Reliance Worldwide bolts into Lowe’s

The plumbing supplies maker will benefit from a single supplier agreement with the US hardware giant.

Plumbing supplies outfit Reliance Worldwide, a recent addition to ASX boards, has announced a deal that will see its core product hit the shelves of US hardware giant Lowe’s, although potentially at the expense of shelf space at The Home Depot.

In a statement to the market this morning, Reliance said it had signed a single supplier agreement with Lowe’s to supply its SharkBite-branded push-to-connect fittings to its network of 1700 stores.

The nature of the single supplier contract means Lowe’s will only stock the Australian group’s products in that particular range, although Reliance is able to continue selling the products to Lowe’s competitors, including current customer The Home Depot.

The deal does, however, force the cessation of its current exclusive agreement with The Home Depot, meaning the latter is free to introduce competitors to SharkBite in the range.

“Reliance is confident that these changes will position the SharkBite product range optimally for the long-term in the US market,” the company said in a statement.

“The PTC product category has excellent growth prospects and this will be aided by SharkBite products being sold and marketed as widely as possible across all sales channels.”

The rollout into Lowe’s will be seen through 2017 and 2018, with no material impact seen on profit for fiscal 2017.

Investors initially pushed Reliance shares down over 4 per cent as they eyed the Home Depot news, but by 2.45pm (AEST) they have recovered to trade down just 0.5 per cent at $3.34.