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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934(FEE REQUIRED)
For the fiscal year ended July 30,1994
OR
[ ] TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission file number 0-11736
THE DRESS BARN, INC.
(Exact name of registrant as specified in its charter)
Connecticut 06-0812960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 Dunnigan Drive, Suffern, New York 10901
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (914) 369-4500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common stock - par value $.05 per share
(Title of Class)
Indicate by check mark whether the 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in the definitive proxy incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K
Yes No X
Page 1 of Cover Page
As of October 26, 1994, 22,247,190 common shares were outstanding. The
aggregate market value of the common shares (based upon the closing price
on October 25, 1994 on the NASDAQ) of The Dress Barn, Inc. held by
non-affiliates was approximately $150,718,000. For the purposes of such
calculation, all outstanding shares of Common Stock have been considered
held by non-affiliates, other than the 6,984,595 shares beneficially
owned by Directors and Officers of the registrant.
In making such calculation, the registrant does not determine the affiliate
or non-affiliate status of any shares for any other purpose.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held on December 12, 1994 are incorporated into Parts I and
III of this Form 10-K.
Page 2 of Cover Page
PART I
ITEM 1. BUSINESS
General
As of July 30, 1994, The Dress Barn, Inc. (the "Company", which includes,
unless otherwise noted, its subsidiaries and predecessor) operated a chain
of 688 off-price women's apparel stores utilizing three merchandising
strategies: Dress Barn, Dress Barn Woman ("DBW") and SBX. Dress Barn
operates primarily under the names "Dress Barn" and "Westport Ltd.". As
of July 30, 1994, there were 567 Dress Barn stores, 98 DBW stores and 23
SBX stores. Since 1992 the Company has been testing the SBX merchandising
concept in outlet malls and outlet strip centers. These stores feature
both brand name and private-label casual apparel.
All of the Company's stores offer in-season, moderate to better quality
fashion women's apparel emphasizing department store quality merchandise,
primarily with nationally recognized brand names bearing the
manufacturer's label, at a substantial discount from department store
prices. The Company merchandises for price conscious and fashion minded
working women in middle to upper income brackets and predominantly in the
18-40 year age range.
The Dress Barn and SBX stores carry Junior and Misses sizes, while the
DBW stores feature larger sizes of styles similar to those found in the
Dress Barn stores. As of July 30, 1994, 46 Dress Barn stores also
carried DBW merchandise. The SBX stores carry only casual apparel.
Expansion and Store Openings
The Company has been in business since 1962. During the past five years
the Company increased its number of stores from 400 in July 1988 to 688
stores open on July 30, 1994. During fiscal 1994, the Company opened 82
stores, closed 35 for a net increase of 47 locations for the fiscal year
ended July 30, 1994. The fiscal 1994 openings included 6 new
Dress Barn Woman locations as well as 10 Dress Barn stores that also
feature DBW merchandise. Of these openings, 11 were locations acquired
from others and converted to the Company's format. Subsequent to
July 30, 1994, the Company has opened 43 new Dress Barn stores (including
11 with DBW merchandise included) and 4 Dress Barn Woman stores, closed 6
stores and had a total of 730 units in operation as of October 26, 1994.
Merchandise and Marketing
All of the Company's stores sell only first-quality current merchandise,
with approximately 60% of the merchandise sold featuring nationally
recognized name brands through the offerings of domestic fashion vendors.
Over half of the Company's sales volume is sportswear, with the remainder
consisting of dresses, suits, blazers and accessories. The Company's
three merchandising strategies are organized as separate divisions, each
with a separate merchandising staff to focus on its individual
merchandise styles.
In addition to nationally recognized name brand labels, the Company's
stores offer private label merchandise. This merchandise, which is also
first quality, is typically imported or manufactured domestically under
contract to the Company and is concentrated in basic lines where quality,
price and fashion are more important than brand names. While such private
label merchandise is both less expensive for the customer and more
profitable for the Company, the Company believes that brand name apparel
at discount prices has attracted its customers. Accordingly, the Company
continues to limit the growth of its private label program.
Virtually all merchandising decisions affecting the Company's stores are
made centrally. Pricing and markdowns are determined centrally but may
be adjusted locally in response to competitive situations. Generally, 80%
of the merchandise sold by the Company is uniformly carried by all stores
with the remaining 20% 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 to expedite selling.
The Company's stores provide a high degree of customer service including
personal sales assistance by Company employees and an attended dressing
room area with individual dressing rooms. The Company's stores are
designed and maintained to project an attractive, quality image.
Exteriors carry a distinctive logo for ease of identification. Interiors
feature department store type fixtures and carpeting and premium quality
lighting. Merchandise is attractively displayed and arranged by
department such as sportswear, dresses and suits. Well known designer and
brand names are prominently displayed.
The Company uses mainly print advertising that emphasizes current
fashion apparel at discount prices. The Company is experimenting with
television advertising and in fiscal 1994, the Company introduced its own
Dress Barn private-label credit card.
Store Locations
As of July 30, 1994 the Company was operating 688 stores in 41 states and
the District of Columbia, primarily in strip shopping centers and
enclosed malls. Nearly all of these stores occupy between 3,500 and 5,000
square feet of selling space.
The table on the following page indicates the states in which the stores
operating on July 30, 1994 were located:
Stores Open At July 30, 1994:
Dress Barn
Dress Barn Woman SBX
Location Stores Stores Stores
Alabama 5 1 1
Arizona 11 1 -
Arkansas 1 - -
California 30 4 2
Colorado 4 - 1
Connecticut 30 5 -
District of Columbia 1 - -
Delaware 4 1 -
Florida 15 2 3
Georgia 22 3 -
Idaho 2 1 -
Illinois 25 3 1
Indiana 8 1 -
Kansas 4 1 -
Kentucky 4 2 -
Louisiana 2 - -
Maine 6 1 -
Maryland 23 1 1
Massachusetts 35 4 -
Michigan 31 5 1
Minnesota 5 - -
Missouri 8 1 -
Nebraska 1 - -
Nevada 4 1 1
New Hampshire 6 1 -
New Jersey 44 13 1
New Mexico 2 - -
New York 54 6 -
North Carolina 28 7 -
Ohio 18 2 -
Oklahoma 2 - -
Oregon 3 2 -
Pennsylvania 42 9 1
Rhode Island 1 - -
South Carolina 14 2 1
Tennessee 13 3 2
Texas 19 4 2
Utah 2 2 2
Vermont 2 - -
Virginia 27 6 2
Washington 3 1 -
Wisconsin 6 2 1
Total 567 98 23
The following table indicates the type of shopping facility in which the
stores are located:
Dress Barn
Dress Barn Woman SBX
Type of Facility Stores Stores Stores
Strip Shopping Centers 448 85 15
Regional and Other Enclosed Shopping Malls 101 13 8
Free Standing 4 - -
Downtown Locations 14 - -
Total 567 98 23
During the fiscal year ended July 30, 1994, no store accounted for as
much as 1% of the Company's total sales.
