Gulf Coast Businesses Struggle in Katrina's Aftermath

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Hurricane Katrina was downgraded to a Category 1 storm yesterday afternoon, but not before it caused extensive flooding, power outages and catastrophic property damage to southern Louisiana, Mississippi and Alabama, encompassing the cities of New Orleans, Biloxi and Mobile.


Much has been made of the storm's potential effect on the U.S. oil industry, since Gulf Coast oil companies account for one-quarter of U.S. oil and gas output. However, the DM industry is expected to take a hit, too. Mail service in and out of the region has been curtailed, with no indication yet when it will return to normal.


The U.S. Postal Service said its New Orleans processing and distribution center suspended operations at noon Sunday. In addition, no drop shipments are being accepted, and retail and delivery services were suspended until further notice in several ZIP codes in Louisiana, Mississippi and Alabama. Also yesterday, FedEx said it expected disruptions to all of its local operations.


The hurricane also affected several DMers with offices and/or stores in the area.


Peter A. Mayer, a full-service ad agency based in New Orleans, posted an announcement at 1 p.m. yesterday informing employees that the company will be closed until further notice. The post says the company "is evaluating the situation" and will notify employees about its reopening. The agency is a member of the Direct Marketing Association.


As of yesterday afternoon, flooding had spared the historic French Quarter, where multichannel merchants such as Victoria's Secret, Abercrombie & Fitch, Ann Taylor Loft, Brookstone, Chico's, Eddie Bauer, Sharper Image and Saks Fifth Avenue have stores. However, tourism to the region is likely to be affected for some time.


DMers with merchandise entering the Port of New Orleans likely won't be spared, either. The port is one of the largest in the country, handling an average of 11.2 million tons of cargo annually, including apparel, food products and consumer merchandise.


The early projections for Hurricane Katrina were so severe that President Bush declared an emergency in Louisiana and Mississippi on Saturday, enabling a massive, early relief project to begin.


The American Red Cross said it is launching the largest mobilization of resources in its history for a single natural disaster. This includes 200 emergency response vehicles and preparations to provide 500,000 hot meals daily.


Private and public aid has started pouring into the region. Office Depot said Sunday it will donate $1 million to the Red Cross, Anheuser-Busch is shipping 300,000 cans of drinking water, and Wayne Ellsey, president of Kodiak-Terra, a footwear company, set up a Katrina Relief fund and wrote the first check for $1,000 himself.


Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters
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