Sandy Blows in Bad News for Clothing Retailers
By Monday afternoon, the streets of New York City had become wet and desolate. Retailers from Wal-Mart (NYSE:WMT) to Walgreens (NYSE:WMT) had closed hundreds of stores that lay within the reaches of Hurricane Sandy’s gusting winds and rain. While some companies have kept their East Coast locations shuttered against the weather on Tuesday, others have reopened operations and began to assess the damage done to their shops and sales.
The impact from the hurricane is not expected to impact all industries equally. Poonam Goyal, an analyst for Bloomberg Industries, told the publication that while grocery retailers will benefit from customers stocking up before the storm and home-improvement retailers will gain from the clean-up, clothing and department stores will not have the same opportunity to recoup losses.
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“The wild card here is when will stores reopen,” Goyal said. “If stores will not reopen for the next two or three weeks, it’s going to impact holiday sales.”
As of Tuesday, Wal-Mart had closed 80 of its namesake and Sam’s Club locations, but company officials did not reported significant damage to any stores. Target (NYSE:TGT) has 60 stores still closed, with 30 stores running on generators. Home Depot (NYSE:HD), which shipped 750 truckloads of generators, cleaning supplies, rakes and chainsaws to its northeastern stores Tuesday, reopened all but about 12 of its 44 closed locations. Lowe’s (NYSE:LOW) shut only four stores throughout the day, only one of which was damaged by the flood waters.
Both Macy’s (NYSE:M) and Saks (NYSE:SKS) closed stores throughout Manhattan, as well as locations in New Jersey and Connecticut. According to data compiled by Bloomberg Industries, these retailers will be the most likely to see sales hurt by Sandy. Macy’s has approximately 30 percent of its stores in the region affected by the storm, while Saks has 27 percent of its locations in the area. After hurricane Irene caused the retailers to lose 150 basis-points in comparable-store sales last August, analysts are expecting decrease in Novemenber sales. However, Lazard Capital analyst Jennifer Davis told the publication that the hit will not be overly detrimental to sales because Monday and Tuesday are not busy shopping days.
But the business intelligence firm Planalytics has a different take. President Scott Bernhardt said that consumers are now spending on needs, which may alter their shopping plans for the rest of the year. The damage done by Sandy could reduce the 4.1 percent growth the National Retail Federation forecast for the holiday season, he said.