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Jim Estill named EY Entrepreneur of the Year for Ontario

18 November 2019
Appliances, People

TORONTO – Jim Estill, owner and chief executive officer of Danby Appliances, this country’s sole remaining white goods manufacturer, has been named the 2019 EY Entrepreneur of the Year for the province of Ontario.

In a statement announcing the honour, the Toronto-based office of the international accounting and consulting firm noted Jim Estill started reselling computers out of the trunk of his car before going on to build multiple profitable companies and investing in over 150 technology start-ups. He purchased Danby, a 70-year old business based in Guelph that makes everything from washing machines and dishwashers to fridges and air conditioners, in 2017. His creativity and innovative thinking completely revitalized the company in less than three years.

Jim Estill (centre), owner and CEO Danby Appliances was named the 2019 EY Entrepreneur of the Year for Ontario. He’s seen here with Stuart Lombard (left), president of Ecobee and Paula Smith, EY Ontario program co-director.“Jim is the definition of an unstoppable entrepreneur – he fearlessly experiments with new ventures while never losing sound business judgement in evaluating new opportunities,” said Craig Roskos, EY Entrepreneur of the Year Ontario program co-director. “He understood every risk and took immediate action to eliminate unprofitable channels to lay the groundwork for Danby’s future growth and success, leading to a sky-rocketing spike in Canadian revenues.”

EY also praised Estill as a serial innovator and tech entrepreneur, saying he leads by example to encourage employees to think differently and experiment with products and processes. That’s led to breakthrough inventions like Parcel Guard – the first smart mailbox to hit the market – and ShipperBee – an environmentally friendly way to ship packages. His use of e-commerce and smart home products is propelling Danby to strong revenue growth.

“Jim took a traditional company that makes ‘big metal boxes’ and turned it into an innovative business that’s revolutionizing the industry,” added Paula Smith, co-director for the Ontario EY Entrepreneur of the Year program. “It speaks volumes to the entrepreneurial and creative culture that he enables within the organization.”

She added Jim Estill’s belief in doing the right thing for his company, community and around the world led Danby to become the first Canadian business to obtain a Sponsorship Agreement Holder designation from the Government of Canada to help resettle refugees moving to the country. He approached this philanthropic venture like a business, hiring refugees on to prepare them for joining the Canadian workforce. These efforts, Jim’s commitment to local charities and his engaged leadership style, all make up the Canadian DNA of Danby.

Before taking the overall honour for Ontario, he was the winner in the program’s business-to-consumer products and services category.

Danby was also honoured with the Diversity and Inclusion Award by the Ontario Chamber of Commerce in early November.

As the 2019 Ontario region EY Entrepreneur of the Year, Estill will compete with top entrepreneurs from the Pacific, Prairies, Québec and Atlantic regions for the national EY Entrepreneur of the Year, who will be announced and feted at a gala to be held later this month in Toronto.

In June 2020, Canada’s EY Entrepreneur of the Year will move to the world stage to compete with more than 50 country recipients for the title of EY World Entrepreneur of the Year.

Related Story: Danby to resume manufacturing small appliances in Guelph

E-commerce, corporate store sales climb in 2019, LFL reports

18 November 2019
By the Numbers, Retail

TORONTO – Leon’s Furniture Limited (LFL) reported higher e-commerce and corporate store sales for both the third quarter and the first nine months of 2019, although net income declined. However, recent investments in infrastructure, including three new stores, should bolster top and bottom line prospects for this country’s largest full-line furniture retailer over the coming months.

Editor’s Note: the incorrect version of this story was originally posted earlier this week. We apologise for the inconvenience.

Total system sales for the three months ending 30 September 2019 were $712.5 million, up 0.8% from the $707.0 million recorded for the same period last year.

Corporate store sales were pegged at $601.3 million, up 1.5% from $592.3 million. Same store sales edged up 0.6% year-over-year.

Franchise store sales were $111.2 million, falling 3.1% from $114.7 million a year ago.

