Second quarter loss has widened at luxury chain Saks Incorporated on discounting and slow sales of its women's apparel, with the retailer seeing weakness for the rest of the year.

For the three months to 2 August, net loss rose to $31.7m, or $0.23 per share, from a loss of $24.6m, or $0.17 per share a year earlier.

Quarterly sales at the retailer, which operates 53 Saks Fifth Avenue stores and 48 Off 5th stores, fell 3.6% to $669.m from $694.1m a year ago. Same-store sales fell 4%.

Stephen I Sadove, chairman and chief executive officer, said business "became much more challenging" in the second quarter, but added that store sales for the spring season increased 2.7%.

The year-over-year second quarter operating loss (excluding certain items) grew 65% to $42.7m.

Looking ahead to the rest of 2008, Sadove noted: "We are continuing to face the headwinds of the economic and retail environment."

The company sees a flat to low-single digit drop in same-store sales for the second half, with higher growth expected from its New York City flagship store, capital-aided Saks Fifth Avenue locations, Saks Direct, and Off 5th.

Sadove concluded: "We remain optimistic with respect to both the long-term outlook for the luxury channel and for Saks Fifth Avenue in particular."