While all this was going on with the Ontario Matreco members, AWARD in Atlantic Canada was having troubles of its own. Unlike its Ontario counterpart, it rushed to install a distribution arm of its own, called AWARD Distribution Ltd. (ADL). But, by August 2004, AWARD’s distribution business was shuttered, putting an end to about $5 million in sales to QMH’s Atlantic region customers.

Okay, so QMH is dead. But what about Matreco? Right now, TIM-BR MART is no longer negotiating within Matreco, even though both TIM-BR MART and BMR are members of Matreco. But the deal will wind down in 2006, and Tim Urquhart, president of TIM-BR Mart, expects his group to resign from Matreco sometime later in the year. By the end of the year, any ties his two merged members had with QMH will also come to an end. “We look to grow our business substantially with [CanWel Hardware] next year,” says Urquhart. “We’re looking at the demise of QMH and the addition of the volume from Homecare and AWARD that used to go to QMH. [CanWel Hardware] should be able to double their volume with us.

“But,” he adds, “at the same time, they only represent about 50% of our hardware purchases.” The other half, which comes in the form of direct ship orders, will be negotiated through TIM-BR MART’s new alliance with ILDC under the hardware buying group IHDA.

As for Gagnon at BMR, he wants his group to remain within Matreco, keeping the name–and the potential for the group–intact for future considerations. “I want to continue with Matreco myself,” he says. “I don’t want to leave Matreco. I am one of the founding members of Matreco.”

MONTREAL–During a meeting with a group of investment analysts and journalists in Montreal recently, someone (inevitably) asked RONA CEO Robert Dutton about the impact of Lowe’s entry into Canada. The head of Canada’s second-largest home improvement retailer had some impassioned opinions about his company’s ability to compete against Lowe’s–and its announced plan to open six to 10 stores here in 2007.

Dutton added that the announced entry of Lowe’s has been very good for his company from a recruitment standpoint, as concerns about increased competition drive many smaller independents to look for some sort of succession or support. The same thing happened, says Dutton, when Home Depot announced its arrival into Quebec in 1999.
“When Home Depot announced its Quebec expansion, we recruited 50 new dealers in the months immediately following that announcement.”

The Lowe’s news has been equally propitious. “The day after Lowe’s announced its expansion into Canada, we didn’t have enough people to answer the phones.”

The distinction between the duties of the two companies becomes more crucial than ever, as TruServ Canada has been accepted into the ranks of SpanCan along with CanWel Hardware (see Companies in the news), a move that means TruServ will leave Mutual Hardware.

With its focus strictly on distribution, Donaldson has had to deal with disgruntled dealers, as fill rates fell while CanWel Hardware converted to a new system. However, he says, the problems are finally behind CanWel Hardware. “Certainly, there were interruptions in our fill rates as we moved to a new system. But that’s all behind us.

“In the last couple of weeks, the movement of “A” and “B” items is up to 95%, with “A” items shipping at 98% and “B” items at 96%. We’re aiming for an overall fill rate of 95%,” he says.

PETERBOROUGH, Ont.–He celebrated his 90th birthday this past week. Fully 73 years of that life have been spent in the hardware/home improvement industry. He’s been known as Mr. Hardware and as Mr. Stanley; he’s given out more than 500 Gold hammers over those 73 years, and he’s personally received more than he can remember.

Refusing to even take a chair to sit in, Groves spent the better part of an eight-hour day talking with customers, signing autographs and giving away souvenirs donated by Stanley. “I really enjoyed doing it,” says Groves. “I don’t feel like I’m 90,” he adds.

The company will continue to go after a share of the appliances and furniture market with its “Big Ticket” initiative. That program has already been introduced into the Bay and more than 100 Zellers stores.

The new Northern Halls will replace the Rhineside Halls, which will no longer be available for use beginning in 2006, because Europe’s largest private TV broadcasting company, the RTL Group, will be moving into the historical halls. (For information on exhibiting or attending, contact Darrin Stern of Koelnmesse at 416.598.3343)

PETALUMA, Calif.–The longtime owner of Yardbirds Electric and Plumbing, which operates 10 Yardbirds Homes Centers, reportedly has agreed to sell his chain to Home Depot. The Santa Rosa Press-Democrat, quoting sources it said were familiar with this transaction, reported that John Headley, Yardbirds’ 72-year-old owner, was in the final stages of negotiating with Home Depot to sell the company he founded in 1975. Yardbirds, with sales in 2004 of $185 million, was the 59th-largest home improvement retailer in the U.S. that year.

MARYSVILLE, Ohio–Scotts MiracleGro has completed its acquisition of the industry’s No. 2 supplier to the wild bird category, a $700 million retail sector in the U.S. Scotts paid $77 million for Gutwein & Co., which markets its product under the Morning Bird brand. Gutwein generates about $85 million in annual revenue from a wide range of retailers that includes Wal-Mart and Sam’s Club. But Jim Hagedorn, Scotts’ CEO, noted that no clear leader has emerged in this category, and that his company would work on improving Gutwein’s products and packaging.

CORTE MADERA, Calif.–Restoration Hardware’s losses deepened to $4.2 million in the third quarter, compared with a net loss of $3.1 million in the third quarter of the prior year. Same-store sales decreased by 2.1%, vs. an 8.7% increase in the same quarter last year. Net revenue increased 9% to $128.4 million from $118.2 million.

LONDON–Sales at Kesa Electricals, the British retailer, were up 2.5% during the third quarter to 973.1 million pounds (US$1.68 billion). Same-store sales fell by 1.0%. Kesa’s businesses include Comet in Britain and Darty and BUT in France.

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According to Tim Urquhart, president of TIM-BR MARTS, those direct ships account for about half of his members’ hardlines purchases, so volumes could be significant.

While both sides indicate that the merger provides better clout for the independent vs. the big boxes and large chains, ILDC and TIM-BR MARTS have, in the past, been known to compete for members. TIM-BR MARTS lost a couple of smaller members to ILDC in recent years, namely J&H Builders Warehouse in Saskatoon and Dauphin, Man.-based McMunn and Yates. But the biggest blow was the loss of TIM-BR MARTS’ largest member, Totem Building Supplies, to ILDC about two years ago. (Totem was eventually sold to RONA.)

“I guess any buying groups can be construed as serious competitors to one another,” says Tim Urquhart, president of TIM-BR MARTS. But, he adds, his group and ILDC are not direct competitors, in most cases. ILDC members tend to be in metro markets, while TIM-BR MARTS dealers are typically in smaller cities and towns. More importantly, he says, “They are responsible competitors. They recognize that everyone has to make a profit, relying on good service, quality products and not just selling on price.” He adds that Sault Ste. Marie, in Northern Ontario, is the only market with a direct conflict. There, Soo Mill and Lumber is the ILDC member, competing against Lyons TIM-BR MART.

CanWel Hardware is also the major hardlines supplier to TIM-BR MARTS.

So wouldn’t an alliance between ILDC and TIM-BR MARTS be further cemented by their mutual relationship with CanWel Hardware? In fact, wouldn’t it just make sense for TIM-BR MARTS to join the existing SpanCan coalition?

