<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   November 3, 2001

IRS Employer        Exact name of Registrant, State of Incorporation;
Identification No.  Address of Principal Executive Offices; and Telephone Number

22-2894486                     J. CREW GROUP, INC.
                            (A New York corporation)
                                  770 Broadway
                            New York, New York 10003
                                 (212) 209-2500

22-3540930                  J. CREW OPERATING CORP.
                            (A Delaware corporation)
                                  770 Broadway
                            New York, New York 10003
                                 (212) 209-2500

Indicate by check mark whether the registrants (1) have 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
registrants were required to file such reports) and (2) have been subject to
such filing requirements for the past 90 days. Yes x No __

J. Crew Operating Corp. 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.

The number of shares of Common Stock outstanding of each of the issuers as of
November 30, 2001

         J. CREW GROUP,INC.
                  11,743,265 shares of Common Stock, par value $.01 per share

         J. CREW OPERATING CORP.
                  100 shares of Common Stock, par value $.01 per share (all of
                  which are owned beneficially and of record by J. Crew Group,
                  Inc.)

This combined Form 10-Q is separately filed by each of J. Crew Group, Inc. and
J. Crew Operating Corp. The information contained herein relating to each
individual registrant is filed by such registrant on its own behalf. No
registrant makes any representation as to information relating to any other
registrant.

<PAGE>

                         Part I - Financial Information

Item I. Financial Statements

                             J. CREW GROUP, INC. AND
                                  SUBSIDIARIES

                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                  November 3,        February 3,
                                 Assets                              2001               2001
                                 ------                              ----               ----
                                                                 (unaudited)
                                                                           (in thousands)
<S>                                                              <C>                 <C>
Current assets:
     Cash and cash equivalents                                    $  34,987          $  32,930
     Merchandise inventories                                        173,449            140,667
     Prepaid expenses and other current assets                       37,018             23,740
     Federal and state income taxes                                     850                 --
                                                                  ---------          ---------

        Total current assets                                        246,304            197,337

Property and equipment - at cost                                    299,123            251,322
        Less accumulated depreciation and amortization             (108,514)           (85,746)
                                                                  ---------          ---------
                                                                    190,609            165,576
                                                                  ---------          ---------

Deferred income tax assets                                           14,362             14,362
Other assets                                                         13,796             12,586
                                                                  ---------          ---------
        Total assets                                              $ 465,071          $ 389,861
                                                                  =========          =========

                     Liabilities and Stockholders' Deficit
                     -------------------------------------

Current liabilities:
     Notes payable - bank                                         $  95,000          $      --
     Accounts payable and other current liabilities                 119,247            124,873
     Federal and state income taxes                                      --             17,581
     Deferred income tax liabilities                                  5,401              5,401
                                                                  ---------          ---------

        Total current liabilities                                   219,648            147,855
                                                                  ---------          ---------

Long-term debt                                                      275,646            264,292
                                                                  ---------          ---------

Deferred credits and other long-term liabilities                     65,260             56,043
                                                                  ---------          ---------

Redeemable preferred stock                                          222,504            200,018
                                                                  ---------          ---------

Stockholders' deficit                                              (317,987)          (278,347)
                                                                  ---------          ---------

           Total liabilities and stockholders' deficit            $ 465,071          $ 389,861
                                                                  =========          =========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                        2

<PAGE>

                             J. CREW GROUP, INC. AND
                                  SUBSIDIARIES

                 Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                               Thirty-nine weeks ended
                                                             November 3,      October 28,
                                                             -----------      ----------
                                                                2001             2000
                                                                ----             ----
                                                                     (unaudited)
                                                                    (in thousands)
<S>                                                          <C>              <C>
Revenues:

    Net sales                                                 $ 506,534        $ 514,231
    Other                                                        24,798           25,102
                                                              ---------        ---------
                                                                531,332          539,333

Cost of goods sold including buying and occupancy costs         320,093          305,733

Selling, general and administrative expenses                    213,479          216,000
                                                              ---------        ---------

          Income/(loss) from operations                          (2,240)          17,600

Interest expense - net                                          (27,450)         (27,233)
                                                              ---------        ---------

          Loss before income taxes                              (29,690)          (9,633)

Income tax benefit                                               12,040            3,900
                                                              ---------        ---------

          Net loss                                            $ (17,650)       $  (5,733)
                                                              =========        =========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                        3

<PAGE>

                             J. CREW GROUP, INC. AND
                                  SUBSIDIARIES

                 Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                    Thirteen weeks ended
                                                               November 3,         October 28,
                                                               -----------         ----------
                                                                  2001                2000
                                                                  ----                ----
                                                                         (unaudited)
                                                                       (in thousands)
<S>                                                            <C>                 <C>
Revenues:

    Net sales                                                   $ 187,116          $ 193,971
    Other                                                           8,470              8,307
                                                                ---------          ---------
                                                                  195,586            202,278

