ITURF INC, S-1/A, 1999-11-22

ITURF INC
S-1/A, 1999-11-22
CATALOG & MAIL-ORDER HOUSES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 22, 1999

REGISTRATION NO. 333-90435

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ITURF INC.
(Exact name of registrant as specified in its charter)

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<S> <C> <C>
DELAWARE 5961 13-3963754
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
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435 HUDSON STREET
NEW YORK, NEW YORK 10014
(212) 742-1640
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

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STEPHEN I. KAHN
435 HUDSON STREET
NEW YORK, NEW YORK 10014
(212) 742-1640
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
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COPIES OF COMMUNICATIONS TO:

ALEX S. NAVARRO, ESQ.
ITURF INC.
435 HUDSON STREET
NEW YORK, NEW YORK 10014
(212) 742-1640
------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effectiveness of this Registration Statement. If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE

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<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE OFFERING PRICE PER AMOUNT TO BE AGGREGATE AMOUNT OF
REGISTERED SHARE (1) REGISTERED OFFERING PRICE (1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Class A Common Stock, par
value $.01 per share.... $10.28125 1,586,996 $16,316,303 $4,536 (2)
</TABLE>

SUPPLEMENTAL FEE TABLE (3)

(1) Estimated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, solely for the purpose of calculating the registration fee.

(2) Previously paid.

(3) For purposes of calculating registration fee for additional securities
included in Amendment No. 1.

(4) Represents additional fee paid with this Amendment.

We hereby amend this registration statement on such date or dates as may be
necessary to delay its effective date until we file a further amendment which
specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
this registration statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to said Section 8(a), may
determine.

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SUBJECT TO COMPLETION, DATED NOVEMBER 19, 1999

[LOGO]

CLASS A COMMON STOCK

-----------

The selling stockholders identified in this prospectus are offering up to
3,586,996 shares of our Class A common stock. Our Class A common stock is traded
on the Nasdaq National Market under the symbol "TURF." The last reported sale
price for our Class A common stock on the Nasdaq National Market on November 17,
1999 was $11.8125 per share.

We will not receive any of the proceeds from the sale of shares by the selling
stockholders and we are not offering any shares for sale under this prospectus.
See "Selling Stockholders" and "Plan of Distribution" for a description of sales
of the shares by the selling stockholders.

INVESTING IN THE CLASS A COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 8.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

NOVEMBER , 1999
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TABLE OF CONTENTS

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Prospectus Summary.......................................... 3
The Offering................................................ 6
Risk Factors................................................ 8
Forward-Looking Statements.................................. 22
Dividend Policy............................................. 23
Price Range of Common Stock................................. 23
Capitalization.............................................. 24
Selected Consolidated Financial Data........................ 25
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 27
Business.................................................... 35
Management.................................................. 53
Transactions with Our Parent................................ 60
Principal and Selling Stockholders.......................... 64
Plan of Distribution........................................ 67
Description of Capital Stock................................ 68
Shares Eligible for Future Sale............................. 74
Legal Matters............................................... 76
Experts..................................................... 76
Where You Can Find More Information......................... 76
Index to Financial Statements............................... F-1
</TABLE>

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PROSPECTUS SUMMARY

YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN
THIS PROSPECTUS.

AS USED IN THIS PROSPECTUS, THE TERM "PARENT" MEANS DELIA*S INC., A
REPORTING COMPANY UNDER THE SECURITIES EXCHANGE ACT OF 1934. OUR PARENT OWNS ALL
OF THE SHARES OF OUR CLASS B COMMON STOCK AS OF THE DATE HEREOF. THE CLASS B
COMMON STOCK ENTITLES OUR PARENT TO SIX VOTES PER SHARE, AS COMPARED TO ONE VOTE
PER SHARE OF THE CLASS A COMMON STOCK. FOLLOWING THIS OFFERING, OUR PARENT WILL
CONTINUE TO BENEFICIALLY OWN ALL OF THE OUTSTANDING SHARES OF THE CLASS B COMMON
STOCK, AND THEREFORE, WILL HOLD APPROXIMATELY 88% OF THE VOTING POWER OF OUR
OUTSTANDING CAPITAL STOCK.

OUR BUSINESS

iTurf is a leading provider of Internet community, content and commerce
services focused primarily on Generation Y, based on sales and number of
visitors on our Web sites. Generation Y is comprised of 56 million people
between the ages of 10 and 24 and accounts for over $278 billion of disposable
income. iTurf.com is an online destination where Generation Y members can
interact and shop in a domain of their own, away from the pressures of parents
and school. Our network of Web sites includes Web sites that offer interactive
magazines, or web/zines, with proprietary content, chat rooms, posting boards,
personal homepages, e-mail, and online shopping. Our gURL community is a group
of affiliated Web sites that includes our gURL.com, gURLnet.com, gURLpages.com
and gURLmail.com Web sites. The gURL community sites provide interactive
features and regularly updated articles on topics of interest to Generation Y
girls and young women. Our OnTap.com Web site is a community and content site
focusing on college and university students between the ages of 18 and 24. Our
sites that provide online commerce opportunities, or e-commerce, include our
dELiAs.cOm, TSISoccer.com, contentsonline.com, discountdomain.com, droog.com,
StorybookHeirlooms.com and dotdotdash.com sites. These commerce sites offer a
wide range of apparel, accessories, footwear, athletic gear and home furnishings
for Generation Y.

We are a subsidiary of dELiA*s Inc., the leading direct marketer to
Generation Y. Our relationship with our parent provides the following
advantages:

- exclusive online use of leading brand names including dELiA*s and TSI
Soccer;

- a proprietary 11 million-name database that includes six million
individuals who have made catalog purchases;

- advertising space in our parent's catalog publications that collectively
have circulation in excess of 60 million;

- substantial merchandising expertise and strong relationships with hundreds
of vendors; and

- sophisticated services from our parent's distribution center to fill our
product orders.

The number of visits to our Web sites and online sales have grown rapidly
over the last year. We estimate that the number of pages viewed by online users
per month on our Web sites has grown from approximately 800,000 in February 1998
to approximately 82 million in July 1999. Our revenues have increased from
$829,000 in the six months ended July 31, 1998 to $5.6 million in the 26 weeks
ended July 31, 1999. By selling a selection of branded and proprietary products,
we have been able to achieve higher gross profits per order on merchandise sales
than many other e-commerce companies. In the six months ended July 31, 1999, our
gross margin was approximately 46%.

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We currently generate a substantial majority of our revenue from e-commerce
sales, but expect to further develop our other revenue streams in the future.
Our four primary sources of revenue are:

- e-commerce sales through our dELiAs.cOm, TSISoccer.com,
contentsonline.com, discountdomain.com, droog.com, Storybookheirlooms.com
and dotdotdash.com sites;

- fees paid for advertising on our sites;

- fees from licensing the gURL brand name and related online content; and

- subscription fees paid by members of our discountdomain.com discount
shopping service.

OUR MARKET OPPORTUNITY

Generation Y is an increasingly important demographic group on the Internet.
We believe that e-commerce sales to teens and college students will increase
from $600 million in 1998 to $3.8 billion in 2002, while spending on advertising
to this group will increase from $500 million in 1998 to $2.1 billion in 2002.
However, Generation Y is difficult to reach for traditional retailers,
advertisers and e-commerce providers. Members of Generation Y desire
entertainment, communication, and advice focused on their particular needs. They
demand engaging content that does not speak down to them. Major Internet sites
generally do not exclusively address teen issues of peer, parental and
school-related pressures, friendship, sexuality and competition. Accordingly, we
believe there is a need for a Generation Y online destination consisting of an
integrated network of community and commerce in a trusted environment.

We may not enjoy the same growth rates as the recent rates of growth of
e-commerce spending by or advertising targeting Generation Y.

OUR STRATEGY

Our goal is to build iTurf into the most heavily-trafficked Generation Y
destination online. The key elements of our strategy are to:

- strengthen the recognition of the iTurf brand and each brand in our
network of sites;

- enhance our online offerings to drive traffic to our sites and increase
revenue; and

- expand the infrastructure of our Web sites to enhance functionality for
users and to support growth of our business.

Our e-commerce and community sites will be linked by the iTurf.com Web site.
We intend to develop iTurf.com as the online meeting place and community for
Generation Y. We will promote and drive users to this site through all of the
sites in our network. We believe that iTurf.com will be able to generate
advertising and sponsorship revenue from advertisers and retailers seeking
targeted access to Generation Y.

RECENT DEVELOPMENTS

On September 1, 1999, we acquired [email protected], Inc. Taponline.com was
acquired pursuant to an Agreement and Plan of Merger, dated as of August 9,
1999, by and among iTurf, iTurf Acquisition Corporation, a wholly-owned
subsidiary of iTurf ("Merger Sub"), Taponline.com, the stockholders of Taponline
and MarketSource Corporation, a Delaware corporation (as amended, the "Merger
Agreement"). Pursuant to the Merger Agreement, Merger Sub was merged with and
into Taponline.com, with Taponline.com as the surviving corporation (the
"Merger"). As a result of the Merger, Taponline.com became a wholly-owned
subsidiary of iTurf. The merger consideration consisted of 1,586,996 shares of
our Class A common stock.

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Taponline.com operated a community and content Web site focusing on college
and university students between the ages of 18 and 24.

In connection with the transaction, MarketSource Corporation, which is owned
by certain of the shareholders of Taponline.com, including Martin D. Levine, who
was recently elected as a member of our board of directors, entered into an
arrangement to purchase advertising and other inventory on our network of sites
for resale to MarketSource's clients. Separately, we have agreed to enter into a
marketing alliance with MarketSource to promote our network of sites through
MarketSource's offline marketing channels. We committed to purchasing
approximately $6.5 million in promotional opportunities through these channels
over the next three years.

Our principal offices are located at 435 Hudson Street, New York, New York
10014, and our telephone number is (212) 742-1640.

ANY REFERENCE IN THIS PROSPECTUS TO A PARTICULAR FISCAL YEAR AFTER 1998 IS
TO THE YEAR ENDED THE SATURDAY CLOSEST TO JANUARY 31 FOLLOWING THE CORRESPONDING
CALENDAR YEAR. FOR EXAMPLE, "FISCAL 1999" MEANS THE PERIOD FROM FEBRUARY 1, 1999
TO JANUARY 29, 2000. ANY REFERENCE IN THIS PROSPECTUS TO A PARTICULAR FISCAL
YEAR BEFORE 1999 IS TO THE YEAR ENDED JANUARY 31 FOLLOWING THE CORRESPONDING
CALENDAR YEAR. FOR EXAMPLE, "FISCAL 1998" MEANS THE PERIOD FROM FEBRUARY 1, 1998
TO JANUARY 31, 1999.

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THE OFFERING

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Class A common stock offered by the selling stockholders.... 3,586,996
Common stock to be outstanding after the offering:
Class A common stock...................................... 8,418,132 shares
Excludes a total of 2,915,663 shares of
Class A common stock issuable upon
exercise of options outstanding as of
October 30, 1999, with a weighted
average exercise price of $13.90 per
share, and 1,134,337 additional shares
of Class A common stock reserved for
issuance under our stock incentive
plan.

Class B common stock...................................... 10,500,000 shares

Nasdaq National Market symbol............................... TURF
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SUMMARY FINANCIAL DATA

The following tables summarize our financial results and should be read in
conjunction with the "Selected Financial Data," the iTurf Financial Statements
and notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this prospectus. The
historical financial statements include allocations for administrative,
distribution and other expenses incurred by our parent for services rendered to
iTurf. While we believe such allocations to be reasonable, they are not
necessarily indicative of, and it is not practical for us to estimate, the
levels of expenses that would have resulted had iTurf been operating as an
independent company.

The accompanying financial data include the Internet operations of TSI
Soccer Corporation, that was acquired by our parent in a transaction accounted
for in a pooling of interests, from March 14, 1995, its date of inception. They
also include the operations of gURL, Interactive Inc. from December 17, 1997,
the date of its acquisition, and additional Internet operations developed since
December 17, 1997, including the dELiAs.cOm Web site, which was launched in May
1998.

All share and income (loss) per share amounts are based on the number of
shares outstanding as of July 31, 1999 after giving effect to the issuance of
4,830,000 of our Class A common stock upon completion of our initial public
offering on April 14, 1999, on a weighted average basis, and the
reclassification of 100 shares of common stock outstanding at January 31, 1999
into 12,500,000 shares of Class B common stock. See Notes to iTurf Financial
Statements for information concerning the computation of basic and diluted net
income (loss) per share.

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<CAPTION>
PERIOD FROM
MARCH 14, 1995
(DATE OF INCEPTION) SIX MONTHS TWENTY SIX
THROUGH YEAR ENDED JANUARY 31 ENDED WEEKS ENDED
JANUARY 31 ------------------------------ JULY 31 JULY 31
1996 1997 1998 1999 1998 1999
------------------- -------- -------- -------- ---------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues............... $ 6 $ 13 $ 134 $ 4,014 $ 829 $ 5,567
Gross profit........... 4 7 65 2,327 455 2,584
Income (loss) from
operations........... (2) (7) (49) 821 (99) (3,221)
Net income (loss)...... $ (1) $ (4) $ (40) $ 425 $ (77) $(1,959)
======= ======= ======= ======= ======= =======
Basic and diluted net
income (loss) per
share................ $ (0.00) $ (0.00) $ (0.00) $ 0.03 $ (0.01) $ (0.13)
======= ======= ======= ======= ======= =======
Shares used to compute
basic net income
(loss) per share..... 12,500 12,500 12,500 12,500 12,500 15,372
======= ======= ======= ======= ======= =======
Shares used to compute
diluted net income
(loss) per share..... 12,500 12,500 12,500 12,518 12,500 15,372
======= ======= ======= ======= ======= =======
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<CAPTION>
JULY 31, 1999
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(IN
THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents................................... 22,422
Short-term investments...................................... 55,517
Working capital............................................. 75,940
Total assets................................................ 81,960
Total stockholders' equity.................................. 78,121
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RISK FACTORS

YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISKS BEFORE YOU DECIDE TO BUY
OUR CLASS A COMMON STOCK. WE HAVE DESCRIBED THESE RISKS AND UNCERTAINTIES UNDER
THE FOLLOWING GENERAL CATEGORIES: "RISKS RELATED TO OUR BUSINESS," "RISKS
RELATED TO OUR RELATIONSHIP WITH OUR PARENT," "RISKS RELATED TO THE INTERNET
INDUSTRY" AND "RISKS RELATED TO THIS OFFERING." THE RISKS AND UNCERTAINTIES
DESCRIBED BELOW ARE NOT THE ONLY ONES FACING OUR COMPANY AND OUR
SECURITYHOLDERS. ADDITIONAL RISKS AND UNCERTAINTIES MAY ALSO ADVERSELY IMPAIR
OUR BUSINESS OPERATIONS. IN SUCH CASE, THE TRADING PRICE OF OUR CLASS A COMMON
STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF THE MONEY YOU PAID TO BUY
OUR CLASS A COMMON STOCK.

RISKS RELATED TO OUR BUSINESS

WE HAVE A LIMITED OPERATING HISTORY ON WHICH AN INVESTOR CAN EVALUATE OUR
BUSINESS

We have a limited operating history on which an investor can evaluate our
business. Our TSISoccer.com operations began in 1995, and the gURL.com Web site
was launched in 1996. However, we did not begin selling merchandise from the
dELiA*s catalog on the Internet until May 1998. As a result, we have generated
substantially all of our revenues since May 1998. You must consider the risks
and difficulties we encounter as an early-stage company in the new and rapidly
evolving Internet, e-commerce and online advertising markets. These risks
include our ability to:

- sustain historical revenue growth rates;

- implement our business model;

- manage our expanding operations;

- attract, retain and motivate qualified personnel;

- anticipate and adapt to rapid changes in our markets;

- attract and retain a large number of advertisers;

- maintain and enhance our systems to support growth of operations and
increasing user traffic;

- retain existing customers, attract new customers and maintain customer
satisfaction;

- introduce new and enhanced Web pages, services, products and alliances;

- maintain our profit margins in the face of price competition or rising
wholesale prices;

- minimize technical difficulties, system downtime and the effect of
Internet brown-outs;

- manage the timing of iTurf promotions and sales programs; and

- respond to changes in government regulation.

If we do not successfully manage these risks, our business, results of
operations and financial condition will be materially adversely affected. We
cannot assure you that we will successfully address these risks or that our
business strategy will be successful.

WE HAVE NO HISTORY AS AN INDEPENDENT COMPANY

Prior to the closing of our initial public offering in April 1999, we had
operated as a wholly-owned subsidiary of our parent. We do not have a
substantial operating history as an independent company. Our business could be
materially adversely affected if our parent fails to adequately provide us
services or if we fail to develop systems of our own. We rely on our parent to
provide merchandising, inventory management, creative, technical, marketing,
customer service, human

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resources, finance, accounting, administrative, legal and other services and
will continue to receive such services pursuant to intercompany agreements
between us and our parent. We intend to develop the operational, administrative
and other systems and infrastructure necessary to support our current and future
business on an independent basis.

The historical financial statements contained in this prospectus for the
periods prior to our initial public offering include allocations for
administrative, distribution and other expenses incurred by our parent for
services rendered to iTurf. While we believe such allocations to be reasonable,
they are not necessarily indicative of, and it is not practical for us to
estimate, the levels of expenses that would have resulted had iTurf been
operating as a separate, stand-alone company. We also relied on our parent to
provide financing for our operations. Therefore, investors should not rely on
our cash flows to date as indicative of the cash flows that would have resulted
had iTurf been operating as an independent company during the periods presented
prior to our initial public offering.

WE EXPECT TO INCUR SUBSTANTIAL NET LOSSES FOR THE FORESEEABLE FUTURE

We expect to record substantial net losses for the foreseeable future. We
believe that our continued growth will depend in large part on our ability to:

- increase awareness of our brand names;

- provide our customers with superior Internet community and e-commerce
experiences; and

- continue to enhance our systems and technology to support increased
traffic to our Web sites.

Accordingly, we intend to dramatically increase our level of marketing and
promotional expenditures. We also expect to invest heavily to further develop
our Web sites, technology and operating systems. We will incur increased
expenses in connection with fees payable to our parent pursuant to intercompany
agreements with our parent. Slower revenue growth than we anticipate or
operating expenses that exceed our expectations would have a material adverse
effect on our business.

WE MAY FAIL TO ANTICIPATE AND RESPOND TO FASHION TRENDS

Our failure to successfully anticipate, identify or react to changes in
styles, trends or brand preferences of our customers may result in lower revenue
from reduced sales and promotional pricing.

We derive the majority of our revenues from the online sale of apparel,
accessories and footwear, particularly those featured in the dELiA*s catalog.
Accordingly, our success depends, in part, on our ability and our parent's
ability to anticipate the frequently changing fashion tastes of our customers,
and to offer merchandise that appeals to their preferences on a timely and
affordable basis. If we misjudge merchandise selection, our image with our
customers would be materially adversely affected. Poor customer reaction to our
parent's products or a failure by our parent to source these products
effectively would have a material adverse effect on iTurf.

WE MAY FAIL TO RETAIN AND INTEGRATE OUR KEY PERSONNEL TO OPERATE OUR BUSINESS,
AND WE MAY BE UNABLE TO HIRE AND RETAIN QUALIFIED PERSONNEL AS OUR BUSINESS
GROWS.

Our success depends on the continued service of our key technical, sales and
senior management personnel. Loss of the services of Stephen I. Kahn, our
President, Chief Executive Officer and Chairman of our board of directors,
Dennis Goldstein, our Chief Financial Officer, Alex S. Navarro, our Chief
Operating Officer, Oliver Sharp, our Chief Technology Officer, or other key

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employees would have a material adverse effect on our business. Furthermore,
several members of our senior management joined us in January 1999, including
our Chief Financial Officer and our Senior Vice President--Marketing. Our Chief
Technology Officer joined us in February 1999. As a result of these recent
additions, our senior managers may not perform effectively as individuals or
work together as a team.

Our success also depends on our ability to continue to attract, retain and
motivate skilled employees. Competition for employees in our industry is
intense. We may be unable to retain our key employees or attract, assimilate or
retain other qualified employees in the future. We have in the past experienced,
and we expect to continue to experience, difficulty in hiring and retaining
skilled employees with appropriate qualifications. Our business will be
materially adversely affected if we fail to attract and retain key employees.

OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS AND
SEASONALITY.

Our revenues and operating results may vary significantly from quarter to
quarter due to a number of factors. Many of these factors are outside our
control and include:

- seasonal fluctuations in consumer purchasing patterns and advertising
spending;

- timing of, response to and quantity of our parent's catalog mailings;

- changes in the growth rate of Internet usage and online user traffic
levels;

- actions of our competitors;

- the timing and amount of costs relating to the expansion of our operations
and acquisitions of technology or businesses; and

- general economic and market conditions.

As a result, our future revenues are difficult to forecast. Any shortfall in
revenues may have a material adverse effect on our business and would likely
affect the market price of our Class A common stock in a manner unrelated to our
long-term operating performance.

Our limited operating history and the new and rapidly evolving Internet
markets make it difficult to ascertain the effects of seasonality on our
business. If seasonal and cyclical patterns emerge in Internet consumer
purchasing or in Internet advertising spending, our results of operations from
quarter to quarter will be less comparable. Sales of apparel, accessories and
footwear are generally lower in the first half of each year. Similarly,
advertising sales in traditional media, such as television and radio, are
generally lower in the first calendar quarter of each year. We may experience
similar seasonality in our business.

You should not rely on quarter-to-quarter comparisons of our results of
operations as indicative of our future performance. It is possible that in some
future periods our results of operations may be below the expectations of public
market analysts and investors. In this event, the price of our Class A common
stock may fall.

WE MAY BE UNABLE TO TIMELY AND SUCCESSFULLY EXPAND OUR ONLINE CAPACITY,
COMPUTER SYSTEMS AND RELATED FEATURES TO SUPPORT INCREASED VOLUME ON OUR WEB
SITES.

A key element of our strategy is to generate a high volume of traffic on our
Web sites. However, growth in the number of users accessing our sites may strain
or exceed the capacity of our computer systems and lead to declines in
performance or systems failure. We believe our present systems will not be
adequate to accommodate rapid growth in user demand. Our inability to add
additional hardware and software to upgrade our existing technology or network
infrastructure to accommodate increased traffic may cause decreased levels of
customer service and satisfaction. We

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believe that we will therefore need to continually improve and enhance the
functionality and performance of our e-commerce, customer tracking and other
technical systems. As a result, we intend to upgrade our existing systems and
implement new systems. Failure to implement these systems effectively or within
a reasonable period of time would have a material adverse effect on our
business, results of operations and financial condition.

We must also introduce additional or enhanced features and services to
retain current users and attract new users to our sites. If a new service is not
favorably received, our current users may visit our Web sites less frequently.
These new services or features may contain errors, and we may need to
significantly modify the design of these services to correct errors. If users
encounter difficulty with or do not accept our services or features, our
business would be materially adversely affected.

Any growth of our business may strain our management systems and resources
and will require us to implement new operational and financial systems,
procedures and controls. We expect that we will need to continue to expand,
train and manage our workforce. Our inability to accomplish any of these goals
could adversely affect our business.

OUR COMPUTER SYSTEMS AND EQUIPMENT MAY FAIL OR EXPERIENCE DELAYS

Our operations depend on our ability to maintain our computer systems and
equipment in effective working order. Any sustained or repeated system failure
or interruption would reduce the attractiveness of our Web sites to customers
and advertisers. In addition, interruptions in our systems could result from the
failure of our telecommunications providers to provide the necessary data
communications capacity in the timeframe we require. Unanticipated problems
affecting our systems have caused from time to time in the past, and in the
future could cause, interruptions in our services. Any damage or failure that
interrupts or delays our operations could have a material adverse effect on our
business.

We must also protect our computer systems against damage from fire, power
loss, water damage, telecommunications failures, vandalism and other malicious
acts, and similar unexpected adverse events. Most of our Web sites reside on a
computer system located at our New York City office. This system's continuing
and uninterrupted performance is critical to our success.

WE WILL INCREASINGLY RELY UPON ONLINE AND TRADITIONAL ADVERTISING TO GENERATE
SALES.

We expect to increasingly rely on online and traditional advertising and
strategic alliances to attract users to our Web sites. Our inability to develop
and maintain effective advertising campaigns may have a material adverse effect
on our business. We have committed substantial resources to promoting our Web
sites and our brand name through online advertising and advertising in our
parent's catalogs. Pursuant to the intercompany services agreement, we have
committed to purchase substantial amounts of advertising in our parent's print
catalogs. These amounts of advertising are materially greater than we have used
in the past. We cannot assure you that this advertising will effectively attract
users to our Web sites or lead to a substantial amount of sales.

Our online advertising may include strategic alliances that require large,
long-term commitments. We cannot assure you that we will be able to identify and
secure sufficient online and offline advertising opportunities or that such
spending will effectively attract users to our Web sites or lead to a
substantial amount of sales.

WE DEPEND ON THIRD PARTY SHIPPERS, COMMUNICATIONS PROVIDERS AND VENDORS TO
OPERATE OUR BUSINESS

iTurf depends upon a number of third parties to deliver goods and services
to it and its customers. For example, iTurf relies on third-party shippers
including the United States Postal

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Service, United Parcel Service and Federal Express to ship merchandise to its
customers. Strikes or other service interruptions affecting our shippers would
have a material adverse effect on our ability to deliver merchandise on a timely
basis. Our Web sites could experience disruptions or interruptions in service
due to failures by these providers. We also depend on communications providers
including Cable & Wireless plc and AT&T to provide our Internet users with
access to our Web sites. In addition, our users depend on Internet service
providers and Web site operators for access to our Web sites. Each of these
groups has experienced significant outages in the past and could experience
outages, delays and other difficulties due to system failures unrelated to our
systems. These types of occurrences could cause users to perceive our Web sites
as not functioning properly and therefore cause them to stop using our services.

A third party hosts several critical services used in the operation of most
of our e-commerce web sites. Another third party hosts and manages two of our
community Web sites, gURLpages.com and gURLmAIL.com, and also sells
advertisements on such sites. System failures by this third party have in the
past and could in the future lead to disruption in service on these sites. Such
system disruptions or the failure by this third party to successfully sell
advertisements on these Web sites could have a material adverse effect on our
business.

Our business depends on the ability of third-party vendors to provide us and
our parent with current-season brand-name apparel and merchandise at competitive
prices in sufficient quantities and of acceptable quality. No vendor accounted
for more than 8% of sales generated by the dELiA*s catalog in fiscal 1998.
However, two vendors accounted for approximately 60% of retail and catalog sales
of TSI Soccer Corporation in fiscal 1998. Our parent does not have long-term
contracts with any supplier. In addition, many of the smaller vendors used by
our parent have limited resources, production capacities and operating
histories. If any of the following events occurred, our business could be
materially adversely affected:

- if our key vendors failed to expand with us and our parent;

- if we lost one or more key vendors, including adidas;

- if our parent's current vendor terms were changed; or

- if our parent's ability to procure products were limited.

WE MAY BE UNABLE TO IDENTIFY OR SUCCESSFULLY INTEGRATE POTENTIAL ACQUISITIONS
AND INVESTMENTS.

We may acquire or make investments in complementary businesses, products,
services or technologies. However, we have no present understanding or agreement
relating to any such acquisition or investment. We cannot assure you that we
will be able to identify suitable acquisition or investment candidates. Even if
we do identify suitable candidates, we cannot assure you that we will be able to
make such acquisitions or investments on commercially acceptable terms. If we
buy a business, we could have difficulty in assimilating that company's
personnel, operations, products, services or technologies into our operations.
These difficulties could disrupt our ongoing business, distract our management
and employees, increase our expenses and adversely affect our results of
operations. Furthermore, we may incur debt or issue equity securities to pay for
any future acquisitions. The issuance of equity securities could be dilutive to
our existing stockholders.

WE HAVE LIMITED PROTECTION OF OUR INTELLECTUAL PROPERTY, AND OTHERS COULD
INFRINGE ON OR MISAPPROPRIATE OUR PROPRIETARY RIGHTS.

We regard our service marks, trademarks, trade secrets and similar
intellectual property as critical to our success. The steps taken by us to
protect our intellectual property may not be adequate, and third parties may
infringe or misappropriate our copyrights, trademarks and similar

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proprietary rights. We rely on trademark and copyright law, trade secret
protection and confidentiality, license and other agreements with employees,
customers, strategic partners and others to protect our proprietary rights. We
have pursued and applied for the registration of our trademarks and service
marks in the United States. Effective trademark, service mark, copyright and
trade secret protection may not be available in every country in which our
products and services are made available online. We also use our parent's
trademarks in connection with the sale of many of our goods and services and
rely on our parent's ability to adequately protect its trademarks and
proprietary rights.

We have licensed in the past, and expect that we may license in the future,
certain of our proprietary rights, such as trademarks or copyrighted material,
to third parties. We attempt to ensure that the quality of our brands is
maintained by such licensees. Such licensees may take or omit to take actions
that would materially adversely affect the value of our proprietary rights or
reputation, which actions would have a material adverse effect on our business,
financial condition and results of operations.

INTENSE COMPETITION FROM INTERNET- AND RETAIL-BASED BUSINESSES MAY DECREASE
OUR MARKET SHARE AND GROSS MARGINS.

Many Web sites compete for consumers' and advertisers' attention and
spending. We expect such competition to continue to increase because of the
relative ease with which new Web sites can be developed. Increased competition
could reduce our gross margins and cause us to lose market share. We cannot
assure you that we will be able to compete successfully or that competitive
pressures will not materially and adversely affect our business. We believe that
our ability to compete depends upon many factors, including the following:

- the market acceptance of our Web sites and online services;

- the success of our brand building and sales and marketing efforts;

- the performance, price and reliability of services developed by us or our
competitors; and

- the effectiveness of our customer service and support efforts.

Many of our competitors are larger than and have substantially greater
financial, distribution and marketing resources than us. Our competitors may
develop products or services that are equal or superior to our solutions or
achieve greater market acceptance than ours. In addition, our competitors may
have cooperative relationships among themselves or with third parties that
increase the ability of their products or services to address the needs of our
prospective advertisers. In addition, our competitors could enter into exclusive
distribution arrangements with our vendors and deny us access to the vendors'
products. We may experience pricing pressures, increased marketing expenditures
and loss of market share due to increased competition. These factors may
materially adversely affect our business.

Our online advertising business competes with television, radio, cable and
print for a share of advertisers' total advertising budgets. Advertisers may be
reluctant to devote a significant portion of their advertising budgets to
Internet advertising if they perceive the Internet to be a limited or
ineffective advertising medium. Moreover, advertisers may, over time, determine
that advertisements placed on our Web sites have not been effective.
Consequently our advertising revenues may decline.

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WE MAY EXPAND OUR BUSINESS INTERNATIONALLY AND BECOME SUBJECT TO CURRENCY,
POLITICAL, TAX AND OTHER UNCERTAINTIES.

Our international business is subject to a number of risks of doing business
abroad, including:

- fluctuations in currency exchange rates, the impact of recessions in
economies outside the United States and regulatory and political changes
in foreign markets;

- reduced protection for intellectual property rights in some countries;

- potential limits on the use of some of our vendors' trademarks outside the
United States;

- exposure to potentially adverse tax consequences or import/export quotas;

- opening and managing distribution centers abroad;

- inconsistent quality of merchandise and disruptions or delays in shipping;
and

- developing customer lists and marketing channels.

Although less than one percent of our sales is to customers who live outside the
United States, we intend to market our sites globally. In addition, a
substantial portion of our parent's vendors procure products from outside the
United States. We purchase from our parent merchandise manufactured outside the
United States. Furthermore, expansion into new international markets may present
competitive and merchandising challenges different from those we currently face.
We cannot assure you that we will expand internationally or that any such
expansion will result in profitable operations.

FAILURE OF OUR COMPUTER SYSTEMS TO PROPERLY RECOGNIZE THE YEAR 2000 COULD
DISRUPT THE OPERATION OF OUR BUSINESS AND TECHNICAL SYSTEMS.

We depend upon complex computer software and systems for all phases of our
operations, including our parent's computer systems. The failure of any of our
software or systems to be Year 2000 compliant could prevent us from being able
to process or fulfill orders from our customers or could disrupt our financial
and management controls and reporting systems. Any such failure, if not quickly
remedied, would have a material adverse effect on our business, results of
operations and financial condition.

We have not yet begun performing tests on all of our material operating
software and systems to assess and ensure Year 2000 compliance. We cannot assure
you that all of iTurf's material operating software and systems will be Year
2000 compliant. Many existing computer programs and systems use only two digits
to identify a year in the date field. These programs and systems were designed
and developed without considering the impact of the upcoming turn of the
century. If not corrected, such computer applications could fail or create
erroneous results by or at the Year 2000.

In addition to the systems and software that we use directly, our operations
also depend on the performance of software and systems of our third party
service providers. These include providers of financial, telecommunications and
parcel delivery services. We also cannot assure you that our service providers
have, or will have, operating software and systems that are Year 2000 compliant.

