“We need a partnership with a strong national player, especially in light of consolidation in the industry,” says John Morrissey, vice-president marketing and product development.

At the top of the list will be a proposal from Tim-BR-Marts Ltd., the Western buying group with whom AWARD shares membership within the umbrella buying group Matreco. They also share the TIM-BR Mart brand.

Morrissey admits it’s an obvious contender. “We have a longstanding relationship with Tim-BR-Marts, and we’ve spent a lot of time, blood and sweat to grow the TIM-BR Mart brand in Atlantic Canada.” In fact, while Tim-BR-Marts had always been a group designation, the creation of a cohesive TIM-BR Mart banner for dealers was developed in Atlantic Canada, by AWARD’s agency, Image Design.

Tim Urquhart, general manager of Calgary-based Tim-BR-Marts, is optimistic about working more closely with AWARD. Late last year, he spearheaded the merger of Homecare/TIM-BR Mart Ontario into the Western group. “I would hope that our proposal will be strongly considered,” he says. “We are an independent buying group for independent dealers, rather than a corporate operation – and we share a name. We think we have all the pieces to offer them, to help them to be part of a larger organization.”

But other hardlines distributors will likely line up to make their pitch, as well. Another outcome of the fateful meeting in March was a decision to close the distribution business initiated by AWARD late last year. That business, funded by the AWARD dealers themselves, was a partnership with Groupe BMR, the Quebec-based buying group and wholesale distributor – and another Matreco member.

However, one offer is decidedly corporate. Will the Rona proposal be reconsidered? “We’re not excluding anything,” says Morrissey at AWARD. The outcome of the last meeting was to evaluate the future “with a clean slate,” he adds.

The latest moves by Loblaw anticipate the company’s reorganization of its head offices. The general merchandise buying teams are being relocated from Calgary to new offices in Brampton, just west of Toronto. The head offices in mid-town Toronto are also being relocated. “We’re still on track for fall of this year for the new head office,” says Wilson.

Thorsteinson has been with UFA for three years. During his tenure the Farm Supply Division experienced double-digit growth each year, despite the impact of prolonged drought and the devastation created by mad cow disease. In addition, he oversaw the development of the company’s new flagship Regional Centres. This retail concept, initiated Red Deer and Camrose, offers a larger footprint than a typical UFA store, and is designed to be a destination shop for a wider range of customers. Thorsteinson also introduced a number of initiatives to strengthen the organization’s value proposition, service offering and brand throughout rural Alberta.

UFA has 34 farm and ranch supply stores, 115 cardlock and bulk fuel petroleum outlets, employs 1,100 and has more than 110,000 members in Alberta.

Home Depot and Scotts Co., the dealer’s largest supplier in sales volume, are planning a co-branded TV campaign that features Atlanta Braves’ pitcher John Smoltz. In April, Home Depot also plans to distribute through its nearly 1,900 stores the “2005 Major League Baseball Official Fan Guide,” which includes schedules for all 30 pro teams.

John Costello, Home Depot’s executive vp-merchandising and marketing, said that this marketing campaign could incorporate other vendors’ products, such as Weber grills, Toro outdoor power equipment and Husky tools.

The retailer also has local club sponsorship agreements with the Braves, Red Sox, Cincinnati Reds, Seattle Mariners, Los Angeles Angels, and San Diego Padres.

As for the number of recalls hitting the news, he does not consider it such a major concern, given the sheer volume and range of product coming over. “Quality control should be a small issue for products coming out of China.”

Admittedly, he adds, there was a time when importing any products carried with it the tarnish of lower quality, “but it’s all in how you spec.”

The savings derived from obtaining products in China can be up to 30-40%. With that kind of return, says Mahurin, the co-op can afford to re-invest 10-20% back into the quality of the product, to ensure differentiation and product quality.

Besides sourcing better, True Value is moving product to its dealers more efficiently. At the same show, member dealers were informed that the company’s fill rates improved by one percentage point. Year to date in 2005, those fill rates are at 97% – and as high as 98% on A items.

Annual revenue totaled $2.024 billion in 2004, generating net income of $43.2 million, more than double last year’s profit. At the same time, True Value continued to reduce debt, ending the year with $170.3 million in total debt, a reduction of 11.4% from the end of 2003. During 2004, 355 members left the co-op. That was offset in part by the recruitment of 202 new members.

The two facilities will feed merchandise to hundreds of Depot’s stores in the South. Home Depot currently operates 12 import DCs.

TORONTO — Sears Canada Inc. has announced a change in ownership of its controlling shareholder following the recent merger of parent company Sears, Roebuck and Co. and Kmart Holding Corp., which formed Sears Holdings Corp. Sears, Roebuck, the owner of approximately 54.3% of the issued and outstanding shares of Sears Canada, is now a wholly-owned subsidiary of Sears Holdings. The Sears-Kmart merger was completed on March 24, 2005, resulting in the third-largest retailer in the United States, with approximately US$55 billion in annual revenues and nearly 3,500 retail stores, including 2,350 full-line and off-mall stores, and 1,100 specialty retail stores. Sears Canada has 122 full-line department stores, 218 off-mall stores, 64 home improvement showrooms.

MONTREAL — Richelieu Hardware posted 1Q consolidated sales of $76.1 million, up 17.6% from the equivalent period in 2004. Last year’s acquisition in the U.S. of Allied Hardware and Allied Casework Supply accounted for 6.9% of the increase. Richelieu’s Canadian business, which represented 94.8% of first-quarter consolidated sales at $72.1 million, was up from $61.0 million a year earlier. Total sales in Canada increased by 10.9% to $67.4 million or 88.6% of consolidated sales, compared with $60.8 million or 93.9% of total sales for the same period in 2004. All three major Canadian geographic markets made a solid contribution to this growth, with a stronger performance in Western and Eastern Canada. Sales in the United States totaled $8.7 million, up 120.5% over $3.9 million for the first quarter of 2004. Earnings before income taxes, interest, depreciation, amortization (EBITDA) totaled $8.3 million, up 15.9%.

ST. LOUIS — Huttig Building Products, one of America’s largest millwork distributors, opened its first distribution center in Minnesota last week. The 73,000-sq.ft. facility includes pre-hung interior and exterior door assembly lines, and is stocking a variety of interior and exterior door options as well as mouldings, columns and stairway systems. The DC, Huttig’s 45th in 47 states, supplies pro dealers and homebuilders within a 150-mile radius of Minneapolis.

