vol. viii, #34 September 16, 2002

* Globalized market, strategies for independents, fair play themes of Conference * Kingfisher considers fate of Réno-Dépôt * CRHA names new board * Housing prices continue to rise * Canadian Tire takes over three Esso stations

"I have never been hurt by anything I didn't say." - Calvin Coolidge (1872-1933)
This issue begins a two-part report on the Hardlines Conference Series. The global retail environment has arrived, and it poses a serious threat to the independent. That emerged as one of the major themes of the Hardlines Annual Retail Strategies and Marketing Conference, held in Toronto this week. Conference speakers suggested that the challenge for independent dealers, and their vendors, will be to adopt sophisticated marketing, technology, pricing and supply systems which the big box and discount chains continue to refine and polish. (Next week: Conference report part 2 - Leonard Lee, Home Outfitters, Albert Plant, certified wood, Taiga Forest Products and more!)

My thanks to everyone who attended! And a special thanks to our Conference sponsors!

Platinum sponsors: Brandid, CHEP Canada, Cologne International Trade Shows, Home Depot Canada, JDA, RBC Royal Bank, Sterling Commerce. Gold sponsors: canadianretail.com, Natural Resources Canada, Temple Scott Associates, and Wolf Gugler & Associates. Retail Strategies Symposium platinum sponsors: ACNielsen Canada, Canadian Hardware and Building Materials Show. International Business Seminar platinum sponsor: Practical World International Hardware Fair/DIY'TEC.
Mississauga, ON - Independent hardware retailers can only survive the next few decades if they begin treating North America as one borderless market. That was the argument delivered by Paul Ingevaldson, vice-president international of Ace Hardware Corp., at the Hardlines Marketing Conference in Toronto this week. Ingevaldson would not reveal his plans for Ace's future in Canada, calling those plans "strategic," but did give some important clues. This country, he said, is an important part of Ace's strategy, integral to a North American approach to providing independents with tools to ensure their viability competing alongside big boxes and discount retailers. Within these larger trading zones, independents must begin to think more like retailers and adapt quickly to changing consumer needs and trends. That may be the biggest challenge facing owner-operators, who are often reluctant to give up their autonomy and commit to a business model that abdicates many business decisions to a more centralized body. But Ingevaldson insists the old model of the independent dealer is no longer workable, and says independent dealers who don't adapt will be crushed by the next generation of smaller formats that are the inevitable next step for the big boxes. To support the fundamental change that's required, Ace Hardware continues to roll out its Vision 21 program. It calls for dealers to sign contracts agreeing to use programs that will establish centralized IT systems, bring accounting and inventory onto a central site, increase emphasis on the effective use of retail data, and develop consistent category management, more appropriate pricing and enhanced customer service. Dealers are also expected to agree to future programs not yet even developed. The challenge, says Ingevaldson, will be to get independent dealers to focus on retail. But the ability to do so, and to give customers what they want, will become increasingly important as consolidation occurs in the sector.
Mississauga, ON - Global sourcing means more than just another factory in Taiwan, said the kick-off speaker at last week's Hardlines Marketing Conference. While increased consolidation will contribute to an unfavourable climate for smaller organizations, there are still opportunities for those willing to focus on bringing innovative products to the marketplace, says Greg Thomas, executive director of Alliance International LLC. Even though big box retailers and chains may enjoy the efficiencies that come with consolidation, the result is often reduced consumer choice and less innovation. This is where the independents can fit in. The absence of key vendors from international buying shows makes the shows an excellent arena for smaller players, says Thomas. His organization, for example, is currently looking around the globe - including Europe and Asia - for fresh, interesting products and ideas that will appeal to consumers. That also means staying committed to selected trade shows. The fact that large vendors have disappeared from these shows means other vendors have a better chance of connecting with new buyers. According to Thomas, those who want to play in the global field need to do three things. They must know and understand prospective customers, understand the differences between the Canadian and U.S. marketplace and understand the competition and what it takes to beat them. They must also understand their own organizations. Too often, said Thomas, his own buyers end up making introductions among sales people from Canada and the U.S. who meet for the first time at an Alliance buying meeting.
