March 7, 2019
Stress Test Impacts Toronto Area Home Sales
Greater Toronto, ON, Area (GTA) REALTORS sold 5,025 homes in February, says the Toronto Real Estate Board (TREB). This sales total was down by 2.4 per cent on a year-over-year basis. Sales were also down compared to January 2019 following preliminary seasonal adjustment. TREB says this decrease was partially due to the OSFI mandated mortgage stress test which has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy. It recommends the stress test should be reviewed and consideration given to bringing back 30-year amortizations for federally insured mortgages. Home sales have a substantial impact on the Canadian economy, says Jason Mercer, director of market analysis and service channels with TREB. On average, each home sale reported results in $68,000 spin-off expenditures accruing to the economy. “With sales substantially lower than the 2016 peak over the last two years, we have experienced a hit to the economy in the billions of dollars in the GTA alone.”
AI Will Change Customer Experience
The majority of U.S. retailers (80 per cent) believe that artificial intelligence (AI) will change the online customer experience and will be a competitive necessity for business in the next five years (72 per cent), says a study by Synchrony. While large retailers are leading the way in adoption, nearly half of retailers of all sizes expect to use AI in the next three years for inventory planning (43 per cent), quality control (46 per cent), forecasting market trends using data analytics (46 per cent), and detecting fraud (45 per cent). “AI is one of the most disruptive technologies for the retail industry ‒ impacting supply chains, customer service, and payments,” says Greg Simpson, chief technology officer and AI leader at Synchrony. “Investing in AI technology is no longer optional for merchants, but some may struggle with leveraging the insights in the most effective way to glean true outcomes.” For many retailers, lack of budget and mature technology, as well as difficulty prioritizing investments, remain key challenges to investing in AI. The study says opportunities exist with cloud technologies and choosing the right AI-enabled technology for given business needs. Improved merchandising, predictive product inventory, and customer service remain key goals.
NetCents To Offer Cryptocurrency Payment Options
NetCents Technology has entered into a five-year ISO reseller agreement with a merchant service and POS terminal provider (MSP). MSP is partnered with Apple Pay and Android Pay to process transactions on Verifone and GROOVV POS systems to allow merchants to be fully EMV compliant and accept a multitude of payment options including VISA, MasterCard, Discover, American Express, Apple Pay, and now, cryptocurrency. MSP will be bundling the NetCents merchant gateway and cryptocurrency credit card program into their services to be rolled out to their merchant base. MSP is working with one of its enterprise-level merchants with the intent to introduce a white label of the NetCents cryptocurrency credit card program to the merchants network of over 100,000 users, a new milestone for the company.
Simpson Strong-Tie Releases Catalog
Simpson Strong-Tie’s ‘2019–2020 Wood Construction Connectors Catalog’ is now available for download and purchase. The catalog features product information for all of the company’s wood-to-wood, wood-to-concrete, and wood-to-masonry structural connectors. It has also added 14 new products, including product line and series extensions. Simpson Strong-Tie has updated all of its connector allowable load tables to meet the latest test standards; these are indicated in the catalog.
NanaWall Awarded Best of Houzz 2019
NanaWall Systems, a designer and manufacturer of opening glass wall systems, has received Houzz’ ‘Best of Customer Service’ recognition for the fifth year. The company will post a ‘Best Of Houzz 2019’ badge on its profile as a sign of its commitment to excellence. These badges help homeowners identify popular and top-rated home professionals in every metro area on Houzz. The ‘Best Of Houzz’ badge is awarded annually in three categories – design, customer service, and photography. Design awards honour professionals whose work was the most popular among the Houzz community. Customer service honours are based on several factors, including a pro's overall rating on Houzz and client reviews submitted in 2018.
Teacher Named Sales Manager
Eric Teacher is regional sales manager – specifications at Liteline. He has been working in the lighting applications industry since 1993.
