Volume 18, Number 6
July 26, 2007
 

Paul L. Cosgrave

DON’S LUMBER PRO HARDWARE WINS PAUL L. COSGRAVE MEMORIAL AWARD Weider's PRO Hardware, Danny's PRO Builder's Supply and Barmon PRO Lumber also earn honors Don's Lumber PRO Hardware Greensburg, Kentucky From Front to Back and Left to Right: Wanda, Troy, Brian and Chad Basham 2007 Paul L. Cosgrave Memorial Award Winner 2006 Wallace Hardware Company PRO Retailer of the Year Denver-based PRO Hardware has named Don's Lumber PRO Hardware of Greensburg, Kentucky the winner of the 2007 Paul L. Cosgrave Memorial Award. The company, owned by the Basham family, was also recognized as the 2006 PRO Hardware Retailer of the Year for Wallace Hardware Company at Wallace's spring "Proud to be an American" Dealer Market in Gatlinburg, Tennessee in May.  The Paul L. Cosgrave Memorial Award, presented annually to a PRO Hardware retailer, recognizes superior commitment to the principles and ideals of effective hardware merchandising developed by PRO Hardware founder Paul L. Cosgrave.  "We are honored and humbled to have received the Paul L. Cosgrave award and to have been named as a PRO Hardware Retailer of the Year," said Don's Lumber PRO Hardware Manager and Buyer Brian Basham. "While we have received awards in the past, this one is extra special because our employees did all of the work on our Greensburg location.  Everything we do goes back to them and this award reflects their hard work. I know my Dad would be especially proud of this award."  Founded 14-years ago by the late Don Basham, Don's Lumber PRO Hardware is now run by his widow, Wanda Basham, and their three sons. More than half the store's 19 employees have worked for the family for more than a decade.  The Bashams attribute the stores' success to hard work, long hours, great employees and the guidance provided by Wallace Hardware and the PRO Hardware programs.  "Wallace Hardware and the PRO Hardware program are both part of the heart and soul of our company and represent the past, present and future of Don's Lumber," Basham said. "They have been by our side from the beginning.  Integrity and honesty were very important to my Dad and I know he thought very highly of both Wallace Hardware and PRO.  "Don's Lumber PRO Hardware in Greensburg, Kentucky is a living testimony to perpetuating a legacy," said Richard Snowden, Vice President of Wallace Hardware Company. "Don Basham was a very forward-thinking, innovative business man. He instilled this visionary thinking in his sons, Brian, Troy and Chad. He also developed it in his Greensburg team including Chris Coule, store manager, and Rick Collins, hardware manager. With determination and hard work, they make the Greensburg store fit Don's vision." Other Award Winners: * The 2007 Paul L. Cosgrave Award finalist and the 2006 PRO Hardware Retailer of the Year for The Bostwick-Braun Company is Weider's PRO Hardware of Honeoye Falls, New York.  * The 2006 PRO Hardware Retailer of the Year for Long-Lewis Hardware Company is Danny's PRO Builder's Supply of Centre, Alabama. * The 2006 PRO Hardware Retailer of the Year for Horizon Distribution is Barmon PRO Lumber of Sultan, Washington. PRO Hardware Retailers of the Year are selected based upon merchandising, inventory management, PRO key supplier support, advertising, store identification, sales and financial performance.  Full Press Release                                   Weider's PRO Hardware Honeoye, New York Ned and Lisa Green 2007 Paul L. Cosgrave Memorial Award Finalist 2006 The Bostwick-Braun Company PRO Retailer of the Year   Barmon PRO Lumber Sultan, Washington Dan and Lauretta Barmon 2006 Horizon Distribution, Inc. PRO Retailer of the Year   Danny's PRO Building Supply Center, Alabama Dan Johnson 2006 Long-Lewis Hardware Company PRO Retailer of the Year

HOME IMPROVEMENT CHAIN CLOSINGS OUTWEIGHED OPENINGS IN JUNE
In its monthly list of home center openings and closings, Chain Store Guide showed 25 new home channel chain stores opened in the United States, while 116 closed in June. Home center stores include major big-box chains such as Home Depot, Lowe's and Menards.  That's a shift from May, when 42 new home channel chain stores opened in the United States and 26 closed. In June, the Midwest showed the highest percentage both of home channel stores that were opened (28 percent of the total) and stores that were closed (30 percent).  Stores under the header of "category killers" did not fare as well -- while 281 new stores opened nationwide, 989 stores closed. Discount stores showed more strength, with 15 total openings nationwide and no closings.  Chain Store Guide is a subsidiary of Lebhar-Friedman, publisher of Home Channel News.

