ITEM 1. BUSINESS
General
One Price Clothing Stores, Inc. (the "Registrant" or the "Company") operates a growing chain of off-price retail women's and children's specialty stores offering a wide variety of first quality, contemporary, in-season apparel and accessories for the uniform retail price of $7. The Company purchases merchandise at heavily discounted prices in large quantities from a broad mix of manufacturers, jobbers, importers and other suppliers. Items offered in the Company's stores typically sell in department and specialty stores for $15 and up. The Company is able to acquire such merchandise at heavily discounted prices because of its willingness to purchase large quantities and odd lots and to buy goods later in the season than most other retailers. The Company's buyers are able to take advantage of situations such as over-production, order cancellations and manufacturers' needs to liquidate stock. This purchasing strategy allows the Company to obtain a price advantage and to react quickly to seasonal fashion preferences and weather conditions affecting consumer spending. It is the Company's policy to offer only first quality apparel; the Company does not purchase "seconds" or irregular merchandise from its suppliers. The Company increased its retail price from $6 to $7 on August 5, 1990, the only price increase since the Company began operations in 1984. At this time, management does not anticipate increasing the retail price in the near future.
Company History and Organization
The Company opened its first store in August 1984. The Company changed its corporate domicile from South Carolina to Delaware on April 9, 1987 and completed the initial public offering of its Common Stock on May 27, 1987. All information contained herein has been adjusted to reflect the issuance of 10.120811 shares of the Company's Common Stock, $.01 par value, (the "Common Stock") in exchange for each share of Common Stock then outstanding in connection with the Company's re- incorporation in Delaware, a 3-for-2 stock split effected in the form of a stock dividend paid on October 15, 1987, and a 3-for-2 stock split effected in the form of a stock dividend paid on April 29, 1994. On February 9, 1994, a wholly-owned subsidiary of the Company, One Price Clothing of Puerto Rico, Inc., was incorporated in Puerto Rico. It commenced operations on May 28, 1994. As used herein, unless the context otherwise indicates, the "Company" refers to One Price Clothing Stores, Inc., a Delaware corporation, to its immediate predecessor, a South Carolina corporation of the same name, to the South Carolina corporation's predecessor, a North Carolina corporation organized in 1984 under the name J. K. Apparel, Inc. and to One Price Clothing of Puerto Rico, Inc.
Industry Segments
The Company operates in only one industry segment. All of the Company's assets and significant revenues and pre-tax earnings relate to retail sales of women's and children's apparel and accessories to the general public through Company-operated stores. At the end of fiscal 1994, 1993 and 1992, the Company's total assets were $67,930,000, $64,201,000 and $50,718,000, respectively. Net sales were $283,326,000 in fiscal 1994, $234,698,000 in fiscal 1993 and $184,149,000 in fiscal 1992. The Company had net income of $4,389,000 in fiscal 1994, $8,724,000 in fiscal 1993 and $6,846,000 in fiscal 1992. Other than operations in Puerto Rico, the Company had no operations outside the continental United States at the end of fiscal 1994 and no export sales. Reference is hereby made to the financial statements included in Part II for more detailed information about the Company's assets.
Operations
The Company operates a chain of off-price retail women's and children's specialty stores offering a wide variety of first quality, contemporary, in-season apparel and accessories for the uniform retail price of $7. The Company registered the trademark "One Price" with the United States Patent and Trademark Office on June 5, 1990 for a five year period with the option to renew upon expiration. The Company intends to apply for renewal for this trademark. The Company applied for renewal and permanent registration of the trademark "Every Day Every Item" in June, 1994 with the United States Patent and Trademark Office. Approval of the application has not yet been obtained. The Company registered "Every Day Every Item", "Todos Los Dias Todos Los Articulos", "One Price" and "Un Solo Precio" in Mexico on June 12, 1993. All Mexican trademarks expire May 14, 2003, with the option to renew them. Management believes that the loss of such trademarks would not have a material adverse effect on the Company's financial position or results of operations.
The One Price Store. The Company's typical store has approximately 3,300 square feet, of which approximately 2,400 square feet is devoted to selling space. All of the Company's stores are located in leased facilities with convenient access to adequate parking or public transportation. At December 31, 1994, approximately 93% of the Company's stores were located in strip shopping centers and the remaining stores were located in malls. The Company does not franchise its stores.
The Company's stores are primarily located in or near communities with a population of at least 40,000 - 50,000 and above, as well as in large metropolitan areas. Most of the Company's stores are open seven days a week and typical hours of operation are from 10:00 a.m. until 7:00 or 9:00 p.m., Monday through Saturday, with shorter hours on Sunday. A typical store employs a full-time manager and two full-time assistant managers, and most stores employ up to ten additional part-time sales associates.
The Company's stores are designed for customer convenience and for attractive presentation of merchandise. All apparel is displayed on hangers and is organized by classification, style and color, promoting a pleasant shopping environment and customer convenience.
The Company's store operations department is headed by a Vice President of Stores who is assisted by two Directors of Store Operations and Regional and District Sales Managers. Each Regional Sales Manager is responsible for approximately 9 districts. Each District Sales Manager is responsible for approximately 10 to 12 stores and visits each store in his or her district on a regular or as-needed basis to provide assistance in promoting sales, training, store layout and merchandise presentation, and to monitor adherence to the Company's operational and management policies.
Store Locations and Expansion. At December 31, 1994, the Company operated 641 stores in 28 states, including states in the southwest, southeast, northeast, midwest and west coast regions of the United States, and in Puerto Rico.
