January 30, 2017 Volume xxiii, #5

“What we think, or what we know, or what we believe is, in the end, of little consequence. The only consequence is what we do.”
—John Ruskin (British art critic, writer, and philanthropist, 1819-1900)

IN THIS ISSUE:

• Dealers, vendors gather in Calgary for WRLA Buying Show

• Six months in, Peavey explores synergies of TSC takeover

• National dealer association prepares for next steps with Spring Summit

• Quebec: different, but the same

• PLUS: Lowe’s first store in Milton, Home Hardware contractor appreciation events, Wesfarmers’ first U.K. store under the Bunnings banner, Grainger down at year end, 3M’s sales for the final quarter, Lowe’s head office hires, Ply Gem’s new website, and more!
  
  

Dealers, vendors gather in Calgary for WRLA Buying Show

CALGARY — Dealers came from across Western Canada to look for deals and to network at the latest Buying Show of the Western Retail Lumber Association. The show, held in Calgary from January 18 to 20, featured 250 vendors across 170,000 square feet of space at the BMO Centre.

Even though many vendors felt dealer attendance may have been flat compared to last year, the majority of them that HARDLINES spoke with managed to keep busy engaging with customers, who included some of the West’s top dealers. North American Lumber, McMunn & Yates, Alta-Wide Builders Supplies, and other large independents from every major banner and buying group kept busy on the show floor, amidst an atmosphere that was fairly positive despite the slow economies in much of the West.

This show, the first of the year in the industry, is considered something of a bellwether of the industry’s mood. While many parts of Canada had a strong year in 2016, dealers from Alberta and Saskatchewan in particular are still feeling the effects of the slow economies in those regions. That reality certainly had a sobering effect on the mood of the show, which was otherwise fairly positive.

Nevertheless, according to many exhibitors, dealers were there to buy. “The attitude of and response from our customers and potential customers is tremendous,” said Steve Goulding, director of Canadian retail sales at Hillman Group. He noted that he’d seen a lot of key customers by mid-morning on day one of the show.

Michèle Ashton, business development manager for Topring, which produces compressed-air products, was exhibiting for the second time. “Last year was okay, but this year is unreal busy,” she said enthusiastically. “It’s a great way of meeting the banners from across the regions.”

Nerval Corp., a stocking distributor of bath accessories and interior hardware based in Edmonton, was also at the show for the second time. The hospitality industry is its biggest market, but Sales Manager Sunny Nerval said he was trying to build the wider retail business at this show, even though he found more attendance from delegates interested in building materials.

Off the show floor, hospitality suites by companies such as Taiga and Alexandria Moulding drew crowds, while the opening night reception, sponsored by Castle, drew an audience of both dealers and vendors. The closing night party, sponsored by Jeld-Wen, featured music by Canadian country rocker Dallas Smith and the awarding of the WRLA’s Industry Achievement Award to Doug Lemieux, president of L.B.H. Building Centre, a TIMBER MART dealer in St. Albert, Alta.

Six months in, Peavey explores synergies of TSC takeover

RED DEER, Alta. — Peavey Mart, a well-known farm and hardware retailer in Western Canada, took a bold step last year when it bought controlling interest in London, Ont.-based TSC Stores. Now, six months into the merger, both sides are learning how to work together.

“We’re starting to really look at how we can work together and really maximize both businesses,” says Doug Anderson, president of Peavey Industries, which owns 37 Peavey Mart stores and three MainStreet Hardware outlets. TSC Stores is a chain of 51 farm and hardware outlets stretched out across Ontario, and into Manitoba. 

Called “a match made in farm hardware heaven” when first reported by this publication, the similarities between the two companies present obvious advantages. Anderson says his team is identifying those similarities and looking for ways to generate synergies. However, TSC will continue to operate as a separate entity, which includes maintaining its own buying office.

Peavey will increase its interest in TSC over the next two years until it owns TSC outright. However, Anderson stresses that, even after that time, both companies will be operated as separate businesses.

