Harvey Norman benefits from housing outlook
A strong rise in housing construction in the first six months of 2014 was a good signal for Harvey Norman
CRN Magazine
The company expects a robust outlook for the housing market to underpin its earnings growth
Sales in stores owned by Harvey Norman grew more than 14% to $1.51 billion
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Harvey Norman turned around two years of declining profit and recorded a healthy $211.7 million in profit after tax and non-controlling interests for the year ending 30 June. This is an increase of $69.48 million or 48.9% from the previous year.

The result is ahead of expectations from analysts surveyed by Bloomberg, who had been expecting a result of $203.4 million.

The profit growth was partly due to changes to the valuation of its huge property portfolio. Excluding those factors, profit was up 20% on the previous year to $220.1 million.

A strong rise in housing construction in the first six months of 2014 was a good signal for Harvey Norman's range of furniture and household appliances, according to chairman Gerry Harvey. The company expects a robust outlook for the housing market to underpin its earnings growth.

Sales in stores owned by Harvey Norman grew more than 14% to $1.51 billion from $1.32 billion. Overall like-for-like sales growth was 4.7% in the year to $5.77 billion, due to more modest growth in franchise stores.

Although the number of franchise stores in Australia fell from 206 to 198, sales from those franchisees still increased - up $53.59 million. Harvey Norman has reduced its "tactical support" to franchisees, citing improving sales and profitability of franchises. This reduced spending by $25.27 million for the year.

In addition to the 198 franchise stores in Australia, Harvey Norman's retail activities now include 82 company-owned stores based overseas.

The retailer continues to tout its omnichannel strategy, and now describes each franchise store as a "distribution centre". Harvey Norman is also increasingly using analytics to improve offerings.

In the 2015 financial year it plans to roll out a new merchandise, inventory and supplier management system in the hope of achieving a "transformation" in the way sales people "engage with information and interact with suppliers and customers".

Other plans include technology to more efficiently monitor staff time and attendance, and over the long term provide automated, optimised rostering for franchisees that draws upon customer traffic analysis.
Houzz satisfies Australians' digital needs
Houzz is now based in Australia as well
Houzz pro pages provide links to renovation specialists in the user's area
Products can be featured, complete with price and purchase details
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The announcement that US home renovation startup phenomenon Houzz has opened an Australian division, complete with the domain name, is good and bad news.

It is good news for the over 700,000 current Australian users of Houzz, who make up part of the company's 20 million user audience. It is bad news for the Australian home improvement industry, which has likely by now lost the chance of developing a home-grown version of what is set to become an international home renovation powerhouse.

Houzz not only has an Australian domain name now, it also has an office based in Sydney, and writers working on Australian-themed content. Houzz is also expanding to London, England and Berlin, Germany.

Lest you are tempted to dismiss Houzz as another one of those California-based, venture capital funded, "social networky" things, the website (complete with mobile app) is not the brainchild of some recent graduates who have glimpsed a chance to quickly earn some bucks. It was devised by married couple Alon Cohen and Adi Tatarko when they started their own renovation in Palo Alto, California. They encountered so many difficulties and inefficiencies in the process, they decided to do something to improve the situation.

Starting with an initial group of 20 or so acquaintances they gradually built the web-based service up until, in 2010, they decided to go big. And big they did go, with the company now backed by US$200 million from venture capitalists. The latest round of funding for S$150 million closed in June 2014, and is based on a valuation of the company at US$2.3 billion on a fully-diluted basis.

HNN has mentioned Houzz in the past, in particular the fact that during her lightning annual summary of all things tech, Wall Street Analyst Mary Meeker paused in the tumultuous delivery of information to call out one company - and only one company - for having some outstanding performance metrics: Houzz.

What particularly impressed Ms Meeker was Houzz's combination of social-network like features which enables the sharing of carefully composed information, along with original content written by its own writers, and curated along with user contributed content.

A key part of Houzz which is going to have a significant impact on the Australian market is its facilities for connecting homeowners up with tradespeople, architects and decorators to help them get going with a renovation.

Users access this feature by clicking on the "Find a pro" button at the top of the web page. This instantly brings up a listing of professionals in the users area. In the case of users based in Melbourne , for example, the Houzz website will display a list of over 2000 professionals already registered. This includes over 500 architects, 166 home builders, and 184 people to help with your kitchen renovation. In the trade area it is somewhat less populated, offering just 12 plumbers, 34 carpenters and 22 electricians.

Houzz also offers "Site Designer", which enables professionals with a Houzz profile to easily set up their own website, using Houzz designed templates.

There is also a section that offers access to a catalogue of products, which includes pricing details. Clicking on the image of a product brings up details of how and where to purchase the item. There are also advertising opportunities available for everything from simple suppliers to national brand names.

At the very heart of Houzz is the idea of users sharing pictures. Pre-Pinterest, and almost simultaneously with Instagram, the Houzz founders discovered that photographs have become a primary means of communication amongst their cellphone-carrying crew of users.

While Australia does have a range of websites that are in the same approximate area, such as Home Improvement Pages, which recently closed on several million dollars of funding, it seems unlikely these home-grown solutions will take much market away from Houzz.
Market voodoo won't solve the productivity hoodoo
Peter Harris, chairman of the Productivity Commission
Hardware News Network
The 2011 report on Australian Retail Industry
The 2014 Interim report into Retail Industry
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Australia's Productivity Commission (PC) is currently enquiring into whether expansion by large retailers should be curtailed in a new, more restrictive way. This has surfaced discussions that have been taking place in the home improvement retail industry ever since Woolworths launched Masters and Wesfarmers gave Bunnings the "go-ahead" to start expanding rapidly in response. That situation has echoed similar circumstances in the grocery business, where Woolworths continues to battle with a revitalised Wesfarmers-owned Coles.

Independent retailers have suggested that these expansions will eliminate competition in a way that will not benefit consumers. Wesfarmers and Woolworths have responded that this is just healthy competition, and that consumers stand to benefit considerably.

