HARDLINES™ Five years serving Canada's home improvement industry September 18, 2000 - Volume vi, #35 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * IN THIS ISSUE: * Family values, social conscience, big themes at Hardlines Conference * Building Box partners with HSC for installed sales * Home Depot president: expect EXPO here soon * LBMAO partners with U.S. lumbermen's association * Building permits remain flat in July * * * * * *   CONFERENCE 2000: WHAT A TIME WE HAD! This year's Hardlines Marketing Conference was fabulous - with almost 200 people there! We'll continue our report on the conference in the next issue. My thanks to our sponsors: Black Eagle Consulting Cologne International Trade Shows Hardware Merchandising/Canadian Contractor JDA Intactix LBMX Online Direct Power Packaging RONA Inc. Sterling Commerce Union Gas The Watt Group Wolf Gugler & Associates * * * * * * HARDLINES WHO'S WHO 2000-2001 EDITION: Guide to Canada's leading hardware and home improvement retailers, wholesalers, buying groups, mass merchants and co-ops, with more than 100 listings featuring buyers etc. Order online or call us at 416-489-3396.  
HARDLINES CONFERENCE: REINVENTING RETAIL   Emerging retail trends and the importance of articulating a defining business vision were the focus of the 5th annual Hardlines Marketing Conference, held last week in Toronto. Featuring Annette Vershuren and Eric Petersen of Home Depot Canada, as keynote speakers, the one-day symposium drew more than 200 retailers and vendors from the North American hardware and home improvement industry. Here are some highlights … CUSTOMER ANALYSIS: Retail analyst Sid Doolittle, of McMillan/Doolittle in Chicago, described how three main consumer groups - mature, boomers and Generation Xers, influence the current retail scene. An aging population and shifts in the traditional family structure will affect the types of products and services available and the environments in which they're purchased. Income levels will continue to affect spending habits. The fact that the income of the top 20% of U.S. wage earners has increased significantly while the other 80% has been flat over the last 25 years accounts for the growth of stores like Wal-Mart and Costco, where prices drives everything, and of high-end niche "logo" markets. Ethnic populations will see big growth. These demographic shifts will affect all sectors of the retail market. And because the new generation of consumers will be tech savvy, they represent enormous potential for on-line shopping. Doolittle sorts successful retailers into "EST" categories; Cheap-est (Wal-Mart, Costco), Hot-est (Gap, Starbucks), Big-est (Home Depot), Easy-est (Nordstrom, Land's End), and Quick-est (McDonald's, Walgreen's). He also suggested that retailers must pay more attention to making the consumer's shopping experience convenient and efficient. Some retailers, he said, have sacrificed the consumer's convenience for their own. Customer convenience and "no-barrier" shopping will be the buzzwords of the coming decade, Doolittle predicts. Internet retailing, he says, is still an unproven financial model, and will depend on how issues of consumer trust and distribution logistics play out. There's still speculation about the degree to which on-line shopping will encourage impulse sales.   FAMILY VALUES: Don Neufeld doesn't open his stores on Sundays. In fact, the Saskatoon retailer publicizes this fact in all the advertising for the two-store chain, J&H Builder's Warehouse. It started when news got out that Home Depot would open stores in Saskatoon. After researching other retailers on the Internet, Neufeld chose a slogan that would position his stores against the new competition: "Closed on Sundays - we spend our Sundays building family values." Other business leaders balked at the idea, but not only has it paid off, community and church groups quickly applauded the move. Customers line up to proclaim their loyalty to a company that puts family - and the health of the community - ahead of profits. Closing on Sundays is just one of many ways Neufeld has strived to create a humane, supportive work environment. For example, employees are given one week paid leave each year to work with the charity of their choice. It increases their sense of commitment to the community and allows them to grow as individuals which, he says, makes for a better employee.   COMPETITIVE INTELLIGENCE: Though short on cloak and dagger, the breakout session on competitive intelligence was packed with suggestions for using information as the foundation for long-range planning and short-term, competitive strategies. Playing to a packed room, David Lithwick of Market Alert explained how to dig up information from the public domain and how to follow ethical guidelines when conducting those searches. Rather than hiring an expert to do competitive intelligence, Lithwick encourages executives to look within their organization for existing sources of information, including professional associations, newsletters, websites, libraries and government departments. Gathering information, says Mr. Lithwick, is relatively easy. Deciding which information to use and how to apply it is a more challenging task. He suggests creating a simple template to define your business objectives and determine the information that's critical to those goals. NEXT WEEK: ANNETTE VERSCHUREN, HOME DEPOT, AOV CANADA, GARDENING WITH HEART, POWER PACKED BRANDING AND MORE!  