In addition, a significant portion of purchases of merchandise from iTurf
are made with credit cards. Our business, results of operations and financial
condition may be materially adversely affected to the extent our customers are
unable to use their credit cards due to Year 2000 issues.

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RISKS RELATED TO OUR RELATIONSHIP WITH OUR PARENT

OUR PARENT AND ITS PRINCIPAL STOCKHOLDER MAY EXERT CONTROL OVER OUR BUSINESS.

Our parent owns all of our Class B shares of common stock, which represents
approximately 92% of the voting power of our common stock. After this offering,
our parent will hold approximately 88% of the voting power of our common stock.
As a result of its share ownership and the other rights described in this
prospectus, our parent will be able to elect a majority of the members of our
board of directors. This concentration of ownership and other rights could also
delay or prevent a change of control. Also, Stephen I. Kahn, Chief Executive
Officer and Chairman of the board of directors of our parent and iTurf, was, as
of November 1, 1999, the beneficial owner of approximately 41% of the
outstanding common stock of our parent and, accordingly, may be deemed to be the
beneficial owner of all of the iTurf common stock owned by our parent. As a
result, Mr. Kahn will be able to control iTurf in the same manner that our
parent is able to control iTurf.

Our parent could elect to sell all or a substantial portion of its equity
interest in iTurf to a third party. In the event of a sale of our parent's
interest to a third party, that third party may be able to control iTurf in the
same manner that our parent is able to control iTurf. Such a sale may adversely
affect the market price of the Class A common stock and may adversely affect
iTurf's business, financial condition and results of operations.

OVERLAPPING MANAGEMENT AND BOARDS OF DIRECTORS COULD CAUSE CONFLICTS OF
INTEREST BETWEEN US AND OUR PARENT.

Several of iTurf's officers and directors serve as officers and directors of
our parent. Service as both a director or officer of iTurf and a director or
officer of our parent could create or appear to create potential conflicts of
interest when those directors and officers are faced with decisions that could
have different implications for iTurf and our parent. Such decisions may relate
to potential acquisitions of businesses, the intercompany agreements,
competition, the issuance or disposition of securities, the election of new or
additional directors, the payment of dividends by iTurf and other matters.

Stephen I. Kahn, who is the President, Chief Executive Officer and Chairman
of the board of directors of iTurf, is the Chief Executive Officer and Chairman
of the board of directors of our parent. Alex S. Navarro is the Chief Operating
Officer and Secretary of iTurf and also an Assistant Secretary and Counselor At
Law of our parent. Christopher C. Edgar is a Vice President of iTurf and a
member of iTurf's board of directors and is the Chief Operating Officer and Vice
Chairman of the board of directors of our parent. Evan Guillemin is a Vice
President of iTurf and a member of iTurf's board of directors and is the
President and Chief Financial Officer of our parent.

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Messrs. Kahn, Edgar and Guillemin are employed by both our parent and iTurf
and spend a substantial part of their professional time and effort on behalf of
our parent. In many instances, such efforts for our parent will involve
activities that are unrelated, and in some circumstances may be adverse, to the
interests of iTurf. iTurf has not established any minimum time that
Messrs. Kahn, Edgar and Guillemin are required to spend on iTurf matters.

Messrs. Kahn, Edgar, Guillemin and Navarro continue to hold shares of and/or
options to purchase shares of common stock of our parent. In addition, following
the closing of this offering, employees of iTurf may be eligible to participate
in other benefit plans of our parent that provide opportunities to receive
additional shares of common stock of our parent. These substantial equity
interests in our parent may present these officers and employees with incentives
potentially adverse to iTurf's stockholders.

WE DEPEND ON OUR PARENT'S BRANDS, GOODS AND SERVICES.

We have entered into a series of intercompany agreements with our parent.
Under these agreements, we depend on our parent to provide us with trademark
rights, goods and services that are key to the success of our business. The
termination of the intercompany agreements on the failure of our parent to
satisfactorily perform its obligations under these agreements would have a
material adverse effect on our business. In addition, we anticipate making
material payments to our parent each year for the foreseeable future under the
intercompany agreements. See "Transactions with Our Parent--Intercompany
Agreements."

WE DEPEND ON OUR PARENT AS A TRADEMARK LICENSOR. Pursuant to the trademark
license and customer list agreement, we license the dELiA*s logo and name, other
valuable trademarks, and online content from our parent and its other
subsidiaries on an exclusive basis for Internet use. If our trademark license
and customer list agreement with our parent were terminated, we would need to
change the domain names of most of our Web sites and devote substantial
resources towards building new brand names. Our parent may terminate the
trademark license and customer list agreement if any person other than our
parent, its affiliates or strategic partners acquire 20% or more of the voting
power of iTurf and under other circumstances.

In addition, the trademark license and customer list agreement contains
restrictions that may prevent us from marketing our products and services in the
same way we would if we owned these trademarks ourself. Our parent can:

- demand that we remove from our Web sites any online content that bears one
of our parent's trademarks that our parent determines conflicts with,
interferes with or is detrimental to its reputation or business or for
certain other reasons;

- require us to conform to our parent's guidelines for the use of its
trademarks;

- approve all materials, such as marketing materials, that include any of
our parent's trademarks; and

- control the visual and editorial presentation of content on our Web sites
that use our parent's trademarks.

WE DEPEND ON OUR PARENT FOR ADVERTISING. Pursuant to the intercompany
services agreement, our parent provides us with advertising and promotional
space in its catalogs and retail stores. In addition, we are required to
purchase from our parent minimum amounts of advertising space in at least 50% of
all of our parent's catalogs distributed each year. However, our parent controls
the timing and placement of these advertisements and promotions. Our parent
could discontinue promoting iTurf in its current manner. Our parent also makes
no guarantee to us as to the demographic composition of the target audience.
This advertising and promotion is an important

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element of our strategy to increase awareness of our brands and increase sales.
If we were not able to advertise in our parent's catalog and retail stores, we
would make substantially fewer sales on our Web sites. The advertising
obligations can be terminated by our parent under the same circumstances as the
trademark license and customer list agreement.

WE DEPEND ON OUR PARENT FOR SERVICES. Pursuant to the intercompany services
agreement, our parent provides us with services, such as merchandising,
inventory management, creative, marketing, technical, human resources, finance,
accounting, administrative, legal and other services. If our parent fails to
provide these services satisfactorily, we would be required to perform these
services or obtain these services from another provider. In such case, we may
incur additional costs in order to obtain these services and we may be unable to
obtain these services on commercially reasonable terms. If we choose to perform
these services ourself, we may not be able to perform them adequately, and, as a
result, we could lose a substantial number of customers. The service obligations
can be terminated by our parent under the same circumstances as the trademark
license and customer list agreement.

Substantially all of our sales orders are currently processed and fulfilled
through our parent's systems. Our parent is generally obligated to provide
fulfillment services to us at a level at least equal to the quality of services
provided by our parent prior to our initial public offering. As a result, our
future revenue depends on our parent's ability to fulfill our e-commerce sales
in an accurate and timely manner.

WE DEPEND ON OUR PARENT AS A SUPPLIER. Pursuant to the intercompany services
agreement, we may purchase products from our parent for resale on the Internet.
We anticipate that, for the foreseeable future, a majority of our revenue will
be derived from the online sale of merchandise under our parent's trademarks.
Accordingly, iTurf's future revenues and business success depend on our parent's
ability to maintain and renew relationships with its existing vendors and to
establish relationships with additional vendors. We do not have direct
contractual relationships with our parent's suppliers relating to our parent's
merchandise sold on our Web sites. As such, we cannot obtain the same
merchandise directly and are restricted pursuant to the trademark license and
customer list agreement from having such relationships without our parent's
consent. Furthermore, our parent does not have long-term contracts with any of
its suppliers. In addition, many of the smaller vendors used by our parent have
limited resources, production capacities and operating histories. The supply
obligations can be terminated by our parent under the same circumstances as the
trademark license and customer list agreement.

WE MAY BE CONTINGENTLY LIABLE FOR OUR PARENT'S PENSION OBLIGATIONS.

For so long as our parent continues to own at least 80% of the voting and
economic power or value of iTurf's capital stock, we will also be jointly and
severally liable, together with all other members of our parent's "control
group", for pension funding, termination and excise taxes and for other
pension-related matters in the event our parent fails to fully satisfy its
legally required pension obligations. We believe there were no such liabilities
outstanding as of July 31, 1999.

The intercompany indemnification agreement provides that our parent will
indemnify iTurf for certain tax and pension liabilities resulting from our
relationship with our parent, including the costs of defending against any
assertion of claims against iTurf. We cannot assure you that our parent will be
able to fulfill its obligations under such agreement. Therefore, we may be
liable for payments in such instance.

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WE FACE POTENTIAL COMPETITION FROM OUR PARENT.

Any of the following events could have a material adverse effect on our
business or our stockholders:

- any competition from our parent that results in a loss of a corporate
opportunity by iTurf to our parent;

- any engagement by our parent in any activity that is similar to the
businesses of iTurf; or

- the early termination of the trademark license and customer list
agreement.

However, our parent has agreed in the trademark license and customer list
agreement to refrain from competing with us in the Generation Y Internet
business. Our parent is under no other obligation to refrain from competing with
us or to share with us any future business opportunities available to it.
iTurf's Restated Certificate of Incorporation includes provisions that may
permit our parent to compete with us in areas unrelated to the Generation Y
Internet business.

RISKS RELATED TO THE INTERNET INDUSTRY

WE DEPEND ON CONTINUED GROWTH IN USE OF THE WEB.

Our industry is new and rapidly evolving. A decrease in the growth of Web
usage would adversely affect our business. The following factors may inhibit
growth in Web usage:

- inadequate Internet infrastructure;

- security and privacy concerns;

- inconsistent quality of service; and

- unavailability of cost-effective, high-speed service.

Our success depends upon the ability of the Internet infrastructure to
support increased use. The performance and reliability of the Web may decline as
the number of users increases or the bandwidth requirements of users increase.
The Web has experienced a variety of outages due to damage to portions of its
infrastructure. If outages or delays frequently occur in the future, Web usage,
including usage of our Web sites, could grow slowly or decline. Even if the
necessary infrastructure or technologies are developed, we may have to spend
considerable amounts to adapt our solutions accordingly.

WE DEPEND ON CONTINUED GROWTH OF ONLINE COMMERCE.

Our future revenue and profits depend upon the widespread acceptance and use
of the Web as an effective medium of commerce. Failure of the Web and online
services to become a viable commercial marketplace would materially adversely
affect our business.

Rapid growth in the use of the Web and commercial online services is a
recent phenomenon. We cannot assure you that a large base of consumers will
adopt and continue to use the Web as a medium of commerce. Demand for recently
introduced services and products over the Web and online services is subject to
a high level of uncertainty. The successful development of the Web and online
services is subject to a number of factors, including:

- continued growth in the number of users of such services;

- concerns about transaction security;

- continued development of the necessary technological infrastructure; and

- the development of complementary services and products.

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WE DEPEND ON AN UNPROVEN INTERNET COMMUNITY BUSINESS MODEL.

The Internet community business model is an unproven business model. Our
ability to generate significant revenues from advertisers and sponsors will
depend, in part, on our ability to generate sufficient user traffic with
demographic characteristics attractive to our advertisers. Failure of the market
for online advertising to develop or slower development than expected would
materially adversely affect our business.

The intense competition among Web sites that sell online advertising has led
to the creation of a number of pricing alternatives for online advertising. It
is difficult for us to project future levels of advertising revenue and
applicable gross margin that can be sustained by us or the online advertising
industry in general. Although we do not currently derive a substantial portion
of our revenue from advertising, our business model depends in part on
increasing the amount of such revenue.

WE DEPEND ON THE STORAGE OF PERSONAL INFORMATION ABOUT OUR USERS.

Web sites typically place identifying data, or cookies, on a user's hard
drive without the user's knowledge or consent. iTurf and other Web sites use
cookies for a variety of reasons, including the collection of data derived from
the user's Internet activity. Any reduction or limitation in the use of cookies
could limit the effectiveness of our sales and marketing efforts. Most currently
available Web browsers allow users to remove cookies at any time or to prevent
cookies from being stored on their hard drive. In addition, some commentators,
privacy advocates and governmental bodies have suggested limiting or eliminating
the use of cookies. Furthermore, the European Union recently adopted a directive
addressing data privacy that may limit the collection and use of information
regarding Internet users. This directive may limit our ability to target
advertising or collect and use information in European countries.

WE MAY BE SUED REGARDING PRIVACY CONCERNS.

Despite the display of our privacy policy on our Web sites, any penetration
of our network security or misappropriation of our users' personal or credit
card information could subject us to liability. We may be liable for claims
based on unauthorized purchases with credit card information, impersonation or
other similar fraud claims. Claims could also be based on other misuses of
personal information, such as for unauthorized marketing purposes. These claims
could result in litigation. In addition, the Federal Trade Commission and
several states have investigated the use by Internet companies of personal
information. In 1998, the U.S. Congress enacted the Children's Online Privacy
Protection Act of 1998. The Federal Trade Commission has recently promulgated
final regulations interpreting this act. We depend upon collecting personal
information from our customers and we believe that the regulations under this
act will make it more difficult for us to collect personal information from some
of our customers. We could incur expenses if new regulations regarding the use
of personal information are introduced or if our privacy practices were
investigated. See "Business--Legal."

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES COULD ADD ADDITIONAL BURDENS TO
DOING BUSINESS ON THE INTERNET.

Laws and regulations applicable to Internet communications, commerce and
advertising are becoming more prevalent. The adoption or modification of laws or
regulations applicable to the Internet could adversely affect our business. The
most recent session of the U.S. Congress passed laws regarding online children's
privacy, copyrights and taxation. The law governing the Internet, however,
remains largely unsettled. New laws may impose burdens on companies conducting
business over the Internet.

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Although our online transmissions generally originate in New York, the
governments of other states or foreign countries might attempt to regulate our
transmissions or levy sales or other taxes relating to our activities. It may
take years to determine whether and how existing laws governing intellectual
property, privacy, libel and taxation apply to the Internet and online
advertising. In addition, the growth and development of online commerce may
prompt calls for more stringent consumer protection laws, both in the United
States and abroad. We also may be subject to regulation not specifically related
to the Internet, including laws affecting direct marketers and advertisers.

WEB SECURITY CONCERNS COULD HINDER ONLINE COMMERCE AND ADVERTISING.

The need to securely transmit confidential information such as credit card
and other personal information over the Internet has been a significant barrier
to online commerce and communications. Any publicized compromise of security
could deter people from accessing the Web or from using it to transmit
confidential information. Furthermore, decreased online traffic and sales as a
result of general security concerns could cause advertisers to reduce their
amount of online spending. Such security concerns could reduce our market for
online commerce and indirectly influence our ability to sell online advertising.
We may also incur significant costs to protect iTurf against the threat of
problems caused by such security breaches.

WE MAY BE LIABLE FOR INFORMATION DISPLAYED ON AND COMMUNICATION THROUGH OUR
WEB SITES.

We may be subjected to claims for defamation, negligence, copyright or
trademark infringement or other theories relating to the information we publish
on our Web sites. These claims have been brought against Internet companies as
well as print publications in the past. Based on links we provide to other Web
sites, we could also be subjected to claims based upon the online content we do
not control that is accessible from our Web sites. Claims may also be based on
statements made and actions taken as a result of participation in our chat
rooms.

CHANGES IN REGISTRATION OF DOMAIN NAMES MAY RESULT IN THE LOSS OF OR CHANGE IN
OUR DOMAIN NAMES AND A REDUCTION IN BRAND AWARENESS AMONG OUR CUSTOMERS.

The regulation of domain names in the United States and in foreign countries
is expected to change in the near future. As a result, we cannot assure you that
we will be able to acquire or maintain relevant domain names in all countries in
which iTurf conducts business. iTurf holds various Web domain names relating to
its brands, including the iTurf.com, dELiA*s.cOm and gURL.com domain names. The
acquisition and maintenance of domain names generally is regulated by
governmental agencies and their designees. In the United States, the National
Science Foundation has appointed Network Solutions, Inc. as the current
exclusive registrar for the ".com," ".net" and ".org" generic top-level domains.
We expect future changes in the United States to include a transition from the
current system to a system controlled by a non-profit corporation and the
creation of additional top-level domains. Requirements for holding domain names
also are expected to be affected. Furthermore, the relationship between
regulations governing domain names and laws protecting trademarks and similar
proprietary rights is unclear. Therefore, we may be unable to prevent third
parties from acquiring domain names that are similar to, infringe upon or
otherwise decrease the value of its trademarks and other proprietary rights. Any
such inability could have a material adverse effect on our business, results of
operations and financial condition.

WE MAY BE UNABLE TO RESPOND TO RAPID TECHNOLOGICAL CHANGE IN OUR INDUSTRY.

The Internet, e-commerce and online advertising markets are characterized by
rapidly changing technologies, evolving industry standards, frequent new product
and service introductions, and changing customer preferences. Our success will
depend on our ability to adapt to rapidly changing

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technologies and address our customers' changing preferences. We may experience
difficulties that delay or prevent our being able to do so. Material delays in
introducing new technologies and enhancements to our services may cause
customers and advertisers to make purchases from or visit the Web sites of our
competitors.

RISKS RELATED TO THIS OFFERING

SALES OF OUR CLASS A COMMON STOCK AFTER THIS OFFERING MAY ADVERSELY AFFECT OUR
STOCK PRICE.

Any sale by our parent of our common stock could cause our stock price to
fall because it will increase the number of shares traded in the market. Our
parent owns all of the outstanding shares of Class B common stock. Our parent
does not have any restrictions on selling any of our securities held by it in
the public market, other than as provided under applicable securities laws. The
shares held by our parent are "restricted securities" under Rule 144 under the
Securities Act and are eligible for sale subject to the limitations of
Rule 144. In addition, our parent can require us to register the shares of
Class B common stock it owns for public sale pursuant to the dELiA*s common
stock registration rights agreement.

As of October 30, 1999 there were 6,418,132 shares of Class A common stock
outstanding. Of the outstanding Class A shares, all are freely tradeable, except
for any shares purchased by our "affiliates" as defined in Rule 144. Sales of a
large number of shares held by affiliates could have an adverse effect on the
market price for our Class A common stock.

As of October 30, 1999, 4,050,000 shares of Class A common stock were
reserved for issuance under our stock incentive plan, of which options to
purchase 2,915,663 shares were then outstanding and of which 259,308 options
were then exercisable. iTurf intends to file shortly a Form S-8 registration
statement under the Securities Act to register shares issued and reserved for
issuance under the stock incentive plan. Approximately 186,775 shares of
Class A common stock issuable upon the exercise of vested options will become
eligible for sale. Shares of Class A common stock issued under our stock
incentive plan or upon exercise of options after the effective date of the Form
S-8 will be available for sale in the public market, subject to Rule 144 volume
limitations. The possible sale of a significant number of these shares may cause
the price of our Class A common stock to fall.

OUR CLASS A COMMON STOCK PRICE COULD BE EXTREMELY VOLATILE, AS IS TYPICAL OF
INTERNET-RELATED COMPANIES.

The stock market has experienced significant price and volume fluctuations,
and the market prices of securities of technology companies, particularly
Internet-related companies, have been highly volatile.

In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted against such a company. The institution of such litigation against us
could result in substantial costs to us and a diversion of our management's
attention and resources.

OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY INHIBIT A TAKEOVER.

Provisions of Delaware law, our Restated Certificate of Incorporation, or
our bylaws could make it more difficult for a third party to acquire us, even if
doing so would be beneficial to our stockholders. See "Description of Capital
Stock--Anti-Takeover Effects of Provisions of Delaware Law and Our Restated
Certificate of Incorporation and Bylaws."

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements based on our current
expectations, assumptions, estimates and projections about iTurf and our
industry. The words or phrases "can be," "expects," "may affect," "may depend,"
"believes," "estimates," "projects" and similar words and phrases are intended
to identify such forward-looking statements. These forward-looking statements
involve risks and uncertainties. iTurf's actual results could differ materially
from those anticipated in such forward-looking statements as a result of certain
factors, as more fully described in "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business" and
elsewhere in this prospectus. iTurf undertakes no obligation to update publicly
any forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.

------------------------

The information on our Web sites is not a part of this prospectus. iTurf,
the iTurf logo and gURL are some of our service marks. dELiA*s, Contents and
Discount Domain are registered trademarks of dELiA*s Inc., and Droog and dot dot
dash are trademarks of dELiA*s Properties Inc. This prospectus also includes
trademarks and trade names of other companies. Each trade name, trademark or
service mark of any other company appearing in this prospectus is the property
of its owner.

This prospectus includes statistical data regarding the Internet industry
and the Generation Y market. This data was obtained from industry publications
and reports, which we believe to be reliable sources. However, the accuracy and
completeness of this data are not guaranteed. We have not independently verified
this data nor sought the consent of every organization to refer to their reports
in this prospectus.

22
<PAGE>
DIVIDEND POLICY

We currently intend to retain all of our earnings to finance our operations
and we do not anticipate paying any cash dividends on our capital stock in the
foreseeable future. We may incur indebtedness in the future which may prohibit
or effectively restrict the payment of dividends, although we have no current
plans to do so.

PRICE RANGE FOR CLASS A COMMON STOCK

The Class A common stock is traded on the Nasdaq National Market under the
symbol TURF. The following table sets forth the high and low sales prices for
the Company's Class A common stock as reported by NASDAQ for the period
indicated. Such quotations reflect interdealer prices without adjustments for
retail markups, markdowns, or commissions and may not necessarily represent
actual transactions.

<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
FISCAL YEAR ENDING JANUARY 29, 2000
1st Quarter (from April 9, 1999).......................... $66.000 $26.000
2nd Quarter............................................... 38.875 13.250
3rd Quarter............................................... 15.375 10.000
4th Quarter (through November 17, 1999)................... 13.500 9.875
</TABLE>

On October 30, 1999, there were 38 holders of record and approximately
12,000 beneficial owners of the Class A common stock.

23
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of iTurf as of July 31,
1999 on an actual basis and on a pro forma basis to reflect (i) the acquisition
of Taponline.com which was completed on September 1, 1999; and (ii) the
conversion by our parent of 2,000,000 shares of our Class B common stock into
2,000,000 shares of our Class A common stock:

The number of shares of Class A common stock that are issued and outstanding
at July 31, 1999 excludes (a) 2,359,438 shares issuable upon the exercise of
options outstanding with a weighted average exercise price of $14.45 per share,
and (b) an aggregate of 1,690,562 additional shares reserved for issuance under
our stock incentive plan. See "Management--1999 Stock Incentive Plan" and Note 9
of Notes to iTurf Financial Statements.

<TABLE>
<CAPTION>
JULY 31, 1999
--------------------
ACTUAL PRO FORMA
-------- ---------
(IN THOUSANDS)
<S> <C> <C>
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000 shares
authorized; no shares issued and outstanding actual
and as adjusted..................................... $ -- $ --
Class A common stock, $.01 par value; 67,500,000
shares authorized; 4,831,136 shares issued and
outstanding actual; 8,418,132 shares issued and
outstanding pro forma............................... 48 84
Class B common stock, $.01 par value; 12,500,000
shares authorized; 12,500,000 shares issued and
outstanding actual, 10,500,000 issued and
outstanding pro forma............................... 125 105
Additional paid-in capital............................ 97,261 116,388
Investment in common stock of parent.................. (17,734) (17,734)
Retained earnings (deficit)........................... (1,579) (1,579)
-------- --------
Total stockholders' equity.......................... 78,121 97,264
-------- --------
Total capitalization.............................. $ 78,121 $ 97,264
======== ========
</TABLE>

24
<PAGE>
SELECTED FINANCIAL DATA

The following selected financial data are qualified by reference to, and
should be read in conjunction with, the Financial Statements of iTurf, the notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" appearing elsewhere in this prospectus. The selected
statement of operations data of iTurf presented below for the years ended
January 31, 1997, 1998 and 1999, and the balance sheet data as of January 31,
1998 and 1999 are derived from financial statements of iTurf that have been
audited by Ernst & Young LLP, independent auditors, and are included elsewhere
in this prospectus. The consolidated statement of operations data for the six
months ended July 31, 1998 and the 26 weeks ended July 31, 1999 and the
consolidated balance sheet data as of July 31, 1999 are derived from the
unaudited consolidated financial statements of iTurf which are included
elsewhere in this prospectus. The selected statement of operations data
presented below for the period from March 14, 1995, date of inception, through
January 31, 1996 and the balance sheet data as of January 31, 1996 and 1997 are
derived from audited financial statements not included in this prospectus. The
historical financial statements for the periods prior to the completion of our
initial public offering include allocations for administrative, distribution and
other expenses incurred by our parent for services rendered to iTurf. While we
believe such allocations to be reasonable, they are not necessarily indicative
of, and it is not practical for us to estimate, the levels of expenses that
would have resulted had iTurf been operating as an independent company.

The accompanying financial data include the Internet operations of TSI
Soccer Corporation, which was acquired by our parent in a transaction accounted
for as a pooling of interests, from March 14, 1995, its date of inception, the
operations of gURL Interactive from December 17, 1997, the date of its
acquisition, and additional Internet operations of iTurf developed since
December 17, 1997, including the dELiA.cOm Web site which was launched in May
1998.

All share and income (loss) per share amounts are based on the number of
shares outstanding as of July 31, 1999 after giving effect to the issuance of
4,830,000 of our Class A Common Stock upon completion of our initial public
offering on April 14, 1999, on a weighted average basis, and the
reclassification of 100 shares of common stock outstanding at January 31, 1999
into 12,500,000 shares of Class B common stock. See Notes to iTurf Financial
Statements for information concerning the computation of net income (loss) per
share.

25
<PAGE>

<TABLE>
<CAPTION>
PERIOD FROM
MARCH 14, 1995 SIX MONTHS TWENTY-SIX
(DATE OF INCEPTION) YEAR ENDED JANUARY 31 ENDED WEEKS ENDED
THROUGH JANUARY 31 ------------------------------ JULY 31 JULY 31
1996 1997 1998 1999 1998 1999
------------------- -------- -------- -------- ---------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues................... $ 6 $ 13 $ 134 $ 4,014 829 5,567
Cost of product sales...... 2 6 69 1,687 374 2,983
------- ------- ------- ------- ------- -------
Gross profit............... 4 7 65 2,327 455 2,584
Selling, general and
administrative
expenses................. 6 14 114 1,506 554 5,805
------- ------- ------- ------- ------- -------
Income (loss) from
operations............... (2) (7) (49) 821 (99) (3,221)
Interest expense (income),
net...................... -- -- 20 41 22 (1,101)
------- ------- ------- ------- ------- -------
Income (loss) before income
tax (benefit)
provision................ (2) (7) (69) 780 (121) (2,120)
Income tax (benefit)
provision................ (1) (3) (29) 355 (44) (161)
------- ------- ------- ------- ------- -------
Net income (loss).......... $ (1) $ (4) $ (40) $ 425 $ (77) $(1,959)
======= ======= ======= ======= ======= =======
Basic and diluted net
income (loss) per
share.................... $ (0.00) $ (0.00) $ (0.00) $ 0.03 $ (0.01) (0.13)
======= ======= ======= ======= ======= =======
Shares used to compute
basic net income (loss)
per share................ 12,500 12,500 12,500 12,500 12,500 15,372
======= ======= ======= ======= ======= =======
Shares used to compute
diluted net income (loss)
per share................ 12,500 12,500 12,500 12,518 12,500 15,372
======= ======= ======= ======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
JANUARY 31
--------------------------------------------------
1996 1997 1998 1999 JULY 31, 1999
----------------- -------- -------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.............. $ -- $ -- $ 31 $ 375 $22,422
Short-term investments................. -- -- -- -- 55,517
Working capital (deficiency)........... (1) (5) (481) (461) 75,940
Total assets........................... -- -- 467 1,216 81,960
Due to parent.......................... 1 5 512 573 2,632
Total stockholder's (deficit) equity... (1) (5) (45) 380 78,121
</TABLE>

26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INVESTORS SHOULD READ THE FOLLOWING DISCUSSION IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND RELATED NOTES THERETO OF ITURF WHICH APPEAR ELSEWHERE
IN THIS PROSPECTUS. THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS
THAT REFLECT ITURF'S PLANS, ESTIMATES AND BELIEFS. OUR ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED BELOW AND ELSEWHERE IN THIS PROSPECTUS, PARTICULARLY
IN "RISK FACTORS."

OVERVIEW

iTurf is a leading provider of Internet community, content and e-commerce
services focused primarily on Generation Y, based on sales and traffic on our
Web sites. We provide Generation Y with an online destination that encompasses a
network of Web sites that addresses this demographic group's concerns,
interests, tastes and needs. Our sites offer interactive web/zines with
proprietary content, chat rooms, posting boards, personal homepages and e-mail,
as well as online shopping opportunities.

On April 14, 1999, we completed the initial public offering of 4,830,000
shares of our Class A common stock, which represented approximately 28% of the
shares then outstanding.

iTurf is a subsidiary of dELiA*s Inc. and was incorporated on August 7,
1997. Prior to the closing of our initial public offering, our parent owned all
of the outstanding capital stock of iTurf. iTurf's results of operations include
the following:

- the Internet operations of TSI Soccer Corporation, a wholly-owned
subsidiary of our parent, which was acquired by our parent in
December 1997. The acquisition was accounted for as a pooling of
interests. Concurrently with the closing of this offering, iTurf will
acquire the TSISoccer.com domain name from TSI Soccer for $25,000 of
Class A common stock, valued at the initial public offering price per
share. Therefore, the financial statements of iTurf reflect the Internet
operations of TSI from March 14, 1995, when TSI began Internet operations;

- the operations of gURL Interactive, which was acquired by iTurf on
December 17, 1997; and

- the Internet operations of iTurf, which were developed since December 17,
1997, including the dELiAs.cOm Web site which was launched in May 1998.

Following the acquisition of gURL Interactive, we launched the dELiAs.cOm
and discountdomain.com sites in May 1998, the contentsonline.com and droog.com
sites in November 1998, the dotdotdash.com site in March 1999 and, most
recently, the StorybookHeirlooms.com site in April 1999. We sell products from
these sites, each of which shares merchandise and branding with catalog
offerings of our parent. In addition, we expanded our Web community features
during the same periods. We launched gURLmAIL.com in February 1998 and
gURLpages.com in June 1998. In December 1998, we also began to add additional
third party content to our gURL.com Web site, such as music news and film
trailers. See "Business--The iTurf Network" and "Business--iTurf E-Commerce."

On September 1, 1999, we acquired [email protected], Inc. Taponline.com was
acquired pursuant to an Agreement and Plan of Merger, dated as of August 9,
1999, by and among iTurf, iTurf Acquisition Corporation, a wholly-owned
subsidiary of iTurf ("Merger Sub"), Taponline.com, the stockholders of
Taponline.com and MarketSource Corporation, a Delaware corporation (as amended,
the "Merger Agreement"). Pursuant to the Merger Agreement, Merger Sub was merged
with and into Taponline.com, with Taponline.com as the surviving corporation
(the "Merger"). As a result of the Merger, Taponline.com became a wholly-owned
subsidiary of iTurf and was renamed

27
<PAGE>
OnTap.com Inc. The merger consideration consisted of 1,586,996 shares of our
Class A common stock. OnTap.com Inc. operates a community and content Web site
focusing on college and university students between the ages of 18 and 24. It
generates most of its revenues from the sale of advertising.

We generate revenue from four primary sources:

- sales of apparel, accessories, footwear, athletic gear, home furnishings
and other merchandise through our e-commerce sites;

- fees paid for advertising on our sites;

- fees from licensing the gURL brand and related online content; and

- subscription fees paid by members of our discount shopping service,
discountdomain.com.

Sales of apparel, accessories and footwear for Generation Y girls and young
women on our dELiAs.cOm site accounted for a substantial majority of our revenue
in the year ended January 31, 1999 and is expected to account for the majority
of our revenue for at least the next twelve months. Sales of athletic gear on
our TSISoccer.com site, primarily soccer merchandise sold to Generation Y boys
and young men, was our second largest source of product revenue in that period.
We expect this trend to continue and for sales of apparel, accessories, footwear
and other products to grow more rapidly than revenue from advertising over the
next twelve months. Because advertising sales are generally higher-margin than
merchandise sales, we expect our gross margin to decline in the near future.

The historical financial statements for the periods prior to the closing of
our initial public offering contained elsewhere in this prospectus include
allocations for administrative, distribution and other expenses incurred by our
parent for services rendered to iTurf. While we believe such allocations to be
reasonable, they are not necessarily indicative of, and it is not practical for
us to estimate, the levels of expenses that would have resulted had iTurf been
operating as an independent company.

