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e-mail: circulation@powershift.caHOME IMPROVEMENT RETAILING • December 2012

A POWERSHIFT PUBLICATION

VOLUME 18, NUMBER 6 December 2012

EDITORIAL DIRECTOR & PUBLISHER Dante Piccinin

EXECUTIVE EDITOR Joe Hornyak

ART & PRODUCTION Keith Boa

VICE-PRESIDENT ADMINISTRATION & CIRCULATION

Catherine J. McKerchar

ADVERTISING SALES Dante Piccinin (416) 494-1066

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HOME IMPROVEMENT RETAILING is published 6 times yearly by Powershift Communications Inc., 245 Fairview Mall Drive, 5th Floor, North York, ON M2J 4T1, Canada. Telephone: (416)494-1066, Fax: (416)494-2536, e-mail: hir@powershift.ca. Advertising, and Editorial inquiries should be made to the above address. Issue dates are: Jan/Feb; March/April; May/June; September; October; Nov/Dec. Yearly subscription rates: Canada: $76 plus GST*; U.S. and other: $110/yr. Single Copy prices: Canada: $15 plus GST* prepaid; U.S. and other: $30 prepaid. HOME IMPROVEMENT RETAILING assumes no responsibility for the validity of the claims in items reported or for the opinions expressed by our writers. All rights reserved. Contents may not be reprinted or duplicated without written permission. Publisher assumes no responsibility for unsolicited manuscripts and art. Published by Powershift Communications Inc. PRESIDENT, D. Brian McKerchar; VICE-PRESIDENTS, John L. McLaine, Dante Piccinin, Catherine J. McKerchar.

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CONTENTS

14 18th AnnuAl SpeciAl RepoRt on BAnneRS 2012: A Year Of Cautious Optimism

26 contRActoR BuSineSS Interior Doors Influence Appearance

5 editoR’S View The RONA Big Box Dilemma

6 induStRy updAte

7 in StoRe

8 it’S youR Money

9 pRiVAte weAlth Trusts Can Reduce Taxes

11 MAke MoRe SAleS Delivering On The Sales Promise

13 FocuS on cuStoMeRS Customer Satisfaction Requires More Than Satisfactory Service

28 pRoduct Spotlight

29 people

30 puBliSheR’S peRSpectiVe The Growing Challenge Of Return Fraud

Departments

Features

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To learn more, visit home-owner.ca – or talk to one of us.

Dunc Wilson, National, 519.498.1302

Kevin MacDonald, Atlantic Canada, 902.368.1620

Luc Martin, Quebec, 819.357.0203

Andrew Parkhill, Alberta, British Columbia, 604.751.3853

Georgette Carriere, Ontario, Manitoba, Saskatchewan, 519.501.5988

HOME OFA MOREREWARDINGEXPERIENCEHome Hardware isn’t just the number one banner for independent dealers – it’s also one of the most awarded. This year, five out of eight of Hardware Merchandising Magazine’s 2012 Outstanding Retailer Awards went to Home Hardware Owners. Their hard work, combined with the structure and support of Home Hardware Stores Limited, allowed them to flourish and to receive the recognition they deserve. Congratulations to all our Outstanding Retailer Award winners. Next year, it could be your accomplishments we celebrate.

Community Leader John Kehler and Gary Gilchrist Vernon Home Building Centre Vernon BC

Best Young Retailer Tyler KnightKnights’ Home Building CentreMeaford ON

Best Building Supply/Home Improvement Store Over 25,000 sq. ft.Rob HauserHauser Home Hardware Building CentreCamrose AB

Best Building Supply/Home Improvement Store Under 25,000 sq. ft.Larry and Sylvia YanchishynKenora Home Hardware Building CentreKenora ON

Best Hardware StoreOwen and Wanda ConnollyDauphin Home HardwareDauphin MB

File: 28330_HIR_Congrats_FPDocket/Job: 28330Client: Home Hardware

Trim: 8.125" (w) x 10.875" (h)Live: 0.5625” x 0.4375”Bleed: 0.125”

Publication: HHInsertion Date: Jan/Feb IssueColours: CMYK

Art Director: Mark Copywriter: RickMac Artist: Ross

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eDitor’s View

5HOME IMPROVEMENT RETAILING • December 2012

Joe HornyakExecutive Editor

jhornyak@powershift.ca

Often overlooked is the fact that buying groups in the hardware and lumber and building materi-als retail sector in Canada had a

30-year head start on the arrival of big boxes in Canada. Granted, the purchasing power they represented became more important in the late 1980s and 1990s as big boxes started to appear on the landscape.

The announcement of Castle Building Centres’ plans for its 50th anniversary cel-ebrations next year reminded us of the long history of buying groups in Canada. It began, with all apologies to any we miss, in 1963 when a group of dealers in Ontario formed BOLD Lumber (Buying Organization of Lumber Dealers) to nego-tiate pricing with suppliers based on their collective volume. From the initial six dealers that year, it grew to 157 members by 1982 when it became Castle Building Centres Group Limited.

Canada’s CentennialNext up was Home Hardware. While

that name became official in 1967,

Canada’s centennial year, it started three years before, in 1964, when 122 indepen-dent Ontario hardware retailers purchased Hollinger Hardware Limited of St. Jacobs, ON, forming a dealer-owned hardware co-operative.

In 1967, in Quebec, a small group of lumber and building material dealers maxi-mized their buying power by pooling their purchases when Union-six was born. Within a year, it had a dozen members and was now Groupe BMR inc. That same year, 1967, TIM-BR MART Group came onto the scene.

But, the granddaddy of them all is the one making the most headlines in 2012.

In 1939, a group of Quebec hardware store operators formed Les Marchands en Quincaillerie Ltée in a bid to reportedly get around a monopoly that was threaten-ing their ability to access supplies. The popular legend is the name Ro-Na comes from the first two letters of the first names of Rolland Dansereau, the then president, and Napoléon Piotte, then the external relations. RONA, as we know it, became the name in 1998.

However, RONA as we may come to know it may look entirely different than it does today. The events of 2012 could have a long-lasting impact on what can only be considered a most challenging year. When Robert Dutton, its long-time president, resigned on the heels of third quarter results which saw its net profit drop 89 per cent to $5.1 million, it had already launched efforts to change its business, creating a scenario where some sort of RONA/Lowe’s deal does make sense.

Earlier this month, Dominique Boies, acting president and chief executive offi-cer for RONA, set out three strategic priorities, including a renewed focus on leveraging the strengths of its core busi-nesses. It plans to assess all of its busi-ness units in terms of their core compe-tencies; market position and competi-tive advantage; and scalability. Those it determines are non-core assets will be disposed of – in others words, sold.

Corporately OwnedNow, take a look at RONA big boxes.

Currently, it has 79 with more than 75 per cent corporately owned. For RONA, cor-porately owned means it has a more than 50 per cent equity stake. Earlier this year, it announced plans to reduce the size of some of these stores to what it calls ‘proximity’ stores – smaller, neighbourhood stores. It plans to adapt its 20 TOTEM stores in Alberta to the proximity store concept and convert another 13 big boxes elsewhere in the country. As well, it is in the process of closing 10 big boxes.

With changes planned for almost a third of its big boxes and more than 40 per cent of the corporately owned stores, does this mean RONA is getting out of the big box business?’ Boies may have already answered that saying “Instead of right-sizing, maybe we could get rid of those stores completely. Do we want to be part of a big box future or do we want to focus on proximity stores, which have always been core to RONA.”

And therein lies the opportunity for Lowe’s. Rather than close them, why not dispose of these non-core assets to someone looking for more big boxes in Canada. We are almost certain any political opposition from the province of Quebec – which had promised to derail any Lowe’s purchase of RONA – would become a non-issue. After all, why should Quebec care if Lowe’s is buying big boxes in Brampton, ON, or Calgary, AB. And, is it just a co-incidence that at the same time RONA is announcing a new strategic plan which considers getting rid of non-core assets that Lowe’s says it is still looking for acquisitions in Canada to grow its presence? ❖

The RONA Big Box Dilemma

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HOME IMPROVEMENT RETAILING • December 20126

inDustry upDate

For FREE Daily News Alerts, visitwww.hirmagazine.com/home_improvement_news.php

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Remodeling Plans On The Rise

In the next two years, 72 per cent of Canadian homeowners are planning to decorate or redecorate, 40 per cent are building an addition or remodeling, and another 11 per cent are planning to have a custom home built, says a survey by Houzz.com. Nationally, Canadians are spending an average of $23,300 to upgrade their kitchen cabinets, appliances, and work-space. Bathrooms are smaller investments with Canadians investing an average of $9,100 to remodel everything from plumb-ing fixtures to tile and lighting. Americans are spending an average of $27,000 on kitchens, and $11,300 on bathrooms. The survey also found that remodeling kitchens and bathrooms are top priority for Canadian homeowners and their American counter-parts. In the next two years, 50 per cent of Canadian homeowners on Houzz are plan-ning to remodel their bathrooms and 48 per cent will renovate their kitchen. This compares favorably to the 33 per cent of homeowners surveyed who remodeled their kitchen in the last five years and the 40 per cent who remodeled a bathroom.

Jeld-Wen Donates To Suzuki Foundation

A donation from Jeld-Wen Windows & Doors Canada to the David Suzuki Foundation is earmarked for a campaign on the new ‘Green Economy.’ The donation stems for the company’s pledge to contrib-ute 50 cents for every visit to its Energy Star site during the month of June. Laura Kirk, senior marketing manager of Jeld-Wen Canada, says “by highlighting how small changes can impact the environmen-tal health of our planet, Jeld-Wen is proud to contribute for a greener tomorrow.” The foundation is a national non-profit organization that works with government, business, and individuals to conserve the environment by providing science-based research, education, and policy work, and acting as a catalyst for change.

Spectrum Purchases Stanley Division

Spectrum Brands Holdings, Inc., a global consumer products company, has acquired the hardware and home improvement group (HHI) of Stanley Black & Decker, Inc. HHI is a manufacturer of residential locksets,

residential builders’ hardware, and fau-cets under the Kwikset, Weiser, Baldwin, National Hardware, Stanley, FANAL, Pfister, and EZSET brands. “This is a good acquisition for Spectrum Brands that will increase total revenues to more than $4 billion and add renowned brands with top market share positions in the growing and profitable hardware and home products business,” says Dave Lumley, chief execu-tive officer of Spectrum.

