Clothestime, Citing Slowdown, Posts $83,000 Loss in 3rd Quarter

ANAHEIM — Blaming the economic slowdown that has gripped the retail fashion industry, Clothestime Inc. reported losses Tuesday of $83,000 for its third quarter ended Oct. 27, contrasted with year-earlier earnings of $2.3 million.

The 383-store discount women’s clothing chain said sales for the latest quarter were $48.6 million, down slightly from $48.8 million for the same period last year.

The Anaheim-based Clothestime is “feeling some of the pressure of what is considered a more difficult retailing environment,” said Amy Ludwig, a company spokeswoman. She said the retailer marked down merchandise because of slow sales during the quarter in order to make room for newer fashion lines.

David Sejpal, Clothestime’s chief financial officer, said a shift to a new strategy of offering lower-priced merchandise during the past 10 weeks should pay off in increased sales in the next six months to a year.

Besides cutting prices on its merchandise, Clothestime has also been slashing inventories. Sejpal said the average store reduced inventory to $60,000 during the third quarter, down from about $100,000 a year ago. He said the retailer is also buying more discontinued fashion lines that can be offered at lower prices than those of competing retailers.

Last week, an investment group that included the chairman and president of Clothestime’s advertising agency said it had acquired a 6.3% stake in the retailer. Jack Roth, president of Admarketing Inc. in Los Angeles, said the group considered the stock a good buy.