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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TORONTO – Home Depot Canada is the latest major Canadian retailer to ally itself with a television personality. But rather than promoting the store through a particular category or celebrity product line, the deal with Mike Holmes, host of HGTV Canada’s Holmes on Homes, will serve to promote Home Depot’s Installation Services business.

Holmes will work closely with Mike Clements, director of Installation Services for Home Depot Canada. “Mike is a great fit because he bridges the gap between the do-it-yourselfer and the do-it-for-me consumer,” says Clements. “We want Mike on board
because he understands contractors and consumers and can help raise awareness that The Home Depot, like Mike, does it right the first time.”

Home Depot has a network of 3,000 installers across Canada. According to Clements, they perform 5,000 installed projects per week.

How Holmes’s role will be parlayed into consumer awareness has not been clarified entirely yet, but his presence is considered a strong one for fortifying Home Depot’s position as not just a traditional purveryor of home improvement products, but the source for installing those products, as well. While he’ll work primarily with the Installation Services team, he’s also being used to provide input on product assortments for the company’s merchandising departments, and on how the retailer can better serve the contractor in general. He’ll even offer input on staff training. In additon, he’ll appear in advertising, website and other future endeavours.

“He’s going to help us run our business,” says Home Depot Canada president Annette Verschuren. “We want to get better. We want to improve everything we touch.”

Hurricanes that hit the southeastern U.S. in 1992 and in 2004 destroyed between 27,000 and 28,000 homes each. However, “the number of homes with major but reparable damage was more than twice the number destroyed,” states NAHB. On the other hand, Katrina caused massive flooding in Louisiana, Alabama and Mississippi that “is likely to translate into much larger numbers of homes destroyed” or permanently uninhabitable. The trade group estimates that as many as 200,000 homes in New Orleans alone might have suffered this fate.

Consequently, emergency repair will take precedence over rebuilding, and commodities like roofing and plywood that would normally be earmarked for reconstruction activities will go first to repair work. On the other hand, “demand for other materials, such as concrete, is likely to decline initially, as planned projects are cancelled or delayed during the initial recovery period.”

Besides, the trade group noted, history indicates that the demand for new homes in a market that has been devastated does not necessarily lead to an immediate surge in construction. “Replacing units destroyed by the storm will not begin for many months and will take place slowly, over a number of years. ”

NAHB points out that the storm damaged and shut down several lumber mills, and disrupted imports of building materials. (The New Orleans and Mobile customs districts reported about 12% of national cement imports in 2004.) That invariably will impact supply down the road. The combination of greater (partly speculative) demand and disrupted supply produced a spike in lumber and panel prices in the final days of August 2005. With production already running at full capacity for wood panels, further increases for those products, as well as for roofing, are likely.

The new store is 15,000 sq.ft. in size, which includes 5,000 square feet of retail space.

Lacy had been running Sears since 2000. He will continue as vice-chairman and remain on the company’s board.

In the three months that ended July 30, Sears reported earnings of US$161 million, or 4.5% above the same period a year ago. That figure included a US$42 million restructuring charge. Sears stated that its quarterly revenue from the combined companies was US$13.19 billion, down 2% from the same period in 2004. Sears’ stores sales declined 3%, and its same-store sales were off 7.4%. Same-store sales for Kmart’s stores inched downward by 0.3%.

Lowe’s is the number-two appliance seller in the U.S., followed by Home Depot. Sears, while remaining in the number-one spot, has seen its market share fall from 36.9% a year ago to 33.1%. Best Buy is also feeling the heat from the home improvement big boxes. Its share slid from 7% a year ago to 6.3% in the second quarter.

In essence, by calling on corporate sponsors for help, Marcus is taking a page out of Home Depot’s playbook. When he started the warehouse retailer, Depot highlighted the fact that it carried nationally branded merchandise, much of which provided inventory to the dealer’s first stores at terms that, at the time, were unheard of in their flexibility and leniency.

BOLTON, Ont. – The TORBSA Buying Group has recruited a new member to its roster of contractor-oriented dealers. Brampar Building Supplies Ltd., Brampton, Ont., becomes the 29th member.

