Trois Rivières, QC — An old name is new again in this province. Unimat, the name of a now defunct wholesaler, is the latest banner to be offered to independent dealers. It’s the effort of the regional dealer-owned wholesaler, Co-opérative Fédérée de Québec, to develop a retail program for independent hardware and building centre dealers who aren’t co-op members.

Since its inception late last year, two renovation centres and one hardware store have been signed to the new banner.

Claude Gingras, director, hardware and building materials for Co-op Fédérée, won’t say what long-term potential he sees for the Unimat banner in Quebec. He merely insists his organization will develop dealers one at a time, as independents seek out alternatives to other banner programs. “We have a structure for both kinds of retailer,” Gingras says. “We have a good program – an offer for independents.”

Co-op Fédérée has also been busy updating its member stores. Averaging 12 upgrades a year since 2000, the company has converted 53 in total. However, the co-op wholesaler has already converted 15 this year, with another six planned by the end of 2003. “This will be our biggest year,” says Gingras. The group has 156 stores in total, representing about $245 million in retail sales.

Updated stores often involve adding square footage and new merchandising, as well as a new colour scheme and updated Co-op store logo. A big part of the renovations allow for the expansion of product lines that appeal to an increasingly important customer – women. “This helps very much with increasing the variety of décor products and helping to bring in more women,” says Gingras. Featuring more and better lighting creates a more pleasant shopping environment, he adds, enabling shoppers to find things easily and encouraging the purchase of impulse products.

It’s the latest step in a strategy to provide brands that are exclusive to HBC stores. The following Westinghouse products will be launched at select Zellers and Home Outfitters stores beginning this fall: small kitchen appliances, microwave ovens, vacuum cleaners, fans, clocks, timers, alarm clocks, personal care appliances, heaters, humidifiers and air cleaners. Additional product categories will be introduced over the next 12 months.

Salton operates in Canada under the Maxim Toastmaster name.

Part of the branding strategy includes the launch of a series of “beyond” appliances, which are designed to enhance the functionality of conventional appliances, starting with a line of technologically advanced vacuums that are cordless and run on batteries.

Toronto, ON — What services and support are available to companies looking south of the border or overseas for new business? The International Business Seminar, which kicks off the Hardlines Conference Series on September 3, 2003, will feature concrete information on finding customers and distributors for your products in other countries.

One of the featured presenters, Bill Macheras, is a marketing and trade officer with Industry Canada’s International Trade Centre. His job is to assist Canadian companies, particularly small and medium-sized companies, with their exporting needs. With a specialty sector is building products, he has been with the International Trade Centre for three years and has previous public and private sector experience in banking, law and communications.

Hardlines will provide an overview of key retail customers overseas, while members of the Council of American States in Canada will present the many programs available for U.S. trade. For more information about the International Business Seminar and the Hardlines Conference Series, call 416-489-3396 or click here.

Tillman will be joined by many of the retailer’s senior-level executives, who will be among the first wave of 1,000 to 1,200 employees to relocate into the new facility from Lowe’s headquarters offices here. The company’s store operations, merchandising, finance and marketing departments will operate out of Mooresville, while its real estate, accounting and information technology departments will remain at Wilkesboro, which currently is home to between 2,800 and 3,000 employees.

The Mooreville facility, which will be on a campus that includes a seven-acre lake, is expected to eventually expand to 1.2 million sq.ft. The decision to add this new support centre is in line with Lowe’s ongoing retail expansion, which will add 270 new stores in 2003 and 2004.

Montreal, QC — Tembec Inc. reported a drop in gross sales for the third quarter to $808.9 million, down from $872.6 million in the same period a year earlier. Net earnings inched up to $70.5 million, compared with $68.7 million in the corresponding quarter of 2002 and $34.2 million in the second quarter of this year.

Cleveland, OH — Sherwin Williams reported that its sales for the second quarter increased only 1.3% to US$1.5 billion. Its earnings rose 2.4% to US$110.1 million. The company said wet weather hindered its sales growth. Its paint stores saw their sales for the quarter increase 2.4% to US$933.8 million. Same-store sales inched up 1.7%, but this segment’s operating income declined 0.8% to US$122.6 million. Through six months, Sherwin Williams’ stores reported a 2.6% gain in sales to US$1.65 billion, a 1.6% increase in same-store sales and a 6.8% decline in operating income to US$152.6 million.

Townson, MD — Cost cutting is paying off for Black & Decker, which reported that its profits for the quarter ended June 29 rose 14.5% to US$75.7 million. However, the company couldn’t completely weather lower orders from its two largest customers, Home Depot and Lowe’s, which caused its sales for the quarter to decline about 1% to US$1.12 billion. Sales of power tools and accessories specifically were off 6% in the quarter. Through six months, B&D sales increased 0.5% to US$2.09 billion, and its net income rose 20.2% to $119.1 million.

New Britain, CT — Net income at Stanley Works for the second quarter fell a whopping 80% to US$12 million, on sales of US$700 million, which increased 8% over the same period a year ago. The company attributed the decline to US$48 million in charges related to its closing its Mac Direct business, as well as severance and pension benefits for John Trani, who will retire as the company’s CEO later this year. Among the factors that contributed to Stanley’s ongoing financial difficulties was the decision by Home Depot to drop the supplier’s line of entry doors from one of its regions.

St. Paul, MN — Sales worldwide increased 10% for 3M in its second quarter, pushing earnings up nearly 15%, from US$539 million to US$619 million. Quarterly revenue went from US$4.16 billion last year to US$4.58 billion.

Duncan, BC — Doman Industries continues to struggle through restructuring, and has obtained an extension of its bankruptcy protection from the Supreme Court of British Columbia as it considers a new loan package, this time from Tricap, which was part of an earlier loan deal. Doman is an integrated forest products company and the second-largest coastal woodland operator in BC.

Greensboro, NC — Mohawk Industries has reached an agreement to buy the Lees Carpet division of Burlington Industries, which is now in Chapter 11 bankruptcy proceedings. Lees Carpet had US$262 million in sales last year, accounting for more than one-quarter of Burlington’s sales. Mohawk is the second largest carpet maker in the U.S. and the country’s biggest floor coverings manufacturer.

The composite leading index posted a moderate gain of 0.3% in June, slightly stronger than last year’s growth over the same period, says Statistics Canada. All the indicators of household demand rose or were stable, led by housing, which was up 0.7% in June, its best since a 2.2% advance in February. Both housing starts and existing home sales increased, as employment rebounded from two consecutive losses and mortgage rates stayed low. Sales of durable goods, which have been very volatile in recent months due to rebate programs for autos, also turned up.

Although their sales increased in 2001, non-store retailers – who reach consumers through everthing from infomercials, direct-response advertising, catalogues, door-to-door sales, home parties and by vending machines, still only accounted for 3% of all Canadian retailing, says Statistics Canada. They provided $10.5 billion in goods and services, a 2.9% increase over 2000.

Sales of new single-family houses were up 4.7% in June to 1.16 million seasonally adjusted, says the U.S. Census Bureau. While the increase is a healthy one over the previous month, it’s also fully 21.0% higher than the rate in June 2002.

Last week, however, both sides managed to come to an agreement to settle their respective lawsuits out of court. Neither side would disclose any details, as the terms of the settlement were confidential.

Matco Ravary recently released its second-quarter results, which reveal a company stripped of substantially all its assets following the sale to BMR. In the second quarter and for the six-month period ended April 30, 2003, Matco Ravary recorded revenues of $1.3 million resulting mainly from the sale of 108,736 Rona shares, as well as interest income from investments.

Bonuses for the two senior officers of Matco Ravary, Carmel Chaput, chairman, and Gilles Nolet, president and CEO, plus the cost of professional services, made a $0.7 million dent on the books, while another $0.4 million was payable to the two executives’ pension funds following the sell off.

Trendex North America is one of North America’s largest consumer syndicated marketing and research firms specializing in the Canadian market. The company regularly tracks consumer purchases of household equipment, household textiles, soft goods and sporting goods.

The Hardlines Marketing Conference is part of the Hardlines Conference Series, being held September 3-4, 2003 at the Delta Toronto Airport West Hotel.

Toronto, ON — What’s ahead for the supply chain? Now you can find out at the Hardlines Marketing Conference on September 4. We’ve just signed the Electronic Commerce Council of Canada (ECCC) to one of our breakout sessions at the Conference to give a valuable and timely update on the latest changes and standards being applied in data synchronization. ECCC is the organization in Canada working to harmonize standards and bring this industry in line with initiatives being developed jointly with UCCnet in the U.S.

Michael Sadiwnyk of ECCC will discuss the rationale of global e-commerce standards for the supply chain. Data synchronization will be a key driver of this coming e-collaboration. Sadiwnyk will describe the global standards landscape and present the key players involved internationally and nationally, and explain how data synchronization can benefit and enhance the efficiency of the supply chain.

The data sync session is one of three breakouts being offered at the Hardlines Marketing Conference. For more information about the whole Hardlines Conference Series, September 3-4, 2003, call 416-489-3396 or click here.

Last Thursday, the Census Bureau reported that single-family housing starts in June rose to an annualized rate of 1.462 million units. That’s 7.6% higher than the rate in June 2002. Overall housing starts, which include multi-family dwellings, increased 5.5% to 1.803 million units.

Mel Martinez, the Secretary of the Department of Housing and Urban Development, stated that the Bush administration remains committed to increasing home ownership among minorities by 5.5 million by the end of the decade. As part of that effort, the administration this year has proposed a US$113 million increase for the Department’s HOME Investment Partnerships Program; US$200 million for the “American Dream Downpayment Fund” to help low- to moderate-income families become first-time homeowners; US$2 million for research to help reduce regulatory barriers to affordable housing; and US$10 million toward housing counseling to help low-income individuals and families find and maintain homes.

On the same day, the Labor Department reported that weekly jobless claims fell to 412,000 in the week of July 12, from a revised 441,000 the prior week. The four-week running average declined to 424,000 from 427,500. And continuing claims fell to 3,654,000 in the week of July 5 from 3,771,000 the previous week.

“The rate of loss seems to be abating,” Mark Zandl, chief economist for Economy.com, was quoted by Reuters. “The economy is still losing jobs, but at a slower rate, so we’re heading in the right direction.”

Bentonville, AK & Wilkesboro, NC — Anticipating a wave of Americans who will want to use their federal tax refund for home improvement projects, Lowe’s will allow easy cheque cashing this year in its stores. As a convenience to its customers, no purchase will be required.

“Historically, we know when consumers have access to additional cash, many homeowners will choose to spend a portion of that money on projects that improve their largest asset – their homes,” said Larry Stone, senior executive vice-president of operations at Lowe’s, in a prepared statement.

Starting July 25, the U.S. government will begin mailing out 25 million tax rebates totaling US$14 billion.

A few days after the Lowe’s announcement, Wal-Mart said it would offer the same kind of service. Customers will be able to cash their federal tax refund cheques at any Wal-Mart or Sam’s Club store.

According to Wal-Mart, 20% of its customers don’t have bank accounts.

The company’s building materials distribution division reported a 31% increase in its quarterly operating profit to US$21 million.

Through the first six months of its fiscal year, G-P generated US$9.62 million in revenue, down from US$12.02 million in the first half of 2002. (Unisource contributed US$2.8 million of those 2002 sales.) Profit stood at US$34 million, compared with a US$567 million loss in the first six months of last year.

Pete Correll, G-P’s CEO, said that “every segment” of his company’s business was performing below last year’s pace and that profit gains were the result of cost-cutting measures.

Dryden, ON — Weyerhaeuser Co. will close its pulp and paper operations here as the forest products market continues to shrink. The closure, effective October 11, 2003, will be a permanent one, affecting about 330 hourly positions. Weyerhaeuser will take a US$7 million after-tax charge against its second-quarter earnings for costs associated with the closing.

Toronto, ON — Hudson’s Bay Co. has arranged a new line of credit, secured by the company’s inventory. The 364-day $650 million secured revolving credit facility will be used for “general corporate purposes” and replaces the company’s current unsecured $480 million operating line. GE Corporate Financial Services will act as administrative agent for the credit line, and work with Bank of America as lead arranger. Inventory at the end of the first quarter was valued at $1.7 billion.

Oak Brook, IL — Ace Hardware has struck a partnership with paint supplier Pratt & Lambert, allowing the co-op’s members to expand their paint lines into a higher-end price point. By November, Pratt & Lambert, one of Sherwin-Williams’ architectural coating brands, is scheduled to start supplying its Accolade and Red Seal lines to Ace dealers.

