January 16, 2017 Volume xxiii, #3

“Our heads are round so our thoughts can change direction.”
—Francis Picabia (French painter, designer, and writer, 1879-1953)

IN THIS ISSUE:

• Castle adds dealers throughout holiday season

• Commercial market can be competitive—but profitable—for traditional dealers

• Cologne International Hardware Fair to extend hours, reach in 2018

• Marketing yourself to the Millennial generation

• PLUS: Ace streamlines shows, Amazon at Christmas, Guay named EVP at RCR, Walmart and Visa settle, Stanley B&D to invests, housing starts soar, West joins Westech, and more!
  
  

Castle adds dealers throughout holiday season

MISSISSAUGA, Ont. — Castle Building Centres Group continues to grow its ranks, as its mandate to leave member-dealers to operate under their own banners in their own markets resonates for independents.

The latest store to join is also a new member for Quebec. Quincaillerie Touraine is a family-owned operation with two stores in the Ottawa region. The first was established in Gatineau 45 years ago; the second store, in Cantley, was installed in 2005.

Both stores, which sell a full complement of LBM and hardware, will hold grand re-opening celebrations this spring.

This latest recruitment follows the signing of two other dealers late last year. Parliament Building Supplies, a fixture in downtown Toronto’s Portlands area for more than a century, switched to Castle under a new owner, Fastway Group. Fastway is a division of Mill Street and Co., an investment group that purchased Thorold Lumber in December. Thorold Lumber was already a Castle member.

In the Maritimes, E & J Millworks in Yarmouth, N.S., which specializes in custom millwork design, also signed with Castle. That business has been a part of its community for 40 years.

Commercial market can be competitive—but profitable—for traditional dealers

SPECIAL REPORT — Home improvement dealers have been increasingly eyeing commercial projects as demand for rental apartments and offices booms. “I know a lot of my competitors pooh-pooh this side of the business and say it’s too difficult,” says Andrew Payzant, owner of Payzant Home Hardware Building Centre in Halifax. “But the housing market has changed, and if you don’t sell into multi-family, you’re walking away from a lot of business.”

But commercial sales aren’t for everyone. “It’s definitely a different business,” observes Joe George, owner and general manager of Patene Building Supplies, which has 15 locations in Ontario and Manitoba.

It’s axiomatic that succeeding at commercial sales requires a certain volume level to compensate for lower margins. Fraser’s Pro Home Centre is a TIMBERT MART dealer with five locations in Nova Scotia’s Annapolis Valley. Its rural markets total only around 90,000 residents, so opportunities to supply commercial projects are limited, says GM Paul Parsons. 

And competition for commercial jobs can be stiff. “Everybody thinks they can do this, but you have to sell a lot of apples to make money,” says Paul Singer, who owns Morinville Castle Building Centre in Morinville, Alta.

Singer, and a number of other dealers HARDLINES spoke with, offered advice that other dealers interested in this arena might heed. If dealers are up for building the relationships, investing in the right storage and stock, and taking a risk on credit to cater to commercial contractors, the return on this “different business” can be quite profitable. 

(This article is excerpted from the latest issue of our sister publication, Hardlines Home Improvement Quarterly magazine, which mailed earlier this month to more than 11,000 dealers across Canada. For you own copy, click here! ―Editor)

Cologne International Hardware Fair 2018 to extend hours, reach in 2018

COLOGNE, Germany — In 2018, Eisenwarenmesse–the International Hardware Fair will be held in Cologne from March 4 to 7, returning to a four-day format.

The show, which is run every two years, attracted some 44,000 trade visitors to Cologne in 2016. That year, the show shrank to three days. However, the reduced schedule led to an increased concentration of the business activities of the trade fair participants, encouraging organizers to return to four days.

“The very good result of the 2016 event is the reason for us changing the duration of the trade fair again,” said Katharina C. Hamma, COO of Koelnmesse GmbH, which owns the International Hardware Fair. “The high level of the flow of visitors is a positive sign for us, because it proves that Eisenwarenmesse-International Hardware Fair is considered to be a must-attend event.”

The last edition of the show managed to draw delegates from 124 countries, who came to see 2,670 exhibitors spread over almost 1.5 million square feet of exhibition space. The show grounds sit alongside the Rhine, and across the river from the historic city of Cologne.

(Editor’s Note: We consider this show to be one of the most important in the world, and one at which Canada is severely under-represented. In addition, Hardlines hosts its Canada Night International Reception there. This incredible networking event brings together Canadians with buyers and vendors from around the world over a glass of German beer. We strongly encourage more Canadian buyers and vendors to attend this truly international show in 2018. Click here now for more information and to register.)

Marketing yourself to the Millennial shopper

SPECIAL REPORT — The Millennial demographic currently ranges in age from their late teens to late 30s. As they now find themselves in different stages of life—some are students, new parents, or homeowners, while others may be some combination of the three—their needs from home improvement retailers or brands vary widely.

A survey by the Student Life Network & Parent Life Network in partnership with HARDLINES uncovered some common findings that indicate trends to watch from Canada’s Millennial shoppers. Delegates got a sneak peak of these statistics at the 21st Annual Hardlines Conference held in Niagara Falls, Ont., last fall.

