New faces at BMR reflect new mandate

LONGEUEIL, Que.—The fallout of last year’s drastic consolidation among LBM buying groups included the continuation of Groupe BMR as a stand-alone entity. Now, on the eve of its 40th anniversary, the privately owned buying group and wholesale distributor has a new mandate — and new people on board to help satisfy that mandate.

Gabriel Pollender has joined the group as vice-president marketing. Until recently, he was general manager of Perfecta Plywood Ltd, and before that, Executive Vice-president of the Quebec building materials dealers’ association, ADMACQ, where he also served as editor of the association’s magazine, Quart de Rond magazine.

The group, once a hardware distributor for AWARD and TIM-BR MART Ontario, has severed ties with them as they’ve been rolled into Calgary based TIM-BR MARTS Ltd. That group had historically enjoyed an alliance with BMR within the umbrella buying group Matreco, but TIM-BR MARTS withdrew from that group earlier this year, leaving BMR as Matreco’s sole member.

Without affiliations in other regions, BMR now wants to expand its own reach beyond francophone Canada. It has more than a dozen members in the Maritimes, and has added a couple of dealer members in Northern Ontario. Pollender will be instrumental in developing and rolling out a new image program to help the group expand its dealer base and increase its wholesale volume.

Other management changes include the promotion of Jean St-Maurice to the position of vice-president finance. He was formerly CFO. Jean Falardeau has been named vice-president operations. A 10-year veteran of the company, he served most recently as executive assistant to BMR’s president, Yves Gagnon.

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More Canadian Tire buyers join TSC

LONDON, Ont.—A new round of changes has been announced at TSC Stores, the farm and hardware chain with 27 stores throughout Southern Ontario. The new executive team continues to be populated by former Canadian Tire alumni. TSC president and CEO David Roussy, who joined from Canadian Tire earlier this summer, has now lured Darryl Jenkins over from Canadian Tire as director of merchandising. Jenkins was director, store design and concept development for Canadian Tire. He replaces Jim Amsden, who gets promoted to director, store planning.

Scott Bennett has also left Canadian Tire, where he was category manager for camping, to join TSC as senior category manager, seasonal categories. Within the next nine to 12 months, Bennett is expected to take over Jenkins’ job as director of merchandising, at which time Jenkins will move into the role of vice-president, new business development.

The shakeup will result in the departure of two industry veterans: Bill Wilson, who is retiring as TSC’s vice-president merchandising, and George Aitcheson, will also retire this week from his position as TSC’s senior buyer.

TSC attracted attention earlier in the summer when Hardlines broke the news of the removal of Roy Carter, president of TSC, by Birch Hill Partners, a private equity firm that injected cash into the growing chain in return for 75% ownership. Birch Hill ended up ousting Carter (although he remains on the TSC board) and replacing him with Roussy, formerly a vp at Canadian Tire Retail.

At that time, Roussy brought Greg Hicks with him from Canadian Tire to serve as his vice-president operations. An internal memo to TSC staff, issued last week and signed by Roussy and Hicks, states: “We feel that these changes will accelerate our growth potential and ensure an integrated approach to the management of this growth.”

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Lowe’s claims it’s gaining on rival

MOORESVILLE, N.C.—Lowe’s Cos., the industry’s second-largest home improvement retailer, says it has ’Äúcontinued to capture market share’Äù in several categories, including flooring, appliances, outdoor power equipment, cabinets and countertops. Based on its second-quarter results, when earnings increased by 11.4% to $935 million, and sales climbed 12.2% to $13.389 billion, Lowe’s continues to outperform its larger rival, Home Depot.

Comparisons between the two giants are becoming tougher as Home Depot diversifies its business into professional and commercial sectors. However, Lowe’s enjoyed same-store sales of 3.3% for the quarter, compared to Home Depot’s negative comp of 0.2%.

Lowe’s projects that its sales through the remainder of this year would increase 11%, and that its same-store sales would inch up between 2% and 3%. In this six-month period, Lowe’s earnings jumped 24.6% to $1.776 billion.

* for retail operations
NB: Home Depot’s quarter ended 7/30/06; Lowe’s ended 8/4/06

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Home Depot trims head-office staff

ATLANTA—In an unprecedented move, Home Depot said that it would reduce staff here by 5.6%.

The company is cutting 300 of the 5,400 jobs at its head office. It did not say which positions would be affected, although Bob Nardelli, its chairman and CEO, said in a statement that Depot “needed to reallocate our resources, reduce and in certain cases, eliminate some initiatives” that are currently handled at its headquarters location.

Several news reports said that the cutbacks are related to Home Depot’s decision to spend $350 million in the second half of this year on upgrading and improvement its stores’ appearance and merchandise assortments. The Atlanta Journal-Constitution reported that $85 million of that expenditure is earmarked for added store-level payroll.

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Sears Holdings extends offer to Canadian unit

HOFFMAN ESTATES, Ill.—Sears Holdings Corp, through its wholly-owned subsidiary SHLD Acquisition Corp., has extended its offer for all the common shares of Sears Canada Inc. that are not already owned by Sears Holdings. That deadline is now 5 p.m. on Sept. 29, 2006.

A formal notice of the extension of the offer was mailed to Sears Canada shareholders on Aug. 30. On Sept.18, the Ontario Divisional Court will hear argument on the appeal by Sears Holdings and SHLD Acquisition Corp. As a result of the order, SHLD is prohibited from taking up and paying for common shares deposited under the offer unless the conditions specified in the order are complied with or the order is set aside. The offer has been extended, and may be further extended, to preserve Sears Holdings’ rights under the offer pending the outcome of the appellate process.

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Majority vote will now elect Home Depot directors

ATLANTA—Home Depot will alter the way it elects members of its board of directors. In an effort to quell mounting investor discontent, the industry’s largest home improvement dealer said last week that directors will now require a majority vote from shareholders. This new policy, which will go into effect in May 2007, was supported by 56% of the vote represented at Home Depot’s last annual shareholders’ meeting in May.

At that meeting, Home Depot’s chairman and CEO, Bob Nardelli, set off a firestorm of criticism for refusing either to take questions from investors in the audience or to allow directors on stage to answer any questions. In addition, the company has confirmed that the U.S. Securities and Exchange Commission has been investigating whether Home Depot’s method of issuing stock options for the years 1996 to 2000 to its executives was inappropriate.

The New York Times reported that Home Depot officials met with representatives from the AFL-CIO, an institutional investor, which called on the company to recoup any stock options that were found to be improperly granted. The labor union is also calling on the giant retailer to force the resignation of its co-founder, Ken Langone, who has been embroiled in controversy over his role in approving what some critics consider to be exorbitant compensation to Nardelli and other company executives.

These controversies have had their toll on Home Depot’s stock, which has taken several hits in recent weeks.

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Home Depot launches co-branded credit cards

ATLANTA—Home Depot has introduced its first co-branded consumer and business rewards credit cards, in partnership with Citi Cards. The two cards, The Home Depot Rewards MasterCard and The Home Depot Business Rewards MasterCard, offer special incentives and rewards including 2,500 bonus points with their first purchase and two points on every dollar spent at either Home Depot or EXPO Design Center.

Users can also receive one point for every dollar spent on purchases elsewhere besides Home Depot. That includes millions of locations worldwide where MasterCard is accepted. Customers can choose from a range of reward options, including everything from gift cards to travel and merchandise.

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RONA reports record earnings in 2Q

BOUCHERVILLE, Que. — In the second quarter ended June 25, RONA inc. recorded net earnings of $80.0 million, an increase of 13.7% over the comparable period last year, due to the expansion of its dealer network. That growth came largely from the integration of recent acquisitions, notably St. John’s-based Chester Dawe, acquired in March 2006, and the Quebec chain Matériaux Coupal Inc., of which RONA acquired a 51% stake in April 2006.

Consolidated sales (sales through distribution, in combination with retail sales from corporately owned stores and the company’s share and royalties from franchised store sales) in the second quarter climbed to $1.35 billion, a 12.1% increase over last year. Half that growth came from acquisitions; organic growth was 6.0%.

Same-store sales increased by 1.1%. After factoring in the affects of deflated lumber prices during the quarter, RONA says its same-store sales would have been up by 2.2%.