No, and here’s why: CanWel Hardware is still flush with another key alliance–the landmark deal that puts its banner dealers, Ace and Pro–in the hands of TruServ Canada. But the arrangement goes beyond just handing off the headache of managing flyer programs and image programs to TruServ. The two companies, one a division of a publicly held income trust and the other a member-owned co-op, will sit down together to hammer out collective vendor agreements. In fact, TruServ’s executive team was in Montreal most of last week meeting with key vendors.

So here’s the crux of the biscuit: the future of both SpanCan and Mutual depend on whether TruServ chooses to remain in Mutual or go independent. By leaving Mutual, the next step for TruServ would be to join with CanWel Hardware in the SpanCan organization. From there, it would be logical to envision the emergence of a new group that combines SpanCan (CanWel Hardware and ILDC) with IHDA (TIM-BR MARTS and ILDC).

But, and this is a big but: CanWel Hardware’s parent company, CanWel Building Materials, does a lot of business with two key competitors of Pro, Ace, and True Value. Almost half of CanWel Building Materials’ building materials sales last year went to Home Hardware and RONA. These companies would look askance at a deal that ties CanWel Hardware to closely to its competitor, TruServ, within an alliance like IHDA or SpanCan. And that’s why CanWel chairman Amar Doman is distancing his hardware distribution company from any type of banner support–or recruitment–that would pit CanWel Hardware against CanWel Building Materials’ all-important LBM customers.

Normand Dumont, evp of merchandising for RONA, says purchases by his company from the LBM distributor have dwindled to about half their former levels since CanWel announced its takeover of Sodisco-Howden Group. However, he is content to take a wait-and-see attitude to CanWel’s next steps. “I told Amar that this is a yellow light for us. But Amar’s assurance to us is okay for now.”

By coincidence, the ILDC members were in Montreal this past weekend, in the same hotel that hosted the RONA members for its fall market. While ILDC’s LBM negotiations took place, the hardware meetings, which would have been undertaken with CanWel Hardware under SpanCan, have been put on hold. According to Andrew Battagliotti, general manager of ILDC, the SpanCan group will remain intact, at least for now. “As things stand, yes,” he notes. “Over the next few days, the new association of TIM-BR MARTS and CanWel Hardware will have to determine where they stand.” But, he adds, until that time, “SpanCan is very much active.”

What does Bill Morrison, president and CEO of TruServ Canada have to say about all this? After all, his choices over the coming weeks could radically alter the landscape of Canadian home improvement retailing and distribution.

”This deal is a work in progress,” says TruServ Canada CEO Bill Morrison. “We’re starting at ground zero and evaluating for 2006, 2007 and beyond to make the best decision.” He says he expects to have an answer within a few weeks. “It’s such an important decision. Count on us to do it right.”

Tom Donaldson, president and CEO of CanWel and CanWel Hardware echoes Morrison’s sentiments. “The success of both companies rests on the success of the independent dealers and we have a commitment to being customer-centric. We’re going to buy better and sell better.”

Morrison believes the dealers, even those from competing banners, will see the value of the new alliance. “It’s the way to compete against the big boxes,” he says. “Our intent is how to serve the independent better and bring them closer to the same level of supply service [as big boxes and corporate chains].”

Power tools was among the departments that particularly reflected the private-label theme. A new private-label line was even introduced at the show (more on this next week–MM). Others included a special-order flooring set, the paint zone, and a very cool kitchen and bath range.

The flooring includes hardwood, engineered products, laminates and rugs. The program will feature the added service of installation, at least in the big box stores at the outset. In fact, the 40-foot special-order department will be part of all RONA’s big boxes being constructed from now on.

The bath furniture and fixtures include a new high-end private label line called “The RONA Collection.” This brand, featured in a number of categories, represents for RONA the chance to offer better quality and imaginative designs. “Customers can be very trendy and fashionable at an affordable price,” says Normand Dumont, executive vice-president of merchandising for RONA.

The paint department puts all four lines available in each store side-by-side along the back wall of the department. Along that wall are a series of high tables with stools. This setup gives the customer all colour choices in one area, rather than grouped by brand, while the tables give them a place to sit and make colour choices. RONA typically carries Sico, CIL, and its own RONA brand, along with a regional brand, such as Laurentide in Quebec and Behr in the West.

The paint department will expand to feature other décor elements, says Dumont. They will include wallpaper and window treatment samples, plus moulding and trim. “It will become a décor decision centre eventually,” he says.

Although its membership is small, TSG’s buying power is already considerable, and five companies, with 28 locations, are expected to add $225 million to TIM-BR MARTS’ sales volumes of $1.7 billion. TSG’s members are Beauchesne Group, Coastal Drywall, Commercial Construction, Commercial Drywall, Costa Building Supplies, Distribution Ste-Foy, Mat DeConst D.L., Ontario Acoustic Supply, Patene Building Supplies, and Watson Building Supplies.

A new commercial division has been formed within TIM-BR MARTS, effective Jan. 1, 2006, which will cater specifically to the needs of its new commercial dealer members, under Steve Stremecki. Doug Skrepnek, who helped found TSG and served as its general manager, is leaving TSG to become a dealer himself. He will assume an ownership position with Watson’s Building Supplies in Woodbridge, Ont.

Finally, QMH’s other customer, TIM-BR MART Ontario (Homecare Building Centres) merged with its sister group in Western Canada, TIM-BR MARTS Ltd., which sources its hardlines from CanWel Hardware (formerly Sodisco-Howden). TIM-BR MARTS, TIM-BR MART Ontario, AWARD, and BMR were all members of the umbrella buying group Matreco.

Even after all these setbacks, BMR is back on its feet, says Gagnon. The distribution centre in Boucherville, once used only for import products and some cross-docking, has been expanded and outfitted to meet the hardlines capacity of the burned out Longueuil facility. But the dealers’ hardlines purchases are up 40% over last year, and with more than $32 million in hardware sales generated by his dealers at this latest show, he expects that percentage to keep rising.

At Home, Depot, fiscal 2005 sales growth guidance was lifted to between 10 and 12% from 9-12%. The company increased its earnings per share growth guidance to 17-18% from 14-17%.

In the fourth quarter of fiscal 2005, Home Depot expects to open its 2,000th store and its 50th in Mexico. But new-store expansion appears to be less of a driving force behind Home Depot’s financial performance than installed sales and its diversification into commercial supply.

During the third quarter, the performance of Home Depot’s “services” business — i.e., its installation program — increased 21% to $1.2 billion, and was particularly strong, according to the company, in HVAC, kitchens, countertops, windows and roofing/gutters. In addition, during this last quarter, Home Depot completed key acquisitions on the commercial front: the White Cap division bolstered its presence in California and Hawaii through the purchases of West Tool Inc. and Wire Products of Hawaii. Home Depot also closed a deal to acquire National Waterworks, which supplies water and wastewater transmission products. National itself expanded in the quarter through its purchase of Florida-based Magnum Pipe.

Home Depot’s more aggressive interest in the commercial sector appears to be fueling rumors that it could be a leading candidate to acquire Florida-based Hughes Supply, the giant plumbing wholesaler.

Through the first nine months of fiscal 2005, Home Depot’s net income increased 15% to $4.55 billion on sales that grew 10.2% to $62 billion. During that same period, Lowe’s sales rose 16.2% to $32.4 billion, and its earnings increased 24.5% to $2.1 billion.