The Company opened a net of 101 stores in fiscal 1994. The Company's expansion plans in 1995 include opening a net of approximately 80 stores in new and existing markets. The Company closed 27 underperforming stores in fiscal 1994, and closed 12 such stores in January and February of 1995. The Company anticipates closing additional stores during fiscal 1995 if warranted by the operating performance of such stores.
Purchasing. The Company's practice is to offer value to its customers by selling desirable women's and children's apparel and accessories at considerably lower prices than generally would be available from department stores and other specialty retailers. The Company purchases its merchandise at heavily discounted prices and on favorable terms from manufacturers, jobbers, importers and other vendors.
The Company typically is able to purchase merchandise from vendors at substantially discounted prices as a result of the following circumstances: the inability of a manufacturer or importer to dispose of merchandise through regular channels; the discontinuance of merchandise because of changes in color or style; over-production by manufacturers; cancellation of orders by conventional retail stores; the need of catalog retailers to dispose of inventories of unordered catalog merchandise; and manufacturers' need for liquidity. The Company's ability and willingness to purchase in large quantities and in odd-lot or broken-size assortments and its reputation for reliability in the industry provide the Company with purchasing advantages. Typically, the Company buys the majority of its merchandise close to and during each selling season, later than department stores and other specialty retailers. This purchasing strategy permits the Company to react to fashion trends and opportunistic developments during a selling season. The Company may also purchase selected merchandise in advance of a selling season.
During fiscal 1994, the Company purchased merchandise from approximately 870 vendors, including manufacturers, jobbers, importers and other vendors. No vendor accounted for more than 10% of the Company's total purchases for the year.
Although there can be no assurance that the Company will be able to continue to acquire sufficient quantities of first quality merchandise at such low prices on favorable terms, the Company continues to add new vendors and believes that adequate sources of first quality merchandise exist at appropriate price levels to permit the Company to continue its expansion program. The Company does not maintain long-term or exclusive purchase commitments or arrangements with any vendor.
Corporate Offices and Distribution Center. The Company's Corporate Offices and Distribution Center are located in Duncan, South Carolina. With the exception of functions performed by certain merchandise buyers, regional directors of real estate, district and regional sales managers, and certain administrative functions performed in Puerto Rico, substantially all purchasing, accounting and other administrative functions are centralized at the Corporate Offices.
Substantially all merchandise is shipped directly from vendors to the Company's Distribution Center where the goods are processed and sent to the Company's stores. The majority of shipments to stores are made by common carriers; however, shipments local to the Company's Distribution Center are made in tractor-trailers leased and operated by the Company.
Merchandising. The Company's merchandising strategy emphasizes contemporary and in-season apparel for juniors, misses, large-sized women and children. The Company's target customers are value- and fashion-conscious women, primarily in lower and middle income brackets. The Company offers only first quality merchandise at the retail price of $7 per item and emphasizes the value of its merchandise compared to similar merchandise sold elsewhere at higher prices. Women's apparel sold by the Company includes contemporary sportswear such as knit tops, pants, blouses, shirts, skirts, sweaters, jackets and shorts. In addition, the Company occasionally sells other types of merchandise such as dresses, swimsuits, jumpsuits, raincoats, lingerie and other related items. The Company also offers selected accessories such as scarves, socks, belts, handbags, jewelry and fragrances, in addition to apparel. Accessory sales as a percentage of net sales were 10.7% in fiscal 1994, 11.6% in fiscal 1993 and 11.7% in fiscal 1992. Sales of children's clothing comprised less than 10% of net sales in each of the last three fiscal years.
Management Information System. The Company's management information system, featuring point-of-sale cash registers and a computerized inventory management system, permits management to review each store's inventory on a daily and a weekly basis thereby enabling the Company to tailor its purchasing strategies and merchandise shipments to stores based on customer demand.
The Company is currently implementing a new warehouse management system to improve the management of the location and flow of merchandise within the Distribution Center. Implementation of the new system is expected to be completed during the summer of 1995.
Seasonality
The Company's sales and operating results are seasonal, as is typical in the women's retail apparel industry. The Company's sales historically have been lowest during the first quarter (January-March) and the third quarter (July-September) and highest during the second quarter (April-June) and the fourth quarter (October-December). Reduced sales volumes in first and third quarters coincide with the transition of seasonal merchandise. Therefore, increased levels of markdowns generally occur during these transitional periods and operating expenses, when expressed as a percentage of net sales, are typically higher. Management expects this seasonality to continue.
Working Capital Requirements
Historically, the Company's primary needs for liquidity and capital have been to fund the cost of its new store expansion, the related growth in merchandise inventories, and the expansion of the Corporate Offices and Distribution Center. These needs have been met through cash provided by operations and the Company's available line of credit. The Company had an amended agreement with a bank for a $20,000,000 unsecured line of credit and a $10,000,000 letter of credit facility, expiring April 30, 1995. This agreement was superseded on March 16, 1995 when the Company and the bank executed a credit agreement for a $25,000,000 unsecured line of credit and a $15,000,000 letter of credit facility which will expire May 31, 1996. The agreement contains certain covenants described in Item 7 of this report. The Company has never used long-term debt or capital leases as a source of capital; however, the Company may use such permanent financing, if deemed by management to be in the best interest of the Company.
