TORONTO —Just 11 years after Home Depot arrived in Canada, its chief competitor has announced it will follow suit, even though no store openings are planned until 2007. By then, Lowe’s Cos. expects to roll out up to 10 stores, starting with the Greater Toronto Area. It wants to fine-tune the Canadian model there before rolling out as many as 100 eventually. The man in charge is Doug Robinson, president of Lowe’s Canada, whose first experience in Canada was running Beaver Lumber Co. for its parent, Molson, before it was sold off to Home Hardware Stores in 1999.

The competitive advantage it intends to bring – and which has worked effectively for it in the U.S. – is its bright, clean stores that appeal to female shoppers and give it an edge in its battle against Home Depot. Nevertheless, Lowe’s faces some distinct challenges here. First, Home Depot has got a big head start, with a presence in all 10 provinces through more than 120 big boxes. Rona inc. has 65 big boxes of its own, along with almost 500 traditional hardware stores and building centres. Rona’s multiple store formats and varied ownership model – including many dealer-owned big boxes – gives Rona a unique edge.

Another strong retail brand is Home Hardware, which represents more than 1,000 stores Canada-wide. And while not a direct competitor, the presence of Canadian Tire, whose retail division represents 465 stores and total sales in 2004 of $6.5 billion, just makes the retail landscape all the more crowded.

Industry observers have also questioned Lowe’s ability to secure good retail sites, which need anywhere from 10-13 acres to accommodate more than 100,000 sq.ft. of big box plus the space for a garden centre and parking.

Yet Lowe’s is doing a lot of things right in the U.S., providing a tough competitor there for Home Depot. The company’s first-quarter sales reached US$9.91 billion, up 14% from the previous quarter, while Home Depot’s sales, at US$18.97 billion, were up only 8%. Lowe’s same-store sales during the quarter were 3.8%, vs. Home Depot’s at 2.1%. So expect those retail smarts to come to Canada, as well.

“We have now formalized that process,” says Tom Donaldson, president of CanWel and Sodisco-Howden. “We have sent packages to interested parties and many of them have formally declared their interest. Once we have qualified who are the serious bidders for the Pro banner, they will be able to formalize their proposals and get back to us by the end of June.”

More than 500 independent hardware and building supply retailers across Canada operate under the Pro Hardware. Sodisco-Howden supports the banner program with a line of private label products, advertising and marketing programs, and an electronic catalogue. Approximately 200 more dealers, operating under the Ace banner, will continue to be managed by Sodisco-Howden, in association with Ace Hardware Corp. in the U.S.

Amar Doman, chairman of CanWel, adds that he wants to see this proposals process move along quickly. “I don’t want this to drag out. The dealers have waited six months already,” he says emphatically.

Qualified bids will be considered on the basis of three things: the “value proposition” they add to the Pro dealers; the security of the Sodisco-Howden revenue model, i.e., continued use of Sodisco-Howden as a supplier; and the offering price, if any, of such a partnership.

What’s actually for sale? The rights to the Pro banner, says Donaldson. The Ace banner will remain in the hands of Sodisco-Howden. But any deal for Pro must ensure that Sodisco-Howden continues to supply the banner. So any group with its own distribution may end up working out a kind of joint venture with Sodisco-Howden. Doman says bids from companies that do have their own distribution would certainly be considered. “Who knows what that strategy might be, but we can certainly look at that.”

The country’s largest hardlines distributors, aside from Sodisco-Howden, are Home Hardware and Rona. But some buying groups manage their own banners as well, and many of them include Pro dealers in their ranks. They, too, will receive packages from CanWel.

What about outside of the country? Could this be an opportunity for Ace to try once again to establish a presence in Canada? Doman would say only that they “haven’t disqualified any suitor,” and invites anyone that may have been overlooked to contact CanWel.

“CanWel’s core business is building materials and hardware distribution,” says Donaldson. “The Pro Hardware brand belongs in the hands of a group who understands branding at the retail level and can increase the value proposition to dealers and consumers.”

CanWel converted to an income fund on May 18, 2005.

“Home Depot has always been very respectful of every competitor it has,” says Annette Verschuren, in an exclusive interview with HARDLINES. “And it has more than one in Canada already,” she adds, referring especially to a couple of retailers that don’t have parallels to the competitive landscape Lowe’s is used to in the U.S. “Don’t underestimate Home Hardware and Canadian Tire in Canada.”

Verschuren says that a healthy respect for those competitors, and the likes of Rona inc., which already has 65 big boxes of its own, keeps Home Depot on its game. “I think [competition] is actually important to get ahead of the customer.”

Lowe’s expects to open 6-10 stores in its first year, in the Greater Toronto Area (Home Depot already has 35 there) with plans to roll out up to 100 nation-wide over time. Home Depot is planning 20 openings and one relocation this year, for a total of 137 by the end of the year. Rona plans 6-10 big box openings of its own this year, and another 6-10 openings of traditional building centres.

Verschuren questions Lowe’s ability to “greenfield” its expansion in Canada, citing the difficulty in finding good real estate. In so doing, she has been hinting at the possibility of an eventual takeover of Rona inc. by Lowe’s. Although Rona’s varied store formats would make such a takeover unwieldy for Lowe’s (and it has spent recent years unloading its traditional building centres in the U.S.), the inference has had the effect of undermining the value of Rona’s shares, which were trading as low as $24.70 on Friday before closing at 24.90, down from a 52-week high of $27.10.

The fifth-largest pro dealer in the U.S. generated US$2.06 billion in sales and US$51.6 million in net income last year, the latter being considerably higher than in the previous four years. Through the first quarter of 2005, BFS reported an US$18.9 million loss on sales of US$509.3 million that were up 18.6%. Its yards generated an average of US$32.6 million in sales in 2004, and the company got one-third of its revenue last year — US$680.4 million — from manufactured products. Sales to the 10 largest production builders rose to US$451.8 million in 2004 from US$260.8 million in 2001.

Hardware stores have been the biggest losers, while big boxes continue to appeal most strongly to women. Meanwhile, the efforts of one of Canada’s leading hardlines retailers, Canadian Tire, to woo women more effectively, is beginning to show positive results, according to the findings of the survey.

(“Women in Home Improvement,” a survey by ACNielsen Canada exclusively for HARDLINES, appears in the latest issue of Hardlines Quarterly Report, which is published by Hardlines. For more information, contact Isabel Bisong at 416-489-3396, or isabel@hardlines.ca.)

CHICAGO — Sears Holdings Corp. suffered a loss in its first quarter , its first quarterly filing since the buyout by Kmart of Sears, Roebuck and Co., which formed this new retail entity and the third-largest retailer in the U.S. Quarterly revenues were US$7.6 billion, or US$12.8 billion after including results from Sears for the full quarter. Sales fell 2.3% at Kmart stores, as bad weather cut into seasonal sales. Revenue at Sears stores was up 0.5%, thanks to an increase in its home service business.

MOOREVILLE, N.C., — This fall, Lowe’s Home Improvement Warehouse will broaden its in-stock assortment of major appliances when it adds digital kitchen appliances bearing Samsung’s brand to its 1,100-plus stores in the U.S. Lowe’s will initiate the program in September by stocking Samsung’s side-by-side and bottom-mount refrigerators. The appliance category is one of Lowe’s fastest-growing sectors. Last year, it accounted for US$4.08 billion in sales, or 11% of the retailer’s total revenue.

OAKVILLE, Ont. — Moen has made its entry into the luxury market with a new brand for upscale kitchen and bath décor, “ShowHouse.” Targeting specialty kitchen and bath outlets, the brand features eight different lines, including three complete powder room collections, a full kitchen and bath suite, and a line of kitchen and prep faucets. In Canada, Ted Harrison, Moen Canada’s director of brand development, is managing the line. Moen is part of Fortune brands based, in Lincolnshire, Ill.

VANCOUVER — West Fraser Lumber won a victory in the softwood lumber dispute with the U.S. when a NAFTA panel ordered the U.S. Department of Commerce to revoke the anti-dumping duty order against the company. As a result of last week’s ruling, West Fraser is entitled to a refund of more than US$24 million, plus interest, on moneys deposited since May 2002. In making its ruling, which confirmed an earlier finding that West Fraser does not dump lumber into the U.S., the NAFTA panel rejected U.S. claims that West Fraser was not entitled to a refund. The United States has 30 days to comply with the NAFTA panel’s ruling.

Although the value of residential permits rebounded in April, this gain was offset by the first decline in three months in the non-residential sector. As a result, the overall value of building permits issued by municipalities fell 2.6% to $5.0 billion in April. Year over year, construction intentions in April were 8.9% higher than the average monthly level in 2004.

Employment rose for the second consecutive month, with the addition of an estimated 35,000 jobs in May. This leaves employment up by 90,000, or 0.6%, so far this year, similar to the increase over the first five months of 2004. The unemployment rate remained unchanged at 6.8%, as more people entered the labour force.

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Taiga’s move to convert to an income fund type structure mirrors a similar move by one of its chief competitors, CanWel Building Materials. This distributor, which sells a broader range of building materials than Taiga, converted to an income fund on May 18. Like Taiga, CanWel issued both a primary and secondary share offering, raising a total of $125 million. That offering has been done successfully and last Friday CanWel was able to complete its plan of arrangement to convert from a corporate entity into an income fund, complete with the necessary court and regulatory approvals.

The Taiga IPO is conditional upon completing its conversion to an income trust. The size and pricing of the offering has not been determined, and will depend upon market conditions at the time of the offering. But based on Taiga’s results for its year ended March 31, 2005, Taiga expects that its cash available for distribution to holders of the stapled units would be approximately $36.5 million, based on a 95% payout ratio, and assuming a $50 million treasury offering.

