DAVIDS BRIDAL INC, S-1/A, 1999-04-07

DAVIDS BRIDAL INC
S-1/A, 1999-04-07
WOMEN'S CLOTHING STORES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 7, 1999

REGISTRATION NO. 333-72693

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

DAVID'S BRIDAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
FLORIDA 5632 65-0214563
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NO.) IDENTIFICATION NO.)
</TABLE>

44 WEST LANCASTER AVENUE, SUITE 250
ARDMORE, PA 19003
(610) 896-2111
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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STEVEN ERLBAUM
CHAIRMAN OF THE BOARD
44 WEST LANCASTER AVENUE, SUITE 250
ARDMORE, PA 19003
(610) 896-2111
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES OF ALL COMMUNICATIONS TO:

<TABLE>
<S> <C>
ALAN SINGER SARAH BESHAR
MORGAN, LEWIS & BOCKIUS LLP DAVIS POLK & WARDWELL
1701 MARKET STREET 450 LEXINGTON AVENUE
PHILADELPHIA, PA 19103-2921 NEW YORK, NY 10017
(215) 963-5000 (212) 450-4000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date 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. [ ]
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 this form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO OFFERING AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED(1) PRICE PER SHARE OFFERING PRICE(1)(2) REGISTRATION FEE(3)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 8,984,375 $17.00 $152,734,375 $42,461
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</TABLE>

(1) Includes shares which the Underwriters will have the option to purchase to
cover over-allotments, if any.

(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(a) under the Securities Act of 1933, as amended.

(3) This fee was paid on February 19, 1999.

------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH
SECTION 8(a), MAY DETERMINE.

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SUBJECT TO COMPLETION -- APRIL 7, 1999

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PROSPECTUS
, 1999
[DAVID'S BRIDAL, INC. LOGO]

7,812,500 SHARES OF COMMON STOCK

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DAVID'S BRIDAL, INC.:

- We are the largest and only national retailer of bridal gowns and
bridal-related apparel in the United States.

- David's Bridal, Inc.
44 West Lancaster Avenue, Suite 250
Ardmore, PA 19003
(610) 896-2111

PROPOSED SYMBOL AND MARKET:

- DBR/NYSE
THE OFFERING:

- - - We are offering 1,562,500 of the shares and existing shareholders are
offering 6,250,000 of the shares.

- - - The underwriters have an option to purchase an additional 1,171,875
shares from the selling shareholders to cover over-allotments.

- - - This is our initial public offering, and no public market currently
exists for our shares.

- - - We plan to use the proceeds from this offering to repay bank debt, to
fund new store growth, for capital expenditures and for general
corporate purposes. We will not receive any proceeds from the shares
sold by the selling shareholders.

<TABLE>
<CAPTION>
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Per Share Total
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<S> <C> <C>
Public offering price (Estimated): $15.00 - $17.00 $
Underwriting fees:
Proceeds to David's Bridal:
Proceeds to selling shareholders:
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</TABLE>

THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 8.

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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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DONALDSON, LUFKIN & JENRETTE LEGG MASON WOOD WALKER
INCORPORATED

The undersigned is facilitating Internet distribution.

DLJdirect INC.

WE WILL AMEND AND COMPLETE THE INFORMATION IN THIS PROSPECTUS. ALTHOUGH WE ARE
PERMITTED BY US FEDERAL SECURITIES LAWS TO OFFER THESE SECURITIES USING THIS
PROSPECTUS, WE MAY NOT SELL THEM OR ACCEPT YOUR OFFER TO BUY THEM UNTIL THE
DOCUMENTATION FILED WITH THE SEC RELATING TO THESE SECURITIES HAS BEEN DECLARED
EFFECTIVE BY THE SEC. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
OR OUR SOLICITATION OF YOUR OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION
WHERE THAT WOULD NOT BE PERMITTED OR LEGAL.
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[Depicted in the inside front cover page is a map depicting the states in
which David's Bridal has its store locations, photographs of the exterior and
interior of one of its prototypical stores and a photograph of a model wearing a
wedding gown.]

TABLE OF CONTENTS

<TABLE>
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PAGE
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Prospectus Summary.............. 3
Risk Factors.................... 8
Forward-Looking Statements...... 14
Use of Proceeds................. 15
Dividend Policy................. 15
Capitalization.................. 16
Dilution........................ 17
Selected Consolidated Historical
Financial and Operating
Data.......................... 18
Management's Discussion and
Analysis of Financial
Conditions and Results of
Operations.................... 20
Business........................ 28
Management...................... 38
</TABLE>

<TABLE>
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PAGE
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Certain Relationships and
Related Transactions.......... 44
Principal and Selling
Shareholders.................. 45
Description of Capital Stock.... 48
Shares Eligible for Future
Sale.......................... 50
Underwriting.................... 52
Legal Matters................... 54
Experts......................... 54
Available Information........... 54
Reports to Security Holders..... 54
Index to Consolidated Financial
Statements.................... F-1
</TABLE>

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
You should read the entire prospectus carefully.

DAVID'S BRIDAL

OVERVIEW

We are the largest and only national retailer of bridal gowns and
bridal-related apparel and accessories in the United States, operating 81 stores
in 30 states as of April 3, 1999. We have created a distinctive shopping
experience designed to attract a majority of potential bridal customers. We
provide our customers with excellent value by offering a broad, in-stock
assortment of bridal gowns and bridal-related apparel at popular prices,
together with service designed to exceed customers' expectations.

We believe that the breadth and depth of our in-stock assortments in our
primary bridal and bridal-related products far exceeds those of other bridal
retailers. Our broad in-stock assortments enable us to offer the convenience of
one-stop shopping for the bridal party, including brides, bridesmaids,
mothers-of-the-bride and -groom and flower girls. We also offer a variety of
special occasion dresses and accessories for events such as proms, pageants,
homecomings and other formal affairs. Our in-house staff coordinates the design
and, through a Hong Kong-based joint venture, procures virtually all of our
bridal gowns. This results in lower product costs and a shorter time period
between order and delivery than we have experienced in the past and allows us to
frequently update our product assortment. Our merchandising strategy is to
target customers across a wide range of income levels and offer apparel of
excellent value at everyday prices typically ranging from $99 to $899. We
recognize that the bridal customer expects a higher level of customer service
than the typical retail customer. We seek to exceed our customers' expectations
for service by providing attentive and knowledgeable sales assistance,
convenient store design and extended hours of operation relative to other bridal
retailers.

In mid-1995, we commenced key initiatives which we continue to build upon
to increase profitability and support controlled growth. While the immediate
effect was decreased profitability in fiscal 1996, we believe that these
measures have facilitated controlled growth and enhanced profitability in fiscal
1997 and fiscal 1998. We have achieved comparable store sales growth of 13.1% in
fiscal 1997 and 18.1% in fiscal 1998. In addition, our total revenues increased
by 36.6% in fiscal 1997 and 44.2% in fiscal 1998 and our operating margin
increased from 5.7% in fiscal 1997 to 7.9% in fiscal 1998.

INDUSTRY OVERVIEW

We believe the bridal market is highly fragmented, with approximately 7,500
stores nationwide and estimate that less than five percent of bridal retailers
operate more than one store. We estimate the domestic market for the various
apparel and accessories purchased by brides, bridesmaids and other members of
the bridal party to be in excess of $4 billion per year. Historically, no
retailer has been dominant in the bridal retailing industry.

Most bridal retailers are small and do not have significant bargaining
power with the manufacturers of bridal apparel. As a result, the manufacturers
dictate the styles that will be available to the retailers and require retailers
to make a significant investment in samples of those styles during each selling
season. Typically, bridal apparel retailers offer a limited selection of bridal
gowns and bridesmaid dresses and provide samples in only the most common sizes,
8 and 10. In general, customers are not able to purchase bridal gowns or
bridesmaid dresses "off-the-rack." The majority of bridal gown purchases are
made by placing a substantial deposit to order the gown, waiting up to 20 weeks
for delivery, and tailoring the fit of the gown through multiple fittings and

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alterations. These factors can make the bridal shopping experience time
consuming, inconvenient and stressful.

KEY COMPETITIVE STRENGTHS

Largest and Only National Bridal Apparel Retailer. Our national scope and
size provides us with a number of strategic advantages, including:

- spreading our fixed operating expenses over a larger revenue base

- maintaining a large in-stock inventory of dresses

- updating and expanding product offerings

- advertising on a national basis

Unique Merchandising Strategy. Our merchandising strategy is to offer the
broadest in-stock selection of bridal-related apparel in sizes 2 through 26. We
also provide special occasion dresses, headpieces, shoes, handbags, jewelry and
gloves to offer one-stop shopping to the entire bridal party. As a result, our
customers are often able to try on, purchase and take their gowns home on the
same day. Of our total dress assortment, approximately 225 of our best-selling
styles, which we call our core assortment, are typically featured in our
advertising and are maintained in stock, either in stores or in the distribution
center.

Control of Product Design, Procurement and Distribution. We control the
production process for a majority of our products from design through
distribution. We have an in-house design staff which interprets industry trends
and develops exclusive designs. We deal directly with factories and have
established relationships with important manufacturers, resulting in lower
product costs and shorter time periods between order and delivery than we have
experienced in the past. Furthermore, unlike most manufacturers which update
their lines only two to three times per year, we design and develop styles for
our customers continually throughout the year.

Superior Customer Service. Our objective is to exceed our customers'
expectations for service. Purchasing a wedding gown is an emotional experience,
and we devote significant effort to recruiting and training an attentive and
knowledgeable sales staff. Our convenient store design is another important
element of customer service. Our current prototype presents merchandise in a
highly accessible, 10,000 square foot format which enables us to provide
personalized service and sell related accessories. In addition, all of our
stores, except for two outlets, provide in-store alterations services.

GROWTH STRATEGY

We believe we are well positioned to capitalize on growth opportunities and
can achieve profitable and controlled growth through opening new stores and
increasing sales productivity of existing stores. We plan to continue to
diversify geographically throughout the United States by opening 22 stores in
new and existing markets in fiscal 1999 and 22-25 stores in fiscal 2000. We also
seek to increase the sales productivity of existing stores by using our
multi-media marketing strategy to promote David's Bridal as the dominant
national brand name in bridal retailing. In addition, we strive to create a
favorable experience for the bride to encourage referrals to additional members
of the bridal party and other brides-to-be and, as a result, increase sales.

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THE OFFERING

<TABLE>
<S> <C>
Common stock offered by:
David's Bridal....................... 1,562,500 shares
The selling shareholders(1).......... 6,250,000 shares
-----------------
Total........................... 7,812,500 shares
Common stock to be outstanding after this
offering(1)............................. 18,299,160 shares
Proposed New York Stock Exchange Symbol... DBR
</TABLE>

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(1) Includes 93,750 shares to be sold in the offering, which are to be issued
immediately prior to completion of the offering in connection with the
exercise of stock options.

The table above excludes an aggregate of 1,335,049 shares issuable upon
exercise of stock options outstanding at January 2, 1999, plus an additional
44,201 shares reserved for issuance in connection with future stock options and
other awards under our stock option plan. See "Management--Stock Option Plan".

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

We are a successor to a bridal retailing business that began in Ft.
Lauderdale, Florida in 1950 and were incorporated in Florida in 1990. Our
principal executive offices are located at 44 West Lancaster Avenue, Suite 250,
Ardmore, Pennsylvania 19003. Our telephone number is (610) 896-2111. Our world
wide web address is http:/www.davidsbridal.com. OUR WEB SITE IS NOT PART OF THIS
PROSPECTUS.
------------------------

Generally, the information in this prospectus: (1) assumes that the
over-allotment option is not exercised; (2) assumes a 1.473 for 1 common stock
split effected on April , 1999; (3) reflects the conversion of all outstanding
shares of class A, B, C and D preferred stock into an aggregate of 6,903,062
shares of common stock at the closing of this offering; and (4) reflects the
conversion of all outstanding shares of class A common stock into an equal
number of shares of common stock. Our fiscal year ends on a Saturday near
December 31 and is named for the calendar year ending on that December 31. For
example, our fiscal year ended January 2, 1999 is called "fiscal 1998".

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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS EXCEPT PER SHARE, NET SALES PER SQUARE FOOT AND
NUMBER OF STORES DATA)

Our fiscal year consists of 52 or 53 weeks, ends on a Saturday near
December 31 and is named for the calendar year ending on that December 31. All
fiscal years presented include 52 weeks of operations except for fiscal 1996,
which includes 53 weeks of operations.

You should read the following summary consolidated financial and operating
data together with Management's Discussion and Analysis of Financial Condition
and Results of Operations and our consolidated financial statements and related
notes included elsewhere in this prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR
----------------------------------------------------
1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................. $27,523 $45,453 $63,158 $85,785 $123,656
Other income, primarily alterations
and third party promotional fees... 1,331 2,634 4,188 6,228 9,062
Total revenues..................... 28,854 48,087 67,346 92,013 132,718
Gross profit, net of buying,
distribution and occupancy costs... 14,258 21,569 26,457 38,943 58,105
Selling, general and administrative
expenses........................... 11,930 19,114 26,453 33,738 47,581
Income from operations................ 2,328 2,455 4 5,205 10,524
Interest expense, net................. 491 467 586 1,248 1,087
Net income (loss)(a).................. 1,107 700 (415) 2,598 5,819
Net income (loss) per common share
(b)(c):
Basic.............................. $ 0.08 $ 0.06 $ (0.04) $ 0.26 $ 0.60
Diluted(d)......................... $ 0.08 $ 0.04 $ (0.04) $ 0.15 $ 0.32
Weighted average shares outstanding:
Basic.............................. 13,743 12,153 10,207 9,849 9,751
Diluted............................ 14,702 16,791 10,207 17,472 18,375
Pro forma basic earnings per common
share(e)........................... $ 0.35
Pro forma basic weighted average
shares outstanding(e).............. 16,654
STORE DATA:
Number of stores, end of period....... 23 36 48 59 77
Total square feet, end of period...... 200 328 455 569 766
Comparable store sales increase(f).... 20.9% 11.3% 1.0% 13.1% 18.1%
Average net sales per store(g)........ $ 1,816 $ 1,769 $ 1,679 $ 1,809 $ 2,022
Net sales per square foot(h).......... $ 193 $ 204 $ 184 $ 191 $ 207
OPERATING DATA:
Gross profit margin, net of buying,
distribution and occupancy costs... 49.4% 44.9% 39.3% 42.3% 43.8%
Selling, general and administrative
expense percentage................. 41.3% 39.8% 39.3% 36.6% 35.9%
Operating income margin............... 8.1% 5.1% 0.0% 5.7% 7.9%
Capital expenditures.................. $ 1,109 $ 5,029 $ 4,931 $ 7,470 $ 8,105
Depreciation and amortization,
excluding amortization of debt
discount and debt issuance costs... $ 284 $ 632 $ 1,393 $ 2,022 $ 2,896
</TABLE>

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<TABLE>
<CAPTION>
JANUARY 2, 1999
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PRO FORMA
AS
ACTUAL ADJUSTED(i)
<S> <C> <C>
BALANCE SHEET DATA:
Inventories............................................... $37,458 $37,458
Working capital........................................... 27,335 33,125
Total assets.............................................. 65,562 70,764
Long-term debt and capital lease obligations, excluding
current portion........................................ 19,647 2,547
Shareholders' equity...................................... 27,520 49,994
</TABLE>

(a) Fiscal 1995 reflects a net loss of $550 from early extinguishment of debt,
net of income tax benefit of $323.

(b) Gives retroactive effect to the stock split of 1.473 to 1. See note 2 to our
consolidated financial statements.

(c) Net income before extraordinary item for fiscal year 1995 was $0.10 per
common share (basic) and $0.07 per common share (diluted).

(d) Diluted earnings per share assumes that preferred stock has been converted
at historical conversion rates. See note 9 to our consolidated financial
statements.

(e) Includes preferred stock which will convert into 6,903,062 shares of common
stock immediately prior to the closing of the offering.

(f) Includes net sales plus alterations income. Stores that have been relocated
within the same market are considered comparable stores. A store becomes
comparable in the first month following 12 full months of operation.

(g) Includes net sales plus alterations income for stores open for the entire
period indicated.

(h) Calculated by dividing net sales plus alterations income by the total square
footage of stores open for the entire period indicated.

(i) Pro forma, as adjusted, represents actual data as adjusted to give effect to
the issuance of an aggregate of 6,903,062 shares of common stock upon
conversion of all outstanding shares of preferred stock upon the
consummation of this offering, the exercise, for an aggregate exercise price
of $461,250, of options to purchase 93,750 shares of common stock to be sold
in the offering and the sale of 1,562,500 shares of common stock offered by
us at an assumed initial public offering price of $16.00 after deducting
underwriting discounts and commissions and estimated offering expenses and
the application of the estimated net proceeds.

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RISK FACTORS

You should carefully consider the following factors and other information
in this prospectus before deciding to invest in shares of our common stock.

RISKS RELATING TO OUR BUSINESS:

WE MAY NOT BE ABLE TO EFFECTIVELY MANAGE OUR GROWTH

Our strategy is designed to enhance profitability by increasing sales in
existing stores and generating sales in new stores. However, we must
successfully manage our growth to realize this strategy. Our growth will be
adversely affected if we are unable to:

- identify suitable markets and sites for new stores

- negotiate leases on acceptable terms

- maintain levels of service that are expected by customers

- provide a diverse inventory of bridal gowns and flower girl, bridesmaid,
mothers-of-the-bride and -groom and other special occasion dresses,
accessories and other product offerings in attractive styles

- avoid reducing sales and profitability at existing stores when opening
new stores in the same region or market area

- offer prices that appeal to a broad range of consumers

- manage inventory on an effective basis

- deliver products on a timely basis

- test new product offerings on an effective basis

- hire, train and retain competent managers and personnel capable of
providing high levels of customer service

- improve, upgrade and expand our infrastructure to accommodate our growth

- expand our distribution facility or add additional distribution
facilities, as necessary

We will be materially adversely affected if we are unable to successfully
manage our growth.

IF OUR MANAGEMENT INFORMATION SYSTEMS ARE DISRUPTED OR WE ARE NOT ABLE TO
EFFECTIVELY UPGRADE AND EXPAND OUR MANAGEMENT INFORMATION SYSTEMS, OUR BUSINESS
OPERATIONS AND EXPANSION COULD BE ADVERSELY AFFECTED

We depend on management information systems for all major aspects of our
business. We will be materially adversely affected if our management information
systems are disrupted or we are unable to improve, upgrade and expand our
systems on an effective basis. Our expansion strategy may be adversely affected
if we are not able to successfully expand our current hardware and network
infrastructure, including the development of a communications infrastructure and
the creation of data warehouses for store, marketing and customer information to
improve controls and enhance sales and operational capabilities. We cannot
assure you that our planned expansion or upgrades will be completed on a timely
basis and successfully. See "Business--Management Information Systems."

WE MAY NOT BE ABLE TO ANTICIPATE AND RESPOND TO CONSUMER DEMAND

Our success will depend on our ability to anticipate and respond to
consumer demand. We must identify and respond to changing consumer preferences
with respect to bridal gowns and related bridal wear, accessories and our other
product offerings. Fashion trends can be volatile. This is particularly true for
bridesmaid and special occasion dresses. Our success depends on our ability to
anticipate and effectively respond to these trends. If we do not provide
merchandise that is desired by a sufficient number of customers, we will be
compelled to reduce prices and we may be left with unsaleable inventory. Our

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business will be materially adversely affected if we do not anticipate and
effectively respond to customer demands.

WE RELY HEAVILY ON ASIAN MANUFACTURERS, AND OUR ABILITY TO PROVIDE MERCHANDISE
COULD BE ADVERSELY AFFECTED IF OUR IMPORTS ARE DISRUPTED

Substantially all of our bridal gowns and flower girl dresses are
manufactured in Asia. Substantially all of our other product offerings are
currently manufactured domestically. We may in the future seek to manufacture a
portion of this apparel internationally. Our business could be materially
adversely affected by our reliance on international manufacturing. Some of the
risks in manufacturing overseas include:

- changes in laws and regulations

- compliance with labor laws and ethical standards

- tariffs, quotas and other trade barriers

- work stoppages

- political and financial instability

- fluctuations in currency exchange rates

- increases in freight costs

Virtually all of our bridal gowns are manufactured in China. There have
been a number of recent trade disputes between China and the United States
during which the Unites States has threatened to impose punitive tariffs and
duties on products imported from China and to withdraw China's "most favored
nation" trade status. Since a substantial portion of our total revenues is
derived from the sale of bridal gowns, we are particularly vulnerable to the
risk of loss of the most favored nation status for China, changes in the current
tariff or duty structures or the adoption by the United States of other trade
policies or sanctions adverse to China.

In addition, the violation of labor laws by an independent manufacturer, or
the divergence of a manufacturer's labor practices from those generally accepted
as ethical in the United States, could have a material adverse effect on our
image and reputation and as a result, adversely effect our business. We cannot
control the actions of our manufacturers and we cannot assure you that they will
conduct their business using ethical labor practices.

Furthermore, our import operations are subject to constraints imposed by
bilateral textile agreements between the United States and a number of foreign
countries. These agreements and other applicable treaties impose quotas on the
amounts and types of merchandise which may be imported into the United States
from these countries. These agreements and other applicable treaties also allow
the United States to impose restraints at any time on the importation of
categories of merchandise that, under the terms of the agreements, are not
currently subject to specified limits. We may be materially adversely affected
if the United States or the countries in which our products are produced impose
new quotas, duties, tariffs or other restrictions, or adversely adjust the
prevailing quota, duty or tariff levels.

WE RELY ON OUR JOINT VENTURE PARTNER TO INSURE THE QUALITY OF IMPORTED GOODS,
AND OUR QUALITY CONTROL COULD BE NEGATIVELY AFFECTED IF OUR JOINT VENTURE
PARTNER DOES NOT PERFORM ACCEPTABLY

We depend on our Hong Kong based joint venture to handle our relationships
with international manufacturers of our bridal wear. This joint venture is
equally owned by us and one of our shareholders, Addwood Limited. We handle
negotiations with the manufacturers with respect to basic economic terms and
product design. We depend on our joint venture partner to identify suitable
manufacturers and insure that our manufacturers are meeting design
specifications, adhering to shipping requirements and complying with our
business standards. Our business may be materially adversely affected if our
joint venture partner does not perform its responsibilities on an acceptable
basis or terminates our relationship and we are

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unable to replace our joint venture partner on a prompt basis. See note 5 to our
consolidated financial statements.

THE LIMITED RESOURCES OF MANY OF OUR MANUFACTURERS MAY RESTRICT THE EXPANSION
OF OUR BUSINESS

Many of the third parties we use to manufacture our apparel have limited
resources, production capabilities and operating histories. These manufacturers
may be unable to support the continued expansion of our business. Our
relationships with our manufacturers are not on a contractual basis and do not
assure adequate supply or quality or acceptable pricing on a long-term basis. A
manufacturer could discontinue selling to us at any time. Our business may be
materially adversely affected if we are unable to promptly replace a
manufacturer who is unwilling or unable to satisfy our requirements.

WE MAY NOT BE ABLE TO MAINTAIN OUR COMPARABLE STORE SALES GROWTH AS A RESULT
OF FLUCTUATIONS IN COMPARABLE STORE SALES

Our comparable store sales have fluctuated significantly in the past.
Comparable store sales will continue to fluctuate. Comparable store sales may be
affected by many factors, including:

- competition and economic conditions

- fashion trends

- weather conditions

- new store openings in existing markets

- procurement and management of merchandise inventory

- customer response to new and existing styles

- store relocations

We are not likely to maintain comparable store sales growth at our current
levels. Our stock price may be materially adversely affected by declines and
fluctuations in our comparable store sales.

OUR FINANCIAL RESULTS MAY NOT MEET EXPECTATIONS AS A RESULT OF FLUCTUATIONS IN
OUR QUARTERLY FINANCIAL RESULTS

Our financial results may substantially fluctuate during any reporting
period due to a number of factors. Historical trends indicate that our sales are
typically highest from January through April and lowest from October through
December. Our financial results may also fluctuate as a result of:

- performance of new and existing stores

- pre-opening expenditures for new stores

- the timing of new store openings

- the timing of holidays

- competition and economic conditions

- fashion trends

- weather conditions

- procurement and management of merchandise inventory

- customer response to new and existing styles

Our expenditures for inventory, personnel and other pre-opening items for
new stores may adversely affect period-to-period financial results. New stores
may fail to generate sales as promptly as planned. New stores may also depress
sales in our other stores that are located in the same regions or market areas.

10
<PAGE> 12

Our financial results may not meet the expectations of analysts and
investors. The market price of our common stock is likely to decline when we do
not meet these expectations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Quarterly Results and
Seasonality."

ADDITIONAL FINANCING MAY NOT BE AVAILABLE TO ENABLE US TO RESPOND TO
COMPETITIVE PRESSURES OR UNANTICIPATED REQUIREMENTS

Our business may be adversely affected if the unavailability of additional
financing prevents us from responding to competitive pressures or unanticipated
requirements. We may need additional financing if we accelerate our expansion
program or our operating results decline. Additional funds may also be necessary
to respond to competitive pressures or unanticipated requirements. Additional
financing may not be available on satisfactory terms or at all. Any additional
equity financing may cause investors to experience dilution. Any debt financing
may result in restrictions on our spending or payment of dividends. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

OUR SUCCESS IS DEPENDENT UPON OUR KEY PERSONNEL WHO WE MAY NOT BE ABLE TO
RETAIN OR REPLACE TO OUR SATISFACTION

Our success will depend on the continued employment of our executive
management team after this offering. If one or more members of our management
team do not continue in their present positions, our business could be
materially adversely affected.

Steven H. Erlbaum, our Chairman and Chief Executive Officer, will resign
from his position as Chief Executive Officer upon the closing of this offering.
Robert D. Huth, our President and Chief Operating Officer, will also become our
Chief Executive Officer upon the closing of this offering. Although Mr. Huth has
been primarily responsible for running our day-to-day operations since joining
us in 1995, we will be materially adversely affected if Mr. Huth is unable to
assume these added responsibilities on a timely and effective basis.

We have employment agreements with Robert D. Huth and with Philip Youtie
that will become effective upon completion of this offering. Mr. Huth's
employment agreement will provide for a three year term. Mr. Youtie's employment
agreement will provide for a two year term. In addition, effective following
completion of this offering, Steven H. Erlbaum will become a consultant to us.
We will have a three year consulting agreement with Steven H. Erlbaum. We have
no employment or consulting agreement with any of our other employees or
consultants. See "Management -- Employment and Consulting Agreements."

Our expansion strategy will depend on our ability to hire capable managers
and other store level personnel. The need for such personnel is particularly
important because purchasers of bridal wear typically expect a high level of
service and attentiveness. We will be materially adversely affected if we do not
hire capable store managers and other store level personnel.

OUR SYSTEMS MAY NOT BE YEAR 2000 COMPLIANT WHICH COULD PREVENT US FROM BEING
ABLE TO CONDUCT NORMAL BUSINESS ACTIVITIES

Historically, many computerized systems have used two digits rather than
four to define the applicable year. Computer equipment and software and devices
with imbedded technology that are time-sensitive may recognize a date using "00"
as the year 1900 rather than the year 2000. This could result in system failure
or miscalculations. This problem is generally referred to as the "Year 2000
issue."

As a result of the Year 2000 issue, possible adverse consequences to our
business include the inability to engage in normal business activities resulting
from one or more of the following:

- loss of communications links with one or more of our store locations

- disruptions in the movement of inventory to and from our distribution
center and between store locations

11
<PAGE> 13

- failure of our inventory management systems

- the inability to process transactions with customers

- the inability to send purchase orders

- the inability to fulfill customer orders in a timely fashion

- failure of our vendors to provide us with suitable products

- failure of our credit card processors to correctly process customer
transactions

- failure of our telecommunications service

Not all of our information systems are Year 2000 compliant and not all of
the third parties with whom we conduct our business have indicated that their
information systems are Year 2000 compliant. If we and these third parties do
not effectively change, or replace, our management information systems to make
them Year 2000 compliant, our business will be materially adversely affected. We
discuss the impact that the Year 2000 issue may have on our business, our
expected costs to address our Year 2000 issues and our contingency plans in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section of this prospectus.

