Calgary, AB – Ace Hardware Canada continues to roll out a supply arrangement to outfit stores belonging to United Farmers of Alberta. The program, which was introduced in the Spring of this year, is currently in six of the farm co-op’s 34 outlets, with new conversions occurring at a rate of about one every three weeks.

“We’re very careful with the conversion,” says Barry Hofstetter, head buyer at UFA. “We want to make sure it’s effective, so whole sections are being changed at a time. Let’s do the whole hardware section, or the whole tool section at a time,” he explains.

UFA serves 106,000 active members through its 34 retail outlets, and through more than 120 petroleum and fuel cardlock outlets located throughout the province, as well as in British Columbia and Saskatchewan.

The advertising initiative becomes possible following the remerchandising of the Ontario stores to reflect programs and brands now supplied out of Rona’s main warehouse in Boucherville, QC. Lansing, along with the former Revy stores, had been getting product out of the distribution centre in Surrey, BC which Rona took over upon the purchase of Revy back in June 2001. The result is simplification of everything from buying to merchandising, says Rob Wilbrink, vice-president operations and development for Rona Ontario.

The fliers will share products on the hardware side, while certain brands, especially in building materials and paint, are still not common to Cashway and Lansing, Wilbrink says.

The “Home Safety Zone” will feature products and information on how to protect the home against fire, carbon monoxide and intrusion. Products include fire extinguishers, smoke alarms, entry alarms, security lighting and other related items. The “Healthy Home Zone” focuses on creating a cleaner indoor environment, with featured products such as thermostats, air purifiers, dehumidifiers and water filtration products.

In Canada, the program kicked off with a safety awareness event on October 5. Working in conjunction with Child Find and the Canadian Red Cross, a free child identification and safety clinic was held in all Home Depot stores across Canada on the weekend. Parents could pick up a colour photograph of their child, receive a free parent’s identification and participate in various entertainment activities.

Blaming the brutal costs of the U.S. softwood lumber penalties, International Forest Products will relocate its McDonald cedar facility to Sumas, WA in the Fall. The plant, located in Fort Langley, BC, was to be relocated later this year.

Wal-Mart Stores plans to add about 48 million sq.ft. of new retail space next year, an increase of more than 8%. In the U.S., Wal-Mart will open about 45-55 new discount stores and 200-210 new Supercenters next year (Wal-Mart’s fiscal year begins Feb. 1). The retailer will open 20-25 smaller Neighborhood Market stores and 40-45 Sam’s Club stores. It will also build three new regional distribution centres and six food distribution centres next year. In Canada, Wal-Mart has just opened four new stores: a second location in Moncton, NB and the relocation of its Etobicoke, ON store in Toronto’s west end; a new store has gone into Woodstock, ON, while a smaller 63,000-sq.ft. location has been erected in Brooks, AB. The openings bring the company’s store count in Canada to 201.

Home Depot has opened its tenth store in Mexico, this one in Tijuana. It entered the Mexican market in June 2001 with the acquisition of Total Home, and bought another chain, Del Norte, in the Spring of this year. Home Depot intends to open two more stores in Mexico before the end of the year.

Tembec has announced it will cut back production at its Mattawa, ON sawmill, affecting 64 direct jobs. The move is a result of the heavy softwood lumber penalties imposed by the U.S., coupled with a weak lumber market.

For the second quarter ended August 31, MAAX Inc.‘s profitability increased 35.9% with net income of $9.9 million, up from $7.3 million a year earlier. Sales were up 11.5% to $147.2 million, from $132.1 million. For the first half of the year, net income rose 40.1% to $20.7 million.

Canadian Forest Products Ltd. has achieved certification of some of its B.C. forest operations to the Sustainable Forestry Initiative, representing the largest such certification in Canada. The operations include 3.18 million hectares in Prince George and Quesnel, and 180,000 hectares in Canfor’s tree farm licence near Prince George. The certification follows a successful third-party audit by KPMG Performance Registrar Inc.

The Women’s Consumer Products Network will host its Annual Connections Conference on October 17 at Lionhead Golf & Country Club in Mississauga, ON. Registration and breakfast will begin at 7:30 a.m., followed by a morning of powerful speakers and an afternoon of lunch, networking and golf. Click here for more details.

Described as “sluggish and stagnant,” manufacturing in the U.S. slowed in September. According to the Institute for Supply Management’s index of business activity, activity declined to 49.5 from 50.5 in August. Analysts had expected it to come in at 51.

Boucherville, QC – The proposed initial public offering of shares by Rona Inc. is currently under review by securities agencies as part of the formal IPO process. A detailed prospectus has gone out to financial institutions, and Rona management is currently awaiting feedback before proceeding.

After that, if appropriate, Rona will begin a “road show” to sell the merits of its shares to traders across the country. Then, by the end of this year or the beginning of 2003, the company can go ahead with the IPO.

The money raised by the share offering is earmarked for a number of things. One is to repay $49 million in debentures to lenders. Another is to facilitate “organic growth,” that is, ongoing investment in existing dealers’ operations and technology infrastructure. The company also wants to expand the efficiency and capacity of its distribution, including a proposed new distribution centre in Calgary. Finally, Rona is committed to continued growth, including the addition of more independent dealers and the possible acquisition of additional wholesalers.

Bolstered by a strong economy, interest rates that stay down and housing expected to stay strong into next year, Rona wants to strike while the iron is hot.

“We think this is the best time for Rona,” says Sylvain Morissette, director of communications for the company. We are a developer in the market, and a developer in the economy. The company wants to grow,” Morissette continues, “not only by increasing the network with new stores, either by recruitment or through acquisition, but also by continuing to work with vendors. We will remain key purchasers in this industry in every market in Canada where we have stores.”

The company is renewing its expansion efforts in different regions of the country. A property owned by Home Depot in Moncton, NB will finally be developed, with an expected opening date of Spring 2003. Even Charlottetown, PE is under consideration. “The numbers are in and they look very positive,” says Annette Verschuren, president of Home Depot Canada.

Expansion will continue in Québec, as well, a province that has been the focus of much of Home Depot’s growth this year. The latest opening in that province was in Boisbriand on September 19. It will be followed by Greenfield Park in the Montréal area before the end of the year. Two stores will open simultaneously in Québec City by October 31.

The company will have 12 stores in that province by the end of 2002, nine in the Montréal area, two in Québec City and one in Gatineau.

Home Depot has been tinkering with slightly smaller footprints – around 90,000 sq.ft. plus 15,000 sq.ft. of garden centre – about 30,000 sq.ft. smaller than the standard format. Sarnia is the site of one such downsized store. Other locations that may accommodate this format in the year ahead include Grande Prairie, AB and Prince George, BC.

Smaller sites are being sought, as well, for Home Depot’s neighbourhood urban store concept – what Verschuren refers to as “Home Depot light.” Designed to situate between standard-sized Home Depot stores, the urban stores eliminate most of the lumber and focus on convenience, storage, cleaning products and special orders. Tests of these 65,000-sq.ft. stores in New York and Chicago have spurred Verschuren to search for suitable locations in Canadian urban centres. Toronto, Montréal and Vancouver are all under consideration, although no sites have been picked yet.

