The Gazette from Montreal, Quebec, Canada • 37

HOW THEY CLOSED TSE CDNX DOW 7756.46 3012.47 9720.76 238.35 1 857.44 $260.50 S0.70 63 87 0 05 6.75 UNCH SECTION Technology Dk Company Earnings D9 Careers D12 NASDAQ DOLLAR PRIME RATE See World Markets on Page D6 BUSINESS EDITOR: DAVID YATES (514) 987-2512 WEDNESDAY, MARCH 21, 2001 -A- 1 stocks the loony has simply been sideswiped in the investors' flight to safety Analysts say that's not far from the truth. The once-powerful U.S. economy may be on the skids, but concerns have also flared about Japan and other Asian economies, all of which have panicked investors. "So as negative as we are on the U.S. economy, there are other negative things in the world going on," said Andrew Pyle, senior economist with Bank of Nova Scotia in Toronto.

"Therefore, it's the lesser of two evils and people will always go with the safest of the two, and that is the U.S." Prime Minister Jean Chretien echoed Dodge in noting that the loony is doing better than most other global currencies. "The Canadian dollar is a floating currency and, in fact of all the currencies, in relation to the American dollar, it is the Canadian dollar that has done the best," Chretien said in the House of Commons. Critics have complained the Liberals are deliberately encourag biggest gainer, up 1.15 per cent. The industrial products group, containing Nortel Networks and other key high-tech issues, was the biggest declines falling 4.79 per cent. The Canadian dollar closed at 63.87 cents U.S., up 0.05 from Monday's close but still near a 254-year low.

Bank of Canada governor David Dodge said yesterday the loony has been doing much better than many other currencies, led the decline in Toronto. On Wall the Dow Jones industrials lost 238.35 to close at 9720.76. The last time the Dow closed lower was March 24, 1999. The Nasdaq composite index tumbled 93.74 to 1,857.44, a closing low not seen since November 1998. "I think we're still in a pretty heavy downtrend," said Katherine Beattie, senior technical analyst at Standard Poor's MMS in Toronto.

"There were people out there who really wanted (a three-quarter-point rate cut) and they didn't get it, but it's not such a big surprise that they didn't get it," Beattie said. "Fifty basis points (half a percentage point) is what was widely expected a week ago. They did 50 basis points and that's 150 in three months!" In Toronto, nine of 14 stock groups fell. The oil-and-gas sector was the JAMES DALZIEL and SANDRA CORDON Canadian Press TORONTO Dr. Greenspan's medicine for the ailing U.S.

economy wasn't strong enough, investors decided yesterday, leaving major stock markets at levels below anything seen last year. Many were disappointed by the half-point interest-rate cut from U.S. Federal Reserve chairman Alan Greenspan, announced at mid-afternoon, and sent prices skidding lower. They had hoped the Fed would lower rates by three-quarters of a point. The Toronto Stock Exchange 300 composite index gave up almost all of Monday's hopeful advance and fell back to its levels of December 1999.

High-tech stocks like Celestica, JDS Uniphase and Research In Motion HENNY RAY ABRAMS. AFP A glum trader in New York looks at the numbers yesterday. ing a weak dollar to boost exports. But like Chretien, Finance Minister Paul Martin has consistently argued including the Australian dollar. Money traders have flocked to the U.S.

greenback as a perceived haven in rough economic times. Trade surplus is a record. Page D3 Greenspan: lost his touch? Page D3 Rate cut sparks decline. Page D6 Sears will fill Eaton's space at Fairview mall Home Outfitters also joins Steltor, Profilium, kept venture capital at bay now they're ready to expand FRANCOIS SHALOM The Gazette espite the stock-market slump and the retrenching among venture capi Ffe talists, some Montreal-based Inter I JL.JT net-related firms are still confident IIIIIPI ly talking expansion and expecting to raise venture capital by mid-year. Take a couple of private companies with go-slow, conservative approaches to targeting the wireless-data market.

Steltor, whose software tracks schedules and appointments, expects to almost double sales to $17 million this year, while upping its Sears Canada will finally fill the vacant space at Fairview Pointe Claire left by Eaton's departure two years ago, and the mall will welcome major new tenants, including bed, bath and kitchen-accessories retailer Home Outfitters, a division of The Bay. Quebec's first Home Outfitters will be in a ground-floor spot formerly held by a Super supermarket and still sporadically used as a liquidation centre for Sports Experts, which has a full-line store above it Sears will move from its present mall location to the much larger former Eaton store at the centre's west end. Since the fall of 1999, when Eaton went bankrupt, the two-level area has also been used as a makeshift liquidation store for items like luggage, footwear and linen. Sears and the Home Outfitters superstore will open in early August, said Ivan Boulva, Cadillac Fairview vice-president (development for eastern Canada). Sears will remain open, he added.

"They'll be open at their location one day and at their new location the next," Boulva said. For the present Sears site, Boulva said that negotiations are nearly completed with "a Quebec-based fashion department-store chain." That chain was identified by an insider as Les Ailes de la Mode. Simons, the only other Quebecer-based department-store chain that specialized in fashion, was looking to add two stores to its downtown location, but has already begun work at its two chosen spots, in Saint-Bruno and Laval. Les Ailes will reportedly take over 95,000 square feet of the current Sears all mmmmmmmmmmmmmmmmmmmmm work force by a third to 200. It has never tapped outside investors and has posted profits every year since its 1988 inception.