For the first half of the year, RONA’s net earnings reached $96.4 million, up 14% over the same period last year. Consolidated sales for the period advanced 12.4% over last year to $2.145 billion

During the last quarter, RONA opened three new big-box stores and brought its total number of new dealer recruits to 20 since the beginning of the year. These dealers have added $122 million to RONA’s top line retail sales.

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On 2Q results, Home Depot’s board to investigate options practices

ATLANTA — Home Depot used the reporting of its second-quarter financial results to announce that it has asked its board of directors to look into the procedures governing how the company has issued stock options to key executives.

Those procedures are now under scrutiny by the U.S. Securities and Exchange Commission, and have already involved Home Depot in lawsuits. However, the company does not believe that the results of litigation or inquiries will materially impact its operations or balance sheet.

The impact of its options practices, though, has not been positive. Its stock price has been sliding steadily over the past few months, and analysts continue to question its business model and strategy in light of its recent financial performance.

For the three months ended July 30, the company’s net income rose by 5.3%, to $1.86 billion, on revenue of $26.03 billion that was up 16.7% over the same period a year ago. Those results included a $69 million charge against earnings for retroactive taxes and interest Home Depot had to pay the government of Quebec, whose legislature recently rewrote certain tax laws.

On the other hand, sales from its retail operations rose 5.1% in the quarter, while same-store sales actually fell 0.2%, compared to the same quarter last year, when they rose 4.0%. On the plus side, the company’s Home Depot Supply business increased by 325% to $3.5 billion in the quarter, during which Home Depot acquired the distributor Western Fastener, the designer and installer Rice Planter Carpets, and millwork supplier Forest Products Supply.

Another bright light was Home Depot’s services business-essentially its installed sales program-which grew by 9.7% to $1.03 billion in the quarter.

During the quarter, the company opened 30 stores, bringing its total to 2,079. Other highlights included: a 1.3 percentage point boost in its share of the retail appliance market, to 10.1%; and a 0.6 percentage point gain, to 24.4%, in share of the outdoor power equipment market; and the launch of a $30 million program, called “Orange Juiced,” to motivate its employees to provide better in-store customer service.

Through the first six months of its fiscal year, Home Depot generated $47.49 billion in revenue, up 15% over the same period a year ago, even though its retail transactions increased by only 0.3%. First-half earnings rose 11% to $3.35 billion.

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TIM-BR MARTS adds packaged house maker to ranks

Calgary — TIM-BR MARTS Ltd. has announced the signing of MMH Prestige Homes, a factory based home builder based in Sussex, N.B., as its latest member. The giant buying group also announced the closing of its recruitment of Parliament Building Supplies (for details see our July 3/06 issue-MM).

Prestige Homes joins the growing ranks of home fabricators, alongside existing TIM-BR Mart members like Nelson in Alberta. Owned by Sussex, N.B.-based Shaw Group-and named one of the 50 Best Managed Companies in Canada-Prestige is one of Canada’s factory-based home builder pioneers. It serves a network of builders throughout the Maritimes and Northeastern U.S. It also does a brisk business exporting homes all over the world, including to Germany, China, and Japan.

Parliament, meanwhile, is slated to become the TIM-BR MART flagship urban store and will expand this fall from 1800 square feet of retail space to 10,000 square feet. “We have a very unique opportunity at this store and chose TIM-BR MART because of their vision of how to meet the needs of both contractors and urban homeowners in one retail space,” said Vip Jain, General Manager of Parliament Building Supplies.

Focused on contractors, the Jain family, who purchased the store three years ago, is a significant condo developer in the downtown Toronto area. The Ontario government recently announced a $10 billion redevelopment fund for the Port of Toronto area, putting Parliament Building Supplies in the epicenter of a massive boom of dense housing over the coming years.

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Report reveals slight slowdown in industry growth

WORLD HEADQUARTERS, TORONTO — Canadians’s passion for repairing, renovating and improving their homes continued unabated last year, according to a new study by Hardlines. And the performance by its leading retailers so far this year provides positive indications of another strong year ahead.

Sales by all hardware and building supply dealers, plus related sales by leading mass merchants and Canadian Tire, totalled $36.8 billion last year, a healthy increase of 5.5% over the previous year. This finding is just part of “Home Improvement Retailing in Canada”, the latest report from the World Headquarters of the weekly newsletter Hardlines.

“While this year’s real growth seems modest by comparison, deflation of lumber and plywood prices last year downgraded overall sales,” said Michael McLarney, Editor and Publisher of Hardlines. “Adjusting for lumber deflation, the industry’s volume of growth in 2005 was actually up by about 7.5%”.

(For more information about this year’s incredible Retail Report, Click here. -Michael)

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WTO again rejects U.S. lumber tariffs

GENEVA — The United States could be subjected to nearly $4 billion in sanctions after the highest court of the World Trade Organization here rejected America’s tariffs on Canadian lumber imports.

Last November, a WTO panel had rejected Canada’s complaint about those tariffs. Those tariffs are being imposed because the U.S. claims the Canadian government subsidizes its lumber industry to the competitive detriment of U.S.-based lumber companies. The recent ruling, though, asserts that the U.S. omitted certain price data when it charged that Canadian imports were a competitive threat.

Next Monday is the deadline for Canadian lumber suppliers to accept or reject a trade agreement the two countries struck on July 1, which, if accepted, would put an end to this four-year-long dispute.

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Canadian housing will stay strong as U.S. begins faltering

OTTAWA — Housing starts will register another strong year in 2006, according to Canada Mortgage and Housing Corp’s latest report. Starts will reach 227,900 units in 2006, before decreasing to 209,100 units next year, marking the sixth consecutive year in which housing starts exceed 200,000 units…

“Housing starts this year will be stronger than previously forecast, mainly due to persistent strong demand in Alberta where starts will increase by 20 per cent in 2006,” said Bob Dugan, Chief Economist at CMHC. “Higher mortgage carrying costs, due to modest increases in mortgage rates and rising house prices, will temper housing demand in Canada in the latter part of this year and next.”

Existing home sales, as measured by the Multiple Listing Service (MLS ®), are forecast to register their second best year on record with 481,700 units in 2006.

However, in the U.S., buyer demand for homes is softening more than many industry officials and observers had anticipated. Inventory of homes that are either unsold or under construction for the months of January through June rose by quadruple digits in some markets, compared to the same period a year ago, according to research by Hanley Wood Market Intelligence, the research arm of Hanley Wood LLC, which publishes Builder magazine. For example, in the Los Angeles-Ventura metropolitan area, 2,222 homes were standing (i.e., unsold or under construction), compared to just 40 in the January-June 2005 period, a 5,455% increase.

Inventory levels, while not as dramatic in other markets around the country, grew precipitously: In Washington D.C., standing inventory was up 118.9% to 3,750 units; in Las Vegas, up 634.9% to 3,072 units; and In Tucson, Ariz., up 530.4% to 725 units.

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Top business reporter joins retail leaders at Hardlines Conference

WORLD HEADQUARTERS, TORONTO–Canada’s most important annual gathering for home improvement executives has finalized its lineup of speakers for its new location and a new date–October 16th and 17th at the Toronto Congress Centre. Our keynote speaker for lunch on Oct. 16 is Bridgitte Anderson, the host of Report on Business Television’s AM Business. This highly respected business journalist will provide her insights into the business of keeping track of Canada’s business community. What trends and issues will impact this industry? Join us for lunch and find out!

To close off the Conference, we’ve invited back Anthony Stokan of Anthony Russell and Associates, who will give us his take on the latest trends driving retail today. Guaranteed to be insightful and thought provoking!

Please note this important change to the lineup, as well: Roger Plamondon of Home Depot Canada is being replaced by Dan McAreavey – President, Home Depot Supply Canada. Find out how the country’s largest home improvement retailer wants to build its contractor and commercial business with this fast growing division.

The Hardlines Conference also offers interactive seminars on business and demographics trends, the latest news and data on important market segments, and sector-specific breakout sessions on retail issues. And plan now to attend the Industry Awards Gala, with Hardware Merchandising’s Outstanding Retailer Awards and HARDLINES’ Newsmaker of the Year Awards on the evening of Oct. 17th. It’s your chance to celebrate the industry success stories of the year.

