December 18, 2017 Volume xxiii, #47

“Then the Grinch thought of something he hadn’t before. Maybe Christmas, he thought, doesn’t come from a store. Maybe Christmas, perhaps, means a little bit more!”
—Theodore Geisel (aka Dr. Seuss, American author and illustrator of children’s books, 1904-1991)

HOLIDAY PUBLISHING SCHEDULE: This is our last issue of 2017. We’ll return to our regular weekly schedule with the January 8, 2018 edition. Here’s wishing you, our Faithful Subscribers, a very happy holiday from everyone at the Hardlines World Headquarters. Thank you for your support throughout 2017. We’ll see you again in the New Year!
—Katherine, Sigrid, David, Beverly, Michelle, and Michael

IN THIS ISSUE:

• Buying groups shuffle members, strive for growth as year draws to a close

• Sylvain Prud’homme’s international appointment fits a long-time Lowe’s strategy

• An industry legacy: Alan Schoemperlen retires from Castle

• PLUS: North American Lumber deal falls through, TIMBER MART’s newest member, Lowe’s Canada converts third RONA big box, Home Hardware one of Canada’s Most Trusted Brands, Renfrew Castle dealer acquires second location, Richelieu Hardware will buy back shares, Regal ideas joins forces with HGTV celeb, Weiser Lock and Alliance Door Products, Vicwest Building Products, Apex rebrands lines under Crescent, Marty Hawthorn retiring from Johns Manville, Power Marketing appoints Ralph Jenkins, housing starts, and more!
  
  

Buying groups shuffle members, strive for growth as year draws to a close

SPECIAL REPORT — In recent weeks, readers of these pages may have noticed an uptick in announcements from the buying groups of newly signed members. Some of these announcements are new ventures, but more likely they’ve been recruited from other banners.

Why is this time of year so busy for switching? The main reason would have to be the rebates, which are distributed at year end.

Changing buying groups can be as much a personal choice as a business decision. Each group, despite its similar aim to pool the buying power of its members to reduce costs and increase rebates, has its own personality. It’s a sense of belonging that comes as much from fellow members as from the leaders of the groups themselves. But that sense of belonging works two ways. “Our recruiting strategy is based on filling the geographic gaps in our national membership base,” says Steve Buckle, president of Winnipeg-based Sexton Group. “We look for potential members with financial stability, business acumen, and who understand the role a good buying group can play in their business.”

Buckle says Sexton Group will have 20 new members by year end. “This is at the high end of a normal recruiting year for us. Our purchase volumes are up about 15% in 2017, some due to price appreciation and most due to our membership base growing their sales—and thus purchase volumes.”

Other groups are reporting growth in 2017, as well. Dunc Wilson, director of national business development at Home Hardware Stores Ltd., says his co-op brought in 14 new locations this year, resulting, he adds, in healthy increases in Home’s overall volume. “Looking to 2018, it is shaping up to be a banner year for our growth strategy. Quebec is a key market for this strategy.”

While Lowe’s has been making news with store conversions and additions to its big box Lowe’s format, it has a lot riding on growing its independent dealer base. Alain Brisebois, executive vice president, affiliate dealers and operations–central services at Lowe’s Canada, says 2017 “has been a year of solid growth for Lowe’s Canada, as many milestones have been achieved to strengthen our position, namely in the independent affiliate dealer segment with the RONA and Ace banners.”

Brisebois points to the success of the Ace program, which “has also been extremely active recruitment wise, introducing novel programs for its dealers. In 2017, Lowe’s Canada will have added more than 40 new stores under the RONA and Ace banners, he adds.

While dealers continue to switch allegiances, newcomers are an important part of each group’s growth strategy. Castle has been particularly successful partnering with start-ups in the past year, including a new store in Newfoundland and Labrador and one in Quebec. Overall, Castle reports that it enjoyed “tremendous growth in 2017,”  adding 21 new member locations across Canada. The group’s purchase volumes for the year are up 11% over 2016.

Owners will come and go, bringing new biases and partisanship to the helm of retail businesses across the country. And a new generation of owners is leaving behind many of the often deep-felt loyalties of their predecessors, guaranteeing that the recruitment game will continue unabated in 2018.

Sylvain Prud’homme’s international appointment fits a long-time Lowe’s strategy

MOORESVILLE, N.C. — When Sylvain Prud’homme, president and CEO of Lowe’s Canada, was named president of Lowe’s international operations, the appointment no doubt reflected confidence in the Canadian operations by Lowe’s head office in Mooresville, N.C. It also reflected an ongoing reliance on the Canadian business to provide Mooresville with a bigger perspective to drive the company’s fortunes outside of the U.S.

With this new role, Prud’homme will now be responsible, along with Canada, for Lowe’s business in Mexico, with the president of Lowe’s Mexico reporting to him.

