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Michael McLarney, President & Editor mike@hardlines.ca Beverly Allen, Publisher bev@hardlines.ca John Caulfield, Contributing Editor Phone: 416-489-3396 |
| September 22, 2008, Vol. xiv, #35 | |
| In This Issue | ||||||||||||||||||||||||||||||
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“It’s only possible to live happily ever after on a day-to-day basis.” —Margaret Bonanno (American science fiction novelist, 1950- ) |
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| U.S. dealer will lay out challenges of surviving tough times | ||||||||||||||||||||||||||||||
| TORONTO — A major U.S. pro dealer that weathered the grinding downturn in the U.S. economy will share his story and his insights with Canadians at the 13th Annual Hardlines Conference. Mark Scherer, COO of Scherer Brothers Lumber in Minneapolis, watched sales tumble and his business threatened as the housing market in his area evaporated around him. Yet, two years later, his company has survived — and is operating more efficiently than ever.In its heyday, Scherer Brothers Lumber, a third generation, family-owned dealer with five yards, had gross annual revenues approaching $247 million. According to Scherer, up until 2004 his company had enjoyed 14 years of unprecedented growth. “The housing market and economy at large were incredibly strong. I had no reason to think that I should plan for a downturn — let alone a downturn of mammoth proportions.”
Effective planning enabled the company to survive, even though in just three years sales have tumbled to almost half of what they were and staff has been reduced by almost the same amount. “The most important thing is to have a Disaster Recovery Plan in place, based on multiple scenarios,” Scherer says. “If you start thinking about what you need to do once you’re there, then you’re too late.”
Scherer Brothers reduced staff, and then invested heavily in the people who remained. It re-examined its customer base, focusing on those customers that were most profitable on a net income basis. One smart decision the company made in the early part of the decade was to cater to a wider contractor base, not just large tract and package builders. “In around 2000-2001, there was a big push in the industry, and within our company, to service the large national builders exclusively. However, we remained committed to serve the custom installer and mid-range builder, even though they require more customer service.”
Mark Scherer will speak at the 13th Annual Hardlines Conference, Oct. 23-24, 2008 at the Renaissance Toronto Airport Hotel and Conference Centre. He joins a raft of leading retail leaders, including Ray Griffith, President and CEO of Ace Hardware Corp.; Greg Hicks, CFO of TSC Stores; Chuck Côté, Vice-President, UFA Co-operative Ltd.; Greg Dinsdale, Senior Partner of LBMX; retail guru Anthony Stokan of Anthony Russell & Associates; and Yves Gagnon, President and CEO of Groupe BMR. For more information, click here.
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| City votes against proposed Lowe’s Canada site | ||||||||||||||||||||||||||||||
| KINGSTON, ON — Lowe’s has been turned down in its bid to secure a site in this city’s west end. The land is zoned commercial, not retail, and city council voted 7-6 against changing the zoning in Lowe’s favour, despite the lure of some $350,000 in annual taxes and upwards of 170 new jobs.The industrial land in question, although considered in short supply, is already surrounded by other retailers, such as Wal-Mart. The giant retailer, which opened its first stores in Canada in December 2007, has 30 days in which to file an appeal. Kingston, a prosperous college town with a lot of ties to the nation’s capital (Ottawa is about two hours away), already has a Home Depot and a RONA big box. Lowe’s has traditionally set up stores in proximity to Home Depot. It’s been aggressively seeking sites across Canada and has been in discussions with property developers as far west as Vancouver. | ||||||||||||||||||||||||||||||
| Canadian Tire develops new formats in face of sagging sales | ||||||||||||||||||||||||||||||
TORONTO — Although Canadian Tire Retail edged up 1.5% in its second quarter, same-store sales were down 0.5%. As the economy slows down, the giant retailer is looking for ways to expand its retail markets. Two distinct retail formats are being tried out, one that goes downtown, and one for smaller towns. Canadian Tire’s newest concept is a small-market store. The first ones, which opened in July in the Northern Ontario towns of Hearst and Deep River, are 18,000-sq.ft. outlets designed to serve smaller communities. The company has identified about 100 such communities that it says are “under-served” by Canadian Tire. Two more test stores will be opened before year’s end, in Cochrane, ON and Athabasca, AB.
Canadian Tire still has a number of smaller stores across the country, many of them around 6,000 sq.ft. in size. These stores have been replaced over the past few years by larger so-called 20/20 stores, which can reach 100,000 sq.ft. The Hearst store replaces just such a 6,000-sq.ft. outlet, which can no longer fit the range of products now available through Canadian Tire. The new, larger footprint comprises 18,000 sq.ft. of retail, a 7,000-sq.ft. enclosed garden centre, and a larger, 18,000-sq.ft. open garden centre for bulky product. The store also features a gas bar and Mark’s Work Wearhouse. This new format is expected to generate $5-$9 million in sales annually.
