vol. viii, #35 September 23, 2002

* Evergreen and National join to form super buying group * TruServ makes deal for Growmark's retail operations * Pierceys begins construction of fifth store * Wilson leaves Ace Hardware Canada

"Don't let the sound of your own wheels drive you crazy." - Jacqueline du Pré (1945-1987)
Réno-Dépôt, Sodisco-Howden Group, Groupe BMR, and more! Don't miss our next "Meet the Buyers" Breakfast Seminar. This one will be in Montréal on October 18. Click here or call Nancy at 416-489-3396 for more details!!!

Mississauga, ON - Reliance Buying Group Inc. was christened last week with the signing of seven existing buying groups under one aegis. The new group represents almost 1,200 dealers and total retail sales of $3.4 billion.

Five of the groups involved are already allied under the Evergreen group: Castle, Delroc Industries, Federated Co-operatives, Co-opérative Fédérée de Québec, and IRLY Distributors. The new alliance joins these groups with the two members of the National Alliance, Sexton Group and Torbsa. Each group holds an equal share in the Reliance buying group, which will operate out of Castle's head office in Mississauga, ON. The presidency of the Reliance Group will be shared in its first year by Terry Elliott, president of Delroc, and Brian Kusisto, president of Sexton. All sides were careful not to link Reliance with its forebears. "This is not an amalgamation or merger of the Evergreen and National buying groups," Kusisto said to the roomful of vendors gathered to hear the announcement. In fact, both National and Evergreen will be wound down after 2002. Vendor negotiations that would occur with both these groups in November 2002 will be replaced by Reliance negotiations. Purchases will begin through the new group starting January 1, 2003. "Clearly, Reliance is the new force in home improvement retailing," Kusisto added. The group is open to further expansion. "We definitely have an interest in considering new members in this," says Kusisto. "we think there's room for more consolidation and we see ourselves as well positioned [to be the consolidator]." While the buying groups have been discussing alliances and mergers for decades, the decision to move ahead with the Reliance group came about relatively quickly. Negotiations began only within the past three months, during which time suppliers were quietly contacted and introduced to the concept. These suppliers have been generally optimistic about the news. Many already face different levels of purchasing loyalty from group to group. By placing them under one umbrella, some suppliers may benefit if a smaller customer can increase their buying levels to match those of their fellow Reliance members. As one vendor one pointed out, the kind of consolidation this agreement represents is necessary for independents, and will help ensure their long-term viability. Another vendor said he simply looks forward to fewer meetings with buyers.
Winnipeg, MB - Growmark Inc. has signed a letter of intent with Winnipeg-based TruServ Canada Cooperative Inc. to form an alliance between Growmark's retail division and TruServ's operations. While a number of details are yet to be ironed out, the deal will involve blending the distribution activities of both co-ops, to create efficiencies and establish which product lines can most effectively be handled by each company to respective member dealers. For example, both firms offer lawn and garden products, but Growmark has more extensive assortment of upscale offerings, a program for nursery stock. In addition, Growmark's pet food business is very strong, an opportunity for TruServ's Pet Junction program. The alliance is intended to result in Growmark's 112 FS and 36 Country Depot dealers being serviced by the alliance, with shipments and buying for most categories being done by TruServ. Rather than divesting itself of its retail division (Growmark has four other agro-related divisions), "we're looking at this as an investment in TruServ's business," says Jim Hoyt, executive director of Growmark's Canadian operations. "We're now assessing what's the most efficient distribution for our members collectively, and the critical mass of this alliance makes this more feasible." "The alliance will eventually integrate TruServ's and Growmark's stores into a common platform for ordering," says TruServ president Léo Charrière. The deal also replaces a reciprocal supply agreement Growmark had with Ace Hardware Canada. Under that arrangement, Ace had supplied Growmark members with hardware, while Growmark was able to supply lawn and garden, workwear and some farm related products. Charrière sees opportunities for Growmark's existing banners, especially the Country Depot stores, which feature a consumer-friendly retail format that appeals to both sexes. He would like to try and expand this banner, even boutiquing it in existing TruServ stores. "We look forward to taking the expertise Growmark has developed over the years and pushing it out." The result, Charrière adds, will give TruServ sufficient presence in Ontario eventually to establish distribution of its own, complete with buying offices, in that province, reducing cycle times to Central and Eastern Canada. "It's going to increase our presence out in Ontario and becomes an important stepping stone for better distribution to Atlantic Canada." The deal is subject to due diligence, and is expected to be finalized by the end of this year.
