New faces at BMR reflect new mandate

LONGEUEIL, Que.—The fallout of last year's drastic consolidation among LBM buying groups included the continuation of Groupe BMR as a stand-alone entity. Now, on the eve of its 40th anniversary, the privately owned buying group and wholesale distributor has a new mandate — and new people on board to help satisfy that mandate. Gabriel Pollender has joined the group as vice-president marketing. Until recently, he was general manager of Perfecta Plywood Ltd, and before that, Executive Vice-president of the Quebec building materials dealers' association, ADMACQ, where he also served as editor of the association's magazine, Quart de Rond magazine. The group, once a hardware distributor for AWARD and TIM-BR MART Ontario, has severed ties with them as they've been rolled into Calgary based TIM-BR MARTS Ltd. That group had historically enjoyed an alliance with BMR within the umbrella buying group Matreco, but TIM-BR MARTS withdrew from that group earlier this year, leaving BMR as Matreco's sole member. Without affiliations in other regions, BMR now wants to expand its own reach beyond francophone Canada. It has more than a dozen members in the Maritimes, and has added a couple of dealer members in Northern Ontario. Pollender will be instrumental in developing and rolling out a new image program to help the group expand its dealer base and increase its wholesale volume. Other management changes include the promotion of Jean St-Maurice to the position of vice-president finance. He was formerly CFO. Jean Falardeau has been named vice-president operations. A 10-year veteran of the company, he served most recently as executive assistant to BMR's president, Yves Gagnon.

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More Canadian Tire buyers join TSC

LONDON, Ont.—A new round of changes has been announced at TSC Stores, the farm and hardware chain with 27 stores throughout Southern Ontario. The new executive team continues to be populated by former Canadian Tire alumni. TSC president and CEO David Roussy, who joined from Canadian Tire earlier this summer, has now lured Darryl Jenkins over from Canadian Tire as director of merchandising. Jenkins was director, store design and concept development for Canadian Tire. He replaces Jim Amsden, who gets promoted to director, store planning. Scott Bennett has also left Canadian Tire, where he was category manager for camping, to join TSC as senior category manager, seasonal categories. Within the next nine to 12 months, Bennett is expected to take over Jenkins' job as director of merchandising, at which time Jenkins will move into the role of vice-president, new business development. The shakeup will result in the departure of two industry veterans: Bill Wilson, who is retiring as TSC's vice-president merchandising, and George Aitcheson, will also retire this week from his position as TSC's senior buyer. TSC attracted attention earlier in the summer when Hardlines broke the news of the removal of Roy Carter, president of TSC, by Birch Hill Partners, a private equity firm that injected cash into the growing chain in return for 75% ownership. Birch Hill ended up ousting Carter (although he remains on the TSC board) and replacing him with Roussy, formerly a vp at Canadian Tire Retail. At that time, Roussy brought Greg Hicks with him from Canadian Tire to serve as his vice-president operations. An internal memo to TSC staff, issued last week and signed by Roussy and Hicks, states: "We feel that these changes will accelerate our growth potential and ensure an integrated approach to the management of this growth."

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Lowe's claims it's gaining on rival

MOORESVILLE, N.C.—Lowe's Cos., the industry's second-largest home improvement retailer, says it has ’Äúcontinued to capture market share’Äù in several categories, including flooring, appliances, outdoor power equipment, cabinets and countertops. Based on its second-quarter results, when earnings increased by 11.4% to $935 million, and sales climbed 12.2% to $13.389 billion, Lowe's continues to outperform its larger rival, Home Depot. Comparisons between the two giants are becoming tougher as Home Depot diversifies its business into professional and commercial sectors. However, Lowe's enjoyed same-store sales of 3.3% for the quarter, compared to Home Depot's negative comp of 0.2%. Lowe's projects that its sales through the remainder of this year would increase 11%, and that its same-store sales would inch up between 2% and 3%. In this six-month period, Lowe's earnings jumped 24.6% to $1.776 billion.  

	Home Depot	Lowe's
Revenue ($bil.)	$26.03	$13.39
Change vs. '05	16.7%	12.3%
Same-store sales	(-0.2%)*	3.3%
Net Income ($mil.)	1,862	935
Change vs. '05	5.3%	11.4%
# of stores	2,079	1,281

  * for retail operations NB: Home Depot's quarter ended 7/30/06; Lowe's ended 8/4/06

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Home Depot trims head-office staff

ATLANTA—In an unprecedented move, Home Depot said that it would reduce staff here by 5.6%. The company is cutting 300 of the 5,400 jobs at its head office. It did not say which positions would be affected, although Bob Nardelli, its chairman and CEO, said in a statement that Depot "needed to reallocate our resources, reduce and in certain cases, eliminate some initiatives" that are currently handled at its headquarters location. Several news reports said that the cutbacks are related to Home Depot's decision to spend $350 million in the second half of this year on upgrading and improvement its stores' appearance and merchandise assortments. The Atlanta Journal-Constitution reported that $85 million of that expenditure is earmarked for added store-level payroll.

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Sears Holdings extends offer to Canadian unit

HOFFMAN ESTATES, Ill.—Sears Holdings Corp, through its wholly-owned subsidiary SHLD Acquisition Corp., has extended its offer for all the common shares of Sears Canada Inc. that are not already owned by Sears Holdings. That deadline is now 5 p.m. on Sept. 29, 2006. A formal notice of the extension of the offer was mailed to Sears Canada shareholders on Aug. 30. On Sept.18, the Ontario Divisional Court will hear argument on the appeal by Sears Holdings and SHLD Acquisition Corp. As a result of the order, SHLD is prohibited from taking up and paying for common shares deposited under the offer unless the conditions specified in the order are complied with or the order is set aside. The offer has been extended, and may be further extended, to preserve Sears Holdings' rights under the offer pending the outcome of the appellate process.

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Majority vote will now elect Home Depot directors

ATLANTA—Home Depot will alter the way it elects members of its board of directors. In an effort to quell mounting investor discontent, the industry's largest home improvement dealer said last week that directors will now require a majority vote from shareholders. This new policy, which will go into effect in May 2007, was supported by 56% of the vote represented at Home Depot's last annual shareholders' meeting in May. At that meeting, Home Depot's chairman and CEO, Bob Nardelli, set off a firestorm of criticism for refusing either to take questions from investors in the audience or to allow directors on stage to answer any questions. In addition, the company has confirmed that the U.S. Securities and Exchange Commission has been investigating whether Home Depot's method of issuing stock options for the years 1996 to 2000 to its executives was inappropriate. The New York Times reported that Home Depot officials met with representatives from the AFL-CIO, an institutional investor, which called on the company to recoup any stock options that were found to be improperly granted. The labor union is also calling on the giant retailer to force the resignation of its co-founder, Ken Langone, who has been embroiled in controversy over his role in approving what some critics consider to be exorbitant compensation to Nardelli and other company executives. These controversies have had their toll on Home Depot's stock, which has taken several hits in recent weeks.

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Home Depot launches co-branded credit cards

ATLANTA—Home Depot has introduced its first co-branded consumer and business rewards credit cards, in partnership with Citi Cards. The two cards, The Home Depot Rewards MasterCard and The Home Depot Business Rewards MasterCard, offer special incentives and rewards including 2,500 bonus points with their first purchase and two points on every dollar spent at either Home Depot or EXPO Design Center. Users can also receive one point for every dollar spent on purchases elsewhere besides Home Depot. That includes millions of locations worldwide where MasterCard is accepted. Customers can choose from a range of reward options, including everything from gift cards to travel and merchandise.

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