Department Stores Stock The Aisles With Fewer Items

For those still out shopping last winter, department stores represented a rare opportunity, tons of inventory marked deeply down. Don't expect that magic to happen again. More and more stores are announcing that they are reducing inventory so as not to be left holding the bag if shoppers fail to show up. Saks CEO, Stephen Sadove tells Bloomberg that "across the board you are going to find less of the sizes, less of the availability in almost all of the categories." He also says that markdowns won't be as dramatic as they were last year. While in previous years the buzzword was "masstige" offering luxury for everyone now Sadove says that "luxury has always been about scarcity."

The ripple effect of department stores cutting back inventory has already made it increasingly hard for some designer labels to survive. Neiman Marcus and Saks have both said they are cutting back on lines that don't sell well and linger on the racks. And the recession also seems to be stifling creativity a bit. Stores are looking for staples, classics and safe bets to stock their stores. The avant-garde, trendy and daring is too risky if there are fears that it won't sell. Brands are making one or two versions of a particular style rather than a wider range. Retail sales are expected to rise slightly by the end of this year but it won't be enough to make up for last year's sharp losses.