OAK BROOK, Ill. — Ace Hardware Corp. is now offering “designer” clothing on its website, www.acehardware.com. Carhartt, the maker of rugged outdoor and workwear, will be represented on the site with a full range of coats, jackets, shorts, overalls, vests and jeans. Some Ace stores already carry the Carhartt brand in their stores.

Wal-Mart will move its Asian headquarters from Hong Kong to Shenzhen, China next year. The move is expected to be completed by August, 2006. It’s the location of Wal-Mart’s partner in China, Shenzhen International Investment Commercial Property Com.

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This year, we’re proud to add the buying perspective of one of the country’s fastest growing privately held chains: TSC Stores, based in London, Ont. Bill Wilson, merchandise director for TSC, will be on hand, accompanied by David Nisbet, president of Mutual Hardware Inc., the hardware buying group of which TSC is a member.

Depot’s annual shareholders meeting will be held at 10 a.m. on May 26 at The Philharmonic Center for the Arts in Naples, Fla., when shareholders will vote on a number of proposals, including a new omnibus stock incentive plan.

MINNEAPOLIS, Minn. — Bernco Inc., a building materials distributor based here, has been acquired by Lanoga Corp., one of the country’s largest pro dealers, based in Washington. Bernco will become a part of the Lanoga’s United Building Centers division. Over its 44-year history, Bernco has grown to become a major regional supplier of windows, doors, and related millwork products, as well as an array of value-added services, including pre-finishing and custom, pre-hung door fabrication. Lanoga is a $2.75 billion provider of building supplies that primarily serves the upper Midwest and western portions of the U.S. through five divisions.

SOUTH PLAINFIELD, N.J. — The fast-growing pro dealer The Strober Organization is scheduled to move into new corporate headquarters here next month. But that’s not the only change this 93-year-old company, which had been based in Brooklyn, N.Y., is making throughout its expanding operations. The pro dealer has begun changing the names of its 91 retail locations in 15 eastern states to Strober Building Supply, a process that is expected to be completed by the end of this year. Many of those yards have been operating under the banners that preceded their companies being acquired by Strober over the past several years.

CLIFTON, N.J. — Jeep, the brand best known for its rugged automobiles, will have its name attached to the launch of a number of home improvement products at the upcoming National Hardware Show, being held May 16-18 in Las Vegas. The launch will include a 12-volt impact wrench and a 9-volt cordless driver, plus an LED flashlight and emergency flasher and utility light. The products have been developed by DuraPRO, based in Torrington, CT, a producer of hand and power tools. Jeep has already licensed a number of other home products, including mountain bikes, electronics and even wheelbarrows. The company expects to increase its tool offerings through the coming year.

RICHMOND HILL, Ont. — Beginning April 1, Black and Decker Canada will launch a fund-raising promotion for cancer research during “Daffodil Month.” The program, called “Charged Up to Make Cancer History,” has B&D donating $5 to the Canadian Cancer Society for every cordless Black and Decker item sold to a maximum of $50,000. This campaign is part of a year-round relationship between the Canadian Cancer Society and Black & Decker.

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“Consumer intentions across the six major markets remain positive, with more than one in ten households thinking about buying a home this year,” said Bertrand Recher, senior economist at CMHC. However, intentions to buy are down slightly from 2002, when 14% of households stated their intention to buy, and down again from 2003, when the level was at 15%.

“This year, the intentions are consistent with continued high levels of housing starts and sales of existing homes,” Recher points out. “Favourable economic conditions, such as low mortgage rates and a tight labour market, are contributing factors to the positive intentions.”

Home buying intentions are strongest in Calgary, Vancouver and Toronto. In Calgary and Vancouver, 15% of households reported that they intend to purchase a home, while in Toronto the share was 13%. Purchase intentions are slightly lower in Ottawa (12%), Halifax (11%), and Montreal (9%).

Home renovations will also remain especially strong this year, the study indicates. Fully 39% of all homeowners are considering undertaking renovations this year, up from 2003, when 37% of homeowners considered renovating.

Renovation intentions are the strongest in Halifax and Ottawa, where 45% and 44% of consumers, respectively, indicated an intention to renovate this year. Intentions to renovate are also high in Calgary and Montreal, where in both cases 40% of households indicated an intention to renovate this year. Renovation intentions are slightly lower in Vancouver (39%) and Toronto (38%).

The WestCoast 2005 trade show had 242 booths and 155 exhibitors. The 2006 show is expected to be even bigger, giving retailers a greater selection of vendors to see under one roof. For more information, contact Diane McConnell, BSDA member services co-ordinator, at 604-513-2205, toll free 888-711-5656; diane@bsdabc.com.

In fact, another study, by the Quebec association for building materials dealers, ADMACQ, revealed recently that fully 51% of Quebec households admitted to having done some kind of renovation work in their homes during 2004 — and 89% of those respondents said they did the work themselves.

The report, “Les Quebecois et la renovation,” features the results of a poll of 3,700 Quebec households that queries them on their renovation spending intentions for building materials. For more info, or to purchase the full report, contact Donald O’Hara at info@admacq.qc.ca or 450-646-5842.

WASHINGTON – After being investigated for employing illegal immigrants, primarily as contract cleaning staff, Wal-Mart will escape criminal sanctions, but has agreed to pay $11 million, in response to a long-running federal investigation that had resulted in 245 arrests of undocumented workers by Immigration and Customs Enforcement agents and federal prosecutors in Pennsylvania. Some individuals who were involved in hiring the illegal contractors have reportedly agreed to plead guilty to federal violations.

NEW YORK – A report that appeared in Women’s Wear Daily last week indicates Sears is trying to sell its Land’s End catalogue division. The move is regarded as a way for Sears to raise cash following its merger with Kmart late last year. Sears wouldn’t comment on the rumor.

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Messe Frankfurt’s key partner in the first H²X/D²X show, which replaced the failed Canadian Hardware and Building Materials Show, is the Paint and Decorating Retailers Association. McKinnon is not even sure of that organization’s future involvement. PDRA includes a strong educational component to its side of the proceedings, and may want to do their own educational program, McKinnon adds.

Kathy Witmeyer, director of membership, education and trade shows at PDRA, confirms that her organization’s involvement with the Canadian show has yet to be confirmed. “We have our board meeting in May to discuss it,” she says. “Right now, everything is up in the air.”

