November 2, 2015 Volume xxxiv, #41

“The difficulty lies not so much in developing new ideas as in escaping from old ones.”

IN THIS ISSUE:

• Castle’s Ken Jenkins stakes future of industry on independents

• TIM-BR MART dealer wins eBay award for e-commerce excellence

• Housing starts expected to moderate in 2016

• Best Buy invests heavily in smart home products

• PLUS: Wansbrough family expands site, Lowe’s names Vendor Partners, Masco results, CanWel’s Q3, Hudson’s Bay introduces discount fashion, retail sales forecast, Newell Rubbermaid completes Elmer’s acquisition —and more!

Castle’s Ken Jenkins stakes future of industry on independents

TORONTO ― Anybody who still wonders why so much of this industry remains in the hands of independents needed only to listen to a recent presentation by Ken Jenkins, president of Castle Building Centres Group Ltd.

In an era when other sectors have consolidated so heavily, said Jenkins, independent hardware and building materials dealers can stay ahead of larger businesses that get bogged down by layers of red tape, endless meetings, and processes that prevent fast decision making. “The most dynamic, the most effective, the most profitable people in this industry are the independents,” he said.

Jenkins was speaking last month at the 20th annual Hardlines Conference. Before an audience of almost 200 retailers, wholesalers, and vendors, he expressed his belief that the continued corporate investments that have resulted in so many takeovers in recent years will slow down. “The largest consolidation in coming years will be independents buying up other companies.”

TIM-BR MART dealer wins eBay award for e-commerce excellence

VAUGHAN, Ont. — The driving force behind the online sales growth at LumberMart TIMBER MART in Dartmouth, N.S., has won eBay Canada’s Exporter of the Year Award for 2015. LumberMart’s Online Sales and Marketing Manager Kimberley Wotherspoon managed to increase online sales by more than 1,000% since she started there a year ago—with more than 60% of those sales being shipped around the world to countries like Australia, the UK, Sweden, Norway, Italy, France, and the U.S.
 
The eBay Entrepreneur of the Year Awards recognize Canadian entrepreneurs who harness e-commerce opportunities to build their business through three individual awards: Entrepreneur of the Year, Exporter of the Year, and Made in Canada Entrepreneur.

“It is an honour to be recognized by eBay Canada as the Exporter of the Year in their annual Entrepreneur of the Year Awards,” says Wotherspoon. She adds that the platform “allows businesses of any size to remain competitive in the global retail world through e-commerce.”

“We’re extremely proud of Kimberley and the LumberMart staff who’ve introduced ecommerce to their business and leveraged it so effectively,” says Bernie Owens, president of the TIM-BR MART Group. “They are a great example of how independent entrepreneurs can use ecommerce in tandem with brick-and-mortar selling to be successful in today’s retail landscape.”

Housing starts expected to moderate in 2016

OTTAWA — Housing activity is forecast to slow down in 2016 and 2017, reports Canada Mortgage and Housing Corporation in its latest Housing Market Outlook.

“In 2015, increased housing market activity in provinces like Ontario and British Columbia―provinces that have benefitted from declining energy prices, a lower Canadian dollar and continued low mortgage rates―offset slowdowns in oil-producing provinces like Alberta,” said Bob Dugan, CMHC chief economist. “We expect, however, that this counterbalancing effect will decrease over time. As such, housing starts and MLS [multiple listings of existing homes] sales are projected to moderate in 2016 and 2017.”

CMHC expects new home construction to slow down in the coming years as high levels of completed but unsold condo units will encourage some builders to sell off existing inventory.

House price growth is expected to slow down as MLS sales will favour moderately priced homes.

For 2015, housing starts are expected to range between 162,000 and 212,000 units in 2015, with a point forecast of 186,900 units. For 2016, housing starts are forecast to range from 153,000 units to 203,000 units, with a point forecast of 178,150 units. Looking out to 2017, CMHC expect starts to range between 149,000 and 199,000 units, with a point forecast of 173,650 units.

Best Buy invests heavily in smart home products

TORONTO — Best Buy Canada hosted an event last month in Toronto, showcasing 13 different smart home suppliers, with products ranging from entry locks and surveillance cameras to smart LED light bulbs.

The setting for the event was a home in Toronto’s Leslieville neighbourhood. The owner opened up his house to the company, which dispersed 60 smart home devices from the various suppliers throughout the home’s four floors.

Zayn Jaffer, the director of emerging businesses for Best Buy Canada, says smart home technology is something the company is really focusing on. “It’s a category that continues to double in every direction,” says Jaffer. “We’ve got a lot invested in it.”

The majority of the devices showcased work with Nest, which is a producer of programmable, self-learning, sensor-driven, wifi-enabled home automation products. Many, such as garage door openers from Chamberlain to the new Nest Learning Thermostat, are also controllable through mobile apps.