Eighty Four, PA — 84 Lumber is opening three stores this month, including one in Montgomery, AL. The building centre chain operates eight other locations in Alabama, including Albertville, Bessemer, Chelsea, Huntsville, Irondale, Northport, Pelham, and Pell City. The building centre, the company’s 449th, is more than 40,000 sq.ft. in size. The other two new outlets are in Gainseville, FL and Cartersville, GA.

Boise, ID — Timber and paper giant Boise Cascade is making a strategic repositioning to migrate into the office supply business with the announced acquisition of OfficeMax Inc. for more than US$1.5 billion. The move will provide alternatives to the company’s ailing paper business and expand on the office supplies business that already exists in Canada. Boise is paying a 25% premium over the July 12 closing share price, and the deal is expected to close in the fourth quarter.

Nashville, TN — Tractor Supply Co. had a 50.3% increase in profitability during its second quarter, with net income reaching US$27.4 million, from US$18.2 million in the prior year period. Net sales in the second quarter grew 14.6% to US$449.4 million, compared with US$392.0 million last year. Same-store sales increased 1.2%. During the second quarter, the company opened 13 stores.

Tel Aviv, Israel — ZAG, a division of Stanley Works that is considered the world’s leading supplier of toolboxes, reportedly has agreed to purchase the toolbox business from an Israeli rival, Keter Plastics, for US$30 million. The pact calls for ZAG to acquire Keter’s toolbox business, and Keter to continue making the boxes for ZAG as a sub-contractor.

Anthony Sabo has been named general manager of the rental business at TruServ Corp. Bringing 15 years of rental experience to the position, Sabo was most recently director of fleet operations for United Rental in Greenwich, CT. Now he will manage TruServ’s in-store and stand-alone rental businesses: Just Ask Rental, Grand Rental Station, Taylor Rental, and Party Central. He will report to Fred Kirst, vice-president of maintenance repair and operations for TruServ’s Rental Division and Home & Garden Showplace.

Wholesale sales edged up 0.2% in May with $35.9 billion in goods and services sold, reports Stats Canada. The uptick ends three consecutive months of contraction. Since the start of 2003, sales have fallen an average of 0.1% per month. Despite the weakness in sales since the start of 2003, total sales for the first five months of the year were up 6.1% over the same period of 2002.

Retail sales in the U.S. grew by 0.5% in June to US$310.4 billion, says the U.S. Commerce Department. After flat sales in May, the June increase was the biggest gain since March. Excluding automobiles, retail sales were actually US$236 billion, up 0.7% from last month and up 3.8% from June 2002.

Mitre 10 has more than 900 stores throughout Australia and New Zealand. Now it wants to add up to 25 big boxes under the MEGA banner.

Leduc spent eight years at Réno-Dépôt, and was with the company during its efforts to transform itself from a traditional chain of building centres in the Montreal area into a big box player. Leduc started out as a store manager in Quebec and then Ontario when Réno-Dépôt rolled out The Building Box, its banner for English-speaking Canada. By the time he left, he was director of logistics and supply chain for Réno-Dépôt.

Now he’s helping the Kiwis to battle the arrival of Bunnings, the largest home improvement chain in Australia, with 110 warehouse stores, 100 traditional stores and about 14% of the market there. Bunnings already has a presence in New Zealand. Bunnings’ owner, Wesfarmers, bought the Hardwarehouse chain in 2001 and converted them to big boxes, including three in New Zealand. The retailer will open another store, this one in Christchurch, in October.

The arrival of the big box is being met with some incredulity. “My belief is that they are struggling with the economies of scale in a country with a population of only four million,”” says Ross Middleton, group editor of Marketplace Press Ltd., which publishes New Zealand Hardware Journal. “My contention has always been that big boxes are not suitable or sustainable in this country.”

This isn’t the first time Mitre 10 has relied on Canuck expertise. The company’s banner and look were developed by Toronto-based The Watt Group back in the mid-80s.

Staying top-of-mind with retail, DIY and pro customers is a huge challenge. Join Meadwell over lunch and find out how to meet that media awareness challenge head on. With more than 30 years of marketing, communication and branding experience for clients that include General Foods, CIBC, Sun Life, Bell Canada and Molson Breweries, he will deliver valuable pointers on optimizing any company’s brand and increasing media awareness.

Hardware Merchandising has partnered with Hardlines to present this important session, which will be part of our incredible two-day Conference Series. The event will be available at no charge to registered delegates of both the Hardlines Retail Strategies Symposium on September 3 and the Hardlines Marketing Conference on September 4. To book your seat, contact us at 416-489-3396.

Atlanta, GA — Home Depot continues to look in southern Florida for a location where it can place a distribution centre that local development sources say will be between 500,000 and 750,000 sq.ft. in size.

The Palm Beach Post reports that the retailer is considering several locations, including Port Everglades and the Palm Beach Park of Commerce, where Walgreen’s, the drug store chain, currently operates a large facility.

However, the South Florida Business Journal has already reported that Home Depot has gotten cold feet about the Port Everglades location, where it was expected to signed a 30-year lease for 54 acres by this month. The newspaper reported that Home Depot, which is working through Industrial Developments International, is also considering the Beacon Lakes industrial park in Miami-Dade County.

Housing starts had dropped slightly in May, to 197,900 units seasonally adjusted, but they increased again a month later, hitting 210,400 seasonally adjusted in June.

Year to date, overall actual starts in Canada are up 2.6% over the first half of 2002. Actual urban multiple starts have increased 12.6% when compared with the same period in 2002. However, year to date, actual urban single starts are down 4.7% compared with the first six months of 2002.

So far this year, housing is at 213,800 units seasonally adjusted, putting starts ahead of the CMHC’s forecast of 205,500 for 2003. As a result, Dugan expects a bit of slowing in the second half of the year to conform to the CMHC forecast. Starts for the year to date are up 5.3% over the 203,050 units seasonally adjusted in the first six months of 2002.

“The pace of activity in Canada’s housing market is just great,” says Dugan. “In spite of some mixed signals coming out of the economy, the key drivers for housing markets – labour markets, consumer confidence and interest rates – continue to ensure that the housing market remains at a high level.”

Looking at markets regionally, the only area where urban single starts actually fell in June was in British Columbia, down 3.8%. The biggest boost in starts there came from urban multiples, especially in the Vancouver area, increasing 11.0% to 82,800 units seasonally adjusted in June 2003, from 74,600 in May.

Carol Frketich, British Columbia/Yukon regional economist for CMHC, says that, despite the drop in single starts, the decline is nowhere near what had been forecast. “What we’ve been seeing to drive year-to-date singles in B.C. is the super low interest rates and the market tapping into a lot of pent-up demand.”

For the rest of the year, she expects single starts to plateau and multiples to keep increasing. June singles hit 10,200 seasonally adjusted and multiples reached 10,800. Year to date, multiples in B.C. are up 20.8% and singles are up 17.2%. “Combined starts in this province are up almost 19%,” she points out, noting that the housing market remains very healthy – and a key factor in the growth of the province’s economy.

Elsewhere in the country, the biggest increase from May to June was in Ontario, where starts were up 13.5%. Multiples were up 28.2% seasonally adjusted from May, while singles were up 3.9%.

Unlike B.C., however, total starts from January to June in Ontario were down 2.4%, compared with the same period in 2002. Seasonally adjusted starts for the first six months were down 1.9%.

Norwalk, CT — As of last Monday, the two organizations mounting industry hardware shows in 2004 were able to start selling booths for their respective events.

Both Reed Exhibitions, based here, and the American Hardware Manufacturers Association, in Schaumburg, IL, are partners this year in the National Hardware Show, which takes place August 9-11 in Chicago. But their partnership ends with this year’s show; in 2004 they’ll both have shows of their own. Reed continues with the National Hardware Show name, mounting a show in Las Vegas from May 10-12, 2004, while the AHMA will keep the venue, McCormick Place in Chicago, with the AHMA Hardware Show, April 18-20.

According to Robert Cappiello, industry vice-president for the National Hardware Show, in the past week his team was able to sign up more than 200 exhibitors and fill close to 50,000 sq.ft. of space. “For the first week,” he says, “I can’t complain.”

Both organizations are looking to gain converts from the existing show. However, that show’s base of support has shrunk over the years, and at aproximately 500,000 sq.ft., is less than half the size it once was. The AHMA’s own membership comprises a percentage of the existing show, a factor expected to add to the support of its own show in 2004, which it touts as “the industry’s official show.” It already has the support of several retail organizations, as well as the U.S. Department of Commerce and its “International Buying Program.”

However, Reed’s Cappiello says many of the exhibitors that have signed up for his event are in fact companies that had already opted out of the existing show. “One-third of our exhibitors are not currently at NHS,” he says. “To have that many people returning is a big deal.”

William Farrell, president and CEO of the AHMA, was not available for comment at press time.

Colder weather last month affected Sears’s home appliance sales, especially air conditioners. That category has emerged as a primary battlefront in Sears’s efforts to cling to its market share in appliances, which has been eroding in recent years due to competition from home improvement big boxes. Sears captures nearly 39% of the US$36 billion appliance market, but that’s down from 41% in 2001. Lowe’s, now the number-two seller of heavy appliances in the U.S., and, to a lesser degree, Home Depot, have been pinching the Sears appliance business, which has led the mass merchant to cut its prices and match those of its big box competitors for the first time.

Sears is also is trying to reduce its warehousing and delivery costs by encouraging more customers to take home their appliances on the day of purchase.

Atlanta, GA — Home Depot‘s CEO Bob Nardelli wants his company to become more than just a DIY retailer. He foresees a role as a “home aggregator,” supplying both goods and services for every aspect of home improvement, according to a report in the Financial Times. With more than 1,500 stores, the company is fast reaching saturation, and the new initiative should open doors to a US$500 billion industry. He expects the company’s financial stability and credit terms to appeal to larger contractors, and he also anticipates moving the company into other at-home services, including installing water treatment systems or at-home power generation.

Bentonville, AR — Wal-Mart Stores Inc. reported net sales in June of US$24.64 billion, up 11.1% from the same period a year earlier. Year-to-date sales were US$101.96 billion, up 10.2% from US$92.50 billion a year earlier. The Wal-Mart division’s sales for the five-week period were US$16.70 billion, up 9.5%. The division’s year-to-date sales reached US$69.24 billion, up 9.3% over US$63.40 billion during the same period a year earlier. Sam’s Club sales for the five-week period were US$3.38 billion, up 8.0 %. Club sales for the twenty-two weeks were up 7.4%.

Issaquah, WA — Costco Wholesale Corp. reported net sales of US$4.28 billion for the five weeks ended July 6, 2003, up 11% from US$3.85 billion a year earlier. For the first 44 weeks of its 2003 fiscal year ended July 6, 2003, the company reported net sales of US$34.95 billion, an increase of 9% from US$32.00 billion during the same period a year earlier.

London, England — Kesa Electricals had a healthy introduction to the London and Paris stock exchanges last week. Made up of the former Kingfisher electrical retail chains, Kesa began trading as a spin-off of parent company Kingfisher plc following a successful demerger of the Kesa unit. Kesa operates 790 stores in seven European countries, with sales of around £3.4 billion.

London, England — Kingfisher Plc has sold off its French specialist builders merchant business, Dubois Materiaux, to Point.P, a division of Saint-Gobain Building Distribution. The deal is worth for 100 million euros (C$157 million). Proceeds from the sale, which is expected to close by fall 2003, will be used to reduce Kingfisher’s debt. The company says it wants to focus on large-scale, mass merchandise home improvement retailing through its B&Q, Castorama and Brico Depot banners.

Beijing, China — Wal-Mart opened its first club store in this city last week, and has plans to open at least two more. Wal-Mart already has 26 outlets in China, including four existing Sam’s Club stores.

Boca Raton, FL — Spear & Jackson, a vendor of garden tools with world headquarters in Sheffield, England, has made a deal, through its French division, with OBI, one of the largest home improvement retailers in Europe. The deal calls for Spear & Jackson to supply a new line of garden tools to OBI‘s 27 stores in France.

Consumers spent a total of $68.6 billion on goods and services in the first quarter, says Stats Canada, up 4.7% from the first quarter of 2002. Year-over-year spending in retail stores in the first quarter was up for all major commodity groups, except automotive. Despite following a 4.9% year-over-year increase in the fourth quarter of 2002, these gains were the slowest since the third quarter of 2001, when sales were affected by the events of September 11. Consumer spending on home furnishings and electronics reached $5.2 billion, up 1.4%. Within the home furnishings and electronics commodity grouping, sales of indoor furniture declined 2.9%. Spending on home furnishings (floor coverings, draperies, bedding and home decorating products) was up 2.9% and sales of major appliances rose 3.7%.

