June 19, 2017 Volume xxiii, #25
“You miss 100% of the shots you don’t take.”
―Wayne Gretzky (aka “the Great One”, Canadian former professional hockey player and former head coach, 1961- )
-
Kenroc at 50: there for the birth of the drywall industry
-
Sears Canada: is the end nigh?
-
Pay attention to change: what we learned at the Global DIY Summit
-
Appointment notice at Hardlines
-
PLUS: RCR restructures sales force, Intertape to buy Cantech, Home Hardware stores make changes, Ikea to double store count, Lowe’s lays off in Mooresville, housing starts slip, HBC takes a hit, Ace scores with customer satisfaction, and more!
Kenroc at 50: there for the birth of the drywall industry
REGINA — In the mid-1960s, a dramatic change occurred in the way houses were being built in North America. The time-honoured and specialized skill of the wall plasterer was being replaced by pre-fab plaster made of crushed gypsum. Drywall was rapidly becoming the norm, but it was prone to breakage, making it difficult to handle and ship.
Ken Sexton recognized the future of the drywall business. He quit his job at Bird Building Supplies in Calgary, sold the family cottage, and borrowed $3,000 from the bank to fund the startup of Kenroc Building Supplies. The first location was on North Railway Street in Calgary. The building, says Kenroc President Brian Kusisto, was only big enough to fit three people. If a customer ever came in, someone would have to step outside. The only other structure onsite was an outhouse.
That was 50 years ago. Today the company has grown to 16 locations in Western Canada and sales well in excess of $100 million. (In 1985, Sexton founded the Sexton Group, as well.) At 88 years of age, he has stepped back from running the business. But that hasn’t stopped the company from celebrating the anniversary with a series of events at its stores.
The celebrations started, says Kusisto, in early May, and are being held for the benefit of both customers and staff. Four locations have already hosted events. Kenroc’s four outlets in British Columbia’s Lower Mainland will combine efforts, as will the two Calgary stores.
As for the future, the company will continue to grow “opportunistically,” says Kusisto. “One of our strengths is the ability to quickly identify opportunities, assess them, and act on them quickly,” he adds. “I think our coverage of Western Canada is fairly complete so I don’t think we have any defined plans for the West.”
He adds that he doesn’t expect Kenroc to expand into Eastern Canada any time soon, though he doesn’t rule anything out―should one of those opportunities present themselves. “But going farther from our base would require critical mass.”
 |
 |
Sears Canada: is the end nigh?
TORONTO — Sears Canada reported a first-quarter net loss of $144.4 million, more than double the loss suffered in Q1 2016, when the legendary retailer incurred a loss of $63.6 million. Then, results were boosted by sale and leaseback transactions.
Same-store sales in the latest quarter rose by an encouraging 2.9% but revenue declined by 15.2% to $505.5 million. The retailer attributed the disparity primarily to lower revenues from its Direct business, due in part to cuts in product offerings and pick-up locations based on lower demand.
Eddie Lampert, controlling shareholder of U.S. parent Sears Holdings, has admitted that he would consider selling the Canadian business. Sears Holdings sold off part of Sears Canada in 2012, but still maintains an ownership stake.
In the U.S., Sears Holdings is not faring much better, despite posting its first quarterly profit in almost two years (Q1 profits got a lift from cost-cutting measures and the sale of the Craftsman line of tools). At the same time, sales for the quarter continued to decline, falling 12.4% at Sears stores and 11.2% at Kmart.
Nor is the slight lift in Q1 enough to counter the big-picture bad news. Sears Holdings suffered a $2 billion loss in 2016, and announced internally last week that it would close 72 additional retail locations by September. The closures are in addition to the 180 stores the retailer has shuttered since the beginning of the year. Included in this most recent round of closures are 16 Sears stores and 49 Kmart stores, which will bring the total store count down to about 1,200 from 2,073 in 2012—a loss of about 42% of the retailer’s stores over five years.
 |
 |
Pay attention to change: what we learned at the Global DIY Summit
BERLIN — The fifth annual Global DIY Summit concluded in Berlin last week. This year's motto was “A New Era—a Glimpse into the Future of Home Improvement”. Presentations included the use of digital platforms as new business models worldwide, political and economic forecasts in the wake of the Trump presidency and Brexit, how a company should start its own digital transformation, the promising future for the garden sector, and a global overview of home improvement stores around the world.
