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Michael McLarney, President & Editor mike@hardlines.ca Beverly Allen, Publisher bev@hardlines.ca John Caulfield, Contributing Editor Phone: 416-489-3396 |
| November 3, 2008, Vol. xiv, #41 | |
| In This Issue | |||||||||||||||||||||||||||||||||
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“ Democracy is the recurrent suspicion that more than half of the people are right more than half of the time. ” —E.B. White (American writer and essayist, 1899-1985) |
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| Industry heavyweights weigh in at Hardlines Conference | |||||||||||||||||||||||||||||||||
TORONTO — The strength of the independent emerged as one of the themes of the latest Hardlines Conference, held here Oct. 23-24. While their ability to tailor their businesses to a unique local market gives them a competitive edge, their viability long term resides in their collective strength. Yves Gagnon, president and CEO of BMR le groupe, which serves some 180 independently owned points of sale in Eastern Canada, mapped out how BMR has evolved to serve its members, and rely on their loyalty in return, to make BMR a strong group. BMR has, through the years, added logistic services to make the group as self-reliant as possible. It now has full distribution facilities, with two warehouses for building materials — in Longueuil and Quebec City, and a hardware DC in Longueuil.  Greg Dinsdale’s company, LBMX, helps buying groups communicate better with their vendors and members electronically. He offered up examples of how the independent, with a passion and spirit that will go unmatched by the “corporates”, nevertheless needs not leave the sophistication of systems to those large companies. Many buying groups in other sectors around the world, he pointed out, provide billing and real-time rebates to their members in a fashion that still eludes this industry.  Ace Hardware is now shipping Canadian dealers — along with other Ace dealers in countries around the world, from a distributioncentre in Shanghai. Murray Armstrong, president of Ace International, explained that even independents can order small container loads online from this facility. Vendors, as well, are taking advantage of the new DC: many of them, with production of their own in China, are able to fill it directly from their own factories, saving them having to ship it all the way to Ace in the U.S., only to have to ship it back to other countries. The 13th Annual Hardlines Conference drew some 150 industry leaders from the US, Canada, Germany and Australia to hear a range of industry leaders and economic experts outline the trends and challenges facing home improvement retailing. Top. |
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| TruServ trims staff following ERP installation | |||||||||||||||||||||||||||||||||
| WINNIPEG — A number of layoffs at TruServ Canada, the retail hardlines distributor, have sparked concerns about the company’s fortunes among the vendor community. However, says CEO Bill Morrison, the cuts “will largely affect our administration.” He also notes that about 80% of the people affected accepted voluntary buyouts.“We completed our planning for 2009 last week,” he says. “Although we feel good in most cases, we have some concerns in some areas. So we’re taking a hard look at our systems.”
The major change to systems actually dates back to January 2007, when a new ERP (Enterprise Resource Planning) system was initiated. Morrison “it took a little bit longer to get the efficiencies out of these new technologies. Things are going well now.” As a result the 16 people — about 4%-5% of TruServ’s workforce, were all from the administration and logistics side of the business. “These positions have been largely automated.” “We’re being proactive, not reactive, in assessing our business going into 2009. But it’s business as usual.” |
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| Reno market will weather the economic storm, as starts fall | |||||||||||||||||||||||||||||||||
TORONTO — Don’t expect renovation spending to be hit too hard by the current downturn in Canada’s economy, says a leading analyst for Canada Mortgage and Housing Corp. Ted Tsiakopoulos, the top Ontario economist for CMHC, told an audience of vendors and retailers from the home improvement industry that economic growth will continue to drop in 2009, but expects consumer confidence to begin rebounding in the U.S. in the latter half of next year, which will be good news for the Canadian economy. Speaking at the 13th Annual Hardlines Conference, Tsiakopoulos said that falling housing starts are an important indicator, but pointed out that reno spending is not likely to be impacted as severely by the current downturn. “There’s a three-year lag in renovations following new-home purchases and the buoyant sales in recent years will continue to drive reno spending for three more years.” He added that, following the frenzy of home buying in Canada, “people are not as passionate about buying that new home. They want to stay put and invest in the one they’ve got.”
And despite the falling dollar, job growth will stay strong in the West. “The new Alberta is, of course, Saskatchewan and Manitoba. These are the regions,” he said, “that will continue to grow. In Atlantic Canada, Newfoundland’s economy will also stay hot, fueled by natural resource production. |
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| AFA purchases Breton Distributors | |||||||||||||||||||||||||||||||||
| HALIFAX — AFA Forest Products has made another move to consolidate the forest products industry in Atlantic Canada with the acquisition of Breton Distributors Ltd. This move, along with AFA’s acquisition of Lighthouse Lumber Wholesalers in early 2007, with branches in Moncton, Halifax, and St. John’s, gives AFA a dominant presence in the Atlantic market. The latest acquisition will significantly enhance its ability to serve the Cape Breton and Western Newfoundland regions.As part of the purchase, Jim Stewart has been appointed manager of the Breton branch. A 20-year veteran of the industry, most recently as Cape Breton Branch manager for Acadia Drywall, he reports to AFA’s general manager for the Atlantic Region, John Morrissey.
