Eileen Fisher stores rebound from Sandy’s battering
For Eileen Fisher, started by Fisher in 1984, the storm was the biggest blow to operations ever. It decimated a store and closed her headquarters, her Manhattan design center and her warehouse in Secaucus, N.J. For smaller retailers — Eileen Fisher expects about $350 million in revenue this ye
The New York Times
IRVINGTON, N.Y. — Eileen Fisher had no time to spare. For her clothing stores to be up and running for Thanksgiving weekend, and her many retail clients stocked for the holiday rush, her company’s response to Hurricane Sandy would need to be close to flawless.
And it was.
All but one of the company’s 58 stores are open, and retailers such as Nordstrom and Bloomingdale’s have Fisher’s latest designs on their racks. On a recent afternoon, aside from its cramped quarters, there was no sign of the storm on the second floor of the Eileen Fisher headquarters here, 20 miles north of Manhattan. Phones were ringing, online orders were being processed and Fisher was at her desk.
But step downstairs, where work crews were sawing off the bottom part of walls, removing mold-ridden desks and pulling up drenched carpet, and the magnitude of the last month’s miracle was hard to dismiss.
“It was a mess,” Fisher said. “I couldn’t believe it.”
Hurricane Sandy hurt retailers large and small. It closed airports, ports and roads, jamming merchandise at critical shipping times. More than a third of stores in the Northeast closed for at least a day, according to the research firm RetailNext. Macy’s has said that the storm delayed sales. Target said November started off choppily, and a Kohl’s store in Brooklyn will be closed at least through January.
For Eileen Fisher, started by Fisher in 1984, the storm was the biggest blow to operations ever. It decimated a store here and closed her headquarters, her Manhattan design center and her warehouse in Secaucus, N.J. For smaller retailers — Eileen Fisher expects about $350 million in revenue this year — a week or two of closed offices, stores and warehouses in early November could be ruinous.
Recovery was both an urgent and daunting task. A broad insurance policy helped a lot. So did some planning and a good amount of luck. As did an almost out-of-body detachment on executives’ parts to see past the emotion of sewage-soaked shirts and stained rolls of fabric to the prize of reopening a ravaged business.
Even the cash in the register at the Irvington store had to be taken home and blown dry. Almost $1.5 million, 12 Dumpsters and eight moving-truck-size mobile storage units of damaged goods later, Eileen Fisher was — for the most part — back.
“It was just stuff,” Fisher said.
Fisher moved her headquarters to Irvington 20 years ago, choosing a brick building that was just a couple of yards from the Hudson River. It reminded her of the TriBeCa location where she had started the business, she said, and who doesn’t get inspiration from water?
Now that inspiration had become a liability. On a recent sunny day, the Hudson seemed calm and threatless, a cool gray-brown river about 10 feet below its banks. But on the night of the storm, the river rose over a barrier and stampeded north, churning through buildings “like a washing machine,” said Peter Joslin, the company’s facilities manager.
From her hillside home in Irvington Tuesday morning, Fisher was feeling relieved. She hadn’t even lost power. She asked a household assistant to walk down to headquarters and look inside. He called her from his cellphone as he peeked through the windows, and reported that there was no water.
Joslin was hearing a different story. He called a representative from the building’s property-management company. The water had gone past the train tracks, which are uphill from the Eileen Fisher offices. Joslin ran to his car. As he sped up to Irvington from a few towns away, he called the remediation firm and told it to make good on that two-hour promise.
He went to the store first. Fisher’s pet project, it was 4,000 square feet of space where, along with selling merchandise, she held classes, invited neighbors to events like ballroom dancing and tried out new efforts like recycling old clothing. Pulling into the parking lot, Joslin saw Eileen Fisher scarves strewed about in the mud. A giant plate-glass window at the front of the store had been blown out.
When he stepped inside, everything started to feel like a scene from Alice in Wonderland — moved, changed, unsettled.
The window had landed on a giant, expensive red couch that the water had pushed to the middle of the store. A 150-pound bench had been plopped down about 50 yards from its door-front location. A refrigerator lay in the middle of the sales floor. Skeins of unspooled wool were shriveled and lying all over. The giant air-conditioning units were dead. “Everything was muddy,” Joslin said.
