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.

Losses for the region will be in the billions, say state and federal officials and insurers. Many jewelers’ businesses were 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.

The greatest cost is the human toll. At press time, there were no reports of jewelers or staff who died in the hurricane, 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 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 media reports put all insured losses on the devastated Gulf Coast at upwards of $15 billion. For jewelry businesses specifically, it was expected to take until at least mid-September before insurance adjusters and business owners would be allowed into devastated areas to make reliable loss estimates, said 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 businesses, said Penny Palmer, marketing director. “The outpouring of compassion and concern is overwhelming,” she said. (E-mail: penny@ijo.com.)

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

  • Stuller Inc., one of the world’s largest jewelry makers and suppliers, has launched “a strong multifold initiative to give monetary and personal assistance to our neighbors,” Matt Stuller told JCK. He said the company would extend credit terms and take other steps to help affected jewelers. The nonprofit Stuller Foundation, into which the company puts 10 percent of its annual earnings to support charities, will work with the Red Cross, local churches, shelters, and other relief efforts, Stuller said.

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,” LaBiche asked JCK to tell 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 Palmer. “We keep trying to reach our people, but it’s impossible.” 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 a decade to reel back from this.”