ST-ANTONIN, Que. – Bargain Building Materials will celebrate the grand opening of its first store in Atlantic Canada on Sept. 14. The store, Select Retail Store Ltd. in Dieppe, N.B., has joined under Bargain’s “authorized dealer” program, whereby existing independents can sign on to operate as Bargain Building Materials outlets. Another Maritime dealer has joined as well in Jacksonville, near Fredericton.

TORONTO – Following its acquisition of Lagostina, the Italian producer of stainless steel cookware, by Groupe SEB, Coranco Corp. will remain the exclusive distributor of the Lagostina brand in Canada. Independently, its subsidiary Groupe SEB Canada Inc., will continue to provide the distribution and services of all other international brands of Groupe SEB, including All-Clad, Krups, Moulinex, Rowenta and T-fal to its Canadian customers. Groupe SEB is in over 120 countries and employs 14,500 people in 49 countries.

Brad Dixon has joined King Marketing as B.C. sales manager. He brings more than 15 years of home improvement and other related experience to his new post, having worked most recently at IRLY Distributors Ltd. as dealer development manager. Brad’s responsibilities include the expansion and development of business in B.C. for the manufacturers represented by King Marketing. King Marketing services the big box stores with a team of service representatives and sells to the major regional accounts. (604-271-3455)

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But relief efforts go right down to the local level, reflecting the desire by Americans everywhere to help out. For example, Alspaugh’s Ace Hardware in Kingwood, Tex., hosted a lemonade stand and food collection drive this past weekend.

Some commodities, like roofing and drywall, whose supply has been erratic and even on allocation in some weeks as a result of last year’s hurricanes in Florida, could be under duress, too, when rebuilding from Katrina begins. “We are running at capacity in our five plants, so I don’t know how much more we can do,” Thomas Karol, CEO of roofing supplier Elk Supply, told the Dallas Morning News. “We are running 24 hours a day, seven days a week.”

He added that the Florida hurricanes, which struck large population centers, increased overall demand for roofing material by 10% to 15%, whereas he expects damage from Katrina to increase demand by no more than 3%. “That’s still a lot of new demand in a market that is already tight.”

Perhaps the one saving grace is that the markets most affected by the storm are not in areas where high levels of new-home construction are currently taking place. However, the rebuilding effort could be monumental and take several years to complete. Michael Carliner, an economist with the National Association of Home Builders, told the Huntsville (Ala.) Times that the first phase for heavy demand on building materials will be repair-related, plywood, windows and oriented strand board used in roofing and walls. He predicted that homebuilding materials wouldn’t be in demand for some time, given the expected delays before any significant rebuilding can start.

“Rebuilding takes a longer time to start and a much longer time to finish,” Carliner said. “What we found after each natural disaster is that it’s very hard to detect that much additional construction occurred. That reflects a number of things: the reconstruction process is very slow, it may take a decade to really complete, and a lot of people don’t rebuild.”

He noted that last year’s four hurricanes that swept through Florida destroyed 27,000 homes, and he expected the damage to be worse from Katrina.

SAINT-ANTONIN, Que. —Bargain Building Materials Stores/ Matèriaux à bas prix has identified a winning formula – one that involves franchisees instead of corporate stores. As a result, the company is undertaking a plan to convert its corporate stores into dealer-owned operations. The latest to make the switch are in St-Antonin, near Riviere-du-Loup, and St-Jean-sur-Richelieu.

The program marks a major strategic reorientation initiated last May, which will result in all 15 corporate outlets being franchised within the next two years. Those franchises will be owned by Bargain, but operated by independent franchisees. Currently seven of the 15 stores have been successfully converted to this new arrangement.

“We realized that the financial contribution of the franchisee increases their involvement and motivation in all aspects, whether it concerns management or customer service,” says Christian Richer, president and founder of Bargain Building Materials. “This is the reason why we decided to initiate this more entrepreneurial approach in all of our stores.”

Bargain also has an “authorized dealer” program, whereby existing independents can sign on to operate as Bargain Building Materials outlets. Bargain began this program two years ago, but recruitment really began in earnest in the summer of 2004. Eventually, five independent dealers were recruited under the Bargain banner. Now, within the past month, another three authorized dealers have joined, including the chain’s first stores in the Maritimes. They are located in Dieppe, a suburb of Moncton, N.B., Jacksonville, near Fredericton. The third opening, in the Saint-Valère community of Victoriaville, Que., is scheduled for later this month.

