SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM 10-K
(Mark One)
  [ X ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934
         For the fiscal year ended January 30, 1999
                            OR
  [    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934
         For the transition period from ________________ to _______________

                         Commission file Number 0-14681

                                 J. BAKER, INC.
             (Exact name of registrant as specified in its charter)

              Massachusetts                  04-2866591
         (State of Incorporation)      (IRS Employer Identification Number)

                555 Turnpike Street, Canton, Massachusetts 02021
                    (Address of principal executive offices)

                             (781) 828-9300
                (Registrant's telephone number, including area code)

        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 $.50 per share
                   7% Convertible Subordinated Notes Due 2002
                         Preferred Stock Purchase Rights
                                (Title of Class)

         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  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  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ X ]

         As of April 1, 1999, the aggregate market value of voting stock held by
non-affiliates  of Registrant  was  $49,665,367  based on the last reported sale
price of Registrant's common stock on The Nasdaq Stock Market(R).

         14,064,139 shares of common stock were outstanding on April 1, 1999.

                       DOCUMENTS INCORPORATED BY REFERENCE
         Portions  of  Registrant's  definitive  proxy  statement  to  be  filed
pursuant to Regulation 14A within 120 days after the end of Registrant's  fiscal
year are incorporated by reference in Part III.


<PAGE>


                                 J. Baker, Inc.
                               Report on Form 10-K
                           Year Ended January 30, 1999
                                     Part I

STATEMENTS  MADE OR  INCORPORATED  INTO THIS ANNUAL  REPORT  INCLUDE A NUMBER OF
FORWARD-LOOKING  STATEMENTS  WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934.
FORWARD-LOOKING  STATEMENTS INCLUDE,  WITHOUT LIMITATION,  STATEMENTS CONTAINING
THE WORDS "ANTICIPATES," "BELIEVES," "EXPECTS," "INTENDS," "FUTURE" AND WORDS OF
SIMILAR  IMPORT,  WHICH  EXPRESS  MANAGEMENT'S  BELIEF,  EXPECTATION  OR  INTENT
REGARDING THE  COMPANY'S  FUTURE  PERFORMANCE.  THE  COMPANY'S  ACTUAL  RESULTS,
PERFORMANCE OR ACHIEVEMENTS  COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THE
FORWARD-LOOKING  STATEMENTS.   FACTORS  THAT  MAY  CAUSE  SUCH  DIFFERENCES  ARE
DESCRIBED  IN THE  SECTION  ENTITLED  "CERTAIN  FACTORS  THAT MAY AFFECT  FUTURE
RESULTS" FOUND ON PAGE 17 OF THIS ANNUAL REPORT.

Item 1.  BUSINESS

General
         J. Baker,  Inc. ("J. Baker" or the "Company",  which term shall include
all  subsidiaries  of the  Company) is engaged in the retail sale of apparel and
footwear  in three niche  markets.  The Company is engaged in the retail sale of
apparel through (i) its chain of Casual Male Big & Tall men's stores, which sell
fashion, casual and dress clothing and footwear to the big and tall man and (ii)
its chain of Work 'n Gear work clothing  stores,  which sell a wide selection of
workwear as well as  health-care  apparel and  uniforms for industry and service
businesses  and  its RX  Uniforms  stores,  which  exclusively  sell  healthcare
apparel.  The Company sells  footwear  through  self-service  licensed  footwear
departments in discount department stores.

         The  Company's  businesses  are  seasonal.  The Casual  Male Big & Tall
division  generates  its largest sales  volumes in June  (Father's  Day) and the
Christmas  season,  and the Work 'n Gear  division  generates  its largest sales
volume during the second half of the fiscal year. The Company's largest footwear
sales volume is generated in the Easter,  back-to-school  and Christmas seasons.
On a combined  basis,  the Company's sales during the second half of each fiscal
year have consistently exceeded sales during the first half of each fiscal year.
Unseasonable  weather  may  affect  sales of shoes  and  boots,  as well as cold
weather  related  apparel and work clothing,  especially  during the traditional
high-volume periods.

         The Company is required to carry a  substantial  inventory  in order to
provide prompt  deliveries to its Casual Male Big & Tall and Work 'n Gear stores
and its licensed footwear departments. Order backlogs, however, are not material
to the  Company's  business.  The  inventories  needed in the  operation  of the
Company's apparel and footwear  businesses are currently available from a number
of domestic and overseas sources, with no single source accounting for more than
seven percent of the Company's merchandise.

         The  Company  benefits by "most  favored  nation"  provisions  in trade
agreements  between  the  United  States  and  certain  countries  in which  the
Company's  suppliers are located.  From time to time, the United States Congress
has proposed  legislation that could result in such provisions being struck from
particular trade agreements, which could, in turn, result in higher costs to the
Company. There has been extensive Congressional debate with respect to the "most
favored nation"  provision of the trade agreement  between the United States and
China,  which was renewed for one year in July, 1992 and has since been extended
through  July,  1999.  The failure of this  provision to be renewed would likely
result in  substantially  increased  costs to the  Company  in the  purchase  of
footwear  from China.  However,  the Company  believes  its  competitors  in the
footwear industry would be similarly affected.

Recent Developments

Potential Repp Acquisition.
         On April 12,  1999,  the  Company  executed  a letter of intent for the
acquisition (the "Repp Acquisition") of all of the assets of the Repp Ltd. Big &
Tall and Repp Ltd. by Mail divisions of Edison Brothers Stores, Inc. ("Edison").
Edison is currently operating as a debtor-in-possession  under Chapter 11 of the
United States  Bankruptcy Code, as amended.  The proposed  purchase price of $33
million, subject to adjustment,  is for the acquisition of 175 United States and
Canadian Repp Ltd. Big & Tall retail  locations  (subject to the Company's right
to compel Edison to reject the leases for up to 30 locations)  and the Repp Ltd.
by Mail catalog business.  The Company has also executed a letter of intent with
Grafton-Fraser,  Inc.,  which  operates  big & tall  stores in  Canada,  for the
disposition of up to 16 Canadian Repp Ltd. Big & Tall locations.

         On April 15,  1999,  each of the Board of  Directors of the Company and
Edison approved  entering into a definitive  purchase  agreement with respect to
the Repp Acquisition.  Closing of the Repp Acquisition,  however,  is subject to
the approval of the United States  Bankruptcy Court for the District of Delaware
after  conducting  a procedure in the  bankruptcy  court for the  submission  of
higher and  better  offers  for the Repp Ltd.  Big & Tall and Repp Ltd.  by Mail
businesses (the  "Auction").  The date of the Auction is anticipated to be on or
about May 15, 1999. The closing of the Repp  Acquisition  is further  contingent
upon the Company's  completion  of its due diligence  review and the securing of
adequate financing to consummate the Repp Acquisition.

Ames Department Stores Acquisition of Hills Stores Company
         On November 12, 1998 Ames Department Stores, Inc. ("Ames") entered into
an agreement for the acquisition of Hills Stores Company ("Hills").  The Company
has operated  licensed  footwear  departments in each of Ames' and Hills' stores
pursuant to license agreements with each such entity. On December 31, 1998, Ames
acquired control of Hills through its acquisition of  substantially  more than a
majority of Hills' outstanding common stock and convertible  preferred stock and
notes. In March,  1999 Ames consummated the merger of Hills into a subsidiary of
Ames.

         At the time of the acquisition,  Hills operated 155 discount department
stores in twelve states. In February,  1999, Ames began a program to remodel and
convert 150 of the  acquired  Hills  stores to Ames  stores in three  sequential
phases of  approximately  50 stores each.  Upon the completion of the remodeling
and conversion process,  all such stores will be incorporated into the Company's
license agreement with Ames on the same terms and conditions as presently exist.
The  first  stage of  remodeling,  involving  50  stores,  is  complete  and the
remodeled  stores  opened on April 22,  1999.  The second  stage,  involving  54
stores,  is  scheduled  to be  completed  in  July,  1999 and the  final  stage,
involving 46 stores,  is scheduled to be completed in  September,  1999.  During
these  three  stages  of  store  closings,   the  Company  has  participated  in
liquidation  sales of its footwear  inventory in each store.  The first stage of
liquidation  sales ended on February 22,  1999,  and the second and third stages
are  scheduled to be completed  on May 21 and July 26, 1999,  respectively.  See
Note 9 to the Consolidated Financial Statements.

Bradlees Reorganization
      On June 23, 1995,  Bradlees Stores, Inc.  ("Bradlees"),  a licensor of the
Company,  filed for protection under Chapter 11 of the United States  Bankruptcy
Code. At the time of the bankruptcy filing, the Company had outstanding accounts
receivable of approximately  $1.8 million due from Bradlees.  On April 13, 1998,
Bradlees filed its Joint Plan of  Reorganization  and Disclosure  Statement (the
"Plan") with the United States Bankruptcy Court for the Southern District of New
York,  which,  as amended,  was confirmed on November 18, 1998.  The Plan became
effective on February 2, 1999 (the  "Effective  Date"),  the  Company's  license
agreement  with  Bradlees was amended and assumed and the  reorganized  Bradlees
emerged from bankruptcy.  Pursuant to the amended agreement,  ten days after the
Effective Date Bradlees made a cash distribution to the Company in the amount of
$360,000 and shall pay the unpaid balance of the Company's pre-petition claim in
thirty-six equal monthly installments commencing on March 1, 1999, with interest
on such  outstanding  balance  commencing with the seventh monthly  payment.  As
provided in the  amended  licensed  agreement,  upon the  occurrence  of certain
events, the entire unpaid balance of the Company's claim shall be paid within 30
days after such occurrence,  without penalty or interest. The Company's sales in
the  Bradlees  chain for the  fiscal  year  ended  January  30,  1999 were $43.9
million. See Note 10 to the Consolidated Financial Statements.

Other
         On March 10,  1997,  the Company  sold its Parade of Shoes  division to
Payless  ShoeSource,   Inc.  ("Payless")  of  Topeka,   Kansas.  For  additional
information on the sale of the Parade of Shoes division,  see Industry Segments,
Footwear,  Footwear  Restructuring,  and  Note 9 to the  Consolidated  Financial
Statements.

         On March 5, 1997,  the  Company  sold its Shoe  Corporation  of America
("SCOA")  division  to an  entity  formed by CHB  Capital  Partners  of  Denver,
Colorado along with Dennis B. Tishkoff,  President of SCOA, and certain  members
of SCOA management. For additional information on the sale of SCOA, see Industry
Segments,  Footwear,  Footwear  Restructuring,  and  Note 9 to the  Consolidated
Financial Statements.

Industry Segments
     The Company is engaged in the sale of apparel and footwear  manufactured by
others.  Financial  information with respect to the Company's  industry segments
can be found in Note 12 to the Consolidated Financial Statements. 

Apparel

Casual Male Big & Tall Division
         Casual Male Big & Tall,  the  Company's  chain of big and tall  apparel
stores, provides fashion, casual and dress clothing and footwear for the big and
tall man.  The chain  specializes  in a wide range of high  quality  apparel and
accessories  for big (waist sizes from 40" to 66") and tall (6'2" or taller) men
at moderate prices. The Company believes the clothing demands of these customers
historically have not been met through traditional men's apparel stores. The big
and tall customer  frequently  has difficulty  finding an adequate  selection of
apparel in his size in department and men's specialty stores. Furthermore,  only
a limited number of big and tall specialty stores exist and these typically have
a narrow selection of current sportswear fashions.

         Casual Male Big & Tall stores offer private label as well as brand name
casual sportswear and dress wear in a broad array of styles,  colors and fabrics
with a focus on basic  merchandise such as sports coats,  dress pants and shirts
and a wide variety of casual clothing, including footwear. The stores target the
middle-income  customer  seeking good value at moderate  prices and as a result,
Casual Male limits the amount of high-fashion oriented and low-turnover tailored
clothing  offered and  focuses  primarily  on basic  items and  classic  fashion
sportswear,  thereby minimizing fashion risk and markdowns.  Management believes
its type and selection of  merchandise,  favorable  prices and ability to obtain
desirable store locations are key factors in enabling it to compete effectively.
Casual  Male Big & Tall  started  fiscal 1999 with 459 stores and ended the year
with 453  stores in 47  states,  having  opened 10 stores  and closed 16 stores.
Sales in Casual Male Big & Tall stores  accounted for 45.8%,  43.4% and 26.9% of
the Company's  total revenues for the years ended January 30, 1999,  January 31,
1998 and February 1, 1997, respectively.

         The Company's Casual Male Big & Tall division faces  competition from a
variety of sources,  including  department  stores,  specialty stores,  discount
stores and off-price and other retailers that sell big and tall merchandise.  In
addition,  sales of  apparel  through  catalogs,  e-commerce  and home  shopping
networks or other  electronic media provide  additional  sources of competition.
Casual Male faces  competition on a local level from  independent  retailers and
small,  regional retail chains,  as well as on a national scale from chains such
as Rochester Big & Tall and Repp Ltd., a division of Edison  Brothers,  Inc. For
additional  information,  see Recent  Developments,  Potential Repp Acquisition.
While  Casual  Male  has  successfully  competed  on the  basis  of  merchandise
selection,  inventory  replenishment  on an  on-going  basis by color  and size,
favorable pricing and desirable store locations, there can be no assurance other
retailers will not adopt  purchasing and marketing  concepts similar to those of
Casual Male Big & Tall. In addition,  discount retailers with significant buying
power,  such as Wal-Mart,  K-Mart and Target  stores,  represent  an  increasing
source of competition  for Casual Male. The bulk of the  merchandise  carried by
these  department  stores is classified as commodity,  or "basic" items, but the
stores'  buying power  provides them with a  competitive  edge and an ability to
charge low prices for such items.

         In  deciding to open Casual Male  stores,  the Company  reviews  market
demographics, drive-by visibility for customers, store occupancy costs and costs
to build and stock each location.  Considering these factors and others, Company
management  projects  sales  volumes  and  estimates  operating  costs  for each
location  and  decides  to  open a  store  if such  projections  demonstrate  an
acceptable  return on the Company's  inventory and fixed asset investment can be
realized.  New Casual Male stores  require an average  inventory and fixed asset
investment  of  approximately  $185,000 to $220,000,  composed of  approximately
$100,000 to $120,000 for fixed assets and $85,000 to $100,000 for inventory.

         The  Company  makes  decisions  to close  Casual  Male  locations  when
management believes these locations are not generating acceptable profit levels.
Most store  closings  occur at lease  expiration,  unless lease buyout is a more
economical option for the Company. The costs to close stores are expensed at the
time the decision is reached to close the store.

Work 'n Gear Division
         Work 'n Gear is the Company's  specialty  retail chain focused entirely
on utility workwear,  uniforms,  healthcare  apparel and footwear.  Work 'n Gear
stores carry a wide selection of workwear  products,  including rugged specialty
outerwear, work shirts and pants, cold weather accessories and footwear, as well
as a  complete  line  of  uniforms  for  industry  and  service  businesses  and
healthcare  apparel.  Work 'n Gear started  fiscal 1999 with 66 stores and ended
the year with 67 stores (two  stores are  operated  under the name RX  Uniforms,
which exclusively sell healthcare apparel), having opened 1 store. The 67 stores
are located in 13 states in the  Northeastern and Midwestern  United States.  In
addition,  Work 'n Gear  sells its  products  through a direct  corporate  sales
force,  which  markets  workwear  and  uniforms  to  large  corporate  accounts,
including supermarket chains and private security companies.

         The National  Association  of Uniform  Manufacturers  and  Distributors
estimates  approximately  26 million people in the United States work force wear
workwear.  Although manufacturing industries are generally on the decline in the
United  States,   service   industries   are  among  the  fastest   growing  and
traditionally  have  accounted  for a large  portion of  uniform  wearers in the
United States.  For example,  the U. S.  Government  Bureau of Labor  Statistics
cites security and healthcare as two of the service  industries where there will
be  significant  growth  over the next five  years.  Work 'n Gear stores seek to
address the needs of three major groups:  (i) customers who buy work clothing to
be worn on the job,  including  industrial tops and bottoms,  jeans, work boots,
rugged  outerwear and other  accessories,  (ii)  corporate  customers who either
supply  uniforms or provide a clothing  allowance to their employees to purchase
uniforms,  and (iii)  customers who work in the healthcare  industry and related
fields.

         Competition  for the sale of workwear is fragmented.  Traditional  Army
and Navy stores offer a large  assortment of workwear items, but supplement with
fishing,  hunting and other  product  lines.  Other  competitors  include  large
specialty  chains,  such as Bob's Stores,  and full service  department  stores,
which typically have more narrow product offerings.  To the Company's knowledge,
no specific  specialty stores similar to Work 'n Gear exist on a national basis.
Competition  for corporate  workwear  (purchased by employers)  comes from large
manufacturers  such as  WearGuard/ARAMARK,  Uniforms to You,  Crest  Uniform and
Fashion Seal, as well as small,  independent  uniform dealers. In the healthcare
apparel business,  competition is dominated by three entities: (i) Life Uniform,
the largest retailer with approximately 300 stores, (ii) catalog operations, led
by J. C. Penney and including  Tafford,  Uniform World,  Sears Roebuck & Company
and Jasco,  and (iii) over 2,000  independent  operators of  healthcare  apparel
businesses.  Management believes its strategy of servicing all three segments of
the  workwear  market--consumer,  corporate  and  healthcare--combined  with its
retail expertise,  affords Work 'n Gear a significant  competitive  advantage in
the marketplace.

         Work 'n Gear stores are generally  located in strip shopping centers or
are free standing.  Locations in active strip centers are a preferable criterion
for site  selection,  as the close proximity to other stores  increases  traffic
into Work 'n Gear stores,  particularly for healthcare  apparel and accessories.
Site  locations  must  take  into  consideration   proximity  of  major  medical
facilities, active retail environments, population density, business presence in
the market and competition.

         Sales in Work 'n Gear stores  accounted for 9.7%,  8.9% and 5.9% of the
Company's total revenues for the years ended January 30, 1999,  January 31, 1998
and February 1, 1997, respectively.

Footwear

JBI Footwear Division
         In a licensed  footwear  department  operation,  a discount  department
store  chain and the  Company  enter into a license  agreement  under  which the
Company has the  exclusive  right to operate a footwear  department  in the host
stores for a specified  period of years.  The  department is operated  under the
store name, in space supplied by the store, and the store collects payments from
customers  and credits the Company.  The Company  pays the  discount  department
store chain a license fee, generally a percentage of net sales, for the right to
operate  the  footwear  department  and for use of the space.  The  license  fee
ordinarily covers utilities,  janitorial service,  cash collection and handling,
packaging and advertising.  In some  circumstances,  the license fee also covers
staffing costs.

         In its licensed  footwear  department  operations,  the Company sells a
wide variety of family footwear,  including men's, women's and children's dress,
casual and athletic footwear as well as work shoes, boots and slippers.  Most of
the footwear offered by the Company in its licensed footwear departments is sold
under the  Company's  private  labels or on an  unbranded  basis,  although  the
Company also sells name brand  merchandise at discounted  prices in its licensed
accounts.

         The  Company's   licensed  footwear   departments  are  operated  on  a
self-service basis. The Company's  personnel employed in particular  departments
are responsible  for the stocking and layout of shelves,  responding to customer
inquiries and related  administrative tasks. In certain accounts,  the Company's
licensed  footwear  departments are serviced in a similar manner by employees of
the licensor.

         The  Company  and its  predecessors  have  operated  licensed  footwear
departments in mass  merchandising  department stores for more than forty years.
Sales in the JBI Footwear division  accounted for 44.5%,  44.7% and 33.8% of the
Company's  total revenues in the years ended January 30, 1999,  January 31, 1998
and February 1, 1997, respectively.  At January 30, 1999, the Company operated a
total of 875 licensed  footwear  departments  under license  agreements  with 14
discount  department store operators.  During fiscal 1999, the Company opened 29
departments and closed 13  departments,  representing a net increase of 16 units
for the year.  The  Company  intends to  concentrate  its  resources  in the JBI
Footwear  division on the major  chains in which it operates  licensed  footwear
departments.  The  Company's  licensed  footwear  departments  are located in 39
states and in the District of Columbia.

         The Company conducts its licensed footwear department  operations under
written agreements for fixed terms. Of the 875 licensed footwear departments the
Company  operated at January 30, 1999, 419, or 47.9%,  are covered by agreements
with terms expiring in less than five years and 456, or 52.1%, are covered by an
agreement,  which expires in July,  2009, with Ames, a major mass  merchandising
retailer in the eastern United States.  For additional  information,  see Recent
Developments,  Ames Department Stores  Acquisition of Hills Stores Company.  For
the  fiscal  year  ended  January  30,  1999,  Ames  accounted  for 16.3% of the
Company's  total  revenues  and on a pro  forma  basis,  sales in Ames and Hills
combined accounted for 25.3% of the Company's sales.