On the tech front, Home Hardware introduced “Home Xtra,” a secure website for Home dealers that will enhance, and eventually replace, a great deal of the printed newsletters and information the company sends out to its members. Features of the site include full-colour previews of the year’s flier programs, regional specials, and a “chat room” for dealer input and the exchange of idea s.

The project is being spearheaded by Tony Krotz, dealer education manager, who also serves as editor of the site. The site will be able to tailor information for dealers, letting them pull up info of concern to them, instead of wading through reams of paper. “Eventually,” he says, “the paper will go away.”

But, he admits, it won’t go away any time soon. By Krotz’s estimate, barely half of Home Hardware dealers have Internet access, and for some of them, that access is at home only, not in the store. He hopes that, as the Home Xtranet site increases in popularity, it will drive up Internet use among the members. Planned features such as electronic credits and returns should be further incentives for adopting the new technology, he adds.

Facing the realities of a maturing marketplace and aging stores, Home Depot in Atlanta says it will start spending more money on upgrading existing stores. This year, 85% of the retailer’s capital spending budget of US$3.6 billion will go toward 200 new stores, leaving 15% for upgrades to existing stores. However, in future, more will be spent on older stores.

Rona Inc. already makes 5,000 fast moving products available for sale on its website, www.rona.ca. The main purpose of the site, which gets an average of 250,000 visitors per month, is to provide product knowledge and home improvement tips. However, the company has put an online strategy in place that will see the number of online products as much as double over the next two years. Available either by home delivery or through a local Rona dealer, they are mainly smaller seasonal and housewares related products.

Lowe’s Cos. expects earnings to grow 19%-20% annually over the next two years, while revenues are expected to rise by 18%-19%. The increases will be fuelled by store expansion: the company says it wants to add 130 stores in fiscal 2003 and 140 in fiscal 2004.

Menards, the number-three home improvement retailer in the U.S., is rolling out extra-large big box stores. The privately owned company owns 165 stores, but intends to start building 15-20 of the 225,000-sq.ft. stores.

Lee Valley Tools, the specialty tool and garden catalogue company, opened its 10th store this weekend, this time in Burlington, ON. The 11th will open in February in Coquitlam, BC.

Richelieu‘s third-quarter sales reached $65.3 million, up 12% over $58.5 million for the same period a year earlier. EBITDA grew 12% to $9.0 million, compared with $8.1 million. Net earnings rose 21% to $5.2 million, up from $4.3 million. For the first nine months, sales were up 15% to $189.2 million, while net earnings jumped 24% to $13.5 million.

Sico Inc. has announced its intention to purchase, occasionally, by way of a normal course issuer bid, for cancellation purposes, up to 285,290 common shares, representing 5% of the company’s outstanding common shares as of September 26, 2002.

Warren Parr has joined TSC Stores Ltd. as purchasing manager, to increase efficiencies in TSC’s distribution centre. Parr was formerly with the D.H. Howden Division of Sodisco-Howden Group, as director of purchasing there. (519-453-5270)

Sales for the wholesale plumbing industry increased a modest 2% from August 2001, according to the Canadian Institute of Plumbing and Heating. The slowdown follows record-breaking increases in June and July. Total August sales declined in all regions but Québec. The plumbing and heating industry is expected to exceed last years total sales of $3.1 billion by at least 3%.

Mississauga, ON – Reliance Buying Group Inc. was christened last week with the signing of seven existing buying groups under one aegis. The new group represents almost 1,200 dealers and total retail sales of $3.4 billion.

Five of the groups involved are already allied under the Evergreen group: Castle, Delroc Industries, Federated Co-operatives, Co-opérative Fédérée de Québec, and IRLY Distributors. The new alliance joins these groups with the two members of the National Alliance, Sexton Group and Torbsa. Each group holds an equal share in the Reliance buying group, which will operate out of Castle’s head office in Mississauga, ON.

The presidency of the Reliance Group will be shared in its first year by Terry Elliott, president of Delroc, and Brian Kusisto, president of Sexton. All sides were careful not to link Reliance with its forebears. “This is not an amalgamation or merger of the Evergreen and National buying groups,” Kusisto said to the roomful of vendors gathered to hear the announcement. In fact, both National and Evergreen will be wound down after 2002. Vendor negotiations that would occur with both these groups in November 2002 will be replaced by Reliance negotiations. Purchases will begin through the new group starting January 1, 2003. “Clearly, Reliance is the new force in home improvement retailing,” Kusisto added.

The group is open to further expansion. “We definitely have an interest in considering new members in this,” says Kusisto. “we think there’s room for more consolidation and we see ourselves as well positioned [to be the consolidator].”

While the buying groups have been discussing alliances and mergers for decades, the decision to move ahead with the Reliance group came about relatively quickly. Negotiations began only within the past three months, during which time suppliers were quietly contacted and introduced to the concept. These suppliers have been generally optimistic about the news. Many already face different levels of purchasing loyalty from group to group. By placing them under one umbrella, some suppliers may benefit if a smaller customer can increase their buying levels to match those of their fellow Reliance members.

As one vendor one pointed out, the kind of consolidation this agreement represents is necessary for independents, and will help ensure their long-term viability. Another vendor said he simply looks forward to fewer meetings with buyers.

Winnipeg, MB – Growmark Inc. has signed a letter of intent with Winnipeg-based TruServ Canada Cooperative Inc. to form an alliance between Growmark’s retail division and TruServ’s operations.

While a number of details are yet to be ironed out, the deal will involve blending the distribution activities of both co-ops, to create efficiencies and establish which product lines can most effectively be handled by each company to respective member dealers. For example, both firms offer lawn and garden products, but Growmark has more extensive assortment of upscale offerings, a program for nursery stock. In addition, Growmark’s pet food business is very strong, an opportunity for TruServ’s Pet Junction program.

The alliance is intended to result in Growmark’s 112 FS and 36 Country Depot dealers being serviced by the alliance, with shipments and buying for most categories being done by TruServ.

Rather than divesting itself of its retail division (Growmark has four other agro-related divisions), “we’re looking at this as an investment in TruServ’s business,” says Jim Hoyt, executive director of Growmark’s Canadian operations. “We’re now assessing what’s the most efficient distribution for our members collectively, and the critical mass of this alliance makes this more feasible.”

“The alliance will eventually integrate TruServ’s and Growmark’s stores into a common platform for ordering,” says TruServ president Léo Charrière.

The deal also replaces a reciprocal supply agreement Growmark had with Ace Hardware Canada. Under that arrangement, Ace had supplied Growmark members with hardware, while Growmark was able to supply lawn and garden, workwear and some farm related products.

Charrière sees opportunities for Growmark’s existing banners, especially the Country Depot stores, which feature a consumer-friendly retail format that appeals to both sexes. He would like to try and expand this banner, even boutiquing it in existing TruServ stores. “We look forward to taking the expertise Growmark has developed over the years and pushing it out.”

