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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Yves Gagnon, president and CEO of BMR, will also serve as president of Quincaillerie Matreco Hardware. The Quebec-based member has in fact been developing its own hardware distribution since 1997, and at the beginning of this year opened an expanded hardware distribution facility in Longueuil, QC. With the formation of Quincaillerie Matreco Hardware, BMR can now ship to dealers beyond its own membership of 125 stores in Quebec, northern New Brunswick and eastern Ontario, giving the Longueuil facility an important boost to its volume levels.

The consolidated distribution entity has the potential to be a potent force. Matreco’s members, including TIM-BR-Marts Ltd. in western Canada, represent combined retail sales of about $2.5 billion. BMR’s hardlines wholesale purchases are expected to reach about $85 million this year, and with the addition of the TIM-BR Mart Ontario and AWARD business, that figure should at least double.

“Our plan is to be at $300 million in wholesale sales in three years,” says Gagnon. He adds that he is in talks with Tim Urquhart, the new head of TIM-BR-Marts in the west, though nothing firm has been established yet.

Gagnon established hardware distribution for his own members to provide greater control of the buying group’s purchasing. Within the past year, Tom Smith, president of AWARD liked what he saw at BMR, began establishing the feasibility of a warehouse for his own members. The result is the formation of AWARD Distribution Ltd., a satellite distribution centre located near Halifax in Bedford, NS that will carry about 5,500 fastest moving SKUs initially.

The 42,000-sq.ft. former Sobey’s distribution centre cost AWARD $1.9 million and will reopen by December 2003. It was financed by an investment of $35,000 from each of more than 50 of AWARD’s 60 dealer-members.

“Quincaillerie Matreco Hardware is all about competing with a consolidating industry,” says Smith at AWARD. “We believe this initiative goes a long way to offering not only pricing, but products and innovations that will help our dealers compete.”

“We’re excited by the buying power that’s emerging under the new alliance,” says Don Nash, president of TIM-BR Mart Ontario. “BMR has outlined an important road map for our own distribution needs.” But Nash is in no hurry to establish distribution for his own group in Ontario, preferring to wait until his members’ hardlines purchases double over the next five years from their present level of about $50 million before proceeding. “When warranted, an Ontario distribution centre will be opened,” he concludes.

Smith told Hardlines that AWARD’s largest dealer, Chester Dawe, had confirmed its commitment to AWARD’s new Halifax-area warehouse with a $35,000 investment in AWARD Distribution Ltd., which was formed as part of the newly created Quincaillerie Matreco Hardware (see preceding story).

Chester Dawe is AWARD’s largest dealer. With retail sales approaching $70 million, it accounts for more than one-fifth of the group’s dealer sales through its eight stores in Newfoundland. Its support was considered by many to be pivotal to the viability of ADL.

“The decision by Chester Dawe to join forces with AWARD Distribution Ltd. is a huge vote of confidence for our business model,” says Smith. “Chester Dawe was a founding member of AWARD and their experience and expertise have always been an asset to our business.”

Smith went on to acknowledge the decision by Chester Dawe president Phil Budden and his team to support ADL. “With their help and guidance, we expect AWARD will become a dominant retail force in Atlantic Canada.”

Yet it’s a topic that is only beginning to get the awareness it deserves. It’s the synchronization of product data codes to a single global standard. Called data sync for short, the initiative is being driven in Canada by the Electronic Commerce Council of Canada, or ECCC, under its data sync arm, ECCnet. At the meeting, held last week, ECCnet’s mandate got a big push when Home Depot Canada announced it wants all its vendors to comply by 1Q 2004, to coincide with the timetable of Home Depot – and Wal-Mart – in the U.S.

Mark Healy from Home Depot in the U.S. explained the status of the retailer’s efforts below the border, where it’s working with UCCnet to get vendors onside by the end of 2003.

Healy urges other retailers to adopt the mandate. “We’re all in this together,” he said. “We’re not competitors in terms of data. Let’s streamline it, make it easy as possible for our suppliers.”

Canadian Tire and Home Hardware voiced their commitment to the data synchronization process, but added they will do it at their own speed.

Mark Dufresne, executive vice-president of purchasing and logistics for Rona, commented by telephone that as much as 20-25% of the information with each shipment can be wrong. If the purchase orders are correct, then payment gets processed faster and everyone wins, he noted.

Wal-Mart is taking on Costco Wholesale Canada. With 60 stores, in every province except Prince Edward Island, Costco has, until now, had the Canadian warehouse club market to itself. With a similar format to Costco’s, Sam’s Club offers a limited, ever-changing assortment of about 4,000 items, including appliances, home and office electronics, office supplies, apparel, optical, home furnishings, books, batteries, and auto supplies. Sam’s Club also features fresh case-ready meats, produce, frozen foods, and fresh bakery items.

The warehouse approach is reflected in each store’s appearance: a 120,000 sq.ft. box with cement floors and high ceilings, and merchandise often stacked on shipping pallets and steel racks from floor to ceiling.

The Sam’s Club outlets represent a combined investment of approximately $80 million by Wal-Mart Canada. More openings will be announced over the coming months.

CHS also plans to provide free parking from one of the parking lots that serves the show at Exhibition Place. In addition, the show’s owner and organizer, the Canadian Retail Hardware Association, will offer e-learning sessions at the CRHA’s booth at the show. Retailers and vendors alike will be able to sample modules on loss prevention, product knowledge and store compliance training.

As large “brand” manufacturers have drifted away from the show, CHS has been relying more and more on new and smaller companies to fill the exhibitors’ ranks, a move that worked well for the show last year. In fact, space for new vendors is already sold out, and show organizers are now opening up the floor plan to facilitate additional new vendors. Called “New Vendor Avenue,” the area was introduced at CHS in February 2003 and the space next year will include companies from Canada, the U.S., China and India.

CHS takes place February 1-3, 2004 at the National Trade Centre in downtown Toronto.

WINNIPEG — At its latest dealer market, TruServ Canada Cooperative Inc. unveiled a beefed-up paint and décor program for its dealers, complete with a computerized color match system. The new “Color Made Simple” paint and décor area also features a two-foot section with more than 40 large “idea cards,” decorating samples that showcase a colour scheme for an entire room, rather than a single colour.

The idea cards were inspired by a customer, says Ray Falkenberg, TruServ’s vice-president, business development and marketing. A True Value customer in Western Canada actually painted his entire house following the colour scheme of a home featured on one of the retailer’s flyers, tipping them off that consumers are hungry for coordinated décor inspiration.

But the idea cards are just one part of an enhanced paint and décor department that was unveiled at TruServ’s recent market. The newly branded Color Made Simple paint and décor program features an updated color centre in both eight- and four-foot sizes. The eight-foot program features more than 900 colours and has been moved to the front of the department, to make it more visible to the customer. New stores and renovated stores will present the department at the front right-hand side of the store for maximum exposure and impact.

Other enhancements include new “trend brochure” with oversized peel-and-stick colour chips, an expanded how-to section with brochures, magazines and books, and the addition of a monthly newsletter dedicated to paint and decorating called “The Painters Palette.”

The sale is expected to close early in 2004, and within a year it will be turned into a combination food and non-food market anchored by a Loblaws grocery store. The Gardens has been closed since the Toronto Maple Leafs relocated to the Air Canada Centre in February 1999. Other reported suitors for the large, downtown facility included Home Depot Canada.

(This editor’s grandfather was the original accountant for the Gardens, and ended up as box office manager, reporting directly to Mr. Conn Smythe. Our season’s tickets to the Leafs games were second row blues, right behind the home net. Mrs. Keon and Mrs. Shack had their seats right in front of us. To my two younger brothers and I, they were the most beautiful women we’d ever seen, and thrilled when they showed up in their bouffants and mink coats. After my grandfather died, Coca-Cola, which supplied pop to the Gardens, sent a wooden case of Coke to my grandmother every week for the rest of her life.— MM)

Ace displayed a sampling of the 1,100-SKU program and its packaging at its fall buying show last week. Paula Erickson, a spokesperson for the co-op, told Hardlines that dealers would be able to purchase the program out of Ace’s warehouses at prices more than 25% below what they’ve been paying for comparable builders’ hardware from National Manufacturing, the Illinois-based supplier that has long been the co-op’s primary stocking vendor for this category.