         The Company's licensed footwear  department  business faces competition
at two levels:  (i) for sales to retail  customers  and (ii) for the business of
the  department  store  chains  who are its  footwear  licensor  customers.  The
Company's   success  in  its  licensed   footwear   department   operations   is
substantially dependent upon the success of the department store chains in which
the Company operates licensed footwear departments. Within the particular market
served  by the  department  store  chains,  the  Company  believes  the  primary
competitive  factors are the quality,  price and the breadth and  suitability of
the selection of footwear offered,  as well as store location,  customer service
and promotional activities.

         The  Company  also  faces  potential   competition  from  the  in-house
operational  capabilities  of its licensors.  Because of the large scale of many
licensing  arrangements  and  years of  commitment  involved,  the  Company  has
observed that changes in these arrangements do not frequently occur and are more
often initiated by external factors,  such as mergers or acquisitions  involving
the  licensors  or  business  terminations  by other  licensees,  rather than by
competition among licensees for the business of a licensor.  To the extent there
is active  competition  for new business in this area, the Company  believes the
principal  factors  weighed  by a  potential  licensor  are the  quality  of the
licensee's operations,  as reflected by sales results, and the price paid to the
licensor in the form of the license fee.

Footwear Restructuring
         During the past several years,  the Company  restructured  its footwear
operations (the "Footwear  Restructuring")  in order to focus its efforts on the
management,  development  and growth of its  Casual  Male Big & Tall and Work 'n
Gear apparel  businesses.  In  connection  with the Footwear  Restructuring,  in
March,  1997 the  Company  completed  the sales of its SCOA and  Parade of Shoes
businesses.  In addition, the Company reduced its investment in its JBI Footwear
(then known as Licensed  Discount  division)  business.  The Company  decided to
concentrate  its  efforts in the JBI  Footwear  division  primarily  on its five
largest licensors while exploring future strategic options for this business and
continuing  to close  departments  upon the  termination  of licenses  where the
Company believed it appropriate to do so. As a result,  the Company undertook an
evaluation  of the value of the assets in the JBI Footwear  business,  wrote off
certain  assets  which did not benefit  future  operations  and wrote down other
assets to estimated fair value.  In fiscal 1997, the Company  recorded a pre-tax
charge of $166.6 million ($117.1  million,  or $8.42 basic loss per share, on an
after-tax  basis)  related  to the  sales  of  the  SCOA  and  Parade  of  Shoes
businesses,  the write-down to estimated fair value of certain assets related to
the JBI Footwear business,  and severance and consolidation costs related to the
downsizing of the Company's  administrative areas and corporate  facilities.  Of
the pre-tax  charge,  $122.3  million was  included as a separate  component  of
results of operations in the  Company's  Consolidated  Statement of Earnings for
the year ended February 1, 1997, and the majority of the remaining charge, which
related to the reduction of the JBI Footwear division's inventory valuation, was
included  in cost of sales.  Also,  in  fiscal  1996,  the  Company  recorded  a
restructuring  charge of $69.3 million ($41.6  million,  or $3.00 basic loss per
share,  on an after-tax  basis) related to the liquidation of its Fayva footwear
business.  The  Company's  decision to dispose of Fayva was due to the continued
operating losses  generated by the division along with Fayva's  declining market
share in an already crowded  discount retail footwear  industry.  For additional
information, See Note 9 to the Consolidated Financial Statements.

Trademarks

         The Company has no  franchises  or  concessions  except for  agreements
granting it the right to operate licensed footwear departments. The Company owns
certain  trademarks,  which it uses in its  business,  and owns one patent.  The
Company does not consider these trademarks and patent to be materially important
to its business.

Research and Development

         The  Company  does not  engage  in any  Company-sponsored  research  or
customer-sponsored research.

Environment

         The  Company  has not  been  required  to  make  any  material  capital
equipment  expenditures,  or suffered  any  material  effect on its  earnings or
competitive  position,  as a result of compliance  with federal,  state or local
environmental laws.

Employees

         As of January  30,  1999,  the  Company  employed  approximately  3,126
persons  full-time  and 3,028 persons  part-time,  of whom  approximately  2,257
full-time and 3,008 part-time employees were engaged in retail operations at the
store  level.  Approximately  323  of  the  Company's  full-time  and  part-time
employees are covered by collective bargaining agreements.  The Company believes
its employee relations are generally good.

Executive Officers of the Company
<TABLE>
         <S>                            <C>      <C>
         Name                           Age      Office
         ----                           ---      ------
         Sherman N. Baker                79      Chairman of the Board
         Alan I. Weinstein               56      President and Chief Executive Officer, Acting President of Work 'n Gear Division
         Stuart M. Glasser               51      Senior  Executive Vice President and President and Chief Executive  Officer of The
                                                 Casual Male, Inc.
         Michael J. Fine                 47      Executive Vice President, President of JBI Footwear Division
         Philip G. Rosenberg             49      Executive Vice President, Chief Financial Officer and Treasurer
</TABLE>

     Mr.  Baker has been  Chairman of the  Company's  Board of  Directors  since
March,  1990.  From 1970 until March,  1990, Mr. Baker served as Chief Executive
Officer of the Company and its predecessor.

     Mr.  Weinstein  has held the  positions  of President  and Chief  Executive
Officer since November, 1996 and March, 1997, respectively. From September, 1996
through March,  1997, Mr. Weinstein served as Acting Chief Executive  Officer of
the Company.  Mr.  Weinstein  also currently  serves as Acting  President of the
Company's Work 'n Gear division.  From July, 1985 through  September,  1996, Mr.
Weinstein held the positions of Senior Executive Vice President, Chief Financial
Officer and Secretary of the Company. He was also appointed Chief Administrative
Officer in 1988.  Mr.  Weinstein  joined the  Company's  predecessor  in 1968 as
Assistant  Controller  and  has  held  a  variety  of  positions  of  increasing
responsibility in finance and administration since that time.

         Mr.  Glasser has held the positions of Senior  Executive Vice President
of the Company since June, 1998 and President and Chief Executive Officer of The
Casual Male,  Inc. since  September,  1997.  Prior to joining the Company,  from
January, 1991 until September, 1997, Mr. Glasser was an Executive Vice President
and General Merchandise  Manager of men's,  boy's,  children's and cosmetics for
Bloomingdales,  a division of Federated  Department Stores,  Inc. Prior to 1991,
Mr.  Glasser  served as President and Chief  Executive of the  department  store
division  of  Elder-Beerman  Stores  Corp.  and  prior to that he  served  as an
Executive Vice President of Lord & Taylor.

         Mr. Fine has held the  positions  of  Executive  Vice  President of the
Company and President of the JBI Footwear division since September,  1998. Prior
to joining the Company,  from June,  1996 until June,  1998,  Mr. Fine was Group
President  of the Footwear and Women's  divisions of Edison  Brothers,  Inc. and
from November,  1994 until May, 1996, he was President of Edison Brothers' chain
of 5-7-9 stores.  Prior to joining Edison  Brothers,  from December,  1992 until
November,  1994,  Mr.  Fine was a senior  merchant at Payless  ShoeSource,  Inc.
Previously,  he held the position of Divisional  Merchandise  Manager at various
retailers,  including  the Foxmoor and Hit or Miss chains of stores,  as well as
the Filene's division of Federated Department Stores, Inc.

     Mr.  Rosenberg  has held the position of  Executive  Vice  President  since
September,  1996 and was appointed Chief Financial Officer in March,  1997. From
September,  1996  through  March,  1997,  Mr.  Rosenberg  served as Acting Chief
Financial  Officer of the  Company.  In  addition,  Mr.  Rosenberg  has held the
positions  of Treasurer  and Chief  Accounting  Officer  since June,  1992.  Mr.
Rosenberg  joined the Company's  predecessor in May, 1970 and has held a variety
of positions of increasing  responsibility in finance and  administration  since
that time.


Item 2.  PROPERTIES

         The  executive  and  administrative  offices  of the  Company,  the JBI
Footwear  division  and the Work 'n Gear  division  are located at 555  Turnpike
Street in Canton,  Massachusetts.  This facility also serves as the distribution
center for the Company's  Casual Male Big & Tall,  Work 'n Gear and JBI Footwear
divisions.  The facility is located on 37 acres of land (the "Canton  Property")
and is owned  by JBAK  Canton  Realty,  Inc.  ("JBAK  Realty"),  a  wholly-owned
subsidiary of JBAK Holding, Inc. ("JBAK Holding") and an indirect,  wholly-owned
subsidiary of J. Baker,  Inc. In December,  1996,  JBAK Realty  obtained a $15.5
million  mortgage  loan from The Chase  Manhattan  Bank (the  "Mortgage  Loan"),
secured  by the real  estate,  buildings  and other  improvements  owned by JBAK
Realty located at the Canton Property. JBAK Realty leases the Canton Property to
JBI, Inc., a wholly-owned  subsidiary of J. Baker,  Inc. This facility  contains
approximately  750,000  square feet of space,  including  approximately  150,000
square feet of office space.

         The  Company  leases  a  building  at  437  Turnpike  Street,   Canton,
Massachusetts,  which  serves as  administrative  offices  for Casual Male Big &
Tall. The building  contains  approximately  53,000 square feet of office space.
The lease on this facility expires January 31, 2008.

         The Company leases space in a building at 330 Turnpike Street,  Canton,
Massachusetts,  which serves as  administrative  offices for the Company's  loss
prevention department and as an additional distribution center for the Company's
Work 'n Gear  division.  The space  contains  approximately  41,000 square feet,
including  approximately  14,000 square feet of office space.  The lease on this
facility expires October 31, 2003.

         The Company leases a building in Readville, Massachusetts, which served
primarily as the  distribution  center for Casual Male Big & Tall.  The building
contains  approximately  75,000  square feet of office  space and  approximately
375,000 square feet of warehouse/distribution  space. The lease on the Readville
facility  expires May 31, 1999 and the Company intends to vacate the building on
that date.

         As of January 30, 1999, the Company operated 453 Casual Male Big & Tall
stores,  all in leased  premises  ranging from 1,710 to 5,987 square feet,  with
average   space  of   approximately   3,262  square  feet  and  total  space  of
approximately  1,478,000  square  feet. A majority of the leases run for initial
terms of five years.  Most are renewable at the option of the Company for one or
more five-year terms.

         As of January 30,  1999,  the  Company  operated 67 Work 'n Gear stores
(including  2  stores  under  the  name  RX  Uniforms,  which  exclusively  sell
healthcare  apparel),  all in leased premises  ranging from 2,400 square feet to
6,200 square feet,  with average  space of  approximately  4,295 square feet and
total space of  approximately  288,000 square feet. A majority of the leases run
for initial terms of five years. Most are renewable at the option of the Company
for one or more five-year terms.

         See  "Item  1.  BUSINESS--Industry  Segments,  Footwear,  JBI  Footwear
Division",  for information regarding the Company's licenses to operate footwear
departments in retail stores of its licensors.

Item 3.  LEGAL PROCEEDINGS

         The  Company  is  not  currently  a  defendant  in any  material  legal
proceedings.

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 covered by this report.



<PAGE>
                                     PART II
                                     -------

Item 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

Market Information

         The  Company's  common  stock  trades  on The  Nasdaq  Stock  Market(R)
(Nasdaq) under the symbol "JBAK".

         The  following  table sets forth the last  reported  high and low sales
prices, as reported by Nasdaq, for the Company's common stock for each quarterly
period during the years ended January 30, 1999 and January 31, 1998.  The prices
set forth below do not include retail mark-ups, mark-downs or commissions.
<TABLE>
         <S>                                                           <C>             <C>
         Year Ended January 30, 1999                                    High            Low 
         ---------------------------                                    ----            --- 

         First Quarter                                                 $ 11 3/4        $ 4 1/2
         Second Quarter                                                  13 1/2          9 7/8
         Third Quarter                                                   11 1/8          3 3/4
         Fourth Quarter                                                   6 3/8          4 1/16

         Year Ended January 31, 1998                                    High            Low 
         ---------------------------                                    ----            --- 

         First Quarter                                                 $  9 13/16      $ 6 3/8
         Second Quarter                                                   9              7 5/8
         Third Quarter                                                    9 9/16         7 1/8
         Fourth Quarter                                                   7 3/4          4 1/2
</TABLE>

Holders

         There were  approximately 728 holders of record of the Company's common
stock as of April 1, 1999. The Company  believes the actual number of beneficial
owners of the Company's  common stock is  substantially  greater than the stated
number of holders of record,  because a portion of the outstanding  common stock
is held in "street name".

Dividends

         On March 2,  1987,  the Board of  Directors  of the  Company  adopted a
policy of paying quarterly dividends.  For each quarter thereafter,  the Company
has paid a dividend of 1 1/2 cents per share.

         The Company's  secured credit  agreements  and its senior  subordinated
notes  agreement  limit  the  amount  of  cash  dividends  that  may be  paid to
stockholders.  For  additional  information,  see  Note  3 to  the  Consolidated
Financial Statements.

Other

         On December  15,  1994,  the  Company's  Board of  Directors  adopted a
Shareholder  Rights Agreement (the "Rights  Agreement")  designed to enhance the
Company's ability to protect  shareholder  interests and to ensure  shareholders
receive fair treatment in the event any future coercive  takeover attempt of the
Company  is made.  Pursuant  to the  Rights  Agreement,  the Board of  Directors
declared a dividend  distribution  of one preferred  stock  purchase  right (the
"Right")  for  each  share  of  the  Company's   outstanding   common  stock  to
shareholders  of record as of the close of  business  on January  6, 1995.  Each
right entitles the holder to purchase from the Company a unit  consisting of one
ten thousandth (1/10,000) of a share of Series A Junior Participating Cumulative
Preferred  Stock, par value $1.00 per share, at a cash exercise price of $70 per
unit, subject to adjustment,  upon the occurrence of certain events as set forth
in the Rights Agreement.  These events include the earliest to occur of: (i) the
acquisition  of 15% or more of the  Company's  outstanding  common  stock by any
person or group;  (ii) the commencement of a tender or exchange offer that would
result upon its  consummation  in a person or a group  becoming  the  beneficial
owner of 15% or more of the Company's  outstanding  common  stock;  or (iii) the
determination by the Board of Directors that any person is an "Adverse  Person",
as defined  in the Rights  Agreement.  The Rights are not  exercisable  until or
following the  occurrence of one of the above events and will expire on December
14, 2004, unless previously redeemed or exchanged by the Company, as provided in
the Rights Agreement.



<PAGE>
Item 6.  SELECTED CONSOLIDATED FINANCIAL DATA

         The following selected consolidated  financial data for the Company are
derived from the  consolidated  financial  statements that have been audited and
reported on by KPMG Peat Marwick LLP, independent  certified public accountants,
and  are  qualified  in  their  entirety  by  reference  to  the  more  detailed
consolidated  financial statements and the independent  auditors' report thereon
appearing  elsewhere in this Form 10-K.  In recent  years,  the Company sold its
SCOA and  Parade of Shoes  businesses  in  fiscal  1998,  disposed  of its Fayva
footwear  business  during  fiscal  1996 and has also  experienced  a number  of
licensor  bankruptcy  filings.  The  sales  of SCOA and  Parade  of  Shoes,  the
liquidation of Fayva and licensor bankruptcy filings affect the comparability of
the  financial  information  herein.  For  further  discussions,  see  "Item  1.
BUSINESS" and Notes 9 and 10 to the Consolidated Financial Statements.

                                 J. BAKER, INC.
                      SELECTED CONSOLIDATED FINANCIAL DATA
                (Dollars in thousands, except per share amounts)
<TABLE>
<S>                                                      <C>            <C>          <C>        <C>           <C>
                                                                                    Year Ended                                    
                                                         --------------------------------------------------------------
                                                          1/30/99        1/31/98      2/01/97     2/03/96       1/28/95
                                                          -------        -------      -------     -------       -------
Income Statement Data:                                                                          (53 weeks)
Net sales                                                $584,276       $592,151      $897,492  $1,020,413    $1,042,979
Cost of sales                                             324,360        327,827       542,247     580,067       579,735
      Gross profit                                        259,916        264,324       355,245     440,346       463,244
Selling, administrative and
  general expenses                                        226,439        226,151       347,977     392,586       389,362
Depreciation and amortization                              15,768         15,102        29,431      32,428        27,883
Restructuring and other non-recurring charges                   -              -       122,309      69,300             -
Litigation settlement charges                                   -          3,432             -           -             -
                                                          -------        -------       -------    --------      --------
      Operating income (loss)                              17,709         19,639      (144,472)    (53,968)       45,999
Interest income                                              (192)          (109)         (254)       (526)         (635)
Interest expense                                           14,723         13,497        13,056      10,983         9,735 
                                                          -------        -------       -------     -------       -------
      Earnings (loss) before income taxes                   3,178          6,251      (157,274)    (64,425)       36,899
Income tax expense (benefit)                                1,144          2,438       (45,846)    (25,823)       13,283
                                                          -------        -------       -------     -------       -------
      Net earnings (loss)                                 $ 2,034        $ 3,813     $(111,428)   $(38,602)     $ 23,616
                                                          =======        =======      ========     =======       =======
Earnings (loss) per common share:

      Basic                                                $ 0.15         $ 0.27        $(8.02)     $(2.79)       $ 1.71
                                                            =====          =====         =====       =====         =====
      Diluted                                              $ 0.14         $ 0.27        $(8.02)     $(2.79)       $ 1.46
                                                            =====          =====         =====       =====         ===== 
</TABLE>
<TABLE>
      <S>                                       <C>           <C>              <C>             <C>              <C>
                                                                               As At
                                                ------------------------------------------------------------------------
                                                1/30/99        1/31/98         2/01/97         2/03/96          1/28/95
      Balance Sheet Data:                       -------        -------         -------         -------          -------
      -------------------                       
      Working capital                            $120,089       $121,368        $182,122        $205,080         $235,948
      Total assets                                324,035        335,067         388,541         526,082          578,618
      Long-term debt                              174,583        186,251         214,092         207,766          204,518
      Stockholders' equity                         78,183         75,263          71,989         184,037          223,317
                                                 ========       ========        ========        ========         ========
      Cash dividends declared
         per common share                          $  .06         $  .06          $  .06          $  .06           $  .06
                                                    =====          =====           =====           =====            =====
</TABLE>
<PAGE>
                                 J. BAKER, INC.
                      SELECTED CONSOLIDATED FINANCIAL DATA


<TABLE>

Store Openings and Closings:
----------------------------
<S>                       <C>       <C>       <C>            <C>           <C>     <C>            <C>     <C>         <C>
                                        Apparel                                   Footwear                         
                          -----------------------------      ------------------------------------------------------
                                                                                    Total         Parade
                          Casual     Work     Total           JBI                   Licensed        of       Total
                          Male      'n Gear   Apparel        Footwear      SCOA    Shoe Dept.     Shoes    Footwear    Total
                          ------    -------   -------        --------      ----    ----------     ------   --------    -----
Stores open at
   February 3, 1996        400         69        469          1,087         505        1,592       168       1,760     2,229

Openings                    49          -         49             38          56           94        42         136       185

Closings                    (9)        (3)       (12)          (188)       (107)        (295)      (22)       (317)     (329)
                          ----       ----       ----           ----        ----         ----      ----        ----      ----
Stores open at
   February 1, 1997        440         66        506            937         454        1,391        188      1,579     2,085

Openings                    32          2         34             11           -           11          -         11        45

Closings                   (13)        (2)       (15)           (89)       (454)        (543)      (188)      (731)     (746)
                          ----       ----       ----           ----        ----         ----       ----       ----      ----
Stores open at
  January 31, 1998         459         66        525            859           -          859          -        859     1,384

Openings                    10          1         11             29           -           29          -         29        40

Closings                   (16)         -        (16)           (13)          -          (13)         -        (13)      (29)
                          ----       ----       ----           ----        ----         ----       ----       ----      ----
Stores open at
  January 30, 1999         453         67        520            875           -          875          -        875     1,395
                          ====       ====       ====           ====        ====         ====       ====       ====     =====
</TABLE>

<PAGE>


Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

         All  references  herein to fiscal  1999,  fiscal  1998 and fiscal  1997
relate to the years ended  January 30,  1999,  January 31, 1998 and  February 1,
1997, respectively.  To the extent the Company may have incurred increased costs
resulting from inflation,  the Company believes it has been able to offset these
costs through higher revenues.  Accordingly,  the Company believes inflation has
had no significant impact on its operations.

