<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the fiscal year ended December 31,
1998,
OR
|_| TRANSITIONAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period from
______ to _____.
Commission file number 0-02788
THE ELDER-BEERMAN STORES CORP. RETIREMENT SAVINGS PLAN
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(Full title of the Plan)
THE ELDER-BEERMAN STORES CORP. 3155 El-Bee Road, Dayton, Ohio 45439
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(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
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THE ELDER-BEERMAN STORES
CORP. RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits as of December 31, 1998 and
1997 and Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 1998 and Supplemental Information as of and for the
Year Ended December 31, 1998 and Independent Auditors' Report
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THE ELDER-BEERMAN STORES CORP.
RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997 AND FOR THE YEAR ENDED
DECEMBER 31, 1998:
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 8
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1998:
Line 27(a) - Schedule of Assets Held for Investment Purposes 9
Line 27(d) - Schedule of Reportable Transactions 10
</TABLE>
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INDEPENDENT AUDITORS' REPORT
To The Elder-Beerman Stores Corp. Retirement Savings
Plan Committee:
We have audited the accompanying statements of net assets available for benefits
of The Elder-Beerman Stores Corp. Retirement Savings Plan (the "Plan")
(formerly, The Elder-Beerman Stores Corp. Profit Sharing and Stock Ownership
Plan) as of December 31, 1998 and 1997, and the related statement of changes in
net assets available for benefits for the year ended December 31, 1998. These
financial statements are the responsibility of the Plan'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 net assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the year ended December 31, 1998 in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, listed in the
table of contents, are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
DELOITTE & TOUCHE LLP
May 27, 1999
Dayton, Ohio
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THE ELDER-BEERMAN STORES CORP.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
<TABLE>
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<CAPTION>
1998 1997
<S> <C> <C>
INVESTMENTS, at fair value (Note C):
Participant directed:
Elder-Beerman Stores Corp. Common Stock (Note E) $ 5,048,331
Mutual Funds:
American Century Income and Growth Fund 10,882,337 $ 8,458,286
American Century Strategic Asset Allocation Fund: Aggressive 1,789,314 1,670,277
American Century Strategic Asset Allocation Fund: Conservative 4,709,892 1,334,814
American Century Strategic Asset Allocation Fund: Moderate 12,239,786 14,318,035
American Century Value Fund 2,606,011 3,153,004
Benham Stable Asset Fund 1,014,766 482,012
T. Rowe Price Stable Asset Fund 3,169,986 2,469,694
Twentieth Century International Growth Fund 2,615,345 2,195,048
Twentieth Century Ultra Fund 10,110,706 6,883,045
Participant notes receivable 2,487,619 2,635,326
Nonparticipant directed:
ESOP Fund:
Elder-Beerman Stores Corp. Series B Convertible
Preferred Stock (Note E) 13,547,593
Fifth Third Banksafe Trust Money Market Fund 27,596
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Total investments 56,674,093 57,174,730
Employer contribution 1,077,991
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Total assets 57,752,084 57,174,730
LIABILITIES - Accrued expenses (7,832)
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NET ASSETS AVAILABLE FOR BENEFITS $ 57,752,084 $ 57,166,898
============ ============
</TABLE>
See notes to financial statements.
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<PAGE> 6
THE ELDER-BEERMAN STORES CORP.
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1998
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<TABLE>
<S> <C>
ADDITIONS (Note D):
Investment income:
Dividends and interest $ 3,711,656
Net appreciation in fair value of investments 1,995,547
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Total investment income 5,707,203
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Contributions:
Employer 1,077,991
Participant 3,483,429
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Total contributions 4,561,420
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Total additions 10,268,623
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DEDUCTIONS (Note D):
Benefits paid to participants 9,434,814
Investment and administrative expenses 248,623
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Total deductions 9,683,437
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NET INCREASE 585,186
NET ASSETS AVAILABLE FOR BENEFITS - Beginning of year 57,166,898
-----------
NET ASSETS AVAILABLE FOR BENEFITS - End of year $57,752,084
===========
</TABLE>
See notes to financial statements.
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THE ELDER-BEERMAN STORES CORP.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
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A. DESCRIPTION OF PLAN
The following brief description of The Elder-Beerman Stores Corp.
Retirement Savings Plan (the "Plan") (formerly, The Elder-Beerman Stores
Corp. Profit Sharing and Stock Ownership Plan) is provided for general
information only. Participants should refer to the Summary Plan Description
for more information.
