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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 2, 2008, Vol. xiv, #32 | |
| In This Issue | |||||||||||||||||||||||||||
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“Every man I meet is in some way my superior.” —Ralph Waldo Emerson (American essayist and philosopher, 1803-82) |
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| Exclusive interview: Orgill boss talks about Canada | |||||||||||||||||||||||||||
 CHICAGO – The first time Orgill entered Canada was in 1998, when Ron Beal, then vp merchandising for giant hardlines wholesaler, spoke at the Hardlines Conference. A decade later, Beal came back to speak at the same conference, and let slip Orgill’s interest in the Canadian market. In fact, it was already supplying a few dealers in border towns, on a test basis.At the latest Orgill dealer show, held at Chicago’s McCormick Place recently, Beal talked frankly about his company’s plans to enter Canada in a concerted way. The no-frills distributor does not manage or license any store banners, but specializes in supporting independents that wish to rely on their own brand within their respective communities. The company does offer a range of services — everything from merchandising and rental programs to a full-line pro dealer program — but all these offerings are “menu-driven”, says Beal, i.e., a dealer only pays for them if they want them.
Looking across the border, Orgill found a country filled with “similarities and differences” from the U.S., Beal says. Issues like packaging, language, and product and building codes, are all being scrutinized — and addressed. “We’re evaluating items that are common on both sides of the border, then those that need only labels affixed; and we’re identifying those products that are specific to the Canadian market.”
But the ability to even consider serving Canadian dealers could only have occurred with the completion of Orgill’s distribution network across the U.S. first. A distribution centre in the northeast corner of West Virginia is capable of delivering to Central Canada. A giant new “mid-American” distribution centre is being built in Sikeston, MO, which will be able to serve Canadian dealers in the Prairies, along with a new DC in Utah. Orgill is about to break ground on a site in either Washington or Oregon, which will easily serve Western Canada.
“We’re confident, from a pure distribution standpoint, that we could cover a large part of the Canadian area,” says Beal. He won’t put a timetable on Orgill’s expansion north of the border, but insists that “it’s a priority for us — all the new distribution centres will have room for Canadian-only product."
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| UFA keeps an eye on further LBM acquisitions | |||||||||||||||||||||||||||
| CALGARY — UFA Cooperative Ltd. has been on a buying spree with the acquisition of sporting goods chain, barely a year after buying Spruceland Lumber in Fort McMurray. The company has made clear its intention to expand its farm, hardware, and “lifestyle” offerings to rural Western Canadians, using its store in Red Deer, AB as a prototype. But will it look at snapping up any more lumber dealers?“I think so,” says Dallas Thorsteinson, president and CEO of UFA. The company is currently focused on a wider retail format, being tested in its prototype Red Deer store, “taking all the strengths of Spruceland, UFA and [its latest acquisition] Western Sports, and putting them in a different retail proposition – a higher proposition called ‘lifestyle’,” he adds. “But we will continue to look at other LBM opportunities.”
Those opportunities will be, however, within the context of UFA’s larger objective to offer a wider range of products and services to its existing rural customer base. “There’s no way I’m going to go up against the Totems of the world, the RONAs of the world. So the important thing for us is this lifestyle proposition, taking all of the retail capabilities we’ve developed, and take them to rural Canada.”
(Chuck Côté, vice-president of Agricultural Operations for UFA, will be a presenter at the 13th Annual Hardlines Conference, Oct. 23-24. |
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| U.S. sales of new and existing homes show some life | |||||||||||||||||||||||||||
WASHINGTON — The seasonally adjusted annual rate for new-home sales in July was off 35.3%, according to Census Bureau estimates. But in a dismal housing market, good news is where you find it, and industry watchers could point to the fact that July’s annualized sales figure was 2.4% higher than the revised number of June.In addition, new-home sales in the Northeast and West also increased. In July the median selling price of a new home declined by 1% to $230,700. And the inventory of unsold new homes continued to shrink, hitting 416,000 in July, which is the equivalent of 10.1 months’ supply at the current rate of sale.
 Some good news could also be found on the existing-home front, where resales increased in July by their highest rate since February. The National Association of Realtors estimated that July resales increased 3.1% over June to an annualized rate of 5 million. However, that figure is 13.2% below the resale rate in July 2007.
Resale selling prices decreased in July by 1.26%, to $212,400, compared to the same month a year ago. But the inventory of unsold homes kept rising in July by 3.9% to 4.67 million units, representing an 11.2-month supply. Currently, two-fifths of existing home sales are distressed: they have either been foreclosed on or are delinquent in their mortgage payments.
