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News

November 8, 2018

Moderation Forecast In Housing Starts And Sales

Canada's housing markets should see a moderation in both housing starts and sales, says the '2018 Housing Market Outlook' by the Canada Mortgage and Housing Corporation (CMHC). Nationally, CMHC's outlook for 2019 projects total housing starts to edge down and range between 193,700 to 204,500 with the downward trend expected for both single and multi-unit starts. MLS sales are expected to be between 478,400 and 497,400 units annually. Housing starts activity and MLS Sales in British Columbia should moderate as economic and population growth slows. Meanwhile, buyers' market conditions in both Alberta and Saskatchewan should gradually shift to a balanced market with gradual improvement in economic and demographic fundamentals. In Ontario, the housing market saw dampened activity in 2018. Existing home sales and starts will post a partial recovery in 2019. In Quebec, housing starts and sales of existing homes will both be sustained, however, slower economic growth and rising borrowing costs will moderate activity through 2020. The Atlantic region will see sustained activity, notably in Nova Scotia, where existing home sales should trend higher while rental demand will drive growth in apartment construction.


Strong Growth Forecast For Interior Doors

A surge in residential and non-residential construction activities, a growing demand for energy-efficient and eco-friendly doors, a rise in home improvement and remodeling expenditures, and an increase in demand for recyclable raw materials are expected to boost the growth of the global interior doors market, says a report by Allied Market Research. The report shows the global interior doors market was pegged at $52.61 billion in 2017 and is expected to reach $85.41 billion by 2025, registering a compound annual growth rate (CAGR) of 6.3 per cent from 2018 to 2025. Among door types, the panel doors segment held the largest market share of 65 per cent in 2017, owing to the significant demand for panel doors among home owners and builders for their weatherproof attribute and low-maintenance cost. However, the bypass doors segment is expected to portray the fastest CAGR of 7.3 per cent during the forecast period. Among product types, the wood segment accounted for more than half of the market share in 2017 and would remain dominant through the forecast period.


Retail Sales In The Doldrums

Canadian retail sales keep stumbling along at a modest pace and the holiday sales season doesn't look too promising at this stage, says Ed Strapagiel, a retail consultant. For the three months ending August, total retail sales were up 3.7 per cent on a non-adjusted basis. This is about half the 7.1 per cent gain recorded for last year overall. The three-month growth trend continues to track below the underlying 12-month trend, which in turn has been on a consistent slide since the start of the year. Without gasoline stations, there is an even steeper slide in retail sales growth in 2018, he says. Overall, eCommerce represented about 2.8 per cent of total retail sales for the 12 months ending August 2018, including both pure play operators as well as the online operations of bricks-and-mortar stores. Canadian eCommerce sales were up 13.5 per cent year-over-year for the three months ending August, but this is much less than the 3.9 per cent gain recorded in the same period a year ago. eCommerce retail sales gains are still in double digits and are still much higher than for location based retail, but growth is slowing down.


FBM Sees Strong Sales

Foundation Building Materials, Inc. (FBM) had net sales of $542.3 million for the third quarter of 2018, an increase of 15.9 per cent over net sales of $467.9 million for the third quarter of 2017. Net sales from base business branches contributed $52.3 million, or 12.5 per cent, of the increase. Gross profit for the quarter was $154 million, an increase of 13.4 per cent compared to gross profit of $135.9 million for the year-ago period. Gross margin was 28.4 per cent versus 29 per cent. Net loss was $37.6 million compared to net income of $100,000. For the third quarter, adjusted EBITDA was $43.7 million and adjusted EBITDA margin was 8.1 per cent compared to adjusted EBITDA of $36.4 million and adjusted EBITDA margin of 7.8 per cent last year.


Resolute Has Strong Income

Resolute Forest Products Inc. had net income of $117 million for the third quarter of 2018, an increase compared to net income of $24 million for the third quarter in 2017. Sales were $974 million in the quarter, an increase of $89 million from the year-ago period. Consolidated operating income was $135 million compared to $121 million in the second quarter of 2018. Despite weaker lumber markets, overall results increased by $14 million, supported by higher pricing and improved productivity in its pulp and paper operations, says the company. Wood products operating income dropped $35 million to $45 million from the second to third quarter. EBITDA for the segment decreased to $53 million, compared to $86 million in the second quarter.


