No one said the troublesome teen years were easy, but Alloy (NASDAQ:ALOY) has a plan to make them a lot less painful: Spin them off. The tween and teen-targeting marketing and retailing hodgepodge is refocusing on its core direct marketing business.

Overburdened with promotional events, Internet and catalog sales, retail operations, and various marketing processes, Alloy cried uncle earlier this month and disclosed plans to spin off its retail operations geared toward teens aged 12-19. The New York-based company, less than 10 years old itself, will be focusing on its core media, marketing, and promotions segments. Changing strategy and gaining cash, Alloy is poised to mature quite nicely for investors.

Tween and teen targeting is hot. Popular Generation-Y geared media outlets MTV, owned by Viacom (NYSE:VIA), and Teen People, owned by Motley Fool Stock Advisor pick Time Warner (NYSE:TWX), produce online content similar to Alloy's, complete with Internet polls gauging which celeb relationship is nearly kaput. Alloy has more of a female focus than its competitors, complete with a "dude decoder" to unlock the secrets of guys.

Alloy hit a growth spurt in the second quarter by shedding bicycle retailer Dan's Competition and integrating all of Delia's operating expenses into marketing operations. Losses were down to $0.07 in the second quarter from a loss of $0.27 during the same time last year. Cash and equivalents increased significantly for the second quarter, breaking the $30 million mark.

Losing Dan's and moving toward the black is no coincidence. The male-focused retailer of bicycle equipment and apparel left more than a few skid marks on Alloy's financials since its purchase for nearly $40 million in late 2001. Revenue from the discontinued operation plummeted to $1.5 million in the second quarter from $4.7 million during the same time last year. Net income from Dan's was an anorexic $213,000 in the second quarter, down $30,000 from the previous year.

Alloy acquired trendy teen-targeting retailer Delia's for almost $50 million in cash in September 2003. Two years later, this retail problem child has taken the proverbial financial family station wagon and run amok. Alloy operated 55 Delia's stores and generated $64 million in revenue in 2004. However, cost of revenues ballooned 10% to $208.3 million, and rent expense nearly doubled to $15.4 million. Alloy's net income went from $0.53 in FY 2003 to a loss of $1.87 per share for fiscal year 2004.

Alloy's greatest strength is its customer database of 31 million Generation Y-ers. With nearly 2,000 advertising clients, including Qwest Communications (NYSE:Q), Geico, and Procter & Gamble (NYSE:PG), Alloy is well-established in its field. It has nothing to lose by going back to what it does best. Spinoff-related expenses are expected to reach $3 million, but it'll be worth it to have Delia's pay its own rent.

Fool contributor Amanda Tyler has no position in any of the companies mentioned here. The Fool has a disclosure policy.