October 10, 2016 Volume xxii, #38

“Life shrinks or expands according to one’s courage.”
— Anais Nin (author, essayist, and lecturer, 1903-1977)

IN THIS ISSUE:

• Hardlines Conference will unveil important new home improvement research

• Home Hardware dealers enjoying strong sales as co-op looks to urban growth

• TIMBER MART strengthens commercial dealer base in Atlantic Canada

• Four top retailers keep growing as industry consolidation continues

• PLUS: Vendors can meet top eRetail buyers, Sears wants to unload Craftsman, Home Hardware’s latest in Quebec, Bass Pro to buy Cabela’s, Spectrum hires, building permits —and more!
  
  

Hardlines Conference will unveil important new home improvement research

SPECIAL REPORT — This year’s Hardlines Conference has a heavyweight lineup of retail speakers, including Ron Beal of Orgill, Jay Heubner of Ace International, Nicolas Couture, an important TIMBER MART dealer, and Robin Lee of Lee Valley Tools.

But this year’s event will also feature tons of data. Drawing on the theme, “Renovating the Art of Retail,” presentations will include results of a special study of millennial shopping and renovation habits. The Hardlines Conference takes place October 18 to 19 at the Sheraton on the Falls hotel in Niagara Falls, Ont.

Drawing on brand-new research sponsored by HARDLINES, Sean Copeland from the Parent Life Network will give delegates the scoop on how retailers can cater to the growing millennial demographic. From shopping habits and the brands they prefer to who they look to for renovation tips and their future home project plans, Copeland will fill us in on what these young, savvy shoppers seek from their hardware stores.

Dan Tratensek, vice president of publishing for the North American Retail Hardware Association, will present brand-new data regarding which areas of their business retailers are investing money and manpower. This NRHA survey will shed light on what challenges and opportunities take precedence for independent retailers on both sides of the border.

Al Meyers of Kalypso will weigh in on the importance of e-commerce and how retailers can deliver the omnichannel experience consumers have come to expect. What does it take to make your customer drive past your competition to buy from you? Drawing on his years of experience in retail planning, Meyers will tell us about the different approaches high-performance retailers are using to innovate—and stay afloat—in today’s tough retail environment.

Emceed by Mag Ruffman, acclaimed television personality of Road to Avonlea and ToolGirl fame, and located in Niagara Falls, Ont., the 21st annual Hardlines Conference will give you two days of business-building insights, networking, and some fun surprises.

(Hurry and register right now! Visit www.hardlines.ca/events/hardlines-conference.)

TIMBER MART strengthens commercial dealer base in Atlantic Canada

VAUGHAN, Ont. — TIMBER MART has signed a new dealer in Atlantic Canada. City Drywall Ltd., in Notre-Dame, N.B., is a specialty gypsum and roofing dealer, and the latest member to join the ranks of TIMBER MART’s commercial arm.

In business since 1973, City Drywall specializes in the sale of drywall, blue board, roofing, insulation, T-bar, and steel studs, as well as ceiling tiles and accessories to contractors, builders, and DIYers in the Moncton area. The business has four warehouses and retail space with 40 full- and part-time staff year round.

“As soon as we joined the group last month, we were able to take advantage of multiple buying programs in our key categories and saw immediate value,” says Ricky Boucher, owner of City Drywall. “We were looking for a buying group who could offer us better buying and connections to more vendors—and we found it.”

City Drywall is the second commercial member for TIMBER MART in Atlantic Canada, “which will,” says Mark Finucane, vice-president of TIMBER MART’s commercial division, “strengthen our commercial arm in the region and fortify our national dealer network.” The other member is Coastal Drywall, which has three locations, in Dieppe and Hanwell, N.B.; and in Dartmouth, N.S. The business is owned by the father-and-son team of Claude and Marc Comeau.

Home Hardware dealers enjoying strong sales as co-op looks to urban growth

ST. JACOBS, Ont. ― With the arrival of autumn, most dealers at the recent Home Hardware Fall Market reported that business was looking strong coming into the fourth quarter. Home Hardware CEO Terry Davis underscored that healthy outlook, while pointing out the regional differences in dealers’ experiences across the country.

