<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1997
REGISTRATION NO. 333-25377
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE DRESS BARN, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C>
CONNECTICUT 06-0812960
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
30 DUNNIGAN DRIVE
SUFFERN, NEW YORK 10901
(914) 369-4500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ELLIOT S. JAFFE
CHAIRMAN
30 DUNNIGAN DRIVE
SUFFERN, NEW YORK 10901
(914) 369-4500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
RICHARD H. ROWE, ESQ. IAN B. BLUMENSTEIN, ESQ.
PROSKAUER ROSE GOETZ & MENDELSOHN LLP LATHAM & WATKINS
1233 20 Street, N.W., Suite 800 885 Third Avenue, Suite 1000
Washington, D.C. 20036-2396 New York, New York 10022
(202) 416-6820 (212) 906-1200
</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) of the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
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 THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 14, 1997
PROSPECTUS
2,000,000 SHARES
[DRESS BARN LOGO]
COMMON STOCK
All of the shares (the "Shares") of common stock, par value $.05 per share
(the "Common Stock"), of The Dress Barn, Inc. ("Dress Barn" or the "Company")
offered hereby (the "Offering") are being sold by The Jaffe Family Foundation
and the Jaffe Family, L.P. (the "Selling Shareholders"). The Company will not
receive any of the proceeds from the sale of the Shares. The Common Stock is
listed on the Nasdaq National Market under the symbol "DBRN." On May 14, 1997,
the closing sale price of the Common Stock on the Nasdaq National Market was
$ per share.
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON
STOCK OFFERED HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
====================================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) SHAREHOLDERS(2)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................... $ $ $
- ----------------------------------------------------------------------------------------------------
Total (3)................... $ $ $
====================================================================================================
</TABLE>
(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses of the Offering estimated at $ , of which
approximately $ will be payable by the Selling Shareholders and
approximately $ will be payable by the Company.
(3) The Jaffe Family Foundation has granted the Underwriters an option,
exercisable within 30 days after the date hereof, to purchase up to an
aggregate of 300,000 additional shares of Common Stock to cover over-
allotments, if any. If such option is exercised in full, total Price to
Public, Underwriting Discounts and Commissions and Proceeds to Selling
Shareholders will be $ , $ and $ , respectively.
See "Underwriting."
------------------------
The Common Stock offered hereby is offered by the several Underwriters,
subject to prior sale, when as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made at the offices of Bear,
Stearns & Co. Inc., 245 Park Avenue, New York, New York on or about ,
1997.
------------------------
BEAR, STEARNS & CO. INC. ROBERTSON, STEPHENS & COMPANY
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected at the
Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the Commission's regional offices at 7
World Trade Center, 13th Floor, New York, New York 10048; and Northwest Atrium
Center, 500 West Madison Street, Room 1400, Chicago, Illinois 60661-2511. Copies
of such materials can also be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, the Commission maintains a World Wide Web site on the
Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The Common Stock is traded on the Nasdaq National Market,
and copies of such materials can also be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus: (1) the Annual Report of the
Company on Form 10-K for the fiscal year ended July 27, 1996; (2) the Quarterly
Report of the Company on Form 10-Q for the quarter ended October 26, 1996; (3)
the Quarterly Report of the Company on Form 10-Q for the quarter ended January
25, 1997; and (4) the description of Common Stock contained in the Company's
Registration Statement on Form S-1 declared effective May 4, 1983.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the Offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement contained in any document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference herein (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into any such document). Requests for such documents
should be submitted in writing to the Secretary of the Company at the Company's
principal executive offices at 30 Dunnigan Drive, Suffern, New York 10901,
telephone number: (914) 369-4500.
------------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS AND THE
IMPOSITION OF PENALTY BIDS. SEE "UNDERWRITING."
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ALSO ENGAGE IN PASSIVE
MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET.
SEE "UNDERWRITING."
------------------------
The Company was incorporated in Connecticut in 1962. The Company's
principal executive offices are located at 30 Dunnigan Drive, Suffern, New York
10901, telephone number: (914) 369-4500.
3
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information (including the financial statements and the notes thereto) included
elsewhere or incorporated by reference in this Prospectus. Each prospective
investor is urged to read this Prospectus in its entirety. Unless otherwise
indicated, all references herein to "Dress Barn" or the "Company" include The
Dress Barn, Inc. and its subsidiaries, and references to a "Fiscal" year specify
the calendar year in which the fiscal year ended; for example Fiscal 1996 refers
to the fiscal year ended July 27, 1996. In addition, unless otherwise indicated,
information contained herein assumes that the Underwriters' over-allotment
option is not exercised.
------------------------
THE COMPANY
Dress Barn operates a national chain of value-priced specialty stores
offering career apparel and accessories to the fashion-conscious working woman.
In addition, the Company's stores carry a broad assortment of casual wear to
suit its customers' total lifestyle needs. Over the past several years, the
Company has evolved from an off-price chain to a value-priced specialty
retailer. The Company distinguishes itself from (i) off-price retailers by its
carefully edited selection of in-season, first-quality merchandise,
service-oriented salespeople and its comfortable shopping environment, (ii)
department stores by its value pricing and convenient locations and (iii) other
specialty apparel retailers by its continuous focus on Dress Barn's target
customer for more than 35 years. As part of this focus, the Company has
successfully developed its own line of private brands, which constituted
approximately 50% of net sales for the six months ended January 25, 1997.
The Company's stores operate primarily under the names Dress Barn and Dress
Barn Woman, the latter featuring larger sizes of styles similar to those found
in the Dress Barn stores. The Company also operates combination Dress Barn/Dress
Barn Woman stores ("Combo Stores"), which carry both Dress Barn and Dress Barn
Woman merchandise. As of April 26, 1997, Dress Barn operated 702 stores in 43
states and the District of Columbia, consisting of 425 Dress Barn stores, 86
Dress Barn Woman stores and 191 Combo Stores. The Dress Barn and Dress Barn
Woman stores average approximately 4,500 and approximately 3,900 square feet,
respectively, and the Combo Stores average approximately 8,400 square feet.
Based on the success of its Combo Stores, the Company is focusing its expansion
strategy on opening new Combo Stores and converting existing Dress Barn and
Dress Barn Woman stores to the combination format. The Company plans to open
approximately 60 additional Combo Stores by the end of Fiscal 1998.
INDUSTRY BACKGROUND
The retail apparel industry has undergone significant contraction in recent
years, with the closing of over 30 major retail chains and considerable
consolidation. According to Dun and Bradstreet, over 9,500 retail apparel and
accessory stores closed or failed in the United States between 1991 and 1995. As
a result of this consolidation, the Company believes it is the second largest
national specialty retail chain of value-priced women's clothing. This period
was characterized by strong competition and price deflation, which resulted in
operating margin pressure for the retail apparel industry. The Company believes
that these trends have begun to reverse in the past six months.
Another significant trend in retailing has been the steady reduction in
regional shopping mall traffic. Studies show that busy consumers have less time
to contend with suburban congestion and are, instead, shopping closer to home.
According to a 1995 Stillerman Jones & Co. study, the nationwide average of mall
visits by consumers and the average time spent shopping in malls fell to 3.3
visits per month and 66 minutes spent in 1995, from 3.5 visits per month and 71
minutes spent in 1991. With the majority of its stores located in strip centers,
the Company believes it is well positioned to benefit from these trends.
4
<PAGE> 5
COMPANY STRENGTHS
Dress Barn is a leading specialty store offering women's career fashions at
value prices. Dress Barn attributes its success to its: (i) strong name
recognition and loyal customer base; (ii) long-standing relationships with
vendors of quality merchandise; (iii) experienced management team; (iv)
commitment to technology; (v) strong, consistent customer focus; (vi) low cost
operating structure; and (vii) strong balance sheet.
Strong Name Recognition. Since the Company's formation in 1962, Dress Barn
has established and reinforced its image as a source of fashion and value for
the working woman. The Company's 702 store locations in 43 states and the
District of Columbia provide it with a nationally recognized name. In addition,
the Company believes it has developed high awareness among its target customers
through on-going advertising and local marketing activities.
Strong Vendor Relationships. The Company has developed and maintains
strong and lasting relationships with its domestic and offshore vendors. Dress
Barn has worked with many of its vendors for more than 15 years, and often is
one of the vendors' largest accounts. These relationships, along with the
Company's buying power and strong credit profile, enable the Company to receive
favorable purchase terms, exclusive merchandise and expedited delivery times.
Experienced Management Team. The three senior members of the Company's
merchandising team have worked together at Dress Barn for over 15 years, with
each having substantial previous fashion retailing experience. This team
engineered the Company's evolution from an off-price retailer to a value-priced
specialty store. The Company's executive officers have an average tenure at
Dress Barn of 14 years. The stability of its management has enabled the Company
to develop a shared culture and vision and to maintain its focus on growing and
refining its business.
Commitment to Technology. Dress Barn has used technology to improve
merchandising and customer service, reduce costs and enhance productivity. The
Company's management information systems, which include a new IBM AS/400
integrated financial system and IBM 4694 point-of-sale system, allow it to
provide better service to customers by reducing paperwork and decreasing the
average transaction processing time. This enables sales associates to spend more
time assisting customers. The Company has also developed a laptop system that
delivers up-to-date store related information to its regional sales managers.
The Company's distribution center systems, installed in 1994, have reduced
per-unit distribution costs by over 50%, representing approximately $1.0 million
in annual savings.
Strong, Consistent Customer Focus. All aspects of Dress Barn's business
are designed to be responsive to the Dress Barn customer. Since 1962, the
Company has been consistent in targeting price-conscious and fashion-minded
working women. The convenient locations of the Company's stores primarily in
strip and outlet centers, carefully edited merchandise arranged for ease of
shopping, comfortable store environment and friendly customer service embody
Dress Barn's strong focus on its customers. Dress Barn's comprehensive training
program encourages its sales associates to assist customers in a low-key and
friendly manner. The Company believes it enhances its customers' shopping
experience by avoiding aggressive sales tactics that would result from a
commission-based compensation structure.
Low Cost Operator. The Company continually seeks to reduce costs in all
aspects of its operations and to create cost-consciousness at all levels. During
Fiscal 1995 the Company established a cost control procedure which analyzes each
department's budget twice annually to identify savings opportunities. For
example, this focus on cost-cutting has contributed to a $900,000 reduction in
selling, general and administrative expenses for the six months ended January
25, 1997, compared to the six months ended January 27, 1996, despite the
Company's increased sales in the 1997 period.
Strong Balance Sheet. The Company believes that its highly liquid balance
sheet and internally generated funds provide a competitive advantage that
enables the Company to pursue its long-term strategies regarding new stores,
capital expenditures and acquisitions.
5
<PAGE> 6
OPERATING STRATEGIES
The Company's objective is to become the leading national chain of
value-priced specialty apparel stores offering career fashions to the moderate
income working woman. The Company has developed the following strategies to
achieve this goal: (i) further development of Dress Barn's private brands; (ii)
maintenance of Dress Barn's merchandise focus; (iii) continuation of the Combo
Store roll-out; (iv) further development of customer targeted marketing; and (v)
further improvement of customer service.
Private Brand Strategy. The Company has gradually increased the percentage
of sales from goods manufactured under Dress Barn's private brands, as well as
goods produced by national brand manufacturers exclusively for Dress Barn, to
approximately 50% and 15%, respectively, of the Company's net sales for the six
months ended January 25, 1997. While the Company intends to continue to offer a
balanced mix of both national brand name and private brand merchandise, it plans
to continue to increase the percentage of private brand merchandise sold by its
stores, including its successful Westport(R), Princeton Club(R) and Atrium(R)
brands. Dress Barn's private brands typically create more value for its
customers and promote Dress Barn's "fashion at a fraction" image.
Merchandise Strategy. The Company's stores carry a broad assortment of
career wear, including dresses, suits, separates, blouses, sweaters and other
knitwear, as well as casual wear items, that are carefully edited to suit the
lifestyle needs of its target customer. Dress Barn does not seek to dictate
fashion trends; rather it offers current styles but avoids fashion-forward
merchandise that is subject to rapidly changing trends. While career fashions
remain the Company's primary focus, it continues to adapt to the evolving
definition of "career," such as casual Fridays. In addition, the Company seeks
to broaden its appeal by expanding its merchandise mix. The Company has recently
introduced shoes and petites in select locations. Based on the success of these
initial tests, the Company is gradually increasing the number of stores offering
shoes and petites.
Combo Store Roll-Out. Based on the success of the Combo Stores, the
Company expects most future store openings to be Combo Stores. Because of their
larger size, the Combo Stores provide the Company with greater presence in
shopping centers, give the Company more leverage in negotiating lease terms,
enable the Company to achieve lower operating cost ratios and offer increased
flexibility in merchandise presentation. Of the approximately 60 additional
Combo Stores which the Company plans to open by the end of Fiscal 1998, 25 are
expected to be new stores and 35 are expected to be conversions from existing
Dress Barn or Dress Barn Woman stores.
In conjunction with its strategy of adding Combo Stores, the Company is
aggressively closing underperforming locations and expects to close
approximately 60 such locations during Fiscal 1997, of which 50 have been closed
as of April 26, 1997. The Company has the option under a substantial number of
its store leases to terminate the lease at little or no cost if specified sales
volumes are not achieved, affording the Company greater flexibility to close
certain underperforming stores. The Company's roll-out of Combo Stores, net of
store closings, is expected to result in a small increase to the Company's
aggregate store square footage in Fiscal 1997 and an increase, during that year,
in the proportion of square footage attributable to Combo Stores from 33% to
40%.
Targeted Marketing. The Company uses several marketing tools, such as
transactional analyses through point-of-sale systems and customer surveys, in
order to determine the preferences of its target customers, working women ages
25-55. In addition, the Company distributed six mailings during the 12 months
ended January 25, 1997, each to approximately one million households including
its credit card holders. The Company is also collecting data from its credit
card program for use in other future marketing initiatives. Management believes
that these tools will further improve the Company's ability to align its
operations with the demands of its target customers on a consistent basis.
Customer Service. Dress Barn continually seeks to improve the customer's
shopping experience. For example, the Company's new management information
systems enable store managers and sales associates to spend more time serving
customers. The Company has also developed an ongoing video training program to
continue to improve customer service and sales associates' product knowledge and
selling skills.
6
<PAGE> 7
ACQUISITION OPPORTUNITIES
In order to supplement the Company's growth and enhance shareholder value,
the Company considers three types of acquisition opportunities: (i) real estate
oriented acquisitions to gain access to attractive sites and favorable lease
terms; (ii) other retail operations that could benefit from Dress Barn's
management and expertise, such as chains offering a complementary product line;
and (iii) alternate channels of distribution, such as mail order catalogs. The
Company seeks to assure that the earnings-per-share impact of a potential
acquisition for the first full fiscal year will be approximately neutral to
positive. The Company believes that its highly liquid balance sheet, with cash,
cash equivalents and marketable securities of $119 million as of January 25,
1997, will enable it to take advantage of such acquisition opportunities should
they arise. The Company believes that its Suffern, New York facility and its
corporate, merchandising and distribution infrastructure is more than adequate
to meet current needs and any foreseeable increase in the Company's store base
due to expansion or acquisition.
The Company is currently negotiating a letter of intent for a proposed
acquisition of a private company in a new, but related, line of business that
would meet Dress Barn's acquisition criteria. The specific terms of the
acquisition are still subject to negotiation, and closing is subject to several
conditions, including conducting a due diligence investigation to the Company's
satisfaction and eventually negotiating and preparing a definitive purchase
agreement. See "Risk Factors -- Risks Attendant to Acquisition Strategy" and
"Business -- Acquisition Opportunities."
RECENT DEVELOPMENTS
During the third quarter ended April 26, 1997, net sales totaled $134.1
million compared to $125.2 million during the quarter ended April 27, 1996, an
increase of 7%. Comparable store sales for the third quarter of Fiscal 1997
increased 6% over the third quarter of Fiscal 1996. Net sales for the nine-month
period ended April 26, 1997 were $408.3 million compared to $381.7 million for
the nine-month period ended April 27, 1996, an increase of 7%. Comparable store
sales for the nine-months ended April 26, 1997 increased 5% over the nine-months
ended April 27, 1996. The increase in net sales for the third quarter ended
April 26, 1997 was positively affected by the reaction to the Company's
merchandise and an absence of the adverse weather conditions that prevailed in
the winter of 1996.
Preliminary information indicates that net earnings for the third quarter
ended April 26, 1997 increased 43% to $7.4 million, or $.32 per share, compared
to $5.1 million, or $.23 per share, for the third quarter ended April 27, 1996.