Purchasing and Distribution
The Company utilizes a buying organization that parallels those used by
most large specialty store chains. Purchasing is conducted on a
departmental basis for each of the Dress Barn, Dress Barn Woman and SBX
merchandise groups by the Company's staff of buyers and assistant buyers
supervised by the President and six Merchandise Managers. To support its
current and future expansion plans the Company has continued to expand
its buying staff. The Company also utilizes the services of independent
buying representatives in New York and overseas.
The Company has in the past always been able to purchase sufficient
quantities of first-quality brand name merchandise at attractive prices
from vendors who typically sell to department and specialty stores, and
management believes that there will be an adequate supply of such
merchandise available. The Company obtains its brand name merchandise
from approximately 350-450 vendors and its private label merchandise from
approximately 15 vendors. No vendor accounted for as much as 5% of the
Company's purchases in the fiscal year ended July 30, 1994.
All merchandise is received from vendors at the Company's central
warehouse and distribution facilities in Suffern, New York, where it is
inspected, ticketed and earmarked for particular stores. The Suffern
facility, which began operations in January 1994, has a total of 510,000
square feet, with 100,000 square feet of office space and the remainder
for merchandise distribution. The Company has vacated all of its Stamford
facilities, the last being Hamilton Avenue which was closed in September
1994.
The Company generally does not warehouse merchandise, but distributes it
promptly to stores, shipments being made at least twice a week to each
store. Turnaround time between receipt from the vendor and shipment to
the stores is usually three days or less. Because of such frequent
shipments, the stores themselves 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 until the following year.
Store Operations and Management
Virtually all the Company's stores are open seven days a week. Stores
located in strip shopping centers and malls conform to the hours of
other stores in the shopping centers and are open most evenings, while
downtown and free standing stores are usually open two nights per week.
Approximately 50% of the Company's sales are for cash. The balance are
credit card sales. The Company's stores accept Visa, MasterCard, American
Express and Discover credit cards. In February 1994, the Company
introduced its own Dress Barn private-label credit card. As with the
other credit cards, the Company assumes no credit risk but pays a
percentage of sales as a service charge. The Company has a chain-wide
policy of cash refunds within 14 days of purchase and upon presentation
of a register receipt; additionally the customer still has the option of
receiving a credit redeemable at a later date.
None of the Company's stores or departments are franchised or operated by
others. Each store has a manager who reports to a District Sales Manager,
who is in charge of between 6 and 10 stores. District Sales Managers
generally 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. In turn, to further maintain centralized control, there are 10
Regional Sales Managers who are each responsible for approximately 8
District Sales Managers.
Control Systems
The Company has developed and continues to improve a computerized
merchandise control system that can accommodate substantial growth in the
number of stores. This system tracks buyers' orders, warehouse receiving,
price marking, shipments to stores, inventories, markdowns, store sales
and individual merchandise item performance, and utilizes personal
computers to input and monitor the purchasing, receiving, shipping and
distribution functions.
To monitor the performance of the various styles, management receives
bi-weekly computer reports reflecting sales and inventory levels. These
reports are organized by department, class, vendor, style, color and
store. Thus, the sales performance of every style and color of
merchandise in every store is monitored centrally twice a week.
The Company has a point of sale register system and has upgraded it with
the installation of price look up and ticket scanning to better service
its customer. The Company continues to enhance its systems to provide
instant access to sales information, increase productivity and improve
customer service.
Each store has an attended dressing room area and generally one cash
register, which is constantly attended. These practices serve a security
as well as a service function. The Company utilizes article surveillance
security tag systems where they are cost justified. The Company's
inventory shrinkage rate is within industry norms.
Trademarks
The Company has previously been issued U.S. Certificates of Registration
of Trademark for the operating names of its stores and its major private
label merchandise. These trademarks are indicated below:
Trademark Registration Date
Dress Barn March 5, 1985
Princeton Club April 30, 1985
Lee David, Ltd. May 7, 1985
Westport, Ltd. August 20, 1985
Employees
As of July 30, 1994, the Company had approximately 6,400 employees of
whom approximately 3,500 worked part time. A number of temporary
employees are usually added during the peak selling periods. None of the
Company's employees are covered by any collective bargaining agreement.
The Company considers its employee relations to be good.
Competition
The women's retail apparel business is highly competitive. The Company's
stores compete with discount stores, women's apparel specialty stores
and department stores. Many of the stores with which the Company
competes are units of large national or regional chains that have
substantially greater financial and other resources than the Company.
The off-price women's apparel business has become more competitive.
Dress Barn accounts for an extremely small fraction of the total market
for women's apparel.
ITEM 2. PROPERTIES
The Company leases all its stores. Store leases generally have an initial
term ranging from 5 to 15 years with one or more 5-year options to extend
the lease. A number of leases expiring in the 1990's do not have further
extension options. The following table, covering all stores operated by
the Company on July 30, 1994, indicates the number of leases expiring
during the period indicated and the number of expiring leases with
renewal options:
Number of Number with
Fiscal Years Leases Expiring Renewal Options
1995 104 81
1996 126 113
1997 123 107
1998 100 90
1999-2001 194 142
2002 and thereafter 41 26
Total 688 559
New store leases generally provide for a base rent of between $12 and $15
per square foot per annum. 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 30, 1994, and excluding
locations acquired after July 30, 1994, for the fiscal year ending
July 29, 1995, are approximately $41,360,000. In addition, the Company
is also responsible under its store leases for its pro rata share of
maintenance expenses and common charges in mall and strip locations.
A substantial number of store leases give the Company the option to
terminate the lease if certain specified sales volumes are not achieved.
In addition, a number of these leases also provide for such termination
at the option of the landlord. Usually these provisions are operative
only during the first few years of the lease.
The Company leases its executive offices and distribution centers at 30
Dunnigan Drive in Suffern, New York. This lease expires on
April 30, 2007, with three 5 year options to extend the lease.
Management believes the Suffern facility should be able to service in
excess of 1,500 stores and provide adequate office space for similar
expansion in the Company's executive offices. The Company began full
distribution operations in the new facility in January 1994 and moved its
executive offices in July 1994. The Company elected not to renew any of
the leases for its Stamford facilities and vacated the locations upon
their lease expiration.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which the Company or
any of its subsidiaries is a party or of which any of their property is
the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year.
