June 19, 2017 Volume

xxiii, #25

“You miss 100% of the shots you don’t take.”
―Wayne Gretzky (aka “the Great One”, Canadian former professional hockey player and former head coach, 1961- )

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Kenroc at 50: there for the birth of the drywall industry

REGINA — In the mid-1960s, a dramatic change occurred in the way houses were being built in North America. The time-honoured and specialized skill of the wall plasterer was being replaced by pre-fab plaster made of crushed gypsum. Drywall was rapidly becoming the norm, but it was prone to breakage, making it difficult to handle and ship.

Ken Sexton recognized the future of the drywall business. He quit his job at Bird Building Supplies in Calgary, sold the family cottage, and borrowed $3,000 from the bank to fund the startup of Kenroc Building Supplies. The first location was on North Railway Street in Calgary. The building, says Kenroc President Brian Kusisto, was only big enough to fit three people. If a customer ever came in, someone would have to step outside. The only other structure onsite was an outhouse.

That was 50 years ago. Today the company has grown to 16 locations in Western Canada and sales well in excess of $100 million. (In 1985, Sexton founded the Sexton Group, as well.) At 88 years of age, he has stepped back from running the business. But that hasn’t stopped the company from celebrating the anniversary with a series of events at its stores.

The celebrations started, says Kusisto, in early May, and are being held for the benefit of both customers and staff. Four locations have already hosted events. Kenroc’s four outlets in British Columbia’s Lower Mainland will combine efforts, as will the two Calgary stores.

As for the future, the company will continue to grow “opportunistically,” says Kusisto. “One of our strengths is the ability to quickly identify opportunities, assess them, and act on them quickly,” he adds. “I think our coverage of Western Canada is fairly complete so I don’t think we have any defined plans for the West.”

He adds that he doesn’t expect Kenroc to expand into Eastern Canada any time soon, though he doesn’t rule anything out―should one of those opportunities present themselves. “But going farther from our base would require critical mass.”

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Sears Canada: is the end nigh?

TORONTO — Sears Canada reported a first-quarter net loss of $144.4 million, more than double the loss suffered in Q1 2016, when the legendary retailer incurred a loss of $63.6 million. Then, results were boosted by sale and leaseback transactions.

Same-store sales in the latest quarter rose by an encouraging 2.9% but revenue declined by 15.2% to $505.5 million. The retailer attributed the disparity primarily to lower revenues from its Direct business, due in part to cuts in product offerings and pick-up locations based on lower demand.

Eddie Lampert, controlling shareholder of U.S. parent Sears Holdings, has admitted that he would consider selling the Canadian business. Sears Holdings sold off part of Sears Canada in 2012, but still maintains an ownership stake.

In the U.S., Sears Holdings is not faring much better, despite posting its first quarterly profit in almost two years (Q1 profits got a lift from cost-cutting measures and the sale of the Craftsman line of tools). At the same time, sales for the quarter continued to decline, falling 12.4% at Sears stores and 11.2% at Kmart.

Nor is the slight lift in Q1 enough to counter the big-picture bad news. Sears Holdings suffered a $2 billion loss in 2016, and announced internally last week that it would close 72 additional retail locations by September. The closures are in addition to the 180 stores the retailer has shuttered since the beginning of the year. Included in this most recent round of closures are 16 Sears stores and 49 Kmart stores, which will bring the total store count down to about 1,200 from 2,073 in 2012—a loss of about 42% of the retailer’s stores over five years.

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Pay attention to change: what we learned at the Global DIY Summit

BERLIN — The fifth annual Global DIY Summit concluded in Berlin last week. This year’s motto was “A New Era—a Glimpse into the Future of Home Improvement”. Presentations included the use of digital platforms as new business models worldwide, political and economic forecasts in the wake of the Trump presidency and Brexit, how a company should start its own digital transformation, the promising future for the garden sector, and a global overview of home improvement stores around the world.

The summit was hosted by three international organizations: the European DIY Retail Association (EDRA), the European Federation of DIY Manufacturers (fediyma), and the Global Home Improvement Network (ghin). Three Canadian companies were in attendance at the event; one of them was HARDLINES.

The general perception of the global economy was positive and most of the speakers forecast more innovation and growth within the coming years.

The first day culminated with a Gala Dinner and the presentation of the Global DIY Lifetime Award. This year’s award went to Gregory M. Bridgeford, former Executive Vice President of Business Development and Chief Customer Officer at Lowe’s. In his acceptance speech, Bridgeford spoke to delegates about the importance of networking and how much Lowe’s had learned from the best practices of other home improvement companies from around the globe. 

Presenters shared a wealth of insights. According to Obi President Sergio Giroldi (shown here), Amazon will soon take over as the market leader in home improvement. Traditional dealers will have to embrace this future or go out of business. To do that effectively, he urged delegates to use technology to transfer customers into “fans”. In Europe, he said, the majority of people have their basic needs met, so they are more likely to be looking for wishes than needs. “We have to think about the future, not about our past,” he added. “Our mission is customer satisfaction.”

Stephen Collinge of Insight Retail Group warned delegates to prepare for “huge turbulence ahead,” as 52% of the Fortune 500 companies from 2000 are now gone. “They were out-innovated. They couldn’t simplify.”

He shared yet another startling fact: the Bank of England has forecast that 15 million jobs in Europe will be replaced by technology within the next decade. To reinforce his point, he shared that, just a week earlier, Tesco had made its first robot delivery in a driverless car. 

The next Global DIY Summit will be held in Barcelona June 13 to 14, 2018. More than 67% of the delegates confirmed their participation in next year’s Summit.