Bosch, Simpson Form Alliance

Robert Bosch Power Tool Corp. and Simpson Strong-Tie Co. will jointly pursue sales, marketing, and product development opportunities in the concrete construction market. The alliance seeks to bring to mar-ket a complete Bosch/Simpson Strong-Tie installation system, including adhesive and mechanical anchors, demolition and rotary hammers, and accessories. The venture will also provide joint jobsite training to install-ers and offer distribution partners a vari-ety of sales and marketing benefits, giving them access to the broadest commercial and residential product portfolio in the concrete construction industry.

Green Building Accelerates

The green building marketplace is accel-erating around the world, says a study by McGraw-Hill Construction. It indicates a shift in the global construction market which now views green as a business opportunity rather than a niche market. Firms report that their top reasons to do green work are client demand (35 per cent) and market demand (33 per cent). In contrast, the top reasons in 2008 were doing the right thing (42 per cent) and market transformation (35 per cent). Harvey M. Bernstein, vice-president, industry insights and alliances, at McGraw-Hill Construction, says the “existing building market is a ripe opportunity for green building, and we are seeing that play out in the market. It is clear that green is becoming an important part of the future landscape of the global construc-tion marketplace and firms will need to be prepared for that transition.”

Hand Tool Industry Recovering

Over the five years to 2012, revenue for the hand tool manufacturing industry is expected to grow at an annualized rate of 1.5 per cent to roughly $7.8 billion, says an IBISWorld industry analyst. Despite this steady annualized growth, the industry has experienced significant volatility in revenue over the past five years, thanks in large part to the housing crisis in mid-2007 and the subsequent economic reces-sion during 2008 and 2009, says Antonio Danova. With fewer homeowners, the need for hand tools lessened, as construction firms cut back on projects. Moreover, as the recession struck, existing homeown-ers and other general consumers curtailed spending on home improvement projects and associated hand tools and other equip-ment. This led to losses of 9.7 per cent and four per cent in industry revenue in 2008 and 2009, respectively. Nonetheless, as the economy gradually improved, consum-ers flocked back to the market to unleash pent-up demand for purchases of hand tools for home improvement projects they delayed during the recession. Additionally, growth in the big box retailers segment proved extremely beneficial for industry operators. While specialty retailers faltered during the downturn, big box retailers and other large home improvement store brands enticed customers with incentives. As consumers continue to purchase new hand tools, the industry will experience growth of 4.3 per cent this year. ❖

For FREE Daily News Alerts, visitwww.hirmagazine.com/home_improvement_news.php �

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in store

7HOME IMPROVEMENT RETAILING • December 2012

Castle Launches Anniversary Celebration

Castle Building Centres Group Ltd. has offi-cially launched its 50th anniver-sary celebration. It becomes the first Canadian buying group in the industry to reach this milestone. Over the past five decades, Castle has evolved to become an industry leader for independent lumber and building mate-rial dealers across the country. “When you look at milestones; milestones don’t just happen, they happen because of a combina-tion of things. Our business model is built on basic fundamentals that have stood the test of time – transparency, freedom, and profitability. We don’t want to be the big-gest buying group … but quite simply the very best,” says Ken Jenkins, its president. The 50th anniversary will resonate through all Castle events. In recognition of it, Castle has planned a number of initiatives. These include an anniversary week, starting June 1, and an open house in October 2013.

Three Home Hardware Locations Amalgamate

Three Home Hardware stores in northern Ontario – in Echo Bay, Bruce Station, and Sault Ste. Marie – are now collectively the Heritage Home Hardware Building Centre. Chris and Tammy Beilhartz, owners of the Bruce Mines and Echo Bay locations, recently purchased the corporately-owned Sault Ste. Marie location. While Home Hardware’s mandate is to have its locations dealer-owned, when no successor is avail-able it will corporately take over a location until such time that a dealer-owner is avail-able. Beilhartz says the additional store has effectively doubled the size of his business due to the volume of the Sault Ste. Marie location. With three locations, the acquisi-tion has also created a big shift in his man-agement style from a more hands-on style to one where he has had to develop more policies and rely more on the management staff in each location. “I’ve had to move away from being a micro-manager,” he says.

Canadian Tire Makes Cuts At Top

Canadian Tire will cut senior management

jobs as it works to reduce costs to cope with what it expects to be an even more competitive retail landscape in Canada. The company says at least five executives will be leaving. Those departing include executive vice-presidents of customer experience and automotive, technology and supply chain, and corporate development. The changes give the company an opportunity to further streamline its structure and reduce costs. In a report assessing the impact of Target’s arriv-al next year, Barclays Capital said Canadian Tire is among the retailers most at risk.

First Quebec Store Opens

Williams-Sonoma has opened its first store in Quebec. Located in Laval, QC, the new store marks Williams-Sonoma’s eighth loca-tion in Canada and will be the first to show-case a brand new store design. The new store design includes interactive features that will engage customers’ sense of taste, touch, and smell. Demonstration stations through-out the store will allow for quick and easy access to the latest cooking tools, electrics, cookware, and cutlery, enabling customers to experience and test products. In addition, the new store layout is designed to make shopping even easier, with several terminals where customers can complete purchases throughout the store.

Target Anticipates $6 Billion In Sales

Target anticipates that long-term financial expectations of opening in Canada will contribute $6 billion in sales by 2017 as part of a larger company goal of deliver-ing $100 billion or more in sales and $8 billion or more in earnings over the same time frame. It will open the first of its 125 stores in the Toronto, ON, area in 2013, with more openings slated for 2014. While that level of productivity is roughly equivalent to current U.S. store performance, Canadian stores are expected to achieve higher sales per square foot because the acquired Zeller’s leases are located in more densely popu-lated urban markets than the typical U.S location. What Target has going for it in

Canada is that these shoppers already have a high degree of familiarity with the brand and many already cross the border to shop its stores, says Anthony Fisher, president of Target Canada, in ‘Target Supplier News.’ Competitive issues can’t be overlooked, but the retailer’s biggest rival in Canada will be Walmart and it has competed effectively with its larger rival for decades, he says. The company’s biggest challenge won’t be attracting shoppers, but, given all the hype surrounding its imminent arrival, it will be meeting or exceeding shopper expectations to ensure they return often.

RONA’s Dumont Earns Green Living Award

Normand Dumont, v i c e - p r e s i d e n t , sustainable devel-opment, at RONA inc., has earned a Green Living ‘2012 Excellence in Corporate R e s p o n s i b i l i t y (ECR) Award’ in the retail, pack-aged goods, con-sumer brands cat-egory. His leader-ship in sustainable development has led to the implementation of a responsible procure-ment plan and a communications program to raise consumer awareness about eco prod-ucts. The corporation now offers the RONA ECO line of products which is evaluated on life-cycle methodology developed by CIRAIG (Interuniversity Research Centre for the Life Cycle of Products, Processes, and Services). The program is having a positive and lasting impact on both suppli-ers and consumers, helping them to change their behaviours and move toward more responsible habits. He was appointed to the position in August 2012. The Excellence in Corporate Responsibility Awards were developed to honour and celebrate corporate Canadians for outstanding work and dedica-tion towards creating sustainable and ethical practices within the business framework. ❖

Normand Dumont

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HOME IMPROVEMENT RETAILING • December 20128

it’s your money

Lowe’s Lowe’s Cos.’ third-quarter net income surged 76 per cent, helped by lower costs and higher revenue. It earned $396 million for the three months ended November 2, compared with $225 million a year ago. Revenue rose two per cent to $12.07 billion from $11.85 billion. Transactions below $50 were up about 1.3 per cent and trans-actions above $500 were up about 2.5 per cent. Strong categories included lumber and cabinets and countertops. Lowe’s has been retooling its pricing strategy and last summer returned to offering permanent low prices on many items across the store, instead of offering fleeting discounts.

RONA During the third quarter, RONA inc. had net income of $33.1 million, down from net income of $47.8 million a year earlier. The unfavourable change is due to a significant increase in sales of building materials with a lower margin and to the deterioration in the renovation and construction market across the country. The drop in sales, coupled with more intense competition, put pressure on gross margins.

Home Depot Home Depot had third quarter sales of $18.1 billion, up 4.6 per cent from the same period last year. Comp-store sales increased 4.2 per cent overall. Net earnings of $947 million were up 1.4 per cent from $934 mil-lion in the year-ago quarter. On an adjusted basis, the company’s net earnings rose 23.3 per cent to $1.1 billion. The increases are believed to be the start of the “path toward the healing of the housing market,” says Frank Blake, chairman and CEO. At the end of the quarter, the company had a total of 2,250 stores in North America.

Canadian Tire Canadian Tire Corp had higher revenue for the third quarter ended September 29. The company’s results benefited from the finan-cial services segment as higher credit card receivables increased revenue and operat-ing expenses fell. But retail income before income taxes declined slightly. Performance was weakest at the flagship Canadian Tire chain, where sales at established stores fell 0.2 per cent, partly reflecting a soft market for automotive parts and service. Income

before income taxes edged down 0.1 per cent to $105.6 million in the retail division, but rose 14.8 per cent to $73.7 million in financial services. Revenue rose 4.6 per cent to $2.83 billion.

Taiga Taiga Building Products Ltd.’s consolidated net sales for the quarter ended September 30 were $315.9 million compared to $278 mil-lion in the same period last year. The 13.6 per cent increase in sales was largely due to higher commodity prices. Net earnings for the quarter were $3.8 million compared to $3.3 million in the same period last year, an increase of 14.2 per cent.

Stanley Black & Decker Stanley Black & Decker Inc.’s earnings fell to $115.2 million from $154.6 million a year earlier. Revenue rose six per cent to $2.79 billion. Its third-quarter margin fell to 36.2 per cent from 37 per cent, mainly because of shrinking margins in its construction and do-it-yourself segment, which includes power and hand tools. The

company’s industrial and security division commands higher margins, but made up a lower portion of sales in the latest quarter.

Sears Canada Sears Canada Inc.’s third quarter results show total revenues of $1,037.5 million compared to $1,113.2 million for the same period of 2011, a decrease of 6.8 per cent. Same store sales decreased by 5.7 per cent. The net loss was $21.9 million, compared to a net loss of $44.1 million last year.

