maximizing Corporate and Member growth, profitability and market share within the region through existing Member stores; leading and managing the District Managers to achieve store growth, retail, wholesale and profit objectives — this includes directing, training and leading the Member to participate and execute the essential retail programs for the specific banner; managing the existing base of stores through the District Manager, and through store visits, by working closely with the District Managers, including travelling with them and developing their skill sets. This position is based in our Kitchener office.
  2. National Growth Manager, True Value / V&S — Responsibilities include: Creating a professional business development and recruitment process coordinating all aspects of prospecting; researching and enhancing the True Value / V&S retail brands for future market development inclusive of marketing/advertising/communications, building décor, and small to large prototype models — this includes the conceptual development of prototype stores (by size); implementing an Active Brand Management process that targets prototypical markets and enhances brand equity. This position is based in our Winnipeg office.

Please visit our web site www.truserv.ca for more details on these two positions, including qualifications required. Interested candidates may submit a resume via email: employment@truserv.ca or confidential fax: (204) 453-9414.

**********************************************************************************

RETAIL ACCOUNTS EXECUTIVE

Master Lock, an industry leader in the security hardware industry, is seeking a Retail Accounts Executive.

A strong understanding of the retail market is a must, along with at least 3 years experience with large retail national accounts, specifically in the hardware wholesalers and warehouse home centers. Preference given to candidates with:

  • 5 years overall marketing/sales experience including preparatory field sales and marketing assignments,
  • proficiency in Microsoft Office,
  • exposure to key accounts’ vendor software,
  • fluent French.

Education equivalent to college degree required, preferably marketing or business administration.

Master Lock Canada is conveniently located in Oakville. Nearby highway access includes the QEW at Winston Churchill and 403 at Dundas Street.

Qualified applicants should send resume via email to tmedeiro@mlock.com. No phone calls please.

**********************************************************************************
PRODUCTS OFFERED

 

 

 

ERAPRO
ERAPRO Winter Tools     877-372-9273     sales@erapro.ca

**********************************************************************************

 

Reiker

**********************************************************************************  
SERVICES OFFERED

RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America’s leading manufacturers, managing their lines for Canada’s top hardware retailers, big boxes and mass merchandisers.

Contact Al Vanderveen at 519-439-6800, ext. 201, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com

**********************************************************************************

SELL YOUR COMPANY – OR BUY ONE – WITH HARDLINES CLASSIFIEDS!
DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE.

ONLY $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS.
TO PLACE YOUR AD, CALL
PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: buzz@hardlines.ca

Hardlines is published weekly (except monthly in December and August)
by McLARNEYCOM
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© 2004 by Michael McLarney.
HARDLINES™ the electronic newsletter hardlines.ca
Phone: 416.489.3396; Fax: 416.489.6154
Michael McLarney, Editor & Publisher: mike@hardlines.ca
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______________________________________________
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Mar1_04

 


John Caulfield, Contributing Editor
 vol. x, #9 March 1, 2004

IN THIS ISSUE:
* Home Depot and Lowe’s: the numbers in ’03
* Who are the top 10 in America?
* Rona ends year with strong earnings, sales
* Lowe’s, Menard’s go big with latest stores
* Taiga hits $1 billion mark, evaluates challenges
* Matreco Hardware starts shipping

* * * * * *
NOTE: Dollar amounts are stated in the currency of the country from which the story originates.
Michael McLarney, Editor & Publisher

* * * * * *

“I don’t care what is written about me as long as it isn’t true.”
— Katharine Hepburn (American film star)
LOWE’S AND HOME DEPOT: BANNER YEARS FOR BOTH
Home DepotATLANTA & MOORESVIILE, N.C. — The rivalry between Home Depot and Lowe’s may be raging, but both retailers continue to thrive in a U.S. market whose economic heart beats to the rhythm of home building and remodeling activities.Lowe'sThe companies, which rank first and second in sales among home improvement dealers worldwide, scored big gains in revenue and profit in fiscal 2003:

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

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

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

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

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

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

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

RONA PROFITS SURGE ON ACQUISITION OF RÉNO-DÉPÔT
BOUCHERVILLE, Que. — Canada’s number-two home improvement retailer saw sales and profits increase in 2003, a year that saw Rona Inc. make the biggest acquisition in its history.Consolidated sales, the total of wholesale sales through distribution, combined with the sales at retail by its corporately owned stores and its share in franchised stores, climbed 16.2% to 2.71 billion, from $2.33 billion in 2002.

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

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

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

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

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

WHO ARE THE TOP 10 IN AMERICA?
SPECIAL REPORT — The growth of America’s leading home improvement retailers continues to reaffirm the growing consolidation among a handful of key players.

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

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

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

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

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

 

Company Retail sales % chg. stores
Home Depot $64.8 billion 11 1,707
Lowe’s Cos. $30.8 billion 15 925
Ace Hardware Corp. $13.0 billion N/A 5,027
TruServ Corp. $10.5 billion N/A 6,200
Do-it Best Corp. $9.0 billion N/A 4,500
Menard’s 6.5 billion 6.6 187
Sherwin-Williams 3.5 billion 5.1 2,688*
Stock Building Supply 2.77 billion* (7.8) 222
84 Lumber 2.5 billion 15 453
Builders FirstSource 1.75 billion 10 73


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

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

MENARD’S, LOWE’S EXPANDING WITH HUGE STORES
SPECIAL REPORT — Home Depot, for once, may not be setting a trend. The industry’s largest dealer is expanding with various-sized store formats, some as small as 80,000 sq.ft. But its rivals continue to break into new markets with gargantuan warehouse outlets.

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

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

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

TAIGA TOPS $1 BILLION: APPRAISES CHALLENGES
VANCOUVER, B.C. — Even as Taiga Forest Products, the Western-based lumber and building materials wholesaler, ends up the year by cracking the one-billion-dollar mark for the first time, it faces a number of challenges to continued growth — and the softwood lumber dispute with the U.S. is at the top of the list.

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

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

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

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

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

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

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

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

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

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

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

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 44.40 27.85 43.80
Canfor 13.50 7.60 13.49
Costco 39.50 27.00 38.86
Goodfellow 16.00 9.75 15.74
Home Depot 37.89 21.51 36.31
Hudson’s Bay 14.15 7.75 13.04
Lowe’s Cos. 60.42 35.45 56.00
Rona Inc. 35.00 13.20 30.25
Sears Canada 21.50 13.60 17.75
Sodisco-Howden 3.35 1.30 2.99
Taiga Forest 8.75 6.31 8.75
Wal-Mart 60.20 46.50 59.56
West Fraser 40.50 29.25 39.75
COMPANIES IN THE NEWS
VANCOUVER, B.C. — International Forest Products Co. has made a bid to acquire four coastal mills and one manufacturing plant owned by Doman Industries. The sell off would become part of Doman’s effort to dig itself out of bankruptcy protection. The deal includes some timberlands and forest tenures equalling about 2.7 million cubic metres of timber. In return, Interfor would pay $280 million in cash, which would be used to repay debt to secured creditors. The deal would allow for Doman to hold on to the balance of its existing wood products business and pulp operations.LONDON, UK — British retail giant Marks & Spencer has opened its first store devoted to homeware and furniture. Called Lifestore, the outlet in Gateshead is the first of 20 potential sites that M&S has identified for the concept, which reflects a new thrust into growing home décor and furniture area. The U.K. home décor market is reportedly worth around £20 billion a year, of which M&S has less than 2%.

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

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

PEOPLE ON THE MOVE
Claude Dauphinais, formerly head merchant for hand and power tools at Rona Inc., has left the company. No replacement has been named yet. (514-599-5100)Michael Drury has been appointed national sales manager for Hitachi. He was previously with Acklands Grainger as district sales manager. (905-564-9477)
U.S. MARKET INDICATORS:
Even though it’s been on a high note, consumer confidence appears to be faltering. According to the Conference Board, the consumer confidence index fell from 96.4 in January to 87.3 in February. The index had been rising steadily, from 76.8 in September to the 96.4 high in January.Real gross domestic product grew at an annual rate of 4.1% in the fourth quarter of 2003, according to the Commerce Department. This follows a growth rate of 8.2% in the third quarter of 2003.
CANADIAN MARKET INDICATORS:
Retailers had a tough time in December in Canada, as lower demand for motor vehicles, and poor sales in general merchandise and clothing stores caused retail sales to drop 1.2%, reports Statistics Canada. And while sales for the year were up 3.1% for the year, as retailers sold a total of $316 billion worth of goods and services in 2003, this increase was about half the 6.0% growth rate in 2002 — and was the weakest annual gain since 1995.Wholesale sales increased to $36.9 billion in December, largely thanks to a boost from the automotive sector, reports Statistics Canada. Total sales in December reached their highest level ever, slightly exceeding the last peak reached in January 2003. For the year, however, sales were up only 3.6%, well below the increase in 2002. For 2003, the growth in constant prices was 6.2%, a higher rate than in 2002 (+5.5%).
MEET CANADA’S TOP HOME IMPROVEMENT BUYERS
Home Depot, Canadian Tire, Home Hardware and more! Hardlines will host its third annual Meet the Buyers Breakfast Seminar, April 28, 2004. For more details, call Bev Allen at 416-489-3396 or bev@hardlines.ca.
CANADA’S HOME BUILDING STAYED STRONG IN 2003
OTTAWA — Canada’s robust building industry resulted in a record investment level in residential construction in 2003 says Statistics Canada. Investment reached $61.4 billion, up 11.5% from the previous record of $55.1 billion set in 2002.All three components of residential construction investment, new housing, renovations and acquisition costs, saw growth, fuelled by an increase in demand, tight rental and resale markets in some parts of the country, and an increase in the average value of housing.

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

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

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

****HARDLINES MARKETPLACE****
Don’t miss the products and services on the Hardlines web Marketplace:
https://hardlines.ca/html/marketplace.html
And check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp

HELP WANTED

SENIOR MANAGEMENT OPPORTUNITIES

TruServ Canada, a 100% Canadian-owned cooperative, has two exciting employment opportunities available! We provide hardware and general merchandise product and support programs for approximately 675 True Value Hardware, Country Depot and V&S Department stores across Canada.

