UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1998
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-11980
ANNTAYLOR, INC.
---------------
(Exact name of registrant as specified in its charter)
Delaware 51-0297083
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
142 West 57th Street, New York, NY 10019
---------------------------------- -----
(Address of principal executive offices) (Zip Code)
(212) 541-3300
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X|. No | |.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
Outstanding as of
Class November 27,1998
----- ----------------
Common Stock, $1.00 par value 1
The registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the
reduced disclosure format.
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<PAGE> 2
INDEX TO FORM 10-Q
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations
for the Quarters and Nine Months Ended
October 31, 1998 and November 1, 1997.............. 3
Condensed Consolidated Balance Sheets at
October 31, 1998 and January 31, 1998.............. 4
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended October 31, 1998 and
November 1, 1997................................... 5
Notes to Condensed Consolidated Financial Statements.. 6
Item 2. Management's Discussion and Analysis of Results
of Operations..................................... 9
PART II. OTHER INFORMATION
Item 1 Legal Proceedings.................................. 14
Item 6. Exhibits and Reports on Form 8-K...................... 14
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<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
ANNTAYLOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters and Nine Months Ended October 31, 1998 and November 1, 1997
(unaudited)
Quarters Ended Nine Months Ended
--------------- ----------------------
Oct. 31, Nov. 1, Oct. 31, Nov. 1,
1998 1997 1998 1997
---- ---- ---- ----
(in thousands)
Net sales............................ $227,535 $187,200 $649,098$ 569,263
Cost of sales........................ 103,117 94,468 318,412 292,541
------- ------ ------- -------
Gross profit......................... 124,418 92,732 330,686 276,722
Selling, general and administrative
expenses 91,571 78,669 256,989 229,039
Amortization of goodwill............. 2,760 2,760 8,280 8,280
------- ------ ------- -------
Operating income..................... 30,087 11,303 65,417 39,403
Interest expense..................... 4,718 4,958 13,692 15,531
Other expense, net................... 73 342 310 617
------- ------ ------- -------
Income before income taxes and
extraordinary loss 25,296 6,003 51,415 23,255
Income tax provision................. 11,222 3,818 23,878 13,610
------- ------ ------- -------
Income before extraordinary loss..... 14,074 2,185 27,537 9,645
Extraordinary loss (net of income
tax benefit of $130,000)......... --- --- --- (173)
------- ------ ------- -------
Net income........................... $ 14,074 $ 2,185 $ 27,537 $ 9,472
======== ========= ======== ========
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 4
ANNTAYLOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
October 31, 1998 and January 31, 1998
October 31, January 31,
1998 1998
---- ----
(unaudited)
(in thousands)
ASSETS
Current assets
Cash and cash equivalents........................ $ 26,224 $ 31,369
Accounts receivable, net......................... 69,767 60,211
Merchandise inventories.......................... 148,526 97,234
Prepaid expenses and other current assets........ 25,239 21,291
------- -------
Total current assets........................... 269,756 210,105
Property and equipment, net.......................... 147,979 139,610
Goodwill, net ....................................... 322,458 330,739
Deferred financing costs, net ....................... 2,957 1,258
Other assets......................................... 2,742 1,949
------- -------
Total assets................................... $745,892 $683,661
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable................................. $ 57,892 $ 38,185
Accrued expenses................................. 61,753 48,620
Current portion of long-term debt................ 1,191 1,119
------- -------
Total current liabilities...................... 120,836 87,924
Long-term debt....................................... 204,878 105,157
Other liabilities.................................... 11,808 10,082
Commitments and contingencies
Stockholder's equity
Common stock, $1.00 par value; 1,000 shares authorized;
1 share issued and outstanding.................. 1 1
Additional paid-in capital....................... 346,221 445,886
Retained earnings................................ 62,148 34,611
------- -------
Total stockholder's equity 408,370 480,498
------- -------
Total liabilities and stockholder's equity..... $745,892 $683,661