PART II
ITEM 5- MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS
Market Prices of Common Stock
The Common Stock of the Dress Barn, Inc. is traded over-the-counter
on the NASDAQ National Market System under the symbol DBRN.
The table below sets forth the high and low bid prices as reported by
NASDAQ for the last eight fiscal quarters. These quotations
represent prices between dealers and do not include retail mark-ups,
mark-downs or other fees or commissions and may not represent actual
transactions.
Fiscal 1994 Fiscal 1993
Bid Prices Bid Prices
High Low High Low
Fiscal Period
First Quarter $ 15.50 $ 10.50 $ 16.63 $ 10.38
Second Quarter 15.13 10.88 20.63 15.88
Third Quarter 14.00 10.88 23.50 11.88
Fourth Quarter 12.75 8.25 14.63 10.25
Number of Record Holders
The number of record holders of the Company's common stock as of October
10, 1994 was approximately 1,800.
Dividend Policy
The Company has never paid cash dividends on its common stock. Payment of
dividends is within the discretion of the Company's Board of Directors.
ITEM 6- SELECTED FINANCIAL DATA
The Dress Barn, Inc. and Subsidiaries
Selected Financial Data
Year Ended
July 30, July 31, July 25, July 27, July 28,
1994 (*) 1993 1992 1991 1990
Statement of earnings data:
Net sales $457,324,621 $419,585,581 $363,089,914 $325,412,935 $283,591,556
Cost of sales,
including
occupancy and
buying costs 291,937,984 266,867,616 231,829,749 204,560,687 176,048,518
Gross profit 165,386,637 152,717,965 131,260,165 120,852,248 107,543,038
Selling, general and
administrative
expenses 141,473,138 125,307,922 109,270,919 100,107,097 87,333,014
Operating
income 23,913,499 27,410,043 21,989,246 20,745,151 20,210,024
Interest income
- - net 1,726,717 2,338,217 3,002,872 2,918,882 2,541,904
Earnings before
income taxes 25,640,216 29,748,260 24,992,118 23,664,033 22,751,928
Income taxes 9,487,000 10,709,000 8,798,000 8,711,000 8,373,000
Net earnings $16,153,216 $19,039,260 $16,194,118 $14,953,033 $14,378,928
Earnings per share $0.73 $0.86 $0.74 $0.68 $0.64
Weighted average
shares
outstanding 22,177,063 22,019,742 21,805,478 21,905,407 22,518,807
(*)Consists of 53 weeks. All other fiscal years presented consist of 52 weeks.
Balance sheet data:
Working
capital $89,050,887 $83,476,171 $73,477,379 $61,917,864 $55,768,665
Total assets$217,862,655 $202,385,657 $173,360,191 $137,634,744 $125,483,987
Long-term debt -- -- -- -- --
Shareholders'
equity $159,197,953 $142,002,672 $120,339,195 $102,955,940 $93,180,676
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Net Sales
Net sales increased 9.0% in fiscal 1994 as compared to fiscal 1993 and
15.6% in fiscal 1993 as compared to fiscal 1992. Fiscal 1993 was a 53
week year versus 52 weeks for fiscal 1994 and 1992. The sales increases
in both fiscal years were provided primarily by the 47 (net) stores added
during fiscal 1994 and the 77 (net) stores added during fiscal 1993.
Comparable store sales decreased 1.2% in fiscal 1994 versus fiscal 1993
and increased 1.6% in fiscal 1993 versus fiscal 1992. Actual units sold
per store increased in fiscal 1994 from fiscal 1993 but sales per store
decreased as the Company lowered its price points and the merchandise mix
became more casual and less career, thereby lowering the sales price of
the average unit sold.
Cost of Goods Sold, Including Buying and Occupancy Costs ("CGS")
CGS increased 9.4% in fiscal 1994 and 15.1% in fiscal 1993 as compared to
the prior fiscal years. As a percentage of net sales, these costs were
63.8% in fiscal 1994, 63.6% in fiscal 1993 and 63.8% in fiscal 1992. The
percentage increase from fiscal 1993 to fiscal 1994 was due to the
shortfall in sales, which did not offset higher occupancy costs from
larger new stores, expanded existing stores and the Company's new
Distribution Center and Corporate Office in Suffern, New York. The
decrease in fiscal 1993 from fiscal 1992 as a percent of sales was due to
improved initial margins and reduced shrinkage. These factors as well as
an increase in comparable store sales offset the increase in occupancy
costs.
Selling, General and Administrative Expenses ("SG&A")
SG&A increased 12.9% in fiscal 1994 following an increase of 14.7% in
fiscal 1993. As a percentage of net sales, these costs were 30.9% in
fiscal 1994, 29.9% in fiscal 1993 and 30.1% in fiscal 1992. Continued
expense controls were not sufficient to cover the shortfall in sales.
In addition, the Company incurred $1.2 million in duplicate expenses
from its relocation to Suffern. As these charges were absorbed in fiscal
1994, it is expected that fiscal 1995 will be positively impacted from
the move. The comparable store sales gain in fiscal 1993 was the primary
factor in the reduction in SG&A expenses as a percent of sales from
fiscal 1992.
Interest Income
Interest income decreased by $611,500 or 26.2% in fiscal 1994 compared to
fiscal 1993 and decreased by $665,000 or 22.1% in fiscal 1993 compared to
fiscal 1992. In both fiscal 1994 and 1993, the increase in average
investments was offset by lower average interest rates and a modest
decline in market values. Also contributing to the decreases were
accounting adjustments in fiscal 1994 and fiscal 1993 to amortize
premiums on investment purchases.
Provision for Income Taxes
The effective tax rates were 37.0%, 36.0% and 35.2% for fiscal 1994,
1993, and 1992, respectively. The increase in the tax rate for both
fiscal 1994 and 1993 reflect the increase in the corporate federal tax
rate as specified in the Omnibus Budget Reconciliation Act of 1993 which
became effective July 1,1993, and a reduction in tax-free interest income
over the same period. Also in fiscal 1993, the Company adopted the
provisions of Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes" which did not have a material impact on the
Company's 1993 financial statements.
Net Earnings
In any period the Company's earnings depend primarily on the level of
sales, the gross profit on those sales and controls over SG&A expenses.