Merchandise inventories are typically purchased on credit, including the use of letters of credit. Letters of credit are primarily used to purchase merchandise inventories from foreign suppliers. All such purchases are paid in United States dollars; thus, the Company is not subject to foreign currency risks. As a result of the Company's opportunistic buying strategy and to ensure that an adequate supply of merchandise is available for shipment to its stores, the Company may, at times, invest a significant amount of its working capital in merchandise inventories.
Revenues from retail sales are recognized at the time of the sale. The Company accepts cash, checks, and, in selected stores, certain major credit cards. All stores offer a liberal exchange and return policy. Merchandise returns are recorded in the period the merchandise is returned by the customer. The amount of unrecorded merchandise returns is not significant to the Company's financial position or results of operations.
Customers
No material part of the business of the Company is dependent upon a single customer or a few customers.
Competition
The women's retail apparel industry is highly competitive. In order to compete effectively, the Company is dependent upon its ability to purchase merchandise at substantial discounts. The Company does not know of any direct competition from other specialty apparel retailers having a $7 one-price concept. However, the Company does compete with department stores, specialty stores, discount stores, other off-price retailers and manufacturer-owned outlet stores, many of which are owned by large national or regional chains with substantially greater resources than the Company. There can be no assurance that other retailers with substantially greater financial resources than the Company will not adopt a purchasing and marketing concept similar to that of the Company. Management believes that the primary competitive factors in the retail apparel industry are price, quality, variety of merchandise, good site selection and low cost of operation. The Company believes that it is well positioned in all of these areas to compete in its markets.
Environmental Factors
The Company is not aware of any federal, state or local environmental regulations which will materially affect its operations or competitive position or require material capital expenditures. The Company cannot predict, however, the impact of possible future legislation or regulation on its operations.
Employees
At December 31, 1994, the Company had approximately 4,900 employees, of which approximately 48 percent were full-time employees. The Company, like other retailers, experiences a high turnover rate of part-time store employees but has generally not experienced difficulties in hiring qualified personnel. None of the Company's employees are covered by a collective bargaining agreement, and management believes that the Company's relationship with its employees is good.
ITEM 2.
ITEM 2. PROPERTIES
The Company leases all of its store locations. At December 31, 1994, the Company had 641 stores operating in 28 states and Puerto Rico. The Company leases its stores under operating leases generally with initial terms of five to ten years and with one to two renewal option periods of five years each. The leases typically contain kickout provisions based on that store's annual sales volume or the shopping center's occupancy. The leases generally provide for increased rents resulting from increases in operating costs and property taxes. Certain of the leases provide contingent or percentage rentals based upon sales volume, and other stores are leased on a month-to-month basis. To date, the Company has not experienced difficulty in obtaining leases for suitable locations for its stores on satisfactory terms. Approximately 64 existing store leases expire or have initial lease terms containing lessee renewal options which may be exercised during fiscal 1995. Management believes that the Company will not experience a significant increase in lease expense as a result of exercising renewal options or negotiating additional lease terms for such locations. The following is a list of store locations by state: 										
The Company's Corporate Offices and Distribution Center are located in Duncan, South Carolina on approximately 82 acres which are owned by the Company. In fiscal 1993, the Company completed a 28,000 square foot expansion of its Corporate Offices. The expansion increased the total size of the Corporate Offices and Distribution Center to approximately 390,000 square feet at January 1, 1994. Additionally, the Company is currently expanding the Distribution Center by approximately 90,000 square feet. With the addition of certain equipment and systems in fiscal 1995, the expanded Distribution Center should be able to support the Company's growth over the next several years.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
On September 22, 1994, two separate lawsuits making certain securities and common law allegations and seeking unspecified damages were filed in the United States District Court for the District of South Carolina, Columbia Division against the Company and its Chairman and Chief Executive Officer Henry D. Jacobs, Jr. A motion to consolidate these cases is pending. The lawsuits, which seek certification as class actions, allege that the Chairman and Chief Executive Officer and the Company made materially false, misleading and untimely projections and statements on earnings. The plaintiffs in these cases, sought to be consolidated, are Leonard Pitten, Katherine Hogan and Anthony J. Mallozzi. The Company has moved to dismiss the lawsuits, and a ruling on that motion is currently pending. Although the Company cannot predict the outcome of these lawsuits at this time, management intends to vigorously defend these actions and believes that as a result of its legal defenses and insurance arrangements, the final outcome should not have a material adverse effect on the Company's consolidated financial condition or results of operations.
Occasionally the Company is a defendant in legal actions involving claims arising in the normal course of its business. The Company believes that, as a result of its legal defenses and insurance arrangements, none of these other actions presently pending, if decided adversely, would have a material adverse effect on its financial position and results of operations.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth quarter of the Company's fiscal year.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND 	 RELATED SHAREHOLDER MATTERS
The Company's common stock is traded under the symbol ONPR in the National Market System of NASDAQ. As of March 23, 1995, there were approximately 430 shareholders of record.
The Company has never paid cash dividends since its inception. The Company's credit agreement contains covenants which, among other things, restricts the Company from paying dividends without prior approval. Currently, the Board of Directors intends to continue its policy of retaining earnings for operations and expansion of the business.