For more information on the Hardlines Conference, click here.

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RONA puts the push on big box openings

Winnipeg–RONA opened new big boxes in Winnipeg and Langford, B.C., last week, and this coming Wednesday big-box number 69 opens in Barrie, Ont. The raft of openings marks a mid-year push by Canada’s number-two home improvement retailer to match its forecast of 5-10 new big box openings this year.

While these three may fall short of that mark, the company has exceeded its targets for acquisitions and dealer recruitment. Also last week, RONA completed the previously announced acquisition of Curtis Lumber, a leading independent, with six locations, in British Columbia’s lower mainland. That company adds almost $80 million to RONA’s $5.2 billion in retail sales, in addition to about $100 million in annual retail sales from 17 new dealers that were recruited in the first quarter.

RONA has also been busy with other new store openings, but these have been smaller formats, mainly building or home centres and a so-called proximity store, a “mini” big box concept that is tailored for smaller or urban markets. In Quebec, the company has also begun a major refurbishing and expansion of its Réno-Dépôt division.

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Can-Cell celebrates 30 years of specialized service

EDMONTON–In an industry that is seeing consolidation at all levels–including wholesale distribution–the ability of a regional player to flourish may appear somewhat anachronistic. Yet Can-Cell Industries Inc. has been serving dealers in Western Canada for three decades, a milestone that was celebrated recently at the company’s headquarters here.

Through its eight distribution centres, Can-Cell services more than 2,000 customers from North Western Ontario to Vancouver Island. The celebration played host to a number of these customers, as well as some of Can-Cell’s key vendors. The secret, says Harold Tiemstra, who, along with his wife Wally, owns Can-Cell, is defining a select range of products for customers. “We try to find our merchandise where we feel there’s a need in the marketplace,” he says. Not only does Can-Cell rely on some key vendors in North America, but the company has, in the last two years, been buying from factories in Asia, as well.

For a time, Can-Cell was adding more and more hardware items, but, says Tiemstra, in recent years, those lines have been cut back, enabling the company to focus on its core strength of specialty building products.

According to Wally Tiemstra, the formula for success is a simple one: “We service the hell out of our retailers, and we keep adding new lines.”

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CanWel expands its engineered wood offerings with Boise lines

VANCOUVER–CanWel Building Materials Ltd. has negotiated to become the sole national distributor for Boise Engineered Wood Products in Canada. Considered a significant growth opportunity in the Canadian marketplace, the new lines, which are manufactured by Boise Building Solutions Manufacturing Holdings Corp., a subsidiary of Boise Cascade L.L.C., will be added to CanWel’s national network of distribution centres for sale to its retail and buying group customers.

“The engineered wood product category has been an area that CanWel has been developing a strategy on for several years,” said Tom Donaldson, CEO of CanWel. “The key was to identify and develop a partnering relationship with a world class manufacturer such as Boise.”

CanWel Distribution is a wholly owned subsidiary of CanWel Building Materials Income Fund, one of Canada’s largest national LBM distributors, with 17 distribution centres across the country.

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Kingfisher’s results dampened by sales at home

LONDON–Europe’s biggest home improvement retailer, Kingfisher plc, had encouraging results in its second quarter everywhere except on its home turf, where the U.K. economy remains in the doldrums.

Overall sales for Kingfisher, whose banners include B&Q and Castorama, rose 8.7% in the quarter, pulled down by a 1.3% drop in the U.K. Same-store sales in the U.K. fell by 1.3%, as well. However, sales in France were up by 6.9%, with same-store sales up by 1.3%. Stores in the rest of Europe enjoyed a healthy increase of 26.6%, with same-store sales up 8.4%.

According to Gerry Murphy, Group CEO, “Kingfisher’s second quarter featured a strong international performance and early signs of progress at B&Q in the UK, despite a continuing weak consumer market for home improvement.” The company is investing £200 million (US$372 million) to upgrade 110 of its B&Q big box stores. The first new-look store opened last week, with more emphasis on complete home renovations and décor, rather than just a DIY product focus.

Kingfisher’s business in Asia continues to return the greatest sales increases, although profits are harder to squeeze out of this relatively new marketplace. Kingfisher’s business in the Far East, where it has stores in China and South Korea, rose by a whopping 76.2%, due to a rash of new-store openings plus the impact of the acquisition last year of a group of stores from rival OBI. Same-store sales were up 9.0%. “Kingfisher’s international development programme has continued on track this year, with 20 new stores opened so far and good like-for-like growth from stores open for more than one year, Murphy added.

Kingfisher is the third-largest home improvement retailer in the world (after Home Depot and Lowe’s in the U.S.), with more than 680 stores in 11 countries. Besides the B&Q, Castorama, Brico Dépôt, and Screwfix Direct banners, Kingfisher has a 21% interest in Hornbach, Germany’s leading big box DIY retailer. Hornbach has more than 120 stores throughout Europe.

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Quarterly profits rise for Sears Canada

TORONTO–While the sale of its Credit and Financial Services division at the end of last year affected its revenues, profits for Sears Canada Inc. in the second quarter were up.

Revenue for the second quarter reached $1.43 billion, down 6.2% from $1.52 billion a year earlier. Same store sales decreased 3.0%. However, 2Q profits were $18.1 million, from $10.9 million in the same quarter last year.

Year-to-date sales were $2.65 billion, down 6.8% from $2.84 billion for the same period last year; same-store sales decreased 2.8%. Profits for the first six months, including non-comparable items, narrowed from $24.8 million to $6.3 million. Gross margins for the first six months increased by 105 basis points over the same period last year. Total expenses were reduced by 13.4%, approximately 60% of which are related to the sale of the Credit and Financial Services operations.

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Canadian Tire restructures its senior buying ranks

TORONTO—Following a shakeup of its ranks in recent months, Canadian Tire Corp. is restructuring its merchandising teams in its Retail business unit.

The latest move at CTR is, in fact, an internal one. Laila Zichmanis, formerly vice-president, Home Products at Canadian Tire Retail, has been appointed president of Canadian Tire Petroleum. In her former role, she had reported to Dave Roussy, senior vice-president, marketing. When Roussy left early in June to head up the much smaller, closely held farm and hardware retailer TSC — taking with him division vice-president of store design and merchandising Greg Hicks — there was speculation that Zichmanis would follow him, as well. However, this latest promotion secures her firmly within the Canadian Tire ranks.

Zichmanis has been replaced on the CTR merchandising team by Ed Johnston, a longtime buyer who had been most recently in charge of offshore sourcing as divisional vice-president, Global Sourcing. He is now vice-president, Home Products, CTR.

One outsider has been added to the ranks: Duncan Reith, formerly chief merchandising officer at Sobey’s Inc., has been appointed senior vice-president, Merchandising, CTR.

The shakeup began when Mark Foote, at the time president of Canadian Tire Retail, defected to join grocery giant Loblaw Cos. as its vice-president of merchandising for general merchandise. Foote’Äôs shoes were quickly filled by Mike Arnett, who had been Canadian Tire’Äôs vp of new business development. Ten days later, Foote’Äôs former boss Wayne Sales, who was president of the entire $9.1 billion Canadian Tire operation, announced his decision to retire. The former president of Canadian Tire Financial Services, Tom Gauld, was quickly pulled out of retirement to replace him.

To top it all off, when the world’Äôs number-two home improvement retailer, Lowe’Äôs Cos., began recruiting merchants for its new Canadian team earlier this spring, Canadian Tire was especially hard hit, with a number of its buyers defecting to Lowe’Äôs Canada. 

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RONA puts finishing touches on newest big box

BARRIE, Ont.—RONA staffers attach a maple leaf to the new RONA Home & Garden in Barrie. The store, at 61 Mapleview Drive East, will officially open on August 2. RONA now has a network of more than 600 franchise, affiliate and corporate stores, including 66 big boxes.

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Home Hardware’Äôs launches “emo” paint system

BURFORD, Ont.—Home Hardware Stores Ltd. has redesigned its paint colour system, in an effort to simplify choices for consumers. Home’Äôs own brand, Beauti-Tone, which is manufactured at the dealer-owned co-op’Äôs own paint factory near the company’Äôs head offices in St. Jacobs, Ont., has introduced the new system under the name “Colours for Living”.

