The story of two retailers in the aftermath of Sept. 11 - J&R Music and Computer World and Lechters struggle after terrorist attacks - Brief Article

DSN Retailing Today, Nov 5, 2001 by Tony Lisanti

The tragic events of Sept. 11 have certainly impacted the retail industry both directly and indirectly as one retailer that was damaged that tragic day reopened two weeks ago, while another chain announced it would close its doors forever.

J&R Music and Computer World, the destination electronics store located on Park Row just a few blocks from Ground Zero, tries to bounce back after suffering several million dollars in damage. The store was engulfed in the black smoke and debris following the collapse, and was further damaged when rescue workers set up a triage that was never used.

For 30 years, this family-owned business has thrived, and now it looks to survive in the aftermath of the terrorist attacks that have decimated a bustling, densely populated neighborhood. With an estimated $300 million in annual sales, J&R Music also faces the challenge of a highly competitive electronics market as industry leader Best Buy continues to expand in New York City.

Meanwhile, across the Hudson River in Harrison, N.J., Lechters, the struggling 315-unit housewares chain that had filed Chapter 11 in May, announced it was shutting down. There's little doubt that Lechters faced a multitude of challenges to its core business, but the events of Sept. 11 obviously accelerated its decision to cease operations. It's possible that if the chain experienced a solid holiday season and other retailers continued to thrive, there might have been an interested buyer. Or perhaps Lechters could have continued to implement its reorganizational plan and at some point in 2002 emerge from Chapter 11 as a viable regional chain.

Instead, the retailer is promoting going-out-of-business sales, and its competitors are ready to gobble up a piece of its $300 million in annual sales.

These are just two examples of how Sept. 11 has impacted the retail industry. And these two examples also raise many yet-unanswered questions so many retailers will face in the coming year, including will the economy rebound and will consumers regain confidence?

As Sept. 11 has made this nation more conscientious about security issues, it has also forced retailers to re-evaluate every aspect of their businesses. And maybe it will result in more efficiently run companies that will be better positioned for long-term growth.

In an editorial last January, I wrote that 2001 would be a "status quo" year, and it's likely that 2002 will be as well. In addition, 2002 will be a "back to basics" year.

Retailers will focus on the fundamentals of retailing, such as customer service, value, price and inventory management. New formats, aggressive expansion and the like will be limited as retailers look to control expenses and improve profitability.

Sept. 11 has changed America, and it's reverberating throughout the retailing industry.