Budden is fiercely proud of Chester Dawe’s independent status. “There is a very strong role for regional independent players,” he says, “and that’s certainly the case here in Newfoundland.”

His company was a founding member of AWARD back in 1981, and he wonders aloud why the group had to fold. “I think it’s sad and a shame that it won’t continue. The regional presence of a buying group served the members well. That’s the reason AWARD was founded in the first place.”

After stints with several retailers – including Payless Cashways, Montgomery Ward and HomeQuarters Warehouse – Pond found a home at Lowe’s, which embraced his strongly held beliefs in the power of branding and database marketing. In the process, Pond helped Lowe’s create an image for itself and its stores as the cleaner, brighter, friendlier and less-frenzied alternative to its rival Home Depot.

That clean, bright image is a competitive edge Lowe’s would likely try and offer if it in fact expands to Canada. The company has been hinting at making a play to become a more international player, even as its chief rival, Home Depot, sets up offices in China and sniffs out opportunities in Europe. A move by Lowe’s into Canada would thrust it into an already fiercely competitive marketplace, where both Home Depot and Rona are battling for retail supremacy. Nonetheless, such a move would represent a cautious first step that would keep Lowe’s first international stores close to home.

Meanwhile, the retailer is moving to fill the gaps left by Pond’s departure. Taking over his role will be Larry Stone, a 36-year company veteran who is Lowe’s senior vp-operations. In his new capacity, the 53-year-old Stone will oversee the company’s merchandising, marketing, store planning and development. This shift is something of a surprise because Stone has had very little merchandising experience during his tenure at Lowe’s.

Nick Canter, 54, who currently manages Lowe’s operations in its North Central division, will replace Stone and assume the title executive vp-operations. He is also responsible for Lowe’s commercial and installed sales businesses, which the retailer has identified as two of its growth engines. Canter previously has served as a merchant for building materials and millwork.

By announcing his retirement, Pond will walk away from a job that paid him US$575,000 in salary in 2004, plus US$1,042,786 in bonuses and US$1,135,000 in deferred stock awards. At the end of last year, Pond owned 431,020 of Lowe’s common stock.

Both dealers declined to comment about whether they’ve entered into an acquisition agreement, or even if they’ve been talking about one. Spokesman Jerry Shields reiterated Home Depot’s standard response that “we don’t comment on speculation and rumor.” Jerry Johnson, Williams Brothers’ chairman, said that “it’s all speculation and I can’t say anything about it.” He declined to comment as well about whether there have been any negotiations between his company and Depot.

The industry has been flush with rumors about Home Depot buying its way into the pro side of the business for a number of years. Indeed, Home Depot’s May 2004 acquisition of White Cap Industries gave Home Depot a substantive foothold into that sector, although White Cap caters as much to commercial accounts as it does residential builders and remodelers. And there was a lot of talk — none of it substantiated — about Home Depot’s interest in buying Builders FirstSource, which became moot when BFS decided to take itself public.

If it were to acquire Williams Brothers, Depot would be adding another arrow to its pro-focused quiver. In 2004, for example, it installed its Pro Initiative program — which beefs up products and services specifically for contractors — to 207 stores, bringing the total number of Home Depots with this program to 1,563. (An estimated 35% of Depot’s US$73.1 billion in revenue last year came from pros.) The company will add the Pro Initiative to 165 stores in 2005.

In addition, its Home Depot Supply division currently operates five subsidiaries — Apex Supply Company, Your Other Warehouse, The Home Depot Supply, Inc., White Cap Industries, Inc. and HD Builder Solutions Group — that support its business with these customers. Last year the company reported that its “services” revenue — essentially its installed sales, which are handled by captive installation companies and subcontractors — rose 28% to US$3.8 billion.

Williams estimates that B&Q’s store is selling into a 10 trillion won (US$9.9 billion) home improvement market. He added that B&Q intends to open stores across South Korea.

News of B&Q’s expansion into Korea broke only days after its parent company, Kingfisher plc, reported that B&Q’s sales in China for the three months ended April 30 increased 38.7% to 44.1 million British pounds (US$80 million), and that its same-store sales for the quarter grew 4%. B&Q entered China in 1999, and now operates 22 stores in that country. It plans to open 12 more stores there this year, and another 80 by 2009.

Asia is one of the bright spots for Kingfisher, which reported that its overall quarterly sales from B&Q and Castorama, which operate a total of 600 home centres in nine countries, increased 2.2% to 1.94 billion pounds. Same-store sales for these stores declined 5.6% and profits fell 15.6% to 125.9 million pounds.

NEWBERRY, Ont. — Monte McNaughton, store manager, McNaughton Home Hardware Building Centre, has garnered an award in the 2005 Young Retailer of the Year program. When McNaughton’s father first bought the business in 1988, sales were $400,000. With Monte’s help, annual sales now top $12 million in the town of 500 residents. The success is due, in part, to the many niche departments and categories the store offers to draw traffic from the larger surrounding cities. A recent revamp of his flooring department brought sales from $20,000 in one year to $125,000 in the first month of January 2005. The store also sells and installs custom kitchen packages, averaging three or four sales per week.

HOFFMAN ESTATES, Ill. — Kmart stores will start carrying Craftsman tools, part of a move by Sears Holdings Corp. to feature the private-label brands of Kmart and Sears in each other’s stores. A rollout of gift displays of Craftsman tools will take place in 365 Kmart stores in time for Father’s Day. The display will feature about 10 Craftsman products initially, merchandised in a gift display, including a laser level, ruler, floor jack, and a cordless screwdriver. Some Kmart stores are also carrying Sears’ own brand of Kenmore appliances, as well as Craftsman.

OAK BROOK, Ill. — Ace Hardware, the dealer-owned buying group, is slowly but surely entering the hybrid transportation market as a way to reduce rising fuel costs related to its delivery of products from its distribution centres to its members. The company recently completed a six-month test at its Princeton, Ill. distribution centre, where it’s using a blend of diesel fuel and crop oil (such as soybean) to power trucks it leases from AG View FS and Ryder Transportation Services.

EAU CLAIRE, Wis. — A federal judge in Milwaukee has ordered Menard’s to file reports that provide detailed demographic breakdowns of its 27,000 employees at its 200-plus stores and its headquarters here. The U.S. Equal Opportunity Commission said that Menard’s, the third-largest home improvement dealer in North America, admitted in court in May that it had not filed reports, which are required by law, for the years 2000 through 2004, according to the Associated Press. Menard’s has been the target of a number of legal complaints and lawsuits of late. Last month, the company pleaded guilty to a misdemeanour water pollution charge. And Internal Revenue Service ruled recently that the dealer owed US$5.9 million in back taxes and penalties.

BENTONVILLE, Ark. — Wal-Mart Stores reported May’s net sales reached $23.42 billion, up 9.3% from US$21.43 billion a year earlier. Sales by Wal-Mart stores were up by 9.1% to US$15.7 billion, and Sam’s Club was up 4.4% to US$3.06 billion. International sales jumped 13.6% to US$4.66 billion. Same-store sales at Wal-Marts and Sam’s Clubs grew 2.5% in May, compared with a 6% increase last year. Year to date, retail sales grew 9.8% to US$96.07 billion, with same-store sales up 2.9%.

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Women either singly or jointly with a significant other, are involved in 45% of the decision-making as to where to shop. That’s a significant increase from 2001, when the level was only 35%. Hardware stores remain a choice for women, thanks to their convenience, a characteristic highly valued by most women surveyed. However, in many cases, they value a one-stop shopping experience, which only the wide selection available in a big box can provide.

Meanwhile, the efforts of one of Canada’s leading hardlines retailers, Canadian Tire, to woo women more effectively, is beginning to show positive results, according to the findings of the survey.

The first choice for shopping for home improvement projects and products has changed since 2001, when the first “Women in Home Improvement” survey was conducted. Hardware stores have been the biggest losers, while big boxes continue to appeal most strongly to women. Although their overall popularity has in fact declined since 2001, big boxes remain the destination of choice for women with children.

(“Women in Home Improvement,” a survey by ACNielsen exclusively for Hardlines, appears in the 2Q edition of our sister publication, Hardlines Quarterly Report. For more information, <click here> or contact Isabel Bisong here at the World Headquarters: Isabel@hardlines.ca or 416-489-3396.)

In the same meeting, John Morrissey was elected COO and general manager of AWARD, effectively replacing Tom Smith, who exited as head of the group following an unsuccessful proposal forwarded by Rona on March 3.

Tim-BR-Marts has been at the centre of an effort to consolidate the many buying groups extant in Canada. Besides the addition of Homecare’s 150 stores, the group has added a number of other independents, including Nelson Lumber, a major independent in Saskatchewan, with nine stores, which departed Tim-BR-Marts about three years ago. The group now comprises some 400 locations representing more than $2 billion in sales per year.

But like each of TruServ’s banners, which also include True Value and V&S Variety, Country Depot is being subjected to a Best Practice program. The metrics of a single store are scrutinized on a weekly – and daily – basis. Everything from traffic, basket size, and customer closing ratios are measured, in an effort to arm independent retailers in the face of mounting competition from large-surface retailers such as Wal-Mart and Sobeys. And the store that is the test case for Country Depot’s best practice program is here in Kingston, mid-way between Toronto and the nation’s capital, Ottawa.

From this sophisticated benchmarking exercise have come some simple results. For example, the Kingston Country Depot, which weighs in at 6,000 sq.ft. of retail, introduced shopping carts last winter. “People were terrified at first,” says Marie Havekes, who, with her husband Bill, owns the store. Other changes, though more subtle, were likewise accepted. For example, with the strong emphasis on pets and livestock in the store, a section devoted to accessories for dogs and cats was put right at the front, generating more impulse purchases. But merchandise for animals is throughout the store. At the very back is the tack shop, complete with wooden rails and a metal corrugated “roof” overhanging from the back wall. “People don’t hesitate to spend money when it comes to their pets – and horses,” says Havekes.