The result, Charrière adds, will give TruServ sufficient presence in Ontario eventually to establish distribution of its own, complete with buying offices, in that province, reducing cycle times to Central and Eastern Canada. “It’s going to increase our presence out in Ontario and becomes an important stepping stone for better distribution to Atlantic Canada.”

The deal is subject to due diligence, and is expected to be finalized by the end of this year.

Dartmouth, NS – Construction begins this week on a new store for Pierceys, the Building Material People. The store, the fifth for the privately held chain, will open in Elmsdale, a community just north of Halifax, early in Spring 2003.

“This facility will be modeled after our award winning Tantallon store, but will also include several additional service features,” says Peter Korecki, president and COO of Pierceys. While he would not disclose details of the new look, he noted that the 30,000-sq.ft. store, like the Tantallon outlet that opened in 1998, will have more of a retail focus than the other stores in the chain. Pierceys has traditionally derived about three-quarters of its sales from contractors. The new stores are targetting a 50-50 mix of trade and consumer business,with more emphasis on DIY-friendly lines.

“We’ve been expanding the seasonal lines with great success,” says Korecki. This includes snow removal products in Winter and lawn and garden in Summer – including more high-end pine and cedar lawn and garden furniture. “Customers are willing to pay $90 for a cedar Adirondack chair.”

He adds that Pierceys makes these products from its full-service mill, which was the heart of the company that began in 1915. Sales reached $63 million in 2001 and Korecki expects growth in the area of 9% this year.

Richelieu Hardware Ltd. has finalized the acquisition of 75% of Menuiserie des Pins, which manufactures products for window and door manufacturers. Management of Menuiserie Des Pins will retain 25% and remain involved in the operations of the company.

Castle Building Centres Group has added the following members: Prescott Building Centre, Prescott, ON; Ultimate Windows & Doors, Saint John, NB; Lameque Construction, Lameque, NB; Clear Lake Home & Garden Centre, Onanole, MB; and MacGregor Home Centre, MacGregor, MB.

Black & Decker Corp. is recalling about 140,000 cordless electric lawn mowers sold since 1996 after receiving 11 reports of electrical parts overheating and nine reports of minor property damage from the mower. The mowers are sold under the Black & Decker name and through Sears Roebuck under the Craftsman brand.

Faced with debt and asbestos litigation, Georgia-Pacific would like to sell off parts of its business and focus on building products. But a proposed share offering intended to raise about US$1 billion to pay down debt has been thwarted by the threat of asbestos litigation.

Mark Mossman has been appointed sales manager for Unilock Ltd. in Canada. He was formerly at Ace Hardware Canada, where he was central and eastern sales manager. (416-646-9000)

Wholesale sales increased 0.7% in July, with wholesalers achieving $34.8 billion in sales. Since November 2001, wholesale sales have generally followed an upward trend, after a relatively flat sales period from the spring of 2000 to October 2001. The metals, hardware, plumbing and HVAC sector was up 1.3%; the lumber and building materials sector and the household goods sector both grew 0.9%.

The Consumer Price Index climbed 2.6% from August 2001 to August 2002, says Statistics Canada. This follows a 2.1% year-over-year increase in July. Energy prices were largely to blame.

U.S. housing starts fell for the third consecutive month in August. The 2.2% decline was greater than analysts were expecting.

My thanks to everyone who attended! And a special thanks to our Conference sponsors!

Platinum sponsors: Brandid, CHEP Canada, Cologne International Trade Shows, Home Depot Canada, JDA, RBC Royal Bank, Sterling Commerce. Gold sponsors: canadianretail.com, Natural Resources Canada, Temple Scott Associates, and Wolf Gugler & Associates.

Retail Strategies Symposium platinum sponsors: ACNielsen Canada, Canadian Hardware and Building Materials Show.

International Business Seminar platinum sponsor: Practical World International Hardware Fair/DIY’TEC.

Ingevaldson would not reveal his plans for Ace’s future in Canada, calling those plans “strategic,” but did give some important clues. This country, he said, is an important part of Ace’s strategy, integral to a North American approach to providing independents with tools to ensure their viability competing alongside big boxes and discount retailers.

Within these larger trading zones, independents must begin to think more like retailers and adapt quickly to changing consumer needs and trends. That may be the biggest challenge facing owner-operators, who are often reluctant to give up their autonomy and commit to a business model that abdicates many business decisions to a more centralized body.

But Ingevaldson insists the old model of the independent dealer is no longer workable, and says independent dealers who don’t adapt will be crushed by the next generation of smaller formats that are the inevitable next step for the big boxes.

To support the fundamental change that’s required, Ace Hardware continues to roll out its Vision 21 program. It calls for dealers to sign contracts agreeing to use programs that will establish centralized IT systems, bring accounting and inventory onto a central site, increase emphasis on the effective use of retail data, and develop consistent category management, more appropriate pricing and enhanced customer service. Dealers are also expected to agree to future programs not yet even developed.

The challenge, says Ingevaldson, will be to get independent dealers to focus on retail. But the ability to do so, and to give customers what they want, will become increasingly important as consolidation occurs in the sector.

While increased consolidation will contribute to an unfavourable climate for smaller organizations, there are still opportunities for those willing to focus on bringing innovative products to the marketplace, says Greg Thomas, executive director of Alliance International LLC. Even though big box retailers and chains may enjoy the efficiencies that come with consolidation, the result is often reduced consumer choice and less innovation. This is where the independents can fit in.

The absence of key vendors from international buying shows makes the shows an excellent arena for smaller players, says Thomas. His organization, for example, is currently looking around the globe – including Europe and Asia – for fresh, interesting products and ideas that will appeal to consumers. That also means staying committed to selected trade shows. The fact that large vendors have disappeared from these shows means other vendors have a better chance of connecting with new buyers.

According to Thomas, those who want to play in the global field need to do three things. They must know and understand prospective customers, understand the differences between the Canadian and U.S. marketplace and understand the competition and what it takes to beat them.

They must also understand their own organizations. Too often, said Thomas, his own buyers end up making introductions among sales people from Canada and the U.S. who meet for the first time at an Alliance buying meeting.

Réno-Dépôt may be at the mercy of Castorama‘s new strategy. Now 100% owned by U.K. retailer Kingfisher, Castorama will consider pulling out of markets in which it’s not the number-one player, says a report in NHCN. This includes Canada, as well as operations in Belgium, Brazil and Turkey.

Canadian Tire Petroleum is looking for existing gasoline retailers to convert to the Canadian Tire banner. In a pilot program with Imperial Oil, CTC will convert three Esso stations to the Canadian Tire Petroleum banner. CTC will operate these sites, while Imperial Oil will continue to supply them. The three pilot sites are in Trois Rivières, Baie-Comeau and Sept-Iles, QC. CTC is also in discussions with other gasoline retailers. This re-branding strategy is part of a five-year plan to grow the number of gas stations in markets where Canadian Tire stores exist. This will be done through both new sites and conversion of existing dealers. They’re not alone: Wal-Mart Canada opened its first gas bar in Dryden, ON in July.