True ValueTrue Value Corp. had third quarter revenues of $448.9 million, an increase of 0.7 per cent from $445.7 million for the same period in 2011. Its quarterly net margin of $15.4 million was down 14.9 per cent from $18.1 million a year ago. The revenue increase is due to strong sales in the farm and ranch category, the company’s partnership with Benjamin Moore, and strong increases in True Value’s manufactured proprietary paint brand sales, says Lyle Heidemann, its presi-dent and CEO. ❖

COMPANY SYMBOL OPEN HIGH/LOW 52-WEEK INDEX

Canadian Tire Corp. CTC 79.22 82.69 – 70.35 TSXCanWel CWX 2.55 2.92 – 1.66 TSXDow Chemical Co. DOW 30.88 36.08 – 25.225 NYSEFastenal Co. FAST 42.75 55.05 – 37.61 NASDAQGeneral Electric GE 21.61 23.18 – 16.3 NYSEHome Depot HD 62.33 65.92 – 38.84 NYSELouisiana-Pacific LPX 17.16 17.97 – 7.09 NYSELowe’s Cos LOW 34.51 36.47– 24.04 NYSEMasco Corp. MAS 15.94 17.19 – 8.57 NYSENewell Rubbermaid NWL 21.9 22.49 – 14.64 NYSEOwens Corning OC 35.41 38 – 24.69 NYSERichelieu RCH 35.1 35.97 – 26.48 TSXRONA RON 11 14.49 – 8.94 TSXSears Canada SCC 11.98 14.24 – 9.76 TSXSherwin-Williams Co. SHW 147.03 159.8 – 82.35 NYSEStanley Black & Decker SWK 72 81.9 – 58.59 NYSETrex TREX 37.61 40.81 – 21.48 NYSEUSG Corp. USG 25.82 28.208 – 8.2 NYSEWal-Mart WMT 69.05 77.6 – 57.18 NYSEWest Fraser WFT 70.98 72.75 – 37.69 TSXWD 40 WDFC 46.8 54.42 – 39.25 NASDAQ

As of December 14, 2012

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9HOME IMPROVEMENT RETAILING • December 2012

priVate wealth

The primary function of a last will and testament is to name the ben-eficiaries of the assets of your estate. However, under some cir-

cumstances, it may be good planning to include a trust in your planning.

A testamentary trust is an arrangement whereby upon your death, property is man-aged by one person on behalf of another. While testamentary trusts are set up as a result of death, another form of trust – an inter vivos trust –is set up while the settlor (person who ‘settles’ property in a trust) is alive.

While there are many and complex rea-sons for creating a trust, three important reasons include paying less tax, expediting the transfer of assets upon death while also reducing probate fees, and determining how the inheritance is to be spent by the beneficiary.

Less Tax, Fewer Fees

Incorporating a trust into your will can result in substantial tax savings for an individual when com-pared to the same indi-vidual personally owning the property held in a trust. In general, trusts are con-sidered to be a separate and individual ‘taxpayer’ for purposes of the Income Tax Act. Therefore, income earned on trust assets is taxed as though the income was earned by a person separate from the settlor, trustee (person who holds and administers the trust on behalf of the beneficiaries), or ben-eficiaries and is subject to the same graduated tax rates as would be an individual. This can result in overall tax reductions for beneficia-ries who already pay income taxes at high marginal rates.

Depending on the type, setting up a trust can facilitate a fairly quick transfer of assets on death because, generally speaking, unlike wills, trusts are not subject to the public probate process. As such, inheritances in trust are also not subject to probate fees and

Trusts Can Reduce Taxeseign trusts. Because there are benefits to both testamentary and inter vivos trusts, persons considering setting up a trust would benefit from sound financial and estate planning and advice to ensure their intentions and wishes are best served and carried out to realize the maximum benefits sought.

Trustees: Who Can You Trust?

Once the decision is made to set up a trust, choosing a trustee becomes a vital and important consideration. Trustees have many responsibilities ranging from

administering the trust to making investment decisions to maintain-ing property (if the trust includes real estate). It can involve, among other things, opening bank accounts, mak-ing payments to the beneficiaries, maintain-ing financial records, and filing income tax documents. Depending on whether the trust includes discretion-ary power, the trustee may need to consider the amounts, timing, and type of distributions and the circumstances of the individual beneficiaries.

The trustee you choose must have the

time, knowledge, skill, and desire to be the trustee. While your trustee can be a friend or family member, depending on the size and complexity of the trust, it might be beneficial to consider a corporate trustee. Certainly in situations where objectivity is required – such as where there is family conflict or complex issues – a corporate trustee can make good practical sense.

Regardless of your choice of trust and trustee, the laws governing trusts and their related taxation are complex. Before imple-menting any trust, advice from legal and tax professionals should be obtained. ❖

Source: CIBC Private Wealth Management

can result in substantial savings to the estate and/or beneficiaries.

Another benefit when creating a trust is that the settlor can, if desired, set out the terms of how and when the inheritance will be spent. For example, a settlor can determine that the trust funds are to be used by the benefi-ciary solely for university tuition or for living expenses. As well, when planning a trust, the inheritance can be set up to be paid out over time rather than in a lump sum, thereby allow-ing for such things as ongoing living expenses.

While offering all of these benefits, inter vivos trusts also include benefits such as

income-splitting, estate freezes, the forma-tion of alter ego and joint partner trusts, and foreign trusts, which all entail the transfer of assets during the settlor’s lifetime. However, there are significant differences in the tax rates that apply to testamentary trusts versus inter vivos trusts. While testamentary trusts are subject to graduated personal marginal tax rates, inter vivos trusts are taxed at the top personal marginal tax rate.

Although testamentary trusts offer the benefit of graduated tax rates, inter vivos trusts can offer the added benefits of income-splitting, estate freezes for owners of corpo-rations, the formation of alter ego and joint partner trusts, and the establishment of for-

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HOME IMPROVEMENT RETAILING • December 2012 1111HOME IMPROVEMENT RETAILING • December 2012

Delivering On The Sales Promise

Sales’ is much more than provid-ing a product or service. It is about delivering a promise to the customer. Unfortunately, many

companies have no idea what their sales promise is.

A sales promise goes way beyond a tan-gible deliverable. It’s about the customer’s interaction with your company throughout the sales cycle, a sense that everyone from every department is aligned on customer satisfaction. It’s about the service and inter-action with the company and making cus-tomers feel confident that your company can deliver the results the customer wants and exceed expectations.

So, what’s your company’s sales prom-ise? Following are some suggestions to make your sales promise clear.

Define Your Promise To deliver on a promise, you first have to

know what the promise is. Get the various departments together and ask them, ‘What do we want our customers to experience as a result of working with us? What do we want our promise to be?’ Listen to the issues or expectations of each department.

Having this conversation with the various departments as a group allows people to see how they work together to deliver. Of course, the billing department wants to send out accu-rate invoices, the shipping department wants things shipped on time, and the salesperson wants the customer to be happy. But if no one sees how their process impacts another department’s process, then it will break down as a whole along with the sales promise.

After defining the promise, pay attention to the small details of it. Look at customer callback times, product turnaround times, billing cycles, shipping times, customer service, etc. Be specific. Simply saying, ‘Call customers back quickly’ is not spe-cific. What is quickly? Without the details defined, it’s easy to break the sales promise.

Provide Ongoing Training Once you have the promise defined, pro-

vide ongoing training on what it means and

how everyone can work together to deliver on it. Educate new hires on the details and ensure current employees are always on board with the message.

Make sure everyone can clearly com-municate what the sales promise is and how they play a role in fulfilling it. Make it clear that everyone is responsible for fulfilling some part of the sale and impacting on the customer’s experience.

Ensure everyone holds each other accountable for delivering on the promise and train them on how to do so.

Promote The Sales Promise To Customers

From a customer’s perspective, a good sales promise is something that resonates. Perhaps the promise you created gives cus-tomers ‘the easiest shopping experience ever’ or ‘the best casual dining atmosphere.’ Whatever it is, promote it in a way that speaks to what the customer truly wants and your employees will be empowered to

use the processes to meet and exceed the customers’ expectations.

For example, Southwest Airlines has a sales promise to get you where you need to go on time. Everyone in the organization knows the promise and their role in fulfill-ing it. When a plane is at risk of being late, you’ll see everyone – even pilots – pitching in, loading baggage and doing what they can to get the plane out on time. That’s the power of a unified sales promise.

When the people within your company focus on the fact that everyone is involved in the sales process, creating and living by a sales promise is much easier. If you want to grow sales and create a following of customers who are eager to do business with you, get started on your sales prom-ise. The sale is just the start, the promise is ongoing. ❖

Victor Arocho is an executive coach, speaker, and managing partner with Potential Sales & Consulting (www.victorarocho.com).

‘By: Victor Arocho

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12 Go to page 3 CONTENTS

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13 Go to page 3 CONTENTS

HOME IMPROVEMENT RETAILING • December 2012 1113HOME IMPROVEMENT RETAILING • December 2012

Focus on customers

Customer Satisfaction RequiresMore Than Satisfactory Service

Customer satisfaction levels are decreasing while customer frus-tration levels are increasing. It’s become too common for an

employee to respond to an inquiry from a customer as if their request is an imposition. As a result, potential buyers often feel com-pelled to apologize for the inconvenience their need for assistance has caused.

While not the norm, a focus on the customer’s needs is refreshing as in the example of a salesperson searching for a non-essential item as if they were helping a parent find a lost child. Perhaps this kind of customer service is considered excep-tional because it is more of the exception than the rule.

Simple PracticesGood customer service requires several

simple practices. They include:◆ Set Expectations

It is probably true that common sense isn’t so common any more. In the context of customer satisfaction, that means that client service expectations need to be established and not assumed. As the world becomes increasingly more electronic, it is even more important that a focus on personalization is not deleted from ‘business to end-user’ relationships. Defining appropriate actions and attitudes will ensure a clear definition of what is and isn’t acceptable to protect the reputation of the company.◆ Provide Training

Highlight guidelines that identify appropriate resolutions to common issues to help employees learn and develop. Depict examples of typical scenarios and suitable end results then practice them through small group application exercises. These activities will enhance long-term behavioural modification and reduce turn-over. ◆ Take Action

It has been said that there is no advance without chance and where there’s no guts,

there’s no glory! Equally true is that insub-ordination requires ramification. While it can be difficult to exercise authority for non-compliance to customer satisfaction expectations, the impact of not taking action

can be insurmountable. Corporate com-placency is contagious and when one’s lackadaisical attitude is overlooked, the interpretation by their associates is that it is acceptable behaviour.

The benefits of focusing on exceptional customer satisfaction are numerous.

Buying ExperienceUltimately, the buying experience will

be positively influenced. Discounts and incentives are easy to find, but it is the customer satisfaction factor that encourages a decision to invest in additional items or upgraded features.

Customers will frequent an establish-ment, even if a comparable product or service can be purchased for less money and/or at a location that is more convenient to get to. Why? Because of the service they receive and their effortless customer experience.

