After a year of speculation about sell-offs and bankruptcies, the clouds in the luxury sector started to lift last November. Stores such as Bergdorf Goodman, Barneys New York and Saks Fifth Avenue have seen a slight uptick in sales, thanks to tourism, some pent-up domestic demand and the stock market holding steady.

This year, the latest forecasts are for no major Chapter 11s to materialize, although it’s anybody’s guess whether deals will be struck. According to financial sources, they’re more likely to be of a strategic character, rather than driven by private equity or real estate concerns.

Luxury firms are all still managing under the duress of the tough economy, with significantly lower inventories, less dramatic markdowns, cash building up, reduced expenses and realistic expectations. They’re also focusing more on accessories, cosmetics, shoes and contemporary sportswear, which continue to be among the busiest departments. Outlets are also perceived as an opportunity, with Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s among the retailers putting greater emphasis on the sector.

Still, no one expects the luxury business this year to return to pre-recession robustness — though the second half is seen as potentially better than the first.

The key to the future lies in employment levels rising, beefed up Wall Street bonuses, and from the retailer’s perspective, differentiating the assortment with exclusives and price alternatives. It’s not a matter of trading down. Rather, it’s about offering better value for the dollar, toning down the excesses, and being good at conveying to consumers why a product is special and worth the price.

“Luxury is not about excessiveness and overdoing it and being gaudy,” said designer Tory Burch. “It’s about elegance.”

Customers, said Stephen Sadove, Saks Fifth Avenue’s chairman and chief executive officer, still want to “touch and feel” the products. Interest in fashion and shopping hasn’t waned so much, but customers’ expectations have changed. As Sadove indicated, “Look at the Louis Vuitton ads now showing workmanship. It’s a justification of what makes the brand special. The new paradigm is getting to know the persona of the brand. “When there is innovation, the customer wants it.”

And last December, Neiman Marcus Group chairman and ceo Burt Tansky proclaimed, “The declines have started to diminish,” noting that over-the-knee boots, cashmere, contemporary sportswear, skinny jeans, leggings and new handbag shapes were pacing the holiday season.

There was more enthusiasm in November and December than all of the rest of year, he added.

“We see improvements and are pleased by that. But like anything else, improvements are slow in coming. They can be tentative,” Tansky said. “The customer is still facing the challenges of economic recovery. It’s hard to predict whether we have bottomed out. Hopefully we have.”

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