Can Sapphire tip the balance for Mitre 10?

HI
WEEKLY
Vol. 1 No. 6
US ONLINE TRADIE
SERVICES TAKE OFF
• SPECIALTY STORES
GAIN SHARE • EBAY
BOOSTS CANADIAN
LUMBER COMPANY
CAN SAPPHIRE TIP THE
BALANCE FOR MITRE 10?
Sapphire
Can it save Mitre 10?
WITH METCASH UNDERINVESTING AND BUNNINGS/
MASTERS TAKING MARKET
SHARE, WILL A NEW STORE
FORMAT BE ENOUGH?
3
Pro.com/Thumbtack expand in US.....................7
Big Box Update....................................................8
Indie Store Update.............................................10
HNN Index...........................................................11
Specialty stores gain market share...................12
9
eBay helps Canadial lumber company..............13
News...................................................................14
New Products.....................................................16
Hot Links.............................................................19
11
16
Will Sapphire save Mitre 10?
Mark Laidlaw lays out M10 future at Investors’ Day
S
maller hardware retailers have been hard hit
by the ongoing expansion of Bunnings and the
entry of Masters Home Improvement into the
market. Mitre 10, however, while experiencing some
setbacks from increased competition, is also battling
with continued under-investment.
Its parent company, Metcash, is struggling to bring
its IGA grocery network, to which it is a wholesale
supplier, into the 21st Century. Its resources have been
drained by the need to implement store refurbishments
and finance price cuts in product lines. As a result there
has been precious little left to invest in its hardware
operations.
While Mitre 10 has done well under the circumstances, it is not doing all that well in market terms,
and this seems set to continue. Though some analysts
suggest Metcash may be able to stage a recovery, the
odds would seem slightly against this. Facing an uncertain future, Mitre 10 is trying to find new ways to grow
its business further, but this is proving a very tough
challenge.
Performing in adverse
circumstances
While Metcash does not disclose much in the way of
information about Mitre 10 operations costs, it has
been possible to observe a number of circumstances
that indicated some under-investment
in the hardware operation. In particular,
during 2014 there was a lack of original
content in TV commercials – overcome
through some clever recycling of older
material – and fewer ads during peak
seasons.
Fortunately, a strength of the hardware wholesaler/retailer’s management
team, led by its managing director, Mark
Laidlaw, is making clear, bold decisions,
with a long-term outlook. This has led it
to sponsor Channel Nine’s reality renovation show “The Block”.
Mitre 10’s key decision was to make
the show’s star, Scott Cam, its principal
media representative. Mr Cam continues
to successfully represent the best of the
“tradie’s” spirit: clever, competent, a bit
quirky, with a biting sense of humour,
frankly spoken, but also genuine.
The sponsorship may be expensive, but it has
gained Mitre 10 close to equal brand recognition with
Bunnings and Masters Home Improvement. That is a
considerable achievement, especially given its apparently shrinking media spend.
Investor Day
On 29 September 2015 Metcash held an “Investors’
Day”. According to Metcash, this event would not
feature the release of any new financial information, but
only commentary on operational matters.
That turned out to not be entirely the case, as Metcash did release for the first time (as far as HNN can
determine) sales figures for Mitre 10 over the past five
years. Previously, most of these figures were available
only as a composite including Metcash’s automotive
operations (which were sold in May 2015).
The following graph in Figure 1 these numbers, and
the calculated growth rate for the past four years.
While these numbers appear quite positive on the
surface, the truth is that the last two years have marked
a difficult time for Mitre 10. Faced with dwindling resources and investment, the company has continued to
produce acceptable, though not great, results.
This includes the decent revenue growth noted
above, but also borderline growth in performance metrics such as like-for-like (comp) sales.
hnn.bz
3
In FY 2014/15, for example, Mitre 10 produced
3.3% growth in like-for-like sales. Inflation during the
period ran at around 2.2%. Retail sales for the hardware category for 2014/15 as contrasted with FY
2013/14 rose by 9.6%, according to Australian Bureau
of Statistics figures.
It is also worth bearing in mind this data from Roy
Morgan, which indicates some of the effect Masters
Home Improvement has had on Mitre 10 in recent
years:
Mitre 10 strategies
Mr Laidlaw took the opportunity of the Investors’ Day
to outline some of the future strategies Mitre 10 will be
pursuing. While the overall goals that were mentioned
are broadly inline with those outlined in the December
2014 half-year report, the 2015 Strategy Day, and the
May 2015 full-year report, there were some changes in
emphasis.
General mention was made of efforts to expand
private label offerings and to improve “core ranging”
based on input from shopping data. Digital/online
was also discussed, including the relaunched website offering “click and collect”, the “Mighty Rewards”
loyalty scheme, and Tradies Online, designed to aid the
“disorganised tradie”.
For logistics, Mitre 10 is continuing its efforts
regarding direct sourcing of product from Asia, and
improving its warehouse management system.
The main focus, however, was on what Mitre 10
terms “Retail & Trade Excellence”. The three main features of this were E-Learning, Store-in-Store offers, and
Mitre 10’s “Sapphire” store concept.
E-learning is built on systems that were acquired
with some of Metcash’s (now divested) automotive
operations. This extends an opportunity to Mitre 10
members to train-up staff in customer service through
the use of online tools.
The store-in-store concept is something Mitre 10
has been trialling during 2014 and 2015. A narrow
range of distributors including Stihl chainsaws, Beaumont Tiles, and Weber barbecues are involved.
Mr Laidlaw appears to have given the most attention to the Sapphire store concept, which was originally
launched in 2014. To date, only four stores have been
upgraded to Sapphire status, but Mr Laidlaw announced plans to upgrade a further 10 stores over the
coming year.
