March 19, 2018 Volume xxiv, #11

“To me, the fundamental tales of life are: do good, do the best you can, and reach for the stars sometimes.”
—Valerie Pringle, Canadian television host and journalist, 1953- )

IN THIS ISSUE:

• TIMBER MART president shares concerns over potential product scarcity

• Ace Canada’s Bill Morrison: clicks can make urban stores a viable option

• Digitalization a major theme at the International Hardware Fair in Cologne

• Big box chains aim to close America’s skilled labour gap

  PLUS: Sexton adds two new members, Home Depot avoids lawsuit, Orgill mourns former chairman’s passing, M-D purchases RCR, Magoffin leaves Rust-Oleum to venture on his own, CanWel reports Q4, building permits up, U.S. retail sales, and more!
  
  

TIMBER MART president shares concerns over potential product scarcity

MONTREAL — During the recent TIMBER MART buying show in Montreal, group President Bernie Owens shared with Hardlines his thoughts on challenges facing all dealers in the coming months.

He didn’t focus on growing product categories as much as how important it will be to maintain the status quo with existing products. Owens says that the trend is more toward ensuring product availability across categories. He says the potential for shortages with the advent of the busy spring season could well be one of the major issues facing dealers this year.

The continued boom in the U.S. economy, and the stabilization of the housing market there, will increase the American thirst for lumber and commodities. And while sales of new homes in the U.S. dipped dramatically in January, down 7.8%, they remained stable year over year. In addition, disaster recovery efforts across the U.S. continue to drive demand for everything from lumber and gypsum to roofing. Canadian customers could end up getting the short end of the stick, says Owens, as vendors seek ways to allocate their supply.

His concerns may have been borne out just last week at a Lowe’s in Toronto. The store on Danforth Avenue in Toronto’s East End was out of stock on half-inch drywall. In talking with one contractor looking to buy some, a sales person advised that Lowe’s ran out “while it changes suppliers.”

“What we're seeing now in the industry is a focus on security of supply and making sure we have enough product to meet the needs of our dealers,” Owens says.

Ace Canada’s Bill Morrison: clicks can make urban stores a viable option

MISSISSAUGA, Ont. — A constant challenge for hardware retailers in urban locales is maintaining a business amidst high rents and low margins. The solution often requires getting maximum sales out of very limited square footage. But that’s something Ace Hardware says it’s prepared to do.

According to Bill Morrison, vice president of Ace Canada, Ace is prepared to set up shop in major urban markets. He says new investors “are excited about the urban potential.” Ace has developed a considerable digital presence, he adds, which those urban stores can tap into as pickup points for online sales in a way that was not possible in the past.

He notes that Ace is appealing to investors looking to start up a smaller operation. Ace provides an important alternative for new or smaller dealers, including investors who turn to the credibility of the Ace banner to invest in. Lowe’s acquired the license to Ace in Canada when it purchased RONA in 2016.

Now, Morrison says, Ace is very close to signing its 100th store in Canada.

“Ace in the U.S. has a great urban program that’s tremendously successful. I think if you look at urban retailing, it’s different. You have to relate to the community and be prepared to innovate. It’s not,” he concludes, “your father’s hardware store.”

Digitalization a major theme at the International Hardware Fair in Cologne

COLOGNE, Germany — The International Hardware Fair (Eisenwarenmesse), one of the world’s largest trade shows for the home improvement industry, brought together more than 47,000 visitors from 143 countries earlier this month.

A major theme at this year’s show was the increasing digitalization of retail. Innovations were showcased in a Start-up Village, a 3D printing exhibition, and the DIY Boulevard, which featured 50 exhibitors—all of which drew considerable interest from attendees.

The four-day show was preceded by a gala dinner. Speaking at the event, Gerald Boese, director of the board for Koelnmesse, which puts on the show, explained the importance of digitalization at this year’s fair. Even as new technologies offer retailers more options, it’s important those dealers understand how to take full advantage of these emerging opportunities. 

