QUEBEC CITY ― At its latest trade show, held last week in Quebec City, BMR Group unveiled a new service offering for its dealers. Called the IMAGINE Program, it was developed by Laval-based merchandising and detailing company RDTS to optimize marketing, sales and store traffic. In its ongoing efforts to improve the customer experience, BMR will begin implementing the merchandising program beginning January 2020.

“We are really pleased to present this brand-new program to our dealers, which, in addition to offering more tools for powerful merchandising, is free of charge for them,” says Martin Ménard, BMR’s vice-president hardware and imports.

The program will be applied initially to the following departments: hardware, plumbing, electrical and paint. BMR plans to deploy the IMAGINE program to other departments in 2021. Vendors will contribute to the cost of executing the service.

BMR expects the program to deliver on a number of levels. One aim is to improve dealer loyalty to the BMR banner, while improving customer service. IMAGINE will also be used to standardize offerings in the stores across the BMR network, while increasing the visibility and availability of products through both national and regional planograms.

“This initiative reiterates our commitment to provide impeccable in-store service while continuing to help and support our dealers in their development,” Ménard adds. “We firmly believe that IMAGINE is a winning choice for both our vendors and the members of our network.”

VAUGHAN, Ont. — WSB Titan has announced that its Watson Building Supplies division has purchased Rigney Building Supplies in Kingston, Ont. It will become Watson’s seventh location in Ontario.

Previous owners Claudio and Nadia Saccon will stay on to manage the location, along with their team of 23 employees. They will report to General Manager Chuck Quick. In addition, Rigney’s purchasing arrangements will now be handled through Watson Building Supplies.

In a letter to suppliers, the principals at Watson stated, “This purchase is an important strategic component of our long-term growth strategy and we are thrilled with the opportunity to work with the many valued employees and customers of Rigney for many years to come.” The letter was signed by Doug Skrepnek, president of GMS Canada and head of Watson Building Supplies; Doug’s son Evan Skrepnek, who has stepped in as VP of Watson Building Supplies; and Travis Hendren, EVP of WSB Titan and a VP with parent company Gypsum Management & Supply, Inc. (GMS) in the U.S.

“Rigney is a great acquisition with the same type of culture that we’ve enjoyed at Watson for so many years,” says Doug Skrepnek. “And it rounds out our geographic footprint in Ontario.” The company has six other locations in the province.

WSB Titan, which is headquartered in Vaughan, Ont., just north of Toronto, serves residential, commercial and institutional markets with wallboard, insulation, lumber, roofing, steel framing and other complementary building products. Purchased in 2018 by GMS, its roots are a partnership of Watson Building Supplies in Vaughan, Shoemaker Drywall Supplies, based in Alberta, and Le Groupe Beauchesne in Quebec. (Beauchesne is not part of the GMS takeover. However, it remains a shareholder in Titan.)

MONTREAL ― At last month’s RONA-Ace Canada Buying Show in Montreal, Ace dealers were out in full force, riding the high of another year of growth.

At a time when many big boxes are feeling the pinch from e-retailers like Amazon, Ace has its constituency locked down. “For a lot of communities, Amazon can’t get to them,” says Nelson Lemos, director, dealer sales and relationship. “[Ace is] their only way.”

Not that Ace is neglecting the online channel itself. On the contrary, buy online, pick up in store (BOPIS) orders are key drivers of traffic both in store and on social media, while special orders also allow dealers to make the most out of the floor space.

Appliances are a growing category, says Lemos, with some 30 dealers currently looking to incorporate them into their offerings. By fulfilling online orders in store, dealers can tap into the market for appliances without needing to carry a large number of bulky items.

Meanwhile, Ace is putting Lowe’s Canada’s resources to work for dealers. “We’re focused on the dealer, ensuring they’re profitable and building traffic,” says Marketing Director Richard Hill, citing an improved flyer program and Ace’s commitment to “leveraging data from the relationship with Lowe’s.”

In the course of the gala at the end of the show’s first day, Ace Canada had its own Builders of Success categories alongside RONA’s. Ace Victory Building Supplies of Mackenzie, B.C., took the Community category. Ace Leader in Leader, Sask., was recognized as the Up and Comer, while Ace Building Centre Vanderhoof, in Vanderhoof, B.C., won for Lifetime Achievement.

The Vanderhoof store is “an example of a dealer that’s really pushing the envelope and serving its community,” says Lemos. It has one of the most extensive selections of appliances of any Ace Canada dealer, in a showroom that also includes kitchen and lighting categories.

Thirteen dealers were honoured for their advances in e-commerce in another indication of the growing importance of Ace’s digital platform. “Not only do they have great sales online, but they’ve also done a great job of promoting the Ace brand and leveraging social media,” Lemos adds.

NATIONAL REPORT ― Buying group leaders from across the country are watching current business conditions in anticipation of the direction of the industry—and the future for their members.

Bob Holmes is general manager of TORBSA, the Bolton, Ont.-based buying group. His observations include keeping a close watch on the political scene on both sides of the border to anticipate what will happen with issues such as tariffs.

“I think the tariffs certainly haven’t helped and, in some cases, we were talking to one manufacturer yesterday who told me that his business was off 20% all because of tariffs. So it does create an issue and it does slow things down and I think we’re going to continue to see that until we understand who the next President of the United States is going to be next year.”

Steve Buckle, president of Winnipeg-based Sexton Group, shares Holmes’s concerns about tariffs. “The overall economy globally and particularly the unpredictable application of trade tariffs are dampening Canadian economic prospects. This uncertainty carries forward into key product lines such as wood and steel-based products, where prices are proving challenging to forecast.”

Holmes is also concerned about margins. “Business across the country in some commodity products is off anywhere from 20% to 25%. And we don’t see that making up any sort of ground over the balance of the year.” He wonders whether his dealers are going to make up any of the difference that’s been lost already this year.

At BMR Group, based in Boucherville, Que., CEO Pascal Houle is keeping his eye on the growth of online selling. “Not surprisingly, e-commerce remains a ‘must’ within the retail industry,” he notes. “BMR will continue to evolve, improving substantially its online selection for hardware and building materials. We will also move toward our digital shift, which will help us acquire new technologies to enhance our daily operation management.”

The easing of mortgage rules should help housing starts in 2020, says Bernie Owens, president and CEO of TIMBER MART, even though predictions for next year anticipate a further decline in housing starts.

Looking for opportunities, Buckle at Sexton says his members will look for ways to tap into smaller home building as multi-unit housing―condos and townhouses―replace single-family dwellings. And more importantly, he’s watching the shift to renovation spending. “There is a great opportunity to capitalize on the booming renovation market.”

Owens at TIMBER MART agrees. “The resale and renovation markets should benefit, and we believe this will continue to be a viable business opportunity for the independent.”

(This article is excerpted from a larger feature in the latest issue of our sister publication, Hardlines Home Improvement Quarterly. HHIQ goes out four times a year to 11,000 dealers and store managers across the country. Click here for more info!)

Henkel has announced that CEO Hans Van Bylen will leave his position “for personal reasons” at year’s end, with CFO Carsten Knobel taking the reins on January 1. Knobel joined the company in 1995 as assistant to the management board.

SFA Saniflo has announced the appointment of Teresa Cardona as new marketing and communications manager for North America, effective November 1. In her new role, Cardona, previously marketing and social media manager at Aramark, will lead Saniflo North America’s marketing and communications team from its New Jersey head office.

DID YOU KNOW…

… that the 2019-2020 Hardlines Market Share Report breaks out the sales and store counts of every key home improvement banner by province? This invaluable marketing tool will help you identify sales and market opportunities and align your own forecasts with regional market breakouts. Now available in a special package with our Hardlines Retail Report, which provides valuable forecasts for the industry for 2019 and 2020, including analysis of the top players. (For more info, click here!)

TORONTO ― Canadian Tire Corp. has released its third-quarter results for the period ended September 28. Consolidated retail sales increased $39 million, or 1.0%, in the third quarter. Excluding Petroleum, consolidated retail sales were up 2.7% over the same period last year. Consolidated revenue increased $5.4 million, or 0.1%; excluding Petroleum, it was up 1.7%. For the retail segment, revenue decreased $13.6 million, or 0.4%. Excluding Petroleum, retail segment revenue increased 1.2%. Canadian Tire Retail sales increased 2.7% and comparable sales were up 2.4%.

MOORESVILLE, N.C. ― Lowe’s Cos. said it will phase out rugs and carpets containing PFAS chemicals, which have been associated with cancer risk in some studies. A spokeswoman for the company told the Associated Press the transition away from the products began a year ago. Home Depot announced in September that it would remove products containing PFAS chemicals by year’s end.

ST. JACOBS, Ont. ― Quincaillerie Gérard Raymond Home Hardware, which has served Pierrefonds and Montreal’s West Island for more than 60 years, has opened a second location. Located in L’Île-Perrot, the new store boasts an 8,000-square-foot retail space. “We are very proud to extend the offer of our services and vast selection of Home Hardware products to the community of L’Île-Perrot,” said dealer-owner Claude Lavoie. Quincaillerie Gérard Raymond joined the Home Hardware banner in 2015.

BURLINGTON, Ont. — IKEA Canada had sales of $2.53 billion for the fiscal year ending August 31, an increase of 6.1% over the previous year. The home furnishings retailer also reported strong digital engagement, with 117.2 million visits to IKEA.ca, representing a 12% lift that contributed to IKEA Canada’s e-commerce sales for the year of $261.2 million.

SUPPLIER NEWS

MADISON, Wis. — Spectrum Brands has sold its four-storey head office to Harbor Group International, a private real estate investment firm. The property, built in 2013 and renovated in 2017, spans 252,122 rentable square feet. It is 100% net leased to Spectrum Brands through 2034.

VANCOUVER ― Acadian Timber Corp. generated sales of $25.4 million in the third quarter, compared to $26.6 million in the prior-year period. Operating costs and expenses were $20.6 million during the third quarter, compared to $21.2 million in 2018. The net loss of $10.9 million, or $0.65 per share, was $16.8 million below the previous third quarter’s income of $5.9 million, or $0.36 per share.

LANCASTER, Pa. ― Armstrong World Industries has reached an agreement to purchase MRK Industries, a manufacturer of specialty metal ceilings and walls with annual revenues of approximately $14 million. That transaction is expected to close in the fourth quarter.

NOTED

Nearly half of Americans (45%) have used cellphones while inside a bricks-and-mortar store to find online reviews of a product or to find better prices. That’s just one of the findings of a recent survey of U.S. adults by Pew Research.

OVERHEARD…

“Our business is performing well and as one of Canada’s largest e-commerce retailers, having generated more than $500 million in sales in the last 12 months, we are exceptionally well-positioned as we head into our customers’ biggest spending season.”
―Stephen Wetmore, president and CEO of Canadian Tire Corp., on the company’s third-quarter results.

OUT & ABOUT

Team Hardlines is heading to the 24th annual Hardlines Conference this week. We kick off with the RONA Pub Night at 7:00 p.m. tomorrow night at the Kingbridge Centre in King City, Ont. We hope to see you there!

BOUCHERVILLE, Que. — Lowe’s Canada has brought its store detailing services in-house with the development of a new team, called the Merchandising Service Team (MST). The program originated with Lowe’s Canada’s U.S. parent, which introduced MST there at the beginning of 2019.

MST teams are composed of between five and seven store associates whose role is exclusively focused on merchandising tasks at Lowe’s-bannered stores.

They’re responsible for executing resets, but they’re also expected to “snake through the store” to carry out bay servicing. That includes ensuring planograms are properly executed and that labels are all accurate. The MST team must maintain product displays, readjust elevations and reposition products, while providing feedback on merchandising strategies.

According to Anne-Sophie Konrad, senior director, field merchandising for Lowe’s Canada, the goal is “to ensure a steady pace in maintaining merchandising programs in our stores so that they are ‘grand opening ready’ at all times and that customer experience is always at its best.”

The program for the Lowe’s-bannered stores is not the first time the company has relied on designated teams for this service, however, they were for its RONA and Reno-Depot banners only, not for Lowe’s stores. It most recently used Match Merchandising Group. Prior to that, the service had been executed by Montreal-based RDTS through its Imagine program.