RISKS RELATING TO OUR INDUSTRY:

A DETERIORATION OF ECONOMIC CONDITIONS COULD HAVE A NEGATIVE IMPACT ON OUR
BUSINESS

Our sales could be materially adversely affected by unfavorable economic
conditions. Purchases of bridal wear and accessories may decline during
recessionary periods. Prices that consumers may be willing to pay for bridal
wear and accessories may be lower during times of economic duress. Our business
will likely be materially adversely affected by a deterioration in general
economic conditions.

WE FACE STRONG COMPETITION IN THE BRIDAL WEAR BUSINESS

The retail bridal wear business is highly competitive. We compete with
local stores, regional chains and bridal warehouses that may have an established
following in a community. We also compete with department stores that may also
sell through catalogs and that have substantially greater financial and other
resources. Specialty stores and a larger number of department stores provide
additional competition in the sale of bridesmaid and special occasion dresses.

Many retailers of other products that follow a growth strategy similar to
ours rely on large selections and comparatively low prices to compete. However,
the purchase of bridal wear is a very personal and emotional decision. We must
provide a high level of service to compete effectively. Our business will be
materially adversely affected if we do not compete successfully. See
"Business--Competition in the Bridal Industry."

RISKS RELATING TO THIS OFFERING:

A SMALL NUMBER OF SHAREHOLDERS MAY CONTROL ALL MAJOR CORPORATE DECISIONS DUE
TO SIGNIFICANT OWNERSHIP CONCENTRATION OF OUR COMMON STOCK

Our major shareholders will have the power to elect our board of directors
and approve actions requiring the approval of the majority of our shareholders
if they decide to act together. Upon the consummation of this offering, Steven
H. Erlbaum, Michael C. Erlbaum, Gary E. Erlbaum, Philip Youtie, and Steven J.
Sidewater, together with members of their immediate family, trusts for the
benefit of members of their immediate family, and family partnerships in which
members of their immediate family are partners, will own 10.2%, 2.4%, 5.5%, 6.8%
and 3.4%, respectively, of our outstanding common stock. The Clipper Group
partnership will own 22.6% of our outstanding common stock. These shareholders
will own 50.9% in the aggregate. Steven, Michael and Gary Erlbaum are brothers
and directors. The interests of these significant shareholders could conflict
with the interests of our other shareholders.

12
<PAGE> 14

OUR COMMON STOCK HAS NEVER BEEN PUBLICLY TRADED, SO WE CANNOT PREDICT THE
EXTENT TO WHICH A TRADING MARKET WILL DEVELOP FOR OUR COMMON STOCK

There has not been a public market for our common stock. We cannot predict
the extent to which a trading market will develop or how liquid that market
might become. The initial public offering price will be determined by
negotiations between representatives of the underwriters, the selling
shareholders and us and may not be indicative of prices that will prevail in the
trading market.

ANTI-TAKEOVER PROVISIONS COULD DELAY OR PREVENT A SALE OF DAVID'S BRIDAL

We are a Florida corporation. There are anti-takeover provisions of Florida
law that could make it more difficult for a third party to acquire control of
our company, even if such a change in control would be beneficial to our
shareholders. Our articles of incorporation divide our board into three classes
and provide that our board of directors may issue preferred stock without
shareholder approval. The existence of a classified board or issuance of
preferred stock could make it more difficult for a third party to acquire our
company.

FUTURE SALES OF OUR SHARES BY OUR CURRENT SHAREHOLDERS MAY ADVERSELY AFFECT
THE PRICE OF OUR COMMON STOCK

If our shareholders sell substantial amounts of our common stock, including
shares issued upon the exercise of outstanding options, in the public market
following this offering, then the market price of our common stock could fall.
Restrictions under the securities laws and lock-up agreements signed by several
of our significant shareholders limit the number of shares of common stock
available for sale in the public market. Effective upon completion of this
offering, the holders of 10,388,691 shares of common stock and options
exercisable into an aggregate of 560,262 shares of common stock have agreed,
subject to some exceptions, not to sell any such securities for 180 days after
this offering without the prior written consent of Donaldson, Lufkin and
Jenrette Securities Corporation.

Following completion of the offering holders of 10,486,660 shares of common
stock will have demand and piggy-back registration rights. The demand
registration rights may only be exercised by The Clipper Group, but all holders
of registration rights are permitted to include shares in the demand offering on
the same basis as The Clipper Group. The exercise of such rights could adversely
affect the market price of our common stock. We plan to file a registration
statement to register all shares of common stock under our stock option plan.
After such registration statement is effective, shares issued upon exercise of
stock options will be eligible for resale in the public market without
restriction.

THIS OFFERING WILL BENEFIT OUR CURRENT SHAREHOLDERS

Our current shareholders, including members of management, will recognize
significant benefits from this offering. These benefits include the creation of
a public market for our common stock which will allow some of our existing
shareholders to sell shares in this offering and enable our shareholders to
liquidate their investments in the future. The selling shareholders, including
our Chairman and President and several members of our board of directors, will
sell a significant number of shares in this offering. The excess of the initial
public offering price over amounts paid for common stock being sold by the
selling shareholders that are our executive officers and directors, together
with members of their immediate family, trusts for the benefit of members of
their immediate family, and family partnerships in which members of their
immediate family are partners, including the amounts payable upon the exercise
of stock options, is approximately $47,919,000 million, or $15.69 per share
based on an assumed offering price of $16.00 per share. The excess of the
initial public offering price over amounts paid for common stock held by our
executive officers and directors, together with members of their immediate
family, trusts for the benefit of members of their immediate family, and family
partnerships in which members of their immediate family are partners, following
completion of this offering is approximately $84,736,000, or $14.88 per share
based on an assumed offering price of $16.00 per share.

13
<PAGE> 15

FORWARD-LOOKING STATEMENTS

This prospectus contains forward looking statements under the captions
"Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business" and elsewhere in this
prospectus. These forward-looking statements include statements about the
following:

- the competitiveness of the bridal industry

- the future availability and prices of materials used in our business

- our business and growth strategies and other statements contained herein
that are not historical facts

When used in this prospectus, the words "anticipate," "believe," "estimate"
and similar expressions are generally intended to identify forward-looking
statements. There are important factors that could cause actual results to
differ materially from those expressed or implied by such forward-looking
statements, including:

- changes in general economic and business conditions and those in the
bridal industry in particular

- actions of competitors

- our ability to recover our costs in the pricing of our products

- the extent to which we are able to develop new products and expand our
business into new markets

- our inability to effectively manage our growth

- the level of demand for our products

- changes in our business strategies

- developments in international markets

- our inability to obtain financing when required

- other factors discussed under "Risk Factors"

14
<PAGE> 16

USE OF PROCEEDS

The net proceeds we will receive from the sale of 1,562,500 shares in this
offering will be approximately $22.0 million. This is based upon an assumed
initial public offering price of $16.00 per share, after deducting underwriting
discounts and commissions and estimated offering expenses payable by us. We will
not receive any proceeds from the sale of shares of common stock by the selling
shareholders.

We intend to use approximately $6.0 million of the net proceeds to fund new
store growth and approximately $5.5 million of the net proceeds for capital
expenditures and the balance of the net proceeds to repay the outstanding
balance under our revolving credit agreement and for general corporate purposes.
Pending such uses, we will invest the net proceeds of this offering in
short-term, investment grade securities. The outstanding balance under our
revolving credit agreement was $7.0 million on April 3, 1999. Borrowings under
the revolving credit agreement bear interest at variable rates which averaged
6.2% at April 3, 1999. We may reborrow amounts under our revolving credit
agreement, which will be available for future borrowings through July 31, 2001.

DIVIDEND POLICY

We have not paid cash dividends on our common stock since converting from a
subchapter S-corporation in 1993. We currently intend to retain all future
earnings to fund the development and growth of our business. We do not currently
anticipate paying any cash dividends. Future decisions regarding cash dividends
on our common stock will be made by our board of directors. These decisions will
depend on our results of operations, financial position, capital requirements,
general business conditions and restrictions imposed by any financing
arrangements. Our revolving credit agreement currently prohibits the payment of
dividends. We may also face legal and regulatory restrictions on the payment of
dividends.

15
<PAGE> 17

CAPITALIZATION

The following table sets forth our actual, pro forma and pro forma, as
adjusted, capitalization. Our pro forma capitalization gives effect to:

- the conversion of all outstanding shares of preferred stock into an
aggregate of 6,903,062 shares of common stock upon the consummation of
this offering;

- the issuance of 93,750 shares to be sold in the offering, which are to be
issued immediately prior to completion of the offering in connection with
the exercise of stock options for an aggregate purchase price of
$461,250.

Our pro forma, as adjusted, capitalization gives effect to the pro forma
adjustments and:

- the sale of the 1,562,500 shares of common stock offered by us; and

- the application of the estimated net proceeds based on an assumed initial
public offering price of $16.00 per share.

<TABLE>
<CAPTION>
AS OF JANUARY 2, 1999
-----------------------------------
PRO FORMA,
ACTUAL PRO FORMA AS ADJUSTED
(IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents.................................. $ 320 $ 781 $ 5,938
Short-term debt, including current portion of capitalized
lease obligations........................................ $ 281 $ 281 $ 281
======= ======= =======
Capitalized lease obligations, less current portion........ 281 281 281
Long-term debt............................................. 19,366 19,366 2,266
------- ------- -------
Total long-term debt............................. 19,647 19,647 2,547
------- ------- -------
Shareholders' equity:
Preferred stock, par value $0.01 per share, 1,850,000
shares authorized; 171,792 shares of class A preferred
stock; 114,104 shares of class B preferred stock;
114,104 shares of class C preferred stock; and 686,402
shares of class D preferred stock issued and
outstanding actual; no shares issued and outstanding
pro forma and pro forma, as adjusted.................. 11 -- --
Common stock, par value $0.01 per share; shares
authorized; 9,739,848 shares issued and outstanding
actual; 16,736,660 shares issued and outstanding pro
forma and 18,299,160 shares issued and outstanding pro
forma, as adjusted.................................... 97 167 183
Additional paid-in capital............................... 18,282 18,684 40,681
Retained earnings........................................ 9,130 9,130 9,130
------- ------- -------
Total shareholders' equity............................ 27,520 27,981 49,994
------- ------- -------
Total capitalization............................. $47,167 $47,628 $52,541
======= ======= =======
</TABLE>

16
<PAGE> 18

DILUTION

The dilution table sets forth our net tangible book value after giving
effect to the conversion of preferred stock into 6,903,062 shares of common
stock and the issuance of 93,750 shares of common stock to be sold in the
offering, which are to be issued immediately prior to completion of the offering
in connection with the exercise of stock options with an aggregate exercise
price of $461,250. Our net tangible book value as of January 2, 1999 was $27.8
million or $1.66 per share. Our net tangible book value per share is determined
by subtracting the total amount of our liabilities from the total amount of our
tangible assets and dividing the remainder by the number of shares of our common
stock outstanding after giving effect to the conversion of preferred stock. The
price per share to the public of the shares of common stock offered by this
prospectus exceeds the net tangible book value per share prior to this offering.
Therefore, purchasers of shares of common stock in this offering will realize
immediate and substantial dilution in the net tangible book value of their
shares. The following table, based upon our net tangible book value as of
January 2, 1999, illustrates the dilution to purchasers of our common stock in
this offering, based on an assumed initial public offering price of $16.00 per
share.

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $ 16.00
Net tangible book value per share as of January 2, 1999,
after giving effect to the conversion of the preferred
stock and the exercise of stock options as described
above.................................................. $ 1.66
Increase in net tangible book value per share attributable
to new investors....................................... 1.06
-------
Pro forma net tangible book value per share after this
offering.................................................. 2.72
-------
Dilution per share purchased in this offering............... $ 13.28
=======
</TABLE>

The following table presents, as of January 2, 1999 and assuming an initial
public offering price of $16.00 per share:

- the number of shares of our common stock purchased from us;

- the total cash consideration paid;

- the issuance of 93,750 shares of common stock to be sold in the offering,
which are to be issued immediately prior to completion of the offering in
connection with the exercise of stock options with an aggregate exercise
price of $461,250;

- the average price per share paid by the existing holders of common stock
including the holders of common stock after giving effect to the
conversion of preferred stock; and

- the average price per share paid by new investors before deducting
estimated underwriting discounts and commissions and estimated offering
expenses payable by us.

<TABLE>
<CAPTION>
SHARES
PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ---------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C>
Existing shareholders................ 16,736,660 91.5% $35,849,328 58.9% $2.14
New investors........................ 1,562,500 8.5% 25,000,000 41.1 16.00
---------- ----- ----------- -----
Total...................... 18,299,160 100% $60,849,328 100%
========== ===== =========== =====
</TABLE>

The tables on this page exclude all outstanding options. See
"Management--Stock Option Plan" and note 10 to our consolidated financial
statements. The exercise of outstanding options having an exercise price less
than the initial public offering price would increase the dilution effect to new
investors that is shown on the tables.

Also, the second table on this page does not give effect to sales of shares
by the selling shareholders. Sales by the selling shareholders in this offering
will reduce the number of shares held by existing shareholders to 10,486,660
shares, or 57.3% of the shares outstanding, and will increase the number of
shares held by new investors to 7,812,500 shares, or 42.7% of the shares
outstanding.

17
<PAGE> 19

SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OPERATING DATA

The following table sets forth our selected consolidated statement of
operations and store, operating and balance sheet data. Our statement of
operations data for fiscal 1996, 1997 and 1998 and our balance sheet data as of
the end of fiscal 1997 and 1998 have been derived from our consolidated
financial statements, which have been audited by Arthur Andersen LLP,
independent public accountants, and are included elsewhere in this prospectus.
Our statement of operations data for fiscal 1994 and 1995 and the selected
balance sheet data as of the end of fiscal 1994, 1995 and 1996 have been derived
from consolidated financial statements which have been audited by Arthur
Andersen LLP, independent public accountants, and are not included in this
prospectus. Our fiscal year consists of 52 or 53 weeks, ends on a Saturday near
December 31 and is named for the calendar year ending on that December 31. All
fiscal years presented include 52 weeks of operations except for fiscal 1996,
which includes 53 weeks of operations. You should read the data set forth below
together with "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and our consolidated financial statements and notes
thereto appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------------------------------------------
1994 1995 1996 1997 1998
(IN THOUSANDS EXCEPT PER SHARE, NET SALES PER SQUARE FOOT AND
NUMBER OF STORES DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................. $27,523 $45,453 $63,158 $85,785 $123,656
Other income, primarily alterations and
third party promotional fees........... 1,331 2,634 4,188 6,228 9,062
------- ------- ------- ------- --------
Total revenues......................... 28,854 48,087 67,346 92,013 132,718
Cost of sales, including buying,
distribution and occupancy costs....... 14,596 26,518 40,889 53,070 74,613
------- ------- ------- ------- --------
Gross profit........................... 14,258 21,569 26,457 38,943 58,105
Selling, general and administrative
expenses............................... 11,930 19,114 26,453 33,738 47,581
------- ------- ------- ------- --------
Income from operations................. 2,328 2,455 4 5,205 10,524
Interest expense, net..................... 491 467 586 1,248 1,087
------- ------- ------- ------- --------
Income (loss) before income taxes...... 1,837 1,988 (582) 3,957 9,437
Income tax provision (benefit)............ 730 738 (167) 1,359 3,618
------- ------- ------- ------- --------
Income (loss) before extraordinary item... 1,107 1,250 (415) 2,598 5,819
Extraordinary item, net of tax(a)......... -- (550) -- -- --
------- ------- ------- ------- --------
Net income (loss)...................... $ 1,107 $ 700 $ (415) $ 2,598 $ 5,819
======= ======= ======= ======= ========
Net income (loss) per common share(b)(c):
Basic.................................. $ 0.08 $ 0.06 $ (0.04) $ 0.26 $ 0.60
Diluted(c)(d).......................... $ 0.08 $ 0.04 $ (0.04) $ 0.15 $ 0.32
Weighted average shares outstanding:
Basic.................................. 13,743 12,153 10,207 9,849 9,751
Diluted................................ 14,702 16,791 10,207 17,472 18,375
Pro forma basic earnings per common
share(e)............................... $ 0.35
Pro forma basic weighted average share
outstanding(e)......................... 16,654
STORE DATA:
Number of stores, end of period........... 23 36 48 59 77
Total square feet, end of period.......... 200 328 455 569 766
Comparable store sales increase(f)........ 20.9% 11.3% 1.0% 13.1% 18.1%
Average net sales per store(g)............ $ 1,816 $ 1,769 $ 1,679 $ 1,809 $ 2,022
Net sales per square foot(h).............. $ 193 $ 204 $ 184 $ 191 $ 207
</TABLE>

18
<PAGE> 20

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------------------------------------------
1994 1995 1996 1997 1998
(IN THOUSANDS EXCEPT PER SHARE, NET SALES PER SQUARE FOOT AND
NUMBER OF STORES DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Gross profit margin, net of buying,
distribution and occupancy costs....... 49.4% 44.9% 39.3% 42.3% 43.8%
Selling, general and administrative
expense percentage..................... 41.3% 39.8% 39.3% 36.6% 35.9%
Operating income margin................... 8.1% 5.1% 0.0% 5.7% 7.9%
Capital expenditures...................... $ 1,109 $ 5,029 $ 4,931 $ 7,470 $ 8,105
Depreciation and amortization, excluding
amortization of debt discount and debt
issuance costs......................... $ 284 $ 632 $ 1,393 $ 2,022 $ 2,896
BALANCE SHEET DATA:
Inventories............................... $ 9,916 $20,415 $20,095 $32,113 $ 37,458
Working capital........................... 4,824 14,149 18,292 24,023 27,335
Total assets.............................. 13,492 31,171 35,287 53,656 65,562
Long-term debt and capitalized lease
obligations, excluding current
portion................................ 2,894 134 12,654 16,331 19,647
Redeemable common stock................... -- 7,744 3,607 628 --
Shareholders' equity...................... 3,707 11,949 11,171 21,724 27,520
</TABLE>

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

(a) Fiscal 1995 reflects net loss of $550 from early extinguishment of debt, net
of income tax benefit of $323.

(b) Gives retroactive effect to the stock split of 1.473 to 1. See note 2 to our
consolidated financial statements.

(c) Net income before extraordinary item for fiscal year 1995 was $0.10 per
common share (basic) and $0.07 per common share (diluted).

(d) Diluted earnings per share assumes that preferred stock has been converted
at historical conversion rates. See note 9 to our consolidated financial
statements.

(e) Includes preferred stock which will convert into 6,903,062 shares of common
stock immediately prior to the closing of the offering.

(g) Includes net sales plus alterations income for stores open for the entire
period indicated.

(h) Calculated by dividing net sales plus alterations income by the total square
footage of stores open for the entire period indicated.

19
<PAGE> 21

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

David's Bridal is a successor to a bridal retailing business that began in
Ft. Lauderdale, Florida in 1950. We were incorporated and commenced operations
by opening a store in Hallandale, Florida in 1990. We experienced rapid growth
in fiscal 1994 and fiscal 1995, when the number of stores increased from 14 to
36 over these two fiscal years. This growth placed considerable strain on our
inventory controls, information systems, personnel and capital resources. During
fiscal 1995, we determined that we had accumulated excessive inventories of a
large number of wedding gowns and other apparel. In mid-1995 we commenced key
initiatives which we continue to build upon to increase profitability and
support controlled growth. These initiatives have included:

- enhancing our management team

- focusing our merchandising strategy on building and expanding an
assortment of best selling styles

- upgrading our management information systems

- opening a distribution facility to improve inventory management

- improving our recruiting and training programs for store personnel

While the immediate effect of these initiatives was to decrease
profitability in fiscal 1996, we believe that these measures have facilitated
controlled growth and enhanced profitability in fiscal 1997 and fiscal 1998. We
have achieved comparable store sales growth of 13.1% in fiscal 1997 and 18.1% in
fiscal 1998. In addition, our total revenues increased by 36.6% in fiscal 1997
and 44.2% in fiscal 1998 and our operating margin increased from 5.7% in fiscal
1997 to 7.9% in fiscal 1998. See "Risk Factors -- We may not be able to maintain
our comparable store sales growth as a result of fluctuations in comparable
store sales."

We opened our distribution center in 1996 in Conshohocken, Pennsylvania.
This facility is 54,000 square feet. More than half of our unit merchandise is
shipped from suppliers to our distribution center, where we inspect and monitor
shipments to our stores. In early 1998, we completed the initial development of
an inventory replenishment system that is designed to improve service levels and
inventory turnover among various merchandise categories. This system, which is
linked to our distribution center and merchandise systems, was used during
fiscal 1998 to replenish accessory items. We have recently expanded the use of
this system to replenish bridal gowns and expect to further expand this system
to replenish other products that are back-stocked by the distribution center.
Our replenishment system creates computer generated forecasts of future sales in
each store. This system then establishes stock levels based upon the sales
forecasts. Orders are then generated to replenish merchandise from our warehouse
to our stores. We believe the use of our distribution center to rapidly fulfill
our merchandise needs has facilitated the expansion of our assortment of bridal
and other dress categories.

We operate on a 52/53-week fiscal year. Our fiscal year ends on a Saturday
near December 31 and is named for the calendar year ending on that December 31.
Fiscal 1996, 1997 and 1998 include 53, 52 and 52 weeks, respectively.

Total revenues principally include merchandise sales, alterations income
and third party promotional fees. Selling, general and administrative expenses
include store expenses, general and administrative expenses and media expense.
Comparable store sales are based on net sales and alterations revenue but
exclude third party promotional fee income. A store becomes comparable in the
first month following 12 full months of operation. Stores that have been
relocated within the same market are considered comparable stores.

20
<PAGE> 22

RESULTS OF OPERATIONS

The following table presents, for the periods indicated, selected items in
the consolidated statements of operations as a percentage of total revenues.

<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL REVENUES
FISCAL YEAR
-----------------------------
1996 1997 1998
<S> <C> <C> <C>
Total revenues.............................................. 100.0% 100.0% 100.0%
Cost of sales, including buying, distribution and store
occupancy costs........................................... 60.7 57.7 56.2
----- ----- -----
Gross profit.............................................. 39.3 42.3 43.8
Selling, general and administrative expenses................ 39.3 36.6 35.9
----- ----- -----
Income from operations.................................... 0.0 5.7 7.9
Interest expense net........................................ 0.9 1.4 0.8
----- ----- -----
Income (loss) before income taxes......................... (0.9) 4.3 7.1
Income tax provision (benefit).............................. (0.3) 1.5 2.7
----- ----- -----
Net income (loss)......................................... (0.6)% 2.8% 4.4%
===== ===== =====
</TABLE>

FISCAL 1998 VERSUS FISCAL 1997

Total revenues. Total revenues for fiscal 1998 were $132.7 million, an
increase of $40.7 million, or 44.2%, from fiscal 1997. We attribute the increase
to a $16.5 million, or 18.1%, increase in comparable store sales, $12.1 million
from stores opened in fiscal 1998, $11.7 million from stores opened in fiscal
1997 but not qualifying as comparable stores and the balance to an increase in
third party promotional fees.

Gross profit. Gross profit for fiscal 1998 was $58.1 million (43.8% of
total revenues) as compared with $38.9 million (42.3% of total revenues) in
fiscal 1997. We were able to achieve higher gross profit as a percentage of
total revenues due to an improvement in merchandise margins coupled with a
decrease in store occupancy costs from 11.7% of total revenues in fiscal 1997 to
11.0% of total revenues in fiscal 1998. We were able to achieve higher
merchandise margins through our international and domestic direct procurement
efforts, which have resulted in lower product costs. In addition, we took fewer
markdowns as a result of increased sales of our best selling styles which
generally maintain a higher margin. Our store occupancy costs were lower as a
percentage of total revenues primarily due to the 18.1% increase in comparable
store sales, the timing of new store openings and the volume of new store sales.

Selling, general and administrative expenses. Selling, general and
administrative expenses were $47.6 million (35.9% of total revenues) in fiscal
1998 as compared with $33.7 million (36.6% of total revenues) in fiscal 1997.
The significant components of selling, general and administrative expenses
include store personnel costs, store selling expenses, back office support costs
and advertising expenses. The decrease in selling, general and administrative
expenses as a percentage of total revenues was primarily achieved through
spreading advertising costs over a greater total revenue base. Store personnel
costs, store selling expenses and back office costs remained relatively flat as
a percentage of total revenues in fiscal 1998 as compared with fiscal 1997.
Store personnel expenses generally increase proportionally with increases in
revenues. The $13.9 million increase in selling, general and administrative
expenses reflects our investment in personnel and infrastructure as well as an
increase in variable store selling expenses to support the addition of 18 new
stores and our continued future growth plans.

Interest expense. Interest expense in fiscal 1998 was $1.1 million, as
compared to $1.2 million in fiscal 1997. The decrease in interest expense was
due to lower interest rates, partially offset by higher debt levels used to fund
our expansion.

Taxes. Our effective tax rate was 38.3% in fiscal 1998 as compared to
34.3% in fiscal 1997. The increase was primarily due to a higher effective state
tax rate.

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<PAGE> 23

Net income. As a result of the factors described above, our net income for
fiscal 1998 was $5.8 million, a $3.2 million increase over our fiscal 1997 net
income of $2.6 million.

FISCAL 1997 VERSUS FISCAL 1996

Total revenues. Total revenues for fiscal 1997, which included 52 weeks,
were $92.0 million, an increase of $24.7 million, or 36.6%, from fiscal 1996,
which included 53 weeks. We attribute the increase to a $8.5 million, or 13.1%,
increase in comparable store sales, $4.3 million from stores opened in fiscal
1997, $11.5 million from stores opened in fiscal 1996 but not qualifying as
comparable stores and the balance to an increase in third party promotional
fees.

Gross profit. Gross profit for fiscal 1997 was $38.9 million (42.3% of
total revenues) as compared with $26.5 million (39.3% of total revenues) in
fiscal 1996. We were able to achieve higher gross profit as a percentage of
total revenues due to an improvement in merchandise margins coupled with a
decrease in buying costs from 2.2% of total revenues in fiscal 1996 to 1.6% of
total revenues in fiscal 1997. These improvements were partially offset by an
increase in distribution costs from 0.6% of total revenues in fiscal 1996 to
1.4% in fiscal 1997 and an increase in store occupancy costs from 11.4% of total
revenues in fiscal 1996 to 11.7% in fiscal 1997. We were able to achieve higher
merchandise margins through our international and domestic direct procurement
efforts, which have resulted in lower product costs. In addition, we took fewer
markdowns as a result of increased sales of our best selling styles which
generally maintains a higher margin. Our buying costs were lower as a percentage
of total revenues primarily through the application of fixed costs over a larger
total revenue base. Our distribution center expenses increased as a percentage
of total revenues because fiscal 1997 was the first full year of operation for
our distribution center. Our store occupancy costs increased as a percentage of
total revenues as a result of the impact of rent and real estate tax expenses
associated with new stores opened in fiscal 1997.

Selling, general and administrative expenses. Selling, general
administrative expenses were $33.7 million (36.6% of total revenues) in fiscal
1997 as compared with $26.5 million (39.3% of total revenues) in fiscal 1996.
The significant components of selling, general and administrative expenses
include store personnel costs, store selling expenses, back office support costs
and advertising expenses. The decrease in selling, general and administrative
expenses as a percentage of total revenues was primarily achieved through
spreading store selling and advertising costs over a greater total revenue base.
Store personnel costs and back office costs remained relatively flat as a
percentage of total revenues in fiscal 1997 as compared with fiscal 1996. Store
personnel expenses generally increase proportionally with increases in revenues.
The $7.2 million increase in selling, general and administrative expenses
reflects our investment in personnel and infrastructure as well as an increase
in variable store selling expenses to support the addition of 11 new stores and
our continued future growth plans.

Interest expense. Interest expense was $1.2 million in 1997 as compared to
$586,000 in fiscal 1996. The increase in interest expense was due to higher debt
levels used to fund our store expansion. Interest rates remained relatively
constant in fiscal 1997 as compared to fiscal 1996.

