Dec. 11--Neiman Marcus Inc. reported Wednesday that fiscal first-quarter profit fell 84 percent after the luxury retailer slashed prices to drive sales. The Dallas-based company sees more of the same ahead and is delaying store openings and cutting expenses.

While it isn't planning to close stores, Neiman's will move previously announced openings in Sarasota, Fla., and Princeton, N.J., back a year and put its Cusp boutique plans on hold indefinitely, said chief executive Burt Tansky.

Capital spending has been cut 26 percent to a range of $115 million to $125 million in fiscal 2009.

Customers are responding to the aggressive markdowns as stores try to cut inventory to match lower demand, he said. Throughout the quarter, discounts increased, and that level of promotion will continue, he said during a conference call. "This isn't anything we've been through before."

With each new season "comes the opportunity to start fresh," Mr. Tansky said. The company is planning for another challenging year in 2009 and is buying "very conservatively for next spring and fall," he said. "If sales improve, we will get the merchandise we need."

Will it be hard to return to full-price selling, a hallmark of luxury shopping?

"Customers will return to a more normal level of shopping as the economy returns," he said. "We believe our most loyal customer still has the financial ability to shop with us. However, the uncertainty that is prevalent in the economic landscape has caused her to pull back on the quantity of her purchases."

He didn't agree with analysts who asked whether a permanent shift is under way.

"It's way too early to determine whether customers' desires have changed," he said. "It would be helpful if the dollar strengthened, the euro weakened and prices eased."

The longer the downturn lasts, the harder it will be to get shoppers to pay full price again, said Sean Egan, co-founder and principal of Egan-Jones Ratings Co. "There's been a sea change in the consumer psyche the last six to 12 months. ... Fewer people are likely to plunk down $1,500 for a pocketbook."

Neiman Marcus reported net income of $12.9 million in the quarter ended Nov. 1, down from $78.8 million a year ago.

Operating earnings also declined 50 percent to $81.6 million compared with $189.7 million last year.

Total sales fell 12.7 percent to $986 million from $1.13 billion. Same-store sales fell 14.5 percent.

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