Preliminary information, subject to final review, also indicates that net income
for the nine-month period ended April 26, 1997 increased 60% to $20.6 million,
or $.90 per share, compared to $12.9 million, or $.58 per share, for the
nine-months ended April 27, 1996. As of April 26, 1997, the Company operated 702
stores (including 191 Combo Stores) as compared to 749 stores (including 136
Combo Stores) in operation as of April 27, 1996.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered............................ 2,000,000 shares
Common Stock outstanding (1).................... 22,854,727 shares
Nasdaq National Market symbol................... DBRN
Use of proceeds................................. The Company will not receive any proceeds from
the sale of the Shares.
</TABLE>
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(1) Excludes (a) 1,778,486 shares of Common Stock subject to outstanding options
granted under the Company's stock option plans and (b) shares of Common
Stock that may be issued in connection with a proposed acquisition. See
"Business -- Acquisition Opportunities."
7
<PAGE> 8
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
<TABLE>
<CAPTION>
TWENTY-SIX
FISCAL YEAR ENDED WEEKS ENDED
------------------------------------------------------------------- -------------------------
JULY 25, JULY 31, JULY 30, JULY 29, JULY 27, JANUARY 27, JANUARY 25,
1992 1993(1) 1994 1995 1996(2) 1996 1997
----------- ----------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net sales.................... $ 363,090 $ 419,586 $ 457,325 $ 500,836 $ 515,522 $ 256,477 $ 274,212
Gross profit................. 125,029 145,152 156,171 173,670 177,524 87,136 93,907
Writedown of underperforming
and closed store assets.... -- -- -- -- 2,848(3) -- --
Operating income............. 21,989 27,410 23,913 26,354 26,672 10,656 18,659
Interest income-net.......... 3,003 2,338 1,727 2,670 3,343 1,655 2,115
Net earnings................. 16,194 19,039 16,153 18,285 18,909 7,756 13,192
Earnings per share........... 0.74 0.86 0.73 0.82 0.84 0.35 0.58
Weighted average shares
outstanding (in
thousands)................. 21,805 22,020 22,177 22,266 22,413 22,331 22,646
SELECTED OPERATING DATA:
Number of stores open at the
end of period:
Dress Barn................. 482 513 544 578 492 546 451
Dress Barn Woman........... 52 92 98 106 97 106 91
Combo Stores............... 30 36 46 82 137 107 165
------- ------- ------- ------- ------- ------- -------
Total number of stores....... 564 641 688 766 726 759 707
Total number of units(4)..... 594 677 734 848 863 866 872
Total number of units opened
during the period(5)....... 101 117 95 146 107 57 45
Total number of units closed
during the period.......... 39 34 38 32 92 39 36
Total store square footage
(in thousands)............. 2,513 2,940 3,236 3,750 3,724 3,781 3,820
Average store size (sq.
ft.)....................... 4,448 4,579 4,703 4,896 5,130 4,981 5,404
Comparable store sales
increase (decrease)(6)..... (0.9%) 1.6% (1.1%) (1.4%) (3.5%) (4.6%) 5.1%
</TABLE>
<TABLE>
<CAPTION>
JANUARY 25,
1997
-----------
(IN
THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital....................................................... $ 140,895
Total assets.......................................................... 275,479
Long-term debt........................................................ 3,500
Shareholders' equity.................................................. 215,036
</TABLE>
- ---------------
(1) Consists of 53 weeks. All other years presented consist of 52 weeks.
(2) Certain reclassifications have been made to prior years' data to conform
with 1996 presentation.
(3) Reflects a charge relating to the Company's implementation of the provisions
of Financial Accounting Standards No. 121. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
(4) One Combo Store equals two units; one Dress Barn or Dress Barn Woman store
equals one unit.
(5) Includes stores opened and single-format Dress Barn or Dress Barn Woman
stores converted into Combo Stores.
(6) The calculation of comparable store sales is based on the number of units
rather than the number of stores open, with each Combo Store representing
two units. New units are included in the comparable store base when they
have been open for the entire prior fiscal year. In the case of conversions
from single store formats to Combo Stores in the same center, the
pre-existing portion of the store (unit) remains in the comparable store
base.
8
<PAGE> 9
RISK FACTORS
Prospective investors, prior to making an investment decision, should
carefully consider the following, together with the other matters included and
incorporated by reference herein. In addition, this Prospectus contains
forward-looking statements that involve risks and uncertainties. Discussions
containing such forward-looking statements may be found in the material set
forth under "Prospectus Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business," as
well as in this Prospectus generally. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth herein and elsewhere in
this Prospectus.
COMPETITION
The women's retail apparel industry is highly competitive. The Company
competes primarily with department stores, off-price retailers, specialty
stores, discount stores and mass merchandisers, many of which have substantially
greater financial, marketing and other resources than the Company. Many
department stores offer a broader selection of merchandise than the Company. In
addition, many department stores have in the past been more promotional than
they are now and have reduced their selling prices, and certain of the Company's
competitors and vendors have opened outlet stores which offer off-price
merchandise. The Company's sales and results of operations may also be affected
by close-outs and going-out-of-business sales by other women's apparel
retailers. Partially as a result of such competition, apparel retailers have
experienced price deflation during the last several years. The Company may face
periods of strong competition in the future which could have an adverse effect
on its financial results. See "Business -- Competition."
RISKS OF GROWTH STRATEGY
The growth of the Company is dependent, in large part, upon the Company's
ability to successfully execute its strategy of adding new Combo Stores and
aggressively closing underperforming locations. Through the end of Fiscal 1998,
the Company expects to open approximately 60 additional Combo Stores, of which
25 are expected to be new stores and 35 are expected to be conversions from
existing Dress Barn or Dress Barn Woman stores. The success of the Company's
growth strategy will depend upon a number of factors, including the
identification of suitable markets and sites for new Combo Stores, negotiation
of leases on acceptable terms, construction or renovation of sites in a timely
manner at acceptable costs, and maintenance of the productivity of the existing
store base. In addition, the Company must be able to hire, train and retain
competent managers and personnel and manage the systems and operational
components of its growth. The failure of the Company to open new Combo Stores on
a timely basis, obtain acceptance in markets in which it currently has limited
or no presence, attract qualified management and personnel or appropriately
adjust operational systems and procedures would adversely affect the Company's
future operating results. In addition, there can be no assurance that the
opening of new Combo Stores in existing markets will not have an adverse effect
on sales at existing stores in these markets. There can be no assurance that the
Company will be able to successfully implement its growth strategies, continue
to introduce the Combo Stores or maintain its current growth levels. See
"Business -- Store Expansion Strategy."
MERCHANDISE TRENDS
The Company's success depends in part on its ability to anticipate and
respond to changing merchandise trends and consumer preferences in a timely
manner. Accordingly, any failure by the Company to anticipate, identify and
respond to changing fashion trends could adversely affect consumer acceptance of
the merchandise in the Company's stores, which in turn could adversely affect
the Company's business and its image with its customers. If the Company
miscalculates either the market for its merchandise or its customers' purchasing
habits, it may be required to sell a significant amount of unsold inventory at
below average markups over the Company's cost, or below cost, which would have
an adverse effect on the Company's financial condition and results of
operations. In addition, the Company has increased its use of private brands.
The nature of the Company's obligations with respect to private brand purchases
may make it more difficult to respond to changing trends by reducing order
quantities. These factors could result in higher
9
<PAGE> 10
markdowns and lower gross profits to the extent that sales of private brand
merchandise are lower than expected. See "Business -- Merchandising."
RISKS ATTENDANT TO ACQUISITION STRATEGY
The Company generally considers three types of acquisition opportunities:
(i) real estate oriented acquisitions, to gain access to attractive sites and
favorable lease terms; (ii) other retail operations that could benefit from the
Company's management and expertise, such as other apparel chains offering a
complementary product line; and (iii) alternate channels of distribution, such
as mail order catalogs. The Company has never completed an acquisition of the
types listed in (ii) and (iii) above. At any given time, the Company may be in
various stages of consideration of such opportunities. Such acquisitions are
subject to due diligence, the negotiation of definitive agreements and other
conditions typical in acquisition transactions, certain of which may be beyond
the Company's control. There is no assurance that the Company will be able to
identify desirable acquisition candidates or will be successful in entering into
any definitive agreements with respect to desirable acquisitions. Moreover, even
if definitive agreements are entered into, there is no assurance that any future
acquisition will thereafter be completed or, if completed, that the anticipated
benefits of the acquisition will be realized.
The Company is currently negotiating a letter of intent for a proposed
acquisition of a private company in a new, but related, line of business that
would meet Dress Barn's acquisition criteria. The net sales of this business for
its most recent fiscal year were approximately $85 million. The proposed
purchase price is approximately $25 million to be paid in cash, in assumption of
debt and/or in shares of Common Stock. To the extent the Company issues Common
Stock to the seller, it is the Company's intention to purchase a similar number
of shares of Common Stock on the open market or otherwise. Also, the Company may
grant the seller a put option to require the Company to repurchase shares of
Common Stock issued to the seller as part of the purchase price under certain
circumstances. The target of the proposed acquisition, which has been in
existence for 14 years, has advised the Company that it incurred operating
losses for each of its past three years, including an operating loss of
approximately $2.0 million in its last fiscal year, and had a working capital
deficit of over $5.0 million as of December 31, 1996. The specific terms of the
acquisition are still subject to negotiation, and closing is subject to several
conditions, including conducting a due diligence investigation to the Company's
satisfaction and eventually negotiating and preparing a definitive purchase
agreement. There can be no assurance that the contemplated acquisition will be
consummated successfully or that the completed acquisition will be operated
profitably. See "Business -- Acquisition Opportunities."
DEPENDENCE ON KEY EXECUTIVES
The Company's success is largely dependent on the efforts and abilities of
its executive officers, particularly Elliot S. Jaffe, its Chairman and Chief
Executive Officer, and Burt Steinberg, its President and Chief Operating
Officer. The loss of the services of any of these individuals could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Management."
RELIANCE ON SYSTEMS AND DISTRIBUTION CENTER
The Company relies upon its existing management information systems in
operating and monitoring all major aspects of the Company's business, including
sales, warehousing, distribution, purchasing, inventory control, merchandising
planning and replenishment, as well as various financial systems. Any disruption
in the operation of the Company's management information systems, or the
Company's failure to continue to upgrade, integrate or expend capital on such
systems as its business expands, would have a material adverse effect on the
Company. In addition, the Company operates a 510,000 square foot office and
distribution center in Suffern, New York. Management believes the systems and
controls related to the distribution center are fully integrated and are more
than adequate to meet current needs and any foreseeable increase in the
Company's store base due to acquisition or expansion. However, any disruption in
the operations of the distribution center would have a material adverse effect
on the Company's business. See "Business - Management Information Systems."
10
<PAGE> 11
QUARTERLY RESULTS AND SEASONALITY
The Company has historically experienced substantially lower earnings in
its second fiscal quarter ending in January than during its other three fiscal
quarters, reflecting the intense promotional atmosphere that has characterized
the Christmas shopping season in recent years. In addition, the Company's
quarterly results of operations may fluctuate materially depending on, among
other things, the timing of new store openings, net sales contributed by new
stores, increases or decreases in comparable store sales, adverse weather
conditions, shifts in timing of certain holidays, changes in the Company's
merchandise mix and the timing of acquisitions. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Quarterly Results
and Seasonality."
11
<PAGE> 12
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares. The
1,000,000 shares being sold by The Jaffe Family Foundation were recently
contributed to it by the Jaffe Family, L.P. and are being sold to comply with
tax laws governing foundations. The Jaffe Family, L.P. is selling 1,000,000
shares for tax planning purposes.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
January 25, 1997:
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
Long term debt(1).............................................................. $ 3,500
--------
Shareholders' equity(2):
Preferred stock, par value $.05 per share; 100,000 shares authorized; no
shares issued or outstanding.............................................. --
Common stock, par value $.05 per share; 30,000,000 shares authorized;
23,786,842 shares issued; 22,781,842 shares outstanding................... 1,189
Additional paid-in capital................................................... 18,114
Retained earnings............................................................ 200,300
Treasury stock, at cost...................................................... (5,706)
Unrealized gain on investments............................................... 1,139
--------
Total shareholders' equity................................................ 215,036
--------
Total capitalization...................................................... $218,536
========
</TABLE>
(1) Consists of a loan from the New York State Urban Development
Corporation due October 1, 2004 bearing interest at rates of 0% to 3%
per annum.
(2) Excludes (a) 1,851,371 shares of Common Stock subject to outstanding
options granted under the Company's stock option plans and (b) shares
of Common Stock that may be issued in connection with a proposed
acquisition. See "Business -- Acquisition Opportunities."
12
<PAGE> 13
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data as of and for the fiscal
years ended July 27, 1996, July 29, 1995, July 30, 1994, July 31, 1993 and July
25, 1992 have been derived from the audited consolidated financial statements of
the Company and should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The following
selected consolidated financial data for the twenty-six weeks ended January 25,
1997 and January 27, 1996 are unaudited but have been prepared on the same basis
as the audited financial data and, in the opinion of management, contain all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the results of operations for such periods. The results of
operations for the twenty-six weeks ended January 25, 1997 are not necessarily
indicative of results to be expected for the full fiscal year.
<TABLE>
<CAPTION>
TWENTY-SIX
WEEKS ENDED
FISCAL YEAR ENDED -----------------------
-------------------------------------------------------- JANUARY JANUARY
JULY 25, JULY 31, JULY 30, JULY 29, JULY 27, 27, 25,
1992 1993(1) 1994 1995 1996(2) 1996 1997
-------- -------- -------- -------- -------- ---------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net sales................................ $363,090 $419,586 $457,325 $500,836 $515,522 $256,477 $274,212
Cost of sales, including occupancy and
buying costs......................... 238,061 274,434 301,154 327,166 337,998 169,341 180,305
-------- -------- -------- -------- -------- -------- --------
Gross profit........................... 125,029 145,152 156,171 173,670 177,524 87,136 93,907
Selling, general and administrative
expenses............................. 95,350 108,565 120,131 133,253 132,176 67,193 66,290
Depreciation and amortization ......... 7,690 9,177 12,127 14,063 15,828 9,287 8,958
Write-down of underperforming and
closed store assets.................. -- -- -- -- 2,848(3) -- --
-------- -------- -------- -------- -------- -------- --------
Operating income....................... 21,989 27,410 23,913 26,354 26,672 10,656 18,659
Interest income-net.................... 3,003 2,338 1,727 2,670 3,343 1,655 2,115
-------- -------- -------- -------- -------- -------- --------
Earnings before income taxes........... 24,992 29,748 25,640 29,024 30,015 12,311 20,774
Income taxes........................... 8,798 10,709 9,487 10,739 11,106 4,555 7,582
-------- -------- -------- -------- -------- -------- --------
Net earnings........................... $ 16,194 $ 19,039 $ 16,153 $ 18,285 $ 18,909 $ 7,756 $ 13,192
======== ======== ======== ======== ======== ======== ========
Earnings per share..................... $ 0.74 $ 0.86 $ 0.73 $ 0.82 $ 0.84 $ 0.35 $ 0.58
Weighted average shares outstanding.... 21,805 22,020 22,177 22,266 22,413 22,331 22,646
BALANCE SHEET DATA:
Working capital........................ $ 73,477 $ 83,476 $ 89,051 $103,310 $122,730 $111,709 $140,895
Total assets........................... 173,360 202,386 217,863 243,521 265,723 231,126 275,479
Long-term debt......................... -- -- -- 3,500 3,500 3,500 3,500
Shareholders' equity................... 120,339 142,003 159,198 178,938 199,096 187,571 215,036
</TABLE>
- ---------------
(1) Consists of 53 weeks. All other years presented consist of 52 weeks.
(2) Certain reclassifications have been made to prior years' data to conform
with 1996 presentation.
(3) Reflects a charge relating to the Company's implementation of the provisions
of Financial Accounting Standards No. 121. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
13
<PAGE> 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
RECENT DEVELOPMENTS
During the third quarter ended April 26, 1997, net sales totaled $134.1
million compared to $125.2 million during the quarter ended April 27, 1996, an
increase of 7%. Comparable store sales for the third quarter of Fiscal 1997
increased 6% over the third quarter of Fiscal 1996. Net sales for the nine-month
period ended April 26, 1997 were $408.3 million compared to $381.7 million for
the nine-month period ended April 27, 1996, an increase of 7%. Comparable store
sales for the nine-months ended April 26, 1997 increased 5% over the nine-months
ended April 27, 1996. The increase in net sales for the third quarter ended
April 26, 1997 was positively affected by the reaction to the Company's
merchandise and an absence of the adverse weather conditions that prevailed in
the winter of 1996.
Preliminary information indicates that net earnings for the third quarter
ended April 26, 1997 increased 43% to $7.4 million, or $.32 per share, compared
to $5.1 million, or $.23 per share, for the third quarter ended April 27, 1996.