CHICAGO–True Value Company, the dealer-owned buying group, continued to send out mixed signals about its long-range financial health when it reported a 77.9% decline in its third-quarter earnings (which it defines as net margin), to $2.96 million, on wholesale sales that grew only 2.6% to $486.8 million. Through nine months ended October 1, the co-op’s revenue was down 0.5%, to $1.54 billion, and its net margin fell 22.8% to $25 million.

MONTREAL–Tembec’s consolidated sales for the fourth quarter were $834.2 million, down from $981.3 million in the same period last year. Tembec generated a net loss of $134.9 million in the quarter, way down from a profit of $90.7 million a year ago, and deepening from a net loss of $142.5 million in the previous quarter.

BENTONVILLE, Ark.–Sales were up by 10% in the last quarter for Wal-Mart, to $75.4 billion, but profits were up only 4%, its smallest in four years, as hurricanes forced store closings in a number of areas in the Southern United States. Net income rose to $2.4 billion, up from $2.3 billion during the same period last year. Same-store sales were up 3.8%.

DUNCAN, B.C.–Western Forest Products Inc. suffered a net loss for the third quarter of $12.5 million, deepening from a net loss of $37.2 million during the same period a year earlier. For the first nine months of 2005, that loss was $55.0 million. The results for the quarter reflect weaker lumber and pulp markets and a stronger Canadian dollar. In addition, the company recorded a $7.2 million charge in the quarter for severance costs with respect to the previously announced closure of its Silvertree sawmill operation, which took effect in October 2005. During the quarter the Company reached agreement with TimberWest Forest Corp. to end a saw-log supply arrangement. TimberWest paid the Western $15.0 million cash to end the agreement. In other news, Western has reached a definitive agreement to acquire Cascadia Forest Products Ltd. from Brookfield Asset Management Inc. for approximately $120 million.

TORONTO–Sears Canada Inc. has completed the sale of its credit and financial services operations to JPMorgan Chase Bank, N.A., a wholly owned subsidiary of JPMorgan Chase & Co., for CD$2.3 billion. As part of the transaction, Sears Canada and JPMorgan Chase have entered into a long-term marketing and servicing alliance with an initial term of 10 years during which Sears Canada will receive annual performance payments from JPMorgan Chase generated through credit sales, the opening of new accounts and sales of financial products.

Arthur B. Learmonth, president of Maytag Services business unit, has been promoted to the position of acting president of the Maytag Appliances business unit … David R. McConnaughey, 49, vice-president, Maytag All-Brand Service in Maytag Services, has been promoted to the position of acting president, Maytag Services, replacing Learmonth. Both Learmonth and McConnaughey will report directly to Ralph F. Hake, Maytag chairman and CEO.

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ST. JACOBS, Ont.

Home Hardware, which is Canada’s largest hardware and building materials co-operative, and the third largest home improvement retailer in the country, will expand its retail network this year with additional annual retail sales of $24.5 million and 126,000 sq.ft. of added retail space. The dealer-owned co-operative, which has more than 1,000 locations and retail sales of $4.2 billion, recently added eight stores in Alberta.

To support the growth in Western Canada, Home Hardware is busy expanding its distribution centre in Wetaskiwin, Alta., at a cost of $10.1 million. The project, which is scheduled for completion next year, will add 212,000 sq.ft., bringing the facility to more than 750,000 sq.ft. The facility services 318 stores throughout Western Canada.

The purchase of BMR’s key competitor on the hardlines distribution side, Sodisco-Howden, by CanWel, and its ensuing alliance with TruServ Canada, decreases the number of options for independents –and increases the appeal of his group, says Yves Gagnon, president of BMR. “It’s a big opportunity for BMR. We have 17 Sodisco-Howden dealers at this show,” he adds, to underline his point.

Gagnon has bigger plans for next year. “We’re very happy because, even though we didn’t get any new members this year, our strategy in 2005 was to take care of our new dealers. But we’ll have more next year.” And BMR is looking farther afield than ever before to find them. Besides signing Brian Hermiston, himself ex- of AWARD, to service the new members down east, the group has recruited Paul Peterson, formerly of TIM-BR MART Ontario, to develop the dealer base in Ontario.

“We expect BMR to go east and west, and north and south,” says Gagnon. West, for now, means as far as, and including, Toronto. Does south mean the U.S.? “We’re looking south, but not tomorrow,” he says, indicating that U.S. expansion is a definite opportunity, but one that will have to wait.

“Our goal is to get 20 dealers by this time next year,” he says. “Maybe some more from AWARD, some from RONA, and some from other groups.”

TORONTO-Loblaw Cos., the giant grocery chain that has been aggressively adding home décor to its mix, has been re-organizing its head office, buying teams, and general merchandise assortments, all of which managed to keep 3Q same-store sales flat. Nevertheless, sales for the third quarter increased 6.4% to $8.7 billion, from $8.1 billion in the third quarter of 2004. Same-store sales growth was flat during the quarter and up approximately 0.5% year-to-date. Sales and same-store sales were adversely affected by supply chain disruptions during the quarter, with the general merchandise and health and beauty care departments experiencing the greatest impact.

CLIFTON, N.J.–A private investment firm will acquire Linens ’n Things for US$1.3 billion. The number-two home goods chain behind Bed, Bath & Beyond, Linens ’n Things will become part of a new company owned by Apollo Management LP. The deal, which will take the company private, is not expected to alter plans to open up to 30 more stores next year.

PORTLAND, Ore.–Zephyr Media Group and Atomic Direct have formed a strategic alliance to offer DRTV clients a complete set of strategic, creative, production, media buying and campaign services. As part of this alliance, Zephyr Media has opened an office here and hired 10-year DRTV media veteran Noelle Hubler as senior media buyer. Through this alliance, Zephyr and Atomic will combine forces to deliver a full range of brand DRTV agency services for brand and retail clients including Drill Doctor, Farberware and Newell/Rubbermaid. The Portland office joins existing offices in Chicago, New York, and Washington D.C.

MINNEAPOLIS–Waters Instruments will change the company name to Zareba Systems Inc. The change was effective Nov. 1, at which time the company’s stock began trading under the new symbol “ZRBA” on the NASDAQ Stock Market. During the last few years, the company has sold two divisions, Waters Network Systems and Waters Technical Systems, and acquired North Central Plastics and Rutland Electric Fencing Co. The company also moved its Waters Medical Systems into a subsidiary to focus primarily in electronic perimeter fencing through its Zareba Systems division.

PRESQUE ISLE, Maine–Lowe’s has revealed it will build its first store in the northern part of this state, adding to the two already there in Auburn and Brunswick, and another two, in North Windham and Portland, already under construction. Presque Isle is a short distance from the Canadian border, where Lowe’s plans to expand within two years in its first-ever international expansion move.

HERNDON, Va.–Lafarge North America Inc., a leading supplier of construction materials in the U.S. and Canada, had third-quarter 2005 net income of $172.1 million, compared with net income of $165.6 million in the third quarter 2004. The results for the third quarter 2004 include $2.3 million related to litigation expenses from a legal settlement. Operating income for the quarter was $278.5 million, up 5% to $12.3 million, reflecting higher prices in all product lines and continued strong performance in the gypsum segment. The strengthening of the Canadian dollar contributed $11 million to operating income during the quarter. Increased energy prices negatively affected operating income by $19.4 million during the quarter. Consolidated net sales during the quarter were $1.4 billion, up 12%.