The end goal is to upgrade the company’s top 50
stores. According to a slide used in the presentation,
Mitre 10 is claiming the Sapphire upgrade will improve
average sales revenue by 15% in each store.
Given the apparent importance of the Sapphire
concept to Mitre 10’s future, HNN decided to take a
visit to the original Sapphire store in the group, the
Gay’s Mitre 10 in Sebastopol, just outside of the Victorian city of Ballarat.
Gay’s Mitre 10 Sapphire
The first thing that needs to be said is that just about
everyone reading this would really enjoy having a hardware store like the Gay & Co Mitre 10 in their neighbourhood. It’s a great store. It is clean, well-designed,
and has one of those pleasant, attentive, engaged
staffs that you really only ever find at independent
stores.
The range is not as wide as that in a big-box retailer, but what is there is carefully selected and well-displayed. In fact there are a few innovations in display
that the big box retailers could learn from.
However, much of what the Sapphire format has to
offer is now very familiar from big box retailers everywhere.
The power-tools are neatly display on wall racks.
Benches display the bigger tools such as mitre saws in
order of complexity, size and expense. You can pick the
tools up, and see how they fit your hand, how heavy
they are, how easy it is to access key features.
There is a small “vignette” of a bathroom, complete
with shower and sink. A row of sink cabinets provide a
good demonstration of their features. There are stacked
sliding drawers to let you see a further range of sinks.
The design of the paint counter really is very good,
and geared – unlike that of most big box stores – towards discussion and consideration of the paints, with
a table and chairs located close by.
In particular, the display of outdoor entertaining
gear, such as furniture and barbecues, is really excellent. The store has a wooden decking material laid
down, and that helps to set context and create atmosphere when looking at the furniture.
hnn.bz
Elements of the Sapphire program
4
Yes, it is good. But is this format enough
to drive Mitre 10 forward, and out of its current
stagnation?
Probably not.
This is, of course, the first Sapphire-style
store to be launched, and no doubt the format
has been improved on.
The fact is, though, that the level of amenity
in home improvement stores over the past two
to three years has accelerated very rapidly. Not
only that, but it is continuing to accelerate, and
will develop still further over the next two years.
There has been really serious money, really
serious thought and experience put into these
developments.
HNN believes this development has gone
way beyond anything seen in any other retail
sector in Australia – certainly way beyond what
supermarkets are currently doing.
In light of this, Mitre 10 cannot, quite simply,
hope to compete with Bunnings and Masters
based on amenity.
Artist’s impression: floor layout
Competitive cutting edge
It seems likely to HNN that Mitre 10 could find
better ways to increase its competitive edge. The
key to this may lay in what really makes Mitre 10
so unique. Not necessarily the community focus
and so forth, but actually the mix of commerce.
Because Mitre 10, according to what it tells us, is
50% trade sales.
The overall market forecast for Australia and
much of the rest of the developed world is that
the fastest growing sector is in Do It For Me
(DIFM). As the overall market is growing, DIY will
grow as well, but it will be outpaced by DIFM.
There are a number of reasons for the growth
DIFM. The standard and complexity of home
designs have both increased. Demands on time,
both from work and family seem to keep increasing. As people move into higher density housing, any kind of renovation work becomes more
disruptive.
The one factor that holds back DIFM in Australia is simply that dealing with tradies remains
difficult. Standards of work vary, price depends
on how much time you have to get enough
quotes and to negotiate. It is a common story to
have a job half done, and then not see the tradie
for another week, as they go off to start a different job.
We’ve seen the growth of some online
services to help ease the situation. In Australia
there is Home Improvement Pages (hipages.
Artist’s impression: colour consistency and banners
help create energetic floor space
Artist’s impression: outdoor furniture is displayed on
wood decking, creating atmosphere
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5
A real gem of a store, quite at home in Ballarat
Bathroom vignette: effective, but is it
really enough?
The bathroom display very similar to original displays
at Masters Home Improvement, before 2.0
Power-tool display
com), which offers a way for clients to get quote from
tradies. In the US there are a growing number of such
services, offered by everyone from Amazon to smaller
online businesses. Then there are sites such as Porch
and Houzz that offer indirect means of finding the best
professionals for a job.
This is really the market where Mitre 10 could excel.
The company knows its main customers, the tradies,
like no other retailer does. It could expand into services
that hooked up tradies with clients, it could guarantee
some kind of price structure, and help to maintain quality standards.
The other alternative
But Mitre 10 is unlikely to go down that path. It would
be a bold business move, and while the team at Mitre
10 might be up for it, Metcash would not be able to
make that kind of investment.
What is likely to happen? For some time now HNN
has been suggesting that the most likely final outcome is for Metcash to divest Mitre 10.
Those who disagree with this analysis tend to miss
one principal element of such a deal: what would Mitre
10 really be worth to a competitor?
Imagine, for example, if every single Masters warehouse store had its trade centre rebranded as Mitre
10, run by Mitre 10 management. In many ways, the
experienced staff and management skills of Mitre 10
would be worth the investment itself. Add to that the
well-established brand and the commercial relationships, and the acquisition price that would be paid just
keeps climbing.
When we first suggested it back in mid-2014, it
seemed like a slightly unlikely idea. But over the past
six months it has become almost a commonplace with
investment analysts – who also see a possible private
equity takeover of all of Metcash as being quite likely.
Given the lack of willingness to invest in the business, HNN would have to say that at this stage divestment might be the best thing for the hardware industry.