Another growing category is birds and bird feed, especially with older customers. “Retirees spend a ton of money on birds.”

While the store already has an extensive lawn and garden department – including a 2,500-sq.ft. outdoor garden centre – TruServ has been encouraging Bill and Marie to take on more decorative garden products, something that was met with some resistance at first. But despite her admitted skepticism, Marie says the gift and décor items are gaining in popularity.

The timing for the conversion is good, says Bill Kushlick, president and COO of Taiga. “Lots of companies in Canada are going to an income trust and we think that it’s a good investment strategy,” he adds, noting that low interest rates combined with aging baby boomers looking for higher yields provide a good milieu for the move.

CanWel, another B.C.-based building materials distributor, recently made the switch to an income trust structure, as well.

Taiga will float a treasury offering and secondary offering of stapled units, totaling approximately $110 million. Following the reorganization and treasury offering, Taiga expects that the new company will have approximately 36-37 million issued and outstanding stapled units. Net proceeds of the treasury offering will be used to reduce indebtedness under Taiga’s existing credit facilities.

Taiga has retained BMO Nesbitt Burns Inc. to act as its financial advisor in connection with the reorganization, which is not expected to affect the business and operations of Taiga. (See “Companies in the news” for Taiga’s year-end results–MM)

BrandWeek reports that Ford developed the program, called “Bring it Home,” in-house with help from the advertising firm JWT in Detroit. The campaign will include network television, print, point of sale and online ads. Ford will also expand its relationship with Cabela’s, setting up truck displays in the outdoor outfitter’s stores, according to Edmunds.com.

Brandweek quoted Phil O’Connor, the F-Series’ marketing manager, who explained that the national effort is an extension of a program Ford and Depot conducted last year in Atlanta, Dallas and north Florida. That promotion, he said, featured a chance to win a Ford F-150 SuperCrew Lariat 4×4 or a US$10,000 Depot gift card. Last fall, Ford showcased its next-generation F-series Super Duty truck in nearly 400 Home Depot stores in six markets nationwide. The event led to 7,000 test drives and more than 500 truck purchases.

O’Connor claimed that his company’s market research shows that DIYers are 43% more likely to buy a pickup truck than the average consumer.

“Our customers have varying needs, and it is our business to ensure that they have the products and services they need to suit their lifestyles,” said Bob Gfeller, senior vice-president for Lowe’s, in a prepared statement.

TORONTO – Canadian Tire Corp. has struck an exclusive distribution deal to sell a new line of Troy-Bilt outdoor power equipment. The line includes mowers, tractors, leaf blowers and chain saws.

EAU CLAIRE, Wis. — Menard’s, the third-largest home improvement dealer in the U.S., pleaded guilty to discharging pollutants in state waters without a permit between September 2001 and September 2003. The misdemeanor could cost the retailer anywhere from $1,000 to $2.5 million in fines, according to Dawn Sands, Menard’s attorney and spokesperson. The state dropped a felony count of disposing hazardous wastes without a license after an Eau Claire County judge expressed doubts prosecutors could support the more serious charge. Sands asserts that the discharge from Menard’s distribution center here was unintentional and was shut off as soon as state officials alerted the company to the problem.

ISSAQUAH, Wash. – In its third quarter ended May 8, Costco Wholesale Corp. reported net sales of US$11.75 billion, up 10% from US$10.67 billion during the third quarter of fiscal 2004. Same-store sales were up 7%. Net income for the third quarter increased 6% to US$209.8 million, from US$198.7 million during the third quarter of fiscal 2004. Net sales year-to-date increased 10% to US$35.50 billion, from US$32.31 billion. Same-sales during the first thirty-six weeks of fiscal 2005 increased 7% over the prior year’s level.

LONDON – Kingfisher, which owns the DIY chains B&Q and Castorama, saw sales rise in its first quarter by 2.2% to £1.94 billion, even as same-store sales fell sharply by 5.6%. Retail profits also fell, by 15.6% to £125.9 million. In the U.K., Kingfisher’s B&Q division experienced a 2.8% drop in sales, to £1 billion, with same-store sales down 7.7% and profits off by 16.5% to £73.2 million. In France, the Castorama business had sales of £382.3 million, while profit fell 27.3% to £20.2 million and same-store sales declined by 4.4%. The French Brico Depot chain, however, enjoyed a sales increase of 23.1%, to £269.3 million, and the B&Q business in China grew 38.7% to £44.1 million.

TORONTO – Sales at Hudson’s Bay Co. for the first quarter ended April 30 declined 1.4% to $1.48 billion, reflecting a comparable decline in square footage operated by the company, and sales declines in the Bay (excluding Home Outfitters) and Zellers. The drop in sales deepened the department store chain’s loss to $41 million from $23 million. Same-store sales in the first quarter of 2005 decreased 2.1% at the Bay (including Home Outfitters) and increased 0.4% at Zellers.

OTTAWA – Costco Canada has launched a website for shoppers, www.costco.ca, with more than 1,000 products being offered. Products available range from computers and sports equipment to furniture. Approximately 80% of the products featured on the site are different than those offered in the warehouse, and there’s more emphasis on seasonal and off-season items. As new products are added, 3,000 products are expected to be available online within the next few months.

NIAGARA, Ont. – Direct Energy Essential Home Services, North America’s largest
competitive energy and home services retailer, is expanding its list of at-home services, with the launch of its Plumbing and Drain service in the Niagara region. Homeowners
here can call Direct Energy for plumbing and drain servicing, and sign up for protection plan for problems like a clogged drain or broken pipe.

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LAS VEGAS — Throngs of dealers, distributors, traders and other visitors streamed through two halls (one with aisles spanning 1,700 feet) at the 60th annual National Hardware Show, which concluded here on Thursday. They came to view the latest and greatest in home improvement fare being offered by more than 3,200 exhibitors, the most to participate at this event since 1999, and significantly higher than the 2,000 that exhibited at last year’s convention.

Cappiello noted specifically that the number of international and lawn and garden exhibitors this year grew by 15% and 29%, respectively, over 2004’s convention, which was the first that Reed managed independently after severing its long-standing management partnership with the American Hardware Manufacturers Association to relocate the show from Chicago.

The exhibit space that Reed sold this year in the Las Vegas Convention Center and in the Sands Expo & Convention Center (where lawn and garden vendors were housed) was up 39% over last year, to 681,191 sq.ft. In 2006, Reed intends to consolidate the show into the Las Vegas Convention Center, said Cappiello, with lawn and garden in the south hall; hardlines and international exhibitors in the central hall; and housewares, plumbing, electricals and gourmet exhibitors in the north hall. (The 2005 event was the first time that the Gourmet Housewares Show combined with the Hardware Show.) Cappiello projected that Reed will book 850,000 sq.ft. of exhibit space for next year’s event, scheduled for May 9-11.

It was also a magnet for the Canadian industry, with buying teams from every major – and many key regional – retail groups on hand. “From a Canadian perspective, it’s a very good show,” said Paul Crawford, managing director of King Marketing in Richmond, B.C. “All of the Canadian buyers are here.”

Attracting visitors from countries as far afield as Germany, New Zealand, China, India and Chile, the show was also an important spot for making new contacts. “We met a lot of new potential customers, so it’s good for us,” said Gaetan Martel, executive vice-president of RCR. “It’s a lot better than the old Chicago show.”

The tool category, in which B&D remains a major player, was especially vibrant at the convention, with several suppliers — including Kawasaki, Dodge (with its “Hemi” brand) and Positec (through its Rockwell and Worx brands) — launching multi-product power tool lines. Indeed, one of the distinguishing features of this year’s show was the sheer number of new vendors in several categories — work gloves, lighting, decorative bath, lawn and garden — vying with more established suppliers. Cappiello said that Reed Expo has been actively soliciting smaller and mid-sized vendors to participate in the show.

During this three-month period, Lowe’s opened 27 new stores, while Home Depot opened 21. In the quarter, Home Depot’s services business increased 16%.

In separate company news, Depot announced that it would deploy SAP, the computer software provider, for retail merchandising and supply-chain applications as the retailer’s next step to transform itself “into a more information-based company,” said chief information officer Bob DeRodes. Over the past three years, the chain has spent more than US$1 billion overhauling its information technology infrastructure, according to Information Week magazine.

TSC is a specialty farm and hardware retailer with 25 stores in Ontario. TD Capital Canadian Private Equity Partners is an investment group of TD Capital, the private equity arm of TD Bank Financial Group. TDCCP bought out two of TSC’s partners, John Kropp and Gordon Illes, taking an equity position in the company. The third partner, Roy Carter, remains as TSC’s president and CEO. While Kropp will pursue other interests, Illes will return after a brief hiatus to oversee TSC’s new-store development.

“It’s a huge opportunity for TSC, and for TSC’s employees, to harness the potential of the company to expand in Ontario – and beyond,” says Carter.

Adding new stores and expanding into new markets is key to TSC’s strategy. While no new stores are being added this year, four have already undergone major renovations, and two more will be refitted before year’s end. By 2006, the company wants to start opening at least six stores a year. Carter says out-of-province expansion is also in the cards within the next two to three years, though he wouldn’t specify which direction that expansion would go.

The company stated that it recorded US$86 million of expense in the first quarter related to the anticipated disposition of its interest in the underlying real estate and US$20 million of expense related to inventory markdowns. The retailer claimed that its remaining 34 Expos are profitable and will remain open.