Taxes. Our effective tax rate was 34.3% in fiscal 1997, compared to a
28.8% benefit in fiscal 1996. The fiscal 1997 provision reflects the federal
statutory rate plus relevant state taxes. The 1996 federal tax benefit was due
to our operating loss, which was offset by a state tax provision and other
non-deductible items.

Net income. As a result of the factors described above, our net income in
fiscal 1997 was $2.6 million as compared to a net loss of $415,000 in fiscal
1996.

LIQUIDITY AND CAPITAL RESOURCES

We require cash principally to finance capital investment in new stores,
new store inventory and seasonal working capital. We opened 12 stores in fiscal
1996, 11 stores in fiscal 1997 and 18 stores in fiscal 1998. In recent years, we
have financed our operations and new store openings primarily with cash from
operations, borrowings under bank financing agreements and equity financing.

22
<PAGE> 24

We currently estimate that our capital expenditures will be approximately
$11.0-$12.0 million in fiscal 1999. Our capital expenditures will be incurred to
open new stores, remodel or expand existing stores and fund capital investment
activities. We anticipate spending approximately:

- $6.0 million for new stores,

- $3.5 million on improvements to existing stores,

- $825,000 for the introduction of a new warehouse management system and

- $1.2 million on various capital investment activities.

We believe that our cash flow from operations, the net proceeds from this
offering and amounts available under our revolving credit agreement will be
sufficient to fund anticipated capital expenditures and working capital
requirements for at least the next 12 months.

Our cash flows provided by our operating activities were $4.2 million in
fiscal 1998 as compared to cash used of $3.8 million in fiscal 1997. This
increase was primarily due to higher net income and a lower increase in
inventory levels in fiscal 1998 as compared to fiscal 1997. Our cash used in
operating activities in fiscal 1997 primarily reflected the increase in
inventory levels related to new store openings and support of sales growth,
partially offset by net income. Cash flows provided by operating activities were
$2.1 million in fiscal 1996.

Our net cash used in investing activities in fiscal 1998 was $7.6 million,
as compared to $7.9 million in fiscal 1997 and $4.9 million in fiscal 1996. Our
cash used in investing activities primarily represents our capital expenditures
in opening new stores. While we opened seven more stores in fiscal 1998 than in
fiscal 1997, we purchased land and one building in fiscal 1997.

Our net cash provided by financing activities in fiscal 1998 was $3.3
million, as compared to $11.7 million in fiscal 1997 and $2.8 million in fiscal
1996. Over the last three years our primary financing activities have involved
continual borrowings and repayments under our revolving credit agreement,
increases in bank overdrafts, periodic issuances of long-term debt and sales of
equity securities.

Our cash from financing activities in fiscal 1998 was primarily derived
from:

- $2.2 million of net borrowings under our revolving credit agreement,

- $1.4 million from the issuance of long-term debt, and

- an increase of $1.0 million in bank overdrafts.

Bank overdrafts represent checks that have been written by us that have not been
presented to our bank for payment. These sources of cash in fiscal 1998 were
partially offset by repayments of long-term debt and capital leases of $680,000
and the repurchase of common stock for $651,000. Our cash from financing
activities in fiscal 1997 was primarily provided by $5.0 million from the sale
of class D preferred stock, $3.9 million of net borrowings under our revolving
credit agreement and an increase of $2.7 million of bank overdrafts.

Our revolving credit agreement provides for borrowings of up to $30.0
million, of which up to $25.0 million may be used for letters of credit. Cash
borrowings and letters of credit under our revolving credit agreement are
secured by all of our assets. Our borrowings under this agreement are restricted
to a specified percentage of our accounts receivable and inventory.
Specifically, we are not permitted to borrow amounts that are greater than the
sum of 80% of our eligible accounts receivable and 60% of our eligible
inventory. The revolving credit agreement provides some exceptions to these
limitations. These exceptions allow us to exceed these limitations by $3.0
million from December 31, 1998 to March 31, 1999, $3.0 million from October 31,
1999 to March 31, 2000 and $2.0 million from October 1, 2000 to March 31, 2001.
The interest rates that we are charged under our revolving credit agreement are
variable.

We can choose to have our interest rate based on:

- the higher of the U.S. federal funds rate plus 0.50% and our bank's prime
rate, or

23
<PAGE> 25

- adjusted LIBOR plus an applicable margin of between 1.25% and 1.75%
depending on our financial performance.

As of April 3, 1999, we had made cash borrowings of $7.0 million and were issued
$3.4 million of letters of credit under our revolving credit agreement. We
intend to use a portion of the net proceeds of this offering to repay the
outstanding balance under our revolving credit agreement, although we may
reborrow amounts under the revolving credit agreement, which will remain
available for future borrowings. The revolving credit agreement is available
through July 31, 2001.

We currently intend to retain all future earnings to fund the development
and growth of our business. We do not currently anticipate paying any cash
dividends. Our board of directors will make future decisions regarding cash
dividends on our common stock. These decisions will depend on our results of
operations, financial position, capital requirements, general business
conditions and restrictions imposed by any financing arrangements. Our revolving
credit agreement currently prohibits the payment of dividends.

QUARTERLY RESULTS AND SEASONALITY

Our business is subject to seasonal variations and our revenues and income
historically have been higher from January through April and lower from October
through December. Our working capital requirements tend to fluctuate throughout
the year and increase during the months of November and December. This is
because we increase our inventory in these months to support sales, which tend
to be higher from January through April.

The following table presents our unaudited quarterly operating results for
our eight most recent quarterly periods and the number of stores open at the end
of each period.

<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
-------------------------------------------------------------------------------------------
APRIL 5, JULY 5, OCTOBER 4, JANUARY 3, APRIL 4, JULY 4, OCTOBER 3, JANUARY 2,
1997 1997 1997 1998 1998 1998 1998 1999
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues.............. $25,824 $23,891 $24,621 $17,677 $38,705 $34,619 $34,956 $24,438
Gross Profit(a)............. $11,477 $10,240 $10,393 $ 6,833 $18,114 $15,258 $15,008 $ 9,725
Income (loss) from
operations................ $ 2,753 $ 1,585 $ 1,702 $ (835) $ 5,482 $ 3,254 $ 2,415 $ (627)
Net income (loss)........... $ 1,583 $ 831 $ 902 $ (718) $ 3,161 $ 1,894 $ 1,337 $ (573)
Quarterly total revenues as
a percentage of annual
total revenues............ 28.1% 26.0% 26.7% 19.2% 29.2% 26.1% 26.3% 18.4%
Quarterly operating income
(loss) as a percentage of
annual operating income... 52.9% 30.4% 32.7% (16.0)% 52.1% 30.9% 22.9% (5.9)%
Quarterly operating income
(loss) as a percentage of
quarterly total
revenues.................. 10.7% 6.6% 6.9% (4.7)% 14.2% 9.4% 6.9% (2.6)%
Stores open at end of
period.................... 50 52 54 59 63 69 71 77
</TABLE>

- - -----------------------------
(a) Net of buying, distribution and store occupancy costs.

YEAR 2000 COMPLIANCE

The Year 2000 issue results from the writing of computer programs using two
digits rather than four to define the applicable year. In other words,
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in system failures or miscalculations
causing disruptions of operations. In this section we will describe our current
state of readiness for the Year 2000 issue and other information relating to the
Year 2000 issue.

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<PAGE> 26

WILL DAVID'S BRIDAL BE READY?

Information Technology Systems--Our core information technology system is
the STS integrated retail system. The system supports our major business
functions, including merchandise planning, finance and accounting, and point of
sale systems. With STS we have completed an analysis of all modules included in
this retail system to insure that they are Year 2000 compliant. Year 2000
remediation has been completed for all STS modules except for point of sale and
decision support. The decision support remediation solution has been issued for
implementation and is scheduled to be completed in the second quarter of 1999.
The point of sale remediation is being tested and is scheduled to be completed
in the third quarter of fiscal 1999.

Our other information technology systems are either internally developed
legacy systems or "off the shelf" applications. The most significant legacy
system is our distribution system, which supports distribution center operations
and inventory transfers among stores. Our new warehouse system, which will
replace our distribution system will be Year 2000 compliant. We have scheduled
this new system to be implemented in the third quarter of fiscal 1999. Other
legacy systems support special order warehouse processing allocation and
replenishment systems. Our assessment of the Year 2000 readiness of these
systems is underway, and remediation is expected to be completed in the third
quarter of fiscal 1999. Our "off the shelf" applications have been inventoried
and assessed for compliance. In all instances the applications are compliant,
scheduled for remediation or not critical to the daily operations or decision
support processes. We do not believe that non-compliance of "off the shelf"
applications would materially adversely affect our operations.

Non-Information Technology Systems--Non-information technology systems are
systems that contain embedded technology such as microcontrollers. Our
non-technology systems include security systems, fax machines, elevators and
HVAC systems. Our preliminary assessment of non-information technology indicates
that the non-information technologies do not have embedded date functions for
the models utilized in our corporate and field facilities and, therefore, are
not subject to Year 2000 issues.

Material Third Party Relationships--We have made inquiries of our principal
suppliers and service providers to determine the effect on our business if these
third parties fail to remediate their own Year 2000 issues. These parties
include merchandise vendors, business service vendors and our joint venture
partner that manages the procurement of merchandise from Asia. All principal
suppliers and service providers have been contacted by us to assess compliance
efforts and the risk to us related to Year 2000 issues. These communications
were completed either by direct mail, electronic mail, or researching Year 2000
Internet sites. We have received replies from approximately 75% of our
merchandise vendors, and each has either provided a statement regarding the
status of their compliance or signed a statement provided by us regarding the
status of their compliance. These communications are retained in our Year 2000
archives in order for us to monitor the progress these third parties are making
to remediate their Year 2000 issues. The assessment of the remaining 25% is
in-progress with an expected completion date of May 1999. We have considered the
responses from all of our service vendors and are in the process of remediating
non-compliant systems.

HOW MUCH WILL IT COST TO ADDRESS YEAR 2000 ISSUES?

We have entered into a contract with an external contractor to provide
business solutions for a portion of our efforts to address year 2000 issues. The
scope of the contract includes network, server and desktop remediation at all
corporate facilities and the installation of a point-of-sale upgrade, provided
by STS, our point-of-sale software vendor, at store level. In addition, the
contractor will complete an independent certification of important vendors who
have provided us with Year 2000 letters of compliance to validate risk and cost
estimates. We have assigned one full time employee to manage the Year 2000
project team. The project team is comprised of seven of our employees, each of
whom represents one of our principal business units. The team meets on a weekly
basis to assess our progress and reports on a biweekly basis to our Year 2000
committee which is comprised of several members of executive management.

25
<PAGE> 27

Through April 3, 1999, we have incurred approximately $5,000 in remediation
costs, exclusive of employee time and effort, associated with Year 2000 issues.
All of these costs relate to upgrades to the STS retail system. We estimate that
an additional $600,000 will be incurred during the remainder of fiscal 1999 to
complete our Year 2000 remediation. The significant components of this cost
includes $100,000 to upgrade our point-of-sale system, $115,000 to remediate our
network hardware, $75,000 for application software remediation, $50,000 for Year
2000 testing of systems and software and $40,000 on vendor supply chain
compliance.

WHAT ARE THE POSSIBLE CONSEQUENCES OF YEAR 2000 ISSUES CONFRONTING DAVID'S
BRIDAL?

If STS is unable to remedy non-compliant modules, we will have to process
key business functions with less efficient systems. These key business functions
include the following functions:

- Merchandising

- Finance and Accounting

- Point-of-Sale

- Distribution

- Replenishment

The current point-of-sale system supports the sales and returns of
merchandise, inventory receipts, transfer of merchandise between locations and
price change functions. This information is collected through a nightly polling
process initiated from our corporate data center. The system also supports
credit authorization and settlement processing with our financial settlement
vendors. In the case where the point-of-sale system is not available, we
anticipate that manual processing would be necessary at the store level. In
addition, manual processing and recording of information would be required for
accurate financial reporting. If credit services were not available the store
would initiate manual telephone authorizations and batch settlements. These
efforts would be manually intensive and would result in a delay in daily
financial reporting. The utilization of these manual processes on a broad scale
would substantially disrupt our operations and would involve substantial cost.

The failure to have the new warehouse management system implemented on a
timely basis could disrupt the movement of inventory into and out of our
distribution center and our ability to transfer gowns from store to store. This
could have an adverse effect on our ability to supply merchandise on a timely
basis, and therefore on our revenues. The remediation of our current
distribution system is part of the new warehouse management system project plan
and we would rely on this remediation if the new warehouse management system is
not completed on schedule. We do not believe that difficulties with regard to
our other legacy systems would materially adversely affect our operations.

If our telecommunications and credit card processing service providers are
not Year 2000 compliant on a timely basis, our operations could be materially
adversely affected. If our telecommunication providers are not compliant, we
would be required to migrate our service to a compliant vendor. If our credit
card processor is not compliant, we would be required to approve and settle
credit requests manually. This may require the imposition of credit limits in
the absence of direct approval by the credit card processor, a highly cumbersome
process when applied to individual sales.

WHAT ARE DAVID'S BRIDAL'S CONTINGENCY PLANS?

Our new distribution system, scheduled for implementation in September
1999, is designed to remediate Year 2000 distribution and allocation system
issues. As a contingency, the project schedule includes a plan to remediate the
current systems.

Remediation of our point-of-sale systems is scheduled for June 1999. Our
contingency plan is to apply additional store staff to process transactions
manually and to use additional staff at our headquarters to

26
<PAGE> 28

ensure accurate financial reporting. The contingency procedure will be paper
based, manually intensive, slower and more costly.

We have not yet established a contingency plan with respect to
non-compliant STS modules or telecommunications service providers. If, by the
end of the third quarter of fiscal 1999, we determine that a contingency plan is
required with regard to non-compliant STS modules or telecommunications service
providers, we will formulate a contingency plan, which we anticipate will be
completed by the end of the fourth quarter of 1999.

INFLATION

We do not believe that inflation has had a material effect on our financial
position or results of operations during the past three years. We cannot predict
what effect inflation will have in the future. Our operating results may be
materially adversely affected by future inflation.

27
<PAGE> 29

BUSINESS

OVERVIEW

We believe that the breadth and depth of our in-stock assortments in our
primary bridal and bridal-related products far exceeds those of other bridal
retailers. Our broad in-stock assortments enable us to offer the convenience of
one-stop shopping for the bridal party, including brides, bridesmaids,
mothers-of-the-bride and-groom and flower girls. We also offer a variety of
special occasion dresses and accessories for events such as proms, pageants,
homecomings and other formal affairs. Our in-house staff coordinates the design
and, through a Hong Kong-based joint venture, procures virtually all of our
bridal gowns. This results in lower product costs and a shorter time period
between order and delivery than we have experienced in the past and allows us to
more frequently update our product assortment. Our merchandising strategy is to
target customers across a wide range of income levels and offer apparel of
excellent value at everyday prices, typically ranging from $99 to $899. We
recognize that the bridal customer expects a higher level of customer service
than the typical retail customer. We seek to exceed our customers' expectations
for service by providing attentive and knowledgeable sales assistance,
convenient store design and extended hours of operation relative to other bridal
retailers.

DESCRIPTION OF BRIDAL INDUSTRY

According to the U.S. Department of Health and Human Services, since 1990
there have been an average of approximately 2.3 million marriages per year in
the United States. This number is expected to increase during the next decade,
as the children of the "Baby Boomer" generation reach adulthood. We believe that
a substantial majority of marriages in the United States involve a formal
wedding ceremony.

Demographic surveys indicate that the age of brides is increasing.
According to the U.S. Bureau of the Census, the median age of a bride in the
United States has increased from 21 in 1970 to 27 in 1998. We believe that the
trend towards older brides is continuing and has resulted in an increasing
number of brides paying for some or all of their wedding expenses. As a result,
brides place greater emphasis on value and service.

Based on our research and surveys conducted by Modern Bride and Bridal
Guide, each of which is a national bridal magazine, a bride typically will spend
approximately $700-800 for her wedding gown. Brides also usually purchase a
headpiece, a slip and other foundation items, as well as accessories such as
shoes and a handbag. The wedding party normally includes four or five
bridesmaids, each of whom usually purchases a dress, shoes, handbag, jewelry and
other accessory items.

We believe the bridal market is highly fragmented, with approximately 7,500
stores nationwide, and estimate that less than five percent of bridal retailers
operate more than one store. We estimate the domestic market for the various
apparel and accessories purchased by brides, bridesmaids and other members of
the bridal party to be in excess of $4 billion per year. Historically, no
retailer has been dominant in the bridal retailing industry.

The manufacture of a bridal gown requires a significant amount of skill and
typically involves more than 100 hours of labor per gown. Due to this high labor
component, most manufacturers contract with independent, locally owned and
operated factories in Asia, predominantly in China, for production of the gown.
The manufacturers sell to bridal retailers which have generally become highly
reliant upon the manufacturers. In order to gain efficiency and reduce costs,
some manufacturers often will not forward orders to the factories until they
have received a minimum number of orders from bridal retailers. This

28
<PAGE> 30

delay in order placement and the labor intensive nature of bridal gown
production contributes to the lengthy time period often experienced between
order and receipt of a bridal gown.

We believe that most bridal retailers are considerably smaller than most
bridal manufacturers and do not have significant bargaining power with the
manufacturers. Therefore, manufacturers can often exert a considerable amount of
influence on bridal retailers. Typically, the manufacturers dictate the styles
that will be available to the bridal retailers and require retailers to make a
significant investment in samples of those styles during each selling season.

Typically, bridal wear retailers offer a limited selection of bridal gowns
and bridesmaid dresses and provide samples in only the most common sizes,
typically size 8 or 10. In addition, they carry limited inventory, therefore
customers generally cannot purchase bridal gowns and bridesmaid dresses
"off-the-rack." The customer generally places a substantial deposit for her gown
and waits for an extended period of time, often up to 20 weeks, before the gown
arrives from the manufacturer. As a result, the traditional purchasing process
involves a number of drawbacks for the customer, including the inability of most
bridal customers to try on gowns in their sizes, the wait involved in the
delivery process, and uncertainty relating to the appearance and fit of the
final product. These factors can make the bridal shopping experience time
consuming, inconvenient and stressful.

COMPETITION IN THE BRIDAL INDUSTRY

The high level of service required by bridal customers and the difficulties
of dealing with manufacturers make bridal retailing a challenging business.
Currently, the bridal market can be categorized into four segments:

Bridal Salons--This group includes the largest number of bridal retailers.
Typically, these are single store operations managed by the owner. They offer a
limited number of lines and sizes and generally operate a sample only, special
order business. They may offer a limited selection of off-the-rack dresses. We
believe that many of these operators have limited resources and little influence
with manufacturers over style availability or order delivery times. These stores
often have only limited hours of operation and require appointments. However, we
face competition from bridal salons and other bridal retailers that compete on
the basis of customer service and personalized attention, or that have
established strong reputations within a given community.

Bridal Warehouses--This relatively small group of stores sell limited
assortments including old samples, discontinued styles and manufacturer
overruns. They generally do not offer a full line of in-stock bridal apparel,
although they may special order bridal wear. Store hours are typically more
flexible than bridal salons, although service levels are low and these stores
generally do not accept appointments. We can face competition from bridal
warehouses in terms of prices.

Department Stores--Several department stores offer bridal gowns and
bridesmaid dresses in their own or leased departments and through their
catalogs. These locations generally operate a sample-only, special-order
business and tend to offer higher priced couture merchandise. Bridal department
hours of operation are usually based on typical retail department store hours.
Customer appointments are generally required. We also compete with department
stores that sell through catalogs and that have substantially greater financial
and other resources.

Multi-Store Chains--There are a small number of bridal retail chains
operating two or more stores in a region. These retailers may offer a selection
of off-the-rack merchandise as well as the traditional sample model retailing
offered by bridal salons and department stores. Store hours are generally
flexible and customers may, in most cases, either walk-in or make an
appointment.

Bridesmaid and other special occasion dresses are available at a large
number of retailers, including department stores and specialty dress retailers.
In addition, because the complexity and customization involved in special
occasion garments are usually far less than in bridal wear, customer service
expectations are somewhat lower. However, retailers must devote care to insure
that bridesmaid dresses are uniform in style and color for the entire bridal
party. Because bridesmaid dresses are often selected by the bride, her

29
<PAGE> 31

overall satisfaction with the bridal retailer is a large factor in deciding
whether to also purchase the bridesmaid dresses from the same bridal retailer.

BUSINESS STRATEGY

Our principal strategies are as follows:

Offer a Wide Selection of In-Stock Bridal Apparel

Our customer research reveals that bridal customers value selection more
than any other single attribute in deciding where to shop for their wedding
gowns. As a result, our merchandising strategy is to offer the broadest in-stock
selection of bridal-related apparel. Of our total product assortment,
approximately 225 of our best-selling styles, which we call our core assortment,
are typically featured in our advertising and are maintained in stock, either in
stores or in the distribution center. We believe these styles typically endure
over time and result in less fashion risk and markdown exposure. We also provide
special occasion dresses, headpieces and accessories, including shoes, handbags,
jewelry and gloves to offer one-stop shopping to the entire bridal party. To
meet the needs of additional customers, we are continuing to expand and refine
our assortment in terms of number of styles, silhouettes, fabrics, prices and
sizes.

We produce our gowns under our own private labels, as well as under
exclusive licenses with Gloria Vanderbilt and Oleg Cassini. We maintain a broad
in-stock selection of bridal gowns in many sizes so that customers can often try
on, purchase and take their gowns home on the same day. We believe that this
provides us with a competitive advantage over typical bridal retailers whose
bridal customers often wait up to 20 weeks for delivery of their gowns.

Offer Excellent Everyday Value

Our pricing strategy is to offer our bridal gowns, flower girl, bridesmaid,
mothers-of-the-bride and -groom and other special occasion dresses at everyday
prices equal to or below comparable product offerings of our competitors. We
target customers across a wide range of income levels and offer apparel at
prices typically ranging from $99 to $899. The excellent value of our apparel,
coupled with a wide in-stock selection and high level of customer service, are
key elements of our strategy. We are able to support our pricing strategy while
maintaining attractive margins because we deal directly with the factories that
manufacture the majority of our merchandise.

Control Product Design, Procurement and Distribution

We design and obtain the majority of our merchandise directly from
factories. Based on our in-house design expertise and our direct relationship
with the factories that manufacture our merchandise, we are able to offer our
customers a broad assortment of fashionable styles at popular prices, while
maintaining high quality and fit standards. We have eliminated the middleman and
established relationships with important manufacturers through our Hong Kong
joint venture. This has significantly reduced the cost of our bridal gowns and
related apparel and has shortened the time period between order and delivery
that we have experienced in the past. Currently, the time between order and
delivery is 8-12 weeks. This reduced order lead time enables us to replenish our
merchandise quickly and react swiftly to fashion trends. By controlling the
distribution of our product, we are able to:

- reinforce our brand name, David's Bridal, in the eyes of our customers

- provide a broad in-stock assortment of our products

- control our pricing and flow of goods

- test new products on an ongoing basis

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<PAGE> 32

Emphasize High Levels of Service

We are committed to providing a high level of customer service. We believe
this often leads to establishing an ongoing relationship with our customers and
results in repeat and/or referral purchases. Key elements of our customer
service include the following:

- Attentive and knowledgeable personnel. We recognize that purchasing a
wedding gown is an emotional experience, and that bridal customers expect
a higher level of attentiveness and product knowledge than is typically
provided by other apparel retailers. We understand that it is critical to
have experienced, highly trained employees in this role. Our recruiting
focus is to attract candidates with experience in the retailing of
products requiring significant interaction with the customer, such as
furniture, jewelry and cosmetics. We also provide initial training for
our personnel as well as training on an ongoing basis. Finally, we
regularly monitor service performance and customer satisfaction, and we
have a compensation structure that rewards store management for sales
performance and customer service.

- Convenient store design and hours. Our store design encourages purchases
in a customer friendly environment. Our current prototype, which exists
in over half of our stores, averages approximately 10,000 square feet and
has approximately 30 conveniently located fitting rooms and a central,
well-lit mirrored platform. This prototype presents merchandise in a
highly accessible format and enables us to provide personalized service
and to cross-merchandise related accessories. Our stores are open during
convenient hours, typically seven days a week, including evening hours on
all weekdays. Unlike many bridal retailers who require appointments, we
welcome customers to shop with or without an appointment.

- In-store alterations service. As an added convenience for our customers,
all of our stores, except for two outlet stores, provide an in-store full
service alterations department. This enables us to ensure that gowns and
dresses are well-tailored. The alterations department can also be a
crucial element in the sales process to enhance our relationship with the
customer. We believe that on-site alterations is a significant
competitive advantage because most retailers do not provide this service
on-site.

Open Stores in New and Existing Markets

Our store expansion strategy is to continue our geographic diversification
throughout the United States and to open additional stores in existing markets.
We believe this should create greater access and convenience for our customers
and increase the efficiency of our marketing, distribution and management
expenses. We opened 12 stores in fiscal 1996, 11 stores in fiscal 1997 and 18
stores in fiscal 1998. No stores were closed during this period, other than
relocations within the same market. We plan to open approximately 22 stores in
fiscal 1999 and 22-25 stores fiscal 2000. As of April 3, 1999, we have already
opened four of the stores we plan to open in fiscal 1999.

Increase Sales Productivity of Existing Stores

We employ two complementary strategies to increase the productivity of our
existing stores. First, we seek to increase the flow of traffic into our stores
by increasing consumer awareness of our brand. Through our multi-media marketing
strategy and our continuing geographic expansion, we strive to establish David's
Bridal as the dominant national brand name in bridal retailing. In addition, the
bride typically determines where the bridesmaid dresses are purchased. As a
result, we strive to create a favorable experience for the bride. This enhances
our ability to outfit her bridesmaids as well as other members of the bridal
party, and encourages referrals, a significant factor in generating additional
business.

OUR MERCHANDISE ASSORTMENT

We carry an extensive assortment of bridal gowns and other special occasion
dresses, including mother-of-the-bride and -groom, bridesmaid, flower girl and
other dresses. Our average store carries

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<PAGE> 33

approximately 2,600 gowns and dresses including our core assortment plus
numerous other styles. Our non-bridal dresses are often suitable for a variety
of occasions. We also carry a broad assortment of headpieces and other
accessories to satisfy the needs of the bride and the entire bridal party. Our
merchandise is classified in the following merchandise categories:

<TABLE>
<CAPTION>
CATEGORY DESCRIPTION TYPICAL PRICE RANGES
<S> <C> <C>
Bridal Gowns............ Hundreds of styles are available in all stores in $199-$899
sizes 2-26. Gowns represent current fashion trends
as well as traditional looks. Styles range from
simple and elegant to highly embellished. Fabrics
include silk, satin, chiffon, tulle and organza.
Bridesmaid Dresses...... Through both in-store inventory and rapid $99-$250
fulfillment through our distribution center,
customers can select from over 100 styles that
include a variety of colors and fabrics available in
sizes 2-24. An additional special order program is
available for sizes up to 48.
Other Dresses........... A broad assortment of mothers-of-the-bride and $99-$298
-groom and special occasion dresses is available in
sizes 2-24. Fashion trends are represented in both
traditional and seasonal color palates.
Flower Girl Dresses..... A broad assortment of styles is available in sizes $99-$119
2-12. Fabrics include satin, tulle and organza.
Bridal Headpieces....... A broad selection of headpieces, from informal $69-$185
wreaths to long veils, that compliment bridal gown
styles.
Accessories and Gifts... Undergarments (such as slips and bras), bridal and $7-$79
fashion shoes, costume jewelry, gloves, handbags and
wedding gift items (such as candles, wedding books
and disposable cameras).
</TABLE>

To reduce risk, we test our apparel prior to rolling out new products to
gauge customer appeal. We produce gowns under our own private labels, including
Michelangelo, Lady Eleanor, St. Tropez and Santa Monica, as well as under
exclusive licenses from popular fashion designers, Gloria Vanderbilt and Oleg
Cassini. We believe these brands reinforce the exclusivity of our product
offerings and enhance our store brand recognition.