McKinnon says the vertical format of the show, which brings in a variety of related sectors in hardware, décor, wallcoverings and flooring, has been a successful one with its other shows, especially in Europe. But here, he’s facing some challenges. “It’s hard to please all the stakeholders.” But he believes it’s a strong format, nonetheless. “There’s value in having a very vertical platform for a broad range of buyers,” he notes.

Some things that won’t change, however, include Sodisco-Howden’s involvement in the Spancan buying group, wherein Sodisco-Howden acts as the warehouse and hardlines supplier for the Independent Lumber Dealers Co-operative. He also expects the procurement function, which was centralized into Montreal under former CEO Jos Wintermans, to remain there. But more decision-making will likely return to the regional offices, namely London, Ont., and Victoriaville, Que.

In February, the seasonally adjusted annual rate of urban starts increased in four of the five regions across Canada, compared with the previous month. The largest increases were in the Prairies and in British Columbia, where starts in February rose 13.4% and 12.2% respectively. Starts in February also increased compared to January in the Atlantic region (8.4%) and in Ontario (5.5%), but fell 1.8% in Quebec.

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

A new addition to the event is the Industry Hall of Fame Dinner. This year’s vendor inductee is Bill Caldwell, founder of the toilet seat company, Moldex (“Born in Barrie, raised everywhere!”). The retail inductee is Jim Thorogood, who recently concluded more than 40 years in the retail building supply industry with the sale to Rona of Totem Building Supplies.

For more information on the AGM, contact: 416-282-0022; www.chhma.ca.

CHARLOTTETOWN — The first Sears department store on Prince Edward Island opens on St. Patrick’s Day. It also represents the first example in Canada of the retailer’s free-standing off-mall format.

TROY, Mich. — Frank’s Nursery & Crafts Inc. has filed a proposed plan of reorganization in the Bankruptcy Court for the Southern District of New York. The filing follows the company’s entry into Chapter 11 bankruptcy protection in September 2004. The retailer has recently completed going-out-of-business sales to wind down its operations. It has also sold or rejected substantially all of its leasehold interests. The bankruptcy reorganization involves Frank’s retaining about 40 properties, which will be developed by the reorganized company.

ST. JOHN’S — Sears Canada will open a new 143,000 sq.ft. Sears department store in the Avalon Mall in St. John’s, Nfld., this fall. The current Sears store located in the Village Mall, just a short distance away, will remain open in the near term.

BOUCHERVILLE — I know, I know. You wish you’d bought the stock too. Rona’s board of directors have approved a two-for-one split of the company’s common shares, subject to the usual regulatory approvals. The split will go into effect March 22, 2005, and the shares will begin trading on a post-split basis as of March 18, 2005. The shares closed at $48.50 on March 10, the day the split was announced. They opened on the Toronto Stock Exchange in December 2003. The board also adopted a shareholders’ rights plan to prepare against any unsolicited takeover bids targeting the company. Designed to give the board of directors enough time to evaluate unsolicited offers, the plan will allow alternative strategies to be implemented in order to maximize value for shareholders and ensure fair treatment of shareholders while giving everyone the opportunity to take advantage of potential purchase offers. The company stresses that the plan was not adopted in reaction to a specific acquisition proposal.

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“Yes, we had presented a case for AWARD to join Tim-BR-Marts,” Urquhart says. “But I don’t know how persuasively that argument might have been put forth.”

Finally, AWARD members reportedly voted to close AWARD Distribution Ltd., a regional distribution centre created to supply the AWARD membership in Atlantic Canada. That facility, financed by the dealers themselves, was allied with, and supplied by, Le Groupe BMR, a wholesale buying group (and Matreco member) with distribution in Longueuil, Que.

While Morrissey would offer no comment on the status of ADL, he did express his optimism about the other issues decided that day. “I think the decision that the membership made was not only a positive step today, but is going to make this group extremely strong in the future.”

To enter your store, or a store from your group, in this year’s Outstanding Retailer Awards, contact Rob Gerlsbeck, Editor of Hardware Merchandising, at rob.gerlsbeck@rci.rogers.com, or 416-764-1662.

For more info on the industry’s top forum for retail and vendor leaders, contact Beverly Allen, Director of Sales & Marketing at HARDLINES: 416-489-3396 or bev@hardlines.ca!

TORONTO — Canadian Tire has teamed up with Sobeys, Starbuck’s and a restaurant chain called Richtree to offer a one-stop convenience retail destination. Called “Q,” the two pilot sites — in Windsor and Milton, Ont. — feature 10 “spacious fuelling stations” in front of a coffee shop, a 4,000-sq.ft. “Sobeys Express” grocery store, and the restaurant.

The final piece to the Q puzzle is a 1,000-sq.ft. Richtree Market Restaurant. Better known for the Moevenpick Marché concept, Richtree will offer a similar presentation that features meals and food items prepared from scratch in full view of the customer.

More than 500 exhibitors filled two floors of one building at the Messe fairgrounds in Cologne, and by Sunday afternoon of day one of the show, the aisles were filled. Many were buyers, from Germany mainly, but also from throughout Western Europe. Although the show was intended to represent suppliers of lawn and garden products — and there were a number of outdoor power equipment, garden tool and patio furniture suppliers — the show was predominantly a hardware show.

However, show organizers don’t want to stop there. Hans Kampen of Koelnmesse wants to see a full range of hardlines, including giftwares and housewares, eventually represented at Asia-Pacific Sourcing. He also hopes to see more North Americans, besides the contingent of eight people from Home Depot that reportedly came this year. Given the crowds walking the inaugural event, his expectations may likely bear fruit.

Companies from countries such as China, Taiwan, Japan and India were keen to meet — and supply — Western customers. They certainly have the capacity, which, by Western standards, is prodigious. For example, Top Electric, a power-tool maker based in Hong Kong, has 1,000 people working in a factory that covers 300,000 sq. meters of space. JK Files & Tools, based in Bombay, has five factories — four in India and one in Indonesia — employing almost 2,500 people. Harshel Jayavant, president of JK, says the show has been a “successful experiment,” and he expects his company to be back in two years. Before that, JK will exhibit at the National Hardware Show in Las Vegas (May 16-18) and again in Cologne for the big Practical World show next year.