BUILDING BOX TO OUTSOURCE INSTALLED SALES   The Building Box has formed a partnership with Home Service Club to offer installed sales in its stores. Each of the new stores will be outfitted with service counter offering "HSC Installed Sales." The counters will be right at the front of the store, beside the customer service and returns desks. Banners and POP throughout the store will remind customers of the installed option. Building Box customers will get three quotes on each job, and they will have access to Homeservice Club's 24 hour emergency service. HSC already works with some 300 trades throughout the GTA, but to service other regions, the company is will have contractor recruitment events. The first will be this Thursday in Cambridge, ON. Paul Crocker, formerly executive director of I.L.D.C., has been hired to coordinate contractor recruitment. The first three Building Box stores are slated to open late November in Cambridge, Scarborough and Brampton, ON. A site in Mississauga at Highway 401 and Winston Churchill Rd. is scheduled to open by mid-March 2001. * * * * * * ALLIANCE INTERNATIONAL ADDS FRENCH ITM AS A MEMBER Alliance International LLC (Home Hardware, RONA and Do-it Best Corp.) has added a new member: Bricomarché, the French co-op of building centres that is a division of ITM. ITM in turn owns one-sixth of RONA. The first category under review is alkaline batteries, which have the same manufacturing standards in Europe and North America. Members have further agreed to develop a business-to-business (B2B) e-commerce website. It will be used to improve communications and reduce costs of transactions between members and their suppliers, says Greg Thomas, executive director of the Alliance. The system will enable members to place orders either from their respective warehouses or directly from the vendor. The Alliance is also attempting to increase its collective leverage with its suppliers, so those whose contracts come due this year will find the bar raised as the Alliance seeks to obtain better pricing and service levels.  
COMPANIES IN THE NEWS   Home Depot Canada will accelerate the entry of new formats into this country. EXPO and Villager's Hardware were originally expected to arrive here within two or three years. But speaking at our conference last week, Home Depot Canada president Annette Verschuren said the large-size EXPO Design Centres "will be in Toronto very soon." Sexton Group Ltd. has added the following new members: T.C. Building Materials, Winnipeg; T.T.'s True Value Hardware, Leaf Rapids, MB; Watson Paint Centre, Port Alberni, BC; Double Diamond Enterprises, Milden, SK; Crofton Hardware, Crofton, BC; Lumber One & Hardware Too, Carstairs, AB; B.H.L. Building Supplies, Sylvan Lake, AB; Rosthern Valley Lumber, Rosthern, SK. The Lumber and Building Materials Association of Ontario (LBMAO) has formed a strategic alliance with the National Lumber and Building Material Dealers Association, which is headquartered in Texas. The purpose of the alliance is create some synergies between the two organizations, especially in the areas of future support of e-commerce initiatives, cross promotions and access to member benefits. The arrangement will not affect the LBMAO's association with CHS.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 37.35 18.40 20.40
Canfor 19.80 10.35 10.30
Goodfellow 12.55 8.75 9.60
Home Depot 70.00 39.37 54 1/4
Hudsons Bay 21.65 12.50 15.80
Lowe's Cos. 67.25 40.37 43 3/16
Sears Canada 42.50 30.75 32.40
Taiga Forest 14.20 6.80 8.75
West Fraser 39.50 27.00 28.60
    "Be not afraid." - Matthew, xiv:27
PEOPLE ON THE MOVE   Mary Agar has been promoted within the sales and marketing department at Plastmo Ltd. to the position of sales Manager, Canada (vinyl rain gutters). (905-793-9462) At Camco Inc., Neil G. Gartshore has been appointed CFO and vice-president finance, effectively immediately. Most recently, he was Camco's general manager, builder sales. He succeeds M. James Evans, who was promoted to senior vice-president, e-business, earlier this year. (905-521-3128) Jack Kurilla has taken over at Moulinex Canada as general manager. Formerly in charge of international accounts, he replaces Eric Roberts. (905-669-0114)  
NOTED...   "In the past, big retailers didn't go into appliance sales because customers expected the large products to be delivered and installed. This was a major expenditure in equipment and manpower. But first Home Depot, and now Wal-Mart, are selling majors without in-house delivery services." - Rob Philips, a spokesperson for Wal-Mart in the U.S., on that company's entry into white goods sales.  
MARKET INDICATORS   Housing starts in Canada fell 11.8% to 146,000 units seasonally adjusted in August, compared with 165,600 in July, according to CMHC. Urban singles starts were down 4.7% to 72,700 units, compared with 76,300 in July. Urban multiples starts were down 23.4% to 52,300 units in August, compared with 68,300 in July. In Québec, urban starts were up 8.9% to 23,300 units, from 21,400 in July. Singles were up 31.3% while multiples were down 9.3%. Montréal starts increased 16.4% from July, to 15,600 units. The Prairies were flat (very funny - Editor) with 23,600 urban starts in August, the same as July. This was mainly due to a 21.9% increase in multiples, partially offset by a 10.4% decrease in singles. In the Atlantic region, urban starts were down 4.1% to 7,100 units. Nova Scotia and Prince Edward Island were up; New Brunswick and Newfoundland decreased. British Columbia had 8,900 urban starts last month, down 21.2%. Singles were down 4.9% and multiples were down 40.4%. Vancouver starts were down 10.9% to 5,700. In Ontario, urban starts were down 23.1% to 62,100 units in August. The decrease was due to a 36.5% down in multiples and a 9.0% down in singles. Toronto starts were down 35.3% from July to 36,100 units.  
WHY HARDLINES SUPPORTS THE WOMEN'S CONSUMER PRODUCTS NETWORK   Given the growing number of women in this industry, we are delighted there is finally a forum for them to meet and exchange ideas and insights. Anyone in hardware/housewares/packaged goods or related industries would benefit from checking out this organization. September 21: "Fully Alive From 9 to 5!" Featuring author Louise LeBrun. Details coming soon. Meanwhile, check out her website at: www.partnersinrenewal.com For more information, please call: (905) 212-3826; fax: (905) 274-7646; email:wcpn99@yahoo.com, website:www.wcpncanada.org (Hardlines is proud to be a sponsor of the WCPN)  
Hardlines Marketplace   Got new products? Looking for new staff or lines? Hardlines Marketplace is read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2000 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST = $212.75) per year (GST #13987 0398 RT). (Please make cheque payable to McLarneyCom.)  
  HARDLINES™ Five years serving Canada's home improvement industry September 18, 2000 - Volume vi, #35 Michael McLarney, Editor & Publisher Ph: 416-489-3396 Fx: 416-489-6154 E-mail: buzz@hardlinesfax.com  
Check out our incredible Classifieds section!
* * * * * * * IN THIS ISSUE: * Family values, social conscience, big themes at Hardlines Conference * Building Box partners with HSC for installed sales * Home Depot president: expect EXPO here soon * LBMAO partners with U.S. lumbermen's association * Building permits remain flat in July * * * * * *   CONFERENCE 2000: WHAT A TIME WE HAD! This year's Hardlines Marketing Conference was fabulous - with almost 200 people there! We'll continue our report on the conference in the next issue. My thanks to our sponsors: Black Eagle Consulting Cologne International Trade Shows Hardware Merchandising/Canadian Contractor JDA Intactix LBMX Online Direct Power Packaging RONA Inc. Sterling Commerce Union Gas The Watt Group Wolf Gugler & Associates * * * * * * HARDLINES WHO'S WHO 2000-2001 EDITION: Guide to Canada's leading hardware and home improvement retailers, wholesalers, buying groups, mass merchants and co-ops, with more than 100 listings featuring buyers etc. Order online or call us at 416-489-3396.  
HARDLINES CONFERENCE: REINVENTING RETAIL   Emerging retail trends and the importance of articulating a defining business vision were the focus of the 5th annual Hardlines Marketing Conference, held last week in Toronto. Featuring Annette Vershuren and Eric Petersen of Home Depot Canada, as keynote speakers, the one-day symposium drew more than 200 retailers and vendors from the North American hardware and home improvement industry. Here are some highlights … CUSTOMER ANALYSIS: Retail analyst Sid Doolittle, of McMillan/Doolittle in Chicago, described how three main consumer groups - mature, boomers and Generation Xers, influence the current retail scene. An aging population and shifts in the traditional family structure will affect the types of products and services available and the environments in which they're purchased. Income levels will continue to affect spending habits. The fact that the income of the top 20% of U.S. wage earners has increased significantly while the other 80% has been flat over the last 25 years accounts for the growth of stores like Wal-Mart and Costco, where prices drives everything, and of high-end niche "logo" markets. Ethnic populations will see big growth. These demographic shifts will affect all sectors of the retail market. And because the new generation of consumers will be tech savvy, they represent enormous potential for on-line shopping. Doolittle sorts successful retailers into "EST" categories; Cheap-est (Wal-Mart, Costco), Hot-est (Gap, Starbucks), Big-est (Home Depot), Easy-est (Nordstrom, Land's End), and Quick-est (McDonald's, Walgreen's). He also suggested that retailers must pay more attention to making the consumer's shopping experience convenient and efficient. Some retailers, he said, have sacrificed the consumer's convenience for their own. Customer convenience and "no-barrier" shopping will be the buzzwords of the coming decade, Doolittle predicts. Internet retailing, he says, is still an unproven financial model, and will depend on how issues of consumer trust and distribution logistics play out. There's still speculation about the degree to which on-line shopping will encourage impulse sales.   FAMILY VALUES: Don Neufeld doesn't open his stores on Sundays. In fact, the Saskatoon retailer publicizes this fact in all the advertising for the two-store chain, J&H Builder's Warehouse. It started when news got out that Home Depot would open stores in Saskatoon. After researching other retailers on the Internet, Neufeld chose a slogan that would position his stores against the new competition: "Closed on Sundays - we spend our Sundays building family values." Other business leaders balked at the idea, but not only has it paid off, community and church groups quickly applauded the move. Customers line up to proclaim their loyalty to a company that puts family - and the health of the community - ahead of profits. Closing on Sundays is just one of many ways Neufeld has strived to create a humane, supportive work environment. For example, employees are given one week paid leave each year to work with the charity of their choice. It increases their sense of commitment to the community and allows them to grow as individuals which, he says, makes for a better employee.   COMPETITIVE INTELLIGENCE: Though short on cloak and dagger, the breakout session on competitive intelligence was packed with suggestions for using information as the foundation for long-range planning and short-term, competitive strategies. Playing to a packed room, David Lithwick of Market Alert explained how to dig up information from the public domain and how to follow ethical guidelines when conducting those searches. Rather than hiring an expert to do competitive intelligence, Lithwick encourages executives to look within their organization for existing sources of information, including professional associations, newsletters, websites, libraries and government departments. Gathering information, says Mr. Lithwick, is relatively easy. Deciding which information to use and how to apply it is a more challenging task. He suggests creating a simple template to define your business objectives and determine the information that's critical to those goals. NEXT WEEK: ANNETTE VERSCHUREN, HOME DEPOT, AOV CANADA, GARDENING WITH HEART, POWER PACKED BRANDING AND MORE!  
