Residential Lighting: Tell us about International Market Centers LLC.
Robert Maricich: We’re the company formed to buy the assets of World Market Center, which was three different transactions. Each building was a separate LLC. Then, in High Point, we purchased what were the MMPI properties. We also have the IHFC, which is the largest building. Showplace is in receivership, and we’re aiming to close on it [in June at press time]. It brings the total to 11.5 million square feet and 18 buildings.
RL: What will this mean for Las Vegas and High Point exhibitors?
RM: In the short-term, nothing changes. Any lease that is in place will be honored. We’re going to spend the next four to five months on a deliberate integration of all the businesses into one company, and in strategic planning. The focus will be on building the most effective, efficient and compelling markets in High Point and Las Vegas. The biggest thing initially, as it relates to the exhibitors, is that we have extremely well-financed and well-capitalized ownership in place.
We’re going to have the most massive platform for buyers and sellers to come together that’s ever existed. So, we would hope that somebody that’s an exhibitor in [Las Vegas] Building C would find merit in being with us in High Point as we broaden the platform in both places and as new channels of distribution unfold. We can have incentives for being in both cities. We haven’t fleshed that out yet. But our hope is to create value by controlling more of the venues to have a better shopping experience.
RL: What exactly is your vision?
RM: Our vision is that for anybody that wants to be a national marketer of furnishings, we’ll have the most vibrant platform for putting buyers and sellers together. That’s the vision not just for buying and selling at events, but also through seminars on best practices and the interchange of ideas. There’s no more cost-effective way for buyers to see manufacturers’ new products and for manufacturers to build their brands.
RL: Anything specific for lighting?
RM: A lighting manufacturer that wants to be exposed to different channels of distribution is going to be present in our facilities because of the scale and scope of what we’re doing. If you’re narrowly focused on just the pure lighting buyer, you might be able to get that somewhere else. But if you want to sell to someone who has a lifestyle store or a furniture store, maybe an e-tailer, those are the sort of people that are going to be attracted to our bigger platform. But we’ll still be specialists in areas of our campus for lighting. It’s an important category.
RL: How stable is IMC?
RM: We have a sterling balance sheet in that there’s not a lot of leverage deployed. Yes, it’s a $1 billion endeavor, but we’ve gone in with our eyes wide open. It’s not based on a dramatic turnaround in housing. This is a long-term play. Eventually, housing will rebound, but more importantly people have not fallen out of the American love affair with the home. During this great home bubble build-up, a lot of people bought homes just to “flip” them. They did not spend money on furnishings. It was all financial, and a lot of homes were under-furnished. That dynamic is going to change. Home ownership is part of the American dream and the American fabric. The furnishings industry has doubled every decade since the 1950s up until right now. So, there’s a real fundamental growth story in people spending money on homes and in their homes.