The summit was hosted by three international organizations: the European DIY Retail Association (EDRA), the European Federation of DIY Manufacturers (fediyma), and the Global Home Improvement Network (ghin). Three Canadian companies were in attendance at the event; one of them was HARDLINES.
The general perception of the global economy was positive and most of the speakers forecast more innovation and growth within the coming years.
The first day culminated with a Gala Dinner and the presentation of the Global DIY Lifetime Award. This year’s award went to Gregory M. Bridgeford, former Executive Vice President of Business Development and Chief Customer Officer at Lowe’s. In his acceptance speech, Bridgeford spoke to delegates about the importance of networking and how much Lowe’s had learned from the best practices of other home improvement companies from around the globe.
Presenters shared a wealth of insights. According to Obi President Sergio Giroldi (shown here), Amazon will soon take over as the market leader in home improvement. Traditional dealers will have to embrace this future or go out of business. To do that effectively, he urged delegates to use technology to transfer customers into “fans”. In Europe, he said, the majority of people have their basic needs met, so they are more likely to be looking for wishes than needs. “We have to think about the future, not about our past,” he added. “Our mission is customer satisfaction.”
Stephen Collinge of Insight Retail Group warned delegates to prepare for “huge turbulence ahead,” as 52% of the Fortune 500 companies from 2000 are now gone. “They were out-innovated. They couldn’t simplify.”
He shared yet another startling fact: the Bank of England has forecast that 15 million jobs in Europe will be replaced by technology within the next decade. To reinforce his point, he shared that, just a week earlier, Tesco had made its first robot delivery in a driverless car.
The next Global DIY Summit will be held in Barcelona June 13 to 14, 2018. More than 67% of the delegates confirmed their participation in next year's Summit.
 |
 |
Appointment notice at Hardlines
We are pleased to announce the promotion of Sigrid Forberg to the role of Editor at Hardlines Inc. Sigrid joined us just over two years ago as Managing Editor. Since then, she’s proved herself an indispensable part of the Hardlines Team.
She is responsible for all aspects of the editorial content of our print magazine, Hardlines Home Improvement Quarterly, including creative, scheduling, story ideas, and selection of new product submissions. In addition, Sigrid oversees production of our weekly HARDLINES e-newsletter. She also supports a wide range of research and event-planning functions.
Sigrid is a graduate of the Carleton University School of Journalism. Before joining Hardlines, she wrote and edited for the Royal Canadian Mounted Police (RCMP)’s internal magazines. She brings with her a wealth of experience in writing, an innate curiosity, a sharp eye for typos, a keen interest in storytelling, and strong research skills.
If you have a story idea or a new product, please contact Sigrid directly at the Hardlines World Headquarters.
 |
DID YOU KNOW…?
...that you don’t have to wait until next Monday for the latest industry news? We send out free Daily News throughout the week. Click here right now to sign up for your free Daily News updates. (Did we mention that they’re free?)
 |
 |
RETAILER NEWS
BURLINGTON, Ont. — Ikea Canada’s new president says the chain plans to double the number of its stores in Canada by 2025. Speaking to the press for the first time since taking the helm, Marsha Smith, who previously ran Ikea in Ireland, said she still sees life in the bricks-and-mortar concept. She told the Canadian Press the banner’s goal is to have 24 stores by 2025, though at present only two openings have been confirmed: in Halifax later this year and Quebec City by the summer of next year. The company has already broken ground on the Quebec City location.
ST. JACOBS, Ont. — Morris Home Hardware in Morris, Man., celebrated its grand opening last week with a ribbon cutting and sales event. Purchased in 2015, the initial location had three buildings, two of them across the street. The store expanded from 6,000 square feet to 10,000 square feet and moved everything under one roof. Home Hardware Stores has also added a new member in Arviat, Nunavut. Eskimo Point Lumber Supply Airport Services has been an independently owned lumber supply company for more than four decades. Dealer-owners Don and Ryan St. John plan to move into a new, larger store to replace the current one, which totals about 5,000 square feet.
