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American Express: Open Forum

Natural Disasters: How To Survive, And Even Thrive

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Business owner Bill Rau of New Orleans tells how his antiques business survived Hurricane Katrina, lessons learned and advice for other owners to weather this year’s storms.

M.S. Rau Antiques, 630 Royal Street in the heart of New Orleans' historic French Quarter

M.S. Rau Antiques, 630 Royal Street in the heart of New Orleans' historic French Quarter

MS Rau of New Orleans has been described as “the finest antiques gallery in the world.” Its 30,000 square-foot showroom in the heart of the French Quarter boasts such exalted inventory as Renoirs, Monets and Paul Revere sterling bowls. But this treasure trove, and the livelihood of the business itself, faced its greatest challenge when Hurricane Katrina hit the city in August 2005.

Here, Bill Rau, the gallery's third-generation proprietor, talks about how the business came through the storm.

Q: How did you prepare for Hurricane Katrina?

A: It's hard to prepare against the perfect enemy. Initially we were told that Katrina was a Category 1 storm heading for Florida; two days later, it’s a Category 4 and it's heading right for us. So we basically had four hours on a Saturday to secure the gallery, which contains 95 percent of our inventory, with half my staff of 35 having already evacuated the city. So we do what we can—lift the paintings off the walls, cram stuff into the safe, board the place up, get out of town. At that stage, my fear was of our roof blowing off, rather than rising water.

Q: What steps did you take to manage a team of evacuees?

Bill Rau, CEO and third-generation owner of M.S. Rau Antiques.

Bill Rau, CEO and third-generation owner of M.S. Rau Antiques.

A: I got last-minute flights to Dallas for myself and my family. The cell phone networks were down in New Orleans, and it was three days before I got a call from an employee who'd been staying in an apartment above the gallery, saying the police had told him to leave. My 13-year-old daughter said, "Dad, before he goes, tell him to take down our signs." That was probably the smartest thing we did. Eventually I scheduled a conference call with my employees via the Internet, and my COO gave me the best advice I've ever received in my life. He said, "Bill, they're looking to you for guidance, clear vision and security. Give it to 'em." He was right. I told them, "We're a team—we'll face challenges, but we'll need to help each other.”

Q: What was the extent of the damage to the gallery?

A: We had five feet of water and about $5 million-worth of damage in the warehouse, but most of our inventory survived intact. The insurance situation proved to be the most daunting thing I had to face. At one point, with all the damage to business and family properties, I was dealing with 14 different adjusters. I was spending six to seven hours a day, six days a week, on insurance issues alone. It was overwhelming. We took quite a loss, and I wish we had done more to understand our policies from the outset to avoid this situation.

Q: But you quickly re-opened, despite all that?

A: We re-opened six weeks after Katrina hit, on the first day that electricity was restored. I thought it was important to send a message to people that we—and the city—were still open for business at a time when people thought New Orleans was completely destroyed. I lost around a quarter of my staff, but I opened a temporary space in New York, and set up my stall at antique fairs across the country. My marketing director told me that she had to give me an A plus plus for the way I handled it all. And this is a woman who's not usually effusive with her praise. So that meant a lot.

Q: What lessons have you learned from the Katrina experience?

A: Our computer system is clouded now. We had back-up before but we couldn't get to it; the city was in lock-down and there was no electricity. And we've learned that you always want a phone system that can connect someplace else, because communications in the city were completely down. All our records, policies and personal items are now stored in a friend's safety deposit box in Ohio. And I'd always tell someone to get an insurance advisor to sit down with them and find out what may be missing in their policies. We learned those things the hard way, and if we all live long enough, we'll be much better prepared for the next disaster.

Q: Did you ever think of relocating from New Orleans?

A: It never crossed my mind, as a New Orleanian. After it happened, people kept telling me how badly they felt for me, but I said sure, it was a terrible thing, but my family's OK, and my business will be OK. Despite everything, life is still sweet.

Natural Disasters: Tips for Business Survival

• Consider your employees—they need guidance, clear vision and security now more than ever.

• Keep customers in the loop—send the message that you're still open for business.

• Establish cloud-computing—ensure that backup can be accessed outside the affected area.




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