Imagine outfitting your family with logo sweatshirts, stretch denim jeans, baby doll tops, varsity jackets, or down parkas – all for less than $10 per item.

Sounds impossible? Welcome to Steve and Barry’s University Sportswear, the newest and most idiosyncratic store in town. In an industry driven by innovative concepts, this outfit is thriving by using one of the oldest approaches of all – giving the consumer more for less.

It’s almost a mantra among retailing analysts that to be successful today requires being either at the very high-end or the very low-end. Neiman Marcus and Wal-Mart are successfully selling apparel, but few in between are posting great results.

That’s what makes Steve and Barry’s worthy of note. To hear founder Barry Prevor tell it, people from all over are set to drive into Manhattan just to shop at his store. He is brimming over with enthusiasm, and so far he’s been right.

Steve Shore and Barry Prevor founded Steve and Barry’s in 1985, initially selling branded college apparel at low prices on the University of Pennsylvania campus. As high school students, the two friends had honed their merchandising techniques selling graphic T-shirts at Roosevelt Raceway during holidays. Some kids sell lemonade; others were born to hawk T-shirts.

Their ambition starting out was simply to produce college apparel for a lower price than was charged at the campus bookstore. Anyone who has shelled out $70 for a university sweatshirt can see the appeal. Before long, the duo had won licensing agreements from more than 100 colleges and universities and had expanded to eight other campuses.

In 1998, Steve and Barry opened their first mall-based outlet. A couple of years later, while cruising the center’s other stores, they realized there were shoppers who were not attracted to their windows full of colorful collegiate paraphernalia (starting, perhaps, with women) and that their prospects might improve if they added a few articles of private-label casual clothing.

Bingo! Fast forward several years, and the chain is adding 30 units by the end of this year, having grown to 91 stores in 30 states. Plans call for another doubling in 2006. Stores range from 50,000 square feet in size like the one in the Manhattan Mall to huge 150,000-square-foot outlets. And, today the team has licenses for the apparel of more than 300 schools.

You don’t have to be a black belt in discount shopping to take advantage of the low prices at Steve and Barry’s. The stores are brightly lit, with wooden floors and large plasma TV screens throughout that broadcast sports events. All this for less than $10.

How can they do it? John Mincarelli, a former Armani executive and chairman of Global Fashion Management at FIT’s Graduate School, thinks this:

“These people must have vision. They must have production lined up way ahead of time. It’s brilliant.” While cautioning that the quality of the goods may not be as great as it appears (some fabrics don’t hold up), he acknowledges that consumers today – especially young people – don’t really care about quality. Much of their wardrobe is intentionally distressed, and few things are worn for more than one season.

Mr. Prevor sums it up this way: “Our whole philosophy is keeping costs down across the system.” Perhaps most important is that they have done away with the middleman. In addition, they source from 26 countries (they are not heavily dependent on any one supplier, including those in China).

They feel they have a competitive edge with factory owners who are routinely beaten up by wholesalers and buyers who impose heavy penalties for lateness or delivery issues. Such buyers have become more exacting in direct proportion to the competitive threat from big-box retailers like Wal-Mart. The suppliers offer good terms to Steve and Barry’s, who can contract production in the off-season and order large runs on sweatshirts and other items that change little from year to year.

Advertising costs are low, too, since most of the company’s promotion is by word of mouth. Also, mall owners are increasingly generous in their lease terms, since Steve and Barry’s has proved it can bring in customers.

While Steve and Barry’s likes to portray itself as doing something wonderful for families (and they do), assuredly this is not a mercy mission.Their markup is lower than that of many competitors, but volume is high. Because it is privately owned, management is reluctant to divulge any revenue data. However, the rapid pace of expansion argues for excellent profitability.

What’s in store? Naturally, investment bankers are sniffing around, no doubt offering up exit strategies. At the moment, the owners appear content to extend their winning streak. Also, they claim to have built the control and management systems necessary to extend the buildout of the next several years.

Arguably, there is a risk that tastes will change and the appetite for university apparel could wane. Since that line only represents 30% of sales today, the impact of a fall off in demand would not be drastic. However, that would render the company less distinguishable from other low-price apparel brands, which could mean having to raise promotion costs, hurting margins.

Meanwhile, there seems no end of people who want to wear branded goods from schools they didn’t attend, haven’t visited, and in some cases have never even heard of.