According to Lieberman, the strategy is a two-pronged one that begins right in the warehouse. Achieving excellence on the wholesale side requires “putting together initiatives that have resulted in industry leading fill rates,” she says. Combining that with the right assortments — and low prices — makes for a winning retail formula.

Besides being an effective wholesaler, TruServ is focused on serving the members. “We have to hone processes for rolling out retail programs for our members,” she says. “For example, a program under way right now is a one-call resolution center, where our members call one party within the co-op, and that person takes [their issue] from beginning to end and owes the response to the member. That way, the members don’t have to call any other parties in the building.”

Effectiveness is directed to member support in the stores, as well. As Lieberman says, it’s vital to give dealers tools to win at retail, and store modernization is at the top of the list. “We find, as members make their retail structures exciting for the consumer to shop, there’s a 17% pop in sales.

“Consumer data that we looked at shows that what consumers want is a great layout with fast in and out, and expert friendly service as well.”

“Our long term objective is to use this program to develop new tools, programs and ideas that will help our members increase their ability to compete in today’s retail world,” said Ray Falkenberg, vice-president, sales, operations and member relations.

Three stores have been chosen to launch the program, one for each of TruServ Canada’s national banners — True Value Hardware, Country Depot and V&S stores. The True Value and V&S stores recently completed their renovations and both held “Renovation Sale” events in late September.

“The best practice store is there for us to test anything that has to do with retail operations. What we’re really trying to do is get better at helping our retail members.”

Best practices will help dealers measure success, not just through sales, but by measuring traffic, closure rate, and average basket size. “If you’re not closing 85% or more of your customers coming in, then you’re losing opportunity, you’re letting business go out the door,” Falkenberg says.

“We are very pleased with the results to date,” he continues, adding that the Country Depot renovation begins this month.

Wal-Mart‘s rise as the world’s largest retailer, which stocks an extensive line of hardgoods, has also been responsible for thousands of small stores closing or failing, and with them, the wholesale distributors that supplied them.

While nearly 100 wholesalers remain, many of them are specialty wholesalers, and the industry actually is dominated by six firms, five of them dealer-owned co-operatives, with Ace Hardware at the top of the list. The exception is Orgill, which remains privately-owned, and ranks in fourth place.

Today, these six wholesale distributors account for $8.6 billion in sales to their retailer customers. Of that, the top three move $7.5 billion worth of products to their member customers (source: Do It Yourself Retailing).

Dealer ownership encouraged concentration of purchases and operational efficiencies, delivering to member-owners lower costs for goods purchased as well as the lingering profits of the wholesale operation. It also encouraged offering multiple ways to buy, so independent retailers could better compete with larger chain store competitors, with programs such as drop-shipments direct from factory to store, but billed through the wholesaler; or pool-buys brought into a single shipping point and then redistributed to individual retailers. Group advertising coordinated by wholesalers also enabled stores to convey more effectively their messages to consumers with colorful, professionally prepared advertising.

The concept of dealer ownership has been exported around the world to other countries, but only in Canada and Australia has it attained the kind of success it achieved in America, though it also is strong in New Zealand and more recently in South Africa.

He refers to the discussions he has had with a number of dealers whose business is primarily selling gypsum, insulation, steel and other building materials directly to contractors and builders.

Then, he says, growth within the group will come either from the dealers themselves as they grow their respective operations, or from “diversification of product lines.” Though, he notes, “even that’s limited, as we don’t ever want to be lumber buyers.”

But what kind of a group does Skrepnek envision? “I see continued consolidation, and I see the groups that can direct volumes being the winners. They will persist.” He believes that even combining existing groups, such as the rumoured consolidation currently occurring among two Matreco members (see last week’s issue—MM), won’t offer advantages unless those dealers really make their purchases in a unified way. “Otherwise, they’re booking volumes that won’t benefit the supplier.”

That effort to deliver orders from the members — and value to suppliers — is what Skrepnek believes will be key to TSG’s success. And he looks to existing groups that already deliver that kind of value, such as Le Groupe BMR and Independent Lumber Dealers Co-operative, as the ones for TSG to emulate.

As part of a morning program, the CEOs of two of Canada’s major home improvement retail groups will speak. Robert Dutton, president and CEO of Rona inc., will speak on Monday, February 21, and Bill Morrison, president and CEO of TruServ Canada, will speak on Tuesday, February 22.

Attendance at these talks is included in the registration for H²X Canada.

H²X Canada will also offer a seminar program on the day before the show, Saturday, February 19, aimed at retailers, retail store staff, manufacturers and sales agents. Topics will include: winning retail strategies, building community relations, risk management, dealing with the municipal government, hiring and firing tips, loss prevention and best practices.

Store tours in the Toronto area are also being organized as part of the seminar program and participants will have the option of attending either the afternoon sessions of the conference or taking the store tour. Stores in the tour will include Elte Carpet, Summerhill Hardware and Ginger’s Boutique, as well as a new LCBO store.

SAN JOSE, Calif. — When it comes to white goods, Sears still claims it has more than double the market share of its closest rival (that would be Lowe’s — MM), but it’s feeling the heat, so it’s adding appliances to four of its Orchard Supply Hardware stores in this state. These stores are now carrying Amana, GE, Frigidaire, Kenmore, Maytag and Whirlpool. Major appliances include refrigerators, washing machines, dryers, dishwashers, freezers, countertop microwaves, over-the-range microwaves, and washers.

MISSISAUGA, Ont. — Dynamic Paint Products has acquired Legebokoff & Son Import/Export. The family held business, based in Burnaby, B.C., has been a Dynamic distributor for many years. The deal is expected to shave time off deliveries to Dynamic’s Western customers of paint sundries.

VANCOUVER — West Fraser Timber Co. reported 3Q earnings of $78 million on sales of $700 million. That’s up from earnings of $3 million on sales of $484 million in the same period in 2003. For the first nine months of 2004, earnings were $171 million on sales of $1.85 billion. This compares to earnings of $9 million on sales of $1.45 billion for the first nine months of 2003.

ROCKFORD, Ill. — Amerock Corp., a division of Newell Rubbermaid, will lay off 450 workers and close the doors on its cabinet hardware facility here in 60 days. Although production is closing — a victim of outsourcing — Amerock’s admin services, including distribution, customer service and HR, will remain for an indefinite term.

VANCOUVER — Canfor Corp. had net income of $201.6 million for the third quarter of 2004, up from $17.8 million in the same quarter of 2003. Year-to-date net income was $377.2 million, compared with $51.2 million in the same period in 2003. Operating income in the third quarter was $216.6 million, which is an $8.6 million decrease from the previous quarter, but $174.7 million higher than in the same quarter in 2003. While market conditions continued to be strong, prices fell off through the latter part of the quarter and were further reduced by the impact of the strengthened Canadian dollar on US dollar sales. Canfor says the integration of Slocan is proceeding successfully, with anticipated synergies by the second quarter of 2005.

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Tim-BR-Marts in the West has taken a “wait-and-see” attitude toward this new source of hardlines supply, choosing instead to rely on existing suppliers, especially Sodisco-Howden Group. However, it could end up becoming instrumental in more substantive consolidation.

The Ontario group, which represents 150 stores representing both traditional TIM-BR Mart dealers and commercial/industrial yards within the CID group, had $350 million in purchases. If combined with the larger Western group, which had $565 million in purchases in 2003 to 153 dealers, combined retail sales would reach close to $2 billion.

Further anticipated results of this consolidation would include: better buying and improved rebates, lower overheads, and more cohesive store planning and flyer programs across the country.

The five new stores have also added some 52,200 sq.ft. to Rona’s total retail selling space.

“It’s only mid-October, so we’re very proud to have already topped the ambitious growth target we set at the beginning of the year,” says Claude Bernier, executive vice-president, traditional and specialty stores. “We’ve got another 10 weeks to go before the end of 2004, another 10 weeks to advance our position as the Canadian leader in the hardware and home renovation industry.”

In Ontario, the new members are Windsor-based Angileri Brothers Building Materials Ltd. (with two locations) and Hook’s Hardware in Cloyne. In British Columbia, Earlys Building Supplies Inc. in Campbell River has joined as a Rona Building Centre. In Quebec, the Espérance Group has acquired the Centre de rénovation Pointe et Meunier in the Montreal suburb of Carignan and converted it to a Rona Le Rénovateur.

“Sears is the leading retailer of appliances with double the market share of our closest competitor. This format gives us the ability to extend our great appliance offering in a new way, right in our customers’ neighborhoods,” says Bob Gartner, vice-president and general merchandise manager of Sears Hardware.

These stores feature changes in other departments that include permanent displays of patio furniture and grills; the elimination of both “top stock” inventory and signs over the aisles to improve visibility and lighting; and a new assortment of hardware merchandise, the specifics of which Sears did not disclose.

Sears has only recently launched the Sears Hardware format in Canada, with three pilot stores that opened last month. The outlets, which range in size from 8,500 to 10,000 sq.ft., were former Sears Auto Centers in the parking lots of full-line department stores. These stores don’t stock appliances, and there are no immediate plans to do so. However, according to Sears Canada spokesperson Vincent Powers, “We can always learn from what’s successful in the States,” and the addition of appliances “in time” might be a possibility.

In addition, says Powers, Sears Canada is “considering” bringing in patio sets and barbecue grills into the new Hardware stores for the spring selling season.

Meanwhile, the locations in the U.S. with new appliance departments are in Connecticut (three stores), Illinois (five), Indiana (one), New Jersey (10), Pennsylvania (seven) and Wisconsin (two). During grand opening weekend, consumers could enter a drawing for a $1,000 shopping spree; a $1,000 set of Frigidaire appliances; 0% financing; discounts of $5 off a $25 purchase or $10 off a $50 purchase.

Other factors helping members grow their businesses, Taylor noted, are the retail programs and services offered by Do it Best Corp. One of the services highlighted was the doitbest.com web site, an e-commerce site for Do it Best Corp. members.