Cost of goods sold including buying and occupancy costs           113,137            112,511

Selling, general and administrative expenses                       72,430             73,017
                                                                ---------          ---------

        Income from operations                                     10,019             16,750

Interest expense - net                                             (9,603)            (9,213)
                                                                ---------          ---------

        Income before income taxes                                    416              7,537

Provision for income taxes                                           (160)            (3,000)
                                                                ---------          ---------

        Net income                                              $     256          $   4,537
                                                                =========          =========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                        4

<PAGE>


                             J. CREW GROUP, INC. AND
                                  SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                         Thirty-nine weeks ended
                                                                                        --------------------------
                                                                                        November 3,    October 28,
                                                                                        -----------    -----------
                                                                                           2001            2000
                                                                                           ----            ----
                                                                                                (unaudited)
                                                                                              (in thousands)
<S>                                                                                     <C>            <C>
CASH FLOW FROM OPERATING ACTIVITIES:

Net loss                                                                                $(17,650)      $ (5,733)

Adjustments to reconcile net loss to net cash used in operating activities:

     Depreciation and amortization                                                        22,707         15,993
     Amortization of deferred financing costs                                              1,498          1,647
     Non cash compensation expense                                                         1,268            496
     Non cash interest expense                                                            11,354         10,003

Changes in operating assets and liabilities:

     Merchandise inventories                                                             (32,782)       (34,695)
     Prepaid expenses and other current assets                                           (13,278)         3,624
     Other assets                                                                         (2,838)          (398)
     Net assets held for disposal                                                             --          4,186
     Accounts payable and other liabilities                                               (5,873)        (4,145)
     Federal and state income taxes                                                      (18,431)        (8,137)
                                                                                        --------       --------

     Net cash used in operating activities                                               (54,025)       (17,159)
                                                                                        --------       --------

CASH FLOW FROM INVESTING ACTIVITIES:

     Capital expenditures                                                                (54,264)       (39,560)
     Proceeds from construction allowances                                                15,346         11,776
                                                                                        --------       --------

     Net cash used in investing activities                                               (38,918)       (27,784)
                                                                                        ========       ========

CASH FLOW FROM FINANCING ACTIVITIES:

     Increase in notes payable, bank                                                      95,000         32,000
     Repayment of long-term debt                                                              --         (4,000)
     Other                                                                                    --            (13)
                                                                                        --------       --------

     Net cash provided by financing activities                                            95,000         27,987
                                                                                        --------       --------

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                                           2,057        (16,956)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                           32,930         38,693
                                                                                        --------       --------

CASH AND CASH EQUIVALENTS - END OF PERIOD                                               $ 34,987       $ 21,737
                                                                                        ========       ========

NON-CASH FINANCING ACTIVITIES:

     Dividends on preferred stock                                                       $ 22,486       $ 19,508
                                                                                        ========       ========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                       5

<PAGE>


                       J.CREW GROUP, INC. AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

   Thirteen and thirty-nine weeks ended November 3, 2001 and October 28, 2000

1.   Basis of Presentation

          The accompanying unaudited condensed consolidated financial statements
          include the accounts of J. Crew Group, Inc. 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 November 3, 2001 and
          the condensed consolidated statements of operations and cash flows for
          the thirteen and thirty-nine week periods ended November 3, 2001 and
          October 28, 2000 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 accounting principles
          generally accepted in the United States of America 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
          February 3, 2001.

          The results of operations for the thirty-nine week period ended
          November 3, 2001 are not necessarily indicative of the operating
          results for the full fiscal year.

2.   Reclassification

          Prior year amounts, as previously reported in the statement of
          operations, have been restated for the reclassification of shipping
          and handling fees and related handling costs. Shipping and handling
          fees were reclassified from cost of goods sold to other revenues and
          handling costs were reclassified from general and administrative
          expenses to cost of goods sold.

3.   Recent Accounting Pronouncements

          Statements of Financial Accounting Standards No. 133 "Accounting for
          Derivative Instruments and Hedging Activities" and No. 138 "Accounting
          for Certain Derivative Instruments and Certain Hedging Activities",
          were effective at the beginning of fiscal year 2001. There was no
          material effect on the consolidated financial statements from the
          adoption of these accounting standards.


          In July 2001, the FASB issued Statement of Financial Standards No.
          141, "Business Combinations" and Statement of Financial Accounting
          Standards No. 142, "Goodwill and Other Intangible Assets". SFAS 141
          eliminates the pooling-of-interests method of accounting for business
          combinations initiated after June 30, 2001 and modifies the
          application of the purchase accounting method effective for
          transactions that are completed after June 30, 2001. SFAS 142
          eliminates the requirement to amortize goodwill and intangible assets
          having indefinite useful lives but requires testing at least annually
          for impairment. Intangible assets that have finite lives will continue
          to be amortized over their useful lives. SFAS 142 will apply to
          goodwill and intangible assets arising from transactions completed
          before and after the Statement's effective date of January 1, 2002.
          These statements will have no effect on the Company's financial
          statements.