GENERAL - The Plan is a defined-contribution plan covering all employees
of the Elder-Beerman Stores Corp. (the "Company") and its wholly-owned
subsidiaries (The El-Bee Chargit Corp. and The Bee-Gee Shoe Corp.) who
have completed at least one year of continuous service, have been credited
with 1,000 or more hours of service during that year and are age 18 or
older. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
CONTRIBUTIONS - Each year participants are permitted to defer a portion of
their compensation, not less than 1% or more than 15% (in 1% increments),
subject to other limitations imposed by law. The Company makes matching
contributions by determining its level of profitability and comparing it
to a pre-determined contribution table. All active employees on the last
day of the Plan year are eligible to receive a matching contribution. For
each plan year, the Company may make a retirement security contribution
not to exceed 3-1/4% of the employee's compensation while they were a
participant for the plan year. A participant is eligible to receive a
retirement security contribution for the Plan year if they were an active
employee on the last day of the Plan year for which the retirement
security contribution is made and they completed at least 1,000 hours of
service during the Plan year.
PARTICIPANTS' ACCOUNTS - Each participant's account is credited with the
participant's contribution and his/her proportionate share of the
Company's contribution. Allocations are based on each participant's
compensation, as provided in the Plan agreement. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING - Participants are immediately vested in their contributions, plus
actual earnings thereon. Vesting in the Company's matching and
discretionary retirement security contribution portion of their account
plus actual earnings thereon is based on years of service. A participant
is non-vested until reaching five years of service, thereafter, they are
fully vested.
INVESTMENT OPTIONS - Upon enrollment in the Plan, a participant may direct
investment of their 401(k) account balance in the following investment
options:
American Century Income and Growth Fund - The prospectus for this
fund indicates that it invests in common stocks.
American Century Strategic Asset Allocation: Aggressive - The
prospectus for this fund indicates that it invests in a portfolio of
stocks, bonds and money market securities.
American Century Strategic Asset Allocation: Conservative - The
prospectus for this fund indicates that it invests in a portfolio of
stocks, bonds and money market securities.
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American Century Strategic Asset Allocation: Moderate - The
prospectus for this fund indicates that it invests in a portfolio of
stocks, bonds and money market securities.
American Century Value Fund - The prospectus for this fund indicates
that it invests in common stocks.
Benham Stable Asset Fund - The prospectus for this fund indicates
that it invests in fixed income securities.
Elder-Beerman Stores Corp. - This fund invests exclusively in the
common stock shares, no par value, of the Elder-Beerman Stores.
Corp.
T. Rowe Price Stable Asset Fund - The prospectus for this fund
indicates that it invests in fixed income securities.
Twentieth Century International Growth Fund - The prospectus for
this fund indicates that it invests in equity securities of foreign
markets.
Twentieth Century Ultra Fund - The prospectus for this fund
indicates that it invests in common stocks.
Participants may change their investment options at any time during the
plan year.
PAYMENT OF BENEFITS - On termination of service due to any reason, a
participant may elect to receive either a lump-sum payment directly or a
rollover distribution payment into an eligible retirement account.
PARTICIPANT LOANS - The Plan allows participants to apply for and
obtain loans in an amount defined in the Plan (not less than $500 and
limited to 50% of the participant's account balance provided such
loans do not exceed $50,000) from the balance of the participant's
account. All loans must be repaid within five years. The loans are
secured by the balance in the participant's account and bear interest
at a rate determined by the Company from time to time. Payments of
principal and interest are credited to the participant's account.
B. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are
prepared under the accrual method of accounting.
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.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value. Shares of registered investment companies are valued
at quoted market prices, which represent the net asset value of shares
held by the Plan at year end. The Company stock is valued at its quoted
market price. Participant notes receivable are valued at cost, which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
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ADMINISTRATIVE EXPENSES - Certain administrative functions are performed
by officers or employees of the Company. No such officer or employee
receives compensation from the Plan. A significant amount of the Plan's
legal expenses are paid and/or reimbursed by the Plan Sponsor.
Administrative expenses for the trustees and other fees are paid directly
by the Plan.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
C. INVESTMENTS
Below is a listing of investments representing 5% or more of net assets
available for benefits as of December 31, 1998 and 1997, respectively.
