U.S. jewelry industry responds to Katrina’s devastation

Hurricane Katrina, the costliest natural disaster in American history, has wreaked destruction, economic havoc, and personal grief on jewelry businesses in Louisiana, Mississippi, Alabama, and the panhandle of Florida.

A few jewelry industry organizations and companies—including IJO, the Illinois Jewelers Assocation, Stuller Inc., Jewelers Mutual and Jewelers of America (JA)—as well as individual jewelers offering shelter to the homeless are already responding with help to their beleaguered colleagues along the Gulf Coast.

Losses for the region will be in the billions, say state and federal officials and insurers. Many jewelers’ businesses are under water, destroyed, or damaged from gale-force winds, flooding, and, in some cases, looting. The homes of many jewelers and their employees also suffered damage or destruction.

“Our city is devastated and may never be the same. We are unsure about the future of our business,” said a New Orleans jeweler in a private Sept. 1 e-mail to the Independent Jewelers Organization (IJO).

The greatest cost is the human toll. “Our main concern is for our people,” said David H. Sternblitz, vice president and treasurer of Zale Corp., the country’s largest jewelry retailer with 25 to 35 stores in the impacted Gulf area. “Information is difficult to get. We’re still trying to make contact with some of our store associates. That is definitely our focus right now.” At press time, there were no reports of fatalities among jewelers or staff, but a number were still missing or couldn’t be reached four days after the storm had passed, in part because of the collapse of the regional communications networks.

“Everyone in our company has or knows someone who’s lost their home or business, or who can’t be contacted,” said Matt Stuller, chief executive officer of Stuller Inc., in Lafayette, La. “Many don’t know what has happened to family members. The feeling of stress is incredible.” Stuller’s own assistants “still hadn’t found or heard from” close relatives three days after the storm.

Meanwhile, a few organizations and companies are already responding with help to their beleaguered colleagues along the Gulf Coast.

Initial costs and aid. Initial media reports put all insured losses on the devastated Gulf Coast at upwards of $15 billion. For jewelry businesses specifically, it will be at least mid-September—if not longer—before insurance adjusters and business owners will be allowed into devastated areas to make reliable loss estimates, says Ron Harder, president of Jewelers Mutual, the only U.S. company exclusively insuring the jewelry industry. The company has some 500 policyholders in the region.

Harder advised patience. “I know people are concerned about their property there, but until we and other insurers can get in there and assess the damage, there’s nothing we can do.”

Harder believes this will be the most costly disaster in Jewelers Mutual’s 93-year history. “In view of what we’re seeing and hearing, we expect some significant claims,” he said, adding that the total payout would far exceed the $3.5 million the company paid out in the wake of 2004’s hurricane losses in Florida.

Some in the jewelry industry are already responding with financial and personal support:

* The Independent Jewelers Organization donated $5,000 to set up a relief fund for members in the Gulf Coast area to which IJO jewelers, suppliers, and manufacturers can donate. In addition, IJO members are calling and e-mailing to offer “whatever is needed,” to help jewelers restore their business, said Penny Palmer, marketing director. “The outpouring of compassion and concern is overwhelming,” she said. (Contact penny@ijo.com).

* Jewelers Mutual Insurance has donated $25,000 to the Red Cross Hurricane Katrina relief effort (see www.redcross.org), and its employees have began a fund drive of their own, said Harder.

* Stuller Inc. has established the Stuller, Inc. Hurricane Katrina Relief Fund at the Community Foundation of Acadiana. “This fund will have 100% of every dollar given to it sent to agencies that can make a difference to the hundreds of thousands of needy people affected by Hurricane Katrina,” says company president Charles D. Lein. “The Community Foundation of Acadiana is a qualified tax deductible organization. We will direct all the money in the Stuller, Inc. Hurricane Katrina Relief Fund to the relief organizations that need it the most.” Make contributions payable to the Community Foundation of Acadiana/ Katrina Relief Fund, P.O. Box 3892, Lafayette, LA 70502-3892.

