| CONFERENCE UPDATE: INTERNATIONAL DAVID & GOLIATH STORY |
WORLD HEADQUARTERS, TORONTO — When Home Depot entered Mexico and Canada, it was there to stay. When it entered South America, it lasted only four years.The story behind the Chilean home center retailer that resisted Home Depot's arrival was one of the centerpieces of the Hardlines Conference Series, held here recently. On learning of Home Depot's imminent arrival, Guillermo Aguero, the head of Sodimac, a 55-store chain headquartered in Chile's capital, Santiago, hired an ex-Home Depot executive to help develop a strategy to survive the onslaught.
 With the aid of Jim Inglis, former vice-president from Home Depot's Atlanta office, Sodimac effectively transformed itself from a traditional home center chain into a company that offered an alternative to the big box, with careful focus on two distinct customer groups, women and pros. Without copying Home Depot's format, Sodimac tripled the amount of SKUs available to contractors to ensure a one-stop shopping environment. The home center side of the business was enhanced "to make it extremely attractive to the female," Aguero explained.
Both Aguero and Inglis shared their stories and insights at the Conference, capping off two days of presentations by analysts, retail experts and industry execs. |
| DO-IT BEST MEMBER OPENS FIRST STORE UNDER NEW GROWTH PROGRAM |
 SPARTA, Wis. — A 25,000-sq.ft. home improvement store here called All American Do-it Center became the first to be opened by a dealer-member of Do-it Best Corp. with help from the buying group's RetailSTART! program.Do-it Best, the industry's second-largest buying group, has designed RetailSTART! to encourage dealers to expand their operations, either by opening new stores from the ground up, or by purchasing existing stores and converting them. The program was introduced by the Fort Wayne-Ind.-based co-op in January.
Brian Buswell, president of All American Do-it, said the help he got from the co-op's two field staffers who managed this project, included market and site analysis, demographic research, project financing and assistance with matching the store's inventory with the market's needs.
To participate in RetailSTART!, a dealer-member must have at least two stores (All American is Buswell's third), and the new store must be at least 5,000 sq.ft. For this fiscal year (which ends June 2005), Do it Best had originally planned to undertake 50 RetailSTART! projects. Already, says David Heine, vice-president of retail development, the company expects to exceed that target. |
| TRACTOR SUPPLY PUTS STOCK IN HORSES, CORPORATE CULTURE |
 SPECIAL REPORT — Day two of the recent Hardlines Conference Series featured an all-American success story. Joe Scarlett, chairman of Tractor Supply Co., outlined his company's fantastic growth against a backdrop of growing rural populations and a focused niche in farm and rural hardlines sales.Identifying a reverse flow of well-heeled city goers to rural America, Scarlett said Tractor Supply customers all have land, pickup trucks and animals. "We define a horse as a great, expensive pet. We're the retail store for horses."
Maintaining a corporate culture is a major part of his company's success. That culture earns a high level of trust from customers. "We hire our customers," Scarlett added, "farmers, and ranchers, horse riders and welders. With these people in our stores, we can walk a customer through just about any project they may encounter."
Recently voted number 43 on Fortune's list of America's 100 fastest growing companies, Tractor Supply must now keep pace with that growth. "Our biggest challenge over the next four to five years is the selection of people and maintaining our culture." |
| CONFERENCE UPDATE: HOUSING EXPECTED TO STAY STRONG |
| TORONTO — The home improvement industry should not be concerned about any possible interest rate hikes in the near future. Even if they occur, they won't have much effect on the record-high housing starts and booming sales of existing homes in Canada, says Peter Norman, a real estate economist with Clayton Research.Norman, speaking at the Hardlines Conference Series last week, pointed out that a number of factors would have to come into play to effect a dramatic impact on affordability. Interest rates would have to rise by at least two percentage points, incomes would have to drop by 15%, or house prices would have to rise by 17%. These are the factors that affect the percentage of family income required to purchase a home. Norman says that number should be around 25%.
