vol. viii, #36 September30, 2002

· Rona paves way for IPO · Home Depot will open in Maritimes, expand Québec · Home Hardware introduces dealer-dedicated website · Lowe's plans 130 stores next year · Menard builds mega-big boxes

"It was an experiment that went on far too long, and it's the only thing in the world that ever beat me. And I put up a hell of a fight." - Keith Richards (Rolling Stones guitarist, on his long battlewith heroin addiction in the '70s; from a recent New York Times interview)
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!!!
Rona paves way for IPO by year's end

Boucherville, QC - The proposed initial public offering of shares by Rona Inc. is currently under review by securities agencies as part of the formal IPO process. A detailed prospectus has gone out to financial institutions, and Rona management is currently awaiting feedback before proceeding.

After that, if appropriate, Rona will begin a "road show" to sell the merits of its shares to traders across the country. Then, by the end of this year or the beginning of 2003, the company can go ahead with the IPO. The money raised by the share offering is earmarked for a number of things. One is to repay $49 million in debentures to lenders. Another is to facilitate "organic growth," that is, ongoing investment in existing dealers' operations and technology infrastructure. The company also wants to expand the efficiency and capacity of its distribution, including a proposed new distribution centre in Calgary. Finally, Rona is committed to continued growth, including the addition of more independent dealers and the possible acquisition of additional wholesalers. Bolstered by a strong economy, interest rates that stay down and housing expected to stay strong into next year, Rona wants to strike while the iron is hot. "We think this is the best time for Rona," says Sylvain Morissette, director of communications for the company. We are a developer in the market, and a developer in the economy. The company wants to grow," Morissette continues, "not only by increasing the network with new stores, either by recruitment or through acquisition, but also by continuing to work with vendors. We will remain key purchasers in this industry in every market in Canada where we have stores."