======== ========
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 5
ANNTAYLOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 31, 1998 and November 1, 1997
(unaudited)
Nine Months Ended
-------------------------
October 31, November 1,
1998 1997
---- ----
(in thousands)
Operating activities:
Net income............................................ $ 27,537 $ 9,472
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary loss................................. --- 303
Provision for loss on accounts receivable.......... 1,086 1,366
Depreciation and amortization...................... 21,798 21,022
Amortization of goodwill........................... 8,280 8,280
Non-cash interest.................................. 955 1,097
Amortization of deferred compensation.............. 301 797
Deferred income taxes.............................. (218) ---
Loss on disposal of property and equipment......... 336 246
(Increase) decrease in:
Receivables.................................... (10,642) (4,423)
Merchandise inventories........................ (51,292) (14,140)
Prepaid expenses and other current assets...... (2,947) 1,320
Increase in:
Accounts payable............................... 19,707 9,580
Accrued expenses............................... 13,133 7,315
Other non-current assets and liabilities, net.. 149 2,171
------ ------
Net cash provided by operating activities............. 28,183 44,406
------ ------
Investing activities:
Purchases of property and equipment................... (30,502) (20,220)
------ ------
Net cash used by investing activities................. (30,502) (20,220)
------ ------
Financing activities:
Net repayments under term loan........................ --- (24,500)
Term loan prepayment penalty.......................... --- (184)
Payments on mortgage.................................. (832) (213)
Parent company contribution........................... 659 871
Payment of deferred financing costs................... (2,653) (69)
------ ------
Net cash used by financing activities................. (2,826) (24,095)
------ ------
Net increase (decrease) in cash......................... (5,145) 91
Cash, beginning of period............................... 31,369 7,025
------ ------
Cash, end of period..................................... $ 26,224 $ 7,116
====== ======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest.............. $ 11,675 $12,491
====== ======
Cash paid during the period for income taxes.......... $ 23,080 $12,973
====== ======
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 6
ANNTAYLOR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
---------------------
The condensed consolidated financial statements of AnnTaylor, Inc. (the
"Company") are unaudited but, in the opinion of management, contain all
adjustments (which are of a normal recurring nature) necessary to present
fairly the financial position, results of operations and cash flows for the
periods presented. All significant intercompany accounts and transactions
have been eliminated.
The results of operations for the 1998 interim period shown in this
report are not necessarily indicative of results to be expected for the
fiscal year.
The January 31, 1998 condensed consolidated balance sheet amounts have
been derived from the previously audited consolidated balance sheet of the
Company.
Certain fiscal 1997 amounts have been reclassified to conform to the 1998
presentation.
Detailed footnote information is not included for the periods ended
October 31, 1998 and November 1, 1997. The financial information set forth
herein should be read in conjunction with the Notes to the Company's
Consolidated Financial Statements contained in the Company's 1997 Annual
Report on Form 10-K.
2. Long-Term Debt
--------------
The following summarizes long-term debt outstanding at October 31, 1998:
(in thousands)
8-3/4% Notes..................................$ 100,000
Mortgage...................................... 5,444
Note payable to ATSC.......................... 100,625
-------
Total debt ................................... 206,069
Less current portion.......................... 1,191
-------
Total long-term debt.......................$ 204,878
=======
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<PAGE> 7
On June 30, 1998, the Company entered into a new $150,000,000 senior
secured revolving credit facility (the "Credit Facility") with Bank of
America National Trust and Savings Association and a syndicate of lenders.
The Credit Facility is used by the Company for the issuance of commercial and
standby letters of credit and to provide revolving loans for other general
corporate purposes. The Credit Facility matures on June 30, 2000 and
includes an automatic one-year extension, contingent upon the satisfaction of
certain conditions.