The factors that affect the Company's sales and margins include occupancy
costs included in CGS, the general retail climate for apparel and
competitive factors in general. The Company's fiscal 1994 earnings were
negatively impacted by the comparable store sales decrease and the
non-recurring and duplicate expenses from the relocation to Suffern. In
addition, earnings were adversely affected by the unseasonably cold and
snowy winter and a decline in interest income. As a result of these
factors, earnings decreased by 15.2% to $16,153,000 during fiscal 1994,
following an increase of 17.6% to $19,039,000 during fiscal 1993. Net
earnings as a percentage of sales were 3.5% in fiscal 1994 and 4.5% in
both fiscal 1993 and fiscal 1992. The Company's fiscal 1993 earnings
were positively affected by the comparable store sales increase and the
.2% decrease in both SG&A expenses and CGS as a percent of sales.
Liquidity and Capital Resources
During the past three fiscal years, the Company has funded, through
internally generated cash flow, all of its operating and capital needs.
These include the opening of 270 new stores, remodeling of existing
stores, the continued expansion of its successful Dress Barn Woman
division and the relocation of its Distribution Center and Corporate
Offices to Suffern. Total capital expenditures were $23,380,000,
$20,071,000 and $12,949,000 and in fiscal 1994, 1993 and 1992,
respectively. In fiscal 1994, approximately $11 million of its capital
expenditures were for the new Suffern facility.
The Company's cash and cash equivalents and marketable securities
remained virtually unchanged from the prior year as capital expenditures
were approximately equal to cash generated from operating activities.
The Company funds inventory expenditures through cash flows from
operations and the favorable payment terms the Company has established
with its vendors. This has allowed the Company's quick ratio (i.e., the
ratio of current assets less inventory to current liabilities) to remain
consistent over the past three years (1.17, 1.17 and 1.14 in the 1994,
1993 and 1992 fiscal years, respectively). In fiscal 1994, merchandise
inventories increased a modest $6,198,000 as the Company transitioned to
Fall earlier than in fiscal 1993. The Company's net cash provided by
operations in fiscal 1994 fell to $23,704,000, compared to $29,047,000
in fiscal 1993 and $24,392,000 in fiscal 1992. The decline in fiscal
1994 was due to the lower earnings, as well as more private-label
merchandise which requires immediate payment to overseas manufactures.
During this three-year period, the Company increased its cash and
investments by $22,900,000 and financed its expansion and corporate
relocation without incurring any debt.
In fiscal 1995 the Company plans to spend approximately $16,500,000 to
open approximately 135 additional stores and continue its store
remodeling program. The Company also plans to spend approximately
$3,000,000 in connection with the completion of its relocation to and
construction of its new facility in Suffern, New York. The Company
expects to finance this expansion and its foreseeable operating and
capital needs through internally generated funds.
At July 30, 1994, the Company had $52,843,000 in marketable securities.
The portfolio primarily consists of municipal bonds that can readily be
converted to cash if the need arises. The Company does not foresee
liquidating any of these investments for operating needs in fiscal 1995.
Working capital was $89,051,000 at July 30, 1994. In addition, the
Company has available $75,000,000 in unsecured lines of credit at rates
below prime. The Company had no debt outstanding under any of the lines
at July 30, 1994. However, borrowings were limited by approximately
$25 million of outstanding letters of credit.
Inflation
Inflation has historically had only a minor effect on the Company'
results of operations as the Company has generally been able to maintain
its sales prices of merchandise sold. The Company expects this trend to
continue in fiscal 1995, with no significant increase in its selling
prices planned.
Seasonality
Though the Company does not consider itself a seasonal business, it has
historically experienced substantially lower earnings in its second
fiscal quarter than during the other three fiscal quarters. This decline
reflects the intense promotional atmosphere that has accompanied the
Christmas shopping season in recent years. The Company does not expect
this trend to change in fiscal 1995 and anticipates earnings for its
second quarter of fiscal 1995 to be significantly less than the other
three quarters.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of The Dress Barn, Inc. and
subsidiaries are filed together with this report: See Index to Financial
Statements, Item 14.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
The information called for by Items 10, 11, 12 and 13 is incorporated
herein by reference from the following portions of the definitive proxy
statement to be filed by the Company in connection with its 1994 Annual
Meeting of Shareholders.
Item Incorporated from
Item 10. Directors and Executive "Election of Directors and
Officers of the Company Compensation of Executive
Officers"
Item 11. Executive Compensation "Compensation of Executive
Officers"
Item 12. Security Ownership of "Common Stock Ownership"
Certain Beneficial
Owners and Management
Item 13. Certain Relationships "Interest of Management
and Related Transactions and Others In Certain
Transactions and Compensation
of Executive Officers"
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
ITEM 14. (a)(1) FINANCIAL STATEMENTS PAGE NUMBER
Independent Auditors' Report F-1
Consolidated Balance Sheets F-2
Consolidated Statements of Earnings F-3
Consolidated Statements of Shareholders' Equity F-4
Consolidated Statements of Cash Flows F-5
Notes to Consolidated Financial Statements F-6 to F-11
ITEM 14. (a)(2) FINANCIAL STATEMENT SCHEDULES
Schedule I - Marketable Securities F-12
Schedule II - Amounts Receivable from
Related Parties and Employees F-13
Schedule V - Property, Plant and Equipment F-14
Schedule VI - Accumulated Depreciation,
Depletion and Amortization of Property,
Plant and Equipment F-15
Schedule X - Supplementary Income Statement
Information F-16
All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the
consolidated financial statements or notes thereto.
ITEM 14.(a)(3) LIST OF EXHIBITS
The following exhibits are filed as part of this Report and except
Exhibits 10(mm), 22 and 24 are all incorporated by reference (utilizing
the same exhibit numbers) from the sources shown.
