hhiq 3q 2011

C O N N E C T I N G T H E H O M E I M P R O V E M E N T I N D U S T R YH A R D L I N E S . C A

HOME IMPROVEMENT QUARTERLY

Canada’s leading buying groups keep shuffl ing the competitive deck with acquisitions and alliances

BALANCE OF POWER

F E A T U R E S T O R Y

THIRD QUARTER / 2011

PLUS:■ IRLY’s Susan Robinson

■ Expansion strategies

■ Improve store curb appeal

■ Retail business conditions

■ Manage your margins

CANADA’S TOP 10The leading retailers continue to gain market share

ORGILL COMES NORTHA frank interview with Orgill CEO Ron Beal

Canadian Publications Mail Agreement # 42175020. POSTMASTER: Send address changes to Hardlines Home Improvement Quarterly, 360 Dupont St., Toronto ON Canada M5R 1V9

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185 DEALERS IN 5 PROVINCES3 LUMBER & BUILDING MATERIAL WAREHOUSES

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Hardlines Home Improvement Quarterlywww.hardlines.ca 3SECOND QUARTER / 2011

HARDLINES Inc. is:HARDLINES NewsHARDLINES weekly e-newsletter is the premier source for information on home improvement retailing in Canada.

HARDLINES WebsiteFrom Mt. Pearl, NF to Victoria, BC, Canadians come to the Hardlines website for news, special reports, events, and market intelligence.

HARDLINES Who’s Who DirectoryDetailed listings of buyers,sales, executive teams and store locations for more than 75 of Canada’s leading hardware and home improvement chains, independents, buying groups, wholesalers, co-ops and mass merchants.

HARDLINES ConsultingLet the Hardlines team bring you the consultative guidance and support by Canadian market experts that you desire to facilitate your growth in this market.

VOLUME I, NO. 2

416-489-3396

EDITORMichael McLarney, [email protected]

EDITORIAL ASSISTANTLisa Terry, [email protected]

CONTRIBUTING EDITORSStephen Payne John Caulfi eld

CONTRIBUTING WRITERSCarl DuguayBill WilsonBruce Smith

ART DIRECTIONMitre Design

PUBLISHERBeverly Allen, [email protected]

PUBLISHING CONSULTANTDavid Chestnut

PRODUCTION MANAGER/CIRCULATION DIRECTORBrady Peever, [email protected]

ACCOUNTINGMargaret Wulff

OFFICE MANAGERKatherine Yager

EDITORIAL OFFICES360 Dupont St., Toronto ON Canada M5R 1V9

Hardlines Home Improvement Quarterly is published four times a year by Hardlines Inc., 360 Dupont St., Toronto, Ontario Canada M5R 1V9. $25 per issue or $90 per year for Canada. Subscriptions to the Continental United States: $105 per year and $35 per issue. All other countries: $130 per year. (Air mail $60 per year additional)

Subscriber Services: To subscribe, renew your subscription, or change your address or contact information, please contact our Circulation Department at 416-489-3396; [email protected].

Canadian Publications Mail Agreement # 42175020

POSTMASTER: Send address changes to Hardlines Home Improvement Quarterly, 360 Dupont St., Toronto ON Canada M5R 1V9.

All editorial contents copyrighted 2011 by Hardlines Inc. No editorial may be reproduced without prior permission of the publisher.

www.hardlines.ca


Contact Beverly Allen, Publisher, Hardlines Inc. for more information: Phone: 416.489.3396; Mobile: [email protected]

HHIQ_3Q_11_Masthead.indd 3 11-07-25 10:26 AM

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Hardlines Home Improvement Quarterly 5THIRD QUARTER / 2011


INDUSTRY SUMMARY

HARDLINES CONFERENCE 2011

COVER FEATURE DEPARTMENTS

7

8

10

17

42

44

46

48

EDITOR’S MESSAGE

Get used to the new reality

BUSINESS CONDITIONS

Dealers get off to a slow start in 2011

MARKET REPORT

Industry slowdown poses new challenges

CATEGORY SPOTLIGHT

Kitchen and bath, paint and electrical

STORE MANAGEMENT

Understanding your P&L

DESIGN & MERCHANDISING

Leverage your storefront for business and brand

EXPANSION

Doidge TIM-BR MART takes the next step

ENDCAP

Executive break with IRLY’S Susan Robinson

NEWSROUNDUP

Lumber Liquidators on track for Canadian openings

Verschuren challenges industry to innovate

RONA’s Dutton reveals plans for Calgary distribution

TruServ’s new banner focuses on community

Canadian Tire buys house to showcase small projects

TIM-BR MARTS builds identity and infrastructure

Independents fall short on service vs. big boxes

LBMAO changes date of buying show

12

BALANCE OF POWER

EXECUTIVE INTERVIEW

ORGILL CEO SETS SIGHTS ON CANADA

C O N T E N T S

A candid chat with Orgill’s president and CEO, Ron Beal

31

34 A preview of the October 27 and 28 conference in Toronto

These top companies are repositioning to maintain growth

HOME IMPROVEMENT RETAILERS

CANADA’S TOP1036

V O L U M E I , N O . 2

Canada’s leading buying groups keep shuffl ing

the competitive deck with acquisitions and alliances

26

HHIQ_3Q_11_Contents.indd 5 11-07-21 4:47 PM

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Hardlines Home Improvement Quarterlywww.hardlines.ca 7THIRD QUARTER / 2011

[email protected]

E D I T O R ’ S ME S S A G E

t’s just different now. Home improve-ment retailing — all retail — has become more challenging than it’s

been in years. This industry enjoyed an era of tremendous growth in the decade running up to the recession of 2008-09. In fact, the size of the industry more than doubled in that time. But a recovery that was supposed to turn the Canadian economy — and activity at the till — around, just didn’t materialize. A slow fi rst quarter was followed by a sec-ond quarter that was only slightly better, hampered by continued bad weather.

For dealers, this means that the annual growth that regularly dipped into the double digits is just plain over. The Canadian economy, a refl ection of what’s going on in the world, albeit a more healthy refl ection, is challenged by high personal debt rates and low consumer confi dence among homeowners.

Furthermore, the customer is changing. As X and Y generations become homeowners themselves, they may have inherited some of the passion for renovation and home enhancement that the boomers displayed so strongly. But the boomers still represent the bulk of the population and they are spend-ing their money differently: downsizing, get-ting rid of their “stuff,” looking for services

instead of things, seeking activities like travel and personal fulfi lment.

But with every challenge comes opportu-nity. Dealers who get this are fi nding oppor-tunities, despite the current conditions. They’re fi nding new ways to service today’s customer with better-trained staff that can deliver on a promise of customer service. They’re increasing their range of services as they fi gure out what their customers want — and deliver on it. At the same time, the

successful dealer is meeting head on the chal-lenges from within — whether it’s rising costs from shrinkage, tighter margins as competi-tion continues to get tougher, or the need to develop a strong succession plan to ensure the viability of the business to another generation of successful leaders.

Yes, home improvement retail is different now. But the winning home improvement dealers have already adjusted their expecta-tions accordingly and identifi ed the oppor-tunities. They will be the ones who adapt to those differences quickly and tirelessly. Make sure you are one of them.

GET USED TO THE NEW REALITYMICHAEL MCLARNEY, EDITOR

I

A recovery that was supposed to turn the Canadian economy around, just didn’t materialize. “ ”

HHIQ_3Q_11_Editorial.indd 7 11-07-21 4:54 PM

Hardlines Home Improvement Quarterly www.hardlines.ca8 THIRD QUARTER / 2011

ell into the fi rst quarter of 2011, dealers were still waiting for good weather — and for consumers to

open their purse strings. According to the latest HARDLINES Quarterly Business Conditions Survey, done in conjunction with the North American Retail Hardware Association Canada, dealers’ hopes of a buoyant beginning to the year were roundly thwarted. (The survey measures the business conditions experienced in the latest quarter compared with the same quarter a year earlier.)

By the end of the quarter, more than two-thirds of dealers (68.0 percent) reported that their business was down vs. the same quarter a year earlier. By comparison, only 29.8 percent reported negative conditions in the previous quarter. Another 19.2 percent of dealers surveyed reported sales being up in the fi rst quarter, an improvement from the 12.3 percent who reported an increase in the fourth quarter of 2010.

In the fi rst quarter, 12.8 percent of deal-ers reported that sales stayed the same compared with the fi rst quarter of 2010.

Dealers remain optimistic about their busi-ness for the months ahead, however. Almost two-thirds of dealers surveyed (63.3 percent) expect their sales to increase during the sec-ond and third quarters of this year. Still, 13.9 percent have negative expectations about their sales during the second and third quar-ters, while 22.8 percent say they aren’t sure.

Looking out 12 months, dealers expecta-tions were not much different, with 64.1 percent forecasting that their sales would increase. Another 14.1 percent said they expect their sales to decline; 21.8 percent

DEALERS GET OFF TO A

SLOW STARTIN 2011

QUARTERLY BUSINESS CONDITIONS

W

Canada’s much anticipated recovery, already thwarted in 2010 by poor weather and soft consumer confi dence, had still failed to materialize in the fi rst quarter of this year. Bad weather continued, affecting dealers in just about every corner of the country.

HHIQ_3Q_11_BusConditions.indd 8 11-07-21 4:49 PM


B U S INE S S C O ND I T I O N SSECOND QUARTER

DEALERS GET OFF TO A

SLOW STARTIN 2011

said they weren’t sure which way their business would go.

(Editor’s note: at press time, preliminary second-quarter survey results indicate that dealers have been overly optimistic in their projections. More than half are reporting nega-tive sales in the second quarter, compared with the same period a year ago.)

HOLDING THE COURSEAs dealers attempt to weather the slow recov-ery, they are reluctant to make big changes to their businesses. Half of dealers surveyed said they had not changed the number of employees in their stores. One-quarter of the dealers surveyed actually decreased the number of staff.

TOP ISSUES FACING DEALERSThe HARDLINES Business Conditions Survey invited dealers to share their concerns about their businesses, with each dealer select-ing all issues that related to them (so totals do not equal 100%). Among the concerns that dealers faced in the fi rst quarter of the year, staffi ng was at the top of the list, selected by 78.8 percent, followed by customer retention by 62.0 percent, and training by 51.9 percent. Another big concern, indicated by half of the dealers, was increased competition.

Succession planning is a concern for just over one-third of the dealers, while adding new services was reported by 34.2 percent of respondents.

RETAILERS: 1Q SALES 2011 VS. 2010

RETAILERS: Do you expect sales to increase during the 2nd & 3rd quarters?

VENDORS: Do you expect sales to increase over the 2nd & 3rd quarters?

VENDORS: 1Q SALES 2011 VS. 2010

Source: HARDLINES Quarterly Business Conditions Survey

63.3%YES

13.9%NO

22.8%NOT SURE

57.8%YES

20.5%NO

21.7%NOT SURE

19.2%UP

68.0%DOWN

12.8%SAME

35.0%UP

56.6%DOWN

8.4%SAME

63.3%YES

13.9%NO

22.8%NOT SURE

57.8%YES

20.5%NO

21.7%NOT SURE

19.2%UP

68.0%DOWN

12.8%SAME

35.0%UP

56.6%DOWN

8.4%SAME

63.3%YES

13.9%NO

22.8%NOT SURE

57.8%YES

20.5%NO

21.7%NOT SURE

19.2%UP

68.0%DOWN

12.8%SAME

35.0%UP

56.6%DOWN

8.4%SAME

63.3%YES

13.9%NO

22.8%NOT SURE

57.8%YES

20.5%NO

21.7%NOT SURE

19.2%UP

68.0%DOWN

12.8%SAME

35.0%UP

56.6%DOWN

8.4%SAME

VENDORS REPORT SLIGHTLY MORE STABILITYWhile almost 81 percent of dealers found sales down or the same compared with the fi rst quarter of 2010, vendors were a bit more upbeat. Only 65 percent of them indicated sales were down or the same dur-ing the fi rst quarter of 2011. In fact, just over half of vendors (56.6 percent) indi-cated that sales were down; another 8.4 percent said sales stayed the same when measured against the fi rst quarter of 2010.

Slightly more than one-third (35.0 per-cent) of vendors reported that sales were up in the fi rst quarter of 2011 compared with the same period a year earlier.

The outlook of vendors was more mod-erate than their dealer customers, however. While 63.3 percent of dealers expect sales to increase over the third and fourth quar-ters, only 57.8 percent of vendors shared that expectation. Another 20.5 percent of vendors did not expect their sales to go up, compared with just 13.9 percent of dealers.

HHIQ_3Q_11_BusConditions.indd 9 11-07-21 4:50 PM


*Year-over-year change

The latest statistics from the HARDLINES Database reveal that the retail home improvement industry grew slightly in 2010 after two years of negative sales growth.

he retail home improvement indus-try in 2010 managed to avoid the declines that had been experienced

in the two preceding years. However, a slow second half of the year managed to all but negate any gains made by dealers in the fi rst half, resulting in the industry growing by a mere 0.2 percent.

The latest figures on the size of the industry, drawn from the HARDLINES Home Improvement Database, show that compound annual growth rate of 8.3 per-cent that marked the decade from 1997 to 2007 has been replaced by CAGR of only 1.3 percent over the past five years.

HELP FROM THE HRTCDespite the fallout from the recession, the industry in 2009 benefi ted directly from the impact of the Home Renovation Tax Credit. HARDLINES estimates that the HRTC pumped about $500 million back into the business, a boost that benefi ted everyone from independents to the big-box chains. That added revenue upped the year-over-year sales change by fully 1

percent, keeping negative growth in 2009 to 2.9 percent. This incentive gave the industry momentum into the beginning of 2010, as well.

