By and  on September 27, 2005

DALLAS — Hurricane Rita's impact on retailing in Houston and other parts of the Gulf Coast will linger as storm-weary consumers review their spending priorities, experts said.

Residents returned home and many stores reopened Monday in Houston, which has a $70 billion-a-year retail industry and was spared serious physical damage. Although young shoppers out of school headed for malls, the disruption of business-as-usual in the fourth-largest U.S. city will enter its second week.

The situation was more dire in smaller Gulf Coast cities such as Port Arthur, Tex., which were battered by flooding and high winds. Rita, just weeks after Hurricane Katrina devastated New Orleans, shut oil and gas refineries that generate about 25 percent of the nation's energy supplies and are the lifeblood of the region. At least 16 petrochemical plants remained closed on Monday, though only one major plant faced long-term repairs.

"I think we're looking at muted retail activity until the spring,'' said Dr. Bernard Weinstein, chairman of the Center for Economic Development and Research, University of North Texas. "I think consumers already are tapped out and many now don't have savings. People are going to be paying more for energy in the months ahead and interest rates are going up. Paying the energy bill is viewed as a necessity. They're going to pay those bills before going to the shopping mall.''

In Galveston, about 60 miles south of Houston, Albright's, a women's apparel store in business 18 years, has been closed since last Tuesday. Owner Robert Albright said a return to normalcy will take time.

"I can't really reopen yet because I don't have any help and the city is still pretty empty,'' he said. "People are just starting to return. We didn't sustain any damage to the store other than the loss of business. Galveston was really lucky."

David Szymanski, director of the Center for Retailing Studies at Texas A&M University, said the destruction of this hurricane season has taken a psychological toll.

"What we're seeing is a change in the mood of the people,'' he said. "It is this exhausting endeavor preparing for a disaster and evacuating, and then there is a reassessment of what's important and what's not. You could see it in the faces of people ... They will reassess the dependability of their vehicles and think, how can we escape effectively or survive effectively? You have millions of people with that mind-set, and other things become relatively trivial. It gets back to basic human needs."Retail business in Houston had already taken a dip after Katrina as many residents focused on helping the thousands of evacuees from New Orleans.

"Katrina affected us for about 10 days and Rita will probably affect us for about a week," said Mickey Rosmarin, who owns Tootsies, a contemporary to designer store. "There is some business going on today with high schoolers, which makes sense. They're out of school and bored and looking for homecoming and prom dresses."

At Memorial City Mall in Houston, "People were in here before 10 this morning ... People are tired of being cooped up," said Sherry Burton, marketing director.

Neiman Marcus said only its Galleria Houston unit was affected by the storm and was closed through the weekend, though it was open on Monday. "We're back open and ready to do business," said corporate spokeswoman Ginger Reeder.

Joann's reopened its five stores in Houston Monday, selling a $795 Cole Haan leather jacket, among other things, said Steve Skoda, general merchandise manager.

"Some of the stores have customers today, and people who stayed during the hurricane feel bottled up and are ready to go shopping," Skoda said. "But a lot of people are still coming back into town. The problem is that we lost a key week."

J.C. Penney did not yet have damage reports for five stores that remained closed Monday in places hardest hit by Rita — Beaumont and Port Arthur in Texas and Alexandria, DeRidder and Lake Charles in Louisiana. A total of 28 of its stores were shuttered before the hurricane on Thursday and through the weekend, a spokeswoman said.

Saks Fifth Avenue's Houston store reopened Sunday along with two Off-Fifth stores in the Houston area, said spokeswoman Julia Bentley.

Federated Department Stores had 22 Foley's and one Macy's closed Thursday through Saturday in the Gulf Coast region, and all but six reopened Sunday. On Monday, only the two Foley's stores in flooded Beaumont, Tex., and Lake Charles, La., remained shut.

The Port of Houston, the second biggest in the U.S., sustained minimal damage and was to open today for commercial truck traffic. The Ship Channel opened Monday for tug and barge traffic and vessels with a draft of less than 35 feet. The U.S. Coast Guard was still checking for debris that might affect larger ships.— With contributions from Heather Staible, Houston

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