This generation stands to make a significant mark on the home improvement market this year. More than six million Canadian Millennials plan to spend $20 billion on home improvements in 2017. The top five areas in which they plan to undertake home improvement projects over the coming year are:

1. Outdoors (51%)
2. Bedroom (49%)
3. Bathroom (41%)
4. Living room (39%)
5. Kitchen (37%)

So how can your store cater to these shoppers? The results suggest a few opportunities to win over their business:

1. Gain their respect. Show them you know how to do their home improvement project, but that you respect their choice to try to do it themselves.
2. Share with them. Connect with them regularly to ensure you’re always top of mind when they’re ready for their next DIY project.
3. Encourage their purchase. Provide them with special opportunities to buy what they want most at a price they can’t find anywhere else.

(Homeowners Canada was commissioned by HARDLINES to conduct a research study of Millennials to uncover their home improvement shopping habits and preferences. Homeowners Canada conducted an online survey in the fall of 2016 with more than 3,000 Canadian Millennials aged 20 to 35. For more information on the survey and its results, contact Sean Copeland at sean@squarecrop.com.)

DID YOU KNOW…?

... that the Hardlines Conference will return to Niagara Falls, Ont., this year? That’s right, we’ve booked you another fabulous view of the Falls while you take part in the country’s only national summit for the retail home improvement industry. And we’ve already confirmed some amazing speakers, including one of the largest independent home improvement chains in the country and a North American leader in retail sales trends. Stay tuned! Mark your calendars now for November 14 to 15, 2017. See you in Niagara Falls!

RETAILER NEWS

WINNIPEG — Ace Canada has announced that it will not host a Spring Buying Show in Winnipeg this year. Instead, the hardware wholesaler will offer dealers online bookings, special promotions, pallet offers, vendor specials, and extended dating for their fall and winter seasonal needs. The move is aimed at saving time and travel costs for its independent customers. “Dealers have told us that they would save money by booking their products online. Vendors have expressed interest in attending only one show per year,” said Bill Morrison, divisional vice president of Ace Canada. The dates for the Fall National Buying Market are September 30 to October 2 at the Winnipeg RBC Convention Centre.

SAN FRANCISCO — Amazon snapped up 49.2% of online sales the Monday before Christmas, says new retail data from Slice Intelligence. The e-commerce giant’s two-day delivery guarantee gave last-minute shoppers confidence, Brendan Witcher, principal retail analyst at Forrester, told USA Today. “Digital has taught people they can wait to the last minute.” Seattle-based Amazon’s share of the e-retail pie peaked between December 18, 19, and 20 at 47.8%, 49.2%, and 48.2%, respectively. Slice’s data is derived from more than a million online order receipts.

BENTONVILLE, Ark. — Wal-Mart Stores will make hundreds of employees redundant, sources have told the Wall Street Journal. It’s the latest in a series of cuts to expenses including the elimination of 7,000 back-office positions first announced last fall. The latest round of layoffs will take effect for the most part by the end of the month, and will target human resources jobs at corporate headquarters and in regional offices.

SUPPLIER NEWS
NEW BRITAIN, Conn. — Stanley Black & Decker announced it will invest $35 million to support U.S. manufacturing with a domestic plant. Speaking after the announcement of his company’s acquisition of Craftsman, CEO James Loree did not mention Donald Trump by name, but was understood to be safeguarding the company’s position in the event of the president-elect’s promised tax on U.S. companies that outsource manufacturing abroad.

PEOPLE ON THE MOVE
Frédéric Guay has been named executive vice president at RCR International inc. He joined the company in 2015 as senior vice president of sales. (f.guay@rcrint.com; 450-670-8100)

Brad West has joined Calgary-based Westech Building Products, a division of the Westlake Chemical Corporation, as general manager. He will be based in Ontario. Westech is a manufacturer of PVC extruded profiles for the window and door industry and for the building materials industry. West was previously eastern corporate sales manager at Jeld-Wen. (bwest@westlake.com; 905-376-3630)

Enerkem, which produces waste-to-biofuel and renewable chemicals, has chosen Dominique Boies as executive VP and CFO, the same positions he previously held at RONA. Prior to his time at RONA, Boies held senior executive positions at RBC Royal Bank and at the Caisse de dépôt et placement du Québec. He will be based at the firm’s Montreal headquarters.

ECONOMIC INDICATORS
Housing starts were up 10.5% in December to 207,041 units seasonally adjusted, from 187,273 units in November. Urban starts increased by 11.8% seasonally adjusted. The urban sector was led by multiple starts, up 13.9% to 120,750 units, while single-detached urban starts increased by 8.1% to 66,871 units. Ontario, Quebec, and the Prairies all showed increases, while declines were experienced in British Columbia and in Atlantic Canada. (CMHC)

Municipalities issued $7.8 billion worth of building permits in November, down 0.1% from the previous month. The decline was largely the result of lower construction intentions in Alberta, following a spike the previous month due to impending changes to the Alberta Building Code. In the residential sector, the value of building permits fell 1.6% to $5.1 billion in November, following three consecutive monthly increases. Declines were posted in four provinces, led by Alberta. The largest gains were posted in British Columbia and Quebec. (StatCan)

OVERHEARD…
“We view it sort of as one of several political movements, or concepts, that really drive us to this concept of make-where-we-sell. It’s going to be advisable to have more manufacturing in the U.S.” —Stanley Black & Decker CEO James Loree, commenting on his company’s decision to invest $35 million in manufacturing in the U.S. He hinted at potential political backlash as President-elect Donald Trump has promised to take punitive measures against U.S. companies in order to keep jobs in that country.

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