Some local retailers spend more, not less, this holiday season

Job losses and plunging stock markets have made for a tough holiday sales season, but some local retailers say they're spending more on things like elaborate window displays and complimentary gift wrapping to persuade shoppers to push aside their economic concerns and splurge.

Only time will tell if it's a smart move: The prevailing wisdom says retailers are better off putting their money toward price cuts this cash- and credit-strapped season.

In fact, a third of chief marketing officers at 100 large U.S. retail companies say they're working with smaller budgets than a year ago, hoping to bring costs in line with lowered sales expectations, according to BDO Seidman, a Chicago accounting and consulting firm.

For many retailers, though, catering to bargain-driven shoppers isn't possible, especially when "70 percent off" is the new "60 percent off," and so on.

Small, locally owned retailers are less able than large national chains to negotiate lower prices from their merchandise suppliers, making it more difficult for them to offer shoppers deep discounts and still turn a profit, says Marti Kopacz, who works with troubled businesses as a managing principal at Grant Thornton Corporate Advisory and Restructuring Services.

For them, the best advice might be to provide the kind of personalized attention that can't be found elsewhere, she says.

Here's a look at some of the things local retailers are doing (besides slashing prices) to drive business this season:

Free gift wrapping

You won't see "60 Percent Off!" signs upon entering Karan Dannenberg's namesake clothing store on First Avenue in Seattle's Belltown neighborhood. Instead, you'll see lots of black and gold ornaments in the front window. Dannenberg says she spent about $2,000 decorating the window, twice as much as last season.

She says she also spares little expense on complimentary gift-wrapping service, noting that she tries to match decorations to each customer's tastes and spends up to $10 per box, regardless of whether it contains a $35 pair of gloves or $3,000 coat.

"Isn't this fun," she says, holding up a white box topped with red and gold tulle, curly ribbon, holly, glitter and a miniature cello.

"In this kind of economy, I think you have to do more than normal to get attention and bring people in," says Dannenberg, who also reaches out to customers through e-mails and phone calls and makes special orders on their behalf.

"This isn't our biggest year, but I'm grateful I have totally loyal, faithful customers who continue to shop no matter what," she says. "I thought, if I don't acknowledge them, I might as well close my doors."

Drinks, gift giveaways

Step into Pulp Lab in Ballard any Saturday this month, and you're likely to be handed a champagne flute containing a pomegranate mimosa (recipe courtesy of Gourmet magazine). Owner Kate Pawlicki, whose store sells clothing by up-and-coming designers, says the point is to make shoppers feel "like they walked into a party."

She says Pulp Lab gave away more than a dozen mimosas this past Saturday, no purchase required. "Just come and see what we have, get to know us and stick around a while," she says. "It's kind of a nice thing to walk into."

Pulp Lab also offers a pack of note cards for free with any purchase of $45 or more through the holidays.

"Our focus is on small production and knowing where the clothing comes from," Pawlicki says. "But when everyone is offering a sale, to do nothing is not appropriate.

"Hopefully, it's about relationship-building, too," she adds.

Holiday party

More than 300 people turned out for a party Friday night at Parkplace Books in Kirkland, where they were treated to complimentary food catered by several local restaurants and live music by blues singer Mark DuFresne and pianist Annieville Blues.

Mary Harris, who owns Parkplace Books with Rebecca Willow, says the store has thrown less-extravagant parties in the past, but its landlord at Parkplace shopping center offered to pick up the tab this year after finding money left over in its advertising budget. Harris estimates the party cost about $4,800.

"We consider ourselves Kirkland's community book store. This is a way to invite our customers to celebrate the holidays with us and thank them for their support through the year," Harris says, noting that the three-hour event also collected four crates of canned food for KITH (Kirkland Interfaith Transitions in Housing), plus about 50 books for children.

The economic recession "has really hit us badly," she says. "We would have held the party — it just wouldn't have been as fancy an affair as it turned out to be" without the landlord's hefty contribution.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com