Tax-free week boosts cloth­ing buy­ing

Baltimore Sun - - NEWS - Lor­raine.mirabella@balt­ twit­ lmirabella

week said they plan school-re­lated buy­ing around the tax hol­i­day, in which items cost­ing $100 or less are ex­empt from the state’s 6 per­cent sales tax.

But some re­tail­ers see the week as more of a mar­ket­ing event than sales boon, say­ing it merely shifts busi­ness they would have re­ceived in other weeks.

“All they’ve done with this is moved busi­ness from other times in the month to this week,” said Gil­bert Co­hen, the third gen­er­a­tion owner of Co­hen’s Cloth­iers in Cock­eysville, where the more than cen­tu­ry­old re­tailer has run a men’s, women’s and chil­dren’s ap­parel and shoe store since 1969.

Tax-free week has been around in Mary­land since 2010. The Gen­eral As­sem­bly au­tho­rized the event in 2007, in­tend­ing to tie it to back-to-school shop­ping and give the state’s small re­tail­ers a boost. Mary­land is one of 16 states that of­fer tax-free week­ends or weeks, many of them tied to back-to-school buy­ing.

“From a re­tailer’s per­spec­tive, it gives them the op­por­tu­nity to sell items at a lower cost with­out hav­ing to sub­si­dize the pro­mo­tion,” said Adam Sil­ver­man, a for­mer re­tail an­a­lyst and cur­rent se­nior vice pres­i­dent of mar­ket­ing for Dal­las- based re­tail tech­nol­ogy com­pany Theatro. “It low­ers the cost of the prod­uct. Con­sumers are very well aware of this. They will save up their money ... for these hol­i­day events.”

But such lim­ited-time pro­mo­tions tend to ben­e­fit most the mass mer­chants and re­tail­ers that suc­cess­fully blend on­line and in-store ex­pe­ri­ences, Sil­ver­man said. As on­line and dis­count shop­ping has grown, he said, that likely comes at the ex­pense of spe­cialty stores.

At JCPen­ney in White Marsh, store signs in the chil­dren’s de­part­ments pro­mote tax-free sav­ings along with spe­cials on back­packs for $7 and Izod shirts for $9.99 and other items for 40 per­cent off.

“The week has been very pos­i­tive,” said MIchele Lozan­ski, gen­eral manger. “We’re re­ally mak­ing sure that we’re price-con­scious. We’re re­ally try­ing to make it worth moms’ while to come in and shop with us.”

Small re­tail­ers said they use tax-free week as a way to pro­mote what they says sets them apart from mass mer­chants — a deeper un­der­stand­ing of their cus­tomers’ needs and an abil­ity to pay greater at­ten­tion to ser­vice.

Re­tail­ers such as Co­hen’s, and Van Dyke & Ba­con Shoes, a fam­ily-owned re­tailer that dates to 1938 and now op­er­ates seven stores, said they find out dress code re­quire­ments at lo­cal pri­vate and public schools and make sure they are stocked with items stu­dents will need.

For Van Dyke & Ba­con, that means stock­ing up on shoes that are per­mit­ted un­der dress codes, Mary Jane-style shoes, sad­dle shoes, suede bucks, brands such as Sperry’s and sneak­ers for gym class, said Ron Ger­mack, man­ager of the Van Dyke’s store in El­li­cott City.

John Ba­con, an owner of the chain, said Au­gust has re­mained one of the stronger months be­cause of school shop­ping, but tax-free week can be a gam­ble. A store that usu­ally is staffed with five peo­ple might need eight to han­dle an an­tic­i­pated in­crease in shop­pers, which might or might not pan out.

“Tax-free week def­i­nitely shifts the sales,” Ba­con said. “You may win a lit­tle bit in sales, but we kind of have to watch the ex­penses and pay­roll.”

Brid­get Quinn Stick­line, owner and pres­i­dent of WeeChic Bou­tique, a chil­dren’s Mimi Fis­siha, cen­ter, of Es­sex mea­sures a pair of jeans for a rough fit on daugh­ter Bethel Abera, 8, as older daugh­ter Saron Abera, 16, watches while shop­ping at JCPenny at White Marsh Mall. ap­parel re­tailer in Green­spring Sta­tion, sees tax-free week as a chance to re­mind cus­tomers about lo­cally owned brick-and­mor­tar stores.

“As a small busi­ness com­pet­ing in this mar­ket­place, where you can go on­line and buy al­most any­thing tax-free, it is nice to have that op­por­tu­nity,” she said. “Peo­ple do show up to shop. It’s an in­cen­tive to get out and get started. The clients ap­pre­ci­ate it. It tends to be a kick­off to our back-to-school sea­son.”

