TABLE OF CONTENTS




|         |                                                                                                |  |  |  |  |  |  | 
|-------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|Part I  
|         | Item 1. Business.                                                                             
|         | Item 2. Properties.                                                                           
|         | Item 3. Legal Proceedings.                                                                    
|         | Item 4. Submission of Matters to a Vote of Security Holders.                                  
|Part II 
|         | Item 5. Market for Registrants Common Equity and Related Stockholder Matters.                
|         | Item 6. Selected Financial Data.                                                              
|         | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|         | Item 7A. Quantitative and Qualitative Disclosures About Market Risk.                          
|         | Item 8. Financial Statements and Supplementary Data.                                          
|         | Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure. 
|PART III
|         | Item 10. Directors and Executive Officers of the Registrant.                                  
|         | Item 11. Executive Compensation.                                                              
|         | Item 12. Security Ownership of Certain Beneficial Owners and Management.                      
|         | Item 13. Certain Relationships and Related Transactions.                                      
|Part IV 
|         | Item 14. Exhibits, Financial Statement Schedules, and Reports On Form 8-K.                    



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SECURITIES AND EXCHANGE COMMISSION



Form 10-K

(Mark One)



|      |                                                                                                                                            
|----- | -------------------------------------------------------------------------------------------------------------------------------------------
|[ X ] | Annual report pursuant to section 13 or 15(d) of the Securities
	Exchange Act of 1934 for the fiscal year ended: January 29, 2000
	     OR 
|     
|[   ] | Transition report pursuant to section 13 or 15(d) of the
	Securities Exchange Act of 1934 for the transition period
	from:               to

Commission file number:333-57009

Iron Age Holdings Corporation




(Exact name of registrant as specified in its
charter)


|                                                                |  |                                         
|--------------------------------------------------------------- |  | ----------------------------------------
|                                                               
|                                                               
|                                                               
|                                                               
|Delaware                                                        |  | 04-3349775                              
|                                                                |  |                                         
|(State or other jurisdiction of
	incorporation or organization) |  | (I.R.S. Employer
	Identification Number)

Robinson Plaza Three, Suite 400, Pittsburgh, Pennsylvania
 15205




Securities registered pursuant to Section 12(b) of the Act:
None



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

Applicable only to registrants involved in bankruptcy proceedings
 during the preceding five years: Indicate by check mark whether
the registrant has filed all documents and reports required to be
 filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
 under a plan confirmed by a court. Yes   No   Not Applicable.

(Applicable only to corporate registrants:) As of April 18,
2000, Iron Age Holdings Corporation had 99,991.94 shares of
Common Stock issued and outstanding.

Documents incorporated by reference: None

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K
(Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part II of this Form 10-K or
any amendment to this Form 10-K. [X]



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##### Table of Contents



FORM 10-K INDEX

|         |          |  |                                                                                         |      |    |    | 
|-------- | -------- |  | --------------------------------------------------------------------------------------- | ---- | -- | -- | 
|         |          |  |                                                                                         | Page
|         |          |  |                                                                                         |     
|Part I   |          |  |                                                                                         |      | 3  |   
|         | Item 1.  |  | Business                                                                                |      |    | 3  | 
|         | Item 2.  |  | Properties                                                                              |      |    | 7  | 
|         | Item 3.  |  | Legal Proceedings                                                                       |      |    | 7  | 
|         | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                     |      |    | 7  | 
|        
|        
|        
|        
|        
|Part II  |          |  |                                                                                         |      | 8  |   
|         | Item 5.  |  | Market for Registrants Common Equity and Related
	Stockholder Matters                  |      |    | 8  | 
|         | Item 6.  |  | Selected Financial Data                                                                 |      |    | 8  | 
|         | Item 7.  |  | Managements Discussion and Analysis of Financial Condition
	and
	Results of Operations |      |    | 9  | 
|         | Item 7A. |  | Quantitative and Qualitative Disclosures about Market Risk                              |      |    | 17 | 
|         | Item 8.  |  | Financial Statements and Supplementary Data                                             |      |    | 19 | 
|         | Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure   |      |    | 50 | 
|        
|        
|        
|        
|        
|Part III |          |  |                                                                                         |      | 51 |   
|         | Item 10. |  | Directors and Executive Officers of the Registrant                                      |      |    | 51 | 
|         | Item 11. |  | Executive Compensation                                                                  |      |    | 53 | 
|         | Item 12. |  | Security Ownership of Certain Beneficial Owners and Management                          |      |    | 58 | 
|         | Item 13. |  | Certain Relationships and Related Transactions                                          |      |    | 60 | 
|        
|        
|        
|        
|        
|Part IV  |          |  |                                                                                         |      | 61 |   
|         | Item 14. |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                        |      |    | 61 | 

