<PAGE>

                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549


         [ x ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended    October 28, 2000

Commission file number  333-42423



                            J. CREW OPERATING CORP.
             (Exact name of registrant as specified in its charter)

          Delaware                                 22-3540930
     (State or other jurisdiction               (I.R.S. Employer
   of incorporation or organization)            Identification No.)


                    770 Broadway, New York, New York  10003
                    (Address of principal executive offices)
                                   (Zip code)

                                 (212) 209-2500
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.  Yes  x  No
                                        ----   ----

As of November 25, 2000 there were outstanding 100 shares of Common Stock, par
value $.01 per share.

The registrant meets the conditions set forth in General Instruction H(1) (a)
and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format.
<PAGE>

                         Part I - Financial Information

Item I. Financial Statements

                          J. CREW OPERATING CORP. AND
                                  SUBSIDIARIES

                     Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                      October 28,                  January 29,
                        Assets                           2000                         2000
                        ------                           ----                         -----
                                                       (unaudited)
                                                                   (in thousands)
<S>                                                   <C>                          <C>
Current assets:
 Cash and cash equivalents                               $ 21,737                     $ 38,693
 Merchandise inventories                                  164,623                      129,928
 Prepaid expenses and other current assets                 26,459                       30,083
 Net assets held for disposal                               4,741                        8,927
                                                         --------                     --------

  Total current assets                                    217,560                      207,631

Property and equipment - at cost                          252,295                      216,083
    Less accumulated depreciation and amortization        (94,468)                     (77,683)
                                                         --------                     --------
                                                          157,827                      138,400
                                                         --------                     --------

Deferred income tax assets                                  6,817                        6,817
Other assets                                                9,575                       10,758
                                                         --------                     --------
   Total assets                                          $391,779                     $363,606
                                                         ========                     ========

      Liabilities and Stockholder's Deficit
      -------------------------------------

Current liabilities:
 Notes payable - bank                                    $ 32,000                     $     --
 Accounts payable and other current liabilities           106,746                      111,173
 Federal and state income taxes                            12,139                       15,956
 Deferred income tax liabilities                            5,842                        5,842
                                                         --------                     --------

   Total current liabilities                              156,727                      132,971
                                                         --------                     --------

Long-term debt                                            180,000                      184,000
                                                         --------                     --------

Deferred credits and other long-term liabilities           56,085                       48,277
                                                         --------                     --------

Due to J.Crew Group, Inc.                                     890                          903
                                                         --------                     --------

Stockholder's deficit                                      (1,923)                      (2,545)
                                                         --------                     --------

      Total liabilities and stockholder's deficit      $  391,779                  $   363,606
                                                       ==========                  ===========
</TABLE>




See notes to unaudited condensed consolidated financial statements.

                                       2
<PAGE>

                          J. CREW OPERATING CORP. AND
                                  SUBSIDIARIES

                Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
                                                                    Thirty-nine weeks ended
                                                           October 28,                 October 30,
                                                           ------------                ------------
                                                                2000                       1999
                                                                ----                       ----
                                                                         (unaudited)
                                                                        (in thousands)
<S>                                                        <C>                         <C>
Revenues:

 Net sales                                                    $514,231                    $464,006
 Other                                                           2,169                       2,083
                                                              --------                    --------
                                                               516,400                     466,089

Cost of goods sold including buying and occupancy costs        280,800                     262,346

Selling, general and administrative expenses                   217,504                     197,469
                                                              --------                    --------

  Income from operations                                        18,096                       6,274

Interest expense - net                                         (17,054)                    (19,656)
                                                              --------                    --------

  Income/(loss) before income taxes                              1,042                     (13,382)

Income taxes                                                      (420)                      5,460
                                                              --------                    --------

  Net income/(loss)                                           $    622                      (7,922)
                                                              ========                    ========

</TABLE>



See notes to unaudited condensed consolidated financial statements.

