Cautious consumers in a faltering economy. ... A cluster of new high-end specialty stores at Ross Park Mall. ... The splashy arrival of Nordstrom, a major luxury department store.

Together, a trio of realities with serious implications for the local fashion retail scene.

And with the additional challenges already facing Downtown -- construction-related traffic snarls and chronic parking woes, for starters -- some are wondering what effect it all will have on Saks Fifth Avenue, Pittsburgh's grand dame of high-end fashion retail.

Here since 1949 and at its current Smithfield and Fifth site since 1977, Saks Pittsburgh has survived trying economic times and outlasted specialty-store rivals.

But challenges persist, such as the announcement last week of the worst October for retail sales in more than 35 years -- and that the Saks chain posted a drop in sales of 16.6 percent compared to October 2007. (Nordstrom dropped 15.7 percent among its stores that were open during both periods.)

Projected sales through the end of the year are bleak, with little hope for the meaningful boost that the holiday season traditionally provides. Although independent specialty stores tend to be particularly vulnerable to adverse market forces, even big players such as Saks and Nordstrom feel some impact.

The tough business climate that seems to be worsening by the month isn't something fashion retailers like to discuss. They don't like to talk about competitors, sales floors increasingly bereft of shoppers, or factors that have led to early and substantial price discounts.

But behind the scenes, they're formulating strategies to meet sales goals and to hit the numbers they need to turn a profit.

Both New York-based Saks and Seattle-based Nordstrom cater to an upscale clientele with designer fashions, prestige beauty brands and specialized services unavailable at better department stores such as Macy's and discount and mass retailers such as TJMaxx and Target.

Although the two stores have much in common -- exclusive lines, prestige labels, eye-popping prices -- there are also some differences. That you'll find Chanel womenswear at Saks but not at Nordstrom, and House of Dereon at Nordstrom rather than Saks, gets to a subtle difference in female demographics of store customers.

Nordstrom counts among its pluses an in-store cafe that serves up the likes of lime-cilantro chicken salad and penne bolognese. It's another revenue generator, whether a shopper decides to eat or a diner ends up doing some shopping.

Nordstrom also has gift cards available at Giant Eagle through the grocery chain's popular Fuel Perks program, an attraction to shoppers who want discounts on gas while spending money.

There's also Nordstrom's promise to underprice any competitor offering the same item. When one considers that Nordstrom and Saks carry some of the same lines -- St. John, Lafayette 148 and Juicy Couture, to name a few -- the policy may give Nordstrom an advantage.

Blake Nordstrom, a president with the company, recently said Nordstrom isn't worried by what could be an extended economic slowdown.

"We've ben fairly conservative financially. We're in a position of strength, we think, to ride this out."

The merchandise in brand-spanking-new Nordstrom is organized with an edgier, hipper feel than at Saks, which could benefit from modernization. In a competitive retail environment, ambiance is as important as good service in getting consumers to part with their money.

"Customers have to be able to walk in a store today and see something that excites them," said Susan Rolontz, executive vice president of the New York-based Tobe Report, an international group of fashion and retail analysts and consultants.

"Nobody has to have the clothes on your racks unless they speak to them. You have to have something that she doesn't have and that she wants. Customers can walk in and walk out these days. They are much more discerning, much more critical. Nobody's full steam ahead. They're spending less, no matter who they are."

Saks has long relied on customer loyalty to their quality merchandise and services.

"Saks Fifth Avenue has been the epicenter of the luxury market in Downtown Pittsburgh for over 60 years," said store manager Karen Peter. "Our customers have been with us through generations and have come to rely on our fashion perspective, the breadth of our merchandise assortment and the exemplary service of the associates with whom they have built long-standing relationships. Our focus has always been and will continue to be our customers."

The air is undeniably more rarefied at Saks, which has higher price points than Nordstrom. The Pittsburgh store also benefits from the sterling reputation of its legendary flagship in Manhattan, which is at the pinnacle of luxury shopping in America.

Nordstrom has a staff of personal shoppers, but Saks' exclusive Fifth Avenue Club takes special treatment to another level with various perks for customers. Last month, the club hosted a special bottle-signing meet-and-greet featuring Bond No. 9 New York fragrance company founder and CEO Laurice Rahme.

Through the complimentary club service, a customer can set up an appointment with a store associate, who selects an assortment of clothing and accessories based on the customer's specific needs and tastes.

"This amenity is open to everyone who shops with us," said Ms. Peter.

Saks Pittsburgh prides itself on being the only local retailer of some exclusive prestige brands, from Escada apparel and various fragrances to the recent addition of Sisley skin care and cosmetics. More than a dozen new lines were added this fall, from Gucci and Prada men's shoes to William Rast Jeans and Tibi for women and ladies' footwear by Jimmy Choo and Tory Burch.

The store also has increased its number of trunk shows, designer visits and other special events, ranging from a made-to-measure shirt event for men two weeks ago and jewelry trunk shows last week, to apparel trunk shows and a fur event this week, to a department-wide beauty event scheduled for Saturday.

These are among the wisest moves a luxury retailer can make in the current economy, industry observers say.

"They all have to speak to their customer in a personal, direct way," said Kathy Grannis, spokesperson for the Washington. D.C.-based National Retail Federation. "And they're doing that through specific private sales and excellent customer service. Retailers across the board are trying to create a personal bond with their customers so that they see them this season and don't lose them to competitors."

Like other pricey fashion retailers, Saks and Nordstrom have sales and price reductions indicated by discreet rack-top signs. Some markdowns are earlier than are traditionally seen this far in advance of Thanksgiving, when holiday sales and shopping usually kick off in earnest.

"The sales are far and wide and deep," observed Ms. Grannis. "Retailers recognize what consumers are going through this year. And they want to get their attention and stretch out holiday shopping as far as they can."

There are also indications that even recession-proof luxury shoppers are spending less -- not a good sign when one considers that luxury has remained strong in recent years even as other fashion sectors have struggled.

"What we might see this holiday season is that while luxury retail typically does very well during a down economy, the affluent customer this year has actually been impacted with everything that's going on just as much as your mid- to lower-income shopper has," said Ms. Grannis.

So to remain viable, the folks at Saks and Nordstrom will have to redouble their efforts to present exciting merchandise, provide exceptional service and strengthen relationships with existing customers.

The task may be even harder for Nordstrom, which is introducing itself to many Pittsburgh consumers for the first time. At the same time, many consumers are curious about what the store has to offer.

Now is a transitional time -- not the end time -- for high-end retail, experts say.

"This isn't the end of the luxury business or the designer business," said Ms. Rolontz. "This is a renegotiation, a change in the story in times that are economically not so hot. Retailers are always positive, but the business will not be as financially runaway madcap as it has been."

Part of Saks' plan to stay at the forefront is to take advantage of its central location and to focus on what it knows to work.

"We will continue to be proactive with our new customer outreach and to position our store as the destination in Downtown Pittsburgh to find that great gift for the holidays, that perfect outfit, or spend a Saturday afternoon," said Ms. Peter.

Saks' longevity and community involvement through charity initiatives gives it a foothold here, she added. "We will continue to support these relationships and create compelling events to entertain our customers."

While acknowledging that "this is a difficult environment for all retailers," Ms. Peter noted that Saks "operates successfully in several of its markets where there is also a Nordstrom present."

If she's at all worried about her store's future, it's not showing.