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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Click here for more information on the Worldwide DIY Council.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Meanwhile, the giant European market beckons.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Woodworkers Warehouse employed just under 600 workers.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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