NEW YORK — Saks Inc. reported a wider-than-expected loss for the third quarter Tuesday, as the company resorted to deep discounts in an attempt to pull in affluent customers spooked by massive job losses on Wall Street and shrinking stock portfolios.

The New York-based operator of Saks Fifth Avenue issued a dour outlook for the holiday season, predicting deteriorating profit margins in the fourth quarter as it sees the need to keep discounting to clear out piles of designer merchandise. It also plans to cut spring inventory by 15 percent and reduced its capital expenditures for next year by 40 percent.

Saks' shares dropped more than 14 percent, or 56 cents, to close at $3.29, and hit a fresh low of $2.71 earlier in the session. Over the past 52 weeks, shares have traded as high as $22.19.

Describing the current environment as "unprecedented," Chairman and CEO Stephen I. Sadove told investors that the company's shoppers are in "frozen mode." "Clearly, our customer doesn't feel wealthy. They are not in the mood to shop," he said.

Saks reported a loss of $42.8 million, or 31 cents per share, for the quarter ended Nov. 1. That compares with a profit of $21.6 million, or 14 cents per share, a year earlier. Net sales fell 13 percent to $698 million from $796 million a year ago.

Excluding one-time items totaling $24.5 million, or 18 cents a share, Saks' loss was 13 cents per share. The charges including costs associated with closing its Club Libby Lu specialty store unit.

Analysts surveyed by Thomson Reuters expected a loss of 3 cents a share on revenue of $712.7 million.

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Like many luxury retailers, Saks had seen its business slow this summer as the economy deteriorated, but the financial crisis intensified in September, leading to massive layoffs at investment firms, plummeting stock prices and a dramatic cutback in spending by the wealthy.

British luxury goods company Burberry Group PLC gave a downbeat forecast as well, saying as it reported a 13 percent rise in first-half net profit that business in the second half of the year was proving more difficult, particularly in the United States.

Saks has tried to pull shoppers in by slashing prices, including on new merchandise _ a move that hurt its profit margins. In a highly unusual move for a luxury purveyor, Saks is promoting a generous financing offer for its credit card holders _ no interest for one year for purchases of $2,000 or more until Dec. 11. The purchases have to be made in a single day.

Sales at its stores open at least a year fell at an increasing pace of 5.9 percent in August, 10.9 percent in September and 16.6 percent in October. That represents an 11.5 percent drop for the quarter overall versus the 11.4 percent same-store sales gain a year ago.

Same-store sales are a key indicator of a retailer's health.

In particular, Sadove noted that the New York flagship store, which accounts for about 20 percent of the company's overall sales, faced challenges as it felt the fallout of the financial meltdown. The store usually does better than the balance of its store base, but in the latest quarter, sales there fared only slightly better than the company average.

Saks saw "widespread weakness" in women's apparel, Sadove said, and softness in areas such as women's shoes and handbags that had delivered explosive growth during 2008.

Sadove noted that when the company originally planned for fall 2008, it expected low single-digit same-store sales growth. But he acknowledged that the rapid deterioration in the retail environment caused the "gap between sales trends and inventory levels to widen." He said the company is working with suppliers to adjust inventory levels, including returning merchandise and canceling orders where possible. But Sadove warned that it will take a couple of quarters to fix the inventory issue.

The company said it expects capital spending of approximately $75 million next year, down from fiscal 2008's $125 million.

Saks expects to finish closing all 98 Club Libby Lu stores by the end of its first fiscal quarter ending May 2. Club Libby Lu, which Saks bought in 2003, caters to girls between the ages of 4 and 12.