“India has all the ingredients of a manufacturing powerhouse,” Jayavant says. “It’s not just because of the cheap labour. We have a skilled workforce — and we have the engineers to drive quality.” He notes that his company was first Indian tool manufacturer to receive ISO certification, back in 1984.

Some of the companies exhibiting here have been in business, like JK, for decades. However, one is brand new, having started only last August. Bennett Chen, of Prime Supply in Taiwan, had yet to speak with a key buyer by half-way through the second day, but his optimism was undeterred. He was eager to explain to anyone who would listen, in either German or English, about a new cutting tool for rubber and plastic hose. Unlike other tools, which, he demonstrated, used a scissor-action to cut through the material, his blade comes straight on in a sliding action, to make the cut. It’s reminiscent of an oversized cigar cutter.

But not everybody walking the show was a potential buyer. Some were European competitors, checking out the competition. I spoke with one gentleman who was scrutinizing a couple of patio chairs. I asked him what he thought. “They are not good,” he said.

His name is Peter, and it turns out he is from the largest maker of garden furniture in Germany. He itemizes for me the weaknesses in the chair’s construction, which include inferior welds and a strut along the back of the chair that wobbles. “Look here,” he says, pointing to the bolts holding the chair, which is designed to rock slightly, to its fixed base. “In America, where people are heavier, these chairs will not last. See where they use two bolts? We use three.”

He believes Asia-Pacific Sourcing has potential as it grows, but he looks forward to finding more representation from lawn and garden suppliers in years to come.

BROKEN ARROW, Okla. — Hope Lumber & Supply, based here, the industry’s 21^st-largest home improvement dealer, acquired Leeds Building Products, a Kennesaw, Ga.-based pro dealer with 10 yards in Georgia, South Carolina and Florida. Those yards, combined with seven former Wickes Lumber yards and six Atlanta-area Leeds yards that Hope had purchased over the past two years, will comprise Hope’s new Eastern division. The acquisition increases Hope’s yard count to 52.

ST. PETERSBURG, Fla. — Roper Brothers Ltd., a five-yard chain headquartered here, acquired certain assets of Valley Lumber & Building Materials, which operates a single yard in Winchester, Va. Valley Lumber’s management, including owners Steve and Teresa Cluss, will stay on to run the business as a division of Roper Brothers. In a prepared statement, Roper Brothers said the combined entity creates a company whose sales exceeded $120 million.

TORONTO — Hudson’s Bay Co., second-oldest company in the world, has secured a lucrative eight-year deal to outfit Canada’s Olympic teams, beginning with the 2010 Vancouver Games. Roots, which has had the contract with the Canadian teams since the 1998 games in Nagano, Japan, didn’t get a chance to bid. Hbc has the contract for the 2006, 2008, 2010 and 2012 Games, and will outfit volunteers at the Vancouver Games in 2010.

OAK BROOK, Ill. — Ace Hardware Corp. has announced plans to build a regional distribution centre in Moxee, Wash., just 10 miles from its existing distribution facility in Yakima. Sitting on 74 acres, the new 788,000-sq.ft. retail support center is expandable to 1.2 million sq.ft. as needed. It will replace a 506,500-sq.ft. facility that has been open since 1984, but has been operating at maximum capacity for some time.

Although retail inflation remains non-existent, a large majority of the respondents expect their margins will improve or stay the same, thanks to the emergence of China as a major source of consumer products, coupled with continuing productivity improvements within the supply chain and in retail operations.

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TORONTO — Despite offering a forum for a number of new and innovative products, the first edition of a newly re-created hardware show for Canada, called H²X, received attendance from buyers that disappointed many exhibitors.

H²X was held in conjunction with a trade show for paint and decorating retailers called D²X. Of 154 exhibitors, about half were listed within the hardware side of the show. And of that number, almost 20% were Asian, or Asian-based, importers.

The show struggled with some logistics problems, as well. Two keynote speakers were lined up for consecutive mornings, Rona CEO Robert Dutton on Monday, and Bill Morrison, head of TruServ Canada, on Tuesday. However, times were posted as 8:30 a.m. in some materials, but 9:00 a.m. on the show’s website. As a result, many missed both speakers, and those who came in time were shut out of the show itself — and the coffee — for another hour, until the show opened at 10 a.m.

The show suffered another blow when Dutton was a no-show, replaced at the last minute by his executive vice-president traditional stores, Claude Bernier. The handful of people who were present heard an update on Rona’ expansion plans, underscored with a strong recruitment message for dealers. And only about two dozen people were fortunate enough to be on hand the next morning, when TruServ’s Morrison shared some thought-provoking comments on the changing customer, and retail’s need to adapt to those changes (see story in this issue).

Bleinroth of Messe Frankfurt says he is talking with a number of groups within the industry to determine the fate of the show, including evaluating whether Canada can sustain a national show at all. “But a number of very important players said ‘yes, we need a show’,” he says.

With that in mind, Messe Frankfurt is evaluating a range of options, which may include anything from a change of timing to another venue — or even a move to another city. Bleinroth is confident, however, that some kind of event for the industry will take place, “but what that will be — the jury is still out.”

“Ace has great value to our customers from a procurement point of view,” adds Tom Donaldson, president and CEO of CanWel. “But it’s not a banner strategy.”

As such, the dealer development function within Sodisco-Howden is being wound down, with the sole emphasis on increasing product sales. “Our job is not to convert a dealer from one banner to another,” says Donaldson. Instead, Sodisco-Howden will target independent dealers, especially in the LBM buying groups, for hardware sales.

“The old Sodisco-Howden was really focused on Pro and Ace. We’re really focused on the independents,” Doman says. “Banners aren’t our business.”

He says the company is currently working on strategies for Pro and Ace, “to see what makes sense to the Canadian market,” and expects said strategies to materialize before year’s end. However, he would not provide further details.

Will the separation of the two businesses be a tangible one in the eyes of the industry and — more importantly — CanWel customers? Both Doman and Donaldson are confident it will be. The two businesses will not be combined in any way. Sales forces, distribution centres and product lines will remain distinct. CanWel’s focus for its new business unit is managing inventory, increasing fill rates, developing new products, and lowering costs for its customers through better procurement strategies.

So far, the Sodisco-Howden acquisition has had no appreciable impact on CanWel’s relationship with its existing customers. “We never take anybody’s business for granted,” Donaldson says. “But we haven’t seen any dramatic shifts in business in the last five months.”

