GIULIANI’S RETAIL MARKET PLAN

Byline: Eric Wilson

NEW YORK — New York is making a big public relations push for its retailers.
Through its visitors bureau and promotions arm, NYC & Company, city officials are looking to bring more retail involvement into the marketing of New York as a tourist destination.
To help attain that goal, Mayor Rudolph W. Giuliani told executives from several of the city’s high-end stores on Tuesday that he would continue to push for a total repeal of the sales tax on apparel, which was eliminated for most items costing less than $110 last year, during the remainder of his term.
He said he is also looking to cut additional levies on hotel stays to help promote additional tourism and shopping in the city.
While NYC & Company has included several retail participants in the past, the city’s official marketing and tourism organization has mostly focused its efforts on the hotel, travel and restaurant trades. To boost its retail membership, the group hosted a breakfast at Gracie Mansion for representatives of several of the city’s luxury stores, including Hermes, Escada, Barneys New York, Tiffany, Cartier and Tourneau, as well as members from Lord & Taylor, Macy’s East, Bloomingdale’s, Gant and the Disney Store.
“The enthusiasm that they have is on a much higher level than it had been in the past,” said Anne Keating, senior vice president of Bloomingdale’s. “Before, it was totally focused on the hotel industry, but now they are trying to make it beneficial to a lot more industries.”
Cristyne Lategano-Nicholas, president and chief executive officer of NYC & Company, said the group is looking to work with retailers on cross-promotional events, as well as deal with their concerns in a group forum.
Lategano-Nicholas cited several statistics culled from NYC & Company’s tourism research that would support retail involvement in the committee. International visitors said shopping was the top activity they had planned to do while in New York, she said, adding that shopping also ranked as the second-highest activity for all visitors, placing after Broadway shows.
Giuliani added that tourism in New York contributes $23.4 billion to the local economy and, in effect, has become one of its largest industries. The number of visitors to the city has increased annually from about 28.5 million in 1995 to 39.4 million expected this year.
The largest portion of tourists come from the U.K., followed by Japan, Germany, France, Italy and Brazil, Giuliani said.
NYC & Company also recently initiated a Paint the Town Red campaign, including a Winter Restaurant Week in January geared toward promoting New York businesses during what is traditionally a drop in tourism in January and February, when the number of visitors falls by as much as 30 percent.
To continue to develop the tourist trade, the mayor proposed eliminating a $2 fee on rooms, as well as supporting new hotel projects in the city. This would create additional jobs, which could help protect the overall health of the city’s finances should there be a further downturn on Wall Street, as expected, Giuliani said.
Restaurant guide publisher Tim Zagat, who is chairman of NYC & Company, said Giuliani’s reduction of the hotel tax early in his administration had increased tourism in the city by 38 percent.
Several weeklong experiments with abating the state and local taxes on apparel, which total 8.25 percent in New York, also were popular with tourists and retailers and eventually led to the permanent elimination of the tax on items costing less than $110.
“Given the success of the elimination of the sales tax on clothing under $110, why don’t we be more competitive and eliminate it completely?” Giuliani said. “The other one was very hard to do, and looking back on it, I don’t know how we did it. There was reluctance both from Democrats and Republicans. It’s going to be a hard sell, but if we slash the whole thing, we think we will create $1.4 billion more in spending and 20,000 more jobs.”
Ari Hoffman, ceo of Gant USA, said the full repeal of the sales tax on apparel has been the “biggest, most important” issue on New York retailers’ minds.
“If that can be repealed, that would benefit retailing tremendously,” Hoffman said. “That alone is quite significant from my point of view. That the mayor and his office are getting involved to support retailers of New York, even in the low times, is exciting. I just got involved in the retail committee and look forward to working with them on coming up with differing ideas of how to support the business of New York City.”
Bud Konheim, ceo of Nicole Miller and chairman of NYC & Company’s retail committee, said tourism had changed dramatically under Giuliani’s administration, creating new opportunities for retailers to be part of marketing efforts for the city.
“Cross-marketing with airlines, hotels and restaurants is a terrific way of promoting your business without losing your identity,” Konheim said. “We should build up NYC & Company now to at least insure we have a voice in the next administration. I don’t want to put fear in your hearts to motivate you, but that’s what motivates me.”
While retailers have benefitted from increased economic activity, thanks to the tourism boom, he said, the number of retail participants in NYC & Company has lagged in comparison to the hotel and restaurant membership. Larger stores like Macy’s and Bloomingdale’s have been longtime participants in the city’s various business marketing programs, but smaller boutiques have been less responsive, Konheim said.
Anthony J. D’Ambrosio, executive vice president of watch retailer Tourneau, said the retail committee has provided an opportunity to market to tourists in New York, as well as address more specific issues that affect retailers here.
“The current mayor has been good for the business of New York,” D’Ambrosio said. “We focus on a lot of different issues, such as the sellers of counterfeit products and street vendors. That is in the process of getting much better.”
Bloomingdale’s Keating added that, from the store’s perspective, the program has been an important tool to build the awareness of Bloomingdale’s as a shopping destination to tourists.
“The more support we have with advertising and media, it makes it easier for people to understand where the shopping destinations are,” Keating said.
“Cristyne Lategano has been very anxious to make sure that retailers were happy. They’ve been receptive to anything and everything,” she said. “Our wish is to continue to make sure the information of what’s available in New York City gets distributed on a worldwide basis.”

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