BUILDING BOX TO OUTSOURCE INSTALLED SALES   The Building Box has formed a partnership with Home Service Club to offer installed sales in its stores. Each of the new stores will be outfitted with service counter offering "HSC Installed Sales." The counters will be right at the front of the store, beside the customer service and returns desks. Banners and POP throughout the store will remind customers of the installed option. Building Box customers will get three quotes on each job, and they will have access to Homeservice Club's 24 hour emergency service. HSC already works with some 300 trades throughout the GTA, but to service other regions, the company is will have contractor recruitment events. The first will be this Thursday in Cambridge, ON. Paul Crocker, formerly executive director of I.L.D.C., has been hired to coordinate contractor recruitment. The first three Building Box stores are slated to open late November in Cambridge, Scarborough and Brampton, ON. A site in Mississauga at Highway 401 and Winston Churchill Rd. is scheduled to open by mid-March 2001. * * * * * * ALLIANCE INTERNATIONAL ADDS FRENCH ITM AS A MEMBER Alliance International LLC (Home Hardware, RONA and Do-it Best Corp.) has added a new member: Bricomarché, the French co-op of building centres that is a division of ITM. ITM in turn owns one-sixth of RONA. The first category under review is alkaline batteries, which have the same manufacturing standards in Europe and North America. Members have further agreed to develop a business-to-business (B2B) e-commerce website. It will be used to improve communications and reduce costs of transactions between members and their suppliers, says Greg Thomas, executive director of the Alliance. The system will enable members to place orders either from their respective warehouses or directly from the vendor. The Alliance is also attempting to increase its collective leverage with its suppliers, so those whose contracts come due this year will find the bar raised as the Alliance seeks to obtain better pricing and service levels.  
COMPANIES IN THE NEWS   Home Depot Canada will accelerate the entry of new formats into this country. EXPO and Villager's Hardware were originally expected to arrive here within two or three years. But speaking at our conference last week, Home Depot Canada president Annette Verschuren said the large-size EXPO Design Centres "will be in Toronto very soon." Sexton Group Ltd. has added the following new members: T.C. Building Materials, Winnipeg; T.T.'s True Value Hardware, Leaf Rapids, MB; Watson Paint Centre, Port Alberni, BC; Double Diamond Enterprises, Milden, SK; Crofton Hardware, Crofton, BC; Lumber One & Hardware Too, Carstairs, AB; B.H.L. Building Supplies, Sylvan Lake, AB; Rosthern Valley Lumber, Rosthern, SK. The Lumber and Building Materials Association of Ontario (LBMAO) has formed a strategic alliance with the National Lumber and Building Material Dealers Association, which is headquartered in Texas. The purpose of the alliance is create some synergies between the two organizations, especially in the areas of future support of e-commerce initiatives, cross promotions and access to member benefits. The arrangement will not affect the LBMAO's association with CHS.
  CANADIAN STOCK WATCH
COMPANY 52-WEEK HIGH 52-WEEK LOW CLOSE (FRI.)