Officials at Home Depot attribute the company’s sales growth, in part, to a 7.3% increase, to $54.89, in its average customer transaction; and to a 27.9% gain in its installed sales business. The retailer also shelled out $3.7 billion in capital expenditures to upgrade its stores and operational systems. Home Depot projects that its sales in 2005 will expand by between 9 and 12% and its earnings per share will increase by between 10 and 14%.

In 2004, Lowe’s completed the rollout of its revamped installed sales program, and continued to expand its special order business. The company spent $400 million on improving and renovating the appearance of its stores. Lowe’s plans to open 150 stores in 2005, and expects its revenue to increase by 17%.

Society is spending money more wisely, he noted. He called Canadians “a tough, cynical audience.” As a result, it’s important to have the right strategy to provide the consumer what they are looking for when they do choose your store, “because loyalty is a myth and shoppers are constantly adjusting their shopping patterns.”

Morrison also stressed the importance of keeping the retail concept fresh and updated. “Independents are in the fashion industry. Your store must be fashionable. ‘Think inside the box’,” he urged. Too often, a disconnect exists between what retailers think customers want and what they actually want.

Morrison also touted the importance of putting one’s business on the Internet. “If you’re not net, you’re not real.”

December holiday spending in British Columbia was up 8.6% over December of last year. The province was one of only two that saw an increase in sales from November to December, at 0.7%.

“Across Canada, December sales increases were lower than anticipated, with much of that due to a decline in car sales,” Evans said. “When you remove that category, December holiday sales in B.C. were actually up 29.9% over November.”

Another key factor in product sales has been the ongoing pace of new home construction, although HIRI expects that to slow a bit in the next few years. In fact, the Institute expects the sales growth rate for home improvement products to average 4% annually through to 2009. In 2005, it projects that sales will expand 3.8%.

But best of all, we are lining up the most amazing Hardlines Conference ever. Once again, you can count on a gathering of top retail experts from around the world to join us September 12-13, 2005. Some of the speakers this year:

• John Costello, executive vice-president of merchandising and marketing, Home Depot in Atlanta
• Bill Morrison, president and CEO of TruServ Canada
• Mark Foote, president of Canadian Tire Retail
• Al Meyers, senior vice-president with Retail Forward
• Albert Plant, retail consultant and former RBC Royal Bank executive

With more surprises to be announced!

Be sure and set aside Sept. 12-13, 2005 right now. We want you to be part of our birthday bash!

At Home Depot, Tom Ridge, former Secretary of the Department of Homeland Security and former Governor of Pennsylvania, has been appointed to the company’s board of directors.

Greg Paliouras has been appointed publisher of Hardware and Home Centre magazine. Prior to joining Centre, Paliouras was associate publisher of Canadian Architect magazine. His background includes extensive sales and marketing experience, as well as a strong knowledge of the construction industry. (416-510-6808)

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There will no longer be any dealer development in Sodisco-Howden, he continues. “Our job is not to convert a dealer from one banner to another.”

“Banners aren’t our business,” says Doman. He wants to stress the distinction, because it’s an important one for CanWel’s strategy. Growing its retail banner programs has historically put Sodisco-Howden in direct competition with other retail groups that are existing customers for CanWel’s building materials distribution business. Sodisco-Howden currently has two active banners, both licensed from groups in the U.S.: Ace and Pro. But by staying true to its wholesale roots, Sodisco-Howden can co-exist with other groups, such as Home Hardware and Rona inc., two of CanWel’s largest customers. “Sodisco-Howden Group is safe waters now,” says Donaldson.

“When it comes to the Sodisco-Howden Group business, that is a rifle shot at the independent,” he adds.

In April, Expo will introduce the first of four “style initiatives,” vignettes that will group different home décor products to present appealing room settings. The first will be called “Mediterranean,” which will reflect ideas Osta said Hastie gleaned from recent travels throughout Europe. Subsequent vignettes, which will rolled out in Expo’s stores over the next several months, will be called “Asian Fusion,” “Modern Elegance,” and “Scandinavian Country.”

Hastie’s team is also working with Bruce Nelson, the former Marshall Field executive whom Expo hired as its vp-merchandising last May, to align the stores’ product assortments closer to its target customers’ tastes and pocket books. Expo president Annette Verschuren had stated in a previous interview her displeasure with the way the product mix at Expo was being positioned with its target customer.

Osta says Home Depot hasn’t shut the door to the possibility that, if these changes produce the intended results, it might consider opening new Expos at some future date. However, Osta was careful to point out that expansion currently is not on the front burner.

“Following the announcement that CRHA was closing, we felt retailers in Canada needed representation, as well as the services we provide,” said the NRHA’s Hammond in a prepared release. “NRHA bylaws allowed us to expand our organization to provide these services and create an entity to meet the needs of those retailers.”

Membership costs dealers $250 annually, and that price includes full access to the NRHA’s “E-Access Education and Training” website, which offers an online dossier of NRHA education and training tools, with training courses for staff.

Now these education and business management tools are available to Canadian dealers. “We are delighted to have a man of Scott’s caliber bringing association programs and services like this online education and training package to Canadian retailers,” said Hammond.

Hoy will also be calling on the major retail and buying groups in Canada offering electronic membership packages. One such package has been developed already for Home Hardware Stores Ltd., headquartered in St. Jacobs, Ont. Included in the Home Hardware Education and Training website are the NRHA Advanced Course in Hardware Retailing and the Building Materials Product Knowledge employee training courses. Both have been tailored to the Canadian market.

In addition to his association responsibilities, Hoy now represents Do-It-Yourself Retailing magazine in Canada, selling trade advertising in Canada.

“We’re growing and we think there’s an opportunity for others to look our way.”

Now retailers such as Rona, Canadian Tire and Home Hardware are investing heavily in their own brands. Sometimes it’s with the help of existing manufacturers, but more and more, they’re doing the sourcing themselves. The result has been massive consolidation among vendors, as brand names get bought up by an ever-shrinking handful of major companies, such as Newell Rubbermaid and Black & Decker.

According to the HQR study, vendors can defend the value proposition of their own national brands, but this will require working more closely than ever with the companies they sell to. (“The End of Brands” appears in the latest issue of HARDLINES Quarterly Report, our newsletter of research and analysis on the retail home improvement industry. For more information, call me at 416-489-3396, or click here .—Michael)

Ace Hardware Corp. is the largest retailer-owned hardware co-operative in the U.S. Annual retail sales for Ace’s 4,800 hardware and building center dealers worldwide total approximately US$13 billion.

