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IN THIS ISSUE:
- True Value declares bankruptcy, welcomes offer from rival Do it Best
- CEO Kevin Macnab talks about new ideas and renewed energy at Home Hardware
- Orgill readies to take on more dealers amid uncertainty of True Value bankruptcy
- RONA ends historic chapter with conversion of last Réno-Dépôt stores to RONA+
PLUS: Canac acquires site near Montreal, Kent adds Eastlink store-within-a-store,
Castle announces scholarship recipients, RONA holds Connexia for affiliated dealers, 7-Eleven to close 450 underperforming stores, Richelieu Hardware reports Q3 sales, inflation rate falls, home sales rise in September, and more!
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True Value declares bankruptcy, welcomes offer from rival Do it Best
True Value Co. dropped a bomb on the industry last week when it issued a press release from its Chicago HQ saying it had “entered into an agreement to sell substantially all of the company’s business operations to home improvement industry peer Do it Best Corp.”
Do it Best, of Fort Wayne, Ind., will reportedly pay US$153 million in cash for substantially all of True Value’s assets and business operations and assume up to US$45 million in additional liabilities. “To complete the sale in the most efficient manner, True Value and certain of its affiliates initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware,” the release said. “True Value will continue its day-to-day operations serving 4,500 independently owned retailers that rely on True Value for the right products, trusted expertise, and its 75-year-old iconic brand.”
True Value tipped its hand a few days earlier in a letter to vendors from CEO Chris Kempa. In it, he said the company has “active, competitive offers for our business, and we are working tirelessly to finalize a purchase agreement.”
Do it Best is one of True Value’s chief competitors. If the deal goes through, it would create a store network of more than 8,000 locations in the U.S. and 50-plus countries around the world. There are no active True Value-member stores in Canada.
This is the second time in six years that True Value has been on the block. In 2018, Acon Investments, a private equity firm, purchased 70 percent of the company, moving it away from a co-op model that it had operated under since its inception in 1948. It has sales of just over US$6 billion, while Fort Wayne, Ind.-based Do it Best boasts sales of almost US$5 billion.
“A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers around the world,” said Dan Starr, Do it Best president and CEO (shown here).
The agreement with Do it Best provides significant cash consideration and meaningful assumption of liabilities related to the ongoing business. Do it Best is requesting to be designated as the “stalking horse,” or lead bidder, and to initiate a competitive bidding process under Section 363 of the U.S. Bankruptcy Code. That process is designed to achieve the highest value for the company.
To support the day-to-day business through the sale, True Value is seeking to use its cash collateral to fund operations. In case it needs additional financing during the process, it has received a commitment from Do it Best to provide incremental capital, in an effort to help ensure that independent True Value retailers can continue serving their customers throughout the process.
If Do it Best is the winning bidder, the transaction is expected to close by the end of the year, pending regulatory and court approval. True Value will continue to operate under Chapter 11 protection with Do it Best providing the stalking horse bid.
A statement from Do it Best stresses that the deal would not come at the expense of its existing member-owners. Instead, Do it Best intends to preserve and build on the True Value brand, allowing current stores to maintain their independence while gaining access to Do it Best’s programs, buying power, and support network.
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CEO Kevin Macnab talks about new ideas and renewed energy at Home Hardware
Home Hardware Stores Ltd., the closely-held corporation owned by its dealers, is going through a plethora of changes as it evolves its business strategy. At the heart of these changes is the company’s president and CEO, Kevin Macnab. The process of evolution gains poignancy given that this is the 60th anniversary for Home Hardware. The collision of history, culture, and change has been Macnab’s to manage.
The company’s annual dealer market and information conference, called Homecoming, was the backdrop for Hardlines’ one-on-one conversation with Macnab. The event was held at the Enercare Centre at Exhibition Place in Toronto in September. There, he talked about what was news for dealers at the show, and how the company has ramped up promotions to celebrate its 60th birthday.
The market was Macnab’s sixth; he got his official introduction to the Home Hardware dealers at their fall market in 2018, before he’d even been officially hired. That came a few weeks later on Oct. 10, when he was named only the fourth CEO at the company—and the first to be hired from outside of the St. Jacobs, Ont., HQ. His background included Marks & Spencer in the UK, followed by senior roles with Toys “R” Us and the top job at Toys “R” Us Canada, before becoming that retail chain’s president of its international business.
