They often like it when you dress down, but they also appreciate it when you usually look neat and professional. It sends the message that they are worth looking nice for and that what you have to teach is important enough to you. Children are like wet cement. Whatever falls on them makes an impression. I remember a junior high school teacher I had for social studies who always wore purple sweatsuits.
Kids can be mean.
But they aren't dumb. We picked up on her message that we weren't worth the time to dress nicely. We interpreted it as disrespect and responded in kind. In a school climate that seems not to value professional appearance, it is difficult to stand out and be the one who insists on looking appropriate for the classroom. Others around you may be dressed very, very casually.