June 11, 2018 Volume xxiv, #23

“Fortune knocks but once, but misfortune has much more patience.”
— Laurence Peter (Canadian educator and management theorist who gave us the Peter Principle, 1919-1990)

IN THIS ISSUE:

• Top online sellers added to speaker roster for 23rd annual Hardlines Conference

• Federated Co-op continues management re-org with promotion of Ron Healey as VP

• Latest dealer conversions mark big wins for RONA as it ramps up recruitment efforts

• Lowe’s shift from methylene chloride puts pressure on paint stripper makers

  PLUS: Lowe’s Canada partners with Paymi, Hudson’s Bay garners a net loss, Sears set to close 63 locations, PowerHouse introduces PowerWool, TIMBER MART promotes Alexandra Kazan, Lyne Castonguay moves up at Sobeys, Lowe’s Canada will charge for plastic bags, building permits down, and more!
  
  

Top online sellers added to speaker roster for 23rd annual Hardlines Conference

WORLD HEADQUARTERS, Toronto — Three powerhouse sessions have been added to the 2018 Hardlines Conference, finalizing the roster of top-level speakers who will present at this national forum on November 13 and 14 in Niagara-on-the-Lake, Ont.

Ace Hardware in the U.S. made news last fall when it invested as the majority shareholder of an online retailer, The Grommet. Why would a dealer-owned co-op hardware chain, with deep roots in bricks and mortar, choose to buy a company that exists solely online? Delegates at the conference will hear from The Grommet’s co-founder and CEO, Jules Pieri. Under her guidance, The Grommet has launched more than 2,800 consumer products since 2008.

Anthony Stokan is a familiar name to past conference attendees. And no wonder: Stokan represents one of the keenest retail minds in the country. His firm, Anthony Russell and Associates, has been a major consultancy to some of the most ambitious shopping centre developments and retail initiatives of the past 20 years. Stokan has agreed to join us this year for a “fireside chat” about the future of bricks and mortar, and particularly what role shopping centres, now under siege in the U.S., will play as retail grows into the online space.

Finally, we are very excited to have eBay Canada join us again this year. Closing out the 2018 Hardlines Conference, Robert Bigler, COO and director of product for eBay Canada, will present “Staying Competitive in the Age of e-Commerce”. He’ll provide an overview of the e-commerce and retail landscape, demonstrating how eBay is innovating to create new experiences that are relevant to both buyers and sellers. Most important, Bigler will examine how online marketplaces play into omni-channel sales strategies for traditional retailers looking for a competitive edge.

The Hardlines Conference will be held at Queen’s Landing in Niagara-on-the-Lake, Ont., November 13 to 14. (Click here for more information about the 23rd annual Hardlines Conference.)

Federated continues management re-org with promotion of Ron Healey as VP

SASKATOON — Federated Co-operatives Ltd. announced the appointment of Ron Healey as VP of agricultural and consumer business, effective July 3. He was formerly associate vice president.

In this new role, Healey will lead FCL Food, Crop Supplies, Fertilizer, Feed, and The Grocery People (TGP), while continuing to head up Home and Building Solutions. Healey began his career with Archer Daniels Midland Company as a grain merchandiser before joining FCL in 1998 as a retail sales coordinator in the Edmonton Region.

After taking a hiatus from the company to earn his MBA at the University of Alberta, he returned in 2002 as human resources manager for the Edmonton area. He moved to the company’s Saskatoon head office the following year, where he served in a series of roles, most recently as associate VP of ag and home.

The promotion comes less than a month after the appointment of Cody Smith to home and building solutions director, reporting to Healey. Smith has been with the co-op for the past 15 years in a variety of buyer roles, most recently as category development manager. He took over in his new position from Tony Steier, who retired at the end of April, after 40 years of service with the organization.

Latest dealer conversions mark big wins for RONA as it ramps up recruitment efforts

NATIONAL REPORT — Recent announcements of the recruitment and expansion amidst its affiliated dealer base, along with new hires within its dealer development team, all point to a concerted effort by Lowe’s Canada to step up its dealer recruitment for its RONA banner.

Lowe’s Canada is currently hiring regional business development directors for every part of Canada:  Western Canada, Ontario, Quebec, and the Atlantic region. These reps will be charged with presenting the RONA and Ace banners as options for independents.

