February 5, 2018 Volume xxiv, #5
“Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.”
—Groucho Marx (American comedian, actor, and author, 1890-1977)
IN THIS ISSUE:
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WRLA Buying Show charged with energy and plenty of deals
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TIMBER MART adds third commercial dealer in British Columbia
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Canadians heading to Cologne will get first look at global trends, innovations
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Ply Gem to be acquired by private equity firm
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PLUS: J.D. Irving to hire, Jacobs & Thompson acquires Worldwide Foam, Rob Jones joins Home Depot, sales up at 3M, third month of increases for retail in Canada, Stanley Black & Decker reports earnings, Home Depot hires, Amazon rules, Grainger’s annual sales, Sherwin-Williams reports increase, and more!
WRLA Buying Show features positive energy and plenty of deals
CALGARY — The annual Buying Show of the Western Retail Lumber Association (WRLA) came to a close late last month with increased attendance and a revived buzz on the show floor. With 248 exhibitors taking up 150,000 square feet in the BMO Centre in Calgary, retailers enjoyed two days of buying, networking, and learning.
New this year was the WRLA Live Stage, where 17 exhibitors featured their products and services through live demonstrations. The stage also featured four keynote speakers, headlined by Tom Deans, author of Every Family’s Business and Willing Wisdom. Deans addressed the intergenerational transition of family wealth, the importance of pursuing clarity, and planning for success when it’s time to exit the family business—an important and often overlooked topic in this industry.
Exhibitors brought the latest in the industry’s products and services to the WRLA’s Innovation Station. Featuring 30 of the newest products on the market, the area was a popular destination throughout the duration of the show. The show’s best new product, voted by the retailers, went to EcoPoxy Inc. for its GloPoxy glow-in-the-dark epoxy kits.
The WRLA gave away coolers by Coolest as part of a series of daily prize giveaways. Dealers received an entry ballot for each purchase order they placed. Ten dealers walked away with coolers that came equipped with speakers, plates, cutlery, and even a blender attachment for mixing drinks.
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TIMBER MART adds third commercial dealer in British Columbia
VAUGHAN, Ont. — TIMBER MART has strengthened its commercial arm in British Columbia with the addition of a new dealer, Central Construction Materials Ltd. Located on Vancouver Island in the community of Parksville, Central has been serving contractors and builders on the island since 2004 with a variety of building materials, including gypsum, insulation, steel, roofing, masonry, and siding.
Sitting on a three-acre property, the business has a 17,000-square-foot storage yard, as well as two buildings, and employs 17 full-time staff. “TIMBER MART will provide us with the buying power and programs we need to better compete in the commercial market,” says Allan Versteeg, buyer for Central. “We look forward to leveraging our partnership with TIMBER MART and growing our business on Vancouver Island.”
The commercial side is an important part of any group’s volumes. Castle has a commercial division, called Commercial Building Supply—or CBS for short—and members catering to commercial accounts are an important part of the memberships of groups like Sexton, TORBSA, and Delroc.
“Central Construction Materials joins our group alongside PacWest and Commercial Construction Supply in B.C. and represents our third commercial member in the province,” says Mark Finucane, vice-president of TIMBER MART’s commercial division. Pacific West Pacific West Systems Supply Ltd. (PacWest) has six locations in B.C. and two in Alberta; Commercial Construction Supply has stores in Abbotsford, Kelowna, and Vernon.
The addition of Central also marks an important gain for the buying group on Vancouver Island. In 2015, TIMBER MART lost one of its largest members, Slegg Building Supplies, a chain of 12 stores, when owner Ron Slegg and his family sold the business to WSB Titan.
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Canadians heading to Cologne will get first look at global trends, innovations
COLOGNE, Germany — A number of Canadians are preparing to travel to Cologne, Germany, next month to find new products and tap the very latest trends in home improvement retailing. The show is being held March 4 to 7 at the Cologne fairgrounds, along the banks of the Rhine.
Weighing in at a daunting 1.5 million square feet, the show will offer plenty of opportunities for rubbing shoulders with buyers from some of the largest retail DIY chains in the world. But vendors and buyers from Canada will also get a first glimpse of the types of product and merchandising trends that often show up in North America many months, or even years, later.
