A massive fire in Fishkill, NY swept through a Gap Inc. distribution center Monday and Tuesday, leaving questions about what its 600 workers will do and how the destruction of inventory will affect Gap stores in the Northeast, according to news reports.
Federal, state and local investigators are looking into how the fire started and why it it escalated, spread quickly and lasted so long. The aggressive nature of the fire called for 23 fire departments from three counties to respond. No employees were injured, although one firefighter sustained minor injuries.
Gap opened the warehouse 16 years ago and it has since expanded. Investigators say the retailer won’t be able to figure out what to do until it’s able to get into the building, and that will be a while. Gap is providing its workers with paid leave for the time being, according to the Poughkeepsie Journal.
The impact on Gap Inc. could be major. The building was a huge distribution center — about a third of Gap’s 8.6 million square feet of distribution space (which the company runs and owns in four U.S. states, Canada and the U.K.) is in Fishkill. The center ran 24 hours per day, has been undergoing another expansion and is the area’s largest employer.
Gap stores in the Northeast could be left without much-needed merchandise in the aftermath of the blaze. Gap spokeswoman Debbie Felix told Reuters that the company is serving stores with merchandise from other warehouses.
"While it will take time to understand the full impact and cause of the fire, we have contingency plans in place and are working across our North American network of distributions centers to continue to serve our customers," she said.
The fire is the latest in a string of setbacks facing Gap. Earlier this month the company reported adjusted second quarter earnings of 60 cents per share, compared to 64 cents a share a year ago. Q2 sales were $3.85 billion, down from $3.90 billion year over year. Gap also lowered its fiscal year guidance and said it expects adjusted earnings between $1.87 and $1.92 per share for fiscal 2016, missing FactSet analysts expectations of $1.95 per share.
Gap CEO Art Peck noted on a conference call following the earnings announcement that Gap has suffered with customers because of inconsistencies in fit, an issue that has also created a problem of returned merchandise, especially for online orders, and wreaked havoc with the supply chain.