BOSTWICK-BRAUN HAS CONSECUTIVE PERFECT ISO AUDITS During the week of February 2, QMI Management Systems Registration from Cleveland, Ohio conducted an ISO registration audit at The Bostwick-Braun Company's Toledo, Ohio; Ashley, Indiana; and Lorain, Ohio facilities. Having been certified since 1997, Bostwick-Braun has always received high marks during their audits. All three locations have received perfect audits for the second year in a row. Bostwick-Braun's audit results put them in the top 10 percent of companies tested. Bostwick-Braun Vice President of Corporate Quality & Transportation Jeff Shively said, "The results of the last two years confirms that we have a mature foundation of employee-owners insuring that ISO Standards and Procedures are implemented and monitored daily at The Bostwick-Braun Company." An ISO9001:2000 audit confirms that the company being audited has a quality system that conforms to the ISO standard. The company must provide documented evidence that they are focusing on continuous improvement and customer satisfaction. Bostwick-Braun is the only wholesale hardware distributor in the country to be ISO registered.

BUNZL MAKES TWO FURTHER ACQUISITIONS IN NORTH AMERICA
Bunzl plc, the international distribution and outsourcing Group, announced that it has acquired the business of Tec Products Co., Inc from a private company owned by David Holtzman, Joel Shapiro, Aaron Wolkstein and Erwin Kirschner. Based in New Jersey, Tec Products is principally engaged in the supply of jan/san and associated products through redistributors. Revenue in the year ended December 31, 2006 is estimated to have been $14 million and the gross assets acquired are estimated to be $3.3 million.

HOME DEPOT MAY SELL HD SUPPLY BUSINESS
Home Depot's Board of Directors is evaluating what to do with its HD Supply business with possible options including the sale, spin or initial public offering of the wholesale distribution business. The company said that it does not expect to update its progress or disclose developments unless the board of directors has approved a definitive transaction. Home Depot has retained Lehman Brothers as its financial advisor to assist with the evaluation. According to CEO Frank Blake, the move is a continuation of a strategic review that the company conducted last November but said, "We are undertaking this action because of our desire to increase our focus on our retail business." HD Supply has annual revenues of about $12 billion and has nearly 1,000 locations nationwide and in Canada. Shareholders have been questioning whether the business fits in with Home Depot's overall retail plan.

WAL-MART FACES HUGE PAY TRIAL
A class-action lawsuit covering all women who worked for Wal-Mart from 1999 to the present, as many as 1.5 million workers, has been ruled eligible for trial by a federal appeals court in San Francisco. The case, claiming women were discriminated against in pay and promotions, could cost the retailer billions of dollars.

JENSEN DISTRIBUTION PURCHASES ASSETS OF DF MARKS COMPANY; EXPANDS LAWN & GARDEN OFFERING
Doug Miller, President of Spokane, Washington-based Jensen Distribution Services, announced the purchase of certain assets of the Woodinville, Washington-based DF Marks Company. "We are very excited about the addition of nearly 3,000 new products to our current listing of 52,000 items" according to Miller. "The addition of an expanded Lawn & Garden offering will increase our presence in the specialty nursery retail market, a target of future growth for our organization". In a related announcement, Jensen Distribution Services also announced a distribution center expansion "The new building is 120,000 square feet, bringing the total square footage of our facility to over 570,000 square feet of high cube, modern distribution space" according to Jim Hart, senior vice president of operations.

ORGILL HEADS TO TEXAS FOR SIXTH DISTRIBUTION CENTER
County commissioners in Gregg County, Texas, have approved a 30-year agreement that will pave the way for Orgill to build its sixth distribution center, according to a report by the News-Journal newspaper. The 540,000-square-foot facility will be built in Kilgore, roughly 120 miles southeast of Dallas, and is expected to be completed by the first quarter of 2008, a posting on the distributor's Web site said. The distribution center will serve customers in Texas, Oklahoma, Louisiana and southern Arkansas. Orgill is headquartered in Memphis, Tennessee.