COURT RULES MANUFACTURERS CAN SET MINIMUM PRICES

The Supreme Court ruled 5-4 that manufacturers can legally set minimum prices for the sale of their products through retail channels. The ruling reverses a nearly 100-year old ban on such price agreements, but it leaves the door open for anti-trust litigation in cases where competition is seen as being limited in the open marketplace.

You can read the full decision here: http://www.supremecourtus.gov/

STANLEY NAMES NEW DIRECTOR

The Stanley Works this morning announced the election of Robert B. Coutts as a new member of the Board of Directors. Coutts is Executive Vice President, Electronic Systems, Lockheed Martin Corp.

SNAP-ON BRINGS AUTO INDUSTRY VETERAN TO BOARD
Kenosha, Wisconsin-based Snap-On, a maker of tools and power equipment, has named James Holden as non-executive chairman of its board of directors.  Holden, 56, is a veteran of the automobile industry, where he worked for 19 years with DaimlerChrysler and its predecessor, Chrysler.  "He brings tremendous automotive and technology experience that will benefit Snap-on as it continues to execute its growth strategies," said Dudley Lehman, Snap-On director and chair of its corporate governance and nominating committee.

DO IT BEST NAMES NEW RETAIL DEVELOPMENT VICE PRESIDENT
Do it Best Corp. has named Jay Brown to the post of vice president-retail development.  Brown formerly served as vice president-merchandising at the co-op, where he helped open two global buying offices in Asia. He also helped bring such programs to the co-op's biannual markets, including the "Friday Night Sneak Peek" and "Power Tool University."   Previously, Brown was senior general manager for paint manufacturer Valspar.

PENDING HOME SALES AT LOWEST LEVEL IN SIX YEARS
The pending home sales index, a measurement based on home contracts that have been signed, fell in May to its lowest level in six years, according to the National Association of Realtors.  The national index was 97.7 in May, down 3.5 percent from April and 13.3 percent from May of last year.  Housing activity continued to be affected by tighter lending criteria for mortgages and a lack of buyer confidence, according to Lawrence Yun, NAR senior economist.  "Some transactions are being postponed from mortgage market disruptions," he said. "But better supervised lending will put housing in a fundamentally healthier state over the long term."   Pending home sales rose 5.6 percent in the West to 95.4, but the index still is 13.7 percent below a year ago. In the Northeast, the index increased 3.8 percent from April to 93.1 but is 9.6 percent lower than May 2006. The index in the South fell 7.6 percent in May to 107.2 and was 15.4 percent below a year ago. In the Midwest, the index dropped 8.9 percent in May to 89.4 and was 11.7 percent below May 2006.

3M OPENS 'EStore'
3M, maker of a broad range of consumer products including Filtrete air filters and SandBlaster home improvement abrasives, is offering an array of goods to online retail customers at its new 'eStore' at 3M.com.  At the site, customers in the 48 contiguous states can purchase from a selection of 3M products with a credit card. The company said research suggested customers became more aware of the brand when they were exposed to the full product array offered by 3M.

PRO PROMOTIONS: BUCKET SALE

Last year PRO Hardware began printing its logo and name on five gallon buckets.  Retailers have given away hundreds of buckets at anniversary sales and other major events and now those PRO Hardware buckets are gracing backyards and construction sites across several states, silently promoting PRO Hardware.  The bucket idea came directly from PRO Hardware retailers, said PRO Group Managing Director Shari Kalbach. The PRO Hardware buckets have become popular with retailers because they have seen a return on their investment. "I think it's more than just selling buckets.  It's really driven by the in-store promotions.  The way the retailers are using the buckets helps drive sales in their stores," Kalbach said. "Having the buckets out there helps spread the brand among their target customers and we hope that will bring new customers in.  We encourage our retailers to make sales and promotions into events.  Instead of just selling the buckets, they incorporate them into a memorable experience that their customers will remember."  The bucket promotions have been a great success for PRO retailers. As several store owners attest, it's a win, win, win situation.  "The customers were excited, it was something everyone could use," said Steve Price, owner of PRO Hardware in Morristown, Tennessee, which gave away buckets to customers as part of a sale.  Poultry Electric PRO Hardware in Winchester, Tennessee decided to give away buckets at an anniversary sale. The store's aim was to increase their customer base with do-it-yourselfers and home owners and spread the brand before the opening of a big-box hardware retailer opens in town at the end of summer.  Kuhn's Bros PRO Hardware in Milton, Pennsylvania used the buckets to promote its grand opening, offering customers 20 percent off anything they could fit in the bucket, except high-ticket items like power tools.  Brian Basham of Don's Lumber PRO Hardware in Greensburg, Kentucky said that after hearing the success stories at other retailers, he is considering using the buckets as a promotional tool.  "We have been selling the PRO Hardware buckets since they first became available," Basham said. "It's good to get the PRO logo out into the neighborhoods with our contractors and 80 percent of our business is to contractors who love using the buckets. We stock them and sell them."

