DALLAS — With Hurricane Rita churning across the Gulf of Mexico, retailers along the Texas coast and southwestern Louisiana braced for short- and long-term sales losses and damage from punishing wind, rain and flooding.
Major retailers, such as Wal-Mart, J.C. Penney, Saks Fifth Avenue, Macy’s, Dillard’s and Foley’s, shut as the storm appeared to track east late Thursday, which would spare Houston and nearby Galveston a direct hit. An estimated 1.8 million people were ordered to evacuate. Some highways in the region were at a virtual standstill, transportation terminals were overwhelmed and gas supplies were spotty.
Rita was downgraded to a Category 4 from a Category 5 hurricane, though still packing winds of 140 mph to 150 mph. Forecasters, acknowledging that the projected path of the storm may change again before it makes landfall tonight or early Saturday, said it might come ashore near Port Arthur, Tex., or Lake Charles, La., about 60 miles east of the Houston area.
“There’s a huge potential for both short- and long-term economic damage to south Texas and the entire country,” said Dr. Bernard Weinstein, director of the center for economic development and research at the University of North Texas.
“In the Houston area, Hurricane Rita could impact retail sales initially when it strikes, for sure, but the bigger impact could come in the following months, especially through the important holiday shopping season,” Weinstein said. “If people’s jobs are lost or paychecks affected by Rita, there won’t be a lot of money left over for shopping. In the bigger picture, over 25 percent of the nation’s refinery capacity is located in the Texas and Gulf Coast region, and there are several huge shipping ports throughout the area, as well, that could sustain major damage.”
Houston, the nation’s fourth-largest city with 4.1 million residents, has a $70 billion retail industry.
Wal-Mart said on Thursday afternoon that 23 stores and distribution centers had been closed in anticipation of the hurricane, with 64 more units likely to be closed by the end of the day. The world’s largest retailer said it shipped 154 trailers carrying 620,000 gallons of water in preparation for Rita, with 24 generators set up near Sealy, Tex., near Houston.
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J.C. Penney Co. closed 12 stores in Texas and four in Louisiana, said spokeswoman Brenda Romero.
Malls across the region, including the Houston Galleria, home to Neiman Marcus, Macy’s, Saks Fifth Avenue, Christian Dior and Louis Vuitton, were shut, and it wasn’t certain when they would reopen. Billie Scott, director of public relations for Simon Property, owner of the Galleria, declined to address the financial impact.
General Growth Properties closed The Woodlands, Baybrook, Willowbrook, Deerbrook and First Colony Malls. “The malls were pretty empty [before closing], although there was one woman who really wanted to get her nails done before she sat in traffic and headed out of Houston,” said company spokeswoman Mary Evans.
Federated Department Stores said the 16 Foley’s units in the Houston area did not open Thursday, and neither did two other Foley’s in Beaumont and Corpus Christi.
“They will be closed at least through Saturday and Sunday morning when there will be a determination of what the next step is,” a spokeswoman said.
Houston’s Saks Fifth Avenue closed at 6 p.m. Wednesday and “will remain closed until we know the outcome,” said Julia Bentley, Saks Inc.’s senior vice president of investor relations and communications.
Dillard’s has “17 stores closed in the target area of the hurricane — that includes 12 in Houston, and others in Beaumont, Port Arthur and Texas City,” said Julie Bull, director of investor relations.
— With contributions from Heather Staible, Houston, and David Moin, New York