But Lowe’s has a history of using its Canadian leaders to take on further international duties. Don Stalling was the second president of Lowe’s Canada. After successfully expanding the company’s business in the Southwest, he was sent up from Texas to run Canada. He had a steady, if unspectacular, run here, from 2007 to 2009, as the company’s expansion efforts were dampened by the effects of the worldwide recession and a shortage of good real estate.

Nevertheless, with this international experience, Stallings was then sent to Australia to oversee a joint venture with Aussie retailer Woolworths. That business included the acquisition of a hardware wholesaler, Home Hardware and Timber, and the rollout of a big box chain under the Masters name. That business was folded after four years and a combined investment by Lowe’s and Woolworths of US$2 billion.

Prud’homme joined as president of Lowe’s Canada in 2013 and, following the acquisition of RONA in 2016, was named president and CEO of Lowe’s Canada. He is responsible for driving the Canadian home improvement business for Lowe’s, including RONA’s network of stores and independent dealers.

Prior to Lowe’s Canada, Prud’homme served as executive vice president of operations and merchandising for Loblaw Companies Limited. He was also president of western operations for Sobeys Inc. and spent several years as senior vice president of operations and merchandising for Walmart Canada.

An industry legacy: Alan Schoemperlen retires from Castle

MISSISSAUGA, Ont. — It’s been a good run. At least that’s how Alan Schoemperlen would recall his 17 years working at Castle Building Centres Group Ltd. And now he’s retiring at the end of this year.

But Schoemperlen’s involvement in the industry goes back beyond that, to his days working at TruServ Corp. (now Ace Canada), then headquartered in Winnipeg.

At the time, TruServ was a designated supplier for Castle, an arrangement which found Schoemperlen working closely with many of the Castle dealers. He was also actively aware of the recruitment needs of Castle in the West, where the group considered itself under-represented. The hiring was spearheaded at the time by Castle’s president Pro Wylie and his national business manager, Ron Marchetti. While staying in touch with Marchetti about the hiring process, Schoemperlen himself ended up being handed the job.

As business development manager at Castle for its Western business, he has travelled the West tirelessly. Within the first year of his tenure at Castle, Western membership increased from 29 to 40 dealers. Through the years, Schoemperlen’s forged strong loyalties among dealers there.

Schoemperlen began eyeing retirement at the end of 2015. During the following year, plans were put in place to establish his replacements in the field. Since then, he has been serving in a mentoring role for the two individuals who have taken over his territories. Matthew Raetsen is business development manager for Manitoba and Saskatchewan. He joined in May 2016 and was formerly with Ply Gem Canada. Brad Dixon joined Castle in June of this year as business development manager for British Columbia and Alberta. His background includes working at Chalifour Canada, and later Orgill Canada. Before that, he was part of the management team at IRLY Distributors.

Of his time at Castle, Schoemperlen says, “It was really great. I loved every minute of it.”

(Shown here: When Alan Schoemperlen joined Castle in 2001, HARDLINES was there to take the photograph!)

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RETAILER NEWS

WINNIPEG — A deal to acquire North American Lumber has fallen through. In July 2017, Mill Street & Co., through its subsidiary the Fastway Group, entered into a purchase agreement to acquire the business operations of North American Lumber. However, the two sides were not able to come to an arrangement. Martha Konantz, president of North American Lumber, says the company will continue to operate its 11 locations in North Western Ontario, Manitoba, and Saskatchewan. The company has been in existence for 110 years and Konantz represents the fourth generation of the Konantz family to lead the company. She says she will continue to look for a succession plan that will successfully transition the company to new ownership.

VAUGHAN, Ont. — TIMBER MART’s newest member is WinCa Building Supplies, a 54,000-square-foot operation in Mississauga, Ont. This new large-surface LBM dealer will carry a wide selection of building materials, lumber, and lumber products, and will market to both DIYers and contractors with 30 full- and part-time staff. WinCa will open its doors at the beginning of 2018 and will host an official grand opening in the spring.

BOUCHERVILLE, Que. — Lowe’s Canada has converted its third RONA big box to the Lowe’s banner, this one in Calgary. Meanwhile, the former RONA Entrepôt in Sherbrooke has been converted to the Réno-Dépôt banner, following a three-month renovation.

ST. JACOBS, Ont. — Home Hardware Stores has been recognized as one of Canada’s Most Trusted Brands for hardware stores in Canada as BrandSpark International has unveiled its 2017 Most Trusted Award recipients. BrandSpark researchers analyzed the responses of more than 5,000 participants and their reasons for trusting the retailer or service. 

MISSISSAUGA, Ont. — Wood Works of Renfrew has acquired a second location, in Burnstown, Ont. Bruce Gannon and Laurie Wichers-Schreur, co-owners of Wood Works, which is already a member of Castle Building Centres Group, will add Burnstown Building Supplies as the newest Castle location in the Ottawa Valley. The Burnstown location is about 15 kilometres from the Renfrew store and will provide a similar range of lumber, hardware, and building supplies, plus some seasonal products. The store is being renovated for opening in March and a grand opening celebration in early June.

