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Storms Spare Florida Retailers, but Comps Outlook Weakens

The impact of Hurricane Charley and Tropical Storm Bonnie on the Southeast is expected to hurt August sales at Federated and Neiman’s.

ATLANTA — This time, the weather really is having an impact.

Retailers generally escaped any major physical damage from the weekend storms and reported busy stores on Sunday and Monday as Floridians found respite in shopping malls. Still, Bonnie and Charley, the respective tropical storm and hurricane that dealt a deadly blow to parts of Florida and the Southeastern U.S. last week, are expected to depress August same-store sales by up to 2 percent at Federated Department Stores and the Neiman Marcus Group, as well as at BJ’s Wholesale Club, according to Deborah Weinswig, analyst at Citigroup Smith Barney.

In a research note, Weinswig said she expects August comps at Federated, Neiman and BJ’s to be impacted by the two storms, while discounters are expected to show better results as “consumers purchased consumables in anticipation of the storms.”

Weinswig is basing her estimate on an analysis of the exposure of these three retailers to Bonnie and Charley. She said the number of stores exposed to the storms was 15 percent for Federated and Neiman Marcus and 12 percent for BJ’s. This compares with exposures of 6 percent for Target Corp. and 5 percent for Wal-Mart Stores and J.C. Penney.

Weinswig’s analysis does have a silver lining: She expects strong selling in early August to “mask some of the weakness as a result of the storms.”

On Monday, the hardest-hit areas in Florida were sorting through the destruction caused by Hurricane Charley. State officials estimate $11 billion in damages. Punta Gorda and Port Charlotte seemed to take the brunt of what Charley dished out. As of late Monday afternoon, one million people were still without power.

On the retail front, companies were affected in different ways by the hurricane. About one-third of Simon Properties’ 35 Florida malls were in the projected path of the hurricane and closed early either Thursday or Friday afternoon. With the exception of three centers, all reopened Saturday morning.

Remaining closed Monday, still without electricity, was Port Charlotte Town Center in Port Charlotte, Fla., near Sarasota. The mall sustained no major damage, though a spokeswoman said some skylights were blown out and landscaping was affected. The center is anchored by Burdine’s-Macy’s, Dillard’s, J.C. Penney, Beall’s and Sears, with 115 mall stores.

Two other Simon properties, Edison Mall in Fort Myers and The Florida Mall near Orlando, reopened Monday. Neither were structurally damaged and no injuries were reported. Downed tree limbs and debris were mostly cleaned up over the weekend. The Florida Mall is one of Simon’s largest, a 1.9 million-square-foot center with seven anchors, including Dillard’s, Nordstrom, Sears, Saks Fifth Avenue, J.C. Penney, Lord & Taylor and Burdine’s-Macy’s, with 240 mall stores.

Officials wouldn’t speculate on lost sales for Simon’s total Florida stores, which had average total sales of $414 a square foot for the second quarter.

Another large property near Orlando, The Mall at Millenia, jointly owned by the Forbes Company and Taubman Inc., closed Friday at 1 p.m. Around 70 to 75 percent of stores opened Saturday, on a voluntary basis, with all stores opening Sunday, according to Steven Jamieson, general manager.

Jamieson said traffic started out slow on Saturday morning, picking up by midday to “typical Saturday levels.” He noted that many coastal residents had come inland to Orlando to avoid the hurricane’s original projected path. Rather than serious shoppers, traffic appeared to be made up of more browsers using the mall as respite from homes and other areas that lacked power, he said. The food court and the mall’s sit-down restaurants were busy all day during the weekend. Mall traffic Monday was above average, he said. The 1.2 million-square-foot center is anchored by Bloomingdale’s, Neiman Marcus and Burdine’s-Macy’s, with 150 stores.

Bell Tower Shops, a Madison Marquette property in Fort Myers, Fla., closed Friday and Saturday, and lost power Saturday night. Restaurants reopened Sunday, and mall stores opened Monday, with the center fully operational.