The new Hearst store features a number of innovations, including more windows up front, leading into an entrance that provides easy-to-read navigational signage to help customers find their way around store. The customer-care desk is still at the front of the store, and now offers services such as hunting and fishing licenses. But the biggest change is the sheer amount of product available, compared with the old store it replaces. The store now carries 30,000 SKUs, up from 15,000-20,000 SKUs previously. And presentation is less about “inspiration” and lifestyle as embraced by the 20/20 concept, and more about product density.
Meanwhile, Canadian Tire closed two of its older small stores in Ottawa earlier this year, giving way to large-format outlets including a $40 million “urban” store. The two-storey site will feature what the company calls “a unique, customized urban format Canadian Tire store”. The store will draw from the lessons learned at similar stores in Toronto and Vancouver — including the realization that the majority of customers take public transit to get to the stores — which have been fitted into high-priced downtown real estate.
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| Home Depot will cut prices to attract customers | ||||||||||||||||||||||||||||||
| ATLANTA — In an effort to revive faltering consumer spending and recapture market share in the U.S., Home Depot is reducing prices on 1,200 items in its stores. The price drops, which range from 5%-50%, were being introduced last week, backed by advertising that touts “guaranteed low prices, even lower”.The need to gain market share has been underscored by Home Depot’s results: sales in the second quarter were down 5.4% and same-store sales were down 7.9%. But any move by the world’s biggest home improvement to become the Wal-Mart of home improvement could spark price wars with competitors like Lowe’s and RONA, resulting in eroded margins. Home Depot is also examining its merchandise mix, reducing multiple brands on some lines, such as bath fittings, and eliminating others, such as apparel, all together. | ||||||||||||||||||||||||||||||
| National Hardware Show lures back national brands | ||||||||||||||||||||||||||||||
| NORWALK, CN & COLUMBUS, GA — Char-Broil, LLC, a brand leader in the gas grill sector, will return to exhibit at the National Hardware Show next year. This marks a return to the show, being held May 5-7, 2009 at the Las Vegas Convention Center, after a six-year absence.Char-Broil will occupy an inside presence on the show floor within the Lawn & Garden World section of the show, anchoring a new outside feature area that will showcase hands-on testing and education covering “what's new” in grills, outdoor furnishings, accessories, storage, and coverings. The new section is called the “ Stay-Cation Marketing Center”. According to Ed Several, group vice-president for the National Hardware Show, the show is working hard to listen to vendors’ concerns and help them connect with retailers and buyers. “We are making major changes to inspire manufacturers and retailers with new ideas, education and — most importantly — new products to jump-start sales in a challenging marketplace,” he said. “The new Stay-Cation Marketing Center is the first of many new areas that we have planned that are specifically designed with our customers’ needs at the forefront.” | ||||||||||||||||||||||||||||||
| The Bay unveils “green” store | ||||||||||||||||||||||||||||||
WATERLOO , ON — The Bay has opened a 120,000-sq.ft. Bay store at Conestoga Mall, the first green Bay location in Canada.Among the store's many environmentally efficient features:
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Does your company have a strategy to grow as the economy slows down? Come to the 13th Annual Hardlines Conference for the competitive information you need to grow in the months ahead. Learn from the industry’s best: Oct. 23-24, 2008 in Toronto. Click below for more info. —Beverly |
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Speakers - Registration
Questions contact Brady at 416-489-3396 |
| COMPANIES IN THE NEWS |
NEW YORK — Home Depot’s $600 million ad business is currently up for review and at least six agencies have responded to the RFP. According to Adweek , the RFP states that, “in the past five years Home Depot has ‘lost its competitive advantage on all key brand drivers’ and now compares unfavourably to Lowe’s on shopping experience and is about equal in terms of products, inspiration, price and experience.” The short list of agencies has been identified as Interpublic Group units McCann Erickson; Holliday, Connors, Cosmopulos; WPP Group units JWT and Grey; Omnicom Group's GSD&M Idea City; and the incumbent, The Richards Group. Home Depot is expected to choose the new agency in November.OTTAWA — Preston Hardware, a major independent in the National Capital Area, had  the grand opening of its new kitchen-and-bath showroom recently. The 11,000-sq.ft. facility is in a new building adjacent to the hardware store, and replaces an older building on the same site. The showroom, complete with 13-foot ceilings and elevator, features full assortments of fixtures and fittings, including high-end sanitary ware and “a lot of showers , tubs, and whirlpools,” says Preston Hardware’s president, Mario Giannetti.
