April 11, 2016 Volume xxii, #15

“A good traveler has no fixed plans and is not intent on arriving.” — Lao Tsu (the “Old Master,” ancient Chinese philosopher and author of the Tao Te Ching, ca. 4 BC)

IN THIS ISSUE:

• Orgill, Ace, U.K. futurist to headline Hardlines Conference—at new location

• Canac plans huge growth in Montreal-area markets

• Lee Valley Tools hones customer experience in its latest stores

• Castle sees growth with independents in Atlantic market

• PLUS: Home Hardware adds stores in Quebec, HBC posts big increase, Sears completes lease-back, executive changes at Jeld-Wen and Alexandria, Roxul strikes gold, Dollarama ups price, Costco —and more!

Orgill, Ace, U.K. futurist to headline Hardlines Conference—at new location

WORLD HEADQUARTERS, Toronto — The 21st edition of the Hardlines Conference will feature some the world’s top retail executives and experts from around the world—including one of the most powerful individuals in Canadian hardware wholesaling today. With the theme, “Renovating the Art of Retail,” the industry’s brightest minds and biggest players will once again present their ideas and insights, but in a fresh, new location, in Niagara Falls, Ont.

The conference, from October 18 to 19, will feature Ron Beal, president of Orgill Inc., the Memphis-based hardware wholesaler which owns Orgill Canada Hardlines. Beal will provide an update on Orgill’s expansion in Canada and offer insights into the conversion of Chalifour to Orgill Canada and how it will affect dealers and vendors alike.

Another big name in hardware wholesaling is Ace, which in Canada falls under Ace’s International Division. This year’s conference will host Jay Heubner, president and general manager of Ace International.

Bringing his international expertise and perspective, Ibrahim Ibrahim, the retail futurist from the U.K., has been confirmed to return to the Hardlines stage. A favourite among attendees, he had to cancel his visit last year at the last minute. But he’s coming back with more insights into how the world of retail is evolving worldwide.

Aron Gampel, vice president for Scotiabank Economics, is another speaker who’s been invited back after a resounding reception last year. Gampel will provide a thoughtful—and accessible—explanation of the economic and housing factors affecting the economy and the retail home improvement industry.

Rounding out our lineup so far is Dan Tratensek, vice president of publishing for the North American Retail Hardware Association. A dynamic and engaging speaker, he will share some of the NRHA’s latest research on the trends and challenges confronting dealers in the U.S., conditions that are sure to resonate for Canadians!

The 21st annual Hardlines Conference will be held at the Sheraton on the Falls Hotel in Niagara Falls, Ont., from October 18 to 19, 2016. It will play host to more than 150 dealers, managers, and executives from home improvement retailing in North America. For more information, click here now.

Canac plans huge growth in Montreal-area markets

QUEBEC CITY — As one of the country’s largest independently owned home improvement retailers, Canac can afford to play by its own rules. With 24 stores and more than half a billion dollars in sales, it is moving aggressively into the markets of its competitors in the province of Quebec—and perhaps even beyond.

Jean Laberge, president of Canac, says the opening of a new distribution centre in Drummondville, Que., will help drive that expansion. The new DC, located mid-way between Canac’s home town of Quebec City and Montreal, opened just three weeks ago. It will give the giant retailer the ability to supply stores in the Montreal area, a market that is an important focus for growth.

In fact, the next store scheduled to open will be in the Saint-Hubert neighbourhood of Longueuil, on Montreal’s south shore. That one will break ground next month, followed by another a little farther east in Granby—with more in the works.

With the focus on moving south, the Drummondville DC will become the main facility for Canac, says Laberge. Already, the existing DC in Quebec City is beyond capacity, and Canac has been renting an additional 100,000 square feet of warehouse to handle the overflow. With the opening in Drummondville, the distribution function will be transferred south, ending the need for extra space in Quebec City.

The next step will be to maximize the efficiency of the new DC. He expects that between 15 and 20 stores could be served out of the new location. “I want to open two stores per year for the next two or three years to maximize output and reach a break-even point with the distribution centre,” says Laberge. “So that’s why I’ll be aggressive for the next few years.”