However, despite a strong start, 2010 did not turn out to be the turnaround year deal-ers were hoping for. With sales virtually fl at from 2009, and preliminary indicators

SLOWER SECTOR GROWTH MARKS

NEW RETAIL REALITY

36

37

38

39

40

41

2005 2006 2007 2008 2009 2010

Sale

s ($

bill

ions

)

$36.76

$39.08

$40.92

$40.29

$39.12 $39.19

+5.6%*

+6.3%

+4.7%

-1.5%

-2.9% +0.2%

Industry Size 2005-2010 ($ billions)Growth among retailers of hardware and home improvement products (including related sales by mass merchants, Costco, and Canadian Tire) has slowed dramatically in recent years.

T

HHIQ_3Q_11_MarketReport.indd 10 11-07-21 4:57 PM


M A R K E T R E P O R TINDUSTRY GROWTH UPDATEINDUSTRY GROWTH UPDATE

showing continued fl at or even negative growth over the fi rst half of this year, the industry remains stuck in neutral.

TOP RETAILERS GOT BIGGERThe retailers that form the top 10 list fared slightly better than the industry overall, with their collective sales up 1.8 percent. This was due primarily to expansion strat-egies: RONA acquired TruServ Canada and Pierceys in 2010, adding an estimated $300 million in sales, plus another $100 million generated by new affi liate dealers and expansion efforts by existing stores. (NOTE: RONA also grew its wholesale supply side, Noble, last year. However, those sales have been backed out of the RONA total.)

In addition, Lowe’s Canada, through its aggressive expansion efforts, has entered the top 10 for the fi rst time, with esti-mated sales in 2010 of $371 million. Lowe’s aside, the big boxes continued to feel the brunt of the downturn more sharply than independents. That impact is refl ected in Home Depot Canada’s slowdown in 2010.

In addition, RONA’s big boxes, especially outside of Quebec, were hit hardest within that company.

The top 10 retailers now account for almost 60 percent of the Canadian retail home improvement market.

REGIONAL DISPARITIES ABOUNDEDHome Hardware, because of its broad range of traditional dealers across the entire country who encompass build-ing centres, home centres, and hardware stores, had a mixed portfolio that helped that group squeeze out a 2.1 percent increase in sales.

On the other hand, dealers that are more regionally focused had varying results last year: UFA, located in Alberta, felt the brunt of that province’s slowdown, while Federated Co-operatives Limited, which has the bulk of its dealers in Saskatchewan and Manitoba, fared better. Down east, Kent showed some gains in the midst of the rela-tively stable Maritime market, while picking up growth from the burgeoning economy in Newfoundland. Alpa Lumber, the giant

commercial operation that supplies much of the tract housing market in the Greater Toronto Area, was hit hard by the slowdown in new housing in that region.

THE BUYING GROUPS FARED WELLThe buying groups fared somewhat better, reaffi rming the viability of the indepen-dent in the new economic reality. Overall sales by independent dealers within the buying groups grew by 5.0 percent in 2010 to total $11.8 billion. Growth came from some modest same-store sales increases among members, but also from the drive by the groups to expand their mandate and draw in more commercial and specialty dealers.

While the first half of 2011 has yet to show a significant turnaround, dealers through the latter half of the summer have been reporting some rebound in sales activity. If weather conditions and consumer confidence can stay stable, that rebound could continue well into the fall, providing the boost dealers have been waiting for since this time last year.

Buying Group Sales 2009-2010 ($millions)Buying group 2009 2010 Change

ILDC† $1,716 $1,743 1.6%

Tim-BR MARTS** $3,000 $3,300 10.0%

Home Hardware*** $2,810 $2,918 3.8%

BMR $1,400 $1,400 0.0%

Castle $1,067 $1,100 3.1%

Sexton Group $1,191 $1,300 9.2%

Allroc* $630 $615 -2.4%

Delroc $603 $567 -6.0%

TORBSA $342 $400 17.0%

IRLY Distributors $183 $183 0.0%

TOTAL $11,226 $11,783 5.0%

* Estimated sales ** Does not include IRLY *** Building centre and home centre sales only† ILDC’s comprises membership by Sexton Group, Delroc, La coop, and FCL for total sales of $4.4 billion

HHIQ_3Q_11_MarketReport.indd 11 11-07-21 4:57 PM

Hardlines Home Improvement Quarterly www.hardlines.ca12 third Quarter / 2011

umber Liquidators is the latest American retailer to move into Canada. The specialty flooring

retailer’s first stores appeared in the Greater Toronto Area earlier this year.

Tyler Greenan, COO of Canadian opera-

tions for Lumber Liquidators, says the com-pany will open a total of eight stores here this year. In fact, with four already open (East York, Vaughan, Brampton, and Barrie, ON), the other four are expected to open before the end of August. Those openings

will be in Cambridge, Pickering, Windsor, and Stoney Creek, ON. Head office and warehouse are in Toronto’s north end.

“What we’re focusing on right now are stores we can service from our distribution centre in Toronto,” says Greenan, “basi-cally anywhere from Windsor to Ottawa for now.”

Each Lumber Liquidators store is no more than 1,200 square feet in size and car-ries about 340 different flooring samples. It also features unfinished products and a range of transitions and trims — all of which are proving popular, says Greenan, with Toronto-area contractors.

Lumber LiQuidators on track for canadian openings

L

tyler greenan, coo of canadian operations for Lumber Liquidators, says the company will open a total of eight stores here this year.

Newsroundupo f t h e h o m e i m p r o V e m e n t i n d u s t r Y Visit Hardlines.ca for breaking news in the home improvement industry

Verschuren challenges industry to innovateAnnette Verschuren, the former president of

Home Depot Canada, was inducted recently

into the Industry Hall of Fame, and she didn’t

miss the opportunity to leave behind some

parting words for the audience.

Verschuren, along with the late Joseph

Kuchar, founder of Recochem, was hon-

oured at a luncheon hosted by the Canadian

Hardware and Housewares Manufacturers

Association, which puts on the awards. She

called the induction “a great honour and I

accept it with grace.”

She then talked about the future of the

home improvement industry — and urged the

vendors in the room to continue to develop

new products. “I just want you to focus on

more innovation. Keep making it easier for

the customer. That customer is looking for

easier ways to do things.” She observed that

the DIY home improvement experience is

getting more complex. “Making that easier,

introducing new products — and making them environmentally responsible — that is

going to be our future.”

annette Verschuren, the former president of home depot canada, shown here with chhma chair doug Whaley of rust-oleum.

HHIQ_3Q_11_News.indd 12 11-07-21 4:52 PM


RONA’S DUTTON REVEALS PLANS FOR CALGARY DISTRIBUTION

ONA’s ownership of TruServ Canada gives the retailer added traction in the West. However, RONA will leave

the Winnipeg-based wholesaler to continue supporting its hardware customers — as well as V&S Variety and farm and pet dealers. “And it can support RONA dealers [carrying these products], too,” says Robert Dutton, president and CEO of RONA.

Meanwhile, the RONA Calgary distri-bution centre is being readied for further expansion — and possible relocation — as it will replace some smaller facilities in the area. “We will consolidate our existing facili-ties into a new larger facility,” says Dutton.

The fi nal details of the expansion, which will enhance shipments to RONA’s western

dealers, will be announced over the next couple of years.

He is confi dent his company’s distribu-tion network, including the TruServ Canada warehouse, can provide reliable service, not just in the West, but across Canada. “We’re going to prove to 5,000 independent dealers that we have a solution for them.”

RCanadian Tire has positioned itself

through the last recession as the start-

ing place for small household projects.

Now, the retailer has bought a house

of its own to put that strategy into

practice.

Tucked away in a small street in

suburban Toronto, the 1960s-vintage

back-split house is like a lot of its cus-

tomers’ homes: tired and run down, but

not in need of any major renovations.

It is, says Rob Shields, vice-president

marketing for Canadian Tire, a great

showcase for his company’s ability

to satisfy the homeowner’s need to

get small jobs done – “Change a light,

change a room colour — that’s exactly

where we’re positioned.”

The process of fi xing up the house,

which has so far included reseeding

and fertilizing the lawn, adding a bar-

becue and furniture to the backyard,

painting walls and adding dimmer

switches, is being supported by a

website, complete with 40 how-to vid-

eos. As more projects are completed

through the coming year, they will be

posted, as well, and visitors will have

the opportunity to make comments of

their own.

“At Canadian Tire, it’s about how to

make life easier for people without a

lot of time or money – that’s our sweet

spot,” says Shields.

KNOWLEDGE IS POWER. Stay in the know every single week with HARDLINES. Subscribe online at Hardlines.ca

Canadian Tire buys house to showcase small projects

TruServ’s new banner focuses on communityThe highlight of the 2011 TruServ Spring Market

was the introduction of a brand new retail banner for

independent dealers. TruServ, now owned by RONA, will

encourage its True Value hardware and building centre

dealers to replace that banner with the “TRU” name,

which will be used in three formats: TRU Hardware,

TRU Building Centre, and TRU Farm & Garden.

The conversion is expected to be completed by late fall of this year and the bulk of the

costs related to the conversion will be assumed by TruServ.

The name change dovetails with two situations. The Canadian rights to the True Value name,

licensed at a hefty price tag from The True Value Company in Chicago, come up for renewal in

October. Rather than renew, TruServ Canada and RONA are reinforcing the mandate to build

an all-Canadian company by creating a banner that is itself distinctly Canadian.

Bill Morrison, president of TruServ Canada, says the takeover by RONA was the springboard

for re-evaluating every part of the TruServ business. “We looked at all the things we did as a

company — location, strategies, marketing — and our brands.”

Through focus groups with both customers and dealers, the marketing teams at RONA and

TruServ identifi ed changes at the dealer level, including a new generation of younger dealer-

owners who are more connected both through the internet and to their own communities.

“We thought the time was right to be a real Canadian brand,” Morrison says.

Robert Dutton, president and

CEO of RONA.

HHIQ_3Q_11_News.indd 13 11-07-25 10:36 AM


Newsroundup

tiM-Br MartS BuildS identity and infraStructure

IM-BR MARTS Ltd. has been aggressively expanding its own banner among dealers, support-

ing it with a range of services to build the TIM-BR MART brand. The LBM buying group has also expanded into hardware distribution with the acquisi-tion of CanWel Hardware (now renamed Chalifour Canada). But another name that is part of the TIM-BR MARTS stable is the Ace brand, which TIM-BR MARTS has ownership of in Canada, through the CanWel acquisition.

For the past two years, Ace has been actively promoted in Quebec, and there are now about 125 dealers in that province flying the Ace banner. Outside of Quebec, TIM-BR MART’s own brand was getting the most attention – until now.

As Chalifour establishes itself as a national wholesaler, Ace is poised to go national as well. At least, that’s what Steve Stremecki, vice-president corporate devel-opment at TIM-BR MARTS, has indicated. “Our number-one brand is the TIM-BR MART brand, but we have the rights to an important asset,” says Stremecki, referring to the Ace mark. With the capability of TIM-BR MARTS to provide a full range of hardware through Chalifour Canada, he says, the opportunity exists to expand Ace, as well.

“Ace exists as a potential banner, either for TIM-BR MART dealers that have a focus on the front end or for a non-member who

needs a brand as a banner.”And that distribution business, Chalifour

Canada, continues to fortify its infrastruc-ture with a new DC and a raft of hirings — everything from IT people to inside sales positions. “Chalifour lets us provide better

service and a better range of products to independents,” says Stremecki. “And we have a dedicated team that can look after them.”

He says that the addition of the west-coast distribution facilities of IRLY Distributors, purchased by TIM-BR MARTS in March of this year, rounds out Chalifour’s offer-ing and supports enhanced service levels, including better turns for dealers. “We needed a solution that was farther west of the Rockies than we currently had.”

T

independents fall short on service vs. big boxesAs big boxes focus more on training and

customer service post-recession, the “cus-

tomer service gap” is narrowing. That was

the message of Scott Wright, director of

member services at the North American

Retail Hardware Association, in a presenta-

tion recently to Home Hardware dealers. He

cited an NRHA study that revealed four out

of 10 people say they get the best service

from big boxes, a dramatic change from

only a decade ago.

He blamed the independents themselves

for letting this happen. “The failure to train

has long-term implications — and I certainly

think this narrowing gap is the result of

the independents’ failure

to train.”

Wright challenged the

dealers to create a cul-

ture of training among

their staff. “Are you fostering a learning

environment in your store? Are you carving

out time for training?” he asked. “And most

importantly, do you view your employees

as an asset that you should invest in?”

His recommendation: dealers should

start with retail profitability training. “Too

many new staff need to keep in mind the

costs of breakages, stolen products and

even leaving the lights on — and under-

stand that it affects your bottom line.”

Steve Stremecki, vice-president corporate development at tiM-Br MartS

“We needed a solution that was farther west of the Rockies than we currently had.”

“I certainly think this narrowing gap is the result of the independents’ failure to train.”


Hardlines Home Improvement Quarterlywww.hardlines.ca 15third Quarter / 2011

he annual buying show of the Lumber and Building Materials Dealers Association is moving

from its traditional February time slot to mid-November.

The LBMAO’s Canadian Home Improve-ment Show has been rescheduled to take place Nov. 17-18, 2011, after evaluating the best times for dealers and vendors to book for the coming year. The show will remain at the Toronto Congress Centre.

Show organizers have identified that the new date will better fit into the fall booking season, especially for lumber and commodities purchases. It also posi-tions the show as the industry’s first event leading into the new year. A number of other changes are planned for the show to attract new vendors in a range of catego-ries, including lawn and garden, paint and sundries, and kitchen and bath.

“With a new date and expanded focus, CHIS is offering some of the industry’s

best value for the LBMAO,” says David Campbell, president of the LBMAO. “This means sales during the show, and leads to develop afterwards for our vendors — and a true head-start on the 2012 sales season for our retailers.”

Campbell says he expects the show to surpass typical annual sales volumes of 1,000-plus purchases, while offering increased value across the new industries being invited to participate.

Once again, the show will host the HARDLINES Dealer Conference, which will provide seminars for dealers on important topics such as social media and customer service.

