Across the chain, Nardelli noted that the company spent $500 million on store remodels last year, with everything from new ceilings and floors to improved lighting. The investment in these “refreshes” will double in 2004, as the payoff is measurable. “Those stores are performing extremely well,” he noted.

As the stores get updated, they are also being made to follow a more rigid operational format. “When I came on, 50% of the stores were compliant with standards,” Nardelli said. The objective now is to get that up to 100%. “A consistency of message is important,” he continued. “It’s a big part of our problem.”

In Canada, programs being introduced include self-checkouts, which will be in 41 stores by July, and the balance of Canada’s 105 stores by the third quarter. (More on my interview with Bob Nardelli in next week’s issue! — Michael)

The company did not reveal when it planned to open its first store in China, where, or how many it intended to open in that country. One thing for certain, though, is that Home Depot will encounter stiff competition in China, where U.K.-based B&Q and German DIY retailer OBI have already established footholds. Leroy-Merlin has affiliated itself with Home Way, the country’s first Western-style big-box retailer, which Home Depot helped launch through financial and consultative support. By choosing not to become a fuller partner in Home Way in the mid 1990s, Depot left a wide door open that several European dealers walked through.

B&Q has aggressive plans for Asian expansion, and OBI intends to have 100 stores in China by 2010. Two other domestic chains, Orient Home and Home Mart, will also provide competition for Home Depot upon its arrival in China.

Currently, Home Depot has about 50 employees working in two buying offices set up last fall in Shanghai and Shenzhen, China. Its plans to open stores are being disclosed at a time when China’s economy is booming; it grew by 9% last year, and that pace has kept up this year, at nearly 10% in the first quarter of 2004. Home Depot officials estimate that the Chinese spend $50 billion annually on home renovations, and that this spending is rising 20% per year. As the housing market booms in that country, Patterson estimated that about 70% of those expenditures go towards the completion of interior spaces in the home.

We’ll start at the top: Normand Dumont was promoted to the role of executive vice-president, merchandising. Under him are Luc Nantel, vice-president merchandising, hardware; Jeff Kilgour, vice-president merchandising, lumber; Larry Jarvis, vice-president merchandising, building materials; and Gabriel Rousseau, senior director, store sales support.

Six hardlines teams report to Nantel, as vp hardware merchandising. They are: paint, decoration and flooring, under Suzanne Maggi, director; hardware, tools, furniture and storage, under Jean Lamarche, director; plumbing, kitchen, kitchen and ventilation, under Manon Bouchard; electrical, lighting and heating, overseen by Joseph Piro, director; seasonal, garden, housewares, stoves and fireplaces, under Yves Bergeron, director; and special projects and flyer coordination, headed by Pierre Rodrigue, director.

Lumber under Jeff Kilgour: Ronald Tu, director, commodity trading, Western Canada; Wayne Sellars, director, technical services; and Josée Julien, director, lumber purchasing.

Larry Jarvis’ building materials team consists of: Rémy Harvey, director, building materials merchandising; and Hubert Robitaille, director, millwork merchandising, who will also play a key role in supplier negotiations.

Rousseau’s store sales support team will implement merchandising strategies within the stores, and be responsible for renovations, store openings and planograms. They are: Trevor Pocaluyko, regional director, store sales support, Ontario; Colleen Barker, regional director for Western Canada; and Nicole Plamondon, director, Ambiance Boutique and Decoration. Rousseau himself will be directly responsible for store sales support in Quebec.

“We look at this as an opportunity to educate residents about home security, encourage formation of block watches and increase positive interaction between the community and police,” said Major Larry Watkins, commander of the district that includes the neighborhoods. The installation teams will conduct door-to-door home security inspections through July 23.

With Anderson at the helm, the group is also taking a more focused approach to building its ranks, resulting in the formation of a new title, manager of the dealer development/sales department. Brad Dixon, formerly buyer for hardware, assumes the new role. He will be responsible for getting Irly’s 50 bannered stores more fully on board with the many programs available through the group, including re-merchandising existing stores and recruiting new members.

Irly owns a general wholesale division, Western Hardware, which sells hardware to a growing range of independents outside the Irly banner. Dixon will be charged with increasing these sales, as well.

The new management has a mandate to regain direction for the group. Anderson says Irly has many advantages, including its position as a regional supplier, one that has been entrenched in the British Columbia market for a long time. “We do have the distribution center here — it’s right in B.C., and it carries a fairly extensive line of hardware, as well as building supplies,” he says.

Home Depot will issue a store credit for a returned fan, or customers can contact SMC Marketing Corp., which is based in Grand Prairie, Tex., for instructions on receiving a refund.

BOUCHERVILLE, Que. — Rona Inc., the Canadian home improvement distributor and retailer, has erected a new Rona Building Centre store in Peterborough, Ont. The 41,000-sq.ft. store, built at a cost of $9 million, is on the site of a former Rona Cashway.

Launched just last year in Midland, Ontario, Rona’s Building Centre concept was created in response to the specific needs of trades people, contractors and DIYers looking for a range of décor and renovation products for major projects.

Ralph Hake, Maytag’s chairman, referred to these maneuvers as its “one company” strategy, and said Hoover’s and Maytag’s sales forces would be merged. But financial considerations also played a role in these reductions, as Maytag disclosed that it would not meet its earnings forecasts for the year and its second fiscal quarter. Sales of floor care products and home appliances in April and May did not meet projections, Hake said in a prepared statement. His goal is for Maytag to achieve an 8% operating profit margin by the first quarter of 2005

Maytag’s plans may be complicated by the latest news that it was unable to reach a negotiated settlement with the union workers at its Newton Laundry Products plant in Newton, Iowa, resulting in a shut down of production.

NEW YORK — Both Home Depot and Lowe’s continue to increase their share of the heavy appliance market, taking away from the number-one player, Sears, says a survey by TWICE, a trade magazine. U.S. appliance sales rose 10% overall last year, to $18.1 billion, from $16.4 billion in 2002. Lowe’s, the number-two seller, had growth of 17% to $3.5 billion, but Home Depot is narrowing the gap, as its appliance sales grew by 23.6% to hit $2 billion last year. Sears added more assortment in its white goods last year, but its sales increased by only 3.7%, to $5.6 billion.

RIVIÈRE-DU-LOUP, Que. — A program to expand Bargain Building Materials‘ dealer base beyond its home province of Quebec is starting show results. With a network of 15 corporate stores (13 in Québec and 2 in Ontario) and one 250,000 sq.ft. distribution centre, Bargain began promoting its authorized dealer concept in earnest in 2003. The program provides independent hardware stores, home decorating centers, lighting and furniture stores, floor-covering retailers, etc., with five product lines: recycled paint and accessories, MDF mouldings, electric and cordless tools, imported hardware and floor coverings. Bargain has three authorized dealers in Quebec, and has gained a foothold in the Maritimes with the signing of a new dealer in Summerside, P.E.I. Sales by Bargain were $33.5 million in 2003.

ST. JACOBS, Ont. — By the end of the month, Home Hardware Stores Ltd. will have added 18 new locations, rivalling the 22 new stores added in all of 2003. Along with the new stores, expansion by existing dealers brings Home’s total retail space to more than 8.3 million sq.ft. Aggressive plans for growth extend to Home Furniture, the company’s home furnishings banner, which has added 12 new locations in the past year, bringing the total number of stores to 62. The company has also broken ground on an expansion at its main warehouse and office facilities here. The project, which will add nearly 340,000 sq.ft., will be completed in four phases over a three-year period.

TORONTO — Following a recent announcement that his company will acquire 24 Kmart stores in the U.S., Home Depot chairman and CEO Bob Nardelli said such a large-scale purchase could happen in Canada. He mentioned the Zellers chain, as a possible example. The discount department store chain with almost 300 stores across the country, is owned by Hudson’s Bay Co., and has suffered from slow growth over the past several years, compared with its key competitor, Wal-Mart Canada. Wal-Mart entered Canada just over a decade ago when it purchased some 200 Woolworth stores.

MISSISSAUGA, Ont. — Bakor, the roofing company, has launched a product training center, calling it the first-ever for the roofing industry. The facility has been designed to train Bakor’s staff, as well as architects, specifiers, distributors and contractors, on the proper application of Bakor’s own products, but it’s also intended to provide a broader forum for teaching application techniques of building products such as roofing, air barrier and waterproofing. The training facility is located in Bakor’s new Canadian headquarters. It features a classroom with seating for 24 and a 1,000-sq.ft. demonstration area.

MINNEAPOLIS — May Department Stores Co. will buy Marshall Field’s department stores and nine Mervyn’s locations in the Twin Cities for $3.24 billion in cash, in a deal that’s expected to close in either the third or fourth quarter. May will keep using the Marshall Field’s name in a move that strengthens its presence in the Midwest, giving it a total of 62 Marshall Field’s stores, mostly in Chicago, Detroit and Minneapolis-St. Paul.

BERLIN — A German law dating back to 1891 has been upheld by that country’s highest court. According to the ruling, shopkeepers will have to keep their doors closed on Sundays, public holidays and after 8 p.m. on weekdays. The Federal Constitutional Court turned down an appeal by the giant retailer Metro AG, which had been pushing to get the law updated.

EDMONTON, Alta. — Sears Canada Inc. is putting its department store at West Edmonton Mall through a major renovation, which is scheduled to be done by October. The 103,000-sq.ft. retail area will increase by 2,500 sq.ft., offering a broader selection of home fashions and apparel. The project is part of a multi-year, multi-million dollar initiative to update all the stores at least every seven years. Four other sites will be renovated in 2004, including the store at Guildford Town Centre in Surrey.

The average price of a new home in Canada was up 0.7% in April from the previous month. Year over year, the rise in prices was up 5.6%, the highest annual increase in 14 years, says Statistics Canada.

He adds that the Winroc management will stay intact, with one change at the executive level. Wayne Jack, Winroc’s founder and chairman of the board, will exit the company, while Paul Vanderberg, president, will remain on.

“The value proposition for Winroc’s customers is based in part in service, in part in product diversity, and also in competitiveness, which will be enhanced, as we have a mandate to grow the distribution side exponentially through acquisition,” Hancock says. He expects the company to be up to three times larger within the next three years.