The quarterly high and low sales prices as quoted by NASDAQ are shown below. Prices have been adjusted to reflect a 3-for-2 stock split effected in the form of a dividend to shareholders of record on April 15, 1994.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The following table presents selected financial data for the Company for each of the five fiscal years ended December 29, 1990 through December 31, 1994. All of the selected financial data are extracted from the Company's audited financial statements and should be read in conjunction with the financial statements and the notes thereto included under Item 8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of One Price Clothing Stores, Inc. Duncan, South Carolina
We have audited the accompanying consolidated balance sheets of One Price Clothing Stores, Inc. and subsidiary as of December 31, 1994 and January 1, 1994, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three fiscal years in the period ended December 31, 1994. Our audits also included the financial statement schedule listed in the Index at Item 14 (d). These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 1994 and January 1, 1994, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP Greenville, South Carolina
February 10, 1995 (February 28, 1995 as to Note B)
	
		 ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY 		 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1994
NOTE A - Summary of Significant Accounting Policies
Business: One Price Clothing Stores, Inc. and subsidiary (the "Company") operates a chain of off-price retail women's and children's apparel stores in the United States and Puerto Rico. The Company operated 641, 540, and 446 stores at the end of fiscal 1994, 1993 and 1992, respectively.
Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
Cash and Cash Equivalents: The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Merchandise Inventories: Merchandise inventories are stated at the lower of average unit cost or market. Average unit cost is determined by the first-in, first-out (FIFO) method.
Depreciation: Depreciation is computed by the straight-line method, based on estimated useful lives of 10 years for land improvements, 33 to 40 years for buildings, 5 to 10 years for leasehold improvements and 3 to 15 years for fixtures and equipment.
Income Taxes: The Company had accounted for income taxes since its inception using the principles of Accounting Principle Board Opinion No. 11. Effective January 3, 1993, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes". The cumulative effect of adopting SFAS No. 109 had no material effect on the consolidated financial statements.
Under SFAS No. 109, deferred income taxes represent the future income tax effect of temporary differences between the book and tax bases of the Company's assets and liabilities, assuming they will be realized and settled at the amount reported in the Company's financial statements.
Trademarks: The cost of trademarks is being amortized over their expected useful lives of 10 years using the straight-line method.
Revenue Recognition: Revenues from retail sales are recognized at the time of the sale. Merchandise returns are recorded in the period the merchandise is returned by the customer. The amount of unrecorded merchandise returns is not significant to the Company's consolidated financial position or results of operations.
Store Preopening Costs: Costs associated with the opening of new stores are expensed as incurred.
Store Closing Costs: At the time management commits to close a store, a provision is made and operations are charged for any remaining store lease obligation, any estimated write-down of property and equipment, and any estimated future operating loss.
Income Per Common Share: Net income per common share is computed by dividing net income by the weighted average number of shares of Common Stock and dilutive common stock equivalent shares for stock options (Note E) outstanding during the period.
Fiscal Year: The Company's fiscal year ends on the Saturday nearest December 31. Fiscal years 1994 and 1993 each consisted of 52 weeks, while fiscal year 1992 consisted of 53 weeks.
Reclassifications: Certain amounts included in prior years' financial statements have been reclassified to conform to the fiscal 1994 presentation.
NOTE B - Credit Facilities
The Company has an amended agreement with a bank which provides for a $20,000,000 line of credit and a $10,000,000 letter of credit facility, expiring April 30, 1995. The agreement provides for a 0.20% commitment fee per annum on the line of credit. Borrowings against the line of credit are unsecured and bear interest at the Company's option of the bank's prime interest rate, the adjusted LIBOR rate plus 1.25% or the bank's discount rate for Bankers Acceptances plus 1.00%. The credit facilities contain certain financial covenants which, among other things, have the effect of limiting amounts available for dividends to approximately $9,217,000 at December 31, 1994, and prohibit the Company from encumbering or disposing of a material amount of assets. The Company must also maintain certain ratios regarding net worth, leverage and fixed charges. The maximum amounts outstanding under the line of credit during fiscal 1994 and 1993 were approximately $16,421,000 and $8,616,000, respectively. The average amounts outstanding under the line of credit were $3,165,000 during fiscal 1994 and $2,057,000 during fiscal 1993. The weighted average interest rate was 7.6% in fiscal 1994 and 5.6% in fiscal 1993. There were no amounts outstanding against the Company's line of credit at December 31, 1994 or January 1, 1994. The Company had outstanding letters of credit totaling approximately $7,656,000 at December 31, 1994.
On February 28, 1995, the Company and the bank executed a commitment letter which amends and restates their agreement to provide for a $25,000,000 line of credit and a $15,000,000 letter of credit facility. The revised agreement, when executed, will provide for a 0.25% commitment fee per annum on the line of credit and will expire May 31, 1996. Borrowings against the line of credit will be unsecured and will bear interest at the Company's option of a Base Rate (defined as the higher of the bank's prime interest rate or the Federal Funds rate plus 0.50%) or the adjusted LIBOR rate plus 1.50%. The amended credit facilities will contain certain covenants which, among other things, restrict or limit the ability of the Company to incur indebtedness, or encumber or dispose of assets. In addition, the Company will not be able to repurchase its Common Stock or pay dividends without prior approval. The Company must also maintain certain ratios regarding net worth, leverage and fixed charges.
Presented below are the elements which comprise deferred income tax assets and liabilities:
	 The net deferred income tax asset is recognized in the accompanying balance sheets as follows:
	 The Company's subsidiary has a net operating loss carryforward of 	 approximately $696,000 which is available to offset future taxable 	 income in Puerto Rico through fiscal 2001. Due to the subsidiary's 	 short operating history, management cannot be assured that the 	 deferred income tax asset related to the operating loss 	 carryforward will be realized. Accordingly, a valuation allowance 	 for 100% of the deferred income tax asset has been established. 	 Otherwise, scheduled reversals of temporary differences and 	 anticipated future taxable income should be sufficient to offset 	 scheduled losses arising from the net deferred income tax assets.