The Ace line promises considerably higher margins, too. To make the transition easier for dealers, Ace would continue to stock National’s line. But Erickson said that based on demand, Ace’s line could eventually replace National’s in the Ace’s distribution centres.

MARKHAM, ON — Canadian Tire Corp. officially launched its new 20/20 store format in four stores across the country last week. The newest spin on Canadian Tire’s ongoing enhancements to its stores, this one shrinks the backroom, putting more merchandise on the shelves, with more room for housewares and kitchen gadgets, and other categories that appeal to women shoppers. It also expands the footwear and apparel sections (the Markham store even has a change room), with a brighter retail environment and more room to move around. (We’ll have more for you on the new concept, including more pics, in next week’s issue. — MM)

ENGLEWOOD, CO — PRO Group and Distribution America will jointly present an Executive Planning Conference November 13-15. The event, which will be held in Naples, FL, will offer a forum to some 450 delegates for 2004 strategic planning and goal setting.

Eighty Four, PA — 84 Lumber cracked the US$2 billion mark a month and a half earlier than it did last year, when it cracked the sales threshold for the first time. With growth that has been fuelled by aggressive store openings, including three last month in Louisiana, 84 Lumber finished last year with sales of US$2.2 billion and expects to end this year with sales of about US$2.5 billion.

LONGUEUIL, QC — For the third quarter of 2003, Sico Inc. recorded sales of $80.1 million, up 18.3% over the same quarter in 2002. Growth came largely from a 23.2% increase in the architectural sector’s sales, which rose to $70.3 million, mostly as a result of the three-month contribution of newly acquired Para Inc. Net earnings reached $3.2 million for the third quarter, and $12.0 million for the nine-month period, after accounting for pre-tax restructuring expenses of $3.6 million.

ATLANTA — Newell Rubbermaid Inc. had flat third-quarter sales of US$1.9 billion, which were flat compared with 3Q 2002. Net income in the quarter was US$75.2 million, a dip from US$76.2 million a year earlier. Excluding charges, net income in the third quarter was US$109.4 million, versus US$122.9 million in 2002.

MONTREAL — Norcross Safety Products has acquired Kachele-Cama Latex GmbH, a German manufacturer of hand protection products with production in Hungary and the Czech Republic. KCL will continue to market as a stand-alone company, but will be integrated into the North Safety Products family and will report to Claude Roberge, president of North Safety Products Canada, a manufacturer of occupational health and safety products.

CLEVELAND, OH — Sherwin Williams, North America’s largest paint manufacturer and retailer, reported that sales from its 2,671 paint stores increased 5.4%, to US$989 million, in the three months ended September 30. Same-store sales grew by 4.5% over the same period a year ago, but the stores’ operating income inched up only 0.73% to just under US$141 million.

TORONTO — From its head office here, Sears Canada Inc. announced last week a number of store re-openings following expansion. These included two full-line stores in Sorel, QC, one in Victoriaville, QC and another in St-Georges de Beauce, QC.

VANCOUVER — For its third quarter, Canfor Corp. had net income of $80.1 million, an improvement over its loss of $11.8 million in the same quarter of 2002. The company recorded pre-tax operating income of $41.9 million in the quarter, $89.4 million more than the second quarter and $44.1 million more than the same quarter in 2002. Net income for the nine-month period was $119.2 million, compared with $69.5 million a year earlier. The 3Q results included a $60.7 million after-tax gain on the sale of BC Chemicals.

BUFFALO, NY — CertainTeed broke ground last week on a new 250,000-sq.ft. plant in South Buffalo that will mark a US$13.5 million investment in the area.

DARTMOUTH, NS — Sandy Welsh, formerly vice-president of Cameron Ashley Canada‘s Atlantic division, has been recruited by the AWARD buying group, which serves 95 building centre outlets in Atlantic Canada. Welsh will provide his expertise in building products distribution for the buying group, as it ramps up for a strategic partnership formed last week with Le Groupe BMR in Quebec. (902-835-7242)

Do it Best Corp. elected a new board of directors at its annual shareholders’ meeting recently. Bruce Ellis of Roswell Lumber Do it center in Roswell, NM has been elected as chairman … Stan Hardman of Hardman’s, a seven-store chain in Spencer, WV has been named vice-chairman … Mitch Newenhouse of Charlie’s Hardware in Mosinee, WI will serve as secretary. (260-748-5300)

The U.S. economy is being described as “red hot,” as its Gross Domestic Product grew by 7.2% in the third quarter. According to the U.S. Commerce Department, consumer spending was up by 6.6%, encouraged by tax cuts, making the increase in consumer spending the biggest since early 1988. This 3Q growth follows the 3.3% increase in the second quarter of 2003. Consumer spending (personal consumption expenditures), along with computers and software, residential fixed investments and exports contributed to the 3Q increase.

New home sales in the U.S. in September reached 1.15 million seasonally adjusted. That’s down 0.2% from the preceding month, but up 8.3% over September 2002.

The National Hardware Show, owned and operated by Reed Exhibitions, will be held May 10-12, 2004. However, it’s up against a competing show, the AHMA Hardware Show, being held in Chicago just weeks earlier, from April 18-20. Both shows have been battling for exhibitors – and credibility.

Frame started last week as part of the dealer development team under Castle’s national business development manager, Ron Marchetti. He will handle Eastern Ontario while Marchetti will now confine his coverage of the province to the West, until his retirement next August.

Frame was lured away from Rona, where he had been working as part of the team that is aggressively recruiting dealers in Ontario.

Marchetti has many years experience dealing with independents. Before joining Castle in 1995, he worked for eight years as marketing manager at the Ontario buying group, Homecare Building Centres. But his career in this industry started in 1956 at Aikenhead’s Hardware in Toronto. In 1971, he moved to Beaver Lumber, and later worked for the buying group Allont, then Merchants Consolidated.

“We just had some big shoes to fill with Ron Marchetti’s retirement a year from now,” says Pro Wylie, president of Castle. “We investigated several people, and decided to act now rather than later next spring.”

Frame joins a team that includes Ron Douglas in Atlantic Canada and Alan Schoemperlen, who handles Western Canada. When Marchetti retires, he will turn the dealer development helm over to Frame, who will then report directly to Wylie. Marchetti expects to continue working for Castle on “special projects” after that time.

Wylie’s own contract with Castle was renewed at the beginning of this year for another four-year term.

Bargain, which operates in French Canada as Matériaux à bas prix, is based in this community near Rivière du Loup, and has 14 stores already, which average between 5,000 and 7,000 sq.ft., plus another 3,000-5,000 sq.ft. of warehouse space. One more store is scheduled to open during the first week of December. This one, in Charlesbourgh, will establish the chain firmly in Quebec City. (Another store already exists in St-Nicholas, near Levis on the south shore from Quebec City.)

The company started as a purveyor of off-price building materials, and until about five years ago, these “imperfect materials” accounted for up to 90% of the retailer’s sales. But since then it has been purchasing more and more first-grade products, and today they account for about 75% of Bargain’s sales. Total retail sales reached $35.4 million in 2002.

“We made a complete switch in the line of products,” says Jacques Dery, general manager of Bargain Building Materials. That switch was supported by its own lines of imported hardware products.

But Bargain has had one franchisee for almost six years in Stittsville, ON and the company is now going after more dealers on a franchise basis. “This program does work well,” says Dery. “What we’re doing is pushing the franchisee program and trying to get new dealers interested.”

Given its broad coverage of Quebec with its own stores, Bargain is aiming the franchisee program at dealers beyond the provincial borders, especially in Ontario, New Brunswick and Nova Scotia, Dery says. and not just for francophone dealers. He sees great potential for the format in English Canada, as well.

Dery still wants to grow in Quebec, however, and a new “authorized dealer” program gives independents there the opportunity to get involved with Bargain on a more limited basis.

Under an authorized dealership, Bargain will offer five product lines: recycled paint, mouldings, flooring, hardware and hand and power tools. The hardware and tools are imported from the Far East under the Tomak name, which is proprietary to Bargain. The program is suited for dealers beyond the traditional building centre format, and can be picked up by paint stores, flooring dealers and other specialty dealers.