Preliminary information, subject to final review, also indicates that net income
for the nine-month period ended April 26, 1997 increased 60% to $20.6 million,
or $.90 per share, compared to $12.9 million, or $.58 per share, for the
nine-months ended April 27, 1996. As of April 26, 1997, the Company operated 702
stores (including 191 Combo Stores) as compared to 749 stores (including 136
Combo Stores) in operation as of April 27, 1996. The Company is currently
negotiating a letter of intent for a proposed acquisition of a private company
in a new, but related, line of business that would meet Dress Barn's acquisition
criteria. See "Business -- Acquisition Opportunities."
RESULTS OF OPERATIONS
The table below sets forth certain financial data of the Company expressed
as a percentage of net sales for the periods indicated:
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS
FISCAL YEAR ENDED ENDED
----------------------------- ---------------------
JULY JULY JULY JANUARY JANUARY
30, 29, 27, 27, 25,
1994 1995 1996 1996 1997
------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net sales.................................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales, including occupancy and
buying................................... 65.9 65.3 65.6 66.0 65.8
Gross profit............................... 34.1 34.7 34.4 34.0 34.2
Selling, general and administrative
expenses................................. 26.3 26.6 25.6 26.2 24.2
Depreciation and amortization.............. 2.6 2.8 3.0 3.6 3.2
Writedown of underperforming and closed
store.................................... -- -- 0.6 -- --
----- ----- ----- ----- -----
Operating income........................... 5.2 5.3 5.2 4.2 6.8
Interest income............................ 0.4 0.5 0.6 0.6 0.8
Income before income taxes................. 5.6 5.8 5.8 4.8 7.6
Income taxes............................... 2.1 2.1 2.1 1.8 2.8
----- ----- ----- ----- -----
Net income................................. 3.5% 3.7% 3.7% 3.0% 4.8%
===== ===== ===== ===== =====
</TABLE>
TWENTY-SIX WEEKS ENDED JANUARY 25, 1997 COMPARED TO TWENTY-SIX WEEKS ENDED
JANUARY 27, 1996
Net sales increased by 6.9% to $274.2 million for the 26 weeks ended
January 25, 1997 from $256.5 million for the 26 weeks ended January 27, 1996,
due primarily to a 5% increase in comparable store sales. The increase in
comparable store sales resulted primarily from better weather conditions during
the 1997 period. The improvement in net sales was also attributable to an
approximately 1% increase in total selling square footage, which was due to the
opening of new Combo Stores and the conversion of single-format stores into
Combo Stores. This offset the closing of underperforming stores, which resulted
in the number of stores in operation declining to 707 stores as of January 25,
1997, from 759 stores in operation as of January 27, 1996.
Gross profit (net sales less cost of goods sold, including occupancy and
buying costs) increased by 7.8% to $93.9 million, or 34.2% of net sales, for the
1997 period from $87.1 million, or 34.0% of net sales, for the 1996
14
<PAGE> 15
period. The increase in gross profit as a percentage of net sales was primarily
due to a decrease in markdowns, as well as the fixed nature of occupancy costs
which were unaffected by the increase in comparable store sales.
Selling, general and administrative (SG&A) expenses decreased by 1.3% to
$66.3 million, or 24.2% of net sales, in the 1997 period from $67.2 million, or
26.2% of net sales, in the 1996 period, reflecting the Company's continued focus
on cost reductions and productivity improvements.
Depreciation expense decreased by 3.5% to $9.0 million for the 1997 period
from $9.3 million for the 1996 period. Depreciation expense for both periods
reflect certain writeoffs related to the closure of 34 stores and 36 stores
during the 1997 and 1996 periods, respectively.
Interest income -- net increased by 27.8% to $2.1 million for the 1997
period from $1.7 million for the 1996 period. The increase resulted primarily
from an increase in the Company's investment portfolio.
FISCAL 1996 COMPARED TO FISCAL 1995
Net sales increased by 2.9% to $515.5 million in Fiscal 1996, from $500.8
million in Fiscal 1995. Comparable store sales decreased 3.5% from the prior
year. The Company operated 726 stores at July 27, 1996, compared to 766 stores
operated at July 29, 1995.
The increase in net sales in Fiscal 1996 resulted from the Company's store
development activity. Although the Company closed 72 stores in Fiscal 1996, the
Company increased its selling square footage approximately 1% by opening 45 new
stores and converting 50 single-format stores into Combo Stores. The decrease in
comparable store sales in Fiscal 1996 resulted primarily from competitive
pressures, unseasonable weather and a general price deflation in the women's
apparel retail sector.
Gross profit was $177.5 million, or 34.4% of net sales, in Fiscal 1996,
compared to $173.7 million, or 34.7% of net sales, in Fiscal 1995. The decrease
in gross profit as a percentage of net sales resulted primarily from spreading
relatively fixed occupancy and buying costs over decreased comparable store
sales.
SG&A expenses as a percentage of net sales decreased 1.0% in Fiscal 1996
versus Fiscal 1995. The economies of converting stores to the larger combination
format and an enhanced company-wide focus on cost controls contributed to this
decrease. These factors more than offset the effect of lower comparable store
sales on these relatively fixed expenses.
Depreciation expense was $15.8 million in Fiscal 1996, compared to $14.0
million in Fiscal 1995. The 12.5% increase in Fiscal 1996 resulted primarily
from additions to property and equipment related to the relocation of the
Company's distribution facility in Fiscal 1994 and 1995. Depreciation expense in
Fiscal 1996 also included a $3.0 million loss on disposal of closed store assets
versus $2.3 million in Fiscal 1995.
In the fourth quarter of Fiscal 1996, the Company implemented the
provisions of Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." This statement addresses the timing of recognition and the measurement of
impairment of (a) long-lived assets, certain identifiable intangibles, and
goodwill related to those assets to be held and used, and (b) long-lived assets
and certain identifiable intangibles to be disposed of. The statement requires
that such assets be reviewed for impairment whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable, and
that such assets be reported at the lower of carrying amount or fair value. The
Company recorded a pre-tax charge of $2.8 million in Fiscal 1996 resulting from
adoption of this statement.
Interest income -- net in Fiscal 1996 increased 25% over Fiscal 1995. The
increase resulted primarily from an increase in the market value of the
Company's managed municipal bond portfolio.
FISCAL 1995 COMPARED TO FISCAL 1994
Net sales increased by 9.5% to $500.8 million in Fiscal 1995 from $457.3
million in Fiscal 1994. Comparable store sales decreased 1.4% from the prior
year. The Company operated 766 stores at July 29, 1995, compared to 688 stores
operated at July 30, 1994.
15
<PAGE> 16
The increase in net sales in Fiscal 1995 resulted primarily from the
Company's store development activities. In Fiscal 1995, the Company increased
selling square footage by approximately 4% by opening 108 new stores while
closing 30 existing stores.
Gross profit increased to 34.7% of net sales in Fiscal 1995 from 34.1% of
net sales in Fiscal 1994. The decrease in cost of goods sold as a percentage of
net sales resulted primarily from improved initial mark-ups which offset higher
occupancy costs from both new stores and expanded existing stores.
SG&A expenses (restated to exclude depreciation) were $133.3 million in
Fiscal 1995, compared to $120.1 million in Fiscal 1994, an increase of 10.9%. As
a percentage of net sales, SG&A was 26.6% in Fiscal 1995 compared to 26.3% in
Fiscal 1994. The increase in SG&A as a percentage of net sales primarily
resulted from decreased comparable store sales and the corporate relocation to
Suffern, New York.
Depreciation expense was $14.0 million in Fiscal 1995, compared to $12.1
million in Fiscal 1994. The increase in Fiscal 1995 resulted primarily from
additions to property and equipment related to the Company's store development
activities. The loss on disposal of closed store assets was $2.3 million in
Fiscal 1995 versus $1.2 million in Fiscal 1994.
Interest income in Fiscal 1995 increased by 54.6% over Fiscal 1994. The
increase resulted primarily from the increase in the market value of the
Company's managed municipal bond portfolio.
LIQUIDITY AND CAPITAL RESOURCES
The Company has generally funded, through internally generated cash flow,
all of its operating and capital needs. These include the opening of new stores,
the remodeling of existing stores and the continued expansion of its Combo Store
format. Total capital expenditures were $17.1 million, $22.0 million and $23.4
million in Fiscal 1996, 1995 and 1994, respectively. A total of approximately
$15.0 million of capital expenditures during Fiscal 1994 and Fiscal 1995 were
for the new Suffern, New York facility. In conjunction with the relocation of
its headquarters, the Company accepted a $3.5 million low interest industrial
revenue loan in Fiscal 1995 from the New York State Urban Development
Corporation, bearing interest rates ranging from 0% to 3% per annum.
The Company's cash, cash equivalents, marketable securities and investments
increased approximately $19.0 million in Fiscal 1996 from Fiscal 1995. This was
primarily due to the increase in earnings and a decrease in SG&A expenses. The
Company funds inventory expenditures through cash flows from operations and the
favorable payment terms the Company has established with its vendors. The
Company's quick ratio (i.e., the ratio of current assets less inventory to
current liabilities) has improved steadily over the past three years (1.54, 1.25
and 1.17 at the end of Fiscal 1996, 1995 and 1994, respectively). Merchandise
inventories at July 27, 1996 increased $1.7 million from July 29, 1995 as the
Company has continued to grow its inventory levels in line with projected sales.
The Company's net cash provided by operations in Fiscal 1996 increased to $35.6
million as compared to $27.6 million in Fiscal 1995 and $23.7 million in Fiscal
1994. The increase in Fiscal 1996 was due to the increase in earnings and
favorable income tax cash planning. During this three-year period, the Company
has increased its cash, cash equivalents, marketable securities and investments
by $30.2 million and financed its expansion and corporate relocation while only
incurring $3.5 million in long-term debt.
At January 25, 1997, the Company had working capital of approximately
$141.0 million and three bank credit lines totaling $95.0 million without any
outstanding borrowings. Inventory levels at the end of the period were
consistent with the Company's sales projections. Expenditures for property and
equipment totaled $6.5 million for the six months ended January 25, 1997,
compared to $8.3 million of expenditures in the first six months of Fiscal 1996,
and the Company anticipates spending approximately $10.0 million for the
remainder of Fiscal 1997. This does not include amounts that may be paid in
connection with the proposed acquisition. See "Business -- Acquisition
Opportunities."
The Company believes that its cash, cash equivalents, marketable securities
and investments, together with cash flow from operations, will be adequate to
fund the Company's proposed capital expenditures and other operating
requirements.
16
<PAGE> 17
INFLATION
The Company does not believe that inflation had a material effect on its
results of operations during the past two years. However, there can be no
assurance that the Company's business will not be affected by inflation in the
future.
QUARTERLY RESULTS AND SEASONALITY
The Company has historically experienced substantially lower earnings in
its second fiscal quarter ending in January than during its other three fiscal
quarters, reflecting the intense promotional atmosphere that has characterized
the Christmas shopping season in recent years. In addition, the Company's
quarterly results of operations may fluctuate materially depending on, among
other things, the timing of new store openings, net sales contributed by new
stores, increases or decreases in comparable store sales, adverse weather
conditions, shifts in timing of certain holidays, changes in the Company's
merchandise mix and the timing of acquisitions.
The following table sets forth certain unaudited financial information for
the Company in each quarter during Fiscal 1996 and each of the first two
quarters of Fiscal 1997. The unaudited quarterly information includes all normal
recurring adjustments which management considers necessary for a fair
presentation of the information shown.
<TABLE>
<CAPTION>
FISCAL 1996 FISCAL 1997
-------------------------------------------- --------------------
FIRST SECOND THIRD FOURTH FIRST SECOND
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Net sales.................... $137,351 $119,127 $125,174 $133,871 $142,755 $131,457
Gross profit................. 48,387 38,750 43,783 46,604 49,960 43,947
Operating income............. 8,820 1,837 7,356 8,659 11,535 7,125
Net income................... 6,025 1,731 5,137 6,016 7,924 5,268
Earnings per share........... .27 .08 .23 .27 .35 .23
Percentage increase (decrease) in
comparable store net
sales...................... (4.3%) (4.7%) (3.4%) (1.1%) 1.9% 9.1%
Total stores (end of
period).................... 776 759 749 726 728 707
</TABLE>
17
<PAGE> 18
BUSINESS
THE COMPANY
Dress Barn operates a national chain of value-priced specialty stores
offering career apparel and accessories to the fashion-conscious working woman.
In addition, the Company's stores carry a broad assortment of casual wear to
suit its customers' total lifestyle needs. Over the past several years, the
Company has evolved from an off-price chain to a value-priced specialty
retailer. The Company distinguishes itself from (i) off-price retailers by its
carefully edited selection of in-season, first-quality merchandise,
service-oriented salespeople and its comfortable shopping environment, (ii)
department stores by its value pricing and convenient locations and (iii) other
specialty apparel retailers by its continuous focus on Dress Barn's target
customer for more than 35 years. As part of this focus, the Company has
successfully developed its own line of private brands, which constituted
approximately 50% of net sales for the six months ended January 25, 1997.
The Company's stores operate primarily under the names Dress Barn and Dress
Barn Woman, the latter featuring larger sizes of styles similar to those found
in the Dress Barn stores. The Company also operates combination Dress Barn/Dress
Barn Woman stores ("Combo Stores"), which carry both Dress Barn and Dress Barn
Woman merchandise. As of April 26, 1997, Dress Barn operated 702 stores in 43
states and the District of Columbia, consisting of 425 Dress Barn stores, 86
Dress Barn Woman stores and 191 Combo Stores. The Dress Barn and Dress Barn
Woman stores average approximately 4,500 and approximately 3,900 square feet,
respectively, and the Combo Stores average approximately 8,400 square feet.
Based on the success of its Combo Stores, the Company is focusing its expansion
strategy on opening new Combo Stores and converting existing Dress Barn and
Dress Barn Woman stores to the combination format. The Company plans to open
approximately 60 additional Combo Stores by the end of Fiscal 1998.
INDUSTRY BACKGROUND
The retail apparel industry has undergone significant contraction in recent
years, with the closing of over 30 major retail chains and considerable
consolidation. According to Dun and Bradstreet, over 9,500 retail apparel and
accessory stores closed or failed in the United States between 1991 and 1995. As
a result of this consolidation, the Company believes it is the second largest
national specialty retail chain of value-priced women's clothing. This period
was characterized by strong competition and price deflation, which resulted in
operating margin pressure for the retail apparel industry. The Company believes
that these trends have begun to reverse in the past six months.
Another significant trend in retailing has been the steady reduction in
regional shopping mall traffic. Studies show that busy consumers have less time
to contend with suburban congestion and are, instead, shopping closer to home.
According to a 1995 Stillerman Jones & Co. study, the nationwide average of mall
visits by consumers and the average time spent shopping in malls fell to 3.3
visits per month and 66 minutes spent in 1995, from 3.5 visits per month and 71
minutes spent in 1991. With the majority of its stores located in strip centers,
the Company believes it is well positioned to benefit from these trends.
COMPANY STRENGTHS
Dress Barn is a leading specialty store offering women's career fashions at
value prices, and attributes its success to its: (i) strong name recognition and
loyal customer base; (ii) long-standing relationships with vendors of quality
merchandise; (iii) experienced management team; (iv) commitment to technology;
(v) strong, consistent customer focus; (vi) low cost operating structure; and
(vii) strong balance sheet.
Strong Name Recognition. Since the Company's formation in 1962, Dress Barn
has established and reinforced its image as a source of fashion and value for
the working woman. The Company's 702 store locations in 43 states and the
District of Columbia provide it with a nationally recognized name. In addition,
the Company believes it has developed high awareness among its target customers
through on-going advertising and local marketing activities.
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<PAGE> 19
Strong Vendor Relationships. The Company has developed and maintains
strong and lasting relationships with its domestic and offshore vendors. Dress
Barn has worked with many of its vendors for more than 15 years, and often is
one of the vendors' largest accounts. These relationships, along with the
Company's buying power and strong credit profile, enable the Company to receive
favorable purchase terms, exclusive merchandise and expedited delivery times.
Experienced Management Team. The three senior members of the Company's
merchandising team have worked together at Dress Barn for over 15 years, with
each having substantial previous fashion retailing experience. This team
engineered the Company's evolution from an off-price retailer to a value-priced
specialty store. The Company's executive officers have an average tenure at
Dress Barn of 14 years. The stability of its management has enabled the Company
to develop a shared culture and vision and to maintain its focus on growing and
refining its business.
Commitment to Technology. Dress Barn has used technology to improve
merchandising and customer service, reduce costs and enhance productivity. For
example, the Company's management information systems, which include a new IBM
AS/400 integrated financial system and IBM 4694 point-of-sale system, allow it
to provide better service to customers by reducing paperwork and decreasing the
average transaction processing time. This enables sales associates to spend more
time assisting customers. The Company has also developed a laptop system that
delivers up-to-date store related information to its regional sales managers.