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Appointment notice at Hardlines

We are pleased to announce the promotion of Sigrid Forberg to the role of Editor at Hardlines Inc. Sigrid joined us just over two years ago as Managing Editor. Since then, she’s proved herself an indispensable part of the Hardlines Team.

She is responsible for all aspects of the editorial content of our print magazine, Hardlines Home Improvement Quarterly, including creative, scheduling, story ideas, and selection of new product submissions. In addition, Sigrid oversees production of our weekly HARDLINES e-newsletter. She also supports a wide range of research and event-planning functions.

Sigrid is a graduate of the Carleton University School of Journalism. Before joining Hardlines, she wrote and edited for the Royal Canadian Mounted Police (RCMP)’s internal magazines. She brings with her a wealth of experience in writing, an innate curiosity, a sharp eye for typos, a keen interest in storytelling, and strong research skills.

If you have a story idea or a new product, please contact Sigrid directly at the Hardlines World Headquarters.

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Masco Canada has welcomed two new members to its trade sales team. Gilles Rousseau joins as Eastern Regional Sales Manager. Previously Director of Sales for J. Pierre Sylvain Agency Inc. for 10 years, he will now be responsible for management and implementation of brand strategies for the Eastern region, which consists of Quebec and the Atlantic Provinces. Jad Badine joins as Director of Commercial Business Development, and will be responsible for establishing and leading the overall business development plan for Masco Canada’s institutional, commercial, hospitality, and property management segments. He was previously at TPC Wire & Cable.

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June 12, 2017 Volume

xxiii, #24

“There is no passion to be found playing small—in settling for a life that is less than the one you are capable of living.”
—Nelson Mandela (political activist and former president of South Africa, 1918-2013)

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Home Depot launches Orange Door campaign to support homeless youth

TORONTO — Home Depot stores across Canada kicked off the annual Orange Door Project fundraiser last week to help end youth homelessness. Until July 2, customers shopping at Home Depot Canada stores can support the campaign by donating $2 at the checkout in exchange for a paper orange door.

“In Canadian neighbourhoods, kids as young as 13 are experiencing homelessness,” said Home Depot Canada President Jeff Kinnaird. “Together, we can shine a light on this serious social issue and inspire our friends, family members, and neighbours to take action to help.”

Donations to the Orange Door Project campaign support organizations that provide safe, stable housing and life skills programs for homeless and at-risk youth. Home Depot Canada covers all administrative costs of the campaign, ensuring that 100% of customer donations benefit local youth shelters, drop-in centres, or aid organizations.

The campaign has raised $6.6 million for more than 300 non-profit groups since 2007, and the Home Depot Foundation has pledged a total of $20 million by 2018 to improve housing options, support life skills programs, and invest in research to help youth build brighter futures.

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Lee Valley Tools opens store in Niagara Falls, expands new concept prototype

OTTAWA — Lee Valley Tools’ next store will open in what may well be Canada’s most popular tourist spot, Niagara Falls, Ont. That outlet, which will open officially June 16, has been designed to appeal to a transient, impulse-driven consumer in a touristy environment.

The product mix of a traditional Lee Valley store caters to woodworkers, hobbyists, and people searching for unique cabinet hardware, toys, and puzzles. The prototype for the Niagara Falls store reflects a more diverse range of products, focusing on “fun” items, garden tools, retro gizmos, and home accessories.

The concept and merchandising mix were first developed at a boutique outlet Lee Valley owns in Almonte, Ont., about 45 minutes outside of Ottawa. The town draws a steady stream of tourists and day visitors, especially on weekends, to explore its shops and art galleries. The store was originally acquired by the Lee family and tailored to accommodate that clientele. It was also secured as a pastime for the company’s founder, Leonard Lee, in his retirement. He passed away on July 7, 2016, at the age of 77.

In a previous interview, Robin Lee, president of Lee Valley Tools and son of Leonard Lee, told HARDLINES that he believed this “discovery” type of store would be effective in other tourist destinations such Niagara Falls, Ont., or Stratford, Ont., home to the Stratford Shakespeare Festival.

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Quebec association breaks from CRBSC, will field advocacy issues on its own

LONGUEUIL, Que. — AQMAT, the Quebec hardware industry association, is set to open its own Ottawa office, in order to pursue industry advocacy with the federal government directly. The announcement coincides with AQMAT’s withdrawal from the Canadian Retail Building Supply Council.

At its most recent meeting on June 1, the directors of the association unanimously accepted to strengthen the lobbying function of association President Richard Darveau to lead representation at the federal level, a role he already fills provincially. The association has secured a national office in Ottawa, near Parliament Hill.

AQMAT will stop financing the Canadian Retail Building Council (CRBSC) and will officially withdraw from that national body. However, it intends to keep communications open with the four other regional associations (ABSDA, LBMAO, WRLA, and BSIA of B.C.), to continue exchanging best practices and information, and to defend the industry regarding common issues faced by businesses at the national level.

“We prefer to keep better control over the actions to be prioritized and the rhythm to be adopted to induce government action,” said AQMAT Chair Nicolas Couture. “As the CEO is duly registered as a lobbyist in Ottawa, I am confident that we will obtain results more quickly, and more in sync with what companies here expect from us.”

For now, the Quebec association has identified renovation tax credits as a priority, and will implement a study to evaluate the potential impact of such credits.

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Feds pledge loan support for beleaguered softwood industry

OTTAWA — The Canadian government has pledged $867 million in loans and loan guarantees to the softwood lumber industry, following the imposition of countervailing tariffs on softwood exports to the U.S. The Feds will work in concert with the provinces to support the industry.

Not surprisingly, the U.S. lumber industry is railing against the move, claiming it’s yet another example of government subsidies that tip the balance of trade in favour of Canadian exports.