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Elder-Beerman Stores Corp. Common Stock $ 5,048,331 $
American Century Income and Growth Fund 10,882,337 8,458,286
American Century Strategic Allocation Fund: Conservative 4,709,892
American Century Strategic Allocation Fund: Moderate 12,239,786 14,318,035
American Century Value Fund 3,153,004
T. Rowe Price Stable Asset Fund 3,169,986
Twentieth Century Ultra Fund 10,110,706 6,883,045
Elder-Beerman Stores Corp. Series B Convertible
Preferred Stock 13,547,593
Other (less than 5%) 10,513,055 10,814,767
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$56,674,093 $57,174,730
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</TABLE>
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D. SUPPLEMENTAL FUND INFORMATION
<TABLE>
<CAPTION>
NET
APPRECIATION INVESTMENT
DIVIDENDS (DEPRECIATION) BENEFITS AND
AND IN FAIR VALUE PAID TO ADMINISTRATIVE NET
INTEREST OF INVESTMENTS CONTRIBUTIONS PARTICIPANTS EXPENSES TRANSFERS
<S> <C> <C> <C> <C> <C> <C>
American Century Income and Growth Fund $ 648,951 $ 1,781,010 $ 785,886 $ 1,117,438 $ 35,074 $ 360,716
American Century Strategic Asset Allocation
Fund: Aggressive 79,382 151,573 194,006 288,744 7,125 (10,055)
American Century Strategic Asset Allocation
Fund: Conservative 284,772 (31,290) 325,241 344,412 13,103 3,153,870
American Century Strategic Asset Allocation
Fund: Moderate 752,956 904,276 729,150 2,399,981 61,685 (2,002,965)
American Century Value Fund 463,942 (289,913) 264,829 415,194 10,175 (560,482)
Benham Stable Asset Fund 65,673 181,559 3,190 642,010
Elder-Beerman Stores Corp. Stock 38,692 (2,421,658) 10,162 2,700,866 67,289 (3,378,067)
Participant directed 1,077,991
Participant notes receivable 209,202 259,206 (97,703)
T. Rowe Price Stable Asset Fund 190,509 213,394 543,720 10,689 860,618
Twentieth Century International Growth Fund 59,301 357,874 232,832 279,140 9,336 58,766
Twentieth Century Ultra Fund 918,276 1,543,675 727,929 904,554 30,957 973,292
---------- ---------- ---------- ---------- -------- ---------
Total $3,711,656 $1,995,547 $4,561,420 $9,434,814 $248,623 $ -
========== ========== ========== ========== ======== ==========
</TABLE>
E. VALUATION OF THE ELDER-BEERMAN STORES CORP. SERIES B CONVERTIBLE PREFERRED
STOCK
The Plan's sponsor (The Elder-Beerman Stores Corp.) filed a petition for
relief under Chapter 11 of the United States Bankruptcy Code with the
United States Bankruptcy Court (the "Bankruptcy Court") for the Southern
District of Ohio on October 17, 1995. As a result, The Elder-Beerman
Stores Corp. Series B Convertible Preferred Stock ("Preferred Stock") held
by the Plan had not been valued since the bankruptcy filing. On December
30, 1997, the Plan's sponsor and issuer of The Elder-Beerman Stores Corp.
Series B Convertible Preferred Stock emerged from protection under Chapter
11. The Preferred Stock was then valued at $13,547,593, in accordance with
generally accepted accounting principles, as of December 31, 1997.
Under an agreement reached with the Bankruptcy Court the entire 662,474
shares of Preferred Stock held by the Plan at December 31, 1997 was
exchanged for 644,680 shares of new common stock of the Plan's Sponsor,
valued at $9,360,757, and $4,186,836 in cash during February 1998.
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F. PLAN RESTATEMENT ADOPTED DURING 1998
The Plan was restated effective July 1, 1998. This restatement included
changing the Plan name, replacing the ESOP fund with the Elder-Beerman
common stock fund and certain policy changes relating to service
crediting, distributions and withdrawals.
G. INCOME TAX STATUS
Prior to restatement, the Internal Revenue Service ("IRS") issued a
favorable determination letter dated November 4, 1996, stating that the
Plan, as then amended, was in compliance with the applicable requirements
of the Internal Revenue Code. The Plan sponsor intends to file a request
with the IRS for a determination letter on the restated Plan adopted July
1, 1998. Plan management believes that the restated Plan is currently
designed and being operated in compliance with the applicable requirements
of the Internal Revenue Code and, therefore, the Plan is qualified and
tax-exempt as of the financial statement date.
H. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, all vested benefits will be distributed to participants
and beneficiaries.
I. SUBSEQUENT EVENT
Effective January 1, 1999, the plan was amended. This amendment changed
the plan name to the Elder-Beerman Stores Corp. Financial Partnership
Plan, revised the method of calculating the matching contribution,
eliminated the Retirement Security Contribution and implemented an Annual
Company contribution.
* * * * * *
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THE ELDER-BEERMAN STORES CORP.