AFA, based in Bolton, Ont., has been in business since 1974 and is a Canadian-owned independent distributor of commodities and allied products to building supply dealers. It has 14 branches across Canada and in the U.S. |
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Who are Canada’s top home improvement retailers and buying groups? Find them all in our latest Hardlines Quarterly Report Click here for more info. — Beverly |
| COMPANIES IN THE NEWS |
| BARRIE, Ont. – Lowe’s Canada will host a job fair today through Saturday to recruit staff for its new store here, which is scheduled to open sometime before the end of this year or early next year. A week later, it will have a job fair for its store slated to open in Whitby, Ont. Two more openings are scheduled for Lowe’s 2008 fiscal year, in Belleville and Windsor, Ont. Lowe’s already has seven stores in Canada, all of them in Southern Ontario.TORONTO — Canadian Tire is considering the addition of foods to the shelves of two of its stores in Ontario, beginning next month. The move marks another counter-offensive by Canada’s largest hard goods retailer as Wal-Mart continues to expand its home enhancement departments. Another Canadian retailer, Loblaw, has, in recent years, been expanding in the other direction — adding general merchandise and apparel to its core grocery business.
BENTONVILLE, Ark. — Brighter, easier-to-navigate stores, a new retail concept geared for Hispanics, and greater emphasis on growth in Third-World markets are among the strategies being deployed by Wal-Mart to become even more successful during the economic crunch facing its customers. The company has implemented cost cutting, which includes a cutback on new-store openings in favour of refurbishing existing stores and focusing on new-store expansion in emerging markets. The company expects growth of 8% this year, and 5%-7% next year. TALYOR, Mich. — Masco Corp., one of the largest suppliers of home-related products and services in North America, saw profits plummet by nearly 84%, to $33 million, in the quarter ended Sept. 30. During that period, the company’s revenue fell 15.9% to $2.528 billion. Through the first nine months of its fiscal year, Masco’s sales were off 14.1% to $7.621 billion, and its profit dropped 78.2% to $117 million. MISSISSAUGA , Ont. — The Bargain! Shop is opening 65 stores across Canada between now and Christmas. This will bring the number of these “extreme-value” stores, operated by the former Woolworth’s division, to just over 250. “In spite of the difficult economy, or perhaps because of it, this is the best of times for extreme-value retailers like TB!S, said Michael Roellinghoff, president and CEO, in a prepared release. The Bargain! Shop recently completed the acquisition of a number of former SAAN leases, as well as buying their intellectual property, including the SAAN name, but they will operate all of the stores under the “The Bargain! Shop” banner. A typical 11,000-sq.ft. store carries a selection of products for the home (including electronics, housewares and home textiles), as well as mens’, ladies’ and kids apparel. CHICAGO — W.W. Grainger, the industrial distributor, has established a global supply chain function under newly appointed senior vice-president D.G. Macpherson. This new function will provide global planning, coordination and specialized expertise to the supply chain organizations in all of Grainger’s business units. The initial focus will be on global supply chain architecture, procurement and supply chain talent management. Joseph J. Stachowicz, president of Grainger Global Sourcing, reports to Macpherson in his new role. MINNEAPOLIS – Zareba Systems has sold substantially all of the assets of its professional series automatic gate operator product line to Amazing Gates of America, LLC for $739,000, plus the assumption of certain outstanding inventory purchase obligations. The purchase price was payable in cash of $200,000 at the closing, with the balance to be paid through a series of payments through December 2010. Zareba will now focus exclusively on sales and support of its Zareba Systems do-it-yourself brand of automatic gate openers through existing retail channels. Zareba is a manufacturer of electronic perimeter fence systems for animal and access control. |
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ECONOMIC INDICATORS |
| New-home sales in the U.S. rose in September by 2.7% over August, to an annualized rate of 464,000 units. That unit count was 33.1% below the sales figure for September 2007. And there’s still 10.4 months worth of unsold new homes on the market, at the current sales rate. Prices continue to soften and the median sales price for new homes fell by 0.9%, to $218,400, in September, representing a four-year low. |
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Resumés
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| Sales professional – established relationships with key clients in the hardware, building materials, and paint industries, team player, superior business development skills, competitive, enjoys challenges. |
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Hardlines Products
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among the companies represented onstage at the 13th Annual Hardlines Conference, held here last week.The Conference attracted about 140 industry representatives, from the retail, wholesale and vendor sectors. Despite the sudden downturn in the economy, they shared a passion to learn how to maximize their ability to survive this downturn with the latest economic retail and information and insights.
