Hurricane Sandy will take its toll on the US cosmetics industry

By Simon Pitman

- Last updated on GMT

Related tags: New york city

With an estimated 70 percent of US cosmetics and personal care players said to be operating within a 200 mile radius of New York City, the industry is expected to take a significant impact from the damage wreaked by one of America's biggest ever storms.

The storm smashed into the Tri State area on Monday evening and the devastation it left continues to unfold, including flooding, power outages, fallen trees and fires contributing to an estimated $50bn repair bill, and most tragically, a mounting death toll.

The immediate impact has led to New York City based cosmetic giants Estee Lauder and Elizabeth Arden both postponing the release of their most recent quarter financial results, owing mainly to the fact that the New York Stock Exchange has been closed for an unprecedented two days, which has also led to a dip in share prices.

Counting the impact will take time

But with many areas still lying under water and the clear up operation still in full swing, knowing just how much of an impact the storm will have on the day-to-day operations of cosmetics manufacturers and suppliers is likely to take weeks to fully assess.

For these businesses the most significant impact is likely to be two-fold: firstly the affect it will have on the day-to-day operations of the business, and secondly the extent to which insurance may or may not cover both physical losses and the business operations.

Some economists have commented that the concerted effort and investment to clean up after the storm and to rebuild and repair the damage may actually have a positive effect on the economy as it will help to inject some cash into many areas that have been struggling under the weight of unemployment and reduced incomes.

Insurance: some you win, some you lose

Major insurance broker AIR Worldwide estimates that the potential insured losses from the storm damage will come in at between $7 billion and $15 billion - a figure that includes damages to both personal property and private busineses.

However, the insurance company also pointed out that these losses normally represent about half of the total losses, as many individuals and businesses will either be uninsured, their policies will not stretch to certain types of damage or the impact will be covered by the government.

For many smaller cosmetic and personal care manufacturers and suppliers, the extent to which insurance companies pay out for any damages or impact to their businesses could prove crucial to their future livelihood.

Please tell us about how Hurricane Sandy has impacted your business

Besides the physical impact of the storm to production facilities, for example, many businesses are facing significant supply and transportation difficulties, problems which are being compounded by a clear up program that is likely to take weeks and will at first concentrate on restoring essential services.

If your business has been impacted by Hurricane Sandy in any way, please click on the 'contact the editor' tab below this page and tell us your story. Sharing such information could ultimately lead help locate additional resources or information necessary to help your business get back on its feet quicker. 

Related topics: Business & Financial

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