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ICSC WHISTLER 2009 – A Look at the Horizon

By Stu Wells    January 14, 2009

ICSC Whistler started in 1998 with something like 100 registrants. Today, it overwhelms the resort, flooding the Village streets, restaurants and bars with the dealmakers of the nation's retail development industry (as chronicled in my colleague James Speakman's report on last year's affair). I was anxious this year to hear the conference speakers and to gauge the mood on the streets.

I've attended shopping centre conferences during tough economic times, none so potentially dire, at which pessimism has been palpable. I wouldn't have been surprised to see glum faces like the ones we see in 1930's newsreels. Despite unprecedented turmoil in world markets, or perhaps because of it, the mood was more upbeat than grim. Maybe it's because we've had such a great run that we're due for a turnaround, or maybe it because there's been so much bad news lately, we're ready for anything. It wasn't a wake.

Opening Remarks

According to Glenn Barrick, ICSC 2009 Co-chair and VP Portfolio Management Grosvenor Canada, the weapons of mass destruction that proved elusive in Iraq, were found in 2007 in the US, home grown in the form of the sub-prime meltdown. While there are many conflicting opinions on how bad it might get, there is no doubt this time, that everyone will be affected. But he pointed out that the industry has weathered many disasters, including 1990 and 911, emerging damaged and changed, but intact. Glenn suggests the result shouldn't be any different this time.

One indicator of mood is attendance at conferences. Glenn reported that paid registrations at Whistler were "comparable" to prior years. The rumour is that registration was down about 10 percent. I thought that was surprisingly good. The usual crowd of non-registered attendees was perhaps diminished in numbers a little, nevertheless lively and full of good humour. The deal making, networking, meet the retailers, skiing and glad-handing went on pretty much as usual. It didn't seem like many people were prepared to surrender to malaise.

State of the Industry

I really wanted to hear the state of the industry address. Just how bad would things be? ICSC Chairman Mary Lou Fiala, President of Regency Centers of Jacksonville Florida, laid out a number of dismal statistics, but kept the message short and not so bitter.

US unemployment is the highest in 25 years and the consumer confidence index has sunk to a record low 44.7 (1985 = 100). While the slide held off in Canada for perhaps an additional 12 months, the Canadian economy is certainly decelerating now. The swing in Canada will not be as severe. Canadian consumer confidence has been demonstrably declining for three consecutive months and is below 1991 levels. US retail sales growth for the first ten months of 2008 was a meagre 1.9%. Canada in the same period was 4.3%. It's a little early to have complete holiday sales statistics and the all important January sales statistics that follow, but certainly the figures will be weak.

Mary Lou's message though, was that notwithstanding everything, the shopping centre industry is strong and will weather the storm. She believes many positive opportunities will be presented in the next while, albeit with some consolidation and repositioning. This time the crisis is being addressed very aggressively on a global level. The impact and intensity of the downturn may accordingly be lessened and critical confidence may be restored earlier than what might have historically been the case. More than anything else, confidence is key.

(An Aside)

In the middle of paying careful attention to Mary Lou, my eye caught a Reuters news item on my Blackberry. Scant hours before Mary Lou began her address, outgoing Wal-Mart CEO Lee Scott was telling the National Retail Federation's annual conference in New York that while the US government efforts to stimulate the economy will have "some impact", he doesn't see anything that tells him it's going to turn around quickly. "We all hope by next Christmas, it certainly isn't any worse." … But that's not Whistler.

The Upside View

Mary Lou expressed confidence that after a fairly dismal first half 2009, the recovery will start, and it will be visible first in the US, and shortly thereafter in Canada. While some developers will fail and store closings will be industry wide, "the real estate industry is in really good shape". There are no unusual or insurmountable problems. Necessity will cause the most successful elements of shopping centre design and practice to be blended, combining the best on all fronts. New consumer demands are emerging that require attention and innovation. Formats continue to evolve and will provide greater diversity and will stimulate demand. Redevelopment opportunities abound. Mary Lou is confident that the industry is positioned for change and challenge. "Spend time figuring out how to not merely survive, but to thrive." The truth of the matter is nobody knows whether optimism is warranted. Many I talked with don't seem to disagree with the notion that after about 18 months, at most, this will largely be behind us and that 2009 will be a tough year, but not a disaster. I suppose it's as good a guess as any.

The Party

Monday night, the receptions and dinners continued in full swing, well attended and, just like in peak times, a press of humanity and wine fuelled joviality. An outside observer would think it was a mass celebration. Our own dinner was filled to capacity and there was certainly no sign "there's a war on". I came away thinking that there are a very large number of imaginative, talented, intelligent and energetic people in this industry. It will all work out.

Stu Wells


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