Industry Updates: Home Center and Hardware Chains – August 2015
Ace Hardware Corp. promoted Tom Molleur to the position of VP Distribution.
Bob’s Discount Furniture has hired William Bracker as VP of Marketing. Bracker’s hire comes at a time of rapid expansion for the Manchester, Conn.-based chain, which opened four stores Memorial Day weekend in the greater Pittsburgh and Baltimore areas. Three more stores are slated to open in late summer and fall in Pennsylvania and New Jersey, and in February, the retailer will enter the Midwest market with five store openings in Chicago.
Gordon Lumber’s newly elected board of directors will be led by Pamela Goetsch, a descendant of the founder of the seven-unit Ohio lumberyard company.
Gordon Lumber also added Rhonda Taylor, who has joined Gordon Lumber as the company’s VP Finance and Controller.
Gracious Home announced that new ownership is now in charge of the company. A former Walmart executive has joined with a real estate executive to expand New York City-based luxury home décor retailer. Dottie Mattison who served in a variety of executive roles from 2006 to 2010 at Wal-Mart, has teamed up with David Mitchell to buy a majority stake in Gracious Home for an undisclosed price. Mattison will serve as CEO and Mitchell as Chairman. The former majority owner of the retailer, investment group Americas Retail Flagship Fund, now becomes a minority owner.
Home Depot announced that Bill Lennie, President, The Home Depot Canada, has been named Exec. VP, Outside Sales and Service. In this newly created post, Lennie will be responsible for leading The Home Depot’s Pro, MRO and installation services business, including the integration of Interline. Lennie will continue to lead The Home Depot Canada until a successor is named.
Home Depot announced that Michael Amend, now former VP of Online, Mobile and Omnichannel has left Home Depot, to assume the position of Exec VP Omnichannel for J.C. Penney.
House-Hasson Hardware’s VP Merchandising, Gerald Allen Winn, who was with House-Hasson for 32 years, passed away in Knoxville, Tennessee. He was 58.
Lowe’s Companies has promoted Tiffany Mason to the role of Senior VP Corporate Finance and Treasurer. In her new role, Mason will maintain her responsibility in investor relations and treasury and tack on oversight in financial planning and analysis.
Lowe’s Companies has announced that Kevin Meagher, VP and GM of the smart-home division, has left the company to become Senior VP Business Development for California-based ROC-Connect, a smart-home platform which is entering the North American market.
Lowe’s Canada has named Gregor Stuart to the newly created position of VP supply chain. In his new role, he will oversee the company’s supply chain operations and a new Distribution Centre, a 1.3 million-sq.-ft. facility in Milton, Ontario, that’s due to open this November. The move is a strategic aspect of Lowe’s continued growth in Canada, creating further oversight for the creation of a supply chain infrastructure that can support its expansion.
Lumber Liquidators now former Chief Merchandising Officer William K. Schlegel is the latest casualty of an ongoing management shakeup and overhaul by company founder and Chairman Tom Sullivan. Previous victims who ‘suddenly; lost their jobs include the now former corporate CEO and President Robert M. Lynch who “unexpectedly” resigned, according to the company’s press release, and Chief Compliance Officer Raymond Cotton who quietly resigned from the company in May, without benefit of a formal press release. Sullivan continues to clean house after the damning report by 60 Minutes raised concerns about the company’s product sourcing practices and allegations of circumventing federal laws. In the most recent personnel move, Lumber Liquidators said the employment of Schlegel, the company’s Chief Merchandising Officer, was terminated in late June. Leadership of merchandising now falls to Chief Marketing Officer Marco Pescara who will oversee merchandising and marketing in a newly combined role at the 355 unit chain. Pescara has served as the company’s top marketer since 2006.
Pier 1 Imports has named a former finance executive of Michaels, Kmart and Sears as its new CFO. Pier 1 has appointed Jeffrey N. Boyer as Exec VP and CFO. Boyer will have responsibility for Pier 1 Imports’ financial operations and accounting, including financial reporting, planning and analysis, accounting, treasury, tax and investor relations. Boyer brings more than 35 years of finance experience to Pier 1 Imports. Most recently, he served as Executive VP, Chief Administrative Officer and CFO for Tuesday Morning Corp. since September 2013.
Sears Hometown and Outlet Stores, Inc. announced that its Board of Directors has elected William (Will) A. Powell as the company’s CEO and President. Mr. Powell succeeds W. Bruce Johnson, who, as previously announced, is stepping down as the company’s CEO and President. The Board of Directors also has elected Mr. Powell as a member of the Board of Directors.