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| Best Buy gets into small appliance game | |||||||||||||||||||||||||||
TORONTO — Best Buy Canada, the consumer electronics retailer, is adding small and home appliances to its in-store and online product selection. It already carries extensive lines of consumer electronics, personal computers and entertainment products. Now it’s adding microwaves, blenders and juicers, coffee and cappuccino machines, grills and Panini presses, kitchen tools and gadgets, toasters and ovens, and shavers. In addition to these new offerings, Best Buy will carry a wider selection of vacuums. It will also carry heating, cooling and air supply systems on a seasonal basis. The company is going with some higher-end brands, including Breville, Philips, and Dyson.
“We want to make life easy and convenient for our customers and are constantly looking for new categories and products to add to our line-up, "By expanding our product range to include the latest in household items like cappuccino machines, blenders, and toasters, we want to make Best Buy a one-stop-shop for all consumer electronics needs - in the office, den, family room or kitchen,” said Martin Vander Velden, vp merchandising, Best Buy Canada in a release.
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| Wal-Mart commits to cut energy | |||||||||||||||||||||||||||
| MISSISSAUGA, ON — Wal-Mart Canada has announced plans to cut energy in new stores, starting next year, by more than 30%. Speaking at the annual conference of the Association of Municipalities of Ontario, a gathering of 1,600 municipal leaders, Wal-Mart Canada president and CEO David Cheesewright addressed the growing demands from Canadian cities for energy-efficient buildings. He introduced details of a new program, “Wal-Mart HE”, a high-efficiency design for stores with various environmentally preferable features and operations. These will include: capturing waste heat from refrigerators to heat air in other areas of the store; eliminating wasteful frozen-food stocking practices; installing motion-activated display lights; cutting energy used to light sales floors by 20%; LED lights in various applications, like store-front signs; incorporating low-flow water fixtures.The company will also reevaluate how its stores are built. Construction materials will be more energy efficient; for example, Wal-Mart intends to eliminate ceilings and replace chemical-intensive flooring. It also intends to start building smaller stores, to eliminate the cost and the waste associated with building, operating, heating, cooling and ventilating a larger space. Wal-Mart continues to pursue three long-term sustainability goals globally: to produce zero waste; to operate with 100% renewable energy; and, to make more environmentally preferable products available to customers. | |||||||||||||||||||||||||||
| UK multi-trade show gains momentum, support | |||||||||||||||||||||||||||
| LONDON — The industry’s leading trade associations and wholesale groups have renewed their support and participation in the London multi-trade show that now consists of Totally Tools, Totally DIY and the recently launched Totally Secure.The changes proposed for the 2009 shows by organizer Brintex have won the approval of long-term show supporters the British Home Enhancement Trade Association (BHETA), Decco, the Federation of British Hand Tool Manufacturers, Home Hardware Southwest, MICA Hardware, and Toolbank, who have all confirmed they will be exhibiting at the show, Jan. 18-20, 2009. In addition, the British Hardware Federation, which has had its own stand at the show for the past two years, has confirmed it will be back in 2009. “More than ever, retail buyers have to be proactive in their search to find new products to sell on to their customers. Our multi-trade show will be a great sourcing platform for buyers – and should help to stimulate interest and retail sales, which the whole market needs,” said show director James Murray. This year, to mark the show’s 15th anniversary, a high-level industry conference, addressing the key issues of DIY and home retailing, will take place on the morning of Monday, Jan. 19. Details of the conference theme and speakers are to be announced shortly. Totally Tools, Totally DIY and Totally Secure will take place Jan. 18-20, 2009 at Earls Court in London. For further details and a full list of current exhibitors, please contact Paul Grinsell: 0-20-7973-4734. | |||||||||||||||||||||||||||
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| The Early Bird special for the conference is now over. However, you might be able to beat Brady to our online form before he changes the prices...Hurry! |
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Speakers - Registration
Questions contact Brady at 416-489-3396 |
| COMPANIES IN THE NEWS |