Reference in this Annual Report on Form 10-K is made to the
Iron Age®, Knapp® and Grabber® trademarks which
are owned by Iron Age Holdings Corporation or its subsidiaries.

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##### Table of Contents






Part I




Item 1. Business.

Iron Age Holdings Corporation (the Company or
Holdings), together with its wholly-owned subsidiary,
 Iron Age Corporation (Iron Age), is a leading
distributor of safety shoes in the United States. The
Companys primary business is the specialty distribution of
safety, work and uniform shoes under the Iron Age®,
Knapp® and Grabber® brand names, which
comprised 94% of fiscal 2000 sales. The Company also distributes
footwear directly to retail and wholesale customers through its
wholesale division and manufacturing subsidiary Falcon Shoe Mfg.
Co. (Falcon). In addition, the Company began
distribution of prescription safety eyewear, on a limited basis,
in conjunction with the acquisition of a regional distributor in
April 1998. The Company distributes directly to its
customers over 300 styles of footwear under the Iron Age,
Knappand Grabberbrand names. The Iron Age, Knappand Grabberproducts and services are marketed
principally to industrial, service and government employers, many
 of which require safety shoes to be worn at the workplace and
provide purchase subsidies under employer safety programs to the
end-user employee.

Company History

Iron Age was founded in 1817 and has specialized in safety
footwear since the popularization of steel toe shoes during the
1940s. On February 26, 1997, Fenway Partners Capital Fund,
L.P. (Fenway), together with certain investors, in
partnership with certain members of management, formed Holdings
in order to effect the acquisition of all of the outstanding
stock of the predecessor to Holdings for an aggregate purchase
price of $143.6 million (the Fenway
Acquisition).

Concurrent with the Fenway Acquisition, (i) Holdings and
Iron Age entered into a syndicated senior bank loan facility (the
 Old Credit Facility), (ii) Iron Age issued its
12.5% Senior Subordinated Notes due 2006 (the Old
Subordinated Notes) in the amount of $14.55 million,
(iii) Holdings issued shares of Series A Preferred
Stock (the Holdings Series A Preferred Stock)
for $14.9 million, (iv) Holdings issued shares of
Common Stock for approximately $32.2 million,
(v) Holdings issued warrants to acquire Common Stock of
Holdings for $0.1 million, and (vi) management rolled
over certain options and were granted additional options to
acquire shares of Common Stock of Holdings.

On April 24, 1998, (i) Holdings issued its 12 1/8%
 Senior Discount Notes due 2009 (the Discount Notes)
in an aggregate principal amount at maturity of
$45.14 million, (ii) Iron Age issued its 9 7/8%
Senior Subordinated Notes due 2008 (the Senior Subordinated
 Notes) in an aggregate principal amount of
$100.0 million, and (iii) Holdings and Iron Age entered
 into a new credit facility (the New Credit Facility)
 that, as amended, provides for a $61.6 million senior secured
credit facility consisting of a $30.0 million revolving
working capital facility and a $31.6 million revolving
acquisition facility. The Company used excess cash and net
proceeds from the Discount Notes, the Senior Subordinated Notes
and the New Credit Facility to repay the Old Credit Facility,
repay the Old Subordinated Notes and redeem the Holdings
Series A Preferred Stock. The transactions described in this
 paragraph are collectively referred to herein as the
April 1998 Transactions.