  1. Regional Manager, Sales, Operations & Member Relations (East) — Responsibilities include: maximizing Corporate and Member growth, profitability and market share within the region through existing Member stores; leading and managing the District Managers to achieve store growth, retail, wholesale and profit objectives — this includes directing, training and leading the Member to participate and execute the essential retail programs for the specific banner; managing the existing base of stores through the District Manager, and through store visits, by working closely with the District Managers, including travelling with them and developing their skill sets. This position is based in our Kitchener office.
  2. National Growth Manager, True Value / V&S — Responsibilities include: Creating a professional business development and recruitment process coordinating all aspects of prospecting; researching and enhancing the True Value / V&S retail brands for future market development inclusive of marketing/advertising/communications, building décor, and small to large prototype models — this includes the conceptual development of prototype stores (by size); implementing an Active Brand Management process that targets prototypical markets and enhances brand equity. This position is based in our Winnipeg office.

Please visit our web site www.truserv.ca for more details on these two positions, including qualifications required. Interested candidates may submit a resume via email: employment@truserv.ca or confidential fax: (204) 453-9414.

**********************************************************************************

RETAIL ACCOUNTS EXECUTIVE

Master Lock, an industry leader in the security hardware industry, is seeking a Retail Accounts Executive.

A strong understanding of the retail market is a must, along with at least 3 years experience with large retail national accounts, specifically in the hardware wholesalers and warehouse home centers. Preference given to candidates with:

  • 5 years overall marketing/sales experience including preparatory field sales and marketing assignments,
  • proficiency in Microsoft Office,
  • exposure to key accounts’ vendor software,
  • fluent French.

Education equivalent to college degree required, preferably marketing or business administration.

Master Lock Canada is conveniently located in Oakville. Nearby highway access includes the QEW at Winston Churchill and 403 at Dundas Street.

Qualified applicants should send resume via email to tmedeiro@mlock.com. No phone calls please.

**********************************************************************************

QUEBEC BASED SALES REPRESENTATIVE


One of the largest plumbing manufacturers is in need of a sales representative to take full advantage of Quebec market based opportunities.

Responsibilities include managing and directing the sales process for various Quebec based accounts, including buying offices targeting Consumer sales areas. On the Retailer’s behalf, you’ll provide leadership into all category management issues including competitive positioning, sales data and forecasting, and cross-selling opportunities. You’ll work with a cohesive, dynamic team on product development, packaging, and PK/educational requirements.

Looking for an employer who continually demonstrates a commitment to teamwork and partnering with Retailers in their competitive position? To explore these opportunities in complete confidence, please contact Diana @ Human Resources. Interviews will be held during the weeks of February 16th and February 23rd. Email: DDavi79331@aol.com

**********************************************************************************
PRODUCTS OFFERED

 

 

 

ERAPRO
ERAPRO Winter Tools     877-372-9273     sales@erapro.ca

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Reiker

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SERVICES OFFERED

RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America’s leading manufacturers, managing their lines for Canada’s top hardware retailers, big boxes and mass merchandisers.

Contact Al Vanderveen at 519-439-6800, ext. 201, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com

**********************************************************************************

SELL YOUR COMPANY – OR BUY ONE – WITH HARDLINES CLASSIFIEDS!
DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE.

ONLY $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS.
TO PLACE YOUR AD, CALL
PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: buzz@hardlines.ca

Hardlines is published weekly (except monthly in December and August)
by McLARNEYCOM
542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7
© 2004 by Michael McLarney.
HARDLINES™ the electronic newsletter hardlines.ca
Phone: 416.489.3396; Fax: 416.489.6154
Michael McLarney, Editor & Publisher: mike@hardlines.ca
Beverly Allen, Director of Sales & Marketing: bev@hardlines.ca
Nancy Wright, Circulation Manager: nancy@hardlines.ca
Phyllis Nowell, Sales Manager: buzz@hardlines.ca
______________________________________________
THE HARDLINES “FAIR PLAY” POLICY:
Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week – but let us handle your internal routing from this end!
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Subscription: $229 (Canadian subscribers add $16.03 GST = $245.03 per year/ GST #13987 0398 RT). Secondary subscriptions at the same office are only $36 (Canadian subscribers add $2.52 GST = $38.52). Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to Hardlines/McLarneyCom.

Feb23_04

 


John Caulfield, Contributing Editor
 vol. x, #8 February 23, 2004

IN THIS ISSUE:
* Expo and Home Depot cross-over: more to come
* Canadian Tire still working out the bugs in newest concept stores
* Lowe’s makes licensing deal with Michael Graves: why it matters
* Rona hints at new store concept, expects more acquisitions
* Huttig Building Materials ends 2003 with strong numbers
* North American buyers prepare for Cologne Fair
* Wal-Mart plans giant 50-acre large facility
* Blue Mountain buys up IHDG
* ILDC’s new member marks new direction for group
* TruServ restructures to serve dealer growth

* * * * * *
NOTE: Dollar amounts are stated in the currency of the country from which the story originates.
Michael McLarney, Editor & Publisher

* * * * * *

“Experience is the name everyone gives to their mistakes.”
— Oscar Wilde
EXPO ELEMENTS IN HOME DEPOT “REWARD” HOMEOWNERS
SPECIAL REPORT — A lot of eyebrows have been raised over the installation of two standard Home Depot stores in California that incorporated a number of elements of Home Depot’s sister chain, Expo Design Centers. However, according to the president of Expo, it may just be part of a larger trend. After all, the introduction of more and more “soft DIY” assortments into the traditional stores already signals a new direction for Home Depot.In fact, the first appearance of linens, window treatments and towels was in two stores in Canada, specifically Yorkdale and Leaside, both in Toronto. “You see bits of Expo in Canada,” says Annette Verschuren, president of both Expo and Home Depot’s Canadian division. She goes on to note that there’s a tremendous opportunity to sell more than just the materials used to build and renovate. “The opportunity is inside the home and Home Depot is really moving to serve that décor segment.”

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

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

HUTTIG POSTS BEST FOURTH QUARTER IN FIVE YEARS
CHESTERFIELD, Mo. — Huttig Building Products, the 54-branch building materials distributor based here, reported a 14% gain in sales to $230.3 million for the quarter ended Dec. 31, 2004. That was the highest revenue the company has generated in that quarter since 1999. It also reported quarterly net income of $1.6 million, vs. zero dollars for the same period a year ago.For its fiscal year, Huttig, which distributes into 46 states, saw its sales rise 4% to $909.3 million (after two consecutive years of sales declines), and its net income improve to $3.4 million, vs. a loss of $11.7 million in fiscal 2002.

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

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

LOWE’S ADDS TO PROPRIETARY BRANDS WITH MICHAEL GRAVES
MOORESVILLE, N.C. — Lowe’s Co., the industry’s second-largest home improvement dealer, has joined forces with Masco’s Delta Faucet division to introduce a line of kitchen and bathroom faucets under the label of designer Michael Graves.

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

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

CANNIBALIZATION A FACTOR IN CANADIAN TIRE EXPANSION
TORONTO — Canadian Tire‘s newest store program, called Concept 20/20, is not being rolled out in full force — at least, not yet. Mark Foote, president of Canadian Tire Retail, the company’s largest division, spoke to analysts at the recent CIBC World Markets Conference about the challenges in getting the 20/20 format fine-tuned.

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

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

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

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

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

ILDC SIGNS A SPECIALTY INSTALLER AS NEW MEMBER
MARKHAM, Ont. — In a time when buying groups are aggressively vying for members, one group is particularly careful about admitting anyone new to its ranks. Independent Lumber Dealers Co-operative has barely two dozen members — and likes it that way — since those members represent some of the largest independent dealers in the country.

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

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

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

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

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

RONA HEAD HINTS AT NEW FORMAT,
PLANS TO RECRUIT 50 DEALERS
MONTREAL — Even though it failed to recruit Irly Distributors to its ranks, Rona Inc. continues to look for more acquisitions, and has the credit facilities to do it.

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

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

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

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

DMG AND HOME DEPOT CANADA SOLIDIFY PARTNERSHIP
FOR HOME SHOWS
TORONTO — dmg worldmedia, an international exhibition and publishing company, has finalized a previously announced deal with Home Depot Canada, securing the country’s largest home improvement retailer as the category-exclusive sponsor for all dmg’s consumer Home Shows in 2004. The deal, worth what dmg calls a “seven-figure partnership agreement,” will provide Home Depot with access to more than one million attendees through 13 shows across the country during the current year.

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

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

NORTH AMERICAN BUYERS GET READY FOR COLOGNE SHOW
SPECIAL REPORT — Buyers and vendors from across the United States and Canada are preparing to gather in Cologne, Germany next month for the world’s largest hardware and home improvement show.

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

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

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

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

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

TRUSERV CANADA ANNOUNCES RESTRUCTURING
WINNIPEG, Man. — TruServ Canada has restructured its member development and member services departments in an effort to generate growth with both new and existing members.

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

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

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

BLUE MOUNTAIN BUYS AILING WALLCOVERINGS FIRM
TORONTO — The beleaguered Imperial Home Décor Group, one of the largest suppliers of wallcoverings in North America, has agreed to sell its assets to Blue Mountain Wallcoverings, based here, for an undisclosed sum. New York-based IHDG, which has struggled under bankruptcy protection, is being merged with a manufacturer and distributor that has more than 30 years experience, and is one of the world’s largest contract printers of wallpaper.

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

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 44.25 27.85 42.70
Canfor 13.30 7.60 12.93
Costco 39.50 27.00 38.18
Goodfellow 16.00 9.75 15.75
Home Depot 37.89 21.45 35.70
Hudson’s Bay 14.15 7.75 13.63
Lowe’s Cos. 60.42 34.83 58.38
Rona Inc. 35.00 12.26 34.90
Sears Canada 21.50 13.60 17.27
Sodisco-Howden 3.35 1.30 3.07
Taiga Forest 8.10 6.31 8.00
Wal-Mart 60.20 46.50 59.43
West Fraser 39.99 29.25 39.00
COMPANIES IN THE NEWS
BENTONVILLE, Ark. — Wal-Mart Stores saw 4Q profit increase 11% to $2.7 billion, while sales in the quarter were up 12% to $74.5 billion. Same-stores sales rose 4.8%. For the year, Wal-Mart earned $9.05 billion, up from $7.96 billion. Revenue rose to $258.68 billion from $231.58 billion in 2002.HOFFMAN ESTATES, Ill. — Sears Hardware stores are getting a makeover, with the addition of heavy appliances in 35 of its stores. Parent Sears, Roebuck & Co. says the remaining 103 Sears Hardware outlets will start selling appliances by the end of the year. Sears has historically been the number-one appliance seller in the U.S., with 41.6% of that market in 2003. But the number-two player is Lowe’s, who has been closing the gap, with 14.1% last year, along with rival Home Depot, whose share climbed to 6.2%.