Next was the headquarters building. Joslin went on foot. Fisher’s assistant had seen a building without water because the water had receded. There had been a small fire in the computer room when the battery backup failed. The elevator was ruined. Copy machines and two of the company’s three pattern plotters had been submerged. The wood trim on doorways and around desks was starting to swell and split.
On one side of the building, the water had gone nine inches high and hadn’t flooded the outlets. On the other side, it rose to 30 inches and killed all the wiring, cable and telephone lines.
Joslin called in the facilities employees who lived close enough to drive. One showed up in flip-flops. Joslin sent him home to get working shoes and a camera.
“We were just kind of in awe,” Joslin said.
The remediation firm arrived at noon on Tuesday. Joslin asked the moving company to take away high-value items that were damaged, and, a day later, called in Dumpsters and mobile storage units to hold ruined items (one lesson he learned last year from Hurricane Irene was not to throw anything out until the insurance company had seen it.)
An executive assistant who had wandered down to headquarters to check out the damage saw Joslin and grabbed him. The executives who couldn’t get to Irvington were going to be on a conference call in Manhattan. Joslin needed to call in.
As he dialed in, the chief financial officer, Ken Pollak, was thinking about insurance: The company had broad coverage, but would a second flood in a year mean premiums would shoot up?
In Irvington, Shari Simberkoff, the director of human resources, was trying to find out if all the employees were safe, and what the company’s policy was for paying people if it was closed down for weeks.
Anthony Lorusso, the head of sales, was thinking over which shipments were in trouble, while Karen Gray, the head of retail, was finding out about store closings. And, stuck without power in New Jersey, Peter Scavuzzo, the director of architecture, was looking with alarm at a photo the building’s landlord had sent him early that morning. It showed a 4-foot-high watermark.
Many on the call were having trouble understanding how bad the damage was. “I said, imagine on one side of the building, it’s two file cabinet drawers high, and on the other side, it’s one file cabinet drawer high, and there’s mud everywhere,” Joslin finally said.
That did the trick.
On Wednesday, Oct. 31, executives gathered at Pollak’s Manhattan apartment to figure out how to get the headquarters back up and running for its 150 workers.
The storm had wiped out about 125 desks. A small second story, where human resources and a yoga room were located, needed to be rejiggered to handle extra people. Executives called business partners, like the cutting factory in Long Island City and the sewing factory in the garment district, to see if they could provide temporary space.
The executives carpooled to Irvington on Thursday, Nov. 1, and under the direction of the remediation firm, put on gloves and masks and joined the cleanup.
The Secaucus warehouse opened Nov. 1, with a backlog of 1,500 e-commerce orders. Because the items shipped from Asia were still stuck at the ports, the employees who usually worked on unloading were rerouted to filling e-commerce orders, and with an overnight shift, they were caught up by Friday.
The merchandise finally arrived on Monday, Nov. 5, a week late, but Lorusso said the retailers did not charge extra. Over the weekend, the last of the closed stores — except for the store in Irvington, which will be closed at least through February — reopened. By Nov. 5, most employees reported for work.
Dressed in loose layers of gray, a sweater over a tunic over leggings with a scarf, Fisher took a moment last week to tour her resuscitated company.
“It was all so beautiful,” she said, walking past the headquarter’s once grand entrance. As she walked upstairs, to the second floor, loud and active and crammed with people and garment racks, her mood lifted. “It does remind me of the early days of the company, all crowded in and cozy and funky,” she said.
Financially, Pollak said, the storm was tough but not devastating. Eileen Fisher asked for a $500,000 advance from the insurance company, but the cash-flow-heavy holiday season meant it had money to pay for immediate repairs. He expects the total loss to be around $2 million, and found out this week that the insurance claim must be capped at $1.5 million.
Pollak said the bigger unknown was consumers. There was $350,000 in lost sales from the closed stores. There was also a 30 percent drop in sales in the Northeast from a year earlier the week of the storm.
“There’s the direct effect of the store being closed, and then the aftereffect, which is very hard to estimate on spending patterns and mood to shop,” Pollak said.
Given its riverfront location, the company is already planning for the next time. Floors are being finished without carpets. Schavuzzo, the architecture director, wants to raise file cabinets off the floor, put desks on metal legs rather than on wooden panels and is even researching merchandise racks that could be raised in case of a storm.
“Do we renovate? Of course we renovate,” Fisher said. “But what if it happens again, next year and the year after?”