Edmonton Journal from Edmonton, Alberta, Canada • 63

BEST COPY AVAILABLE n-nny 77 tn tn tn royal Lepage UyMCyilUJivVCkJ lately EDITOR Kamy Kerr, 423-5325 a BEw IrDgiircojdS'S IMii Lq Four of five Woodward's closures are in Edmonton malls MAIRI Mac LEAN Journal Business Writer 4 .1 Edmonton Edmonton is taking by far the heaviest battering as a result of the proposed Woodward's Hudson's Bay Company merger, which will see 20 former Woodward's stores in Alberta and B.C. transformed into Bays or Zellers (a Bay subsidiary)- Of the total of five department stores to be closed as part of the deal, four are in Edmonton regional shopping malls: Southgate, Northwood, West Edmonton and Mill Woods Town Centre. Analysts say losing an anchor tenant can be devastating to a mall because it's the anchors which define the centres hile drawing consumers in. To have four major malls lose their anchors means the face of Edmonton retail will change markedly over the next while, as landlords beat the bushes to plug the holes left by Woodward's exit. They also say the closures are a definite psychological blow to the city, and could mean some employment woes in the transition period.

But analysts and landlords agree the fallout happened here because Edmonton is over-retailed. "It's a rationalization of the development that occurred in a different economic climate, the '70s and '80s. I'd hazard a guess that the potential of building another regional mall in Edmonton won't be apparent until well into the next century'." says Ron Dezman of Gettel Dezman Appraisal Consultants in the city. Robin Cordwell of Laing Properties, owner of Northwood Mall, says the four closures are "obviously of great concern" to Edmonton. "But I think it's a necessary and healthy adjustment and will be viewed so from a distance." Lome Braithwaite, president of Cambridge Shopping Centres Ltd.

which owns Southgate and Mill Woods Town Centre, says the fact that Edmonton is overbuilt is now coming to bear on our retail economy. "It sends a very clear message to any developer that this city doesn't need any more retail." A contributing factor is that department stores as a sector "are re-structuring and getting their act together" says Braithwaite. "They've obviously been struggling and losing market share in the last five years and there's lots of change going on. But Zellers is doing quite well, the Bay is improving. Sears is historically more profitable in Canada than the U.S., and Eaton's, no one knows about." What might we see moving into the hundreds of thousands of square feet to be freed up should the proposed merger deal proceed? (It will be voted on by various stakeholders May 6.) Dezman says that landlords have had months of lead time to brainstorm, because they've known about Woodward's woes since last fall.

While they won't divulge names, landlords talk about filling holes with other department stores or large-scale retailers. Rumors include: Nordstrom's, J.C. Penney, Sears, Costco, Eagle Hardware, large home-improvement and of- Photo illustration by Ken Orr The Journal Record week on Alberta exchange JAC Mac DONALD Journal Business Writer Edmonton Frenzied trading reached new altitudes on the Alberta Stock Exchange, with over 57 million shares changing hands this week. "This would be the biggest week of trading this stock exchange has ever seen," ASE president Tom Cumming said in a telephone interview Friday. The trading activity this week alone was worth $52 million, spurred on by what Cumming called a "fairly hot market" for junior oil and gas issues and the diamond play in the North West Territories.

More than 12.6 million shares, worth $13 million in over 3.400 trades involving 267 different stock issues, were traded Friday, he said. That compares to 2.5 million shares traded on the same day a year ago, worth $2 million in 700 separate trades involving 173 different stock issues. Low interest rates and relatively pxr performance in other parts of the economy have investors moving into ASE resource stocks. Most of the action has been in oil and gas, but about 15 per cent has been in the diamond frenzy fuelled by finds in the Lac le Gras area, he said. The exploding activity on the ASE has exchange officials scrambling to find room on their trading floor.

"We have hardly any space left on our trading floor," Cumming said. TD Greenline and Wood Gundy are the most recent firms to open up trading desks at the ASE, bringing total numbers up to 18 houses on the floor, out of 37 member stock brokerage firms, he said. Exchange officials hoisted a bottle of Big Rock beer at the end of trading Friday, to mark the debut of Big Rock Breweries on the exchange, he said. Big Rock was the largest single trader Friday, with 271,000 shares crossed at $5.50 a share, he said. April will likely mark yet another record month, following record market activity in each of the first three months of 1993, he said.

