News Column

Business Impact of Sandy Yet to Be Seen

Nov. 1, 2012

Arielle Kass, The Atlanta Journal-Constitution

Hurricane Sandy hit far from Georgia, but companies based metro Atlanta will still feel the impact of the storm -- both good and bad.

It will be some time, though, before the full effects are known.

Claims management company Crawford started deploying teams to the affected areas over the weekend, president and CEO Jeffrey Bowman said. The company handles claims for insurance carriers on a fee basis and expects to pick up more work in the next five to seven days, Bowman said.

Home Depot often sees a surge of business after a storm. People buy generators, flashlights, sump pumps and chain saws as they deal with power outages, flooding and fallen trees. The company's stock price was up 2.23 percent Wednesday.

The company closed 44 stores Tuesday because they were in areas hit by the storm, but only two New York stores remained closed Wednesday. Home Depot spokeswoman Paula Drake said those stores were closed because of issues with power. Damage to stores was minimal.

Jo Ann Herold, a spokeswoman for Arby's Group, said the company closed some stores in New York and New Jersey, but most were back in operation by Wednesday. She did not immediately have exact numbers of how many stores closed or if they suffered damage.

At Coca-Cola, the storm's impact was minimal. While some facilities are closed, the company is still making deliveries.

The rent-to-own furniture store Aaron's kept five stores in New Jersey closed Wednesday, and chief operating officer Ken Butler said the storm is a "huge business interruption" for the company.

Butler said he expects Aaron's will lose some inventory, as customers will not have to pay for items that were damaged in the storm.

"There's no financial windfall for us," he said. "We're going to have losses."

The storm is expected to have a multi-million dollar impact on airlines. Atlanta-based Delta Air Lines, which has a hub at New York's John F. Kennedy International Airport and is building a domestic hub at New York La Guardia, canceled about 3,500 of its flights from Sunday night through Wednesday.

Meanwhile, Southwest Airlines and its subsidiary AirTran Airways canceled more than 1,750 flights from Sunday evening through midday Wednesday.

Airlines allowed affected customers to change their travel plans without penalty and provided the option of a refund if flights were canceled due to weather.

In a report to investors, Buckingham Research Group analyst Daniel McKenzie gave an initial estimate that, in the near term, Sandy will have an earnings impact of $25 million to $45 million per airline. The fact that October is a seasonally slow time for airline travel will help with operational recovery, according to McKenzie.

UPS does not have to refund money paid for guaranteed delivery times, spokeswoman Susan Rosenberg said. Four facilities in New Jersey and New York were closed Wednesday and packages were moved elsewhere.

UPS was not making residential deliveries to a number of ZIP codes in New Jersey, New York and West Virginia on Wednesday, Rosenberg said, but was working with business customers to deliver to alternate locations.

Southern Company has 2,000 people helping utilities in the mid-Atlantic and Northeast restore electricity. The company sent linemen from its utilities in Alabama, Florida, Georgia and Mississippi.

Conditions also have made it tough for wireless companies including Atlanta-based AT&T; Mobility to restore cell sites in New York City and parts of New Jersey. Most of the wireless company's cell sites are working, however, a spokesman said.

Reporters Leon Stafford, Kristi E. Swartz and Kelly Yamanouchi contributed to this article



Source: (c)2012 The Atlanta Journal-Constitution (Atlanta, Ga.) Distributed by MCT Information Services