We just cannot see Metcash giving Mitre 10 the support
it really deservers over the next two to three years.
hnn.bz
6
Pro.com, Thumbtack expand
T
Online home services market grows in US
he US market for websites that hook up homeowners with trades and services continues
to grow and innovate. The Seattle, Washington-based Pro.com has done some hooking up of its
own, with Facebook and standard texting, to enable
“Text-a-Pro”.
Meanwhile, San Francisco startup Thumbtack,
which describes itself as like a “dating service” for
clients with needs and service providers, has received
US$125 million in funding, setting the company’s value
at around US$1.3 billion.
Texting for help
Facebook launched its “Businesses on
Messenger” service in March 2015. Initially
this service was envisioned as providing
additional services to standard e-commerce sites. According to Facebook:
Businesses on Messenger enables
things like the following: during the
checkout flow on a business’s site, a
person can choose to start a conversation with a business, receive updates
from that business on things like order
confirmations and shipping status updates, and ask the business free-form
questions about the order, receiving
quick responses.
Investors buy into Thumbtack
While Pro.com concentrates on home improvement
task, Thumbtack helps to link customers to a broader
range of services, including painting, house-cleaning
and even dog-walking. It works strictly as a referral service, charges from US$3 to US$20 to provide details of
potential customers to professionals who have signed
up to the service.
It is a service that has proved popular. Currently
the site helps to set up over five million projects a year,
with an average value of US$500 each. Its books carry
listings by over 200,000 professionals across a wide
range of capabilities.
Investors such as venture capital firm
Sequoia see Thumbtack as tapping into
a very large potential market. Sequoia
partner Bryan Schreier believes it has
potential that is similar to that of Google.
There was a ton of information online,
but it took Google to actually make that
information useful and make it easier
to connect consumers with what they
were looking for. This is a similar approach to solving a very big problem.
Thumbtack is a very large business
already, when the reality is that they are
tapping less than 1% of the available
market today.
Pro.com text
Pro.com is taking these services one
step further. Either through Facebook Messenger, or
Competition
simply by texting to 776-776, clients can connect to a
Neither one of these companies is, of course,
“home project manager” at Pro.com. This manager can
immune from competition. Along with a wide range of
help answer questions about a range of projects, helpsmaller players, some very large companies, including
ing customers find the right supplier for the services
the e-commerce leader Amazon and Google itself, have
they need. The Facebook link adds other facilities, such
entered into this market.
as setting up appointments by texting through messagUS home improvement stores are also not far bees to Pro.com.
hind. Home Depot’s Red Beacon service, for example,
The core feature of the service is that many home
offers similar connections to professional contractors to
services will be offered on a flat-rate basis, so that
help homeowners get jobs done.
customers will know instantly how much they will cost,
One major advantage that these other services offer
without the need to go through a lengthy and botheris a thorough pre-screening of the professionals who
some quoting process. Pro.com founder and CEO Matt
are available for contracting. Thumbtack relies instead
Williams sees this as an issue of transparency.
on a rating and recommendation system, but leaves the
We’re bringing transparency back to the consumonus for securing a good professional on the customer.
er with Text-A-Pro and our greatest challenge
moving forward is to continue to simplify finding a
good contractor.
hnn.bz
7
Big Box Update
Bunnings in Maroochydore and Tweed Heads
Screwfix supply chain award
Acknowledged for providing products
wherever and whenever customers
need them
UK-based trade multi-channel retailer Screwfix is celebrating after being awarded the title of Team of the Year
at the Retail Week Supply Chain Awards 2015, held in
London recently.
The business’ supply chain team earned the title
from industry publication Retail Week for its dedication
to providing convenience, value and the best products
for customers, and developing innovative systems to
deliver them.
For example, its Click & Collect service allows
customers to order over the phone or online and collect
five minutes later from any store. It also has a next day
delivery, seven days a week and a real time, stock system across its warehouses. Supply chain & operations
director, Lindsay Haselhurst said:
Delivering for our customers is at the heart of the
Screwfix DNA. We strive to meet the needs of
our busy trade customers while our supply chain
team and logistics partner Wincanton work hard
behind the scenes to ensure our customers get
the best possible experience when shopping with
us, whatever the
channel.
An example
of this is our
Click & Collect
service. We’ve
had more than
six million orders since its launch in 2011. For our
customers to be able to pick up their goods from
a store just five minutes after ordering requires a
precise and consistent supply chain but also one
that is responsive and fleet of foot.
Screwfix now has 412 stores across the UK.
Bunnings Tweed Heads
extension
Opening day for Bunnings
Maroochydore
Tweed Shire Council has paved the way for the rezoning of land used for a dog racetrack on the NSWQueensland border at Tweed Heads which Bunnings
wants to expand onto, according to Echo NetDaily.
Bunnings currently has a warehouse store at South
Tweed Heads but plans to expand to the larger site.
Under the plan this could be as much as 40-metre high
in the 10-metre height-restricted zone.
Councillors have approved sending the proposal
for the rezoning of the Border Park Raceway site to the
planning minister for determination under the government’s “gateway” policy.
Planners say the rezoning of the land to a mix
of business and private recreation will facilitate the
development of job-generating enterprises for the site,
adjacent to the Gold Coast Highway on the NSW side
of the border, opposite the Southern Cross University
campus at Gold Coast Airport.
The site will retain the raceway and have a future
connection to the nearby industrial area at Ourimbah
Road, as well as a traffic-light intersection on the Gold
Coast Highway.
Bunnings’ 15,000sqm warehouse on Dalton Drive,
Maroochydore will open its doors to the public soon.
The construction job was completed on schedule by
Victorian builder H. Troon.
Over 250 Sunshine Coast locals are now official
team members at
the new warehouse,
including 50 people
employed as new
staff and 200 people
transferring from the
existing Maroochydore store.