The result has been a curious conflating of two issues that, while they are linked in many ways, are also really quite different. On one hand there are the arguments about what makes for efficient markets, specifically whether the introduction of a large retailer into a market made up only of small retailers increases or decreases the efficiency of that market. On the other hand, all of this is taking place under the auspices of an enquiry into productivity.
Getting beyond markets

We could say that markets are being used as a kind of proxy for the real issue, which is the productivity problems of the home improvement retail industry itself. In particular what really needs to be discussed is what can be done to make not only the home improvement retail industry more efficient, but all of retail in Australia more efficient.

The PC has already done a great deal of work concerning this. It came out with a report in November 2011, and is now engaged in formulating a new report, with an interim release published in June 2014. Much of what it has brought to the table can at least be glimpsed in some of the graphs provided by the PC.
The growth in home goods retail per person sales

One of the reasons why the home improvement market has become such a focus for these discussions is that it has performed very well. This graph illustrates the growth in per-person sales for homewares as compared to other categories:
Graph of retail sales per person from Productivity Commission 2014 Interim Report
Costs of labour

For many home improvement retailers, the most substantial cost, and one that is to some extent regulated through penalty rates, is labour. As this graph illustrates, hardware and building supplies do spend more on labour than every category except cosmetics:
Graph of retail inputs from Productivity Commission 2014 Interim Report
Productivity of labour

However, beyond the rate of pay, there is another issue at stake here, and that is the actual performance of retail staff. This graph shows where Australia ranked in terms of retail labour productivity in 2007:
Efficiency of the retail workforce global comparison
Multi-factor Productivity

While this sounds like something complex, it is actually quite simple to understand. This is an attempt to find some kind of number which gives you some idea of how productive a company, an industry or an economic sector really is. All it does is to divide the gross output of whatever it is you are measuring by its gross inputs.

The inputs include labour costs, capital costs, materials, energy and so forth. It is literally about "if you put this much in, you get this much back out". If the number gets bigger that indicates you are either getting more out, or having to put less in.

This graph measures the growth in various inputs into the retail sector during the 12 years from 1995 to 2007 for Australia and the US. The MFP is of particular interest (which is why it is highlighted) because it shows US retail productivity grew by about 10 times as contrasted to Australian retail productivity:
Retail inputs and productivity growth

Just to really make the point of this graph, this is another graph from the Australian Bureau of Statistics. It tracks MFP in the Australian retail industry from 1985/86 to 2005/06, and illustrates how shallow the growth in this measure has been:
ABS graph of MFP in retail

What makes retail operations so inefficient, and why does that inefficiency continue? There is sometimes a belief that somehow Australian workers are simply not as productive as workers of other nations. This is utter, absolute nonsense. The real responsibility for poor levels of productivity has to rest with management, which determines how the workers are actually utilised in the business.

It is a rather sad fact that Australian business tends to treat the retail trade as some kind of unsophisticated second-cousin. It's the industry that people who didn't have the patience or (they thought) the capacity for a university degree would go into, knowing that this lack of education would not hold them back, as much of their training would be "on the job".

Bankers, aerospace executives, marketing honchos, even - today - journalists are all expected to be trained and educated. But except for the top executive ranks of larger companies, business management is something retailers pick up on the job.

Maybe 15 years ago that would still work, but it seems less likely to work well today. There are too many opportunities that are being missed, not because people in charge of retail are lacking in intelligence, but because they find it difficult to engage with new ideas and to try those out.

No one knows instantly how to work a brand new computer system, for example. But those who have had a few years of extra education often do learn the single most valuable skill you can have today: how to go about effectively learning new things.

If we really want to improve productivity in Australian retail, it would seem the best place to start would be in equipping managers at all levels the with the tools they really need to manage. If the PC really wants to get the industry to a higher level of performance, it could do worse than to focus on providing some kind of education subsidies, as well as working with employers to develop a pathway that combines work with tertiary studies in management skills.

Until next time,


For any feedback, comments or story tips, you can contact me directly via email or Twitter @HNN_Australia
Big box update
Initial ground-works have been completed for the new Bunnings Batemans Bay store
HNN Sources
Woolworths has decided against building a masters store in Glynde (SA)
New Gympie Bunnings store is being filled with more than 45,000 different retail lines
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The construction phase has officially begun on the Bunnings development in Batemans Bay (NSW). In other news, Woolworths will no longer build a Masters store in Glynde (SA) and the Bunnings Warehouse being built in Gympie (QLD) is on schedule to open mid-September.
Construction starts on Bunnings site

Demolition and initial ground-works have been completed for a Princes Highway site in Batemans Bay (NSW) that will have a Bunnings Warehouse. The new store is expected to cover 11,500sqm, four times the capacity of the current store. It is due to be completed late next year and local firm Edwards Construction is building the store.

Mayor Lindsay Brown said the $27 million project is a major investment in the regional economy. General manager Catherine Dale said the store would create sustainable jobs, less at the mercy of the tourism dollar. She told the Batemans Bay Post: "Some of our businesses are seasonal, but a retail store is more sustainable over 12 months. You don't tend to get the peaks and troughs you might in other sectors."

Bunnings' plans to open a larger store in the shire have taken years to materialise, after hopes of opening on a greenfield, council-owned site in Surf Beach were blocked.

Store manager Nicholas Hare said staff were excited. The store will feature a main warehouse, indoor timber trade sales area, building materials and landscape supplies yard and outdoor nursery, as well as an indoor playground, cafe and parking for about 170 cars.

Bunnings property development manager for NSW and the ACT, Ben Fogarty, said 75 people would be recruited for the store, bringing the total number of staff members to more than 110.
Masters no longer at Glynde

Woolworths corporate and public affairs officer, Bianca Agius, confirms it has decided against applying to Norwood, Payneham & St Peters Council for a third time to build a Masters store. The East Torrens Messenger reports that Agius did not provide a reason why the company had walked away from the plan and did not make any further comments.

The council's development panel rejected Woolworths' first application for the store in June 2012 after it received a 180-signature petition against the development. The panel rejected a revised application to build a smaller store at the site in February last year.