And, no, the customer is not always right; but the customer does always have the right to make the final buying decision. Therefore, the way a prospective buyer is treated really does matter with respect to their initial buy, their future purchase considerations, and for the story they tell of their experience. ❖

Diane Ciotta is the founder of The Keynote Effect.

By: Diane Ciotta

‘As the world becomes increasingly more elec-tronic, it is even more important that a focus on personalization is not deleted from ‘business to end-user’ relationships.’

14 Go to page 3 CONTENTS

HOME IMPROVEMENT RETAILING • December 2012HOME IMPROVEMENT RETAILING • December 201214

FEATURED ARTICLE

in the face of slow economic recovery.” The company has remained focused on deliver-ing the best program for independents in the industry to its dealer-owners of close to 1,100 stores. “There have been many positive developments in 2012 that have contributed to our success and that will position us for success in the future,” says Straus.

“Our dealer development team continues to aggressively promote our program to prospective dealers, open new locations, and help existing dealers expand and renovate in an effort to grow our market share and strengthen our network. This is especially important as the home improvement retail sector embarks on a new period of consoli-dation and increased competition. We con-tinue to improve our technology, enhance our distribution system, and put into place new innovative services across the company to help our dealers run more efficiently so they can continue to put their customers first. The new Home Credit Card has been very successful and our dealers are receiv-ing positive feedback from both homeown-ers and contractor customers.

Home Hardware’s approach for 2012 was one of cautious optimism, assuming that the year would bring modest growth, but that the global economic challenges would impact the Canadian economy to some degree, says Paul Straus, president and CEO, Home Hardware Stores Limited.

“Therefore, we continued to prioritize cost control while pursuing several strate-gic initiatives to improve efficiencies and increase production. This strategy, combined with Home Hardware’s unique business model, has allowed us to maintain stability

“Private label is a growing market and Home is well-positioned to take advan-tage of consumer appetites while providing increased profit margins to dealers. The company now offers more than 10,000 exclusive items and private label prod-ucts, designed to appeal to cost-conscious consumers who trust the Home brand to provide well-priced, top quality products,” says Straus.

As we look ahead to 2013, we see oppor-tunity for steady growth. Unlike competitors who need to manage the expectations of outside investors, we will remain focused on the success of our dealers as they work to grow their businesses.

“As always, the emphasis for Home dealers is on customer service and we are constantly working to help our independent dealers meet the needs of a wide cross-section of customers who are looking for innovative products, services, and ways of interacting with their home improvement retailer. This, combined with competitive pricing, positions Home Hardware well for growth in 2013 and beyond,” says Straus.

W hile the year carried forward the memories of the volatility and turbulence of 2008 to 2011, retailers entered 2012 with optimism – albeit a cautious optimism. With strategies in place to stay cost

efficient, new plans were implemented that resulted in larger returns in rebates, successful credit card programs, building cen-tre expansions, and brand platform launches.

The year was certainly not without change. From an early acquisition to a takeover bid, the year ended with a prominent resignation of a long-term industry executive.

For 2013, retailers are expecting business as usual – and growth. Leaner and more efficient, their optimism has grown throughout 2012 and the coming year promises expansion and evolving strategies for continuing their competitive edge.

2012: A Year Of Cautious Optimism

18th Annual Special Report

Paul Straus

President & CEO

Home Hardware Stores Limited

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16 & 17 Go to page 3 CONTENTS

Building business better,

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Building business better,

together.We have the right

business model and brand for the right Market.

The Largest Dealer Support Team in Canada

We support home-grown success by standing behind local

businesses and communities!

WHEN CANADA WINS

WE ALL WIN

The RONA business model is unique, only RONA offers such a wide-range of business ownership. RONA is focused on theneeds of marketplace; the new Proximity model store offersthe best selection of hardware and LBM programs in the industry. Our supply chain is unparalleled and offers a range of choice for any business.

For more information 1-888-461-7662 ext. 1211

Today TRUSERV CANADA distributes to over 755 independent retailers across Canada, offering a simple solution to compete.

For more information 1-800-665-5085

Contractor FirstTM is a new banner and exclusive store concept that allows dealers to clearly state their commitment to serve contractors in their market.

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TRUSERV-RONA Ad2_Layout 1 11/27/12 11:45 AM Page 1

18 Go to page 3 CONTENTS

HOME IMPROVEMENT RETAILING • December 201218

FEATURED ARTICLE

the group. This year will be the fifth consec-utive year where Castle operating expenses as a percentage of rebates paid to members will go down. “It validates the position that Castle is the most efficient buying model in the industry,” says Jenkins.

Two primary areas the company is focusing on for 2013 are price increases and product availability. Over the next year, the modest recovery taking shape in the U.S. housing sector will continue to place upward pressure on building materi-als with continued attempts to gain price improvement by manufacturers. As these price increases continue, supply challenges may evolve based on significantly reduced capacity in all manufacturing segments. Independent dealers will need to pay close attention to these dynamics over the next few years.

Turmoil in some competing business models has Castle well-positioned for con-tinued growth in both its LBM and com-mercial divisions, says Jenkins. The options for independents seeking a buying group affiliation that are non-distribution based and operated are becoming narrow. Castle provides a unique platform for independents that provides true national coverage com-

Castle Building Centres achieved record purchase volume levels in 2012. It has experienced double-digit growth in its purchase volume and attributes its suc-cess to the growth of its membership and the competiveness of its rebate programs, says Ken Jenkins, president. He adds that the company’s focus on providing the members of Castle with unparalleled cost positions on both commodity build-ing materials and hardware has resulted in significant organic growth is several categories.

The company’s strategy of staying lean and efficient will provide Castle members the largest return in rebates in the history of

bined with industry leading programs and services.

As Castle enters its 50th anniversary year, the prospects for business have never looked better. “Our stability, strength of member-ship, supplier relationships, and head office leadership are a perfect formula for contin-ued success,” says Jenkins.

“In 2012, our store in St-Antonin, QC, joined the Castle Building Centres group and this has enabled us to become a building centre. Along with our regular clientele, we now service construction companies as well. So, 2012 has been a successful year for us. Our stores have grown 21.6 per cent. We now offer more products and materials and better quality than previously, says Jean-Guy Quann, general manager, Bargain Building Centres.

“Our business plans for 2013 are to expand our company through our three other stores –Lachute and Gatineau, QC, and St-Isidore, ON – by becoming Castle members as well. Our goal is to ensure our clients are satisfied. By becoming a building centre, we have cer-tainly increased our clientele and our mission is to provide our clients with more products and material and to continue to provide excellent service. We are anticipating 2013 will be a great year like 2012.”

Over the last 73 years RONA has built a valuable corporation with a nationwide foot-print through our dedicated dealer-owners and employees. The company has grown through strategic acquisitions that expanded its operations, consolidated the market to

Ken Jenkins

President

Castle Building Centres Group Ltd.

Jean-Guy Quann

General Manager

Bargain Building Centres

DominiqueBoies

Acting President and Chief Executive

Officer

RONA Inc.

19 Go to page 3 CONTENTS

Home Improvement Retailing: How have you helped your shareholders come through the economic challenges of the past four years?Bob Holmes: TORBSA has stayed close with its supplier partners, maintaining a strong and healthy relationship with each and ensuring open lines of communication. Additionally, we have provided our vendors the opportunity to make presenta-tions of product line additions and improvements through our monthly shareholder meetings.

HIR: What are you hearing from your members these days?Holmes: Margins have been under pressure, although we have been able to maintain and in some instances grow our share as our shareholders compete in the commercial and new housing markets. We really don’t see a turnaround in margins for another year or so.

HIR: In terms of your membership, what are you looking for?Holmes: We look for shareholder partners and prospective shareholders should bring purchase volume and value to the buying group through their market position. The reciprocal is that we provide the tools for them to successfully com-pete in their respective markets. A shareholder’s business could be a GSD (Gypsum Speciality Dealer), LBM (Lumber and Building Material Dealer), or Specialist, as each shareholder adds a different value and derives different benefits from their membership.

HIR: What sets your members apart from those of the other buying groups?

Holmes: TORBSA is a shareholder owned buying group of independent building sup-ply companies. One of the major differences between TORBSA and the other buying groups lies in the answer to the question “What should your buying group tell you?” If you ask any of our shareholders, their answer is “Everything!” At TORBSA, that means being seamless to the shareholder. Our shareholders have full knowl-edge of our marketing programs and they have direct contact with the general manager to address any issues at any time.

HIR: What programs do you offer to your members?Holmes: TORBSA is a no frills group. Our main objective is to provide our shareholders with competitive marketing programs from key suppliers. We also focus on building strong rela-tionships between our shareholders and our sup-plier partners. Our monthly meetings provide for ongoing training and are a platform for the introduction of new products and procedures.

On a professional basis, TORBSA offers each shareholder the opportunity to participate on negotiation committees, as well as put their name forth for election to our board of direc-tors. Shareholder participation on our board has lead to the election of eight different presi-dents over the last 10 years.

HIR: Where do you believe TORBSA will be five years from now?

Holmes: TORBSA will continue to be a strong group of independent building supply com-

panies in a marketplace that has progressed through the recovery phase of the business cycle and is experiencing increased growth in volume and shareholder members. Our focus will still be on competitive programs that uti-lize our increased volumes, as well as building and supporting key relationships.

HIR: Looking back on the past year, what would you say are the most significant events for TORBSA?Holmes: One would be the hiring of Ken Pompey as our business development man-ager. Ken has many years of experience in the building material/buying group business. His job is to tell the TORBSA story – the story of a buying group model that has proven success-ful since its inception in 1966, one that many others have tried to emulate.

As well, the recent decision by Canac to join TORBSA is significant. It doubles the size of TORBSA’s retail sales by its members and significantly expands our presence in Quebec.

HIR: What is your overall impression of the state of the industry and what new opportuni-ties exist for TORBSA?Holmes: In 2012, the definition for growth was ‘flat.’ In 2013, the definition for growth will change from ‘flat’ to ‘flat to down.’ But we feel that in subsequent years, growth will actually reflect ‘growth.’

HIR: Looking back over your time with TORBSA, what do you believe is your most significant accomplishment?Holmes: Managing change. Whilst many of our shareholder owners are now second and third generation, I have successfully retained the focus of our founding members. TORBSA continues to support and promote the building of relationships while pushing technological change with the shareholders. We continue to do this and, at the same time, we maintain the conduit to our supplier partners.