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Under TruServ president and CEO Bill Morrison, the Pro Hardware and Ace Hardware brands join the True Value hardware, V&S department stores, V&S Options, Country Depot and Pet Junction retail brands.

Until now, the Ace and Pro banner programs were owned and operated in Canada by Sodisco-Howden Group, the national publicly held hardlines distributor. when it was acquired by CanWel at the end of last year, the banners came with the deal. However, CanWel quickly announced its intention at the time to dispose of the banners, for two main reasons. The first is that CanWel wishes to consolidate at the distribution level, and focus solely on shipping product. Second, CanWel’s support of the Ace and Pro banners, even at arm’s length through Sodisco-Howden, was seen to put them in direct competition with existing CanWel customers, especially RONA and Home Hardware Stores Ltd.

TruServ may prove to be a good fit. Whilst the Ace and Pro banners ostensibly compete with TruServ’s own True Value banner, they do not compete directly in many markets. The Sodisco-Howden banners are most prevalent in Quebec and Atlantic Canada, while True Value is strong in the West. Ultimately, the new deal puts TruServ in an even stronger position than before to support the independent dealer, with more than 1,400 retail locations involved in the combined partnership. In addition, TruServ’s warehouse carries a different range of products than Sodisco-Howden, reflecting its product mixes for other TruServ banners, mainly V&S Variety and Country Depot. And while it isn’t a consideration in the short term, the opportunity for general merchandise, farm and feed, and pet supplies in existing Ace and Pro stores exists for TruServ. Conversely, TruServ’s LBM dealers could benefit from the products available from CanWel.

“After a detailed review, we believe that TruServ Canada is the best choice to build the Pro and Ace banners and provide the independent retailer with a proven platform in which to enhance their businesses,” said Amar Doman, chairman of CanWel, in a prepared release. “Both organizations are dedicated to the long-term success of the truly independent retailer in Canada. The alliance allows each company to focus on their core competencies.”

The store closings, which were announced in May 2005, came with a price tag. In its six-month consolidated statement, Home Depot reported $80 million in impairment charges in the SG&A expense related to the disposition of EXPO real estate. Additional charges included a cost of $24 million to sell off and dispose of inventory, and $8 million for lease obligations.

Verschuren can now focus more closely on the Canadian division. While historically the strongest performer of all six Home Depot divisions, it faces growing competition as RONA steps up its big box expansion plans and the market braces for the arrival of Home Depot’s biggest competitor, Lowe’s, which has announced its entry into Canada with up to 10 stores in 2007.

Changes to the senior management team include moving Marc Chouinard, currently president of Hbc’s Merchandising Group, to new role of COO for Hbc. This position will give him responsibility for merchandising, marketing and store operations. Thomas Haig will assume a new role as executive vice-president assigned to the office of the CEO. Michael Rousseau, currently executive vice-president and CFO, will head up the company’s credit and loyalty operations.

The co-operative comprises a select group of members, drawn from geographically diverse areas to ensure a largely non-competitive situation. The members can negotiate with suppliers on larger volumes–and better pricing–and buyers for each product category are drawn from the membership. The group follows the model of ILDC, a co-op buying group for LBM dealers, of which Kent Building Supplies is a major member. In fact, the seed for the new group was germinated out of Kent’s sister company, Kent Homes, when Jim Jordan at Kent Homes (whose background includes a stint at Kent Building Supplies) contacted other modular home builders across the country back in the summer. “Jim was the catalyst for the whole thing,” says Bob Egan, vice-president of operations for Guildcrest Homes.

Bradley Berneche, President, Alouette Homes, sees an upside for both the members and their respective customers. “We look forward to working with our existing suppliers of goods and services, as well as new ones … to provide to our customers a level of quality and service second to none.”

Buying duties are being divided as follows: Bradley Berneche, president of Alouette Homes, will handle roofing; Guildcrest’s John Dalgleish will negotiate drywall; siding and insulation will be handled by Randy Bennett at Winalta; and Réal Maillett of Kent will deal on fasteners. Kent’s Jordan will oversee major distribution, including lumber. The inaugural buying meetings will be held Nov. 29-30 in Toronto.

“We are very excited with the creation of this new buying group, and look forward in establishing strong and healthy relationships with the supplier base,” adds Charles Cormier, vice-president, Kent Homes.

The remaining openings for this year are: Calgary (SE), Nov. 2005, 102,000 sq. ft.; Granby, Que., Nov. 2005, 95,000 sq. ft.; Winnipeg, (SW), Nov. 2005, 95,000 sq. ft.; Guelph, Ont., Nov. 2005, 80,000 sq. ft.; Victoriaville, Que., Dec. 2005, 80,000 sq. ft.; St. Albert, Alta., Dec. 2005, 80,000 sq. ft.; Sherbrooke, Que., Dec. 2005, 95,000 sq. ft.; Saint John, N.B., Jan. 2006, 95,000 sq. ft.; Victoria, B.C. (Saanich), Jan. 2006, 80,000 sq. ft.; Calgary, (Beacon Hill), Jan. 2006; 102,000 sq. ft.; Milton, Ont., Jan. 2006, 80,000 sq. ft.

About 94% of Seigle’s revenue comes from pro customers, and this deal includes Michael Nicolas Carpentry, a large local framer Seigle’s purchased in 2003 that provides turnkey installation for new-home construction.

BENTONVILLE, Ark.–Wal-Mart Stores, reported net sales for October of $23.26 billion, up 10.5% from the same month a year earlier. Year to date, sales reached $223.69 billion, an increase of 10.2%. Same-store sales for the company were up 4.3% for October; and up 3.6% year-to-date.

SANTIAGO, Chile– Falabella, the giant department store and supermarket retailer that owns the home improvement chain Sodimac, had an increase in net profit for the first nine months of the year $195 million, up 27% from the same period last year. The increase was attributable to expansion, acquisitions (including the purchase of Sodimac) and an increase in consumer spending. Revenue for the nine-month period was up 21% from a year earlier.

TOKYO–Wal-Mart has increased its investment in the Japanese retailer Seiyu, giving it controlling 53.56% share and providing much-needed capital for the 404-unit chain. It will also install a senior vice-president from its international division as CEO of Seiyu. Ed Kolodzieski, formerly senior vp and COO of Wal-Mart’s international division, takes the helm of Seiyu effective Dec. 15, 2006. Seiyu expects to lose the equivalent of $117.4 million this year, which would be nearly double the loss estimate company officials made last summer. Through nine months, the company’s sales and earnings continued to decline. The company’s net income per employee is the fifth worst among 135 retailers tracked by the Topix-Retail Trade Index, according to Bloomberg Data.

TOWSON, Md.–Black & Decker enjoyed net earnings from continuing operations for the third quarter of 2005 of $140.3 million, versus $111.3 million in the third quarter of 2004. Diluted earnings per share from continuing operations increased 28%, marking the fourteenth consecutive quarter of growth at or above 18%. Sales from continuing operations increased 23% for the quarter to a record $1.58 billion. Sales of existing businesses increased 6%. The Porter-Cable and Delta Tools Group acquisition contributed 17% to sales for the quarter, while sales in the Power Tools and Accessories segment increased 31% for the quarter, including 6% from existing businesses. Sales in the Hardware and Home Improvement segment increased 1% for the quarter.