The panel, which received 36 representations opposing the plan, ruled the building would exceed the area's two-storey height limit and create too much traffic on surrounding streets. At the time, Woolworths said it was working on a new proposal for the site to address traffic and other community concerns.

Mayor Robert Bria said the original proposal was too big for the site and the company did not work well enough with council planners and residents to come up with a compromise.
Bunnings soon to open in Gympie

Workers are putting the finishing touches on the $35 million Bunnings store in Gympie. The biggest job is now filling the warehouse with more than 45,000 different retail lines.

Complex manager Duncan Phillips told the Gympie Times the store would be ready to open on September 15, and everything was going well on site. He said: "We are planning for growth. Bunnings sees a big future in Gympie. They are confident the region is going ahead."

Phillips also said country music star Troy Cassar-Daly has been booked for the grand opening concert. Plenty of entertainment would be on offer on the night including face-painting, jumping castles and games, along with free fairy floss and popcorn. Bunnings will hold a trade centre opening for its trade customers too. Rugby league stars Petero Civoniceva and Billy Moore would be part of another opening event prior to the concert.
Indie store update
Thrifty-Link store Tea Gardens Hardware has closed its doors
HNN Sources
Becks Timber and Hardware will be merging its Dowling street and Boland street stores
Kennards Hire has opened a new Test & Measure outlet in Artarmon (NSW)
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Tea Gardens Hardware & Building Supplies in New South Wales has shut its doors for the final time. In other news, a Becks Timber and Hardware outlet in Tasmania has also closed its doors to the public and Kennards Hire is expanding its Test & Measure retail concept.
Closure for Tea Gardens Hardware

Thrifty-Link store Tea Gardens Hardware has closed and owner David Bright has moved on with a new venture. The store won numerous awards throughout its 34 years of trading. Bright fulfilled an executive role with Thrifty-Link for 12 years and was the group's national chairman for three years. He told the Myall Coast News: "I want to feel what it is like not to be committed seven days a week. Kim and I would like to do some travelling and Cape York is on the agenda. Of course, I am looking forward to spending quality time with my grandson." The couple have now developed an online business. For more information, visit
Becks outlet closes its doors

Becks Timber and Hardware will be merging its Dowling street and Boland street stores, in an effort to compete with the new Bunnings store in Launceston. The Dowling street outlet closed its doors after trading on the site for 82 years. Dowling street site manager Michelle Harper, who has worked for Becks for 11 years, said she expected the transition to be fairly smooth. She told the Examiner: "It's all been a fairly positive experience. Obviously (for) the staff, initially it was a scary experience. It certainly has been that little bit stressful for everyone involved, but it has been handled very well." Staff will be merging as well, with Becks Dowling street taking its entire crew of around 70 staff members to the Boland street store.
Kennards Test & Measure in Sydney

Kennards Hire has followed up the success of its Test & Measure stores in Glandore (SA) and East Brisbane (QLD) with the opening of a new branch in Artarmon (NSW). Stocking specialist testing equipment that ensures the safety of projects, Test & Measure serves the needs of customers in the oil and gas, mining, sewer and water mains construction, electrical data and communications, and plumbing industries.

It stocks a wide range of test and measurement equipment from hydrostatic test pumps, anchor testers, non-invasive smoke machines and GPS locators used for surveying, to an extensive array of handheld devices. Most of the equipment is NATA calibrated and all equipment is tagged with Kennards Hire's QR code technology.
Home building gains strength
Residential building work increased 3.6% to a trend estimate value of $13.379 billion
Property Observer
Renovation work of private residential buildings recorded a 2.2% fall
New home sales fell 5.7% in July, seasonally adjusted, after a 1.2% rise in June
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Data from the Australian Bureau of Statistics (ABS) Construction Work Done for the June quarter indicates that building work done rose 2.0% in the three months to June. Residential building work increased 3.6% to a trend estimate value of $13.379 billion.

Commsec chief economist Craig James said new home building recorded its best back-to-back growth in four years.

The increase in new residential building is primarily being driven by detached house construction, according to Housing Institute of Australia (HIA) economist Diwa Hopkins. But she noted that major renovations work wasn't faring so well. She said:
A closer look at these preliminary results shows that the detached house segment was the key driver of growth in residential building during the June 2014 quarter, compared with the March quarter when multi-unit building led the charge.

Building work for new houses contributed 1.6 percentage points to the 2.2% increase in total residential building work done, according to HIA. Hopkins explained:
These developments are largely in line with what we have been expecting of the current new home building cycle; that larger improvements in detached house building activity would follow in the wake of the previously strong growth experienced by the multi-unit segment of the market.
Unfortunately, conditions in the major-renovations segment of the market remained subdued, with the value of this work done declining by 2.4% during the June 2014 quarter.
Housing loans

The number of new owner occupier housing loans increased slightly in June and buyers were borrowing more money with the value of the loans up. Continued low interest rates and tight rental markets helped increase demand for new homes.

First home buyers, long absent from the market are slowly making a return, with the group now accounting for 13.2% of borrowers.

The number of home loans approved in June rose 0.2%, following a 0.1% fall in May, according to the ABS.

ANZ senior property analyst David Cannington told the Courier Mail that even though new housing finance has been fairly flat in recent months, there has been a marked improvement over the past year. He said:
The economic outlook has been buffeted in recent months by weaker consumer and housing market confidence and an elevated unemployment rate. Nonetheless, strong population gains, a strong investor appetite for housing and pent-up home buyer demand will go some way to offsetting the negative impact of weaker market sentiment.

Cannington said recent data showing improvement in building approvals, home prices and auction clearance rate points to stronger building activity in the second half of 2014.
New home sales

The latest HIA report shows new home sales have had a weak start to the year, but predictions are it will continue to gain momentum. New home sales fell 5.7% in July, seasonally adjusted, after a 1.2% rise in June.

However, HIA chief economist Harley Dale is still expecting 2014-15 to be a strong year for housing construction despite the July fall. He told The Australian:
The 2013-14 fiscal year saw the recovery in new home sales gather strong momentum. New home sales and building approvals may have peaked for the cycle, but their levels remain historically elevated.