We believe that a crucial component of our success is our ability to
satisfy the needs and preferences of bridesmaids in a timely fashion. Because a
number of bridesmaid dresses of the same style and color are typically sold to a
wedding party, stores may not carry sufficient quantities of bridesmaid dresses
to permit off-the-rack purchases by the entire wedding party. We utilize rapid
fulfillment from our distribution center to ensure that appropriate quantities
and sizes of bridesmaid dresses in matching styles and dye lots can be made
available within a short period of time. If necessary, we can special order
dresses directly from factories with whom we have an established relationship.
This enables members of the bridal party to purchase their bridesmaid dresses at
different stores throughout the country while still ensuring that the dresses
are consistent in style and color. This flexibility helps to improve merchandise
turnover and reduce markdowns.

DEVELOPMENT AND PROCUREMENT OF BRIDAL AND BRIDAL RELATED APPAREL

We control the production process for the majority of our products from
design through distribution. We obtain virtually all of our bridal gowns and
flower girl dresses from overseas manufacturers located principally in Asia.

Our product development staff, together with our merchandising group,
selects the fabrics, silhouettes, colors and price ranges for our designs. Our
in-house design staff interprets industry trends and develops

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<PAGE> 34

exclusive designs for our stores. Unlike most manufacturers which update their
lines only two to three times per year, we design and develop styles for our
customers continually throughout the year.

We do not operate any manufacturing plants. We have established
relationships with important manufacturers through our Hong Kong joint venture.
Our joint venture partner is responsible for identifying the providers of and
for the purchasing of our bridal gowns and for ensuring that manufacturers
adhere to design and other business standards. We select manufacturers based on
their ability to support our growth, meet defined quality and fit standards and
make timely deliveries. These strategic relationships reduce our product costs
and shorten the time between order and receipt. They also enable us to avoid
depending on traditional bridal manufacturers which can dictate the styles,
quantities and order lead times.

For bridesmaids dresses, we either procure the products directly from
factories or purchase them from domestic dress manufacturers. We have
implemented a system for our bridesmaid dresses that monitors and controls the
production process from the acquisition of piece goods through final delivery.
Bridesmaids dresses that are not sourced through this system are purchased from
traditional domestic dress manufacturers.

We purchase other special occasion merchandise and accessories from a
variety of domestic vendors.

STORE DESIGN AND STAFFING

Our store design encourages purchases in a friendly environment. Most of
our stores range in size from 8,000 to 12,000 square feet. Our current
prototype, which exists in over half of our stores, averages approximately
10,000 square feet and has approximately 30 conveniently located fitting rooms
and a central, well-lit mirrored platform. This prototype presents merchandise
in a highly accessible format and enables us to provide personalized service and
to cross merchandise related accessories.

A typical store has 16-18 employees, including:

- a store manager

- an assistant manager

- a lead customer service representative

- an alterations manager

- bridal consultants

- seamstresses

- other support personnel.

We believe that appropriate personnel training is critical to ensure high
levels of customer service expected by purchasers of bridal wear. Accordingly,
we have developed a comprehensive training program for our personnel that is
supported by a training staff located at designated regional training stores.
This training staff focuses on the areas of product knowledge, sales techniques
and key elements of excellent service that we require. Management candidates for
a new store are typically hired approximately three to six months in advance.
During this period, a management candidate is expected to complete our formal
training program. In addition, the candidate is required to spend a considerable
amount of time in a store to gain experience in all facets of operations and
learn selling and management techniques appropriate for our stores. Management
candidates for existing stores must successfully complete a six week training
program before they assume store manager or assistant manager responsibilities.
Supplemental training is provided periodically to managers and assistant
managers.

OUR APPROACH TO CUSTOMER SERVICE

We strive to provide a level of service that exceeds our customers'
expectations. We believe that referrals are a principal source of new customers.
We have found that customers who are pleased with

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<PAGE> 35

their experience are more likely to refer others to our stores. They are also
more likely to consider our stores to satisfy their future special occasion
needs.

Our principal customer service focus is the relationship between the
customer and her bridal consultant. Our bridal consultants typically have
experience in selling items requiring a high degree of interaction with the
customer and have completed our training program. They are expected to be highly
attentive to each customer's needs and to assist them throughout each stage of
the purchase process, from selecting a style to altering their gown. Since the
purchase decision may involve several visits to the store, bridal consultants
place follow-up telephone calls to customers to maintain contact with them and
thereby increase the likelihood of a return visit. After a purchase, bridal
consultants are expected to continue to contact customers to build an ongoing
relationship and enhance our ability to extend sales to the entire bridal party.

Other aspects of our operations underscore our commitment to customer
service. We also facilitate the availability of credit to our customers by
offering qualified customers a credit card from an independent financial
services company. This independent financial services company makes all credit
decisions, assumes all credit risk, processes all charge and credit slips, mails
statements and maintains account information.

LOCATIONS AND EXPANSION

As of April 3, 1999, we operated 81 stores in 30 states. Presently, we
lease 79 of these sites and own the other sites. In addition, we have entered
into lease agreements for the opening of 10 new stores. Two of our stores in
Texas are outlet stores.

<TABLE>
<S> <C> <C>
Alabama--1 Kentucky--1 North
Carolina--3
Arizona--1 Louisiana--1 Ohio--5
California--2 Maryland--2 Oklahoma--2
Colorado--2 Massachusetts--2 Pennsylvania--7
Connecticut--2 Michigan--3 South
Carolina--1
Delaware--1 Minnesota--2 Tennessee--3
Florida--7 Missouri--1 Texas--6
Georgia--3 Nevada--1 Utah--1
Illinois--5 New Jersey--5 Virginia--3
Kansas--1 New York--6 Wisconsin--1
</TABLE>

In determining store locations, we consider, among other things, the
population in a metropolitan market, marriage rates, household income levels and
the availability of suitable sites. We currently seek locations in high traffic
areas with convenient access to major commercial roads. We typically open stores
in larger strip centers with one or more larger and well-recognized tenants, in
stand-alone locations with high visibility and near regional shopping malls. We
believe that our strategy of selecting highly visible sites enables us to build
additional brand awareness.

The cost of opening a store in fiscal 1998, was approximately $720,000.
This amount includes approximately $260,000 of inventory, approximately $430,000
for leasehold improvements and fixtures, prior to tenant improvement allowances,
if any, and approximately $30,000 for pre-opening expenses. We expense our
pre-opening expenses as they are incurred. Our cost to open new stores will vary
in the future. Our costs will depend on factors such as local construction
expenses, changes in store format and tenant improvement allowances.

We continually evaluate our existing real estate positioning. Based on
demographic trends and shifts in traffic patterns, we may occasionally relocate
stores. In addition, as our store design evolves, some of our

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<PAGE> 36

older, smaller stores may be relocated and conformed to our new prototype. Three
stores were relocated in fiscal 1998 and we plan to relocate three stores in
1999.

Our headquarters are located in Ardmore, Pennsylvania and consist of
approximately 16,000 square feet. We have leased these offices through June
2000. We may move our headquarters to a larger facility within the next 12
months.

We expect to relocate our offices to larger offices within the next 18
months. If we purchase our new offices, we anticipate funding the purchase
through mortgage financing and cash from operations.

OUR MARKETING STRATEGY

We employ a multi-media marketing strategy that uses magazines, television,
radio, newspaper and our internet website. We also actively use our product
catalog, which we make available to walk-in shoppers, mail directly to potential
customers and distribute at bridal fashion shows to reinforce the breadth of our
assortment and to facilitate sales.

Our industry research indicates that many brides-to-be purchase one or more
bridal magazines shortly after becoming engaged. We believe that we are among
the largest advertisers in two of the largest national bridal magazines. Our
extensive advertising in these magazines, which can consist of up to 30 pages
per magazine, enables us to showcase style, variety and value of our
merchandise. We believe that we are the only bridal retailer that advertises on
a national basis in these magazines. We also advertise in regional bridal
magazines in many of our markets. Because of the availability of customer
information and the ease of access to our target market through multi-media, we
are able to deploy our marketing dollars efficiently.

Television and radio advertising supplement our regional efforts. We
generally direct our television advertising to regional markets. In addition,
selected national television advertising is purchased to target audiences of
18-35 year old women. Radio advertising is utilized selectively, particularly in
areas where the cost of television advertising can be very expensive. Our radio
and television advertising further emphasizes our brand and enables us to
advertise special events, grand openings and sales. We believe that this
advertising provides a competitive advantage over most bridal retailers who do
not advertise on radio or television.

We also utilize direct mail to enhance brand awareness and promote select
events. A significant direct mail tool is our product catalog, which is mailed
to targeted lists of recently engaged brides-to-be. We obtain lists of potential
bridal and special occasion customers from our own bridal registry and from
lists that we purchase from regional bridal magazines and other third parties.
We distributed over 500,000 copies of our catalogs in fiscal 1998.

In December 1998, we launched our website, www.davidsbridal.com, which
allows customers to register with us online and subsequently receive information
on upcoming store events. On the website, customers can browse our catalog and
identify our store nearest to them using a state-by-state store locator.

Our public relations efforts are designed to emphasize our leadership role
in the bridal industry. Because we are the only national bridal chain, we are
often called on as an authority on bridal fashion and retailing trends. Our
spokespersons have made many television appearances during which they have
discussed current fashion trends for bridal and special occasion attire.

Additionally, we focus our marketing efforts on community, social,
educational, religious and cultural organizations. We cooperate with these
organizations by participating in local bridal and fashion shows, speaking
engagements on fashion trends and other special events.

DISTRIBUTION AND INVENTORY MANAGEMENT

Our distribution center is located in Conshohocken, Pennsylvania. We leased
a 30,000 square foot distribution center in 1996, which was expanded to 54,000
square feet in 1998. Currently, this facility ships

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<PAGE> 37

over half of our merchandise items to our stores, five days a week via third
party delivery services. The remaining merchandise is shipped directly from
suppliers to our retail stores.

Our distribution center utilizes a management information system to inspect
and monitor shipments to our stores. The system facilitates the timely delivery
of store shipments and the accurate accounting and balancing of inventory among
stores. We are typically able to make gowns, dresses and other products that are
not in stock in a particular store available to customers within 3-5 weeks of
purchase, a much shorter time period than the 12-20 weeks that we estimate is
usual in our industry. Once a delivery arrives at a store, inventory items are
inspected, sorted and placed on the selling floor by in-store personnel. We have
been able to reduce the amount of inventory that we must carry at our stores by
using the distribution center to support merchandise replenishment and our rapid
fulfillment program for bridesmaid dresses.

We believe that we will need to continue to increase the use of our rapid
fulfillment program as we expand the breadth of our assortments. Accordingly,
our distribution center will increase in importance as a greater portion of our
sales are fulfilled from inventory in our distribution center. In early 1998, we
completed the development of an inventory replenishment system that is designed
to further improve service levels and turnover in various accessory categories.
This system, which is linked to our distribution center and our merchandise
systems, facilitates the replenishment of merchandise upon sale. During fiscal
1998, this system was used to replenish accessory items. We have recently
expanded the use of this system to replenish our bridal gowns and expect to
further expand the use of this system to replenish other products that are
back-stocked by our distribution center.

We lease our distribution facility under a lease that expires in December
2002. We have the option to renew this lease through December 2005. We believe
that our distribution center, which was expanded in March 1998, will be
sufficient to meet our expected needs for the next two to three years based on
our current expansion plans. However, we may add an additional distribution
center in another geographic region or require additional space in our current
facility.

MANAGEMENT INFORMATION SYSTEMS

We seek to maintain management information systems that provide high
quality information and that enable us to manage and control our business.

Our operational systems are based on an STS fully integrated retail system.
This system operates in a UNIX environment on an IBM RISC 6000 and supports all
major business functions including sales, purchase order management,
distribution, store transfer, inventory control, merchandise planning and
financial systems. At the store level, we utilize a point-of-sale system that
includes bar code scanning capability, price look-up and dial-up credit
authorization, check authorization and financing authorization. This system also
supports a number of non-sales functions including inventory receipt, store
transfer, markdown notification, return to vendor, UPC look up and style locator
function. Our management information system is integrated among all major
aspects of our business, including sales, warehousing, distribution, purchasing,
inventory control, merchandise planning and replenishment and financial systems.
Stores are polled nightly, which supports the analysis of detailed sales and
merchandise information. Our management information systems have also been
supplemented with systems tailored for us such as our special order and an STS
EnVue systems. EnVue provides a merchandise data warehouse that enables us to
better analyze and improve our merchandise performance.

We are expanding our current hardware and network infrastructure, including
the development of an improved inventory management communications
infrastructure and the creation of data warehouses for store, marketing and
customer information to improve controls and enhance sales and operational
capabilities. We also intend to upgrade our systems to accommodate our planned
marketing strategy and inventory management, including the implementation of a
new warehouse management system. We will also seek to expand our store bridal
registry information to enhance communications with customers and target our
promotions. See "Risk Factors -- If our management information systems are
disrupted or we are not able to effectively upgrade and expand our management
information systems, our business operations and expansion could be adversely
affected."

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<PAGE> 38

EMPLOYEES

We had a total of approximately 2,200 employees as of April 3, 1999.
Approximately 820 were part-time employees. None of our employees are covered by
collective bargaining agreements. We consider our relations with our employees
to be satisfactory.

LEGAL PROCEEDINGS

We are involved in litigation that we believe ordinarily accompanies a
retail business. We do not believe that any of our pending or threatened
litigation will result in an outcome that would materially adversely affect our
business.

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<PAGE> 39

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table provides information regarding our directors and
executive officers:

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Steven H. Erlbaum......................... 50 Chairman of the Board
Robert D. Huth............................ 53 Chief Executive Officer, President and
Director
Philip Youtie............................. 51 Executive Vice President, Bridal Product
Development/Sourcing
Edward S. Wozniak......................... 53 Senior Vice President and Chief Financial
Officer
Marlene Karp.............................. 49 Senior Vice President, General Merchandise
Manager
Susan Zeitz............................... 42 Senior Vice President, Marketing
Kathy L. Kennedy.......................... 43 Senior Vice President, Sales
Fred A. Postelle.......................... 53 Senior Vice President, Human Resources
Gary E. Erlbaum........................... 54 Secretary, Treasurer and Director
Michael C. Erlbaum........................ 53 Director
Robert B. Calhoun, Jr. ................... 56 Director
Steven J. Sidewater....................... 55 Director
Eugene P. Lynch........................... 37 Director
</TABLE>

Prior to this offering, Steven H. Erlbaum served as our Chairman and Chief
Executive Officer. Upon consummation of this offering, Robert D. Huth, who has
been primarily responsible for running our day-to-day operations and has served
as our President and Chief Operating Officer since joining us in 1995, will
become our Chief Executive Officer and President. Steven H. Erlbaum will
continue as our Chairman of the Board and become a consultant to our business.

Steven, Gary and Michael Erlbaum are brothers. There are no other family
relationships among the directors and executive officers.

Prior to the completion of this offering, we intend to amend our articles
of incorporation to divide our board of directors into three classes, with each
director to serve for a three-year term. Eugene P. Lynch and Steven J.
Sidewater, are each expected to serve for a term ending at the annual meeting of
shareholders held in 2000. Robert B. Calhoun, Jr., Gary E. Erlbaum and Michael
C. Erlbaum are each expected to serve for a term ending at the annual meeting of
shareholders held in 2001. Robert D. Huth and Steven H. Erlbaum are each
expected to serve for a term ending at the annual meeting of shareholders held
in 2002. To the extent there is an increase in the number of directors, we will
distribute the additional directorships so that, as nearly as possible, each
class will consist of an equal number of directors. We intend to appoint or
elect one additional independent director within 90 days after the completion of
this offering.

Under a stockholders agreement among all of the current shareholders, The
Clipper Group has the right to designate three directors, and the remaining
shareholders have the right to designate the other four directors. Messrs. Huth,
Calhoun and Lynch have been designated by The Clipper Group. Mr. Lynch is not
currently a director, but will be a nominee for election at a shareholders
meeting to be held before consummation of the offering. Mr. Lynch will assume
the seat held by Andrew R. Taussig, who is not standing for re-election.

Our current directors and executive officers, along with their backgrounds,
are as follows:

Steven H. Erlbaum has been our Chairman of the Board and Chief Executive
Officer since 1990 and is a co-founder of David's Bridal. Mr. Erlbaum is also a
private investor in real estate and other private business ventures and was a
founder of Mr. Goodbuys, a chain of home improvement retail stores.

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<PAGE> 40

Robert D. Huth has been our President, Chief Operating Officer and one of
our directors since July 1995. Mr. Huth has been primarily responsible for
running our day-to-day operations since joining us in 1995. Prior to joining us,
from 1987 to 1995, Mr. Huth was the Executive Vice President and Chief Financial
Officer of Melville Corporation, a specialty retailer operating diversified
businesses. Mr. Huth also served on the Melville Board of Directors. From 1971
to 1987, Mr. Huth practiced accounting at KPMG Peat Marwick where he became a
partner in 1981. Mr. Huth also serves on the board of directors of Stage Stores,
Inc.

Philip Youtie has been our Executive Vice President of Bridal Product
Development/Sourcing since 1990. Mr. Youtie was our co-founder in 1990. Prior to
our founding, Mr. Youtie was President of David's by Minerva, a chain of bridal
shops based in Florida. Mr. Youtie was First Vice President and co-founder of
the Bridal Marketing Association of America and has served on the advisory panel
of Modern Bride magazine.

Edward S. Wozniak has been our Senior Vice President and Chief Financial
Officer since April 1998. Mr. Wozniak was Senior Vice President, Chief
Administrative Officer of Things Remembered, Inc., a subsidiary of Cole National
Corporation, from November 1996 through April 1998. Mr. Wozniak served as Vice
President, Chief Financial Officer and Secretary of Egghead, Inc., a computer
software and hardware provider, from May 1996 to November 1996. From 1990
through April 1996, Mr. Wozniak was employed by Thom McAn Shoe Company, a
division of Melville Corporation, most recently as Senior Vice President and
Chief Financial Officer.

Marlene Karp has been our Senior Vice President, General Merchandise
Manager since July 1996. Previously, Ms. Karp served as General Merchandise
Manager for the retail outlet division of Spiegel, Inc. from June 1995 until
July 1996. Ms. Karp was the Divisional Merchandise Manager for Spiegel's retail
outlet division from September 1993 through June 1995. From March 1989 through
April 1992, Ms. Karp was Divisional Merchandise Manager at Mervyn's.

Susan Zeitz has been Senior Vice President of Marketing at David's Bridal
since February 1998. From June 1996 to February 1998, Ms. Zeitz managed her own
brand marketing consulting company. From 1990-June 1996, Ms. Zeitz was Vice
President of Marketing and New Business Development at The Franklin Mint. From
1988 to 1990, Ms. Zeitz was Director of Marketing at Revlon, Inc. From 1982 to
1988, Ms. Zeitz held several brand marketing and product development positions
at Elizabeth Arden, Inc.

Kathy L. Kennedy has been our Senior Vice President, Sales since January
1996. From 1986 through January 1996, Ms. Kennedy held various positions with
Casual Corner and Group, including Regional Director from 1994 to 1996, Regional
Manager from 1990 to 1994, and District Manager from 1986 to 1990.

Fred A. Postelle has been our Senior Vice President, Human Resources since
July 1998. From September 1995 through July 1998, Mr. Postelle served as a human
resources consultant to us. Prior to joining us, Mr. Postelle served as Senior
Vice President, Human Resources of Woodward & Lothrop/ John Wanamaker in
Washington, D.C. from January 1995 through September 1995. From 1993 to 1995,
Mr. Postelle served as Senior Vice President, Human Resources at Goody's Family
Clothing and from 1990 through 1993, he was Vice President, Corporate Human
Resources at Melville Corporation.

Gary E. Erlbaum has been our Secretary and one of our directors since
August 1992. Since 1983, Mr. Erlbaum has been involved in real estate and other
business ventures. Mr. Erlbaum is also a director and a member of the executive
committee of DBT Online, Inc., an on-line provider of database services. Mr.
Erlbaum also serves as a director of several privately owned companies.

Michael C. Erlbaum has been one of our directors since January 1994. Mr.
Erlbaum has been the President of Floors, USA, a retail floor covering chain,
since 1976. Mr. Erlbaum is also the President of MCE Associates, a real estate
firm.

Robert B. Calhoun, Jr. has been one of our directors since July 1995. Mr.
Calhoun is a founder and has been a Managing Director of Monitor Clipper
Partners, Inc. since its formation in June 1997.

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<PAGE> 41

Mr. Calhoun also founded The Clipper Group, L.P. in 1990 and has served as its
President since such date. Prior to forming The Clipper Group, Mr. Calhoun was a
Managing Director of Credit Suisse First Boston Corporation, which he had joined
in 1965. Mr. Calhoun also serves on the boards of directors of Avondale
Incorporated, Hvide Marine, Inc., Interstate Bakeries, Inc. and TravelCenters of
America, Inc., as well as several privately-held companies.

Steven J. Sidewater has been one of our directors since August 1992. Mr.
Sidewater is currently President of RP Management, a real estate holding and
management company, a position he has held since June 1991. Mr. Sidewater served
in various capacities at Charming Shoppes, Inc. for approximately 25 years,
including President, Chief Operating Officer and Vice Chairman of the board of
directors from 1988 through 1990.

Eugene P. Lynch was one of the founders of The Clipper Group where he has
been a Managing Director since 1993. Prior to joining The Clipper Group, Mr.
Lynch was a Vice President of Credit Suisse First Boston, which he joined in
1983. Mr. Lynch also serves as a director of AVTEAM, Inc., Owosso Corp., Travel
Centers of America, Inc. and several other privately-held companies.

COMMITTEES OF THE BOARD OF DIRECTORS

Our board of directors has a compensation committee comprised of Steven H.
Erlbaum, Steven J. Sidewater and Robert B. Calhoun, Jr. The compensation
committee is responsible for the administration of all salary and incentive
compensation plans for all of our officers, including bonuses and options
granted under our stock option plan. Within 90 days following the consummation
of this offering, we plan to elect an audit committee consisting of at least two
independent directors. It is anticipated that the audit committee will be
responsible for reviewing with our management our financial controls and
accounting and reporting activities. In addition, the audit committee will
review the qualifications of our independent auditors, make recommendations to
our board of directors regarding the selection of independent auditors, review
the scope, fees and results of any audit and review any non-audit services and
related fees.

DIRECTOR COMPENSATION

We will reimburse our directors for out-of-pocket expenses incurred in
connection with their rendering of services as directors. We also intend to pay
cash fees or grant stock options to non-management directors for attendance at
meetings, in such amounts as may be determined by our board of directors from
time to time. In addition, effective upon the consummation of this offering,
Steven H. Erlbaum will continue as Chairman of the Board and become a consultant
to us for a three year term. He will be paid a consulting fee in each of the
first two years of $425,000. In addition, he will receive a fee of $200,000 for
the third year. Gary E. Erlbaum has assisted us, and will continue to assist us,
in bank financing, real estate matters and as a liaison with legal counsel. He
has received aggregate cash compensation of $60,600 in fiscal 1997 and $68,748
in fiscal 1998. We intend to continue compensating Gary E. Erlbaum for his
services.

40
<PAGE> 42

EXECUTIVE COMPENSATION

The following table sets forth information concerning compensation paid by
us to our chief executive officer and our four other most highly compensated
executive officers (the "named executive officers") for services rendered to us
during fiscal 1998.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ALL OTHER
ANNUAL COMPENSATION COMPENSATION(A)
------------------------------------------------ ---------------
OTHER ANNUAL
NAME AND POSITION YEAR SALARY($) BONUS($) COMPENSATION($)
<S> <C> <C> <C> <C> <C>
Steven H. Erlbaum.............. 1998 $425,000 $ -- $ -- $ 924
Chairman of the Board and
Chief Executive Officer
Robert D. Huth................. 1998 400,000 -- -- 985
President and Chief Operating
Officer
Philip Youtie.................. 1998 183,000 38,659 -- 518
Executive V.P. Bridal Product
Development/Sourcing
Marlene Karp................... 1998 177,300 45,630 40,470 1,000
Senior V.P., General
Merchandise Manager
Kathy L. Kennedy............... 1998 153,650 39,293 -- 1,000
Senior V.P., Sales
</TABLE>

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

(a) Represents our contributions for the account of the named executive officers
under the David's Bridal 401(k) Plan and Trust.

Effective on the date of this prospectus, we expect to grant options to
purchase 106,056 shares of our common stock to Steven H. Erlbaum, and options to
purchase 106,056 shares of common stock to Robert Huth, at an exercise price
equal to the price at which shares of our common stock are sold in this
offering. These options will be immediately exercisable. In addition, effective
upon completion of this offering, we expect to grant options to purchase 182,991
shares of our common stock to Robert Huth, at an exercise price equal to the
price at which shares of our common stock are sold in this offering. These
options will vest on the third anniversary of the date of grant.

The following table contains information regarding stock options held at
the end of the last fiscal year end by our Chief Executive Officer and our other
named executive officers, none of whom were granted any stock options in fiscal
1998. The value of unexercised in-the-money options is based upon the offering
price set forth on the cover page of this prospectus.

FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS HELD AT JANUARY 2, 1999 OPTIONS AT JANUARY 2, 1999
-------------------------------- ----------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Steven H. Erlbaum................... -- -- -- --
Robert D. Huth...................... 441,900 -- --
Philip Youtie....................... -- -- -- --
Marlene Karp........................ 33,879 17,676 --
Kathy L. Kennedy.................... 51,555 -- --
</TABLE>

41
<PAGE> 43

STOCK OPTION PLAN

Under our stock option plan, our designated employees or consultants and
non-employee members of our board of directors may receive grants of incentive
stock options and nonqualified stock options. The aggregate number of shares of
our common stock that may be issued under the stock option plan is 1,473,000
shares. As of April 3, 1999, options to purchase 1,401,550 shares were
outstanding under the stock option plan. We anticipate that, prior to the
completion of the offering, we will amend our stock option plan to provide that
the aggregate number of shares that may be issued under the stock option plan is
2,450,000 shares. In addition, prior to completion of the offering, we
anticipate that we will amend our stock option plan to provide that the maximum
number of shares that may be subject to grants to any individual in 1999 is
330,000 shares, and for future years is 150,000 shares. Employees may receive
incentive stock options or nonqualified stock options and restricted stock under
the stock option plan. Non-employee directors and consultants may receive
nonqualified stock options and restricted stock. If options terminate or expire,
or if restricted stock is forfeited the shares attributable to such grants may
again be subject to grants under the stock option plan. The stock option plan
will terminate on September 30, 2005, unless sooner terminated pursuant to its
terms.

The stock option plan is currently administered by the compensation
committee of our board. Grants and other actions by the committee are subject to
ratification by the board of directors.

The option price of an option may be equal to, greater than or less than
the fair market value of a share of common stock on the date of grant, provided
that:

- the option price of an incentive stock option may not be less than the
fair market value of a share of common stock on the date of grant and

- an incentive stock option that is granted to a person who owns more than
10% of our stock or a subsidiary must have an option price of not less than 110%
of the fair market of the common stock on the date of grant.

The committee determines the term of each option, which cannot exceed ten
years from the date of grant. However, an incentive stock option granted to a
10% shareholder may not have a term longer than five years from the date of
grant.

Unless the committee determines otherwise, upon a change of control where
we are not the surviving corporation, outstanding options will be assumed by the
surviving corporation and will continue to vest following the change of control.
In other cases, unless the committee determines otherwise, outstanding grants
will automatically vest in full in the event of a change of control.
Alternatively, in the event of a change of control, the committee may require
that grantees surrender their outstanding options in exchange for payment by us,
in cash or common stock, of an amount equal to the amount by which the fair
market value of the common stock exceeds the option price.

The committee may grant restricted stock with such vesting or other terms
as the committee deems appropriate.

