Hurricane Woes Give Way to Lower Sales at Stein Mart

By Mark Basch, The Florida Times-Union, Jacksonville

Oct. 7–Stein Mart Inc. Thursday reported lower September sales, as store closings from several hurricanes kept customers away.

But in addition to store closings, apparel stores nationally were affected by sagging consumer confidence.

As stores reported their monthly sales figures Thursday, discounters including Wal-Mart Stores Inc. and Target Corp. posted strong numbers, helped in part by increased demand of supplies like bottled water and batteries as shoppers dealt with the physical and emotional aftermath of hurricanes Katrina and Rita. But many mall-based apparel retailers, including Limited Brands Inc., Gap Inc., Ann Taylor Corp. and Talbots Inc., suffered.

Ken Perkins, president of RetailMetrics LLC, a research firm in Swampscott, Mass., noted, “consumers were spending on essential items in September and were forgoing nonessential purchases.”

Jacksonville-based Stein Mart said total sales at its 261 fashion stores fell $3.1 million to $125.6 million, or 2.4 percent, for the five weeks ended Oct. 1. Comparable store sales dropped 3.9 percent.

Stein Mart said two stores in New Orleans and one in Lake Charles, La., remain closed after Hurricane Katrina. But it wasn’t just that storm that affected its operations. The combination of Hurricanes Katrina, Ophelia and Rita caused 41 stores in several states to be closed for a total of 289 days.

The company estimates it lost $3.5 million in sales due to storm-related closings, but it also expects to receive insurance compensation for much of its storm-related losses.

“The hurricane activity which began in late August substantially disrupted our September business, but we are grateful that our associates are accounted for and that most of our stores reopened soon after essential services were restored,” said a statement by President and Chief Executive Michael Fisher.

“Although we were disappointed with sales across the country during September, our customers are responding favorably to the new fall merchandise,” he said.

Because of the sales drop in September, Stein Mart Thursday lowered its third-quarter earnings forecast. After previously estimating earnings of between 3 cents and 5 cents a share for the quarter ending Oct. 29, Stein Mart now projects earnings to be flat or possibly up to 2 cents a share.

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