Citing results from a recent survey conducted by the NGA, Butterworth offered his insights into the lawn and garden market as part of a panel of international experts that spoke at last week’s National Hardware Show, held here May 17-19. The panel, sponsored by Hardlines, was just one part of a larger conference series that ran concurrently with the show. It was also one of the best attended, as retailers and vendors from around the world sat in to hear from Butterworth and his fellow presenters, Friedericke Sandt, president of Planto, a German manufacturer of garden tools and accessories; and Rob Lunan, manager of garden and gift lines at Lee Valley Tools, a Canadian retailer and catalogue seller of specialty hardware, tools and gardening products.

The panel was moderated by Hardlines’ own contributing editor, John Caulfield.

The flatness of the market, is a challenge for lawn and garden retailers, but a bigger challenge may be the consolidation within the industry, Butterworth said. Big boxes, including Home Depot, Lowe’s and Kmart, now account for 60% of the market.

And while these retail giants can be applauded for raising awareness of the category through their advertising efforts, they are also responsible, Butterworth said, for “dumbing down” the category. To combat that, “we need to keep developing new plants, new techniques and new garden styles” to inspire gardeners and would-be gardeners.

Sandt and Lunan both agreed that the best way to differentiate from discount sellers is by offering quality products. Consistent adherence to quality will reinforce a brand’s own identity, they said.

A slight increase in mortgage rates, eroding pent-up demand, slower employment growth, and waning spill-over of buyers from the existing home market are all considered factors that will help cool the market this year and next.

Existing home sales will register their second best year on record, with 441,100 units in 2005. Although this represents a 4.3% decrease from the previous year, it still constitutes the second-highest level on record. According to the report, a rise in new listings will help keep resales above the 400,000 mark for each of the next two years.

However, the rising price of houses over the past three years, and an expected rise in mortgage rates, will push mortgage carrying costs higher, resulting in a gradual easing in demand.

CALGARY – Nelson Lumber/SRI Homes has rejoined Tim-BR-Marts Ltd. The company, once one of Tim-BR-Marts’ largest and most loyal members, left the group more than three years ago to join Winnipeg-based Sexton Group. Nelson becomes the first dealer to rejoin Tim-BR-Marts, on the heels of the group’s attempts to consolidate the buying group landscape in Canada. Tim-BR-Marts merged the operations of its sister group, Homecare (TIM-BR Mart Ontario), at the end of 2004.

TORONTO – Hudson’s Bay Co. has updated nine of its Zellers discount department stores to incorporate the features of the latest Zellers prototype. They are in Brantford and Windsor, Ont.; La Salle, Chateauguay, and Ste-Foy, Que.; Saint John, N.B.; Dartmouth and Sydney, N.S.; and Red Deer, Alta. The prototype stores, which now number 176, are typically 100,000-plus sq.ft., all on one floor. They feature wider aisles, improved lighting, in-store signage, and other features that may include, depending on the store: grocery sections called Neighbourhood Markets; a new Diner restaurant that features take-out meals; a pharmacy and hair salon.

MEMPHIS – Hardware wholesaler Orgill is riding high on its newly minted status as a truly national player. Orgill’s recent installation of a distribution center in Utah gives the wholesaler the infrastructure needed to supply independent dealers right across the country. Last year, Orgill added 1.3 million sq.ft. of warehouse space. Sales last year were up a healthy 16%, while sales by existing dealers were up 12% (Orgill does not disclose its profits).

SHANGHAI – Metro A.G., the world’s number three retailer, is taking advantage of looser rules over foreign ownership in China to increase its share of a joint venture there. At the same time, Wal-Mart announced the opening of its 46th store in China, a supercenter in the nation’s capital of Beijing. Metro has assumed 90% ownership of its joint venture with its Chinese partner. Metro, Germany’s largest retailer, is jockeying for share of the exploding Chinese consumer market with U.S.-based Wal-Mart and French retail giant Carrefour S.A. Wal-Mart’s first store in the Chinese capital of Beijing, opened last week. Located in western Beijing, the supercenter, Zhichunlu Wal-Mart, covers an area of 18,000 square metres and stocks around 20,000 items.

BOISE, Idaho – At the end of last week, Boise Cascade Co. decided to cancel an initial public offering, which was intended to raise US$400 million. The firm had already lowered the price of the shares earlier in the week. However, adverse market conditions, including increasing paper prices, were thwarting the company’s efforts.

NEWTON, Iowa – Maytag Corp., struggling to defend its brand against Asian competitors and tough customers like Home Depot, has entered into a definitive agreement to sell all its outstanding shares to an investor group led by the private equity firm Ripplewood Holdings LLC, which wants to acquire all outstanding Maytag shares in a cash merger for US$14 per share, for a deal worth approximately US$2.1 billion.

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Wayne Sales, Canadian Tire’s CEO, said that the company’s earnings were impacted negatively by two factors: product shipments to Canadian Tire stores that did not keep pace with retail sales; and by “non-operating factors,” including the $5.3 million cost associated with the early redemption of a medium-term note. The company also reported a $4.3 million increase in its advertising expenses for the quarter.

Shipments of products to Canadian Tire’s stores were lower than in the first quarter of 2004, partly because of the timing of store openings, but also because dealers have been reducing their inventories to get them more in line with seasonal demand.

This year, Canadian Tire plans to open 20 stores, the majority of which will be to the specifications of its new Concept 20/20 format, and to retrofit another 12 to 15 stores to that format. At the end of the most recent quarter, Canadian Tire operated 458 stores, including 29 20/20 units and seven Canadian Tire/Mark’s Work Wearhouse combination outlets.

During the quarter, Rona’s wholesale sales grew by 10.3% to $417 million, while its retail sales increased 8% to $477.8 million. Cash flow from its wholesale sales rose 15.1% to $14.9 million, and by 13.9% to $22 million from its retail sales.

The company also completed a 2-for-1 stock split.

On May 4, Rona entered into an eight-year agreement that guaranteed its sponsorship rights for the 2010 Olympic and Paralympic Winter Games, as well as its sponsorship of the Canadian Olympic Team in Turin, Italy, in 2006; in Beijing, China in 2008; in Vancouver in 2010, and during the 2012 games, whose venue has yet to be determined. Rona’s investment in cash and products for those sponsorships is valued at $68 million.

“We’ve developed a program where we can deliver a complete hardware assortment,” says Dave Leonzio at TruServ Canada. “We can provide a basic general merchandise package to small and medium sized grocery stores.”

Started in January, the program is still in its preliminary stages, says Leonzio, with a test in Big Way Foods in Tuelon, MB. In addition, 12 of TruServ’s V&S stores in Alberta are carrying groceries. “The program gives these dealers, which are serving small-town markets, categories of product to put in their stores that they didn’t have before, so their customers don’t have to go down the street to get that item.”

Pharmacy is another retail sector that TruServ is pursuing. In fact, for the past three years, the company has been supplying general merchandise to three V&S stores in New Brunswick that also carry the Pharmasave drug store banner. The experience has given TruServ some insights into what kinds of products work in that kind of retail environment. “It helps us understand a little better what a pharmacy can be,” Leonzio says.

The expansion into more lines occurred over time, in an opportunistic, rather than strategic, way, Koza says. As customers asked for new lines, Can-Save would take advantage of the opportunity to increase business with those customers. Products included everything from sandpaper and batteries to caulking. “Anything we could get our hands on, we’d take on. But not any more.”

The kitchen program has got some unique features, which exemplify Can-Save’s mandate to add value to its role as a supplier. The program has 2,000 SKUs, and five designers are on staff, with nine sales reps on the road – all to give the independent dealer the support they need. At the heart of the program is the establishment of a sense of trust with dealers looking for a reliable, service-driven supplier.

To solidify those relationships, potential new dealers are invited to get a tour of Can-Save’s facilities, then get dinner and stay overnight, courtesy of Can-Save. About 14 tours a week are conducted. In fact, no new account will get credit from Can-Save until they’ve taken the tour.

“Every dealer has had a bad experience with a kitchen sale,” explains Koza. To head that off, a strong relationship with each dealer helps that dealer understand how Can-Save can help him deliver a kitchen installation – without the headaches.

The focused strategy has paid off, as fewer hardlines have enabled Can-Save to increase sales overall, backed by training and product knowledge in its core categories.

Sears didn’t comment on the timing of its decision to sell Orchard, except to state that it was “pursuing alternatives to provide Orchard Supply Hardware with the capital to grow its store base.” To handle the Orchard deal, Sears has retained Citigroup Global Markets and Lehman Brothers as financial advisors. Ted McDougal, Sears’ vp-public relations, told HARDLINES that this decision would not affect Sears Holdings’ 163-unit Sears Hardware operations. In April, the company disclosed that it had added appliances to another 27 Sears Hardware outlets in seven states, bringing the total number of those stores offering appliances to 115 units. Earlier this year, it launched its first Sears Hardware stores in Canada, as well.

Nine years ago, Sears bought Orchard — then a 61-unit operation — for $415 million, and attempted to meld Orchard with Sears Hardware. The two dealers never really meshed, though, partly because Orchard’s stores, which range from 41,000 to 60,000 sq.ft. and stock 45,000 SKUs, are much larger and better assorted than Sears Hardware units, which, at 22,000 sq.ft., are less than half the size on average. Several years ago, Sears experimented with using Orchard’s store format model to expand a number of Sears Hardware in the Northeast to as large as 55,000 square feet.

