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Home Improvement (Lowe's, Rona, Home Depot)



Not huge news, but gotta keep this thread runnin', eh?

Here's an article about Lowe's coming into Canada. They're a big box home improvement chain à la Home Depot or Rona. There are talks of them buying Rona up.
Home reno giant Lowe's readies move into Canadian
Thursday, June 2, 2005 Updated at 3:55 AM EDT
From Thursday's Globe and Mail

Retailing and real estate insiders are bracing for the arrival of Lowe's Cos. Inc., a U.S. home improvement powerhouse whose entry into Canada could further shake up an already competitive retail landscape.

Two consultants have been quietly talking to Canadian landlords over the past few weeks, discussing possible deals for superstore sites, and industry sources believe Lowe's, the second-largest U.S. home improvement merchant, is the prospective tenant.

Lowe's could make an announcement about its plans for Canada as early as next week, real estate sources said. A number have been told to expect an announcement on June 6. Lowe's said it does not comment on rumours, but confirmed it has a global growth strategy.

"We have said for a number of years that we are evaluating international opportunities. At some point we will be a global company," said Chris Ahearn, a spokeswoman for Lowe's in Mooresville, N.C.

The chain has been a rival to Home Depot Inc., the world's biggest home improvement retailer, which already operates in Canada.

Lowe's has ridden the wave of women's growing interest in tackling home improvement projects. With annual sales of about $36.5-billion (U.S.) and more than 1,100 stores in the United States, Lowe's courts women by pushing home decor and other related items.

It has designed its mega-outlets in a more inviting manner, with wide aisles and bright lights to ease the stresses of shopping.

In Canada, Rona Inc. of Boucherville, Que., has become a powerful contender to the No. 1 Home Depot also by catering to women's tastes. As well, Rona has grown rapidly in recent years by swallowing rivals.

Now, industry insiders suggest that Lowe's may eventually try to snap up Rona, if it hasn't already attempted such a move.

When Robert Nibock took over as chief executive officer in January, he told analysts that he was interested in international growth.

"Certainly there's a lot of opportunity on the international side, and it's something that we will, over the next year or two, be in the process of assessing," Mr. Nibock said.

Retail consultant John Williams of J.C. Williams Group Ltd., said it may be difficult for Lowe's to establish itself quickly in this country without eventually making a big acquisition.

He pointed to the huge head start of both Rona and Home Depot. "It's a very difficult market," Mr. Williams said. "Rona and Home Depot are so well positioned now . . . They're really duking it out."

Home Depot has 120 superstores here while Rona has 530 outlets of varying sizes.

Sylvain Morrissette, a spokesman for Rona, said he couldn't comment on rumours. But he insisted that Rona has developed a strong strategy to ensure its future.

Rona differs from Home Depot in that it has a wide array of store types, from uber-sized big boxes to small outlets. Lowe's may only be interested in Rona's superstores.

The rumours about Lowe's possible arrival in Canada have created a buzz in the industry. One retailing source said he had heard that Lowe's representatives have tied up as many as a dozen sites for its mega-outlets, and that is has set up a Canadian office. It is expected that the first stores will be in Southern Ontario by next year.

Real estate officials said Michael Goulais and Alan MacKenzie of M. Goulais Consultants in Toronto have been meeting with them to discuss locations for a U.S. retailer entering Canada. "They are producing letters of intent," one official said.

Reached this week, Mr. MacKenzie did not comment on whether he and his partner represent Lowe's and are trying to find store locations for the retailer.

One real estate source said Mr. MacKenzie expressed interest in some of his company's locations, and he is waiting to hear back about offers for the sites.

"We've been told it's an existing American organization that's looking for anywhere from 10 to 15 acres," the source said. "There's not that many, even in the States, American guys that take that size unit. Most of the ones that do take it are already here."

U.S. discounter Target Corp. has also been interested in coming to Canada. But Target CEO Bob Ulrich said last month [May] that it has no immediate plans to expand outside the United States.

