"We tried really hard to spend money," said Prentice, 42, a Minneapolis resident whose favorite brands include Missoni, Trina Turk and True Religion. What they got was "really frustrated."

U.S. luxury chains may stand to lose more sales to shoppers like Prentice as they remain wedded to conservative plans for high-end inventories and are unable to shorten delivery times for designer clothes, shoes and accessories, said Stacey Widlitz, a retail equity analyst at Pali Capital in New York.

"The luxury retailers may be caught short when there is a turn," Widlitz said in a telephone interview. "Investors should keep in mind that that may delay their recovery behind other retailers, because it will take them more time to get inventories up to speed."

"Departments stores are being very, very careful at this time on making orders," the designer said in an interview at Milan Fashion Week. "They are negative and pessimistic and this they transmit to the final consumer."

European retail sales declined for a 14th straight month in July as rising unemployment prompted consumers to rein in spending. Saks Inc., Neiman Marcus Group Inc. and other luxury retailers are reducing orders this year to limit supply and boost profitability. Wholesale revenue at Burberry Group Plc dropped 28 percent in the first quarter, while Hermes International SCA has said department stores are cutting orders.

• Lord and Taylor said they are still carrying jewelry but would not give details about future plans for fine jewelry.
• Some Macy's department stores will be maintaining jewelry counters in-house.
• Bon-Ton Stores would not comment.
• Bloomingdale's paid Finlay's for some jewelry related assets but would not comment on future fine jewelry plans.

And the impact will mean both sweeping changes in the merchandise on their shelves and subtler alterations, like how many pantyhose to keep in stock. High-end stores like Neiman Marcus, Saks and Coach will offer more midpriced merchandise. Many chains, including Wal-Mart, will carry less inventory and fewer brands. The likes of Sears and J. C. Penney will put self-service computers in stores so customers can browse collections or buy out-of-stock items. And retailers of all stripes will offer more exclusive merchandise and more attentive customer service.

*****

At high-end stores, the era of ever-escalating prices on luxury goods appears to be over. In the future, consumers will still be able to buy chic brand names, but at a wider range of prices. "Our customer loves our brands," said Stephen I. Sadove, chairman and chief executive of Saks. "They don't want to trade down to lower brands. But they want more of a range in price within the brands that they love." And that is what retailers intend to give them. Burton M. Tansky, president and chief executive of Neiman Marcus Group, told investors on a conference call last week that "we're working with the designers to try and ease a portion of their collections into a new price range." Prices will also be lower at some "affordable luxury" chains, like Coach, which is increasing the proportion of handbags it sells for less than $300. About 50 percent of the company's handbags will cost $200 to $300, in contrast to about 30 percent of handbags last year.

Another change is that consumers will have fewer brands from which to choose. Wal-Mart, Target, Home Depot, and PetSmart are just a few of the chains winnowing their brands. As Home Depot's executive vice president for merchandising, Craig Menear, put it: consumers are "time-starved” and “looking for simplification in the entire shopping experience."

The Boscov family, who purchased the assets of the 39-store Boscov's chain out of bankruptcy in December, expects to have government loans and guarantees in place by June 2. "We're moving along well," chairman Albert Boscov said last week after several encouraging developments. Those took the form of a $500,000 loan guarantee from Cedar Shopping Centers and a promise by Luzerne County, Pa., to backstop another $500,000 from Atlantic County, N.J., should the appropriation fail to get government approval.

Those funds, added to $35 million from Pennsylvania and the cities and counties where Boscov’s has anchor stores, combines with $1 million from New Jersey for a total close to the $40 million financing that is needed.

Fear of losing Boscov's successful anchor stores appeared to drive last week's deal-making. Atlantic County executive Dennis Levinson expects the county freeholder board "to weigh all the alternatives, none of which are good, and do the right thing."

Excluding restructuring charges, Macy's lost 16 cents a share for the quarter, better than the 19- to 21-cent loss the company predicted. "Our first quarter sales were consistent with our initial expectations, while earnings and cash flow performance were better than expected," said Terry Lundgren, chairman, president and chief executive officer.

Lundgren said the company has a new, leaner organizational structure in place and that the My Macy’s localization initiative has been completed.

For the quarter ended Jan. 31, the company posted a net loss $149.3 million, or $2.03 a share, compared with year-earlier net income of $47.3 million, or 63 cents a share.

The latest results included $1.72 a share in store-closure and hurricane- related charges.

Total revenue declined 5.7% to $2.08 billion as merchandise sales dropped 9% and same-store merchandise sales decreased 8%.

Gross margin fell to 24.8% from 32.4%, reflecting increased markdown activity.

"Given the decline in our department store business over the past five years coupled with the strenuous economic conditions... we view our strategic plan to exit this business segment as a necessary measure," Chief Executive Arthur Reiner said.

Shares of the company rose 67 percent in afternoon trading on over-the-counter bulletin board.

Finlay, which operates counters at department store chains like Macy's Inc (M.N), said it will reduce its cost structure to levels appropriate to support its specialty jewelry store business.

It plans to do this through job cuts in its administrative functions, mainly at its New York headquarters, besides sales positions at the affected locations.

Prices may come down this year at Nordstrom Inc. "The average price" has "gone up a bit for us in the last couple of years," said Peter Nordstrom, president of merchandising at the upscale chain, which had recently been ramping up the level of high-end fashion merchandise in its stores. "We can bring our average price down a little bit," he added.

But bargain-minded shoppers ought to think twice about using their Nordstrom-brand credit cards.

Those with balances on Nordstrom cards will pay about 3% more in finance charges, on average, thanks to new pricing on the cards that took effect with December statements. The price increase was discussed Monday afternoon during a conference call with Wall Street analysts. Nordstrom's income from credit-card finance charges is expected to continue to rise for 2009.

Neiman Marcus Inc. said Monday that it will cut an additional 450 jobs this week and that salaried employees are taking a pay cut. The layoffs are companywide "across all divisions and across all levels," said Ginger Reeder, vice president of corporate communications.

"We are disappointed with this outcome," said Mervyn's Chief Executive John Goodman. "Although we took a number of steps to improve our financial performance, we were unable to return the company to profitability." Mervyn's joined other retailers such as Linens 'n Things that decided to fold their operations after the financial-sector meltdown squeezed off sources of financing for companies across the board, let alone struggling chains seeking a turnaround, analysts have said. Mervyn's deep discounts during the holidays, the industry's biggest selling period, are also expected to further pressure rival department stores and other retailers that already are headed for their worst holiday season, by some measures, in 17 years.