Discussions of off-price retail stores deal mainly with such companies as Ross Stores (NASDAQ:ROST) and TJX (NYSE:TJX). However, there are signs that smaller competitor Syms (NYSE:SYM) -- which reported fiscal Q3 (ended Nov. 29) earnings last week -- might warrant some coverage now as well.

Syms is a relatively small player, compared to the competition. It has only 40 stores, compared to more than 2,000 worldwide for TJX (across a number of store lines) and approximately 600 for Ross. But the companies' businesses are pretty much identical: primarily name-brand, in-season men's, women's and children's apparel bought and sold at discount rates.

Both of the "big boys" have managed to ply their market to good effect, their stocks beating the S&P 500 over the last five years despite increased competition from traditional retailers and value types such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT).

Syms' stock hasn't been so fortunate over that same period, but has looked much stronger in the last 12 months as the company has shown signs of life. While it's still unprofitable, Q3 sales rose year over year and same-store sales inched upward for the first three quarters of fiscal 2004.

Indications that the company is making progress on the income statement were seen last fiscal year, when gross margins improved and operating costs (as a percentage of revenues) fell -- though both figures have come under pressure this year. The balance sheet, meanwhile, looks better than it did a year ago with more cash and less debt and inventory.

Perhaps most encouragingly, Syms has continued to generate free cash flow even as it struggles to return to net profitability. Syms hasn't turned the corner -- net losses are wider so far this year than in the last -- but investors are starting to show that they believe it can.

Does Syms have a chance against the big boys? Tell us what you think on the Retail discussion board. Dave Marino-Nachison can be reached at dmarnach@fool.com.