Counting the retail cost of Superstorm Sandy
US retailers have been forced to close up to 10% of their stores because of the 'Superstorm'
As Hurricane Sandy swept along the US East Coast earlier this week, US retailers were forced to close up to 10% of their stores, according to latest figures. As retailers begin to reopen stores again, analysts are now weighing up the long-term impact of the storm on apparel and footwear sales.
After being forced to close for two days this week after Hurricane Sandy flooded Lower Manhattan, the New York Stock Exchange today (31 October) reopened for business.
But the economic impact of the hurricane, which is estimated to have caused US$20bn worth of damage and has been tagged 'Superstorm Sandy' and 'Frankenstorm', will take longer to evaluate.
Department stores and specialty apparel chains all experienced net-losses, according to weather research firm Planalytics, after consumer traffic over the weekend - when most retail sales take place - was hit by preparations for the storm.
Some 500 of Ascena Retail Group's stores were closed yesterday, according to research firm Retail Metrics. Sportswear chain Foot Locker was forced to shut 200 stores, while department store retailer Sears closed 112 shops.
Macy's stores and offices in New York, including its Bloomingdale's flagship, remained shut yesterday, according to senior vice president of corporate communications and external affairs Jim Sluzewski.
The department store group closed 130 Macy's and Bloomingdale's stores on Monday, while 65 had to close early.
However, the retailer's stores on the east coast, including those in the Washington DC area, started to reopen yesterday, Sluzewski told just style. "The determining factor is if the store and shopping centre have electricity, and if associates are able to get to work," he said.
"We continue to closely monitor the situation location-by-location, with the safety of customers and associates being the top priority. We have no reports of any significant damage nor of any injuries to associates," Sluzewski added.
He said it is "impossible" to estimate lost sales until the company knows how many stores will be opened or closed as a result of the hurricane.
Meanwhile, discount retailer Target Corp revealed it has reopened more than 140 stores across the east coast, while nearly 40 remain closed. The company said it expects to reopen more shops in the next few days.
As of 5pm CST time yesterday, retail giant Wal-Mart reported 70 closed stores in Connecticut, Maryland, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Virginia and West Virginia.
Ralph Lauren said it has postponed its second quarter earnings call "due to extraordinary transit and communications challenges caused by Hurricane Sandy, in addition to continuing efforts to ensure the safety of its New York area employees".
While, Iconix Brand Group said its date change "will avoid the possibility of disruption from Hurricane Sandy to the earnings call".
That said, retailers should be able to bounce back quickly and recapture a "good portion" of lost sales, according to Retail Metrics president Ken Perkins.
"The fact that this storm hit well before Black Friday allows retailers plenty of time ahead of this key holiday selling weekend to prepare and add additional promotions if need be to garner lost sales.
"Had the storm occurred right in front of Black Friday, the impact would have been far more deleterious to retailers."
However, Planalytics believes there are likely to be long-term impacts for retailers. Significant spending this week on "must-have" items is likely to cause many consumers to "revisit their holiday shopping budgets" and consequently impact sales forecasts.
Apparel retailers, which are already losing sales because of store closures and falling foot traffic, may have to "reduce prices and promote more heavily" to drive consumers into stores especially in impacted regions.
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