Roger Plamondon, regional operations manager for Eastern Canada at Home Depot Canada, said he has heard the rumours about Lowe's but "for us, it's business as usual . . .

"We have been in Canada for 11 years. We are very proud of our performance in Canada. We know the Canadian marketplace very well," Mr. Plamondon said.

Lowdown on Lowe's

In 60 years, Lowe's has grown form a modest collection of North Carolina hardware stores to a megastore chain that rang up $36.5-billion (U.S.) in sales last year.

The big box

Employees: 160,000 (80 per cent of them full-time)

Outlets: 1,100 in 48 U.S. States

Typical store: 117,000 square feet of retail space, selling about 40,000 products

The foundation

Began in the mid-1940s after H. Carl Buchan bought out his brother-in-law James Lowe and rode the postwar boom with a modest chain of hardware/lumber stores. In the 1980s with the rise of do-it-yourself, it evolved into full-fledged building centres.

The design

Make old stores feel like new - spent $500-million (U.S.) last year to upgrade stores and plans to invest $700-million this year.

The big three

Lowe's three-pronged sales strategy:

1-Installations (such as cabinets and decks)

2-Special orders (up to 500,000 items, such as fashion plumbing)

3-Commercial business customers.

The nuts and bolts

Company went public in 1961.

Joined NYSE in 1979 (NYSE: LOW)

Reached billion-dollar-annual-sales mark in 1980.

Over the past 10 years, results have risen steadily - for fiscal 2004, profit reached $2.18-billion on sales of $36.5-billion, 18% better than 2003.

Average customer transaction $63.43 in 2004.

The rivals in Canada

Home Depot, the Atlanta-based chain that entered Canada 11 years ago, has 120 superstores.

Rona, based in Boucherville, Que., has 530 stores of varying sizes.
Attention News Directors, Assignment Editors, Retail and Commercial Real Estate ReporterS:

Video B-Roll via Satellite - Lowe's Announces Expansion into Canada
The Second-Largest Home Improvement Retailer in the World to Open Six-10
Stores in the Greater Toronto Area in 2007

TORONTO, June 6 /CNW/ - The following B-Roll is available at the listed
times and coordinates.

DATE OF FEED: Monday, June 6, 2005

TIME OF FEED: 11:00 AM EST to 11:45 AM EST

COORDINATES: Anik F2 C Band Analog
Transponder 3B
Audio subcarrier 6.2 and 6.8
Downlink Frequency 3820 vertical

STORY SUMMARY: Lowe's Companies, Inc. (NYSE: LOW) announced today the
company plans to build on its aggressive expansion plan by extending the reach
of its stores into Canada. Initially, Lowe's plans to open six to 10 stores in
the Toronto market in 2007, creating approximately 1,700 new Canadian jobs.
Long-term plans include the potential for as many as 100 Lowe's stores in
Canada as the company continues to evaluate additional opportunities for
future expansion.
Lowe's will establish an office in the Toronto area later this year,
which will be led by Doug Robinson, newly named president of the Canada
operation. Over the next several months, Robinson will build a team to manage
the company's entry into Canada and ongoing operations to best serve the
unique needs of Canadian customers.

- Lowe's storefront images
- Customers shopping in the garden centre
- Lowe's associate assisting customer in the home décor department
- Customers at cash register purchasing product

ABOUT LOWE'S: With fiscal year 2004 sales of $36.5 billion, Lowe's
Companies, Inc. is a FORTUNE(R) 50 company that serves approximately
11 million customers a week at more than 1,100 home improvement stores in
48 states. Based in Mooresville, N.C., the 59-year old company is the second-
largest home improvement retailer in the world. For more information, visit
Wow - Lowe's in Canada? Excellent!