He expects access to a larger pool of products and an increased commodity base to make the Allroc business more appealing to potential dealers, as well.

Winroc has annual revenues of $320 million with corporate revenue in Canada split evenly between Winroc and Allroc purchases. On a North American-wide basis, Winroc accounts for 70% of Allroc’s volume.

A spokesperson reiterated Home Depot’s policy of zero tolerance for any kind of discriminatory behavior among its employees. In recent weeks, other, similar employees complaints in different markets have surfaced.

Home Depot has since issued a statement saying “the suit has no merit.”

The day before Newsday reported on this suit, Aram Rubinson, a retail analyst with Banc of America, lowered his rating for Home Depot from buy to neutral. He explained that Home Depot’s sales are likely to be affected by a slowdown in home sales. That prompted Bob Nardelli, Home Depot’s chairman and CEO, to insist, in an interview with the Associated Press, that the company’s strategy was working, and that he had no intention of adjusting it.

Surprisingly, however, Nardelli conceded that impressions held about Home Depot, good or bad, are rarely in line with reality. “The company was probably never as good as was perceived, and it sure as hell is not as bad as it’s perceived today,” he told AP.

Nardelli is understandably touchy, after shareholders held his feet to the fire last week because the company’s stock price during his tenure over the past three and a half years is down 12%. Nardelli admitted that his “greatest challenge” is to convey how well the company has been doing financially to the public.

What’s fuelling the growth of this DIY-oriented chain? “We’ve had some positive comp growth and we’re just exploring other markets,” says Darrin Gilliam, vice-president merchandising and marketing for Marvin’s.

Morrison says he wants to see the company’s sales increase threefold, in part by increasing TruServ’s share of the giant Ontario market, which accounts for fully one-third of Canada’s $31.7 billion in retail home improvement sales.

Under the agreement, TORBSA members have the ability to purchase products from both the Kitchener and Winnipeg distribution centers. They can also take advantage of TruServ Canada’s field and help desk services. TruServ operates and supplies a range of banners: True Value Hardware, V&S Department Stores, V&S Options, Country Depot and Pet Junction.

Shipments made by Canadian suppliers between May 22, 2002 and April 30, 2003 are also being reviewed and final determinations for these reviews will be made by December 7, 2004. However, if a negotiated settlement is not reached between the two countries by then, the old rate could be re-introduced.

“We are pleased to see that the rates have been cut by more than half,” said John Allan, president of the B.C. Lumber Trade Council, in a prepared release. “We are confident that the DOC will not be able to fairly find any subsidy in the final determinations.”

The council maintains that Canadian softwood lumber is not subsidized and not dumped in the U.S. and expects all duties to be removed eventually. Its member companies account for about half of Canadian lumber production and half of Canadian lumber exports to the United States.

Ray Gabel, vice-president, merchandising and marketing — hardlines for Home Hardware Stores Ltd., acknowledges the importance of testing, saying it’s “very, very important.” and notes that quality is a challenge as pressure continues to provide better pricing. “People are demanding better quality,” he says, adding that his dealers hate poor quality because of increased returns — and the buyers have to answer for it. “I get my head in a sling over it,” he adds.

That’s why OnSpeX takes the testing function beyond specs testing to help retailers and consumer products manufacturers quantify and analyze the performance of products from a more consumer-friendly perspective. The new division was developed, in large part, as the result of inquiries from major retailers and certification testing customers of CSA International.

OnSpeX is part of CSA Group, an independent, not-for-profit membership association serving business, industry, government and consumers.

The expansion is in line with Bunnings’ ongoing expansion plans, as its home improvement business has enjoyed 29% growth of the past two decades, the highest on the Australian stock exchange, but anticipated slowdowns in the housing market here are expected to slow that growth.

Bunnings continues to look for sites for its big box stores, and is preparing for its first big site in Dunedin, where it faces new competition from Mitre 10, the co-op chain that is launching its own dealer-owned big boxes (Holy Rona-style model for growth, Batman! — Michael). Martin Dippie, a Dunedin businessman and developer who owns Jacks Mitre 10, recently purchased land to build a AU$10 million megastore.

During the period, nine smaller stores were converted to B&Q’s new Mini-Warehouse format, bringing the total to 37. In addition, one new B&Q Warehouse was opened.

In France, Kingfisher’s Castorama division saw total sales grow by 11.9%, with strong same-store sales of 8%, driven, in part, by Castorama’s foray into entry-level products for the price-conscious French consumer. The Brico Depot discount banner enjoyed saw sales growth of 19.2% in constant currency.

Kingfisher’s international sales grew by 59%, as two stores were opened in Italy and one in Spain. Sales in Poland were very strong, rising 68.8%.

MOORESVILLE, N.C. — Lowe’s president Robert A. Niblock recently explained at an investors’ conference that the retailer’s plans to add 140 stores this year include moving into three new states — Minnesota, Wisconsin and Maine. In addition, a new regional distribution center is going up in central Florida. Niblock said Lowe’s merchandising strategy will target two emerging consumer groups, “serial renovators,” typically homeowners who continually upgrade their kitchens, baths or family rooms for reasons of fashion or product upgrades, and “home entertainers,” primarily younger, educated professional women who are brand loyal.

BURNABY, B.C. — Forestry giant Taiga Forest Products Ltd. ended the fiscal year ended March 31, 2004 with sales of $1.1 billion, up 18.6% from $912.7 million in 2003. Earnings for the year were $10.7 million, up from $7.8 million in the year prior. Net profit for the fourth quarter was $3.9 million on sales of $273.9 million.

TROY, Mich. — Kmart will sell off as many as 24 of its outlets to home improvement giant Home Depot. The exact number of stores, and their locations, will be determined over the next couple of months. The deal is expected to be worth up to $365 million. Kmart has more than 1,500 stores in 49 states. It emerged from bankruptcy protection last year, but sales continue to drop despite the turnaround.

NEWTON, Iowa — Appliance maker Maytag Corp. will undergo a comprehensive business restructuring that consolidates the Hoover Floor Care, Maytag Appliances and corporate headquarters organizations. The consolidation of the operations is expected to take advantage of the different divisions’ overlapping customer bases, thereby improving Maytag’s competitiveness, with a planned 8% operating profit margin goal in the first quarter of 2005. The integration of Hoover and Maytag Appliances will result in the elimination of about 20% of the salaried workforce.

ATLANTA — A former Home Depot subcontractor named Raymond Hammond has filed a lawsuit in North Carolina against the retailer, claiming wrongful contract termination after he had alerted the retailer’s former heads, Bernie Marcus and Arthur Blank, that Home Depot had overpaid him for every installation he did in November, 1999 in upstate New York. The L.A. Times reports that Hammond has received emails from about 70 other contractors across the country who were also overpaid for window and kitchen installations. The Times reports that the overpayment was usually minor — around $20 per job — but sometimes ran as high as 20% above the actual costs. However, several days after reporting the overpayments in August 2001, Hammond’s contract with Home Depot was terminated, according to his lawsuit.

ISSAQUAH, Wash. — Costco Wholesale Corp. reported net sales of $3.80 billion for the four weeks ended May 30, 2004, an increase of 19%, compared with Wal-Mart, which had gains of 12.8% from $3.20 billion. For the 39-week period ended May 30, Costco reported net sales of $35.15 billion, up 15% from $30.67 billion from the similar period a year earlier.

TORONTO — Tremco Retail Brands has changed its name to Rust-Oleum Consumer Brands Canada. The change reflects Tremco’s integration into the Rust-Oleum family of companies since being purchased by Rust-Oleum Inc. in 1997. Tremco’s brands include Tremco, Flecto, Mono, Varathane and Watco.

HOFFMAN ESTATES, Ill. — Sales for Sears Roebuck and Co. in May fell 4.7% to $2.08 billion, from $2.18 billion in the same month a year ago. Same-store sales fell 3.7%.

MILWAUKEE, Wis. — Briggs & Stratton, the industry’s leading supplier of gas engines for outdoor power equipment, has signed a definitive agreement to acquire Port Washington, Wis.-based Simplicity Manufacturing, which sells power equipment products under the Snapper, Ferris, Giant-Vac and Simplicity brands. Simplicity expects to generate $350 million in sales for the fiscal year that ends June 30, 2004. B&S will pay $227.5 million in cash for the company, and expects to close this deal by the first quarter of 2005. Simplicity’s management team will stay in place.

TORONTO — Owens Corning Canada Inc. has become a member of the Canadian Green Building Council, affirming the insulation maker’s commitment to environmental responsibility. The CaGBC is a group of representatives from different areas of the design and building industry working to change industry standards, develop green building guidelines and create educational tools to support its members in implementing sustainable design and construction practices.

STE-MARIE, Que. — The sale of bath and accessories maker MAAX closed last Friday. The previously announced acquisition was undertaken by a syndicate comprising a number of investment groups, including J.W. Childs Associates, Borealis Private Equity and the Ontario Municipal Employees Retirement System.

CHICAGO — Housewares maker Home Products International Inc. has announced that its chairman and CEO, James Tennant, will buy the company outright for $1.50 per share. Tennant owned about 6.5% of the company’s outstanding shares as of early February, according to Reuters data. The transaction would value the part of the company Tennant does not already own at about $11 million. Home Products had sales of $233.6 million in 2003.

The value of the company’s stock was also an issue, as shareholders pointed out that Home Depot’s stock price under Nardelli’s tenure had fallen 13%, even though its earnings during that period had increased by nearly $11 billion.

During the meeting, Home Depot announced that its board had authorized the repurchase of another $1 billion worth of the company’s common stock. Over the past 21/2 years, Home Depot has repurchased $5.4 billion shares.

The issue that drew wide press attention to this meeting, though, was the status of board member Ken Langone, who is embroiled in the lawsuit filed against him and New York Stock Exchange chairman Dick Grasso by New York’s Attorney General Eliot Spitzer. (Langone headed the compensation committed that okayed Grasso’s $187.5 million pay package.) At Home Depot’s meeting, Langone was re-elected to another one-year term to the company’s board of directors. Grasso, who also sat on the board, did not stand for re-election.

