(MONEY Magazine) – Bill Prange knew it would be a long shot--getting a reservation at Minneapolis' hottest restaurant the night before the Final Four tipped off at the city's Metrodome arena. But Prange wanted to impress a friend visiting from out of town, so he dialed Manny's Steakhouse and requested a table. "The maitre d' asked my name, I told him Bill Prange, and then he blurts out, 'You're the guy from Christopher & Banks! I love you, man! I own your stock!'" Needless to say, Prange got his reservation.

It's easy to see why investors would be so enamored with Christopher & Banks (CHBS) and its 47-year-old CEO. While the tech bubble was bursting, this little-known chain of 295 women's clothing stores dethroned glamour stocks like Dell and Veritas to become the best-performing stock in America.

Yes, you read that right. After climbing to $39 in late April from a split-adjusted 44[cents] a share five years ago, this modest retailer of practical fashions for middle-aged, middle-class women has gained a mind-boggling 8,800%, according to Baseline. This five-year total return figure is nearly 6,000 percentage points better than the chipmaker QLogic, the second-best-performing U.S. stock, and light-years ahead of technology bellwethers such as EMC, up 1,435%; Microsoft, up 403%; and Cisco, up 180%. To put Christopher & Banks' heroics into further perspective, consider that if you had had the good fortune to invest $20,000 in the stock five years ago, your stake would be worth nearly $1.8 million today.

So how did a tiny company that sells slacks and sweaters to schoolteachers beat the pants off Nasdaq's biggest names? The answer simultaneously tells you everything and nothing about how to pick stocks and make wise investments. Everyone fantasizes about discovering the next Microsoft, but what the Christopher & Banks story so clearly demonstrates is that setting out to find the next jackpot stock may be the surest way to never own one. The quest for such stocks really is like looking for a needle in a haystack.

Five years ago, nobody was expecting much from Christopher & Banks. The only thing messier than its 170 stores was its balance sheet, a state of affairs that forced the company into bankruptcy in 1996. Investors who took a flier on the company did so because they believed its financial woes had left the stock severely undervalued--not because they believed that Christopher & Banks was on the verge of greatness. "It was rank speculation on my part," admits Robert McCullough of McCullough Andrews & Capiello, a money-management firm that still holds 49,000 shares. "I liked the new management, but the best I was hoping for was a four- or fivefold gain."

That's not to say there aren't lessons to be learned from this stock. The most important one may be that you needn't dive into the frothiest sectors of the market to make a killing. Of the 20 U.S. stocks with the best five-year performance records, five are as Old Economy as they come: Christopher & Banks, oil and gas drilling equipment maker UTI Energy, home builder NVR, fellow retailer American Eagle Outfitter, and Kansas City Southern, the railroad company and former owner of Janus Funds. "You can make a lot of money in areas other than technology and health care," says Frank Sustersic, whose Turner Micro Cap Growth fund owns 287,000 CHBS shares.

In some ways, Christopher & Banks represents the ultimate validation of old-school investing. Once CEO Prange gave the stores a makeover, Christopher & Banks became a company with a strong niche and growing earnings whose lack of sex appeal kept it virtually undiscovered. "You hear what they sell and who they sell to, and your first thought is, Where's the sizzle?" says Susie Pinsky, an analyst with Wanger Asset Management, which owns 532,000 shares. "Then you see how few other companies are going after this market, and it's easy to understand why they've grown so rapidly."

Back when most of the fashion industry was obsessed with Gen X-ers, Prange--who got his start as a buyer at Macy's in New York City--took an apparel chain that was failing at being all things to all women and geared it exclusively to female baby boomers frustrated by designers' inattention to their changing shapes and sizes. So focused is Christopher & Banks on its target customer that the company has given her a name--Mary--and an identity. "Mary is 45 years old, married; she drives an SUV; she has two kids, and she works full time as a schoolteacher or a social worker," Prange says.

The concept of Mary pervades the Christopher & Banks culture. Employees constantly chat about how Mary's doing financially, what her leisure activities are and what clothes best fit her lifestyle. Prange even makes a point of eating out at the restaurants and vacationing at the resorts that Mary favors. Illustrating the value of this kind of grass-roots market research, Prange visits a Dayton's department store in a mall near his company's Plymouth, Minn. headquarters and pulls off the rack a cotton-and-spandex top that Dayton's is selling to plus-size women. "Spandex is simply not going to work with a larger woman," Prange says. "She doesn't want to wear anything too tight or clingy."

Such insights have helped Christopher & Banks post average earnings growth of 77% a year since 1996. In the first quarter of this year--a weak one for retailers--the company increased earnings 62%. That kind of performance attracts plenty of investor cash. So far in 2001 the stock is up 111%.

So is there still opportunity ahead for this unheralded market darling? As strong as Prange's business may be, with shares at 26 times earnings (vs. an average P/E of 23 for other apparel retailers), Christopher & Banks is no longer dirt cheap. Nor is the company, which sports a still small market value of $600 million, a secret on Wall Street anymore. When top shareholders include AIM, Fidelity and Pimco, rest assured that the easy money has already been made.

Ultimately, Christopher & Banks is a reminder that investors shouldn't forsake unglamorous sectors of the market, because even the most humdrum businesses can yield big returns. But it also demonstrates why trying to hit a home run is an exercise in futility. Nobody could have known that Prange's first turn running a public company would be so successful or that Christopher & Banks would hit its stride just as the technology sector was imploding and Old Economy stocks were coming back in vogue. Think about this company the next time you cast your eyes with envy over a list of top-performing stocks. Chart-topping stocks will always be their own idiosyncratic breed. And that's worth remembering when somebody tries to sell you on the next Microsoft.