The Company's distribution center systems, installed in 1994, have reduced
per-unit distribution costs by over 50%, representing approximately $1.0 million
in annual savings.
Strong, Consistent Customer Focus. All aspects of Dress Barn's business
are designed to be responsive to the Dress Barn customer. Since 1962, the
Company has been consistent in targeting price-conscious and fashion-minded
working women. The convenient locations of the Company's stores primarily in
strip and outlet centers, carefully edited merchandise arranged for ease of
shopping, comfortable store environment and friendly customer service embody
Dress Barn's strong focus on its customers. Dress Barn's comprehensive training
program encourages its sales associates to assist customers in a low-key and
friendly manner. The Company believes it enhances its customers' shopping
experience by avoiding aggressive sales tactics that would result from a
commission-based compensation structure.
Low Cost Operator. The Company continually seeks to reduce costs in all
aspects of its operations and to create cost-consciousness at all levels. During
Fiscal 1995 the Company established a cost control procedure which analyzes each
department's budget twice annually to identify savings opportunities. For
example, this focus on cost-cutting has contributed to a $900,000 reduction in
selling, general and administrative expenses for the six months ended January
25, 1997, compared to the six months ended January 27, 1996, despite the
Company's increased sales in the 1997 period.
Strong Balance Sheet. The Company believes that its highly liquid balance
sheet and internally generated funds provide a competitive advantage that
enables the Company to pursue its long-term strategies regarding new stores,
capital expenditures and acquisitions.
OPERATING STRATEGIES
The Company's objective is to become a dominant national chain of
value-priced specialty apparel stores offering career fashions to the moderate
income working woman. The Company has developed the following strategies to
achieve this goal: (i) further development of Dress Barn's private brands; (ii)
maintenance of Dress Barn's merchandise focus; (iii) continuation of the Combo
Store roll-out; (iv) further development of customer targeted marketing; and (v)
further improvement of customer service.
Private Brand Strategy. The Company has gradually increased the percentage
of sales from goods manufactured under Dress Barn's private brands, as well as
goods produced by national brand manufacturers exclusively for Dress Barn, to
approximately 50% and 15%, respectively, of the Company's net sales for the six
months ended January 25, 1997. While the Company intends to continue to offer a
balanced mix of both national brand name and private brand merchandise, it plans
to continue to increase the percentage of private brand merchandise sold by its
stores, including its successful Westport(R), Princeton Club(R) and Atrium(R)
19
<PAGE> 20
brands. Dress Barn's private brands typically create more value for its
customers and promote Dress Barn's "fashion at a fraction" image.
Merchandise Strategy. The Company's stores carry a broad assortment of
career wear, including dresses, suits, separates, blouses, sweaters and other
knitwear, as well as casual wear items, that are carefully edited to suit the
lifestyle needs of its target customer. Dress Barn does not seek to dictate
fashion trends; rather it offers current styles but avoids fashion-forward
merchandise that is subject to rapidly changing trends. While career fashions
remain the Company's primary focus, it continues to adapt to the evolving
definition of "career," such as casual Fridays. In addition, the Company seeks
to broaden its appeal by expanding its merchandise mix. The Company has recently
introduced shoes and petites in select locations. Based on the success of these
initial tests, the Company is gradually increasing the number of stores offering
shoes and petites.
Combo Store Roll-Out. Based on the success of the Combo Stores, the
Company expects most future store openings to be Combo Stores. Because of their
larger size, the Combo Stores provide the Company with greater presence in
shopping centers, give the Company more leverage in negotiating lease terms,
enable the Company to achieve lower operating cost ratios and offer increased
flexibility in merchandise presentation. Of the approximately 60 additional
Combo Stores which the Company plans to open by the end of Fiscal 1998, 25 are
expected to be new stores and 35 are expected to be conversions from existing
Dress Barn or Dress Barn Woman stores.
In conjunction with its strategy of adding Combo Stores, the Company is
aggressively closing underperforming locations and expects to close
approximately 60 such locations during Fiscal 1997, of which 50 have been closed
as of April 26, 1997. The Company has the option under a substantial number of
its store leases to terminate the lease at little or no cost if specified sales
volumes are not achieved, affording the Company greater flexibility to close
certain underperforming stores. In Fiscal 1997, the Company's roll-out of Combo
Stores, net of store closings, is expected to result in a small increase to the
Company's aggregate store square footage and an increase in the proportion of
square footage attributable to Combo Stores from 33% to 40%.
Targeted Marketing. The Company uses several marketing tools, such as
transactional analyses through point-of-sale systems and customer surveys, in
order to determine the preferences of its target customers, working women ages
25-55. In addition, the Company distributed six mailings during the 12 months
ended January 25, 1997, each to approximately one million households including
its credit card holders. The Company is also collecting data from its credit
card program for use in other future marketing initiatives. Management believes
that these tools will further improve the Company's ability to align its
operations with the demands of its target customers on a consistent basis.
Customer Service. Dress Barn continually seeks to improve the customer's
shopping experience. For example, the Company's new management information
systems enable store managers and sales associates to spend more time serving
customers. The Company has also developed an ongoing video training program to
continue to improve customer service and sales associates' product knowledge and
selling skills.
ACQUISITION OPPORTUNITIES
In order to supplement the Company's growth and enhance shareholder value,
the Company considers three types of acquisition opportunities: (i) real estate
oriented acquisitions to gain access to attractive sites and favorable lease
terms; (ii) other retail operations that could benefit from Dress Barn's
management and expertise, such as chains offering a complementary product line;
and (iii) alternate channels of distribution, such as mail order catalogs. The
Company seeks to assure that the earnings-per-share impact of a potential
acquisition for the first full fiscal year will be approximately neutral to
positive. The Company believes that its highly liquid balance sheet, with cash,
cash equivalents and marketable securities of $119 million as of January 25,
1997, will enable it to take advantage of such acquisition opportunities should
they arise. The Company believes that its Suffern, New York facility and its
corporate, merchandising and distribution infrastructure is more than adequate
to meet current needs and any foreseeable increase in the Company's store base
due to expansion or acquisition.
20
<PAGE> 21
The Company is currently negotiating a letter of intent for a proposed
acquisition of a private company in a new, but related, line of business that
would meet Dress Barn's acquisition criteria. The net sales of this business for
its most recent fiscal year were approximately $85 million. The proposed
purchase price is approximately $25 million to be paid in cash, in assumption of
debt and/or in shares of Common Stock. To the extent the Company issues Common
Stock to the seller, it is the Company's intention to purchase a similar number
of shares of Common Stock on the open market or otherwise. Also, the Company may
grant the seller a put option to require the Company to repurchase shares of
Common Stock issued to the seller as part of the purchase price under certain
circumstances. The target of the proposed acquisition, which has been in
existence for 14 years, has advised the Company that it incurred operating
losses for each of its past three years, including an operating loss of
approximately $2.0 million in its last fiscal year, and had a working capital
deficit of over $5.0 million as of December 31, 1996. The specific terms of the
acquisition are still subject to negotiation, and closing is subject to several
conditions, including conducting a due diligence investigation to the Company's
satisfaction and eventually negotiating and preparing a definitive purchase
agreement. See "Risk Factors -- Risks Attendant to Acquisition Strategy."
MERCHANDISING
The Company's stores offer a broad assortment of career wear including
dresses, suits, separates, blouses, sweaters and other knitwear, as well as
casual wear items, that are carefully edited to suit the lifestyle needs of its
target customer. In addition, the Company offers other wardrobe items including
accessories, jewelry, hosiery and shoes. Dress Barn and Dress Barn Woman are
organized as separate divisions, each with a separate merchandising team. Combo
Stores have merchandise offerings from both the Dress Barn and Dress Barn Woman
merchandising divisions.
A key component of the Company's merchandising strategy is to increase the
percentage of its sales derived from private brands. Private brands allow the
Company to differentiate itself from other retailers by providing an assortment
of merchandise that is not available elsewhere and to improve the Company's
control over the flow of merchandise into its stores by enabling the Company to
better specify quantities, styles, colors, size breaks and delivery dates. In
addition, the Company believes private brands provide it with more flexibility
in the marketing process by allowing for higher initial mark-ons and limiting
the ability of customers to compare prices with competing retailers. The Company
believes it has the expertise to execute its private brand strategy due to its
extensive experience sourcing goods, primarily overseas, its position as a
merchandiser of established fashions and its already successful line of private
brands. The percentage of the Company's sales generated from private brands has
increased steadily to approximately 50% for the 26-week period ended January 25,
1997 from 40% during Fiscal 1996, 30% during Fiscal 1995 and 25% during Fiscal
1994.
In Fiscal 1996, the Company introduced two new departments, shoes and
petites, primarily in its Combo Stores. Following initial tests, these
departments are being rolled out to additional stores. As of January 25, 1997,
47 stores had shoe departments and 12 stores featured petites. The Company
expects to add another 48 shoe departments and 23 petite departments in the
Spring of 1997.
Virtually all merchandising decisions affecting the Company's stores are
made centrally. Merchandising policy is under the direction of the Chairman, the
President and five merchandise managers. Prices and markdowns are determined
centrally but may be adjusted locally in response to competitive situations.
Generally, the majority of the merchandise sold by the Company is uniformly
carried by all stores, with a percentage varied by management according to
regional or consumer tastes or the size of particular stores. To keep
merchandise seasonal and in current fashion, inventory is reviewed weekly and
markdowns are taken as appropriate to expedite selling.
BUYING AND DISTRIBUTION
Buying is conducted on a departmental basis for each of the Dress Barn and
Dress Barn Woman divisions by the Company's staff of 18 buyers and 19 assistant
buyers supervised by the President and five merchandise managers. The Company
also uses independent buying representatives in New York and overseas.
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<PAGE> 22
The Company obtains its nationally branded merchandise from approximately
350 vendors and its private brand merchandise from approximately 50 vendors.
Typical lead times for the Company in making purchases from its vendors range
from approximately one month for items such as t-shirts, socks and hosiery to
approximately six months for items such as suits and dresses. Generally, lead
times do not vary significantly between the Company's private brands and
nationally branded merchandise. No vendor accounted for as much as 5% of the
Company's purchases in Fiscal 1996. The Company does not have any long-term
supply contracts with its vendors.
All merchandise is received from vendors at the Company's central warehouse
and distribution facility in Suffern, New York, where it is inspected, allocated
and shipped to its stores. The Company seeks to use its strong relationships
with vendors to lower its operating costs by shifting freight and insurance
costs to the vendors and by requiring them to provide ancillary services. For
example, over 90% of the Company's merchandise is pre-ticketed by vendors and
over 30% is pre-packaged for distribution to stores, which allows cross-docking
in the distribution center to the stores. In addition, nearly half of the
hanging garments purchased by the Company are delivered on floor-ready hangers.
The Company generally does not warehouse merchandise, but distributes it
promptly to stores. Turnaround time between the receipt of merchandise from the
vendor and shipment to the stores is usually three days or less, and shipments
are made daily to most stores, maintaining the freshness of merchandise. Because
of such frequent shipments, the stores do not require significant storage space.
The Company may on occasion buy certain basic clothing that does not change in
style from year to year at attractive prices and warehouse such items at its
distribution center until needed.
STORE LOCATIONS AND PROPERTIES
As of April 26, 1997, the Company operated 702 stores in 43 states and the
District of Columbia. 393 of the stores are conveniently located in strip
centers and 264 stores are located in outlet centers. The Dress Barn and Dress
Barn Woman stores average approximately 4,500 and approximately 3,900 square
feet, respectively, and the Combo Stores average approximately 8,400 square
feet. In certain outlet centers, Dress Barn stores operate under the name
Westport Ltd. and Dress Barn Woman stores operate under the name Westport Woman.
Westport Ltd. and Westport Woman stores account for approximately 20% of the
Company's stores currently in operation. The Company intends to convert
approximately 50 of these stores to the Dress Barn or Dress Barn Woman name by
the end of Fiscal 1997. After the conversion of the 50 stores, Westport Ltd. and
Westport Woman stores will account for approximately 10% of the Company's
stores.
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<PAGE> 23
The table below indicates the states in which the stores operating on April
26, 1997 were located, and the number of stores in each state:
<TABLE>
<CAPTION>
DRESS DRESS BARN COMBO
LOCATION BARN(1) WOMAN(2) STORES TOTAL
- ---------------------------------------------- ----- ---------- ----- -----
<S> <C> <C> <C> <C>
Alabama....................................... 4 1 2 7
Arizona....................................... 12 1 3 16
Arkansas...................................... 1 -- 2 3
California.................................... 26 5 13 44
Colorado...................................... 5 1 3 9
Connecticut................................... 13 2 12 27
District of Columbia.......................... -- -- 1 1
Delaware...................................... 3 -- 2 5
Florida....................................... 16 2 7 25
Georgia....................................... 19 3 6 28
Idaho......................................... 2 1 1 4
Illinois...................................... 16 -- 8 24
Indiana....................................... 12 1 2 15
Iowa.......................................... -- -- 1 1
Kansas........................................ 3 1 2 6
Kentucky...................................... 2 1 3 6
Louisiana..................................... 1 -- 2 3
Maine......................................... 3 1 -- 4
Maryland...................................... 11 2 7 20
Massachusetts................................. 26 3 11 40
Michigan...................................... 19 2 8 29
Minnesota..................................... 1 -- 2 3
Mississippi................................... 1 -- 2 3
Missouri...................................... 5 1 7 13
Nebraska...................................... 3 -- -- 3
Nevada........................................ 3 1 2 6
New Hampshire................................. 5 1 2 8
New Jersey.................................... 30 12 10 52
New York...................................... 40 9 17 66
North Carolina................................ 20 7 6 33
Ohio.......................................... 11 1 7 19
Oklahoma...................................... 2 -- -- 2
Oregon........................................ 2 2 -- 4
Pennsylvania.................................. 32 9 12 53
Rhode Island.................................. 1 -- -- 1
South Carolina................................ 16 1 2 19
Tennessee..................................... 9 3 5 17
Texas......................................... 17 3 8 28
Utah.......................................... 3 2 1 6
Vermont....................................... 1 -- -- 1
Virginia...................................... 26 6 3 35
Washington.................................... 3 1 4 8
West Virginia................................. -- -- 1 1
Wisconsin..................................... -- -- 4 4
--- --- --- ---
Total......................................... 425 86 191 702
=== === === ===
</TABLE>
- ------------------
(1) Includes 105 Westport Ltd. stores.
(2) Includes 23 Westport Woman stores.
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<PAGE> 24
The Company leases all its stores. Most leases have formulas requiring the
payment of a percentage of sales as additional rent, generally when sales reach
specified levels. The Company's aggregate minimum rentals under operating leases
in effect at July 27, 1996, and excluding locations acquired after July 27,
1996, for Fiscal 1997 are approximately $49.4 million. In addition, the Company
is also responsible under its store leases for its pro rata share of maintenance
expenses and common charges in strip and outlet centers.
A substantial number of store leases give the Company the option to
terminate the lease at little or no cost if certain specified sales volumes are
not achieved. This affords the Company greater flexibility to close
underperforming stores. Usually these provisions are operative only during the
first few years of the lease.
The Company leases its executive offices and distribution facilities in
Suffern, New York. The Suffern facility has a total of 510,000 square feet, with
100,000 square feet of office space and the remainder for merchandise
distribution. This lease expires on April 30, 2007, with three five-year options
to extend the lease. Management believes the Suffern facility is sufficient to
meet its current needs and any foreseeable increase in the Company's store base
resulting from expansion or acquisition.
NEW STORE OPENINGS
In considering new markets for store openings, the Company typically
focuses on several criteria, such as concentration of the Company's target
customer base, the average household income in the surrounding area and the
location of the proposed store relative to competitive retailers. Within the
specific strip or outlet center, the Company evaluates the proposed co-tenants,
the traffic count of the existing center and the location of the store within
the center. The Company's real estate committee, which includes members of
senior management, must approve each new lease. The committee receives input
from field management. The Company estimates that more than 50% of new store
openings have traditionally been in markets where the Company already has a
presence, with the remainder being in new markets. Of the approximately 60
additional Combo Stores which the Company plans to open by the end of Fiscal
1998, 25 are expected to be new stores and 35 are expected to be conversions
from existing Dress Barn or Dress Barn Woman stores.
The Company's investment in new stores consists primarily of inventory, net
of vendor payables, leasehold improvements, fixtures and equipment. The typical
new Combo Store requires a total investment of approximately $220,000,
consisting of $60,000 of inventory, $110,000 related to leasehold improvements
and $50,000 of fixtures and equipment. The typical single unit Dress Barn or
Dress Barn Woman store requires a total investment of approximately $140,000,
consisting of $40,000 of inventory, $65,000 related to leasehold improvements
and $35,000 of fixtures and equipment. Dress Barn often receives tenant
improvement allowances from the landlords to offset these initial investments.