In conversation with HARDLINES, he said that the oil and gas based markets, as well as Newfoundland and Labrador, which has been a source of workers for the Alberta oil fields, are down. And the province of Quebec is a bit slower than its neighbour in Central Canada, Ontario, to recover. But the rest of the country is generally strong.

While Home Hardware has long supported dealer growth in traditional hardware and building centre stores in largely rural and secondary markets, it is actively pursuing new areas of growth—which includes focusing more on urban stores. This market, historically most vulnerable to the big box invasion, has become a renewed opportunity, especially for hardware stores, as urban centres keep growing. Urban stores are establishing themselves as integral parts of neighbourhoods within cities such as Toronto and Vancouver.

One such store, a startup in Toronto’s Liberty Village, which is a condo development inhabited by a predominantly young, millennial demographic, opened just over a year ago. Under dealer-owner Todd Coffell, the store has flourished selling everything from kitchenwares and lighting to electric barbecues (gas and charcoal are banned from most high-rise condo balconies). Davis was also eager to share details of another new store, which opened in Vancouver’s Davie Village this past summer. Dealer-owner Jeffrey Ho already owns two other Home Hardware stores in the city.

Looking ahead, Davis said he is “much more optimistic about Home Hardware’s performance for 2016, after hearing from dealers at the show,” despite some anticipated headwinds: “I think the Canadian economy is not going to slow down before the end of the year.” And his dealers, he adds, expect business into the fall season to remain strong.

Four top retailers keep growing as industry consolidation continues

SPECIAL REPORT — The large home improvement retailers in Canada just keep getting bigger. However, that consolidation has been accelerated by Lowe’s takeover of RONA earlier this year. As a result, the market share of just four retail groups got bigger than ever in 2015, according to the latest findings in a new report.

The latest Hardlines Retail Reportreveals that Home Depot remains number one with sales exceeding $7 billion. However, Big Orange faces tough competition: Lowe’s $3.2 billion acquisition of RONA inc. moved Lowe’s Canada up into the number-two spot with combined sales of approximately $6.6 billion.

That merger also helped increase the overall heft of the Top Four retailers. Their collective sales at retail increased by more than 8% and their market share grew by more than 6% in 2015.

According to the Hardlines Retail Report, even though two U.S.-based companies now dominate the scene here, the number-three position is held by a group of independents. Through a combination of aggressive dealer recruitment, in combination with growth by existing dealers, Home Hardware Stores Ltd. maintains third place in the Top Four. Following in fourth place is Canadian Tire Retail.

DID YOU KNOW…?

... that the 21st Annual Hardlines Conference will feature valuable insights into the female shopper? We are hosting a panel of women from all areas of the industry who will weigh in on the differences, similarities, and challenges of catering to buyers and consumers—whatever their gender—and give us their thoughts on attracting female shoppers. Our panel features Sherri Amos, Director, Dealer Support, Home Hardware Stores Ltd.; Sara Clarkson, President, Storesupport Canada; Christine Joannou, Key Account Manger Retail Canada, MAAX Bath Inc.; and Jillian Sexton, COO of Hector Building Supplies. And moderated by our own Hardlines Publisher Beverly Allen! October 18 & 19 in Niagara Falls. Sign up right now!

RETAILER NEWS

HOFFMAN ESTATES, Ill. — Sears is reportedly shopping its Craftsman business out to other power tool makers. According to Bloomberg, both Stanley Black & Decker and Techtronic Industries (TTI) are interested in the venerable brand. Other possible suitors reportedly include U.S.-based Apex Tool Group and Sweden’s Husqvarna. The brand could be worth as much as $2 billion. Back in May, Sears announced it would consider options for Craftsman tools, Kenmore appliances, and DieHard auto batteries, as well as its Sears Home Services repair business.