SUPPLIER NEWS
COLOGNE, Germany — Eisenwarenmesse, the International Hardware Fair, is inviting entries for its Eisen Award 2018. The award, for new product innovation by vendors attending the show, is given in two categories at the welcome party on the evening of the first day of the fair, March 4, 2018. The award was created to support and honour the innovative power and creativity of the industry. Deadline for submission is January 18, 2018. The International Hardware Fair will be held in Cologne, Germany, from March 4 to 7, 2018.

MONTREAL — Richelieu Hardware has announced that it will buy back some of its common shares. Under the issuer bid, the company may repurchase up to 1.5 million common shares for cancellation. That number constitutes 2.6% of Richelieu’s 57,795,603 issued and outstanding common shares as of the end of November. The purchases will be made over a maximum period of 12 months beginning on December 14.

DELTA, B.C. — Aluminum railing maker Regal ideas has joined forces with HGTV celebrity builders the Brolaws to create the winning entry at the 2017 Remodeling Show for Best Before and After Project. This year’s event showcased nearly 300 products and services from manufacturers. “This recognition is especially meaningful to us because it was an audience-voted award. Recognition was given by the contractors and builders that represent one of our largest target audiences.” said Ernie Couillard, EVP and president of Regal ideas.

MISSISSAUGA, Ont. — Weiser Lock and Alliance Door Products have entered into a distribution agreement that will see Alliance become an authorized distributor of Weiser products in Western Canada. Alliance is a family-owned and operated business with branches in Abbotsford, B.C.; Calgary; Edmonton; and Winnipeg. Weiser joins Lynden Door, Woodland Supply, and Alexandria Moulding among the brands in Alliance’s portfolio.

OAKVILLE, Ont. — Vicwest Building Products announced that it has received approval from the town of Stratford, Ont., to expand its manufacturing facility there, a project slated for completion in the second quarter of 2018. The expansion “allows Vicwest to amalgamate their Ontario-based operations into one centralized location,” Bernard Lewis, senior VP of operations, explained. “Currently, the industrial mills have been operating from our Oakville location. This buildout will allow for the Oakville mills to be moved to the expanded Stratford facility. The Oakville offices will be moving to a new facility in Burlington at the beginning of Q2 2018.”

SPARKS, Md. — Apex Tool Group is consolidating a range of its brands, grouping products from five hand tool brands together under the Crescent brand name. They are Lufkin tape measures, rules, and wheels; Wiss snips, scissors, shears, knives, and other tools; Nicholson files and saws; and H.K. Porter bolt cutters. The new identity program also introduces the tagline, “Trusted by the Trades,” aimed at promoting the brand’s reputation among pro customers.

WASHINGTON — The U.S. International Trade Commission has agreed unanimously in its final ruling that Canadian softwood harms domestic producers. The four commissioners sided with U.S. lumber lobbyists in keeping duties in place for the next five years, meaning that some $500 million in deposits won’t be returned to Canadian lumber producers. The B.C. Lumber Trade Council says it is preparing an appeal to the World Trade Organization, a process that could take years with no prospect of reimbursement for duties paid in the meantime.

PEOPLE ON THE MOVE
Marty Hawthorn is retiring from Johns Manville at the end of this year. As Ontario territory manager for JM, Hawthorn spent the past eight years promoting JM building insulation products to LBM distribution, gypsum supply dealers, contractors, and applicators. Prior to joining JM, he worked for 19 years at Taiga Building Products.

Power Marketing has appointed Ralph Jenkins as its new account manager for Eastern Ontario. Jenkins brings with him 25 years of experience in the plumbing and HVAC/R industry. He previously spent 19 years with GF Thompson. He will be representing products from Red Lion Pump Products, Firepower Metal Cutting & Welding Equipment, and Apache Hose & Belting on behalf of Power Marketing.

ECONOMIC INDICATORS
The standalone monthly seasonal rate of housing starts in Canada was 252,184 units in November, up from 222,695 units in October. The SAAR of urban starts increased by 14.4% in November to 235,412 units. Multiple urban starts increased by 16.9% to 175,016 units in November. Single-detached urban starts increased by 7.5%, to 60,396 units. Rural starts were estimated at a seasonally adjusted annual rate of 16,772 units. (CMHC)

Investment in residential construction totalled $35.8 billion in the third quarter, up 9.1% compared with the same period in 2016 and the largest increase since the fourth quarter of 2012. For the first time in five years, residential construction investment rose on a year-over-year basis in every province. Ontario, Quebec, and Alberta posted the highest increases in the third quarter. Renovation spending, which rose 8.1% to $15.5 billion, drove the increases in every province except Alberta and Prince Edward Island, where spending was led by investment in new single houses. (StatCan)

OVERHEARD…
“Finding the right new members can take time and so we must be patient. We owe it to our existing members and vendor partners to choose new Sexton Group members carefully.”
—Steve Buckle, president of Winnipeg-based Sexton Group, on the necessity of finding the right fit with new members, a challenge facing all groups as they seek to grow their ranks.

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