The loans are designed to help softwood producers offset the impact of the U.S. tariffs, which range from 3% to 23%, depending on the company and province they’re in. The loans should be used, say insiders, to help the Canadian industry become less reliant on the U.S. by developing offshore markets.

Federal support for the forestry industry includes:

• federal loans and loan guarantees to complement provincial efforts;
• efforts to expand overseas markets and promote the diversification of Canadian wood products;
• helping Indigenous communities and organizations improve the performance of their forest sector initiatives;
• providing a temporary extension of the maximum period for work-sharing agreements from 38 to 76 weeks in order to reduce layoffs;
• and expanding support to help affected workers upgrade their skills and transition to new opportunities.

The Forest Products Association of Canada voiced its support for the government measures in a release. “We appreciate that the federal government is standing tall for Canadian forestry communities by launching a comprehensive package in the face of trade actions that we believe are without merit,” said Derek Nighbor, CEO of FBAC. “This support will assist our efforts in continuing to transform our sector, diversify our markets, and support our workers.”

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Brad Dixon has joined Castle Building Centres Group Ltd., in the role of Business Development Manager for British Columbia and Alberta. He has a long history in the industry that includes stints at IRLY Distributors and TIMBER MART. He was most recently at Orgill Canada. In his new role, Dixon takes over from Les Gillespie, who recently left Castle after nine years with the company. (1-778-808-7995)

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June 5, 2017 Volume

xxiii, #23

“No act of kindness, no matter how small, is ever wasted.”
—Aesop (Ancient Greek storyteller, c. 620-564 B.C.)

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Lowe’s Canada CEO urges retailers to engage staff as well as customers

TORONTO — Lowe’s Canada CEO Sylvain Prud’homme spoke at last week’s annual convention of the Retail Council of Canada. His message, made in front of about a thousand retailers and retail service providers from across Canada, outlined a strategy that involves everything from the power of the customer over the retail transaction to making hand tools in outer space.

Understanding the customer’s shopping process and lifestyle choices figured large, of course, but Prud’homme actually led off by talking about employee engagement. “Retail will experience about 35% employee turnover on average every year,” he noted. That means 10,000 new staff for Lowe’s Canada each year. “How do we get better at retaining those new employees?”

He talked about finding people with the right skill sets, then creating an environment in which they have the autonomy to function effectively.

Of course, the changing habits of today’s customer remain a challenge—and an enigma—for any retailer. Prud’homme pointed out that technology, especially mobile applications, have accelerated the rate of that change, and made customers more connected than ever. “They actually control their purchase experience, and that is something new for us. They can pick and choose the experiences they need.”

How to win these customers over? He outlined three approaches: listening, learning, and adapting. “And we do it in real time,” he added.

He also warned about the fickleness of shoppers, and how online use only exacerbates that trend. That’s why Lowe’s has been so aggressive about expanding its online presence, to offer “a seamless presence” to customers across digital and bricks-and-mortar realities.

“Your customer is only one click away from shifting their business away from your store,” he warned.

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New U.S. owner pledges support to Tembec following takeover

MONTREAL — After announcing its friendly takeover of Tembec last month, Rayonier Advanced Materials vowed to “come to bat” for the Quebec-based forestry firm in the U.S.-Canadian softwood lumber dispute. The pledge provides some welcome reassurance in what is the latest in a trail of out-of-province and international acquisitions of Quebec companies over the past decade.

“We’ll be supportive of whatever works best for Quebec, Ontario, and our position here,” Rayonier Chairman and CEO Paul Boynton told reporters. The $807 million acquisition doesn’t affect the countervailing duties imposed by the U.S. on Canadian softwood lumber, but Tembec CEO James Lopez said Rayonier’s size and capital will help to offset the costs associated with them.

Assurances that Tembec’s Montreal headquarters will be kept intact didn’t fully assuage Unifor, the labour union that bargains for 900 Tembec workers. “We are concerned that the headquarters of Canadian operations in Montreal will have only a minor role in the direction of the company’s operations,” said Unifor’s Quebec director, Renaud Gagné.

Meanwhile Roger Gauthier, president of the union’s Local 233, was cautiously optimistic. “They’re going to want to make our pulp just as good as their standard pulps,” he said in an interview. “I think for the town that’s going to be positive.” Still, Gauthier admitted to concerns about the Canadian business’s autonomy under the new owners.

Quebec Premier Philippe Couillard expressed his reluctance to intervene in a deal already agreed upon by the companies’ respective boards. Responding to questions about the Tembec sale while on a mission to Israel, the premier said that “when the two boards of directors decide in a consensual way to conclude a transaction, they must be allowed to act.” Yet the province’s corporate brain drain continues to be a touchy subject, emblematic of the divide between Couillard’s free trade-oriented Liberals and their nationalist opposition.

Rayonier’s acquisition adds Tembec to the list of firms sold out of province in recent years, including RONA, the iconic Saint-Hubert restaurants, the Groupe Uniprix pharmacy chain, Cirque du Soleil, and Alcan Aluminium. The loss of Saint-Hubert to Ontario-based Cara Operations, which owns Swiss Chalet, struck a particularly populist chord, while the Parti Québecois unsuccessfully sought to block the sale of RONA inc. to Lowe’s before that deal was completed last spring.

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Canadian Tire’s Canvas brand caters to hip, young shoppers

TORONTO — Canadian Tire’s preview of its spring Canvas line reflects the company’s commitment to reach a younger, hipper demographic.

This season’s showcase was in line with current design trends. In addition to the increased blurring between the indoor and outdoor looks, colours, patterns, and textiles play a major role in the décor on offer from Canvas. Black and white, terra cotta, and rose-gold touches blend together to create a hand-crafted theme. 

