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Katrina's Aftermath

8 Sep, 2005 By: Kurt Indvik

More than a week after Hurricane Katrina hit, some home entertainment retailers in the outlying areas were able to get back on their feet. But the long-term impact for local businesses and the home entertainment industry overall is sure to be significant.

According to NPD VideoWatch, Louisiana, Mississippi and Alabama together accounted for 3.9 percent of in-store rental revenue and 3.7 percent of rented units in second-quarter 2005. Some 2.4 percent of online subscription rental units were generated from the region. Sales estimates for the affected region were not available by press time.

Meanwhile, messages began arriving early last week from video retailers on the special Hurricane Katrina discussion board set up on the Independent Dealers of Entertainment Association's (iDEA) Web site.

“Just want to let you know that everything is OK at my store,” said Thomas Daly of Movie World, Crowley, La. “Katrina barely missed us. We are open for business!”

Others in Alabama and Louisiana reported that power was restored to their areas, and things were returning to a somewhat normal state.

But not so for others closer to the hardest-hit areas. Russell Williams of Hollywood Video and Pizza in Bayou La Batre, Ala., said his store narrowly avoided the city's 7 to 15 feet of floodwaters that destroyed many homes and businesses and washed local shrimp boats a half mile onto shore.

“We are some of the few video stores along the coast that will be opening … soon,” he wrote. “Some will never open again. It will be six to 12 months before we will see our business return to normal. Some of my roof was blown off.”

iDEA, the independent stores arm of the Video Software Dealers Association (VSDA), has set up a Katrina Task Force to see how the group can help its members.

About 140 VSDA and iDEA members have been affected by the storm.

“The Katrina Task Force's mission will be to evaluate the many options we (iDEA) have to help our fellow retailers in this unbelievable situation,” said Jim Loperfido, chairman of iDEA's board of trustees. iDEA members Terri Schumacher and Adrian Hickman will head the task force.

Blockbuster Inc. said that almost two dozen of its stores closed by the storm have been reopened. Still, some 34 stores in Mississippi and Alabama and at least four franchise operations remain closed, said spokesperson Randy Hargrove.

“We continue to evaluate the situation every day, and we're doing everything we can to open stores where possible and assist our employees in the affected areas,” he said.

The company has set up communications centers in the region surrounding the hurricane impact area to help displaced employees with information on getting paychecks and benefits, and, if possible, joining the staffs of other Blockbuster stores.

No new information was available from Movie Gallery regarding the status of Movie Gallery or Hollywood Video stores in the region. There are more than 300 stores for the combined chain in Louisiana, Mississippi and Alabama, where the chain is based in Dothan.

Best Buy initially had 15 stores affected by the storm, but as of midweek last week six stores remained closed, according to a spokesperson. The company has mobilized a number of resources for employees affected by the storm, including arranging for temporary housing, food and medical treatment, as well as cash advances and other financial assistance. Employees in stores closed by the storm will continue to be paid for 30 days, and the company also is arranging for employees to earn pay by working in stores in areas where they relocated.

Through a matching fund effort with employees, Best Buy has contributed $2 million so far to the Red Cross for hurricane relief.

As of Sept. 6, Wal-Mart reported that of the 126 facilities originally shut down by the storm, 17 remained closed. Of the 89 stores reporting damage, nine have major damage. The retail giant said it has already provided financial assistance to 6,100 employees and is arranging for displaced employees to earn income at other Wal-Mart locations where possible.

Wal-Mart was highly visible in the immediate aftermath of the hurricane, delivering 1,900 trailer loads of water and emergency supplies to affected areas, according to the company, and has donated $15 million to the Bush-Clinton Katrina Fund, and $1 million each to the American Red Cross and the Salvation Army.

Meanwhile other support coming from related entertainment firms included $50,000 to the Red Cross from Trans World Entertainment, $100,000 to the Red Cross from Scholastic, and from the Steven Spielberg family, $750,000 each to the Red Cross and the Bush-Clinton Katrina Fund.

Shout Factory will donate to the Red Cross all profits from Web sales of its four-CD boxed set Doctors, Professors, Kings & Queens: The Big 'Ol Box of New Orleans through the end of 2005.

Additional reporting by Holly J. Wagner

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