Career-Type Fashions : Slight Clothestime Profit Follows Marketing Shift

Clothestime, an Anaheim-based retailer that underwent a major transformation to win back a market for its discount fashions, reported a slim profit of $82,000 for its fiscal 1989 first quarter, which ended April 30.

The profit contrasts with a loss of $819,000 in the year-earlier period. Revenue for the quarter increased 9% to $41.2 million, compared to $37.8 million.

Analysts said the earnings indicate that a major change in Clothestime’s marketing strategy may be proving successful. For years a success at selling fashions to 14- to 25-year-olds, Clothestime began to suffer as the size of that market declined in recent years. For fiscal 1988, the company recorded a loss of $2.2 million.

Last summer, Clothestime, which operates 329 stores in 15 states, began stocking higher-quality, career-type apparel, and hired a new ad agency to bring women in their 30s into the stores.

The company has reported sales gains in recent months, and for April, same-store sales increased by 38.5%.

“The turnaround is still in its early phase, but this management has shown it can excel,” said Thomas Tashjian, an analyst at Seidler Amdec Securities in Los Angeles.

Investors apparently anticipated positive earnings news after reports from the company that store sales were up this spring. Within the last 2 weeks, the value of Clothestime stock has increased 40%. Friday, the stock closed at $10.25, up 87.5 cents in trading of 464,400 shares. The stock traded for less than $5 earlier this year.