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

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

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

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

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

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

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

PEOPLE ON THE MOVE
Leon Penchuk, formerly at Convex Systems Ltd., has joined Burlington Merchandising & Fixtures as director of store development & design. His retail planning background includes a background working at Ace Hardware Canada and The Watt Group, where he worked on the original Do it center program. (905-467-6881)Jim Johnston, formerly of McDonald Sales, has joined Xtreem Sales as sales manager for Ontario.

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

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

U.S. MARKET INDICATORS:
WASHINGTON — The sizzling pace that the home construction industry has set for the rest of the economy cooled off a bit more than economists expected in January, when housing starts fell 7.9% below December 2003, to an annualized rate of 1.90 million units. That’s still 4.1% higher than the rate in January 2003, but could be a sign that building activity is beginning to level off.The National Association of Home Builders, in fact, estimates that housing starts in 2004 will be around 1.79 million units. However, the group also reports that its housing market index (an index of current sales, expected sales and buyer traffic) is now at its lowest level since July.

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

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

CANADIAN MARKET INDICATORS:
In 2003, consumers paid an average of 2.8% more for the goods and services in the Consumer Price Index basket than they did in the previous year. This rise was slightly larger than the 2.2% annual average gain in 2002, and similar to the increase of 2.6% in 2001. Most of the upward pull in 2003 occurred in the services sector, where prices rose 3.6% on average. In comparison, prices of goods, which are influenced much more by the impact of the stronger Canadian dollar, increased only 1.9%.Homeowners’ replacement costs, which represent the expenditures necessary to compensate for house depreciation, and are estimated using new housing prices (excluding land) — were up 6.4% on average, the strongest increase since 1989. The rate of increase in the index has been accelerating in the last four years, as the housing market in Canada has been heating up, helped by low interest rates.
MEET CANADA’S TOP HOME IMPROVEMENT BUYERS
Hardlines will host its third annual Meet the Buyers Breakfast Seminar, April 28, 2004. Canadian Tire and Home Hardware have already agreed to join us, but watch for more details. To register, contact Nancy Wright; or 416-489-3396.
OVERHEARD…
“Home Shows provide a self directed permission marketing environment where consultative selling takes place.” — Using the latest media-speak, James Peterson, president of Quantum Marketing, says something about the deal putting Home Depot Canada in Home Shows across the country.

****HARDLINES MARKETPLACE****
Don’t miss the products and services on the Hardlines web Marketplace:
https://hardlines.ca/html/marketplace.html
And check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp

HELP WANTED

SENIOR MANAGEMENT OPPORTUNITIES

TruServ Canada, a 100% Canadian-owned cooperative, has two exciting employment opportunities available! We provide hardware and general merchandise product and support programs for approximately 675 True Value Hardware, Country Depot and V&S Department stores across Canada.

  1. Regional Manager, Sales, Operations & Member Relations (East) ­ Responsibilities include: maximizing Corporate and Member growth, profitability and market share within the region through existing Member stores; leading and managing the District Managers to achieve store growth, retail, wholesale and profit objectives ­ this includes directing, training and leading the Member to participate and execute the essential retail programs for the specific banner; managing the existing base of stores through the District Manager, and through store visits, by working closely with the District Managers, including travelling with them and developing their skill sets. This position is based in our Kitchener office.
  2. National Growth Manager, True Value / V&S ­ Responsibilities include: Creating a professional business development and recruitment process coordinating all aspects of prospecting; researching and enhancing the True Value / V&S retail brands for future market development inclusive of marketing/advertising/communications, building décor, and small to large prototype models ­ this includes the conceptual development of prototype stores (by size); implementing an Active Brand Management process that targets prototypical markets and enhances brand equity. This position is based in our Winnipeg office.

Please visit our web site www.truserv.ca for more details on these two positions, including qualifications required. Interested candidates may submit a resume via email: employment@truserv.ca or confidential fax: (204) 453-9414.

**********************************************************************************

RETAIL ACCOUNTS EXECUTIVE

Master Lock, an industry leader in the security hardware industry, is seeking a Retail Accounts Executive.

A strong understanding of the retail market is a must, along with at least 3 years experience with large retail national accounts, specifically in the hardware wholesalers and warehouse home centers. Preference given to candidates with;

  • 5 years overall marketing/sales experience including preparatory field sales and marketing assignments,
  • proficiency in Microsoft Office,
  • exposure to key accounts’ vendor software,
  • fluent French.

Education equivalent to college degree required, preferably marketing or business administration.

Master Lock Canada is conveniently located in Oakville. Nearby highway access includes the QEW at Winston Churchill and 403 at Dundas Street.

Qualified applicants should send resume via email to tmedeiro@mlock.com. No phone calls please.

**********************************************************************************

QUEBEC BASED SALES REPRESENTATIVE


One of the largest plumbing manufacturers is in need of a sales representative to take full advantage of Quebec market based opportunities.

Responsibilities include managing and directing the sales process for various Quebec based accounts, including buying offices targeting Consumer sales areas. On the Retailer’s behalf, you’ll provide leadership into all category management issues including competitive positioning, sales data and forecasting, and cross-selling opportunities. You’ll work with a cohesive, dynamic team on product development, packaging, and PK/educational requirements.

Looking for an employer who continually demonstrates a commitment to teamwork and partnering with Retailers in their competitive position? To explore these opportunities in complete confidence, please contact Diana @ Human Resources. Interviews will be held during the weeks of February 16th and February 23rd. Email: DDavi79331@aol.com

**********************************************************************************
PRODUCTS OFFERED

 

 

 

ERAPRO
ERAPRO Winter Tools     877-372-9273     sales@erapro.ca

**********************************************************************************

 

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**********************************************************************************  
SERVICES OFFERED

RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America’s leading manufacturers, managing their lines for Canada’s top hardware retailers, big boxes and mass merchandisers.

Contact Al Vanderveen at 519-439-6800, ext. 201, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com

**********************************************************************************

SELL YOUR COMPANY – OR BUY ONE – WITH HARDLINES CLASSIFIEDS!
DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE.

ONLY $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS.
TO PLACE YOUR AD, CALL
PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: buzz@hardlines.ca

Hardlines is published weekly (except monthly in December and August)
by McLARNEYCOM
542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7
© 2004 by Michael McLarney.
HARDLINES™ the electronic newsletter hardlines.ca
Phone: 416.489.3396; Fax: 416.489.6154
Michael McLarney, Editor & Publisher: mike@hardlines.ca
Beverly Allen, Director of Sales & Marketing: bev@hardlines.ca
Nancy Wright, Circulation Manager: nancy@hardlines.ca
Phyllis Nowell, Sales Manager: buzz@hardlines.ca
______________________________________________
THE HARDLINES “FAIR PLAY” POLICY:
Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week – but let us handle your internal routing from this end!
______________________________________________
Subscription: $229 (Canadian subscribers add $16.03 GST = $245.03 per year/ GST #13987 0398 RT). Secondary subscriptions at the same office are only $36 (Canadian subscribers add $2.52 GST = $38.52). Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to Hardlines/McLarneyCom.

Feb16_04

 


John Caulfield, Contributing Editor
 vol. x, #7 February 16, 2004

IN THIS ISSUE:
* Rona wants to double market share, hints at new format
* Stanley’s new recruits strengthen the ties that bind with Home Depot
* Ace Hardware has great growth in 2003
* Canadian Tire’s year-end results are hot, hot, hot
* Garden Ridge forced into Chapter 11
* New buying show gets strong start in Southwestern Ontario
* Georgia-Pacific rides wave of strong housing market
* Matreco Hardware begins shipping to Ontario customers

* * * * * *
NOTE: Dollar amounts are stated in the currency of the country from which the story originates.
Michael McLarney, Editor & Publisher

* * * * * *

“The opposite of a profound truth may well be another profound truth.”
— Niels Bohr (Nobel prize-winning physicist and friend of Albert Einstein)
RONA WANTS TO DOUBLE MARKET SHARE, PLANS $200 MILLION INVESTMENT
BOUCHERVILLE, Que. — With a mandate to invest $200 million this year — not $300 million as widely, and erroneously, reported (don’t get too cocky, given our track record — MM) — in its expansion for the next 30 months, Rona Inc. is committed to doubling its market share over the next five years.The company’s new 320,000-sq.ft. distribution centre will open in Calgary and be fully operational by the end of March, and in the short term, some $80 million has been slated for expansion in the West. For example, $20 million of that went into the development of a new big box Rona Home & Garden store in Edmonton’s Namao area, which opened last Thursday. A similar amount will be spent launching the company’s next big box, which will open this summer in Regina, Sask. Another five traditional stores, weighing in at about 35,000-40,000 sq.ft., and flying either Rona’s Home Centre or Building Centre banner, are also planned to open in the West before year’s end.

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

ACE’S PROFIT SOARS IN FISCAL 2003
OAK BROOK, Ill. — Ace Hardware, the industry’s largest dealer-owned buying group, exceeded the $100 million plateau for earnings in the first time in its 80-year history in 2003. And that was very good news for the co-op’s 5,000 dealer-members.Ace reported that its net income last year increased 22.7% to $100.7 million on wholesale sales of $3.16 billion — up 4.3% over 2002. In the fourth quarter of 2003, Ace’s revenue increased 11.6% to $836.4 million, and its earnings skyrocketed by 128.3% to $18.9 million.

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

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

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

STANLEY WORKS RETOOLS ITS CORPORATE SUITE
NEW BRITAIN, Conn. — In recent weeks, Stanley Works has made two key management appointments, as it moves forward with its ongoing restructuring.

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

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

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

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

CANADIAN TIRE PROFITS SOAR IN 2003
TORONTO — Canadian Tire Corp. has unveiled strong fourth-quarter profits, bolstered by solid holiday retail sales, and raised its profit projection for the second time in three months. The broad-based hard goods retailer had 4Q net earnings of $93.6 million, up a whopping 46.7% a year earlier, on sales of $2.4 billion.

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

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

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

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

LUMBER DEALERS LAUNCH OWN SHOW FOR ONTARIO
LONDON, Ont. — Being in the trade show business these days is all about managing expectations. So anyone going to the brand new Winter Buying Show that expected a small, well-organized buying event with dealers from all over Ontario would not have been disappointed.