The Company's stores are typically profitable within the first 12 months of
operation.
STORE MANAGEMENT AND OPERATIONS
All stores are directly managed and operated by the Company. Each store is
staffed by a supervisor, who may be the store manager, and at least one sales
associate during non-peak hours, with additional sales associates added as
needed at peak hours. The supervisors and sales associates perform all store
operations, from receiving and processing merchandise and arranging it for
display, to assisting customers. Each store manager reports to a district sales
manager who, in turn, reports to a regional sales manager. Dress Barn employs 10
regional sales managers and 90 district sales managers. District sales managers
typically visit each store at least once a week to review merchandise levels and
presentation, staff training and personnel performance, expense control,
security, cleanliness and adherence to Company operating procedures. As of April
26, 1997, the Company employed approximately 6,100 people, 3,500 of whom were
employed on a part-time basis.
The Company motivates its sales associates through promotion from within,
creative incentive programs, competitive wages and the opportunity for bonuses.
Associates compete in a broad variety of Company-wide contests involving sales
goals and other measures of performance. The contests are designed to boost
store profitability, create a friendly competitive atmosphere among associates
and offer opportunities for additional compensation. Management believes that
Dress Barn's creative incentive programs provide an important tool
24
<PAGE> 25
for building cohesive and motivated sales teams. The Company has also
implemented comprehensive training programs at the store level in order to
ensure that the customer will receive friendly and helpful service, which
include (i) on-going video training, (ii) workbooks and manuals and (iii)
one-on-one training of sales associates by store managers.
For the 26-week period ended January 25, 1997, approximately 58% of the
Company's sales were paid for by credit card, with the remainder being by cash
or check. In February 1994, the Company introduced its own Dress Barn credit
card. Consistent with the other credit cards it accepts, the Company assumes no
credit risk with respect to its Dress Barn card but pays a percentage of sales
as a service charge. As of April 26, 1997, there were approximately 800,000
cardholders, whose purchases constituted approximately 15% of total sales during
the six months ended January 25, 1997. The average transaction on the Dress Barn
credit card during the current fiscal year through April 26, 1997 was
approximately 50% more than the average of all other transactions.
Virtually all of the Company's stores are open seven days a week. Stores
located in strip and outlet centers conform to the hours of other stores in the
center and are open most evenings, while downtown and free-standing stores are
usually open two nights per week.
STORE LAYOUT
The Company's stores are designed to create a comfortable and pleasant
shopping environment for its customers. Merchandise and displays at all of the
stores are set up according to uniform guidelines and plans distributed by the
Company. The Company's merchandise is carefully arranged by lifestyle category
(e.g., career, casual and weekend wear) for ease of shopping. The stores also
have private fitting rooms, drive aisles, appealing lighting, carpeting,
background music and centralized cashier desks. Strategically located throughout
the stores are "lifestyle" posters showing the customer complete outfits
coordinated from among the stores' fashion offerings.
ADVERTISING AND MARKETING
The Company mainly uses print advertising that emphasizes current fashion
apparel at value prices, as epitomized by Dress Barn's "fashion at a fraction"
slogan. The Company also uses direct mail programs, with six mailings during the
12 months ended January 25, 1997, each to approximately one million households
including its credit card holders. At the store level, the store supervisors
host local marketing programs, including fashion shows and in-store events
designed to create greater awareness of Dress Barn's merchandise. In addition,
the Company considers its credit card program to be a significant component in
the development of its targeted marketing efforts, enabling it to develop
segmented marketing programs.
MANAGEMENT INFORMATION SYSTEMS
In the past several years, the Company has made a significant investment in
technology to improve customer service, gain efficiencies and reduce operating
costs. Dress Barn has installed an IBM AS/400 management information system,
which integrates all major aspects of the Company's business, including sales,
distribution, purchasing, inventory control, merchandise planning and
replenishment, and financial systems. The Company is rolling out IBM 4694
point-of-sale systems with price look-up capabilities for both inventory and
sales transactions. These systems can accommodate substantial growth in
additional stores with minimal incremental investment. The Company has also
developed a laptop system that delivers up-to-date store-related information to
its regional sales managers.
The Company's merchandising system tracks merchandise from the inception of
the purchase order, through receipt at the distribution center, through the
distribution planning process, and ultimately to the point of sale. To monitor
the performance of various styles, management reviews sales and inventory levels
on-line, organized by department, class, vendor, style, color and store. The
system enables the Company to mark down slow-moving merchandise or efficiently
transfer it to stores selling such items more rapidly. Through sophisticated yet
inexpensive off-the-shelf systems, the Company analyzes historical hourly and
projected sales trends to efficiently schedule sales personnel, minimizing labor
costs while producing a higher
25
<PAGE> 26
level of customer service. The Company believes that such investments in
technology enhance operating efficiencies and position Dress Barn for future
growth.
COMPETITION
The women's retail apparel industry is highly competitive. The Company
competes primarily with department stores, off-price retailers, specialty
stores, discount stores and mass merchandisers, many of which have substantially
greater financial, marketing and other resources than the Company. Many
department stores offer a broader selection of merchandise than the Company. In
addition, many department stores have in the past been more promotional than
they are now and have reduced their selling prices, but the Company believes
this trend has stabilized. Also, certain of the Company's competitors and
vendors have opened outlet stores which offer off-price merchandise. The
Company's sales and results of operations may also be affected by close-outs and
going-out-of-business sales by other women's apparel retailers. Partially as a
result of such competition, apparel retailers have experienced price deflation
during the last several years. However, the Company believes that this trend has
begun to reverse in the past six months. The Company may face periods of strong
competition in the future which could have an adverse effect on its financial
results.
26
<PAGE> 27
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information with respect to the directors
and executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
-------------------------------------------- --- -----------------------------------
<S> <C> <C>
Elliot S. Jaffe............................. 70 Chairman of the Board of Directors
and Chief Executive Officer
Burt Steinberg.............................. 51 President, Chief Operating Officer
and Director
David R. Jaffe.............................. 37 Executive Vice President
Armand Correia.............................. 51 Senior Vice President and Chief
Financial Officer
Roslyn S. Jaffe............................. 68 Secretary, Treasurer and Director
Eric Hawn................................... 46 Senior Vice President
Klaus Eppler................................ 67 Director
Mark S. Handler............................. 63 Director
Donald Jonas................................ 67 Director
Edward D. Solomon........................... 65 Director
</TABLE>
Elliot S. Jaffe, Chairman of the Board and founder of the Company, has been
Chief Executive Officer since 1966. Mr. Jaffe also serves as a Director of the
National Retail Federation.
Burt Steinberg joined the Company in 1982, and has directed the Company's
merchandise activities since that time. Mr. Steinberg became Senior Vice
President in 1987 and President and Chief Operating Officer in 1989. Prior to
joining the Company, Mr. Steinberg was Executive Vice President of Merchandise
at Brooks Fashion Stores and was a Merchandise Manager with Abraham and Strauss,
a division of Federated Department Stores.
David R. Jaffe joined the Company in 1992 as Vice President of Business
Development, was named Senior Vice President of the Company in 1995 and
Executive Vice President in August 1996. Prior to joining the Company, Mr. Jaffe
was a General Partner of Chemical Venture Partners. Mr. Jaffe is the son of
Elliot S. and Roslyn S. Jaffe.
Armand Correia joined the Company in 1991 as Senior Vice President and
Chief Financial Officer. Prior to joining the Company, Mr. Correia was Senior
Vice President and Chief Financial Officer of both Hit or Miss, Inc. and
Chadwick's of Boston, Ltd., Inc., former divisions of TJX Companies, Inc., as
well as a Vice President of TJX Companies, Inc.
Roslyn S. Jaffe has been the Company's Secretary since 1966, Treasurer
since 1983 and a Director since 1966. Roslyn S. Jaffe is the spouse of Elliot S.
Jaffe.
Eric Hawn joined the Company in 1986 as Vice President -- Stores and became
Senior Vice President -- Stores in 1989. Prior to joining the Company, Mr. Hawn
was a Senior Vice President of Brooks Fashion Stores and was with The Limited,
Inc. for several years in various store management positions.
Klaus Eppler was elected a Director of the Company in 1993. Since 1965, Mr.
Eppler has been a partner in the law firm of Proskauer Rose Goetz & Mendelsohn
LLP, general counsel for the Company. He is also a director of Bed Bath & Beyond
Inc. and Inovision Corporation.
Mark S. Handler was elected a Director of the Company in 1996. Mr. Handler
was Co-Chairman and Co-Chief Executive Officer of R.H. Macy's, Inc. until 1993.
Previously, he was President and Chief Operating Officer of R.H. Macy's, Inc.
Donald Jonas was elected a Director of the Company in 1989. Mr. Jonas is
Chairman of the Board and Chief Executive Officer of Lechters, Inc., a retailer
of houseware products.
Edward D. Solomon was elected a Director of the Company in 1990. Mr.
Solomon is President of Edward D. Solomon & Co., which provides consulting
services primarily to the retailing industry. Until 1993, he was Chief Executive
Officer of Shoe-Town, Inc.
27
<PAGE> 28
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth certain information with respect to
beneficial ownership of the Common Stock as of May 1, 1997, and as adjusted to
reflect the sale of the Common Stock offered hereby, by: (i) the Selling
Shareholders; (ii) each person known by the Company to be the beneficial owner
of more than 5% of the Common Stock; (iii) each of the Company's directors; (iv)
each of the Company's other executive officers; and (v) the Company's directors
and executive officers as a group:
<TABLE>
<CAPTION>
SHARES OF COMMON SHARES OF COMMON
STOCK BENEFICIALLY SHARES STOCK BENEFICIALLY
OWNED BEFORE SALE TO BE OWNED AFTER SALE
UNDER THIS PROSPECTUS SOLD UNDER THIS PROSPECTUS
----------------------- --------- ------------------------
NAME OF SHAREHOLDER NUMBER PERCENTAGE NUMBER NUMBER PERCENTAGE
- ------------------------------------- --------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
DIRECTORS, EXECUTIVE OFFICERS AND
SELLING SHAREHOLDERS:
The Jaffe Family Foundation.......... 1,369,310 5.9% 1,000,000(1) 369,310 1.6%
Jaffe Family, L.P.................... 4,655,330 20.0 1,000,000 3,655,330 15.7
Elliot S. Jaffe(2)................... 6,280,476 27.0 -- 4,280,476 18.4
Roslyn S. Jaffe(3)................... 1,610,124 6.9 -- 610,124 2.6
Burt Steinberg(4).................... 468,615 2.0 -- 468,615 2.0
David R. Jaffe(5).................... 34,000 * -- 34,000 *
Armand Correia(6).................... 30,511 * -- 30,511 *
Eric Hawn(7)......................... 18,000 * -- 18,000 *
Edward D. Solomon.................... 1,000 * -- 1,000 *
Klaus Eppler......................... 300 * -- 300 *
Mark S. Handler...................... 250 * -- 250 *
Donald Jonas......................... 100 * -- 100 *
All Directors and Executive Officers 7,074,066 30.4 -- 5,074,066 21.8
as a group (consisting of 10
persons)(8)........................
* Represents less than 1% of class
OTHER BENEFICIAL OWNERS:
Charles M. Royce(9).................. 1,411,050 6.1 -- 1,411,050 6.1
Quest Advisory Corp.
1414 Avenue of the Americas
New York, NY 10019
Jeffrey N. Vinik(10)................. 1,266,800 5.4 -- 1,266,800 5.4
Vinik Partners, L.P.
260 Franklin Street
Boston, MA 02110
Michael S. Gordon(10)................ 1,266,800 5.4 -- 1,266,800 5.4
Vinik Partners, L.P.
260 Franklin Street
Boston, MA 02110
Mark D. Hostetter(10)................ 1,266,800 5.4 -- 1,266,800 5.4
Vinik Partners, L.P.
260 Franklin Street
Boston, MA 02110
</TABLE>
- ---------------
(1) Does not include 300,000 shares that the Underwriters have the option to
purchase to cover over-allotments, if any.
(2) Includes 173,336 shares owned directly by Elliot S. Jaffe, 6,024,640 shares
(25.9%) owned by the Selling Shareholders and 82,500 shares covered by
options that are exercisable within 60 days of May 1, 1997. Elliot S. Jaffe
and Roslyn S. Jaffe share voting and investing power with respect to the
shares owned by The Jaffe Family Foundation, a New York not-for-profit
corporation (the "Foundation"), and under the rules of the Commission are
deemed to be the beneficial owners of such shares. Both
28
<PAGE> 29
Elliot S. Jaffe and Roslyn S. Jaffe disclaim beneficial ownership of the
shares owned by the Foundation. Elliot S. Jaffe has voting and investment
power with respect to the shares owned by the Jaffe Family, L.P., a
Connecticut limited partnership (the "Partnership"), and under the rules of
the Commission is deemed to be the beneficial owner of such shares. His
business address is 30 Dunnigan Drive, Suffern, New York 10901.
(3) Includes 240,814 shares (1.0%) owned directly by Roslyn S. Jaffe and
1,369,310 shares (5.9%) owned by the Foundation. See Footnote (1) above.
(4) Includes 185,615 shares owned directly by Mr. Steinberg and 283,000 shares
covered by options that are exercisable within 60 days of May 1, 1997.
(5) Includes 10,000 shares owned directly by Mr. Jaffe and 24,000 shares
covered by options that are exercisable within 60 days of May 1, 1997.
(6) Includes 6,000 shares owned directly by Mr. Correia and 24,511 shares
covered by options that are exercisable within 60 days of May 1, 1997.
(7) Includes 10,000 shares owned directly by Mr. Hawn and 8,000 shares covered
by options that are exercisable within 60 days of May 1, 1997.
(8) Includes shares owned by the Partnership and the Foundation as well as
422,011 shares covered by options held by the executive officers that are
exercisable within 60 days of May 1, 1997.
(9) Information regarding Mr. Charles M. Royce, Quest Advisory Corp. ("Quest")
and Quest Management Corp. ("QMC") was obtained solely from a Schedule 13G
dated February 7, 1997, filed by Mr. Royce, Quest and QMC with the SEC, a
copy of which was sent to the Company. Such Schedule 13G states that Quest
has the sole power to vote and dispose of 1,337,650 shares, that QMC has
the sole power to vote and dispose of 73,400 shares, that Mr. Royce may be
deemed to be a controlling person of Quest and QMC and as such may be
deemed to beneficially own the shares owned by Quest and QMC, and that Mr.
Royce does not own any shares outside of Quest and QMC and disclaims
beneficial ownership of the shares held by Quest and QMC.
(10) Information regarding Mr. Jeffrey N. Vinik, Mr. Michael S. Gordon and Mr.
Mark D. Hostetter was obtained solely from a Schedule 13D dated March 12,
1997, filed by VGH Partners, L.L.C., Vinik Partners, L.P., Vinik Asset
Management, L.P., Jeffrey N. Vinik, Michael S. Gordon, Mark D. Hostetter
and Vinik Asset Management, L.L.C. Such 13D states that VGH Partners,
L.L.C. and Vinik Partners, L.P. have the shared power to vote and dispose
of 527,600 shares, that Vinik Asset Management, L.P. and Vinik Asset
Management, L.L.C. have the shared power to vote and dispose of 739,200
shares, and Jeffrey N. Vinik, Michael S. Gordon and Mark D. Hostetter have
the shared power to vote and dispose of 1,266,800 shares.
29
<PAGE> 30
UNDERWRITING
The underwriters named below (the "Underwriters"), for whom Bear, Stearns &
Co. Inc. and Robertson, Stephens & Company LLC are acting as representatives
(the "Representatives"), have severally agreed, subject to the terms and
conditions of an Underwriting Agreement (the "Underwriting Agreement"), a form
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part, to purchase from the Selling Shareholders the number
of Shares set forth opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER OF
NAME OF UNDERWRITERS SHARES
------------------------------------------------------------------ ---------
<S> <C>
Bear, Stearns & Co. Inc...........................................
Robertson, Stephens & Company LLC.................................
---------
Total................................................... 2,000,000
=========
</TABLE>
The nature of the obligations of the Underwriters is such that all of the
Shares must be purchased if any are purchased. Those obligations are subject,
however, to various conditions, including the approval of certain matters by
counsel. The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act and, if such indemnification is unavailable, to contribute to
payments that the Underwriters may be required to make in respect of such
liabilities.
The Company has been advised that the Underwriters propose to offer the
Shares initially at the public offering price set forth on the cover page of
this Prospectus and to certain dealers at such price less a concession not to
exceed $ per share; that the Underwriters may allow, and such dealers
may reallow, a concession to certain other dealers not to exceed $ per
share; and that after the commencement of the Offering, the public offering
price and the concessions may be changed.