BOUCHERVILLE, Que. — In another major step to absorb the operations of its Réno-Dépôt acquisition, the division’s Montreal buying team has been reorganized into the buying offices of its parent, Rona Inc., here on the south shore. Réno-Dépôt’s Montreal office will remain open, and continue to house human resources and operations.

The decision to use the best practices from the Réno-Dépôt side was made several months ago, as part of the mandate of a committee struck to examine ways to bring the two companies together effectively. Rona acquired Réno-Dépôt from parent company Kingfisher Plc in the U.K. last September. Implementation of the reorganization is taking place now, says Sylvain Morissette, director of communications for Rona, as emphasis at this time of year is on selling, not buying.

“We saw the Réno-Dépôt system as an opportunity,” he says. “It will create new possibilities to reach new products and have more impact with those products at the store level.”

Under the new arrangement, all buyers and merchants will work together under Normand Dumont, who has been named executive vice-president for merchandising and buying for both Rona and Réno-Dépôt. Marc Dufresne, formerly vice-president purchasing and logistics, will remain in charge of operations and logistics, as executive vice-president for distribution. Other changes include the appointment of Jean Lamarche as hardware merchant, and Joseph Piro as merchant for electrical. (We’ll get a more complete list of buyers for next issue — Michael)

Casablanca will sell more than 30 fan designs exclusively through Lowe’s, at starting price points under $400. Lowe’s now stocks these products in more than 700 of its stores, and also offers them via special order in all of its stores.

Pergo is adding to its existing lines in Lowe’s stores two new Signature collections, called American Cottage (with 13 color choices) and Casual Living (with 14 design options).

Details of Sears’s exit from the site were only confirmed last week, when Sears Canada announced it will close the store, a discount Value Centre, on June 5, clearing the way for Home Depot to move in. Another urban store will open in West Vancouver’s Park Royal shopping center by October of this year.

The merged company will operate under the Rodda name in the U.S. and continue under the Cloverdale banner in Canada. However, Rodda’s architectural paint for residential application will be sold in Canada, and Cloverdale’s industrial/commercial products will be sold through Rodda’s stores in the U.S.

Each company was family owned before the merger. Under the new arrangement, they will be managed independently and maintain two boards, but will have common ownership. Pending financial and environmental assessments by both sides, the merger will be transacted as a transfer of private stock, with Cloverdale holding the majority share in the deal. Specific terms were not disclosed.

The first Designer Depots will be located in Bay stores in Toronto (Eglinton and Woodbine); Brampton (Shoppers World); Calgary (downtown); and Montreal (downtown). Up to 15 more Designer Depots will open within Bay stores in the next nine months. The company says it will launch a stand-alone Designer Depot location before the end of 2004.

Metro, the world’s fifth largest retailer, plans to open 10 more stores in China this year, and another 40 within five years. Its 20th store there opened in Dalian last week.

These companies are not alone: many European retailers, faced with tepid economic conditions at home, are counting on China for growth. Ikea plans to open eight more stores in China over the next five years. One of Europe’s largest home improvement retailers, OBI, wants to double the number of stores in China this year to 19, expanding to 24 stores by the end of 2005, with 100 by 2010.

Aubuchon is but one of a myriad of dealers and suppliers that have thrown their support behind auto racing, whose audience demographics closely match that of their customers. Lowe’s sponsors a motor speedway in Charlotte, N.C., as well as a team that races on the Nextel Cup circuit. Menard’s has long been a team sponsor on the Indy circuit, and notable companies such as Home Depot, Sears, PPG and Glidden all sponsor teams.

Schenectady, N.Y. — Stock Building Supply has acquired Bellevue Builders Supply Inc. Bellevue operates seven retail branches, a distribution yard, truss manufacturing center, kitchen warehouse, and a door-stair/countertop/wall panel manufacturing center. The acquisition brings Stock’s operations to more than 232 locations in 26 states.

CASTLEGAR, B.C. — Arrow Building Supplies Ltd. is the latest independent dealer in Western Canada to sign with Rona Inc. Arrow, formerly a member of Irly Distributors, has three stores in the interior of British Columbia, and estimated sales of $8 million.

The American Red Cross awarded Lowe’s as its Philanthropist of the Year during its National Awards Winners ceremony on May 26. Since 1999, Lowe’s has donated more than $6 million to the Red Cross, and this year launched a public service campaign calling on Americans to “Pledge to Prepare” for all types of emergencies.

FAIRVIEW, Alta. — Castle Building Centres Group has added a new member in Western Canada, Burkholder Building Supply. The store is owned by Henry Hamm, who also owns Woodland Castle Building Centre in Grande Prairie, Alta. Castle, which has some 260 dealers across the country, now has more than 50 yards in Western Canada, more than double the number of three years ago.

TORONTO — Canadian Tire Corp. is the latest hardlines retailer to look at setting up Asian buying offices. As sourcing becomes increasingly globalized, Canadian Tire is looking to the Far East. According to Canadian Tire Retail’s president, Mark Foote, as competencies of Asian factories increase and their product quality gets better, they are becoming better positioned to add value and drive innovation. In addition, rising costs of both raw materials and finished goods deflation, along with increased competition, has Canadian Tire exploring both new offices — and new partnerships — in the Pacific Rim.

CALGARY, Alta — Rona Inc., the Canadian home improvement distributor and retailer, officially opened its first distribution center in Western Canada last Thursday. The facility is 320,000 sq.ft. in size, with capacity to expand to 420,000 sq.ft. Stocking approximately 25,000 SKUs, it supplies 51 stores, including 11 big boxes west of the Lakehead. The opening is part of an aggressive Western expansion strategy that includes a $200 million investment over the next two and a half years.

ISSAQUAH, Wash. — Profits at Costco Wholesale Corp., the largest wholesale club operator in the country, jumped 29% in its third quarter, as net sales increased 14% to $10.67 billion from $9.34 billion, and membership fees climbed 13% to $224.5 million from $198.1 million. Same-store sales rose 11%.

Although March was strong, April saw a sharp drop in orders to factories for big-ticket durable goods. According to the U.S. Commerce Department, durable goods orders dropped by 2.9% last month, marking the biggest decline since September 2002. April’s slackening in demand for big-ticket goods came after sizable gains in February and March, where orders went up by 3.9% and a strong 5.7%, respectively.

The earnings of both retailers were affected by a reclassification of payments to vendor service organizations For Lowe’s, that $205 million expense shaved $126 million off of the bottom line for the three months ended April 30. For Home Depot, the $280 million increase in store operating expenses reduced its quarterly earnings by $78 million.

Lowe’s enjoyed strong sales activity in outdoor power equipment, appliances (where Lowe’s share of the U.S. market at the end of the quarter increased to 14.5% in units), kitchens, and installed sales, which grew nearly 40% in the quarter. The company’s gross margins rose nearly 2 percentage points, to 33.1%, and its average ticket increased around 8.5%. Lowe’s also reported a modest increase in inventory turnover, to 4.46 turns.

Home Depot’s average ticket rose 7.4% to $55.11 per customer, a company record. “We saw increases in every category,” said John Costello, the retailer’s executive vice-president, merchandising and marketing. The company noted that 35% of all transactions now go through self-checkout machines that, at the end of the quarter, were in 822 of Home Depot’s 1,740 stores.

Home Depot reported a 42% increase in its At-Home Services installed sales business.

Both companies expressed confidence about their future business prospects. Lowe’s plans to open 19 stores in the second quarter — on its way to 140 new stores this year — and is projecting a 19% sales gain for the year, with its same-store sales projected to rise between 6% and 7%. Home Depot raised its projections for sales growth to between 10% and 12%, and its projections for earnings per share to between 10% and 14%. It also committed to spend another $1 billion this year on improving the physical appearance of its stores.

Home Depot went on an acquisition binge just days before its financials were released, buying the Home Mart chain in Mexico and White Cap Construction in California.

Consolidated net sales consist of sales through Rona’s distribution centers, along with retail sales from its corporate stores and its share of retail sales from its investment in other, dealer-owned outlets.

Overall sales at retail through all outlets were up 72.3% to $440.7 million in the first quarter. Same-store sales were up 7.4%. By comparison, Home Depot’s same-store sales chain-wide were up 7.7%.

Company president and CEO Robert Dutton reiterated his company’s intention to double its share of the market by 2007, through both dealer conversions and continued acquisitions. However, he admits, there is little opportunity left in the country for major acquisitions of the scale of Rona’s takeover of Réno-Dépôt, Revelstoke and Cashway, which enabled the company to double its market share between 1999 and 2003.

At the end of 2003, Rona currently accounted for 12.2% of the $31.7 billion Canadian retail home improvement industry.

The conference portion of H2X Canada will be held on February 19, expanding the show to a four-day event.

CHRA president Bob Elliott has managed to bring back into the fold some of the organizations that had been with the show in the past. The Canadian Hardware & Housewares Manufacturers Association has given its support by scheduling its annual Gala in conjunction with the new event. A deal has been struck with the Paint and Decorating Retailers Association, Floor Coverings Institute of Ontario, and the Walls, Windows and Furnishings Association to host a simultaneous event under the same roof, called the Décor + Design Expo & Conference (D2X — Canada).

A third component of the new hardware show will be the addition of a full-day conference component on February 19, 2005, turning the show into a four-day event. The conference program will be aimed primarily at retailers and their staff, but organizers hope to attract a broader audience, as well.

Although the deal between CRHA and Messe Frankfurt has yet to be inked, details of how much equity the German trade fair giant will secure expect to be finalized over the next few weeks. “We’re comfortable with the details of what will go into the contract,” says Elliott. He would not disclose how much equity the giant German organization will secure in the new Canadian venture.

“The Home Expressions program is conveying the end use ,the dream, to the consumer, while encouraging dealers, with their limited space, to tie in product presentations within their stores,” says Ferguson. “You’ve got to give customers ideas for how to decorate their house.”

Most recently, the Forest Stewardship Council certified the Tembec-managed Gordon Cosens Forest, a five-million-acre region in Ontario, making it one of the largest FSC-certified forests in the world, and the first boreal forest to be certified in North America.

