They may have some unlikely new competition -- from stores like the Gap and Fred Segal -- but army/navy surplus stores are seeing a surge in their business, thanks to trendies' current taste for camouflage gear, rugged workwear and combat boots. Part of the appeal is lower prices, but authenticity is another explanation for their popularity.

Located on 42nd Street and Eighth Avenue in New York, Kaufman's Army Navy boasts a curiously mixed clientele of cruise ship sailors, European tourists and hip locals looking to spruce up their wardrobes.

A family-owned business, the funky little store has been around since 1938. Out front, two howitzers from the Spanish-American War flank the entrance.

According to owner Jim Korn, denim jeans rank second only to military apparel as the store's bestsellers. He carries both Levis and Lee, although Levis are most in demand.

"As an army/navy store in the Nineties, we cater to a clientele that demands jeans," said Korn.

Styles range in price from $36.99 for basic Levis to $45 for the broken-in variety. The Levis 501 button-fly style, Korn said, is the top seller by far, and the original "shrink to fit" style has a "cult following like 'The Rocky Horror Picture Show.' "

The customers at West Hollywood's California Surplus are diverse in a different way -- at any hour of the day, the store is filled with a mix of middle-aged workers, young fashion-conscious types, Hollywood costume designers and even music stars from Bruce Springsteen to Dwight Yoakam to Jodeci.

"We deal with everybody from shopping cart pushers to Rolls-Royce owners," said store manager Ira Skolky.

The store, at Santa Monica Boulevard and Vine Street since 1945, has the largest clothing selection in the area as well as hard goods for true survivalists: tents, portable stoves, canteens and the like.

Apparel offerings range from thermal underwear and Levi's jeans to classic leather bomber jackets and, of course, a large selection of camouflage wear. Available year-round, the latter category includes green and khaki scoopneck cotton T-shirts, cotton parachute pants and shorts and desert hats at $8.98 to $34.98 retail.Hot sellers at the store include Dickies oversized industrial workwear pants and tops in black, navy, and dark brown at $7.98 to $15.98 and nylon bomber jackets in black and khaki at $79.98. The newest bestsellers are the canvas and leather parachute boots at $29.98.

Atlanta's Hodge army/navy store is another that claims a huge selection -- its advertisements claim that there are "one million and one" items in stock.

"If we're challenged on that figure, we welcome people to come in and count everything," said Gay Earls, buyer, who runs the 25,000-square-foot store with her mother, Latrelle Hodge. The late John Hodge, Earls' father, opened the store in 1955.

When Earls began buying full time in 1989, she phased out guns and brought in more fashion items. Although 85 percent of customers are men between 24 and 35, women increasingly shop Hodge for gifts, clothing and shoes. The urban combat look popularized by MTV and rap groups has increased sales of battle dress uniforms, particularly in black. Recently, Hodge outfitted the staff of a local dance club in the gear. Prices start at $16.95 for used clothing and go up to $500 for leather jackets. "Price is important to people, but they also want quality and they perceive army/navy issue as high quality," she said.

Earls added vintage clothing in 1992, and it now makes up 15 percent of the store's merchandise. "It's drawn in younger customers looking for prom wear or clothes to wear to Seventies nights at bars," said Earls. Bestsellers include go-go boots, HotPants, miniskirts and tuxedo jackets.

Annual sales, at $800,000 in 1993 have increased 10 percent each of the past five years. Earls' biggest challenge is finding new suppliers, both for clothing and the more eccentric items, such as muskrat claw back scratchers, alligator heads and Christmas ornaments.

"People think I'm crazy, but people actually buy these things," she said.

--With contributions from GEORGIA LEE, SHERRIE KRASNER and JOANNA BOBER

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