Colours for Living features 786 colours organized into six distinct colour palettes: Enriching, Energizing, Relaxing, Alluring, Comforting and Inviting. Designed to capture a particular mood, the approach is reminiscent of a paint line launched last year by Canadian Tire Corp. under the Debbie Travis brand. Like that line, customers are encouraged to determine what “mood” they wish to invoke in a particular room, then find which of the 131 specially selected colour choices best reflects that mood.
There’s even a cool little quiz online at Home Hardware’s paint website, www.beauti-tone.ca, that lets customers determine which of the four moods best suits their lifestyle.

“Paint is the most inexpensive way to make a dramatic impact in a room,” said Bev Bell, Beauti-Tone’Äôs Creative Director. “Yet, the challenge of selecting the right colour often intimidates people. Colours for Living simplifies things. You choose the mood and Beauti-Tone provides colour choices that create and complement that mood.”

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Home Depot to test furniture boutiques

ATLANTA—Home Depot plans to experiment with furniture boutiques inside at least two or three of the stores it will open this year.

The Chicago Tribune reports that this test is part of a larger effort by the retail giant to plant its flag deeper into the home furnishings segment of the business. This summer, Home Depot mailed a catalogue to customers that the Tribune reports could have been mistaken for something coming from a specialty retailer like Pottery Barn. The catalogue, distributed by the dealer’Äôs Home Depot Direct division, features furniture (including a $1,000 chaise lounge and $500 ottoman), tableware, lighting, window treatments, and other home furnishings that put Home Depot into more direct competition with such dealers as Ikea, Target, Crate and Barrel, and Restoration Hardware.

Home Depot Direct’Äôs other catalogues include 10 Crescent Lane, which features high-end indoor and outdoor fixtures; and Paces Trading Co., which showcases lighting. Last April, Depot acquired Home Dˆ©cor Collections, a home dˆ©cor catalogue business that also sells through a retail network. It will open its seventh store in Lake Zurich, Ill., next month.

Ironically, Home Depot tried to sell furniture in its stores once before in the late 1980s. But the category was soon dropped entirely, partly because it was taking up too much space, but also because the company’Äôs corporate managers didn’Äôt think furniture was a category that Home Depot could dominate in its warehouse-home center format.

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Home Depot steps up web presence with vendor ads

NEW YORK—Online sales will be a cornerstone of Home Depot’Äôs expansion plans for the next five years. Now, to maximize the high traffic online, the world’Äôs biggest home improvement retailer is seeking added revenue from its key vendors to advertise on online.

The giant home improvement retailer is negotiating with vendors to place ads on its main website, www.homedepot.com, to reach more than four million consumers each week. “Our goal is to allow a few key vendor partners the opportunity to educate millions of home improvement consumers about their distinctive and innovative products,” said Harvey Seegers, president of Home Depot Direct in a prepared release. Vendors already signed on to advertise online including Moen Inc.

Homedepot.com is a part of Home Depot Direct, the company’Äôs direct-to-consumer division that is a critical element of the company’s plans to extend its business into new channels, especially in light of the fact that the rate of new store openings will be cut in half over the next five years. Home Depot has a goal of generating $1 billion in online sales by 2010 and is using the online sales tool to expand a number of categories, such as appliances and consumer electronics. For example, Home Depot has 25-30 SKUs of cooling and heating products in-store, but 100 are available online.

Though no ads appear on the website yet, a page is already up on the Home Depot site at www.homedepot.com/advertise that invites vendors to participate in the program. Some of the benefits of advertising listed on that web page include high traffic levels—more than two billion page visits annually and in excess of 15 million monthly customer visits. Home Depot also has a weekly e-mail newsletter with close to six million opt-in subscribers. Information on the site promises vendors to “supercharge your brand”.

When consumers click on the ads on homedepot.com, they will enter an advertiser’s branded site. There, they can view interactive demos, streaming video, and in–depth product content.

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Strober adds New York-based pro dealer

MIDDLETOWN, N.Y.—Pro-Build Holdings, through its Strober Building Supply division, has acquired pro dealer Rowley Building Products and Rowley’Äôs construction financing business Builder’Äôs Capital. The terms of this deal were not disclosed. Rowley — with 12 yards that specialize in millwork and kitchens, a millwork distribution center and a liquidation center — services builders and remodelers in the Hudson Valley and Westchester, N.Y., markets. The dealer generated $104 million in revenue in 2005. Rowley will change the name of its locations to Strober Building Supply. This acquisition enhances Strober’Äôs ability to service customers in New York and New Jersey, said Richard Young, president of the 46-unit Strober Building Supply, which is based in Brooklyn, N.Y., and sells to customers in seven northeastern states. It’Äôs part of Pro-Build, which was formed early this year by the combination of the Strober Organization and Lanoga Corp. Last year, Pro-Build’Äôs combined businesses generated $4.6 billion from 420 locations nationwide.

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RONA breaks ground on latest big box

SCARBOROUGH, Ont.—Groundbreaking ceremonies were held here last week to mark the start of construction of a RONA Home & Garden big-box store in Toronto’s east end. The big box is one of three scheduled for completion by next spring. Another is in Charlemagne, Que., while the third is a new-format Réno-Dépôt store in Rimouski, Que.

But before these open, RONA will open three more this summer, one in Barrie, Ont., an hour north of Toronto, plus Winnipeg South and Langford, B.C. RONA intends to open up to 20 new stores next year, of which an undetermined amount will be big boxes.

The Scarborough store, which will be RONA’s 73rd big box, will have 125,000 square feet of selling space, including a 27,000 square-foot exterior garden centre, and will carry more than 40,000 SKUs. The store will feature RONA’s fledgling “urban” concept, inaugurated in Richmond, B.C. last fall. The concept aims for a more consumer friendly, fashion oriented approach, while accommodating the demands of limited, expensive real estate in the inner city. Using what it calls a “zone concept”, the store features separate, fully decorated environments in departments such as paint, lighting, kitchen and bath, flooring and moulding, and windows and door.

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Home Depot ramps up urban concept

TORONTO—Home Depot Canada is developing properties—one new and one it’s had for almost a decade—that will become the sites of “urban” neighbourhood stores.

The newest is a property is in Pointe-Claire, on Montreal’s West Island. This will be modelled after Home Depot’s prototypes in New York, Chicago and North Vancouver, which are built on two floors to maximize available real estate. However, says Nick Cowling, spokesperson for Home Depot Canada, the Montreal-area store will be bigger than North Vancouver’s, with a full LBM department. The store, which just got necessary approvals from the city, will open sometime in 2007.

Meanwhile, Home Depot’s port lands property near Toronto’s waterfront is being resuscitated after laying fallow since it was purchased nearly 10 years ago.  “We’ve filed a new plan with the city for the harbourfront lands,” says Cowling. “It was turned down. We’ve taken it to the OMB [Ontario Municipal Board].”

The OMB is notorious for allowing plans that exceed density or height restrictions imposed by the city. And this plan, Cowling admits, does that, a necessity based on the high cost of the land itself. Home Depot owns 14 acres, which are part of a larger development plan for Toronto’s port lands. Home Depot’s plan was submitted in association with a condo developer that owns an adjoining nine acres of land.

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Home Depot adds manufacturing company

SARASOTA, Fla.—Home Depot continues its vertical integration through acquisitions. The Atlanta-based retail giant has purchased Forest Products Supply, a 32-year-old wood manufacturing company based here, with 370 employees. Home Depot bought this company through its Williams Brothers pro dealer subsidiary, and will run it under its Home Depot Supply division, which in recent years has been growing aggressively.

The additions of Florida-based distributor Hughes Supply and pro dealer Cox Lumber has positioned Home Depot Supply to reach $12 billion in revenue this year. By 2010, Home Depot Supply expects to be generating sales between $23 billion and $28 billion out of 1,500 locations, which would account for almost 20% of Home Depot’s total sales.

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Builder group predicts ‘soft landing’ for U.S. industry

WASHINGTON—The chief economist for the National Association of Home Builders said last week that the economy and the housing industry are going through “major transitions”, but that recent declines in buyer demand and price erosion were not signs of a housing bubble finally bursting.