                                       3
<PAGE>

                          J. CREW OPERATING CORP. AND
                                  SUBSIDIARIES

                Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
                                                                      Thirteen weeks ended
                                                           October 28,                     October 30,
                                                           ------------                   --------------
                                                               2000                             1999
                                                               ----                             ----
                                                                           (unaudited)
                                                                          (in thousands)
<S>                                                        <C>                            <C>
Revenues:

 Net sales                                                    $193,971                         $173,714
 Other                                                             796                              690
                                                              --------                         --------
                                                               194,767                          174,404

Cost of goods sold including buying and occupancy costs        104,000                           96,065

Selling, general and administrative expenses                    73,851                           66,319
                                                              --------                         --------

   Income from operations                                       16,916                           12,020

Interest expense - net                                          (5,740)                          (6,837)
                                                              --------                         --------

  Income before income taxes                                    11,176                            5,183

Income taxes                                                    (4,520)                          (2,125)
                                                              --------                         --------

   Net income                                                 $  6,656                         $  3,058
                                                              ========                         ========
</TABLE>










See notes to unaudited condensed consolidated financial statements.

                                       4
<PAGE>

                          J. CREW OPERATING CORP. AND
                                  SUBSIDIARIES

                Condensed Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                         Thirty-nine weeks ended
                                                                         -----------------------

                                                                  October 28,                 October 30,
                                                                  -----------                 -----------
                                                                      2000                        1999
                                                                      ----                        ----
                                                                                (unaudited)
                                                                              (in thousands)
<S>                                                               <C>                         <C>
CASH FLOW FROM OPERATING ACTIVITIES:

Net income/(loss)                                                    $    622                    $ (7,922)

Adjustments to reconcile net income/(loss) to net cash used in
operating activities:
  Depreciation and amortization                                        15,993                      12,917
  Writeoff of software development costs                                   --                         750
  Amortization of deferred financing costs                              1,471                       1,461

Changes in operating assets and liabilities:

  Merchandise inventories                                             (34,695)                     (4,078)
  Prepaid expenses and other current assets                             3,624                        (489)
  Other assets                                                           (398)                       (861)
  Net assets held for disposal                                          4,186                       1,960
  Accounts payable and other liabilities                               (4,158)                     (6,420)
  Federal and state income taxes                                       (3,817)                      2,212
                                                                     --------                    --------

  Net cash used in operating activities                               (17,172)                       (460)
                                                                     --------                    --------

CASH FLOW FROM INVESTING ACTIVITIES:

  Capital expenditures                                                (39,560)                    (35,831)
  Proceeds from construction allowances                                11,776                       6,881
                                                                     --------                    --------

  Net cash used in investing activities                               (27,784)                    (28,950)
                                                                     --------                    --------

CASH FLOW FROM FINANCING ACTIVITIES:

  Increase in notes payable, bank                                      32,000                      39,000
  Repayment of long-term debt                                          (4,000)                         --
                                                                     --------                    --------

  Net cash provided by financing activities                            28,000                      39,000
                                                                     --------                    --------

(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS                      (16,956)                      9,590

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                        38,693                       9,643
                                                                     --------                    --------

CASH AND CASH EQUIVALENTS - END OF PERIOD                            $ 21,737                    $ 19,233
                                                                     ========                    ========
</TABLE>



See notes to unaudited condensed consolidated financial statements.

                                       5
<PAGE>

                    J.CREW OPERATING CORP. AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

   Thirteen and thirty-nine weeks ended October 28, 2000 and October 30, 1999

1.  Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements
     include the accounts of J. Crew Operating Corp. and its wholly-owned
     subsidiaries (collectively, the "Company"). All significant intercompany
     balances and transactions have been eliminated in consolidation.

     The condensed consolidated balance sheet as of October 28, 2000 and the
     condensed consolidated statements of operations and cash flows for the
     thirteen and thirty-nine week periods ended October 28, 2000 and October
     30, 1999 have been prepared by the Company and have not been audited.  In
     the opinion of management, all adjustments, consisting of only normal
     recurring adjustments necessary for the fair presentation of the financial
     position of the Company, the results of its operations and cash flows have
     been made.

     Certain information and footnote disclosure normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted.  These financial statements
     should be read in conjunction with the financial statements and notes
     thereto included in the Company's consolidated financial statements for the
     fiscal year ended January 29, 2000.

     The revenues and expenses of the discontinued Clifford and Wills catalog
     and outlet store operations for the thirteen and thirty-nine week period
     ended October 28, 2000 and October 30, 1999 were not material and, as a
     result, have been netted in the accompanying consolidated statement of
     operations.  In February 2000 the Company sold certain intellectual
     property assets of Clifford and Wills, Inc. to Spiegel Catalog, Inc. for
     $3.9 million.  In connection with this sale, the Company agreed to cease
     the fulfillment of catalog orders but retained the right to operate its
     outlet stores and conduct other liquidation sales of inventories through
     December 31, 2000.