Since the closing of our initial public offering, the provision of services
and other matters between iTurf and our parent, including use of our parent's
trademarks, have been governed by the intercompany agreements. We believe that
the intercompany agreements, had they been in effect during the historical
periods presented, would not have had a material effect on our net income
(loss), given the level of benefits received from our parent. Expenses would
have increased marginally in connection with fees to be paid to our parent
pursuant to the trademark license and customer list agreement. However, the
effect of the trademark license and customer list agreement would have been
substantially offset by iTurf's ability under the supply arrangements of the
intercompany services agreement to purchase clearance inventory from our parent
at lower costs. This offset has not continued to the same degree following the
closing of our initial public offering. We expect selling, general and
administrative expenses to increase as a percentage of sales due to fees
associated with higher levels of advertising provided by our parent and with
increased sales made under trademarks licensed from our parent. See
"Transactions with Our Parent--Intercompany Agreements."

28
<PAGE>
We also relied on our parent to provide financing for our operations.
Therefore, our cash flows for the periods prior to the closing of our initial
public offering are not necessarily indicative of the cash flows that would have
resulted had we been operating as an independent company during those periods.

Since the inception of iTurf's business in 1995 through the fiscal year
ended January 31, 1998, iTurf incurred net losses of approximately $44,000. For
the year ended January 31, 1999, iTurf's operations resulted in net income of
approximately $425,000. For the 26 week period ended July 31, 1999, iTurf's
operations resulted in a net loss of approximately $2.0 million. We believe that
our continued growth will depend in large part on our ability to increase our
brand awareness, provide our customers with superior Internet community and
e-commerce experiences and continue to enhance our systems and technology to
support increased traffic to our Web sites. We intend to invest heavily in
marketing and promotion, including advertising in our parent's print catalogs,
and to further develop our Web sites, technology and operating infrastructure.
As a result, we expect to record substantial net losses for the foreseeable
future.

In view of the rapidly changing nature of iTurf's business and its limited
operating history, as well as the expected seasonality, iTurf believes that
period-to-period comparisons of its operating results, including iTurf's gross
profit margin and operating expenses as a percentage of sales, are not
necessarily meaningful. You should not rely on this information as an indication
of future performance.

RESULTS OF OPERATIONS

The following table sets forth certain statement of operations data as a
percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
TWENTY-
SIX SIX
FISCAL YEAR MONTHS WEEKS
ENDED JANUARY 31, ENDED ENDED
-------------------------------------- JULY 31 JULY 31
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues.................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of product sales....................... 46.2 51.5 42.0 45.1 53.6
----- ----- ----- ----- -----
Gross profit................................ 53.8 48.5 58.0 54.9 46.4
Selling, general and administrative
expenses.................................. 107.7 85.1 37.6 66.8 104.3
Interest expense (income), net.............. -- 14.9 1.0 2.7 (19.8)
----- ----- ----- ----- -----
Income (loss) before income tax (benefit)
provision................................. (53.9) (51.5) 19.4 (14.6) (38.1)
Income tax (benefit) provision.............. (23.1) (21.6) 8.8 (5.3) (2.9)
----- ----- ----- ----- -----
Net income (loss)........................... (30.8)% (29.9)% 10.6% (9.3)% (35.2)%
===== ===== ===== ===== =====
</TABLE>

COMPARISON OF FISCAL YEARS 1997 AND 1998

REVENUES. Revenues increased from $134,000 in fiscal 1997 to $4,014,000 in
fiscal 1998. The increase was primarily due to the launch of the dELiAs.cOm Web
site in May 1998 and advertising revenue of approximately $444,000 during fiscal
1998. iTurf did not sell any advertising in fiscal 1997. Subscription fees and
licensing revenue was approximately $218,000 for fiscal 1998; we did not have
any such revenue for fiscal 1997.

GROSS PROFIT. Gross profit increased from $65,000 in fiscal 1997 to
$2,327,000 in fiscal 1998 as a result of both increased sales and a higher gross
margin. Gross margin increased from 48.5% in

29
<PAGE>
fiscal 1997 to 58.0% in fiscal 1998. This increase was due to both the increased
sales of higher-margin apparel and accessories on the dELiAs.cOm Web site, which
was launched in May 1998, as well as revenue from advertising, licensing and
subscriptions during the second, third and fourth quarters of fiscal 1998. These
new revenue sources improve gross margins because they have no direct cost of
sales. The indirect expenses incurred in connection with such revenue sources
are included in selling, general and administrative expenses.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses are comprised of sales and marketing expense, which
includes advertising costs, credit card fees and distribution costs, product
development and operations expense, which includes site development, editorial
content and systems costs, and general and administrative expenses. Total
selling, general and administrative expenses, including direct expenses and
expenses allocated from our parent, increased from $114,000, or 85.1% of
revenues, in fiscal 1997 to $1,506,000, or 37.6% of revenues, in fiscal 1998 due
to a substantial increase in advertising, product development and overhead costs
to support the continued expansion of iTurf.

In 1998, selling, general and administrative expenses were comprised of
selling and marketing expense of $633,000, product development expense of
$341,000 and general and administrative cost of $532,000. In 1997 selling,
general and administrative expenses were comprised substantially of general and
administrative expenses with the primary components being payroll and telephone
expenses. A significant portion of these expenses, $45,000 in fiscal 1997 and
$219,000 in fiscal 1998, were allocated from our parent.

COMPARISON OF FISCAL YEARS 1996 AND 1997

REVENUES. Revenues in fiscal 1996 and fiscal 1997 were substantially from
soccer merchandise. Revenues increased from $13,000 in fiscal 1996 to $134,000
in fiscal 1997. This increase was primarily due to an enhancement of
TSISoccer.com and additional customer awareness of the site, as well as a
general increase in the use of the Web for electronic commerce.

GROSS PROFIT. Gross profit increased from $7,000 in fiscal 1996 to $65,000
in fiscal 1997, primarily due to an increase in net sales. Gross margin
decreased from 53.8% in fiscal 1996 to 48.5% in fiscal 1997, primarily due to a
change in the mix of TSI Soccer merchandise sold from year to year.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased from $14,000 for the year ended January 31,
1997 to $114,000 in fiscal 1997 with the primary components being payroll and
telephone expenses. Of these totals, $13,000 and $45,000 for fiscal 1996 and
fiscal 1997, respectively, were allocations from our parent. The increases in
total selling, general and administrative expenses and parent allocations
correspond with our growth in revenues. As a percentage of revenues, however,
such expenses decreased from 107.7% to 85.1%, primarily due to the leveraging of
fixed costs over a larger revenue base.

COMPARISON OF TWENTY-SIX WEEKS ENDED JULY 31, 1999 AND SIX MONTHS ENDED
JULY 31, 1998

NET REVENUES. Net revenues increased from $829,000 in the first half of
fiscal 1998 to $5.6 million for the same period in fiscal 1999. The increase was
due to the launch of the dELiAs.cOm and discountdomain.com Web sites in
May 1998, the contentsonline.com and droog.com sites in November 1998, the
dotdotdash.com site in March 1999 and the StorybookHeirlooms.com site in
April 1999, as well as increased traffic as a result of our marketing efforts.
Advertising, subscription and licensing revenues were approximately $542,000 for
the first half of fiscal 1999 and $107,000 for the same period of fiscal 1998.

30
<PAGE>
GROSS PROFIT. Gross profit increased from $455,000 for the first half of
fiscal 1998 to $2.6 million for the same period in fiscal 1999 as a result of
increased sales. Gross margin decreased from 54.9% in the first half of fiscal
1998 to 46.4% in the first half of fiscal 1999. The decrease was principally due
to increased sales of lower-margin products on our discountdomain.com and
TSISoccer.com sites as well as seasonal promotional offers.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Total selling, general and
administrative expenses increased from $554,000, or 66.8% of revenues, in the
first half of fiscal 1998 when these expenses related primarily to the launch of
dELiAs.cOm, to $5.8 million, or 104.3% of revenues, in the first half of fiscal
1999 due to a substantial increase in advertising, product development and
overhead costs to support the continued expansion of iTurf.

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth certain unaudited quarterly statement of
operations data for the six quarters ended July 31, 1999. This unaudited
quarterly information has been derived from unaudited financial statements of
iTurf and, in the opinion of management, includes all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
information for the periods covered. The quarterly data should be read in
conjunction with the iTurf Financial Statements and the notes thereto. The
operating results for the quarters are not necessarily indicative of the
operating results for any future period.

<TABLE>
<CAPTION>
THIRTEEN WEEKS
THREE MONTHS ENDED ENDED
----------------------------------------------------
-------------------
APR. 30, JULY 31, OCT. 31, JAN. 31, MAY 1, JULY 31,
1998 1998 1998 1999 1999 1999
-------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues.................................................... $69 $760 $1,064 $2,121 $2,615 $2,952
Cost of product sales....................................... 35 339 359 954 1,332 1,651
------ ----- ------ ------ ------ -------
Gross profit................................................ 34 421 705 1,167 1,283 1,301
Selling, general and administrative expenses................ 109 445 514 438 1,753 4,052
Interest expense (income), net.............................. 11 11 9 10 (112) (989)
------ ----- ------ ------ ------ -------
Income (loss) before income tax (benefit) provision......... (86) (35) 182 719 (358) (1,762)
Income tax (benefit) provision.............................. (33) (11) 83 316 (161) --
------ ----- ------ ------ ------ -------
Net income (loss)........................................... $(53) $(24) $99 $403 $(197) $(1,762)
====== ===== ====== ====== ====== =======
</TABLE>

<TABLE>
<CAPTION>
PERCENTAGE OF REVENUES
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues.................................................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of product sales....................................... 50.7 44.6 33.7 45.0 50.9 55.9
------ ----- ------ ------ ------ ------
Gross profit................................................ 49.3 55.4 66.3 55.0 49.1 44.1
Selling, general and administrative expenses................ 157.9 58.6 48.3 20.6 67.0 137.3
Interest expense (income), net.............................. 16.0 1.5 0.9 0.5 (4.3) (33.5)
------ ----- ------ ------ ------ ------
Income (loss) before income tax (benefit) provision......... (124.6) (4.7) 17.1 33.9 (13.7) (59.7)
Income tax (benefit) provision.............................. (47.8) (1.5) 7.8 14.9 (6.1) --
------ ----- ------ ------ ------ ------
Net income (loss)........................................... (76.8)% (3.2)% 9.3% 19.0% (7.5)% (59.7)%
====== ===== ====== ====== ====== ======
</TABLE>

SEASONALITY

Our revenues and operating results may vary significantly from quarter to
quarter due to a number of factors, many of which are outside of our control.
These factors include:

- seasonal fluctuations in consumer purchasing patterns and advertising
spending;

- timing of, response to and quantity of our parent's catalog mailings;

- changes in the growth rate of Internet usage;

31
<PAGE>
- actions of competitors;

- the timing and amount of costs relating to the expansion of our operations
and acquisitions of technology or businesses; and

- general economic and market conditions.

Our limited operating history and rapid growth make it difficult to
ascertain the effects of seasonality on our business. We believe that
period-to-period comparisons of our historical results are not necessarily
meaningful and should not be relied upon as an indication of future results.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows used by operating activities were $65,000 and $3.1 million
during the first half of fiscal 1998 and 1999, respectively. Net cash flows
provided by operating activities of $646,000 for fiscal 1998 were primarily due
to a $104,000 increase in accounts payable and other current liabilities and
$425,000 of net income. Net cash flows used in operating activities for fiscal
1997 of $34,000 relate primarily to a net loss of $40,000. The net cash flow
effect of operating activities was insignificant for fiscal 1996.

Net cash used in investing activities of $74.7 million for the first half of
fiscal 1999 related primarily to our purchase of marketable securities and
shares of dELiA*s common stock from our parent in connection with our initial
public offering. Net cash used in investing activities of $131,000 in the first
half of fiscal 1998 related to purchases of property and equipment. Net cash
used in investing activities of $265,000 for fiscal 1998 related to purchases of
property and equipment. Investing activities in fiscal 1997 used $224,000, which
relates to cash paid for the gURL acquisition and purchases of property and
equipment. The net cash flow effect of investing activities was insignificant
for fiscal 1996. We expect to make capital expenditures of at least $4.0 million
in fiscal 1999, including investments in technology and physical infrastructure
and the acquisition of content and distribution relationships. In addition, a
portion of our resources may be used to fund acquisitions or investments in
businesses, products and technologies that are complementary to our current
business.

We also expect to spend significant amounts for marketing and other
alliances. In May 1999, we entered into a strategic alliance agreement with
America Online, Inc. under which we are committed to cash payments of
approximately $4.0 million in fiscal 1999 and $4.1 million in fiscal 2000.

Financing activities provided net cash of $99.8 million for the first half
of fiscal 1999 and $202,000 for the same period of fiscal 1998. The significant
amount of cash provided by financing activities during the first half of fiscal
1999 relates to our initial public offering. Prior to our initial public
offering, financing activities were related primarily to loans from our parent.
Financing activities used net cash of $37,000 for fiscal 1998 and provided net
cash of $289,000 for fiscal 1997. The net cash flow effect of financing
activities was insignificant for fiscal 1996.

We have historically relied on our parent for financing capital
expenditures. Our capital requirements depend on numerous factors, including:

- the rate of market acceptance of iTurf's online presence;

- the ability to expand iTurf's customer base;

- the cost of upgrades to its online presence; and

- the level of expenditures for sales and marketing.

The timing and amount of such capital requirements cannot accurately be
predicted. Additionally, we will continue to evaluate possible investments in
businesses, products and system

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<PAGE>
technologies and plans to expand our sales and marketing programs and conduct
more aggressive brand promotions. We believe that the net proceeds from this
offering, together with our operating revenue, will be sufficient to meet
anticipated cash needs for at least the next 24 months.

YEAR 2000 COMPLIANCE

We are heavily dependent upon complex computer software and systems for our
operations, including, to a significant extent, our parent's computer systems.
Many existing computer programs and systems use only two digits to identify a
year in the date field. These programs and systems were designed and developed
without considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create erroneous results by
or at the Year 2000.

STATE OF READINESS

All of iTurf's material operating software and our information technology
systems and other systems, including telecommunications and warehouse systems,
were developed by and are supported by third party vendors. Each of the third
party vendors of iTurf's mission-critical operating software have provided
written warranties or assurances to iTurf or its parent that such software will
not be affected by the change in the century. The majority of the third party
vendors of iTurf's other material operating software and systems have also
provided warranties or assurances that such software and systems would be
compliant. iTurf has prepared a Year 2000 compliance program, which involves:

- identifying the material operating software and systems on which iTurf
depends, whether used by iTurf or by iTurf's service providers;

- obtaining written warranties or assurances from third party software and
systems vendors and service providers;

- monitoring the compliance efforts of such vendors and service providers;
and

- testing its material operating software and systems.

We expect to begin performing tests in the fourth quarter of fiscal 1999 of
all of our material operating software and systems to verify the assurances
given by these third party vendors and ensure Year 2000 compliance. We have not
yet begun to perform these tests on any of our software and systems. As a
result, we have not identified any material software or systems as requiring
remediation or replacement. However, we cannot assure you that all of our
material operating software and systems will be Year 2000 compliant.

In addition to the operating systems and software iTurf uses directly,
iTurf's operations are also dependent upon the performance of operating software
and systems used by our significant service providers, including its parent and
providers of financial, telecommunications and parcel delivery services. Our
parent has provided us with assurance that its Year 2000 compliance programs is
consistent with ours and the status of its efforts is the same as ours. We have
contacted each of iTurf's other significant service providers and have obtained
written assurances from the majority of such providers that the providers'
relevant operating software and systems are in Year 2000 compliance or would be
by December 31, 1998. We are monitoring the status of all iTurf's significant
service providers' Year 2000 compliance efforts to minimize the risk of any
material adverse effect on iTurf's operations resulting from compliance
failures. However, there can be no assurance that iTurf's service providers
have, or will have, operating software and systems that are Year 2000 compliant.

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<PAGE>
RISKS

The failure of our software or systems to be Year 2000 compliant could
prevent us from being able to process or fulfill orders from our customers,
could cause users of our Web sites to consider alternative Web community and
content providers, or could disrupt our financial and management controls and
reporting systems. Any such worst-case scenario, if not quickly remedied, would
have a material adverse effect on iTurf.

In addition, a significant portion of purchases of merchandise from iTurf
are made with credit cards, and iTurf's operations may be materially adversely
affected to the extent its customers are unable to use their credit cards due to
Year 2000 issues that are not rectified by the customers' credit card vendors.

iTurf has not identified significant exposure to Year 2000 problems outside
of the information technology issues identified above.

COSTS

To date, iTurf has spent less than $5,000 on Year 2000 compliance. We expect
our incremental costs of addressing Year 2000 issues in fiscal 1999 to be
between $25,000 and $50,000. We believe the funds we have for investment in
technology infrastructure and maintenance will be sufficient to fund our Year
2000 compliance program and contingency plan. However, given iTurf's dependence
on third party software and system vendors and service providers and on our
customers' vendors, there can be no assurance to that effect.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 130, "Reporting Comprehensive Income," which
is effective for fiscal years beginning after December 15, 1997. SFAS No. 130
establishes standards for reporting and display of comprehensive income. The
adoption of SFAS No. 130 as of February 1, 1998 did not have an effect on the
iTurf's financial statements or disclosure as iTurf has no reconciling items.
Therefore net income (loss) and comprehensive income (loss) are the same.

In June 1997, the FASB issued SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information," which is effective for fiscal years
beginning after December 15, 1997. SFAS No. 131 requires that public companies
report certain information about operating segments in their annual financial
statements and in subsequent condensed financial statements of interim periods
issued to shareholders. This statement also requires that public companies
report certain information about their products and services, the geographic
areas in which they operate and their major customers. iTurf has determined that
the adoption of this new standard did not have a material effect on its
disclosure for all periods presented because iTurf currently operates in one
segment.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133, which is effective for fiscal
years beginning after June 15, 1999, requires iTurf to recognize all derivatives
on the balance sheet at fair value. iTurf has determined that the adoption of
this new standard will not have a material effect on its financial statements or
disclosure for all periods presented.

34
<PAGE>
BUSINESS

OUR BUSINESS

iTurf is a leading provider of Internet community, content and electronic
commerce, or e-commerce, services focused primarily on Generation Y, based on
sales and traffic on our Web sites. Generation Y is comprised of 56 million
people between the ages of 10 and 24 and accounts for over $278 billion of
disposable income. iTurf.com is an online destination that addresses Generation
Y's concerns, interests, tastes and needs. iTurf combines the style and
editorial flair of Generation Y-focused media with direct marketing and
e-commerce competencies. Our network of sites includes Web sites that offer
interactive web/zines with proprietary content, chat rooms, posting boards,
personal homepages and e-mail, as well as online shopping opportunities. Our
network is currently comprised of our gURL and OnTap community sites and the
following commerce sites that offer a wide range of apparel, accessories,
footwear, athletic gear and home furnishings:

<TABLE>
<S> <C>
- - dELiAs.com - discountdomain.com
- - TSISoccer.com - droog.com
- - contentsonline.com - dotdotdash.com
- - StorybookHeirlooms.com
</TABLE>

We are a subsidiary of dELiA*s Inc., a leading catalog marketer targeting
the Generation Y market. Our relationship with our parent provides the following
advantages:

- exclusive online use of leading brand names including dELiA*s and TSI
Soccer;

- a proprietary 11 million-name database and access to six million
individuals who have made catalog purchases;

- advertising space in our parent's catalog publications that collectively
have circulation in excess of 60 million;

- substantial merchandising expertise and strong relationships with hundreds
of vendors; and

- sophisticated services from our parent's distribution center to fill our
product orders.

The number of visitors to our Web sites and online sales have grown rapidly
over the last year. We estimate that the number of pages viewed by online users
per month on our Web sites has grown from approximately 800,000 in
February 1998 to approximately 82 million in July 1999. Our revenues have
increased from $829,000 in the six months ended July 31, 1998 to $5.6 million in
the 26 weeks ended July 31, 1999. By selling a selection of branded and
proprietary products, we achieved higher gross profits per order on merchandise
sales than many other online commerce companies. In the six months ended July
31, 1999, our gross margin was approximately 46%.

INDUSTRY BACKGROUND

GROWTH OF THE INTERNET AND E-COMMERCE

The Internet has emerged as a global medium, enabling millions of people to
share information, communicate and conduct business electronically. We believe
that the number of Web users will grow from approximately 69 million worldwide
in 1997 to approximately 320 million worldwide by the end of 2002. This rapid
adoption represents a significant opportunity for businesses to advertise and
sell products. We expect online commerce transactions to the home to increase
from approximately $5 million in 1997 to approximately $94 billion in 2002. We
also believe that Internet advertising will increase from approximately $1.9
billion in 1998 to $7.7 billion in 2002.

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<PAGE>
GROWTH OF ONLINE COMMUNITIES

As the Internet grows, we believe that users seek the same opportunity for
compelling content, information, expression, interaction, support and
recognition that they seek in the everyday world. The major navigational sites
typically provide general information and search services. These sites are not
dedicated to publishing proprietary content and aggregating user-generated
content. Often, the most relevant content for a user is generated by others who
share an interest in what is published. Multi-faceted online communities linking
related Web sites provide users with the ability to access unique, proprietary
content and to interact directly with the authors of personalized content.

GENERATION Y'S INCREASING IMPORTANCE TO THE INTERNET

The United States Census Bureau projects that Generation Y will grow from
56.3 million in 1998 to 63.1 million in 2010. This growth rate is estimated to
outpace growth of the general popuation by 19.5%. Generation Y also possesses
substantial disposable income. Based upon Census Bureau estimates, we believe
that 10-24 year olds generated disposable income in excess of $278 billion in
1997.

At the same time, Generation Y is becoming increasingly involved in the
Internet. We estimate that the number of teens and college students who
regularly access the Internet will rise from 12 million in 1998 to over 22
million by 2000. Their increased activity creates a significant opportunity for
both selling products and advertising to Generation Y online. We also believe
that online commerce sales to teens and college students will increase from $600
million in 1998 to $3.8 billion in 2002 and advertising to Generation Y will
increase from $500 million in 1998 to $2.1 billion in 2002.

We may not enjoy the same growth rates as the recent rates of growth of
Generation Y or Web users, e-commerce or spending by Generation Y.

THE NEED FOR A GENERATION Y ONLINE DESTINATION

We believe Generation Y is a large and underserved audience that desires
entertainment, communication, content and advice in an environment focused on
their particular needs. Members of Generation Y are influenced by new media and
information sources and demand fresh and engaging content that speaks to them
without speaking down to them. The major Internet navigational sites are
generally:

- designed to appeal to a broad audience and therefore have not created an
environment focused on the specific programming needs and buying habits of
Generation Y;

- do not exclusively address the issues that are relevant to teens, such as
peer, parental and school-related pressures, and issues revolving around
friendship, sexuality and competition; and

- do not provide the kind of interactivity and services that this group
seeks, such as communication with their peers through chat and e-mail,
away from the adults in their lives, as well as news, online games and
personal home page building.

We believe that creating an online destination that caters exclusively to
Generation Y is essential to marketing to this group. From a marketing
perspective, Generation Y is difficult to reach and has demonstrated a
resistance to traditional marketing techniques. We believe marketing products
and services indirectly in the context of demographically appropriate editorial
information, rather than traditional advertising methods, is a more effective
way to reach this audience. Accordingly, we believe there is a need for a
Generation Y online destination consisting of an integrated network of community
and commerce in a trusted environment.

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<PAGE>
THE ITURF SOLUTION

iTurf is an online destination where Generation Y can congregate in an
environment that caters exclusively to its interests and promotes its
participation and personal growth. iTurf integrates online community and
commerce through a network of sites focused primarily on Generation Y, providing
compelling and topical content as well as forums for interactive communication.

Our network of Web sites is currently comprised of our gURL and OnTap
community sites and multiple commerce sites. Our gURL community is a group of
sites marketed under the gURL brand, anchored by our gURL.com site. The gURL
community sites provide a place where girls and young women can find peer
support and advice from like-minded users through community resources such as
chat rooms, posting boards, home-page hosting services and Web-based e-mail
services. Our gURL sites provide interactive features and regularly updated
articles on topics of interest to Generation Y girls and young women, such as
shopping, fashion and beauty, peer pressure, entertainment, music,
relationships, emotions, gossip and news. The gURL.com site has received various
awards including a 1998 Webby award for best site in the "living" category. The
Webby award is given by the International Academy of Digital Arts and Sciences
and is considered a leading creative honor in the Web industry.

OnTap.com is a leading internet college-focused Web site. OnTap.com includes
a global portal site, located at OnTap.com, with information and community
services directed at college and university students, and a network of more than
100 campus-specific, local sites, such as Harvard.Ontap.com, which feature
information relevant to the particular campus, such as local entertainment
information and campus schedules.

Our commerce sites offer a wide range of apparel, accessories, footwear,
athletic gear and home furnishing products for both teen girls and boys. Our
most prominent online store, dELiAs.cOm, offers apparel, cosmetics, accessories,
footwear and other products for Generation Y girls and young women. Our other
commerce sites include:

- TSISoccer.com, offering soccer and other sports related products;

- contentsonline.com, offering home furnishings, light furniture and
household articles;

- discountdomain.com, a membership-based discount shopping service offering
casual apparel and athletic clothing and consumer electronics products;

- droog.com, a site that offers apparel, accessories and footwear for
Generation Y boys and young men;

- dotdotdash.com, a site that offers similar products to girls under age 13;
and

- StorybookHeirlooms.com, a site that offers casual, as well as formal
apparel, accessories and footwear for girls between the ages of four and
eleven, and their mothers.

We intend to leverage the traffic and brand name recognition generated from
these sites to develop and expand existing and additional sites on our network.

Our commerce and community sites are linked by iTurf.com. We intend to
develop iTurf.com as the online meeting place and community for young men and
women of Generation Y. We will promote and drive traffic to this site through
all of the properties in our network. We will promote iTurf.com to Generation Y
girls and young women through gURL.com, dELiAs.cOm and other female-targeted
offerings. We will promote iTurf to Generation Y boys and young men through our
male-focused offerings as well as the prospect of interaction with the members
of the gURL community. In addition to our e-commerce efforts, we believe we may
be able to generate significant advertising and sponsorship revenue from
advertisers and retailers seeking targeted access to Generation Y.

37
<PAGE>
THE ITURF ADVANTAGE

We believe we are one of the few online networks to focus primarily on the
Generation Y market, and that our relationship with our parent, the leading
direct marketer to Generation Y, provides us with the following advantages:

ABILITY TO ATTRACT CUSTOMERS AND USERS TO WEB SITES.

- ACCESS TO PROPRIETARY DATABASE OF OVER ELEVEN MILLION NAMES. We have the
exclusive online right to our parent's database of catalog buyers and
requesters. This database has grown rapidly from 198,000 names as of
January 31, 1996 to over 11 million names today and is growing by over
100,000 names each month. In excess of 700,000 customer records in the
database have e-mail addresses. This database includes six million buyers
of direct mail products and contains extensive individual purchasing
histories. We believe this proprietary database would be difficult for
competitors to replicate and creates a significant competitive advantage
in targeting Generation Y.

- COMPELLING, TOPICAL CONTENT. Compelling, topical and regularly-updated
online content is critical to driving repeat customers and users to our
Web sites. We obtain content from both our internal staff and our parent.
This content consists of engaging editorial copy from direct marketing
products, and content from the gURL web/zine and community as well as the
OnTap site, which present regularly-updated articles, series and games as
well as thousands of pages of user-generated content. Accordingly, we
believe we have the editorial assets necessary to keep our content fresh
and updated and to continue to attract and retain new customers and users.

- ITURF TRADE NAMES. We have the exclusive online right to our parent's
licensed trade names, including dELiA*s, contentsonline, TSI Soccer,
discountdomain and Droog, and our gURL and OnTap trade names. We believe
these trade names have been a strong motivating factor in attracting
customers, especially with regard to consumers who have not yet made a
purchase online. We believe that a significant portion of our success has
been attributable to the goodwill and trust earned by our brands among
Generation Y consumers and their parents. Very few online marketers have
successfully penetrated the teen market in this manner.

- EXCLUSIVE ADVERTISING AND PROMOTIONAL SPACE IN THE LARGEST PUBLICATION
DIRECTED AT OUR TARGET MARKET. To date, we have advertised our Web sites
primarily through our parent's catalogs, which have an annual circulation
in excess of 60 million. The dELiA*s catalog has the largest domestic
circulation of any publication directed at Generation Y. Following this
offering, we will have certain exclusive rights to purchase promotional
and advertising space in our parent's catalog titles, including dELiA*s,
Contents, TSI Soccer and Droog. We intend to increase the amount of
advertising we place in these titles.

ABILITY TO DELIVER SUPERIOR E-COMMERCE SOLUTIONS.

- SOPHISTICATED FULFILLMENT CAPABILITY. We are able to fill orders through
our parent's 354,000 square foot distribution center. This access enables
us to retain significantly greater control over the quality, timeliness
and cost of fulfilling our product orders than other online marketers who
outsource fulfillment services to unrelated contractors that serve several
direct marketers. In addition, the scale of our parent's operation enables
us to deliver a large number of products over a range of categories.
Customers generally have access to real-time product availability
information prior to ordering and are shipped products within 48 hours of
credit approval. We also supplement our customer service staff with
support from our parent's three call centers with a total of 400 stations.

38
<PAGE>
- SUPERIOR INVENTORY MANAGEMENT AND MERCHANDISING OPPORTUNITIES. Our
relationship with our parent enables us to offer a large selection of
merchandise without the investment in inventory and the ongoing expense
related to the management of such inventory. In addition, we generally do
not take ownership of the inventory until the customer order is taken,
eliminating most of the risk of inventory obsolescence and mark-downs. We
also take advantage of our parent's relationships with a diverse group of
hundreds of vendors as well as the purchasing economies enjoyed by our
parent as a result of both its scale and proprietary private label
products. As a result, we believe we are well positioned to continue to
enjoy gross profit margins that are superior to many other online
retailers while being able to provide our customers with a compelling
selection of recognized merchandise.

- DIRECT MARKETING KNOWLEDGE AND EXPERTISE. We expect to benefit from the
direct marketing knowledge and expertise of our management team and of our
parent. We are transferring to the Web the contextual selling model as
well as the use of editorial and graphical elements pioneered by our
parent and various members of our management. We believe that this
strategy is directly transferable to the Web and can be enhanced by
including interactive capabilities such as chat and personal home pages.
In addition, our parent possesses considerable experience in gathering and
mining data on Generation Y that we believe is key to our success.
Accordingly, we believe that we will be able to effectively target and
satisfy the needs of the Generation Y community.

STRATEGY

Our goal is to build iTurf into the most heavily-trafficked Generation Y
online destination. We intend to realize superior revenue growth opportunities
based upon expanded e-commerce offerings and, eventually, advertising
opportunities including sponsorship, promotion and distribution agreements with
leading brand marketers and media companies. We intend to reach the above goal
by implementing the following interconnected strategies:

STRENGTHEN BRAND RECOGNITION. We believe that building brand recognition
for our sites is critical to attracting and expanding our global user base and
customer loyalty. Our strategy is to enhance the recognition of the iTurf brand
name as well as to independently build each brand in the iTurf network,
including dELiA*s, gURL, OnTap, TSI Soccer, discountdomain, contentsonline,
Droog and dot dot dash, each of which is designed to appeal to a specific
customer segment within Generation Y. By building each brand individually, we
expect to reach specific customer groups with product offerings and formats
designed to cater to their tastes and purchasing patterns. In doing so, we
believe we can avoid relying on one brand or segment within Generation Y and
instead can maximize our reach to all segments of Generation Y. In the near
term, we will devote substantial resources to building the leadership positions
of gURL and dELiAs.cOm.

We seek to build brand recognition and traffic through multiple methods,
such as:

- PROMOTION IN OUR PARENT'S MARKETING CHANNELS. Since inception, we have
marketed our sites and products and services in our parent's catalogs,
which have a combined circulation of more than 60 million. We intend to
continue to advertise in our parent's family of catalogs and our parent's
retail stores. To date, these marketing channels have been the principal
marketing mechanism to reach our target audience.

- TRADITIONAL AND INTERNET ADVERTISING. We also use traditional
advertising, in particular print-based promotions. Our sites have been
advertised in such teen and fashion magazines as Seventeen and YM. We
believe that promotion in such publications is particularly effective in
reaching our target audience. We also use targeted online advertising to
promote our brand name and specific merchandising opportunities. We have
purchased advertising on America Online, the MSN network, Excite.com,
MTV.com and Seventeen.com.

39
<PAGE>
- DIRECT MARKETING. The Internet allows rapid and effective marketing
experimentation and analysis, instant user feedback and personalization.
We strive to use direct marketing techniques to effectively target and
retain customers. Currently we send regular broadcast e-mails to our users
promoting special discounts and offers. We intend to include more targeted
personalized electronic messages based on prior purchasing behavior and
online activity. We also send out regular electronic newsletters to
gURLmAIL registered users regarding events affecting the Generation Y
community. We may also use traditional direct mail channels to target our
customers and individuals on our parent's database.