“The authorized dealership is brand new for us,” says Dery. “We started offering it in July 2003, and we’re getting more aggressive in marketing the concept since the beginning of September.”

Response has already been good, he notes, with one dealer already signed and another nine that have already approached his company expressing interest.

The annual October Market was TruServ’s biggest ever, with strong support by more than 400 dealer members from across Canada – representing True Value, Country Depot, V&S and FS Coop – and a sold-out participation by vendors. “There was tremendous spirit on the floor,” says Ray Falkenberg, TruServ’s vice-president, business development and marketing. “And vendors have been unanimous in reporting their biggest sales ever.

During the annual member dinner, Pierre Levesque, chairman of the board and interim CEO shared the news of the company’s recent growth. “We are extremely excited by our current year-to-date sales increase of 24%. This can be attributed, not only to our 41 new members year-to-date, but also to the 110 Country Depot and FS Coop members we acquired in January.”

Those new dealers reflected TruServ’s takeover of the retail operations of Growmark in Ontario. But the acquisition also added new expertise to TruServ’s merchandising mix, which was reflected in the launch of Growmark’s pet program and Grower’s Edge gardening program to TruServ dealers. In addition, Growmark’s unique Country Depot retail format was again showcased, as was TruServ’s new “Color Made Simple” paint and décor area.

In addition, TruServ unveiled a new, scaled down POS system for its smaller members. The system is being provided by Calgary-based AMPM, and complements, rather than replaces, existing systems supported by Dimensions and Profitmaster.

The new offerings at the market appealed to both new and potential dealers, says Falkenberg. Twenty-two prospects were at this year’s show, the most ever. Six of them have already joined the co-op since the show, he adds.

According to Bob Taylor, president and CEO of Do it Best, this is the highest rebate in the U.S., and marks a 36% increase in member rebates over the past five years. However, he added in a prepared statement, the co-op needs to keep looking for ways to support its members and ensure continued growth. He identified four key areas of success for his dealers: developing staff loyalty, leveraging their status as locally owned enterprises that are involved in their respective communities, developing long-term business plans in conjunction with head office, and tying in with Do it Best’s own retail system.

“It’s the only system in the industry designed to help independent retailers grow their businesses locally and that also allows members to pick and choose what works best for them.”

At its buying show here this week, Ace made available to its Commercial and Industrial Supply dealer-members, which number around 300, an Internet enabled program that allows them to create their own ad flyers. Using this tool, known as Ace CIO BYO Flyer and provided by Chicago-based TotalWorks Inc., dealers can download an ad page template on their own. Then, using pull-down menus, they can customize the ad according to product assortment, pricing and other factors. The same can be done to create catalogues.

Previously, Ace had been producing bimonthly flyers for its members’ industrial-commercial stores.

A spokesperson for Ace told Hardlines that this program had been introduced originally at the co-op’s spring buying show in Las Vegas, “but it didn’t catch on.”

In its latest quarter, which ended September 30, B&D reported a 5% increase in revenue to US$1.14 billion, and a 35.5% gain in earnings to US$74.4 million. Sales of power tools and accessories increased 1%. Through nine months, B&D’s sales rose 2.3% to US$3.37 billion, and its profits jumped 25.6% to US$193.5 million.

During a conference call to disclose and discuss B&D’s third-quarter financial performance, the toolmaker’s CFO, Mike Mangan, said that he thought Black & Decker would continue to be viewed by Home Depot as “the number one preferred brand.”

His comments came only days after Home Depot unveiled the 30-SKU Ridgid tool line, which supplements the Ridgid-branded stationary and benchtop tools the chain has been carrying for several years. The products are being supplied by Techtronic Industries.

Mangan, somewhat defensively, noted that B&D had been increasing its market position with Lowe’s and that B&D saw the independent dealer market as being as important as Home Depot to his company’s future sales growth.

B&D is hoping to avoid a repeat of what happened last year, when Home Depot dropped the supplier’s Price-Pfister faucet line in favour of its own Glacier Bay private-label line, plus some fill-in from Moen and other brands. B&D stated in its 2002 annual report that the loss of that business would negatively impact its annual plumbing sales by US$60 million. Home Depot also accounts for more than 10% of the manufacturer’s hardware sales.

Hot on the heels of this news came the announcement that more than 300 illegal workers had been arrested last week at 61 Wal-Mart stores around the country. The bust occurred after an investigation that focused on janitorial crews employed by outside contractors.

The raids rounded up immigrants from a number of countries who were finishing their night shifts by the Bureau of Immigration and Customs Enforcement.

HAMILTON, ON — Camco, Canada’s largest appliance maker, will close its operations as of December, 2004. The closing will affect up to 800 workers, and is cited as another casualty of free trade and globalization. The Montreal plant will remain in operation, however, producing clothes dryers.

LONDON, UK — B&Q has given staff a new handheld device that allows them to roam the store, freeing the POS process from the traditional checkout aisles. The UK’s biggest DIY chain is testing its Mobile Electronic Sales Assistant (MESA), which allows roaming store staff, collectively known as the Service Squad, to deal with customer enquiries more efficiently and quickly.

TORONTO — Sears Canada Inc. is planning to open 50 or more stores in popular big-box outlet power centres during the second half of the decade. According to the Globe and Mail, Sears chairman Mark Cohen says that up to half of the new stores will be downsized department stores covering one floor only, while the rest will be new specialty outlets, potentially focusing on clothing or hardware. The retailer has been watching the shift by consumers, especially younger shoppers, away from traditional shopping centres to power centres.

ATLANTA, GA — Home Depot has launched a range of portable power tools under its proprietary Ridgid brand name. The new line was developed with Emerson Professional Tools and OWT, a wholly owned subsidiary of Techtronic Industries Co. Ltd., which also manufactures the tools. Aimed at contractors, woodworkers and serious DIYers, it consists of more than 30 cordless drills, mitre saws, laser guides and a table saw.

BURNABY, BC — Sales at Taiga Forest Products Ltd. for the three months ended September 30 were $306.2 million, up 27% from $241.6 million in the same quarter last year. Earnings for the three months were $4.4 million, down from $6.5 million last year. For the six month period, Taiga’s sales were $564.6 million, with earnings of $5.0 million, compared with sales of $500.0 million with earnings of $8.1 million. Last year’s quarterly results include an adjustment to operating income before income tax of $7.6 million, which increased quarterly net profit after income tax by $5.3 million.

NEW BRITAIN, CN — Stanley Works reported last week that its earnings for the quarter ended September 30 declined 23.8% to US$41.7 million on sales of US$715.7 million that were 7.5% higher than the same period a year ago. Through the first nine months of its fiscal year, Stanley’s sales jumped 7.8% to US$2.08 billion, while its net income plummeted 56.1% to US$73.3 million. The company’s third-quarter results included a US$17 million charge related to Stanley’s ongoing corporate restructuring. However, the company managed to lower its debt by US$77 million in the quarter.

BOISE, ID — Boise Cascade Corp. has reported that sales from its Building Solutions Group increased 23.3% to US$828.1 million during the three months ended September 30. The group’s operating income rose 288% to US$56.4 million. Through nine months, the Building Solutions Group generated US$1.40 billion in revenue, or 50.5% of Boise’s total. However, those sales were off 1% from the same period a year ago. The group’s nine-month operating income was only US$529,000, compared with US$15.2 million in the same period in 2002.

GLENVIEW, IL — Illinois Tool Works Inc. has reported higher quarterly earnings, helped by acquisitions and a weaker U.S. dollar. ITW saw its third-quarter net income rise to US$268.9 million from US$245.5 million a year earlier. Operating revenue rose to US$2.53 billion from US$2.40 billion.

At Taiga Forest Products Ltd., Kooi Ong Tong has been elected chair of its board of directors. Tong represents 3Cs Investments Ltd., a privately owned Cayman Islands corporation that recently acquired approximately 20.05% of Taiga. The company also holds an option to acquire further common shares, which would bring its share of ownership in Taiga to about 25.04%. Tong is a businessman with interests in media, technology and other businesses in Asia and North America.