So how is MST different from what was in place before? Konrad points out two main distinctions. First, she says, the new system takes pressure off employees and allows them to focus on their regular tasks. “The new MST staff report to the merchandising business unit and is 100% dedicated to merchandising tasks.” This, she adds, will further allow the resets to be more consistent from store to store.

“The second difference relates to our vendors, who benefit from the fact that our MST staff cater to all our bays and products,” Konrad says. “As a matter of fact, the program results in improved merchandising quality throughout our stores, so our stores are more attractive and the overall customer experience is enhanced.”

She adds that vendors will further benefit because Lowe’s Canada expects to be more efficient when executing merchandising projects, such as seasonal rotations.

How has the program measured up so far? Konrad is positive about the initial progress. “I must say that we are very pleased with the results to date. Our stores look better, but we are also increasing our speed to market, which is positive for us, for our vendors and for our customers.”

WORLD HEADQUARTERS, Toronto — The Hardlines Conference will boast a range of presentations about data, what it means and how to apply it to your business.

Paula Courtney is the president of Wiseplum, a user-friendly customer experience insights platform for retailers. She will talk about customer loyalty in the home improvement sector. Paula will share the findings of a 14-month-long study of Canadian consumers who had recently shopped at a home improvement retailer. She’ll be joined onstage by Shawn Stewart, VP loyalty and customer insights at Canadian Tire. In this session, you will learn about how much a home improvement retailer’s revenue is at risk, which problems are the most costly―and ways to recapture customer loyalty.

Peter Norman, vice president and chief economist, Altus Group, will give delegates valuable insight into the economy, housing markets and construction for the year ahead. A regular at the Hardlines Conference, Peter will offer a lively session exploring the outlook for housing starts, renovation spending and other construction activity. Along the way, Peter will also examine what’s new in the economies across the country and what issues are most likely to affect markets in 2020.

Another regular at the Hardlines Conference is Dan Tratensek, executive vice president of the North American Retail Hardware Association and publisher of Hardware Retailing magazine. Tratensek currently oversees NRHA’s research, communications, marketing and training program development. He will share the latest NRHA research on dealer trends and challenges.

Paul Sorrentino of Financeit will address what Financeit sees as the future of the home services business in retail. With a focus on the U.S. market and how U.S. retailers are leading the pack in installation services by connecting manufacturers with dealers and contractors, he’ll share his insights on the trends and patterns he’s identified within the growing do-it-for-me marketplace. And he’ll address some of the key challenges he sees retailers going through when they try to manage these services in-house.

The data stream at the 24th annual Hardlines Conference will round out presentations by retail leaders from across North America.

As Canada’s only truly national event bringing the entire hardware and home improvement industry together, the Hardlines Conference offers an incredible opportunity for delegates to meet in a professional yet casual setting. It will be held November 13 to 14 at the Kingbridge Centre, in King City, Ont., not far from the Toronto International Airport.

(Click here now for a list of all our speakers and to register for the conference!)

INTERNATIONAL REPORT ― The market worldwide for retail home improvement sales reached €594 billion ($861.7 billion) in 2018, and despite its relatively small population, Canada managed to rank number three overall. According to a new report produced jointly by the European Federation of DIY Manufacturers and the Global Home Improvement Network, the market worldwide grew by 1.1% from the previous year, but it lags behind global GDP, which grew by 2.5% last year.

It also falls short of growth in the Canadian market. The retail home improvement industry here grew by 3.8% in 2018 (according the latest annual Hardlines Retail Report.—your ever-helpful Editor). While not a banner year for Canada, its growth nevertheless managed to exceed the performance of many overseas markets.

That may also have something to do with why Canada, with the 10th-largest economy in the world (behind Italy and Brazil) ranks as the third-largest market in the world for home improvement sales―behind the U.S. and Germany.

In fact, 58% of worldwide home improvement sales are generated in North America, says the report, accounting for €343 billion ($497.6 billion). By comparison, the second-largest market is Europe. With overall sales of €173 billion ($251 billion), it comprises 29% of the market worldwide. The Asian-Pacific market represents the third-largest market, at €57 billion ($82.7 billion), followed by Latin America and Africa.

North America and Europe together represent approximately 87% of this market, a combined €516 billion ($757 billion). Approximately 81% of the Global DIY market, some €482 billion ($707 billion), is concentrated in only eight countries: the U.S., Germany, Canada, Japan, U.K., France, Australia and Italy.

(To learn more about this report and to order it for yourself, please contact our good friends at the Global Home Improvement Network.)

TORONTO — Acquiring well-known consumer brands has been an ongoing part of Canadian Tire’s growth strategy since the fall of 2016, and the company expects it to continue its importance in the future.

The latest acquisition, of Party City, exemplifies the retailer’s continued momentum in expanding its consumer brands portfolio in Canada and abroad. While Canadian Tire’s comps overall in the third quarter fell just shy of 2%, sales by its proprietary consumer brands in Canada were up 7%.

Today, Canadian Tire has 16 consumer brands, each with annual revenue more than $100 million. These include Helly Hansen and Party City, which adds not only a brand, but also 65 retail locations across Canada, and puts the company firmly in the home celebration category.

“And just like Party City, we said we will continue to build or acquire brands to strengthen our position in key categories or create new opportunities for growth,” said Allan MacDonald, Canadian Tire’s executive vice president, retail.

Those opportunities extend to sporting goods. CTR has acquired four bicycle brands: Raleigh, Diamondback, Redline and IZIP. In 2018, the company sold more than 600,000 bicycles; it will continue to use house brands to drive dominance in this and other select categories.

“We’ve learned a lot,” said MacDonald. “We’ve got a good feel for where we have opportunities to shore up some categories with iconic brands and where we have some opportunities to drive growth.”

Geneviève Fortin has joined garage-door technology company Garaga as communications advisor. Before joining Garaga, she was content editor for Contrast Lighting. Fortin replaces Jean-François Morin, who has retired.

DID YOU KNOW…

… that space is filling up fast for the 24th annual Hardlines Conference? Maybe it’s the incredible lineup of speakers. Or perhaps it’s the amazing venue, the Kingbridge Centre. Whatever the reason, people want to network and do business and share and learn. Don’t miss out! November 13 and 14 at the Kingbridge Centre, not far from the Toronto International Airport. Click here for more info!

HOFFMAN ESTATES, Ill. ― Sears parent Transform Holdco is taking advice from investment bankers on potential sales of its assets such as DieHard, sources have told the Wall Street Journal. The holding company, a creation of Eddie Lampert, is trying to turn around the fortunes of Sears and Kmart, which it bought out of bankruptcy at the beginning of this year. The DieHard brand was exclusive to Sears until a 2017 agreement made its products available on Amazon.

MOORESVILLE, N.C. ― Lowe’s Cos. has opened its first Lowe’s Outlet store, offering discounts on appliances with superficial blemishes. The former Orchard Supply Hardware location in Monrovia, Calif., is about one-third the size of an average Lowe’s store. The merchandise is not used, but rather it is scratched or dented.

BRENTWOOD, Tenn. ― Tractor Supply Co. reported that its Q3 net income came to $122.1 million, up 4.6% from $116.8 million a year ago. Diluted earnings per share increased 7.4% to $1.02 from $0.95. Net sales for the quarter increased 5.4% to $1.98 billion, compared to $1.88 billion in Q3 of 2018. Comparable store sales rose by 2.9%, as compared to an increase of 5.1% in the prior year’s third quarter.

SUPPLIER NEWS

ST. PAUL, Minn. ― Third-quarter revenues for 3M Co. fell, hit by weakness in the Chinese market and in certain key industries. In total, revenues fell to $7.99 billion from $8.15 billion a year ago. Sales rose by 0.8% in the U.S. and by 0.6% in the Latin America-Canada region.

MACKENZIE, B.C. ― The indefinite closure of the Canfor mill in this B.C. town is having a ripple effect on industry in the area, CBC News reports. East Fraser Fibre Mill relied on Canfor’s mill for surplus trim blocks and is now squeezed for raw materials. “We were running three shifts, then it got down to two shifts and now down to one. We’re trying to keep our people employed,” owner Pat Glazier told the CBC.

CLEVELAND ― Net income for Sherwin-Williams Co. came to $576.4 million in Q3. The paint manufacturer reported profits of $6.16 per share, or $6.65 per share when adjusted for one-time gains and costs. Revenues reached $4.87 billion.

LANCASTER, Pa. ― Armstrong World Industries reported Q3 earnings of $1.38 per share. For the comparable period of 2018, earnings were just $1.11 per share. Operating income soared to $113.3 million from $81.3 million a year ago. Sales rose by 6.4% to $277.1 million, compared with $260.5 million in Q3 of last year.

NOTED

“Current trends imply things are going to get worse before they get better. At current rates, retail sales growth in 2019 could end up at around 1.3% or 1.4%, which would make it the worst year since 2009 and the so-called Great Recession.”
—Retail consultant Ed Strapagiel, referring to StatCan’s latest retail figures. Two-thirds into the year, year-to-date sales are only 1.8% above the levels from a year ago.

OUT & ABOUT

Our Quebec field reporter, Geoffrey McLarney, will be at the BMR show in Quebec City on Thursday. If you’ve got a scoop or a new product, be sure to tell him. Or just say “hi”!

MONTREAL ― About 300 dealers and 330 suppliers descended on Montreal’s Palais des congrès on October 17 and 18 for the RONA and Ace Canada Buying Show. Dealers took part in training seminars covering topics from merchandising to loss prevention and celebrated their colleagues’ achievements at the annual gala dinner.

This year’s edition continued the show’s trend of expanding the seasonal segment, which seems to occupy a larger surface of the floor each year. New this year was a grilling demo station where dealers got to sample barbecue treats prepared from recipes by award-winning Quebecois chefs.

Getting the best bargains for dealers was once again a key focus of the show. Close to the perennial Deal Zone, cubicles were set up this year for negotiations with lumber traders. In response to dealer feedback, show specials were publicized in advance of the event, extending the opportunity to plan purchases.

Among other changes to the show’s layout, the lighting and flooring sections were strategically placed next to one another. The “cloud” of lighting fixtures descending from the ceiling was a welcome oasis as Montreal was pounded by 24 hours of heavy rains during the show.

The Well Made Here team was on site to boost awareness of Canadian-made products. Also new this year was a booth representing the Fondation Charles-Bruneau. Lowe’s Canada’s established support on the corporate end for this pediatric cancer charity has been complemented in recent years by increasing involvement by dealers.

At the end of the show’s first day, a gala celebration honoured outstanding performance among dealers. RONA Ferronnerie Houle (Saint-Jean-sur-Richelieu, Que.), RONA Sonnenburg Hardware (Massey, Ont.) and RONA J. Anctil (Saint-Denis-de-Brompton, Que.) were recognized as RONA Builders of Success. On the Ace Canada side, the laureates were Ace Victory Building Supplies (Mackenzie, B.C.), Ace Leader (Leader, Sask.) and Ace Building Centre Vanderhoof (Vanderhoof, B.C.).

“We are lucky to count on a network of dedicated affiliated dealers who dare to push ahead and spare no effort to achieve their goals,” Lowe’s Canada Interim President Tony Cioffi said.

SAINT JOHN, N.B.― Fairstone Financial Inc. has signed an agreement to provide point-of-sale financing for all retail purchases at all Kent Building Supplies stores.

Fairstone is a Canadian non-bank lender for near-prime borrowers, with more than $3 billion in assets on a consolidated basis. The company has two key business lines: lending directly to consumers through its branch network and online; and financing consumer retail and car purchases through retailers and dealerships. Headquartered in Montreal, Fairstone is privately held by an investor group led by funds managed by affiliates of J.C. Flowers & Co. LLC and Värde Partners.

“We’re pleased to be working with Fairstone to provide a simple, digital financing solution that gets our customers a step closer to realizing their home renovation and building goals,” said Mike Simms, general manager for Kent and VP of J.D. Irving’s retail division.