On August 13, 1998, the Company declared a dividend to its sole
stockholder, AnnTaylor Stores Corporation ("ATSC"), of a promissory note in
the original principal amount of $100,625,000 (the "Note Payable to ATSC").
The Note Payable to ATSC was issued by the Company on August 28, 1998 and has
interest and payment terms substantially similar to the terms of the 8-1/2%
Convertible Subordinated Debentures Due 2016 (the "Convertible Debentures")
that were issued in 1996 by ATSC to AnnTaylor Finance Trust. The Note
Payable to ATSC was declared in order to (1) relieve the Company of the
administrative burden associated with declaring cash dividends to ATSC
quarterly, which has been necessary in order to provide ATSC with funds
sufficient to meet its quarterly interest payment obligations on the
Convertible Debentures, and (2) enhance financial reporting, by more closely
associating the debt obligation with the entity that was the ultimate
beneficiary of the cash received upon the creation of debt. ATSC has pledged
the Note Payable to ATSC to the lenders as collateral for ATSC's guarantee of
the Company's performance of its obligations under the Credit Facility.
3. Change in Accounting Principle
------------------------------
Effective February 1, 1998, the Company elected to change its method of
inventory valuation from the retail method to the average cost method. The
Company believes the cost method is a preferable method for matching the cost
of merchandise with the revenues generated. The cumulative effect of this
accounting change as of February 1, 1998 was immaterial, and therefore no
disclosure is noted on the condensed consolidated statement of operations for
the nine months ended October 31, 1998. It is not possible to determine the
effect of the change on income in fiscal periods ending prior to February 1,
1998.
4. Recently Issued Statements of Financial Accounting Standards
------------------------------------------------------------
In February 1998, the FASB issued SFAS No. 132, "Employees Disclosure
About Pensions and Other Postretirement Benefits", which standardizes the
disclosure requirements for pension and other postretirement benefits,
eliminates certain disclosures, and requires additional information on the
==============================================================================
<PAGE> 8
changes in the benefit obligations and fair value of plan assets. This
statement is effective for periods beginning after December 15, 1997. The
Company will adopt this statement for its Consolidated Financial Statements
for fiscal year 1998 contained in the Company's 1998 Annual Report on Form
10-K.
5. Legal Proceedings
-----------------
On November 9, 1998, the U.S. District Court for the Southern District of
New York issued an Opinion dismissing, with prejudice, the amended complaint,
filed in April 1998, in the purported class action lawsuit against the
Company's sole shareholder, AnnTaylor Stores Corporation ("ATSC"), the
Company, certain present and former directors and officers of ATSC and the
Company, Merrill Lynch & Co. ("Merrill") and certain affiliates of Merrill
(Novak v. Kasaks, et al. No. 96 CIV 3073 (S.D.N.Y. 1996)), relating to the
period commencing February 3, 1994 through May 4, 1995. The amended
complaint alleged causes of action under Section 10(b) and Section 20(a) of
the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. The Court found that the amended complaint failed to state a
claim upon which relief may be granted, and failed to plead fraud with
particularity and an inability to do so. The plaintiffs may appeal the
Court's ruling within thirty days of the date of entry of the Court's order.
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<PAGE> 9
Item 2. Management's Discussion and Analysis of Results of Operations
-------------------------------------------------------------
Results of Operations
- ---------------------
Nine Months Ended
-----------------
October 31, November 1,
1998 1997
---- ----
Number of Stores:
Open at beginning of period.. 324 309
Opened during period......... 37 24
Expanded during period*...... 6 8
Closed during period......... 2 9
Open at end of period........ 359 324
Type of Stores Open at End of Period:
Ann Taylor stores............ 303 283
Ann Taylor Factory Stores.... 14 14
Ann Taylor Loft stores....... 42 27
- -----------------
* Expanded stores are excluded from comparable store sales for the first
year following expansion.