Inflation crept up again in September as Canadians paid 2.2% more for the goods and services included in the Consumer Price Index basket than they did in September 2002, says Stats Canada. This follows a year-over-year rise of 2.0% in August. But September’s 12-month increase remains well below the recent highs of early 2003, when energy prices, and gasoline prices were providing the bulk of the upward pressure.

Wholesale trade was down by 4.6% to $34.2 billion in August. That’s the biggest drop since the ice storm which ravaged Eastern Canada in January 1998, and marks the sixth decline in seven months. The August slump in wholesale sales was largely attributed to the power blackout that paralyzed Ontario and the Northeastern U.S. The automotive manufacturing sector in both countries was severely affected, further affecting Canadian wholesale.

AWARD Wholesale and Retail Distributors Ltd. provides co-op buying of commodities for its 98 member stores in Atlantic Canada, and funnelled $206 million in purchases through its offices last year. Hardlines have been supplied traditionally by existing wholesalers such as Sodisco-Howden Group. But now AWARD, a member of the umbrella buying group Matreco, might go it alone.

In Quebec, where buying groups have more of a tradition of providing warehousing for commodity products, fellow Matreco member Groupe BMR has been expanding beyond just building materials into hardware distribution over the past 18 months. The growth of BMR’s sales in this side of the business has not gone unnoticed by AWARD and its members.

Now there’s talk of a distribution centre, to handle both cross-docking and direct shipments from vendors, to be up and running in Halifax by early next year, with BMR as preferred supplier. AWARD has reportedly signed up more than 50 of its dealers to invest $35,000 in the new venture. No officials from either AWARD or BMR were available for comment at press time, but more news is expected in the near future.

AWARD, the Dartmouth, NS-based buying group with almost 100 stores and $350 million in retail sales, is reported to be considering the creation of its own hardlines distribution facility in the Halifax area, a move that leaves Jos Wintermans, president and CEO of Sodisco-Howden, both puzzled and disappointed.

“What we’ve been doing is providing a full-line, proven distribution centre in Atlantic Canada that has worked for the dealers there for many years,” he says.

AWARD’s new warehouse would have to be underwritten by the dealers themselves, and Wintermans wonders why they’d take the risk. “They’ll have to put up their own cash to support an unknown distribution choice – and a limited line supplier at that.”

The initial investment by each dealer is reported to be at least $35,000, but according to Wintermans, those dealers could eventually be on the hook for as much as $100,000. “Think about how much in sales any dealer would have to make to cover that outlay.”

Sodisco-Howden’s sales team has been meeting privately with AWARD dealers to make a case for the status quo and Wintermans says response to these meetings has been positive. However, the company’s own future has been put in question by the announcement in recent weeks that it hired an international finance company to chart strategies for its future, strategies that may involve continued acquisitions – or being put up for sale.

Formerly vice-president of purchasing for Cameron Ashley in Calgary, Robb was hired to run the company as its owner and president, Rick Anderson, prepares to cut back his day-to-day involvement. Robb sees lots of potential for growth of Peavey, which has 24 stores under the Peavey Mart banner in Alberta and Saskatchewan, plus one store each in British Columbia and Manitoba. He expects to add a couple of stores, “as the opportunities present themselves,” which, he says, will likely be “sooner than later.”

Robb sees a good fit for the Peavey format in other markets, especially urban and rural locations in western Saskatchewan and Manitoba. “It’s an extremely well-run company with loyal and dedicated employees,” he says. “My job will be to keep it well run – extremely well run.”

TORONTO, ON & SAINT JOHN, NB —With an eye to the cross-merchandising opportunities for its stores and gas stations, Canadian Tire Petroleum has struck a deal with Irving Oil Ltd. whereby Canadian Tire will take over 16 Irving gas stations and change them over to the Canadian Tire name.

The deal, which will more than double Canadian Tire’s gas bar presence in Atlantic Canada, involves Canadian Tire leasing stores in New Brunswick, Nova Scotia and Newfoundland and Labrador, while Irving continues supplying the gasoline. The two companies will split profits through a revenue sharing agreement.

“This agreement with Irving Oil represents a significant milestone in Canadian Tire Petroleum’s expansion strategy, which includes partnering at existing sites of other gasoline retailers under the Canadian Tire banner, and building new incremental sites and car washes in other parts of the country,” said Peter Kilty, vice-president, Canadian Tire Petroleum, in a prepared release.

Founded in 1924, Irving Oil currently supplies more than 800 branded locations in Atlantic Canada, Quebec and New England.

The largest department store chain in the U.S., it recorded an after-tax charge of US$89 million to restructure its home decorating chain, closing three Great Indoors stores and upgrading others in the process.

The threat of watching their own brands become mere commodities was just one of the issues confronting members of the French, German, UK and Belgium DIY manufacturer associations who gathered here recently under their umbrella organization, Fediyma.

Retailers face similar challenges. Can they grow organically or must all of their growth come from acquisitions? Will the high costs of technology and the resulting increases in efficiency further separate the market into the bigs and the littles, into the haves and have-nots?

Smaller retailers are banding together into buying groups and cooperatives, especially in countries such as Spain, which are being “invaded” by large retail chains. Spain, in particular, now has dozens of cooperatives and buying groups to serve its nearly 10,000 smaller independent hardware stores and DIY units.

Jim Lowe, corporate development director of the UK’s Focus Wickes group, said competition is forcing the development of “destination stores and destination category specialists.” He added that retailers will further divide the market into “light” and “heavy” formats, the light ones concentrating on décor, gardening and lighter DIY tasks, while the heavy market will be towards major building and remodeling activities. Focus stores serve the lighter markets; Wickes the heavy markets, he explained.

He expects that retailers who now focus on décor will further broaden their merchandise lines to include furniture and other home furnishings, which will affect traditional distribution channels of those products.

Further explanations of retailing’s segmentation came from speakers focusing on technology trends. While much of the technology is focusing on reducing retail operational costs, some of it will affect manufacturers’ operating methods as well as their own costs, such as RFID.

Electronic kiosks and self-checkout are the two most widely deployed emerging technologies worldwide, speakers pointed out. Kiosks are being used by such firms as Boots, Target, Williams-Sonoma and Crate & Barrel, while firms like Ahold, Tesco, Sainsbury, Metro and the UK’s Safeway have all been trying personal shopping devices.

AdWeek reported that Lowe’s, which spent an estimated US$265 million on advertising in 2002 according to Nielsen Monitor-Plus, a tracking service, requested proposals from ad agencies that, the magazine said, were due October 10. The search is being handled by Lockman Brooks Marketing Services in Charlotte, NC.

Like virtually every other retailer, Lowe’s is looking to tap into the burgeoning ethnic communities that are growing across the U.S. at a rapid pace. Dealers are particularly covetous of Hispanics, who now account for nearly 14% of the U.S. population and are expected to account for 25% by 2050.

In the third quarter, homeowners were remodeling their houses at an annualized rate of US$125.2 billion, 6.6% higher than annualized expenditures in the third quarter of 2002, according to the Joint Center for Housing Studies at Harvard University, in its quarterly “Remodeling Activity Index.” That annualized expenditure represents about 60% of the total amount spent on home improvement annually by Americans.

Kermit Baker, who heads up the Center’s Remodeling Futures Program, explained that favorably low interest rates in the U.S. continue to drive home sales. “With spending levels accelerating, the prospects are improving for remodeling in the coming year.”

TORONTO — Sears Canada‘s third-quarter earnings hit $12.1 million, up from $10.2 million a year earlier. However, total sales dipped 3.2% to $1.43 billion, down from $1.48 billion. Same-store sales increased 1.3%.

ATLANTA, GA — Home Depot has updated its website, making it easier for people to order products online. The redesign is also expected to improve Home Depot’s multi-channel marketing efforts. The new site features an expanded “know-how” section that shows step-by-step instructions and tips for completing home improvement projects, along with do-it-yourself articles.

EIGHTY-FOUR, PA — 84 Lumber Co. has been named Pro Dealer of the Year for 2003 at the most recent Pro Dealer Conference in the U.S. The Conference was sponsored by Home Channel News. In April of 2002 the company set a record by opening 20 new stores in one day, and will add another 20 stores this year, bringing the total to 453 stores in 34 states. The company is shooting for 20 more openings in 2004, says 84 Lumber’s president, Maggie Hardy Magerko. 84 Lumber reported sales of US$2.2 billion in 2002 and expects to surpass US$2.5 billion this year.