LBMaO changes date Of Buying shOw

T

Americans are used to it, now Canadians feeling the pinchMore Canadians are adopting the frugal shop-

ping habits they picked up in the recession

even though they feel relatively optimistic

about the economy’s future, according to

new global research from Boston Consulting

Group. Americans, on the other hand, feel

more confident about spending than they

did two years ago, although they’re much

more pessimistic about their economy than

Canadian consumers.

Many Canadians are still feeling finan-

cially strained as policy makers warn

against the dangers of taking on too much

debt. Americans, in contrast, began saving

during the economic meltdown and now feel

less stressed than in 2009. It’s the reverse

of what happened during the recession, when

businesses in Canada often outperformed

their U.S. counterparts.

Online tool sales on the increase Consumer behaviour is changing when it

comes to power tool purchases. According to

a report from the NPD Group, the category in

the U.S. represents about $5.3 billion in outdoor

power equipment, $1.7 billion in power tools,

and $1.3 billion in hand tools.

The report also reveals that customers are

shopping online like never before.

Online sales are up 9 percent for power tools

and 7 percent of outdoor power equipment.

Hand-tool purchases by users 45 years and

over increased 11 percent over the past year,

while those 65 and over accounted for 30 per-

cent more in power tool sales, and 16 percent

more in outdoor power equipment.

Popular items, the report revealed, were snow

blowers (sales were up 6 percent from last year),

electric staplers and brad nailers, up 7 percent,

and wrenches, also up 7 percent. the LBMaO’s canadian home improvement show has been rescheduled to take place nov. 17-18, 2011.


Remodeling your kitchen is within your reachwith Rust-Oleum’s Cabinet and CountertopTransformations kits. Easily rolled and brushedon, these innovative coatings give you thepower to transform the appearance of yourcabinets and laminate countertops. Beautiful,durable and fast, these kits will give youresults you love in just a weekend.

R U S T O L E U M T R A N S F O R M AT I O N S . C O M

Roll-on countertops.

Before.

After.

No cabinet sanding or priming required.

Rust-Oleum_HHIQ_3Q2011.indd 16 11-07-21 5:10 PM


he kitchen is where a lot of families spend “common time” — cooking, reconnecting after work or school,

and casually entertaining family and friends. Bathrooms, on the other hand, tend to be where people spend “personal time” — grooming and relaxing. Manufacturers are constantly introducing new products and appliances that make home life more enjoy-able, are more effi cient to use, consume less energy, and are, overall, friendlier for the environment. Here are a few examples of some new products that exemplify current kitchen and bathroom design trends.

SHAKER STYLE CABINETRYAccording to a recent survey by the National Kitchen & Bath Association, Shaker cabine-try is now the second most popular style for new and retrofi t kitchens after Traditional style cabinets. Shaker cabinets offer a look that is clean, simple, and functional, and they blend in seamlessly with just about any kitchen design. The natural look of these cabinets means that they never go out of fash-ion. Renfrew is the newest addition to Home Hardware’s line of ready-to-assemble kitchen

cabinetry. With a three-inch-wide rail, the dark maple shaker door pro-vides a sleek transitional door style at an affordable price point. The uniform colour and smooth fi n-ish of solid maple make it easy to match the cabinetry with a variety of cabinet hardware.

RONA’s Orchard Park Suffolk is a full semi-custom European frameless cabinet built in Canada. It features a Shaker-style solid wood door available in maple, cherry, alder, and oak, with a choice of 45 different fi nish options, including rich glazes and hand-brushed fi nishes. Door and drawer fronts are fi ve-piece construction available in an optional wide rail format.

FRENCH DOOR REFRIGERATORSConsumers love the versatility of French door refrigerators — they’re the ones with the divided doors at the top and full width freezer drawers on the bottom.

Because they are one of the more energy intensive appliances in the home, consumers favour Energy Star rated models. Companies such as LG offer models with variable power output to better respond to small tempera-

ture changes without being on full power. The result is up to 17-percent less energy usage than models with conventional compressors. Other models fea-ture contoured doors, hidden hinges, LED interior lighting, a high-volume ice system, and a versatile four-compartment crisper system for easy access and optimal organization of fruits, vegetables, and beverages.

INDUCTION COOKINGInduction cooking is becoming much more popular — it allows for very fast, even heating with precise control at all temperature ranges and the surface is easy to clean. On induction cooktops, electricity fl ows through a coil under the ceramic cook top, producing a magnetic fi eld that creates a current, which heats any magnetic cookware placed on the cooktop. Only the cookware, and the food in it, is heated, and not the ceramic cooktop surface.

The GE Profi le Induction Cooktop offers a large 11-inch element that delivers up to 3,700 watts of heating power, a choice of 19 different power settings, pan pressure sensors that shut off if no pan is detected, warming capability, low-heat simmer set-ting for delicate sauces, and digital buttons rather than traditional knobs.

Power Boost technology offers versatile power sharing — an element can operate on the highest setting by reducing power from an adjacent element.

C AT E G O R Y S P O T L I G H T

BOLD IDEAS FOR KITCHEN & BATH

T

KITCHEN AND BATH

BY CARL DUGUAY

The GE Profi le Induction Cooktop offers a large 11-inch

element that delivers up to 3,700 watts of heating power.

HHIQ_3Q_11_Category.indd 17 11-07-21 4:48 PM


Apron Front SinkSDesigners and homeowners like apron front (or farmhouse) style sinks because of their visual appeal. Under-mount sinks are also becoming much more popular because they fit under the countertop, making it easier to swipe debris and spills into the sink - there is no ridge or gap between sink and countertop. kohler Vault under-counter apron front sinks don’t require a special apron front cabinet. They are designed to retrofit industry standard 30-inch and 36-inch base cabinets, or they can be installed in new standard cabinetry.

touchleSS FAucetSIf your hands aren’t clean and you reach for the faucet, you can guess where some of the dirt, and possibly bacteria, ends up. Touchless electronic faucets are suitable for people who love to cook, for children, and those with physical disabilities. Simply tap-ping any part of the spout or handle turns the faucet on or off. An adjustment handle changes the balance between hot and cold.

Delta’s touch2o technology is available on its Addison Kitchen Faucet Collection. Addison faucets feature a standard flow rate of 8.7 litres per minute, and a water-saving 5.7 flow rate. Touch2Oxt technology uses sensing motion to turn the faucet on when a toothbrush is waved within four inches of the faucet.

DigitAl Shower controlSSteaming hot, mildly warm, refreshingly cool — getting that just-right shower tem-perature can be frustrating. Not so with the new crop of digitally controlled shower-heads, which allow the tem-perature and flow rate to be set at the push of a button.

The Moen ioDigitAl shower system consists of an elec-tronic valve that manages the

hot and cold water supply, and a wall mount interface to control temperature and flow. The electronic valve can be located up to 30 feet from the bathroom in a closet, vanity, basement, or attic. The interface, mounted on the shower wall, provides quick visual feedback, with LED indicators that flash until the requested settings are achieved. Even if water is turned on in other parts

of the home, the ioDIGITAL will virtu-ally eliminate any noticeable fluctuation in water temperature.

innoVAtiVe toiletSToilets are notorious water wasters, and con-servation conscious consumers are increas-ingly looking to new high-efficiency toilets (HETs). Standard toilets consume about six litres of water per flush (lpf), while HETs use a more restrained 4.8 lfp. HET dual flush toilets provide the option of efficient rates as low as 3.4 lpf. kohler has a fairly wide range of energy-efficient product offerings, including an eco-friendly 3.8-lpf toilet.

toto’s Maris two-piece Dual Flush high efficiency toilet provides 4.8 lfp when the flush level is pulled forward, and 3.4 lpf when pushed back. It features a Double Cyclone Flushing System that flushes water through a series of jets in the toilet’s concave rim for removing debris and prevent streaks while rinsing the bowl.

pAintC at e G O r Y S P O t L i G h t

delta’s touch2O technology is available on its addison Kitchen

Faucet Collection.

there’S More to pAint than MeetS the eYe

nterior and exterior painting is one of the easiest and most cost-effec-tive ways to enhance home decor

and increase curb appeal, while at the same time boosting market value. And with a minimal outlay of cash, a good eye, and a few tools, just about any homeowner can re-paint a home, inside or out. No wonder it’s one of the most popular home improve-ment projects for DIYers.

Choosing the right colour combinations has never been easier. Consumers now have a wide array of sophisticated online digital paint selection resources. “Digital pallets” provide the online equivalent of swatches

and brochures, updated with the latest sea-sonal colour schemes, usually selected in collaboration with leading interior design-ers. “Virtual decorators” enable users to select a room type (kitchen, living room, bedroom, etc.) from a library of manufac-turer-supplied photos, and then digitally “paint” the rooms with various colour com-binations to achieve the desired look.

The very latest resources in colour selection are iPhone applications, like the Sherwin williams colorSnap, which provides instant access to a full line of available paint hues. pittsburgh paint’s color Sense game helps the would-be decorator determine

i



their colour personality by answering a series of user-friendly questions.

Nothing, of course, compares with seeing your chosen colours where they are meant to be — on walls, trim work, or ceilings. Companies such as Behr, Benjamin Moore, Cloverdale, and Pittsburgh offer paint sam-ples in two- to eight-ounce sizes for around $5. These provide consumers with the ulti-mate visual colour test before ordering large amounts of paint.

Selecting the right colour scheme is only half the equation. Manufacturers are con-stantly improving their paint formulation technology to ensure that products are eas-ier and safer to apply, more durable, and longer lasting.

Manufacturers have been lowering the level of volatile organic compounds (VOCs) found in paint for a number of years, grad-ually shifting to waterbased paint. For example, the Sico “Design” line has zero VOCs (before the addition of colourants). Increasingly, manufacturers are having their paints independently certifi ed through agencies such as EcoLogo, Green Seal, and Greenguard. Some manufacturers have their own programs, including Home Hardware’s EarthCare lines under the Beauti-Tone brand. Designations like these give consum-ers the assurance that products are meeting

fairly stringent environmental standards.Recycled paint is gaining more and more

presence in the marketplace. Laurentide Paints’ Boomerang brand is made of 90-per-cent domestic recycled paint. The com-pany adds about 1-percent new material to enhance lustre and viscosity. RONA’s Eco paintis made of recycled paint, while the can is made of 100-percent recycled plastic, and the paper label consists of recycled and processed fi bres from sustainably harvested wood.

High quality paints share a number of technological advances that make them a superior choice for interior and exterior home use than lower quality paints. In gen-eral, these paints use 100 percent acrylic binders rather than vinyl-acrylic blends, giving better stain and fade resistance, adhesion, and durability. Cross-linking technologies help paint stick better to most surfaces, prevent stains, reduce dripping, and give smoother fi nishes with reduced

brush marks. Ceramic microspheres help the

acrylic binders create a harder, smoother surface that increases wear and scrub resistance, while also helping to reduce stain pen-etration. Many of these paints are also self-priming (on most surfaces, a primer doesn’t have to be applied before painting). You’ll also fi nd a variety of addi-tives, such as mildewcides for controlling the growth of mildew and mould, particularly in damp environments like kitchens and bathrooms; preservatives, which

prevent paint from spoiling when stored; dispensing agents that keep the pigments evenly distributed in the paint; and anti-foaming agents that to help eliminate foam-ing and bubbling as the paint is applied.

ProClassic Interior Waterbased Acrylic-Alkyd from Sherwin-Williams is one of the few paints that use acrylic-alkyd hybrid resins. It provides the hardness and gloss of an alkyd paint with the quick drying, superior colour retention, convenient water cleanup, and lower odour and VOC advantages of acrylic. Available in a satin or semi-gloss sheen, this self-priming, low VOC paint is designed for trim work, mouldings, cabi-netry, doors, and windows.

Painting ceilings has been made just a little bit easier with Dulux Rolls on Pink and CIL’s Smart3 Magic White ceiling paints. These paints use a unique “Disappearing Dye” technology — the paint rolls on pink, making it easier to see which areas have been painted, but dries white within 60 minutes. Both are low VOC paints, and feature a non-splatter, non-drip formula.

Along with selecting the right colour scheme and knowing what to look for in a high quality paint, choosing the right type of paint to use for the job at hand, and knowing how best to apply the paint, are critical factors in any painting project. In fact, manufacturers estimate that as many as 95 percent of consumer complaints have to do with issues of surface preparation and product application. This is where savvy retailers can really stand out — providing consumers with reliable, practical product application information.

Benjamin Moore’s Personal Colour Viewer lets users upload their own photos.


November 17 & 18, 2011Toronto Congress Centre – South Building

Contact us at 1-866-535-0520visit www.canadianhomeimprovementshow.com

NO, YOU’RE NOT SEEING DOUBLE!

Last show’s success called for an encore! With a new November date moving forward, and an expanded industry focus and product showcase, the Canadian Home Improvement Show offers you a chance to jumpstart your 2012 sales. Hundreds of exhibitors and retailers, thousands of sales to be made. This true buying show is the place you want to be come November. Build partnerships, boost sales, develop networks and start building for your future today!

BOOK YOUR BOOTH! LIMITED SPACE IS AVAILABLE AND FILLING UP FAST! EARLY BIRD SPECIAL ON BOOTH RATES UNTIL JULY 31ST.

Yes, it’s the second show of the year but it’s bigger, better and building for the future! Plus a new date!

DON’T THINK TWICE! MARK YOUR CALENDARS TODAY!

CHIS_3Q_020-021.indd 20 11-07-21 5:13 PM

November 17 & 18, 2011Toronto Congress Centre – South Building

Contact us at 1-866-535-0520visit www.canadianhomeimprovementshow.com

NO, YOU’RE NOT SEEING DOUBLE!

Last show’s success called for an encore! With a new November date moving forward, and an expanded industry focus and product showcase, the Canadian Home Improvement Show offers you a chance to jumpstart your 2012 sales. Hundreds of exhibitors and retailers, thousands of sales to be made. This true buying show is the place you want to be come November. Build partnerships, boost sales, develop networks and start building for your future today!

