March 21, 2016 Volume xxii, #12

“It is only in adventure that some people succeed in knowing themselves—in finding themselves.”
—André Gide (French author and winner of the Nobel Prize in Literature, 1869-1951)

IN THIS ISSUE:

• Canac continues expansion with push into Montreal area

• Lowe’s will maintain vendor relationships with RONA acquisition

• Coast Distributors celebrates 30 years with new lines, expanded focus

• Home Depot Canada goes upscale with spring collections

• PLUS: TIMBER MART adds to Quebec team, Sears Canada year-end, Renoworks enhances software, Ace Hardware has new ads, U.S. housing starts—and more!

Canac continues expansion with push into Montreal area

L’ANCIENNE-LORETTE, Que. — Canac, the Quebec City-based independent hardware chain, is pouring $100 million over the next five years into expansion in the suburbs of Montreal. It’s even hired a public relations firm, Turbulences, to boost the launch of its first Montreal-area store, opening later this year in Beauharnois, Que.

In December, the company made a bid for a 540,000-square-foot lot in Sorel-Tracy, with a view to installing a store there by the end of this year. Construction on the store in Beauharnois, which is about half an hour from the Ontario border, is slated to wrap this summer. It is the 24th location for the chain known until 2010 as Canac-Marquis Grenier.

Lowe’s will maintain vendor relationships with RONA acquisition

TORONTO — While there’s been much talk about the future of RONA and Ace dealers once Lowe’s takeover of RONA is approved by shareholders and the Canadian Competition Bureau, vendors to both companies have concerns of their own.

But ownership of RONA by Lowe’s will not mean a betrayal of the Canadian vendor community, says Lowe’s Canada President Sylvain Prud’homme. He talked with HARDLINES recently about the commitment he and his company have to maintain existing relationships with both RONA and Lowe’s vendors.

Lowe’s will keep its office in Toronto, but on a smaller scale. Most of the Lowe’s team, including its buyers, are being asked to relocate to RONA’s head offices and distribution centre in Boucherville, Que. Depending on completion of the acquisition, that move could begin as early as July, say some insiders.

But would RONA, which will continue to supply a network of independent dealers, have its own buying team? “It’s too early to say,” Prud’homme admits, noting that details of the integration still have to be worked out. He does look forward to tapping the knowledge and contacts of the RONA buyers. “We’ll have access to the team in Boucherville’s expertise.”

Prud’homme also insists that the Lowe’s Canada buyers are masters of their own domain. “All our decision-making by our merchants is being [made] in Canada. That’s the model we’re taking going forward.”

With the recent addition of Alan Blundell in a newly created role as divisional vice president, merchandising (see our January 18 edition—your helpful Editor), Lowe’s Canada is reviewing its category management and line review processes. Blundell will focus on the vendor community in Canada, working to improve internal practices.

The multiple store formats that Lowe’s will own with the RONA acquisition will provide a growth platform, not just for the retailers, but for vendors, says Prud’homme. He is comfortable with the vendor relationships that currently exist and expects those relationships will continue, both through its bricks-and-mortar locations and online.

Coast Distributors celebrates 30 years with new lines, expanded focus

NANAIMO, B.C. — West Coast hardware distributor Coast Distributors has weathered the ups and downs of Canada’s fickle hardware wholesaling sector to celebrate 30 years in business.

Established in 1986, Coast Distributors began in founder Alex Guy’s backyard garage on Vancouver Island. With a vision to become a complete hardware supply source on the West Coast, Guy steadily built the business—and his team. In 1993, Alex’s brother Scott and brother-in-law Ken opened a second location in Kelowna.

Basing its reputation on “good old-fashioned service,” Coast has grown to become one of Western Canada’s largest independent two-step hardware and building supply distributors. Boasting a team of 10 outside sales representatives in British Columbia and Alberta, the company has since grown to three locations with an office in Vancouver, and offers more than 17,000 SKUs and its own fleet of trucks.

In recent months, it has rounded out its offering with the addition of Reliable Fasteners, filling a niche following the withdrawal of Stanley/National from Canada. Coast has also added rods and shapes from Onward, Madico casters, chair tips, glides, and felts.

Home Depot Canada goes upscale with spring collections

TORONTO ― Home Depot Canada gave the media a sneak preview of its spring outdoor living collections last week, with everything from “English garden” and European-inspired furniture to what the company claims is the largest assortment of Weber barbecues in the country.

