The stars of retailing are losing their luster.

For years, specialty-store chains such as The Limited, Benetton and The Gap have been regarded as the guiding lights of retailing.

Department stores, suffering from waning sales and declining customer loyalty, set out to emulate these chains -- adopting their merchandise, presentation and customer service practices.

Meanwhile, scores of new specialty chains were launched, copying many of the same formulas that had made the original specialists successful.

But today, specialty stores are finding their business a harder sell. Their successes have been clouded by sagging consumer spending, the falling dollar, which has pushed up prices, confusion over fashion trends and too many look-alike stores.

"Specialty stores have to overcome the sameness syndrome," said Kurt Barnard, publisher of the Barnard Marketing report. "Overall, they all look so much alike that you can't tell one store from another -- except by the name over the door. We've graduated from the world of McDonald's where everything is the same to the world of McFashion where pretty nearly everything is the same. There is little outstanding that makes the average shopper eager to go in and walk out with an item."

Trouble signs for this retailing segment are beginning to crop up.

The Limited Inc., considered by many to be the leader of the specialty retailing industry, has seen a drop in its sales. Last month, at the beginning of the Christmas season, Limited reported that sales had decreased 5 percent at stores open more than a year -- an important retailing measurement. Lower sales and sharp discounting should force Limited's earnings for the current quarter down about 15 percent below the same period last year.

Meanwhile, The Gap -- another highly respected specialist -- announced a 12 percent drop in profits for its latest reported quarter as shoppers were turned off by its fall offerings.

With sales down, the stock prices of these companies and other specialty retailers have dropped sharply since last summer. The Gap's stock, for example, declined from a mid-August high of $77.125 to $28.125 in mid-October, the day before the stock market plunged. On Thursday, the stock closed at $21.

Perhaps even more disturbing is a recent marketing study of women's shopping habits done by Babson College, which performed the study in the Chicago area. It showed that since 1979, when a similar study was completed, the market share of specialty retailers selling women's apparel dropped from 17 percent to 15 percent -- even though many new specialty chains had opened in Chicago in the interim.

Despite these trouble signs, there appear to be only a few national chains suffering deeply at the moment. Brooks Fashion Stores Inc. -- a Limited follower -- has filed for protection from its creditors under the bankruptcy laws. The 866-store chain, owned by a Canadian retailing conglomerate, owes about $381 million.

Meanwhile, a one-time up-and-comer, Aca Joe, has reached an agreement for a $12 million cash infusion from a sportswear manufacturer that will gain control of the financially troubled merchant with the investment.

"Despite their spectacular success ... specialty retailers have shown weaknesses -- the unresponsive and unprofitable ones are no safer from extinction than dinosaur-style department stores," concluded a just-released report by Find/SVP, an information clearinghouse.

Retailing experts all are confident that the specialty retailing industry -- which last year rang up about $208.6 billion in sales, or about 14.4 percent of all retail sales -- will continue to grow.

In fact, many big retailers are eagerly trying to enter the business. Sears, Roebuck & Co., R.H. Macy & Co. and J.C. Penney Co. -- to name a few well-known retailers -- are launching new specialty chains or buying existing ones to make sure they are part of the business.

Yet even with the almost daily creation of new chains, the rate of growth in the specialty business is expected to be slower than the past decade, and many chains may be forced to adjust their strategies to compete with the increasingly aggressive department stores.

"Specialty stores are here to stay," added Barnard of the Barnard Marketing report. "They have exerted a tremendous influence in retailing in the United States and retailing will never be the same. But at the moment, specialty stores have slowed in their advance. And with so many around looking alike, we're likely to see mergers between specialty stores over the next couple of years."

"Some of the specialty stores here today won't be here tomorrow," said Walter Loeb, a financial analyst with Morgan Stanley & Co. "What you see happening to Brooks is symptomatic of what may happen to others. The loyalty of young customers is not very deep."

In many ways, specialty stores are reminiscent of the small shops of years ago, when customers had to visit a shoe salon, a clothier and a milliner to put together an outfit.

Instead of trying to serve many customers by offering many different types of clothes and goods -- as department stores do -- specialty stores cater to an exclusive type of customer or sell only one type of merchandise, such as sweaters and jeans. That concept is, in fact, how The Limited got its name, to show that it was selling only a limited selection of women's apparel.

"Highly specialized stores do as much to eliminate customers as they do to win them," said one specialty retailer who declined to be identified.

Although the specialty stores are more limited in their assortment of merchandise, the selection of the goods they carry usually is greater than that of a department store.

The current specialty store business began to take off in the mid-1970s, offering consumers new and different fashion trends -- and at lower prices with better service -- than those found in department stores. Their rise coincided with the mass creation of the off-price or discount retailer, creating all the more pressure on department stores.

"To control costs and regain sales, department stores cut back on service and began a spiraling success of price promotions," the Find/SVP study recalled. "These strategies devastated department store margins and overall did little to help regain sales."

