Hurricanes Put Target, Best Buy to the Test

By Thomas Lee
Star Tribune
October 28, 2005

NEW ORLEANS - There was good news and bad news waiting for Mike Delk, a store manager for Minneapolis-based Target Corp., after Hurricane Katrina swept through the Gulf Coast in August.

Despite the widespread devastation in Slidell, a suburb north of New Orleans near Lake Pontchartrain, Delk's store had little damage. But Delk had no staff: The storm had scattered his employees throughout the region and there was no way of telling when or whether they would be back. He also had a new, artificially short workday to get his store ready for business again, thanks to the 6 p.m. to 8 a.m. curfew enacted by local authorities trying to stem looting.

To find workers, Delk wound up canvassing hotels, restaurants and other businesses that weren't about to reopen anytime soon.

"The biggest challenge was obviously staffing," said Delk, a four-year Target veteran. "Once we opened the store, people started to trickle back."

For Target and Richfield-based Best Buy Co. Inc., doing business in the hurricane-swept Gulf Coast region this summer turned into an ongoing exercise in crisis management. The wind damage, flooding, looting and mass evacuations were just the start, with the aftermath of the storms proving every bit as challenging. From reopening damaged stores to finding displaced workers (or any worker), the events in Louisiana and Mississippi will serve as the ultimate case study on how retailers can cope with natural disasters, company executives say.

For instance, retailers set up websites and telephone hot lines to reach displaced workers. With phone lines down and cell-phone service spotty, companies turned to mobile devices such as Blackberries and text-messagers.

The retailers also provided temporary shelter and money to returning employees while finding new workers on the fly.

"We learned a lot from Katrina and [Hurricane] Rita," said Paula Prahl, vice president of public affairs for Best Buy. "No one disaster is the same as the last one. We are constantly changing, improving ourselves. We feel a lot better today than a day and a half after Katrina."

The hurricanes "rewrote the books on safety response," Target's Delk said.

Today, all but one of the Target stores shut down by Katrina and Rita are open.

The 12 Best Buy stores affected by Katrina in New Orleans all are in business again, too, though four remain on reduced hours.

(Target said seven stores remained closed in Florida because of Hurricane Wilma, which struck that state Monday.

Best Buy said seven stores, a distribution center and a service center are closed in Florida.)

Winford Figaro, a Best Buy district manager, said his store in Harvey, La., got lucky. After Katrina, looters burned down a nearby mall. Fortunately, the police brought in to stop the looters used the area outside the Best Buy as a makeshift base.

"If the looters got in, we would probably be down until Christmas," Figaro said.

Target and Best Buy officials said they needed to provide workers with emergency money and temporary housing before they could even think of getting them back to their jobs.

Target, for instance, provided Delk, who lost his entire home, with a free furnished apartment.

One lesson Best Buy learned from Katrina was the need for an employee assistance fund that could quickly distribute money to workers for short-term needs such as food and clothing, Prahl said.

Because Katrina displaced so many people, both retailers had to cope with a severe shortage of labor, a problem shared by seemingly every business in New Orleans. Across the region, "Now Hiring" signs have become as ubiquitous as the abandoned cars and refrigerators that litter yards and roadsides. Desperate for workers, Burger King even offered $3,000 bonuses for part-time employees.

Best Buy and Target officials said they offered no such incentives.

Figaro said a man once approached him outside a Best Buy store and offered him $20 to help remove debris from a house.

"There's hiring everywhere," said Esther Icaza, an 18-year-old Harvey resident who recently started work at Best Buy.

"There's tons of help-wanted signs. It's incredible."

Icaza lost her job at S&J Boutique when looters burned down the mall.

Since Katrina, Best Buy has hired 447 new employees in the Gulf Coast region, including 225 in Louisiana.

Of the 112 employees at the Target store in Slidell, about 45 percent are new hires, Delk said. And Delk said he still is short 20 workers.

Once the Best Buy store in Harvey reopened, Figaro said he kept store hours at noon to 4 p.m. to help ease workers back into the job.

"People have enough stress outside of work," he said.

"They don't need stress at work. Even if we opened the store at normal hours, employees would not have been able to fully engage the customers. We've got to be a couple of steps ahead."

By contrast, it was crucial for Target to return to full operation as quickly as possible, Delk said.

The store was up and running in two weeks.

"People come to work to get their minds off things," he said. "It's a comfort to them. It gives them normalcy. ... I was clawing at the bit to come back. It was the biggest therapy just to get the store back open."