New house prices continued their climb in May, as the New Housing Price Index reached 116.0 (1997=100), up 0.6%, from April. According to Stats Canada, this index of contractors’ selling prices increased 4.4% on a 12-month basis. A favourable housing market and higher prices for labour and land continued to push prices up nationally. Land increases were observed in seven of the 21 urban centres surveyed. St. Catharines-Niagara, ON led the way with an increase of 1.3%, followed by increases of 1.1% in Toronto and Saint John-Moncton-Fredericton. Significant increases were observed in Vancouver (+0.8%) and Hamilton, ON (+0.6%).

Affected by bad weather, the value of U.S. construction projects under way in May fell 1.7% from April to US$869.8 billion seasonally adjusted, according to the U.S. Commerce Department. That’s the third monthly decline this year. Spending on new residential housing units reached US$322.1 billion seasonally adjusted in May, 0.7% below April’s estimate of US$324.5 billion. Non-residential building construction dipped 0.4% US$157.0 billion.

U.S. wholesale inventories in May were US$289.3 billion, down 0.3% from April but up 2.3% from the same period a year ago. Sales were US$233.4 billion, down 0.5% from last month but up 2.6% from May 2002. May 2003 sales of merchant wholesalers were US$233.4 billion, down 0.5% from April, but up 2.6% from May.

Leaving concerns about shareholder value to president and CEO Wayne Sales, CTR president Mark Foote has been looking carefully at the stores themselves – and how to build both traffic and purchases. The result of corporate surveys – and a lot of internal reflection – has resulted in a renewed focus on the customer.

Foote is trying to figure out how to increase the customer experience at CTC stores, especially in light of some troubling factors. First of all, same-store sales have been below industry average for years, with growth coming largely from new or expanded stores. But those expansions and refits are coming to an end within the next three years. Also, customers’ shopping baskets have gotten smaller even as the frequency of their visits has dropped.

As it turns out, each different business within the store – for example, automotive and sporting goods – serves as a distinct destination for shoppers. So the company wants to encourage more cross-over shopping between these departments. One hurdle, though, has been the emphasis in its flyers on convenience and day-to-day items, such as cleaning products. These products build traffic and repeat customers, something Sales has always believed is important to compete against the likes of Wal-Mart. But the company is faced with the challenge of moving a customer who has come into the store for Comet Cleanser on special to make a more upscale purchase, such as the higher end Persona housewares or Mastercraft Maximum power tools.

According to CTC spokesperson Jennifer Sexton, the new strategy ties in with the company’s new store positioning, which will be realized with its “20/20” store concept that rolls out this fall. The initiative is building on the “start” positioning of CTC – as the starting point for repair and renovation projects. “It’s just evolving that and going along further from where we’ve come from.”

The solutions, which will be unveiled by Foote at a senior management meeting for the retail division later in July, include more staff training through its e-learning initiative, as well as more boutiquing and cross-merchandising on the retail floor to get people to do more than just convenience shopping. As more space is opened up in the stores under the 20/20 concept, more attention will be given to housewares and home décor, in an effort to attract more female shoppers – and increase the size of the consumer purchase.

After the management team digests the new customer-first mission, the strategy will be delivered to the dealers at their fall market in October.

Toronto, ON — The Canadian Retail Hardware Association has launched a new customer loyalty program for its member retailers. Called ToolPoints, the initiative enables customers to collect points at store level and redeem them for prizes during specific promotional events.

Developed with Charles Marketing Group C.M.C., a program is set up with the retailer tailored to that retailer’s specific business needs. The promotion-specific program allots points to customers to build return traffic for a retailer over the course of a store relocation, seasonal sale or a grand opening. It’s supported by heavy in-store signage, price reductions and a local direct mail campaign.

At the True Value store in Guelph, ON, the program was applied to a four-week summer sale to unload excess inventory. According to Don L’Heureux, owner of Guelph True Value Hardware, the program increased sales by 14 times on the opening day of the event. Humbertown True Value in Toronto also used the program, while the True Value in Schomberg, ON is about to try it, as well.

On July 1, B&D, based here, and Masco, based in Taylor, MI, announced they had signed a letter of intent calling for B&D to buy Weiser and Baldwin, two businesses that generated US$250 million in revenue in 2002, or about 16% of Masco’s sales from its decorative architectural products group (which, by the way, was the company’s highest profit margin group last year, at 21.2%.)

Masco, which has owned Baldwin since 1982, and has owned Weiser since 1987, has a well-earned reputation for its aggressive acquisition and disposal of its business properties. It has been telling investors and analysts over the past several weeks that it is evaluating all of its divisions to see which parts of its corporate network are candidates for expansion or for sell-off, according to Samuel Cypert, a Masco spokesman.

“We think this deal makes sense from a logistical, marketing and purchasing standpoint, and will ultimately benefit consumers,” he says.

For B&D, Weiser and Baldwin would fill out its price and product assortment in the security hardware category. Barbara Lucas, a spokesperson for B&D, noted that Kwikset, the best-selling lockset brand in the U.S., is sold primarily as an opening price point, although recently that brand has been expanded to include mid-priced models as well as an upper-end line called Society Brass. Weiser is generally marketed as a mid-priced lockset line and Baldwin Brass as a premium line.

There could be manufacturing synergies in this deal, too. Weiser, which is based in Tucson, AZ, makes its products in Nogales, Mexico. B&D is currently making parts for its Kwikset line in Mexicali, Mexico, said Lucas. (Weiser’s Canadian distribution is out of Burnaby, BC).

It will be interesting to see, as well, if this deal gives B&D a better shot at regaining shelf space in Home Depot’s stores. Last year, Depot reset its door hardware department chain wide, and gave Schlage Lock the dominant position. Kwikset and Baldwin currently command four of the department’s 12 sections. Home Depot currently does not carry Weiser.

The Atlanta Business Chronicle reported last week that Cal/OSHA notified Home Depot in June that its California stores may have safety problems. The publication also reported that Cal/OSHA is reviewing Home Depot’s accident records over the past several years.

Home Depot continues to be plagued by news that its warehouse home centres present a safety risk to employees and shoppers. Last May, a six-year-old boy was crushed to death by falling patio doors in Home Depot’s store in Pharr, TX. And OSHA records show that, since 1999, twice as many employees – 39 – have been injured in Home Depot’s stores nationwide as those injured in Wal-Mart and Lowe’s stores combined.

Home Depot officials told the Chronicle they were unaware that OSHA was directing more attention at the chain, saying that the company continued to enforce safety standards in all its stores.

Cal/OSHA operates independently of the federal agency, and many of its rules are more stringent that the national standards.

The Chronicle reported that three employees in Home Depot’s stores in California had been injured by falling merchandise over the past six months, despite a law passed in the state last year that requires warehouse stores with racking higher than 12 feet to install safety netting across higher-stocked products and to establish customer-free “safety zones” when forklifts are loading and unloading stock.

Leading the pack, of course, was the world’s largest corporation, Wal-Mart, whose revenue jumped more than 12% in 2002 to US$246.5 billion, and whose earnings rose 20.5% to US$8 billion. Home Depot remained the country’s second-largest dealer, followed by the supermarket chain Kroger, the discounter Target Stores and the general merchant Sears.

For the second consecutive year, Sears dropped down a spot on Stores‘ list.

The rest of the Top 10 was comprised of the membership club Costco, the supermarket retailers Albertson’s and Safeway, and the mass merchants JC Penney and Kmart.

Other home improvement dealers that made Stores‘ Top 100 were Lowe’s, which finished 12th, Menard’s at 43rd, Sherwin-Williams at 60th, and 84 Lumber 93rd. Had it been included, Stock Building Supply would have ranked 69th.

Toronto, ON — Cameron Ashley Building Products has changed its name to Guardian Building Products Distribution Canada Inc. The name change is in keeping with the company’s move to consolidate distribution entities within the Guardian Building Products group under one brand name, says Canadian president Bruce Allen.

Toronto, ON — Canadian Tire began operating a bank on July 1st. The move is expected to streamline the retailer’s branded Options MasterCard program, which, until now, has been regulated separately in each province and territory, adding to administrative costs. The launch of Canadian Tire Bank, following federal approval under the Bank Act, will reap CTC an estimated $6-$8 million annually once the implementation costs are covered. Anytime the CTC Options MasterCard is used, even at another store, users will qualify for the company’s loyalty building Canadian Tire money.

Atlanta, GA — Home Depot recently purchased an integrated merchandise and assortment planning software solution from Marketmax, which provides retail planning and optimization software. According to Home Channel News, the program will allow Home Depot to analyze and tailor product assortments and fine-tune its inventory forecasting.

London, England — Kingfisher plc reported last Friday that its board of directors has approved the demerger of Kingfisher’s electrical business, Kesa Electricals plc, including the consolidation of Kingfisher shares. The demerger should become effective today, and Kesa Electricals will be listed on the London Stock Exchange, with a secondary listing on the Premier Marche in Paris. As a result of the demerger, Jean-Noel Labroue has resigned as a director of Kingfisher to become CEO of Kesa Electrical.

Bentonville, AK — The Arkansas Supreme Court has overturned a decision that barred labour unions from soliciting in Wal-Mart stores. The chain has been the target of a number of unions, most recently the United Food and Commercial Workers. While Wal-Mart says it’s still reviewing the court’s opinion, the union hailed the court’s decision as a clear victory.

Toronto, ON — HGTV and Home Depot Canada have begun auditioning hosts for a one-hour prime-time special that will air on HGTV in fall 2003. Called “the Superstar Challenge,” they say they’re simply looking for people with a knack for fix-up – and a flair for the camera.

Robert Walker has joined CanPly, the Canadian Plywood Association, as Plywood specialist, Ontario and U.S. A 30-year veteran of the building materials distribution industry, his background includes working for AFA, Metric and Canfor. With the new appointment, the Ontario office of CanPly has moved. The new address is: 44 Gretna Drive, Brampton, ON L6X 2E7. (905-457-9519; walker@canply.org)

The Canadian economy contracted in April as it shrank by 0.2% from March. The April shrinkage was the first monthly decline since Sept. 11, says Statistics Canada. Consumer demand also slowed abruptly in April.

The U.S. economy has defied expectations of a quickening economic recovery. Manufacturing activity continued to shrink in June and construction spending dropped in May by the largest amount in a year. Meanwhile, the U.S. Commerce Department reported that the seasonally adjusted annual value of construction projects under way in May was US$869.8 billion, a 1.7% decline from April. This also surprised analysts, who had on average forecast a 0.3% increase.

The U.S. economy lost more jobs in June as the unemployment rate shot higher, the U.S. Department of Labour reports. Non-farm payrolls were down by 30,000 jobs during the month. Economists had been expecting a decline of about half that size. The unemployment rate, meanwhile, rose sharply to 6.4% in June, from 6.1% the month before.

Besides that, both sides expect greater synergies by virtue of the simple fact both TruServ and Sexton are headquartered in Winnipeg.

Over the years, TruServ has made similar supply agreements with other buying groups, including Castle Building Centres. About 40 Castle dealers currently fly both the True Value and Castle banners, and seven Sexton already customers operate under a dual-banner arrangement.

However, the latest deal is structured to make more programs available to Sexton dealers without having to sign on for a full bannered program. It’s all part of TruServ’s effort to offer a wholesale hardlines alternative to independents. “We’re not necessarily going to provide a full program, because that’s what the groups do,” says Ray Falkenberg, vice-president business development and marketing for TruServ Canada. “They can use TruServ as a wholesaler and can then grow within the program, if they choose.” He stresses that even if an independent takes on a full bannered True Value program, that program will be managed through the buying group, rather than requiring the dealer to join TruServ.

In its efforts to become a full-line national wholesaler, TruServ has been attempting since late last year to develop customers outside its base of members dealers, wooing independents from other buying groups. In fact, TruServ Canada already supplies about 25 Castle dealers on a similar basis, and two Sexton members have just committed to the new supply agreement on a strictly wholesale basis. Both dealers have said they would consider a full banner program down the road.

“We’re just trying to adapt to the marketplace, so we have a bannered program and a non-bannered program,” Falkenberg says. “It brings us in as a serious player. We really feel there’s a demand out there outside of Sodisco-Howden to supply these stores.”

Fort Wayne, IN — The previously announced decision of Sodisco-Howden Group to switch its Do-it center dealers to Ace Building Centre got a nudge from the banner’s licensee, Do it Best Corp. Considering that Sodisco-Howden purchased the assets of Ace Hardware in Canada, a major competitor of Do it Best, the U.S. co-op retailer has decided to terminate its agreement with Sodisco-Howden.

