Dick's Lumber to grow under Rona ownership
Retailer buys firm posting more than $100 million in sales
Bruce Constantineau
Vancouver Sun
Wednesday, September 19, 2007
Canadian home improvement retail giant Rona Inc. has acquired yet another Burnaby-based building supply company -- Dick's Lumber -- for an undisclosed price.
The acquisition comes less than 18 months after Rona bought Curtis Lumber as it aggressively acquires market share in the hot B.C. building-supply sector.
"We've been interested in Dick's Lumber for a long period of time," Rona president Robert Dutton said in an interview. "We know where the good businesses are in Canada."
Dick's Lumber, a private company founded by Dick and Delma Alexander in 1964, has locations in Burnaby, Surrey and North Vancouver. It posted more than $100 million in sales in the past year.
Dick Alexander died in 2005, but his son David is the company's corporate general manager, and several other family members work in the business.
Dutton said the purchase of Dick's Lumber gives Rona 54 stores in B.C., about $700 million in annual B.C. sales, and roughly 17 per cent of the provincial building-supply market.
He said Rona and Home Depot are neck and neck in the national market, with Rona having slightly more than 18-per-cent market share.
Dutton said Dick's Lumber met all the criteria for a successful new acquisition -- it's profitable, has a strong management team, and its inclusion in Rona will create synergies.
He said Dick's is also a great fit for Rona because it specializes in sales to tradesmen and contractors.
"They have a really good assortment and quality of products, and great people to help with advice," Dutton said.
He expects Dick's Lumber will double in size over the next five years through organic growth, new stores, and acquisitions that can be added to the Dick's brand.
David Alexander said other companies have offered to buy Dick's Lumber in the past, but the timing of the Rona deal made sense.
"They will take Dick's Lumber to the next level, which will be a very positive thing for all our employees and customers," he said. "We're just at a point now where we have to grow as a business or we'll lose certain people. So we thought it would be better if Rona took it over."
Alexander said he was convinced selling to Rona was the way to go because it's a Canadian company and he liked the way Curtis Lumber employees were treated after Rona bought that firm.
"There was no exodus of employees, and everybody we talked to there didn't want to come to Dick's Lumber because they were happy staying there," he said.
The company has many overseas customers, especially in Korea, Japan and Russia. Alexander said Dick's Lumber once supplied a Russian customer with virtually everything it needed to build and operate an ice rink, including a Zamboni ice-cleaning machine.
Alexander, 51, expects to stay with the new owners for about a year.
Dutton said Rona wants to double its own presence in B.C. through recruitment, acquisitions and building new stores. The company plans to open new stores in Burnaby and Kamloops next year.
Dutton noted the Boucherville, Que.-based company has invested $500 million in the province in the past six years, not including the $65 million it spent to become a "national partner" sponsor for the 2010 Olympics.
"B.C. has a very strong economy, and our concept has been well-accepted by consumers here," he said.
Vancouver retail consultant David Gray said Rona's strength lies in its infrastructure behind the scenes.
"They typically look for successful businesses that are looking to cash out because they're worried about their future in a more competitive world," he said. "It's a really good approach, and it's kind of a win-win for everybody because it's not like it's a hostile takeover."
Gray said Rona is still under-represented in B.C., so its aggressive growth plans for the province make sense.
"There's room for more Ronas for sure," he said.
bconstantineau@png.canwest.com
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BUILDING IN THE LOWER MAINLAND
Dick's Lumber, taken over on Tuesday by
Rona Inc., has been an iconic building-supply company in Metro Vancouver for four decades:
- Founded by Dick (left) and Delma Alexander in 1964.
- It has three locations -- Burnaby, Surrey and North Vancouver -- with more than eight hectares of lumber yards.
- Dick's rang up more than $100 million in annual sales.
- The business employs more than 200 people.
- It serves overseas customers in Russia, Japan, Korea, China and Chile.
http://www.canada.com/vancouversun/n...0-984d3b1686cb
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