Canac has already expanded east to Rimouski; he expects to continue to develop markets south of Montreal and north of Quebec City. Laberge says there is lots of room for expansion in Quebec, but would consider eventually going beyond the provincial border. “I don’t think that would be a problem. Maybe not to the U.S., but in Ontario, why not?

Lee Valley Tools hones customer experience in its latest stores

OTTAWA — Specialty tool and hardware retailer Lee Valley Tools may have been founded as a catalogue business, but its retail presence has grown across the country. Starting with its first store in Ottawa in 1978, Lee Valley Tools has gradually rolled out more bricks-and-mortar locations and now has 16 stores.

But since last year, the company has been stepping up its expansion plans. The first store to open in this latest wave of growth was in Kingston, Ont., on October 1, 2015 (shown here). This will be followed by a store in Kelowna, B.C., which will open April 23. Another dozen locations are on the go, “based on real estate and availability,” says President Robin Lee, who is also the son of company founder Leonard Lee. Robin Lee grew up in the business—he built the showroom for that first store back in 1978—and has been at the helm since 2002.

While once known only as the go-to place for serious woodworkers, Lee Valley Tools has expanded its product lines through the years. It now features lawn and garden products, cabinet hardware, toys and puzzles, and just plain cool stuff for grownups. “As the product lineup grew, it became possible to open stores in new locations that can accommodate Lee Valley’s greater range of products,” says Lee.

The Kingston location is a perfect example. “It’s a smaller store, but it has a larger showroom,” Lee explains. “We’re being more open with the layout to create more customer-friendly space.” That includes a network of wooden, glass-topped showcases that form the centrepiece of the store and help manage customer flow.

Lee Valley specializes in quality products, another thing makes the stores attractive, he says: “We have a product line that means we don’t have to compete only on price. Price is no longer the sole determinant that it was just a few years ago—and customers have had it with cheap products.”

People want to come into the stores to see and touch that quality and benefit first-hand from the staff expertise. “With tools especially, you have to get your hands on them. You have to pick them up,” Lee adds.

“You add value through information and story-telling.”

Castle sees growth with independents in Atlantic market

MISSISSAUGA, Ont. — With two recent additions to its dealer network in Atlantic Canada, Castle Building Centres Group sees the region as a good one for growth.

Just last week, a new specialty dealer, Window World in Moncton, N.B., signed on under General Manager Jay Milton, who has been in the home improvement industry for more than 15 years. This latest recruit underscores how important the Atlantic market is for Castle. Only last month, Castle added a member in Newfoundland and Labrador, B.W. Powell in Charlottetown, Labrador. Owned by Marie and Irving Powell, children of founder Ben Powell, it’s a broad-line general store supplying the town’s LBM and hardware, along with groceries and gasoline.

Bruce Holman is director of business development for Castle. He admits that Castle is strong in Atlantic markets—and especially in Newfoundland and Labrador. There, he counts 142 stores in total selling hardware and building materials, of which fully 40 are Castle members. “We’ve had a lot of traction there,” he notes.

He’s proud of the gains Castle has made there, attributing them in part to Castle’s business model, which doesn’t require an independent to join a banner. A lot of these dealers, many of them smaller operators in discrete markets, don’t need the sophisticated offerings of some banners, he says.

“They are true entrepreneurs that want simplicity. They don’t want to be told how to run their business. Many of them are destinations, so having Air Miles or a banner isn’t as important. They don’t want a lot of fanfare.”

DID YOU KNOW…?

RETAILER NEWS

ST. JACOBS, Ont. — As Home Hardware continues seeking to raise its profile in Quebec, it has welcomed its newest member in the country’s second-largest home improvement market. Quincaillerie Gerard-Raymond has served the community of Pierrefonds on the West Island of Montreal for the past 40 years under the RONA banner. Dealer-owner Claude Lavoie said he was “confident [in] the strength of the marketing program, the wide range of products and [Home Hardware’s] unfailing commitment toward independent dealers.” Just a week earlier, Home announced the signing of Quincaillerie Sainte-Julie Inc., under owner Michel Robidoux and his wife, Marie-Josée Hébert.