HIR: How is TORBSA being positioned to attract new members?Holmes: Through the hiring of Ken Pompey as our business development manager which allows TORBSA to tell its story.

HIR: What are the key elements that make TORBSA a successful buying group?Holmes: The key elements of our success are a combination of independent dealers and our mix of GSD, LBM, and Speciality, as well as our core commitments to transparency, relationship build-ing, low cost of membership, having shareholders versus members, holding monthly meetings, pur-chasing directly from manufacturers, participat-ing in negotiations, and ‘Knowing Everything.’

TORBSA (Toronto Building Supply Association) was founded in 1966 and today has shareholders in Ontario and Quebec.

Not only a long standing trade organization itself, but looking at the list of shareholder members, many are now being managed by second and, in some cases, third generation family members and they have enjoyed many years of success. From its beginning TORBSA fostered the development of strong relationships with supplier partners through monthly shareholder meetings and the hosting of corporate events, as well as involving the shareholders in the negotiation process.

With a need for direction and support, Ted Howes was hired as general manager in 1982, and an office was established. Over the succeeding 18 years Ted spun the TORBSA story and with his guidance it became a strong niche group of companies (GSD, LBM, and Specialty).

In 2000 the leadership role was passed along to Bob Holmes. Faced with an ever-changing marketplace and the consolidation of many of the other buying groups, TORBSA has chosen to stay independent, but, at the same time, embrace change and look to adding shareholder members.

TORBSA shareholders feel that the group’s practice of full disclosure; shareholders involvement in negotiations, and the close relationships developed with its supplier partners contributes to the shareholders’ individual success and contributes positively to their bottomline.

BoB HolmesGeneral Manager

Strong RelationshipsTORBSA’s Business Model

Bob Holmes – Bob@torbsa.comKen Pompey – Ken@torbsa.com

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HOME IMPROVEMENT RETAILING • December 201220

FEATURED ARTICLE

TIM-BR MART began 2012 – its 45th year in business – with the purchase of IRLY Distributors by Chalifour Canada. “Our dealers are now enjoying the benefits of a complete support system for indepen-dent entrepreneurs,” says Tim Urquhart, president and CEO. Chalifour Canada brings an enhanced hardware offering with coast-to-coast distribution and strong fill rates. At the same time, TIM-BR MART continues to ensure that dealers are offered building materials and hard-ware vendor-direct programs that are the best in the industry.

In 2011, TIM-BR MART launched two inaugural buying shows – the TIM-BR

introduce scale and efficiencies, and opened stores of different formats to support our leading position across Canada.

At the end of 2012, we announced we will focus our efforts and resources on three strategic priorities:◆ leveraging the strengths of the corpora-

tion’s core businesses◆ growing key customer segments through

a more compelling value proposition◆ unlocking the profit potential of a simpli-

fied business modelLeveraging the strengths of our core

businesses implies that RONA will be look-ing into disposing of non-core assets and redeploying capital to further leverage core assets.

These priorities will further refine our business model and position us to accelerate value creation for its stakeholders. RONA’s nationwide growth did not come without a certain level of complexity. The focus on our three strategic priorities will enable us to simplify our business model, reconnect to our roots as one of Canada’s best dis-tributors, clarify the value proposition for our retail and professional customers, and, therefore, enable us to maximize the value of our core businesses.

MART National Buying Show and the Chalifour Retailer Buying Expo. Both were extremely successful, selling out all avail-able vendor booth space. “We saw strong increases in registration for both shows in 2012 and expect further growth in 2013,” says Urquhart.

Earlier this year, the company launched its ‘You Can Do Anything’ brand platform. It’s the largest media campaign in the company’s history and will use TV, radio, flyers, and in-store promotional materials to drive traffic into dealers’ stores. TIM-BR MART also has some strong brand positioning initiatives to complement its International Ice Hockey Federation sponsorship in 2012 and beyond, says Urquhart.

In March, TIM-BR MART held its inaugural ‘Emerging Leaders Summit.’ Young, up-and-coming leaders spent three days networking and learning together. With a new generation of dealers about to enter the market, the company is focused on succession planning and helping them make the transition to leadership. “The future of our industry depends on them,” says Urquhart.

In addition, TIM-BR MART has a stra-tegic plan in place to drive growth into 2015. “With goals around purchases, sales, fidelity, program participation, and com-munication, we are well poised to help dealers be successful in their markets.” As a group, sales have increased year over year as dealers have grown their busi-nesses. Part of the success follows the opportunity dealers now have to invest in their own company. “We have structured the company in such a way that all dealers have become shareholders, allowing them to invest in themselves. They will reap the benefits of the assets and profits of the group,” says Urquhart.

Amidst ongoing global economic uncer-tainty, 2012 for TORBSA was a year of pri-marily maintaining status quo, while enjoy-ing gains in market share in some areas. Through a combination of preserving what works while introducing some change, we

BobHolmes

General Manager

TORBSA Buying Group

TimUrquhart

President & CEO

TIM-BR MART Ltd.

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21 Go to page 3 CONTENTS

22 Go to page 3 CONTENTS

HOME IMPROVEMENT RETAILING • December 201222

FEATURED ARTICLE

PartSource, Sport Chek, Sports Experts, Atmosphere, Hockey Experts, Fitness Source, S3, Nevada Bob’s Golf, Intersport, Athlete’s World, National Sports, The Tech ShopOutlets In: All provinces and territoriesPrivate Label Lines: NOMA, Yardworks, Mastercraft, MotoMaster, Debbie Travis Collection, Hero, Blue PlanetDealer Education Initiatives: Automotive university, various training programs in key categories such as tires and paintMarketing Strategies: Weekly flyer to 11.5 million homes across Canada; radio and television advertising, credit card state-ments, newsletters to credit card members, online at www.canadiantire.ca, eFlyers, direct email campaigns to eFlyer subscrib-ers; social media.

Castle Building Centres Group Ltd.

100 Milverton Dr., Ste. 400, Mississauga, ON L5R 4H1Phone: 905-564-3307Fax: 905-564-6287eMail: kjenkins@castle.caWebsite: www.castle.caRetail Banners: Castle Building Centres, CBS (Commercial Building Supplies), Castle SpecialtyMember Stores: 289Outlets In: All provinces and territoriesNew Members in 2012 (As of September 1): 14 new member locationsAffiliates: Epic Alliance Group

Bargain Building Materials Ltd.

125, rue du Carrefour, Saint-Antonin, QC G0L 2J0Phone: 418-868-0404Fax: 418-868-0567eMail: bureau.administratif@mabp.ca Website: www.mabp.ca Retail Banners: Matériaux à Bas Prix Uee / Bargain Building Materials Ltd. Castle member since May 2011 Member Stores: 4Outlets in: Québec (Lachute, Gatineau, and Saint-Antonin), Ontario (Saint-Isidore) Affiliates: Castle Building Centres Group Consumer Sales: 93 per centContractor Sales: 7 per centMarketing Strategies: Business model pro-vides, among other things, strict cost control and high stock turnover. This model is based on purchasing and pricing policies. It offers its clients two concrete ways to save money – by using top quality materials at very low prices and industry seconds at even lower prices.Highlights of 2012: Transformed Saint-Antonin, QC, store into a complete renova-tion centreContact for Membership Information: Jean-Guy Quann, General Manager.

Canadian Tire Corporation2180 Yonge St., Toronto, ON M4P 2V8Phone: 416-480-3000Website: www.canadiantire.caRetail Banners: Canadian Tire, Mark’s,

Consumer Sales: 30 per centContractor Sales: 70 per centPrivate Label Lines: Castlegard, All Install, Castlecare, Castlegreen Dealer Education Initiatives: Castlecare, Home Improvement Retail Television, Castle store development and growth pro-gramMarketing Strategies: Focused buying approach ensures member profitability with diversified business model that appeals to the LBM, commercial, and specialty seg-ments of the industry; focused on core building materials and hardwareHighlights of 2012: Continued member growth in all regions of the country with 14 new locations added.Contact for Membership Information: Les Gillespie, British Columbia; Alan Schoemperlen, Prairies; Bruce Holman, Ontario; Robert Legault, Quebec; Sandy Welsh, Atlantic; Ron Craighead, Commercial (CBS)

Delroc Industries Ltd.5955 205A St., Langley, BC V3A 8C4Phone: 604-533-0599Fax: 604-533-9192eMail: contact@delroc.com Website: www.delroc.com Member Stores: 118Outlets In: British Columbia, Yukon, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, U.S.New Members in 2012 (As of September 1): 7

the company holds benefits for not only GSD dealers, but also those in LBM and specialties. This is very much our direction for the future.

A second change was our recent partner-ship with Canac. Not only does this move double the size of TORBSA’s retail sales by its members, it also significantly expands the group’s presence in Quebec, bringing us to 28 members and 60 locations – 22 of which are Canac stores.

Looking forward, our success lies in our shareholder partners and with an active view to including GSD, LBM, and Specialties, and with a dedicated business develop manager, we will continue to seek out shareholders that bring purchase volume and value through their mar-ket position, regardless of their specific industry. In return, we remain committed to providing the tools for our shareholders to successfully compete in their respective markets.

Into 2013 and beyond, TORBSA will continue as a strong group of indepen-dent building supply companies in a mar-

have not only held steadfast on our year, but have positioned ourselves well for 2013 and beyond.

We remain committed to maintaining and building upon the strong relationships we’ve developed, both with our supplier partners and our shareholders. We operate on true and complete transparency and keep the lines of communication wide open; this includes focusing on fostering relationships between our shareholders and our supplier partners and striving to provide our shareholders with competitive marketing programs from key suppliers. Our seamless approach encourages our shareholders to be a part of the negotia-tion process.