Gary Balter, a retail analyst with UBS, was widely quoted as estimating that Orchard would fetch $300 million – well below the price Sears paid for it. He also suggested that Home Depot and Lowe’s might be potential buyers. That speculation makes some sense, in that both big boxes are already testing smaller-format versions of their own stores. However, Home Depot has been moving more aggressively into the pro sector. It may also have its eye on bigger fish than Orchard, as rumors persist that Home Depot covets B&Q, the hardware and home improvement division of U.K.-based Kingfisher, despite denials of any impending deal by Kingfisher officials. (See story elsewhere in this issue)

The Canadian Hardware and Housewares Manufacturers Association will host its annual Maple Leaf Night/Soirée Feuille d’érable on Tuesday, May 17, at the Curve Night Club-Aladdin Resort & Casino. Time: 5:30-8:00 p.m. More than 100 vendors are already signed up to rub shoulders with Canadian Tire, Fedco, Home Hardware, House of Tools, BMR, Sears, TruServ, TSC, Zellers, and more. For more info, contact: CHHMA, 416-282-0022.

Hardlines, in conjunction with the Presidents Council, present “Global Retailers: Best Practices from Around the World,” Wednesday, May 18 at the Las Vegas Convention Center. Time: 3-4:30 p.m. Featuring: a world-class retail panel: John Herbert, general manager of the European association of DIY retailers; Robert Collins, Director of International Sales and Retail Development, Ace Hardware Corp.; Harald Lux, head of Emil Lux in Germany; Jim Lowe, director of strategic research for one of the leading home improvement retailers in England, Focus DIY. Michael McLarney, Editor & Publisher of Hardlines, will serve as moderator.

Hardlines, in partnership with the National Hardware Show, presents an International Reception at the Las Vegas Convention Centre (immediately following the “Global Retailers” panel). Time: 4:30-5:30 p.m. Want to connect with buyers from the U.S., South America and overseas? This will be the absolute best place in Las Vegas to do it! For more info, click here.

If you want to meet some top international buyers one-on-one, you should definitely sign up for “International Buying Day,” organized by the Presidents Council, on Monday, May 16, the day before the show starts officially. The Buying Day is designed to provide an efficient forum for suppliers who want to expand their market share. Because of the individual appointment format, the Buying Day is limited to 40 suppliers, who will have individual meetings with the following participating retailers: B&Q – U.K.; Focus DIY – U.K.; Globus – Germany; Homebase – U.K.; Komeri – Japan; and Sodimac – Chile. Cost is US$2,000 per vendor. click here to receive more details.

HOUSTON — Garden Ridge, the home décor dealer with 35 stores in 13 states, has emerged from bankruptcy protection under Chapter 11 with a reorganization plan that a Delaware court approved late last month. That plan could move forward after unsecured creditors agreed to accept a distribution of preferred stock. The company, based here, can operate with a $25 million equity investment by Three Cities Research, a New York-based investment firm, and an $80 million credit line from Bank of America and GE Capital.

BENTONVILLE, Ark. – Wal-Mart reported a 14% increase in first-quarter earnings, which grew to $2.5 billion from $2.2 billion during the same period a year earlier. Sales hit $70.9 billion, up 10% from $64.76 billion. Total revenue including sales and other income grew to $71.7 billion, up from $65.4 billion. Same-store sales were up 2.9%.

MINNEAPOLIS – In its first quarter ended April 30, Target’s earnings reached $494 million, up 15% from $432 million a year earlier. Sales were up 13%, rising from $10.18 billion to $11.48 billion. Same-store sales were up 6.2%.

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“That puts retail giants such as Home Depot, Rona and Canadian Tire in a favorable position for long-term growth, especially as consolidation finds almost half the industry in the hands of these four,” he continues.

“Canada’s Top Four” appears in the latest issue of Hardlines Quarterly Report, the sister publication to Hardlines. Call us for info on how to subscribe!

Rona bid aggressively to get the sponsorship from Home Depot, in a deal valued at $68 million. Besides providing support for a distinctly Canadian event, to complement its all Canadian marketing efforts, the sponsorship is expected to give Rona a big lift in awareness in Western Canada. “It’s important to establish us in the West, where we are really focusing on our growth,” says Sylvain Morissette, spokesperson for Rona. “But it’s an exciting announcement for our entire organization nationally, and for our employees,” he continues.

The Rona deal includes a $7 million investment in additional initiatives to support sports at the community level. These include the Rona Youth Aspiration program and the Own the Podium program. The company has also committed to an aggressive marketing and communications program to help promote awareness of the Olympic Games across Canada.

A comprehensive store package was last done in 1996, with ameliorations made over the years. According to Bill Ferguson, dealer support manager for Home Hardware Stores, the latest changes are designed, in part, to broaden the appeal of Home Hardware stores to women.

Home Expressions is among a number of departments and service areas that have been repositioned. Others include paint & decorating and customer service. To better serve Home’s contractor and heavy DIY customers, specialty departments, such as the Builder Centre and Home Design Projects department, have been enhanced to make it easier for customers to get the advice, ideas and products to tackle successfully complete projects.

“To maintain its position as one of Canada’s leading retailers, Home Hardware needed to further strengthen its brand and re-create the Home shopping experience,” said Peter Heywood, Vice President of Brand Strategy, Watt International. “Through our strategic design expertise, we have helped them build on their already strong, consistent brand to deliver results and keep customers coming back time and time again.”

To meet the demands of this kind of selling formula, potential vendors must come to the table with market intelligence – lots of it – plus appropriate packaging, and the ability to deliver into Canadian Tire’s central distribution centre in Brampton, ON on an efficient basis.

Canadian Tire’s newest store format, called Concept 20/20, offers an updated store layout and expands a number of product categories. One that is getting a big push is Carter’s own bath and décor department. Here, under a newly renamed program called “Bathscapes,” changes have been made to include more high-end products, and even more everyday items, such as towels.

Carter’s department is currently supplied by 25 main vendors, and he wants to reduce that. In the face of consolidation, even existing vendors who want to be part of the growth of Canadian Tire must be able to add value and offer innovation in a product offering. And that product must be offered within a complete selling package. “Offer not just product, but a program,” he advised.

He expects the current rate of growth, which will include more 60,000-sq.ft. outlets, to “continue in the years to come.”

The next openings in Canada will be regular 113,000-sq.ft. outlet in Vaudreuil, QC and a 95,000-sq.ft. store in Woodstock, ON, both in July.

Home Depot, typically unrivalled in its expansion in Canada, appears to be paying more attention than ever to the store opening numbers. Its newest – and only serious – rival is Rona inc., which doubled its planned store expansion for 2005 late last year. It plans five-10 big box openings, and another five-10 traditional building centre openings, in 2005.

Meanwhile, Home Depot, which is already including China when it itemizes its international presence, has yet to build a single store there.

Other possible bidders for B&Q include Kohlberg Kravis Roberts and a private equity firm, Permira, which has invested in other companies in this industry before, including the DIY chain Homebase.

Scarborough’s survey found that nearly two-thirds of all American households had invested in a home improvement project last year, with interior projects leading the charge: the number of households that spent money to improve the interior of their homes – through such activities as painting, wallpapering, carpeting, bathroom remodeling, etc. – was up 30% over 2001. “We see more homeowners taking on involved and expensive projects, such as remodeling,” said Bob Cohen, Scarborough’s president and CEO. “Additionally, the focus on interiors can be attributed, in part, to the insecurity of today’s world. People are taking refuge in their homes more than ever, and
keeping one’s sanctuary fresh and new – even by taking on simple, inexpensive projects – adds to the feelings of peace and warmth people get from their home.”

The Canadian Hardware and Housewares Manufacturers Association will host its annual Maple Leaf Night/Soirée Feuille d’érable on Tuesday, May 17, at the Curve Night Club-Aladdin Resort & Casino. Time: 5:30-8:00 p.m. More than 100 vendors are already signed up to rub shoulders with Canadian Tire, Fedco, Home Hardware, House of Tools, BMR, Sears, TruServ, TSC, Zellers, and more. For more info, contact: CHHMA, 416-282-0022.

Hardlines, in conjunction with the Presidents Council, present “Global Retailers: Best Practices from Around the World,” Wednesday, May 18 at the Las Vegas Convention Center. Time: 3-4:30 p.m. Featuring: a world-class retail panel: John Herbert, general manager of the European association of DIY retailers; Robert Collins, Director of International Sales and Retail Development, Ace Hardware Corp.; Harald Lux, head of Emil Lux in Germany; Jim Lowe, director of strategic research for one of the leading home improvement retailers in England, Focus DIY. Michael McLarney, Editor & Publisher of Hardlines, will serve as moderator.

Hardlines, in partnership with the National Hardware Show, presents an International Reception at the Las Vegas Convention Centre (immediately following the “Global Retailers” panel). Time: 4:30-5:30 p.m. Want to connect with buyers from the U.S., South America and overseas? This will be the absolute best place in Las Vegas to do it! For more info, click here.

If you want to meet some top international buyers one-on-one, you should definitely sign up for “International Buying Day,” organized by the Presidents Council, on Monday, May 16, the day before the show starts officially. The Buying Day is designed to provide an efficient forum for suppliers who want to expand their market share. Because of the individual appointment format, the Buying Day is limited to 40 suppliers, who will have individual meetings with the following participating retailers: B&Q – U.K.; Focus DIY – U.K.; Globus – Germany; Homebase – U.K.; Komeri – Japan; and Sodimac – Chile. Cost is US$2,000 per vendor. click here to receive more details.

TORONTO – “Imagine This Sold,” Canada’s first eBay drop-off store franchise, is the latest in a new retail phenomenon – companies that provide support services to expedite eBay’s online auction activities. Imagine This Sold provides a drop-off point for customers unfamiliar, or uncomfortable, with undertaking the online auction process themselves. Customers merely drop off products at a local outlet, and collect their money when the items are sold online. Imagine This Sold provides a one-stop-service to appraise, write ad copy, professionally photograph, post on eBay, ship and arrange payment for items for sale. The company is implementing an aggressive franchise
expansion campaign to add local eBay drop-off stores to their existing flagship retail location in uptown Toronto. A second Imagine This Sold store has already opened in Dartmouth, NS and stores will open in Barrie, ON and Calgary over the next three months.

