UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended January 29, 2000

                                 Commission File
                                 Number 0-28410

                                LOEHMANN'S, INC.
                                ----------------
            (Exact name of registration as specified in its charter)

           Delaware                                              22-2341356
-------------------------------                               ----------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

2500 Halsey Street, Bronx, New York                                 10461
-----------------------------------                                 -----
  (Address of principal offices)                                  (Zip Code)

       Registrant's telephone number, including Area Code: (718) 409-2000
        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                   Rights to Purchase Series B Preferred Stock

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, 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]

         The aggregate market value of voting stock held by nonaffiliates of
registrant as of April 20, 2000 was $932,449.

         The Company had 9,053,967 shares of Common Stock and 26,087 shares of
Class B Common Stock outstanding as of April 20, 2000.
<PAGE>

PART I.

ITEM 1.  BUSINESS

The Company

         Loehmann's, Inc. ("Loehmann's" or the "Company"), founded in 1921 as
the "Original Designer Outlet," is a leading national specialty retailer of well
known designer and brand name women's fashion apparel, men's furnishings,
accessories, and shoes offered at prices that are typically 30% to 65% below
department store prices. The Company believes it is one of the largest national
upscale off-price specialty retailers in the industry. The Company has a strong
brand name, loyal customer base and long-standing relationships with leading
designers and vendors of quality merchandise. The Company's target customers are
relatively affluent women between the ages of 30 and 55 who are attracted to
designer and other name brand merchandise offered at exceptional values. As of
April 20, 2000, the Company operated 44 stores in major metropolitan markets
located in 17 states.

Chapter 11 Filing

         On May 18, 1999 (the "Petition Date"), Loehmann's filed a petition for
relief under chapter 11 of the United States Code (the "Bankruptcy Code") with
the United States Bankruptcy Court for the District of Delaware. Since the
Petition Date, the Company has continued to operate its business and manage its
properties as a debtor-in-possession.

         On March 24, 2000, the Company filed a Disclosure Statement (the
"Disclosure Statement) and a Plan of Reorganization (the "Plan Of
Reorganization") with the Bankruptcy Court. The Disclosure Statement sets forth
certain information regarding, among other things, significant events that have
occurred during the Company's chapter 11 case and the anticipated organization,
operation and financing of reorganized Loehmann's ("Reorganized Loehmann's").
The Disclosure Statement also describes the Plan of Reorganization, certain
effects of Plan confirmation, certain risk factors associated with securities to
be issued under the Plan, and the manner in which distributions will be made to
the Company's creditors under the Plan of Reorganization for all amounts that
were owed to such parties on the Petition Date. In addition, the Disclosure
Statement discusses the confirmation process and the voting procedures that
holders of claims in impaired classes must follow for their votes to be counted.

         The Plan of Reorganization divides the Company's creditors into six
classes: Other Priority Claims (Class 1); Other Secured Claims (Class 2); DIP
Financing Claims (Class 3); Convenience Claims (Class 4); General Unsecured
Claims (Class 5) and Equity Interest (Class 6). Administrative Claims and
Priority Tax Claims against the Company have not been classified as provided in
the Bankruptcy Code. The definitions for each class of claims is set forth in
the Plan of Reorganization and creditors are urged to consult the Plan of
Reorganization.

         In general, the Plan of Reorganization provides that holders of
Administrative Claims, Priority Tax Claims, Other Priority Claims, and DIP
Financing Claims will either receive payment in full in cash on account of their
claims or such other treatment as set forth in the Plan of Reorganization.
Holders of General Unsecured Claims against the Company will receive their pro
rata share of 5,000,000 shares of new common stock of Reorganized Loehmann's.
Unsecured creditors holding claims of $2,000 or less will receive cash equal to
50% of the allowed amount of such claim. Holders of claims in excess of $2,000
will be permitted to reduce their claims to $2,000 to receive such treatment.

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         Finally, holders of Loehmann's Common Stock (and other instruments
evidencing ownership in Loehmann's) will receive no distributions under the Plan
of Reorganization and such instruments will be canceled.

         The Plan of Reorganization also sets forth certain information, means
for implementation of the Plan of Reorganization, the effect of rejection of the
Plan of Reorganization by one or more classes of claims or interests, provisions
for how distributions will be made to the Company's creditors, the treatment of
executory contracts and leases and conditions precedent to confirmation of the
Plan and the occurrence of the effective date of the Plan.

         On April 24, 2000, an order was approved by the Bankruptcy Court (i)
approving the disclosure statement, (ii) establishing solicitation, voting, and
tabulation procedures and deadlines, and (iii) scheduling a hearing to consider
confirmation of the Plan of Reorganization, (iv) establishing deadlines and
procedures for filing objections to confirmation of the Plan of Reorganization
and (v) approving form and manner of notice of confirmation hearing.

         Although the Plan of Reorganization provides for the Company's
emergence from bankruptcy, there can be no assurances given that the Plan will
be confirmed by the Bankruptcy Court, or that such Plan will be consummated. At
this time, it is not possible to predict the outcome of the Company's chapter 11
case or its effect on the Company's business.

Corporate Structure

         Loehmann's is a Delaware corporation with no subsidiaries. As of
January 29, 2000, the Company had authorized 25,000,000 shares of common stock,
par value $0.01 per share (the "Common Stock") and 469,237 shares of Class B
common stock, par value $0.01 per share (the "Class B Common Stock"), of which
9,053,967 shares of Common Stock and 26,087 shares of Class B Common Stock were
issued and outstanding.

         In anticipation of the Company's initial public offering on May 7,
1996, in order to effect a reincorporation from Maryland to Delaware, Loehmann's
Holdings, Inc. ("Holdings"), the Company's predecessor, was merged into the
Company (the "Merger"). As a result of the Merger, each share of Holdings common
stock and Class B common stock was converted into approximately 0.22 shares of
the Company's Common Stock and Class B Common Stock, respectively, and the
authorized number of shares of Common Stock was increased to 25,000,000.

         On May 10, 1996, the Company issued and sold 3,572,000 shares of Common
Stock in its initial public offering and issued and sold $100 million principal
amount of the Notes in a concurrent debt offering, resulting in net proceeds of
approximately $155 million to the Company. The proceeds received from these
offerings were used to redeem indebtedness and all the issued and outstanding
shares of the Company's Series A Preferred Stock.

         The Plan of Reorganization as filed with the Bankruptcy Court on March
24, 2000 provides that all stockholders and option holders of the Company shall
not be entitled to, and shall not, receive any property or interest in property
on account of their shares of Common Stock and options to purchase Common Stock.
If the Plan of Reorganization is approved, the Company's unsecured creditors
will receive all of the Company's Common Stock. As discussed above, the Plan of
Reorganization has not yet been approved by the Company's creditors or confirmed
by the Bankruptcy Court. No assurance can be given that such approvals will be
obtained.

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<PAGE>

        In September 1998, the Company adopted a stockholder rights plan (the
"Plan") designed to protect the long-term value of the Company for its
stockholders during any future unsolicited acquisition attempt. In connection
with the Plan, the Board of Directors declared a dividend of one preferred share
purchase right (a "Right") for each share of the Company's Common Stock
outstanding on October 5, 1998 (the "Record Date"). The Rights will expire on
October 5, 2008.

         The Rights will be exercisable only if a person or group acquires 15%
or more of the Company's Common Stock or announces a tender offer upon the
consummation of which would result in ownership by a person or group of 15% or
more of the Company's Common Stock. Each Right will entitle stockholders to buy
one one-hundredth of a share of a new series of preferred stock at an exercise
price of $15.00.

         If Loehmann's is acquired in a merger or other business combination
transaction after a person has acquired 15% or more of the Company's outstanding
Common Stock, each Right will entitle its holder to purchase, at the Right's
then-current exercise price, a number of the acquiring company's common shares
having a market value of twice such price. In addition, if a person or group
acquires 15% or more of the Company's outstanding Common Stock, each Right will
entitle its holder (other than such person or members of such group) to
purchase, at the Right's then-current exercise price, a number of the shares of
Common Stock having market value of twice such price.

         Under certain circumstances, the Board of Directors may exchange the
Rights, in whole or in part, at an exchange ratio of one share of Common Stock
(or one-hundredth of a share of the new series of preferred stock) per Right.

         Prior to the acquisition by a person or group of beneficial ownership
of 15% or more of the Company's Common Stock, the Rights are redeemable for one
cent per Right at the option of the Board of Directors. Prior to such time, the
terms of the Rights may be amended by the Board of Directors.

Industry Overview

         Women's Apparel

         According to published reports, total retail sales of women's apparel
and accessories in the United States were in excess of $96.0 billion in 1999.
The womenswear industry is served by a variety of distribution channels
including department stores, specialty stores and off-price retailers.

         The women's apparel industry is categorized into five product
classifications: designer, bridge, better, moderate and budget. Designer
merchandise is the most expensive product classification and is characterized by
high fashion styling. Designer brands include Donna Karan, Calvin Klein, Ralph
Lauren and Anne Klein. Bridge products are typically brand name merchandise
which may carry designer labels but are less expensive than the designer
classification and allow customers to purchase designer-like merchandise at
below designer prices. Bridge brands include DKNY, Anne Klein II, CK/Calvin
Klein, Emanuel and Tahari. Apparel in the better classification carries brand
name labels but is less expensive than bridge apparel. Better brands include
BCBG, Jones New York, Kasper, Polo and Harve Benard. Merchandise in the moderate
classification is also generally brand name but is a less expensive product
category. Moderate brands include Leslie Fay. Budget merchandise is the least
expensive product classification.

         Designer and bridge merchandise is generally sold in finer department
stores such as Bloomingdale's, Lord & Taylor, Nordstrom and Saks Fifth Avenue.
Because manufacturers of designer

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<PAGE>

and bridge merchandise are very concerned about maintaining the upscale image of
their trademarks, they are typically selective about which retailers carry their
products.

         Other Products

         The men's apparel industry includes tailored apparel (suits,
formalwear, slacks, sportcoats and outer wear), sportswear (casual pants,
sportshirts, sweaters and jackets) and furnishings (dress shirts, ties, belts,
suspenders, underwear, socks, scarves and gloves). Loehmann's offers primarily
men's furnishings to its customers.

         The men's furnishings industry is served by a variety of distribution
channels including department stores, specialty menswear stores, off-price
retailers and catalog retailers. The Company offers primarily designer and name
brand men's furnishings, which are generally sold in finer department stores and
specialty stores such as Bloomingdale's, Lord & Taylor, Nordstrom, Saks Fifth
Avenue and Brooks Brothers.

Business Strategy

         The Company's strategy is to deliver value to its customers by offering
at substantial discounts a wide selection of high quality in-season merchandise.
The Company believes that it differentiates itself from finer department stores
by offering similar merchandise at significantly lower prices and from other
off-price apparel retailers by offering a broader range of designer, bridge and
better merchandise. The principal elements of the Company's business strategy
are as follows:

         Emphasis on In-Season High Quality Merchandise

         The Company offers a wide selection of in-season, high-quality, name
brand merchandise. The Company, like finer department stores, is known for
carrying name brand merchandise, including Donna Karan, Calvin Klein, Ralph
Lauren, Tahari, Dana Buchman, and Emanuel.

         Value Pricing

         The Company provides its customers with exceptional value by offering
its merchandise at prices that are typically 30% to 65% below prices charged by
department stores for the same items and that are comparable to prices charged
by other off-price retailers.

         Capitalize on Long-Standing Vendor Relationships

         Loehmann's believes that it is a popular choice for well known
designers who believe that their prestige will be preserved by having their
merchandise offered by Loehmann's because of its high quality image and affluent
customer base. Loehmann's long-standing vendor relationships and its ability to
sell large quantities of goods have provided the Company with ready access to a
wide selection of merchandise.

         Broader Merchandise Categories

         The Company has broadened its appeal over the past several years by
expanding its merchandise mix to include men's, gifts, shoes, young
contemporary, fragrances and a broader range of accessories and intimate
apparel. These items, which typically generate higher gross margins than the
Company's traditional apparel categories, accounted for approximately 33% of the
Company's net sales in fiscal 1999, an increase from 21% in fiscal 1995.

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<PAGE>

         No-Frills Store Format

         In order to provide its customers with exceptional value while
maximizing profitability and cash flow, the Company is focused on maintaining an
efficient, low-cost operating structure. Key elements of this focus include the
Company's no-frills, self-service store format. All stores are low maintenance,
simple, and functional facilities designed to maximize selling space and contain
overhead costs.

         Flexible Purchasing Strategy

         The Company relies on a flexible purchasing strategy under which it
enters any given month with a substantial portion of its purchasing requirements
unfulfilled. This strategy enables the Company to react to sales trends, fashion
trends and changing customer preferences while enhancing the Company's ability
to negotiate with its vendors and take advantage of market inefficiencies and
opportunities as they may arise.

Merchandising

         Selection

         The Company offers a wide selection of women's sportswear, dresses,
suits, outerwear, coats, accessories, intimate apparel and shoes, as well as a
selection of gifts and men's furnishings. The Company does not offer budget
merchandise in its stores. Most of the Company's merchandise is in-season and
is, therefore, generally available at Loehmann's during the same selling season
as it is available in department stores. The Company offers name-brand
merchandise from designers such as Anne Klein, Calvin Klein, Donna Karan and
Ralph Lauren.

         The following table shows the percentages of the Company's net sales
attributable to its various product categories for fiscal 1995 through fiscal
1999:

<TABLE>
<CAPTION>
                                     1995        1996       1997        1998        1999
                                     ----        ----       ----        ----        ----
<S>                                  <C>        <C>         <C>         <C>         <C>
Sportswear .......................   47.6%      48.1%       47.8%       47.0%       45.8%
Dresses and suits ................   26.0       24.6        22.9        17.3        16.6
Coats and outerwear ..............    5.1        5.0         4.7         4.4         4.2
Accessories/intimate apparel .....   14.5       14.6        13.6        13.0        12.6
Shoes ............................    5.5        5.8         6.5         6.1         5.9
Men's ............................      -          -         2.5         7.6        10.1
Gifts.............................      -         .3          .6         1.7         2.3
Other ............................    1.3        1.6         1.4         2.9         2.5

Total ............................  100.0%     100.0%      100.0%      100.0%      100.0%
</TABLE>

         All Loehmann's stores carry items from each of its merchandise
categories. However, the allocation of merchandise among the stores varies based
upon factors relating to the demographics and geographic location of each store
as well as the size of the store and its ability to display adequately the
merchandise.

         Pricing

         The Company seeks to provide its customers with exceptional value by
offering its merchandise at prices that are typically 30% to 65% below prices
charged by department stores for the same items and

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<PAGE>

that are comparable to or lower than prices charged by other off-price
retailers. The Company's central buying staff adheres to a disciplined approach
of acquiring merchandise that enables the Company to consistently offer its
merchandise at favorable prices. Each item of merchandise offered by the Company
carries a price tag displaying the Company's price as well as the typical
department store's initial price for the same item.

         The Company has historically used a cyclical permanent markdown policy
to reduce prices automatically as goods age. Over the past several years, this
policy was modified in response to a more promotional competitive environment.
As department stores increased their promotional pricing, Loehmann's included
promotional coupons in its customer mailings. These coupons generally allow
customers to receive a discount on any merchandise in the store. The popularity
of these coupons had resulted in an increase in point-of-sale markdowns, which
the Company had partially offset by decreasing permanent markdowns. The Company
has returned to a cyclical permanent markdown policy.

Vendor Relationships and Purchasing

         Many of the Company's most active suppliers have been selling
merchandise to the Company for at least 10 years. Because of these long-standing
vendor relationships and its ability to sell large quantities of goods, the
Company has ready access to a wide selection of merchandise.