- STRATEGIC ALLIANCES. We believe iTurf can enhance its brand names and
increase its customer base through alliances with community, content and
e-commerce providers. We have anchor tenancy positions in the shopping
areas on the America Online Service and comprehensive marketing
relationships with Excite.com (Excite/@home) and the MSN Network
(Microsoft). We are the preferred provider of soccer merchandise on
Fogdog.com. We intend to enter into additional alliances with other sites
to build traffic and gain customers.

- AFFILIATE NETWORK. We recently created the dELiA*s Affiliate Network, a
marketing tool that increases exposure on the Internet and directly
generates sales. We offer affiliates 8% of net sales on purchases by
customers referred to our network of sites.

OnTap includes a global portal site, located at OnTap.com, with information
and community features directed at college and university students, and a
network of more than 100 campus-specific sites with local content.

ENHANCE ONLINE OFFERINGS. We will aggressively seek to develop our content,
community and e-commerce product offerings to drive traffic to our Web sites and
increase revenue.

- CONTINUE TO INCREASE COMMUNITY FUNCTIONALITY. We believe our success to
date has been, in part, a result of building customer loyalty by coupling
community with commerce. We believe our target audience places great value
on opportunities to interact with their peers through interactive services
that we currently offer, including e-mail, chat rooms, home pages and
other services. In the near term, we intend to add services such as buddy
lists, instant messaging, shared calendars and organizers to further
increase the community functionality of our sites. We are continually
looking for innovative and exciting interactive services and new
technologies to offer our users and customers.

- ENHANCE CONTENT TO DEEPEN PENETRATION OF MARKETS. We intend to provide
new content offerings targeted at additional customer groups within
Generation Y, such as offerings directed at young men and content designed
to facilitate interaction between male and female members of Generation Y.
Our offerings for males may include online games and sports news, among
other things. We plan to drive traffic to these offerings through our
droog.com and TSISoccer.com sites. We also intend to develop iTurf.com as
the online meeting place and community for young men and women of
Generation Y.

- EXPAND RANGE OF E-COMMERCE PRODUCTS AND SERVICES. We believe that we can
further expand our product offerings to include additional products and
services targeted at and particularly attractive to Generation Y
consumers. Our product offerings have consisted principally of apparel,
accessories, footwear, and cosmetics for Generation Y females and athletic
gear for Generation Y males. We have recently expanded our offerings to
include home furnishings for Generation Y females, apparel and accessories
for Generation Y males and consumer electronics for Generation Y. In the
future, we may offer magazines, software, music and videos, as well as
other apparel and athletic gear.

EXPAND SITE INFRASTRUCTURE TO SUPPORT GROWTH. We intend to continue to
invest in technologies and site infrastructure and to enhance the functionality
of our sites. This will enable us

40
<PAGE>
to better serve existing users and to provide robust platforms to support
growth. In the near term, we are making substantial investments in the
integration of Web and database technologies to:

- allow increased customization and personalization of the online shopping
and community experience;

- employ basket analysis and other cross-selling strategies; and

- enable broadcast e-mails to customers based on purchasing histories and
demographic characteristics and other valuable database-driven techniques
for increasing revenue per customer.

41
<PAGE>
THE ITURF NETWORK

The iTurf network is currently composed of the iTurf.com home page and the
twelve sites described below:

COMMUNITY SITES

<TABLE>
<C> <S>
gURL.com offers Web/zines and community features targeting
[LOGO] teen girls and featuring chat, posting boards and other
interactive functionality.

gURLnet.com is a network of third-party Web sites featuring
[LOGO] content designed for Generation Y females.

gURLpages.com is a free home-page hosting service that
[LOGO] offers users disk space and publishing tools to create their
own sites quickly and easily in one of 23 topically
organized sub-communities.

gURLmAIL.com is a free Web-based e-mail service that is open
[LOGO] to users who register and provide certain demographic
information.

ONTAP.COM OnTap includes a global portal site, located at OnTap.com,
with information and community features directed at college
and university students, and a network of more than 100
campus-specific sites with local content.

E-COMMERCE SITES

dELiAs.cOm is a commerce site based on the DELIA*S print
[LOGO] catalog selling apparel, accessories, footwear and cosmetics
to Generation Y girls and young women.

TSISoccer.com is a commerce site based on the TSI SOCCER
[LOGO] print catalog selling soccer merchandise, including
footwear, apparel and equipment.

discountdomain.com is a commerce site selling discounted
[LOGO] merchandise (primarily apparel, athletic gear and consumer
electronics) to Generation Y young men and women who pay a
monthly subscription fee.
contentsonline.com is a commerce site based on the CONTENTS
[LOGO] print catalog selling home furnishings, light furniture and
household articles for a Generation Y female's bedroom or
dorm room.

droog.com is a commerce site based on the DROOG print
[LOGO] catalog selling apparel, accessories and footwear to
Generation Y boys and young men.

dotdotdash.com is a commerce site based on the DOT DOT DASH
[LOGO] print catalog selling apparel, accessories and footwear for
girls under age 13.
</TABLE>

42
<PAGE>
<TABLE>
<C> <S>
STORYBOOKHEIRLOOMS.COM StorybookHeirlooms.com is a commerce site based on the
STORYBOOKHEIRLOOMS print catalog selling casual and formal
apparel, accessories and footwear for girls between the ages
of four and eleven, and their mothers.
</TABLE>

ITURF COMMUNITY

Our current community offerings are built around the gURL and OnTap brands.
Our gURL sites serve hundreds of thousands of registered Generation Y users. We
believe that we have built a cultural environment in which our users feel
comfortable, safe and secure. These traits are critical for attracting and
retaining visitors. Our gURL sites collectively accounted for less than five
percent of our revenues in fiscal 1998.

[LOGO]

GURL WEB/ZINE. The gURL web/zine is our flagship editorial product. gURL
presents a different approach to the experience of being a teen girl. It is
committed to discussing issues that affect the lives of Generation Y females in
a non-judgmental, personal way. Through honest writing, visuals and liberal
sense of humor, gURL seeks to provide its audience a new way of looking at
subjects that are crucial to their lives. gURL chooses the subjects it covers
carefully and deals frankly with issues such as sexuality, emotions and body
image.

The gURL web/zine presents regularly-updated articles, series and games in
five principal departments:

- LOOKS AREN'T EVERYTHING--a love/hate look at beauty culture, including
signature feature series such as "On Being Hairy," "The Boob Files," and
"Virtual Makeover;"

- DEAL WITH IT--getting through the day, the date and the rest of the hard
stuff...a whole new take on your body, brain and life as a teen gURL;

- WHERE DO I GO FROM HERE?--decisions, directions and different ways of
getting a life;

- HA!--real girl comics. . .the sad but true funny pages; and

- EXHIBITIONIST--where we show off art, poetry and prose by girls, for girls
and stuff that matters to girls and see what they have to say about it.

The gURL site offers content from three resources:

- proprietary content developed by our staff writers and designers as well
as free-lancers operating under work-for-hire or exclusive license
arrangements;

- user-generated content, such as postings and poetry submissions; and

- licensed third party content, such as music news from SonicNet and film
trailers from Film.Com.

We attract traffic to our sites by offering compelling, topical and
regularly-updated content. The gURL site has received a number of awards for its
content and community services, including a 1998 Webby award for best site in
the "living" category and a 1997 I.D. Magazine Interactive Media Design award.
The quality and increasing recognition of content from the gURL Web site and of
the gURL brand have created ancillary licensing opportunities for iTurf.
Pocketbooks published a book titled "DEAL WITH IT: A WHOLE NEW APPROACH TO YOUR
BODY, BRAIN AND LIFE AS A TEENAGE GURL" in the fall of 1999 for teen girls based
upon editorial content drawn from and inspired by the gURL.com site. In
addition, Andrews McMeel, the leading publisher of calendars in the U.S.,
published gURL-branded engagement and wall calendars in the fall of 1999.

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In fiscal 1998, the gURL site accounted for less than 5% of our revenues.

GURL CONNECTION CHAT AND POSTING BOARDS. gURL Connection is the
password-protected members-only area of gURL.Com that offers a safe environment
for teen girls to interact freely with their peers. Our Web sites provide both
text-based and graphical-based Palace-TM- chat services to a membership base of
over 400,000 members. Chat is a critical part of establishing a place for gURL's
users to "hang out" and transforming gURL into a premier destination for
Generation Y.

gURL's signature "Shout Out" posting boards provide intensely personal and
compelling media for members of the gURL community to share ideas, express
themselves and learn about others. The posting boards provide the gURL community
with a continual source of user-generated content. Most recently, we have begun
to leverage that content into another web/zine, "Mouthpiece," consisting of
user-generated content drawn from the "Shout Out" boards. In fiscal 1998, this
Web site accounted for less than 5% of our revenues.

[LOGO]

gURLnet is a gURL-branded network of third-party sites featuring content
designed for, and, in many cases, created by Generation Y females. gURLnet
offers the gURL community a selection of engaging content from diverse sources
across the Internet. gURLnet is the product of an alliance between iTurf and
ChickClick, a network of third party sites featuring content primarily for women
in their 20's and 30's. gURLnet is featured as the "teen channel" of
ChickClick.com. Each site links to and from the gURLnet home page and identifies
itself as a member of the gURLnet. In addition, each gURLnet member site
promotes the gURL Connection as the community of gURLnet. In fiscal 1998, this
Web site accounted for less than 5% of our revenues.

[LOGO]

gURLpages is one of the world's largest communities of personal teen sites.
We provide users with free disk space and publishing tools to create their own
sites quickly and easily. The sites are organized into 23 topically organized
sub-communities. These communities include entertainment-oriented topical
groupings such as "Movies," "Music" and "TV;" more expressionist areas such as
"Activism," "Comix" and "Ranting and Raving;" and for the users for whom
community means anarchy, "I Am Uncategorizable." Users are encouraged to become
and remain active participants in the gURL community by updating their sites and
communicating with others through the free e-mail, chat and bulletin-board
services we provide. We offer links from the gURL web/zine to particularly
compelling gURLpages for users seeking greater involvement and recognition
within the community. With hundreds of new gURLpages being created each day,
gURLpages has grown quickly since its launch in June 1998, and had approximately
360,000 registered page owners as of November 1, 1999. gURLpages is hosted by
Lycos, Inc. In fiscal 1998, this Web site accounted for less than 5% of our
revenues.

[LOGO]

gURLmAIL offers free Web-based e-mail accounts to users who register by
providing certain demographic information. Participants can register for and
receive e-mail addresses at gURLmAIL.com that enable them to send and check
their e-mail from anywhere in the world via the Internet. gURLmAIL has grown
quickly since its launch in February 1998, and had approximately 900,000
registered users as of November 1, 1999. gURLmAIL is hosted by Lycos, Inc. In
fiscal 1998, this Web site accounted for less than 5% of our revenues.

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ONTAP

OnTap.com is a leading internet college-focused Web site. Prior to our
acquisition of the site in September 1999, it was initially launched in 1995 as
TapOnline.com and recently relaunched as OnTap.com. OnTap.com includes a global
portal site, located at OnTap.com, with information and community services
directed at college and university students, and a network of more than 100
campus-specific, local sites, such as Harvard.Ontap.com, which feature
information relevant to the particular campus, such as local entertainment
information and campus schedules.

In 1998, the site received over 6 million college student visits, and over
25 Fortune 500 companies utilized the site for advertising and promotion. This
fall, OnTap.com expanded its main global site (www.OnTap.com) by launching more
than 100 "unofficial" college websites on campuses nationwide.

OnTap.com offers special-interest channels catering to college students such
as Sports, Entertainment, Games, Travel, Lifestyle, Alternative, Career and
Technology. In addition, the site includes features such as:

- VDORM (virtual dorm): No rules, no script, totally live. Vdorm links
college users to cameras set up in dorm rooms across the country.

- FORUMS: an interactive area centered around a community or theme (example:
"The X-Files"). Forums are created by users using our templated forum
builder. A forum allows for interactivity with polls, surveys and threaded
messages.

- E-MAIL: College users can obtain their own email account through OnTap and
subsequently receive, reply and send e-mails whenever they have internet
access

- AUCTIONS: OnTap auctions allows users to buy and sell a wide variety of
merchandise including movies, compact discs, concert tickets, sporting
goods, computers, electronics, video games, stereo equipment, books,
collectibles and memorabilia

- Promotions: On OnTap's "Prizefest" area, college students can win new
prizes every day from color television sets to mountain bikes to spring
break vacations.

- CHATS: OnTap features an array of scheduled and random chats covering a
variety of topics. Users have the possibility to "Whisper," creating their
own private chat rooms

ITURF E-COMMERCE

Each of our e-commerce sites, other than discountdomain.com, is based on a
print catalog published by our parent. These sites translate the distinctive
look and editorial voice of the corresponding print catalog onto the Internet,
adding interactive functionality to make shopping an entertaining experience.
Each site is designed to be intuitive and easy to use, enabling the ordering
process to be completed with a minimum of customer effort. All of these sites
offer real-time product availability information, with the exception of
StorybookHeirlooms.com, which we expect will offer real-time availability
information in the future.

[LOGO]

We have generated a substantial majority of our revenue from the sale of
apparel, accessories and footwear on the dELiAs.cOm site, which was launched in
May 1998. Product sales and advertising on dELiAs.cOm accounted for
approximately 74% of our revenues in fiscal 1998. Apparel ranges from basics,
such as jeans, shorts and t-shirts to more fashion-oriented apparel, such as
woven and knit junior dresses and swimwear. Our footwear selections include
sneakers, sandals, boots, flats and platforms. Accessories include sunglasses,
watches, costume jewelry and cosmetics.

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dELiAs.cOm features branded merchandise from a diverse group of more than 90
vendors, at any one time, complemented by our parent's private label products.
We believe the strong customer acceptance of the dELiA*s brand helps make the
DELIA*S catalog and, by extension, our dELiAs.cOm site, preferred outlets for
certain vendors, some of which occasionally provide merchandise on an exclusive
basis. Brands currently offered through dELiAs.cOm include nationally recognized
names such as Vans, Paris Blues and Roxy (Quicksilver), as well as brands
focused on the Generation Y market, including Dawls, Free People (Urban
Outfitters), Tag Rag and 26 Red Sugar. We also offer brands from emerging
designers that differentiate dELiAs.cOm from other retailers and help to
establish dELiAs.cOm as a fashion resource for girls and young women. Emerging
brands currently featured on dELiAs.cOm include Girl Star, Hydraulic Itsus,
Malibu, New Breed and Paul Frank.

We organize products into 11 categories, each divided into styles. For
example, the "Dresses" category is divided into "Casual" and "Fancy" styles.
Most products are shown both in a still photograph and on teen models, whose
expressions and poses convey the dELiA*s attitude. At any one time, the site
presents graphical depictions of 180 to 300 product styles offered in more than
1,000 stock keeping units. In addition, customers can purchase products from an
older DELIA*S catalog by entering an item number from the catalog.

dELiAs.cOm also offers a gift registry, an e-mail mailing list and links to
content on gURL.com. We believe these features increase the frequency with which
customers return to our site and make purchases. Additionally, we will continue
to explore other technology-based aids that enhance the shopping experience such
as basket analysis, other cross-selling strategies and high-resolution graphics
systems.

[LOGO]

TSISoccer.com is our second largest source of merchandise sales, accounting
for approximately 11% of our revenues in fiscal 1998. The site offers a full
range of soccer merchandise, including footwear, apparel and equipment, almost
all of which consists of products from the leading suppliers of athletic
footwear and apparel, including adidas, Nike, Reebok and Puma, as well as
manufacturers of well-known specialty brands, such as Umbro and Mitre. Our
parent's relationships with these suppliers enable us to offer an exceptionally
broad and deep product selection, including premier branded products, which
typically have limited distribution.

TSISoccer.com offers over 7,000 stock keeping units, including men's,
women's and children's styles, as well as difficult-to-find sizes, special team
colors and product color combinations. We believe that few other direct
marketers currently offer as complete a line of soccer footwear, apparel and
equipment as that offered by TSISoccer.com.

TSISoccer.com, like the TSI SOCCER catalog, positions itself as more than an
online store; it is also an online soccer resource with links to soccer-related
sites on the Web.

[LOGO]

discountdomain.com is a subscription site that offers access to close-out
merchandise at discount prices from the DELIA*S catalog and vendor closeouts of
other products. discountdomain.com accounted for approximately 8% of our
revenues in fiscal 1998. In exchange for a $5.00 fee charged automatically each
month, members can access a password-protected area where discounted merchandise
can be purchased online.

The site has recently expanded its assortment to include casual apparel for
young men, athletic apparel and low-cost consumer electronic products like
portable stereos and cameras. Merchandise is organized in four principal
categories: Guys, Girls, Gadgets and Gifts. Within Guys and Girls, merchandise
is organized into apparel and accessory sub-categories. The site carries 250-300

46
<PAGE>
products, available in more than 1,000 stock-keeping units at any one time. The
merchandise assortment is updated weekly.

[LOGO]

contentsonline.com offers home furnishings, light furniture and household
articles targeted at Generation Y females. The merchandise is drawn from the
CONTENTS print catalog. Such items include sheets and other bedding, lamps,
organizers and other products designed with a Generation Y girl's bedroom or
dorm room in mind. We believe that few, if any, retailers, online or off-line,
target this market.

contentsonline.com presents products in a variety of ways, including
"design-your-room" editorial features, presentations of stylized, decorated
rooms, still shots of individual products, and a "Gizmos and Gifts" area that
suggests gift products in particular price ranges. contentsonline.com typically
presents approximately 60 products and allows customers to order additional
products if they have a CONTENTS catalog and enter an item number. In fiscal
1998, this Web site accounted for less than 5% of our revenues.

[LOGO]

droog.com offers apparel, footwear and accessories for Generation Y males
from our parent's new DROOG print catalog. The site captures the stylized
character of the DROOG catalog through a distinctive font and a terse editorial
voice that speaks to its target market. Users can order from approximately 125
products comprising over 450 stock keeping units. Our parent mailed the first
issue of the catalog in October 1998 and we launched the droog.com site in
November 1998. In fiscal 1998, this Web site accounted for less than 5% of our
revenues.

[LOGO]

dotdotdash.com offers apparel, footwear and accessories for girls under age
13 from our parent's new DOT DOT DASH catalog. The site's playful graphics and
icons are designed to appeal the sense of fun of its young target market. Users
can order approximately 125 products, comprising over 500 stock keeping units.
Our parent mailed the first issue of DOT DOT DASH in March 1999 and we launched
the dotdotdash.com Web site that month. Since its launch, this site has
accounted for less than 5% of our revenues.

STORYBOOKHEIRLOOMS.COM

StorybookHeirlooms.com offers casual and formal apparel, accessories and
footwear for girls between the ages of four and eleven, and their mothers from
our parent's STORYBOOK HEIRLOOMS catalog. The site is designed to be shopped by
childrens' parents. In some cases, the site features merchandise and/or pricing
available only through the Internet. Our parent mailed its first issue of the
STORYBOOK HEIRLOOMS catalog in January 1999 and we launched the
StorybookHeirlooms.com web site in April 1999. Since its launch, the site has
accounted for less than 5% of our revenues.

MARKETING AND PROMOTION

Our marketing strategy is to promote, advertise and increase the visibility
of our brands and acquire new customers through multiple channels, including:

- traditional and Internet advertising;

- direct marketing to existing and potential customers;

- building strategic alliances with our Web sites;

- expanding our affiliate network and linking programs; and

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<PAGE>
- marketing through high school and college campus-based marketing services
offered by Marketsource.

We believe that the use of multiple marketing channels reduces reliance on
any one source of customers, lowers customer acquisition costs and maximizes
brand awareness.

TRADITIONAL AND INTERNET ADVERTISING. We advertise our sites in our
parent's retail and catalog properties. Our Web site addresses can now be found
on the cover and on nearly every page of our parent's catalogs, as well as on
point-of-sale displays at our parent's retail stores. In addition, we have found
bind-in cards inserted in our parent's catalog to be a significant driver of
traffic to the dELiAs.cOm and gURL.com sites. iTurf is the exclusive e-commerce
and community based Internet advertiser in our parent's catalogs. We also pursue
a targeted, traditional media-based advertising campaign focused on print-based
advertising in teen fashion and lifestyle magazines. We also use targeted online
advertising to promote both our brand names and specific merchandising
opportunities.

DIRECT MARKETING. We use direct marketing techniques to attract and retain
customers. Our parent's proprietary database of catalog requesters contains in
excess of 800,000 e-mail addresses. We send regular broadcast e-mails to these
addresses as well as to our own customers. We intend to expand our use of
broadcast e-mail to include more targeted messages and promotions to specific
segments of our list and to include embedded graphic images within e-mail to
customers who have the ability to view them. We also offer special discounts and
promotional offers from time to time on our sites to drive sales. We promote
these offers through print catalog advertising and e-mails. We may also use
direct mail to access individuals from our parent's proprietary database.

STRATEGIC ALLIANCES. We have entered into a variety of relationships with
several sites to build traffic and attract customers. We have anchor tenancy
positions in the shopping areas on the America Online Service and comprehensive
marketing relationships with Excite.com (Excite/@home) and the MSN Network
(Microsoft). In addition, we are the preferred provider of soccer merchandise on
Fogdog.Com. We intend to expand our use of these kinds of alliances in the
future. We carefully evaluate each potential alliance and strive to ensure that
any fees associated with it are cost-effective in terms of the potential
customers to be acquired, potential revenue to be generated, level of
exclusivity and brand exposure.

AFFILIATE PROGRAM. We created the dELiA*s Affiliate Network, a grass-roots
marketing tool designed to increase our exposure on the Internet and generate
sales. In order to join the dELiA*s Affiliate Network, prospective affiliates
complete an automated application form online that is generally approved within
48 hours by a member of our staff. Registered affiliates are paid a referral
fee, in most cases 8% of the net invoice value for any sale generated via the
affiliate's link to our e-commerce sites, less any returns. We promote the
program via links on dELiAs.cOm and through LinkShare, our affiliate marketing
partner. These agreements are terminable at will by either party.

CAMPUS-BASED MARKETING. We have entered into a marketing alliance with
MarketSource to promote our network of sites through MarketSource's offline
campus-based marketing channels. These include sampling programs distributed on
college campuses, wallboards on high schools and event-based promotions.

ADVERTISING AND SPONSORSHIP SALES

We believe our Web properties provide unique access to the Generation Y
market, an audience that is not easily available through other media. As a
result, a variety of marketers are interested in using our Internet properties.
Typical agreements relating to banner advertising provide for placement of small
advertisements on a specified number of Web pages, have a short duration and are
measured only by page views. We intend to explore sponsorship, promotional and
distribution

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<PAGE>
arrangements that generally have longer terms and higher dollar values than
typical banner advertising deals to support broad marketing objectives,
including branding, awareness, product introductions, online research and
editorial integration.

Although they are not material to our business, we currently participate in
revenue sharing arrangements for banner advertisements placed on our sites with
Lycos, Inc. for our gURLmAIL and gURLpages sites, ChickClick.com for our gURLnet
site, and SonicNet for the co-branded music news area on gURL.com. In these
arrangements, these parties typically provide iTurf and its users with Web-based
software applications or content and sell the advertising inventory placed in or
adjacent to the content. These parties pay to iTurf a percentage of the ad sales
revenue generated by iTurf. We intend to develop a marketing and sales team to
better understand advertisers' needs and to better target the Generation Y
community. Advertising and sponsorship sales accounted for approximately 11% of
our revenues in fiscal 1998.

INTERNATIONAL MARKETS

We intend to market our goods and services to customers in foreign
countries. Historically, our parent has not extensively marketed its catalogs in
foreign countries due to prohibitive mailing costs. However, we believe we can
market outside the United States through the Internet at a fraction of the cost
of direct mail marketing. Both our parent and we have extensive customer and
user files including individuals from more than 140 countries. For example,
approximately 19% of gURLmAIL users reside outside of the United States.

WAREHOUSING AND FULFILLMENT

Our parent provides warehousing and order fulfillment services to iTurf
pursuant to the intercompany services agreement. Each of our e-commerce sites,
except for TSISoccer.com, is fully integrated into our parent's sophisticated
warehouse fulfillment system. Our parent processes and fulfills our customer
orders through its 450,000 square foot warehouse and fulfillment center in
Hanover, Pennsylvania. The system monitors the in-stock status of each item
ordered, processes the order and generates warehouse selection tickets and
packing slips for order fulfillment operations.

We ship a majority of our customer orders within 48 hours of credit
approval. If a customer places an order using a credit card owned by another
customer and the order exceeds a specified monetary threshold, the order is
shipped only after we have received verbal confirmation of the sale from the
cardholder. Customers generally receive orders within three to five business
days after shipping. Currently, approximately 99% of all shipments are made
through United Parcel Service or the United States Postal Service. A shipping
and handling fee is charged on each customer order, based on the total price of
the order. Our parent's fulfillment systems automatically determine the most
cost effective method of shipping each order.

TECHNOLOGY AND SYSTEMS

We have implemented a broad array of site management, customer service,
transaction-processing and fulfillment services and systems using a combination
of our own proprietary technologies and commercially available licensed
technologies.

Our product order processing is primarily handled by a mature, widely used
software application licensed by our parent, called MACS II, and by a software
application licensed by us called WebOrder that:

- accept and validate orders;

- organize and manage orders with suppliers;

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<PAGE>
- receive product and assign it to customer orders;

- manage shipments; and

- integrate inventory management, purchasing and accounting.

MACS II and WebOrder are licensed from and supported by their developer,
Smith-Gardner Associates. These systems handle multiple shipment methods, credit
card transaction processing and automated customer communication. They allow the
customer to choose whether to receive single or multiple shipments based on
availability.

Our community services, other than gURLmAIL and gURLpages, are primarily run
on internally-developed database applications. The gURLmAIL and gURLpages
operating technology and software were developed and are operated and supported
by Lycos, Inc. Our various Internet applications run on both the UNIX and
Windows NT operating systems, on computers located both in our offices and in
the facility of a third party hosting service. AT&T and Cable & Wireless plc
currently provide our Internet connection. We have contracted with Lycos, AT&T
and Cable & Wireless plc for these services. These contracts have 12 to 36 month
terms.

In response to capacity concerns and site development needs, in fiscal 1998,
we increased the number of computers that run our Web sites from three to ten
and installed a considerably more powerful system for online catalog navigation
functions. We currently run our sites on approximately 10 computers. We intend
to continue to invest in technologies that will handle growth in traffic and
e-commerce and Web site infrastructure to enhance the functionality of our
sites.

CUSTOMER SERVICE

We employ Web-savvy customer service representatives who assist our
electronic commerce customers by e-mail and telephone seven days a week. We
support our community offerings principally by e-mail. We set internal goals of
returning customer e-mail within 24 hours of receipt. Lycos Inc. provides
customer service for both gURLmAIL and gURLpages.

In addition, our parent handles routine customer service issues, such as
order tracking. Our parent maintains three call centers, with more than 300
stations. We provide e-mail based customer service for our parent's print
catalogs.

COMPETITION

E-COMMERCE. The apparel, footwear, accessories and home furnishings
industries and the athletic goods and soccer specialty markets are highly
competitive. We expect competition in these markets to increase. Our dELiAs.cOm,
contentsonline.com, discountdomain.com, droog.com, StorybookHeirlooms.com and
dotdotdash.com sites compete with traditional department store retailers, as
well as specialty apparel and accessory retailers, for teen and young-adult
customers. We also compete with other catalog retailers and direct marketers,
some of which may specifically target our customers. TSISoccer.com competes with
several other soccer specialty direct marketers and soccer specialty retailers,
as well as general athletic merchandise retailers.

There are few barriers to entry in the Generation Y apparel and accessories
market and in the soccer specialty market. We believe that our recent success in
the Generation Y apparel market has attracted the attention of other direct
marketers, as well as store-based retailers and apparel manufacturers, some of
which have entered or are likely to enter this market. In addition, competitors
could enter into exclusive distribution arrangements with our vendors and deny
us access to their products. Increased competition could result in pricing
pressures, increased marketing expenditures and loss of market share, and could
have a material adverse effect on iTurf.

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INTERNET COMMUNITY SERVICES. The market for community services is highly
competitive, and we expect competition to continue to increase significantly.
There are no substantial barriers to entry in these markets. We compete with
many providers of community services, including companies that attempt, as we
do, to target Generation Y consumers. In addition, high-traffic, mass-market Web
sites, such as the Regional Bell Operating Companies or internet service
providers such as Microsoft and America Online, currently offer and could
further develop or license the products and services we offer. They could take
actions that make it more difficult for consumers to use our services. This may
provide those companies with significant competitive advantages that could have
a material adverse effect on our business, results of operations and financial
condition.

A large number of sites and online services offer informational and
community features, such as news, stock quotes, sports coverage, Yellow Pages,
e-mail listings, chat services and bulletin board listings that are competitive
with the services we offer. These sites include Microsoft, AOL and other Web
navigation companies such as Yahoo!, Excite, Lycos and Infoseek. A number of
companies, including HotMail, which was recently acquired by Microsoft, offer
Web-based e-mail services similar to those we offer in tandem with larger
navigational sites and online services.

We also compete with traditional offline media such as television, radio and
print for a share of advertisers' total advertising budgets. We believe the
number of companies selling Web-based advertising and the available inventory of
advertising space have increased substantially during recent periods.

We believe that the principal competitive factors in our markets are:

- brand recognition;

- ease of use;

- comprehensiveness;

- quality of content and products;

- access to end users; and

- with respect to advertisers and sponsors, the number of users, duration
and frequency of visits and user demographics.

Competition among Internet navigational and informational services,
high-traffic Web sites and other media for advertising placements could result
in significant price competition and reductions in advertising revenue.

Many of our competitors, have significantly greater financial, technical,
marketing and distribution resources. In addition, providers of Internet tools
and services may be acquired by, receive investments from, or enter into other
commercial relationships with larger, well-established and well-financed
companies, such as Microsoft or AOL. Greater competition resulting from such
relationships could have a material adverse effect on our business, operating
results and financial condition.

EMPLOYEES

We currently employ approximately 130 persons who devote all or
substantially all of their time to our business. None of our employees are
represented by unions, and we consider relations with our employees to be good.

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LEGAL

iTurf is not involved in any legal proceeding that management believes would
have a material adverse effect on our business, results of operations or
financial condition.

The U.S. Congress recently enacted the Children's Online Privacy Protection
Act of 1998. This act generally:

- makes it unlawful for an operator of a Web site or online service directed
to children under age 13, and any operator that has actual knowledge that
it is collecting personal information from such a child, to collect
personal information from the child without having obtained verifiable
parental consent; and

- prohibits conditioning the participation of a child under age 13 in a
game, the offering of a prize, or another activity on the child disclosing
more personal information than is reasonably necessary to participate in
such activity.

The Federal Trade Commission recently promulgated final regulations
interpreting this act. iTurf depends on collecting personal information from its
customers in its businesses. We believe that the regulations under this act will
make it more difficult for us to collect personal information from some of our
customers. iTurf is extremely respectful of the privacy of its customers,
members, users and subscribers. It does not currently rent or otherwise provide
its customer lists to third parties, except to our parent.

FACILITIES

Our principal offices are located at 435 Hudson Street, New York, New York
10014. We share them with our parent, which leases the property under a lease
that expires in 2007, pursuant to a space-sharing arrangement with our parent.
We also lease approximately 15,000 square feet of office space at One Battery
Park Plaza, New York, New York 10004 on a short-term basis. As we expand, we
expect that suitable additional space will be available on commercially
reasonable terms, although no assurance can be made in this regard. We do not
own any real estate.

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MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

The executive officers, directors and key employees of iTurf, their ages as
of November 1, 1999, and their respective positions with iTurf are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- -------- -----------
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS
Stephen I. Kahn......................... 34 President, Chief Executive Officer and
Chairman of the Board of Directors
Dennis Goldstein........................ 34 Chief Financial Officer and Treasurer
Alex S. Navarro......................... 30 Chief Operating Officer and Secretary
Oliver Sharp, Ph.D...................... 32 Chief Technology Officer
Renny Gleeson........................... 31 Senior Vice President--Marketing
Christopher C. Edgar.................... 34 Vice President and Director
Evan Guillemin.......................... 34 Vice President and Director
Beth Vanderslice........................ 35 Director
Thomas R. Evans......................... 44 Director
Martin D. Levine........................ 52 Director

KEY EMPLOYEES
Esther Drill............................ 30 Executive Editor--gURL
Heather McDonald........................ 29 Senior Producer--gURL
Catherine Mouttet....................... 28 Art Director--E-Commerce
Rebecca Odes............................ 31 Creative Director--gURL
</TABLE>

STEPHEN I. KAHN has served as Chairman of the board of directors, President
and Chief Executive Officer of iTurf since its incorporation in 1997. He has
served as Chairman of the board of directors and Chief Executive Officer of our
parent since October 1996, and until recently served as its President. He was
the President and Chief Executive Officer of dELiA*s LLC (the predecessor of our
parent) and a member of the board of managers of dELiA*s LLC from the time he
co-founded our parent's business in 1993 until October 1996. Mr. Kahn is a
director of Happy Kids Inc., a publicly-traded designer and marketer of
custom-designed, licensed and branded children's apparel, and Danier Leather
Inc., a publicly-traded integrated designer, manufacturer and retailer of
high-quality, high-fashion leather and suede clothing.