JONQUIÈRE, Que. – A Wal-Mart store that was successfully organized by the United Food and Commercial Workers Union was quickly pronounced unprofitable and then scheduled to close down on May 6. But the store was actually closed down a week earlier. The store, which received union accreditation last fall, was to close May 6. However, Wal-Mart workers will be paid a few additional weeks following the shutdown.

SEATTLE & TORONTO – Sears Canada Inc. and Amazon Services Inc., a subsidiary of Amazon.com Inc., will join forces to beef up Sears’ website, www.sears.ca. Under the multi-year agreement, Amazon Services will build a new Sears Canada branded-website using Amazon technology. Merchandising, marketing, fulfillment and customer service will all be offered, while functions such as Search, Navigation, Personalization, and Community features such as Customer Reviews will be key elements of the new site.

INDUSTRY, Calif. – Home Depot has negotiated a five-year, $13 million lease on a 650,000-sq.ft. distribution center being built here. The retailer is earmarking site for its burgeoning Home Depot Supply division, which services primarily commercial accounts. The Whittier (Calif.) Daily News, quoting sources from CB Richard Ellis, which brokered this deal, reports that Home Depot intends to consolidate two smaller DCs, in Fontana and Santa Fe Springs, into the Industry facility, which, when completed in December, will be the largest available commercial warehouse in the San Gabriel Valley.

MOORESVILLE, N.C. – Lowe’s Cos. may be looking for a new agency to handle its advertising. AdWeek quotes a representative from the retail giant’s current account manager, McCann Erickson, that Lowe’s has placed its account in review and has requested information from 14 agencies. Last year, Lowe’s gross advertising expenses rose 8.5% to $740 million, according to the company’s 2004 10-k filing with the Securities and Exchange Commission.

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In Toronto, buyers from Sears Canada, Canadian Tire Corp., and Home Depot Canada represented the major retailers. An overview of one of Canada’s fastest growing independents, London-ON based TSC Stores, was offered by that company’s merchandise director, Bill Wilson. He was followed by David Nisbet, who heads up Mutual Hardware, the national hardware buying group of which TSC is a member. Another Buyers Breakfast was held two days later in Montreal (more on that next week–MM).

But just breaking through requires determination and lots of homework. One of the key tips each retail buyer reiterated was the need for new vendors to be up on their knowledge of the industry overall. “Market intelligence. This is really important,” said Scott Urie, national merchandise manager at Sears for Craftsman, home and electronics, Sears Canada. “It’s important to know the size of the market and how your product fits in.”

He stressed the need to understand the retailer itself. “You have to know about Sears,” he stressed. “Our target customer is women and their families.” Even for vendors selling to Craftsman, a strong brand aimed at the man, he said, “Ask yourself how your product fits in.”

Urie summed up the concerns of many of the buyers represented over both days. “Know your channel, know your product, know your competitor.”

John DeFranco, division product manager for lawn and garden at Home Depot Canada, noted some of the initiatives that his company is moving ahead with, including installed sales and tool rentals, the latter of which will be in all Canadian stores by year’s end. The commercial-industrial side is also growing rapidly. Home Depot Supply is part of the retailer’s strategy to grow its business-to-business channel. The recent acquisition of Litemor, a commercial lighting supplier, reflects Home Depot’s focus on B2B.

DeFranco noted that his category, seasonal, is growing within Home Depot to the point that the company is fast becoming one of the top 10 garden retailers in North America – opening up a huge opportunity for manufacturers in that sector.

Home Depot is at the forefront of a number of technologies to streamline the supply channel. DeFranco said compliance with UCC – the international data bank that synchronizes international product codes – is important for vendors, as is familiarity with EDI and other technologies. “You can impress a buyer in a presentation by showing that you have the electronic and technology issues resolved.”

Do you have to be a major supplier to deal with a major retailer like Home Depot? The answer is probably yes – most of the time – but not always, especially if you offer something unique. “The smaller and medium-sized companies – these are often the ones bringing the innovations.”
(Next week: highlights from our amazing Montreal Buyers Breakfast!)

According to Ray Falkenberg, vice-president business development and marketing for TruServ Canada, the stores are generating “outstanding results,” which, in turn, managed to generate a lot of interest among dealers attending the market.

The purpose of the Best Practice program, says Falkenberg, is to arm independents in smaller communities to combat the arrival of large-surface stores, especially Wal-Mart and Superstore. “We find if you do nothing when these people move to town, your sales go down as much as 40%,” he says. However, the stores that are following TruServ’s best practices are managing to stabilize sales in the face of new big box competitors.

Three stores are currently being put to the test: a True Value in Nepawa, MB; a V&S in Morden, MB; and a Country Depot in Kingston, ON. Changes have been made to store layouts, with wider aisles, power aisles, and brighter signage. Product mixes have been adjusted, with emphasis on seasonal products (the 2004 Christmas season proved very successful, says Falkenberg).

“Dealers have to compete with the big guys,” he says, “getting traffic up and average basket size up are important measures. Dealers also have to learn how to increase the percentage of people walking into the store who actually end up buying.”

Originally launched at Zellers stores in October 2004, the Big Ticket initiative was piloted in Manitoba, Quebec and Ontario. Three different combinations of Big Ticket departments are being introduced: nine stores will sell a small assortment of appliances, 83 will offer an enhanced merchandise selection, including appliances and mattress sets, and five will offer a full selection of appliances, mattress sets and furniture. The merchandise assortment combines private label and brand name appliances, including GE, Frigidaire and White Westinghouse.

“The consumer response to Big Ticket merchandise at Zellers has been strong,” said Gary MacDonald, senior vice-president, Hbc and general manager, stores, for the Zellers division. “We’re experiencing above average sales increases in these departments.”

Home Depot has about 140 stores in these markets. U.S. Remodelers’ product lines will be offered in all of the markets, except for the Dallas stores, which will only offer the U.S. Remodelers kitchen refacing products. U.S. Remodelers will begin offering its products in these markets in the second quarter of 2005.

The member-owned wholesale hardware co-operative reported sales of $2.0 billion in 2004, to its approximately 6,000 independent retailer locations worldwide.

TORONTO — Home Depot Canada, in partnership with the Clean Air Foundation and the Government of Canada’s One-Tonne Challenge, is offering again this year a “Mow Down Pollution” lawn mower recycling and rebate program. Customers can turn in their old stinky lawn mowers for a rebate of up to $100 on the purchase of a reel mower or electric mower. This year, Home Depot will donate $10,000 in lawn and garden care supplies to the municipality whose citizens have turned in the greatest number of old gas lawn mowers to Home Depot between April 28 and May 8, 2005.

SAN FRANCISCO — Building Materials Holding Corp., one of America’s leading pro dealers, saw its net income jump to US$21.1 million in the three months ended March 31, compared with US$4.2 million for the same quarter a year earlier. Revenue during this period increased 37.4% to US$572.9 million, from the company’s BMC Construction subsidiary, which provides turnkey shell construction installation for builders. BMHC’s lumberyard, division, Idaho-based BMC West, reported a 20% sales gain in the first quarter, to US$330.7 million, and a doubling of its operating income to US$28.9 million.

TOWSON, MD — Power tools and faucets drove Black & Decker’s financial performance in the three months ended April 3, during which the company’s net income rose 71.7%, to US$148.7 million, on revenue that increased 39% to US$1.52 billion. During the quarter, the company’s power tools and accessories segment, led by its DeWalt line, increased its sales by 50%. The company reported that industrial cordless power tools sales were “particularly strong.” B&D also benefited from a 25%-plus gain in sales of Price Pfister-branded plumbing products, which helped boost the overall business in its Hardware and Home Improvement segment by 9%.

OAK BROOK, IL — Ace Hardware Corp. has signed a 10-year extension to its business agreement with Ace Israel that will continue supplying the Israeli retailer’s 25 hardware stores and building the Ace brand in that country. The signing took place today at Ace Hardware’s corporate headquarters here. The Ace Israel Group first allied itself with Ace in 1993 and, at that time, operated four stores. The company has since grown the business to include 25 hardware stores in cities such as Tel Aviv, Jerusalem and Haifa. A 26th store is planned to open later this year in Afula.

WASHINGTON — A growing movement to get Wal-Mart’s 1.2 million American workers organized by unions now has the support of political know-how. Paul Blank, one of the leaders of the movement, was formerly national political director for Howard Dean, Governor of Vermont, who ran for leadership of the Democrats. With Blank in charge, the union-organizing movement against Wal-Mart has all the sophistication of a political campaign, with website, volunteer recruitment, etc.

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ST. JACOBS, ON — The big news for dealers at Home Hardware’s latest dealer show was the much-awaited introduction of its newest store signage and merchandising program. The comprehensive package includes modified colours, enhanced end caps and sophisticated in-store signage, all developed for Home Hardware by Watt International (better known to this industry as The Watt Group).

“This is more than just a décor package,” says Bill Ferguson, dealer support manager for Home Hardware Stores. “What we’re trying to do is to meet our customers’ expectations. Customers are more demanding,” he adds, noting that Home stores don’t just compete with other hardware and home improvement retailers. They must earn mind share from other specialty retailers, other forms of entertainment, even Disneyland – anything, in fact, that will make demands on the consumer’s pocketbook.