                                       6

<PAGE>



4.   Events of September 11, 2001

         The terrorist actions of September 11, 2001 resulted in the destruction
         of our retail store located at the World Trade Center, resulting in the
         loss of inventories and store fixtures, equipment and leasehold
         improvements. These losses and the resulting business interruption are
         covered by insurance policies maintained by the Company.

         The statement of operations for the thirteen and thirty-nine weeks
         ended November 3, 2001 includes losses of $1.9 million relating to
         inventories and store fixtures, equipment and leasehold improvements.
         Insurance recoveries have been recorded in amounts equal to the
         carrying amount of these assets. The ultimate insurance recoveries will
         be based on the final sales price of the inventories and the
         replacement cost of the fixed assets. The estimated insurance
         recoveries also exclude any amounts for business interruption since
         this amount is not determinable at this time.

                                       7

<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, availability of suitable store locations at appropriate terms, 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. J.CREW GROUP, INC. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS - THIRTEEN WEEKS ENDED NOVEMBER 3, 2001 VERSUS THIRTEEN
WEEKS ENDED OCTOBER 28, 2000.

Consolidated revenues decreased from $202.3 million in the thirteen weeks ended
October 28, 2000 to $195.6 million for the thirteen weeks ended November 3,
2001, a decrease of 3.3%.

The revenues of J.Crew Retail decreased from $102.8 million in the third quarter
of 2000 to $96.7 million in the third quarter of 2001. This decrease was due
primarily to the decrease in comparable store sales of 17.7%. The number of
stores open at November 3, 2001 increased to 130 from 103 at October 28, 2000.

The revenues of J.Crew Direct (which includes the catalog and Internet
operations) increased from $61.9 million in the third quarter of 2000 to $65.8
million in the third quarter of 2001. Revenues from jcrew.com increased to $32.1
million in third quarter of 2001 from $26.5 million in the third quarter of
2000. Catalog revenues in the third quarter of 2001 decreased to $33.7 million
from $35.4 million in the third quarter of 2000, as the Company continued to
migrate customers to the Internet. Pages circulated were approximately the same
in both periods.

The revenues of J.Crew Factory decreased from $29.3 million in the third quarter
of 2000 to $24.6 million in the third quarter of 2001. There were 41 stores open
at the end of the third quarter in 2000 and 2001.

Other revenues increased from $8.3 million in the third quarter of 2000 to $8.5
million in the third quarter of 2001.

Cost of goods sold, including buying and occupancy costs, increased as a
percentage of revenues to 57.8% in the third quarter of 2001 from 55.6% in the
third quarter of 2000. This increase is due to additional markdowns and an
increase buying and occupancy costs as a percentage of revenues in the third
quarter of 2001 compared to the third quarter of 2000.

                                       8

<PAGE>



Selling, general and administrative expenses decreased from $73.0 million in the
third quarter of 2000 to $72.4 million in the third quarter of 2001. This
decrease resulted from a decrease in selling expense of $1.7 million and an
increase in general and administrative expenses of $1.1 million. The increase in
general and administrative expenses was due primarily to higher expenses as a
result of the increase in the number of retail stores in operation during the
third quarter of 2001 offset by a decrease in the bonus provision and the effect
of the cost reduction initiatives adopted in the first quarter of 2001. The
decrease in selling expense from $15.9 million in the third quarter of 2000
compared to $14.2 million in the third quarter of 2001 resulted from a decrease
in catalog costs and a shift in the timing of catalog mailings which will
negatively impact the fourth quarter. As a percentage of revenues, selling,
general and administrative expenses increased from 36.1% in the third quarter of
2000 to 37.0% of revenues in the third quarter of 2001.

The increase in interest expense from $9.2 million in the third quarter of 2000
to $9.6 million in the third quarter of 2001 resulted primarily from an increase
in non-cash interest expense from $3.9 million in the third quarter of 2000 to
$4.4 million in the third quarter of 2001. Cash interest decreased by $.9
million due to the repayment of the term loan in the fourth quarter of fiscal
year 2000 and a decrease in interest rates which offset the effect of an
increase in averaging borrowings under the revolving credit arrangement from
$19.9 million in the third quarter of 2000 to $75 million in the third quarter
of 2001.

The decrease in income before income taxes from $7.5 million in the third
quarter of 2000 to $.4 million in the third quarter of 2001 resulted primarily
from the decline in net sales and the decrease in gross margin percentage due to
an increase in markdowns.

RESULTS OF OPERATIONS - THIRTY-NINE WEEKS ENDED NOVEMBER 3, 2001 VERSUS
THIRTY-NINE WEEKS ENDED OCTOBER 28, 2000.