VANCOUVER, BC — For its third quarter, West Fraser Timber Co. reported earnings of $3 million on sales of $382 million. That’s down from earnings of $4 million on sales of $428 million in the third quarter of 2002. For the first nine months of 2003, earnings were $9 million on sales of $1.15 billion, a big drop from earnings of $102 million on sales of $1.23 billion for the same period a year earlier. The reduction in earnings was attributed mainly to a strengthening Canadian dollar, a strike at its Kitimat, BC mill and continuing duties on the sale of softwood lumber to the U.S.

TORONTO — Sears Canada Inc. re-opened its store at Yorkdale Shopping Centre in Toronto with a brighter interior, wider aisles, clear sightlines and colour-coded departments, all designed to help customers navigate the store more quickly and easily. Customer service centres have also been placed in highly visible locations and situated next to fitting rooms. The store also features a Sears Craftsman hardware department. The retailer also opened a Sears Home store last week in Boisbriand, QC. The 34,774-sq.ft. store specializes in furniture, accessories and major appliances. This is the 44th Sears Home Store in Canada.

VANCOUVER, BC — Prima Developments Ltd., through its wholly-owned subsidiary, Envirocoat Technologies, will begin distributing its coating products through two independently-owned Ace Hardware outlets in Lake Havasu, AZ and Yucaipa, CA. They are part of a chain of five Ace stores under one owner, and Prima hopes eventually to get its Envirocoat exterior paint and roof coating products into Ace’s warehouse. In Canada, Prima has a distribution deal with ICI Glidden.

Frank Greco has been appointed general manager of Roofmart, Eastern Canada. He was formerly at Canroof. (905-453-7870)

At Royal International Corp., Heather Janisse has been appointed sales manager, responsible for a number of Canadian and U.S. customers. She was formerly with Canadian In-Store, a division of Grant Brother Sales. (905-844-8268) … John Demaiter has been made a national service manager, responsible for all box stores nationwide. He was previously a national account manager. (905-309-5252)

House construction in the U.S. rose 3.4% from August to September, says the Commerce Department. That’s the second-highest rate since 1986, fuelled this time by low mortgage rates and pent up demand. Builders started work on 1.888 million homes seasonally adjusted last month, up from 1.826 million starts in August.

Steve Synnott, Pro’s newly appointed president, calls Sodisco-Howden “a good partner,” and lauds Jos Wintermans, Sodisco-Howden’s CEO, for “positioning that company for profitability.” Synnott concedes, however, that Sodisco’s hiring of investment banker NM Rothchild & Sons to review its business alternatives gave all indications that the wholesaler was being shopped around to potential buyers.

Synnott says there is “zero possibility” that Pro, with 51 members that generate US$3.4 billion in annual revenue, would bid for Sodisco-Howden to maintain its market position in Canada. However, he feels confident that his organization can negotiate a membership agreement with any buyer, even Rona Inc., whose name regularly crops up during any speculation about Sodisco-Howden’s future.

About 700 dealers in Canada fly the Pro banner. Pro Group has expressed concern with Sodisco-Howden’s program to allow some of its dealers to use the Ace Hardware name on their storefronts and in their advertising. (Earlier this year, Sodisco-Howden acquired Ace Canada’s inventory and receivables for about $15 million.)

“We’re not big fans of dual identity,” says Synnott.

According to Eric Konecsni, Home’s vice-president operations, Beaver’s original Markham, On offices, which have been wound down since moving most of Beaver’s people and operations to Home’s headquarters here in St. Jacobs, ON, still have three people working there, administrating the remaining former Beaver dealers who still operate with Beaver’s proprietary computer system, BLISS.

The last holdouts have a deadline of spring 2004 to make the switch to Home Hardware’s own Prism system, after which Home’s presence in Markham will be finished. Right now, says Konecsni, there are about 17 dealers who have yet to switch over, but, he notes, “The bulk have already moved. The final conversion will be over by April.”

Harris, president of Trendex, spoke recently at the Hardlines Marketing Conference. One area retailers have been slow to move on is data collection and management. He pointed out that in the ’90s there was a lot of money spent on POS equipment that would give real-time indications of sales. “But so far, very few retailers are using data to better manage their business.”

Using data which defined hardlines as power tools, lawn and garden items and homecare/comfort products, Harris says Sears is currently the largest retailer in Canada, followed by Canadian Tire and Home Depot. He adds, however, that no one retailer maintains consistent share across all markets.

Harris also predicts the death of at least two buying groups and the emergence of “lifestyle centres” in Canada.

Harris says the middle market is shrinking, while pointing out the emergence of new categories of luxury items, the effect of globalization on price and quality, and increasing wealth, especially in older households. He urges retailers to make sure product lines reflect changing population patterns. The 45-59 age range will grow 24.7% between now and 2011, and the number of Canadians between the ages of 60 and 74 will rise by 34.3%. During the same period, however, population growth of the 30-44 age range will drop by 8%.

The retailer, which first invaded Hawaii in 1993 when it opened a store in Honolulu, will employ 140 associates at the newest location, its sixth store in the state.

The Kauai Beach Press reported on its web site that the company paid nearly US$8 million for this project. The newspaper also reported that a number of local competitors have made some changes in their operations to differentiate themselves. The three-unit Hale Kauai, for example, introduced “The Contractors’ Store” that will allow its pro customers – who account for around 80% of its sales – access to its building materials section, home-planning department and a kitchen-cabinet showroom through the entrance of its lumberyard here.

The impact that Home Depot can make on any market, when it opens a new store, is evinced by the fact that it interviewed more than 500 people to fill the job slots in its new store.

VERNON HILLS, IL — Wickes, the U.S. building supply chain that was delisted from the NYSE last week, is getting a leg up from its major shareholder, Imagine Investments, which will provide up to US$10.5 million of financing. With its affiliate partners, Imagine owns approximately 51.7% of Wickes’ common stock and the cash infusion will enable Wickes to meet debt obligations that come due December 15, 2003.

DALLAS, TX — Only days after announcing it would pull up stakes in the Denver market, Builders FirstSource has jump-started its growth machine again by acquiring Davidson Lumber and Space Concepts, two businesses operated by Davidson Industries in Indianapolis. Builders FirstSource operates 58 yards and 82 manufacturing plants in 70 cities in 11 states. The addition of Davidson’s operations, which include truss and wall panel manufacturing, will add US$60 million to BFS’s revenue.

BENTONVILLE, AK — Wal-Mart had sales for September of US$23.39 billion, an increase of 13.0% from the same month a year earlier. Sales year-to-date were US$163.51 billion, up 11.2% from the first eight months of 2002. The Wal-Mart division’s sales for the five-week period were US$15.85 billion, up 12.7%, while year-to-date sales reached US$111.122 billion, up 10.6%. Sam’s Club sales for September were US$3.21 billion, a gain of 11.8%, and year-to-date sales were US$22.343 billion, up 8.6%. Sales by the international division were US$4.330 billion, up 14.9%; year to date they were up 15.8%.

FEDERAL WAY, WA — Weyerhaeuser Co. has agreed to the sale of approximately 168,000 acres of timberlands in west-central Tennessee to Fountain Investments Inc. Weyerhaeuser will use the after-tax proceeds, totaling about US$65 million, to pay down debt. The deal is expected to close in the fourth quarter of 2003. Earlier this year, Weyerhaeuser announced it would sell off its timberlands in Tennessee and North and South Carolina. The sale process in the Carolinas is expected to conclude later this year. Weyerhaeuser also acquired 1.7 million acres with the purchase of Willamette and now owns or manages approximately 7.6 million acres in the U.S.

ISSAQUAH, WA — Costco reported net sales for fiscal 2003, which ended August 31, of US$41.69 billion, up 10% from US$37.99 billion during the prior fiscal year. Profits for the year grew 3% to US$721.0 million, up from $700.0 million. Same-store sales increased 5% over the previous year. Net sales for the fourth quarter increased 11% to US$13.42 billion, while same-store sales during the period increased 7%. Profit for the fourth quarter decreased 3% to $239.4 million.

