By Lisa Johnston
New products on display at the American International Toy Fair, held in N
CE chain stores located along the Gulf Coast are resuming operations following back-to-back blows by Hurricanes Katrina and Rita on Aug. 29 and Sept. 24.
Best Buy reported that operations at all area stores had returned to normal by the first week of October. The storms had affected 42 stores and one distribution center, but all are now up and running according to the company's 10-Q report, filed earlier this month with the U.S. Securities and Exchange Commission (SEC).
Best Buy said it is too early to determine the ultimate financial impact of the hurricanes, although third-quarter and full-year earnings will likely be reduced due to property damage, business interruption losses, and financial support provided to employees and affected communities.
For Circuit City, 11 stores were shut by Katrina and 17 were closed in advance of Rita. All of the Katrina-impacted locations reopened in September, save for one store whose lease was terminated. All but two of the Rita-impacted locations also reopened last month, although the company could not yet determine when the remaining pair would resume operations.
Circuit City noted that it maintains property and business interruption insurance, but cautioned that its financial performance in the current quarter could be affected by possible “adverse changes in general economic conditions from higher energy prices and other widespread disruptions” in the aftermath of the storms.
Regional brown- and white-goods chain Conn's reported that its headquarters, local distribution center and the five area stores that were impacted by Hurricane Rita last month have all resumed normal operations.
None of the facilities suffered major damage, and all reopened with the return of power and other essential city services. A number of other Conn's stores located in anticipated landfall areas had been closed due to local evacuations, but were brought back online as soon as the storm's threat passed.
Rita came ashore just southeast of Conn's home base in Beaumont, Texas. In anticipation of its arrival, the chain transferred its key operations to Dallas and other sites away from the coast. This permitted all facilities outside the storm-affected areas to remain operational. All corporate functions were later relocated to Dallas and other locations, including Houston, San Antonio and Austin, due to the prolonged restoration in southeast Texas.
As of Oct. 10, all company functions and activities had resumed regular operations at their normal locations.
Conn's reported that net sales for September, which included 134 lost store days due to Rita, increased 20.6 percent year-over-year to $47.3 million, while same-store sales increased 10.6 percent for the month. While the company does not usually report monthly volume, it said it is releasing the numbers on a one-time basis due to the “extraordinary nature of the events” related to the hurricane.
“In spite of Hurricane Rita, our sales performance continues to be strong,” said Tom Frank, chairman/CEO. “In fact, we expect sales to benefit ultimately from the storm's impact — we sell many of the products our customers need to rebuild their lives following this storm.”
Separately, Wal-Mart reports that 10 of the 126 facilities initially closed by Katrina remain shut, including seven supercenters, two discount stores and one Sam's Club location. Of the 155 facilities initially shut by Rita, only two superstores remain closed.
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