DENNIS GOLDSTEIN has served as Chief Financial Officer and Treasurer of
iTurf since January 1999. Prior to joining iTurf, Mr. Goldstein was the Vice
President for Corporate Development of Paulaur Corporation, a manufacturing
firm. From 1992 to 1997, he worked in a variety of capacities for Boston
Consulting Group, Inc., a management consulting firm. From 1990 to 1992, Mr.
Goldstein attended the Stanford University Graduate School of Business,
receiving an MBA. From 1987 to 1990, he was a financial analyst with Morgan
Stanley & Co., Incorporated, an investment banking firm.

ALEX S. NAVARRO has served as Chief Operating Officer and Secretary of iTurf
since December 1998. He previously served as Senior Vice President in charge of
iTurf's operations from December 1997 to December 1998. Mr. Navarro served as
Senior Vice President--Development and Legal Affairs, General Counsel and
Secretary of our parent from April 1997 to July 1999, and since July, 1999 has
served as Counselor at Law for our parent. Prior to joining our parent,
Mr. Navarro was associated with the law firm of Proskauer Rose LLP from 1994
until 1997.

OLIVER SHARP, PH.D. has served as Chief Technology Officer of iTurf since
February 1999. He previously worked for Microsoft Corporation, a computer
software company. He held a variety of

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positions with Microsoft, and most recently was the assistant to the chief
executive officer's technical assistant. From 1995 to 1996, he was a principal
in Colusa Software, a software developer, which was subsequently acquired by
Microsoft. From 1989 to 1995, he was a researcher in the physics department of
Lawrence Livermore National Laboratory.

RENNY GLEESON has served as Senior Vice President--Marketing of iTurf since
January 1999. Prior to joining iTurf, Mr. Gleeson served as Creative Director of
Darwin Digital, the interactive advertising unit of Saatchi and Saatchi
Advertising from 1997 until 1999. From 1996 to 1997, he was the Art Director for
CyberSites, Inc., a developer of CD-ROMs and on-line games. From 1994 to 1996,
he was the studio manager for the Robert Gober Company, a contemporary sculpture
firm. Prior to that, he worked in the high yield trading department of Bear
Stearns Inc., an investment banking firm.

CHRISTOPHER C. EDGAR has served as a Vice President and as a member of the
board of directors of iTurf since iTurf's incorporation in 1997. Mr. Edgar has
served as Executive Vice President, Chief Operating Officer and a Director of
our parent since October 1996, and was recently elected Vice Chairman of its
board of directors. He was Executive Vice President of dELiA*s LLC and a member
of the board of managers of dELiA*s LLC from the time he co-founded our parent's
business in 1993 until October 1996. Mr. Edgar oversees catalog publishing,
marketing, merchandising and inventory management at our parent.

EVAN GUILLEMIN has served as a Vice President of iTurf since January 1999
and joined the board of directors of iTurf in January 1999. Mr. Guillemin
previously served as Chief Financial Officer of iTurf from 1997 to 1999. Mr.
Guillemin has served as Chief Financial Officer and Treasurer of our parent
since July 1996 and was recently elected President of our parent. Prior to
joining our parent he was employed by K-III Communications Corporation, a media
investment company, first as an associate with and later as a director of
acquisitions. From 1992 to 1994, he was executive vice president of Observer
Publications of The New York Observer Co., with responsibility for the sales,
marketing and finance for that company's regional newspaper group.

BETH VANDERSLICE has served as a director of iTurf since the completion of
our initial public offering. Ms. Vanderslice became Vice President, General
Manager of Lycos, Inc., a provider of Web navigational community and commerce
services, in 1999. From 1995 to 1999, Ms. Vanderslice worked for Wired Ventures,
Inc., a provider of Web-based products and services, including Hot Bot, Hot
Wired and Wired News, as Vice President of Marketing and then President. Prior
to joining Wired in March 1995, Ms. Vanderslice was a Vice President from 1994
to 1995 at H.W. Jesse & Co., an investment banking and business strategy
consulting firm in San Francisco. From 1992 to 1994, she was a Principal at the
investment banking firm of Sterling Payet Company.

THOMAS R. EVANS has served as a director of iTurf since the completion of
our initial public offering. Mr. Evans has served as the Chief Executive Officer
and President of Geocities, the world's largest and one of the fastest-growing
communities of personal Web sites on the Internet, since April 1998. From 1991
to April 1998, Mr. Evans served as President and Publisher of U.S. NEWS & WORLD
REPORT, a magazine that reports on domestic and international current events.
From January 1997 to April 1998, Mr. Evans also served as President and
Publisher of THE ATLANTIC MONTHLY, a magazine that features articles on art,
literature, politics and technology. In addition, from May 1995 to April 1998,
Mr. Evans also served as President and Publisher of FAST COMPANY, a magazine
that showcases business people and ideas.

MARTIN D. LEVINE has served as a director of iTurf since September 1999.
Mr. Levine is the president of MarketSource Corporation, a privately-held
marketing services company and has served in that capacity since 1974.
Mr. Levine also served as president of Taponline, prior to our acquisition of
that company in September 1999.

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ESTHER DRILL, a co-founder of gURL Interactive, served as Executive Editor
of gURL, for gURL Interactive from 1996 to 1997, and then for iTurf since we
acquired gURL Interactive in December 1997. From 1995 to 1997, she was enrolled
in the Interactive Telecommunications Program at New York University. From 1993
to 1995, she worked as an assistant to faculty members of the Kennedy School of
Government at Harvard University.

HEATHER MCDONALD, a co-founder of gURL Interactive, served as Senior
Producer of gURL, for gURL Interactive from 1996 to 1997, and then for iTurf
since our acquisition of gURL Interactive in December 1997. From 1995 to 1997,
she was enrolled in the Interactive Telecommunications Program at New York
University. From 1993 to 1995, she worked as an assistant producer for 3D0
Company, a developer of CD-ROM games.

CATHERINE MOUTTET has served as iTurf's art director for e-commerce,
including dELiAs.cOm, since 1998. She worked as an independent art designer from
1997 to 1998. From 1996 to 1997, she worked as a senior web designer for
Concrete Media, a Web design firm, and from 1994 to 1995, she was the art
director of FashionInternet.com, a Web site devoted to fashion.

REBECCA ODES, a co-founder of gURL Interactive, has served as Creative
Director of gURL, for gURL Interactive from 1996 to 1997, and then for iTurf
since our acquisition of gURL Interactive in December 1997. From 1995 to 1997,
she was enrolled in the Interactive Telecommunications Program at New York
University. From 1993 to 1995, she worked for or was engaged in a freelance
capacity as a designer and illustrator for SonicNet, Razorfish, PBS,
Kinderactive and X-Girl.

BOARD COMMITTEES

Our board of directors has established an audit committee and a compensation
committee. The audit committee and the compensation committee are each comprised
of two of our independent directors who are not affiliated with iTurf or our
parent. The audit committee is responsible for reviewing our audited financial
statements and accounting practices, and considering and recommending the
employment of, and approving the fee arrangements with, independent accountants
for both audit functions and for advisory and other consulting services. The
compensation committee will review and approve the compensation and benefits for
our key executive officers, administer our employee benefit plans and make
recommendations to the board of directors regarding such matters. See "--1999
Stock Incentive Plan."

DIRECTOR COMPENSATION

Non-employee directors are paid $2,000 for each board of directors meeting
attended and are entitled to reimbursement of all reasonable out-of-pocket
expenses incurred in connection with their attendance at full board and board
committee meetings.

Under our stock incentive plan, each non-employee director is granted an
option to purchase 50,000 shares of Class A common stock with an exercise price
equal to the fair market value of the Class A common stock on the date of grant.
All options granted to non-employee directors become exercisable with respect to
12.5% of the covered shares on each of the first eight six-month anniversaries
of the date of grant, assuming the non-employee director is a director on those
dates. Those options generally will cease to be exercisable 10 years from the
date of grant. Upon a "change of control" of iTurf, all options that have not
yet expired will automatically become exercisable. Directors who are affiliates
of our parent are not compensated for service as directors of iTurf, so long as
our parent beneficially owns at least 20% of our outstanding voting securities.

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to our initial public offering, our board of directors did not have a
compensation committee, and all compensation decisions relating to our executive
officers were made by the full board of directors. Since the closing of our
initial public offering, the compensation committee has made all compensation
decisions regarding our executive officers. No interlocking relationship exists
between the compensation committee and the board of directors or compensation
committee of any other company, nor has any such interlocking relationships
existed in the past. Currently, Stephen I. Kahn serves on the compensation
commitee of our parent's board of directors. In fiscal 1998, Christopher C.
Edgar was a member of our parent's board of directors.

EXECUTIVE COMPENSATION

No officer or employee of iTurf received total compensation, whether paid,
deferred or accrued, in excess of $100,000 in the year ended January 31, 1999
for services rendered to iTurf. During the year ended January 31, 1999, our
Chief Executive Officer, Stephen I. Kahn, received a salary of $100,000 from our
parent in his capacity as President, Chief Executive Officer and Chairman of the
board of directors of that company and options to purchase 376,000 shares of our
parent's common stock. During the year ended January 31, 1998, Mr. Kahn received
a salary of $100,000 from our parent and an option to purchase 80,000 shares of
our parent's common stock. He did not receive any other compensation from our
parent during such periods except for perquisites and other personal benefits,
securities or property, which, in the aggregate, did not exceed 10% of his total
of annual salary and bonus during any applicable year. In fiscal 1998, iTurf
granted Mr. Kahn an option to purchase 503,125 shares of our Class A common
stock at an exercise price of $9.36 per share. This option constituted 35.4% of
the options granted to iTurf employees in fiscal 1998. The option expires on
January 1, 2009. The potential realizable value of this option, assuming the
market price of iTurf common stock appreciates in value from the date of grant
to the end of the option term at 5% or 10% annually, is $2,962,000 or
$7,505,000, respectively. Mr. Kahn did not exercise any options in fiscal 1998.

EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL ARRANGEMENTS

Messrs. Goldstein, Gleeson, Kahn, Navarro and Sharp have entered into
three-year agreements with iTurf providing for the continuation of their
respective employment in their current positions at minimum salaries of
$125,000, $100,000, $100,000, $125,000 and $125,000, respectively, a year plus
increases in salary and bonuses as the board of directors may from time to time
approve. If one of these executives dies, or, as a result of disability, is
unable to perform substantially all his duties for a period of nine consecutive
months, iTurf may terminate his employment not earlier than 30 days and not
later than 90 days after the expiration of the nine-month period, in which event
the executive or his heirs or estate will be entitled to his salary for the
remainder of the term of the agreement.

Under our stock incentive plan, the vesting of all employee stock options
will be accelerated in some circumstances upon changes of control of iTurf. See
"--1999 Stock Incentive Plan--Change of Control."

1999 STOCK INCENTIVE PLAN

The following description of our stock incentive plan is a summary of the
material terms of the plan. The stock incentive plan is filed as an exhibit to
the registration statement of which this prospectus is a part. As of
October 30, 1999, we have granted options to purchase an aggregate 2,915,663
shares of Class A common stock. Christopher C. Edgar has been granted 86,250
options. Dennis Goldstein has been granted 215,625 options. Renny Gleeson has
been granted 143,750

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options. Evan Guillemin has been granted 86,250 options. Stephen I. Kahn has
been granted 603,125 options. Alex S. Navarro has been granted 179,688 options.
Oliver Sharp has been granted 258,750 options. Each of these options vests over
four years in six-month intervals and expires ten years after the date of grant.
The exercise price per share for each of these options is $9.36 (except with
respect to the options granted to Mr. Sharp and 100,000 of the options granted
to Mr. Kahn, as to which the exercise price is $22.00 per share).

PURPOSE. The purpose of the stock incentive plan is to increase the
profitability and value of iTurf by enabling it to offer stock-based and other
equity interests in iTurf to employees, consultants and non-employee directors
to raise the level of stock ownership by such persons, thereby:

- enhancing iTurf's ability to attract, retain and reward such individuals;
and

- strengthening the mutuality of interest between such individuals and
iTurf's stockholders.

ADMINISTRATION. The stock incentive plan is administered by the
compensation committee of our board of directors. This committee is intended to
be comprised solely of two or more directors who qualify as "outside directors"
under Section 162(m) of the Internal Revenue Code of 1986 and "non-employee
directors" under Rule 16b-3 of the Securities Exchange Act of 1934. The
compensation committee has authority and discretion to determine those employees
and consultants of iTurf and its subsidiaries eligible to receive awards and the
amount and type of awards.

AVAILABLE SHARES AND OTHER UNITS.

- MAXIMUM NUMBER OF SHARES AVAILABLE UNDER THE PLAN. A maximum of 4,050,000
shares of Class A common stock, subject to adjustment, may be issued or
used for reference purposes with respect to stock appreciation rights
under the plan.

- INDIVIDUAL LIMITS UNDER THE PLAN. The maximum number of shares of Class A
common stock subject to each stock option or stock appreciation right that
may be granted to any individual under the plan is 750,000 for each of our
fiscal years during the term of the plan. If a stock appreciation right is
granted in tandem with a stock option, it will apply against the
individual limits for both stock options and stock appreciation rights,
but only once against the maximum number of shares available under the
plan.

- TERMINATION, CANCELLATION OR EXPIRATION OF AN AWARD. The unissued shares
of Class A common stock subject to terminated, cancelled or expired awards
will again be available for awards under the plan, but will count against
the individual specified limits for the applicable fiscal year.

- CHANGE IN ITURF'S BUSINESS OR CAPITAL STRUCTURE. The compensation
committee may make appropriate adjustments to the number and kind of
shares available for awards and the terms of outstanding awards under the
plan to reflect any change affecting our capital structure or business.

TYPES OF AWARDS. The stock incentive plan provides for the grant of any or
all of the types of awards listed below to eligible employees and consultants of
iTurf and its subsidiaries. In addition, the plan provides for one-time,
non-discretionary awards of stock options to non-employee directors of iTurf.
Awards may be granted singly, in combination, or in tandem, as determined by the
compensation committee.

STOCK OPTIONS. The compensation committee may grant awards in the form of
options to purchase shares of iTurf's Class A common stock. In general, the
following apply to all options granted:

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- options may be in the form of incentive stock options or non-qualified
stock options;

- consultants are not eligible to receive incentive stock options;

- the compensation committee will determine the number of shares subject to
each option, the term of the option, the exercise price per share of stock
covered by the option, the vesting schedule and the other material terms
of the option;

- the term of an incentive stock option may not exceed ten years, but the
term of an incentive stock option granted to a ten percent stockholder of
iTurf may not exceed five years;

- no option may be granted to a ten percent stockholder of iTurf at less
than 110% of fair market value, except for modifications of the option
deemed a new issuance under the Internal Revenue Code;

- the option price may be paid by a participant in cash, in shares of Class
A common stock owned by the participant free and clear of any liens and
encumbrances, in shares of restricted stock under the stock incentive plan
valued at the fair market value on the payment date as determined by the
compensation committee, by a reduction in the number of shares of Class A
common stock issuable upon exercise of the option with approval of the
compensation committee; and

- options under the stock incentive plan are subject to acceleration of
vesting or immediate termination upon termination of employment in limited
circumstances.

In addition, if shares of Class A common stock are exchanged by a
participant as full or partial payment to iTurf, or for payment of withholding
taxes, in connection with the exercise of a stock option or the number of shares
of Class A common stock otherwise deliverable is reduced for payment of
withholding taxes, such exchanged or reduced shares will again be available
under the Stock Incentive Plan.

RESTRICTED STOCK. The stock incentive plan authorizes the compensation
committee to award shares of stock that are deemed restricted pursuant to the
stock incentive plan to employees and consultants of iTurf and its subsidiaries.
Restricted stock under the stock incentive plan is subject to the conditions and
restrictions generally applicable to restricted stock, and those specifically
provided in the recipient's restricted stock award agreement. In general:

- unless otherwise determined by the compensation committee at grant,
payment of dividends, if any, will be deferred until the date that the
relevant share of restricted stock vests; and

- recipients of restricted stock are required to enter into a restricted
stock award agreement with iTurf that states the restrictions on the
shares and the date or criteria on which the restrictions will lapse. The
compensation committee may provide for the lapse of the restrictions in
installments, or may accelerate or waive the restrictions.

Upon the award of restricted stock, the recipient has all the rights of a
stockholder with respect to the shares, unless otherwise specified by the
compensation committee at the time of grant.

STOCK APPRECIATION RIGHTS. The stock incentive plan authorizes the
compensation committee to grant stock appreciation rights either in tandem with
a stock option (called tandem stock appreciation rights) or independent of a
stock option (referred to as non-tandem stock appreciation rights) to employees
and consultants of iTurf. A stock appreciation right is a right to receive a
payment either in cash or Class A common stock. In general:

- Payments on stock appreciation rights shall be equal in value to the
excess of the fair market value of a share of Class A common stock on the
date of exercise, over the reference price per share of Class A common
stock established in connection with the grant of the stock

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appreciation right. The reference price per share covered by an stock
appreciation right will be the per share exercise price of the related
option in the case of a tandem stock appreciation right and will be the
per share fair market value of the Class A common stock on the date of
grant in the case of a non-tandem stock appreciation right.

- Stock appreciation rights are subject to the same exceptions that apply to
stock options.

Stock appreciation rights issued in tandem with a stock option generally:

- may be granted at the time of the grant of the related stock option or, if
the related stock option is a non-qualified stock option, at any time
thereafter during the term of the stock option;

- may be exercised at and only at the times and to the extent the related
stock option is exercisable;

- are exercised by surrendering the same portion of the related option;

- expire upon the termination of the related stock option; and

- will not be granted to consultants in connection with all or part of an
incentive stock option.

Stock appreciation rights not issued in tandem with a stock option generally:

- will be exercisable as provided by the compensation committee;

- will have terms and conditions as the compensation committee may
determine;

- may have a term no longer than ten years from their date of grant; and

- are subject to acceleration of vesting or immediate termination upon
termination of employment.

AWARDS TO NON-EMPLOYEE DIRECTORS. In the future, our non-employee directors
will be eligible for option grants in some circumstances. See "--Director
Compensation."

CHANGE OF CONTROL. Unless determined otherwise by the compensation
committee at the time of grant, generally upon a change of control of iTurf, all
vesting and forfeiture conditions, restrictions and limitations in effect with
respect to any outstanding award made under the stock incentive plan will
immediately lapse, and any unvested awards will automatically become 100%
vested. However, stock options will not be accelerated upon a change of control
of iTurf if the compensation committee deems it reasonable. In that case,
options may be assumed by the controlling entity or new rights substituted
therefor by the controlling entity. The compensation committee may also provide
for accelerated vesting of an award, other than a grant to non-employee
directors, upon a termination of employment during the 180-day period prior to a
change of control of iTurf.

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TRANSACTIONS WITH OUR PARENT

CERTAIN HISTORICAL RELATIONSHIPS

As a subsidiary of our parent, we receive various services from our parent,
including fulfillment, warehousing, merchandising, inventory management,
customer service, creative, marketing, technical, human resources, finance,
accounting, administrative and legal services. Prior to the closing of our
initial public offering, our financial statements reflected allocations for
these services rendered by our parent to us. We believe those allocations were
made on a reasonable and consistent basis. However, they are not necessarily
indicative of, nor is it practicable for us to estimate, the level of expenses
we would have otherwise incurred had we operated as a separate, stand-alone
company.

Through its distribution facilities, our parent and its other subsidiaries
accounted for just under 100% of iTurf's purchases of inventory during fiscal
1998. We also relied on our parent to provide us with financing for our cash
flows. Our cash flows for the periods prior to the closing of our initial public
offering are therefore not necessarily indicative of the cash flows that would
have resulted had we been operating as an independent company. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

PURCHASE OF PARENT COMMON STOCK

Through a wholly-owned subsidiary, we purchased from our parent 551,046
shares of common stock of our parent for approximately $32.18 per share.

PURCHASE OF TSISOCCER.COM DOMAIN NAME

Concurrently with the closing of our initial public offering, in accordance
with the TSISoccer.com asset transfer agreement, dated April 1, 1999, between us
and TSI Soccer Corporation, a wholly-owned subsidiary of our parent, we acquired
the TSISoccer.com domain name from TSI Soccer Corporation for $25,000 of Class A
common stock, valued at the initial public offering price per share (1,136
shares).

INTERCOMPANY AGREEMENTS

We entered into several intercompany agreements with our parent prior to the
closing of our initial public offering. We have summarized below the material
terms of all of these agreements. These agreements were not negotiated on an
arms'-length basis, however, we believe the terms of these agreements are no
less favorable to us than those that could have been obtained from an
unaffiliated third party. We believe that had the intercompany agreements been
in effect during the historical periods prior to the closing of our initial
public offering presented in the iTurf financial statements, they would not have
had a material effect on our results of operations. The material terms of the
intercompany agreements cannot be amended or waived without the approval of a
majority of our disinterested directors. Our bylaws also provide that we will
not enter into new material agreements with our parent unless those agreements
are approved by a majority of our directors who are not affiliated with our
parent. This provision can only be amended by a majority of our directors who
are not affiliated with our parent. The intercompany agreements do not have
fixed terms, but our parent can terminate each agreement if any person, other
than our parent or an affiliate or strategic partner of our parent, acquires 20%
or more of the voting control of iTurf, or upon defaults by iTurf.

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TRADEMARK LICENSE AND CUSTOMER LIST AGREEMENT, INCLUDING NONCOMPETITION
AGREEMENTS

We have the exclusive right to use our parent's trademarks in connection
with the sale of goods and services on the Internet. We pay our parent a royalty
equal to 5% of our net sales from iTurf Web sites bearing a trademark licensed
from our parent. Net sales by sites in the iTurf network not bearing a trademark
licensed from our parent do not generate a royalty payable to our parent unless
sales of dELiA*s-sourced goods on the site exceed 50% of its total net sales. On
non-licensed sites where sales of dELiA*s-sourced goods exceed 50% of total net
sales, iTurf will pay to our parent the 5% royalty based on the percentage of
such site's net sales that are dELiA*s-sourced. On a royalty-free basis, we will
share our customer lists with our parent, and our parent will share its customer
lists with us.

Our parent has agreed not to enter into an Internet business that targets
Generation Y without first offering to sell that business to iTurf. In addition,
if our parent makes an acquisition that includes an Internet business that
targets Generation Y, it must offer to sell that business to iTurf. These
obligations terminate:

- six months after the trademark license terminates if our parent terminates
the license after the acquisition by a third party of 35% or more of the
voting control of iTurf with no other person owning a greater percentage,

- one year after the trademark license terminates if our parent terminates
the license after a tax-free spin-off or other public sale or distribution
of our voting securities,

- two years after the trademark license terminates if our parent terminates
the license after the acquisition by a third party of less than 35% but
more than 20% of the voting control of iTurf, or

- when the trademark license terminates for any other reason.

We have agreed not to enter into a print catalog or retail store business
without first offering to sell that business to our parent. In addition, if we
make an acquisition that includes a paper catalog or retail store business, we
will offer to sell that business to our parent. These obligations will terminate
two years after termination of the trademark license if our parent terminates
the trademark license due to our material breach, and otherwise will terminate
upon termination of the trademark license.

INTERCOMPANY SERVICES AGREEMENT

Since the closing of our initial public offering, our parent has agreed to
provide some services to us, including corporate services, fulfillment services,
inventory supply services, advertising services and space-sharing. Our parent's
obligations to deliver those services will terminate if and when the trademark
license and customer list agreement is terminated.

CORPORATE SERVICES. Our parent has agreed to provide all of the services it
provided to us prior to the closing of our initial public offering, other than
warehouse and fulfillment services, such as merchandising, inventory management,
customer service, creative, marketing, technical, human resources, finance,
accounting, administrative, legal and other services, as well as those services
iTurf requires by virtue of its status as an independent public company. Our
parent provides these services to us at 105% of its cost.

FULFILLMENT SERVICES. Our parent has agreed to provide warehousing and
fulfillment services, including receiving, quality control, storage, picking,
packing and shipping of inventory and processing of customer returns. We pay our
parent an amount equal to its average cost per package shipped multiplied by the
product of the number of packages shipped by us and 105%, taking into

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account all of our parent's warehousing and fulfillment costs, including rent,
depreciation and operating expenses.

INVENTORY SUPPLY. Our parent has agreed to supply inventory to iTurf. We
pay our parent an amount equal to the lesser of

- 105% of our parent's cost for the inventory, including cost of freight and
all direct costs charged to our parent by its suppliers, and

- the best price at which our parent could resell those products to a third
party.

In addition, our parent purchases from us products returned by our customers
at the price that we paid for such products from our parent, decreased by the
amount of any reserves taken by our parent in connection with those products.

We also have the right to purchase from our parent up to $300,000 annually
of closeout inventory, generally at prices discounted from our parent's price.

ADVERTISING. Our parent will provide us with advertising space in its print
catalogs at a cost to us of $40 per 1,000 catalogs distributed. We are required
to purchase from our parent minimum amounts of advertising space in at least 50%
of all of our parent's catalogs distributed each year. The amount of advertising
guaranteed in each catalog is materially greater than the amount of advertising
included in our parent's catalogs over the historical periods presented in this
prospectus. If our parent provides less advertising space than the amount
guaranteed, then iTurf will have no obligation to pay for the amount of
advertising actually provided.

SPACE-SHARING. Our parent has agreed to permit us to use a portion of its
offices that we mutually agree upon. Our cost for this space is the lesser of

- the prevailing market rate for such space and

- the highest rate then being paid by our parent for comparable space in the
metropolitan area in which such space is located.

CUSTOMER SERVICE AGREEMENT

We have agreed to provide to our parent e-mail-based customer service in
respect of those of our parent's catalogs corresponding to trademarks we license
from our parent.

INTERCOMPANY INDEMNIFICATION AGREEMENT

We have agreed to indemnify our parent for liabilities in respect of our
businesses, and our parent has agreed to indemnify us for liabilities in respect
of our parent's businesses and tax and pension-related liabilities resulting
from our inclusion in our parent's consolidated tax group. Our parent will also
indemnify us for certain tax liabilities arising out of our purchase of its
common stock. See "Risk Factors--We may be contingently liable for our parent's
obligations."

ITURF COMMON STOCK REGISTRATION RIGHTS AGREEMENT

We entered into a registration rights agreement with our parent prior to the
closing of our initial public offering that covers the iTurf common stock owned
by dELiA*s. Under that agreement, at any time after October 6, 1999, our parent
may demand that we file a registration statement under the Securities Act
covering all or a portion of our securities held by our parent, its affiliates
and their permitted transferees. However, the securities to be registered must
have a reasonably anticipated aggregate public offering price of at least $3.0
million. Our parent can effect no more than one demand registration per year.

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If and when we become eligible to utilize a Form S-3 registration statement
to register an offering of our securities, our parent may request that we file a
registration statement on Form S-3 covering all or a portion of our securities
held by our parent, its affiliates and their permitted transferees, provided
that the aggregate public offering price is at least $1.0 million. Our parent
can request one S-3 registration per year.

These registration rights are limited by iTurf's right to delay the filing
of a registration statement in some circumstances. iTurf can only cause a delay,
not more than once in any 12-month period and for not more than 120 days.

In addition, our parent has registration rights that apply if we propose to
register any Class A common stock under the Securities Act, other than pursuant
to the registration rights noted above. In that case, our parent may require us
to include all or a portion of our securities it owns in such registration.
However, the managing underwriter, if any, of any offering will have limited
rights to restrict the number of registrable securities proposed to be included
in the registration. The registration statement in which this prospectus is
included includes shares owned by our parent pursuant to these "piggyback"
rights under that agreement.

We bear all registration expenses incurred in connection with these
registrations. Our parent pays all underwriting discounts, selling commissions
and stock transfer taxes applicable to the sale of iTurf securities owned by it.

The registration rights of our parent under the registration rights
agreement will terminate when our parent may sell all its shares in a
three-month period under Rule 144 under the Securities Act.

DELIA*S COMMON STOCK REGISTRATION RIGHTS AGREEMENT

We entered into another registration rights agreement with our parent at the
closing of our initial public offering relating to the shares of our parent's
common stock that we purchased with the net proceeds of that offering. Under
that agreement, at any time after October 6, 1999, we may demand that our parent
file a registration statement under the Securities Act covering all or a portion
of the securities of our parent held by us, our affiliates and our permitted
transferees. However, the securities to be registered must have a reasonably
anticipated aggregate public offering price of at least $3.0 million. We can
effect no more than one demand registration per year.

If our parent is eligible to utilize a Form S-3 registration statement to
register an offering of its securities, we may request that our parent file a
registration statement on Form S-3 covering all or a portion of the securities
of our parent held by us, our affiliates and our permitted transferees, provided
that the aggregate public offering price is at least $1.0 million. We can
request one S-3 Registration per year.

These registration rights are subject to our parent's right to delay the
filing of a registration statement in some circumstances. Our parent can cause a
delay not more than once in any 12-month period and for not more than 120 days.

In addition, we have registration rights that apply if our parent proposes
to register any of its common stock under the Securities Act, other than
pursuant to the registration rights noted above. In that case, we may require
our parent to include all or a portion of its securities that we own in the
registration. However, the managing underwriter, if any, of any such offering
will have limited rights to restrict the number of registrable securities
proposed to be included in the registration.

We bear our pro-rata share of all registration expenses incurred in
connection with these registrations, including all underwriting discounts,
selling commissions and stock transfer taxes applicable to the sale of our
parent's securities owned by us.

Our registration rights under the dELiA*s common stock registration rights
agreement will terminate when we may sell all our shares in a three-month period
under Rule 144 under the Securities Act.

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<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

dELiA*s Inc. beneficially owns all of the shares of our Class B common stock
outstanding as of the date of this prospectus. Following the completion of this
offering, dELiA*s Inc. will continue to beneficially own 100% of the Class B
common stock and, accordingly, will hold approximately 66.1% of the economic
interest in iTurf. Such ownership also gives our parent approximately 92.1% of
the combined voting power of our outstanding common stock.

The following table sets forth information as of November 1, 1999 with
respect to the outstanding securities of iTurf and our parent beneficially owned
by

- each person known by iTurf to be the beneficial owner of more than 5% of
the shares of any class of such securities,

- each of our directors individually,

- each of our named executive officers individually,

- all of our executive officers and directors as a group, and

- each selling stockholder.

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<PAGE>

<TABLE>
<CAPTION>
SHARES OF ITURF COMMON STOCK SHARES OF ITURF COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
BEFORE OFFERING(1) NUMBER OF AFTER OFFERING(1)
---------------------------------- SHARES OF ITURF ----------------------------------
PERCENTAGE VOTING COMMON PERCENTAGE VOTING
NUMBER OWNED POWER(2) STOCK OFFERED NUMBER OWNED POWER(2)
---------- ---------- -------- --------------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
FIVE PERCENT HOLDERS:
dELiA*s Inc.(3)....... 12,176,136 66.1% 92.1% 1,675,000 10,501,136 55.5% 88.2%
435 Hudson Street
New York, New York
10014
Martin D. Levine(4)... 1,229,922 6.5% 1.5% 1,229,922 -- -- --
c/o MarketSource
Corporation
10 Abeel Drive
Cranbury, NJ 08512
Gilder Gagnon Howe &
Co. LLC(5).......... -- -- -- -- -- -- --
1775 Broadway
New York, New York
10019
Geraldine -- -- -- -- -- -- --
Karetsky(6).........
1660 Silver King
Drive
Aspen, CO 81611
OTHER DIRECTORS AND
EXECUTIVE OFFICERS:
Stephen I. Kahn(7).... 12,656,527 66.6% 92.3% -- 10,656,527 56.1% 88.3%
Christopher C. 25,781 * * -- 25,781 * *
Edgar(8)............
Evan Guillemin(9)..... 20,781 * * -- 20,781 * *
Beth 6,250 * * -- 6,250 * *
Vanderslice(10).....
Thomas R. Evans(11)... 6,250 * * -- 6,250 * *
All directors and
executive officers
as a group
(10 persons)(12).... 14,127,833 73.6% 93.8% 1,229,922 12,897,911 56.8% 88.4%
OTHER SELLING
STOCKHOLDERS:
Jonathan L. Levine.... 531,644 2.8% * 531,644 -- -- --
Grantor Trust
u/t/a/d
January 1, 1995
Lauren E. Levine...... 531,644 2.8% * 531,644 -- -- --
Grantor Trust
u/t/a/d
January 1, 1995
David Bidwell......... 31,740 * * 31,740 -- -- --
Deborah Cheezum....... 31,740 * * 31,740 -- -- --
Donald Clifford....... 31,740 * * 31,740 -- -- --
Frank P. Morelli...... 31,740 * * 31,740 -- -- --
Derek S. White(13).... 158,700 * * 158,700 -- -- --
Anthony Fiore......... 71,414 * * 71,414 -- -- --
Kistler Joint 356,000 1.9% * 325,000 31,000 * *
Venture(3)..........