TAYLOR, Mich.–Masco Corp, the home improvement products conglomerate, reported a 27% decline in its net income for the quarter ended Sept. 30, to $262 million, on revenue of $3.36 billion that was up 5.9% over the same period a year ago. Through nine months, the company’s revenue rose 7% to $9.68 billion, but profit was off 2.7% to $767 million.

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MISSISSAUGA, Ont.–After less than a year receiving hardware from Le Groupe BMR, TIM-BR MART Ontario has severed ties with the Quebec-based wholesaler and buying group. BMR, one of only two buying groups to do its own warehousing and distribution (the other is Surrey, B.C.-based Irly Distributors), had last year struck supply agreements with both TIM-BR Mart Ontario (aka Homecare) and AWARD, the Atlantic region buying group. The arrangement resulted in the formation of Quincaillerie Matreco Hardware, reflecting an investment by all three groups, which are already connected through their membership in the umbrella group Matreco.

TIM-BR Mart Ontario’s decision to end its agreement with BMR was reportedly also due to BMR’s efforts to recruit members from its sister organizations. In fact, Brian Hermiston, a former AWARD staffer, has been hired by BMR to recruit dealers, and his efforts are tipping into anglophone Canada.

The news comes only one week after the announced hiring of Mark Henderson as vice-president at Sexton. Henderson is well-known throughout the industry as the former head of Henderson, a wholesaler in Winnipeg that was sold to Jeld-Wen.

LONDON, Ont.–T. Brayl Copp, owner of one of this city’s most successful building centre operations, was recognized last week when the London & District Junior Achievement inducted Copp to its Hall of Fame.

The Copp family first entered the building supplies business in 1908, when two brothers, William and Thomas Copp, arrived from Devonshire, England, and purchased an existing stone quarry. Over the years, lumber was added to the mix, as were additional locations throughout London. T. Brayl Copp joined the company in 1952, becoming president in 1966. Today, Copp Buildall has four stores and estimated sales of almost $50 million. It has been headed since 2000 by Brayl’s son, Steven Copp.

Peter Ivey also has close ties to this industry. The Ivey family bought Emco in the ’30s and turned it into one of London’s leading companies. Under Peter Ivey’s aegis, it expanded internationally, and even became the first 100% foreign-owned company to operate in Japan. Ivey founded the Charles Ivey School of Business at the University of Western Ontario and was instrumental in establishing the charter for Junior Achievement in London.

As the lines of retail blur, and other sectors expand their hardlines and general merchandise categories, TruServ is taking advantage of their role as a wholesaler to a diverse range of retailers. Besides grocery, the group continues to make inroads in the pharmacy sector, as well. At the show, the company informed Hardlines of a new supply deal with Pharmasave, the third-largest drug store chain in the country, with 330 stores. Effective Nov. 1, TruServ will begin testing its new merchandising in six Pharmasave stores, with the near-term potential for rollout to another 31 stores in a region ranging from Saskatchewan to Northern Ontario.

At the market, these dealers were able to see what kinds of merchandising TruServ is putting into their stores, including endcap promotional products for everything from seasonal items and automotive accessories to toys. Mike Morin, who was hired in March of this year as business development manager – grocery, says Loblaws has led the way in expanding what one will find in a grocery store. “In pretty much any grocery store in Canada, you’ll see this range of products,” he said.

But the new program also ended up attracting the interest of many of TruServ’s existing True Value hardware dealers. “Really, the program can be used throughout the whole member base,” Morin said.

FEDERAL WAY, Wash.–Forest products giant Weyerhaeuser Co. reported a 52% decline in its third-quarter net income, to US$285 million, on revenue of US$5.6 billion that was off 1.3% from the same period a year ago. The company’s third-quarter earnings included a one-time tax benefit of US$14 million that related to a change in the tax laws in the state of Ohio. It also includes a US$21 million charge for the early extinguishment of debt. Through nine months ended Sept. 26, Weyerhaeuser’s total sales (including real estate and related assets) inched up 3.2% to US$16.8 billion. However, its earnings during this period declined 12.9% to US$944 million.

GRAND FALLS, N.B.–With a focus on productivity and efficiency, Timber Top Trusses, which manufactures roof trusses and engineered floor systems, has quadrupled sales since 1998 and started exporting to as far away as Iceland and Spain. For this innovative and growing success story, owner Steve Toner, 30, has earned the Business Development Bank of Canada’s Young Entrepreneur Award for New Brunswick.

NEWTON, Iowa–Maytag Corp. reported third-quarter consolidated net sales of US$1.26 billion, up 6.5% from net sales of US$1.19 billion in the same period last year. The company suffered a net loss of US$18.2 million, or 23 cents per share, compared with US$7.5 million, or 9 cents per share, a year earlier. In the third quarter, home appliances net sales were up 6.7%, driven largely by sales of major appliances.

GRAND RAPIDS, Mich.–Knape & Vogt Manufacturing Co. has hired W.Y. Campbell & Co., an investment banker, to advise it on strategies, including a possible sell-off. Knape & Vogt’s chairman and CEO, Bill Dutmers, said the maker of kitchen and bath storage products will continue to invest in its products and people, adding that the outcome of the strategic assessment won’t necessarily result in the sale of KV. The company employs about 600, with manufacturing in Grand Rapids and Ho Chi Minh City, Vietnam, plus sales offices in Chicago and Mississauga, Ont.

MONTREAL–At MAAX Holdings Inc., net sales for the second quarter of fiscal 2006 increased 1.6% to $138.3 million, from $136.1 million for the second quarter of 2005. Profits before income taxes decreased $11.7 million from $9.7 million, resulting in a loss of $2.0 million for the second quarter. Net sales for the six-month period increased 2.5% to $279.1 million, from $272.3 million, while the company went from a profit of $11.2 million to a loss of $4.8 million.

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The presentation was made by Dave Dingwall, regional sales manager for Sodisco-Howden in Atlantic Canada, on behalf of Ken O’Meara of Keyline Marketing, which represents Estwing in Canada.

Shown (l-r): Bill Gillis, manager of Camerons (and Kennedy’s son-in-law); Dave Dingwell, Janice Kennedy; and Thomas (Jeep) Kennedy.

Meeting Stan Leitch again after many years recalls the days when Sodisco-Howden Group had a direct competitor in the form of Leitch’s former employer, Cochrane-Dunlop. This company represented $120 million in sales through some franchised dealers under the Dominion Hardware and Marshall Wells banners. Leitch was the guy in charge of dealer development.

But his hardware experience began at the tender age of 13, working in a local hardware store in Southwestern Ontario. He eventually became a store manager, but was plucked from the sales floor to work for Cochrane-Dunlop, managing the supplier’s 20-odd corporate stores.

Leitch was responsible for the launch of the Dominion Hardware program, eventually becoming manager of Dominion, “going after Pro stores and independents,” he recalls. He ended his time at Cochrane-Dunlop as branch manager for the company’s warehouse at Dundas and Bloor in Toronto’s east end.

