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CHHMA NEWS

CHHMA - EYE ON OUR INDUSTRY
Volume 14, Issue 30, August 13, 2014

Inside This Issue:

• Industry Memorial Golf Classic - October 1st
• Register Now for CSSA's Second Annual Meeting – September 24, 2014
• RONA Returns to Profit in Q2 Despite Weaker Sales
• Housewares Battle Pushes Bowring, Bombay into Bankruptcy Protection 
• Canadian Tire Reports Strong Q2 Results, Names New CEO
• U.S. Private Equity Firm Considers Bid for Sears Canada, Report Says
• Target Cuts Profit Estimate as Data Breach Costs Rise, Canadian Chief Outlines Recovery Plans
• Home Depot Appoints New EVP Merchandising
• Housing Starts Rise in July More than Expected
• Building Permits Jump 13.5% in June
• Statistics Canada Says July Jobs Report Had Error, Updated Data to be Released Friday
• Hiring Outlook Optimistic for Rest of 2014: BMO
• Canadian Economy Picks Up Pace in May
• Latest U.S. Economic News 
 


Association News



Industry Memorial Golf Classic - October 1st    
 
The 13th Annual Industry Memorial Golf Classic is taking place on Wednesday, October 1st at the Blue Springs Golf Club in Acton, Ontario.

The event is held on behalf of the hardware and housewares industry and it honours stalwarts from the industry who have passed away. CHHMA members and non-members are welcome to attend.

This year’s honourees are:

Bruce Webster - Spent most of his career in the home improvement industry. He worked at many companies, including being a buyer at Homecare and Cashway. He then joined TSC Stores as a senior category manager, and finished his career as a product manager at Home Hardware Stores. Bruce passed away last September.

Tom Ross - Served for 33 years as the Executive Director of the Canadian Retail Hardware Association (CRHA). Tom passed away on June 26 of this year.

Past honourees include: Chris Hrushowy, Mike Pullen, Jim Ypma, Bill Caldwell, Brayl Copp, Ed Hardison, Stuart North, Joseph Kuchar, Shelly Lush, Jack Pountney, Christof Vanooteghem, Ian Hay, Trygve Husebye, Bernie Carpenter, Don McDonald, Les Groves, Bob Hilton, Doug Straus, Mel Boshart, George Giles and Ed Barnes.

The day allows family, friends and colleagues to honour these gentlemen while enjoying a fun day out on the golf course followed by a dinner and silent auction.

Registration and lunch starts at 10:30 a.m. with a shotgun start at noon. Dinner will commence at around 6:00 p.m.

For further details and to register, please click here.  

Money raised from hole sponsorships and the silent auction will go towards the CHHMA Scholarship Program which provides support for children of CHHMA member company employees to attend university or college.

Consider donating an item or items for the silent auction. Housewares or hardware products, golf items or any item interesting and/or unique would be sincerely appreciated. Whether or not you can attend the event, your donation will contribute to the Scholarship Program which has benefited 70 young people since 2001.

Click here for a silent auction pledge form.  



Stewardship News 

Register Now for CSSA's Second Annual Meeting – September 24, 2014 


The Canadian Stewardship Services Alliance (CSSA) would like to invite stewards of Packaging and Printed Paper Programs in British Columbia, Saskatchewan, Manitoba, and Ontario to attend its second Annual General Meeting on Wednesday, September 24.  

The CSSA and its family of recycling organizations, Multi-Material BC (MMBC), Multi-Material Stewardship Western (MMSW), Multi-Material Stewardship Manitoba (MMSM), and Stewardship Ontario (SO), look forward to this opportunity to provide members with an update on stewardship activities in Canada, to hear from stewards, and to answer your questions.

At the September 24th meeting, stewards will learn about:

· CSSA's accomplishments over the past year including cost savings realized through harmonization;
· Year over year program performance and the factors driving costs in each program;
· Implementation status for the new MMSW program in Saskatchewan;
· 2015 Material Fee Schedules for MMBC, MMSW, MMSM and SO;
· What's happening in other provinces that have signalled their intent to implement packaging and paper EPR program.

Read More >>



Industry News
 
RONA Returns to Profit in Q2 Despite Weaker Sales 


RONA inc. reported a stronger-than-expected quarterly profit on Tuesday as lower costs helped offset a drop in sales due to tough competition in the home renovation market.  RONA said the results demonstrate the success of its turnaround plan and its need to stay focused on efficiency. The company reduced annual costs by $110-million in 2013 by cutting jobs, closing stores and selling assets.

“The second quarter results show encouraging signs in sales. Same-store sales of the corporate stores in the retail segment have grown for the first time since 2010 compared to last year, despite the very challenging environment in the first half of the quarter. The net cost savings achieved by RONA’s recovery plan added $10.5 million to EBITDA in the quarter and $27.9 million year-to-date. These savings directly contributed to a 25% increase in adjusted net income in the second quarter and 80% increase year-to-date,” said Robert Sawyer, President and Chief Executive Officer of RONA, in a press release.

Still, arduous competition and a slowdown in some markets, notably in the province of Quebec, squeezed sales in the 13-week period ended July 29. Same-store sales declined 0.7% from a year earlier (an improvement from -3.4% in the first quarter) and overall revenue fell 4.4%.  Read More >>



Housewares Battle Pushes Bowring, Bombay into Bankruptcy Protection 
 
A trio of housewares chains owned by a prominent Canadian retailing family has gone into bankruptcy protection, adding to a growing array of domestic stores that are faltering in the face of pressures from foreign powerhouses and online players.

Bombay & Co. Inc., Bowring & Co. Inc. and Benix & Co. Inc., owned by a member of the Isaac Benitah family that also owns Fairweather, International Clothiers and other chains, received court protection from creditors last week, owing $86.6-million, according to court documents. Almost half of the debts – $39.5 million – is owed to companies tied to brothers Isaac and Fred Benitah as secured creditors, the filings say.  Read More >>



Canadian Tire Reports Strong Q2 Results, Names New CEO    

Last Thursday, Canadian Tire Corporation, Limited released second quarter results for the period ended June 28, 2014, reflecting solid revenue, sales and margin growth. The company reported net income of $178.9-million, or $2.12 per share, in the second quarter, from $154.9-million, ($1.91) in the same period a year ago. That beat analysts’ average estimates of $2.02, according to Thomson Reuters.  Consolidated revenue rose 4.8% to $3.2-billion amid strong retail and gas sales, and income before income taxes in the retail segment climbed 22.7% to $149.6-million.

The market also warmed to the news that Canadian Tire president Michael Medline will be the retailer’s next CEO, coming as it did on the heels of strong second quarter results.  Read More >>



U.S. Private Equity Firm Considers Bid for Sears Canada, Report Says 

The New York Post reported last week that the private-equity firm Sycamore Partners has shown an interest in purchasing Sears Canada. “Sycamore, which recently bought Jones Group, Talbots and Hot Topic, is considering a bid for Sears Canada with a plan that could include “running the business,” said the Post story, citing unnamed sources close to the negotiations. The Post reported that an initial round of bids for Sears Canada was completed in June, and a second round of bidding began last month. Read More >>



Target Cuts Profit Estimate as Data Breach Costs Rise, Canadian Chief Outlines Recovery Plans 

Target Corp. announced last week that it is cutting its second-quarter earnings estimate due to a significant rise in costs related to a data breach last year and higher promotions and discounts to lure customers in North America.  The company has been struggling to move past a devastating data breach during the 2013 holiday season, in which hackers stole at least 40 million payment card numbers and 70 million other data.  The bleak forecast comes less than a week after Target named former PepsiCo Inc. and Sam’s Club executive Brian Cornell as its new CEO (effective Aug. 12) as it tries to regain customer confidence. 

Meanwhile, new Target Canada president Mark Schindele outlined his plans to fix the company’s raft of problems including empty shelves and high prices in an article by the Globe and Mail’s Marina Strauss.  Read More >>



Home Depot Appoints New EVP Merchandising

The Home Depot announced on July 30 that Ted Decker has been promoted to Executive Vice President – Merchandising, effective August 4, 2014. In his new role, Decker will be responsible for all aspects of merchandising strategy and operations, reporting to Craig Menear, president – U.S. Retail.

Decker is a 14-year veteran of The Home Depot, where he most recently served as senior vice president of retail finance, pricing analytics and assortment planning. He has played an integral role in the company's merchandising transformation, leading the implementation of new pricing and analytics processes, as well as new merchandise planning and assortment tools. Read More >>


 
Economic News
 
Housing Starts Rise in July More than Expected     
 

New home construction in Canada topped economists’ expectations for July.  The strong showing suggests that builders are undaunted by the potential for a real estate slowdown.  A number of economists have been saying for some time that more homes appear to be being built than demographics suggest are required, and economists generally have been forecasting a moderation in housing starts. But low interest rates continue to fuel demand in the housing market, giving builders an incentive to keep up a brisker pace than expected.  Canada Mortgage and Housing Corporation (CMHC) said on Monday that Canadians housing starts increased to a seasonally adjusted annual rate (SAAR) of 189,784 units in July, compared with 185,952 in June.  Read More >>



