New York Shops Remain Closed as Retailers Assess Damage
Retailers from Walgreen Co. (WAG) to Macy’s Inc. (M) kept stores shuttered in hard-hit New York and New Jersey while reopening some other East Coast locations as they worked to assess the damage to their shops and sales.
While food merchants will benefit from consumers stocking up before the storm and home-improvement retailers will gain from the clean-up, clothing and department stores won’t get a chance to make up the loss, Poonam Goyal, an analyst for Bloomberg Industries in Princeton, New Jersey, said today. The hit may even affect sales during the crucial holiday shopping season, she said.
“The wild card here is when will stores reopen,” Goyal said in a telephone interview today. “If stores will not reopen for the next two or three weeks, it’s going to impact holiday sales.”
Sandy, spanning 900 miles, slammed into southern New Jersey at about 8 p.m. New York time and brought a record storm surge of 13.88 feet (4.2 meters) into Manhattan’s Battery Park. Flooding, high winds and fallen trees cut power to about 8 million customers from South Carolina to Maine, and travelers were stranded as U.S. airlines grounded about 12,500 flights. U.S. stock trading is closed again today in the first back-to-back shutdown for weather since 1888.
Record tides from the storm combined with hours of pounding wind and rain to flood electrical substations and shut down New York’s financial district. Yesterday, Eqecat Inc., an Oakland, California-based provider of catastrophic risk models, estimated Sandy would cause as much as $20 billion of economic damage with about $5 billion to $10 billion of that in insured losses.
Wal-Mart Stores Inc. (WMT) now has about 80 of its namesake and Sam’s Club locations closed, according to the company’s website.
Company officials have received no reports of significant damage to facilities, and merchandise losses were minimal, Mark Cooper, senior director of global emergency management for the retailer, said on a conference call. Stores will reopen as roads are cleared and power returns or generators are put into use, he said.
“Trucks are loaded and ready to go as soon as stores come open,” he said.
Costco Wholesale Corp. (COST) has about 15 stores still closed in New York and New Jersey because of power outages, Jeff Long, Costco’s senior vice president for the Northeast, said in an interview. While stores in the Northeast sold out of water, generators, batteries and flashlights last weekend, traffic in open stores recently is less than the company normally expects, he said.
“I haven’t seen anything like this,” Long said. “It’s easily the biggest storm I’ve ever seen.”
Target Corp. (TGT) has reopened most of its stores, with 20 locations in the New York and New Jersey areas still closed, Jessica Deede, a spokeswoman, said in an e-mail. About 41 stores are operating on generator power, she said.
The company’s stores have begun donating basic items such as pillows and cribs to their local areas and has provided bottled water to the Red Cross, she said.
Home Depot Inc. (HD), the largest U.S. home-improvement retailer, began shipping 750 truckloads of generators, cleaning supplies, rakes and chainsaws to northeastern stores today, said Aaron Flowe, president of the Atlanta-based company’s northern division. It has reopened all but about 12 of the 44 stores it closed as Sandy approached, he said.
Home Depot stores suffered “very little damage” characterized by leaking roofs and broken door glass “that we can quickly fix,” Flowe said.
Lowe’s Cos. (LOW), which had 200 locations in the affected area, has four stores closed, the company said today in an e-mailed statement. A store in Rosedale, New York, was damaged by water while the other closed stores, which are in New Jersey and Pennsylvania, are shut because of power outages.
Macy’s stores and offices in New York City and in central and northern New Jersey remain closed, said Jim Sluzewski, a spokesman. Stores in the Washington area and other parts of the East Coast have begun reopening today, he said.
“The determining factor is if the store and shopping center have electricity, and if associates are able to get to work,” Sluzewski said in an e-mail. The retailer had closed 130 Macy’s and Bloomingdale’s stores all day yesterday and closed an additional 65 stores early, he said.
The company has no reports of significant damage or injuries to workers, Sluzewski said. It is impossible to estimate lost sales at this point, he said.
Macy’s, based in Cincinnati, has more than 800 U.S. stores.
Saks Inc.’s main store in Manhattan as well as stores in New Jersey, Connecticut and on New York’s Long Island will reopen tomorrow, said Julia Bentley, a spokeswoman. The retailer, whose head offices in New York still are closed, will begin assessing damage today, she said. The company planned to reopen stores in the Washington area and in Pennsylvania starting late this morning.
Macy’s and Saks are among the retailers most likely to be hurt by Sandy, data compiled by Bloomberg Industries show. Macy’s has about 30 percent of its stores located in the storm states, and Saks has about 27 percent of its locations there. The retailers reported a 150 basis-point hit to August comparable-store sales last year because of Hurricane Irene.