NOTE D - Operating Leases The Company generally leases its stores under operating leases with initial terms of five to ten years with one to two renewal option periods of five years each. The leases generally provide for increased rents resulting from increases in operating costs and property taxes. Certain of the leases provide for contingent or percentage rentals based upon sales volume and others are leased on a month-to-month basis.
In addition, the Company has operating leases for automobiles, trucks, trailers and certain other equipment with one to ten year terms. The leases for trucks and trailers also provide for contingent rentals based upon miles driven.
Future minimum rental commitments as of December 31, 1994 for noncancelable leases, are approximately as follows: 		
	 Total rental expense for operating leases was as follows:
	 NOTE E - Employee Benefits
	 Stock Option Plans: The Company has three stock option plans (the 	 1991, 1988, and 1987 Plans) which provide for grants to certain 	 officers, directors, and key employees of stock options to purchase 	 shares of Common Stock of the Company. Options granted under the 	 plans expire ten years from the date of grant and, to date, have 	 been granted at prices not less than the fair market value at the 	 date of grant. Effective October 27, 1988, the Board of Directors 	 retired all unissued options under the Company's 1987 Plan. 	 Options cancelled subsequent to October 27, 1988 under the 1987 	 Plan are retired. Options cancelled under the 1991 and 1988 Plans 	 are available for reissuance.
	 Information with respect to the stock option plans is as follows:
	 At December 31, 1994, a total of 892,000 shares of Common Stock 	 were reserved for issuance under the Company's option plans.
	 Retirement Plan: Effective July 1, 1992, the Company established a 	 401(k) and profit-sharing plan, the One Price Clothing Stores, Inc. 	 Retirement Plan (the "Plan"). All employees in the United States 	 who are 21 years of age or older with at least one year of service 	 are eligible to participate in the Plan. In fiscal 1994, the 	 Company was obligated under the Plan to make a matching 	 contribution of 25% of each participant's contribution with a 	 maximum matching contribution of 1.25% of the participant's base 	 compensation. Effective January 1995, the Company's contribution 	 obligation increased to 50% of each participant's contribution with 	 a maximum contribution of 2.5% of the participant's base 	 compensation. In addition, the Company may make an annual 	 discretionary contribution on behalf of the participants. Employer 	 contributions (approximately $132,000, $101,000, and $44,000 in 	 fiscal 1994, 1993, and 1992, respectively) vest ratably over five 	 years.
	 Stock Purchase Plan: The Company adopted a Stock Purchase Plan, 	 effective March 1995, that allows participating employees to 	 purchase, through payroll deductions, shares of the Company's 	 Common Stock at prevailing market prices. All full-time associates 	 who are 18 years of age or older with at least six months of 	 service are eligible to participate in the Stock Purchase Plan. 	 The Stock Purchase Plan provides that participants may authorize 	 the Company to withhold from net earnings and deposit such amounts 	 with an independent custodian. The custodian will purchase Common 	 Stock of the Company at prevailing market prices and distribute the 	 shares purchased to the participants upon request. The Company 	 will pay expenses associated with the purchase of the Common Stock 	 and administration of the Stock Purchase Plan.
	 NOTE F - Related Party Transactions
	 In fiscal 1992, the Company entered into a deferred compensation 	 agreement with a former executive officer who is currently a member 	 of the Company's Board of Directors. The agreement provides for 	 monthly payments aggregating $75,000 annually (including interest) 	 through July 2002. In fiscal 1992, the present value of the 	 obligation, approximately $493,000, was charged to selling, general 	 and administrative expenses. 	 	 NOTE G - Shareholders' Equity
	 In March 1994, the Company declared a 3-for-2 stock split effected 	 in the form of a stock dividend payable April 29, 1994 to 	 shareholders of record as of the close of business on April 15, 	 1994. Accordingly, Common Stock outstanding, the weighted average 	 number of common and common equivalent shares and per share amounts 	 have been retroactively adjusted to give effect to the stock split.
	 The Company adopted a Shareholder Rights Plan in November 1994. 	 Each shareholder of record on November 15, 1994 is entitled to one 	 Right for each share of Common Stock held on such date. Each Right 	 entitles the registered holder to purchase from the Company one 	 half share of Common Stock at a specified price. The Rights become 	 exercisable only upon the occurrence of certain conditions set 	 forth in the Shareholder Rights Plan relating to the acquisition of 	 20% or more of the outstanding shares of Common Stock.
	 NOTE H - Commitments and Contingencies 	 	 On September 22, 1994, two shareholders filed separate lawsuits 	 making certain securities and common law allegations and seeking 	 unspecified damages against the Company and its Chairman and Chief 	 Executive Officer. The lawsuits, which seek certification as class 	 actions, allege that the Chairman and Chief Executive Officer and 	 the Company made materially false, misleading and untimely 	 projections and statements on earnings. Although the Company 	 cannot predict the likely outcome of these lawsuits at this time, 	 management intends to vigorously defend these actions and believes 	 that as a result of its legal defenses and insurance arrangements, 	 the final outcome should not have a material adverse effect on the 	 Company's consolidated financial condition or results of 	 operations.
	 At December 31, 1994, the Company had commitments of approximately 	 $1,300,000 related to the addition of a new warehouse management 	 system and the expansion of the Distribution Center. 	
