August 10, 2015 Volume xxi, #31

“The toughest adversary is myself. The competition is first of all with myself.”
—Hugo Girard (Quebec strongman and six-time winner of Canada’s Strongest Man competition, and speaker at the upcoming Hardlines Conference, 1971- )

SUMMER PUBLISHING SCHEDULE

There will be no weekly edition of HARDLINES on August 3, 17, or 31. The World Headquarters will remain open, however, during this time as we gear up for our incredible 20th Anniversary Hardlines Conference. The regular weekly schedule will resume September 7.

IN THIS ISSUE:

• Lowe’s hires supply chain VP; plans DC expansion

• Leadership a key theme of upcoming Hardlines Conference

• Feds promise permanent reno tax credit

• Canadian Tire provides sneak peak of Christmas lineup

• PLUS: PrimeSource to exit Canada, Lowe’s takes Manhattan, Canadian Tire adopts Google app, Kingfisher reports second quarter, CanWel holds steady, Bemis reports earnings, Tembec’s results —and more!

Lowe’s hires supply chain VP, plans DC relocation

TORONTO — With 39 stores already and another 14 planned for the next 10 to 18 months, Lowe’s Canada is beefing up its supply chain. That includes a new, larger distribution centre—and a new executive to oversee that side of the business. Gregor Stuart has joined as vice president, supply chain, a newly created position. He will be responsible for overseeing the supply chain function and distribution centre for Lowe’s Canada.

Stuart previously held various senior roles in logistics and supply chain at Loblaw, Hudson’s Bay Company, and Canadian Tire. He was most recently with The Bargain! Shop.

Lowe’s has also announced it will move its distribution facilities in Milton, Ont., just west of Toronto. Part of the company’s recent acquisition of 12 former Target sites included Target’s own distribution centre, which is also in Milton. Currently in a 635,000-square-foot facility, Lowe’s relocation to the former Target site will give it 1.3 million square feet, more capacity to better serve its growing number of stores in this country. Lowe’s expects to move to the new DC in November 2015.

Leadership a key theme of upcoming Hardlines Conference

TORONTO ― Understanding where the home improvement market is headed will be the focus of the upcoming Hardlines Conference, which celebrates its 20th anniversary this year. But a Canadian strongman and an American former retail executive will offer their own unique perspectives.

The event, which will be held October 21 and 22 at the Westin Bristol Place Toronto Airport Hotel near Toronto Pearson International Airport, will feature some of the industry’s top thought leaders. It will also be the forum for the “Profiles in Leadership” series, which showcases first-person accounts of personal and professional achievement.

In this series, you’ll hear from Joe Scarlett and Hugo Girard. Joe Scarlett held leadership roles at Tractor Supply Company from 1979 until his retirement in 2007. He played a key role in the initiative to return the company to profitability through improved customer service and focused product selection as part of a classic leveraged buyout in 1982.  Joe also led the successful 1994 effort to take the company public and during his 10-plus years as CEO, the company’s revenues quadrupled and the price of its stock increased 10-fold. Today, as a founder of The Leadership Institute, he is passionately committed to improving business leadership skills—with a strong emphasis on ethical behaviour.

Hugo Girard is a Canadian strongman. Although beloved as a folk hero in his native Quebec, his achievements are international. They include a Strongman Super Series world champion, winner of North America’s Strongest Man, a four-time World Muscle Power champion, and he was Canada’s Strongest Man for six years in a row. Girard is a policeman in Gatineau, Que., and a spokesperson for causes that aid sick children. He is also the spokesperson for Quebec-based retailer BMR.

Delegates at the 20th annual Hardlines Conference will learn from both these individuals about the qualities of determination, vision, ethics—and heart.

Feds promise permanent reno tax credit

OTTAWA ― Just days after calling a federal election, the Conservative government has said it will re-introduce a popular tax credit for home renovations. The Home Renovation Tax Credit was first introduced in 2009 as the country was still recovering from the worldwide recession of a year earlier. It lasted for just one year, and let homeowners get a tax credit of up to $1,350 on materials and labour up to $10,000.