MEDINA, OH — Paint maker RPM International Inc. saw first-quarter profits rise 8%, thanks largely to its consumer business, although the industrial side is still lagging.
The paint manufacturer, whose brands include Rust-Oleum, says its fiscal first-quarter net income rose to US$47.7 million from US$44.2 million a year earlier.

Gary Robb has been hired to manage operations at Peavey Industries as general manager of the 26-store specialty hardware chain. He was formerly with Cameron Ashley. (403-346-8991)

The Ace banner and programs are under license to Sodisco-Howden in Canada, following its acquisition of Ace’s operations in this country earlier this year. The Ferplus dealers have taken on the Ace Quincaillerie program; the Bâtitout stores have switched to Ace Matériaux. The move is being supported by radio and television spots, a flyer this week, and another grand opening flyer next week. “This is our strategy in Quebec, because we’re essentially starting from scratch and need to build awareness.”

Ace Matériaux is being positioned as the banner for dealers with a contractor and heavy DIY focus; Pro is being positioned for retail oriented home centres.

Sodisco-Howden is committed to support Ace in Canada, says Désilets. More than 100 stores already fly the Ace banner, and she wants that number to double by the end of next year.

Sodisco-Howden, which has recently hired an international financing company to evaluate its strategic options (a move seen by many as the first step toward being put up for sale), is also making changes to another of its banners. Do-it center, a home centre program initially developed in Canada under license from HWI (now Do-it Best Corp.) in the U.S. will be eliminated, due to Sodisco-Howden’s acquisition of Ace: Ace and Do-it Best are heated competitors south of the border and Do-it Best has pressured Sodisco-Howden to drop the banner here. The 50-plus Do-it center stores in Canada are being encouraged to switch to Ace.

Claiming to reach more than one million attendees each year through their home shows, dmg media, which produces more than 300 trade and consumer shows annually, decided it wanted to partner with a home improvement retailer on a national scale. Rona Inc., which through acquisition inherited Lansing Buildall‘s position at a home show in Toronto, had first crack at the national offer, says Mark Hindman, director of marketing for Rona in Ontario. But his company did not want to commit to that many home shows. “dmg wanted someone to step in and commit to all 16,” but he says Toronto was the only good fit.

The home show has traditionally been the domain of the local home improvement dealer. However, Rona is not alone in deciding to leave the venue out of its plans. Totem Building Supplies opted out of the home show circuit a few years ago, says the company’s vice-president marketing, Colin Robertson. Totem has 13 stores in Alberta, but in Calgary, for example, where Totem is headquartered, “the home show occurs at our busiest time of the year,” he notes. “You have to take your best people off the sales floor and leave them down there for three or four days. But we need to be running the stores at full capacity.”

The home show was once a good place to offer how-to seminars, says Hindman at Rona. But this kind of education is now common in many Rona stores, “so what are we doing there?”

For its part, Home Depot has invested in a team that will be devoted to setting up the retailer’s interactive booth in each of the 16 shows, and for staffing the booth with Home Depot associates from local stores in each city. Using the slogan, “Stop dreaming, start planning,” the 1,600-sq.ft. booth offers four vignettes, for bathroom, kitchen, workshop, and deck. Each vignette will be complemented by a freestanding kiosk that will offer product information, as well as information about Home Depot’s At Home Services and Design Place.

“We continually look for new and more interactive ways to communicate directly to our customers,” says Pat Wilkinson, director of marketing for the Home Depot Canada, in a prepared statement.

A new merchandising program, called the “Dollar value Program,” got exposure at the latest Home Hardware dealer market. The program, which was developed at the senior level of Home’s buying team, is aimed at holding onto sales that may otherwise go to discount stores.

It also anticipates the rollout of Sam’s Club by Wal-Mart Canada and the growth of garden products and housewares in non-traditional retailers such as Loblaw’s.

A variety of plastic kitchenware such as spatulas, tongs and other kitchenwares, as well as paint accessories and storage items, are featured in stacked laminated cardboard dump bins, all priced at a dollar. “The lower price points are necessary,” says Joel Marks, director of merchandise at Home Hardware, “to ensure our share is not eroded on the lower priced merchandise. These items are a good defence strategy against the dollar stores, and they make great impulse items.”

Referred to as “the Chicago event,” by its owner, the American Hardware Manufacturers Association, the show will be held April 18-20 of next year, while the Las Vegas show will be held May 10-12. The AHMA Hardware Show will be divided into three separate events: “The World of Hardware & Tools,” “The World of Lawn, Garden & Outdoor Living” and “The World of Home Decorating.” The garden section promises to be the largest of the three, filling one entire building. Dedicated feature areas include the Garden Center of the Future, an actual working greenhouse; and Green Goods Pavilion, a show-in-a-show area of live goods.

“Every aspect of the Chicago event has been changed, improved and enhanced to make it more productive and cost-efficient for exhibitors and attendees,” says Bill Farrell, president and CEO of AHMA, in a prepared statement. “We’ve been encouraged and gratified by the strong show of support we’ve been getting from the entire industry.”

That’s part of AHMA’s strategy for going to market — its role as the U.S. industry’s association — which should warrant support by the industry itself.

NHS is taking a different tack. “We’re not concentrating on getting support,” says Robert Cappiello, president of the National Hardware Show. “We’re concentrating on putting on a good show.” NHS has been actively signing up exhibitors, and has contracts now with almost 1,400 vendors taking up 314,000 sq.ft. of space. “We’re about 70% full. At this rate, we’ll be sold out by January,” says Cappiello.

The AHMA, meanwhile, is gunning for the big names, including The Stanley Works, which hadn’t participated in Chicago for two years before this. Other companies that have signed on include Fluidmaster, 3M, Ace Hardware, Chamberlain, Empire Level, Estwing, Melnor/Gardena, Orgill and Zircon. AHMA also cites strong support from the retail side, including Canada’s Home Hardware and Réno-Dépôt. However, it should be noted that Home’s own dealer market coincides with the AHMA Show, and Réno-Dépôt has been purchased by Rona.

Both shows are putting a lot of emphasis on seminars. AHMA will offer “a dedicated educational program” and NHS will mount a comprehensive conference series of its own that already has 250 registered for it. In addition, the 2004 AHMA Hardware Show is supported by the U.S. Commerce Department’s International Buyer Program.

Last week, Steve Synnott was named president of Pro Group, the Centennial, CO-based wholesaler marketing organization with 51 distributor members (which include Canada’s Sodisco-Howden Group) that generate aggregate sales of US$3.4 billion. A 10-year company veteran, Synnott says his main focus as president would be to “keep the ship in safe harbor.” He spoke with Hardlines about the company and his plans.

What’s your assessment of Pro Group, and where do you see its greatest potential for growth?
We’ve been extremely fortunate because we’ve lost very few members to acquisition or bankruptcy. The pace of consolidation within the industry appears to be slowing. What we’re looking to do is expand our distribution footprint [and sign up more] niche distributors that would fit well into our organization, like Cascade Wholesale [in Oregon] that specializes in power tools, or Reiss Wholesale [in New York] whose specialty is locksets.

What programs do you want to move to the front burner?
We have a lot of things in the works already. On November 1, we’ll be moving into a new, 14,000-sq.ft. headquarters, about two miles from where we are today, that will give us about 26% more space. That facility will have two additional conference rooms that are equipped with high-speed technology, and the facility will allow for better collaboration of our staff.

We recently initiated a partnership with the Marine Toys for Tots Foundation that has many of our stores serving as drop-off points for toys during Christmas, and I want to see that go forward. And on January 1, we’ll be rolling out a new national circular program that, for the first time, allows for flexibility in product assortment. Dealers that carry building products and paint, for example, will be able to insert those items and tell their full story.

I’ll also be working to integrate more of our dealers into our programs. One that we’re pushing hard now is plumbing and electrical.

What’s Pro Group’s biggest challenge?
We still need to find new ways to add value to existing customers who always want new, better, more, from our staff [of 42], which has been shrinking a bit. For example, this year we launched Pro Group Financial, which provides leasing services for store equipment. This program is in an incubation phase right now, but it should be profitable in a few years. You can try things like this when you’re a financially strong company. We’re running well ahead of budget and financial projections this year – and we’re debt free.

