Luxury sales in the retail sector are still under par, and a full recovery is not expected until 2010. But high-end retailers are finding workarounds that could keep the luxury retail exchange traded fund (ETF) afloat.

Retailers have been cutting back their inventory as a result of the consumer-spending implosion, and this has affected the luxury retail goods part of the market. For example, LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury-goods company, on Monday said its third-quarter sales slipped 0.6%, reports Christina Passariello and Vanessa O’Connell for The Wall Street Journal.

LVMH, a bellwether for the luxury-goods industry, declined to give a full-year profit forecast even though all of its divisions performed better in the third quarter than in the first half of the year. Overall, analysts say this industry is unlikely to see a turnaround until 2010-2011. (Other retail strategy shifts).

The way that the designer end of the fashion industry has coped is to make a “bridge” label that stands between the high end low end.

Mid-range designer labels such as Tommy Hilfiger, Dolce & Gabbana and Tory Burch are all marketing to the space in between major designer brands and the contemporary market, Katie Weisman for The New York Times explains. This strategy has positioned such designers to prosper even as sales have slowed across the board. (How the retail sector has changed).

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• Claymore/ROBB Report Luxury ETF (NYSEArca:ROB): although it’s up 51.4% year-to-date, it’s still 51.4% off its 2007 high; LVMH Moet Hennessey Louis Vuitton, 4.4%; Nordstrom, 4.1%

Tags: Retail, ROB, Sector ETFs