Results of Operations

                         Fiscal 1999 versus Fiscal 1998

         The Company's net sales  decreased by $7.9 million to $584.3 million in
fiscal 1999 from $592.2 million in fiscal 1998, primarily due to the disposition
of the Company's SCOA and Parade of Shoes  businesses in March,  1997.  Sales in
the Company's apparel operations increased by $14.8 million to $324.3 million in
fiscal 1999 from $309.5 million in fiscal 1998, primarily due to a 3.4% increase
in   comparable   apparel   store   sales   (comparable   apparel   store  sales
increases/decreases  are based upon comparisons of weekly sales volume in Casual
Male Big & Tall stores and Work 'n Gear stores  open in  corresponding  weeks of
the two comparison  periods) and an increase in sales  generated by Work 'n Gear
to its  corporate  customers.  Excluding  net  sales  of  $17.7  million  in the
Company's  SCOA and  Parade of Shoes  businesses  in fiscal  1998,  sales in the
Company's  footwear  operations  decreased by $5.0 million to $259.9  million in
fiscal 1999 from $264.9 million in fiscal 1998, primarily due to a 2.4% decrease
in comparable  retail  footwear store sales  (comparable  retail  footwear store
sales  increases/decreases  are based upon comparisons of weekly sales volume in
licensed footwear  departments open in corresponding weeks of the two comparison
periods).

         The Company's cost of sales  constituted 55.5% of sales in fiscal 1999,
compared  to  55.4%  of sales in  fiscal  1998.  Cost of sales in the  Company's
apparel operations was 52.4% of sales in fiscal 1999, compared to 52.8% of sales
in fiscal 1998. The decrease in such  percentage was primarily  attributable  to
lower  markdowns  as a  percentage  of sales  and a  higher  initial  markup  on
merchandise  purchases.  Cost of sales in the Company's footwear  operations was
59.4% of sales in fiscal 1999,  compared to 58.2% of sales in fiscal 1998.  Cost
of sales in the  Company's  JBI  Footwear  division was 59.4% of sales in fiscal
1999, compared to 58.5% of sales in fiscal 1998. The increase in such percentage
was primarily  attributable  to the January,  1999  acquisition  of Hills Stores
Company ("Hills") by Ames Department Stores,  Inc.  ("Ames"),  both of which are
footwear department  licensors of the Company,  which resulted in a $3.6 million
non-recurring  charge to cost of sales for costs associated with the liquidation
of the Company's inventory in the 155 Hills stores prior to their remodeling and
reopening as Ames  stores,  coupled  with higher  markdowns  as a percentage  of
sales, partially offset by a higher initial markup on merchandise purchases.

         Selling,  administrative  and general expenses increased  $288,000,  or
0.1%, to $226.4 million in fiscal 1999 from $226.2 million in fiscal 1998.  This
increase was primarily  attributable  to an increase in  management  information
systems  costs,  coupled  with the  inclusion  of a  benefit  realized  from the
curtailment  of the  Company's  defined  benefit  pension  plan in fiscal  1998,
partially  offset by the  elimination  of costs recorded in the first quarter of
fiscal  1998  associated  with the  Company's  former  SCOA and  Parade of Shoes
businesses.  As a  percentage  of sales,  selling,  administrative  and  general
expenses  were  38.8% of sales in  fiscal  1999,  compared  to 38.2% of sales in
fiscal  1998.  Selling,  administrative  and general  expenses in the  Company's
apparel  operations  were 39.7% of sales in fiscal  1999,  compared  to 39.4% of
sales in fiscal 1998. This increase was primarily attributable to an increase in
management  information  systems costs,  coupled with the inclusion of a benefit
realized from the  curtailment of the Company's  defined benefit pension plan in
fiscal  1998.  Selling,  administrative  and general  expenses in the  Company's
footwear  operations  were 37.6% of sales in fiscal  1999,  compared to 36.9% of
sales in fiscal  1998.  Selling,  administrative  and  general  expenses  in the
Company's JBI Footwear division were 37.6% of sales in fiscal 1999,  compared to
36.3% of sales in fiscal  1998,  primarily  due to an  increase  in store  level
expenses as a  percentage  of sales and an increase  in  management  information
systems  costs,  coupled  with the  inclusion  of a  benefit  realized  from the
curtailment of the Company's defined benefit pension plan in fiscal 1998.

     Depreciation  and  amortization  expense  increased  by  $665,000  to $15.8
million in fiscal 1999 from $15.1  million in fiscal 1998,  primarily  due to an
increase in depreciable and amortizable assets.

         During  the  third  quarter  of  fiscal  1998,  the  Company   recorded
litigation  settlement  charges of $3.4  million  ($2.1  million on an after-tax
basis),  related to the settlement of two patent  infringement  lawsuits brought
against the Company,  reflecting costs of the settlement not previously  accrued
for.  For  additional  information,  see  Note 9 to the  Consolidated  Financial
Statements.

         As a result of the above,  the Company's  operating income decreased to
$17.7 million  ($21.3  million  excluding the $3.6 million  non-recurring  Hills
related  charge  in cost of sales) in fiscal  1999  from  $19.6  million  ($23.1
million  excluding  the  litigation  settlement  charges) in fiscal  1998.  As a
percentage of sales, operating income was 3.0% of sales (3.7% of sales excluding
the non-recurring  charge in cost of sales) in fiscal 1999,  compared to 3.3% of
sales (3.9% of sales excluding litigation settlement charges) in fiscal 1998.

         Net interest  expense  increased  by $1.1  million to $14.5  million in
fiscal 1999 from $13.4 million in fiscal 1998,  primarily due to higher interest
rates on bank  borrowings and higher average levels of bank borrowings in fiscal
1999 versus fiscal 1998.

         Taxes on  earnings  for  fiscal  1999 were $1.1  million,  yielding  an
effective tax rate of 36.0%, as compared to taxes on earnings of $2.4 million in
fiscal  1998,  yielding  an  effective  tax rate of 39.0%.  The  decrease in the
effective tax rate was primarily due to  adjustments  recorded in fiscal 1999 to
deferred taxes and the related valuation reserve.

         Net  earnings  for  fiscal  1999 were  $2.0  million,  compared  to net
earnings of $3.8 million in fiscal 1998.

                         Fiscal 1998 versus Fiscal 1997

         The Company completed its Footwear  Restructuring in order to focus its
efforts on the management,  development and growth of its Casual Male Big & Tall
and  Work  'n  Gear  apparel   businesses.   In  connection  with  the  Footwear
Restructuring,  in March,  1997 the Company  completed the sales of its SCOA and
Parade of Shoes businesses.  In addition,  the Company reduced its investment in
its JBI Footwear business. The Company decided to concentrate its efforts in the
JBI Footwear  division  primarily on its five largest  licensors while exploring
future  strategic  options for this business and  continuing  to close  licensed
footwear  departments,  upon the  termination  of  licenses,  where the  Company
believed it appropriate to do so. In fiscal 1997, the Company recorded a pre-tax
charge of $166.6 million ($117.1  million,  or $8.42 basic loss per share, on an
after-tax  basis)  related  to the  sales  of  the  SCOA  and  Parade  of  Shoes
businesses,  the  write-down  of  certain  assets  related  to the JBI  Footwear
division to estimated fair value, and severance and consolidation  costs related
to  the  downsizing  of  the  Company's   administrative   areas  and  corporate
facilities.  Of the pre-tax  charge,  $122.3  million was included as a separate
component of results of operations  as  "Restructuring  and other  non-recurring
charges" in the Company's  Consolidated Statement of Earnings for the year ended
February 1, 1997.  The Company also  recorded a charge to cost of sales of $37.3
million  related to a reduction  in the JBI  Footwear  division's  inventory  to
estimated  fair value.  The  remaining  $7.0  million of the charge  includes an
increase in the allowance for doubtful accounts for the JBI Footwear  division's
accounts  receivable and losses incurred from actions taken in order to maximize
the cash  proceeds  received for the assets sold in the SCOA and Parade of Shoes
businesses.

         The Company's net sales  decreased by $305.3  million to $592.2 million
in  fiscal  1998  from  $897.5  million  in fiscal  1997,  primarily  due to the
disposition of the Company's SCOA and Parade of Shoes businesses in March, 1997.
Sales in the Company's apparel  operations  increased by $15.7 million to $309.5
million in fiscal 1998 from $293.8 in fiscal 1997,  primarily due to an increase
in the number of Casual Male Big & Tall stores in operation at the end of fiscal
1998  compared to fiscal 1997 and a 0.7%  increase in  comparable  apparel store
sales.  Excluding net sales in the Company's SCOA and Parade of Shoes businesses
of $17.7 million in fiscal 1998 and $300.7 million in fiscal 1997,  sales in the
Company's  footwear  operations  decreased by $38.1 million to $264.9 million in
fiscal 1998 from $303.0 million in fiscal 1997.  This decrease was primarily due
to a  reduction  in the number of licensed  footwear  departments  in  operation
during  fiscal 1998  compared to fiscal 1997 and a 5.1%  decrease in  comparable
retail footwear store sales.

         The Company's cost of sales  constituted 55.4% of sales in fiscal 1998,
compared  to 60.4% in  fiscal  1997.  Cost of  sales  in the  Company's  apparel
operations  was 52.8% of sales in  fiscal  1998,  compared  to 52.1% of sales in
fiscal 1997.  The increase in such  percentage  was  primarily  attributable  to
higher  markdowns  as a  percentage  of  sales  and a lower  initial  markup  on
merchandise  purchases.  Cost of sales in the Company's footwear  operations was
58.2% of sales in fiscal 1998, compared to 64.4% of sales in fiscal 1997 (which,
exclusive  of the  $37.3  million  write-down  of the  JBI  Footwear  division's
inventory,  was 58.3% of sales in fiscal  1997).  Cost of sales in the Company's
JBI Footwear  division  was 58.5% of sales in fiscal 1998,  compared to 70.7% in
fiscal  1997  (which,  exclusive  of the  $37.3  million  write-down  of the JBI
Footwear division's inventory, was 58.4% of sales in fiscal 1997).

         Selling,  administrative and general expenses decreased $121.8 million,
or 35.0%,  to $226.2  million in fiscal 1998 from $348.0 million in fiscal 1997,
primarily  due to the  disposition  of the  Company's  SCOA and  Parade of Shoes
businesses in March,  1997 and the  downsizing of the JBI Footwear  division and
the Company's  administrative areas and corporate  facilities,  coupled with the
benefit  realized from the curtailment of the Company's  defined benefit pension
plan in fiscal  1998.  As a percentage  of sales,  selling,  administrative  and
general expenses were 38.2% of sales in fiscal 1998,  compared to 38.8% of sales
in fiscal 1997.  Selling,  administrative  and general expenses in the Company's
apparel  operations were 39.4% of sales in fiscal 1998,  which was comparable to
39.4% of sales in fiscal 1997.  Selling,  administrative and general expenses in
the Company's footwear  operations were 36.9% of sales in fiscal 1998,  compared
to 38.5% of sales  in  fiscal  1997.  This  decrease  was  primarily  due to the
increased proportion of JBI Footwear department sales to total footwear sales in
fiscal 1998 versus fiscal 1997.  The  Company's JBI Footwear  division has lower
selling,  administrative  and general expenses as a percentage of sales than the
aggregate selling,  administrative and general expenses as a percentage of sales
in the divested  SCOA and Parade of Shoes  divisions.  Also included in selling,
administrative and general expenses in fiscal 1998 is a non-recurring  charge of
$700,000  ($427,000,  or $0.03  basic  loss per  share  on an  after-tax  basis)
recorded  to write  off  costs  associated  with an  abandoned  high-yield  debt
offering.

         Depreciation  and  amortization  expense  decreased by $14.3 million to
$15.1 million in fiscal 1998 from $29.4 million in fiscal 1997, primarily due to
lower  depreciable  assets  attributable  to the  write-off of certain fixed and
intangible  assets in the fourth  quarter of fiscal 1997  related to the overall
restructuring of the Company's footwear businesses.  This decrease was partially
offset by depreciation recorded on fiscal 1998 capital expenditures.

         During  fiscal 1997,  the Company  recorded a pre-tax  charge of $166.6
million  related to the  divestitures  of its SCOA and Parade of Shoes divisions
and the downsizing of its JBI Footwear division and the Company's administrative
areas and  corporate  facilities.  Of the  pre-tax  charge,  $122.3  million was
classified  as  restructuring  and other  non-recurring  charges.  Such  charges
included the losses on the sales of the SCOA and Parade of Shoes divisions,  the
write-off of assets and  obligations  related to the  reduction of the Company's
investment in its JBI Footwear division,  severance and related costs, and lease
obligations  and  write-offs  of assets for  excess  corporate  facilities.  For
additional information, see Note 9 to the Consolidated Financial Statements.

         During  the  third  quarter  of  fiscal  1998,  the  Company   recorded
litigation  settlement  charges of $3.4  million  ($2.1  million on an after-tax
basis) related to the  settlement of two patent  infringement  lawsuits  brought
against the Company  reflecting  costs of the settlement not previously  accrued
for.  For  additional  information,  see  Note 9 to the  Consolidated  Financial
Statements.

         As a result of the above,  operating  income increased to $19.6 million
(operating income of $23.1 million excluding  litigation  settlement charges) in
fiscal 1998 from an operating loss of $144.5 million  (operating income of $22.1
million  excluding  the $166.6  million  pre-tax  charge) in fiscal  1997.  As a
percentage of sales,  operating  income was 3.3% of sales  (operating  income of
3.9% of sales excluding litigation  settlement charges) in fiscal 1998, compared
to an  operating  loss of  16.1%  of sales  (operating  income  of 2.5% of sales
excluding the $166.6 million pre-tax charge) in fiscal 1997.

         Net interest expense increased $586,000 to $13.4 million in fiscal 1998
from $12.8  million in fiscal 1997,  primarily  due to a change in the Company's
method of financing foreign merchandise purchases with bank borrowings in fiscal
1998 versus the use of bankers'  acceptances in fiscal 1997, partially offset by
lower  interest  rates on bank  borrowings  and  lower  average  levels  of bank
borrowings in fiscal 1998 versus fiscal 1997.

         Taxes on  earnings  for  fiscal  1998 were $2.4  million,  yielding  an
effective tax rate of 39.0%,  compared to an income tax benefit of $45.8 million
in fiscal 1997,  yielding an effective tax rate of 29.2%.  The difference in the
effective tax rate  primarily  reflects the impact of the  additional  valuation
reserve applied against deferred tax accounts as of February 1, 1997. See Note 4
to the  Consolidated  Financial  Statements  for further  discussion of taxes on
earnings.

         Net earnings for fiscal 1998 were $3.8 million,  compared to a net loss
of $111.4 million in fiscal 1997.

Financial Condition

                    January 30, 1999 versus January 31, 1998

     The  decrease in accounts  receivable  at January 30, 1999 from January 31,
1998 was  primarily  due to the  receipt of  litigation  settlement  proceeds in
April, 1998.

     The increase in  merchandise  inventories  at January 30, 1999 from January
31, 1998 was primarily due to an increase in in-transit inventory.

         The decrease in net  property,  plant and equipment at January 30, 1999
from January 31, 1998 is the result of recording  $13.6 million in  depreciation
expense during fiscal 1999,  partially  offset by capital  expenditures  of $9.9
million incurred by the Company in fiscal 1999, primarily for opening new stores
and the renovation of existing units.

         The decrease in other assets at January 30, 1999 was  primarily  due to
receipt of funds held in escrow related to the sales of the Company's  Parade of
Shoes and SCOA footwear businesses.

         The  increase in accounts  payable at January 30, 1999 from January 31,
1998 is primarily  due to the  increase in  in-transit  inventory.  The ratio of
accounts  payable  to  merchandise  inventory  was 34.0% at  January  30,  1999,
compared to 32.7% at January 31, 1998.

         The  decrease in accrued  expenses at January 30, 1999 from January 31,
1998 was primarily due to payments of costs related to the  restructuring of the
Company's footwear operations,  including severance and employee benefits, lease
obligations and other various restructuring costs.

Liquidity and Capital Resources

         The Company's  primary cash needs have  historically been for operating
expenses,  working capital, interest payments,  capital expenditures for ongoing
operations and  acquisitions.  In fiscal 1999,  the Company's  primary source of
capital to finance its cash needs was cash provided by operating activities.

         The Company's  pending Repp  Acquisition  is  contingent  upon securing
additional  financing for the purchase  price and working  capital needs for the
operation  of the  approximately  159 United  States Repp Ltd. Big & Tall retail
locations and the Repp Ltd. by Mail catalog.

         On May 30, 1997, the Company  established two separate revolving credit
facilities,  both of which are  guaranteed  by J.  Baker,  Inc.,  to finance its
apparel  and  footwear  businesses.  The  apparel  facility  was a $100  million
revolving credit facility with Fleet National Bank, BankBoston,  N.A., The Chase
Manhattan Bank, Imperial Bank, USTrust, Wainwright Bank & Trust Company and Bank
Polska Kasa Opieki S.A.  (the "Apparel  Credit  Facility").  The Apparel  Credit
Facility is secured by all the capital  stock of The Casual Male,  Inc. and four
other  subsidiaries of the Company.  The aggregate  commitment under the Apparel
Credit  Facility  was reduced  from $100  million to $90 million on December 31,
1997, by amendment was increased to $95 million on April 3, 1998, was reduced by
$10.0  million  on  December  31,  1998 and will  automatically  reduce by $10.0
million on December 31, 1999.  Borrowings under the Apparel Credit Facility bear
interest at variable rates and can be in the form of loans, bankers' acceptances
and letters of credit. This facility expires May 31, 2000.

         To  finance  its JBI  Footwear  business,  the  Company  obtained a $55
million  revolving credit facility,  secured by substantially  all the assets of
JBI, Inc. and Morse Shoe,  Inc., with BankBoston  Retail Finance Inc.  (formerly
known as GBFC, Inc.) and Fleet National Bank (the "Footwear  Credit  Facility").
The aggregate  commitment  under the Footwear  Credit Facility was reduced by $5
million  on June 30,  1997.  Aggregate  borrowings  under  the  Footwear  Credit
Facility  are  limited  to an amount  determined  by a formula  based on various
percentages of eligible inventory and accounts receivable.  Borrowings under the
Footwear  Credit Facility bear interest at variable rates and can be in the form
of loans or letters of credit. This facility expires May 31, 2001.

         As  of  January  30,  1999,   the  Company  had  aggregate   borrowings
outstanding  under its Apparel Credit  Facility and its Footwear Credit Facility
totaling $63.7 million and $31.2 million, respectively,  consisting of loans and
obligations under letters of credit.

         Net cash  provided by  operating  activities  for fiscal 1999 was $19.3
million,  compared to net cash used in operating  activities of $23.4 million in
fiscal 1998.  The $42.8 million  increase was  primarily due to lower  inventory
expenditures  and lower payments  related to the  restructuring of the Company's
footwear  operations in fiscal 1999 versus  fiscal 1998,  and a decreased in net
accounts  receivable  in fiscal  1999  (primarily  due to receipt of  litigation
settlement  proceeds)  versus an increase in net accounts  receivable  in fiscal
1998.  Net cash used in operating  activities for fiscal 1998 was $23.4 million,
compared to net cash provided by operating  activities of $9.6 million in fiscal
1997. The $33.0 million  decrease was primarily due to  expenditures  related to
the Footwear Restructuring and the receipt of an $8.3 million federal income tax
refund in the first six months of fiscal 1997.

         Net cash used in investing activities for fiscal 1999 was $7.8 million,
compared to net cash provided by investing activities of $51.9 million in fiscal
1998.  The $59.7 million change was primarily due to receipt of $60.1 million in
proceeds  from the sales of the SCOA and  Parade of Shoes  businesses  in fiscal
1998 versus  receipt of $2.9 million in sale  proceeds in fiscal 1999.  Net cash
provided by investing activities for fiscal 1998 was $51.9 million,  compared to
net cash used in investing activities of $14.5 million in fiscal 1997. The $66.4
million  increase was  primarily due to the receipt of $60.1 million in proceeds
from the sales of the SCOA and Parade of Shoes businesses in fiscal 1998.