The show is being proactive this year in offering as many features and programs as it can.
High-tech innovations are typical in the power tool segment; this year watch for torque wrenches with a radio module for networked production, a technology that has finally gone past the testing stage. Industry requirements are demanding more complexity when calibrating specialized torque tools—yet another trend to watch for in Cologne.
Power tool technology is constantly driven by the need for more performance. Watch for 54-volt battery systems, compatible with 18-volt devices, at this year’s show.
Smart technology will figure throughout the show, as well. Smart home, the intelligent networking of different house functions, goes well beyond just an app that can be used to operate the blinds. Electronic products are becoming more and more compact, more convenient, more efficient, and more intuitive. LED technology enables cost-effective light output, while smart electronics now extend to remote switches with a self-learning coding that can be adapted to suit the individual needs of users.
Recognizing the importance of the “do it for me” movement, which is gaining popularity in Europe as it is here in Canada, the show will feature several manufacturers catering to that trend.
A tradition at the Cologne International Hardware Fair is the Canada Night International Reception, hosted by Hardlines. We’ll welcome Canadians, as well as guests from around the world, for a special night of networking, snacks, and Kölsch, the beer of the Cologne region. (For more information about Canada Night in Cologne, click here now!)
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Ply Gem to be acquired by private equity firm
CARY, N.C. & NEW YORK — Ply Gem and Clayton, Dubilier & Rice, a New York City-based private equity investment firm, have come to a definitive agreement under which Clayton, Dubilier & Rice will acquire all of the outstanding shares of Ply Gem common stock. The go-private transaction, valued at approximately $2.4 billion, was approved unanimously by Ply Gem’s Board of Directors. The agreement also provides for the payment of $21.64 per share in cash to all holders of Ply Gem common stock.
CD&R has also entered into a definitive agreement to acquire Atrium Windows & Doors. It will combine the two companies to create an exterior building products company with total revenue of more than $2.4 billion in 2017. The transactions are expected to close simultaneously in Q2.
Ply Gem’s headquarters will remain in Cary, N.C., and Gary E. Robinette, currently chairman and CEO of Ply Gem, will continue in his role. John Krenicki, a CD&R operating partner and former vice chairman of General Electric Company, will be appointed lead Director of the Board.
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DID YOU KNOW…?
... that Canadian retailers heading to Orlando, Fla., for the Orgill Spring Dealer Market are invited to be our guests at another Canada Night Reception? This one will be at B.B. King’s Blues Club on February 22, from 6:30 to 8:30 p.m. Join us, and our sponsors, for a beer, some snacks, and a chorus or two of “O Canada.” Click here for more info and to register! If you’re a vendor and want to join us as a sponsor, contact David Chestnut right away!
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RETAILER NEWS
SAINT JOHN — J.D. Irving is aiming to hire more than 9,400 new workers across Canada over the next three years, according to a release issued last week, as well as more than 1,000 in the U.S. The bulk of the new hires will be in the family-owned conglomerate’s home turf of New Brunswick, with 5,101 positions, and the other Atlantic provinces. The positions are in operations, shipping, supply and logistics, retail sales, and finance, including some at Kent Building Supplies.
BENTONVILLE, Ark. — Walmart is getting tougher on its vendors, with plans to announce even stricter penalties for incomplete fill rates. The company will expect large suppliers to deliver full orders within one or two days 85% of the time. Failure to meet the requirement with incomplete or inaccurate orders will result in a fine of 3% of the cost of delayed goods. In the past, suppliers had a 75% threshold before incurring fines. Smaller vendors will fare a little better. They will have to meet the on-time requirement 50% of the time, up from 33%. The change will take effect in April. Increased inventory management is one way Walmart and others are trying to compete online more effectively against Amazon.
NEW YORK — Amazon took 4% of all retail sales in the U.S. in 2017, with millennials driving sales in home and kitchen goods, according to e-commerce analytics company One Click Retail. Amazon further represented 44% of all that nation’s e-commerce sales, One Click reports.