Even if interest rates start to climb, he adds, the increase will not be sufficient to deter home buyers. |
| SEARS INTRODUCES HARDWARE, FLOORING STORES |
| TORONTO — Watching consumers stay away from traditional shopping malls in favor of power centers, Sears Canada is following them with an "off-mall" strategy. These smaller stores will focus on specific product categories, including one borrowed from the U.S. and another that's brand new for Sears — on either side of the border.The first free-standing Sears Hardware stores in Canada will open in three centers in Ontario on September 24 — namely, Windsor, Oshawa and Kitchener. The test stores are considered low-cost prototypes, because the sites have all been converted from existing Sears Automotive outlets, in what are called "three very good Sears markets," according to Sears spokesperson Vincent Power.
The new stores, which range in size from 8,500-10,000 sq.ft., represent at least two times the 4,500 sq.ft. typically devoted to hardlines in a Sears department store. They have an interior circular service area, with products laid out like a full-line store — and with a similar look. The stores will have a heavy focus on power and benchtop tools, with almost 90% of the selection under Sears's own Craftsman brand. Other brands, including DeWalt, will also be present.
Other categories that get showcased include outdoor power equipment and a broader range of small and builders' hardware than is typically found in a department store.
New for Sears is the introduction of workshop storage, called "Craftsman Garage Storage Solutions." Products include shelving, mobile cabinets, and storage components. "It offers us some versatility that differentiates us from other brands," says Power.
If the new store format performs well in the three test markets, Power expects it to be rolled out on a more widespread basis eventually.
While Sears Hardware has a counterpart in the United States, another off-mall concept does not. Two Sears Coverings stores will also be launched, one in St. Catharines, and the other in Mississauga, Ont., by late October or early November. These will feature carpeting, hardwood flooring, paint and wallpaper, and window shades and blinds.
The third format to watch for is Sears Appliances and Mattresses. Three Ontario stores are expected to open before year's end, starting with Stoney Creek in early November, followed by Burlington and Oshawa. Another store, in Scarborough, will open in spring 2005.
"Sears is strong in these businesses in our main stores, and this gives Sears the way to have these products at the power center without going to the mall," says Power. "We want to get to people closer to where they live — that's the strategy."
Sears plans to open 30 new-format stores, including Sears Wellness stores, by the end of 2005. They will be located mainly in power centers and high-traffic strip malls. |
| HOME DEPOT GOES GREEN WITH LATEST PROMOTION |
| TORONTO — Home Depot Canada showcased its Energy Smarts program in Toronto last week. A partnership between Home Depot, the non-profit Clean Air Foundation and the federal government, Energy Smarts will see selected suppliers offer rebates and discounts to consumers who purchase their products at Home Depot stores before September 26.Products such as lighting timers, programmable thermostats, draft-proofing kits, insulation, furnace air filters and fans, and energy efficient light bulbs will be promoted. Suppliers involved in the promotion include Honeywell, Leviton, Intermatic, Owens Corning, GE, Philips and RCR.
Consumer demand is driving the push to get energy-efficient products on the shelves, says Ian Cleghorn, a merchandiser for Home Depot's electrical division. For example, in the last three years, he's seen huge growth in the popularity of compact fluorescent bulbs. "In dollars, it's gone from 3-5% three years ago to close to 20% of the category," says Cleghorn.
Jeff Porter, national sales manager for Leviton, which makes outdoor lighting products, agrees that sales of energy efficient products are soaring. "In five years, solar has come to account for 60% of our outdoor lighting sales."
Consumer interest in these categories will continue to affect the mix of products Home Depot offers its customers, says Cleghorn. "This year, for the first time, Home Depot will not carry conventional Christmas light bulbs. We'll only carry LED lights."
Home Depot is also experimenting with a program called "The Power of One", under which it commits to purchase $1 worth of renewable energy for every Philips 16W marathon mini-household energy-saving bulb purchased in Ontario until the end of October. |
| SASKATCHEWAN OPENINGS MARK RONA EXPANSION |
| REGINA & PRINCE ALBERT, Sask. — Rona inc. has opened two new retail outlets in this province, including a big box in Regina that is its 65th big box store in Canada. The second store, a Rona Home Centre in Prince Albert, is a more traditional format lumber yard that's touted as "renovation neighbourhood hardware store." It's the latest example of Rona's newest format for home centers ranging in size from 40,000-50,000 sq.ft. size.The Rona Home & Garden store in Regina is the first such large-format outlet for Rona in Saskatchewan. It features 145,000 sq.ft. of retail sales space, and cost more than $20 million to erect. The Home Centre concept that went up in Prince Albert is the latest example of Rona's new format for local home centres from 40,000-50,000 sq.ft. in size. It's designed to meet the general needs of both male and female customers, ranging from DIYers to contractors who prefer smaller stores, while still having access to a broad range of products.
