October 15, 2018 Volume xxiv, #38

“Only through curiosity can we discover opportunities, and only by gambling can we take advantage of them.”

— Clarence Birdseye (American inventor, entrepreneur and naturalist, 1886-1956)

IN THIS ISSUE:

• With New Brunswick acquisition, Gillfor will become a national wholesaler
• Dealers can invest in their rising stars with NRHA’s retail management course
• Home Depot expands same-day delivery in select U.S. markets
• Contractors get more love at latest Home Hardware dealer market
• PLUS:Digital prize goes to BMR, Lowe’s Canada opens second new-look store in Edmonton, BMR partners with contractor platform, Beauti-Tone names colour of the year, Costco reports year end, Richelieu’s Q3 sales, Hitachi begins switch to Metabo, building permits, housing starts and more!

With New Brunswick acquisition, Gillfor will become a national wholesaler

WOODSTOCK, Ont. — Gillfor Distribution Inc., parent company of OWL Distribution Inc., McIlveen Lumber Industries Ltd. and Brown & Rutherford Co., is making another acquisition, one that will effectively make the company a national entity.

Gillfor has announced the purchase of Brunswick Valley Distribution Inc., the Atlantic Canadian distribution arm of parent company Brunswick Valley Lumber Inc.

Brunswick Valley Distribution is headquartered in Fredericton, N.B., and operates a distribution facility in Moncton. The deal will be finalized by January 2019, at which point the company will add products found in other Gillfor divisions, including composite decking, aluminum railing and a variety of specialty softwoods.

Gillfor Distribution was created when OWL Distribution in Woodstock, Ont., and McIlveen Lumber, an LBM wholesaler based in Calgary, merged just over a year ago. Both companies have continued to operate under their respective names, as will Brunswick Valley Distribution, at least for now. The latest acquisition also gives Gillfor a strategic distribution location in Atlantic Canada to add to its six existing distribution centres and one reload facility.

Dealers can invest in their rising stars with NRHA’s retail management course

SPECIAL REPORT — Training keeps top performing employees growing and realizing their potential. The North American Retail Hardware Association (NRHA) has developed a program to take key people to the next level.

The Retail Management Certification Program was developed in partnership with Ball State University in Indiana for key employees such as owners, next-generation leaders, managers or directors—anyone who has the potential to excel in an independent home improvement operation.

Joe Chawchka is vice president of operations for Pro Builders Supply in Penticton, B.C. He first heard about the NRHA’s Retail Management Certification Training Program (RMCP) when the company’s president was contacted by their banner, Home Hardware Stores.

The management team at Pro Builders had been looking for training programs that would help prepare their high-potential employees for management roles. The RMCP was the right fit for their needs. The course consists of a six-month class with three multi-day sessions that feature an industry-specific curriculum and a business improvement project. Course work explores leadership, marketing, sales, customer service, human resources management, finance and accounting, applied business strategies and advanced retail operations.

At Pro Builders, the five-store chain has so far sent a total of six employees—two are now general managers, one is a partner in the business and two others have been promoted to retail operations management positions.

Students make three trips to NRHA’s head offices in Indianapolis for three-day sessions, where they build a network of peers as they learn about multiple topics within retail operations that can be applied to business management. Attendees are then challenged to use what they’ve learned to plan and implement a company-wide initiative that will deliver their employers a measurable return on investment.

For Chawchka, what made the program so attractive was not just the content, which he described as “clearly unique from anything else we had seen before,” but the networking opportunity it offered his high-potential employees with others in similar retail hardware and building supply businesses.

“The experience has provided broader exposure for the candidates and allowed us to evaluate their adaptability and resilience, both qualities we require in our management teams,” says Chawchka. (For more info on the program, please e-mail Michael McLarney.)

(The full story on one dealer’s success with NRHA’s retail management training appears in the next issue of our sister publication, Hardlines Home Improvement Quarterly. HHIQ is mailed to 11,000 dealers and managers across Canada. For your own subscription, please click here.)

Home Depot expands same-day delivery in select U.S. markets

ATLANTA — The Home Depot has rolled out express same-day and next-day local delivery for 20,000 of its most popular items to 35 major metro markets across the U.S. The new service is part of the company’s overall five-year expansion of its delivery offerings for DIY and pro customers.

The company is partnering with car and van providers like Roadie and Deliv to offer the new delivery options for smaller items, while continuing to expand its supply chain network for faster shipments of large bulk deliveries.

Delivery options start at $8.99. “This is just the beginning of our expansion of improved delivery options, but it’s a significant milestone in the way we’re serving customers,” said Mark Holifield, EVP of supply chain and product development for The Home Depot in Atlanta.

While the service is not yet available in Canada, The Home Depot Canada does offer some same-day pick-up options for products in-stock at a customer’s local outlet. Right now, deliveries from a local store can also be arranged as early as next day.

The ongoing investment in the U.S. calls for additional direct fulfillment centres and more than 100 new distribution sites to further extend delivery speed and reach. To use the service, customers shopping online choose “Express Delivery from Store”, where available.

Contractors get more love at latest Home Hardware dealer market

ST. JACOBS, Ont. — Home Hardware Stores continues to hone its program for contractor customers. As Home’s dealers have been encouraged to grow the size of their stores over the past decade, more and more of them have the broad assortments to cater effectively to contractors and trades. To support those dealers, Home is creating programs and services to help pros do their jobs better.

Not the least of these is Home’s series of regional pro shows, held each spring in a number of communities across the country. That idea, along with some others that are pro-focused, were inherited with Home’s acquisition of Beaver Lumber back in 1999.

