Retailer Winn-Dixie has announced that 102 of the 125 stores in its New Orleans operating region are open for business, in an update on progress following the impact of hurricane Katrina.
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The operating region includes the New Orleans, Mobile-Pensacola, Baton Rouge, Panama City, Lafayette, Biloxi-Gulfport, Hattiesburg-Laurel, and Meridian designated market areas.
President and CEO Peter Lynch thanked all of the company’s associates for their efforts in helping individuals affected by the hurricane and getting Winn-Dixie’s stores back up and running, the company said.
Winn-Dixie has 125 ongoing operating stores in its New Orleans Region, all of which were impacted by Hurricane Katrina. As of Friday, 102 of those stores, or 82%, were open for business. The company is working to re-open additional stores and currently expects to re-open substantially all of the 23 stores that remain closed, it said.
The timing for doing so is being determined on a store-by-store basis, taking into account, among other things, damage assessments and repairs, the rebuilding of local infrastructure and the return of the region’s population. At this time, the company estimates that eight of the stores that remain closed may be opened within approximately six weeks, while another three may re-open within approximately four months.
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By GlobalDataThe company has not yet been able to establish a timeline for re-opening the remaining 12 stores, which, because they are located in Orleans and St. Bernard’s Parishes, have not been fully assessed by the company.
The company’s Hammond, Louisiana, distribution centre served as a shelter for many of the its associates during the storm and has continued to operate uninterrupted after the storm. The centre initially utilized generator power, but had full utility power restored shortly after the storm. It continues to meet the needs of the stores it serves.
“I am truly proud of the way our associates have responded in the wake of hurricane Katrina,” Lynch said. “In many places, Winn-Dixie stores were the first to open their doors to support their local communities. We are in good supply on water, ice, charcoal and other essentials, and our team is working hard to keep our shelves stocked despite disruptions in deliveries from some of our vendors. I would like to thank all of our associates for responding as they have and taking care of our local communities.”
The company noted that since the storm hit two-and-a-half weeks ago, sales levels in the New Orleans operating region are within 1% of sales levels in the five-week period immediately preceding the hurricane. Sales increases in the stores that are open are substantially compensating for the lost sales in the stores that are currently closed because of storm damage.
The company’s insurance for named windstorms and floods covers losses resulting from inventory damage, property damage, power outages, preparation and cleanup expenses and civil authority closings, and also includes business interruption coverage. The company expects to be fully covered for losses due to hurricane Katrina in excess of its $10m annual windstorm and $5m annual flood insurance deductibles. The impact of property and inventory losses related to the hurricane, which may exceed $100m, is not expected to have an adverse effect on earnings in the current or future quarters due to insurance recoveries expected in excess of out-of-pocket costs. Expenditures on storm damage repair and replenishment of inventory, however, are expected to generally be required in advance of the receipt of insurance proceeds, which will negatively impact company liquidity. The company is preparing its claim for business interruption and other loss coverage.