“Sales through doitbest.com continue to grow, up 50% over last year,” Taylor said. “Over half of our members have a site linked to doitbest.com and more than three million unique visitors shop doitbest.com each year.” This year, the group added a delivery service that enables online customers to pick up orders at their local store.

This news emerged as Stanley reported a 53.2% increase, to $63.9 million, in net income for the quarter ended Sept. 30. That profit rise was on sales of $665.6 million, which rose 18.9% over the same period a year ago. Through nine months, Stanley’s revenue increased 20.3% to $2.36 billion, and its profits jumped 280.4% to $278.8 million.

Much of that net gain, though, is attributable to an $81.9 million pre-tax charge against earnings that Stanley took to cover its ongoing restructuring, which included $10.1 million for its exit during the latest quarter from its MAC Direct retail business.

The company’s consumer products group has helped to drive its financial performance this year. In the latest quarter, that group’s sales increased 6.4% to $296.4 million, and its operating profit grew by 10.9% to $43.6 million. Through nine months, the group’s revenue was up 13.8% to $900.7 million, and operating profit rose 33.8% to $132.1 million.

Overall, Stanley’s net sales in the quarter from continuing operations — excluding the effects of recent acquisitions that included CST/Berger, Blick plc and Frisco Bay Industries — were up 10% to $791 million.

“Our consumer hand tools business and eight Industrial Tools and Security Solutions business units — fastening systems, industrial mechanics’ tools, industrial storage, specialty tools, laser measuring, assembly technologies, hydraulic tools, and access technologies — achieved double-digit percentage organic sales increases this quarter,” stated John Lundgren, Stanley’s chairman and CEO.

Lundgren projected that Stanley’s sales for the year would be up nearly 20%, with a two percentage-point improvement in operating margin and 35% growth from continuing operations. He expected 3%-5% organic revenue growth and double-digit percentage earnings growth in the year 2005.

KELOWNA, B.C. — The board of directors for Riverside Forest Products stated that a sweetened offer for their company made by Tolko Industries is “superior” to an offer tendered by International Forest Products (Interfor). Interfor’s $39 per share offer was seen by industry watchers as a life preserver for Riverside from a hostile $29-per-share bid that Tolko had made earlier. Interfor’s officers and directors had committed their 28% stake in their company to the Interfor bid in a lockup agreement. However, on October 14, Vernon, B.C.-based Tolko upped its all-cash bid to $40 per share, which suddenly looked a lot friendlier to Riverside’s board and investors. (Tolko already owns nearly 19% of Riverside’s stock, and has stated that two other major shareholders, Montreal-based Tembec Inc. and Van Berkom and Associates, have agreed to tender their shares to Tolko’s bid.)

HOFFMAN ESTATES, Ill. — Sears, Roebuck and Co. reported a 3Q net loss of $61 million, a swing from net income of $147 million in the third quarter of 2003. The drop was attributed to “softer retail demand, larger than expected costs associated with seasonal transitions and a slower ramp up of sales following certain business resets,” according to chairman and CEO Alan Lacy.

TORONTO — Sears Canada reports total third-quarter revenues of $1.50 billion, up 4.5% from $1.43 billion in the same quarter of 2003. Same-store sales increased 1.1%. Net earnings for the quarter, excluding non-comparable items, were $19.4 million, from $12.1 million last year. Net earnings including non-comparable items were $14.0 million.

WEST JEFFERSON, N.C. — Black & Decker‘s acquisition of Pentair‘s Tool Group is resulting in a paring down of operations, as 240 staff here will lose their jobs to factories in China. Seventy-five more jobs will be phased out by year’s end at a B&D facility in Jackson, Tenn., while another 330 are being terminated at a plant in Fayetteville, Kansas.

GLENVIEW, Ill. — Illinois Tool Works Inc. had a 23% rise in profit due to strong demand in both North American and international markets, although higher raw material costs kept results below expectations. Illinois Tool posted a net profit in the third quarter of $330.1 million, compared with $268.9 million in the year-earlier quarter. Sales in the quarter rose 17% from the year-earlier period to $2.97 billion.

BOISE, Idaho — Boise Cascade Corp. enjoyed third-quarter net income of $61.1 million, up from $32.9 million in the third quarter 2003. Sales in third quarter increased 73% to $3.65 billion, compared with $2.11 billion in third quarter a year ago and $3.40 billion in second-quarter 2004. Year-over-year sales increased primarily because of the acquisition of OfficeMax in December 2003. Sales were also aided by strong product prices in Boise Building Solutions and improving product prices in Boise Paper Solutions.

CHICAGO — W.W. Grainger Inc. enjoyed a 19% increase in earnings per share for the third quarter ended September 30, 2004, from 62 cents to 74 cents. Sales were $1.3 billion, up 8% versus the prior year’s third quarter. Net earnings were up 19% to $68 million, the highest net earnings for any quarter. Sales for the nine months ended September 30, 2004, were $3.8 billion, up 8% over the first nine months of 2003. Net earnings increased 19% to $197 million, compared with $165 million in 2003.

At Do it Best Corp., Stan Hardman has been named chairman of the board for the 2005 fiscal year. Hardman is the co-owner of seven Hardman’s stores throughout W.V. He succeeds Bruce Ellis, of Roswell Lumber Do it center in Roswell, N.M.

Kmart has announced the hiring of a fast-food executive, Aylwin Lewis, as its new president and CEO. Lewis, 50, was formerly with Yum Brands, which owns and franchises KFC, Pizza Hut, Taco Bell, Long John Silver’s and A&W. He replaces Julian Day, who presided over the company during its time under bankruptcy protection last year. Day remains on the Kmart board of directors.

Mike Springer has been appointed vice-president sales at Horizon Plastics, a custom molder based in Cobourg, Ont. (905-372-2291)

John T. Butcher, executive vice-president and CFO of Sears Canada Inc., has announced his intention to retire from at the end of the year. Butcher has been with the company since 1976, serving in various roles within the finance side of the business, before assuming his current assignment in 1996. Sears is currently conducting a search for a replacement.

The Conference Board has released its Index of Leading Indicators, a barometer of future economic activity, showing that fell 0.1% in September —the fourth consecutive monthly decline, suggesting that the recovery may be cooling. The Index was down 0.3% in August and July, and down 0.1% in June.

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“We’re starting to get some interest from Quebec dealers, and we had many prospects at our fall dealer market,” says Paul Straus, vice-president and CEO of Home Hardware.

Does he anticipate a magic number for Home Hardware there? “We’ll take as many as we can get,” says Straus, “but we have no real target.”

The move to more direct Asian sourcing ties in with TruServ’s efforts to increase its range of private-label products. “We will be growing our private label to complement the national brands, and when we talk about our private label, it will be under both the True Value name itself and some of our other proprietary brands, such as Green Thumb in the lawn and garden area — or Master Plumber, Master Mechanic, Master Electrician — and we’ll determine what’s right for that part product category,” says Lieberman.

“We absolutely do see growth there, but we only want our name associated with quality products.”

For a $50 fee, a landscape designer will come to one’s home and supply a plan for the yard or garden. The fee will be applied as a credit against any landscaping jobs done by the customer. Those jobs can be arranged through a variety of companies in Toronto that provide products and installation.

The latest addition to Home Depot’s roster of installed services is a “home handyman,” available for small jobs and repairs around the home. This new program is being tested in 10 stores in Toronto, as well as the new urban-concept Park Royal store in Vancouver. Advertising for the service hit the airwaves earlier this month, but timing for a national rollout has not yet been released.

The availability of Builders FirstSource is the latest one to catch Lanoga’s attention, observes Paul Hylbert, president and CEO of Lanoga. “We’re always looking for acquisitions, he told Hardlines. He expects growth to come organically, accounting for “high single-digit growth,” as well as continued acquisitions.

“We’ll continue to plan and grow and try and be consolidators, rather than sit on the sidelines,” Hylbert adds.

His enthusiasm for growth reflects his company’s confidence in the industry, and in the market factors driving it. “We see the rest of the year continuing to be good, and we see next year’s level as being strong, as well, though not as strong as this year.”

Tim Farrell, president and CEO of the AHMA, referred to insufficient attendance in Chicago, and to the allegations of mismanagement by Reed, which have resulted in AHMA filing a lawsuit, as reasons for ending the AHMA’s show: “most importantly, the best interests of our members and our industry, also, the decline of the Hardware Show for the past several years because of the alleged improper management practices of Reed and the evolutionary changes of our industry.”

However, in the end, the National Hardware Show enjoyed renewed success when Reed finally did move it to Las Vegas in spring 2004. Meanwhile, AHMA’s own show, which remained in Chicago, could not muster enough exhibitors to carry it into a second year, says Farrell.

“We made some changes, including relocating the show to Las Vegas,” says Rob Cappiello, president of the NHS for Reed Exhibitions, “and the response has been very, very positive from the industry.”

Despite the lawsuit, does Farrell foresee any reconciliation with Reed? “We’re very open to affiliations with organizations that create value for our members and our industry,” he says. “We’re not open to affiliations with organizations that, as we allege in our lawsuit against Reed, destroy value for our members and our industry.”

Cappiello does not express concern over the merits of the lawsuit, saying it’s “without merit.” In fact, he says his organization remains open to any future affiliations. “Our door is always open, if the AHMA wants to talk to us,” he says.

In a prepared statement, Universal’s CEO Bill Currie explained that his company’s DIY sales were soft due to increases in lumber costs, which may be prompting homeowners to delay improvement projects; the hurricanes that halted improvement projects in Florida and the Southeastern United States; and the higher cost of treated wood due to industry changes in the treating compounds, which may be affecting consumers’ purchasing decisions.

The Times referred to this as “The Home Depot provision,” in that Senator Zell Miller (D-Ga.) argued for the tariff reduction, claiming that the tariff wasn’t needed because no ceiling fans are made in the U.S. anymore. Miller contended that retailers such as Home Depot — which sells nearly half of all ceiling fans bought in the U.S., and whose Hampton Bay line is the best-selling ceiling fan brand in the world — needed to charge higher prices to defray the impact of the tariff.