Boese added that it won’t be long until home improvement retailers are selling 3D-printed objects in their stores. “Times have always been shaped by change, and the strong companies have always successfully adapted to that,” Boese said.

Many of the exhibitors also brought innovative new high-tech products to the show. Caterpillar, the machinery and tools company, was on-hand with a brand-new smartphone. The device, described more as a working tool than just a phone, was an early prototype of a new line of Caterpillar’s CAT phones, the S61. The newest model features a thermal imaging camera, laser-assisted distance measurement, indoor air quality sensors, is fully waterproof, and has a huge battery. It’s anticipated to be available in Canada in July.

Long recognized as the show to visit to glimpse the trends expected to hit North America in the next few years, Eisenwarenmesse puts a huge emphasis on innovation. Cutting-edge products that also incorporated the theme of sustainability were recognized at the show.

The next International Hardware Fair will be March 1 to 4, 2020 in Cologne.

Big box chains aim to close America’s skilled labour gap

MOORESVILLE, N.C. & ATLANTA — Both Lowe’s and The Home Depot are investing in programs to bridge the skilled labour gap found in the U.S. workforce.

Lowe’s recently launched its “Track to the Trades” program, which aims to develop specialized skills among its existing employee base. The program began on March 1 in Charlotte, N.C.; Denver; Pittsburgh; and Richmond, Va.

Lowe’s will offer interested employees up to $2,500 to pursue their specialized skills education in specific trades, including carpentry, heating and air conditioning, electrical, plumbing, and appliance repair. The company will also offer academic coaching and mentoring, and give those who complete the program placement opportunities for full-time positions at Lowe’s.

Lowe’s says it plans to expand the “Track to Trades” program beyond the four pilot cities to qualified part- and full-time employees across the U.S. by the end of the year.

Home Depot is also acting to close the skilled labour gap in America. The retailer says existing skilled labourers are rapidly reaching retirement. Citing data from the Bureau of Labour Statistics, the company says there are currently 158,000 unfilled construction sector jobs in the U.S.

To combat this, The Home Depot Foundation is investing $50 million to train 20,000 skilled workers by 2028, the company confirmed. It will fund an existing trades training program for military members that it created in 2017 in partnership with Home Builders Institute, as well as other initiatives.

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IN MEMORIAM
Joseph “Joe” Orgill III, former president and chairman of Orgill, Inc., died on March 12 after a brief illness. Though he had not been active in Orgill’s day-to-day management for a number of years, Mr. Orgill was a familiar face at every dealer market, meeting dealers as they entered the show floor. Over his career, he played a prominent role in the growth of Orgill. He joined Orgill Brothers & Company as a salesman and later served as president from 1968 to 1980. He took the position of chairman of the board until 2005. During his more than 60 years in the business, he guided the hardware distributor’s transition from a small, regional wholesaler to a $2 billion company selling to dealers in more than 50 countries worldwide. He was an inaugural inductee into the Home Channel Hall of Fame as well as the president of the Society of Entrepreneurs. Mr. Orgill is survived by his wife of 60 years, Irene Leatherman Orgill, his daughters Adele, Irene, Anne, and Kate, as well as nine grandchildren, two great grandchildren, and a sister, Kate Orgill Boone.

RETAILER NEWS
WINNIPEG — Sexton Group has announced it is welcoming two new members in Huron County, Ont. Royal Homes was founded in 1971 to produce custom homes that combine traditional craftsmanship with modern technology. It has a 110,000-square-foot plant in the community of Wingham. General Coach Canada, in Hensall, was founded in 1950. A made-in-Canada, family operation, it has been under the ownership of the Faulkner family since 2010. It manufactures park model RVs, rental cabins, mobile homes, and theatrical trailers.

