- The Washington Times - Tuesday, March 17, 2009

NEW YORK (AP) - Moody’s Investors Service on Tuesday it lowered its long-term credit ratings on high-end department store chain Saks Inc. due to the company’s operating losses and a slowdown in sales of luxury items.

Moody’s cut the company’s corporate family rating to “B2” from “B1” and lowered its probability of default rating to “B3” from “B1.” Moody’s also cut the ratings of several senior unsecured notes to “Caa1” from “B2.” The ratings are all speculative grade.

Moody’s outlook on the ratings is negative.

Moody’s said it expects Saks to continue to report losses for the next 12 months as more consumers cut back on luxury goods.

“Moody’s believes that the luxury goods market is susceptible to the risk that the current recession, financial market turmoil, and material decline in financial wealth by many consumers results in a fundamental shift in consumer shopping habits over the medium to longer term,” the ratings service said in a statement.

Saks reported a loss in its fiscal fourth quarter ended Jan. 31. The company said it had been forced to slash prices to entice consumers to buy.

Saks shares rose 11 cents, or 6 percent, to $1.93 in afternoon trading. The stock has ranged from $1.50 to $14.58 over the past year.

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