In the six years since Macnab arrived, Home Hardware has made a lot of changes, including looking outside its own ranks to fill senior positions. Having more than one family member working at Home Hardware’s head office was once an integral part of its culture. More recently, however, the management roles have drawn individuals who have come from other major retailers such as Canadian Tire, RONA, and Loblaw.
In addition, the company has been shifting its focus to the Home Hardware customer and standardizing the experience within the stores. Home has also been updating its IT at its distribution centres and making new efforts to consolidate its dealers’ back-end operations.
Back in Toronto, the Homecoming market was being set up in anticipation of the arrival of hundreds of dealers, along with their families and managers, from all over Canada. Pricing remains a universal priority. “We’ve added promotions and discounts for our dealers,” said Macnab. The market was also the showcase for the introduction of two new electric trucks to the Home Hardware fleet.
But “new” also meant new ideas. “We’ve added a lot of dealer events—a lot more educational events.” These, he said, included a networking event that highlighted the role of women. “It’s fabulous to see us recognizing diversity in the workplace.”
As for changes in the management teams, Macnab says bringing in new thinking, combined with the experience and corporate know-how of the existing staff members, has been really important in moving the company forward. And he personally will represent yet another change when he retires in the indeterminate future. He says he would like to step down by his next birthday. While that timeline has reportedly been shared with the dealers, neither Macnab nor Home Hardware’s communications team would disclose the precise date of his leaving the organization with Hardlines (Grrrr!—your frustrated Editor).
“Even though I have announced my intention to retire, my role is to set the company and my successor up for success.”
In the meantime, Macnab points to the attitude on the Homecoming show floor. There, he said, the dealers and vendors had come together against a backdrop of economic transition that limns the changes at Home Hardware. In the end, he noted, “There’s a really good vibe out there. The dealers are in a good position.”
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Orgill readies to take on more dealers amid uncertainty of True Value bankruptcy
Independent retailers doing business with True Value have another option as they navigate the uncertainty of its retreat into Chapter 11 bankruptcy protection. Orgill, the independent hardware wholesaler based in Memphis, has sent a message to the industry saying it’s ready to step in.
“At Orgill, we have always championed the independent dealer,” says Boyden Moore, Orgill’s president and CEO (shown here). “One thing that Orgill can offer to the thousands of True Value customers during these uncertain times is a pathway to stability in their future business relationships that would enable them to continue serving their communities without fear of any interruption.”
The company says it’s confident it can support True Value dealers, helping them maintain uninterrupted access to products and services. True Value stores are independently owned and are not a part of the Chapter 11 proceedings, with the exception of one company-owned store in Palatine, Ill.
Moore says Orgill, which does not represent a banner and will sell to any dealer regardless of affiliation, already has experience working with True Value retailers. His company is equipped it to step in and assist retailers who are impacted by the recent developments.
“Because we have done more and more business with current and former True Value customers in the recent months, we aren’t starting at ground zero when it comes to conversions or switching systems. We have the ability and the insights to make this process as efficient as possible,” he says.
Randy Williams, Orgill’s EVP of distribution, points to the recent upgrades and investments that Orgill has made in its distribution network, which have put the company in a strong position to handle the additional capacity that may come from onboarding so many retail customers in a short period of time. That includes the addition of more than US$50 million in inventory to help improve existing service levels and better prepare the company for growth.
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RONA ends historic chapter with conversion of last Réno-Dépôt stores to RONA+
RONA has announced the conversion of 18 stores to the RONA+ banner. The stores include four in Montreal, three in Quebec City, and two in Laval. The conversions will see the country’s last 16 Réno-Dépôt stores switch to RONA+, along with a RONA L’entrepôt in Quebec City and a RONA Home & Garden in Winnipeg.
The move marks the end of the Réno-Dépôt banner.
“It’s an important milestone in our history that we’re celebrating as we make RONA our only coast-to-coast retail banner,” CEO and president J.P. Towner said in a release.
“I’m extremely proud of the work of our teams, who brilliantly carried out this major milestone for our company. It’s particularly exciting to be part of the expansion of this homegrown brand.”