BOOK YOUR BOOTH! LIMITED SPACE IS AVAILABLE AND FILLING UP FAST! EARLY BIRD SPECIAL ON BOOTH RATES UNTIL JULY 31ST.

Yes, it’s the second show of the year but it’s bigger, better and building for the future! Plus a new date!

DON’T THINK TWICE! MARK YOUR CALENDARS TODAY!

CHIS_3Q_020-021.indd 21 11-07-21 5:13 PM


nergy management is a key com-ponent of the home improvement market. With the rising cost of elec-

tricity, homeowners are increasingly look-ing for innovative ways to reduce costs and manage home power consumption more effi ciently. Manufacturers are responding by bringing a range of new energy conserv-ing products and technologies to market.

THE NEW LIGHTING TECHNOLOGY: CFLS AND LEDSWhile incandescent light bulbs have been the standard in Canadian homes for the past century, they’re rapidly being phased out, largely by compact fl uorescent lamps (CFLs). The major reason for this is that incandescents aren’t very energy effi cient. Only about 10 percent of the power they use is converted to light; the rest is consumed by heat. CFLs however, consume about 75-percent less energy than incandescents, last longer, and cost only marginally more.

They do have their down-sides, however. They contain some mercury (albeit in min-ute quantities), they don’t light up instantly when turned on, and generally can’t be used in enclosed fi xtures or those that vibrate — ceiling fans, for example. As well, switching CFLs on and off frequently can shorten their life span.

Light-emitting diode (LED) lamps are another alternative low-energy technology, and one that’s rapidly gaining attention. While more expen-sive than their CFL counterparts, they use appreciably less power per unit of light gen-erated. In addition, they don’t contain any mercury, don’t generate much heat, reach full brightness instantly, and they aren’t affected by cycling the power on and off. Most important, they last up to 10 times longer than CFLs.

It can be somewhat diffi cult to disposal of high effi ciency bulbs, particularly in rural communities, and specifi cally for CFLs, which contain mercury. A number of CFL retailers have their own recycling pro-grams, including Home Depot and RONA, and some provinces have established CFL recycling programs. As with incandescent bulbs, LEDs can be disposed of with regular household waste (neither are recyclable at this time).

HYBRID CFL BULBSA long-standing complaint with CFL bulbs is that they don’t immediately come to full brightness when switched on. Not so with the new GE Energy Smart Soft White and Reveal non-dimmable hybrid CFL-halogen

bulbs. Inside the tra-ditional incandes-cent-shaped bulb is a compact fl uorescent

coil tubing and a small halogen capsule. When

power is turned on, both the coil tubing and the hal-

ogen capsule come on, so that the bulb has full bright-ness immediately. Once the coil tubing reaches its full brightness, the halogen capsule automatically turns off, preserving the energy effi ciency of the bulb. These

hybrid bulbs, which have lower mercury content than regular CFLs (1 mg compared to 1.5-3 mg), are rated for 8,000 hours.

INCANDESCENT STYLED LEDSUntil recently LEDs in a traditional bulb style were only available for 25- and 40-watt bulb replacements. The modern looking Energy Star certifi ed Philips AmbientLED is a dimmable 12.5-watt replacement for 60-watt incandescent bulbs. It produces 800 lumens in a soft white light, while lasting 25 times longer and using 80-percent less energy than a 60-watt incandescent. The bulb has a six-year warranty. Philips makes 18 other styles of LED lights, including 25- and 40-watt incandescent replacements, fan, candle, mini fl ood, and fl ood style bulbs.

LOW VOLTAGE LED TAPES AND STRIPSTask specifi c and accent lighting, in the form of tracks, strips, and pods are com-monly used in kitchen and display cabinets, alcoves, narrow hallways, walk-in closets, and bathrooms. Low voltage LED lighting is becoming more popular than halogen light-ing for this purpose, in large part because the lights run cool, last an exceptionally long time, and are very energy effi cient.

ELECTRICALC AT E G O R Y S P O T L I G H T

E

ENERGY MANAGEMENT ONE WATT AT A TIME

The development of dimmable technology is helping overcome consumer resistance to LEDs. SYLVANIA dimmable LED retrofi t lamps combine energy savings with long life.

They do have their down-sides, however. They contain some mercury (albeit in min-ute quantities), they don’t light up instantly when turned on, and generally can’t be used in enclosed fi xtures or those that vibrate — ceiling fans, for example. As well, switching CFLs on and off frequently can

Light-emitting diode (LED) lamps are another alternative low-energy technology, and one that’s rapidly gaining attention. While more expen-

coil tubing and a small halogen capsule. When

power is turned on, both the coil tubing and the hal-

ogen capsule come on, so that the bulb has full bright-ness immediately. Once the coil tubing reaches its full brightness, the halogen capsule automatically turns off, preserving the energy effi ciency of the bulb. These

hybrid bulbs, which have lower mercury content than regular CFLs (1 mg compared to 1.5-3 mg), are rated for 8,000 hours.


CONFERENCE SERIES 2011Hardlines Conference

Make this the year to join us at the 16thjoin us at the 16thjoin us at the 16 Annual

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October 27-28, 2011

SAVE ALMOST

$400!Special pricing for

hardware & building centre dealers!

Learn• How the “shop local” movement is taking the country by storm.

• The latest changes that are rocking the retail world.

• How – and why – Castle is forging alliances with U.S. wholesaler Orgill.

• How urban hardware stores are surviving in this era of big Boxes.

• Why independent dealers are focusing on “better” and “best” assortments and leave the entry level products to Walmart.

• How global economic issues and effects of economic, demographic, and social trends will affect you.

Early Bird Special on now

www.hardlinesconference.ca

Sponsored by

HARDLINESconference_AD_HHIQ_2011.indd 23 11-07-21 5:14 PM


ElEctricalC at e G O r Y S P O t L i G h t

The Flexible lED tape light from liteline, avail-able through Home Hardware, comes in one- and two-metre lengths. Two units can be joined together for a total continuous run of four metres. Tape lights

produce 90 lumens per meter in a warm white light and have a linear beam spread to provide an even light distribution.

Similar to tape lights, flexible stick lights, like those from lighting Experts, and avail-able through RONA, provide an LED option for mounting under kitchen cabinets. The Bazz Stix3 lED stick lights are the epitome of slim, elegant styling. A kit contains three 12-inch-long sticks, an AC adapter, and 70-inch power cord. Up to six sticks (two kits) can be daisy-chained for a six-foot run.

DimmEr SwitchESBoth CFL and LED lighting technology can benefit from the use of dimmer switches — they not only save energy and money, but are ideal for creating a soothing and mood-enhancing environment, whether in the dining room, living room, or bedroom. And, dimming a light bulb can extend its life. Dimmers are a relatively inexpensive upgrade project that most avid homeowners can undertake. lutron Skylark contour single pole three-way slide dimmers incorporate “Hedrona” technology, which provides advanced dimming circuitry that is com-patible with most high-efficiency dimmable CFL and LED bulbs.

timEr SwitchESLike dimmer switches, timers provide an ideal way for homeowners to save energy by using lights and appliances only when needed. They can also provide an added level of security by turning indoor and outdoor lighting on automatically before arriving home from work or when away. leviton offers a 24-hour

programmable electronic timer switch with a built-in astro-nomical clock that automatically adjusts to local sunrise and sun-set times and to daylight savings time. The timer accommodates up to 50 timer event settings per day, and features a backlit LCD display and an LED locator to make the timer easy to find in the dark. It works with single pole appliances or three-way appliances.

Smart thErmoStatSIncreasingly, power utilities are varying what they charge for electricity throughout the day, based on fluctuations in the demand for power. Consumers pay lower rates for off-peak hours, typically from 9 p.m. to 6 a.m. Programmable thermostats, which enable homeowners to adjust heating and air condi-tioning appliances for different times of the day for up to a seven-day period, have been around for some time. However, the new crop of smart thermostats is more sophisti-cated than before and better able to manage household energy consumption.

The ecobee Smart thermostat is a WiFi enabled programmable thermostat that connects to the Internet via a homeowners wireless computer network, enabling remote control of home HVAC appliances (heating, ventilation, and air conditioning) from any-where, at any time. Homeowners can also control the thermostat through an iPhone or iPod Touch app. The ecobee comes with an Equipment Interface Module, which is connected to the HVAC appliances, a 12-volt DC power adapter, and a wall-mountable thermostat. The thermostat features a full-

colour LCD screen with touch-screen technology, a seven-day programming schedule, appli-ance status reports, and set up alerts and service reminders. There is even a weather button that provides access to five-day local weather forecasts.

EnErgy monitorSMonitoring home energy consumption has become much easier with the introduction of easy-to- install and simple-to-use energy monitors. These monitors display reports on energy usage in real time, enabling homeown-ers to find out which appliances are using the most power and at what times of the day.

Clamp-on style monitors, like the Black & Decker Em100 Power monitor, are designed for DIY installation. They consist of a water-proof optical transmitter that attaches onto the power meter, typically located outside the house, and an easy-to-read wireless remote display that shows month-to-date and predicted monthly power usage, along with the outside temperature.

Current transformer style monitors, like the Energy Detective 5000, are more intricate, though installation is likely within the scope of avid DIYers. They consist of a transmit-ter that is attached to feed wires on a home’s breaker panel, and a receiver unit that plugs into a household electrical receptacle and transmits data to the internet via a homeown-er’s wireless computer network. An optional wireless display unit is also available.

With the increasing focus on energy con-servation and environmental sustainability, we can expect to see a marked increase in new, innovative technologies and products to help homeowners better manage home energy consumption.

Carl Duguay is a freelance writer with over two decades of experience reporting on the home improve-ment and woodworking sectors.


To find out how you can benefit by joining Home, visit home-owner.ca - or talk to one of us.Dunc Wilson, National, 519.498.1302 Georgette Carriere, Ontario, 519.501.5988 Luc Martin, Quebec, 819.357.0203

Andrew Parkhill, Western Canada, 604.751.3853 Kevin MacDonald, Atlantic Canada, 902.368.1620

“Joining Home Hardware has given me everything I expected from a banner – and then some. Home has a name that customers know and recognize, with flyers that truly help bring in business, a fantastic variety of products and pricing that always keeps us competitive. Now I can take on any other merchant in the industry. I’m proud to call myself a Home Owner – and you will be, too.”

David GrenonCentre de Rénovation FDS Inc.

Saguenay (Jonquière) QC

18106 _HIQ_DavidGrenon_ENDocket/Job: 18106Client: Home Hardware

Trim: 9" (w) x 10.875" (h)Live: 8" x 9.875”Bleed: .25"

Publication: N/AInsertion Date: Colours: CMYK

Art Director: Mark Copywriter: RickMac Artist: Ross

Proof printed at 100 %

18106_HIQ_DavidGrenon_EN.indd 9 11-06-13 11:12 AMHH_3Q_025.indd 25 11-07-21 5:16 PM


Balance of Power

BY JOHN CAULFIELD CANADA’S LEADING BUYING

GROUPS KEEP SHUFFLING THE COMPETITIVE DECK WITH

ACQUISITIONS AND ALLIANCES.

HHIQ_3Q_11_BuyingGroups.indd 26 11-07-21 5:00 PM


Balance of PowerB U Y I N G G R O U P SFEATURE

IM-BR MARTS’ purchases, within a fi ve-month

span, of CanWel Hardware and the distribution

business of IRLY Distributors Ltd. completed

the circle for the Calgary-based buying group in its

quest to provide a coast-to-coast hardware distribu-

tion solution to independent dealers.

With fi ve distribution centres serving hundreds of

dealers, CanWel (now called Chalifour Canada) and

IRLY elevate TIM-BR MARTS’ importing capabilities

and fl yer program, says Steve Stremecki, the buying

group’s vice president of corporate development.

TIM-BR MARTS was already IRLY’s biggest customer

before this deal, but now “we are working as an inte-

grated team,” he says, adding that IRLY’s CEO, Susan

Robinson, “will become integral to that team.”

Most important, the two deals — consummated

in October 2010 and March 2011, respectively —

enhance TIM-BR MARTS’ value to 750 dealer-mem-

bers that generate about one-fi fth of their retail busi-

ness from hardware sales and, Stremecki is quick to

point out, are still in the driver’s seat when it comes

to choosing their product suppliers.

T



Those acquisitions certainly raised the stakes for other buying groups. TIM-BR MARTS is waging a winner-take-all bat-tle with equally aggressive rivals Home Hardware and RONA for control of Canada’s $40 billion in retail sales of hard-ware, lumber, building materials, and other home-improvement products.

RONA is pushing hard to bump up its cur-rent 16 percent market share to at least 25 percent in four years, asserts its CEO Robert Dutton. His group hasn’t been shy, either, about acquiring businesses to expand its reach, including last November’s purchase of the Winnipeg-based wholesale distributor TruServ Canada.

The other national group, Home Hardware, isn’t yielding an inch of its 12 percent share. Add to those totals the 14 percent of the market’s retail sales that Home Depot and Lowe’s aggregately extract, and it’s easy to

see why other buying groups are fighting for any advantage they can muster for themselves and their independent mem-bers. If that means acquiring or forging alliances with other groups, so be it, even when such marriages overlap and turn the very idea of competition on its head.

RecRuitment tools At the centre of a lot of this activity is often the powerful Independent Lumber Dealers Cooperative (ILDC). Its membership includes Winnipeg-based Sexton Group, whose 290-dealer network can order hard-lines through ILDC’s Spancan buying orga-nization, which includes TIM-BR MARTS and a few other groups as members.

“Hardware has become a recruitment tool for the buying groups,” observes Ken Jenkins, president of Castle Building Centres. He should know. Castle struck a distribution

alliance last December with Orgill Inc., the Memphis, TN-based hardlines wholesaler. What makes the Castle-Orgill deal differ-ent from other groups’ distribution pro-grams, Jenkins insists, is, “We provide the independent with an arm’s length option,” which doesn’t require the dealer to make commitments to either inventory levels or marketing banners.