November 7, 2018

Quebec Leads Building Permit Issuance

Canadian municipalities issued $8.1 billion worth of building permits in September, up 0.4 per cent from August, says Statistics Canada. The national increase was driven by higher construction intentions in Quebec. In the residential sector, the value of building permits edged up 0.3 per cent to $4.9 billion, posting the first increase in four months. Higher construction intentions for multi-family dwellings contributed to the rise. In the multi-family dwelling component, the value of permits rose 1.5 per cent to $2.7 billion while the value for building permits for single-family dwellings was down 1.2 per cent to $2.2 billion in September, the fourth consecutive monthly decrease. Municipalities approved the construction of 19,073 new dwellings, up 7.8 per cent from August. The increase was attributable to both single-family (3.3 per cent) and multi-family (9.4 per cent) dwellings. The value of building permits in the non-residential sector was up 0.6 per cent to $3.1 billion in September, due to higher construction intentions for institutional buildings. In the institutional component, the value of building permits rose 16.4 per cent from August to $806 million. In the commercial component, $1.7 billion worth of permits were issued in September, down 3.3 per cent from the previous month. The value of building permits in the industrial component fell 5.7 per cent to $636 million. Five provinces reported declines, with the most significant decreases in Quebec and British Columbia.


IKEA Canada Launches One-year Return Policy

IKEA Canada has launched a 365-day return policy that allows returns for unused product up to one year after purchase. Products including home furnishings and accessories can be returned to the retailer, either in their original packaging or assembled, allowing customers to test and try at-home. The policy was first introduced in early fall and has now rolled out to all markets from coast-to-coast, including eCommerce. With proof of purchase, customers can return any product, even if it's assembled, as long as it's in unused resalable condition. The return policy covers all IKEA products including unexpired food, with no exceptions. Customers will be refunded with the same method as their original payment.


Service To Help SMBs Enter Digital Space

Webware.io has partnered with Staples Canada to enable small businesses and entrepreneurs to leverage the digital world to build their business. As part of the partnership, Webware will have staff onsite in Staples stores to educate and counsel business owners on how they can enter the digital space and market to a broader audience. Webware staff will be onsite in four Staples stores in the Greater Toronto, ON, Area, and, over the next 18 months, its in-store presence will roll out in many Staples locations across Canada. "For businesses to be successful online, they need more than a website. They need a robust online strategy that does not require a large investment of their time," says Cory York, founder and CEO Webware. "In the last three years, Webware has helped more than 10,000 small business owners enter and grow a successful online presence. Extending our expertise in-store at Staples will enable us to help even more business owners lever the digital space to take their business to a new level."


Lowe’s Appoints Godbole As CIO

Seemantini Godbole is chief information officer with Lowe’s Companies, Inc., effective November 12. She currently serves as senior vice-president, digital and marketing technology, at Target Corporation. She brings more than 25 years of experience to the role.


OSB Demand Drives Norbord Earnings

Norbord Inc. had adjusted EBITDA of $211 million for the third quarter of 2018, a six per cent increase versus $200 million in the third quarter of 2017. North American operations had adjusted EBITDA of $190 million compared to $184 million in the same quarter last year, while European operations delivered adjusted EBITDA of $23 million versus $14 million. Adjusted earnings were $123 million for the quarter compared to $121 in the year-ago period. Demand for OSB was one of the drivers of the growth. North American OSB shipments increased 10 per cent year-over-year reflecting the restart of the Huguley, AL, mill in the fourth quarter of 2017.


Lower Log Sales Affect Acadian

Acadian Timber Corp. had net sales of $26.6 million for the third quarter of 2018, a decrease from net sales of $27.2 million in the third quarter of 2017. Net income for the quarter was $5.9 million, down from $9.7 million in the year-ago period. Adjusted EBITDA was $6.1 million on margin of 23 per cent compared to adjusted EBITDA of $6.7 million on margin of 25 per cent. The company says results reflect changes in foreign exchange dollars, long-term debt, and lower log sales.


