Many consumers today would rather spend $25 for shoes than $150 for a similar (although better-quality) pair. “Consumers today have less passion for fashion than at any other time, other than major recessions,” says retail analyst Marshal Cohen of The NPD Group. “Kids today would rather have the right cellphone than the right jeans.”

So even as Liz Claiborne shut down its high-end namesake stores, it was hitting on success with the acquisition of less expensive branded retail stores like Mexx, and opening more of its Lucky Brand stores. And Liz is far from alone: Oscar de la Renta debuted a lower-cost line, as did designers Michael Kors and Karl Lagerfeld. Although a few designer retailers, including Ralph Lauren and Armani, seem able to manage a portfolio that ranges from designer duds to casual clothing, Cohen says the majority of brands can’t do it. “We’re clearly in an acquisition trend,” he says. “The trick is to buy companies that round out your product line. Like if I’m in the dress business, maybe I’ll buy something in the casual business. So when dresses go down and casual goes up, I’m still okay.” '