The North West Company Fund reported second quarter consolidated revenues of $186.6 million, up 7.7% from 2001. Same-store sales were up 3.5%. Second-quarter earnings reached $9.1 million, up 28.9%.

Jean-François Lachance has been promoted to the position of vice-president sales and marketing at Royal International Corp. He was most recently director of marketing at Royal. Prior to that, he was a hardware buyer at Rona Inc. (1-800-465-4566)

The Canadian Retail Hardware Association has appointed a new board of directors for the year ahead. Bill Towndrow has been named chairman. He is owner of Lunenburg Pro Hardware, Lunenburg, NS … The CRHA has named some new people to its board: Brigitte Michel-Finlay is newly elected. She is manager and owner of A&J Home Hardware, Sudbury, ON … Christine Hand is also new. She is owner of Handyman Home Hardware, Manuels, NF, which received the 2001 Walter J. Hachborn award for “Store of the Year” … Don L’Heureux is the third new member. He is owner of Guelph True Value Hardware Just Ask Rental, Guelph, ON. (905-821-3470)

Timothy Farrell has been appointed executive vice-president and COO of the American Hardware Manufacturers Association. He has been with the AHMA since 1993, when he started as assistant manager, events/expositions. Most recently, he held the position of vice-president, domestic-international operations. (847-605-1025)

The value of building permits increased 3.0% to $4.0 billion in July. Residential intentions reached $2.4 billion in July, up 6.2% from June, due entirely to multi-family permits. Single-family construction intentions retreated for a third consecutive month. In July, 18,250 new dwellings units were authorized. Year over year, the residential sector recorded a 34.2% gain, whereas the non-residential sector was down 7.9% from the same period in 2001.

Rub shoulders with Canada’s top home improvement retailers. Register now for the Hardlines Conference Series, September 12-13, at the Four Points Sheraton near the Toronto International Airport. Click here for more information! For a hotel room, you must call: 905-624-1144. They still have some rooms available, but the rate has gone up.

Toronto, ON – Remerchandising, more hardlines and cleaner yards are just some of the initiatives under way for Rona‘s Cashway acquisition. The 60 stores throughout Ontario are in the process of being refurbished, with about a dozen completed already this year. Stores that have been upgraded recently include Milton, Niagara Falls and Huntsville.

According to Rob Wilbrink, vice-president operations and development for Rona Ontario, the company plans to work its way right through the chain and upgrade all the stores eventually. The fresh look includes new racking, better merchandising and increased assortments of hardlines. “We’re putting more focus on the back end and we’re now bringing in more retail oriented people from the Lansing side,” says Wilbrink. “The hardlines products are good for margins and support the building materials side.”

Another strategy for bringing the Cashway stores up to Lansing standards is their conversion to Omni, from a near-obsolete Tomax system. This will enable the Cashway stores to interface with the rest of the Lansing and Revelstoke stores, which operate on a platform by JDA.

Overall, Wilbrink is confident about the future of the former Cashway stores. “There’s a lot of strength within the organization in terms of local management and their involvement in the community. Turnover at the Cashway stores is very low, and we have staff in many of them that have been there for a lot of years.”

However, as Rona consolidates its Lansing and former Revy stores in Ontario, the Cashways in Burlington, Stoney Creek, Ajax and Nepean had to be shuttered. A store in Ilderton, northeast of London, is currently in the process of being shut down, as well. Other stores, such as one in Windsor, which is right down the road from the Building Box there, will be left intact for future evaluation.

The new division will serve 450 stores and have 90,000 employees. The change leaves Home Depot with eight divisions instead of nine and helps improve operating efficiencies, chairman and CEO Bob Nardelli said in a prepared statement.

Tom Taylor, president of the Southeastern division since January, will lead the combined operation. John Wicks, president of the Mid-Atlantic division, will join the merchandising team.

Home Depot closed its Northeastern U.S. buying office last fall and combined two divisions back in January. A new unit to service stores in the U.S. Southeast and Caribbean was formed in January 2002 by closing the Southern division in Tampa, FL and rolling it into the Atlanta-based Midsouth division. At that time, Taylor was put in charge of the division.

The changes were adopted so Rona’s structure would be better suited to participate in capital markets. The by-laws adopted last week affect the procedures for sending notices of meetings to the holders of common shares. Those notices will be repealed, those types of common shares will disappear in the event of a public offering.

The quorum to hold a shareholder meeting will be reduced from one-third to 20% of the shareholders of outstanding voting shares, which brings it more in line with general practices on the Canadian markets.

Finally, directors will no longer be differentiated as either outside directors, inside directors or merchant shareholder directors. All directors will be recognized on the same footing.

The modifications will take effect immediately on going public, and the deadline for this is the end of 2005. According to Rona spokesperson Sylvain Morrisette, the company recognizes two windows of opportunity for an IPO: between July 2004 and December 2004, or between July 2005 and December 2005. “But these are not the only periods. we can go anytime. It depends on the market and on the decision of the board.”

Facing the realities of a maturing marketplace and aging stores, Home Depot says it will start spending more money on upgrading existing stores. This year, 85% of the retailer’s capital spending budget of US$3.6 billion will go toward 200 new stores, leaving 15% for upgrades to existing stores. However, in future, more will be spent on older stores.

Wal-Mart saw net sales in August reach US$18.37 billion, up 11% from US$16.53 billion a year earlier. However, same-store sales rose only 3.8%, below the company’s own forecast of between 4% and 6%. Hot weather in the Northeast slowed things a bit. At the Wal-Mart division, same-store sales rose 4.3% and total sales climbed 12% to US$11.78 billion. Same-store sales at the Sam’s Club warehouse division rose 1.1%, while its total sales increased 6.8% to $2.38 billion.

Costco Wholesale Corp. reported net sales of US$3.01 billion for the four weeks ended September 1, 2002, an increase of 10%. For the fiscal year, net sales rose 11% to US$37.98 billion from $34.14 billion.

A lawsuit in Rhode Island is the first to try and hold paint manufacturers accountable for lead poisoning. Eight companies have been cited in the suit, which has been filed by the state 25 years after lead paint was banned there as a health hazard.

Mike Frame has been appointed development manager for the Central region for Rona Ontario. He was formerly at D.H. Howden. (416-241-5129)

Mortgage rates continue to come down, by up to a quarter of a percentage point. TD lowered its short-term rates (one-year open and one-year closed mortgages) by a tenth of a percentage point. TD’s new one-year open rate falls to 6.1%, while the one-year closed moves to 5.30%. All terms from two years to 10 years were trimmed by .25 percentage points. The new five-year closed mortgage rate at TD is 6.70%, even less than last week’s rate of 6.80% for a five-year mortgage. Scotiabank lowered all its mortgage terms from six months to seven years by a quarter of a percentage point. Scotiabank’s one-year open mortgage is now 5.90%, while its five-year closed mortgage has a posted rate of 6.65%.

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Longueuil, QC – Construction is underway by Groupe BMR inc. to expand its distribution centre.