Consolidated revenues for the thirty-nine weeks ended November 3, 2001 decreased
to $ 531.3 million from $539.3 million in the thirty-nine weeks ended October
28, 2000 a decrease of 1.5%.

Revenues of J.Crew Retail increased from $268.7 million in the thirty-nine weeks
ended October 28, 2000 to $272.7 million in the thirty-nine weeks ended November
3, 2001. This increase was due primarily to sales from the stores opened for
less than a full year. Comparable store sales in the thirty-nine weeks ended
November 3, 2001 decreased by 13.9%. The number of stores open at November 3,
2001 increased to 130 from 103 at October 28, 2000.

Revenues of J.Crew Direct (which includes the catalog and Internet operations)
decreased from $172.8 million in the thirty-nine weeks ended October 28, 2000 to
$166.6 million in the thirty-nine weeks ended November 3, 2001. Revenues from
jcrew.com increased to $78.3 million in the thirty-nine weeks ended November 3,
2001 from $63.5 million in the thirty-nine weeks ended October 28, 2000. Catalog
revenues decreased from $109.3 million in the thirty-nine weeks ended October
28, 2000 to $88.3 million in the thirty-nine weeks ended November 3, 2001 as the
Company continued to migrate customers to the Internet. Pages circulated were
approximately the same in both periods.

Revenues of J.Crew Factory decreased from $72.7 million in the thirty-nine weeks
ended October 28, 2000 to $67.1 million in the thirty-nine weeks ended November
3, 2001. There were 41 stores at the end of the third quarter of 2001 and 2000.

Other revenues decreased from $25.1 million in the thirty-nine weeks ended
October 28, 2000 to $24.9 million in the thirty-nine weeks ended November 3,
2001.

Cost of goods sold, including buying and occupancy costs, increased as a
percentage of revenues from 56.7% in the thirty-nine weeks ended October 28,
2000 to 60.2% in the thirty-nine weeks ended November 3, 2001. This increase
resulted primarily from an increase in markdowns and an increase in buying and
occupancy costs as a percentage of revenues in the first nine months of 2001
compared to the first nine months of 2000.

                                       9

<PAGE>

Selling, general and administrative expenses decreased from $216.0 million in
the thirty-nine weeks ended October 28, 2000 to $213.5 million in the
thirty-nine weeks ended November 3, 2001. This decrease resulted primarily from
a decrease in selling expenses of $1.2 million and a decrease in general and
administrative expenses of $1.3 million due primarily to a decrease in the bonus
provision and the effects of cost reduction initiatives adopted in the first
quarter of 2001 offset by higher store expenses due to an increase in the number
of retail stores in operation in 2001. Selling expenses were $42.7 million for
the thirty-nine weeks ended November 3, 2001 compared to $43.9 million for the
thirty-nine weeks ended October 28, 2000. Selling expense was positively
impacted by a decrease in catalog costs and a shift in the timing of catalog
mailings in the third quarter of 2001 which will negatively impact the fourth
quarter. As a percentage of revenues, selling, general and administrative
expenses increased to 40.2% of revenues in the thirty-nine weeks ended November
3, 2001 from 40.0% in the six months ended October 28, 2000.

Interest expense increased from $27.2 million in the thirty-nine weeks ended
October 28, 2000 to $27.5 million in the thirty-nine weeks ended November 3,
2001 due primarily to an increase in non cash interest expense from $11.6
million to $12.9 million. Cash interest decreased by $1.0 million as a result of
the repayment of the term loan in the fourth quarter of fiscal year 2000 and a
decrease in interest rates which offset the increase in average borrowings under
the revolving credit arrangement from $9.9 million in 2000 to $42.4 million in
2001.

The decrease in income before income taxes from $17.6 million in the thirty-nine
weeks ended October 28, 2000 to a loss of $2.2 million in the thirty-nine weeks
ended November 3, 2001 resulted primarily from the decrease in net sales and a
decrease in gross profit percentage due to an increase in markdowns.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operations decreased from a use of $17.2 million in the
thirty-nine weeks ended October 28, 2000 to a use of $54.0 million in the
thirty-nine weeks ended November 3, 2001. This increase in cash used in
operations resulted primarily from the increase in working capital requirements
in the first nine months of fiscal 2001 compared to the comparable period last
year.

Capital expenditures, net of construction allowances, were $38.9 million in the
thirty-nine weeks ended November 3, 2001 compared to $27.8 million for the same
period last year. These expenditures were incurred primarily in connection with
the construction of new stores and information systems enhancements.

Borrowings under the revolving credit line increased from $32.0 million at
October 28, 2000 to $95.0 million at November 3, 2001. Investments of excess
cash balances were $20.4 million at November 3, 2001 compared to $1.6 million at
the end of the third quarter last year. The increase in investments at November
3, 2001 compared to October 28, 2000 resulted from the drawdown of available
credit under our revolving credit arrangement in excess of working capital
requirements. This increase in net borrowings was used to fund capital
expenditures and for working capital purposes.