“Part of the Canvas brand is being able to tell the whole mix and match story,” says Tracy Platt, brand design & development manager, consumer brands for Canadian Tire.

That mixing and matching includes the natural-looking, yet durable tables, chairs, rugs, and outdoor accessories. And beyond the basic patio components, displays incorporated traditionally indoor accessories such as mirrors and the currently fashionable succulent plants, as well as lanterns and table centerpieces.

Another fun trend on display was pineapple-themed accessories. The tropical fruit, now experiencing a surgel in popularity, which Canadian Tire has picked up on, made appearances everywhere—from pillow patterns and patio umbrellas to fruit-shaped string lights and ceramic knick knacks.

For its line of textiles, Canadian Tire again commissioned a Canadian graphic designer to create a series of four cushions. The colourful offerings from Avril Loreti, a Toronto-based designer, are also water-, stain-, and UV-resistant. “Which is great,” Platt says. “Because you can leave them outside and they’ll stay just as vibrant and bright.”

She adds that working with designers is something she and her team feel strongly about, and having the hand-drawn look for their textiles helps set the line’s accessories apart, while still integrating well with the basic seasonal pieces on offer.

“We’re really working on being able to tell that whole decorating story,” says Platt. “That’s what Canvas is all about.”

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Hand tool inventor wins patent suit against Sears

CHICAGO — A federal jury has found that Sears and supplier Apex knowingly violated a patent with its Craftsman locking wrench. LoggerHead Tools, a father-and-son enterprise, filed a complaint five years ago over the product’s resemblance to its Bionic Wrench, which Sears ordered from LoggerHead from 2009 until the 2012 launch of Craftsman’s own Max Access Locking Wrench.

Now Dan Brown Sr. and his son have been awarded $6 million in damages for the copying of their product. Stanley Black & Decker bought the Craftsman line this year, but the tools are still sold at Sears stores.

“You don’t often see David in the David vs. Goliath battles win,” Dan Brown Jr. told the Chicago Tribune. “It’s a huge win for small businesses, small inventors, and people who think if they have a great idea they should be able to bring it to the market and not be crushed by a corporate giant.”

The Browns’ lawyer, Paul Skiermont, observed that small entrepreneurs, when they have the means to pursue large corporations at all, often settle intellectual property disputes for “pennies on the dollar.”

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Luc Lemonde, National Director, Dealer Sales at RONA, has informed us he has retired. His last day at Lowe’s/RONA was May 26.

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May 29, 2017 Volume

xxiii, #22

“Advice is what we ask for when we already know the answer but wish we didn’t.”
— Erica Jong (American novelist and poet, 1942- )

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How vendors can meet eRetail buyers—and other ways Hardlines is connecting the industry

WORLD HQ, Toronto — Here at the Hardlines World Headquarters, we continually look for new ways to bring information and services to you, our Faithful Readers. Here’s a rundown of what we have in store for you for the rest of 2017…

Home Improvement eRetailer Summit: A dynamic forum for suppliers and traditional retailers to learn from North America’s leading e-commerce buyers and executives. You will meet face-to-face with retail buyers who are interested in increasing their online sales with your products. The focus of this year’s eRetailer Summit is on hardware and tools, home décor, paint, housewares, lawn and garden, outdoor living, and flooring. Suppliers and retailers alike will learn how to develop winning e-commerce strategies.

Who’s Who Directory of Buyers: Yes, it’s mailing this week! Our listing of all the top retailers, buying groups, co-ops, and wholesalers in Canada. Each listing includes full contact info, key buyers and their categories, key executives and management teams, sales, and buying group affiliations. The Who’s Who is indispensable for anyone trying to expand their leads and understand who the top retail buyers are.

Annual Retail Report: This one will be released next month. A massive document, it consists of more than 170 PowerPoint slides with quite simply everything we know about this industry. Year-over-year growth, sales by store format, market share by province, detailed analysis of Home Depot, Lowe’s, Home Hardware, and Canadian Tire, plus breakdown and ranking of the buying groups, and leading retail chains. This report digs deep, with a recap of conditions affecting the industry, analysis of trends and business conditions, and critical forecasts for 2017 and 2018.

Hardlines Market Share Report: This important research document provides market share data for every home improvement banner in this country, including valuable year-over-year analysis. Available in August. (Pairs perfectly with our Retail Report!)

Free Daily News Updates: You don’t have to wait until Monday morning for your updates on the industry. We provide a free “clipping service” of news related to hardware, home improvement, and retail in general on a daily basis. Just sign up at our website under “Daily News Updates” or click here right now!

Hardlines Home Improvement Quarterly Magazine: HHIQ is mailed four times a year to more than 11,000 home improvement dealers and managers across Canada. Your best source for information on running your business better—and for vendors it’s absolutely the best way to advertise your message to the retail community!

And finally, don’t forget to mark in your calendar our 22nd annual Hardlines Conference, November 14 to 15 at the Sheraton on the Falls hotel in Niagara Falls, Ont. Speakers include executives from Lowe’s Canada, Peavey Industries, and Patrick Morin. The best networking event of the year!

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Home Depot reveals its hot sales drivers in Q1

ATLANTA — Home Depot reported healthy first-quarter results last week, including sales of $23.9 billion that were up 4.9% over 2016. In a call to analysts following the release of those results, Home Depot executives provided some insights into where the growth is coming from, including large-ticket sales, increases in its contractor business—and a dramatic rise in e-commerce.

According to Ted Decker, the retailer’s EVP of merchandising, “We had a great first quarter driven by continued strength across the store. Our pro business was particularly strong and outpaced the company average. We also saw excellent growth in our online business as online sales grew approximately 23%.”