Nine Months ended October 31, 1998 Compared to Nine Months ended November 1,
- ---------------------------------- ----------------------------- -----------
1997
- ----
The Company's net sales in the first nine months of 1998 increased to
$649,098,000 from $569,263,000 in the first nine months of 1997, an increase
of $79,835,000 or 14.0%. This increase is attributable to the opening of new
stores and the expansion of existing stores, and an increase in comparable
store sales of 5.7%. The increase in comparable store sales for the
nine-month period was a result of increases in comparable store sales in the
second and third quarters of 1998, as a result of improved customer
acceptance of the Company's product offerings and merchandise assortment,
offset in part by a decrease in comparable store sales in the first quarter
of 1998. As described in the Company's Quarterly Report on Form 10-Q for the
first quarter of 1998, management believes that the decrease in first quarter
comparable store sales was attributable to lower customer acceptance of
certain of the Company's first quarter merchandise offerings, as well as to
an acceleration of the Company's end-of-fall season clearance sale, held in
February of the prior year, to January in 1998 (which was part of fourth
quarter 1997).
Gross profit as a percentage of net sales increased to 50.9% in the first
nine months of 1998 from 48.6% in the first nine months of 1997.
Selling, general and administrative expenses represented 39.6% of net
sales, in the first nine months of 1998, compared to 40.2% of net sales in
=============================================================================
<PAGE> 10
the first nine months of 1997. The decrease in selling, general and
administrative expenses as a percentage of net sales was primarily
attributable to increased leverage on fixed expenses resulting from increased
comparable store sales. This leverage was partially offset by an increase in
the provision for management performance bonus expense, and an increase in
marketing expenditures in support of the Company's strategic initiatives to
enhance the Ann Taylor brand.
As a result of the foregoing, the Company had operating income of
$65,417,000, or 10.1% of net sales, in the first nine months of 1998,
compared to operating income of $39,403,000, or 6.9% of net sales, in the
first nine months of 1997. Amortization of goodwill was $8,280,000 in each
of the first nine months of 1998 and 1997. Operating income, without giving
effect to goodwill amortization in either year, was $73,697,000, or 11.4% of
net sales, in the 1998 period and $47,683,000, or 8.4% of net sales, in the
1997 period.
Interest expense was $13,692,000 in the first nine months of 1998 and
$15,531,000 in the first nine months of 1997. The decrease in interest
expense was attributable to reduced outstanding indebtedness in the first
nine months of 1998 compared to the first nine months of 1997.
The income tax provision was $23,878,000, or 46.4% of income before
income taxes, in the 1998 period, compared to $13,610,000, or 58.5% of income
before income taxes and extraordinary loss, in the 1997 period. The
effective income tax rate for both periods differed from the statutory rate
primarily because of non-deductible goodwill amortization. Without giving
effect to such non-deductible goodwill amortization, the Company's effective
income tax rate was 40% of income before income taxes in the 1998 period,
compared to 43% before income taxes and extraordinary loss in the 1997
period. This decrease in the effective income tax rate resulted primarily
from an increase in the amount of income earned outside the United States by
the Company's non-U.S. sourcing subsidiaries.
On July 2, 1997 the Company used available cash to prepay the outstanding
balance of a $24,500,000 term loan due September 1998. This loan repayment
resulted in an extraordinary charge to earnings in Fiscal 1997 of $173,000,
net of income tax benefit.
As a result of the foregoing factors, the Company had net income of
$27,537,000, or 4.2% of net sales, for the first nine months of 1998,
compared to net income of $9,472,000 or 1.7% of net sales, for the first nine
months of 1997.
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<PAGE> 11
Year 2000 Status
- ----------------
The Company has been conducting a comprehensive review of its computer
systems to identify those that could be adversely affected by the "Year 2000
issue" (which refers to the inability of many computer systems to process
accurately dates later than December 31, 1999), and has been executing a plan
to remediate or replace affected systems on a timely basis. Equipment and
other non-information technology systems that use microchips or other
embedded technology, such as certain conveyor systems at the Company's
distribution center, are also covered by the Company's Year 2000 compliance
project.
