The wildfires that have caused havoc in Southern California are weakening, but their impact on merchants is sure to linger as yet another challenge to sales and profits.
The bare facts — hundreds of destroyed homes and other property damage, more than 35,000 acres incinerated, almost 40,000 people evacuated and millions of dollars spent by cash-strapped state and local governments to fight the blazes — tell only part of the story.
“This had a very negative impact on retailers….It’s not a favorable [retail] climate already — now it’s worse,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. “Just another reason for the consumer to stay home, which is bad news we don’t need right now.”
The fires are the latest in a series of blows during what has been a devastating year for California, where store vacancies are rising along with job losses and home foreclosures have reached record highs as values plummet. Those factors, combined with plunging consumer spending, form a potent cocktail, and economists forecast a prolonged downturn.
Strained city, county and state budgets and resources have left municipalities and the state government deep in the red, and sales tax bases have suffered as retail sales decline. More than $500 million had been spent on firefighting by the state alone since Jan. 1, which doesn’t include the expenditures of local fire departments and the federal government.
No part of the most populous U.S. state has been immune from the economic troubles, including the center of technological innovation in the Silicon Valley.
“We were definitely slower, because so many people were displaced,” Christian Felix, a manager at the Billabong-owned Beachworks store in the Shoppes at Chino Hills in San Bernardino County, said of the fires that erupted Thursday. “We were prepared for evacuation, too. The center had a plan in case we needed to get out because of smoke or toxic fumes.”
Chino Hills was the epicenter of a magnitude 5.4 earthquake in July, something Felix said came with the territory. “California tends to be disaster-prone, I guess,” he said. “Of course, we’ve been affected by the economy, too…we’re just hanging on.”
With higher temperatures and drought, California’s fire season — traditionally peaking in late fall as fierce Santa Ana winds sweep through the state, making dry, brushy areas prime for burning — has morphed into a year-round specter. There have been wildfires in late winter, spring and summer this year.
Even those in relatively safe areas had reason not to venture out. People were advised to remain indoors. Air quality remained poor in Los Angeles and Orange County, where hazy skies and the smell of smoke lingered. Ash could be found on automobiles, roofs and walkways.
“The air quality was just disgusting, you could smell smoke inside the mall and see ash in the parking lots,” said Erika Gonzalez, a manger at Claire’s accessories in Northridge Fashion Center, about 10 miles from Sylmar, where one of the fires burned.
“We’ve been really slow throughout the weekend and…we’re right near the 57 [freeway], which was closed, so I think that really had an effect,” said Jen Cantero, a manager at Frederick’s of Hollywood in the Brea Mall in Orange County, owned by Simon Property Group. “There’s been some smoky air through the vents, and it was hard to breathe for a while.”
Though no estimates on the cost of fire damage were immediately available, most experts believe the tally will climb into the tens of millions of dollars. Gov. Arnold Schwarzenegger said spending reached $1.9 million a day on firefighting.
“The devastation is unlike any I have ever seen before… and there is no way to describe the loss these families [whose homes burned] are facing,” Los Angeles Mayor Antonio Villaraigosa said at a news conference.
Considering California’s climate and a lack of rain over the past two winters, things could have been worse, experts said. And the tragic circumstances might ultimately provide an economic boost.
“Rebuilding can take a long time — that could mean additional jobs and retail sales in the form of replacements for items lost,” Kyser said.
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