By  on January 5, 1994

DALLAS -- Target: Suburbia.

Strategy: Aim for the educated ones. Bombard them with catalogs. Hold the line on most prices at $100.

It's not an uncommon tactic for a specialty retailer, but what has made it work so well for Harold's Stores, based in Norman, Okla., is the company's extensive development of its own sportswear, accessories and shoes.

Fully 90 percent of the merchandise carries its own private labels, Harold's or Breeches. Harold's sportswear -- classic, with a twist -- has been key to the publicly held firm's steady growth from 14 to 22 stores in the past three years, accompanied by a respectable rise in profits.

Ralph Lauren is the only brand name consistently carried in the stores.

In the year ended Jan. 30, 1993, Harold's had net earnings of $1.05 million on sales of $49.3 million. For only the nine months after that, a period ending Oct. 30, the firm's earnings grew 59 percent, to $1.05 million, or 29 cents a share, and sales grew 24.5 percent, to $42.8 million, with same-store sales charting a 7.5 percent gain. The upbeat trend continued for Christmas, with December sales showing a 24.3 percent gain, including a same-store increase of 6.2 percent.

The company, which went public in 1987, plans to continue growing by opening two to three stores a year and is seeking sites in North and South Carolina, Virginia, northern Florida and Kentucky. In addition, a second unit is planned for Houston plus a second unit in the Kansas City area. Most Harold's stores average 3,000 to 4,000 square feet and are located in the South and Southwest.

Harold's also is fortifying its quarterly catalog into more than a promotion for the stores, although it is still used to build recognition in cities where a new store opens. The company dedicated a staff to it, bought and traded mailing lists and began building circulation, with the result that in the first three quarters of fiscal 1993, catalog sales swelled 81 percent, to $3.7 million.

The first issue to hit 1 million copies was mailed in December. Catering to women from college-age up, who like to look fashionable but not trendy, Harold's has developed a look that emphasizes value, longevity, natural fibers and updated classic taste. For fall, styles ranged from handknitted patterned sweaters for weekend wear to houndstooth jackets with velvet collars that could go to work.

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