The TMA 15th Annual Symposium - Taking The Pulse Of Canadian Industries

The Turnaround Management Association (TMA) is an international organization dedicated to corporate turnaround management. It was established in 1988 and currently has more than 9,000 members in 48 chapters throughout the world. Members include lawyers, accountants, bankers, investors and other professionals active in the distressed / turnaround space. Further information on the international organization can be found at this link: www.turnaround.org/About/Facts.aspx

The Toronto chapter of the TMA is one of the most active chapters having twice been honoured as the annual “Chapter of the Year”. The Toronto Chapter runs a full calendar of events annually including our marquee fall Newsmaker Dinners, various educational seminars throughout the year, several networking events including our annual Golf Tournament and several other social events and of course our annual Symposium.

The 2013 Symposium Background:

The 15th Annual Symposium was held on Wednesday April 17, 2013 at the Fairmont Royal York Hotel. The 2013 symposium will focus on various sectors important to the Canadian economy (retail, real estate, mining and forestry). There will also be a panel of economists discussing the global and Canadian economy as well as panel of lenders. This year’s program promises to provide an informative outlook on the challenges currently facing companies in Canada.

The Retail panel will have three panelists plus a moderator. The panel includes a retail leasing executive from Oxford Properties and is therefore familiar with what is happening with retailers. Other participants included a retail CFOwith restructuring experience and an industry expert/consultant. The moderator will be an insolvency professional from a restructuring firm in Toronto.

The panel will be conducted through a Q&A process with the moderator. The types of questions that might be addressed include:

  • What are the key challenges facing the industry today? (i.e. is it introduction of big name retailers from the US? on-line shopping growth? other factors?)
  • How critical are these challenges? How is the industry responding?
  • In your view, what do retailers today need to do and get right in order to succeed?
  • What sort of change / turmoil do you think we will see in the retail sector in the next few years?
  • As turnaround practitioners that get involved with companies in this sector that are struggling, what do we need to know and understand to work with retailers in helping them to successfully restructure?

The Panel

The TMA Retail Panel was facilitated by Allan Naikan, Partner at Farber and Associates. The panel opened with Antony Karabus, CEO, HRC Advisory, LLC providing a “State of the Nation” on the Canadian Retail Sector, describing the significant increase in the competitive intensity in the market as a direct result of the influx of US and foreign retailers, while domestic market growth has marginally grown. This has for the most part resulted in a shift of market share between players as opposed to a significant increase in the total market size.

Brad Jones, VP Retail Leasing, Oxford Properties, described how the shifting landscape of Canadian retail real estate, including new anchors, Capital expansions & strategic plans and pressure on under-performing Canadian retailers is leading landlords to make difficult decisions regarding lease renewals. Antony Karabus commented that this was putting a lot of pressure on many Canadian family-owned retailers that tended to produce sales productivity of $230-500 per square foot, which is no longer sufficient to secure profitable lease renewals upon expiration in the premier malls such as Yorkdale, Toronto Eaton Centre and Sherway Gardens.

Antony Karabus and Nick Bobrow, CFO, The Source also led a discussion about their work in the turnaround of The Source during 2005-2007, following the then acquisition by Circuit City of the former Radio Shack Canada.

Antony Karabus also led a brief discussion on the likely winners & losers both at a retail sector level and for specific retailers within retail sectors.

Antony Karabus:

In conclusion, the entry of so many foreign and US retailers at a time of minimal market size growth would mean there will be some losers. Getting a clearly-defined Customer Value Proposition is absolutely vital. Following that, the process of successfully Operationalizing the Customer Value Proposition in all customer interactions is the most important ingredient to survive and thrive.

Despite the ongoing recession and growing Canadian consumer debt levels the Canadian retail industry is thriving. Recent activity includes numerous US retailers coming into Canada, Canadian retailers expanding into the US and landlords vying for premium retail anchor tenants in their shopping malls. Where does this leave the Canadian retailer and what challenges do they face today? The panel explored the likely causes of the growth of the Canadian retail industry to date and implications for the future Canadian landscape. Experts will weigh in with perspectives from major retailers, landlords and consultants.