<CAPTION>
SHARES OF DELIA*S INC.
COMMON STOCK
BENEFICIALLY OWNED(1)
----------------------
PERCENTAGE
NUMBER OWNED
--------- ----------
<S> <C> <C>
FIVE PERCENT HOLDERS:
dELiA*s Inc.(3)....... -- --
435 Hudson Street
New York, New York
10014
Martin D. Levine(4)... -- --
c/o MarketSource
Corporation
10 Abeel Drive
Cranbury, NJ 08512
Gilder Gagnon Howe &
Co. LLC(5).......... 1,612,597 11.4%
1775 Broadway
New York, New York
10019
Geraldine 978,098 6.6%
Karetsky(6).........
1660 Silver King
Drive
Aspen, CO 81611
OTHER DIRECTORS AND
EXECUTIVE OFFICERS:
Stephen I. Kahn(7).... 6,227,470 41.4%
Christopher C. 708,163 4.7%
Edgar(8)............
Evan Guillemin(9)..... 128,942 *
Beth -- *
Vanderslice(10).....
Thomas R. Evans(11)... -- *
All directors and
executive officers
as a group
(10 persons)(12).... 7,124,525 46.1%
OTHER SELLING
STOCKHOLDERS:
Jonathan L. Levine.... -- --
Grantor Trust
u/t/a/d
January 1, 1995
Lauren E. Levine...... -- --
Grantor Trust
u/t/a/d
January 1, 1995
David Bidwell......... -- --
Deborah Cheezum....... -- --
Donald Clifford....... -- --
Frank P. Morelli...... -- --
Derek S. White(13).... -- --
Anthony Fiore......... -- --
Kistler Joint 15,000 *
Venture(3)..........
</TABLE>

- ------------------------------

* Less than 1%.

(1) Shares that an individual or group has the right to acquire within 60 days
of November 1, 1999 pursuant to the exercise of options, warrants or
conversion privileges are deemed to be outstanding for the purpose of
computing the percentage ownership of such person or group, but are not
deemed outstanding for the purpose of computing the percentage ownership of
any other person listed in this table. Except as indicated in the footnotes
to this table, iTurf believes that the listed stockholders have sole voting
and investment power with respect to all of the shares shown to be
beneficially owned by them, based on information provided to us by the
stockholders.

(2) Voting power reflects (i) the fact that each share of Class B common stock
is entitled to six votes, while Class A common stock is entitled to one vote
per share. See "Description of Capital Stock--Common Stock."

(3) Our parent has entered into a contract for the sale of 325,000 shares of
Class A common stock to Kistler Joint Venture. The sale is conditioned on
the registration of the stock for resale pursuant to this prospectus. For
purposes of this table, the sale is presumed to have occurred prior to this
offering.

(4) Based on a Schedule 13D filing made on September 13, 1999. Shares of iTurf
common stock beneficially owned includes: (i) 166,634 shares of our Class A
common stock directly owned by Mr. Levine; (ii) 531,644 shares of our

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<PAGE>

Class A common stock indirectly owned by Mr. Levine as trustee of the Lauren
E. Levine Grantor Trust, u/t/a/d January 1, 1995; and (iii) 531,644 shares
of Class A Common Stock indirectly owned by Mr. Levine as trustee of the
Jonathan L. Levine Grantor Trust, u/t/a/d January 1, 1995. Mr. Levine serves
on our board of directors. He is also the president and principal
stockholder of MarketSource Corporation. We have entered into material
advertising resale and promotional agreements with MarketSource Corporation.
See "Recent Developments."

(5) Based on a Schedule 13G filing made on February 16, 1999. According to the
filing, the shares of our parent's common stock are held in customer
accounts over which members and/or employees of Gilder Gagnon Howe & Co. LLC
have discretionary authority to dispose of and/or direct the disposition of
shares.

(6) Includes 7,356 shares of our parent's common stock owned by Ms. Karetsky, as
trustee, of which shares Ms. Karetsky has the shared power of disposition.
Geraldine Karetsky is the aunt of Stephen I. Kahn.

(7) Mr. Kahn is the President, Chief Executive Officer and Chairman of the Board
of our parent dELiA*s Inc. As such, he may be deemed to share voting power
with respect to all the shares of iTurf common stock owned by our parent.
Mr. Kahn expressly disclaims beneficial ownership of these shares, except to
the extent of his pecuniary interest therein. Shares of iTurf common stock
beneficially owned by Mr. Kahn include 75,390 shares issuable upon the
exercise of options. Shares of dELiA*s Inc. common stock beneficially owned
by Mr. Kahn includes 216,000 shares issuable upon the exercise of options
and 3,011,645 shares of common stock that Mr. Kahn has the sole power to
vote pursuant to a stockholders agreement.

(8) Shares of iTurf common stock beneficially owned includes 10,781 shares
issuable upon the exercise of options. Shares of dELiA*s Inc. common stock
benefically owned includes 162,000 shares issuable upon the exercise of
options.

(9) Shares of dELiA*s Inc. common stock beneficially owned includes 120,000
shares issuable upon the exercise of options. Shares of iTurf common stock
beneficially owned includes 10,781 shares issuable upon the exercise of
options.

(10) Shares of iTurf common stock beneficially owned includes 6,250 shares
issuable upon the exercise of options.

(11) Shares of iTurf common stock beneficially owned includes 6,250 shares
issuable upon the exercise of options.

(12) All directors, director designees and executive officers as a group
includes four executive officers who are not listed individually in the
table. The address for all directors and executive officers is c/o iTurf
Inc., 435 Hudson Street, New York, New York 10014.

(13) Mr. White has served as the president of our OnTap.com Inc. subsidiary
since September 1, 1999. Prior to our acquisition of that entity in
September 1, 1999, Mr. White served as its executive vice president since
its formation in 1997.

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<PAGE>
PLAN OF DISTRIBUTION

The shares of our Class A common stock covered by this prospectus may be
offered and sold from time to time by the selling stockholders. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. The selling stockholders may sell the
shares being offered hereby on The Nasdaq Stock Market, or otherwise, at prices
and under terms then prevailing or at prices related to the then current market
price or at negotiated prices. The shares may be sold by one or more of the
following means of distribution: (a) a block trade in which the broker-dealer so
engaged will attempt to sell such shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker-dealer as principal and resale by such broker-dealer for its own
account pursuant to this prospectus; (c) an over-the-counter distribution in
accordance with the rules of the Nasdaq Stock Market; (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and
(e) in privately negotiated transactions. To the extent required, this
prospectus may be amended and supplemented from time to time to describe a
specific plan of distribution. In connection with distributions of such shares
or otherwise, the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in short
sales of our Class A common stock in the course of hedging the positions they
assume with such selling stockholders. The selling stockholders may also sell
our Class A common stock short and redeliver the shares to close out such short
positions. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions which require
the delivery to such broker-dealer or other financial institution of shares of
our Class A common stock offered hereby, which shares such broker-dealer or
other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction). The selling stockholders
may also pledge such shares to a broker-dealer or other financial institution,
and, upon a default, such broker-dealer or other financial institution may
effect sales of the pledged shares pursuant to this prospectus (as supplemented
or amended to reflect such transaction). In addition, any shares of our Class A
common stock covered by this prospectus that qualify for sale pursuant to
Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus.

In effecting sales, brokers, dealers or agents engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling stockholders in amounts to be negotiated prior to the sale. Such brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales, and any such commissions, discounts or concessions may be deemed to be
underwriting discounts or commissions under the Securities Act. We will pay all
expenses incident to the offering and sale of the shares of the Class A common
stock covered by this prospectus to the public other than any commissions and
discounts of underwriters, dealers or agents and any transfer taxes and expenses
such as legal fees incurred by some of the selling stockholders.

In order to comply with the securities laws of certain states, if
applicable, the shares of our Class A common stock covered by this prospectus
must be sold in such jurisdictions only through registered or licensed brokers
or dealers. In addition, in certain states such shares may not be sold unless
they have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is
complied with.

We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares of our Class A
common stock covered by this prospectus in the market and to the activities of
the selling stockholders and their affiliates. In addition, we will make copies
of this prospectus available to the selling stockholders and have informed them
of the need for delivery of copies of this prospectus to purchasers at or prior
to the time of any sale of the shares of Class A common stock covered by this
prospectus. The selling

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<PAGE>
stockholders may indemnify any broker-dealer that participates in transactions
involving the sale of the shares of Class A common stock covered by this
prospectus against certain liabilities, including liabilities arising under the
Securities Act.

At the time a particular offer of shares of our Class A common stock covered
by this prospectus is made, if required, a prospectus supplement will be
distributed that will set forth the number of shares of our Class A common stock
covered by this prospectus being offered and the terms of the offering,
including the name of any underwriter, dealer or agent, the purchase price paid
by any underwriter, any discount, commission and other item constituting
compensation, any discount, commission or concession allowed or reallowed or
paid to any dealer, and the proposed selling price to the public.

The sale of shares of our Class A common stock covered by this prospectus by
the selling stockholders is subject to compliance by the selling stockholders
with certain contractual restrictions with the Company. There can be no
assurance that the selling stockholders will sell all or any of the shares of
common stock covered by this prospectus.

The selling stockholders may from time to time transfer shares to a donee,
successor or other person, other than for value, and such transfers will not be
made pursuant to this prospectus. To the extent agreed to by us, the prospectus
covers sales by such transferees. We have agreed to certain assignments of
registration rights under a registration rights agreement with some of the
selling stockholders.

We have agreed to indemnify the selling stockholders and any person
controlling a selling stockholder against certain liabilities, including
liabilities under the Securities Act. The selling stockholders have agreed to
indemnify the Company and certain related persons against certain liabilities,
including liabilities under the Securities Act.

The Company has agreed with the selling stockholders to keep the
registration statement of which this prospectus constitutes a part effective for
up to two years following the date on which the registration statement
containing this prospectus becomes effective.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 67,500,000 shares of Class A common
stock, par value $.01 per share, 12,500,000 shares of Class B common stock, par
value $.01 per share and 1,000,000 shares of preferred stock, par value $.01 per
share.

The following descriptions of our capital stock and selected provisions of
our Restated Certificate of Incorporation and bylaws are summaries.

COMMON STOCK

6,418,132 shares of Class A common stock are outstanding. 12,500,000 shares
are reserved for issuance upon conversion of Class B common stock into Class A
common stock. 12,500,000 shares of Class B common stock are outstanding and held
by our parent. Following the completion of this offering and the conversion by
our parent of 2,000,000 shares of Class B common stock into 2,000,000 shares of
Class A common stock, there will be 8,418,132 shares of Class A common stock and
10,500,000 shares of Class B common stock outstanding.

VOTING RIGHTS. The holders of our Class A and Class B common stock
generally have identical voting rights. However, holders of our Class A common
stock are entitled to one vote per share, while holders of our Class B common
stock are entitled to six votes per share on most matters to be voted on by
stockholders. Shares of Class B common stock also have conversion rights, which
are described below.

Generally, all matters to be voted on by stockholders must be approved by a
majority of the votes entitled to be cast by all shares of Class A and Class B
common stock present in person or represented by proxy, voting together as a
single class. Holders of our preferred stock might in the

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<PAGE>
future be granted the right to vote alongside holders of our common stock. When
electing directors, those candidates receiving the most votes, even if not a
majority of the votes cast, will be elected directors. Holders of shares of
Class A common stock and Class B common stock are not entitled to cumulate their
votes in the election of directors.

Except as otherwise provided by law, and after honoring any voting rights
granted to holders of any outstanding preferred stock, amendments to our
Restated Certificate of Incorporation must be approved by a majority of the
combined voting power of all of the Class A and Class B common stock, voting
together as a single class. Any amendment to our Restated Certificate of
Incorporation to increase or decrease the authorized shares of any class will be
approved upon the affirmative vote of the holders of a majority of the voting
power of the common stock, voting together as a single class. However,
amendments to our Restated Certificate of Incorporation that would alter the
powers, preferences or special rights of either the Class A or Class B common
stock so as to affect them adversely also must be approved by a majority of the
votes entitled to be cast by the holders of the shares affected by the
amendment, voting as a separate class. For purposes of these provisions, any
provision for the voluntary, mandatory or other conversion or exchange of the
Class B common stock into or for Class A common stock on a one-for-one basis
will not be considered as adversely affecting the rights of holders of the
Class A common stock.

DIVIDENDS. Holders of Class A and Class B common stock will share equally
on a per-share basis in any dividend declared by the board of directors, after
honoring any preferential rights of outstanding preferred stock. Dividends
consisting of shares of Class A or Class B common stock may be paid only as
follows:

- dividend shares of Class A common stock may be paid only to holders of
shares of Class A common stock, and dividend shares of Class B common
stock may be paid only to holders of Class B common stock; and

- shares will be paid proportionally with respect to each outstanding share
of Class A and Class B common stock.

We may not subdivide or combine shares of either Class A or Class B common stock
without at the same time proportionally subdividing or combining shares of the
other class.

CONVERSION. Each share of Class B common stock is convertible into one
share of Class A common stock at any time prior to a tax-free spin-off of iTurf
from our parent, at the option of the holder. Following a tax-free spin-off,
shares of Class B common stock will no longer be convertible into shares of
Class A common stock at the option of the holder.

Shares of Class B common stock transferred prior to a tax-free spin-off will
automatically be converted into Class A common stock on a one-to-one basis at
the time of the disposition upon their transfer to a person other than:

- our parent;

- any of our parent's subsidiaries or successors; or

- a strategic partner.

A "strategic partner" means any entity or group of affiliated entities acquiring
Class B common stock constituting at least 10% of the aggregate number of
outstanding shares of all classes of our common stock that a majority of our
directors not affiliated with us or our parent determines in good faith, prior
to such acquisition, to be a strategic partner in the best interests of our
business and our stockholders.

Shares of Class B common stock transferred to stockholders of our parent as
a dividend intended to be a tax-free spin-off will not be converted into shares
of Class A common stock upon the occurrence of a tax-free spin-off.

Following a tax-free spin-off, shares of Class B common stock will generally
be transferable as Class B common stock to the extent allowed under applicable
laws. However, shares of Class B

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<PAGE>
common stock will automatically convert into shares of Class A common stock on
the fifth anniversary of the tax-free spin-off. This automatic conversion will
not occur if prior to the tax-free spin-off our parent delivers to us an opinion
of counsel reasonably satisfactory to us that this conversion could preclude the
parent from obtaining a favorable ruling from the Internal Revenue Service that
the distribution would be a tax-free spin-off. If we receive an opinion to that
effect, we will submit approval of the conversion to a vote of the holders of
our common stock as soon as practicable after the fifth anniversary of the
tax-free spin-off. This vote will not be taken, however, if our parent delivers
to us a similar opinion prior to such anniversary that the vote could adversely
affect the status of the tax-free spin-off. Approval of the conversion will
require the affirmative vote of the holders of a majority of the shares of both
the Class A and Class B common stock present and voting together as a single
class, with each share of Class B common stock entitled to one vote for such
purpose.

We cannot assure you that the conversion described above would be
consummated. The requirement to submit the conversion to a vote of the holders
of common stock is intended to ensure the desired tax treatment of the tax-free
spin-off is preserved if the Internal Revenue Service should challenge the
automatic conversion as violating the requirement that the parent maintain 80%
of the voting power of iTurf's common stock. We believe that our parent has no
current plans with respect to a tax-free spin-off of iTurf.

All shares of the Class B common stock will automatically convert into
Class A common stock if a tax-free spin-off has not occurred and the number of
outstanding shares of Class B common stock beneficially owned by our parent
falls below 10% of the aggregate number of outstanding shares of all classes of
our common stock. This mechanism will prevent our parent from decreasing its
economic interest in iTurf to less than 10% while still retaining control of
more than 40% of the voting power of our common stock. All conversions will be
effected on a share-for-share basis.

OTHER RIGHTS. In the event of any merger or consolidation of iTurf with or
into another company in which shares of our common stock are converted into or
exchangeable for shares of stock, other securities or property, including cash,
of the other company, all holders of Class A and Class B common stock will be
entitled to receive the same kind and amount of interest in the other company.

On liquidation, dissolution or winding-up of iTurf, all holders of Class A
and Class B common stock are entitled to share ratably in any of our assets
available for distribution to holders of shares of common stock, after payment
in full of the amounts required to be paid to holders of our preferred stock, if
any.

No shares of Class A or Class B common stock are subject to redemption or
have preemptive rights to purchase additional shares of common stock.

All the outstanding shares of Class A and Class B common stock are legally
issued, fully paid and nonassessable.

PREFERRED STOCK

Our board of directors is authorized, without further stockholder approval,
to issue up to an aggregate of 1,000,000 shares of preferred stock in one or
more series. The board is able to fix or alter the designations, preferences,
rights and any qualifications, limitations or restrictions of the shares of each
series of preferred stock. There are no shares of preferred stock outstanding.
We have no present plans to issue any shares of preferred stock.

SALE OF CONTROL BY OUR PARENT

Our parent has agreed that for a period of one year from the closing of our
initial public offering, if it decides to sell all or a part of our stock
representing at least 35% of our voting securities, it will require the
purchaser to offer to purchase the same percentage of stock held by our public
stockholders on the same terms.

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<PAGE>
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF DELAWARE LAW AND OUR RESTATED CERTIFICATE
OF INCORPORATION AND BYLAWS

iTurf is subject to the provisions of Section 203 of the Delaware General
Corporation Law. Section 203 generally prohibits a publicly-held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless:

- the transaction in which such stockholder became an "interested
stockholder" is approved by the board of directors prior to the date the
"interested stockholder" attained that status;

- upon consummation of the transaction that resulted in the stockholder
becoming an "interested stockholder," the "interested stockholder" owned
at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding those shares owned by persons
who are directors and also officers; or

- on or subsequent to that date the "business combination" is approved by
the board of directors and authorized at an annual or special meeting of
stockholders by the affirmative vote of at least two-thirds of the
outstanding voting stock that is not owned by the "interested
stockholder."

"Business combinations" include mergers, asset sales and other transactions
resulting in a financial benefit to the "interested stockholder." Generally, an
"interested stockholder" is a person who, together with his affiliates and
associates, owns, or within the prior three years did own, 15% or more of the
corporation's voting stock. The restrictions in this statute would not apply to
a "business combination" with our parent or any of its subsidiaries, but they
could prohibit or delay the accomplishment of mergers or other takeover or
change-in-control attempts with respect to iTurf and therefore discourage
attempts to acquire iTurf.

In addition, our Restated Certificate of Incorporation and bylaws that are
summarized below may delay, defer or prevent a tender offer or takeover attempt
that a stockholder might consider to be in its best interest, including those
attempts that might result in a premium over the market price for the Class A
common stock.

CLASSIFIED BOARD OF DIRECTORS

Our board of directors has been divided into three classes of directors
serving staggered, three-year terms. As a result, approximately one-third of the
members of our board of directors will be elected each year. When coupled with
the provision of our Restated Certificate of Incorporation authorizing the board
of directors to fill vacant directorships and increase the size of the board of
directors, these provisions may prevent stockholders from removing incumbent
directors and simultaneously gaining control of the board of directors by
filling the vacancies created by such removals with their own nominees.

SPECIAL MEETINGS OF STOCKHOLDERS

Our Restated Certificate of Incorporation provides that special meetings of
the stockholders of iTurf can be called only by the Chairman of the board of
directors, a Vice Chairman, the President or a majority of the members of the
board of directors.

WRITTEN CONSENT

Under our Restated Certificate of Incorporation, the stockholders of iTurf
will no longer be allowed to take action in writing without a meeting of the
stockholders after the date on which our parent together with Stephen I. Kahn
and any strategic partners no longer beneficially owns at least 50% of the
voting power all classes of outstanding common stock.

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<PAGE>
ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

Our bylaws require that timely notice in writing be provided by stockholders
seeking to bring business before, or to nominate candidates for election as
directors at, the annual meeting of stockholders. To be timely, a stockholder's
notice must be delivered to or mailed and received at the principal executive
offices of iTurf not less than 120 days nor more than 150 days prior to the
first anniversary of the date of iTurf's notice of annual meeting provided with
respect to the previous year's annual meeting of stockholders.

If no annual meeting of stockholders was held in the previous year or the
date of the annual meeting of stockholders has been changed to be more than 30
days earlier than or 60 days after that anniversary, notice will be timely if
received not more than 90 days later than the later of

- 60 days prior to the annual meeting of stockholders or

- the close of business on the tenth day following the date on which notice
of the date of the meeting is given to stockholders or made public,
whichever first occurs.

Our bylaws also specify requirements as to the form and content of a
stockholder's notice. These provisions may preclude stockholders from timely
bringing matters before, or from making nominations for directors at, an annual
meeting of stockholders.

LIMITATIONS ON LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Delaware General Corporation Law authorizes corporations to limit or
eliminate the personal liability of directors to corporations and their
stockholders for monetary damages for breaches of directors' fiduciary duty of
care. Our Restated Certificate of Incorporation includes a provision that
eliminates the personal liability of iTurf's directors for monetary damages for
breach of fiduciary duty as a director, except for liability:

- for any breach of the director's duty of loyalty to iTurf or its
stockholders;

- for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

- under Section 174 of the Delaware General Corporation Law regarding
unlawful dividends and stock purchases; and

- for any transaction from which the director derived an improper personal
benefit.

Our bylaws generally provide that:

- we must indemnify our directors and officers to the fullest extent
permitted by Delaware law;

- we may indemnify our other employees and agents to the same extent that we
indemnify our officers and directors, unless otherwise required by law,
our Restated Certificate of Incorporation, our bylaws or other agreements;
and

- we must advance expenses, as incurred, to our directors and executive
officers in connection with legal proceedings to the fullest extent
permitted by Delaware law.

We have obtained directors' and officers' insurance providing indemnification
for our directors, officers and some employees. We believe that these
indemnification provisions and insurance are necessary to attract and retain
qualified directors and executive officers.

The limitation of liability and indemnification provisions in our Restated
Certificate of Incorporation and bylaws may discourage stockholders from
bringing a lawsuit against our directors for breach of their fiduciary duty.
Such provisions may also reduce the likelihood of derivative litigation against
directors and officers, even though such an action, if successful, might
otherwise benefit us and our stockholders. Furthermore, a stockholder's
investment may be adversely affected to the extent we pay the costs of
settlement and damage awards against directors and officers in connection with
these indemnification provisions.

72
<PAGE>
At present, there is no pending litigation or proceeding involving any of
our directors, officers or employees for which indemnification is sought. We are
unaware of any threatened litigation that may result in claims for
indemnification.

NO DUTY OF OUR PARENT TO REFRAIN FROM COMPETING WITH US

Our Restated Certificate of Incorporation provides that, except as otherwise
agreed by us and our parent:

- our parent will have no duty to refrain from engaging in the same or
similar activities or lines of business of iTurf, thereby competing with
iTurf;

- our parent, its officers, directors and employees will not be liable to
iTurf or its stockholders for breach of any fiduciary duty by reason of
any activities of our parent in competition with iTurf;

- our parent will have no duty to communicate or offer corporate
opportunities to iTurf and will not be liable for breach of any fiduciary
duty as a stockholder of iTurf in connection with corporate opportunities;
and

- if a director or officer of iTurf who is also a director or officer of our
parent learns of a potential transaction or matter that may be a corporate
opportunity for iTurf or our parent, that director or officer may offer
the corporate opportunity to iTurf or our parent as such director or
officer deems appropriate under the circumstances.

A director or officer will not be liable to iTurf or its stockholders for
breach of any fiduciary duty or duty of loyalty for failure to act in the best
interests of iTurf if:

- the director or officer first offers the corporate opportunity to our
parent; or

- our parent pursues the corporate opportunity for itself or does not
communicate information regarding the corporate opportunity to iTurf.

These provisions of our Restated Certificate of Incorporation eliminate rights
that might have been available to shareholders under Delaware law had such
provisions not been included in our Restated Certificate of Incorporation.
However, the enforceability of these provisions under Delaware law has not been
established.

AUTHORIZED BUT UNISSUED SHARES

The authorized but unissued shares of common and preferred stock are
available for future issuance without stockholder approval. We may use these
additional shares for a variety of corporate purposes, including future public
offerings to raise additional capital, corporate acquisitions and employee
benefit plans. The existence of these shares could discourage or make more
difficult an attempt to obtain control of iTurf by means of a proxy contest,
tender offer, merger or otherwise.

The Delaware General Corporation Law provides generally that the affirmative
vote of a majority in interest of the shares entitled to vote on any matter is
required to amend a corporation's certificate of incorporation or bylaws, unless
its certificate of incorporation or bylaws requires a greater percentage. Our
parent, as the beneficial owner of approximately 92% of the voting power of the
outstanding common stock is, on its own, able to cause iTurf to amend its
Restated Certificate of Incorporation and bylaws.

LISTING

Our Class A common stock is listed on the Nasdaq National Market under the
trading symbol "TURF."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common stock is The Bank of New
York, located at 101 Barclay Street, New York, New York 10286. Its telephone
number is 1-800-524-4458.

73
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our Class A common stock in the public
market, or the perception that sales might occur, could adversely affect the
market price of our Class A common stock. Sales of substantial amounts of
Class A common stock in the public market after the restrictions on resale
described below lapse could adversely affect the prevailing market price and our
ability to raise equity capital in the future.

As of October 30, 1999, we had outstanding 6,418,132 shares of our Class A
common stock. An additional 325,000 shares of our Class A common stock will be
outstanding upon conversion of 325,000 shares of our Class B common stock into
Class A common stock by our parent for sale to Kistler Joint Venture upon the
effectiveness of the registration statement containing this prospectus. An
additional 1,675,000 shares of our Class A common stock will be outstanding upon
conversion of 1,675,000 shares of our Class B common stock by our parent for
sale for its own account. All of the 3,586,996 shares sold in this offering will
be freely tradable without restriction or further registration under the
Securities Act, except shares purchased by our "affiliates," as that term is
defined in Rule 144 under the Securities Act. Shares of Class A common stock
purchased by our affiliates will be "restricted securities" under Rule 144.
Restricted securities may be sold in the public market only if registered or if
they qualify for an exemption from registration under Rule 144 or Rule 701
promulgated under the Securities Act.

LOCK-UP AGREEMENTS

In connection with our acquisition of Taponline, each of the stockholders of
that entity agreed not to transfer any shares of Class A common stock acquired
in connection with the acquisition for the following periods: (i) 100% of the
shares may not be transferred prior to two trading days after the public release
of our results of operations for the quarter ending October 30, 1999 (1,586,996
shares), (ii) 50% of the shares may not be transferred until April 30, 2000
(793,498 shares), and (iii) 25% of the shares may not be transferred until
September 1, 2000 (396,749 shares). The shares could be available for resale
immediately upon the expiration of those periods if they are available for
resale under Rule 144. Transfers or dispositions can be made sooner with our
prior written consent.

RULE 144

In general, under Rule 144, a person who has beneficially owned shares of
our Class A common stock for at least one year is entitled to sell within any
three-month period a number of shares that does not exceed the greater of:

- 1% of the number of shares of Class A common stock then outstanding, which
will equal approximately 67,431 shares based on shares outstanding as of
October 30, 1999 plus 325,000 shares of Class A common stock to be issued
upon conversion of 325,000 shares of Class B common stock by our parent in
anticipation of the sale of such shares of Class A common stock to Kistler
Joint Venture, or

- the average weekly trading volume of the Class A common stock on the
Nasdaq National Market during the four calendar weeks preceding the filing
of a notice on Form 144 with respect to the sale.

Sales under Rule 144 are also subject to manner-of-sale provisions and notice
requirements and to the availability of current public information about us.

74
<PAGE>
RULE 144(K)

Under paragraph (k) of Rule 144, persons who are not our affiliate at any
time during the 90 days preceding a sale and who have beneficially owned the
shares proposed to be sold for at least two years are entitled to sell such
shares without complying with the manner-of-sale, public information, volume
limitation or notice provisions of Rule 144. The two-year holding period
includes the holding period of any prior owner not an affiliate of iTurf.
Therefore, unless otherwise restricted, shares covered by Rule 144(k) may be
sold immediately upon the closing of this offering.

RULE 701

In general, under Rule 701, any of our employees, consultants or advisors
who purchase shares from us in connection with a compensatory stock or option
plan or other written agreement is eligible to resell such shares in reliance on
Rule 144, but without compliance with other restrictions, including the holding
period, contained in Rule 144.

REGISTRATION RIGHTS

We have entered into an agreement with our parent providing our parent with
specific registration rights applicable to shares of our common stock held by
it. See "Certain Transactions--Intercompany Agreements--iTurf Common Stock
Registration Rights Agreement.

STOCK OPTIONS

We intend to file a registration statement under the Securities Act covering
4,050,000 shares of Class A common stock reserved for issuance under our stock
incentive plan. Accordingly, shares registered under that registration statement
will, giving effect to vesting provisions and in accordance with Rule 144 volume
limitations applicable to our affiliates, be available for sale in the public
market immediately after the 180-day restrictive agreements expire. As of
October 30, 1999, 259,308 shares of Class A common stock were subject to vested
options.

75
<PAGE>
LEGAL MATTERS

The validity of the shares of Class A common stock offered hereby will be
passed upon for us by Alex S. Navarro, Esq., our Chief Operating Officer,
General Counsel and Secretary. Mr. Navarro owns 3,000 shares of our Class A
common stock and options to purchase an additional 179,688 shares.

EXPERTS

The financial statements of iTurf Inc. at January 31, 1998 and 1999, and for
the years ended January 31, 1997, 1998 and 1999 and the balance sheet of gURL,
Interactive Inc. as of December 17, 1997, appearing in the registration
statement of which this prospectus is a part have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon appearing
elsewhere herein, and are included in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.

The financial statements of [email protected], Inc. as of and for the years
ended December 31, 1997 and 1998, appearing in this registration statement of
which this prospectus is a part have been audited by BDO Seidman LLP,
independent certified public accountants, as stated in their report appearing
elsewhere herein, and are included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

For more information with respect to iTurf and the Class A common stock
offered by this prospectus, see the registration statement and the exhibits and
schedule filed by us with the Securities and Exchange Commission on Form S-1
under the Securities Act. This prospectus does not contain all of the
information set forth in the registration statement and the related exhibits and
schedules. Statements contained in this prospectus regarding the contents of any
contract or any other document to which reference is made are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the registration statement.

A copy of the registration statement and its exhibits and schedule may be
inspected without charge at the public facilities maintained by the Securities
and Exchange Commission in Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Securities and Exchange Commission's regional offices located
at the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of all or any part of the registration statement may be obtained
from these offices upon the payment of the fees prescribed by the Securities and
Exchange Commission.

The Securities and Exchange Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Securities and Exchange
Commission. The address of the site is http://www.sec.gov.

76
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
ITURF INC.

Report of Independent Auditors.............................. F-2

Balance Sheets as of January 31, 1998 and 1999 and
Consolidated Balance Sheet as of July 31, 1999
(unaudited)............................................... F-3

Statements of Operations for the years ended January 31,
1997, 1998 and 1999 and Consolidated Statements of
Operations for the six months ended July 31, 1998
(unaudited) and the twenty-six weeks ended July 31, 1999
(unaudited)............................................... F-4

Statements of Stockholder's (Deficit) Equity for the years
ended January 31, 1997, 1998 and 1999 and Consolidated
Statement of Stockholders' (Deficit) Equity for the
twenty-six weeks ended July 31, 1999 (unaudited).......... F-5

Statements of Cash Flows for the years ended January 31,
1997, 1998 and 1999 and Consolidated Statements of Cash
Flows for the six months ended July 31, 1998 (unaudited)
and the twenty-six weeks ended July 31, 1999
(unaudited)............................................... F-6

Notes to Financial Statements............................... F-7

GURL, INTERACTIVE INC.

Report of Independent Auditors.............................. F-18

Balance Sheet............................................... F-19

Notes to Balance Sheet...................................... F-20

[email protected], INC.

Independent Auditors' Report................................ F-21

Balance Sheets as of December 31, 1997 and 1998 and Balance
Sheet as of June 30, 1999 (unaudited)..................... F-22

Statements of Operations and Deficit for the years ended
December 31, 1997 and 1998 and Statement of Operations and
Deficit for the six months ended June 1998 and 1999
(unaudited)............................................... F-23

Statements of Cash Flows for the years ended December 31,
1997 and 1998 and Statement of Cash Flows for the six
months ended June 30, 1998 and 1999 (unaudited)........... F-24

Notes to Financial Statements............................... F-25

PRO FORMA FINANCIAL INFORMATION

Unaudited Pro Forma Condensed Consolidated Financial
Information............................................... F-28

Unaudited Pro Forma Condensed Consolidated Balance Sheet as
of July 31, 1999.......................................... F-29

Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the six months ended July 31, 1999........... F-30

Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended January 31, 1999.............. F-31

Notes to Unaudited Pro Forma Condensed Consolidated
Financial Information..................................... F-32
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

To the Board of Directors
of iTurf Inc.