The Company's Year 2000 compliance project includes four phases: (1)
evaluation of the Company's owned or leased systems and equipment to identify
potential Year 2000 compliance issues; (2) remediation or replacement of
Company systems and equipment determined to be non-compliant (and testing of
remediated systems before returning them to production); (3) inquiry
regarding Year 2000 readiness of material business partners and other third
parties on whom the Company's business is dependent; and (4) development of
contingency plans, where feasible, to address potential third party
non-compliance or failure of material Company systems.
The initial phase of the Company's Year 2000 compliance project was the
evaluation of all software, hardware and equipment owned or licensed by the
Company, and identification of those systems and equipment requiring Year
2000 remediation. Analysis of all material software and hardware has been
completed, except with respect to systems unique to the Company's sourcing
offices located outside of the United States, discussed below. Of those
software systems requiring remediation or replacement, approximately 75% of
all material systems have already been remediated or replaced by Year 2000
compliant software. The Company anticipates that 90% of all material systems
will have been remediated or replaced by the end of fiscal 1998, and that all
remaining material systems will be remediated or replaced by the end of the
second quarter of fiscal 1999. In addition, all computer hardware in the
Company's home offices and distribution center that was not Year 2000
compliant has been remediated or replaced; non-compliant hardware in the
Company's retail stores is scheduled to be remediated or replaced by the end
of fiscal 1998; and hardware and software unique to the Company's sourcing
offices located outside the United States are scheduled to be evaluated and
remediated or replaced by the end of the second quarter of fiscal 1999.
============================================================================
<PAGE> 12
The Company has engaged a consultant to assist in the evaluation of the The
Company has engaged a consultant to assist in the evaluation of the equipment
used in the Company's distribution center (other than computer software and
hardware, which were included in the analysis and remediation efforts described
in the preceding paragraph). The equipment evaluation is expected to be
completed by the end of fiscal 1998, and remediation or replacement of
distribution center equipment found not to be Year 2000 compliant is scheduled
to be completed by the end of the second quarter of fiscal 1999.
Over the past few years, the Company's strategic plan has included
significant investment in and modernization of many of the Company's computer
systems. As a result, much of the costs and timing for replacement of
certain of the Company's systems that were not Year 2000 compliant were
already anticipated as part of the Company's planned information systems
spending and did not need to be accelerated as a result of the Company's Year
2000 project. The total cost to the Company specifically associated with
addressing the Year 2000 issue with respect to its systems and equipment has
not been, and is not anticipated to be, material to the Company's financial
position or results of operations in any given year. The Company estimates
that the total additional cost of managing its Year 2000 project, remediating
existing systems and replacing non-compliant systems, is approximately $2.1
million, of which approximately $1.1 million has been or will be expensed as
incurred, and $1 million has been or will be capitalized. Of these amounts,
approximately $800,000 was expensed through the third quarter of 1998 and it
is expected that most of the capitalized costs will be incurred by the end
of fiscal 1998. Although the Company believes its Year 2000 compliance
efforts with respect to its systems will be successful, any failure or
delay could result in actual costs and timing differing materially from that
presently contemplated, and in a disruption of business. The Company
intends to develop a contingency plan to permit its primary
operations to continue if the Company's modifications and conversions of its
systems are not successfully completed on a timely basis, but the foregoing
cost estimates do not take into account any expenditures associated with such
contingencies. The Company's cost estimates also do not include time or
costs that may be incurred as a result of third parties' failure to become
Year 2000 compliant on a timely basis.