The $5 million investment will result in an increase of BMR’s hardware distribution facilities to 120,000 sq.ft. and will accommodate 22,000 SKUs. The building materials warehousing will grow to a total of 65,000 sq.ft.

The construction is scheduled for completion by the beginning of 2003. It is expected to create 25 permanent jobs.

The expansion was made possible by the acquisition of an adjacent 360,000-sq.ft. property, bringing the total of BMR’s existing distribution centre and head offices location to nearly one million sq.ft. The improvement was needed in order to maintain and improve service to the co-op wholesale buying group’s 120 dealers throughout Québec, Eastern Ontario and Northern New Brunswick. BMR also has a warehouse in Saint-Augustin-de-Desmaures, near Québec City.

According to Yves Gagnon, president of BMR, the group wants to provide a full array of hardlines to its dealers. This expanded capacity, he says, will give them the autonomy to do so. “The dealers found it hard to be masters of their own destiny with someone else handling the hardlines supply,” he says.

Last year, Groupe BMR processed $232 million in wholesale sales, while sales by all its dealers totalled $630 million. A member of the Matreco buying group, it is celebrating its 35th anniversary this year.

Boucherville, QC – Rona inc. recorded its best quarterly performance ever in its second quarter, increasing net earnings by a record 113.1%. Consolidated net earnings for the quarter were $18.3 million, up from $8.6 million last year. For the six-month period ended June 30, 2002, net earnings reached $22.1 million, 93.8% higher than the $11.4 million recorded in the year-earlier period.

Rona’s net consolidated sales, that is, the total sales at wholesale plus retail sales by its corporate stores and franchises, were $717.8 million in the second quarter, an increase of 50.1%.

Net sales for the six-month period reached $1.16 billion, a 58.7% increase over the previous year. This growth in sales is largely attributable to the acquisition in June, 2001 of Revy Home Centres Inc. in Ontario and Western Canada. However, same-store sales were up 9% over the same period in 2001, despite poor weather conditions, especially in May.

“Our results show that our recent acquisitions have produced the expected synergies,” said Rona president and CEO Robert Dutton in a prepared statement. He remains “cautiously optimistic” about the rest of the year.

A number of internal initiatives have contributed to the growth, as well, says the company. These include the renovation of several corporate stores, particularly in Ontario, the expansion of the Rona Lansing in Markham, ON and the opening of its 40th big box outlet, a Rona Home & Garden in Ottawa.

Sales by Rona’s big box stores in Québec have increased by more than 15% in the first six months of 2002.

Atlanta, GA – Home Depot has entered the commercial landscaping business with the opening of its first Landscape Supply store in the nearby community of Duluth.

According to the Atlanta Journal-Constitution, the 37,000-sq.ft. store, devoted solely to lawn and garden and landscaping products, is the latest retail concept from Home Depot, which is currently testing several alternative retail concepts, as same-store sales at its traditional stores begin to flag. The market for lawn and garden is estimated at US$34 billion.

Unlike a traditional Home Depot outlet, Landscape Supply will offer outdoor gardening supplies and materials only. While it will be open to the public, it is heavily geared toward contractors, builders and landscape architects. The store offers a greater variety and quantity of live goods at this new location than at a regular Home Depot store.

The 12,000-sq.ft. Landscape Supply store has an additional 25,000-sq.ft. of outside greenhouse on a seven-acre site. It features a separate entrance for contractors, with staff designated to deal exclusively with the trades.

Two more openings, in Woodstock and Kennesaw, GA, are scheduled for September 12, while another two are planned for the Dallas-Forth Worth, TX area. The company has not disclosed any other locations it has in mind.

Terry stood out in the industry as a smart, thoughtful retailer whose company continued to expand amidst the emergence of big box retailers in communities such as Winnipeg. In 1992, the Western Retail Lumberman’s Association named him “Mr. Lumberman of the Year.” He was also a strong supporter and friend of Hardlines.

His community activities included the Parkland Regional Health Authority, the Dauphin Lions Club and the Dauphin Men’s Curling Club, of which he was a life member. Terry leaves behind his wife Hazel, son Jason and his wife Laura, and daughter Rhea and her husband Paul Chard, plus three grandchildren.

Profits for Hudson’s Bay Co. in its second quarter were $4.7 million, down from the same period last year. Sales were $1.69 billion, down slightly from last year’s $1.7 billion. Sales at Zellers were up 0.5% year-over-year, while sales at the Bay stores decreased by 2%. Same-store sales increased 0.4% at Zellers and decreased 5.5% at the Bay, but margins narrowed for Zellers, hurting the company’s bottom line.

Home Depot‘s at-home services are taking off, as 2Q revenues for this division grew from US$395 million to US$500 million year-over-year. The company estimates that the “do-it-for-me” market is worth US$180 billion. Home Depot offers installed sales for everything from ceiling fans and windows to kitchen cabinets.

Sears Canada has relaunched six former eatons stores as urban Sears stores. It also opened two stores last week: Maisonville department store in London, ON was reopened after a 12,000-sq.ft. expansion, while a brand new store was unveiled at the Rosemere Shopping Centre in Rosemere, Québec.

Waters Instruments Inc. had 4Q net sales of $8.5 million, up 55% over the same period a year earlier. Sales for the year reached $25.3 million, a 66% increase. Profit for the year increased by 49% to $1.28 million, from $863,000 in fiscal 2001. Sales at the company’s Zareba Systems division, which now represent 77.6% of the company’s overall sales, more than doubled in fiscal 2002.

Richelieu Hardware Ltd. has signed an agreement in principle to acquire 75% of the shares of Menuiserie des Pins (L.F.) Ltée. The company specializes in products designed for window and door manufacturers currently supplied by Richelieu. Founded in 1946, it has annual sales of $8 million, mostly in Québec. Set to close in mid-September 2002, the transaction is subject to a due diligence.

Rob MacDonald has joined Ace Hardware Canada in charge of store planning and design. His background includes Zellers and Home Depot Canada; he was most recently at The Building Box. (905-475-1188)

Pierre Racette has joined National Manufacturing of Canada as vice-president of national accounts and sales. A veteran of both the manufacturing and retail sides of the hardware business, Racette will operate out of National’s facilities in Cobourg, ON and report to Bill Medland, president of National. (905-372-9623)

At Grant Brothers Sales Ltd., Debbie Lambert has been appointed national accounts manager, Hardware Division, based in Grant Brothers’ head office in Mississauga. She will be responsible for leading GBS’s sales program to the major retailers and distributors across Canada. (905-852-9930)

Bernie Owens has been appointed vice-president of sales for Canada at BPC Westroc, effective September 1. Reporting to Don Moses, senior vice-president, sales and marketing, he will be responsible for Westroc’s wallboard and ceiling sales in Canada. (905-823-9881)

Dean Albonese has been named national sales manager for Better Living Products of Canada, effective immediately. In his new position, Dean will be responsible for the day-to-day sales management of the Canadian Division with a primary focus on the retail segment of the business. Dean joins the company from GSW Thermoplastics. (905-264-7100)

Michael Bennett has joined Reckitt-Benckiser as the regional manager, calling on the likes of Costco, Canadian Tire and Shoppers Drug Mart. (416-201-7480)

A new study conducted for the Greater Toronto Home Builders Association reveals that 60.6% of all households in Toronto owned their own homes in 1996. That number has grown to 63.8% today, an increase of about 150,000 homes.