• John DeFranco, Merchant for Outdoor & Barbecues, Home Depot;
• Bill Wilson, Merchandise Director, TSC Stores Ltd., also representing Mutual Hardware;
• Décor Merchant TBA, Canadian Tire Corp.;
• Scott Urie, National Merchandise Manager: Craftsman, Home & Electronics, Sears Canada.

In Montreal, April 28, meet:

• Normand Dumont, Exec. VP Merchandising, RONA;
• Roger Plamondon, Home Depot’s Regional Development Director, Eastern Canada.

(Note: *Representatives of each company subject to change)

We’ve kept pricing down for another year: HARDLINES subscribers pay only $179.00 plus taxes. Non-Subscribers pay only $285.00 plus taxes. For more information on these business-building events, contact Isabel Bisong at the World Headquarters: 416-489-3396 or isabel@hardlines.ca

ATLANTA — Newell Rubbermaid Inc. has entered into an agreement to sell off its Curver business to Jardin International Holding BV. Curver, the company’s European indoor organization and home storage division, contributed approximately $140 million of revenue in 2004. The sale reflects Newell Rubbermaid’s intention to divest itself of non-strategic businesses and concentrate on leveraging brand strength and product innovation in its core portfolio of businesses. The transaction is expected to close in first quarter 2005, subject to regulatory approvals. This transaction will not impact 2004 results.

LONDON, U.K. — In its fourth quarter, Kingfisher plc had a 7.1% sales increase to £1.76 billion, from £1.65 billion in 4Q 2004. Same-store sales were up 0.6%. For the year, sales were up 8.7% to £7.65 billion, up from £7.04 billion, while same-store sales rose by 3.9%.

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St. Jacobs, Ont. — As one of Canada’s three largest retail home improvement groups, (with Rona inc., it vies for number-two spot after Home Depot Canada), Home Hardware Stores Ltd. has historically been content to also be the quietest. But as the war for consumer awareness gets waged more and more in the media, the dealer-owned co-op has announced expansion plans of its own for the year ahead.

Growth plans also extend to Home’s distribution centers in Ontario and Alberta and its paint manufacturing facility in nearby Burford, Ont. A $10.1 million expansion at its Wetaskiwin, Alta., distribution centre is under way and will be completed over the next two years. The project will add 212,000 sq.ft., bringing the facility to more than 750,000 sq.ft.. The facility services 309 stores throughout western Canada.

A $16 million expansion project is currently in progress at the company’s St. Jacobs, Ont., distribution centre and corporate office. That project, which is scheduled for completion in 2005, will add 360,000 sq.ft., bringing the facility to 1.5 million sq.ft.. This distribution centre supplies 523 stores throughout central Ontario and western Quebec.

The company recently completed a $4.2 million expansion project at its Debert, N.S., distribution centre. The 409,000 square foot facility supplies 180 stores in five provinces in eastern Canada.

Home’s Burford, Ont., paint manufacturing facility, which produces the company’s private label Beauti-Tone paint and related products, will also undergo an expansion in 2005. The $2 million project will add 15,000 sq.ft. of research and development, production and storage space to accommodate the introduction of a new paint production line.

TORONTO — Canadian Tire Corp., Canada’s largest retailer of hard goods, enjoyed strong profits in both its fourth quarter and year end. Quarterly net earnings increased 16.6% to $100.4 million, and sales for the quarter were up 6.1% to $2.5 billion.

Same-store sales grew by 1.1% for the quarter and by 1.8% for the year.

Canadian Tire’s 2004 fiscal year had one less week than 2003. Therefore, calculating their results on a more comparable basis of a 13-week quarter and 52-week year, Canadian Tire Retail’s retail sales grew by 9.3% for the quarter and 6.0% for the year.

On the same basis, same-store sales rose 6.5% for the quarter and 3.4% for the year.

During the year, Canadian Tire expanded its Concept 20/20 store format, with a total of 19 new and six retrofitted 20/20 stores conforming to the new format. Based on the success of 20/20, Canadian Tire plans to make 19 of its 20 store openings planned for 2005 under the 20/20 format. Another 15 existing stores will be retrofitted in 2005 to the Concept 20/20 format.

He also knows the danger of his dealer base eroding. “If any key exhibitors were to switch banners,” he says, “it could have a serious impact, not just on the show, but the association itself.”

Other attempts to fine tune a show can also be fraught with peril. This year, his show is being moved to being on a Thursday. “We’re on the bubble for the change of days,” he notes. “For example, the dealers from Newfoundland think it’s wonderful, because they can be on a plane back home Saturday afternoon. But there are others who don’t like it. We’re trying to find a common ground for everyone.”

Wal-Mart opened about 30 stores in Canada in 2004, and a similar number of openings are planned for 2005.

These mid-size, off-mall stores will range in size from 80,000 to 100,000 sq.ft. They’ll feature many of the product assortments found in the larger Sears Grand format — appliances, lawn and garden, tools, electronics, apparel, and home fashions — and Sears’ better-known brands such as Kenmore, Craftsman and Apostrophe. The stores, to be laid out racetrack style, will also feature those products that are considered Kmart’s strengths, such as pantry, health and beauty, household goods, and pharmacy.

“Sears Essentials will be a one-stop shopping destination for home and family needs, for everything from back-to-school, backyard living and birthdays to appliances, apparel and soft drink,” is how the company describes the concept in a prepared statement. News reports add that the stores will also have automotive services.

The ability to spec and source directly will let True Value feed products into its private label programs. But Mahurin says national brands remain important. “I want national brands whenever we can. We want to be a brand name store.” He expects private label products to fill in a category that has no national brand representation, or for filling “a gap in the price point or the assortment.”

Blurred channels and changing customers: Retailers are no longer settling for their own little piece of the pie. Companies such as TruServ Canada are moving more strategically into upscale rural markets that are being driven by reverse migration from urban centres. At the same time, Home Depot is looking for ways to enter urban markets more effectively with new store concepts of its own.

Other issues that will challenge this industry in the year — and years — ahead include the rapid rate of change of technology, considerations of ethical sourcing and environmentally sound production practices, and rising opposition to the seemingly unrestrained rate of growth of large-format retailers such as Wal-Mart and Home Depot.