The European DIY scene is becoming dominated by two or three major players in each market, except for Germany, which has not yet undergone the wrenching competitive concentration that France and the UK have felt, though industry experts expect Germany to undergo that same survival fight very soon.

As a result, west European retailers increasingly are looking south and east to expand, with Italy, Spain and central and eastern European countries targeted for expansion. In those countries, DIY offers consumers a glimpse “into the good life” and for retailers, an immense opportunity because most of the consumers in those countries have the capability to undertake major DIY projects. And retailers such as B&Q and OBI are both also expanding in the Far East.

Retailers noted that the homes in eastern and central Europe are in great need of improvement, so DIY opportunities are great for both large and small projects.

Fediyma members heard how technology is going to affect them as retailers seek to improve their stock turns, margins and reduce operating expenses by adopting leading-edge technologies such as RFID tags, self-checkouts and self-scanning by consumers as they wander store aisles. For manufacturers, it will mean added costs and changed procedures, as well as changes in marketing efforts.

One major European chain, Metro, is leading the world in exploring how technology can be used. In Rheinberg, Germany, it has a state-of-the-art test store devoted to technologies that can produce operational efficiencies while being accepted by shopping consumers.

Last year, McLendon Hardware generated US$60 million in revenue.

McLendon Hardware currently stocks 120,000 SKUs, and McLendon-Baer says the larger facility would allow the dealer to expand its floor covering department significantly. The larger store would also provide much-needed parking spaces, which are virtually absent at the company’s smaller store.

While no permits had been issued yet, the move is expected to take place by mid-2004

HALIFAX — AWARD Wholesale and Retail Distributors was just one of many companies to be uprooted by the devastation caused by Hurricane Juan last week. The storm swept through the city on the evening of September 28, and though it lasted under three hours, the high winds “just destroyed the city,” says Tom Smith, president of the 98-store group. With trees knocked down and power lines out, Smith moved the offices temporarily into a hotel that had power, until he was able to move them back on the morning of October 2.

TORONTO — Home Style Magazine recently selected Home Outfitters as the 2003/04 GIA Canada winner. The Global Innovator Awards, co-sponsored by the International Housewares Association, recognize housewares merchandising excellence in a national chain, and the company will be honoured next March (along with national winners from 22 other countries) at the Chicago Housewares Show. This is Home Style’s fourth year as a co-sponsor.

MISSISSAUGA, ON — Wal-Mart Canada has announced it will launch a private-label credit card program this fall for both Wal-Mart and Sam’s Club. The program, developed with GE Consumer Finance, will mirror similar programs GE has provided for Wal-Mart in the U.S. and South America. The new agreement in Canada includes Wal-Mart’s private-label consumer credit business and Sam’s Club’s private-label consumer, business revolving charge and business direct portfolios. The Wal-Mart business will be serviced by GE Consumer Finance’s offices in Edmonton and a recently opened office in Toronto.

MONCTON, NB — The Atlantic Building Supply Dealers Association has relocated to new, larger facilities that include conference facilities for members and associate members: 70 Englehart Street, Dieppe, NB E1A 8H3. All telephone/fax numbers the same. Telephone: 506-859-0062.

HUNTSVILLE, NC — Lowe’s month-old anti-smoking policy is stirring up dissent among some of its employees. On September 1, Lowe’s, based in Wilkesboro, NC, enacted a policy that prohibited smoking on any of its properties, including outdoors. But 27 employees working at the company’s store here have signed a letter protesting the policy as discriminatory. Among the signatories are three non-smokers. Lowe’s had given workers six months’ notice before the policy went into effect, and offered counseling services to help smokers quit.

LONDON, UK — Kingfisher plc reports that B&Q, its home improvement retail division, enjoyed an 11.2% sales increase during its first six months, with retail profit growing 14.8% to more than £186 million. During the period, the company opened six new Warehouse big box stores and two mini-big boxes. B&Q plans to open three new Warehouses and two mini-Warehouses.

BENTONVILLE, AK — Wal-Mart Stores unveiled its growth plans this morning for the fiscal year beginning February 1, 2004. In the U.S., 50-55 new Wal-Mart discount stores and 220-230 new Supercenters will be opened. Of those, 140 will be relocations or expansions of existing outlets, while the remainder will be built in new locations. The company will further expand its Neighborhood Market concept by adding approximately 25 to 30 new units in the upcoming fiscal year. In addition, the Sam’s Club division is expected to open 35-40 outlets in the U.S.; about 20 of those will be relocations or expansions of existing clubs. Internationally, Wal-Mart plans to open 130-140 outlets in existing markets, 30-40 of them relocations or expansions.

NEW YORK — Owens Corning has asked the Mississippi Supreme Court to revive its suit that would put some of the blame for asbestos companies on cigarette companies. OC has been in Chapter 11 bankruptcy protection since late in 2000. Along with other asbestos makers, it is trying to get the courts to hit on cigarette makers to share costs. A lower Mississippi court had rejected Owens Corning’s argument in 2001, saying the company had no legal basis for its claim of damages. The judge in that case ruled Owens Corning could not claim damages for injuries not suffered directly.

A number of people have left Réno-Dépôt as the company braces for its assimilation by its new owner, Rona Inc. According to La Presse, which got its hands on an internal memo, the departures include: Laurent Mériaux, vice-president finance and development and the number-two person at Réno-Dépôt. He originally came from Réno-Dépôt’s former parent, Castorama in France…Christine Beaulieu, vice-president IT and logistics…Nathalie Clément, director of legal affairs and corporate secretary…Daniela Maltauro, vice-president store real estate and development…Stepping in from Rona: Claude Guévin, executive vice-president and CFO, will now also direct finance and development at Réno-Dépôt…Martin Lacroix, vice-president finance, who is part of Guévin’s team, will work on the Réno-Dépôt side, as well…France Charlebois, corporate secretary and general council, will be put in charge of legal affairs for Réno-Dépôt.

At The Pentair Tools Group/Porter Cable-Delta, Peter Bowes has been promoted to the position of director of retail sales & marketing. He was formerly director of marketing. Bowes replaces Randy Schnarr, who has left the company. (519-836-2840)

Steve Synnott has been promoted to the role of president of Pro Group, based in Centennial, CO. He was formerly vice-president merchandising and marketing, as well as managing director for Pro Hardware. (An exclusive interview with Synnott appears elsewhere in this issue.)

Beryl Buley has been appointed senior vice-president and general manager of home stores at Sears, Roebuck & Co. Formerly an executive at Kohl’s Corp., he will oversee the Sears hardware, appliance and outlet stores, or some 1,300 off-mall stores … Buley replaces Dan Laughlin, who has been promoted to senior vice-president and general merchandise manager of appliances and electronics at Sears.

Canada’s gross domestic product increased 0.6% in July, reflecting gains across the economy and marking the largest monthly gain since April 2002. Industrial production advanced 1.2%, compared with a smaller US increase of 0.7%.

“We’d look at any opportunity if there was a means of helping the independent dealer and if this was the right fit,” says Paul Straus, vice-president and CEO of Home Hardware. But added that his company is in no talks with Sodisco-Howden right now.

Speculation is running wild right now on the announcement that Sodisco-Howden had hired a M&A firm, NM Rothschild & Sons, to advise on the future of the company. Home would be one of a handful of competitors in a position to buy Sodisco-Howden’s operations, which include three distribution centres, one in Victoriaville, QC, one in London, ON and the other in Langley, BC.

But there are a lot of reasons why a buyout wouldn’t be a good fit, Straus goes on to explain. For example, with all the acquisitions Sodisco-Howden has made in recent years, it’s yet to harmonize computers and systems. “It would be complicated,” Straus says.

According to the study, which evaluates the size of the retail home improvement market and relative growth of the market by retail type, sales by hardware retailers in Canada have dropped from 13.6% of the overall market in 2001 to 12.1% of the market in 2002. That’s an 11% drop in sales, and a loss of 3.2% of market share.

Building centres, however, showed a slight increase, with their overall share of the retail home improvement industry rising 2.4% from 46.6% to 47.7%.

Hardware and home improvement sales grew by more than 8% in 2002 and represented almost one in 10 dollars spent by Canadians at retail last year.

