Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Rona faces challenges despite overhaul Add to ...

The board of directors has been shaken up, a new chief executive officer is in charge, and a senior vice-president whose mission is to improve operational efficiencies has been hired.

The folks at Rona Inc. say the pieces are coming together in a top-to-bottom renovation of the home-improvement retailer. Observers will be watching closely for signs of progress when the company unveils first quarter results and holds its annual meeting Tuesday.

More Related to this Story

Newly installed CEO Robert Sawyer, a food-retailing industry veteran, will no doubt provide an update on the work being done.

At the end of the month, Alain Brisebois, a former colleague of Mr. Sawyer’s from his days at grocery chain Metro Inc., joins the management team with the key job of wringing more productivity and cost-effectiveness out of the various departments, including purchasing, merchandising, procurement and marketing.

Rona’s ultimate aim is to shrink itself by selling assets and shifting from big-box stores to smaller “proximity” outlets.

But the hardware chain faces major challenges, notably a still-weak consumer spending climate and growing pressure from U.S.-based rivals such as Home Depot Canada and Lowe’s Cos. Inc.

Analysts aren’t expecting any pleasant surprises in the first-quarter results. The consensus estimate according to Thomson Reuters is for a loss of 10 cents in adjusted earnings, the same as a year ago.

Mark Petrie of CIBC World Markets said in a recent research note that cold and wet weather in the first few months of the year – particularly February and March – will likely hobble same-store sales growth, with a strong dealer network unlikely to offset weakness in the corporate and franchise stores. He anticipates a loss for the quarter – the least important, seasonally – of 13 cents.

“Over the last six weeks, Rona has announced two very strong additions to its management team. Both Robert Sawyer and Robert Brisebois have excellent track records and bring strong operations skills to Rona,” Mr. Petrie said.

“Mr. Sawyer has only been on the job for a couple of weeks, so it is still too early to hope for more radical action beyond the strategic priorities outlined by the company earlier this year. However, these hires make us more optimistic that Rona will be able to stabilize its sales and earnings trends despite a very challenging environment.”

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular