vol. viii, #32 September 2, 2002

* BMR announces new distribution centre * Home Depot launches stand-alone nursery * Rona posts record results in 2Q * White Rose relaunches under new structure * McMunn & Yates founder passes away

"The freedom of any society varies proportionately with the volume of its laughter." - Zero Mostel (U.S. comedian)

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Longueuil, QC - Construction is underway by Groupe BMR inc. to expand its distribution centre. The $5 million investment will result in an increase of BMR's hardware distribution facilities to 120,000 sq.ft. and will accommodate 22,000 SKUs. The building materials warehousing will grow to a total of 65,000 sq.ft. The construction is scheduled for completion by the beginning of 2003. It is expected to create 25 permanent jobs. The expansion was made possible by the acquisition of an adjacent 360,000-sq.ft. property, bringing the total of BMR's existing distribution centre and head offices location to nearly one million sq.ft. The improvement was needed in order to maintain and improve service to the co-op wholesale buying group's 120 dealers throughout Québec, Eastern Ontario and Northern New Brunswick. BMR also has a warehouse in Saint-Augustin-de-Desmaures, near Québec City. According to Yves Gagnon, president of BMR, the group wants to provide a full array of hardlines to its dealers. This expanded capacity, he says, will give them the autonomy to do so. "The dealers found it hard to be masters of their own destiny with someone else handling the hardlines supply," he says. Last year, Groupe BMR processed $232 million in wholesale sales, while sales by all its dealers totalled $630 million. A member of the Matreco buying group, it is celebrating its 35th anniversary this year.
Boucherville, QC - Rona inc. recorded its best quarterly performance ever in its second quarter, increasing net earnings by a record 113.1%. Consolidated net earnings for the quarter were $18.3 million, up from $8.6 million last year. For the six-month period ended June 30, 2002, net earnings reached $22.1 million, 93.8% higher than the $11.4 million recorded in the year-earlier period. Rona's net consolidated sales, that is, the total sales at wholesale plus retail sales by its corporate stores and franchises, were $717.8 million in the second quarter, an increase of 50.1%. Net sales for the six-month period reached $1.16 billion, a 58.7% increase over the previous year. This growth in sales is largely attributable to the acquisition in June, 2001 of Revy Home Centres Inc. in Ontario and Western Canada. However, same-store sales were up 9% over the same period in 2001, despite poor weather conditions, especially in May. "Our results show that our recent acquisitions have produced the expected synergies," said Rona president and CEO Robert Dutton in a prepared statement. He remains "cautiously optimistic" about the rest of the year. A number of internal initiatives have contributed to the growth, as well, says the company. These include the renovation of several corporate stores, particularly in Ontario, the expansion of the Rona Lansing in Markham, ON and the opening of its 40th big box outlet, a Rona Home & Garden in Ottawa. Sales by Rona's big box stores in Québec have increased by more than 15% in the first six months of 2002.
Atlanta, GA - Home Depot has entered the commercial landscaping business with the opening of its first Landscape Supply store in the nearby community of Duluth. According to the Atlanta Journal-Constitution, the 37,000-sq.ft. store, devoted solely to lawn and garden and landscaping products, is the latest retail concept from Home Depot, which is currently testing several alternative retail concepts, as same-store sales at its traditional stores begin to flag. The market for lawn and garden is estimated at US$34 billion. Unlike a traditional Home Depot outlet, Landscape Supply will offer outdoor gardening supplies and materials only. While it will be open to the public, it is heavily geared toward contractors, builders and landscape architects. The store offers a greater variety and quantity of live goods at this new location than at a regular Home Depot store. The 12,000-sq.ft. Landscape Supply store has an additional 25,000-sq.ft. of outside greenhouse on a seven-acre site. It features a separate entrance for contractors, with staff designated to deal exclusively with the trades. Two more openings, in Woodstock and Kennesaw, GA, are scheduled for September 12, while another two are planned for the Dallas-Forth Worth, TX area. The company has not disclosed any other locations it has in mind.
One of the industry's outstanding retailers passed away on August 23. Terry Yates was a founder of McMunn and Yates, a chain of home centres based in Dauphin, MB that includes six Do-it centres, a truss plant and a lumber yard. Age 61, he was president of the company at the time of his death. Terry stood out in the industry as a smart, thoughtful retailer whose company continued to expand amidst the emergence of big box retailers in communities such as Winnipeg. In 1992, the Western Retail Lumberman's Association named him "Mr. Lumberman of the Year." He was also a strong supporter and friend of Hardlines. His community activities included the Parkland Regional Health Authority, the Dauphin Lions Club and the Dauphin Men's Curling Club, of which he was a life member. Terry leaves behind his wife Hazel, son Jason and his wife Laura, and daughter Rhea and her husband Paul Chard, plus three grandchildren.
Canadian Tire 33.15 18.50 30.11
Canfor 11.70 8.08 9.51
Emco 12.77 3.71 10.99
Goodfellow 13.99 8.00 12.00
Home Depot 52.60 26.10 32.93
Hudson's Bay 19.40 6.45 7.73