Canadian Tire 33.15 18.50 32.60
Canfor 11.70 8.08 8.66
Emco 12.77 3.71 11.63
Goodfellow 13.99 8.00 12.30
Home Depot 52.60 26.10 33.45
Hudson's Bay 16.65 6.45 8.18
Lowe's Cos. 49.99 24.99 44.97
Sears Canada 25.10 12.50 18.00
Sodisco-Howden 2.20 0.75 1.65
Taiga Forest 7.00 3.75 6.25
West Fraser 44.42 26.14 33.50
Rona Inc. has moved quickly to go public. Last week it filed a preliminary prospectus with regulators. Part of the proceeds from the share offering will be used to pay off about $45 million of debt from its $220 million acquisition of Revy Home Centres Inc. in June 2001. Some of the money might be used for further acquisitions (Hmmm, see below-Michael). Réno-Dépôt may be at the mercy of Castorama's new strategy. Now 100% owned by U.K. retailer Kingfisher, Castorama will consider pulling out of markets in which it's not the number-one player, says a report in NHCN. This includes Canada, as well as operations in Belgium, Brazil and Turkey. Canadian Tire Petroleum is looking for existing gasoline retailers to convert to the Canadian Tire banner. In a pilot program with Imperial Oil, CTC will convert three Esso stations to the Canadian Tire Petroleum banner. CTC will operate these sites, while Imperial Oil will continue to supply them. The three pilot sites are in Trois Rivières, Baie-Comeau and Sept-Iles, QC. CTC is also in discussions with other gasoline retailers. This re-branding strategy is part of a five-year plan to grow the number of gas stations in markets where Canadian Tire stores exist. This will be done through both new sites and conversion of existing dealers. They're not alone: Wal-Mart Canada opened its first gas bar in Dryden, ON in July. The North West Company Fund reported second quarter consolidated revenues of $186.6 million, up 7.7% from 2001. Same-store sales were up 3.5%. Second-quarter earnings reached $9.1 million, up 28.9%.
Charlie Harte has joined Thomas Lighting Canada as manager, consumer products. He was formerly with Ipex Homerite. (905-294-9570) Jean-François Lachance has been promoted to the position of vice-president sales and marketing at Royal International Corp. He was most recently director of marketing at Royal. Prior to that, he was a hardware buyer at Rona Inc. (1-800-465-4566) The Canadian Retail Hardware Association has appointed a new board of directors for the year ahead. Bill Towndrow has been named chairman. He is owner of Lunenburg Pro Hardware, Lunenburg, NS … The CRHA has named some new people to its board: Brigitte Michel-Finlay is newly elected. She is manager and owner of A&J Home Hardware, Sudbury, ON … Christine Hand is also new. She is owner of Handyman Home Hardware, Manuels, NF, which received the 2001 Walter J. Hachborn award for "Store of the Year" … Don L'Heureux is the third new member. He is owner of Guelph True Value Hardware Just Ask Rental, Guelph, ON. (905-821-3470) Timothy Farrell has been appointed executive vice-president and COO of the American Hardware Manufacturers Association. He has been with the AHMA since 1993, when he started as assistant manager, events/expositions. Most recently, he held the position of vice-president, domestic-international operations. (847-605-1025)
The New Housing Price Index rose 0.2% in July from June. However, this index of contractors' selling prices was up 4.0% from July 2001. Increases were fairly sharp for the first half of the year, moderating somewhat in June and July. Nine of the 21 urban centres surveyed had monthly increases. The largest was in Regina (+1.3%), while the Victoria market was down 0.1%. Toronto was up 0.3%. The value of building permits increased 3.0% to $4.0 billion in July. Residential intentions reached $2.4 billion in July, up 6.2% from June, due entirely to multi-family permits. Single-family construction intentions retreated for a third consecutive month. In July, 18,250 new dwellings units were authorized. Year over year, the residential sector recorded a 34.2% gain, whereas the non-residential sector was down 7.9% from the same period in 2001.
