John Caulfield, Contributing Editor
vol. xi, #34, September 12, 2005

IN THIS 10TH BIRTHDAY ISSUE: • Home Depot joins forces with Mike Holmes • Katrina’s devastation will take years to repair • ILDC member adds store • Big boxes show appliance gains • Sears CEO gets ousted • Home Depot opens first smaller store in Ontario • Wal-Mart ads like Target? * * * * * *

“What a long, strange trip it’s been.” —The Grateful Dead (American rock band, from “Truckin’ ”)
TORONTO – Home Depot Canada is the latest major Canadian retailer to ally itself with a television personality. But rather than promoting the store through a particular category or celebrity product line, the deal with Mike Holmes, host of HGTV Canada's Holmes on Homes, will serve to promote Home Depot’s Installation Services business.Under a contract that will last for three years, Holmes will work closely with the company’s team of project coordinator and service providers to educate Canadians about how to pick the right contractor. Further, Holmes will help promote the availability of such contractors through Home Depot’s own Installation Services. Holmes will work closely with Mike Clements, director of Installation Services for Home Depot Canada. “Mike is a great fit because he bridges the gap between the do-it-yourselfer and the do-it-for-me consumer," says Clements. “We want Mike on board because he understands contractors and consumers and can help raise awareness that The Home Depot, like Mike, does it right the first time.” Home Depot has a network of 3,000 installers across Canada. According to Clements, they perform 5,000 installed projects per week. How Holmes’s role will be parlayed into consumer awareness has not been clarified entirely yet, but his presence is considered a strong one for fortifying Home Depot’s position as not just a traditional purveryor of home improvement products, but the source for installing those products, as well. While he’ll work primarily with the Installation Services team, he’s also being used to provide input on product assortments for the company’s merchandising departments, and on how the retailer can better serve the contractor in general. He’ll even offer input on staff training. In additon, he’ll appear in advertising, website and other future endeavours. “He’s going to help us run our business,” says Home Depot Canada president Annette Verschuren. “We want to get better. We want to improve everything we touch.”
WASHINGTON — The number of homes destroyed by Hurricane Katrina will, in all probability, dwarf losses from any other disaster in the United States. It is expected to place considerable strain on the supply and pricing of building materials, as well as labor. But don’t expect home replacements to come any time soon, as efforts will focus initially on repairing whatever dwellings can be fixed. That’s the early assessment of the storm’s impact by economists of the National Association of Home Builders, who used the damage wrought by past storms as their measuring stick. Hurricanes that hit the southeastern U.S. in 1992 and in 2004 destroyed between 27,000 and 28,000 homes each. However, “the number of homes with major but reparable damage was more than twice the number destroyed,” states NAHB. On the other hand, Katrina caused massive flooding in Louisiana, Alabama and Mississippi that “is likely to translate into much larger numbers of homes destroyed” or permanently uninhabitable. The trade group estimates that as many as 200,000 homes in New Orleans alone might have suffered this fate. Consequently, emergency repair will take precedence over rebuilding, and commodities like roofing and plywood that would normally be earmarked for reconstruction activities will go first to repair work. On the other hand, “demand for other materials, such as concrete, is likely to decline initially, as planned projects are cancelled or delayed during the initial recovery period.” Besides, the trade group noted, history indicates that the demand for new homes in a market that has been devastated does not necessarily lead to an immediate surge in construction. “Replacing units destroyed by the storm will not begin for many months and will take place slowly, over a number of years. ” NAHB points out that the storm damaged and shut down several lumber mills, and disrupted imports of building materials. (The New Orleans and Mobile customs districts reported about 12% of national cement imports in 2004.) That invariably will impact supply down the road. The combination of greater (partly speculative) demand and disrupted supply produced a spike in lumber and panel prices in the final days of August 2005. With production already running at full capacity for wood panels, further increases for those products, as well as for roofing, are likely.
OSHAWA, Ont. – Millwork, a longstanding member of the buying group Independent Lumber Dealers Cooperative, has opened a third store, about two hours east of its flagship located here. The new store was erected in Peterborough, Ont, and opened last month. This is not Millwork’s first foray into Peterborough. In fact, it already has a contractor facility in town, but decided to add the retail facility, locating it just down the road. “We’ve already been doing a great contractor business there for a couple of years,” says Sue Lupton, vice-president of the family owned operation, which had estimated sales in 2004 of $47 million. The new store is 15,000 sq.ft. in size, which includes 5,000 square feet of retail space.
CHICAGO — On the same day that it reported a lackluster quarterly financial performance, Sears Holdings disclosed that it has replaced its CEO, Alan Lacy, with Alywin Lewis, who had been CEO of Kmart before the two retail giants merged.Lewis will have responsibility for the operations of the company’s 3,900 stores, as well as home services, finance, legal, supply chain, information technology and human resources. As important, however, was the decision by Sears Holdings’ chairman, Edward Lampert, to take over the corporation’s marketing, merchandising, design and Internet business. Lacy had been running Sears since 2000. He will continue as vice-chairman and remain on the company’s board. In the three months that ended July 30, Sears reported earnings of US$161 million, or 4.5% above the same period a year ago. That figure included a US$42 million restructuring charge. Sears stated that its quarterly revenue from the combined companies was US$13.19 billion, down 2% from the same period in 2004. Sears’ stores sales declined 3%, and its same-store sales were off 7.4%. Same-store sales for Kmart’s stores inched downward by 0.3%.