“It was our feeling that [the Ace purchase] was not consistent with our goals in Canada,” says Bill Zielke, vice-president of marketing and international development for Do it Best. “As a result, we sent a formal letter to Sodisco-Howden expressing our desire to terminate the agreement.”

Jos Wintermans, president and CEO of Sodisco-Howden, disagrees that his deal with Ace is inconsistent with the Do it Best agreement. “We certainly thought there was no violation and we looked at the agreement carefully before doing the [Ace] deal,” he says. In Canada, both the Ace and Do-it center banners are operated under license by Sodisco-Howden, a publicly traded for-profit wholesaler. In the U.S., these banners are owned by dealer-owned co-ops.

Although Sodisco-Howden services only about 60 Do-it centers in Canada, they are typically strong building centres that generate a lot of sales for Sodisco-Howden. Zielke affirms that his company had been pleased with the arrangement in the past, which managed to provide Do it Best with some brand recognition in Canada. It has also enabled the retailer to co-exist with two other Canadian co-ops, Home Hardware and Rona, with whom it shares membership in a hardware buying group, Alliance International LLC. “We were really comfortable with the Sodisco-Howden agreement until the Ace deal.”

Does the termination of the deal with Sodisco-Howden signal any further interest by Do-it Best in moving north of the border? “We’ll have to take a look at the Canadian market,” says Zielke, which includes looking at other licensing agreements or some other form of presence in Canada. “Anytime you incorporate change you have to take the opportunity to re-evaluate your goals and opportunities.”

In an interview with Reuters, Taylor said Home Depot is looking at New York’s borough of Manhattan “for the first time in quite a while.” Several years ago, rumors circulated within real estate and retail circles that the retailer was seriously looking at the land vacated by Alexander’s in midtown Manhattan. The retailer has multiple stores in every other borough, including its smaller urban neighborhood store format in Brooklyn and Staten Island.

It is highly likely that Home Depot would use the smaller format in Manhattan, said Taylor. He told Reuters that the company has already identified several prime locations, although he did not specify where. The urban neighborhood format ranges from 60,000 to 80,000 sq.ft.

Hardlines confirmed that Sunshine Ace has accused Home Depot of infringing on its trademarked slogan. It is seeking an injunction that would bar Home Depot from using the tag in any form. Sunshine is seeking more than US$500,000 in damages and wants Home Depot to open its books to reveal how much profit it has made during the time it has used the slogan.

Jerry Wynn, Sunshine’s president, told Hardlines that his company had informed Home Depot about its objections to the use of its tag on March 19. Home Depot asked for more documentation “and we haven’t heard from them since,” he says. Jennifer Whitelaw, the attorney representing Sunshine Ace, says her client has a federal protected trademark, and she has received “no substantive response” from Home Depot, which has 20 days from June 25 to answer the complaint.

Colour questions were next on the list, representing 42% of the design questions posed during the tour.

Surprisingly, the kitchen and bathroom were at the bottom of the list of rooms designers were asked about, garnering only 18% of questions. The room with the most design-related questions was the living room (28%), followed closely by the den (23%) and master bedroom (19%).

Sault Ste. Marie, ON — City council here has given approval for rezoning that will open the doors for the city’s first Home Depot. The retailer has been considering the site for about three years, choosing it over the Michigan Sault area, primarily because of the greater population base. Although city council’s approval was unanimous, there is a possible stumbling block to an early start on construction if the rezoning has to go for approval by the Ontario Municipal Board.

Vancouver, BC — Weyerhaeuser Co. has announced that five Crown timberlands operations and five sawmills on the coast of British Columbia will take periods of downtime in July. The company blamed weak market demand, falling prices resulting from a general oversupply of lumber, high costs associated with operating on the B.C. Coast, softwood duties, and a rapidly rising Canadian dollar. All five of Weyerhaeuser’s Crown timberlands operations on the coast, including West Island, North Island, Stillwater, Port McNeill, and Queen Charlotte Islands, will be down for the month of July. On the mill side, Somass and Island Phoenix Division will be down for four weeks, Alberni Pacific division for three weeks, New Westminster for two weeks and Chemainus for one week.

Easton, MD — Pettinaro Enterprises, a real estate company based in Wilmington, DE, has paid US$4.9 million to acquire Black & Decker‘s 58-acre, 245,910-sq.ft. manufacturing complex here. Previously B&D, the Towson, MD-based toolmaker, had announced its plans to close the plant as part of its ongoing efforts to move at least 75% of its manufacturing offshore to Asia or the Czech Republic. B&D had listed the property at US$5.9 million, according to the Washington Post. B&D is working with the developer to find new tenants for the facility.

Chicago, IL — Fresh from bankruptcy, Kmart Holding Corp. posted a loss in the first quarter ended April 30 of US$862 million, but the retailer’s loss narrowed from the US$1.44 billion loss it reported a year earlier, and its gross margin improved, sending its stock up more than 20%. However, same-store sales fell 3.2% the quarter.

Bellingham, WA — Fluid Enterprises, a subsidiary of Harbour Group, has acquired The Gonzo Corp., a Massachusetts-based manufacturer of branded cleaning products. Gonzo will become part of Harbour’s Fluid Enterprises group, which includes Homax, Krusin International and Tile Care Products.

New York — Bed Bath & Beyond Inc. has reported a first-quarter profit of US$57.5 million, a 24% increase over US$46.3 million during the same period a year earlier. Sales rose about 15% to US$893.9 million from US$776.8 million a year ago. Same-store sales were up 4.4%.

Paul Hètu, who has served as vice-president of advertising and communications at Réno-Dépôt Inc. since 2001, is taking over as vice-president in Montréal of the Canadian

Cam Silverson is retiring from Tremco Retail Products effective July 1. He’s been with the company since 1968 and vice-president and general manager since 1977 … Tony Duffy has been appointed the new vice-president and general manager, replacing Silverson. He was formerly vice-president of sales and marketing … Tom Lee has been named director of field sales. He was formerly national accounts manager. Reporting to Lee are: Monique Arsenault, customer service manager, and Chris Hatfield, field sales manager. Reporting to Hatfield are Rod Bubel, district manager for Western Canada, and Michel Olivier, district manager for Quebec … Dominic Iuticone is now director of national accounts at Tremco. He was promoted from national accounts manager … Replacing Iuticone as national accounts manager is Mark Gibb, who has joined Tremco from Norton Canada, where he was national accounts manager … Lawrence Genga has joined Tremco as trade marketing manager. He comes over from Dundas Jafine, where he was marketing manager. (1-800-387-9879)

Weyerhaeuser Co. has appointed Fred Rowson vice-president, Alberta. Rowson will continue in his role as Softwood Lumber area manager for Weyerhaeuser’s three Alberta lumber mills in Grande Cache, Drayton Valley and Grande Prairie, and its lumber mill in Big River, SK … Rowson replaces Cathy Slater in her role as leader of the company’s Alberta Management Council. Slater has moved to Weyerhaeuser’s Port Wentworth, GA mill as vice-president and pulp mill manager.

Walter Hachborn, president and co-founder of Home Hardware Stores Ltd., has been presented with the Queen’s Golden Jubilee medal. Lynn Myers, MP, Waterloo-Wellington, presented the medal last week on behalf of the Governor General of Canada. The medal is awarded to Canadians who have made a significant contribution to their fellow citizens, their community or to Canada, and it’s part of the Jubilee year celebrations organized by the Department of Canadian Heritage. (519-664-2252)

Higher property prices in the second quarter of 2003 helped to slow housing sales to normal levels in some parts of the country, says a mid-year report released today by Royal LePage Real Estate Services. However, markets on the east and west coasts experienced some of the heftiest price appreciation year-over-year. Strong housing activity in 2002 resulted in best-ever sales performance in many markets, but Toronto, Ottawa and Calgary are now trending towards more balanced conditions, says the report.

The composite leading index rose 0.2% in May, the sixth straight monthly increase. Half of the components edged up or were stable in May, while five components fell, one more than in April. The financial market indicators took over from household spending in offsetting the weakness in manufacturing that arose from slow export demand. Within household demand, only furniture and appliance sales continued to expand. The drop in the housing index in March and April moderated to just 0.1% in May, as existing home sales rose for the first time in four months.

U.S. consumer confidence went flat in June following a slight improvement in May, reports the U.S. Conference Board. The consumer confidence index stood at 83.5 in June, down 0.1 from May. However, consumers are optimistic about the future: the expectations index rose to 95.9 from 94.5 in May.

Housing sales in the U.S. are expected to rise this year, says a report from Bloomberg News. About 1.08 million new homes are forecast to be sold this year, up from 973,000, a record high set in 2002. Sales of existing housing rose 1.2% last month to 5.92 million annually adjusted, from 5.85 million in April.

These were just a couple of the tips provided recently by some of the key buyers from Canada’s leading home improvement retailers. They shared their experience and insights with almost 100 vendors who gathered for the third Hardlines Meet the Buyers Seminar at the Delta Toronto Airport West Hotel.

Pam Pike from Canadian Tire, Steve Lunny from Home Depot Canada and Bob Masich of Sears Canada talked frankly about the challenges they face sifting through proposals from new and existing vendors who want their products listed. Marc Dufresne, executive vice-president, purchasing and logistics for Rona Inc., gave additional insights, with an outline of what to expect as his company awaits the closing of its acquisition of Réno-Dépôt.

Even though they all compete against each other, these buyers came together to give their input and their time – something they all, in fact, have very little of to spare. “It’s a harsh reality,” said Steve Lunny of Home Depot Canada. “But we don’t want to have three meetings when we could have had two.” Get it right the first time, they exhorted. You may not get a second chance. Show you value the buyers time – and be prepared. As Bob Masich at Sears Canada pointed out, “We can make a fast decision, but we need the information to do this.”

Masich also stressed the concept of long-term planning. “Your role in this is to be my partner and help develop programs we can sell my customer,” he said of potential new vendors.

At Canadian Tire, development of the new 20/20 retail program, which will be rolled out this fall, will open up more space on the retail floor for new products, especially home décor. Pam Pike encouraged vendors of these products to take advantage of this opportunity. “It’s going to be very exciting,” she added.

The day closed with comments from Marc Dufresne of Rona. As senior buying executive for the company, he was in an excellent position to outline the course of the company, and its requirements to vendors. Over the next several months, Rona intends to finalize the acquisition of competing big box retailer Réno-Dépôt. Until then, said Dufresne, both companies – and both buying teams – are to be treated separately.

Dufresne parted company from his fellow buyers when it came to supplying national programs. Masich from Sears and Lunny from Home Depot both expressed their concern that potential vendors have the capacity and distribution network to supply their stores nationally. Rona, on the other hand, with a variety of store formats throughout the country, is willing to test new products in regional markets within various store formats. This way, said Dufresne, Rona can help a vendor develop their production and merchandising for more widespread rollout over time.

All buyers stressed many common themes: the need to understand the retailer they’re pitching, to be aware of the market and its competitors, and the importance of long-term partnerships based on mutual respect.

The crunch has been also given an unexpected boost to a new product from North Safety – a rubber half mask that uses replacement filters.

During the height of the epidemic, North Safety was shipping millions of masks a week. “We had the biggest three-day period in our history,” recalls Mark Baker, who is in charge of advertising and public relations for North Safety. Its biggest customer, Acklands Grainger, made a single $500,000 order one day, and went through 10,000 N95 masks in one week alone.

Through it all, demand has increased sales – but not margins. “We haven’t jacked up the price. They still sell for peanuts,” says Baker wryly.

Oak Brook, IL — Ace Hardware Corp. is developing broader hardlines assortments for dealer-members who cater primarily to professional customers.

About 950 of the buying group’s 4,900 dealer-members carry lumber and building materials in significant quantities. However, many of those dealers have been buying different kinds of hardware and in far greater quantities than consumer-oriented Ace hardware stores and building centres. Much of this sourcing comes from outside Ace’s own distribution, so the co-op wholesaler is beefing up its distribution centres with more contractor-oriented products.

“We see a lot of potential for identifying pro assortments of hardlines and finding a way to serve these dealers better,” says Amy Pellerito, Ace’s newly appointed LBM manager. However, she adds, Ace does not yet have enough sales data to construct a planogrammed hardlines program for these dealers. Such programs exist for DIY focused lines, such as the “Discovery” merchandise sets Ace has put together for its retail members in recent years. (About 215 of Ace’s LBM dealers currently participate in the co-op’s Data Warehouse program, which measures retail sales.)

