HARDLINES™
Five years serving Canada's home improvement industry
September 25, 2000 - Volume vi, #36
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:
* Who's the biggest: our latest study ranks the top retailers
* Home Depot pushes globalized buying, environmental practices
* Beaver dealers visit Home Hardware
* GTA shootout: Revy vs. Home Depot
* Housing prices inch up
* Depot says R&D is up to vendor
* * * * * *HARDLINES WHO'S WHO 2000-2001 EDITION: The only annual guide to Canada's leading hardware and home improvement retailers, wholesalers, buying groups, mass merchants and co-ops. It lists more than 100 companies. Each listing features executives, product categories, sales, number of outlets, buyers, etc. No salesperson or marketing person should be without this little beauty!Order onlineor call us at 416-489-3396.HHOME DEPOT: GLOBALIZATION AND ENVIRONMENTImproved service levels and greater environmental accountability were just two of the messages Home Depot delivered recently. Eric Petersen, vice-president of Home Depot Canada, exhorted vendors to function more globally. He spoke, along with his president, Annette Verschuren, at the Hardlines Marketing Conference in Toronto on September 14.Verschuren gave an overview of the company's growth and promotional plans. "We did 53 million transactions in 59 stores," she said of the company's performance in 1999. Home Depot's specialty concepts, EXPO and Villager's Hardware, will be coming to Canada sooner than later. EXPO is currently being given an expansion push that will add stores to the northeastern U.S. Canada, specifically Toronto, is slated to be part of that expansion.Home Depot has expanded into other niches through acquisition. The Floor Store, a 45,000-sq.ft. outlet, opened recently in Dallas, TX. Another is California Lighting, another chain bought by Home Depot. "We're good at buying expertise and then spreading that expertise throughout the company," said Verschuren.Petersen, who recently joined the Canadian team from Home Depot's northwest division, sent a strong message to vendors that service levels have to come up, especially given the globalization of negotiations. He cited Canadian companies such as MAAX and Premdor for providing that service with a global vision.He also advised that Home Depot will be working to streamline the distribution channel even more: "We will be taking the broker side of the equation out of the picture," he said.* * * * * *WHO'S THE BIGGEST? RETAIL SALES RANKEDA new ranking of the top home improvement sales in Canada puts Home Hardware Stores at number one, with Home Depot Canada in second place.Including last year's acquisition of Beaver Lumber, Home Hardware's sales totalled $2.899 billion in 1999. Home Depot's were an estimated $2.3 billion. The top spot has traditionally been the domain of Canadian Tire, whose total gross operating revenue last year actually reached $4.728 billion. However, hardware and home improvement sales (not including sporting goods and automotive) by all dealers were an estimated $1.710 billion, putting Canadian Tire's sales in this category in the number four spot.Other companies in the top 10 included RONA , Sodisco-Howden and Revy.The ranking is included in the Hardlines Industry Report: Home Improvement Retailing in Canada, a major study that we'll have ready in a couple of weeks.* * * * * *BEAVER DEALERS SHOP LBM AT HOME HARDWARE MARKETBeaver Lumber dealers were invited for the first time to this weekend's Home Hardware fall market. They were able to place orders for lumber and building materials through Beaver's Markham, ON office, but hardware orders out of St. Jacob's must wait until Beaver's supply deal with Ace Hardware comes to an end on March 31, 2001.Home's installed sales program, "Home Installs", was also given a nationwide rollout at this market. The program had been introduced on a trial basis at Home's spring 2000 market, with about 10 stores in Ontario trying it out.* * * * * *R&D: WHO'S JOB IS IT - THE VENDOR'S OR THE RETAILER'S?The speakers at our recent Hardlines Marketing Conference had differing views about who should be investing in new product development. According to Eric Petersen, vice-president of merchandising at Home Depot Canada, that duty falls squarely on the shoulders of the vendor. Not so, said Will Raap. Raap is president of Gardener's Supply, a Vermont-based mail-order company that spends a lot of time talking to - and listening to - its customers. The results of that feedback go into developing new, proprietary products - products that sell. He showed examples that have appeared in his catalogue that are ennvironmentally sound and often wonderful in their simplicity.However, Petersen said the job of listening to customers was up to the vendors. "Who better to understand our customer's needs than you, the vendors?" COMPANIES IN THE NEWSSears Canada will open a Sears Furniture and Appliances store in Moncton, NB at the Wheeler Park Power Centre in the spring of 2001. The 43,000-sq.ft. outlet will be devoted to furniture, rugs, accent-decor items and major home appliances and will employ about 40. This will be the second such store in the Atlantic region, following Halifax. Revy Home and Garden appears to be getting more aggressive in the Toronto market at last. Last weekend's full-page newspaper ad features the red Revy apron beside an orange apron labelled "The other guys" in Home Depot's characteristic typeface.The Revy apron is labelled "Proudly Canadian" while the orange one is called "Hardly Canadian."The Bay's national flagship location in Toronto will be commemorated tomorrow as an historic landmark by the Ontario Heritage Foundation. Built by Edmund Burke at the turn of the century, the store, on Queen Street at Yonge, it was the city's first fireproof building.Lowe's Cos. Inc. broke ground last Tuesday in Findlay, OH on a US$80 million regional distribution centre. It will supply products to approximately 100 stores throughout the Lower Great Lakes region and employ more than 500 people. The 1.25 million-sq.ft. facility is being built on about 110 acres near Interstate 75. It is scheduled to open in October 2001.National Manufacturing of Canada Inc. is relocating its sales and marketing offices from Markham, ON to its eastern distribution centre in Cobourg, ON: 711 Ontario Street, P.O. Box 640, Cobourg, ON K9A 4L3.The sale of Westburne Inc. to Rexel S.A. has been approved at a price of $22.75 per share, for a total of $987 million. Westburne had sales of $2.47 billion in 1999, while Rexel, a French distributor of electrical supplies, has sales of $8.5 billion.CORRECTION: ITM has not joined Alliance International LLC, as reported last week. However, thanks to its relationship with Alliance member RONA inc., the company has been invited to participate in some trial collective negotiations with the Alliance to test a more global buying model, starting with batteries. CANADIAN STOCK WATCH