April 3, 2017 Volume xxiii, #14

“No bird soars too high, if he soars on his own wings.”

IN THIS ISSUE:

• Canac eyes Ontario, but Montreal market is next for the giant retailer

• Craftsman sale to Stanley could be jeopardized if Sears goes bust

• Seeking a unified national agenda, CRBSC holds forum in Halifax

• National Hardware Show boosts offerings for independent dealers

• PLUS: Storesupport announces new partnership, Doug Bitter at Taiga, CanWel raising money for more acquisitions, CHHMA AGM, Tembec to invest big in Quebec, Target to open first “reimagined” stores, Bosch deals with patent case, home sales in the U.S., and more!
  
  

Canac eyes Ontario, but Montreal market is next for the giant retailer

QUEBEC CITY — One of Quebec’s largest independent chains is committed to getting even bigger still. Groupe Canac’s president, Jean Laberge, wants to continue expanding his chain by adding new stores. And when he’s finished with Quebec, he sees no reason why he couldn’t start putting stores across the border in Ontario.

Canac has even translated its website and flyers into English in anticipation of a 2019 opening in an Anglophone market, though negotiations for a site continue. But for now, he says, the company’s focus remains on Quebec, at a pace of about two stores a year, something that Canac’s infrastructure can manage and maintain over the next two to three years. Each store costs up to $6 million and employs 90 staff.

With sales reaching $600 million from two dozen stores throughout the province of Quebec, the privately held Quebec City-based company will finish filling in the market in its home town in 2018, with plans for a store in Pont-Rouge, on the west side of the city. He adds that the Pont Rouge location will pretty much fill in the Quebec City market. “It is now well-served by Canac.”

For 2017, the retailer will open in St. Hubert, a neighbourhood in Longueuil, which also puts a store within the greater Montreal market. The other store to open this year will be in Thetford Mines.

Craftsman sale to Stanley could be jeopardized if Sears goes bust

HOFFMAN ESTATES, Ill. — Sears, the iconic department store chain, reported financials for 2016 that have put the company’s future in doubt among investors. In its latest annual report, the company indicates that it is having trouble managing the red ink. It lost $2.2 billion in 2016, and hasn’t turned a profit since 2010. Debt has grown to $4.2 billion, up from $3 billion a year earlier.

Shares in Sears Holdings fell by up to 16% on the admission of “substantial doubt” about its ongoing solvency. But an added wrinkle could be the fate of its venerable Craftsman tool brand, the sale of which had already been announced to Stanley Black & Decker. The company warned that the sale could be “voidable, in whole or in part” should a court in future decide either that Sears was already insolvent at the time of the sale, or that the sale caused or contributed to its insolvency.

The $900 million deal to sell off Craftsman was announced in January and finalized on March 9. It involved a $525 million payment at closing, to be followed by another $250 million at the end of the third year. Annual payments ranging from 2.5% to 3.5% of Craftsman sales will also be made to Sears for the next 15 years.

U.S. bankruptcy laws require judges to scrutinize recent sales in order to determine whether the proceeds should have gone to creditors instead. If the sale is ruled to be a “fraudulent conveyance,” Stanley could be compelled to “turn over value to other entities involved in the transaction and contemplated transactions for the benefit of unpaid creditors,” according to the filing.

Stanley Black & Decker CEO James Loree acknowledged that the deal “has been a challenging transaction from the standpoint of risk management” but affirmed that his company has had “excellent legal support and we think we’re in a very good place.”

Seeking a unified national agenda, CRBSC holds forum in Halifax

HALIFAX — The  confederacy of regional LBM associations, the Canadian Retail Building Supply  Council, met last week in Halifax with a group of representatives from across the industry. Called the CRBSC Leadership Summit, the event was held during the Building Supply Expo of the Atlantic Building Supply Dealers Association, and hosted by ABSDA President Denis Melanson.

The associations within the CRBSC, the ABSDA in Atlantic Canada, AQMAT in Quebec, the LBMAO in Ontario, WRLA in the West, and the BSIA of British Columbia, are 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 organization invited input from other industry leaders at this summit.

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

Darveau, in his comments to the group, noted that the five associations have had a long and amicable relationship through the years. But aside from sharing information and some best practices, they never worked together in a cohesive manner—until now.

Darveau and his colleagues from the other associations met personally last winter with leaders from many of the industry’s top retail groups, including Home Hardware, Lowe’s Canada, Groupe BMR, and Castle Building Centres. “It was obvious that each and all of these buying groups’ CEOs were fed up with not having a pan-Canadian organization to defend their collective interests, and those of their affiliated stores and other stakeholders,” Darveau said.

These retail groups are committing resources and money to support initiatives of a unified CRBSC, he said, in favour of a permanent tax credit for renovation, along with a press relations and political representations. He admitted that progress has been slow. “The reality is that, while we probably work more intelligently in groups than alone, we walk a lot less quickly!”

However, he added, a number of concrete steps have been taken already, including securing a registered trademark in both languages, and a legal existence in accordance with the federal Not-for-profit Corporations Act, with headquarters in Ottawa.

National Hardware Show boosts offerings for independent dealers

NORWALK, Conn. — The giant National Hardware Show, which will be held May 9 to 11 at the Las Vegas Convention Centre, is working hard to create reasons for independent home improvement retailers to attend, by offering them more to see, do, and learn about.

“There are a large number of independent retailers within the home improvement industry,” says Rich Russo, vice president of the National Hardware Show. “At the show, we offer networking events, complimentary education sessions, new products, buying opportunities, and more for these independent retailers to take advantage of during just one trip.”

While the presence of independents at this show continues to grow each year, independents from Canada are just starting to catch on. Home Hardware Stores has hosted a junket of about a dozen of its members in recent years, and larger chains, including Peavey, UFA, and members of Independent Lumber Dealers Co-operative, have also been regulars at the event.

