| 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 |
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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."
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| 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. |
| HOME HARDWARE LAUNCHES DEALER NET SITE |
| 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. |
| HARDLINES CONFERENCE SERIES |
| 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 |
| COMPANY |
52-WEEK HIGH |
52-WEEK LOW |
CLOSE (FRI.) |
| 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 |
|
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| COMPANIES IN THE NEWS |
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. |
| PEOPLE ON THE MOVE |
| 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) |
| NOTED… |
| 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) |
| MARKET INDICATORS |
| 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%. |
|
vol. viii, #36 September30, 2002
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
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