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

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

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

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

TRUSERV CANADA SIGNS SUPPLY DEAL WITH DELROC
WINNIPEG, Man. — TruServ Canada, the dealer-owned co-op wholesaler based here, has signed a wholesale supply agreement with Delroc Industries Ltd., in Langley, B.C. The new affiliation will offer Delroc’s LBM members access to TruServ’s hardware products and programs under a group arrangement. The terms of the deal make it possible for individual dealers to access the programs without joining TruServ or flying the True Value banner.

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

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

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

LEASES PUSH GARDEN RIDGE INTO CHAPTER 11
HOUSTON — Garden Ridge, the home décor dealer operating 44 stores in 13 states, on Feb. 2 filed for Chapter 11 bankruptcy protection from its creditors.

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

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

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

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

LOWE’S VETERAN BRIDGEFORD TAKES OVER NEW BUSINESS DEVELOPMENT
MOORESVILLE, N.C. — Greg Bridgeford, who has served in several key management positions for 22 years at Lowe’s Cos., has been named the retailer’s executive vice-president — business development. The 49-year-old Bridgeford will oversee Lowe’s development of new business opportunities, strategic planning, research and business process improvement.

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

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

GEORGIA-PACIFIC PROFITS FROM HOME BUILDING SURGE
ATLANTA — America’s resilient housing market continues to pay dividends for suppliers and retailers of building products. Georgia-Pacific, one of the country’s leading suppliers, pointed to home building’s strength as the engine driving the company’s profit of $31 million for the quarter ended January 3, 2004. That compares to a net loss of $234 million for the same period a year ago.

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

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

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

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

FOREST CERTIFICATION DRIVES NEW WAVE OF U.S. POLICIES
MONTREAL — A new report from the trade publication Forest Certification Watch identifies a new wave of increasingly eco-sensitive procurement policies in the U.S.

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

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

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 44.25 27.85 42.78
Canfor 13.25 7.60 13.10
Costco 39.50 27.00 37.61
Goodfellow 16.00 9.75 16.00
Home Depot 37.89 20.18 36.17
Hudson’s Bay 14.15 7.75 13.64
Lowe’s Cos. 60.42 33.37 57.60
Rona Inc. 32.97 11.75 32.82
Sears Canada 21.50 13.60 17.70
Sodisco-Howden 3.35 1.30 3.08
Taiga Forest 8.10 6.31 7.75
Wal-Mart 60.20 46.25 56.32
West Fraser 39.99 29.25 38.25

COMPANIES IN THE NEWS
ATLANTA — Home Depot will eliminate as many as 100 jobs from its finance departments come this April, part of a restructuring of its Financial Operations group. The cuts are being made in the name of productivity and operating efficiencies, said the giant retailer in a prepared statement.TORONTO — Home Depot Canada has backed off on its offer to buy the storied Maple Leaf Gardens and turn it into an “urban” store, saying it would be just too costly. Although the deal may have been made viable by adding a condominium development, such a plan that would not pass meet the requirements of the Toronto Historical Board to preserve the art deco features of the building.

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

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

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

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

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

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

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

PEOPLE ON THE MOVE
Georgia-Pacific Corp. has made some changes to its executive ranks: Sean R. Fallmann, formerly vice-president and general manager of G-P’s Dixie retail business, has been named president — Dixie business … James E. Terrell, vice-president and controller, has elected to retire early, effective July 1, 2004, after 20 years with Georgia-Pacific. He will be succeeded by Robert P. Nelson, vice-president — finance, consumer products and packaging.Nick Cowling, formerly senior account manager at Edelman Canada, has joined Home Depot Canada as public relations manager. While at Edelman, he worked on the Home Depot account. (416-412-4142)

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

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

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

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

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

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

U.S. MARKET INDICATORS:
Retail sales fell in January, says the Commerce Department. They dropped 0.3% to $322.87 billion in January, the first decline since September. Excluding autos, however, retail sales posted a stronger-than-expected 0.9% increase.December wholesaler sales were up 1.0% from the previous month, and up 8.0% over December 2002, reaching $250.9 billion, says the Commerce Department. December sales of durable goods increased 1.4% from last month and were up 9.7% from a year ago. Compared with last month, wholesale sales of lumber and other construction materials decreased 2.4%.
CANADIAN MARKET INDICATORS:
Housing starts dropped slightly in January from the previous month, reports CMHC, but they remained high, at 195,500 seasonally adjusted, compared with 219,400 starts in December 2003. Urban starts fell 11.4% to 169,900 units seasonally adjusted, with most of the decline coming from multiples, which decreased 15.4% in January to 74,600. Single starts declined 7.9% to 95,300 seasonally adjusted.The New Housing Price Index rose 0.3% in December, down from November’s increase of 0.7%, reports Statistics Canada. For the third consecutive month, this index of contractors’ selling prices advanced 5.0% on a 12-month basis. Prices were up in 13 of the 21 urban centres surveyed.
NOTED…
Westcoast 2004, The only trade show and convention in British Columbia for the building supply industry, will be held at the Convention and Trade Centre in Penticton, B.C., March 5-6, 2004. With more than 125 exhibitors in 200-plus booths, space is already sold out! Four out of five dealers in British Columbia are expected to attend. For more information, contact: George Tracy, president, Building Supply Dealers Association of B.C., 604-513-2205; george@bsdabc.com.

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Feb9_04

 


John Caulfield, Contributing Editor
 vol. x, #6 February 9, 2004

IN THIS ISSUE:
* Hardware shows find reinvention through new, smaller vendors
* Do it Best offers new store expansion program
* IRLY dealers reject offer from Rona
* Canadian show makes deal with Frankfurt trade show company
* Circuit City exec joins Home Depot’s Expo team
* Forest products procurement policies signal key U.S. trend
* G-P surges on strong home improvement market
* ILDC signs new member

* * * * * *
NOTE: Dollar amounts are stated in the currency of the country from which the story originates.
Michael McLarney, Editor & Publisher

* * * * * *

“A woman drove me to drink and I never got around to thanking her.”
— W.C. Fields
HARDWARE SHOWS FIND SUCCESS AS SHOWCASE
FOR NEW PRODUCTS
TORONTO — For every vendor at the Canadian Hardware & Building Materials Show last week who said they wouldn’t be back, another insisted they had enjoyed a good show. But a good show nowadays is different than it was 10 years ago. For many, that good result meant having a chance to get face to face with a handful of key buyers, who in the past would have found their time being taken up chatting in the booths of the major brand suppliers. In the absence of (most of) the major brands, buyers had a chance to find new, hitherto undiscovered products, which the show has been filling its halls with since last year’s show.And these smaller vendors, many exhibiting for the first time, were often the ones to report a favorable response. Faced with falling attendance and fewer exhibitors, this re-invention of the show in Toronto, which ran February 1-3, reflects what’s taking place in the U.S., as the National Hardware Show moves this year to Las Vegas in an effort to revive its fortunes — and its flagging attendance. With more than 1,500 vendors already signed up, it too is nonetheless not relying on the big brands the way trade shows have done in years past.

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

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

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

CANADIAN SHOW MAKES DEAL WITH
FRANKFURT TRADE SHOW ORGANIZER
TORONTO — Bob Elliott, head of the retail association that runs the Canadian Hardware and Building Materials Show, surprised guests at an industry breakfast on the second day of the show by announcing CHS has formed a partnership with Messe Frankfurt, an international trade show company that produces 102 events around the world, including two other hardware shows, one in Argentina and another in the United Arab Emirates.Elliott, president of the Canadian Retail Hardware Association, which owns CHS, says that, with the backing of Messe Frankfurt, he intends to make the show the focal point for the Canadian industry, adding in a conference to the trade show. He said CHS will again attempt to consolidate the event activities of other organizations in the industry. Many, however, had already been associated with CHS in the past and since departed.

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

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

IRLY DEALERS VOTE AGAINST ALLIANCE WITH RONA
SURREY, B.C. — A potential acquisition or partnership by Rona in Western Canada has been voted down, as the membership of IRLY Distributors, a privately owned LBM buying group and wholesaler, voted against an alliance.

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

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

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

DO IT BEST GIVES DEALERS TOOLS TO OPEN NEW STORES
Fort Wayne, Ind. — In an effort to encourage expansion among its dealers, Do it Best Corp. introduced a new program at its recent dealer market, held in Orlando, Fla. Called RetailSTART!, the new program is designed to help members work through the entire process of assessing, financing and building a new store. It requires dealers to have at least two stores already, and the new store, or stores, must be at least 5,000 sq.ft. in size.

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

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

TRUSERV SEES RAPID GROWTH IN QUEBEC, EASTERN CANADA
WINNIPEG, Man. — TruServ Canada has committed to expand its presence across the country, but is especially focusing on the East, says new president and CEO Bill Morrison. “We see our most rapid growth in the Ontario and Eastern markets,” he says.

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

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

CANADA EXCEEDS U.S. IN FOREST CERTIFICATION IN 2003
MONTREAL — Certified forest areas worldwide grew by 31% in 2003 to reach 173 million hectares (427 million acres), mainly due to a doubling of certified lands in Canada, which reached 56 million hectares (140 million acres). This is one of the key findings included in the newly-released 2003 Year in Review report from the independent research group Forest Certification Watch.

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

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

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

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

SEARS LOOKS “OFF MALL,”
LAUNCHES SPECIALTY FLOORING STORE
TORONTO — Sears Canada wants to move into power centers, a departure from its marriage to the traditional shopping mall. Mark Cohen, chairman and CEO of Sears Canada, was speaking last week at the CIBC World Markets Conference. He said 23-25 sites exist throughout Canada that can support full-line “off mall” department stores as anchors for power centers.

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

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

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 43.32 27.85 41.69
Canfor 12.79 7.60 13.00
Costco 39.02 27.00 38.14
Goodfellow 15.65 9.75 15.45
Home Depot 37.89 20.18 36.33
Hudson’s Bay 13.59 7.75 13.26
Lowe’s Cos. 60.42 33.37 54.67
Rona Inc. 31.80 11.75 31.70
Sears Canada 21.50 13.60 17.90
Sodisco-Howden 3.35 1.30 3.14
Taiga Forest 8.10 6.30 7.95
Wal-Mart 60.20 46.25 57.58
West Fraser 39.99 29.25 36.60

COMPANIES IN THE NEWS
VERNON HILLS, Ill. — Wickes Inc. says it’s made progress in its reorganization, including receiving interim court approval for a $100 million debtor-in-possession (DIP) credit facility to fund its operations. Since filing for bankruptcy protection on January 20, 2004, the Bankruptcy Court has approved a number of the motions intended to support Wickes’ staff continuing to receive salary and benefits, while giving the company the operational and financial support needed to keep paying vendors as it reorganizes.AJAX, Ont. — Independent Lumber Dealers Co-operative has added a new member. The select buying group, which has only 24 members but represents more than $2 billion in sales at retail, has added Chouinard Bros./Gibson Building Supply of Markham, Ont. Chouinard was established in 1972 and is a leading residential roofing company in the Greater Toronto Area, and a supplier of other building materials.