Hardlines travelled to London, Ont., to join Leitch as he received an Estwing gold hammer award, courtesy again of Keyline’s Ken O’Meara, who represents Estwing in Canada. He also received a tribute plaque from a former CD team-mate, Laurie Blackwood Pike, who worked for Leitch during the mid-’80s.

Canadian Tire is not alone. RONA inc. already sells 12% of its products under private label, and the addition in recent months of some 200 items puts the number of private-label products at around 1,900 SKUs. But it wants more. The target level is 15%, a plateau it intends to reach by 2007.

Like Canadian Tire, RONA is increasing its presence overseas. Membership in the European buying Group A.R.E.N.A. gives it the benefit of offices in Ho Chi Minh City, Shanghai and Hong Kong. The group, which RONA joined after leaving the Alliance International LLC in fall 2004, represents $30 billion in retail sales through retail organizations in 10 countries on four continents.

Urban housing starts were up across all regions in September except Atlantic Canada. Housing starts were up 19.8% to 45,400 units in the Prairies, 17.9% to 45,400 units in Quebec, 12.7% to 65,500 units in Ontario, and 11.4% to 35,100 units in British Columbia. In the Atlantic region, the seasonally adjusted annual rate of urban starts fell 11.6% to 8,400 units.

Rural starts in September were estimated at a seasonally adjusted annual rate of 30,700 units.

For the first nine months of 2005, actual urban starts were 4.7% lower than in the same period in 2004. Year-to-date single starts decreased 10.1%, while multiple starts increased 1.1% compared to the same period last year.

For more info on the program, contact Don Sherwood, president of the ABSDA: 506-859-0062, sherwood@absda.ca.

OAK BROOK, Ill.–Norcross Safety Products L.L.C., a manufacturer and distributor of protective equipment, has signed a definitive agreement to acquire all outstanding shares of Fibre-Metal Products Co. Fibre-Metal, headquartered in Concordville, Penn., is a privately held designer and manufacturer of head protection equipment. The company has additional locations in Aston, Pennsylvania and Mississauga, Ontario. The deal is expected to close, subject to regulatory clearance, in the fourth quarter of 2005.

GRAND RAPIDS, Mich. — The building materials distributor Universal Forest Products is launching a new division that will focus on outdoor living products such as decking, trim board and lattice. The division, called Universal Consumer Products, essentially brings together those components of the company’s operations that produce consumer-oriented products, which Universal markets under such names as TechTrim (polymer trim board) and Maine Ornamental (decorative post caps).

NEW YORK–First Wal-Mart and McDonald’s got the documentary film treatment. Now it’s Home Depot’s turn. “Don’t Box Me In” follows the efforts of a toney part of Miami to keep the big box retailer out of their neighborhood. The 35-minute film recounts the battle between local council and residents, which resulted in Home Depot successfully getting approval for the store.

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So far, similar small-footprint outlets have been erected in the U.S., in Ada, Oklahoma and Brookhaven, Miss. Eight more are in the works for the rest of the year, Nardelli adds. He says that these formats can tap into a potential market worth $3-$5 billion. “But we have to find the space.”

Home Depot Canada president Annette Verschuren revealed to HARDLINES that a site in Vancouver has been approved for development of another “urban” concept store. The site, on Cambie St., will share the parking lot with a Canadian Tire that just opened, a two-storey affair that is being touted as an “urban” concept by Canadian Tire. The new Home Depot, slated to open some time in 2008, will sit on four storeys, including two floors below of parking.

The DOC has been ordered to comply with the remand by October 28, 2005, and return CD$5 billion in duties.

Foote said his company also wants to build more big stores. An outlet that opened last fall in Kingston, Ont., is generating exceptional returns, he pointed out. In addition, a new initiative in Vancouver is being tested that maximizes the high priced real estate right in that city by building a 68,000 sq. ft. store on three levels. There’s even a Best Buy electronics store on the lower level. This “urban” format will represent an area of growth for Canadian Tire, said Foote. A new store right downtown in Toronto is being planned at Bay and Dundas to open in the fall of 2006. Another store, at Lakeshore Rd. and Leslie, is scheduled to open in combination with a Mark’s Work Wearhouse in the spring of 2007.

Foote admitted to the Conference delegates that the retailer even considered the old Maple Leaf Gardens site in downtown Toronto. It was “attractive but not feasible.”

Wegmans Food Market, the supermarket chain that owns Chase-Pitkin, cited stiff competition from big-box dealers such as Home Depot and Lowe’s for its decision. Wegmans’ chairman Robert Wegman said that making the home improvement dealer competitive would require a massive and risky investment, and that closing the chain would allow the corporation to focus on its grocery business. As the grocery business is besieged by Wal-Mart, Wegmans will now have to fight big box competition on one retail front, instead of two.

Chase-Pitkin began as Chase Brothers Nursery in 1857. The family that owned the company sold it to Bilt-Rite Wood Products in 1956, when it opened its first retail outlet. Hardlines were added three years later. Wegmans has owned Chase-Pitkin since 1974.

Tom Taylor, Depot’s executive vp-merchandising and marketing, said in a prepared statement that the Milwaukee line would be marketed to users seeking the most power from a cordless tool, and the Makita products will target those users who want 18-volt power from lighter models. The new program ties in with Taylor’s comments from another interview, where he explained Home Depot’s efforts to sharpen the look of the merchandising, with more upscale sets, leaving the traditional “warehouse” look behind.

Lithium-ion batteries are said to last 40% longer than those that typically run 18-volt power tools. The new power tools and combo kits will be available for approximately $350-$750 in the U.S., and $399-$999 in Canada.

TORONTO–Hudson’s Bay Co. is entering a process to consider strategic alternatives for its credit card business. In plain English, that means the retailer is trying to dump the division and cash in the way Sears Canada did last month. Hbc’s Financial Services division manages one of the largest private-label retail card portfolios in Canada, with $1.2 billion in card receivables representing approximately 3.1 million active accounts. In a prepared release, George Heller, president and CEO of Hbc, said, “The market conditions are such that we believe there is the potential for the company to realize immediate value for our credit business, while maintaining a significant ongoing stream of income from the partnership we would establish with the ultimate buyer.”

CHICAGO–Sears Holdings Corp. has found an investor for its chain of Orchard Supply Hardware Stores. A private equity fund has bought a 19.9% for US$58.7 million in cash. According to Reuters, the fund, Ares Management LLC, has a three-year option to buy an additional 30.2% for US$126.8 million. Sears has been trying to figure out what to do with the 84-store chain of hardware and garden stores in California, looking either to sell or spin it off to focus on its core Sears and Kmart businesses. Sears, Roebuck and Co., the Sears subsidiary of which Orchard is a part, would get a US$450 million dividend from the deal, which is expected to close in the fourth quarter.

LONGUEUIL, Que.–Sico Inc. has acquired, through its wholly owned subsidiary, Bétonel Ltée, all shares of Mills Paint Sales Ltd., an architectural paint manufacturer, whose head office and plant are located in the Vancouver. Founded in 1930, Mills Paint operates a chain of eleven specialty paint stores across British Columbia and Alberta, selling mainly under the Mills Paint and Richcraft names. It employs 50 people and had sales of about $9 million in 2004.