Incorporated By
Reference From
3(c) Amended and Restated Certificate of Incorporation (1)
3(e) Amended and Restated By-laws (1)
3(f) Amendments to Amended and Restated Certificate of Incorporation (5)
3(g) Amendments to Amended and Restated By-laws (5)
3(h) Amendments to Amended and Restated By-Laws (6)
Incorporated By
Reference From
4. Specimen Common Stock Certificate (1)
10(a) 1993 Incentive Stock Option Plan (10)
10(b) Employment Agreement With Burt Steinberg (1)
10(c) Agreement for Issuance of Stock to Michael Palmer (1)
10(e) Agreement for Issuance of Stock to Arthur Ziluck (1)
10(f) Agreement terminating Agreement for Purchase of Certain Stock
from Elliot S. Jaffe upon death (6)
10(g) Agreement terminating Agreement for Purchase of Certain Stock
from Roslyn S. Jaffe upon death (6)
Leases of Company premises of which the lessor is Elliot S. Jaffe
or members of his family or related trusts:
10(k) Wilton, CT store (1)
10(l) Danbury, CT store (1)
10(m) Branford, CT store (1)
10(n) Greenwich, CT store (1)
10(o) Mt. Kisco, NY store (1)
10(hh) Norwalk, CT Dress Barn Woman store (8)
10(ii) Branford, CT Dress Barn Woman store (8)
10(r) Amendments to Employment Agreement with Burt Steinberg (2)
10(s) Amendment to Stock Purchase Agreement with Michael Palmer (3)
10(v) Employment Agreement with Eric Hawn (4)
10(w) Agreement for Advances with Eric Hawn (4)
10(z) Extension of Employment Agreement with Burt Steinberg (5)
10(aa) The Dress Barn, Inc. 1987 Non-Qualified Stock Option Plan (5)
Incorporated By
Reference From
10(cc) Employment Agreement with Armand Correia (7)
10(dd) Nonqualified Stock Option Agreement with Armand Correia (7)
10(ee) Nonqualified Stock Option Agreement with Michael Palmer (7)
10(ff) Nonqualified Stock Option Agreement with Elliot Jaffe (7)
10(gg) Nonqualified Stock Option Agreement with Burt Steinberg (7)
10(jj) Employment Agreement with David Montieth (8)
10(kk) Employment Agreement with David Jaffe (8)
10(ll) Employment Agreement with Sarah J. Tyson (8)
10(mm) Lease between Dress Barn and AT&T for (9)
Office and Distribution Space in Suffern, New York
22. Subsidiaries of the Registrant
24. Independent Auditors' Consent
(1) The Company's Registration Statement on Form S-1 under the Securities
Act of 1933 (Registration No. 2-82916) declared effective May 4, 1983.
(2) The Company's Annual Report on Form 10-K for the fiscal year ended
July 28, 1984.
(3) The Company's Annual Report on Form 10-K for the fiscal year ended
July 27, 1985.
(4) The Company's Annual Report on Form 10-K for the fiscal year ended
July 26, 1986.
(5) The Company's Annual Report on Form 10-K for the fiscal year ended
July 30, 1988.
(6) The Company's Annual Report on Form 10-K for the fiscal year ended
July 28, 1990.
(7) The Company's Annual Report on Form 10-K for the fiscal year ended
July 27, 1991.
(8) The Company's Annual Report on Form 10-K for the fiscal year ended
July 25, 1992.
(9) The Company's Annual Report on Form 10-K for the fiscal year ended
July 31, 1993.
(10) The Company's Registration Statement on Form S-8 under the Securities
Act of 1933 (Registration No. 33-60196) filed on March 29, 1993.
ITEM 14. (b) REPORT ON FORM 8-K
The Company has not filed any reports on Form 8-K during the last quarter
of the fiscal year ended July 30, 1994.
ITEM 14. (c) EXHIBITS
All exhibits are incorporated by reference as shown in Item 14(a)3,
except Exhibits 22 and 24 which are filed as part of this Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
The Dress Barn, Inc.
by /s/ ELLIOT S. JAFFE
Elliot S. Jaffe
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ ELLIOT S. JAFFE
Elliot S. Jaffe Chairman of the Board and 10/24/94
Chief Executive Officer
(Principal Executive Officer)
/s/ ROSLYN S. JAFFE
Roslyn S. Jaffe Director and Secretary and Treasurer 10/24/94
/s/ BURT STEINBERG
Burt Steinberg Director and President 10/24/94
and Chief Operating Officer
/s/ MICHAEL PALMER
Michael Palmer Director 10/24/94
/s/ KLAUS EPPLER
Donald Jonas Director 10/24/94
/s/ DONALD JONAS
Donald Jonas Director 10/24/94
/s/ EDWARD D. SOLOMON
Edward D. Solomon Director 10/24/94
/s/ ARMAND CORREIA
Armand Correia Chief Financial Officer (Principal 10/24/94
Financial and Accounting Officer)
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
The Dress Barn, Inc.
Stamford, Connecticut
We have audited the accompanying consolidated balance sheets of
The Dress Barn, Inc. and subsidiaries as of July 30, 1994 and July 31, 1993,
and the related statements of earnings, shareholders' equity, and cash flows
for each of the three years in the period ended July 30, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
The Dress Barn, Inc. and subsidiaries as of July 30, 1994 and July 31, 1993,
and the results of their operations and their cash flows for each of the three
years in the period ended July 30, 1994, in conformity with generally accepted
accounting principles.
Our audits also comprehended the schedules listed in the index at Item
14(a)(2). In our opinion, such schedules, when considered in relation to the
basic financial statements, present fairly in all material respects the
information shown therein.
Deliotte & Touche LLP
Stamford, Connecticut
September 23, 1994
F-1
The Dress Barn, Inc. and Subsidiaries
Consolidated Balance Sheets
July 30, July 31,
ASSETS 1994 1993
Current Assets:
Cash & cash equivalents $6,668,006 $10,054,792
Marketable securities 55,321,978 51,023,754
Merchandise inventories 79,601,016 73,403,238
Prepaid expenses and other 4,237,426 8,100,021
Total Current Assets 145,828,426 142,581,805
Property and Equipment:
Leasehold improvements 43,173,926 35,013,977
Fixtures and equipment 66,026,065 56,058,888
Computer software 6,360,151 4,135,985
Automotive equipment 251,571 316,408
115,811,713 95,525,258
Less accumulated depreciation
and amortization 44,459,195 36,578,447
71,352,518 58,946,811
Other Assets 681,711 857,041
$217,862,655 $202,385,657
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable- trade $41,700,608 $39,990,472
Accrued expenses 13,041,013 15,698,909
Customer credits 1,141,523 1,406,987
Income taxes payable 894,395 2,009,266
Total Current Liabilities 56,777,539 59,105,634
Deferred Income Taxes 1,887,163 1,277,351
Commitments (Note 6)
Shareholders' Equity:
Preferred stock, par value $.05 per share:
Authorized- 100,000 shares
Issued and outstanding- none -- --
Common stock, par value $.05 per share:
Authorized- 30,000,000 shares
Issued- 23,266,768 and 23,134,662
shares, respectively
Outstanding- 22,261,768 and 22,129,662
shares, respectively 1,161,338 1,156,733
Additional paid-in capital 13,826,628 12,789,169
Retained earnings 149,915,599 133,762,382
Treasury stock, at cost (5,705,612) (5,705,612)
159,197,953 142,002,672
$217,862,655 $202,385,657
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings
Year Ended
July 30, July 31, July 25,
1994 1993 1992
Net sales $457,324,621 $419,585,581 $363,089,914
Costs and expenses:
Cost of sales, including
occupancy and buying costs 291,937,984 266,867,616 231,829,749
Selling, general and administrative 141,473,138 125,307,922 109,270,919
Interest (income) - net (1,726,717) (2,338,217) (3,002,872)
431,684,405 389,837,321 338,097,796
Earnings before income taxes 25,640,216 29,748,260 24,992,118
Income taxes 9,487,000 10,709,000 8,798,000
Net Earnings $16,153,216 $19,039,260 $16,194,118
Earnings per share $0.73 $0.86 $0.74
Weighted average shares outstanding 22,177,063 22,019,742 21,805,478
See notes to consolidated financial statements
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of
Shareholders' Equity
Additional Total
Common Stock Treasury Paid-In Retained Shareholders'
Shares Amount Stock Capital Earnings Equity
Balance,July 27, 1991
21,716,383 $1,136,069 ($5,705,612) $8,996,479 $98,529,004 $102,955,940
Deferred compensation
68,555 3,428 497,581 501,009
Employee Stock Purchase Plan activity
17,606 881 262,971 263,852
Shares issued pursuant to exercise of stock options
16,321 816 90,127 90,943
Shares issued in connection with purchase
of JRL Consulting Corp.