from recycled materials. Greg Hicks, COO of TSC Stores, a chain of farm and hardware stores based in London, Ont., talked about the appetite for green initiatives among his customers, and how they are being satisfied with green audits and a pilot store that is powered by solar panels, while TSC awaits approvals to hoist a wind turbine atop another store. Keynote speaker Ray Civello, trained as a hairdresser and went on to become the marketing powerhouse behind Aveda Products, a line of organic cosmetics. His philosophies about sustainability extended to the ingredients used in the Aveda line and to how retailers can operate more efficiently to reduce waste water and energy.
That bang earned Lowe’s Canada the 2008 Newsmaker of the Year Award, which is presented by Hardlines each year at the Hardlines Conference, to recognize a company that has made a significant impact on the industry in the past year. The award, sponsored by OSRAM Sylvania, was presented by OSRAM’s JoAnn McKeown, vice-president sales and marketing, to Ben Mauceri, vice-president merchandising for Lowe’s Canada, at the Awards Breakfast on Oct. 24.
The store features standard departments, including kitchen, bath, flooring and décor showrooms; paint and design centres; inspirational vignettes; tool rental; installation services and a contractor service desk. Using a “spoke-and-hub” layout, the store was designed with all aisles leading to a central service desk in the middle of the store, in an effort to ease customers’ search for products and service. The smaller layout fits about 36,000 SKUs, down from the 40,000-plus SKUs found in a full-sized Home Depot, but the retailer’s special-order service is front and centre, offering thousands of additional products.
drive-through lumberyard and 28,000-sq.ft. garden centre, were way too big for the markets being served.
Daniel Rioux will join TIM-BR MART as their general manager, Quebec. Located in the newly established Montreal office, his key function will be to build relationships with key vendors and ensure the dealers’ interests are well-represented during TIM-BR MART’s yearly negotiations and beyond. Rioux will also have responsibilities on a national level, managing a key category and participating on national and regional negotiation committees.
TORONTO, Ont. — Red Green creator and star, Steve Smith, has a new biography, entitled We’re All In This Together, and 3M Canada will be the sole Canadian distributor for the book. Smith collaborated on this book TV personality Mag Ruffman, the host of DIY television classics like A Repair to Remember (and a long-time friend of HARDLINES!). Smith and Ruffman will embark on a Canada-wide radio, television and print media tour to promote the book. Industry appearances include the recent Home Hardware fall market and the upcoming markets by TruServ Canada and Federated Co-op. (Dealers reportedly lined up for two hours to meet Smith and place orders for the book in the 3M booth at the Home Hardware market.)SURREY, B.C. — Shel Busey, in association with the Building Supply Industry Association of British Columbia (BSIA) will hold a “Training Boot Camp” for retail sales staff, Oct. 21-23, at Zajac Camp at Stave Lake, B.C. The course will cover four key topics: customer service, workplace safety, plumbing, and heating. Cost is only $350 per person for all three days, and includes meals and accommodations. For more info, contact BSIA at: 604-513-2206.
ST. JACOBS, Ont. — Home Hardware Stores Ltd. presented appreciation plaques to the vendors who participated in the first issue of HomeWorks software at its latest dealer market. The home décor and renovation planning software has now reached 100,000 registered users. In addition, Home announced that computer manufacturer MDG will install the HomeWorks software program on all its new computers.
TORONTO — Crate and Barrel, the upscale homewares and giftwares retailers, opened its first international location last Thursday at Yorkdale Shopping Centre in Toronto. The two-level, 35,000 sq.ft. store features a range of home furnishings and accessories, most of them exclusive to Crate and Barrel. The store is merchandised around vignettes on two floors, connected by elevator and escalator.ST. JACOBS, ON — This Fall, Home Hardware Stores Ltd. is giving away $50,000 in a Dream Kitchen Makeover Contest. The contest runs across Sept. 27-Dec. 8, 2008. Customers can enter by mail, in-store or online at 
Walter Hachborn was honoured for 70 years of service to retail home improvement retailing at Home Hardware’s Dealer Market last week, where he was awarded a platinum hammer. In addition, Home Hardware founded a scholarship in Hachborn’s name at Wilfred Laurier Waterloo University. Hachborn — who began working for Hollinger Hardware in St. Jacobs, ON in 1938 — co-founded Home Hardware In 1964 as a way for independents to stay competitive in the face of mounting competition from mass merchants. His awards through the years include the Order of Canada, the Queen’s Jubilee, and Outstanding Retailer of the Century.Paul Berto has been appointed senior manager of corporate communications and external affairs for Home Depot Canada. He replaces Pat Chapman, who departed earlier in the summer. Berto was formerly marketing manager for Home Depot’s Eco Options program, and before that he was at Hallmark Canada. Home Depot Canada has also recently appointed Environics as its new media relations agency.