The Rainforest Alliance SmartWood Program was initiated in 1989 to improve the effectiveness of sustainable forestry in conserving biodiversity and ensuring equitable treatment of local communities and workers, as well as creating financial incentives for businesses to employ responsible forestry practices. SmartWood has certified more than 1,000 operations and 32 million acres of forest worldwide.

Since filing Chapter 11 in February, the company has closed eight stores and negotiated a new $70 million line of credit. Its stores, which average more than 130,000 sq.ft. each, at one time were seen as being in the vanguard of a home décor trend that home improvement dealers began embracing in the mid 1990s. Its stores currently stock a range of decorative merchandise, including artificial flowers, picture frames, kitchen and bath accessories and housewares.

Changes to the stores will begin this fall and be completed by year’s end.

Criterium’s findings seem to be confirmed, if indirectly, by the Home Improvement Research Institute, whose own recent survey of new home buyers found that, on average they spent $3,100 to improve their houses within one year of purchasing them. In fact, buyers of older homes spent an average of $2,000, while those who bought new homes spent an average of $5,000.

Those findings, which HIRI revealed during the National Hardware Show in Las Vegas last week, showed that, while a lot of that spending goes towards landscaping and outdoor living, windows, kitchens, bathrooms and living rooms were also upgraded during this period.

HIRI’s survey also found that 52% of recent home buyers had completed one or more home improvements within the first year of purchasing their home.

CHICAGO — Ace Hardware has made a deal to use a new software platform for its customer relationship management (CRM) systems. The adoption of technology by Teradata, a division of NCR, will begin this month and be completed by the third quarter of 2004. Ace already uses Teradata systems to drive its customer loyalty program, the Helpful Hardware Club.

LONDON — A specialty tools show has been added alongside the DIY & Garden Show held each year in January. Totally Tools will take place at Earls Court 2 January 16-18, 2005, in response to a stated desire by the hand and power tool companies to have a show of their own, says show organizer Christopher Leonard-Morgan. The DIY & Garden Show is in its 11^th year, attracting visitors from more than 30 countries.

TORONTO — After receiving approval last year to enter the banking business, Canadian Tire‘s financial services division enjoyed an increase in its first-quarter pre-tax profits of 6%, reaching $25.8 million. The increase came both from the conversion of customers from Canadian Tire store credit cards to Canadian Tire MasterCard accounts, and from an increase in customer transactions billed to the card. But the company is years away from getting average balances on Canadian Tire MasterCard accounts up to the industry average of about $1,800, says the company. The average current level is $1,350.

Gagnon informed a room full of vendors that BMR has grown its own hardware sales to its own members, located mainly in Quebec, from $9.1 million in 1997 to $80 million today. While he invited vendors to be part of that growth, he added that private label will play an increasing role in the company’s assortments, and so will offshore buying. “You have to face the reality,” he said. “We’re doing a lot of imports with direct shipments.”

But in exchange, Canada wants to keep the arbitration process in the hands of an independent binational panel.

MEXICO CITY — Home Depot has strengthened its market position in Mexico by agreeing to acquire Home Mart, that country’s first big-box home improvement retailer and currently its second-largest chain. The terms of this deal were not disclosed.

With the addition of Home Mart, Home Depot’s Mexico operations expand to 39 stores, and puts Home Depot into seven new markets. “We anticipate a smooth transition,” says Ricardo Saldivar, president of Home Depot Mexico.

Mexico’s retail home improvement industry generates an estimated $15 billion in annual sales. The country has 100 million residents living in nearly 25 million dwellings, and the government estimates that Mexico will need at least 23 million more homes by 2030, just to keep up with a population that is expected to grow by 2 million per year. Mexico’s president Vicente Fox has made housing formation a priority of his administration, and has set as a goal the construction of 750,000 homes in 100 cities per year by 2006.

However, retailers must pick their spots, as home ownership is limited by the fact that two-fifths of Mexico’s population lives below that country’s poverty level, and the country’s mortgage financing system remains restrictive.

“We look forward to offering product innovations, compelling store presentations, and exceptional service to even more customers in Mexico,” said Frank Blake, Home Depot’s executive vp-business development and corporate operations, in a prepared statement. With this acquisition, Home Depot has raised its forecast for total store openings in 2004 from 175 to 185.

Both Schurman and Irving-owned Kent Building Materials are members of Independent Lumber Dealers Co-operative, and have worked shoulder-to-shoulder through the years, sharing buying power and best practices. Kent has no stores on P.E.I., but has been expanding aggressively into new markets, primarily in its home province of New Brunswick, over the past couple of years.

However, a different mood pervaded the Las Vegas event, as the first morning of the show was jammed with people, preparing their booths for visitors, attending the morning conference sessions, and lining up for their registration badges.

An important part of the show was an expanded conference program, which ran from 8 a.m. to 10 a.m. each morning. The show itself then opened at 10 a.m.

Above all, NHS attracted that all-important element — buyers. Many of North America’s largest home improvement retailers were represented, including Home Depot, Ace Hardware, Rona, Sears and Canadian Tire. International turnout was also strong, with buyers present from companies such as Sodimac (Chile), Mitre 10 (New Zealand), Leroy Merlin (France) and Hornbach (Germany). Other countries walking the show included Switzerland, Greece, Denmark and Mexico.

While some anticipated that the show was strongly lawn and garden, it in fact featured three strong components — hardware, seasonal and paint and decorating. Familiar names, such as MD, Zircon, Benjamin Moore, Fiesta, and Minwax, were outnumbered by lesser-known companies, a plus, many buyers admitted, for finding new products. The Las Vegas location attracted a strong contingent of west-coast vendors — including a lot of well-tanned Californians.

The show also featured a number of less than conventional exhibitors, reflecting the increased blurring of the lines between various types of retail. Pfizer had a strong presence, promoting, of all things, Listerine. eBay was on hand, as well. The online auction service has been seriously pursuing the business-to-business market over the past couple of years, as a means for dealers and vendors alike to unload unwanted merchandise.

U-Haul returned to NHS after an absence of several years. The company’s trailer rentals typically serve a new home buyer, a prime customer for a home improvement retailer. And, of course, Hardlines was there in full force, garnering interest for its weekly breaking news service, and for its Annual Conference Series (September 8-9, 2004).

Retail performance was strong, with a 5.0% increase in sales during the quarter, and a 3.1% increase in same-store sales. Sales were particularly strong in the hardware, sporting goods, and lawn and garden categories.

Nor is the company content to sell hardlines and gasoline. Canadian Tire is aiming to pump up sales by providing busy commuters with prepared meals and movie rentals at its “next generation” convenience stores. The broad-based hardlines retailer will enhance its gas bars with fast and ready-to-prepare foods, such as frozen meats, fresh and frozen pizzas, sandwiches, and fruits and vegetables. The company is also looking to partner with a major movie rental company, and may even introduce photo finishing.

The expanded convenience stores should help drive sales at Canadian Tire’s petroleum division, which operates 243 gas bars and 52 car washes. That division grew quarterly sales by 3.7%, with a 33.8% rise in car wash sales and a 22.2% hike in convenience store sales. However, the high cost of wholesale gasoline lead to a pre-tax profits drop in the petroleum division of 97%, to $100,000 for the quarter.

Canadian Tire plans to open 21 stores in 2004, of which 11 will be the Concept 20/20 format.

The quarter was marked by the opening in April of a new, 1 million-sq.ft. regional distribution center just outside Sacramento, Calif., which replaced a nearby, existing center half that size in response to growing retail sales in the region, and the recent opening of an international buying office in Hong Kong.

The co-op expects to hire 65 employees for this facility in June 2005, a number that could double within a year.

Expansion of the Asian event coincides with the scaling back of Practical World in Cologne, which will now be held every two years. The next one is in March, 2006.

BOUCHERVILLE, Que. — Rona Inc., the Canadian home improvement distributor and retailer, has added four new locations to its retail network, two in British Columbia and another in Manitoba. But expansion is not just focused on hardware and building center dealers. Rona has also cut the ribbon at a 12,000-sq.ft. Botanix-L’Union des Jardiniers garden centre in Rivière-du-Loup, Que., the largest store of its kind in the province east of Quebec City.

ATLANTA — Georgia-Pacific Corp. has completed its previously announced sale of its distribution division to a newly formed company owned by Cerberus Capital Management, a private, New York-based firm, and members of the distribution business’s management team. The transaction was valued at about $810 million. The distribution business will continue purchasing structural panels, lumber and other building products manufactured by Georgia-Pacific for the next six years, as a result of an agreement between the buyer and seller.

MONTREAL — RCR has been listed with Lowe’s Cos. for the first time, with product shipping into the Wyoming DC and stocking for 85 stores for carpet bar, 425 stores for carpet rolls, supplied from its Elgin, Ill. warehouse.

BENTONVILLE, Ark. — Wal-Mart Stores Inc. saw first-quarter profit increase by 16% as sales rose at the fastest pace in more than two years. Net income climbed to $2.17 billion from $1.86 billion.

DUNCAN, B.C. — As it prepares to emerge from debt restructuring, Doman Industries has reported a 1Q net loss of $44.3 million, deepening the loss of $14.5 million in the preceding quarter and marking a swing from net earnings of $52.2 million in the first quarter of 2003. The strength of the U.S. dollar versus the Canadian currency accounted for an unrealized foreign exchange loss of $10.0 million.

LAKE FOREST, Ill. — Kitchenwares company Salton Inc. posted a third-quarter loss of $58 million on sales of $191.4 million, compared with a loss of $12.1 million on sales of $166.4 million during the same period a year earlier. As a result, Salton says it will cut expenses by at least $40 million to reduce domestic operating costs. Brands include the George Foreman grill and Westinghouse home appliances.

Home Depot would be the latest retailer to get this treatment from Playboy, which has used the “Women of … ” theme for nude pictorials of female employees of such companies as Wal-Mart and Starbucks.

During the period, the company posted a profit of $199,000, compared with a loss of $394,000 in the first quarter of 2003. Recorded revenues were slowed by a change in billing practice by a vendor from last year; otherwise, revenues would have increased by 6%. The company also continues to strengthen its balance sheet. Bank debt was reduced 11.8% from the same time last year, and total term debt decreased to $12.8 million from $14.5 million.