We have audited the balance sheets of iTurf Inc. (the "Company") as of
January 31, 1998 and 1999 and the related statements of operations,
stockholder's (deficit) equity and cash flows for each of the three years in the
period ended January 31, 1999. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company at January 31,
1998 and 1999 and the results of its operations and its cash flows for each of
the three years in the period ended January 31, 1999 in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

New York, New York
February 28, 1999, except
for the second paragraph
of Note 1--Business as
to which the date is
April 1, 1999.

F-2
<PAGE>
ITURF INC.

BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
JANUARY 31
------------------- JULY 31
1998 1999 1999
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 31 $ 375 $22,422
Short-term investments.................................... -- -- 55,517
Other current assets...................................... -- -- 1,840
---- ------ -------
Total current assets........................................ 31 375 79,779
Deferred offering costs..................................... -- 110 --
---- ------ -------
Fixed assets, net of accumulated depreciation of $3 and $46
at January 31, 1998 and 1999, respectively and $141 at
July 31, 1999............................................. 95 414 1,868
Intangible assets, net...................................... 341 317 313
---- ------ -------
Total assets................................................ $467 $1,216 $81,960
==== ====== =======
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable and other current liabilities............ $ -- $ 263 $ 1,207
Due to dELiA*s............................................ 512 573 2,632
---- ------ -------
Total current liabilities................................. 512 836 3,839
Stockholders' (deficit) equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized, no shares issued or outstanding............. -- -- --
Class A common stock, $.01 par value, 67,500,000
authorized, no shares issued and outstanding at January
31, 1998 and 1999, 4,831,136 issued and outstanding at
July 31, 1999........................................... -- -- 48
Class B common stock, $.01 par value, 12,500,000 shares
authorized, 12,500,000 shares issued and outstanding.... 125 125 125
Additional paid-in capital................................ -- -- 97,261
Investment in common stock of dELiA*s Inc................. -- -- (17,734)
(Deficit) retained earnings............................... (170) 255 (1,579)
---- ------ -------
Total stockholders' (deficit) equity...................... (45) 380 78,121
---- ------ -------
Total liabilities and stockholders' (deficit) equity........ $467 $1,216 $81,960
==== ====== =======
</TABLE>

See accompanying notes.

F-3
<PAGE>
ITURF INC.

STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31 SIX MONTHS TWENTY-SIX
--------------------------------------- ENDED WEEKS ENDED
1997 1998 1999 JULY 31, 1998 JULY 31, 1999
----------- ----------- ----------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Net product sales............ $ 13 $ 134 $ 3,352 $ 722 $ 5,025
Advertising and other........ -- -- 662 107 542
----------- ----------- ----------- ----------- -----------
Total revenues................. 13 134 4,014 829 5,567
Cost of product sales.......... 6 69 1,687 374 2,983
----------- ----------- ----------- ----------- -----------
Gross profit................... 7 65 2,327 455 2,584
Selling, general and
administrative expenses...... 14 114 1,506 554 5,805
----------- ----------- ----------- ----------- -----------
Income (loss) from
operations................... (7) (49) 821 (99) (3,221)
Interest expense (income),
net.......................... -- 20 41 22 (1,101)
----------- ----------- ----------- ----------- -----------
Income (loss) before income tax
(benefit) provision.......... (7) (69) 780 (121) (2,120)
Income tax (benefit)
provision.................... (3) (29) 355 (44) (161)
----------- ----------- ----------- ----------- -----------
Net income (loss).............. $ (4) $ (40) $ 425 $ (77) $ (1,959)
=========== =========== =========== =========== ===========
Basic and diluted net income
(loss) per share............. $ (0.00) $ (0.00) $ 0.03 $ (0.01) $ (0.13)
=========== =========== =========== =========== ===========
Shares used to compute basic
net income (loss) per
share........................ 12,500,000 12,500,000 12,500,000 12,500,000 15,372,000
=========== =========== =========== =========== ===========
Shares used to compute diluted
net income (loss) per
share........................ 12,500,000 12,500,000 12,518,000 12,500,000 15,372,000
=========== =========== =========== =========== ===========
</TABLE>

See accompanying notes.

F-4
<PAGE>
ITURF INC.

STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY

YEARS ENDED JANUARY 31, 1997, 1998 AND 1999 AND THE
TWENTY-SIX WEEKS ENDED JULY 31, 1999 (UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
INVESTMENT
CLASS A CLASS B IN
COMMON STOCK COMMON STOCK ADDITIONAL COMMON (DEFICIT)
-------------------- --------------------- PAID-IN STOCK OF RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL DELIA*S EARNINGS TOTAL
--------- -------- ---------- -------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 31, 1996....... -- -- 12,500,000 $125 -- -- $ (126) $ (1)
Net loss........................ -- -- -- -- -- -- (4) (4)
--------- --- ---------- ---- ------- --------- ------- --------
Balance at January 31, 1997....... -- -- 12,500,000 125 -- -- (130) (5)
Net loss........................ -- -- -- -- -- -- (40) (40)
--------- --- ---------- ---- ------- --------- ------- --------
Balance at January 31, 1998....... -- -- 12,500,000 125 -- -- (170) (45)
Net income...................... -- -- -- -- -- -- 425 425
--------- --- ---------- ---- ------- --------- ------- --------
Balance at January 31, 1999....... -- -- 12,500,000 125 -- -- 255 380
Issuance of common stock in
initial public offering, net
of offering costs............. 4,830,000 $48 -- -- $97,236 -- 125 97,409
Issuance of common stock for
TSISoccer.com domain name..... 1,136 -- -- -- 25 -- -- 25
Purchase of 551,046 shares of
dELiA*s common stock from
dELiA*s....................... -- -- -- -- -- $ (17,734) -- (17,734)
Net loss........................ -- -- -- -- -- -- (1,959) (1,959)
--------- --- ---------- ---- ------- --------- ------- --------
Balance at July 31, 1999.......... 4,831,136 $48 12,500,000 $125 $97,261 $ (17,734) $(1,579) $ 78,121
========= === ========== ==== ======= ========= ======= ========
</TABLE>

See accompanying notes.

F-5
<PAGE>
ITURF INC.

STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS TWENTY-SIX
YEAR ENDED JANUARY 31 ENDED WEEKS ENDED
------------------------------ JULY 31, JULY 31,
1997 1998 1999 1998 1999
-------- -------- -------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)................................. $ (4) $ (40) $ 425 $ (77) $ (1,959)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization................. -- 6 117 49 130
Amortization of investments................... -- -- -- -- (139)
Changes in operating assets and liabilities:
Other current assets........................ -- -- -- -- (1,840)
Other assets................................ -- -- -- (50) --
Accounts payable and other current
liabilities............................... -- -- 104 13 714
----- ----- ------- ------ --------
Net cash provided by (used in) operating
activities...................................... (4) (34) 646 (65) (3,094)
INVESTING ACTIVITIES
Purchase of dELiA*s stock......................... -- -- -- -- (17,734)
Acquisitions...................................... -- (126) -- -- --
Purchase of fixed assets.......................... -- (98) (265) (131) (1,555)
Purchase of held to maturity investment
securities...................................... -- -- -- -- (55,378)
----- ----- ------- ------ --------
Net cash used in investing activities............. -- (224) (265) (131) (74,667)
FINANCING ACTIVITIES
Net proceeds from issuance of common stock........ -- -- -- -- 97,749
Loan from dELiA*s................................. 17 372 3,286 1,047 6,415
Repayment to dELiA*s.............................. (13) (83) (3,274) (845) (4,356)
Deferred offering costs........................... -- -- (49) -- --
----- ----- ------- ------ --------
Net cash provided by (used in) financing
activities...................................... 4 289 (37) 202 99,808
Net increase in cash.............................. -- 31 344 6 22,047
Cash and cash equivalents at beginning of
period.......................................... -- -- 31 31 375
----- ----- ------- ------ --------
Cash and cash equivalents at end of period........ $ -- $ 31 $ 375 $ 37 $ 22,422
===== ===== ======= ====== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid..................................... $ -- $ -- $ -- $ -- $ --
===== ===== ======= ====== ========
Income taxes paid................................. $ -- $ -- $ -- $ -- $ --
===== ===== ======= ====== ========
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITY:

Issuance of dELiA*s Inc. common stock in connection with the gURL
acquisition--see Note 6.

April 1999 issuance of common stock for the acquisition of TSISoccer.com domain
name--see Note 6.

See accompanying notes.

F-6
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

1. BUSINESS

iTurf Inc. ("iTurf" or the "Company") is an Internet community and marketer
of apparel, related accessories, home furnishings and soccer merchandise that is
focused primarily on young men and women between the ages of 10 and 24, an age
group known as "Generation Y." We are a subsidiary of dELiA*s Inc. ("dELiA*s" or
our "Parent"). The accompanying financial statements of iTurf, which was
incorporated in August 1997, include all of dELiA*s Internet operations from
that date of incorporation, as well as the Internet operations of TSI Soccer
Corporation ("TSI") prior to that date. They also include the financial results
and balances of iTurf Finance Company (as of April, 1999), a wholly-owned
subsidiary of iTurf Inc. We utilize dELiA*s business relationships,
infrastructure and brand names and relied on dELiA*s to provide financing for
our operations until April 14, 1999, when we completed an initial public
offering of our Class A common stock.

On April 1, 1999, our certificate of incorporation was amended and restated
such that the authorized capital stock of iTurf consists of 67,500,000 shares of
Class A common stock, par value $.01 per share, 12,500,000 shares of Class B
common stock, par value $.01 per share and 1,000,000 shares of Preferred Stock,
par value $.01 per share. In addition, exchange of the 100 shares of common
stock previously outstanding and held by dELiA*s into 12,500,000 shares of
Class B common stock was approved. All share and option information in these
financial statements and notes has been adjusted to reflect these changes and,
consequently, $125,000, the par value of the Class B common stock has been
reclassified from (deficit) retained earnings. In connection with the completion
of the IPO, the $125,000 has been reclassified back to (deficit) retained
earnings from additional paid-in capital.

In our initial public offering, effective April 14, 1999, we issued
4,830,000 shares of our Class A common stock to the public at a price of $22 per
share to receive net cash proceeds of approximately $97,409,000 after expenses.
Holders of Class A common stock have voting rights identical to holders of
Class B common stock, except that holders of Class A common stock are entitled
to one vote per share and holders of Class B are entitled to six votes per
share. In connection with the initial public offering, iTurf acquired the
TSISoccer.com domain name from TSI, a wholly-owned subsidiary of dELiA*s, for
1,136 shares of Class A common stock (valued at $25,000 at the initial public
offering price). dELiA*s continues to own all outstanding shares of iTurf's
Class B common stock, which represents approximately 94% of the voting power and
72% of the value of iTurf common stock. Each share of Class B common stock is
convertible into one share of Class A common stock under certain circumstances.

iTurf used approximately $17,700,000 of the initial public offering proceeds
to purchase 551,046 shares of dELiA*s common stock from dELiA*s. This purchase
has been recorded as a reduction to iTurf's stockholders' equity. In June 1999,
we used $1,574,000 of the initial public offering proceeds to repay our May 1,
1999 indebtedness to dELiA*s.

iTurf is subject to seasonal fluctuations in our merchandise sales and
results of operations. We expect our revenues and operating results generally to
be lower in the first half of each fiscal year than in the second half of such
year.

Effective February 1, 1999, we changed our fiscal year from the year ending
January 31 to the 52 weeks ending on the Saturday closest to January 31.

F-7
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of iTurf Inc. and
subsidiaries, all of which are wholly owned. All significant intercompany
balances and transactions have been eliminated in consolidation.

BASIS OF PRESENTATION

For periods prior to our initial public offering, the financial statements
include expenses which have been allocated to iTurf by dELiA*s on a specific
identification basis plus the allocated share of the costs associated with
resources it shared with dELiA*s. Allocations from dELiA*s for such shared
resources were made primarily on a proportional cost method based on related
revenues. Management believes these allocations are reasonable. Since our
initial public offering, expenses are recorded in accordance with intercompany
agreements. The financial statements of iTurf for periods prior to our initial
public offering do not necessarily reflect the results of operations or
financial position that would have existed had iTurf been an independent
company.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The accompanying interim financial statements as of July 31, 1999 and for
the six months ended July 31, 1998 and the twenty-six weeks ended July 31, 1999
have been prepared by the management of the Company without audit. In the
opinion of management, the accompanying interim financial statements are
presented on a basis consistent with the audited financial statements and
reflect all adjustments (consisting of normal recurring items) necessary for a
fair presentation of results for the interim periods presented. Results for the
interim periods are not necessarily indicative of the results to be expected for
the year.

FIXED ASSETS

Fixed assets, comprised of property and equipment, are stated at cost and
depreciated using the straight-line method over 5 years, the estimated useful
lives of the assets.

INTANGIBLE ASSETS

Intangible assets relate primarily to goodwill resulting from the gURL
acquisition, which is being amortized by the straight-line method over 5 years.
This amortization period was determined by management to be appropriate based on
the strength of the gURL brand name, the unique concept and the membership list,
as well as the Company's long-term plans for the acquired business.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
footnotes thereto. Actual results could differ from those estimates.

F-8
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
(CONTINUED)
REVENUE RECOGNITION

Sales of the Company's products are recognized at the time the products are
shipped to customers. Advertising revenue is provided on a consistent basis over
the term of the contract and is therefore recognized on a straight-line basis
over the period during which the advertising is provided. Sales of the Company's
advertising inventory by third parties under revenue-sharing arrangements are
recorded at the amounts reported by the revenue-sharing partners, which are net
of agreed-upon commission fees, when the advertising has been provided. When the
Company licenses the use of its brands, content or other intangible assets to
third parties for specific projects, rather than for a period of time, licensing
revenue is recognized upon fulfillment of all material contractual obligations.
Subscription revenue related to DiscountDomain.com, a membership based discount
shopping service, is billed monthly, subsequent to the earlier of a customer's
first purchase or one month from the date of initial subscription. Subscriptions
are cancelable at any time and revenue is recognized on a monthly basis. The
Company does not incur any direct costs associated with advertising, licensing
or subscription revenue. Accordingly, all indirect expenses incurred in
connection with these revenue sources are included in selling, general and
administrative expenses.

ADVERTISING COSTS

The Company expenses the cost of advertising as incurred. For the years
ended January 31, 1997, 1998 and 1999, advertising costs were approximately $0,
$1,000, and $443,000, respectively.

INCOME TAXES

For periods prior to iTurf's initial public offering, its results were
included in dELiA*s consolidated federal and state income tax returns and our
income tax provision was calculated as if iTurf had operated as an independent
company. As a result of the Company's initial public offering, iTurf is required
to file a separate return. Deferred tax assets and liabilities are recognized
with respect to the tax consequences attributable to the difference between the
financial statement carrying values and tax bases of assets and liabilities.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which these temporary
differences are expected to be recovered or settled. The Company was reimbursed
for any tax benefits which dELiA*s received prior to the initial public offering
and is liable to dELiA*s for any tax liability recorded by the Company.

dELIA's paid all taxes for the Company prior to the initial public offering
and, as such, income taxes payable and deferred tax assets and liabilities have
been included in amounts due to dELIA's.

CASH EQUIVALENTS

The Company considers all highly liquid investments with maturities of 90
days or less when purchased to be cash equivalents. Cash equivalents are stated
at cost, which approximates market value.

F-9
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
(CONTINUED)
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE

The Company computes net (loss) income per share in accordance with the
provisions of Statement of Financial Accounting Standards No. 128, "Earnings per
Share" ("SFAS 128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). To
date, the Company has not had any issuances or grants for nominal consideration.

FINANCIAL INSTRUMENTS

The fair value of financial instruments approximate their carrying value.

DUE TO DELIA*S

Due to dELiA*s includes amounts payable to dELiA*s primarily for operations
and working capital requirements, offset by cash collected by the Company and
remitted to dELiA*s. Other transactions reflected in the payable balance include
the Company's share of dELiA*s consolidated income tax liability and other
administrative expenses incurred by dELiA*s on behalf of the Company. Such
amounts payable do not have specific repayment terms. Interest is charged at 8%
per annum.

STOCK-BASED COMPENSATION

The Company accounts for its stock-based employee compensation agreements in
accordance with the provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and complies with the disclosure
provisions of Statement of Financial Accounting Standards No. 123, "Accounting
for Stock Based Compensation."

LONG-LIVED ASSETS

In accordance with the Statement of Financial Accounting Standards Board
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to Be Disposed Of," the Company periodically reviews
long-lived assets and certain identifiable intangibles for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows (on
an undiscounted basis) expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized would be measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets.

RECENT ACCOUNTING PRONOUNCEMENTS

F-10
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
(CONTINUED)
statements or disclosure as iTurf has no reconciling items. Therefore net income
(loss) and comprehensive income (loss) are the same.

In June 1997, the FASB issued SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information," which is effective for fiscal years
beginning after December 15, 1997. SFAS No. 131 requires that public companies
report certain information about operating segments in their annual financial
statements and in subsequent condensed financial statements of interim periods
issued to shareholders. This statement also requires that public companies
report certain information about their products and services, the geographic
areas in which they operate and their major customers. Adoption of this new
standard did not have an effect on the Company's disclosures for all periods
presented because the Company currently operates as one segment.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133, which is effective for fiscal
years beginning after June 15, 1999, requires the Company to recognize all
derivatives on the balance sheet at fair value. The Company has determined that
the adoption of this new standard will not have a material effect on the
Company's financial statements or disclosure for all periods presented.

3. RELATED PARTY TRANSACTIONS

All merchandise sold from inception through January 31, 1999 was purchased
from dELiA*s or one of its subsidiaries at an amount equal to dELiA*s or the
subsidiary's cost. For the years ended January 31, 1997, 1998 and 1999, such
purchases totaled $6,000, $69,000 and $1,687,000. dELiA*s charges the Company
the costs associated with such purchases, including cost of freight, handling
and other costs, incurred by dELiA*s in connection with providing such
merchandise.

As a subsidiary of dELiA*s, the Company also receives, and is charged its
proportionate share of various services from dELiA*s including administrative,
distribution and other services. Such charges were $13,000, $45,000, and
$219,000 for the years ended January 31, 1997, 1998 and 1999, respectively. In
the opinion of management, all allocations of such costs have been made on a
reasonable and consistent basis; however; they are not necessarily indicative of
nor is it practical for management to estimate the level of expenses which might
have been incurred had the Company been operating as a separate, stand-alone
company.

Prior to the closing of the offering, iTurf and dELiA*s entered into several
intercompany agreements. These agreements cover rights and obligations regarding
income taxes, trademarks and customer lists, competition, intercompany services,
customer service and stock registration.

The Tax Allocation Agreement generally provides that, following the closing
of the offering, for so long as iTurf remains a member of dELiA*s taxpayer
group, iTurf will pay its proportionate share of dELiA*s tax liability computed
as if iTurf were filing a separate return, provided however, that any tax
benefits attributable to iTurf will be used by dELiA*s to the extent iTurf is
unable to use such benefits at that time, and provided further, that dELiA*s
will be required to establish a liability for iTurf to the extent it uses
iTurf's tax benefits.

F-11
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

3. RELATED PARTY TRANSACTIONS (CONTINUED)
The Trademark License and Customer List Agreement provides iTurf with the
exclusive right to use dELiA*s trademarks in connection with the sale of goods
and services on the Internet. iTurf will pay dELiA*s a royalty equal to 5% of
net sales from iTurf Web sites bearing a trademark licensed from dELiA*s and 5%
of dELiA*s-sourced net sales from other iTurf Web sites on which sales of
dELiA*s-sourced goods exceed 50% of total net sales. The agreement also provides
for royalty-free sharing of customer lists and restricts both parties from
entering the other's business.

Under the Intercompany Services Agreement, dELiA*s will continue to provide
all of the services it provided to iTurf prior to the offering, other than
warehouse and fulfillment services, to iTurf at 105% of its cost. For
warehousing and fulfillment services, iTurf will be charged 105% of the dELiA*s
cost based on the average cost per package shipped. dELiA*s will continue to
supply inventory to iTurf for payment equal to the lesser of 105% of dELiA*s
total direct cost and the best price at which dELiA*s could resell those
products to a third party. In addition, iTurf has the right to purchase from
dELiA*s up to $300,000 annually of closeout inventory, generally at prices
discounted from dELiA*s price. Advertising for iTurf in dELiA*s print catalogs
will be at a cost of $40 per 1,000 catalogs distributed with iTurf required to
purchase minimum amounts of advertising space and dELiA*s required to provide a
minimum amount of advertising space. dELiA*s will continue to permit iTurf to
use a portion of its offices at the lesser of the prevailing market rate for
such space and the highest rate then being paid by dELiA*s for comparable space
in the metropolitan area in which such space is located.

The Customer Service Agreement states that iTurf will provide to dELiA*s
e-mail-based customer service in respect of those of dELiA*s catalogs
corresponding to trademarks licensed from dELiA*s.

Had the intercompany agreements been in effect during the historical periods
presented in the financial statements, they would not have had a material effect
on the results of operations.

On April 1, 1999, iTurf and TSI Soccer Corporation (a subsidiary of dELiA*s)
entered into the TSISoccer.Com Asset Transfer Agreement, whereby concurrently
with the closing of the offering, iTurf acquired the TSISoccer.com domain name
from TSI Soccer Corp. for $25,000 of Class A common stock, valued at the initial
public offering price per share.

Prior to the closing of the offering, iTurf Finance Company, a subsidiary of
iTurf, and dELiA*s entered into a subscription agreement whereby concurrently
with the closing of the offering, iTurf agreed to use $10.0 million of the gross
proceeds of the offering to purchase shares of dELiA*s common stock from dELiA*s
at a price equal to the average closing price of that stock on the five trading
days preceding the date of the prospectus. In addition, if the underwriters in
the offering fully exercised their over-allotment option, iTurf agreed to use
60% of the resulting net proceeds to purchase additional shares of dELiA*s
common stock.

In addition, several of iTurf's officers and directors also serve as
officers and directors of dELiA*s.

4. CREDIT FACILITY

iTurf is currently a participant under dELiA*s $25 million bank credit
facility. Obligations under the credit agreement are subject to certain
conditions including the maintenance of financial ratios and

F-12
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

4. CREDIT FACILITY (CONTINUED)
covenants and are secured by a lien on substantially all of dELiA*s assets,
including iTurf. The credit agreement also limits the payment of dividends by
dELiA*s. There were no outstanding borrowings under dELiA*s credit facility at
January 31, 1998 and 1999. iTurf's participation in the credit facility was
terminated concurrent with the closing of the proposed IPO.

5. LEASES

The Company utilizes equipment and space under lease to dELiA*s. Rental
expense from operating leases amounted to $0, $5,000 and $13,000 for the years
ended January 31, 1997, 1998 and 1999 respectively.

6. ACQUISITIONS

GURL

On December 17, 1997, the Company acquired all the outstanding common stock
of gURL, Interactive Inc. ("gURL"), an interactive entertainment Web site, for
5,000 shares of dELiA*s common stock valued at $108,000 based on the fair market
value of dELiA*s common stock on such date, cash of $120,000 and rights to
receive an aggregate of 10,000 additional shares of dELiA*s common stock subject
to the satisfaction of certain membership-level targets. Such targets were
subsequently met and 5,000 shares of dELiA*s common stock were issued on
December 31, 1998. The remaining 5,000 shares of dELiA*s common will be issued
in December 1999. The value of stock issued and to be issued by dELiA*s in
connection with the acquisition is included in iTurf's liability to dELiA*s.

The acquisition has been accounted for by the purchase method of accounting
and the results of the operations of gURL have been included in the financial
statements of the Company from the date of acquisition. The excess purchase
price over the fair value of net assets acquired was approximately $387,000.
This amount includes $110,000 relating to the 5,000 shares of dELiA*s common
stock issued in December 1998 and $49,000 relating to the 5,000 shares of
dELiA*s stock to be issued in December 1999, both calculated using the fair
market value of dELiA*s common stock on the date the related membership-level
targets were achieved. Accumulated amortization at January 31, 1998 and 1999 was
approximately $3,000 and $77,000, respectively.

On a pro forma basis as if the acquisition had taken place on the first day
of each fiscal year, iTurf's net loss would have been ($50,000) and ($80,000),
for the years ended January 31, 1997 and 1998, respectively. On the same basis,
loss per share would not have changed from the amount reported for fiscal 1996
and would have been ($0.01) for fiscal 1997. Net sales on a pro forma basis
would not have been different from the amounts reported.

INTERNET OPERATIONS OF TSI

On December 10, 1997, dELiA*s acquired TSI in a transaction accounted for by
dELiA*s as a pooling of interests. In connection with this transaction, dELiA*s
issued an aggregate of 308,687 shares of its common stock and made cash payments
of approximately $730,000 to former stockholders of TSI. The

F-13
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

6. ACQUISITIONS (CONTINUED)
$730,000 in cash payments, which were made to dissenting TSI stockholders, was
recorded by dELiA*s as a reduction in equity and was not accounted for by iTurf.
These stockholders held 104,737 shares (or 9.23% of the outstanding shares) out
of an aggregate of 1,134,411 shares of TSI outstanding immediately prior to
consummation of the acquisition. None of these dissenting stockholders received
consideration other than the cash referred to above. The holders of the
1,029,674 other shares (or 90.77% of the outstanding shares) of TSI received
only dELiA*s common stock as consideration for their TSI shares, other than cash
payments of approximately $137 made for fractional shares. The acquired
operations included an internet business. In accordance with
pooling-of-interests accounting, the accompanying financial statements, which
include all of dELiA*s internet operations, include such internet operations of
TSI from the date of their inception in March 1995.

During fiscal 1997 through the date of the combination, as well as in prior
years, the internet operations of TSI represented all of iTurf's operations. For
the nine months ended October 31, 1997, these operations resulted in net sales
of $86,000 and net loss of $1,000.

7. INCOME TAXES

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
------------------------------------
1997 1998 1999
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal................................................... $(2) $(23) $248
State..................................................... (1) (6) 97
--- ---- ----
(3) (29) 345
Deferred:
Federal................................................... -- -- 8
State..................................................... -- -- 2
--- ---- ----
-- -- 10
--- ---- ----
Total....................................................... $(3) $(29) $355
=== ==== ====
</TABLE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying value of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

F-14
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

7. INCOME TAXES (CONTINUED)
The Company had no such differences prior to fiscal 1998. Significant components
of the Company's deferred tax assets and liabilities as of January 31, 1999 are
as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
1999
--------------
<S> <C>
Deferred tax liabilities--property and equipment............ (19)
Deferred tax assets--reserves............................... 9
---
Net deferred tax liability................................ (10)
===
</TABLE>

The following is a reconciliation of the statutory federal income tax rate
to the Company's effective income tax rate:

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
------------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Statutory federal income tax expense (benefit).............. (34)% (34)% 34%
State income tax expense (benefit).......................... (8) (8) 7
Other....................................................... (1) -- 5
--- --- --
(43)% (42)% 46%
=== === ==
</TABLE>

8. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings
per share:

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
------------------------------------
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
Numerator: Net income (loss)................... $ (4,000) $ (40,000) $ 425,000
========== ========== ==========
Denominator for basic earnings per share--
weighted-average shares...................... 12,500,000 12,500,000 12,500,000
Effect of dilutive stock options............... -- -- 18,000
---------- ---------- ----------
Denominator for diluted earnings per share--
adjusted weighted-average and assumed
conversions.................................. 12,500,000 12,500,000 12,518,000
========== ========== ==========
Basic and diluted earnings (loss) per share.... $ (0.00) $ (0.00) $ 0.03
========== ========== ==========
</TABLE>

All stock options outstanding at January 31, 1999 were included in the
computation of diluted earnings per share as all exercise prices were less than
the assumed market price of the Company's common stock.

F-15
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

9. STOCK INCENTIVE PLAN

On January 1, 1999, the Company established the 1999 Stock Incentive Plan
(the "Incentive Plan") for officers, employees, consultants, contractors and
directors providing for the grant of stock options, including incentive stock
options and non-qualified stock options, stock appreciation rights and
restricted stock, and reserved 4,050,000 shares for grant. Either the Board of
Directors or the Compensation Committee of the Board of Directors may determine
the type of award, when and to whom awards are granted, the number of shares and
terms of the awards and the exercise prices. Stock options are exercisable for a
period not to exceed 10 years from the date of the grant and, to the extent
determined at the time of grant, may be paid for in cash, shares of common
stock, restricted stock or by a reduction in the number of shares issuable upon
exercise of the option.

On January 1, 1999, the Company issued employees options to purchase
1,419,688 shares of common stock at $9.36, the fair market value at the date of
grant. Of the options issued, 1,214,688 vest in eight six month intervals
generally beginning six months from the date of grant. The remaining 205,000
options issued vest 20% per year beginning one year from the date of grant.
These options represented all of the Company's outstanding options at January
31, 1999. At such date, none of the options were exercisable.

The Company applies APB No. 25 and related interpretations in accounting for
the Incentive Plan. Accordingly, no compensation expense has been recognized for
the plan. Had compensation expense been determined based on the fair value of
stock option grants on the date of grant in accordance with SFAS No. 123, the
Company's net income for the year ended January 31, 1999 would have been
$331,000, while earnings per share would not have changed from the amount
reported.

The estimated fair market value of options granted during the year ended
January 31, 1999 was $3.17 per share. The fair value of options granted by the
Company during the year ended January 31, 1999 was estimated using the
Black-Scholes option-pricing model with the following weighted average
assumptions used: no dividend yield and no volatility; risk-free interest rate
of 4.5 percent; expected lives of four years.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's stock options have characteristics significantly different
from those of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its stock options.

10. COMMITMENTS AND CONTINGENCIES

In May 1999, we entered into a strategic marketing alliance with America
Online, Inc. Over the two-year term of the agreement, we have agreed to pay
America Online a total of approximately $8.1 million, of which approximately
$4.0 million has been paid as of November 5, 1999.

F-16
<PAGE>
ITURF INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 31, 1999

(INFORMATION AS OF JULY 31, 1999 AND FOR THE SIX MONTHS
ENDED JULY 31, 1998 AND THE TWENTY-SIX WEEKS ENDED JULY 31, 1999 IS UNAUDITED)

12. SUBSEQUENT EVENTS

In August 1999, we entered into a strategic marketing alliance with
Microsoft Corporation. Over a one-year term we have agreed to pay Microsoft a
total of approximately $4.6 million, none of which has been paid as of
November 5, 1999.

On September 1, 1999, iTurf Inc. ("iTurf") acquired [email protected], Inc., a
New Jersey corporation ("Taponline"). Taponline was acquired pursuant to an
Agreement and Plan of Merger, dated as of August 9, 1999, as amended
September 1, 1999, by and among iTurf, iTurf Acquisition Corporation, a Delaware
corporation, ("Merger Sub"), Taponline, the stockholders of Taponline and
MarketSource Corporation, a Delaware corporation (the "Merger Agreement").
Pursuant to the Merger Agreement, Merger Sub was merged with and into Taponline,
with Taponline as the surviving corporation (the "Merger"). As a result of the
Merger, Taponline became a wholly-owned subsidiary of iTurf.

The aggregate consideration paid in connection with the Merger consisted of
1,586,996 shares of iTurf Class A common stock valued at approximately $19.1
million, or $12.0625 per share based on iTurf's share price at the time the
transaction was announced. The Merger is intended to qualify as a tax-free
reorganization and will be accounted for under the purchase method of
accounting.

The excess purchase price over the fair value of net assets acquired was
approximately $19.1 million. This amount includes 1,586,996 shares of iTurf Inc.
common stock, valued at $19.1 million, cash acquisition expenses of $460,000
less $458,000 equal to the net book value of assets acquired based upon a
preliminary purchase price allocation. Final allocation of the purchase price
may involve a revaluation of certain assets.

F-17
<PAGE>
REPORT OF INDEPENDENT AUDITORS

To the Shareholders
of gURL, Interactive Inc.

We have audited the accompanying balance sheet of gURL, Interactive Inc.
(the "Company") as of December 17, 1997. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this balance sheet based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall balance sheet presentation. We
believe that our audit of the balance sheet provides a reasonable basis for our
opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of the Company at December 17, 1997 in
conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

New York, New York
January 15, 1999

F-18
<PAGE>
GURL, INTERACTIVE INC.

BALANCE SHEET

ASSETS

<TABLE>
<CAPTION>
DECEMBER 17
1997
-----------
<S> <C>

Cash........................................................ $100
----
Total assets................................................ $100
====

SHAREHOLDERS' EQUITY

Common stock, no par value, 200 shares authorized;
100 shares issued and outstanding......................... $100
----
Shareholders' equity........................................ $100
====
</TABLE>

See accompanying notes.

F-19
<PAGE>
GURL, INTERACTIVE INC.