Material Pricing Affects CanWel Revenues
CanWel Building Materials Group Ltd. had revenues of $264 million for the fourth quarter of 2018, a decrease of 4.4 per cent compared to revenues of $276.2 million in the fourth quarter of 2017. Sales for the distribution segment decreased by $9.8 million or 3.8 per cent compared to the same period in 2017, largely due to the impact of a significant fall in construction materials pricing in the second half of 2018. This decrease was partially offset by the strength of the company’s U.S. operations due to more favourable market conditions and continuing focus on product mix strategies and target customer base. The company’s sales by product group in the quarter were made up of 52 per cent construction materials, with the remaining balance of sales resulting from specialty and allied products of 39 per cent and forestry and other of nine per cent. Gross margin dollars decreased by 10.5 per cent to $38.6 million for the quarter and gross margin percentage was lower at 14.6 per cent of revenues versus 15.6 per cent during the same period in 2017. Adjusted EBITDA was $8.9 million compared to $13.4 million in 2017.
March 6, 2019
More Properties, Less Buyers In Vancouver
More sellers listed properties in metro Vancouver, BC, but house hunters continued to take their time in February, says the Real Estate Board of Greater Vancouver. Nearly 28 per cent fewer detached properties sold last month compared with February 2018 and sales dropped 32.8 per cent compared with a year ago. There were just shy of 3,900 new residential property listings last month ‒ down 7.8 per cent compared with the same month the previous year ‒ and the sales-to-active listings ratio for the month was 12.8 per cent.
FCL Shares Record Profit With Co-ops
Federated Co-operatives Limited (FCL) returned $789 million to more than 170 local, independent co-operative associations in 2018 as it realized record earnings of almost $1.1 billion from nearly $10.7 billion in sales. “I’m proud to say that our entire earnings stay right here in western Canada. They’re used by FCL, our co-operative member-owners, and ultimately the 1.9 million individual co-op members,” says Scott Banda, CEO. Speaking at FCL’s ‘90th Annual Meeting,’ he said, “It’s a virtuous circle and it’s why we’re unique.” The remainder of FCL’s 2018 earnings will be used to invest in current assets as well as future challenges and opportunities such as the transition to a low-carbon economy.
Masco To Explore Alternatives For Businesses
Masco Corporation, a manufacturer of branded home improvement and building products, says it will explore strategic alternatives for its cabinetry and window businesses. “Over the past five years, we have been executing our strategy to drive the full potential of our core businesses, leverage opportunities across our organization, and actively manage our portfolio to drive shareholder value,” says Keith Allman, president and CEO. “Our cabinetry and window businesses are leaders in their respective markets and are well-positioned to continue their growth. However, we believe we can potentially drive greater shareholder value by exploring strategic alternatives for these businesses. We expect to complete this review by the end of June.” The cabinetry products and windows and other specialty products segments reported $1.7 billion in net sales, $120 million in operating profit, and $161 million in adjusted EBITDA on a combined basis in 2018.
G. D'Aoust & Cie Awarded IHA gia
G. D’Aoust & Cie was awarded the International Home + Housewares Show and International Housewares Association (IHA) ‘IHA Global Innovation Award’ (gia) for Canada for 2018-2019. Established in 1900, G. D’Aoust & Cie is a one-stop retail emporium, with a team always on the lookout for the latest trends. This 20,000-square-foot building in Montreal, QC, offers giftware, kitchenware, gourmet products, decorative items, bedding, furniture, and fashion. The gia program was created to foster innovation and excellence in home and housewares retailing throughout the world. Since the launch of gia in 2000, there have been more than 430 gia retail award winners, from 47 countries on six continents.
Boise Cascade Closes Plywood Facility Sale
Boise Cascade Company has closed the sale of its plywood facility in Moncure, NC, to Southern Veneer. Boise Cascade is a producer of engineered wood products and plywood in North America and a wholesale distributor of building products. Southern Veneer is a Georgia-based manufacturer of veneer and plywood.