As part of its retail POS financing offering, Fairstone is also providing Kent with an automated, mobile and digital financing platform designed to shrink customer financing approval times to a matter of minutes.

The company touts its system as a time saver for customers that will be easy to integrate into existing retail practices. Kent has 49 stores across Atlantic Canada in a variety of formats, ranging from traditional lumberyards to DIY-friendly big boxes. Kent is part of the holdings of Saint John, N.B.-based J.D. Irving Ltd.

“We’re pleased to work with Kent to provide a positive financing experience for their customers and a simple, easy-to-manage solution for their in-store associates,” said Serges Bériault, Fairstone’s senior VP of indirect lending.

SPECIAL REPORT — For buyers at some of Canada’s top retailers, a product’s origin is an important consideration. For Home Hardware Stores Ltd., it’s been a part of the company’s overall strategy since it was founded. With a number of private label and proprietary brands that are Canadian-owned and -made, including its Beauti-Tone paint line and CIL fertilizer, the company proudly promotes its homegrown products.

“For Home Hardware, our Canadian identity is imprinted into virtually every practice,” says Joel Marks, vice-president, merchandise hardlines for Home Hardware. “When customers have access to high quality, competitively priced, Canadian-made products, it is a win-win situation.”

At BMR Group, Charles Grégoire-Béliveau, director of purchasing (hardware and retail), says about 75 percent of the company’s vendors employ Canadians, meaning their products are either manufactured in Canada or they have head offices or service centres here.

He adds that part of encouraging local domestic suppliers translates into giving work to its own customers. “The vendors we work with, at the end of the day, many of their employees are our customers,” says Grégoire-Béliveau. “Our stores are deeply rooted in their regions, so it makes sense for us to support local vendors, when we can.”

At Lowe’s Canada headquarters, its buyers make those decisions with a straightforward goal in mind. “Our product selection process starts with what Canadians want and need, and we adapt our merchandising strategy accordingly,” says Igor Halencak, the company’s executive vice-president, merchandising and marketing. “Our goal is simple: to get the products Canadians want at the right time and price.”

Halencak adds that when those criteria are met, Lowe’s Canada will always encourage domestic suppliers.

A major point of emphasis for all these buyers is ensuring the quality of the products their companies bring to market. Marks says Home Hardware has noticed that social and environmental concerns have become increasingly important for its customers. He’s found that many Canadians will pay a premium for local or Canadian-made products.

(This article is excerpted from a larger feature in the latest issue of our sister publication, Hardlines Home Improvement Quarterly.  HHIQ goes out four times a year to 11,000 dealers and store managers across the country. Click here for more info!)

WABUSH, N.L. ― Stagg & Templeman Construction is a building supply retail store in Wabush, in Labrador. The 5,500-square-foot outlet, which sits on 3.5 acres with an 11,000-square-foot warehouse, serves a Labrador West community of about 14,000 people.

The store operates within a mining economy that owner Mike Stagg says is a “mixed bag,” as his annual sales swing with the economy’s ebb and flow. He relies on three common carriers to receive products because trucking companies aren’t always reliable due to driver shortages, and their dispatching puts the mines and food delivery first.

Northern dealers like Stagg would have a difficult time surviving without their buying groups to lean on as reliable product sources. He views his affiliation with TIMBER MART as a “huge advantage” in terms of working with trucking companies for deliveries and backhauls. And besides the challenges of working with available delivery options, Stagg has to contend with the extremes of weather. His store receives between one and four trailers per week, depending on the time of the year.

“Mike Stagg is successful is because he’s figured out the logistics game,” says John Morrissey, vice president of distribution and trading for TIMBER MART.

Annette Verschuren is among those who will receive honorary doctorates at Concordia University’s fall convocation. The citation for the degree invokes the Cape Breton native’s “vision and leadership in the business sector”, which includes her 15 years as president of The Home Depot Canada, from 1996 to 2011. Verschuren, who is already an Officer of the Order of Canada and a CHHMA Industry Hall of Famer, will address Concordia’s John Molson School of Business in November.

…that space is filling up fast for the 24th annual Hardlines Conference? And, no, we’re not just saying that to get your attention! The Kingbridge Centre is an amazing venue, but has limited space, so we urge you to buy your ticket now. In fact, the hotel is already booked up, but don’t worry, you can still get a room 15 minutes down the road at the Aloft Vaughan Mills. To be part of this incredible event, please click here.

VALLEYFIELD, Que. ― Éric and Stéphane Bailey, the co-owners of Matériaux Pont-Masson, celebrated last week the grand opening of their seventh RONA location, in Ste-Clotilde-de-Chateauguay, Que. The new store will serve as Matériaux Pont-Masson’s distribution centre.

TORONTO ― The winners of eBay Canada’s 2019 Entrepreneur of the Year awards were unveiled last week, including Nan Xu of Investments Hardware Ltd. Xu joined the Woodbridge, Ont., family-owned business in 2014 and quickly set about redesigning and expanding involvement in the eBay store to tap into export growth. Today, IHL operates in a 160,000-square-foot warehouse complemented by a 4,000-square-foot showroom for local clientele.

BOUCHERVILLE, Que. — Lowe’s Canada will cut 60 accounting jobs in Boucherville, in an effort to reduce costs. Instead, the Canadian business will rely on Lowe’s shared services out of the Lowe’s head office in Mooresville, N.C. "As the Canadian division of a global company, we have made the decision to leverage Lowe’s accounting shared services," said a spokesperson from Lowe’s Canada. Impacted employees have been notified and will be helped to transition during the first half of 2020.

TORONTO ― The Ontario Court of Appeal has rejected a bid by Walmart Canada and The Home Depot Canada to appeal the terms of the settlement in a class action against Visa and Mastercard. The original case turned on allegations of price-fixing between Visa, Mastercard and 10 issuing banks. The Superior Court last year approved a settlement, over the two retailers’ objections, in which both credit card companies agreed to pay almost $10 million without admitting liability.

MONTREAL ― Outstanding dealers and suppliers were at the centre of the gala held at the recent RONA and Ace Canada buying show. A full list of those recognized in the RONA and Ace Canada Builder of Success categories and their respective sub-categories, along with affiliates marking milestone anniversaries and Ace eCommerce Award winners, can be found on the Lowe’s Canada website.

SUPPLIER NEWS

VANCOUVER ― West Fraser Timber Co. reported a loss of $45 million or $0.65 per share for the third quarter, with higher production in the U.S. South outweighed by cuts to output in Canada. A year ago, the company had posted profits of $238 million, or $3.25 per share. Sales of $1.19 billion were down from $1.65 billion the previous third quarter.

AMSTERDAM — Signify, the Dutch lighting company (formerly Philips Lighting), has acquired Cooper Lighting from Eaton Corp. The acquisition is intended to give Signify a stronger foothold in the North American market. The deal is expected to close in the first quarter of 2020.

CHICAGO ― Grainger had third-quarter sales of $2.9 billion, up 4% over the 2018 third quarter. Gross profit reached $1.1 billion, up 2%. Operating earnings reached $338 million, up 78%, while adjusted net earnings of $233 million were down 3%.

ECONOMIC CONDITIONS

Investment in building construction increased 1.4% in August to $15.5 billion, with gains in both the residential and non-residential sectors. Investment in residential building construction was up 1.8% to $10.6 billion. The multi-unit component edged up 0.4% to $5.3 billion, led by Ontario. Investment in single-unit construction increased 3.2% to $5.4 billion, slightly exceeding multi-unit residential investment. This was partly due to gains in Ontario and Alberta. (StatCan)

Sales in the retail trade sector edged down 0.1% in August to $51.5 billion. Sales were down in six sub-sectors. After increasing 5% in June, sales edged down by 0.5% at building material and garden equipment and supplies dealers, the second consecutive monthly decrease. They nevertheless remained above the level observed in May. (StatCan)

Sales of existing U.S. homes fell 2.2% in September, amidst an ongoing supply shortage. It follows on two consecutive monthly gains. (National Association of Realtors)

NOTED

Habitat ReStore has a new website with a brand-new look and more information about products. Inventory can now be updated daily in real time as new stock arrives. (Habitat ReStores are the charity of choice for the Hardlines Conference, coming up November 13 and 14.)

WORLD HQ, Toronto — Big brands will stand out at this year’s Hardlines Conference, with speakers from some of North America’s leading home improvement chains.

Fred Pennell joined Princess Auto in March 2016 as vice president of its merchandising operations. Headquartered in Winnipeg, Princess Auto is a true Canadian success story—a family-owned company with 46 stores and growing from coast to coast.

Tanbir Grover is Lowe’s Canada’s Vice-President, eCommerce and Omnichannel. A few years ago, Lowe’s Canada embarked on an ambitious journey that would bring its entire Canadian retail network and multiple banners to the next level in its digital strategy. Tanbir will describe this digital transformation, its execution within a unique context and how the company seeks to provide a frictionless shopping experience.

John Hartmann, President, CEO & Executive Director of True Value Company, will address how returning the majority of its members’ equity has offered True Value retailers the opportunity to invest in their business as they know best and how a new company structure has enabled True Value to accelerate strategic investments without cutting into retailers’ profits.

Claudie Gervais is the Marketing Director – Promotional Strategy and Business Intelligence for BMR Group. In 2017, BMR launched a major project: the segmentation of its banners. These banners have been customized to reflect the reality of each dealer, their specific expertise and their own differentiation. Claudie will outline how BMR created these three new store concepts, which are designed to suit the needs of Canadians and members of its diverse dealer network.

As Canada’s only truly national event bringing the entire hardware and home improvement industry together, the Hardlines Conference offers an incredible opportunity for delegates to meet industry colleagues and customers in a professional yet casual setting. It will be held November 13 to 14 at the Kingbridge Centre, an incredible corporate retreat that will be a perfect backdrop to this year’s Hardlines Conference, which is “all about the experience”.

(Click here now for a list of all our speakers and to register for the conference!)

ST. JACOBS, Ont. ― New rules are being put in place to tighten—and strengthen—the relationship between Home Hardware and its vendor base. Much of this new reality was laid out during the company’s latest dealer market, held last month.

Under President and CEO Kevin Macnab, the changes planned for the company aren’t restricted to vendors. Home Hardware is also looking to strengthen its connection with its dealers, ensuring they all conform to the metrics that define the Home Hardware brand.

Even as he undertakes these changes, Macnab faces the need to stay true to a corporate culture that is deep and runs right back to the vision of Home Hardware’s co-founder, Walter Hachborn. Although Hachborn retired in 1988, he retained the title of president until 2010 and remained a familiar face at the company’s dealer markets almost until his death in 2016. Macnab took over as the fourth CEO in the company’s history in October 2018.

So keeping the dealers privy to innovations, as provided through partnerships with those vendors, will be key to setting the retailer apart, while remaining true to the company’s vision and sense of culture, says Macnab.

Innovations can become a brand, he told Hardlines, so the company won’t turn away from exclusivity with vendors to provide new products that can tie each store in more closely with its market. “Our strength is our dealer-owners in our local communities.”

That means providing consistent programs to the dealers that they will adopt consistently, to create differentiation for them. “We are committed to make talent and culture a competitive advantage.”

Macnab says he’s pleased with the progress so far. “But we’ve got a lot of work ahead of us,” he adds. As for getting dealers to buy into the changes, the process requires staying close with them and educating them about the direction of Home Hardware. He notes that dealers are keen for the new direction. “We’re getting strong dealer support.”

OTTAWA ― After a three-year battle, Home Depot Canada has finally complied with a court order issued on behalf of Canada Revenue Agency to disclose the retailer’s list of customers using its commercial credit card program. In an effort to crack down on the underground economy, the CRA is targeting contractors to determine who is being paid under the table.

Home Depot Canada is the last holdout among home improvement retailers that were instructed to comply. The campaign started three years ago, and in August 2017, RONA was a holdout, as well, taking its fight to the Supreme Court to resist the CRA’s demand for a list of its commercial clients.

The Canada Revenue Agency wants to verify that purchases made by contractors from various home improvement dealers match their tax declarations. Other retailers, including BMR and Patrick Morin, agreed to provide similar lists early on.

