Shares of Coldwater Creek Inc. (CWTR) plummeted 30% Tuesday after the women's apparel retailer projected weaker-than-expected results for its just-ended quarter and said it will cut back capital spending by 60% amid a sharp curtailment in store openings this year.

The announcement weighed down shares of competitors, including AnnTaylor Stores Corp. (ANN) and Chico's FAS Inc. (CHS), and compelled analysts to remind investors that the retail market continues to look grim as consumers continue to pull back and change their spending habits, purchasing discounted items or waiting for markdowns on expensive items.

Standard & Poor's Equity Research analyst Pearl Wang said she "sees continued weakness in retail environment weighing on Coldwater Creek in 2009 as consumers shop less and often wait for markdowns to buy."

Wang added that she expects the company to focus on controlling expenses and strengthening its balance sheet, as well as working to enhance the customer experience at its stores.

In recent trading, shares of the Coldwater Creek fell 23% to $2.13. Earlier, shares of the company fell 31% and hit an intraday low of $2.02. The stock has fallen 75% in the last five months.

Meanwhile shares of competitors were negative. AnnTaylor fell 9.5% to $5.88, Chico's declined 4.1% to $4.21 and Talbots Inc. (TLB) dropped 24% to $2.12.

"We expect a continued challenging macroeconomic environment and therefore remain focused on the variables we can control," Chief Executive Daniel Griesemer said in a statement Tuesday.

The company also said Tuesday that it entered a new $70 million secured, three-year revolving credit line with Wells Fargo & Co. (WFC). That is $10 million more than the prior commitment.

Coldwater Creek will report its fourth-quarter results March 4. Shares of the company were recently down 30% to $2.06. The stock has more than doubled in the last three months but is still down 45% in the last year.

Women's apparel retailers have been struggling even before the U.S. fell into recession, as many shoppers were uninspired by fashion choices. For Coldwater Creek, is has largely been unprofitable in recent quarters amid slumping sales.

In a broader sense, Roth Capital Partners analyst Elizabeth Pierce reminded clients there is a tough road ahead for the retailers in 2009 and while the sector's outlook is bleak, there's light at the end of the tunnel.

"Unfortunately, based on the level of carnage that has happened at the consumer level, we do not expect consumer spending to rebound very quickly," wrote Pierce, adding it will be a few years before consumer spending normalizes. Pierce also said he expect the retail sector to remain volatile at least until unemployment and housing, the two primary spending catalysts, stabilize. "While we believe that the economic stimulus bill should help, we do not expect any real benefit until late in the year," said Pierce.

Coldwater Creek, which primarily focuses on women who are 35 years of age and older, sees a loss for the quarter ended Jan. 31 of 23 cents to 25 cents a share on revenue of about $280 million amid a 22% same-store-sales drop. Analysts surveyed by Thomson Reuters had, on average, projected a 13-cent loss on revenue of $303 million.

Coldwater Creek said it has identified at least $30 million more in cost cuts it plans to implement this year, after it cut costs by $60 million last year.

The company also plans fiscal 2009 capital spending of $30 million, down from $75 million the prior year, as it will open no more than 10 stores. That compares with 43 last year.

-By Aja Carmichael, Dow Jones Newswires; 201-938-5218, aja.carmichael@dowjones.com; (Kerry E. Grace also contributed to this report.)