13219 Thu, 12/06/2007 - 12:39pm
By Michael Rudnick
NEW YORK-- The wildfires that ravaged Southern California recently were not nearly as devastating to the region's home goods retailers.
While destroying more than 2,000 homes in an area spanning from Ventura County to just south of the United States-Mexico border, the fires have not yet had a major negative impact on home goods sales.
Anna's Linens, which operates about one-third of its 246 stores in California, expects a somewhat minimal impact from the fires. "Fortunately for us, with business now more geographically diversified, we are less sensitive to impacts from weather-related issues," Scott Gladstone, chief operating officer of Anna's Linens, told HFN. "The immediate impact from store-related closings was negligible," he added.
Anna's Linens closed four locations on Oct. 22 and an additional seven on Oct. 23 in San Diego County, Gladstone said, noting that six reopened on Oct. 24 and one remained closed until Oct. 28. None of the retailer's stores in the area sustained damage from the fires, he said.
The soft home retailer does expect an impact on same-store sales for October of about 1 percent, which Gladstone said takes into account "store closure days and lighter traffic patterns in stores in the area." He said that the October loss could very well be recovered in November when consumers in the area return to the stores. "Some people may be deferring shopping to November; hopefully it will be gained in November," Gladstone said.
Macy's, which operates roughly 70 stores throughout California, closed three San Diego County locations; Otay, Escondido and Plaza Bonita on Oct. 23 for a full or partial day, said a Macy's spokeswoman. None of the affected stores sustained damage, she said. She declined to comment on how the fires may have affected store traffic or overall same-store sales for the month. She added that it is too early to determine the future impact of the fires.
Linens 'n Things seems to have dodged the flames for the most part. "Although 14 stores were directly in the areas of the fire [in San Diego, Orange County and Riverside], only two stores temporarily closed due to poor air quality," stated Bob DiNicola, chairman and chief executive officer of Linens 'n Things, in an internal company memorandum dated Oct. 25. "As a company, most of our 350 associates in those areas were temporarily displaced as a result of evacuations or road closings," he stated. The memo added that all stores are now open for business.
Western regional department store chain Gottschalks, which operates nearly 70 percent of its stores in California, so far has also largely avoided sales damage and other problems from the fires.
"Our stores have not been in harm's way, but I can't tell what the ultimate impact will be. There have been some areas with disruption," Gregory Ambro, Gottschalks executive vice president and chief operating officer, told HFN. He specifically cited the company's San Bernardino location. "It is too soon to get a sense on how it impacted our business," he said. "Ultimately, people will have to rebuild; shopping is probably not the first thing on their minds right now."
However, the need to rebuild did spark some home goods shopping following Hurricane Katrina in 2005. Simone Rion, regional director of West stores at Cost Plus World Market, said that while it is still early to tell, she expects consumers affected by the fires to return to the stores as part of the rebuilding and refurnishing of their homes. Cost Plus, which operates 35 stores in Southern California, is considering offering a discount program to local residents to help customers refurbish their homes, Rion said. Two Cost Plus San Diego locations were closed on Oct. 22, Oct. 23 and part of Oct. 24, she said, adding that it is too early to determine the sales impact.
Gladstone does not expect the fire-related rebuilding to have a positive impact on home furnishings sales. "We saw [sales] in the Gulf from the hurricanes, but for the fire we won't see this because the sheer number of houses lost in the fire is not significant enough [to have an impact on sales]," he said.