Complex manager Kevin Harris told the Sunshine
Coast Daily the new warehouse will offer the “widest
range of home improvement and outdoor living products”, including 25 kitchen and bathroom displays,
a large nursery and cafe. It represents a $48 million
investment in the development, fit-out and stock.
Bunnings will be joined by rival Masters which
purchased the former Queensland Health site directly
opposite the store on Dalton Drive.
http://goo.gl/MpkXDa
http://goo.gl/ffT7kg
hnn.bz
8
Benefits of a Masters sale
Reports in Fairfax Media illustrate the potential up-side
of Woolworths selling Masters. According to stories that
appeared in Fairfax, Woolworths could release billions
of dollars in capital if it cuts its losses with Masters,
sells BIG W and goes back to being a food-and-liquor
retailer with a strong gaming operation.
Bank of America Merrill Lynch
analyst David Errington estimated
more than $1 billion of working
capital and $3 billion of capital
could be released, and cash realisation could return to more than
110% “if Woolworths exited home
improvement and BIG W and reDavid Errington verted to being a high-cash-generating supermarket operator.”
One of the big numbers to consider is the cost of
buying Lowe’s put option, thought to be worth up to
$1 billion, and unwind the agreement with the United
States retailer that underpins the Masters operation.
Sources close to Woolworths management suggest
two conflicting theories on the best course for Masters.
The first is that Woolworths is a supermarket business
and should return to the basics and leverage this rich
experience. Contrary to this are concerns a new Masters owner could benefit from the $43 billion Australian
home improvement market, leaving Woolworths looking
foolish.
http://goo.gl/DMxYv7
Click to visit hbt.net.au
hnn.bz
9
Indie Store Update
Mitre 10 NZ, Super Retail Group, homewares
Award-winning Mitre 10 NZ
stores
The 20th annual Hardware Awards in New Zealand saw
Mitre 10 MEGA Hornby win the Retail Store of the Year
(over 4,000m2) Award for the second year in a row,
while Mitre 10 Beckenham won the Retail Store of the
Year (up to 4,000m2) Award. Both stores are located in
Christchurch.
digit growth this year and a revenue of $1.3 billion.
Retailers are now applying that same model into other
areas like homewares and are likely to see big results.”
Instead of being a shopping destination like IKEA
or Freedom, fast homewares are typically an impulse
purchase, snapped up while browsing for other things.
The high turnover of stock also ensures shoppers keep
coming back, as opposed to traditional retailers who
still do seasonal drops.
Australia’s homewares market has grown 10% in
the year to June, according to Deloitte’s latest retail
sales report.
http://goo.gl/ttqpMJ
Super Retail speculation
Mitre 10 Crofton Downs also made the finalist list
for Retail Store of the Year (up to 4,000m2), while Mitre
10 MEGA Dunedin and Mitre 10 MEGA Ferrymead were
both on the finalist list for Retail Store of the Year (over
4,000m2).
A number of Mitre 10’s partner suppliers were also
recognised in their respective categories: Winstone
Wallboards Ltd (building supplies category), Kiwicare
(Garden), Accent Tools (hand & power tools), MiTek
(hardware) and Sika (painting and decorating).
http://goo.gl/BYmJBg
Homewares attracts overseas
retailers
The “fast” homewares market in Queensland has become the latest place where global retail giants expand
their footprint in Australia.
US retailer Pottery Barn has just opened its first
Queensland store with other major international brands
such as H&M and Zara moving from fast fashion into
homewares. Australian retailer Cotton On recently
introduced a new home range marketed as low cost,
designer pieces for the average shopper.
IBISWorld senior industry analyst Spencer Little
said the fast homewares model is formidable and could
trigger local casualties, with independent stores, as well
as Harvey Norman, IKEA and Freedom in the firing line.
He told the Courier Mail: “The business model is shifting. The desire to have things as quickly as possible is
very prevalent. It’s why fast fashion has seen double
The Business Spectator website reports there are questions over whether Super Retail Group is a takeover
target or a buyer of another entity. Chief executive Peter
Birtles remains adamant that the retailer is not about to
embark on another major acquisition, quashing suggestions that a rival leisure brand such as Kathmandu
or Lorna Jane could be within its sights.
But some still wonder whether the company, with
brands such as Rebel, Supercheap Auto, BCF Boating
Camping and Fishing and Ray’s Outdoors in its stable,
could be the target of a potential suitor.
The retailer once had a reputation for consistently
ringing up double-digit profit growth, fuelled by acquisitions and demand for fishing rods, camping gear and
car accessories. But it has suffered from a slowdown in
sales at its leisure retailing chains, and Ray’s Outdoors
is going through a costly restructure.
Shares have fallen about 30% in recent months,
taking its market value to about $1.7 billion. Some
believe this makes the company an attractive takeover
target in the retail space.
hnn.bz
http://goo.gl/3UM5Bm
10
HNN Index
T
Week ended 9 October 2015
he HNN Home Improvement
Index for the week ending 9 October 2015 closed
28 points higher at 955.89. The
underlying ASX 200 index rose
227 points in real terms to close at
5279.7. In comparative terms the
ASX 200 rose 42 points to 982.3,
close to its level for 1 July 2014.
Home improvement stocks
rallied strongly during the week.
UGL climbed by 14.5%, followed
closely by Metcash, which closed at
14.0% higher. Downer EDI rose by
9.3%, Bluescope Steel by 7.5%, and
Breville was up 6%. CIMIC ended up
5.4% at the end of the week.