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

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

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

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

PEOPLE ON THE MOVE
Tom Hurney has joined Home Depot as vice-president store operations for the Expo Design Centers division. Hurney has a strong background with many leading retailers, including Gap and Macy’s. Most recently, he was at Circuit City. He strengthens the Expo team in Atlanta, as Expo’s interim president, Annette Verschuren, continues to divide her time between Atlanta and Toronto, where she also heads up the Home Depot Canada division. In a recent article in the Atlanta Journal Constitution, Verschuren said she might stay on permanently as president, with the vp operations job filled.Richard Marsh

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

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

CANADIAN MARKET INDICATORS:
Housing starts are expected to remain strong in 2004, reaching 203,900 units, their third highest level since 1989, according to Canada Mortgage and Housing Corporation‘s latest report. This is down from a 15-year high of 218,400 units in 2003, but still above the 200,000 mark, considered an important level. Factors contributing to the strong demand include economic growth and continued job creation. Due to an expected gradual rise in mortgage rates, which will temper house resales, house prices are expected to drop, and the pace of new home construction should ease in the second half of the year. The result in 2005 is a forecasted level of starts of 191,800 units.
CORRECTION
Okay, my apologies for recent gaffes. We added a member to Reliance, when in fact TruServ Canada, Castle Building Centres and IRLY Distributors all share membership in the hardware buying group, Mutual Hardware … We moved the town of Newton — and Newton Enterprises, the Rona dealer therein — from Manitoba to Alberta … Lumber OneAs for Lumber One‘s affiliation before joining Rona, well, enough said about that … Finally, we heaped ignominy upon Louis Kotnjek at GE Consumer Products — Lighting by calling him Ed. (Okay, I’ve rested up after the Hardware Show, I’m laying off the Chinese food, and I’m back on my game! — MM)
OVERHEARD…
“We’ve got good customers. I don’t know what happened here.”
— Don Harrison, a corporate spokesman for Home Depot, on the shooting of a customer in a Home Depot store near Philadelphia last Thursday. (Well, at least nobody bared their breast! — Michael)
ONLY ONE BOOTH LEFT IN CANADA STAND AT COLOGNE SHOW BOOK NOW!
Call Barbara Hills (416-598-3343) now there’s only one booth left in the Canada pavilion at International Hardware Fair/Practical World fair, March 14-17 in Cologne. Then come to the 4th annual Canada Night Reception on March 14th. The next day, Hardlines will host a special Networking Lunch for North American vendors to meet Europe’s top buyers on Monday, March 15. For more details, call Bev Allen at 416-489-3396 or bev@hardlines.ca.

****HARDLINES MARKETPLACE****
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© 2004 by Michael McLarney.
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Feb2_04

 


John Caulfield, Contributing Editor
 vol. x, #5 February 2, 2004

IN THIS ISSUE:
* Home Depot leads way to increased proprietary products
* IRLY dealers to decide their future: TruServ offers one alternative
* Franks Nursery, Calloway’s feel the heat from big box L&G
* Rona gains momentum in Western Canada

* * * * * *
NOTE: Dollar amounts are stated in the currency of the country from which the story originates.
Michael McLarney, Editor & Publisher

* * * * * *

“How far you get in life is not as important as how you got there.”
— Far East Fortune Cookie Co. (This editor relies on a lot of takeout food when on deadline)
RONA STEAMROLLS WEST: TRUSERV OFFERS DISTRIBUTION ALTERNATIVE
WINNIPEG, Man. — Rona Inc., Canada’s number-two home improvement retailer, is making waves in Western Canada with the recent signing of its first independent dealers there (see story below). However, recruitment of individual dealers is just one way Rona is committed to growth; it also seeks operations it can purchase outright.IRLY Distributors, based in Surrey, B.C., is unique in being a buying group of LBM dealers that has its own distribution facility. It’s also unique by virtue of the fact its membership of 54 dealers with 82 dealers, mainly in British Columbia and Alberta, has remained relatively stable for more than a decade. However, that uniqueness — and that stability — could be put to the test if either IRLY’s board should elect to sell its DC and/or its membership should choose to join forces with a larger retail organization.

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

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

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

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

HOME DEPOT PLANS TO EXPAND RIDGID LINEUP
ATLANTA — Home Depot has aggressive plans to keep expanding its Ridgid line of proprietary power tools. New products will include higher end compressors and tool boxes aimed at the pro market, expected to hit stores before mid-year. A variety of other products are planned for the last half of the year, as well.By broadening its assortments with the Ridgid brand, Home Depot continues to strengthen its offerings through proprietary brands, products that are not strictly private label, but are nonetheless exclusive to Home Depot. The Ridgid line is made by a partnership between Emerson Electric Co. and the One World Technologies unit of Hong Kong’s TechTronic Industries.

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

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

CHANGES HIT LEADING L&G DEALERS
TROY, Mich. & FORT WORTH, Tex. — Two of America’s leading lawn and garden retailers — Frank’s Nursery & Crafts and Calloway’s Nurseries — continue to go through operational and management changes that reflect the competitive volatility of this sector.

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

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

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

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

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

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

RONA SIGNS ITS SECOND WESTERN DEALER
CARSTAIRS, Alta. — Murray Pound wants more retail business, and he believes Rona Inc. is the company that’s going to help him get it. Pound owns Lumber One & Hardware Too, a building center in this community about 30 minutes north of Calgary. But he didn’t feel the store had much caché with the influx of new homeowners who commute to Calgary, where the Rona name is well known, thanks to the presence there of three Rona Home & Garden stores and one Rona Home Centre.

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

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

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

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

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

ED ZOLLER, DO-IT BEST PURCHASING VP, RESIGNS
FORT WAYNE, Ind. — Ed Zoller, who for the past four years has been the vp-hardlines purchasing for the buying group Do-it Best Corp., resigned from that post officially on January 23. The 54-year-old Zoller worked for the co-op nine years in various capacities, including retail division specialist, regional manager of the co-op’s Northeast and Southeast divisions, and the manager of its Retail Plus member consulting program.

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

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

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

HOME HARDWARE EXPANDS INTERNET REACH WITH ONLINE RETURNS
ST. JACOB’S, Ont. — Home Hardware‘s credit department is now online. While just over half of the co-op wholesaler’s network of 1,000 co-op dealers across Canada have internet access, head office is not deterred. In fact, the new initiative is expected to speed dealer acceptance of the wireless world.

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

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

CENTRAL GARDEN BUYS NEW ENGLAND POTTERY
LAFAYETTE, Calif. — Central Garden and Pet, the marketer and distributor of consumer and professional pet and garden supplies perhaps best known for its Pennington Seed brand, has agreed to acquire the assets of New England Pottery, a Foxboro, Mass. company that is the largest supplier of decorative pottery in the Northeast and Mid-Atlantic states. New England is also a major distributor of Christmas lighting and other seasonal fare.

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

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

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

WHAT SELLS AT THE COLDEST LUMBER YARD IN THE WORLD?
Falcon Lake, Man. — According to Greg Nichol, who owns Lumber One Building Supplies Ltd., a Sexton dealer in this town in eastern Manitoba, he’s selling “nothing!”

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

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

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 43.32 27.85 41.00
Canfor 12.79 7.60 12.25
Costco 39.02 27.00 36.94
Goodfellow 15.65 9.75 15.55
Home Depot 37.89 20.10 35.47
Hudson’s Bay 12.97 7.75 12.82
Lowe’s Cos. 60.42 33.37 53.55
Rona Inc. 31.80 11.75 30.55
Sears Canada 21.50 13.60 17.50
Sodisco-Howden 3.35 1.30 2.93
Taiga Forest 8.10 6.30 7.80
Wal-Mart 60.20 46.25 53.85
West Fraser 39.99 29.25 36.30
COMPANIES IN THE NEWS
NASHVILLE, Tenn. — Tractor Supply Co. reported a 4Q net sales increase of 18.5% to $388.5 million from $327.9 million last year. Same-store sales increased 9.6%, versus last year’s increase of 6.2%, reflecting strong sales of livestock and pet products, continued growth in seasonal, hardware and tool categories. Net income increased 32.7% to $16.9 million, compared with net income of $12.7 million in the fourth quarter of 2002. During the quarter, the company opened two new stores, relocated six existing stores and closed one store. For the year, net sales increased 21.7% to $1.473 billion, compared with $1.210 billion in 2002. Same-store sales increased 7.0% for the year. The company opened 31 new stores in 2003.BURNABY, B.C. — Taiga Forest Products saw sales for the three months ended December 31, 2003 rise 20% to $244.0 million, while earnings were $1.82 million, compared with $364,000 last year. For the nine-month period, sales were $808.7 million, with earnings of $6.8 million, up from sales of $702.9 million and earnings of $8.5 million last year. The prior year included the reversal of a $13.6 million countervailing and anti-dumping duty accrued liability.

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

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

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

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

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

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

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

TOTEM’S THOROGOOD HONORED AS LUMBERMAN OF THE YEAR
Jim ThorogoodSASKATOON, SK — Jim Thorogood, head of Totem Building Supplies, was awarded the Industry Achievement Award for 2003 by the Western Retail Lumber Association during its recent show and gala. As head of the 14-store chain that figures prominently in the Alberta market, Thorogood has grown the company into one of the 10 leading home improvement chains in Canada. Totem had sales last year of about $225 million. (Picture courtesy of Raylene Design Studio)
PEOPLE ON THE MOVE
Tractor Supply Co. has appointed Edna Morris to its board of directors. The addition of Morris, age 52, expands the board to 10 members and increases its independent membership. Over the past three decades, Morris has served in numerous management and leadership capacities in the restaurant industry, most recently as president of Red Lobster, a chain of 675 seafood restaurants.Tom Donaldson has been appointed president of CanWel, replacing Bernie McSherry, who retired on January 13. Previously, Donaldson was vice-president and general manager for Western Canada. He has been with the LBM distributor more than eight years and was with Emco Distribution prior to joining CanWel … Other changes at CanWel: Rick Royce, previously vice-president commodity sales, is now vice-president sales … Andrew Allen has been named director of applied management. He was previously director of flooring products … Rocco Di Pasquale no longer with CanWel.