Dartmouth, NS - Construction begins this week on a new store for Pierceys, the Building Material People. The store, the fifth for the privately held chain, will open in Elmsdale, a community just north of Halifax, early in Spring 2003. "This facility will be modeled after our award winning Tantallon store, but will also include several additional service features," says Peter Korecki, president and COO of Pierceys. While he would not disclose details of the new look, he noted that the 30,000-sq.ft. store, like the Tantallon outlet that opened in 1998, will have more of a retail focus than the other stores in the chain. Pierceys has traditionally derived about three-quarters of its sales from contractors. The new stores are targetting a 50-50 mix of trade and consumer business,with more emphasis on DIY-friendly lines. "We've been expanding the seasonal lines with great success," says Korecki. This includes snow removal products in Winter and lawn and garden in Summer - including more high-end pine and cedar lawn and garden furniture. "Customers are willing to pay $90 for a cedar Adirondack chair." He adds that Pierceys makes these products from its full-service mill, which was the heart of the company that began in 1915. Sales reached $63 million in 2001 and Korecki expects growth in the area of 9% this year.
My thanks to everyone who found time in their busy schedules to attend this year's Conference Series. And my thanks to our sponsors, without whom we could not have pulled off such an amazing event! - Michael
Canadian Tire 33.15 18.50 30.70
Canfor 11.70 8.08 8.35
Emco 12.77 3.71 11.49
Goodfellow 13.99 8.00 12.15
Home Depot 52.60 26.10 31.23
Hudson's Bay 16.65 6.45 8.40
Lowe's Cos. 49.99 24.99 42.39
Sears Canada 25.10 12.50 18.04
Sodisco-Howden 2.20 0.75 1.60
Taiga Forest 7.00 3.75 6.50
West Fraser 44.42 26.14 32.10
Imperial Manufacturing Group has acquired Kel Kem Professional Products, a stove and fireplace cleaning products manufacturer in Pickering, ON. The deal includes all Kel Kem retail and HVAC brand name products. The move is part of IMG's strategy to expand its core business throughout Canada and the U.S. Richelieu Hardware Ltd. has finalized the acquisition of 75% of Menuiserie des Pins, which manufactures products for window and door manufacturers. Management of Menuiserie Des Pins will retain 25% and remain involved in the operations of the company. Castle Building Centres Group has added the following members: Prescott Building Centre, Prescott, ON; Ultimate Windows & Doors, Saint John, NB; Lameque Construction, Lameque, NB; Clear Lake Home & Garden Centre, Onanole, MB; and MacGregor Home Centre, MacGregor, MB. Black & Decker Corp. is recalling about 140,000 cordless electric lawn mowers sold since 1996 after receiving 11 reports of electrical parts overheating and nine reports of minor property damage from the mower. The mowers are sold under the Black & Decker name and through Sears Roebuck under the Craftsman brand. Faced with debt and asbestos litigation, Georgia-Pacific would like to sell off parts of its business and focus on building products. But a proposed share offering intended to raise about US$1 billion to pay down debt has been thwarted by the threat of asbestos litigation.
Dunc Wilson, vice-president merchandising and marketing, has left Ace Hardware Canada to pursue "other interests." Pat Bennett, vice-president sales, and Stan Sauer, vice-president administration and operations, will fill in Wilson's duties until a replacement is found. (905-475-1188) Mark Mossman has been appointed sales manager for Unilock Ltd. in Canada. He was formerly at Ace Hardware Canada, where he was central and eastern sales manager. (416-646-9000)
Don't let this happen to you: A U.S. Bankruptcy Court judge has approved US$22 million in fees for three months' work and US$2.6 million in expenses for lawyers working on Kmart Corp.'s Chapter 11 reorganization. She said bills from the company's lawyers were "generally in a range that was reasonable." She did, however, quibble over an expense tab for martinis and oysters at the Waldorf Astoria in New York in February.