     The results of operations for the thirty-nine week period ended October 28,
     2000 are not necessarily indicative of the operating results for the full
     fiscal year.

                                       6
<PAGE>

Forward-looking statements

Certain statements in this Report on Form 10-Q constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.  We may also make written or oral forward-looking statements in our
periodic reports to the Securities and Exchange Commission on Forms 10-K, 10-Q,
8-K, etc., in press releases and other written materials and in oral statements
made by our officers, directors or employees to third parties.  Statements that
are not historical facts, including statements about our beliefs and
expectations, are forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors that
could cause the actual results, performance or achievements of the Company, or
industry results, to differ materially from historical results, any future
results, performance or achievements expressed or implied by such forward-
looking statements.  Such risks and uncertainties include, but are not limited
to, competitive pressures in the apparel industry, changes in levels of consumer
spending or preferences in apparel and acceptance by customers of the Company's
products, overall economic conditions, governmental regulations and trade
restrictions, political or financial instability in the countries where the
Company's goods are manufactured, postal rate increases, paper and printing
costs, the level of the Company's indebtedness and exposure to interest rate
fluctuations, and other risks and uncertainties described in this report and the
Company's other reports and documents filed or which may be filed, from time to
time, with the Securities and Exchange Commission.  These statements are based
on current plans, estimates and projections, and therefore, you should not place
undue reliance on them.  Forward-looking statements speak only as of the date
they are made and we undertake no obligation to update publicly any of them in
light of new information or future events.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

Results of Operations - Thirteen weeks ended October 28, 2000 versus thirteen
weeks ended October 30, 1999

Revenues for the three months ended October 28, 2000 increased to $194.8 from
$174.4 million for the three months ended October 30, 1999, an increase of
11.7%.  This increase resulted primarily from an increase of $23.1 million in
the net sales of J.Crew Retail.

Revenues of J.Crew Retail increased from $79.7 million in the third quarter of
1999 to $102.8 million in the third quarter of 2000.  This increase was due
primarily to the sales from the new stores opened for less than a full fiscal
year.  Comparable stores sales in the third quarter of 2000 increased by 8.9%.
The number of stores open at October 28, 2000 increased to 103 from 88 at July
29, 2000.

Revenues of J.Crew Direct increased from $61.6 million in the third quarter of
1999 to $61.9 million in the third quarter of 2000.  Revenues from jcrew.com
increased to $26.5 million in the third quarter of 2000 from $17.2 million in
the third quarter of 1999.  Catalog revenues decreased to $35.4 million in the
third quarter of 2000 compared to $44.4 million in the third quarter of 1999, as
the Company continued to migrate customers to the Internet.  Pages circulated
were approximately the same during both periods.

Revenues of J.Crew Factory decreased from $32.4 million in the third quarter of
1999 to $29.3 million in the third quarter of 2000.  This decrease resulted
primarily from a decrease of 5.3% in comp store sales.

Cost of goods sold, including buying and occupancy costs, decreased as a
percentage of revenues from 55.1% in the third quarter of 1999 to 53.4% in the
third quarter of 2000.  This decrease resulted primarily from an increase in
initial markup and a better inventory mix in J.Crew Factory.

Selling, general and administrative expenses increased to $73.9 million in the
three months ended October 28, 2000 from $66.3 million in the three months ended
October  30, 1999.  As a percentage of revenues, selling, general and
administrative expenses decreased to 37.9% of revenues in the third quarter of
2000 from 38.0% in the third quarter of 1999.  The increase in dollar amount
resulted from an increase in general and administrative expenses of $9.2 million
due primarily to the increase in the number of retail stores in

                                       7
<PAGE>

operation during the third quarter of 2000 compared to the third quarter of
1999, offset by a decrease in selling expense from the third quarter of 1999 to
the third quarter of 2000 of $1.6 million. This decrease resulted from direct
advertising related to jcrew.com of $3.0 million in the third quarter of 1999
which did not occur in the third quarter of 2000 offset by higher catalog costs
in the third quarter of 2000.

The decrease in interest expense from $6.8 million in the three months ended
October 30, 1999 to $5.7  million in the three months ended October 28, 2000
resulted primarily from the pay down of $14 million of the term loan subsequent
to the third quarter of 1999 and a decrease in  average borrowings under
revolving credit arrangements, which were $19.9 million in the third quarter of
2000 compared to $43.1 million in the third quarter of 1999.