It was only a few years ago that department stores concluded that they had to fight back by becoming a series of specialty stores themselves. Many have eliminated unprofitable merchandise such as large appliances, fabrics and toys and installed dozens of flashy small boutiques throughout their stores. At the same time, they have upgraded their stores, merchandises and service.

Even so, the specialty stores continued to enjoy a relatively trouble-free existence -- until last fall, when retailers say a series of troubling coincidences came together.

For one thing, fashion trends changed between last spring -- when retailers had placed their fall orders -- and August, when the merchandise arrived in stores. The loose-fitting merchandise popular last year was no longer in style.

What's more, for the first time in years the specialty stores saw steep increases in prices, trimming their competitive advantage over department stores. The key reason was the dollar's decline on foreign exchange markets, which boosted prices of foreign goods in this country.

"The specialty stores had more inflation because they have more goods made overseas than a department store, which is more oriented to domestic supplies," noted Cyrus Wilson, chairman of Management Horizons, a retail consulting firm that is a division of Price Waterhouse.

Making matters worse, consumer spending has slowed considerably, Wilson said. "Even without Black Monday, we are at the end of a very long business expansion which began in 1982 and has been largely consumer-driven."

Although department stores experienced the same problems, they were not as vulnerable because they sold a greater variety of nonfashion goods, retailing experts note.

"The very thing that makes specialty stores attractive -- their narrowness -- makes them very vulnerable," said William Ress, a retailing consultant with C.W. Ress & Associates. "Specialty stores go after a niche; if that niche dries up or shrinks, so does business. The more specialized you are, the more vulnerable you become to changes in fashion."

That was particularly true for Banana Republic, a sister chain of The Gap, which specialized in safari clothing. "It was a very good and exciting concept when it was introduced, but then it was replicated in too many malls so it wasn't that special," Loeb said. What's more, the demand for safari clothes is relatively small. Today, Banana Republic is trying to become less of a safari store and more of a travel and leisure store. But in the process, said Loeb, "I fear that it may look like all the other" specialty stores out there and not be different enough.

Specialty retailers are convinced that their troubles are only temporary and will disappear this spring when they introduce new fashions in their stores.

"The last five years we've been right every single season and every single quarter -- except one," said a Gap spokesman. "This spring, we plan to get back on track where we were."

Limited Chairman Leslie Wexner added: "What we do, we do better than anyone else." Although The Limited may have suffered more than department stores, it's because "we have farther to fall. We're flying at 41,000 feet; department stores are at 4,000 feet."

"In the retail business, it's pretty common to have wide peaks and valleys," said Noel Davidson, group president of women's specialty retailing for the U.S. Shoe Corp., which owns a variety of specialty stores including Casual Corner, Ups 'N Downs, Caren Charles and August Max. "In this particular case, we're looking at a deeper valley than most. But I'm confident most good specialty retailers will bounce back."

Not all retailing officials are so sure, however, noting that the industry still faces some major hurdles.

For one thing, the changing life styles of the baby-boom generation may reduce the popularity of specialty stores. "As baby boomers begin to set up households -- with or without kids -- shopping is not terribly interesting and is increasingly time-consuming," said Ress. "So department stores will become a more efficient place to shop."

Additionally, the less successful chains will come under increasing pressure as mall owners look for more profitable shops, predicted Loeb of Morgan Stanley. "There are outstanding specialty stores. "There's Laura Ashley, Benetton, Sharper Image, Crabtree & Evelyn, Williams-Sonoma and the furniture store This End Up, to name a few. All are distinctive and different. However, the repeat business in the malls is not generated by Williams-Sonoma or furniture stores, where most of the purchases are specifically thought-out ahead." As a result, Loeb predicted, "I think there will be a shakeout as mall owners look for new ideas."

The predicted shakeout comes at a time when department stores -- criticized for years for their stodgy, outdated sales practices -- have finally modernized their stores and merchandise to become more powerful competitors to the specialty stores.

"Far from going the way of dinosaurs, today's department stores are showing renewed vigor and profitability," the Find/SVP study concluded. "The best of them are resisting further market erosion and have reestablished themselves in the retailing arena."

What's more, Barnard noted, "department stores have undergone a huge wave of mergers over the last couple of years and have achieved very substantial savings in personnel, administration and distribution. These tremendous savings have made it possible for department stores to be more competitive."

But the Limited's Wexner said he does not believe the mergers will aid the department stores. "Consolidation of the department stores really doesn't change things. You merge two clumsy people and you end up with two clumsy people. The real issue is skills. ... Many are recognizing things we've been doing 10 years ago. We've had 10 years of practice and may be on to the next game."

Shakeout or not, no one is ready to write off the specialty store industry.

"If you take a long view, specialty stores have been a fairly steady part of the retail scene over the past 20 years," said David F. Miller, vice chairman of Penney's, which has invested in a number of specialty chains, including Alcott & Andrews and is about to launch two of its own specialty chains. "Like department stores, they will ebb and flow in their strength and weaknesses but it will remain a vital part of the American scene. For the next few years we don't think it will be a significant part of our business, but hopefully we will plant a tree that will grow into a large oak."