According to a report by StatCan, the underground economy in Canada was estimated at $51.6 billion in 2016, or 2.5% of GDP. In 2016, three industries together accounted for more than half of underground economic activity: residential construction (26.6%), retail trade (13.5%) and undeclared tips among workers in accommodation and food services (12.1%).

In the past, federal tax credits played an important role in eliminating some of the underground economy. Following the worldwide recession a decade ago, the feds instituted a tax credit for home repairs and renovations. Homeowners could get back 15% of eligible expenditures on home renovations between $1,000 and $10,000 made during the 2009 tax year.

With the federal election looming, one candidate, Conservative Party Leader Andrew Scheer, has included a renovation tax credit in his platform. His proposed Green Home Renovation Tax Credit is a two-year program to encourage homeowners to renovate their homes in ways that lower their power bills and reduce greenhouse gas emissions.

TORONTO — The sale of Party City’s Canadian retail business to Canadian Tire Corp. has been finalized, the companies announced at the beginning of the month. And it marks Canadian Tire’s serious entry into a new niche that targets birthdays, anniversaries and other life events at a personal level.

In addition to taking over the 65 retail stores, Canadian Tire will make a selection of Party City offerings available through its namesake banner both online and in-store—either through dedicated aisles or a store-within-a-store format.

The addition of Party City also complements Canadian Tire’s seasonal offerings with its established specialty in “micro-seasonal” categories—significant life celebrations that can occur throughout the year. EVP Allan MacDonald told analysts in August that the party supplies market in Canada is worth nearly $2 billion and “it’s actually quite fragmented.” In closing the transaction, he said, “we’ll consolidate two significant players and immediately become the number-one party supply retailer in Canada.”

Under the terms of the $174 million all-cash transaction, Canadian Tire gains all 65 of Party City’s retail stores, while Party City Holdco will use the proceeds to offset debt. At the same time, the companies reached a wholesale supply agreement which will see Amscan Inc., Party City’s wholesale business, furnish Canadian Tire with consumer products for at least 10 years.

The deal was a watershed for Canadian Tire’s Triangle Rewards program as the company seeks to make the most of its Triangle data while unifying its banners. “We’ve been looking at the party supply category for a while now and we’ve been putting our data to work,” MacDonald told analysts, adding, “Party City customers skew younger and spend 60% more at Canadian Tire than our average Triangle Rewards member each year.”

BOUCHERVILLE, Que. — After months of speculation and rumour, Sylvain Prud’homme, president and CEO of Lowe’s Canada, departed on October 7. The announcement was officially positioned as his retirement from the company. However, no immediate successor was in the wings, and, pending his permanent replacement, Tony Cioffi, executive vice-president, finance, real estate and dealers, is acting as interim president.

“After more than 35 years in the retail industry in roles that have taken me across the country, including six years with Lowe’s Canada, it is with mixed feelings that I am announcing my retirement,” Prud’homme said in a statement. “We have accomplished a lot over the last several years, and I feel that the time is right for me to spend more time with my wife and family and hand over the reins of the company. I feel blessed to have had this opportunity and thank all Lowe’s Canada associates for their hard work for the organization.”

Prud’homme joined Lowe’s Canada in June of 2013, following the sale of RONA to Lowe’s Cos., in Mooresville, N.C. His background includes a senior VP position at Walmart Canada, followed by executive positions at Sobeys, including president of the grocery retailer’s Western operations, then an EVP role at Loblaw. At Lowe’s, Prud’homme was also given the added title of president of Lowe’s International in 2017.

Prud’homme’s exit is expected by many close to the company to be just the beginning of more changes. In fact, just three days after he left, EVP of Operations Guy Baumier was let go.

With the company in flux, the industry is waiting to see who will replace Prud’homme in the top job for Canada and speculation abounds. One person who will not be replacing him is Lyne Castonguay. With executive degrees from Harvard, Castonguay is a veteran of Home Depot in the U.S. and more recently part of Sobeys under ex-Canadian Tire head Michael Medline.

Her possible appointment was a rumour that got a lot of traction among some head offices in the industry, and then found its way into the Quebec media.

In an email message that came to the attention of Hardlines, she politely insists that she is not in line for the job. “I would like to thank everyone for their support, notes and votes of confidence in the French-Canadian media. However, I will not be the next CEO of Lowe’s Canada.”

WORLD HQ, Toronto — What can you expect at the 24th annual Hardlines Conference? The answer is simple: retail experts. Under this year’s theme, “It’s all about the experience”, the Hardlines Conference will have all the experts in one room for two days to help you break it down.

From November 13 to 14, in a unique corporate retreat not far from Toronto International Airport, you can expect a carefully curated lineup of exceptional entrepreneurs, including a number of store owners. Each has a unique story of how their businesses came to be and how they evolved over the years to become successful retailers in competitive markets.

Christine Hand (shown here) will be the keynote for our very special “Profiles in Leadership” segment. Hand has been chair of the board at Home Hardware Stores Ltd. since April 2012. She has also operated Handyman Home Hardware in Conception Bay South, Nfld., since 1988 and took ownership in 1992. Christine will reflect on her personal experience in the industry.

Vava & Angela are the owners of The Store on Queen (TSOQ), a unique clothing store in downtown Toronto. With their larger-than-life personalities, they have cultivated an avid online following. The duo will share their journey of how they built a successful retail business with a vibrant and active online presence. They’ll offer concrete tips on how to work Instagram into your business plan, and what to do even when you have a minimal marketing budget.

Joe Franquinha, owner of Crest Hardware & Urban Garden Center, has long tied the success of his family business to the old-fashioned principles of quality service and products. But the emergence of online retail giants has forced Joe to re-evaluate his store’s longstanding retail practices. Join him as he shares his keys to curating a modern-day retail experience that keeps customers engaged and coming back for more, despite the competition.

As Canada’s only truly national event bringing the entire hardware and home improvement industry together, the Hardlines Conference offers an incredible opportunity for delegates to meet industry colleagues and customers in a professional yet casual setting. It will be held November 13 to 14 at the Kingbridge Centre, an incredible corporate retreat that will be a perfect backdrop to this year’s Hardlines Conference.

(Click here now for a list of all our speakers and to register for the conference!)

TORONTO ― Anybody searching the CBC website last week looking for a report on the latest debate among federal candidates would have seen another leader’s face: Greg Hicks, president of Canadian Tire Retail.

Hicks appeared in a paid advertising blurb that said, simply: “Meet Greg Hicks. See what it takes to get your product on store shelves.” Clicking on the ad led to an advertising feature promoting Canadian Tire’s involvement in upcoming segments of Dragons’ Den, the popular TV show that gives entrepreneurs and start-ups a shot at pitching their business idea to a panel of investors.

Amidst photos of Hicks engaging with technology and colleagues, the ad says, “Canadian Tire is always hunting for the latest innovative ways to help Canadians with the jobs and joys of life in Canada, so partnering with Dragons’ Den is the perfect way to get an inside look at some of the hottest undiscovered products from Canadian entrepreneurs and bring them to Canadian Tire customers across the country.”

In the ad, Canadian Tire explains that the listing process typically takes a year, requiring the potential new vendor to meet the retailer’s criteria and undergo considerable scrutiny, including rigorous quality assurance testing.

And a new product may end up supplanting an existing line or program. “Putting a new product on the shelf often means another product has to come off, which takes plenty of planning and co-ordination—especially when you have 503 stores across the country,” the ad goes on to explain.

The race for new products is always on among home improvement retailers. In fact, according to Bill Wilson, former Retail Advisor for NRHA Canada, as much as 20% of a store’s SKUs should be new products each year. Based on that, the pressure for innovation is ongoing. So Canadian Tire has found an innovative way to promote its search, while providing a “feel-good” twist that promotes its innovative side along with a focus on Canadian products.

WORLD HQ, Toronto — While 2018 had weaker growth than the previous year, it still grew by more than expected, and the forecast for 2019 remains cautiously optimistic, despite another slow start to the year. These are just some of the findings in the 2019-2020 Retail Report, now available from Hardlines.

According to the report, the industry is expected to benefit from a stabilization of the real estate market, as interest rates remain low and the industry adapts to tougher mortgage rules. These factors will help drive the all-important renovation and repair markets, both factors which outweigh new housing as a driver for retail sales in this sector.

The report includes the results of a dealer survey conducted by Hardlines, which revealed widespread concern that sales would not rise enough through the remainder of the current year to generate positive sales growth. This concern was shared by dealers across the country.
Looking further out, the industry is forecast to regain some momentum in 2020 and 2021, with real growth being realized as commodity prices stabilize, and sales volumes recover.

This year’s Hardlines Retail Report analyzes how much the industry grew last year and identifies the best-performing provinces. The report also tracks the growth of the big box format in Canada, and how it compares to other key formats, namely hardware stores, building centres and Canadian Tire stores.

Designed to help retailers and suppliers alike to develop their business plans for the year ahead, this year’s report provides valuable industry forecasts 2019 and 2020, including analysis of the strategies and performance of home improvement retailing’s top players—Home Depot Canada, Lowe’s Canada, Home Hardware Stores Ltd. and Canadian Tire Retail.

The 2019-2020 Hardlines Retail Report fills 171 PowerPoint slides and is packed with dozens of charts, graphs and photographs.

(For more information about the 2019-2020 Hardlines Retail Report, including special pricing for it and the Hardlines Market Share Report, please click here.)

Jeld-Wen of Canada has appointed Jean-Francois Lemelin as provincial sales manager for Quebec. A Université de Montréal graduate, Lemelin got his start in the industry in 2007 as a local marketing manager at RONA and was most recently the development director of installation and project sales with Lowe’s Canada.

Exchange-a-Blade has announced that SeeSaw Marketing’s Rick Forbes is retiring after more than 40 years as an EAB distributor. Brent Ewen, who has worked with Forbes and most of his customer base for the past decade, and Marty Donaldson have joined EAB as territory managers for Greater Vancouver. EAB will distribute the products and be the new supplier for Southern B.C.

Dany L’Heureux has joined Stelpro, a company based in Saint-Bruno-de-Montarville, Que., that makes home electronics for climate control, as national sales director. His background includes extensive agency experience in this industry and at tool maker Innovak. Most recently, he was category manager at Lowe’s Canada for tools.

…that Princess Auto, Lowe’s Canada, Canadian Tire, Home Hardware and True Value are just some of the companies presenting at the 24th annual Hardlines Conference? It’s being held November 13 and 14 at the Kingbridge Centre, not far from Toronto International Airport. But space is limited, so we recommend you register as soon as you can. Just click here!

CHICAGO ― Thousands of independent home improvement retailers gathered in Chicago recently to celebrate True Value’s 2019 Fall Reunion. True Value President and CEO John Hartmann talked to member-dealers about True Value’s ongoing investments in modernizing its supply chain. In particular, the company developed a new regional distribution centre in Wilkes Barre, Penn., and has doubled the size of its sales force and streamlined its digital marketing programs. (John Hartmann will present at this year’s Hardlines Conference, November 13 to 14. Click here for more info!)

ISSAQUAH, Wash. — Costco Wholesale Corp. reported Q4 net earnings of $1.1 billion or $2.47 per share. Excluding one-time costs, however, earnings came to $2.69 per share. Overall, revenues totalled $47.5 billion. Same-store sales in the U.S., excluding gas, logged a smaller-than-expected 5.2% increase. For the fiscal year, profits were $3.66 billion ($8.26 per share) and total revenues were $152.7 billion.

TORONTO — The Retail Council of Canada has issued an open letter to Ontario Environment Minister Jeff Yurek calling for a co-ordinated provincial action on single-use plastics. With more and more municipalities crafting policies in response to consumer concerns, the council fears a “patchwork of plastic bag by-laws” will create bureaucratic hurdles for its members, who are “steadfastly committed to reducing the environmental impact of their operations.”

SUPPLIER NEWS

MONTREAL — Richelieu Hardware reported that sales increased by 3.4% to $269.2 million in Q3. Net earnings grew by 1.1% and net earnings attributable to shareholders rose by 1.3% to $18.6 million. On a per-share basis, net earnings increased by 3.1% to $0.33, compared to $0.32 a year ago. In Canada, Richelieu recorded sales of $179.9 million, an increase of $1.2 million or 0.7% over Q3 of 2018, including 4.7% from acquisitions.

