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Found 15 results

  1. Can Richard Baker reinvent The Bay? MARINA STRAUSS From Monday's Globe and Mail NEW YORK — Richard Baker, the new owner of retailer Hudson's Bay Co.,mingled with the New York fashion elite as the lights dimmed for designer Peter Som's recent show, offering opinions and taking a close look at the latest in skirts and dresses. It's a stark contrast to previous HBC owner Jerry Zucker, who HBC insiders had a hard time picturing with fashionistas in New York. But Mr. Baker, who made his name in real estate, knows it is time for a new approach at the struggling retailer. “As an entrepreneur I'm not necessarily fixated on how things were done in the past,” says Mr. Baker. “We function and we think much more like a specialty retailer rather than a department store retailer. A specialty retailer is much more nimble and willing to adjust to the environment than department stores, historically. Department stores, frankly, haven't changed a whole lot in 100 years.” His Purchase, N.Y.-based equity firm, NRDC Equity Partners, has snapped up a string of dusty retailers, among them HBC's underperforming Bay and Zellers. The Bay operates in the department store sector which is on the wane, squeezed for years by specialty and discount chains. Zellers struggles in a low-priced arena dominated by behemoth Wal-Mart Canada Corp. The need for a makeover is clear: The Bay's sales per square foot are estimated at merely $142, and Zellers', $149 – a fraction of the estimated $480 at Wal-Mart Canada. At Lord & Taylor, which also lags some of its key U.S. rivals in productivity, Mr. Baker has had some success in its efforts to return to its high end Americana roots. But the 47-store chain is feeling the pinch of tight-fisted consumers and, late last month, he unveiled a shakeup at the top ranks of his firm's $8-billion (U.S.) a year retail businesses to try to shave costs. Still, he is pouring money into the chains in other ways, quickly distinguishing himself from Mr. Zucker, who died last spring. While the former owner had named himself CEO despite his lack of merchandising experience, the new owner has handpicked a team of seasoned merchants at the senior levels of his retailers. And while Mr. Zucker shunned publicity and focused on more mundane, although critical, matters, such as technology to track customer demand, Mr. Baker enjoys the limelight. Now he is betting on the fragile fashion sector as an engine of growth. Last fall he set up Creative Design Studios (CDS) to develop designer lines for Lord & Taylor, now, HBC and, eventually, retailers around the world. Mr. Baker is “looking at every one of the properties with a different viewpoint,” says Walter Loeb, a former member of HBC's board of directors and a consultant at Loeb Associates in New York. “He has new ideas. He doesn't want to keep Hudson's Bay in its present form.” Nevertheless, “this team has taken over a not particularly healthy business,” says Marvin Traub, a former executive at Bloomingdale's who runs consultancy Marvin Traub Associates in New York. “They know and understand the challenges. It will take some time to fix them.” What Mr. Baker looks for in retailers is faded brands that have the potential to be revived. Early this year, NRDC acquired Fortunoff, an insolvent jewellery and home décor chain. The synergies among NRDC's various retailers are tremendous, says Gilbert Harrison, chairman of New York investment bank Financo Inc., which advises Mr. Baker. So is the value of the real estate. At HBC, it is estimated to be worth $1.2-billion, according to industry insiders. That's just a little more than the equivalent purchase price of the retailer itself. Lord & Taylor's real estate was valued at $1.7-billion (U.S.) when Mr. Baker acquired the company in 2006 – about $500-million more than he bought it for. “Initially I thought, good luck,” says Mr. Gilbert. “He's bought this in one of the most difficult retail environments that we've seen for 20 or 30 years. … “But he's protected his downside because the basic real estate values of Lord & Taylor and, now Hudson's Bay, certainly help prevent tragedy.” Mr. Baker likes to tell the story of buying Lord & Taylor for its real estate, and then on the way to signing the deal noticed how well the stores were performing. Like most other U.S. retailers, Lord & Taylor has seen business slow down recently. But its transformation to appeal to the well heeled had begun even before Mr. Baker arrived. It had dropped an array of tired brands, such as Tommy Hilfiger and Nautica, and picked up trendier labels, among them Coach and Tracy Reese. Mr. Baker encouraged the strategy of expanding and upgrading higher margin designer handbags and footwear. Ditto for denim wear and funky styles in the women's “contemporary” section under hot labels such as Free People and Diesel. “My job is to understand that we need to get the best brands in the store.” But he also saw the opportunity to bolster margins by stocking affordable lines in the form of CDS brands, with a focus now on Black Brown 1826 men's wear line. “I thought there was a void in the market for exactly the kind of clothes that my friends and I wear, at a right price. Why should we pay $150 for a dress