Goodman Group in $2bn
British property pact
The Goodman Group has struck
up a GBP 1 billion ($2.1bn) partnership in Britain with two of its major partners. The trio of
the Goodman Group, the Canada Pension Plan Investment Board and Dutch group APG Asset Management
revealed the Goodman UK Logistics Partnership.
an improved online platform winning over shoppers. It
has opened 10 of its new larger format stores to date
and boosted its online brands after making a deal with
British fashion retailer New Look.
http://goo.gl/NEM1dM
http://goo.gl/xTTx30
Supermarkets slash private label prices
to drive sales
BlueScope Steel workers back groundbreaking deal
BlueScope Steel employees have endorsed a
ground-breaking workplace agreement after their
union leaders accepted that hundreds of job losses, a
wage freeze and a restructuring of work practices were
needed to prevent the closure of the steelworks at Port
Kembla. BlueScope management referred to the threeyear deal as “game-changing”.
Coles and Woolworths have both slashed private-label prices to drive sales and convert more
shoppers to their home-brand products. Woolworths
cut prices on its premium private-label range in the
three months to the end of September, according to
Deutsche Bank research, slashing 9% off prices which
Coles cut by 7% in the same period.
http://goo.gl/bH9g4o
http://goo.gl/uMJrUa
Target on track for transformation
Target boss Stuart Machin said the chain is well
advanced in its transformation from a loss-making business to a strong performer, with new store formats and
hnn.bz
11
Specialty stores attract
DIY buyers
New generations choose different options
U
S home improvement retail researchers The
Farnsworth Group have released a study that
indicates big-box retailers are losing market
share in some areas to speciality outlets.
The study analysed results from a wide range of
channels for purchasing home improvement goods,
and examined the motivations and drivers of several
audiences.
The surprising conclusion was that specialty
stores were gaining market share in some specific market demographics. In the 44 to 54 year-old
group, 44% of homeowners used specialty stores
instead of big-box stores in shopping for their flooring needs.
For the younger generation, aged between 18
and 34 years, specialty paint stores were ranked
more highly than for older generations. An analysis
of this data by US market communications agency Wray Ward indicates that in the case of paint,
younger consumers are less driven by price considerations and more by quality concerns.
The company sees many US paint brands responding to this by providing tools such as mobile apps to
make the paint shopping experience more accessible
and engaging.
On the other hand, speciality areas such as flooring,
report that they continue to lose sales to big box retailers. Some of these speciality stores are, as a result,
resorting to big-box style tactics to maintain market
share in recent years.
Floor & Decor, for example, based in the US state of
Georgia, would buy large lots of flooring to obtain better prices, then sell directly from those lots. This is quite
different from the standard practice of buying samples,
then ordering on demand.
Floor & Decor say that having demonstrated demand, they now have better relationships with suppliers. They go direct to those suppliers, but can order
smaller lots, and thus keep more products consistently
in stock.
Seeking deals
While paint may be a slight exception, the data from
Farnsworth indicate that consumers of all ages are
heavily motivated by finding great deals.
Younger consumers rely on online shopping to
find deals, with an increasing reliance on social media
to help them find the best offer. Older US consumers
continue to rely on newspaper coupons and catalogues
delivered to their mailboxes. However, an increasing
focus on online shopping is common across most age
groups the study indicates.
Floor& Decor shop floor
Professionals shop online
Not only consumers, but US professionals – tradies
– have also come to rely more on online services to
guide their purchases. Nonetheless, professionals
still rank good customer service from knowledgeable
employees as a key driver to where they choose to buy
their supplies and tools.
Amazon threatens
One major source of market loss is the comprehensive
online retailer Amazon. Both consumers and professionals nominate Amazon as a major source of purchases. This follows from ongoing efforts by Amazon
to make its DIY offer compelling.
For example, the top best selling offer in power
hammer drills for Amazon is a 18-volt Li-ion cordless
hammer drill, complete with battery and charger for
US$99. The DeWalt DC970K-2 18-Volt Compact Drill/
Driver Kit is on sale for US$89 and is its top selling
power drill driver.
hnn.bz
12
Canadian timber retailer
turns to eBay
K
Aid in competing with big-box stores
imberley Wotherspoon is the head of online
sales and marketing for hardware and building
supply retailer LumberMart in Canada.
Since being hired a year ago, Wotherspoon established the company’s eBay store and increased its online sales by 1,094%. The majority of those sales, more
than 60%, are to customers outside Canada. This led
her to being named eBay Canada’s exporter of the year.
Managed and operated by Wotherspoon, LumberMart’s eBay store has a 99.7% positive feedback
rating and lists about 1,600 items — everything from
tools to soap dishes.
When she pitched the idea of global sales to owner
Jason O’Hearn, he wondered how it was going to work.
He simply wanted to improve the website, which wasn’t
getting much traffic, to make ordering easier for local
contractors, property managers and retail customers.
Now he says, with a laugh: “Kimberley didn’t listen to
me, and I’m glad”.
The company’s eBay store opened in late October
2014. O’Hearn said:
The next thing I knew, the orders started coming
in. It started humbly, but we saw pretty quick there
was nobody in metro or in Nova Scotia that was
buying. It was orders coming in from Russia and
Australia and the US and other places. My comment to her at the time was, ‘I don’t care where it’s
coming from as long as it’s coming our way; that’s
terrific’.
The company’s eBay customers aren’t looking for
LumberMart when they search online. Instead, they
are searching for a particular product, such as a Kingbrand tool or a particular furnace filter or fan, explains
Wotherspoon.
With the dropping value in the Canadian dollar,
sales to the United States are particularly good, and
often items through LumberMart are cheaper even
when factoring in shipping. California and Texas are the
top states for sales, and Ontario and B.C. are the top
Canadian provinces.