Industry Overview

The work shoe market consists of mens and womens
work, safety, uniform and non-slip shoes and boots. In the United
 States, the safety shoe sector of the work shoe market is
comprised of three types of customers industrial or
commercial, government and mass merchandising retail. The Company
 estimates that sales to industrial and government customers
represent over 60% of the safety shoe market. End-user safety
shoe customers include workers in the primary metals, chemical
and petroleum, automotive, paper, mining, utilities, electronics,
 aerospace, food service, hospitality and entertainment,
pharmaceutical, biomedical, agriculture, construction and retail
and wholesale trade industries.

A significant factor influencing the demand for safety shoes is
the increasing concern regarding workplace safety that is derived
 from the employers desire to reduceemployee costs from
on-the-job injury and to reduce

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workers compensation expenses. Beginning in the 1970s, the
federal government adopted Occupational Safety and Health
Administration (OSHA) regulations establishing
heightened workplace safety standards, including regulations
governing footwear. OSHA regulations established standards
requiring employers to provide their workers with workplaces free
 from recognized hazards that could cause serious injury or death
 and requiring employees to abide by all safety and health
standards that apply to their jobs. Changes to OSHA regulations
in 1994 required employers to assess footwear related hazards and
 implement a program designed to mitigate such hazards.

In order to satisfy the criteria set forth in OSHA regulations,
protective footwear must comply with standards (the ANSI
Standards) established by the American National Standards
Institute (ANSI). There are six ANSI categories for
foot protection: impact and compression, metatarsal footwear,
conductive footwear, electrical hazard footwear, sole puncture
resistance footwear and electro-static dissipative footwear.
These OSHA regulations, stricter regulatory enforcement and
increased consumer awareness of the regulations have heightened
the focus on safety in the workplace.

Within the service sector of the work shoe market, a growing
category of safety footwear is non-slip footwear. Uniform shoes
with non-slip soles are used increasingly by customers in the
food service, hotel, gaming and resort industries. Fueling the
demand are some of the same factors influencing traditional
safety shoe users including the increasing concern regarding
workplace safety. In addition, employers in these industries
require consistency and uniformity in the performance and
appearance of their employees footwear.

In the industrial sector of the work shoe market, sales are made
primarily between the distributor and employer, which generally
maintain safety departments that monitor compliance with overall
safety requirements and provide safety shoe purchase subsidies.
Distributors of safety shoes to industrial customers typically
provide a range of services, including advice with respect to
assessment of workplace safety requirements, recommendations as
to appropriate product selection, coordination of employer safety
 subsidy programs, worksite delivery and fitting of shoes and
feedback and follow-up with corporate employers.

Government sales, which include armed forces, penal institutions,
 federal, state, and local municipal employees or civilian
employees, are made to two primary purchasers: GSA-contracted
vendors and the military. GSA-contracted purchases of safety
shoes include retail sales to GSA-contracted vendors through
store and shoemobile service and catalog operations. These orders
 are made for a variety of purposes and activities and involve a
wide range of products. Suppliers bid for these orders on the
basis of product style and quality, distribution capability and
customer service. Sales to the military consist of
price-sensitive, large-volume orders that are designed to strict
specifications and are generally bid directly by the
manufacturers. Style selection is minimal and geared towards a
specific purpose.

The retail/ mass merchandiser sector includes large retail chain
stores, specialty retailers and other retail outlets. This is a
source of low-end, protective footwear, the buyers of which
include workers whose employers do not have company-sponsored
programs as well as self-employed individuals, occupational users
 and agricultural workers.

Safety prescription eyewear is a related product that the Company
 entered into distribution through its subsidiary, IA Vision
Acquisition Co. (IA Vision). Eye protection is
another element of personal protective equipment that is
regulated by OSHA. Many of the same customers to whom the Company
 currently sells safety footwear have similar requirements for
safety eyewear.