shirt?” he asks, holding up one for $69. Now Mr. Baker wants to borrow a leaf from the Lord & Taylor playbook for HBC. He wants to introduce better quality products with higher margins, and plans to add his design studio merchandise to the stores early next year. Besides the details, he sees a whole new concept for the big Bay department stores. It would entail shrinking the Bay, possibly introducing Lord & Taylor within the stores, and adding Zellers in the basement and Fortunoff jewellery departments upstairs, with office space at the top. Lord & Taylor would serve to fill a gap in the retail landscape between the Bay and carriage trade Holt Renfrew, he says. For discounter Zellers, he seems to take inspiration from Target Corp., the fashionable U.S. discounter, by putting more focus on branded apparel. But he's not averse to selling parts of the business, or real estate, if the right offer came along either. “We're always available to sell things at the right price, or buy things at the right price.”
  2. very depressing. http://www.ft.com/intl/cms/s/0/69d8aefa-95a7-11e4-a390-00144feabdc0.html#axzz3RFvv7YUu The Fast Lane: A premier city now second among equals Tyler BruleTyler Brûlé Montreal was Canada’s leading lady. The view last Saturday couldn’t have been more different S econd cities are always curious affairs. Often chippy, occasionally unassuming and always striving to be that little bit more distinct, quirky or boisterous than the comfy cousin who holds premier status on the international stage. Melbourne likes to trade on its Europeaness, seasons and liveability compared with Sydney’s beaches and overused Opera House. Residents of Osaka are loud and good-humoured, while Tokyoites are seen as too precious and concerned with protocol. Mancunians need to remind you of their industrial glory days, football teams and increasingly well-connected airport versus the gridlock of London. Second cities that used to hold the number one position are even stranger, particularly when their fall has been largely of their own making. Last weekend I returned to Montreal for the first time in about four years and the drive from the airport to downtown was a bittersweet journey along a route that used to dazzle in the early 1970s. Back then, the low-slung offices and factories lining the highway into the city carried the names of global brands and Canada’s industrial powerhouses. Downtown, skyscrapers and buildings from the turn of the 20th century carried the brass plaques of important banks and insurance companies. Montreal was Canada’s leading lady, the young nation’s port of first impressions. It had hosted a World Expo in 1967 and was about to run up a shameful debt in the form of the 1976 Summer Olympics. The view last Saturday couldn’t have been more different. Rather than the familiar logos, the words that dominated every other façade, in a variety of pleading fonts, was “à louer” (to rent), and these signs stretched from the perimeter fence of the airport all the way to the buildings around my hotel on the once elegant Sherbrooke Street. A plague of rental and for sale signs is generally a good indicator that things are not going quite to plan, whereas a skyline dotted with cranes and scaffolding (in Canada’s case, Toronto), suggests the opposite. Derelict office buildings and boarded-up restaurants aside, many would argue it’s all gone to plan, and Montreal has become a shining light of diversity and French culture in an otherwise Anglo continent. Businesses must answer the phone in French first; multinationals must spend tens of millions reimagining their brands in order not to fall foul of the province’s language police (Starbucks Coffee must have the prefix Café, should people miss what it does. This isn’t the case even in France); and then there are all the other quirky laws that ensure the province of Quebec maintains its special status at vast expense while its infrastructure is crumbling. When Quebec passed its radical language laws in the 1970s and hundreds of thousands of long-time residents headed for the Ontario border, there were many who thought this heavy-handed attempt at language preservation wouldn’t last. Yet Canada’s number two city continues to suffer a serious brain-drain, and even young francophones are becoming vocal about the province’s outmoded world view. For the moment Montreal remains an interesting place because a depressed economy allows creativity to flourish (think Berlin) as low rents mean it’s easier to try out a new retail concept or launch a restaurant. Having done two tours of duty in Montreal (1972-77 and 1980-83), I enjoyed the positive friction that came from Anglo-French sparring and the cosmopolitan flavour it cast over the city. More than 30 years later, the whole concept of language “rules” in an increasingly mobile world is simply unproductive. A recent piece in a Montreal daily politely argued that the city’s problems were related to manufacturing moving overseas and poorly integrated logistics while failing to even aim a dart at the elephant in the room. Multilingualism is a fine concept but it should not be imposed upon long-time residents, new arrivals or businesses seeking to invest — particularly when in Canada there’s another, more widely spoken language.