HOME DEPOT CUT ITS 2007 EARNINGS OUTLOOK

Home Depot cut its 2007 earnings outlook citing weakness in the U.S. housing market. The company said it expected 2007 earnings per share to fall 15% to 18% from a year earlier, to a range of $2.30 (U.S.) to $2.36 per share. The company earned $2.79 per share in fiscal 2006.  Home Depot said it expected 2007 total retail sales to decline by 1 to 2 percent and same-store sales to fall by mid-single digits. Previously, Home Depot had forecast total sales growth of 0 to 2 percent.  Home Depot said its updated targets reflect its HD Supply business, which provides building materials to contractors, as a discontinued operation. That business is set to be sold for $10.3 billion to a group of private equity firms.  Home Depot's May forecast, which had included the discontinued business, had called for a 9 percent decline in annual profit.

SEARS LOWERS SECOND QUARTER OUTLOOK

Sears Holdings Corp. announced same-store sales for its Kmart stores fell 3.9 percent and Sears stores fell 4.0 percent for the first nine weeks of the second fiscal quarter.  In light of those sales results, the company now predicts second quarter income for the period ending August 4, 2007 will be between $160 million and $200 million. Net income in the year-ago second quarter was $294 million.

NEWELL RUBBERMAID WEB CASTS SECOND QUARTER RESULTSNewell Rubbermaid released its second quarter 2007 earnings results on July 26 during a Live Web Cast which will be available for two weeks.

SAME-STORE SALES UP AT WAL-MART, TARGET

According to the International Council of Shopping Centers, June sales at 50 retailers in the United States rose 2.4 percent, up from an initial forecast of between 1.5 percent and 2 percent. Last year, sales rose 3 percent in June.  At Wal-Mart, same store sales increased 2.4 percent. Total company sales, including Sam's Club stores and international sales, were up 9.4 percent to $35.8 billion and $32.73 billion in June of last year.  At Target, same store sales were up 3.3 percent. Total sales were up 7.6 percent to $5.5 billion from $5.1 billion last year.  At Costco, same store sales rose 6 percent. Total sales rose to $6.35 billion for June, up 10 percent from $5.78 billion in June of last year.

PERMIT ACTIVITY FALLS SHARPLY IN JUNE

While housing starts rose slightly in June the number of housing permits issued fell sharply, according to figures released by the Commerce Department.  Housing starts rose 2.3 percent in June to a seasonally adjusted annual rate of 1.467 million. Total building permits fell 7.5 percent in June to a seasonally adjusted annual pace of 1.406 million units and were down 25.2 percent from a year earlier.  "The small overall increase in total housing starts does not signal the end of the housing downswing," said National Association of Home Builders chief economist David Seiders. "All of the gain occurred on the multi-family side, which is subject to sizeable month-to-month volatility."  Starts of new single-family homes slipped by 0.2 percent during June to a seasonally adjusted annual rate of 1.151 million units, 21.6 percent below a year earlier.  Multi-family housing starts, on the other hand, increased 12.5 percent during the month to a seasonally adjusted annual rate of 316,000, which was 9.7 percent below the rate of June 2006.  Total building permits fell 7.5 percent in June to a seasonally adjusted annual pace of 1.406 million units and were down 25.2 percent from a year earlier.  Single-family permit issuance last month fell 4.1 percent to 1.019 million units, 27.5 percent below a year earlier, while multi-family permits declined 15.3 percent to 387,000 units, which was 18.4 percent below the annual rate set in June 2006.  Regionally, starts of new homes and apartments in June were up 9 percent in the West and 2.4 percent in the South, following sharp declines in May. Starts were down 3.7 percent in the Midwest and 2.4 percent in the Northeast. All four regions experienced a construction pace that was down substantially from a year earlier.

NEW HOME SALES FALL IN MAY
According to the Commerce Department, new home sales fell in May for the fourth time in five months, providing further evidence of a continued slump in housing.  Sales of new single-family homes fell to a seasonally adjusted annual rate of 915,000 units, down 1.6 percent from April's revised rate of 930,000 units. Year-over-year, new home sales fell 15.8 percent.  The median sales price of new houses sold in May fell to $236,100 from $238,200 a year earlier.  Sales were down 7.3 percent in the South and 11 percent in the Northeast. Sales fell slightly by 1.9 percent in the West. In one bright spot, the Midwest saw new home sales jump 30.8 percent.  The inventory of unsold homes did drop by 1.1 percent in May to 536,000 units. However, because the sales pace was slower, the length of time it would take to deplete inventories actually rose to 7.1 months, up from 7.0 months in April.