Starting with the outside of the store, colours have been brightened up, with greys replaced by blacks and reds, and the entrance more clearly marked by bold signage overhead. Inside, the stores will be “warmed up,” says Ferguson, with softer colours, such as sandstone coloured tiles on the floor, and cleaner colours on the walls, to replace the existing reds and whites. Department signs have been re-introduced, as well. Banner kits that hang from the ceiling are part of the new look, but these ones reflect the look of Home’s other printed promotional materials – and they’re easy to replace. Even sharp edges in the store are replaced by curved edges in an effort to appeal more strongly to the female shopper.

Home Hardware wants the shopper to stop and smell the proverbial roses. “I know everybody is in a hurry, but these new elements help to slow people down. It creates an environment that’s warmer, more friendly. But at the same time,” he adds, “we’re trying to create a more effective shopping experience.”

The overarching ambition of the new look is to tie the stores more closely to the promotional – and branding – efforts of other media, such as television ads, flyers and catalogues. “We have to be marketing in the store. It’s not just about merchandising,” says Ferguson. “The store is really part of the message and that’s what we’re trying to get across.”

Homecare and CID represent the Ontario membership of the larger umbrella group, Matreco. At the end of last year, Homecare agreed to join with fellow Matreco member TIM-BR-Marts Ltd. Together, the combined purchases of TIM-BR-Marts reach almost $1.2 billion and are continuing to grow! Great opportunities currently exist for expanding TIM-BR-Marts nationally. During the meetings, leadership of both groups was turned over to Tim Urquhart, president of TIM-BR-Marts Ltd., as Don Nash, formerly president of both CID and Homecare, assumes the role of executive vice-president of TIM-BR-Marts Ltd.

Cost savings are anticipated by combining head office functions, including accounting, buying, flyer advertising and TIM-BR-Mart marketing. Lots of new and enhanced programs are being introduced, arising from the ‘humongous’ buying power and large number of stores.

Jeff Kinnaird is now regional vice-president of operations for Canada West, which includes Northern Ontario.

The move, says Plamondon, will allow Home Depot Canada to strengthen its core functions. It also better reflects the organization of the parent company, based in Atlanta. “The vp structure aligns the Canadian structure more with the U.S. structure,” he says. “It also better reflects the reality of what the marketplace really is, identifying Western and Eastern markets.”

Skrepnek says he’s been in regular contact with other commodity dealers in Southern Ontario who would be more than willing to replace Leon’s in the group’s membership. He adds that the group will add more members from other regions, as well. “We’re still as big as any group in Canada, and frankly, we’ll make some moves over the next six months to fill the gap.

As warm weather arrives in the province, Québec households are expected to step up their renovations on the outside of their homes. In fact, nearly one in four households is planning exterior renovation work in the coming months, says the Rénovex ADMACQ Index. That’s up by 5% over the Index results from January 2005.

For more information on the study, contact: Donald O’Hara at: 450-646-5842, or info@admacq.qc.ca.

The end result, higher sales, will satisfy Canadian Tire’s overriding mission to increase shareholder value.

Canadian Tire also wants to increase the number of products it sources globally, to maintain product margins, increase sales and “improve the customer value proposition by offering greater product innovation.” The giant hard goods distributor opened its first office in Hong Kong last fall.

The company expects to spend $350-$400 million annually to support its continued expansion and the development of its infrastructure.

Much of the expenditure will be fuelled by inheritances that ageing baby boomers are receiving. The total value of that inheritance money is expected to reach $550 billion nationally over the next 10 years, says a report by Ernst & Young.

According to Statistics Canada, renovation spending in Canada will reach a record $38 billion in 2005, climbing to more than $40 billion in 2006. Nearly 40% of all homeowners plan to undertake some kind of home improvement this year, with a minimum expenditure of $1,000.

The most popular renovation projects, which also provide a solid return on investment, asserts the RE/MAX study, include bathrooms, kitchens, exterior projects such as a new roof, paint, windows, and flooring.

U.S. and Canadian producers have battled over lumber turf since the early 1980s. More than 100 bipartisan members of the U.S. Senate and House of Representatives have called on the Bush administration, over the past four years to end its challenge to Canada, and not impose any export taxes, duties, or quotas on lumber that is essential to the domestic housing market and economy.

Women are more likely to dig in the garden than men, however. Fifty-six percent of women said they like planting flowers, versus 34% of men. Male involvement in the yard and garden was reflected in purchasing intentions: 10% of respondents say they’ll buy a new gas grille this year.

NEW YORK — Tembec, the giant Canadian forest products company, has teamed with environmental organization ForestEthics to identify and protect endangered forests in North America’s largest remaining wilderness, the Canadian boreal forests. The two groups will rely on certification by the Forest Stewardship Council to assure buyers that products are free of social and environmental controversy. Tembec has committed to seeking FSC certification for the forests under its care by the end of 2005. The boreal forest of North America is one of the largest intact forest ecosystems left on earth, with 25% of the earth’s remaining intact, road-less forests. This region supports some of the planet’s largest populations of wildlife, including grizzlies, wolves, woodland caribou and lynx.

FORT WAYNE, Ind. — The dealer-owned buying group Do-it Best, will include a first-time exhibit at its annual spring market that combines the Farm & Ranch and pet supplies categories.The exhibit area will have several components, including an outdoor display area for equipment and related products, as well as suggested planograms for different-sized stores and marketing tips. More than 350 clip strip ideas will be on display, featuring items targeted for sale during the months of January through July.
The co-op stated that dealers can aim this merchandise at several target customers: people who actually own farms and ranches; the “hobby farmer,” whose numbers are growing beyond rural markets; and the 70% of Americans who own at least one pet, and who spend $31 billion annually on pet supplies. The program can fit into 20 ft. or up to 400 ft., depending on the dealer’s needs.
The exhibit will be part of Do-it Best’s spring convention, to be held at the May 14 through May 17 at the Indiana Convention Center in Indianapolis.

NEW YORK — Sherwin-Williams had earnings of US$83.3 million for the first quarter, up 62% from US$51.5 million during the same quarter a year earlier. 1Q sales rose to US$1.54 billion, from US$1.32 billion in the same period a year earlier. Sales were up 17% to US$1.54 billion, from US$1.32 billion. Revenue was driven, says the company, by architectural paint sales to contractors and DIYers, but adds that consumer sales growth was weak.

MONTREAL — Hart Stores Inc., the chain of mid-sized department stores, recorded net earnings of $5.1 million for the fiscal year ended January 29, 2005, down from $5.4 million a year earlier. Total revenues for the period increased to a record $133.8 million, from $127.8 million. Subsequent to the fiscal year end, Hart Stores opened three new stores, including a 40,000-sq.ft. outlet in Whitby, Ont., the company’s third store in Ontario and its first in the Greater Toronto Area. Hart Stores Inc. operates a network of 67 mid-sized department stores under the Hart, Bargain Giant and Géant des Aubaines banners.

BRENTWOOD, TN — Tractor Supply Co., the largest retail farm and ranch store chain in the United States, enjoyed first-quarter net sales of US$377.2 million, a 14.1% increase over US$330.6 million last year. Same-store sales increased 4.2% versus last year’s 12.4% gain. Gross profit increased 13.0% to US$112.1 million and gross margin was 29.7%, compared with 30.0% for the comparable quarter in 2004. Net income for the quarter was US$0.7 million, down from $3.4 million for the same quarter in 2004. Tractor Supply opened 13 new stores and relocated another two during the quarter.

GLENVIEW, IL — Illinois Tool Works Inc. has posted a 7.6% increase in quarterly profit, thanks in part to acquisitions and strong demand in its North American specialty systems business. The company, whose products range from fasteners and beverage holders to food service equipment and countertop materials, earned $312.3 million, up from US$290.2 million in the same period a year earlier. Sales were up 13% to US$3.07 billion, from US$2.71 billion.

TORONTO — Norbord Inc., one of the world’s largest producers of OSB, particle board and plywood, comes off a first quarter of strong earnings with the announcement that its board of directors has approved a series of capital initiatives to enhance shareholder value and increase the earnings capacity of the company. The four initiatives include payment of a special dividend to common shareholders, redemption of all outstanding preferred shares, continuation of common share repurchases under a normal course issuer bid, and expansion of the company’s North American OSB capacity.

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“Leon’s distribution operations are well positioned to service a strong market in the Greater Toronto Area and for future growth north and east of GTA,” says Paul Vanderberg, president of Winroc. Operation of Leon’s will continue under existing management staff.

Until then, the bannered dealers can expect all the services and support they’ve received in the past, he says. “Our focus right now is keeping those banners healthy and that services received from Sodisco-Howden stay healthy every day.”

Could a strategy for Sodisco-Howden’s bannered dealers include one of CanWel’s own customers? “We wouldn’t rule out any particular strategy at this time,” says Donaldson.

Possible candidates for that help could well include some of CanWel’s existing LBM customers, which include Rona inc. and Home Hardware Stores Ltd. In fact, the very competitiveness of Sodisco-Howden versus organizations such as these has been considered a big hurdle to the success of the Sodisco-Howden acquisition. Off-loading the entire banner side of Sodisco-Howden’s business could well enable CanWel to overcome that hurdle.

Hardlines called TruServ Canada, itself a dealer-owned hardware distributor, to explore this further. “We’re not in conversation with CanWel at all. We anticipate at some point in the future there will be further acquisitions,” says Bill Morrison, president and CEO of TruServ Canada. “If there’s any appropriate way to support their banners, we’d love to sit down with them. TruServ’s mission is to support independents in the marketplace.”

Even though the Sodisco-Howden offices in Montreal have been downsized (much of that was executive positions, MIS people and members of the marketing team), operations remains firmly in place. “Serge [Tremblay], Sodisco-Howden’s new vp merchandising and marketing, wants to bring a lot of focus to programs such as flyers, catalogues, electronic information, and new product selection and introduction.”

