Woodward & Lothrop has "entered its second century with considerable optimism" about the future of its key Washington area marketplace, after a year in which sales rose to a record of about $300 million, Chairman Edwin Hoffman said last night.

At a gala celebration of the department store company's 100th birthday, attended by Who's Who of America's retail merchandising and manufacturing businesses, Hoffman said a cultural renaissance created by the Kennedy Center, ease of Transportation offered by the subway system and plans to open a downtown convention center by 1983 are keystones to a revitalized central business core for the District.

And Mayor Marion Barry Jr., quipping that, "Woodies has a surplus and we don't," stated emphatically that the city government is about to unveil a program that will solve an emerging budget crisis, reportedly through spending cuts, higher taxes in some areas and possible layoffs for some employes.

Faced with a projected $175 million budget deficit in the current fiscal year, Barry said a detailed government plan will be announced next week -- one he said would include "some painful" actions. "We're spending more than we should," he added. But the mayor emphasized: "We have solutions."

Speaking to more than 500 persons at the Capital Hilton ballroom, Barry said there are "ups and downs, cash flow and expenditure problems. . . just as you have, and you solve yours."

Before coming to the dinner, Barry already had announced an immediate freeze on city hiring, promotions and most overtime.

Barry also used the occasion to invite the business people to relocate their companies to the city, asserting that more office space was built here last year than in New York City, Chicago, Las Vegas and Los Angeles combined.

To Woodies Chairman Hoffman, other senior officers and dozens of the retailer's 7,000 workers, Barry said the department store had become an "integral part of our community. . . a great business, civic organization, not just selling merchandise."

Hoffman emphasized that last night's affair was principally an "appreciation for vendors," the companies that sold $300 million of goods to the Washington firm last year -- up from $271 million a year earlier.

The company opened for business in downtown Washington on Feb. 25, 1880, and is one of only a handful of major U.S. department store businesses still independent and not owned by a national chain. Or, as Hoffman described it: "The last of the red-hot independents."

In the audience were such executives as Chairman Richard Schwartz of Jonathan Logan, National Retail Merchants Association President James Williams Manhattan Industries Chairman Lawrence Leeds Jr. and Associated Merchandising Corp. Chairman Lee Abraham.

At a reception before the dinner, Abraham echoed the upbeat mood of retailers generally, stating that sales across the nation are doing very well and are advancing at a rate higher than the price inflation of general merchandise -- which is about 9 percent.

Washington Post Co. Chairman Katharine Graham, the main dinner speaker, noted that on anniversary occasions "we too often wind up mentioning the big landmarks in a company's history and neglecting the day-in, day-out work that made them possible." In the case of Woodies, she said, it "is a whale of a business success story, and it is obviously run by a very brilliant and able management team."

Faced with a new competitive environment, Woodies "has had to redefine its business in the last 10 years. . .they've stayed independent, locally owned and operated. . . a triumph for Washington," she said.

Columnist Art Buchwald said that without Woodies, "Washington would be just another small town surrounded by Bloomingdale's," and he revealed that the reason founders Samuel Woodward and Alvin Lothrop has picked D.C. for their store was that the mayor promised a century ago to build a subway. He also noted that Metro opened about 100 years later, "right on schedule."

According to the humorist, President Carter had been invited last night but declined because he couldn't leave the White House in an election year. He also credited Woodies with selling merchandise to the FBI for its "sting" operation at cost.