RETIREMENT SAVINGS PLAN
LINE 27(a) - SCHEDULE OF INVESTMENTS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
<TABLE>
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<CAPTION>
(b) IDENTITY OF ISSUE, (c) DESCRIPTION OF INVESTMENT, INCLUDING MATURITY
BORROWER, LESSOR OR DATE, RATE OF INTEREST, COLLATERAL PAR OR (e)
(a) SIMILAR PARTY MATURITY DATE (d) COST FAIR VALUE
<S> <C> <C> <C> <C>
MUTUAL FUNDS:
* American Century Income and Growth Fund, 372,046 shares $ 9,782,579 $10,882,337
* American Century Strategic Asset Allocation Fund: Aggressive, 270,698 shares 1,743,005 1,789,314
* American Century Strategic Asset Allocation Fund: Conservative, 856,344 shares 4,788,200 4,709,892
* American Century Strategic Asset Allocation Fund: Moderate, 1,970,980 shares 12,013,137 12,239,786
* American Century Value Fund, 430,746 shares 3,273,161 2,606,011
Benham Stable Asset Fund, 1,014,766 shares 1,014,766 1,014,766
T. Rowe Price Stable Asset Fund, 3,169,986 shares 3,169,986 3,169,986
Twentieth Century International Growth Fund, 273,001 shares 2,632,407 2,615,345
Twentieth Century Ultra Fund, 302,625 shares 10,028,722 10,110,706
PARTICIPANT NOTES
RECEIVABLE Collateralized by participant's account 2,487,619 2,487,619
* Elder-Beerman Stores Corp. Common Stock, 436,540 shares 6,338,568 5,048,331
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TOTAL INVESTMENTS $57,272,150 $56,674,093
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</TABLE>
* Represents a party-in-interest.
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THE ELDER-BEERMAN STORES CORP.
RETIREMENT SAVINGS PLAN
LINE 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
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<CAPTION>
(b) DESCRIPTION (c) PURCHASE (d) SELLING (g) COST
(a) IDENTIFY OF PARTY INVOLVED OF ASSET PRICE PRICE OF ASSET
<S> <C> <C> <C> <C>
TYPE (i) - SINGLE TRANSACTIONS IN
EXCESS OF FIVE PERCENT OF ASSETS
*American Century Strategic Asset Allocation Fund: Conservative $ 3,043,400 $ $
Benham Stable Asset Fund 3,074,840
Benham Stable Asset Fund 3,087,837
TYPE (iii) - SERIES TRANSACTIONS IN
EXCESS OF FIVE PERCENT OF ASSETS
*American Century Income and Growth Fund 3,164,232 2,521,192 2,464,470
*American Century Strategic Asset Allocation Fund: Conservative 7,358,007 3,951,637 3,972,006
*American Century Strategic Asset Allocation Fund: Moderate 2,185,279 5,167,804 5,155,498
*Elder-Beerman Stores Corp. Common Stock 10,162 3,036,713 3,029,115
Benham Stable Asset Fund 6,298,788 5,065,730 5,065,730
Twentieth Century Ultra Fund 3,659,614 1,975,626 2,158,921
</TABLE>
<TABLE>
<CAPTION>
(h) CURRENT
VALUE OF
ASSET ON (i) NET
(b) DESCRIPTION TRANSACTION GAIN
(a) IDENTIFY OF PARTY INVOLVED OF ASSET DATE (LOSS)
<S> <C> <C> <C>
TYPE (i) - SINGLE TRANSACTIONS IN
EXCESS OF FIVE PERCENT OF ASSETS
*American Century Strategic Asset Allocation Fund: Conservative $ 3,043,400 $
Benham Stable Asset Fund 3,078,840
Benham Stable Asset Fund 3,087,837
TYPE (iii) - SERIES TRANSACTIONS IN
EXCESS OF FIVE PERCENT OF ASSETS
*American Century Income and Growth Fund 5,685,424 56,722
*American Century Strategic Asset Allocation Fund: Conservative 11,309,644 (20,369)
*American Century Strategic Asset Allocation Fund: Moderate 7,353,083 12,306
*Elder-Beerman Stores Corp. Common Stock 3,046,875 (7,598)
Benham Stable Asset Fund 11,364,518
Twentieth Century Ultra Fund 5,635,240 (183,296)
</TABLE>
* Represents a party-in-interest.
There were no type (ii) or (iv) reportable transactions during the year ended
December 31, 1998.
Columns (e) and (f) have been omitted because they are not applicable.
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other person who administer the employee
benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
THE ELDER-BEERMAN STORES CORP.
RETIREMENT SAVINGS PLAN
Date: June 30, 1999 By: /s/ Scott J. Davido
------------------------------ -------------------------------------
Scott J. Davido
Executive Vice President,
Chief Financial Officer and Treasurer
The Elder-Beerman Stores Corp.
<PAGE> 15
FORM 11-K
INDEX TO EXHIBITS
EXHIBIT NO. PAGE NO.
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23 Consent of Independent Auditors
<PAGE> 1
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-58259 of The Elder-Beerman Stores Corp. on Form S-8 of our report dated May
27, 1999, appearing in this report on Form 11-K of The Elder-Beerman Stores
Corp. Retirement Saving Plan for the year ended December 31, 1998.
DELOITTE & TOUCHE LLP
Dayton, Ohio
June 28, 1999