       
Canadian Tire 37.35 18.40 20.40
Canfor 19.80 10.35 10.30
Goodfellow 12.55 8.75 9.60
Home Depot 70.00 39.37 54 1/4
Hudsons Bay 21.65 12.50 15.80
Lowe's Cos. 67.25 40.37 43 3/16
Sears Canada 42.50 30.75 32.40
Taiga Forest 14.20 6.80 8.75
West Fraser 39.50 27.00 28.60
    "Be not afraid." - Matthew, xiv:27
PEOPLE ON THE MOVE   Mary Agar has been promoted within the sales and marketing department at Plastmo Ltd. to the position of sales Manager, Canada (vinyl rain gutters). (905-793-9462) At Camco Inc., Neil G. Gartshore has been appointed CFO and vice-president finance, effectively immediately. Most recently, he was Camco's general manager, builder sales. He succeeds M. James Evans, who was promoted to senior vice-president, e-business, earlier this year. (905-521-3128) Jack Kurilla has taken over at Moulinex Canada as general manager. Formerly in charge of international accounts, he replaces Eric Roberts. (905-669-0114)  
NOTED...   "In the past, big retailers didn't go into appliance sales because customers expected the large products to be delivered and installed. This was a major expenditure in equipment and manpower. But first Home Depot, and now Wal-Mart, are selling majors without in-house delivery services." - Rob Philips, a spokesperson for Wal-Mart in the U.S., on that company's entry into white goods sales.  
MARKET INDICATORS   Housing starts in Canada fell 11.8% to 146,000 units seasonally adjusted in August, compared with 165,600 in July, according to CMHC. Urban singles starts were down 4.7% to 72,700 units, compared with 76,300 in July. Urban multiples starts were down 23.4% to 52,300 units in August, compared with 68,300 in July. In Québec, urban starts were up 8.9% to 23,300 units, from 21,400 in July. Singles were up 31.3% while multiples were down 9.3%. Montréal starts increased 16.4% from July, to 15,600 units. The Prairies were flat (very funny - Editor) with 23,600 urban starts in August, the same as July. This was mainly due to a 21.9% increase in multiples, partially offset by a 10.4% decrease in singles. In the Atlantic region, urban starts were down 4.1% to 7,100 units. Nova Scotia and Prince Edward Island were up; New Brunswick and Newfoundland decreased. British Columbia had 8,900 urban starts last month, down 21.2%. Singles were down 4.9% and multiples were down 40.4%. Vancouver starts were down 10.9% to 5,700. In Ontario, urban starts were down 23.1% to 62,100 units in August. The decrease was due to a 36.5% down in multiples and a 9.0% down in singles. Toronto starts were down 35.3% from July to 36,100 units.  
WHY HARDLINES SUPPORTS THE WOMEN'S CONSUMER PRODUCTS NETWORK   Given the growing number of women in this industry, we are delighted there is finally a forum for them to meet and exchange ideas and insights. Anyone in hardware/housewares/packaged goods or related industries would benefit from checking out this organization. September 21: "Fully Alive From 9 to 5!" Featuring author Louise LeBrun. Details coming soon. Meanwhile, check out her website at: www.partnersinrenewal.com For more information, please call: (905) 212-3826; fax: (905) 274-7646; email:wcpn99@yahoo.com, website:www.wcpncanada.org (Hardlines is proud to be a sponsor of the WCPN)  
Hardlines Marketplace   Got new products? Looking for new staff or lines? Hardlines Marketplace is read each week by North America's key decision makers in home improvement retailing and manufacturing. If you want to build your sales team or find new agents or new lines, this is the place! Only $16 per line. Call Beverly at 416-489-3396, ext. 2, for more details. * * * * * * * HARDLINES™ the electronic newsletter. www.hardlinesfax.com phone: 416-489-3396; fax: 416-489-6154. E-mail: buzz@hardlinesfax.com Michael McLarney, Editor & Publisher (extension 1): mike@hardlinesfax.com Beverly Allen, Marketing Manager (extension 2): bev@hardlinesfax.com Nancy Wright, Administrative Assistant: nancy@hardlinesfax.com Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2000 by Michael McLarney. Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. Call for information on a site license for your company. Subscription: $185+$12.95 GST = $197.95 (or $27.75 HST = $212.75) per year (GST #13987 0398 RT). (Please make cheque payable to McLarneyCom.)