"I would really like us to become a billion dollar company," president and chief executive officer Michael Graydon (photo at left) said in his annual ‘state of the union' address, adding that the company's new strategic direction makes that goal achievement in the short term.

Although specific dollar amounts were only discussed behind closed doors, Graydon said that sales through the group were up seven per cent last year.

"We saw some very remarkable growth stories from our Countrywide partners," he said, adding that average same store sales growth was 4.7 per cent in 2005, although many individual stores had double digit growth while the network's central billings were up 4.8 per cent. While Countrywide lost two stores last year, four new retail partners joined the network and three are on-stream for 2006.

Despite the turmoil in the Quebec market, Multi Meubles produced two per cent same store sales growth with central billings up 2.9 per cent in 2005. "It's Armageddon out there between Brault et Martineau and The Brick and Multi Meubles held more than its own in a tough environment," Graydon said.

Graydon attributed this growth to the ‘very pro-active' involvement of the network's respective steering committees and the Mega team lead by Mike Vancura, the newly named general manager of the retail systems group. "This is now a stand alone business unit. There is no cost to running this business from a Mega perspective," Graydon said.

Despite these strides forward, Graydon said performance was hampered in a number of key areas, all of which have been addressed in recent months with positive results already beginning to trickle in.

He was critical of Mega's merchandising efforts in a number of key areas, particularly appliances and electronics. "It imploded last year," Graydon said. "We need to create retailer value through leadership and get these efforts in sync with your expectations of us."

Appliances account for approximately 50 per cent of Mega's volume. "But we weren't delivering the value you need," Graydon said, adding this prompted the addition of industry veteran Richard Heaven as director of appliance merchandising.

"His job is to find opportunities to leverage the true volume we're doing in appliances," he said. "There's a degree of urgency in this."

Although on the team for only a few weeks, Graydon said Heaven's efforts are already beginning to bear fruit.

The electronics category was in a similar situation. Nick Lavecchia, who was named director of electronics merchandising late last year, has already secured new supply agreements with seven key industry players including Hitachi and Alpine.

In an allied move, Todd Smith, general merchandising manager will now report to Benoit Simard, Mega's vice president of retail systems, giving Simard responsibility all marketing and merchandising functions. Smith previously reported directly Graydon.

In another move, buying group veteran Dean Wake has joined Mega has its new director of promotional networks. "These are groups of strategically similar Mega members who have the desire to work together and share similar profiles," Graydon said, adding theses non-aligned retailers will have common approaches to the market, product mix and position and size in their respective communities. "This program will enable these retailers to be part of a product and marketing group while maintaining their individual identities."

Greater emphasis will also be placed on expanding Sleep Experience/Experience Sommeil, Mega's bedding retail system. "This is a great retail opportunity and business builder," Graydon said, adding that the private label bedding program developed with Springwall has also produced encouraging results. "We're taking a back to basics approach focusing on training and product alignment."

There is currently one free standing Sleep Experience store and expanding the in-store sleep shop for Mega furniture store members is a key priority for year. Mega is also developing a business model for an appliance and mattress store.

Mega's import program has produced significant results over the past couple of years, with its logistics and distribution group now bringing in over 40 containers a month. "Our container volume was up 111 per cent year-over-year at the beginning of April," Graydon reported, adding that the program's central purchase order system is now up and running.

Currently, Countrywide and Multi Meubles members are the primary customers of the import program but the group intends to offer product to non-aligned members while focusing on the customer service component. "We are starting to develop a sales program and are going out to tell our members that we have an effective that they can use," Graydon said.

"Mega will continue to be a provider of retail solutions and will always be seeking to find new opportunities to ensure your profitability day-in and day-out," Graydon told his audience. "Our corporate goal is to bring in $200 million plus in new incremental business this year."