         The Company does not engage in significant forward purchasing and a
large portion of its purchasing requirements in any given month intentionally
remains unfulfilled at the beginning of the month. This strategy enables the
Company to react to fashion trends and changing customer preferences while
enhancing the Company's ability to negotiate with its vendors and take advantage
of market inefficiencies and opportunities as they may arise. Although the
Company has always been able to fulfill its inventory needs, its opportunistic
purchasing strategy does not always permit Loehmann's to purchase specific types
of goods. For example, certain types of popular merchandise may be unavailable
in certain sizes or colors depending on market conditions.

         The Company purchases a majority of its inventory during the
manufacturer's selling season, enabling the Company to offer merchandise during
the same selling season as it is available in department stores. The Company
also purchases a portion of its inventory at the end of the season, when the
Company is prepared to purchase a manufacturer's remaining items at an even
steeper discount. Vendors who sell to the Company do not need to build into
their price structure any anticipation of returns, markdown allowances or
advertising allowances, all of which are typical in the department store
industry.

         The Company purchases its inventory from over 400 suppliers, which in
many cases include separate divisions of a single manufacturer or designer.
These suppliers include a substantial majority of the designer and name brand
apparel manufacturers in the United States. Some purchases are also made in the
European market, primarily Italy. The Company does not have any long-term supply
contracts with its suppliers.

         The Company maintains its own central buying staff, comprised of 16
experienced off-price buyers, many of who also have extensive experience with
traditional department stores. Historically, the Company has had very low
turnover within its buying group, enabling Loehmann's to capitalize on an
experienced, respected group of buyers capable of enhancing the Company's
already strong vendor relationships.

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<PAGE>

Store Layout

         The Company's store format and merchandise presentation are designed to
project the image of deep discount and exceptional value, as well as to
emphasize the Company's niche as the off-price equivalent of an upscale
specialty store. The Company's stores are divided into two shopping areas: a
large, open selling area with wall-to-wall merchandise and a smaller, separate,
and more intimate area called The Back Room. All stores are low maintenance,
simple and functional facilities designed to maximize selling space and contain
overhead costs. Store layouts are flexible in that product groupings can be
easily moved or expanded. All stores have two or more communal fitting rooms.
However, in response to customer preferences, private fitting rooms have been
added in most stores. Because Loehmann's is committed to maintaining virtually
all of its in-store inventory on the selling floor, its stores do not require
significant space devoted to inventory storage.

         Loehmann's presents moderate and better sportswear, dresses and suits,
as well as all outerwear, men's, accessories, intimate apparel and shoes on the
main selling floor. Designer, bridge and import merchandise, including evening
dresses and suits, are displayed in The Back Room. The Back Room provides a key
point of differentiation to the consumer, as it projects the image of designer
goods sold in a no-frills environment and, therefore, at exceptional values.
Although Loehmann's estimates that The Back Room generally accounts for only
approximately 10% to 15% of a typical store's selling space, The Back Room has
historically generated approximately 27% of the company's apparel revenues.

Distribution

         The Company operates two distribution facilities: a 126,000 square foot
centralized distribution center located at the Company's Bronx's headquarters
and a 272,000 square foot facility in Rutherford, New Jersey. The Company began
leasing the Rutherford facility in May 1999. That facility replaces a 150,000
square foot warehouse facility in Secaucus, New Jersey and a 32,000 square foot
satellite facility the Company formerly maintained in the Bronx.

          As merchandise arrives at the distribution center, it is priced,
ticketed, assigned to individual stores by the Company's merchandising systems,
packaged for delivery and transported to the stores.

Marketing and Advertising

         Over the years, Loehmann's has principally relied on word-of-mouth
advertising. In the last three fiscal years, Loehmann's has significantly
increased its advertising expenditures, predominantly for direct mail and, to a
lesser extent, for newspaper advertising.

         A significant portion of Loehmann's advertising efforts involve direct
mail announcements to members of The Insider Club, a free membership program.
Members receive notification of special events throughout the year and a 15%
discount on their birthdays. The list of members now includes approximately one
million active customers (those who have shopped at Loehmann's within the past
12 months). Loehmann's has developed a database of customer information from
Insider Club members. This database allows Loehmann's to track purchase activity
of current customers. These customers accounted for approximately 75% of total
company sales in fiscal 1999.

Store Operations

         The Company's stores are organized into several geographic districts,
each with a regional manager. Regional managers monitor the financial
performance of the stores in their respective geographic

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districts and frequently visit stores to ensure adherence to the Company's
merchandising, operations and personnel standards. The typical staff for a
Loehmann's store consists of a store manager, a number of associate and
department managers, sales specialists and additional full and part-time hourly
associates depending upon the store's needs.

         Senior management meets with the regional managers on a periodic basis
to maintain a clear line of communication. In addition, mystery shoppers shop
the stores to help ensure that sales associates are friendly, helpful and
maintain all of the company's merchandising, customer service and loss
prevention standards. New store management personnel currently complete a
training program at a designated training store before assuming management
responsibility. Sales specialists receive product and customer service training
at the store level.

Management Information Systems

         Each Loehmann's store is linked to the Company's headquarters through a
point-of-sale system that interfaces with an IBM RS6000 computer equipped with
integrated merchandising, distribution and accounting software packages. The
Company's point-of-sale computer system has features that include merchandise
scanning, the capture of customer sales information and on-line credit card
approval. These features improve transaction accuracy, speed and checkout time
as well as increase overall store efficiency.

         The Company's management information and control systems enable the
Company's corporate headquarters to promptly identify sales trends, identify
merchandise to be marked down and monitor merchandise mix and inventory levels
at individual stores.

         The Company has outside service contracts to maintain its computer
software programs and all modifications and conversions in respect with Year
2000 issues were completed on a timely basis. The total dollar amount that the
Company spent to address the year 2000 issue did not have a material financial
impact.

Employees

         As of April 20, 2000, the Company had 2,185 employees, of whom 1,629
were store sales and clerical employees, 158 performed store managerial
functions, and 398 were corporate and warehouse personnel. Except for managerial
employees, professional support staff and the Company's buyers, all employees
are paid on an hourly basis. None of the Company's employees are represented by
a labor union. The Company believes that its employee relations are good.

Trademark and Service Mark

         Loehmann's name is registered as a trademark and a service mark with
the United States Patent and Trademark Office. Loehmann's believes its trademark
and service mark have received broad recognition and their continued existence
is important to the Company's business.

Competition

         The off-price fashion apparel business is highly competitive. The
Company competes primarily with finer department stores by offering a wide
selection of comparable quality merchandise at significantly lower prices. Many
department stores have increased their promotional efforts, although such
promotions are typically focused on moderate merchandise. Should finer
department stores continue to price more

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<PAGE>

aggressively, the Company's margins may be adversely affected. Most of the
department stores and some of the off-price and discount retailers with which
the Company competes have access to substantially greater financial and
marketing resources than those available to the Company.

         The Company also faces competition from factory outlet malls and a
variety of off-price and discount retailers, some of which are relatively new
companies, but many of which are established retail chains or divisions thereof.
Such competitors include Marshall's, Saks Off 5th, Syms, Burlington Coat Factory
and T.J. Maxx.

Restructuring Activities

         Since the Petition Date, management of the Company and its advisors in
the bankruptcy proceedings have conducted an extensive analysis of business
operations with the objective of making the changes necessary to improve
operating performance. The Company has devised a comprehensive strategy to
define, manage and operate the business going forward including the following:

         The Back Room

         The Back Room is a separate area of each Loehmann's store that is
smaller and more intimate than the large, open selling area. The Back Room
offers a large assortment of bridge and designer apparel and provides a key
point of differentiation for the Company in the women's apparel market. The
Company has expanded the Back Room inventory to re-establish its unique niche
and use this more exclusive, high-end merchandise to attract customers and
increase sales.

         Consistent Value

         The Company derives its competitive advantage from its ability to
consistently offer merchandise at prices 30% to 65% below department stores
prices. In order to promote its positioning as offering the best everyday low
prices, the Company has modified its promotional strategies. The Company
believes that it can offer a more consistent and distinguishable value
proposition if merchandise is priced using permanent markdowns as opposed to
promotional events and point-of-sale markdowns. By taking timely permanent
markdowns, the Company will also be able to better control inventory and gross
margins.

         Cost Reductions

         The Company has restructured its corporate management and as a result
has reduced corporate expenses by approximately $4.0 million on a annual basis.
These reductions were made in July 1999 and in January 2000. In addition, as a
result of the chapter 11 filing the Company has the opportunity to renegotiate
leases with landlords to achieve rent reductions. The Company expects these
negotiations will be concluded shortly.

Risk Factors

         An investment in the Company is subject to certain risks. These risks
are associated with the Company's chapter 11 case, its history of losses, the
ongoing competitive pressures in the apparel industry, changes in the level of
consumer spending or preferences in apparel, potential disruptions in the
relationships established with certain vendors and the Company's reliance on key
personnel. Future economic and industry trends that could potentially impact
revenue and profitability are difficult to predict. See "Special Note Regarding
Forward-looking Statements."

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<PAGE>

         History of Losses

         The Company has incurred net losses in each fiscal year since fiscal
1995. There can be no assurance that such losses will not continue in the
future. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

         Competition

         All aspects of the women's apparel industry, including the off-price
retail segment, are highly competitive. The Company competes primarily with
department stores, other off-price retailers, specialty stores, discount stores
and mass merchandisers, many of which have substantially greater financial and
marketing resources than the Company. Finer department stores, which constitute
the Company's principal competitors, offer a broader selection of merchandise
and higher quality service. In addition, many department stores have become more
promotional and have reduced their price points, and certain finer department
stores and certain of the Company's vendors have opened outlet stores which
offer off-price merchandise in competition with the Company. Accordingly, the
Company may face periods of intense competition in the future which could have
an adverse effect on its financial results. See "Competition."

         Adequate Sources of Merchandise Supply

         The Company's business is dependent to a significant degree upon its
ability to purchase quality merchandise at substantially below normal wholesale
prices. The Company does not have any long-term supply contracts with its
suppliers. The loss of certain key vendors or the failure to establish and
maintain relationships with popular vendors could have a material adverse effect
on the Company's business. The Company believes it currently has adequate
sources of quality merchandise; however, there can be no assurance that the
Company will be able to acquire sufficient quantities and an appropriate mix of
such merchandise at acceptable prices.

         The Company is also dependent upon financing from its trade creditors.
If any such financing were to become unavailable for any reason, there could be
a material adverse effect on the Company.

         Merchandise Trends

         The Company's success depends in part on its ability to anticipate and
respond to changing merchandise trends and consumer preferences in a timely
manner. Accordingly, any failure by the Company to anticipate, identify and
respond to changing fashion trends could adversely affect consumer acceptance of
the merchandise in the Company's stores, which in turn could adversely affect
the Company's business and its image with its customers. If the Company
miscalculates either the market for its merchandise or its customers' purchasing
habits, it may be required to sell a significant amount of unsold inventory at
below average markups over the Company's cost, or below cost, which would have
an adverse effect on the Company's financial condition and results of
operations.

         Impact of Economic Conditions on Industry Results

         The Company's business is sensitive to customers' spending patterns,
which in turn are subject to prevailing economic conditions. There can be no
assurance that consumer spending will not be affected by economic conditions,
thereby impacting the Company's growth, net sales and profitability. A decline
in economic conditions in one or more of the markets in which the Company's
stores are concentrated, mainly California and the Northeast, could have an
adverse effect on the Company's financial condition and results of operations.

                                       11
<PAGE>

         Dependence on Key Personnel

         The Company's success depends to a significant extent upon the
performance of its senior management team, particularly Robert N. Friedman,
Chairman and Chief Executive Officer and Robert Glass, President and Chief
Operating Officer. The loss of services of any of the Company's executive
officers could have a material adverse impact on the Company. The Company's
success will depend on its ability to motivate and retain its key employees and
to attract and retain qualified personnel in the future.

Special Note Regarding Forward-looking Statements

         Certain statements under the captions "Business," "Management's
Discussions and Analysis of Financial Condition and Results of Operations" and
elsewhere in this Form 10-K or incorporated by reference herein, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions;
competition; success of operating initiatives; development and operating costs;
advertising and promotional efforts; brand awareness; the existence or adherence
to development schedules; the existence or absence of adverse publicity;
availability and terms of trade credit and other financing; availability,
locations and terms of sites for store development; changes in business strategy
or development plans; quality of management; availability, terms and deployment
of capital; business abilities and judgment of personnel; availability of
qualified personnel; labor and employee benefit costs; changes in, or the
failure to comply with, government regulations; construction costs; the timing
of and success in obtaining approvals for the Plan of Reorganization; the
successful implementation of restructuring activities and initiatives; and other
factors referenced in this report.

ITEM 2.  PROPERTIES

         As of April 20, 2000, the Company operated 44 stores in 17 states. The
Company does not own any of its stores and has no manufacturing facilities.

         Indicated below is a listing of the regions in which the Company
operates its stores:

                                                   Percent of
         Region                     Number of   Fiscal Year 1999
                                     Stores         Sales (1)
         ---------------------------------------------------------
         California ...........              12             30.4%
         New York  ............               7              23.5
         New Jersey ...........               5              11.0
         Other Mid-Atlantic ...               4               9.0
         Florida ..............               4               8.8
         Midwest ..............               3               4.4
         Texas ................               3               4.2
         Other West ...........               3               3.6
         Other Southeast ......               2               3.0
         New England ..........               1               2.1
                                            ---            ------
                                             44             100.0%
                                            ===            ======

                                       12
<PAGE>

          (1)     These percentages exclude sales from the Company's fourteen
                  stores closed in fiscal 1999 and the eleven stores closed in
                  March 2000.

Leases

         The Company follows the general industry practice of leasing all of its
stores. The Company's stores range in size from 9,000 to 60,000 square feet and
are held under leases expiring from 2000 to 2021, excluding option periods. The
leases for the company's stores typically provide for a 15- to 20-year term with
three five-year renewals that are automatic unless the Company elects to
terminate the lease. The rental rate is a fixed amount rather than a contingent
payment based on a store's gross sales. The leases typically contain tax
escalation clauses and require the Company to pay insurance, utilities, repair
and maintenance expenses. Increases in the fixed rent payable during the renewal
terms are generally less than 10% to 15% of the base rent (although this
percentage may increase for new stores). The leases have initial or renewal
terms expiring as follows: 1999-2000 (6 stores); 2001-2003 (13 stores);
2004-2006 (8 stores); and 2007 and later (17 stores).

         The six leases that expire by year-end fiscal 2000 have renewal
options. The Company has generally been successful in renewing its store leases
as they expire.

         The Company leases the land for its 153,000 square foot facility
located in the Bronx, New York, which serves as its corporate headquarters and
as the site of its central warehousing and distribution operations (the "Bronx
Facility"). This facility contains 27,000 square feet of office space and
126,000 square feet of warehouse space. The ground lease with respect to the
land on which the facility is situated provides for aggregate annual base rental
payments of $37,500. The lease expires in 2010, but is renewable at certain
increased rates until 2050. The Bronx Facility is subject to a mortgage with the
City of New York, "Industrial Development Bonds," which the Company believes
will be paid off by the Confirmation Hearing. Loehmann's' lease for the
Rutherford, New Jersey facility provides for annual rental payments of
$1,251,000.

ITEM 3. LEGAL PROCEEDINGS

         On May 18, 1999 (the "Petition Date"), the Company filed a petition for
relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware. Since the Petition Date, the Company has
continued to operate as a debtor-in-possession under the Bankruptcy Code. As a
result of the filing of the chapter 11 case, all pending litigation against the
Company became automatically stayed as provided in the Bankruptcy Code.

         Forty Three Apparel, Inc. v. Loehmann's Department Stores, Inc., The
Bigio Group, LLC, Debbie Friedman and Robert Friedman (Bankr. Ct. S.D.N.Y.). On
December 10, 1998, a complaint was filed by Forty Three Apparel, Inc. against
the Company in the United States Bankruptcy Court for the Southern District of
New York. The complaint also named, as co-defendants, Robert Friedman (the Chief
Executive Officer of the Company), his wife, Debbie Friedman and the Bigio
Group, LLC, a company affiliated with Ms. Friedman.