Management believes that cash flow from operations and availability under the
revolving credit facility will provide adequate funds for the Company's
foreseeable working capital needs, planned capital expenditures and debt service
obligations. The Company's ability to fund its operations and make planned
capital expenditures, to make scheduled debt payments, to refinance indebtedness
and to remain in compliance with all of the financial covenants under its debt
agreements depends on its future operating performance and cash flow, which in
turn, are subject to prevailing economic conditions and to financial, business
and other factors, some of which are beyond its control.

SEASONALITY
-----------

The Company experiences two distinct selling seasons, spring and fall. The
spring season is comprised of the first and second quarters and the fall season
is comprised of the third and fourth quarters. Net sales are

                                       10

<PAGE>


usually substantially higher in the fall season and selling, general and
administrative expenses as a percentage of net sales are usually higher in the
spring season. Approximately 35% of annual net sales in fiscal year 2000
occurred in the fourth quarter. The Company's working capital requirements also
fluctuate throughout the year, increasing substantially in September and October
in anticipation of the holiday season inventory requirements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company's principal market risk relates to interest rate sensitivity, which
is the risk that future changes in interest rates will reduce net income or the
net assets of the Company. The Company's variable rate debt consists of
borrowings under the Revolving Credit Facility which averaged $42.4 million
during the first nine months of 2001.

The Company has a licensing agreement in Japan which provides for royalty
payments based on sales of J.Crew merchandise as denominated in yen. The Company
has entered into forward foreign exchange contracts from time to time in order
to minimize this risk. At November 3, 2001 there were no forward foreign
exchange contracts outstanding.

The Company enters into letters of credit to facilitate the international
purchase of merchandise. The letters of credit are primarily denominated in U.S.
dollars. Outstanding letters of credit at November 3, 2001 were $46.2 million.

                                       11

<PAGE>


                           J. CREW OPERATING CORP. AND
                                  SUBSIDIARIES

                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                       November 3,  February 3,
                                 Assets                                   2001         2001
                                 ------                                   ----         ----
                                                                      (unaudited)
                                                                          (in thousands)
<S>                                                                    <C>          <C>
Current assets:
     Cash and cash equivalents .....................................   $  34,987    $  32,930
     Merchandise inventories .......................................     173,449      140,667
     Prepaid expenses and other current assets .....................      37,018       23,740
                                                                       ---------    ---------

           Total current assets ....................................     245,454      197,337

Property and equipment - at cost ...................................     299,123      251,322
                  Less accumulated depreciation and amortization ...    (108,514)     (85,746)
                                                                       ---------    ---------
                                                                         190,609      165,576
                                                                       ---------    ---------

Other assets .......................................................      12,219       10,839
                                                                       ---------    ---------
            Total assets ...........................................   $ 448,282    $ 373,752
                                                                       =========    =========

                  Liabilities and Stockholder's Equity
                  ------------------------------------

Current liabilities:
     Notes payable - bank ..........................................   $  95,000    $      --
     Accounts payable and other current liabilities ................     119,247      124,873
     Federal and state income taxes ................................       5,324       18,850
     Deferred income tax liabilities ...............................       3,731        3,731
                                                                       ---------    ---------

           Total current liabilities ...............................     223,302      147,454
                                                                       ---------    ---------

Long-term debt .....................................................     150,000      150,000
                                                                       ---------    ---------

Deferred credits and other long-term liabilities ...................      65,260       56,043
                                                                       ---------    ---------

Due to J.Crew Group, Inc. ..........................................       1,047        1,047
                                                                       ---------    ---------

Stockholder's equity ...............................................       8,673       19,208
                                                                       ---------    ---------


           Total liabilities and stockholder's equity ..............   $ 448,282    $ 373,752
                                                                       =========    =========
</TABLE>

       See notes to unaudited condensed consolidated financial statements.

                                       12

<PAGE>

                           J. CREW OPERATING CORP. AND
                                  SUBSIDIARIES

                 Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                          Thirty-nine weeks ended
                                                        November 3,   October 28,
                                                        ----------    -----------
                                                               2001         2000
                                                               ----         ----
                                                               (unaudited)
                                                              (in thousands)
<S>                                                     <C>            <C>
Revenues:

    Net sales                                             $ 506,534    $ 514,231
    Other                                                    24,798       25,102
                                                          ---------    ---------
                                                            531,332      539,333

Cost of goods sold including buying and occupancy costs     320,093      305,733

Selling, general and administrative expenses                212,987      215,504
                                                          ---------    ---------

                   Income/(loss) from operations             (1,748)      18,096

Interest expense - net                                      (15,927)     (17,054)
                                                          ---------    ---------

                   Income/(loss) before income taxes        (17,675)       1,042

Income taxes                                                  7,140         (420)
                                                          ---------    ---------

                   Net income/(loss)                      $ (10,535)   $     622
                                                          =========    =========

</TABLE>

      See notes to unaudited condensed consolidated financial statements.