KIDS HAVE SIGNIFICANT IMPACT ON BRAND PURCHASES
Children between the ages of six and 11 have a tremendous influence on brand purchases, according to Experian Simmons. Thirty-six percent of parents with children between the ages of six and 11 in the household admit that their children can significantly influence their purchasing decisions. Another 25 percent of those same parents said that it was hard for them to resist their kids' requests for non-essential items. But what do children want and what are they buying? The answers come from the latest Experian Simmons National Kids Study from fall 2006. The fall 2006 National Kids Study features the following new highlights from children ages six to 11:
     • Forty (40) percent of MP3/Digital Media Player owners
        reported owning Apple's iPod
     • 975,000 have visited/used MySpace.com in the last month
     • 2,376,000 have downloaded music online in the last month
     • 1,367,000 have written or read an online journal/blog in
        the last month
     • Fifty-four (54) percent (or 13,078,000) have a television
        in their room
     • Twenty-six (26) percent (or 6,263,000) have a stereo in
        their room
     • Nineteen (19) percent (or 4,658,000) have a computer in
        their room
(Source: Nation's Building News)

AHMA'S HARDLINES TECHNOLOGY FORUM® GARNERS INDUSTRY SUPPORT
The effect of technology is reaching across industries as leading organizations from multiple product categories and resources step up their support for the American Hardware Manufacturers Association's annual Hardlines Technology Forum® (HTF®). "For the last 15 years, AHMA's Hardlines Technology Forum® has been the premier technology conference for the hardware/home improvement industry," said Timothy S. Farrell, AHMA's president and chief executive officer. "But, over the past several years, industry lines have blurred as manufacturers, distributors, and retailers alike have crossed into new product channels to expand their market share. With such diversity comes additional complexity to manage and support multiple customer requirements. The strength of HTF® is its ability to bring together all of the players from the various product categories and channels to determine the best practices and standards on a unified platform to successfully respond to the demands of today's supply chain." To date, eleven leading organizations are lending their support to HTF®, including the International Housewares Association (IHA), the Plumbing Manufacturers Institute (PMI), the Home Center Institute (HCI), and the Industrial Supply Association (ISA). As the only technology conference that promotes and encourages collaboration and participation to resolve industry issues, HTF® provides a unique opportunity that is unparalleled in any industry. Buyers and Sellers openly and actively address technology challenges and the impact they have on their businesses. The acclaimed Buyer/Seller Forums, Retail Panel, and case studies literally close the communication gaps between both sides of the supply chain to foster the high standards required to effectively implement electronic commerce. The 2007 AHMA Hardlines Technology Forum® will be held April 22 – 25, 2007 at Disney's Contemporary Resort in Orlando, Florida. The 2007 conference will offer a signature keynote address; more than 50 breakout sessions on topics such as supply chain management, data synchronization, bar coding, RFID, data standards, and CPFR; an interactive buyer-seller forum; Retail Panel; tabletop exhibits; and networking opportunities. For more information on HTF®, visit www.ahma.org/htf.

SEARS ORDERED TO PAY $73.5 MILLION TO BONDHOLDERS
Sears Holdings has been ordered to pay about $73.5 million to bondholders in a case stemming from the company's redemption of bonds after it sold its credit card business, according to the Houston Chronicle. A jury in a Texas state district court said Sears violated contracts with institutional bondholders including J.P. Morgan Securities and subsidiaries of American International Group. Sears said it will appeal the verdict. The trial judge rejected additional claims by bondholders that Sears misled investors about the bonds in regulatory filings. Sears redeemed the bonds in 2004 after selling its credit card division. The company said it would take a fourth-quarter after-tax charge of $44 million following the verdict. Sears said the amount could grow if it is ordered to pay interest or other amounts to the bondholders.

