March 5, 2018 Volume xxiv, #9 “Three things cannot be long hidden: the sun, the moon, and the truth.” IN THIS ISSUE:
ORLANDO — Independent home improvement retailers from around the world gathered recently for the Orgill Spring Dealer Market at the Orange County Convention Centre. The event featured vendors from across the industry, special buys, market-only specials, and networking opportunities. It also drew about 300 Canadians, including 110 Castle dealers, a strong contingent of TIMBER MART members, and other stores from across the country. “We always look forward to our Dealer Markets because they give us the opportunity to interact with our customers and provide them with a wide range of products, programs, and services to drive their businesses,” says Ron Beal, Orgill’s chairman, president, and CEO. “We’re excited to share all that Orgill has to offer.” The Spring Dealer Market covered about one million square feet of space, providing plenty of room for thousands of vendors attending the event to show off their wares, while retailers shopped all the major home improvement categories. A number of promotional areas around the perimeter of the market floor, including Door Busters, Pallet Buys, and New Items, let dealers shop for products at low prices exclusive to the event. “Our merchants and vendors have teamed up to add the items our customers want,” says Jeff Curler, senior vice president of purchasing. “Many products are being offered at deeply discounted prices, and a number of our vendors are offering creative merchandising ideas to help retailers stand out from the competition.” As in the past, the show floor featured a couple of model stores. Central Tool & Building Supply was a contractor-focused, 8,000-square-foot store that was also 100% Canadian-compliant. Its primary niche was hand and power tools, but it also offered a deep selection of Valspar paint, along with paint sundries, plumbing, and electrical products. The store offered a number of space-saving merchandising and racking features, enabling the space to feature about 8,000 square feet of products in a smaller space. The service desk and checkout area was also innovative: it featured a doughnut-shaped counter set more in the middle of the store, giving good sightlines for staff and easy access to customers. The second concept store was Green River Hardware & Garden, which encompassed 15,000 square feet and showcased space-saving techniques of its own. Niches in this prototype included outdoor power equipment, outdoor living, and lawn and garden. Seminars and workshops played a big part in the show, as well. Some of the educational opportunities include “Retail Pricing,” “Social Media in the Real World,” “Should You Sell on Amazon?” and “Why Loyalty Marketing Works.” Other clinics covered marketing tactics, in-store promotional efforts, and cybersecurity. Orgill’s Fall Dealer Market will be August 23 to 25 at the Sands Expo Convention Centre in Las Vegas. Hardlines’ own Canada Night Reception will be at the end of day one of the show, August 23, at Señor Frog’s bar, in the Treasure Island hotel.
Lowe’s sales up on weaker earnings, while Canadian business posts healthy comps MOORESVILLE, N.C. — Lowe’s Cos. reported Q4 revenues of $15.5 billion, down nearly 2% from the previous-year quarter. However, same-store sales were up 4.1%, even as earnings declined by $554 million. That figure fell short of the $663 million reported for the same period last year. The shortfall was attributed to tightening profit margins. For the year ended February 8, sales reached $68.6 billion, up 5.5% from $65.0 billion. Net earnings were up 4.8% to $3.4 billion from $3.1 billion in the previous fiscal year. Same-store sales for the year were up 4.0%. While the RONA business in Canada dampened Lowe’s gross margin for the year, results improved in the fourth quarter in Canada, with same-store sales up around 5%. RONA posted its highest comp in 13 years, while its online sales increased by double digits during the period, and the company completed five conversions of RONA big boxes to the Lowe’s format and banner, and rolled out appliances to 100 stores. The company also noted strong growth within its affiliated dealer business. And while the Canadian business did not contribute to operating margin in 2017, that’s expected to change in 2018. Lowe’s further expects to double its profitability in Canada by 2021. The company also announced that it has reached an agreement with Sherwin-Williams, giving the retailer exclusive U.S. distribution rights of a range of Sherwin-Williams brands. (See Retailer News, this issue. —Editor)
For Castle’s newest Western member, it’s a family affair MISSISSAUGA, Ont. — Castle Building Centres announced that Reimer Concrete and Building Supplies in Roseau River, Man., is the group’s newest Western member. The business is owned by Matthew and Perla Reimer, who have 16 years of experience in the construction industry. The store, says Matt, fits in well with the construction side of his operations. It even has a ready-mix concrete facility on site. The store was formerly a Castle dealer, belonging to family member Dave Reimer, who sold it in 2014 to a company based in Winnipeg. Operating as JBS Building Supplies, the new owners slipped into bankruptcy protection, which is when Matt and Perla stepped in. They took it over in February 2017. Impressed by the success of Dave Reimer’s experience with Castle, Matt decided to go with group, as well. “We were confident that Castle offers us the flexibility to grow and operate in line with the needs of our business,” he said. A grand opening is slated for the summer. Matt reports that the store had a strong fourth quarter in 2017, with the beginning of this year seasonally slow. But he anticipates a strong spring. “The phone is starting to ring off the hook,” he says.