Besides aisles filled with exhibiting vendors, the show features an All-Industry Conference, with a full schedule of seminars that will be presented by the North American Retail Hardware Association at the NRHA Village stage.

The NRHA Village has been designed as the go-to area of the National Hardware Show to connect with other independent retailers. NRHA is an association dedicated to helping independent retailers become better and more profitable retailers, and at the Show, NRHA will host a variety of complimentary sessions and awards programs on its Village Stage. The Village Stage will be located in the lobby of the convention centre, next to the Central Hall.

Independent retailers should also stop by the Village for the NRHA Independent Retailer Reception on May 9. This reception will provide an opportunity for independents to network with each other and talk more about the successes and challenges they face with their businesses.

New for this year, exhibitors that sell to independent retailers can mark themselves as such and will be provided as recommendations to the independents looking for specific products.

(Click here to register now for the National Hardware Show.)

DID YOU KNOW…?

...the top buying influences for Lowe’s, RONA, and Reno-Depot want to meet new and existing vendors at our 2017 Meet the Buyers Breakfast? This vendor-only event will feature: Alan Blundell, Divisional Vice President, Merchandising, Lowe’s; Marc Gingras, Divisional Vice President, RONA Proximity Stores; Christian Dauphinais, Divisional Vice President, Merchandising for Reno-Depot; and Igor Halencak, Vice President National Procurement, Central Merchandising, and Global Sourcing, Lowe’s Canada. It’s being held at the Hilton Mississauga Meadowvale Hotel on April 26. (Click here now to reserve your spot!)

RETAILER NEWS

JOLIETTE, Que. — Groupe Patrick Morin opened its 21st store last week, in Saint-Eustache in the Laurentides region. The 80,000-square-foot outlet represents a $15 million investment on the part of the family-owned company. According to GM Daniel Lampron, the store will create about 100 local jobs. (Daniel Lampron, general manager of Patrick Morin, will be one of our keynote speakers at the 22nd annual Hardlines Conference in Niagara Falls, Ont., November 14 to 15. For more information on all our speakers and conference registration, please click here.)

ST. JACOBS, Ont. — Home Hardware’s 2017 Spring Market, which is being held April 2-4, will highlight Canada’s 150th anniversary of Confederation. Under the theme “Strong and Free,” the event will include a tour of Home Hardware’s St. Jacobs distribution facility and talks by Craig Geerlink and Adam MacLeod of Geerlinks Home Hardware Building Centre in St. Thomas, Ont. A keynote address by actor and comedian Colin Mochrie will close the three-day Market.

MINNEAPOLIS — Target is set to open the first of its “reimagined” stores this year outside Houston. The dual-concept stores will feature two separate entrances and two distinct areas—one for leisurely shopping and one for convenience shoppers buying groceries and picking up online orders.

SUPPLIER NEWS
MISSISSAUGA, Ont. — Storesupport has announced a new partnership with Marketing Force, a Canadian digital marketing agency, to expand the retail merchandising services that Storesupport offers to brands. With this partnership, Storesupport will be providing a range of new digital services, which include brand management, brand ambassadors, and retail merchandisers.

VANCOUVER — CanWel Building Materials is putting almost six million common shares up for sale. The net proceeds of the offering are expected to be used to reduce debt under the company’s existing revolving credit facility. This line of credit will be used to fund potential acquisitions and for general working capital requirements. CanWel is looking at additional acquisitions of U.S. and Canadian pressure-treated wood operations.

SCARBOROUGH, Ont. — The spring conference and annual general meeting of the Canadian Hardware and Housewares Association will be held April 11, at the International Centre in Mississauga, Ont. Keynote presentations at the conference will include: “Economic and Financial Outlook—an economic review of the Global, U.S. and Canadian economies and the key aspects moving forward;” “Changing Retail Trends & Shopping Patterns; The Trump Effect;” and “How Digital & Mobile is Impacting the Retail.” (Click here to learn more and to register.)

FARMINGTON HILLS, Mich. — Bosch has reiterated its stance that its Reaxx Table Saw is compliant with existing patents, in the face of a U.S. International Trade Commission ruling that would end imports of the product. The original complaint against Bosch was filed by SawStop LLC, which developed technology to prevent injury while using a table saw. Distributors who have previously purchased the saws from Bosch are not impacted by the order and can continue to market and sell them to end users. Bosch will also continue to provide distributors and end users with repairs and support for previously purchased saws. The ban remains in place pending appeal.

MONTREAL — Tembec has announced a four-year, $136 million capital investment program in its Quebec facilities to improve competitiveness, centered on its specialty cellulose pulp operation at the Temiscaming manufacturing site. This investment qualifies Tembec to benefit from electricity rebates applicable to large industrial power users. The company will be reimbursed up to $55 million, representing 40% of the $136 million investment.

ECONOMIC INDICATORS
Following a 2.8% drop in January, sales of existing homes in the U.S. were up 5.5% in February, reaching the second-highest level in a decade. February’s sales were up 2.6% year over year. (U.S. Census Bureau)

PEOPLE ON THE MOVE
Doug Bitter has joined Taiga Building Products as a sales representative, managing the building materials wholesaler’s moulding division in Ontario. Previous to this, he spent more than a decade at RONA, most recently as a negotiator for millwork.

OVERHEARD…
“This financing provides us the equity capital for our continued strategy of acquiring established pressure-treated wood operations across North America and consolidating our industry. The attractive valuations, higher margins, and potential for integration with existing wood treatment and forestry operations make this ongoing roll-up initiative accretive to CanWel.”
—Amar Doman, chairman and CEO of CanWel, on the company’s announcement that it will raise money by selling common shares worth $35 million.

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