Trading volume in March of almost 180 million shares was a 32 per cent increase over February, and a substantial 150 per cent increase from March of 1993, exchange figures show. The value of shares traded in March was over $166 million, an increase of 33 per cent over February, and a rise of 78 per cent over March of 1992. Cumming said the exchange has been attracting increasing interest from Canadian mutual funds after the 1992 success of the Altamira Resource Fund. "What it has done to us we are trading most days 10 per cent of the Canadian equity value on any given day," he said. The ASE typically averages only six per cent of the Canadian market, he said.

The exchange is also benefiting from European institutional investors, he said. During the first quarter of this year, trading increased on all Canadian stock exchanges, but took off like a rocket on the ASE. Volume jumped 98 per cent on the ASE in the first quarter compared to last year. The Vancouver Stock Exchange saw a 19 per cent increase in the same time, the Montreal Exchange gre.v 46 per cent, and the TSE jumped 72 per cent. Four malls losing major tenant WllfflrS Northwood Mall 97 St.

and 137 Ave. those patterns are disrupted, and stores lose sales, so "it can be a complicated juggling act." Chandler says that by using an industry measure of 500 square feet per employee, up to 600 people might temporarily find themselves without a job as a result of the four closures. David Brodie, analyst with Wood Gundy in Toronto, says Edmonton will take a hit on job losses as a result of the closures, but jobs should gradually come open as space is filled. Landlords say they're confident space will be leased. Braithwaite points out that just last year, his company lost eight anchors in malls it owns in Central Canada and all were successfully replaced.

"One of the big goals is to get people up and going for Christmas. Analysts point out that while the situation seems grim for Edmonton right now, the retail sector is recovering, albeit at a snail's pace. They also note the market for retail real estate is a good bit healthier than that for office leasing. "I think retail space is on the mend; some values have increased compared to other real estate like office and high rise. And there's some slow return on retail sales," says Chandler.

"Lome Braithwaite has done fairly well with a 5 per cent vacancy rate. So regional shopping centres aren't in quite as rough shape as you might think." fice supply stores. Braithwaite says he's been talking to major U.S. and Canadian department stores as well as "big-box" retailers, the category-dominant and warehouse stores. But Cordwell says the spectre of carving up the space for smaller stores remains a distinct possibility, and it could take anywhere from six months to two years before vacancies are filled.

"Finding same size retailers might be a bit difficult," says Dezman, "but I don't see it being appropriate for regional malls to find small tenancies. It lowers the quality of the mall and causes difficulties with other retailers. Still, because of retail trends, carving space may be the only option. National chains and anchor stores are re-evaluating their position in the marketplace." "There aren't a lot of 80,000 square foot anchors out there right now," says Toronto retail analyst Scott Chandler "There certainly are discount stores, the K-Marts and the Woolcos, but that (having them move in) also changes the orientation of the mall." And slicing up big space into small isn't as easy as it looks. Dezman says malls are designed to create certain traffic patterns, as customers move from anchors to food courts, passing the national chain stores in between.

With a hole where the anchor used to be, ii'oiratus West Edmonton Mall: 8770-170 St. Mill Woods Town Centre 2331 65 St. Southgate Shopping Centre Whitemud Dr. and111 St. Province accused of with-holding pulp mill's pollution record DENNIS HRYCIUK Journal Business Writer vincially set limits for both air and water emissions, he noted.

The mill has also hired consultants to find solutions to odor problems, said environmental manager Tom Tarpey. Responding to criticism by a local environmentalist that the Wednesday public meeting cut off questions, Tarpey said there has been plenty of opportunity in recent years to ask about the company's record. "I don't know what more we could have done." pare for a public meeting in Peace River held last Wednesday. The environmental group still doesn't have the information and the deadline for Daishowa's licence renewal is fast approaching, Vetsch said. Friends of the North and other groups also started a legal battle about three years ago.

They charge that the federal government should have conducted an environmental review of the mill project because of its possible consequences on rivers systems be yond Alberta. Because of this case and more stringent provincial regulations that will govern Daishowa this fall, the province should renew Daishowa's licence for only six months, Vetsch said. Provincial officials, including Environment Minister Brian Evans, could not be reached for comment Friday. But at Daishowa, spokesman Wayne Crouse said the mill has had a good environmental record. It has been 50 per cent below pro- Edmonton Friends of the North.