MAY EXISTING-HOME SALES DROP SLIGHTLY MONTH-OVER-MONTH

May existing-home sales dropped slightly over April by 0.3 percent, to a seasonally adjusted annual rate of 5.99 million units, compared with 6.01 million units last month.  Year-over-year, existing-home sales fell 10.3 percent from 6.68 million units in May of last year.  "I think psychological factors are currently the biggest drag on the housing market, in addition to a disruption from tighter credit for sub-prime borrowers," said Lawrence Yun, senior economist for the National Association of Realtors (NAR). "Household formation has slowed dramatically since late 2006, implying that many people are doubling-up -- they're adding roommates or moving in with parents."  The national median existing-home price for all housing types was $223,700 in May, down 2.1 percent from $228,500 in May 2006.  Regionally, existing-home sales in the Northeast rose 5.8 percent to a level of 1.1 million in May but are 3.5 percent lower than May 2006. The median existing-home price in the Northeast was $282,700, which is 0.5 percent higher than a year ago.  Existing-home sales in the Midwest rose 0.7 percent in May to a level of 1.41 million but are 6.6 percent below a year ago. The median price in the Midwest was $168,800, which is 1.7 percent below May of 2006.  Existing-home sales in the West slipped 0.8 percent in May to an annual pace of 1.18 million and are 16.3 percent below May of 2006. The median price in the West was $341,900, which is 0.5 percent lower than a year ago. Existing-home sales in the South fell 3.4 percent to an annual sales rate of 2.3 million in May and are 11.9 percent below a year ago. The median price in the South was $184,000, down 3.8 percent from May 2006.  According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.26 percent in May, up from 6.18 percent in April; the rate was 6.6 percent in May 2006.   "Although mortgage interest rates are trending up, they are historically favorable," said NAR President Pat Combs. "The good news is buyers have more negotiating power with a fairly large supply of homes available in much of the country."   Total housing inventory rose 5 percent at the end of May to 4.43 million existing homes for sale, which represents an 8.9-month supply at the current sales pace, up from an 8.4-month supply in April.

BUILDER CONFIDENCE FALLS IN JULY

Ongoing concerns about the subprime lending market and a surplus of unsold homes have led to reports of lower builder confidence, according to the National Association of Home Builders (NAHB).  According to the NAHB/Wells Fargo Housing Market Index, confidence declined four points to 24, the index's lowest level since January 1991. Scores from three component indexes are used to calculate the seasonally adjusted index, where any number over 50 indicates that more builders view sales conditions as good than poor.  "The bottom line is that the single-family housing market is still in a correction process following the historic and unsustainable highs of the 2003 to 2005 period," said NAHB Chief Economist David Seiders. "Builders are actively trimming prices and offering buyer incentives to work down their inventories, but meanwhile there is a large supply of vacant existing homes on the market, and affordability problems persist despite efforts to attract buyers.  All four regions of the country reported declines in the index in July. The Northeast and South each saw five-point declines, to 31 and 26, respectively, while the Midwest slipped a single point to 19 and the West declined three points to 25.

UPCOMING DISTRIBUTOR SHOW DATES & EVENTS
 

Janice spent five years as regional manager for Business Wire, a leading global source of online news releases and multimedia content. She advised hundreds of companies on public relations and investor relations strategies, focusing on the value of online public relations to directly reach target audiences. Janice hosted a variety of journalists in a quarterly "Meet the Media" series and developed lasting relationships with print, broadcast and online reporters and editors. In addition, Janice has consulted with law firms in Denver and New York on marketing and research strategies.

Janice earned her M.S. in Marketing from the University of Colorado and her B.A. in Business Administration from Rutgers University. She teaches marketing and communications in Regis University's Master of Nonprofit Management Program.  Janice is a member of the American Marketing Association and has been a guest speaker on various public relations topics for the Public Relations Society of America.  She also presents Cost-Effective Marketing seminars for the Community Resource Center and has served on the boards of the Rockies Venture Club and the National Investor Relations Institute.

LEADERSHIP

" Leaders are people who can discern the inevitable and act accordingly. When people talk about business acumen, discernment is a big part of it. It's a bit like gut instinct, but a little more developed. "