MOORESEVILLE, N.C. — Lowe’s has laid off about 125 of its corporate technology employees and will move many of their positions to Bangalore, India. The layoffs are the latest in a series of staff cuts for Lowe’s, which has eliminated about 3,000 jobs already this year. The most recent job reductions had reportedly been planned years in advance to cut costs.
OAK BROOK, Ill. — J.D. Power’s 2017 U.S. Home Improvement Retailer Satisfaction Study has ranked Ace Hardware “Highest in Customer Satisfaction among Home Improvement Retail Stores” for the eleventh year in a row. Ace has been awarded this ranking by J.D. Power every year since the inception of the survey in 2006. The study is based on responses from 2,751 U.S. consumers who purchased home improvement products or services over the past 12 months. Ace ranked highest among major retailers with an overall satisfaction index score of 835 on a 1,000-point scale.
BRAMPTON, Ont. — Hudson’s Bay Co. posted Q1 retail sales of $3.2 billion, a decline of $100 million or 3%, while announcing it would increase the number of planned layoffs to 2,000. The company had previously indicated plans for reorganization in February. HBC’s quarterly loss of $221 million widened from $97 million. North America’s oldest company announced at the same time that it would put in place separate executive chains of command for its Bay and Lord & Taylor banners.
SUPPLIER NEWS
BOUCHERVILLE, Que. ― RCR, a legacy brand in Quebec for more than 70 years, has announced it will reorganize its sales structure, with changes effective by the end of summer. “Our growth and expansion over the years has resulted in an unprecedented level of complexity, requiring that our sales representation team be only formed of the most seasoned and versatile experts,” said Frédéric Guay, executive vice president of sales for RCR. As a result, the company will bring its sales in house for British Columbia, Ontario, and Quebec. Dymon Sales will continue to handle Saskatchewan and Manitoba, while KM Agency will continue with the RCR accounts in Atlantic Canada. RCR carries more than 3,000 products under the following brands: Climaloc, Easy Screen, Essentia, Polar Grip, Seal-a-Crack, Topsi, and T-REX.
MONTREAL — Intertape Polymer Group has announced an agreement to acquire Canadian Technical Tape, a privately owned supplier of industrial and specialty tapes doing business as Cantech. The approximately $63 million purchase will be accompanied by an increase in Intertape Polymer’s borrowing capacity from $300 to $450 million. The acquisition will increase the company’s product offerings and distribution channels.
NEW BRITAIN, Conn. — Stanley Black & Decker executives joined with Tennessee state officials last week to announce that the company will spend $29 million on improvements to its Jackson, Tenn., plant. The investment includes 255 new jobs at the facility, and the restoration of its 50,000-square-foot distribution centre to full service. The upgrades are designed to transform the site into a “lighthouse” facility for the manufacturer, a model for new techniques and processes.
ECONOMIC INDICATORS
The standalone monthly rate of housing starts (seasonally adjusted) was 194,663 units in May, down from 213,498 units in April. Urban starts decreased by 10.2% to 178,518 units. Multiple urban starts decreased by 10.8% to 118,694 units in May and single-detached urban starts decreased by 8.9%, to 59,824 units. Rural starts were estimated at a seasonally adjusted annual rate of 16,145 units.(CMHC)
PEOPLE ON THE MOVE
Masco Canada has welcomed two new members to its trade sales team. Gilles Rousseau joins as Eastern Regional Sales Manager. Previously Director of Sales for J. Pierre Sylvain Agency Inc. for 10 years, he will now be responsible for management and implementation of brand strategies for the Eastern region, which consists of Quebec and the Atlantic Provinces. Jad Badine joins as Director of Commercial Business Development, and will be responsible for establishing and leading the overall business development plan for Masco Canada’s institutional, commercial, hospitality, and property management segments. He was previously at TPC Wire & Cable.
NOTED
In the 1950s, T. Eaton Co. accounted for about half of all retail sales in Canada. Most of the company’s assets were sold to Sears Canada in 1999.
OVERHEARD…
“He’s very much a student of the business, and—in his day—very much active in every aspect of the business. He has always been driven by ‘how do we make it better?’”
—Brian Kusisto, president of Kenroc Building Materials Co., on the legacy of the company’s founder, Ken Sexton, after 50 years in business.