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

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

U.S. MARKET INDICATORS:
According to the Congressional Budget Office, the U.S. government will spend $477 billion more than it takes in during fiscal 2004, which ends March 31. But the deficit is expected to fall to US$362 billion in 2005. “At 4.2% of the nation’s gross domestic product, it would represent a smaller share of the economy than the deficits of the mid-1980s and early 1990s,” CBO said.
CANADIAN MARKET INDICATORS:
Retail sales fell 0.3% in November to $26.3 billion, after remaining essentially flat in October (+0.1%). This is a bigger drop than expected by many analysts. Even though the majority of retailers experienced sales increases in November, lower demand for motor vehicles pulled down total retail sales. Excluding sales by motor and recreational vehicle dealers, retail sales advanced 0.6% in November. Cumulative retail sales for the first 11 months of 2003 were 3.3% above those in the same period of 2002.Wholesale trade in November dipped 0.1%, says Statistics Canada. While seven of the 11 wholesale groups tracked showed increases, including household goods, lumber and building materials were among the categories that dragged the overall rate down in November. Wholesale inventories fell 0.3% in November, after a sharp rise in the previous month.
MEET EUROPE’S KEY BUYERS
Hardlines will host a special Networking Lunch for North American vendors to meet Europe’s top buyers. It will be held at the International Hardware Fair/Practical World fair in Cologne, Germany on Monday, March 15. For more details, call Bev Allen at 416-489-3396 or bev@hardlines.ca.

****HARDLINES MARKETPLACE****
Don’t miss the products and services on the Hardlines web Marketplace:
https://hardlines.ca/html/marketplace.html
And check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp

HELP WANTED

HOME DEPOT ACCOUNT MANAGERS – ARE YOU A TOP GUN?

Are you an up and comer with major account management experience? If so, these premiere opportunities will excite you. Our Client, a “rising star” Toronto-based manufacturer is on their way to becoming a category dominant. They’re in need of two high performers to take full advantage of North American opportunities they’ve already achieved.
Manage and direct the sales process for Home Depot including buying offices targeting Consumer, Pro and Installed sales areas. On the Retailer’s behalf, you’ll provide leadership into all category management issues including competitive positioning, sales data and forecasting, and cross-selling opportunities. You’ll work with a cohesive, dynamic Marketing team on merchandising, packaging and PK/educational requirements.
Looking for a employer who continually demonstrates a commitment to improving Customer satisfaction and their competitive positon? To explore these opportunities in complete confidence, please contact Wolf Gugler, quoting Top Guns. Early responses may lead to interviews during the Canadian Hardware Show Feb. 1-3.
Wolf Gugler & Associates Limited. Telephone: 416-386-1719
Email: resumes@wolfgugler.com Web site: www.wolfgugler.com


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by McLARNEYCOM
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© 2004 by Michael McLarney.
HARDLINES™ the electronic newsletter hardlines.ca
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Jan26_04

 


John Caulfield, Contributing Editor
 vol. x, #4 January 26, 2004

IN THIS ISSUE:
* Wickes files for Chapter 11 protection
* Home Depot puts renewed focus on customer in 2004
* Rona signs first Western dealer
* Sodisco-Howden signs new deal with TIM-BR-Marts
* Buyers want to meet North American vendors in Cologne
* Lanoga to acquire San Lorenzo Lumber
* Hechinger patriarch dies at 84
* Exporters benefit from lower U.S. dollar
* Asian hardware fair teams up with Cologne

* * * * * *
Visit Hardlines at the Canadian Hardware & Building Materials Show,
February 1-3, 2004. Booth #3919. — Michael

* * * * * *

“Do not offer advice which has not been seasoned by your own performance.”
— Henry S. Haskins (American writer)
WICKES FILES FOR BANKRUPTCY PROTECTION
VERNON HILLS, Ill. — For the second time in its checkered history, Wickes Inc. has filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The 52-year-old retailer listed $168 million in liabilities against assets of $155 million in papers it filed with the bankruptcy court.Wickes has been struggling with its debt load for several years. It terminated an attempt to restructure some of its long-term debt through a $20 million subordinated note swap on January 12 when only 50.8% of note holders agreed to tender their notes. Four days later, the retailer’s bank lenders declined to extend a waiver for a line of credit after Wickes defaulted on a payment following its default on other notes.

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.

BACKGROUNDER: RISE AND FALL OF WICKES
SPECIAL REPORT — The recent announcement of Wickes‘ tumble into bankruptcy protection is just the latest chapter in the home improvement company’s turbulent saga. The company has fended off creditors, on and off, since 1982, when as a much larger and more diverse corporation called Wickes Cos. (which included the now-defunct Builders Emporium chain and Sequoia Supply, the precursor to the distributor PrimeSource), it filed what at the time was the largest non-utility bankruptcy in U.S. history.Wickes sold or closed most of its other businesses, and sold its 223-yard Wickes Lumber to that entity’s management in 1988. Since then, Wickes Lumber has been reducing its size, and in 2001 initiated a debt reduction and corporate restructuring plan that, one year later, seemed to be working: the company shaved its long-term debt to $95.5 million in December 2002 from $202.4 million in December 2001.

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.

FORMER TIM-BR-MARTS DEALER BECOMES RONA’S
FIRST WESTERN DEALER
NEWTON, Man. — Newton Enterprises, a two-store chain with a mix of DIY and pro customers about 45 minutes outside of Winnipeg, has become the first independent dealer in Western Canada to sign on with Rona Inc. Actually, Newton’s president Brad Dick, had to make a switch soon, anyway. He was one of the 50-plus customers of Sodisco-Howden Group flying the Do-it center banner in Canada. But that banner is being retired by Sodisco-Howden, a move necessitated by its acquisition of Ace Hardware Canada last year.

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.”

HOME DEPOT STRIVES FOR IMPROVED PRODUCTIVITY
ATLANTA — Home Depot this year is focusing on getting its customers to spend more in its stores, and giving them a reason to shop more frequently by promoting stronger product assortments and better presentations.

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.

SODISCO-HOWDEN SIGNS NEW AGREEMENT WITH TIM-BR-MARTS
SASKATOON, Sask. — A deal was signed here last Thursday on the eve of the WRLA‘s Prairie Showcase buying show, solidifying an existing relationship between Vancouver-based LBM buying group Tim-BR-Marts Ltd. and a key hardware supplier, Sodisco-Howden Group. It also follows hot on the heels of the announcement of Rona’s signing of its first dealer west of Ontario — and a former Sodisco-Howden dealer who operated under the Do-it center banner.

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.

WEAK DOLLAR HELPS U.S. EXPORTERS ABROAD
COLUMBUS, Ind. — The devaluation of the U.S. dollar in respect to foreign currencies has proven to be good news for exporters, boosting sales significantly for many.

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.

GROWTH OF CHINA HARDWARE SHOW REFLECTS
GERMAN PARTNERSHIP
SHANGHAI — The China International Hardware Show/Practical World Asia is already one of the most important hardware shows in the world. Now, a partnership with the International Hardware Fair/Practical World is expected to ensure its status even further on the global stage.

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.

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 43.32 27.85 42.43
Canfor 12.30 7.60 12.24
Costco 39.02 27.00 37.35
Goodfellow 15.65 9.75 15.45
Home Depot 37.89 20.10 35.92
Hudson’s Bay 12.97 7.75 12.26
Lowe’s Cos. 60.42 33.37 55.28
Rona Inc. 31.80 11.75 31.05
Sears Canada 21.50 13.60 17.55
Sodisco-Howden 3.35 1.30 2.90
Taiga Forest 8.10 6.30 7.36
Wal-Mart 60.20 46.25 54.21
West Fraser 39.99 29.25 37.25
COMPANIES IN THE NEWS
SANTA CRUZ, Calif. — The Lumbermen’s division of Lanoga Corp. has agreed to acquire San Lorenzo Lumber, a 68-year-old pro dealer based here with five yards and one lumber and door facility. San Lorenzo generated more than $100 million in sales in 2003. The California dealer, with 330 employees, will become part of the 50-yard Lumbermen’s, which is based in Olympia, Wash., on March 1. The amount Lanoga is paying for San Lorenzo Lumber was undisclosed. However, by making this deal, Lanoga adds another beachhead in California to its Dixieline Lumber operation in the southern part of the state.WASHINGTON, DC — The World Trade Organization has upheld anti-dumping tariffs imposed by the U.S. government on softwood lumber imports from Canada. But Canucks are disputing whether in fact this one decision is pivotal. In addition, the U.S.’s punitive tariffs have been recalculated by Washington to 21% from 27%.

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.

PEOPLE ON THE MOVE
Ed McLaren has joined Dundas-Jafine as director of sales and marketing. His background includes stints with Roxul and Jacuzzi. He replaces Ed Kotnjek, who left the company a number of months ago to join GE.Burnaby, B.C.-based Holland Imports Inc. has appointed Cameron Millar as eastern sales manager. A 31-year veteran of the industry, he spent the last eight years as national sales manager for Elmer’s Products Canada Inc. Previous past experience includes 23 years with Erie Iron and LePage.
U.S. MARKET INDICATORS:
The economy in the United States continues to bounce back. And while it has yet to create new jobs in large numbers — Kodak just announced that it would lay off 15,000 employees over the next three years, and Roseburg Forest Products, which laid off 670 workers in 2003, recently announced it would lay off another 32 — fewer people are filing unemployment claims. Perhaps the biggest surprise, though, has been the resilience of America’s home building industry, which has positive ramifications for suppliers, distributors and dealers of building materials and other home improvement products.The U.S. Labor Department reported on Friday that, for the week ended January 17, new applications for unemployment insurance fell by 1,000 to 341,000, the lowest level since December 2003. The four-week average of 344,500 claims per week, was the lowest since Jan 27, 2001.

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.

CANADIAN MARKET INDICATORS:
The composite leading index grew 0.8% in December, comparable with its revised increases of 0.9% in November and 0.8% in October. According to Statistics Canada, domestic demand remained strong, leading to further improvements in demand for labour.A total of $8.2 billion worth of goods were sold by Canada’s large retailers in November, an increase of 2.6% from November 2002, says Statistics Canada. Every major commodity group posted increases, albeit small ones, compared with November 2002. Sales of sporting and leisure goods and furniture, home furnishings and electronics were mixed.

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.