RONA’s approach to dealer affiliations tends to focus on larger retailers with multiple stores, which are willing to expand further, often with help from RONA itself. For example, RONA recently signed the five stores owned by Groupe Godin. Founded in 1979, Groupe Godin did belong to RONA before joining Castle Building Centres in 2010.

Quincaillerie Godin first opened in Namur, in the Outaouais region. Through expansion of existing stores and strategic acquisitions, including two Matériaux à Bas Prix stores in 2014, the chain has grown. Today, the company operates five home improvement centres, three of which are in Quebec and two in Ontario.

Insiders close to the deal indicated that RONA made a generous offer to bring Godin back into the fold. During the heydays of RONA’s expansion efforts under Robert Dutton in the early part of this century, some of the offers were legendary for their large size.

Late last year, Lowe’s Canada secured another affiliate dealer with multiple stores. Dennis Doidge, formerly with TIMBER MART, owns Doidge Building Centres Ltd. & Mahood Lumber Company Ltd., with six locations in Ontario. The stores range in size from 6,000 square feet to 16,000 square feet of retail with yards as big as 12 acres. Doidge cited a desire to expand his e-commerce business and the strength of RONA’s brand among his reasons for making the move.

The company has been actively working with existing affiliate dealers to expand and upgrade their stores. This spring, Vernon, B.C., and Leduc, Alta., were converted to RONA’s latest store format, and the company expects to convert eight more stores by year’s end. And most recently, Ray Cyr, president of Fraser Valley Building Supplies in British Columbia’s Lower Mainland, completed a $3 million expansion of his store in Hope, B.C. That store had been a corporate RONA outlet until Cyr bought it in 2017.

Lowe’s shift from methylene chloride puts pressure on paint stripper makers

SPECIAL REPORT — Lowe’s has committed to stop selling paint solvents containing chemicals that have been linked to deaths. The company announced May 29 that, by the end of 2018, it would no longer sell paint strippers with methylene chloride and N-Methylpyrrolidone (NMP).

Lowe’s already sells paint removal products that do not contain the chemicals, and “has plans to bring more options to consumers by year-end,” the company says. Since 1980, about 50 people in North America have died while using the product. The U.S. Environment Protection Agency proposed to prohibit the use of methylene chloride in paint removers in 2017, but later decided against a ban. The product is not banned in Canada, either.

Lowe’s Canada has confirmed that it “will indeed mirror Lowe’s efforts in the U.S. in phasing out paint removal products with the chemicals methylene chloride and NMP from its global product selection,” says Valérie Gonzalo, spokesperson for Lowe’s Canada.

The move has taken manufacturers by surprise. “Methylene chloride products are still safe to use, when taking necessary precautions,” says Sébastien Plourde, president of Super Remover in Granby, Que. His products, he notes, are clearly marked and instructions advise users to work in a well-ventilated environment.

For consumers, the stronger formulation of traditional strippers continues to be much more effective than more environmentally friendly alternatives. That alone may drive shoppers to other retailers besides Lowe’s.

Plourde says his company is “being proactive and is has been working closely with a university in the U.S. to introduce a new, safe product that is similar in strength to our product with methylene chloride.” He’s confident this new formulation will revolutionize the paint remover industry. However, final testing and processing of the new line is still some weeks out.
 
Nevertheless, Lowe’s Canada will go ahead with the move to eliminate products with methylene chloride. “Over the next few weeks, the products in inventory will progressively be removed from our shelves and we will update our planograms accordingly,” Gonzalo confirms.

DID YOU KNOW…?

... that the North American Retail Hardware Association is represented in Canada by Hardlines? One of the key benefits of NRHA membership is the product knowledge training programs for retail employees. Training programs are available in core hardware and building materials categories such as customer service, selling skills, increasing transaction size, and decreasing employee turnover. For more information on the NRHA, visit www.nrha.org or www.hardlines.ca/nrha.

RETAILER NEWS

BOUCHERVILLE, Que. — Lowe’s Canada has partnered with Paymi, a card-linked shopper marketing program, to allow Lowe’s customers who are also members of the Paymi marketing program to receive cash back when making purchases in-store or online. The Paymi app adds cash rewards to linked credit and debit cards used at participating merchants.