         The action alleges that the Company breached its contractual
obligations to Forty Three Apparel, a vendor with whom it did business, by
allegedly canceling certain orders from Forty Three Apparel and taking certain
allegedly unauthorized credits and/or deductions with respect to Forty Three
Apparel's account. Forty Three Apparel claims $700,000 in compensatory damages
from the Company. Forty Three Apparel alleges that Mr. Friedman induced this
alleged breach of contract and claims as against Mr. Friedman, $700,000 in
compensatory damages and $10,000,000 in punitive damages on that claim.
Management believes that the Company has substantial and meritorious defenses to
these claims. Mr.

                                       13
<PAGE>

Friedman and his counsel have advised the Company that Mr. Friedman also
believes he has substantial and meritorious defenses to these claims.

         The action further alleges claims of unfair competition, unjust
enrichment, misappropriation and inducement of Ms. Friedman's alleged breach of
fiduciary duty to Forty Three Apparel against the Company and others, all
apparently arising from the alleged use of confidential information obtained by
Ms. Friedman while an employee of Forty Three Apparel and from the Company's and
Mr. Friedman's alleged participation in this conduct. On these claims, Forty
Three Apparel is seeking $20,000,000 in compensatory damages and $10,000,000 in
punitive damages from the Company and Mr. Friedman. Management believes that the
Company has substantial and meritorious defenses to these claims. Mr. Friedman
and his counsel have advised the Company that Mr. Friedman also believes he has
substantial and meritorious defenses to these claims.

         The Company has submitted an Answer to the Complaint, generally denying
the material allegations of the Complaint as against the Company, and has
asserted counterclaims against Forty Three Apparel alleging breach of
contractual obligations and fraud. The Company seeks compensatory damages in an
amount to be determined at trial but not less than $1,000,000 on the breach of
contract claim and fraud claim respectively, and punitive damages on the fraud
claim in an amount to be determined at trial but not less than $2,000,000. In
the event that Forty Three Apparel is successful under any of its claims against
the Company, should the Company's Plan of Reorganization be approved and
confirmed, Forty Three Apparel will be treated as a general unsecured creditor
of the Company with respect to such claims.

         The Forty Three Apparel lawsuit has been stayed with respect to the
Company pursuant to the Company's chapter 11 filing. The action is still
proceeding against the other named defendants. The litigation stay imposed on
Forty Three Apparel's alleged claims against the Company by virtue of the
Company's reorganization proceeding was partially lifted to allow for limited
discovery of the Company's documents and depositions of certain of the Company's
employees, all of which discovery has now taken place. Otherwise, the Forty
Three Apparel litigation remains stayed as against the Company.

         The Company's charter and by-laws require the Company, to the extent
permitted by law, to indemnify its officers and directors against suits brought
against them in connection with their positions as officers and directors of the
Company. As a result, the Company may in the future advance or reimburse certain
litigation-related amounts to Mr. Friedman.

         In addition, the Company may be a party to various other legal
proceedings, many of which involve claims for coverage encountered in the
ordinary course of business. Based on information presently available, the final
outcome of all such proceedings should not have a material adverse effect upon
the Company's results of operations or financial condition.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None, during the fourth quarter of fiscal 1999.

PART II.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's common stock had been traded on the NASDAQ National
Market System since

                                       14
<PAGE>

May 7, 1996 under the symbol LOEH. On May 27, 1999 the Company's Common Stock
was delisted from the NASDAQ National Market System for failure to meet
continued listing standards. Since that date the Company's Common Stock has been
quoted on the OTC Bulletin Board under the symbol LOEHQ. As of March 29, 2000,
there were approximately 100 shareholders of record of the Company's common
stock. The following table shows the high and low sales price for the Company's
common stock for each quarterly period from May 2, 1998 through January 29,
2000.

       Fiscal Quarter Ended                               High         Low
       --------------------                               ----         ---
       May 2, 1998..................................    $ 6.13      $ 3.13
       August 1, 1998 ..............................    $ 6.94      $ 3.81
       October 31, 1998 ............................    $ 5.38      $ 2.00
       January 30, 1999 ............................    $ 3.69      $ 1.03
       May 1, 1999..................................    $ 2.69      $ 1.06
       July 31, 1999 ...............................    $ 1.75      $ 0.06
       October 30, 1999 ............................    $ 0.27      $ 0.06
       January 29, 2000 ............................    $ 0.34      $ 0.05

         On January 29, 2000, the closing market price of the Company's common
stock was $0.22. The Company has not paid dividends on its common stock or its
Class B Common stock since inception and does not anticipate paying a cash
dividend in the foreseeable future. The Plan of Reorganization provides that all
stockholders and option holders of the Company shall not be entitled to, and
shall not, receive any property or interest in property or on account of their
shares of Common Stock and options to purchase Common Stock. If the Plan of
Reorganization is approved, the Company's unsecured creditors will receive all
of the Company's Common Stock.

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                           1999             1998             1997             1996             1995
<S>                                                  <C>              <C>              <C>              <C>              <C>
Net Sales                                            $  386,030       $  432,017       $  443,310       $  417,758       $  386,090
Net loss applicable to common stock                  $   33,468       $    5,148       $   15,672       $    1,216       $   17,019
Diluted net loss per share applicable to common      $     3.69       $     0.57       $     1.75       $     0.14       $     3.12
stock
Total Assets                                         $  147,073       $  188,693       $  189,226       $  176,200       $  163,611
Long-Term obligations                                $        -       $  139,403       $  131,360       $  107,850       $  131,733
Redeemable Series A preferred stock                  $        -       $        -       $        -       $        -       $   15,279
</TABLE>

                                       15
<PAGE>

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

Results of Operations

         The table below sets forth certain financial data of the Company
expressed as a percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>
                                                                        Fiscal Year (1)

                                                               1999          1998           1997
<S>                                                           <C>           <C>            <C>
Net sales ..........................................          100.0%        100.0%         100.0%
Gross margin........................................           30.9          31.7           28.4
Selling, general and administrative expenses........
     Occupancy costs................................            7.9           7.1            6.2
     Other selling, general and administrative......           21.9          19.8           18.9
Total selling, general and administrative expenses..           29.8          26.9           25.1
Depreciation and amortization ......................            3.1           2.8            2.6
Charge for store closings and impairment of assets .              -          (0.3)           1.3
Operating (loss) income ............................           (2.0)          2.3           (0.6)
Interest expense, net ..............................            1.5           3.4            2.9
Loss before income taxes ...........................           (3.5)%        (1.0)%         (3.5)%
</TABLE>

--------------
(1)      Numbers may not total due to rounding.

         The following table sets forth certain financial and operating
statistics of the Company:

<TABLE>
<CAPTION>
                                                                1999             1998             1997
<S>                                                          <C>              <C>              <C>
Inventory ..........................................         $46,674,000      $69,605,000      $67,521,000
Capital expenditures................................           4,454,000        9,938,000       16,687,000
Working capital.....................................          22,698,000       31,480,000       27,092,000
DIP credit agreement................................           9,120,000         -                -
Outstanding line of credit..........................           -               41,880,000       33,771,000
Long-term debt......................................           -              139,403,000      131,360,000
Stockholder's (deficit) equity......................         (28,848,000)       4,618,000        9,706,000

Number of stores (1)................................                  55               69               76
Total square footage................................           1,165,000        1,452,000        1,492,000
Average Square feet per store.......................              21,200           21,000           19,600
</TABLE>

--------------
(1)      Eleven stores were closed after year end 1999.

         As previously noted, the Company is currently operating its business as
a debtor-in-possession under chapter 11 of the Bankruptcy Code. Continuation of
the Company as a going concern is contingent

                                       16
<PAGE>

upon, among other things, confirmation by the Bankruptcy Court and the Company's
creditors of a reorganization plan and the Company's ability to return to
profitability and generate sufficient cash from operations.

Fiscal 1999 Compared to Fiscal 1998

         Net sales were $386.0 million for fiscal 1999, a decrease of
approximately $46.0 million, or 10.6%, compared to $432.0 million during fiscal
1998. Comparable store sales (sales at stores that were in operation for both
periods) decreased by 5.3% during fiscal 1999 as compared to fiscal 1998. The
Company opened no new stores in fiscal 1999 and 3 new stores in fiscal 1998, and
closed 14 stores in fiscal 1999 and 10 stores in fiscal 1998. The decrease in
reported net sales for fiscal 1999 is the result of (i) the stores closed during
the year, partially offset by increased sales at the new stores opened in 1998
and (ii) the decrease in comparable store sales due, in part, to the business
interruption following the bankruptcy filing of the Company.

         Gross profit from operations, before markdowns related to closed
stores, decreased by approximately $13.0 million to $125.3 million during fiscal
1999 as compared to $138.3 million for fiscal 1998. Gross margin as a percentage
of net sales, before markdowns related to closed stores, increased to 32.5% for
fiscal 1999 from 32.0% in the prior fiscal year. Gross profit, including
markdowns related to closed stores in fiscal 1999 and 1998 of $6.1 million and
$1.2 million respectively, decreased by approximately $17.9 million during
fiscal 1999 to $119.2 million as compared to $137.1 million in fiscal 1998.
Gross margin as a percentage of net sales, after markdowns related to closed
stores, decreased to 30.9% in fiscal 1999 from 31.7% in the prior year.

         The decrease in gross margin of (0.8) percentage points from 31.7% to
30.9 % is primarily the result of: (i) a one time charge in fiscal 1999 for the
liquidation of inventory in fourteen stores closed in 1999 which represents
(1.2) percentage points, offset by a (ii) decrease in markdowns and a change in
merchandise mix toward higher margin categories which represents 0.4 percentage
points.

         Selling, general and administrative expenses decreased by approximately
$1.2 million to $114.9 million in fiscal 1999 as compared to $116.1 million in
fiscal 1998. As a percentage of net sales, selling, general and administrative
expense increased to 29.8% in fiscal 1999 from 26.9% in the prior fiscal year.
The dollar decrease in selling, general and administrative expenses was
primarily related to a reduction in payroll and advertising related to the
closing of 14 stores.

         Depreciation and amortization for fiscal 1999 decreased by
approximately $0.2 million to $12.0 million as compared to $12.2 million for the
prior fiscal year. The decrease in depreciation and amortization is attributable
to: (i) a decrease in depreciation related to the closing of the fourteen stores
in 1999 and, a decrease in depreciation associated with the natural retirement
of certain assets, offset by (ii) a increase in depreciation associated with
$4.5 million of capital expenditures for 1999.

         As a result of the items explained above, operating income decreased by
$17.7 million to a loss of $(7.7) million, or (2.0)% of sales, in fiscal 1999 as
compared to an operating income of $10.0 million, or 2.3% of sales, in fiscal
1998.

         Interest expense decreased by $8.7 million to $5.8 million for fiscal
1999 as compared to $14.5 million for fiscal 1998 due to the reclassification of
the 11 7/8 % Senior Notes to "Liabilities subject to compromise". No interest on
the Senior Notes has been accrued or paid since the Petition Date. As a result,
interest expense on the Senior Notes was $3.3 million in fiscal 1999 compared to
$11.3 million in 1998. See Note 4 of the Financial Statements.

                                       17
<PAGE>

        Reorganization costs for fiscal year 1999 were $19.9 million and
included $10.1 million for the write-off of assets at closed stores, $5.7
million for professional fees, $2.3 million for lease rejection claims and $1.8
million for other expenses. The amount of $2.3 million for leases rejection
claims is net of proceeds from the sale of leases of $2.4.

Fiscal 1998 Compared to Fiscal 1997

         Net sales were $432.0 million for fiscal 1998, a decrease of
approximately $11.3 million, or 2.5%, compared to $443.3 million during fiscal
1997. Comparable store sales (sales at stores that were in operation for both
periods) decreased by 1.6% during fiscal 1998 as compared to fiscal 1997. The
Company opened three new stores in fiscal 1998 and seven new stores in fiscal
1997, and closed ten stores in fiscal 1998 and four stores in fiscal 1997. The
decrease in reported net sales for fiscal 1998 is the result of (i) the stores
closed during the year, partially offset by increased sales at the new stores
opened in 1998 and 1997 and (ii) the decrease in comparable store sales.

         Gross profit from operations, before markdowns related to closed
stores, increased by approximately $8.9 million to $138.3 million during fiscal
1998 as compared to $129.4 million for fiscal 1997. Gross margin as a percentage
of net sales, before markdowns related to closed stores, increased to 32.0% for
fiscal 1998 from 29.2% in the prior fiscal year. Gross profit, including
markdowns for closed stores in fiscal 1998 and 1997 of $1.2 million and $3.6
million respectively, increased by approximately $11.3 million during fiscal
1998 to $137.1 million as compared to $125.8 million in fiscal 1997. Gross
margin as a percentage of net sales, after markdowns related to closed stores,
increased to 31.7% in fiscal 1998 from 28.4% in the prior year.

         The increase in gross margin of 3.3 percentage points is primarily the
result of: (i) a decrease in markdowns which represents 2.1 percentage points ,
(ii) change in merchandise mix toward higher margin categories which represents
 .5 percentage points, and (iii) the one time charge in fiscal 1997 for the
liquidation of inventory in ten stores closed in 1998 which represents 0.8
percentage points of fiscal 1997 sales.

         Selling, general and administrative expenses increased by approximately
$4.7 million to $116.1 million during fiscal 1998 as compared to $111.4 million
for fiscal 1997. As a percentage of net sales, selling, general and
administrative expense increased to 26.9% in fiscal 1998 from 25.1% in the prior
year. The dollar increase in selling, general and administrative expenses was
primarily related to: (i) $8.0 million in store operating expenses related to
1998 new stores and recently expanded stores including store payroll, occupancy
and advertising costs, partially offset by (ii) $5.2 million in cost savings
related to closed stores. The increase in selling, general and administrative
expense as a percentage of sales is primarily the result of higher relative
occupancy costs as a percentage of sales for new stores and the recent store
expansions.

         Depreciation and amortization for fiscal 1998 increased by
approximately $0.8 million to $12.2 million as compared to $11.4 million for the
prior fiscal year. The increase in depreciation and amortization is attributable
to: (i) an increase in depreciation related to the opening of the three new
stores and the expansion and renovation of eight stores in fiscal 1997, offset
by (ii) a decrease in depreciation associated with the natural retirement of
certain assets.

         Operating income increased by $12.7 million to $10.0 million, or 2.3%
of sales, in fiscal 1998 as compared to an operating loss of $(2.7) million, or
(0.6)% of sales, in fiscal 1997. The increase in operating income as a
percentage of sales from (0.6)% to 2.3% in fiscal 1998 primarily consists of the
following: (i) 3.3% related to an increase in gross margin resulting from lower
markdowns and higher

                                       18
<PAGE>

average initial mark-ups, offset by (ii) (1.5)% related to selling, general, and
administrative expenses primarily resulting from higher occupancy costs as a
percentage of sales associated with new and expanded stores. Operating income
also includes a credit of $1.2 million for lease termination costs at closed
stores. These costs were included in the store closing reserve for fiscal year
1997 and the costs actually incurred were less than originally expected.

         Interest expense increased by $1.7 million to $14.5 million for fiscal
1998 as compared to $12.8 million for fiscal 1997. The increase in net interest
expense was due to higher average borrowings on the company's revolving line of
credit primarily resulting from investing activities in 1997 and 1998. See Note
4 of the Financial Statements.

