UPDATE 2-Rona says will sell assets, focus on distribution

Thu Dec 6, 2012 12:56pm EST
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* Company says will return to roots as distributor

* Rona promises simpler structure, quarterly updates

* Shares rise more than 3 percent on the TSX (Adds CEO comments, background, updates share price move)

By Euan Rocha and Allison Martell

Dec 6 (Reuters) - Canadian hardware retailer and distributor Rona Inc will sell assets and simplify its operations as part of a back-to-its-roots strategy designed to turn its fortunes around, the company's interim chief executive said on Thursday.

Dominique Boies, who took the reins at Rona following last month's exit of long-time CEO Robert Dutton, said he plans to bring profit margins in line with industry standards with his changes, which will shift the company's focus back to its roots as a hardware distributor.

Rona, Canada's largest distributor and retailer of hardware, home renovation and gardening products, has grown through a series of strategic acquisitions.

But the Quebec-based company has stumbled in recent years amid strong competition from U.S. giants Home Depot and Lowe's Cos Inc. Earlier this year it was the target of an unsolicited C$1.8 billion ($1.8 billion) takeover proposal from Lowe's.

Lowe's withdrew its proposal in mid-September in the face of stiff opposition from both provincial politicians in Quebec and from many of Rona's independent dealers.   Continued...