As systems get integrated—Anderson says the two companies are working on aligning their IT systems over the next five years—the buying function will get more harmonized. “We’re meeting with select vendors at this point and creating plans around key relationships to work better with those key vendors to maximize those relationships.”

Anderson is optimistic about what the future holds for the takeover, noting that the executive teams from both sides are “really working well together. I think it’s exciting to look at the growth of the respective businesses and find ways to leverage their strengths.”

National dealer association prepares for next steps with Spring Summit

NATIONAL REPORT — The confederacy of regional LBM associations, the Canadian Retail Building Supply Council, is moving ahead with efforts to work more closely together on issues common to dealers across the country. Positioning itself as a national voice for the industry, the CRBSC will invite input from other industry leaders at its Leadership Summit, being held in Halifax on March 22, during day one of the ABSDA Buying Expo.

The executives of CRBSC have sent out an invitation to senior industry leaders to provide input in a series of high-level discussions that will focus primarily on the following industry needs: advocacy, education, and labour force development.

According to a letter signed by current CRBSC chair Richard Darveau, who is also president and CEO of the Quebec association, AQMAT, the discussions will seek ways to guide the regional associations “to align their service delivery models to better serve our dealers, suppliers, and manufacturers across Canada.”

The Spring Summit is an invitation-only event. For more information or to participate, contact Denis Melanson, president of the ABSDA; 506-858-0700.

Quebec: different, but the same

SPECIAL REPORT — Quebec, which accounts for nearly a quarter of the country’s population, has also proven a tough market for outsiders to break into. When asked about what makes the Quebec shopper unique, Alain Charbonneau, owner of Centre de Rénovation Fabreville in Laval, said that he finds the Quebec consumer eagerly embraces innovation and new trends and aesthetics.

Perhaps contributing to the difficulty retailers face entering the market, there’s long been a perception that the Quebecois are die-hard “support local” shoppers. Charbonneau admits that’s true, but adds that consumers are more fixated on price than ever before.

Marie-Josée Clément agrees. As the general manager of eight La Coop Univert stores located between Quebec City and Trois-Rivières, she’s found that consumers are prioritizing price above all else. “They compare a lot,” says Clément. “Even if you’re in a rural area, you have to be very competitive. These days, with the internet, price is really becoming an important factor.”

But both agree the fixation on dollars is not something unique to shoppers in Quebec—all across the country, Canadians are working with tighter budgets. And with those tighter budgets comes an increased competition for every dollar.

The big news in Quebec home improvement last year was the purchase of RONA by Lowe’s. As the deal was finalized towards the end of 2016, dealers in Quebec were preparing for the company’s entry into the market.

Clément says while BMR emphasizes the company’s Quebecois roots, everything goes right back to the fight for each dollar retailers are seeing in the province. “We work on that in our publicity and our everyday interactions, but I don’t think it’s enough to sway people,” says Clément. “Lowe’s is a competitor that is aggressive—like a lot of our other competitors.”

DID YOU KNOW…?

...that e-commerce is growing at a rate of 10% annually? How would you like to meet North America’s top eRetailers face to face? They will all be at the 2nd Annual Home Improvement eRetailer Summit in Orlando, Fla., September 13 to 15. OrganizeIt.com, HardwareandTools.com, HSN.net Kmart.com, Sears.com, BuildDirect.com, and SupplyHog.com will want to meet with vendors representing these categories: building materials, home décor, lighting, kitchen, outdoor living, hand and power tools, electrical, insulation, paint, sealants, adhesives, tape, tanks, fasteners, climate control, housewares, furniture, home security, storage, pet products, flooring and floor care, climate control, air and water filtration, cleaning products, security, alarms, mailboxes, laundry, vacuums, HVAC, energy-efficient products, decking, batteries, chargers, and cables. If you’re selling in any of these categories, contact Beverly Allen right now to learn how to meet these top eRetail buyers! (Space is limited so jump on this one now!)