RICHMOND, B.C. — King Marketing has been appointed as sales agency for Signify Canada, representing brands such as Philips and Philips Hue to independent dealer accounts across Canada.

BARRIE, Ont. — Barbecue maker Napoleon held a job fair last week in Barrie, aiming to fill more than 50 contract positions in assembly and 30 full-time salaried posts. The latter include marketing, quality assurance, research and development, sales, human resources and customer service roles. The manufacturer of grills, fireplaces and HVAC systems is Barrie’s largest employer.

ECONOMIC CONDITIONS

The seasonally adjusted annual rate of housing starts was 221,202 units in September, down 2.5% from 226,871 units in August. The SAAR of urban starts decreased by 2.4% in September to 208,503 units. Multiple urban starts edged down by 0.2% to 159,742 units in September while single-detached urban starts fell by 9.2% to 48,761 units. Rural starts were estimated at a SAAR of 12,699 units. (CMHC)

The value of building permits issued by Canadian municipalities rose 6.1% to $9.0 billion in August, largely because of increases in multi-family and industrial permits. Gains were reported in seven provinces, with more than one-third of the national increase in Quebec. The value of permits for single-family dwellings rose 3.2% to $2.4 billion nationally, led by Ontario. (StatCan)

NOTED

Hardlines has a free Daily News service to keep you up to date on the latest home improvement news and customer trends from across the country. To subscribe to our free Daily News service, just click here!

OVERHEARD…

“We have tremendous respect and admiration for Canadian entrepreneurs and look forward to the opportunity to work with more of them in the future.”
―Greg Hicks, president of Canadian Tire Retail, in a paid advertising spot that appeared last week on CBC.ca, as part of Canadian Tire’s latest effort to attract new vendors.

OUT & ABOUT

David Chestnut from our Toronto Office, and Geoffrey McLarney from our Montreal Bureau, will be at the RONA/Ace show this Thursday. Be sure and say “hi” to them if you’re going to be at that event—especially if you’ve got a new product or a scoop!

ST. JACOBS, Ont. — Home Hardware’s president and CEO, Kevin Macnab, has been in place for a year now, and his reorganization of the company has affected every corner of the business.

Those changes have included a wholesale overhaul of the company’s buying teams, with new faces on board, and existing buyers taking on new portfolios. But behind the scenes, changes are unfolding that will impact Home Hardware’s vendor base.

For example, tougher guidelines are being put in place for vendors. On one hand, these threaten to undermine Home Hardware’s reputation as the “good guys”, but they also bring the company more in line with standards imposed by other home improvement retailers and aim to make it more competitive.

Vendors now face fines for incomplete orders, while Home is looking to rationalize overlapping or duplicate SKUs, especially among suppliers who do less than $50,000 with the company or are listed in fewer than 50 stores. This, Macnab admits, may mean fewer vendors and fewer products for Home Hardware over time.

There’s been much talk around head office about changing Home Hardware’s focus from that of a wholesaler to one of a retailer. That refers to being more attentive to the perceptions of the end consumer, “whether it’s a pro, DIY or furniture shopper,” to see the company “from a consumer lens,” Macnab says. “It’s a different focus.”

It does not mean ignoring the reality of Home Hardware’s role as a wholesaler, but with a look at the end user. And meetings with suppliers have challenged them to review assortments, marketing programs and data, using it in different ways.

“It’s about building a business with our supplier partners,” Macnab explains. “That means adding programs rather than just products, while relying on vendors that goes beyond just dollars. Which vendors want to lean in with us?”

Macnab expects the process to result in a reduction of vendors, and more reliance on the ones who remain. “We’re about growth—and vendors will have more clearly defined expectations of their roles.” These will include those fines for incomplete orders. He says the goal is to strengthen relationships with vendors, but part of that is expecting vendors to live by their commitments.

BOLTON, Ont. — TORBSA Ltd., the Ontario-based buying group for building centres and commercial yards, has named its board of directors for the year ahead.

Greg Drouillard of Target Building Materials in Windsor, Ont., has been elected as president. Drouillard is well known for his involvement in the Lumber and Building Materials Association of Ontario and was honoured with the LBMAO’s Lifetime Industry Achievement Award in 2017—the same year his company celebrated its 50th anniversary.

Drouillard is also known for his protracted battle with Target Corp. in the U.S., when the mass merchant retailer made its foray into Canada beginning in 2013. It challenged Drouillard’s half-century ownership of the Target name in Canada, which proved to be a fruitless pursuit for the U.S. retail giant, but a costly one for Drouillard. He is also very involved in STAFDA, the Specialty Tools and Fasteners Distributors Association.

TORBSA, whose dealers are largely commercial yards, has most of its members in southern and central Ontario, with the exception of Crown Building Supplies in Surrey, B.C.

The board of directors is now composed of (from left to right): Past President Gerald Morin, Morin Bros. Building Supplies, Ottawa; Greg Drouillard; Dante DiGiovanni, VP operations, Blair Building Materials, Maple; Blaine Carter, VP, Woollatt Building Supply, London; Len Hewson, treasurer, Hewson Brothers Supply, Brantford; and Steve Guglietti, secretary, Pro Con Building Supplies, Brampton.

VAUGHAN, Ont. — TIMBER MART has added a new hardware buyer after a careful search that took almost a year to complete. Shawn Ettinger, a veteran of Home Depot Canada has joined the buying group’s procurement team, responsible for reviewing, analyzing and selecting hardlines products and vendors, including tools, décor, plumbing, imported goods, electrical, builder’s hardware and seasonal products.

According to TIMBER MART President and CEO Bernie Owens, the hire came from the retirement two years earlier of the group’s manager of vendor programs, Rod Purchase. Purchase was a long-time member of TIMBER MART’s team in Atlantic Canada. He had joined with TIMBER MART following the consolidation of the A.W.A.R.D. buying group into TIMBER MART in 2005.

Owens says the role will be pivotal to negotiations within the Spancan buying group. That organization, owned by Independent Lumber Dealers Co-operative, Federated Co-operatives and TIMBER MART, negotiates hardware deals with vendors, “and we need a team in place,” he notes, “that could deal effectively with Spancan’s 240 preferred vendors. It was just making sure we had the right individual,” he says of Ettinger’s hire.

Ettinger brings more than 30 years of experience to the job. Most recently, he was VP for new product development, innovation, marketing and sales strategy at Conros Corp. He spent a decade at Home Depot Canada as national senior product merchant – kitchen, appliances, bath and flooring.

MISSION, B.C. —Fraser Valley Building Supplies (FVBS) continues to expand in British Columbia, moving beyond its local markets in the province’s Lower Mainland.

Ray Cyr, president of FVBS, has taken over two stores in the West Kootenays. The company acquired the Maglio Building Centres earlier this year and converted the Nelson and Trail, B.C., stores, to the RONA banner.

To mark the grand opening of both stores under the RONA banner, Fraser Valley Building Supplies held board cutting ceremonies late last month. “We are looking forward to welcoming customers in their new RONA stores so they can discover our enhanced offering, which includes a selection of appliances and the iconic Craftsman brand,” Cyr said.

Together, the RONA Trail and RONA Nelson stores feature approximately 35,000 square feet of retail sales area as well as five acres of lumberyard, with some 30,000 products on offer in store and online.

The expansion efforts have been part of a trend for Cyr. In 2016, FVBS acquired Wilway Lumber Sales in Abbotsford. In June 2018, the company expanded its RONA store in Hope, B.C., which it acquired a year earlier, to a larger location. Then in May of this year, the Fraser Valley store in Abbotsford, B.C., took on the Ace Canada banner. The store features a 10,000-square-foot retail sales area and a four-acre drive-through lumber yard.

ST. JACOBS, Ont. — There was something different about the latest Home Hardware Market, which concluded last week at the company’s head office and warehouse in St. Jacobs, Ont. Under the theme Share the Vision, the event kicked off with a presentation by HGTV’s Scott McGillivray on renovations and return on investments. Beauti-Tone’s 2020 paint colour of the year was also unveiled during the market (it’s called “Honey I’m Home”).

The differences were evident upon walking into the market itself. These included more emphasis on housewares, careful presentation of private labels according to programs rather than just products, more thoughtful grouping of Home’s various services to its dealers and a first-ever marketing strategy meeting for Home’s LBM dealers.

Additionally, there was a buzz that was generated around the show floor. That buzz was largely positive—and reflected the overall acceptance of the changes occurring.

That’s a big change from the initial stages of the transition within the company, which began under former CEO Terry Davis. Davis made the company’s first big executive hire from outside Home Hardware when he appointed Rick McNabb to the position of VP marketing and sales.

As changes were generated from a marketing direction, acceptance was often reluctant, even as the need for change was understood. At the Fall Market exactly one year ago, the notion of change was also prevalent. But many people, both dealers and head office staff alike, kept saying “change is good” as though trying to process the transition and anticipate a positive outcome.

Now, the momentum of change is apparent everywhere, but this time it starts at the top, with a focus on operations rather than marketing. Home Hardware’s president and CEO, Kevin Macnab, has been in place for almost a year now, and his reorganization of the company has affected every corner of the business.

Those changes have included a wholesale overhaul of the company’s buying teams, with new faces on board, and existing buyers taking on new portfolios. Reactions of vendors to new expectations from the company’s overhauled buying teams have been largely positive, if somewhat tentative. And dealers were much more accepting of the transitions occurring under Macnab’s leadership.

This acceptance translated into an upbeat market that found dealers and vendors alike generally energized by the changes that have already taken place and the ones to come.

(We’ll feature an exclusive interview with Home Hardware CEO Kevin Macnab in next week’s blazing edition of Hardlines!)

WORLD HEADQUARTERS, Toronto ― The 24th annual Hardlines Conference is fast approaching, with a lineup of speakers that will make it a must-attend for home improvement owners, managers and executives in Canada.

This year’s event will feature some of the industry’s top thought leaders, including two executives from Canadian Tire, the top merchant from Princess Auto, the marketing director from BMR Group and the chair of Home Hardware Stores Ltd. (Conference update: please note that the CEO of Staples Canada Canada will no longer be able to present at this year’s conference.)

This year’s conference has been organized around the theme, “It’s All About the Experience” to guide the presentations—and the destination of the conference itself is a world-class meeting facility just a short drive from Toronto’s Pearson International Airport. It will be held November 13 to 14 at the Kingbridge Centre in King City, Ont.

We’re excited to share some insights into a few of the presentations you can look forward to at this year’s conference.

Headquartered in Winnipeg, Princess Auto is a family-owned, Canadian company with 46 stores coast to coast. Fred Pennell, vice president merchandising operations, will share what makes this hardlines retailer such a unique company, with a loyal customer base that is expanding across the country.

Paula Courtney is a retail strategist, trusted by retail leaders around the world to help them refine and create a superior customer experience. She is the product founder and chief strategist at WisePlum, a software as a service-based research tool designed to measure specific customer insights. Paula will be joined on stage by two senior executives from Canadian Tire: Shawn Stewart, VP Loyalty and Customer Insights and Erin McFeetors, VP Store Operations, in a panel discussion.

Claudie Gervais, marketing director–promotional strategy and business intelligence at BMR Group will share insights into BMR’s strategy to be a truly national player. That includes boutique banner concepts, a world-class urban store concept—and aggressive expansion into the Ontario market.

Joe Franquinha owns Crest Hardware in Brooklyn, N.Y. By providing only the best customer service and top-notch products for his customers, he makes shopping at Crest a true New York experience, with a staff that makes you feel right at home. 

A few years ago, Lowe’s Canada embarked on an ambitious journey that would bring its entire Canadian retail network and multiple banners to the next level of digital. Tanbir Grover, vice-president, e-commerce and omnichannel, will describe the why and how of Lowe’s Canada’s digital transformation, its execution within a unique context, and how the company seeks to provide the frictionless shopping experience that customers want and expect today.

