Surviving the Blackout of 2003

The great blackout of 2003 may be a dim memory for many. But some catalogers in the regions that were affected by the Aug. 14 blackout are still tallying up the damages incurred.

The biggest blackout in U.S. history left millions of people and businesses in eight states, including New York, Ohio, and Connecticut, as well as several Canadian provinces, without electricity. Cleveland-based AmeriMark Direct, which mails the Anthony Richards, Compliments, Healthy Living, and Windsor Collection apparel, accessories, and gifts catalogs, was close to what was believed to be the source of the power outage in Ohio. The $70 million-plus cataloger lost electricity and all phone lines at 4:15 p.m. Eastern time Aug. 14 and didn’t get the power back completely until two full days later, says chairman/owner Gary Giesler.

For an hour and a half after the blackout started, AmeriMark was able to run its computers on a battery-generated interruption system. This enabled AmeriMark to execute an orderly shutdown to make sure no data were lost. “This way,” Giesler says, “we were able to come back up and begin without having to recapture lots of information.”

AmeriMark’s T-1 phone lines come from a “hut” that experienced some severe electrical problems, “and the cause of the problem wasn’t determined until the morning of Aug. 16,” Giesler says. “So we were completely out for all intent and purposes until the morning of Aug. 17, because we couldn’t call our crew in when power was restored at 4 p.m. Aug. 16.”

Although AmeriMark was able to channel incoming calls to a third-party back-up call center within an hour after the blackout began, Giesler says, “they couldn’t handle everything we could. So I’m sure our abandonment rates were high, and we’re still looking into seeing how many orders we took and how much really was lost. Once we calculate that, it will be part of our insurance filing for business interruption.”

The week after the blackout, however, sales rose 21%, Giesler says. Total August sales were up 16% from last year.

Sales at another affected cataloger, Elmsford, NY-based The Wine Enthusiast, also came roaring back in the days following the blackout. For the day of the blackout, says chairman/CEO Adam Strum, sales ended up being 38% below plan, even though the company immediately switched to its rollover call center to handle all incoming calls.

But the following day, when the wine accessories cataloger was up and running again, sales came in 28% above plan; on Aug. 16 they were 41% above plan, and on Aug. 17 nearly 93% ahead of plan. “So we more than recovered all the sales we lost on Thursday,” Strum says.

Phone service returned to Newburgh, NY-based Courage to Change, a cataloger of recovery- and therapy-related books, the morning after the blackout began, says vice president Dede Pitts. The company’s computers, however, were down for two more hours after that. But while service reps had to take a few orders and questions by hand, Pitts says the financial impact as a result of the outage was too slight to register, since the blackout occurred during the company’s off-peak hours.

Lost sales weren’t the primary concern at Cleveland-based World Almanac Education. The educational supplies marketer was in the middle of its catalog production cycle when the power went out, says director of marketing Jodie Yuhas.

“We were in the process of converting some files to PDF to send to the printer when our system went down,” Yuhas recalls. “Our art director had to come in on the following Saturday. Had the printer [R.R. Donnelley] been without power in Pontiac, IL, we would have been missing our mailing dates. Luckily our printer worked with us to make sure this didn’t happen.”

Business as usual

Livonia, MI-based metalworking tools cataloger J&L Industrial Direct didn’t suffer a loss of sales, says Chuck Moyer, vice president of marketing and supply chain management. “If our customers were open and ordering, we were able to serve them,” he explains, “because we have redundant order-taking systems around the country and shifted to those situations.”

New York-based multititle mailer Alloy didn’t experience major disruptions either; its Websites are hosted in Virginia, and its fulfillment and call centers are in Virginia and Tennessee. “So we were business as usual from a direct marketing operations standpoint,” says Sam Gradess, chief financial officer of the teen apparel and extreme-sports cataloger.

Another New York-based multititle mailer, home goods and apparel cataloger Brylane, incurred no major systems issues because “our back-up plan worked very well,” says president/CEO Russell Stravitz. The company, whose titles include Chadwick’s, KingSize, Jessica London, and Roaman’s, operates two call canters in Texas, two distribution centers in Massachusetts, and two in Indiana, none of which suffered power failures.

But Brylane did have other issues to contend with. “We had some challenges in the New York office with elevators and associates who couldn’t get home,” Stravitz says. “So we scrambled for hotel rooms and accommodated all we could.”

Being prepared

At Norwalk, CT-based computer cataloger Micro Warehouse, “we implemented our inclement weather procedure” of scheduling a conference call among department heads to determine contingency planning for the next day, says vice president/general counsel Larry Midler. But the call was cancelled via e-mail when the power was restored that evening. The mailer’s Wilmington, OH-based warehouse was not affected by the blackout.

“Some of being prepared pertains to making sure you have enough batteries in all parts of the building,” says Giesler of AmeriMark Direct. It also helps to have an employee volunteer plan. “Although we lost our security system, we had a couple of people volunteer” to guard the building, he says.

You also should keep a list of employee phone numbers by the main switchboard, so that you can contact people in an emergency situation, recommends Giesler. For certain, you want to be able to reach the person responsible for handling the fire deterrent system in the computer room, he notes. The system “sucks all the oxygen from the room rather than spraying water, which would ruin the computers.” — Additional reporting by Mark Del Franco and Margery Weinstein

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