LED Adoption Transforming Lighting Industry
The increasing adoption of LED lighting is transforming the lighting industry and the associated lighting controls market, says a report by Frost & Sullivan. The ‘World Lighting Controls Market, Forecast to 2025’ shows wireless lighting control installation is especially gaining momentum with the internet of things (IoT) enabling its widespread use in a number of segments. In addition, the emergence of wireless connectivity standards like Bluetooth Mesh and Zigbee are set to boost the market by facilitating the control of multiple light sources in a large-scale installation. The report says lighting controls have transitioned from being simple devices that are used to control lighting appliances to being critical components of smart buildings. The market generated $6.19 billion in 2017, with developed markets holding close to 75 per cent of the market share; North America was the largest shareholder. The market will receive an additional boost from the adoption of open standards and protocols as they enable interoperability among systems for building and home automation, managing sensor networks, and asset tracking. Wired lighting controls will continue to dominate the market, although they are expected to lose shares to wireless controls. Controllers and sensors will hold more than 64 per cent of the revenue share of lighting controls in 2025.
Bolt Supply Drives Lawson Products Sales
MRO product and services distributor Lawson Products, Inc. had sales of $86.3 million for the fourth quarter of 2018, an increase of seven per cent over sales of $80.6 million in the fourth quarter of 2017. The growth in sales was primarily due to improved demand across all Lawson MRO customer categories and a 12 per cent increase at the Bolt Supply House. MRO segment average daily sales increased 5.6 per cent year over year. Operating income was $4.1 million in the quarter compared to operating income of $200,000 in the prior-year quarter. Adjusted EBITDA was $5.1 million compared to $3 million in the year-ago quarter. Gross profit for the quarter was $46.1 million or 53.4 per cent of sales.
March 5, 2019
No Relief In Sight For Retail Sales
Total location-based retail sales were up just 2.7 per cent in 2018 versus the previous year – the second lowest gain of the last six years and marks a major reversal of fortune from the 7.1 per cent gain recorded for 2017, says Ed Strapagiel, a retail consultant. What's worse is that the trend lines are still heading downward going into 2019 and the 12-month trend is on a steep decline. The shorter-term three-month trend is tracking lower, indicating things are likely to get worse before they get better. Total retail sales increased only 0.8 per cent year-over-year in the fourth quarter of 2018, one of the weakest fourth quarters ever. Furniture store retail sales were up only 0.6 per cent for the year, and down 0.9 per cent year-over-year in the fourth quarter alone. Home furnishings stores saw a gain of only 0.7 per cent in 2018 and just 0.2 per cent in the fourth quarter. Canadian eCommerce sales were up 14.7 per cent year-over-year for the fourth quarter, but this is less than the 20.4 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.
Groupe BMR Opening Second La Shop
Following the success of its first store in Griffintown in Montreal, QC, BMR Group is maintaining its momentum by opening a second La Shop BMR location this spring in Mount Royal, QC. The 6,600-square-foot space represents an opportunity for the banner to continue developing this new hardware store concept, designed chiefly for customers living in urban areas. Like the Griffintown store, the Mount Royal location will stock a wide range of smart products, hardware, and seasonal items, as well as other product categories such as mini-greenhouses and organic animal care products. The sharing-economy concept will also be one of the strengths of the store which allows customers to borrow or rent tools, helping them save money and storage space.
Canadian Tire To Relocate Ottawa Outlet
Canadian Tire is planning a new store in Ottawa, ON, at the Carlingwood Shopping Centre, with plans to close its outlet nearby. The company says the move will improve the customer shopping experience and better meet the needs of the community. Carlingwood, which opened in 1956, has been looking for another retail anchor since the Sears outlet closed in 2018. This left only one anchor store on the east end of the 30-acre site. Canadian Tire has submitted a site planning application to the city of Ottawa and hopes to have it approved by April. No zoning changes are required. The plan calls for a two-storey build, roughly on the old Sears footprint, with a 30-bay automotive service centre.
Canfor Closes VIDA Acquisition
Canfor Corporation has completed the purchase of 70 per cent of the Vida Group of Sweden. Canfor says the transaction will help develop its business on a global scale. The Vida Group produces structural wood products including studs, joists, and roof truss timber.