As Canada’s only truly national event bringing the entire hardware and home improvement industry together, the Hardlines Conference offers an incredible opportunity for delegates to meet industry colleagues and customers in a professional yet casual setting. It will be held November 13 to 14 at the Kingbridge Centre, an incredible corporate retreat that will be a perfect backdrop to this year’s Hardlines Conference, which is “all about the experience”.

(Click here now for a list of all our speakers and to register for the conference!)

QUEBEC CITY — Canac has acquired a one-million-square-foot property adjacent to its Drummondville distribution centre, just days before it wraps up work on an expansion that will double its previous size.

The current second phase of the expansion takes the facility from 350,000 to 560,000 square feet. Representing a $15 million investment, it has allowed the creation of about 40 new jobs.

Details of the coming phase three are still to be released, but President Jean Laberge says it will create even more jobs and involve advances in automation. The distribution centre was originally built in 2015 at a cost of $30 million.

The expansion of Canac’s back-end support keeps in step with the company’s expansion of its retail footprint. Back in May, it opened its 27th store, in Thetford Mines, Que. The 39,000-square-foot building, with its 30,000-square-foot lumber yard, represented a $6 million investment and the addition of 90 local jobs. And Canac has acquired its 28th location, in Shawinigan, Que., which is scheduled to open in November.

Laberge is also setting his sights beyond Canac’s home province of Quebec. The eastern Ontario town of Hawkesbury will be the site of the first Ontario store for the retailer.

CHICAGO ― Canadian suppliers looking to expand their online business now have one more reason to attend the fourth annual Home Improvement eRetailer Summit, November 6 to 8 in Chicago. The event provides networking, education and one-to-one meetings for retailers, manufacturers, distributors and industry professionals who are interested in how to optimize the internet as a distribution channel.

Here, the Summit’s founder, Sonya Ruff Jarvis, spoke with us about some of the major takeaways attendees can expect from this event:

Vendors often feel challenged to get products to market cost-effectively when it comes to selling online. Any tips?

Drop shipment options shouldn’t frighten suppliers. The summit has had manufacturers like Honey Can Do speak about how drop shipping can be profitable. Our event in November will have Rakuten Super Logistics discuss how implementing the right fulfillment logistics can help suppliers be more competitive.

It is sometimes a misperception among dealers and suppliers that it’s harder to control prices when selling online. It’s not impossible, but it takes strategy, monitoring and policies. Many of the Summit’s attendees are doing just that, and they’ve been willing to share their experiences.

Where do you think the industry needs to improve in order to be more fully engaged in e-commerce?

Companies need to make a commitment to fully integrate online retail into their business models versus conducting e-commerce as an afterthought or, worse, a separate enterprise. Fifty-six percent of online shoppers still prefer the bricks-and-mortar shopping experience over online. So, the more successful retailers are taking a holistic approach that doesn’t leave customers or dollars on the table.

Any predictions about where e-commerce might be headed in the future?

Getting the logistics right is huge in order to build a profitable and sustainable online retail business. As we progress down this road, I believe that logistics and fulfillment will become more refined. You will see companies with these capabilities launch programs and services that make it easier and more efficient for dealers and suppliers to compete. Plus, software platforms will offer even more plug-ins and simpler-to-use options to enhance their value add. 

(The fourth annual Home Improvement eRetailer Summit will be held November 6 to 8 in Chicago.)

…that the 2019-2020 Hardlines Market Share Report breaks out the sales and store counts of every key home improvement banner by province? This invaluable marketing tool will help you identify sales and market opportunities and align your own forecasts with regional market breakouts. Now available in a special package with our Hardlines Retail Report, which provides valuable forecasts for the industry for 2019 and 2020, including analysis of the top players. Each report is available in either PDF or PowerPoint format, and at a special rate for Hardlines Subscribers. (For more info, click here!)

BOUCHERVILLE, Que. ― A dealer with two stores in Ontario has adopted the RONA banner. Mike Crow Sr., who has owned a building centre in Rodney, Ont., since 2004, bought a second location in 2016, in nearby Springfield. Now, he’s made the move to become a RONA affiliated dealer. Together, the RONA Rodney and RONA Springfield stores employ 45 people. They feature more than 10,000 square feet of retail sales space and, combined, their drive-through lumber yards, total more than eight acres and carry some 10,000 products.

SAINT-PAUL, Que. — Centres de la rénovation Patrick Morin celebrated the grand reopening of its Sainte-Marcelline store after a major fire in January. Company founder Patrick Morin himself cut the ceremonial 2×4, marking the culmination of a $3.5 million investment. The store now boasts a larger retail space of 12,000 square feet.

TORONTO — Hit entrepreneurial reality show Dragons’ Den is returning to CBC for its 14th season. This year, Canadian Tire and Desjardins Group are new sponsors. They join existing show partner BDC.

TORONTO — Hudson’s Bay Co. has announced that its Dutch division will wind down by year’s end. HBC Netherlands BV’s 15 retail stores, e-commerce site and suburban Amsterdam head office. The business is a joint venture between HBC and SIGNA Retail Holdings. Under the terms of HBC’s agreement with SIGNA, the historic Canadian firm is slated to assume control of Hudson’s Bay Netherlands when the transaction closes, which is expected to take place later in the fall.

IN MEMORIAM

We were saddened to learn of the passing of John Williams, retail consultant and founder of J.C. Williams Group. A brilliant thinker who remained active until the end, John was also a presenter at the Hardlines Conference twice over the years. He will be missed.

ECONOMIC CONDITIONS

Total investment in building construction increased 0.5% in July to $15.2 billion, with slight gains in both the residential and non-residential sectors. The multi-unit residential component was down 1.6% to $5.2 billion, due mainly to decreases in British Columbia and Saskatchewan. Investment in single-unit construction was up 2.9% to $5.2 billion, driven by Ontario and Nova Scotia. This increase more than offset the decline in investment in multi-unit construction. Non-residential investment remained largely unchanged. (StatCan)

Retail sales advanced for the first time in three months, increasing 0.4% in July to $51.5 billion. Higher sales were reported in six of 11 subsectors, representing 71% of retail trade. Sales at building materials and garden equipment and supplies dealers decreased 3.2% after increasing 5% in June, while remaining above the level observed in May. After removing the effects of price changes, retail sales in volume terms were essentially unchanged in July. (StatCan)

August saw a surprise spike in sales of existing U.S. homes, which rose by 1.3% to a seasonally adjusted annual rate of 5.49 million units. This second consecutive monthly gain puts home resales at their highest level in 17 months. Economists polled by Reuters had expected sales to edge down by 0.4%. Meanwhile, July’s rate of 5.42 million units was left unrevised. (National Association of Realtors)

U.S. homebuilding in August reached its highest level of activity since 2007, an indication that the housing market is responding positively to lower mortgage rates. Housing starts for the month soared by 12.3% to a seasonally adjusted annual rate of 1.364 million units, with construction of both single- and multi-family dwellings picking up speed. July’s estimate was revised upward to a rate of 1.215 million units, a more modest decline than the initially reported 1.191 million units. Year-over year, housing starts were up 6.6%. (U.S. Commerce Department)

NOTED

The Liberal and Conservative parties have each extended a hand to homeowners, promising to make it more affordable to renovate homes with the goal of increased energy efficiency. Justin Trudeau told supporters in B.C. that, if returned to power, his government would retrofit 1.5 million homes over five years through the Canada Mortgage and Housing Corp. Speaking in Quebec, Andrew Scheer restated the Conservative Party’s proposal for a two-year income-tax credit of 20% for upgrades to home energy efficiency.

ST. JACOBS, Ont. — Home Hardware Stores Ltd. made two important additions to its merchandise team last week, as it continues to round out its buyers on both the hardlines and building materials sides.

Ron Krochuk was appointed merchandise manager of forest products, reporting to LBM Director Doug Shantz. The move becomes effective September 30. Krochuk (shown left) has 25 years of experience in forest products, including positions at Lowe’s and Home Depot as national lumber merchant. Most recently he worked on the vendor side as a product evangelist for Blueline Data, and before that as VP of sales and marketing for Solowave Design.

“We are excited to welcome Ron Krochuk to our team of exceptional merchandise managers at Home Hardware,” said Marianne Thompson, VP of merchandise LBM. “Ron brings a depth of knowledge in forest products and he will be able to assist our dealers with the ability to provide exceptional service to almost 1,100 communities across Canada.”

The hardlines team welcomed a new member, as well. Rob Szekszer has joined as director of merchandise hardlines. He reports directly to Joel Marks, VP of merchandise hardlines. Szekszer, who was previously with Canadian Tire Corp., will be responsible for leading the management teams in electrical, appliances, HVAC, automotive and general merchandise. He is one of three merchandise hardlines directors, along with Brian Straus and Dave Martin.

“We are thrilled to welcome Rob Szekszer to our team and are confident in his capabilities to successfully develop strategy and growth within his category,” said Marks said.

COLOGNE, Germany ― If you missed some of the cool new products and trends at the world’s largest garden, outdoor living and barbecue trade show, don’t worry: Hardlines was there.

Earlier this month, we trekked to spoga+gafa, the outdoor living show in Cologne, Germany, to be the eyes and ears for the Canadian market. It’s a good thing we were there, because new products and innovations were everywhere at this show. And, with a few exceptions, especially in the barbecue section, not many Canadians were there. However, the show managed to attract 40,000 people from around the world, and took over more than 2.5 million square feet of floor space in 11 different buildings.

We saw new products ranging from foldable patio units and children’s outdoor play sets to innovative garden products for small spaces and indoor living, as well as the latest grilling and outdoor cooking technology and accessories.

There were also lots of vendors with neat new products looking for distribution in Canada. (Click here to take a tour of spoga+gafa, courtesy of Hardlines!)

TROIS-RIVIÈRES, Que. — BMR Group, along with an existing BMR dealer, Pierre Naud, opened the first BMR Pro store in Quebec last week. The new concept store, the result of a $2 million investment, is located at 2250 Boulevard des Récollets in Trois-Rivières and will serve as a flagship store for the Pro network.

BMR opened its very first BMR Pro in Ontario earlier this year. Griffith Building Supply, in Greater Madawaska township, had a grand opening in May.

The Pro concept, part of a series of sub-banners for BMR to better define the offerings of its respective store formats, is aimed at handymen, contractors and heavy DIYers. It offers a range of building materials at very competitive prices, tailored to the quality needs of pros. The new store boasts a modern, industrial look that extends to the layout of the aisles, the design of the store and the entrance reserved for contractor customers.

Along with the owners, brothers Marc-André and Phillipe Lebel, on site for the store opening in Trois-Rivières were Jean Lamarche, mayor of the city of Trois-Rivières; Robert Aubin, member of parliament for the city; Pascal Houle, CEO of BMR Group; as well as Hugo Girard, strongman and BMR ambassador.

“We are very excited to unveil the very first BMR Pro in the province. This is a new concept that reasserts BMR’s expertise in the building materials industry. Simply put, our store is where contractors feel right at home,” says Houle.

The new format marks a new beginning for the Trois-Rivières Pierre Naud store. In September 2017, it was destroyed by fire only weeks after the completion of a major renovation. The Lebel brothers continued their business activities from a construction trailer while their store was being refitted.

OTTAWA — Home sales recorded via Canadian MLS Systems advanced for the sixth consecutive month in August, with a 1.4% month-over-month increase. According to the Canadian Real Estate Association (CREA), transactions are now running almost 17% above the six-year low reached in February, but remain about 10% below highs reached in 2016 and 2017.

Activity was up in slightly more than half of all local markets, although monthly changes were generally modest across most of the country. Actual (not seasonally adjusted) sales activity was up 5% from where it stood in August 2018.

Based on current conditions, the CREA has updated its forecast for housing activity in the country. Strong economic fundamentals, previously unexpected declines in mortgage interest rates and stronger than previously expected housing market trends in British Columbia and Ontario have resulted in the CREA upwardly revising its home sales forecast in 2019 and 2020.

Nonetheless, the overall level of national sales activity this year and next is anticipated to remain below levels recorded prior to the implementation of the B-20 stress test.

