Though discount stores and retailers such as Wal-Mart are maintaining or increasing revenues in the rough economic climate, luxury department stores aren’t doing as well. As expected, most of the major high-end stores are seeing their sales decline much faster than other parts of the retail sector.
On Thursday, Nordstrom and Saks both reported that losses accelerated in February. The International Council of Shopping Centers had projected that luxury retailers would see an 8 percent loss this year, but they have now revise their forecast to 15 percent.
With many people are the country struggling to make their mortgage payments, it’s not hard to understand that luxury department store sales are dropping. Nordstrom, Saks and Neiman Marcus are all taking steps to protect themselves through reduced inventories, decreases in capital spending and job cuts. With the economy looking to be weak well into 2010, expect these types retailers to continue cost-cutting maneuvers.