Dealers attending the co-op’s latest dealer market, held in September, found some new ways to attract pro customers. Alec Thompson, marketing manager, contractor communications for Home Hardware, explained a new series of e-offers developed for trade customers. “They’re not as fast to adapt as consumers, but now if you’re going to connect with them, online is the way,” Thompson says.

And loyalty has its rewards. The company’s Top Notch rewards program, a loyalty program exclusively for contractor customers, now has 25,000 members across Canada.

Just as Home has been targetting Quebec to add new member dealers, Thompson and his team see potential to work more closely with Home Hardware stores in that province to help them develop their pro business. “Our growth will be in Quebec,” he says.

DID YOU KNOW...?

... that the second issue of our brand new online publication, Hardlines Dealer News, was sent out last week? It’s filled with stories and tips for running your retail operation better. If you’re not getting your free copy, then click here to subscribe!

RETAILER NEWS
BOUCHERVILLE, Que. — At its annual e-commerce event, the Conseil québécois du commerce de détail awarded its Digital Shift prize to Groupe BMR. The jury selected BMR for its use of technological tools. BMR’s website became transactional this year, and the omnichannel emphasis remains strong for all BMR banners.

BOUCHERVILLE, Que. — Lowe’s Canada has opened its second new-model Lowe’s store in the greater Edmonton area. The former RONA Home and Garden underwent a 16-week transformation. “With the opening of this second new-model Lowe’s store, we are pursuing the evolution of Lowe’s big box in Canada, making it easier for customers in the greater Edmonton area to take advantage of our enhanced shopping experience,” said Guy Beaumier, EVP of big box for Lowe’s Canada.

BOUCHERVILLE, Que. — Groupe BMR and Travaux Solutions have entered into a commercial agreement under which BMR will be a shareholder of the family-owned Quebec company. Travaux Solutions specializes in referring construction and renovation contractors to help customers with their work projects. It has partnered with about 30 BMR renovation centres since 2015. “Our customers will now find their materials, receive expert advice from our expert team and find a certified contractor to carry out their project, big or small, all under one roof,” said BMR’s VP of retail, Martin Lecomte.

BURFORD, Ont. — Beauti-Tone, the paint division of Home Hardware Stores Ltd., has released its Simon Chang 2019-2020 Trend Colour Collection. Made up of 24 hues, the collection claims to feature deeper, richer shades than before. Many of the colours can be used to paint an entire room, while the Colour of the Year, “Tropic of Conversation”, is suited to accent walls and furniture pieces. The bold orange shade is “saturated in positivity,” says Bev Bell, Beauti-Tone’s creative director. The collection is Beauti-Tone’s sixth collaboration with designer Simon Chang.

ISSAQUAH, Wash. — Costco Wholesale Corp. reported Q4 net sales of $43.4 billion, an increase of 5% from $41.4 billion a year ago. For fiscal 2018, sales totalled $138.4 billion, an increase of 9.7% from $126.2 billion in 2017. Comparable sales in Canada were up 5.7% for the quarter and 8.9% for the year.

SUPPLIER NEWS
SAINT-LAURENT, Que. — Richelieu Hardware saw Q3 sales rise 2.9% to $260.6 million. For the first nine months of the fiscal year, they rose 7.7% to $745.9 million. In Canada, Richelieu recorded sales of $178.7 million, an increase of $6.5 million or 3.8% over the third quarter of 2017, entirely from internal growth. Net earnings attributable to shareholders came to $18.4 million, an increase of 1.4%.

BRASELTON, Ga. — Hitachi Power Tools last month began the conversion of its tool lines in North America to the Metabo brand. The transition, announced in the spring, began with the company’s MultiVolt cordless tools. The rest of its lines are to be converted to the new brand in the new year, but parent company KKR is keeping the HPT and Metabo companies as separate entities.

ECONOMIC INDICATORS
Canadian municipalities issued $8.1 billion worth of building permits in August, up 0.4% from July. Strength in the non-residential sector drove the increase, while the residential sector declined for the third consecutive month, to $5 billion. That figure represents a 4.4% drop from July. The value of permits for single-family dwellings was down 5.2% to $2.2 billion, maintaining the general downward trend that began in January. —StatCan

The seasonally adjusted rate of housing starts in Canada was 188,683 units in September, down from 198,843 units in August. The SAAR of urban starts decreased by 5.9% in September to 175,653 units. Multiple urban starts decreased by 8.9% to 122,656 units in September while single-detached urban starts increased by 2.0% to 52,997 units. Rural starts were estimated at a rate of 13,030 units. —CMHC

NOTED
The North American Retail Hardware Association’s amazing Retail Management Certification program is being used by more and more Canadian dealer-owners to develop key managers on their teams. This in-depth six-month course includes in-class study and case studies with peers. It’s like a mini-MBA for retail home improvement. Cost for the spring 2019 session, has been heavily discounted but the deadline is January 1. For more information, please contact me directly. —Michael McLarney, Managing Director, NRHA Canada

OVERHEARD…
“Always be on the lookout for your rising stars, and don’t hesitate to send your highest achievers to the RMCP program—you will not be disappointed with the return on investment.”
—Joe Chawchka, vice president of operations for Pro Builders Supply Ltd. in Penticton, B.C., on the NRHA’s Retail Management Certification Training Program.

“The national trend in housing starts stood at a 19-month low in September, following declines in four of the last five months. The slowdown in the pace of new residential construction activity in recent months is a result of both lower single-detached and multi-starts activity and brings new residential construction closer to its long run average from the elevated levels registered in 2017.”
—Bob Dugan, chief economist for CMHC, on the latest housing statistics, which continue to track a slowing market.

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