Social Media Gaining Popularity In Quebec
Social networks continue to gain popularity in Quebec for all age groups, shows a report by research organization CEFRIO. Its ‘NETendances 2018’ survey shows that in 2018, 83 per cent of Quebec adults used at least one social network for their personal use, an increase of 16 per cent compared to 2016. Young adults are significantly more likely to use social networks, but the percentages are increasing in all age groups, led by adults aged 55 to 64, for whom the utilization rate has increased by 26 per cent from 2016 to 2018, rising from 52 per cent to 78 per cent. Daily use is also up, with 65 per cent of adults in Quebec connecting to social networks at least once a day, which is an increase of 13 per cent compared to 2016. The report shows that Facebook and YouTube are the two most popular social networks for Quebec adults, with utilization rates of 70 per cent and 64 per cent respectively. They are followed by Instagram, with utilization rates of 15 per cent in 2016 increasing to 24 per cent in 2018. Forty-four per cent of Quebec adults who use social networks bought or sold products and 35 per cent used them for reviews of products and services. In 2018, nearly one in three (32 per cent) of Quebec adult social media users published at least one positive or negative comment about a brand or a business. Of note, more than half of Quebec adults who use social networks (56 per cent) clicked on a sponsored publication or an advertisement when using these platforms.
Leon’s Sales Rise
Leon's Furniture Limited had total sales of $726.5 million in the fourth quarter of 2018, an increase over total sales of $723.3 million in the fourth quarter of 2017. Revenue for the quarter was $601.7 million versus $596.9 in the year-ago period. Adjusted net income increased by six per cent to $38.3 million from $36.1 million.
Outdoor Living Featured At Show
Gardens as an extension of the home’s living space inspires the theme, ‘A Family Affair’ for ‘Canada Blooms 2019.’ This year, the event will feature the ‘Green Streets Play Zone,’ ‘Tranquility for the Family,’ ‘The Royal Stone Group Family,’ and ‘Fusion Garden.’ Also featured will be ponds, small-space gardens, and a space designed to create a private ‘club-like’ atmosphere. Canada Blooms 2019 presented by Mark’s Choice takes place March 8 to 19 at the Enercare Centre at Exhibition Place in Toronto, ON. For more information, visit Canada Blooms
March 4, 2019
Manufacturers Report Strong 2017 Revenues
Total revenue reported by Canadian manufacturers rose 5.3 per cent or $35 billion from 2016 to $700 billion in 2017, says Statistics Canada. This follows a $7 billion or 1.1 per cent increase in 2016. Total expenses followed the same trend, rising by $32 billion or 5.4 per cent. Revenue from goods manufactured increased five per cent or $31 billion to $651 billion, accounting for 93 per cent of all revenues earned by Canadian manufacturers in 2017. The $49 billion difference between total revenue and revenue from goods manufactured was comprised of revenues from financial investments, sales of goods purchased for resale (as is), and business activities other than manufacturing such as wholesaling activities. Total cost of materials and supplies kept pace with revenue from goods manufactured, increasing 5.7 per cent ($22 billion) and accounting for 64 per cent of total expenses in 2017. Every province registered an increase in revenue from goods manufactured, ranging from 1.7 per cent in Ontario to 18.5 per cent in New Brunswick. For Ontario, Quebec and British Columbia, 2017 marked the eighth consecutive year of growth in manufacturing activities. The largest contributors to the increase in British Columbia included wood products (up $1 billion or 10.0 per cent).
GTA Home Sales Increase Moderately
In January, sales of new homes in the Greater Toronto, ON, Area (GTA) showed a moderate increase from last year, says the Building Industry and Land Development Association (BILD). A total of 1,362 new homes were sold in January, which was 14 per cent more than the number sold in January of last year. January's sales of new single family homes, including detached, linked, and semi-detached houses, and townhouses (excluding stacked townhouses), with 420 single-family homes sold, were still low from a historical perspective, down 53 per cent from the 10-year average. Sales of new condominium apartments, including units in low-, medium-, and high-rise buildings, stacked townhouses, and loft units, were only five per cent lower than the 10-year average, with 942 units sold. With little new product coming into the housing market in January, remaining inventory decreased slightly from last month, to 15,530 units comprised of 10,364 condo apartment units and 5,166 single-family homes. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.