A change of control will be deemed to occur if

- any person acquires securities representing more than 25% of the voting
power of our then outstanding securities or

- shareholders approve an agreement providing for

- a merger or consolidation where our shareholders immediately before
the transaction will not hold, immediately after the transaction, more
than 50% of the stock of the surviving corporation and where,
immediately after the transaction, persons who were our directors
immediately before the transaction do not constitute a majority of the
board of the surviving corporation,

- a sale of substantially all of our assets,

42
<PAGE> 44

- a liquidation or dissolution of our company,

- any person begins a tender offer for 25% or more of our stock or

- directors are elected such that a majority of the directors have been
members of the board for less than two years, unless the election or
nomination of the directors was approved by at least two-thirds of the
directors then in office who were directors at the beginning of the
period.

EMPLOYMENT AND CONSULTING AGREEMENTS

We have entered into an employment agreement with Philip Youtie, effective
on the date of this prospectus. The principal terms of the employment agreement
are as follows:

- Term: two years.

- Base Salary: $200,000 in the first year, $210,000 in the second year.

- Bonus: eligible for an annual bonus in accordance with our bonus plan.

- Severance: in the event of termination of Mr. Youtie by us without cause,
we will continue to pay Mr. Youtie's salary for the lesser of 12 months
or the remaining term of the employment agreement.

Mr. Youtie has also agreed to non-competition and non-solicitation
covenants as set forth in his employment agreement.

We have entered into an employment agreement with Robert D. Huth, effective
upon completion of this offering. The principal terms of the employment
agreement are as follows:

- Term: three years.

- Base Salary: $500,000 per year, subject to annual review by the
Compensation Committee of the board of directors.

- Bonus: eligible to participate in a bonus plan to be adopted by the
Compensation Committee of our board of directors.

- Severance: in the event of termination of Mr. Huth by us without cause,
we will continue to pay Mr. Huth's salary over the 12 months following
termination.

- Options: Mr. Huth will receive options to purchase 182,991 shares of our
common stock, at an exercise price equal to the price at which shares of
our common stock are sold in this offering. These options will vest on
the third anniversary of the date of grant.

Mr. Huth has also agreed to non-competition and non-solicitation covenants
as set forth in his employment agreement.

We have entered into a consulting agreement with Steven H. Erlbaum,
effective upon completion of this offering. The principal terms of the
consulting agreement are as follows:

- Term: three years.

- Base Compensation: $425,000 in the first two years, $200,000 in the third
year.

- Bonus: eligible for a bonus based upon a comparison of actual to budgeted
earnings for 1999.

Steven H. Erlbaum has also agreed to non-competition and non-solicitation
covenants as set forth in his consulting agreement.

43
<PAGE> 45

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

SALES OF CLASS D PREFERRED STOCK

On August 15, 1997, pursuant to the terms of a series of subscription
agreements, we sold an aggregate of 686,402 shares of class D preferred stock
for an aggregate purchase price of $5.0 million or $7.25 per share. These shares
were sold to several of our existing shareholders, including 448,651 shares to
The Clipper Group, an aggregate of 69,842 shares that are beneficially owned by
Steven J. Sidewater, 36,371 shares to Michael C. Erlbaum, 24,317 shares that are
beneficially owned by Gary E. Erlbaum. Each outstanding share of class D
preferred stock will convert upon the consummation of this offering into 1.473
shares of common stock, or an aggregate of 1,011,070 shares of common stock.

MDR ASSOCIATES

In December 1997, we purchased a one-third interest in MDR Associates LLC
("MDR") for $460,000. We borrowed this amount from Gary E. Erlbaum which loan
was evidenced by a demand note that bore interest at 7.75%, and was repaid in
full in January 1998. MDR owns a one-eighth interest in an aircraft. We made
this investment to facilitate travel between our locations. On November 23,
1998, Steven H. Erlbaum and Gary E. Erlbaum repurchased our interest in MDR and
reimbursed us for all expenses relating to MDR paid by us since December 1997.
After such purchase, each of Steven H. Erlbaum, our Chief Executive Officer and
Chairman of the Board, and Gary E. Erlbaum, a director, individually own a
one-half interest in MDR and each is also responsible for one-half of such
expenses allocated to MDR.

STOCK REDEMPTIONS

On March 30, 1996, we redeemed 526,173 shares of our Class A Common Stock
from Steven Erlbaum, for consideration equal to $3.76 per share. On March 30,
1996, we redeemed 271,055 shares of our Class A Common Stock from Gary Erlbaum,
for consideration equal to $3.76 per share, and on October 24, 1996, we redeemed
77,252 shares of our Class A Common Stock from Gary Erlbaum, for consideration
equal to $3.88 per share. On June 11, 1996, we redeemed 225,173 shares of our
Class A Common Stock from Philip Youtie, for consideration equal to $5.33 per
share, and on February 2, 1998 we redeemed 109,555 shares of our Class A Common
Stock from Philip Youtie, for consideration equal to $5.94 per share.

FLOORS USA

During fiscal 1997 and fiscal 1998 we purchased an aggregate of $159,056
and $297,217 in leasehold improvements from Floors USA. Michael C. Erlbaum, is
the controlling shareholder of Floors USA. The terms upon which we purchased
such leasehold improvements from Mr. Erlbaum are no more favorable to Mr.
Erlbaum than those that are available from non-affiliated third-parties.

RELATED PARTY TRANSACTIONS

Our board of directors has adopted a policy that we will not enter into any
related-party transactions unless they are approved by the disinterested members
of our board of directors and are on terms that are representative of the terms
that are available from non-affiliated third-parties.

44
<PAGE> 46

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth information regarding the beneficial
ownership of our common stock by:

- Our chief executive officer, our four other most highly compensated
executive officers and our directors

- Each selling shareholder

- All directors and executive officers as a group

- Each person known to us to own beneficially more than 5% of our
outstanding shares

A person has beneficial ownership of shares if he has the power to vote or
dispose of the shares. This power can be exclusive or shared, direct or
indirect. In addition, a person beneficially owns shares underlying options that
are presently exercisable or will become exercisable within 60 days of the date
of this prospectus.

As of January 2, 1999, there were 9,739,848 shares of our common stock,
outstanding and 6,903,062 shares of common stock issuable upon conversion of all
outstanding preferred stock.

To calculate a shareholder's percentage of beneficial ownership, we must
include in the numerator and denominator those shares underlying options
beneficially owned by that shareholder. Options held by other shareholders,
however, are disregarded in this calculation. Therefore, the denominator used in
calculating beneficial ownership among our shareholders may differ.

The table below assumes that the underwriters' have not exercised their
over-allotment option. In addition, the symbol "*" means that the percentage is
less than 1.0%.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP NUMBER OF BENEFICIAL OWNERSHIP
PRIOR TO OFFERING SHARES AFTER OFFERING
-------------------- TO BE SOLD --------------------
NAME SHARES PERCENT* IN THIS OFFERING SHARES PERCENT*
<S> <C> <C> <C> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS
Steven H. Erlbaum(a).................... 3,344,813 20.0% 1,474,371 1,870,442 10.2%
Philip Youtie(b)........................ 1,533,057 9.2% 291,281 1,241,776 6.8%
Gary E. Erlbaum(c)...................... 1,662,208 10.0% 575,911 998,168 5.5%
Michael C. Erlbaum(d)................... 733,404 4.4% 211,685 433,590 2.4%
Robert D. Huth(e)....................... 547,956 3.2% 93,750 454,206 2.4%
Steven J. Sidewater(f).................. 1,036,572 6.2% 406,488 630,084 3.4%
Marlene Karp(g)......................... 33,879 * -- 33,879 *
Kathy L. Kennedy(h)..................... 51,555 * -- 51,555 *
Eugene P. Lynch......................... -- -- -- -- --
Robert B. Calhoun, Jr.(i)............... -- * -- -- --
All executive officers and directors as
a group (10 persons)(j)............... 8,943,444 51.5% 3,053,486 5,713,700 30.2%
FIVE PERCENT HOLDERS
The Clipper Group(k).................... 6,552,860 39.4% 2,423,918 4,128,942 22.6%
</TABLE>

45
<PAGE> 47

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP NUMBER OF BENEFICIAL OWNERSHIP
PRIOR TO OFFERING SHARES AFTER OFFERING
-------------------- TO BE SOLD --------------------
NAME SHARES PERCENT* IN THIS OFFERING SHARES PERCENT*
<S> <C> <C> <C> <C> <C>
OTHER SELLING SHAREHOLDERS
The Vederman Family Partnership......... 518,305 3.1% 203,251 315,054 1.7%
Jon Erlbaum............................. 45,810 * 17,964 27,846 *
Marc Erlbaum............................ 45,810 * 17,964 27,846 *
Daniel Erlbaum(l)....................... 45,810 * 17,964 27,846 *
Michael Moore........................... 97,969 * -- 97,969 *
Shelly Shapiro(m)....................... 217,264 1.3% 41,280 175,984 *
Mordechai Kafry(n)...................... 152,388 * 59,758 92,630 *
First Union Corporation................. 489,997 2.9% 192,150 297,847 1.6%
Michael Erlbaum and Gary Erlbaum as
Trustees under the Agreement of Trust
of S.H. Erlbaum(o).................... 193,593 1.2% 88,129 105,464 *
Addwood Limited(p)...................... 225,284 1.4% 88,344 136,940
Eileen Rae Winkler Youtie, Custodian for
Haleigh R. Youtie..................... 108,720 * 20,657 88,063 *
Eileen Rae Winkler Youtie, Custodian for
Maxwell Evan Youtie................... 132,288 * 25,135 107,153 *
</TABLE>

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

(a) Mr. Steven Erlbaum is our Chairman and Chief Executive Officer. His address
is 44 West Lancaster Avenue, Suite 250, Ardmore, Pennsylvania 19003.
Includes 450,441 shares of common stock held by Steven Erlbaum as Trustee
for Adam Erlbaum. Also includes currently exercisable options to purchase
106,056 shares of common stock granted on the date of this prospectus.
Number of shares to be sold in this offering includes 205,053 shares to be
sold by Steven Erlbaum as Trustee for Adam Erlbaum.

(b) Mr. Youtie is our Executive Vice President, Bridal Product Development
Servicing. His address is 44 West Lancaster Avenue, Suite 250, Ardmore,
Pennsylvania 19003. Includes 14,273 shares of common stock held by Philip
Youtie as custodian for Haleigh Youtie, 2,031 shares of common stock held by
Philip Youtie as custodian for Maxwell Youtie. Excludes 108,720 shares of
common stock held by Eileen Youtie as custodian for Haleigh Youtie and
132,288 shares of common stock held by Eileen Youtie as custodian for
Maxwell Youtie. Mr. Youtie disclaims beneficial ownership of the shares held
by Eileen Youtie as custodian for each of Haleigh Youtie and Maxwell Youtie.
Number of shares to be sold in this offering includes 2,712 shares to be
sold by Philip Youtie as custodian for Haleigh Youtie, and 386 shares to be
sold by Philip Youtie as custodian for Maxwell Youtie.

(c) Includes 152,112 shares of common stock, and 35,818 shares of Class D
Preferred Stock held by the Erlbaum Family LP and excludes 137,430 shares
held by Mr. Gary Erlbaum's three children. Mr. Gary Erlbaum is the President
of the general partner of the Erlbaum Family LP. Mr. Gary Erlbaum disclaims
beneficial ownership of the shares held by his children. Includes 193,593
shares of common stock held by Michael Erlbaum and Gary Erlbaum as Trustees
under the Agreement of Trust of S.H. Erlbaum. Mr. Gary Erlbaum's address is
44 West Lancaster Avenue, Suite 250, Ardmore, Pennsylvania 19003. Mr. Gary
Erlbaum is our Secretary and Treasurer and is a member of our board of
directors. Number of shares to be sold in this offering includes 73,696
shares to be sold by the Erlbaum Family LP. Number of shares sold in this
offering does not include 88,129 shares to be sold by Michael Erlbaum and
Gary Erlbaum as Trustees under the Agreement of Trust of S.H. Erlbaum.
Beneficial ownership after the offering includes 105,464 shares of common
stock held by Michael Erlbaum and Gary Erlbaum as Trustees under the
Agreement of Trust of S.H. Erlbaum.

(d) Includes 167,922 shares of common stock held by the MCE Family Limited
Partnership. Mr. Michael Erlbaum is the general partner of the MCE Family
Limited Partnership. Includes 193,593 shares of common stock held by Michael
Erlbaum and Gary Erlbaum as Trustees under the Agreement of Trust of S.H.
Erlbaum. Mr. Michael Erlbaum is a member of our board of directors. Number
of shares sold in the offering includes 65,850 shares to be sold by MCE
Family Limited Partnership. Number of shares to be sold in this offering
does not include 88,129 shares to be sold by Michael Erlbaum and Gary
Erlbaum as Trustees under the Agreement of Trust of S.H. Erlbaum. Beneficial
ownership after the offering includes 105,464 shares of common stock held by
Michael Erlbaum and Gary Erlbaum as Trustees under the Agreement of Trust of
S.H. Erlbaum.

46
<PAGE> 48

(e) Represents 441,900 shares of common stock underlying presently exercisable
options. Also includes currently exercisable options to purchase 106,056
shares of common stock granted on the date of this prospectus. Mr. Huth has
a .155% interest in the shares of our stock owned by The Clipper Group, and
disclaims beneficial interest in the shares owned by The Clipper Group other
than .155% of these shares. Mr. Huth is our President and Chief Operating
Officer, and is a member of our board of directors.

(f) Includes (i) 200,099 shares of common stock held by Steven J. Sidewater,
Wendy Sidewater and Peter Sidewater as Trustees of the Grantor Retained
Annuity Trust of Steven J. Sidewater and (ii) 200,099 shares of common stock
held by SPWJ Associates, L.P. Mr. Sidewater is the general partner of SPWJ
Associates, L.P. Includes 33,317 shares of common stock and 3,396 shares of
class D preferred stock held by the 1998 Irrevocable Deed of Trust of Steven
Sidewater for Wendy Sidewater, 33,317 shares of common stock and 3,396
shares of class D preferred stock held by the 1998 Irrevocable Deed of Trust
of Steven Sidewater for Peter Sidewater and 466,865 shares of common stock
and 51,440 shares of class D preferred stock held by the Nancy Sidewater
Agreement of Trust. Mr. Sidewater is a member of our board of directors.
Number of shares to be sold in this offering includes 78,468 shares to be
sold by Steven J. Sidewater, Wendy Sidewater and Peter Sidewater as Trustees
of the Grantor Retained Annuity Trust of Steven J. Sidewater, 78,468 shares
to be sold by SPWJ Associates, L.P., 14,397 shares to be sold by the 1998
Irrevocable Deed of Trust of Steven Sidewater for Wendy Sidewater, 14,397
shares to be sold by the 1998 Irrevocable Deed of Trust of Steven Sidewater
for Peter Sidewater and 203,251 shares to be sold by the Nancy Sidewater
Agreement of Trust.

(g) Represents 33,879 shares of common stock underlying presently exercisable
options. Ms. Karp is our Senior Vice President, General Merchandise Manager.

(h) Represents 51,555 shares of common stock underlying presently exercisable
options. Ms. Kennedy is our Senior Vice President, Sales.

(i) Excludes 6,552,860 shares of common stock held by The Clipper Group. Mr.
Calhoun is the sole shareholder and a director of the ultimate general
partner of The Clipper Group and is deemed to beneficially own all shares of
common stock beneficially owned by The Clipper Group. Mr. Calhoun is a
member of our board of directors.

(j) Includes 739,446 shares of common stock underlying presently exercisable
options.

(k) Includes shares beneficially owned by Clipper/Merchant Partners, L.P.,
Clipper Equity Partners I, L.P., Clipper/ Merban, L.P., and Clipper Capital
Associates, L.P., Credit Suisse First Boston Merchant Investments 1995/96,
L.P. and Clipper/European Re, L.P. The address for each of these entities is
650 Madison Avenue, New York, New York 10022. Clipper Capital Associates,
L.P. is the general partner of all of The Clipper Group partnerships. The
general partner of Clipper Capital Associates, L.P. is Clipper Capital
Associates, Inc. Robert B. Calhoun is the sole shareholder and a director of
Clipper Capital Associates, Inc. As a result, each of Mr. Calhoun, Clipper
Capital Associates, L.P. and Clipper Capital Associates, Inc. is deemed to
beneficially own all shares of common stock beneficially owned by The
Clipper Group.

(l) Mr. Daniel Erlbaum is employed by us.

(m) Mr. Shapiro is employed by us.

(n) Mr. Kafry is a principal owner of Addwood Limited, our Hong Kong joint
venture partner.

(o) 193,593 shares owned prior to this offering by Gary Erlbaum and Michael
Erlbaum as Trustees under the Agreement of Trust of S.H. Erlbaum are also
included in the beneficial ownership table for each of Gary Erlbaum and
Michael Erlbaum.

(p) Addwood Limited is our Hong Kong joint venture partner.

47
<PAGE> 49

DESCRIPTION OF CAPITAL STOCK

The following summarizes the terms of our common stock you will receive in
this offering. Please read our Articles of Incorporation, which are included as
an exhibit to the Registration Statement of which this prospectus is a part.

OUR AUTHORIZED CAPITAL STOCK

- 100 million shares of common stock, par value $0.01 per share;

- 5 million shares of preferred stock, par value $0.01 per share;

- Immediately after the sale of the shares of common stock in this
offering, we will have 18,205,410 shares of common stock outstanding and
no shares of preferred stock outstanding.

COMMON STOCK

Voting:

- One vote for each share held of record on all matters submitted to a vote
of shareholders;

- No cumulative voting rights;

- Election of directors by plurality of votes cast; and

- All other matters by majority of the votes cast.

Dividends:

- Subject to preferential dividend rights of outstanding shares of
preferred stock, common shareholders are entitled to receive ratably
declared dividends; and

- The Board may only declare dividends out of legally available funds.

Additional Rights:

- Subject to the preferential liquidation rights of outstanding shares of
preferred stock, common shareholders are entitled to receive ratably net
assets (available after payment of debts and other liabilities) upon our
liquidation, dissolution or winding up;

- No preemptive rights;

- No subscription rights;

- No redemption rights;

- No sinking fund rights; and

- No conversion rights.

The rights and preferences of common shareholders are subject to the rights of
any class of preferred stock we may issue in the future.

PREFERRED STOCK

By resolution of our board of directors, we may, without any further vote
or action by our shareholders, authorize and issue, subject to limitations
prescribed by law, an aggregate of 5 million shares of preferred stock. The
preferred stock may be issued in one or more classes or class. With respect to
any classes or class, the Board may determine the designation and the number of
shares, preferences, limitations and special rights, including dividend rights,
conversion rights, voting rights, redemption rights and liquidation preferences.
Because of the rights that may be granted, the issuance of preferred stock may
delay, defer or prevent a change of control.

48
<PAGE> 50

Prior to this offering, we had 171,792 shares of Class A preferred stock,
114,104 shares of Class B preferred stock, 114,104 shares of Class C preferred
stock and 686,402 shares of Class D preferred stock issued and outstanding. Upon
the consummation of this offering, all of our outstanding shares of preferred
stock will be subject to mandatory conversion, into an aggregate of 6,903,062
shares of common stock.

FLORIDA ANTI-TAKEOVER LAWS AND PROVISIONS OF OUR ARTICLES OF INCORPORATION

The provisions of the Florida Business Corporation Act and our Articles of
Incorporation, which are described below, could make it more difficult for a
third party to acquire control of us, even if such change of control would be
beneficial to the shareholders.

Section 607.0901 of the Florida Business Corporation Act generally requires
that, in merger, consolidation, specified asset sales or other specified
transactions between an "interested shareholder" (or an affiliate of the
interested shareholder) and a Florida public corporation, all of the
shareholders receive an amount equal to the greater of:

1) the highest price per share, including brokerage commissions and
other specified fees, paid by the interested shareholder for any shares
acquired by it (the "Highest Per Share Price") within the two-year period
immediately preceding the date on which it became an interested shareholder
or the announcement date of the transaction, whichever is higher;

2) the fair market value per share on the date on which it became an
interested shareholder or the announcement date of the transaction,
whichever is higher, or

3) the fair market value per share determined under (2) above,
multiplied by the ratio of the Highest Per Share Price within the two year
period immediately preceding the announcement date of the transaction to
the fair market value per share on the date of the interested shareholder's
first share acquisition during such two year period.

An "interested shareholder" is generally defined as a person that owns more than
10 percent of the voting shares of a corporation. The "fair market value" per
share generally means the highest closing sale price during the immediately
preceding 30-day period. The fair price provisions do not apply:

1) to a transaction approved by two-thirds of the shareholders other
than the interested shareholder;

2) to a transaction approved by a majority of the directors who are
not affiliated with the interested shareholder;

3) to a corporation which has not had more than 300 shareholders of
record at any time during the preceding three years;

4) if the interested shareholder has owned at least 80 percent of the
outstanding shares for at least five years; or

5) if the interested shareholder owns at least 90 percent of the
outstanding shares other than shares acquired from the corporation.

Section 607.0902 of the Florida Business Corporation Act generally provides
that, in the event any person acquires a control share, which is defined as 20
percent or more of the outstanding voting shares of a Florida public
corporation, all of the shares acquired by the acquiror within 90 days before
and after the date on which the acquiror reached the 20 percent threshold will
not have voting rights, unless the remaining disinterested shareholders approve
voting rights for such shares by a majority vote at a special meeting called for
that purpose. In addition to the 20 percent threshold, a control share
acquisition also takes place when an acquiror acquires 33 1/3 percent and 50
percent of the voting shares of a corporation. Among other things, the voting
disqualification provisions do not apply to:

1) the acquisition of shares of a corporation which has been approved
in advance by the board of directors of the corporation;

49
<PAGE> 51

2) a merger or share exchange effected in compliance with the Florida
corporate laws; or

3) a corporation with neither 10 percent of its shareholders resident
in Florida, 10 percent of its shares owned by Florida residents nor 1,000
shareholders resident in Florida.

If the control shares are a majority of the outstanding shares and are accorded
full voting rights by the disinterested shareholders, all of the disinterested
shareholders will have dissenters' rights to receive in cash from the
corporation the fair value of their shares. Fair value of the shares cannot be
less than the highest price paid per share by the acquiror in the control share
acquisition.

Our Articles of Incorporation provide that shareholders may call special
meetings of the shareholders only if the holders of at least 20 percent of all
votes entitled to be cast on any issue proposed to be considered at the meeting
make a demand. In addition, the Articles of Incorporation provide that
shareholders must act at a meeting and not by written consent. The Articles of
Incorporation also provide for a classified board. See "Management--Executive
Officers and Directors".

REGISTRATION RIGHTS

Holders of 9,739,848 shares of common stock, and holders of 6,903,082
shares of common stock issuable upon conversion of preferred stock, including
The Clipper Group, Steven H. Erlbaum, Gary E. Erlbaum, Philip Youtie, Michael C.
Erlbaum and Steven J. Sidewater, have been granted registration rights. These
rights are provided under the terms of the registrable securities and agreements
between us and the holders of such securities. Such agreements and registrable
securities provide, in specific instances, demand registration rights. In
particular, the Clipper Group may demand that we register their shares on not
more than three occasions, in which event the holders of all shares of common
stock and preferred stock would have specific rights to participate in the
registration. In addition, pursuant to these agreements, the holders are
entitled, subject to specific limitations, to require us to include their
registrable securities in future registration statements we file under the
Securities Act of 1933. The holders of all outstanding shares of common stock
have specific piggyback registration rights, subject to reduction in the
discretion of an underwriter. Registration of shares of common stock pursuant to
the exercise of demand registration rights or piggyback registration rights
would result in such shares becoming freely tradable without restriction under
the Securities Act of 1933 immediately upon the effectiveness of such
registration and may adversely affect our stock price.

TRANSFER AGENT

The transfer agent for our common stock is The Bank of New York.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our common stock in the public market
following this offering could adversely affect the market price of our common
stock and adversely affect our ability to raise capital at a time and on terms
favorable to us.

Of the 18,299,160 shares to be outstanding after this offering (assuming
that the underwriters do not exercise their over-allotment option), the
7,812,500 shares of common stock offered hereby will be freely tradeable without
restriction in the public market unless such shares are held by "affiliates," as
that term is defined in Rule 144 under the Securities Act of 1933. The remaining
shares of common stock to be outstanding after this offering are "restricted
securities" under the Securities Act of 1933 and may be sold in the public
market under Rule 144, subject to the manner of sale and other limitations of
Rule 144.

In addition, as of April 3, 1999, there were options to purchase 1,401,550
shares of common stock, of which 1,055,153 options were fully vested and
exercisable. An additional 71,450 shares were reserved for issuance under our
stock option plan. We intend to register the shares of common stock issued,
issuable or reserved for issuance under the plan following the date of this
prospectus.

50
<PAGE> 52

Following completion of the offering, holders of 10,486,660 shares of
common stock are entitled to registration rights with respect to such shares for
resale under the Securities Act. If such holders, by exercising their
registration rights, cause a large number of shares to be registered and sold in
the public market, will likely cause an adverse effect on the market price for
our common stock. These registration rights may not be exercised prior to the
expiration of 180 days from the date of this prospectus. See "Description of
Capital Stock--Registration Rights."

LOCK-UP ARRANGEMENTS

Along with our officers and directors and all of the holders of the
preferred stock we have agreed not to sell or otherwise dispose of any shares of
common stock for a period of 180 days after the date of this prospectus without
the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation.

After the completion of this offering, we intend to file a registration
statement on Form S-8 under the Securities Act to register all shares of common
stock reserved for issuance under our stock option plan.

51
<PAGE> 53

UNDERWRITING

Subject to the terms and conditions of an underwriting agreement dated
, 1999 the underwriters named below, who are represented by
Donaldson, Lufkin & Jenrette Securities Corporation and, Legg Mason Wood Walker,
Incorporated have severally agreed to purchase from us and the selling
shareholders the respective number of shares set forth opposite their names
below.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.........
Legg Mason Wood Walker, Incorporated........................

---------
TOTAL............................................. 7,812,500
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase and accept delivery of the shares included in this
offering are subject to approval of legal matters by their counsel and to other
specified conditions. The underwriters are obligated to purchase and accept
delivery of all the shares (other than those shares covered by the
over-allotment option described below) if they purchase any of the shares.

The underwriters initially propose to offer some of the shares directly to
the public at the public offering price set forth on the cover page of this
prospectus and some of the shares to dealers at the public offering price less a
concession not in excess of $ per share. The underwriters may allow, and
such dealers may re-allow, a concession not in excess of $ per share on
sales to other dealers. After the initial offering of the shares to the public,
the representatives may change the public offering price and such concessions at
any time without notice.

The selling shareholders have granted the underwriters an option,
exercisable for 30 days from the date of this prospectus, to purchase, from time
to time, in whole or in part, up to 1,171,875 additional shares at the public
offering price less the underwriting fees. The underwriters may exercise such
option solely to cover overallotments, if any, made in connection with this
offering. To the extent that the underwriters exercise such option, each
underwriter will become obligated, subject to specified conditions, to purchase
a number of additional shares approximately proportionate to such underwriter's
initial purchase commitment.

The following table shows the underwriting fees to be paid to the
underwriters by us and the selling shareholders in connection with this
offering. These amounts are shown assuming both no exercise and full exercise of
the underwriters' option to purchase additional shares of common stock.

<TABLE>
<CAPTION>
PAID BY THE COMPANY PAID BY SELLING STOCKHOLDERS
---------------------------- --------------------------------
NO EXERCISE FULL EXERCISE
<S> <C> <C> <C>
Per Share................................. $ $ $
Total..................................... $ $ $
</TABLE>

We and the selling shareholders have agreed to indemnify the underwriters
against specified civil liabilities, including liabilities under the Securities
Act of 1933, or to contribute to payments that the underwriters may be required
to make in respect of any of those liabilities.

The underwriters have reserved for sale, at the initial public offering
price, up to 390,625 shares of the common stock for employees, directors and
other persons associated with us who have expressed an interest in purchasing
such shares of common stock in this offering. The number of shares of common
stock available for sale to the general public in this offering will be reduced
to the extent such persons purchase the reserved shares. Any reserved shares not
so purchased will be offered by the underwriters to the general public on the
same terms as the other shares offered hereby.

