ICS Magazine

New Orleans vendors tout mold removal and luxuries

December 21, 2005
NEW ORLEANS (Reuters) - Along the abandoned thoroughfares of New Orleans, small signs have sprouted to advertise cleaning services with the slogan "Got Mold?"

A highly specialized market of goods and services has evolved in the city since it was flooded by Hurricane Katrina more than three months ago even though fewer than 20 percent of its residents have returned.

A car towing service promises to "take your Chevy from the Levee" and dispose of water-soaked and rusted vehicles while physicians post signs announcing where they have relocated.

Commercials for mold removal on local television stations compete with ads for diamond jewelry, testimony to a split consumer psyche that must contend with rebuilding ravaged homes while yearning for luxuries that were lost in the storm.

"It's really about back to basics, buying at chains like Home Depot and Lowe's," said Marshal Cohen, chief industry analyst at market research firm NPD Group, who has visited the city several times since the storm. "The mass merchants are reaping the benefits in a big way because it's one-stop shopping."

High-end fashion and jewelry sales are also picking up. At Rubensteins clothing store near the historic French Quarter, owner Andre Rubenstein says the past week of sales was better than a year ago as long-time customers returned to the city and replace their ruined wardrobe.

The shop along Canal Street suffered some water damage, but reopened in mid-October offering a discount on $130 silk ties and $225 men's dress shirts. Store employees designed ads on small corrugated boards and posted them around the city.

"We're getting a lot of phone calls to see if we're back," Rubenstein said. "The city is small now and there is a certain publicity and word of mouth that is key.

At the shop on Tuesday, business was brisk with some customers buying five to ten sweaters each. And a holiday shopping edition for the local Times-Picayune newspaper features $200 sweaters and $300 pairs of designer heels.

"Consumers are looking to be able to feel good again," Cohen said. "Many lost their valuable luxury products that have an emotional connection. You can't replace your grandmother's earrings but you can find something comparable."

Cohen estimates New Orleans consumers will spend about $1.5 billion during the holiday season through January, compared with $3 billion a year ago. A significant portion of sales will benefit businesses outside the city as many local stores remain shut and residents purchase goods online.

Mark Romig, president of public relations at local ad agency Peter A Mayer, has seen an influx of advertising from banks offering Katrina-related loan services as well as patriotic commercials by reconstruction agencies pledging support to the city and Louisiana.

Peter A. Mayer estimates that advertisers spent close to $300 million annually in the New Orleans area before the storm, with advertising in 2006 to be about 65 percent of that.

Many national advertisers have yet to return as they rebuild their businesses. But some New Orleans residents are more interested in their local vendors.

"A lot of people are buying locally and not going to the (suburban) malls, trying to help support the local retail scene," Romig said.