November 6, 2018

Lowe's Closing 27 Canadian Stores, Consolidates Operations

Lowe’s Companies, Inc. will close 51 underperforming stores, including 27 stores in Canada, and has completed the consolidation of Lowe's Canada's operations at the Boucherville, QC, which will lead to the closing of the Mississauga, ON, and St. John's, NL, regional support centres in 2019. The retailer says the closures are the result of an ongoing strategic reassessment that will turn the focus to its most profitable stores and improve the overall health of its store portfolio. The Canadian stores represent approximately three per cent of its total retail network square footage. Lowe’s expects to close the impacted stores before the end of January 2019. To facilitate an orderly wind-down, the company intends to conduct store closing sales for most of the impacted locations with the exception of select stores in the U.S., which will close immediately. The Canadian closures – which comprise stores across the company’s Lowe’s, RONA, and Reno-Depot banners ‒ include one store in British Columbia, two in Alberta, nine in Ontario, nine in Quebec, and six in Newfoundland and Labrador. The consolidation of its operations will enable it ‘to improve collaboration between our banners to better serve our customers," says Sylvain Prud'homme, president and chief executive officer, Lowe's Canada. "The decision to close stores is never one that we make lightly. However, following a detailed business review, we believe that this is the right path for the organization's future." In addition to the store closures, a truss plant located in St. John's, NL, and a block plant located in Kamloops, BC, will also be closed.


Home Transformed To Seasonal Wonderland

Canadian Tire transformed a Toronto, ON, home into a festive wonderland, complete with this year’s trendiest decor and hottest toys. Each of the home’s rooms featured some of the more than 800 new items it will carry this year around specific colour themes including the colour of the year, Serene Rose ‒ a rose/gold combination with Scandinavian influences. It also featured some ‘hacks’ for hiding Christmas gift from snoopy little ones. These include unused suitcases and empty large boxes of cereal that children dislike. Tracy Platt, Canadian Tire’s resident style expert, and representatives from toy companies Mattel and Hasbro were on hand to explain some of the 2018 seasonal trends.


Kelowna Homeowners Choosing Renovations Over Selling

A Kelowna renovation contractor says he is seeing an increase in home renovations as well as the building of legal suites and house additions since the provincial government proposed changes to the British Columbia Speculation Tax earlier this year. The revised tax affects those who own secondary properties in certain British Columbia municipalities, including those in Kelowna and West Kelowna, where the government reports that vacancy rates are low. Norm Kneller, co-owner and operator of Rafter 4K Contracting Ltd., says a number of his clients are choosing to renovate their homes instead of selling due to the proposed speculation tax and its effect on the real estate market. Homeowners "now have a five-to-10-year plan to stay in their home until the market hopefully comes back," says Kneller. Another trend he has noticed is the increased demand in home additions and legal suites. Instead of secondary properties, some clients are looking to add a legal suite or addition to their home so that they can sell a portion of their property to a family member.


Canfor To Reduce Production

Canfor Corp. will be reducing production at its British Columbia sawmills by about 10 per cent this quarter, as a result of log supply challenges following a difficult wildfire seasons, uncompetitive log costs, and declining lumber prices. The curtailment will come in the form of decreased operating days and extended downtime at Christmas. Specifics on how the Prince George operations will be affected are not immediately available. The move comes as the union representing about 1,600 workers at 13 northern British Columbia sawmills ‒ including Canfor's PG Sawmill and Isle Pierre sawmills ‒ continue a campaign of rotating strikes in a bid to win a new contract. As well, members of three USW locals representing about 3,500 sawmill workers in the southern interior have voted in favour of giving their bargaining committee a strike mandate.


Foundation Building Materials Completes Insulation Segment Sale

Foundation Building Materials, Inc. (FBM) has completed the sale of its mechanical insulation segment. The company received $122.5 million, which remains subject to certain adjustments, and plans to use the net proceeds to pay down its revolving credit facility.


Lawson Products Has Strong Sales

Lawson Products, Inc. had sales of $88.5 million for the third quarter of 2018, up 17 per cent compared to sales of $75.7 million in the third quarter of 2017. Average daily sales increased to $1.405 million during the quarter compared to $1.201 million in the year-ago period. The ADS segment sales increased four per cent, excluding the Bolt Supply House. Operating loss was $2.3 million in the third quarter, compared to operating income of $1.1 million last year. Non-GAAP adjusted operating income was $5.6 million compared to $3.9 million, up 44.6 per cent.