Habitat’s ReStore expands with boost from donation by Lowe’s Canada
TORONTO & BOUCHERVILLE, Que. — Habitat for Humanity’s retail network of ReStore outlets is expanding, with new locations popping up across the country, including intensive growth in Habitat’s biggest region, the Greater Toronto Area. The charitable organization sells new, donated products, as well as used materials received from renovation job sites. Habitat has received a big boost from Lowe’s Canada, which donated nearly $1 million in products and building materials to Habitat for Humanity ReStores in 2017. Habitat’s ReStore outlets continue to grow in the Greater Toronto Area. A new location is set to open in North Woodbridge on April 20. This will be ReStore Toronto’s 11th store. Another store opened recently in Vaughan, with two more new locations to come in the near future. Lowe’s Canada’s commitment to Habitat went beyond products, which are much needed by the ReStores. More than 100 employees helped build homes on the organization’s construction sites. These included two projects that were part of Habitat for Humanity’s 34th Jimmy and Rosalynn Carter Work Project to build 150 homes across Canada, as part of the 150th anniversary of Confederation. The company has donated more than $2 million worth of products over the past decade. In the midst of the ongoing expansion north of Toronto, ReStore is reaching out to dealers and merchandisers in the Woodbridge, Maple, Kleinburg, Nobleton, and King City areas. The organization needs overstocked product, racking, and fixtures, and seeks contacts with builders and contractors who may be tearing out old kitchens and other building materials, which could be resold through the ReStores. (Contact Rob Lee, VP retail operations and executive lead IT and infrastructure at Habitat for Humanity for the GTA if you can help out!)
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RETAILER NEWS MONTREAL — La Coop fédérée unveiled results for the fiscal year ended October 28, 2017, at its recent annual general meeting. As in the previous year, revenues surpassed the $6 billion mark; operating earnings amounted to $319 million. The BMR business, which La Coop acquired in 2015, posted earnings of $1.1 million, an increase of $30 million from the previous year’s $29 million loss. “For us and our merchants, the economic indicators and housing starts are very positive,” Pascal Houle, CEO of Groupe BMR told HARDLINES during the AGM. MOORESVILLE, N.C. — Lowes Cos. says it has reached an agreement with Sherwin-Williams, giving the retailer exclusive U.S. distribution rights for home centre sales of certain paint brands, including Minwax, Cabot, and Krylon. The deal applies only to U.S. stores; Canadian stores will continue to carry the Valspar brand, while Sherwin-Williams in Canada will continue to serve independent dealers, including its growing network of Sherwin-Williams stores. Sherwin-Williams purchased Valspar in June 2017.
BRAMPTON, Ont. — Loblaw Cos. Ltd. reported that Q4 profits declined as the grocery and pharmacy giant logged $230 million in costs. Profits dropped to $19 million, or $0.05 per share, from $201 million ($0.50 per share) a year ago. Revenues also declined to $11.03 billion, from $11.13 billion the same time last year. SEATTLE — Amazon may launch up to six new Amazon Go stores this year, sources have told tech news site Recode. The stores have no cashiers and scan and check out one’s purchases automatically. The first one opened to the public last month in Seattle after a 13-month pilot period serving Amazon employees. According to the sources, additional Seattle locations are among those in the works. SUPPLIER NEWS MONTREAL — The Quebec hardware and building materials association AQMAT hosted its Gala Reconnaissance awards dinner on Saturday, March 3. The event was held at the historic Château Frontenac in Quebec City, where achievements were awarded to individuals from all aspects of the industry, including retailers, manufacturers, and rep agencies.
PEOPLE ON THE MOVE
ECONOMIC INDICATORS Sales of existing U.S. homes declined in January, falling 3.2% to a seasonally adjusted annual rate of 5.38 million units. The decrease came as a supply squeeze drove up prices, freezing out first-time home buyers. Together with rising interest rates, those conditions have fueled concerns that market activity will continue to stall through the spring. On a year-over-year basis, home resales fell by 4.8%, the largest such decline since August 2014. (U.S. Commerce Dept.)
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