“We carefully analyze the propositions that we receive, because we want to develop some solid partnerships,” says Richer. “I have the conviction that our outstanding breakthrough in the Maritimes will increase in the next few years.”

The company’s operations now comprise 22 stores in total. Of those, seven are corporate stores being operated under the franchise partnership arrangement and eight are waiting to be converted. Another seven are authorized independents. Headquartered in St-Antonin, Bargain Building Materials had sales of $35.2 million last year.

TruServ Canada has also signed a supply agreement with two grocery retailers, as part of TruServ’s latest initiative to supply general merchandise to retailers outside the hardlines arena. L.M. Food Market is a Southwestern Ontario grocery chain with locations in Harriston, Durham, Palmerston, Dundalk, Markdale, Arthur, and Elora. Selby Freshmarket has a single location in Elmira, Ontario.

“This program is growing quickly with grocery and pharmacy entrepreneurs in Western Canada,” says Gagnon. “We expect similar rapid additions in Eastern Canada, building our distribution capacity on products and routes already in place.”

Only last month, Lanoga expanded into Texas for the first time through the acquisition of Parker Lumber, a pro dealer based there that operates 13 yards with US$32 million in revenue.

In a related development, the city of Rockford, Ill., has ironed out the details for Lowe’s to build a 1.4-million-square-foot DC there. The city has approved an estimated $2.6 million in tax breaks for the dealer, and will purchase 180 acres of land for $4.4 million, 152 acres of which it will sell to Lowe’s for $2.43 million.

If you aren’t already sure of a place, better click here and register right now!

TORONTO —Canadian Tire Corp. has announced the sale and leaseback of its Cambie Street real-estate project in Vancouver, to RioCan Real Estate Investment Trust for $44.5 million. Canadian Tire expects to realize a pre-tax gain on the sale of approximately $8.9 million, which will be amortized over the 20-year term of the Canadian Tire store lease. The site includes a four-storey building anchored by Canadian Tire’s newest “urban” style 20/20 concept store (see last issue–MM).

ISSAQUAH, Wash. —Costco Wholesale Corp. reported year-end net sales of US$51.87 billion, an increase of 10% over US$47.15 billion during the prior fiscal year. Same-store sales for the year were up 7% company wide, while the international division, of which Canada is a part, had a rise in same-store sales of 11%. For the fourth quarter ended August 28, the company reported net sales of US$16.37 billion, an increase of 10%.

ATLANTA —The previously announced takeover by Home Depot of National Waterworks Holdings Inc. closed at the end of August, and according to a regulatory filing, the selling price was US$1.35 billion. National, a distributor of products for wastewater transmission systems, will become part of Home Depot Supply.

TORONTO — Canadian Tire Corp. completed a public offering of $200 million in 30-year medium term notes pursuant to a prospectus dated March 14, 2005. The notes carry a coupon rate of 5.61% and mature on Sept. 4, 2035. Scotia Capital Inc. served as lead agent and bookrunner on the offering. Other syndicate members included TD Securities Inc. (co-lead), BMO Nesbitt Burns Inc., CIBC World Markets Inc., National Bank Financial Inc., and RBC Capital Market.

COLUMBUS, Ohio – Stephen Quinn has joined Wal-Mart as senior vice-president of marketing. He was formerly chief marketing officer at Frito-Lay, a division of PepsiCo.

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Costello–slated to speak at the upcoming Hardlines Conference–has been replaced by Tom Taylor, 39, a 22-year company veteran who most recently was executive vice-president stores. And in an incredible show of support by Home Depot itself, Taylor has stepped in to fill Costello’s shoes at the Conference itself on Sept. 13.

In what appear to be unrelated corporate personnel moves, Home Depot also promoted Joe DeAngelo, president of its Home Depot Supply division, to executive vp; and Marvin Ellison, its vp logistics, to senior vp. In addition, Bill Patterson, president of the recently formed Home Depot Asia division, is retiring at age 59. Asia’s vice-president operations, 40-year-old Chris Elias, will head up that division until Home Depot finds a permanent replacement for Patterson.

In terms of retail formats, where did the growth come from? The biggest growth continues to be in the big box format, which, through a combination of new store growth and same-store sales increases, managed to add $573 million in sales to the industry.

But to focus solely on big boxes is to underestimate the growth that continues among building centres. Once considered the most perilous of all formats in the wake of big box expansion, building centres are proving to be tenacious, especially in smaller markets – and particularly among those dealers organized into LBM buying groups.