Decker pointed out that Home Depot’s pro business keeps growing: “In the first quarter, sales with our pro customers outpaced the company average driven by both our high-spend and low-spend pros. We saw strong comps in several lumber categories—wire, commercial-industrial lighting, and gypsum.”

But other areas performed well in the first quarter, as well. “All of our merchandising departments posted positive comps. Appliances, lumber, and flooring had double-digit comps in the quarter. Tools, electrical, plumbing, décor, and kitchen-bath were above the company average.”

Product innovation continues to drive sales, said Craig Menear, Home Depot’s chairman, CEO and president. “The extension of lithium-ion battery technology into the outdoor power category is an excellent example of our ongoing focus on innovation and we continue to see great sales in this category.”

While noting the strength of Home Depot’s online sales strategy, he pointed out the importance of the company’s bricks-and-mortar presence, as customers still largely prefer to come to the store to finalize the sale. “With over 45% of our orders on homedepot.com, the customer is actually choosing to pick up in our stores.”

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U.S. lumber dealers confront higher prices in wake of Trump tariff declaration

SPECIAL REPORT — A new U.S. tariff on imported Canadian softwood lumber is the latest change to an old trade debate between the two countries. The U.S. government, as of late April, is implementing a 20% tariff on Canadian softwood.

Lumber sellers in the U.S. have been anticipating the tariff and increasing prices since the presidential election in November, says Ray Formosa, president of Brooks Lumber in Detroit. Brooks Lumber buys some Canadian utility- and economy-grade lumber, which is used to build commercial pallets.

In Canada, most forests are on crown land, and prices for harvesting trees on that land by private companies are set by the government as stumpage fees. Those stumpage fees are considered artificially low by the U.S. side, thereby constituting a government subsidy. In the U.S., most of the forest land harvested for softwood is privately held, and prices for the trees are market driven.

Due to competition, the tariff will impact lumber prices throughout North America, Formosa says. “It’s going to have a domino effect.” Construction costs will increase as a result, but he doesn’t think his business will suffer. “If everyone else’s prices are going to go up, so are mine,” he says. “I really don’t foresee it changing our business because everyone is in the same water. Nobody likes higher prices, but then again, if you’re all doing it, I say everyone’s going to have the same impact.”

Kenyon Noble Lumber & Hardware in Bozeman, Montana, has been planning ahead for the tariff since January, says general manager Mike Thompson. “If you appropriately planned for the tariff, then it shouldn’t affect your business.”

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Women carve out their place in the world of home improvement retailing

SPECIAL REPORT — Women make up more than half the population, and affect more than 80% of the buying decisions concerning home improvements and repairs. And there are many women who have chosen to build their careers in the industry.

Last fall, the Hardlines Conference brought together a panel of women from across the industry to weigh in on the role women have in the future and growth of the home improvement industry. Moderated by HARDLINES’ own publisher, Beverly Allen, the panellists consisted of Sherri Amos, director of dealer support for Home Hardware; Sara Clarkson, president of Storesupport Canada; Christine Joannou, key account manager for MAAX Bath; and Jillian Sexton, COO of Hector Building Supplies.

Sherri Amos started with Home Hardware 17 years ago. She told the audience, “Like many of you in this room, I’m sure, it was a happy accident that I found myself in this industry. But what I can say is that once I arrived, I really fell in love with what we do and how critical it is; how it’s a foundation within Canada and the stability it offers.”

Sexton, despite being born into the industry, nevertheless surprised her father with her decision to make a career in the family’s Nova Scotia chain of stores. Beyond the fact that having a thriving company that you can simply walk into is an opportunity not everyone gets, she says she found the field universally relevant. “Everyone has a home or wants a home,” says Sexton. “The industry isn’t going away, it may change or grow, but everyone’s always going to need things to build and modify their homes.”

Joannou, who works in fashion bath, started her career in in clothing retail before moving into sporting goods. Having been in the home improvement industry for 11 years, she says her gender offers her an advantage in the field as her category’s target customer is the female shopper. “Being a woman gives me the insight to enable me to relate to the customer better and target our offerings and marketing correctly for our target customer.”

(This story is excerpted from the latest issue of our sister publication, Hardlines Home Improvement Quarterly. This magazine gets mailed to more than 11,000 dealer-owners and managers across Canada. For more information, click here!)

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May 22, 2017 Volume

xxiii, #21

“The man who works and is not bored is never old.”
—Pablo Casals (Spanish cellist, conductor, and composer, 1876-1973)

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New products and innovation abound at National Hardware Show in Las Vegas

LAS VEGAS, Nev. — The range of new products being featured at this year’s National Hardware Show was nothing short of impressive. Innovation ranged from high-tech robotics to distinctly low-tech but eminently practical vintage stylings.

(Click here for our report on what we saw at the National Hardware Show from companies such as Belwith, Caframo, Worx, Saint-Gobain, Napoleon, BBQ Québec, Broilchef, and more.)

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McNabb at Home Hardware says e-commerce is the big push for 2017

ST. JACOBS, Ont. — Home Hardware Stores Ltd. is getting serious about its e-commerce business. The dealer-owned co-op is gearing up its distribution capabilities to serve consumers with online sales.

According to Rick McNabb, vice president of marketing and sales for Home Hardware, the company will launch a ship-to-home capability at the beginning of 2018. With three distribution centres across Canada, Home can utilize its existing logistics network as sources for products bought online, “and harness our roots as a wholesale distribution centre,” he says.

“We’re trying to position an e-commerce business that dealer-owners have empowered us to manage and run from [head office].”

The initiative will include the launch of a new website during the second half of 2017 that will feature a new campaign to promote Home’s brand and products. The goal of the website, says McNabb, will be to reflect the experience of shopping in a bricks-and-mortar Home Hardware store. “There’s a huge amount of excitement around the company about the future,” he adds.