A key change to strongly positioning TORBSA for the future is the addition of Ken Pompey as our business development manager. With many years of experience in the building material/buying group busi-ness, he will represent the TORBSA story of a buying group model that has proven successful for several decades. He will be instrumental in getting our message out that

ketplace that will progress through the recovery phase of the business cycle and will experience increased growth in vol-ume and shareholder members. Our focus will remain on competitive programs that utilize our increased volumes, as well as building and supporting key relationships. Paramount to our continued success is to retain the focus of our founding members and supporting and promoting the build-ing of relationships while driving and encouraging technological change, and maintaining our transparency to our share-holder members. ❖

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13

FEATURED ARTICLE

HOME IMPROVEMENT RETAILING • December 2012 1123HOME IMPROVEMENT RETAILING • December 2012

BMR store conceptMajor New Customers: Matriaux Mingan, Groupe Yves Gagnon (St-Jean, QC), Dynaco BMR Témiscouta, Pierre Naud (Trois Rivières, QC), Matériaux Nomelbro (Disraeli, QC), MPM (Chipman, NB), Groupe Yves Gagnon (St-André Avellin, QC), Renovation Ste-Agathe (Ste-Agathe, QC)Contact for Membership Information: Jean Falardeau, Executive Vice-president

Home Hardware Stores Limited

34 Henry St. W., St. Jacobs, ON, N0B 2N0Phone: 519-664-2252 ext. 6676Fax: 519-664-1260eMail: lindsey.dietrich@homehardware.caWebsite: www.homehardware.caRetail Banners: Home Hardware, Home Hardware Building Centre, Home Building Centre, Home FurnitureMember Stores: 1064Outlets In: All provinces and territories New Members in 2012 (As of September 1): 14 new Home locations Affiliates: Alliance International LLCPrivate Label Lines: Active, Beauti-Tone, Designer Series, Beauti-Tone Natura, Coat,

Affiliates: BYCOConsumer Sales: 50 per centContractor Sales: 50 per centMarketing Strategies: Main objective is to provide maximum buying power for mem-bers at a minimal cost; along with Sexton and Allroc, a founding member of the new-ly-formed BYCO Group, a strategic alliance to strengthen its buying power and better position its members in an ever-increasing competitive marketplaceContact for Membership Information: John Physick, General Manager

Federated Co-Operatives Ltd.

401 22nd St. E., Saskatoon, SK S7K 3M9Phone: 306-244-3311Fax: 306-244-3403eMail: rob.williams@fcl.caWebsite: www.coopconnection.caRetail Banners: Co-op, ValuMasterMember Stores: 360Outlets In: Western CanadaAffiliates: Spancan, ILDCConsumer Sales: 70 per centContractor Sales: 30 per centPrivate Label Lines: Shopmaster, Rialto, Co-op, Turf-Care, Sportster, Sonic, HarmonieDealer Education Initiatives: Training provided in numerous areas including store management, POS, product knowledge, estimatingMarketing Strategies: 60 flyers created for Co-op storesContact for Membership Information: Rob Williams, Home and Building Supplies Sales Manager; Rod Baergen, Home and Building Supplies Director

Groupe B.M.R. inc.1501, rue Ampere, Ste. 200, Boucherville, QC J4B 5Z5Phone: 450-655-2441Fax: 450-655-1766eMail: info@bmr.comWebsite: www.bmr.comRetail Banners: BMR, BMR Hardware, Potvin BouchardMember Stores: 183Outlets In: Quebec, Ontario, New Brunswick, Nova Scotia, PEI, France (St. Pierre and Miquelon) New Members in 2012 (As of September 1): 8Consumer Sales: 65 per centContractor Sales: 35 per centPrivate Label Lines: BMR, EZE Tool, Evolution, Torkk, Eco Attitude, InspirationMarketing Strategies: Flyer program, radio campaigns, regional advertising, buying showsHighlights of 2012: Opening of the new

Signature Series, Benchmark, Benchmark Diy, Professional Series, Black Gold, Builder’s Hardware, Chelini, Classic, Country Hardware, Cover Up, Economy, Eurostream, Fisherman’s Paint, Generic, Home, Home Bond, Home Builder, Centre, Home Electric, Home Expressions, Home Furniture, Home Gardener, Premium, Home Handyman, Home Hardware, Home Painter, Home Pak, Home Plumber, Home Security, Homecrete, Homeworks, Ice Mover, Instyle, Crocker, Instyle Flooring, Instyle Holiday, Instyle Outdoor, Kitchen Value, Kuraidori, Mark’s Choice, Natura, Power Extender, Premier Collection, Professional, Reactor, River Trail, Snow Mover, Store N Lock, Survival, Tmt, Trademaster, Unival, Vac N Store, Vagabond, Value Items, Vincente, Weather Shield, Rust Coat, Wood Shield, Wood Shield BestDealer Education Initiatives: Semi-annual dealer markets and pre-market con-ferences; monthly video training (SBTV); webinar training; cross-country seminars; dealer portal (Connect) for information; best practice sharing and applications; regular dealer communications (weekly letter and retail news); recently launched

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13HOME IMPROVEMENT RETAILING • December 201224

FEATURED ARTICLE

Independent Lumber Dealers Cooperative

(ILDC)596 Kingston Rd. W., Ste. 100, Ajax, ON L1T 3A2Phone: 905-428-0700Fax: 905-428-0690eMail: ildc@ildc.comWebsite: www.ildc.comRetail Banners: 20Member Stores: 500Outlets In: All provinces and territoriesAffiliates: SpancanConsumer Sales: 40 per centContractor Sales: 60 per centDealer Education Initiatives: Tax plan-ning, EDI, retail strategiesMarketing Strategies: The members exchange flyer programs, etc., for informa-tion purposesContact for Membership Information: Andrew Battagliotti, General Manager

La Coop Fédérée4225, rue St-Joseph, Trois-Rivières, QC G9A 5L9Phone: 819-379-8555Fax: 819-379-5252eMail: accueil@lacoop.coopWebsite: www.unimat.caRetail Banners: La Coop, Unimat, Plus Vert, UnijardinMember Stores: 179Outlets In: Québec, New Brunswick, OntarioAffiliates: Spancan, ILDC, Interprovincial Co-opConsumer Sales: Distributors hardware and building materialsPrivate Label Lines: Home and garden, hand tools, automotive, paint and thin-ner, animal food, buildings material, farm product.Dealer Education Initiatives: Academy Co-op Centre (complete education program) seminar on staff training, marketing, elec-trical, plumbing, merchandising, customer service, building materials, maple grove products, garden centre, pesticides, paint and decoration, sales, benchmarksMarketing Strategies: Conversion of all La Coop to Unimat; agricultural, horticultural and maple grove flyers; customer strategies supported by radio and television advertis-ing programsHighlights of 2012: Developing Unimat banners was the main priority for the hard-ware and buildings supplies division. This is also the focus for year 2013.2012 Major New Customers: Unimat – Centre multi-services Radisson Inc., (Radisson, QC); and Centre de rénovation Ste-Marthe sur le Lac – Unimat Hugues Nepveu et fils, (Ste-Marthe sur le Lac, QC)

online, on-demand eLearning for dealers and staff which is interactive, measurable, and affordable; Young Leaders Group that meets online monthly to share ideas and discuss relevant topics that are currently affecting their businessMarketing Strategies: In 2012, Home Hardware Stores Limited was ranked #39 on the Brand Finance list of Top 50 Canadian Brands and #3 among private companies. Furthermore, we were ranked #6 of the Top 10 Retail Brands, a result of our successful business model, best-in-class program for independent hardware retailers, and wide-reaching marketing and advertising program. We support our inde-pendently owned stores through a strong national marketing program which includes flyers, catalogues, television advertising, sports venue advertising, online marketing, in-store marketing, contests, promotions, public relations, and charitable partner-ships. We continue to leverage our dynamic partnerships with Home Hardware’s kitch-en expert Anna Olson and gardening expert Mark Cullen as well as the Aeroplan pro-gram and the Top Notch Rewards program for contractors. Highlights of 2012: We pursued several strategic initiatives to improve efficien-cies and increase production this year while continuing to prioritize cost control to maintain stability in the face of slow economic recovery. We improved our tech-nology, enhanced our distribution system, and put new innovative services into place across the company to help our dealers run more efficiently and continue to put their customers first. Our dealer development team continued to aggressively promote our program to prospective dealers, open new locations, and help existing deal-ers expand and renovate. The new Home Credit Card has been very successful and our dealers are receiving positive feedback from homeowner and contractor customers. Dealers and their staff continued to focus on the needs of their local communities and provide expert advice and top quality products and services at competitive prices. Canadians enjoyed watching Terry Davis, executive vice-president and chief operat-ing officer, go undercover on the TV show ‘Undercover Boss Canada.’ An exclusive fashion show at the fall market launched the new Simon Chang ‘Oh Canada! Trend Colour’ paint collection. The collection includes 42 colours spread over six palettes and was inspired by Canada’s distinctive regional charms. It celebrates the haute shades of our home and native land.Contact for Membership Information: Dunc Wilson, Director, National Dealer Development

Contact for Membership Information: Jean-Claude Dionne

RONA inc.220, chemin du Tremblay, Boucherville, QC J4B 8H7Phone: 514-599-5900eMail: media@rona.caWebsite: www.rona.caRetail Banners: RONA, RONA L’Entrepôt, RONA Home & Garden, RONA Home Centre, Réno-Dépôt, Matériaux Coupal, Dick’s Lumber, Tru Serv, Blanc, MPH Supply, Better Bathrooms, Boutiques Eaudace, Don Park, NobleMember Stores: More than 800Outlets In: Across CanadaPrivate Label Lines: Close to 6,000 prod-uctsDealer Education Initiatives: IC4 ProgramMarketing Strategies: National TV ads, nationwide weekly flyers, national sponsorships with Maple Leaf Sports & Entertainment (Toronto Maple Leafs – NHL, Toronto Raptors – NBA, Toronto FC – MLS, the Toronto Marlies – AHL); the CFL, the Canadian Olympic Committee, 2012 London Olympic and Paralympic 2012 Summer Games, partnership with the Vancouver Canucks, partnership with the Calgary FlamesHighlights of 2012: RONA won vari-ous distinctions – Top 50 of the most socially responsible companies (MacLeans-Sustainalytics), 2012 Best Corporate Citizens of Canada of Corporate Knights; among the most attractive employers of Randstad Award, official presenter of the 100th Grey Cup Tour, launched its new revamped website rona.ca and new mobile applicationContact for Membership Information: Serge Vezina, Quebec; John Penner, Western Canada; John Longo, Ontario & Atlantic regions

Sexton Group Ltd46 – 1313 Border Street, Winnipeg, MB R3H 0X4Phone: 204-694-0269Fax: 204-694-4507eMail: admin@sextongroup.comWebsite: www.sextongroup.comRetail Banners: Sexton Group Ltd.Member Stores: 285Outlets In: All provinces and territories, FranceNew Members in 2012 (As of September 1): 23Affiliates: BYCOConsumer Sales: 70 per centContractor Sales: 30 per centDealer Education Initiatives: Quarterly regional meetings, yearly group meetings,

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25HOME IMPROVEMENT RETAILING • December 2012

FEATURED ARTICLE

Highlights of 2012: Acquisition of IRLY Distributors Ltd. by Chalifour Canada; national buying show in March sold out; launch of ‘you can do anything’ brand platformContact for Membership Information: Tim Urquhart, President & CEO; Jon Irwin, Vice-president Retail Services; Daniel Rioux, Directeur Général, Quebec & Regional Sales Manager, Ontario; Dave Dingwell, Regional Sales Manager, Atlantic; Brad Dixon, Regional Sales Manager, Western Canada.

TORBSA Limited2 Marconi Ct. Unit 13, Bolton, ON L7E 1E5Phone: 905-857-5811Fax: 905-951-9923e-Mail: bob@torbsa.comWeb: www.torbsa.comMember Stores: 50Contractor Sales: 85 per centConsumer Sales: 15 per centAffiliates: Epic Alliance Buying GroupDealer Education: Training seminars are conducted at monthly meetings by manu-facturersMarketing Strategy: Flyers, radio and TV advertising, retail technology are handled by individual dealersContact for membership Information: Bob Holmes, General Manager

TruServ Canada1530 Gamble Pl., Winnipeg, MB R3C 3A9Phone: 204-453-9511Fax: 204-452-6615eMail: info@truserv.caWebsite: www.truserv.ca, www.truhard-ware.caRetail Banners: TRU Hardware, TRU Building Centres, V&S, TRU Country & GardenMember Stores: 755Outlets In: All provinces and territoriesNew Members in 2012 (As of September 1): 75Affiliates: Part of the RONA dealer net-workConsumer Sales: 90 per centContractor Sales: 10 per centPrivate Label Lines: TRU Banners – Private Label Paint, Tools/Plumbing; FACTO, ProPulse, HAUSSMANN, UBERHAUSDealer Education Initiatives: Retailer training program, educational conferences, retail store training, retail technology train-ing, financial management, semi-annual business seminars, best practice training, district manager support (in-store), and in-field technical specialistsMarketing Strategies: To provide strong national flyer and catalogue programs to banner customers, as well as provide custom

Sexton leadership program, Sexton sales training, industry trainingMarketing Strategies: To have an immedi-ate impact on members’ bottomline with a focus on making sure members are able to competitively purchase a full range of building material and hardlines products; backed up with strong one-on-one relation-ships with dealers and suppliers that address local market issues as they happen; strong advocate for membersHighlights of 2012: Designed a new tem-plate for electronic newsletter that connects our vendor partners with members and help to drive business for both the vendor and the member; regional dealer groups have been established to keep dealers competitive in their markets and expand the ability to bring in products that previously were not avail-able to the rural marketContact for Membership Information: Steve Buckle, Vice-president /General Manager

TIM-BR MART705 – 1601 Airport Road NE, Calgary, AB T2E 4Z8Phone: 403-717-1990eMail: communications@timbrmart.caWebsite: www.timbrmart.caRetail Banners: TIM-BR MART, ACE, PRO, IRLYMember locations: 750+Outlets In: 10 provinces, NunavutNew Members in 2012 (As of January 1): 56 Affiliates: Holds the Canadian licensing rights to ACE HardwareConsumer Sales: 25 per centContractor Sales: 75 per centPrivate Label Lines: Insulation, house wrap, select hardware, moulding/trim, doors, windows; private label ACE-brand products are stocked in the Chalifour Canada warehouseDealer Education Initiatives: Regular webinars from internal and external sources, dealer development and store support team (office and field), TimbrU (e-learning desti-nation for education and training), Timbrnet (dealer intranet); team of 30 field represen-tatives.Marketing Strategies: AIR MILES Reward Miles, comprehensive national flyer pro-grams (conventional and electronic), in-store digital advertising, consumer web-site, Timbrclub direct e-marketing, home/garage/cottage plans, consumer credit and gift cards, project financing, multi-media national advertising, EcoChoice, consumer and industry tradeshows (e.g. Cottage Life and TIM-BR MART Contractor Show), Timbrkids Charitable Foundation, Hockey Canada sponsorship.

advertising options for independent custom-ers; dealers can take advantage of a custom-ized gift card program and dealer loyalty program that rewards dealers for working on their businessHighlights of 2012: New banner TRU Country & Garden was launched; new flyer launched in April and new website for the banner was launched in the summer; new TRU Building Centre website was launched in January 2012Contact for Membership Information: Guy Lichter, Director, Sales & Customer Relations (West) Serge Vezina, Director, Sales & Customer Relations (East); Wilf Gerhardt, National Manager, Business Development

TSC Stores L.P.1950 Oxford Street E., London, ON N5V 2Z8Phone: 519-453-5270Fax: 519-453-6068Website: www.tscstores.comRetail Banners: TSC Stores L.P., TSC VillagerConsumer Sales: 90 per centContractor Sales: 10 per centOutlets In: 44 in Ontario, 2 in ManitobaContact for Membership Information: Darryl Jenkins

Windsor Plywood20039 – 96th Ave., Langley, BC V1M 3C6Phone: 604-455-9663Fax: 604-455-5043eMail: contact@windsorplywood.comWebsite: windsorplywood.comRetail Banners: Windsor PlywoodMember Stores: 62Outlets In: British Columbia, Alberta, Manitoba, Ontario, Washington, MontanaConsumer Sales: 55 per centContractor Sales: 45 per centMarketing Strategies: Marketing materi-als are centrally produced at head office to ensure continuity of the appearance and message delivered to the consumer; in-house production allows promotions to be tailored to specific regions and stores giving dealers control of content and their advertis-ing budgetsContact for Membership Information: Curt Crego, Chief Operating Officer ❖

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HOME IMPROVEMENT RETAILING • December 201226

colour range and three distinct veneer cuts/species.”

The company also sees a trend toward the carefully managed mixing of vernacu-lars. For example, where a contemporary flush door goes into a loft makeover, the door is set into old, heavy, ornate trim. Rather than the old standard of matching the door, casing, frame, and baseboard, the trend is toward more eclectic.

With respect to colour, Toews says that walnut and white oak are popular for flush doors, while yellow poplar, maple, and knotty alder are popular choices for one-panel stile and rail interior doors.

Interior door glazing is growing in popu-larity as well. Architects and interior design-ers are actively looking to bring daylight into the core of buildings – homes included – for varying reasons, says Toews. Daylighting in commercial facilities and healthcare facilities has been shown to increase healthfulness, productivity, and otherwise provide a positive impact. And, with a tendency for multi-family residences to be smaller than single family residences, one way to lessen the feeling of ‘smallness’ is to add daylight which can be augmented with the use of glazed doors.

While homeowners often focus on having inviting and attrac-tive entranceways to their homes, until recently, interior

doors have been viewed as simply provid-ing the functions of privacy between rooms and keeping closet contents out of view. However, there is a growing trend towards enhancing the esthetic aspects of a home with interior doors. With today’s unique and inno-vative designs, the functional interior door has become an integral part of a home’s décor.

With the average home having 10 or more interior doors, the appearance of a home can be dramatically influenced by the choice of wood, construction type, size, and format of the doors. And, with a growing trend toward multi-functional living and a combination of family gathering areas and private retreats within the home, choosing the right interior door can add or alter the function of a room, or change its design and style by introducing light, creating the illusion of space, or provid-ing a private sanctuary.

Growth Seen In Modernist

In both Canada and the U.S., there is growth in multi-family housing versus single family housing, says Mitchell Toews, marketing director at Lynden Door/Alliance Door Products. While the ‘craftsman’ influence is still strong, with multi-family there seems a tendency to go more toward a mod-ernist design as opposed to traditional design aesthetics. “We see growth in modernist design in general, but only if the price is reasonable.” Toews says its newest product – StileLine – is doing well because “we hit the mark on the ‘look’ and have been able to hold costs down. We have achieved a competitive price on it by constraining the offering with three popular spe-cies that give us a light-medium-dark

Green BuildingWith a general consumer trend toward

environmental consciousness, LyndenDoor is also seeing a strong trend toward green building attributes. “We see more and more LEED requests and we spend a lot of time making sure our offering is up to speed with the various features such as NAUF (No Added Urea Formaldehyde), CARB (California Air Resource Board), FSC (Forest Stewardship Council), and no VOC (volatile organic compound).

Overall, there is a resurgence of design channel interest in doors as design ele-ments, says Toews. “Cabinets/case goods, furniture, flooring, and other areas of design have been strong for some time now and doors had been a little less ‘important.’ We see more designers and architects designing around doors now. This goes directly to our way of thinking and it is why our slogan is ‘Rediscover Doors.’ We believe this trend will continue as long as we continue to pro-vide fresh design at a great price.”

Generational Trends Vary As the market recovers, there will be

heavier growth in the new home market, primarily by the younger demograph-ic – Gen X and Gen Y – who are look-ing for the more modern feel, simple designs, cleaner aesthetics, a more European flavour, says Jason Walsh, lead industrial designer at Masonite.

At the other end are the baby boom-ers who are more inclined to stay in place and focus on remodeling what needs replacing and tend toward a more traditional feel. A segment of remodelers are trending toward upgrading design elements and they tend to bridge the gap between tradi-tional and contemporary, opting for the middle ground of craftsman and shaker type designs. “These designs are very popular and we believe they are going to continue to be the most popular design style, mostly due to aesthetic appeal,” says Walsh.

Interior Doors Influence AppearanceBy: Karen E. Treml

With a general consumer trend toward environmental conscious-ness, LyndenDoor is also seeing a strong trend toward green building attributes.

The younger demographic are looking for the more modern feel, simple designs, cleaner aesthetics, and a more European flavor.

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Answering The NeedsThe door trends for 2013 lend themselves

well to the tendency of modern families to live in multi-generational, multi-functional homes. Whether the design is modern or tra-ditional, within the multi-generation, multi-function profile, there is a growing need to adapt the home to include gathering spots and quiet retreats. With a variety of door styles and types, rooms can be easily transformed and lightened with the use of glazed or glass doors, privatized with solid core, or, where limited space is an issue, optimized with the use of the less obtrusive barn style door that allows more functionality within the room.

And with the move to eco-conscious-ness gaining momentum, many of the style choices incorporate ‘green’ into their con-struction. Overall, the interior door industry has responded to the changes and demands of the modern household and the desire for beautiful, but functional, homes. ❖

Karen E. Treml is staff writer at Home Improvement Retailing (Karen@ powershift.ca).

The clean, shaker-influenced profile works with both Craftsman architecture and contemporary spaces.

With respect to construction materials, moulded hardboard represents the largest segment in all of its lines, whether hollow, solid, or the Emerald line. As well, there is an increased demand for routed MDF doors.

With ceilings getting higher, doors are growing proportionately, and the 8’ door is becoming more popular as it creates the perception of more open space.