Nearly all of the fans that Home Depot sells are made in China, and the timing of this legislation coincides with the retailer’s recent announcement of its plans to expand into that country.

COLOGNE, Germany — Koelnmesse, the giant trade fair organization based here, is beefing up its show in Shanghai, Practical World Asia, with the addition of a major lawn and garden component. The show is being held this week from October 19-21 in association with the China International Hardware Show, in which Koelnmesse became an equity partner this year. Beginning in 2005, a new “World of Gardening” segment will join “World of Tools,” “World of Security, Locks and Fittings,” and “World of Home Improvement/DIY.” Koelnmesse has been organizing Practical World Asia since 2003.

MONTREAL — MAAX Corp. had 2Q net sales of US$136.1 million, compared with US$127.4 million in the second quarter of the previous fiscal year. Excluding the impact of the fluctuation in the U.S. dollar in relation to the Canadian dollar and certain non-recurring items, consolidated net sales were up 10.5% over the second quarter of last year. For the first half of fiscal 2004, net sales grew 17.2% to US$272.3 million.

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In its heyday, that show was one of the biggest trade shows held at McCormick Place. In 1999, more than 67,000 people came into the city, generating an estimated $85 million for Chicago. The show declined steadily after that, however, and dissatisfaction over how — and where — to operate it, drove Reed and the AHMA apart. Reed went on to relocate the NHS to Las Vegas in May 2004, just weeks after the AHMA held its first show.

In a statement posted on the AHMA website, Tim Farrell, president and CEO of the Association said this: “It’s a tough decision because the Hardware Show has been such an important event to our members and our industry, and our association for such a long time, but that doesn’t change the fact that it’s the right decision.”

While no specifics were offered about what future direction the AHMA will take on behalf of its members, Farrell’s statement went on to say, “We’ve always made decisions in the best interests of our members and our industry, and this is one more example. We’re excited about pursuing what’s most valuable to our members and our industry now and in the future, not holding on to something that was valuable to them in the past.”

Rob Cappiello, president of the National Hardware Show for Reed, says the cancellation of the competing show won’t have much impact on his event. “We were sold out last year, and before this announcement we were already 86% sold out for next year.” He hopes that having one show will result in a little less confusion for the industry.

But even Cappiello regards the termination of the Chicago show as a blow to the industry: “From an industry point of view, there’s always a little bit of sadness when a show disappears.”

Now, Home Depot is building these smaller stores in smaller towns. In fact, three of them are scheduled to open by the end of 2Q 2005. The first one will be in Spruce Grove, Alta., north of Edmonton, followed by Chatham, Ont., and another site in Ontario, still to be announced.

“We’re going to build these all over,” says Annette Verschuren, President of Home Depot Canada and acting President of the Expo division.

A number of stores that opened over the past few months in Canada, including Brandon, Man., and Sioux St. Marie, Ont., and Trois Rivieres, Que., were all around 80,000 sq.ft., plus 15,000 sq.ft. of garden center.

The company will continue opening traditional sized stores, as well. Expansion efforts in Atlantic Canada will feature these, following the erection of a store in Charlottetown, the first (and likely, the only) big box on Prince Edward Island. New Brunswick, which already has a full-sized store in Moncton, will be the site of at least three more stores, says Verschuren, including Fredericton and Saint John. A store is also planned for Sydney, N.S.

“This marks the beginning of Lowe’s relationship with the state of Wisconsin,” said Mike Mabry, Lowe’s executive vp-logistics and distribution. “This facility will support our growing store base in the Midwest, and help us deliver quality millwork products at an everyday competitive price to our customers.”

Lowe’s has two other millwork facilities — in White House, Tenn., and Thomasville, N.C. — that have opened within the past 15 years, according to Chris Ahearn, a Lowe’s spokesperson. Lowe’s will open its first store in Wisconsin later this year in Milwaukee, and its second store, in Plover, next spring.

Wisconsin Governor James Doyle was quoted as stating that his state’s investment was in line with his administration’s “Grow Wisconsin” initiative. The state is also providing Lowe’s with a $225,000 loan that the dealer won’t be required to repay if it operates the plant for 10 years.

The number of visitors is also expected to rise from last year, to around 40,000. Visitors to can register for the combined Practical World Asia/China International Hardware Show on the Internet at www.practicalworld-asia.com.

Interfor’s offer is subject to 51% of the shares of Riverside being tendered, the receipt of certain regulatory approvals and the satisfaction of various customary terms and conditions.

This agreement represents the latest in a series of takeovers within Canada’s forest products industry. These include Canfor‘s acquisition of Slocan Forest Products Ltd.; West Fraser Timber buying Weldwood; and Interfor acquiring three Washington state mills owned by Crown Pacific Partners.

According to Pam Danziger, president of Unity Marketing, and author of the study, natural decorations like pumpkins and cornstalks on the front porch are being joined by Halloween lights — Christmas fashion — around the eaves, and lighted, even moving, wire sculptures in the yard.

Inside the home, the focus is on tabletop centerpieces and decorative bowls for candy, candles and Halloween-themed candle accessories and paper and party decorations, Danziger says.

For more info on Unity Marketing’s new study of the decorations market, Seasonal Decorations Market Report, 2004: The Who, What, Where, How Much, and Why of Holiday Home Decorating, click here.

MESQUITE, Nev. — Do it Best Corp. will break ground on its newest retail service center here on October 25. This will be the eighth for the dealer-owned wholesaler, joining the ranks of facilities in Dixon, Ill.; Cape Girardeau, Mo.; Montgomery, N.Y.; Medina, Ohio; Woodburn, Ore.; Lexington, S.C.; and Waco, Tex. The Mesquite facility will service 250 stores throughout the Southwestern United States.

OLYMPIA, Wash. — We already know hurricanes are good for business, but volcanoes? It seems hardware dealers in communities near Mount St. Helens are having a run on dust masks and filters. The volcano has been spewing steam and ash at an increasing rate over the past several days, attracting a rash of tourists in the process.

SAINT-ANTONIN, Que. — Bargain Building Materials broke ground last week on a construction project at its head office here. The expansion, which is scheduled for completion by December 2004, represents a total investment of $550,000. In addition, the company has invested another $700,000 in its distribution center in Lachute, Que. to improve warehousing capacity by 20,000 sq.ft. Expansion efforts have been driven by the growth of Bargain’s dealer base, which has reached 15 corporately owned stores, plus five independents operating under the retailer’s “Authorized Retailer” program in Quebec, Ontario and the Maritimes.

MISSISSAUGA, Ont. — An application by the United Food and Commercial Workers Union to unionize Wal-Mart associates in Terrace, B.C. has been dismissed by the British Columbia Labour Relations Board. In its decision, the Labour Board ruled that the union does not have the minimum support among the store associates required by the B.C. Labour Relations Code to warrant the holding of a representation vote on the issue of unionization.

WINNIPEG — The recent opening of a True Value Hardware store in Brussels, Ont., marks the latest expansion effort by TruServ Canada, the dealer-owned co-op based here. The store has grown from 1,500 sq.ft. in 1945 to 8,000 sq.ft. today, and the switch to True Value has enabled the dealer to expand a number of lines, especially paint.

ISSAQUAH, Wash. — Costco Corp. enjoyed a 24% increase in profits for its fourth quarter, with same-store sales rising 8%. Net sales were up 11% to $14.8 billion.

Andrew Sarch is back from China and tells us he’s taken on the role of general manager in Canada for JinDing Group Co. Ltd. He’ll be responsible for marketing, sales and service to support and grow the company’s business in Canada. Prior to this, Sarch spent 25 years at Canadian Tire Corp., most recently as divisional vice-president in the marketing division. With a factory in Jiangsu province in China, and offices in Shanghai, Holland and Canada, JinDing Group is reportedly the world’s largest OEM manufacturer of portable electric power tools, supplying more than 200 brands to some 100 countries around the world. (905-231-9933)

William Bolton, a market research executive with an extensive background in retailing, is now the first non-dealer member to be elected to Ace Hardware Corp.‘s board of directors. Bolton is currently a consultant and advisor with Leo J. Shapiro & Associates, a Chicago-based market research firm whose clientele has included Home Depot and Sears. Over the past three decades, Bolton has also served in executive capacities with SuperValu, a grocery wholesaler; Bruno’s, American Stores and Jewel Food/Osco Stores. Since October 2003, he has served on Ace’s board in a retail advisory capacity. His term on Ace’s board runs through 2007, when he will be eligible for re-election.

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Frank estimates that the sale of Builders FirstSource could bring a price equal to seven or eight times its $115 million in projected cash flow for 2004, or between $805 million and $920 million. He also states that Builders FirstSource is on track to generate $2 billion in revenue this year, which would represent an 18% gain over 2003 sales.

Despite skepticism over Builders FirstSource profitability, which has been voiced by competitors for years, Frank says the company has doubled its cash flow in the last two years. During that time, it has been consolidating its operations, with an eye toward cost control.

“Builders FirstSource is firing on all cylinders — it’s having a great year — and is really hitting its stride,” Paul Levy, JLL’s founder, told Hardlines. Referring to Floyd Sherman, BFS’s CEO, Levy says, “The management team has come together under Floyd’s leadership. It has become one company. With its pro-only model, there are lots of opportunities for growth, especially as homebuilders [which are one of BFS’s primary customers] get larger.”

Levy went on to explain that JLL Partners is selling its holdings in BFS to give the retailer a chance to hook up with a larger partner, one that can help take it to the next level of growth. He expects that this will be a five-year process. “We aren’t in the position, financially, to be able to stay on as investors for that long.”

Levy added that JLL Partners decided against taking BFS public because that process would have required the equity firm to hold onto stock for three or four years. The Deal.com stated that JLL has invested $230 million into Builders FirstSource between 1998 and 2002, and that it hopes to recover between 2.7 and 3.2 times that investment if it manages to sell the company within this price range.