Nordstrom Inc. (JWN), the Seattle-based chain of more than 100 department stores, had 15 stores still closed today with many others opening late, partly because mass transit disruptions prevented some employees from getting to work, said Tara Darrow, a spokeswoman. Stores had minor water damage, and the company hasn’t yet estimated the effect on sales, she said.
People are now spending on needs, which may alter their shopping plans for the rest of the year and reduce the 4.1 percent growth the National Retail Federation forecast for the holiday season, Scott Bernhardt, president of Planalytics Inc. in Wayne, Pennsylvania, said today in an e-mail.
“Significant spending now, this week is likely going to cause many consumers to revisit their holiday shopping budgets,” he said.
Gap Inc. (GPS) continues to monitor its stores in the Northeast that were closed due to the hurricane, Edie Kissko, a spokeswoman for the San Francisco-based company, said yesterday in an e-mail.
“Gap Inc. has been taking several precautions, including implementing an emergency protocol to help ensure all employees are accounted for and safe during this natural disaster,” she wrote yesterday.
American Eagle Outfitters Inc. (AEO), which closed 64 stores yesterday, is reopening some locations as power is restored, “but our employees’ safety and well-being is our number one concern at this point and so we are focused on making sure everyone is accounted for and safe,” Iris Yen, a spokeswoman for the Pittsburgh-based company, said in an e-mail.
Limited Brands Inc., which owns the Victoria’s Secret and Bath & Body Works chains, reopened some of its stores today at 1 p.m., Tammy Roberts Myers, a spokeswoman, said in an e-mail. The Columbus, Ohio-based company closed about 160 stores yesterday.
Apparel companies will face most of Hurricane Sandy’s impact in November sales because October results will only go up until Oct. 27, Jennifer Davis, an analyst with Lazard Capital Markets in New York, said in a telephone interview. The hit also won’t be significant because the storm struck on a Monday and Tuesday, which aren’t busy shopping days, she said.
“The very beginning of November is not really important and the very end of the month is, so it’s during a small volume period during small volume days,” she said.
The bigger concern is how long stores will be closed, especially those that were damaged, she said.
J.C. Penney Co. (JCP), the 110-year-old department-store company, closed more than 100 stores by yesterday evening because of the storm, Joey Thomas, a spokesman for the Plano, Texas-based retailer, said in an e-mail. The company plans to reopen 50 stores in the next couple of days and is assessing damage.
Walgreen, which owns the Duane Reade chain, had about 530 stores closed as of noon, down from a peak of about 750, the company said today in an e-mailed statement. The company has about 1,400 stores in the affected area.
Beginning last week, Deerfield, Illinois-based Walgreen stocked shelves with extra water, batteries, flashlights and medications, the company said yesterday.
Walgreen, the largest drugstore chain in the U.S., also said it has 180 electricity generators to help power stores along the East Coast and dry ice to keep certain medicines cold. About 300 stores were without power, the company said.
The storm may benefit mass merchants’ October sales as shoppers stocked up on water and food before it hit, according to Bloomberg Industries. The effect on November sales will be determined by how long stores are closed and how much of Halloween sales were missed, according to the study.
A few Kroger Co. (KR) stores along the East Coast have closed after losing power, Carl York, the company’s head of public affairs for its Mid-Atlantic region, said in an interview. Right now, the company is working to open a store in Elkins, West Virginia, which closed after it lost power amid about a foot of snow, York said.
“We’re concentrating on West Virginia now,” he said. “There’s a lot of rain and a lot of snow and we’re worried about flooding.”
No damage has been reported at Kroger’s 122 stores in the Mid-Atlantic region, he said. Kroger, the largest U.S. grocery-store chain, is based in Cincinnati.
“We are still very busy,” York said. “We have customers that are coming in and they are buying the milk, bread, water. They’re still bracing for the weather hanging around.”
Supervalu Inc. (SVU) has started opening stores after closing all Acme and Shoppers locations yesterday, Mike Siemienas, a spokesman for the Eden Prairie, Minnesota-based company, said in an interview. The third-largest U.S. grocery chain still has 29 Acme and about 30 Save-A-Lot stores closed, while all Shaw’s, Farm Fresh and Shoppers units are open, he said.
There are Acme stores that don’t have power that are open and operating on generators, Siemienas said. The company is unable to get to some shuttered Acme markets along the Jersey Shore to evaluate possible damage, he said.
PepsiCo Inc.’s (PEP) headquarters in Purchase, New York, and some other offices in the area remained closed today. Several of the snack and beverage maker’s factories, warehouses and offices in Sandy’s path were without power and teams were assessing damages, said Aurora Gonzalez, a company spokeswoman.
“Our first priority is the safety of our employees,” Gonzalez said. “We are working to resume operations as quickly and as safely as possible.”
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