For more info on this report, which appears in our sister publication, Hardlines Quarterly Report, <click here>.

MISSISSAUGA, Ont. – Taymor Industries Ltd., a Canadian supplier of builders’ and decorative hardware, has moved to a new Toronto-area distribution centre. The new centre is located in Mississauga at 6460 Kennedy Rd., Unit A, L5T 2X4, and features over 50,000 sq.ft. of warehouse space, as well as the offices for the national sales management and eastern sales teams. The new centre replaces an old facility in Downsview, Ont. Taymor’s head office will continue to support the new facility from its location on Annacis Island in Delta, near Vancouver B.C.

OAKVILLE, Ont. – Imperial Manufacturing has moved into a new 102,000-sq.ft. facility here that is home to a new building products manufacturing operation designed to support Ontario builders and contractors. In addition, it’s also carrying Imperial galvanized products.

BURNABY, B.C. – Taiga Forest Products Ltd. has received final approval from the Supreme Court of British Columbia for the amended arrangement under which Taiga intends to convert to an income fund-like structure using stapled units. Taiga expects the conversion to close on September 1, 2005.

Louise Hudon has been appointed as marketing director for Roland Boulanger & Co. Ltd., a Canadian manufacturer of decorative mouldings for the residential and commercial markets. Reporting to the general manager, Hudon will be responsible for marketing strategy and execution. She will also support the company’s retail and industrial sales departments with their communications, merchandising and category management needs. Hudon brings to Boulanger expertise in marketing and communications for Canadian and multinational retail and manufacturing organizations … She replaces Mario Cloutier, who will assume new responsibilities within the company. Founded in 1942, Roland Boulanger & Co. Ltd. (819-358-4100)

Imperial Building Products’ Oakville, Ont., operations have had some additions to its team: Danny Pittana has been named national sales manager, leading a Canada-wide sales organization … Paul Biasucci, joins as territory sales manager … Minh Ly joins the Oakville staff as building products customer service representative.

Can-Save has promoted Stephanie Brown to the newly created position of business development, Kitchen & Bath Division. Brown will be responsible for helping progressive dealers grow their kitchen & bath categories. (705-795-2611)

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“A view from the top: where do we go from here?”
As the number-two guy at the number-one home improvement retailer, John Costello, Executive Vice-President of Merchandising and Marketing for Home Depot, joins us from Home Depot’s headquarters in Atlanta to make a rare public appearance in Canada.

A well-known and highly respected marketing and retail executive, Mr. Costello has more than 25 years of experience in consumer goods, retailing and technology. He is currently responsible for Home Depot’s merchandising, marketing, branding, advertising, visual merchandising, public affairs, e-business and global sourcing. He was named one of the 50 Most Influential People in Marketing by Advertising Age and was elected to the Retail Marketing Hall of Fame in 1997. Not to be missed!

“Foresight is 20/20: Canadian Tire’s vision for the future of retail”
Mark Foote is President of Canadian Tire Retail. Find out how Canada’s largest hardlines retailer continues to re-invent itself – and redefine the scope of hard goods retailing.

Mr. Foote’s responsible for marketing, merchandising, advertising and supply chain management for Canadian Tire Retail and the company’s consumer e-commerce business. Canadian Tire is one of Canada’s Top Four home improvement retailers, making it a huge customer for some – and a major competitor for others. Mr. Foote will talk about the most daring – and most successful evolution of Canadian Tire to date. Learn about Canadian Tire’s newest strategies to maintain and grow its dominance!

“Re-inventing the role of the independent”
Wal-Mart, Home Depot, and now Lowe’s! The threat faced by the independent in Canada is a serious one, yet independents are finding their place in the retail scene, and thriving. If you want to hear a truly amazing retail mind at work, don’t miss Bill Morrison, President and CEO of TruServ Canada as he offers his insightful observations on the realities facing home improvement retailing today. With a background that includes Foot Locker and Home Outfitters, Mr. Morrison is well suited to offer a better understanding of the demands of today’s consumer – and how best to meet those demands to build your business.