Rona is investing in both the Home Centre format and Rona Building Centre, which features somewhat more contractor emphasis. Both formats have been used to replace existing Rona Cashway stores in Ontario, however, the latest re-opening there indicates Rona is still maintaining the Cashway name, too. In Simcoe, Ont., a refurbished store was re-opened last week, keeping the Rona Cashway banner. The 22,000-sq.ft. store features more than 20,000 SKUs.
"Every year, Rona expands, renovates and updates about 20% of its 530 points of sale across the country," says Claude Bernier, executive vice-president of traditional and specialized stores for Rona, in a prepared release. |
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| INSURER AND LOWE'S JOIN FORCES TO HELP FLORIDA REBUILD |
| COLUMBUS, Ohio — Nationwide Mutual Insurance Co., one of the largest insurers in America, has teamed up with Lowe's Cos. to offer some much-needed assistance to hurricane-ravaged homeowners in Florida.Nationwide, based here, is distributing Lowe's certificates valued at up to $2,000 to more than 70,000 of the insurer's customers living in Florida counties that were hardest-hit by the storms. Those customers can use those certificates to purchase home repair materials and other products at local Lowe's stores.
According to a prepared statement, National insures 301,260 homes and 304,917 vehicles in Florida.
In related news, Lowe's has re-activated its in-store customer donation program to support the American Red Cross Disaster Relief Fund. Through September 20, all Lowe's stores on the Gulf and East coasts served as official cash donation sites for the fund. Lowe's is matching customer donations dollar-for-dollar, up to $1 million. |
| COMPANIES IN THE NEWS |
| NEW YORK — AJO Lumber and Home Center, an Ace Hardware member, has opened its second store in Manhattan, and the first prototype for Ace dealers seeking urban locations. The new AJO store offers 6,100 sq.ft. of retail, with wide aisles, low (eight-foot) racking, and an upscale slant that puts more emphasis on housewares and décor than found in a typical Ace home center.LONDON, U.K. — Kingfisher plc, the giant home improvement retailer, finished the first six months of the fiscal year with retail sales of £3.9 billion, up 9.6% from £3.6 billion in 2003. Adjusted pre-tax profit was up 18.4% to £345.9 million, from £292.2 million during the same period a year earlier. Sales in Britain and Ireland were up 6.3%, while same-store sales were up 3.1%. Sales from Kingfisher's international operations rose most dramatically, up 19.9%, with profits up 23.3%.
ATLANTA — Home Depot will sell $1 billion aggregate principal amount of its 3.75% Senior Notes due 2009 through an institutional private placement. The net proceeds from the offering will be used for general corporate purposes, including assigning up to $500 million of the net proceeds to fund the repayment of a previous note offering.
MEXICO CITY — Remember all those dumb pics people email of a Wal-Mart beside the pyramids? Well, they're about to become true. A discount store owned by Wal-Mart is being erected only a half-mile from the ancient temples of Teotihuacan, sparking opposition by a small coalition that doesn't want to see the big box from the top of the Pyramid of the Sun.
SURREY, B.C. — Irly Distributors, the Western-based wholesale buying group, has added a new member to its Irly Building Centres group: Valu-Mart Country Store, Salmo, B.C., which was formerly affiliated with Irly through the group's independent Western hardware distribution division. Since creating a dealer development department two months ago, Irly has added two new dealers, and six members have joined the Western division.
TORONTO — Canadian Tire Corp. has reached an agreement with its Canadian Tire associate dealers to revise the contract that's offered to individual dealers. The form of the new contract defines their future business relationship with Canadian Tire Retail, a division of Canadian Tire Corp. The contract is based on an Agreement in Principle reached in the fall of 2003, with terms extending for a 10-year period. Major financial terms will be subject to review at the end of five years. Canadian Tire expects to have substantially completed the individual contract signing process by the end of 2004. Canadian Tire has 443 associate dealers, who own and operate 455 Canadian Tire stores across Canada.
