NEW YORK — Atlantic City retailers were down on their luck Wednesday.

That’s when all 12 of the city’s casinos were ordered to close because of a state budget impasse that shut New Jersey government, forcing the state to furlough most employees — including those who supervise casino activities. Without the supervisors, casinos were legally unable to operate, compelling gamblers to cut their vacations (and maybe their losses) short, though stores and restaurants that inhabit the casinos stayed open.

The development, if it persists, could put a damper on what’s expected to be a big season for Atlantic City merchants. Retailing has been building up in the city, with such resorts as Caesars Atlantic City and the Borgata Casino Hotel & Spa developing square footage to attract upscale stores. Last week, for example, The Pier at Caesars retail/entertainment complex had its ribbon-cutting, introducing several luxury and designer shops to the area, including Gucci and Betsey Johnson. Many more stores are expected to open at the Pier in the weeks ahead.

However, on Wednesday, several executives and store workers along the Boardwalk and in resorts said traffic was down by more than they would normally expect for the day after the Fourth of July. Some press reports estimated traffic at half what it normally would be.

“It’s definitely slowed down, but people are shopping, at least those who haven’t left town,” said one worker at a designer store, who requested anonymity. “Considering it’s the day after the Fourth of July, we expected the day to be slow anyway, but there is some traffic.”

“We are open, but we are not busy yet. We don’t have the sales. We sold one bag,” said Kate Eshchenkova, a clerk at the Barron for Her accessories store, around 3 p.m.

“It’s just slow,” said one worker at a jewelry store, who also requested anonymity. “Certain people are coming in, I guess because there is nothing else to do. They look at a few items and maybe buy one item. The comps are low because the casino is shut down.”

Not everybody despaired. Sam Mankus, supervisor of Carina, a high-end women’s store in the Borgata, which is about five minutes from the Boardwalk, described Wednesday as “surprisingly, a pretty good day, like a weekend. A lot of customers were in today. We thought we would really be dead today.”

This story first appeared in the July 6, 2006 issue of WWD. Subscribe Today.

The Marshall Rousso women’s clothing and accessories shop in the Taj Mahal opened late, but there was some quick selling action and even a few customers on line waiting to purchase items. “We are making out fine,” said Rachana Patel, a sales associate.

By late afternoon, the Betsey Johnson shop in The Pier at Caesars seemed to be hanging in. “I think we’re doing OK, but we won’t really know until we look at a full day of sales,” said an executive from the retail planning department of Betsey Johnson. “It doesn’t seem like a catastrophe. It seems to feel OK.”

Malls in the state didn’t seem to benefit much from the casino closings or from the fact that thousands of state workers were furloughed on Wednesday. As a spokeswoman for the Princeton Market Fair Mall said, “We’re about 20 miles from Trenton. We get our share of government workers, but not enough that you’d notice an impact on customers … Until something happens with the sales tax, I don’t think we’ll see any impact.”

New Jersey Gov. Jon Corzine is proposing a 1 percent hike in the sales tax, to 7 percent, but is getting opposition from the legislature. The governor hopes the sales tax increase would reduce state debt. (This would not affect apparel and footwear, since there’s no sales tax on these items in New Jersey).

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