MEET EUROPE’S KEY BUYERS
Hardlines will host a special Networking Lunch for North American vendors to meet Europe’s top buyers. It will be held at the International Hardware Fair/Practical World fair in Cologne, Germany on Monday, March 15. For more details, call Bev Allen at 416-489-3396 or bev@hardlines.ca.
JOHN HECHINGER, SR., WHO HEADED LEADING CHAIN,
DEAD AT 84
WASHINGTON, D.C. — John Hechinger Sr., the patrician, politically-active retailing executive who ran the home improvement chain his family controlled for more than four decades, died on January 18, his 84th birthday.The Washington Post reported that more than 1,000 people turned out for a memorial service for Hechinger, included Washington D.C.’s Mayor Anthony A. Williams, its delegate to Congress Eleanor Holmes Norton, several current and former members of the D.C. Council, Washington Wizards and Capitals owner Abe Pollin and Washington Post Co. chairman Donald E. Graham. The attorney Vernon Jordan, a close friend of former President Bill Clinton, was one of several people who eulogized Hechinger.

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.

****HARDLINES MARKETPLACE****
Don’t miss the products and services on the Hardlines web Marketplace:
https://hardlines.ca/html/marketplace.html
And check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp

HELP WANTED

HOME DEPOT ACCOUNT MANAGERS – ARE YOU A TOP GUN?

Are you an up and comer with major account management experience? If so, these premiere opportunities will excite you. Our Client, a “rising star” Toronto-based manufacturer is on their way to becoming a category dominant. They’re in need of two high performers to take full advantage of North American opportunities they’ve already achieved.
Manage and direct the sales process for Home Depot including buying offices targeting Consumer, Pro and Installed sales areas. On the Retailer’s behalf, you’ll provide leadership into all category management issues including competitive positioning, sales data and forecasting, and cross-selling opportunities. You’ll work with a cohesive, dynamic Marketing team on merchandising, packaging and PK/educational requirements.
Looking for a employer who continually demonstrates a commitment to improving Customer satisfaction and their competitive positon? To explore these opportunities in complete confidence, please contact Wolf Gugler, quoting Top Guns. Early responses may lead to interviews during the Canadian Hardware Show Feb. 1-3.
Wolf Gugler & Associates Limited. Telephone: 416-386-1719
Email: resumes@wolfgugler.com Web site: www.wolfgugler.com


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BUSINESS UNIT MANAGER — NATIONAL

BakorBakor is the leading innovator and manufacturer in North America of a broad range of building construction and maintenance products for industrial, commercial, institutional and residential use.

Bakor has an immediate opening for an energetic Business Unit Manager to be responsible for all aspects of our sales to building supply dealers. You will be responsible for bottom line objectives, vender negotiations and the managing of the residential products sales force.

The ideal candidate will have a solid knowledge of the marketplace and the players in the market, a building products background and demonstrated sales experience within the industry. Strong customer presentation skills and computer literacy are essential and you must be able to interact within a team environment.

Bakor offers an attractive compensation and benefits package and the opportunity for career development. To apply, please forward your resume in confidence to: Vice President, Bakor, 375 Pendant Drive, Unit 2, Mississauga, ON L5T 2W9. Fax: 905-890-4866

**********************************************************************************

NATIONAL ACCOUNTS MANAGER

As a major North American manufacturer of tools and equipment, Porter-Cable/Delta is committed to quality in the products and services it provides.

Contribute your talents as: NATIONAL ACCOUNTS MANAGER

A hands-on and innovative professional who interacts at all levels, you’ll prepare product proposals, price quotations, and promotional offerings for assigned accounts. You will plan, budget, and organize promotional advertising, shows, training, and demonstrations, and forecast sales volumes.

Customer focused and a superb communicator, you have 5 years’ related experience, a Business/Economics degree, and a valid driver’s license. Ideally, you have a supervisory background, product and technical expertise, and knowledge of AS/400 applications and PC’s. Bilingualism (French & English) and a willingness to travel 4-7 days per month are required.

We thank all applicants in advance and advise that only those invited for an interview will be contacted. Please send your resume to: Human Resources, Porter-Cable / Delta, P.O. Box 848, Guelph, Ontario N1H 6M7
Fax (519) 836-9303; www.pentair.com

**********************************************************************************
PRODUCTS OFFERED

 

 

ERAPRO
ERAPRO Winter Tools     877-372-9273     sales@erapro.ca

**********************************************************************************

 

Sprayers and Strainers from ET IndustriesAmazing Acrobatic Sprayers…
• Patented double-swivel action rinses more sink area than any other sprayer!
• Switches easily from soft, aerated flow to powerful jet spray.
• Fits all standard faucets. Easy, no-tools installation (adapter included).
• In five vibrant colours!

And matching SinkTastic …
• Funky thermoplastic in six hot colours.
• Replaces dreary metal basket strainers.
• Just drop it in! Fits all sink drains and waste disposals.
• Antibacterial agent and fresh scent!

As featured in Canadian Living Magazine. Visit www.etindustries.com

Our Counter Displays turn fast at checkout.
Great margins! Great little profit centres!

**********************************************************************************  
SERVICES OFFERED

RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America’s leading manufacturers, managing their lines for Canada’s top hardware retailers, big boxes and mass merchandisers.

Contact Al Vanderveen at 519-439-6800, ext. 201, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com

**********************************************************************************

SELL YOUR COMPANY – OR BUY ONE – WITH HARDLINES CLASSIFIEDS!
DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE.

ONLY $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS.
TO PLACE YOUR AD, CALL
PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: buzz@hardlines.ca

Hardlines is published weekly (except monthly in December and August)
by McLARNEYCOM
542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7
© 2004 by Michael McLarney.
HARDLINES™ the electronic newsletter hardlines.ca
Phone: 416.489.3396; Fax: 416.489.6154
Michael McLarney, Editor & Publisher: mike@hardlines.ca
Beverly Allen, Director of Sales & Marketing: bev@hardlines.ca
Nancy Wright, Circulation Manager: nancy@hardlines.ca
Phyllis Nowell, Sales Manager: buzz@hardlines.ca
______________________________________________
THE HARDLINES “FAIR PLAY” POLICY:
Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week – but let us handle your internal routing from this end!
______________________________________________
Subscription: $229 (Canadian subscribers add $16.03 GST = $245.03 per year/ GST #13987 0398 RT). Secondary subscriptions at the same office are only $36 (Canadian subscribers add $2.52 GST = $38.52). Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to Hardlines/McLarneyCom.

Jan19_04

 


John Caulfield, Contributing Editor
 vol. x, #3 January 19, 2004

IN THIS ISSUE:
* Totem plans second contractor yard
* Home Depot goes big — and small
* National Hardware Show faces lawsuit
* TSC beefs up management, poised for further growth
* Lowe’s looks for mid-sized markets
* Bering straight on cross-over, specialty sales

* * * * * *
MARK YOUR CALENDAR FOR THESE INCREDIBLE EVENTS IN 2004:
• 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;
Industry Update and Networking Event, Toronto, June
The Hardlines Conference Series, September 8-9, including the Hardlines Gala Dinner on the evening of September 8.

“Success is a journey, not a destination.”
— Vince Lombardi
2004 WILL BE ‘YEAR OF THE BACK END’ FOR HOME DEPOT
ATLANTA — Home Depot executives used the broadcast of a conference it held for analysts and investors on last Friday to trumpet improvements to its front-end operations in 2003, and to reveal how investments this year in information technology are expected to streamline the receiving and tracking of inventory into its stores.During the conference, company officials touched on a wide range of topics — including store modernization (for which it will spend $810 million of their capital expenditure budget of $3.7 billion in 2004), merchandise resets and global sourcing, international expansion, installed sales and selling to builders — all of which funnel into three fundamental strategic tenets: to enhance its core business with the goal of increasing transactions and average sales; to extend its business with new formats, categories and services; and to expand into new businesses where Depot currently has minuscule market penetration.

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.

AHMA SUIT WITHOUT MERIT, SAYS HARDWARE SHOW
Amidst the evolution of the National Hardware Show into a new home in 2004, NHS is faced with stiff competition from the American Hardware Manufacturers Association, which is launching a show of its own in Chicago — and now a lawsuit against rival Reed Exhibitions, which owns NHS. The AHMA Hardware Show will be held in Chicago’s McCormick Place, traditionally the home of NHS before Reed made the decision to move the show, based in part on rising costs and falling attendance.The AHMA suit, which seeks some $10 million in damages, claims Reed has inflated its exhibitor numbers and damaged AHMA’s position. According to Robert Cappiello, vice-president of the National Hardware Show, AHMA’s lawsuit is “absolutely without merit — front to back.”

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.

RONA EYES WEST, DUTTON TALKS ACQUISITION
BOUCHERVILLE, QC — Watch for another major play by Rona Inc. in the second half of 2004. That’s the message from Robert Dutton, Rona’s president and CEO.

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.

TSC ADDS FORMER HOWDEN EXEC, POISES FOR FURTHER GROWTH
LONDON, ON — Bill Wilson, formerly vice-president and general manager of Sodisco-Howden Group‘s Howden Division, has joined TSC Stores as merchandise director. He’s just the latest in a list of former Howden people who have beefed up the ranks of TSC over the past two years. And it’s all part of a strategy, says TSC president Roy Carter, to strengthen an already well-run company to reach new levels of growth.

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 PLANS SECOND CONTRACTOR YARD
CALGARY — Just one week after opening its 14th building centre, Totem Building Supplies has revealed to Hardlines that the Alberta-based home improvement retailer has begun to develop a new contractor sales office. The site, which is in the process of being secured, will be the second office in the chain devoted strictly to pro customers. The first one is attached to Totem’s head offices, also in Calgary.

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.

FORMER CHAIRMAN OF DIVERSE BERING HOME CENTER
DEAD AT 90
HOUSTON — August Charles Bering III, who over the second half of the 20th century transformed his father’s lumberyard here into one of the industry’s unique hybrids, died of kidney failure at the age of 90 on January 7. His legacy is the three-unit Bering Home Center chain, a retail company that is constantly reinventing itself to compete in this sprawling, amorphous market, where there are now 24 Home Depots and 19 Lowe’s within a 30-mile radius of Houston’s downtown location.Bering ran the company from 1943 until he semi-retired in 1993. During that period, he took over what, at the time, was a single conventional lumberyard and added a hardware store in 1957, gifts in the ’60s, housewares in the ’70s and coffee and gourmet products in the 1980s.

“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.

