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Retailers hit by Katrina

By Lisa Casinger -- Home Accents Today, 9/1/2005

The federal government has yet to put an overall price tag on the damage wrought by Hurricane Katrina, but experts said it's likely to top $100 billion or more. It is difficult to assess damage to area retailers, especially smaller independent ones, because of inability to contact owners.

The National Retail Federation's Port Tracker report said transporting retail goods could be slowed, not because of maritime shipments, but because of the railroad operations used to move goods out of other ports. Erik Autor, NRF vice president and international trade counsel, said New Orleans is a major port for bulk commodities but not retailer container shipments.

"Railroads are going to need to divert around the New Orleans area for a significant period," Autor said. "That could result in a shortage of railroad cars and longer transit time for trains hauling merchandise away from other ports, particularly on the West Coast. It's too soon to get a full measurement of the impact, but the Port Tracker report has raised the congestion rating for two major port areas and we will be monitoring this situation closely."

Most furniture stores in the New Orleans area and along the Gulf Coast of Mississippi are assumed to be destroyed or heavily damaged. At press time, most of New Orleans, including more than 300 retail subscribers to Home Accents Today located in the area, couldn't get mail delivery, whether or not they are open.

"I think it's going to kill the furniture business for the fourth quarter," Powell Co. sales representative Marty Libowsky, whose territory includes Alabama, told Furniture/Today, a sister publication to Home Accents Today.

Libowsky said many of his retail accounts have told him to indefinitely postpone sales calls because most hotels are filled with hurricane evacuees.

"Even if they could get their stores reopened, there's no one to sell to because all the houses are gone," added Jack Fry, a Powell rep who lives in Jackson, Miss.

Information remained sketchy from devastated areas such as New Orleans and Gulfport, Miss., but Fry and others who live near those cities said it's safe to assume it will be a long time before any of them are able to reopen.

Officials at Mulberry, Fla.-based W.S. Babcock, for example, still had not been able to reach Ron Jolley, owner of stores in Pascagoula and Gulfport, Miss. — two of the hardest-hit areas — as of late last week, according to Furniture/Today.

"I assume they both are probably gone," said Charlie Bowden, director of risk management for the Top 100 retailer. "Those are the only two stores we have not heard from yet, and we anticipate the worst, unfortunately, from everything we've seen on the news."

Top 100 retailer Havertys said its stores also escaped without major damage.

More than 500 Macy's, Foley's and David's Bridal Group employees and their families in Gulf states were directly affected by the hurricane. Federated and its divisions with stores in affected areas are providing food, water and other transitional assistance to employees and their families.

Pier 1 has about 25 stores in areas hit by Katrina and at press time nine were still closed because of floodwaters, but had not yet been able to assess damage.

"We started closing our stores Saturday before Katrina hit to give everyone time to evacuate," said Pier 1 spokesperson Misty Otto. "All of our employees are safe and we're helping them relocate; they are all still being paid. So far we've reopened all but nine stores, those hit hardest."

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