RONA sees earnings dip in fourth quarter
Canadian home improvement retailer RONA saw earnings dip 19 percent in the fourth quarter, to $30.49 million from $38.11 million last year. Sales for the fourth quarter were $1.087 billion, down 4.6 percent from $1.14 billion in the same period last year.
The Boucherville, Quebec-based company said it has put into place “several new initiatives” to help “revitalize sales and optimize the RONA network.” The company took a one-time charge in the fourth quarter of $1.4 million to upgrade its supply chain.
“In the fourth quarter, market conditions became even softer than they had been earlier in the year, especially in eastern Canada,” said Robert Dutton, CEO and president of RONA.
As part of its efforts to increase sales, at the end of 2007 RONA acquired the specialty hardware, lumber and building materials retailer Dick’s Lumber, which gave RONA three new locations in Vancouver.
The company also said it would sell $30 million in land holdings in 2008 to offset lower consumer spending. The money is part of the company’s cache of funds to build new stores.
Due to RONA’s financial cycle, the full year 2006 had one additional week than the full fiscal year 2007. For the full year, earnings fell to $185.1 million from $190.6 million in 2006. Still, sales for the year rose 5.1 percent to $4.785 billion from $4.55 billion in 2006.
RONA operates approximately 620 stores of various sizes and formats across Canada.
RONA to invest in Reno-Depot banner renovations
Boucherville, Quebec-based RONA reported that it will invest $20 million to renovate stores operating under its Reno-Depot banner.
The renovations, which include an improved retail space and more products and services, will be completed in four Reno-Depot stores by spring 2008. Renovations are planned on six more stores in the second quarter of 2008.
The announcement was made at the celebration marking the completion of major renovation work at the Reno-Depot store in Gatineau, Hull sector, Quebec.
“Today we’re celebrating the renewal of the Reno-Depot in Gatineau based on all the latest trends in customer service and big-box store management. The other stores operating under this banner will also be renovated using the same concept,” said Pierre Dandoy, RONA executive vp-big-box stores.
The Reno-Depot banner has 15 stores in Quebec.
RONA operates a network of 680 franchise, affiliate and corporate stores with more than $6 billion in annual retail sales.
European DIY giant names new CEO
Kingfisher has announced the appointment of Ian Cheshire as group CEO of the company’s B&Q, Castorama, Screwfix and other international DIY retail banners.
The European home improvement giant has been in a three-month search for a successor to Gerry Murphy, who announced he would leave the CEO post in November. Murphy served with the retailer for five years.
“[Cheshire] has extensive experience of international home improvement retailing and knowledge of the Kingfisher businesses, both in the U.K. and internationally,” said Peter Jackson, chairman of the board for Kingfisher. “This makes him uniquely placed to lead the business and drive through the changes necessary to improve return.”
B&Q has seen a decline in sales in recent years and has participated in a major revamping of its stores in the United Kingdom and China. B&Q also has seen increased competition in China from Home Depot, which opened its first locations in that country last year. In the last year, the retailer has expanded into new territory, including Russia and parts of Eastern Europe under the Castorama banner.
Kingfisher has seen similar challenges to U.S. retailers in recent years, including a slower housing market, and has responded by expanding internationally. In its third quarter, while sales rose just 0.8 percent in Britain, sales from French operations rose 5.6 percent. Sales from the rest of Europe increased 18.6 percent, and sales from Asian operations rose 8.6 percent.
Kingfisher operates more than 760 stores in 10 countries, under banners including B&Q, Castorama, Brico Depot and Screwfix.