Hampered by promotional price cutting during the Christmas season, ClothesTime Inc. reported net income of $563,000 during the fourth quarter of its fiscal year. The earnings were only 3% greater than the $549,000 earned in the same quarter a year earlier, despite the addition of 35 outlets to the Anaheim women's apparel chain, which now numbers 160 stores.
ClothesTime said sales for the quarter ended Jan. 27 increased 30%, to $25.9 million from $19.9 million during the fourth quarter of fiscal 1984.
"The fourth quarter was a disaster in apparel retailing, primarily because soft sales going into the quarter pushed inventories up and the industry went into a highly promotional mode during the Christmas season," said ClothesTime Controller Steve Schweickert. "The competition was stiff and customers began looking only for promotional items."
For the 1985 fiscal year, however, ClothesTime said it earned $3.3 million, up 37% from net income of $2.4 million in fiscal 1984. Revenues for the fiscal year increased 43%, to $98 million from $68 million the year before.
Schweickert said the company is already rebounding from the fourth quarter slowdown and optimistic for the future. He attributed the company's overall financial gains in its 1985 fiscal year to a strategy of expansion and aiming for a higher-scale, more fashion-conscious customer.