“We’re going from unsustainable heat…to sustainable growth,” said David Seiders in a teleconference at which he spoke with David Berson, chief economist for Fannie Mae; and Frank Nothaft, chief economist for Freddie Mac.

While the three gurus differed in their projections about declines in home starts and sales this year and next, they were in agreement that the U.S. economy would continue to grow at a pace that could support roughly the same amount of annual new-home construction that builders have been producing over the past several years.

In an interview with Hardlines, Seiders projected that starts should hit 1.9 million units this year and 1.8 million in 2007 (compared to 2.068 million in 2005). “Our longer-range forecast is that the market will be able to absorb between 1.9 million and 2 million starts per year for the next decade,” he said. “We’re headed for a soft landing.”

Berson pointed out, however, that the double-digit price increases that builders across the U.S. had been enjoying in recent years have all but come to an end, as builders have tried to induce sales through generous discounts and incentive programs. But while he and the other economists expect the rate of price appreciation to slow considerably through 2007, they don’t expect prices themselves to start falling precipitously.

The big concern among the economists is whether the Federal Reserve’s policies of increasing interest rates will continue, and what impact that is likely to have on mortgage rates. Nothaft pointed out the Fed has raised the Federal Funds rate 17 times since June 2004, to 5.25% from 1%, which has resulted in the fixed rate for a 30-year mortgage rising to 6.5% (from the mid 3% rage only a few years ago). The economists said that this increase is already serving as an impediment that’s keeping some potential homebuyers out of the market.

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British association confirms support for London Show

LONDON—The British Hardware Federation Group has, for the first time, agreed to take part in and fully support the DIY & Garden Show/Totally Tools in 2007.

Brintex, organizer of the event, is confident that the show will have something to offer all the BHF Group members whether they are hardware stores, independent builders merchants or DIY retailers. As a result of the partnership, Brintex will be working alongside the BHF to actively encourage them to visit in January.

According to estimates from the BHF, in a market worth £5 billion, independent retailers still control between 15 and 25% of sales, making them a vital target for DIY and hardware suppliers.

Paul Woolley, commercial director of the BHF Group, said, “We’re pleased to confirm our support for the forthcoming DIY & Garden/Totally Tools Show. This will be the first time we have attended, but we felt that, with 2,500 hardware members, it was important to be there, both for our current and potential members.”

The two shows, which take place Jan. 14-16, 2007 in Earls Court, London, have 67% of exhibition space booked, with sales running ahead of last year. For more information, click www.diyandgardenshow.com or www.totallytools.co.uk.

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Hardlines Conference speakers offer insight, experience

TORONTO—Speakers for sector-specific breakout sessions for the Hardlines Conference in October will feature some of North America’s most experienced industry watchers. Highly respected hardware and home improvement journalist John Caulfield (and contributing editor to HARDLINES) will present the latest trends and information about the red-hot pro sector and share the latest tips and strategies for growing contractor business.

Also on the roster is Richard Simms, president of Black Eagle Consulting. Simms has wide-ranging experience with the home improvement, resource, transportation, media and printing industries, and has garnered extensive insight into how companies position themselves for success.

Keynote speakers will include Doug Robinson, president of the newly formed Lowe’s Cos. Canada, who will give participants a look at how the company will fit into the Canadian retail landscape. Roger Plamondon, vice-president of Canada East for Home Depot, will also speak. Tom Donaldson, president and CEO of CanWel Distribution, the country’s biggest distributor of building materials, will discuss the effect of two-step distribution on the independent dealer.

For more information, click here.

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RONA builds on Réno-Dépôt brand in Quebec

BOUCHERVILLE, Que.—While other store formats acquired by RONA, such as Lansing and Cashway, incorporated the company’s name, Rˆ©no-Dˆ©pˆ¥t will remain a unique format in Quebec. That, says Sylvain Morissette, director of communications for RONA, is because Réno-Dépôt has remained a strong format in that province, especially for the contractor.

“It becomes another way for RONA to go to market and to leverage a very strong brand,” says Morissette.

But the format will be tweaked to create a smaller, more pro-oriented store that can move into smaller markets. “The level of awareness of Réno-Dépôt is very high in Quebec, especially in major areas like Montreal and Quebec City, There it’s well recognized, but we thought it would be important to provide this to more areas besides the large marketS,” says Morissette.

A similar strategy will be applied to the Totem brand in Alberta, which RONA acquired in 2004.

The layout of the Réno-Dépôt warehouse will be redrawn to make it even more appealing to heavy DIYers and pros, the customers who form the backbone of the home renovation market. But the company will also respond to the objections pros often have to big box shopping by enlarging LBM and garden areas, making signage easier to read, and creating separate entrances for pros that open early. The garden centres will be further enhanced to cater to pro landscapers.

The initiative will cost RONA $10 million. The first new-format store will open in Rimouski in the fall, and five more stores will open over the next three to five years. In the meantime, all 14 existing Réno-Dépôt stores will be upgraded over the next five years to appeal more strongly to pro customers.

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At 40, TORBSA defines its niche with commercial dealers

BOLTON, Ont.—With 28 members representing about $350 million in combined sales, TORBSA may be Canada’s smallest building materials buying group. But as it celebrates its 40th year, it fills an important role serving a select group of Ontario dealers.

The dealers, who represent 46 stores, are strictly commercial operations, specializing in everything from gypsum supply to brick and stone. But as some other groups move to consolidate their operations, TORBSA relies on its small size to distinguish itself. Says TORBSA’s general manager, Bob Holmes: “We have a uniqueness in the marketplace.”

Those stores, which operate in both urban and rural markets throughout Ontario, rely on new housing construction, as well as supplying commercial infrastructure building projects such as hospitals, power centres or schools. “They serve a different market,” says Holmes, “as the box store is more residential and renovation oriented.”

Because of their proximity and similarities, most, if not all members, can meet on a regular basis to learn from each other. “As a regional group, we have a lot more opportunities to share that knowledge—and that has value,” says Holmes. “That’s really how we’re different.”

Despite its strict focus on commercial dealers, and its regional focus on Ontario, TORBSA gets the benefit of programs and purchasing power on a national level through its membership in the umbrella organization, the Reliance Buying Group. “Reliance enables us to compete in the marketplace. It gives us national exposure while TORBSA operates regionally.”

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Weyerhaeuser commits to reduce greenhouse gases

FEDERAL WAY, Wash.—Weyerhaeuser Co., the giant lumber supplier, said it would cut its greenhouse gas emissions by two-fifths by the year 2020. The company has also pledged to reduce its use of fossil fuels by recycling biomass—such as bark and other wood fibres—from its paper and pulp operations as energy.

The news of this announcement was first reported on the website Renewable Energy Access, which notes that Weyerhaeuser’s plants already generate 72% of their energy from biomass. The company claims that its pulp mills have the capacity to become energy self-sufficient.

A 40% reduction in annual greenhouse gases is the equivalent of taking 700,000 vehicles off the road for one year.

“What Weyerhaeuser has done is exemplary,” Jonathan Lash, president of the World Resources Institute, is quoted in a statement prepared by the company. “Not only is the reduction of 40% one of the largest in the private sector, it is global in scope. As important, Weyerhaeuser is doing this in a way that makes a permanent difference — making changes in how their facilities operate.”

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Increased energy prices fuel garden growth

Increased fuel prices will encourage consumers to spend more time–and money–on their gardens this year, according to the Garden Writers Association’s 2006 Summer Gardening Trends Research Report. Almost half, (47%) of American households polled plan to decrease summer travel and spend more time on home and garden projects.

The report also showed that interest in organic pest control method is on the rise, up by 10% over 2005. Fewer than 30% plan to use chemicals to control weeds, while 54% say they’ll weed by hand.

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Changes make garden and leisure fair easier to attend, navigate

More than 2,500 garden and leisure suppliers from 60 countries will meet in Cologne from September 3-5 for spoga+gafa 2006, the International Trade Fair for Sport, Camping and Garden Lifestyle and the International Garden Trade Fair. To encourage strong attendance, the event organizers have launched a number of innovations, which include the purchase of tickets online at www.spogagafa.com, daily news and updates in both English and German, and a new structure for the product groups will trade halls more accessible and easier to navigate.