Jenkins says Castle’s alliance with Orgill “was important for us down the road,” and would have happened regardless of the TIM-BR MARTS/CanWel deal. He explains that his company looked to an American-based company as a partner because it could buy on a U.S. cost basis that Jenkins estimates is 10 to 35 percent below what Canadian distributors are paying for prod-ucts today.

Jenkins adds that his company has been willing to enter into alliances — such as

FeAtuReB u Y i N G G r O u P S

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Castle BuildingCentres Group

Specialtydealers

do it Best(u.S.)

Corporate Stores

Canac

PennerBuildingCentres

Marcel Barilltée

Guillevinint’l inc.

Can-Cellindustries

unionhardwareWholesale

NorthernMetallic Sales

(GP) Ltd.

Mac Morindustries

Ltd.

Peaveyindustries

a.J.Walker &Son Ltd.

tSC StoresLtd.

CaverhillLearmont

inc.

Prestonhardware

Co-opatlantic

Noble dick’s Lumber Matérioux Coupal StudiO Botanix tru

affiliates and Franchise

dealers

totem division

réno-dépôt division

Commercial and

Professional

Curtis Lumber

Specialized Consumer

truServ Canada

homehardwareStores Ltd.

rONa inc. BMrhardware

Potvin &Bouchard

Matcoravary

CommercialBuildingSupplies

A.R.e.n.A. BmRthe Group

tOrBSaLtd.

ePic AlliAnce BuYinG GRouP

octoHARDWARe

How the buying groups are organized



those it has with OCTO Purchasing Group and TSC Stores — as long as they have the potential for contributing to the profitabil-ity of Castle’s dealer-members. That was the primary rationale behind Castle’s alli-ance in February with TORBSA, the buying group whose 27 members specialize mainly in gypsum wallboard distribution.

That combination, known as Epic Alliance Buying Group, “presents growth opportunities for both companies,” says TORBSA’s general manager Bob Holmes. Joining forces with Castle also gives TORBSA “national reach,” and “opens doors to certain product categories” for its members.

However, when asked if the Castle-Orgill deal came into play, Holmes says that his members’ hardware purchases are “mini-mal,” and that he views Orgill “as just another supplier.”

A FINE BALANCE Holmes discounts any possibility that its alli-ance with Castle would result in TORBSA’s members adopting some kind of marketing banner. On that subject, he’s pretty adamant, too, that a banner program limits which partnerships his company would consider. “It would be okay if our dealers also belonged to OCTO, but not Home Hardware.” Vendors have a major problem with dual membership, he says, “which they really monitor because they don’t want dealers playing one group’s [prices] off of another’s.”

The pros and cons of banner marketing have practically become points of honour for buying groups and how they position themselves with dealers and suppliers. Jenkins, for example, says his company contributes to its members’ profitability by “not spending a lot on advertising or banner campaigns. We focus on the buying side

and on our operating costs,” which do not include warehousing products.

Steve Buckle, Sexton’s general manager, admits candidly that his biggest concern over the last five years has been “keeping the members we have.” To that end, Sexton has avoided dealers that are clamouring for ban-ner-style identification and marketing. “We promote simplicity: having the best buying programs and driving those benefits down to our members.” That includes the relation-ship with ILDC and its dealer-members, whom Buckle says provide Sexton with the “granularity, down to the SKU level” it needs to negotiate aggressively with suppliers.

He’s less inclined, though, to jump into a distribution deal à la TIM-BR MARTS/CanWel. “We feel our membership already has access to hardlines through direct pro-grams with manufacturers. And there’s still two-step distribution in Canada.”

FederatedCo-operatives

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Chalifour Canada

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ChalifourWest

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Federated Co-operatives

Sexton Group

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dealersalbert’sPaL

depot

aLLrOC WiNrOC

SUPERIOR PLUS PILON LTÉE SPANCAN

Canada’s hardware and LBM buying groups compete

and interconnect in ways that may sometimes defy

logic — but they all aim to optimize purchasing power and assortments

for independents.

“

”



TIM-BR MARTS’ acquisitions of CanWel Hardware and IRLY have prompted it to reconsider the merits of co-branding. This decision won’t be as easy at one might think. While the word on the street is that IRLY will eventually be renamed Chalifour West, the IRLY banner still resonates with dealers in Western Canada, 46 of which still fl y that fl ag.

On the other hand, Stremecki notes, there are 125 dealers in Quebec that buy through Chalifour and identify themselves as Ace stores. “We have a lot more dealers now, and not all of them are TIM-BR MART affi li-ated,” he says, “so we want to give dealers as many options as possible.”

SHOPPERS SEEK VALUEBanners alone, though, won’t be enough to woo Canadian shoppers who, during this turbulent economic period, have become even more value oriented. The 186-member

buying group BMR is also counting on new programs and departments to carry the day, says its president Yves Gagnon. Last year, BMR rolled out an agro and farm department called Agrizone, which through mid-April 2011 had been adopted by 79 of its dealers’ stores.

This year, BMR debuted a décor depart-ment called Boutique Inspiration, which 52 stores have taken on. The spokesperson for that program is the popular Quebecoise

décor celebrity Frances Arcand, whom Gagnon praises as “a very good coach and teacher” for dealers and customers alike. Several dealers are also staffi ng their stores with “home staging” specialists who can show customers trying to sell their homes how best to present them to buyers.

On May 5, BMR opened its fourth distri-bution centre east of Quebec City. Gagnon says his company is more than capable of providing its dealer-members — whose stores are mostly contractor-oriented lumberyards and building centres — with their hardware needs. And despite compe-tition that has only gotten stiffer of late, BMR reported strong sales in January and February, not so great sales in March, and “fair” sales in April. Gagnon anticipates a good second quarter, “but I don’t want to look further ahead; that’s for the gurus who got us into this mess.”

In light of current market conditions, buying groups must constantly be on the prowl for ways to increase their businesses — and all of the buying groups expect some growth from adding new members. “We’ve found a niche to help entrepreneurs get into the business,” says Jenkins, who notes that 80 percent of these entrants are opening new stores. Castle is also looking to bolster its Commercial Building Supply division.

But adding members isn’t necessarily driv-ing these groups the way it once did.

In late April, for example, TIM-BR MARTS signed three new dealers with 11 locations. But Stremecki insists that growth for growth’s sake is not his company’s goal. “It’s less about adding notches to our belt than helping the dealers that brought us to the dance,” he says. “The goal is to build on what we have.” Stremecki points out that many of TIM-BR MARTS’ dealer members are consolidating the industry by acquiring other dealers’ stores.

Gagnon says BMR is also less focused these days on adding members then on “making sure we have the right group of existing dealers, and that they are satisfi ed.” Part of that effort involves succession plan-ning, and making sure that a dealership lives on after its current owner moves on.

BMR has a list of people who are interested in buying and running a

BMR-affiliated store or yard. That includes an investor in France “with lots of money,” who called Gagnon recently to say he’s interested in a store of his own. When asked how this investor had heard of BMR, Gagnon laughed and said, “who knows?”

But with business conditions being what they are, no buying group is leaving any stone unturned.

FEATUREB U Y I N G G R O U P S

Hardware has become a recruitment tool for the buying groups“ ”



ust before the end of last year, Orgill Inc. formalized a strategic partnership with the Canadian

buying group Castle Building Centres Group Limited.

With that deal, Orgill at last made a definitive commitment to Canada.

But the road to Canadian customers is a long one, filled with pitfalls.

and it’s a road other u.S. distributors have tried to negotiate in the

past. Names like Coast-to-Coast, ServiStar, and ace hardware all

tried — with limited success.

ron Beal, the president and CeO of Orgill, doesn’t expect to make

the same mistakes as its predecessors. instead, he and his team have

taken their time and done their homework up here. they’ve spent years

testing the market with a handful of select dealers across the country,

getting used to differences in culture, interruptions at the border, the

tangled web of interactions among our country’s buying groups, plus

changes in the value of the dollar — and most importantly, Canada’s

dauntingly vast geography.

r O N B e a LExEcutIvE INtERvIEW

OrGiLLCeO SetSSiGhtS ONCaNada

J

Orgill is a U.S. hardware wholesaler. It’s based in Memphis, TN, which is a long way from Canada. But despite challenges, that country’s largest

independent hardware distributor has steadily been making inroads here.

INtERvIEW WItH ORGILL’S PRESIDENt AND cEO, RON BEAL

HHIQ_3Q_11_ExecInterview.indd 31 11-07-21 4:51 PM


It has also waited until it was a truly national entity in its own country. It has developed a cohesive infrastructure in the U.S. with a network of distribution centres that now serves most of the U.S. market. “This is a total, total commitment,” says Beal. “From our standpoint, Canada is now part of our core business.”

The turning point occurred when Orgill stopped viewing Canada as part of an international initiative. Instead, this country was reconsidered as part of an overall North American strategy. “What is different is that we’ve taken a totally fresh view of Canada as a result of the activities we’ve had up there,” Beal points out.

The heart of that strategy is a north-south flow of products, rather than viewing Canada in a strictly east-west fashion.

“What we’ve tried to do is eliminate the 49th parallel,” he con-tinues. “Logistically, our distribution patterns will be north-south. Traditionally, Canadian distribution patterns have been east-west. Nobody has done that before.”

Today, after testing the waters with dealers of all stripes, after considering whether to set up shop here or ship from the States, Orgill has forged its alliance with a single group. “Canada is a big country, but right now we are completely focused on working with Castle and the Castle members,” says Beal.

“We want to make sure we can execute for the Castle dealers who have made the commitment.”

In growth modeMaking the Castle deal work means having a range of hardware products to help building supply dealers grow — and profit from — a more complete range of products on the retail side, or the

front end. Orgill can grow that business in at least three ways. First, it has to convince dealers to use it as hardlines supplier of choice, thereby replacing existing suppliers such as Chalifour Canada and TruServ Canada. Then it has to convince those dealers to enhance their front end business.

And finally, it can provide an option that enables Castle to grow its own ranks.

Case in point: the recent alliance between Castle and TORBSA. A commercial buy-ing group based in Bolton, ON, TORBSA’s 49 member outlets join Castle’s 280-plus dealers mainly to increase its buying power for com-modity purchase. But the arrangement also gives TORBSA members access to hardware buys through Orgill, should they so choose.

“We see an opportunity to grow the front end — that’s what we do,” Beal says. “We see the

potential. We have a real record of success with building materials dealers to help them expand the front end.”

the orgIll offerIngOrgill’s roots date back to 1847, when it was founded in Memphis, TN. Today, it is has six full-line hardware distribution centres across America. Those facilities carry 75,000 SKUs across a range of categories, including specialty products such as commercial landscaping and barbecues, and non-traditional assortments that include work wear and propane. It sells into more than 60 countries.

Canadian dealers have had the chance to see this offering at Orgill’s own markets, held twice a year, in Orlando in February and Boston in August. The number of Canadians in attendance has grown steadily to the point that last February, fully 150 of the 400 “prospects” at the market were from Canada — and 138 of those were Castle members.

Early in March of this year, the first Orgill trucks began com-ing across the border. Orgill is taking every step it can to make the receipt of its products from the U.S. as hassle-free as possible

eXeCUtIVe InterVIewr o n B e a l

orgill’s Canadian Compliance team at their weekly meeting, where they recently added 35 fully Canadian-complaint vendors to orgill’s product offering. (l-r): randy Williams, senior vice-president of operations and logistics; delores Coble, vice-president of merchandising; ron Beal, president and Ceo; and eric divelbiss, vp, controller.

logistically, our distribution patterns will be north-south.

traditionally, Canadian distribution patterns have been east-west. nobody has done that before.”

“

PHO

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for Canadian dealers — including payments in Canadian dollars. “We’re trying to do everything we can for our Canadian customers to make the fact that we’re not located in Canada as transparent as possible,” he says.

The CasTle ConneCTionTrue to its word, Orgill is relying on Castle to be not only its core customer in Canada, but its eyes and ears as well. Castle has hired a team of “hardlines specialists” who are charged with visiting stores and helping Castle dealers understand how to grow their front end. While there may be potential to knock on new doors with the Castle/Orgill combined offering, the Castle team of hardlines specialists will focus for now on the Castle dealers, says Beal.

Beal calls Castle a true partner. “We have committed to be a major player in Canada and Castle will be a major player for us along the way.”

The ChallengesWhile Orgill has proven itself a cost-effective alternative for many Canadian dealers already, the distributor must prove that it can offer competitive pricing across a full assortment of products, not just special items. The inclination of dealers to “cherry pick” the best priced items from a wholesaler can spell doom. It was a major reason other suppliers, such as Ace in the past, had trouble. It was also the sticking point for BMR when it pulled out of its agree-ment to supply TIM-BR MART dealers in Ontario (then called Homecare) a decade ago.

To that, Beal simply points to the Orgill market, held twice a year for its retail customers worldwide. “We’ve got enough prod-ucts there with Canadian flags on them to be able to offer full replenishment.”

Orgill is also figuring out Canadian compliance laws, which include language requirements for the country’s two official lan-guages, as well as differing standards for a range of products, espe-cially in electrical and plumbing. The company is busy upgrading its product lines to the point that roughly 60,000 of the 75,000 SKUs in its warehouse in Inwood, WV, are now Canadian compliant.

“Our goal is to be 100-percent compliant by the end of 2011,” says Beal. “We do have a plan to have more dedicated Canadian-only product in West Virginia. But what we really want to do — and have made tremendous headway in that — is to make our product North American compliant.”

Geographically, the distribution centre in West Virginia makes sense for Eastern Canada, especially in Ontario and parts of the Maritimes, but even Beal admits that Orgill has some distance to cover to serve Western dealers. Nevertheless, until business in the West reaches a level that warrants shipping Canadian-compliant

product from one of its other distribution centres, either in Hurricane, UT, or Sikeston, MO, Orgill will subsidize the ship-ping costs to dealers in the West.