BIG OR SMALL, HOME DEPOT BUILDS THEM ALL
ATLANTA — Still playing with its retail formats, Home Depot is opening both big and small stores. A Home Depot outlet in the Atlanta area has been renovated, and offices that once were home to its now-merged Eastern division have been turned into selling space. The reno has added 40,000 sq.ft. of retail, bringing the store’s size to 176,000 sq.ft. in total, compared with the typical Home Depot store, which weighs in at around 115,000 sq.ft. plus another 20,000 sq.ft. for its garden center. The result is Home Depot’s second-largest store (the biggest one is in Seattle).

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.

LOWE’S LOOKS HIGH AND LOW FOR NEW STORE SITES
MOORESVILLE, NC — Lowe’s Home Improvement Warehouse plans to open 150 stores in 2004, with a focus on metro markets like New York and Atlanta. But it appears that the industry’s second-largest dealer, in its ongoing quest to establish itself as a national retailer, is not forsaking midsize markets, or those that fill in its presence in larger ones, at least on the basis of its expansion plans.Lowe’s is building a 134,000-sq.ft. store on 13 acres in Glen Carbon, IL that will open later this winter. Although the community is within the metropolitan boundaries of St. Louis, it has a population of only 10,500. The store has encountered some local opposition because of its proximity to a Home Depot, a Sears Hardware and a Goshen Do-It Best. The town of Hadley, MA, in the west central part of the state 22 miles north of Springfield, was scheduled to vote on Saturday, January 17, on whether to rezone an 18-acre plot along busy Route 9, which is currently being used as part of a bison farm, and allow Lowe’s to build.

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.

INDUSTRY STOCK WATCH

COMPANY
52-WEEK HIGH
52-WEEK LOW
CLOSE FRIDAY
Canadian Tire 42.60 27.85 41.99
Canfor 11.68 7.60 11.45
Costco 39.02 27.00 37.07
Goodfellow 15.00 9.75 14.75
Home Depot 37.89 20.10 34.94
Hudson’s Bay 12.97 7.75 12.15
Lowe’s Cos. 60.42 33.37 52.89
Rona Inc. 31.80 11.75 29.50
Sears Canada 21.50 13.60 16.92
Sodisco-Howden 3.35 1.30 2.93
Taiga Forest 8.10 6.30 7.80
Wal-Mart 60.20 46.25 53.48
West Fraser 39.99 29.25 37.73
COMPANIES IN THE NEWS
ST. JACOBS, ON — On the eve of its 40th anniversary, Home Hardware Stores Ltd. managed to reach a record-breaking $3.8 billion in sales through its nearly 1,000 dealers in 2003. Thanks in part to the acquisition of 105-store Beaver Lumber in 1999, this is double its volume of only six years ago, when retail sales hit $1.9 billion.VERNON HILLS, IL — Time’s up, and Wickes was only able to round up 50.8% of noteholders to exchange their notes, far below the 90% hoped for. That leaves Wickes seriously short of cash in the event of a liquidation.

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.

FORMER GP EXEC NAMED PRESIDENT
OF MILLWORK SUPPLIER
Charleston, SC — George MacConnell, who spent 25 years running Georgia-Pacific‘s distribution division, has been named president and CEO of Terranova Forest Products, a subsidiary, based here, of Terranova S.A., a Chile-based forester.From June 2000 through early 2003, MacConnell, 56, had been CEO and chairman of Denver-based USBuild, which provides products and labor to large production builders. He also did consulting work with FMI Capital and was involved with developers who were trying to start up a whole-house building operation in Denver called Cohen Brothers Homes. Financing for that venture fell through, says MacConnell, which is why he decided to accept Terranova’s offer.

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.

PEOPLE ON THE MOVE
Wayne Westbrook has been appointed director of sales, consumer markets for OSRAM Sylvania. A seven-year veteran of the company, he was formerly national marketing manager for consumer markets. He replaces Eric Roberts, who left at the end of 2003. (905-671-5617)Wickes Inc. has elected James O’Grady, Wickes president and CEO, to the company’s board of directors, following the resignations of Claudia Slacik and Jon Hanson from the board. The company says it had no disputes with the resigning directors. (847-367-3552)
U.S. MARKET INDICATORS:
Retail sales rose in December, says the U.S. Commerce Department, but not as robustly as expected. Overall sales were up 0.5%, and not including auto, they were up only 0.1%, compared with a gain of 1.2% in November. However, year over year, sales were up 6.7% and total sales for 2003 were up 5.6% from 2002.For the third quarter of 2003, large retail corporations with assets of US$50 million and over reported sales increases overall of 3.7% from the previous quarter and up 8.9% from 3Q 2002, the Commerce Department’s Census Bureau reports.
CANADIAN MARKET INDICATORS:
The value of building permits dropped for the third month running in November, says Statistics Canada. Builders took out $4.1 billion worth of permits, down 3.9% from October, and down 5.0% from the month before. However, housing permits edged up 0.4% to $2.8 billion, driven mainly by multi-unit projects. The value of permits for single-family homes declined marginally from September’s record level of $2.0 billion.Investment in Canada’s non-residential building construction remained virtually unchanged in the fourth quarter, down only 0.3%, reports Statistics Canada. However, the dip follows a record level in the previous quarter, and is up 5.7% from 4Q 2002 to $6.6 billion. For the year, non-residential construction produced a total annual investment of $26.0 billion, an increase of 5.7% from 2002.

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.

NOTED…
At the Canadian Hardware Show on February 1 in Toronto, delegates can stick around at the close of the show to join in a “Super Bowl” Party right on the premises. It will be an innovative way for delegates and exhibitors to network, without missing the big game. Cost is only $25. For more information, contact CHS at 905-821-3470.

****HARDLINES MARKETPLACE****
Don’t miss the products and services on the Hardlines web Marketplace:
https://hardlines.ca/html/marketplace.html
And check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp

HELP WANTED

HOME DEPOT ACCOUNT MANAGERS – ARE YOU A TOP GUN?

Are you an up and comer with major account management experience? If so, these premiere opportunities will excite you. Our Client, a “rising star” Toronto-based manufacturer is on their way to becoming a category dominant. They’re in need of two high performers to take full advantage of North American opportunities they’ve already achieved.

Manage and direct the sales process for Home Depot including buying offices targeting Consumer, Pro and Installed sales areas. On the Retailer’s behalf, you’ll provide leadership into all category management issues including competitive positioning, sales data and forecasting, and cross-selling opportunities. You’ll work with a cohesive, dynamic Marketing team on merchandising, packaging and PK/educational requirements.

Looking for a employer who continually demonstrates a commitment to improving Customer satisfaction and their competitive positon? To explore these opportunities in complete confidence, please contact Wolf Gugler, quoting Top Guns. Early responses may lead to interviews during the Canadian Hardware Show Feb. 1-3.
Wolf Gugler & Associates Limited. Telephone: 416-386-1719
Email: resumes@wolfgugler.com Web site: www.wolfgugler.com

**********************************************************************************

BUSINESS UNIT MANAGER — NATIONAL

BakorBakor is the leading innovator and manufacturer in North America of a broad range of building construction and maintenance products for industrial, commercial, institutional and residential use.

Bakor has an immediate opening for an energetic Business Unit Manager to be responsible for all aspects of our sales to building supply dealers. You will be responsible for bottom line objectives, vender negotiations and the managing of the residential products sales force.

The ideal candidate will have a solid knowledge of the marketplace and the players in the market, a building products background and demonstrated sales experience within the industry. Strong customer presentation skills and computer literacy are essential and you must be able to interact within a team environment.

Bakor offers an attractive compensation and benefits package and the opportunity for career development. To apply, please forward your resume in confidence to: Vice President, Bakor, 375 Pendant Drive, Unit 2, Mississauga, ON L5T 2W9. Fax: 905-890-4866

**********************************************************************************

NATIONAL ACCOUNTS MANAGER

As a major North American manufacturer of tools and equipment, Porter-Cable/Delta is committed to quality in the products and services it provides.

Contribute your talents as: NATIONAL ACCOUNTS MANAGER

A hands-on and innovative professional who interacts at all levels, you’ll prepare product proposals, price quotations, and promotional offerings for assigned accounts. You will plan, budget, and organize promotional advertising, shows, training, and demonstrations, and forecast sales volumes.

Customer focused and a superb communicator, you have 5 years’ related experience, a Business/Economics degree, and a valid driver’s license. Ideally, you have a supervisory background, product and technical expertise, and knowledge of AS/400 applications and PC’s. Bilingualism (French & English) and a willingness to travel 4-7 days per month are required.

We thank all applicants in advance and advise that only those invited for an interview will be contacted. Please send your resume to: Human Resources, Porter-Cable / Delta, P.O. Box 848, Guelph, Ontario N1H 6M7
Fax (519) 836-9303; www.pentair.com

**********************************************************************************
PRODUCTS OFFERED

 

 

ERAPRO
ERAPRO Winter Tools     877-372-9273     sales@erapro.ca

**********************************************************************************

 

Sprayers and Strainers from ET IndustriesAmazing Acrobatic Sprayers…
• Patented double-swivel action rinses more sink area than any other sprayer!
• Switches easily from soft, aerated flow to powerful jet spray.
• Fits all standard faucets. Easy, no-tools installation (adapter included).
• In five vibrant colours!

And matching SinkTastic …
• Funky thermoplastic in six hot colours.
• Replaces dreary metal basket strainers.
• Just drop it in! Fits all sink drains and waste disposals.
• Antibacterial agent and fresh scent!

As featured in Canadian Living Magazine. Visit www.etindustries.com

Our Counter Displays turn fast at checkout.
Great margins! Great little profit centres!

**********************************************************************************  
SERVICES OFFERED

RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America’s leading manufacturers, managing their lines for Canada’s top hardware retailers, big boxes and mass merchandisers.

Contact Al Vanderveen at 519-439-6800, ext. 201, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com

**********************************************************************************

SELL YOUR COMPANY – OR BUY ONE – WITH HARDLINES CLASSIFIEDS!
DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE.

ONLY $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS.
TO PLACE YOUR AD, CALL
PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: buzz@hardlines.ca

Hardlines is published weekly (except monthly in December and August)
by McLARNEYCOM
542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7
© 2004 by Michael McLarney.
HARDLINES™ the electronic newsletter hardlines.ca
Phone: 416.489.3396; Fax: 416.489.6154
Michael McLarney, Editor & Publisher: mike@hardlines.ca
Beverly Allen, Director of Sales & Marketing: bev@hardlines.ca
Nancy Wright, Circulation Manager: nancy@hardlines.ca
Phyllis Nowell, Sales Manager: buzz@hardlines.ca
______________________________________________
THE HARDLINES “FAIR PLAY” POLICY:
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