TORONTO — Hudson’s Bay Co. posted a steep increase in revenues and profits for the final quarter of fiscal 2015. The operator of the Bay, Lord & Taylor, and Saks Fifth Avenue banners saw net earnings rise to $370 million, more than doubling the figure of $115 million a year earlier. Revenue skyrocketed by more than 70% to about $4.5 billion, largely attributed to the acquisition of Galeria as the HBC Europe business. Comparable-store sales rose by 1.8% for the quarter and 2.5% for the year.

TORONTO — Sears Canada, which announced in November that it would sell and lease back its National Logistics Centre, has reported that the transaction has closed. Sears will continue to operate the Toronto-area site as the lessee of new owner Tamworth Properties, an affiliate of Metrus Properties. According to the company, the transition involves no cuts to staff or service disruptions.

MONTREAL — Dollarama will likely have to increase its maximum price from $3 to $4 in order to contend with the weaker loonie, CEO Larry Rossy revealed last week. The discount retailer has seen import costs rise and Rossy acknowledged the “probability” that it will add items for $3.50 and $4 beginning in the second half the next fiscal year. Other inventory strategies could involve fewer units in a package while focusing on quality: “200 very good toothpicks” instead of 500, for example.  At the same time, the company will not venture into new product categories.

ISSAQUAH, Wash. — Costco Wholesale Corp. reported net sales in March of $10.71 billion, an increase of 3%. For the 31-week year-to-date, net sales were up 2% to $68.96 billion. Same-store sales for March were up 3% in Canada and down 6% year to date. Excluding the impact of gas prices, same-store sales would have been up 9% in Canada both for the month and year to date.

SUPPLIER NEWS

MILTON, Ont. — The new North American headquarters for Roxul Inc. has earned LEED Gold certification in the New Construction category from the Canada Green Building Council. With this certification, the insulation maker’s head office now ranks among Ontario's most energy-efficient new buildings. Leadership in Energy and Environmental Design (LEED) is an international rating system to distinguish excellence for green building. Gold certification is the second-highest level attainable. Roxul’s facility scored high marks in all categories, including Energy and Atmosphere, Water Efficiency, and Innovation and Design.

PEOPLE ON THE MOVE

Marianne Thompson, vice president of sales and marketing at Alexandria Moulding, is moving over to Jeld-Wen to take over a new role as vice president sales there. (226-220-1423; mthompson@jeldwen.com) She is being replaced by Donna Gerrits, who takes over the VP sales and marketing role. Gerrits was formerly general manager of Royal Woodworking, a business unit of Alexandria Moulding. (905-717-2755; dgerrits@alexmo.com)

At Sears Canada, Becky Penrice has been appointed executive vice-president and COO. She was most recently senior vice-president and interim COO.  Prior to that, Penrice was SVP human resources and information technology.

ECONOMIC INDICATORS

Municipalities issued building permits worth $7.4 billion in February, up 15.5% from January. This growth followed a 9.5% decline the previous month and was largely the result of higher construction intentions for commercial buildings in Alberta, single-family dwellings in Ontario, and institutional structures in Quebec. The value of residential building permits increased 5% to $4.2 billion in February, following a 12.7% decrease the previous month. Permits for single-family dwellings increased 9.6% to $2.4 billion, ending a string of six consecutive monthly declines. Advances were registered in five provinces, led by Ontario, with Alberta a distant second. British Columbia reported the largest decline in the residential sector. (Statcan)

NOTED

Wal-Mart is building a milk processing plant in Fort Wayne, Ind., and intends to be up and running by mid-2017. The company expects to reduce operating costs by working directly with milk producers to produce private-label milk for about 600 of its stores in the American Midwest.

CLASSIFIED ADS