Low interest rates helped push sales of new homes in the U.S. in July. Single-family dwelling were up 6.7% to a seasonally adjusted rate of 1.017 million last month. July was the first time new-home sales in the U.S. passed the one million mark.

The next issue of Hardlines will be out September 3. But don’t worry! The World Headquarters remains open during this time, as we prepare for our Hardlines Conference Series on September 12-13. If you haven’t registered yet, act fast – you’ll want to be part of the most incredible information and networking event of the year!

CONFERENCE HOTEL SPECIAL:
The Four Points Sheraton has extended the deadline for our special low conference rate. Call before August 31 and the price is only $149 per night. Contact: 800-737-3211 or 905-624-1144; email: mevans@fourpointsairport.com . – Michael

Home Depot has a three-year exclusive deal with Trane in the U.S. that’s been under way for just over a year, but Trane’s dealer network in Canada isn’t as widespread as it is south of the border. Therefore, Enbridge got involved, becoming a Trane preferred dealer here.

“This category has been identified as one of the key areas of growth and we’re already well established in areas like kitchens and flooring,” says Keith Bertram, Home Depot Canada’s divisional manager for At-Home-Services. “But the new initiative identifies programs outside the store, aimed at the ‘do-if-for-me’ market.”

Trane products won’t be carried in the stores, but will be displayed in the At-Home-Services selling centres within the stores. During prime time shopping hours, Enbridge Home Services representatives will also be on hand. Purchasing for the program falls under the aegis of Lyne Castonguay, divisional product merchant for plumbing and HVAC.

The pilot program includes all Home Depot stores between Ancaster in the West, Oshawa in the East, St. Catharines in the South and North to Orillia. The retailer intends to go national with the program in time, says Bertram, who was himself formerly with Enbridge. He says that company wants to go national, and the Home Depot alliance will give it the means to do so as the program is rolled out coast-to-coast.

Home Depot Canada already has a national carpet and upholstery cleaning service, while duct cleaning, window replacement and roofing programs are gradually expanding into all areas of the country, as well. At-Home-Services is enjoying growth “in the high double digits” and Bertram’s team is on the lookout for new opportunities.

The Debert distribution centre supplies Home dealers in Eastern Québec and the Atlantic provinces, including Iles-de-la-Madeleine and St. Pierre et Miquelon. The facility, which was built in 1980, recently underwent a conveyor retrofit and the addition of extra storage bins to improve productivity.

Additional distribution centres are located in Wetaskiwin, AB, Elmira, ON and St. Jacobs, ON, totalling more than two million sq.ft. of warehousing space and housing 60,000 SKUs.

Last year, 53,310 industry trade professionals attended the show, with attendees from 90 countries represented. It also shrank down to three days from four in 2001. This year, the show was reduced to two buildings and included a housewares section for the first time.

Toronto, ON – The latest trends in retail worldwide will be given fresh commentary, as retail guru John Williams, of J.C. Williams Group, joins the Retail Strategies Symposium on September 12, 2002. Williams focuses on business strategies for retailers, shopping centres, cities and manufacturers. He heads up one of the foremost retail and shopping centre consultancies in North America.

At the Hardlines Marketing Conference on the following day, September 13, David Day has agreed to participate in our breakout session on maximizing public relations. Day, formerly director of communications at Home Depot Canada, is now vice-president of Temple Scott Associates, a leading public relations and government relations firm. He will talk about how to drive sales through PR (a tool that is drastically underused in this industry – Michael).

“It’s an effective way to drive the bottom line,” says Day. “Looking to the future, both manufacturers and retailers need to make this part of their marketing arsenal.”

He’ll be joined by Michael McLarney, editor and publisher, etc., who’s been on the receiving end of some pretty dismal PR over the years. He’ll explain what works and what doesn’t when communicating with the media.

For more information about the Hardlines Conference Series, September 12-13, 2002, click here for more Conference details or call Nancy at 416-489-3396, nancy@hardlines.ca Click here to register.

Sodisco-Howden Group recorded revenues of $148.4 million for the second quarter, up 24% over last year. The increase was due largely to added business from the acquisition of the hardware and building materials assets of Marchands Unis and from the strong performance of the LBM sector. 2Q profits reached $1.7 million. Revenues for the first six months were $235.0 million, up 22.2%, but year-to-date losses deepened to $1.0 million from $0.6 million a year earlier.

If the real estate was available, Home Depot would open two more stores in Calgary, says the Calgary Herald. While in town to help with an all-women Habitat for Humanity event last week, Home Depot Canada president Annette Verschuren bemoaned the lack of available sites, where the retailer already has four.

Coming out from under its bankruptcy protection, the management of White Rose has re-incorporated as White Rose Home & Garden Centres Ltd., named Fern Reeves to head up the turnaround, and will buy back 24 White Rose locations from the receiver.

After a brief absence from the market, McCulloch Canada is back under new owners, Taiwan-based Jenn Feng Industrial Co. Ltd. McCulloch carries a full line of gas and electric products and power tools. Jenn Feng produces for Hitachi, Ryobi Australia, Metabo and Milwaukee.

GSW Inc. has purchased the assets of the vinyl gutter business of Bemis Manufacturing Co. as part of GSW’s Building Products Division in Barrie, ON. The deal includes patents, trademarks and tooling relating to its Rain Master brand and is intended to strengthen GSW’s vinyl gutter and downspout business throughout the U.S. and Canada. Terms of the deal are not disclosed.

Do it Best Corp. ended its 2002 fiscal year on June 30 with US$2.39 billion in sales, up 9.5%. Rebates reached US$95.7 million, or 12.9% of total purchases, to the co-op retailer’s 4,300 members. During the fiscal year, Do it Best added 266 new members.

Lowe’s is working with its suppliers to convert pressure-treated wood from CCA to Alkaline Copper Quaternary (ACQ) lumber by this fall. The company wants to stay ahead of the EPA’s voluntary phase-out of the arsenical treating method,6 even though no reasonable risk has been attached to CCA.

Total sales for Wal-Mart in its second quarter were US$59.694 billion, an increase of 13.1% over last year. Net income for the quarter was US$2.038 billion, up from US$1.622 billion. Net sales for the six-month period were US$114.654 billion, an increase of 13.7%.

Costco Wholesale Corp. reported net sales of US$2.96 billion for July, up 10% from US$2.70 billion in July 2001. For the first 48 weeks of its 2002 fiscal year, the company reported net sales of US$34.97 billion, an increase of 11%.

The FBI, working with agents from the Securities and Exchange Commission, and a U.S. House subcommittee are gathering evidence as part of a probe into bankrupt Kmart Corp., to determine if charges should be laid against any Kmart executives following the retailer’s Chapter 11 filing last January.

