Houston’s massive problem
Hurricane Harvey’s destructive stall over southeast Texas has converted Houston, the nation’s fourth-largest city, into a dangerous flood zone. The home improvement industry is reacting all along the Texas coast, with closings, disaster recovery efforts and, most immediately, accounting for the safety of their employees.
Five deaths have been reported so far. And authorities expect the torrential rains to continue for days.
The impact on the home improvement industry is likely to play out in the coming months, if not years, in a variety of ways. Already, Home Depot and Lowe’s have pledged financial support. Both companies are also providing relief or financial assistance to employees caught in the storm’s crosshairs.
One image broadcast on Twitter shows a powerless Zarsky Lumber warehouse in Victoria, Texas. A wall is ripped from the building.
No power in #Victoria. This lumber warehouse has a hole right thru it. #abc13 #Harvey pic.twitter.com/aIqL4W6UAh
— Courtney Fischer (@CourtneyABC13) August 26, 2017
Despite the damage, the store in Victoria remained open on Monday, thanks to a couple of generators supplying power. “The store took a hit here, but nothing we can’t fix,” said an employee. Even better news for Zarsky, which has six of its eight locations on the Gulf coast of Texas: all the employees are safely accounted for, he said.
Meanwhile, Houston – the nation’s fourth largest city – has come to a halt, according to Craig Cowart, formerly of HDW’s Houston division, and now with Tyndale Advisors. “The entire city and all surrounding cities are basically shut down,” he told HBSDealer in an e-mail. “And individuals are sheltering in place as roads are blocked and there is no real outlet for evacuation.”
Shreveport, Louisiana-based Hardware Distribution Warehouses closed its Houston DC on Monday out of concern for the safety of its employees. Several of HDW's employees lost their homes and suffered property damage, the company said in a press release.
The natural disaster is likely to turn into an economic disaster, as well, with early estimates of the damage exceeding $30 billion. That would make Harvey one of the 10 most damaging on record.
“A historic event is currently unfolding in Texas,” wrote Aon Plc, in a research note to clients, according to this Bloomberg article.
According to retail-specific weather forecasting service Planalytics, retailers will suffer in general. “Planalytics' initial estimate on lost sales in the Consumer/Retail sector will be $1 billion,” the company wrote on Monday. “This represents revenue that is lost and will not be made up later.”
Home centers and farm-and-ranch stores will fare better than most, seeing sales boost before the storm, and demand for clean-up supplies in future weeks and months, the report said.