Quarterly Results and Seasonality

         While the Company's net sales do not show significant seasonal
variation, the Company's operating income has traditionally been significantly
higher in its first and third fiscal quarters. The Company believes that its
merchandise is purchased primarily by women who are buying for their own
wardrobes rather than as gifts. As a result, the Company does not experience
increases in net sales during the Christmas shopping season. Results of
operations during the second and fourth quarters are traditionally impacted by
end of season clearance events. In addition, fourth quarter results of
operations can be affected by employee performance bonuses, because although
bonuses are accrued throughout the fiscal year and are estimated on a quarterly
basis, bonus amounts are not definitively known until year-end goals are
achieved.

         The following table sets forth certain unaudited operating data for the
Company's eight fiscal quarters ended January 29, 2000. The unaudited quarterly
information includes all normal recurring adjustments which management considers
necessary for a fair presentation of the information shown.

                                       19
<PAGE>
<TABLE>
<CAPTION>
                                                Fiscal 1998                                        Fiscal 1999
                                                -----------                                        -----------
                               -----------------------------------------------------------------------------------------------------
                                      First       Second        Third       Fourth       First       Second       Third      Fourth
                                    Quarter      Quarter      Quarter      Quarter     Quarter      Quarter     Quarter     Quarter
                               -----------------------------------------------------------------------------------------------------
                                                            (In thousands, except per share data) unaudited
<S>                                <C>           <C>         <C>          <C>         <C>           <C>        <C>          <C>
Statement of operations data
Net sales                          $110,227      $97,058     $112,005     $112,727    $108,231      $89,984    $ 93,962     $93,853
Gross profit                         37,045       31,319       37,924       30,834      34,552       23,186      33,451      28,045
Selling, general and
Administrative expenses              28,604       26,229       30,450       30,813      31,543       29,611      26,956      26,776
Depreciation and amortization         3,135        2,914        3,001        3,151       3,190        3,175       2,736       2,918
Non-recurring credit                      -            -            -       (1,216)          -            -           -           -
Operating income (loss)               5,306        2,176        4,473       (1,914)       (181)      (9,600)      3,759      (1,649)
Interest expense                      3,540        3,731        3,610        3,633       3,660        1,177         525         442
Income (loss)before
   reorganization costs
   extraordinary item                 1,742       (1,619)         830       (5,541)     (3,879)     (10,777)      3,234      (2,123)
Reorganization costs                      -            -            -            -           -       21,064      (2,833)      1,650
Extraordinary loss on early
   extinguishment of debt                 -          560            -            -           -            -           -           -
Net income (loss)                     1,742       (2,179)         830       (5,541)     (3,879)     (31,869)      6,053      (3,773)

Earnings per share:
Basic and Diluted
Income (loss) before
   extraordinary item              $   0.19      $ (0.18)    $   0.09     $  (0.61)   $  (0.43)     $ (3.51)   $   0.67     $ (0.41)
Extraordinary item                        -        (0.06)           -            -           -            -           -           -
Net Income (loss)                  $   0.19      $ (0.24)    $   0.09     $  (0.61)   $  (0.43)     $ (3.51)   $   0.67     $ (0.41)
</TABLE>

Liquidity and Capital Resources

         The Company's primary sources of liquidity are cash flows from
operations, trade credit and borrowings under the DIP Facility. The DIP Facility
provides for a revolving line of credit and a letter of credit facility
aggregating $75.0 million. The DIP Facility expires on the earlier of (a) the
second anniversary of the DIP Facility, (b) the effective date of a plan of
reorganization for the Company, or (c) acceleration following the occurrence of
an event of default. The availability of the revolving line of credit and
letters of credit under the DIP Facility is subject to certain inventory-related
borrowing base requirements. The indebtedness under the DIP Facility bears
interest at variable rates based on LIBOR plus 2.25% or the prime rate plus
0.5%. The DIP Facility contains certain customary covenants (including
limitations on indebtedness, liens and restricted payments) but does not contain
any financial covenants. The DIP Facility is secured by substantially all of the
Company's assets.

         During fiscal 1999, cash flow used in operations before changes in
operating assets and liabilities was $11.3 million. This was favorably offset by
the change in cash provided by the change in operating assets and liabilities.
Cash flows provided by changes in operating assets and liabilities was $50.8
million. Changes in operating assets and liabilities were favorably impacted by
a decrease in inventory of $22.9 million and an increase in accounts payable and
accrued expenses of $13.0 million and $10.3 million, respectively. The reduction
in inventory is due primarily to the closing of 14 stores in July 1999.

         Cash flows used in investing activities were $4.5 million for fiscal
year 1999. This represents

                                       20
<PAGE>

capital expenditures and is a decrease from $9.9 million in fiscal 1998 and
$16.7 million in fiscal 1997. During fiscal years 1997 and 1998 the Company
opened 10 new stores and expanded 9 existing stores, consistent with its new
store format strategy of larger store size to accommodate its broadened
merchandising strategy. In this three year period, the Company expended
approximately $31.1 million on capital expenditures. Capital expenditures for
fiscal 1999 include $1.3 million for store operations, $0.8 million for
warehouse improvements and $2.1 million for computer software and hardware. The
Company's projected year 2000 capital expenditures are approximately $9.0
million.

         Cash used in financing activities was $35.1 million for fiscal 1999
compared to cash provided by financing activities of $7.7 million and $23.6
million in fiscal 1998 and 1997, respectively. In fiscal 1999, the Company
repaid borrowings under the Company's prior credit facility of $41.9 million.
This was the result of operating as a debtor-in-possession as well as reduced
inventory purchases due to store closings.

         The Company had borrowings of $9.1 million and letters of credit of
$0.9 million outstanding under the DIP Facility, with $22.4 million of remaining
availability for borrowings under the DIP Facility as of January 29, 2000. The
Company intends to use the DIP Facility during the pendency of the chapter 11
case to finance its working capital and capital expenditure requirements. The
Company is currently seeking exit financing which is needed for the Company's
emergence from bankruptcy.

         The Company's 11 7/8 % Senior Notes for $95.0 million were reclassified
as "Liabilities subject to compromise" as of the Petition Date. No interest has
been accrued or paid on the Senior Notes since that date.

         The Company believes that cash generated from operations together with
funds available under the DIP Facility and through trade credit financing will
be sufficient to satisfy its cash requirements in fiscal 2000. Although the
Company fully anticipates that it will be able to continue meeting its
obligations as they come due beyond fiscal 1999, the Company's ability to do so
will depend on its ability to successfully implement its business plans, general
economic and business conditions, and the other factors noted in "Special Note
Regarding Forward Looking Statements."

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.

                                       21
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          Index to Financial Statements

                                 Loehmann's Inc.
                             (Debtor-in-possession)

                                    Contents

 Report of Independent Auditors............................................    2

 Balance Sheets at January 29, 2000 and January 30, 1999...................    3
 Statements of Operations for the fiscal years ended
   January 29, 2000, January 30, 1999 and January 31, 1998.................    4
 Statements of Changes in Common Stockholders'
   Deficit for the fiscal years ended January 29, 2000,
   January 30, 1999 and January 31, 1998...................................    5
 Statements of Cash Flows for the fiscal years ended
   January 29, 2000, January 30, 1999 and January 31, 1998.................    6
 Notes to Financial Statements.............................................    7

                                       22
<PAGE>

                         Report of Independent Auditors

The Board of Directors and Shareholders
Loehmann's Inc. (Debtor-in-possession)

         We have audited the accompanying balance sheets of Loehmann's Inc. (the
"Company") as of January 29, 2000, and January 30, 1999, and the related
statements of operations, changes in common stockholder's equity (deficit) and
cash flows for each of the three years in the period ended January 29, 2000. Our
audits also include the financial statement schedule listed in the Index at Item
14(a). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Loehmann's Inc. at
January 29, 2000, and January 30, 1999, and the results of its operations and
cash flows for each of the three years in the period ended January 29, 2000, in
conformity with accounting principles generally accepted in the United States.
Also, in our opinion, the related financial statement schedule when considered
in relation to the basic financial statements as a whole, present fairly in all
material respects the information set forth therein.

         As discussed in Note 1, on May 18, 1999, the Company filed a voluntary
petition for relief under chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court. The Company formulated a Plan of Reorganization
which was included in the Disclosure Statement approved by the Bankruptcy Court
on April 24, 2000. Although the Company is currently continuing business
operations as a debtor-in-possession under the jurisdiction of the Bankruptcy
Court, the Company's ability to operate as a going concern is contingent upon,
among other things, the approval by the Company's creditors of the Plan of
Reorganization referred to above. The uncertainty of the approval by the
Company's creditors of the Plan of Reorganization, coupled with the recurring
losses from operations and shareholder's deficit, raise substantial doubt about
the Company's ability to continue as a going concern. The accompanying financial
statements have been prepared assuming that the Company will continue as a going
concern and do not include any adjustments relating to the recoverability and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern. The Plan of Reorganization could
materially change the amounts and classifications of assets and liabilities
reported in the accompanying financial statements. The financial statements do
not include any adjustments to the carrying value of the assets or amounts of
liabilities that might be necessary as a consequence of the Plan of
Reorganization.

New York, New York
March 15, 2000, except for
     Note 1, as to which the
     date is April 24, 2000

                                       23
<PAGE>

                                 Loehmann's Inc.
                             (Debtor-in-possession)

                                 Balance Sheets
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                          January         January
                                                                                          29, 2000       30, 1999
                                                                                       -------------------------------
<S>                                                                                      <C>            <C>
Assets
Current assets:
   Cash and cash equivalents                                                             $    1,229     $    1,325
   Accounts receivable and other assets                                                       3,388          4,883
   Merchandise inventory                                                                     46,674         69,605
                                                                                       -------------------------------
Total current assets                                                                         51,291         75,813
Property, equipment and leaseholds, net                                                      56,019         71,462
Deferred debt issuance costs and other assets, net                                            1,021          3,195
Purchase price in excess of net assets acquired, net                                         36,923         38,223
                                                                                       -------------------------------
Total assets                                                                             $  145,254     $  164,171
                                                                                       ===============================

Liabilities and common stockholders' (deficit) equity
Current liabilities:
   DIP credit agreement                                                                  $    9,120     $        -
   Accounts payable                                                                           6,530         25,544
   Accrued expenses                                                                          12,495         16,031
   Accrued interest                                                                              57          2,688
   Current portion of long-term debt                                                            391             70
                                                                                       -------------------------------
Total current liabilities                                                                    28,593         44,333

Long-term debt:
   Revolving line of credit                                                                       -         41,880
   11 7/8% senior notes due May 2003                                                              -         95,000
   Revenue bonds and notes                                                                        -          2,523
                                                                                       -------------------------------
Total long-term debt                                                                              -        139,403

Liabilities subject to compromise                                                           141,733              -

Other noncurrent liabilities                                                                  3,776            339

Common stockholders' (deficit) equity:
  Common stock, $0.01 par value, 25,000,000 shares authorized;
  9,053,967 and 9,052,607 shares issued and outstanding at January 29,
  2000, and January 30, 1999, respectively.                                                      90             90
  Class B convertible common stock, 469,237 shares authorized; 26,087
  shares issued and outstanding at January 29, 2000, and January 30, 1999                       142            142
  Additional paid-in capital                                                                 81,760         81,758
  Accumulated deficit                                                                      (110,840)       (77,372)
                                                                                       -------------------------------
Total common stockholders' (deficit) equity                                                 (28,848)         4,618
                                                                                       -------------------------------
Total liabilities and common stockholders' (deficit) equity                              $ 145,254      $ 188,693
                                                                                       ===============================
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       24
<PAGE>

                                 Loehmann's Inc.
                             (Debtor-in-possession)

                            Statements of Operations

                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                                                Fiscal year ended
                                                                   January           January           January
                                                                   29, 2000          30, 1999          31, 1998
                                                              ------------------------------------------------------
<S>                                                               <C>               <C>             <C>
Net sales                                                         $ 386,030         $ 432,017       $  443,310
Cost of sales                                                       266,796           294,895          317,548
                                                              ------------------------------------------------------
Gross profit                                                        119,234           137,122          125,762

Selling, general, and administrative expenses                       114,886           116,096          111,370
Depreciation and amortization                                        12,019            12,201           11,433
(Credit) charge for store closings and impairment of
  assets                                                                  0            (1,216)           5,660
                                                              ------------------------------------------------------
Operating (loss) income                                              (7,671)           10,041           (2,701)

Interest expense, net                                                 5,804            14,514           12,845
                                                              ------------------------------------------------------
Loss before reorganization items and income taxes                   (13,475)           (4,473)         (15,546)

Reorganization costs                                                 19,881                 -                -
                                                              ------------------------------------------------------
Loss before income taxes                                            (33,356)           (4,473)         (15,546)

Provision for income taxes                                              112               115              126
                                                              ------------------------------------------------------
Loss before extraordinary item                                      (33,468)           (4,588)         (15,672)

Extraordinary loss on early extinguishment of debt                        -               560                -
                                                              ------------------------------------------------------
Net loss applicable to common stock                               $ (33,468)        $  (5,148)      $  (15,672)
                                                              ======================================================
Earnings per share:
  Basic and Diluted
     Loss before extraordinary item                               $   (3.69)        $   (0.51)      $    (1.75)
     Extraordinary item                                                   -             (0.06)               -
                                                              ------------------------------------------------------
     Net loss                                                     $   (3.69)        $   (0.57)      $     (1.75)
                                                              ======================================================

Weighted average number of common shares outstanding
                                                                      9,080             9,063            8,961
                                                              ======================================================
Weighted average number of common shares and
   common share equivalents outstanding                               9,080             9,063            8,961
                                                              ======================================================
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       25
<PAGE>
                                 Loehmann's Inc.

                             (Debtor-in-possession)

         Statements of Changes in Common Stockholders' Equity (Deficit)

                      (In thousands, except share amounts)
<TABLE>
<CAPTION>

                                                         Common Stock      Class B Common Stock
                                                      ------------------   ---------------------
                                                       Number of           Number of
                                                        Shares    Amount    Shares     Amount
                                                      ------------------------------------------
<S>                                                   <C>          <C>      <C>        <C>
Balances as of February 1, 1997 ...................   8,756,739    $ 87     142,277    $  713
Exercise of stock options .........................     126,347       1           -         -
Conversion of Class B common stock ................      93,846       1     (93,846)     (469)
Net loss for the fiscal year ended January 31, 1998           -       -           -         -
                                                      -------------------------------------------
Balances as of January 31, 1998 ...................   8,976,932    $ 89      48,431    $  244
                                                      -------------------------------------------
Exercise of stock options .........................      53,331       1           -         -
Conversion of Class B common stock ................      22,344       0     (22,344)     (102)
Net loss for the fiscal year ended January 30, 1999           -       -           -         -
                                                      -------------------------------------------
Balances as of January 30, 1999 ...................   9,052,607    $ 90      26,087    $  142
                                                      -------------------------------------------
Exercise of stock options .........................       1,360       -           -         -
Net loss for the fiscal year ended January 29, 2000           -       -           -         -
                                                      -------------------------------------------
Balances as of January 29, 2000 ...................   9,053,967    $ 90      26,087    $  142
                                                     ==========================================
<CAPTION>
                                                      Additional
                                                        Paid-in   Accumulated
                                                        Capital    Deficit        Totals
                                                      -----------------------------------
<S>                                                   <C>         <C>          <C>
Balances as of February 1, 1997 ...................   $  80,995   $ (56,552)   $  25,243
Exercise of stock options .........................         134           -          135
Conversion of Class B common stock ................         468           -            -
Net loss for the fiscal year ended January 31, 1998           -     (15,672)     (15,672)
                                                      -----------------------------------
Balances as of January 31, 1998 ...................   $  81,597   $ (72,224)   $   9,706
                                                      -----------------------------------
Exercise of stock options .........................          59           -           60
Conversion of Class B common stock ................         102           -            -
Net loss for the fiscal year ended January 30, 1999          -       (5,148)      (5,148)
                                                      -----------------------------------
Balances as of January 30, 1999 ...................   $  81,758   $ (77,372)   $   4,618
                                                      -----------------------------------
Exercise of stock options .........................           2           -            2
Net loss for the fiscal year ended January 29, 2000           -     (33,468)     (33,468)
                                                      -----------------------------------
Balances as of January 29, 2000 ...................   $  81,760   $(110,840)   $ (28,848)
                                                      ===================================
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       26
<PAGE>

                                 Loehmann's Inc.