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TIM-BR MART will get first bannered store in TO-RON TO

CALGARY – TIM-BR Marts Ltd. is going to get its first bannered store in a major urban centre with the recent signing of Parliament Building Supplies in downtown Toronto.

The dealer, which got new owners within the past two years, is considering using the name TIM-BR MART Toronto as its store sign. “This will be a flagship for our urban expansion,” says Steve Stremecki, director of business development for the 340-member group, which is based in Calgary.

While TIM-BR MART has long had dealer members in cities like Vancouver and Toronto, including Patene and Watson’s in the latter centre, these are largely commercial dealers who do not go to market with any visible tie-in to their group. According to Stremecki, his dealers want to see the TIM-BR Mart banner in more urban locations. The group has been developing programs for an urban concept TIM-BR Mart store; those concepts will be ironed out at this prototype location.

The new owner of Parliament Building Supplies is Atria, a family owned business that specializes in real estate and property development. Vip Jains, whose background with the company includes condominium development projects in Toronto’s east end, is now heading up the building supply operations. According to Stremecki, Jains has plans for additional stores in the Greater Toronto Area over the next couple of years.

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Trailer Park Boys “rob’ Piercey’s store

HALIFAX – A recent episode of the cult comedy TV show “Trailer Park Boys” featured one of Atlantic Canada’s leading home improvement retailers. After breaking some windows at the trailer park, one of the “boys” (Randy) heads off to a local Piercey’s store on his bicycle to steal some more windows.

Piercey’s is an independent based in Dartmouth, N.S., which has five stores. Piercey’s Cole Harbour location was used for the show. But, says Peter Korecki, president and CEO of Piercey’s, Bridgewater, N.S. native John Dunsworth, who plays Mr. Lehey on the show, is a regular Piercey’s customer already. Korecki adds that the Piercey’s clip from the show was used in a recent loss prevention seminar put on for the staff.

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Canadian Tire announces new distribution centre in Quebec

TORONTO – Canadian Tire Corp. will break ground this fall on a 1.5 million-square-foot distribution centre in Coteau du Lac, Que., about 45 minutes west of Montreal. The new DC, which will be Canadian Tire’s largest to date, is being built to support the hardlines mass merchant’s expansion efforts in Ontario, Quebec, and Atlantic Canada.

Between now and 2009, that expansion will include 100 new or replacement stores. This will, says the company, significantly increase retail square footage and retail sales, especially in Quebec, which, with 93 stores, represents Canadian Tire’s largest retail presence after Ontario, which has 196.

According to Patrick Sinnott, senior vice-president, Supply Chain, “This distribution centre is essential to our growth. It will be the largest among Canadian Tire’s distribution centres…with state-of-the-art technology and material handling systems.”

Construction of the facility is expected to take about 27 months to complete with a planned opening in early 2009. When fully operational, the distribution centre will employ 600 full-time and 300 part-time employees and will process over 50 million cubic feet of product for approximately 300 Canadian Tire stores in Eastern Canada.

The capital investment to construct and equip the new Eastern Canada distribution centre is approximately $240 million over the life of the project. It will be operated by a third-party logistics operator.

Canadian Tire Corporation currently operates more than 1,100 stores, gas bars, and car washes, including 464 stores Canadian Tire associate stores, across Canada. Sales by those dealers in 2005 topped $6.86 billion.

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Ace in discussions with PRO alliance

WINNIPEG & OAK BROOK, Ill. – The Ace Hardware banner may yet find a secure place in the Canadian retail landscape, if discussions between Ace in the U.S. and CanWel in Canada unfold successfully.

CanWel inherited rights to the Ace name and programs in Canada (and the license for the PRO name here) when it purchased Sodisco-Howden Group at the end of 2004. But CanWel, desiring to keep the focus of its new business unit (now renamed CanWel, Hardware Division) squarely on distribution, sought – and found – a partner to take over management of those banners. With that partner, TruServ Canada, CanWel formed an alliance called PRO Retail Services that manages both groups’ combined banners. PRO Retail Services is currently in negotiations to keep the Ace name in its fold.

“Discussions are ongoing between CanWel, Hardware Division and Ace,” says TruServ Canada president and CEO Bill Morrison. “Both partners have a sincere desire to get it right.”

Nor does Morrison see any conflict with the alliance’s existing bullpen and says Ace’s banner and programs would complement CanWel and TruServ’s existing Pro and True Value banners. “I believe the independent needs more choice and the Ace Hardware brand would be great to offer in Canada.”

Murray Armstrong, president of Ace Hardware International, based out of Ace’s headquarters in Oak Brook, Ill., also believes there’s room for Ace in Canada. Talks are continuing, he adds, and expects a positive outcome before the end of the summer.

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Weyerhaeuser fights antitrust claims

FEDERAL WAY, Wash. – Weyerhaeuser will get a new day in court as it attempts to defend itself against antitrust charges.

The U.S. Supreme Court has agreed to review a $78.8 million award to Ross-Simmons Hardwood Lumber in Longview, Wash., which accused Weyerhaeuser of monopolizing the finished alder market in the Pacific Northwest by overbidding. Alder is used primarily to make furniture.

A Portland jury in 2003 said Ross-Simmons, which went out of business in 2001, was entitled to compensation of more than $26 million, an amount that was tripled under federal antitrust rules. A circuit court in San Francisco had upheld a ruling against Weyerhaeuser. But several businesses – including Microsoft, Verizon and Coca-Cola – and government officials urged the Supreme Court to intercede, claiming that the ruling, if it stands, would open companies that bid aggressively for raw materials and other products to litigation.

Even the Bush administration chimed in by telling justices last November that the 9th Circuit ruling “threatens to chill pro-competitive conduct by firms in a wide variety of markets.”

Bloomberg News reports that Weyerhaeuser has already paid $62 million to settle other alder-related antitrust claims and has put $95 million in reserve, according to regulatory filings. The lumber giant is also looking to reverse a $16 million award to rival Washington Alder of Mount Vernon and a class-action lawsuit filed on behalf of purchasers of finished alder. Both cases are on hold during the Supreme Court appeal, according to Bloomberg.

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RONA CEO explains strategy vs. Lowe’s

TORONTO–The investment community supports RONA’s strategy for growth, says RONA CEO Robert Dutton. That strategy includes building and buying new stores–but does not involve selling to Lowe’s.

Speculation (something Hardlines doesn’t deal in-your conscientious Editor) has run rampant that RONA may decide to offload its big box stores to Lowe’s to boost its share price, or at least sell the Ontario sites. Those stores, especially six former Building Box stores in Ontario acquired when RONA bought Réno-Dépôt, have only gradually increased their sales year-over-year. Nonetheless, Dutton is emphatic about not selling. “It’s not true that the success of this company relies on its sale to Lowe’s,” he stated firmly in a recent interview.

Asked to comment on the performance of his Ontario big box stores, he replied, “I am satisfied with the performance of our big boxes in Ontario.”

Dutton also stated emphatically that he is not in talks with Lowe’s, though HARDLINES did hear that Dutton got a call from an exec at Lowe’s Canada. According to Dutton’s recounting to his managers, the individual from Lowe’s announced they were RONA’s new neighbour. “But,” Dutton told his team, “neighbours don’t have to be friends.”

Dutton is confident that there’s room for a strong number-three player in North America and has already announced plans to pursue mid-sized dealers in the U.S. Northeast beginning in 2007. Smaller independents or chains with sales under $200 million will be the prime targets. That means, for example, he has not talked with John Menard, owner of Menards, the number-three home improvement chain in the U.S. –and, with estimated sales in excess of US$7 billion, the current number-three player in North America.

“When we go to the U.S., we want to be prudent,” he said. But overall, Dutton is very optimistic. “For the next 10 years, North America is going to be a good playground.”

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Allroc grows U.S. presence quietly

CALGARY–Considerable debate–and scepticism–typically surrounds any announcement by a Canadian company of its intention to enter the U.S. market. Somehow, the successes of a Couche-Tard as recently as this month cannot erase the memory of a Canadian Tire fully two decades ago (see lead story this issue–Editor). Yet, Allroc Building Products, the privately owned buying group affiliated with Winroc and owned by Superior Plus, has had a healthy, if modest, presence south of the border for years.