NORTH VANCOUVER, B.C. — The first urban neighborhood store to enter Canada is also just the third overall in the Home Depot chain. But the company has high hopes for the future of the concept, a scaled down retail footprint with a merchandise mix tailored to the tastes and lifestyle of the city dweller.

The setting was a posh fundraising reception, showcasing the retailer’s commitment to Rick Hansen‘s Man in Motion Foundation. Hansen made history and became a national hero when he travelled across around the world in his wheelchair in 1985, raising $26 million for spinal cord injury research. He was on hand with Verschuren, and Home Depot’s vice-president merchandising, John Costello, up from Atlanta to participate in the proceedings himself. Pop musician Jann Arden ended the evening with a private concert for the crowd.

The event also reflected Verschuren’s desire to realize a retail concept that would give a community the means, both imaginatively and practically, to transform their homes and their lives. “This store has been 10 years in the making,” she told Hardlines just before the event got under way.

The Home Depot at Park Royal center, directly across the Lion’s Gate Bridge from Vancouver’s Stanley Park, is smaller, more upscale, more décor driven than its big box predecessors. It has very little in the way of building materials, the space being devoted instead to kitchen and bath, lighting — lots of lighting, ceiling fans, locksets, décor bath accessories, and stuff one doesn’t usually see in a big box, but stuff that’s fast becoming regular fare to Home Depot shoppers — including storage, cleaning products and large appliances.

But this urban concept takes décor and accessories to a new level: knick knacks, dried flowers, vases, window coverings, and enough tea lights to fill an Ikea store.

A common feature of the urban concept, as it shoehorns its merchandise into the smaller footprints of scarce, costly downtown real estate, is to go up, not out. In Chicago, for example, an urban store in the toney Lincoln Park neighborhood is on two full floors. The new North Vancouver store has a mezzanine around the edge, giving a clear view of the centre of the store.

Ironically, those earnings projections were made at a time when Lowe’s has been trying to stimulate more sales by promoting its “Everyday Lowe Price” guarantee, which is all over its biweekly ad circulars and TV commercials. Company officials told analysts that the chain has rolled back prices on more than 1,200 items in its stores recently. They also revealed that Lowe’s is testing new checkout technology of the kind that rival Home Depot installed chain wide last year.

The two giants continue to wage pitched battles for the hearts, minds and disposable incomes of customers across the U.S., especially in larger metro markets where Lowe’s is focusing its expansion. It plans to open 150 stores in 2005, and 160 in 2006, during each year its revenue is projected to increase by 16%.

Several analysts responded positively to Lowe’s message, and recommended that their investor clients buy the retailer’s stock. However, one of Lowe’s biggest recent boosters, Aram Rubinson of Bank of America, maintains his “neutral” rating for the company, even as he raised his own estimates about that stock’s selling price to $56 per share (it was trading at $54.82 on Thursday morning).

But any efforts to unite these members — or any other groups — more substantively have yet to bring results.

“I have gone on record by stating that there are too many independent buying groups in Canada which compete against each other,” says Tim Urquhart, president and general manager of Tim-BR-Marts.” He joined as head of the group at the end of last year, but for years before that, the groups have been talking about further unification.

That includes groups such as Castle and Sexton, who are members, along with five other groups, of the umbrella buying organization, the Reliance Buying Group. In fact, more than one buying group insider over the past couple of years has admitted that “everyone is talking with everyone,” and many of the groups, agree, at least philosophically, in the benefits of one group joining with another.

Meanwhile, Reliance members have been using their combined buying power to negotiate better with key commodity suppliers. Matreco members have been pulling together their marketing and branding efforts more closely. “We continue to be aggressively marketing the TIM-BR Mart program, expanding the TIM-BR Mart program,” says Tom Smith, president and CEO of AWARD. But he doesn’t expect to go as far as his counterpart in Ontario, which converted the operating name and branding for the majority of its dealers from Homecare to TIM-BR Mart Ontario. Although about two-thirds of AWARD’s 95 dealers already carry the TIM-BR Mart banner, Smith plans to co-brand AWARD and TIM-BR Mart.

The specter of a common foe, traditionally the big boxes, and now Rona, is reinforcing a sense of purpose, at least for the likes of Urquhart, who believes further consolidation will provide direct benefits for the groups. “It is time for the independent dealers to band together and recognize their strength,” he told Hardlines. “To that end, we are talking with anyone who is willing to do the right thing for the dealers they represent.”

For now, however, growth for Urqhuart’s group continues to come one dealer at a time. “At this point, we do not have an agreement with any other buying group in Canada. What we are doing is growing our business by recruiting heavily in Western Canada, and the addition of 32 new locations (so far) attests to that.”

Other sites included Home Hardware’s own distribution facilities in Debert, N.S.; St. Jerome, Que.; Kitchener and St. Jacobs, Ont., and Wetaskiwin, Alta. “Our dealers and staff agreed that the best way to celebrate our anniversary was to create a living legacy, by rebuilding the local scenery in some of the many communities that we call home,” said Paul Straus, vice-president and CEO of Home Hardware Stores in a prepared release.

Home Hardware has worked with Tree Canada Foundation for the past six years. In addition to the planting of thousands of native evergreen seedlings, the company has donated more than $70,000 to Tree Canada.

Additionally, Taylor has put together a “Trusted Contractors” program that offers a wide range of local tradesman — from carpenters to plumbers. The program includes only trusted contractors with whom Taylor has developed a long-standing relationship.

This local lumber and hardware store also launched “Taylored to Non-Profits,” a promotion that offers special discounted pricing for non-profit organizations. Recently, it even sponsored the “Great Doghouse Construction Contest” at the Marshfield Fair, raising funds for the local animal shelter.

The retailer is also focused on local job creation, with a program of internships and part-time opportunities for high school and college students. These student interns get on-the-job training throughout the year.

Manufacturers participating in the DIY Council’s pavilion include: Allway Tools, Gardner-Gibson Co., H. F. Staples Co., Intermatic, Iron Out, Johnson Level & Tool, Rust-Oleum, and Zircon. Products range from the basics to the unique and unusual, including everything from mosquito control products to levels and other tools, including the latest in electronic tools. Other DIY Council members who will be exhibiting on their own or with their agents/distributors include AccuSharp International, Arrow Fastener, Better Living Products, Empire Level, and Knape & Vogt.

In addition to those members exhibiting with the Worldwide DIY Council, other members are exhibiting on their own or with local agents/distributors. The DIY Council will also host two of America’s largest hardware wholesalers, Ace Hardware and TruServ Corp.

For more information about the Worldwide DIY Council, click here.

Other acquisitive companies, such as The Strober Organization or Bradco Corp., which recently bought a piece of the Wickes company, may decide to throw their hats into the ring, if for no other reason than to test the waters. Industry publication The Deal.com identified several equity companies that could be buyer candidates, too. Levy said that preliminary interest in Builders FirstSource has been strong, “and there’s been enormous interest from the financial community.”

Another possible buyer could be Home Depot, which has been acquiring pro-oriented companies for its Home Depot Supply division, and has stated publicly its goal of increasing significantly its market position as a supplier of building materials to contractors and homebuilders. Company officials have stated privately that Home Depot’s goal is to build its pro business to represent as much as half of its annual sales eventually.

Paul Levy, founder of JLL Partners, the private equity firm that owns 90% of Builders FirstSource, told Hardlines that Builders FirstSource could be a perfect fit for Home Depot. This would allow the warehouse giant to achieve top-to-bottom penetration into the entire housing and home improvement sectors. Levy also believes that Home Depot would let BFS’s management team run the business more independently than might another large pro dealer, if it were to acquire the company.

He adds that it’s “realistic” to expect that the buyer for Builders FirstSource would emerge and a deal would be signed by the end of this year.

MINNEAPOLIS — Waters Instruments Inc. has acquired, through its Zareba Systems Europe subsidiary, Rutland Electric Fencing Co., the largest manufacturer of electrical fencing products in the U.K. A family owned business, Rutland has 55 employees and annual sales of approximately $9 million. Waters Instruments just finished fiscal 2004 with sales of $24.2 million, up 5.2% from fiscal 2003. The company’s goal is to reach $50 million by 2008.

TOLEDO, Ohio — Owens Corning will start building a greenfield light-density fiberglass insulation plant in the Southeastern United States. The facility, which will have a capacity for 150 million pounds per year, is part of OC’s commitment to strategic capacity expansions. Production could begin as early as the third quarter of 2006.

TOWSON, Md. — Black & Decker has received the okay from all regulatory agencies governing anti-trust rules, for the purchase of Pentair‘s Tools Group, which includes the Porter-Cable, Delta, DeVilbiss Air Power, Oldham Saw, and FLEX businesses. The purchase price will be approximately $775 million in cash, and it’s expected to close in early October. The Tools Group’s sales and operating profit for 2003 were $1.08 billion and $82 million, respectively. B&D expects to gain annual cost savings of $65 million by the end of 2007.

LONDON, U.K. — Kesa Electricals, the division that was spun off of Kingfisher as its own entity last year, enjoyed a sales increase of 5% to £1,667.3m in the first six months of the year. Profit was up by 3.6% to £54.7m, with a 7.4% increase in constant currency. In the U.K., Comet saw sales increase by 7% to £637.7 million, growing its market share despite increased competition from other retailers. French chain Darty increased sales by 24% to £653.4 million.

HOFFMAN ESTATES, Ill. — Sears, Roebuck and Co. has closed the acquisition of ownership or leasehold interest in 50 stores from Kmart Holding Corp. Purchase price was $575.9 million, against which Sears has paid 30%, with the remaining 70% to be paid upon Sears taking possession of the stores. Sears will take possession of the stores in spring 2005 and the majority of the stores are expected to be converted by fourth quarter 2005. Sears will also acquire six additional off-mall locations from Wal-Mart.

