Some businesses may profit from attacks

Sun Staff

As customers snatched American flags right out of the box at a jammed Flag Shop in Baltimore's , clerk Lena Hamideh struggled to keep pace with the cash-register line and a telephone that rang every 30 seconds.

"I need a 5-by-8 USA!" Hamideh shouted to a colleague yesterday as the line of flag-clutching customers stretched to the rear of the store. "Is there anything in the van?"

Hamideh's father had just returned from Atlanta after making a 24-hour round-trip drive to pick up an emergency order of 9,000 flags at a warehouse. Hamideh expected to be sold out of them by tomorrow.

"We've never had anything like this, ever," she said. "I've gone through the [Persian] Gulf war. The Fourth of July isn't even 1 percent of this."

Tuesday's terrorist attacks have quickly changed attitudes - from living rooms to corporate boardrooms to the halls of government - and some businesses are apt to make money because of it.

While many companies, skittish about appearing to profit from the disaster, were reluctant to discuss the shift, business people and analysts acknowledged that various enterprises will benefit. They range from manufacturers of bulletproof glass and airport X-ray machines to data protection software and even to vendors dealing souvenirs of the landmark World Trade Center towers destroyed by the hijacked airplanes.

Hours after the attacks in New York and Washington, JSA Research Inc. in Newport, R.I., restored "buy" ratings to the stocks of three defense contractors - Raytheon Corp., Lockheed Martin Corp. and EDO Corp.

"Immediately, the national security focus will be on civil air security, but in the longer term, it'll be more on rebuilding the atrophied military forces," Peter Arment, a JSA aerospace analyst, said yesterday. "We would expect it to be a prolonged event."

Teleconferencing and videoconferencing could become more popular - a result of uneasiness or increased costs anticipated for air travel.

V-SPAN, a videoconferencing company based in King of Prussia, Pa., has seen greater demand for its services - beginning as early as Tuesday when companies used the technology to give status updates to employees and customers around the world, said Kenyon Hayward, V-SPAN chairman and chief executive. Many trace the start of the videoconferencing industry to the Persian Gulf war in 1991, when companies barred employee travel, he said.

CompuDyne Corp., a Hanover-based manufacturer of security equipment ranging from software to high-end bulletproof glass, reported a jump in inquiries.

"I'm sure everything from airports to office buildings will become a lot more strict about access control," said Martin A. Roenigk, chairman and chief executive officer.

Gunther Than, president and chief executive officer of View Systems Inc. in Baltimore, reported a 50 percent jump in customer inquiries about the company's digital surveillance cameras and recorders as well as its facial-recognition systems. The latter can deny entry to people whose faces don't match those on file with the building access cards they're using.

Companies that provide security guards also were reporting an increase in calls, from both existing customers and new ones.

"Some of our clients are calling in for extra security," said Ron Rabena, a senior vice president for Allied Security Inc. The company, based in King of Prussia, Pa., was covering the requests in part by lengthening guards' shifts, he said.

Security of data is also expected to gain attention as stories unfold about businesses whose records were protected - and whose weren't - in the devastation that befell lower Manhattan.

EMC Corp., a Hopkinton, Mass., company, backed up data systems for 25 of the financial services companies in the World Trade Center. When the 110-story twin towers collapsed, EMC software automatically transferred computer records to other sites, as far away as the Southwest.

EMC developed its software in 1994 after events that included the 1993 World Trade Center bombing; competitors have their own products.

"This tragic event will bring storage disaster recovery backup to the forefront," said Arun Tanega, an industry analyst with the Enterprise Storage Group, a Milford, Mass.-based research firm. "I suspect that many companies that were sitting on the fence or had partially implemented disaster recovery plans probably just realized that the world is not safe any more."

IBM Corp. and Compaq Computer Corp. are among the companies he expects to benefit.

Mobile communications devices such as cell phones and pagers also might be in demand, at least in the short term. Analysts noted the wave of publicity this week about people who used them to tell loved ones that they were safe - or that they weren't, as recounted in several instances on the ill-fated airplanes.

"Undeniably, cell phones have been an important part of how people have communicated throughout this in a way that was never seen before," said John Johnson, a spokesman for Verizon Wireless.

"Just anecdotally, I have heard many comments from people saying that they will never go anywhere without their cell phone."

Cell phone sales at, a retail Web site owned by Kmart Corp., tripled during the past week compared with the previous week. Sales of two-way walkie-talkies doubled, according to the site.

Telecommunications infrastructure will probably grow as well, said Peter Jarich, director of broadband research for the Strategis Group Inc., a wireless research firm in Washington.

Grocery stores reported an increase in sales of "comfort food" as people huddled for hours in front of television news broadcasts.

"As silly as this sounds, we were comparing it to a snow scare," said Patti Hutchison, manager of the Safeway supermarket in Baltimore's Canton neighborhood.

Retailers also were seeing a scramble for souvenirs that depict the New York City skyline as it has looked for 25 years - up until Tuesday.

Klein's Hallmark in midtown's Manhattan Mall reported a 65 percent increase in sales of New York mugs, calendars and postcards, Nahalia Austin said.

"Now when you look out there's going to be a big gap," said Austin, referring to the skyline. "People want something to remember it by."

Broadway New York, a Times Square shop, also has seen a "marked increase" in merchandise with the skyline, manager Deena Aryokovich said. The store has had to restock postcards several times.

"It's history. It's an icon of New York," she said. "People want to remember what was there."

Sun staff writers Kristine Henry and Andrea Walker contributed to this article.

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