One common characteristic of all the devices is giving homeowners peace of mind—whether their major priorities are safety, security, or environmentalism. From viewing video footage of your garage or entryway to ensure their kids get home from school, to smoke detectors that can tell you specifically where the smoke is coming from, the smart products don’t just talk to each other, they’re designed to make things as easy as possible for the end user.

FROM THE ARCHIVES: This week in 1995

The sluggish economy continues to take its toll exactly two decades ago. IRLY Distributors puts office expansion plans on hold and CMHC reports ongoing slow housing starts. Plus: RONA begins a TV ad campaign to promote its big box stores in Quebec. Click here to read these blasts from the past!

DID YOU KNOW…?

RETAILER NEWS

VICTORIA — The Wansbrough family’s 3.85 acre site in Colwood, B.C., has come a long way since 40 years ago, when an 11-year-old Lloyd Wansbrough hawked refreshments for the opening of his father Bill’s hardware store. The Victoria Times-Colonist reports that the retail complex, which also includes a Lee Valley Tools, a rental apartment block, and a plethora of restaurants and other businesses, is also to be the site of the town’s first hotel. An 80-room, $11 million Holiday Inn Express will open its doors November 2, and reservations are already rolling in. The hotel, yet another example of the growing trend toward live-work spaces, is being developed by Westridge Lodging with Wansbrough as franchise owner.

MOORESVILLE, N.C. ― Lowe’s has named Hitachi, Pergo, and Sunrise Global as the company’s 2015 Vendor Partners of the Year. The companies were selected for their commitment to product quality, innovation, and customer service. Hitachi has an exclusive relationship with Lowe’s, while Pergo developed several exclusive flooring programs for Lowe’s. Continued collaboration with Sunrise Global has resulted in a line of 40- and 80-volt cordless outdoor power equipment.

TORONTO — Hudson’s Bay Co. is introducing a discount fashion chain in an effort to reach bargain-seeking younger shoppers. Find @ Lord & Taylor will carry name-brand designs at prices of up to 70% off, competing with banners like Zara and H&M. The company said the stores will offer footwear and home furnishings as well as clothing. The first Find store will open in Paramus, N.J., in the coming month, and five more outlets are slated for next year.

SUPPLIER NEWS
VANCOUVER — CanWel Building Materials saw third-quarter revenues rise by 9% to $247.4 million compared to last year, largely due to the acquisition during the quarter of California Cascade Industries. Gross margins increased by 18% to $32.4 million, while EBITDA was up from $12 million to $12.6 million. Gross margin percentage also increased to 13.1% of revenues versus 12.1% in the previous period.

TAYLOR, Mich. — Masco Corp. reported an increase in its bottom line to $115 million, compared to $97 million in Q3 of 2014. Revenue inched up by 0.5% to $1.84 billion. The results represent a 26% growth in earnings, while the operating margin of 14% is the company’s best for a third quarter since 2007. Gains in cabinetry exceeded expectations, while the plumbing yielded strong sales, especially in the trade channel.

ATLANTA ― Newell Rubbermaid has completed the acquisition of Elmer’s Products, Inc. from an affiliate of Berwind Corporation, a family-owned investment management company. Elmer’s, whose brands include Elmer’s, Krazy Glue, and X-Acto, is projected to deliver approximately $240 million of net sales in 2015.

PEOPLE ON THE MOVE
 The Western Retail Lumber Association has announced Victor Lemieux, past president of Econo Lumber, as the recipient of its 45th annual Industry Achievement Award. The award has recognized WRLA members who contribute to the industry, the association, and their communities, since 1970. Lemieux, who founded Econo Lumber, then grew it into a 75,000-square-foot store on 8.5 acres in Prince Albert, Sask., said he was “honoured and very excited” to be selected. The award will be presented during the 2016 WRLA Buying Show’s Awards Banquet on January 21 in Calgary.

ECONOMIC INDICATORS
Retail sales in Canada are beginning to slow down after two years of accelerating growth, according to analyst Ed Strapagiel. After reaching its peak in April, the trend has been underperforming, with more of the same likely ahead. Projections to the year’s end suggest a weak holiday season for store merchandise, which is highly dependent on Christmas sales. Some sectors, however, continued to see above-average gains, including home furnishings.

OVERHEARD…
“It’s up to everyone in this room to engage and attract young people into this industry.” —Ken Jenkins, president of Castle Building Centres Group. He spoke recently at the 20th annual Hardlines Conference.

OUT AND ABOUT
Our Publisher Beverly Allen and Managing Editor Sigrid Forberg are off to the BMR buying show in Quebec City later this week.

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