HOFFMAN HILLS, Ill. — Sears Roebuck & Co. is going beyond online appliance sales with the launch of online sales of home furnishings and apparel. About half of Sears' apparel offerings and 70% of its home furnishings will be available on Sears.com, with a focus on its best-selling items and brands. Sears is expected to benefit from the expertise of Lands' End, a chain it acquired two years ago that has been an innovator in online selling. |
| PEOPLE ON THE MOVE |
| Elyse Allan has been appointed president and CEO, GE Canada. She began her GE career in 1984 as a consultant with the Corporate Marketing Consulting Services in Bridgeport, Conn. She moved to Canada in 1988 as manager, Customer Service Program for GE Canada, and later served as marketing manager for the GE Commercial and Industrial business in Lighting. Most recently, she was president and CEO of the Toronto Board of Trade. Allan succeeds Bob Gillespie, who is retiring at the end of the year, after more than 50 years with GE.Ed Jaeger, president and CEO of Ironclad Performance Wear, has been elected as a committee member for the Specialty Tools and Fasteners Distributors Association for a three-year term beginning in 2005. STAFDA is an educational trade association made up of distributors, manufacturers and agents of light construction, industrial, and related products.
Bill Granger of Delta Faucet Canada received the Joseph K. Seidner Award from the Canadian Institute of Plumbing and Heating. The award was presented in recognition of Granger's contributions to Canadian plumbing codes and standards. He is manager, product engineering for Delta Faucet in London, Ont. |
| U.S. MARKET INDICATORS |
| Retail sales fell 0.3% in August, but were up 4.9% from August 2003. Retail sales, not including automobiles, actually rose 0.2% in August, and were up 7.0% from the level in August 2003.The Consumer Price Index was up one-tenth of 1% in August, says the Commerce Department. Inflation is being held at bay as prices fell on cars, clothing and gasoline, helping counter rising costs of medical care, some food items and other energy products. Not including food and energy, the CPI was up just one-tenth for the third straight month. |
| CANADIAN MARKET INDICATORS |
| Inflation slowed in August as consumers paid 1.9% more than they did in the same month a year ago for the goods and services included in the Consumer Price Index basket. That's a slowdown from the 2.3% increase registered in July. However, the 12-month variation in the All-items excluding energy index has been fairly stable, rising 1.5% in August, after increases of 1.6% in June and July. |
| OVERHEARD... |
| "The home-improvement industry remains one of the strongest retail sectors in Canada. One of the reasons is that spending on one's home has gone beyond repair and renovation. People are restyling their homes to reflect new trends in products and décor much more frequently than in the past. This eye to fashion and comfort also reflects a renewed focus on hearth and home in an age of global uncertainly." —MM quoted in the Toronto Star September 16, 2004. |
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****HARDLINES MARKETPLACE****
Don't miss the products and services on the Hardlines web Marketplace:
https://hardlines.ca/html/marketplace.html
And check out Hardlines Classifieds on the web:
https://hardlines.ca/html/classifieds_new.asp
HELP WANTED
ONTARIO SALES MANAGER
Leading Canadian building product manufacturer is seeking a proven sales manager for the Ontario market. Candidate must have a minimum of three years sales management experience. Competitive salary, company vehicle, benefits and the opportunity for advancement. Please forward resumes, including expected remuneration, to buzz@hardlines.ca P. O. Box 963.
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PURCHASER - LUMBER & COMMODITIES DEPT.
Tim-BR Marts Ltd. is currently looking for a buyer and advertising coordinator.
Qualifications:
- A minimum of 5 years purchasing experience in the home improvement industry; advertising experience in this industry would be an asset.
- Able to work under pressure, meet deadlines and be a team player.
- Ability to work with our suppliers and our network of independently owned dealer locations.
- Flexibility to do what it takes to get the job done.
- Career oriented.
Please forward your resume to:
Tim-BR Marts Ltd.
705 1601 Airport Road N.E.
Calgary, AB T2E 6Z8
E-mail: robyn@tim-br-mart.com
Attention: Robyn Cull
We thank all applicants for their interest in this position, however, only those considered will be contacted for an interview. PLEASE NO PHONE CALLS
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PURCHASER - LUMBER & COMMODITIES DEPT.