Although it serves just under 50 outlets, mainly commercial gypsum dealers, Allroc supplies eight Winroc stores of its own (both companies are owned by Superior) in the U.S., mainly in the American South and Midwest. Expansion there has been slow and steady; after years with just seven stores, the eighth was added only last year. But with the booming American housing market, further expansion is always a consideration. In fact, same-store sales in Allroc’s U.S. stores are higher than in its domestic locations, even though supplies of gypsum board are even tighter there than they are in Canada,” says Bob Hancock, vice-president of Allroc.

“Our U.S. operations continue to do very well,” he adds, “and we continue to have our eyes open to acquisition opportunities. But it’s difficult because the industry there is so robust that people are less likely to sell when they’re making money.”

Another option is to build satellite operations in existing markets. Phoenix and Salt Lake City are two examples of likely targets, says Hancock.

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Canadian Tire launches energy saving website

TORONTO–A new website, devoted exclusively to energy saving and energy efficient products for the home, has been launched by Canadian Tire Corp.

The site, www.canadiantirepower.ca, offers products in four categories–solar panels, wind generators, inverters, and batteries. Another section of the site offers guidelines for homeowners to develop their own energy generating systems in both off-grid and on-grid configurations.

According to the Toronto Star, Canadian Tire has a lot of stores in rural Canada, which are selling more and more renewable-energy products for homes that are not connected to local or regional energy grids.

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Lowe’s, Do-it Best donate to schools, homebuilding

MOORESVILLE, N.C. & FT. WAYNE, Ind.–Lowe’s Cos. and Do-it Best Corp. both flexed their philanthropic muscle recently with charitable contributions that are earmarked to assist schools and affordable housing.

Lowe’s Charitable and Educational Foundation has awarded $3.6 million in “Toolbox in Education” grants to 680 schools around the country. That donation includes $500,000 for school improvements in urban schools or school districts. These latest grants are on top of the $1.3 million in educational grants to 300 schools that Lowe’s made in February.

Toolbox for Education is a nationwide program created by Lowe’s in 2005 in partnership with PTO Today, a leading parent-teacher assistance organization.

At Do-it Best, the dealer-owned buying group, 116 vendors contributed more than $186,000 in products at the co-op’s recent dealer market, which will go to 11 affiliates of Habitat for Humanity International, the Georgia-based affordable housing builder. The donated products will be sold through Habitat’s “ReStores”, which specialize in reusable hardlines and building materials. Penske Truck Rental is also providing free truck rentals for all 11 affiliates, allowing them to transport the products at no cost.

Ten of the affiliates are located in Indiana, and for the first time, Habitat of Greater Cleveland is receiving contributions through this effort.

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RONA shake-up reflects focus on stores

BOUCHERVILLE, Que—A recent spate of layoffs and reassignments is just the latest move by RONA inc. to restructure its management teams, which have grown with each new acquisition. According to Sylvain Morissette, RONA’Äôs national director of corporate communications and public relations, the changes are part of an overall strategy by the company to get management teams closer to the stores—and store personnel.

A number of jobs were affected in RONA’Äôs branch offices in Surrey, B.C., and Toronto (Etobicoke). In Surrey, six people were terminated, while another 12 were given new roles, either in stores or on the road supporting the stores. In Toronto, another six jobs are gone, mainly in marketing and human resources. The HR duties for Ontario stores have been turned over to Anthony Kocsis, while HR for admin and head office will come out of Boucherville head office.

The merchandising team remains intact in Toronto, but the marketing side has been downsized by five people (plus two others in Boucherville), leaving Mark Hindman in place as vice-president of Olympic programs and local marketing. He has three directors reporting to him: Josˆ©e Massˆ© and Danielle Laferriere in Boucherville, and Russ Jones on the West Coast.

Despite the changes, Morissette says both Surrey and Toronto will remain in operation.

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Preview of new Canadian show attracts media, new exhibitors

TORONTO—Canada’Äôs newest hardware show hosted a product “preview” last week to generate media interest and give exhibitors at the upcoming National Hardware Show Canada a chance to showcase their wares. Held at the swank Carlu in downtown Toronto, it featured more than two dozen companies from both Canada and the U.S., and was attended by some of the country’Äôs major media outlets, including Canadian Living magazine, the Toronto Star, Globe and Mail, Ottawa Citizen, City TV, HGTV, and, of course, the stalwart team from Hardlines (hey, c’Äômon, there was free food—Michael).

The promotion is just one way the show’Äôs organizers, Reed Exhibitions, want to ensure that this new show makes an impact. According to Reed’Äôs Robert Cappiello, who revived interest in the National Hardware Show in the U.S. when he moved it from Chicago to Las Vegas and tied in other events with it, the same formula can spell success in Canada. NHS Canada will take place Oct. 17-18, 2006 at the Toronto Congress Centre.

So far, the numbers appear to back him up. The new show has already signed more than 100 exhibitors filling 20,000 square feet of space. By comparison, he noted, the former Canadian hardware show held two years ago was only 17,000 square feet in size when it gasped its last. In addition, more than 3,000 delegates have pre-registered for the show already. NHS Canada is being held in conjunction with Garden Expo/Florist Expo, an existing trade show put on by Landscape Ontario. Both shows combined, said Cappiello, will total about 90,000 square feet and feature some 500 exhibitors. For more information about the new show, click here.

NHS Canada is also co-locating with the Incredible Hardlines Conference, which is moving from its traditional September dates to Oct. 16-17, overlapping with the new show. Find out who’Äôs speaking at this year’Äôs Conference by clicking here.

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TruServ pursues multi-bannered approach

TORONTO—In an age where many retailers are trying to make one brand represent a number of offerings, how does a retail group with a range of different brands distinguish among them’Äì-and support them?

That’Äôs the challenge facing TruServ Canada.Based in Winnipeg, the dealer-owned co-op wholesaler supports True Value Hardware stores, V&S Variety, and Country Depot farm and hardware outlets. Now, within a new alliance with CanWel, Hardware Division, TruServ’Äôs retail support services provide programs and product to PRO stores, as well.

Tony DiEmanuele, vice-president, business developmentand growth for TruServ Canada, sat on a panel recently at the Retail Council of Canada’Äôs annual convention. There, he discussed the value of a range of brands, sharing the spotlight with Anna Martini, president of Groupe Dynamite Inc., which owns a number of fashion apparel chains.

DiEmanuele cited two key challenges to managing multiple banners: presenting a similar quality of retail experience in each store, regardless of location; and keeping the back end operations streamlined to maximize efficiencies, while serving those distinct retail regions and banners.

But it can’Äôt all be done at head office. The dealer-owners have to be willing to take ownership of the brand, he says. “We try and build a passion for the brand.”

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Wal-Mart goes big on home décor

BENTONVILLE, Ark.—This may be the most important news clipping to catch our attention so far this year. Wal-Mart is getting smart about home dˆ©cor sales. A new department, called “Total Home”, is being tested in 1,800 stores.

According to Home Textiles Today, the new department moves a number of the dˆ©cor categories into one display, relocating them to the front of the store for maximum impact. The goal, according to a Wal-Mart executive quoted in the article, is to create “a destination for the home”.

The new initiative ties in with Wal-Mart’Äôs efforts to go upscale to appeal to a more affluent customer than it typically attracted in the past.

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New study predicts continued growth in U.S. housing

CAMBRIDGE, Mass.—Over the next decade, household growth in the United States is projected to expand by 14.6 million, versus 12.6 million in the previous 10 years, according to the annual “State of the Housing Market 2006”, released last week by the Joint Center for Housing Studies at Harvard University.

In that study, the Joint Center notes that homeownership dipped a bit in 2005, to 68.9 million people from 69.0 million in 2004. Affordability played a key role, in not only who bought homes, but how they were financed. The number of households that are spending more than half of their incomes on their housing jumped by 1.9 million, to nearly 16 million. Interest-only mortgages, which were all but unheard of a few years ago, accounted for 20% of the total dollar value of mortgages and 37% of all adjustable-rate mortgages written last year.