         Net cash  used in  financing  activities  for  fiscal  1999  was  $11.8
million,  compared to net cash used in financing  activities of $28.5 million in
fiscal 1998.  The $16.7  million  change was  primarily  due to net repayment of
$11.6 million of  indebtedness  during fiscal 1999 versus net repayment of $27.8
million  of  indebtedness  during  fiscal  1998.  Net  cash  used  in  financing
activities for fiscal 1998 was $28.5  million,  compared to net cash provided by
financing  activities of $5.6 million in fiscal 1997. The $34.1 million decrease
was primarily due to a net repayment of  indebtedness of $27.8 million in fiscal
1998,  compared to repayment of  indebtedness of $8.7 million in fiscal 1997 and
the receipt of $14.9 million in net proceeds from the Mortgage Loan, referred to
below, in fiscal 1997.

         The Company  invested $9.9  million,  $8.8 million and $16.4 million in
capital   expenditures   during  fiscal  1999,  fiscal  1998  and  fiscal  1997,
respectively.  The Company's capital expenditures  generally relate to new store
and licensed footwear  department openings and remodeling of existing stores and
departments, coupled with expenditures for general corporate purposes.

         On December 30, 1996,  JBAK Canton  Realty,  Inc.  ("JBAK  Realty"),  a
wholly-owned  subsidiary of JBAK Holding, Inc. ("JBAK Holding") and an indirect,
wholly-owned  subsidiary of J. Baker,  Inc.,  obtained a $15.5 million  mortgage
loan from The Chase  Manhattan  Bank (the  "Mortgage  Loan") secured by the real
estate,  buildings and other  improvements  owned by JBAK Realty at 555 Turnpike
Street,  Canton,  Massachusetts (the "Canton Property").  JBAK Realty leases the
Canton  Property to JBI, Inc. a  wholly-owned  subsidiary of J. Baker,  Inc. The
Canton Property is used as the Company's corporate headquarters. Proceeds of the
Mortgage Loan were used to pay down loans under the Company's  revolving  credit
facility.

         In  June,  1992  the  Company  issued  $70  million  of 7%  convertible
subordinated  notes due 2002. The notes are convertible at a conversion price of
$16.125 per share, subject to adjustment in certain events.

         The  Company  expects to open  approximately  15 Casual Male Big & Tall
stores and 5 JBI Footwear  departments and to close approximately 10 Casual Male
Big & Tall  stores,  2 Work `n Gear stores and 12 JBI  Footwear  departments  in
fiscal  2000.  These  numbers do not reflect the  closing and  reopening  of the
approximately  150 Hills /Ames stores during fiscal 2000 nor do they reflect any
additional units which may be opened in the Repp Acquisition.

         The Company  believes  amounts  available  under its  revolving  credit
facilities,  along  with  other  potential  sources of funds and cash flows from
operations,  will be sufficient  to meet its operating and capital  requirements
for its existing  businesses for the foreseeable  future. From time to time, the
Company evaluates potential acquisition  candidates,  including the pending Repp
Acquisition,  in pursuit of strategic  initiatives and growth goals in its niche
apparel markets. Financing of potential acquisitions will be determined based on
the financial  condition of the Company at the time of such acquisitions and may
include  borrowings  under current or new  commercial  credit  facilities or the
issuance of publicly issued or privately placed debt or equity securities.

Year 2000 Compliance

     The  statements in this section  include "Year 2000  Readiness  Disclosure"
within the meaning of the Year 2000 Information and Readiness Disclosure Act.

         The Company is faced with "Year 2000" remediation issues. Many computer
programs were written with a two-digit date field,  which, if not made Year 2000
compliant,  will be unable to  correctly  process date  information  on or after
January 1, 2000.

The Company's State of Readiness
         The  Company  established  a Year 2000  committee  comprised  of senior
management  of the Company and also engaged an  independent  consulting  firm to
assist in remediation of the Company's Year 2000 issues.  The Company  evaluated
its internal  computer systems and while the data processing  systems were found
to be  impacted  to  some  extent,  Year  2000  issues  were  found  to be  most
significant in connection with various mainframe  computer  programs.  In fiscal
1997,  the Company  developed a plan to address Year 2000 issues as they related
to the  mainframe  computer  programs  and began the  process  to  convert  such
computer  programs to be Year 2000  compliant.  During fiscal 1999,  the Company
completed the conversion of its three primary mainframe  computer programs to be
Year 2000 compliant.

         During  fiscal  1999,  the  Company   undertook  an  inventory  of  its
non-information  technology  systems.  Such inventory is substantially  complete
and,  where  appropriate,  the  Company has made  contingency  plans in order to
minimize  any adverse  effect Year 2000 issues may have on such  non-information
technology systems.

         During  fiscal  1999,  the Company  communicated  with and  completed a
compilation  of detailed  information  regarding  its key business  partners and
major  suppliers to determine  to what extent the Company may be  vulnerable  to
third party Year 2000 issues. Although the Company does not currently anticipate
it will experience any material  business  interruptions or shipment delays from
its key business  partners and major suppliers due to Year 2000 issues,  at this
time,  the Company is unable to estimate  the nature or extent of any  potential
adverse impact resulting from the failure of its key business partners and major
suppliers to achieve Year 2000 compliance.

         The Company is not  dependent  on a single  source for any  products or
services.  In the event a third party is unable to provide material  products or
services to the Company due to a Year 2000 computer systems failure, the Company
believes it has adequate  alternate  sources for such  products or services.  If
alternate  sources are used, there can be no guarantee that similar or identical
products or services would be available on the same terms and conditions or that
the Company would not experience some adverse effect as a result of switching to
such alternate sources.

Costs to Address the Year 2000
         The  Company's  total  Year  2000  expenditures  are  estimated  to  be
approximately  $4.0  million,  of  which  approximately  $2.0  million  are  for
incremental  costs, and are being funded through  operating cash flows.  Certain
other  non-Year 2000 computer  system  projects were deferred in order to ensure
completion of the Company's Year 2000 compliance  efforts.  Although  management
believes  deferring  such projects has not had a material  adverse effect on the
Company's  operations,  it  expects  these  projects,  when  implemented,   will
positively impact future results.  The Company is expensing all costs associated
with Year 2000 computer  system changes as the costs are incurred.  To date, the
Company has expended approximately $3.5 million on Year 2000 projects.

Risk Analysis
         Similar to most large  business  enterprises,  the Company is dependent
upon its own internal computer  technology and relies upon timely performance by
its key business  partners and major suppliers.  Although the full  consequences
are not known, the failure of either the Company's  systems or those of material
third  parties to conform to the Year 2000,  as noted  above,  could  impair the
Company's  ability to deliver product to its stores in a timely  fashion,  which
could result in potential lost sales opportunities and additional expenses.  The
Company's  Year  2000  project  seeks to  identify  and  minimize  this risk and
includes  testing of internally  generated  systems and  purchased  hardware and
software to ensure,  to the extent  feasible,  all such  systems  will  function
before and after the year 2000.

Contingency Plans
         The Company has  developed  contingency  plans,  which will  attempt to
minimize  disruption  to the  Company's  operations  in the  event of Year  2000
computer  systems  failures.  While no assurances  can be given,  because of the
Company's  extensive  efforts to formulate and carry out an effective  Year 2000
program,  the Company  believes  its program will be completed on a timely basis
and should effectively  minimize  disruption to the Company's  operations due to
Year 2000 issues.

Certain Factors That May Affect Future Results

         The Company cautions that any forward-looking  statements (as such term
is defined in the Private Securities Litigation Reform Act of 1995) contained in
this  Form  10-K  or  made  by  management  of the  Company  involve  risks  and
uncertainties  and are  subject to change  based on various  important  factors.
Company management may also make written or oral  forward-looking  statements in
other documents it files with the SEC, in its annual report to stockholders,  in
press  releases and other  written  materials,  and in oral  statements  made by
officers,  directors  or  employees  of the  Company.  You  should  not  rely on
forward-looking  statements,  because  they  involve  known and  unknown  risks,
uncertainties  and other  factors,  some of which are beyond the  control of the
Company. The following factors, among others, in some cases have affected and in
the future could affect the Company's financial  performance and actual results,
and could cause actual  results,  performance or achievements of the Company for
fiscal 2000 and beyond to differ  materially  from those expressed or implied in
any such  forward-looking  statements:  changes in consumer  spending  patterns,
consumer  preferences and overall economic  conditions,  availability of credit,
interest  rates,  the  impact of  competition  and  pricing,  the  weather,  the
financial  condition  of the  retailers  in whose  stores the  Company  operates
licensed footwear departments,  changes in existing or potential duties, tariffs
or quotas,  availability  of suitable  store  locations  on  appropriate  terms,
ability to hire and train associates and costs, timing and effectiveness of Year
2000  conversion.  You should carefully review and consider all of these factors
and  should  be  aware  there  may be  other  factors  that  could  cause  these
differences.  These forward-looking statements were based on information,  plans
and  estimates at the date of this  report,  and the Company does not promise to
update  any   forward-looking   statements  to  reflect  changes  in  underlying
assumptions or factors, new information, future events or other changes.

Item 7(a).  QUANTITATive and Qualitative Disclosures About Market Risk.

None.

<PAGE>
Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




                         J. BAKER, INC. AND SUBSIDIARIES
                   Index to Consolidated Financial Statements

<TABLE>
<S>                                                                                                      <C>
Consolidated Financial Statements:                                                                       PAGE


         Independent Auditors' Report                                                                      20

         Consolidated balance sheets as of January 30, 1999 and January 31, 1998                           21

         Consolidated statements of earnings for the years ended January 30, 1999,                         22
January 31, 1998 and February 1, 1997

         Consolidated statements of stockholders' equity for the years ended                               23
January 30, 1999, January 31, 1998 and February 1, 1997

         Consolidated statements of cash flows for the years ended January 30, 1999,                       24
January 31, 1998 and February 1, 1997

         Notes to consolidated financial statements                                                        25

</TABLE>

All schedules have been omitted as they are inapplicable or not required, or the
information has been included in the consolidated financial statements or in the
notes thereto.











<PAGE>







                          Independent Auditors' Report
                          ----------------------------



The Board of Directors and Stockholders
J. Baker, Inc.:


We have audited the accompanying  consolidated  balance sheets of J. Baker, Inc.
and  subsidiaries  as of January 30, 1999 and January 31, 1998,  and the related
consolidated  statements  of earnings,  stockholders'  equity and cash flows for
each of the  years in the  three-year  period  ended  January  30,  1999.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
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 the
Company's  management,  as well as evaluating  the overall  financial  statement
presentation. We believe 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 J. Baker, Inc. and
subsidiaries  as of January 30, 1999 and January 31, 1998,  and their results of
operations and cash flows for each of the years in the  three-year  period ended
January 30, 1999, in conformity with generally accepted accounting principles.




                                            KPMG Peat Marwick LLP


Boston, Massachusetts
March 17, 1999



<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                      January 30, 1999 and January 31, 1998
<TABLE>
<S>                                                                               <C>                   <C>
        Assets                                                                        1999                   1998
        ------                                                                        ----                   ----
Current assets:
    Cash and cash equivalents                                                     $   3,679,115         $   3,995,995
    Accounts receivable:
        Trade, net                                                                    9,979,178             8,155,156
        Other                                                                         2,768,651             9,485,578
                                                                                    -----------           -----------
                                                                                     12,747,829            17,640,734
                                                                                    -----------            ----------

    Merchandise inventories                                                         164,057,913           159,407,002
    Prepaid expenses                                                                  3,595,858             4,418,171
    Deferred income taxes, net                                                        4,535,000             5,230,000
                                                                                    -----------           -----------
             Total current assets                                                   188,615,715           190,691,902
                                                                                    -----------           -----------

Property, plant and equipment, at cost:
    Land and buildings                                                               19,726,648            19,532,487
    Furniture, fixtures and equipment                                                76,008,130            72,359,381
    Leasehold improvements                                                           26,869,958            24,832,306
                                                                                    -----------           -----------
                                                                                    122,604,736           116,724,174
    Less accumulated depreciation and amortization                                   54,109,006            44,595,098
                                                                                    -----------           -----------
             Net property, plant and equipment                                       68,495,730            72,129,076
                                                                                    -----------           -----------

Deferred income taxes, net                                                           55,404,641            55,950,000
Other assets, at cost, less accumulated amortization                                 11,518,573            16,296,434
                                                                                    -----------           -----------
                                                                                   $324,034,659          $335,067,412
                                                                                    ===========           ===========
        Liabilities and Stockholders' Equity Current liabilities:
    Current portion of long-term debt                                             $   2,112,955         $   2,060,387
    Accounts payable                                                                 55,830,124            52,108,352
    Accrued expenses                                                                  8,772,148            14,176,048
    Income taxes payable                                                              1,811,701               979,560
                                                                                      ---------               -------
             Total current liabilities                                               68,526,928            69,324,347
                                                                                     ----------            ----------

Other liabilities                                                                     2,741,591             4,229,800
Long-term debt, net of current portion                                              104,229,825           114,407,640
Senior subordinated debt                                                                      -             1,490,111
Convertible subordinated debt                                                        70,353,000            70,353,000

Stockholders' equity:
    Common stock, par value $.50 per share, authorized 40,000,000 shares,
      14,064,526 shares issued and outstanding in 1999 (13,919,577 in 1998)           7,032,263             6,959,789
    Preferred stock, par value $1.00 per share, authorized 2,000,000 shares
      (none issued and outstanding)                                                           -                     -
    Series A junior participating cumulative preferred stock, par value $1.00
      per share, authorized 100,000 shares (none issued and outstanding)                      -                     -
    Additional paid-in capital                                                      117,353,846           115,697,467
    Accumulated deficit                                                             (46,202,794)          (47,394,742)
                                                                                    -----------           ----------- 
             Total stockholders' equity                                              78,183,315            75,262,514
                                                                                     ----------            ----------
                                                                                   $324,034,659          $335,067,412
                                                                                   ============          ============
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                           Consolidated Statements of
                 Earnings For the years ended January 30, 1999,
                      January 31, 1998 and February 1, 1997


<TABLE>
<S>                                                            <C>                    <C>                    <C>
                                                                  1999                   1998                   1997
                                                                  ----                   ----                   ----
Net sales                                                      $584,276,206           $592,151,411           $897,491,941

Cost of sales                                                   324,359,899            327,826,816            542,246,938
                                                                -----------            -----------            -----------

      Gross profit                                              259,916,307            264,324,595            355,245,003

Selling, administrative and general expenses                    226,439,442            226,151,041            347,977,056

Depreciation and amortization                                    15,767,752             15,102,619             29,430,473

Restructuring and other non-recurring charges                             -                      -            122,309,000

Litigation settlement charges                                             -              3,432,000                      -
                                                                -----------            -----------            -----------

      Operating income (loss)                                    17,709,113             19,638,935           (144,471,526)

Interest income                                                    (192,112)              (108,750)              (253,750)

Interest expense                                                 14,723,707             13,496,578             13,056,127
                                                                 ----------             ----------             ----------

      Earnings (loss) before income taxes                         3,177,518              6,251,107            (157,273,903)

Income tax expense (benefit)                                      1,144,000              2,438,000             (45,846,000)
                                                                  ---------              ---------             ----------- 

      Net earnings (loss)                                      $  2,033,518           $  3,813,107           $(111,427,903)
                                                               ============           ============           ============= 

Earnings (loss) per common share:
      Basic                                                     $      0.15            $      0.27           $       (8.02)
                                                                ===========            ===========           ============= 

      Diluted                                                   $      0.14            $      0.27           $       (8.02)
                                                                ===========            ===========           ============= 

Number of shares used to compute 
  earnings (loss) per common share:
      Basic                                                      14,006,478             13,911,080              13,887,544
                                                                 ==========             ==========              ==========

      Diluted                                                    14,139,735             13,970,299              13,887,544
                                                                 ==========             ==========              ==========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                           Consolidated Statements of
                Stockholders' Equity For the years ended January
                 30, 1999, January 31, 1998 and February 1, 1997

<TABLE>
<S>                                    <C>               <C>              <C>             <C>            <C>
                                                                                           Retained
                                                                          Additional       Earnings/         Total
                                                 Common Stock              Paid-in       (Accumulated    Stockholders'
                                          Shares            Amount         Capital          Deficit)         Equity 
                                          ------            ------         -------          --------         ------ 

Balance, February 3, 1996               13,872,647        $6,936,324       $115,213,017    $61,888,069    $184,037,410


Net loss for the year ended
    February 1, 1997                             -                 -                  -   (111,427,903)   (111,427,903)
Shares issued in connection with the
  acquisition of Shoe Corporation
  of America                                 6,001             3,001            104,942              -         107,943
Exercise of stock options                   13,749             6,874             98,264              -         105,138
Dividends paid ($.06 per share)                  -                 -                  -       (833,328)       (833,328)
                                          --------          --------           --------    -----------     -----------

Balance, February 1, 1997               13,892,397         6,946,199        115,416,223    (50,373,162)     71,989,260


Net earnings for the year ended
    January 31, 1998                             -                 -                  -      3,813,107       3,813,107
Exercise of stock options                    8,500             4,250             43,550              -          47,800
Shares issued to certain employees          18,680             9,340            237,694              -         247,034
Dividends paid ($.06 per share)                  -                 -                  -       (834,687)       (834,687)
                                            --------        --------           --------      ---------       ---------

Balance, January 31, 1998               13,919,577         6,959,789        115,697,467    (47,394,742)     75,262,514


Net earnings for the year ended
    January 30, 1999                             -                 -                  -      2,033,518        2,033,518
Exercise of stock options                   23,199            11,599            442,941              -          454,540
Shares issued to certain employees         121,750            60,875          1,213,438              -        1,274,313
Dividends paid ($.06 per share)                  -                 -                  -       (841,570)        (841,570)
                                          --------          --------           --------      ---------      ----------

Balance, January 30, 1999               14,064,526        $7,032,263       $117,353,846  $(46,202,794)     $78,183,315
                                        ==========        ==========       ============  ============      ===========

</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                         Consolidated Statements of Cash
                   Flows For the years ended January 30, 1999,
                      January 31, 1998 and February 1, 1997
<TABLE>
<S>                                                                <C>                 <C>                  <C>

                                                                        1999               1998                 1997
                                                                        ----               ----                 ----
Cash flows from operating activities:
      Net earnings (loss)                                          $   2,033,518         $  3,813,107        $(111,427,903)
      Adjustments to reconcile net earnings (loss) to net cash
        provided by (used in) operating activities:
         Depreciation and amortization:
             Fixed assets                                             13,575,597           13,334,762           21,151,307
             Deferred charges, intangible assets and
                deferred financing costs                               2,200,066            1,806,557            8,317,866
         Deferred income taxes, net                                    1,240,359            2,567,000          (47,610,000)
         Loss on disposals and revaluation of assets                           -                    -           99,600,000
         Change in:
             Accounts receivable                                       6,332,655              568,003            1,544,648
             Merchandise inventories                                  (4,650,911)         (15,442,592)          50,782,034
             Prepaid expenses                                            822,313            1,612,862           (1,758,077)
             Accounts payable                                          3,721,772           (4,897,733)         (29,177,966)
             Accrued expenses                                         (5,401,922)         (18,514,062)           5,340,437
             Income taxes payable/receivable                             832,141             (401,104)           8,617,396
             Other liabilities                                        (1,368,545)          (7,873,826)           4,182,155
                                                                      ----------           ----------            ---------
                Net cash provided by (used in)
                 operating activities                                 19,337,043          (23,427,026)           9,561,897
                                                                      ----------          -----------            ---------

Cash  flows from investing activities: Capital expenditures for:
         Property, plant and equipment                                (9,942,251)          (8,810,193)         (16,420,644)
         Other assets                                                   (795,360)          (2,304,132)          (1,921,816)
      Payments received on note receivable                                     -            2,900,000            3,888,000
      Net proceeds from sales of footwear businesses                   2,902,335           60,134,835                    -
                                                                       ---------           ----------           ----------
                Net cash provided by (used in)
                  investing activities                                (7,835,276)          51,920,510          (14,454,460)
                                                                      ----------           ----------          ----------- 

Cash flows from financing activities:
      Repayment of senior debt                                        (1,500,000)          (1,500,000)          (1,500,000)
      Repayment of revolving credit facility                          (9,564,859)        (125,800,000)          (7,200,000)
      Proceeds from apparel and footwear credit
          facilities                                                                                -           99,980,354
-
      Proceeds from (repayment of) mortgage payable                     (560,388)            (512,327)          15,500,000
      Payment of mortgage escrow, net                                    (61,933)             (94,779)            (605,215)
      Proceeds from issuance of common stock, net of retirements         710,103              294,834              213,081
      Payment of dividends                                              (841,570)            (834,687)            (833,328)
                                                                        --------             --------             -------- 
                Net cash provided by (used in)
                  financing activities                               (11,818,647)         (28,466,605)           5,574,538
                                                                     -----------          -----------            ---------

Net increase (decrease) in cash and cash equivalents                    (316,880)              26,879              681,975

Cash and cash equivalents at beginning of year                         3,995,995            3,969,116            3,287,141
                                                                       ---------            ---------            ---------

Cash and cash equivalents at end of year                            $  3,679,115         $  3,995,995         $  3,969,116
                                                                    ============         ============         ============
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
             January 30, 1999, January 31, 1998 and February 1, 1997

(1)      Summary of Significant Accounting Policies
         ------------------------------------------

         Nature of Operations
            J. Baker,  Inc. and  subsidiaries  (the "Company") is engaged in the
            retail sale of apparel and  footwear.  As of January 30,  1999,  the
            Company's  Casual  Male Big & Tall,  Work 'n Gear  and JBI  Footwear
            businesses  operated a total of 1,395 locations in 47 states and the
            District of  Columbia.  The Company  operates the 453 store chain of
            Casual Male Big & Tall stores, which sell fashion,  casual and dress
            clothing  and  footwear  to the big and tall  man;  the Work 'n Gear
            chain,  consisting  of 65 work  clothing  stores,  which sell a wide
            selection of workwear as well as healthcare apparel and uniforms for
            industry and service  businesses,  and 2 RX Uniforms  stores,  which
            exclusively sell healthcare apparel;  and 875 self-service  licensed
            footwear  departments in discount  department stores. See Note 9 for
            information  regarding the Company's  restructuring  of its footwear
            operations  and  the  related  divestitures  of the  Company's  Shoe
            Corporation of America ("SCOA") and Parade of Shoes divisions.

