| CONFERENCE COUNTDOWN: |
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Rub shoulders with Canada's top home improvement retailers. Register now for the Hardlines Conference Series, September 12-13, at the Four Points Sheraton near the Toronto International Airport. Click here for more information! For a hotel room, you must call: 905-624-1144. They still have some rooms available, but the rate has gone up.
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| RONA BEEFS UP FRONT END IN CASHWAY STORES |
 Toronto, ON - Remerchandising, more hardlines and cleaner yards are just some of the initiatives under way for Rona's Cashway acquisition. The 60 stores throughout Ontario are in the process of being refurbished, with about a dozen completed already this year. Stores that have been upgraded recently include Milton, Niagara Falls and Huntsville.
According to Rob Wilbrink, vice-president operations and development for Rona Ontario, the company plans to work its way right through the chain and upgrade all the stores eventually. The fresh look includes new racking, better merchandising and increased assortments of hardlines. "We're putting more focus on the back end and we're now bringing in more retail oriented people from the Lansing side," says Wilbrink. "The hardlines products are good for margins and support the building materials side."
Another strategy for bringing the Cashway stores up to Lansing standards is their conversion to Omni, from a near-obsolete Tomax system. This will enable the Cashway stores to interface with the rest of the Lansing and Revelstoke stores, which operate on a platform by JDA.
Overall, Wilbrink is confident about the future of the former Cashway stores. "There's a lot of strength within the organization in terms of local management and their involvement in the community. Turnover at the Cashway stores is very low, and we have staff in many of them that have been there for a lot of years."
However, as Rona consolidates its Lansing and former Revy stores in Ontario, the Cashways in Burlington, Stoney Creek, Ajax and Nepean had to be shuttered. A store in Ilderton, northeast of London, is currently in the process of being shut down, as well. Other stores, such as one in Windsor, which is right down the road from the Building Box there, will be left intact for future evaluation. |
| HOME DEPOT COMBINES TWO MORE DIVISIONS |
| Atlanta, GA - Exactly one year after announcing it will drive up to 80% of its buying out of head office, Home Depot continues to centralize with the consolidation of more divisions into Atlanta. Its Mid-Atlantic division, based in South Plainfield, NJ, will be rolled into the Atlanta-based Southeast division to form the new Eastern division.
The new division will serve 450 stores and have 90,000 employees. The change leaves Home Depot with eight divisions instead of nine and helps improve operating efficiencies, chairman and CEO Bob Nardelli said in a prepared statement.
Tom Taylor, president of the Southeastern division since January, will lead the combined operation. John Wicks, president of the Mid-Atlantic division, will join the merchandising team.
Home Depot closed its Northeastern U.S. buying office last fall and combined two divisions back in January. A new unit to service stores in the U.S. Southeast and Caribbean was formed in January 2002 by closing the Southern division in Tampa, FL and rolling it into the Atlanta-based Midsouth division. At that time, Taylor was put in charge of the division. |
| RONA REORGANIZES SHAREHOLDER STRUCTURE IN CASE OF IPO |
| Boucherville, QC - The meeting took only seven minutes. Rona's management met last Thursday with the dealer/owners and other shareholders to approve new by-laws, marking another step in the retailer's eagerness to go public.
The changes were adopted so Rona's structure would be better suited to participate in capital markets. The by-laws adopted last week affect the procedures for sending notices of meetings to the holders of common shares. Those notices will be repealed, those types of common shares will disappear in the event of a public offering.
The quorum to hold a shareholder meeting will be reduced from one-third to 20% of the shareholders of outstanding voting shares, which brings it more in line with general practices on the Canadian markets.
Finally, directors will no longer be differentiated as either outside directors, inside directors or merchant shareholder directors. All directors will be recognized on the same footing.
The modifications will take effect immediately on going public, and the deadline for this is the end of 2005. According to Rona spokesperson Sylvain Morrisette, the company recognizes two windows of opportunity for an IPO: between July 2004 and December 2004, or between July 2005 and December 2005. "But these are not the only periods. we can go anytime. It depends on the market and on the decision of the board." |
| COMPANY |
52-WEEK HIGH |
52-WEEK LOW |
CLOSE (FRI.) |
| Canadian Tire |
33.15 |
18.50 |
31.75 |
| Canfor |
11.70 |
8.08 |
9.50 |
| Emco |
12.77 |
3.71 |
10.59 |
| Goodfellow |
13.99 |
8.00 |
11.80 |
| Home Depot |
52.60 |
26.10 |
33.25 |
| Hudson's Bay |
19.40 |
6.45 |
7.83 |
| Lowe's Cos. |
49.99 |
24.99 |
44.03 |
| Sears Canada |
25.10 |
12.50 |
17.60 |
| Sodisco-Howden |
2.20 |
0.75 |
1.75 |
| Taiga Forest |
7.00 |
3.75 |
6.25 |
| West Fraser |
44.42 |
26.14 |
33.57 |
| OVERHEARD… |
| "You will see a shift in capital spending away from new stores to refurbishing our old stores." - Carol Tome, CFO of Home Depot in Atlanta, commenting in a recent release about Home Depot's plan to invest in renewing and updating its older stores, while slowing development of new stores. |
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| COMPANIES IN THE NEWS |
| At Sears Canada, total revenues for August decreased 4.3% to $435.3 million, from $454.7 million for the same period last year. Merchandise sales decreased 7.2% and same-store sales decreased 9.7%. Seasonal clearances were soft for the month, while the conversion of Eatons stores had an additional impact on sales. In addition, eight large Sears stores are undergoing major renovations. However, catalogue, internet, lawn and garden, and home improvement sales were all up.