52
<PAGE> 54

DLJdirect Inc., an affiliate of Donaldson, Lufkin & Jenrette Securities
Corporation and a member of the selling group, is facilitating the distribution
of the shares sold in this offering over the Internet. The underwriters have
agreed to allocate a limited number of shares to DLJdirect Inc. for sale to
brokerage account holders.

We estimate that expenses of the offering will total $1,300,000.

We and our executive officers and directors and several of our shareholders
(including the selling shareholders) have agreed that, subject to some
exceptions for a period of 180 days from the date of this prospectus, they will
not, without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation:

- offer, pledge, sell, contract to sell, sell any option or contract to
purchase, any shares of common stock or any securities convertible into
or exercisable or exchangeable for common stock;

- purchase any option or contract to sell, any shares of common stock or
any securities convertible into or exercisable or exchangeable for common
stock;

- grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of common stock or any
securities convertible into or exercisable or exchangeable for common
stock;

- enter into any swap or other arrangement that transfers all or a portion
of the economic consequences associated with the ownership of any common
stock (regardless of whether any of the transactions described above is
to be settled by the delivery of common stock, or such other securities,
in cash or otherwise).

In addition, during such period, we have also agreed not to file any
registration statement with respect to, and each of our executive officers and
directors and several of our shareholders (including the selling shareholders)
have agreed not to make any demand for, or exercise any right with respect to,
the registration of any shares of common stock or any securities convertible
into or exercisable or exchangeable for common stock without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation.

We have made application to list our common stock on the New York Stock
Exchange under the symbol "DBR".

The representatives of the underwriters have advised us that the
underwriters do not intend to confirm sales to any account over which they
exercise discretionary authority.

Other than in the United States, no action has been taken by us, the
selling shareholders or the underwriters that would permit a public offering of
the shares of common stock included in this offering in any jurisdiction where
action for that purpose is required. The shares included in this offering may
not be offered or sold, directly or indirectly, nor may this prospectus or any
other offering material or advertisement in connection with the offer and sale
of any such shares be distributed or published in any jurisdiction, except under
circumstances that will result in compliance with the applicable rules and
regulations of such jurisdiction. Persons who receive this prospectus are
advised to inform themselves about and to observe any restrictions relating to
this offering and the distribution of this prospectus. This prospectus is not an
offer to sell or a solicitation of an offer to buy any shares of common stock
included in this offering in any jurisdiction where that would not be permitted
or legal.

In connection with this offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
common stock. Specifically, the underwriters may overallot this offering,
creating a syndicate short position. In addition, the underwriters may bid for
and purchase shares of common stock in the open market to cover such syndicate
short position or to stabilize the price of the common stock. These activities
may stabilize or maintain the market price of the common stock above independent
market levels. The underwriters are not required to engage in these activities,
and may end any of these activities at any time.

53
<PAGE> 55

PRICING OF THIS OFFERING

Prior to this offering, there has been no public market for our common
stock. Consequently, the initial public offering price for our common stock was
determined by negotiation among us, the selling shareholders and the
representatives of the underwriters. Among the factors considered in determining
the public offering price were:

- prevailing market conditions;

- our results of operations in recent periods;

- the present stage of our development;

- the market capitalization and stages of development of other companies
which the representatives of the underwriters believe to be comparable
to us; and

- estimates of our business potential.

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us
by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania and Miami, Florida.
Certain legal matters in connection with this offering will be passed upon for
the Underwriters by Davis Polk & Wardwell, New York, New York.

EXPERTS

Our consolidated financial statements as of January 3, 1998 and January 2,
1999 and for the fiscal years ended January 4, 1997, January 3, 1998 and January
2, 1999, included in this prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.

AVAILABLE INFORMATION

This prospectus constitutes a part of a registration statement on Form S-1
filed by us with the Commission under the Securities Act, with respect to the
securities offered in this prospectus. This prospectus does not contain all the
information which is in the registration statement. Certain parts of the
registration statement are omitted as allowed by the rules and regulations of
the Commission. We refer to the registration statement and to the exhibits to
such registration statement for further information with respect to us and the
securities offered in this prospectus. Statements contained in this prospectus
concerning the provisions of documents are necessarily summaries of the material
provisions of such documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
Copies of the registration statement are on file at the offices of the
Securities and Exchange Commission and may be inspected without charge at the
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of the registration statement may be obtained from the Public Reference
Section of the Commission upon payment of the fee prescribed by the Commission.
Information on David's Bridal can be obtained from the Public Reference Room by
calling 1-800-SEC-0330. The Commission maintains a Web site that contains all
information filed electronically by us, including reports, proxy and information
statements. The address of the Commission's Web site is (http://www.sec.gov).

We intend to list our common stock on the New York Stock Exchange. Reports,
proxy statements and other information concerning us can be inspected at: the
New York Stock Exchange, Inc., 11 Wall Street, New York, NY 10005.

REPORTS TO SECURITY HOLDERS

We intend to distribute to our shareholders annual reports containing
audited financial statements and will make available copies of our quarterly
reports for the first three quarters of each fiscal year containing unaudited
interim financial information.

54
<PAGE> 56

DAVID'S BRIDAL, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Report Of Independent Public Accountants.................... F-2
Consolidated Balance Sheets................................. F-3
Consolidated Statements Of Operations....................... F-4
Consolidated Statements Of Redeemable Common Stock And
Shareholders' Equity...................................... F-5
Consolidated Statements Of Cash Flows....................... F-6
Notes To Consolidated Financial Statements.................. F-7
</TABLE>

F-1
<PAGE> 57

After the stock split discussed in Note 2 to the Financial Statements is
effected, we will be in a position to render the following report.

/s/ ARTHUR ANDERSEN LLP

Philadelphia, Pa.

April 5, 1999

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To David's Bridal, Inc.:

We have audited the accompanying consolidated balance sheets of David's
Bridal, Inc. (a Florida corporation) and subsidiaries as of January 3, 1998 and
January 2, 1999, and the related consolidated statements of operations,
redeemable common stock and shareholders' equity and cash flows for each of the
three years in the period ended January 2, 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 David's Bridal, Inc. and
subsidiaries as of January 3, 1998 and January 2, 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
January 2, 1999 in conformity with generally accepted accounting principles.

Philadelphia, Pa.

February 10, 1999 (except for the items

discussed in Note 2, as to

which the date is April , 1999)

F-2
<PAGE> 58

DAVID'S BRIDAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
JANUARY 3, JANUARY 2,
1998 1999
---------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 464 $ 320
Accounts receivable....................................... 1,829 2,844
Inventories............................................... 32,113 37,458
Prepaid expenses and other assets......................... 1,864 2,247
Deferred tax asset........................................ 296 --
---------- ----------
Total current assets.............................. 36,566 42,869
---------- ----------
PROPERTY AND EQUIPMENT, net................................. 15,581 20,650
---------- ----------
DEFERRED TAX ASSET.......................................... 616 1,066
---------- ----------
OTHER ASSETS, net of accumulated amortization of $36 and
$79, respectively......................................... 893 977
---------- ----------
$ 53,656 $ 65,562
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank overdrafts........................................... $ 3,003 $ 4,033
Current portion of capitalized lease obligations.......... 126 134
Current portion of long-term debt......................... 551 147
Accounts payable.......................................... 4,394 6,070
Accrued expenses.......................................... 3,622 4,417
Income taxes payable...................................... 847 497
Deferred tax liabilities.................................. -- 236
---------- ----------
Total current liabilities......................... 12,543 15,534
---------- ----------
DEFERRED RENT............................................... 2,430 2,861
---------- ----------
CAPITALIZED LEASE OBLIGATIONS, net of current portion....... 415 281
---------- ----------
LONG-TERM DEBT.............................................. 15,916 19,366
---------- ----------
COMMITMENTS AND CONTINGENCIES (NOTE 13)
REDEEMABLE COMMON STOCK..................................... 628 --
---------- ----------
SHAREHOLDERS' EQUITY:
Convertible Preferred stock, liquidation value $33,977 at
January 2, 1999........................................ 11 11
Common stock--
Class A, $.01 par value, 16,250,000 shares authorized,
9,849,403 and 9,739,848 shares issued and
outstanding........................................... 98 97
Class B, $.01 par value, 1,500,000 shares authorized,
none issued or outstanding............................ -- --
Class C, $.01 par value, 3,750,000 shares authorized,
none issued or outstanding............................ -- --
Additional paid-in capital................................ 18,304 18,282
Retained earnings......................................... 3,311 9,130
---------- ----------
21,724 27,520
---------- ----------
$ 53,656 $ 65,562
========== ==========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.
F-3
<PAGE> 59

DAVID'S BRIDAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------
JANUARY 4, JANUARY 3, JANUARY 2,
1997 1998 1999
---------- ---------- ----------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
REVENUES:
Net sales................................................... $63,158 $85,785 $123,656
Other income................................................ 4,188 6,228 9,062
------- ------- --------
Total revenues.................................... 67,346 92,013 132,718
COST OF SALES, including buying, distribution and occupancy
costs..................................................... 40,889 53,070 74,613
------- ------- --------
Gross profit........................................... 26,457 38,943 58,105
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES................ 26,453 33,738 47,581
------- ------- --------
INCOME FROM OPERATIONS...................................... 4 5,205 10,524
INTEREST EXPENSE, net....................................... 586 1,248 1,087
------- ------- --------
Income (loss) before income taxes...................... (582) 3,957 9,437
INCOME TAX PROVISION (BENEFIT).............................. (167) 1,359 3,618
------- ------- --------
NET INCOME (LOSS)........................................... $ (415) $ 2,598 $ 5,819
======= ======= ========
Net income (loss) per common share:
Basic..................................................... $ (0.04) $ 0.26 $ 0.60
======= ======= ========
Diluted................................................... $ (0.04) $ 0.15 $ 0.32
======= ======= ========
Weighted average shares outstanding:
Basic..................................................... 10,207 9,849 9,751
Diluted................................................... 10,207 17,472 18,375
Pro forma basic earnings per common share (unaudited) (Note
3)........................................................ $ 0.35
========
Pro forma basic weighted average number of shares
outstanding (unaudited) (Note 3).......................... 16,654
</TABLE>

The accompanying notes are an integral part of these consolidated statements.
F-4
<PAGE> 60

DAVID'S BRIDAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF REDEEMABLE COMMON STOCK AND SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
REDEEM- --------------------------------------------------------------------------
ABLE PREFERRED STOCK COMMON STOCK ADDITIONAL
COMMON ------------------ ------------------- PAID-IN RETAINED
STOCK SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
------- --------- ------ ---------- ------ ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 30, 1995....... $7,744 400,000 $ 4 10,949,056 $109 $10,708 $1,128 $11,949
Purchase of Redeemable Common
stock........................ (4,500) -- -- (1,099,653) (11) 11 -- --
Accretion of Common stock
redemption value............. 363 -- -- -- -- (363) -- (363)
Net loss....................... -- -- -- -- -- -- (415) (415)
------ --------- --- ---------- ---- ------- ------ -------
BALANCE, JANUARY 4, 1997......... 3,607 400,000 4 9,849,403 98 10,356 713 11,171
Sale of preferred stock........ -- 686,402 7 -- -- 4,969 -- 4,976
Modification of Common stock
redemption agreement......... (3,120) -- -- -- -- 3,120 -- 3,120
Accretion of Common stock
redemption value............. 141 -- -- -- -- (141) -- (141)
Net income..................... -- -- -- -- -- -- 2,598 2,598
------ --------- --- ---------- ---- ------- ------ -------
BALANCE, JANUARY 3, 1998......... 628 1,086,402 11 9,849,403 98 18,304 3,311 21,724
Purchase of Redeemable Common
stock........................ (651) -- -- (109,555) (1) 1 -- --
Accretion of Common stock
redemption value............. 23 -- -- -- -- (23) -- (23)
Net income..................... -- -- -- -- -- -- 5,819 5,819
------ --------- --- ---------- ---- ------- ------ -------
BALANCE, JANUARY 2, 1999......... $ -- 1,086,402 $11 9,739,848 $ 97 $18,282 $9,130 $27,520
====== ========= === ========== ==== ======= ====== =======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.
F-5
<PAGE> 61

DAVID'S BRIDAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------
JANUARY 4, JANUARY 3, JANUARY 2,
1997 1998 1999
---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................ $ (415) $ 2,598 $ 5,819
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities--
Depreciation and amortization......................... 1,393 2,022 2,896
Amortization of debt issuance costs................... -- 74 43
Provision for deferred rent........................... 645 782 431
Loss on sale or disposal of property and equipment.... 70 8 144
Equity income in affiliate............................ -- -- (166)
Deferred income taxes................................. (33) (479) 82
Changes in assets and liabilities--
(Increase) decrease in--
Accounts receivable................................. (408) (318) (1,015)
Prepaid expenses and other assets................... (901) 412 (770)
Inventories......................................... 320 (12,017) (5,345)
Increase (decrease) in--
Accounts payable.................................... 1,585 816 1,676
Accrued expenses.................................... (188) 1,466 795
Income taxes payable................................ -- 847 (350)
-------- -------- --------
Net cash provided by (used in) operating
activities....................................... 2,068 (3,789) 4,240
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures..................................... (4,931) (7,470) (8,105)
(Investment in) distribution from affiliate.............. -- (460) 460
-------- -------- --------
Net cash used in investing activities............... (4,931) (7,930) (7,645)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt................. 1,086 -- 1,400
Repayments of long-term debt and capital leases.......... (40) (203) (680)
Borrowings on revolving credit agreement................. 25,804 42,356 41,500
Repayments on revolving credit agreement................. (20,256) (38,461) (39,300)
Borrowings on short-term debt............................ -- 460 --
(Decrease) increase in bank overdrafts................... (276) 2,732 1,030
Proceeds from subscription receivable.................... 1,000 -- --
Proceeds from sale of Preferred stock.................... -- 4,976 --
Repurchase of Common stock............................... (4,500) -- (651)
Payment of debt issuance costs........................... -- (185) (38)
-------- -------- --------
Net cash provided by financing activities........... 2,818 11,675 3,261
-------- -------- --------
Net decrease in cash................................ (45) (44) (144)
CASH, BEGINNING OF YEAR.................................... 553 508 464
-------- -------- --------
CASH, END OF YEAR.......................................... $ 508 $ 464 $ 320
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for--
Income taxes.......................................... $ 76 $ 330 $ 3,744
======== ======== ========
Interest, net of amounts capitalized.................. $ 555 $ 1,240 $ 1,018
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.
F-6
<PAGE> 62

DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BACKGROUND

David's Bridal, Inc. was organized on August 29, 1990 and is engaged in the
retail sale of bridal gowns and bridal related merchandise. As of January 3,
1998 and January 2, 1999, the Company operated 59 stores in 27 states and 77
stores in 29 states, respectively, throughout the United States.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of David's Bridal, Inc. and
subsidiaries (the Company) include the accounts of David's Bridal, Inc. (a
Florida corporation) and all of its wholly owned subsidiaries. Material
intercompany balances and transactions have been eliminated in consolidation.

FISCAL YEAR-END

The Company operates under a 52/53-week fiscal year ending on a Saturday
near December 31. The accompanying consolidated financial statements for the
years ended January 4, 1997 (fiscal 1996), January 3, 1998 (fiscal 1997) and
January 2, 1999 (fiscal 1998), include 53, 52 and 52 weeks of operations,
respectively.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents for the purpose of
determining cash flows. Checks issued in excess of cash balances are reflected
as bank overdrafts.

INVENTORIES

Merchandise inventories are stated at the lower of cost (first-in,
first-out) or market. Costs associated with certain buying, receiving and
distribution activities are included in inventories.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Additions or improvements are
capitalized, while repairs and maintenance are charged to expense. Gains or
losses on sale or disposal are reflected in net income. Depreciation and
amortization is computed on the straight-line method over the estimated useful
life of the asset. The estimated useful lives are as follows:

<TABLE>
<S> <C>
Land improvements............................ 20 years
Buildings and improvements................... 20 to 30 years
Equipment.................................... 3 to 10 years
Leasehold improvements....................... Lesser of useful life or lease term
Furniture and fixtures....................... 5 to 10 years
</TABLE>

Certain personnel costs and out-of-pocket costs directly associated with
the construction or remodeling of stores are capitalized and amortized over the
lease term.

The Company capitalizes interest in connection with the construction of new
stores which is amortized over the lesser of the assets' estimated useful life
or lease term. During fiscal 1997 and fiscal 1998, $70,000 and $59,000,
respectively, of interest was capitalized.

F-7
<PAGE> 63
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

ACCOUNTING FOR LONG-LIVED ASSETS

The Company follows Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of." Accordingly, in the event that facts and circumstances indicate
that property and equipment, and intangible or other assets, may be impaired, an
evaluation of recoverability would be performed. If an evaluation is required,
the estimated future undiscounted cash flows associated with the assets is
compared to the assets' carrying amount to determine if a write-down to market
value or discounted cash flow value is necessary. Management believes that there
has been no impairment of the Company's long-lived assets.

DEFERRED RENT

Rent expense on leases is recorded on a straight-line basis over the lease
period. The excess of rent expense over actual cash paid has been recorded as
deferred rent in the accompanying consolidated balance sheets.

REVENUE RECOGNITION

The Company records revenue when an item is sold and delivered to a
customer. Revenue is recognized on special orders when the customer orders the
goods, the goods are owned by the Company and the Company receives 100% payment
for the goods. The Company's policy is not to accept returns of special order
goods. Revenue is recognized on layaway sales when the Company obtains a
significant nonrefundable deposit on layaway merchandise. Alterations revenues
are deferred until the work is completed. Other income consists primarily of
alterations revenue.

STORE OPENING

Store opening costs incurred at new store locations are charged to expense
as incurred.

ADVERTISING

Advertising costs are expensed the first time the advertising takes place.
For fiscal 1996, 1997 and 1998, advertising expense, net of reimbursements, was
$4,910,000, $6,295,000 and $8,088,000, respectively.

INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes."
Under SFAS No. 109, deferred income tax assets and liabilities are determined
based on differences between the financial reporting and income tax basis of
assets and liabilities measured using enacted income tax rates and laws that are
expected to be in effect when the differences reverse.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist primarily of cash, accounts
receivable, accounts payable, accrued expenses and debt instruments. The
carrying value of these short-term assets and liabilities are considered to be
representative of their respective fair values, because of the short maturity of
those instruments. The carrying value of the debt instruments approximates fair
value at the balance sheet date.

BUSINESS AND CREDIT RISK CONCENTRATION

Financial instruments which potentially subject the Company to
concentrations of credit risk are cash and cash equivalents and accounts
receivable. The Company limits its credit risk associated with cash and

F-8
<PAGE> 64
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

cash equivalents by placing its investments in highly liquid funds. Receivables
associated with third party credit cards are processed by financial institutions
which are monitored for financial stability.

The Company utilizes international manufacturers (mainly in China) to
provide all of its bridal gowns and flower girl dresses. Should there be
significant changes in areas such as quotas, tariffs and fluctuations in
exchange rates, among others, the Company's ability to obtain merchandise at a
reasonable cost and in a timely manner could be significantly impaired.
Management monitors these risks and believes that its relationships are such
that alternative sourcing arrangements would be available.

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 amounts 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.

RECENTLY ADOPTED ACCOUNTING PRINCIPLES

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income." This statement establishes standards
for reporting and disclosure of comprehensive income. In June 1997, the FASB
issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." This statement establishes standards for reporting of information
about operating segments and requires the reporting of selected information
about operating segments in interim financial statements. These standards were
adopted by the Company on January 4, 1998 and had no impact as the Company has
no "other comprehensive income" and operated as a single segment.

2. PROPOSED INITIAL PUBLIC OFFERING:

In 1999, the Board of Directors authorized the filing of a registration
statement for the sale of common stock to the public in an initial public
offering. In connection with the offering, the Board approved a split of the
Company's Common shares on a 1.473 to 1 basis subject to shareholder approval of
the authorization of a sufficient number of shares of Common stock. If an
initial public offering is completed, this stock split and the conversion of all
outstanding shares of Preferred stock into 6,903,062 shares of Common stock will
be consummated immediately prior to the closing of the offering. On a pro forma
basis the conversion of all of the Preferred stock into common stock will result
in the elimination of the outstanding Preferred stock and an increase of Common
stock with no change in total shareholders' equity.

All references in the financial statements to the number of shares and to
per share amounts have been retroactively restated to reflect the split.

The Company expects to grant stock options to purchase 395,103 shares of
common stock to employees at an exercise price equal to the price at which
shares of common stock are sold in the offering.

Effective upon the consummation of the offering, the current Chairman of
the Board and Chief Executive Officer will become a consultant to the Company
for a three year term and be paid a consulting fee of $425,000 in each of the
first two years and $200,000 for the third year.

3. NET INCOME (LOSS) PER SHARE:

Net income (loss) per share is calculated utilizing the principles of
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share"
(EPS).

F-9
<PAGE> 65
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Basic EPS excludes dilution and is computed by dividing net income
available to common shareholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS is computed assuming the conversion or
exercise of all dilutive securities such as preferred stock, options and
warrants.

Pro forma basic earnings per share (unaudited) includes the conversion of
the Class A, B and C Preferred stock at a conversion rate of 10 to 1 and the
conversion of the Class D Preferred at a conversion rate of 1 to 1 (see Note 9
for conversion features).

Under SFAS No. 128, the Company's granting of certain stock options and
convertible preferred stock resulted in potential dilution of basic EPS. The
following table summarizes the differences between basic weighted average shares
outstanding and diluted weighted average shares outstanding used to compute
diluted EPS.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------
JANUARY 4, JANUARY 3, JANUARY 2,
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
Basic weighted average number of shares
outstanding.................................. 10,206,764 9,849,419 9,751,000
Incremental shares from assumed exercise or
conversion of:
Stock options................................ -- -- 381,605
Preferred stock.............................. -- 7,622,725 8,242,144
---------- ---------- ----------
Diluted weighted average number of shares
outstanding.................................. 10,206,764 17,472,144 18,374,749
========== ========== ==========
</TABLE>

The number of incremental shares from the assumed exercise of stock options
is calculated applying the treasury stock method. Preferred stock convertible
into 7,231,073 weighted average common shares was excluded from the fiscal 1996
calculation as it would be anti-dilutive due to the fiscal 1996 net loss. Common
stock options outstanding at January 4, 1997 and January 3, 1998 to purchase
950,085 and 1,053,195 shares of Common Stock, respectively, were not included in
the computation of diluted EPS in fiscal 1996 and 1997 because they were
antidilutive.

4. PROPERTY AND EQUIPMENT (IN THOUSANDS):

<TABLE>
<CAPTION>
JANUARY 3, JANUARY 2,
1998 1999
---------- ----------
<S> <C> <C>
Property and equipment consist of:
Land........................................................ $ 1,047 $ 1,047
Land improvements........................................... 149 149
Buildings and improvements.................................. 1,275 2,635
Equipment................................................... 3,198 5,145
Leasehold improvements...................................... 7,622 10,798
Furniture and fixtures...................................... 3,936 5,646
Construction in progress.................................... 2,462 2,062
------- -------
19,689 27,482
Less--Accumulated depreciation and amortization............. (4,108) (6,832)
------- -------
$15,581 $20,650
======= =======
</TABLE>

F-10
<PAGE> 66
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. INVESTMENTS IN AFFILIATES:

In December 1997, the Company purchased an equity interest in MDR
Associates LLC (MDR) for $460,000 which owns an interest in an aircraft. Two
shareholders of the Company also hold an indirect equity interest in MDR. The
investment was accounted for under the equity method of accounting and was
included in other assets in fiscal 1997. The equity interest was redeemed in
fiscal 1998 for $460,000.

In August 1995, the Company entered into a joint venture agreement with
Addwood Limited for a 50% ownership in a newly formed Hong Kong corporation,
Fillberg Limited (Fillberg). The Company contributed nominal capital to Fillberg
and loaned $170,000 in a noninterest-bearing loan with no stated maturity. The
loan was repaid subsequent to January 2, 1999. Addwood Limited is indirectly
owned by a shareholder of the Company based in Hong Kong.

Under a buying agency agreement, Fillberg will be the exclusive buying
agent of the Company for ready made bridal garments from certain territories, as
defined, and the Company will be the primary client of Fillberg. Under the
agreement, the Company pays Fillberg commissions of 7% for merchandise purchased
by the Company.

The investment is accounted for under the equity method of accounting with
profits eliminated from net income in the application of the equity method to
the extent that the Company has not yet sold the merchandise. As of January 2,
1999, the investment and receivable of $170,000 are included in other assets.
Equity income of $166,000 was recognized in fiscal 1998. Commissions of
$683,000, $1,157,000 and $1,294,000 were recorded for merchandise purchased
during fiscal 1996, 1997 and 1998, respectively, of which $999,000 and
$1,212,000, were included in the cost of inventories on the accompanying
consolidated balance sheets at January 3, 1998 and January 2, 1999,
respectively.

6. ACCRUED EXPENSES AND OTHER (IN THOUSANDS):

<TABLE>
<CAPTION>
JANUARY 3, JANUARY 2,
1998 1999
---------- ----------
<S> <C> <C>
Payroll and related expenses................................ $1,341 $1,328
Other....................................................... 2,281 3,089
------ ------
$3,622 $4,417
====== ======
</TABLE>

7. DEBT (IN THOUSANDS):

<TABLE>
<CAPTION>
JANUARY 3, JANUARY 2,
1998 1999
---------- ----------
<S> <C> <C>
Revolving credit agreement.................................. $14,900 $17,100
Mortgages................................................... 769 2,139
Demand note................................................. 460 --
Other....................................................... 338 274
------- -------
16,467 19,513
Less--Current portion....................................... (551) (147)
------- -------
$15,916 $19,366
======= =======
</TABLE>

In April 1994, the Company entered into a revolving credit agreement with a
bank which was amended on March 12, 1996 to provide borrowings up to $17
million. Interest was calculated at prime plus 0% to 1% or LIBOR plus 2.5% to
3.5% based on certain ratios, as defined. This agreement was terminated in
August 1997.

F-11
<PAGE> 67
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

On August 1, 1997, the Company entered into a new revolving credit
agreement with a bank which was amended on December 30, 1998 providing for
borrowings up to $30 million including a sublimit of $25 million for letters of
credit. Borrowings are limited to the sum of 80% of eligible receivables and 60%
of eligible inventory, as defined. The Company may exceed its borrowing base by
$3 million during the months of October through March for the period beginning
December 1998 and October 1999 and by $2 million for the period beginning
October 2000. At the Company's election, interest is calculated at (i) the Base
Rate (higher of U.S. Federal Funds Rate plus .5% or the bank's Prime Rate), or
(ii) the adjusted LIBOR Rate, as defined, plus an applicable margin ranging from
1.25% to 1.75% based on earnings ratios, as defined. Interest will be increased
by 2% for the duration of any events of default. Interest is payable monthly on
Base Rate borrowings and at the end of each elected interest period on each
LIBOR Rate borrowing. The weighted average interest rate on Base Rate loans was
7.75% and the weighted average interest rate on LIBOR Rate loans was 6.49% at
January 2, 1999. Principal is payable July 31, 2001. An unutilized commitment
fee of .25% per annum is due quarterly.

The revolving credit agreement requires the Company to comply with various
covenants which include, among other things, the maintenance by the Company of
certain fixed charge, leverage and debt ratios at the end of each fiscal
quarter, as defined. The revolving credit agreement is secured by all tangible
and intangible assets of the Company and restricts distributions related to
equity interests which include the payment of dividends. In the event of
termination of the commitment or an event of default, the Bank may require the
Company to deliver cash or U.S. Treasury Bills in the amount of 105% of the
outstanding undrawn letters of credit.

The highest amount outstanding under these agreements was $11,005,000,
$15,018,000, and $17,600,000 during fiscal 1996, fiscal 1997 and fiscal 1998,
respectively. The average amount outstanding under these agreements was
$6,871,000, $11,740,000 and $13,034,000 and the weighted average interest rate
was 7.81%, 7.75% and 7.21% in fiscal 1996, 1997 and 1998, respectively. The
Company was contingently liable for open letters of credit of $2,840,000 and
$4,145,000 at January 3, 1998 and January 2, 1999, respectively.