                                       13

<PAGE>

                           J. CREW OPERATING CORP. AND
                                  SUBSIDIARIES

                 Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                          Thirteen weeks ended
                                                        November 3,   October 28,
                                                       -----------    ----------
                                                           2001          2000
                                                           ----          ----
                                                               (unaudited)
                                                              (in thousands)
<S>                                                    <C>             <C>
Revenues:

    Net sales                                             $ 187,116    $ 193,971
    Other                                                     8,470        8,307
                                                          ---------    ---------
                                                            195,586      202,278

Cost of goods sold including buying and occupancy costs     113,137      112,511

Selling, general and administrative expenses                 72,275       72,851
                                                          ---------    ---------

                   Income from operations                    10,174       16,916

Interest expense - net                                       (5,667)      (5,740)
                                                          ---------    ---------

                   Income before income taxes                 4,507       11,176

Income taxes                                                 (1,860)      (4,520)
                                                          ---------    ---------

                   Net income                             $   2,647    $   6,656
                                                          =========    =========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                       14

<PAGE>

                           J. CREW OPERATING CORP. AND

                                  SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows

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

                                                        November 3,  October 28,
                                                        -----------  -----------
                                                          2001         2000
                                                          ----         ----
                                                            (unaudited)
                                                           (in thousands)
<S>                                                     <C>         <C>
CASH FLOW FROM OPERATING ACTIVITIES:

Net loss                                                $(10,535)   $    622

Adjustments to reconcile net loss to net cash used in
  operating activities:
     Depreciation and amortization                        22,707      15,993
     Amortization of deferred financing costs              1,328       1,471
     Non cash compensation expense                           772        --

Changes in operating assets and liabilities:

     Merchandise inventories                             (32,782)    (34,695)
     Prepaid expenses and other current assets           (13,278)      3,624
     Other assets                                         (2,838)       (398)
     Net assets held for disposal                           --         4,186
     Accounts payable and other liabilities               (5,873)     (4,145)
     Federal and state income taxes                      (13,526)     (3,817)
                                                        --------    --------

     Net cash used in operating activities               (54,025)    (17,159)
                                                        --------    --------

CASH FLOW FROM INVESTING ACTIVITIES:

     Capital expenditures                                (54,264)    (39,560)
     Proceeds from construction allowances                15,346      11,776
                                                        --------    --------

     Net cash used in investing activities               (38,918)    (27,784)
                                                        --------    --------

CASH FLOW FROM FINANCING ACTIVITIES:

     Increase in notes payable, bank                      95,000      32,000
     Repayment of long-term debt                            --        (4,000)
                                                        --------    --------

     Net cash provided by financing activities            95,000      28,000
                                                        --------    --------

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS           2,057     (16,956)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD           32,930      38,693
                                                        --------    --------

CASH AND CASH EQUIVALENTS - END OF PERIOD               $ 34,987    $ 21,737
                                                        ========    ========
</TABLE>

See notes to unaudited condensed consolidated financial statements.

                                       15

<PAGE>


                     J.CREW OPERATING CORP. AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

   Thirteen and thirty-nine weeks ended November 3, 2001 and October 28, 2000

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 November 3, 2001 and
          the condensed consolidated statements of operations and cash flows for
          the thirteen and thirty-nine week periods ended November 3, 2001 and
          October 28, 2000 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 accounting principles
          generally accepted in the United States of America 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
          February 3, 2001.

          The results of operations for the thirty-nine week period ended
          November 3, 2001 are not necessarily indicative of the operating
          results for the full fiscal year.

2.   Reclassification

          Prior year amounts, as previously reported in the statement of
          operations, have been restated for the reclassification of shipping
          and handling fees and related handling costs. Shipping and handling
          fees were reclassified from cost of goods sold to other revenues and
          handling costs were reclassified from general and administrative
          expenses to cost of goods sold.

3.   Recent Accounting Pronouncements

          Statements of Financial Accounting Standards No. 133 "Accounting for
          Derivative Instruments and Hedging Activities" and No. 138 "Accounting
          for Certain Derivative Instruments and Certain Hedging Activities",
          were effective at the beginning of fiscal year 2001. There was no
          material effect on the consolidated financial statements from the
          adoption of these accounting standards.

          In July 2001, the FASB issued Statement of Financial Standards No.
          141, "Business Combinations" and Statement of Financial Accounting
          Standards No. 142, "Goodwill and Other Intangible Assets". SFAS 141
          eliminates the pooling-of-interests method of accounting for business
          combinations initiated after June 30, 2001 and modifies the
          application of the purchase accounting method effective for
          transactions that are completed after June 30, 2001. SFAS 142
          eliminates the requirement to amortize goodwill and intangible assets
          having indefinite useful lives but requires testing at least annually
          for impairment. Intangible assets that have finite lives will continue
          to be amortized over their useful lives. SFAS 142 will apply to
          goodwill and intangible assets arising from transactions completed
          before and after the Statement's effective date of January 1, 2002.
          These statements will have no effect on the Company's financial
          statements.

