By Sharon Edelson
with contributions from Arthur Friedman
 on October 10, 2016
Retailers are assessing damage from Hurricane Matthew.

A slowdown in retail sales in the southern and southeastern U.S. is one of the residual effects of Hurricane Matthew, the deadly storm that ravaged Haiti last week and brought record-breaking flooding to the Carolinas and Georgia. Matthew has been blamed for at least 1,000 deaths in Haiti and at least 21 in the U.S. but spared the densely populated southern tip of Florida.

In the aftermath of the storm, retailers reported that debris and flooding made roads impassable and loss of power was common “from St. Augustine, Fla., all the way up to the Carolinas,” said a Wal-Mart spokesman on Monday, adding, “Hurricane Matthew delivered a serious blow to a number of states and we’re working to get our stores up and running to best serve our customers. We’re assessing safety, damage and power outage challenges and will continue reopening locations as quickly as possible.”

“There’s really nobody out walking around yet, but there will be eventually,” said Meg Offutt, an owner of Kemp’s Shoe Salon and Boutique with three stores in Vero Beach and Stuart, Fla. “A lot of people who left with the evacuation are back and they’re fixing their homes. We were so afraid because Matthew was heading straight for us as a category four, and we’d been through it before.

“We lucked out and it wasn’t a direct hit,” she added. “The hurricane lost speed and power. We’re very fortunate.”

A mandatory evacuation of the island — Vero Beach sits between the ocean and the Intercoastal Waterways — began on Thursday morning. “We were closed Thursday and Friday. We were allowed back on the island on Saturday and we cleaned up and opened for business Monday. There was a lot of debris and a lot of lines were down and people didn’t have power and cable TV.”

RetailNext on Monday released sales comparisons between Florida and the rest of the continental U.S. to illustrate Matthew’s impact. From Oct. 4 to 8, net sales in Florida declined 17.6 percent, compared to a drop of 5.9 percent in the balance of the country. Traffic fell 13.3 percent in the Sunshine State compared with a 10.4 percent decline in the rest of the U.S. and transactions declined 16.7 percent versus a 5.6 percent dip elsewhere. The conversion rate for retailers in Florida during the period was a negative 1.3 percent compared with a gain of 0.8 percent in the broader region, while sales per square foot fell 4.1 percent versus a gain of 3.2 percent.

Retailers are already in a tough spot with traffic for the first week of October down 6.52 percent, slightly worse than the 4 percent to 6 percent decline that was predicted, said Cowen and Co. “Hurricane Matthew likely impacted the decline in store traffic in the South,” a research note said on Monday. For the first week of October, the Northeast, West and Midwest outperformed the national average of a 6.52 percent decline with negative 4.69 percent, 4.94 percent and 6.3 percent, respectively.

“The South, with an 8.98 percent drop, was negatively impacted by Hurricane Matthew from Florida to North Carolina underperforming,” Cowen said. Apparel traffic has been particularly hard hit with a year-over-year decline of 5.02 percent. Cowen said apparel traffic year-to-date is off by 4.7 percent, a negative trend that’s persisted since June.

Evan Gold, executive vice president of global services at weather-tracking firm Planalytics, said the storm at one point threatened an area in the U.S. with the potential for doing up to $200 billion worth of property damage. He said the ultimate property damage from Matthew would likely be “somewhere in the ballpark” of 1999’s Hurricane Floyd, which was blamed for $7 billion in damage.

Macy’s, Nordstrom and Michael Kors all had 5 percent or more of their stores in the region impacted by Matthew, Gold said.

Regency Centers Corp., whose portfolio includes 311 shopping centers with a total of 42 million square feet of space, on Monday said that upon initial inspection, the centers along the East Coast sustained only minor damage as a result of Hurricane Matthew. “Beyond power outages at a limited number of properties, the scope of damage has been limited to tree and debris removal and minor roof leaks,” the company said.”There’s no major structural damage.”

While not widespread, textile mills in North Carolina were also feeling the aftermath of the storm on Monday. National Spinning, based in Washington, N.C., said some of its facilities in the state were still not operating due to Hurricane Matthew. A spokesman said two of its plants, in Beulaville and Whiteville, had to close because access roads were flooded, but he expected “all plants to be operational by the end of the day.”

 Facilities in Maiden and Burlington, and the headquarters site were unaffected as they are further inland. “The biggest problem for most people and businesses in the area has been road closures,” he said, noting that some shipments would have to be rerouted around flooded roadways.

A spokeswoman for Unifi Inc. based in Greensboro, with plants in Yadkinville, Madison and Reidsville in the state, said no facilities were impacted by the storm. Some mills in Lumberton, where the Lumberton River and tributaries had overflowed their banks, were said to be closed. Attempts to reach Contempora Fabrics and Alamac American Knits in the town were unsuccessful, with phone lines apparently down.

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