Dr Dale said more should be done to help increase the supply of housing, which would help the overall economy and keep a lid on house prices. He said:
A serious focus on addressing conspicuous impediments to new housing supply, such as large and costly planning delays and a significant lack of titled land would of course extend the recovery.

Sales of flats, townhouses and semi-detached houses were down 10.9% in July while sales of new detached houses fell 4.7%.
Seeking opportunities
Hardware Timber & Hardware's ongoing search for a CFO
HNN Sources
Masters is looking for a replenishment planner
Lipp's in regional Vcitoria has an opportunity for a rural merchandise store manager
Go to Mecca article
A selected roundup of hardware/home improvement jobs from the past week. Home Timber & Hardware is searching for a chief financial officer. A replenishment planner is wanted at Masters and rural business Lipp's has an opportunity for a manager at one of its branches.
CFO role at HTH group

Home Timber & Hardware looking for a chief financial officer based in Melbourne. The primary responsibility of this role is to provide the general manager and Home Timber & Hardware leadership team with pro-active guidance and advice on decisions for continuous improvement. To be considered for this role, candidates should hold postgraduate qualifications and have knowledge of retail industry drivers. For more information, click on to the image below.
Home Timber & Hardware searching for a CFO
Managing replenishment

The replenishment planner at Masters is responsible for managing the replenishment drivers and purchase orders for a specific category to ensure the best possible in-stock position for stores whilst achieving inventory targets. This role is based at the company's Pennant Hills office in Sydney. Ideal candidates will have proven experience in an inventory management role within the logistics/FMCG industry or a similar environment. They should also have a good understanding of seasonal patterns within a retail environment. Click onto the image below for additional information.
A replenishment planner is wanted at Masters' head office
Manager for rural business

A rural merchandise store manager is needed at Lipp's, a diverse agribusiness based in northern Victoria and southern NSW. It has nine locations and over sixty employees. The role is based at Leitchville (VIC) and involves managing a small experienced team, operating in a highly diverse and busy environment. It is a one stop shop for all hardware needs and is integral to the community spirit of Leitchville. Lipp's also recently purchased A & P Fry's Leitchville CRT business and is eager to expand under the National Rural Independent NRI banner. The criteria for suitable candidates includes a strong background in rural sales with an interest in agriculture. They should also have a committed to a growing business by providing a high standard of customer service. Click onto the image below for more information.
Rural business Lipp's needs a rural merchandise store manager
JB Hi-Fi: retail destination for connected homes
The JB Hi-Fi Home concept is positioned to take advantage of the home automation trend
Appliance Retailer
One in three JB Hi-Fi stores will be Home appliances only stores by 2015
The JB Home strategy is to promote high-end appliances which targets a different market
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In an interview with Appliance Retailer, JB Hi-Fi CEO Richard Murray discussed the company's strategy in the home appliance market, outlining a focus on retailing inventive products that combine technology and style.

The company's most recent annual financial results indicate a move towards the "connected home". Murray said:
As customers move towards the 'connected home', JB Hi-Fi will continue to be seen as the destination for expert advice from passionate knowledgeable staff.

Appliances that connect to the internet are becoming more widespread such as Samsung's Wi-Fi enabled washing machine; a sign of the growing "Internet of Things" trend. A recent study shows that the take up rate of Wi-Fi enabled home automation products will be worth approximately $917 million by 2017 in Australia.

Murray believes Australia is currently "at a tipping point where in-home automation is taking off" and this technology will evolve as internet speeds increase and confidence around security improves. He said:
Ten years ago you needed a multi-thousand dollar home automation system. Now, from the front door to the back, and everywhere in between, you can do it yourself.

Murray said it was possible the JB Hi-Fi Home concept could help grow the overall size of the appliance market thanks to its high traffic locations, providing an opportunity to introduce customers to new innovative products.

He adds that JB Hi-Fi encourages customers to think about innovation and is a keen supporter of technology and suppliers that make leading edge products.

The JB Home strategy is to promote high-end appliances. It targets a different market to the value or price focused approach of JB Hi-Fi. Another priority for JB Hi-Fi Home is retailing products that add design elements to the home that people are proud of, according to Murray.
Hong Kong building and hardware fair
The HKTDC Hong Kong International Building and Hardware Fair will run from 29 Oct. to 1 Nov. 2014
Hong Kong Trade Development Council
The event is expected to attract over 150 exhibitors from around the world
It is organised by the Hong Kong Trade Development Council
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The ninth edition of the HKTDC Hong Kong International Building and Hardware Fair will run from 29 October to 1 November, 2014 at the AsiaWorld-Expo. Building. Put together by the Hong Kong Trade Development Council, the event is expected to attract over 150 exhibitors from around the world. Last year, the fair attracted 10,942 buyers from 94 countries.

It has a reputation for quality exhibits and presents strong business opportunities for international buyers.

Buyers who attend the show cover a broad range of industries including engineering, construction, property development, building materials, as well as architects, designers, town planners and project managers.
New Asian Tigers

According to the Global Construction Report 2025 by Global Construction Perspectives and Oxford Economics, construction activities on a global level will accelerate by US$6.3 trillion, or 70%, by 2025 with the "new Asian Tigers" driving growth. Countries such as Indonesia, the Philippines and Vietnam will see rapid urbanisation which require investment in infrastructure, housing and commercial building.

Hong Kong is committed to its Ten Mega Infrastructure Projects that involves major works such as the Guangzhou-Shenzhen-Hong Kong Express Rail Link, and the Hong Kong-Zhuhai-Macau Bridge.

The HKSAR Government also announced a 10-year goal for over 470,000 housing units; five MTR rail lines which are under construction; the West Kowloon Cultural District Phase 1 project, and the redevelopment of Kowloon East.

This makes Hong Kong a central place in Asia for the building and construction industries.
Name change

Formerly called HKTDC Hong Kong International Building and Decoration Materials & Hardware Fair, the fair's official name is now HKTDC Hong Kong International Building and Hardware Fair to reflect the changing focus on the building and construction sector.