LONDON — The U.K.’s largest home improvement retailer, Kingfisher plc, had a 2.5% rise in retail sales for the second quarter. However, same-store sales were down by 2.6%. The company, which owns the B&Q brands in the U.K. and Castorama in France and elsewhere through 800 stores in eight countries, has been battling a slow economy on the home front and in China, while performance in Eastern Europe has been strong.
BURNABY , BC — Taiga Building Products Ltd., the independent distributor of building products, reported a dividend of $0.0150 per common share and the stipulated monthly interest payment of $11.6667 per $1,000 principal value subordinated notes. The payments will be made to shareholders and noteholders of record at the close of business on Sept. 30, 2008 and will be payable on Oct.15, 2008.
NEWBURY, ON — McNaughton’s Home Hardware hosted anniversary celebrations last week to commemorate 60 years in the hardware industry. McNaughton’s has been a part of the Newbury community since 1948, when John Duncan McNaughton began the auto, farm and general hardware wholesaler. McNaughton’s became a member of Home Hardware in 1980. The store’s ownership was eventually transferred to three of John’s sons, Ross, Danny and Robbie who ran the store until his fourth son, Gary and his wife Susan took ownership in 1988.
HOUSTON — The Home Depot Foundation, the philanthropic arm of Home Depot, said it would donate $1 million to the recovery and rebuilding efforts of areas devastated by Hurricane Ike. Lowe’s Cos. has pledged $1 million to the Red Cross, and all 1,575 of its stores continue to serve as cash donation sites to benefit relief efforts for all hurricane victims this year. Lowe’s will match in-store contributions dollar-for-dollar, up to $250,000.
 SYDNEY, Australia — Woolworths, the department store chain, is reportedly in talks with Mitre 10, the number-two home improvement retailer in Australia. According to the Business Spectator, Mitre 10 needs capital to compete against its big-box rival Bunnings. However, Mitre 10 is structured much like Home Hardware in Canada — a co-operatively owned public company whose shareholders are the dealers. Bunnings is owned by Wesfarmers, which recently purchased Coles, a mass merchant that competes against Woolworths.
MONTREAL — MAAX Corp., the specialty bath products company, has completed the previously announced sale of substantially all of its assets to Tricap Partners Ltd., a private equity fund managed by Brookfield Asset Management. MAAX will retain its existing operations and product lines and operate under the name MAAX Bath Inc. in Canada, and MAAX USA Corp. in the U.S. MAAX Spa Industries Corp. will hold the spa assets and will operate as a separate subsidiary of Tricap. MAAX says it will continue to meet its obligations to customers and suppliers, and will continue to employ all of its employees. |
| PEOPLE ON THE MOVE |
 Eric Hodson of EMS Merchandising Services will be coordinating IRLY's store merchandising. He will be creating store plans and designs for the IRLY Building Centres of BC. Hodson has many years of merchandising experience drawn from managing IRLY Building Centres in Clinton, Prince Rupert, Salmon Arm and Sorrento. (604-596-1551)Jon W. Bazar has been appointed Canadian sales manager for SPG International. He was formerly at Innovak. (514-220-6682)
Drake Pelham will join Maxtech Consumer Products Sales team as vice-president sales responsible primarily for U.S. retail accounts. Drake has over 30 years experience in the retail and consumer products industry, most recently as executive vp for ABC Spax Fasteners. Before that he spent 13 years at Home Depot, where he was director of proprietary brands and merchant for hardware. He will be based in Tampa, FL. (813-230-2402) |
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ECONOMIC INDICATORS |
| The manufacturing sector saw an increase in sales in July, rising 2.7% to $54.1 billion. This was the fourth consecutive monthly increase. Overall, 17 out of the 21 manufacturing industries increased compared with June, accounting for over 97% of total sales. Most of the sales gains in July were due to higher volumes, in contrast to the price-induced increases observed in recent months. In 2002 constant dollar prices, July sales increased 2.0% to $48.2 billion, the highest level since November 2007. (Stats Canada)Canada , the largest wood supplier to the U.S. market, shipped 17% fewer wood products to the U.S. in 2007; shipments by non-Canadian suppliers (including those from Europe, Australia and New Zealand) were down by 35%. ( U.S. Western Wood Products Association) |
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Resumés |
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Posted Sept 2 A proven sales record with key national accounts and their independent dealers in the hardware, building materials, and paint industries and superior business development skills. |
| Posted July 14 Highly effective relationship management skills with a track record of developing and executing programs effectively. Strong strategic thinking and management background. Solid propensity for team building, coaching, mentoring and developing others. A competitive manager with a proven sales, marketing, merchandising and, leadership record. |
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Hardlines Products |
| Hardlines Quarterly Report Hardlines Retail Report (Coming this month, place your order now!)Hardlines WebinarsHardlines Annual Conference Only 31 more days until the conference! Hardlines Hot Product Showcase Hardlines TV Free daily news updates |
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