Los Angeles Faces $57 Billion Loss From Wildfires

As hurricane-force winds whipped up wildfires across Los Angeles on Wednesday, only the bare outline of the disaster’s impact was coming into focus. 

Some 37,000 people were said to be under evacuation orders as of press time while more than 1,000 buildings were destroyed and more than 15,000 acres were burning as of the afternoon. 

And that might just be the start of it as dry weather and continued winds are expected to hamper the efforts of the L.A. fire department, which was already out in full force and has called for aid from surrounding counties. 

The fires are expected to lead to $52 billion to $57 billion in damages and economic loss, according to a preliminary estimate from AccuWeather.

“This is already one of the worst wildfires in California history,” said Jonathan Porter, AccuWeather’s chief meteorologist. “Should a large number of additional structures be burned in the coming days, it may become the worst wildfire in modern California history based on the number of structures burned and economic loss.”

In retail, the reaction ranged from watchful to devastated. 

“I am beyond heartbroken,” said Elyse Walker on Instagram, reacting to the fire in Pacific Palisades. 

“Like so many others, we were severely impacted as we lost our flagship ElyseWalker Pacific Palisades in the fires,” Walker said. “And while that is an incredible loss, I am thankful that our staff is safe and remains unharmed. The status of the Towne by ElyseWalker store in the Palisades Village is still unknown and our ElyseWalker Calabasas location is closed until further notice.”

The Pacific Palisades store, which opened  in 1999, catered to the well-heeled community of L.A.’s West Side who didn’t want to fight traffic and cross the 405 freeway to shop luxury brands. While it started out at 836 square feet, it expanded to 6,552 square feet in 2007 to better serve the likes of Cindy Crawford, Jennifer Garner and Kate Hudson.

Walker, who celebrated her 25th year in business last year, noted that she opened her first store in the Palisades: “It quickly became more than just my business. It became my community. I built my business there, raised my kids there and made relationships there.” 

Even in the midst of wide-scale destruction, she remained hopeful. 

“While we take time to heal, there is one thing I am confident  in — this community always show up for each other,” she said. “The Palisades community is strong…Together we will mourn, heal and eventually rise up.”

The Starbucks, Gelson’s and Ralphs grocery stores and numerous small businesses along Sunset Boulevard in the Pacific Palisades neighborhood also all burned down. 

Meanwhile, developer Rick Caruso’s Palisades Village open-air shopping center, which in recent years has attracted a number of luxury tenants including Bottega Veneta, Saint Laurent and Toteme, was mostly unscathed. 

But the former L.A. mayoral candidate and former Department of Water and Power commissioner didn’t mince words when describing the situation.

He called into the local Fox news TV station and likened the scene in the neighborhood where his daughter has already lost her home to “a third-world country.” 

“There’s no water in the Palisades. There’s no water coming out of the fire hydrants. This is an absolute mismanagement by the city. Not the firefighters’ fault, but the city’s,” said Caruso, who also owns the shopping centers Americana at Brand in Glendale and The Grove in Beverly Grove, and blamed unkept brush for exacerbating conditions.

Janisse Quiñones, chief executive officer and chief engineer of the Los Angeles Department of Water and Power (DWP), told local media that by 3 a.m. Wednesday, all fire hydrants in the Palisades “went dry.” Overnight, the winds were too strong for planes and helicopters to help control the fire by air. 

“We have got a mayor that is out of the country, and we have got a city that is burning, and there is no resources to put out fires,” Caruso added while speaking to Fox, referencing that his former political rival, L.A. Mayor Karen Bass, was on a diplomatic trip to Ghana when the fires broke out. 

Bass was due to return to L.A. Wednesday afternoon.

But many retailers in Los Angeles were impacted to some degree. 

Erik Torstensson, cofounder of Frame, said: “For now, our only focus is the safety of our Frame family and their loved ones. We have closed all stores and the headquarters, and are following the developments closely. Our hearts go out to our whole community.”

Bloomingdale’s said that things were “business as usual,” at nine of its 10 California stores, which include locations in the city.  Bloomingdale’s closed its Glendale location to ensure the safety and well-being of its customers and associates.  

Luxury giant LVMH Moët Hennessy Louis Vuitton also had to close some stores in the area. 

And a Walmart store in Duarte was closed due to power outages and a source familiar with the retailer’s operations said it offers direct assistance to employees impacted by natural disasters, including wildfires.  

“The [Walmart] Emergency Operations Center is a 24/7 operation, so there’s always someone available on the phone and just working to constantly monitor what assistance is needed,” according to the source.

That kind of dedicated team, which can help ameliorate the impact of disasters, comes only with the scale of a massive company like Walmart. Smaller operators have to come up with solutions on the fly. 

“The safety of our associates is a top priority,” said a Walmart spokeswoman. “We’re working closely with state officials and monitoring the situation.”

The Westfield Topanga Mall was closed Wednesday due to high winds and the power outage caused by the fires, but mall operators Simon Property Group and Macerich said their centers remained open. 

Evan Gold, executive vice president of global partnership and alliances at weather-impact firm Planalytics, said the outlook for the fire is daunting. 

“It’s a high population center, so there’s rapid fire risk,” Gold said. “You’re talking about existing fire, high winds and it’s dry, right? All of those unfortunately lead to an indication where it’s going to get worse before it gets better.

“We now have an extreme event — meaning a billion dollars or more in terms of insured losses — once every three weeks in the U.S.,” Gold said. “Back in the 1980s, it was roughly once every four months.”

So far it looks like the disaster is not going to extend to the ports and disrupt the national supply chain. The twin ports of Los Angeles and Long Beach were both unaffected by the fires, which are located about 25 miles northwest of the San Pedro Bay port complex.

Phillip Sanfield, communications director for the Port of Los Angeles, said the L.A. port was “thankfully all clear.” Port of Long Beach media relations manager Lee Peterson confirmed that the port’s terminals, main road and rail conduits for cargo are all not impacted by the fires.