HOME DEPOT REVEALS NEW CEO FRANK BLAKE'S PAY PACKAGE; JUDGE ALLOWS NARDELLI'S SEVERANCE
Home Depot's new CEO and Chairman, Frank Blake, could earn about $8.9 million, 89 percent of which is tied to performance, according to regulatory filing by the retailer. Unlike his predecessor, Bob Nardelli, who resigned on January 2, Blake's package does not have salary minimums, a guaranteed bonus or severance benefits. Additionally, Blake's arrangement does not include "evergreen" features by which the CEO's package is automatically renewed. About 89 percent of Blake's compensation is based on company performance, predominantly determined by Home Depot's share price. Blake will receive a base salary of $975,000 but will not receive any restricted shares in 2007, the company said. The package is a far cry from Nardelli's who by the end of 2005 had received compensation worth $154.3 million, not including stock options, despite the company's lagging stock price. The company has not revealed the former CEO's pay for 2006. In other news, A Georgia judge refused to block the $210 million severance pay package of former Home Depot Chairman, President and CEO Bob Nardelli.

EMERY-WATERHOUSE ACQUIRES MORGAN DISTRIBUTION
Emery-Waterhouse, a Maine-based, privately owned distributor of hardware and building materials, closed on the purchase of the assets of the Morgan Distribution Company, a specialty distributor in the building supply business. Emery-Waterhouse intends to continue operation of Morgan Distribution Company's two existing facilities in Dunmore, Pennsylvania, and West Haven, Connecticut. Morgan will operate as a wholly owned subsidiary.

STANLEY WORKS' PROFITS SURGE 39 PERCENT IN FOURTH QUARTER
Stanley Works reported fourth-quarter sales of $1.019 billion, up 21 percent. Excluding sales from recent acquisitions, including Famcom Tools and National Hardware, sales were flat for the quarter. The New Britain, Connecticut-based tool manufacturer also reported a fourth-quarter net income from continuing operations of $87 million, up 39 percent over earnings of $64 million during the same period in 2005. For the full year, sales increased 22 percent to $4.019 billion, thanks to acquisitions, the company said. Net income from continuing operations for the year grew nearly 7 percent to $291 million compared with a net income of $272 million in 2005.

BLACK & DECKER EARNINGS SLIP
The Black & Decker Corporation's net earnings from continuing operations for the fourth quarter of 2006 were $95.7 million, versus $99.8 million for the fourth quarter of 2005. For the full year 2006, net earnings from continuing operations were $486.1 million compared to $532.2 million for 2005. Sales from continuing operations decreased seven per cent for the quarter to $1.6 billion.

WAL-MART U.S. SAME-STORE SALES ROSE 2.2% IN JANUARY, 2% FOR THE FISCAL YEAR
Wal-Mart Stores, Inc. announced same-store sales in the U.S. rose 2.2 percent in January. Total sales for the month increased 11 percent to $31.69 billion, with $20.47 billion at Wal-Mart stores and $3.67 billion at Sam's Club. International sales increased 18 percent to $7.55 billion.
For the fiscal year ended February 3, U.S. same-store sales grew 2 percent. Total U.S. sales increased 12 percent to $352.08 billion, with $230.7 billion at Wal-Mart and $42.28 billion at Sam's Club. International sales for the fiscal year grew 29 percent to $79.74 billion.

U.S. REMODELING SPENDING TO INCREASE
Spending on home improvements by U.S. homeowners is expected to increase at a 3.7 percent inflation-adjusted compound annual rate over the next decade, says a report by the Remodeling Futures Program of the Joint Center for Housing Studies. "The 2006 slowdown in the broader housing sector was reflected in the remodeling industry, with many homeowners putting their improvement activity on hold until the market stabilizes," says Nicolas P. Retsinas, director of the centre. "When the industry emerges from its current slowdown, investments in older homes that missed the last round of home improvements, the desire for energy efficiency retrofits, and growing pressure to upgrade the rental stock will ensure a healthy recovery."