  3. (Courtesy of The Globe and Mail) I have a feeling many women will be happy with this news.
  4. Le fabricant de jouets montréalais est confiant d'obtenir gain de cause devant un tribunal européen dans une affaire de brevet de blocs de construction. Pour en lire plus...
  5. The food court king He's conquered the malls — now Stanley Ma is ready to take on the Street. By Joanna Pachner It's 12:45 p.m. on a weekday in May at the Place Vertu food court, and the only counter with a lineup is Thai Express. The 1970s–era shopping centre in Montreal's Saint–Laurent suburb has seen better days but, in at least one way, it's cutting–edge: unbeknownst to the diners, this food court serves as a laboratory for MTY Food Group, where it develops and perfects its new fast–food concepts. The company, whose office is located kitty–corner to the mall, currently has eight banners here, and the landlord allows it to test new formats when a location opens up. MTY's most recent introductions—Tandori, Kim Chi Korean Delight and Vie&Nam—were all fine–tuned at Place Vertu. With 21 different dining options, the food court, like those in most other large malls, resembles an international food bazaar, a huge change from what peckish shoppers would have found a few decades ago. "When I started 30 years ago, you'd have Chinese, Italian, a burger place and maybe one more, and that'd be it," says Stanley Ma, MTY's founder and chief executive. "Now you walk in and say, 'Wow! I have $20. What am I going to have today?'" No one has been more responsible for this transformation than Ma. The Hong Kong immigrant has developed, licensed or acquired 26 brands of quick–service fare—from Mexican to Japanese, from doughnut to health nut—and he's busy expanding his smorgasbord. Already the most diversified food franchisor in the country, MTY has quickened its pace of growth in the past three years, during which it almost doubled its number of outlets. Last year's surprising acquisition of Country Style Food Services Holdings, Ontario's second–largest coffee chain, boosted MTY's store count by nearly 50%, and the most recent addition—Quebec hot–dogs–and–fries specialist Groupe Valentine, a deal that closed earlier this month—has brought the total to more than 1,700 restaurants that ring in about US$400 million in annual sales. The company bought three chains in 2009 alone, and launched four internally developed banners within the past two years. It's not just the growth that's impressing industry observers but the company's consistently strong performance. MTY's most recent quarterly results widely beat market expectations. "It's an extremely well–run business," says Leon Aghazarian, a consumer products analyst with Industrial Alliance Securities in Montreal. "Stanley is very experienced. The strength lies there." Yet while Ma has made no secret of his acquisitive hunger, he's a growth–focused entrepreneur with a deeply conservative streak. He eschews debt. He only buys profitable players with clear synergies for MTY. And he's wary of easy money. When restaurant franchisors converted en masse to income trusts a decade ago, he resisted calls to follow suit. Now, with trusts set to lose their preferential tax treatment next year, the sector is scrambling for alternatives and "I look like a genius," says Ma with a chortle. More important, his rivals' predicament positions MTY, long an industry consolidator, to take advantage of those who'd rather sell than face the cost of another conversion. A middle–aged man with a formal manner occasionally lightened by corny jokes, Ma isn't rushing into any hasty unions. Known as a very private individual who says no to suitors much more than he says yes, he seems to prefer to fly under the market's radar. Few people outside the industry have heard of him or his company, and investor interest remains muted despite the rapid proliferation of MTY banners. A teenage immigrant from Hong Kong (his English remains heavily accented and he doesn't speak French), Ma opened his first venue, a Chinese and Polynesian restaurant, in 1979, at the age of 29. Within a few years, however, he switched to fast–food franchising—then