TW Perry has a new chief executive. Michael Cassidy, who left ProBuild to join TW Perry as President and CEO back in June 2008, is no longer with the company. This was confirmed by both the company and Mr. Cassidy. Cassidy and the company have reportedly agreed to a package including a buyout of the former CEO’s ownership-interest in TW Perry. Gary Bowman has now assumed the CEO spot at TW Perry. Edward Quinn Jr. remains Chairman as well as principal shareholder of the six-unit company.
Weyerhaeuser Distribution has promoted David Helmers to the role of VP for the division. Helmers has been with Weyerhaeuser for 20 years, most recently serving as director of sales and business development for Weyerhaeuser Distribution.
Mergers and Acquisitions
Builders FirstSource acquisition of ProBuild Holdings, a deal which creates the industry’s largest LBM supplier, has officially been completed. The combination of Builders FirstSource and ProBuild will create a national professional dealer with 2014 combined revenues of approximately $6.1 billion. The combined company will leverage its nationwide network to better serve its four critical customer segments, including production builders, custom builders, multi-family/commercial, and repair and remodel. With over 430 locations, the new company will serve 74 of the top 100 metropolitan statistical areas across 40 states. Now begins the ambitious effort to integrate the two organizations. Next up for the combined companies; take advantage of the housing market recovery, executives said. In conjunction with the closing of its acquisition of ProBuild, the company completed its previously announced public offering of 12,000,000 shares of its common stock at a price per share of $12.80. Also, Builders FirstSource successfully completed its previously announced private offering of $700 million aggregate principal amount of its 10.75% senior notes due 2023.
Central Network Retail Group has acquired the prominent 28-store chain Marvin’s. In terms of footprint and sales volume, it’s the biggest acquisition for acquisition-oriented CNRG, which owns 13 other brands operating in 10 states. The move also reunites CNRG’s president Boyden Moore with the award-winning regional retail-chain he led as CEO until 2010.
The Home Depot announced its entry into a definitive agreement to acquire Jacksonville, Fla.-based Interline Brands, Inc., a leading national distributor and direct marketer of broad-line maintenance, repair and operations (MRO) products. Under the terms of the agreement, The Home Depot will acquire Interline for $1.625 billion in cash, subject to customary adjustments. The acquisition, which has been approved by the shareholders of Interline, is expected to be completed during The Home Depot’s fiscal third quarter, which ends on November 1, 2015. The deal is subject to applicable regulatory approval and other customary closing conditions.
Parksite acquired Lavelle Company, a North Dakota based Building Material Wholesaler servicing retail lumberyards throughout North Dakota, Minnesota, South Dakota, and parts of Iowa since 1939.
US LBM Holdings officially announced a new ownership deal. Private equity firm Kelso & Company has entered into an agreement to purchase a majority of the equity interests in Green Bay, Wisconsin-based US LBM Holdings. BlackEagle Partners LLC and certain members of US LBM will be investors alongside Kelso, according to the announcement. Terms of the deal were not disclosed. Previous media reports estimated the size of the deal at about $1 billion. US LBM has made a flurry of acquisitions in recent months. It has recently acquired Rosen Materials in Florida, Lampert Lumber in Minnesota and New Jersey-based Direct Cabinet Sales.
Lowe’s gave an overhaul to its store format strategy when it opened its first store in Manhattan in New York City this week. Lowe’s will open its second of its two inaugural stores in New York City’s Manhattan borough about a month later. Lowe’s already operates stores in New York City where it has two in Brooklyn and another in Staten Island. But the Manhattan stores are interesting in that they will represent a much smaller convenience format. One will offer about 38,000 sq. ft. of retail selling space and the other about 30,000 sq. ft. For a detailed report on these significant openings of unique, new Lowe’s formats and their implications on Lowe’s future please see CSG’s recent Insight… A Unique Lowe’s Enters Manhattan, Twice.
Lumber Liquidators expects to open a total of 20 to 25 new stores in the expanded showroom format, as well as remodel 10 to 15 to fit the new format.
Marvin’s Building Materials and Home Centers, based in Leeds, AL, plans to open a new store in Camilla, Georgia. The store is currently under construction. It will be located in the previous Walmart location, next to the new Super Walmart. The store is expected to open in late October 2015.
Orchard Supply Hardware has officially opened up shop in San Francisco with a new North Beach location near Fisherman’s Wharf.