This month alone, the online store has recorded orders to customers in Australia, Belgium, Chile, Croatia,
Germany, Greenland, Hong Kong, Ireland, Israel, Japan,
Lithuania, Norway, Qatar, Saudi Arabia, Singapore,
Spain, Sweden, Thailand and the United Kingdom.
They’re buying small “no soliciting” signs, plumbing
replacement parts, fans that operate from the heat of a
woodstove, cleaning products, range hood filters and
other items. Wotherspoon also responds personally to
feedback through the online store and social media.
The way she takes care of her international customers is the same way the company, which employs 27
people, handles those who have shopped with LumberMart since Fred O’Hearn founded the first store in
1984. It currently has two stores. Jason O’Hearn said:
She lives and breathes our Facebook and Twitter
accounts, and she sort of is the face of LumberMart for us, and I think it’s been good for everybody.
Compared with the rest of the business, which includes timber, drywall, building supplies and installation
services, “the online sale is still a very minimal part” of
LumberMart, according to Wotherspoon.
Passion for social media
Wotherspoon was doing social media back in the days
before Facebook, running a website for fans of Canadian musical group Rankin Family while she was in
high school. She eventually learned to use Twitter and
Facebook to spread the word and promote Cape Breton fiddle music.That passion lured the British Columbia
native to Nova Scotia, where she is using her online
skills to help LumberMart reach customers around the
world. In a statement eBay said:
Kimberley’s ‘intrapreneurial’ spirit, behaving like an
entrepreneur within a business, highlights a growing sector of (small businesses) utilising eBay’s
e-commerce platform to reach a global audience.
By bringing a traditional bricks and mortar store
online, Kimberley has helped LumberMart stay
competitive even as big box retailers have started
to move into the local market.
In order to be considered for the award, which is
in its 11th year, eBay sellers must have at least 98%
positive feedback, have a minimum of C$1,000 in sales
each month and at least 10 listings every month. Those
shortlisted also have to do a 30-minute telephone
interview.
hnn.bz
13
NEWS
Cabot’s promotes decking season
Latest commercial from the timber
coating company was shown at the
MCG
Cabot’s has used the end of the AFL season to kick off
“decking season”. Its new TV commercial went to air
on big screens at the AFL Grand Final in Melbourne.
he ads, created by HBT, were also aired in the lead
up to the showdown between Hawthorn and the West
Coast Eagles with the brand saying it is taking a Super
Bowl approach by making a “big brand statement” at
the stadium itself.
Official attendance during the grand final almost
reached 100,000 (98,632 according to Fairfax Media)
and many were Cabot’s target audience – men. HBT
managing director David Hayes said:
When Cabot’s told us they were thinking about
placing a message in the Grand Final, it made perfect sense. The ‘decking season’ starts when the
football seasons finishes and consumers – mostly
men – tend to get off the couch and think about
the garden, specifically the deck.
The 30-second ad uses much of the same creative
already in market but has been repurposed to depict
the varnishing of the deck as part of an AFL game.
Michael Woodlock, general manager, Cabot’s said:
JELD-WEN buys Californian
door maker
A period of extensive growth for JELD-WEN is continuing with the announcement that the company has acquired LaCantina Doors, a manufacturer of folding and
multislide door systems based in Oceanside, California.
Terms of the acquisition were not disclosed.
The acquisition demonstrates JELD-WEN’s commitment to aggressive growth through acquisition.
Colin Shaffner, JELD-WEN senior vice president of
windows, said:
With the booming popularity of folding and
multislide door systems, the acquisition gives us
additional resources, capacity and a leading brand
in this growing segment of the market. It’s a great
fit with our mission to continue to push design
innovation and offer best-in-class products to our
customers not only in North America, but worldwide.
Since 2003, LaCantina has built a reputation for
We went to HBT with an open brief. They know our
business well, so they think about it holistically. HBT
looked at developing all-new creative, but decided the
best approach was to repurpose our current TV com-
mercial. They got Dennis Cometti and Matt Richardson
in Melbourne to commentate our Cabot’s talent coating his deck, as if it was a passage of play in a football
game, complete with siren and the roar of the crowd.
The result has already been a big hit with our customers
and employees.
Hayes added:
The key to it all was the opening graphic: the footy
season’s over. The decking season’s just beginning. After that, the idea almost wrote itself.
creating award-winning door system solutions for both
residential and commercial markets. The company
was named one of San Diego’s fastest-growing private
companies in 2015 by the San Diego Business Journal.
Matt Power, LaCantina’s co-founder said:
LaCantina Doors’ partnership with JELD-WEN is a
fantastic opportunity for us to
create greater
value for all our
customers and
employees…
The latest acquisition expands
JELD-WEN’s position in the US as well as internationally. Most recently, it acquired Karona, a stile and
rail wood door manufacturer based in Michigan. The
company also took over Dooria, a provider of residential and commercial wood doors in the Swedish and
Norwegian markets, and Aneeta, a manufacturer of
sashless window systems in Australia.
hnn.bz
14
NEWS
Name change for Hanson
Brick producer Hanson Building Products has changed
its company name to Forterra, following a recent divestment by former owners HeidelbergCement.
The rebranding brings with it a new logo and a
fresh identity to the established business, which has a
trading history spanning back several decades. However its wide selection of products and services will be
unchanged, according to the company.
Forterra, which operates in North America and the
United Kingdom, makes concrete and clay building
products, including clay bricks, Thermalite blocks,
aggregate blocks, Red Bank chimney, roofing and flue
systems, precast concrete, Jetfloor and Formpave
permeable paving.
