Contact: Colleen Roche (212) 788-2958, Deirdra L. Picou (212) 788-2971 or Bernadette O'Leary (212) 312-3523 (EDC)
Mayor Giuliani made the announcement today at the Manhattan Mall at 33rd Street and Sixth Avenue where mall managers estimate sales increases were between 40 percent and 400 percent, depending on the individual store.
Starting last Saturday, January 18, and ending Friday, January 24, New York City shoppers did not have to pay sales tax on clothing and footwear purchases under $500. The sales tax moratorium was an effort spearheaded by Mayor Giuliani to boost retail sales and encourage shoppers to spend in New York City.
"As real numbers become available, we are learning that last week's sales were even better than expected. In fact, EDC estimates a sharp increase in sales on items excluded from the sales tax exemption as well ," Mayor Giuliani said. "The success of this week-
long exemption shows that New Yorkers are in favor of eliminating this regressive tax and keeping the jobs and additional spending this reduction will create in New York City."
"On Staten Island, the one-week elimination of sales tax was a dramatic success," said Staten Island Borough President Guy V. Molinari. "This one-week experiment proved that permanent relief would mean more business, more jobs and more revenue for new York City and State. In a survey of nearly 1,000 residents, 78 percent of the people who said they frequently shop in New Jersey indicated that they would be more likely to shop in New York if the sales tax on clothing is eliminated."
The Borough President continued, "Residents took full advantage of the temporary elimination of the clothing tax, with stores like J.C. Penney and Macy's reporting brisk business and sales increases of well over 100 percent. The sales tax on clothing is particularly devastating to Staten Island's economy, which loses about $19 million every week --or $1 billion every year-- in retail sales to nearby New Jersey."
Many retail executives said that sales were at least double sales of an average week in January, and they compared the crowds of consumers last week to the shopping frenzy traditionally seen during the holiday season.
The New York City Economic Development Corporation (EDC) surveyed several retailers throughout the City for preliminary financial data, including Benetton, Bloomingdale's, Burlington Coat Factory, Caldor, Century 21, Daffy's, Macy's, Henry Modell & Co., J.C. Penney, Sears, Stern's and Today's Man.
"The program has far exceeded our expectations. Our 31 stores throughout the City saw a total sales increase of 100 percent on our tax exempt items. In fact, we've had to add additional shifts to properly service the increase in customer traffic," said Michael Modell, President of Modell's Sporting Goods.
"I don't think anyone thought that we'd do as well as we're doing," said Michael Gould, Chairman of Bloomingdale's. "Our apparel business is up 80 percent. People perceive it as a real savings."
"It was an outstanding success," said Hal Kahn, Chairman and Chief Executive Officer of Macy's East. "Business has more than doubled that of last year. In fact, our New York City stores outperformed all of our other East Coast stores by four times."
"The experiment was more than a success for Stern's," said Matthew D. Serra, Chairman and Chief Executive Officer of Stern's. "Our sales were up over 100 percent. What I'd like to see is a permanent elimination of the sales tax, which ultimately will increase sales and create more jobs for New Yorkers."
"Sales results in our New York Stores this week were beyond our greatest expectations," said Joseph R. Gromek, President and Chief Executive Officer, Brooks Brothers. "We have seven stores that have been affected by this and collectively our stores have had a 150 percent increase since last Saturday. Customers continued to shop heavily during the week."
While Saturday sales in some areas were hampered because of the cold weather, retailers noted that shopping picked up greatly later in the weekend. The Martin Luther King, Jr., holiday last Monday also contributed to the increased sales, with many residents taking advantage of the day off work to shop. During the work week, retailers in business centers, like those in the World Trade Center, said registers were operating above capacity during the lunch hour.
Fran Reiter, Deputy Mayor for Economic Development and Planning, said, "The success of the past week has really exceeded our expectations. Some stores are reporting that they saw a sales increase of up to 300 percent. This sends a clear message about the negative impact this tax has on New York City consumers and retailers."
"The elimination of the sales tax this week has had a major impact on the City, and strongly supports the push for a permanent elimination. It would mean that New Yorkers would have greater purchasing power, with 8.25 percent of what they had been spending back in their pockets. But it would also mean greater purchasing power because it would create more than 17,000 jobs for residents," said EDC President Charles Millard.
Mayor Giuliani is calling for the elimination of the City sales tax on clothing and footwear. The success of this sales tax moratorium will be used to boost support for this permanent elimination. It is estimated that such an elimination would create 17,400 jobs and $1.2 billion in direct and indirect spending in New York City.
EDC is the City's primary vehicle for economic development services. Using its real estate and financial resources, EDC helps develop businesses and create jobs throughout the five boroughs.