She said it’s the sec­ond-busiest time of year for her shop.

This year, with school start­ing af­ter La­bor Day in many coun­ties, busi­nesses also are hop­ing the pro­longed sum­mer break trans­lates into a surge in spend­ing not only dur­ing tax-free week but dur­ing the last two weeks of the month — and beyond. Spend­ing on school ap­parel and sup­plies is of­ten viewed as a pre­cur­sor to the cru­cial hol­i­day shop­ping sea­son.

Lori Cu­cuzzella started back-to-school shop­ping Tues­day, buy­ing sneak­ers for her 10-year-old daugh­ter, Anna, at Van Dyke & Ba­con’s El­li­cott City store, where she went to get help with the right fit as well as a break on sales tax.

The El­li­cott City res­i­dent said she buys cloth­ing for her kids, ages, 8, 10 and 12, through­out the year, but buys shoes for each one be­fore school. For those pur­chases, she waits for tax-free week.

With three kids, she said, “it makes a big dif­fer­ence.”

Na­tion­ally, back-to-school and back-to­col­lege spend­ing is ex­pected to reach more than $83 bil­lion, a more than 10 per­cent jump from last year’s spend­ing, with fam­i­lies of el­e­men­tary to high school stu­dents spend­ing an av­er­age of $687.82 each, the Na­tional Re­tail Fed­er­a­tion said.

Matthew Shay, the re­tail group’s pres­i­dent and CEO, at­tributes the rosy ex­pec­ta­tions to in­creased con­sumer con­fi­dence.

“With stronger em­ploy­ment lev­els and a con­tin­ued in­crease in wages, con­sumers are spend­ing more,” Shay said in a state­ment.

Bel Air res­i­dent Heather Stan­ley, who was shop­ping Tues­day at White Marsh Mall with her mother and two chil­dren, said her fam­ily had just re­turned from va­ca­tion near out­lets in Delaware, which has no state sales tax, and wanted to take ad­van­tage of even a brief tax-free shop­ping pe­riod at home. They were on the hunt for shirts, jeans and other items for Stan­ley’s 15-year-old son and 12-year-old daugh­ter.

“We’re try­ing to get a jump on the fall stuff,” Stan­ley said. “It kind of makes you feel good to save the lit­tle bit that you can on tax-free week, ab­so­lutely, es­pe­cially since ev­ery­thing they like is Nike and Un­der Ar­mour and Amer­i­can Ea­gle, so that adds up quickly.”

At the Amer­i­can Ea­gle store, she said, she bought khaki pants on clear­ance for her son.

“And no sales tax on top of that, you can’t beat that,” she said.

Quinn Stick­line of Wee Chic said she ex­pects sales in­creases this sea­son com­pared to last year’s back-to-school for the same rea­son her busi­ness has grown over­all in the past eight years.

“We know our cus­tomers,” she said. “We’ve grown up with their chil­dren. There is some­thing about that per­sonal ex­peri- ence that you can’t match on­line.”

Co­hen said it is too early to tell how back-to-school spend­ing will com­pare to last year, but he ex­pects sales to be about the same. In an age of on­line buy­ing and dis­coun­ters, his busi­ness has been able to thrive, he said, by serv­ing those con­sumers who want ex­tra at­ten­tion in se­lect­ing and fit­ting their wardrobes.

Not count­ing the hol­i­day sea­son, the store is busiest from the third week of July through early Septem­ber, as fam­i­lies stock up on the pants, shirts and other ap­parel re­quired in area pri­vate schools’ dress codes. Back-to-school ac­counts for 80 per­cent of the store’s busi­ness this time of year.

“If a cus­tomer needs ser­vice or wants it,” Co­hen said, “this is where we ex­cel.”

Betsy Der­rick of Galesville in Anne Arun­del County said she looks for re­tail­ers that fo­cus on per­sonal ser­vice when she takes each of her eight grand­chil­dren for a tra­di­tional out­ing each year to buy new shoes for school.

On Wed­nes­day, she had three grand­chil­dren in tow at Van Dyke’s El­li­cott City store, where two were try­ing on New Bal­ance sneak­ers.

Watch­ing as grand­son, Hal Der­rick, 8, and grand­daugh­ter, Vir­ginia Der­rick, 5, were fit­ted for shoes then walked around the store brought back mem­o­ries of go­ing as a child to a fam­ily-owned shoe store where “we were al­ways mea­sured, and there were lots of choices, and you al­ways found some­thing you liked.”


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