                             (Debtor-in-possession)

                            Statements of Cash Flows

                                 (In thousands)
<TABLE>
<CAPTION>
                                                                             Fiscal year ended
                                                                  January        January      January
                                                                  29, 2000       30, 1999     31, 1998
                                                               ------------------------------------------
<S>                                                              <C>           <C>           <C>
Cash flows from operating activities
Net loss                                                         $ (33,468)    $ (5,148)     $(15,672)
Adjustments to reconcile net loss to net cash provided
   by (used in) operating activities:
     Depreciation and amortization                                  12,019       12,201        11,433
     Reorganization items                                           10,118            -             -
      Write-off of deferred financing fees on early
       extinguishment of debt                                            -           60             -
     Charges for store closings, impairment of assets
      and other                                                          -            -         2,110
     Changes in assets and liabilities:
       Accounts receivable and other assets                          1,495          692        (1,175)
       Merchandise inventory                                        22,931       (2,084)       (9,217)
       Accounts payable                                             12,991        3,974         1,936
       Accrued expenses                                             10,324       (7,601)        3,148
       Accrued interest                                              3,041          192           (34)
                                                               ------------------------------------------
 Net change in current assets and liabilities                       50,782       (4,827)       (5,342)
 Net change in other noncurrent assets and liabilities                  11         (443)          (15)
                                                               ------------------------------------------
Total adjustments                                                   72,930        6,991         8,186
                                                               ------------------------------------------
Net cash provided by (used in) operations                           39,462        1,843        (7,486)

Cash flows from investing activities
Capital expenditures                                                (4,454)      (9,938)      (16,687)
                                                               ------------------------------------------
Net cash used in investing activities                               (4,454)      (9,938)      (16,687)
                                                               ------------------------------------------
Cash flows from financing activities
Borrowings on DIP credit agreement                                   9,120            -             -
(Payments) borrowings on revolving credit facilities               (41,880)       8,109        23,583
Repayments on revenue bonds and notes                               (2,250)           -             -
Financing fees for new credit facility                                (144)        (432)            -
Sale of common stock                                                     2           57           135
Other financing activities, net                                         48          (81)          (70)
                                                               ------------------------------------------
Net cash (used in) provided by financing activities                (35,104)       7,653        23,648
                                                               ------------------------------------------
Net decrease in cash and cash equivalents                              (96)        (442)         (525)
Cash and cash equivalents at beginning of period                     1,325        1,767         2,292
                                                               ------------------------------------------
Cash and cash equivalents at end of period                       $   1,229     $  1,325         1,767
                                                               ==========================================
Supplemental disclosure of cash flow information
Cash paid during the fiscal year for interest                    $   2,547     $ 14,527     $  13,212
                                                               ==========================================

Cash paid during the fiscal year for income taxes                $     112     $    104     $     233
                                                               ==========================================
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       27

<PAGE>

1.   Basis of Presentation

Chapter 11 Case and Basis of Presentation

         The Company is a leading upscale off-price specialty retailer of well
known designer and brand name women's fashion apparel, men's furnishings,
accessories and shoes.

         On May 18, 1999 (the "Petition Date") the Company filed a petition for
relief under chapter 11 of the Bankruptcy Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). Since the Petition Date, the Company has continued to operate as a
debtor-in-possession under the Bankruptcy Code.

         On March 24, 2000, with the support of the Creditor's Committee, the
Company filed a Disclosure Statement (the "Disclosure Statement") and a Plan of
Reorganization (the "Plan of Reorganization") with the Bankruptcy Court. On
April 24, 2000, the Bankruptcy Court approved the Disclosure Statement related
to the Plan of Reorganization and scheduled a plan confirmation hearing for June
27, 2000. The Company has until May 24, 2000 to send out the plan solicitation
package to creditors and other related parties.

         As discussed in the Report of Independent Auditors, although the Plan
of Reorganization provides for the Company's emergence from bankruptcy, there
can be no assurances given that the Plan of Reorganization will be confirmed by
the Court, or that such Plan of Reorganization will be consummated. At this
time, therefore, it is not possible to predict the outcome of the Company's
bankruptcy case or its effect on the Company's business.

         The Disclosure Statement sets forth certain information regarding,
among other things, significant events that have occurred during the Company's
chapter 11 case and the anticipated organization, operation and financing of
Reorganized Loehmann's. The Disclosure Statement also describes the Plan of
Reorganization, certain effects of Plan confirmation, certain risk factors
associated with securities to be issued under the Plan of Reorganization, and
the manner in which distributions will be made to the Company's creditors under
the Plan of Reorganization for all amounts that were owed to such parties on the
Petition Date. In addition, the Disclosure Statement discusses the confirmation
process and the voting procedures that holders of claims in impaired classes
must follow for their votes to be counted.

         The Plan of Reorganization divides the Company's creditors into six
classes: Other Priority Claims (Class 1); Other Secured Claims (Class 2); DIP
Financing Claims (Class 3); Convenience Claims (Class 4); General Unsecured
Claims (Class 5) and Equity Interest (Class 6). Administrative Claims and
Priority Tax Claims against the Company have not been classified as provided in
the Bankruptcy Code. The definitions for each class of claims is set forth in
the Plan of Reorganization and creditors are urged to consult the Plan of
Reorganization.

         In general, the Plan of Reorganization provides that holders of
Administrative Claims, Priority Tax Claims, Other Priority Claims, and DIP
Financing Claims will either receive payment in full in cash on account of their
claims or such other treatment as set forth in the Plan of

                                       28
<PAGE>

Reorganization. Holders of General Unsecured Claims against the Company will
receive their pro rata share of 5,000,000 shares of new common stock of
Reorganized Loehmann's. Unsecured creditors holding claims of $2,000 or less
will receive cash equal to 50% of the allowed amount of such claim. Holders of
claims in excess of $2,000 will be permitted to reduce their claims of $2,000 to
receive such treatment.

         Finally, holders of Loehmann's Common Stock (and other instruments
evidencing ownership in Loehmann's) will receive no distributions under the Plan
of Reorganization and such instruments will be canceled.

         The financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern, which
principles, except as otherwise disclosed, assume that assets will be realized
and liabilities will be discharged in the ordinary course of business. As a
result of the chapter 11 case and circumstances relating to this event,
including the uncertainty of the approval by the Company's creditors of the Plan
of Reorganization, the Company's debt structure and its recurring losses, such
realization of assets and liquidation of liabilities are subject to uncertainty
and as such raises substantial doubt about the Company's ability to continue as
a going concern. While under the protection of chapter 11, the Company may sell
or otherwise dispose of assets, and liquidate or settle liabilities, for amounts
other than those reflected in the financial statements. Additionally, the
amounts reported on the balance sheet could materially change because of changes
in business strategies and the effect of any proposed plan of reorganization.

         The appropriateness of using the going concern basis is dependent upon,
among other things, confirmation of a plan of reorganization, future profitable
operations, the ability to comply with the terms of the Company's
debtor-in-possession financing and the ability to generate sufficient cash from
operations and financing arrangements to meet obligations.

         In the chapter 11 case, substantially all liabilities as of the
Petition Date are subject to compromise or other treatment under a plan of
reorganization. For financial reporting purposes, those liabilities and
obligations whose disposition is dependent on the outcome of the chapter 11 case
have been segregated and classified as liabilities subject to compromise in the
balance sheets. Generally, actions to enforce or otherwise effect repayment of
all pre-chapter 11 liabilities as well as all pending litigation against the
Company are stayed while the Company continues its business operations as a
debtor-in-possession. Schedules have been filed by the Company with the
Bankruptcy Court setting forth the assets and liabilities of the Company as of
the Petition Date as reflected in the Company's accounting records. Differences
between amounts reflected in such schedules and claims filed by creditors are
currently being investigated and either amicably resolved or adjudicated. The
ultimate amount of and settlement terms for such are not presently determinable.

Fiscal Year

         The Company follows the standard fiscal year of the retail industry,
which is a 52 or 53-week period ending on the Saturday closest to January 31.
Fiscal years ended January 29, 2000, January 30, 1999 and January 31, 1998 had
52 weeks.

                                       29
<PAGE>

Use of Estimates

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

2.   Summary of Significant Accounting Policies

Cash and Cash Equivalents

         The Company considers all highly liquid marketable securities purchased
with an original maturity of three months or less to be cash and cash
equivalents.

Merchandise Inventory

         Merchandise inventory is valued at the lower of cost or market as
determined by the retail inventory method. However, certain warehoused inventory
that is not immediately available for sale is valued on a specific cost basis.
The merchandise inventory valued on a specific cost basis at January 29, 2000
and January 30, 1999 was $11.1 million and $16.9 million, respectively.

Advertising Expense

         The cost of advertising is expensed as incurred. Advertising costs were
$16.3 million, $17.1 million, and $15.4 million during fiscal years 1999, 1998,
and 1997, respectively.

Depreciation and Amortization

         Building and furniture, fixtures and equipment are depreciated on a
straight-line basis over their estimated useful lives. Leasehold interests
represent the beneficial value of operating leases as determined by an
independent appraisal of the individual leases at the date such leases were
acquired by the Company and such amounts are amortized on a straight-line basis
over the related lease term.

         Leasehold improvements are amortized on a straight-line basis over the
shorter of the related lease terms or their useful life.

Pre-opening Costs

         Expenses incurred in connection with the opening of new stores are
expensed in the fiscal quarter in which the store opens. Pre-opening costs of
$0, $0.6 million and $1.3 million were incurred in fiscal 1999, 1998 and 1997,
respectively.

Purchase Price in Excess of Net Assets Acquired, Net

         The purchase price in excess of identifiable net assets acquired is
being amortized on a straight-line basis over 40 years. Amortization expense for
fiscal years 1999, 1998 and 1997 amounted to $1.3 million

                                       30
<PAGE>

annually. Accumulated amortization at January 29, 2000 and January 30, 1999 was
$14.9 million and $13.6 million, respectively.


Class B Common Stock

         Each share of Class B Common Stock will be convertible into one share
of Common Stock, subject to adjustment at any time. During fiscal years 1999 and
1998, 0 and 22,344 shares, respectively, of Class B Common Stock were converted.
Subject to restrictions in the Company's various credit agreements, the Company
is required to offer to purchase the Class B Common Stock at its independently
appraised value. The Company's various credit agreements prohibit or restrict
any such repurchase.

Capitalized Interest

         Interest on borrowed funds is capitalized during construction of
property and is amortized by charges to earnings over the depreciable lives of
the related assets. Interest of $0, $263,000 and $397,000 was capitalized during
fiscal years 1999, 1998 and 1997, respectively.

Deferred Debt Issuance Costs

         Deferred debt issuance costs are amortized over the terms of the
related debt agreement. Deferred debt issuance costs were $0.8 million at
January 29, 2000 and $4.6 million at January 30, 1999. Amortization expense for
fiscal years 2000, 1999, and 1998 amounted to $0.9 million, $0.8 million and
$0.6 million, respectively. Total accumulated amortization at January 29, 2000
and January 30, 1999 amounted to $0.4 million and $1.6 million, respectively.

Income Taxes

         Income taxes are provided using the liability method.

Revenue Recognition

         The Company recognizes revenue when goods are sold, at retail, to
customers in its stores.

Net Loss Per Share of Common Stock

         Basic earnings per share ("EPS") is determined by dividing net
income/loss by the weighted average number of shares of Common Stock and Class B
Common Stock outstanding during the period. Diluted EPS is determined by
dividing net income/loss by the weighted average number of shares of Common
Stock, Class B Common Stock and Common Stock equivalents outstanding during the
period. Outstanding options to purchase Common Stock were not considered in the
calculation of Diluted EPS for fiscal 1999, 1998 and 1997, as their effects were
antidilutive.

Other Comments

                                       31
<PAGE>

         Certain items in fiscal 1998 and fiscal 1997 have been reclassified to
present them on a basis consistent with fiscal 1999.

3.   Income Taxes

         The Company's provision for income taxes primarily represents state and
local minimum and alternative minimum taxes.

         Significant components of deferred tax assets and liabilities are as
follows:

<TABLE>
<CAPTION>

                                                   January          January
                                                   29, 2000        30, 1999
                                               ---------------------------------
                                                        (In thousands)
<S>                                               <C>              <C>
  Deferred tax assets:
     Net operating loss carryforwards             $ 31,213         $ 18,215
     Excess tax depreciation and amortization        3,131            2,775
     Store closing reserve                               -              817
     Capitalization of inventory expenses              632              778
     Other, net                                        877            1,026
                                               ---------------------------------
  Total deferred tax assets                         35,853           23,611
                                               ---------------------------------

  Deferred tax liabilities                        $   (272)        $   (272)


  Net deferred tax assets                           35,581           23,339
  Less valuation allowance                         (35,581)         (23,339)
                                               ---------------------------------
                                                  $      -         $      -
                                               =================================
</TABLE>

         Following is a reconciliation of the statutory Federal income tax rate
and the effective income tax rate application to earnings before income taxes:

<TABLE>
<CAPTION>

                                                                   January         January        January
                                                                   29, 2000       30, 1999        31, 1998
                                                                ----------------------------------------------
<S>                                                                <C>            <C>             <C>
  Statutory tax rate                                                   35.0%          35.0%           35.0%
  Tax effect of extraordinary item                                        -              -               -
  Utilization of net operating loss carry forward                         -              -               -
  Valuation allowance adjustment                                      (33.9)         (27.9)          (32.4)
  Goodwill                                                             (1.4)          (9.0)           (3.0)
</TABLE>

                                       32
<PAGE>

<TABLE>
<CAPTION>
                                                                   January         January        January
                                                                   29, 2000       30, 1999        31, 1998
                                                                ----------------------------------------------
<S>                                                                <C>            <C>             <C>
  Other, net                                                              -           (0.4)           (0.4)
                                                                ----------------------------------------------
     Effective tax rate                                                (0.3)%         (2.3)%          (0.8)%
                                                                ==============================================
</TABLE>

         At January 29, 2000, the Company had a net operating loss carryforward
of approximately $75.0 million for regular tax purposes. Net operating losses
begin to expire in 2003 and future years.

                                       33
<PAGE>

4.   Debt

        The Company's long-term debt consists of:
<TABLE>
<CAPTION>
                                                                 January               January
                                                                29, 2000              30, 1999
                                                             ---------------------------------------
                                                                        (In thousands)
<S>                                                              <C>                 <C>
 Revolving line of Credit (a)                                          -             $  34,030
 Term loan (a)                                                         -                 7,850
 11 7/8%  senior notes, due 2003 (b)                                   -                95,000
   9 1/2%  New York City Industrial Development
    Agency revenue bonds, due 2004 (c)                                 -                 2,250
   51/2%  City of New York note due in varying
    installments to 2004 (c)                                         391                   343
                                                             ---------------------------------------
                                                                     391               139,473
 Less current maturities                                             391                    70
                                                             ---------------------------------------
 Debt                                                            $     0             $ 139,403
                                                             =======================================
</TABLE>

(a)  On June 7, 1999, the Bankruptcy Court entered a final order approving a $75
     million debtor-in-possession financing (the "DIP Facility") with Congress
     Financial Corporation. The DIP Facility provides for a revolving line of
     credit and a letter of credit facility aggregating $75 million. The DIP
     Facility expires on the earlier of (a) the second anniversary of the DIP
     Facility, (b) the effective date of a plan of reorganization for the
     Company, or (c) acceleration following the occurrence of an event of
     default. The availability of the revolving line of credit and letters of
     credit under the DIP Facility is subject to certain inventory-related
     borrowing base requirements. The indebtedness under the DIP Facility bears
     interest at variable rates based on LIBOR plus 2.25% or the prime rate plus
     0.5%. The DIP Facility contains certain customary covenants (including
     limitations on indebtedness, liens and restricted payments) but does not
     contain any financial covenants. The DIP Facility is secured by
     substantially all of the Company's assets. The Company intends to use the
     DIP Facility during pendency of the chapter 11 case to finance its working
     capital expenditure requirements. The DIP Facility is classified as short
     term borrowings and was $9.1 million at January 29, 2000. This new
     agreement replaces the long term revolving credit agreement and Term Loan,
     which were paid off.