Don Fawcett has joined Ingersoll-Rand Security and Safety as national accounts sales manager. He was formerly with Scott’s. (905-278-6128)

The folks at Imperial Manufacturing Group have asked me to clarify that Bill Mair‘s new role with the company is of a contractual nature only. He comes to IMG as an independent contractor to launch new marketing initiatives, not as a full time product manager. (506-523-9117)

Larry Mercer, executive vice-president in charge of store operations for Home Depot in Atlanta, will retire later this year. A 23-year company veteran, Mercer will remain with the company as an advisor to Home Depot CEO Bob Nardelli until February 2004.

Please note that Hardlines will be published on August 19. There will be no issues on August 5, August 12, and August 26. The World Headquarters remains open during this time however, as we prepare for our incredible Hardlines Conference Series in Toronto, September 12-13. – Michael

The survey, Benchmarking 2002, was conducted jointly by Hardlines Quarterly Report and the Canadian Retail Hardware Association and appears in the latest issue of Hardlines Quarterly Report. While it shows yearly improvement in the operations of hardware retailers and building centre dealers, another study in the same issue shows that the growth of independent dealers has kept pace with the growth of the industry overall, but has failed to increase its market share. Big boxes, meanwhile, have increased their share and now account for almost one-fifth of the overall market.

The latest issue of HQR also features the only accurate evaluation of the size of the home improvement market at retail, and breaks out the growth of five key retail formats within that market. This issue’s Retail Report considers the growth of buying groups in Canada, and their need to seek further consolidation to better compete against big boxes. An updated organizational chart of all the key buying groups, complete with their affiliations, provides a ready reference for figuring out the connections among the various groups.

HQR is dedicated to making sense of home improvement retailing today. Each issue is filled with the latest proprietary research that tracks the growth of the retail home improvement industry in Canada. To order, fax Nancy Wright at 416-489-6154, e-mail nancy@hardlines.ca or click here. Call Nancy at 416-489-3396 and ask how you can get HQR AND the Hardlines Industry Report and save $396!

In addition, experts on tax and export law will share tips to keep paperwork down and get sales up. The benefits of Canadian participation in the world’s largest hardware show, Practical World: the Cologne International Hardware Fair/DIY’TEC, will also be presented.

Any company looking for more international customers or greater access to global buying will benefit from this workshop. It includes practical tips on finding representation, meeting buyers and stickhandling the ins and outs of foreign business.

“Global selling: Tools for Opening Overseas Markets” is presented free of charge as part of the two-day Hardlines Conference Series, September 12-13, 2002. Day one features the Global Sales seminar in the morning, followed by the Retail Strategies Symposium in the afternoon. Day two features a full day of presentations and workshops in our Hardlines Marketing Conference.

For more information about the Hardlines Conference Series, September 12-13, 2002, call Nancy at 416-489-3396, nancy@hardlines.ca Click here to register.

Please note that Hardlines will be published only once next month, on August 19. There will be no issues on August 5, August 12, and August 26. The World Headquarters remains open during this time however, as we prepare for our incredible Hardlines Conference Series in Toronto, September 12-13. – Michael

The Vancouver, Edmonton, Calgary, Toronto, Ottawa-Hull and Montréal markets make up 48% of the retail industry in Canada, says the latest Major Market Retail Report from Kubas Consultants. The Toronto area alone comprises 17% of the national market, while Montréal accounts for another 11%.

Among shoppers surveyed, 75% said they have visited a hardware or home improvement store within last 12 months. Big boxes continue to stir interest, as 70% of shoppers said they’re “very” or “somewhat” interested in shopping at one. However, only 51% of shoppers aged 30-39 cared to venture into a power centre. And the appeal drops as shoppers get older: only a quarter of those aged 65 and older are interested in shopping at power centres.

More than 90% of Canadians shopped in a Canadian Tire store over the past 12 months, followed by Shoppers Drug Mart, Zellers, Wal-Mart and The Bay, says the survey.

The MMMR 2002 Report measures consumer confidence and shopping preferences. It’s based on a survey of 1,540 consumers aged 18 or more. Check out www.kubas.com for more info.

But Rona is prepared to exercise patience given the current poor performance of the stock market. “We’re going to look at the situation month by month and wait until all the planets are in alignment,” Dutton says. “However, I’m sure we’re going to be public before 2005.”

In addition, experts on tax and export law will share tips to keep paperwork down and get sales up. The benefits of Canadian participation in the world’s largest hardware show, Practical World: the Cologne International Hardware Fair/DIY’TEC, will also be presented.

Any company looking for more international customers or greater access to global buying will benefit from this workshop. It includes practical tips on finding representation, meeting buyers and stickhandling the ins and outs of foreign business.

“Global selling: Tools for Opening Overseas Markets” is presented free of charge as part of the two-day Hardlines Conference Series, September 12-13, 2002. Day one features the Global Sales seminar in the morning, followed by the Retail Strategies Symposium in the afternoon. Day two features a full day of presentations and workshops in our Hardlines Marketing Conference.

For more information about the Hardlines Conference Series, September 12-13, 2002, call Nancy at 416-489-3396, nancy@hardlines.ca Click here to register.

Wholesalers report good sales for June, though down modestly from May, according to the Canadian Institute of Plumbing and Heating. June sales were up an estimated 5% from June 2001 and year-to-date sales are up 10% from 2001. Business is up in all regions of Canada: Québec and Ontario are up an estimated 10%, while year-to-date sales in British Columbia are ahead 7%.

The Consumer Price Index advanced 1.3% in June from June 2001, after rising 1.0% in May, says Stats Canada. Just over half of the advance in June came from an increase in cigarette prices due to a hike in taxes.

Emco Ltd. announced it will not proceed with the acquisition of the wholesale waterworks supply business of bcgSERVICES Inc., a wholly-owned subsidiary of BC Gas Inc. Emco announced back in April that it had signed an agreement to acquire the business from BC Gas. However, the two sides couldn’t agree on the price and have terminated the agreement.

Net sales by Canfor Corp. in its second quarter were $577.1 million, an increase of $70.4 million over the previous quarter, largely due to higher lumber shipments, higher pulp prices and additional log sales on the B.C. coast. 2Q net income was $70.2 million, up from $10.1 million for the same period in 2001. Net income for the year to date was $81.3 million, up from $28.9 million a year earlier. Net income for the quarter benefitted from the reversal of $48.0 million in previously expensed countervailing and anti-dumping duties and a $10.0 million after-tax gain on the sale of a sawmill.

Sales for Doman Industries in the second quarter were $158.2 million, up from $214.8 million a year earlier. Sales in the first six months of 2002 were $290.0 million, compared with $434.7 million. EBITDA in the second quarter was $22.9 million, compared with $10.9 million in the second quarter of 2001.

Slocan Forest Products earned $43.4 million in the second quarter, up 73% from $25.1 million a year earlier, because of an accounting change that reflected refunded duties in the ongoing Canadian-U.S. softwood trade fight.