         Basis of Presentation and Principles of Consolidation
            The consolidated  financial  statements  include the accounts of the
            Company  and  its   wholly-owned   subsidiaries.   All   significant
            intercompany  accounts  and  transactions  have been  eliminated  in
            consolidation.

            The preparation of consolidated  financial  statements in conformity
            with  generally  accepted  accounting  principles  requires  Company
            management  to  make  estimates  and  assumptions  that  affect  the
            reported  amounts  of  assets  and  liabilities  and  disclosure  of
            contingent  assets  and  liabilities  at the  date of the  financial
            statements and the reported amounts of revenues and expenses. Actual
            results could differ from these estimates.

         Fiscal Year
            The  Company  follows  a 52 to 53 week  fiscal  year  ending  on the
            Saturday nearest January 31.

         Fair Value of Financial Instruments
            The carrying amount of cash, cash equivalents, trade receivables and
            trade payables  approximate fair value because of the short maturity
            of  these  financial  instruments.   Fair  value  of  the  Company's
            long-term  instruments  is  estimated  based on  market  values  for
            similar instruments. At January 30, 1999, the difference between the
            carrying  value of long-term  instruments  and their  estimated fair
            value is not material.

         Cash and Cash Equivalents
            Cash   equivalents   consist  of  highly  liquid   instruments  with
            maturities  of three  months or less and are  stated at cost,  which
            approximates market.

         Merchandise Inventories
            Merchandise  inventories,  which consist entirely of finished goods,
            are valued at the lower of cost or market, principally by the retail
            inventory method.

         Depreciation and Amortization of Property, Plant and Equipment and 
         Other Assets
            Depreciation and amortization of the Company's  property,  plant and
            equipment and other assets are provided on the straight-line  method
            over the following periods:
<TABLE>
                           <S>                                                 <C> 

                           Furniture and fixtures                                7 years
                           Machinery and equipment                               7 years
                           Leasehold improvements                               10 years
                           Building, building improvements and
                              land improvements                                 40 years
                           Systems development costs and
                              other intangible assets                           3 to 10 years
</TABLE>

            Maintenance  and repairs are charged to expense as  incurred.  Major
            renewals  or  replacements  are  capitalized.  When  properties  are
            retired or  otherwise  disposed  of, the asset and  related  reserve
            account are  relieved  and the  resulting  gain or loss,  if any, is
            credited or charged to earnings.
<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of
            On February 4, 1996, the Company adopted the provisions of Statement
            of  Financial   Accounting  Standards  No.  121  ("SFAS  No.  121"),
            "Accounting  for  the  Impairment  of  Long-Lived   Assets  and  for
            Long-Lived  Assets to Be Disposed  Of".  SFAS No. 121 requires  that
            long-lived assets and certain  identifiable  intangibles be reviewed
            for impairment whenever events or changes in circumstances  indicate
            the   carrying   amount  of  an  asset   may  not  be   recoverable.
            Recoverability  of  assets  to be held  and  used is  measured  by a
            comparison  of the  carrying  amount of an asset to future  net cash
            flows  expected  to be  generated  by the asset.  If such assets are
            considered  to be  impaired,  the  impairment  to be  recognized  is
            measured  by the amount by which the  carrying  amount of the assets
            exceeds the fair value of the  assets.  Assets to be disposed of are
            reported  at the lower of the  carrying  amount or fair  value  less
            costs to sell.  Adoption  of SFAS  No.  121 did not have a  material
            impact on the Company's financial position, results of operations or
            liquidity.

         Earnings (Loss) Per Common Share
            In February, 1997, the Financial Accounting Standards Board ("FASB")
            issued SFAS No. 128, "Earnings Per Share" ("EPS"), which the Company
            adopted in fiscal  1998.  Basic EPS is computed  by dividing  income
            available to common  shareholders by the weighted  average number of
            common shares outstanding during the period. Diluted EPS is computed
            by dividing income available to common  shareholders by the weighted
            average  number  of  common  shares,  after  giving  effect  to  all
            potentially dilutive common shares outstanding during the period.

            The calculation of diluted earnings (loss) per common share includes
            the dilutive  effect of  outstanding  stock options and warrants for
            fiscal  1999.  Stock  options and  warrants  are  excluded  from the
            calculation  for fiscal 1998 and fiscal 1997  because  their  effect
            would be  antidilutive.  The  common  stock  issuable  under  the 7%
            convertible   subordinated   notes  due  2002  and  the  convertible
            debentures  was not  included in the  calculation  for fiscal  1999,
            fiscal   1998  and  fiscal  1997   because   its  effect   would  be
            antidilutive.  All net earnings  (loss) per common share amounts for
            all periods  presented have been restated to conform to SFAS No. 128
            requirements.
            
            Net earnings (loss) and shares used to compute net earnings (loss) 
            per share, basic and diluted, are reconciled below: 

<TABLE>
                  <S>                                           <C>                    <C>               <C>
                                                                    1999                 1998                 1997
                                                                    ----                 ----                 ----
                  Net earnings (loss), basic and diluted        $ 2,033,518            $ 3,813,107       $(111,427,903)
                                                                ===========            ===========       ============= 
                  Weighted average common shares:

                      Basic                                      14,006,478             13,911,080          13,887,544

                           Effect of dilutive securities:

                             Stock options and performance
                                 share awards                       133,257                 59,219                   -
                                                                    -------                 ------            --------

                      Diluted                                    14,139,735             13,970,299          13,887,544
                                                                 ==========             ==========          ==========

</TABLE>

         Revenue Recognition
            The Company  recognizes  revenue in its retail  stores and  licensed
            footwear departments at the time of sale.

         Store Opening and Closing Costs
            Store opening  costs are expensed as incurred.  All costs related to
            store  closings  are expensed at the time the decision is reached to
            close the store.

         Stock Options
            Prior to February 4, 1996,  the Company  accounted for stock options
            in accordance with Accounting  Principles  Board ("APB") Opinion No.
            25,  "Accounting  for  Stock  Issued  to  Employees",   and  related
            interpretations.  As such, compensation expense would be recorded on
            the date of grant only if the current market price of the underlying
            stock exceeded the exercise  price. On February 4, 1996, the Company
            adopted SFAS No. 123,  "Accounting  for  Stock-Based  Compensation",
            which  permits  entities to  recognize  as expense  over the vesting
            period  the fair  value  on the  date of  grant  of all  stock-based
            awards. Alternatively, SFAS No. 123 also allows entities to continue
            to apply the  provisions of APB Opinion No. 25 and provide pro forma
            net income and pro forma earnings per share disclosures for employee
            stock  option  grants made in fiscal 1996 and future years as if the
            fair-value-based  method  defined in SFAS No. 123 had been  applied.
            The  Company  elected to  continue  to apply the  provisions  of APB
            Opinion No. 25 and provide the pro forma  disclosure  provisions  of
            SFAS No. 123.
<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         Income Taxes
            Deferred taxes are provided for using the asset and liability method
            for temporary differences between financial and tax reporting.

         Effect of Accounting Changes
            In fiscal 1999,  the Company  adopted the  provisions of SFAS No. 
            131,  "Disclosures  About  Segments of an Enterprise  and
            Related Information" and SFAS No. 132, "Employers Disclosures About
            Pensions and Other Post-Retirement  Benefits".  Current
            financial statements are presented in accordance with these SFAS.

         Reclassifications
            Certain   reclassifications  have  been  made  to  the  consolidated
            financial   statements  of  prior  years  to  conform  to  the  1999
            presentation.

(2)      Accounts Receivable
         -------------------

            Trade accounts  receivable are comprised  principally of amounts due
            from licensors of the Company's JBI Footwear  division.  The Company
            performs  regular credit  evaluations of its licensors and generally
            does not require collateral from its licensors.

            The  following is a summary of the activity  affecting the allowance
            for doubtful  accounts  receivable  for the years ended  January 30,
            1999, January 31, 1998 and February 1, 1997.

<TABLE>
                  <S>                                                <C>               <C>                 <C>
                                                                          1999             1998               1997
                                                                          ----             ----               ----
                  Balance, beginning of year                         $   577,458        $5,286,617         $3,217,429

                  Additions charged to expense                            10,000            15,000          2,200,000

                  Write-offs, net of recoveries                         (402,458)       (4,724,159)          (130,812)
                                                                        --------        ----------           -------- 

                  Balance, end of year                               $   185,000       $   577,458         $5,286,617
                                                                     ===========       ===========         ==========
</TABLE>

(3)      Debt 
         ----
         Long-Term Debt
            Long-term  debt at  January  30,  1999  and  January  31,  1998  was
            comprised of:
<TABLE>
                  <S>                                                                 <C>                  <C>
                                                                                          1999                 1998
                                                                                          ----                 ----
                  Apparel credit facility (weighted average interest rate             $59,500,000           $66,300,000
                    of 7.8% in fiscal 1999 and  7.4% in fiscal 1998)

                  Footwear credit facility (weighted average interest rate             30,915,495            33,680,354
                    of 8.3% in fiscal 1999 and 8.0% in fiscal 1998)

                  Mortgage note, net of current portion                                13,814,330            14,427,286
                                                                                       ----------            ----------
                    (interest rate of 9.0%)
                                                                                     $104,229,825          $114,407,640
                                                                                     ============          ============
</TABLE>

            On May 30, 1997,  the Company  established  two  separate  revolving
            credit  facilities,  both of which are guaranteed by J. Baker, Inc.,
            to finance its apparel and footwear  businesses The apparel facility
            was a $100 million  revolving  credit  facility with Fleet  National
            Bank,  BankBoston,  N.A., The Chase Manhattan  Bank,  Imperial Bank,
            USTrust, Wainwright Bank & Trust Company and Bank Polska Kasa Opieki
            S.A. (the "Apparel Credit Facility"). The Apparel Credit Facility is
            secured by all the capital  stock of The Casual Male,  Inc. and four
            other  subsidiaries of the Company.  The aggregate  commitment under
            the Apparel  Credit  Facility  was reduced  from $100 million to $90
            million on December 31,  1997,  by  amendment  was  increased to $95
            million on April 3, 1998, was reduced by $10 million on December 31,
            1998 and will automatically  reduce by $10.0 million on December 31,
            1999.  Borrowings under the Apparel Credit Facility bear interest at
            variable rates and can be in the form of loans, bankers' acceptances
            and letters of credit. This facility expires May 31, 2000.

<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

            To finance its JBI  Footwear  business,  the Company  obtained a $55
            million revolving credit facility,  secured by substantially all the
            assets of JBI, Inc. and Morse Shoe,  Inc.,  with  BankBoston  Retail
            Finance Inc.  (formerly known as GBFC, Inc.) and Fleet National Bank
            (the "Footwear Credit Facility"). The aggregate commitment under the
            Footwear Credit Facility was reduced by $5 million on June 30, 1997.
            Aggregate  borrowings under the Footwear Credit Facility are limited
            to an amount determined by a formula based on various percentages of
            eligible  inventory and accounts  receivable.  Borrowings  under the
            Footwear  Credit Facility bear interest at variable rates and can be
            in the form of loans or letters of credit. This facility expires May
            31, 2001.

            As of  January  30,  1999,  the  Company  had  aggregate  borrowings
            outstanding  under its  Apparel  Credit  Facility  and its  Footwear
            Credit   Facility   totaling   $63.7  million  and  $31.2   million,
            respectively,  consisting of loans and obligations  under letters of
            credit.

            On December 30, 1996, JBAK Canton Realty,  Inc. ("JBAK  Realty"),  a
            wholly-owned  subsidiary of JBAK Holding,  Inc. ("JBAK Holding") and
            an indirect,  wholly-owned  subsidiary  of the  Company,  obtained a
            $15.5  million  mortgage  loan  from The Chase  Manhattan  Bank (the
            "Mortgage  Loan")  secured by the real estate,  buildings  and other
            improvements located at 555 Turnpike Street,  Canton,  Massachusetts
            (the "Canton Property") owned by JBAK Realty. JBAK Realty leases the
            Canton Property to JBI, Inc. ("JBI"),  a wholly-owned  subsidiary of
            the Company.  The Canton Property is used as the Company's corporate
            headquarters.  Neither  JBAK  Holding nor JBAK Realty have agreed to
            pay or make their assets  available to pay  creditors of the Company
            or of JBI.  Neither  the  Company  nor JBI have agreed to make their
            assets available to pay creditors of JBAK Holding or of JBAK Realty.
            Proceeds of the Mortgage  Loan were used to pay down loans under the
            Company's  revolving credit  facility.  This loan is being repaid in
            equal monthly payments of principal and interest over 15 years.

         Senior Subordinated Debt
            In June 1989, the Company issued $35 million of senior  subordinated
            notes with detachable warrants, which enable the holders to purchase
            600,000  shares of the Company's  common stock at a price of $20 per
            share,  subject to  adjustments,  and which expire in May,  1999. At
            January 30, 1999, the detachable warrants enable holders to purchase
            approximately 640,000 shares at $18.80 per share. Subject to certain
            conditions,  the Company may repurchase  all, but not less than all,
            of the  outstanding  warrants at a price equal to the product of (a)
            the  aggregate  number,  as of such time,  of shares of common stock
            issuable upon exercise of the warrant by (b) $18.80 and  multiplying
            the  product  thereof  by 50%.  The  senior  subordinated  notes  of
            $1,498,023 at January 30, 1999  ($2,990,111 at January 31, 1998) are
            presented net of $1,977 ($9,889 at January 31,1998),  which reflects
            the unaccreted  portion of the $1,710,000 value originally  assigned
            to the detachable  warrants.  The value of the warrants was recorded
            as  additional  paid-in  capital  and is being  accreted  using  the
            effective-interest method.

            The senior  subordinated  debt was reduced by $27.5 million in June,
            1992 with proceeds from the $70 million 7% convertible  subordinated
            notes referred to below.  The senior  subordinated  notes are due in
            installments  of $1.5 million per year beginning in May, 1995 with a
            final  payment in May,  1999.  Interest,  currently  at  13.21%,  is
            payable quarterly.

         Convertible Subordinated Debt
            Convertible  subordinated  debt at January  30, 1999 and January 31,
            1998 was comprised of:
<TABLE>
                  <S>                                                            <C>                   <C>
                                                                                   1999                  1998
                                                                                   ----                  ----
                  7% convertible subordinated notes                              $70,000,000           $70,000,000
                  Convertible debentures                                             353,000               353,000
                                                                                  ----------            ----------
                                                                                 $70,353,000           $70,353,000
                                                                                 ===========           ===========
</TABLE>

            In June  1992,  the  Company  issued $70  million of 7%  convertible
            subordinated  notes due 2002. The notes are convertible  into common
            stock at a  conversion  price  of  $16.125  per  share,  subject  to
            adjustment in certain events.

            The convertible  debentures  began accruing  interest on January 15,
            1997 at a rate of 8% and no principal  will be payable until January
            15,  2002.  The debt is subject,  under  certain  circumstances,  to
            mandatory conversion.  Approximately 6,500 shares of J. Baker common
            stock are reserved  for any future  conversions  of the  convertible
            debentures.

<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

            The Company's  revolving credit  facilities and senior  subordinated
            notes  contain  various   covenants  and   restrictive   provisions,
            including restrictions on the incurrence of additional  indebtedness
            and liens, the payment of dividends and the maintenance of specified
            financial  ratios,  minimum  levels  of  working  capital  and other
            financial  criteria.  As of January  30,  1999,  the  Company was in
            compliance  with  all  such  covenants  except  for  certain  of its
            Footwear Credit Facility covenants, for which compliance was waived.

            The Company is  restricted,  under  various  debt  agreements,  from
            paying cash  dividends  unless  tangible net worth  exceeds  certain
            required  levels.  As  defined  by the  most  restrictive  of  those
            agreements,  minimum  tangible net worth,  as so defined,  was $67.1
            million at January 30,  1999.  At January 30,  1999,  the  Company's
            tangible net worth, as so defined, was approximately $76.1 million.

            Scheduled   principal   repayments   of   long-term   debt,   senior
            subordinated  notes and convertible  subordinated  debt for the next
            five fiscal years and thereafter are as follows:
<TABLE>
                           <S>                                                  <C>
                             Fiscal year
                           ending January
                           --------------
                                2000                                            $  2,112,955
                                2001                                              91,085,950
                                2002                                               1,086,348
                                2003                                              70,802,141
                                2004                                                 877,387
                                Thereafter                                        10,730,999
</TABLE>

(4)      Taxes on Earnings
         -----------------

            Income tax  expense  (benefit)  attributable  to income  (loss) from
operations consists of:
<TABLE>
                <S>                                               <C>                 <C>                 <C>
                                                                     Current             Deferred                Total
                Year ended January 30,1999:
                  Federal                                          $       -          $   631,000           $   631,000
                  State and city                                      450,000              63,000               513,000
                                                                      -------              ------               -------
                                                                   $  450,000         $   694,000           $ 1,144,000
                                                                   ==========         ===========           ===========
                Year ended January 31, 1998:
                  Federal                                          $ (604,000)        $ 2,130,712           $ 1,526,712
                  State and city                                      475,000             436,288               911,288
                                                                      -------             -------               -------
                                                                   $ (129,000)        $ 2,567,000           $ 2,438,000
                                                                   ==========         ===========           ===========
                Year ended February 1, 1997:
                  Federal                                          $        -         $(32,688,000)        $(32,688,000)
                  State and city                                    1,764,000          (14,922,000)         (13,158,000)
                                                                    ---------          -----------          ----------- 
                                                                   $1,764,000         $(47,610,000)        $(45,846,000)
                                                                   ==========         ============         ============ 
</TABLE>

             The following is a  reconciliation  between the  statutory  federal
             income  tax rate and the  Company's  effective  rate for the  years
             ended January 30, 1999, January 31, 1998 and February 1, 1997:
<TABLE>
                <S>                                                     <C>                   <C>                   <C>
                                                                        1999                  1998                  1997
                                                                        ----                  ----                  ----
                Statutory federal income tax rate                       35.0%                  35.0%               (35.0%)
                State income taxes, net of federal
                  income tax benefit                                    10.5%                   9.5%                (5.4%)
                Change in beginning of year balance of the valuation
                  allowance for deferred tax assets                     (9.5%)                    -                  7.4%
                Other                                                     -                    (5.5%)                3.8%
                                                                        ----                   ----                 ---- 
                                                                        36.0%                  39.0%               (29.2%)
                                                                        ====                   ====                =====  
</TABLE>

<PAGE>

                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

             The  tax  effects  of  temporary  differences  that  give  rise  to
             significant  portions  of  deferred  tax  assets and  deferred  tax
             liabilities  at January 30, 1999 and January 31, 1998 are presented
             below:
<TABLE>

              <S>                                                            <C>                       <C>
                                                                                 1999                       1998
                                                                                 ----                       ----
              Deferred tax assets:
                 Accounts receivable                                         $    81,000               $    177,000
                 Inventory                                                     2,210,000                  6,006,000
                 Intangible assets                                             3,480,641                  3,114,000
                 Other assets                                                          -                     23,000
                 Nondeductible accruals and reserves                                   -                    876,000
                 Operating loss and credit carryforwards                      89,676,000                 88,763,000
                                                                              ----------                 ----------
                     Total gross deferred tax assets                          95,447,641                 98,959,000
                     Less valuation allowance                                (25,669,000)               (26,636,000)
                                                                             -----------                ----------- 
                     Net deferred tax assets                                  69,778,641                 72,323,000
                                                                              ----------                 ----------

              Deferred tax liabilities:
                 Property, plant and equipment                                (6,509,000)                (7,817,000)
                 Intangible assets                                            (1,669,000)                  (736,000)
                 Nondeductible accruals and reserves                          (1,661,000)                         -
                 Other liabilities                                                     -                 (2,590,000)
                                                                              ----------                 ----------
                     Total gross deferred tax liabilities                     (9,839,000)               (11,143,000)
                                                                              ----------                ----------- 
                     Net deferred tax asset                                  $59,939,641                $61,180,000
                                                                             ===========                ===========
</TABLE>

            At January 30, 1999 and January 31,  1998,  net  deferred  tax asset
            consisted of the following:
<TABLE>
                <S>                                                          <C>                         <C>
                ---                                                          ---                         ---
                                                                                  1999                      1998
                 Deferred tax asset, net - current                           $  4,535,000                $ 5,230,000
                 Deferred tax asset, net - non-current                         55,404,641                 55,950,000
                                                                               ----------                 ----------
                                                                             $ 59,939,641                $61,180,000
                                                                             ============                ===========
</TABLE>

            At  January  30,   1999,   the  Company  has  net   operating   loss
            carryforwards ("NOLS") and general business credit carryforwards for
            federal income tax purposes of approximately $195.0 million and $1.3
            million,  respectively,  which expire in years ended  January,  2002
            through January,  2013. SFAS No. 109, "Accounting for Income Taxes",
            requires the tax benefit of such NOLS be recorded as an asset to the
            extent the Company assesses the utilization of such NOLS to be "more
            likely than not".  The NOLS  available for future  utilization  were
            generated  principally  by  restructuring  and  other  non-recurring
            charges,  which  are not  expected  to  continue.  The  Company  has
            determined,  based upon the history of prior  operating  earnings in
            its ongoing businesses and its expectations for the future, that its
            operating  income will more likely than not be  sufficient  to fully
            utilize the $195.0 million of NOLS prior to their  expiration in the
            year 2013.