At the time, the tax credit was lauded for giving a tangible boost to home improvement sales and for helping discourage the underground economy, which is considered prevalent in renovation contracting.

The new tax credit would apply to home renovations costing between $1,000 and $5,000.

The Quebec building materials association, AQMAT, welcomes Prime Minister Stephen Harper’s pledge to introduce a permanent tax credit for home renovations, while warning against possible adverse effects. According to AQMAT President Richard Darveau, the proposed program would provide incentives for homeowners to hire contractors, but its usefulness is undermined by a cap on the eligible amount of $5,000―half the limit of the previous tax credit.

Canadian Tire provides sneak peak of Christmas lineup

TORONTO — At its annual “Christmas in July” event last month in Toronto, Canadian Tire revealed its holiday season products for 2015. In addition to the “Gifts for the DIYer” they’re promoting this year—including the Rockwell Sonicrafter oscillating tool that sands, grinds, and cuts, and several products from the house Maximum brand—the company has expanded its exclusive holiday style and décor brand, Canvas.

This Christmas season’s colour is arctic teal, which Tracy Platt, design manager with Canadian Tire, says has a “nice, snowy feel to it.” The teal theme was picked up, along with white and silver, in the Canvas table setting, complete with plates, silverware, glasses—and was especially evident in the various tree decorations and trees themselves. Platt adds that it pairs well with white, navy, and metallics like gold, silver, and copper.

With a mix of both real and artificial trees on display, there was an emphasis on how life-like Canadian Tire’s artificial trees appear. The company even designed an app, “Timber”, for the event—modeled on the dating app Tinder—that challenged players to guess whether photos of trees were real or artificial.

Another corner of the space was set up for event-goers to view all of Canadian Tire’s inflatables—from Santa and his sleigh, to a 9-foot tall Olaf from the Disney’s Frozen—in virtual reality. With goggles and a hand-held controller, users were able to view the items inflated and within the context of a winter setting both during daytime hours and at night.
It’s a technology inspired by Canadian Tire’s innovation hub in Kitchener, Ont., and is currently using at its flagship store in Edmonton, Alta., to help customers design their patios. “Selling these big things in store is hard, we have a 9-foot tall inflatable in here, how do you show that without having a huge space?”

Haney adds they’re currently gathering feedback from the Edmonton store and as the content and technology develops and becomes more realistic, Canadian Tire may find more ways to take advantage of virtual reality in its stores.

FROM THE ARCHIVES: This week in 1995

Murray Bozniak, who once headed Beaver Lumber, gets appointed VP merchandising for Home Depot Canada. Lansing Buildall’s third employee, Orville Black, retires after 44 years with the Toronto-area building supply chain. Only Micky Cohen, CEO of parent company Molson, made more money in 1994 than Beaver Lumber president Ralph Trott. Click here to read these historic nuggets from our industry’s past!

DID YOU KNOW…?

…which home improvement retailer moved into first place as this country’s largest? Or which provinces have seen their market share grow in 2014? Information about the top home improvement retailers and buying groups, including market shares, year-over-year growth, and forecasts for 2015 and 2016, are all part of the Hardlines Retail Report, available now!

RETAILER NEWS

OTTAWA — Some of this industry’s leading retailers and vendors are the recipients of this year’s Energy Star Market Transformation Awards. The companies were recognized for efforts to improve energy efficiency. Canadian Tire takes the Sustained Excellence category, while Home Depot Canada was named Retailer of the Year. Manufacturers of the Year are Globe Electric (in the Lighting category) and All Weather Windows (Windows and Doors).

TORONTO — Canadian Tire is one of the first North American retailers to get on board with Google Now, a “context-aware” app that offers custom information to users based on their location. Canadian Tire’s electronic information cards will serve as a “mobile storefront,” providing basic information on hours, return policies, and how to contact stores. The program, which is still in beta testing, works on the same principle as Google Maps or iPhone pins.

