An unexpected disaster can hit any store at any time, disrupting business and creating unique recovery problems. Here’s the story of what happened to two jewelers, along with advice from experts at Jewelers’ Security Alliance and Jewelers Mutual Insurance on preparing for—and recovering from—a disaster.

“Fire!” The call came at 3:30 a.m. on Sunday, Dec. 13, 1998. Awakened from sleep, W. Carl Moore, owner of William Moore Jewelers in Greeley, Colo., heard a voice on the phone shout, “There’s a fire in your building!” Moore rushed to the scene: a block-long two-story building, opposite the county courthouse, where his street-level business was in the middle of several stores. The fire—later found to be arson—had already destroyed stores at one end. The fire didn’t reach Moore’s store, but its acrid smoke did. Racing through empty space above the first-floor ceilings until it hit a firewall, the smoke flooded down into the jewelry business. “The store was cloudy with thick, dark smoke, which smelled so bad, it gagged you,” recalls Moore’s sister Karen Pelzer, who works in the business. When they were finally allowed into the store at 7 a.m., “Everything was covered with [effects of the] smoke,” she says. “It was sticky, like glue, and wouldn’t come off. It was on carpets, doors, walls, cases, furniture, everything. All the holiday stuff—Christmas trees and ornaments—had to be thrown away.”

Moore immediately called a cleaning service, which sent a crew of 12. Working with them until late that night, the jewelers finally got the sales section of the 1,200-sq.-ft. store clean. “They used a terrible-smelling solvent to scrub, scrub, and scrub again and left machines to take smoke out of the air,” Pelzer recalls.

The experts say: Keep contact information handy concerning local cleaning services, contractors, and real estate agents. “If your building is damaged in a disaster, you may require a cleaning service and a contractor,” says William Herrbold, vice president for claims, Jewelers Mutual Insurance Co. “Or, you may need to immediately relocate, in which case you’d need a real estate agent.”

“It was a mess.” Moore Jewelers reopened on Monday, only an hour later than normal and despite the strong smell of smoke, though other stores in the building stayed closed for weeks. “We had to,” says Moore. “It was two weeks before Christmas, a big part of our year. In the end, [holiday] business was only off 10%.”

The merchandise, which had been stored in the safe, was all right, but the store had $40,000 of smoke damage to its furnishings, lighting fixtures, computers, cash registers, and electronic equipment. “Smoke got into the computer chips, and nothing would run,” says Pelzer.

“I didn’t know smoke could do that to a computer,” says Moore. “It was a mess. We lost everything—our customer list, inventory, accounts receivable. We had to redo it all from documents we had elsewhere.” Eventually, almost everything had to be redone or replaced, including “all papers—from stationery to wrapping paper—which were ‘browned,’ ” says Moore, and display cases, whose glass cracked from the high temperature.

Moore tries to “cover all the bases and anticipate” what can affect his business. “But I never thought in a million years I would have something like this,” he says.

Now, his business is even more careful with its data than before. “The fire made us rethink how we safeguard business information that is so essential to our operations,” says Pelzer.

Moore, who regularly updated records and documents—such as inventory, mailing lists, and statements—on his store computer, now also makes copies on backup computer disks. He keeps these at home.

The experts say: “Storing copies of important business information in a safe place away from the business helps a jeweler recover faster,” says Herrbold.

“This is information you need to do business from a remote location, preferably some distance from your store, if all records are destroyed due to disaster,” says John J. Kennedy, president of Jewelers’ Security Alliance.

These include copies (with mail, phone, and e-mail information, where appropriate) of:

• the latest physical inventory and year-to-date printouts of sales and purchases

• vendor contact information

• backup computer disks

• memo merchandise and vendors

• inventory of business personal property (i.e., showcases, furniture, computers, other equipment) and a video of your store interior

• contact information for your alarm service, safe and vault vendors, insurance agent and carrier, and copies of insurance policies

• contact information for shipping companies serving your business. “You’ll need to contact them immediately to provide alternative delivery instructions,” says Herrbold.

• employee list

• your accountant, attorney, payroll vendor, and bank officer

• customer list.

Logging in. Moore also has a logbook to record who brought what in for repair, the date it arrived, and a small sketch of the item, as well as a list of what is locked in the store safe. “I’ve always done that,” he says, “but now I also keep a copy at home.” It’s a necessary recovery tool: In Moore’s case, before the embers cooled, “people were calling me at home, asking if their jewelry was safe.” With the help of his logbook, he could assure them that it was.