COLOR ASSOCIATION HIGHLIGHTS HUES OF THE FUTURE
Christine Chow, director of membership for The Color Association of the United States, presented a color forecast during the recent Las Vegas Market home furnishings trade show at World Market Center January 29 through February 2, 2007. Chow spoke about the latest colors, textures and fabrications impacting the home furnishings landscape and how these trends will shape buyers' purchase decisions. Color is inter-linked in fashion and home trends, Chow said. The outside is coming inside as nature influences a palette of aged or weathered moss greens, browns and stone grays accented with kabuki reds and sky blues. In 2008-09, color sources are coming from the Far East, Indian Market and the New England Shores in aged neutrals, landscape blues, greens and ivory. In home décor, indigo is the new black, giving way to deeper blues. Japanese themes are reflective of sober, refined plums and olive greens. Metallics, aged and in hues of brass, pewter and copper, continue as a new neutral. Expressionistic colors evoke bold emotions and lush colors. Chow pointed to Nama Rococo wallpaper studio as an example of dramatic styles that are coming into vogue. In outdoor fabrics, expect unexpected color combinations, organic prints and patterns. (Source: ImageWords Publicity & Writing)

MORE EXECUTIVE RESIGNATIONS AT HOME DEPOT
In the latest round of executive changes at Home Depot, the company announced that Frank Fernandez, executive vice president, secretary and general counsel, and Dennis Donovan, executive vice president-human resources, have resigned effective February 14. The resignations arrive less than a month after former CEO and Chairman Bob Nardelli resigned, following shareholder indignation over his lofty compensation package despite the company's sagging stock price. Donovan was among several former General Electric executives brought on board when Nardelli took over as CEO in 2000. He was also the highest paid human resources executive in the United States, according to a report by the Financial Times.

SEARS HOLDINGS CFO RESIGNS
After less than six months on the job, Sears Holdings Chief Financial Officer Craig Monaghan has resigned. William Crowley, Sears's chief administration officer, is temporarily replacing him until a full-time replacement is found. Monaghan is a former CFO at AutoNation, the largest U.S. retailer of new and used cars. Sears Holdings chairman Edward Lampert is a director at AutoNation. This is the third executive change. On January 17, the company appointed former Best Buy executive John Walden to the newly created position of chief customer officer. On January 16, Joan Chow left her position as chief marketing officer of the Sears Roebuck & Co. division.

WAL-MART SHAKES UP MERCHANDISING RANKS
Wal-Mart Stores reorganized its U.S. marketing and merchandising areas, naming John Fleming as chief merchandising officer, and announcing the retirement of Doug Degn, executive vice president-food, consumables and hardlines. Fleming takes the top merchandising post after almost two years of leading Wal-Mart's U.S. marketing division. Before that, he was in charge of Walmart.com, which he grew into one of the country's top three destinations for online shopping, according to Wal-Mart. He also spent 19 years with the department stores division (Dayton Hudson and Marshall Fields) of Target. There he held a variety of positions, including senior vice president-merchandising for the fashion divisions. Additionally, Claire Watts, executive vice president-merchandising, will now lead the apparel merchandising area and report to Fleming. Stephen Quinn is being promoted to executive vice president and chief marketing officer, replacing Fleming. The moves follow the late 2006 departure of marketing communications chief, Julie Roehm, and her vice president, Sean Womack.

NEW HOME SALES AND HOUSING STARTS RISE IN DECEMBER; EXISTING HOME SALES SLIP
Sales of new single-family homes rose 4.8 percent in December to a seasonably adjusted rate of 1.12 million units compared to the revised November rate of 1.069 million units. But the latest figures released by the Department of Commerce are 11 percent below the December 2005 estimate of 1.259 million units. For the year, new home sales fell 17.3 percent to 1.061 million units from the 2005 figure of 1.283 million, representing the biggest decline in 16 years. The number of new homes for sale at the end of December fell to 537,000 from 542,000 a month earlier, representing a 5.9-months supply at the current sales rate. The median sales price in December was $235,000 from a downwardly revised $232,000 in November 2006. New home sales in December rose 27.3 percent in the Northeast, 26.6 percent in the Midwest and 0.3 percent in the South. In the West, sales fell 4.4 percent for the period. Total housing starts in December, including condos and apartments, rose 4.5 percent to a seasonably adjusted rate of 1.642 million units, according to figures released by the Commerce Department. The latest results are 18 percent below the December 2005 rate of 2.002 million units. Regionally, construction of new homes and apartments rose 25.6 percent in the Northeast, 1.8 percent in the Midwest and 12.4 percent in the West. Housing starts declined in the South by 2.0 percent over the month. Existing-home sales for the month of December fell 0.8 percent to a seasonably adjusted rate of 6.22 million units from a level of 6.27 million units in November, according to the National Association of Realtors. Sales were also down 7.9 percent from the pace of 6.75 million units in December 2005. But 2006 also marked the third-highest sales year on record, the association said. Including single-family homes, townhomes, condominiums and co-ops, there were 6.480 million existing-home sales in all of 2006, down 8.4 percent from a record 7.075 million in 2005. The second-highest total was 6.779 million in 2004.