Thanks to the acquisition of Ace Hardware Canada Ltd., a deal that closed back in February, 2003, Sodisco-Howden’s hardware sales increased by 9%. “We’ve had good support from all the buying groups, and from our dealers in Quebec,” says Jos Wintermans, president and CEO of Sodisco-Howden, “so the increases have been right across the board.”

Wintermans points out that earnings per share gained one cent, after a loss of two cents in the same quarter a year earlier. “And we issued a ten-cent dividend to reward shareholders, which reflects our strong cash flow,” he adds. “We are very bullish about the future.”

Lieberman added in a prepared statement that the company’s profitability benefited from an earlier refinancing of its debt, which lowered its interest rate to 4% from 13%. The co-op did not release more specific financial information with this quarterly announcement.

TruServ expects its wholesale sales to continue to grow through the remainder of the year, as the U.S. economy continues to recover.

White Cap’s product mix includes tools and equipment (probably its strongest category), hardware, outdoor lighting, paint and work wear. Its yard features such construction materials as concrete, drainage and thermal and moisture protection products for commercial applications, as well as more conventional materials for home building and remodeling.

Home Depot estimates the size of the professional contractor market at $410 billion, and Jim Stoddart, president of Home Depot Supply, called White Cap “a leader in this highly fragmented market.” In a letter to its vendors about this deal, White Cap’s CEO Ted Nark said his company intended to “maintain business as usual,” and sought to assure those vendors that “as we leverage our strengths to grow the business, you business will also grow.”

The warehouse giant has a more personal connection with its newly acquired company, too. Dan Tsujioka, White Cap’s former executive vice-president in charge of acquisitions, was Home Depot’s vp-store operations in the 1980s, and at one point was in charge of opening every one of Home Depot’s new stores in the early stages of the chain’s expansion. He will remain on in a consulting capacity on further acquisitions.

Home Depot expects to complete its acquisition of White Cap within 30 days. It did not disclose the purchase terms, but noted that the deal would add to its earnings.

The connection between the two companies goes deeper than this latest deal. The contractors Home Depot uses to build its stores have had White Cap included among their preferred suppliers for some time, says Karen Haggerty, company spokesperson.

The lineup this year includes Jim Inglis, a former Home Depot executive and retail consultant; Joe Scarlett, chairman of the fast-growing Nashville, Tenn.-based Tractor Supply Co.; and Jos Wintermans, president and CEO of Sodisco-Howden Group, which has recently re-positioned itself as a primary force in hardlines distribution in the country.

Hardlines is proud to host the illustrious Outstanding Retailer Awards Lunch, presented by Hardware Merchandising magazine, this year, followed by the Gala Dinner that evening, with Red Green, on September 8.

We’ll be introducing more speakers in the weeks to come, but mark your calendar today for the Hardlines Conference Series, September 8-9, in Toronto. This year, the Conference Series moves to the brand new Renaissance Airport Hotel. For more information, click here or call us at 416-489-3396.

Earlier this year, CanWel recently changed its name from CanWel Distribution Ltd. to CanWel Building Materials. “We wanted a name that better reflects who we are today, who we’ll be in the future,” said CanWel’s president, Tom Donaldson, in a recent interview with Hardlines.

Last year, CanWel generated $542 million in revenue, and around $7.5 million in net income, from the sale of building products from its 13 distribution centers, says Johnston. He confirms that, aside from some debt reduction, the money raised from the IPO will be used to fund acquisitions. “We want to be the dominant building materials distributor in Canada,” he says.

According to Donaldson, the company has a big opportunity to grow, and he observes that the industry is enjoying “a very positive business environment that will continue for quite a while.”

Wal-Mart stands behind everyday low prices, which means, for vendors, everyday low cost. “We’re going to negotiate hard price, that’s a given,” Pilkington said. But being well-armed with knowledge of one’s item and category, and how it’s carried in Wal-Mart, goes a long way to building credibility. Also, companies should point out whether their products are already selling well in other channels or in other countries. These factors will earn a potential supplier added points when trying to make contact with the giant retailer.

But if a vendor does make that contact, they’d better be able to deliver. “If you get interest from a buyer, prepare for a wild ride,” said Pilkington, warning that the process “will move fast — believe me.”

The company told investors to expect higher sales and profit for the remainder of the year.

Masco provided a breakdown of some of its business segments. It reported that sales of cabinets and related products rose 18%, plumbing sales grew by 19%, decorative products gained 28%, and specialty products increased 20%. The company’s Masco Contractor Services division, which installs a range of products for large production homebuilders, saw its sales rise 16%.

The supplier also reported that business from Home Depot, Lowe’s and Wal-Mart, its three largest dealer customers, increased 21%.

The new line will be priced below other upscale paint brands, and will include a full line of Trading Spaces accessories, such as paint brushes, rollers, trays and sponges.

Existing Doman shareholders will not be entitled to any distributions or other compensation under this latest plan, nor will they have voting rights, but will be granted the option, through warrants, to purchase up to 10% of the shares of the newly formed Lumberco. The warrants would have a five year term.

RED DEER, Alta. — Peavey Industries Ltd. has joined the hardware buying group, Mutual Hardware. Peavey is a privately owned hardware and farm supply retailer with 26 stores throughout Western Canada, and sales of more than $100 million. Peavey is the 22^nd member of Mutual, which consists of retail chains, co-ops and industrial suppliers of hardware in Canada.

ISSAQUAH, Wash. — Costco Wholesale Corp. had net sales of $3.56 billion for the four weeks ended May 2, 2004. That’s an increase of 13% from $3.14 billion in the same four-week period of the prior fiscal year. For the first 35 weeks of its 2004 fiscal year, the company reported net sales of $31.35 billion, an increase of 14% from $27.47 billion.

MINNEAPOLIS — Water Industries Inc. had net sales from continuing operations for the third quarter of $5.3 million, up 6.8% from $5.0 million during the same period a year earlier. Net income for the third quarter was $169,000, up from a loss of $53,000.

CINCINNATI – Procter & Gamble Co. reported that third-quarter earnings rose 20%, while sales were $13 billion, up 22% from nearly $10.7 billion a year ago, thanks to strong sales in beauty care, health care.

AVON, Ohio — Henkel Consumer Adhesives has purchased the retail business of Tape Specialties Ltd., which includes the Painters Mate brand of adhesive tapes. Tape Specialties is a Canadian manufacturer of environmentally friendly water-based rubber adhesives.

TORONTO — U.S. industrialist Jerry Zucker, of South Carolina-based InterTech Group Inc., is close to owning enough shares of department store chain Hudson’s Bay Co. to make a takeover bid. Zucker now owns 18.1% of Canada’s oldest company. At 20%, he would be forced to make an offer to buy the entire company.

More interestingly, Lowe’s is conducting a contest, with a $10,000 prize, for local artists to submit murals that will decorate two sides of the store. The theme of the murals, according to a statement by the retailer, will be “Brooklyn: My Neighborhood, My Home,” and will depict what the artists believe makes Brooklyn a unique place to live.

Dean Andrey, category manager for tool accessories and tool storage at Canadian Tire Corp., stressed the importance of innovative products, items that will help Canadian Tire differentiate itself in the marketplace. “We want to be first to market with innovative new products,” he said.

To satisfy that hunger for the new and different, Canadian Tire stays open to new vendors of all stripes. “We have a vendor base of perhaps 2,000 or more vendors, including some of the largest and most well-established companies in the hardware and home improvement industry. But we also deal with some of the smallest, least established companies.”

With the development of Canadian Tire’s Concept 20/20, which expands certain departments on the retail floor of its stores, Canadian Tire offers more opportunities for vendors of décor products to get shelf space, he added.

Karol Hurrell, merchant at Home Depot Canada for department 29, kitchens, said that getting established with the Canadian division can become an effective stepping stone for doing business in Atlanta. If a vendor can learn to manage working with 102 stores in Canada, they are in a good position to present their programs successfully in Atlanta.
(Next week: tips for getting listed with Wal-Mart Canada)

Following the retirement of Barrie Sali at the end of 2003 as president and CEO of Tim-BR-Marts Ltd., the Vancouver-based buying group, there were murmurs that he would start a group for GSDs himself. Through five members alone, Tim-BR-Marts is the largest buyer of gypsum in Canada. But Sali tells Hardlines that he’s set up a home office and will devote his time to real estate development. “Am I going to go back into [the buying group business]? I don’t think so at this time,” he says. “I love what I’m doing now.”

At TSG, recruitment has not been aimed at existing members of other groups, which is why membership has been concentrated in Central Canada. “All the big GSDs in the West are affiliated,” notes Skrepnek, ” and I’ve tried to stay away from their loyal members. I didn’t want to disrupt things.”

At least, not yet. Skrepnek wants TSG to become the largest buyer of gypsum in the country and expects the group to top out at 15-20 members by 2006.

The Color Made Simple program includes removable “peel ‘n place” paint chips, which consumers can take home and test on their walls. It also includes an idea center that provides cards with color combination recommendations for various rooms, including a photo of a room and three coordinating color swatches.

One newly converted store may find some tough competition — from another Rona Home & Garden. The two stores, in Toronto’s east end, are practically right around the corner from each other, but that doesn’t faze Rona’s vice-president, store operations for Ontario, James Jones.

“Right now, there’s no need to close any of these stores,” he says. “Both stores will thrive and grow their market share.”

He points out that the existing Rona store has enjoyed high double-digit same-store sales in the past two years, putting its volumes just about on par with its neighbour. Both stores will continue to co-exist as a hedge against five Home Depot stores that are located in the area.

The process of harmonizing assortments in the newly converted stores should be completed by December 2005, says Jones.

In the quarter, G-P negotiated a deal to sell its distribution division to Cerberus Capital Management L.P. and some of that division’s senior-level managers. Georgia-Pacific expects the transaction to result in net after-tax proceeds of approximately $780 million, which will be used to reduce debt.

In the quarter, sales from the building products distribution division rose 44.4% to $1.264 billion. Manufacturing sales increased 34.9% to $1.652 billion.

