Retailers and fashion firms felt the wrath of Hurricane Sandy, forcing them to shut down stores Sunday and Monday across a broad geographic swath from North Carolina to New England, and to close showrooms, cancel meetings and delay shipments.
Closures are likely to continue Tuesday across many areas as the hurricane’s full impact was not expected to be felt until late evening Monday in New York City and surrounding areas. The New York Stock Exchange and Nasdaq will again be closed Tuesday, as will bond markets and all New York transit operations.
The collective impact of the storm is expected to be in the hundreds of millions of dollars in lost business alone and will be reflected in November and fourth-quarter sales reports. That does not include estimates of any damage caused by Sandy.
“Store losses for the eastern U.S. from Atlanta to Boston are probably $350 million a day, but could be as high as $500 million a day,” estimated Walter Loeb of Loeb Associates, a consulting agency. Loeb also said preliminary estimates for lost retail sales at New York City stores could exceed $30 million a day. Most stores, except for a few mom-and-pop shops and bodegas, were closed Monday because mass transit was shut down, making it impossible for employees to get to work. Tourists roamed the Manhattan streets looking for anything that was open.
While not a major fashion-buying period, the storm impacted last-minute sales of Halloween costumes and candy, particularly at mass chains and drug stores, which tend to load up on those seasonal categories, though these same stores could make up some of the slack with sales of hurricane-related cleanup products, dried foods, water, flashlights, batteries and candles, as well as through online shopping across a spectrum of categories. Sears, for example, said tools and generators were flying off the shelves Sunday, while at Kmart, perishable items such as food and water, along with blankets, were in strong demand.
Halloween spending this year was seen at $8 billion, up 3 percent from a year ago, according to a National Retail Federation and BIGinsight survey conducted earlier this year, but that projection may need to be revised due to the storm. Loeb estimated that stores along the Eastern seaboard would lose roughly $10 million connected to Halloween gear and another $10 million in Halloween candy sales at drugstores.
Based on interviews conducted by WWD over the last few days, major retailers seem to have heeded advance warnings of the magnitude of the storm and reacted in advance by communicating with employees through hotlines and e-mails on store closings and contingencies, and by stocking up with survival supplies for consumers in the path of the huge hurricane.
Several senior officials also said Sandy’s impact on business would have been worse if the storm had made landfall later in the week when business picks up, or in November when holiday selling really begins. As one senior retail executive observed: “You never like closing stores, but it is better that this is happening at the beginning of the quarter.”
This is the second major storm to hit the East Coast in late October. Last year on the weekend of Oct. 29, retailers were dealing with an historic freaky snowstorm that crippled much of the mid-Atlantic and Northeast and forever changed perceptions that big snowstorms couldn’t occur before November. Ice and heavy snow brought down trees and snapped power lines, affecting more than three million people, though many malls and stores reported then that they were able to reopen quickly. Because of last year’s storm, the sales comparisons to this year’s may not be so bad.
BIG RETAIL CLOSINGS
Saks Fifth Avenue closed 16 full-line and Off 5th units in New York City and other areas, including the Fifth Avenue flagship. “This isn’t fun and games. We made the decision late yesterday to close the offices as well,” said Stephen I. Sadove, Saks Inc. chairman and chief executive officer. “We boarded up the New York store for protection. We will see what happens. The priority is to keep people safe. It’s important to be cautious.” Sadove had a conference call with his team scheduled for later in the day to discuss the impact and plans for Tuesday.
“The safety of our associates and our customers are our top concerns as we prepare for the impact of the storm,” said John R. Belk, president and chief operating officer of the Charlotte, N.C.-based Belk Inc. “We’ve been tracking the system since last week and held preparation calls with our stores, division offices and our emergency response team throughout the weekend. Our stores are prepared, our response teams are ready to respond if needed, and we’ve staged emergency supplies at one of our distribution centers.”
Belk’s Kill Devil Hills store on the Outer Banks of North Carolina did close at 6 p.m. Sunday, and reopened on time Monday, and a California, Md., store closed Monday at 2 p.m., while the Westminster, Md., unit was set to close around 4 or 5 p.m., and the Williamsburg and Fredericksburg, Va., stores were considering closing at 5.
At Bergdorf Goodman, “We closed at 5 p.m. Sunday, an hour earlier than our normal closing time, so that associates could get home safely in advance of the transit closures,” said store president Joshua Schulman. “We remain closed today [Monday] and will continue to monitor the situation. We are eager to return to normal but the safety of our associates and clients is our primary concern.”
Neiman Marcus Inc., which includes Bergdorf’s, also kept seven Neiman Marcus stores closed and was planning to close its Boston store at around 11 a.m. Monday. The East Coast distribution center in New Jersey was closed as well.
On Monday, Macy’s Inc. closed about 130 stores, including 14 Bloomingdale’s and three Bloomingdale’s outlets, mostly in the mid-Atlantic and Northeast. The New York offices for both Macy’s Inc. and Bloomingdale’s were also closed. “We got out ahead of it fairly early out of concern for the safety of our associates and customers. Decisions about the New York City offices and stores were made Sunday afternoon so people could get home before subways and trains were closed,” said Jim Sluzewski, Macy’s corporate spokesman.
Wal-Mart Stores Inc. said as of noon on Monday, 58 stores were closed. The breakdown: 14 stores in New Jersey were closed, 13 in Delaware, 29 in Connecticut, and one store each in Maryland and Pennsylvania. The company said about 800 of its stores fall along the Eastern seaboard in the projected path of the storm. Wal-Mart is trying to keep emergency supplies in stock and will remain open as long as it’s considered safe to do so, the retailer said.
In the week before Sandy, Target Corp. sent truckloads of essential products to stores and distribution centers within the storm’s path. “Now that the storm has begun, our focus is on the safety and well-being of our team members,” a spokeswoman said. “As of this morning, 14 Target stores are closed and we anticipate additional closures today and into Tuesday and Wednesday. In addition, we are working with our distribution centers and vendors to ensure that after the storm, essential items are replenished quickly.”
As of noon on Monday, there were 24 Sears and Kmart stores closed in Delaware, New Jersey and Long Island. “With the storm being 1,000 miles wide, we are closely monitoring road restrictions, flooding, and power outages,” a spokesman said. “We do have generators in the area that we can deploy to select stores in the event of power outages.”
Neal Black, ceo of Jos. A. Bank Clothiers, said the corporate office and warehouse in Hampstead, Md., were open Monday. However, 49 stores were closed, “all in a band between Washington, D.C., and Providence, with the center and the heaviest quantity of closings in New Jersey.”
He said none of the closed stores had sustained damage as of midday on Monday and “although hurricanes are more rare in the Northeast, we have a lot of stores in Florida and Texas so we have a pretty well-rehearsed and proven strategy for awning removal, board-ups and sand-bagging as well as manpower management,” he said.
“We have stores up and down the East Coast that are closed,” said Scott Birnbaum, senior vice president of marketing and e-commerce, although he didn’t yet have a count. All four units in New York City were closed on Monday, including locations in Times Square, on 34th Street, the Manhattan Mall and Fulton Street, Brooklyn.
The Bon-Ton Stores Inc. was “monitoring the storm” and would “make decisions on a one-on-one basis depending on conditions,” while Brooks Brothers said all New York City stores and the corporate offices closed early Sunday and remained shuttered Monday.
The Mall at Short Hills in Short Hills, N.J., Westwood Garden State Plaza, and Tice Corner Marketplace in Woodcliff Lake were among the Jersey malls closed Monday.
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