Toronto based national buying group is planning to expand the role and function of its lumber and commodities department. The successful candidate will be responsible for negotiating and establishing annual purchasing agreements, provide weekly commodity market updates, initiate pool buys, direct mill purchases, and provide individual support and consultation for member companies.
Knowledge of product and product application, channels of distribution, alternative and related bldg. materials and marketing trends in the LBM industry is essential. Candidate will also posses a sound working knowledge of Microsoft excel, and Microsoft word. A minimum of 10 years experience in retail, distribution or manufacturing is required.
We offer a competitive remuneration and benefit package
Please reply in confidence to buzz@hardlines.ca; put P.O. 723 in the subject line.
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SENIOR SALES EXECUTIVE
A leading Canadian supplier of Hand Tools, Power Tool Accessories and Rotary Tool Accessories to leading retailers in North America and Europe, has an opening for a senior position in its Sales & Marketing department.
The incumbent will be responsible to manage the sales of nominated house accounts/territories in the North American retail market. This position would also involve managing the Sales Agents/Agencies for your accounts/territories. This individual will be responsible for devising sales strategies, increasing customer base, increasing the product & program base to existing customers and ensuring budgeted sales numbers are met or exceeded.
Experience in the Hardlines Retail Industry, a proven record of managing large & small customers and sales agencies and a willingness to travel is essential. Prior experience in the U.S. Market is desirable. Salary & perks based on experience, qualification & previous achievements.
If you are a self-starter and a team player with management skills, able to recognize the market needs & willing to take the challenge, please contact Harjinder Sangha at harjinder@maxtech-mfg.com in confidence.
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REGIONAL SALES MANAGER — ONTARIO
We are a major building materials company seeking a proven sales executive for the Ontario region.
Based in GTA the position entails a variety of responsibilities that would include but may not be limited to:
- Sales/Territory Management
- Business development
- Major Account Management
Candidates are required to have pertinent industry experience in sales and/or marketing management. A university degree would be an important asset but equivalent experience will be considered. Our company offers a very competitive salary and benefits package appropriate to the position.
Please forward your resume with covering letter to buzz@hardlines.ca and put P.O. Box 815 in the subject line.
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SERVICES OFFERED
 BLACK EAGLE CONSULTING 2000 INC.
President Richard Simms has 35 years experience in the hardware/housewares industry - both as a manufacturer and a consultant. Black Eagle Consulting specializes in strategic plan analysis, organizational structure review, executive coaching/assessment, succession planning. CHHMA affiliate member and Canadian Association Family Enterprise trained facilitator. See website www.blackeagle.ca or call 905-842-3010 in Oakville, Ontario for more information.
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 RECRUITING CAN SOMETIMES BE A HEADACHE.
Let Kris Weston and Associates alleviate your recruitment headaches. If you're looking to hire an "impact player" for your business, a General Manager, National Sales Manager, or Marketing Manager... someone who will have a significant impact on your top or bottom line, then contact Kris Weston. Please check out our website at www.kriswestonandassociates.com for a recent testimonial from a satisfied client in the home improvement industry.
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WHETHER OR NOT IT GETS PAINFUL IS UP TO YOU.
 UCCnet services compliance is being strongly encouraged by retailers from Wal-Mart® to The Home Depot® because it makes supply chains more efficient. But implementation can be challenging. Sterling Commerce will guide you through every step. To find out more, click here for a free copy of, "Data Synchronization: From Compliance to Collaboration."
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RETAIL IS DETAIL. Let Noral Instore, a national service company, handle your service requirements in Canada. Noral serves some of America's leading manufacturers, managing their lines for Canada's top hardware retailers, big boxes and mass merchandisers.
Contact Dave Leslie at 905-702-9443, to find out how Noral can boost your sales in Canada. http://www.noralmarketing.com
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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 $2.50 PER WORD FOR THREE WEEKS IN THE CLASSIFIEDS.
TO PLACE YOUR AD, CALL PHYLLIS NOWELL AT 416-489-3396 OR EMAIL: phyllis@hardlines.ca |
John Caulfield, Contributing Editor
vol. x, #38, September 20, 2004