| BELLEVILLE, ON —- The Lowe’s stores being built in this town east of Toronto is hiring, and locals are watching a concentration of home improvement retailers that's becoming increasingly familiar in Canada, namely Lowe’s and Home Depot, all side by side. Two other Lowe’s sites, in development with commercial developer RioCan, remain on track. The first is in RioCan’s greenfield shopping centre development at Taunton Rd. and Garrard Rd. in Whitby, ON. The second lease agreement is for a Lowe’s store at the RioCan Warden Centre, Warden Ave. and Eglinton Ave. in Toronto’s east end. In order to accommodate Lowe's, a former Wal-Mart was demolished. Both stores are expected to open early in 2009.KAMLOOPS, BC — RONA opened its newest RONA proximity store here last week. The site represents a $15 million investment. The new RONA store offers the latest concept in stores specializing in home construction and renovation. The 52,000-square-foot store features a 6,000-square-foot garden centre and offers more than 22,000 finishing and specialized products. An existing RONA Home Centre located on Mount Paul Way will continue its operations, but will be renovated in the near future. Both stores will be working in collaboration, sharing services such as deliveries. TORONTO — Sears Canada Inc. had total revenues for the second quarter ended Aug. 2 of $1.42 billion, down 1.6% from $1.444 billion for 2Q 2007. Excluding the effect of a fiscal-year change, revenues increased 0.5%. ( Beginning in 2008, the company changed its year end to the Saturday closest to Jan. 31 instead of the Saturday closest to Dec. 31. Excluding the effect of the fiscal-year change, revenues increased 0.5%.) Same-store sales increased 1.8%. Net earnings were $61.1 million, up from $42.3 million last year. Total revenues for the first half of the year were $2.68 billion, up 0.4% from $2.66 billion a year ago. Excluding the effect of the fiscal-year change, revenues actually decreased 0.8%. Net earnings were $124.2 million, compared to $56.6 million. Same-store sales were flat for the first half of the year. TORONTO — Masonite International Inc. had second-quarter sales of $507.8 million, a decline of 13.8% compared to $588.9 million in the second quarter of 2007. Sales to external customers from facilities in North America decreased 23.2% to $326.3 million in the second quarter of 2008 from $424.7 million in the second quarter of 2007. More than half that decline in sales is being attributed to the effects of store closings by Home Depot in the second half of 2007. Sales decreased 13.9% in North America, excluding the loss of Home Depot business and the impact of favourable foreign exchange movements. Sales to external customers outside of North America, primarily in Western Europe, increased approximately 10.5% to $181.5 million in the second quarter from $164.2 million. For the six months ended June 30, 2008, Masonite reported consolidated sales of $972.1 million, a decline of 16.1%. LONDON — Kingfisher plc, the world’s third-largest home improvement retailer, which owns the DIY chain B&Q, has sold off its Castorama business in Italy. The 31-store chain has been acquired by the French home improvement retailer, Adeo, which was formerly known as Leroy Merlin. The chain was sold for €560 million and the deal is expected to close in the last quarter of this year. Kingfisher has 890 stores in nine countries in Europe and Asia. IRVINE, CA — Hines Horticulture, one of the industry’s leading commercial nurseries, filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Included in its filing was its wholly owned subsidiary Hines Nursery. The corporation has asked the bankruptcy court in Delaware to sanction the process for Hines to sell substantially all of its assets. |
| PEOPLE ON THE MOVE |
Home Depot has promoted Marvin Ellison, who had been president of the chain’s Northern division, to the position of executive vice-president for U.S. Stores. Ellison replaces Paul Raines, 43, who is resigning to join another  company after being in that job since April 2007. Raines started with Home Depot in 2000. The 43-year-old Ellison, who joined the company in 2002 as its vice-president for loss prevention, previously had worked 15 years for Target, the general merchandise retailer, where he started while he was a junior in college, according to the Atlanta Journal-Constitution. At Depot, he has also served as vice-president of global logistics.Owens Corning has plucked a former executive from Whirlpool Corp.’s ranks to become president of its building materials group. Karel K. Czanderna was Whirlpool’s vice president of cooking products and outdoor kitchens. She was responsible for appliance brands including Jenn-Air, KitchenAid, Whirlpool, Maytag and Amana. Czandema also spent 18 years with Eastman Kodak, where she rose to vice-president of its portrait photography and copier and printer businesses. |
| NOTED... |
| The Canadian Hardware and Housewares Manufacturers Association will host its seventh Annual Industry Memorial Golf Classic Oct. 1, 2008 at the Angus Glen Golf and Country Club (South Course). The event is being held in memory of Les Groves (“Mr. Hardware”), Bob Hilton (3M) and Doug Straus (Home Hardware Stores). Proceeds from this tournament will be awarded in the form of Scholarships to the children of CHHMA member employees. For more information, contact CHHMA at: 416-282-0022. |
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OVERHEARD |
| “Some might say we’re just another company trying to endear itself to the Canadian public by hopping on the green movement. That perspective misses the point. Our focus on sustainability is as beneficial to our business as it is to the environment. For Wal-Mart, there is no distinction between environmental sustainability and business sustainability — it’s the same thing.” —David Cheesewright, president and CEO of Wal-Mart Canada, describing his company’s newest initiative to reduce energy in its stores. |
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Resumés |
| 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. |
| 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 |
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