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Mega sees alliance with Dufresne as benefit

By Michael J. Knell -- Furniture Today, February 26, 2006

Saskatoon, Saskatchewan — Mega Group has restructured and will use revenues generated by its new strategic business unit to create more value for its retailer shareholders.

Michael Graydon, president and CEO of the co-operatively owned buying and marketing group, said The Dufresne Group's decision to launch its own buying group allied with Mega will benefit both parties.

"This will do nothing but add value to our organization," he said.

The restructured group has two divisions: the strategic business unit under Kevin Leier, Mega's vice president of finance, and the traditional business unit, headed by Benoit Simard, vice president of retail systems.

Leier is based at headquarters here, with Simard at Mega's retail services office in Boucherville, Quebec.

The strategic unit will provide financial services to the Dufresne group, other smaller buying groups and larger retailers such as the Allied Home Furnishings Network and Trail Appliances, a 15-unit white goods specialist with stores in Alberta and British Columbia. That includes central billing, volume rebates, inventory financing and other credit-related services.

"For all intents and purposes, (the two divisions) are two separate businesses," Graydon said. "The (larger) companies don't need our merchandising and marketing programs, so we can concentrate these efforts on our traditional members."

He emphasized that Dufresne and others allied with the strategic business unit will not be Mega shareholders but customers who receive a well-defined set of services. "All of the shareholders are in the traditional business unit," Graydon said, adding that shareholders will remain in control of the company.

The traditional business unit includes the 71-member Countrywide and Multi-Meubles retail systems. Graydon has four key goals for the unit in 2006: build the business, recruit new members, add import programs and improve communications with members.

In the unit, veteran Mega manager Michael Vancura has been named to the new post of general manager of retail systems. Reporting to Simard, he will be responsible for the growth of the Countrywide and Multi-Meubles networks.

"We want to continue our development from being a traditional buying group to being the provider of retail systems," Graydon said.

Some industry observers say it's still too early to tell whether the acquisition of Cantrex Group by Sears Canada will be accepted by all members, and they believe there's an opportunity for Mega to bolster its ranks here.

Meanwhile, Mega will launch two import programs this year, acting as distributor and relieving members of logistic concerns, and open more distribution centers across the country, Graydon said.

In addition to its annual general meeting and convention, set this year in early May in Scottsdale, Ariz., Mega will hold regional meetings throughout the year and also will upgrade its training programs.

"This will give members the opportunity to re-connect with each other more frequently," Graydon said. "This is a really important part of our culture as a member-owned organization."

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Mega sees alliance with Dufresne as benefit

Mar 2, 2006

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