The Jaffe Family Foundation, one of the Selling Shareholders, has granted
the Underwriters an option to purchase up to 300,000 additional shares of Common
Stock solely to cover over-allotments, if any. The option may be exercised in
whole or in part at any time and from time to time within 30 days after the date
of this Prospectus. To the extent such option is exercised, the Underwriters
will be severally committed, subject to certain conditions, to purchase the
additional shares in proportion to their respective purchase commitments as
indicated in the preceding table.
The Company, the Selling Shareholders and certain other shareholders of the
Company have agreed that, for a period of 90 days after the date of this
Prospectus, they will not, without the prior written consent of Bear, Stearns &
Co. Inc., sell, offer to sell or otherwise dispose of any shares, or any
securities convertible into or exchangeable or exercisable for any shares of
Common Stock, other than the sale of the Shares offered hereby and the issuance
of options and shares of Common Stock upon exercise of options pursuant to the
Company's existing stock option plans.
In order to facilitate the Offering, certain persons participating in the
Offering may engage in transactions that stabilize, maintain, or otherwise
affect the price of the Common Stock during and after the Offering.
Specifically, the Underwriters may over-allot or otherwise create a short
position in the Common Stock for their own account by selling more shares of
Common Stock than have been sold to them by the Selling Shareholders. The
Underwriters may elect to cover any such short position by purchasing shares of
Common Stock in the open market or by exercising the over-allotment option
granted to the Underwriters. In addition, such persons may stabilize or maintain
the price of the Common Stock by bidding for or purchasing shares of Common
Stock in the open market and may impose penalty bids, under which selling
concessions allowed to syndicate members or other broker-dealers participating
in the Offering are reclaimed if shares of Common
30
<PAGE> 31
Stock previously distributed in the Offering are repurchased in connection with
stabilization transactions or otherwise. The effect of these transactions may be
to stabilize or maintain the market price of the Common Stock at a level above
that which might otherwise prevail in the open market. The imposition of a
penalty bid may also affect the price of the Common Stock to the extent that it
discourages resales thereof. No representation is made as to the magnitude or
effect of any such stabilization or other transactions. Such transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.
In addition, certain persons participating in this Offering may also engage
in passive market making transactions in the Common Stock on the Nasdaq National
Market. Passive market making consists of displaying bids on the Nasdaq National
Market limited by the prices of independent market makers and effecting
purchases limited by such prices and in response to order flow. Rule 103 of
Regulation M promulgated by the Commission limits the amount of net purchases
that each passive market maker may make and the displayed size of each bid.
Passive market making may stabilize the market price of the Common Stock at a
level above that which might otherwise prevail in the open market and, if
commenced, may be discontinued at any time.
The Company has engaged Peter J. Solomon Securities Company Limited
("PJSS") to provide advisory services to the Company. In connection with the
Offering, the Representatives have agreed to pay PJSS a fee and expenses of
$162,500 and the Company has agreed to pay PJSS a fee and expenses of $62,500.
LEGAL MATTERS
The validity of the Shares has been passed upon for the Company by
Proskauer Rose Goetz & Mendelsohn LLP, New York, New York. Klaus Eppler, Esq., a
partner of Proskauer Rose Goetz & Mendelsohn LLP, is a Director of the Company.
Certain legal matters relating to the Offering will be passed upon for the
Underwriters by Latham & Watkins, New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended July 27, 1996 have
been audited by Deloitte & Touche LLP, independent public accountants, as stated
in their report, which is incorporated herein by reference, and has been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
31
<PAGE> 32
======================================================
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED BY THE COMPANY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY,
THE SELLING SHAREHOLDERS OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL, OR
A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING THE
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. UNDER NO CIRCUMSTANCES SHALL THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER CREATE ANY IMPLICATION
THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-------
<S> <C>
Available Information................. 3
Information Incorporated by
Reference........................... 3
Prospectus Summary.................... 4
Risk Factors.......................... 9
Use of Proceeds....................... 12
Capitalization........................ 12
Selected Consolidated Financial
Data................................ 13
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 14
Business.............................. 18
Management............................ 27
Principal and Selling Shareholders.... 28
Underwriting.......................... 30
Legal Matters......................... 31
Experts............................... 31
</TABLE>
======================================================
======================================================
2,000,000 SHARES
[DRESS BARN LOGO]
COMMON STOCK
--------------------
PROSPECTUS
--------------------
BEAR, STEARNS & CO. INC.
ROBERTSON, STEPHENS & COMPANY
, 1997
======================================================
<PAGE> 33
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses in connection with the
registration of the securities described in this Registration Statement,
approximately $170,000 of which are payable by the Selling Shareholders and
approximately $220,000 of which are payable by the Company. All amounts shown
are estimates except the Securities and Exchange Commission registration fee and
the NASD filing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............... $ 9,890
NASD filing fee................................................... 3,764
Accounting Fees and Expenses...................................... 60,000
Legal fees and expenses........................................... 150,000
Printing Expenses................................................. 70,000
Miscellaneous..................................................... 96,346
--------
Total................................................... $390,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's amended and restated Certificate of Incorporation (the
"Charter") provides that the Registrant shall indemnify, to the fullest extent
permitted by Section 33-320a of the Connecticut Stock Corporation Act (the
"Connecticut Act"), any director, officer or shareholder of the Registrant. Such
Section generally provides that, subject to certain exceptions and conditions, a
Connecticut corporation shall indemnify its directors, officers and shareholders
against liability with respect to certain specified actions, suits or
proceedings, if such persons are successful on the merits in defending such
actions, suits or proceedings, or acted in good faith and in a manner they
reasonably believed to be in the best interest of the corporation, or if a court
determines such persons are fairly and reasonably entitled to be indemnified.
The Charter also provides, as permitted by Section 33-290(c) of the
Connecticut Act, that no person who is or was a director of the Registrant shall
be personally liable to the Registrant or its shareholders for monetary damages
for breach of duty as a director in an amount that exceeds the compensation
received by the director for serving the Registrant during the year of the
violation, subject to certain exceptions.
The Registrant also maintains directors' and officers' liability insurance
insuring, with certain exceptions and conditions, the Registrant's directors and
officers in their capacity as such against liability with respect to certain
specified proceedings.
The Connecticut legislature has enacted the Connecticut Business
Corporation Act (the "CBCA"). The CBCA became effective on January 1, 1997,
replacing the Connecticut Stock Corporation Act. Under the new CBCA, the extent
to which indemnification is permitted will be similar to existing law, although
it allows broader indemnification for non-director officers to an extent
consistent with public policy. Indemnification is no longer mandatory (except in
certain narrow circumstances). Instead, the CBCA sets the limit of
indemnification allowed under certain circumstances, and prescribes the
procedure under which corporations are to make determinations as to
indemnification. Corporations in existence before January 1, 1997, such as the
registrant, are subject to a grandfather clause under which they still have to
provide the maximum indemnification allowable under the CBCA, unless amendments
to their charters provide otherwise. The CBCA also authorizes corporations to
provide insurance coverage even against liability for which indemnification is
not allowed.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Registrant
pursuant to the foregoing provisions, the Registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
II-1
<PAGE> 34
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF EXHIBIT
- ------------ --------------------------------------------------------------------------------
<S> <C>
1.1 -- Underwriting Agreement
4.1 -- Amended and Restated Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3(c) to the registrant's Registration Statement on Form
S-1, Registration No. 2-82916)
4.2 -- Amended and Restated By-Laws, as amended (incorporated by reference to Exhibit
3(e) to the registrant's Registration Statement on Form S-1, Registration No.
2-82916)
4.3 -- Amendments to Amended and Restated Certificate of Incorporation (incorporated by
reference to the registrant's Annual Report on Form 10-K for the fiscal year
ended July 30, 1988)
4.4 -- Amendments to Amended and Restated By-Laws (incorporated by reference to the
registrant's Annual Report on Form 10-K for the fiscal year ended July 30, 1988)
4.5 -- Amendments to Amended and Restated By-Laws (incorporated by reference to the
registrant's Annual Report on Form 10-K for the fiscal year ended July 28, 1990)
5.1 -- Opinion of Proskauer Rose Goetz & Mendelsohn LLP, New York, New York
23.1 -- Consent of Proskauer Rose Goetz & Mendelsohn LLP, New York, New York -- included
in Exhibit 5.1
23.2 -- Consent of Deloitte & Touche LLP
24 -- Power of Attorney -- included on signature page filed on April 17, 1997
</TABLE>
(b) FINANCIAL STATEMENT SCHEDULES: Schedules not listed above have been
omitted because they are not applicable or are not required or the information
required to be set forth therein is included in the financial statements or
notes thereto.
ITEM 17. UNDERTAKINGS
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) 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 Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(i) 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
II-2
<PAGE> 35
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 under 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 the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<PAGE> 36
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF SUFFERN, STATE OF NEW YORK, ON THE
12TH DAY OF MAY, 1997.
THE DRESS BARN, INC.
By: /s/ Elliot S. Jaffe
---------------------------------
Elliot S. Jaffe
Chairman of the Board and
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ ------------------------------------ ---------------
<C> <S> <C>
/s/ Elliot S. Jaffe Chairman of the Board and Chief May 12, 1997
- ------------------------------------------ Executive Officer (Principal
Elliot S. Jaffe Executive Officer)
* President, Chief Operating Officer May 12, 1997
- ------------------------------------------ and Director
Burt Steinberg
* Senior Vice President and Chief May 12, 1997
- ------------------------------------------ Financial Officer (Principal
Armand Correia Financial Officer and Principal
Accounting Officer)
* Secretary, Treasurer and Director May 12, 1997
- ------------------------------------------
Roslyn S. Jaffe
* Director May 12, 1997
- ------------------------------------------
Klaus Eppler
* Director May 12, 1997
- ------------------------------------------
Mark S. Handler
* Director May 12, 1997
- ------------------------------------------
Donald Jonas
* Director May 12, 1997
- ------------------------------------------
Edward D. Solomon
*By: /s/ ELLIOT S. JAFFE
- ------------------------------------------
Elliot S. Jaffe
Attorney-in-fact
</TABLE>
II-4
<PAGE> 1
DRAFT
2,000,000 Shares of Common Stock
The Dress Barn, Inc.
UNDERWRITING AGREEMENT
May __, 1997
BEAR, STEARNS & CO. INC.
ROBERTSON, STEPHENS & COMPANY LLC
as Representatives of the
several Underwriters named in
Schedule II attached hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
Ladies and Gentlemen:
The shareholders named in Schedule I hereto (together, the
"Selling Shareholders") propose, subject to the terms and conditions stated
herein, to sell to the several underwriters named in Schedule II hereto (the
"Underwriters") an aggregate of 2,000,000 shares (the "Firm Shares") of common
stock, par value $.05 per share (the "Common Stock"), of The Dress Barn, Inc., a
Connecticut corporation (the "Company"), and, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, The Jaffe Family
Foundation proposes to grant to the Underwriters an option to purchase up to
300,000 additional shares (the "Additional Shares") of Common Stock. The Firm
Shares and any Additional Shares purchased by the Underwriters are referred to
herein as the "Shares." The Shares are more fully described in the Registration
Statement referred to below.
1. Representations and Warranties of the Company and Selling
Shareholders.
(a) The Company and the Jaffe Family, L.P. jointly and severally
represent and warrant to, and agree with, the Underwriters that:
<PAGE> 2
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and may have filed an
amendment or amendments thereto, on Form S-3 (File No. 333-25377), for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to Rule 430A or Rule 434 of the Rules and Regulations of
the Commission under the Act (the "Regulations"), is herein called the
"Registration Statement," and the prospectus, in the form first filed with the
Commission pursuant to Rule 424(b) of the Regulations or filed as part of the
Registration Statement at the time of effectiveness if no Rule 424(b) or Rule
434 filing is required or made, is herein called the "Prospectus." The term
"preliminary prospectus" as used herein means a preliminary prospectus as
described in Rule 430 of the Regulations. Any reference herein to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the effective date of
the Registration Statement, the date of such preliminary prospectus or the date
of the Prospectus, as the case may be, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to refer to and
include (A) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date of such preliminary
prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (B) any such document so filed.
(ii) At the time of the effectiveness of the Registration Statement
or the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
Rule 424(b) or Rule 434 of the Regulations, when any supplement to or amendment
of the Prospectus is filed with the Commission, when any document filed under
the Exchange Act is filed and at the Closing Date (as hereinafter defined) and
any Additional Closing Date (as hereinafter defined), the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto complied
or will comply in all material respects with the applicable provisions of the
Act and the Regulations and the Exchange Act and the respective rules and
regulations thereunder and does not or will not contain an untrue statement of a
material fact and does not or will not omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (A) in
the case of the Registration Statement, not misleading and (B) in the case of
the Prospectus, in the light of the circumstances under which they were made,
not misleading. When any related preliminary prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Regulations) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and did not contain an untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. No representation and warranty is made in this subsection (ii),
however, with respect to any information contained in the Registration Statement
or the Prospectus or any related preliminary prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter through
you as herein stated expressly for use in connection with the preparation
thereof.
(iii) The Company and each of D.B.R., Inc. and D.B.X. Inc.
(together, the "Significant Subsidiaries") has been duly organized and is
validly existing as a
2
<PAGE> 3
corporation in good standing under the laws of its jurisdiction of
incorporation. The Company and each of the Significant Subsidiaries is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which the character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification necessary. The
Company and each of the Significant Subsidiaries has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease and operate its
properties and conduct its business as now being conducted and as described in
the Registration Statement and the Prospectus, and no such consent, approval,
authorization, order, registration, qualification, license or permit contains a
materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.
(iv) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Company and this Agreement has been duly
and validly executed and delivered by the Company.
(v) Neither the Company nor any of the Significant Subsidiaries is
in violation of its respective certificate of incorporation or by-laws or in
default in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct of its business
to which it is a party or by which it or any of its property is bound.
(vi) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (A)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of the Significant Subsidiaries pursuant to, any agreement, instrument,
franchise, license or permit to which the Company or any of the Significant
Subsidiaries are a party or by which any of such entities or their respective
properties or assets may be bound or (B) violate or conflict with any provision
of the certificate of incorporation, by-laws or other organizational documents
of the Company or any of the Significant Subsidiaries or any judgment, decree,
order, statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of the
Significant Subsidiaries. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
the Company or any of the Significant Subsidiaries is required for the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, including the sale and delivery of the Shares,
except the registration under the Act of the Shares and such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by the
Underwriters.
(vii) The Shares, when delivered and sold in accordance with this
Agreement, will be duly and validly authorized, issued and outstanding, fully
paid and nonassessable, and will not have been issued in violation of or be
subject to any preemptive rights. The Company had, at January 25, 1997, an
authorized and outstanding capitalization as set forth in the Registration
Statement and the Prospectus. The Common Stock, the Firm Shares and the
Additional Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(viii) Except as described in the Prospectus, there are no
outstanding (A) shares of capital stock of the Company or securities or
obligations of the Company convertible into or
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exchangeable or exercisable for any such capital stock, (B) warrants, rights or
options to subscribe for or purchase from the Company any such capital stock or
any such convertible or exchangeable securities or obligations or (C)
obligations of the Company to issue such shares, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or options.
(ix) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, there has been no material
adverse change in the business, prospects, properties, operations, condition
(financial or other) or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions in the
ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, which are material to the Company and its
subsidiaries taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement and the Prospectus.
(x) To the best of the Company's knowledge, Deloitte & Touche LLP,
who have certified the financial statements and supporting schedules included in
the Registration Statement, are independent public accountants as required by
the Act and the Regulations.
(xi) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the Prospectus
present fairly in all material respects the financial position of the Company as
of the dates indicated and the results of its operations for the periods
specified; except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; and the supporting
schedules included in the Registration Statement present fairly in all material
respects the information required to be stated therein.
(xii) Except as described in the Prospectus, there is no litigation
or governmental proceeding to which the Company or any of its subsidiaries is a
party or to which any property of the Company or any of its subsidiaries is
subject or which is pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries which might have a material
adverse effect on the business, prospects, properties, operations, condition
(financial or other) or results of operations of the Company and its
subsidiaries taken as a whole or which is required to be disclosed in the
Registration Statement and the Prospectus (a "Material Adverse Effect").
(xiii) The Company and each of the Significant Subsidiaries has
good and marketable title to all property and assets described in the
Registration Statement as being owned by it free and clear of all liens, claims,
encumbrances and restrictions that, singly or in the aggregate, might have a
Material Adverse Effect or might materially interfere with the use made by the
Company or such subsidiary. All leases to which the Company or any the
Significant Subsidiaries is a party are valid and binding and no default has
occurred or is continuing thereunder that, singly or in the aggregate, might
have a Material Adverse Effect, and the Company and the Significant Subsidiaries
enjoy peaceful and undisturbed possession under all such leases to which any of
them is a party as lessee with such exceptions as do not materially interfere
with the use made by the Company or such subsidiary.