            The Company has minimum tax credit  carryforwards  of  approximately
            $4.0  million  available to reduce  future  regular  federal  income
            taxes, if any, over an indefinite period.

(5)      Pension and Profit Sharing Plans
         --------------------------------

            The Company has a noncontributory pension plan (the "Pension Plan"),
            which  covers   substantially   all   non-union   employees  and  is
            administered  by Trustees who are officers of the Company.  In March
            1997, the Board of Directors of the Company approved an amendment to
            the  Pension  Plan,  which  resulted  in the  freezing of all future
            benefits under the plan as of May 3, 1997. As a result,  the Company
            recognized a gain of $3.7 million,  which had an after-tax effect of
            $2.2 million,  in fiscal 1998. The  curtailment  gain is included in
            selling,  administrative  and general  expenses  for the fiscal year
            ended January 31, 1998.


<PAGE>

                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

            The following table sets forth the Pension Plan's funded status at 
            January 30, 1999 and January 31, 1998:
<TABLE>
                  <S>                                                           <C>                     <C>
                                                                                    1999                   1998
                  Change in benefit obligation:
                      Balance at beginning of year                              $15,368,000             $18,832,000
                      Benefits and expenses paid                                 (1,248,000)             (1,336,000)
                      Service and interest costs                                  1,236,000               1,388,000
                      Actuarial (gains) losses                                     (498,000)                665,000
                      Effect of curtailment                                               -              (4,181,000)
                                                                                 ----------              ----------
                           Balance at end of year                                14,858,000              15,368,000

                  Change in fair value of plan assets:
                      Balance at beginning of year                               19,146,000              15,737,000
                      Actual return on plan assets                                5,399,000               3,432,000
                      Employer contributions                                              -               1,313,000
                      Benefits and expenses paid                                 (1,248,000)             (1,336,000)
                                                                                 ----------              ---------- 
                           Balance at end of year                                23,297,000              19,146,000

                  Plan assets greater than benefit obligation                     8,439,000               3,778,000
                  Unrecognized net gain                                          (5,379,000)               (925,000)
                                                                                 ----------                -------- 
                  Prepaid pension cost                                          $ 3,060,000             $ 2,853,000
                                                                                ===========             ===========
</TABLE>

            In December 1993, the Board of Directors of the Company  established
            a Supplemental  Retirement plan (the "Supplemental Plan") to provide
            benefits attributable to compensation in excess of $160,000 but less
            than  $267,326.  In  December,  1998,  the Board of Directors of the
            Company  approved  an  amendment  to the  Supplemental  Plan,  which
            resulted in the freezing of all future benefits under the Plan as of
            December 31,  1998.  As a result,  the Company  recognized a gain of
            $250,000.   The   curtailment   gain   is   included   in   selling,
            administrative  and  general  expenses  for the  fiscal  year  ended
            January 30, 1999.  The following  table sets forth the  Supplemental
            Plan's funded status at January 30, 1999 and January 31, 1998:
<TABLE>
                  <S>                                                            <C>                     <C>
                                                                                      1999                  1998
                                                                                      ----                  ----
                  Change in benefit obligation:
                      Balance at beginning of year                               $  691,000              $  700,000
                      Benefits and expenses paid                                     (2,000)                      -
                      Service and interest costs                                    119,000                 107,000
                      Plan change                                                         -                (116,000)
                      Effect of curtailment                                        (475,000)                      -
                                                                                   --------                --------
                           Total accumulated benefit obligations                    333,000                 691,000
                  Change in fair value of plan assets:
                      Balance at beginning of year                                        -                       -
                      Employer contributions                                          2,000                       -
                      Benefits and expenses paid                                     (2,000)                      -
                                                                                     ------                --------
                           Balance at end of year                                         -                       -

                  Plan assets less than benefit obligation                          (333,000)               (691,000)
                  Unrecognized prior service cost                                         -                  248,000
                  Unrecognized net gain                                             (126,000)               (130,000)
                                                                                    --------                -------- 
                  Accrued pension cost                                            $ (459,000)             $ (573,000)
                                                                                  ==========              ========== 
</TABLE>

            Assumptions  used to develop the Plans'  funded status were discount
            rate (7.0%) and increase in compensation levels (4.5%).

            Plan assets of the Pension Plan consist  primarily of common  stock,
            U.S. government obligations, mutual funds and insurance contracts.

<PAGE>

                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

            Net pension  cost  (benefit)  for the years ended  January 30, 1999,
            January 31, 1998 and  February 1, 1997  includes the following 
            components:
<TABLE>
                  <S>                                                    <C>               <C>               <C>
                                                                              1999              1998             1997
                                                                              ----              ----             ----
                  Service cost (benefit) earned during the year          $   296,000       $   315,000       $1,828,000
                  Interest cost on projected benefit obligation            1,059,000         1,180,000        1,420,000
                  Expected return on plan assets                          (1,423,000)       (1,286,000)        (923,000)
                  Effect of curtailment                                     (250,000)       (3,669,000)               -
                                                                            --------        ----------       ----------
                      Net pension cost (benefit)                          $ (318,000)      $(3,460,000)      $2,325,000
                                                                          ==========       ===========       ==========
</TABLE>

            Assumptions used to develop the net periodic pension cost for fiscal
            1999 were discount rate (7.0%),  expected long-term return on assets
            (9.0%) and increase in compensation levels (4.5%).

            In January,  1992, the Company implemented a qualified 401(k) profit
            sharing plan available to eligible  full-time  employees.  Under the
            401(k)  plan,  the  Company  matches  50% (25%  for the  year  ended
            February 1, 1997) of the qualified employee's  contribution up to 6%
            of the  employee's  salary (3% for the year ended February 1, 1997).
            The total cost of the matching  contribution was $867,000,  $897,000
            and $379,000 for the years ended January 30, 1999,  January 31, 1998
            and February 1, 1997, respectively.

            The  Company  has  established  incentive  bonus  plans for  certain
            executives and employees. The bonus calculations are generally based
            on achievement  of certain  profit levels,  as defined in the plans.
            For the years ended January 30, 1999,  January 31, 1998 and February
            1, 1997, $180,000, $70,000 and $145,500,  respectively, was provided
            under the bonus plans.

            The Company does not provide  post-retirement  benefits,  other than
            pensions as defined under SFAS No. 106.

(6)      Stock Options, Performance Share Awards and Restricted Stock Awards
         -------------------------------------------------------------------

            The Company has options  outstanding  under the Amended and Restated
            1985 Stock Option Plan,  the 1992  Directors'  Stock Option Plan and
            the 1994  Equity  Incentive  Plan (the  "Stock  Option  Plans").  In
            addition,  the Company has granted options which are not part of any
            Stock Option Plan.

            The Amended and  Restated  1985 Stock  Option Plan  provided for the
            issuance of incentive  and  non-qualified  stock options to officers
            and  employees  at an option price of not less than 100% of the fair
            market  value of a share on the date of grant.  Under this plan,  no
            shares of common stock are  available for grant at January 30, 1999,
            as no options could be granted thereunder after June, 1995.

            In fiscal 1995, the Company  established  the 1994 Equity  Incentive
            Plan,  which  provides  for the  issuance of one  million  shares of
            common stock to officers and  employees in the form of stock options
            (both  incentive  options  and  non-qualified  options),  grants  of
            restricted  stock,  grants of  performance  shares and  unrestricted
            grants of stock.  Under this plan,  at January 30,  1999,  there are
            130,550  shares of common stock  available for grants of performance
            shares and 588,094  shares of common stock  available  for all other
            types of grants.

            Options  granted  under the Amended and  Restated  1985 Stock Option
            Plan and the 1994 Equity  Incentive Plan become  exercisable  either
            ratably over four or more years or upon grant,  at the discretion of
            the Board of Directors, and expire ten years from date of grant.

            The 1992  Directors'  Stock Option Plan  provides for the  automatic
            grant  of  2,500  shares  of  the  Company's  common  stock  upon  a
            director's  initial  election to the Board of  Directors  and at the
            close of business on the fifth  business day following the Company's
            annual meeting of  stockholders.  Options under the Directors'  Plan
            are granted at a price equal to the closing  price of the  Company's
            common stock on the date of grant.  Options  granted  under the 1992
            Directors'  Plan are  exercisable  in full upon grant and expire ten
            years  from date of grant.  Under this plan,  at January  30,  1999,
            there are 77,500 shares of common stock available for grants.


<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

            The Company  applied APB Opinion No. 25 and related  interpretations
            in  accounting  for its  stock  options.  Accordingly,  $275,112  of
            compensation  cost has been  recognized  for  stock  options  in the
            Company's  results of  operations  for fiscal 1999.  Had the Company
            recorded a charge for the fair value of options  granted  consistent
            with SFAS No. 123,  net  earnings  and net earnings per common share
            would have  decreased  by  $1,786,500  and $0.13 in fiscal  1999 and
            $1,458,000 and $0.10 in fiscal 1998, respectively,  and net loss and
            net loss per common share would have increased by $940,000 and $0.07
            in fiscal 1997.

            The fair  value of each  option  grant is  estimated  on the date of
            grant  using  the  Black-Scholes  options  pricing  model,  with the
            following  weighted  average  assumptions  used for grants in fiscal
            1999, 1998,and 1997:
<TABLE>
                  <S>                                                 <C>              <C>               <C>
                                                                         1999             1998              1997
                                                                         ----             ----              ----
                  Risk-free interest rate                                 5.2%             5.8%              5.9%
                  Expected option lives                                7.7 years        6.8 years         6.8 years
                  Expected volatility                                    56.8%            51.5%             59.0%
                  Expected dividend yield                                 1.4%             0.8%              0.8%
</TABLE>

            The effect of applying SFAS No. 123 is not representative of the pro
            forma  effect on net  earnings in future  years  because it does not
            take into  consideration pro forma  compensation  expense related to
            grants made prior to fiscal 1996.

            Data with respect to stock options for fiscal 1999, 1998 and 1997 is
            as follows:
<TABLE>
                <S>                                <C>            <C>       <C>            <C>       <C> 
                                                             1999                     1998                   1997           
                                                    ----------------------  ----------------------- -----------------------
                                                                  Weighted                 Weighted                Weighted
                                                                   Average                  Average                 Average
                                                                  Exercise                 Exercise                Exercise
                                                     Shares         Price      Shares        Price      Shares       Price 
                                                     ------         -----      ------        -----      ------       ----- 
                Outstanding at beginning of year   1,184,923        $ 8.37   1,072,430        $ 9.58   1,176,170       $15.30
                Granted                              264,686          7.61     637,500          7.16     731,262         8.70
                Exercised                            (23,199)         7.86      (8,500)         5.62     (13,749)        7.65
                Canceled                            (176,570)         6.92    (516,507)        11.13    (821,253)       16.55
                                                    --------                  --------                  --------        
                Options outstanding at end of year 1,249,840          8.23   1,184,923          8.37   1,072,430         9.58
                                                   =========                 =========                 =========         

                Options exercisable at end of year   585,751                   439,801                   516,027

                Weighted average fair-value of
                  options granted during the year      $5.06                     $3.78                     $4.94
</TABLE>

            Effective as of February 5, 1996, the Board of Directors offered all
            employee  participants  in the Stock Option Plans the opportunity to
            reprice to $9.00 per share any then  outstanding  stock options with
            an exercise price in excess of $9.00 per share. On February 5, 1996,
            the fair market  value of the  Company's  common stock was $5.25 per
            share.  Pursuant to the  repricing  program,  employees  electing to
            reprice  outstanding stock options were required to accept a reduced
            number of option  shares  commensurate  with the  reduction to $9.00
            from the original  grant price.  Each repriced  option  retained the
            vesting  schedule  associated  with the original  grant.  Holders of
            original  option grants  totaling  650,876 shares elected to reprice
            such options to $9.00, resulting in a reduction of such options held
            to  345,148  shares,  which is  contained  in the  number of options
            granted in fiscal 1997.
<PAGE>

                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

            The  following  table  sets  forth a summary  of the  stock  options
            outstanding at January 30, 1999:
<TABLE>
               <S>                 <C>           <C>                 <C>                 <C>            <C>
                                              Options Outstanding                             Options Exercisable       
                                   --------------------------------------------------    --------------------------------
                                                 Weighted Average
                                                 Remaining
                   Range of          Number      Years of            Weighted Average      Number       Weighted Average
                Exercise price     Outstanding   Contractual Life     Exercise Price     Exercisable     Exercise Price
                --------------     -----------   ----------------     --------------     -----------     --------------
                $ 1.00-$ 8.63          564,870          7.6                $ 5.85            214,383          $ 6.37
                $ 8.88-$ 9.88          542,569          7.0                $ 9.14            274,967          $ 9.10
                $10.31-$17.00          107,401          8.0                $12.88             61,401          $13.61
                $19.25-$22.38           35,000          4.7                $20.95             35,000          $20.95
                                        ------                                                ------          

                $ 1.00- $22.38       1,249,840          7.3                $ 8.23            585,751          $ 9.29
                                     =========                                               =======          
</TABLE>

            During fiscal 1997 and fiscal 1998, the Company granted  Performance
            Share  Awards,  which  entitled  certain  officers  to shares of the
            Company's  common  stock in fiscal  1999 if the price of the  common
            stock  attained a "Target  Price" (the average  closing price of the
            Company's  common stock for certain defined  periods) between $10.00
            and $15.00. In fiscal 1999, the Company granted 21,750 shares of the
            Company's common stock to eligible officers.

            During fiscal 1999, the Company granted certain officers stock price
            performance  based  restricted  stock awards,  pursuant to which the
            officers  purchased,  in  the  aggregate,   100,000  shares  of  the
            Company's common stock at a purchase price of $10.18 per share. Each
            of such  officers  executed a  promissory  note with the  Company as
            consideration  for the aggregate  purchase price.  Each note will be
            ratably  forgiven  over five years  provided  each of such  officers
            remain  employed  by the  Company  during  such  time.  In the event
            certain  stock price  appreciation  criteria  are not met during the
            performance  period,  the  Company  has the  right to  repurchase  a
            portion  of the  shares,  up to a maximum  of 80% of each  officer's
            shares, as defined in each agreement.

(7)      Commitments and Contingent Liabilities
         --------------------------------------

         Leases
            The  Company  leases  its retail  stores,  computers,  vehicles  and
            certain of its offices and  warehouse  facilities.  The Company also
            operates from leased  premises  under license  agreements  generally
            requiring payment of annual rentals contingent upon sales.

            The Company remains liable under certain leases and lease guaranties
            for premises  previously  leased by the Company for the operation of
            Parade of Shoes and Fayva  footwear  stores  (the  "Excess  Property
            Leases").  The total  liability  under the Excess Property Leases is
            approximately  $32.0 million as of January 30, 1999. The Company has
            reduced   its  actual   liability   by   assigning   or   subleasing
            substantially  all of the  Excess  Property  Leases to  unaffiliated
            third parties.

            At January 30, 1999,  minimum  rental  commitments  under  operating
            leases are as follows:
<TABLE>
                  <S>                                   <C>                               <C>
                    Fiscal Year
                  ending January                        Net minimum rentals               Minimum sub-rentals
                  --------------                        -------------------               -------------------
                                                                           (in thousands)
                      2000                                $ 32,426                            $   874
                      2001                                  25,969                                582
                      2002                                  22,025                                173
                      2003                                  17,358                                 69
                      2004                                  12,013                                 24
                      Thereafter                            17,383                                  -
                                                            ------                             ------
                                                          $127,174                             $1,722
                                                          ========                             ======
</TABLE>


<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

            Rent expense for the years ended January 30, 1999,  January 31, 1998
            and February 1, 1997 was as follows:
<TABLE>
                      <S>                                          <C>              <C>                       <C>
                                                                     1999                 1998                   1997
                                                                     ----                 ----                   ----
                                                                                    (in thousands)
                      Minimum rentals                              $ 32,989              $ 32,882              $ 49,167
                      Contingent rentals                             49,821                51,611                83,084
                                                                     ------                ------                ------
                                                                     82,810                84,493               132,251
                      Less sublease rentals                             821                   556                   317
                                                                        ---                   ---                   ---
                         Net rentals                               $ 81,989              $ 83,937              $131,934
                                                                   ========              ========              ========
</TABLE>

         Other Commitments and Contingencies
            The Company has employment  agreements  with certain of its officers
            under which it is committed  to pay an  aggregate  of  approximately
            $3.0 million through September, 2000.

            During  fiscal  1996,  the  Company's  Board  of  Directors  adopted
            executive severance agreements,  which create certain liabilities in
            the event of  termination  of the covered  executives  within  three
            years  following  either a  change  of  control  of the  Company  or
            termination of certain key executives of the Company.  The aggregate
            commitment amount under these executive severance agreements, should
            all  9  covered  employees  be  terminated,  is  approximately  $1.6
            million.

            At  January  30,  1999  and  January  31,  1998,   the  Company  was
            contingently  liable under  letters of credit  totaling $4.4 million
            and $8.8 million, respectively.  These letters of credit, which have
            terms  ranging  from one month to one year,  are used  primarily  to
            collateralize  obligations  to third parties for the purchase of the
            Company's  inventory.  The fair value of these  letters of credit is
            estimated to be the same as the contract  values based on the nature
            of fee  arrangements  with the issuing  banks.  No material  loss is
            anticipated  due  to  non-performance  by  counterparties  to  these
            arrangements.

(8)      Stockholders' Equity
         --------------------

            The Board of  Directors  of the  Company  is  authorized  by vote or
            votes,  from time to time  adopted,  to provide for the  issuance of
            Preferred  Stock  in one or more  series  and to fix and  state  the
            voting powers, designations, preferences and relative participating,
            optional  or other  special  rights of the shares of each series and
            the qualifications, limitations and restrictions thereof.