Sales and Distribution

Substantially all shoes sourced for distribution by the Company
are transported to its central distribution facility in Penn Yan,
 New York. From Penn Yan, the Company distributes its product to
end-users through its multi-pronged distribution network. The
Company also distributes its products through catalog operations
and channels associated with consumer brands, which include
wholesale merchandising, independent sales representatives and
third-party vendors.

Mobile and Store Centers.Each mobile and store
center consists of a retail store for its products and

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generally one or more affiliated shoemobiles. Each shoemobile
acts as a mobile selling vehicle for the Companys products,
 operating generally within a 150-mile radius of its affiliated
retail store. This sector of the Companys business has
grown as its customers have become more demanding and have
required a higher level of customer service. Through the retail
store channel, the Company is able to service corporate and
individual customers generally located within a 40-mile radius of
 a given store.

The Company operates its fleet of shoemobiles throughout the
United States, Canada and Mexico. Shoemobiles vary in size
transporting from 900 to 1,600 pairs of shoesand each
contains a display area and a fitting room. The shoemobile
driver/salesperson is responsible for the fitting of footwear and
 processing of orders.

Catalog Direct and E-Commerce.The Company reaches both
large and small customers with its safety shoe catalogs and web
site. These sectors of the Companys business provides
direct service to certain customers who are either too small or
do not require direct shoemobile service or who are remotely
located. Sales are promoted through a combination of the product
catalogs, the web site, the Companys field sales force and
trade advertising.

In-Plant Stores.To add further flexibility to its
distribution capabilities, the Company offers large-volume
customers an in-plant store program, which provides the customer
with a base stock of inventory and a sales staff to manage the
store on-site at the customers manufacturing facility. The
customer provides the Company with the necessary store space and
all utilities.

Wholesale and Consumer Channels.The Company markets
branded products to select third-party retail customers. The
Company also markets primarily Knappbranded products
directly to consumers through a Direct Mail and Counselor
(independent sales representatives) business unit.

Falcon Manufacturing.Through its Falcon subsidiary, the
Company manufactures private label footwear for such well known
customers as New Balance Athletic Shoes, Inc., Browning Arms
Company, L.L. Bean, Inc., Cabelas Inc. and H.S. Trask
& Co.

IA Vision.The Company markets safety prescription eyewear
 to its existing industrial customer base through distribution
methods identical to its safety footwear distribution. Mobile
service is utilized to bring the product on site for the
customer, where the selection, fitting and sale may be
consummated utilizing a mobile point-of-sale (POS)
system designed specifically for prescription eyewear.

Products

The Companys product line addresses a full range of
protective footwear applications covering all six ANSI categories
 and non-slip footwear in styles for both men and women in both
steel and non-metallic toe caps. Product categories include work,
 athletic, hikers, metatarsal, dress/casual and rubber footwear
and consist of over 300 individual styles ranging in price from
$15.00 for an inexpensive steel PVC boot to a $185.00 waterproof
boot. The Companys safety footwear is manufactured in more
than 300 length and width combinations, ranging in sizes from 5
to 17. Sales of Iron Age products are concentrated in
traditional, well-established styles, with sales of new styles
representing less than 16% of net sales in fiscal 1998 and fiscal
 1999 and less than 11% in fiscal 2000. All the Companys
work and safety shoes and boots are designed, manufactured and
laboratory tested to meet or exceed applicable ANSI Standards.
Through its long-standing relationship with users of safety
footwear, the Company has assembled a product line that is widely
 regarded as the industrys most complete. In addition to
the Iron Age product line, the Company distributes work,
service oxfords, non-slip and high-end work and hunting boots
under the Knapp and Grabber brand names. In 1997,
the Company acquired and successfully integrated Knapp Shoes,
Inc. (Knapp), an underperforming competitor with a
strong franchise in the uniform and service sector market (the
Knapp Acquisition). On August 31, 1998, the
Company sold the Dunham® trademark and related
trademarks for $2.0 million and on-hand Dunham
inventory for approximately $0.6 million to New Balance
Athletic Shoe, Inc. and New Balance Trading Company, Ltd.
(together, New Balance). In connection therewith, the
 Company agreed to manufacture for New Balance certain products
which New Balance will continue to sell under the Dunham
brand name. Net sales of Dunham products in fiscal 1998,
the last full fiscal year of ownership, were $4.0 million.
This

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transaction did not have a material effect on the results of
operations.