(xiv) Neither the Company nor any of the Significant Subsidiaries
has violated any foreign, federal, state or local law or regulation relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
nor any federal or state law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable federal or state wages and
hours laws, nor any provisions of the Employee Retirement
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<PAGE> 5
Income Security Act or the rules and regulations promulgated thereunder, which
in each case, singly or in the aggregate, might have a Material Adverse Effect.
(xv) There is no alleged liability, or to the best knowledge of the
Company, potential liability (including, without limitation, alleged or
potential liability or investigatory costs, cleanup costs, governmental response
costs, natural resource damages, property damages, personal injuries or
penalties) of the Company or any of the Significant Subsidiaries arising out of,
based on or resulting from (A) the presence or release into the environment of
any Hazardous Material (as defined below) at any location, whether or not owned
by the Company or any such subsidiary or (B) any violation or alleged violation
of any Environmental Law, which alleged or potential liability is required to be
disclosed in the Prospectus, other than as disclosed therein, or might, singly
or in the aggregate have a Material Adverse Effect. The term "Hazardous
Material" means (A) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, (B)
any "hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other law relating to protection of human health or the environment or
imposing liability or standards of conduct concerning any such chemical
material, waste or substance.
(xvi) Neither the Company nor any person acting on behalf of the
Company has taken or will take, directly or indirectly, any action designed to
cause or result in, or which constitutes or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Shares.
(xvii) No holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(xviii) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(xix) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(xx) Except for the Significant Subsidiaries, no subsidiary of the
Company has any material operations, assets or liabilities.
(xxi) The Shares are listed on the Nasdaq National Market.
(b) Each Selling Shareholder, severally and not jointly, represents and
warrants to, and agrees with, the several Underwriters that:
(i) At the time of the effectiveness of the Registration Statement
or the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
Rule 424(b) or Rule 434 of the Regulations, when any supplement to or amendment
of the Prospectus is filed with the Commission, when any document filed under
the Exchange Act is filed and at the Closing Date (as hereinafter defined) and
any Additional Closing Date (as hereinafter defined), the Registration Statement
and the Prospectus and any amendments thereof and
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<PAGE> 6
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and does not or will not contain
an untrue statement of a material fact and does not or will not omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein (A) in the case of the Registration Statement, not
misleading and (B) in the case of the Prospectus, in the light of the
circumstances under which they were made, not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the registration statement for the registration of the Shares or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not contain an untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and warranties made in
this subsection (i), however, shall relate only to information contained in the
Registration Statement or the Prospectus or any related preliminary prospectus
or any amendment thereof or supplement thereto in reliance upon or in conformity
with information furnished in writing to the Company by or on behalf of such
Selling Shareholder.
(ii) This Agreement and the transactions contemplated herein have
been duly and validly authorized by such Selling Shareholder and this Agreement
has been duly and validly executed and delivered by such Selling Shareholder.
(iii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (A)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of such Selling
Shareholder pursuant to, any agreement, instrument, franchise, license or permit
to which such Selling Shareholder is a party or by which such Selling
Shareholder or its properties or assets may be bound or (B) violate or conflict
with any provision of the organizational documents of such Selling Shareholder
or any judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having jurisdiction over such
Selling Shareholder or any of its properties or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any public, governmental or regulatory agency or body
having jurisdiction over such Selling Shareholder or any of its properties or
assets is required for the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby, including the sale
and delivery of the Shares, except the registration under the Act of the Shares
and such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters.
(iv) Neither such Selling Shareholder, nor any person acting on
behalf of such Selling Shareholder, has taken or will take, directly or
indirectly, any action designed to cause or result in, or which constitutes or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares.
(v) Such Selling Shareholder has been duly organized and is
validly existing as a limited partnership in good standing under the laws of
Connecticut or as a not-for-profit corporation in good standing under the laws
of New York, as the case may be.
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<PAGE> 7
(vi) Such Selling Shareholder is the lawful owner of the Shares to
be sold by it pursuant to this Agreement and has, and on the Closing Date (and
Additional Closing Date, if applicable) will have, good and clear title to such
Shares, free of all restrictions on transfer, liens, encumbrances, security
interests and claims whatsoever.
(vii) Upon delivery of and payment for the Shares to be sold by
such Selling Shareholder pursuant to this Agreement, good and clear title to
such Shares will pass to the Underwriters, free of all restrictions on transfer,
liens, encumbrances, security interests and claims whatsoever.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Selling Shareholders agree to sell to the Underwriters and the
Underwriters, severally and not jointly, agree to purchase from the Selling
Shareholders, at a purchase price per share of $___________, the number of Firm
Shares set forth opposite the respective names of the Underwriters in Schedule I
hereto plus any additional number of Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price and delivery of certificates for
the Shares shall be made at the office of Latham & Watkins, 885 Third Avenue,
New York, New York 10022, or at such other place as shall be agreed upon by you
and the Selling Shareholders, at 10:00 A.M. on the third or fourth business day
(as permitted under Rule 15c6-1 under the Exchange Act) (unless postponed in
accordance with the provisions of Section 9 hereof) following the date of the
effectiveness of the Registration Statement (or, if the Company has elected to
rely upon Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the determination of
the initial public offering price of the Shares), or such other time not later
than ten business days after such date as shall be agreed upon by you and the
Selling Shareholders (such time and date of payment and delivery being herein
called the "Closing Date"). Payment shall be made to the Selling Shareholders by
wire transfer in same day funds, against delivery to you for the respective
accounts of the Underwriters of certificates for the Shares to be purchased by
them. Certificates for the Shares shall be registered in such name or names and
in such authorized denominations as you may request in writing at least two
business days prior to the Closing Date. The Company and the Selling
Shareholders will permit you to examine and package such certificates for
delivery at least one business day prior to the Closing Date.
(c) In addition, The Jaffe Family Foundation hereby grants to the
Underwriters an option to purchase up to 300,000 Additional Shares at the same
purchase price per share to be paid by the Underwriters to the Selling
Shareholders for the Firm Shares as set forth in this Section 2, for the sole
purpose of covering over-allotments in the sale of Firm Shares by the
Underwriters. This option may be exercised at any time in whole or up to three
times in part on or before the 30th day following the date of the Prospectus, by
written notice by you to the Company and the Jaffe Family Foundation. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised and the date and time, as reasonably determined by
you, when the Additional Shares are to be delivered (each such date and time
being herein sometimes referred to as an "Additional Closing Date"); provided,
however, that an Additional Closing Date shall not be earlier than the Closing
Date or earlier than the second full business day after the date on which the
option shall have been exercised or later than the eighth full business day
after the date on which the option shall have been exercised (unless such time
and date are postponed in accordance with the provisions of Section 9 hereof).
Certificates for the Additional Shares shall be registered in such name or names
and in such authorized denominations as you may request in writing at
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<PAGE> 8
least two business days prior to each Additional Closing Date. The Company and
the Jaffe Family Foundation will permit you to examine and package such
certificates for delivery at least one business day prior to the Additional
Closing Date.
The number of Additional Shares to be sold to each Underwriter on
each Additional Closing Date shall be the number which bears the same ratio to
the aggregate number of Additional Shares being purchased on such Additional
Closing Date as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to 2,000,000, subject, however, to such adjustments to
eliminate any fractional shares as you in your sole discretion shall make.
Payment for the Additional Shares shall be made by wire transfer in
same day funds at the offices of Latham & Watkins, 885 Third Avenue, New York,
New York 10022, or such other location as may be mutually acceptable, upon
delivery of the certificates for the Additional Shares to you for the respective
accounts of the Underwriters.
3. Offering. Upon your authorization of the release of the Firm
Shares, the Underwriters propose to offer the Shares for sale and distribution
to the public upon the terms set forth in the Prospectus.
4. Covenants of the Company and Selling Shareholders.
(a) The Company covenants and agrees with the Underwriters that:
(i) If the Registration Statement has not yet been declared
effective, the Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
possible, and if Rule 430A is used or the filing of the Prospectus is otherwise
required under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) or Rule
434 within the prescribed time period and will provide evidence satisfactory to
you of such timely filing.
The Company will notify you immediately (and, if requested by
you, will confirm such notice in writing) (A) when the Registration Statement
and any amendments thereto become effective, (B) of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (C) of the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (D) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or of the initiation, or the threatening,
of any proceedings therefor, (E) of the receipt of any comments from the
Commission and (F) of the receipt of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for that purpose. If the
Commission shall propose or enter a stop order at any time, the Company will use
its best efforts to prevent the issuance of any such stop order and, if issued,
to obtain the lifting of such order as soon as possible. The Company will not
file any amendment to the Registration Statement or any amendment of or
supplement to the Prospectus (including the prospectus required to be filed
pursuant to Rule 424(b) or Rule 434) that differs from the prospectus on file at
the time of the effectiveness of the Registration Statement before or after the
effective date of the Registration Statement or file any document under the
Exchange Act if such document would be deemed to be incorporated by reference
into the Prospectus to which you shall reasonably object in writing after being
timely furnished in advance a copy thereof.
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<PAGE> 9
(ii) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would, in the
judgment of the Representatives or counsel to the Underwriters, include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it shall
be necessary at any time to amend or supplement the Prospectus or Registration
Statement to comply with the Act or the Regulations, or to file under the
Exchange Act so as to comply therewith any document incorporated by reference in
the Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, the Company will notify you promptly and prepare and file
with the Commission an appropriate amendment or supplement (in form and
substance satisfactory to you) which will correct such statement or omission or
which will effect such compliance and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as possible.
(iii) The Company will promptly deliver to you two signed copies
of the Registration Statement, including exhibits and all documents incorporated
by reference therein and all amendments thereto, and the Company will promptly
deliver to each of the Underwriters such number of copies of any preliminary
prospectus, the Prospectus, the Registration Statement and all amendments of and
supplements to such documents, if any, and all documents incorporated by
reference in the Registration Statement and Prospectus or any amendment thereof
or supplement thereto as you may reasonably request.
(iv) The Company will endeavor in good faith, in cooperation
with you, at or prior to the time of effectiveness of the Registration
Statement, to qualify the Shares for offering and sale under the securities laws
relating to the offering or sale of the Shares of such jurisdictions as you may
designate and to maintain such qualification in effect for so long as required
for the distribution thereof; provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction where it is
not so qualified.
(v) The Company will make generally available (within the
meaning of Section 11 (a) of the Act) to its security holders and to you as soon
as practicable, but not later than 90 days after the end of its fiscal quarter
in which the first anniversary date of the effective date of the Registration
Statement occurs, an earning statement (in form complying with the provisions of
Rule 158 of the Regulations) covering a period of at least twelve consecutive
months beginning after the effective date of the Registration Statement.
(vi) The Company will obtain the undertaking of each of its
executive officers and directors named in the Prospectus and Elise Jaffe that
during the period of 90 days from the date of the Prospectus, such
aforementioned persons will not without your prior written consent, issue, sell,
offer or agree to sell, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, any shares of Common Stock (or any securities
convertible into or exercisable or exchangeable for Common Stock), on their own
behalf, other than the Company's issuance of Common Stock upon the exercise of
presently outstanding stock options.
(vii) During a period of three years from the effective date of
the Registration Statement, the Company will furnish to you copies of (A) all
reports to its shareholders and (B) all reports, financial statements and
proxy or information statements filed by the Company with the Commission or any
national securities exchange.
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<PAGE> 10
(viii) The Company, during the period when the Prospectus is
required to be delivered under the Act or the Exchange Act, will file all
documents required to be filed with the Commission pursuant to Section 13, 14 or
15 of the Exchange Act within the time periods required by the Exchange Act and
the rules and regulations thereunder.
(b) Each Selling Shareholder covenants and agrees with the
Underwriters that during the period of 90 days from the date of the Prospectus,
it will not without your prior written consent, sell, offer or agree to sell,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of Common Stock (or any securities convertible into or
exercisable or exchangeable for Common Stock) other than such Selling
Shareholder's sale of Shares hereunder.
5. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company and the Selling Shareholders hereby agree to pay all costs and
expenses incident to the performance of the obligations of the Company and the
Selling Shareholders hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any preliminary prospectus, the Prospectus and any amendments
or supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), and all other documents related to the
public offering of the Shares (including those supplied to the Underwriters in
quantities as hereinabove stated), (ii) the transfer and delivery of the Shares
to the Underwriters, including any transfer or other taxes payable thereon,
(iii) the qualification of the Shares under state or foreign securities or Blue
Sky laws, including the costs of printing and mailing a preliminary and final
Blue Sky Memoranda and the reasonable fees of counsel for the Underwriters and
such counsel's reasonable disbursements in relation thereto, (v) filing fees of
the Commission and the National Association of Securities Dealers, Inc., (vi)
the cost of printing certificates representing the Shares and (vii) the cost and
charges of any transfer agent or registrar.
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Selling Shareholders herein contained, as of
the date hereof and as of the Closing Date (for purposes of this Section 6,
"Closing Date" shall refer to the Closing Date for the Firm Shares and any
Additional Closing Date, if different, for the Additional Shares), to the
absence from any certificates, opinions, written statements or letters furnished
to you or to Latham & Watkins ("Underwriters' Counsel") pursuant to this Section
6 of any misstatement or omission, to the performance by the Company and the
Selling Shareholders of their obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M., New York time, on the date of this Agreement, or at such
later time and date as shall have been consented to in writing by you; if the
Company shall have elected to rely upon Rule 430A or Rule 434 of the
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) hereof, and, at or prior to the
Closing Date no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the opinion of
Proskauer Rose Goetz & Mendelsohn LLP, counsel for the Company and the Selling
Shareholders, dated the Closing Date addressed to the Underwriters and in form
and substance satisfactory to Underwriters' Counsel, to the effect that:
(i) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or incorporated
by reference therein, as to which no opinion need be rendered) comply as to
form in all material respects with the requirements of the Act and the
Regulations. The documents filed under the Exchange Act and incorporated by
reference in the Registration
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Statement and the Prospectus or any amendment thereof or
supplement thereto (other than the financial statements and schedules and
other financial data included or incorporated by reference therein, as to
which no opinion need be rendered) when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder.
(ii) The Registration Statement is effective under the Act, and, to
the knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof has
been issued and no proceedings therefor have been initiated or threatened
by the Commission and all filings required by Rule 424(b) of the
Regulations have been made.
(iii) The Company and each Significant Subsidiary has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. The Company and each
Significant Subsidiary, as to states other than Connecticut, New York and
Delaware, based solely on certificates of corporate officials, copies of
which have been furnished to you, is duly qualified and in good standing as
a foreign corporation in each jurisdiction listed in such certificate,
which certificate shall indicate that such jurisdictions are the only
jurisdictions in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except where the failure to be so qualified or in
good standing, singly or in the aggregate, would not have a Material
Adverse Effect. The Company and each Significant Subsidiary has all
requisite corporate authority to own, lease and license its respective
properties and conduct its business as now being conducted and as described
in the Registration Statement and the Prospectus. All of the issued and
outstanding capital stock of each Significant Subsidiary has been duly and
validly issued and is fully paid and nonassessable and was not issued in
violation of preemptive rights and is held directly or indirectly by the
Company, free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, shareholders' agreement, voting trust or other
defect of title known to such counsel.
(iv) This Agreement has been duly and validly authorized, executed
and delivered by the Company and each Selling Shareholder.
(v) To such counsel's knowledge, neither the Company nor any of the
Significant Subsidiaries is in violation of its respective certificate of
incorporation or by-laws or in default in the performance of any
obligation, agreement or condition contained in any agreement, indenture or
instrument filed as an exhibit to the Company's Annual Report on Form 10-K
for the year ended July 27, 1996, or to any other report or document
subsequently filed with the Commission pursuant to the Act or the Exchange
Act.
(vi) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby by the Company and
the Selling Shareholders do not and will not (A) conflict with or result in
a breach of any of the terms and provisions of, or constitute a default (or
an event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company, any of the
Significant Subsidiaries or either of the Selling Shareholders pursuant to
any agreement, instrument, franchise, license or permit known to such
counsel to which the Company, any of the Significant Subsidiaries or either
of the Selling Shareholders is a party or by which any of such corporations
or their respective
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properties or assets may be bound or (B) violate or conflict with any
provision of the certificate of incorporation or by-laws of the Company,
any of the Significant Subsidiaries or either of the Selling Shareholders
or, to the best knowledge of such counsel, any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company, any of the
Significant Subsidiaries or either of the Selling Shareholders or any of
their respective properties or assets. Under the Federal laws of the United
States, the laws of State of New York and the laws of the State of
Connecticut, no consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any
public, governmental or regulatory agency or body having jurisdiction over
the Company, any of the Significant Subsidiaries or either of the Selling
Shareholders or any of their respective properties or assets is required
for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for (A) such
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters (as to
which such counsel need express no opinion) and (B) such as have been made
or obtained under the Act.