The experts say: Always keep a “separate list of customers who’ve entrusted you with jewelry for repair, consignment, or layaway,” says Herrbold.

Insurance. “Make sure ahead of time your landlord has a general liability policy to cover tenants in a disaster, and tell your own insurance agent who that company is,” says Pelzer.

The experts say: “Also review your own insurance periodically,” says Kennedy. “Do you need business interruption insurance, or other types of coverage? Are you covered for acts of terrorism or war?” (See “Covering Your Assets: Beyond the Jewelers Block Policy,” p. 86.)

Finally, says Moore, “Don’t wait for insurance checks before doing recovery like repair, cleaning, or equipment replacement.” Moore maintains a “rainy day fund” for emergencies; he used this to hire the cleaning service and take other actions to keep his store open. “We kept our insurance adjusters and the landlord’s adjuster informed,” he says. “We said, ‘We’ll keep records of everything we spend for you to review, but we must restore business now.’ “

Blackout! It was about 4 p.m. on a Saturday in the fall of 1999 when all electrical power suddenly went off at Beauchamp & Co. Jewelers, Albuquerque, N.M. Lights, computers, electronics—everything went down.

“I thought at first it was a glitch,” recalls store manager Ana Chavez-Strome. Then she and the staff noticed that all lights were out everywhere outside the store, too.

When power didn’t return, “We started calling people to ask, ‘Is yours out, too?’ she says. They later learned the power outage had affected the whole city and most of the state. “Even cell phone service was disrupted, from so many people trying to call,” she says.

Acting on her authority as manager, Chavez-Strome decided to close and secured the merchandise. “We emptied the store’s contents into our safe, cramming in a little more than usual.” Then, she sent the 11-member staff home.

The experts say: Managers and other store supervisory personnel “should have authority to close and send employees home if conditions warrant,” says Kennedy. To discourage looting, he adds, “have the capacity to lock all goods away in an emergency, and have grilles or gates that can protect shop windows and doors.”

Kennedy also suggests having “plans to safeguard your jewelry in emergencies, like an approaching flood or hurricane. Can an armored carrier pick it up? Can it be stored in a bank vault or other secure facility? Can a jeweler not at risk store them for the duration?”

Vigilant. Chavez-Strome and the store’s watchmaker, who volunteered to stay, remained in the store and soon were joined by Chavez-Strome’s husband and son. They moved their cars to the customer parking area in front of the store, which is in a highway strip shopping center.

“We had no idea when power would return, and our alarm company had just told us by cell phone that our alarm’s battery was running down,” she says. “So I thought we needed to make it obvious there were people in here, even if only with candles, in case anyone thought of taking advantage of the situation to break in.”

And so they remained, with only candles for light, until power returned as suddenly as it had stopped, at about 8:30 p.m.—almost five hours later.

Making a list, checking it twice. While nothing was lost or damaged, the power outage affected the store’s contingency planning.

“Something like this wakes you up to the fact that it’s unusual things you’re not expecting that throw you for a loop,” says Chavez-Strome.

After the blackout, she composed a list of numbers for emergencies, “to have when needed and not run somewhere to look them up.” The list included phone numbers for staff, necessary services (i.e., electrical company, glass suppliers, insurance), the landlord, and managers and/or owners of other stores in the shopping center.

She also put together an in-store emergency contact list for the store’s employees—”basically, who contacts whom,” she explains.

The experts say: A jeweler should always have copies of emergency phone numbers in the store and at home, say JSA and JMI. These include numbers of employees, the building owner or manager, emergency service vendors (such as glass, alarm, power/electric and car companies), police, local jewelers, and other repair services. Employees should have a list of supervisors and co-workers to call in case of emergencies or store closings.

Stocking the emergency kit. Chavez-Strome now carries “a little emergency kit” in her car for “whatever the situation.” It includes a blanket, extra sneakers, extra clothes, and a flashlight. In addition, the store has gotten more flashlights and a transistor radio “so we know what’s happening if power goes out again.”

The experts say: Every jewelry store should have emergency equipment on site, including flashlights, batteries, a fully-charged cell phone, portable radio, bottled water, and first-aid kit.