28,588 1,429 331,904 333,333
Net earnings 16,194,118 16,194,118
Balance,July 25, 1992
21,847,453 1,142,623 (5,705,612) 10,179,062 114,723,122 120,339,195
Tax effect of deferred compensation
882,151 882,151
Employee Stock Purchase Plan activity
36,366 1,818 367,372 369,190
Shares issued pursuant to exercise of stock options
217,255 10,863 1,028,679 1,039,542
Shares issued in connection with purchase
of JRL Consulting Corp.
28,588 1,429 331,905 333,334
Net earnings 19,039,260 19,039,260
Balance,July 31, 1993
22,129,662 1,156,733 (5,705,612) 12,789,169 133,762,382 142,002,672
Deferred compensation
15,000 750 453,730 454,480
Employee Stock Purchase Plan activity
35,244 1,762 390,046 391,809
Shares issued pursuant to exercise of stock options
41,862 2,093 193,683 195,776
Net earnings 16,153,216 16,153,216
Balance,July 30, 1994
22,221,768 $1,161,338 ($5,705,612) $13,826,628 $149,915,599 $159,197,953
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Year Ended
July 30, July 31, July 25,
1994 1993 1992
Operating Activities:
Net earnings $16,153,216 $19,039,260 $16,194,118
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of property and
equipment 10,974,527 9,177,014 7,689,825
Increase (decrease) in
deferred income taxes 609,812 (711,159) (124,373)
Deferred compensation 251,480 331,151 501,009
Changes in assets and liabilities:
(Increase) in merchandise
inventories (6,197,778) (7,071,023) (17,904,919)
Decrease (increase) in
prepaid expenses 3,862,595 (616,772) (480,374)
Decrease (increase) in other assets 175,330 274,274 (106,978)
Increase - accounts payable- trade 1,710,136 6,243,082 16,544,765
(Decrease) increase in
accrued expenses (2,657,896) 2,019,572 3,061,161
(Decrease) Increase in
customer credits (265,464) 298,906 (654,954)
(Decrease) increase in
income taxes payable (590,059) 62,588 (327,647)
Total adjustments 7,872,683 10,007,633 8,197,515
Net cash provided
by operating activities 24,025,899 29,046,893 24,391,633
Investing Activities
Purchases of
property and equipment (23,380,234) (20,071,480) (12,948,881)
Sales and maturities
of marketable securities 9,516,454 21,030,349 17,066,624
Purchases of marketable securities (13,814,678) (25,990,948) (25,665,328)
Payment for purchase of JRL Consulting Corp. - - (156,760)
Net cash used
in investing activities (27,678,458) (25,032,079) (21,704,345)
Financing Activities
Proceeds from
Employee Stock Purchase Plan 391,809 369,190 263,852
Proceeds from stock options exercised 195,776 1,039,542 90,943
Net cash provided
by financing activities 587,585 1,408,732 354,795
Net increase (decrease)
in cash and cash equivalents (3,064,974) 5,423,546 3,042,083
Cash and cash equivalents
- - beginning of period 10,054,792 4,631,246 1,589,163
Cash and cash equivalents-end of period $6,989,818 $10,054,792 $4,631,246
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $9,285,361 $11,357,571 $9,284,177
See notes to consolidated financial statements
The Dress Barn, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Years Ended July 30, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
The Dress Barn, Inc. operates a chain of off-price women's apparel
stores. The stores, operating principally under the name
"Dress Barn", offer in-season, moderate to better quality fashion
apparel. The Company operates in one business segment.
Principles of consolidation
The consolidated financial statements include the accounts of
The Dress Barn, Inc. and its wholly-owned subsidiaries (the
"Company"). All material intercompany balances and transactions
have been eliminated.
Merchandise inventories
Merchandise inventories are valued at the lower of cost, on a first-
in, first-out basis, or market as determined by the retail method.
Property and equipment
Property and equipment are stated at cost. Depreciation and
amortization are computed using the straight-line method over the
estimated useful lives of the related assets which range from 3 to
10 years. For income tax purposes, accelerated methods are generally
used.
Income taxes
The Company changed its method of accounting for income taxes,
effective July 26, 1992, to conform with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes".
Deferred income taxes are provided using the asset and liability
method, whereby deferred income taxes result from temporary
differences between the tax basis of assets and liabilities and their
reported amounts in the financial statements.
Fiscal year
The Company reports on a 52-53 week fiscal year ending on the last
Saturday in July. The fiscal year ended July 31, 1993 consisted of 53
weeks while all other years presented consist of 52 weeks.
Store preopening costs
Expenses associated with the opening of new stores are charged to
expense as incurred.
F-6
Marketable securities
Marketable securities are reported at the lower of cost or market.
The fair value of the Company's marketable securities at July 30,
1994 was $55,322,000, which is based on quoted market prices. In May
1993, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 115,"Accounting for Certain Investments in Debt and Equity
Securities." The adoption of this statement should not have a
material impact on the Company.
Earnings per share
Earnings per share is based on the weighted average number of common
shares and common share equivalents outstanding for the years
presented.
Cash and cash equivalents
For purposes of the statement of cash flows, the Company considers
its highly liquid overnight investments to be cash equivalents.
Reclassifications
Certain amounts in prior year's financial statements have been
reclassified for comparative purposes.
2. ACQUISITION OF JRL CONSULTING CORP.
In April 1990, the Company purchased all of the assets of JRL Consulting
Corp.("JRL"). The purchase price was $2,556,756, payable $400,000 in cash
upon closing, $156,760 additional cash paid during Fiscal 1992 and the
remainder paid in scheduled installments through August 1992. There are
also contingent payments based upon future performance. The fiscal 1993
and 1992 scheduled installments were each paid through the issuance of
28,588 shares of the Company's common stock, which were valued at the
fair market value of the stock on the date of closing. There were no
payments made during fiscal 1994.