Canadian Tire’s newest concept is a small-market store. The first ones, which opened in July in the Northern Ontario towns of Hearst and Deep River, are 18,000-sq.ft. outlets designed to serve smaller communities. The company has identified about 100 such communities that it says are “under-served” by Canadian Tire. Two more test stores will be opened before year’s end, in Cochrane, ON and Athabasca, AB.
the grand opening of its new kitchen-and-bath showroom recently. The 11,000-sq.ft. facility is in a new building adjacent to the hardware store, and replaces an older building on the same site. The showroom, complete with 13-foot ceilings and elevator, features full assortments of fixtures and fittings, including high-end sanitary ware and “a lot of showers , tubs, and whirlpools,” says Preston Hardware’s president, Mario Giannetti.
SYDNEY, Australia — Woolworths, the department store chain, is reportedly in talks with Mitre 10, the number-two home improvement retailer in Australia. According to the Business Spectator, Mitre 10 needs capital to compete against its big-box rival Bunnings. However, Mitre 10 is structured much like Home Hardware in Canada — a co-operatively owned public company whose shareholders are the dealers. Bunnings is owned by Wesfarmers, which recently purchased Coles, a mass merchant that competes against Woolworths.
Eric Hodson of EMS Merchandising Services will be coordinating IRLY’s store merchandising. He will be creating store plans and designs for the IRLY Building Centres of BC. Hodson has many years of merchandising experience drawn from managing IRLY Building Centres in Clinton, Prince Rupert, Salmon Arm and Sorrento. (604-596-1551)Jon W. Bazar has been appointed Canadian sales manager for SPG International. He was formerly at Innovak. (514-220-6682)
COLOGNE, Germany — spoga+gafa, the International Trade Fair for Sport, Camping and Garden Lifestyle and International Garden Trade Fair, hosted the worldwide garden and leisure market as 2,155 suppliers from 57 countries presented their new products and services to an estimated 41,500 trade visitors – including a growing number from Eastern Europe — in almost three million sq.ft. of exhibition space. The appeal of the show continues to grow, as more than one-third (38%) of attendees were first-timers.Going green was a big trend that is expected to keep the sector growing, even though that market is benefiting from one of the most disastrous effects of environmental degradation, global warming. As summers get longer, people are simply staying outdoors longer.
association became a client of his marketing and graphic design company, Applegate Designs. After 12 years, he was brought in-house to spearhead marketing efforts for the association and its magazine as director of marketing in August 1996. Less than a year later, he was given the added title of director of catalogue operations. He was promoted to vice-president – catalogues and creative services in December 2003. In his new role as managing director, his goal is to continue serving the education and training needs of retailers to help them become better, more profitable retailers. Lee succeeds John Hammond, who retired after 38 years of service to the industry.(317-290-0338)Peter Land is the new regional sales representative for Buchner Manufacturing, a Pefferlaw, ON-based building products supplier. He was formerly with Kaycan Industries. (800-461-6455)
CHICAGO – The first time Orgill entered Canada was in 1998, when Ron Beal, then vp merchandising for giant hardlines wholesaler, spoke at the Hardlines Conference. A decade later, Beal came back to speak at the same conference, and let slip Orgill’s interest in the Canadian market. In fact, it was already supplying a few dealers in border towns, on a test basis.At the latest Orgill dealer show, held at Chicago’s McCormick Place recently, Beal talked frankly about his company’s plans to enter Canada in a concerted way. The no-frills distributor does not manage or license any store banners, but specializes in supporting independents that wish to rely on their own brand within their respective communities. The company does offer a range of services — everything from merchandising and rental programs to a full-line pro dealer program — but all these offerings are “menu-driven”, says Beal, i.e., a dealer only pays for them if they want them.
The show, at McCormick Place South, featured about 1,700 booths in more than 500,000 square feet of exhibition space. Ron Beal, president of Orgill, says dealer confidence varies from region to region – and according to store type. But a general attitude of optimism prevails. However, the devastated housing market in the U.S. is still taking its toll on dealers who rely heavily on that sector. “For the pro side, in general, things are still tough.”
in force. Castle Building Centres had a team, led by James Jones, vice-president national marketing, that included Carmen Ruffolo, Castle’s hardlines program manager, and Les Gillespie, business development manager for British Columbia.
member dealers. This latest deal, which has been in the works at least since the beginning of the year, is an important addition to BMR’s volumes through its distribution – and a valuable retail asset. “For the [Saguenay] region, it is something that is essential. The Potvin & Bouchard banner has great renown,” says Jean Falardeau, spokesperson for BMR.
