QUICK PACE REVIVES JUNIORS FASHIONS CLOTHING CHAINS COME BACK\AFTER HARD LESSON.

Byline: Jennifer Steinhauer The New York Times

Not so long ago, the Talking Heads blared and rayon shirts flew off the racks in malls throughout the country. Chains like the Limited and Merry-Go-Round, catering to teen-age girls, enjoyed surging sales, rapid growth and soaring stocks throughout the 1980s.

Then, a few too many cable-knit sweaters later, the boom turned to bust. Intoxicated by their success, the juniors chains overexpanded and committed the ultimate sin in apparel: filling their racks with the same look-alike styles, differentiated only by their price tags.

In 1986, for example, the Limited introduced a primary-color sweater with the pseudo-Italian brand name Forenza. The sweater, matched with a pair of stirrup pants, became the weekend uniform for every girl and young woman in America.

In what seemed a conspiracy to get an entire generation to dress alike, a slew of stores offering the same outfits opened up across the country, resulting in too many shops in too many malls, stocked with too much of the same merchandise. A string of Chapter 11 filings and liquidations was the epilogue to a successful business story gone bad.

But now the juniors business appears to be going through a quiet rebirth, and may be showing the way for the rest of the retail industry to regroup for leaner times, analysts say.

Most retailing specialists agree that the glory days of the 1980s are gone for good. But they say that a few clothing stores are succeeding among teen-age girls, with a strategy of rushing out new styles before their customers can get their algebra homework finished.

These companies react quickly to fads, keep inventory and store roll-outs tight and put executives at the helm who keep a close watch on operations.

"In juniors, it is all about speed," said Eric Appell, a senior analyst at Dabney Resnick, an asset management firm in Beverly Hills. "If you've made a mistake, mark it down and get it out of there. Merry-Go-Round kept denying this strategy and building inventory, and it killed them." The company went out of business this year.

Wet Seal/Contempo, a survivor of the 1980s shakeout, is trying to avoid the problems of Merry-Go-Round. Wet Seal started in 1962 as a bathing-suit company and became a big hit with teen-agers in the mid-1980s before falling on hard times in the early 1990s because of a bad mix of fashions and the troubled economy.

After losing more than $1 million in the fiscal year that ended in January 1995 - and with the company's stock down to $6.75 from a peak of $18 in March 1991 - Wet Seal executives say they concluded that to seize the juniors market, they needed to make faster decisions about fashion.

First, though, they moved to neutralize one of their main competitors by buying the 238-store Contempo Casuals chain last summer from the Neiman Marcus Group for $1 million in Wet Seal stock and renaming the company Wet Seal/Contempo. Analysts say that Neiman Marcus, which is owned by Harcourt General Inc., let the chain go cheaply because it wanted to unload it quickly and make sure it fell into the hands of a company dedicated to keeping it open.

Then Kathy Bronstein, who became Wet Seal/Contempo's chief executive in 1992, instituted a policy of micromanaging inventory from the top. She was able to carry the policy through the following year, when Edward Thomas was hired as chief operating officer and she turned her attention away from the books and toward merchandising.

"I sign every order that goes out of this company," she said. "Right down to the last earring.

"We'll take a runway trend and translate it quickly," she added. "We don't test and reorder. We buy and we move on to the next thing."

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Photo Serina Magner, 17, shops at a Rampage store in Los Angeles. The chain is thriving by gearing its clothing to regional tastes. The New York Times