Vetsch said provincial officials have warned that they might not provide any documents on the mill's environmental record because her group has launched a court action calling for a federal environmental review of the mill. "It's a lame excuse," Vetsch said in a recent interview, noting that the province is not involved in the court case. Friends of the North asked the province for the mill's environmental record in early April to pre Edmonton An environmental group says the Alberta government has refused to provide it with environmental information about the Dai-showa-Marubeni pulp mill at Peace River. But the information is crucial because the mill is scheduled to have its operating licence renewed for five years on May 1, said Lorraine Vetsch, spokeswoman for Klein's economic call to arms clashes with political instinct Rod Ziegler A- Business Beat vice programs, somebody has to stay after school. Quite honestly, Ralph and Jim, I wasn't expecting a "lightning-bolt of revelation" from the state-of-the-province-as-we-hope-ifs-going-to-be address, you gave me Thursday night.

I was hoping to hear an assessment of where you think we are, where you want to take us and how you plan to get us there. If your message really is, as the treasurer says, that henceforth we shall run this province like a business, then I think we're in for some truly interesting times. Business's bottom line is profit; government's bottom line is survival Business knows that, to survive, ya gotta make a profit. Nothing I've heard in the last two days convinces me this government is speaking the same language as business. Politicians' bottom line, after alL is that to survive, ya gotta survive.

Rarely do these two objectives converge. At that, I saw several sets of audience eyebrows rise several millimetres. This government, perhaps more than any other in the country, has herded itself into a corner, yapping and snarling at its own heels; shouting out a mantra that says no new taxes, but spending cuts. Maybe Paul Boothe is wildly optimistic to think Treasurer Dinning can find $750 million to cut from the May 6 budget. Dinning eluded us ink-stained WTetches, Friday, for believing that budgeting involves nothing more than Grade 2 arithmetic adding and subtracting, as it were.

That's true: Dinning's predecessor proved one needed at least high school math to do the ciphering needed to justify the wildly inaccurate revenue and budget-balancing projections we've been subjected to since 1985. Notwithstanding that, even a kinder-gartner ought to be able to fathom Dinning's explanation that, 'if you're borrowing $1.26 for every $1 you raise in taxes" to pay for health, education and social ser crowd rise at least a millimetre. These are economists, CAs and assorted professional types all quite capable of explaining to you the opportunity cost of turning water into wine. That, after all, was what Dinning's listeners probably hoped to hear: some hint, some glimpse, some indication of how the treasurer planned to turn oceans of briny deficit water into wineries full of the most potable wine. After all, as University of Alberta economist Paul Boothe told the Journals Joan Crockatt after Klein's Thursday speech, for life as we know it to continue in Alberta we ought to be looking at spending cuts of perhaps $750 million.

That fits right in with Dinning's remarks to the Economics Society: this Seizing Opportunity document, he said, is meant to signal changing roles between government and the private sector; to signal that industry-led economic development is the wave of the future; that the government's best and only role will be to ensure there "Everyone was looking for a lightning-bolt of revelation," Treasurer Jim Dinning said, Friday, referring to Premier Ralph Klein's state-of-the-province-as-we-hope-it's-going-to-be address Thursday evening. What we got, folks, was the philosophical equivalent of the Gettysburg address: a call to arms; an attempt to banish all the old myths, shibboleths and evil spirits hich have haunted this government since its days when it was created in the image of the Harvard Business School and squandered from the golf courses of Palm Springs. This new call to arms is called Seizing Opportunity: Alberta's Xew Economic Development Strategy. Alberta's old strategy, the treasurer said in a luncheon address to the Economics Society of Northern Alberta, was to carry on as if we're paying for everything with the proceeds from $35-a-barrel oil. Several times during Treasurer Din-ning's avuncular address, one noticed multiple sets of eyebrows in the luncheon is a competitive, fair taxation environment still existing.

This document signals the government will have four watchwords: facilitation, co-operation, competitiveness and innovation. Dinning said. Answering questions later. Dinning suggested that you and I should watch for his May 6 budget not to focus on revenue and taxation, but to deliver a business plan for the medium-term. You will see us.

Dinning said, trying t0 adopt procedures that business has had to adopt to survive in this economy..