Structherm, the
subsidiary specialising in external
wall insulation, is
unaffected by this
rebranding.
Forterra
employs close
to 5,000 people,
including 1,600 in the UK across 18 manufacturing
facilities. UK managing director Stephen Harrison said:
The Hanson name and logo may have been replaced by Forterra but this is a change of branding
only. We remain committed to the excellence and
integrity recognised by our customers and the
construction industry in general, and we want to
use this rebranding to reinforce our values.
These changes only apply to Hanson Building Products – Hanson Cement, Hanson Quarry Products and
Hanson Contracting will all continue to be part of Hanson UK, which remains within the HeidelbergCement
Group. There is no longer any connection between
Hanson UK and Forterra.
Newell Rubbermaid to purchase
Elmer’s
projected to be about US$240 million, according to
Newell.
The company will leverage its brand building,
design and innovation capabilities to accelerate Elmer’s growth while delivering synergies in distribution,
cross-selling and merchandising.
The acquisition is expected to be financed through
a combination of available liquidity and debt financings.
The company anticipates the transaction closing by
year end, subject to customary conditions and regulatory approvals.
Newell said the deal is expected to close this year
and add to adjusted earnings and operating margin in
2016.
Decor business
Newell also said it would divest its Levolor and
Kirsch window coverings brands from its decor business. This business is expected to generate approximately US$310 million in net sales in 2015.
Levolor and Kirsch will continue to be reported as
part of Newell’s home solutions unit and will be managed as a stand-alone business through this process.
The company reiterated its full-year 2015 profit
and revenue forecasts as it expects no impact related
to either the Elmer’s acquisition or the planned decor
divestment.
Newell Rubbermaid has agreed to acquire Elmer’s
Products, from Berwind Corporation, a family-owned
investment management company, for a purchase price
of US$600 million.
The acquired business will be part of Newell Rubbermaid’s writing business with Elmer’s, X-Acto and
Krazy Glue joining the company’s Paper Mate, Sharpie,
and Mr. Sketch brands. Elmer’s net sales for 2015 are
hnn.bz
15
NEW PRODUCTS
DR Power has new line of
chippers
One model should expand its customer
base to attract a more suburban-based
market
DR Power Equipment, a Generac company, has introduced a re-engineered series of chippers and chipper
shredders.
It includes an all-new entry model, the 9.5 Chipper
with Shredder that combines premium features with an
introductory price tag. Joe Perrotto, president and CEO
of DR Power Equipment said:
We’ve always been very strong among mid-tolarge size property owners who have lots of trees
and an ongoing need for a reliable wood chipper.
But there are a lot of people with smaller properties who want a more portable, lighter machine
that can also handle garden waste. This new
model gives us that, and offers significant power
in a compact design.
The DR 9.5 Chipper with Shredder reduces branches up to 3-inches in diameter into woodchip mulch. The
separate shredding chamber will consume all types of
yard and garden waste — weeds, sticks, leaves, garden
cuttings, acorns, and more. Included with the machine
is a 2.5 bushel debris bag, which can attach directly
to the output chute in places where a user wants to
control discharge — for example, around flower beds
or swimming pools.
The latest lineup includes six additional models:
two more with shredders included, and four dedicated
wood chippers for the customers who don’t want or
need a shredder. Perrotto explains:
Our aim was to have something for every consumer. Some customers need a machine they can tow
on public roads, others only need the ability to tow
their chipper around their property with an ATV or
lawn tractor, and some just want a unit they can
manually wheel around their yard…
Chippers with shredders
Lightweight and easy to manoeuvre, the 9.5 Chipper with Shredder chips branches up to 3-inches in
diameter and shreds lighter yard and garden waste up
to .5-inches in diameter.
der model adds 20% more power and the ability to
chip branches up to 4-inches in diameter and shred
.75-inches diameter yard and garden waste. A pin-hitch
is available for off-road towing.
The 21.0 Self-Feeding Chipper with Shredder will
chip branches up to 5-inches in diameter and shred
1.5-inches diameter yard and garden waste. The 21.0
model features the same DR self-feeding technology
available on all the dedicated chipper models. It comes
standard with road-towing equipment.
Dedicated chippers
The 11.5 Self-Feeding Chipper is a dedicated
chipper that will consume branches up to 3.75-inches
and features DR’s self-feeding technology that allows
branches to be drawn into the chipping hopper without
force-feeding. A pin-hitch option is available for offroad towing with a lawn tractor or ATV.
The 16.5 Self-Feeding Chipper offers a 40% boost
in engine power and is available with electric starting.
It will chip branches up to 4.75-inches in diameter and
features DR’s self-feeding technology. Available options
include a road-tow kit and an extended high discharge
chute.
The 21.0 Self-Feeding Chipper is DR’s most powerful wood chipper. It will chip branches up to 5.75-inches in diameter and is a commercial duty machine that
is designed for the rigors of continuous wood chipping without bogging down, even under heavy loads.
Options include a road-tow kit and an extended high
discharge chute.
The 3-Point Hitch model is a self-feeding chipper
for tractor owners, and comes with the PTO shaft included. It’s essentially the same as the 16.5 model (with
a branch capacity of 4.75-inches), but powered by the
customer’s tractor.
Larger in size, the 11.5 Chipper with Shred-
hnn.bz
16
NEW PRODUCTS
Lightweight plasterboard saves
time on site
USG Boral’s latest engineered lightweight plasterboard,
Sheetrock® has increased productivity on site during
the construction of 480 Queen Street in Brisbane (QLD).
It is 15% lighter than USG Boral standard 13mm plasterboard. This allows for faster delivery, distribution and
installation of materials.