Slower Earnings For Whirlpool

Whirlpool Corporation had net earnings of $210 million for the third quarter of 2018, a decrease over net earnings of $276 million in the third quarter of 2017. Net sales for the quarter were $5.3 billion, an increase of 1.5 per cent compared to net sales in the year-ago period, excluding the impact of currency. EBIT was $275 million, or 5.2 per cent of sales, compared to $310 million, or 5.7 per cent of sales. Whirlpool North America had net sales of $3 billion for the quarter, an increase of 5.3 per cent, excluding the impact of currency.


November 5, 2018

CBC Reports Newfoundland Stores Closing

The CBC is reporting that Lowe’s Canada will close its three corporate RONA stores in Newfoundland in January. It cites employees of the home improvement chain who were informed at a meeting on Sunday night. The stores will close January 27, 2019. RONA has stores in St. John's, Paradise, Bay Roberts, and Conception Bay South. RONA purchased the Chester Dawe stores in 2006. RONA was then purchased by Lowe’s in 2016. Independently owned RONA stores are not affected.


Consumers Want Product Transparency

Global consumers (70 per cent) are hungry for more transparency about the social, health, environment, and safety credentials of the products they buy rather than the companies that make them (30 per cent), finds 'The Honest Product Guide,' by the Consumer Goods Forum and global change agency Futerra. The guide says that consumers across the world are most likely to look for this information on product labels (36 per cent). Consumer interest in transparency will likely increase in the future, says the Consumer Goods Forum. It explores how transparency is changing in the era of low consumer trust and that breakthrough brands are being transparent in radically new ways, replicating the psychology of human honesty. "Every retailer and branded manufacturer today knows that transparency is essential to build the trust of their consumers and support sustainable growth," says Peter Freedman, managing director of the Consumer Goods Forum. "But in a world of transformed consumer expectations, social media, and other new technologies, we are all having to completely re-learn what transparency means and how to deliver it to shoppers." For more information, visit 'The Honest Product Guide.'


Moneris Launches Digital Marketing Analytics Tool

Moneris Solutions Corporation has launched Offlinx, a digital marketing business analytics tool which measures the impact of online advertising on in-store and online sales. The tool connects consumer browsing activities to purchase transactions, providing retailers with a view of their return on digital advertising investment. Offlinx is powered by a tagging mechanism that anonymously links browsing data to transactions that process through Moneris' national payment network. The proprietary solution uses multi-touch attribution, providing merchants with next-day results on channel sources driving customer purchases in-store and online. The tool features a store-level performance dashboard that presents confirmed in-store card transactions based on retail location and the driving channel sources, including eMails, referral sites, and social media. The daily performance dashboard collects key performance metrics for campaign tracking, including in-store revenue, average purchase amount, and web traffic. Users can customize the data filters to analyze and report on channel and store performance.


Carroll Becomes CHRO

Kathleen Carroll has been appointed senior vice-president and chief human resources officer (CHRO) with Grainger, effective December 3. She has more than 25 years of HR experience, most recently at First Midwest Bank, where she served as executive vice-president and CHRO.


Sales Strong For Trex

Trex Company, Inc. had consolidated sales of $166 million for the third quarter of 2018, an increase of 19 per cent compared to consolidated net sales in the third quarter of 2017. Residential product net sales were $147 million, up 12 per cent year-over-year, and commercial products sales were $19 million. Consolidated gross margin for the quarter was 40.4 per cent. Net income was $29 million, up 47 per cent from the net income of $20 million in the year-ago period.


Lumber Liquidators Has Increased Sales

Lumber Liquidators had net sales of $270.5 million for the third quarter of 2018, an increase of 5.2 per cent over net sales of $257.2 million in the third quarter of 2017. Net sales in comparable stores increased 2.1 per cent year-over-year, partly driven by the expansion of installation services, where sales in comparable stores was up 39 per cent. Gross profit was $100.7 million, an increase of 8.6 per cent over the previous-year quarter. Gross margin increased to 37.2 per cent from 36 per cent. Operating income for the quarter was $6.7 million compared to an operating loss of $17.3 million last year. Adjusted net income was $7.9 million, up from $3.5 million in the year-ago period.


