HHIQ 2Q 2016

EDITOR’S MESSAGE
THE WEDNESDAY THAT
SHOOK THE INDUSTRY.
Don’t kid yourself. Lowe’s takeover of RONA inc. is going to affect
this industry at every level. But the news isn’t all bad.
MICHAEL McLARNEY, EDITOR
I
f the importance of a news story can
be gauged by how many calls and
emails I receive, then the announced
takeover of RONA by Lowe’s would rank as
one of the biggest this industry has faced
in the last 10 years.
The story broke at 6:17 a.m. on
Wednesday, February 3. By 6:32, the emails
started flooding in and by 6:57 a.m., my
cellphone began ringing. What will this
deal mean for the hundreds of RONAaffiliated
dealers, for the hundreds more
independents served by RONA through
its Ace Hardware Canada division in
Winnipeg? What will it mean to Lowe’s,
which is first and foremost a big box retailer?
And what will it mean for Canadian
retailing, now that yet another homegrown
company will be foreign-owned?
Independents I’ve talked with are
worried about the future of the RONA
brand, while Ace dealers are not sure what
the future is. The good news is that Lowe’s
Canada wants different banners and
different store sizes. RONA will continue
to be a separate banner from Lowe’s
and Ace will be part of the mix, as well.
Lowe’s growth strategy embraces different
footprints and banners to suit the varied
retail landscape, supported by aggressive
online sales. Lowe’s Canada President
Sylvain Prud’homme has a background in
grocery and has told HARDLINES that he
recognizes the value of multiple banners,
some independently owned, from his days
as an executive at Loblaw.
So Lowe’s is prepared to make it work, and
make it work with the network of independents
that come along with the deal. That’s
a smart move: I’ve found that the dealers
that have stayed with RONA through its
ups and downs are dynamic independents
“
who get strong support for their brand in
their local communities.
That local strength can’t be underestimated.
Greg Drouillard, a TORBSA member from
Windsor, Ont., said it best: “I believe the
independents—the Home Hardwares of the
world—will continue to innovate, continue
to rise to the challenges put forth by the
Americans. We might all get leaner going
forward but, I think, stronger. Patience and
persistence will ‘win out’ in the end.”
That persistence has served independents dents
well through decades of constant change.
But the fact is that a Canadian company
that worked with Canadian vendors and
understood Canadian dealers is now a
division of the world’s second-largest
home improvement retailer based in North
Carolina. The very thing RONA’s growth
plan was originally designed to counter
when Robert Dutton took over as president
and CEO in 1992 has come to pass.
I’ll leave the last word to Roy Perkins, a
RONA dealer in Windsor, Ont., who emailed
me shortly after the news of the Lowe’s
Independents I’ve talked with are
worried about the future of the RONA brand,
while Ace dealers are not sure what the future is.
”
takeover broke. “Last, but not least, it’s a sad
thing that Mr. Dutton’s (who I have a lot of
respect for as a person) dream of competing
head-to-head with all competitors has died.
In hindsight it was a good idea to go public,
in order to grow to the size RONA became
… but as of Wednesday this week, being a
smaller, Canadian-owned company seems
like a nice thing to be.”
mike@hardlines.ca
www.hardlines.ca Hardlines Home Improvement Quarterly SECOND QUARTER / 2016 7