ISSAQUAH, Wash. – For the year ended August 28, 2005, Costco Wholesale Corp. reported net sales were US$51.86 billion, an increase of 10% from $47.15 billion during the prior year. Same-store sales increased 7% over the comparable 52-week period. Net income for the year increased to US$1.06 billion, from US$882.4 million. The company also reported net sales of US$5.14 billion for the month of September, up 13% from US$4.53 billion.

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Perhaps to avoid the experience in Chile, where, in the mid-’90s, the retailer actually pulled out after only a few short years, Nardelli is trying to follow the success in Canada as Home Depot develops a strategy in the Orient. After all, that model has worked well so far. “The [success of] the Canadian model,” he says, “gave me the confidence to move into Mexico.”

However, Asia is proving a tough nut to crack. “I’m disappointed that we’re not there sooner,” says Nardelli. Like Canada and Mexico, he would prefer to make an acquisition to get established quickly in China, but attempts to buy up an existing chain there “just didn’t pencil.” He admits he may have to undertake greenfields expansion.

In the meantime, Home Depot will invest US$15.5 million in developing an operation that will spearhead its operations in China. Called The Home Depot (China) Building Material and Home Improvement Co. Ltd., the operation is expected to be established in Shanghai, where it will sell hardware, décor and building materials at both the retail and wholesale levels, reports the Shanghai Time.

As for opportunities in Europe, Nardelli is less enthusiastic. He calls the market there very crowded and badly in need of consolidation.

Like other groups representing independents, Sexton is facing competition from big boxes, as they expand into ever smaller markets, and from RONA, which is aggressively recruiting independents. Henderson will lead the development and implementation of a membership growth strategy for the Sexton Group.

Henderson, a well-known and well respected figure in the industry, began his career in home improvement in 1967 with his family’s business, G. Henderson Distributors. He grew with the business, assuming progressively more responsible positions until taking over the leadership role in the company in 1985.

In the late 1990s Henderson Distributors was sold to Jeld-Wen, and Mark Henderson became CEO and chairman of the board of Jeld-Wen of Canada. He held that role until 2003.

Retailers who want to grow in the current market must also invest in the technology that will allow them to analyze, and respond to, consumer spending habits, says Morrison. “The big boxes have an incredible understanding of the customers, and independents need the same understanding so they can compete on that level.” He further suggested that the declining price of customer tracking systems make information gathering an affordable option for merchants of any size.

Despite having witnessed first-hand the challenges of a family-owned lumber business, Kim Emmerson still believes that the independent dealer constitutes a “vital, profitable and necessary part of the retail home improvement business.” Owner of Emmerson Castle Lumber in Haliburton, Ont., Emmerson represented the voice of the independent dealer on the podium at the Hardlines Conference.

Size does contribute to success for the smaller independent, says Emmerson. “The days of the mom and pop store are [gone], so you have to be big enough,” he says, “but if you were to grow into a 65,000 to 100,000 sq. ft. store, perhaps your service levels would drop.”

Emmerson concurs with Morrison on the need to invest in technology. He uses technology in his store whenever it will enhance operational efficiency or heighten the experience of the consumer. These include a computer-assisted design program to provide customers with a three-dimensional house and kitchen plans, and a database of some 15,000 people in his trading area.

After all, Straus points out, the co-op model for hardware has been very successful. In fact, he admits, his organization was approached by a group of dealers in the food sector, wanting Home to launch a grocery co-op. “They asked us to develop a food/grocery banner, but it’s not in the cards,” says Straus.

Instead, all efforts are focused on enhancing the role of the traditional hardlines dealer. And nothing brings in customers more than new products. “You’ve got to find new ways to get people into your store,” he says. Products such as a “Storm Station” from Black & Decker–an all-in-one radio, 12-volt recharger for cell phones, radio, and detachable flashlight–plus LED Christmas lights for the holiday season and a textured stone finish called Texstone, are among the innovations Straus is counting on to keep customers coming back.

But, he warns, “If you kept selling the ‘same-old same-old’, you’d still be selling square nails.” (He quickly adds that Home does sell square nails, but as a specialty item for refurbishing antiques or for a more rustic look when installing barn boards.)

Expansion is just one way the retailer intends to drive growth. According to Greg Bridgeford, executive vice-president of business development, “Three key strategies that will drive our future growth include continuing to pursue domestic storing opportunities, developing solutions for do-it-for-me customers, and exploring international growth opportunities. We are interested in those opportunities where an optimal business model will capitalize on our strengths and afford us profitable growth.”

Lowe’s execs reiterated that it would open 150 stores this year, and between 150 and 160 in 2006 and 2007. That represents approximately 12% square-footage growth in 2006 and 10-11% expansion in 2007. While same-store sales over the coming year are forecast at 5%, sales from these new footprints are expected to drive an overall sales increase of 13-14% in fiscal 2006, and an additional 14-15% increase in 2007.

SAN DIEGO — Lawsons, a U.K. chain of eight lumber and building materials stores serving greater London, has signed a licensing agreement that gives it exclusive rights to sell Ace Hardware Corp.’s Ace-branded paint. Lawsons has also agreed to convert its stores’ paint departments to Ace’s “Color Your Life” merchandising and display format. This is the first time Ace has done business in England.

WASHINGTON – The U.S. Justice Department will review the proposed takeover of Maytag by its biggest competitor, Whirlpool. Together, they would control a large portion of the U.S. heavy appliance industry, causing concern by anti-trust officials. The acquisition is valued at about US$1.7 billion.

MONTREAL – Richelieu Hardware enjoyed consolidated third-quarter sales of $88 million, up 2.4% from $86 million a year earlier. Distribution sales accounted for 12% of total sales in the quarter, while the company had sales of $77 million in Canada, up 2.1% over the same quarter of 2004. Sales of hardware products to retailers grew 9%.

NEW YORK – A number of retail merchants groups have banded together to sue Visa and MasterCard, as well as a number of banks, over the high cost of merchant fees for credit card transactions, claiming collusion to set high rates. The suit could be worth tens of billions of dollars.

COLUMBUS, Ohio – Wal-Mart may buy up the Tommy Hilfiger line. It’s having money troubles and Wal-Mart is running up against Target, so such an acquisition would certainly help Wal-Mart appeal to a more up-market consumer, which is where Target dominates.

AMERICUS, Ga. – To provide rapid disaster recovery for families who lost homes in Hurricane Katrina and Rita, Lowe’s Cos. is working with Habitat for Humanity International in a hurricane rebuilding program called “Operation Home Delivery.” Habitat’s five-day, round-the-clock homebuilding campaign is in concert with NBC’s “Today” show and Warner Music Group, and took place Sept. 30 at Rockefeller Plaza in New York. Simultaneous builds went on in Jackson, Miss., and Los Angeles. Volunteers and supporters expected to complete framing for more than 60 new homes that will be transported to the Gulf Coast region.

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Another challenge for Canadian Tire is securing its presence in the overcrowded urban markets. An “urban” outlet has gone up in Vancouver, which maximizes the high-cost real estate there by building on two levels. Foote told the audience that another store, being planned for Burlington, Ont., would be well suited to a large format, but he wants to avoid having to go with a two-level design.