(b)  The Company is currently in default of the senior notes, which are
     unsecured and have been classified as liabilities subject to compromise.

(c)  The Industrial Development Agency Bonds were paid off in fiscal 1999. The
     existing note payable to the City of New York will be paid off in 2000.

5.   Liabilities Subject to Compromise and Reorganization Items

         The principal categories of obligations classified as liabilities
subject to compromise under reorganization proceedings are identified below. The
amounts in total will be subject to future adjustment depending on court action,
further developments with respect to potential disputed claims, determination

                                       34
<PAGE>

as to the value of any collateral securing claims, or other events. Additional
claims may arise from the rejection of additional real estate leases and
executory contracts by the Company. Liabilities subject to compromise consist of
the following:

                                                                January
                                                                29, 2000
                                                          ---------------------
                                                             (in thousands)
        Senior Notes                                        $     95,000
        Accounts payable - Trade                                  32,005
        Accrued interest on senior notes                           5,672
        Reserve for lease rejection claims                         4,690
        Other liabilities                                          4,366
                                                          ---------------------
        Total liabilities subject to compromise             $    141,733
                                                          =====================

         Reorganization items included in the statements of operations include
the following:

                                                                January
                                                                29, 2000
                                                          ---------------------
                                                             (in thousands)
        Write off of assets at closed stores                $     10,118
        Professional fees                                          5,656
        Reserve for lease rejection claims                         4,690
        Proceeds from sale of leases                              (2,365)
        Other                                                      1,782
                                                          ---------------------
        Total reorganization costs                          $     19,881
                                                          =====================

6.   Property, Equipment and Leaseholds, Net

         Property, equipment and leaseholds are recorded at cost less
accumulated depreciation and amortization. The components of property, equipment
and leaseholds are as follows:

<TABLE>
<CAPTION>
                                                              Useful          January        January
                                                               Lives          29, 2000       30, 1999
                                                         ------------------------------------------------
                                                           (In years)             (In thousands)
<S>                                                            <C>           <C>            <C>
Building                                                         20          $    9,031     $   9,031
Furniture, fixtures and equipment                               3-8              49,714        51,505
Leasehold interests                                            5-29              39,277        46,781
Leasehold improvements                                         5-29              35,896        40,224
                                                                           ------------------------------
Total property, equipment and leaseholds                                        133,918       147,541
</TABLE>

                                       35
<PAGE>

<TABLE>
<CAPTION>
                                                              Useful          January        January
                                                               Lives          29, 2000       30, 1999
                                                         ------------------------------------------------
                                                           (In years)             (In thousands)

<S>                                                                          <C>            <C>
Accumulated depreciation and amortization                                       (77,899)      (76,079)
                                                                           ------------------------------
Property, equipment and leaseholds, net                                      $   56,019     $  71,462
                                                                           ==============================
</TABLE>

                                       36
<PAGE>

7.   Earnings Per Share

         The following table sets forth the computation of basic and diluted
loss per share:

<TABLE>
<CAPTION>
                                                                             Fiscal         Fiscal        Fiscal
                                                                              1999           1998          1997
                                                                          -----------------------------------------
<S>                                                                         <C>           <C>           <C>
 Numerator
 Net operating loss                                                         $ 33,468)     $ (4,588)     $ (15,672)
                                                                          -----------------------------------------
 Numerator for basic and diluted loss per share before
   extraordinary item
                                                                             (33,468)       (4,588)       (15,672)
 Extraordinary item                                                                -           560              -
                                                                          -----------------------------------------
 Numerator for basic and diluted loss per share after
   extraordinary item                                                       $(33,468)     $ (5,148)     $ (15,672)
                                                                          =========================================
 Denominator
 Denominator for basic loss per share--weighted average shares                 9,080         9,063          8,961
 Effect of dilutive securities:
    Employee stock options                                                         -             -              -
    Dilutive potential common shares                                               -             -              -
                                                                          -----------------------------------------
 Denominator for diluted  per share--adjusted weighted average
   shares and assumed conversions                                              9,080         9,063          8,961
                                                                          =========================================


 Basic & diluted loss per share before extraordinary item                   $  (3.69)     $  (0.51)     $   (1.75)
 Extraordinary item                                                                -         (0.06)             -
                                                                          -----------------------------------------
 Basic & diluted loss per share after extraordinary item                    $  (3.69)     $  (0.57)     $   (1.75)
                                                                          =========================================
</TABLE>

         Options to purchase 660,344, 985,574 and 858,179 shares of Common Stock
at an average price of $3.42, $3.63 and $7.63 per share were outstanding at
January 29, 2000, January 30, 1999 and January 31, 1998 respectively but were
not included in the computation of diluted loss per share because the effect
would have been antidilutive.

8.   Stockholders' Equity

         The Plan of Reorganization as filed with the Bankruptcy Court on March
24, 2000, and as amended on April 24, 2000, provides that holders of Common
Stock and holders of options to purchase Common Stock shall not be entitled to,
and shall not, receive any property or interest in property on account of their
shares of Common Stock and options to purchase Common Stock. If the Plan of
Reorganization is approved, the Company's unsecured creditors will receive all
of the Company's Common Stock.

                                       37
<PAGE>

9.   Stock Option Plans

         The following information pertains to the Company's stock option plans:

<TABLE>
<CAPTION>
         Fiscal year ended                 January 29, 2000            January 30, 1999            January 31, 1998
                                       ------------------------    ------------------------   ------------------------
                                                      Weighted                   Weighted                    Weighted
                                                       Average                    Average                    Average
                                                      Exercise                   Exercise                    Exercise
                                         Shares         Price        Shares       Price          Shares       Price
                                       --------------------------------------------------------------------------------
                                            (in thousands)              (in thousands)              (in thousands)
<S>                                       <C>            <C>         <C>            <C>           <C>          <C>
Outstanding options, beginning
 of year                                   985        $  3.63         858         $  7.63         875        $  7.00
Granted                                     16           1.29         362            3.40         147           8.58
Canceled                                  (339)          5.46        (182)          16.58         (38)         14.86
Exercised                                   (2)          1.07         (53)           1.07        (126)          1.18
                                       --------------------------------------------------------------------------------
Outstanding options, end of
 year                                      660        $  3.42         985         $  3.63         858        $  7.63
                                       ================================================================================
Options exercisable, end of
 year                                      451        $  4.50         476         $  4.99         474        $  4.59
                                       ================================================================================
Options available for future
 grant                                     559          N/A           230           N/A           423         N/A
                                       ================================================================================
</TABLE>

         Compensation expense is recorded in the period that options are earned.

         The 660,344 options outstanding at January 29, 2000, vest over a range
of two to five years from the date of grant provided the individuals remain in
the employ of the Company. Options are exercisable at a price ranging from $1.07
to $8.95. Options issued under the 1988 Stock Option Plan generally must be
exercised within five years from the date they are earned. Options issued under
the New Stock Option Plan and Director's Stock Option Plan must be exercised
prior to the tenth anniversary of the grant date.

         The Company has elected to follow APB 25 and related interpretations in
accounting for stock options and accordingly has recognized no compensation
expense. Had compensation cost been determined based upon the fair value at
grant date for awards consistent with the methodology prescribed by Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation,
the Company's net loss and diluted net loss per share would have increased by
$0.3 million or $0.03 per share for fiscal 1999, $1.0 million or $0.11 per share
for fiscal 1998, and $0.9 million or $0.10 per share for fiscal 1997.

         The fair value of these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following assumptions for
fiscal 1999, 1998, and 1997: risk-free interest rate of 6.3%, an expected life
of 3 to 7 years and a dividend yield of zero. For fiscal 1999, 1998, and 1997,
volatility was 182.6%, 96.7% and 85.8%, respectively. Any options granted in the
future will be subject to the fair value pro forma calculation. The pro forma
adjustments for 1999, 1998, and 1997 may not be indicative of future years.

                                       38
<PAGE>

10.   Commitments and Contingencies

         The Company is the lessee under various long-term operating leases for
store locations and equipment rentals for up to 29 years, including renewal
options. The leases typically provide for three five-year renewals that are
automatic unless the Company elects to terminate the lease. All leases are
subject to assumption or rejection as part of the chapter 11case. Rent expense
related to these leases amounted to $18.0 million, $18.4 million and $15.4
million for the fiscal years ended January 29, 2000, January 30, 1999, and
January 31, 1998, respectively.

         Future minimum payments under the now cancelable or negotiable
operating leases consisted of the following at January 29, 2000:

                                      (In thousands)

         2000                          $    14,846
         2001                               14,161
         2002                               13,051
         2003                               12,533
         2004                               11,948
         Thereafter                        106,850
                                    --------------------
         Total                         $   173,389
                                    ====================

         The Company is involved in litigation arising in the normal course of
business. In the opinion of management the expected outcome of litigation will
not have a material adverse effect on the Company's financial position.

11.  Charge for Store Closings

         During the second quarter of fiscal 1999, the Company implemented a
plan to close 14 underperforming stores. These closures were intended to improve
the Company's future profitability and liquidity. During the year ended January
29, 2000, certain of the leases of the closed stores were sold at a Bankruptcy
Court authorized auction. The net proceeds from the sales were $2.4 million. The
charge for store closings for the year ended January 29, 2000 consisted of :

                                                           (In thousands)

         Write-offs of property, plant and equipment             $10,118
         Lease rejection claims                                    4,690
         Proceeds from the sale of leases                         (2,365)
         Other expenses                                              466
                                                          -----------------
         Charge for store closings                               $12,909
                                                          =================

         During the fourth quarter of fiscal 1997, the Company implemented a
plan to close ten underperforming stores and, as a result, recorded a $5.7
million charge to continuing operations.

                                       39
<PAGE>

These closures were intended to improve the Company's liquidity and future
operating profitability. Net sales and store operating income (loss), including
certain specifically allocated charges, for these stores were $21.3 million and
$(0.8) million, respectively, in fiscal 1997.

         The charge for store closings consisted of write-offs of property,
plant and equipment, costs associated with net lease obligations and other
expenses of $2.1 million, $3.0 million and $0.6 million, respectively.

         Nine of the store closures were materially completed by the end of
March 1998. The tenth store closure was completed in the fourth quarter of
fiscal year 1998. For fiscal 1998, there was a charge to gross margin of $1.2
million for additional markdowns taken on the inventory at the closed stores. In
addition, the lease termination costs for the closed stores were less than
originally expected and this resulted in a credit for store closings of $1.2
million.

12.   Employee Benefit Plans

         In October 1996, the Company established a defined contribution
retirement savings plan (401 (k)) covering all eligible employees. The plan
allows participants to defer a portion of their annual compensation and receive
a matching employer contribution on a portion of that deferral. During fiscal
1999, 1998 and 1997, the Company recorded contributions of $199,000, $254,000
and $209,000, respectively, to the 401(k) plan.

13.   Subsequent Events

         In March 2000, the Company decided to close an additional eleven
underperforming stores, reducing the number of existing stores to 44. These
store closures are intended to improve the Company's liquidity and future
profitability. It is expected that the store closings will be completed by May
2000. No provision is included in the financial statements as the plan to close
the stores was approved after the balance sheet date. The charge to the gross
margin associated with the store closing, separate from the closing expenses, is
approximately $1.3 million. The expected store closing expenses are $7.2
million, consisting of (i) $4.0 million for the write-off of property, plant and
equipment, (ii) $2.7 million for costs associated with net lease obligations and
(iii) other expenses of $0.5 million.

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

         Set forth below are the names, ages and positions with the Company of
Director and Executive Officers of the Company as of date hereof. Upon
confirmation of the Plan of Reorganization, the Board of Directors of
Reorganized Loehmann's will initially consist of seven (7) members, five (5) of
whom shall

                                       40
<PAGE>
be designated by the Creditor's Committee and whose names shall be disclosed on
or before the date of the confirmation hearing; and two (2) of whom shall be
Robert Friedman and Robert Glass, who currently serve as Loehmann's Chairman and
Chief Executive Officer and President and Chief Operating Officer, respectively.

<TABLE>
<CAPTION>
Name                                       Age                         Position
----                                       ---                         --------
<S>                                        <C>      <C>
Robert N. Friedman (1)................     59       Chairman, Chief Executive Officer and Director
Robert Glass (1)......................     53       President,  Secretary, Chief Operating Officer, Chief Financial Officer
                                                    and Director
Jan Heppe.............................     48       Senior Vice President and Director of Stores
Linda Nash-Merker.....................     43       Senior Vice President Human Resources

Philip Kaplan.........................     69       Director
Christina A. Mohr (3).................     44       Director
Arthur E. Reiner (2)..................     59       Director
Lorrence T. Kellar (3)................     62       Director
</TABLE>

(1) Member of the Executive Committee.

(2) Member of the Compensation Committee.

(3) Member of the Audit Committee.

         Robert N. Friedman has been Chairman, Chief Executive Officer and a
Director of the Company since November 1995 and was President, Chief Executive
Officer and a Director of the Company from April 1992 to November 1995. Mr.
Friedman was President and Chief Executive Officer of Loehmann's Holdings, Inc.
a predecessor of the Company ("Holdings") from April 1992 until May 1996. Prior
to joining the Company, Mr. Friedman was employed by R.H. Macy Co., Inc. for 28
years in various capacities, including President and Vice Chairman,
Merchandising, at Macy's East from 1990-1992, Chairman and C.E.O. of Macy's
Bamberger Division and Chairman and C.E.O. of Macy's South/Bullocks. He serves
as a member of the Educational Foundation of The Fashion Institute of
Technology.

         Robert Glass has been a Director of the Company since February 1998 and
has served as President, Chief Operating Officer and Secretary since April 1998.
From September 1994 to March 1998, Mr. Glass served as Senior Vice President,
Chief Financial Officer, Treasurer and Assistant Secretary of the Company. From
1992 to 1994, Mr. Glass served as a retail consultant. Prior to that time, he
held a number of senior retail management positions, including Chief Financial
Officer and later President of Gold Circle Stores, a division of Federated
Department Stores, Inc., and Executive Vice President of Thrifty Drug from 1990
to 1992.

                                       41
<PAGE>

         Jan Heppe resigned from the company as of February 1, 2000. She was the
Senior Vice President and Director of Stores of the Company since September
1995. Prior to that time, she held a number of senior retail management
positions at John Wanamaker Department Store in Philadelphia, Pennsylvania and a
senior management retail position at Henri Bendel in 1991.

         Linda Nash-Merker resigned from the Company on May 1, 2000. She was
Senior Vice President of Human Resources from May 1998 to April 2000. From 1994
to 1998, she was Vice President of Human Resources. Prior to joining Loehmann's,
Linda spent eleven years at Macy's East where she held various human resources
positions including Vice President of Merchant Recruitment and Development and
Vice President - Human Resources Director for Herald Square.