I was at a Lowe's in Erie, PA yesterday picking up some low voltage lights. I love the place. So much cleaner and brighter than Home Depot, plus a better layout. The employees in the stores I have been to have been amazing - yesterday the "low voltage lighting expert" (yes, they have one) basically held my hand for 20 mins while we chose what lights to get. If you ask where XYZ is, they don't just point it out - they take you there. Who knows if the training and employee culture will remain intact in Canada, but hey, competition is very good!
I think they're just threatening to come up, but will eventually buy out Rona. I happened with Best Buy, and before they laid one brick, they negotiated with Future Shop to buy them out. I think it's just posturing. Remember when there was a Home Depot, Building Box and Rona at Warden and Eglinton area? Building Box (and its Québec sister company Réno-Dêpot, both owned by Castorama, a division of B&Q, which itself is rumored to be in talk of selling itself to Home Depot) was bought up by Rona, and I think now there's two Ronas in that area (last time I checked). My point is that I don't think there's room for three national DIY chains, plus Canadian Tire, Home Hardware, and Sears and Wal-Mart.
It's sad to see all these homegrown Canadian companies being bought out by US giants.
I sure hope not. Rona is winning the war with Home Depot, which is quite a surprise.

I think I just mentioned this on skyscraperpage, but I live not that far from the Stockyards Centre on St. Clair, where they have a Canadian Tire, Home Depot, and a Rona. I used to go to them in that order, but got frustrated because the first two never had what I wanted, and Rona always did.

Anyhow-- it is true--they are a good company, and they're winning the war thus far based on what I've heard. It would be a shame to lose it.
At Rona, you can get Air Miles too! But I do like that Home Depot has Harvey's in them...Tough choice!
Rona has nicer stores, but Home Depot seems to have much better staff - they seem much more knowledgable than the kids that work at Rona.

I heard that Home Depot pays better too, to reduce turnover and attract more knowledgable employees.
Good to see that there isn't a parking lot fronting an area like Parliament and Queen. There sure are a lot of Shoppers Drug Marts being built these days. A lot of them are really big too!
Rona needs to retool in next 2 years to face U.S. rival Lowe's, analysts say
RITA TRICHUR Sun Jun 12,12:54 PM ET
TORONTO (CP) - Canadian home-improvement powerhouse Rona Inc. has just under two years to round out its retail portfolio and secure a vise-like grip on customer loyalty if it wants to avert a takeover by American Lowe's Cos. Inc., retail analysts say.

The Mooresville, N.C.-based retailer has confirmed it will open six to 10 stores in the Greater Toronto Area starting in 2007, laying the foundations for a cross-Canada presence that could eventually include acquisitions.

"It is unusual that Lowe's would announce at this time that they are coming in two years because it certainly gives the incumbents that much time to prepare," said Ed Strapagiel, executive vice-president of Kubas Consultants.

"There is some speculation that this is a calculated move to get Rona to sell out."

Rona, headquartered in Boucherville, Que., is Canada's largest operator of home improvement stores with 566 outlets of varying sizes that are a mix of big-box, home-centre, hardware and other specialized formats.

Lowe's Canada president Doug Robinson told investors last week that his company will focus immediately on organic growth but left the door open for acquisitions down the road.

Analysts warn Canada's $28-billion home improvement market is unlikely to escape the "rule of two" which has seen retail boil down to two power stores in each sector.

With interest rates set to begin an upward crawl during the second half of 2005, and the housing starts past their 2004 peak, the home renovation market is expected to cool off by 2007, just as Lowe's arrives, lending credibility to that aphorism.

That means the clock is ticking for Rona to sew up its home base by establishing geographic dominance in Ontario, Quebec and the West and to fortify its sales to avoid being swallowed up by the American retail giant, which is second only to Home Depot south of the border.

"In other words, offensively protect your turf," said John Williams, founder of the J.C. Williams Group Ltd. "They have to finish completing their geographic coverage of the Toronto market with big-box stores."

There are still plenty of smaller, regionally-based chains across Canada that could become available if the price is right, said Strapagiel.