                                       16

<PAGE>


4.   Events of September 11, 2001

          The terrorist actions of September 11, 2001 resulted in the
          destruction of our retail store located at the World Trade Center,
          resulting in the loss of inventories and store fixtures, equipment and
          leasehold improvements. These losses and the resulting business
          interruption are covered by insurance policies maintained by the
          Company.

          The statement of operations for the thirteen and thirty-nine weeks
          ended November 3, 2001 includes losses of $1.9 million relating to
          inventories and store fixtures, equipment and leasehold improvements.
          Insurance recoveries have been recorded in amounts equal to the
          carrying amount of these assets. The ultimate insurance recoveries
          will be based on the final sales price of the inventories and the
          replacement cost of the fixed assets. The estimated insurance
          recoveries also exclude any amounts for business interruption since
          this amount is not determinable at this time.

                                       17

<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, availability of suitable store locations at appropriate terms, 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. J.CREW OPERATING CORP. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS - THIRTEEN WEEKS ENDED NOVEMBER 3, 2001 VERSUS THIRTEEN
WEEKS ENDED OCTOBER 28, 2000.

Consolidated revenues decreased from $202.3 million in the thirteen weeks ended
October 28, 2000 to $195.6 million for the thirteen weeks ended November 3,
2001, a decrease of 3.3%.

The revenues of J.Crew Retail decreased from $102.8 million in the third quarter
of 2000 to $96.7 million in the third quarter of 2001. This decrease was due
primarily to the decrease in comparable store sales of 17.7%. The number of
stores open at November 3, 2001 increased to 130 from 103 at October 28, 2000.

The revenues of J.Crew Direct (which includes the catalog and Internet
operations) increased from $61.9 million in the third quarter of 2000 to $65.8
million in the third quarter of 2001. Revenues from jcrew.com increased to $32.1
million in third quarter of 2001 from $26.5 million in the third quarter of
2000. Catalog revenues in the third quarter of 2001 decreased to $33.7 million
from $35.4 million in the third quarter of 2000, as the Company continued to
migrate customers to the Internet. Pages circulated were approximately the same
in both periods.

The revenues of J.Crew Factory decreased from $29.3 million in the third quarter
of 2000 to $24.6 million in the third quarter of 2001. There were 41 stores open
at the end of the third quarter in 2000 and 2001.

Other revenues increased from $8.3 million in the third quarter of 2000 to $8.5
million in the third quarter of 2001.

Cost of goods sold, including buying and occupancy costs, increased as a
percentage of revenues to 57.8% in the third quarter of 2001 from 55.6% in the
third quarter of 2000. This increase is due to additional markdowns and an
increase buying and occupancy costs as a percentage of revenues in the third
quarter of 2001 compared to the third quarter of 2000.

                                       18

<PAGE>

Selling, general and administrative expenses decreased from $72.9 million in the
third quarter of 2000 to $72.3 million in the third quarter of 2001. This
decrease resulted from a decrease in selling expense of $1.7 million and an
increase in general and administrative expenses of $1.1. The increase in general
and administrative expenses was due primarily to higher expenses as a result of
the increase in the number of retail stores in operation during the third
quarter of 2001 offset by a decrease in the bonus provision and the effects of
the cost reduction initiatives adopted in the first quarter of 2001. The
decrease in selling expense from $15.9 million in the third quarter of 2000
compared to $14.2 million in the third quarter of 2001 resulted from a decrease
in catalog costs and a shift in the timing of catalog mailings which will
negatively impact the fourth quarter. As a percentage of revenues, selling,
general and administrative expenses increased from 36.0% in the third quarter of
2000 to 37.0% of revenues in the third quarter of 2001.

Interest expense was approximately $5.7 million in the third quarter of 2001 and
2000. The increase in average borrowings under revolving credit arrangements
from $19.9 million in the third quarter of 2000 to $75.0 million in the third
quarter of 2001 was offset by the repayment of the term loan in the fourth
quarter of fiscal year 2000 and a decrease in interest rates in 2001.

The decrease in income before income taxes from $11.2 million in the third
quarter of 2000 to $4.5 million in the third quarter of 2001 resulted primarily
from the decline in net sales and a decrease in the gross margin percentage due
to an increase in markdowns.

RESULTS OF OPERATIONS - THIRTY-NINE WEEKS ENDED NOVEMBER 3, 2001 VERSUS
THIRTY-NINE WEEKS ENDED OCTOBER 28, 2000.

Consolidated revenues for the thirty-nine weeks ended November 3, 2001 decreased
to $ 531.3 million from $539.3 million in the thirty-nine weeks ended October
28, 2000 a decrease of 1.5%.