ITEM 9:
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 	 AND FINANCIAL DISCLOSURE
There are no matters which are required to be reported under Item 9.
	 PART III
	 ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	 The information required under this item is incorporated herein 	 by reference to the sections entitled "Election of Directors" 	 and "Executive Officers of the Company" of the Company's 	 definitive Proxy Statement (the "Proxy Statement") filed with 	 the Securities and Exchange Commission in connection with the 	 Annual Meeting of Shareholders to be held April 19, 1995.
	 ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
	 The information required under this item is incorporated herein 	 by reference to the sections entitled "Compensation Committee 	 Interlocks and Insider Participation", "Compensation of 	 Executive Officers", "Stock Options", "Employment Contracts and 	 Deferred Compensation Arrangements", "Compensation Committee 	 Report on Executive Compensation", "Performance Graph" and 	 "Election of Directors - Directors' Fees" of the Proxy 	 Statement.
	 ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 	 MANAGEMENT 					
	 The information required under this item is incorporated herein 	 by reference to the sections entitled "Security Ownership of Certain 	 Beneficial Owners and Management", "Election of Directors" and 	 "Executive Officers of the Company" of the Proxy Statement.
	 ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	 The information required in this item is incorporated herein by 	 reference to the section entitled "Compensation Committee Interlocks 	 and Insider Participation" and "Employment Contracts and Deferred 	 Compensation Arrangements" of the Proxy Statement.
	 PART IV
	 ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND 			 REPORTS ON FORM 8-K 			
		 (a) 1. Financial Statements
			 The following financial statements of One 			 Price Clothing Stores, Inc are included in 			 Part II, Item 8: 			 				 Independent Auditors' Report
				 Consolidated Balance Sheets as of 				 December 31, 1994 and January 1, 1994
				 Consolidated Statements of Income for 				 the years ended December 31, 1994, 				 January 1, 1994 and January 2, 1993
				 Consolidated Statements of 				 Shareholders' Equity for the years 				 ended December 31, 1994, January 1, 				 1994 and January 2, 1993
				 Consolidated Statements of Cash Flows 				 for the years ended December 31, 1994, 				 January 1, 1994 and January 2, 1993
				 Notes to Consolidated Financial 				 Statements
		 (a) 2. Financial Statement Schedule
			 The following financial statement schedule of 			 One Price Clothing Stores, Inc. is included in 			 Item 14 (d):
				 Schedule II -- Valuation and 				 Qualifying Accounts.
				
			 Schedules not listed above have been omitted 			 because they are not applicable or the information 			 is included in the financial statements or notes 			 thereto.
		 (a) 3. Exhibits including those incorporated by 	 reference:
		 Exhibit 		 Number Description
		 3(a) Certificate of Incorporation of the 				 Registrant, as amended through April 				 1987: Incorporated by reference to 				 exhibit of the same number in 				 Registrant's Registration Statement on 				 Form S-1, filed April 10, 1987, (File No. 				 33-13321) ("the S-1").
		 3(a)(1) Certificate of Amendment of Certificate 				 of Incorporation of the Registrant: 				 Incorporated by reference to exhibit of 				 same number in Registrant's Annual Report 				 on Form 10-K for the year ended January 				 1, 1994, (File No. 0-15385) ("the 1993 				 Form 10-K").
		 3(b) Restated By-Laws of the Registrant, as of 				 July 22, 1992 and amended as of July 20, 				 1994.
		 4(a) See Exhibits 3(a), 3(a)(1), and 3(b).
		 4(b) Specimen of Certificate of the 				 Registrant's Common Stock: Incorporated 				 by reference to Exhibit 1 of the 				 Registrant's Registration Statement on 				 Form 8-A filed with the Securities and 				 Exchange Commission on June 23, 1987, 				 (File No. 0-15385).
		 4(c) One Price Clothing Stores, Inc. and Wachovia Bank of North Carolina, N. A. as 				 Rights Agent Shareholder Rights Agreement 				 dated November 3, 1994: Incorporated by 				 reference to Exhibit 2 to the 				 Registrant's Form 8-K filed November 10, 				 1994 (File No. 0-15385).
		 Material Contracts -- Executive Compensation Plans and Arrangements: 		 10(a)* Stock Option Plan of the Registrant dated 			 February 20, 1987 and related forms of 				 Incentive and Non-qualified Stock Option 				 Agreements: Previously filed as exhibit 				 10(d) of the S-1.
		 10(b)* Stock Option Plan of the Registrant dated 				 December 12, 1988 and related forms of 				 Incentive and Non-qualified Stock Option 				 Agreements: Incorporated by reference to 				 exhibit 10(a) in the Registrant's Annual 				 Report on Form 10-K for the year ended 				 December 31, 1988, (File No. 0-15385) 				 ("the 1988 Form 10-K").
		 10(c)* One Price Clothing Stores, Inc. 1991 		 Stock Option Plan: Incorporated by 				 reference to exhibit 10(b) in the 				 Registrant's Annual Report on Form 10-K 				 for the year ended December 28, 1991, 				 (File No. 0-15385) ("the 1991 Form 10- 				 K").
		 10(d)* Summary of Officer Bonus Plan: Previously 			 filed as exhibit of the same number in 				 Registrant's Annual Report on Form 10-K 				 for the year ended January 2, 1993, (File 				 No. 0-15385) ("the 1992 Form 10-K").