On Friday, CanWel Building Materials Ltd. said it has put the Pro Hardware store brand up for sale, saying it wants to focus on its main business of distributing lumber and other products to retailers.

Pro Hardware is a brand used by more than 500 independent hardware and building supply outlets across Canada, who pay for the brand's marketing programs, private label products, advertising and electronic catalogue, sometimes adopting the Pro Hardware store name.

Strapagiel said this is not the time for Rona to expand into the U.S. market.

"It is kind of a risky proposition," he said, noting a failed attempt by electronics retailer Future Shop to move down south.

"It is hard to see what special capability or resources that Rona could bring to a U.S. chain acquisition."

The other key challenge for Rona is to secure customer loyalty by creating a superior shopping experience based on high-quality service, merchandise, marketing and special events, he said.

Much like Rona - and to a lesser extent, Home Depot - Lowe's actively caters to women's tastes with wide aisles, bright lights and a merchandise mix that includes "softer" home decor products.

"It is going to be a question of whose customer base is going to be the most vulnerable," Strapagiel said.

"Rona has already demonstrated that it can successfully compete against Home Depot, so Rona is no pushover."

Originally founded in 1939, Rona rang up $4 billion in annualized retail sales last year.

That success is largely attributed to consolidation that began during the 1990s - coinciding with the arrival of U.S.-based Home Depot Canada - that saw Rona shore up its domestic holdings by snapping up rivals like Reno-Depot, Lansing, Revy, Revelstoke and the Building Box.

Portfolio managers and other analysts have suggested that Lowe's entry would continue to put downward pressure on Rona's stock. But company spokesman Sylvain Morissette said Rona will continue with its strategic plan which to build a domestic presence through new store construction, strategic acquisitions, recruitment of affiliated dealers and developing new store concepts.

The company's objective is to grow annualized retail sales to $7 billion by the end of 2007 and it will open 15 to 20 new stores of varying sizes each year over the next three years to help realize that goal.

"Our same-store sales are the best in the market during the last years," Morissette said.

"We do not manage differently because somebody will announce something in the market."

Rona's strength lies in its diversified formats, he added, noting the current trend toward one-size-fits-all will eventually lead to a big-box saturation.

"You know, it is in two years," Morissette said. "There is a lot of things are changing in the market everyday."

Rona's shares (TSX:RON - news) closed Friday at $24.90, down 43 cents, on the Toronto Stock Exchange.
Re: Eaton Centre

Rona eyeing expansion into the U.S.
Hardware firm posts record profit, sales
Thursday, August 11, 2005 Page B5
With files from Bloomberg News

Rona Inc., the largest Canadian distributor of hardware, home renovation and gardening products, is not ruling out the possibility of expansion into the United States if the right opportunity comes along.

"Our eyes are open and our ears too," Robert Dutton, Rona's president and chief executive officer, said in a conference call yesterday in which the company reported record sales and profit in the second quarter of 2005.

Rona is already battling Atlanta-based Home Depot Inc. for market share on its home turf and in early June Lowe's Cos. Inc. of North Carolina said it was coming north of the border to open its marquee home improvement outlets.

"There's more than enough room for Home Depot and Rona, and probably a third major competitor," said Gavin Graham, a director of investments at Guardian Group of Funds Ltd. "With the extremely hot housing market, it's getting growth and there will be more purchases of smaller chains."

Rona's profit for the 13 weeks ended June 26 rose 31 per cent to $70.4-million or 61 cents a diluted share from $53.7-million or 46 cents a year earlier. Its sales were $1.2-billion, up from $1.1-billion.

About half of the 12.4-per-cent increase in sales from a year ago was the result of the $100-million acquisition of Alberta-based Totem Building Supplies Inc., which was consolidated beginning April 14.

The profit for the first half of fiscal 2005 increased 30 per cent to $84.6-million or 73 cents a share on revenue of $1.9-billion.

Shares of Rona rose $1.20 or 5 per cent to close at $23.97 yesterday on the Toronto Stock Exchange.