PRO GROUP PLANS JUNE GROUP MERCHANDISING CONFERENCE
Distributor members of Val-Test will join PRO Group, Inc. distributors at the Group Merchandising Conference (GMC) June 11-13, 2007 at the Embassy Suites Hotel in downtown Atlanta. The event is expected to draw approximately 250 home improvement industry executives, including 35 distributor companies and 90 key manufacturing companies. PRO Group launched the Group Merchandising Conference two years ago in response to distributor and manufacturer requests for meetings between buyers and sellers. "PRO Group executives invited Val-Test to participate in the event as a way to make participating even more meaningful for manufacturers," said PRO Group President and Chief Operating Officer, Steve Synnott. Synnott explained, "As our Group Merchandising Conference evolved and continued to sell out, we realized that there would be some terrific efficiencies if we took the event to the next level by inviting another distribution group to participate. With Val-Test distributor members attending--in addition to the PRO Group family of distributors--manufacturers can see 35-plus distributors in one location." Russell Meeks, president of Val-Test, said, "This event will mark the first time the two distribution groups have co-hosted an event. We look forward to this event, and the synergies that our two groups can get by teaming up." Meeks added, "This is not a merger, however, PRO and VAL-TEST can work together to make the GMC an even bigger and better event for our members and suppliers."

UPCOMING DISTRIBUTOR SHOW DATES & EVENTS
 

Southern Hardware  Spring Road Show 3/1/2007 – 3/31/2007  Road Show through AR, MS, LA, MO and TN  mrogers@southernhardware.com   Harrington & Company  Dealer Market  3/4/2007 – 3/5/07  Davis County Convention Center  Layton, UT  mbooth@iwon.com

Persinger Supply Company  Spring Dealer Market  3/10/2007 – 3/11/2007  Charleston Civic Center  Charleston, WV  bperry@persingersupply.com   McGregor Hardware, Inc.  Dealer Market  3/17/2007 – 3/18/2007  Springfield Fairgrounds E-Plex  Springfield, MO  rgarner@mcgregorhardware.com

 

Charlie Knoll (click to enlarge)		PROfiles: CHARLIE KNOLL Director of Technology, Charlie Knoll, has been with PRO Group, Inc. since August 1999. Charlie's role includes managing the PRO Group user base of 30 internal users and 300 external Extranet users along with overseeing systems for PRO Group and the company's operating units. Charlie has 14 years of experience in database design and systems development and developed the PRO-ADS system, which allows PRO Group Distributors and Retailers to set up fully customized advertising circulars using the Internet. Charlie and his department have been charged with helping PRO employees be successful in integrating Web enhancements in their day-to-day work. Charlie is a graduate of the Blacksburg, Virginia-based Virginia Tech and resides in Denver. PRO Group President and Chief Operating Officer Steve Synnott said Charlie's department plays an increasingly important role in the future direction of PRO Group, Inc. "The way we apply technology at PRO Group shapes how value is added for Distributor Members and Retailers," Synnott said. "The programs and systems developed directly impact the profitability and competitive position of not only our partner Distributors and Manufacturers, but thousands of Retailers as well." Synnott said Charlie is charged with the task of creating further enhancements to the PRO-ADS System and leading a continuous improvement cycle for PRO Group's information infrastructure.

SUCCESS
"There are no secrets to success. It is the result of preparation, hard work, learning from failure."

-Colin Powell