Survival of the fittest—that's how retail and fashion experts are describing the coming months. The spring runway shows in New York, Milan, and Paris have ended, and retail buyers have placed their bets for next season. Now, more than ever, their decisions about spring inventory could determine which stores make it through the downturn and which shut their doors.

The pressure is causing anxiety through all levels of the retail chain. "All of a sudden, there is a fear factor that we had not seen in several years—maybe ever—in our business," says Carol Hoffman, executive vice president of the Donegar Group, a retail and fashion analysis firm.

So far, lower-price chains have felt the tightest squeeze. The 59-year-old department-store chain Mervyns announced last week that it would liquidate its $2.5 billion business after failing to find a buyer, Steve & Barry's filed for bankruptcy then was sold, and the Boscov's department-store company has filed for bankruptcy protection. Overall, the Standard & Poor's retail index has lost more than 40 percent of its value since October 2007.

While higher-end brethren have survived, their numbers aren't pretty either. This month, Neiman Marcus reported a 15.8 percent decrease in sales for stores open more than a year. Saks and Nordstrom were down nearly 10 percent.

With stats like this, several major retailers declined to comment on their spring buying. "People are playing it very close to the vest," explains John Mincarelli, professor of fashion merchandising at the Fashion Institute of Technology.

But behind closed doors, many are testing inventory strategies to survive, and maybe even rebound, in the spring. Some boutiques are focusing on items that appeal to customers emotionally, rather than wardrobe basics. Buyers for retailers are cherry-picking more sparingly from designers' collections. And across the spectrum, retailers are holding back spending to protect themselves from softening demand—and potentially to benefit from last-minute deals on merchandise.

Many retailers have reduced the amount of inventory they buy in advance, says Mincarelli, who also consults for companies such as Macy's. Ordinarily, a store might place orders for 95 percent of its expected spring sales, but this year that number has dropped to more like 80 percent.

The next big question is how to allocate those dwindling dollars. In strong economic times, retailers could afford to be dazzled by runway shows—such as the ones that earned high praise in Paris this year—and buy accordingly. But these days, budgets reign supreme.
 

"You always expect in Paris that you're going to be really wowed," says David Rubenstein, the buyer for Jeffrey, a high-end, trendsetting boutique in New York and Atlanta. "In Paris, we found lots of gorgeous things, but we were extra discerning and as cautious as we could be."

Howard Aubrey, president of the Isabella Company, which markets and distributes lines for several European designers, says he's noticed a similar phenomenon among his customers. "Even if [buyers] love, love, love a collection, they're not going to buy more than they intended to. They're sticking to their guns."

That doesn't mean that retailers are necessarily retreating to black pants and other wardrobe staples. In fact, some specialty stores are doing exactly the opposite. "If the customer wants [black pants], she'll go to a Gap," Hoffman says. Mincarelli says he's noticed this tendency in his own buying habits. "I'm not buying another blazer unless I get a hole in the elbow."

But a savvy buyer can override even that kind of resolve. "I know one thing—I will not walk into Bergdorf Goodman this year," says Mincarelli. "Because if I see the winter coat that captures my imagination, I'm not going to be able to deny myself. And Bergdorf counts on those customers who cannot deny themselves."

It's all about wowing the customer, says Rubenstein. But these days, the price point is a larger consideration. "In the past, we might have bought an amazing item for $7,000 or $8,000 retail. Now we're not buying those kinds of items—we're focusing on more affordable," he says.

Retailers are also reducing their risks by selecting from collections rather than buying entire lines, just as a music shopper might select songs on iTunes. "You pick the hit or two that you want and don't buy the whole album," Mincarelli says. "It's really hard for designers, because the whole collection doesn't come through."

Hoffman says this isn't a new phenomenon with the retailers she represents. "If a piece doesn't stand on its own, then there's real reason to consider not buying it." But the choosiness has become even more pronounced during the credit crisis.

The effects of this crisis are still trickling down on consumers. The Reuters/University of Michigan index of consumer confidence suffered the largest drop this month in the history of the index, and retail analysis firm TNS Retail Forward are predicting the worst holiday shopping season since 1991.

To Mincarelli, this type of environment is the best test of a buyer's skill: "Good buyers are going to max this out," he says. "Talent comes to the fore in hard times."