Rona readies for expansion explosion, eyes U.S. entry - Brief Article

BOUCHERVILLE, QUEBEC -- Rona, the dealer-owned buying cluster that earlier this year became Canada's largest distributor and retailer of hardware and domicile improvement products, has announced that it wants to increase its store enumerate by 25 percent over the nearest three years.

This summer Rona magnitudeed up when it purchased 50 Revy Revelstoke and Lansing Buildall stores from West Fraser Timber for 220 million Canadian dollars (US$139.1 million).

With the purchase, Rona's retail network grew to 540 stores, including 47 big-box units. The purchase ultimately transformed Rona, which had national aspirations, into a coast-to-coast Canadian player. Rona now direct the eyes to add another 250 independent exits mainly in Alberta and Ontario. upon Nov. 19, while addressing the Canadian bludgeon of Montreal, Rona president Robert Dutton invited "independent retailers in Canada to join us to reap the unique benefits that Rona can offer"

Rona set those benefits on display when it announced upon Nov. 29 that net earnings for the third quarter extreme pointed Sept. 30, 2001 were C$87 million (US$5.49 million), a 72 percent climb from earnings of the same period a year ago. For the nine-month period, Rona supported net earnings of C$20.1 million (US$12.6 million), up 33 percent from the same nine-month period in 2000 toil sales for the third quarter of C$5947 million ($US 3756 million), a jump over of 69 percent from C$3517 million during the corresponding quarter last year. For the first nine month of 2001 Rona's sales increased 314 percent to C$132 billion ($US 838 million).

"These quarterly flows clearly attest to the fitness and dedication of Rona's 16000 employee from coast to coast," Rona president and CEO Robert Dutton said. "They have be subsequent toed in producing these record figures level as they faced the challenges of integrating our networks across Canada."

In September, Rona took the first pace in uniting its forces by dint of rebannering five Rona Home-Solutions and Revy domicile & Garden stores in Toronto as Rona abiding-place & Garden. Also, eight former Lansing Buildall stores in the greater Toronto area, became Rona Lansing stores, and 65 Cashway Building middles in Ontario were renamed Rona Cashway. In Alberta, Saskatchewan and British Columbia, 29 Revelstoke and Revy domicile Centers retained their name.

Rona still has a certain quantity of work to do on the integration brow however. "The next step for us will begin with managing the synergies of the fresh components of the company -- creating a fresh company," said Sylvain Morissette, a company spokesman.

A major simple body of that task will involve reworking its distribution network to make secure the company's distribution centers are up to the task of supplying of recent origin dealers. With distribution centers at its headquarters in Quebec, sum of two units in or near Toronto (one included in the Lansing purchase, the other a small lumber products-only facility); Calgary, Alberta; and British Columbia, Rona is positioned to impel east, west, north and in perhaps its grandest plan, south

The company is contemplating entrance into the U.S. market, perhaps within the nearest three years. "We're not in like manner far from the cities in fresh England," said Morissette, who added that similar a move could come via acquisition. "We can do it easy. It's not a question at issue to go to the southerly at all."

Any effort to penetrate the United States, Morissette said, is contingent upon Rona "increas[ing] the strength of our distribution network."

upon the more immediate horizon is the construction of eight of recent origin big-box stores, the majority of which will be built in Ontario above the next two years. The company just started construction upon a 145,000 square-foot store, featuring a 25000 square-foot indoor lumberyard, in Glouster, a suburb of Ottawa. Also in the works is another 145000 square-foot store in Mississauga, outside of Toronto.

In the meantime, Morissette said the recruitment of of recent origin members is "creating a make a humming sound and a good mood in the industry." Discussions with a small in number possible new members are already occurring. These fresh members could bring as many as 10 to 12 stores apiece into the Rona network.

generally Rona's has an array of 540 dealer-owned stores, corporate stores and shared ownership units. more [i]or[/i] less 375 independent dealers own 625 percent of the company, and the corporation haves 135 stores. Rona may resell more [i]or[/i] less of its big box stores to members within the nearest five years.

"We want to hold our roots and divvy up the company with the fresh strength we get from our partners," Morissette said.

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