ATLANTA — The Home Depot has successfully avoided being charged in a lawsuit that accused the retailer of mislabelling its 4x4 lumber (see our Daily from June 28, 2017—Editor). The original suit alleged that Home Depot’s use of the standard size terminology amounted to little more than false advertising. This, despite the fact that 4x4 is the common term for lumber that measures 3 ½ x 3 ½ inches, an industry standard in North America that spans decades. While the judge presiding over the case was not convinced that the discrepancy was common knowledge, she did not hold that labelling the product 4x4 was a measurement, but in fact simply the name of the product. According to Reuters, the suit was dismissed without prejudice.

SUPPLIER NEWS
OKLAHOMA CITY & BOUCHERVILLE, Que. — Oklahoma City-based M-D Building Products, Inc. has purchased a majority of the assets of Quebec-based RCR International, Inc. and its Chicago-based wholly-owned subsidiary, W.J. Dennis. RCR International and W.J. Dennis produce and distribute weatherstripping, insulation components, screening, snow brushes, squeegees, and other hardware and seasonal products for the retail market in North America. RCR’s carpet and rug runners business was is the only category which was not acquired as part of the transaction. RCR entered bankruptcy protection earlier this year. M-D recently completed the acquisition of another company, Morse Industries.

WOODSTOCK, Ont. — Aaron Magoffin has left Rust-Oleum Consumer Brands Canada and started his own company serving the hardware and coatings industry. Magoffin Development Solutions Inc. specializes in web-based applications for sales and marketing teams to save time. Magoffin tells us it relies on technology to better connect distributors with dealers, retailers with manufacturers, and sales teams with each other. He helps companies with web application and site design, custom trade show applications and marketing materials, and online advertising campaign development. (You can reach him at aaron@magoffin.ca)

VANCOUVER — CanWel Building Materials reported Q4 profits of $7.1 million, up from $3.7 million in the same period of 2016. Revenues surged by 28.9 % to a record $276.2 million, while gross margin rose to 15.6%, compared to 12.3% a year ago. The company attributed this gain primarily to the effect of its Honsador acquisition, along with higher prices on building materials. For fiscal 2017, CanWel reported that revenues increased by 16.1% to $1.14 billion, compared to $978.3 million in 2016. Net earnings rose by 45% to $31.6 million, excluding non-recurring costs.

PEOPLE ON THE MOVE
Liteline Corporation has promoted Ryan Boudreau to the role of territory sales manager for the Greater Toronto Area. With a focus on specification grade projects, Boudreau will now work more closely with designers, architects, and engineers, and with both internal and external sales agencies.

Ola Bentolila is now product manager at DAP Canada. She was previously with Hudson’s Bay Co.

ECONOMIC INDICATORS
Canadian municipalities issued $8.4 billion in building permits in January, up 5.6% following a 2.5% rise in December. The value of permits for three components rose, while permits declined by 18.6% for industrial buildings and 1.3% for single-family dwellings. The January increase was largely due to higher construction intentions for multi-family dwellings in Ontario. Toronto led the 16 census metropolitan areas out of 36 that reported gains. (StatCan)

U.S. retail sales in February saw an unexpected third monthly decrease. Overall sales declined by 0.1%, the same percentage as in January, while December’s loss was also revised to the same figure. The results suggest spending is cooling following a busy fourth quarter. (U.S. Commerce Dept.)

OVERHEARD
“Sexton Group continues to grow our manufactured home membership and appreciates the confidence of these two new members.”
—Steve Buckle, president of Sexton Group, on the addition of two new members, both in Ontario, that specialize in manufactured homes.

“In addition to bringing on the RCR products, this acquisition improves our competitiveness and brings about synergies to drive operational efficiencies in both our Canadian and U.S. operations.”
—Joe Comitale, president of M-D Canada, on the purchase of RCR International’s weatherstripping, snowbrushes, and squeegee product lines.

OUT AND ABOUT
David Chestnut, our VP business development, is heading to Halifax this week for the ABSDA Building Supply Expo, put on by the Atlantic Building Supply Dealers Association. It’s on March 21 and 22 at the Halifax Convention Centre. Got a sales lead or a new product? Text David at 416-725-7992 to connect with him at the show!

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