The increase in income before income taxes from $5.2 million in the three months
ended October 30, 1999 to $11.2 million in the three months ended October 28,
2000 resulted primarily from the improvement in sales volume and merchandise
margins and the decrease in marketing expenses incurred by jcrew.com in the
third quarter of 2000.

Results of Operations - Thirty-nine weeks ended October 28, 2000 versus thirty-
nine weeks ended October 30, 1999.

Revenues for the nine months ended October 28, 2000 increased to $516.4 million
from $466.1 million in the nine months ended October 30, 1999, an increase of
10.8%.  This increase resulted from an increase in the net sales of J.Crew
Retail of $53.0 million.

Revenues of J.Crew Retail increased from $215.7 million in the nine months ended
October 30, 1999 to $268.7 million in the nine months ended October 28, 2000.
This increase was due primarily to sales from new stores opened for less than a
full fiscal year.  Comparable store sales in the nine months ended October 28,
2000 increased by 5.5%.  The number of stores open at October 28, 2000 increased
to 103 from 81 at January 29, 2000.

Revenues of J.Crew Direct increased from $171.4 million in the nine months ended
October  30, 1999 to $172.8 million in the nice months ended October 28, 2000.
Revenues from jcrew.com increased to $63.5 in the first nine months of 2000 from
$36.5 million in the first nine months 1999.  Catalog revenues decreased to
$109.3 million in the first nine months of 2000 from $134.9 million in the first
nine months of 1999. as the Company continues to migrate customers to the
Internet.  Pages circulated were approximately the same during both periods.

Revenues of J.Crew Factory decreased from $77.0 million in the nine months ended
October 30, 1999 to $72.7 million in the nine months ended October 28, 2000.
This decrease resulted primarily from a decrease in the number of stores from 44
at October 30, 1999 to 41 at October 28, 2000.

Cost of goods sold, including buying and occupancy costs, decreased as a
percentage of revenues from  56.3% in the nine months ended October 30, 1999 to
54.4% in the nine months ended October 28, 2000.  This decrease resulted
primarily from an increase in initial markup and a better inventory mix in
J.Crew Factory.

Selling, general and administrative expenses increased to $217.5 million in the
nine months ended October 28, 2000 from $197.5 million in the nine months ended
October 30, 1999. As a percentage of revenues, selling, general and
administrative expenses decreased to 42.1% of revenues in the nine months ended
October 28, 2000 from 42.4% in the nine months ended October 30, 1999.  The
increase in dollar amount resulted from an increase in general and
administrative expenses of $24.2 million due to (a) the increase in the number
of retail stores in operation during the first nine months of 2000 compared to
the first nine months of 1999 and (b) an increase in the bonus provision during
the first nine months of 2000.  Selling expenses were $43.9 million for the nine
months ended October 28, 2000 compared to $48.1 million for the nine months
ended October 30, 1999.   The decrease in selling expenses was attributable
primarily to  direct advertising related to jcrew.com of $3.0 million incurred
in the third quarter of 1999.

                                       8
<PAGE>

The decrease in interest expense from $19.7 million in the nine months ended
October 30, 1999 to $17.1     million in the first nine months of 2000 resulted
primarily from the pay down of $14 million of the term loan subsequent to the
third quarter of  1999 and a decrease in average borrowings under revolving
credit arrangements, which were $9.9 million in the nine months ended October
28, 2000 compared to $34.7 million in the nine months ended October 30, 1999.

The increase in income before income taxes from a loss of $13.4 million in the
nine months ended October 30, 1999 to income of $1.0 million in the nine months
ended October 28, 2000 resulted primarily from the improvement in sales volume
and merchandise margin and the decrease in marketing expense related to
jcrew.com in the third quarter of 2000.

                                       9
<PAGE>

                          PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.

          27. Financial Data Schedule.

(b)  Reports on Form 8-K.

          No reports on Form 8-K were filed during the period covered by this
          Report.

                                       10
<PAGE>

                                   SIGNATURES



      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                        J. CREW OPERATING CORP.
                                        (Registrant)


Date:  December 5, 2000                 By:  /s/  Mark Sarvary
                                           -------------------
                                             Mark Sarvary
                                             Chief Executive Officer



Date:  December 5, 2000                 By:  /s/  Scott M. Rosen
                                           ---------------------
                                           Scott M. Rosen
                                           Chief Financial Officer