In fiscal 1996, the Company entered into a $800,000 mortgage agreement with
a bank which is payable in monthly installments with interest, as defined
through 2011. The interest rate at January 2, 1999 was 8%. The mortgage is
collateralized by the underlying property.

In fiscal 1998, the Company entered into a $1.4 million mortgage note with
a bank which is payable in monthly installments of principal and interest of
$14,000 with a final payment of $1,123,000 due on December 1, 2003. The note
bears interest at 8% and is subject to a prepayment penalty of 2%, as defined,
until December 1, 2000. The note is collateralized by the underlying property.

In December 1997, the Company issued a demand note in connection with its
borrowing of $460,000 from a shareholder. This note bears interest at 7.75% and
was repaid in January 1998.

The Company has agreements with certain landlords whereby the Company
received advances for construction of leasehold improvements which will be
repaid by the Company during the lease periods. Interest ranges from 8%-11% and
the notes are due through 2006. At January 3, 1998 and January 2, 1999, $338,000
and $274,000, respectively, were outstanding under these agreements.

F-12
<PAGE> 68
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Future long-term debt maturities as of January 2, 1999 are as follows (in
thousands).

<TABLE>
<CAPTION>
FISCAL
<S> <C>
1999............................................. $ 147
2000............................................. 132
2001............................................. 17,222
2002............................................. 131
2003............................................. 1,246
2004 and thereafter.............................. 635
-------
$19,513
=======
</TABLE>

8. INCOME TAXES:

The income tax provision (benefit) consists of the following components (in
thousands):

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------
JANUARY 4, JANUARY 3, JANUARY 2,
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
Current:
Federal........................................... $ (49) $1,601 $3,379
State............................................. 21 30 412
----- ------ ------
(28) 1,631 3,791
----- ------ ------
Deferred:
Federal........................................... (139) (272) (173)
State............................................. -- -- --
----- ------ ------
(139) (272) (173)
----- ------ ------
$(167) $1,359 $3,618
===== ====== ======
</TABLE>

The deferred tax effect of temporary differences giving rise to the
Company's deferred tax assets and liabilities consists of the following
components (in thousands):

<TABLE>
<CAPTION>
JANUARY 3, JANUARY 2,
1998 1999
---------- ----------
<S> <C> <C>
Deferred tax assets--
Deferred rent............................................... $ 826 $ 973
Uniform inventory capitalization............................ 395 148
Benefits payable............................................ 93 --
Other....................................................... 102 143
------ ------
1,416 1,264
------ ------
Deferred tax liabilities--
Depreciation................................................ (211) (83)
Unrealized profit........................................... (159) (223)
Other....................................................... (134) (128)
------ ------
(504) (434)
------ ------
Net deferred tax asset...................................... $ 912 $ 830
====== ======
</TABLE>

F-13
<PAGE> 69
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------
JANUARY 4, JANUARY 3, JANUARY 2,
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
Tax at federal statutory rate............................... (34.0)% 34.0% 34.0%
State taxes, net of federal benefit......................... 3.5 0.5 3.1
Other....................................................... 1.7 (0.2) 1.2
----- ---- ----
(28.8)% 34.3% 38.3%
===== ==== ====
</TABLE>

9. REDEEMABLE COMMON STOCK AND SHAREHOLDERS' EQUITY:

In fiscal 1995, the Company entered into redemption agreements with certain
shareholders for the purchase of 1,907,902 shares of common stock for a total of
$7.4 million plus an amount calculated based on the timing of redemption, as
defined. This obligation has been reflected as Redeemable Common stock and has
been reclassified out of equity in the accompanying consolidated financial
statements. In fiscal 1996, the Company redeemed 1,099,653 shares under the
redemption agreements at a total purchase price of $4.5 million. In fiscal 1997,
in connection with the sale of the Class D Preferred stock, the redemption
agreements with certain shareholders were modified to eliminate any continuing
obligation by the Company to repurchase 698,694 of the shares. The remaining
109,555 shares were redeemed in February 1998 for $651,000.

In fiscal 1997, the Company sold 686,402 shares of Class D Preferred stock
for $7.25 per share under a capital call agreement with existing shareholders.
On August 13, 1997, the Company entered into the Second Amended and Restated
Stockholder's Agreement whereby the Company has the option for a period of three
years to require certain investors to purchase up to $4 million of additional
shares of the Company's Class D Preferred stock.

The components of Preferred stock are as follows:

<TABLE>
<CAPTION>
JANUARY 3, JANUARY 2,
1998 1999
---------- ----------
<S> <C> <C>
Class A, $.01 par value, 175,000 shares authorized, 171,792
shares issued and outstanding, liquidation value of
$12,455,000 at January 2, 1999............................ $1,718 $1,718
Class B, $.01 par value, 125,000 shares authorized, 114,104
shares issued and outstanding, liquidation value of
$8,273,000 at January 2, 1999............................. 1,141 1,141
Class C, $.01 par value, 300,000 shares authorized, 114,104
shares issued and outstanding, liquidation value of
$8,273,000 at January 2, 1999............................. 1,141 1,141
Class D, $.01 par value, 1,250,000 shares authorized,
686,402 shares issued and outstanding, liquidation value
of $4,976,000 at January 2, 1999.......................... 6,864 6,864
</TABLE>

The Class A, B and C Preferred had an initial conversion price of $4.92 per
share. The conversion price is subject to adjustment based on the valuation of
the Company upon a special event. A special event includes liquidating events, a
public offering, a change in control, a merger or consolidation and other
events, as defined. If a special event, as defined, had occurred at January 2,
1999, the conversion price would have been $4.01, or a conversion rate of 18.08
shares of Common stock for each share of Preferred unless the Preferred holders
had achieved a specified rate of return on their equity investment. If the
specified rate of return is achieved upon a special event, the conversion price
would be $4.92 and the conversion rate would be 14.73 shares of Common stock for
each share of Preferred. The Class D Preferred is junior to the Class A, B and C
Preferred and has an initial conversion rate of $4.92. The

F-14
<PAGE> 70
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Company may require conversion of all classes of Preferred if the price per
share paid by the public in a public offering is at least equal to the
conversion price per share. The liquidation value of the Preferred is equal to
the greater of the amount that would be received if all of the Preferred were
converted into Common stock immediately prior to the liquidation or the price
originally paid.

The Class A and Class D Preferred have voting rights equal to the number of
Common shares into which they are convertible. The Class B Preferred has voting
rights equal to two votes for each share of Common into which it is convertible
and the Class C Preferred has no voting rights.

The Class A Common has voting rights equal to one vote per share. The Class
B Common has the number of votes equal to the sum of Class B and Class C Common
outstanding divided by Class B outstanding. The Class C Common has no voting
rights.

The Class A and Class D Preferred is convertible into Class A Common, the
Class B Preferred is convertible into Class B Common and the Class C Preferred
is convertible into Class C Common.

As of January 2, 1999, if converted, the Class A, B, C and D Preferred
stock would convert to 8,242,144 shares of Common stock at the conversion rates
outlined above. Assuming a specified rate of return is achieved upon a special
event, the conversion rate would be $4.92 for all shares if the Company requires
the Preferred to convert resulting in the issuance of 6,903,062 shares of Common
stock.

10. STOCK OPTIONS:

The Company's 1995 Stock Option Plan (the Plan) provides for the grant of
Common Stock and Common Stock options to key employees, members of the board of
directors and certain consultants at prices determined by the Board. The Company
has reserved 1,473,000 shares of its Common stock for awards under the Plan. The
Company accounts for the Plan under APB Opinion No. 25, under which no
compensation cost has been recognized since the options were issued at or above
fair value.

Had compensation cost for the options issued to employees or directors been
determined consistent with SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company's net income (loss), basic EPS and diluted EPS would
have been equal to the pro forma amounts indicated below (in thousands except
for per share data):

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------
JANUARY 4, JANUARY 3, JANUARY 2,
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income (loss) As reported $ (415) $2,598 $5,819
Pro forma (669) 2,296 5,423

Basic EPS As reported (0.04) 0.26 0.60
Pro forma (0.07) 0.23 0.56

Diluted EPS As reported (0.04) 0.15 0.32
Pro forma (0.07) 0.13 0.30
</TABLE>

F-15
<PAGE> 71
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The weighted average fair value of options granted during fiscal 1996, 1997
and 1998 was $0.83, $1.76 and $1.75, respectively. The fair value of each option
grant was estimated on the date of grant using the Black-Scholes option pricing
model with the following assumptions:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------
JANUARY 4, JANUARY 3, JANUARY 2,
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
Expected dividend rate.................................. -- -- --
Expected volatility..................................... 55% 55% 55%
Risk-free interest rate................................. 5.965% 6.076% 5.499%
Expected lives (years).................................. 3 3 3
</TABLE>

Because the SFAS No. 123 method of accounting is not required to be applied
to options granted prior to January 1, 1995, the resulting pro forma
compensation charge may not be representative of that to be expected in future
years.

During fiscal 1996, 1997 and through May 1998, the Company granted options
to purchase 132,570 shares of common stock, 103,110 shares of common stock and
484,604 shares of common stock, respectively, under the Plan. These options vest
over a 3-year period and were issued with exercise prices equal to or above fair
market value on the grant date. In addition, in fiscal 1996, the Company granted
to two nonemployees an option to purchase 110,475 shares and 44,190 shares of
common stock at $4.92 and $6.11, per share, respectively. These options vest
through September 1998.

Information with respect to options outstanding is as follows:

<TABLE>
<CAPTION>
WEIGHTED
OPTION PRICE AGGREGATE AVERAGE EXERCISE
SHARES PER SHARE EXERCISE PRICE PRICE
--------- ------------- -------------- ----------------
<S> <C> <C> <C> <C>
Options outstanding, December 30,
1995............................. 662,850 $ 4.92 $3,262,500 4.92
Granted.......................... 287,235 4.92 - 6.11 1,623,750 5.65
--------- ------------- ----------
Options outstanding, January 4,
1997............................. 950,085 4.92 - 6.11 4,886,250 5.14
Granted.......................... 103,110 6.11 630,000 6.11
--------- ------------- ----------
Options outstanding, January 3,
1998............................. 1,053,195 4.92 - 6.11 5,516,250 5.24
Granted.......................... 484,604 6.11 - 6.79 3,278,500 6.77
Cancelled........................ (109,000) 6.11 - 6.79 (705,000) 6.47
--------- ------------- ----------
Options outstanding January 2,
1999............................. 1,428,799 $4.92 - 6.79 $8,089,750 5.66
========= ============= ==========
</TABLE>

As of January 2, 1999, the weighted average contractual life of options
outstanding was 8.13 years, there were options to purchase 921,362 shares of
common stock vested at a weighted average exercise price of $5.00 and there were
44,201 shares reserved under the Plan which were not granted.

11. BENEFIT PLAN:

On January 1, 1995, the Company adopted a 401(k) plan for its employees
(the 401(k) Plan). The 401(k) Plan allows participants to contribute up to 15%
of their compensation and permits an employer match of up to 6% of participant
compensation, subject to certain limitations, as defined. Employer contributions
vest 20% per year. The expense was $14,000, $14,000 and $18,000 during fiscal
1996, 1997 and 1998, respectively.

12. RELATED PARTY:

The Company purchased leasehold improvements and supplies from a company
owned by a shareholder of the Company totaling $153,000, $159,000 and $297,000
in fiscal 1996, 1997 and 1998.

F-16
<PAGE> 72
DAVID'S BRIDAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

13. COMMITMENTS AND CONTINGENCIES:

The Company leases its retail stores, administrative offices and
distribution facilities under noncancellable operating leases. Most store leases
have an average initial term of ten years, with two five year renewal options,
and provide for predetermined escalations in future minimum annual rents.
Certain leases provide for additional rent contingent upon store sales levels.
The pro rata portion of scheduled rent escalations has been included in deferred
rent in the accompanying consolidated balance sheets. Rent expense under all
operating leases was $4,995,000, $7,011,000, and $9,817,000 in fiscal 1996, 1997
and 1998, respectively, excluding common area maintenance charges.

On December 27, 1996, the Company entered into a lease for software which
has been accounted for as a capital lease. The capitalized cost of $671,000 and
related accumulated amortization of $268,000 has been included in net property
and equipment at January 2, 1999. The present value of the minimum lease
payments at January 2, 1999, is as follows (in thousands):

<TABLE>
<S> <C>
Total minimum lease payments................................ $451
Less--Amount representing interest.......................... (36)
----
Present value of minimum lease payments..................... $415
====
</TABLE>

Future minimum lease payments under all of the Company's operating and
capital leases as of January 2, 1999 are as follows (in thousands):

<TABLE>
<CAPTION>
FISCAL OPERATING CAPITAL
<S> <C> <C>
1999................................................... $11,632,245 $154
2000................................................... 12,028,147 154
2001................................................... 12,003,683 143
2002................................................... 11,756,842 --
2003................................................... 11,169,314 --
2004 and thereafter.................................... 36,265,185 --
----------- ----
$94,855,416 $451
=========== ====
</TABLE>

From time to time the Company is named as a defendant in legal actions
arising from its normal business activities. Although the amount of any
liability that could arise with respect to currently pending actions of this
nature cannot be accurately predicted, in the opinion of the Company, any such
liability will not have a material adverse effect on the financial position or
results of operations of the Company.

F-17
<PAGE> 73

- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
, 1999

[DAVID'S BRIDAL, INC. LOGO]

7,812,500 SHARES OF COMMON STOCK

------------------------
PROSPECTUS
------------------------

DONALDSON, LUFKIN & JENRETTE

LEGG MASON WOOD WALKER
INCORPORATED
-----------------------------

DLJdirect INC.

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

We have not authorized any dealer, sales person or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of David's
Bridal have not changed since the date hereof.
- - --------------------------------------------------------------------------------

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

Until , 1999 (25 days after the date of this prospectus), all
dealers, whether or not participating in this offering, that effect transactions
in these shares of common stock may be required to deliver a prospectus. This is
in addition to the dealer's obligation to deliver a prospectus when acting as an
underwriter and with respect to their unsold allotments or subscriptions.

- - --------------------------------------------------------------------------------
<PAGE> 74

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated expenses, other than
underwriting discounts and commissions, in connection with the issuance and
distribution of the shares of common stock being registered, all of which are
being borne by the Company:

<TABLE>
<S> <C>
Registration fee............................................ $ 44,480
NASD filing fee............................................. 16,500
Transfer agent and registrar fees........................... 20,000
Printing and engraving...................................... 150,000
Legal fees.................................................. 425,000
Blue Sky fees and expenses.................................. 10,000
New York Stock Exchange listing fee......................... 100,000
Accounting fees............................................. 475,000
Miscellaneous............................................... 59,020
----------
Total............................................. $1,300,000
==========
</TABLE>

- - ------------------------------
* To be filed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 607.0850 of the Florida Business Corporation Act empowers a
corporation, subject to certain limitations, to indemnify any person who was or
is a party to any proceeding by reason of the fact that he or she was or is a
director, officer, employee or agent of the corporation, against liability and
expenses actually and reasonably incurred by him or her in connection with such
proceeding, including any appeal thereof, if such party acted in good faith and
in a manner reasonably believed to be in, or not opposed to, the best interests
of the corporation, and, with respect to a criminal action or proceeding, had no
reasonable cause to believe his or her conduct to have been unlawful.

Our bylaws provide a right to indemnification to the full extent permitted
by law for expenses, attorneys' fees, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by any of our directors, officers,
employees or agents, who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was our director, officer, employee or agent or that of our parent or any
of our subsidiaries, or was serving at our request, or at the request of our
parent or any of our subsidiaries as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.

Our board of directors by resolution adopted in each specific instance may
similarly indemnify any person other than one of our directors or officers for
liabilities incurred by him in connection with services rendered by him for or
at our request, or at the request of any of our subsidiaries.

These indemnification provisions shall be applicable to all actions, suits
or proceedings commenced after the adoption of our bylaws, whether such arise
out of acts or omissions which occurred prior or subsequent to such adoption and
shall continue as to a person who has ceased to be a director or officer or to
render services for or at our request and shall inure to the benefit of the
heirs, executors and administrators of such a person. The rights of
indemnification provided for in our bylaws shall not be deemed the exclusive
rights to which any of our directors, officers, employees or agents may be
entitled.

Our bylaws provide that we may pay the expenses, including attorney's fees,
incurred by any person entitled to be indemnified by us in defending a civil or
criminal action, suit or proceeding in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking, by or on behalf of

II-1
<PAGE> 75

such person, to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by us as authorized by law.

We may purchase and maintain insurance on behalf of any person who is or
was our director or officer, employee or agent, or who is or was serving at our
request as a director, officer, employee or agent of another corporation or
other organization, against any liability asserted against him and incurred by
him in any such capacity or arising out of his status as such, whether or not we
would have the power to indemnify him against such liability under law.

Pursuant to the Underwriting Agreement, the Underwriters have agreed to
indemnify the Company's directors and executive officers who signed the
Registration Statement against certain liabilities, including liabilities under
the Securities Act, under certain delineated circumstances, or to contribute to
payments that the directors and such officers may be required to make in respect
thereof.

The Registrant maintains, on behalf of its directors and officers,
insurance protection against certain liabilities arising out of the discharge of
their duties.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

During the past three years, the Company has issued and sold the following
unregistered securities:

1. On August 15, 1997, pursuant to the terms of a series of
subscription agreements, we sold an aggregate of 686,402 shares of class D
preferred stock for an aggregate purchase price of $5.0 million or $7.25
per share. These shares were sold to several of our existing shareholders,
including 448,651 shares to The Clipper Group, an aggregate of 69,842
shares that are beneficially owned by Steven J. Sidewater, 36,371 shares to
Michael C. Erlbaum, 24,317 shares that are beneficially owned by Gary E.
Erlbaum, 14,478 shares to Shelly Shapiro, 10,155 shares to Mordechai Kafry,
32,653 shares to First Union National Bank, 15,013 shares to Addwood
Limited and 34,922 shares to the Vederman Family Partnership. Each
outstanding share of class D preferred stock will be subject to mandatory
conversion upon the consummation of this offering into 1.473 shares of
common stock, or an aggregate of 1,011,070 shares of common stock.

The Company believes that the transactions described above were exempt from
registration under Section 4(2) of the Securities Act because the subject
securities were sold to a limited group of persons, each of whom was believed to
have been a sophisticated investor, was a shareholder of the Company, and had a
pre-existing business or personal relationship with the Company or its
management and was purchasing for investment without a view to further
distribution. Restrictive legends were placed on stock certificates evidencing
the shares and/or agreements relating to the right to purchase such shares
described above.

II-2
<PAGE> 76

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
<S> <C> <C>
1.1 Form of Underwriting Agreement#
3.1 Articles of Incorporation#
3.2 Bylaws#
5.1 Opinion of Morgan, Lewis & Bockius LLP regarding legality of
shares of common stock being registered#
10.1 Amended and Restated 1995 Stock Option Plan#
10.2 Joint Venture and Shareholders Agreement dated August 1995
by and among David's Bridal Corporation and Addwood Limited@
10.3 Registration Agreement dated June 9, 1995 among David's
Bridal, Inc. and certain shareholders*
10.4 Amendment No. 1 to Registration Agreement, dated as of
August 15, 1997 by and among David's Bridal, Inc. and
certain shareholders*
10.5 Amended and Restated Credit Agreement dated December 31,
1997 among David's Bridal, Inc. and First Union Corporation*
10.6 Consulting Agreement between David's Bridal, Inc. and Steven
H. Erlbaum#
10.7 Employment Agreement between David's Bridal, Inc. and Robert
D. Huth#
10.8 Employment Agreement between David's Bridal, Inc. and Philip
Youtie#
23.1 Consent of Arthur Andersen LLP@
23.2 Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5.1 hereto)
23.3 Consent of Eugene Lynch@
24.1 Power of Attorney (included on signature page to this
Registration Statement)
27.1 Financial Data Schedule*
</TABLE>

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

* previously filed

@ filed herewith

# to be filed by amendment

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

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 foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the 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.

II-3
<PAGE> 77

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and this offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 78

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Ardmore, Pennsylvania, on April 7, 1999.

DAVID'S BRIDAL, INC.

By /s/ STEVEN H. ERLBAUM
------------------------------------
Steven H. Erlbaum
Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
NAME CAPACITY DATE
<S> <C> <C>

/s/ STEVEN H. ERLBAUM Chairman of the Board (principal April 7, 1999
- - ----------------------------------- executive officer) and Director
Steven H. Erlbaum

/s/ EDWARD S. WOZNIAK Chief Financial Officer (principal April 7, 1999
- - ----------------------------------- financial and accounting officer)
Edward S. Wozniak

* Director April 7, 1999
- - -----------------------------------
Robert D. Huth

* Director April 7, 1999
- - -----------------------------------
Gary E. Erlbaum

* Director April 7, 1999
- - -----------------------------------
Michael C. Erlbaum

Director
- - -----------------------------------
Robert B. Calhoun, Jr.

* Director April 7, 1999
- - -----------------------------------
Steven J. Sidewater

Director
- - -----------------------------------
Andrew R. Taussig

*By his signature set forth below,
the undersigned, pursuant to duly
authorized powers of attorney filed
with the Securities and Exchange
Commission, has signed this
Amendment to the Registration
Statement on behalf of the persons
indicated.
By /s/ STEVEN H. ERLBAUM
--------------------------------
Steven H. Erlbaum
(attorney-in-fact)
</TABLE>

II-5
<PAGE> 79

EXHIBIT INDEX

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

* previously filed

@ filed herewith

# to be filed by amendment

<PAGE> 1
Exhibit 10.2

CONFIDENTIAL DRAFT

JOINT VENTURE AND SHAREHOLDERS AGREEMENT

JOINT VENTURE AND SHAREHOLDERS AGREEMENT, (this "Agreement") dated
August __, 1995, by and among DAVIDS BRIDAL CORPORATION, a Pennsylvania
corporation ("Bridal") with its principal place of business at 44 West Lancaster
Ave., Ardmore, Pennsylvania 19003, United States of America, ADDWOOD LIMITED, a
Hong Kong corporation ("Addwood") with its principal place of business at Room
1109, Tower A, Hunghom Commercial Centre, 37041 Ma Tau Wai Road, Hunghom,
Kowloon, Hong Kong, FILLBERG LIMITED, a Hong Kong corporation (the "Company")
with its principal place of business at Room 1109, Tower A, Hunghom Commercial
Centre, 37041 Ma Tau Wai Road, Hunghom, Kowloon, Hong Kong, and MORDECHAI (MOTY)
KAFRY (a.k.a. "Big Charles"), the 55% indirect shareholder of Addwood ("Kafry").

W I T N E S S E T H:

WHEREAS, Addwood is experienced in providing specialized support
services to importers of wearing apparel;

WHEREAS, Bridal and Addwood desire to enter into a joint venture
through the investment by Bridal and Addwood in the Company, in which Bridal and
Addwood shall be the only member shareholders;

WHEREAS, the parties hereto desire to manage the Company for the
purpose of acting as Bridal's exclusive agent for the purchase of ready-made
bridal garments, including, but not limited to, men's, women's and children's
bridal-related clothing, excluding so-called "807" products and products
purchased by Bridal in North America regardless of the product's country of
origin where the purchase is made by domestic letter of credit (the
"Merchandise"), to be imported into the United States of America from any
country outside North America (the "Agency Territory"), and for which Bridal
shall be the exclusive client in all countries located in continental North
America and South America and any country in which Bridal has or will have a
wholesale or retail location (the "Retail Territory"); and

WHEREAS, the parties hereto desire to enter into this Agreement in
order to set forth the manner in which they will cause the Company to be managed
and to define their

<PAGE> 2

respective rights and obligations concerning the conduct of this business and
their shareholdings therein.

NOW THEREFORE, in consideration of the premises and the respective
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:

ARTICLE

DEFINITIONS

SECTION 1.1 Certain Terms. The following terms when used herein shall
have the meanings set forth herein:

Term Section Defined
---- ---------------
Addwood Introduction
Addwood Directors 4.1
Addwood Group 5.3
Addwood Initial Ownership 3.1
Addwood Shares 3.1
Agency Agreement 2.2
Agency Territory Background
Agreement Introduction
Articles 2.1
Bridal Introduction
Bridal Directors 4.1
Bridal Initial Ownership 3.1
Bridal Shares 3.1
Common Stock 3.1
Company Background
Confidential Information 7.1
Damages 12.1
Default Notice 8.3
Default Party 8.3
Effective Date 8.1
Effective Time 3.1
Fillberg Limited 2.1
Merchandise Background
Non-Default Party 8.3
Permitted Sale Territory 5.3
Retail Territory Background
share 15.1

ARTICLE 2

AGREEMENTS WITH THE COMPANY

SECTION 2.1 Amendment of Articles of Association. Addwood has
previously organized the Company as a limited liability corporation under the
laws of Hong Kong. As soon as practicable after execution and delivery of this
Agreement by the parties hereto, the Company and the parties hereto shall take
all appropriate actions to adopt any amendments to the Articles of Association
that are necessary or appropriate to make them conform to the terms of this
Agreement. The Articles of Association are attached as Exhibit A hereto (the
"Articles").

<PAGE> 3

SECTION 2.2 Buying Agency Agreement. Except as expressly qualified or
limited hereby, the buying agency relationship between Bridal and the Company
shall be governed by that certain Buying Agency Agreement, dated July __, 1995,
by and between Bridal and the Company, as amended, attached as Exhibit B hereto
(the "Agency Agreement").

ARTICLE 3

CAPITALIZATION OF THE COMPANY

SECTION 3.1 Capitalization. Under the Articles, the authorized capital
of the Company is HK$10,000, represented by 10,000 shares of Company common
stock, par value HK$1.00 per share (the "Common Stock"). Under the Articles the
Company has two members, Addwood and Raymond Wu (holding for the benefit of
Bridal), each of which own one share of Common Stock. Immediately upon execution
and delivery of this Agreement, and in accordance with Hong Kong law, the share
of Common Stock held by Raymond Wu shall be transferred to Bridal, and Bridal
and Addwood shall be the only members of the Company, registered in accordance
with Hong Kong law. Bridal and Addwood have each previously contributed
US$170,000 to the Company. Of the US$170,000 previously contributed by each of
Bridal and Addwood, HK$1.00 shall represent payment of the par value of the
Bridal Share and the Addwood Share, respectively, and US$169,999.87 (or such
amount that would represent the value of US$170,000 less HK$1.00, as measured in
U.S. Dollars on the date of this Agreement) shall represent a shareholder loan
to the Company by each of Bridal and Addwood, respectively.

SECTION 3.2 Issuance of Additional Shares. The Company shall not issue
any shares other than the Bridal Shares or the Addwood Shares without the
unanimous consent of the Board of Directors of the Company.

ARTICLE 4

BOARD OF DIRECTORS AND MANAGEMENT

SECTION 4.1 Initial Directors. All powers vested by law in the Company
shall be exercised by, and the Company's affairs shall be managed under the
direction of, the Board of Directors. After the Effective Time, the Board of
Directors shall consist of four directors, two of which shall be appointed by
Bridal (the "Bridal Directors") and two of which shall be appointed by Addwood
(the "Addwood Directors"). In the event that a vacancy shall develop in the
Board of Directors by virtue of death, resignation or other removal of a
director prior to the end of his term, if such director is a Bridal Director,
Bridal shall have the right to appoint a new director and the remaining Bridal
Director shall be deemed to have the proxy of such deceased, resigned or removed
director on all matters on which the Board of Directors votes until the time of

<PAGE> 4

appointment of such new director, and if such director is an Addwood Director,
Addwood shall have the right to appoint a new director and the remaining Addwood
Director shall be deemed to have the proxy of such deceased, resigned or removed
director on all matters on which the Board of Directors votes until the time of
appointment of such new director.

SECTION 4.2 Management. The day to day operation of the business of the
Company shall be undertaken by officers designated by Addwood, acceptable to
Bridal and appointed by the Board of Directors. Such officers shall be subject
to the terms of this Agreement and such guidelines as the Board of Directors may
establish from time to time. The initial General Manager of the Company shall be
Karen Lin.