The Joint Center says that the “greatest threat” to the housing market would be “a precipitous drop in housing prices,” which last year rose 4.4%, to $240,500 for single-family homes and 9.4%, to $219,000 for existing homes. While sales incentives to stimulate lethargic buyer demand have become rampant in the U.S. in recent months, The Joint Center still does not project that there would be a significant’Äîi.e., more than 5%’Äîdrop in overall home prices this year.

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RONA envisions expansion through new retail formats

TORONTO–RONA’s aggressive expansion plans already include acquisitions and new stores in a range of formats. But plans include the possibility of even more specialty retail formats–and more focus on stores that can deliver better customer service than big boxes, says Robert Dutton, president and CEO of RONA inc.

Dutton made a rare appearance in Toronto last week to speak at the annual convention of the Retail Council of Canada. In that presentation, he reiterated his company’s plans to grow by acquisition, but he also resisted the notion that one has to be a global player to succeed. “You can compete against size just by using your imagination. That’s what Sam Walton did at Wal-Mart.”

Besides imagination, though, Dutton says RONA relies on a clear business plan, strong partners up and down the supply chain, and a strong culture within the company that focuses on customer satisfaction. That culture relies on a variety of retail formats, not just the big box (RONA has almost 70 of them now). “The typical warehouse store is to retail what the Model T was to the automobile,” he said, “a revolutionary step in history, but just a step nonetheless.”

In a personal interview later, Dutton expanded on this theme.

Even as some large format retailers, such as Wal-Mart and Home Depot, are looking for ways to re-invent themselves – and their brand in new formats – RONA already has in its stable a range of retail footprints, from the corner convenience hardware store to the big box. But even that may not be enough, said Dutton. To cater to the X and Y generation of consumers, retailers will have to get ever more specialized in their offerings. He envisions more specialty stores from RONA (right now, the only specialty banner is Botanix for lawn and garden). Citing the HARDLINES “Report on Women in Home Improvement”, he pointed out that 94% of home improvement buying decisions involved the female of the family. With that in mind, RONA could develop a store exclusively for women.

Another might feature environmentally friendly and ecologically sound products. He coined the term, “RONA Green”. RONA is already serving the ICI (industrial-commercial-institutional) business through a number of its existing stores. “RONA Commercial” may become a stand-alone format sometime in the future. Dutton wants to see these banners debut over the next five years.

“The RONA model relies on adapting the store to the customer’s needs,” he said.

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RONA’s Dutton wants U.S. dealers by 2007

TORONTO–RONA wants to own 20% of the Canadian home improvement market by 2007. Then, says the company’s president and CEO, Robert Dutton, RONA is likely to look for acquisitions south of the border to continue its expansion efforts. But he has lots to do in Canada, first, he explains.

RONA has a goal of reaching $7 billion in sales by 2007. At that point, the company’s share of the retail home improvement market will reach 20%. Then, said Dutton in an interview with HARDLINES, RONA intends to look to the U.S. for continued growth. Having added almost $100 million in retail sales through acquisitions alone already this year, Dutton says his company is on track to achieve its goal next year. Meanwhile, 20 new stores will be built each year for the next two years, adding another $100 million in sales. “Then we can put our ears and eyes south of the border.”

RONA won’t go unprepared, though. Dutton is keenly aware of differences between Canadian and U.S. customers. He’s also aware of the differing retail landscape, one where Home Depot and Lowe’s have been battling it out for many years. But the lion’s share of the market still resides in the hands of small and medium-sized independents, giving RONA huge opportunities for acquisitive growth, especially in the U.S. Northeast and along the East coast.

“That’s my dream,” he said. “But we have lots to do in Canada.”

(Next week, Dutton talks about Lowe’s in Canada–Editor)

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IRLY unveils new concept store at AGM

SURREY, B.C.–When dealer members attended IRLY Distributors’ annual general meeting earlier this month, they got a preview of a new store concept developed by the privately owned wholesale buying group. The concept store was constructed right in IRLY’s warehouse to show the dealers new products and merchandising ideas.

The program includes interior and exterior signage, store layouts, yard layouts, merchandising, feature displays, truck identification, and staff uniforms.¬ÝAccording to Garry Anderson, executive vice-president of IRLY Distributors, the package was created to keep its members competitive. “We’re like everyone else. We’re trying to sell more programs, not just more products.”

The new look, says Anderson, was developed to provide a more unified look at retail for the members. For example, the façade or archway is one way to make each store instantly recognizable as an IRLY dealer.

He also expects the enhanced services from head office to provide more compelling reasons for new dealers to ally themselves with IRLY–and for existing members to increase their purchases. IRLY has another business unit, Western Hardware, which sells to non-members. They got the tour, as well. “They got the chance to see what store programs and planograms are available,” Anderson said.

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Former Allroc dealers find fit in Sexton Group

WINNIPEG–The relocation late last year of a number of former Allroc members to the Sexton Group has proved to be a good move. Viewed as an unconventional deal–Allroc and Sexton are both competing LBM buying groups–the gentlemen’s agreement to shift more than 30 traditional building centre dealers into Sexton has enabled Allroc to focus on its commercial dealers. Sexton, which is better suited to the needs of traditional dealers, has a wider range of retail and private-label programs.

Bob Hancock, vice-president of Allroc Building Products Ltd., says his group can now focus on expanding its commodity business, especially in insulation and drywall. And the huge volumes these products generate will enable the group to make up for the lost members. In fact, he pointed out, purchases by those dealers accounted for only $17 million. “We will more than make that up as a group,” he said.

Meanwhile, Sexton has had no trouble absorbing the new members. “It’s worked out very, very well,” said Bob Mondy, vice-president and general manager of Sexton. “We’ve received tremendous support from them.” The new additions are benefiting, he notes, from Sexton’s range of services. “We’ve offered them more extensive hardware programs, and things like flooring, which Allroc didn’t have.”

The addition of the former Allroc dealers also opens up some new geographic markets for Sexton, especially in Atlantic Canada and Northern Ontario.

Sexton recently held its first meetings with the new members. “We’ve got them all in place and they’re working with our programs,” Mondy said.

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At Wal-Mart’s annual meeting, officers stress “change”

BENTONVILLE, Ark.–Wal-Mart officials used their company’s four-hour-long annual shareholders meeting as a platform to reiterate the retailer’s strategy to expand its customer base’Äî130 million people shop its stores weekly’Äîto more affluent shoppers, and to encourage that customer base to shop in more of its stores’ departments.

The meeting had all of Wal-Mart’s traditional trappings, including cheerleading and a 65-minute Las Vegas-like production with actors and singers who included recent “American Idol” winner Tayler Hicks. MarketWatch reported that those performances were mixed with messages by the retailer’s store- and senior-level managers’Äîincluding its vice-chairman John Menzer, CFO Tom Schoewe, and CEO Leo Scott’Äîwho emphasized how “change” is the driving force behind the company’s strategy. Scott admitted that gas prices are hurting Wal-Mart’s low-income customers’ ability to spend. But the world’s biggest retailer insists its efforts to sell more upscale clothing and high-end home electronics are paying off.

In his comments, Scott spoke about Wal-Mart’s response in the aftermath of Hurricane Katrina, which was much praised locally and nationally, as an example of the retailer’s broader “Out in Front” plan, which he said includes improving working conditions in its stores and taking steps to commit to environmental sustainability, two areas where Wal-Mart has been widely criticized in the past. He noted that the retailer’s mandate not to allow its 7,000 trucks to idle has saved the company 10 million gallons of fuel, reported MarketWatch. The company is also looking at opportunities globally, including the possibility of opening stores in India.

Shareholders rejected six of the eight shareholder proposals that were up for vote at the meeting, most by wide margins. Those proposals included a shift to a majority vote for electing directors and a request for a report on the equity of Wal-Mart’s pay scale based on the race of its employees.

A day after the AGM, Mario Pilozzi, CEO of Wal-Mart Canada, gave some further insights into the company’s plans here. These included a reiteration of Wal-Mart’s intention to open its first three supercentre stores this fall, which will feature a full line of groceries. Speaking to an audience at the latest convention of the Retail Council of Canada, Pilozzi also said that Wal-Mart is trying to tailor its retail offerings to better suit local conditions.

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