“Seven Things You Must Know to Survive in 2005” appears in the latest issue of our sister publication, Hardlines Quarterly Report. Click here for more info.

OAK BROOK, Ill. — The global expansion plans of Ace Hardware Corp. got some added muscle with the signing of a new account in Ireland. McMahon’s, a family run chain of building centres that caters mainly to pros, is “very interested in growing its DIY business,” says Rob Collins, Ace’s director, international sales and retail development. McMahon’s is a 200-year-old operation headquartered in Limerick, but its 11 stores are located throughout Ireland and Northern Ireland. Two of them have already been converted to the Ace banner, and more will likely be converted over time. In addition, the retailer wants to add new stores carrying the Ace name.

SAN FRANCISCO — Building Materials Holding Corp., one of North America’s largest pro dealers, last year exceeded $2 billion in sales for the first time in its history. The company reported a 47.7% increase in revenue, to $2.091 billion, for the 12 months ended Dec. 31, 2004. Net income for BMHC rose 171% to $53.9 million.

ST. LOUIS, Mo. — Emerson Storage Solutions, a division of Emerson, has announced it will purchase Do-Able Products Inc., a maker of ready-to-assemble wood and steel home and garage organization and storage products. The acquisition will become part of Emerson’s ClosetMaid division. Terms of the deal weren’t disclosed. Do-Able is based in Chino, Calif., and had sales of 150 million dollars in 2004.

HERNDON, Va. — Lafarge North America, a leading supplier of construction materials in the U.S. and Canada, reported net income from continuing operations in the fourth quarter of $98.7 million, up from $68.2 million.

PERTH, Australia — While net profit declined overall by 2% for giant holding company Wesfarmers, its hardware division, Bunnings, enjoyed an increase in its first six months, as profits were up 11% to AU$230.4 million. Sales were up 7% to AU$2.1 billion. Same-store sales increased 7% during the period.

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“We would have liked to have more hardware people exhibiting at the show, but we think they’re sitting on the sidelines, taking a ‘wait-and-see’ attitude.” MacKinnon says, admitting he can’t blame their reticence. “I hope they will see a need for this show and take part in 2006. We have to prove ourselves, and we hope that we will.”

Pre-registration has so far reached 723 retail and designer guests. These include contractors and home builders, who have not been excluded from attending. But the show’s change of date (the former Hardware Show always began on the first Sunday of February) has affected other groups, such as the Independent Lumber Dealers Co-operative. The giant buying group typically holds its winter buying meetings at the same time as the show. This year, says ILDC general manager Andrew Battagliotti, the group couldn’t change its dates. Therefore, a formal contingent of Canada’s largest independent retail groups can’t be counted on to attend.

However, the show’s organizers also hope to beef up the event with a full seminar program on February 19, the day before the show opens. In addition, heavyweight breakfast speakers have been lined up. Robert Dutton, president and CEO of Rona inc., will speak on February 21, and Bill Morrison, chief officer of TruServ Canada, will get up on the podium the following morning. There’s been a lot of positive response to the seminars, MacKinnon adds, especially the paint and window seminars.

MacKinnon says Messe Frankfurt is keen to collaborate with other groups, and cites the success of PDRA’s support. “We’re going to sit down with exhibitors and get a round table of the most influential people in the industry and ask them what they want. Do they want us to do this show, do they need this show?” Those are the questions, he says, Messe Frankfurt needs answers to if it’s going to grow the show.

During that interview, Verschuren noted that the retailer has been making improvements in Expo’s service levels, primarily by using call centers to track fulfillment of orders. Some stores have experimented with new merchandise assortments that include bedding, mattresses and furniture. The company claims that its Expo division is profitable (although it does not break out sales and operating profits), but it still seems to be retooling this concept’s operations and product selection.

Rona’s mix of private label products was up to about 11% of its inventory in 2004, up from about 9-10% the year before. The company wants to get that level up to 15% within two years.

“We … are marketing five lines of products that are in high demand by do-it-yourselfers and contractors: recycled paint and accessories, MDF mouldings, electrical and cordless tools, imported hardware and floor coverings, which include floating floors, wood floors and self-adhesive tiles,” says Dumaresq, in a prepared release.

The family owned, one-store operation is now in its fourth generation.

Bargain has big plans to continue expansion, not just in Québec (under the banner, “Matériaux à bas prix”). It has two stores in Ontario. It added four stores last year in Quebec, and signed its first dealer in Atlantic Canada, in Summerside, P.E.I.

“We hope to add from four to five each year,” says Christian Richer, president of Bargain Building Materials. He adds that growth will focus on Eastern Canada, at least for now. “It’s not time to go west yet,” says Richer.

Collins says Ace and Sodisco-Howden will work to grow the Ace banner on a couple of fronts. Ace will provide necessary retail programs to support dealer growth, while offering its expertise in merchandising, and its clout in sourcing, especially overseas. “We’re putting the pieces in place for our two organizations to work together,” he adds.

Members of the Worldwide DIY Council reported holding interested discussions with potential distributors and agents, from countries that included France, Germany, Ireland, Spain, Sweden, Belgium, Scotland, Greece, Denmark, Wales and Slovenia.

With the dollar at such a low point against the pound and euro, both American and Canadian members found their products very attractively priced for European and U.K. customers.

Next year’s DIY & Garden Show/Totally Tools again will be held at Earl’s Court in London in mid-January. More details can be found at: www.diyandgardenshow.com.

Other considerations were Tire’s charitable and community involvement, such as environmental stewardship and “Foundation for Families.”

Sales’ contract with Canadian Tire was renewed at the end of last year, and extended to June 30, 2007.

MISSISSAUGA, Ont. — Fireco, the housewares and accessories supplier, has voluntarily filed for protection under the Companies Creditors Arrangement Act in the Ontario Supreme Court. The move comes on the heels of the loss of the Sobey’s account after 40 years. Under the CCAA protection, the company is attempting to develop a restructuring plan. In the meantime, Fireco reports it will conduct “business as usual” for customers throughout the restructuring, although payments have been frozen to all existing Fireco creditors.

LONDON, U.K. — Kidde, the maker of fire safety products, is being taken over by United Technologies Corp., a U.S. industrial conglomerate. The deal is worth US$2.8 billion, and is expected to close around the end of March 2005. Until then, business will continue as normal, both here and abroad. UTC’s portfolio includes Otis elevators, Carrier HVAC systems and Chubb electronic security.