LONDON, U.K. — Wal-Mart has admitted that it has sent a team of analysts to Russia to check out possible expansion there, says Reuters. The likely location for a first opening would be in St. Petersburg. “We’ve had a team in Russia looking into the possibilities, but we’ve not made any announcements and we will not comment on speculation,” said Bill Wertz, a Wal-Mart spokesman in the United States.

MONTREAL — Forest giant Tembec has acquired 665,000 common shares of Riverside Forest Products Ltd., representing 7.05% of the outstanding shares of Riverside. The purchase was made for investment purposes.

CHICAGO — Wholesale supplier Grainger is implementing SAP enhancements to its supply chain. At a meeting of analysts held at Grainger’s newest distribution center in Robbinsville, N.J., last week, Grainger chairman and CEO Richard Keyser provided an update on the company’s technology investments, including its SAP installation and telephony program. These two initiatives are designed to help the company become more efficient at saving customers time and money when purchasing facilities maintenance products.

August construction spending reached $1,015.3 billion at a seasonally adjusted annual rate, up 0.8% from July and up 10.1% from August 2003, the Commerce Department said. Non-residential construction was $456.4 billion, down 0.2% from July but up 5.2% from one year ago. Falling mortgage rates boosted private construction and private residential construction to record highs.

Consumer confidence, as measured by the Conference Board’s Consumer Confidence Index, fell 1.9 points to 96.8, well below analysts’ expectations of 99.5. It’s been as high as 144.7 in May 2000, when the job market was strong, but has been volatile since the economy emerged from recession in November 2001.

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MEMPHIS — Anticipating his new role as president and CEO of Orgill, Ron Beal is nothing but optimistic about the direction of the company.

Beal, who is currently senior vice-president and general manager of Orgill’s hardware division, will change titles at the beginning of the new year (see People on the move in this issue for full personnel details).

The new warehouse follows on the success of a DC that went into Tifton, W.Va., four years earlier. The success of that facility in expanding Orgill’s reach into the Northeast gave the company the confidence to expand into the Rocky Mountain region of the Northwest with the Utah DC, which will be Orgill’s fifth.

“We’ve done a lot of research before committing to the distribution center,” says Beal. “We have some customers already in California, Nevada and Utah, but they are currently being serviced out of Memphis.” He doesn’t see that as a cost-effective strategy in the long term, hence the need for the new DC.

The expanded presence in the West will also add to Orgill’s credibility as it recruits new dealers to be part of its independent wholesale distribution network. “We’re confident that the business is there, and as we speak, we’re putting together our sales force in place.” The region is being serviced right now by a team of 18, which will be expanded as needed, he says.

Lowe’s expansion strategy mimics the Wal-Mart approach to distribution centers to control the even flow of products. Over the past several years, Lowe’s has built distribution facilities as it reaches critical mass in its store count in a given region. In June, for example, the company opened a 200,000-sq.ft. flatbed DC on 56 acres in Beaumont, Calif., which is handling 70 flatbed semi-trucks a day initially, but has the capacity to handle 140 as Lowe’s expands in California’s Inland Empire region in the south.

Lowe’s operates 11 flatbed DCs and plans to open one or two more this year. It also operates nine massive regional DCs — some larger than one million sq.ft. — and is scheduled to open its 10^th in Poinciana, Fla., in the third quarter of this year, and its 11^th in Plainfield, Conn., next year.

Paul Straus, vice-president and CEO of Home Hardware Stores, says the group’s potential for growth is with the expansion efforts of its own members, either through larger, renovated premises or the addition of stores. “It’s one of the areas we still see for greatest growth is with our existing dealers. We really want to help our existing dealers grow.”

And, he says, there’s an opportunity in the cities. “We’ve got potential in the cities and we’d like to grow in the cities, as well as our rural markets.” However, in those urban markets, available real estate is often tough to come by, so Home Hardware must wait for another business to vacate a building.

Home is not alone among Canada’s Big Four retailers, which collectively comprise almost half of retail sales in this industry. Home Depot will open its first “urban neighborhood” store in Vancouver on Thursday, an upscale, décor-oriented number on two floors in the Park Royal power center. Rona continues to target major cities, including Calgary and Toronto, for big box locations. Even Canadian Tire has gotten excited about the success its experiencing with a large “metropolitan” store in Kingston, Ont. In every case, these big box stores target the upscale, wealthy, often childless urban consumer.

Roy Perkins

Like many Rona dealers, Perkins enjoyed a windfall when the company went public in November 2003. The value of his shares soared, giving him the financial resources to invest in expanding the business. Today, it includes a Kitchen & Bath Showcase, along with the traditional Home Centre.

Thanks to strong emphasis on customer service, aggressive advertising and marketing within the community, Perkins’ business is flourishing — despite the presence of big box stores in both Ottawa and Kingston, Ont. And he is confident the business will weather the arrival of a new Home Depot, slated to open right in his own town in the near future.

Sixty of the top 100 PGA Tour money winners have signed on to play the event, which would be a considerable improvement over its inaugural year, when it drew only one of the sport’s top 21 earners, according to the web site. To further increase interest among the pros, Hardy launched an aggressive campaign to woo them, with gifts, free travel and richer prize money. Any golfer who commits to the event will be flown free of charge, along with four others, to the World Golf Championship event in Ireland. A golfer can bring his wife, caddie, agent, child or all the above, all for free. The deal is valued at $40,000 per golfer. Hardy also offered participants luxury housing in a new resort hotel, Falling Rock, where rooms normally go for $350 to $800 per night.

Demand for organic consumables will grow nearly twice as fast as conventional product sales, but organics will remain a small percentage of the entire market. While growth in bio-pesticides will decelerate, demand for organic fertilizers, which comprised 20% of the organic market in 2003, will grow nearly 15% per year.

Sales of conventional pesticides, which make up more than 30% of the market, are expected to be sluggish.

One cause for concern, though, was the 5.5% decline in permits in August, compared to July, to an annualized rate of 1,952,000 units. That permit number was even slightly below the August 2003 figure. Whether that indicates that homebuilders are finally about to pause a bit to catch their breath, or are simply building at a rate that will sustain demand, remains to be seen.

SPECIAL REPORT — Wal-Mart has admitted that it has sent a team of analysts to Russia to check out possible expansion there, says Reuters. The likely location for a first opening would be in St. Petersburg. However, Wal-Mart refused to comment on their Russian foray. If and when it enters Russia, it will be in good company. Ikea has targeted that country for growth, and German-based home improvement retailer OBI has opened its first store there.

VANCOUVER — Rona‘s North Vancouver store has been re-opened as a Rona Home Centre event after undergoing a two million dollar facelift. Under the supervision of manager Al Shamley, the North Vancouver RONA was entirely redesigned from top to bottom. It features the “boutique concept”, which is unique to RONA among the home renovation industry. The North Vancouver store includes brand new paint and décor, lighting and kitchen boutiques. Located at 1160 East 3^rd in North Vancouver, the newly renovated 39.850 sq.ft. stores is part of Rona’s efforts to invest in its Western operations. The store in Vancouver’s Granville neighborhood got a similar facelift recently.

ATLANTA & VANCOUVER — Home Depot is going to donate more than 250,000 volunteer hours through community service projects next week, in a series of volunteer community improvement projects throughout the United States, Canada, Mexico and China. All this week, volunteer staff from Home Depot will work with national non-profit partners Hands On Network and KaBOOM! on everything from building playgrounds and creating walking trails to painting school murals and landscaping in public parks. In addition, the company has announced the donation of $3 million in grants, tools and supplies to help hurricane victims in Florida.

ATLANTA — Home Depot has unveiled a program to recruit military veterans at its stores. Joining forces with the U.S. Departments of Defence, Labor and Veterans Affairs, the giant retailer will provide career opportunities for veterans interested in a new career. The program includes separating active duty service members, national guard members, reservists and military spouses. The U.S. Department of Labor will make Operation Career Front information available through its 2,000-plus One-Stop Career Centers throughout the country.

LITTLE ROCK, Ark. — Wal-Mart is getting sued, this time for discrimination against blacks. The suit was filed by Daryal T. Nelson of Coldwater, Miss., in U.S. District Court here. It alleges that Wal-Mart rejects and discourages black applicants for truck-driving jobs at the chain’s distribution centers in 12 Southern states: Arkansas, Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia. Nelson wants to turn this into a class-action suit.

Steve Stephens has been appointed director of marketing for The Toro Co., Irrigation Division. In his new role, Stephens will develop and implement the strategic marketing plans for all irrigation division product lines, including Toro residential/commercial and golf products, and Irritrol Systems brand products. Prior to joining Toro, Stephens was vice-president, operational marketing, for Centex Homes. He also held a number of marketing positions with Black & Decker.

At Western Forest Products Inc., Reynold Hert has been appointed president and CEO. He assumes his new duties with WFP at the company’s Duncan, B.C., office effective October 4, 2004. Hert joins WFP from Weyerhaeuser Canada, where he has spent 26 years in various roles, most recently as vice-president, Canadian Forestlands. Western Forest Products is an integrated Canadian forest products company and the second largest coastal woodland operator in British Columbia.

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With the aid of Jim Inglis, former vice-president from Home Depot’s Atlanta office, Sodimac effectively transformed itself from a traditional home center chain into a company that offered an alternative to the big box, with careful focus on two distinct customer groups, women and pros. Without copying Home Depot’s format, Sodimac tripled the amount of SKUs available to contractors to ensure a one-stop shopping environment. The home center side of the business was enhanced “to make it extremely attractive to the female,” Aguero explained.

Both Aguero and Inglis shared their stories and insights at the Conference, capping off two days of presentations by analysts, retail experts and industry execs.

SPARTA, Wis. — A 25,000-sq.ft. home improvement store here called All American Do-it Center became the first to be opened by a dealer-member of Do-it Best Corp. with help from the buying group’s RetailSTART! program.

Brian Buswell, president of All American Do-it, said the help he got from the co-op’s two field staffers who managed this project, included market and site analysis, demographic research, project financing and assistance with matching the store’s inventory with the market’s needs.