Explaining the differences between the needs of retail-driven members and the pro-oriented dealers, Pellerito notes that the top 10 hardware SKUs purchased through Ace by both types of members are virtually the same, “but the next 10 are completely different.”

Ace initiated this effort only weeks after it terminated a supply agreement with Builder Marts of America, the South Carolina-based dealer services group. On Aug. 2, 1999, Ace merged its LBM division with BMA, and took an equity position in that company, which Ace has since sold back to BMA. The termination of its agreement with BMA occurred in late April, around the same time that rival TruServ Corp. terminated its noncompete agreement with BMA.

She adds that Ace is not looking to start warehousing or trading in commodities, and that dealer-members are free to buy lumber and building materials from any source. She even speculates that some dealers may decide to buy through BMA. However, Ace has struck preferred supplier agreements with at least two building products manufacturers – USG Corp. and PrimeSource – and some less-than-truckload shipping agreements with other suppliers that were not named.

Vaughan, ON — Canadian Tire Corp. opened a new 224,000-sq.ft. retail support centre last week to supply automotive products to its dealer stores in Ontario. The site, in this community just north of Toronto, employs about 160 people and has the material handling equipment necessary to support daily shipments of automotive hard parts and accessories to most Canadian Tire stores in the province. The facility will also support further expansion of Canadian Tire’s retail automotive business, both through its network of 449 associate dealers and through PartSource, an automotive parts specialty chain with 33 stores.

Atlanta, GA — Home Depot, which once balked at all the paperwork involved in becoming a supplier to the U.S. government, has been awarded a contract to supply building, repair and maintenance products to all federal agencies. That contract, which goes into effect July 1, makes Home Depot the largest retailer to have received a Hardware SuperStore Multiple Schedule contract from the General Services Administration. To meet the needs of the federal government on all levels, Home Depot is launching “The Home Depot Government Solutions Group.”

Mississauga, ON — Wal-Mart Canada has announced the next Sam’s Club opening in Canada. This one will open in the East Mall in Toronto’s west end community of Etobicoke in the fall of 2003. The 129,000-sq.ft. warehouse club will cost almost $20 million and create about 170 permanent jobs in the store. Wal-Mart Canada has already announced Sam’s Club openings this fall in Vaughan, Pickering, and Richmond Hill, ON. Another store will open in London, ON sometime in 2004.

Wilkesboro, NC — Lowe’s will follow Home Depot‘s lead and begin developing smaller stores that will fit into smaller markets of 15,000 to 35,000 households. Of the 130 stores planned for 2003, 20-25 will be these 94,000-sq.ft. prototypes. Two have already opened, one in Elkin, NC back in March and the other last month in Dickson, TN. Lowe’s big boxes typically measure 116,000-sq.ft. and cost close to US$17 million to build and US$5 million to stock, and generate on average about US$33 million in sales per year. The new stores, on the other hand, ring in at about US$12 million in construction costs and stock about US$3.5 million in inventory. Lowe’s expects the prototypes to generate US$20 million to US$25 million in sales annually.

London, UK — Kingfisher plc is continuing its efforts to pare down the company with the proposed demerger of Kesa Electricals and its separate presence on the stock exchange. With 790 stores, Kesa is Europe’s third largest electricals retailer. Pending shareholder approval of the demerger, the division is expected to start trading as a separate company on July 7. Kingfisher shareholders will continue to hold their shares in Kingfisher and will receive a direct pro rata interest in Kesa Electricals.

Jacksonville, TX — When employees of a Wal-Mart meat department tried to organize a union in 2000, Wal-Mart simply closed the butcher department in that store and switched to packaged meat. Now an administrative law judge has ordered the retailer to reopen the butcher shop – and bargain with unionized butchers whose jobs disappeared when the chain made the switch. Wal-Mart downplayed the judge’s decision, calling it “limited.”

Klamath Falls, OR — Jeld-Wen, a privately owned door and window maker with Canadian headquarters in Winnipeg, MB, has developed a campaign to unite its many brand names under a single banner. The company, which has been on the acquisition trail for years, currently has 27 brand names, says a report in the New York Times. But in an ad campaign on television, in print and through the Internet, which began last week, the company is spending more than $10 million to reintroduce itself under the Jeld-Wen name, retiring brands such as Aurora, Contours, Corinthian, Donat Flamand, DoorCraft, Elite, Energy Saver, Norco, Prestofix, ProBilt and Willmar.

Pat Bennett has joined Rona Inc. as senior operations director for traditional stores in Ontario. Bennett was formerly vice-president of sales at Ace Hardware Canada until that company was taken over by competitor Sodisco-Howden Group. Before that, he served as vice-president operations at Home Depot Canada. (514-599-5100)

Thomas Glenn has been elected chairman of the board of Ace Hardware Corp. Glenn is president of Ace Hardware of Chattanooga, a 13-store chain in Tennessee and Georgia … Veteran board members Eric R. “Rick” Bibens II, president of Bibens Home Center in North Springfield, VT; D. William Hagan, president and part owner of five Ace stores in northern Florida; and Richard A. “Rick” Karp, owner of Cole Ace Hardware, a three-store chain in San Francisco, were re-elected to the board … Lori J. Terpstra was elected to serve her first term. She and her husband own Rylee’s Ace Hardware, which operates three stores in the Grand Rapids, MI area. Each will serve three-year terms on the 10-member board, which helps set strategic policy and direction for Ace management.

According to Jos Wintermans, president and CEO of Sodisco-Howden, the move to switch the existing Do-it center dealers is being handled by the hardware distributor’s field reps. “The strategy here is to encourage the Do-it center dealers to convert to the Ace Building Centre banner,” Wintermans says. This, he adds, will increase the presence of a brand that is already well known in North America. Ace dealers in Canada will benefit from sophisticated store programs out of the U.S. and an extensive line of private label products.

“There are a number of reasons why someone might want to be an Ace dealer,” Wintermans says.

Do-it, on the other hand, doesn’t have the critical mass in Canada. (About 60 Do-it center dealers are strung across the country.) The banner started out as a DIY-focused home centre package developed for HWI (now Do-it Best Corp.), based in Indianapolis, IN. The program, characterized by upper and lower-case serif letters against an orange background, was developed by the Watt Group in Toronto. Watt used a similar approach, with only with upper case letters, when developing a look for Home Depot in 1978.

For now, Do-it dealers are taking a “wait-and-see” attitude. Jason Yates of McMunn & Yates Do-it center in Dauphin, MB says the dealers haven’t seen the full Ace program yet, leaving them feeling uncertain about which way to go. Yates isn’t averse to the change; he admits the Do-it banner just didn’t have adequate market acceptance because of the limited number of stores and is keen to see what Ace has to offer.

Steve Lundon, owner of Northern Do-it center in Fort Frances, ON, is a bit more wary of the proposed change. “We’ll look at it seriously, but who’s going to pay for the retrofit?” he wonders. Lundon expresses his concern about the Sodisco Howden service levels over the last few months, but recognizes they’re the only independent full line hardware wholesaler left.

Do-it Best is part of Alliance International LLC, whose Canadian members, Rona Inc. and Home Hardware Stores Ltd., are major competitors to Sodisco-Howden. Wintermans would not comment on whether his company was compelled in any way by Do-it Best in the U.S. to wind down the orange banner in Canada.

Calgary & Edmonton, AB — Robert Dutton, president and CEO of Rona Inc., did double duty in the Wild Rose Province for two groundbreaking ceremonies last Thursday. First stop was Calgary, where the planned construction of a new Western distribution centre was made official.

The distribution centre, located at 2015 60th Street, S.E., is a key part of Rona’s attempts to increase its presence and assert its commitment in Western Canada. The 300,000-sq.ft. facility will cost about $30 million and create up to 80 jobs.

Later in the day, Dutton was up in Edmonton for the ground breaking on a new Rona Home & Garden big box. The 140,000-sq.ft. store will include a 4,000-sq.ft. greenhouse next to a 29,850-sq.ft. garden centre and a big seasonal section. It will also be about 20,000 sq.ft. larger than another store, in Kingston, ON, which broke ground on May 13.

The Kingston store is slightly smaller in part because the Rona Cashway in town will remain, servicing contractor and heavy DIY customers. As a result, the new big box will have a slightly smaller lumber and building materials section. Nor can Rona’s third big box in Edmonton open with anything less than the big guns: Home Depot just opened a sixth store here last week, in the Sherwood Park area.

The newest Rona big box stores will continue to expand on the concept inaugurated in Mississauga, ON last spring. This includes more of a mix of Rona Regional and Rona big box elements, with emphasis on boutiqued departments, including paint and décor, door and window (new!) and lighting. Both stores are expected to open within a couple of weeks of each other in late October of this year.

Mississauga, ON — The Canadian Hardware and Building Materials Show is touting its next installment as the 100th, but the show is reaching back to its pre-history to do the math.

A century of shows would put its start date at 1905. In fact, the Canadian Retail Hardware Association, which owns the show, was not formed until a year later. On Good Friday, 1906, the Retail Hardware and Stove Dealers Association of Ontario was founded, which would later become the CRHA. Yet another year would pass before the association added a “trade show” component, when Guelph Stove Works became the sole exhibitor at the association’s 1907 annual general meeting.

“According to all of the history that anyone [at CRHA] has found, 1905 has been accepted for the past 99 years as the year the first “hardware show” was held in Canada. That history includes many, many photos and references in trade media to 1905 as being the first show,” explains Bob Elliott, executive director of the CRHA.

“At that 1905 Canadian National Exhibition, we do know from Hardware & Metal magazine that there was an exhibition of hardware products for “hardware merchants,” he continues. “They didn’t seem to make the same distinction between “trade” shows and “consumer” shows back then as we do now. Therefore, it seems that the first show may indeed have had members of the general public in attendance along with dealers.”

Wherein lies the confusion? The aforementioned copy of Hardware and Metal (the early name of present-day publication Hardware Merchandising) from September 1905 features a cover story encouraging dealers to attend that year’s Canadian National Exhibition. A large group of hardware and stove companies did indeed display their wares to Canadian families – alongside piano makers, tea companies, perfume makers, and sellers of canned preserves. These exhibitors included the aforementioned Guelph Stove Works, which baked cookies that attracted the attention of many of the women visiting the fair, reported the editors of Hardware and Metal magazine at the time. In fact, hardware companies had been involved in the CNE as far back as the public exhibition’s inception in 1879 and Hardware and Metal reported on these events regularly.

“Regardless, we consider this as the 100th show of the industry, no matter where the first one was held or who organized it. All those who came before us recognized it as such and we believe that history speaks for itself,” Elliott says.

Obviously, the hardware industry’s show business roots date back at least 100 years, and CHS follows in that strong tradition. Like any fine old lady, her exact age can remain a mystery. Hardlines will certainly be at the next birthday party, whatever the age of the show.

Crain’s Chicago Business, quoting unnamed sources, reported last week that Sears wanted to dispose of these assets to shore up its sagging balance sheet and to provide capital for a new strip-mall supercenter venture.

The San Jose, CA-based Orchard, a 72-year-old retailer that Sears acquired in 1996 for more than $300 million, operates stores that average 45,000 sq.ft. Last year, Orchard generated US$820 million in revenue, but has been plagued by profit woes, according to Crain’s.

Originally, Sears bought a profitable Orchard to give some merchandising and store design direction to its Sears Hardware Stores division, which at the time was foundering. However, the marriage never coalesced to Sears’s satisfaction. Attempts to duplicate Orchard’s format in the eastern U.S. have been erratic, at best, resulting in 2001 in a 55,000-sq.ft. prototype that has been rolled out to only a handful of markets.

It’s worth noting that Alan Lacy, Sears’s chairman, has all but stopped the expansion of the retailer’s other home improvement enterprise, The Great Indoors, a home furnishings retail format that at one time Sears envisioned expanding into a 150-unit operation. At the conclusion of 2002, only 13 Great Indoors had been opened.

The Orchard chain is expected to fetch US$300 million for Sears.

Home Depot becomes the second major home improvement-related company to embrace UCCnet’s services. Last year, Ace Hardware began registering its data with this organization.

In a prepared statement, Lawrenceville, NJ-based UCCnet pointed to a study conducted by the research firm A.T. Kearney which estimated that US$40 billion, or 3.5%, of total sales lost each year are due to supply-chain information inefficiencies. The study showed that 30% of items in retail catalogues have data errors, 60% of all invoices generated errors and 43% of all invoices resulted in deductions.

Home Depot and participating suppliers can register data into UCCnet’s industry-supported repository for standardized item, location and trading partner data. This system checks the data for compliance to industry standards, and will allow the retailer to synchronize its own data with its suppliers’, thereby ensuring that everyone is using identical standards-compliant information.