ATLANTA – The home improvement big boxes are selling more appliances, at the expense of traditional department stores, according to the latest statistics from Stevenson Co. Lowe’s saw its unit share of the heavy appliance market swell to 16.1% in the second quarter, from 14.5% during the same period a year earlier, while Home Depot’s market share reached 9.2%, up from 8%.Those companies have been expanding their offerings in white goods, with a shift to more up-market brands. Home Depot recently added the LG Electronics line; Lowe’s will add products by Samsung later this year. Lowe’s is the number-two appliance seller in the U.S., followed by Home Depot. Sears, while remaining in the number-one spot, has seen its market share fall from 36.9% a year ago to 33.1%. Best Buy is also feeling the heat from the home improvement big boxes. Its share slid from 7% a year ago to 6.3% in the second quarter.
ATLANTA — Home Depot has agreed to be one of six presenting sponsors of the Georgia Aquarium, which has been developed and paid for by Home Depot’s founder, Bernie Marcus. The other presenting sponsors of the 550,000-square-foot aquarium, which will open officially on Nov. 23, are Geogia-Pacific, AirTran Airways, BellSouth Corp., Southern Co. and SunTrust Banks. Another locally based corporation, The Coca-Cola Co., donated nine acres in downtown Atlanta to initiate the project, whose costs are now projected to exceed its original US$200 million budget.The sponsors have been brought in to defray some of the construction expense, which Marcus had pretty much been footing out of his own personal fortune. Each will sponsor an exhibit within the aquarium that, when completed, will hold eight million gallons of water and 100,000 fish. In essence, by calling on corporate sponsors for help, Marcus is taking a page out of Home Depot’s playbook. When he started the warehouse retailer, Depot highlighted the fact that it carried nationally branded merchandise, much of which provided inventory to the dealer’s first stores at terms that, at the time, were unheard of in their flexibility and leniency.
Monday, September 12 & Tuesday, September 13 finds the entire crew from World HQ at the Hilton Suites Hotel, 8500 Warden Road, Markham, at our 10th Anniversary Conference and Gala Dinner with the Outstanding Retailer Awards. We'll report on the excitement next week for those few of you who can't make it. Meanwhile, you can reach us at 416-708-4589.
TORONTO – Home Depot Canada opens two stores in Ontario this week, including its first small-size store in that province. Tomorrow, a full-size outlet opens in Windsor, while in Chatham, a 60,000-square-foot store has its grand opening on Sept. 15. The store will be similar to another 60,000-square-foot location in Spruce Grove, Alta., complete with a drive-through lumber yard.BARRIE, Ont. – RONA Inc. broke ground last Friday on a new big box store in this city, which lies about an hour north of Toronto. On hand for the ceremony were Pierre Dandoy, executive vice-president big box stores, and James Jones, vice-president big box stores Ontario. The 110,000-square-foot store, which includes a 23,000-square-foot exterior garden centre and 4,000-square-foot greenhouse, will house more than 40,000 SKUs. A RONA Cashway store in town will remain open. The store will continue to serve customers including do-it-yourselfers and contractors, now and after the opening of the new RONA Home and Garden Barrie store. BOLTON, Ont. – The TORBSA Buying Group has recruited a new member to its roster of contractor-oriented dealers. Brampar Building Supplies Ltd., Brampton, Ont., becomes the 29th member. ST-ANTONIN, Que. – Bargain Building Materials will celebrate the grand opening of its first store in Atlantic Canada on Sept. 14. The store, Select Retail Store Ltd. in Dieppe, N.B., has joined under Bargain’s “authorized dealer” program, whereby existing independents can sign on to operate as Bargain Building Materials outlets. Another Maritime dealer has joined as well in Jacksonville, near Fredericton. TORONTO – Following its acquisition of Lagostina, the Italian producer of stainless steel cookware, by Groupe SEB, Coranco Corp. will remain the exclusive distributor of the Lagostina brand in Canada. Independently, its subsidiary Groupe SEB Canada Inc., will continue to provide the distribution and services of all other international brands of Groupe SEB, including All-Clad, Krups, Moulinex, Rowenta and T-fal to its Canadian customers. Groupe SEB is in over 120 countries and employs 14,500 people in 49 countries.
At Milwaukee Electric Tool Canada, John Mann has joined as national sales manager. He ws formerly at Paslode Canada, where, over a 19-year period, he was instrumental in developing sales of power nailing products within the retail channel. He will oversee all aspects of sales and distribution in Canada … Also at Milwaukee, Andrew Halstead has been named marketing service manager for Canada. He was most recently with Makita Canada. He will be responsible for marketing and advertising across Canada. (416-439-4181)Daniel Cayer has been named national sales manager at SFA Saniflo Inc. Canada, a maker of macerating toilet systems for residential and commercial applications. Cayer joins Saniflo from Bahco Tools, Inc. (formerly Sandvik Saws & Tools) … Cindy Campbell joins as Ontario sales manager. With more than 10 years experience, she joins Saniflo from Purolator. (800-363-5874) Brad Dixon has joined King Marketing as B.C. sales manager. He brings more than 15 years of home improvement and other related experience to his new post, having worked most recently at IRLY Distributors Ltd. as dealer development manager. Brad’s responsibilities include the expansion and development of business in B.C. for the manufacturers represented by King Marketing. King Marketing services the big box stores with a team of service representatives and sells to the major regional accounts. (604-271-3455)
Housing starts dropped to 201,000 units in August, down from 242,600 units in July, according to CMHC, defying analysts who forecast 230,000 starts. August housing starts in Canada’s urban centres fell 19.6% to a seasonally adjusted annual rate of 170,300 units. Urban single detached starts decreased 4.7% to 85,400 in August, while urban multiples decreased 30.6% to 84,900.