a novel business model in Canada—seeing an opportunity in supplying immigrants like himself with a chance to run their own operations. Food courts presented ideal locations for new brands with little name recognition, since consumers tend to choose where they take their trays based on gustatory whim rather than brand loyalty. As such, there is little need for marketing beyond mouth–watering menu boards and frequently changing specials. And, as Ma added new banners to his original Chinese chain Tiki Ming, he was able to leverage his landlord relationships. "He would typically own the lease, so if one brand didn't work out, he could put in another," says Brian Pow, vice–president of research at Acumen Capital Finance Partners in Calgary and a longtime MTY watcher. Ma's dominance of shopping malls and cinemas bestowed on him the moniker "king of food courts." Ma's early ambition was to be able to drive from Montreal to Quebec City and stop every hour at one of his outlets. While most Canadian restaurant companies have either a single brand (like A&W or Pizza Pizza) or a handful they oversee as a master franchisee (Priszm Income Fund, for example, is the Canadian parent to KFC, Taco Bell and Pizza Hut), MTY's multiplying offerings allowed it to match the cuisine to each location and demographic. Ma has tended to look for master franchisees with strong financial know–how and expansionist ambitions. MTY simply collects royalties, with little need for capital investment, says Aghazarian. "The business is a cash cow. There is almost no risk associated with it." This low–risk philosophy is how MTY ended up in the Middle East, of all places. In the mid–2000s, the company was approached by a restaurant operator serving the Arab Emirates who was looking to franchise three of its banners. The relationship has since grown to encompass seven brands and several nearby countries, but MTY is protected: it doesn't sign the leases and has no liability exposure. "Even if it flops, it won't damage MTY's image here," says Aghazarian. Nevertheless, the region is on track to account for 5% of MTY's stores by year–end. So when, in April of 2009, MTY bought Country Style, observers found the deal uncharacteristically rife with pitfalls—an also–ran brand in a highly competitive market. It was also an unusually large acquisition for MTY. Still, the chain had been sprucing up its stores since it emerged from bankruptcy protection seven years earlier, adopting a format similar to market leader Tim Hortons. For MTY, which ran Yogen Früz and Cultures banners in Ontario but was largely clustered in Quebec, Country Style represented a quick surge within Canada's biggest province. Ma also saw co–branding opportunities, and within months of purchase, he started teaming more than a dozen Country Styles with his TCBY yogurt chain. Other pairings will follow. He points out that in a 3,000–square–foot store, Country Style can do $600,000 per year in revenue and, say, Thai Express another $750,000, thus raking in $1.3 million from a single venue. The approach fits MTY's operating philosophy: "The returns are good, the investment small," says Ma. Ma's long been interested in the coffee sector. "Coffee is a good business," he says, tenting his fingers thoughtfully. "The profit margins are very good, and it will help MTY's other brands because of the buying power of the coffee bean." MTY had looked at Country Style several years earlier but walked away. Ma won't specify the reasons—"I don't want to hurt the feelings of other people we dealt with," he says in his typically courtly manner—but it came down to sticker shock. By 2009, Country Style's revamp was further along and MTY had greater financial means, says Ma. "I also felt comfortable with the Country Style management." (Rick Martens, who has run the chain since it emerged from bankruptcy protection, remains at the helm.) Since the takeover, MTY's operating expertise has proven useful. Observers say that Ma has trimmed slack in distribution and at the head office. Ma simply observes: "If you're a hockey player and become a coach, you know it makes sense to do it this way because you know