Within its first-quarter 2003 report submitted to the U.S. Securities and Exchange Commission, TruServ revealed that, effective April 21, it had terminated its non-compete, cooperation, and trademark and license agreements with Builder Marts of America.

On Dec. 29, 2000 TruServ sold its lumber and building materials business, consisting primarily of intangibles and inventory, to BMA, the South Carolina-based dealer services division of Guardian Building Products. At the time, TruServ explained that it had made this decision because it had concluded that BMA could provide lumber and building materials to the co-op’s members at lower cost. LBM had traditionally been a low-margin business for TruServ.

What prompted TruServ’s change of heart, and how it plans to move forward, are not clear. Bruce Schneider, BMA’s senior vp-operations, told Hardlines recently that BMA has been exploring getting into light manufacturing and installed sales, two areas that could, theoretically at least, be in conflict with the interests of TruServ’s dealer-members. Hardlines was not able to reach Terry Watson, BMA’s vp-marketing, for comment. Nor did it receive a response to an email sent to TruServ’s president and CEO Pamela Forbes Lieberman.

The supplement fees were awarded to the shutter manufacturer to cover the “risk” its attorneys took representing a company in precarious financial straits.

In recent weeks, Home Depot has been showing up as often on police blotters and court dockets as on the business pages:
oA former employee in Oklahoma was charged with stealing hundreds of thousands of dollars in merchandise using numbers from customers’ credit cards;
oAn investigation in Texas exonerated the company of criminal wrongdoing after a five-year-old boy was crushed to death by falling patio doors in the aisles of one of its stores in the Lone Star State;
oSix former and current employees in Indianapolis have filed a federal lawsuit against the retailer charging they had been discriminated against because they are African American;
oThe company paid US$300,000 to settle a suit filed by a Pennsylvania employee who alleged discrimination by Home Depot because she was pregnant;
oIn New Jersey, the chain agreed to pay fines of US$510,000 to settle a complaint filed by that state’s attorney general, whose office had investigated the chain’s practices concerning installation, advertising, refunds and delivery. The retailer participated in that investigation and, as part of its agreement, said it would revise its business practices to ensure its compliance with state consumer protection laws.

Irving, TX — Réno-Dépôt has licensed the forecasting and scheduling modules of the Timera Enterprise Workforce Management system for all company retailing operations. Réno-Dépôt had been using a manual approach to building schedules prior to hooking up with Timera.

Toronto, ON — Home Depot Canada has chosen Philips Lighting Canada as its exclusive supplier of branded light bulbs. The deal follows a similar agreement announced in the U.S. one year ago between Home Depot and Royal Philips Electronics.

Wilkesboro, NC — Lowe’s Home Improvement Warehouse has added three well-known national brands to its inventory. The Charlotte Business Journal reports that Lowe’s stores now stock a full assortment of portable and benchtop tools made by Hitachi, the Japan-based supplier. The retailer is expanding into food processors, mixers, coffee makers and juicers branded by Bosch. Also exclusive to Lowe’s is a floorcovering line called Premier developed by Living Mohawk Carpet.

Huntersville, NC — Irwin Industrial Tools announced last week a new global brand strategy to unite its contractor-grade hand tools and power tool accessories under the Irwin name. Irwin will be positioned as the primary brand for seven sub-brands: Vise-Grip wrenches, Marathon saw blades, Quick-Grip clamps, Speedbor wood boring bits, Strait-Line, Unibit step drill bits and Hanson taps, dies and extractors. Each of Irwin’s sub-brands will retain its name while sharing a common Irwin identity and endorsement.

Bill Wilson has announced his retirement from Sodisco-Howden Group. Wilson spent 32 years with the Howden Division (formerly D.H. Howden & Co.). He got his start as a Pro Hardware dealer in Toronto, but after six years sold his store to take a job with Howden in London, ON as a sales rep. Through the years he held several titles, and for the past two years served as director of national accounts, dealing with the buying groups and key national accounts (519-686-2200) … Mag Kassis has joined Sodisco-Howden Group as vice-president of sales. Working out of the Montreal head office, he will be responsible for increasing sales and improving dealer relations. He will also deal with key accounts and the buying groups, taking over from Bill Wilson, who had handled the job from Sodisco-Howden’s London office. Kassis moves to Sodisco-Howden from Fishery Products International, where he served as vice-president. (514-286-8986)

IRLY Distributors has announced its new board of directors for 2003-2004: Andy Anderson of Ashcroft has been elected president … Rex Millard of Vanderhoof has been named vice-president … the secretary is Jeff Davie of Kelso … additional directors are Carole Hamanishi (and past president) of Aldergrove, Eric Hodson of Prince Rupert, Gus MacLellan of Kelowna and Brian Tancock of Sicamous, BC.

Chicago-based TruServ Corp. has named Mimi Apelqvist director of international, reporting to Brian Kiernan, TruServ’s vice-president of retail development. Prior to joining TruServ, Apelqvist worked at Fellowes Manufacturing for six years.

The economy lost jobs for the second consecutive month in May as the national jobless rate rose to 7.8% from 7.5% in April. Employment across the country dipped by 13,100, although that figure includes a loss of 19,600 full-time jobs and a gain of 6,500 part-time positions, Statistics Canada said Friday.

Sales by merchant wholesalers in the U.S., after adjustment for seasonal variations, were US$235.7 billion in April, down 2% from the revised March level, says the U.S. Census Department. However, the rate is up 3.8% from April, 2002. Within the durable goods sector, sales of motor vehicle and motor vehicle parts and supplies decreased 1.8% from last month, while sales of non-durable goods decreased 3.6% last month, but were up 6.8% from the same month last year. Hardware, plumbing and heating equipment and supplies were down 0.6% from March, but up 5.7% from April 2002.

Toronto, ON – She’s in charge of Expo now, because, among other things, she’s a great operations person. But Annette Verschuren, president of Home Depot Canada, has also taught her U.S. counterparts a thing or two about marketing to women customers, a sensibility she’s sure to apply to her management of Expo. But one thing she won’t do is bring Expo to Canada anytime soon.

“Expo will come to Canada,” she told an audience at last week’s annual convention of the Retail Council of Canada. “But there are a number of markets we need to develop in the U.S. for Expo.” Expo, which has seen its expansion plans more than halved, from 200 stores to fewer than 100 in total, has some bugs to work out, according to Verchuren.

One aspect of Home Depot’s high-end décor format is Expo’s strong focus on the woman shopper. But Verschuren and her Canadian team pioneered Home Depot’s approach to “soft DIY,” not just in Canada, but across North America, with the sale of linens, pillows, soft window treatments and wall coverings, most notably in two Toronto stores, Yorkdale and Leaside.

Verschuren said her division, one of six in North America, had more leeway than its U.S. counterparts. “It was a bit of a lab for the entire chain,” she noted.

She foresees room for about eight Expo stores in Canada. But first, she says, she has more work to do expanding the traditional big box format. “We still need to develop the infrastructure of Home Depot here in Canada.”

Canada currently has 93 stores; by the end of the year, it will have at least 102. Verschuren believes the country can accommodate at least 120 big box Home Depot stores in total. With the development of smaller stores such as the one that opened in Lethbridge, AB on May 29 and in Kamloops on June 12, she sees room to enter other, smaller markets, as well, throughout Canada.

Another 3.4 million shares were sold by ITM Entreprises S.A., raising $57.2 million for the French co-op wholesaler. Rona is a member of ITM, which in turn still retains about 7% ownership in Rona.

The over-allotment option enables brokers to increase the size of a share sale, based on demand. “This means there was a healthy demand for the stock,” says James Durran, an analyst for National Bank Financial, adding that the stock was reasonably priced at the time of the offering. “It’s done extremely well since the Réno-Dépôt announcement.”

The underwriting syndicate was comprised of BMO Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc., RBC Dominion Securities Inc. and Desjardins Securities Inc.

Special Report – The unadorned “warehouse look” of the original Home Depot concept, so prized by company founders Bernie Marcus and Arthur Blank, has left the chain with a lot of tired, shopworn stores. In the face of mounting competition from Lowe’s Cos., that philosophy is currently being revisited.

But that’s just one of the challenges being faced by Home Depot as it prepares to enter its second quarter century of existence, says a new study in the latest issue of our sister publication, Hardlines Quarterly Report.

Home Depot stores can generate tremendous volumes, but the traffic in the stores has taken its toll. Lowe’s, on the other hand, has a much newer base of stores. Home Depot has committed US$250 million this year alone to make its stores brighter – and enhance their appeal to female shoppers.

To find out how Home Depot is reinventing itself on both sides of the border, see the latest issue of HQR. If you’re not a subscriber to this incredible newsletter of industry analysis and research, contact Nancy Wright here at the World Headquarters for more information.

During their session at Sanford C. Bernstein‘s “Strategic Decisions Conference” here, Bob Tillman, chairman and CEO of Lowe’s, and CFO Robert Hull, reiterated many of the points they made several days earlier during Lowe’s annual shareholders’ meeting: that the company’s soft same-store sales in the first quarter were attributable to bad weather; that Lowe’s is still on track to open 130 stores this year and 140 stores next year; that 25% of its expansion will be in smaller markets of between 15,000 and 35,000 households with a 94,000-sq.ft. store, compared to Lowe’s 116,000-sq.ft. unit for major markets, where 65% of its expansion will take place this year and next.

However, the officials provided more details about some of the company’s programs. This summer, the company plans to roll out chainwide an installed sales program that it is currently testing in 128 stores, and which took Lowe’s 18 months to develop. Lowe’s expects to double its installed sales to US$2.2 billion by 2005.

Lowe’s is projecting a 25% increase this year in special order sales, to US$2.5 billion. The retailer is currently offering 500,000 special order items. Lowe’s also projects that, in the “near future,” special order sales could account for between 15% and 20% of its total sales. (Currently 43% of its special-order dollar volume is transacted electronically; Lowe’s expects that to rise to 100% in two years.)

In its larger stores, Lowe’s is stocking US$5.5 million in inventory at cost, vs. US$3.5 million in its smaller prototype. Tillman said that he felt that Lowe’s inventory position was solid going into the summer, and pointed to the support provided by the company’s distribution centre network, into which Lowe’s has invested US$500 million over the past several years.

In the second quarter, Lowe’s will step up its advertising as well as its “credit marketing.” However, the trend by dealers to offer “no payment, no interest” deals on larger purchases is having an impact on pricing and profitability in general. Hull said Lowe’s has estimated that these kinds of promotions “can take 10 gross margin points” out of a sale.

During their presentation, Tillman couldn’t resist taking pot shots at competitors. He mocked Sears‘ recent decision to lower its prices on appliances by stating sarcastically, “I thought Sears always had everyday low prices.” And he speculated that Home Depot could not accelerate its store-remodeling program while, at the same time, work on improving its same-store sales. He believes the “only advantage” Home Depot has over Lowe’s right now is “convenience, because they have more stores than we do.”

“The issue for us,” said Tillman, “is that I need 200 more stores in California and another 100 in Florida.”

The Sustainable Forest Products Global Alliance is the product of an agreement signed last week by the World Wildlife Fund, the U.S. Agency of International Development (which provides humanitarian and economic assistance worldwide), and Metafore, the name that the Certified Forest Products Council now goes by. The Global Alliance intends to channel US$7.6 million into programs that promote responsible forest management and certified wood products.

“To satisfy our corporate commitment to forest conservation, Home Depot depends on a reliable supply of wood products from responsibly managed forests. That’s why supporting the Global Alliance makes so much sense for us,” says Ron Jarvis, the retailer’s vice-president lumber merchandising, in a statement released by the World Wildlife Fund. According to Jarvis, Andersen Window will soon join this group as its second corporate sponsor.

The group’s formation comes on the heels of an announcement by the European Union that its member countries would only accept lumber from nations that had signed onto its Forest Law Enforcement, Governance and Trade agreement and could certify that their lumber had been cut legally. In environmental parlance, this means using responsible forest management practices. The E.U. said it was targeting wood products coming from Asia, South America, Central Africa and Russia.

In addition, Lanoga Corp., Dallas-based home builder Centex Homes, and International Paper last month declared that they would stop buying lumber from Indonesia, where illegal cutting is rampant.

WWF quoted World Bank statistics claiming that illegal harvesting is costing developing countries more than US$5 billion annually in taxes and other revenues.