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HELP WANTED The How-To People are looking for the 10 best Recruiters in Canada.     The greatest story in the Canadian hardware business today is still being written...and the most exciting chapters are yet to come. If you feel you have what it takes to play a role in the implementation of RONA's strategic development plans in recruiting and building relationships with new dealers from coast to coast, we want to hear from you. Now. Especially if you have experience in the hardware, building materials and home improvement industry, the ability to interpret financial statements and present budgets, and strong communications skills, planning and organizational skills. If you can see yourself succeeding as one of 10 new RONA Development Managers, please send your résumé without delay...and in total . If selected for an interview, we'll reply with a detailed job description and contact you in regards to this step forward in your career. (09.12_09.26) ********************************************************************************** PPG Canada Inc., a global leader in the production and technology of coatings and related products, has an immediate opening for a MARKETING CO-ORDINATOR This is an exciting opportunity for an energetic individual with a strong work ethic to become a part of our Architectural Coatings Group. You will be responsible for managing a variety of projects in a fast paced, deadline driven, project based environment. You will interpret, adapt and communicate corporate marketing initiatives to ensure optimal benefit to the Canadian dealer and sales operation as well as identify market trends and develop implementation programs and strategies to ensure market penetration and increased profits for the Canadian Architectural Coatings product offerings.   You will possess a Business degree, preferably majoring in Marketing with 2 – 4 years of related experience with familiarity in the paint, design or home improvement industry. We are looking for a goal-oriented candidate who possesses excellent written and verbal communication skills, is extremely organized with a positive mental attitude and possesses outstanding organizational and time management and computer software application skills. Fluency in the French language would be desirable but not mandatory. All interested qualified candidates, should E-Mail their resume to or fax their resume to (905) 855-6642 (08.29_09.12)  

********************************************************************************** Xtreem Sales is a well established sales agency in the hardware industry. Rapid growth is creating a need for expansion outside of Ontario. We are looking for successful and motivated agencies in the hardware and grocery industries to sell existing product lines.

Confidential inquiries to John Frizzell at (519) 762-9966 or (09.12_09.26)  



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