Canadians Turning To Alternative Payment Tools
Despite being one of the highest banked populations in the world, Canadians are increasingly turning to alternative payment tools, says a study by the Canadian Prepaid Providers Organization (CPPO). Adoption of these payments tools – including PayPal, mobile, and prepaid – has increased by 14 per cent since 2016, led by a growing use of prepaid products. The growing $3.8 billion prepaid payments industry in Canada has grown rapidly as a major form of electronic payment without involving credit. It is being used to power new fintech and paytech solutions aimed at improving customer experience, financial inclusion, and faster payments delivery through its ease of use and ubiquity of acceptance. The study shows that while Canadians remain loyal to their credit and debit cards, the continued decline in the use of cash and checks has fueled significant growth and adoption of alternative payment tools over 2016. Non-traditional banking solutions are being adopted, particularly by younger Canadians, for convenience and cost-savings along with new apps that help them stick to a budget.
Investment Company Acquires Jacuzzi Brand
An investment subsidiary of Investindustrial VI L.P. has completed the acquisition of Jupiter Holding I Corp. (Jacuzzi Brands), owner of several spa and bath products brands, among them Jacuzzi, from investment funds affiliated with each of Apollo Global Management, LLC, Ares Management Corporation, and Clearlake Capital Group, L.P. Affiliates of Nottingham Spirk Design Associates, Inc. have also invested in the company as business innovation partners.
Lowe’s Canada Launches Corporate Website
Lowe’s Canada has launched its corporate website, which features news on the organization and an overall view of the company operating the Lowe’s, RONA, Reno-Depot, Ace Canada, and Dick’s Lumber banners. The website was created to host all corporate information under one roof, making it easier to learn more about the company. “We wanted to create a space to share who we are beyond our retail activities so people could discover the human side of the company behind our stores,” says Jean-Sébastien Lamoureux, senior vice-president, communications, public affairs and compliance. To accompany the launch of the site, Lowe’s Canada also created its first corporate social media accounts on Twitter and LinkedIn to share news about the organization, its banners, and employees.
Rayfield CEO Of Saint-Gobain North America
Mark Rayfield is chief executive officer of Saint-Gobain North America. In this role, he will oversee the company’s building solutions businesses in the United States and Canada. As such, he will continue to serve as CEO of CertainTeed, Saint-Gobain’s manufacturer of building materials for commercial and residential construction. He has 20 years of experience within the Saint-Gobain family of brands.
Armstrong Sales Up 11 Per Cent
Armstrong World Industries, Inc. had net sales of $238.9 million for the fourth quarter of 2018, an increase of 11.4 per cent over net sales of $214.4 million in the fourth quarter of 2017. Operating income for the quarter was $52.5 million, up 21 per cent over operating income of $43.4 million. Earnings from continuing operations were down 64.8 per cent to $36.6 million from $104.1 million. Sales were driven by higher volumes in the architectural specialties segment, as well as higher mineral fibre average unit values. Adjusted EBITDA was $79 million for the quarter, up 16.1 per cent over adjusted EBITDA of $68 million in the year-ago period.
March 1, 2019
Tax Relief Needed For Entrepreneurs To Scale Up
Governments need to consider policies that support both public and private equity markets and do not create an impediment to growth for Canadian companies become public,” says Pierre Lortie, author of the C.D. Howe Institute ‘Entrepreneurial Finance and Economic Growth: A Canadian Overview.’ The report shows that competitiveness of Canadian firms is being hampered by tax policies that discriminate against and penalize companies as they seek equity to fuel growth. It examines the dynamics of Canadian private and public equity capital markets and their efficiency in providing access to financing for innovative, high-growth small- and medium-sized enterprises. The report recommends adopting a tax measure similar to the ‘U.S. Small Business Jobs Act of 2010,’ which provides for full exemption from federal taxation of capital gains realized on the sale of shares of certain small businesses and reducing the capital gains tax on shares issued by qualified SMEs when they list on a Canadian stock exchange and are held by individual investors for a reasonable period of time.