In 2014, the trade fair becomes a four-day event. The final day of the fair will be open to the public, providing exhibitors the chance to assess end-user reaction to their products and gain insights into the consumer market.

Visitors can shop at the "Ideal Home Mart" where they will find an array of home improvement and renovation products for sale.
Built for business

Building Information Modelling (BIM) has been identified as an important technology that effectively facilitates project management and execution. With the collaboration of the Construction Industry Council (CIC), BIM Day will be held on the fair's opening day. It will cover a range of BIM-related topics.

In addition, the fair will introduce a Building Performance and BIM zone. Visitors will find a wide spectrum of BIM developments such as BIM training, cloud-based platforms and mobile construction management systems.

Another highlight is the Green Building Materials zone. With increasing pressure from consumers and a "greener" regulatory environment, it will go some way to satisfy the demand for sustainably sourced products. The zone will feature environmental friendly processes and finishes, as well as energy-efficient products and recycled/recyclable materials.

Brand new in 2014 is Commercial Lighting which will showcase extensive lighting options for commercial facilities. It will echo the HKTDC Hong Kong International Lighting Fair which will be held around the same time.

It joins other clearly defined categories including Building & Decorative Hardware, Ceramics, Stone & Marble, Coating & Chemicals, Indoor Decorative Materials and Kitchen & Bath.

Other sections featuring Building Technology, Ceiling & Curtain Walls and Facility Management, Testing and Trade Services will be set up for the first three days of the fair.
Ancillary events

Exhibitor forums, networking functions, symposiums and seminars are all designed to provided added value for visitors.

The 2014 event will host representatives from the Hong Kong Science and Technology Parks Corporation who will share their experiences on the development of Hong Kong Science Park, Phase 3. It earned the top prize at the Green Building Awards in 2012.

For more information, please visit: or email:

Follow HKTDC on Google+ Twitter @hktdc and LinkedIn.

The Sydney-based office of HKTDC can be contacted on (02) 9261 8911 or email:
Tradies support breast cancer research
Bisley ambassadors Kyal and Kara Demmrich support Real Men Wear Pink
National Breast Cancer Foundation
The NBCF raises money for research into the prevention and cure of breast cancer
Real men wear pink in Forrestfield (WA)
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The National Breast Cancer Foundation (NBCF) is calling on tradies to don pink, high-vis work wear, and raise money to fund vital breast cancer research. Those who are man enough to wear pink can ask their work mates, friends and families to sponsor their fundraising, and challenge them to get kitted out in pink too.

Through the Real Men Wear Pink initiative, tradies around Australia can help the NBCF move closer towards its goal of zero deaths from breast cancer by 2030.

Men are often overlooked when it comes to breast cancer. This campaign will re-engage men as stakeholders in the illness, whether as a partner, father, brother, son, friend or person with breast cancer.

To get involved, register a fundraising page at, slip into a pink work shirt and start fundraising.

The NBCF is the leading community-funded organisation in Australia raising money for research into the prevention and cure of breast cancer. Since NBCF was established in 1994, over $110 million has been awarded to fund more than 370 Australian-based research projects to improve the health and wellbeing of those affected by breast cancer.

For more information, visit for further information on the work of the foundation.
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Woolworths results show 5.3% profit surge
The profit announcement.
Woolworths Limited
Sales for Masters contrasted with number of stores
Growth in online sales at Woolworths
Visit the ITW website
Australia's Woolworths has released its results for the 2013/14 financial year. The top line items included an increase in sales of 5.9%, and an increase in profit of 5.3%.

Sales for the year were $60.8 billion, and EBIT was $3.775 billion. Food, liquor and petrol generated $3.368 billion in EBIT, 5.3% up from its FY2013 figure of $3.199 billion.

The results confirmed the loss generated by home improvement operations of $169 million, over 20% up from the loss of $138.9million for FY2013. Sales at Masters did grow, from $529 million for 31 stores in FY2013, to $752 million for a reported 49 stores in FY2014. On the face of it, this would indicate a fall in per-store revenue from $17 million in FY2013 to a little over $15 million in FY2014. However the rapid growth of the store network would mean many of these stores were not operating for the entire year.

While dwarfed by the earnings for the food and liquor businesses, the Masters' losses did manage to take some of the shine off a strong and profitable year for Woolworths. The measure of return on funds employed (ROFE) fell 0.5%. Without Masters, according to Woolworths, it would have increased by over 0.5%.
Online sales

In making his introductory remarks, the Woolworths managing director Grant O'Brien highlighted strong growth in online operations. He said that overall online sales had increased by 50% during FY2014, from $0.8 billion to $1.2 billion. Online food related sales experienced a 40% increase. He also highlighted the expansion of Woolworths "click and collect" customer pickup service (which extends to Masters), delivery trucks which provide GPS location estimates of delivery times, and the future contributions to online processing expected from Woolworths' revamped "Mercury II" supply-chain operations.

Mr O'Brien drew attention to the increasing importance of data analysis in delivering goods and services to Woolworths' customers. Woolworths acquired a 50% stake in data analytics firm Quantium in May 2013, and some commentators have seen its contributions as being critical to the recent results the company has delivered.
Masters results

Masters managing director Matt Tyson presented the results for the home improvement operations of Woolworths, including Masters. As expected there was little for him to add to the announcements made earlier this month.

Mr Tyson was quick to affirm the strong support he believes the US partner of Masters, Lowe's, continues to provide. He said meetings with Lowe's executives here in Australia this week had indicated the US firm will continue its strong backing of Masters.

During question time, one financial analyst did ask about an apparent drop in equity funding from Lowe's, from $230 million in FY2013 to $180 million in FY2014. The answer to this question seemed a little confused, but at a guess it was more the way the contributed funds were accounted for, with the mix of equity and working capital changing between the two years.

Reading between the lines, it seems that FY2015 is likely to be something of a foundation-building year for Woolworths. Not only is there the matter of getting Masters running better, but the benefits of long-term investments in operations such as the Mercury II supply-chain initiative are likely two or more years away from delivery.