what it's like." Acumen's Pow, however, questions whether the Country Style game plan has played out as smoothly as Ma claims. "It's been a big challenge for Country Style to cater to a different audience with a different product mix," he says. "And Stanley's idea that he could bring in other brands, I don't think it's been as successful as he'd hoped. [The transition] has been longer and slower than expected." Ma has grown accustomed by now to strategic second–guessing. The pressure was at its height back in the early 2000s, when numerous financiers were banging the drum for him to convert to a royalty trust, in which cash distributions are set as a percentage of top–line revenue. "When we trade over $2, they say, 'You're ready [to convert],'" recalls Ma. "When we trade over $5, they say, 'I guarantee, Stanley, if you convert, you'll go to $8.' Then they say, 'Stanley, if you don't go to income trust, don't come to see me anymore.'" Ma clearly relishes having been proven right, though he had no inkling about Ottawa's tax treatment flip–flop. His motivation was simply to use his cash to grow the company without taking on debt. When he was first urged to make MTY a trust, he had fewer than 200 stores. "I thought they were pushing MTY to run too fast," he says. One of MTY's strengths is its willingness and ability to respond to consumers' changing tastes. Of the 26 brands MTY controls today, 10 were developed in–house to exploit new trends. The past few years have been all about Asian food, says Ma—Korean, Indian, Vietnamese. Thai Express became MTY's most successful brand after Ma bought the small chain in 2004 and merged it with his nascent Pad Thai. Meanwhile, pizza and Italian food more broadly are in decline. But for all that ethnic variety, the single best–selling fast–food item remains french fries. And that happens to be the strong suit of Groupe Valentine, a 95–store, family–run chain based in small–town Saint–Hyacinthe east of Montreal. Valentine mainly serves rural and suburban markets—areas where MTY has little presence and wants more. And though MTY has a competing banner in the 20–store Franx Supreme, Franx has been a performance laggard. According to MTY spokesman Jean–Francois Dubé, Franx will likely be merged with Valentine, and then under the Valentine name will venture into Ontario, where Franx has one location and Valentine has none. Ma is eager to keep growing his Ontario business where, thanks to the Country Style purchase, MTY now has 41% of its stores—more than in Quebec. He gained a foothold out west, meanwhile, with the 2008 purchase of Canadian rights to American banner Taco Time. However, he has no plan to head across the border, despite another chorus of investment bankers pushing him on. "I believe the States is a dangerous place for retailers," says Ma. "It's a different animal, has different rules, mentality." Canada still has lots of room for MTY, he argues. Instead, he wants to reach 2,000 locations before he considers an American expansion. Besides, Ma may get tasty opportunities amid the income trust shakeout. Ottawa's move to phase out trusts depressed many restaurant operators' shares, as investors assumed no other structure would be as lucrative and the roughly half–a–million cost of conversion to a corporation would cut into profits. Most food franchisors, like MTY, rely on royalty fees paid by franchisees and so lack assets they can depreciate to offset taxes. "These structures are not viable post–tax," wrote Turan Quettawala, a Scotia Capital analyst, in a 2009 report. Nevertheless, some—including Pizza Pizza, Boston Pizza and A&W—have opted to remain trusts for now. Prime Restaurant Royalty Income Fund (owner of East Side Mario's and Casey's, among others) and Imvescor Restaurant Group Inc. (Pizza Delight, Baton Rouge), meanwhile, have chosen to convert to corporations. So far, there haven't been many deals. Private equity, which prefers operating control, has shown little interest. Will MTY make a move? "There's definite potential for them to move in on one of the pizza guys," says Aghazarian, and Priszm is rumoured to be looking for a buyer. Ma says he's holding