Included in this online training package are the NRHA’s Advanced Course in Hardware Retailing and the Building Materials Product Knowledge employee training courses. Both have been reformatted into Canadian versions and are available electronically on the Federated education and training website.

The electronic membership model reduces costs greatly to each dealer, giving them a single price for unlimited access to the training courses for their staff, says Hoy. “By delivering these industry-leading employee training courses electronically through this electronic membership initiative, Federated affiliated retailers will be able to put as many students through these training courses as they like.”

Other vendors with more bread-and-butter lines were looking at ways to increase their shelf presence. Jennifer Prentice, a sales rep for Unilever, had large jugs of laundry detergent alongside the smaller bottles of household cleaners. The traffic in convenience products such as these, she pointed out, can turn a small hardware store into a weekly destination and a one-stop shop.

Equally important were the many support services on display, everything from POS to online training programs. “Dealers understand that to be competitive today, you can’t milk the business,” said Bill Ferguson, Home Hardware’s dealer support manager.

At the end of the day, he pointed out, price gains are a normal market response to sellers’ market conditions and growth in real Canadian house prices remains in line with growth in real disposable income.

The Boston suit also states that store managers tolerated the harassment.

The New York Daily News reported on Friday that, as part of a larger class-action suit, federal officials have also sued Home Depot over the alleged racial harassment of employees of West Indian origin at its store in the Red Hook section of Brooklyn. The managers there are reportedly all white. Home Depot stated officially that it continues to enforce a “zero tolerance” policy against any forms of employee discrimination.

FRANKFURT–Praktiker, a major European DIY chain with some 340 stores in nine countries, is being spun off by its parent company, supermarket giant Metro AG, which wants to issue an IPO. Financial institution J.P. Morgan is leading the syndicate to undertake the IPO.

MONTREAL – In an effort to improve earnings in its Home Furnishings segment, Dorel Industries Inc. will consolidate its Ameriwood Industries business, the company’s RTA furniture division. Production will cease at its Wright City, Missouri facilities by the end of this year. Ameriwood will re-focus on new product development within each of its four product groups, relying on imports, as well as domestic production. According to Dorel president and CEO Martin Schwartz, the company’s “manufacturing footprint exceeded anticipated market needs.” The closure of the Wright City plant will affect approximately 300 employees and result in a pre-tax restructuring charge of approximately US$11 million. Production will be shifted to Dorel’s remaining RTA factories in Dowagiac,
Mich., Tiffin, Ohio and Cornwall, Ont.

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Home Depot leaves four billion “impressions” annually on consumers, said Taylor. Those hits come through various marketing devices, including 10 million mailers, sponsorship of eight out of 10 network home improvement shows, an in-store “inspirational” magazine, and programs to welcome new homeowners to neighbourhoods which Home Depot services. The company is also seeking out marketing partnerships with organizations such as CARP, the Canadian Association of Retired Persons.

In-store, consumers can expect to see a new focus on high-end items, a decision based on Home Depot data that suggests that the top 20% of American consumers have had 51% of the income gain of the last 20 years. But it’s not just the well-heeled consumer who wants more premium products, says Taylor.

“The demand for premium products is increasing,” he says, “even among the less affluent.” He points to such categories as barbeques, in which all types of shoppers are prepared to spend more. But the pro market is also an important one for Home Depot, one that the retailer sees an opportunity to expand tremendously. “Pro is two times the size of DIY. In terms of reaching pro customers, we have a have a long way to go. The approach will in part revolve around acquisition strategy. We have an appetite for acquisition in supply sector. Thirty percent of transactions are pro but certain segments of that market don’t find Home Depot appealing.”

Retailers need to be much more aware of general trends that might affect business, said Plant. As an example, he pointed to new trends in immigration, under which the waves of Europeans who came to Canada after World War II have been replaced by South Asian and Middle Eastern newcomers.

Advances in technology make it much more accessible, even for the independent. Kim Emmerson, owner of Emmerson Castle Lumber in Haliburton, Ont., emphasized during his presentation the importance of maintaining a cutting edge in technology. It keeps him competitive, and enables him to better serve his DIY and contractor customers, he explained.

The Richmond big box, however, tries for a more urban feel and a more convenient shopping experience. International symbols are being used wherever possible, in place of the written word, to help the ethnically diverse customer base find their way areound. Wider aisles, improved signage and brighter lighting have been incorporated to make navigating the store simpler.

The RONA Zone concept at this store, with its separate, fully decorated departments, include a Colour Centre, Lighting Boutique, Kitchen Boutique, Décor Zone, Seasonal Zone and flooring, moulding, and windows and doors. The store also has an indoor, drive-through lumber yard.

But good retailers understand how to create growth at any part of the business life cycle, insists Meyers, in part by understanding what makes the store brand, brand, social values or culture different from the competition.

Surprisingly, Home Depot does not intend to hold Costello to any non-compete restrictions.

Fill rates continue to improve, Mahurin said. “While 95.8% is not something I would write home about,” he admitted, “it is an improvement over the past years’ performance.” His near-term goal is to get that rate up above 96%.

LONDON – Europe’s biggest DIY retailer, Kingfisher Plc, announced a whopping 23% drop in 2Q profits, driving it to seriously revamp its operations. That includes the announced closing and downsizing stores in its British DIY chain B&Q. The company plans to revamp its stores in the style of Ikea, and has also announced it will axe 400 office jobs. Sales were actually up slightly for Kingfisher, reaching £4.08 billion, up 3.3% from £3.95 billion in the first half of the previous year (+1.8% in constant currency). However, profits fell in constant currency to £289.1 million, from £367.3 million. As a result, B&Q will close 22 stores and around 16 of B&Q’s larger Warehouse stores will be converted to a new mini-Warehouse format, as that format continues to outperform the rest of B&Q’s stores.

QUEBEC CITY – Home Depot Canada rolled out its annual consumer energy awareness promotion, “EnergySmarts”, Canada-wide last week, in association with the Ministry of the Environment and the Clean Air Foundation. The campaign is designed to promote energy consumption awareness and consumer participation.

ATLANTA – Home Depot has launched a new paint colour palette named Colores Origenes, aimed at its growing Hispanic consumer base. Research done by the company shows that painting is one of the most common home improvement projects undertaken by those consumers, 59% of whom speak Spanish all the time.

GLENVIEW, Ill. – Illinois Tool Works Inc. continues its vertical integration efforts with the acquisition of St. Jude Polymer Corp., a PET and polyethylene plastic recycling company. It will supply plastic to ITW’s strapping manufacturing operations within its Signode division. St. Jude’s management team, including president Steve Babinchak and vice-president Frank Petrachonis, will stay on.

MINNEAPOLIS – Waters Instruments, Inc. had 4Q net sales of US$11.4 million, up 46.7% from US$7.8 million for the same quarter in the prior year. Net income for the quarter reached US$674,000, from US$751,000. For fiscal year 2005, the company had a profit of US$850,000 on net sales of $32.6 million, which were up 34.8% over the prior year.

Dave Powell has been appointed manager retail sales for Bosch Power Tools, reporting to John McKay, vice-president and general manager of the power tools division. Powell was formerly national account manager with Black & Decker. (905-826-6060)

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