ST. JACOBS, Ont. ― Quincaillerie E.B. in East Broughton, Que., celebrated its grand opening last week. The 5,600-square-foot store, under dealer-owner Diane Nadeau, has been 10 months in the making. The mayor and members of the town council of the municipality, which is about 100 kilometres from the Maine border, joined Nadeau for a ribbon cutting. The store has joined forces with Chabot Décor to enhance the shopping experience, with a design consultant on hand to offer customers decorating advice and design tips.

SPRINGFIELD, Mo. ― Bass Pro Shops has reached a $4.5 billion agreement to purchase competitor Cabela’s and take it private. The acquisition will bring together two major outdoor sporting goods banners, with the privately held Bass Pro pledging to “celebrate and grow” the Cabela’s brand. The Sidney, Neb.-based retailer had been seeking buyers since the end of last year, when hedge fund Elliott Management dubbed it undervalued and called for its sale or restructuring.

SYDNEY ― Woolworths has finalized the sale of its Home Timber & Hardware banner to wholesaler Metcash for $165 million, as part of its strategy to divest itself of its hardware holdings. That plan has also seen a fire sale at the ill-fated Masters Home Improvement joint venture, whose stores’ inventory will be cleared out by early December. Sale of the Masters properties, however, is being held up by a dispute with JV partner Lowe’s, which is challenging Woolworths’ asking price in court. With the acquisition of Home Timber & Hardware, Metcash will now have a $2.2 billion share in home improvement sales. Its other banners consist of Mitre 10, True Value Hardware, and Thrifty Link, in addition to its wholesaling to independents.

SUPPLIER NEWS
TORONTO — Top-level eRetail executives and buyers are gathering in Fort Lauderdale, Fla., later this month to meet with vendors and suppliers who want to grow their online business. The Home Improvement eRetailer Summit will be held at the Hilton Fort Lauderdale Beach Resort, October 26 to 28. Online retailers attending include Wayfair, BuildDirect, Sears.com, Organize-It, SupplyHog, ToolsandHardware.com, and HSN. Want to sit down with these top eRetail decision makers? Contact Beverly Allen: bev@hardlines.ca; or 1-647-880-4589.

MONTREAL — Richelieu Hardware continued to grow in the third quarter with total sales up 10.4%. Sales were up 9.9% on the manufacturing side, while the retail business was up 12.9%. Sales to hardware retailers and renovation superstores stood at $33.3 million, up 12.9% over the third quarter of 2015. Canadian sales to hardware retailers and renovation superstores grew to $29.4 million, up 14.0%. Sales to hardware retailers and renovation superstores were up 11.6% over the first nine months. During the quarter, Richelieu completed two acquisitions in the U.S. representing annual sales of about $10 million, JFH Corporation, a specialty hardware distributor in Memphis; and Eveready Hardware, a specialty hardware distributor in Long Island City, adding a distribution centre in New York City.

PEOPLE ON THE MOVE
Spectrum Brands Canada, which manages the Pfister and FORTIS plumbing brands, has appointed Emily Milford-Clare as associate national account manager for Spectrum’s Wholesale Plumbing division. She will be responsible for working with wholesalers, while establishing relationships with the builder community across Canada for Pfister and Fortis. Prior to joining Spectrum Brands, she worked as a retail sales specialist for Saint-Gobain’s CertainTeed Gypsum division, and at plumbing wholesaler Wolseley as a category manager and field marketing co-ordinator.

ECONOMIC INDICATORS
Municipalities issued $7.3 billion worth of building permits in August, up 10.4% from July, the second consecutive monthly increase. The gain in August was mainly attributable to higher construction intentions in Quebec, Ontario, and British Columbia.
The value of residential building permits was up 9.6% to $4.5 billion, following four consecutive monthly declines. Both residential components—multi-family and single-family dwellings—recorded gains, up 14.7% and 6.0% respectively. (StatCan)

OVERHEARD…
“City Drywall, like many of the commercial dealers who joined our group over the last two years, will continue to benefit greatly from the transparent and strong buying programs we have in place to support their business success.” —Mark Finucane, vice-president of TIMBER MART’s commercial division, on the signing of a new dealer, City Drywall, in Atlantic Canada.

CLASSIFIED ADS