Oct 25, 2007

Retail suffers as California wildfires burnBy Alexandria SageNews.Yahoo.com

Los Angeles (Reuters) – Wildfires in Southern California are exacerbating a difficult retail environment in a state already hit by declining home sales and mortgage woes that have cut into consumer spending.

With about 500,000 people evacuated, 1,600 homes destroyed, and roads closed as some 20 fires blazed at the height of this week’s catastrophe, Southern California has certainly not been focused this week on shopping at the mall.

Liz Pierce, a Newport Beach-based analyst at Roth Capital Partners, said that with California making up as much as 10 percent of the total store base at certain national retailers, even a short-term sales drop can hurt.

“For lot of companies, California is a big state. It can’t be a good thing,” Pierce said. “People will say, ‘I don’t feel like buying, if anything I should be donating money.”‘

Besides the obvious slow-down in traffic to shopping centers — one major mall in the San Diego area owned by Westfield Group (WDC.AX) was shuttered for three days and two others were used as staging areas for emergency services — the fires have disrupted business at various Southern California-based companies.

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