National home sales are now projected to recover to 482,000 units in 2019, representing a 5% increase from the five-year low recorded in 2018. But they remain well below the annual record set in 2016, when almost 540,000 homes traded hands.

Notwithstanding the upward revision, the forecast for 2019 on a per capita basis remains the second weakest since 2001.

British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador are all forecast to come in at or near multi-year lows for 2019. By contrast, Manitoba, Quebec and New Brunswick are expected to set new annual sales records. British Columbia is expected to continue to weigh on national figures in 2019, with a decline of 5.4% compared to 2018. This is expected to be more than offset by gains in Ontario (+8.3%) and Quebec (+9.7%).

Sales are forecast to continue to improve through 2020, albeit slowly. National home sales are forecast to rise by 7.5% to 518,100 units next year, with most of this increase reflecting a weak start to 2019 rather than a significant change in sales trends out to the end of next year. Indeed, an anticipated increase of 14.3% in British Columbia’s sales brings activity back in line with the province’s 10-year average.

Claude Chalifour has been appointed national director of retail sales at MAAX Bath. He was most recently at Formedica as executive vice-president of sales and marketing, and before that served as national director of sales development at NAPA Auto Parts.

…that Hardlines offers various ways for you to stay up to date on the industry? Make sure you are subscribed to: our Daily News (free); monthly Dealer News (free); and our print magazine, Hardlines Home Improvement Quarterly! (free to dealers and retail head offices!) For more information on all of our news, just click here!

BOUCHERVILLE, Que. — Four corporate RONA stores in the Outaouais region of Quebec handed over a $217,000 cheque to Moisson Outaouais as part of the 2019 Loto-Moisson campaign. The stores have supported the food bank since 2011, and in 2013, created the annual fundraising campaign, which raises thousands of dollars each year through the sale of tickets at the four stores and other points of sale. Since 2011, the Outaouais RONA corporate stores have presented a grand total of $1 million to the Moisson Outaouais.

MONTREAL — Dollarama Inc. reported a 2% increase in its profits for Q2 as net income rose to $143.2 million from $140.4 million a year ago. Sales rose by 9% to $946.4 million, compared to $868.5 million a year ago, while comparable store sales were up 4.7%. Operating income grew 2.7% to $221.6 million, or 23.4% of sales.

SUPPLIER NEWS

WASHINGTON — The planned withdrawal of the United States from the Universal Postal Union could drive up costs for Canadian businesses shipping to U.S. customers from third countries. The U.S. declared its intention last fall to exit the Swiss-based Union, which co-ordinates delivery between national postal services. It says the lower dues paid by countries categorized as developing, including China, give them an unfair advantage. Washington is prepared to suspend its departure, due to come into effect next month, if the UPU allows countries to set their own rates.

VANCOUVER — West Fraser Timber Co. says that five of its B.C. sawmills will move to variable operating schedules, slowing production by about 15 to 25%. The new schedules have gone into effect for sawmill and plywood operations in Chetwynd, Fraser Lake, Quesnel, Williams Lake and 100 Mile House. The company said the decision, which could reduce production by up to 100 million board feet, was driven by prolonged market and pricing weakness, combined with high log costs.

ECONOMIC CONDITIONS

U.S. retail sales rose by 0.4% in August, with automotive and apparel categories leading the growth. Excluding motor vehicles, sales were flat for the first time since February. Though consumer confidence remains strong, it has receded slightly in the face of the ongoing U.S.-China trade war. Online sales continued their surge, increasing by 1.6%. (U.S. Commerce Dept.)

Housing starts in the U.S. in August were at a seasonally adjusted annual rate of 1,364,000. This is 12.3% above the revised July estimate of 1,215,000. Single‐family housing starts reached 919,000, 4.4% above July’s rate of 880,000. (U.S. Census Bureau)

OVERHEARD

“Building a strong merchandise team is a result of our commitment to be Canada’s most trusted and preferred home improvement retail brand.”
—Joel Marks, VP of merchandise hardlines, on the hiring of a new merchandise director for Marks’s team.

MONTAGUE, P.E.I. ― Hurricane Dorian, a Category 2 hurricane, hit Atlantic Canada on Saturday, September 7, taking down power lines and trees across the region—and leaving a trail of destruction in its wake.

In Montague, P.E.I., Jeff Beck was on the phone with an RCMP officer who was standing in front of his family’s business, Beck’s Home Furniture and Appliances, when its roof was blown right off.

More than half of the century-old building’s metal roof was lifted up by heavy winds and dropped on the store’s storage facility. Fortunately, no one was hurt, but the damage to the building, as well as the product housed inside, has been significant. 

“The storm wasn’t quite over until the end of Sunday, so we didn’t get in there to check things out until Monday,” says Beck.

The first step was to empty the store’s fourth floor, which was mainly storage. Everything on that floor was ruined, and most of the product on the third floor, as well. The Becks and their staff rushed to lay down tarps on the exposed floor to protect the lower three floors of product as rain continued to come down.

A construction crew was also brought in immediately on the Monday to start work on a new roof, which Beck anticipates will take about two weeks. But by mid-week, a full day of hard rain threatened the rest of the exposed building.

“We had 20-plus staff trying to repel the rain with hundreds of buckets, tarps, sump pumps… we had all of our staff, there were friends, family, there was the construction guys, we were all working at it, but it got to a point that it was impossible to keep up with,” says Beck.

In the midst of the disaster, the community has come together to support the Becks. While staff were bailing water out of the building, friends stopped by with sandwiches and support. And offers for storage space have poured in, which has been huge for the Becks, who have to find a safe, dry place to store 20,000 feet worth of inventory until the water damage can be repaired.

“We have really great staff, they rolled up their sleeves. Our bookkeeper was bailing water—it’s just kind of how Islanders are. We kind of look after each other,” says Beck.

BUTLER, Ill. — Ace Hardware Corp. has completed the acquisition of Handyman Matters, a franchisor of home repair, maintenance and improvement services based in Denver, Colo. Handyman Matters will become Ace Handyman Services and operate as a new stand-alone subsidiary.

Handyman Matters is a franchise organization consisting of locally owned and operated and company-owned locations that offer professional craftspeople trained to handle a homeowner’s to-do list, in addition to larger projects. On-site services to consumers and small businesses include carpentry, plumbing, electrical, drywall, painting, flooring and much more. The franchisor currently has 57 franchisees, who collectively employ about 250 handymen and women in 121 territories across 23 states.

“The introduction of Ace Handyman Services provides a platform from which Ace can further deliver on our helpful promise to consumers while expanding our presence in the growing do-it-for-me segment,” said John Venhuizen, President and CEO of Ace Hardware Corporation. He calls it “part of a compelling evolution in our plan for strategic growth and our retailers’ continued success.”

Andy Bell, founder and CEO of Handyman Matters, will continue to lead the day-to-day business operations for Ace Handyman Services from Denver. Integration and re-branding initiatives are currently under way with a goal to be completed by the first quarter of 2020.

This is not the first time Ace has purchased an outside entity. In 2015, it acquired Jensen Distribution Services, a wholesaler based in Washington State. After that, it assumed a majority stake in e-commerce startup The Grommet in 2017. The website markets and sells new and innovative products created by independent entrepreneurs. Ace is now the majority controlling owner of The Grommet.

CHICAGO ― One of the offerings at the recent Orgill Dealer Market, held in Chicago last month, is a model store right on the show floor. These completely merchandised test stores, a feature of every market, are popular for retailers looking for inventory and merchandising ideas.

The model on display in Chicago was called “Four Seasons Hardware”. It covered just over 12,000 square feet and highlighted a number of categories, including paint. The display featured a Sherwin-Williams ad showcasing merchandising aids. Other core categories were hardware and fasteners, hand and power tools, with price points aimed at DIYers, and outdoor living.

Departments like housewares and household products were presented by a strategic convenience offering. The “store” featured space-saving techniques throughout the impulse-driven layout, including a single-queue checkout flanked by products to help drive impulse sales.

It also offered ideas for a number of space-saving techniques, suggestions for how to expand product offerings out to the retailer’s sidewalk space and how best to use that sidewalk space.

ATLANTA —Home Depot executives laid out the company’s efforts in recent years to boost efficiencies and streamline its logistics, at a recent presentation to investors in the U.S. Under Mark Holifield, EVP, supply chain and product development, the company has been focused on getting that right and being in-stock at the store and thus leveraging the Home Depot’s volume to improve its overall supply chain.

“We invested in logistics infrastructure, built the RDC [regional distribution centre] network, we took control of our inventory management and centralized that and drove good results across those four deliverables,” Holifield said.

He went on to explain that the company then started looking at the supply chain more from the perspective of the customer and where the customer is going. One indicator that came through loud and clear was the increasing demand for deliveries, sourced both online and in stores. “Interconnected retail [is] hugely important to us, both the online business driving customers to our store to close sales, but also the stores driving business online and just the interconnection of those.”

Home Depot built a fleet of direct fulfillment centres, the goal being to get products shipped to customers within two days for 90% of the U.S. population, using parcel freight. Holifield observed that the retailer had accomplished that goal, even as the demand for delivery continues to grow. “And as we got to this period, where we evaluated what to invest in going forward, we realized customers continually are wanting more delivery and wanting delivery faster.”

The ease and rapidity with which customers can order and receive products is having a positive impact on sales. “Every time we take lead time out of the order-to-delivery cycle, we find that increases our conversion rate, online customers buy more frequently.”

…that the latest edition of our newest publication, Hardlines Dealer News, was sent out last week? It featured articles about a retailer who wrote a book based on hard lessons he’s learned about leadership, what success means to one BMR dealer, how to be more ruthless about your inventory and more. Hardlines Dealer News is a monthly e-newsletter available at no charge. Click here now to get your free subscription today!

MISSISSAUGA, Ont. — Castle has added another new member, this time in Newfoundland. NRO is located in Roddickton, a shopping hub on the northern peninsula that is also known for its fishing and logging. The owners are Randy and Phyllis Randell, local entrepreneurs who have already operated two businesses in the community for many years. Their newest venture will have a complete line of paint, hardware, plumbing, electrical, tools and seasonal products.

TORONTO — The last two Zellers stores, located in Toronto and Ottawa, will close in January, Hudson’s Bay Co. says. Eligible workers will receive severance packages and where possible, HBC will explore opportunities for them within the company, according to a statement from a company spokesperson. Zellers got its start in 1928 with four Ontario stores and came under HBC’s sole ownership in 1978.

SEATTLE — Amazon and Home Depot have inked leases for a three-storey warehouse right in Seattle. It’s the first of its kind in the U.S., according to the Wall Street Journal. The facility, a common setup in Europe and Asia but rare in North America due to land costs, would allow the companies to reduce delivery times by bringing distribution closer to customers. Currently, at least three multi-storey warehouses are in the works for New York City.

BRAMPTON, Ont. — Hudson’s Bay Co. has reported its Q2 loss came to $984 million, after a loss of $280 million in the same period last year. When one-time items are discounted, HBC said its normalized net loss totalled $171 million, compared to $85 million in Q2 of last year. Revenues were roughly flat at $1.9 billion. Comparable sales overall declined by 0.4%, with a 3.4% drop within the Hudson’s Bay banner, offsetting gains of 0.6% at Saks Fifth Avenue and 3.4% at Saks Off Fifth.

SUPPLIER NEWS

WASHINGTON — The U.S. International Trade Commission failed to justify its 2017 ruling that Canadian softwood lumber hurts U.S. producers, a NAFTA panel has found. At the same time, it found “that the commission’s determination of adverse impact is lawful and supported by substantial evidence” and refused Canadian pleas to exclude specialty and premium products like Western red cedar from U.S. duties.

MALMÖ, Sweden — Bona is celebrating a century in the hardwood floor care and maintenance business. The family-owned company now has a presence in more than 90 countries and a global team of nearly 600 employees. Bona’s founder, Wilhelm Edner, originally owned a small grocery shop in Malmö where among other products, he sold bonvax, an agent which created a polished and protective surface when applied on a wood floor. Sensing the product’s potential, he incorporated Bona AB in 1919.