3. DEBT
The Company had no long-term debt outstanding at any time during the
three years ended July 30, 1994.
At July 30, 1994 the Company had unsecured lines of credit with three
banks totaling $75,000,000, with interest payable at rates below prime.
All of the Company's lines of credit contain no significant covenants or
commitment fees. The Company had no debt outstanding under any of the
lines at July 30, 1994. However, borrowings were limited by
approximately $25 million of outstanding letters of credit.
F-7
4. EMPLOYEE BENEFIT PLANS
The Company maintains a discretionary profit-sharing plan for eligible
employees. Amounts charged to operations for the plan were $575,000,
$685,000, and $438,000 for the years ended July 30, 1994, July 31, 1993
and July 25, 1992, respectively.
The provisions of SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other than Pensions" and SFAS No. 112, "Employers' Accounting
for Postretirement Benefits" do not affect the Company's financial
position as the Company does not provide the benefits contemplated by
these statements.
5. INCOME TAXES
The components of the provision for income taxes are as follows:
Year ended
July 30, July 31, July 25,
1994 1993 1992
Federal:
Current $7,280,000 $9,027,000 $7,061,000
Deferred 228,000 (757,000) (377,000)
7,508,000 8,270,000 6,684,000
State:
Current 1,919,000 2,604,000 2,216,000
Deferred 60,000 (165,000) (102,000)
1,979,000 2,439,000 2,114,000
$9,487,000 $10,709,000 $8,798,000
Significant components of the Company's deferred tax liabilities and
assets as of July 30, 1994 are:
July 30, July 31,
1994 1993
Deferred tax liabilities:
Depreciation $4,646,641 $5,118,111
Other items 3,027,557 1,413,629
Total deferred tax liabilities 7,674,198 6,531,740
Deferred tax assets:
Inventory capitalization for tax purposes 2,067,669 2,049,434
Other items 3,719,366 3,204,955
Total deferred tax assets 5,787,035 5,254,389
Net deferred tax liabilities $1,887,163 $1,277,351
F-8
The net deferred tax liabilities are comprised of approximately $352,000
in state deferred taxes and $1,535,000 in federal deferred taxes.
Following is a reconciliation of the statutory Federal income tax rate
and the effective income tax rate applicable to earnings before income
taxes:
Year ended
July 30, July 31, July 25,
1994 1993 1992
Statutory tax rate 35.0% 34.0% 34.0%
State taxes - net of federal
benefit 5.5 5.9 6.1
Other - net (3.5) (3.9) (4.9)
Effective tax rate 37.0% 36.0% 35.2%
As discussed in Note 1, the Company adopted Statement of Financial
Accounting Standards No.109, "Accounting for Income Taxes" during the
fiscal year ended July 31, 1993. This adoption did not have a material
impact on the Company's financial position or results of operations.
6. COMMITMENTS
Lease commitments
The Company leases all its stores and warehouses. Certain leases
provide for additional rents based on percentages of net sales,
charges for real estate taxes, insurance and other occupancy costs.
Store leases generally have an initial term ranging from 5 to 15
years with one or more 5 year options to extend the lease. Some of
these leases have provisions for rent escalations during the initial
term. In July 1993, the Company entered into a lease for 510,000
square feet of office and distribution space in Suffern, New York.
The lease has an initial term of 14 years with three 5 year options
to extend the lease.
A summary of rental expense is as follows:
Year ended
July 30, July 31, July 25,
1994 1993 1992
Base rentals $42,641,000 $36,804,000 $30,771,000
Percentage rentals 49,000 388,000 375,000
Other occupancy costs 13,796,000 11,237,000 9,283,000
Total $56,586,000 $48,429,000 $40,429,000
F-9
The following is a schedule of future minimum rentals under
noncancellable operating leases as of July 30, 1994:
Fiscal Year Amount
1995 $ 41,360,000
1996 35,166,000
1997 28,761,000
1998 21,909,000
1999 15,008,000
Subsequent years 44,024,000
Total future minimum rentals $186,228,000
Although the Company has the ability to cancel certain leases if
specified sales levels are not achieved, future minimum rentals under
such leases have been included in the above table.
Leases with related parties
The Company leases seven stores from the Chief Executive Officer or
from related trusts. Future minimum rentals under leases with such
related parties which extend beyond July 30 1994, included in the
above schedule, are approximately $132,000 annually and aggregate
$1,587,000. The leases also contain provisions for cost escalations
and additional rent based on net sales in excess of stipulated
amounts. Rent expense for fiscal years 1994, 1993, and 1992 under
these leases amounted to approximately $430,000, $413,000 and
$240,000, respectively.
7. STOCK OPTION PLANS
The Company's 1983 Incentive Stock Option Plan expired on
April 4,1993 as far as the ability to grant options. The Company's
shareholders approved the 1993 Incentive Stock Option Plan, which
contains provisions similar to the expired plan. The 1993 Plan
provides for the grant of options to purchase up to 1,250,000 shares
of common stock. The exercise price of the options granted under
both plans may not be less than the market price of the common stock
at the date of grant. The Company's 1987 Non-Qualified Stock Option
Plan provides for the grant of options to purchase up to 1,000,000
shares of common stock to key employees. Compensation expense
resulting from the issuance of non-qualified options is recognized
on a straight-line basis over the term of the option agreement. All
options granted under both plans vest over a five year period. As of
July 30, 1994, 408,465 of the options issued to date were
exercisable.