            On December 15, 1994,  the  Company's  Board of Directors  adopted a
            Shareholder  Rights Agreement (the "Rights  Agreement")  designed to
            enhance the Company's ability to protect  shareholder  interests and
            to  ensure  shareholders  receive  fair  treatment  in the event any
            future coercive takeover attempt of the Company is made. Pursuant to
            the Rights  Agreement,  the Board of  Directors  declared a dividend
            distribution of one preferred stock purchase right (the "Right") for
            each outstanding share of the Company's common stock to shareholders
            of record as of the close of business on January 6, 1995. Each right
            entitles the holder to purchase  from the Company a unit  consisting
            of one ten  thousandth  (1/10,000)  of a share  of  Series  A Junior
            Participating Cumulative Preferred Stock, par value $1.00 per share,
            at a cash  exercise  price of $70 per unit,  subject to  adjustment,
            upon the  occurrence  of  certain  events as set forth in the Rights
            Agreement.  These  events  include the earliest to occur of: (i) the
            acquisition of 15% or more of the Company's outstanding common stock
            by any  person  or  group;  (ii) the  commencement  of a  tender  or
            exchange offer that would result upon its  consummation  in a person
            or a  group  becoming  the  beneficial  owner  of 15% or more of the
            Company's  outstanding  common stock; or (iii) the  determination by
            the Board of Directors  that any person is an "Adverse  Person",  as
            defined in the  Rights  Agreement.  The  Rights are not  exercisable
            until or  following  the  occurrence  of one of the above events and
            will expire on  December  14,  2004  unless  previously  redeemed or
            exchanged by the Company, as provided in the Rights Agreement.


<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

(9)      Restructuring and Other Non-Recurring Charges
         ---------------------------------------------

            In  the  year  ended  January  30,  1999,  the  Company  recorded  a
            non-recurring  charge of $3.6 million  ($2.3  million,  or $0.17 per
            share  on  an  after-tax  basis),   related  to  the  January,  1999
            acquisition  of Hills Stores  Company  ("Hills") by Ames  Department
            Stores,  Inc.  ("Ames"),  both  of  which  are  footwear  department
            licensors of the Company.  This charge, which is included in cost of
            sales,  reflects the estimated costs associated with the liquidation
            of the  Company's  inventory  in all 155 Hills stores prior to their
            remodeling  and reopening as Ames stores.  The Company will continue
            to operate the footwear  departments in the former Hills stores upon
            their reopening.

            During  fiscal  years 1998 and 1997,  the Company  restructured  its
            footwear operations (the "Footwear Restructuring") in order to focus
            its efforts on the management,  development and growth of its Casual
            Male Big & Tall and Work 'n Gear apparel  businesses.  In connection
            with  the  Footwear  Restructuring,   in  March,  1997  the  Company
            completed the sales of its SCOA and Parade of Shoes  businesses.  In
            addition,  the Company  reduced its  investment  in its JBI Footwear
            (then known as Licensed  Discount)  division.  In fiscal  1997,  the
            Company recorded a pre-tax charge of $166.6 million ($117.1 million,
            or $8.42 basic loss per share, on an after-tax basis) related to the
            sales of the SCOA and Parade of Shoes businesses,  the write-down to
            estimated  fair value of certain  assets related to the JBI Footwear
            division,  and  severance  and  consolidation  costs  related to the
            downsizing  of the  Company's  administrative  areas  and  corporate
            facilities.  Of the pre-tax charge, $122.3 million was included as a
            separate  component  of  results  of  operations  in  the  Company's
            Consolidated  Statements of Earnings for the year ended  February 1,
            1997.  The Company also  recorded a charge to cost of sales of $37.3
            million  related to the reduction to estimated fair value of the JBI
            Footwear  division's  inventory.  The remaining  $7.0 million of the
            charge  included an increase in the allowance for doubtful  accounts
            for the JBI  Footwear  division's  accounts  receivable  and  losses
            incurred  from  actions  taken in order to  maximize  cash  proceeds
            received  for the  assets  sold in the  SCOA  and  Parade  of  Shoes
            businesses.

            Asset   write-offs   included   in  the   restructuring   and  other
            non-recurring  charges  totaled $99.6 million,  while the balance of
            the  charge  required  cash  outlays,   primarily  in  fiscal  1998.
            Restructuring and other non-recurring charges included $63.7 million
            for  the  loss  on the  sales  of  the  SCOA  and  Parade  of  Shoes
            businesses,  $36.8  million  for  asset  write-offs  related  to the
            reduction of the Company's  investment in its JBI Footwear division,
            $9.3 million for severance and employee benefit costs,  $9.7 million
            for lease  obligations  and asset  write-offs  for excess  corporate
            facilities, and $2.8 million for other costs and expenses.

            In  addition,  in the year  ended  February  3,  1996,  the  Company
            liquidated  its Fayva footwear  business and recorded  restructuring
            charges  related to employee  severance  and other  benefits,  fixed
            asset  write-offs,  losses on the disposal of  inventory,  and costs
            related to the disposition of the Fayva store leases.

            A summary of the restructuring activity is presented below:
<TABLE>
            <S>                                                     <C>                <C>                <C>
                                                                      1999                1998                 1997
                                                                      ----                ----                 ----
            Balance, beginning of year                              $ 5,578,000        $22,372,000        $  13,300,000

            Restructuring and other non-recurring charges                     -                  -          122,309,000

            Non-cash asset write-downs                                        -                  -          (99,600,000)

            Inventory liquidation, lease termination,
              severance and other costs                              (4,220,000)       (16,794,000)         (13,637,000)
                                                                     ----------        -----------          ----------- 

            Balance, end of year                                    $ 1,358,000        $ 5,578,000          $22,372,000
                                                                    ===========        ===========          ===========
</TABLE>

<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         Sale of Shoe Corporation of America Division
            On March 5, 1997,  the Company  sold its SCOA  division to an entity
            formed by CHB  Capital  Partners  of  Denver,  Colorado,  along with
            Dennis B. Tishkoff,  President of SCOA, and certain  members of SCOA
            management.  The  transaction  involved the transfer to the buyer of
            the division's  inventory,  fixed assets,  intellectual property and
            license  agreements for the various  department and specialty  store
            chains  serviced by SCOA, as well as the  assumption by the buyer of
            certain  liabilities  of the SCOA division.  In connection  with the
            sale of SCOA,  the  Company  paid a total of $3.0  million to former
            SCOA  stockholders  in order to  satisfy  a  contractual  contingent
            payment  obligation,  based on  earnings,  owed to such  former SCOA
            stockholders.  Net cash proceeds received from the sale,  reduced by
            the amount of the contingent payment, a $1.4 million one-year escrow
            account  balance and transaction  expenses of $1.3 million,  totaled
            approximately $40.0 million.  The Company also remained as guarantor
            on certain of SCOA's  license  agreements  for a period of up to one
            year.

         Sale of Parade of Shoes Division
            On March 10, 1997,  the Company sold its Parade of Shoes division to
            Payless ShoeSource,  Inc. ("Payless").  The transaction involved the
            transfer  to  Payless of the  division's  inventory,  fixed  assets,
            intellectual property and leases on the 186 then remaining Parade of
            Shoes stores.  Net cash proceeds from the transaction,  reduced by a
            $2.7  million  two-year  escrow  account  balance  and the  retained
            accounts payable of the division,  were approximately $20.0 million.
            The Company remains  contingently liable under certain of the Parade
            of Shoes  store  leases  assigned to Payless.  By March,  1999,  the
            Company  had  received  $2.4  million in escrow  proceeds,  with the
            balance  remaining in escrow until  resolution of a dispute  between
            the Company and Payless.

         Revaluation and Downsizing of JBI Footwear Division
            As part of the Footwear  Restructuring  in fiscal 1997,  the Company
            made a  determination  to reduce its  investment in its JBI Footwear
            business.  As a result,  the Company  undertook an evaluation of the
            value of the assets in the JBI Footwear business,  wrote off certain
            assets  which did not  benefit  future  operations  and  wrote  down
            certain other assets,  including  deferred lease acquisition  costs,
            systems  development  costs  and  excess  of costs  over net  assets
            acquired, to estimated fair value. Included in the restructuring and
            other non-recurring charges for the year ended February 1, 1997, are
            write-offs of intangible assets of $33.9 million,  which the Company
            deemed to have no future  value,  and accrued  costs of $2.8 million
            relating to repositioning and downsizing the JBI Footwear  business.
            In addition,  the Company recorded a charge of $37.3 million to cost
            of sales, representing the write-down of the JBI Footwear division's
            inventory to estimated  fair value,  and a charge of $2.2 million to
            selling,   administrative  and  general  expenses,  representing  an
            increase to the Company's allowance for doubtful accounts related to
            amounts  expected to be realized  from the  settlement of Chapter 11
            claims with  various  licensors.  The Company  currently  intends to
            continue to concentrate the JBI Footwear  division's  efforts on its
            major licensors,  while exploring future strategic  options for this
            business.

         Settlement of Litigation
            On September  17, 1997,  the Company  settled a patent  infringement
            lawsuit brought  against it and its Morse Shoe,  Inc.  subsidiary by
            Susan Maxwell. Pursuant to the settlement agreement, both cases were
            dismissed  with  prejudice  with no  admissions of liability and the
            parties executed a mutual release of all claims.  Under the terms of
            the  settlement,  the Company agreed to make payments to Ms. Maxwell
            of  $4,137,000,  in the  aggregate,  over a  three-year  period.  In
            connection  with the  settlement,  the  Company  recorded a one-time
            charge to earnings of $3.4  million  ($2.1  million on an  after-tax
            basis) during the third quarter of fiscal 1998  reflecting  costs of
            the settlement not previously accrued for.
<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

(10)     Bankruptcy Filings of Licensors
         -------------------------------

            On June 23, 1995, Bradlees Stores, Inc. ("Bradlees"),  a licensor of
            the Company,  filed for  protection  under  Chapter 11 of the United
            States  Bankruptcy Code. At the time of the bankruptcy  filing,  the
            Company had outstanding  accounts  receivable of approximately  $1.8
            million due from  Bradlees.  On April 13, 1998,  Bradlees  filed its
            Joint Plan of Reorganization  and Disclosure  Statement (the "Plan")
            with the United States Bankruptcy Court for the Southern District of
            New York, which, as amended, was confirmed on November 18, 1998. The
            Plan became  effective on February 2, 1999 (the  "Effective  Date"),
            the  Company's  license  agreement  with  Bradlees  was  amended and
            assumed  and  the  reorganized  Bradlees  emerged  from  bankruptcy.
            Pursuant to the amended agreement, ten days after the Effective Date
            Bradlees  made a cash  distribution  to the Company in the amount of
            $360,000  and  shall  pay  the  unpaid   balance  of  the  Company's
            pre-petition   claim  in  thirty-six   equal  monthly   installments
            commencing  on March 1,  1999,  with  interest  on such  outstanding
            balance commencing with the seventh monthly payment.  As provided in
            the  amended  licensed  agreement,  upon the  occurrence  of certain
            events,  the entire unpaid  balance of the Company's  claim shall be
            paid  within 30 days  after  such  occurrence,  without  penalty  or
            interest.  The Company's  sales in the Bradlees chain for the fiscal
            year ended January 30, 1999 were $43.9 million.

            On October  18,  1995,  Jamesway  Corporation  ("Jamesway"),  then a
            licensor of the Company,  filed for  protection  under Chapter 11 of
            the United States  Bankruptcy  Code.  Subsequently,  Jamesway ceased
            operation  of its  business in all of its 90 stores.  At the time of
            the  bankruptcy  filing,   the  Company  had  outstanding   accounts
            receivable of approximately $1.4 million due from Jamesway.  Because
            Jamesway ceased operation of its business, the Company filed a claim
            for damages, as its contract with Jamesway was rejected. The Company
            negotiated  a settlement  of the amount of its claim with  Jamesway,
            which was approved by the  Bankruptcy  Court.  The Jamesway  plan of
            liquidation  was  confirmed  on June 6, 1997 and  during  the second
            quarter of fiscal 1998, the Company received a partial  distribution
            of the amount owed to it under the settlement.  In August, 1997, the
            Company  assigned  its  rights  to any  further  distributions  from
            Jamesway to a third party and received,  in consideration  therefor,
            an additional percentage of the amount owed to the Company under the
            settlement of its claim with Jamesway.

            On April  26,  1990,  Ames  Department  Stores,  Inc.,  and  related
            entities ("Ames"),  a significant  licensor of the Company (see Note
            11),  filed for  protection  under  Chapter 11 of the United  States
            Bankruptcy  Code.  Pursuant  to Ames'  Plan of  Reorganization,  the
            Company settled its $13.7 million  pre-petition  claim with Ames and
            in  return,  received  $5.0  million in cash and a  promissory  note
            issued by Ames in the amount of $8.7 million bearing interest at the
            rate of 6.0% per annum and having a final  maturity  on  December 1,
            1997.  During fiscal 1998, the Company  received  payments  totaling
            $2.9 million from Ames  representing the outstanding  balance of the
            Ames  promissory  note and  discharged a mortgage  lien and security
            interest in Ames' real property and buildings located in Rocky Hill,
            Connecticut.

(11)     Principal Licensor
         ------------------

            Sales in  licensed  footwear  departments  operated  under  the Ames
            license  agreement  accounted  for  16.3%,  15.4%  and  10.5% of the
            Company's net sales in the years ended January 30, 1999, January 31,
            1998 and February 1, 1997, respectively. On a pro forma basis, sales
            in Ames and Hills  combined  (see Note 9) accounted for 25.3% of the
            Company's net sales in the year ended January 30, 1999.

<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

(12)     Segment Information
         -------------------
            The  Company is a specialty  retailer  conducting  business  through
            retail stores in two business  segments:  apparel and footwear.  The
            Company's  chief  operating  decision  maker,  the  Chief  Executive
            Officer,  evaluates the performance of the Company's  segments based
            on operating  profit and cash flow.  Operating  profit  includes all
            revenues  and  direct  expenses  attributable  to the  segment,  and
            excludes  certain  expenses  that are managed  outside the  segment,
            primarily general corporate expenses. General corporate expenses are
            comprised primarily of administrative  functions such as management,
            finance,  information systems and human resources.  Corporate assets
            include the Company's headquarters facility, distribution center and
            management  information  systems.  Information  about operations for
            each business segment is summarized as follows:
<TABLE>
            <S>                                          <C>                    <C>                    <C>
                                                                                  Year Ended
                                                         ---------------------------------------------------------------
                                                         January 30, 1999       January 31, 1998       February 1, 1997
                                                         ----------------       ----------------       ----------------
                                                                               ($ in thousands)
            Apparel
                  Net sales                                    $324,336               $309,500                $293,775
                  Operating profit                               26,459                 24,185                  24,123
                  Identifiable assets                           135,781                132,335                 116,859
                  Depreciation and amortization                   7,861                  6,747                   7,501
                  Additions to property, equipment and
                      leasehold improvements                      7,845                  6,660                   6,665
            Footwear
                  Net sales                                    $259,940               $282,651                $603,717
                  Restructuring and other
                    non-recurring charges                             -                      -                (122,309)
                  Litigation settlement charges                       -                 (3,432)                     -
                  Operating profit (loss)                        12,140                 14,367                (144,744)
                  Identifiable assets                           100,071                112,935                 178,126
                  Depreciation and amortization                   4,054                  4,715                  18,094
                  Additions to property, equipment and
                      leasehold improvements                        304                    718                   8,043
            Consolidated
                  Net sales                                    $584,276               $592,151                $897,492
                  Restructuring and other
                    non-recurring charges                             -                      -                (122,309)
                  Litigation settlement charges                       -                 (3,432)                      -
                  Operating profit (loss) before general
                      corporate expense                          38,599                 38,552                (120,621)
                  General corporate expense                     (20,890)               (18,913)                (23,851)
                  Interest expense, net                         (14,532)               (13,388)                (12,802)

            Earnings (loss) before income taxes                $  3,178               $  6,251               $(157,274)

            Identifiable assets                                $235,852               $245,270                $294,985
            Corporate assets                                     88,183                 89,797                  93,556
                                                                 ------                 ------                  ------

                  Total assets                                 $324,035               $335,067                $388,541

            Segment depreciation and amortization              $ 11,915               $ 11,462                $ 25,595
            Corporate depreciation and amortization               3,853                  3,641                   3,835
                                                                  -----                  -----                   -----
            Total depreciation and amortization                $ 15,768               $ 15,103                $ 29,430

            Segment additions to property, equipment
                and leasehold improvements                     $  8,149               $  7,378                $ 14,708
            Corporate additions to property, equipment
                and leasehold improvements                        1,793                  1,432                   1,713
                                                                  -----                  -----                   -----
            Total additions to property, equipment and
                leasehold improvements                         $  9,942               $  8,810                $ 16,421
</TABLE>
<PAGE>
                         J. BAKER, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

(13)     Selected Quarterly Financial Data (Unaudited)
         ---------------------------------------------
<TABLE>
         <S>                                              <C>          <C>         <C>          <C>              <C>
                                                           First        Second       Third        Fourth
                                                           Quarter      Quarter      Quarter      Quarter         Total
                                                           -------      -------      -------      -------         -----
                                                                      (In thousands, except per share data)
         Year ended January 30, 1999
              Net sales                                   $126,637     $146,496    $138,257      $ 172,886        $584,276
              Gross profit                                  58,324       66,798      62,220         72,574         259,916
              Net earnings (loss)                         $    516     $  2,594    $    737      $ (1,814)        $  2,033
                                                          ========     ========    ========      ========         ========
              Earnings (loss) per common share:
                  Basic                                   $   0.04     $   0.19    $   0.05      $ (0.13)         $   0.15
                                                          ========     ========    ========      =======          ========
                  Diluted                                 $   0.04     $   0.18    $   0.05      $ (0.13)         $   0.14
                                                          ========     ========    ========      =======          ========

         Year ended January 31, 1998
              Net sales                                   $137,350     $143,929    $139,148       $171,724        $592,151
              Gross profit                                  61,998       63,790      62,586         75,950         264,324
              Net earnings (loss)                         $    269     $  1,904    $ (1,383)      $  3,023        $  3,813
                                                          ========     ========    ========       ========        ========
              Earnings (loss) per common share:
                  Basic                                   $   0.02     $   0.14     $ (0.10)      $  0.22         $   0.27
                                                          ========     ========     =======       =======         ========
                  Diluted                                 $   0.02     $   0.14     $ (0.10)      $  0.22         $   0.27
                                                          ========     ========     =======       =======         ========
</TABLE>
(14)     Advertising Costs
         -----------------

            Advertising  costs are charged to expense as  incurred.  The Company
            incurred advertising costs of $10.8 million, $11.7 million and $14.8
            million in the years ended  January 30,  1999,  January 31, 1998 and
            February 1, 1997, respectively.

(15)     Supplemental Schedules to Consolidated Statements of Cash Flows
        ---------------------------------------------------------------
<TABLE>
            <S>                                                      <C>                <C>                   <C>
                                                                       1999                1998                   1997
                                                                       ----                ----                   ----

            Cash paid for interest                                   $14,190,926        $13,545,337           $12,670,073
            Cash paid for income taxes                                   438,299            272,104             1,168,901
            Income taxes refunded                                              -                  -            (8,315,483)
                                                                      ==========         ==========            ==========
</TABLE>

<PAGE>

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL DISCLOSURE

   None.

                                    PART III
                                    --------

Item 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The  information  appearing  in  the  Proxy  Statement  under  the  captions
"ELECTION OF DIRECTORS",  "Information About Board of Directors and Committees",
"Report of the  Compensation  Committee  of the Board of  Directors on Executive
Compensation",   "Executive   Compensation"   and   "Employment   and  Severance
Arrangements" is incorporated herein by this reference.

Item 11.  EXECUTIVE COMPENSATION

    The  information   appearing  in  the  Proxy  Statement  under  the  caption
"Executive Compensation", "Employment and Severance Arrangements",  "Information
About  Board of  Directors  and  Committees"  and  "Report  of the  Compensation
Committee of the Board of Directors on Executive  Compensation"  is incorporated
herein by this reference.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information appearing in the Proxy Statement under the caption "SECURITY
OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT"  and  SECTION  16(a)
"BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE"  is  incorporated  herein by this
reference.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information  appearing in the Proxy Statement under the caption "Certain
Relationships  and  Related   Transactions"  is  incorporated   herein  by  this
reference.

                                     PART IV
                                     -------

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      Financial Statements. The following documents are filed as part of this
report:

         1,2. The financial statements, notes thereto, and independent auditors'
              report listed in the Index to  Consolidated  Financial  Statements
              set forth in Item 8.

3.       Exhibits.  The Exhibits listed in the Exhibit Index.  Exhibits 10.16
         through 10.43 constitute all the management contracts and compensation 
         plans and arrangements of the Company required to be filed as exhibits
         to this Annual Report.

    (b)  Reports on Form 8-K.  None.

<PAGE>

                                   SIGNATURES


    Pursuant  to the  requirements  of  Section  13 or 15(d)  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.