Home Depot eyes smaller markets in 2003
Toronto, ON - Home Depot Canada plans to maintain its pace of store openings next year, with between 13 and 15 planned. It is also considering sites for its smaller "neighbourhood urban" stores. The company is renewing its expansion efforts in different regions of the country. A property owned by Home Depot in Moncton, NB will finally be developed, with an expected opening date of Spring 2003. Even Charlottetown, PE is under consideration. "The numbers are in and they look very positive," says Annette Verschuren, president of Home Depot Canada. Expansion will continue in Québec, as well, a province that has been the focus of much of Home Depot's growth this year. The latest opening in that province was in Boisbriand on September 19. It will be followed by Greenfield Park in the Montréal area before the end of the year. Two stores will open simultaneously in Québec City by October 31. The company will have 12 stores in that province by the end of 2002, nine in the Montréal area, two in Québec City and one in Gatineau. Home Depot has been tinkering with slightly smaller footprints - around 90,000 sq.ft. plus 15,000 sq.ft. of garden centre - about 30,000 sq.ft. smaller than the standard format. Sarnia is the site of one such downsized store. Other locations that may accommodate this format in the year ahead include Grande Prairie, AB and Prince George, BC. Smaller sites are being sought, as well, for Home Depot's neighbourhood urban store concept - what Verschuren refers to as "Home Depot light." Designed to situate between standard-sized Home Depot stores, the urban stores eliminate most of the lumber and focus on convenience, storage, cleaning products and special orders. Tests of these 65,000-sq.ft. stores in New York and Chicago have spurred Verschuren to search for suitable locations in Canadian urban centres. Toronto, Montréal and Vancouver are all under consideration, although no sites have been picked yet.
St. Jacob's, ON - The 79th Home Hardware dealer market was the second time the co-op utilized the expanded warehouse to house its show. With the air conditioning providing relief to vendors, it was also the forum for the introduction of new programs and products. On the tech front, Home Hardware introduced "Home Xtra," a secure website for Home dealers that will enhance, and eventually replace, a great deal of the printed newsletters and information the company sends out to its members. Features of the site include full-colour previews of the year's flier programs, regional specials, and a "chat room" for dealer input and the exchange of idea s. The project is being spearheaded by Tony Krotz, dealer education manager, who also serves as editor of the site. The site will be able to tailor information for dealers, letting them pull up info of concern to them, instead of wading through reams of paper. "Eventually," he says, "the paper will go away." But, he admits, it won't go away any time soon. By Krotz's estimate, barely half of Home Hardware dealers have Internet access, and for some of them, that access is at home only, not in the store. He hopes that, as the Home Xtranet site increases in popularity, it will drive up Internet use among the members. Planned features such as electronic credits and returns should be further incentives for adopting the new technology, he adds.
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! Click here to see the conference notes. - Michael
Canadian Tire 33.15 18.50 28.25
Canfor 11.70 7.90 8.30
Emco 12.77 3.71 11.75
Goodfellow 13.99 8.00 12.05
Home Depot 52.60 26.10 26.76
Hudson's Bay 16.65 6.45 7.25
Lowe's Cos. 49.99 29.67 42.48
Sears Canada 25.10 13.03 18.10
Sodisco-Howden 2.20 0.75 1.63
Taiga Forest 7.00 3.75 6.25
West Fraser 44.42 26.14 30.25
Canadian Tire Corp. has struck a deal with Alimentation Couche-Tard to put the Canadian Tire name on its gas stations in Western Québec and Ontario. A pilot program involves retrofitting four Couche-Tard gas stations with the Canadian Tire Petroleum banner, while Couche-Tard will retrofit four existing Canadian Tire Petroleum convenience stores to the Couche-Tard banner. Two more sites each will be switched for an eventual total of 12 pilot sites. Facing the realities of a maturing marketplace and aging stores, Home Depot in Atlanta says it will start spending more money on upgrading existing stores. This year, 85% of the retailer's capital spending budget of US$3.6 billion will go toward 200 new stores, leaving 15% for upgrades to existing stores. However, in future, more will be spent on older stores. Rona Inc. already makes 5,000 fast moving products available for sale on its website, www.rona.ca. The main purpose of the site, which gets an average of 250,000 visitors per month, is to provide product knowledge and home improvement tips. However, the company has put an online strategy in place that will see the number of online products as much as double over the next two years. Available either by home delivery or through a local Rona dealer, they are mainly smaller seasonal and housewares related products. Lowe's Cos. expects earnings to grow 19%-20% annually over the next two years, while revenues are expected to rise by 18%-19%. The increases will be fuelled by store expansion: the company says it wants to add 130 stores in fiscal 2003 and 140 in fiscal 2004. Menards, the number-three home improvement retailer in the U.S., is rolling out extra-large big box stores. The privately owned company owns 165 stores, but intends to start building 15-20 of the 225,000-sq.ft. stores. Lee Valley Tools, the specialty tool and garden catalogue company, opened its 10th store this weekend, this time in Burlington, ON. The 11th will open in February in Coquitlam, BC. Richelieu's third-quarter sales reached $65.3 million, up 12% over $58.5 million for the same period a year earlier. EBITDA grew 12% to $9.0 million, compared with $8.1 million. Net earnings rose 21% to $5.2 million, up from $4.3 million. For the first nine months, sales were up 15% to $189.2 million, while net earnings jumped 24% to $13.5 million. Sico Inc. has announced its intention to purchase, occasionally, by way of a normal course issuer bid, for cancellation purposes, up to 285,290 common shares, representing 5% of the company's outstanding common shares as of September 26, 2002.
David Campbell has been appointed president of the Lumber and Building Materials Association of Ontario, effective October 7. Campbell has an extensive background in the lumber, building materials and hardware industry. He was with Sodisco-Howden Group for 27 years before moving to Hensall District Co-op as general manager of their retail operations. Most recently, he served as senior account executive with LBMX. (905-625-1084) Warren Parr has joined TSC Stores Ltd. as purchasing manager, to increase efficiencies in TSC's distribution centre. Parr was formerly with the D.H. Howden Division of Sodisco-Howden Group, as director of purchasing there. (519-453-5270)
Okay, you know we don't do product related stuff, but this one really grabbed me. Dutch Boy Paint has introduced a plastic paint container with a twist-off lid and handle on the side for easier pouring. The 3.78-litre Twist & Pour eliminates the need for paint can openers or screwdrivers - and yes, it's recyclable. (Available at Canadian Tire)
The latest survey of buying intentions for potential homeowners has remained relatively stable this year, compared with last year, according to CMHC, with 11% of households polled saying they were thinking of buying a house in the next 12 months. Last year, the rate was 12%. The intentions to buy were highest in Edmonton and Toronto (12%), followed by Vancouver (11%). The lowest rate of buying intentions was posted in Montréal (8%), followed by Halifax (9%). Sales for the wholesale plumbing industry increased a modest 2% from August 2001, according to the Canadian Institute of Plumbing and Heating. The slowdown follows record-breaking increases in June and July. Total August sales declined in all regions but Québec. The plumbing and heating industry is expected to exceed last years total sales of $3.1 billion by at least 3%.
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 ************************************************************************************ SERVICES OFFERED PACE CENTRAL: THE LEADING TECHNOLOGY FOR FACTORY AND AGENCY MERCHANDISERS. · Gain Accountability; Improve Execution · Reduce Costs; Improve Efficiencies · Seamless Communications - Schedules, Calendars, email · All information available on-line, all the time · Merchandisers use state-of-the-art Pocket PC's Visit www.pacecentral.com and contact Bryant Maude at 678.264.2403 to schedule your on-line demonstration. *********************************************************************************** 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
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