The Company has successfully expanded its product line to meet
new customer demands and substantially increased the categories
and types of footwear offered. As the safety shoe market has
diversified, the Company has expanded its product line, moving
from the basic heavy-duty styles toward casual, lightweight
safety footwear that meet the needs of professional, light
industrial and service sector employees.

Manufacturing

Company Facilities.As a result of its strategic
acquisitions of Falcon and Knapp, the Company operated two
manufacturing facilities in Lewiston, Maine. Work shoes are
manufactured in the Falcon facility in Lewiston primarily for
sale by the Company under the Iron Age brand name. In
addition, the Company sells work shoes manufactured at the Falcon
 facility directly to third parties, including New Balance,
Browning Arms Company, L.L. Bean, Inc., Cabelas Inc.
and H.S. Trask & Co. The Company manufactured the Knapp
product line at its other Lewiston facility. As of
March 1999 the Company has consolidated the Knapp
manufacturing operations into the Falcon facility as originally
intended at the time of the Knapp Acquisition. Falcon
manufactures approximately 22% of total pairs of shoes sold by
Holdings.

Outside Suppliers.As a result of its market leadership
position and long operating history, the Company has developed
key supply arrangements with 22 leading footwear manufacturers in
 seven countries: the United States, China, Korea, Canada,
Taiwan, Malaysia and the Netherlands. Although in fiscal 2000 one
 supplier in China manufactured approximately 29% of the pairs of
 shoes sold by the Company, the Company does not believe that it
is dependent upon any specific supplier for its product
manufacturing. In fiscal 2000, 55% of its total pairs sold were
produced by foreign suppliers. In addition, 42% of its total
pairs sold in fiscal 2000 were produced in China. The Company has
 not experienced any material adverse effects as a result of any
economic downturn in Asia. However, the economic climate could
have an adverse effect on the Companys suppliers located in
 Asia. The Company believes that it could find alternative
manufacturing sources for those products it currently sources
from Asia, including its largest supplier in China, through its
existing relationships with independent third-party manufacturing
 facilities located outside of Asia. However, the loss of a
substantial portion of this manufacturing capacity or the
inability of Asian suppliers to provide products on schedule or
on terms satisfactory to the Company, could have a material
adverse effect on the Companys business, financial
condition or results of operations during the transition to
alternative manufacturing facilities.

Transportation/ Freight.The Company utilizes its own
trucks as well as common carriers to deliver product orders from
its Falcon manufacturing subsidiary and to its mobile and store
centers.

Competition

The work shoe market is highly competitive. Management believes
that competition in the industry is based on distribution
capabilities, retail presence, brand name recognition, corporate
relationships, systems, service, product characteristics, product
 quality and price. The Companys major competitors in the
safety shoe sector of the work shoe industry are Lehigh (a
subsidiary of U.S. Industries, Inc.), Hy-Test (a subsidiary of
Wolverine World Wide, Inc.) and Red Wing Shoe Co. Some of the
Companys competitors have greater financial and other
resources than the Company. In addition, the work shoe market is
a mature industry that could experience limited growth.

