The reason: Fashion producers are trying to anticipate consumers' tighter budgets and avoid last year's drastic markdowns, which can undercut a brand's perceived strength. "The 70% discounts we saw during the holiday season are risky not just for brand integrity but brand equity," says Erwan Rambourg, luxury and sporting goods analyst at HSBC.

Despite all the sales, retailers posted big losses in the second quarter. In March, Neiman Marcus announced a second-quarter loss of $509 million. At J. Crew Group (nyse: JCG - news - people ), the loss was $13.5 million.

As a defensive action, clothing makers are tightening belts, making do with lower profit margins and passing along the cuts to consumers in the form of lower retail prices.

For the fall, Lacoste will offer cable-knit sweaters, normally $145, for $98, says Robert Siegel, chairman and chief executive of the company. In spring 2010, Lacoste plans to lower prices in other categories, including its signature polo shirts. Price cuts do not mean a cut in quality, says Siegel. "We are taking it out of our own margins in our attempt to be more consumer-friendly."