“Our goal is to be a full omni-commerce retail channel.”

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Canadian Tire showcases new spring Canvas line of home décor products

TORONTO — Canadian Tire’s spring launch of its Canvas line showcased a number of new seasonal offerings in the company’s lines of spring and fall home living products. Canvas, which was launched for Christmas 2013, began as a platform primarily for seasonal products, but the last few years has seen it grow its indoor offerings, as well.

The patio furniture the company is promoting this spring focuses equally on fashion and functionality. Tracy Platt, brand design and development manager, consumer brands for Canadian Tire, says there’s an increased blurring of design elements across patio and home furniture lines.

“Indoor furniture trends are influencing the outdoor trends,” says Platt. “There are some patio tables I see that aren’t clear whether they belong inside or outside—they would work in either space.”

And a few of the products found in this year’s patio displays—such as a wicker basket with a lid—have even been repurposed from previous years’ indoor lines.

Platt adds that her team also takes the Canadian summer season into consideration when it comes to design. As an example, she points out an ottoman that looks like it’s made of wood, but is actually composed of rust-proof aluminum. It has a plastic lining on the inside to help protect its contents from the elements. “There are a lot of smart details like that—we’re very mindful of the Canadian season in our designs.”

Platt says she and her team, who come from design backgrounds, are always thinking about pushing the envelope a little with each launch. “We’ve really embraced colour, and we’ve embraced pattern this year.”

In contrast, many of the home furniture offerings are neutral in nature, with a high-end look. Lighting especially has been influenced by international trends, with many of Canvas’s table-top lights and chandeliers featuring stark metal industrial looks, which are then complemented by furniture with sharp lines and neutral shades.

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Lowe’s promises best of both worlds with conversion of Edmonton RONA store

TORONTO — Lowe’s Canada will gradually convert RONA’s big box Home and Garden stores to the Lowe’s banner. The first, Namao RONA in Edmonton’s north end, is being converted now, with an expected completion by this summer. The store is undergoing full reracking and remerchandising, while staff will be trained according to Lowe’s guidelines.

The store will take on Lowe’s own private brands such as Kobalt, and add heavy appliances. However, don’t expect it to be a strict cookie cutter example of existing Lowe’s stores. According to Alan Blundell, divisional vice president, merchandising for Lowe’s Canada, the refurbished outlet will combine the best of both banners, especially in the case of RONA’s expertise in catering to contractors.

“RONA knows pros and we have to make sure we build on that,” he said during a presentation at the recent Hardlines Meet the Buyers Breakfast. That means providing the breadth and depth of product that pro customers count on.

The new store will also reflect a move by Lowe’s Canada to depart from the current model, which was developed to cater largely to the Ontario market. With this refit, Lowe’s will look for ways to let local markets drive assortments to a greater degree.

The new Namao Lowe’s will feature 97,429 square feet of retail sales space, a 30,188-square-foot garden centre, and a lumberyard that comprises 16,922 square feet. 

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RCR International has named Mario Petraglia as President, effective immediately. He will continue to report to CEO Lester Lee. Petraglia holds nearly 27 years of experience in finance and operations roles with companies such as PwC, Rio Tinto Alcan, Loblaw, and Laura Canada, including the past 17 years in senior and executive-level positions. Founded in 1946, RCR International is a North American maker of residential and commercial weather proofing and flooring products.

At Goodfellow, Jeff Morrison has been appointed Vice President of National Accounts. He has worked for the lumber and hardwood flooring products supplier for more than 15 years, starting in the company’s Edmonton branch in inside sales. He moved to Ontario in 2004 to join the LBM team there and has taken on progressively more responsibilities with Goodfellow over the years.

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May 15, 2017 Volume

xxiii, #20

“I cook with wine. Sometimes I even add it to the food.”
—W. C. Fields (American comedian, actor, and writer, 1880–1946)

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Vendors enjoy solid traffic at NHS, despite no-show by Lowe’s buyers

LAS VEGAS — Canadian vendors in Las Vegas this week were largely positive about the traffic and customer contacts they experienced throughout the three days of the National Hardware Show. The show, held this year from May 9 to 11, long-ago established itself as the destination for most of the Canadian hardware industry, with Canadian Tire, Home Hardware, Groupe BMR, Federated Co-operatives, and Home Depot Canada among the retailers that sent teams of buyers down.

The most conspicuous absence from Canada was from the country’s number-two player, Lowe’s Canada. That company decided at virtually the last minute to cancel its participation. Lowe’s Canada had originally planned to send up to 18 buyers from both its Lowe’s and RONA teams. According to a spokesperson for the company, the decision was made based on a desire to “focus on the business during this busy time of year, particularly given the shift in the weather.”

Nevertheless, other retailers were there in force, including senior decision makers. They included Joel Marks, VP Merchandising at Home Hardware Stores Ltd., Randy Martin, VP of procurement for TIMBER MART, Mike Daniels, GM of Spancan, and Tony Steier, Home and Building Solutions Director at Federated Co-operatives Limited. And there was plenty for them to see, as new products and innovations were particularly in evidence this year. The show again featured a strong showing by Canadian vendors, including RCR, Nuvo Iron, Task Tools, EAB, CTM Hardware, and Richelieu Hardware, which was exhibiting for the first time in more than a decade. There was even a group stand sponsored by Export Quebec.

The culmination of buyer-vendor liaisons was the Maple Leaf Night by the Canadian Hardware and Housewares Manufacturers Association. This event again managed to draw the buyer community from Canada to share drinks and stories at the Mirage hotel on May 9. According to CHHMA’s Sam Moncada, about 225 people attended overall.