NOTES TO BALANCE SHEET

DECEMBER 17, 1997

1. DESCRIPTION OF BUSINESS

In September 1997, the shareholders incorporated gURL, Interactive Inc.
("gURL") and contributed $100 in cash and the gURL Web site as consideration for
receiving 100 shares of common stock. The gURL Web site was developed by three
New York University graduate school students (the "Shareholders") as the basis
for their masters thesis. The contribution of the gURL Web site was accounted
for at the Shareholders' cost, which was zero because the costs consisted of
their own time and the Web site was developed at no cost to the Shareholders. No
other costs were incurred.

2. OTHER

On December 17, 1997, iTurf Inc. acquired all of the gURL outstanding common
stock.

F-20
<PAGE>
[LETTERHEAD OF BDO SEIDMAN, LLP]

INDEPENDENT AUDITORS' REPORT

[email protected], INC.
Cranbury, New Jersey

We have audited the accompanying balance sheets of [email protected], INC. (the
"Company") as of December 31, 1998 and 1997, and the related statements of
operations and deficit and cash flows for the years then ended. These financial
statements are the responsibility of MarketSource Corporation's ("MarketSource")
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

The operations covered by the financial statements of [email protected], INC.
referred to above had no separate legal status or existence prior to August 1,
1998. The accompanying financial statements were prepared as described in
Note 2 and include allocations of various costs incurred by MarketSource based
on estimates as described in the notes to the financial statements. Accordingly,
the accompanying financial statements are not necessarily indicative of the
results of operations that would have been attained if the Company had been
operated as a separate entity. The Company is dependent on MarketSource to
provide financing and support for its operations.

In our opinion, the financial statements referred to above, present fairly
in all material respects, the financial position of [email protected], INC. as of
December 31, 1998 and 1997, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

BDO Seidman, LLP

Woodbridge, New Jersey
October 13, 1999

F-21
<PAGE>
[email protected], INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- JUNE 30,
1997 1998 1999
--------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Prepaid and other current assets...................... $ -- $ -- $ 6,384
--------- ----------- -----------
Total current assets.............................. -- -- 6,384
Property, plant and equipment, less accumulated
depreciation and amortization....................... 127,747 51,461 169,229
Intangible assets, less accumulated amortization...... -- 440,275 612,957
--------- ----------- -----------
$ 127,747 $ 491,736 $ 788,570
========= =========== ===========

LIABILITIES AND STOCKHOLDER'S DEFICIT
Current:
Accounts payable and accrued expenses............... $ -- $ -- $ 275,385
Deferred revenues................................... -- -- 55,500
Affiliate payable................................... 742,406 1,520,278 3,263,737
--------- ----------- -----------
Total current liabilities......................... 742,406 1,520,278 3,594,622

Commitments and contingencies

Stockholder's deficit:
Common stock; no par value; 1,000 shares authorized;
100 shares issued and outstanding................. -- -- --
Additional paid-in capital.......................... 100 100 100
Deficit............................................. (614,759) (1,028,642) (2,806,152)
--------- ----------- -----------
Total stockholder's deficit....................... (614,659) (1,028,542) (2,806,052)
--------- ----------- -----------
Total liabilities and stockholder's deficit....... $ 127,747 $ 491,736 $ 788,570
========= =========== ===========
</TABLE>

See accompanying notes to financial statements.

F-22
<PAGE>
[email protected], INC.

STATEMENTS OF OPERATIONS AND DEFICIT

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
FOR THE YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------- ------------------------
1997 1998 1998 1999
-------------- -------------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net revenues........................ $ 570,843 $ 593,847 $ 166,887 $ 85,405
Cost of services (commissions)...... 9,691 22,261 5,679 4,756
----------- ----------- --------- -----------
Gross margin.................... 561,152 571,586 161,208 80,649
----------- ----------- --------- -----------
Operating expenses:
Sales and marketing............... 893,285 779,438 161,992 1,108,681
General and administrative........ 282,626 206,031 120,644 749,478
----------- ----------- --------- -----------
Total operating expenses........ 1,175,911 985,469 282,636 1,858,159
----------- ----------- --------- -----------
Net loss............................ (614,759) (413,883) (121,428) (1,777,510)
Deficit, beginning of period........ -- (614,759) (614,759) (1,028,642)
----------- ----------- --------- -----------
Deficit, end of period.............. $ (614,759) $(1,028,642) $(736,187) $(2,806,152)
=========== =========== ========= ===========
</TABLE>

See accompanying notes to financial statements.

F-23
<PAGE>
[email protected], INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
--------------------- ------------------------
1997 1998 1998 1999
--------- --------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................. $(614,759) $(413,883) $(121,428) $(1,777,510)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation............................ 90,682 76,286 38,148 20,462
Amortization............................ -- -- -- 23,437
Changes in assets and liabilities:
Prepaid expenses and other current
assets.............................. -- -- -- (6,384)
Accounts payable and accrued
expenses............................ -- -- -- 275,385
Deferred revenues..................... -- -- -- 55,500
--------- --------- --------- -----------
Net cash used in operating
activities........................ (524,077) (337,597) (83,280) (1,409,110)
--------- --------- --------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture, fixtures and
equipment............................... (9,524) -- -- (138,230)
Intangible assets......................... -- (440,275) (187,864) (196,119)
--------- --------- --------- -----------
Net cash used in investing
activities........................ (9,524) (440,275) (187,864) (334,349)
--------- --------- --------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Affiliated financing/payments............. 533,601 777,872 271,144 1,743,459
--------- --------- --------- -----------
Net increase in cash........................ -- -- -- --
Cash, beginning of period................... -- -- -- --
--------- --------- --------- -----------
Cash, end of period......................... $ -- $ -- $ -- $ --
========= ========= ========= ===========
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:

On January 1, 1997, MarketSource contributed approximately $209,000 of
furniture, fixtures and equipment to the Company.

See accompanying notes to financial statements.

F-24
<PAGE>
[email protected], INC.

NOTES TO FINANCIAL STATEMENTS

INFORMATION AS OF JUNE 30,1999 AND FOR THE 6 MONTHS
ENDED JUNE 30, 1999 AND 1998 IS UNAUDITED

1. BUSINESS

[email protected], Inc. (the "Company") is an internet marketing company focused
primarily at the college student market. Effective August 6, 1998, the Company
was incorporated as a wholly-owned subsidiary of MarketSource Corporation
("MarketSource"). The Company utilizes MarketSource's business relationships and
infrastructure and is dependent on MarketSource to provide financing and support
for its operations. Prior to August 6, 1998, the Company operated as a separate
line of service within MarketSource.

2. BASIS OF PRESENTATION

The amounts included in the accompanying financial statements are presented
on a historical cost basis and do not reflect any adjustments for purchase
accounting.

Historically, financial statements were not prepared for the Company. These
financial statements have been carved out from the historical financial records
of MarketSource and are intended to present the operations and cash flows of the
Company on a stand alone basis. All of the allocations and estimates in the
financial statements are based on the assumptions that MarketSource's management
believes are reasonable under the circumstances. However, these allocations and
estimates are not necessarily indicative of the costs and expenses that would
have resulted if the Company had been operated as a separate entity, the
determination of which is not practicable. Accordingly, the financial statements
of the Company do not necessarily reflect the results of operations or financial
position that would have existed had the Company been a separate entity. The
financial statements include expenses, which have been allocated to the Company
by MarketSource on a specific identification basis, plus its allocated share of
the costs associated with resources it shares with MarketSource. Allocations
from MarketSource for shared resources have been made primarily based on the
relationship of the costs to revenue.

Certain indirect costs were historically included in the financial
statements of MarketSource. These costs, which principally include interest and
other expenses, are not specifically identifiable nor allocable to the service
lines and, accordingly, have been omitted from the financial statements.

All billing and collection activities of the Company are performed by
MarketSource. These activities have been reflected in "Affiliate payable."

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FIXED ASSETS

Fixed assets, comprised primarily of equipment, are stated at cost and
depreciated using the straight-line method over the estimated useful lives of
the assets, primarily 5 years.

INTANGIBLE ASSETS

Intangible assets relate to the initial costs of developing the Company's
web site. These costs are being amortized on the straight-line method over 3
years.

F-25
<PAGE>
[email protected], INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

INFORMATION AS OF JUNE 30,1999 AND FOR THE 6 MONTHS
ENDED JUNE 30, 1999 AND 1998 IS UNAUDITED

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION

Revenues are recognized as marketing services are provided to customers.
Billings recorded in advance of the Company providing marketing services are
deferred until the services are provided.

ADVERTISING COSTS

The Company expenses the cost of advertising as incurred. Advertising costs
were approximately $294,000 and $23,000 for the six months ended June 30, 1999
and 1998 and $380,000 and $364,000 for the years ended December 31, 1998 and
1997, respectively.

INCOME TAXES

The Company's results have been included in the federal tax return of
MarketSource. Income taxes have been accounted for as if the Company had
operated as a separate entity. Deferred tax assets and liabilities are
recognized with respect to the tax consequences attributable to the difference
between the financial statement carrying values and tax bases of assets and
liabilities. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which these temporary
differences are expected to reverse.

The Company has not provided a benefit for income taxes since, if it were a
separate company, any deferred benefits as a result of its net operating loss
carryforward, would be subject to a full valuation allowance.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

LONG-LIVED ASSETS

Long-lived assets, such as property and equipment, are evaluated for
impairment when events or changes in circumstances indicate that the carrying
amount of the assets may not be recoverable through the estimated undiscounted
future cash flows from the use of these assets. If and when any such impairment
exists, the related assets will be written down to fair value. This policy is in
accordance with Statement of Financial Accounting Standards No. 121, "Accounting
for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." No write downs have been necessary for the years ended December 31, 1998
and 1997.

4. MAJOR CUSTOMERS

For the year ended December 31, 1998, one customer represented 40% of
revenues.

No other customer exceeded 10% of revenues for any of the periods presented.

F-26
<PAGE>
[email protected], INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

INFORMATION AS OF JUNE 30,1999 AND FOR THE 6 MONTHS
ENDED JUNE 30, 1999 AND 1998 IS UNAUDITED

5. YEAR 2000 ISSUES (UNAUDITED)

Like other companies, the Company could be adversely affected if the
computer systems it, its suppliers or customers use do not properly process and
calculate date-related information and data from the period surrounding and
including January 1, 2000. This is commonly known as the "Year 2000" issue. At
this time, because of the complexities involved in the issue, management cannot
provide assurances that the Year 2000 issue will not have an impact on the
Company's operations.

6. UNAUDITED INTERIM STATEMENTS

The financial statements as of June 30, 1999 and 1998 and for the six months
then ended are unaudited; however, in the opinion of management, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation of the financial statements for the interim periods have been made.
The results of interim periods are not necessarily indicative of the results to
be obtained in a full fiscal year.

7. SUBSEQUENT EVENT

On September 1, 1999, the Company was sold to iTurf Inc. for 1,587,996
shares of iTurf Inc.'s Class A common stock. The common stock was valued at
approximately $19.1 million on the date of the transaction.

F-27
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On September 1, 1999, iTurf Inc. ("iTurf") acquired [email protected], Inc., a
New Jersey corporation ("Taponline"). Taponline was acquired pursuant to an
Agreement and Plan of Merger, dated as of August 9, 1999, as amended
September 1, 1999, by and among iTurf, iTurf Acquisition Corporation, a Delaware
corporation, ("Merger Sub"), Taponline, the stockholders of Taponline and
MarketSource Corporation, a Delaware corporation, (the "Merger Agreement").
Pursuant to the Merger Agreement, Merger Sub was merged with and into Taponline,
with Taponline as the surviving corporation (the "Merger"). As a result of the
Merger, Taponline became a wholly-owned subsidiary of iTurf.

The aggregate consideration paid in connection with the Merger consisted of
1,586,996 shares of iTurf Class A common stock valued at approximately
$19.1 million, or $12.0625 per share based on iTurf's share price at the time
the transaction was announced. The Merger is intended to qualify as a tax-free
reorganization and will be accounted for under the purchase method of
accounting.

Taponline operates a community and content Web site focusing on college and
university students between the ages of 18 and 24.

The following unaudited condensed consolidated financial information sets
forth the consolidated financial position and consolidated results of operations
of iTurf and Taponline assuming the combination was accounted for using the
purchase method of accounting and that the combination was consummated (i) on
July 31, 1999 for the unaudited pro forma condensed consolidated balance sheet
and (ii) as of the beginning of the earliest period presented in the unaudited
pro forma condensed consolidated statements of operations. Accordingly, the
assets acquired and liabilities assumed have been recorded at their estimated
fair values, which are subject to further adjustment based on future events and
future analysis.

The unaudited pro forma information consolidates iTurf's historical balance
sheet as of July 31, 1999 with the balance sheet of Taponline as of June 30,
1999, and iTurf's historical statements of operations for the six months ended
July 31, 1999 and the fiscal year ended January 31, 1999 with the historical
statements of operations of Taponline for the six months ended June 30, 1999 and
the fiscal year ended December 31, 1998, respectively.

The pro forma condensed consolidated balance sheet and statements of
operations have been prepared by the management of iTurf. The following
unaudited pro forma condensed consolidated information is presented for
illustration purposes only. It is not necessarily indicative of the financial
position or results of operations which would actually have been reported had
the combination been in effect during those periods or which may be reported in
the future. The statements should be read in conjunction with iTurf's historical
financial statements and notes thereto included in filings with the SEC and
Taponline's financial statements which have been included elsewhere in this
report.

F-28
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

JULY 31, 1999

(IN THOUSANDS)

<TABLE>
<CAPTION>
ITURF T@PONLINE PRO FORMA
HISTORICAL HISTORICAL(I) ADJUSTMENTS PRO FORMA
---------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.................. $ 22,422 $ 22,422
Marketable securities...................... 55,517 55,517
Prepaid expenses and other current
assets................................... 1,840 6 1,846
-------- ------- ------- --------
Total current assets..................... 79,779 6 79,785

PROPERTY & EQUIPMENT, NET.................... 1,868 170 2,038
INTANGIBLE ASSETS............................ 313 613 19,145 (a) 20,071
-------- ------- ------- --------
TOTAL ASSETS................................. $ 81,960 $ 789 $19,145 $101,894
======== ======= ======= ========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and other current
liabilities.............................. $ 1,207 $ 331 $ 460 (a) $ 1,998
Liabilities due affiliates................. 2,632 3,264 (3,264)(b) 2,632
-------- ------- ------- --------
Total current liabilities................ 3,839 3,595 (2,804) 4,630

STOCKHOLDERS' EQUITY
iTurf Preferred Stock......................
iTurf Common Stock--Class A................ 48 16 (a) 64
iTurm Common Stock--Class B................ 125 125
Additional paid-in capital................. 97,261 19,127 (a) 116,388
Investment in common stock of dELiA*s
Inc...................................... (17,734) (17,734)
Retained earnings (deficit)................ (1,579) (2,806) 3,264 (b) (1,579)
(458)(a)
-------- ------- ------- --------
Total stockholders' equity............... 78,121 (2,806) 21,949 97,264
-------- ------- ------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY... $ 81,960 $ 789 $19,145 $101,894
======== ======= ======= ========
</TABLE>

See accompanying notes to unaudited pro forma condensed consolidated financial
information.

F-29
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

SIX MONTHS ENDED JULY 31, 1999

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
T@PONLINE PRO FORMA
ITURF HISTORICAL HISTORICAL(I) ADJUSTMENTS PRO FORMA
---------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
NET REVENUES................................... $ 5,567 $ 85 $ 5,652
COST OF REVENUES............................... 2,983 5 (5)(c) 2,983
------- ------- ------- -------
GROSS PROFIT................................... 2,584 80 5 2,669
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES... 5,805 1,858 5(c) 7,668
GOODWILL AMORTIZATION.......................... 1,914(d) 1,914
INTEREST INCOME, NET........................... (1,101) (1,101)
------- ------- ------- -------
LOSS BEFORE INCOME TAXES....................... (2,120) (1,778) (1,914) (5,812)
BENEFIT FOR INCOME TAXES....................... (161) (135)(e) (296)
------- ------- ------- -------
NET LOSS....................................... $(1,959) $(1,778) $(1,779) $(5,516)
======= ======= ======= =======
BASIC AND DILUTED NET LOSS PER SHARE........... $ (0.13) $ (0.33)
======= ======= ======= =======
SHARES USED IN THE CALCULATION OF BASIC AND
DILUTED NET LOSS PER SHARE................... 15,372 1,587(a) 16,959
======= ======= ======= =======
</TABLE>

See accompanying notes to unaudited pro forma condensed consolidated financial
information.

F-30
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED JANUARY 31, 1999

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
T@PONLINE PRO FORMA
ITURF HISTORICAL HISTORICAL(II) ADJUSTMENTS PRO FORMA
---------------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
NET REVENUES................................... $ 4,014 $ 594 $ 4,608
COST OR REVENUES............................... 1,687 22 (22)(c) 1,687
------- ------- ------- -------
GROSS PROFIT................................... 2,327 572 22 2,921
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES... 1,506 986 22 (c) 2,514
GOODWILL AMORTIZATION.......................... 3,829 (d) 3,829
INTEREST EXPENSE, NET.......................... 41 41
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES.............. 780 (414) (3,829) (3,463)
PROVISION (BENEFIT) FOR INCOME TAXES........... 355 (188)(e) 167
------- ------- ------- -------
NET INCOME (LOSS).............................. $ 425 $ (414) $(3,641) $(3,630)
======= ======= ======= =======
BASIC AND DILUTED NET INCOME (LOSS) PER
SHARE........................................ $ 0.03 $ (0.26)
======= ======= ======= =======
SHARES USED IN THE CALCULATION OF BASIC NET
INCOME (LOSS) PER SHARE...................... 12,500 1,587 (a) 14,087
======= ======= ======= =======
SHARES USED IN THE CALCULATION OF DILUTED NET
INCOME (LOSS) PER SHARE...................... 12,518 1,587 (a) 14,087
(18)(f)
======= ======= ======= =======
</TABLE>

See accompanying notes to unaudited pro forma condensed consolidated financial
information.

F-31
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION

I. ADJUSTMENTS

(a) To reflect iTurf's purchase of Taponline for 1,586,996 shares of its
common stock, valued at $19.1 million or $12.0625 per share based on
iTurf's share price at the time the transaction was announced, and
estimated cash acquisition expenses of $460,000 less $458,000 equal to
the net book value of the assets acquired based upon a preliminary
purchase price allocation. Final allocation of the purchase price may
involve a revaluation of certain assets.

(b) To eliminate affiliate liabilities not assumed by iTurf.

(c) To reclassify internal sales commissions to selling, general and
administrative expenses in accordance with iTurf accounting policies.

(d) To reflect the amortization over 5 years of goodwill recorded in the
purchase of Taponline.

(e) To reflect the tax effect of Taponline's pre-tax income based on iTurf's
historical tax rate for the period.

(f) To adjust for anti-dilutive stock options.

II. OTHER ITEMS

(i) The Taponline historical information is as of and for the six months
ended June 30, 1999.

(ii) The Taponline historical information is for the year ended
December 31, 1998.

F-32
<PAGE>
PART II INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The expenses to be paid by the Registrant in connection with this offering
are as follows. All amounts other than the SEC registration fee and NASD filing
fee are estimates.

<TABLE>
<CAPTION>
AMOUNT TO BE PAID
-----------------
<S> <C>
Securities and Exchange Commission registration fee......... $ 11,104
Nasdaq National Market listing fee.......................... 17,500
Printing fees............................................... 10,000
Legal fees and expenses..................................... 20,000
Accounting fees and expenses................................ 20,000
Miscellaneous............................................... 5,461
----------
Total....................................................... $ 84,068
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). As permitted by the Delaware General Corporation Law, the Registrant's
Amended and Restated Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Registrant or its stockholders, (ii)for
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) under section 174 of the Delaware General
Corporation Law (regarding unlawful dividends and stock purchases) or (iv) for
any transaction from which the director derived an improper personal benefit.

As permitted by the Delaware General Corporation Law, the Bylaws of the
Registrant provide that (i) the Registrant is required to indemnify its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law, subject to certain very limited exceptions, (ii) the Registrant
may indemnify its other employees and agents as set forth in the Delaware
General Corporation Law, (iii) the Registrant is required to advance expenses,
as incurred, to its directors and executive officers in connection with a legal
proceeding to the fullest extent permitted by the Delaware General Corporation
Law, subject to certain very limited exceptions and (iv) the rights conferred in
the Bylaws are not exclusive. At present, there is no pending litigation or
proceeding involving a director, officer or employee of the Registrant regarding
which indemnification is sought, nor is the Registrant aware of any threatened
litigation that may result in claims for indemnification. Reference is also made
to the registration rights agreements between iTurf and the selling stockholders
entered into in connection with our acquisition of Taponline and between iTurf
and our parent, which provides for the indemnification of officers, directors
and controlling persons of the Registrant against certain liabilities. The
indemnification provisions in the Registrant's Restated Certificate of
Incorporation and in its Bylaws maybe sufficiently broad to permit
indemnification of the Registrant's directors and executive officers for
liabilities arising under the Securities Act. The Registrant, with approval by
the Registrant's Board of Directors, expects to obtain directors' and officers'
liability insurance. Reference is made to the following documents filed

II-1
<PAGE>

as exhibits to this registration statement regarding relevant indemnification
provisions described above and elsewhere herein:

<TABLE>
<CAPTION>
EXHIBIT
DOCUMENT NUMBER
- -------- --------
<S> <C>
Form of Restated Certificate of Incorporation of
Registrant................................................ 3.3
Form of Bylaws of Registrant................................ 3.4
Form of iTurf Common Stock Registration Agreement........... 10.6
Registration Rights Agreement between iTurf and the
stockholders of Taponline.com, Inc. dated September 1,
1999...................................................... 10.19
</TABLE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

1. All shares issued prior to the completion of our initial public offering
described herein were issued to dELiA*s Inc. on October 1, 1997 in connection
with the formation of the Company, a transaction exempt from Section 5 of the
Securities Act pursuant to Section 4(2) thereof.

2. On April 14, 1999, we issued 1,136 shares of our Class A common stock to
TSI Soccer Corporation, a wholly-owned subsidiary of our parent, as
consideration for the TSISoccer.com domain name., a transaction exempt from
Section 5 of the Securities Act pursuant to Section 4(2) thereof.

3. On September 1, 1999, we issued 1,586,996 shares of our Class A common
stock to the stockholders of Taponline in connection with our acquisition of
that entity, a transaction exempt from Section 5 of the Securities Act pursuant
to Section 4(2) thereof.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- --------------------- ------------------------------------------------------------
<C> <S>
10.6 Form of dELiA*s Common Stock Registration Rights Agreement
(incorporated by reference to Exhibit 10.6 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.7 Form of Customer Service Agreement (incorporated by
reference to Exhibit 10.7 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
10.8 Form of Letter Agreement between dELiA*s and iTurf
(regarding a sale of control by dELiA*s) (incorporated by
reference to Exhibit 10.8 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
10.9 1999 Stock Incentive Plan (incorporated by reference to
Exhibit 10.9 to the iTurf Inc. Registration Statement on
Form S-1 (Registration No. 333-71123))
10.10 Employment Agreement between iTurf and Stephen I. Kahn
(incorporated by reference to Exhibit 10.10 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.11 Employment Agreement between iTurf and Alex S. Navarro
(incorporated by reference to Exhibit 10.11 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.12 Employment Agreement between iTurf and Oliver Sharp
(incorporated by reference to Exhibit 10.12 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.13 Employment Agreement between iTurf and Dennis Goldstein
(incorporated by reference to Exhibit 10.13 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.14 TSISoccer.com Asset Transfer Agreement, dated April 1, 1999,
between iTurf Inc. and TSI Soccer Corporation (incorporated
by reference to Exhibit 10.14 to the iTurf Inc.
Registration Statement on Form S-1 (Registration
No. 333-71123))
10.15 Subscription Agreement, dated April 1, 1999, between iTurf
Delaware Investment Company and dELiA*s (incorporated by
reference to Exhibit 10.15 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
10.16 Advertising Agreement between iTurf and America Online,
Inc., dated May 4, 1999 (incorporated by reference to
Exhibit 10.16 to the iTurf Inc. Quarterly Report on
Form 10-Q for the fiscal quarter ended May 1, 1999)**
10.17 Online Advertising Authorized Reseller Agreement between
iTurf, Taponline and MarketSource Corporation, dated
September 1, 1999 (incorporated by reference to
Exhibit 99.1 to the iTurf Inc. Current Report on Form 8-K
dated September 7, 1999)
10.18 Offline Advertising Purchase Agreement between iTurf and
MarketSource Corporation, dated September 1, 1999
(incorporated by reference to Exhibit 99.1 to the
iTurf Inc. Current Report on Form 8-K dated September 7,
1999)
10.19* Registration Rights Agreement between iTurf and the
stockholders of Taponline.com, Inc. dated September 1, 1999
21.1* Subsidiaries
23.1+ Consents of Ernst & Young LLP
23.2+ Consent of BDO Seidman, LLP
23.3+ Consent of Alex S. Navarro (included in Exhibit 5.1 above)
24.1* Power of Attorney
</TABLE>

- ------------------------

* Previously filed

+ Filed herewith

II-3
<PAGE>

(b) Financial Statement Schedules. No financial statement schedules are
provided, because the information called for is not required or is shown either
in the financial statements or the notes thereto.

ITEM 17. UNDERTAKINGS

A. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

B. The undersigned Registrant hereby undertakes to do the following, to the
extent that such actions are required by the rules and regulations of the
Securities and Exchange Commission:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of New York, State of New York on November 19, 1999.

<TABLE>
<S> <C> <C>
iTurf Inc.

By: /s/ STEPHEN I. KAHN
-----------------------------------------
Stephen I. Kahn
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

In accordance with the requirements of the Securities Act, this Registration
Statement has been signed on November 19, 1999 by the following persons in the
capacities indicated.

<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S> <C>
/s/ STEPHEN I. KAHN President, Chief Executive
-------------------------------------- Officer and Director
Stephen I. Kahn

* Chief Financial Officer
-------------------------------------- (principal financial and
Dennis Goldstein accounting officer)

* Director
--------------------------------------
Christopher C. Edgar

* Director
--------------------------------------
Evan Guillemin

* Director
--------------------------------------
Thomas R. Evans

* Director
--------------------------------------
Beth Vanderslice

* Director
--------------------------------------
Martin D. Levine

*By: /s/ ALEX S. NAVARRO
--------------------------------------
ATTORNEY-IN-FACT
</TABLE>

II-5
<PAGE>
EXHIBIT INDEX.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- --------------------- ------------------------------------------------------------
<C> <S>
3.1 Restated Certificate of Incorporation of iTurf (incorporated
by reference to Exhibit 3.3 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
3.2 By-laws of iTurf (incorporated by reference to Exhibit 3.4
to the iTurf Inc. Registration Statement on Form S-1
(Registration No. 333-71123))
4.1 Form of Class A Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
5.1+ Opinion of Alex S. Navarro, Esq.
10.1 Form of Intercompany Services Agreement (incorporated by
reference to Exhibit 10.1 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
10.2 Form of Trademark License and Customer List Agreement
(incorporated by reference to Exhibit 10.2 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.3 Form of Intercompany Indemnification Agreement (incorporated
by reference to Exhibit 10.3 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
10.4 Form of Tax Allocation Agreement (incorporated by reference
to Exhibit 10.4 to the iTurf Inc. Registration Statement on
Form S-1 (Registration No. 333-71123))
10.5 Form of iTurf Common Stock Registration Rights Agreement
(incorporated by reference to Exhibit 10.5 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.6 Form of dELiA*s Common Stock Registration Rights Agreement
(incorporated by reference to Exhibit 10.6 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.7 Form of Customer Service Agreement (incorporated by
reference to Exhibit 10.7 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
10.8 Form of Letter Agreement between dELiA*s and iTurf
(regarding a sale of control by dELiA*s) (incorporated by
reference to Exhibit 10.8 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
10.9 1999 Stock Incentive Plan (incorporated by reference to
Exhibit 10.9 to the iTurf Inc. Registration Statement on
Form S-1 (Registration No. 333-71123))
10.10 Employment Agreement between iTurf and Stephen I. Kahn
(incorporated by reference to Exhibit 10.10 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.11 Employment Agreement between iTurf and Alex S. Navarro
(incorporated by reference to Exhibit 10.11 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.12 Employment Agreement between iTurf and Oliver Sharp
(incorporated by reference to Exhibit 10.12 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.13 Employment Agreement between iTurf and Dennis Goldstein
(incorporated by reference to Exhibit 10.13 to the
iTurf Inc. Registration Statement on Form S-1 (Registration
No. 333-71123))
10.14 TSISoccer.com Asset Transfer Agreement, dated April 1, 1999,
between iTurf Inc. and TSI Soccer Corporation (incorporated
by reference to Exhibit 10.14 to the iTurf Inc.
Registration Statement on Form S-1 (Registration
No. 333-71123))
10.15 Subscription Agreement, dated April 1, 1999, between iTurf
Delaware Investment Company and dELiA*s (incorporated by
reference to Exhibit 10.15 to the iTurf Inc. Registration
Statement on Form S-1 (Registration No. 333-71123))
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- --------------------- ------------------------------------------------------------
<C> <S>
10.16 Advertising Agreement between iTurf and America Online,
Inc., dated May 4, 1999 (incorporated by reference to
Exhibit 10.16 to the iTurf Inc. Quarterly Report on
Form 10-Q for the fiscal quarter ended May 1, 1999)**
10.17 Online Advertising Authorized Reseller Agreement between
iTurf, Taponline and MarketSource Corporation, dated
September 1, 1999 (incorporated by reference to
Exhibit 99.1 to the iTurf Inc. Current Report on Form 8-K
dated September 7, 1999)
10.18 Offline Advertising Purchase Agreement between iTurf and
MarketSource Corporation, dated September 1, 1999
(incorporated by reference to Exhibit 99.1 to the
iTurf Inc. Current Report on Form 8-K dated September 7,
1999)
10.19* Registration Rights Agreement between iTurf and the
stockholders of Taponline.com, Inc. dated September 1, 1999
21.1* Subsidiaries
23.1+ Consents of Ernst & Young LLP
23.2+ Consent of BDO Seidman, LLP
23.3+ Consent of Alex S. Navarro (included in Exhibit 5.1 above)
24.1* Power of Attorney
</TABLE>

- ------------------------

* Previously filed

+ Filed herewith

<PAGE>

EXHIBIT 5.1

iTurf Inc.
435 Hudson Street
New York, New York 10014

November 19, 1999

iTurf Inc.
435 Hudson Street
New York, New York 10014

Dear Sirs:

I am the Chief Operating Officer, Secretary and General Counsel of iTurf
Inc., a Delaware corporation (the "Company"), and I am rendering this opinion in
connection with the Registration Statement on Form S-1 (No. 333-904535) with
exhibits thereto (the "Registration Statement") filed by the Company under the
Securities Act of 1933 (the "Act"), relating to the registration of 3,586,996
shares (the "Shares") of Class A common stock, par value $.01 per share, of the
Company.

As such counsel, I have participated in the preparation of the Registration
Statement and have reviewed the corporate proceedings in connection with the
issuance of the Shares. I have also examined and relied upon originals or
copies, certified or otherwise authenticated to my satisfaction, of all such
corporate records, documents, agreements and instruments relating to the
Company, and certificates of public officials and of representatives of the
Company, and have made such investigations of law, and have discussed with
representatives of the Company and such other persons such questions of fact, as
I have deemed proper and necessary as a basis for rendering this opinion.

Based upon, and subject to, the foregoing, I am of the opinion that the
Shares are duly authorized, and when issued as contemplated by the Registration
Statement, will be validly issued, fully paid, and non-assessable.

I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving the foregoing consent, I do not admit that I
am in the category of persons whose consent is required under Section 7 of the
Act, or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.

Very truly yours,

/s/ Alex S. Navarro

<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the use of our report dated January 15, 1999, with
respect to the balance sheet of gURL, Interactive Inc. included in Amendment
No. 1 to the Registration Statement (Form S-1 No. 333-90435) and the related
Prospectus of iTurf Inc. for the registration of 3,586,996 shares of its
Class A Common Stock.

ERNST & YOUNG LLP
New York, New York
November 18, 1999

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts"
and to the use of our report dated February 28, 1999 (except to the second
paragraph of Note 1, as to which the date is April 1, 1999), in Amendment No.
1 to the Registration Statement (Form S-1 No. 333-90435) and the related
Prospectus of iTurf Inc. for the registration of 3,586,996 shares of its
Class A Common Stock.

ERNST & YOUNG LLP
New York, New York
November 18, 1999

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

iTurf Inc.
New York, New York

We hereby consent to the use in the Prospectus constituting a part of this
Registration Statement of our report dated October 13, 1999, relating to the
financial statements of [email protected], INC., which is contained in that
Prospectus.

We also consent to the reference to us under the caption "Experts" in the
Prospectus.

BDO SEIDMAN, LLP

Woodbridge, New Jersey
November 19, 1999