         Philip Kaplan has been a Director of the Company since September 1988
and served as President, Chief Operating Officer, and Secretary of the Company
from November 1995 to March 1998. He was Chairman and Chief Operating Officer of
the Company from September to November 1995 and served as Chairman, Chief
Operating Officer, Secretary and Treasurer from September 1988 to September
1995. Mr. Kaplan was Vice Chairman, Treasurer and a Director Holdings, Inc. from
February 1987 until May 1996. Mr. Kaplan was president of Verdi International, a
manufacturer of luggage, from 1983 to 1987, Senior Vice President of Abraham and
Strauss, a division of Federated Department Stores, Inc., from 1979 until 1983
and Executive Vice President-Chief Financial Officer of E.J. Korvette's from
1971 until 1979.

         Lorrence T. Kellar has been a Director of the Company since September
1997. Mr. Kellar has been Vice President of Real Estate for the Kmart
Corporation since April 1996. Prior to that, Mr. Kellar had been Vice President
of Real Estate and Finance of The Kroger Co., a supermarket retailer, from 1988
to April 1996. He is a Director of Frisch's Restaurants, Multi-Color Corporation
and a Trustee of The Capital Trust, a mutual fund group.

         Christina A. Mohr has been a Director of the Company since September
1995 and was a director of Holdings from January 1994 until May 1996. Ms. Mohr
has been Managing Director at Salomon Smith Barney (formerly Salomon Brothers,
Inc.), an investment banking firm, since February 1997. Prior to that, Ms. Mohr
had been Managing Director, Banking Group of Lazard Freres & Co. LLC, an
investment banking firm, from 1990 to February 1997. She was a Vice President,
Banking Group, from 1984 to 1990. She is a Director of United Retail Group,
Inc., a retail chain.

         Arthur E. Reiner has been a Director of the Company since August 1996.
Mr. Reiner became Chairman of Finlay Enterprises, Inc. ("Enterprises") effective
February 1, 1999 and, from January 1995 to such date, served as Vice Chairman of
that company. Mr. Reiner has also served as President and Chief Executive
Officer of Enterprises since January 30, 1996 and as Chairman of the Board and
Chief Executive Officer of Finlay Fine Jewelry Corporation, Enterprise's wholly
owned subsidiary since January 3, 1995. Prior to joining Finlay, Mr. Reiner had
spent over 30 years with the Macy's organization. From February 1992 to October
1994, Mr. Reiner was Chairman and Chief Executive Officer of Macy's East, a
subsidiary of Macy's. From 1988 to 1992, Mr. Reiner was Chairman and Chief
Executive Officer of Macy's Northeast, which was combined with Macy's Atlanta
division to form Macy's East in 1992. Mr. Reiner was Chairman of the Educational
Foundation for the Fashion Institute of Technology from 1985 to 1995 and
currently is Vice Chairman.

                                       42
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                                                        Long Term
                                                                                        Compensation
                                                                                           Awards
                                                                        Other Annual     Securities       All Other
                                       Fiscal                           Compensation     Underlying    Compensation ($)
     Name and Principal Position        Year    Salary($)   Bonus($)        ($)         Options (#)          (1)
-----------------------------------------------------------------------------------------------------------------------
                                                 Annual Compensation
<S>                                     <C>        <C>        <C>           <C>           <C>               <C>
Robert N. Friedman...................   1999       628,400       --         (2)              --             2,500
Chairman and Chief                      1998       624,000       --         (2)              --             2,500
Executive Officer                       1997       575,000    550,000       (2)              --             2,406

Robert Glass.........................   1999       324,800       --         (2)              --             2,500
President, Chief Operating Officer,     1998       312,337       --         (2)           100,000           2,500
Chief Financial Officer and Secretary   1997       257,500     56,870       (2)              --             2,388

Jan Heppe (3)........................   1999       260,600     10,000       (2)              --             2,500
Senior Vice President and               1998       258,000     15,000       (2)              --             2,500
Director of Stores                      1997       240,000     50,000       (2)              --             2,400

Linda Nash-Merker (4)................   1999       230,000     70,000       (2)              --             2,500
Senior Vice President,                  1998       190,500     15,000       (2)              --             2,500
Human Resources                         1997       162,550     42,888       (2)              --             2,065
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)   Consists of (i) Company contributions in fiscal 1999 under the Loehmann's
      Inc. 401(k) Savings and Investment Plan of $2,500 for Mr. Friedman, $2,500
      for Mr. Glass, $2,500 for Ms. Heppe, $2,500 for Mrs. Nash-Merker; (ii)
      Company contributions in fiscal 1998 under the Loehmann's Inc. 401(k)
      Savings and Investment Plan of $2,500 for Mr. Friedman, $2,500 for Mr.
      Glass, $2,500 for Ms. Heppe, $2,500 for Mrs. Nash-Merker; (iii) Company
      contributions in fiscal 1997 under the Loehmann's 401(k) Savings and
      Investment Plan of $2,406 for Mr. Friedman, $2,388 for Mr. Glass, $2,400
      for Ms. Heppe, $2,065 for Mrs. Nash-Merker.

(2)   For each named executive officer, the aggregate amount of other annual
      compensation is less than the lesser of 10% of such officer's total salary
      and bonus for such year or $50,000.

(3)   Ms. Heppe resigned her position with the Company effective February 1,
      2000.

(4)   Linda Nash-Merker became an executive officer of the Company in May 1998.
      Mrs. Nash-Merker resigned her position with the Company effective May 1,
      2000.

         The following table sets forth information concerning the value of
unexercised options as of January 29, 2000 held by the executives named in the
Summary Compensation Table above.

                                       43
<PAGE>

                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                              Number of Securities
                               Shares                              Underlying                Value of Unexercised
                              Acquired         Value          Unexercised Options            In-the-Money Options
                             On Exercise     Realized        at Fiscal Year End (#)         at Fiscal year End ($)
Name                             (#)            ($)        Exercisable/Unexercisable     Exercisable/Unexercisable(1)
-----------------------------------------------------------------------------------------------------------------------
<S>                              <C>            <C>          <C>             <C>                 <C>             <C>
Robert N. Friedman               ---            ---          306,227            ---              ---             ---
Robert Glass                     ---            ---           42,875         79,469              ---             ---
Jan Heppe                        ---            ---            6,703         24,469              ---             ---
Linda Nash-Merker                ---            ---            2,680         11,788              ---             ---
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Based on a stock price at January 29, 2000 of $0.22

Employment and Severance Agreements

Mr. Friedman

         Mr. Friedman's employment agreement, as amended (the "Friedman
Agreement"), provides that he will serve as Chairman and Chief Executive Officer
of the Company from February 1, 1999 through January 31, 2001, subject to
automatic successive one-year extensions unless either party provides the other
party with at least 30 days prior written notice that it does not wish to extend
the Period of Employment (as defined in the Friedman Agreement), provided that
the Period of Employment shall continue in effect at least until the later of
(x) January 31, 2001 and (y) 12 months following notice by the Company of its
election not to extend the Period of Employment, for an annual base salary of
not less than $550,000 for fiscal 1996, $575,000 for fiscal 1997 and $600,000
for fiscal 1998, fiscal 1999 and fiscal 2000. Mr. Friedman is also eligible to
receive an annual bonus equal to 100% of his base salary in effect for each of
fiscal 1996 and fiscal 1997 and 60% of his base salary in effect for fiscal
1998, fiscal 1999, and fiscal 2000 if, for each such fiscal year, the Company
attains its targeted financial goals (as defined by the Compensation Committee).
The Friedman Agreement also provides for certain insurance and other benefits to
be maintained and paid by the Company.

         The Friedman Agreement provides that if Mr. Friedman's employment is
terminated by the Company without Cause or by Mr. Friedman with Good Reason (as
such terms are defined in the Friedman Agreement), the Company will be required
to pay his base salary then in effect for the greater of 12 months following his
termination or the remainder of his term of employment. Mr. Friedman will also
be entitled to receive any bonus earned with respect to any previously completed
fiscal year which remains unpaid as of the date of termination. If Mr.
Friedman's employment is terminated, either by the Company or by Mr. Friedman
for Good Reason, coincident with or within one-year after a Change of Control
(as defined in the Friedman Agreement), the Company will be required to pay Mr.
Friedman a lump sum, in cash, equal to two times his base salary then in effect
and all unvested options will vest in full. If Mr. Friedman's

                                       44
<PAGE>

employment is terminated by the Company without Cause, Mr. Friedman for Good
Reason or as a result of a Change of Control, the Company also, with certain
exceptions, will be required to continue to maintain life insurance for Mr.
Friedman for the remainder of his life or until he attains the age of 70 with a
death benefit equal to his base salary at the date of termination and medical
insurance for Mr. Friedman and his spouse until their respective deaths. The
Company also will be required to maintain life insurance for Mr. Friedman and
medical insurance for Mr. Friedman and his spouse, as described in the foregoing
sentence, upon Mr. Friedman's retirement or voluntary termination from the
Company after the period of employment provided for in the Friedman Agreement.

         The Friedman Agreement provides that the Company has certain rights to
purchase shares of the Common Stock and/or vested options held by Mr. Friedman
upon termination of his employment. Finally, the Friedman Agreement provides
that Mr. Friedman will not, with certain exceptions, "engage or be engaged in a
competing business" (as defined in the Friedman Agreement) for a period of two
years following termination of his employment (unless he is terminated without
Cause or he resigns with Good Reason).

Mr. Glass

         Mr. Glass's employment agreement (the "Glass Agreement") provides that
he will serve as President and Chief Operating Officer of the Company from April
1, 1998 through March 31, 2000. In accordance with its terms, the Glass
Agreement has been automatically renewed for a one year term at an annual base
salary of $320,000. The annual base salary shall be reviewed each April 1 except
that no such review shall result in any reduction of the annual base salary then
in effect. Mr. Glass also is eligible to receive an annual bonus equal to 60% of
his annual base salary in effect, if, for each such fiscal year, the Company
attains its targeted financial goals (as defined by the Compensation Committee).
In addition, the bonus percentage can increase if the Company exceeds
achievement of certain financial goals (as defined by the Compensation
Committee). The Glass Agreement also provides for certain insurance and other
benefits to be maintained and paid by the Company.

                                       45
<PAGE>

         The Glass Agreement provides that if Mr. Glass's employment is
terminated by the Company without cause or by Mr. Glass with Good Reason (as
such terms are defined in the Glass Agreement), the Company will be required to
pay his base salary then in effect for the greater of 12 months following his
termination or the remainder of his term of employment. Mr. Glass will also be
entitled to receive any bonus earned with respect to any previously completed
fiscal year which remains unpaid as of the date of termination. If Mr. Glass's
employment is terminated, either by the Company or by Mr. Glass for Good Reason,
coincident with or within one-year after a Change of Control, the Company will
be required to pay Mr. Glass a lump sum, in cash, equal to two times his base
salary then in effect and all unvested options will vest in full. If Mr. Glass's
employment is terminated by the Company without Cause, Mr. Glass for Good Reason
or as a result of a Change of Control, the Company also, with certain
exceptions, will be required to continue to maintain life insurance for Mr.
Glass for the remainder of his life or until he attains the age of 70 with a
death benefit equal to his base salary at the date of termination and medical
insurance for Mr. Glass and his spouse until their respective deaths. The
Company will also be required to maintain life insurance for Mr. Glass and
medical insurance for Mr. Glass and his spouse, as described in the foregoing
sentence, upon Mr. Glass's retirement or voluntary termination from the Company
after the period of employment provided for in the Glass Agreement.

         The Glass Agreement provides that if Mr. Glass's employment is
terminated for any reason, Mr. Glass will not for a period of two years
following termination of his employment directly or indirectly (i) solicit or
encourage any member of senior management to leave the employment of the Company
or (ii) hire any member of senior management who was an employee of the Company
during Mr. Glass's employment under the Glass Agreement or the two year period
after Mr. Glass's employment is terminated.

Compensation of Members of the Board of Directors

         For serving as a director of the Company, each non-employee director
receives, $15,000 per year, $1,000 per Board of Directors meeting attended in
person, $500 per Board of Directors meeting attended by telephone, and $500 per
Board of Directors committee meeting attended. Certain directors who are not
employees of the Company will be entitled to receive benefits under the
directors stock option plan (the "Directors Stock Option Plan") and all
directors of the Company will be entitled to receive benefits under the
Directors Deferred Compensation Plan. Under the terms of the Directors Stock
Option Plan, each person, who is not an employee of the Company, and who is
first elected, appointed or otherwise first becomes a director (an "Eligible
Director") will be granted an option to purchase 6,000 shares of Common Stock as
of the date on which such person first becomes an Eligible Director (an "Initial
Option"). Each person who was an Eligible Director as of the effective date of
the plan was granted an option to purchase 6,000 shares of Common Stock (the
"Special Option"). Each person who is an Eligible Director on February 1st of
each year will receive an option to purchase 3,000 shares of Common Stock (an
"Annual Option"). The Directors Stock Option Plan also provides that the Board
of Directors shall have discretionary authority to award options to acquire up
to an aggregate of 100,000 shares of Common Stock to one or more Eligible
Directors ("Discretionary Options"). All options granted under the Directors
Stock Option Plan are "nonqualified" stock options subject to the provisions of
Section 83 of the Internal Revenue Code of 1986, as amended.

         Each Initial Option and Special Option vests and becomes exercisable in
1/3 increments on each of the first, second and third anniversaries of the date
of grant; provided that the Eligible Director is in the service of the Company
as a director on such date. Each Annual Option vests and becomes exercisable in
full on the one year anniversary of the date of grant, provided that the
Eligible Director is in the service of the Company as a director on such date.
In the event of the termination of the Eligible Director's service as a director
prior to the time all or any portion or an Initial Option, a Special Option, or
an Annual Option vests, such option, to the extent not yet vested, terminates.
Discretionary Options are subject to vesting conditions established by the Board
of Directors and provided in a separate award agreement evidencing the award of
such Discretionary Option. Any unexercised portion of an option automatically
becomes null and void at the time of the earliest to occur of (i) the expiration
of 10 years from the grant date and (ii) the expiration of one year from the
date the Eligible Director's service terminates. The Directors Stock Option Plan
provides that the option exercise price for the options shall be the "fair
market value" (as defined in the Directors Stock Option Plan) of the Common
Stock on the date of grant.

         Holders of Loehmann's Stock Options (and other instruments evidencing
ownership in Loehmann's) will receive no distributions under the Plan of
Reorganization and such instruments will be canceled.

                                       46
<PAGE>

         In addition, the Company has a consulting agreement with Mr. Kaplan.
Mr. Kaplan will act as a director and consultant to the Company. Under the
agreement, he is paid a retainer of $75,000 per year and is entitled to a
$15,000 per year auto allowance. This consulting agreement became effective in
April 1998 and extends for a five-year period.