MOORESVILLE, N.C. — Lowe’s is opening two stores in Manhattan by year’s end, one on Broadway in the Lincoln Square neighbourhood and the other in the Flatiron district near Madison Square. Both stores will be approximately 30,000 square feet and will aim to offer products and services that are locally relevant to customers, including appliances in a variety of sizes, home organization and storage products to maximize space, and home decor and accessories. Most items will be in-stock and many will be delivered from Lowe’s New York area stores.

LONDON — UK home improvement retailer Kingfisher plc reported that second-quarter sales were up 4.8%, while same-store sales were up 3.5%. Véronique Laury, Kingfisher's Group CEO, said: “We have delivered a solid Q2 sales performance to date across all our major businesses, albeit against softer comparatives than in Q1.” She added that the company has returned £138 million ($279 million) to shareholders via a share buyback since the year-end.

SUPPLIER NEWS
MISSISSAUGA, Ont. — PrimeSource is pulling out of Canada effective October 15. The major supplier of fasteners informed its key Canadian customers of its intentions last week. PrimeSource currently has five distribution centres in Canada. It closed a facility in Winnipeg late last year.

VANCOUVER — CanWel’s Q2 revenues were little changed from last year at $224.5 million, compared to $225.9 million. The slight drop was mainly attributed to market conditions. Gross margin amounted to $26.8 million, compared to $27.7 million during the corresponding period in 2014. Net income amounted to $6.1 million during the quarter, compared to $6.9 million last year.

MIDDLETON, Wis. — Spectrum Brands reported that third-quarter earnings fell 42% on higher expenses stemming from the consumer-products company’s recent acquisitions and other one-time items during the period. The company reported a profit of $44.9 million, down from $78 million a year earlier. Revenue increased nearly 11% to $1.25 billion. Excluding currency fluctuations and acquisitions, sales grew 3.7%.

MONTREAL — Tembec saw consolidated sales fall to $365 million, from $404 million in the corresponding period last year. The company generated a net loss of $16 million compared to net earnings of $30 million in the previous Q3. The current results include approximately $12 million of incremental costs related to planned major maintenance conducted at two large operating sites. Adjusted EBITDA was $2 million, as compared to $30 million a year ago and $12 million in the prior quarter.

TAYLOR, Mich. — Masco’s quarterly profits of $105 million exceeded Wall Street forecasts, but revenues fell short of expectations. The maker of Behr paint, Delta faucets, and other building products posted revenue of $1.93 billion in the period.

NEW BRITAIN, Conn. — Stanley Black & Decker saw Q2 sales exceed analyst expectations with net sales of $2,866.9 million, a rise of approximately of 0.2% over a year ago. Organic revenues rose 8%, but were offset by an equal adverse impact from foreign currency translation movements. Tools & Storage represented the bulk of the quarter’s sales, accounting for 64.2% of net revenue for the period.

NEENAH, Wis. — Bemis reported earnings of 67 cents per share, 11.7% higher than a year ago. U.S. packaging sales netted $694.7 million, a 4.3% drop, as a decline of 5% in unit volumes was partially offset by an increase in sales price and mix. Global sales of $335.6 million represented a decrease of 9.7%, compared to Q2 in 2014. Gross profit as a percentage of net sales improved to 21.5% in the second quarter, compared to 20% in the prior Q2.

PEOPLE ON THE MOVE
Ed Parkes has retired from EAB (formerly Exchange-A-Blade) after eight years with the company as regional sales manager for Ontario, Manitoba, and Atlantic Canada. He has been replaced by Rick Byers, who joins as new regional sales manager. He was formerly director of sales at Peak Installations.

ECONOMIC INDICATORS
U.S. construction spending during June was estimated at a seasonally adjusted rate of $1,064.6 billion, 0.1% above May’s $1,063.5 billion. The June figure is 12% above the June 2014 estimate of $950.3 billion. During the first six months of this year, construction spending amounted to $482.7 billion, 8% above the $446.8 billion for the same period in 2014. (U.S. Census Bureau)

NOTED
Second-quarter sales for Acklands-Grainger in Alberta were down 18% versus the prior year. The province represents more than one-third of the industrial supplier’s business. 

spoga+gafa trade fair takes place August 30-September 1 in Cologne, Germany, and includes a new Day of the Garden event.

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