NEW YORK/CHICAGO (Reuters) – After Hurricane Sandy devastated the East Coast, companies scrambled on Tuesday to assess the damage and figure out how to staff up as soon as possible.
Transportation hubs in New York and Washington were closed due to Sandy, one of the biggest storms to ever hit the country. The storm bashed the coast for hours with high winds and waves that caused widespread flooding, then Sandy dropped just below hurricane status before making landfall on Monday night in New Jersey.
With the holiday season quickly approaching, retailers in particular hurried to get back to business.
Luxury department store Saks Inc (SKS.N) said it would reopen on Tuesday three of the stores that it had to close because of Sandy, including stores in greater Washington and Philadelphia.
The retailer’s flagship on Manhattan’s Fifth Avenue, which generates about 20 percent of company sales, along with five other stores in New Jersey and Connecticut, are set to reopen on Wednesday, a spokeswoman said.
Saks said it would not be coordinating transportation for employees.
“In the NYC store, many associates live nearby, and we can operate the store with lower staffing levels if needed,” a representative said.
Similarly, Macy’s Inc (M.N) said its iconic Herald Square flagship store in Manhattan, and others in the city and in parts of New Jersey, would stay closed on Tuesday. Others in the East will open through the course of the day.
“The determining factor is if the store and shopping center have electricity, and if associates are able to get to work,” a Macy’s spokesman said, adding that the company had 195 stores closed all or part of the day Monday, about a quarter of its footprint.
Wal-Mart Stores Inc (WMT.N) had 267 stores closed as of late Monday night due to the storm. By Tuesday afternoon, that was down to 80 stores in 10 states.
The world’s largest retailer said none of its facilities had been seriously damaged and there was no disruption of holiday planning.
The Wal-Mart emergency operations center in Bentonville, Arkansas was running at full speed. Along with the meteorologist on staff, there were people working on issues such as logistics, emergency merchandise and fuel for generators.
“I think the lesson is that the East Coast needs to prepare for hurricanes just like the Gulf Coast needs to because, you know, that’s an area that prior to Irene was not an issue,” said Mark Cooper, Wal-Mart’s senior director of global emergency management.
Ikea, which has nine stores from Maryland to Connecticut, hopes to reopen all but the store in the Red Hook section of Brooklyn on Wednesday. Nevertheless, the decision 10 years ago to elevate the Red Hook store above the parking lot was fortuitous, said spokesman Joseph Roth. “Certainly there is water along the esplanade, the whole waterfront area there, but the store itself appears to have weathered it relatively fine.”
DESPERATELY SEEKING A CUP OF JOE
New Yorkers searching for a cup of coffee had more luck with small chains or delis, or in some cases, Dunkin’ Donuts (DNKN.O), than Starbucks (SBUX.O).
On the Upper West Side of Manhattan, two Starbucks stores on Broadway six blocks apart were both closed with a sign in the window: “Blame the weatherman, not us. Sorry but we are closed to inclement weather. We look forward to seeing you soon.”
A nearby Dunkin’ Donuts was also closed, no sign in the window. But the French Roast on 85th and Broadway had a long line of customers snaking out the door.
Dunkin’ Donuts franchisees are responsible for making the business decision to open their restaurants, a spokesman said, adding that the stores at Rockefeller Center and Penn Station were open.
Sue Chen, who owns three Dunkin’ Donut stores on Long Island, where almost a million homes and businesses were powerless, was lucky enough to have power at two of her stores.
“I have to thank my manager,” Chen said Tuesday from behind the counter at her store in Sea Cliff, where she was pitching in to help five employees keep up with demand. “Last night, at 2 o’clock, 3 o’clock, he came here and started to make the bagels.” Chen said workers at the Sea Cliff store all live nearby, so the manager called and told them to come in.
About 250 Starbucks stores from Virginia to Maine were closed, said spokeswoman Haley Drage. “All of our New York metro stores are closed,” she said, adding that the company is assessing when they can be safely reopened.
“We’re trying to ensure partner safety. We don’t want partners traveling if it’s not safe,” she said, noting that authorities in many localities had urged residents to limit traveling.
Reuters storm blog: r.reuters.com/tyj63t
Graphic on Sandy link.reuters.com/daq63t
Graphic showing Sandy’s path link.reuters.com/sar63t
DRUGMAKERS SEEK ALTERNATIVES
Drugmakers, heavily concentrated in New York and New Jersey, were also laid low by the storm. Novartis AG (NOVN.VX) said all offices in the area would remain closed Tuesday, as did top insulin maker Novo Nordisk. (NOVOb.CO)
GlaxoSmithKline Plc (GSK.L) said it had implemented a continuity plan to ensure medicines would continue to be distributed, especially given the numerous airport closures still in effect. But the company also said there was sufficient inventory in the supply chain to avoid serious disruptions.
Relatively high amounts of pharmaceuticals move by air, since drugs are light and high-value items, meaning companies like GSK have to arrange road transport in the meantime.
Multiply a decision like that by a few dozen or even hundreds of companies, and Sandy could actually end up being a boon to the trucking industry despite the short-term costs of widespread road closures.
“In the long run, however, the effect is clearly positive, perhaps close to $1 billion, because resupply and rebuilding generates freight growth and because trucking is the mode of choice for time-sensitive resupply,” said Noel Perry, managing director at transportation consulting firm FTR Associates. (Reporting by Phil Wahba in New York and Jessica Wohl in Chicago; additional reporting by Martinne Geller, Lynn Adler, Alison Frankel and Eileen Daspin in New York, Toni Clarke in Boston, Ben Hirschler in London and Allison Martell in Toronto; writing by Ben Berkowitz and Patricia Kranz; editing by Matthew Lewis and David Gregorio)