The seasonally adjusted annual rate of housing starts in Canada increased 5.9% in August to 213,000 units seasonally adjusted, from a revised 201,100 units in July, according to CMHC. Urban multiple starts rose 10.3%, while urban singles rose 4.0%. Rural starts in August were flat compared with July. Actual urban housing starts for January to August this year are 26.8% higher than for the same period last year (116,752 units compared with 92,097 units). The single-detached market increased 34.6% while multiples increased 17.3%. Wholesale sales increased 0.7% in July, with wholesalers achieving $34.8 billion in sales. Since November 2001, wholesale sales have generally followed an upward trend, after a relatively flat sales period from the spring of 2000 to October 2001. The metals, hardware, plumbing and HVAC sector was up 1.3%; the lumber and building materials sector and the household goods sector both grew 0.9%. The Consumer Price Index climbed 2.6% from August 2001 to August 2002, says Statistics Canada. This follows a 2.1% year-over-year increase in July. Energy prices were largely to blame. U.S. housing starts fell for the third consecutive month in August. The 2.2% decline was greater than analysts were expecting.
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 HARDWOOD PLYWOOD SALES MANAGER Longlac Wood Industries Inc., a wholly owned division of Kruger Inc. (www.kruger.com), is seeking a top notch Hardwood Plywood Sales Manager. We are looking to locate a candidate with a proven background in leading and developing a superior sales organization. A person with the sales passion who would thrive on the challenge of keeping ahead of the growth and expansion planned for our company. This person needs to have a keen sense of how to sell unique and value added products. An individual that can effectively translate our product portfolio into distinct market benefits. He/she should be able to visualize where this dynamic plywood industry is headed and what the Longlac Wood Industries sales organization needs to become in order to be optimally positioned. Longlac is in process of re-inventing itself to better serve our customers and end-users product and service needs. We have an excellent reputation for our veneer core and Multi-Core products. But we need to do better. An example of what we have done on our OSB side our business can be seen at www.dricore.com. We are planning to create the same kind of value add magic in plywood. Please reply in total confidence to Sam Mowat, General Manager Sales & Marketing, Longlac Wood Industries Inc. (905) 403 0425 x 224 or by e-mail at smowat@ll.kruger.com . Come help make it happen. ************************************************************************************ 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@rogers.com ************************************************************************************ CATEGORY ANALYST Are you a numbers cruncher with people skills? That is what's required for our client, a leader in their category, with recognized consumer brands. You'll support the Major Account Managers through analytic projects and presentation development. A key member of the team, you'll assist in partnerships with key retailers by utilizing fact based selling/category management resources such as POS data analysis of key retail performance. Disseminating this information for the company's sales and senior management team and producing plan-o-grams are also important position components. You offer a successful background in space management and category analysis utilizing strong analytical, communication and presentation skills, preferably demonstrated in a cross-functional team environment. Understanding of database concepts and reports design is required, in addition to your skills in software applications such as Excel, PowerPoint and Access. SAP exposure also an asset. A business/marketing degree is highly preferred. Looking to help a company continue its marketing sophistication level? Please contact Wolf Gugler in complete confidence, quoting file # C-18. Wolf Gugler & Associates Limited. 1370 Don Mills Road, Suite 300, North York, 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  *********************************************************************************** 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
Hardlines is published weekly (except monthly in December and August) by McLARNEYCOM 542 Mount Pleasant Rd., Suite 302, Toronto, Ontario, Canada M4S 2M7 © 2002 by Michael McLarney. HARDLINES™ the electronic newsletter hardlines.ca Phone: 416.489.3396; Fax: 416.489.6154 Michael McLarney, Editor & Publisher: mike@hardlines.ca Beverly Allen, Marketing Manager: bev@hardlines.ca Nancy Wright, Circulation Manager: nancy@hardlines.ca ______________________________________________ THE HARDLINES "FAIR PLAY" POLICY: Reproduction in whole or in part is very uncool and strictly forbidden and really and truly against the law. So please, play fair! Call for information on multiple subscriptions or a site license for your company. We do want as many people as possible to read Hardlines each week – but let us handle your internal routing from this end! ______________________________________________ Subscription: $199+$13.93 GST = $212.93 per year (GST #13987 0398 RT). Secondary subscriptions at the same office are only $28 + $1.96 GST = $29.98. Ask about our reduced rate for branch offices. You can pay online by VISA at our secure website or send us money. Please make cheque payable to McLarneyCom.