Beal also admits that the strength of the Canadian dollar vs. the U.S. currency works in Orgill’s favour. But he sees a lot of room to move: even if our dollar drops, he is confident his company can remain competitive with Canadian suppliers.

The fuTureBeal says Orgill is taking a long-term view of its Canadian expan-sion plans. He is keenly aware that others have tried — and failed. “We believe it’s a significant market, with a lot of dealers in Canada who are similar to our customers in the U.S. They have the same customers and the same needs, and carry the same products,” he says.

“We believe that Canada can be a very significant market for Orgill and we’re committed to do anything we can to make that happen.”


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he 16th Annual HARDLINES Conference will allow delegates to educate and expand their busi-

ness network, while meeting industry giants and colleagues face to face. As a forum for leading retail minds, suppli-

ers and retailers alike will take advantage of the opportunity to gain new insights into economic conditions and trends that affect this industry. Business-building seminars will cover topics such as social media for dealers and brand build-

ers, hot product trends driving retail assortments, how to connect with retail buyers, and why the top retailers want you to go green.

Drawing delegates from Canada’s top home improvement retailers and buying

groups, this year’s event is bound to be full of exciting opportunities. Seminars by top retail executives and economic experts will be held throughout the two days.

Featured speakers this year include experts in the fi elds of trend forecasting,

global economy studies, expanding your target market, and how local stores can suc-ceed in a big box world. Headliners include:

ANTHONY STOKAN, Principal at Anthony Russell and Associates. Anthony travels the world consulting with shopping centres, developers,

and leading retailers. Our resident retail guru has been a regular speaker at our con-ferences — drawing enthusiastic response as he outlines the latest changes that are rocking the retail world.

KEN JENKINS, President of Castle Building Centres Group Ltd., Ken heads up one of the most dynamic, high-profi le buying groups in

the country. He has led Castle to a leader-

Suppliers and retailers alike will take advantage of the opportunity to gain new insights into economic

conditions and trends that affect your industry“ ”


BY LISA TERRY

T

The HARDLINES Conference will be held on Oct. 27 and 28 in Toronto. Two knowledge-packed days will be full of ideas to challenge and inspire dealers and suppliers alike.

HHIQ_3Q_11_Conference.indd 34 11-07-21 4:45 PM


ship position in home improvement retail, expanding his group in new directions and forging alliances with U.S. wholesaler Orgill and Ontario-based TSC Stores that have caught the attention of the industry.

GINA SCHAEFER, owner of seven Ace Hardware stores in Washington, D.C., Baltimore and Takoma Park, MD. Can smaller, urban hardware

stores survive in this era of big boxes and power centres? Learn how the “shop local” movement can have meaning for today’s home improvement customers.

TERRY DAVIS, Vice-President and COO of Home Hardware Stores Ltd. Many Home Hardware dealers are focus-ing on “better” and “best”

assortments, and leaving the “good” or entry level products to Walmart and the dollar stores. This move to a more décor and style oriented approach is being led by Home’s paint division and its Home Furniture stores. Find out how this trend is affecting the direction of home improve-ment retailing in Canada.

IRA KALISH, Director of Global Economics at Deloitte Research. Dr. Kalish is an expert on global economic issues as well as the effects

of economic, demographic, and social trends on the global business environ-ment. His assessment of the global econ-omy — and how it will affect our country and our economy — is both inspiring and thought provoking.

PROFILES IN LEADERSHIP – SPECIAL GUEST SPEAKERHAZEL McCALLION, Mayor of Mississauga, ON. At the age of 90, Her Worship is the longest-

serving mayor in Canada. Over more than three decades, she has built Mississauga into one of the country’s largest cities, all the while surviving toxic spills, police standoffs, and scandals. Her message of how business must develop and be part of communities of their own will resonate with every single person who attends this important session.

The HARDLINES Conference, Oct. 27 & 28, 2011, is an important way to affi rm your professional connections and features discounted pricing for independent deal-ers. Visit www.hardlinesconference.ca to register, or call 416-489-3396.

H A R D L I N E S C O N F E R E N C E 2 0 1 1INDUSTRY SUMMARY

This year’s conference will focus on the new retail reality. Trends such as fl at housing, online shopping, social media, and U.S. competition are challenging the way dealers do business in Canada.


CON

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HHIQ_3Q_11_Conference.indd 35 11-07-21 4:45 PM


RONA inc.Boucherville, QC1

2010 RetAil SAleS: $6.2 billiON

2010 POiNtS Of SAle: 911 (bANNeRed)

The stalled recovery, as well as poor weather last spring, put a damper on RONA’s overall performance last year. While it is hardly alone among big box operators in this regard, it is unique among publicly traded North American home improvement retailers in having

a number of different store formats and ownership models.

RONA made a lot of moves last year as it pursues what it has dubbed its “New World” strategy. On the independent side of the equation (its “affiliate” stores), RONA is attempting to further consoli-date the industry by offering a low-frills, wholesaler-based distribution alternative for family-owned hardware and build-ing supply stores. Its acquisition in the fourth quarter of 2010 of Winnipeg-based TruServ Canada is an important part of this initiative.

RONA is currently converting TruServ’s True Value banner to “TRU.” It has built a sepa-rate sales force to promote the TRU Hardware and TRU Building Centre banners. The new program is designed to marry the strength of RONA’s many programs and private brands with the freedom of traditional buying groups.

RONA is stressing efficiency and cost cutting where possible. Among its many initiatives, the company recently announced plans to expand and possibly relocate its Calgary DC, an important part of RONA’s Western expansion since that facility was opened in 2004.

the country’s leading retailers in hardware and home improvement have weathered the recession in different ways and with varying success. Now, these top companies are repositioning to maintain growth as the economy slowly lurches back onto its feet.

Canada’s

HOme imPROvemeNt RetAileRStOP10HHIQ_3Q_11_Top10Retail.indd 36 11-07-21 4:58 PM


Helping independent dealers with the perennial challenge of succession plan-ning is another arrow in RONA’s quiver. The company has rolled out a 10-year, $100-million development fund to assist families of independent dealers to move ownership from one generation to another. RONA’s assistance in this regard played an important role in the company’s signing of London, ON-based building supply dealer Moffatt & Powell last year.

THE HOME DEPOT CANADAToronto, ON2

2010 RETAil SAlES: $5.2 billiON*

2010 POiNTS Of SAlE: 178

The biggest news to come out of Home Depot’s Canadian head office in Toronto this year is the changes at the top. Annette Verschuren, who ran Canada for 15 years (as well as, in recent years, Home Depot Asia) left the organization on Jan. 30.

Verschuren’s track record was stellar. When she arrived in 1996, Home Depot had 19 stores in Canada and sales had yet to crack $1 billion. By the time she left, the retailer was long established as one of the top players in this industry, with 179 units and sales that eventually topped $6 billion. Not a bad track record for an executive who had no previous experience in our industry.

Her replacement, Aaron Carmack, who had been running Depot’s Pacific North division, lasted barely a month in the Canadian role before he left for personal rea-sons. He was quickly replaced by Bill Lennie, formerly senior vice-president of merchan-dising, international and sourcing. Lennie had also recently been given Verschuren’s former role as head of the Asia portfolio, which Verschuren exited in May 2010.

Lennie has large shoes to fill: Verschuren averaged 10.4 new Canadian stores a year during her whirlwind decade-and-a-half.

Home Depot is now on a flattening growth curve in this country. It opened only three new units in Canada in 2009 — and none at all last year. The main task is to drive growth through refits and repositioning — including a shakeup last spring by Lennie of his executive management team. “In 2011, our focus remains unchanged,” he said in a letter to vendors last spring. “We will con-tinue putting customers first, focusing on in-stock performance, and enhancing store standards and appearance.”

Home Depot Canada has already com-pleted its only new store opening planned for 2011 — in Chilliwack, BC on April 7. The 80,000-square-foot store is Home Depot’s 26th location in that province.

HOME HARDWARE STORES liMiTEDSt. Jacobs, ON3

2010 RETAil SAlES: $4.9 billiON

2010 POiNTS Of SAlE: 1,084

Despite a buoyant first half of 2010, in which Home Hardware’s same store-sales increased 6.4 percent and total sales were up double digits (owing partly to almost 60 new signings in the preceding 18 months), sales increases (and recruitment) slowed down somewhat for Canada’s leading dealer-owned co-op in the third and fourth quarters. Nevertheless, with Canadian con-sumers switching to repairs, rather than big projects, Home Hardware is well positioned for the new economic reality.

Home Hardware’s recruitment of new dealers over the past three years is at an his-toric high. The consolidation among groups and wholesalers has left many dealers evalu-ating their alliances. Home’s extensive dis-tribution system and proven brand have helped it to take advantage of this.

Still, Home Hardware’s president and CEO, Paul Straus, has always maintained that it is growth of the member dealers, and

not the growth of the co-op itself, that is the main priority. To that end, the group is continuing to promote its new store design and signage program that was developed by Watt International and introduced in 2008. More than half of Home Hardware’s dealers have now adopted the new, female-friendly image program.

Some of the group’s greatest growth has come from its home centre banner, Home Hardware Building Centres. This format gives dealers the opportunity to expand into Home’s fast-growing kitchen and gar-den categories, which are promoted heavily on TV with help from Home’s partnerships with celebrity chef Anna Olsen and garden expert Mark Cullen.

A manufacturer of its own paint since 1979, Home Hardware embarked last sum-mer on a 55,000-square-foot expansion of its paint factory in Burford, ON to sup-port the production of higher-end lines of Beauti-Tone paint. Home’s range of services to its dealers also continues to grow. Recent developments include the introduction of in-store TV technology and the imminent launch of a new dealer platform for the co-op’s intranet site.

CANADiAN TiRE RETAilToronto, ON4

2010 RETAil SAlES: $4.8 MilliON

2010 POiNTS Of SAlE: 488

Fifteen years ago, then-Canadian Tire president Stephen Bachand said it best: “If someone came up with the concept for Canadian Tire today,” he told the trade press, “they would be booted out of the room.” Indeed, Canadian Tire’s unique retail mix of hardware, housewares, sport-ing goods, and automotive is unduplicated anywhere in North America. And its three divisions: retail, petroleum, and financial, are atypical as well. But it all works.

t O P 1 0 r e t a i L e r SfEATURE

TOP10HHIQ_3Q_11_Top10Retail.indd 37 11-07-21 4:58 PM


FEATUREt O P 10 r e ta iL e r S

Recently, that sporting goods side of the equation got even stronger. In May, Canadian Tire announced that it was acquiring Forzani Group, which owns 500 Sport Chek stores and generates $1.4 bil-lion in sales.

Sales for the retail side of Canadian Tire increased 1.4 percent overall in 2010. (Editor’s note: Our sales figure above is an estimate of the hardware and home improvement portion of that business.) Our industry’s segment of Canadian Tire’s offerings was highlighted by strong performance in tools, outdoor recreation, and kitchen. Canadian Tire also saw growth in categories such as household consumables and pet foods, which are considered key to driving traffic in stores and increasing trip frequency.

Canadian Tire has said that growth will be driven, for the foreseeable future, by refitting or rebuilding its existing units, with new stores (except in the case of acqui-sitions like that of Forzani) being kept to a minimum. The main driver will be the con-tinued rollout of the “Smart Store” concept, the replacement for the old 20/20 store con-cept that was in place until 2008. Features

of the Smart Store include a “racetrack” layout, high ceilings, navigational signage and, in some instances, an expanded variety of snacks and grocery staples.

Canadian Tire has also piloted a small-store strategy for small communi-ties across the country. The Smart and “Smaller Market” store concepts reinforce Canadian Tire’s “core brand” strengths. Some 43 store development projects were undertaken in 2010.

FEDERATED CO-OPERATIVES LTD.Saskatoon, SK5

2010 DEALER SALES: $473 mILLIOn*

2010 POInTS OF SALE: 232

FCL bounced back last year from a reces-sion-plagued 2009 to post impressive top-line sales of $7.1 billion, a year-over-year increase of 8.7 percent. While most of that revenue comes from crop supplies, feed, and petroleum, FCL remains an impor-tant retailer in our industry, with more than 200 home centres and general mer-

chandise stores that sell hardware and home improvement products under the famous Co-op banner. In addition, under its Valumaster banner, FCL supplies inde-pendent dealers on a fill-in basis.

FCL continued to modernize its hard-ware retailing capabilities in 2010. It dedi-cated an extra 75,000 square feet of space to general merchandise products in its Calgary warehouse, having moved its freezer and cross-dock operations over to its separate food warehouse. The company is now add-ing yet another addition almost as large as the last one. FCL is upgrading the co-op’s retail front-ends; some 28 home and agro stores got major refurbishments last year — everything from exterior refits to complete rebuilds.

FCL is also an important player in the lumber and building materials industry, operating sawmills that last year added $44.5 million in revenues to FCL’s books. This forest products business was up 16.4 percent over 2009, a year when plywood and lumber price dips forced FCL to shut down some of its mills.

The co-op is now into its third year as a member of ILDC, affording it additional purchasing power in hardware and home improvement products. FCL is also a mem-ber of the Spancan hardware buying group and a member of the MEGA buying group for furniture and electronics.