To participate in RetailSTART!, a dealer-member must have at least two stores (All American is Buswell’s third), and the new store must be at least 5,000 sq.ft. For this fiscal year (which ends June 2005), Do it Best had originally planned to undertake 50 RetailSTART! projects. Already, says David Heine, vice-president of retail development, the company expects to exceed that target.

SPECIAL REPORT — Day two of the recent Hardlines Conference Series featured an all-American success story. Joe Scarlett, chairman of Tractor Supply Co., outlined his company’s fantastic growth against a backdrop of growing rural populations and a focused niche in farm and rural hardlines sales.

Maintaining a corporate culture is a major part of his company’s success. That culture earns a high level of trust from customers. “We hire our customers,” Scarlett added, “farmers, and ranchers, horse riders and welders. With these people in our stores, we can walk a customer through just about any project they may encounter.”

Recently voted number 43 on Fortune‘s list of America’s 100 fastest growing companies, Tractor Supply must now keep pace with that growth. “Our biggest challenge over the next four to five years is the selection of people and maintaining our culture.”

Even if interest rates start to climb, he adds, the increase will not be sufficient to deter home buyers.

The new stores, which range in size from 8,500-10,000 sq.ft., represent at least two times the 4,500 sq.ft. typically devoted to hardlines in a Sears department store. They have an interior circular service area, with products laid out like a full-line store — and with a similar look. The stores will have a heavy focus on power and benchtop tools, with almost 90% of the selection under Sears’s own Craftsman brand. Other brands, including DeWalt, will also be present.

Other categories that get showcased include outdoor power equipment and a broader range of small and builders’ hardware than is typically found in a department store.

New for Sears is the introduction of workshop storage, called “Craftsman Garage Storage Solutions.” Products include shelving, mobile cabinets, and storage components. “It offers us some versatility that differentiates us from other brands,” says Power.

If the new store format performs well in the three test markets, Power expects it to be rolled out on a more widespread basis eventually.

While Sears Hardware has a counterpart in the United States, another off-mall concept does not. Two Sears Coverings stores will also be launched, one in St. Catharines, and the other in Mississauga, Ont., by late October or early November. These will feature carpeting, hardwood flooring, paint and wallpaper, and window shades and blinds.

The third format to watch for is Sears Appliances and Mattresses. Three Ontario stores are expected to open before year’s end, starting with Stoney Creek in early November, followed by Burlington and Oshawa. Another store, in Scarborough, will open in spring 2005.

“Sears is strong in these businesses in our main stores, and this gives Sears the way to have these products at the power center without going to the mall,” says Power. “We want to get to people closer to where they live — that’s the strategy.”

Sears plans to open 30 new-format stores, including Sears Wellness stores, by the end of 2005. They will be located mainly in power centers and high-traffic strip malls.

Consumer demand is driving the push to get energy-efficient products on the shelves, says Ian Cleghorn, a merchandiser for Home Depot’s electrical division. For example, in the last three years, he’s seen huge growth in the popularity of compact fluorescent bulbs. “In dollars, it’s gone from 3-5% three years ago to close to 20% of the category,” says Cleghorn.

Jeff Porter, national sales manager for Leviton, which makes outdoor lighting products, agrees that sales of energy efficient products are soaring. “In five years, solar has come to account for 60% of our outdoor lighting sales.”

Consumer interest in these categories will continue to affect the mix of products Home Depot offers its customers, says Cleghorn. “This year, for the first time, Home Depot will not carry conventional Christmas light bulbs. We’ll only carry LED lights.”

Home Depot is also experimenting with a program called “The Power of One”, under which it commits to purchase $1 worth of renewable energy for every Philips 16W marathon mini-household energy-saving bulb purchased in Ontario until the end of October.

Rona is investing in both the Home Centre format and Rona Building Centre, which features somewhat more contractor emphasis. Both formats have been used to replace existing Rona Cashway stores in Ontario, however, the latest re-opening there indicates Rona is still maintaining the Cashway name, too. In Simcoe, Ont., a refurbished store was re-opened last week, keeping the Rona Cashway banner. The 22,000-sq.ft. store features more than 20,000 SKUs.

“Every year, Rona expands, renovates and updates about 20% of its 530 points of sale across the country,” says Claude Bernier, executive vice-president of traditional and specialized stores for Rona, in a prepared release.

According to a prepared statement, National insures 301,260 homes and 304,917 vehicles in Florida.

In related news, Lowe’s has re-activated its in-store customer donation program to support the American Red Cross Disaster Relief Fund. Through September 20, all Lowe’s stores on the Gulf and East coasts served as official cash donation sites for the fund. Lowe’s is matching customer donations dollar-for-dollar, up to $1 million.

ATLANTA — Home Depot will sell $1 billion aggregate principal amount of its 3.75% Senior Notes due 2009 through an institutional private placement. The net proceeds from the offering will be used for general corporate purposes, including assigning up to $500 million of the net proceeds to fund the repayment of a previous note offering.

MEXICO CITY — Remember all those dumb pics people email of a Wal-Mart beside the pyramids? Well, they’re about to become true. A discount store owned by Wal-Mart is being erected only a half-mile from the ancient temples of Teotihuacan, sparking opposition by a small coalition that doesn’t want to see the big box from the top of the Pyramid of the Sun.

SURREY, B.C. — Irly Distributors, the Western-based wholesale buying group, has added a new member to its Irly Building Centres group: Valu-Mart Country Store, Salmo, B.C., which was formerly affiliated with Irly through the group’s independent Western hardware distribution division. Since creating a dealer development department two months ago, Irly has added two new dealers, and six members have joined the Western division.

TORONTO — Canadian Tire Corp. has reached an agreement with its Canadian Tire associate dealers to revise the contract that’s offered to individual dealers. The form of the new contract defines their future business relationship with Canadian Tire Retail, a division of Canadian Tire Corp. The contract is based on an Agreement in Principle reached in the fall of 2003, with terms extending for a 10-year period. Major financial terms will be subject to review at the end of five years. Canadian Tire expects to have substantially completed the individual contract signing process by the end of 2004. Canadian Tire has 443 associate dealers, who own and operate 455 Canadian Tire stores across Canada.

HOFFMAN HILLS, Ill. — Sears Roebuck & Co. is going beyond online appliance sales with the launch of online sales of home furnishings and apparel. About half of Sears’ apparel offerings and 70% of its home furnishings will be available on Sears.com, with a focus on its best-selling items and brands. Sears is expected to benefit from the expertise of Lands’ End, a chain it acquired two years ago that has been an innovator in online selling.

Bill Granger of Delta Faucet Canada received the Joseph K. Seidner Award from the Canadian Institute of Plumbing and Heating. The award was presented in recognition of Granger’s contributions to Canadian plumbing codes and standards. He is manager, product engineering for Delta Faucet in London, Ont.

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Lowe’s, which has 65 stores in Florida, sent more than 600 truckloads of supplies to the sunshine state, and transferred more than 450 employees from stores in other states to help out at the company’s stores in markets that were in the storms’ paths.

That extra manpower was especially needed in the days between when Hurricane Charley and Hurricane Frances hit, as customers lined up at Lowe’s stores for supplies and sometimes had to take numbers to buy product that hadn’t even arrived. “At one store in Fort Lauderdale, we got 1,000 sheets of plywood yesterday afternoon and within 30 minutes it was all gone,” said Chris Ahearn, a Lowe’s spokesperson. “People were waiting for the truck to arrive.”

Carol Tomé, Home Depot’s CFO, told the NBC affiliate in Atlanta that Home Depot’s stores in hurricane-ravaged towns were seeing “a fivefold increase [in sales] in one day.”

Independents have been working hard to help, as well. In the first three days of September, Ace Hardware sent 9,980 flashlights to its dealers’ stores in southeast Florida, compared to 9,683 flashlights that it shipped for the entire month of September 2003. Shipments of generators were five times greater than the same period a year ago. Natalie Danaher, an Ace spokesperson, stated that the co-op’s distribution centers in Tampa, Fla., and Loxley, Ala., maintain a three- to four-month supply of emergency products “constantly.”

Home Depot operates around 130 stores in Florida. It sent an estimated 450 truckloads of supplies and more than 1,000 of its employees from other states to help keep many of its stores open 24 hours. Several markets were without power for days after each hurricane blew through the state, causing a run on generators. Both Home Depot and Lowe’s shipped thousands of generators from their stores around the country to Florida in what Don Harrison, a Home Depot spokesperson, called “the biggest re-supply in the company’s history.”

Frank’s had emerged from Chapter 11 in May of 2002, but still reeled under a soft economy and stiff competition from dealers such as Home Depot, Lowe’s, Wal-Mart and Target. For the fiscal year ended in January 2004, Frank’s reported a $23.8 million loss on $316.9 million in sales, which were essentially flat from the previous year, but compare unfavorably to the $512 million in revenue it generated in 1998.

Frank’s president and CEO, Walt Spokowski, had just joined the company in August from another bankrupt dealer, the tool specialty retailer Woodworkers Warehouse.

The Imperial Manufacturing Group was recognized in the Newsmaker Award’s manufacturer category. Started as a sheet metal shop with six staff, the company 25 years later has 10 divisions across the United States and Canada that employ 800 and produce more than 10,000 products. (l-r) Steve Finlay, Greg Parlee and Normand Caissie, president of Imperial, accepted the award from Ian Gray of LBMX.

The final award of the program, held during lunch on day one of last week’s Hardlines Conference Series, went to a personality. Ron Marchetti, currently retiring as national business development manager for Castle Building Centres, was given recognition for his personal impact on an industry he has spent more than 40 years in (shown here accepting his award from Brent Davies of CRC and Ian Morrison of IKO).

But the Conference had still more excellence to honour. This year, for the first time, Hardware Merchandising magazine held its illustrious Outstanding Retailer of the Year Awards in conjunction with the Hardlines Conference Series. The winners came from every end of the country and almost 200 people filled the room to pay tribute. (we’ll have the full line-up of ORA winners, including pics, later this week. Stay tuned!—Michael)

The decision to engage in a multi-year contract was based on success Rona enjoyed with the program in the Quebec. In addition, more than 70% of Canadian households actively collect Air Miles, with the percentage increasing farther west—more than 90% of households use the program.