If you were looking for a sharp contrast with the operations of Wesfarmers, owner of the Bunnings big-box chain, you would find this in technology. There are indications that Woolworths sees technology as potentially being transformative in a positive manner, one which will bring benefits to most, if not all, of its operations.

The Wesfarmers approach is, by contrast, one of seeing online as being an additional channel and not much more than that. It is actually surprising that Wesfarmers has not taken the same acquisition path to bringing on board more technical expertise.
Adelaide Oval redevelopment involves Sika
Sika ColorFlo is featured in the redevelopment of Adelaide Oval
It worked closely with Hallett Concrete and Ossmic Concrete Constructions
As part of its ColorFlo range, Sika offers more than 60 different concrete pigments
SpotOn is your source for laser levels and other tools
The recent $535 million redevelopment of the Adelaide Oval in South Australia has seen the sporting and entertainment venue grow its seating capacity to a total of 50,000 spectators.

The oval now also boasts standing room for a further 3,000, a pedestrian footbridge and a completely remodelled surrounding concreted area to provide fans with easy access to the stadium.

Coloured concrete was chosen to seamlessly integrate the concreted area with the stadium's existing design and heritage, whilst creating visual impact for visitors. The project's architects selected the concrete colour as well as the aggregate colour and size.

Sika was appointed to supply more than 12tonnes of its ColorFlo(r) oxide bags in Ginger SK288 pigment for this area, and worked closely with Hallett Concrete and Ossmic Concrete Constructions to identify a solution that met the architects' brief.

The mass of oxide used for each batch was weighed using a balance to provide a consistent coloured concrete result. Joe Maiolo, technical manager, Hallett Concrete said:
We worked closely with Sika to deliver on the architects' specification for an earthy tone. This included three iterations and providing a range of sample panes before the colour was approved.
Sika was efficient and responsive during the process, delivering on time and on budget. Their wide range of colours also allowed us to easily adapt our offering to meet the architects' brief.

The use of coloured concrete has grown rapidly over the last decade, because it is a sustainable and attractive option for designing concrete structures and building components.

As part of its ColorFlo range, Sika offers more than 60 different concrete pigments, available in liquid and dry pigment concentrates. Sika ColorFlo bagged colour pigments are packaged in water-soluble bags that can be added directly to the concrete truck or mixer.
Kennards kids charity initiative
Kennards is raising money and awareness for selected children's charities
Kennards Hire
Last year, the company raised over $300,000
For every hire made during September and October, Kennards will donate $2
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Kennards For Kids is kicking off on September 1, 2014. Throughout September and October, the charity drive organised by Kennards will raise money and awareness for selected children's charities in Australia and New Zealand.

Recently awarded the Family Business Association's Business of the Year, Kennards Hire is passionate about providing kids with the best possible start to life. It is this belief in the potential of kids that led the company to donate over $300,000 to various children's charities and organisations in last year's campaign alone.

For every hire made during September and October, Kennards will donate $2, which will be distributed to a number of organisations that assist children who need it most.

Allen Besseling, CEO of Kennards Hire, believes it is vital that kids are given every chance at success in life. He said:
We believe that it's all about breaking negative cycles early on in a child's life. We started Kennards For Kids because it allows us to help the youth in our communities realise their potential. It really is the most rewarding part of what we do.

This year, support is being extended to charities such as Stepping Stone House, Kids Xpress, Variety - the Children's Charity, the Constable Care Foundation and the Children's Hospital Foundation.

People can throw their support behind Kennard For Kids and its charity partners by visiting a Kennards Hire outlet and hiring equipment for a spring-clean, building or renovation projects throughout the months of September and October.
Mecca hosts heritage architecture event in Melbourne
Dan Blake accepts the John George Knight award for Melbourne GPO Exterior Conservation Works by Lovell Chen at the Victorian Architecture Awards in 2014.
Lovell Chen has been intimately involved in preserving and developing the State Library of Victoria.
Dan Blake was involved in the redevelopment of the Myer building on Bourke Street.
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Mecca Events is hosting another of its special variety of "trade shows" at the State Library of Victoria in Melbourne. The event is scheduled to take place on 3 September 2014, from 6pm to 9pm.

There are probably not that many cities which regard their library as one of their prime cultural landmarks. We have all at some time had to lead slightly bemused - and even unwilling - international visitors to the State Library as part of an introduction to the city. The bemusement doesn't last long, as the State Library remains one of Melbourne's outstanding successes, not just due to its heritage aspects, but also the careful restoration and inspired revising of the building's interior spaces over the past two decades.

It makes a dramatic and fun setting for what will be an evening of connecting to professionals in the architectural, construction and building industries. As usual, Mecca has rounded up a host of sponsors to make the event possible, who will be available to chat about the products and services they offer. The sponsors include Argent, Wow Structures, Karndean Design Flooring, Bamstone (bluestone), Landscape Tanks, Con-Form, Weathertex, Hotbeam, Sound Constructions and Resene Paints.

Attendees at this event will receive a special insight into what is going on at the State Library, courtesy of a talk to be given by Dan Blake. Mr Blake is a senior associate with Lovell Chen, an architectural firm that specialises in heritage-based work in Victoria, and especially in Melbourne. As well as the extensive work Mr Blake and Lovell Chen have done with the State Library, they have also been involved in the complex restoration and redevelopment of the Myer building on Bourke Street. The firm has been recognised by the AIA for its work on the Melbourne GPO and Rippon Lea.

Mr Blake was particularly involved in the restoration of the Mural Hall in the Myer building. According to an article in the "InDesign" magazine:
Mural Hall on Level 6 is nationally significant for its high quality streamline Art Deco interior, three enormous die-cast aluminum chandeliers and a series of 10 murals painted by Napier Waller depicting women through the ages. All the murals are original to the recently refurbished 1930s ballroom.
Such a combination of fragile and highly significant components forming a lush deco interior involved many specialist trades, and paint sampling to determine the original colour scheme. Extensive investigation into the Coles Myer photographic archive allowed us to gain an intimate understanding of the use of space and the changes made to the interior during its life. The reinstatement of the carpet runners, velvet curtains and timber strip flooring transformed the space into the theatrical interior once at the centre of the Myer Emporium. Dueto hazardous materials, the original ceiling was replaced in plaster work, although many decorative elements were carefully removed and reinstated.