The company is also responding to the demand for ‘green.’ “It’s apparent by the vol-ume of requests we receive that the market clearly has a desire for green products,” says John Stahl, product manager at Masonite. “By offering our existing Safe ‘N Sound door with these ‘green’ attributes, we are giving our customers the opportunity to get the same quality product while being environmentally responsible at the same time,” adds Stahl.

Solid CoreThere is also a growing trend toward

solid core which offers a heavier, sturdier feel and increased sound dampening quali-ties. “The market purchases what is easily available,” says Walsh, “but in side by side comparison, the solid core wins over the hollow core with consumers.” He adds that “as the market gets more educated, the solid core products gain prominence.”

Another trend is toward moulded panel doors, particularly those that go more into the European craftsman look. There is an upswing in the exterior hardware mounted style (barn door) of door. Walsh says this style is a space saver and is applicable to both new construction and remodels. While he sees it as more of an upcoming trend, this style is definitely on the rise and there is a good deal of very beautiful ‘barn door style’ hardware available.

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HOME IMPROVEMENT RETAILING • December 201228

proDuct spotlight

Rolling Work Benches Are Heavy-Duty

KNAACK StorageMaster rolling work benches are super heavy-duty, professional-grade storage, coupled with convenient work surfaces for jobsites that require mobility. They are available in a range of sizes and load capacities with eight models to choose from. These include a mechanic’s tool chest, heavy duty rolling work benches, and the War Wagon which accommodates more than 2.5 tons of payload with 13 square feet of work surface.

Thermostat Works With App

Hunter Fan’s Universal Internet Thermostat is controlled in-home or with a smartphone app that works with all types of heating and cooling systems. It features a five-minute installation system with a plug and play internet gateway, runs on 4 AA batteries, and supports 24V ‘C-Wire’ operation.

Extension Pole Won’t Twist

Wooster’s Sherlock extension poles elimi-nate slipping or twisting and securely lock in 6” increments. The poles feature a bayonet end that locks more than 20 different Wooster tools in place without retightening. A thread-ed conversion tip is stored in the handgrip.

Oil Protects Hardwood Flooring

Hardwax Oil by Coswick Hardwood Inc. provides a fully environmentally-friendly

hardwood flooring solution produced from natural ingredients, including organic wax of Carnauba palm tree and oil of Tung tree. The oil penetrates into wood pores, saturating the wood to strengthen and protect it from moisture and dirt. It creates a hard protective film on the wood surface. The matte sheen disguises dust, most minor dents, scratches, and footprints, and provides resistance to moisture and temperature fluctuations.

Motion-Activated Screwdriver

Black & Decker’s GYRO 4V MAX Lithium-ion Rechargeable Screwdriver uses motion-activation to control speed and direction. The gyroscopic technology allows variable speed and direction change with a twist of the wrist. A quarter turn to the left or right controls forward and reverse and speed settings without the use of a switch. Its compact design includes an LED work light.

Moen Wallmount Valve Has Secondary O-Ring

Moen’s wallmount valve allows for easier installation with up to 1½” (4 centimetres) of adjustability to account for wall thickness variances. The valve has integral, built-in brackets and offers keyhole design on the center bracket for simpler leveling. The valve body has a secondary o-ring seal, so in the rare event of cartridge failure, water would leak to the front instead of behind the wall, minimizing the risk of damage/costly repairs and providing additional reassurance to homeowners.

Doors Suit Different Architectural Styles

JELD-WEN, Inc. has introduced the Madison molded interior door. The recessed, one-panel design accommodates a wide range of architectural styles. “[The door] suits both traditional and modern looks because of its recessed panel and non-profiled sticking,” says Derek Brosterhous, product marketing manager for JELD-WEN. The Madison comes with a smooth, ready-to-paint, primed surface and is available in bi-fold, narrow, or passage styles. Two con-struction types are available – hollow core and a solid door constructed for improved sound control. The door contains pre-con-sumer recycled wood and is available in a no-added formaldehyde (NAF) option.

Door Seal Easy To Install

The Cinch Door Seal from M-D Building Products seals doors against drafts and leaks without drills, screws, or pilot holes. With 3M adhesive technology, seal instal-lation takes only a few minutes. ❖

For information on any of these products, contact Dante Piccinin at homeimprove ment@rogers.com

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Garaga Michel Gendreau, presi-dent of Garaga Inc., a Canadian garage door manufacturer, is this year’s Quebec Ernst & Young ‘Entrepreneur Of The Year.’ The awards celebrate game-changing entrepreneurs’ ability to see opportunity where oth-ers see risk, says Sylvain Vincent, managing partner Eastern Canada, Ernst & Young. Gendreau acquired then-bankrupt Garaga Inc. in 1983 and by rallying employees, suppliers, clients, and new finan-cial partners, transformed the company into a profitable manufacturing business.

RONARobert Dutton is stepping down as top execu-tive at RONA inc. His departure came just one day after it reported a third-quarter net profit decline of nearly 90 per cent. It also ends his 20-year leadership of the company. He joined the company in 1977 and became its president and chief executive in 1992.

PeopleEnglert

Neal Brooks is director of business devel-opment in Canada for Englert, Inc. He is responsible for the growth and distribution of its full line of products including its LeafGuard and RainPro gutter systems. He was previously at Sears Canada Inc. where he served for five years as senior manag-er for Sears Commercial/Sears Incentives. ❖

MichelGendreau

Neal Brooks

29HOME IMPROVEMENT RETAILING • December 2012

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publisher’s perspectiVe

HOME IMPROVEMENT RETAILING • December 201230

Dante PiccininPublisher and Editorial Director

hir@powershift.ca

While most stores focus on customer service to increase sales, this does not end when the customer walks

out of the store with their purchase. For any numbers of reasons, that same customer may decide to return the product. In most cases, their explanation is legitimate and the transaction is very straight forward. The product is returned and the purchase price refunded.

However, there are those who see the customer return function as an opportunity to defraud the retailer. A recent conversa-tion with an acquaintance in the industry alerted me to a new practice. A customer will come in and buy two of something, say bathroom faucets. One carries a top of the line sticker price and the other is the bargain price. A few days later, they return with

the expensive faucet and want to return it. ‘No problem,’ says your friendly customer service rep.

Higher PriceHowever, later, when the item is being

examined, it is discovered that somehow the bargain basement price faucet ended up in the box for the premium product. The exchange, based on the box and the bar code, refunded the higher price.

In many ways, the hardware and lumber and building materials retail sector encour-ages this because return procedures are too customer friendly. Compare this with, for example, some of the big box electronic stores. Video games, CDs, sorry no return if it is open, only a straight exchange if it is defective. However, even during the post-Christmas return madness, every boxed item is checked by a member of the staff from the relevant department to make sure it is all there, the right components, etc. And as a patron of those stores, you may not appre-ciate it, but you understand it is part of the return procedure and if you don’t like it, shop somewhere else.

How bad is return fraud? A Retail Council of Canada survey suggests 72 per cent of retailers fell victim to a return fraud scam during the past year. It found criminals often target stores with lax return policies. Statistics Canada has concluded that fraudulent returns outrank credit card fraud and counterfeit currency as the most predominant form of fraud taking place in Canada. Return scams reportedly account for 33 per cent of all retail crimes (credit card and counterfeit cash account for 15 per cent each). And the cost, in the U.S. the National Retail Federation believes it has topped $14 billion.

As for the cost to the retailers, well, consider the time and money spent

on simply processing the return itself, restocking returned merchandise, re-eval-uating its worth, or determining where, how, or even if it can be resold. Returned merchandise unfit for resale is doubly

impactful, as the retailer loses both profit from the original sale as well as dollars spent on acquiring and merchandising the item itself.

So how do you stop it? A good return policy is a start. It should include:◆ Requiring a receipt and identification for

any returns. You can then use a computer database to track excessive returns which you suspect may be fraudulent.

◆ Only refunding in the same form of cur-rency as used for the purchase.

◆ Setting a length of time the store will allow returns.

◆ Setting guidelines on the condition of the merchandise being returned or charging a restocking fee for opened items, Of course, employees need to be trained

to spot return fraud and thoroughly under-stand (and enforce) the store’s return policy.

Plain ViewMost important, place your return poli-

cy in plain view. This can make it easier for the customer to understand what the store will allow and confirms what an employee working at the return desk is saying. It is also a good idea to put the return policy on sales receipts so customers can be aware of the policy before they even enter the store.

Sadly, it may still not be enough. Return policy abusers have become more sophis-ticated. Someone with even the most basic knowledge of computers and printing may be able to use these to create phony or altered receipts. They are generating UPCs for more expensive items which can be placed on top of the actual UPC to generate more refund dollars.

This presents an ongoing challenge for retailers who want to minimize refund fraud and abuse without creating restrictive poli-cies for legitimate consumers. ❖

The Growing Challenge Of Return Fraud

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ORGILL CUSTOMER INSIGHTS

Now, Orgill Gives All Dealers A Choice.Long-Term

Commitment

Worldwide Distribution & Retail Services

A Simple MissionAs Orgill has emerged as the world’s largest independent

hardlines distributor, its 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.

A Solid PartnerNot only does Orgill have a long track record of service, but

it is also known for its innovation, growth and dedication

to helping retailers prosper. Orgill is fully committed to

providing Canadian retailers with all of the products,

programs and services they need to succeed now and into

the future.

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.

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

ORGILL HAS A LONG HISTORY OF EFFICIENCY, INNOVATION AND RELIABILITY! YOU CAN COUNT ON ORGILL!

Now, Retailers Throughout Canada Have A Choice!

For more than 160 years, Orgill, Inc. has helped home improvement retailers succeed by providing them with a reliable source for products, programs and services. Now, retailers throughout Canada have access to all of Orgill’s resources and can rely on a distribution partner that is going to be there for them over the long haul.

Long Term_HIR.indd 1 12/11/12 12:45 PM

“In our first year with Castle we grew our business 15%. This year we are on pace to grow another 15%. Castle makes me competitive across the board, not just with hardware. They have a good team at head office where they negotiate vendor rebates. Castle works hard to make sure we are treated right, and as a Castle member, we have the same freedom we had before we joined a buying group.”

Kyle NoblePat Noble Lumber & Building Supplies Gore Bay, ON

To hear more from Kyle,scan the QR code or go to

castle.ca/freedom

Get the facts.Contact your Business Development Manager in Ontario:

Bruce Holman (647) 228-1414 bholman@castle.ca

Your trusted building supply partner

& hardware

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