As a corporation, G-P reported consolidated sales of $5.222 billion, a 17.7% gain over first quarter 2003 totals. The company’s net income was $147 million, versus a loss of $30 million. These totals included results from G-P’s consumer products, packaging, and paper and pulp divisions.

VANCOUVER — Forestry giant West Fraser Timber Co. posted earnings of $27 million on sales of $541 million for the first quarter of 2004, compared with earnings of $11 million on sales of $487 million in the first quarter of 2003. Earnings and EBITDA increased, despite a much stronger Canadian dollar versus the comparative period in 2003. First quarter earnings also include a $10 million pre-tax, non-cash charge related to the expensing of share options.

CALGARY, Alta. — Allroc Building Products Ltd. has added a new dealer to its ranks. Carrière Lefebvre is a Montreal-based GSD, and the latest Allroc member in the province of Quebec. Already strong in the West (it has 47 dealers west of Ontario), Allroc has its eye on the East for expansion. “We need a stronger presence in Atlantic Canada,” says Bob Hancock, vice-president of Allroc.

PRINCE RUPERT, B.C. — Tyee Building Supplies, a building center in this northern community of British Columbia, has become the latest independent in Western Canada to sign with Rona Inc. The former member of Irly Distributors becomes the 24th Rona-bannered store in the province, and the western-most Rona dealer in the country.

TORONTO — At its AGM last week, Sears Canada gave more clues to its previously announced desire to populate power centers (see Hardlines passim — Editor). Called Sears Village, clusters of smaller Sears specialty shops, they’ll be part of a strategy to reclaim market share in high-growth areas of the country that may not support a traditional mall. The retailer plans up to eight such Village stores by year’s end, and anticipates that there’s room for hundreds more in the future. Sears is owned 54% by Sears Roebuck & Co. in the U.S.

MISSISSAUGA, Ont. — Remington Products has relocated to the headquarters of its new owner, Rayovac. The company will now be known as Rayovac Canada Inc. The new address is 5448 Timberlea Boulevard, Mississauga, Ont. L4W 2T7. (905-624-4448 or 1-800-268-0425)

STE-MARIE, Que. — Maax Inc., one of North America’s largest makers of bathroom fixtures and accessories, reported sharply lower profits and revenues for its fourth quarter. Earnings fell to nearly $3.4 million, compared with a profit of $6 million a year earlier. Net sales in the period fell almost 8% to $142.8 million from $154.7 million, due mainly to the impact of the stronger Canadian dollar compared with the U.S. dollar. For the entire fiscal year, Maax profits fell to $34.4 million from $36.6 million, while annual sales rose to $642.2 million from $616.9 million.

MISSISSAUGA, Ont. — The Canadian Retail Hardware Association has moved offices. They’re still in the same building, but with a new suite number: CRHA, 2121 Argentia Road, suite 404, Mississauga, Ont. L5N 2X4. (905-821-3470)

MONTREAL — Tembec‘s second-quarter consolidated gross sales were $887.2 million, up from $857.8 million in same period last year. Tembec generated a net loss of $93.1 million, a swing from net earnings of $34.2 million a year earlier.

CHICAGO — Filling only 200,000 sq.ft. of space, the inaugural AHMA Hardware Show received mixed reviews from exhibitors and visitors alike.

However, that small size meant, for some, a more manageable show, one that made key buyers more accessible given the absence of many major vendors. Buyers, in turn, were likely to find more and smaller suppliers representing, in many cases, some true innovation and new product opportunities. Exhibitors included many firms that had not previously exhibited at the National Hardware Show, although many of them were not traditional hardware/home improvement companies, and looked better suited for a housewares show.

According to the AHMA, Home Depot, Lowe’s, Menard’s, Ace Hardware, Do it Best Corp. and True Value were among the 15,000 visitors at the show. The show also managed to attract a number of international buyers — from 15 countries that included South Africa, Germany, the U.K., China and Chile.

To its credit, the AHMA spared no expense in staging the show. It sponsored a lavish opening reception for buyers and exhibitors and a special reception another night for international attendees and exporting exhibitors. A seminar schedule offered insights on everything from selling hardware on the internet and international retailing, to other management and merchandising-oriented topics.

“We want to differentiate through new, exciting exclusive merchandise,” he said, noting that his company, which has more than 450 stores across the country, has the resources to excel at style and design. Those elements are part of the company’s efforts to better appeal to the female customer, a prime target of Canadian Tire’s newest “20/20” store concept.

Remarking on the increasing competition of the Canadian retail landscape, Roussy called retail “more intense” than ever. Wal-Mart Canada and Loblaw’s now hold about 20% of the entire Canadian retail market, he said. He went on to quote his boss, Canadian Tire president and CEO Wayne Sales: “In retail, there are only winners and losers. There’s no room in the middle.”

Canadian Tire sees itself fitting in alongside that competition as a retail winner by emulating Target Stores in the U.S., which brings a higher-end approach to mass merchandising to compete alongside Wal-Mart there.

Canadian Tire believes there’s room for only one mass merchant (Wal-Mart) but does see room for two or three other companies in the middle, or “hybrid” zone, Roussy explained. He sees Canadian Tire fitting in there. By being relevant and unique, it can be the “Target of Canada,” he said.

Home Depot broke ground for the store last week, following a ceremonial blessing. The giant retailer currently operates six stores in Hawaii, but this will be its first in Hilo. It’s scheduled to open in December.

Griffith is traveling on business in Asia and unavailable for comment. But Dave Hodnik, Ace’s president and CEO, said in a prepared statement that Griffith was responsible for much of the co-op’s recent retail successes. Last year, Ace surpassed the $100 million mark in net income for the first time, increased its wholesale sales by 4.3% to $3.2 billion, and paid out a record $102 million in patronage dividends to its members. During the year, the co-op implemented nearly 4,000 new product displays in its dealers’ stores, and increased its total retail square footage by 10%.

In 2004, during which it will celebrate its 80^th anniversary, Ace expects to add 80 stores and increase the total retail selling space within its dealer network by 1.6 million sq.ft. This year, the company will also open a one-million-sq.ft. distribution center in Sacramento, Calif., to support its west-coast growth.

The emphasis on these programs is part of TruServ’s efforts to define the future of the independent hardlines retailer, one that figures heavily on the spending power of the female shopper, says Bill Morrison, president of TruServ Canada.

“Value continues to be an important part of the business for our dealers, so we’ve also had a lot of emphasis at the market on our ‘Red Hot’ deals,” Morrison says.

These special buys reflect large-quantity purchases that are made available to the dealers on a rapid-delivery basis. “It gets around having to plan out their purchases by six or nine months,” he adds. Red Hot specials at the latest market included fertilizer and bird seed.

Finally, a renewed commitment by TruServ Canada to help build the businesses of its members was underlined by the reorganization of its management team into new business development — under vice-president Tony DiEmanuele — and sales and operations, which concentrates on development for existing dealers — under vice-president Ray Falkenberg. Falkenberg’s team of district managers will help dealers understand and utilize the latest programs coming out of TruServ to help them, in turn, build sales.

With an inventory of 30,000 SKUs, Woodie’s includes housewares and decorative items to appeal to women. Its female customer count has doubled over the last few years. Decorating accounts for 29% of sales; gardening, 27%; DIY, 22%; home and housewares, 13%, and building materials, 9%.

To bring in more female customers — and it’s getting twice as many as it did some years ago — Woodie’s inventory now includes everything from picture frames and decorative items to housewares and big Christmas decorative sections in season. It also runs how-to clinics for women, teaching them how to decorate, become a DIYer, improve their yards and gardens, etc.

The company recently installed a new, upgraded POS system, Colman reported, and spends a lot of time and effort on developing its people. “Customer care is our constant concern,” he explained. To encourage customer service, the chain recently has concentrated on recruiting mature personnel, as it finds older employees understand customer service and are enthusiastic in offering it.

More information about the Worldwide DIY Council can be found at www.wdiyc.org.

Of the six stores, which had sales of about $60 million throughout the Greater Montreal Area, one, a small, 3,000-sq.ft. outlet on property not owned by the chain, has been closed down. The others are slated for renovation over the next two or three years.

As part of its renovation, the former Matco outlet in Blaineville will also have a 25,000-sq.ft. warehouse added to it, which will be used to supply the other former Matco stores.

“Overregulation is devastating rural communities, shuttering family-owned businesses and hurting those who practice responsible, sustainable forest management in California,” said Donn Zea, the commission’s president.

The Commission attributed the sharp decline in harvesting to two primary factors: a near-elimination of harvesting trees on government land (which has fallen 90% since 1988) and increasing regulatory red-tape that makes it harder and excessively expensive to responsibly harvest trees on privately-owned lands. Environmentalists have argued previously that mechanization has had as much to do with logging job losses in the western U.S. as environmental laws.

The timing of the release of this report probably isn’t accidental, as the U.S. Forest Service is advancing a plan to triple logging in 11.5 acres of national forests in the Sierra Nevadas, and is pushing to log beetle- and drought-ravaged trees that are still standing after the record number of wildfires in Southern California last year.

Indeed, the commission contends that the decline in harvesting on publicly owned land is what caused those fires because government policies prevent their maintenance.

ATLANTA — Home Depot is now carrying cut flowers in about 200 of its stores, along with live goods. A limited test last winter is being expanded to other stores in the chain, in conjunction with local florists, such as FTD.

HOFFMAN ESTATES & TORONTO — Sears Roebuck reports that it lost $20 million in its first quarter ended April 3, compared with a profit of $192 million a year earlier. However, its counterpart in Canada, Sears Canada, saw its 1Q revenues rise 3.8% to $1.331 billion, from $1.282 billion for the same period last year. Same store sales increased 8.1%.

Lincolnshire. Ill. — Fortune Brands Inc. saw its 1Q profits jump 40%. Strong consumer demand, favorable currency-exchange rates and cost-saving initiatives were all cited as contributing to the rise. Net income was $139.7 million, up from $99.5 million a year earlier.

MISSISSAUGA, Ont. — Masonite International Corp. has reported a 36% increase in first-quarter profit on sales that were up 16%. Net income was $27.7 million, up from $20.3 million, on sales that climbed to US$468 million from US$402.2 million during the same period a year earlier.

