Even luxury businesses feel holiday pain

The holiday outlook for the luxury world turned grimmer Tuesday, after Saks Inc. reported a wider-than-expected loss in the fiscal third quarter, and both it and Burberry Group PLC offered downbeat forecasts.

Neiman Marcus, which is set to report fiscal first-quarter results on Dec. 10, has also suffered since the financial meltdown intensified in September. Last month, the chain saw a 14.5 percent drop in same-store sales for the quarter ended Nov. 1. Same-store sales are sales at stores opened at least a year and are considered a key indicator of a retailer’s health.

The silver lining? Shoppers with a big appetite for status handbags and fashions are getting fat discounts. Saks has slashed prices by up to 60 percent. Neiman Marcus is offering an additional 40 percent off on already reduced merchandise. And in a highly unusual move for a luxury retailer, Saks is promoting a generous financing offer for its credit card holders.

Here is a recap of results from Saks and Burberry:

Saks Inc., which operates Saks Fifth Avenue

PROFIT: Reported a wider-than-expected loss in quarter ended Nov. 1

SALES: Down 13 percent

SAME-STORE SALES: Fell 11.5 percent

OUTLOOK: Did not offer specific guidance but said profit margins will further deteriorate in the fourth quarter as it keeps discounting. Cut capital expenditures by 40 percent for fiscal 2009 from the current fiscal year. Planning inventories down 15 percent for spring.

Burberry Group PLC

PROFIT: Up 13 percent in the first half of the fiscal year, ended Sept. 30

SALES: Up 20 percent.

OUTLOOK: Business is “more difficult,” the company said, particularly in the U.S. “In U.S. retail, a higher proportion of sales is now going through outlets at a lower gross margin,” it said in a statement to the London Stock Exchange. “In U.S. wholesale, Burberry anticipates lower department store reorders.”