Rona has generated much of its growth through acquisitions and by adding new corporate and franchise outlets. The threat of competition is likely to accelerate consolidation of the home improvement industry in Canada by motivating independents and large existing chains to sell out to Rona or join its dealer network, George Hartman, an analyst at Dundee Securities Corp., said in a report in June.

The home renovation business remained strong in the second quarter, although construction material prices, which were boiling a year ago, weakened, said Claude Guévin, executive vice-president and chief financial officer.

Lumber prices were down l3 per cent from a year ago, while veneers and plywood prices declined 22.7 per cent.

"The improvement in [profit] margins always results from many small actions," Mr. Guévin said.

Profit continued to improve more rapidly than sales, reflecting improved operating efficiencies, the company said.

Rona operates 566 franchise, affiliate and corporate stores.
Nov. 5, 2005. 01:00 AM
GTA might get more Home Depot outlets
Firm again eyeing city's waterfront

`No big orange box' planned for lakeshore

Home Depot Canada is aggressively pursuing new growth opportunities in the Greater Toronto Area, including the city's waterfront, a company spokesperson says.
The move comes amid increased competition in Canada's home improvement industry as rival Rona Inc. gains more market share and U.S.-based Lowes Inc. attempts to enter the marketplace in this country.
Home Depot has also been at the centre of speculation over who would take over some of the Hudson's Bay Co.'s Zellers locations if a takeover battle at the department store retailer led to some Zellers store closings. Home Depot declined to comment on that.
But talk of a waterfront location could rekindle a battle Home Depot lost to open a store on Cherry St. Residents and area businesses complained it would ruin the waterfront and put small garden centres and hardware stores out of business.
Home Depot spokesperson Nick Cowling said this time would be different. The firm is experimenting with smaller-format stores that better fit urban neighbourhoods.
"We're not trying to put a big orange box in that neighbourhood. We're going to put something special here. We want to fit in," Cowling said yesterday.
The store wouldn't necessarily be on its Cherry St. lands, Cowling said, but somewhere within the area planned for waterfront revitalization.
In the meantime, Home Depot Canada president Annette Verschuren is no longer running Expo Design, the U.S. parent company's home décor chain, Cowling confirmed.
Verschuren's work at Expo Design was finished, he said. "She was brought on for that assignment to fix it. It wasn't performing. She's done that. They've closed some stores and the division is now profitable."
The new head of Expo Design is Bruce Merino, Home Depot's western division vice-president, publisher Michael McLarney reported yesterday in Hardlines, an online newsletter for the home improvement retailing industry.
The move will allow Verschuren to devote all her time to the Canadian market where Home Depot faces far tougher competition than in the U.S.
Home Depot Canada is responding by "growing aggressively," Cowling said. The retailer will open 20 new stores this year. As well, it's actively looking for sites for its new smaller-scale "urban-format" stores in the GTA.
"We're desperately looking for a location in Toronto. The most logical place is the waterfront."
No more "Riverdale Scare"? I was concerned when Sears moved out but the new owners have quietly turned things around. The kids are no longer afraid of going through the tunnel under the former Sears store.

Sneak peek at Gerrard Square renovations


Riverdale is changing and Gerrard Square is changing along with it.
Davport Properties held an open house at the multi-million dollar refurbishment of the two-level 327,000-square-foot shopping centre on Gerrard Street between Jones and Carlaw avenues.

Home Depot, Zellers, Food Basics and Staples Business Depot are already opened and Winners is expected to open in April.

"Riverdale is clearly the heart of Gerrard Square," said Robert Piccinin, leasing manager of Davport, at a press conference held at Gerrard Square Wednesday.

"This urban shopping destination is the only enclosed mall servicing a primary population base of over 96,000 people while offering an indoor shopping experience to over 850,000 people within a five-mile radius."

The inspiration for the mall's overhaul is based on the many new medium- to high-density housing projects and extensive home renovations within the shopping centre area, he said.