ALPA LUmBER GROUPMississauga, ON6

2010 ESTImATED RETAIL SALES: $460 mILLIOn*


The biggest independently-owned building materials chain in Canada, Alpa Lumber is also the most thoroughly vertically-integrated. This company does it all: from operating a number of important lumber mills and developing its own land to install-

Top 10 Retailers ($millions)Rank Company 2009 2010 Change

1 ROnA inc.** $5,700 $6,200 8.8%

2 Home Depot Canada* $5,565 $5,192 -6.7%

3 Home Hardware Stores $4,763 $4,863 2.1%

4 Canadian Tire Corp.*** $4,690 $4,783 2.0%

5 Federated Co-op $460 $473 2.8%

6 Alpa Lumber* $500 $460 -8.0%

7 Kent Building materials* $435 $452 3.9%

8 Lowe's Canada* $259 $371 43.2%

9 UFA Co-operative Ltd. $340 $320 -5.9%

10 Canac* $284 $298 4.9%

TOTAL $22,996 $23,412 1.8%

* Estimated sales ** Includes TruServ Canada acquisition *** Related hardware/home improvement sales only

HHIQ_3Q_11_Top10Retail.indd 38 11-07-21 6:23 PM


ing stairs and windows that it makes in its own plants, Alpa dominates just a single market — the Greater Toronto Area, the fifth-largest urban and suburban conglom-eration in North America.

All of this was probably unforeseen when John DiPoce, Alpa’s president and principal partner, arrived in Toronto, from Italy, in the 1950s. But in spite of his huge successes, Alpa is a publicity-shy company. Only very rarely does the public — or the industry — hear much about the company’s activities. Usually, Alpa only makes the news when DiPoce makes a charitable donation, as he has done increasingly in recent years: having hospital wings named after him, for exam-ple, or donating land for a new campus of Georgian College, or building retirement homes to serve the sizeable Italian com-munity north of Toronto.

Alpa has three locations outside of the GTA, in Cambridge, Hearst, and Greely, while its acquisition of Rockett Lumber late last year gives it sites in Mississauga,

Niagara, and Courtice, ON. It goes to mar-ket under a variety of trade names, includ-ing Argo, Central Fairbank, Tamarack and Woodbridge Lumber; Casa Bella and Newmar Windows; Alpa Lumber Mills, Alpa Roof Trusses, Alpa Stairs and Alpa Floor Systems.

KENT BUILDING SUPPLIESSaint John, N.B.7

2010 DEaLEr SaLES: $452 mILLIoN*

2010 PoINTS of SaLE: 33

The dominant home improvement retailer in Atlantic Canada, Kent continues to ben-efit from the foresight it showed more than 15 years ago when it erected seven big boxes to head off the anticipated incursion of Home Depot. Those big boxes, along with traditional stores, a drywall facility, and a truss operation, give Kent a strong position in Atlantic region. It doesn’t hurt, of course, that Kent is owned by the Irving Group of Companies: one of the largest conglomer-ates in the world.

Kent’s latest acquisition was in 2010, when it bought Nauss, an independent building centre in Bridgewater, NS. It is well-positioned to battle any further incur-sions from outside its territory. It needs to be smart, because Atlantic Canada is one of the few regions in North America to feature three big box banners. (Along with Home Depot, RONA brought its large-surface for-mat to the Maritimes in 2008.)

Newfoundland played an important part in Kent’s growth last year. The province enjoyed record-breaking employment levels

in 2010 and the fastest economic growth of any province. Undoubtedly encouraged by the prosperity on the Rock, Kent opened its 34th store in Gander on Jan. 15, 2011. The store is a mini big-box 65,000 square feet in size. It carries more than 22,000 SKUs and offers a cut shop, kitchen design, custom colour matching, a project centre, and installed sales. With Newfoundland enjoying such a high tide, Kent has made a commitment to continued expansion there.

Lowe’s Companies Canada, ULCToronto, ON8

2010 rETaIL SaLES: $371 mILLIoN*

2010 PoINTS of SaLE: 24

The world’s second-largest home improve-ment retailer (after Home Depot) com-pleted the third year of its Canadian roll out at the end of fiscal 2010, with 24 units operating. And with annual sales approaching $400 million, Lowe’s Canada enters the Top 10 for the first time. That pace, under current economic conditions, is remarkable. Of course, the Mooresville, NC-based giant has deep pockets.

With 1,749 North American stores at the end of the year, the company posted US$48.8 billion in revenues, a 3.4-percent increase over recession-blighted 2009. Like most North American home improvement retailers, 2010 started off full of promise of a major recovery, before slowing down again later in the year. Still, the company enjoyed a same-stores increase (North American-wide) of 1.3 percent in 2010, the first such increase since 2005. And Lowe’s

(millions)

Remainder of Industry

$15,782

Top 10 Retailers$23,412

60%

40%

market share of the Top 10 retailers in 2010

Top 10 as a percentage of the overall industry ($millions)2009 2010 Change

Top 10 retailers – combined sales $23,996 $23,412 1.8%

Total Industry $39,116 $39,194 0.2%

Percentage of total industry 58.8% 59.7%



FEATUREt O P 10 r e ta iL e r S

year-over-year pre-tax earnings increased by 14.2 percent to more than US$3.2 billion.

Canada remains an important part of Lowe’s overall strategy. In its annual report, Lowe’s said: “Although at a slower pace, we continue to see growth opportunities in under-penetrated urban markets in the U.S. and in Western Canada.” Indeed, 2010 marked Lowe’s debut in the West, with two stores opening in Calgary during the year, and a third Calgary opening in April of this year. In June, an Edmonton store was added to the mix.

Still, 22 of Lowe’s 26 current units are in Ontario, where it has built decent criti-cal mass, mainly along the corridor from Windsor to Kingston, with further beach-heads established in Ottawa and Sudbury. Back in the west, Regina is set to open soon, with land now acquired in the Vancouver area, too.

UFA CO-OPERATIVE LTD.Calgary, AB9

2010 RETAIL SALES: $320 mILLIOn


Following an expansion strategy that had UFA acquiring sporting goods retailers in 2009, UFA replaced its then-president Dallas Thorsteinson to re-focus on its farm and agro market. “[2010] was a tough year for UFA,” says his replacement, president and CEO Bob Nelson, in the company’s annual report. “It was a year of almost continuous and unique challenges as we faced up to the reality of our situation ... Rebuilding means reaffirming that UFA is an agricultural co-operative with deep roots.”

The repositioning that is taking place in its 35 farm and ranch supply stores and, to a lesser degree, its single building centre in Fort McMurray marks a renewed focus on the co-op’s core strengths of serving the

rural and farm communities of Alberta. The process includes simplifying the prod-uct offerings while tailoring assortments to different farming regions in the province. At the same time, UFA is working on mak-ing its stores more consistent in the layout and presentation of those products.

Hardware assortments remain very important to UFA, as its stores are consid-ered destinations for tools, paint, plumb-ing, and electrical. But the stores are stay-ing away from low-end products, ensuring that its farm customers get the quality and durability they need. “We’re really getting back to basics with our customers,” said Ron Schinnour, vice-president, agricul-tural operations, who oversees the farm and hardware side of the business.

Overall, UFA’s revenues from all sources (which include, fuel and fertilizer) still managed to rise 8.7 percent in 2010, to $1.74-billion, as the partial recovery took hold in the West. The Wholesale Sports division is now being managed by Glenn Bingley, a former Home Depot executive who joined UFA in February of this year.

CAnACQuebec City, QC10

2010 DEALER SALES: $298 mILLIOn*


A powerhouse in the Quebec City region, family-owned Canac (formerly Canac Marquis-Grenier) has continued to grow through acquisition and the building of new stores throughout the recession. One of the largest independently-owned

regional chains in the country, Canac con-tinues to prove that market consolidation is something that independents, as well as large, publicly-traded retail groups, can efficiently pursue.

Canac got a flying start in 2010 with the opening of its 18th store, in Saint-Nicolas,

a suburb of Lévis, the community opposite Quebec City on the south shore of the St. Lawrence River. Then, shortly thereafter, Canac added its 19th and 20th locations. These units are in Cowansville, QC (just over an hour’s drive east of Montreal, the closest to this city Canac has yet ventured), and in the Rock Forest part of Sherbrooke. These stores were acquired from Group Gaston Côté, its former fellow member of ILDC (the buying group which Canac left in 2008).

As if this weren’t enough, Canac also completed major renovations, in the spring of 2010, to its store on Boulevard Louis XIV in Charlesbourg, a northern suburb of Quebec City. In total, Canac operates three stores in Charlesbourg. To conclude the year, in September 2010 the company moved the location of its Victoriaville, QC store to allow for the stocking of more building products.

While two-thirds of Canac’s locations are clustered in and around Quebec City, it also operates stores in St-Georges, Chicoutimi, and Trois-Rivières. A true independent, Canac’s only buying group affiliation since leaving ILDC has been with the purchasing group OCTO.

Canac has been owned by Le Groupe Laberge, a family-owned business, since 1985. 13 of its 21 current locations (a new store opened in Jonquière in the spring of this year) have been added since 2000.

With annual sales approaching $400 million, Lowe’s Canada enters

the top 10 for the first time.“ ”


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RONA_3Q_041.indd 41 11-07-21 5:17 PM


n last quarter’s article we reviewed the five key controllable financial measure-ments, and how they can effectively

help to improve your bottom line. For this quar-ter, we will explore in greater depth how small changes in gross margin after rebates and better control of operating expenses can affect profitability.

In Canada, the average retail lumber dealer has sales of $5 million with an aver-age gross margin after rebate of 24.8 percent. High-profit retailers can show margins of up to 30.3 percent. This includes purchase rebates of 0.6 percent to 0.8 percent. You may be wondering how other retailers achieve such margins. Let’s have a look at what fac-tors can affect gross after rebates margins.

HOW TO IMPROVE GROSS MARGIN AFTER REBATEHere’s a checklist of points that you may take for granted, but should be revisited and tightened up on a regular basis:• Product mix — are you stocking the

basics or are you selling mainly price sensitive items?

• Heavy promotional activity — what percentage of total retail sales are you selling at promotional pricing? If it is 25 percent or higher, this could affect your gross margin negatively.

• Discounting — are unauthorized dis-counts being given? What percentage of sales is going to contractors? Are your discounts higher than they need to be?

• Inventoryshrink — the largest issue here is employee theft, followed by shoplift-ing, vendor fraud, administrative errors,

shipping or receiving of inventory, and making certain that accurate counts are being used. Shrinkage can be costing you from 1 to 3 percent of margin.

• Costingerrors — are you adding freight and duties paid into your cost of goods?

• Mark-upvs.grossmargin — to achieve a gross margin of 40 percent you require a mark-up multiplier of 1.67.

• Inventory — when doing inventory, are you following written procedures that document how to handle inventory count and cut-off? Errors can affect accurate inventory numbers and, in turn, gross margin.

PRODUCT MIX & REBATESYour product mix can affect your gross margin after rebate, as well. Compare your percentage of back-end sales vs. front-end sales. This can make a major difference in gross margin. Many LBM dealers have a ratio of 85 percent back end and 15 percent

front end. The latter, of course, can deliver much higher margins.

And finally, increased rebates can improve gross margin. By supporting your buying group, key vendors can help increase rebates quarterly. Make certain business is not being given to non-supporting vendors.

Any of these above-listed factors can be affecting your margins both positively and negatively. But gross margin improvement ideas that can be implemented with input from your store staff to help increase sales and margins.

VARIABLE PRICINGStart with variable pricing. There are only 200 to 300 items in your business that are really price sensitive. That leaves you with thousands of SKUs on which you have an opportunity to raise your retail prices. For example, I recently checked eight different items at four different retail outlets. Many of the items were priced differently in each.

INVENTORy & FINANCIAL ManageMent

I

By BILL WILSON RETAIL ADVISOR, NRHA CANADA

HHIQ_3Q_11_StoreManage.indd 42 11-07-21 4:56 PM

The Wild West at its Best

January 19-20, 2012Saskatoon, SK

www.wrla.org/prairieshowcase

WRLA Inc.Email: [email protected] 800-661-0253 ext 3.

2012

Buying Show & Convention

WRLA PS 2012 - 1 -HiQ.ai 1 7/5/2011 7:42:42 AM

Try this test with your staff: pick five or 10 items and ask them what they think these items cost. Usually, you will find that your employees do not know the retail price, reinforcing the case that there are oppor-tunities to increase margins. In many cases,

an additional three to five percent can be added on product under $10 without any price concerns from the customer.

STAFF TRAININGThe number-one most important factor for consumers in evaluating good customer service is “that the store has knowledge-able employees.” Using NRHA Employee Training Programs improves product

knowledge, add-on selling skills, and step-up selling. These all combine to increase the size of your average sale.

Not only that, but many other benefits can be achieved using training programs to help improve gross margin. NRHA’s “Three

Pennies of Profit” video training program explains the five key controllable finan-cial measurements, with tips on improv-ing margin in terms that any staffer can understand and put into practice.

FRONT-END SALES IMPROVEMENTAs customers look for more and more one-stop shopping solutions, improving your product mix to a minimum of 8,000-9,000

SKUs is a good way to meet your customers’ basic needs. Look at opportunities for new categories and new products. Many retail-ers will add 800 to 1,000 new items a year.

Trips to trade shows like the National Hardware Show in Las Vegas, and the LBM buying shows hosted by your region’s build-ing materials association, provide oppor-tunities for finding new products that may not be listed in your own wholesaler’s ware-house. Get your staff to write down items that customers are asking for that you don’t stock. This is a great way to get ideas for increasing front-end sales.

Bill Wilson is Retail Advisor for the North American Retail Hardware Association Canada. He has a background of more

than 40 years of experience in hardware and home improvement retailing and distribution and is committed to training for independents.

S t o r e M a n a g e Me n tF LE

“ ”the number-one most important factor for

consumers in evaluating good customer service is “that the store has knowledgeable employees.”

HHIQ_3Q_11_StoreManage.indd 43 11-07-21 4:56 PM


onsider the storefront and pylon from your customers’ point of

view — while they are driving past in a minivan, late for a soc-cer game, low on gas, with three rowdy kids. Will they know what you sell? Will they remember you are there? Will they even see you?

Store exteriors are often the most under-leveraged brand building asset a retailer has. Hindered by by-laws, landlord criteria, and a harsh natural environment, this first impres-sion of your brand is often over-looked and left to the lowest common denominator — the lowly back-lit sign box.

