April 23, 2008 11:00 ET

At Annual Meeting of Shareholders: RONA Announces Recruitment of 9 New Independent Dealer-Owners With Estimated Annual Retail Sales of Close to $50 Million

RONA also confirms goal of becoming THE complete home solution for Canadians

BOUCHERVILLE, QUEBEC--(Marketwire - April 23, 2008) - RONA (TSX:RON), Canada's largest distributor and retailer of hardware, renovation and gardening products, announced at its Annual Meeting of Shareholders today that it has recruited nine new independent dealer-owners in the last two months alone. The dealer-owners, now flying the RONA banner, crossed the floor from other purchasing groups in Western Canada and Quebec, and together they represent estimated annual retail sales of close to $50 million. Eight of these dealer-owners operate stores ranging from 2,000 to 24,000 square feet and one will build a 52,000 square foot proximity store.

"Recruiting independent dealer-owners is one of RONA's key growth vectors," explained RONA President and CEO Robert Dutton. "Over the last five years, we have increased our affiliated store network by close to 50% through the recruitment of 140 dealer-owners across Canada. Our business model is unique in the market and very attractive to independents who want to grow faster. These dealer-owners face a number of challenges, particularly in terms of succession and competition from the big chains. At RONA, they can get the support they need to deal with the realities of the market, with access to a team of experts and support that is simply unmatched in our industry. They also have access to innovative store concepts and the strongest purchasing power in our industry in Canada. Over the next few years, we will pursue our development of this market niche, which still represents over 50% of the renovation/construction market in Canada."

At the Annual Meeting of Shareholders, Mr. Dutton also took the opportunity to confirm the company's commitment to becoming THE complete home solution for all Canadians. After outlining RONA's financial achievements and the solidity of its balance sheet, he stressed the major improvement of various key indicators in terms of consumer awareness, service, patronage and employee commitment. In 2007, RONA continued to improve its positioning and its consumer awareness level, especially in Western Canada and Ontario, where the company now generates over 50% of its sales. In fact, RONA just opened four big-box stores in Ontario and one in Alberta, as well as two proximity stores in Ontario. In 2007, RONA also stepped up its presence in the commercial and professional market in these regions by acquiring plumbing specialist Noble Trade in Ontario, and construction materials specialist Dick's Lumber in British Columbia.

Since the commercial and professional market offers promising growth potential and customer diversification for RONA, management decided to create a division devoted solely to this market segment at the end of 2007. The Canadian commercial and professional market is estimated at about $70 billion in sales, more than twice the size of the retail renovation market. Counting on a strong management team led by Vice President Michael Storfer who is also the President of Noble Trade, this division currently generates more than 10% of RONA's consolidated sales. The division will pursue its development in product categories where RONA already has extensive expertise and huge buying power. It will target its development regionally, either through acquisitions, new points of sale or complementary services.

2008-2011 Strategic Plan

CEO Robert Dutton also took the opportunity to outline the RONA's 2008-2011 strategic plan, which was unveiled to the financial community at RONA's 2008 Investors Day in Montreal on February 27. In addition to its intention to becoming THE complete home solution for all Canadian consumers, RONA's 2008-2011 strategic plan calls for the company to offer the best service and best shopping experience for its various customer groups, both on the retail side and on the commercial and professional side. RONA also intends to be the most effective and innovative player in the industry, and the clear industry leader in sustainable development.

"Our 2008-2011 strategic plan is an important step in our development," Mr. Dutton said. "Our objective is to optimize our existing store and distribution network while continuing to improve our competitive positioning to ensure we're ready to take full advantage of the situation when our sector recovers."

The company embarked on the first phase of the plan in early 2008 with a vast optimization overhaul called the PEP Program...for Productivity, Efficiency and Profitability. The program includes five major projects:

1. Improve the sales and the profitability of the corporate store network

2. Optimize the supply chain

3. Invest in employee training and mobilization

4. Upgrade information systems, including a new Financial Suite, and establish improved dashboards

5. Finalize the integration of the most recent acquisitions and continue to improve the integration process

The second part of the business plan deals with accelerated development. RONA operates in three sectors, each with its own growth opportunities. The company's growth will continue to rely on the four growth vectors that have contributed to RONA's success over the past few years: same-store sales, store and branch openings, recruitment of independents and acquisitions. Each of these vectors is modulated differently in the different sectors.

For the retail sector, the focus will be on standardizing the store network and continuing to innovate in order to become THE complete home solution for Canadians. For the affiliate sector, even greater efforts will be dedicated to recruiting activities in order to become the largest group of independent dealer-owners in the country. Finally, for the commercial and professional sector, RONA plans to use organic growth and acquisitions to become the leader in specific product categories and regions that complement its retail operations.

In summary, the RONA business plan for the next four years revolves around the four following points:

1. Become THE complete home solution for Canadians

2. Offer Canadians the best service and the best shopping experience in the industry

3. Be the most effective and innovative player in the industry in Canada

4. Be the industry's sustainable development leader

"With our 2008-2011 strategic plan, we will continue to set ourselves apart with unparalleled service and to continually stay at the leading edge of our industry by developing innovative concepts and methods," Dutton said. "We're getting ready for the recovery as a team, based on our values, our culture of service and the mobilization of our 27,000 employees from coast to coast."


This press release contains forward-looking statements reflecting RONA's objectives, estimates and expectations. Such statements may be marked by the use of verbs such as "believe," "anticipate," "estimate" and "expect" as well as the use of the future or conditional tense. By their very nature, such statements involve risks and uncertainty. Consequently, results could differ materially from the company's projections or expectations. For information on the nature of risk factors not specifically discussed in this press release, please consult RONA's 2007 annual report under the heading "Risks and Uncertainties."


RONA is the largest Canadian distributor and retailer of hardware, home renovation and gardening products. RONA operates a network of over 680 corporate, franchise and affiliate stores of various sizes and formats. With over 27,000 employees working under its family of banners in every region of Canada and more than 15 million square feet of retail space, the RONA store network generates over $6.2 billion in annual retail sales.

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