* At press time, Jewelers of America was considering a link on its website for jewelers who wish help with relief efforts. The link would lead to the FEMA website, which has information on donating and volunteering. JA is also investigating setting up “some kind of network through the affiliates but coordinated at the national level through which jewelers affected by this disaster can receive advice from jewelers who experienced previous disasters (such as last year’s Florida hurricanes),” says Clifford Jackson, JA marketing manager. “These jewelers can provide information on how to rebuild, where to find resources, scams to avoid, etc., to the jewelers who will need to rebuild after Katrina.” However, that will take some time to set up and work out the logistics. By mid-September, we hope to have the beginnings of a network in place for those JA members who will need to rebuild in the months ahead.”

* A board member of the Illinois Jewelers Association, a JA affiliate, has suggested that Illinois members donate $10 to relief efforts for each watch battery provided during September. “We’ll be contacting other state and regional affiliates to share his idea and see if they are interested in doing the same at the state level,” Jackson said.

* Manufacturing Jewelers and Suppliers will be “looking at what the National Association of Manufacturers will be doing to assist the afflicted populace, and will coordinate with that, rather than try to set up something separately,” said James Marquart, MJSA president and chief executive officer.

* Some jewelers, some as far away as Florida and Oregon, are offering their homes to other jewelers and their families who need a temporary place to stay. “I know we’re a long ways away, but if someone–a jeweler’s wife/kids or even an employee’s spouse/kids–need a place to be while things get cleaned up and are safe again, here it is,” wrote one jeweler in a private e-mail to IJO.

Widespread devastation. The personal and economic devastation is widespread. Many jewelers have stores in flooded New Orleans or nearby towns. There was extensive looting of stores across New Orleans, because overtaxed police and National Guardsmen focused first on rescues. The Associated Press reported that looters on Canal Street ripped open steel gates on clothing and jewelry stores and grabbed merchandise.

The devastation wasn’t limited to New Orleans or nearby towns, like Slidell and Metairie, La. Towns along the Gulf Coast, like Gulfport, Hattiesburg, and Biloxi, Miss., were devastated. In Meridian, Miss., 90 miles northeast of New Orleans, more than 450 trees in town were felled by 60-mile-an-hour winds, said longtime Meridian jeweler Theresa LaBiche, whose own sister-in-law and her aged mother were rescued from their New Orleans home rooftop after a nearby levee broke.

“Stores in Meridian, including mine, are closed. Banks are closed. Power lines are down in four counties. There’s no electricity, and some looting. We have a curfew here, the first ever, and we can’t get in touch with our members” in the southern part of the state, said the two-time former president of the state association.

“Prayers would be appreciated,” she asked JCK to tell other jewelers.

Three days after the hurricane, IJO was still trying to reach most of its members in the affected area. “My heart is breaking,” said Penny Palmer. “We keep trying to reach our people, but it’s impossible.”

“Structural meltdown.” Some were lucky. Stuller Inc., the largest employer (1,800 people) in Lafayette, La., is 115 miles west of New Orleans and narrowly avoided being hit by Katrina. It was, nevertheless, affected. Only half of its employees could get in the first couple of days. Two-thirds of its 400-plus toll-free telephone lines were inoperative, and even its use of express air service was restricted.

There has been a “structural meltdown in systems and networks” in the region, said Stuller. “Cell phones are down, power is down, phones aren’t working, the communications system isn’t working. The hurricanes and gale force winds have virtually destroyed the infrastructure here. There’s no rail service, no roads, no generators or electricity. Some businesses and banks in New Orleans are moving temporarily to Baton Rouge or Lafayette—and may never move back.

“This tragic event is the most significant disaster yet on American soil. I know of no other that’s so widespread, substantially affecting four states and the national economy. It will take at least decade to reel back from this.”