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Wesfarmers to purchase workwear brands
Hard Yakka Workwear Centre stores are part of the acquisition by Wesfarmers
King Gee workwear will be part of Wesfarmers industrial division
Iconic tradies brand Stubbies has been ssold too Wesfarmers
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Wesfarmers Industrial and Safety (WIS) has agreed to pay $180 million to Pacific Brands for its workwear division that includes iconic brands Hard Yakka, King Gee and Stubbies, subject to approval by the Australian Competition and Consumer Commission.

The acquisition also includes 16 Totally Workwear and Hard Yakka Workwear Centre stores, 53 franchised Totally Workwear stores and 13 NNT imagewear sites. WIS managing director Olivier Chretien said in a statement:
It combines our customer relationships, distribution channels and industrial workwear offer with Pacific Brands' leading brands to deliver growth, an expanded offer to customers and development opportunities in new markets.
It is highly complementary and consistent with WIS' strategic agenda of building a more efficient and customer-centric business, and developing new growth platforms."

WIS is a provider of industrial and safety products and services in Australia and New Zealand. It comprises three segments: generalists (Blackwoods, Blackwoods Protector), safety specialists (Protector Alsafe, Greencap, Safety Source and NZ Safety) and industrial specialists (Coregas, Bullivants, Total Fasteners and Packaging House).

Approximately 1,000 staff from Pacific Brands will be integrated into WIS' existing team of around 3,500 employees.

Pacific Brands also owns other household names including Sheridan bedding and Bonds underwear. Despite six years of restructuring under three different chief executives, its profit levels continue to decline.

The group reported underlying net profit of $53 million for the 2014 financial year, down 28.2%. The group's bottom line loss for the year amounted to $224.5 million.

Newly appointed chief executive David Bortolussi said the sale of Hard Yakka, King Gee and Stubbies to Wesfarmers will help the group pay down its debt. He said:
The sale ... simplifies and focuses Pacific Brands group strategy around maximising the potential of our market leading brands such as Bonds and Sheridan. It also reduces exposure to the challenging industrial market, and restores balance sheet strength to the company.

Pacific Brands said it expects to realise a profit on the sale of the brands of $35 million in the current financial year.

News of the sale has drawn a mixed response from experts, with retail expert and partner at accounting firm Lowe Lippman, David Gordon telling SmartCompany it appears Pacific Brands has made "a strategic decision to concentrate on the consumer market and not industrial". He said:
Brand owners in Australia, and in retail in Australia, continue to feel pressure from private labels and from retailers squeezing their suppliers to increase margins, and on sales pressure in general from reducing volumes.
So any sales strategy requires a strong investment in advertising, brand support and probably continuing to the Pacific Brands retail network of stores. This requires capital and Pacific Brands ability to find this capital to invest in these two areas will be fundamental to their success, and I would even say their survival.

But Brian Walker, chief executive of the Retail Doctor Group, told SmartCompany he believes the move is more tactical than strategic, and remains wary. He said:
These are long-established brands in Australian culture. There is future value there that I think has been sold off too cheaply."

Walker believes the $180 million price tag "may fill the coffers for a while" but the overall results will be to weaken the Pacific Brands portfolio. He said:
It ignores the cultural value of the assets. It's not a strategic move, its tactical, based on the current state of the balance sheet.

Deutsche Bank analyst Michael Simotas said the workwear brands would be "good fit" for its new owners, but noted the outlook remained challenging. He said:
Wesfarmers Industrial and Safety provides a distribution channel and potentially additional customers, and while Wesfarmers' businesses tend to remain independent, there may also be some opportunities within Bunnings and the discount department store formats.
Prices for trades on the rise
The HIA Trades Report shows a moderate shortage for a number of trades
The shortages have placed upward pricing pressure on specific trades
The HIA Trades Report is published by Housing Industry Association
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The HIA Trades Report published by Housing Industry Association shows there will be a limited supply for a number of trades including bricklaying, ceramic tiling, plastering, roofing and carpentry.

In terms of regions, the report suggests shortages of tradespeople exist primarily in regional areas of SA, NSW and WA as well as Perth and Sydney, whereas a modest oversupply exists in regional Queensland.

While wages and rates overall remain stable, the shortfalls have placed upward pricing pressure on specific trades, with rates for bricklaying, site preparation, ceramic tiling and general building increasing by more than five per cent over the past year.

Overall, however, the supply of and demand for tradespeople remains roughly in balance, with the limits in many trades being offset by minor levels of oversupply in landscaping, general building, electrical, plumbing, site preparation, painting and joinery.

The latest results follow another survey conducted by the Master Builders Association in July. According to that survey, bricklayers were the most in demand, followed by site managers, wall and floor tilers, project managers, foremen/supervisors, roof tilers, plaster fixers and carpenters.

This points to an increasing demand for labour amid the recent upturn in home building activity. ABS figures suggest the number of people employed in the industry (1.029 million - seasonally adjusted) has swelled by around 43,600 over the past 12 months as 193,667 houses were approved for construction.

This is a huge number for a nation which has seen more than 180,000 homes built in a year only once in the past 30 years.

HIA senior economist Shane Garrett said the demand for tradespeople reflects the current strength of the housing market. Supply pressures are emerging most significantly in areas which had limited exposure to the resource sector and do not have significant volumes of workers returning from the mines. He said:
What we are seeing is the fact that building activity is so strong in terms of new dwellings plus the renovation side of the market is starting to lift a bit as well.

However such demand is yet to lead to significant impact on construction industry wages and trade rates, which have raised by three per cent and 2.8 per cent respectively, according to HIA and ABS data.