GLENVIEW, Ill. — Illinois Tool Works enjoyed a sales increase of 17% in its first quarter, to $2.71 billion. Net income rose to $290.2 million from $195.4 million, while income from continuing operations increased to $290.0 million from $199.5 million a year earlier. ITW completed 10 acquisitions in the quarter, representing $250 million of acquired annual revenues.

BOISE, Idaho — Boise Cascade Corp. reported first quarter 2004 net income of $63.5 million, compared with a net loss of $27.5 million in first quarter of 2003. Sales in first quarter nearly doubled to $3.5 billion, compared with $1.9 billion a year ago. Sales increased primarily because of the acquisition of OfficeMax in December 2003, but were also aided by strong product prices in Boise Building Solutions. The quarter’s results include a pre-tax gain of $59.9 million, from the sale of 79,000 acres of timberland in Louisiana. Before this special item, the company posted first quarter 2004 net income of $26.9 million.

GREENSBORO, N.C. — Oakwood Homes Corp. has sold substantially all of its operations and non-cash assets to Clayton Homes Inc., a subsidiary of Berkshire Hathaway Inc., for $372.5 million in cash. The asset sale was approved by the Company’s creditors pursuant to applicable bankruptcy law. The sale proceeds and substantially all assets not sold to Clayton were conveyed to a liquidation trust for ultimate distribution to the company’s various constituencies as described in the company’s final amended plan of reorganization, under U.S. Bankruptcy Court for the District of Delaware.

B&D also saw sales from its Hardware and Home Improvement segment grow 14% in the quarter, with revenue from Price-Pfister brand faucets and bath accessories increasing 20% on the strength of Lowe’s taking on that line chain wide. During the quarter, B&D added to this segment through its acquisitions of Baldwin Brass and Weiser Lock, which are currently being integrated into B&D’s Kwikset security hardware business, which itself is in the process of being restructured to reverse soft sales. In the quarter, that restructuring resulted in $20 million in savings, and the company projects the total savings for the year could be $45 million.

The integration of the new companies into this business is expected to yield a $40 million improvement in operating income in 2005 and 2006 combined.

Lowe’s currently operates 61 stores in Florida, and is building seven stores and a distribution center in the central part of the state that are scheduled to open this year.

FORT WAYNE, Ind. — Two of America’s largest home improvement dealers have announced plans to open stores in this town, best known, industry wise, as headquarters of the buying group Do it Best.

According to the News-Sentinel, a local newspaper, a local development group has obtained a commitment from Menard’s, the U.S. industry’s third-largest dealer, to build the retailer’s third store in this market. It will be a $7 million, 225,000-sq.ft. home improvement center on 16 acres. The Menard’s construction, which should begin by year’s end, would be part of a larger redevelopment of a 102-acre property, which would include the razing of an old Sears store.

The Menard’s outlet will be located in Fort Wayne’s southeast quadrant, whose households’ buying power equals $33.6 million, second only to the southwest, according to a recent survey by Chicago-based research firm MetroEdge.

However, several acquisitions over the past years have managed to shore up the company’s position, everything from Weber Supply‘s retail business in Central and Eastern Canada and Smith-Barregar in British Columbia, to the home improvement business of Marchands Unis in Quebec. Then, last year, Sodisco-Howden paid $15 million to buy out of the operations of Ace Hardware in Canada.

Sodisco-Howden continues to promote the Ace name. There are now 43 stores in Quebec that have converted from one of Sodisco-Howden’s retired banners such as Novico. In addition, about 40 Do-it center dealers, who are also confronting the retirement of that banner in Canada, have also agreed to sign on with Ace. Add in another 60 dealers, many of them co-bannered buying group members, especially from TIM-BR Mart Ontario, and the wholesale distributor expects to have 200 Ace dealers in Canada by year’s end.

The initiatives seem to be working. Sodisco-Howden’s business through its Western DC, Smith-Barregar division, is up 30% last year, and significant inroads have been made to secure more business from key dealers in British Columbia, such as Dick’s Lumber in Burnaby and Slegg Lumber, based in Sidney, which has five outlets in the province.

In addition, Sodisco-Howden continues to invest in the business. Most recently, a program is under way to implement an enterprise resource planning system (ERP), a state-of-the-art DC operational system by JD Edwards “to get the whole company on the same platform,” says Wintermans. “We’re expanding, we’re going forward. We’ve stopped playing defence. We’re playing offence now.”

Since entering China in 1998 with a central warehouse and offices, OBI now has nine stores there, and has grown to four regional offices. But Lux says the potential for that market is tremendous: his goal is to have 19 stores in China by the end of this year, expanding to 24 stores by the end of 2005, and increase that number to 100 by 2010.

To facilitate this growth, OBI last month has appointed one of its senior merchants, Markus Maus, as COO of OBI’s Chinese operation.

Another strong market for OBI is Russia, where the retailer has installed two stores so far, both of them in Moscow. While economic growth and consumer demand are strong in this city, that growth is not yet being reflected in other parts of the country. But “Moscow is phenomenal,” says Lux.

St. Petersburg is also being considered, and Lux expects to break ground on a store there very soon, for an opening in early 2005.

In the fall, the mix will shift to leather club chairs and ottomans from Mitchell Gold.

By making this move, Nordstrom puts itself in more direct competition with specialty dealers such as Pottery Barn and Bed Bath & Beyond, the latter of whose sales in 2003 rose 22.2% to $4.48 billion and earnings increased 32.2% to $399.5 million.

“Since January of this year alone, eight new dealer-owners have joined our ranks, including our very first partners from Western Canada,” said Robert Dutton, president and CEO of Rona, in a prepared statement. “We’re very pleased that they’ve joined us, especially because it helps confirm that our recruitment goal for 2004 — 50 new points of sale representing some $100 million in retail sales — is a realistic vision of the current market’s potential.”

Rightway Building Products becomes the 25^th store in Alberta to operate under a Rona banner. It has 12,000 sq.ft. of space dedicated to hardware and renovation products and two acres outside for storage, building materials and lumber.

Glacier Building Supplies is a 6,000-sq.ft. store that sits on five acres. It will become a Rona Building Centre — and the 23^rd Rona location in British Columbia.

“Brand awareness in the West going well,” Dutton says, “as private-label brands keep growing in acceptance.”

The new Rona dealer from Ontario, the Wood Works of Renfrew features 2,500 sq.ft. of retail space and one acre outside for building materials and lumber. It is converting to a Rona Home Centre. Rona now has 100 home improvement stores in Ontario, plus another couple of dozen Botanix garden centres.

While smaller than a typical Wal-Mart Supercenter — at 95,000 sq.ft., it still manages to feature everything from food and clothing to household goods, all served by 30 checkouts — including some self-serve checkouts.

Other lines include Wal-Mart’s own George brand of clothing, re-branded G for the Japanese market, along with Wal-Mart’s Simply Basic brand of men’s, women’s, and children’s fashions. The new mega-store also features a deli section that includes sushi.

LONDON, Ont. — Canadian country music artist Michelle Wright was the star of the show at the grand opening of two new TSC stores on Saturday, April 17. The stores are located in Essex and Listowel, Ont. Wright, who has been the spokesperson for TSC for the past two years, was on hand to perform live and sign autographs.

TSC, known as “The Incredible Country Hardware Store,” has 22 locations across Ontario. It’s loosely affiliated with Tractor Supply Co. in the U.S. and focuses on serving the rural home and farm market.

While the cost of investing in the new distribution was $35,000 per dealer, smaller dealers in the AWARD membership are not being excluded from the advantages of ADL, says Smith.

But the real growth for the group last year came from rebates. While shipments through the group increased 12.0% to $196 million, rebates grew by an incredible 26%, “which was a huge number, realized through the strategy of our preferred vendors.”

That preferred vendor program will be translated into the distribution centre, as well. Increasing loyalty among the members for key suppliers has been a goal of Smith’s since taking the helm four years ago, and now the group works with preferred vendors in 30 categories. “Getting the rebates requires delivering the volume. It’s an absolute buying discipline that’s going to benefit the members,” he notes.

ATLANTA — Bob Nardelli, the head of Home Depot, got an 11% increase in his pay package in 2003, says the retail giant’s latest proxy statement. Nardelli, the chairman and CEO of the company, was paid $2 million in salary, up from $1.9 million in 2002, plus a $4.5 million bonus, up from $4 million in 2002. But wait — he got an additional $5.2 million in “other compensation,” most of which relates to forgiveness of a loan, the proxy says. Throw in some stock options and his total pay package for 2003 was more than $22 million.

BOISE, Idaho — Boise Cascade Corp. has reached an agreement with Ainsworth Lumber Co. Ltd. to sell its Voyageur Panel Ltd. business to Ainsworth. The deal is worth approximately $193 million, plus as much as $10 million more based on OSB prices between the close of the deal and year-end. Boise should realize approximately $90 million from the transaction, which is expected to close in the second quarter 2004. Voyageur Panel operates an OSB plant in Barwick, Ont., that has an annual capacity of 440 million sq.ft.

SACKVILLE, N.S. — Payzant is adding a new store here — in fact, it represents the consolidation of two smaller, existing outlets into one 22,000-sq.ft. store. The store will replace a 3,500-sq.ft. Home Hardware Building Centre and a 4,000-sq.ft. Home Hardware store. The new outlet is expected to open its doors this summer. Additional features of the expanded operation will include an expanded flooring section, a rental program and gourmet shop.

BOSTON — Ace Hardware Corp. has begun connecting with its vendors with data synchronization via UCCnet. A data sync provider, TR2, has collected, cleansed and published the product information from one of Ace’s suppliers, Magla Products, a household glove supplier. This publication ensures that Magla stays compliant with their retail customers’ demands for data synchronization. Ace, along with other leading retailers such as Wal-Mart, Wegmans, Lowe’s and Home Depot, has launched the data sync initiative with suppliers to realize global standards.

CHICAGO — Federated Department Stores, which owns Macy’s and Bloomingdales, is in talks to acquire Marshall Field’s department stores from Target. Target announced last month that’s it’s looking at selling off the Marshall Field’s chain and its lower-end Mervyn’s stores, to focus on its more profitable discount stores. The deal is estimated by some to be worth up to $3 billion.

TEMISCAMING, Ont. — The Department of Commerce has notified Tembec that its duty will be reduced on imports of softwood lumber to the U.S. Since May, 2002 Tembec has been forced to pay anti-dumping duties of 10.21% on softwood lumber its sells to the United States. The reduction brings that rate down to 6.28%. This is the result of a NAFTA Panel decision which instructed the United States to change its dumping calculation methodology.

TORONTO — A new consumer website using content from some of Canada’s leading DIY, garden and home improvement figures is about to launch. Called homeenvy.com, the site will feature columns by HGTV’s Kimberly Seldon, plus Steve Maxwell, Kathy Renwald, Mag Ruffman (our DIY goddess), and the inimitable Red Green (aka Steve Smith).

The new initiative is looking for key sponsorship support. For more information, contact Terry Baskin at Footprint Associates: terrybaskin@sympatico.ca.

BACKGROUNDER:
Tillman began working for Lowe’s as a trainee when he was a teenager, and at 24 became the retailer’s youngest manager when he was assigned to run a Lowe’s store in Wilmington, N.C. That store soon emerged as the chain’s highest-volume outlet. Tillman then began his steady ascent up the management ladder to the position of senior vp-operations.

After Home Depot passed Lowe’s in sales in 1988 to become the industry’s largest retailer, Tillman initiated a bold competitive strategy to convert Lowe’s stores — mostly small and midsize outlets with attached drive-through lumberyards — into big box home centers. Tillman had the full support of Lowe’s president at the time, Leonard Herring, and the company opened its first 100,000-sq.ft. warehouse store outside Charlotte, N.C., in 1990. Lowe’s took a $71 million charge against earnings in 1990 to cover the initial conversion costs.

Tillman became Lowe’s CEO in 1996, and its chairman in 1998. During the 1990s, Lowe’s made considerable adjustments to its warehouse format, with an eye toward distinguishing it from Home Depot’s down-and-dirty presentation and appealing to female shoppers. Home Depot officials contended that Lowe’s did little more than copy their formula (right down to measuring the foundation of its new stores), but they could not dismiss Lowe’s consistent sales and earnings gains.

In 1999, Lowe’s made a big leap into the national arena when it acquired, for $1.1 billion, the 36-unit Eagle Hardware & Garden on the west coast, a purchase that for more than a year gave Lowe’s a bad case of indigestion as it integrated Eagle’s operation into its own.

Between 1990 and the end of this year, Lowe’s will have expanded from 330 to 1,092 stores. Its revenues in 2004 are expected to exceed $36 billion, and the company is one of America’s most profitable dealers.

The 41-year-old Niblock has been with Lowe’s since 1993 and was named Lowe’s president in March 2003. His expertise is on the financial and accounting sides of the business. Unlike Tillman, who had a tendency to shoot from the hip in his public statements about competitors and suppliers, Niblock is said to be more reserved.

Rona now has 100 stores in Ontario.

The conversions mean not just the end of the Building Box name, but also the end of Réno-Dépôt format in Ontario, which relied on extensive SKU counts to offer the widest selection of products among any of the big box chains in the country. It also enjoyed more contractor business than its Rona counterparts.

As the conversions continue into the interior of the stores, assortments will be harmonized with the Rona big boxes, and emphasis on private-label products will be increased. The initial focus is on specific categories. Seasonal is at the top of the list, because of the time of year. “We’re taking care of the consumer, who will be spending the most money in this area right now,” says James Jones, vice-president store operations for Rona in Ontario. The paint department, always a premier category for Rona, will see the elimination of Building Box’s Avanti and other private-label brands, with the addition of Sico and an expansion of the ICI line. Flooring is another key category, says Jones, one that combines the strengths of both banners, especially in laminates and wood flooring.

However, the 14 Réno-Dépôt stores in the Montreal and Quebec City areas will continue to operate under the existing name, and maintain their distinctive breadth and depth of assortment. The Réno-Dépôt store in Sherbrooke, Que., which Rona must sell to a home improvement competitor to meet the terms of the Competition Bureau’s approval of the Réno-Dépôt acquisition, has yet to find a buyer.

The program has been developed under the auspices of Mike Clements, merchant for At Home Services. He currently has some 300 project managers working under him to execute the program at store level.

The certification program launched in February, and through early April more than 4,000 Home Depot associates have completed at least 10 hours of the training modules and more than 1,700 associates have successfully completed all coursework to achieve full certification, according Steve Jansen, the retailer’s vp-gardening merchandising.

Consultants are identified with a certification badge on their signature orange aprons.

CONCORD, Ont. — Okay, I was just pulling your leg on April Fool’s Day with the announcement that Peter Parker (aka Spiderman) and Adam West (shown here) had joined a new “Super” buying group. But there really is a new buying group in Canada, and it started out by calling itself the “Super Group.”

Why a new group, when there are at least 12 buying groups for building materials dealers in Canada already? “None of these buying groups focuses on the commercial side of the business. Our company is fully involved in the gypsum, insulation and steel business,” says Skrepnek.

TSG already has six heavy-weight members. Guelph, Ont.-based Patene Building Supplies has 11 yards in Southwestern Ontario, stretching into the Niagara Peninsula, and sales of about $75 million. Beauchesne Group, including DL in Ottawa and DSF in Quebec City, has also joined the new group. The other members, all centered around the Greater Toronto Area, are Leon’s, Coastal Drywall, Costa Building Supplies and Commercial Building Supplies. (More on TSG in next week’s issue — Michael)

Home Depot wants to occupy 105,000 sq.ft. of the complex, as well as put in place a 54,000-sq.ft. garden center. Spokespersons representing Home Depot’s interests said that the retailer is willing to consider measures that would minimize traffic congestion.

Vice-mayor Frank Colonna, whose Third District includes this neighborhood, said he is withholding a decision on whether to support the project, noting that the area is zoned for industrial use.

The Inglewood development was to be part of Wal-Mart’s plan to put 40 super centers in California over the next several years. So far, the retailer has had mixed results with voters in the state, who recently rejected its plans for a super center in Oakland, but overturned restrictions to development in Costa Contra and Calexico.

Other cities are mounting their protests against large-format retailers, besides Long Beach, Calif. Last week, the Chicago City Council ignored the wishes of the local alderman and put off consideration of a zoning change that would have allowed Wal-Mart to build its first store in that city, on the site of a former steel plant. Zoning for another store, on the West Side, is being stalled by the objections of a single alderman.

Local residents are not the only ones opposed. Organized labor decries Wal-Mart salary standards, which are considered too low to live on. (So the only place they’ll be able to shop at is Wal-Mart! — Editor)

ADL has already begun supplying its own members, who represent 96 stores and $355 million in retail sales in 2003. Tom Smith, president of AWARD, says ADL is “off and running. It’s been a real success story.”

The move by AWARD to create a greater presence at the show may set a trend, as other groups look for ways to showcase their own preferred suppliers on a regional basis. This will not only highlight the service offerings of various suppliers, but add new depth to trade shows, as they look for ways to evolve themselves in light of the mounting consolidation in the home improvement industry.

PRINCE ALBERT, Sask. — Castle Building Centres Group has signed another new member in Western Canada: M& M Building Supplies Ltd., of Prince Albert, Saskatchewan. Larry Mardell, owner, was previously unaffiliated with a buying group.

BENTONVILLE, Ark. — Wal-Mart Stores Inc. reported net sales in March of $25.13 billion, an increase of 14.0% over same five-week period in the prior year. Sales year to date were up 14.0% to $45.29 billion, from $39.74 billion in the similar period in the prior year. The Wal-Mart division’s sales for March were up 12.3% to $16.72 billion. Sam’s Club sales for March were $3.38 billion, up 9.3%. The International division’s sales were $5.03 billion, up 23.6%.

Home centre and big box chain Kent Building Materials has opened its newest store, this one at 130 South Albion St. in Amherst, N.S. It’s Kent’s seventh store in Nova Scotia, and the 24^th in the chain overall.

DUNCAN, B.C. — International Forest Products (Interfor) has withdrawn from negotiations to buy Doman Industries or any assets of Doman’s subsidiaries. It was all about price. But Doman is now being wooed by another company, Ableco Finance LLC, an entity related to Cerberus Capital Management, in an effort to find an alternate restructuring proposal for Doman’s secured and unsecured indebtedness.

BEIJING, China — Ikea plans to open an additional eight stores in China over the next five years. The Swedish furniture retailer built its first stores there, in Beijing and Shanghai, in the late ’90s. A second Beijing will open next year; a total of 14 Chinese cities have been identified as potential locations. Eight million people are expected to visit Ikea’s Chinese outlets this year.

MISSISSAUGA, Ont. — Wal-Mart Canada has once again fended off attempts by its employees to unionize at one of its stores. The associates in Jonquiere, Que., have rejected being unionized by the United Food and Commercial Workers Union. In June 2003, the union attempted unsuccessfully to organize at a Wal-Mart in Thompson, Man.

Lighting and ceiling fan supplier Canarm Ltd. has purchased the assets of Toronto-based Florida Lighting Group. Florida Lighting supplies decorative and commercial fluorescent lighting fixtures to retail and commercial customers.

Sears, Roebuck and Co. posted a slim 0.1% gain in March same-store sales, reflecting sluggish demand for women’s clothing. However, sales in consumer electronics and lawn and garden products were stronger. Total sales for the five-week period ended April 3 reached $2.37 billion, down 1.3% from a year earlier.

Now Sodisco-Howden is battling with the upstart Groupe BMR and its buying alliance, Quincaillerie Matreco Hardware, so this time around Thornes is maintaining its focus on plumbing and heating, primarily, along with some electrical. And rather than seek to become supplier of choice, it has taken the route of being a fill-in supplier with the buying groups such as AWARD and Castle, and with some of the remaining true independents in the region.

Thornes can afford to take its time. Like home improvement retail chain Kent, which is one of its customers, Thornes is part of the Irving group of companies, a private company that’s owned by one of Canada’s wealthiest families, so the organization’s deep pockets will likely let it move ahead in a cautious way. It does about $5 million with Kent, and some business with buying groups such as AWARD.