ANAHEIM — The weak California economy, fierce competition from department stores and the whims of popular fashion conspired against discount retailer Clothestime Inc. last year, pushing its revenues up for 1993 but causing lower profits.
During the fiscal year ended Jan. 29, Clothestime's sales totaled $347.6 million, up 10% from $315.2 million in 1992. However, same-store sales--for stores that have existed at least 15 months--dropped 2%. And net income for the year was $8.2 million, or 56 cents per share, compared to $8.7 million, or 58 cents per share, in the previous year.
Sales for the fourth quarter increased 6% to $95.1 million, compared to $90 million during the same period last year. Same-store sales for the quarter fell 5% from a year ago. Quarterly earnings were $2.1 million, or 14 cents per share, compared to $2.2 million, or 15 cents per share, in the previous year.
"We were faced with an unusually competitive retail environment--everybody is cutting prices," said Clothestime spokeswoman Jane Whaley. "Also, a lot of the fashions (sold at Clothestime stores) lacked universal appeal. The women who shop at our stores did not respond well to the grunge look."
Clothestime, based in Anaheim, specializes in moderately priced clothing for young women. More than half of its 539 outlets are in California, which has yet to emerge from the recession. The retailer opened 82 new stores in 1993.
Alan Millstein, editor and publisher of Fashion Network Report, a retail industry newsletter based in New York City, noted that all discount chains were hurt last year by both the "grunge look" and aggressive slashing of prices by department stores.
"Clothestime, Ross Stores and Mervyn's (Department Stores) all had a difficult year," Millstein said. "It was hand-to-hand combat with department stores such as May Co. and Bullock's--everyone was clubbing each other to death."
Discount stores lose customers when big-name department stores match prices, Millstein said. "Particularly in women's apparel, department stores still have a cache."
Last year's fashions didn't help matters. "Young career women, aged 20 to 35, were turned off by the grunge look," Millstein said. "They also were turned off by the exotic fabrics--velveteens more suitable for a boudoir than for the office."
Millstein said that this year's "more sensible" fashions are bringing customers back to the stores.
Edward Johnson, an analyst with the brokerage Johnson Redbook Service in New York, said that he, too, expects a better year for Clothestime in 1994. "We're looking for 65 cents per share for the year," he said.
Clothestime stock closed at $8 Thursday, unchanged in Nasdaq trading.
Clothestime Earnings Take a Dip
Despite a 10% increase in revenues, Clothestime Inc. reported a profit decline for fiscal year 1993, ending Jan. 29. The $8.2 million in net income was down about 6% from the previous year. Per-share earnings also were down from the year before. (Figures in millions of dollars, except per-share data.)
4th quarter 4th quarter 12 months 12 months 1992 1993 1992 1993 Revenue $90.0 $95.1 $315.2 $347.6 Net income 2.2 2.1 8.7 8.2 Per share 0.15 0.14 0.58 0.56
Source: Clothestime Inc.; Researched by JANICE L. JONES / Los Angeles Times