SECTION 4.3 Financial Statements. The Company shall prepare and send by
the 15th day of each month a business report in a prescribed form containing
monthly financial statements, including an income statement, balance sheet and
statement of cash flows, and by the 30th day after each quarter, a quarterly
summation of business operations and financial condition. In addition, the
Company shall prepare and send annual audited financial statements within 60
days after the end of its fiscal year. Management shall also prepare and send to
each of Bridal and Addwood within 90 days prior to the beginning of each fiscal
year, financial projections and a business plan for the subsequent year. All
financial statements relating to the Company shall be prepared in accordance
with Hong Kong generally accepted accounting principles; provided, that if
requested by Bridal, from time to time, the Company shall prepare in a timely
manner financial statements in accordance with United States generally accepted
accounting principles for Bridal's review.

SECTION 4.4 Board Meetings. Except as otherwise required by law, the
Board of Directors shall meet quarterly by conference telephone with one
in-person annual Board of Directors meeting to take place at such location,
within or outside Hong Kong, as the Board of Directors shall determine.

ARTICLE 5

BUSINESS ACTIVITIES

SECTION 5.1 Exclusive Relationship; Agency Agreement. As previously
described in the recitals hereto, the essential business purpose of the Company
will be to act as the exclusive agent of Bridal for the purchase of Merchandise
to be imported into the United States of America from the Agency Territory. In
addition, Bridal shall be the exclusive client of the Company in the Retail
Territory. The duties and responsibilities of Bridal and the Company shall be as
set forth in the Agency Agreement except as expressly modified by this
Agreement.

<PAGE> 5

In addition to the duties and obligations set forth in the Agency Agreement, the
following shall apply to the relationship between Bridal and the Company:

5.1.1 Bridal will advise the Company from time to time of
its requirements for Merchandise, including quantities, types, delivery dates,
specifications, terms of purchase and general price parameters. The Company will
negotiate the purchase of Merchandise with suppliers in the Agency Territory
only within the requirements specified by Bridal. The Company shall not place
any final order on behalf of Bridal, it being understood that all actual
purchase orders for Merchandise will be entered into in writing directly by
Bridal and the manufacturer or supplier.

5.1.2 The Company shall inspect the Merchandise prior to
shipment in accordance with a mutually agreed A.Q.L. system conforming to
general industry practice. The amount of Merchandise to be inspected shall be
such amount as may be specified from time to time by Bridal with respect to any
particular manufacturer or supplier. The Company shall complete in all material
respects an inspection report in respect of each shipment of Merchandise. If the
inspection of the Company discloses errors in excess of Bridal's standards, the
Company shall not issue any Certificate of Inspection nor otherwise authorize
release of the shipment. The Company shall promptly advise Bridal of such event
and will assist Bridal, at Bridal's direction, in the handling of such defective
Merchandise claims with the manufacturer or supplier.

5.1.3 With respect to any shipment of Merchandise
determined by the Company to meet the quality and error standards established by
Bridal and which otherwise conform to the terms and specifications of Bridal's
purchase order, the Company shall issue a Certificate of Inspection to the
manufacturer or supplier, on behalf of Bridal, and shall promptly transmit a
copy thereof to Bridal upon Bridal's request. It is understood and agreed that,
in respect of defective Merchandise delivered to Bridal in violation of the
terms of Section 5.1.2 hereof, Bridal shall have the right to set-off against
commissions otherwise due to the Company under the Agency Agreement any damages
suffered by Bridal for which it remains uncompensated by the manufacturer or
supplier. It is further understood that any letter of credit opened by Bridal in
favor of a manufacturer or supplier shall require the supplier to submit the
Certificate of Inspection of Agent for any drawdown of funds under such letter
of credit.

5.1.4 The Company shall track all purchase orders, make
sure that deliveries meet the quality and delivery time standards set forth on
the purchase orders and coordinate the logistics relating to delivery of
Merchandise to Bridal in accordance with Bridal's directives.

SECTION 5.2 Commissions. The remuneration of the Company shall be as
set forth in the Agency Agreement except as follows:

<PAGE> 6

5.2.1 Commissions payable to the Company shall be adjusted
for any returns, refunds, adjustments or credits which Bridal arranges with the
manufacturer or supplier; provided, that Bridal receives prior approval for such
arrangements from the Company. If such adjustments occur after the payment of
the related commission to the Company, adjustments shall be made to the
commission next due to the Company, or if no further commissions will be due to
the Company, the differential shall be paid by the Company to Bridal within 15
days after notice by Bridal of such adjustment.

5.2.2 All commissions payable to the Company shall be paid
in U.S. Dollars.

SECTION 5.3 Retail Sales; Competition with Bridal. The Company shall
not, nor shall Addwood, any of its members, shareholders, partners,
subsidiaries, parents, affiliates, directors, officers or employees
(collectively, the "Addwood Group"), directly or indirectly, engage in the
retail sale of Merchandise without the express written consent of Bridal. The
foregoing notwithstanding, Bridal hereby consents to the retail or wholesale
sale or rental of Merchandise by the Company, Addwood or an affiliate of either
in Asia, Africa or the Middle East (the "Permitted Sale Territory"); provided,
that (i) Bridal is provided with a business plan prior to commencing operations,
(ii) Bridal is given the opportunity to invest pari passu with Addwood and
members of the Addwood Group, (iii) the Company is the exclusive buying agent
for such venture and (iv) the Company maintains quality and operating standards
no less than those used by Bridal. In the event the Company is currently
selling, wholesale or retail, Merchandise in any territory other than in the
Permitted Sale Territory and Bridal opens a retail location in such territory,
the Company shall promptly wind up its business operations (which shall in no
event take more than 90 days) in such territory and, at Bridal's option,
exclusively supply Bridal in such territory.

SECTION 5.4 Financial Restrictions. The Company shall not (i) engage in
any risky financial investments, (ii) use hedging, derivative or other risky
financial techniques or (iii) borrow money for operations or capital
requirements, unless unanimously approved by the Board of Directors.

ARTICLE 6

RECORDS AND ACCOUNTING

SECTION 6.1 True and Accurate Records. The Company shall maintain true
and accurate business and accounting records of all of its operations in
accordance with Hong Kong generally accepted accounting principles and
practices. Bridal and Addwood, or their respective representatives, shall have
the right, at any time, to inspect, copy or audit all the business records and
accounts of the Company, and Bridal shall have the right to request financial
statements

<PAGE> 7

prepared in accordance with United States generally accepted accounting
principles as set forth in Section 4.3 hereof.

SECTION 6.2 Fiscal Year. The fiscal year of the Company shall be the
calendar year. The Company shall timely perform an annual audit to be certified
by Arthur Andersen & Co. or other accounting firm selected by David's Bridal.
The audit, including an audited annual balance sheet, income statement and
statement of cash flows along with the notes thereto shall be furnished to each
of its shareholders within 60 days of the close of each fiscal year or sooner if
required by applicable law. Expense for such annual audit shall be borne by the
Company.

ARTICLE 7

CONFIDENTIALITY

SECTION 7.1 Confidential Information. The parties hereto shall keep
confidential (i) the terms and existence of this Agreement and the Agency
Agreement, (ii) the transactions contemplated by and Merchandise covered in this
Agreement and the Agency Agreement and (iii) any confidential and proprietary
information related to each others businesses and affairs (the "Confidential
Information"), so long as such Confidential Information is not otherwise
publicly known; provided that nothing contained herein shall prevent the
disclosure by any party hereto of information which is known to the recipient at
the time of disclosure and which was lawfully obtained by the recipient from a
third-party without breach of any obligation of non-disclosure or for which
disclosure by such party is required or appropriate under applicable securities
or other laws. Each of the parties hereto shall obtain, and shall cause the
Company to obtain, from its respective directors, officers, employees and
agents, such non-disclosure agreements as are necessary and proper to implement
the provisions of this Section 7.1.

SECTION 7.2 Styles and Models. Without limiting the generality of the
foregoing, the parties hereto acknowledge that all styles and models originally
designed by Bridal are confidential and proprietary to Bridal, and, without
Bridal's prior consent, they may not be displayed, offered or copied for any
clients whatsoever of the Company or Addwood or the Addwood Group who sell or
distribute into, either directly or indirectly, or who have any interest in any
entity who sells or distributes into, either directly or indirectly, any
territory in which Bridal is then selling or has operations.

SECTION 7.3 Survival. The provisions of Section 7.1 shall survive the
termination of this Agreement.

<PAGE> 8

ARTICLE 8

TERM AND TERMINATION

SECTION 8.1 Effective Date. This Agreement shall come into force on the
date first written above (the "Effective Date") and shall continue in effect
until terminated in accordance with the provisions hereof. Notwithstanding the
foregoing, this Agreement shall automatically terminate on the date when there
is only one party continuing to hold shares in the Company.

SECTION 8.2 Bankruptcy. This Agreement shall automatically terminate
upon the voluntary or involuntary bankruptcy, reorganization, debt arrangement
or other collective proceeding for the protection of creditors under any
bankruptcy or insolvency law, or the commencement of any dissolution or
liquidation proceeding of Bridal or Addwood.

SECTION 8.3 Termination Due to Change of Law. Upon any material change
in the applicable laws of Hong Kong, Bridal and Addwood shall negotiate in good
faith to find a new domicile for the Company.

SECTION 8.4 Termination by Bridal. Bridal shall have the right to
terminate this Agreement as follows:

8.4.1 Upon a default by any of Addwood, Restal or Kafry
(collectively, the "Addwood Default Group") in the performance of any material
obligation to be performed by such party under this Agreement or the Agency
Agreement (an "Addwood Default"), Bridal shall give written notice to the
Addwood Default Group specifying the thing or matter in default. The Addwood
Default Group shall have 30 days in which to either cure such Addwood Default or
dispute the existence of such default. Failure to cure or respond in such 30 day
period shall constitute admission of an Addwood Default. If the Addwood Default
Group disputes the existence of an Addwood Default in accordance with this
Section 8.4, such dispute shall be resolved in accordance with Section 13.1
hereof.

8.4.2 Bridal may at any time give six months written notice
to Addwood of its desire to terminate this Agreement; provided that,
notwithstanding anything contained herein to the contrary, during such six month
period Bridal and Addwood shall be permitted to enter into nonbinding
negotiations with third-parties for the supply and/or distribution of
Merchandise without such actions constituting a default under this Agreement or
the Agency Agreement.

<PAGE> 9

SECTION 8.5 Termination by Addwood. Addwood shall have the right to
terminate this Agreement upon default by Bridal in the performance of any
material obligation to be performed by Bridal under this Agreement or the Agency
Agreement (a "Bridal Default"), by giving written notice to Bridal specifying
the thing or matter in default. Bridal shall have 30 days in which to either
cure such Bridal Default or dispute the existence of such default. Failure to
cure or respond in such 30 day period shall constitute admission of a Bridal
Default. If Bridal disputes the existence of a Bridal Default in accordance with
this Section 8.5, such dispute shall be resolved in accordance with Section 13.1
hereof. Addwood may not voluntarily withdraw from the Company or terminate this
Agreement or the Agency Agreement.

SECTION 8.6 Termination by Fillberg. This Agreement may be terminated
at any time by the unanimous consent of the Board of Directors.

SECTION 8.7 Request for Information. At any time during the term of
this Agreement or upon termination hereof, the Company shall furnish Bridal with
all books and records relating to the business between the Company and Bridal as
well as all information reasonably requested by Bridal that relates to
manufacturers and suppliers of Merchandise currently or previously engaged by
the Company under the terms of this Agreement.

SECTION 8.8 Effect of Termination. A termination of this Agreement
pursuant to this Article 8 (a "Termination") shall, unless otherwise agreed by
Bridal and Addwood, cause a termination of the Agency Agreement and upon such
Termination, the parties hereto shall use their best efforts to dissolve or
terminate the existence of the Company in accordance with applicable law and the
procedures therefor established by the Board of Directors in a prompt and timely
manner.

ARTICLE 9

LOYALTY TO COMPANY AND NONCOMPETE

SECTION 9.1 Duty of Loyalty. The parties hereto agree that the Company
shall at all times be conducted as an independent enterprise for the profit of
all shareholders. Each Principal Shareholder represents and warrants to Bridal
that he has no relationship with any manufacturer or distributor of Merchandise.
Neither Addwood nor any person in the Addwood Group shall invest in any activity
related in any way to the activities of the Company as described herein without
first offering such investment opportunity to the Company or offering Bridal a
fifty percent participation in such investment opportunity. Bridal shall not
invest in any activity in the Permitted Sale Territory related in any way to the
activities of the Company as described herein without first offering such
investment opportunity to the Company or offering Addwood a fifty percent
participation in such investment opportunity.

<PAGE> 10

SECTION 9.2 Non-Competition.

9.2.1 Bridal hereby covenants that during the term of this
Agreement and for a three-year period thereafter (unless this Agreement is
terminated pursuant to Section 8.2 because of the bankruptcy of Addwood,
pursuant to Section 8.4, or because of the withdrawal of Addwood in violation of
Section 8.5), that it will not, directly or indirectly, own, manage, operate,
join, control, finance or participate in the ownership, management, operation,
control or financing of, or be connected as a partner, principal, agent,
representative, consultant or otherwise with or use or permit its name to be
used in connection with, any business or enterprise engaged, directly or
indirectly, within any part of the world in any business or enterprise,
wholesale or retail, competitive with the Company, except as permitted by this
Agreement.

9.2.2 Addwood hereby covenants that during the term of this
Agreement and for a three-year period thereafter (unless this Agreement is
terminated pursuant to Section 8.2 because of the bankruptcy of Bridal, pursuant
to Section 8.5 if such termination is not caused by the withdrawal of Addwood,
or because of a termination by Bridal pursuant to Section 8.4.2), that it will
not, directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as a partner, principal, agent, representative, consultant or
otherwise with or use or permit its name to be used in connection with, any
business or enterprise, wholesale or retail, competitive with the Company.

9.2.3 Each of Restal and Kafry individually covenants that
for so long as such party is a shareholder, directly or indirectly, in Addwood
and Addwood is a party to this Agreement, and for a three-year period after
either of the foregoing ceases to be true (unless this Agreement is terminated
pursuant to Section 8.2 because of the bankruptcy of Bridal, pursuant to Section
8.5, or because of a termination by Bridal pursuant to Section 8.4.2), it will
not, directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as an officer, director, employee, partner, principal, agent,
representative, or consultant with, any business or enterprise, wholesale or
retail, competitive with the Company, other than its interests in Addwood.

9.2.4 Each party hereto further covenants that during the
term of this Agreement and for a one-year period thereafter, such party shall
not, either directly or indirectly, solicit the employment of any person who is
employed by the Company on a full or part-time basis.

9.2.5 It is recognized by the parties that the business is
expected to be conducted throughout the world and that more narrow geographical
limitations of any nature

<PAGE> 11

on the non-competition covenant set forth in this Section 9.2 are therefore not
appropriate. Each party hereto acknowledges that the restrictions contained in
this Section 9.2 are reasonable and necessary to protect the legitimate
interests of the Company and its shareholders, and that any violation of any
provision of those sections will result in irreparable injury to the Company
and/or one or more of its shareholders. In the event that any of the provisions
of this Section 9.2 should ever be adjudicated to exceed the time, geographic,
product or service, or other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in such jurisdiction
to the maximum time, geographic, product or service, or other limitations
permitted by applicable law.

ARTICLE 10

REPRESENTATION AND WARRANTIES

SECTION 10.1 Representations and Warranties of the Company, Addwood,
Restal and Kafry. The Company, Addwood, Restal and Kafry hereby, jointly and
severally, represent and warrant to the Company as follows:

10.1.1 The Company, Addwood and Restal are duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions, each has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby, and all necessary action, corporate or otherwise, required to have been
taken by or on behalf of them by applicable law, their respective charters (the
"Charters") or otherwise to authorize (i) the approval, execution and delivery
of this Agreement and (ii) the performance of their respective obligations under
this Agreement and the consummation of the transactions contemplated hereby has
been taken. This Agreement constitutes the valid and binding agreement of the
Company, Addwood, Restal and Kafry, enforceable against them in accordance with
its terms.

10.1.2 The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby will not, (i)
violate or conflict with the Charters (ii) constitute a breach or default (or an
event that with notice or lapse of time or both would become a breach or
default) or give rise to any lien, third party right of termination,
cancellation, material modification or acceleration under any material
agreement, understanding or undertaking to which the Company, Addwood, Restal or
Kafry is a party or by which it or he is bound, except where such breach,
default, lien, third party right, cancellation, modification or acceleration
would not have a material adverse effect on him or it and its subsidiaries
ability to perform under this Agreement, or (iii) constitute a violation of any
law, rule or regulation to which the Company, Addwood, Restal or Kafry is
subject.

<PAGE> 12

10.1.3 Kafry has the sole economic and voting interest in
Restal Corporation, and Restal Corporation has a 55% economic and voting
interest in Addwood.

SECTION 10.2 Representation and Warranties of Bridal. Bridal hereby
represents and warrants to the Company as follows:

10.2.1 It is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania. It has
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. All necessary
action, corporate or otherwise, required to have been taken by or on behalf of
it by applicable law, its Articles of Incorporation, Bylaws or otherwise to
authorize (i) the approval, execution and delivery on its behalf of this
Agreement and (ii) its performance of its obligations under this Agreement and
the consummation of the transactions contemplated hereby has been taken. This
Agreement constitutes its valid and binding agreement, enforceable against it in
accordance with its terms.

10.2.2 The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby will not, (i)
violate or conflict with its Articles of Incorporation or Bylaws (ii) constitute
a breach or default (or an event that with notice or lapse of time or both would
become a breach or default) or give rise to any lien, third party right of
termination, cancellation, material modification or acceleration under any
material agreement, understanding or undertaking to which it is a party or by
which it is bound, except where such breach, default, lien, third party right,
cancellation, modification or acceleration would not have a material adverse
effect on it and its subsidiaries ability to perform under this Agreement, or
(iii) constitute a violation of any law, rule or regulation to which it is
subject.

ARTICLE 11

TRANSFER OF SHARES

SECTION 11.1 No Transfer Except as Provided. No shareholder of the
Company shall sell, transfer, assign, pledge or otherwise, in any other manner,
dispose of or encumber its shares in the Company, except as specifically
provided in this Article 11; and any transfer, sale, assignment, pledge or other
disposition or encumbrance of shares by a party hereto not made pursuant to this
Article 11 shall be null and void and of no effect whatsoever, and shall not be
recorded upon the books of the Company, except as may be required by Hong Kong
law.

SECTION 11.2 Transfer Upon Consent. A shareholder of the Company may
sell or otherwise transfer its shares in the Company with the unanimous consent
of the Board of Directors.

<PAGE> 13

SECTION 11.3 Restrictions on Issuance of Addwood Shares.
Addwood agrees not to issue any additional shares of its capital stock without
the consent of Bridal.

SECTION 11.4 Ownership of Addwood. Kafry shall at all times
directly or indirectly hold at least a 55% equity and voting interest in
Addwood. Kafry shall promptly upon written request of any party hereto, provide
evidence, reasonably satisfactory to the requesting party, of the continued
verity of this Section 11.4.

ARTICLE 12

INDEMNITY

SECTION 12.1 Indemnity. Each party agrees to indemnify and
hold harmless the others from, against and in respect of all damages, losses or
expenses suffered or paid, directly or indirectly, as a result of any and all
claims, demands, suits, causes of action, proceedings, judgments and
liabilities, including reasonable counsel fees and expenses incurred in
litigation or otherwise, assessed, incurred or sustained by or against the other
("Damages") with respect to or arising out of the failure of any representation
or warranty made by the indemnifying party in this Agreement to be true and
correct in all material respects as of the Effective Date of this Agreement.

ARTICLE 13

DISPUTE RESOLUTION

SECTION 13.1 Arbitration. In the case of any difficulties
or differences or disputes between the parties concerning the interpretation or
performance of this Agreement or of any related agreement (including those to
which the Company is a party) or otherwise arising in connection therewith, the
parties shall meet and shall seek to resolve any such difficulties, differences
or disputes in a mutually acceptable and equitable manner, taking into account
the objectives of this venture. Any dispute arising out of or in connection with
this Agreement which is not resolved through good faith discussions between the
parties shall be resolved by arbitration. Any arbitration hereunder shall take
place in Philadelphia, Pennsylvania, United States of America in accordance with
the commercial rules of the American Arbitration Association. The award in any
such arbitration shall be final and binding upon the parties to the exclusion of
other legal remedies and may be enforced by judgment of any court having
jurisdiction over the party against whom the award is rendered. Each party shall
pay the fees of its own attorneys and the expenses of its witnesses. All other
costs and expenses of the arbitration, including the costs of recording the
transcripts thereof, if any, administration fees,

<PAGE> 14

and all other fees and costs, shall be paid by the party against whom the
arbitrators have awarded same. If the arbitrator shall have made no assessment
of other fees, costs and expenses, then, in that event, such other fees, costs
and expenses shall be borne equally by the parties.

SECTION 13.2 Exceptions to Arbitration. Nothing provided herein shall
prevent any party from instituting any action before any competent court for the
purpose of seeking to prevent the disclosure or improper use of any Confidential
Information as defined in Article 7 hereof or violation of the restrictive
covenants set forth in Section 9 pending a determination of the rights and
obligations of the parties in accordance with the provisions of this Article 13.

ARTICLE 14

NOTICES

SECTION 14.1 Manner of Giving Notice. Each notice required or permitted
to be given or sent under this Agreement shall be given by telecopy transmission
or by registered air mail or recorded delivery courier to Bridal or Bridal
Default Company at:

44 West Lancaster Ave.
Ardmore, Pennsylvania 19003
USA
Attention: Gary Erlbaum

Facsimile No.: 610-896-5814

and to Addwood or to Addwood Default Group at:

Room 1109, Tower A
Hunghom Commercial Centre
37-41 Ma Tau Wai Road
Hunghom, Kowloon, Hong Kong
Attention: Moty Kafry

Facsimile No.: 011-852-2363-7557

Any party hereto may change its address or its telecopy number for
purposes of this Agreement by giving the other parties written notice of its new
address or telecopy number. Any such notice, if given or made by registered or
recorded delivery airmail letter, shall be deemed to have been received on the
earlier of the date actually received and the date two (2) days after the same
was posted, and if given or made by telecopy transmission shall be deemed to

<PAGE> 15

have been received at the time of dispatch. Each party irrevocably and
unconditionally consents to the service of any process, pleadings, notices or
other papers in a manner permitted by the notice provisions of this Section
14.1.

ARTICLE 15

SHARES AND LEGEND

SECTION 15.1 Definitions. The term "share" as used herein shall be
deemed to refer to all the shares of the Company initially owned by the parties
hereto, any shares hereafter issued in exchange therefor by way of
reclassification of shares, merger, consolidation, reorganization,
recapitalization, or otherwise, and any additional shares issued to said parties
by reason of dividends paid by shares distributions or increase in the
outstanding shares or otherwise.

SECTION 15.2 Legend. The parties agree that the certificates for their
shares shall have the following legend imprinted or typed thereon:

"This certificate and the share or shares it represents is
held subject to the provisions of a Joint Venture and
Shareholders Agreement dated the ___ day of August, 1995, a
copy of which Agreement is on file and may be examined at the
office of the Company."

ARTICLE 16

RATIFICATION

SECTION 16.1 Ratification of Agreement. At the first meeting of the
Board of Directors, to be held upon the incorporation of the Company, this
Agreement shall be submitted to the meeting and a resolution shall be adopted
whereby the Company shall accept, ratify, and confirm this Agreement and agree
to be bound thereby. To the extent deemed appropriate by the parties, the
Articles of Association of the Company shall conform to the provisions of this
Agreement and shall not be in conflict therewith; if any conflict exists or
arises hereunder, the provisions of this Agreement shall control to the extent
permissible under Hong Kong law; it being understood, however, that the parties
shall act in accordance with the terms hereof vis-a-vis their relations with
each other as same applies to the Company.

SECTION 16.2 Filing of Agreement. A copy of this Agreement, as amended
from time to time, shall be filed with the Secretary of the Company for
inspection by a prospective

<PAGE> 16

purchaser of shares of the Company or other interested and proper party as may
be approved by the Board of Directors in accordance with the provisions of this
Agreement.

ARTICLE 17

MISCELLANEOUS PROVISIONS

SECTION 17.1 Binding Effect; Assignment. This Agreement and each
provision hereof shall be binding upon and shall benefit the parties hereto and
their respective successors, but neither this Agreement nor any rights hereunder
shall be assignable directly or indirectly by any party without prior written
consent of the other parties hereto, which consent shall not unreasonably be
refused.

SECTION 17.2 Authority of Parties. No party hereto nor any of its
employees, customers or agents shall be deemed to be the representative, agent
or employee of any other party for any purpose whatsoever, nor shall any of them
have any right or authority to assume or create an obligation of any kind or
nature, express or implied, on behalf of any other party, nor to accept service
of any legal process addressed to or intended for any other party. The rights of
Bridal under this Agreement shall inure to the benefit of any entity
controlling, controlled by or under common control with the Company.

SECTION 17.3 Severability. Any provision hereof prohibited by or deemed
unlawful or unenforceable under any applicable law of any jurisdiction shall, as
to such jurisdiction, be ineffective without affecting any other provision of
this Agreement. To the full extent, however, that the provisions of such
applicable law may be waived, they are hereby waived to the end that this
Agreement be deemed to be a valid and binding agreement enforceable in
accordance with its terms. In the event that any term or provision of this
Agreement shall be held invalid by a competent court or government agency, the
remainder of this shall continue to be bound by the remaining terms hereof. In
such event, the relevant term or provision (or should such term(s) or
provision(s) be such a crucial element of this Agreement, then the entire
Agreement) shall be renegotiated by the parties in a good faith effort to
achieve mutual agreement consistent with such holding and shall continue to
perform under this Agreement in a manner consistent with its intent and
objective.

SECTION 17.4 Delivery of Documents. At any time or from time to time,
during the existence of this Agreement, each of the parties shall, at the
reasonable request of any or all of the other parties, (i) deliver such
documents consistent with the provisions of this Agreement, (ii) execute and
deliver, or cause to be executed and delivered, all such assignments, consents,
documents or further instruments of transfer, and (iii) take or cause to be
taken all such other

<PAGE> 17

actions as are reasonable and appropriate in order for the parties to obtain the
full benefits of this Agreement and the transactions contemplated hereby.

SECTION 17.5 Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

SECTION 17.6 Headings. Article and other headings are intended for ease
of reference only and in no way define, limit or describe the scope or intent of
these terms and conditions.

SECTION 17.7 Entire Agreement. This Agreement and the agreements
referred to herein constitute the entire agreement between the parties relating
to the subject matter hereof. There are no terms, obligations, covenants,
representations, statements or conditions other than those contained herein or
therein. No variations or modifications of this Agreement, nor waiver of any of
the terms or provisions hereof, shall be deemed valid unless in writing and
signed by the party against whom the same is sought to be enforced.

SECTION 17.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Hong Kong.

<PAGE> 18

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first written above.

DAVIDS BRIDAL CORPORATION

By: /s/ Steven Erlbaum
_____________________________
Name: Steven Erlbaum
Title: Chairman

ADDWOOD LIMITED

By: /s/ Mordechai Kafry
_____________________________
Name: Mordechai Kafry
Title:

FILLBERG LIMITED

By: Illegible
_____________________________
Name:
Title:

RESTAL CORPORATION

By: /s/ Mordechai Kafry
_____________________________
Mordechai Kafry

MORDECHAI KAFRY

/s/ Mordechai Kafry
_____________________________

<PAGE> 1
Exhibit 23.1

As independent public accountants, we hereby consent to the use in this
registration statement no. 333-72693 of our report included herein and
to all references to our Firm included in this registration statement.

/s/ Arthur Andersen LLP

Philadelphia, Pa
April 7, 1999

<PAGE> 1
EXHIBIT 23.3

CONSENT OF EUGENE LYNCH

I hereby consent to your reference to me in the registration statement as a
person about to become a director of David's Bridal, Inc.

/s/ Eugene Lynch
-----------------
Eugene Lynch