Profilium, whose technology sends targeted, location-based ads to cellphone users, has just signed deals with big-name partners like Lucent and Ericsson and plans to launch the service in the fall. The one- I ANDY RIGA TECHNOLOGY "(Sears will) be open at their location one day and at their new location the next." Ivan Boulva, Cadillac Fairview Corp. the ground floor, plus 15,000 square feet upstairs. Boulva would not confirm that Les Ailes would become a tenant, but said that there are talks with a couple of PIERRE OBENDRAUF, GA2ETTE Andre Courtemanche of Steltor: "My philosophy is to be a sound business first." year-old firm expects to hire 55 new workers by summer's end, for a total of 100. Both are taking cautious approaches to wireless.

Their success is not predicated on much-bally hooed third-generation cellular networks, which will allow high-speed wireless Internet access but will cost a bundle to build in coming years. Instead, their technologies are aimed at the hundreds of millions of cell phones now in use that can receive short text messages. Thanks to their technologies, cell-phone operators will squeeze more revenue out of existing customers. Of course, both companies are finding that initial public offerings are now more distant prospects and investors a little harder to convince. But Steltor and Profilium are currently talking up venture capitalists and expect to raise $10 million U.S.

apiece this spring to fuel growth. Their stories are in contrast to that of former Internet darling Zero-Knowledge Systems, a Montreal company that laid off 70 of its 260 workers last week. The firm, which had high hopes for an LPO last year, had hired like mad thanks to venture capital, only to find few willing to pay for their consumer-oriented Internet-privacy service. Revenue is a trickle. Zero-Knowledge executives are also contend ing with several presumably anxious venture capitalists (who have poured $59 million U.S.

into the company) looking over their shoulders. The bursting of the high-tech bubble has affected most Montreal companies. Eleven months ago, Andre Courtemanche, chief executive of Steltor (formerly known as was quoted in this space saying his company was headed for a fall 2000 IPO, "as long as (the stock market) doesn't continue to shrink like a pile of snow on a sunny day." Well, the melting hasn't stopped and the IPO never materialized. other fashion and sports retailers to take over the remaining Sears space possibly Sports Experts. They are slated to open in mid-2002.

Normand Blouin, Cadillac Fairview's senior vice-president (eastern Canada), said Home Outfitters' "specialized merchandise will fill a niche increasingly in demand." Claude Senechal, regional manager for sales and store services for Sears Quebec, said that moving to bigger digs will "enable Sears to stock a wider choice of merchandise, notably enhancing its offering in women's fashion, beauty products and home accessories." Lynsey Jones, manager of La Vie en Rose, a lingerie shop next to the former Eaton, welcomed the move by Sears. "The liquidation centre didn't really bring in many people," Jones said. "They didn't park (close by) to go and shop there. Sears will pull in much more traffic." Jean-Francois Dugal, general manager of the one-million-square-foot Fairview mall, said in a telephone interview that "despite the closing of the Eaton anchor store, sales have done very well. They've actually increased." Sales per square foot of retail surface is.

nearly $460 per year at the mall, a major regional draw for shoppers. But that figure is for smaller shops and does not include major retailers like The Bay and Sears. Boulva agreed that "the liquidation outlet was out of lular phone is the company's next target. Customers include two big European cell-phone operators: BT CellNet and Telecom Italia Mobile. Today, about 55 per cent of Steltor's revenue is generated by its traditional enterprise customers, the rest from Web and wireless software.

Next year, those proportions should be reversed. Over the past few years, "a lot of (high-tech) companies saw financing as the way to operate, the way to develop their products and sales," said Courtemanche, 39. "My philosophy is to be a sound business first and then let's maximize it with financing if we can do it. If your business model isn't sound, financing won't patch it up, just like a coat of paint won't change fundamental problems in your wall." Many "companies got loads of cash based on promises, based on expectations. Please see RIGA, PageDS But in an interview yesterday, Courtemanche said Steltor isn't shrinking in the face of the adverse investing climate.

Sales in 2000 were $9 million, with $17 million projected this year. Meanwhile, one of Steltor's VC-funded competitors has laid off half its work force and is bleeding red ink. Steltor, established with a $10,000 loan from Courtemanche's mother, is in discussions with venture capitalists, but even if the Financing doesn't come through, it expects to hire 50 workers over the next year, Courtemanche said. A big reason for the steady growth is that Steltor is building new markets while it nourishes old ones. Before venturing into wireless, it focused on software that allows workers in companies and universities to track schedules and appointments on desktop computers.

The technology was then shifted to the Web, where portals can add Steltor's calendar software to their offerings to consumers. Your cel place. But it was revenue." The renovations and moves will carry a price tag of about $20 million and will create about 75 jobs. Fairview is co-owned by real-estate giants Cadillac Fairview and Ivanhoe Cambridge. Ustn, TtteDALE, everyone KNOWS THAT OPTICS Oh GoDFKEy, you'xe JUST NOT WITH IT! 6 Group Telecom offers leading business telecommunication products and services operated over its own fibre-optic network.

www.gt.ca 1-877-484-5101 CgfOUp tOlOCOm COMPLETELY CONNECTED'.