Carter Hawley Sets Quake Loss at $7 Million

Carter Hawley Hale Stores Inc. on Monday became the first big retailer to disclose its financial fallout from the devastating Bay Area Quake, announcing that the disaster will deepen its expected loss for this quarter by $7 million to $10 million.

The Los Angeles-based company said its discount outlet in Fremont and four of its 22 Emporium stores in Northern California remained closed Monday as a result of damage from the temblor and its aftershocks.

Hardest hit was the company’s store in downtown Oakland, where two stairwells leading to fire exits collapsed and much of the first floor and mezzanine was in ruins. No Emporium customers or employees were hurt, however. “That’s kind of amazing,” said Bill Dombrowski, a Carter Hawley spokesman.

Other than the Oakland store, the Emporium outlets that remained closed Monday mainly suffered cracked plaster, broken glass and water damage from burst pipes and sprinklers. One of the shut locations, an Emporium in Mountain View, was scheduled to reopen today but no date was set for the reopening of stores in downtown San Francisco, San Jose and Fremont.

Dombrowski said the 1,200 employees whose stores were affected by the earthquake were for the most part temporarily transferred to other locations in the chain.

The expected after-tax charge of up to $10 million for Carter Hawley Hale’s first quarter ending this week is a preliminary estimate but is expected to be the full extent of the company’s loss from the quake, Dombrowski said. The estimate, he explained, reflects the uninsured deductible expenses that Carter Hawley Hale anticipates paying.

An undetermined amount of expenses above that, Dombrowski said, are expected to be absorbed by Carter Hawley Hale’s insurers.

Even before Monday’s announcement, analysts were predicting that Carter Hawley Hale would lose as much as $4 million in its first quarter. Still, analysts said late in the day that the anticipated earthquake-related loss was sizable but would not have a major impact on the company’s financial well being.

Carter Hawley Hale, parent of the Broadway department stores in Southern California, earned $13.5 million on revenue of $2.8 billion in its fiscal year ended July 29.

In trading on the New York Stock Exchange on Monday, Carter Hawley Hale closed at $9.125, off 87.5 cents a share.