The renovations include a full interior and exterior renovation, a renovated parking deck, a new bridge connection as well as a new roadway, streetcar lines and sidewalks.

"We want to make Gerrard Square a one-stop shopping experience," Piccinin said.

Brian Seath, construction manager of the project, said he knew the first time he walked into the 25-year-old mall he had his work cut out for him.

"I thought this was going to be quite the undertaking," he said.

The parking deck was home to hundreds of pigeons and the tunnel under the former Sears was somewhat forbidding, Seath said.

"But we persevered," he said. "It's been a tremendous transformation."

He gave credit to Home Depot for taking the plunge and the City of Toronto for its support.

Ray Goral, manager of the Home Depot, said when the Gerrard Square store opened it gave the company its first urban location.

"It's the first downtown urban store," he said of the 70,000-square-foot store.

He said the store is able to cater to the community, which saw 80 Home Depot kitchen renovations last year.

"Expect to hear buzz saws in March and April in the area," he said. "We're on board for many, many years and we're happy to be here."

Const. Vince Henderson of Toronto police's 55 Division said there have been some huge changes in the area surrounding Gerrard Square and the crime rate has dropped drastically over the past five to 10 years.

"Every house I go into has been gutted and renovated," he said. "The neighbourhood has really changed."

The Gerrard Square renovation is expected to be completed this fall.
There was parking under the Sears store. Is this what is meant?

Not a very well written article.

Home Depot, Zellers, Food Basics and Staples Business Depot are already opened and Winners is expected to open in April.

Zellers and Food Basics were there for years.

Riverdale is clearly the heart of Gerrard Square," said Robert Piccinin, leasing manager of Davport, at a press conference held at Gerrard Square Wednesday.

My feeling is that the real quote was "Gerrard Square is clearly the heart of Riverdale", though I'd be inclined to disagree.
Home Depot Canada plans expansion: Sources
Apr. 4, 2006. 06:15 PM

The Home Depot Canada, which is preparing for the arrival of American home-improvement rival Lowe's Cos. Inc., will announce its own "aggressive" Canadian growth plan on Wednesday that could include up to 20 new stores and about 2,000 jobs this year, sources say.

"It will be a really aggressive expansion," said one source familiar with the strategy.

Another said the Atlanta-based retailer (NYSE: HD) plans to open 18 to 20 new Canadian stores, adding approximately 1.6 million square feet of retail space over the next year.

Each location would employ about 100 people, enabling Home Depot to carve out a bigger slice of Canada's $28-billion home-improvement market in 2006.

A company spokesman refused comment on Tuesday.

The Home Depot Inc., America's largest home-improvement store chain, already has about 138 stores in Canada and more than 26,000 employees. Its average store size is about 80,000 square feet.

Last year, the Canadian division rang up annual revenues of about $5.5 billion Cdn in 2005.

However, it continues to face tough competition from Canadian renovation powerhouse Rona Inc. (TSX: RON) and hard-goods retailer Canadian Tire Corp. Ltd. (TSX: CTR.NV).

While the Canadian market remains highly fragmented, observers say competition is expected to heat up with the much-anticipated arrival of Lowe's in 2007.

Last June, the Mooresville, N.C.-based retailer announced plans to open six to 10 stores in the Toronto area, at a cost of $20 million per store.

The stores would be similar in size and format to its big boxes south of the border, which actively cater to women with wide aisles, bright lights and a merchandise mix that includes "softer" home decor products.

"It's going to be a competitive segment," observed John Chamberlain, a retail analyst with Dominion Bond Rating Service.

However, John Williams of J.C. Williams Group Ltd. said Home Depot has already scooped up the best big-box sites in rapidly expanding markets, such as Toronto and Calgary.

"Lowe's is being shut out of the market," Williams said. "They would have trouble finding the best sites."
So that's what Sir Mix A Lot is up to these days, designing Home Depot stores. Home Depot's got back...