Net income for the period was $33.0 million or 40 cents per diluted share, compared to $33.7 million or 41 cents per diluted share – a drop of 2.4% on a per share basis.

Leon's opened its second smart store in Coldbook, Nova Scotia during its fiscal third quarter.LFL opened three new stores in the quarter, including a Brick franchise store in Meadow Lake, Saskatchewan and two corporate stores – a new Brick flagship in the West Edmonton Mall and a Leon’s smart store in Coldbrook, Nova Scotia. It also said it has achieved double digit growth in the quarter from its e-commerce platforms and has generated sales of more than $100 million over the past 12 months.

“In the quarter, both retail banners continued the refresh of their store network, exemplified with the Brick’s 50,000 square foot West Edmonton Mall location, which re-opened in early September,” LFL president and chief executive officer Edward Leon said in a statement. “The Leon’s banner opened another 30,000 square foot Smart Store in Coldbrook, Nova Scotia. This concept is an example of one of the opportunities we see developing over the next several years, both to optimize existing locations and drive value from the additional space, as well as looking at selective new greenfield locations in urban markets.

“Both of these new store concepts feature immersive technology, including features such as: digital availability and browsing of the banner's full range of products; video walls enabling customers to view selected products in full size; and augmented reality to help with room planning,” he added.

LFL also said net debt totaled $20.3 million at 30 September 2019, compared to $76.3 million a year earlier. “Since acquiring The Brick Ltd. in 2013, over $365 million in total debt has been repaid,” the company said.

For the nine months also ending 30 September 2019, total system sales were $1.98 billion, up 0.8% from $1.96 billion for the same period last year.

Corporate store sales were $1.66 billion, up 1.4% from the $1.64 billion for the comparable period. Same store sales gained 0.6% on a year-over-year basis.

Franchise sales were $315.4 million, a decline of 1.8% from the comparable period’s $321.3 million.

Net income for the nine months was $67.6 million or 82 cents per diluted share, compared to $72.2 million or 88 cents per diluted share – a drop of 6.8% on a per share basis.

Leon was also reasonably confident about LFL’s ongoing performance.

“Despite the uncertainty over certain key economic indicators, we believe that the overall economy remains relatively strong. Although it is difficult to gauge future consumer confidence and what impact it may have on retail, we remain confident that our sales and profitability will increase,” he said.

“Given the company’s strong financial position, our principal objective is to increase market share and profitability. We remain focused on our commitment to continuously invest in digital innovation that will drive more customers to both our online e-commerce presence and our 304 physical locations across Canada,” he continued.

GoEasy grows again, but EasyHome revenue slids

18 November 2019
By the Numbers, Retail

MISSISSAUGA, Ontario – A revenue drop for EasyHome didn’t make much of a dent in the overall third quarter sales and earnings performance for GoEasy as Easyfinancial saw its top line advance almost $27 million as its consumer loans receivable struck the $1 billion mark for the first time.

Revenue for the three months ending 30 September 2019 was $156.1 million, 20.2% higher than the $129.9 million for the same quarter of 2018. Overall same store sales growth for the quarter was 20.4% and the company noted the advance was driven by the growth of consumer lending.

The consumer lending arm, EasyFinancial, contributed revenue of $122.3 million, a year-over-year gain of 27.8% over the comparable period’s $95.7 million.

EasyHome revenue fell in the third quarter and the first nine months of 2019.Meanwhile, EasyHome – a national chain of lease-to-own furniture, mattress, appliance and electronics stores – had revenue of $33.9 million, a 1.1% decline from the $34.3 million generated in the third quarter of 2018. However, same store sales climbed 2.4%.

During the quarter, EasyHome acquired six of the Canadian stores operated by the U.S. based rent-to-own merchant Aaron’s, absorbing them into its own network.

In a new strategic partnership, GoEasy acquired a minority interest in PayBright, a Toronto-based point-of-sale consumer financing specialist.

Net income for the third quarter as $19.8 million or $1.28 per share, compared to $14.3 million or 97 cents per share – a rocket fuelled gain of 32.0% on a per share basis.

