Reading the red-ink handwriting on the wall, Saks Fifth Avenue in mid-November slashed prices by as much as 70% on designer clothes, becoming one of the first retailers to discount so deeply. CEO Stephen I. Sadove says his action helped his company avoid massive losses, but it was, write Vanessa O'Connell and Rachel Dodes, "the first tug on a thread that's now unraveling long-established rules of the luxury-goods industry." Rivals including Neiman Marcus and Barneys New York responded by also slashing prices much more deeply and aggressively than usual which, in turn, clobbered smaller boutiques. Saks's maneuver marked an open …

Advertising is becoming a whipping boy for recipients of Troubled Asset Relief Program funds, Jack Neff and Jean Halliday report, leading to a conundrum. To drive sales, TARP recipients must spend on marketing. But that's tough to do when there are vocal constituencies among politicians, the media and the public denouncing marketing or advertising as an unnecessary expense. Polls show a heightened public outrage against anything that smacks of corporate waste or indulgence, including marketing expenditures that seem frivolous or overpriced, says Richard Luker, chief strategy officer of event-marketing firm TBA Global. Naming-rights deals (like Citigroup's $400 million sponsorship …

Tom Van Riper, in fact, says that Citigroup should shrug off any criticism about its deal with the Mets, including the barbs of congressmen like Dennis Kucinich (D-Ohio), and just play the game the way it's meant to be played. "The troubled bank needs to do business, and that means marketing," he writes. When done correctly, naming rights make money for the marketer, according to Van Riper. "In addition to the general exposure, a company like Citi gets its foot in the door to handle all of the banking for the team and the venue, access to players and …

Wells Fargo went on the offensive in a full-age advertisement in Sunday's New York Times after it cancelled employee outings in the face of public indignation. "Okay, time out. Something doesn't feel right," the ad begins. It then attacks "media stories" for creating the mistaken impression that every employee recognition event is a "junket, a boondoggle, a waste, or that it's for highly paid executives. Nonsense!"

Starbucks is unveiling its first value menu today, and $3.95 will get you a latte with coffee cake or a drip coffee with hot sandwich. The deal includes one of four hot sandwiches currently sold at half of Starbucks's U.S. locations. Also offered for that price is a tall latte and either a slice of cinnamon swirl coffee cake or a bowl of oatmeal. The food and drink "pairing" program -- which Starbucks refuses to call a value menu -- rolls out March 3, Bruce Horovitz reports. It will be offered all day at company-owned U.S. stores and will …

Although carmakers are traditionally loath to talk about reducing research and development -- the future lifeblood of their businesses -- they warn that cuts to R&D budgets will be next as they slash costs across their operations, John Reed reports. Christoph Huss, president of the International Association of Automotive Engineers and a group vp at BMW, insists that cutting R&D is "not a viable option," given the regulatory pressure automakers face globally to produce cleaner and safer cars. But industry consultants say many car companies are already in effect doing so by delaying or mothballing new models. "Everybody's …