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Environmental Matters

The Companys operations, primarily manufacturing, are
subject to federal, state, local, and foreign laws and
regulations relating to the storage, handling, generation,
treatment, emission, release, transportation, manufacturing,
discharge and disposal of certain substance and waste materials.
Permits are required for certain of the Companys
operations, and these permits are subject to revocation,
modification and renewal by issuing authorities. Governmental
authorities have the power to enforce compliance with their
regulations, and violations may result in the payment of fines or
 the entry of injunctions, or both. The Company does not believe
it will be required under existing environmental laws and
enforcement policies to expend amounts that will have a material
adverse effect on its results of operations or financial
condition. The requirements of such laws and enforcement
policies, however, have generally become more strict in recent
years. Accordingly, the Company is unable to predict the ultimate
 cost of compliance with environmental laws and enforcement
policies.

Employees

As of January 29, 2000, the Company employed approximately
980 people in sales and distribution, manufacturing and
administration. None of the Companys employees is presently
 covered by collective bargaining agreements. Management
considers its employee relations to be good.




Item 2. Properties.

The Companys executive offices are located in Pittsburgh,
Pennsylvania. All of the Companys properties are maintained
 on a regular basis and are adequate for the Companys
present requirements.

The following table identifies, as of January 29, 2000, the
principal properties utilized by the Company.

|                              |  |           |  |                          |  |            |         | 
|----------------------------- |  | --------- |  | ------------------------ |  | ---------- | ------- | 
|                              |  |           |  |                          |  | Square    
|Facility                      |  | Own/Lease |  | Location                 |  | Footage(1)
|                              |  |           |  |                          |  |           
|Corporate Headquarters        |  | Lease     |  | Pittsburgh, Pennsylvania |  |            | 20,500  | 
|                             
|                             
|                             
|                             
|Distribution Facility         |  | Own       |  | Penn Yan, New York       |  |            | 175,000 | 
|                             
|                             
|                             
|                             
|Knapp Direct Mail Facility    |  | Lease     |  | Penn Yan, New York       |  |            | 5,500   | 
|                             
|                             
|                             
|                             
|Falcon Manufacturing Facility |  | Lease     |  | Lewiston, Maine          |  |            | 112,000 | 



|    |                                                                    
|--- | -------------------------------------------------------------------
|(1) | Square footage has been rounded up to the nearest 500 square
	feet.




Item 3. Legal Proceedings.

The Company is a party to various legal actions arising in the
ordinary course of its business. The Company believes that the
resolution of these legal actions will not have a material
adverse effect on the Companys business, results of
operations and financial condition.




Item 4. Submission of Matters to a Vote of Security
Holders.

The Company did not submit any matters during the fourth quarter
of the fiscal year covered by this report to a vote of security
holders through the solicitation of proxies or otherwise.

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##### Table of Contents






Part II




Item 5. Market for Registrants Common Equity and
Related Stockholder Matters.

As of April 18, 2000, Holdings had 200,000 authorized shares
 of common stock, par value $.01, of which 99,991.94 were issued
and outstanding. There is no established public trading market
for Holdings common stock. As of April 18, 2000, there
 were eight holders of Holdings common stock.
Holdings ability to pay dividends is limited under an
indenture dated as of April 24, 1998 between Holdings and
The Chase Manhattan Bank, as trustee (the Indenture).




Item 6. Selected Financial Data.

The following table sets forth selected historical consolidated
financial data of Holdings and its predecessor for the five-year
period ended January 29, 2000 which were derived from
audited consolidated financial statements of Holdings and its
predecessor. The following table should be read in conjunction
with Managements Discussion and Analysis of Financial
 Condition and Results of Operations and the consolidated
financial statements and accompanying notes thereto included
elsewhere in this Annual Report on Form 10-K.