Facing the realities of a maturing marketplace and aging stores, Home Depot 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.
Wal-Mart saw net sales in August reach US$18.37 billion, up 11% from US$16.53 billion a year earlier. However, same-store sales rose only 3.8%, below the company's own forecast of between 4% and 6%. Hot weather in the Northeast slowed things a bit. At the Wal-Mart division, same-store sales rose 4.3% and total sales climbed 12% to US$11.78 billion. Same-store sales at the Sam's Club warehouse division rose 1.1%, while its total sales increased 6.8% to $2.38 billion.
Costco Wholesale Corp. reported net sales of US$3.01 billion for the four weeks ended September 1, 2002, an increase of 10%. For the fiscal year, net sales rose 11% to US$37.98 billion from $34.14 billion.
A lawsuit in Rhode Island is the first to try and hold paint manufacturers accountable for lead poisoning. Eight companies have been cited in the suit, which has been filed by the state 25 years after lead paint was banned there as a health hazard. |
| PEOPLE ON THE MOVE |
| Denis Lanoë joins CanWel as general manager, Atlantic Region, effective September 9, 2002. He has more than 10 years of experience in supply chain management, with strengths in conceptual and analytical thinking. Prior to joining CanWel, he spent four years at Sobeys Inc. as distribution manager, Atlantic Canada and Ontario, and then as manager, produce category management. Lanoë is based in the Dartmouth customer service centre.
Mike Frame has been appointed development manager for the Central region for Rona Ontario. He was formerly at D.H. Howden. (416-241-5129) |
| MARKET INDICATORS |
| Reversing two consecutive months of declines, the value of building permits increased 3.0% to $4.0 billion in July. Residential intentions reached $2.4 billion in July, up 6.2% from June, due entirely to multi-family permits. Single-family construction intentions retreated for a third consecutive month. In July, 18,250 new dwellings units were authorized. Year over year, the residential sector recorded a 34.2% gain, whereas the non-residential sector was down 7.9% from the same period in 2001.
Mortgage rates continue to come down, by up to a quarter of a percentage point. TD lowered its short-term rates (one-year open and one-year closed mortgages) by a tenth of a percentage point. TD's new one-year open rate falls to 6.1%, while the one-year closed moves to 5.30%. All terms from two years to 10 years were trimmed by .25 percentage points. The new five-year closed mortgage rate at TD is 6.70%, even less than last week's rate of 6.80% for a five-year mortgage. Scotiabank lowered all its mortgage terms from six months to seven years by a quarter of a percentage point. Scotiabank's one-year open mortgage is now 5.90%, while its five-year closed mortgage has a posted rate of 6.65%.
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****HARDLINES MARKETPLACE****
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https://hardlines.ca/html/classifieds_new.asp
HELP WANTED
PRODUCT MANAGER
Are you a Merchant at heart? Due to their growing list of successes with Customers on both sides of the border, our Client, a long-established, yet entrepreneurial manufacturer needs to add a marketing performer to assist in continuing their transformation to a market and category driven leader. You’ll be responsible for sourcing, developing and bringing to market a continuous stream of new products to complement over 2000 current skus. This involves true category management including sku reviews, packaging and merchandising, ad agency liaison, and new product development involving travel to the company’s offshore manufacturing facilities. Achieving market penetration, profitability targets and classic consumer products product management are your goals in this excellent career opportunity.
You can demonstrate successes in new product development, speed-to-market turnaround and the ability to transform concepts into reality. You may be a Retailing Merchant looking to move “to the other side”, or currently be a consumer products Product Management wizard. Montreal-based; relocation assistance will be provided if required.
Please contact Wolf Gugler in complete confidence, quoting file number C-14.
Wolf Gugler & Associates Limited, 1370 Don Mills Road, Suite 300, Don Mills, Ontario M3B 3N7 Phone: (416) 386-1719. Email: resumes@wolfgugler.com Web site: www.wolfgugler.com
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STORE MANAGER
The company; a well-established and respected Northern Ontario home improvement retailer. Largest lumberyard for many miles around, new signage, etc. A very visible and well-respected community citizen with strong Retail and Contractor businesses.
The Manager is responsible for maximizing sales and ensuring the effective operation of all store activities including Operations, Customer Service, Marketing, Merchandising and Human Resources. The Manager further provides leadership and management expertise to Employees and serves to project the company's philosophy and image through excellent customer service.
You must have proven leadership abilities including outstanding interpersonal and communication skills, a firm commitment to customer service and experience in an LBM store environment. Bilingual abilities are an added asset.
Here's a great opportunity to demonstrate your talents in a community of >50,000 where outdoor enthusiasts abound. Please contact, in confidence, Wolf Gugler, quoting file C-16. Wolf Gugler & Associates Limited, 1370 Don Mills Road, Suite 300, Don Mills, Ontario M3B 3N7 Phone: (416) 386-1719 Email: resumes@wolfgugler.com
Web site: www.wolfgugler.com
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vol. viii, #33 September 9, 2002