The Réno-Dépôt stores, all in Quebec, that have been converted to RONA+ are located at the following locations:
- Anjou – 10200, rue Renaude-Lapointe, Anjou
- Beauport – 225, av. Joseph Casavant, Québec City
- Boucherville – 1235, rue Nobel, Boucherville
- Brossard – 7410, boul. Taschereau Ouest, Brossard
- Candiac – 100, rue de Strasbourg, Candiac
- Drummondville – 875, rue Hains, Drummondville
- Sainte-Foy – 3131, av. Blaise-Pascal, Québec City
- Saint-Hubert – 5035, boul. Cousineau, Saint-Hubert
- LaSalle – 2199, rue Lapierre, LaSalle
- Laval – 1505, boul. Le Corbusier, Laval
- Marché Central – 1011, rue du Marché Central, Montréal
- Notre-Dame-de-Grâce – 7277, rue Saint-Jacques, Montréal
- Pointe-Claire – 400, boul. Brunswick, Pointe-Claire
- Rosemère – 1, boul. Bouthillier, Rosemère
- Sainte-Dorothée – 800, aut. Chomedey, rue Desserte Ouest, Laval
- Vaudreuil – 3010, boul. de la Gare, Vaudreuil-Dorion
These conversions come just over one year after the introduction of the RONA+ banner. Eleven Ontario stores, in Windsor, Windsor East, Sarnia, Waterloo, Kitchener, Cambridge, Niagara Falls, Brantford, Hamilton, Ancaster, and Burlington, celebrated the banner’s first anniversary by welcoming new store-within-a-store concepts for the DeWalt power tool and Bouclair furniture and home décor brands.
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DID YOU KNOW…?
… that the 2024 Hardlines Retail Report is now available? This massive research breaks out the size and growth annually of the industry, identifying which retail sectors and which banners are winning and losing from year to year. It features more than 150 slides in a handy PowerPoint format. Click here for more info and order details—and remember, as a Premium Member (if you are subscribing to this newsletter, you are one!) you will get a big discount on the price!
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RETAILER NEWS
Canac has acquired a site in Laval, Que., Montreal’s immediate northern neighbour, La Presse reports. The 673,000-square-foot lot is zoned for light industrial and heavy commercial use, but Canac marketing director Patrick Delisle would not comment on the company’s plans for it. The privately owned banner maintains two stores on the south shore of Montreal but currently has no presence on the island of Montreal itself. According to public records, Canac paid $24.3 million to the previous owners.
Kent Building Supplies and Bragg Communications, which does business as Eastlink, are partnering to offer a store-within-a-store at Kent’s Dartmouth Crossing, N.S., store. The telecom provider will offer mobile phones and internet services through a point-of-sale within the store. The store-within-a-store concept is a first for Eastlink.
Castle Building Centres Group has announced the recipients of its 12th Annual Scholarship Program. The company will award $2,500 scholarships to each scholar, two for academic programs and two in trades. The winners are Maria Shea (Shea’s Building Supplies, Stephenville Crossing, N.L.), Olivia Sparkes (Notre Dame Castle, Springdale, N.L.), Maria Redmond (Mermaid, P.E.I.), and Anastasia Fendley (Mono, Ont.).
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RONA held its annual Connexia event for affiliated dealers on Oct. 8 and 9 in Montreal. Some 300 of those dealers joined nearly 175 vendors and RONA leaders. During the closing awards gala, the company recognized five outstanding dealers. Andrew Doidge, president and CEO of Doidge Building Centres Ltd., received RONA’s Up and Comer award. Maurice Goupil inc., RONA Moffatt & Powell, and RONA Weyburn, took accolades for their community involvement. Quincaillerie C. Bélanger Ltée in Montreal was honoured for its 85 years of association with RONA.
Seven & i holdings, which operates the 7-Eleven banner, is spinning off 31 non-core business segments from its convenience store interests. The move, which follows an unsolicited takeover bid from Quebec’s Alimentation Couche-Tard, also includes the closure of 450 underperforming stores in North America. A new holding company, to be called York Holdings, will unite the brands, which include the Denny’s chain of diners, with a majority of shares to be sold to outside investors.
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SUPPLIER NEWS
Richelieu Hardware has reported Q3 sales of $467.7 million, an increase of 1.9 percent, including $264.6 million in Canada and US$148.4 million in the United States. Net earnings fell by 21.8 percent to $24.0 million.