TORONTO — Hudson’s Bay Co. garnered a net loss of $314 million in Q1, widening from $214 million a year ago. Total revenues amounted to $3.1 billion, up by $30 million or 1% from the same period in 2017. At the same time, the company announced the Lord & Taylor banner will strengthen its focus on the online channel, closing up to 10 bricks-and-mortar locations by the end of next year, including its flagship New York store. The company has also reached a deal to sell its under-performing lifestyle website Gilt to online retailer Rue La La.

BOUCHERVILLE, Que. — Lowe’s Canada says it will start charging five cents for standard plastic bags, and 10 cents for thicker bags, at all Lowe’s, RONA, and Reno-Depot corporate stores. The fees came into effect on June 1 in Quebec and will extend to the rest of the country on September 1. Profits from bag sales will be donated to Nature Conservancy Canada.

HOFFMAN ESTATES, Ill. — After closing about 400 stores in the last year, Sears has confirmed that it is set to close 63 additional locations in September. The closures consist of 48 Sears stores and 15 Kmarts, according to the company. “We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted,” the company said in a statement.

SUPPLIER NEWS
VANCOUVER — PowerHouse Products has announced the introduction of PowerWool Rigiboard One. The mineral wool insulation is designed to be rigid enough for exterior cladding applications and has been approved by the Canadian Construction Materials Centre. Established in 2005, PowerHouse offers wholesale distribution to building supply dealers across Canada.

PEOPLE ON THE MOVE
TIMBER MART has promoted Alexandra Kazan, currently corporate messaging specialist, to the role of corporate communications manager. In addition to her current responsibilities of conducting media relations and producing corporate internal and external communications, Kazan will now manage and oversee all aspects of TIMBER MART’s communications and trade media advertising, including the media, messages, and strategies used by the organization. (Alexandra.Kazan@timbrmart.com)

At Empire Company Limited, with its wholly-owned subsidiary, Sobeys Inc., Lyne Castonguay has been promoted to executive vice president, store experience, responsible for store operations, distribution centres, and customer satisfaction across Empire’s traditional grocery banners outside Quebec. She previously served as EVP of merchandising for Sobeys. Until 2016, when she joined Sobeys, Castonguay held progressively senior positions with The Home Depot both in Canada and the U.S. She reports to Empire President and CEO Michael Medline.

Marshall Croom, CFO of Lowe’s Cos., has announced he will retire as of October 5. A 21-year veteran of the company, he will stay on after that date while a replacement is named to help with the transition period.

ECONOMIC INDICATORS
Municipalities issued $7.8 billion worth of building permits in April, down 4.6% from March. Residential permits fell 4.3% to $5.1 billion. Multi-family dwelling intentions were down 5.2% from March. Four provinces contributed to the drop, with British Columbia and Alberta recording the largest decreases. The value of single-family permits fell 3.3% to $2.3 billion, the fourth consecutive monthly decline. Ontario and British Columbia suffered the biggest drops, while Alberta recorded the largest gain, up $46 million from March. The value of non-residential building permits fell 5.2% to $2.8 billion in April, following a 1.7% increase in March. (StatCan)

Spending on construction in the U.S. rose by 1.8% in April amid the country’s largest home building spike in 24 years. The seasonally adjusted rate of $1.31 trillion was 7.6% higher than last April, and followed on a 1.7% decline in March. Residential construction increased by 4.5%, the largest percentage gain reported since November 1993. Spending on single-family dwellings remained relatively unchanged, while government projects declined with tighter state and federal budgets. (U.S. Commerce Dept.)

NOTED
A new survey of contractors in the U.S. indicates almost half express concern over the threat from steel and aluminum tariffs and fluctuations. According to the Q2 Commercial Construction Index, conducted by USG Corporation and the U.S. Chamber of Commerce, 86% of commercial contractors noted that recently imposed tariffs will have at least a moderate impact on their business, and nearly half (49%) expecting a high degree of impact from potential new construction material tariffs.

OVERHEARD…
“We care deeply about the health and safety of our customers, and great progress is being made in the development of safer and more effective alternatives … [W]e recognize the need for viable paint removal products and remain committed to working closely with suppliers to further innovate in this category.”
—Mike McDermott, Lowe’s chief customer officer, on the company’s decision to eliminate methylene chloride paint strippers from its stores. The move will affect both Canada and the U.S.

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