(vii) The Company has an authorized capital stock as set forth in
the Registration Statement and the Prospectus. All of the outstanding
shares of Common Stock are duly and validly authorized and issued, are
fully paid and nonassessable and were not issued in violation of or subject
to any preemptive rights under the corporation law of the State of
Connecticut or the certificate of incorporation of the Company. The Shares
to be delivered on the Closing Date have been duly and validly authorized
and, when delivered by the Selling Shareholders in accordance with this
Agreement, will be duly and validly authorized, issued, fully paid and
nonassessable and will not have been issued in violation of or subject to
any preemptive rights under the corporation law of the State of Connecticut
or the certificate of incorporation of the Company. The Common Stock, the
Firm Shares and the Additional Shares conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(viii) Upon the delivery of the Firm Shares and payment therefor in
accordance with the terms of this Agreement, the several Underwriters will
acquire all of the rights of the Selling Shareholders to such Shares and
will acquire such Shares free and clear of any "adverse claim" (as such
term is used in Section 8-302 of the Uniform Commercial Code as in effect
in the State on New York), assuming the several Underwriters acquire such
Shares in good faith and without notice of any such "adverse claim."
(ix) To such counsel's knowledge, there is no litigation or
governmental or other action, suit, proceeding or investigation before any
court or before or by any public, regulatory or governmental agency or body
pending or threatened against, or involving the properties or business of,
the Company or any of its subsidiaries which is of a character required to
be disclosed in the Registration Statement and the Prospectus which has not
been properly disclosed therein.
(x) Jaffe Family, L.P. has been duly organized and is validly
existing as a limited partnership in good standing under the laws of
Connecticut.
(xi) The Jaffe Family Foundation has been duly organized and is
validly existing as a not-for-profit corporation in good standing under
the laws of New York.
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(xii) In addition, such counsel shall also provide you a statement
in a separate letter that such counsel has acted as outside counsel to the
Company and the Selling Shareholders in connection with the purchase by the
Underwriters of the Firm Shares and the Additional Shares, as the case may
be, from the Selling Shareholders. In that capacity, they participated in
conferences with certain officers of, and with the independent accountants
for, the Company and representatives of the Underwriters concerning the
preparation of the Registration Statement and the Prospectus. Although they
made certain inquires and investigations in connection with the preparation
of the Registration Statement and the Prospectus, they did not
independently verify the accuracy or completeness of the statements made in
the Registration Statement or the Prospectus and the limitations inherent
in their role as outside counsel are such that they cannot and do not
assume responsibility for or pass on the accuracy or completeness of such
statements. Subject to the foregoing, they can state to you that their work
in connection with this matter did not disclose any information that would
cause them to believe that either the Registration Statement at the time it
became effective (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule
430A(b) or Rule 434, if applicable), or any amendment thereof made prior to
the Closing Date as of the date of such amendment, contained an untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus as of its date (or any amendment thereof
or supplement thereto made prior to the Closing Date as of the date of such
amendment or supplement) and as of the Closing Date contained or contains
an untrue statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief or opinion with respect to the financial statements and schedules
and other information of a financial, statistical or accounting nature
which are or should be included or incorporated by reference therein).
(xiii) The statements set forth or incorporated by reference in the
Prospectus under the caption "Description of Capital Stock" and
Item 15 of Part II of the Registration Statement, insofar
as such statements constitute a summary of legal matters documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings.
(xiv) Such counsel may state that their opinions are limited to the
Federal laws of the United States, the laws of the State of New York and
the General Corporation Law of the State of Delaware, and that they express
no opinions as to the laws of any other jurisdiction. In rendering its
opinion and separate letter referred to above, they may state that they
have relied upon the opinion of __________ as to matters of the laws of the
State of Connecticut, which is in a form satisfactory to them.
(c) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from Underwriters' Counsel a favorable opinion,
dated as of the Closing Date with respect to the issuance and sale of the
Shares, the Registration Statement and the Prospectus and such other related
matters as you may reasonably require, and the Company shall have furnished to
Underwriters' Counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) At the Closing Date you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date to the effect that (i)
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the condition set forth in subsection (a) of this Section 6 has been satisfied,
(ii) as of the date hereof and as of the Closing Date the representations and
warranties of the Company set forth in Section 1 hereof are accurate, (iii) as
of the Closing Date the obligations of the Company to be performed hereunder on
or prior thereto have been duly performed and (iv) subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, the Company and its subsidiaries have not sustained any material
loss or interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and there has not been any material adverse change, or any development involving
a material adverse change, in the business prospects, properties, operations,
condition (financial or otherwise) or results of operations of the Company and
its subsidiaries taken as a whole.
(e) At the time this Agreement is executed and at the Closing
Date, you shall have received a customary "comfort letter" from Deloitte &
Touche LLP, independent public accountants for the Company, dated as of the date
of this Agreement and as of the Closing Date, respectively, addressed to the
Underwriters and in form and substance satisfactory to you.
(f) Prior to the Closing Date the Company and the Selling
Shareholders shall have furnished to you such further information, certificates
and documents as you may reasonably request.
(g) You shall have received from each person who is a director
or executive officer of the Company named in the Prospectus and Elise Jaffe an
agreement to the effect that such person will not, directly or indirectly,
without your prior written consent, offer, sell, offer or agree to sell, grant
any option to purchase or otherwise dispose (or announce any offer, sale, grant
of an option to purchase or other disposition) of any shares of Common Stock (or
any securities convertible into or exercisable or exchangeable or exercisable
shares of Common Stock) for a period of 90 days after the date of the
Prospectus.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company and the Selling
Shareholders in writing, or by telephone or telecopy confirmed in writing.
7. Indemnification.
(a) The Company and each Selling Shareholder jointly and
severally agree to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but limited to
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a
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<PAGE> 15
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that (A) the Company and the Selling
Shareholders will not be liable in any such case to the extent but only to the
extent that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein and (B) such indemnity with respect to any untrue
statement or omission in any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
liabilities, claims, damages and expenses purchased Shares if such person did
not receive a copy of the Prospectus (excluding documents incorporated by
reference) at or prior to the confirmation of the sale of such Shares to such
person in any case where such delivery is required by the Act and the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected in the Prospectus. Notwithstanding the foregoing, (i) in
no case shall The Jaffe Family Foundation be liable or responsible for
any amount in excess of the total proceeds from the sale of Shares
by it hereunder and (ii) in no case shall the Jaffe Family, L.P. be liable or
responsible for any amount in excess of the total proceeds from the sale of
Shares by it hereunder unless, prior to seeking indemnification in an amount in
excess of the total proceeds from the sale of Shares by the Jaffe Family, L.P.
hereunder, either (A) a Bankruptcy Event (as hereinafter defined) shall have
occurred or (B) a court of competent jurisdiction shall have rendered a
judgment against the Company for indemnification pursuant to this Agreement,
and such judgment shall remain unsatisfied for a period of 30 days. For
purposes of this Agreement, a "Bankruptcy Event" shall mean (1) the Company
pursuant to or within the meaning of any Bankruptcy Law (as hereinafter
defined) (a) commences a voluntary case, (b) consents to the entry of an order
for relief against it in an involuntary case, (c) consents to the appointment
of a Custodian (as hereinafter defined) of it or for all or substantially all
of its property, (d) makes a general assignment for the benefit of its
creditors or(e) generally is not paying its debts as they become due or (2) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law, which order or decree remains unstayed and in effect for 60 consecutive
days, that (a) is for relief against the company in an involuntary case, (b)
appoints a Custodian of the Company or for all or substantially all of the
property of the Company or (c) orders the liquidation of the Company. The term
"Bankruptcy Law" means Title 11, United States Code, or any similar Federal or
state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each Selling Shareholder, each of the
directors of the Company, each of the officers of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act against any losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), jointly or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Shares, as originally filed
or any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter through
you expressly for use therein; provided, however, that in no case shall such
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have, including under this Agreement. The Company and
the Selling Shareholders acknowledge that the statements set forth in the last
paragraph of the cover page and in the six paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for use in the registration
statement relating to the Shares as originally filed or in any amendment
thereof, any related preliminary prospectus or the Prospectus or in any
amendment thereof or supplement thereto, as the case may be.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the
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commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the party or parties
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
the fees and expenses of not more than one firm of counsel representing the
indemnified parties (not including local counsel) shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Selling Shareholders, on the one hand and the Underwriters, on the other
hand, shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company and the Selling Shareholders
any contribution received by the Company and the Selling Shareholders from
persons, other than the Underwriters, who may also be liable for contribution,
including persons who control the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, officers of the Company who signed
the Registration Statement and directors of the Company) as incurred to which
the Company, the Selling Shareholders and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders, on the one hand, and the
Underwriters, on the other hand, from the offering of the Shares or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 7 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Selling Shareholders, on the one hand, and the Underwriters,
on the other hand, in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Selling Shareholders, on the one hand, and the Underwriters, on the
other hand, shall be deemed to be in the same proportion as (a) the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Selling Shareholders and (b) the
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Shareholders, on
the one hand, and of the Underwriters, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Selling Shareholders or
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and
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the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 8, (i) in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, (ii) in no case shall The Jaffe Family Foundation be liable or
responsible for any amount in excess of the total proceeds from the sale of
Shares by it hereunder (iii) in no case shall the Jaffe Family, L.P. be liable
or responsible for any amount in excess of the total proceeds from the sale of
Shares by it hereunder unless, prior to seeking contribution in an amount in
excess of the total proceeds from the sale of Shares by the Jaffe Family, L.P.
hereunder, either (A) a Bankruptcy Event shall have occurred or (B) a court of
competent jurisdiction shall have rendered a judgment against the company for
contribution pursuant to this Agreement, and such judgment shall remain
unsatisfied for a period of 30 days. and (iv) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 8 and the
preceding sentence, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (i), (ii), (iii) and (iv) of this Section 8. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 8 or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its consent; provided, however, that such consent was
not unreasonably withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default
in its or their obligation to purchase Firm Shares or Additional Shares
hereunder, and if the Firm Shares or Additional Shares with respect to which
such default relates do not (after giving effect to arrangements, if any, made
by you pursuant to subsection (b) below) exceed in the aggregate 10% of the
number of Firm Shares or Additional Shares to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their respective
names in Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more
than 10% of the Firm Shares or Additional Shares, as the case may be, you may in
your discretion arrange for yourself or for another party or parties (including
any non-defaulting Underwriter or Underwriters who so agree) to purchase such
Firm Shares or Additional Shares, as the case may be to which such default
relates on the terms contained herein. In the event that within five calendar
days after such a default you do not arrange for the purchase of the Firm Shares
or Additional Shares, as the case may be, to which such default relates as
provided in this Section 9, this Agreement or, in the case of a default with
respect to the Additional Shares, the obligations of the Underwriters to
purchase and of The Jaffe Family Foundation to sell the Additional Shares shall
thereupon terminate, without liability on the part of The Jaffe Family
Foundation with respect thereto (except in each case as provided in Section 5,
7(a) and 8 hereof) or the Underwriters, but nothing in
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this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Selling Shareholders
for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional
Shares to which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Selling Shareholders shall have the right to postpone the Closing
Date or Additional Closing Date, as the case may be, for a period not exceeding
five business days in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus which,
in the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement with respect to such Firm Shares and Additional
Shares.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Underwriters,
the Selling Shareholders and the Company contained in this Agreement, including
the agreements contained in Section 5, the indemnity agreements contained in
Section 7 and the contribution agreements contained in Section 8, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or by or on
behalf of the Company, any of its officers and directors or any controlling
person thereof or by or on behalf of the Selling Shareholders or any controlling
person thereof, and shall survive delivery of and payment for the Shares to and
by the Underwriters. The representations contained in Section 1 and the
agreements contained in Sections 5, 7, 8 and 11 (d) hereof shall survive the
termination of this Agreement, including termination pursuant to Section 9 or 11
hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the later
of when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the initial public offering price or the purchase price per
Share has not been agreed upon prior to 5:00 P.M., New York time, on the fifth
full business day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company, the
Selling Shareholders or the Underwriters except as herein expressly provided.
Until this Agreement becomes effective as aforesaid, it may be terminated by the
Company or the Selling Shareholders by notifying you or by you notifying the
Company or the Selling Shareholders. Notwithstanding the foregoing, the
provisions of this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all
times be in full force and effect.
(b) You shall have the right to terminate this Agreement
at any time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (i) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or securities
in general; or (ii) if trading on the New York Stock Exchange or American Stock
Exchange shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange or American Stock Exchange by the
New York Stock Exchange or American Stock Exchange or by order of the Commission
or any other governmental authority having jurisdiction; or (iii) if a banking
moratorium has been declared by a New York State or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
Shares or the Additional Shares, as the
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case may be shall have become effective; or (iv) (A) if the United States
becomes engaged in hostilities or there is an escalation of hostilities
involving the United States or there is a declaration of a national emergency or
war by the United States or (B) if there shall have been such change in
political, financial or economic conditions if the effect of any such event in
(A) or (B) as in your judgment makes it impracticable or inadvisable to proceed
with the offering, sale and delivery of the Firm Shares or the Additional
Shares, as the case may be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or telecopy and confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company or the Selling Shareholders to perform any agreement herein or comply
with any provision hereof, the Company and the Selling Shareholders will,
subject to demand by you, reimburse the Underwriters for all reasonable
out-of-pocket expenses (including the reasonable fees and expenses of their
counsel) incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telecopied and confirmed in writing
to such Underwriter c/o Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167, Attention: Equity Capital Markets; if sent to the Company or Selling
Shareholders, shall be mailed, delivered, or telegraphed and confirmed in
writing to the Company or the Selling Shareholders c/o the Company, 30 Dunnigan
Drive, Suffern, New York 10901, Attention: Burt Steinberg, with copy to
Proskauer Rose Goetz & Mendelsohn LLP, 1585 Broadway, New York, New York 10036,
Attention: Klaus Eppler.
13. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Underwriters, the Company, the Selling
Shareholders and the controlling persons, directors, officers, employees and
agents referred to in Section 7 and 8, and their respective successors and
assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provision herein contained. The term "successors and assigns"
shall not include a purchaser, in its capacity as such, of Shares from any of
the Underwriters.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
19
<PAGE> 20
If the foregoing correctly sets forth the understanding
between you, the Company and the Selling Shareholders, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
THE DRESS BARN, INC.
By_____________________________
The Selling Shareholders:
THE JAFFE FAMILY FOUNDATION
By_____________________________
JAFFE FAMILY, L.P.
By_____________________________
Accepted as of the date first above written
BEAR, STEARNS & CO. INC.
ROBERTSON, STEPHENS & COMPANY LLC
By BEAR, STEARNS & CO. INC.
By__________________________
Senior Managing Director
On behalf of themselves and the other Underwriters named in Schedule II
hereto.
20
<PAGE> 21
SCHEDULE I
Number of Firm
Name of Shareholder Shares to be Sold
- ---------------------------------------------------------------------------
Jaffe Family, L.P. 1,000,000
The Jaffe Family Foundation 1,000,000
Total ...... 2,000,000
21
<PAGE> 22
SCHEDULE II
Number of Firm
Name of Underwriter Shares to be Purchased
- ----------------------------------------------------------------------------
Bear, Stearns & Co. Inc
Robertson, Stephens & Company LLC
Total ...... 2,000,000
22
<PAGE> 1
EXHIBIT 5.1
May 13, 1997
The Dress Barn, Inc.
30 Dunnigan Drive
Suffern, New York 10901
Ladies and Gentlemen
You have requested our opinion in connection with the registration
statement on Form S-3 (the "Registration Statement") being filed by you with the
Securities and Exchange Commission for the purpose of registering under the
Securities Act of 1933, as amended (the "Act"), 2,300,000 shares of your common
stock, par value $.05 (the "Shares"), to be sold by the Jaffe Family, L.P. and
The Jaffe Family Foundation (the "Selling Shareholders").
On the basis of such investigation as we have deemed necessary, we are of
the opinion that the Shares will be, when sold by the Selling Shareholders,
legally issued, fully paid and non-assessable.
Klaus Eppler, a partner in our firm, is a director of The Dress Barn, Inc.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not hereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
PROSKAUER ROSE GOETZ & MENDELSOHN LLP
By: /s/ RICHARD H. ROWE
------------------------------------
A Partner
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-25377 on Form S-3 of our report dated September
20, 1996 appearing in the Annual Report on Form 10-K of The Dress Barn, Inc. for
the year ended July 27, 1996 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
New York, New York
May 13, 1997