                                             J. Baker, Inc.
                                             --------------
                                             (Registrant)



By/s/Sherman N. Baker                        By/s/Alan I. Weinstein
---------------------                        ---------------------- 
     Sherman N. Baker                        Alan I. Weinstein
     Chairman of the Board                   President and
                                             Chief Executive Officer


By/s/Philip G. Rosenberg               
------------------------
     Philip G. Rosenberg
     Executive Vice President
     and Principal Financial Officer



April 26, 1999


    Pursuant to the  requirements  of the Securities  Exchange Act of 1934, this
report has been signed by the following  persons on behalf of the registrant and
in the capacities and on the dates indicated:


/s/Sherman N. Baker                          /s/J. Christopher Clifford
-------------------                          -------------------------- 
Sherman N. Baker, Director                   J. Christopher Clifford, Director



/s/Douglas Kahn                              /s/Harold Leppo
---------------                              ---------------
Douglas Kahn, Director                       Harold Leppo, Director



/s/David Pulver                              /s/Theodore M. Ronick
---------------                              ---------------------
David Pulver, Director                       Director



/s/Melvin M. Rosenblatt                      /s/Nancy Ryan
-----------------------                      -------------
Melvin M. Rosenblatt, Director               Nancy Ryan, Director



/s/Alan I. Weinstein                     
Alan I. Weinstein, Director
---------------------------


All as of April 26, 1999
<PAGE>



                                    EXHIBITS

                                   Filed with

                           Annual Report on Form 10-K

                                       of

                                 J. BAKER, INC.

                               555 Turnpike Street
                                Canton, MA 02021

                       For the Year Ended January 30, 1999






<PAGE>
                                  EXHIBIT INDEX
                                  -------------

<TABLE>
<S>                                                                                                            <C>
Exhibit                                                                                                        Page No.
-------                                                                                                        --------

3.   Articles of Organization and By-Laws
     ------------------------------------

     (.01)  Amended and Restated Articles of Organization of the Company,                                         *
            as filed with the Secretary of the Commonwealth of Massachusetts
            on September 26, 1990 (filed as Exhibit 3.01 to the Company's
            Report on Form 10-K for the year ended February 2, 1991).

     (.02)  By-Laws of the Company, as amended by the Board of Directors                                          *
            on September 11, 1990 (filed as Exhibit 19.01 to the Company's
            Report on Form 10-Q for the quarter ended November 3, 1990).


4.   Instruments Defining the Rights of Security Holders, Including Indentures
     -------------------------------------------------------------------------

     (.01)  Senior Notes and Senior Subordinated Notes with Stock Purchase                                        *
            Warrants dated as of May 1, 1989 (filed as Exhibit 4.01 to the
            Company's Report on Form 10-Q for the quarter ended July 29, 1989).

     (.02)  Amendment dated as of November 13, 1995 to Senior Subordinated                                        *
            Note Agreement dated May 1, 1989 (filed as Exhibit 4.02 to the
            Company's Report on Form 10-Q for the quarter ended October 28, 1995).

     (.03)  Indenture dated as of January 15, 1992 by and between Morse Shoe,                                     *
            Inc. and State Street Bank and Trust Company as Trustee with
            respect to  Convertible  Subordinated  Debentures due 2002 (filed as
            Exhibit 4.12 to the Company's Report on Form 10-K for the year ended
            January 30, 1993).

     (.04)  First Supplemental Indenture dated as of January 30, 1993 to                                          *
            the Indenture dated January 15, 1992 under which Convertible
            Subordinated Debentures Due 2002 were issued by Morse Shoe, Inc.
            (filed as Exhibit 4.01 to the Company's Report on Form 10-Q for the
            quarter ended May 1, 1993).

     (.05)  Indenture dated as of June 12, 1992 by and between J. Baker, Inc.                                     *
            and State Street Bank and Trust Company as Trustee with respect to
            7% Convertible Subordinated Notes due 2002 (filed as Exhibit 4.08 to
            the  Company's  Report on Form 10-Q for the quarter  ended August 1,
            1992).

     (.06)  Shareholder Rights Agreement between J. Baker, Inc. and Fleet                                         *
            National Bank of Massachusetts, dated as of December 15, 1994
            (filed as  Exhibit  4.01 to the  Company's  Report on Form 8-K dated
            December 15, 1994).





*    Incorporated herein by reference
**   Included herein


<PAGE>
Exhibit                                                                                                    Page No.
-------                                                                                                    --------

     (.07)  Waiver Agreement and Amendment to Senior Subordinated Note Agreement                                  *
            between JBI, Inc. and Massachusetts Mutual Life Insurance Company and
            MassMutual Participation Investors ("MassMutual") dated February 24,
            1997 (filed as Exhibit  10.26 to the  Company's  Report on Form 10-K
            for the year ended February 1, 1997).

     (.08)  Guaranty Agreement of certain subsidiaries of the Company in favor of                                 *
            MassMutual dated as of March 13, 1997 (filed as Exhibit 10.27 to the
            Company's Report on Form 10-K for the year ended February 1, 1997).


10.  Material Contracts
     ------------------

     (.01)  Asset Purchase Agreement dated as of March 5, 1997 by and between                                     *
            Shoe Corporation of America and JBI, Inc. (filed as Exhibit 2.1 to
            the Company's Report on Form 8-K dated March 20, 1997).

     (.02)  Asset Purchase Agreement dated as of January 13, 1997 by and between                                  *
            Payless ShoeSource, Inc., JBI, Inc. and J. Baker, Inc. (filed as
            Exhibit 2.2 to the Company's Report on Form 8-K dated March 20, 1997).

     (.03)  License Agreement between Ames Department Stores, Inc., et al and                                     *
            JBI Holding Company, Inc. (filed as Exhibit 10.01 to the Company's
            Report on Form 10-K for the year ended January 30, 1988).

     (.04)  Agreement between JBI Holding Company, Inc. and JBI, Inc. re:                                         *
            Assignment of Ames License Agreement (filed as Exhibit 10.02 to
            the Company's Report on Form 10-K for the year ended January 30,
            1988).

     (.05)  Amendment No. 1 dated April 29, 1989 to Agreement between Ames                                        *
            Department Stores, Inc. and JBI Holding Company, Inc. (filed as
            Exhibit 10.04 to the  Company's  Report on Form 10-Q for the quarter
            ended April 29, 1989).

     (.06)  Amendment No. 2 dated December 18, 1992, to Agreement between                                         *
            Ames Department Stores, Inc. and JBI Holding Company, Inc. (filed
            as Exhibit 10.04 to the  Company's  Report on Form 10-K for the year
            ended January 30, 1993).

     (.07)  Guaranty and Indemnity Agreement dated April 28, 1989 between J.                                      *
            Baker, Inc. and Ames Department Stores, Inc. (filed as Exhibit
            10.05 to the  Company's  Report on Form 10-Q for the  quarter  ended
            April 29, 1989).

     (.08)  Plan of Reorganization of The Casual Male Corporation dated                                           *
            November 1, 1990 as revised November 20, 1990 (filed as Exhibit
            2.01 to the Company's Report on Form 10-Q for the quarter ended
            November 3, 1990).


*    Incorporated herein by reference
**   Included herein
<PAGE>
Exhibit                                                                                                    Page No.
-------                                                                                                    --------

     (.09)  Credit Agreement by and among The Casual Male, Inc., TCM Holding                                     *
            Co., Inc., WGS Corp., TCMB&T, Inc. and J. Baker, Inc., and Fleet
            National Bank and BankBoston, N.A., et al, dated May 30, 1997 (filed
            as  Exhibit  10.01  to the  Company's  Report  on Form  10-Q for the
            quarter ended May 3, 1997).

     (.10)  First Amendment to Credit Agreement by and among The Casual Male,                                     *
            Inc., TCM Holding Co., Inc., WGS Corp., TCMB&T, Inc. and J. Baker,
            Inc.,  and Fleet  National Bank and  BankBoston,  N.A., et al, dated
            February 24, 1998 (filed as Exhibit 10.10 to the Company's Report on
            Form 10-K for the year ended January 31, 1998).

     (.11)  Second Amendment to Credit Agreement by and among The Casual Male,                                    *
            TCM Holding Co., Inc., WGS Corp., TCMB&T, Inc. and J. Baker, Inc.
            and Fleet National Bank and BankBoston, N.A., et al., dated April 2, 1998
            (filed as Exhibit 10.11 to the Company's Report on Form 10-K for the year
            ended January 31, 1998).

     (.12)  Loan and Security Agreement between JBI, Inc., Morse Shoe, Inc.                                      *
            and JBI Holding Company, Inc., and BankBoston Retail Finance Inc.
            (formerly known as GBFC, Inc.) and Fleet National Bank, dated May 30,
            1997 (filed as Exhibit  10.02 to the  Company's  Report on Form 10-Q
            for the quarter ended May 3, 1997).

     (.13)  First Amendment to Loan and Security Agreement between JBI, Inc.,                                     *
            Morse Shoe, Inc. and JBI Holding Company, Inc., and BankBoston
            Retail Finance Inc. (formerly GBFC, Inc.) and Fleet National
            Bank, dated July 15, 1997 (filed as Exhibit 10.13 to the Company's Report
            on Form 10-K for the year ended January 31, 1998).

     (.14)  Second Amendment to Loan and Security Agreement between JBI, Inc., Morse                              *
            Shoe, Inc. and JBI Holding Company, Inc., and BankBoston Retail Finance Inc.
            (formerly  known as GBFC,  Inc.)  and  Fleet  National  Bank,  dated
            February 18, 1998 (filed as Exhibit 10.14 to the Company's Report on
            Form 10-K for the year ended January 31, 1998).

     (.15)  Third Amendment to Loan and Security Agreement between JBI, Inc., Morse                              **
            Shoe, Inc. and JBI Holding Company, Inc., and BankBoston Retail Finance Inc.
            (formerly known as GBFC, Inc.) and Fleet National Bank, dated March 29,
            1999, attached.

     (.16)  Executive Employment Agreement dated March 25, 1993 between Sherman N.                                *
            Baker and J. Baker, Inc. (filed as Exhibit 10.01 to the Company's Report
            on Form 10-Q for the quarter ended July 31, 1993).

     (.17)  Amendment to Executive Employment Agreement between J. Baker, Inc. and                                *
            Sherman N. Baker, dated March 31, 1995 (filed as Exhibit 4.10 to the
            Company's Report on Form 10-K for the year ended January 28, 1995).





*    Incorporated herein by reference
**   Included herein

<PAGE>
Exhibit                                                                                                    Page No.
-------                                                                                                    --------

     (.18)  Amendment to Executive Employment Agreement between J. Baker, Inc. and                                *
            Sherman N. Baker, dated March 31, 1996 (filed as Exhibit 10.09 to the
            Company's Report on Form 10-K for the year ended February 3, 1996).

     (.19)  Third Amendment to Executive Employment Agreement between J. Baker, Inc.                              *
            and Sherman N. Baker dated March 31, 1997 (filed as Exhibit 10.10 to
            the Company's Report on Form 10-K for the year ended February 1, 1997).

     (.20)  Fourth Amendment to Executive Employment Agreement between J. Baker, Inc.                             *
            and Sherman N. Baker dated March 31, 1998 (filed as Exhibit 10.01 to
            the Company's Report on Form 10-Q for the quarter ended October 31, 1998).

     (.21)  Fifth Amendment to Executive Employment Agreement between J. Baker, Inc.                             **
            and Sherman N. Baker dated April 10, 1999, attached.

     (.22)  Executive Employment Agreement between J. Baker, Inc. and Alan I.                                     *
            Weinstein dated April 1, 1997 (filed as Exhibit 10.17 to the Company's
            Report on Form 10-K for the year ended February 1, 1997).

     (.23)  Amendment to Executive Employment Agreement between J. Baker, Inc.                                    *
            and Alan I. Weinstein, dated September 1,1997 (filed as Exhibit 10.06 to
            the Company's Report on Form 10-Q for the quarter ended November 1, 1997).

     (.24)  Second Amendment to Executive Employment Agreement between J. Baker,                                  *
            Inc. and Alan I. Weinstein, dated March 31, 1998 (filed as Exhibit 10.02 to
            the Company's Report on Form 10-Q for the quarter ended May 2, 1998).

     (.25)  Restricted Stock Award Agreement between Alan I. Weinstein and J. Baker,                              *
            Inc., dated July 8, 1998 (filed as Exhibit 10.01 to the Company's Report
            on Form 10-Q for the quarter ended August 1, 1998).

     (.26)  Forgivable Promissory Note made by Alan I. Weinstein in favor of J. Baker                             *
            Inc., dated July 8, 1998, issued in connection with Restricted Stock
            Award (filed as Exhibit 10.02 to the Company's Report on Form 10-Q
            for the quarter ended August 1, 1998).

     (.27)  Third Amendment to Executive Employment Agreement between J. Baker,                                  **
            Inc. and Alan I. Weinstein, dated April 10, 1999, attached.

     (.28)  Executive Employment Agreement dated April 1, 1997 between James D.                                  *
            Lee and J. Baker, Inc. (filed as Exhibit 10.10 to the Company's Report
            on Form 10-K for the quarter ended August 2, 1997).

     (.29)  First Amendment to Executive Employment Agreement between                                             *
            J. Baker, Inc. and James D. Lee, dated April 10, 1998 (filed as Exhibit
            10.26 to the Company's Report on Form 10-K for the year ended January 31,
            1998).

     (.30)  Termination Agreement between J. Baker, Inc. and James D. Lee, dated                                  *
            September, 8, 1998 (filed as Exhibit 10.02 to the Company's Report on
            Form 10-Q for the quarter ended October 31, 1998).


*    Incorporated herein by reference
**   Included herein

<PAGE>
Exhibit                                                                                                    Page No.
-------                                                                                                    --------

     (.31)  Executive Employment Agreement between J. Baker, Inc. and Philip G.                                   *
            Rosenberg, dated April 1, 1997 (filed as Exhibit 10.55 to the Company's
            Report on Form 10-K for the year ended February 1, 1997).

     (.32)  First Amendment to Executive Employment Agreement between J. Baker,                                   *
            Inc. and Philip G. Rosenberg, dated April 10, 1998 (filed as Exhibit 10.29
            to the Company's Report on Form 10-K for the year ended January 31, 1998).

     (.33)  Second Amendment to Executive Employment Agreement between J. Baker,                                 **
            Inc. and Philip G. Rosenberg, dated April 16, 1999, attached.

     (.34)  Executive Employment Agreement between J. Baker, Inc. and Stuart M.                                   *
            Glasser, dated September 15, 1997 (filed as Exhibit 10.04 to the Company's
             Report on Form 10-Q for the quarter ended November 1, 1997).

     (.35)  Restricted Stock Award Agreement between Stuart M. Glasser and J. Baker,                              *
            Inc., dated July 8, 1998 (filed as Exhibit 10.03 to the Company's Report on
            Form 10-Q for the quarter ended August 1, 1998).

     (.36)  Forgivable Promissory Note made by Stuart M. Glasser in favor of J. Baker                             *
            Inc., dated July 8, 1998, issued in connection with Restricted Stock
            Award (filed as Exhibit 10.04 to the Company's Report on Form 10-Q
            for the quarter ended August 1, 1998).

     (.37)  Executive Employment Agreement between J. Baker, Inc. and Michael J.                                  *
            Fine, dated September 9, 1998 (filed as Exhibit 10.01 to the Company's
            Report on Form 10-Q for the quarter ended October 31, 1998).

     (.38)  First Amendment to Executive Employment Agreement between J. Baker,                                  **
            Inc. and Michael J. Fine, dated April 12, 1999, attached.

     (.39)  Executive Employment Agreement dated June 5, 1997 between Roger                                      *
            Osborne and J. Baker, Inc. (filed as Exhibit 10.02 to the Company's Report
            on Form 10-Q for the quarter ended August 2, 1997).

     (.40)  First Amendment to Executive Employment Agreement between J. Baker,                                   *
            Inc. and Roger J. Osborne dated April 10, 1998 (filed as Exhibit 10.33 to
            the Company's Report on Form 10-K for the year ended January 31, 1998).

     (.41)  J. Baker, Inc. Amended and Restated 1985 Stock Option Plan (filed                                     *
            as Exhibit 19.02 to the Company's Report on Form 10-Q for the quarter
            ended August 1, 1992).

     (.42)  J. Baker, Inc. 1994 Equity Incentive Plan dated March 29, 1994                                        *
            (filed as Exhibit 10.23 to the Company's Report on Form 10-K
            for the year ended January 29, 1994).

     (.43)  J. Baker, Inc. 1992 Directors Stock Option Plan dated April 13, 1992                                  *
             (filed as Exhibit 19.03 to the Company's Report on Form 10-Q
            for the quarter ended August 1, 1992).



*    Incorporated herein by reference
**   Included herein

<PAGE>
Exhibit                                                                                                    Page No.
-------                                                                                                    --------

     (.44)  Stock Purchase Agreement by and among J. Baker, Inc. and Tishkoff                                     *
            Enterprises, Inc. and certain stockholders of Tishkoff Enterprises, Inc.
            dated  November  19,  1993 (filed as Exhibit  2.01 to the  Company's
            Report on Form 10-Q for the quarter ended October 30, 1993).

     (.45)  Mortgage and Security Agreement dated December 30, 1992 by and                                        *
            between JBI Holding Company, Inc. and Ames Department Stores,
            Inc. (filed as Exhibit 10.22 to the Company's Report on Form 10-K
            for the year ended January 30, 1993).

     (.46)  Promissory Note dated December 30, 1992 made by Ames Department                                       *
            Stores, Inc. in favor of JBI Holding Company, Inc. (filed as Exhibit
            4.14 to the Company's Report on Form 10-K for the year ended January 30,
            1993).

     (.47)  Agreement and Plan of Reorganization by and among J. Baker, Inc.,                                     *
            Morse Acquisition, Inc. and Morse Shoe, Inc. dated October 22,
            1992,  as amended by Letter  Amendments  dated  December 7, 1992 and
            December  10,  1992 (filed as Exhibits  2.01-2.03  to the  Company's
            Report on Form 10-Q for the quarter ended October 31, 1992).

     (.48)  Agreement of Merger among J. Baker, Inc., JBAK Acquisition Corp.                                      *
            and Tishkoff Enterprises, Inc. dated December 3, 1993 (filed as
            Exhibit 10.30 to the Company's Report on Form 10-K for the year ended
            January 29, 1994).

     (.49)  Agency Agreement by and between Gordon Brothers Partners, Inc.                                        *
            and Morse Shoe, Inc., dated September 22, 1995 (filed as Exhibit
            10.01 to the  Company's  Report on Form 10-Q for the  quarter  ended
            October 28, 1995).

     (.50)  Mortgage, Assignment of Leases and Rents and Security Agreement from                                  *
            Morse Shoe, Inc. to Fleet National Bank dated June 21, 1996
            (filed as Exhibit 10.06 to the Company's Report on Form 10-Q for the
            quarter ended August 3, 1996).

     (.51)  Mortgage, Assignment of Leases and Rents and Security Agreement from                                  *
            JBI, Inc. to Fleet National Bank dated as of June 21, 1996 (filed as
            Exhibit 10.07 to the Company's Report on Form 10-Q for the quarter ended
            August 3, 1996).

     (.52)  Release and Discharge of Mortgage from Fleet National Bank as Agent                                   *
            with respect to the Canton, Massachusetts property dated December 27,
            1996 (filed as Exhibit 10.67 to the Company's Report on Form 10-K for
            the year ended February 1, 1997).

     (.53)  Release of Mortgage from Fleet National Bank as Agent with                                            *
            respect to the Columbus, Ohio property dated February 27, 1997,
            (filed as Exhibit 10.68 to the Company's Report on Form 10-K for
            the year ended February 1, 1997).



*    Incorporated herein by reference
**   Included herein

<PAGE>
Exhibit                                                                                                    Page No.
-------                                                                                                    --------

     (.54)  Mortgage and Security Agreement by JBAK Canton Realty, Inc. to                                        *
            The Chase Manhattan Bank dated as of December 30, 1996 (filed as
            Exhibit  10.69 to the  Company's  Report  on Form  10-K for the year
            ended February 1, 1997).

11.         Statement re:  Computation of Net Earnings (Loss) Per Common                                         **
            ------------------------------------------------------------
            Share, attached.
            -----

12.         Statement re:  Computation of Ratio of Earnings to Fixed Charges,                                    **
            -----------------------------------------------------------------
            attached.

21.         Subsidiaries of the Registrant, attached.                                                            **
            ------------------------------

23.         Consent of KPMG Peat Marwick LLP, attached.                                                          **
            --------------------------------

27.         Financial Data Schedule, attached.                                                                   **
            -----------------------

</TABLE>

*     Incorporated herein by reference
**    Included herein