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Canadian Tire announces acquisition, post sales increase in Q1

TORONTO ― Canadian Tire Corp. reported healthy gains in its first quarter, including an increase in sales by its Canadian Tire Retail segment (which includes Canadian Tire-bannered stores) of 2.0%. That business’s same-store sales were up 0.5% compared to the prior-year quarter. And a new acquisition underscores the company’s desire to boost its presence in the kitchen category.

Overall consolidated retail sales for the corporation were up by $95.0 million, or 3.8%. Excluding petroleum, consolidated retail sales were up 1.4%. Consolidated revenue increased $194.1 million, or 7.6%, which includes a $62.4 million increase in petroleum revenue thanks to higher gas prices. Canadian Tire’s Retail segment enjoyed a revenue increase of 8.5% in the first quarter. Excluding petroleum, it was up 6.8%.

Canadian Tire has also entered into an agreement to acquire Padinox Inc., the company that owns the Canadian rights to the Paderno brand of kitchenware. In a release, the company says the acquisition, “coupled with Canadian Tire’s strength in product development and marketing, will play a central role in Canadian Tire’s new cooking innovations and expanded kitchen assortment.”

As part of the transaction, the manufacturing and wholesale distribution operations of Padinox Inc., based in Prince Edward Island, are being sold to Meyer Canada, a distributor of cookware and related kitchen products. Meyer’s other licensed brands include Farberware, Rachael Ray, Paula Deen, and Cake Boss.

According to CTR President Allan MacDonald in a call to analysts, “Kitchen is a brand-driven category, and our 8% penetration of owned brands in kitchen pales in comparison to the 88% we have in Christmas.” The Paderno acquisition is part of a move to increase that share of branded kitchen sales.

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CRBSC reorganizes, names ABSDA’s Denis Melanson chair

OTTAWA — The board of directors of the Canadian Retail Building Supply Council (CRBSC) has appointed Denis Melanson as its new chair. The move follows the sudden resignation two weeks ago of AQMAT head Richard Darveau as CRBSC chair.

Now, the CRBSC, the national organization made up of the five regional building supply associations across Canada—ABSDA (Atlantic Canada), AQMAT (Quebec), LBMAO (Ontario), WRLA (Western Canada), and BSIABC (British Columbia)—are unrolling a plan for the near future.

Melanson, who is president of the ABSDA, will serve as chair for a two-year term. The CRBSC was legally incorporated in 2016 when the regional associations identified the need to unite as a structured entity to better respond to the changes in the building supply industry, specifically at the national level.

As part of that mandate, it hosted a meeting with key industry stakeholders on March 22 in Halifax. “We were thrilled to host 33 industry leaders from across the country at our leadership summit,” said Melanson. “They assisted in a program which validated exactly what the CRBSC’s priorities should be when charting a plan for the future.”

Four strategic priorities were identified, with the need for a unified national voice at the top of the list. “The absence of a national voice hindered us from advocating as one on issues and topics that affect our industry. Going forward, the CRBSC will act as a unified national voice for the building supply industry,” Melanson continued.

The CRBSC will hold a national meeting in Montreal in June to finalize an action plan based on the recommendations and strategic direction provided at the Halifax leadership summit.

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Canac looks to expansion of west side of Quebec, then Ontario

L’ANCIENNE-LORETTE, Que. — The grand opening last week of a store in Granby, Que., about an hour east of Montreal, is a clear indication of the commitment by retail giant Canac to move in on the greater Montreal market. And after actively expanding into new markets in the east side of the province, Canac, which is based in L’Ancienne-Lorette, near Quebec City, is now looking westward for new markets. Jean Laberge, president of Canac, says a store slated for Rivière-du-Loup would sew up markets on the east side of the St. Lawrence River. “It will complete for us the east side of the province.”

But, he adds, “We are slowly moving west. There’s room there for many, many more stores for Canac.”

That expansion could even include Anglophone markets in the future. Already, the company has translated its website and flyers into English in anticipation of opening a store in Ontario by as early as 2019. And while he considers the Ottawa market well served, he says there are other opportunities in the Ontario market.

“We looked for land in Ontario, near the border, where we could install Canac stores. We are almost ready to go into the English market,” he says.

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Richard Paulin will retire from his role as President of the Hillman Group Canada, effective July 1. He joined H. Paulin & Co. Limited in 1977 and started his career as a financial analyst. Harry Paulin, Richard’s grandfather, started the company in 1920. It was family-owned and operated until 1972 when it went public on the Toronto Stock Exchange. Hillman acquired H. Paulin in 2013 and Richard took on the role of President of Hillman Canada at that time.

The North American Retail Hardware Association held its annual awards dinner for young retailers last week in conjunction with the National Hardware Show. Winners from across North America were honoured, including a Canadian: Matthew Payzant, General Manager of Payzant Home Hardware Building Centre in Sackville, N.S. 

Festool has announced the appointment of Aaron Brading as Chief Sales Officer, responsible for leading the company’s sales functions in the U.S. and Canada. Previously with Hilti Inc., Brading led teams in the power tools and accessories, and civil and energy divisions.

Susan Collins has joined the customer service department at CashierPRO, a Stratford, Ont.-based company that provides point-of-sale and inventory management systems for hardware, farm, and building materials dealers. Collins has a background in retail services, accounting, and inventory management, most recently as the operations manager at Crompton Home Hardware Building Centres. She also was a software platform specialist, providing training and support for Epicor and Epicor/Dimensions products.

Thomas Kinisky has been named CEO and President of Saint-Gobain Corp., Saint-Gobain’s North American holding company. He takes over from John Crowe. Kinisky joined Norton Co. in 1989, a year before it was acquired by Saint-Gobain. Most recently, he held the role of President of Saint-Gobain Performance Plastics.

