Weingarten president and CEO Drew Alexander discusses how his brands are faring amid the fiscal cliff and where his company is headed.Excerpt:
Jim Cramer: One of the things I loved about your presentation and also your conference calls…you’re willing to face head on the challenge of Amazon. You directly, you’re the first real estate investor…listen, here’s the ones the Internet can’t get. You recognize that the threat is a real one.
Drew Alexander: I think it’s a real threat. I think we were very conservative in how we came up with our number that we think that some merchants can be affected somewhat on the margin. But, then again, the vast majority of what we sell, the prices of it are too cheap for it to be delivered for free forever. It’s a lot more efficient to go to the supermarket a mile or so away versus that last mile of delivery. So something that’s very expensive that a store makes a big gross margin on, they could possibly give away the delivery. But most of what our tenants sell you can’t – plus the haircutters, the restaurants, you know, you can’t, so…
Jim: Oh, I like your business.
Drew: So the bricks and clicks model – I was just at a big convention at the Hilton, in the city –and there’s no question, the bricks and clicks model is what will happen. Retailers will provide an Internet alternative: they’ll let you pick it up in the store; they’ll let it be shipped; they’ll have other sizes; they’ll move it from store to store. And that’s the model, all the retailers are talking about the Internet is driving their business, [is] good research. It’s a compliment. It’ll affect a little bit. But good retail, dense populations, very good risk adjusted [investment].
Jim: The formula has worked for years, it’ll continue to work. This is the kind of stock you can ride through a fiscal cliff with. Thank you to Drew Alexander, President and CEO of Weingarten Realty Investors, WRI. I have followed it for years, it’s one of the best! WRI, take a look at it.