RETAILER NEWS

BOUCHERVILLE, Que. — Lowe’s celebrated the grand opening of its first store in Milton, Ont., last week, with Mayor Gordon Krantz joining Alan Blundell, divisional vice president of merchandising for Lowe’s big box business, on hand for a board-cutting ceremony. The new store represents an investment of some $24 million and will create 145 jobs, with an additional 40 seasonal positions. The store features about 40,000 SKUs in 84,000 square feet of retail sales space, along with an adjacent 10,000-square-foot garden centre. The store is the 54th in Canada under the Lowe’s banner.

ST. JACOBS, Ont. — Home Hardware Stores Limited is currently doing a series of contractor appreciation events, called Pro Contractor Tradeshows, across the country. These events, which attract contractors, renovators, and builders, will be held in seven cities across Canada, offering product information and hands-on demonstrations from up to 80 vendors. Last week, Home Hardware dealers in the Ottawa region banded together to host some 700 contractors there. Another one takes place this week in Winnipeg and Halifax will get one near the end of March.

LONDON — Wesfarmers’ first U.K. store under the Bunnings banner is set for a soft launch this weekend. The St Albans, Hertfordshire, store is opening a year after the banners entry into the U.K. and Ireland, the Australian Financial Review reports. According Richard Goyder, Wesfarmers’ managing director, the pilot store “looks terrific”, but further conversions of Homebase stores to Bunnings will keep pace with consumer testing. The company wants to avoid the fate of Masters Home Improvement, Lowe’s failed joint venture with Woolworths in Australia. The new European stores are smaller in format than Bunnings’ Australian warehouses.

SUPPLIER NEWS
ST. PAUL, Minn. — 3M’s sales for the final quarter of 2016 rose 0.4% to $7.3 billion, while total sales for the year were $30.1 billion. Operating income was $1.7 billion and operating income margins for the quarter were 22.7%. In total, net income for the quarter amounted to $1.2 billion. Total sales for the year dipped by 0.5% but acquisitions, net of divestitures, increased sales 0.8%, leading to a 7.7% increase year over year in earnings to $8.16 per share.

CHICAGO — MRO wholesaler Grainger reported year-end sales of $10.1 billion, up 2% over 2015. Net earnings declined 21% to $606 million. Earnings per share of $9.87 were down 15%. Sales in the fourth quarter at Acklands-Grainger, the company’s Canadian business, fell 11% in U.S. dollars and 9% in local currency. Sales to all Canadian customer end markets were down versus the prior year.

CALGARY — Ply Gem, the North American window and siding maker, has unveiled a redesigned website for the Canadian market. It features case studies and reno projects that cover Ply Gem’s entire Canadian portfolio of window, door, and siding products and tools. Available at www.plygem.ca.

PEOPLE ON THE MOVE
Lowe’s head office in Mooresville, N.C., Jocelyn Wong has been appointed chief marketing officer. Wong most recently served as senior VP and general merchandising manager for the seasonal business. She will report to Michael P. McDermott, chief customer officer, and succeeds Marci P. Grebstein. Also at Lowe’s, Marshall Croom, a 20-year veteran of the company and chief risk officer since 2009, has been promoted to the position of CFO, effective March 3. Reporting directly to Chairman, CEO, and President Robert Niblock, Croom will replace Robert Hull Jr., who is retiring after 17 years at Lowe’s.

CORRECTION: In last week’s issue, we announced the appointment of Patrick Goodfellow as CEO and president of Goodfellow. We incorrectly named the predecessor to outgoing CEO Denis Fraser. That individual was Richard Goodfellow. We apologize for the error. 

ECONOMIC INDICATORS
In the U.S., housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,210,000. This is 0.2% below November, but is 0.7% above the December 2015 estimate of 1,201,000. (U.S. Commerce Dept.)

NOTED
The 22nd annual Hardlines Conference will be held November 14 to 15 in Niagara Falls, Ont. Mark your calendars now! (We’ll be announcing some amazing presenters for the conference in next week’s issue, so stay tuned! —Editor)

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