		 10(e)* Form of Employment Agreement between 				 Registrant and Henry D. Jacobs, Jr.: 				 Previously filed as exhibit 10(j) in the 				 1988 Form 10-K.
		 10(f)* Employment Agreement dated February 1, 				 1991 between the Registrant and Ethan S. 				 Shapiro: Incorporated by reference to 				 exhibit 10(m) in the Registrant's Annual 				 Report on Form 10-K for the year ended 				 December 29, 1990, (File No. 0-15385) 				 ("the 1990 Form 10-K").
	 10(g)* Key man term insurance policy, issued 	 			 February 20, 1993, on the life of Henry 				 D. Jacobs, Jr.: Previously filed as 				 exhibit of the same number in the 1992 				 Form 10-K.
		 10(h)* Employment Agreement dated January 16, 				 1995 between the Registrant and Stephen 			 A. Feldman.
		 10(i)* Disability Income Policy for the benefit 			 of Henry D. Jacobs, Jr.: Previously filed 				 as exhibit of the same number in the 1992 				 Form 10-K.
		 10(j)* Disability Income Policy for the benefit 				 of Ethan S. Shapiro: Previously filed as 				 exhibit of the same number in the 1992 				 Form 10-K.
		 10(k)* Agreement between the Registrant and Jane 				 R. Shapiro, Trustee of the Ethan S. 				 Shapiro Life Insurance Trust: Previously 				 filed as exhibit of the same number in 				 the 1992 Form 10-K.
		 10(l)* Agreement dated June 24, 1992 between the 				 Registrant and Raymond S. Waters: 				 Previously filed as exhibit of the same 				 number in the 1992 Form 10-K.
		 10(m)* Proposed Directors' Stock Option Plan to 				 be effective April 19, 1995 and submitted 				 for shareholders' approval at the Annual 				 Shareholders' Meeting to be held April 			 19, 1995.
		 Material Contracts -- Other:
		 10(n) The Corporate Plan for Retirement Profit 				 Sharing / 401 (k) Plan - A Fidelity 				 Prototype Plan Non-Standardized Adoption 				 Agreement 002, Basic Plan No. 07, as 				 amended September 1, 1994
		 10(o) Letter of agreement for an unsecured 			 $15,000,000 line of credit and 				 $15,000,000 letter of credit facility by 				 and between the Registrant and 				 NationsBank dated April 14, 1994 and 				 unsecured Promissory Note of the 				 Registrant to NationsBank dated April 14, 				 1994: Incorporated herein by reference to 				 exhibit 10 in the Registrant's quarterly 				 report on Form 10-Q for the quarter ended 				 April 2, 1994, (File No. 0-15385).
		 10(p) First Amendment to Letter of agreement, 				 dated December 31, 1994, by and between 				 the Registrant and NationsBank and 				 unsecured Promissory Note of the 				 Registrant to NationsBank dated February 				 27, 1995.
		 10(q) Credit Agreement dated March 16, 1995 by 				 and between the Registrant and 				 NationsBank (as agent) for an unsecured 				 $25,000,000 line of credit facility and a 				 $15,000,000 letter of credit facility.
		 11 Statement regarding computation of per 				 share earnings.
		 21 Subsidiary of the Registrant. 		 		 23 Consent of Deloitte & Touche LLP.
		 27 Financial Data Schedule (electronic 				 filing only).
		 ---------------------------------------
		 * Denotes a management contract or compensatory plan or 		 agreement.
(b) Reports on Form 8-K.
	 On October 21, 1994, the Company filed a report on Form 8-K 	 dated September 29, 1994 to report the legal proceedings 	 discussed in Item 3.
	 On November 10, 1994, the Company filed a report on Form 8-K 	 dated November 3, 1994 to report the adoption of Shareholder 	 Rights Plan by the Board of Directors.
	 No other reports on Form 8-K were filed during the last 	 quarter of the period covered by this report.
(c) Exhibits.
	 The response to this portion of Item 14 is submitted as a 	 separate section of this report.
(d) Financial Statement Schedules.
	 The response to this portion of Item 14 is submitted as a 	 separate section of this report.
			 ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY 				 EXHIBIT INDEX
					
Exhibit 	 Number Description
	 3(a) Certificate of Incorporation of the 				 Registrant, as amended through April 				 1987: Incorporated by reference to 				 exhibit of the same number in 				 Registrant's Registration Statement on 				 Form S-1, filed April 10, 1987, (File No. 				 33-13321) ("the S-1").
	 3(a)(1) Certificate of Amendment of Certificate 				 of Incorporation of the Registrant: 				 Incorporated by reference to exhibit of 				 same number in Registrant's Annual Report 				 on Form 10-K for the year ended January 				 1, 1994, (File No. 0-15385) ("the 1993 				 Form 10-K").
	 3(b) Restated By-Laws of the Registrant, as of 				 July 22, 1992 and amended as of July 20, 				 1994.
	 4(a) See Exhibits 3(a), 3(a)(1), and 3(b).
	 	 4(b) Specimen of Certificate of the 				 Registrant's Common Stock: Incorporated 				 by reference to Exhibit 1 of the 				 Registrant's Registration Statement on 				 Form 8-A filed with the Securities and 				 Exchange Commission on June 23, 1987, 				 (File No. 0-15385).
	 4(c) One Price Clothing Stores, Inc. and 				 Wachovia Bank of North Carolina, N. A. as 				 Rights Agent Shareholder Rights Agreement 				 dated November 3, 1994: Incorporated by 				 reference to Exhibit 2 to the 				 Registrant's Form 8-K filed November 10, 				 1994 (File No. 0-15385).
