Canadian Tire reports strong fourth quarter
Canadian home improvement and automotive retailer Canadian Tire posted strong fourth-quarter earnings of $125.1 million Canadian dollars (US$125 million), up 15 percent from C$108.3 million in the same period last year.
Sales were C$2.51 billion, up 3.3 percent from C$2.43 billion in the previous year.
For the full year, the company had earnings of C$417.6 million, up 17.8 percent from C$354.6 million in 2006. Sales for the year were C$8.62 billion, up 4.23 percent compared with C$8.27 billion last year.
Same-store sales, however, fell 1.8 percent for the fourth quarter and fell 0.5 percent for the full year.
Canadian Tire implemented several growth initiatives in 2007, including expanding and renovating numerous stores and testing three new concept stores. The company also relaunched a store-branded MasterCard and currently is testing a new retail banking initiative.
Also in 2007, the retailer opened five new stores including one with an expanded warehouse, known as a hub store. The company acquired three new stores, one of which is also a hub store, and converted nine stores under the PartSource banner during the year.
The retailer forecasts a “soft economic environment, especially in central Canada,” in 2008.
Research firm points to garage as opportunity
Port Washington, N.Y.-based NPD Group pointed to garage storage as a home improvement category somewhat immune to the housing downturn, as well as an opportunity for home improvement retailers.
“Garage storage is somewhat immune to the current housing market downturn,” said Mark Delaney, director of NPD Group’s Home division. “It’s not like the kitchen category. Consumers who plan on redoing their garage are doing so, regardless of what the housing market is doing.”
Some of the garage storage findings from NPD Group include:
• Warehouse home centers took the lion’s share of dollars at 47 percent in the garage and storage sector. Mass merchants followed at 32 percent and department stores at 5 percent.
• The garage storage segment attracts mostly high-income male shoppers.
• During the 12 months ending October 2007, men accounted for 64 percent of the dollar share in the garage storage and organization sector.
NPD Research is based on monthly tracking of 30,000 opt-in respondents in 70 categories.
“Areas ‘outside’ the home are getting more attention and are benefiting from the trend in making visual statements out of previously simple spaces. Garage storage is one of those areas that has evolved from simple products like bike racks and tool hooks into a race to build the ultimate ‘man cave’ complete with refrigerators and flat-screen TVs,” said Delaney.
While women account for only 36 percent of the dollar share in the garage storage and organization sector, “NPD consumer research shows that women mainly shop for home improvement items within mass merchants, where items generally sell for less. Women might become a bigger piece of the pie if mass merchants begin to carry more aspirational items or if department stores and warehouse clubs adjust their marketing efforts to appeal better to women,” said Delaney.
“Garage storage is an up-and-coming category that seems somewhat recession-proof. Retailers looking to attract a higher income consumer should consider expanding their assortment in this area,” added Delaney.
ProBuild acquires Jasper Lumber
ProBuild Holdings has finalized its acquisition of Jasper Lumber, a North Atlanta-based lumber, truss and millwork business. Terms of the deal were not disclosed
The purchase includes Jasper Lumber’s Cumming, Ga.-based lumber distribution business and its Kennesaw, Ga.-based lumberyard, truss and millwork manufacturing facility.
“Jasper Lumber is an outstanding, well-run operation,” said Jim Cavanaugh, ProBuild South region president, in a statement. “This acquisition, along with the previously announced acquisition of HD Supply’s LBM operation, positions us well to serve all segments of the Atlanta market.”
Jasper Lumber was founded in 1947 in Jasper, Ga., and it relocated in 1963 to the suburbs of Atlanta. It has been operated by second- and third-generation owners Bill Adams and his son, Keith.
ProBuild Holdings is one of the nation’s largest supplier of building materials to professional contractors, with more than 520 lumber and building product distribution, manufacturing and assembly centers in 41 states.