Garrett does not expect any form of massive labour shortage in the medium term, especially as home building activity eases back from current highs and more people are trained and upskilled. He said:
I think once that comes through a bit more fully then supply pressures will ease back a little bit. I think there are enough people in the medium term to meet the needs of the residential construction sector.
Adelaide's north experiences growth
Development approvals have increased 30% in Salisbury and Playford (SA)
News Corp.
Investors are attracted by local population growth and housing developments
Availability of land is just one factor impacting the increase in local development
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Playford and Salisbury councils in South Australia approved a combined $414.7 million in residential and commercial developments in the 2013/14 financial year, up $94.8 million on the previous year. The number of actual developments approved was up 11%, to 4222.

Housing Industry Association regional director Robert Harding said a combination of factors was responsible for the increase in local development. He told News Corp:
I think it's the availability of land north of the city compared to south of the city. It's because of the stability and lower interest rates in the last 18 months, which has enabled particularly young people and first homebuyers to enter the market. And it was on the back of the State Government residential construction grant, which cut out on December 31.

Playford Mayor Glenn Docherty said the increase was a sign of growing confidence in the north. He said:
We have affordable land for families to build new homes on, and there are a number of attractive reasons for businesses to invest in Playford.

He said investors were attracted by local population growth and housing developments' proximity to the Lyell McEwin Hospital and Edinburgh Parks.

A $65 million expansion of mining industry supplier Liebherr Australia's three-storey office, workshops, warehouse, component plant and distribution centre at Para Hills West was the largest development approved. About 100 extra staff are expected to work at the revamped centre.

Commercial and General lodged plans with Salisbury council for a $65 million distribution centre on the old Bridgestone site at 157-165 Cross Keys Rd, Salisbury South. The development would include a warehouse, cold storage, offices and a carpark.

Commercial and General managing director Jamie McClurg is also behind a proposed $180 million entertainment complex at the corner of Kings and Main North roads in Salisbury South, which would create up to 1600 jobs.
Sherwin-Williams profits as consumers turn to digital
Sherwin-William's ColorSnap app made Apple Store's top 25 most popular applications
Retail Emarketer
The company recently posted US$3 billion in sales and a 20% jump in profits per share
Its products are an integral part of the home improvement industry in the US
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Paints and coatings company Sherwin-Williams recently posted US$3 billion in sales and a 20% jump in profits per share. As a vendor and a manufacturer, it is an integral part of the home improvement industry in the US, guiding consumers through the renovating and decorating process.

An American Express and Echo Research study of US homeowners planning for renovations pulled back the curtain on how consumers get inspired for their DIY projects.

The highest percentages of respondents said they look to DIY and design TV shows or in-store displays for inspiration - 39% and 36% respectively in 2013.

But consumers are also now turning to digital sources for their inspiration with social media taking a greater role in the process than ever before.

Thirty percent of respondents said that online designs and DIY websites fuelled their remodelling projects in 2013; from 2012 to 2013, those looking to social media for inspiration increased 100%.

Several home improvement retailers, including Lowe's and Home Depot, have begun taking their social media presences seriously, understanding that every customer they engage with is a potential lead or has friends or family members that could be if positive word-of-mouth reached them organically.

As with those other hardware retail brands, Sherwin-Williams' success is likely tied to its digital efforts but not necessarily digital transactions, though some are trying to change that. In a January 2014 report, eMarketer analyst Patricia Orsini noted:
Digital transactions for home improvement products remain rare, making up only a tiny portion of the whole, albeit one that is growing rapidly. But digital channels play an important role in the research, planning, and shopping phases of home improvement, wherever and however a final sale occurs.

Lowe's works hard to hone its social media presence for this very reason. It wants to be a resource for shoppers researching before purchase.

Meanwhile, The Home Depot and others are investing heavily in ecommerce, hoping to change the tide of online shopping for an industry where ecommerce hasn't taken hold thanks to logistical challenges (for example, big ticket items such as outdoor furniture prove cumbersome to deliver) and consumers' general discomfort buying tiling and paint sight unseen.

As with other sectors, DIY etail sales are comprised of a healthy mix of consumers' online and offline actions. For Sherwin-Williams, investment in interactive digital channels such as social media and app development has proved useful in boosting brand awareness and ensuring consumers' loyalty.

Its ColorSnap app for smartphones was well received upon launch, reaching the Apple Store's top 25 most popular applications list. The app allows users who download it to custom-make paint palettes and match paint to their surface of choice.

All the user has to do is snap a picture or use photos already in his or her smartphone reel and select a small portion of that picture. The app then selects a matching paint for the user based on the colour in that small section.
Torque sensors for safety
The MTX is a low torque sensor designed for calibrating and testing small tools
EIN News
Mountz has over 50 years experience in developing torque testers and sensors
Mountz offers various MTX models covering a wide torque range
SpotOn is your source for laser levels and other tools
Mountz has a new MTX torque sensor for testing small torque tools. The MTX is a low torque sensor designed for calibrating and testing small hand screwdrivers, torque wrenches and power tools.

With the sensor's low profile design, the calibration instrument can also be used for testing automation and robotic fastening applications. These torque sensors are used in conjunction with a torque tester.

Small torque tools are precision instruments designed to accurately and repeatedly tighten fasteners to a proper torque value. Overtime, all torque tools start to drift out of tolerance.

Preventative maintenance and regular torque calibration cycles will ensure repeatable accuracy and adherence to international standards.

The MTX torque sensor is a finely tuned instrument designed for testing and measuring torque. Engineered for torque analysis, validation, verification and calibration, it is a laboratory grade instrument that is commonly used for quality control, R&D and tool calibration. Mountz MTX torque sensors provide precision torque testing for these applications.

Designed to perform static torque measurement, the small precision instrument can measure torque in both clockwise and counterclockwise direction. Mountz supplies a free ISO 17025 certification of calibration with the purchase of any new MTX torque sensor. This certificate documents the measurement results from the torque calibration and substantiates the operational readiness of the torque sensor.

In addition, it provides traceability to recognised national and international standards. Mountz offers various MTX models covering a torque range from 1 inch-ounce up to 160 inch-ounces.

Measuring torque is essential for companies to ensure their product's quality, safety and reliability aren't compromised. Fasteners that are insufficiently fastened can vibrate loose and excessive torque can strip threaded fasteners. With nearly 50 years of experience, Mountz is a pioneer in developing torque testers and sensors.

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