Sheetrock has been reengineered to feature
Sag-Defying Strength™, for improved sag resistance
and strength-to-weight ratio. Ideal for ceilings, Sag-Defying Strength also helps to reduce the chance of damage during handling and installation. It has a consistent
core that’s easy to score and snap, which can translate
to less waste and potential material cost savings. Cameron Starkey, assistant project manager at Grocon said:
As head contractor, Grocon considers a number of
factors when specifying materials for use on site,
including safety, cost, time, speed of installation,
availability of product, ease of handling and transporting materials, and environmental benefits.
Starkey said that as a lighter alternative to regular
plasterboard, USG Boral’s Sheetrock enables efficient
delivery of the
product to
various locations within
the building. It
also reduces
installation time
and time spent
distributing material loads.
Approximately
30,000m2 of
Sheetrock is
being supplied for use in
plasterboard
margin areas
and around the lift cores on all 34 floors of the Brisbane
building. Plasterboard contractor, North Australian
Contracting (NAC) works closely with Grocon to optimise the specifications provided for the project. Danny
Simpson, managing director of NAC said:
Our boys like working with USG Boral Sheetrock.
Fifteen per cent lighter doesn’t sound like much,
but it makes a big difference when they are work-
ing overhead to install ceilings, as they are on this
project. The board doesn’t flex as much when it’s
carried overhead and generally, it is more stable
than regular 13mm plasterboard.
We find Sheetrock to be more rigid than regular
plasterboard and we have fewer breakages…
Timing has been critical for this project, as the site
is on a busy central Brisbane road. USG Boral helps to
ensure supplies are delivered to site in a timely manner.
Simpson said:
Deliveries of Sheetrock are tightly scheduled. NAC
has to book crane time and manage the distribution of materials directly up to and across the relevant floors in accordance with project timelines.
The USG Boral team is reliable and responsive
which helps us deliver on our contractual obligations. Its multi-national presence also gives
us comfort, knowing it will stand by the product,
honour warranties, attend on-site inspections and
provide quality post-sales support.
USG Boral products are manufactured from a combination of natural gypsum, and paper liner made from
100% reclaimed and recycled paper waste. Plasterboard waste can be reclaimed and recycled into new
plasterboard, or reused as soil conditioner.
Shining light on the jobsite
The GearWrench LED light is one of the brightest hand
held inspection lights on the market, providing 380
lumens of illumination that will last five hours of continuous use. This light also has three settings to brighten
up any environment at the touch of a button: torch
mode, 50% light and 100% light.
The mounting magnets on the back and base of the
light will make sure the unit stays in one place, and the
versatile hanging hook allows users the option of above
the head lighting.
For those working in tight spaces, the GearWrench
LED light can be rotated 150 degrees for access to
difficult to reach places. The LED light is also capable
of being charged via a PC or via wall mounted socket
with a USB charger.
Other features include:
• Super bright spotlight
• 360-degrees folded out swivel hook
• Samsung 3.7V/2600mAH Li-ion rechargeable battery
• Includes USB charger
• Thin design provides access to hard to reach places
hnn.bz
17
NEW PRODUCTS
Deadbolts get smart technology
The Signature series from Kwikset is a range of deadbolt locks that have Home Connect technology. This
means that each one uses Z-Wave (wireless communication) to do all of the locking and unlocking. That way,
users can access and control these smart locks from
almost anywhere, using a smartphone or tablet.
To use Z-Wave, end-users will need to pair the
locks with a third-party hub or controller. This will allow
them to sync the lock with other smart devices in the
home. Once connected, they can check in on the door
status and receive alerts via email or text.
Each of
the Signature
locks uses a
single-cylinder deadbolt.
Home Connect
is a high tech
solution that
allows users to
always know
whether the
door is locked.
Other features of the range include SmartKey rekey technology so users can re-key the lock without
having to remove it from the door; BumpGuard technology to prevent lock bumping; and full 128-bit encryption security.
The Signature series smart locks are also easy to
install. Designed to replace existing door hardware, all
that is needed is a screwdriver and four AA batteries.
No hardwiring is required and the batteries should last
for about one year.
The locks are available in a traditional round style
and the contemporary square model in brass (traditional only), nickel and bronze finishes.
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hnn.bz
18
HOT LINKS
Australian homewares site changes
name
Peter Rabbit brand in the garden
Local online retailer Temple & Webster re-launched
its Wayfair Australia site as furniture and homewares
shopping website, ZIZO. The rebranding comes just six
weeks after Temple & Webster acquired Wayfair Australia. ZIZO branding is focused on simplicity, service and
speed.
UK-based Treadstone Products has unveiled an
exclusive range of bespoke children’s gardening accessories in the form of the Peter Rabbit licence. The range
features characters from the popular television program
and will include gardening accessories and clothing for
children up to the age of seven.
http://goo.gl/HcUl1H
http://goo.gl/vcCmmC
Targeting millennials with design help
Spotlight on white
Benjamin Moore has announced its 2016 Colour of
the Year as Simply White OC-117. The company also
unveiled Colour Trends 2016, a corresponding palette
of 23 colours to illustrate how white works within the
colour spectrum.
Interior design is going virtual with clients looking to
the Internet for immediate and budget-friendly advice,
ideal for millennials. Two web-based platforms — Zoom
Interiors of Los Angeles and Havenly of Denver —
connect users to interior designers offering style and
shopping expertise for a one-time flat fee.
http://goo.gl/qJePl6
https://goo.gl/2ZM6RG
Click ad to visit hbt.net.au
hnn.bz
19
Contact:
Betty Tanddo, Publisher
0411 431 832 || betty@hnn.bz