Traffic has been good, said Becky Thompson, general manager, who added that many people from nearby barrier islands were staying in area hotels. No structural damage occurred, but the open-air mall’s lushly landscaped trees and bushes were blown around.

Lakeland Square, a General Growth Properties mall in Lakeland, Fla., around 150 miles northeast of Punta Gorda, also experienced above-average traffic Saturday through Monday, after closing early Friday. Rod Charles, general manager, mall accounting, said Friday’s loss would probably be compensated by business over the weekend, as area residents flocked to the mall to escape hot weather and no air conditioning in area homes.

Wal-Mart began shuttering and evacuating stores in Charley’s path late Thursday and early Friday, following National Weather Service recommendations. By Monday, three stores were still closed, awaiting generators and fuel, said a spokeswoman. Of the 75 stores affected, she said most suffered power outages rather than significant physical damage and were able to use supplementary electrical sources to get up and running quickly.

Phone lines were down at the Wal-Mart in Punta Gorda store and there was no answer at the Port Charlotte Supercenter.

“No gas cans, no ice, no garbage cans, no duct tape. Otherwise, we’re in good shape,” reported a Wal-Mart associate who answered the phone at a store in the coastal community of Englewood, Fla., 15 miles northeast of Punta Gorda. She said the store would be open 24 hours, as usual.

Closing a day could cause Wal-Mart Supercenters, which average $100 million in sales annually, to lose roughly $300,000 in sales.

Despite closure-related losses, consumers along the East Coast preparing for the storm made the region Wal-Mart’s strongest performer last week, according to the retailer’s recorded sales call. Sales of survival basics shot up, including water, duct tape, headlights, rope, matches, playing cards, toaster pastries and canned tuna.

The spokeswoman would not speculate on whether the retailer would experience a sales surge in the coming months, but it’s likely stores will prosper, selling a range of clothing and household necessities to rebuilding homeowners.

Wal-Mart, which has built national television ad campaigns around its disaster-relief efforts, had sent 300 truckloads of donated bottled water and 100 truckloads of general merchandise, including lamps and flashlights, to the region as of Monday.

Three vacant Wal-Marts were offered for FEMA temporary housing and staging areas, while area stores set up donation trailers that would be on the premises until Sunday.

The spokeswoman said affected associates could apply to the retailer’s internal disaster relief fund or its critical need program for relief grants. The critical need program is funded by other Wal-Mart associates who agree to voluntary payroll deductions. Wal-Mart, facing wide-ranging criticism over its treatment of associates, has been active in its attempts to portray itself as a compassionate and even-handed employer.

For Target, phone lines were down at the retailer’s Port Charlotte store, but overall, the Minneapolis-based retailer seemed to have less exposure to the storm. The company’s Web site listed only three stores within 200 miles of Punta Gorda. A Target spokeswoman did not return a call at press time.

J.C. Penney Co. said four stores in the central coastal area of Florida remain closed due to power outages and flooding. Penney’s hopes to have the stores open by Wednesday or Thursday, but said it may have to bring in generators if electrical power still hasn’t been restored. “We’re still assessing damage and making repairs,” said a company spokesman. “We were lucky and don’t think the minor damage we received will amount to significant sales losses.”

Sears Roebuck said five stores in Florida lost power, but as of 11 a.m. Monday, only three were still without power, in Port Charlotte, Sebring and Lake Wales. “Even though stores were without power, they were selling generators and other storm-related items, using cash and checks. We are still trying to be very helpful to folks. Of course, the hurricane will have some impact on business, but we can’t say exactly how much at this point,” a spokesman said, adding that damage to stores was minimal.

Saks Inc. said five Saks Fifth Avenue stores in Naples, Fort Myers, Sarasota, Tampa and Orlando, Fla., and four Off 5th outlets, including one in South Carolina, were closed between one and three days. As of Monday, however, all the affected stores were back in business, according to a spokeswoman. She also said the stores were not damaged.

The company said three Parisian stores in Florida were closed for one or two days, and three Proffitt’s stores in North Carolina were closed a half day each.

— With contributions from David Moin and Arthur Zaczkiewicz, New York

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