As for any possible overlap with existing home improvement partners, Tim Urquhart, president and general manager of Tim-BR-Marts Ltd., regards the Rona signing as a positive move. “We believe that increased consumer awareness will be a benefit for both companies,” he says.

Flyers and TV spots started last Wednesday, and an official “re-launch” of the Air Miles program was orchestrated in Quebec. Support for the launch also came from a number of vendors, which put their products on special. They included OSRAM Sylvania, Venmar and Tango Laminate Flooring.

And this is just the beginning. “It’s important that we make additional acquisitions that will increase our volumes and add value,” says Smith, hinting that there’s more to come.

Since 2001, Home Depot has invested nearly $14 billion in new store construction, modernization and technology. It currently operates 14 stores with approximately 3,900 associates in the New York boroughs. Another Manhattan store is scheduled to open later this year, this one in the Midtown area.

Another category that had a strong presence at the show was motorized garden equipment and garden technology, which actually made up the show’s largest product group. Products included professional garden equipment and landscaping machinery.

Trade visitors showed equally strong interest in decorative garden elements, plants and plant-care products, floristry supplies and decorative items.

gafa was held in tandem with spoga, the International Trade Fair for Sport, Camping and Garden Lifestyle, which focuses more on the leisure activities in the garden or while. Product segments included garden furniture and barbecue equipment.

Since spoga runs every year, but gafa is biennial, all gafa product groups related to garden will have a chance to exhibit annually, starting next year. That’s when spoga will feature a redesigned “Garden Lifestyle” section. This section will provide gafa suppliers of lifestyle-oriented products an opportunity to showcase their products annually in Cologne. (The next spoga Cologne, International Trade Fair for Sport, Camping and Garden Lifestyle, will be held September 4-6, 2005.)

Although TORBSA has always catered to GSDs, there has been a growing trend in the industry that finds more and more of this kind of dealer becoming affiliated with a group. TIM-BR Mart Ontario has enjoyed tremendous growth in both sales and membership through its commercial division, Commercial Independent Dealers (CID), while a brand new group, The Signature Group, was established earlier this year to attract GSDs exclusively.

“If you look at the marketplace today, and look at the dealers out there, very few are not affiliated,” says Holmes. “I expect that all dealers will be affiliated eventually.”

WEST JORDAN, Utah — The U.S. Federal Bureau of Investigation is offering a $10,000 reward to anyone providing information that leads to the arrest of people connected to a June 14 fire that caused $1.5 million in damages to Stock Building Supply‘s yard here. The FBI suspects that the Earth Liberation Front is behind the arson, as the initials ELF were found spray painted at the property. The Bureau has also traced a fax claiming responsibility for the blaze that ELF allegedly sent to a University of Utah health clinic in Midvale, Utah, according to local news reports, which have reported earlier that the group said the yard was torched because Stock had ignored warnings to repair its forklifts that emitted more pollution than diesel engines.

CHICAGO — A new RFID trade association, the International RFID Business Association, will announce its official launch tomorrow at the Frontline 2004 Conference at Navy Pier. The RFIDba, through its executive and advisory committees, will present the mission of the organization to an audience of Auto-ID, RFID, and mobility experts from around the world. The not-for-profit trade organization’s mission is to help in implementing current and future RFID applications across a range of industries. The RFIDba is not meant to compete with any standards or trade organizations, but to promote the work of the standards bodies and provide greater bandwidth and variety in what is shaping up to be a strenuous RFID adoption period.

TROIS-RIVIÈRES, Que. — Coopérative fédérée de Québec officially inaugurated the expansion of its distribution center here last week. The expansion was in response to its growing distribution networks, under the CO-OP and Unimat banners. The expansion represents a $2.3 million investment and the addition of 35,000 sq.ft. of space. Coop fédérée serves 155 CO-OP stores and six Unimat stores.

CLEVELAND, Ohio — CSA International, the certification and testing organization, opened its new OnSpeX test center here last week. OnSpeX conducts consumer product testing for both manufacturers and retail customers. It focuses on two broad categories: Accelerated Product Evaluation Programs and Quality Assessment & Advisory Services. The Accelerated Product Evaluation Program offers both certification services and consumer product evaluation to increase the speed of information delivery and reduce delays in the supply chain process. The accelerated full-cycle program offers factory evaluation, product design review, pre-certification assessment (qualified lab), certification document preparation, performance testing, safety analysis, reliability testing, package testing (ISTA), in-process inspections, pre-shipment inspections, data collection of QA results from factory and data analysis of QA results.

CALGARY — Canadian Tire Corp. is getting more creative in cross-promoting its Mark’s Work Wearhouse chain. Last week, hundreds of motorists lined up at a Canadian Tire gas bar here to redeem five- and 10-dollar free gas cards they’d earned buying clothes at Mark’s stores. The added incentive? The first 350 customers got to fill up for free.

Some sectors have fared better than others. The big boxes continue to dominate the news, if not the industry. They grew to account for more 21.6% of the overall industry, with sales of $6.9 billion – from only 172 stores.

While the big box sector continues to burgeon, independent building centre dealers, the sector considered the most vulnerable to the big box onslaught, fared even better. For example, buying groups, which account for the lion’s share of this sector, are dominated by family owned businesses across the country. They grew their market share to 35% of the overall market, from 33%.

Full details of the dynamic growth of the amazing retail home improvement sector will be presented at the Hardlines Conference Series, September 8-9, 2004. The Conference, a symposium for senior management and executives from all aspects of retail, distribution and manufacturing, will be held at the Renaissance Toronto Airport Hotel. For more information, click here.

“People are not spending money,” Kurt Barnard, president of Retail Forecasting Group, told Reuters. “They are intimidated by the [economic] outlook.”‘

Overall, the U.S. economy grew at a relatively modest 2.8% annual rate in the second quarter, a slower pace of expansion than previously thought. More Americans filed first-time unemployment claims in the last week of August than at any time since mid-April, according to a government report. First-time applications for unemployment benefits rose by 19,000 to 362,000, the Labor Department said.

“The slowdown in job growth has curbed consumers’ confidence,” explained Lynn Franco, director of The Conference Board‘s Consumer Research Center, which reported that its Consumer Confidence Index in August was at its lowest level since April. “The level of consumer optimism has fallen off and caution has returned. Until the job market and pace of hiring picks up, this cautious attitude will prevail.”

Manufacturing continues to expand, but at a slower rate. The Institute for Supply Management reported that its “factory index” last month was 59, which wasn’t that far off from the two-decade-high index of 63.6 in January, but did represent the index’s lowest level since last October.

TTI generated the equivalent of US$1.69 billion in sales last year. Its brands include such well-known names as Homelite, Regina and Dirt Devil. But where this company has really made a name for itself has been in its proprietary relationship with Home Depot, through which it markets its Ryobi and Ridgid lines of portable and benchtop electric tools.

Last year, Atlas Copco’s tool brands generated US$700 million in sales in the U.S. and Europe. However, the company decided last spring to put this division on the block, partly because it was having a hard time getting premium prices for its products. Its electric tool division employs 3,100 people, nearly two-thirds of whom work for Milwaukee.

A week before it made this deal, Atlas Copco had agreed to acquire the assets of Chinese pneumatic toolmaker Qingdao Qianshao Precision Machinery.

“I feel we are just gaining momentum,” says Dave Leonzio, national growth manager for TruServ Canada. “We are delivering consistent performances in all aspects of service – especially fill rates – both in the distribution center and at store level with our field support. Our most recent successes have been a direct result of nurturing established relationships with key partners in the industry.”

Those existing relationships include the supply agreements TruServ has developed with key buying groups, such as Sexton and Castle. Some of the latest recruits are members of these groups who have added the True Value name and programs, to expand their hardware lines and grow their front end.

Another area of potential growth is from the Country Depot program, which was picked up by TruServ as part of its acquisition of the retail division of Growmark in January 2003. With about 50 stores in Ontario, the deal gave TruServ the critical mass to begin expansion in earnest in that province. A distribution center was installed in Kitchener, Ont., last spring to serve new and existing dealers in Canada’s largest province.

According to Morrison, TruServ’s retail farm and rural concept has tremendous potential. “Country Depot is going to become a national offering,” he says. “I see the opportunity for 60 more in markets we’re not in today.”

Home Depot Canada raised C$450,000 for Habitat for Humanity through an annual golf tournament it held during the last week of August near Toronto. The money raised – which exceeded last year’s take by 80% – will be used to help Habitat’s affiliates across Canada fund their building efforts in 2005. The Canadian division’s parent company, The Home Depot in Atlanta, has been supporting Habitat since 1997.

More than 300 golfers, many of them suppliers, also participated in a golf event last month conducted by The Rona Foundation, the philanthropic arm of the Boucherville, Que.-based buying group and retailer, to raise money in the Foundation’s ongoing battle against illiteracy and school dropouts. The C$400,000 generated was three times what Rona raised at a similar event last year.

Rona had originally opposed the purchase of Matco Ravary by BMR, questioning the value of the offer to all shareholders. Rona, which has been on an acquisition campaign of its own, did not make an effort to purchase Matco Ravary’s five Montreal-area stores outright, a move that became clear when its own acquisition of Réno-Dépôt was announced soon after. Réno-Dépôt has 10 stores in the Montreal area.

Rona began its relationship with Matco Ravary back in 1988, shipping it hardware and building materials. Soon after, Rona made the investment in the company, intending to underwrite expansion of Matco Ravary in the Montreal market. However, the growth of Réno-Dépôt, followed by the arrival of Home Depot a decade later, hampered Matco Ravary’s growth.
(To hear the latest on how Rona is delivering at the dealer level, don’t miss Roy Perkins of Rona Home Centre in Cornwall, Ont., who will be speaking at our Hardlines Conference Series, September 8-9, 2004 in Toronto. For more info, click here)

Company officials said that Home Depot had been refining its benefits offering for a year. But last June, Human Rights Campaign, a gay rights group, targeted Home Depot and three other companies that were offering pet insurance, but not domestic partner coverage, according to the Atlanta Journal Constitution. “Employees there have been asking the company for this benefit for about five years,” Kim Mills, education director at Human Rights Campaign, told the newspaper.