Keep track of the top players in home improvement retailing in Canada with the Hardlines Who's Who Directory. Now available both in hard copy AND on the web for you to download. CLICK HERE to find out more!
****HARDLINES MARKETPLACE**** Check out Hardlines Classifieds on the web: https://hardlines.ca/html/classifieds_new.asp HELP WANTED PRODUCT MANAGER Are you a Merchant at heart? Due to their growing list of successes with Customers on both sides of the border, our Client, a long-established, yet entrepreneurial manufacturer needs to add a marketing performer to assist in continuing their transformation to a market and category driven leader. You’ll be responsible for sourcing, developing and bringing to market a continuous stream of new products to complement over 2000 current skus. This involves true category management including sku reviews, packaging and merchandising, ad agency liaison, and new product development involving travel to the company’s offshore manufacturing facilities. Achieving market penetration, profitability targets and classic consumer products product management are your goals in this excellent career opportunity. You can demonstrate successes in new product development, speed-to-market turnaround and the ability to transform concepts into reality. You may be a Retailing Merchant looking to move “to the other side”, or currently be a consumer products Product Management wizard. Montreal-based; relocation assistance will be provided if required. Please contact Wolf Gugler in complete confidence, quoting file number C-14. Wolf Gugler & Associates Limited, 1370 Don Mills Road, Suite 300, Don Mills, Ontario M3B 3N7 Phone: (416) 386-1719. Email: resumes@wolfgugler.com Web site: www.wolfgugler.com ************************************************************************************ STORE MANAGER The company; a well-established and respected Northern Ontario home improvement retailer. Largest lumberyard for many miles around, new signage, etc. A very visible and well-respected community citizen with strong Retail and Contractor businesses. The Manager is responsible for maximizing sales and ensuring the effective operation of all store activities including Operations, Customer Service, Marketing, Merchandising and Human Resources. The Manager further provides leadership and management expertise to Employees and serves to project the company's philosophy and image through excellent customer service. You must have proven leadership abilities including outstanding interpersonal and communication skills, a firm commitment to customer service and experience in an LBM store environment. Bilingual abilities are an added asset. Here's a great opportunity to demonstrate your talents in a community of >50,000 where outdoor enthusiasts abound. Please contact, in confidence, Wolf Gugler, quoting file C-16. Wolf Gugler & Associates Limited, 1370 Don Mills Road, Suite 300, Don Mills, Ontario M3B 3N7 Phone: (416) 386-1719 Email: resumes@wolfgugler.com Web site: www.wolfgugler.com ************************************************************************************ AGENTS WANTED Polar Distribution is rapidly growing and we are looking for agents throughout Canada for retail, wholesale, OEM and contractor. Please visit our website at www.polardistribution.com . If interested please forward your current lines in strictest confidence to dynamics@home.com ************************************************************************************   SERVICES OFFERED WIN AT DIVERSIFIED STRATEGIC GROWTH IN THE UNITED STATES Are you a Canadian building product or home improvement product manufacturer? Are you already selling in the United States or are planning to but need more horsepower to get to the next level? Based on 23 years experience in Big Box Retail, Wholesale Distribution, OEM, New Home Builder and Renovation Contractor channels, Del Ray Company has knowledge of winning strategies in the U.S. marketplace. Del Ray Company specializes in turnkey game plans to determine how to diversify risk by diversifying your channels of distribution in the United States. Find out how a multi-channel strategy in the United States can be a formula for success. Contact: Dave Murray, Del Ray Company; dtm2002@sympatico.ca; Tel. 416-277-5925; Fax. 905-820-1053. Strategic Expertise For Canadian Manufacturers. *********************************************************************************** NORAL INSTORE: Don’t leave your products’ display management to chance! Let Noral Instore take care of your instore merchandising. Visit http://www.noralmarketing.com or call Al Vanderveen at 519-439-6800 ext. 201 ********************************************************************************** SELL YOUR COMPANY - OR BUY ONE - WITH HARDLINES CLASSIFIEDS! DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE. ONLY $18 PER LINE FOR THREE WEEKS! TO PLACE YOUR AD, CALL US AT 416-489-3396 OR EMAIL: bev@hardlines.ca
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