Lowe's Cos. 49.99 24.99 41.38
Sears Canada 25.10 12.50 17.50
Sodisco-Howden 2.20 0.75 1.55
Taiga Forest 7.00 3.75 6.25
West Fraser 44.42 26.14 35.92
"Anything 'Mary-Kate and Ashley' - $4.93-$29.93." A recent release from Wal-Mart Canada advises fretful moms of what is hot in back-to-school accessories. Who knew…
Last week, White Rose Home and Garden Centres held a special relaunch of its newly reformed company. At the same time, it paid homage to decades of tradition that the former company represented before falling into bankruptcy. Earlier last month, the new company, formed by White Rose management, purchase 24 White Rose locations from the receiver, PricewaterhouseCoopers Inc. Seven other stores will be closed. Under the direction of Fern Reeves, White Rose will attempt to position itself to offer "a unique, ever-changing assortment." Profits for Hudson's Bay Co. in its second quarter were $4.7 million, down from the same period last year. Sales were $1.69 billion, down slightly from last year's $1.7 billion. Sales at Zellers were up 0.5% year-over-year, while sales at the Bay stores decreased by 2%. Same-store sales increased 0.4% at Zellers and decreased 5.5% at the Bay, but margins narrowed for Zellers, hurting the company's bottom line. Home Depot's at-home services are taking off, as 2Q revenues for this division grew from US$395 million to US$500 million year-over-year. The company estimates that the "do-it-for-me" market is worth US$180 billion. Home Depot offers installed sales for everything from ceiling fans and windows to kitchen cabinets. Sears Canada has relaunched six former eatons stores as urban Sears stores. It also opened two stores last week: Maisonville department store in London, ON was reopened after a 12,000-sq.ft. expansion, while a brand new store was unveiled at the Rosemere Shopping Centre in Rosemere, Québec. Waters Instruments Inc. had 4Q net sales of $8.5 million, up 55% over the same period a year earlier. Sales for the year reached $25.3 million, a 66% increase. Profit for the year increased by 49% to $1.28 million, from $863,000 in fiscal 2001. Sales at the company's Zareba Systems division, which now represent 77.6% of the company's overall sales, more than doubled in fiscal 2002. Richelieu Hardware Ltd. has signed an agreement in principle to acquire 75% of the shares of Menuiserie des Pins (L.F.) Ltée. The company specializes in products designed for window and door manufacturers currently supplied by Richelieu. Founded in 1946, it has annual sales of $8 million, mostly in Québec. Set to close in mid-September 2002, the transaction is subject to a due diligence.
After three years as executive assistant to Home Depot Canada president Annette Verschuren, Erblin Rexha has been promoted to a position as financial analyst for the retailer … Erblin has been replaced in Annette's office by Andra Matusevicz. (416-609-0852) Rob MacDonald has joined Ace Hardware Canada in charge of store planning and design. His background includes Zellers and Home Depot Canada; he was most recently at The Building Box. (905-475-1188) Pierre Racette has joined National Manufacturing of Canada as vice-president of national accounts and sales. A veteran of both the manufacturing and retail sides of the hardware business, Racette will operate out of National's facilities in Cobourg, ON and report to Bill Medland, president of National. (905-372-9623) At Grant Brothers Sales Ltd., Debbie Lambert has been appointed national accounts manager, Hardware Division, based in Grant Brothers' head office in Mississauga. She will be responsible for leading GBS's sales program to the major retailers and distributors across Canada. (905-852-9930) Bernie Owens has been appointed vice-president of sales for Canada at BPC Westroc, effective September 1. Reporting to Don Moses, senior vice-president, sales and marketing, he will be responsible for Westroc's wallboard and ceiling sales in Canada. (905-823-9881) Dean Albonese has been named national sales manager for Better Living Products of Canada, effective immediately. In his new position, Dean will be responsible for the day-to-day sales management of the Canadian Division with a primary focus on the retail segment of the business. Dean joins the company from GSW Thermoplastics. (905-264-7100) Michael Bennett has joined Reckitt-Benckiser as the regional manager, calling on the likes of Costco, Canadian Tire and Shoppers Drug Mart. (416-201-7480)
Housing starts in Canada are expected to reach a 13-year high of 182,200 units this year. According to CMHC's second-quarter Housing Outlook report, a strong job market, combined with relatively stable mortgage rates, will fuel the rise. Retail sales rose a healthy 1.8% in June to $25.6 billion, following a decline in May of 1.1%. All sectors except drugs and furniture enjoyed an increase. All provinces posted sales gains in June, except Prince Edward Island (-5.6%) and Nova Scotia (-0.2%). Retail sales advances ranged from 0.5% in Newfoundland and Labrador to 3.2% in Ontario. A new study conducted for the Greater Toronto Home Builders Association reveals that 60.6% of all households in Toronto owned their own homes in 1996. That number has grown to 63.8% today, an increase of about 150,000 homes. Low interest rates helped push sales of new homes in the U.S. in July. Single-family dwelling were up 6.7% to a seasonally adjusted rate of 1.017 million last month. July was the first time new-home sales in the U.S. passed the one million mark.
How big is the Canadian hardware/home improvement industry? Which sectors are growing fastest? Know the answers - read the Hardlines Quarterly Report!.... CLICK HERE to find out more!
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