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ECONOMIC INDICATORS
September’s inflation rate fell to 1.6 percent, year over year, led by lower gasoline prices, which fell 10.7 percent. But rental prices rose by 8.2 percent, while food prices continued to grow at a rate faster than inflation. Excluding the gasoline price drop, the Consumer Price Index came in at 2.2 percent, the same as August. (StatCan)
Sales of existing Canadian homes rose by 1.9 percent in September from the previous month. On an annual basis, they were up by 6.9 percent. The increase was led by the Greater Toronto Area, Hamilton-Burlington, Montreal, Quebec City, Greater Vancouver, and Victoria. (Canadian Real Estate Association)
The annualized pace of housing starts in Canada rose by 5.0 percent in September to 223,808 units, up from 213,012 units in August. Urban starts number 168,897 year-to-date, up 2.0 percent from 165,559 for the same period in 2023. The rate of rural starts was estimated at 13,806 units. (CMHC)
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NOTED
The Canadian Home Products Trade Association (CHPTA) and the Canadian Office Products Association (COPA) will present a joint conference on Nov. 21 in Richmond Hill, Ont. Participants will hear from speakers on a range of subjects from AI to the economy and consumer behaviour. The program includes a luncheon to honour two new inductees to the Canadian Hardware & Housewares Industry Hall of Fame. Hardlines president Michael McLarney will be recognized alongside industry veteran Bill Morrison, former president of ACE Canada and TruServ Canada. Click here for more information and to register.
OVERHEARD…
This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come.”
—Dan Starr, president and CEO of Do it Best Corp., on his company’s bid to purchase the assets of True Value Co. in the U.S.
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Castle Building Centres Group Ltd
Business Development Manager – Northern & Eastern Ontario
Castle Building Centres Group is an industry leader among Buying Groups in the Lumber, Building Materials & Hardware segment in Canada. Castle Building Centres Group has been committed to the success of the Independent for more than 60 years strong. Our Castle dealers and our Castle Head Office team are dedicated to helping people turn their projects into reality while making a positive impact in our communities. Our Castle members are fiercely independent and cater to everyone from DIY enthusiasts to professional contractors.
Ready to Shape the Future?
We are seeking a highly motivated individual with strong relationship, communication and sales skills that can manage and develop our future growth in the Ontario Market. This position requires an individual who is familiar with the Lumber and Building Supply industry, willing to travel extensively and accustomed to working remote from head office.
The individual welcomes the opportunity to work with a dynamic group of independent LBM dealers while planning and executing our future growth initiatives. Providing continual coaching and communication to our Ontario Members while understanding their needs is fundamental to success. The ideal candidate is highly self-motivated with strong computer, administrative and interpersonal skills.
If you’re looking for a place where your skills can shine and your ideas matter, Castle is the perfect fit. Join us and contribute to a thriving organization that values your opinions and offers a vibrant and collaborative work environment.
The Role You’ll Play
As a Business Development Manager, your mission is to enhance Castle’s market presence and help to drive the financial success of our members. You will forge lasting relationships with dealers, identify growth opportunities, and negotiate deals—all while staying informed about market trends and dealer dynamics.
Your Key Responsibilities:
Reporting to the Director of Business Development, with responsibility for all relationships with members of the Northern & Eastern Ontario Region. This entails recruitment and retention of members, coaching for growth,
coordinating purchasing initiatives, assisting in credit assessment/monitoring of members and assisting in the marketing of Castle.
The key strategy for this position is growth. There are three tactics for growth:
• Retain, coach and promote new business from our existing member base
• Recruitment of new member opportunities
• Develop and manage regional supplier relationships
What You Bring to the Table:
• Minimum of 5 years of experience in Business Development, preferably within the hardware or LBM sectors
• Strong communication skills in English, both written and verbal
• French is an asset but not required
• Proven ability in prospecting, negotiation, and closing deals
• Financial acumen and analytical skills
• Exceptional multitasking capabilities and ability to meet deadlines
• Willingness to travel extensively within the region, including overnight stays
When you become part of the Castle family, you’ll enjoy a host of benefits, including:
• A welcoming and inclusive workplace
• Commitment to work-life balance
• Comprehensive benefits package and annual performance reviews
• Community engagement and teamwork-focused culture
• Full training and onboarding program
At Castle, we celebrate diversity and are committed to fostering an inclusive environment. Castle Building Centres Group offers a comprehensive compensation package including full benefits.
All submissions will be treated with complete confidentiality. Please forward by email your resume in confidence to:
E-mail: jobs@castle.ca
Castle Building Centres Group Ltd.
100 Milverton Drive, Suite 400
Mississauga, Ontario
L5R 4H1
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