Revenues of J.Crew Retail increased from $268.7 million in the thirty-nine weeks
ended October 28, 2000 to $272.7 million in the thirty-nine weeks ended November
3, 2001. This increase was due primarily to sales from the stores opened for
less than a full year. Comparable store sales in the thirty-nine weeks ended
November 3, 2001 decreased by 13.9%. The number of stores open at November 3,
2001 increased to 130 from 103 at October 28, 2000.

Revenues of J.Crew Direct (which includes the catalog and Internet operations)
decreased from $172.8 million in the thirty-nine weeks ended October 28, 2000 to
$166.6 million in the thirty-nine weeks ended November 3, 2001. Revenues from
jcrew.com increased to $78.3 million in the thirty-nine weeks ended November 3,
2001 from $63.5 million in the thirty-nine weeks ended October 28, 2000. Catalog
revenues decreased from $109.3 million in the thirty-nine weeks ended October
28, 2000 to $88.3 million in the thirty-nine weeks ended November 3, 2001 as the
Company continued to migrate customers to the Internet. Pages circulated were
approximately the same in both periods.

Revenues of J.Crew Factory decreased from $72.7 million in the thirty-nine weeks
ended October 28, 2000 to $67.1 million in the thirty-nine weeks ended November
3, 2001. There were 41 stores at the end of the third quarter of 2001 and 2000.

Other revenues decreased from $25.1 million in the thirty-nine weeks ended
October 28, 2000 to $24.9 million in the thirty-nine weeks ended November 3,
2001.

Cost of goods sold, including buying and occupancy costs, increased as a
percentage of revenues from 56.7% in the thirty-nine weeks ended October 28,
2000 to 60.2% in the thirty-nine weeks ended November 3, 2001. This increase
resulted primarily from an increase in markdowns and an increase in buying and
occupancy costs as a percentage of revenues in the first nine months of 2001
compared to the first nine months of 2000.

Selling, general and administrative expenses decreased from $215.5 million in
the thirty-nine weeks ended October 28, 2000 to $213.0 million in the
thirty-nine weeks ended November 3, 2001. This decrease resulted from a decrease
in general and administrative expenses of $1.3 million and a decrease in selling

                                       19

<PAGE>

expense of $1.2 million. The decrease in general and administrative expenses was
due primarily to a decrease in the bonus provision and the effects of cost
reduction initiates adopted in the first quarter of 2001 offset by higher store
expenses due to an increase in the number of retail stores in operation in 2001.
Selling expenses were $42.7 million for the thirty-nine weeks ended November 3,
2001 compared to $43.9 million for the thirty-nine weeks ended October 28, 2000.
This decrease resulted from a decrease in catalog costs and a shift in the
timing of catalog mailings which will negatively impact the fourth quarter. As a
percentage of revenues, selling, general and administrative expenses 40.2% of
revenues in the thirty-nine weeks ended November 3, 2001 compared to 40.0% in
the six months ended October 28, 2000.

The decrease in interest expense from $17.1 million in the thirty-nine weeks
ended October 28, 2000 to $15.9 million in the thirty-nine weeks ended November
3, 2001 resulted from the repayment of the term loan in the fourth quarter of
fiscal year 2000 and a reduction of interest rates in 2001 offset by the
increase in average borrowings from $9.9 million in the nine months ended
October 28, 2000 to $42.4 million in the nine months ended November 3, 2001.

The decrease in income/loss before income taxes from income of $1.0 million in
the thirty-nine weeks ended October 28, 2000 to a loss of $17.7 million in the
thirty-nine weeks ended November 3, 2001 resulted primarily from the decrease in
net sales and a decrease in gross margin percentage due to an increase in
markdowns.

                                       20

<PAGE>

                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibits.

               None

         (b)   Reports on Form 8-K.

               J.Crew Group, Inc. - None

               J.Crew Operating Corp. - None

                                       21

<PAGE>

                                   SIGNATURES

           Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. The signature for each undersigned
company shall be deemed to relate only to matters having reference to such
company.

                                         J. CREW GROUP, INC.
                                         (Registrant)

Date:      December 10, 2001             By: /s/ Mark Sarvary
                                             ----------------------
                                             Mark Sarvary
                                             Chief Executive Officer

Date:      December 10, 2001             By: /s/ Scott M. Rosen
                                            ------------------------
                                             Scott M. Rosen
                                             Chief Financial Officer

                                         J. CREW OPERATING CORP.
                                         (Registrant)


Date:      December 10, 2001             By: /s/  Mark Sarvary
                                             -----------------------
                                             Mark Sarvary
                                             Chief Executive Officer

Date:      December 10, 2001             By: /s/  Scott M. Rosen
                                            ------------------------
                                             Scott M. Rosen
                                             Chief Financial Officer

                                       22