F-10
The following summarizes the activities in all Stock Option Plans:
Number of Option Price Range
Shares (Per share)
Outstanding - July 25, 1992 1,052,206 $ 3.00 - 11.75
Granted 25,000 6.00 - 12.50
Exercised (217,255) 3.00 - 9.75
Canceled (36,849) 5.36 - 8.23
Outstanding - July 31,1993 823,102 $ 3.00 - 12.50
Granted 528,950 10.53 - 11.25
Exercised (41,862) 5.36 - 8.25
Canceled ( 52,848) 5.36 - 8.38
Outstanding - July 30,1994 1,257,342 $ 3.00 - 12.50
8. QUARTERLY RESULTS OF OPERATIONS (unaudited)
($000 omitted except per share amounts)
Fourth Third Second First
Quarter Quarter Quarter Quarter
Year ended July 30, 1994
Net Sales $118,186 $112,862 $106,577 $119,700
Gross Profit,
less occupancy
and buying costs 41,709 41,925 35,966 45,822
Income Taxes 1,930 2,530 1,250 3,762
Net Earnings 3,285 4,307 2,129 6,406
Earnings Per Share $ .15 $ .19 $ .10 $ .29
Fourth Third Second First
Quarter Quarter Quarter Quarter
Year ended July 31, 1993
Net Sales $120,829 $95,225 $98,583 $104,948
Gross Profit,
less occupancy
and buying costs 42,883 35,274 35,456 39,105
Income Taxes 3,758 1,967 1,864 3,120
Net Earnings 6,681 3,498 3,314 5,546
Earnings Per Share $ .30 $ .16 $ .15 $ .25
F-11
THE DRESS BARN, INC. AND SUBSIDIARIES
SCHEDULE I
MARKETABLE SECURITIES Amount at
Year end July 30, 1994 which each
portfolio of
Number of shares Cost of Market value equity security
Name and issuer or units-principal each of each issue isuues and each
of each issue bonds and notes issue at balance other security
sheet issues carried
date in the balance
sheet
Municipal Bonds 44,320,000 $48,091,367 $46,407,065 $46,407,065
Govt Income Securities Fund
194,261 1,878,032 1,674,531 1,674,531
Overnight Tax Exempt Funds 7,240,382 7,240,382 7,240,382 7,240,382
TOTAL $57,209,781 $55,321,978 $55,321,978
THE DRESS BARN, INC. AND SUBSIDIARIES
SCHEDULE II
AMOUNTS RECEIVABLE FROM RELATED PARTIES, UNDERWRITERS
AND EMPLOYEES (OTHER THAN RELATED PARTIES)
Balance at Deductions Balance at end of period
Name of beginning Amounts Amounts
Debtor of period Additions Collected Written off Current Not current
Year ended July 30, 1994
Eric Hawn (1)
$160,265 $16,250 - $53,422 - $123,094
Armand Correia (2)
100,000 - - 15,000 - 85,000
Year ended July 31, 1993
Eric Hawn (1)
229,937 - 16,250 53,422 - 160,265
Armand Correia (2)
0 100,000 - - - 100,000
Year ended July 25, 1992
Eric Hawn
291,859 16,250 24,750 53,422 - 229,937
(1) As of July 30, 1994, balance consisted of interest bearing secured
advances of $106,844 related to tax liabilities resulting from the issuance
of common stock on June 10, 1986 and a $16,250 interest bearing loan for
additional income taxes . The Company has agreed to forgive the interest on
the advances as it accrues on an annual basis.
(2) As of July 30, 1994, balance consisted of interest bearing secured
advances of $85,000 related to moving expenses incurred in 1993. The Company
has agreed to forgive the interest on the advances as it accrues and
principal in lieu of a salary increase on an annual basis.
THE DRESS BARN, INC. AND SUBSIDIARIES
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
Balance at Balance at
beginning Additions end of
of period at cost Retirements period
Classification
Year ended July 30, 1994
Leasehold improvements $35,013,977 $9,750,807 $1,590,858 $43,173,926
Fixtures and equipment 56,058,888 13,101,524 3,134,347 66,026,065
Computer software 4,135,985 2,674,270 450,104 6,360,151
Automotive equipment 316,408 15,500 80,337 251,571
95,525,258 25,542,101 5,255,646 115,811,713
Year ended July 31, 1993
Leasehold improvements 27,251,655 8,774,268 1,011,946 35,013,977
Fixtures and equipment 44,231,584 12,603,138 775,834 56,058,888
Computer software 3,645,208 490,777 0 4,135,985
Automotive equipment 539,706 31,415 254,713 316,408
75,668,153 21,899,598 2,042,493 95,525,258
Year ended July 25, 1992
Leasehold improvements 23,450,177 5,372,598 1,571,120 27,251,655
Fixtures and equipment 36,081,601 8,817,153 667,170 44,231,584
Computer software 3,086,015 638,713 79,520 3,645,208
Automotive equipment 587,197 29,219 76,710 539,706
$63,204,990 $14,857,683 $2,394,520 $75,668,153
THE DRESS BARN, INC. AND SUBSIDIARIES
SCHEDULE VI
ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
Balance at Balance at
beginning Additions end of
of period at cost Retirements period
Classification
Year ended July 30, 1994
Leasehold improvements $13,660,711 $3,978,703 $ 671,379 $16,968,035
Fixtures and equipment 20,407,647 6,940,402 2,906,463 24,441,586
Computer software 2,302,555 1,009,131 450,104 2,861,582
Automotive equipment 207,534 41,049 60,591 187,992
36,578,447 11,969,285 4,088,537 44,459,195
Year ended July 31, 1993
Leasehold improvements 10,747,055 3,309,635 395,979 13,660,711
Fixtures and equipment 15,285,793 5,737,601 615,747 20,407,647
Computer software 1,566,059 736,496 0 2,302,555
Automotive equipment 350,235 56,560 199,261 207,534
27,949,142 9,840,292 1,210,987 36,578,447
Year ended July 25, 1992
Leasehold improvements 8,456,910 2,754,322 464,177 10,747,055
Fixtures and equipment 11,328,762 4,624,201 667,170 15,285,793
Computer software 978,318 667,261 79,520 1,566,059
Automotive equipment 314,378 84,380 48,523 350,235
$21,078,368 $8,130,164 $1,259,390 $27,949,142
THE DRESS BARN, INC. AND SUBSIDIARIES
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
Charges to costs and expenses for
the fiscal period ending
July 30, July 31, July 25,
1994 1993 1992
Maintenance and repairs $10,035,726 $8,370,130 $6,704,837
Depreciation and amortization
of intangible assets * * *
Taxes, other than payroll
and income taxes * * *
Royalties * * *
Advertising costs 6,151,954 5,684,618 5,229,761
* Less than 1% of total revenue
EXHIBIT 22
THE DRESS BARN, INC.
SUBSIDIARIES OF THE REGISTRANT
(All 100% Owned)
State of
Subsidiary Incorporation
D.B.I., Inc. (*) Delaware
D.B.R., Inc. Delaware
The Dress Barn, Inc. of
New Hampshire, Inc. (**) New Hampshire
Raxton Corp. (**) Massachusetts
JRL Consulting Corp. New Jersey
D.B.X. Inc. New York
(*) Merged into D.B.R., Inc. in May 1991
(**) Inactive Subsidiary
F-17
EXHIBIT 24
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in registration statement Nos.
33-16857 and 33-17488 (on Form S-8) and 33-16856 (on Form S-3) of our report,
dated September 23, 1994 on the consolidated financial statements of
The Dress Barn, Inc. and subsidiaries in the
Annual Report on Form 10-K for the year ended July 30, 1994.
Deliotte & Touche LLP
Stamford, Connecticut
September 23, 1994
F-18