The board of directors of Emco Ltd. has decided to initiate a strategic alternatives review, as parent company Masco Corp. wants to sell off all or part of the 42.1% ownership it has in Emco.

Abitibi-Consolidated Inc. reported a drop in 2Q profits, which fell to $203 million from $232 million a year earlier, due to lower newsprint prices and fallout from the U.S. softwood lumber dispute. Sales for the second quarter fell to $1.39 billion, compared with $1.5 billion a year earlier.

The Canadian Hardware and Building Materials Show has added to its sales team: Lynn Cronin has been appointed sales associate. Cronin is a 17-year veteran of industry trade shows, including the National Home Show, the LBMAO’s erstwhile Canadian Home Centre Show, and the Ottawa Home Show … Jonathan Lee has also been named sales associate for CHS. He was most recently acting senior vice-president of Canada Cash Control. (905-821-3470)

The following appointments have been made at the power tool division of Robert Bosch Inc. in Canada: Greg Ferguson has been named brand manager – Skil Power Tools. He joins Bosch from Supplierpipeline, where he served as marketing manager … Bryan Sue has been appointed national account manager for Skil/Bosch, responsible for key customers, namely Wal-Mart, Home Hardware, Canadian Tire and Sears … Tony Varghese joins the company as product manager – accessories. Formerly with Rona/Lansing in Toronto, he has recently completed an MBA at McMaster University. (905-826-6060)

Michael Robitaille is no longer with Maxtech Manufacturing, where he served as sales and marketing manager. (519-885-5336)

Office Depot has appointed David W. D’Arezzo executive vice-president, merchandising at its Delray, FL head office. Formerly senior vice-president of merchandising for Wegmans Food Markets, he will be in charge of merchandising for the company’s retail, contract, catalogue and e-commerce businesses. (561-438-4930)

KEEP INFORMED.
VISIT hardlines.ca – EVERY DAY!

Surrey, BC – While its member sales remain steady, the greatest growth by Irly Distributors has been to its non-member customers.

Irly’s wholesale division has grown quietly over the past several years, to the point that Irly now ships to 82 accounts in British Columbia. In 1997, it had only 16 such customers. The growth has not just been organic. Irly is devoting more energy to cultivating this business, to the point of adding a dedicated sales person on the road, complementing the efforts of the existing team.

While buying groups that do their own warehousing are more common in Québec, the practice is almost non-existent elsewhere in the country. That makes Irly unique. From a 185,000-sq.ft. warehouse, it ships most of its product to its 56 member stores, which operate under the name Irly Building Centres.

Stuart Joule, executive vice-president and general manager of the group, says Irly’s local 24-hour delivery service has appeal for a growing number of dealers, including those with other affiliations.

“They’re doing it very simply for convenience. We’re pricing very aggressively and we’re convenient,” he says. “Shipping from the east can take four to five days.” Back orders can end up taking weeks to refill. “When a retailer has an empty shelf, he wants it filled,” Joule adds, noting that Irly’s fill rate is running at more than 96% this month.

By shortening lead times for replenishment of high-moving items, Irly has established itself as a handy alternative. The most popular products shipped are hardware, paint and adhesives. They also ship “bits and pieces of lumber. We’ve seen an opportunity as wholesale activity of our competitors in the province has centralized back to Ontario,” he says.

Calgary, AB – With its focus on “non-retail,” Allroc Building Products Ltd. is enjoying growth of its membership, half of which is gypsum supply dealers. However, the privately owned buying group is looking for a mix of both GSD and traditional building centres.

The focus, says Bob Hancock, vice-president of purchasing, sales and marketing, is on gypsum and related products, both to GSD and traditional building centre customers. In fact, about half the group’s 95 members are building centres, often with a strong commercial orientation.

Allroc recently added two stores in the West, one in Grande Prairie, AB and in the U.S., in Bloomington, MN. That’s the eighth Allroc member south of the border. Six of those stores are part of Winroc Corp., Allroc’s wholesale arm, and in a nice bit of vertical integration, one of the group’s largest members.

Ron Kent, operations manager, Allroc East, says the U.S. expansion is important to the group. “It’s a trend in the U.S. Buying groups are growing there. They’re not as widespread in the U.S. as they are here. They’ve operated more as associations in the past. They haven’t really maximized their buying power.”

Kent says buying groups serve the industry much more effectively in Canada than in the U.S. The smaller size of the Canadian market has made pool buying more necessary.

Allroc is also adding stores in the East. Two of them were recently signed in Northern Ontario, Cochrane and New Liskeard, putting the total number of Allroc members in that province past 20. In Atlantic Canada, a couple of key accounts are expected to be signed in the coming months.

Growth in 2003 is expected to reach 1.6%, followed by 1.3% in 2004. Because of Voisey’s Bay, Argentia, and White Rose, Newfoundland and Labrador will experience the strongest construction growth of all provinces. Rising interest rates, coupled with reluctance by the private sector to invest in capital structures, will contribute to the slowdown in coming years.

TruServ Canada Cooperative Inc. has created a new logo that incorporates a stylized Canadian maple leaf in place of a five-pointed star. The new look reflects the 100% Canadian ownership of the Winnipeg-based co-op since it repatriated ownership from TruServ Corp. in Chicago in October 2001.

West Fraser Timber reported 2Q earnings of $71 million on sales of $420 million, compared with earnings of $78 million on sales of $416 million in 2Q 2000. The earnings for the quarter include a reversal of duties of $17 million related to the softwood lumber trade dispute. However, earnings for the first half of 2002 were $98 million on sales of $800 million, up from $74 million on sales of $791 million in the first half of 2001. The company showed a loss on discontinued operations for the sale of its Revy division, but still has some real estate to sell off.

Total revenues for Sears Canada in its second quarter ended June 29 were $1.593 billion, a 0.5% increase over $1.585 billion last year. Merchandise sales increased 0.7%, but same-store sales fell 3.0%. Earnings reached $24.8 million, compared with $8.8 million last year.

On sales of more than $900 million, Shoppers Drug Mart made $40.9 million during the three-month period ended June 15, more than double the $17.6 million of a year earlier.

For the year ended May 31, The Jean Coutu Group had sales of $3.6 billion, compared with $2.9 billion for the same period last year, an increase of 22.6%. Net earnings reached $139.9 million.

Bill Mair has joined the Imperial Manufacturing Group as product manager – venting categories. Mair was previously national sales manager – retail division with Kanalflakt Inc. He reports to Richard Lépine, executive vice-president, sales & marketing. (506-523-9117)

Fred Archer is no longer with Balmer Studios, the retail division of the Balmer Group of companies, where he had served as president. (He can be reached at 416-458-9629)

Wholesalers sold $34.5 billion worth of goods and services in May, a drop of 1.2% from the previous month, says Stats Canada. However, May’s decline follows six months of consecutive growth. Both the hardware, metals and plumbing and heating category and lumber and the building materials category were down 1.3%. However, these categories were up year over year (2.6% and 6.8% respectively).