Besides the more traditional English styles, furniture design embraced bold “Parisian” styling, with aluminum-framed chairs and tables that look like wood, finished with black and white webbing. And style complemented technology, as Home Depot’s Ego line of outdoor power equipment sported a heavy-duty 18-volt lithium-ion battery, while a portable propane gas oven lets outdoor chefs cook a pizza right in the yard.

Besides product, the event managed to highlight a new Home Depot service: a heavy-duty, four-foot-high nylon bag for soil and stones that can be delivered right to one’s own driveway or front lot.

Furniture, outdoor power equipment, and barbecues were rounded out by decorative accessories, including flameless candles. All the lines are available in stores now.

DID YOU KNOW…?

RETAILER NEWS

TORONTO — Sears Canada reported revenue of $887.6 million in the fourth quarter, a decline of 8.7% from $972.5 million a year earlier. While quarterly net earnings reached $30.9 million, up from a net loss of $123.6 million in Q4 2014, the increase was due mainly to a payout from JP Morgan Chase Bank following the termination of Sears’ credit card business on November 15, 2015. Same-store sales in its Home and Hardlines category fell 5.1%, likely due in part to the closing in 2015 of six of its Home Stores. The company reported that same-store sales in its Outdoor Power Equipment category were also weak, due to unseasonably warm weather. For the fiscal year ended January 31, net revenue dipped to $3.145 billion from $3.43 billion in 2014. Same-store sales for the year were down 2.3%, narrowing the 8.3% drop experienced in the previous year.

ATLANTA ― Home Depot reached a settlement with consumers who filed a suit after the retailer’s 2014 data breach compromised their personal information. Under the terms of the agreement, Home Depot will pay at least $19.5 million to affected customers. It will also establish a $13 million reimbursement fund and pay at least $6.5 million on identity protection services over an 18 month period. The company has pledged to upgrade its data security and hire a chief information security officer in addition to covering legal fees and costs. By agreeing to the settlement, which must still be approved by the court, Home Depot did not admit fault or liability.

OAK BROOK, Ill. — Ace Hardware has launched a new advertisement campaign. Created by Chicago advertising agency O’Keefe Reinhard & Paul, it leverages the signature “Ace is the place with the helpful hardware folks” jingle, featuring real-life Ace owners and associates and actual Ace customers.

SUPPLIER NEWS
CALGARY ― Renoworks Software has announced the launch of a visualization software for contractors and interior designers. Renoworks Pro is a software-as-a-service product that allows users to create professional designs of interior and exterior remodel projects. With the program, remodel contractors and interior designers can now easily customize a visualizer at their website to support sales and marketing efforts. By leveraging Renoworks’ building products image libraries, Renoworks Pro offers remodelers a selection of products from over 250 leading manufacturer partners. CEO Doug Vickerson called the launch “a significant milestone for the company.”

PEOPLE ON THE MOVE
TIMBER MART has announced the addition of two industry veterans to its recruitment team in Quebec. Berchmans Vignola and Ronald Dion join TIMBER MART as membership development managers and will be responsible for building the group’s membership in the province. Both have more than 40 years of sales experience in the building materials industry. For more than 15 years they were territory managers for CertainTeed Saint-Gobain in Quebec. The appointments “reflect our group’s commitment to the Quebec independent market and our aim to grow our membership in the province,” said TIMBER MART president Bernie Owens.

ECONOMIC INDICATORS
Retail sales rose 2.1% to $44.2 billion in January. Gains were reported in seven of 11 sub-sectors, representing 82% of total retail sales. Sales at building material and garden equipment and supplies dealers rose by 3%, the sixth consecutive month of gains. The main product type sold in this sub-sector is lumber and other building materials, accounting for about 40% of sales. (StatCan)

U.S. housing starts in February rose by 5.2% from the previous month and 30.9% from the same time last year. Privately-owned housing units broke ground at a rate of 1.178 million units. Building permits, at a rate of 1.167 million, represented a decline of 3.1% from January but an increase of 6.3% from last February. Housing completions, at just over one million, fell 4.2% monthly while climbing 17.5% year over year. (U.S. Commerce Dept.)

OVERHEARD
“There’s no way we’re not going to be aggressive in how we grow.” —Sylvain Prud’homme, president of Lowe’s Canada, on the opportunities for both retailers and vendors to increase their sales with the acquisition of RONA.

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