Home Depot revised its non-discrimination policy in May 2001 to include sexual orientation. Its benefits, though, are not offered to employees’ opposite-sex partners.

VANCOUVER — Taiga Forest Products has formed a new division, International Supply Management. This new division will look for expansion of its sourcing from emerging nations, as well as new markets in major offshore economies. It will be led by Frank Iannucci, director, International Supply. The new division will focus on delivering a reliable, quality supply of products to the North American marketplace.

MONTREAL — Sodisco-Howden Group has renewed its contract with workers at its London, Ont., warehouse. The contract, with the Canadian Auto Workers, is for three years. The contract with workers at its Victoriaville, Que., distribution center was ratified last year, also for three years.

HOFFMAN ESTATES, Ill. — Sears, Roebuck and Co. reported that same-store sales fell 6.1% for the four weeks ended August 28. Total domestic store revenues were $1.91 billion for August, down 7.1%.

VANCOUVER — The recently announced purchase by Ainsworth Lumber of three mills in Minnesota owned by Potlatch Corp. will make it the number-four producer of OSB in the world. The deal, worth US$475.5 million, is expected to close later in September, and is expected to boost Ainsworth’s production by 65% to 3.3 billion sq.ft. annually. The company already has OSB mills in British Columbia, Alberta and Ontario.

TORONTO — Hudson’s Bay Co. reported a drop in second-quarter sales to $1.63 billion, from $1.66 billion in the same period last year. Same-store sales fell 1.8% over last year. Loss before interest and income taxes (EBIT) was $6.2 million for the quarter, compared with earnings of $17.5 million in the same period last year. For the first half of 2004, EBIT was a loss of $26.3 million, down from a loss of $23.7 million.

Home Depot made big news in mid-June when it announced plans of its own to enter China. The move shines the spotlight clearly on the fastest growing economy in the world, as China is being transformed from a nation of producers to one of consumers, as well.

Over the past 10 years, competition has heated up in China. However. A number of domestic retailers are already zeroing in on the DIY market, including Home World, which has 30 hypermarkets and eight home centers throughout China. Orient Home, another Chinese operation that is privately held, owns multiple outlets in Northern China, while Home Mart is owned in part by the Shanghai government. Besides, B&Q, OBI in Germany has been expanding with stores in China, as well.
(For a better perspective on the international retail scene, don’t miss Ira Kalish of Deloitte Research from Las Angeles, who will be our keynote speaker at the Hardlines Conference Series, September 8-9, 2004 in Toronto. For more info, click here)

The co-op patronage dividend to Do it Best members on their warehouse purchases for this year will average 13.47%, in line with the 12% average paid out by the co-op for the past 17 years. Members will receive their rebates at Do-it Best’s fall market in October.

Do-It Best, the second-largest co-op in the United States behind Ace Hardware Corp., has 4,100 dealer-members in the U.S. and 45 other countries.

At Johns Manville Canada, supplies of fiberglass insulation are being managed on a weekly basis. “The runaway market in the U.S. has created even more demand from manufacturers in Canada, over and above the strong demand here,” says Gino Allegro, Canadian regional sales manager for Johns Manville Canada.

Allegro says his company is feeling additional pressure, since it’s the only one that offers a full line of fiberglass insulation that’s completely formaldehyde-free. A recent ruling by the International Agency for Research on Cancer (IARC ) reclassified formaldehyde from Group 2a (probable carcinogen), to Group 1 (known carcinogen). This means the toxic adhesive agent joins asbestos, benzene and other compounds as known health hazards to humans. It’s been linked to asthma, allergies and nausea. (Although levels of formaldehyde are low enough in fiberglass insulation that IARC has re-classified it as Group 3, not classifiable as a known carcinogen, consumer concerns over carcinogens in building materials, which collectively can result in “sick-house syndrome,” are on the rise.)

Between meeting domestic demand, supplying the U.S. market, and responding to the latest environmental initiatives, Johns Manville is going flat out. “Every single batt of insulation coming off the line has got a customer’s name on it,” says Allegro.

Allegations of workplace discrimination are nothing new for Home Depot, nor is its response — that it maintains a corporate policy of “zero tolerance” towards workplace discrimination. While it admitted no wrongdoing in Denver, it stated that it settled this complaint to avoid prolonged litigation.

About 5,000 of Home Depot’s 300,000-plus employees work in Colorado, where it operates 36 stores.

The dealer-owned big box model, an exclusive to Rona, is just one of the ways it is growing its store base. Corporately owned big boxes are slated to open in Regina, Sask., in September; followed by Richmond, B.C., early in 2005, then Barrie, Ont., and Calgary North, also in 2005.

The emphasis on building its presence in Western Canada is also reflected in Rona’s expansion plans for its traditional stores. A former Revelstoke store on Ogden Road in Calgary will re-open as a 10,000-sq.ft. Rona Building Centre before the end of this year. A Rona Home Centre planned for Prince Albert, Sask., puts Rona in a brand new market. It’s scheduled to open on September 16.

Acquisitions continue to play a key role in Rona’s growth. A former Irly dealer in Vernon, B.C., is the latest independent to move over to the Rona fold.

“The Smith & Hawken brand is the gold standard in outdoor living and is an outstanding fit with our strategy to extend our reach into adjacent lawn and garden categories and to own industry-leading brands in every category in which we compete,” said Jim Hagedorn, chairman and CEO of Scotts, in a prepared statement.

This deal represents the first time that Scotts has diversified into retailing. Scotts will continue to operate those stores under the direction of Smith & Hawken’s current CEO Barry Gilbert. Scotts doesn’t just want the Smith & Hawken stores; the brand itself has value and is expected to complement Scotts’ own brand. The company believes it can offer Smith & Hawken-branded merchandise through other dealers, such as Home Depot (where Scott’s is that dealer’s highest dollar-volume supplier) and Lowe’s, without cutting into Smith & Hawken’s own retail business.

As part of this acquisition, Scotts is assuming $14 million of Smith & Hawken’s debt. It is buying the retailer from Wellesley, Mass.-based DDJ Capital Management. In February 1999, DDJ and another creditor, State of Wisconsin’s Investment Board, bought Smith & Hawken for $75 million, including $25 million in assumed debt, in an auction that was part of the liquidation of CML Group, Smith & Hawken’s former owner, which had declared bankruptcy.

TSG is positioning itself as something of a “boutique” buying group, targeting membership with a very clear GSD focus, “that works better with a smaller group of members,” says Skrepnek. In fact, he doesn’t expect to have more than 15 dealers in the group in total.

In the meantime, expansion efforts will continue in Eastern Canada, as all the major Western GSDs are already affiliated — and Skrepnek has stayed away from them — for now. “We’ve decided to take a hands-off approach in Western Canada during the middle of the year,” when it’s difficult for dealers to change key suppliers. However, by January 1, 2005, he intends to announce some new members, and not just in the West. Recruitment will include a key player in Quebec, he says.

“We intend to be the biggest buyer of gypsum in Canada. We’re very close already.”

In Calgary’s Marlborough Mall, which has a Sears store at one end and Wal-Mart at the other, the door at the rear of the Wal-Mart store which leads into the mall was sealed off last year, a decade after the Wal-Mart store moved in, and merchandise put up in front of it. The result has wreaked havoc on mall traffic, which is down 19% since the giant retailer made the un-neighborly gesture back in February. Another eight stores across the West are reportedly following suit.

The situation is considered unique to Canada; Wal-Mart stores in the U.S. are more likely to be stand-alone stores.

Wal-Mart Canada did not return calls on this one.

VANCOUVER — Ainsworth Lumber Co. Ltd. has made a deal to buy three OSB mills in Minnesota from Potlatch. The plants produce about 1.3 billion sq.ft. of OSB annually. The purchase, valued at $457.5 million, will give Ainsworth an annual production capacity of about 3.3 billion sq.ft. The deal is expected to close in September.

ST. JOHN’S, Nfld. — Regatta Day is one of the largest events during the summer in this city, but it’s also the scene for one of the major sales by one of Newfoundland’s largest dealers. Even though stores within the city limits are required by law to close during the festive occasion, Chester Dawe held its annual Regatta Day sale recently at its Topsail Road store, which sits on the edge of town. Against the backdrop of North America’s oldest sporting event, customers were reportedly lined up for miles to take advantage of Chester Dawe’s once-a-year specials.

NEW YORK — Kmart Holding Co. has closed a deal to sell off 18 of its stores to Home Depot for $271 million. The original agreement called for the sale of as many as 24 Kmart stores for up to $365 million, but it turns out they were making more money than expected, so Kmart decided to hold onto them.

TOLEDO, Ohio — Owens Corning will invest in expansion of its insulation plant in Toronto to meet increasing North American demand. The capacity for production of fiberglass light density and loose fill insulation will be increased by 20%. The multi-million dollar expansion, which will be completed in early 2005, is the latest in a series of capacity increases announced by the company to meet the North American shortage in fiberglass insulation. Other upgrades will take place in Kansas City, Fairburn, Ga.; Newark, Ohio; Salt Lake City, Utah; Santa Clara, Calif.

VANCOUVER — West Fraser Timber Co. has completed its offering of 5,852,000 subscription receipts, at a price of $47 each, for gross proceeds of $275,044,000. Each subscription receipt represents the right to receive one common share of West Fraser upon closing of the previously announced acquisition of Weldwood. The net proceeds of the offering will be used to help pay for the acquisition.

The gross domestic product in the U.S. grew by 2.8% in the second quarter, slower than expected, says the Commerce Department. Blame shrinking corporate profits and higher imports for the slowed GDP.