Hardware and building supply dealers, mainly represented by independents, account for almost 60% of that industry. Their growth has been attributed to the performance of fewer, but stronger, players as they expand square footage, locations and services.

ST. JACOBS, ON — One of the services that garnered a lot of attention at the recent Home Hardware Spring Market was Home’s new gift card. The card, which can be loaded at POS with any amount desired, was designed to replace gift certificates, which the company claims were awkward and difficult to track.

Gift cards have been great for impulse sales, as well, and sales through a limited number of stores have been going through the roof. “We matched what we did in gift certificates annually in just two months,” says Bill Ferguson, dealer support manager at Home Hardware.

The card has an added sales dimension when sold in bulk at a discount to a script company – in effect, a jobber that resells the cards to charitable or fund-raising organizations. The script company keeps some of the discount and passes along the rest to the fund-raisers, who can in turn sell the cards to raise money for their own causes.

According to Ferguson, the gift card business in the U.S. is worth $36 billion annually.

The division, which had sales last year of US$3.77 billion, distributes more than 10,000 products in 14 categories, including structural panels, hardwood plywood, roofing, lumber, vinyl siding and particleboard. A separate division from Georgia-Pacific’s building products manufacturing operations, it employs 3,390 people in 63 facilities in the U.S. and one in Canada.

But GP wants to move out of commodity based businesses. Even though it is an industry leader in LBM distribution, it purchases less than 30% of its supply from GP’s own manufacturing facilities.

Distribution in the LBM sector is typically at the mercy of pricing changes, and recently the industry has been assailed by volatile prices for plywood and OSB. GP’s board wants to “create shareholder value by sharpening focus on Georgia-Pacific’s more stable, consumer-oriented businesses and our goals of reducing debt and strengthening
our balance sheet, it is natural that we fully review the strategic alternatives for the building products distribution business,” said Pete Correll, Georgia-Pacific chairman and CEO in a prepared statement.

In July 1999, BFS acquired Kellogg Lumber, whose two yards and manufacturing plant were generating US$47 million in annual sales. However, a combination of factors, including acquisitions in the Denver market by Stock Building Supply and Lanoga Corp., and a 14% decline in home building activity over the past three years, stymied BFS’s efforts to grow in Colorado.

“We have been the number-seven competitor in the market, which has made it difficult for us to respond profitably to the business downturn,” said Floyd Sherman, BFS’s chairman and CEO, in a prepared statement.

The pro dealer has decided to close its store in Denver (whose lease expired this summer), and to sell its store in Fountain, CO, to a buyer whose identity the company did not disclose.

Michael Turner, a principal with The Jian Group, a Fredericksburg, VA-based broker that helps many of the industry’s large pro dealers find suitable acquisition targets, told Hardlines that he expected BFS to step up purchasing in 2004, when it would concentrate on companies that offered value -added services like truss and panel manufacturing, and installation for home builders.

“Home Depot has been evaluating locations throughout Manhattan for several years,” said Tom Taylor, president of Home Depot’s Eastern Division, in a prepared release.

Both stores will be pedestrian-oriented, multiple-level “urban neighbourhood” stores, with a product assortment geared specifically for the downtown market. While the latest store will be about 83,000 sq.ft. in size, the Flatiron store will be considerably larger, a 108,000 sq.ft. outlet with two floors and a mezzanine. Since the urban neighbourhood format was launched in April 2002, the company has opened urban stores in Brooklyn and Staten Island, NY, and in Chicago.

When its repurchase plans were revealed, trading of Calloway’s shares on the Nasdaq SmallCap Market was halted at 62 cents, compared with $2.88 per share it traded for, on average, in the first quarter of 1998, which represented a five-year high.

TORONTO — Budget Canada opened its first rental kiosk in a Canadian Tire store this past weekend, with an opening in Pickering, ON. The move is part of a five-year agreement signed back in February 2002 between Canadian Tire and Budget, which will involve the installation of kiosks in up to 100 Canadian Tire stores by the end of next year.

EAU CLAIRE, WI — John Menard Jr., the secretive head of the world’s fourth largest home improvement retailer, is getting more trouble from the Internal Revenue Service than he is from Home Depot. The debt-free chain of 184 stores in the U.S. Midwest had sales of US$5.5 billion last year, but Menard’s own package pays him so lavishly that the IRS says he owes big time.

RALEIGH, NC — Stock Building Supply plans to open an 89,000-sq.ft. lumber distribution centre in Scertz, TX this fall. The facility, which will employ 100 people, will eventually be expanded to supply trusses and other building materials. It will complement an existing millwork operation that Stock acquired early this year when it bought Wenco Distribution from Jeld-Wen. The company operates 16 other yards and value-added facilities in Texas.

TORONTO — Hudson’s Bay Co. opened its 34th Home Outfitters store last week, this one in Halifax, NS. The new 34,000-sq.ft. outlet employs 60 and is the first Home Outfitters store in the Maritimes.

MARGATE, FL — Florida’s first Home Depot Floor Store opened here last week. Aimed at both homeowners and pros, the 25,000-sq.ft. store features carpet, ceramic tile, natural stone, rugs, wood, vinyl and laminates, as well as installation tools. It also features a design showroom for decorators, designers, builders, remodelers, contractors and architects.

TORONTO — Sears Canada has forged an agreement in principal to open a store in the Bower Place Shopping Centre in Red Deer, AB, although no opening date has been announced. The new location, in the city’s developing south-end retail hub, will replace a store in Red Deer Centre.

TORONTO — Carina Furniture Industries is being taken over by Montreal-based Dorel Industries. Carina is a leading RTA furniture maker, with sales of $81.4 million. The deal will make Dorel the number-two RTA furniture producer in North America. Carina designs and manufactures furniture under the Carina and SystemBuild brands, which are sold to the likes of Lowe’s, OfficeMax, Staples, Home Depot, Home Hardware and Wal-Mart Canada.

SAN FRANCISCO, CA — A sexual discrimination lawsuit could end up costing retail giant Wal-Mart hundreds of millions of dollars in payouts to female employees. The suit, launched two years ago by six female ex-employees, had hearings last week to establish whether the suit can be certified. Claims have been made that Wal-Mart routinely sidelines women into jobs such as cashier, which offer little chance for promotion. The lawsuit notes that 70% of Wal-Mart staff are women, while only 15% hold management positions. the judge in the case has yet to rule on whether the case can be elevated to class-action status, which could end up including 1.5 million current and former female employees. Wal-Mart is currently defending itself against 6,649 lawsuits.

Robert Lawton has been appointed director — commercial sales for Dimplex North America Ltd. Reporting to Martyn Champ, president of Dimplex, Lawton will assume responsibilities for the management, direction and planning of sales functions for the company related to its Chromalox and Electromode brands. Lawton’s background includes senior sales and marketing positions with Home Depot Canada, Nutone Canada and General Electric. (519-650-3630)

With the departure of its top hardlines merchant, Sears, Roebuck & Co. is losing the last of its old guard. Lyle Heidemann, 58, executive vice-president and general manager of hardlines, has announced he will leave at the end of the year, working through this fall to ease the transition for a replacement. Tina Settecase, vice-president and general manager of appliances, is considered by some as a possible successor.

The film crews were in Atlanta to make TV stars out of Home Depot‘s founders. Bernie Marcus and Arthur Blank will figure prominently in a film history that will appear on the “Biography” series, part of the A&E Network. The entertainment network and ABC News were in Atlanta last week to film a history of Home Depot, the home improvement chain Blank and Marcus started in the late 1970s. A&E will air the Home Depot history beginning November 19.

The composite leading index grew 0.5% in August, the second monthly gain at this rate, making July and August the two best monthly increases in over a year, according to Stats Canada. Manufacturing continued to weaken, though, notably as the workweek was reduced by the blackout in Ontario. Excluding this, the overall index rose 0.8%, the largest since May 2002. Housing was up for the fourth straight month, with housing starts rising in July due to strong demand.

Sales of new houses in the U.S. reached 1.15 million seasonally adjusted, says the Commerce Department. That’s up 3.4% from the July rate of 1.12 million seasonally adjusted, and a 12.2% gain from August 2002.