Lawrence sales tax collections off to slow start in 2018; chain retailer with downtown location files for bankruptcy
My family jump-started the Branson, Mo., economy last week by traveling to Silver Dollar City and its new roller coaster, the Time Traveler. (Note: It is called Time Traveler because by the time you are finished standing in line, you are in a new century.) Thus far, Lawrence is still waiting for something to jump start its economy in 2018, according to the latest sales tax reports.
The city now has received its sales tax distributions for January and February, and Lawrence isn’t doing as well as several other area communities. That is a reversal of the trend of the last couple of years, when Lawrence was near the top of the pack in terms of sales tax growth.
Through February, Lawrence’s sales tax collections actually are down by 0.5 percent year-to-date compared with the same time period a year ago. It is still early in the year, so not too much should be made of the decline. Plus, the early results have been pretty inconsistent. January sales tax collections — which, due to the lag time in reporting, actually represented sales made in December — were up by 4.1 percent compared with January 2016. So, that may be a sign that local retailers had a pretty decent Christmas shopping season. But February’s sales tax collections were down by 4.4 percent compared with a year ago. Thus far, sales tax collections have been a bit like that roller coaster. (Note: While intense, the Time Traveler is not the scariest attraction in Branson. That is still the Tanger Factory Outlet Mall.)
Perhaps more interesting is that Lawrence is getting off to a slower start to 2018 than many other area communities. Of the 10 large retail communities I track, six of them posted increases in sales tax collections compared with a year ago. Lawrence was part of the group of laggards, which is a departure of the trend from the past couple of years. Here’s a look:
— Kansas City, Kan.: up 37.2 percent
— Olathe: up 4.6 percent
— Lenexa: up 3.5 percent
— Overland Park: up 2 percent
— Shawnee: up 1.7 percent
— Saline County (Salina): up 1 percent
— Lawrence: down 0.5 percent
— Sedgwick County (Wichita): down 0.9 percent
—Topeka: down 1.7 percent
— Riley County (Manhattan): down 5.1 percent
Sales tax collections are important for a couple of reasons. One, they provide a glimpse at the health of the local retail industry. But sales taxes also have become a critical part of the City of Lawrence’s budget. The city is counting on sales and use taxes to generate $40.2 million worth of revenue for the 2018 budget. Even with sales tax collections being down a bit from last year, the city is still on pace to meet its budget for 2018.
But it is still early, and if February’s collections mark the beginning of a new trend, the city will find itself in a hole.
In other news and notes from around town:
• I guess I should tell you to keep an ear open for news about Claire’s, but be warned that the company tends to pierce any ear it gets hold of. Claire’s is the national chain that sells jewelry geared to the teen market and bills itself as the leading supplier of ear-piercing services in the U.S. The company has a store at 647 Massachusetts St. in Lawrence.
Claire’s on Monday announced that it has filed for Chapter 11 bankruptcy protection. However, if you are to believe the most recent statements from company officials, the Lawrence store shouldn’t be at any risk of closing.
The company said via a release that it has reached agreements with several of its major lenders to restructure its debt. The company said its operations have been improving and are profitable. However, it was saddled with large amounts of debt left over from a previous private equity buyout.
The company plans to eliminate about $1.9 billion in debt as part of the bankruptcy process. It plans to emerge from bankruptcy in September.