“Lessons learned: a home improvement expatriate’s perspective”
Stephen Bebis, President and CEO of Golf Town, is the man who brought the home improvement big box to Canada. In 1991, he came to Canada to start Aikenheads Home Improvement Warehouse. When Home Depot purchased 75% of Aikenheads in 1994, he stayed on for two years as President and Chairman of the Partnership Board. In 1998, he joined Golf Town.

The question, however, is how much Saint-Gobain is willing to ante up for the company. Investors speculate that its bid could increase by anywhere from 3% to 11% of its original offer.

Floyd Sherman, Builders FirstSource’s president and CEO, projected continued growth through the remainder of this year, driven primarily by “market share gains and strong customer demand for our prefabricated components product offering. Our operating strategy will continue to focus on increasing market share and improving our operating leverage as well as continued expansion of our manufacturing capacity to meet customer demand.”

RALEIGH, N.C. — Stock Building Supply, the largest pro dealer in the U.S., has expanded its market reach in the South by acquiring dealers in Florida and New Mexico. The company bought J.C. Baldridge Lumber, a 124-year-old institution in Albuquerque, N.M., that employs 75, generates more than $33 million in annual revenue. Stock has also acquired Adams Building Materials, a Winter Haven, Fla.-based dealer with seven locations that generated in excess of $118 million in revenue in 2004, virtually all of it from professional customers. The 44-year-old company employs 443 people.

SAN FRANCISCO — Building Material Holding Corp, a leading pro dealer and service provider, reported a 225% increase in net income, to US$54.6 million, for the six months ended June 30. The company’s sales during this period rose 32.7% to $1.27 billion. BMC Construction is in the due diligence phase of acquiring three more businesses: San Diego-based HnR Framing Systems; Campbell Cos., a contractor that provides installation for builders in Las Vegas and southern California, and Home Building Components, another framer.

BRENTWOOD, Tenn. — Tractor Supply Co. has signed a letter of intent to purchase Del’s Farm Supply Inc., a privately owned chain with 17 stores based in Lakewood, Wash. The stores, which operate mainly in the Pacific Northwest, specialize in rural lifestyle products, including the equine, animal and pet category. Del’s had sales in 2004 of approximately $34 million. The deal is expected to close in the third quarter. Tractor Supply expects to continue operating the stores under the Del’s Farm Supply name.

NEW BRITAIN, Conn. — Profits for Stanley Works rose by 7% in the second quarter to US$65.9 million, compared with US$61.4 million in the same period a year earlier. Earnings from continuing operations totaled $66 million, up from $58.8 million a year earlier. Stanley’s sales rose 9% to US$824 million.

SANTIAGO, Chile — Department store company Falabella, the parent of giant Chilean home improvement chain Sodimac, has made a deal with Grupo Corona to open stores and offer credit services in Colombia, part of its expansion throughout South America. Grupo Corona is a private, family-owned group specializing in manufacturing ceramics for house-building. Falabella will also increase its stake in Sodimac Colombia to 49% from 35%, based on the purchase of additional stock worth about $20 million.

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PETERBOROUGH, Ont. — A new look for Home Hardware dealers is materializing at a new store in this town in Central Ontario. The concept, called “Build a Better Home Store,” was designed for Home by Watt International. It’s getting a full promotional push, complete with a “hard hat tour” today, that provides a sneak preview of the innovations the new look will bring when the store opens its doors on Aug. 4, 2005.

The store, which is designed to cater to both contractors and DIYers, will feature Home’s enhanced kitchenwares department, Home Expressions, which includes products from home décor, housewares, kitchen and bath, lighting and storage solutions categories, all designed to enhance the home.

The new store will also feature a full-sized house built and displayed inside the store. Customers can walk through this “ideas house” to check out product demos and learn about different construction methods and techniques. The ideas house will feature door and window displays, siding and roofing materials, and will showcase five different kitchen displays. And taking a page from the big box book, there’s even a Coffee Time coffee shop right inside the store.

The comprehensive store package, the first for Home Hardware since 1996, was developed as more than just a décor package. The outside of the store has been brightened up, as greys are replaced by blacks and reds, and the entrance more clearly marked by bold signage overhead. Inside, the store will be warmed up with softer colours, such as sandstone coloured tiles on the floor, and cleaner colours on the walls, to replace the existing reds and whites. Other amenities include department signs, banner kits that hang from the ceiling, and even curved edges on much of the fixturing, all aimed at appealing more strongly to the female shopper.