“We saw positive momentum from our new branded media campaign, which drove a 25% increase in loan application volume and a second straight quarter of record new customers, resulting in a 20% increase in loan growth over the prior year,” GoEasy president and chief executive officer Jason Mullins said in a statement.

For the nine months also ending 30 September 2019, GoEasy achieved revenues of $444 million, up 21% from the $368 million for the same period of 2018. Overall same store sales were 19.8%.

EasyFinancial revenues climbed 28.4% to $340.2 million, from $265.0 million for the comparable period.

EasyHome had revenues of $103.6 million, a modest 0.6% uptick from last year’s $103.0 million as same store sales climbed 3.4%.

Net income for the first nine months of 2019 was $57.7 million or $3.72 per diluted share, up from $37.2 million or $2.53 per share – a more than solid advance of 47% on a per share basis.

At the end of September, the publicly held GoEasy operated some 250 EasyFinancial locations, adding nine to it store count the year. It also operated 163 corporate and franchise EasyHome locations, two fewer than at the beginning of the year.

October home sales up 13%

18 November 2019
By the Numbers

OTTAWA – Sales via its Multiple Listing Service (MLS) were steady in October over September but gained 12.9% over the same month in 2018, according to the latest figures from the Canadian Real Estate Association (CREA). Meanwhile, new listing fell 1.8% on a month-over-month basis and the national average sales price continued to advance.

The realtors’ group noted sales activity in October was almost 20% higher than the six-year low reached in February 2019 but remains 7% below the records set in 2016 and 2017.

It also reported there was an almost even split between the number of markets reporting gains and declines. For example, sales were up in Greater Vancouver (GVA), the neighbouring Fraser Valley and Ottawa. These were offset by declines in the Greater Toronto Area (GTA) and Hamilton-Burlington.

Chart courtesy of the Canadian Real Estate Association.On an actual (not seasonally adjusted) basis, transactions were up from year-ago levels in 80% of all local markets in October, including all of Canada’s largest urban markets.

“Steady national activity in October hides how the mortgage stress-test remains a drag on many local housing markets where the balance between supply and demand favours homebuyers in purchase negotiations,” CREA president Jason Stephen said in a statement.

“It’s a full-blown buyer’s market or on the cusp of one in a number of housing markets across the Prairies and in Newfoundland,” added CREA chief economist Gregory Klump. “Homebuyers there have the upper hand in purchase negotiations and the mortgage stress-test has contributed to that by reducing the number of competing buyers who can qualify for mortgage financing while market conditions are in their favour.”

The number of newly listed homes fell 1.8% in October, with the GTA and Ottawa posting the largest declines. Almost a third of all housing markets posted a monthly decline of at least 5%, while about a fifth of all markets posted a monthly increase of at least 5%.

Steady sales and fewer new listings further tightened the national sales-to-new listings ratio to 63.7%, continuing to climb above its long-term average of 53.6%. Its current reading suggests negotiations are tilting in favour of sellers although there are significant regional variations.

The number of months of inventory represents how long it would take to liquidate current inventories at the current rate of sales activity. It fell to 4.4 nationally in October – the lowest level since April 2017 and continuing to decline from its long-term average of 5.3 months.

The actual (not seasonally adjusted) national average price for homes sold in October 2019 was around $525,000 – up 5.8% from the same month last year. Excluding the GVA and GTA, this country’s most active and expensive housing markets, the average falls to around $400,000 and reducing the year-over-year gain to 4.7%.

In her research note, Rishi Sondhi of TD Economics pointed out that October’s essentially flat performance came on the heels of seven straight month gains. “What’s more, sales are strong on a trend basis, with activity up 12.9% year-over-year,” she said, adding she continues to believe the housing market will contribute to the overall expansion of the economy.

“Indeed, the combination of strong job markets, rising wages, low mortgage rates, robust population growth and further distance from restrictive policies are powerful factors for demand,” she said.

Related Story: Housing starts, sales to stabilize next year, CMHC says

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