ECONOMIC CONDITIONS

The seasonally adjusted annual rate of housing starts in Canada was 226,639 units in August, up 1.9% from 222,467 units in July. The SAAR of urban starts increased by 2% in August to 213,663 units. Multiple urban starts decreased by 1.4% to 160,388 units in August while single-detached urban starts increased by 13.6% to 53,275 units. Rural starts were estimated at a SAAR of 12,976 units. (CMHC)

The value of building permits rose 3% to $8.3 billion in July, largely due to increases in multi-family and commercial permits. Gains were reported in five provinces, with more than one-third of the national increase in British Columbia. Quebec reported the largest decrease, down 4% to $1.6 billion, due to lower construction intentions in all components of the non-residential sector. Ontario issued a record high $3.5 billion in permits in July. (StatCan)

NOTED

The Canadian Hardware and Housewares Manufacturers Association will host its 18th Annual Industry Memorial Golf Classic on October 2, beginning at 8 a.m. It will be held at the Blue Springs Golf Club in Acton, Ont. It’s open to the industry: CHHMA members and non-members are welcome. Proceeds from this tournament will help support the Canadian National Autism Foundation.

COLOGNE, Germany — spoga+gafa, the world’s largest trade show for gardening, outdoor furniture, equestrian and barbecues, was held last week in Cologne, Germany. The historic city’s fair complex alongside the Rhine drew 40,000 people domestically and from abroad. It featured the latest trends in outdoor living, furniture and tools, urban gardening and grilling, spread over an incredible 2.5 million square feet of exhibition space.

The show, which also included a smaller segment for equestrian products and accessories, spanned almost a dozen buildings, plus outdoor spaces that accommodate barbecue manufacturers busily grilling everything from Bratwurst and beef tenderloin to pizza and, well, more sausages.

Walking the show, one was confronted with aisle after aisle of patio furniture, gardening supplies, seeds and live goods, outdoor power equipment, pet products and landscape materials. There was no shortage of new products from vendors in every category—many seeking distribution in North America.

A major theme of this year’s show was urban gardening, the concept of providing products and garden strategies that take into consideration limited land and smaller homes. Innovations included a patio set in a box, outdoor furniture sized for children and products for creating “living walls” of plants. Two entire halls were devoted to barbecues and grilling accessories.

Another building featured the latest offerings in lawn and garden furniture from Chinese manufacturers. Elaine Hu, of Yongkang Kingmax Outdoor Product Co., echoed the opinion of other Chinese suppliers when she said that spoga+gafa is the most important show in the world for her category. Her company brings a representative range of camping and outdoor products and she is able to meet with her customers from all over the world.

Buyers from key retail groups found the same value in attending. Svetla Vaseva, purchasing manager for Megadom, a chain of seven stores in Bulgaria, has been coming to the show without fail for years. She said the show provides an important point of contact to reaffirm relationships with existing suppliers and find new products.

Canadians turned out, but not in significant numbers. One exception, however, was the barbecue category. Three major Canadian-based suppliers all had large booths: Napoleon, Broil King and Danson (with its Grill Boss and Louisiana Grill brands).

Nathan Wheeler, director of European sales for Waterloo, Ontario-based Broil King, said spoga+gafa is “the most important show in Europe.” One building away, Chris Schroeter, co-CEO of Napoleon, in Barrie, Ont., had a large contingent of salespeople at his booth, many sporting the Canadian flag on their shirts. He and his team were presenting the latest models, many already launched in Canada, which is, he said, ahead of the European market when it comes to barbecues in most instances.

Schroeter shared the consensus of both vendors and buyers interviewed in Germany last week. There was a multitude of new offerings and customers here, all good reasons for any company in the seasonal category to be at spoga+gafa.

TORONTO — Canadian Tire Corp.’s decision to acquire Party City marked a key turning point for the growth of Canadian Tire’s Triangle Rewards program, executives confirmed in a conference call with analysts last month.

“You’ve caught us,” EVP Allan MacDonald said in response to a question from a Scotiabank analyst who noted the overlap between Triangle Rewards data and Party City’s client profile. MacDonald said the Party City deal was a milestone in Triangle’s material impact on the company’s strategic direction.

MacDonald hearkened back to CEO Stephen Wetmore’s remarks at Canadian Tire’s May AGM that the creation of Triangle was “the most strategic thing” the company has done under his leadership.

“And that was at the time, I think, for the most part interpreted as a rebranding exercise of the Canadian Tire Money program and really just an extension of the loyalty program,” MacDonald added. “And, in fact, what we were trying to do was create an umbrella brand that … allowed all of our individual banners and our consumer brands to maintain their unique identity.”

MacDonald noted that the acquisition makes demographic sense based on the data Canadian Tire has collected. “Party City customers skew younger and spend 60% more at Canadian Tire than our average Triangle Rewards member each year,” he said.

“Party City is going to make Triangle Rewards more attractive to customer segments that are, frankly, very interesting to us, like young families and millennials,” he said.

WATERLOO, Ont. — Whether it’s buying better, selling smarter, managing staff productively or wrestling with financials, dealers have to be good at a lot of things to succeed. Online smarts is often not one of those things, however. That’s why outside sources for this kind of expertise are so valuable.

Take Dan and Monica Reid, of Emerge2. The Waterloo, Ont.-based pair lead a team of tech and content providers that is focused on helping home improvement retailers. “We’re providing support for dealers online so they can continue to do what they’re good at,” says Dan.

Dealers are good at creating a relationship with their customers face to face, one on one. But those customers are engaged in an online community, one that many dealers have been slow to pursue, even as the big retailers like Lowe’s and Home Depot have made these online efforts a priority.

Dan says there are ways to compete against these large retailers. “You do it by differentiating yourself.” But communicating those differences is no longer restricted to those in-store encounters. “Good service doesn’t always translate into good marketing.”

That’s where Emerge2 comes in. It offers back-office tech and marketing support to help dealers improve—or get started—on their web development. A big part of what Dan and Monica and their team do is help dealers tell their stories, working with dealer-members in various buying groups in Canada, along with a growing base of independent customers in the U.S. They are even included in the services area of Orgill’s dealer markets twice a year.

According to Dan, Emerge2 looks for ways to ensure a dealer offers value every time they send an email. That means a focus on increasing engagement with existing customers. The payoff is going to be much higher than trying to convert new customers. “The spend can be 50% to 60% more.”

He calls it a “happy marriage” of marketing and technology. “We’ve become strong advocates for these dealers to help them compete against those larger retailers.”

OTTAWA — Discount retailer Giant Tiger Stores Limited officially broke ground on a new headquarters and flagship store in Ottawa back in June. The company anticipates full construction starting this fall. The new store will open in fall 2020 and the office will be open by mid-winter of 2021.

The discount department store chain is known for stocking affordable home and family fashions—including a growing assortment of hardlines—plus groceries and everyday necessities at low prices. The new facility will support Giant Tiger’s growth strategy, which commits to opening 10 to 12 stores per year across Canada.

“Our new home office and flagship store on Walkley Road represent an investment in our future and will help us meet the needs of our expanding store count, while delivering even better value to our customers, vendors, and franchisees,” said Thomas Haig, president and COO at Giant Tiger.

The new head office will span some 173,800 square feet, featuring a modern, four-storey building built to LEED specifications. Construction will feature lots of glass, with plenty of light and open spaces that will include a central atrium. All workstations and meeting rooms will be equipped with the latest technology.

And it’s being built to accommodate the retailer’s anticipated growth. To keep up with that growth, Giant Tiger anticipates the employee count at its head office to grow from 400 to 700 over the next decade. In addition, the company recently moved its distribution centre from Walkley Road to a new facility in Johnstown, Ont.

The privately held company has more than 250 locations across Canada and employs approximately 9,000. Most recently, it opened an 18,130-square-foot store in Kingston, Ont., on August 24. And one month earlier, a store was opened in Halifax. 

At Home Hardware, Rob Wallace has been appointed to the position of vice-president, marketing. He was most recently senior director, marketing. In his new role, Wallace will be responsible for the company’s marketing strategy, leading a team to execute programs that will build brand awareness, enhance Home Hardware’s reputation and drive sales for the company. 

…that the 2019-2020 Hardlines Retail Report provides valuable forecasts for the industry for 2019 and 2020, including analysis of the strategies and performance of home improvement retailing’s top players—Home Depot Canada, Lowe’s Canada, Home Hardware and Canadian Tire Retail? With 170 PowerPoint slides and dozens of charts, graphs and photographs, it’s available now at a special rate for Hardlines Subscribers.
(For more info, click here!)

MISSISSAUGA, Ont. — Castle Building Centres announced this month that its newest member dealer is Northwest Building Supplies in Ear Falls, Ont. Ricky and Krista Vincent started the business to service the LBM and hardware needs of the community, located a little less than 150 kilometres from the boundary with Manitoba.

BOUCHERVILLE, Que. — Lowe’s Canada is reprising its Heroes campaign this month. As part of this campaign, every Lowe’s, RONA and Reno-Depot corporate store in the country has chosen to support the mission or a project of a local non-profit organization or public school⁠—a hero in its community. Throughout the month, customers will be able to donate at checkout to support their local Hero organization. Lowe’s Canada will match 50% of all customer donations up to $2,000 per store.

MOORESVILLE, N.C. — Big box retailers in the U.S. were bracing late last week for Hurricane Dorian, as it moved up the U.S. East Coast from the Caribbean. Both Lowe’s and Home Depot have mobilized command centres to deal with the storm. Lowe’s warehouses in North Carolina, Georgia and Florida will rush supplies to Florida over the weekend to help customers prepare. The company has already shipped more than 800 truckloads of supplies to its coastal markets.

TORONTO — Hudson’s Bay Co. has reached an agreement for the sale of its Lord & Taylor banner to Le Tote, a San Francisco-based clothing rental subscription business. Under the terms of the deal, Le Tote will pay $100 million for ownership of the Lord & Taylor brand and inventory and control of its 38 stores, while HBC will retain title to the real estate and a minority equity stake in the business.

MISSISSAUGA, Ont. —Walmart Canada has extended its online grocery delivery service to the Montreal area, meaning the service is now available in markets in every province. Customers place orders on Walmart’s website or the Walmart Grocery app and can receive their purchases at home for a fee of $9.97 on orders of $50 or more.

SUPPLIER NEWS

WOODRIDGE, Ill. — Globe Union Industrial Corp. announced it is expanding its manufacturing capacity with the purchase of Namce, which is based in Mexico’s Coahuila state and produces vitreous china. Namce’s current management team will be retained, reporting to Globe Union’s North American leadership. 

SELBYVILLE, Del. — A new study says sales of leaf blowers in Canada are likely to exceed US$250 million in 2025 as the lawn care industry grows. Global Market Insights Inc. says the retirement of the baby boomer generation will be a boon to the garden equipment segment. Some three-quarters of Canadians have a lawn at home.

IN MEMORIAM

Claude Dagenais, former director of sales at AQMAT, passed away on August 21, at the age of 78. From 1985 until his retirement in 2015, Dagenais sold advertising and sponsorships on behalf of the Quebec association for the retail home improvement industry. He leaves behind his wife, Monique Lefebvre Dagenais, and mother, Georgette René Dagenais, as well as his children Josée (Raúl) and Francis (Janie), and his grandchildren Maude, Justin and Tristan.

ECONOMIC CONDITIONS

The federal government has revealed details of the $1.25 billion incentive program for first-time home buyers announced in this year’s budget. First-time buyers with household incomes of less than $120,000 per year can now save some $280 each month on a $500,000 home, with no increase to their down payment. The program works as a shared equity between the buyer and the government through the latter’s mortgage insurers, including CMHC. (CMHC)

NOTED

After hurricanes hit, specially trained Lowe’s associates travel to devastated areas as members of staff relief teams, providing additional customer support and backup for their colleagues while they tend to their own families and homes.

OVERHEARD

“Ottawa will always be home for Giant Tiger. We opened our first store in the ByWard Market in 1961, and our headquarters have been here on Walkley Road since 1996.”
—Thomas Haig, president and COO of Giant Tiger Stores, on the groundbreaking for a new head office and flagship store earlier this year.