Wholesale Sales Rise Slightly
Wholesale sales rose 0.3 per cent to $63.1 billion in December following a 1.1 per cent decline in November, says Statistics Canada. Sales were up in four of seven subsectors, representing about 64 per cent of total wholesale sales. The motor vehicle and parts and the miscellaneous subsectors led the gains. In volume terms, wholesale sales increased 0.3 per cent. In the fourth quarter, current dollar wholesale sales decreased 0.4 per cent, the first decline following 10 consecutive quarterly gains. Constant dollar sales decreased for the second consecutive quarter, down 0.9 per cent. Wholesale inventories were up 1.9 per cent in December, pushing the inventory-to-sales ratio to 1.43 ‒ the highest level since November 1995. Sales in the building material and supplies subsector increased 0.7 per cent to $9.1 billion, the first gain in three months. The lumber, millwork, hardware, and other building supplies industry reported the sole increase in December, 2.7 per cent.
Most Buying Decisions Made At Home
Eighty-eight per cent of buying decisions are discussed or made at home, says a study by PebblePost, a digital-to-direct mail marketing platform. The study, entitled ‘Home is at the Heart of Commerce Marketing,’ also shows 89 per cent of key purchase decisions are pre-planned and discussed with others. Spouses have the greatest influence on purchase decisions with 73 per cent of consumers saying that their spouse is influential in purchase decisions. When it comes to direct mail, 76 per cent of shoppers discuss relevant mail from a brand or retailer they have purchased from in the past, while 68 per cent of shoppers immediately toss direct mail received from a brand they haven’t heard of. Sixty-one per cent of recipients find direct mail influenced their purchase decision. With so many buying decisions made at home, PebblePost says this demonstrates the importance of direct mail in a shopper’s path to purchase. “The central role of the home, coupled with 90 per cent of intent data available online and 90 per cent of purchases occurring offline, means that marketers must align digital and traditional marketing strategies ‒ including direct mail ‒ to maximize ROI and drive conversions across every purchase channel,” says Lewis Gersh, CEO of PebblePost.
Partnership Helps Saint-Gobain Optimize Electricity Usage
Schneider Electric has extended its contract with building materials company Saint-Gobain, which builds on a 16-year partnership designed to optimize energy buying across sites in Canada, the U.S., and Mexico. To date, the program has helped Saint-Gobain trim energy expenses by more than $50 million. With the four-year extension, Saint-Gobain is adding more than 20 new properties to the portfolio that Schneider Electric analysts help manage, bringing the total to 144 sites. The analysts deliver a suite of procurement services that range from strategic sourcing and rate reviews to budgeting, and utility invoice collection and validation. In addition, all data for the program, including details on contracts and pricing, and site-level energy use, flows into Schneider Electric's EcoStruxure Resource Advisor, a cloud-based enterprise software platform. This gives Saint-Gobain a single source to track performance and savings and benchmark facilities in order to identify efficiency opportunities.
Newell Brands To Sell Rexair To Rhône
As part of its accelerated transformation plan, Newell Brands will sell its Rexair business to investment funds affiliated with Rhône Capital, a global private equity firm. Since 1936, Rexair has developed and manufactured Rainbow products designed to improve indoor environments. In 2018, net sales for the Rexair business were approximately $123 million.
Huebner Heads Jacuzzi
Charles Huebner is CEO of Jacuzzi Brands. Most recently, he was CEO of Dacor, Inc., which designs, manufactures, and markets kitchen appliances.
La Coop fédérée Has Record Sales
La Coop fédérée (La Coop) had consolidated sales of $6.5 billion for the year, up $244 million from fiscal 2017. The company says results are reflective of acquisitions, partnership agreements, and significant capital expenditures as well as strategic initiatives in line with its business model modernization. Earnings before patronage refunds and income taxes amounted to $210.7 million with equity and preferred shares totaling $1.5 billion and assets rising to $3.3 billion. All three operating segments – meat division, agri-business division, and retail division – contributed to the results. La Coop’s Gestion BMR Inc. segment includes BMR, Unimat, Agrizone, Potvin & Bouchard, La Shop, and Country Stores banners.