Lowe’s May Gain as Stir-Crazy Irene Victims Crowd Starbucks
Home-improvement stores selling emergency supplies and coffee shops providing a break from the cleanup may benefit from Hurricane Irene, while department stores shut because of flooding likely lost sales.
The storm may have reduced apparel retailers’ comparable- store sales by 0.5 percent or less for the month as consumers stayed home during the critical back-to-school shopping season, Jennifer Davis, an analyst at Lazard Capital Markets, said today in an e-mail. Grocery stores, drug stores and big-box retailers likely benefited, she said.
Lowe’s Cos. shipped more than 1,000 extra truckloads of flashlights, batteries and generators to East Coast stores, said Katie Cody, a company spokeswoman. The Mooresville, North Carolina-based company activated its natural-disaster price suspension plan and didn’t raise the cost of emergency goods in affected areas, Cody said.
“It was absolutely a crazy time,” Cody said in a telephone interview. Six Lowe’s stores were closed in New Jersey, New York and North Carolina during the weekend, and the Hackettstown, New Jersey, location remains shut today, she said.
Irene killed at least 18 people and caused an estimated $3 billion in damage as it swept from the Caribbean to New England. The storm cut power to more than 6 million homes and businesses along the U.S. East Coast. New York’s subway was shut during the weekend while flooding and debris affected commuter rail routes into the city.
Home Depot Inc. (HD) shipped more than 1,000 truckloads of extra supplies, said Stephen Holmes, a spokesman. The Atlanta-based company is seeing a rush in demand for chainsaws, cleaning supplies and vacuums as people try to repair damage from the storm, he said today in a telephone interview.
“We’ve begun moving into recovery and clean-up products,” Holmes said.
More than 30 stores along the East Coast were closed yesterday, Holmes said. As of this morning, all but five had opened. Many employees are being shuttled to harder-hit areas to assist with the extra business, Holmes said.
The Starbucks Corp. (SBUX) cafe in Groton, Connecticut, had lines running out of its doors today and is getting about twice as many customers as usual after being without power from the night of Aug. 27 through midday yesterday, said Jeremiah Vigue, the shop’s manager.
“They’re getting stir-crazy and are just wanting to get something hot,” Vigue, 27, said today in a telephone interview.
The “vast majority” of Seattle-based Starbucks’ stores on the East Coast are open, and few sustained damaged, while some remain closed because of power outages, said Alan Hilowitz, a company spokesman, adding that he was unable to provide exact numbers.
“We are trying to get open as quickly as we can, knowing that people do use Starbucks as a gathering place and for Wi- Fi,” Hilowitz said.
The Dunkin’ Donuts location in Pawcatuck, Connecticut, is seeing about 10 percent to 20 percent more business than usual, said Bruce Thomas, the store’s director of operations.
“People don’t have electricity, don’t have food, don’t have coffee,” Thomas said today in an interview. “People are just happy to go some place that has electricity and to go somewhere that has food.”
He said the store was open all weekend.
“Very few restaurants suffered damage,” Michelle King, a spokeswoman for Canton, Massachusetts-based Dunkin’ Brands Group Inc., said in an e-mail. “Any closures were due largely to power outages, and that is rapidly being restored. The majority of our restaurants are open.”
Papa John’s International Inc. (PZZA), which closed about 200 of its East Coast restaurants at the peak of the storm, had about 50 that were restarting operations today as power came back on, Christopher Sternberg, a company spokesman, said in an interview. The company has about 3,000 U.S. locations.
Sales and deliveries were up during the weekend, Sternberg said, while declining to specify how much.
“People at home glued to the TV set watching coverage of the storm and themselves not wanting to get out -- they rely on our drivers to bring them a hot meal,” he said.
Tiffany & Co. (TIF)’s flagship store on New York’s Fifth Avenue was closed the past two days because the subway shutdown made travel difficult for employees, said Mark Aaron, a spokesman. All of the New York-based jeweler’s New York and Northeast stores were closed yesterday and are reopening today, he said.
Effect on Sales
The closings will affect the company’s sales, he said, adding that he couldn’t estimate the amount today. Other purchases, such as engagement rings, will simply be delayed, he said.
Saks Inc. (SKS) closed seven stores in New York, New Jersey, Connecticut, Massachusetts and Virginia, in the wake of Irene, said Julia Bentley, a spokeswoman. The company planned to reopen its New York headquarters office at 10 a.m. today and is running its store in Chevy Chase, Maryland, on backup generators, she said today in an e-mail.
The company is in the process of determining the impact on sales and won’t discuss that until Sept. 1, she said. The company didn’t sustain any material property damage, she said.
Macy’s Inc. (M), the owner of its namesake and Bloomingdale’s chains, said yesterday that three stores around Wayne, New Jersey, would remain closed today because of flooding.
Clothing Sales Hurt
“Any store selling non-necessities such as clothing was hurt this weekend,” Ellen Davis, vice president of the Washington-based National Retail Federation, said today in an interview. “With bad weather, people aren’t going to be coming out and buying back-to-school stuff.”
Marcelino Alamar, 29, of Valencia, Spain, was one of about 200 people waiting outside the Apple Inc. (AAPL) store on New York’s Fifth Avenue. The store closed Aug. 27, and he had come twice since then to see if it opened. He is supposed to fly home today.
“I had to get here before I leave,” he said, while carrying an iPad purchased for a friend.
Alamar said he spent much less money than he planned to because of Irene, which he described as overblown. While walking around Times Square yesterday, the only shops open were small electronics stores and the Hard Rock Cafe, which had more than an hour wait, he said.
Caesars Entertainment Corp., the world’s biggest casino company and Atlantic City’s biggest owner with four resorts, lost about $6 million to $8 million in cash flow from $25 million in revenue it would have expected at its New Jersey shore and Philadelphia properties, Chief Executive Officer Gary Loveman told CNBC today.
The Applebee’s restaurant in New York’s Times Square operated uninterrupted throughout the weekend by putting its staff in nearby hotel rooms, said Keith Hancock, the location’s manager.
Business “was better-than-expected considering the conditions,” he said today in an interview. Applebee’s is owned by Glendale, California-based DineEquity Inc. (DIN)
“It’s New York, it’s tourists, they are going to go out,” Hancock said. “Plus, so many flights were canceled that they were looking for things to do.”
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