Compensation Committee Interlocks and Insider Participation

         During fiscal 1999, Mr. Reiner served as the member of the Compensation
Committee of the Board of Directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information as of April 20, 2000
with respect to beneficial ownership of shares of the Common Stock by (i) all
stockholders known by the Company to be beneficial owners of more than 5% of
such class, (ii) each director, (iii) each executive officer named in the
Summary Compensation Table and (iv) all directors and executive officers as a
group. Unless otherwise indicated in the notes below, the address of each
beneficial owner is in care of Loehmann's, Inc., 2500 Halsey Street, Bronx, New
York 10461.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------

Name and Address of Beneficial Owner                                     Shares of Common Stock     Percentage
------------------------------------                                     ----------------------     ----------
------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                <C>
Sprout Capital V(1)..................................................                   200,779           2.2%
Sprout Growth, L.P.(1)...............................................                   242,769           2.7%
Sprout Growth, Ltd.(1)...............................................                    27,025              *
DLJ Venture Capital Fund II, L.P.(1).................................                    12,065              *
Donaldson, Lufkin & Jenrette Securities Corporation(1)...............                   126,161           1.4%
Rosenberg (U.S.)(1)..................................................                   326,000           3.6%
J&W Seligman & Co. Incorporated(2)...................................                 1,288,160          14.2%
Robert Friedman(3)...................................................                   306,227           3.3%
Robert Glass(4)......................................................                    42,875              *
Jan Heppe(5).........................................................                     6,703              *
Linda Nash-Merker(6).................................................                     2,680              *
Philip Kaplan(7).....................................................                   112,174           1.2%
Lorrence T. Kellar(8)................................................                    13,000              *
Christina A. Mohr(9).................................................                    10,000              *
Arthur E. Reiner(9)..................................................                    10,000              *
All directors and executive officers as a group (9 persons)(10)......                   480,659           5.1%
------------------------------------------------------------------------------------------------------------------
</TABLE>
   *Less than 1%

                                       47
<PAGE>

(1)  Based in part upon information provided in a Schedule 13G filed with the
     Commission. Sprout Capital V, Sprout Growth, L.P., Sprout Growth, Ltd., DLJ
     Venture Capital II, L.P., Rosenberg, Donaldson, Lufkin & Jenrette
     Securities Corporation ("DLJ" and, collectively with the other entities
     named above, the "Sprout Group") are all affiliates. The business address
     of all such Sprout Group entities is 277 Park Avenue, New York, New York
     10172. Because of their direct and indirect ownership of a majority of the
     capital stock of DLJ, AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie
     Mutuelle, Alpha Assurances I.A.R.D. Mutuelle, Alpha Assurances Vie
     Mutuelle, AXA Courtage Assurance Mutuelle, AXA Alliance Capital Management
     L.P. and The Equitable Companies Incorporated may be deemed to beneficially
     own all of the shares of Common Stock beneficially owned by the Sprout
     Group. The business address of Alpha Assurances I.A.R.D. Mutuelle and Alpha
     Assurances Vie Mutuelle is 100-101 Terrasse Boieldien, 92042 Paris La
     Defense France. The business address of AXA Assurances I.A.R.D. Mutuelle
     and AXA Assurances Vie Mutuelle is 21, rue de Chateaudun, 75009 Paris
     France. The business address of AXA Courtage Assurance Mutuelle is 26, rue
     Louis le Grand, 75002 Paris France. The business address of AXA is 23,
     avenue Matignon, 75008 Paris France. The business address of The Equitable
     Companies Incorporated is 787 Seventh Avenue, New York, New York 10019. The
     business address of Alliance Capital Management L.P. is 1345 Avenue of the
     Americas, New York, New York 10105.

(2)  Based upon information provided in a Schedule 13G filed with the
     Commission. The holdings of J.&W. Seligman & Co. Incorporated ("JWS")
     include all shares of Common Stock beneficially owned by Seligman Value
     Fund Series, Inc. - Seligman Small-Cap Value Fund (the "Fund"). JWS, as
     investment adviser for the Fund, may be deemed to beneficially own the
     shares of the Fund. Accordingly, the shares owned by JWS include those
     shares owned by the Fund. In addition, William C. Morris, as the owner of a
     majority of the outstanding voting securities of JWS, may be deemed to
     beneficially own the shares reported herein by JWS. The business address of
     JWS, the Fund and William C. Morris is 100 Park Avenue, New York, NY 10017.

(3)  Includes options to purchase 306,227 shares of Common Stock which are
     exercisable within sixty (60) days of the date hereof.

(4)  Includes options to purchase 42,875 shares of Common Stock which are
     exercisable within sixty (60) days of the date hereof. Does not include
     options to purchase 79,469 shares of Common Stock which are not exercisable
     in sixty (60) days of the date hereof.

(5)  Includes options to purchase 6,703 shares of Common Stock which are
     exercisable within sixty (60) days of the date hereof. Does not include
     options to purchase 24,469 shares of Common Stock which are not exercisable
     in sixty (60) days of the date hereof.

(6)  Includes options to purchase 2,680 shares of Common Stock which are
     exercisable within sixty (60) days of the date hereof. Does not include
     options to purchase 11,788 shares of Common Stock which are not exercisable
     in sixty (60) days of the date hereof.

(7)  Includes options to purchase 52,041 shares of Common Stock which are
     exercisable within sixty (60) days of the date hereof. Include 60,133
     shares owned.

(8)  Includes options to purchase 10,000 shares of Common Stock which are
     exercisable within sixty (60) days of the date hereof. Include 3,000 shares
     owned. Does not include options to purchase 2,000 shares of Common Stock
     which are not exercisable in sixty (60) days of the date hereof.

(9)  Includes options to purchase 10,000 shares of Common Stock which are
     exercisable within sixty (60) days of the date hereof. Does not include
     options to purchase 2,000 shares of Common Stock which are not exercisable
     in sixty (60) days of the date hereof.

(10) Includes options to purchase 417,526 shares of Common Stock which are
     exercisable within sixty (60) days of the date hereof. Does not include
     options to purchase 159,726 shares of Common Stock which are not
     exercisable in sixty (60) days of the date hereof. Includes 63,133 shares
     owned.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Agreements Between the Company and Bigio Group, LLC

         During the 1999 fiscal year, the Company purchased $519,000 of
merchandise for resale from the Bigio Group, LLC ("Bigio"). Robert N. Friedman,
who is Chairman and Chief Executive Officer and a director of the Company, is
married to Deborah Friedman who is the owner and a principal of Bigio. Mr.
Friedman has an interest in these transactions as a result of his relationship
with Deborah Friedman.

PART IV.

                                       48
<PAGE>

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

(a)  Documents filed as part of the report.

          (1)  List of Financial Statements

          Report of Independent Auditors
          Balance Sheets
          Statements of Operations

          Statements of Changes in Common Stockholders' Equity (Deficit)
          Statements of Cash Flows
          Notes to Financial Statements

          (2)  List of Financial Statement Schedules

          Schedule II, Valuation and Qualifying Accounts Other schedules are
          omitted because they are either not applicable or the required
          information is shown in the financial statements or notes thereto.

          (3)  List of Exhibits

               2.1  Plan of Reorganization of Loehmann's Inc.*

               2.2  Disclosure Statement of Loehmann's Inc. regarding its Plan
                    of Reorganization.*

               3.1  Amended and Restated Certificate of Incorporation of
                    Loehmann's, Inc., filed as Exhibit 3.1 to Loehmann's, Inc.'s
                    Registration Statement on Form S-1 (Registration No.
                    33-97100) and incorporated hereby by reference.

               3.2  By-Laws of Loehmann's, Inc., filed as Exhibit 3.2 to
                    Loehmann's, Inc.'s Registration Statement on Form S-1
                    (Registration No. 33-97100) and incorporated herein by
                    reference.

               4.1  11 7/8% Senior Note Indenture, dated as of May 10, 1996,
                    between Loehmann's, Inc. and United States Trust Company of
                    New York, as Trustee, filed as Exhibit 4.1 to Loehmann's,
                    Inc.'s Quarterly Report on Form 10-Q for the quarterly
                    period ended May 4, 1996 (Comm. File No. 0-28410), and
                    incorporated herein by reference.

               4.2  A letter from Loehmann's, Inc. to the Securities and
                    Exchange Commission agreeing to furnish copies of certain
                    debt instruments.*

               4.3  Agreement between Loehmann's Inc. and Congress Financial
                    Corporation, dated as of May 12, 1998, filed as Exhibit 4.1
                    to Loehmann's Inc.'s Quarterly Report on Form 10-Q for the
                    quarterly period ended May 2, 1998 (Comm. File No. 0-28410),
                    and incorporated herein by reference.

                                       49
<PAGE>

               4.4  Agreement between Loehmann's Inc. and Fleet Bank, N.A.,
                    dated as of May 12, 1998, filed as Exhibit 4.2 to Loehmann's
                    Inc.'s Quarterly Report on Form 10-Q for the quarterly
                    period ended May 2, 1998 (Comm. File No. 0-28410), and
                    incorporated herein by reference.

              10.1  Lease Agreement between the New York City Industrial
                    Development Agency and Loehmann's, Inc. dated as of December
                    1, 1983, filed as Exhibit 10.3 to Loehmann's Holdings,
                    Inc.'s Registration Statement on Form S-1 (Registration No.
                    33-25718) and incorporated herein by reference.

              10.2  Agreement among Loehmann's Holdings, Inc., Loehmann's, Inc.
                    and Robert N. Friedman dated as of November 1, 1995, filed
                    as Exhibit 10.11 to Loehmann's Holdings, Inc.'s Registration
                    Statement on Form S-1 (Registration No. 33-97100) and
                    incorporated herein by reference.

              10.3  Amendment No. 1 to Employment Agreement among Loehmann's
                    Holdings, Inc., Loehmann's, Inc. and Robert N. Friedman
                    dated as of April 5, 1996, filed as Exhibit 10.12 to
                    Loehmann's Holdings, Inc.'s Registration Statement on Form
                    S-1 (Registration No. 33-97100) and incorporated herein by
                    reference.

              10.4  Compensation/Consultation Agreement between Loehmann's
                    Holdings, Inc. and Norman Matthews, filed as Exhibit 10.8 to
                    Loehmann's Holdings, Inc.'s Registration Statement on Form
                    S-1 (Registration No. 33-25718) and incorporated herein by
                    reference.

              10.5  Loehmann's, Inc. Amended and Restated Deferred Profit
                    Sharing Plan, effective January 31, 1993, filed as Exhibit
                    10.15 to Loehmann's Holdings, Inc.'s Registration Statement
                    on Form S-1 (Registration No. 33-97100) and incorporated
                    herein by reference.

              10.6  Loehmann's Holdings, Inc. 1988 Stock Option Plan, filed as
                    Exhibit 10.10 to Loehmann's Holdings, Inc.'s Registration
                    Statement on Form S-1 (Registration No. 33-25718) and
                    incorporated herein by reference.

              10.7  Non-Qualified Stock Option Agreement dated September 30,
                    1988 between Loehmann's Holdings, Inc. and Philip Kaplan,
                    filed as Exhibit 10.11 to Loehmann's Holdings, Inc.'s
                    Registration Statement on Form S-1 (Registration No.
                    33-25718) and incorporated herein by reference.

                                       50
<PAGE>

              10.8  Loehmann's, Inc. New Stock Incentive Plan, filed as Exhibit
                    10.18 to Loehmann's, Inc.'s Registration Statement on Form
                    S-1 (Registration No. 33-97100) and incorporated herein by
                    reference.

              10.9  Executive Incentive Compensation Plan, filed as Exhibit
                    10.13 to Loehmann's Holdings, Inc.'s Registration Statement
                    on Form S-1 (Registration No. 33-25718) and incorporated
                    herein by reference.

              10.10 Non-Qualified Stock Option Agreement dated as of December
                    10, 1993 between Loehmann's Holdings, Inc. and Norman S.
                    Matthews, filed as Exhibit 10.15 to Loehmann's Holdings,
                    Inc.'s Registration Statement on Form S-4 (Registration No.
                    33-71922) and incorporated herein by reference.

              10.11 Employment Agreement between Loehmann's, Inc. and Robert
                    Glass, dated as of February 27, 1998, filed as Exhibit 10.14
                    to Loehmann's, Inc.'s Annual Report on Form 10-K for the
                    year ended January 31, 1998 (Comm. File NO. 0-24810), and
                    incorporated herein by reference.

              10.12 Consulting Agreement between Loehmann's, Inc. and Philip
                    Kaplan, dated as of April 3, 1998, filed as Exhibit 10.15 to
                    Loehmann's, Inc.'s Annual Report on Form 10-K for the year
                    ended January 31, 1998 (Comm. File NO. 0-24810), and
                    incorporated herein by reference.

              10.13 Severance Agreement between Loehmann's, Inc. and Bonnie
                    Dexter-Wolterstorff, dated January 9, 1998, filed as Exhibit
                    10.17 to Loehmann's, Inc.'s Annual Report on Form 10-K for
                    the year ended January 31, 1998 (Comm. File NO. 0-24810),
                    and incorporated herein by reference.

              10.14 Form of Agency Agreement between Loehmann's, Inc. and a
                    joint venture of Gordon Brothers Retail Partners, LLC and
                    The Ozer Group, LLC, dated February 27, 1998 filed as
                    Exhibit 10.17 to Loehmann's, Inc.'s Annual Report on Form
                    10-K for the year ended January 31, 1998 (Comm. File NO.
                    0-24810), and incorporated herein by reference.

              10.15 Ratification and Amendment Agreement, dated as of May 19,
                    1999, by and between Loehmann's, Inc. as Debtor and
                    Debtor-In-Possession in a case pending under chapter 11 of
                    the Bankruptcy Code, and Congress Financial Corporation,
                    filed as Exhibit 10.1 to Loehmann's Inc.'s Quarterly Report
                    on Form 10-Q for the quarter ended May 1, 1999 (Comm. File
                    NO. 0-24810), and incorporated herein by reference.

              10.16 Lease Agreement, dated October 6, 1998, by And between
                    Maurice M. Weill, Trustee for Rutherford Property and
                    Loehmann's, Inc.*

                                       51
<PAGE>

              23    Consent of Independent Auditors.*

              24    Powers of Attorney (included on signature page of this
                    10-K).*

              27    Financial Data Schedule*

(b)  Reports on Form 8-K

     None filed in the fourth quarter.

--------------
*    Filed herewith

                                       52
<PAGE>

                                                                     SCHEDULE II

                                LOEHMANN'S, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)
<TABLE>
<CAPTION>
           Column A                 Column B             Column C            Column D       Column E

                                                        Additions
                                                        ---------

                                   Balance at    Charged to    Charged to                   Balance at
                                   Beginning      Cost and        Other                       end of
          Description              of Period      Expense       Accounts     Deductions       Period
<S>                                <C>            <C>               <C>      <C>              <C>
  Year ended January 29, 2000
  ---------------------------
  Reserve for Store Closings             $307        $1,237            $0      $1,544(a)             $0
                                         ====        ======            ==      ======                ==

  Year ended January 30, 1999
  ---------------------------
  Reserve for Store Closings           $7,130             0             0      $6,823(a)           $307
                                       ======             =             =      ======              ====

  Year ended January 31, 1998
  ---------------------------
  Reserve for Store Closings              $10        $7,190            $0         $70(a)         $7,130
                                          ===        ======            ==         ===            ======
--------------------------------------------------------------------------------------------------------
</TABLE>
     (a) Payments for leasehold obligation expenses and other store closing
         expenses.

                                       53
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to its
Annual Report on Form 10-K to be signed on its behalf by the undersigned
thereunto duly authorized.

                                         LOEHMANN'S, INC.

         Dated: May 11, 2000             By: /s/ Robert Glass
                                         ---------------------------------------
                                         Robert Glass, President, Chief
                                         Operating Officer, Chief Financial
                                         Officer, Secretary and Director

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert N. Friedman and Robert Glass, such
person's true and lawful attorney-in-fact and agents, with full power of
substitution and revocation, for such person and in such person's name, place
and stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to this report filed pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and to
file the same with all exhibits thereto, and the other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and things requisite and necessary to be done, as
fully to all intents and purposes as such person might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.

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

<TABLE>
<CAPTION>
Signature                          Title                                               Date
---------                          -----                                               ----
<S>                                <C>                                                 <C>
/s/ Robert N. Friedman             Chairman, Chief Executive Officer and Director      May 11, 2000
-----------------------
Robert N. Friedman

/s/ Robert Glass                   President, Chief Operating Officer, Chief           May 11, 2000
-----------------------            Financial Officer and Director
Robert Glass

/s/ Philip Kaplan                  Director                                            May 11, 2000
-----------------------
Philip Kaplan

/s/ Lorrence T. Kellar             Director                                            May 11, 2000
-----------------------
Lorrence T. Kellar

/s/ Christina A. Mohr              Director                                            May 11, 2000
-----------------------
Christina A. Mohr
</TABLE>

                                       54
<PAGE>
<TABLE>
<CAPTION>
<S>                                <C>                                                 <C>
/s/ Arthur E. Reiner               Director                                            May 11, 2000
-----------------------
Arthur E. Reiner
</TABLE>

                                       55