Snowed Under Airlines, Retailers Face Big Cost From Blizzard

As Easterners shoveled, blew and melted away snow left behind by the Blizzard of ‘96, the storm’s toll on retailers, airline companies and others started to become clear.

Sales lost to shuttered department stores and grounded jumbo jets ran into millions - perhaps hundreds of millions - of dollars and it was unclear Tuesday how much could be made up. Work left undone by snow-bound employees hurt companies large and small.

While some businesses benefited, like tow-truck operators and snowblower providers, most did not. The vastness of the area blanketed by the storm made certain the figures would be staggering.

“In economic terms, given the size of the economy, I think it’ll be kind of an eye-popping number in the end,” said Jeff Schmidt, managing principal at the consulting firm Towers Perrin.

“But in terms of the economic health of the companies involved, I don’t think anybody’s going to go bankrupt over this.”

Small retailers, huge department stores, major airline companies and others shut their doors in large numbers Monday as the blizzard’s howling winds and heavy snow made travel difficult. While conditions eased Tuesday, many desks remained empty.

The impact on business was expected to be heaviest at places where customers might not postpone purchases but cancel them altogether, like bars, restaurants and movie theaters.

Big department stores and other retailers were a slightly different story as customers could simply put off their purchases.

“The net of it is that it will hurt business,” said Wayne Hood, a retail analyst at Prudential Securities Inc. “I would characterize it as hundreds of millions of dollars.”

Macy’s, for example, shut 47 of its 67 stores Monday.

Coming off a dismal Christmas selling season, lost business stands to hurt retailers as they try to sell off winter items. On the other hand, such goods are not highly profitable and January is typically an unimportant month for the bottom line.

Airlines face huge costs as they struggle to restore normal service.

“They’d be one of the worst hit, the airlines,” said Lee Howard, president of Airline Economics International Inc., a consulting firm. He estimated lost revenue would mount into the millions of dollars.

Passengers stranded by the storm needed to be flown home, at no additional cost. Some who had booked outgoing flights simply canceled their plans. Meanwhile, airlines continued paying their aircraft leases, facilities fees and the like.

“What you have is companies forced to put money into restoration of service without showing any additional output,” said Audrey Freedman, president of the consulting firm Audrey Freedman & Associates.