TORONTO — The Home Depot Canada is looking to fill 7,000 full- and part-time and seasonal positions nationwide for its spring season. Over the coming weeks, all 182 Home Depot stores in Canada will host job fairs focusing on operations, including stocking, inventory, and sales.
SUPPLIER NEWS
TORONTO — Jacobs & Thompson has acquired the assets of Worldwide Foam, as part of its strategy of expansion into the United States. With this acquisition, J&T will now operate six facilities across the United States, with locations in Indiana, Kentucky, Georgia, Texas, and California. At the same time, the company announced that it will roll out its Zotefoams Platinum distributor program to all of its U.S. locations.
MAPLEWOOD, Minn. — Sales at 3M were up 9% in Q4, totalling $8 billion. Organic local-currency sales increased 6% while acquisitions, excluding divestitures, increased sales by 0.3%. Earnings of $0.85 per share were 55% lower than in the previous fourth quarter. Changes to federal tax law in the U.S. enacted during the quarter produced a net tax expense of $762 million, or $1.25 per share. Excluding this expense, earnings were $2.10 per share, or an increase of 11.7% year over year. For the fiscal year, sales increased 5.1% to $31.7 billion and EPS fell by 2.8% to $7.93.
NEW BRITAIN, Conn. — Stanley Black & Decker reported that earnings for the final quarter of 2017 rose to $281.5 million, or $1.84 per share. Earnings represented a 10.2% gain over the $255.5 million posted a year ago. Quarterly revenues increased by 16.8% to $3.41 billion, from $2.92 billion last year.
CHICAGO — W.W. Grainger saw annual sales reach $10.4 billion in 2017, up 3% from the $10.1 billion reported in 2016. Reported net earnings of $586 million represented a 3% decline from the previous year’s $606 million. EPS of $10.02 were up 2% from $9.87. Sales for the quarter amounted to $2.6 billion, a 7% increase from a year ago. In Canada, Acklands-Grainger’s sales rose 5% from a year ago in terms of U.S. currency, while the operating loss widened from 10% to 17%.
CLEVELAND — The Sherwin-Williams Co. had net sales of $14.98 billion in fiscal 2017, up 26.4%. For the fourth quarter, sales rose $1.2 billion, or 43%, to $3.98 billion due primarily to higher paint sales volume in the Americas and the addition of Valspar sales since the month of June. Excluding sales from Valspar, net sales from core Sherwin-Williams operations increased 5.6% for the year and 6.9% in the quarter.
PEOPLE ON THE MOVE
Rob Jones has been appointed divisional product merchant for major appliances, small appliances, and floor care at The Home Depot Canada. He was formerly at Sears Canada as division product merchant for major appliances.
ECONOMIC INDICATORS
Retail sales increased for the third consecutive month in November, rising 0.2% to $50.1 billion. Garden and building supplies recorded a seasonally adjusted decline of 0.9% from October but shot up 12.2% from the previous November. Overall, higher sales at gasoline stations, electronics and appliance stores, and general merchandise stores offset lower receipts at new car dealers. Excluding motor vehicle and parts dealers, retail sales rose 1.6%. After removing the effects of price changes, retail sales in volume terms increased 0.3%. (StatCan)
New condo sales in 2017 reached another record year in the Greater Toronto Area, and the seventh consecutive record year for investment property transaction value. Total new home sales in the GTA reached just over 44,000 units in 2017, the fourth-highest level on record. New condo sales overtook the previous annual record set in 2016 with just over 36,400 units in 2017. Conversely, new single-family home sales plummeted by 58%, with declines across all product types and in all five regions of the GTA. (Altus Group Real Estate Report)
NOTED
AQMAT, the Quebec association for the retail home improvement industry, will hold its sixth annual Gala Reconnaissance on March 3 at the Chateau Frontenac in Quebec City. The plush event, which gathers a who’s who of the industry from both Quebec and the entire country, will award dealers and vendors in a range of categories. Click here to see all the nominees for the awards (en français seulement).
OVERHEARD…
“In Canada, we are in the early stages of a business model reset and like the progress we are seeing.”
—Donald G. Macpherson, chairman and CEO of industrial supplier Grainger, on the company’s widening losses in Canada from its Acklands-Grainger division.