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May 8, 2017 Volume

xxiii, #19

“You are unique, and if that is not fulfilled, then something has been lost.”
—Martha Graham (American dancer and choreographer, 1948–1954)

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Lowe’s execs share insights into new structure at Meet the Buyers’ Breakfast

MISSISSAUGA, Ont. — Lowe’s top buying influences gathered at the Hilton Mississauga/Meadowvale hotel recently for the 2017 Hardlines Meet the Buyers Breakfast. There, they shared the structure of Lowe’s various banners and how to do business with those banners. And 120 vendors were in the room to hear them speak.

Alan Blundell, divisional vice president, merchandising, Lowe’s; Christian Dauphinais, divisional vice president, merchandising for Réno-Dépôt; and Marc Gingras, divisional vice president, RONA proximity stores, took turns explaining how the different store formats are organized within Lowe’s Canada. They laid out to the vendors the strategies behind each banner and how vendors can align with those strategies as the retailer grows in Canada.

Blundell talked about the target customer for Lowe’s stores: young and middle-aged families with young children and above-average incomes. They spend up to $12,000 per year on home improvements, he said. Gingras explained that the model of the RONA proximity stores is based on the vitality of the contractor market. He told the audience that a new prototype builders’ showcase at a RONA store in Oakville, Ont., was delivering same-store contractor sales of 30% so far this year. “We’re still fine-tuning but it’s already showing success.”

The formal presentations concluded with Maxime Harvey, director, building materials, Lowe’s Canada, who handles procurement. He explained the delicate balance between the buying and the actual procurement process. He also stressed the importance of vendors working with Lowe’s Canada on its terms, despite pressures on pricing during negotiations. He said the growth vector for his company has been, and will continue to be, dramatic in coming years and Lowe’s needs vendors to support—and ultimately share—in that growth.

To conclude, all four answered questions submitted by Hardlines Editor-in-Chief Michael McLarney on behalf of the audience. After the formal presentation, the executives all stayed to take time to speak with each vendor in the room individually. 

(Our thanks to the Lowe’s team for stepping up to participate in this amazing event!)

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Home Hardware’s new direction: greater emphasis on the building supply side

ST. JACOBS, Ont. — With a new ad agency, a new slogan, and a new imperative to target millennial customers, Home Hardware Stores Ltd. has made a lot of changes in recent months. A key driver of those changes has been Rick McNabb, vice president of marketing and sales for the dealer-owned co-op. He joined the company just over a year ago.

One of the immediate challenges he identified was harmonizing the strength of the building supplies business within the company, which has traditionally considered itself largely a hardware retailer. But growth in recent years has come from converting many Home Hardware stores to Home Hardware Building Centres, increasing the store footprint dramatically to accommodate a full offering of LBM.

McNabb points out that Home actually has four banners: Home Hardware (hardware), Home Hardware Building Supply (home centre), Home Building Centre (lumberyard or contractor specialist), and Home Furniture (furniture, décor, and heavy appliances).

The new slogan, “Here’s how,” is a directive to empower a younger generation to seek products—and advice—to get their home improvement projects from a Home store. “It’s more than a slogan; it’s a calling card that embraces what Home Hardware stands for," he says. “We don’t want to be seen just as small project stores.”

Talking about the new direction for the company, McNabb cites Lowe’s as the competitor he believes it’s important to keep up with.

“It’s not going to be business as usual. This will position us to keep ahead of the changes in the market and be fresh and relevant.”

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Richard Darveau steps down as CRBSC chair

LONGUEUIL, Que. — Richard Darveau has announced his resignation as chair of the Canadian Retail Building Supply Council, halfway through his two-year term. Darveau, who is president and CEO of the Quebec industry association, AQMAT, cited differences over the umbrella organization’s direction.

“Trying to act and talk as a unified voice when there are five founding resources with more differences… than common ground is too heavy a task in comparison with thin and slow results,” he said in a statement.

The CRBSC was founded as an umbrella of provincial and regional building supply dealers’ groups, including the ABSDA, LBMAO, WRLA, and BSIA. The collective goal of the CRBSC is to formalize industry concerns at the national level. The move was in response to growing support of a more unified voice nationally for the retail hardware and home improvement industry.

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Slegg celebrates 70th anniversary with trade show, acquisition

NANAIMO, B.C. — Slegg Lumber, a dominant dealer on Vancouver Island, added a 12th location recently with the acquisition of Dodd’s Lumber in Duncan, B.C. “Buying Dodd’s was a big one for us, because it fills a geographic hole on the island,” says Tim Urquhart, president of Slegg. The company has stores in Nanaimo and Langford, and had a small, older facility in Duncan, which the Dodd’s acquisition replaces.

The expansion ties in with Slegg’s 70th anniversary. The business was founded in Nanaimo by the Slegg family, then sold to WSB Titan at the beginning of 2015.

Urquhart says Titan’s influence on Slegg has been a positive one bringing new procedures and greater discipline to the company and how it approaches the market. One relatively new aspect of Slegg’s business is an annual trade show for its contractor customers. The first one was held last year, drawing more than 600 builders and trades. This year’s event was held April 27 in a community centre in Langford, drawing more than 1,000 attendees this time.

“It’s a changing environment and a changing market that we’re in,” Urquhart observes.

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Groupe BMR has appointed Jonathan Gendreau as VP for Marketing and Digital Strategy. Gendreau has 13 years of experience in e-commerce and digital marketing, including seven years in the retail industry. After serving as marketing director for Lozeau from 2004 to 2011, he joined Groupe St-Hubert as senior advisor for Interactive Marketing. In 2016, he was promoted to marketing director, and in that capacity led the marketing and digital activities of the food service division.

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