Dive Brief:

• Gov. Andrew Cuomo announced Wednesday that Gap Inc. has opened a "pop-up" facility distribution center in Fishkill, NY. The distribution center will not only help Gap fulfill holiday orders, but will re-employ more than 1,200 employees who lost their jobs due to the fire in August, the Auburn Citizen reported Wednesday.
• The company received $14.65 million in assistance from the State of New York and the Empire State Development. The credits likely persuaded Gap to retain its warehouse in the state despite rumors it could move to Tennessee. 
• Gap's original warehouse in Fishkill, NY caught fire early September and led to a 3% sales loss for the company due to inventory losses and subsequent shortages.

Dive Insight:

Warehouse fires, while mercifully rare, have a tremendously damaging impact on the supply chain.

A recent fire in an Amazon warehouse in the UK has devastated one of its retailers, reported Business Insider on Wednesday. The company in question, RYN Trading, has been told it would be compensated for its loss of stock but without an explicit timeline. While RYN Trading waits, the company's sales have dropped by 90%.

In addition to the immediate losses, however, Gap's experience shows the long road to recovery inherent when a critical link of the supply chain is rendered inactive. Absent of a hub, the company had to rework its distribution plans for over two months to ensure the correct amount of inventory was reaching its Northeast stores.

Or, when the cost-benefit analysis proved more costly than beneficial (as was likely the case with many Banana Republic items), absorb the potential loss in sales. The pop-up warehouse should help Gap return to semi-normal operations during the holidays.