The Tile Shop announced the opening of its latest showroom, debuting in Matthews, North Carolina. This marks the company’s third location in the Charlotte metro area. As with all Tile Shop showrooms, the 18,000-sq.-ft. store will feature more than 4,000 globally sourced tile and natural stone varieties, as well as an on-site design and education center.
Lowe’s Canada announced that in addition to completing the acquisition of 12 former Target sites, the company also plans to open two more locations in Ontario. Construction is currently underway in Ancaster and Mississauga, representing an additional investment in excess of approximately $38 million (C$50 million.) The new Lowe’s store sites are located across Canada, many in markets where Lowe’s is currently underpenetrated. As a result of these new locations, Lowe’s total Canadian store count will increase to 54 locations including 37 stores in Ontario, 3 in Saskatchewan, 9 in Alberta and 5 in British Columbia. Lowe’s acquisition of the 12 former Target locations and Target’s Milton, Ontario DC — a done deal, carried a price tag of about approximately $113 million (C$147.75 million.) This acquisition came as part of a real estate auction following Target’s decision to cease operations in Canada. The 14 new stores, located across the country will enhance Lowe’s presence in Western Canada and strengthen its base in Ontario adding four new sites in British Columbia, two in Alberta, one in Saskatchewan and seven in Ontario.
IKEA announced it will become the first major global retailer to offer a 100% LED light bulb assortment. In a bid to make its products more sustainable, the retailer will switch all of its available bulbs to LED bulbs by the end of September.
IKEA is working to reduce its use of energy and to use more renewable energy. The company’s goal is to produce as much renewable energy as the total energy IKEA consumes globally by 2020. As of the end of 2015, IKEA renewable energy investments in the U.S will produce four times more energy than IKEA uses in U.S. operations. Recently, the IKEA Group and IKEA Foundation committed $1.12 billion to accelerate the transition to a low-carbon economy and to support communities most at risk. This follows an IKEA Group commitment to invest $1.9 billion in renewable energy by the end of 2015.
IKEA has pledged globally to become energy independent by 2020. In Canada, the retailer has more than achieved this goal in 2015 and has been named one of the county’s greenest employers for the 7th consecutive year.
IKEA Canada, as part of its commitment to sustainability, has invested in a 46 megawatt wind farm in Alberta, almost 4,000 solar panels on the roofs of three Ontario stores, and houses Manitoba’s largest geothermal installation.
IKEA Canada announced that shoppers who drive an electric vehicle and shop at Ikea in Canada just got a big gift from the Swedish retailer.
Ikea says it plans to install electric charging stations at every store In Canada by August. It is the first national installation of EV charging stations in Canada by a retailer at all of its locations. Charging will be provided to customers at no cost, on a first come first serve basis. Ikea Canada stores are located close to major transportation corridors, and a typical visit to a store gives enough time for an EV driver to top-up their battery, enhancing their travel range and preventing “range anxiety”.
Menards has joined Home Depot and Lowe’s in its decision to phase out all vinyl flooring containing phthalates.
Target Corp. is putting a spotlight on how the “Internet of Things“(IoT) will transform consumers’ homes and lives. The company has opened an experimental space that provides an upfront and personal look at how the IoT can connects everyday items like thermostats and door locks. The move follows the opening of Sears’s “Connected Solutions” flagship in San Bruno, California. Target’s new showcase, dubbed “Open House” is part retail space, part lab, and part meeting venue for the connected home tech community. It opened in San Francisco’s Metreon shopping center, below a CityTarget location. The 3,500-sq.-ft. space features a transparent, acrylic “house” complete with acrylic furniture and detailing. The rooms feature vignettes, including a living room and a nursery, that demonstrate how multiple connected devices can work together to create real-life solutions. It sells about 35 devices, including a Nest Thermostat, a Sonos music player, and a Ring smart doorbell. Only about a third of the products are currently sold in Target stores. Target is trying to personalize the benefits of these products, as well as show them working in harmony. It’s about creating a destination for engagement and discovery. Target also plans to learn from Open House. The retailer and its supplier partners will get real-time feedback from consumers interacting with the products. Target also plans to use the space to host regular meetings – from tech talks and meet-ups to product demos and product launches. The Enterprise Growth Initiatives Team created Target Open House. The company plans to use Open House to test these trends, both for the company, manufacturers and for guests.
Editor’s note: Full in-depth data on Target Corporation can be obtained from the Target listings maintained in Chain Store Guide’s database and directory of Discount Stores & Specialty Retailers.