November 2, 2018

Third Quarter Spending Increases Modestly

The third quarter of 2018 saw spending in Canada remain fairly consistent with the previous quarter, says the 'MonerisMetrics Quarterly Report' by Moneris Solutions Corporation. While spending was up 3.4 per cent over the same period last year, this modest increase is only slightly higher than last quarter, which saw a year-over-year spend increase of 3.3 per cent, the lowest quarterly growth in nearly four years. For the second quarter in a row, most provinces showed positive growth, except for Newfoundland which saw a slight decrease of 0.3 per cent, when compared with the third quarter of 2017. Quebec and British Columbia exceeded the national spend average, realizing a 5.6 per cent and 4.2 per cent increase, respectively, while Ontario matched the Canadian increase average of 3.4 per cent. August proved to be the strongest month of the quarter with an increase in spending of 4.5 per cent over last year, followed by July at 4.1 per cent and September, which saw a much smaller increase of 2.7 per cent. Contactless payment options accounted for 43.4 per cent of all payment card transactions made in the quarter, an increase in volume growth of 33.3 per cent year-over-year, demonstrating that Canadians are now further along the adoption curve.


Taiga Rebrands Categories

Taiga has rebranded and updated all of its product category logos and product category names. The changes include 'Taiga Select' to 'taiga exterior wood,' 'Taiga Synergy' to 'taiga floors & wall,' 'Taiga Premium Prime Mouldings' to 'taiga mouldings.' and a new design for taiga siding. Customers will begin to see the new names and logos in late 2018. The company notes that it is not changing any products, but simply refreshing its branding so it is more consistent throughout its various offerings in the marketplace.


Thermador Launches Smart Appliances

Thermador has launched redesigned products across every appliance category and its Home Connect system, a way for consumers to engage with smart appliances. The products include built-in coffee machines, cooktops, dishwashers, ovens, and ranges. The redesign of the company's Masterpiece and Professional Collections features contemporary and sleek designs. "Thermador's ground-breaking new products were developed to establish a new connection with consumers," says Steve Preiner, director of marketing, BSH Home Appliances. "Through its open platform, Home Connect leads the home appliance industry by providing a growing network of partners, products, and services to provide greater convenience and control." The Thermador Connected Experience by Home Connect offers consumers access to a world of culinary inspiration, including exclusive recipes and product tutorials, remote appliance control from a smart device, and remote diagnostics for product assistance from Thermador's customer care. To create the system, Thermador aligned itself with a number of partners including Nest, IFTTT (if this then that), and EVE for Tesla.


IKO Expands Into Metal Roofing Market

IKO Industries Ltd. will acquire the operations of the Roof Tile Group (RTG) from New Zealand-based manufacturer and builder Fletcher Building. RTG manufactures metal roofing tiles for global sales and distribution under a number of brand names, including Decra and Gerard. The purchase will expand IKO's global manufacturing and operations footprint to include production sites in New Zealand, Hungary, Malaysia, and the U.S. It is part of IKO's global growth strategy as well as part of its expansion into the metal roofing business beyond its partnership with Metrotile NV, particularly in the North American market. RTG will continue to operate on a 'business as usual' basis while IKO gains familiarity with its operations.


Masco Has Solid Sales

Masco Corporation had net sales of $2.1 billion for the third quarter of 2018, an increase of eight per cent over net sales in the third quarter of 2017. In local currency, North American sales increased 12 per cent and international sales decreased six per cent. For the quarter, gross margins decreased 210 basis points to 21.6 per cent from 33.8 per cent a year ago. Operating margins decreased 160 basis points to 14.3 per cent from 15.9 per cent. Plumbing products net sales increased four per cent; decorative architectural products net sales increased 20 per cent; cabinetry products net sales increased four per cent; and windows and other specialty products net sales decreased three per cent year-over-year.


Stanley B&D Sales Up Four Per Cent

Stanley Black & Decker had net sales of $3.5 billion for the third quarter of 2018, a four per cent increase over net sales in the third quarter of 2017. Gross margin rate for the quarter was 35.4 per cent. Sales in the tools and storage segment increased three per cent to $2,448 million; sales in the industrial segment increased 10 per cent to $562 million; and sales in the security segment increased one per cent to $485 million. Overall net earnings were $247.8 million compared to $274.5 million in the year-ago period.


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