numerous talks—mainly with those pesky investment bankers looking to arrange a marriage from which they can profit. But he adds, "We're not going to do a deal just to be in the newspaper for 24 hours." Meanwhile, MTY has some challenges of its own to address. Most notably, its same–store sales have been dwindling by 1% to 2% for several quarters, though the rate of decline has slowed and the fast–food market is improving. "If they're only acquisition–driven, that's dangerous," says Aghazarian. Acumen's Pow is more concerned with Ma's poor job of exploiting public markets. In May, MTY moved from the TSX Venture Exchange to the main board, but "[stanley] doesn't really market his stock," says Pow. "There are days I ask why he hasn't gone private. Since he went public, he did only one [equity] raise." It merits noting that Acumen was one of the investment firms that nudged MTY toward income trusts a few years ago. Today, Pow credits Ma with managing to finance his business while resisting the pressures of the market's expectations. But, he says, "Stanley has to ask himself, What's the succession plan? The more control is in the marketplace, the better you'll do in a takeout." Ma shows little interest in being taken out. His three kids all work in the business, and his ambitions keep growing—at his own conservative pace. He long ago achieved his initial goal of an MTY restaurant every hour along the Monteal–Quebec route. His next target—2,000 stores—isn't far away; by this summer, the company opened more new locations than it had projected for all of 2010. Ma's current focus lies in an area he worried little about when he started: building brand equity. While 80% of MTY's stores were once in food courts, today only about 30% are, due largely to the acquisition of Country Style, Taco Time and a few other banners that all had a heavy street presence. There, promotion matters for building destination traffic, so MTY is shifting marketing dollars from menu upgrades to billboard and bus advertising. The king of food courts, accustomed to the low–investment and low–risk climate of indoor counters, realizes that to grow to 3,000 restaurants and beyond, he needs to expand outside. "We're gaining confidence that, yes, we can handle the street, that brand power is there now," says Ma. "Customers know what to expect from Thai Express, like they know what to expect from McDonald's." The reclusive immigrant is ready for some spotlight. "I want [my brands] to be like the big boys, recognition–wise," says Ma. "Hopefully, one day someone travels to Dubai and says, 'Oh, Thai Express! I know it.'" http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20101011_10022_10022&page=1
  6. Le Tribunal de première instance des Communautés européennes a rejeté mercredi les efforts faits par Lego afin de préserver la marque de commerce de son jeu de construction. Pour en lire plus...
  7. Trève de problème linguistique. Voici une bonne nouvelle pour Montréal, et pour 2 raisons. Premièrement les patrons (proprio) sont de chez nous et segundo, les emplois autrefois envoyé en Chine sont maintenant rapatrié à Montréal. C'est excellent.
  8. Le fabricant de jouets montréalais annonce une perte nette de 97,1 millions de dollars américains. Recul des ventes, hausse des coûts et rappels de jouets ont généré ce mauvais résultat. Pour en lire plus...
  9. Le fabricant de jouets n'a pas fini d'enregistrer des pertes en raison de l'acquisition de Rose Art, déclarant un déficit de 122 M$ ou 3,34 $ US par action au troisième trimestre. Pour en lire plus...
  10. Le fabricant de jouets obtient du financement pour ses activités et si Fairfax Financial Holdings convertit ses débentures, elle détiendra 35,4% des actions de Mega Brands. Pour en lire plus...
  11. Mega Brands s'en remet au magnétisme pour attirer de nouveau les investisseurs. En lançant cet été sa gamme de jouets de construction aimantés Magnext, Mega Brands veut faire oublier sa gamme précédente Magnetix. Pour en lire plus...
  12. Fait inusité dans le monde des affaires: Victor Bertrand a présenté vendredi ses excuses pour les piètres résultats de l'exercice 2007. Pour en lire plus...