The Company is communicating with its business partners, including key
manufacturers, vendors, banks and other third parties with whom it does
business, to obtain information regarding their state of readiness with
respect to the Year 2000 issue. Failure of third parties to remediate Year
2000 issues affecting their respective businesses on a timely basis, or to
implement contingency plans sufficient to permit
=============================================================================
<PAGE> 13
uninterrupted continuation of their businesses in the event of a failure of
their systems, could have a material adverse effect on the Company's business
and results of operations. Assessment of third party Year 2000 readiness is
expected to be substantially completed by the end of the first quarter of
fiscal 1999. The Company will not be able to determine its most reasonably
likely worst case scenarios until assessment of third parties' Year 2000
compliance is completed.
The Company's Year 2000 compliance project includes development of a
contingency plan designed to support critical business operations in the
event of the occurrence of systems failures or the occurrence of reasonably
likely worst case scenarios. The Company anticipates that contingency plans
will be substantially developed by the end of the second quarter of 1999.
The Company may not be able to compensate adequately for business
interruption caused by certain third parties. Potential risks include
suspension or significant curtailment of service or significant delays by
banks, utilities or common carriers, or at U.S. ports of entry. The
Company's business also could be materially adversely affected by the failure
of governmental agencies to address Year 2000 issues affecting the Company's
operations. For example, a significant amount of the Company's merchandise
is manufactured outside the United States, and the Company is dependent upon
the issuance by foreign governmental agencies of export visas for, and upon
the U.S. Customs Service to process and permit entry into the United States
of, such merchandise. If failures in government systems result in the
suspension or delay of these agencies' services, the Company could experience
significant interruption or delays in its inventory flow.
The costs and timing for management's completion of Year 2000 compliance
modification and testing processes are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources, the success of third
parties' Year 2000 compliance efforts and other factors. There can be no
assurance that these assumptions will be realized or that actual results will
not vary materially.
==============================================================================
<PAGE> 14
Item 1. Legal Proceedings
-----------------
On November 9, 1998, the U.S. District Court for the Southern
District of New York issued an Opinion dismissing, with prejudice, the
amended complaint, filed in April 1998, in the purported class action
lawsuit against, the Company, ATSC, certain present and former
directors and officers of Company, ATSC, Merrill Lynch & Co.
("Merrill") and certain affiliates of Merrill (Novak v Kasaks, et al.
No. 96 CIV 3073 (S.D.N.Y. 1996)), relating to the period commencing
February 3, 1994 through May 4, 1995. The amended complaint alleged
causes of action under Section 10(b) and Section 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. The Court found that the amended complaint failed to state
a claim upon which relief may be granted, and failed to plead fraud
with particularity and an inability to do so. The plaintiffs may
appeal the Court's ruling within thirty days of the date of entry of
the Court's order.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed a report dated November 9, 1998 with the Commission
on Form 8-K on November 12, 1998 with respect to the dismissal of the
amended complaint filed in Novaks v. Kasaks, et al. as discussed in
Footnote 5 to the Consolidated Financial Statements.
==============================================================================
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AnnTaylor, Inc.
Date: December 14, 1998 By: /s/ J. Patrick Spainhour
----------------- --------------------
J. Patrick Spainhour
Chairman and Chief Executive
Officer
Date: December 14, 1998 By: /s/ Walter J. Parks
----------------- --------------------
Walter J. Parks
Senior Vice President -
Chief Financial Officer
and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CONDENSED CONSOLIDATED
BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-END> OCT-31-1998
<CASH> 26224
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<RECEIVABLES> 70560
<ALLOWANCES> 793
<INVENTORY> 148526
<CURRENT-ASSETS> 269756
<PP&E> 265319
<DEPRECIATION> 117340
<TOTAL-ASSETS> 745892
<CURRENT-LIABILITIES> 120836
<BONDS> 100000
0
0
<COMMON> 1
<OTHER-SE> 408369
<TOTAL-LIABILITY-AND-EQUITY> 745892
<SALES> 649098
<TOTAL-REVENUES> 649098
<CGS> 330686
<TOTAL-COSTS> 330686
<OTHER-EXPENSES> 265579
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 51415
<INCOME-TAX> 23878
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</TABLE>
