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WILL RONA BUY ITS WAY INTO THE U.S. MARKET?

As Lowe’s ponders its move into Canada, Québec-based home renovations retailer Rona is mulling a move in the other direction.

Boucherville, Québec-based Rona has snapped up several Canadian home store chains since 2000, the largest being Cashway (in 2000), Revy (2001) and Reno Depot/Building Box (2004). The Rona banner now flies over 565 stores, amounting to some 12 million square feet of retail space, but the company says it is not done growing yet.

Rona has set itself the ambitious goal of increasing total sales from nearly C$5 billion ($4 billion) last year to C$7 billion by the end of 2007. That could include buying U.S. operations if they are a good fit, says Sylvain Morissette, Rona’s head of communications.

“We want to continue to reinforce our network nationally and, eventually, throughout North America,” Morissette said. “We can’t close our eyes and ears to potential acquisitions if there is a link with our activities.”

Morissette points out that half of the U.S. market is fragmented, with thousands of independent home improvement businesses that are potential acquisitions. “But nobody is doing what we do,” he said. “We are the sole consolidator.”

Two of Rona’s biggest distribution centers are located near the U.S.-Canada border and could serve stores in the United States, says, Morissette.

Rona is inspired, he says, by two other Québec retailers that have expanded into the U.S. through acquisition: Alimentation Couche-Tard, of Laval, Canada’s leading convenience store operator, which purchased the Circle K gas bar chain in 2003; and Montréal-based drugstore retailer Jean Coutu Group, which bought the Eckerd Corp. last year.

— ST