Building Permits Jump 13.5% in June
 
The value of Canadian building permits issued unexpectedly jumped by 13.5% to $8.0 billion in June led by higher construction intentions for institutional and industrial buildings in Quebec and commercial buildings in Alberta, Statistics Canada reported last Thursday.  Market analysts had expected a 2% month-on-month decline after the 15.4% advance seen in May. Compared to June 2013, building permits were up 20.1%.  Read More >>



Statistics Canada Says July Jobs Report Had Error, Updated Data to be Released Friday 

Statistics Canada says it made an error in formulating its July jobs numbers.  The federal agency says the source of the error has been identified and corrected, and updated July job estimates will be released on Friday.  A week ago, Statistics Canada reported that a measly 200 jobs had been created in July, a number that fell spectacularly short of expectations. Economists had expected that the economy would bounce back from an unexpected decline of 9,400 jobs in June, and add as many as 20,000 new jobs the following month.  Instead, Statcan reported that the number of full-time jobs fell by 59,700 while part-time jobs increased by 60,000 — figures it now suggests were faulty.  Read More >>



Hiring Outlook Optimistic for Rest of 2014: BMO 

Employment growth actually looks brighter for the second half of the year despite disappointing job numbers in July, according to a new BMO Economics report.  Both a rebound in the economy in the second quarter and expectations for solid growth bode well for Canada’s employment prospects, despite the fact that just 200 net new jobs were created last month, says the BMO Hiring Report released on Monday.

"Service-sector job growth has been much stronger than manufacturing sector job growth in the past year," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Looking ahead, we expect manufacturing and export-related industries to pick up on the back of stronger U.S. demand and the lagged impact of the weaker loonie. Exports climbed 1.1% in June and the upward trend can support an increase in Canadian employment levels."  Read More >>



Canadian Economy Picks Up Pace in May   

Canada’s GDP jumped in May at the fastest pace in four months as car makers ramped up production.  Output rose 0.4%, following a 0.1% gain in April, Statistics Canada reported on July 31st. It was the fifth straight monthly gain in domestic output adding to signs the economy is making progress on what Bank of Canada Governor Stephen Poloz said will be a two-year recovery toward full output. The central bank on July 16 estimated annualized growth of 2.5% in April-to-June period after the expansion slowed to 1.2% in the first quarter.

The rise from April, when Canada’s GDP grew by a sluggish 0.1%, was more than the 0.3% advance forecast by market analysts. Overall growth year-over-year expanded to 2.3% from 2.1%.  Read More >>


 
Latest U.S. Economic News
 
U.S. retail sales were unexpectedly flat in July, pointing to some loss of momentum in the economy early in the third quarter; U.S. home prices rose in June by the smallest year-over-year amount in 20 months, slowed by modest sales and more properties coming on the market; U.S. consumer spending rose for a fifth straight month in June, but a moderation in price increases suggested the Federal Reserve will not raise interest rates any time soon; U.S. payrolls increased by 209,000 in July, a solid reading that extends the steadiest period of job creation since the end of the recession ....  Read More >>

  

 Upcoming CHHMA Events 


The Secrets of Power Negotiating Half-Day Seminar
By Michael Sloopka
Wednesday, August 20, 2014 (SOLD OUT)
Four Points by Sheraton Toronto Airport Hotel, Mississauga, Ontario

Industry Memorial Golf Classic
Wednesday, October 1, 2014
Blue Springs Golf Club, Acton, Ontario

Industry Cocktail
Thursday, December 11, 2014
Casino de Montreal, Montreal, Quebec

CHHMA Industry Calendar

To register for all events visit our website at www.chhma.ca or call Pam Winter at (416) 282-0022 ext.21.


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"Eye On Our Industry" is published by the CHHMA as an information resource for our members. Member input regarding content and format is welcomed. Please contact Michael Jorgenson by email: mjorgenson@chhma.ca, or call at (416) 282-0022, ext. 34. CHHMA is located at 1335 Morningside Ave., Suite 101, Scarborough, ON, M1B 5M4 www.chhma.ca

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Canadian Hardware & Housewares Manufacturers Association | 1335 Morningside Ave., Suite 101, Scarborough, ON M1B 5M4
Telephone: (416) 282-0022   Email: pwinter@chhma.ca