	 Material Contracts -- Executive Compensation Plans and 	 Arrangements:
	 10(a)* Stock Option Plan of the Registrant dated 				 February 20, 1987 and related forms of 				 Incentive and Non-qualified Stock Option 				 Agreements: Previously filed as exhibit 				 10(d) of the S-1.
	 10(b)* Stock Option Plan of the Registrant dated 				 December 12, 1988 and related forms of 				 Incentive and Non-qualified Stock Option 				 Agreements: Incorporated by reference to 				 exhibit 10(a) in the Registrant's Annual 				 Report on Form 10-K for the year ended 				 December 31, 1988, (File No. 0-15385) 				 ("the 1988 Form 10-K").
	 10(c)* One Price Clothing Stores, Inc. 1991 				 Stock Option Plan: Incorporated by 				 reference to exhibit 10(b) in the 				 Registrant's Annual Report on Form 10-K 				 for the year ended December 28, 1991, 				 (File No. 0-15385) ("the 1991 Form 10- 				 K").
	 10(d)* Summary of Officer Bonus Plan: Previously 				 filed as exhibit of the same number in 				 Registrant's Annual Report on Form 10-K 				 for the year ended January 2, 1993, (File 				 No. 0-15385) ("the 1992 Form 10-K").
	 10(e)* Form of Employment Agreement between 				 Registrant and Henry D. Jacobs, Jr.: 				 Previously filed as exhibit 10(j) in the 				 1988 Form 10-K.
	 10(f)* Employment Agreement dated February 1, 	 			 1991 between the Registrant and Ethan S. 				 Shapiro: Incorporated by reference to 				 exhibit 10(m) in the Registrant's Annual 				 Report on Form 10-K for the year ended 				 December 29, 1990, (File No. 0-15385) 				 ("the 1990 Form 10-K").
	 10(g)* Key man term insurance policy, issued 				 February 20, 1993, on the life of Henry 				 D. Jacobs, Jr.: Previously filed as 				 exhibit of the same number in the 1992 				 Form 10-K.
	 10(h)* Employment Agreement dated January 16, 				 1995 between the Registrant and Stephen 				 A. Feldman.
	 10(i)* Disability Income Policy for the benefit 				 of Henry D. Jacobs, Jr.: Previously filed 				 as exhibit of the same number in the 1992 				 Form 10-K.
	 10(j)* Disability Income Policy for the benefit 				 of Ethan S. Shapiro: Previously filed as 				 exhibit of the same number in the 1992 				 Form 10-K.
	 10(k)* Agreement between the Registrant and Jane 				 R. Shapiro, Trustee of the Ethan S. 				 Shapiro Life Insurance Trust: Previously 				 filed as exhibit of the same number in 				 the 1992 Form 10-K.
	 10(l)* Agreement dated June 24, 1992 between the 				 Registrant and Raymond S. Waters: 				 Previously filed as exhibit of the same 				 number in the 1992 Form 10-K.
	 10(m)* Proposed Directors' Stock Option Plan to 				 be effective April 19, 1995 and submitted 				 for shareholders' approval at the Annual 				 Shareholders' Meeting to be held April 				 19, 1995.
	 Material Contracts -- Other:
	 10(n) The Corporate Plan for Retirement Profit 				 Sharing / 401(k) Plan - A Fidelity 		 Prototype Plan Non-Standardized Adoption 				 Agreement 002, Basic Plan No. 07, as 				 amended September 1, 1994
	 10(o) Letter of agreement for an unsecured 				 $15,000,000 line of credit and 				 $15,000,000 letter of credit facility by 				 and between the Registrant and 				 NationsBank dated April 14, 1994 and 				 unsecured Promissory Note of the 				 Registrant to NationsBank dated April 14, 				 1994: Incorporated herein by reference to 				 exhibit 10 in the Registrant's quarterly 				 report on Form 10-Q for the quarter ended 				 April 2, 1994, (File No. 0-15385).
	 10(p) First Amendment to Letter of agreement, 			 dated December 31, 1994, by and between 				 the Registrant and NationsBank and 				 unsecured Promissory Note of the 				 Registrant to NationsBank dated February 				 27, 1995.
	 10(q) Credit Agreement dated March 16, 1995 by 				 and between the Registrant and 				 NationsBank (as agent) for an unsecured 				 $25,000,000 line of credit facility and a 				 $15,000,000 letter of credit facility.
	 11 Statement regarding computation of per 				 share earnings.
	 21 Subsidiary of the Registrant.
	 23 Consent of Deloitte & Touche LLP.
	 27 Financial Data Schedule (electronic 				 filing only).
				 	 --------------------------------------
* Denotes a management contract or compensatory plan or agreement.
(b) Reports on Form 8-K.
	 On October 21, 1994, the Company filed a report on Form 8-K dated 	 September 29, 1994 to report the legal proceedings discussed in 	 Item 3.
	 On November 10, 1994, the Company filed a report on Form 8-K 	 dated November 3, 1994 to report the adoption of Shareholder 	 Rights Plan by the Board of Directors. No other reports on 	 Form 8-K were filed during the last quarter of the period 	 covered by this report.
(c) Exhibits.
	 The response to this portion of Item 14 is submitted as a 	 separate section of this report.
(d) Financial Statement Schedules.
	 The response to this portion of Item 14 is submitted as a 	 separate section of this report.