Leverage your assetBut there are opportunities for leveraging this asset. They include graphics and com-

munications, windows, archi-tecture, merchandising, and technology.

Did you ever wonder why yellows, reds, and oranges

dominate exterior signage? It is because they are all high wave-length colours that attract the eye and are more likely to attract attention, even at 100 km

per hour, than more mundane blues, purples and greens. The result is an instantaneous brand impression and the chance to grab a little bit of mindshare —

Leverage your storefront for business and brand

C

by bruCe smith

What are you saying about your brand to passersby?

While your your customers are driving past, will they know what you sell? Will they remember you are there? Will they even see you?

HHIQ_3Q_11_Merchandising.indd 44 11-07-21 4:46 PM


DESIGN & MERCHANDISINGF LE

with the hope of turning it into market share.

Of course, when there is a sea of yellow and red signs, the effect may be lost, so retailers are experimenting with new ways of expressing weaker colours. (Consider what BMO bank is doing with its strong colour massing of bright blue.) And there are more tools, such as shape. Best Buy is a great example: their iconic price tag logo is turned into an over-scaled architectural element.

With only a split second to communicate to the speed-

ing car, logos go a long way in communicating an instanta-neous message through their association with the brand. If I see a Nike logo, I know right away what is sold and the value proposition.

Also important are the words that appear on a building exte-rior. When Benjamin Moore created its banner program, many were named “Decorating Centre” or “Colour Experts,” to move the value proposi-tion beyond a product that many consumers see as just a commodity. Recently, Loblaw added “Great Food” to its sig-nage, predisposing the cus-tomer to its offering.

LET THE SUN SHINE INYour store’s windows allow natural light to fl ood the space, thereby saving costs and making the retail space physiologically more comfort-able. Windows make us feel welcome and safe. Would you even consider entering a store that had an opaque façade and doorway?

Windows provide retail-ers with the opportunity to display products and engage customers. They are a means to communicate specializa-tion and seasonal change. For example, a retailer might dis-play barbecues in the spring and snow blowers in the win-ter with no incremental pro-motional costs.

Technologies, such as cable signage systems and scrim, provide a medium for com-

municating brand and mar-keting messages. Retailers can “speak” to potential custom-ers with targeted messages that reach into the public space and are always within a few feet of the retailer’s products and problem-solving staff.

EXECUTION IS KEYMany of these great tools are lost in execution. Tattered and sagging vinyl banners, letter boxes with misspelt words, hand-printed signs taped to the front door, and dirty win-

dows do little to prepare cus-tomers for a great brand and shopping experience.

On the other hand, great design coupled with attentive execution can deliver a prom-inent brand touch point that will work 24 hours per day, seven days a week.

Bruce Smith of DMD Retail Design assists retailers by bringing design and

business realities together to create great branded experiences.

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OUTDOOR MERCHANDISINGTaking the store to the street

by stocking merchandise

on the sidewalk can both

increase the retail footprint

and communicate the brand.

What better way for a hard-

ware store to tell the public

that it sells ladders than to

inventory a limited supply

outside the store? For the

customer, merchandise out-

side the storefront can add

the entertaining and impul-

sive element many modern

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HHIQ_3Q_11_Merchandising.indd 45 11-07-21 4:46 PM


ennis Doidge thinks it’s an “excit-ing time” for independent dealers who are part of tiM-Br MartS’ network.

“the buying group has shown a willingness to expand, and [with Chalifour Canada] we can source better and cheaper because it’s all wrapped up into one package.”

Doidge, the president and CEO of Doidge TIM-BR MART Group, knows something about expanding. Since he started his com-pany with a single yard in Miller Lake, ON, 17 years ago, Doidge has steadily added more yards, including several from retir-ing TIM-BR MARTS members. In fact, his three partners — Harvey DeLeeuw, Dave Hines, and Ted Minty — were once owners of three of the eight stores in Ontario now under Doidge’s corporate umbrella.

Those locations range from the 12-acre yard in Kincardine with a 16,000-square-foot retail store plus nine out buildings, to the company’s four-acre yard in Fort Erie, ON. All told, Doidge TIM-BR MART gener-ates between $40 million and $50 million in

annual revenue, about 60% of which comes from contractor customers.

The key to many buying groups’ suc-cess, say their executives, is having dealers like Doidge who are ready and willing to acquire and sustain yards that otherwise might stop operating after their owners

move on. But despite years of solid growth, Doidge admits that his company had reached a point of critical mass when it bought and renovated two locations in 2009, at a time when the economy was on shaky ground.

Now he’s in the midst of organizing all of his stores so “they are on the same path.” That journey began last November, when Doidge hired Jake den Hollander as his company’s general manager of operations and marketing. His first assignment was to investigate what kinds of systems his new employer needed. Recently, Doidge TIM-BR MART purchased its first cen-tralized point-of-sale system, which will go live on Jan. 1, 2012. Getting that system up and running is going to be arduous, Doidge concedes. “Anybody looking at a central system knows that the cost isn’t just the hardware and software. You’re changing all of the stores’ SKUs, and there’s training after that.”

Doidge notes that growth-oriented com-panies like his need to have their books in order to obtaining financing. “This has been a balance sheet recession and the banks are nervous,” he says. “Cash flow can kill you as much as anything else.”

Because of the economy, Doidge says his company “has needed to take a step back to be ready for future expansion.” When asked if he saw acquisition opportunities out there, he replied “frankly, yes. But right now, I need to take a breather.”

This respite will give Doidge and his stores more time to focus on customer ser-vices and sales. Recently, his stores intro-duced a house plans program, and Doidge says he has hired a student who has been expanding and centralizing the stores’ esti-mating and design capabilities.

PHO

TO: JO

sH H

Ow

ald

d

e x p a n S i o n F LE

This has been a balance sheet recession and the banks are nervous. “ ”

taking the next Step

Dennis Doidge, the president and CEO of Doidge TIM-BR MART Group, spent years expanding its locations. Now he’s injecting greater operational control.

By JOhN CAuLFIELD

HHIQ_3Q_11_Expansion.indd 46 11-07-21 4:54 PM

Got Product Knowledge?

To join NRHA Canada call 416-489-3396 or visit www.nrha.org

NRHA’s Basic Training Course in Hardware Retailing Can Help! This course is a comprehensive training tool designed to help both new and existing retail sales associates gain the confidence they need to be successful on the salesfloor. NRHA Members have unlimited access to this course at no additional cost.

The Online Course Includes:• 9 Core Hardware Department Modules• Product Photos & Descriptions• Frequently Asked Questions

• Upselling & Add-On Selling Techniques• Selling Skills• Merchandising Techniques

How to Access the ProgramNRHA’s Basic Training Course in Hardware Retailing is now available to all NRHA members in the members-only portion of www.nrha.org. It is also available to members of wholesalers that have established group membership agreements with NRHA, including all True Value, Ace and Home Hardware retailers.

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hen Susan Robinson says she’ll meet you fi rst thing in the morning, she means it. Eight o’clock isn’t early

enough; make it 7 a.m., if you don’t mind. She’s already got another meeting at eight.

The alacrity with which Robinson starts her day carries through to her management of IRLY Distributors Ltd. She took over as president and CEO of the West Coast buying group and wholesale distributor three years ago. But she brings a wealth of experience, with roots in the mining industry (“I was the fi rst woman to be hired by International Nickel, when Inco became an equal-oppor-tunity employer in 1975”), and most recently came out of grocery and produce distribution in British Columbia. There, she really learned about moving product. Tomatoes don’t have the same kind of shelf life as a hammer.

“At IRLY, I bring a diverse background.” She was hired during a time of transition

for the Surrey, BC-based group. Her prede-cessor had been let go following an unsuc-cessful recruitment bid by RONA. Even resisting that challenge, IRLY members had been steadily plucked away by other groups. When she joined, the group was down to 36 members, from a high of more than 50 just half a decade earlier. But she saw potential in the company and was confi dent she had something to offer.

“What I really saw was the diamond at IRLY. But we weren’t realizing our own potential.”

Those fi rst days on the job had their challenges. Less than two months in, RONA managed to lure away her big-gest dealer. Robinson was on a plane the

next day to see him. She got, in the nicest way possible, an earful, but the conversa-tion planted the seeds for a new strategic plan “to ensure our future. We hired addi-tional sales people and put them on the road to ask the dealers for their business. We got really assertive about what we have to offer.”

Do we ask what it’s like to be a woman in an industry so dominated by men? She meets that one head on. “Yes, you’ve got to ask that question,” she insists. “What I see in the industry are many powerful women — and I see opportunities for them on the retail side. Now, we’re starting to see more of them at the vendor level, as well.”

“Over the next 10 years we will see more women willing to take on leader-ship roles. But they’ve got to get training to do it, because experience is not enough.” This industry, she says, too often relies on years on the job, rather than experience. Too many people have just put in time, she believes, rather than making every year another one of learning and growing. “Leaders are trained — they are not neces-sarily born.”

What are the advantages and disadvan-tages of being a woman in home improve-ment retailing? “The advantage is that it’s easier to get noticed.” And the disadvan-tage? “It’s easier to get noticed,” she replies without hesitation — or a trace of irony.

Has her vision for IRLY paid off? She cites the deal to merge IRLY’s distribution operations into Chalifour Canada, which is owned by fellow buying group TIM-BR MARTS Ltd. “I saw that we had the oppor-tunity to be part of something much larger with the TIM-BR MART partnership.”

She is already preparing to leave for her next meeting — a tour of the IRLY DC with a potential new member. But before she goes, she pauses. “I think we’re the only banner in the country in the past two years that has not lost a dealer to another group.”

We think she’s right.

What I really saw was the diamond

at IRLY. But we weren’t realizing

our own potential.

“”

EXECUTIVE BREAK WITH IRLY’S SUSAN ROBINSONBY MICHAEL MCLARNEY

W

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HHIQ_3Q_11_EndCap.indd 48 11-07-21 4:57 PM

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advertisers: third Quarter / 2011

in the next issue of hhiQ:

a d i n d e X

BMr www.bmr.co iFC

Canadian home improvement showwww.canadianhomeimprovementshow.com 20-21

Castle Building Centres Group Limited www.castle.ca OBC

hardlines Conferencewww.hardlinesconference.ca 23

hardlines inc.www.hardlines.ca 3

home hardware stores Limitedwww.homehardware.ca 25

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orgill www.orgill.com iBC

Philipswww.philips.com 4

rdtMwww.rdts.ca/en/rdtm.php 45

rdtswww.rdts.ca 33

rona inc.www.rona.ca 41

rustoleumwww.rustoleum.ca 16

steel-Craftwww.steel-craft.ca 6

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Western retail Lumber associationwww.wrla.org 43

How dealers are coping — a look at the innovative ways dealers are meeting the new retail reality.

PLus: At the helm of North American Lumber, how wholesalers are adapting, dealers train for increased profits, trends that will affect your business in 2012, and much more!

Publication Date: Oct. 6, 2011 • Ad Reservations: Sept. 1, 2011 (contact [email protected]) • Ad Material Due: Sept. 13, 2011

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ORGILL CUSTOMER INSIGHTS

Now, Orgill Gives All Dealers A Choice.

There’s No Catch

Worldwide Distribution & Retail Services

You Don’t Pick up the TabAs a privately owned company, we constantly make investments in our product lines, distribution enhancements and our infrastructure to better serve our customers, because we know that our customers ultimately make the decision about who they choose to do business with. Unlike other distributors, however, when we want to improve our services and efficiencies, we don’t ask our customers to pay the price for it.

A Unique System for Unique RetailersWith thousands of SKUs in stock, Orgill can deliver unique assortments to customers of all shapes and

sizes throughout Canada. With more than 160 years of distribution experience, you know you can count on Orgill to deliver when you need it.

A Simple MissionAs Orgill has emerged as the world’s largest independent hardlines distributor, our mission hasn’t changed. Like our way of doing business, our mission is simple and to the point… “help our customers be successful.” Everything we do at Orgill focuses on fulfilling that mission and ensuring our customers’ success.

1-800-347-2860 EXT. 6780 • WWW.ORGILL.COMOrgill, Inc. P.O. Box 140, Memphis TN 38101-0140

To find out how Orgill can help you be more successful, call Phillip Walker

THERE ARE NO ADVERTISING FEES, NO PROGRAM MANDATES, NO CO-OP CHARGES OR MEMBERSHIP DUES—EVER.

Now, Retailers Throughout Canada Have A Choice!

ORGILLORGILL CUSTOMER INSIGHTS

Retailers who do business with Orgill have access to thousands of products, industry-leading retail programs and a world-class team of distribution professionals. But the best part is, there is no catch. Retailers only pay for the products, programs and services that they feel are right for their business.

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Contact your Business Development ManagerWest Alan Schoemperlen (204) 771-1509 [email protected]

BC Les Gillespie (250) 469-4744 [email protected]

Ontario Bruce Holman (647) 228-1414 [email protected] Quebec Robert Legault (514) 208-4158 [email protected] Atlantic Sandy Welsh (902) 471-7113 [email protected]

Your trusted building supply partner

castle.ca/freedom

& hardware®

Name: Jamie AdamsOccupation: Entrepreneur. Independent Castle dealer. Business owner.Revolutionary behaviour: Free thinker. Fearless. Driven to succeed. M.O.: A determined businessman who runs his business his way. Doesn’t like to be controlled by head office decisions that negatively impact his bottom line. Demands the FREEDOM to buy from vendors of his choice. Sets his own pricing and promotions. Committed to serving the needs of his customer. Local competition considers him armed and dangerous (customers think otherwise).

Fears: Assuming liability and cost of corporate decisions.

On being a Revolutionary: “I get to keep all the profits I’ve earned. I’m livin’ the revolution.”

Warning: Independence is not for everyone. Do you have what it takes?

Retail. Commercial. Specialty.

For more detailed information, go to www.Castle.ca/Revolution.

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