  13. May 20, 2008 Lodging Econometrics Reports Canadian Construction Pipeline At a High in Q1 2008 with 265 Projects/33,964 Guestrooms The Pipeline Has Now Begun to Unfold in Earnest USA – Lodging Econometrics (LE), the Global Authority for Hotel Real Estate, announced that Canada’s Construction Pipeline totaled 265 projects and 33,964 guestrooms at the end of Q1 2008, a high for the cycle. Hotel construction in Canada has been solid. The total number of guestrooms in the Pipeline grew for an eighth consecutive quarter, and is up 14.2% year-over-year. All projects included in the LE Pipeline have dedicated land parcels, are being actively pursued by developers and have been verified by the brands. The total Pipeline appears to have reached its peak, as project and room counts have held steady for the past three quarters. Those to Start Construction in the Next 12 Months, 93 projects/11,649 rooms, and those in Early Planning, 83 projects/9,975 rooms, are at highs for the cycle. Meanwhile, the totals for Under Construction, 89 projects/12,340 rooms, are down from the cyclical peak established in Q2 2007.” Several Factors Have Developers Becoming Cautious Certain dynamics have aligned to cause developer caution. The Bank of Canada instituted three consecutive decreases to its key interest rate since December 2007, down a quarter-point in both December and January, then a further half-point in February, indicating concern about a slowing in the economy. Hotel operating statistics were strong in 2006 and 2007, however, a continued decline in visitors from the United States due to the low US Dollar, higher gasoline costs and reductions in discretionary spending, along with indications that domestic travel is apt to decline as well, mean that guestroom demand is likely to soften moving forward. With these emerging concerns, it appears that hotel developers are taking a cautious approach for the moment. The number of New Projects announced into the Pipeline, 15 projects/2,038 rooms in Q1 2008, represents a 58.3% decrease from Q4 2007 for both projects and rooms. It is the smallest count seen in over three years. Construction Starts for Q1 2008 totaled just 9 projects/1,329 guestrooms. Although first quarter Construction Starts are historically slower than the rest of the year, the counts for Q1 2008 are at a very low level. Projects already in the Pipeline are proceeding at a sluggish pace, with projects backlogged in the Scheduled Starts and Early Planning stages, suggesting that developers are more conservative and taking a wait-and-see approach. LE’s Forecast for New Hotel Openings LE’s Forecast for New Hotel Openings estimates that 82 projects having 9,554 rooms will come online in 2008, while 88 projects/10,807 rooms are slated for 2009, with 12,340 rooms already Under Construction. This represents a gross growth rate of 3.5% and 3.8%, respectively, before any guestrooms are removed from inventory. Net New Supply grew 2.0% in 2006 and 1.9% in 2007. Currently, The Pipeline, growing throughout the decade, is beginning to unfold just as demand is modestly starting to soften. Development is Concentrated in Key Markets Of the 33,964 rooms in the total Pipeline, only 16% of those rooms are full-service, with 57% in the select or limited service segments. Another 27% is currently designated as Independent. Approximately 70% of those rooms in the Independent segment will choose a brand prior to opening, mostly in the select and limited service category. The bulk of hotel development is in the Central and Western regions. Ontario leads the Central provinces in terms of pipeline counts, with 94 projects/14,072 rooms, while Quebec has 25 projects/3,800 rooms. In the Western Region, Alberta, with 61 projects/6,457 rooms, and British Columbia, with 44 projects/5,430 rooms, have the largest provincial pipelines. Ten markets have the significant share of the Pipeline. In these markets, there are 123 projects/18,902 rooms, or 56% of the total Pipeline. In Ontario, Toronto leads with 34 projects/5,946 rooms, with Niagara Falls second at 13 projects/3,013 rooms. In Quebec, Montreal’s pipeline stands at 11 projects/1,786 rooms. For the Western Region, Vancouver, at 19 projects/2,628 rooms, Edmonton, at 13 projects/1,526 rooms, and Calgary, at 10 projects/1,486 rooms have the largest pipelines. All other markets have six or fewer projects. Global Brands Lead the Way Global brands currently make up 72% of projects within the total Pipeline. InterContinental leads with 55 projects/5,626 rooms, with 40 Holiday Inn Express’ and 9 Holiday Inns. Marriott International has 28 projects/4,115 rooms under development, 15 of which are Residence Inn and Fairfield Inn properties. Hilton Hotels follows, with 24 projects/3,701 rooms, then Starwood Hotels & Resorts with 15 projects/3,021 rooms. Super 8 accounts for 31 projects/2,184 rooms of Wyndham Worldwide’s total pipeline, most of which are being developed by master franchisor, Superior Lodging Corporation. It’s a Time of Transition After rapid growth mid-decade, the Construction Pipeline may be at its cyclical peak. The economy appears to be moderating and lodging demand slowing, yet New Openings flowing from the Pipeline will be accelerating throughout 2008 and 2009. Developers have sensed the economic transition and turned cautious, as both New Project Announcements and movement within the Pipeline are slowing. It’s early in the transition. More time will be required to assess trends for the near term. :thumbsup: :thumbsup: This info comes from http://www.lodgingintelligence.com/2008/Canada%201Q08/1Q08CanIndustry.htm