London, UK – Kingfisher plc has reported a healthy bump in performance for the first quarter, with overall profit up 34%. Same-store sales increased by 4.1% in 1Q, with profits up 34.4% to £154 million, an 18% underlying increase. The retailer’s B&Q home improvement chain had a healthy 13% increase in sales, with profit jumping 16.7%. Good early spring weather in the U.K. helped the results by generating strong seasonal sales. Profit was up 3.6% at its Castorama France division on sales of 19.0%. Castorama is in the process of being integrated into Kingfisher’s operation. Same-store sales at Kingfisher’s Brico Depot chain were up 17.6%. Total sales from the home improvement division grew 17%. Growth was strong in Italy and China, while the company is in the process of selling off its Canadian Réno-Dépôt division to Rona.

Grand Ledge, MI – A new distribution centre here is the first for Lowe’s in the Upper Midwest. The flatbed distribution centre cost US$13 million and sits on 40 acres. It will start shipping products in bulk that lie flat, including lumber, pipes, gutters and fence material, to 62 stores in Michigan, Indiana, Ohio, Illinois and Iowa by early July.

St. Louis, MO – Now that Emerson has stopped making benchtop and stationary tools under the Ridgid name at its Paris, TN manufacturing plant, production of the Home Depot proprietary line is being moved offshore to Asia, says Brian Sponsler, vice-president sales and marketing for Emerson. Hong Kong-based Techtronics Inc., which makes Ryobi, Dirt Devil and Homelite branded products, has been asked by Home Depot to help Emerson with this transition, specifically in the areas of logistics and distribution, says David Imre, a spokesman for TTI.

Troy, MI – Sears Roebuck is feeling the pinch in its appliance department from the likes of Home Depot and Lowe’s. So it’s expanding its assortments and getting into more low-end models. The high-end ones are selling like hotcakes, but Sears has suffered 20 consecutive months of falling same-store sales. Appliances are the retailer’s biggest revenue generators, but the big boxes are devoting more and more space to white goods and Lowe’s is the number-two heavy appliance seller in the U.S., after Sears.

Issaquah, WA – Costco Wholesale Corp. reported net sales of US$3.20 billion for May, an increase of 9% from US$2.95 billion in the same period a year earlier. For the first 39 weeks of its 2003 fiscal year ended June 1, 2003, the company reported net sales of US$30.67 billion, a 9% increase from US$28.15 billion. Same-store sales for May increased 4%, and year to date they were up 5%.

Fort Wayne, IN – Do it Best Corp. has received a Half Century Business Award from the state of Indiana in recognition of the co-op wholesaler’s 58 years in business and its commitment to community service. Do-it Best and its employees focus support on a number of education and youth programs in Indiana, including United Way and Big Brothers and Big Sisters.

Despite charges against his company, Invemed Associates, of overcharging clients, Kenneth Langone has been re-elected to the Home Depot board of directors. The man who provided initial financing to Bernie Marcus and Arthur Blank when they formed Home Depot in 1978, Langone also helped current Home Depot CEO Bob Nardelli get his job. Langone also sits on the board of directors of Nardelli’s former company, General Electric.

The value of building permits issued in Canada in April were up a bit, though residential intentions for new housing dropped 6.8% and the value of non-residential permits increased 14.8%. According to Stats Canada, municipalities issued $3.7 billion in building permits in April, an increase of only 0.5%. Housing permits fell 6.8% to $2.3 billion, while intentions in the non-residential sector increased 14.8% to $1.4 billion. However, during the first four months of the year, the value of building permits reached nearly $15.6 billion, up 4.6% from the same period of 2002.

Employment dipped by 13,000 in May, the second consecutive monthly decline, says Stats Canada. A jump in the number of people entering the labour market in search of work pushed the unemployment rate up 0.3 percentage points to 7.8%.

Private spending on new housing in the U.S. reached a value of US$325.6 billion seasonally adjusted in April, dipping 0.5% below March’s rate of US$327.3 billion, says the U.S. Commerce Department. But it was still up 9.2% over April 2002. Public construction of housing and redevelopment was up 4.8% over March, and up 17.2% over April 2002.

· Is the company on the cusp of big growth – or big disappointment?
· What kind of growth and market share has Home Depot achieved in Canada?
· What new concepts is Home Depot trying out?
· How are vendors meeting the challenge of greater consolidation?
· How does Home Depot measure up against its toughest competitor, Lowe’s?
· What are Home Depot’s plans for Canada? What retail concepts will work here?
· What strategies does Home Depot have to beat the competition?

Falling share prices, falling morale, falling profits. Can the new management at Home Depot turn the tide? Of course it can. Find out how in the latest issue of Hardlines Quarterly Report — click here.

Last week’s ruling by the WTO has not deterred U.S. negotiators, however, who are likely to appeal. According to one trade official, the WTO identifies a subsidy component to softwood production and pricing in Canada, just the loophole the U.S. needs to justify continued countervailing duties, which average 27% on shipments that totaled about $10 billion annually before the tariffs eroded business.

Meanwhile, lumber suppliers in Atlantic Canada are feeling frustrated by the latest round of negotiations between the U.S. and Canada. Unlike the rest of Canada, the industry in Atlantic Canada has long been adhering to timber sourcing certification standards that keep it clear of the U.S. concern about unwanted subsidies. Unlike the rest of Canada, where timber rights are held 93% on Crown lands, more than three-quarters of the land in Atlantic Canada is privately held. Stumpage fees are based on a market value assessment acceptable to U.S. practices.

Despite the Atlantic’s pricing structures, which date back to the mid-’80s, when the first round of lumber disputes erupted under the fledgling Free Trade Agreement, one in three mills down east is currently closed.

“This proposal is a bad deal for Atlantic Canada and is unacceptable,” says Diana Blenkhorn, president and CEO of the Maritime Lumber Bureau, in a prepared release. “This current proposal punishes the only region in this country that has never received an allegation against its market based trading practices.”

Toronto, ON — Hudson’s Bay Co. saw sales creep up in the first quarter from $1.50 billion to $1.54 billion, but the company’s losses deepened from $6 million last year to $34 million in 1Q 2003. Sales increased at Zellers and Home Outfitters, largely due to sales of hardlines, but sales at the Bay declined, hurt by poor Spring weather, SARS and a write down on the discontinuation of the Martha Stewart line.

Sales and revenue increased over the last year by 0.3% to $1.53 billion in the first quarter of 2003. Same-store sales increased at Zellers by 0.2% and decreased by 4.0% at the Bay.

“The hardlines part of our business has increased 3% and certainly outpaced the rest of the company’s sales,” says Bruce Dinan, senior vice-president of merchandising at Zellers. Really, our results reflect apparel and seasonal businesses that were soft.”

Recognizing the growth potential of home décor and furnishings, HBC unveiled three new brands at its annual general meeting last week. They are House & Home, Waverly and SIA.

The House & Home line, a brand extension of House & Home Television, designed by Lynda Reeves, will feature everything from bedding and bath accessories to décor items for other parts of the house, including the garden. The brand will be introduced exclusively at the Bay this Fall.

Waverly is a line of bath and bedding that will be available at both the Bay and Home Outfitters stores later this year. Waverly décor, a sister brand, features a range of merchandise for the bedroom, kitchen, bathroom and living areas, and is already available in Zellers stores across the country.

SIA comprises a range of artificial flowers and plants, vases, accessories and candles, encompassing themes designed around particular themes and events, such as weddings and holidays. The brand will be available in Bay stores nationwide by this Fall.

During a recent teleconference with analysts, company officials showcased the performance of several departments that have been overhauled. While the chain’s same-store sales fell 1.6% in the first quarter, its kitchen and bath departments’ comps grew 22%, mainly on the strength of larger, better assorted appliance areas that are being rolled out chain wide.

Double-digit unit sales gains in its line of John Deere tractors (which are generating an average ticket of US$2,000) boosted the same-store sales in its stores’ lawn and garden departments.

Some analysts have criticized Home Depot for the turmoil caused by its ongoing efforts to reset many departments with new product lines. Company officials countered that criticism by stating that 15 of 22 reset departments produced sales increases that exceeded the chain’s as a whole. For example, resets of cleaning supplies enjoyed a 22% sales gain. When the carpeting department was reset, sales went up 15%.

Nine of 11 departments also reported increases in average ticket sales.

The company also noted that its “core services,” which include rental and installation, grew by 36% in the first quarter. Home Depot has identified services as being one of the drivers of same-store sales for the rest of the decade.

But it’s also just the first step to expansion beyond Ontario. “Right now, we’re converting the Ontario stores, but wait until we roll it out in the West,” says Ray Falkenberg, vice-president business development and marketing for TruServ. That move is simply awaiting the necessary distribution channels for Western Canada. “We’re busy lining up large animal feed suppliers. There are a number of existing co-op stores that fit the Country Depot format,” he adds.

At the recent TruServ Spring dealers’ market in Winnipeg, a complete Country Depot store was set up right on the show floor. “It was a huge hit with our existing dealers and many of them are considering adding on a new business,” says Falkenberg.

The 20/20 strategy goes right back to Canadian Tire’s distribution process. The new stores, although only slightly larger than a typical Canadian Tire “A” store, will have at least 15% more retail as the back end is downsized. The company is experimenting in a few stores right now with increased numbers of shipments that will reduce dealers’ inventory. Not only does the plan enable these stores to shrink their warehouse space accordingly, it also means higher turns.

Another aspect of 20/20 currently being tested in the two existing Kingston stores, plus one in Belleville, is equipment rentals. However, the notion of rentals is being expanded dramatically beyond heavy duty tools, cleaning and gardening equipment. Under the new program, consumers can rent everything from tents, canoes and other camping equipment to bar fridges and party sized barbecues.

The first four 20/20 stores will open at various times during the Fall. All except one will be located in Ontario: in Kitchener/Waterloo, Pembroke and Markham. The fourth will be a second store in Prince George, BC.

Vancouver, BC — Canfor Corp. has completed the previously announced purchase of Daaquam Lumber Inc. and Produits Forestiers Anticosti Inc., two privately owned lumber and timber harvesting companies based in Québec City. Daaquam is a lumber manufacturing operation located in Saint-Just-de Bretenières, Quebec, with an annual capacity of 150 million board ft., and timber-cutting rights in the surrounding region. Anticosti holds additional timber rights and has harvesting operations on Anticosti Island.

Toronto, ON — Canadian Tire has added the popular Schwinn line of U.S. bicycles to its sporting goods department, which falls under the aegis of Pamela Griffith-Jones, divisional vice-president, sporting goods. Canadian Tire claims one out of every three bike sales in Canada, but there are no bike racks in front of their stores (Oh, lay off Canadian Tire, already! – Editor)

Atlanta, GA — Home Depot has announced it will buy back up to US$500 million in stock. The open-ended plan will allow the company to repurchase shares on the open market “from time to time.” In the same announcement, CEO Bob Nardelli reiterated the company’s plan to invest US$4 billion this year to expand and rejuvenate stores. Home Depot has 1,568 stores throughout North America, 36 of which opened during the company’s first quarter ended May 4.

Issaquah, WA — Costco saw earnings increase rise 18% to US$153.8 million, up from US$130.4 million in the same period a year ago. Net sales for the quarter rose 11% to US$9.34 billion. Total revenue, which includes membership fees and other revenue, took that number up to US$9.54 billion from $8.62 billion a year earlier. Same-store sales rose 6% in the quarter.

Guelph, ON — With the right promotion, Porter-Cable Delta has found that the combination of a $100 rebate and price reduction managed to double sales for the power-tool manufacturer’s framing nailer and compressor combo kit. After a test, the “Incredible Compressor Rebate” program was expanded to include three more items. Sales through the program are expected to exceed $1 million, all flowing through Porter-Cable’s MAC Call Center in Apsley, ON.

Marysville, OH — The Scotts Co. will expand beyond lawn care and garden products into the pottery category through a couple of proposed acquisitions. With the purchase of Florida-based Pam Pottery, Scotts will add two pottery lines under the Miracle-Gro name in fiscal 2004, supported by aggressive advertising and merchandising. It has also signed a letter of intent to buy Scan-Pot USA. The entry into the estimated US$1 billion pottery market adheres to a company strategy to grow into new areas of lawn and garden.

London, England — Shareholders have insisted that Kingfisher plc revise the pay packages for its top directors, says an item in Reuters. Kingfisher is not alone: there’s a growing wave of shareholder discontent over executives who get handsomely rewarded even when the company’s results don’t warrant it.

Paul Levesque, COO of Michaud & Levesque Ltd., a True Value dealer in Sturgeon Falls, ON, has been awarded the 2003 Young Retailer of the Year Award. The award, presented by the National Retail Hardware Association in the U.S., recognizes outstanding performance by owners and managers of independently owned hardware and building centres throughout North America. Levesque won in the category of stores under $2 million in sales. His operation includes a V&S Variety and Just Ask Rental along with the True Value banner.