Even news that CanWel is seeking to transform itself into an income trust will not affect the various business units – including the Sodisco-Howden customers themselves. “What they’ll see is a better quality product delivered on time. That’s what it’s all about for Serge’s group.”

The income trust initiative is a way for the company to generate a higher return to its shareholders. Simply put, the trust can’t be taxed federally. The entire profits are returned to the shareholders, who in turn pay the tax themselves. The company was also considered under-represented on the market, so a second share offering was floated last week. The money raised from that offering will be used to pay down debt and for possible future acquisitions.

The latest announcement comes out just as Rona finalizes its acquisition of Totem, a 16-outlet chain that dominates the retail home improvement business in Alberta. That chain was sold off by its owner, Jim Thorogood, for a cool $100 million, adding fiscal 2004 topline sales to Rona’s war chest of about $260 million. The results from operation of Totem will be consolidated into Rona’s financial results as of the beginning of the company’s second quarter.

Since the beginning of 2005, Rona has added 14 affiliated stores – seven in Western Canada, four in Ontario, and three in Quebec – totalling additional retail sales of $101 million.

*Menard’s and Sears numbers are estimates. Sears’ figures represent Sears Hardware and Orchard Supply Hardware operations, but not hardware sales from the company’s full-line department stores, which total an estimated US$8.5 billion.

**Includes US$753 million in revenue from BMC Construction, which provides turnkey installation to builders.

About 90 Sears Hardware and 6 Orchard Supply Hardware stores are also stocking appliances.

Dealers from Newfoundland are an important part of the show’s attendance – and represent some major buying influences, such as Chester Dawe and Notre Dame Agencies. In fact, 35-40% of the bookings placed at the show came from Newfoundland, says Sherwood. “We really rely on the Newfies to bring us through,” he admits.

They built their businesses by the force of their personalities, independence and unique merchandising philosophies. Many, of course, kept changing and modernizing as needed over the years, but most continued to build their business by emphasizing their own individuality, with a heavy emphasis on personal service.

For the past few years, Ace has been encouraging its dealers to open new stores by offering up to US$215,000 in merchandise credits to fill a new store and present its vision of the proper merchandise mix, store layout, computer systems, pricing and employee training. This was the heart of its Vision 21 modernization program inaugurated several years ago.

CLEVELAND – Sales by Sherwin Williams for the quarter grew by 17% to US$219 million. Based on strong results, the company has raised its full-year earnings view and expects fiscal 2005 earnings at US$3.10 to US$3.20 a share, up from its prior outlook of US$3 to US$3.10 a share. In February, Sherwin-Williams announced it expected sales to grow in the low-double-digit percentage range.

MOORESVILLE, N.C. – Lowe’s Cos., the second largest home improvement retailer in the world, has signed with the Charlotte Bobcats, at the same time terminating its relationship with the Carolina Panthers, a deal formerly worth US$1.5 million annually for the Panthers. The Bobcats had originally been in negotiations with Lowe’s rival, Home Depot. The new partnership will be worth from US$1.5-US$2 million a year.

BEIJING – Anti-pyramid selling laws have been relaxed in China, allowing Avon to set up its direct sales operations there. Avon’s entry into the market is considered a test by the Chinese government to determine a suitable direct selling model suitable for the nation’s growing ranks of consumers.

ATLANTA – The value of Black & Decker shares went up 9% last week on news that the power tool maker has raised its earnings forecasts for the first quarter and full year. Strong sales of power tools, especially in North America, are driving the optimism.
The company was given a further leg up by savings from its acquisition last year of the power tool division of Pentair Inc., and the purchase, in 2003, of Baldwin Hardware and Weiser Lock.

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Adding new stores or enhancing existing operations will be a key driver of the effort to increase sales and revenues. From the retail side, here’s what to watch for: up to 285 new and replacement stores planned across all of Canadian Tire’s retail businesses (which includes PartSource and Mark’s Work Wearhouse). This growth will include 100 points of sale for the Canadian Tire banner, most of which will feature the new Concept 20/20 format, including 76 replacement stores and expansion of 24 existing stores. Another 175 existing Canadian Tire stores will be retrofitted to the Concept 20/20 format. Canadian Tire Retail’s incremental store count will increase by 24, from the current 457 to 481 by the end of 2009.

In addition, the PartSource auto chain is slated to nearly triple in size to approximately 130 stores by the end of 2009.

“As we look at the goals that we have set for the next five years, we believe there are further opportunities to unlock value from our existing businesses. We have a strong balance sheet, a unique and successful mix of businesses, and a team that is completely focused on implementing our plans to deliver long-term value for both our customers and our shareholders,” said Wayne Sales, president and CEO.

While Federated Co-op’s 100 home centre dealers proved to be a loyal lot after the strike ended, Leonzio says the experience provided an important boost to TruServ’s awareness of its True Value banner among those dealers. As for the SAAN stores, he says, “We will wait and see until they restructure the company. But the closure of those stores leaves a definite void that can be filled by our V&S banner in those markets.”

The signing of Buckerfield’s, a six-store farm, feed and equipment chain in British Columbia, to the Country Depot program gives TruServ a presence in that province for the first time. The deal comes just as TruServ is about to open its first ground-up Country Depot in Western Canada next month in Okotoks, Alta.

Finally, at the wholesale level, hardware supply agreements with buying groups such as Castle, Torbsa and Sexton Group are resulting in many of the dealer members from those organizations choosing to add the True Value banner. Sexton has been especially responsive, says Leonzio. “We’ve signed 15-20 dealers from the Sexton Group in the last year, and one from Castle.”

The first promotion involves a two-for-one offer on compact fluorescent lighting that will be inserted in the monthly statement of Toronto Hydro customers, starting this month. The coupons are redeemable at any of Home Depot’s 12 stores in Toronto.

Home Depot will also provide energy saving programs through its commercial division, Home Depot Supply, and through its newly acquired commercial lighting division, Litemor.

“Working closely with Toronto Hydro, we’ll help Torontonians reduce their energy bills by making their homes as energy efficient as possible,” said Annette Verschuren, president of Home Depot Canada, in a prepared release. “The goal of our programming goes beyond offering free product. We’re aiming to change the mindset in which Toronto residents consider energy efficiency products and help create a more energy-savvy society.”

Home Depot plans to include other products in its promotions with Toronto Hydro in the coming months, including an appliance program that involves room air conditioners, another compact fluorescent light promotion, and seasonal LED lights at Christmas time.

For the month of March, the seasonally adjusted annual rate of urban starts rose 0.4% to 190,100 units. A 2.2% increase in multiples starts was partially offset by a 1.5% decline in singles to 93,100 seasonally adjusted.

In March, new construction activity was strongest in Western Canada. The seasonally adjusted annual rate of urban starts in British Columbia and the Prairies rose 11.3% and 9.7%, respectively. Housing starts in March fell 10.6% from February in the Atlantic region, 8.7% in Quebec, and 2.2% in Ontario.

Rural starts in March were estimated at a seasonally adjusted annual rate of 28,400 units.

In Atlanta, Home Depot is suing Dale Hunt, the former executive vp-business development for its Georgia Lighting division, who in February opened his own specialty lighting operation, Masterpiece Lighting. Home Depot’s suit claims that Hunt and other former employees of its Georgia Lighting unit, which Home Depot closed last winter, lifted trade secrets. The retailer has also sought a temporary restraining order that would close Hunt’s operation.

Masterpiece Lighting is currently taking special orders, and its showroom is scheduled to open in June. At one point, Hunt offered to buy back Georgia Lighting (where he worked before it was acquired by Home Depot in 1999), but Home Depot decided to fold that operation into its Expo Design Centers division. That’s when Hunt decided to go out on his own.

The lawsuit, according to the Atlanta Journal-Constitution, says Hunt quit Home Depot after refusing to sign a non-compete agreement as part of his severance package. Hunt also forfeited stock options when he quit. However, he maintains he didn’t steal anything form the warehouse giant.

Home Depot declined to comment about either case.

TORONTO – Not to be outdone by the likes of Rona and Home Depot, which have closely allied themselves with home décor shows – and even Donald Trump’s TV ventures – Ikea has launched a show of its own. In what it calls “a bold and innovative move,” Ikea Canada is launching “Space for Living,” a 13-episode design series that will air weekly on HGTV Canada. The half-hour program premiered last Friday at 7:30 p.m. EST and combines travel, home décor, art, design and lifestyle.

QUESNEL, B.C. – West Fraser Timber Co. Ltd. today announced it will spend approximately $105 million to construct a new sawmill and significantly expand its administrative office here. Now in its 50th year of operation, this latest capital investment will involve a new three-line mill to replace an existing sawmill. The new mill’s annual capacity will be 500 million board feet. Construction will start in late April 2005, with production expected to begin in the summer of 2006.

RALEIGH, N.C. — Stock Building Supply, the largest pro dealer in North America, has acquired Davidson Industries, a two-yard operation based in Franklin, Ind., that generated US$65.5 million in revenue last year. Davidson’s operations, which include one of the larger roof and floor truss plants of any independent dealer in the U.S., fit the profile of Stock’s network of yards that primarily serve homebuilders and large contractors.

HOFFMAN ESTATES, Ill. – Sears Holdings Corp. has announced the layoff of at least 500 workers at its headquarters here. Sears Holdings was created when Kmart Holding Corp. bought up Sears Roebuck, creating the third-biggest retailer in the U.S.

ATLANTA – Joseph Galli Jr., the energetic and controversial president and CEO of Newell Rubbermaid, saw his compensation almost double last year, as his salary and bonus reached $2.7 million. That’s up from $1.4 million in 2003. The package included $338,798 in other compensation, including $204,332 for personal use of company transportation, according to a proxy statement. He also got almost $1.3 million worth of restricted stock, a form of incentive pay.

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