CLEVELAND — The Sherwin-Williams Co. had consolidated net sales in the fourth quarter of $1.50 billion, up 16.7% from $1.28 billion in the previous year’s fourth quarter. For the year, sales were up 13.1% to $6.11 billion. Net income increased 16.5% in the fourth quarter to $82.5 million. For the year, profits were up 18.4% to $393.3 million, from $332.1 million. The Paint Stores segment had a 4Q net sales increase of 22.8% to $1.02 billion, and 14.6% increase for the year to $3.98 billion.

ATLANTA — Home Depot has signed a deal with the producers of reality shows such as “Survivor” and “The Apprentice” to position the Home Depot name on its programs. Television company Mark Burnett Productions will ensure that Home Depot products and services get integrated into its programs. The terms of the deal, which spans a number of programs over several years, were not disclosed. Among the shows that will be included in the promotion strategy are “The Apprentice III” and a new program, “The Contender.”

BRENTWOOD, Tenn., — Tractor Supply Co., the giant retail farm and ranch chain, had fourth-quarter net sales of $456.0 million, up 17.4% from $388.5 million in the previous year’s fourth quarter. Same-store sales increased 7.7%, up from last year’s 9.6% gain. Gross profit increased 18.6% to $145.4 million, while net income increased 32.0% to $22.3 million. During the fourth quarter, the Company opened 15 new stores and relocated another seven stores compared to two new and six relocated stores in the fourth quarter of 2003.

BENTONVILLE, Ark. — Sales at Wal-Mart grew by 9% in January, but same-store sales were a bit lower than expected, due mainly to performance by its Sam’s Club stores. Total sales, including new stores, for the four-week period ended Jan. 28 rose 9% to $19.8 billion from $18.1 billion. Same-store sales grew 2.5%.

HOFFMAN ESTATES, Ill. — Sears, Roebuck and Co. had total domestic store revenues of $1.61 billion for January, up 1.7%. Same-store sales during the period were up 0.8%. Lawn, garden and reported increased sales, and so did tools and automotive. Specialty retail sales also strong in January, as the company reported sales increases for Sears Hardware, Orchard Supply and The Great Indoors.

HOLLAND, Mich. — Tomkins plc, through its Air Systems Components business, has acquired Milcor Inc. from Gibralter Industries. Terms of the sale were not disclosed. Milcor is a multi-brand manufacturer of building materials, selling to the U.S. residential and commercial construction markets. It operates two manufacturing facilities, in Lima, Ohio, and two in Bensenville, Ill., and employs about 350. It will be integrated into Tomkins’ residential air systems business, Hart & Cooley.

Habitat for Humanity International, the faith-based organization that is one of North America’s largest builders of affordable housing, has fired its founder, Millard Fuller, primarily because he was uncooperative during the several months the builder investigated allegations of his inappropriate conduct towards a female staff member.

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The new initiatives mark a major response by IRLY to intensifying competition. A year ago, the 54 IRLY dealer members rejected a proposal to merge with Rona inc. Even though a couple of dealers decided on their own to join Rona, most stayed put — but recognized the need for more. “Dealers understand that it’s time for change,” says Dixon. “They’ve looked at the Rona program, but decided to stay with us.” The solution being offered is what Dixon calls “a store in a box,” with all the elements needed for a dealer to update their business.

Three stores have already committed to the new program, and Dixon says the entire membership is keen to get involved.

But with no members in British Columbia or Alberta, ILDC nevertheless wants to beef up its ranks there. “Obviously, we’re looking for people,” Battagliotti notes. “We’re looking for people of a like ilk. They have to fit.”

“Steve’s going to help us go after those opportunities.”

Growing the member ranks is certainly one of those opportunities, and Tim-BR-Marts has added four new members recently.

“We’ve organized this to have fewer decision makers and more support staff, which will free the merchants up to develop new products and new programs, and make decisions faster.”

The change is aimed at giving the lead merchants more time to focus on product development, less encumbered by administrative duties. It reflects the new blood on the team, which includes Jim Richardson, formerly with Home Depot, now division vice-president of imports in charge of global sourcing; Lee Pell, now division vice-president of merchandising, who came over from was Rep-Tech, a consulting group; John Bonnot, who came over from Lowe’s to serve as division vp of merchandising; and Laura McInnes, who brings her experience at Radio Shack to her role as division vice-president of inventory management.

BARRIE, Ont. — Can-Save, the LBM distributor, will feature Canadian rock legend David Wilcox at its next Buying Expo. It will be held June 16, 2005 at the Barrie Curling Club. For more info, contact: 705-722-7283.

WELLAND, Ont. — Prime Way Corp., a product development company, has struck a licensing deal with Sunbeam to use that brand name for Prime Way’s line of storage and organization products for kitchen, laundry, bath, and home. Prime Way will convert its existing line of 50-plus wire storage products to the Sunbeam brand and plans to unveil many new items at the March International Home & Housewares Show in Chicago.

EAU CLAIRE, Wis. — The U.S. Internal Revenue Service has ruled that Menard’s, the third-largest home improvement retailer in North America, owes nearly $6 million in back taxes, asserting that the company wrote off more of its owner’s salary seven years ago than it was entitled to. The IRS ruling comes after a judge decided in September that the company overpaid owner John Menard — the richest person in Wisconsin, according to the Milwaukee Journal-Sentinel — by $13 million in 1998.

TOWSON, Md. — Black & Decker Corp. enjoyed a 29% sales increase in the fourth quarter, rising to $1.73 billion from $1.34 billion. In addition, profits rose 36%, due mainly to strong sales of its DeWalt and Black & Decker brands. Profits reached $135.3 million for the quarter, up from compared with $99.5 million.

TORONTO — Sears Canada reported operating income of $140 million for the fourth quarter, compared with $109 million in the fourth quarter of 2003. Revenues increased 4.0% to $1.6 billion. Sales declines across most major merchandise categories were offset by favorable foreign currency exchange rates. Same-store sales decreased 1.7%.

FEDERAL WAY, Wash. — Weyerhaeuser reported earnings of $1.3 billion for 2004, on net sales of $22.7 billion. That’s up from $277 million on net sales of $19.9 billion for 2003. Fourth-quarter 2004 earnings were $199 million on net sales of $5.9 billion. Last year, Weyerhaeuser reported fourth-quarter net earnings of $92 million on net sales of $5.1 billion.

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