Robert Walker has been appointed Ontario plywood specialist for CANPLY — the Canadian Plywood Association, effective today. He brings 19 years in wood products promotion and sales to this post, having worked at Metric Forest Products and most recently at Oliver Lumber Co. He will be based in Brampton, ON. (For now you can reach him through head office: 604-981-4178)

With mortgage interest rates at 40-year lows, U.S. home resales stayed strong in April, rising 5.6%, says the National Association of Realtors. They grew to a seasonally adjusted annual rate of 5.84 million units from 5.53 million in March. Sales of new homes were up 1.7% to a seasonally adjusted rate of 1.028 million, according to the U.S. Commerce Department, the third fastest pace since the government began tracking the data in 1963.

Building permits for residential construction in the U.S. in April increased 1.2% over March, and the rate was up 2.8% over the same month a year earlier, says the Commerce Department. Privately owned housing starts, however, were down in April by 6.8% from March to a seasonally adjusted rate of 1,630,000. April’s starts were up, though, over April 2002, by 2.7%.

U.S. manufacturers report that orders being placed for the next several months have been picking up, and that could be a good sign for the U.S. economy. A survey of its members conducted by the National Association of Manufacturers found that two-fifths of the 75 respondents saw higher orders in May. By comparison, a similar survey taken last year found 56% of those polled stating that their April orders were off. Of those polled this year, 43% expect their orders in June to be higher than the same month a year ago.

· Is the company on the cusp of big growth – or big disappointment?
· What kind of growth and market share has Home Depot achieved in Canada?
· What new concepts is Home Depot trying out?
· How are vendors meeting the challenge of greater consolidation?
· How does Home Depot measure up against its toughest competitor, Lowe’s?
· What are Home Depot’s plans for Canada? What retail concepts will work here?
· What strategies does Home Depot have to beat the competition?

Falling share prices, falling morale, falling profits. Can the new management at Home Depot turn the tide? Of course it can. Find out how in the latest issue of Hardlines Quarterly Report — click here.

First, the numbers: Home Depot generated US$15.1 billion in the three months ended May 4, a 5.8% gain over the same period a year ago. Same-store sales were off 1.6%, but profits jumped 5.6% to US$907 million.

Lowe’s surprised many company observers when it reported that its same-store sales in the first quarter increased only 0.1%. Total sales grew by 11% to US$7.2 billion and net income rose 22% to US$421 million.

Both companies blamed cold and wet weather for their same-store sales softness. And while Depot officials spoke approvingly about sales of John Deere-branded tractors and mowers, Lowe’s admitted that its stores’ mower sales faltered because they hadn’t been stocking a mid-priced product.

On the day Lowe’s reported its quarterly performance, May 19, its stock fell by 9% to US$40.40 per share. After Home Depot released its numbers, the stock traded furiously and ended the day up US$2.60 to US$30.67 per share. Lowe’s stock price fell another US$1.30 per share.

Boucherville, QC — Rona Inc. has completed a share offering on the Toronto Stock Exchange. The money will be used to pay off some debt and finance the acquisition of Réno-Dépôt Inc., a deal which is expected to close by late Summer, as well as future acquisitions.

The deal has floated another 11,183,572 common shares into the market, with 7,770,000 of them issued from treasury and 3,413,572 sold by ITM Entreprises S.A. The shares were priced at $16.75, adding $130.15 million to Rona’s coffers.

ITM, the French-based co-op retail conglomerate of which Rona is a member, had previously held 14 % ownership in Rona. By selling off shares, the group has reduced its ownership by half to about 6% or 7%.

The syndicate of underwriters, comprising BMO Nesbitt Burns, National Bank Financial, Scotia Capital, RBC Dominion Securities and Desjardins Securities, have an option to purchase up to 1,165,500 more shares at the offering price for up to 30 days following the closing of the offering. This additional purchase will cover over-allotments and provide for market stabilization. If the over-allotment option is exercised in full, total gross proceeds to Rona will reach $149.67 million.

London, ON — With same-store sales up 6% year to date, TSC Stores, a chain of 21 hardware and farm centres across Ontario, has proven its format can fare well against big boxes – and anyone else, for that matter.

And with four of those 21 locations having been added just last year, and two more planned for the fiscal year ahead, the company has no concerns about continuing to stay strong.

“All our stores are up over last year,” says Roy Carter, president of TSC. “So including the initial sales from the new stores, our total sales year-to-date are up more than 15% over last year.” That increase follows a 12% gain over the year before.

The company’s fiscal year ends August 31, and a new store is planned for Leamington, ON sometime this Fall, with another site being considered in either Goderich or Essex for Spring 2004.

TSC has been experimenting with a hardware “store within a store” at Prout’s, a Castle building centre in Forest, ON. Here, TSC has been operating the store’s front end on a joint-venture basis with Prout’s with a hardware boutique called “Villager.” Carter says hardlines sales at Prout’s have tripled since the concept was put in place, and both parties have committed to run with it for another year. However, Carter says he wants to keep testing the concept before considering rolling it out to other building centres.

This year’s HTF included more than 30 breakout sessions on topics ranging from XML, bar coding, e-business strategies, AS1/AS2 solutions and electronic data interchange. The event was put on by the American Hardware Manufacturers Association and sponsored by Sterling Commerce, Stratix Corp. and QRS Corp.

Speakers included Jim Tompkins, president of Tompkins Associates. He said the current problem with supply chains is a proliferation of SKUs, a trend that is driven by demanding consumers. “It is possible to reduce inventory while improving service and increasing SKUs. It’s not relevant when you ship, but when the customer receives. You have to synchronize demand and have agile response,” he said.

Some companies have lean manufacturing operations but fat supply chains, Tompkins added. “DCs should flow product, not store it. Make sure all suppliers have Internet connectivity and do not treat all customers the same.”

During the conference, item synchronization guidelines were released by Home Depot. Item sync is the electronic transmission of price and product information from the manufacturer to the customer. Despite the high cost to vendors, it assures that trading partner systems are in sync and contributes to more accurate exchange of information throughout the supply chain process. As Home Depot’s Mark Healy noted, “Beyond direct benefits, item synchronization is the foundation for all forms of electronic collaboration.”

The Home Depot will be sending a letter to its vendors asking them to register with UCCnet and meet industry data synchronization standards by the end of 2003, Healy said.

Home Depot’s other focuses for technology in 2003 are electronic partner communication for special orders, self checkout system, EDI over the Internet, and back-end automation and re-engineering requirements for receiving. Healy also mentioned the development of a supplier web site, vendor.homedepot.com, which will store all documents/letters, timelines and links.

Remodeling expenditures, which increased 2.5% to US$163 billion in 2002, are expected to grow by more than 7%, to US$175 billion, this year, according to the National Association of Remodeling Industry. Each year, more than one million homes in the U.S. undergo major remodeling or renovation, according to NARI estimates.

The Remodelers Council of the National Association of Home Builders polls more than 600 remodelers quarterly, and found that remodeling activity in the first three months of 2003, while still below what it was in the first quarter of last year, is showing steady signs of recovery.

“Especially encouraging is that future expectations and backlogs of remodeling jobs in the pipeline are so strong,” says NAHB chief economist David Seiders. “Current additions, alterations and maintenance and repair work ordered by home owners ascended to very healthy levels at the beginning of this year, and professional remodelers are quite optimistic that conditions in this sector will continue improving.”

Moncton, NB — When Home Depot opened its first store here last month, it was not shy about leveraging New Brunswick’s legal Sunday openings, something that retailers have been slow to adopt wholeheartedly. However, once Home Depot was open for business, Kent, its competitor across the street, was quick to follow suit.

Meanwhile, the issue of whether to have Sunday shopping year-round or not continues to be a hot topic of debate for the rest of the province, one that goes before Fredericton city council today. According to a report in the Daily Gleaner, the Fredericton Chamber of Commerce did a study that shows more than 80% of retailers want the flexibility to open Sundays.

Fredericton has Sunday shopping from May to January in the downtown tourist areas and from August to January in the rest of the city.

Burnaby, BC — Taiga Forest Products Ltd. completed the fiscal year ended March 31, 2003 with sales of $912.7 million, up 7% from $854.3 million in 2002. Earnings for the year were $7.8 million, an increase from $6.2 million a year earlier. Sales for the first quarter were $209.9 million, a 2% increase over $206.5 million for the same period last year. The net loss for the quarter was $647,000, versus earnings of $719,000 last year.

Toronto — Canadian Tire Corp. has hired a new service provider to manage its card payment processing for the company’s retail businesses. As part of the agreement, Moneris Solutions will also provide Canadian Tire with card payment processing for its Canadian Tire Direct online and its catalogue business. The seven-year agreement will affect Canadian Tire’s $7.2 billion in annual retail sales.

Fort Wayne, IN – Growing customer demand for home décor has resulted in the introduction of a new, comprehensive program for Do it Best dealers at the company’s May Market. Everything from retail design, advertising and training comprise the program, aimed at helping dealer members drive up their sales of paint, cabinets, bath and flooring, through a partnership with Floor to Ceiling Corp., which will add more than 40 specialty vendors to the company’s list of suppliers.

Oak Brook, IL — Ace Hardware Corp. reports it’s on track to meet its goal of opening one million sq.ft. of new retail space in 2003. In the first quarter alone, 20 ground-up Ace stores opened, comprising a total of 256,800 sq.ft. In that period, another 23 stores converted to Ace from other co-ops. The company also plans to open a new one million-sq.ft. distribution centre in Placer County, CA in the first quarter of 2004. It will replace an existing facility in Rocklin, CA that’s half that size.

Montreal, QC — Domtar Inc. will temporarily cease operations at its White River Sawmill on June 23. The company blames a housing oversupply in the North American market, as well as U.S. duties on softwood lumber exports for “difficult market conditions” which have driven down prices. The White River sawmill is expected to stay shuttered for six months.

Sacramento, CA — It’s beginning to look a lot like … your supplier’s Christmas stand. That’s what a federal jury here sang last week when it ruled that Home Depot and a China-based manufacturer had illegally knocked off a patented stand manufactured by Decorations for Generations, which the jury awarded nearly US$13.6 million. Home Depot denied that the imports and their packaging were meant to be confused with Decorations’ line. The retailer intends to appeal the verdict.

London, England — Kingfisher plc has completed the acquisition of the minority shares in Castorama. As a result, Kingfisher now owns 100% of the issued share capital of Castorama and holds, directly and indirectly, 158,951,894 Castorama shares, representing 99.57% of the issued share capital voting rights. Through Goldman Sachs International, Kingfisher purchased the outstanding shares from Castorama Dubois Investments at the unit price of 67 euros. As a result, Castorama has been delisted from the French stock exchange.

Atlanta, GA — “Project Roadrunner,” a new initiative by Home Depot to cut costs, means the merchandising service companies that come into its stores will get treated more and more like poor old Wyle E. Coyote. By cutting back on the number of service contractors allowed in its stores, Home Depot hopes to save on the commissions it pays these contractors. However, they work on behalf of Home Depot’s vendors, and these vendors are concerned that the move will result in a restriction of trade. Lowe’s implemented a similar “vendor service consolidation program” about a year ago.

Patrick Brown has been promoted to Ontario sales manager at T.S. Simms & Co. Ltd. He has been with the company for seven years as a sales rep. He was formerly with Tremco and Lansing Buildall (416-458-2926) … Luc Papineau has joined Simms as a sales representative in Quebec. He was formerly with Henkel, LePage and Tremco. He is based in Trois Riviéres. (1-800-561-9100)

Troy, MI — Kmart Management Corp. named two general merchandise managers as part of the company’s push to improve merchandising efforts as it seeks to improve sales. Robert Atteberry and Joyce Dillon have both been appointed vice-presidents, general merchandise managers. Atteberry was formerly divisional vice president, merchandising, for home goods and Dillon was divisional vice-president, merchandising, of toys, sporting goods and electronics … Peter Whitsett, divisional vice-president of merchandising food and consumables, will assume responsibility for drugstore operations.

The composite leading index rose 0.1% in April, continuing a series of small gains since the Summer of 2002. Household demand continued to grow enough to offset weakness in manufacturing, where export demand has slowed.

Wholesalers sold a total of $36.6 billion worth of goods and services in March, down 0.5% from February. This decrease in sales follows a 0.2% decline in February. First-quarter sales were up 2.1% from the fourth quarter of 2002, and up 8.6% from the first quarter of 2002. The hardware, metals, plumbing and heating sector was up 4.5% in the first quarter.