Clothestime Posts 29% Increase in Its Holiday Sales

While other retailers have painted a dark picture of their Christmas shopping seasons, Clothestime Inc. reported Thursday that it had substantially stronger holiday sales than during the same period last year.

The Anaheim-based chain of women’s discount fashions said sales increased 29% to $28.5 million for the five weeks ended Dec. 29, up from $22.1 million. More important, its comparable store sales--a key measure offering a comparison of sales without including growth due to expansion--was up 9%, the company said.

Industry analysts said discount retailers had better holiday sales than department stores and purveyors of moderately priced merchandise. This reflects a more cautious mood among consumers who have started “trading down,” buying lower-priced merchandise, since the onset of the Persian Gulf crisis and attendant economic jitters.

The figures come as welcome news for Clothestime, which has been dogged by lackluster sales and earnings during much of the past year. The company earned $17,000 on revenues of $152.4 million for the first nine months of the current fiscal year ended Oct. 27, compared to net income of $4.7 million on sales of $142.1 million in the same period the previous year.

David Sejpal, Clothestime’s chief financial officer, said the company’s strategy of cutting prices by buying large lots of close-out, first-quality merchandise from manufacturers has worked.

“Customers are looking for more bargain-oriented stuff,” he said.

He said the company was able to wean itself off the huge television ad campaign it has used to generate business during past Decembers and funneled the savings into lowering prices.

Investors were not impressed by the sales figures. The company’s stock closed at $1.75, down 12.5 cents in trading on the over-the-counter market.