Luxury-Goods Makers Debate Price Cuts as Wal-Mart (WMT) Prospers

While discount retailers like Wal-Mart (NYSE: WMT)(FREE stock trend analysis) and CostCo (NYSE: COST)(FREE stock trend analysis) cut prices and make hay in the recession, the decision to reduce prices is much harder for luxury-goods retailers to make.

Glamorous shoe designer Anyi Lu has cut its prices to $400 from $595 per pair, because, as CEO David Spatz says, "The days of conspicuous consumption are over."
The decision to chop price tags has resulted in a 69% increase in sales.

But other luxury-goods manufacturers feel that, once they cut prices, they will devalue their brands. Some have found new licensing or product opportunities to survive in the recession.