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Rita shutters 150 Wal-Mart stores

Hurricane Rita has shut down 150 Wal-Mart stores and 46 Home Depot stores, the companies reported early Saturday. Target reports mandatory evacuation orders has forced the company to close 36 stores in the Gulf Coast region.
/ Source: The Associated Press

Wal-Mart Stores Inc., the nation’s largest retailer, said Saturday that Hurricane Rita forced the closure of 150 of its facilities, including 120 of its branded stores, in Texas and Louisiana.

That amounted to about 4 percent of Wal-Mart total facilities in the United States, according to Wal-Mart spokesman Dan Fogleman, who said the company is planning to move truck-based generators to facilities that lost electric service.

Home Depot Inc., the nation’s largest home improvement retailer, also reported that 46 of its stores were closed early Saturday, including 41 in the Houston market. But by late in the day it had reopened 18 of the stores in the Houston area, which escaped the brunt of Rita’s effects.

Spokesman Don Harrison said Home Depot has over one hundred trucks ready to bring additional supplies to stricken areas. Typically, the retailer sees increased purchases of generators, chain saws, gas cans, tarpaulin, cleaning supplies and grills for cooking after a hurricane has passed and the cleanup process begins.

Wal-Mart spokesman Marty Heires said that as of Saturday afternoon the retailer was still assessing damage in the area impacted by Rita. “We don’t expect a lot of damage in Houston but we will need to wait for the return of our associates. We’ll need to replenish the merchandise in those stores,” he said.

Target Corp. said 36 of its stores were closed in the Gulf Coast region, all because of mandatory evacuation orders. Spokeswoman Carolyn Brookter said that includes one New Orleans store has been closed since Hurricane Katrina hit.

Target distribution centers in the region have not been affected, she said, and they are sending goods to other stores where evacuees have fled, such as Dallas.

Overall, Rita is unlikely to be a “major drag” on retail sales nationwide, although it will impact retailers with a high concentration in the Houston area, said Scott Krugman, spokesman for the National Retail Federation.

Krugman said most of the regional spending in the days immediately after the storm will be on basic necessities and this will benefit home improvement stores, grocers, drug stores as well as discounters that sell food. He warned there may be a drop off in sales at department stores and consumer electronics retailers.

“People might not be focusing so much on fall lines and updating their fall wardrobes,” Krugman said. He cautioned that the longer retailers remain closed the more they will have to discount seasonal merchandise.

Even with the store closures, Wal-Mart reaffirmed its estimate that sales at stores open more than a year, known as same-store sales, should rise between 2 percent and 4 percent in September. The company said it saw higher-than-expected sales at its Sam’s Club division due to increased gasoline prices. But, Wal-Mart said this would not result in an increased operating profit.

Preparations for Hurricane Rita helped drive up sales of canned foods, water, candles, batteries, flashlights and lanterns, Wal-Mart said.

Eighty-five of the 120 Wal-Mart branded stores closed by Rita are Wal-Mart Supercenters. Another 25 Sam’s Club locations and five distribution centers also were closed on Saturday.

Meanwhile, another 12 Wal-Mart facilities in Mississippi and Louisiana remain closed due to damages from Hurricane Katrina nearly four weeks ago. They include 7 Wal-Mart Supercenters, 3 Sam’s Clubs and 2 discount stores. After Katrina struck the Gulf Coast, as many as 126 Wal-Mart facilities were closed.