Retailers Brace for $700M Hit From Hurricane Florence
By: Kathryn Hopkins
It could lash the southeast coast for several days, experts have warned.
Retailers in the path of the “extremely dangerous” Hurricane Florence are bracing for impact — closing stores, boarding up windows and hoping the hundreds of millions of dollars in lost sales won’t hurt the revenue momentum merchants are bringing into the holidays.
With some one million residents from South Carolina to Maryland already being ordered to evacuate their homes and stores shuttering their doors, weather-analytics company Planalytics has estimated a potential economic impact of $700 million from lost sales, defined as consumer and retail purchases that will not occur and will not be made up.
While this is significant to the region, the forecast is less than the impact of last year’s Hurricane Harvey, which hit Houston hard, causing $1 billion in lost sales. Even worse was 2012’s Superstorm Sandy, wreaking havoc on New York City and other populous areas. Planalytics didn’t have an exact figure available for lost sales due to Sandy, but concluded that it was in the “multiple of billions.”
“To put that it into perspective, it’s bad, but not as big as some other storms,” said Evan Gold, executive vice president at Planalytics, attributing this to the fact that Florence looks likely to be bearing down on smaller cities. “I think it’s going to be a big hit to the local economy, but on a global, more national basis, the impact is not going to be huge as of now.”
According to Gold, apparel retailers, shopping malls, mom-and-pop stores and restaurants will take a hit, with chains that have a big presence in the regions feeling it all the more. On the other side, home improvement stores and convenience stores will be beneficiaries.
One mall that has already closed is the Independence Mall in Wilmington, N.C., a city with a population of 119,045. The mall has 1 million square feet of retail space, anchored by Belk, Dillard’s and J.C. Penney. Its web site said the mall would reopen “once it is safe to do so.”
In Myrtle Beach, S.C., population 32,240, the closures include Coastal Grand Mall, the state’s second-largest shopping center. It has around 172 stores including Old Navy, H&M and Dick’s Sporting Goods. Myrtle Beach Mall, which has 80-plus stores including Penney’s, Victoria’s Secret and Foot Locker, is also “closed until further notice” due to Hurricane Florence.
Walmart Inc. said some of its namesake stores and Sam’s Club doors will close or adjust hours of operation, while a spokesman for Penney’s added that its has closed seven stores so far — three in North Carolina and four in South Carolina — and will be monitoring events closely.
Hudson’s Bay Co. has closed its Saks Off 5th in Charleston, S.C., and will be closing its Saks Fifth Avenue store in Raleigh, NC tonight. It is closely monitoring the path and progress of the storm to determine if further store closures are necessary, with a spokesman stating its “first priority is the safety of our associates and customers and our thoughts are with those already impacted by the hurricane.”
It was a similar story for department store chain Macy’s Inc. A spokeswoman told WWD: “We will have store closures in some areas that are impacted by evacuation orders and curfews. The safety of our colleagues and customers is our top priority.”
In stores that have remained open, Planalytics reported that batteries, flashlights, building materials and bottled water are among the top items as residents prepare for Hurricane Florence.
It added that extended power outages, flooding and wind damage will drive demand for clean-up items such as pumps, saws and lumber in the aftermath.
The effects of Hurricane Florence are due to be felt Wednesday, while landfall is forecast for Thursday evening into Friday near Wilmington. With current maximum sustained winds of 130 miles an hour, experts have warned that it could trigger “a life-threatening storm surge” at the coast and flash flooding, which could lash the region for several days.
“This will be a storm that creates and causes massive damage to our country,” said Jeff Byard, Federal Emergency Management Agency associate administrator. “This is not going to be a storm that we recover from in days. We are planning for devastation.”
North Carolina Gov. Roy Cooper described Florence as a “monster,” adding Florence is “an extremely dangerous, life-threatening, historic hurricane” that is expected to stall over North Carolina, bringing days and days of rain.