|                                         |  |                        |         |              |  |              |         |                        |  |             |         |             |  |   |        |      |  |   |        |  |  |   |        | 
|---------------------------------------- |  | ---------------------- | ------- | ------------ |  | ------------ | ------- | ---------------------- |  | ----------- | ------- | ----------- |  | - | ------ | ---- |  | - | ------ |  |  | - | ------ | 
|                                         |  |                        |         |             
|                                         |  | Successor              |         | Predecessor 
|                                         |  |                        |         |             
|                                         |  |                        |         |              |  |              |         |                       
|                                         |  | Fiscal Years Ending(1) |         |              |  |              |         | Fiscal Years Ending(1)
|                                         |  |                        |         | February 27, |  | January 26,  |         |                       
|                                         |  |                        |         | 1997 through |  | 1997 through |         |                       
|                                         |  | January 29,            |         | January 30,  |  | January 31,  |         | February 26,           |  | January 25, |         | January 27,
|                                         |  | 2000                   |         | 1999         |  | 1998(2)      |         | 1997                   |  | 1997        |         | 1996       
|                                         |  |                        |         |              |  |              |         |                        |  |             |         |            
|                                         |  |                       
|                                         |  | (Thousands of Dollars)
|                                        
|                                        
|                                        
|                                        
|Summary of Operations:                   |  |                        |         |              |  |              |         |                        |  |             |         |             |  |   |        |      |  |   |        |  |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Net sales                                |  | $                      | 120,351 |              |  | $            | 124,294 |                        |  | $           | 107,769 |             |  | $ | 10,937 |      |  | $ | 99,360 |  |  | $ | 95,263 | 
|                                        
|                                        
|                                        
|                                        
|(Loss) income before extraordinary items |  | $                      | (2,094  | )            |  | $            | (3,273  | )                      |  | $           | 1,957   |             |  | $ | (695   | )    |  | $ | 3,590  |  |  | $ | 3,836  | 
|                                        
|                                        
|                                        
|                                        
|Net (loss) income                        |  | $                      | (290    | )(5)         |  | $            | (7,288  | )(4)                   |  | $           | 1,957   |             |  | $ | (695   | )(3) |  | $ | 3,590  |  |  | $ | 3,836  | 
|                                        
|                                        
|                                        
|                                        
|                                        
|Financial Position at Year End:          |  |                        |         |              |  |              |         |                        |  |             |         |             |  |   |        |      |  |   |        |  |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Total assets                             |  | $                      | 170,753 |              |  | $            | 180,032 |                        |  | $           | 174,801 |             |  | $ |       |      |  | $ | 90,043 |  |  | $ | 91,151 | 
|                                        
|                                        
|                                        
|                                        
|Total debt                               |  |                        | 139,988 |              |  | $            | 151,058 |                        |  | $           | 101,675 |             |  | $ |       |      |  | $ | 19,212 |  |  | $ | 38,295 | 
|                                        
|                                        
|                                        
|                                        
|Holdings Series A Preferred Stock        |  | $                      |        |              |  | $            |        |                        |  | $           | 17,031  |             |  | $ |       |      |  | $ |       |  |  | $ |       | 
|                                        
|                                        
|                                        
|                                        
|Holdings Series B Preferred Stock        |  | $                      | 5,361   |              |  |              |        |                        |  |             |        |             |  | $ |       |      |  | $ |       |  |  | $ |       | 



|    |                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Holdings utilizes a fiscal year of 52 or 53 weeks, ending on
	 the last Saturday in January. Each of Holdings fiscal
	years set forth herein contained 52 weeks except for its
	fiscal year ended January 31, 1998 which contained
	53 weeks.                
|   
|(2) | The statement of income data and other financial data for the
	period February  27, 1997 through January 31, 1998
	include the results of Knapp since it was acquired by Holdings on
	 March  14, 1997.                                                       
|   
|(3) | Includes $1,054 of non-cash stock-based compensation and $1,000
	of non-recurring management bonuses paid in connection with the
	Fenway Acquisition.                                                                                                         
|   
|(4) | Includes an extraordinary loss on early extinguishment of debt,
	net of tax effect, of $4,015 and compensation payments to certain
	 members of management of Iron Age, net of tax effect, of $1,285
	incurred in connection with the April 1998 Transactions.
|   
|(5) | Includes an extraordinary gain of $1,804, net of tax effect, due
	to the repurchase, at a discount, of a portion of the Senior
	Subordinated Notes related to the July 1999 Transaction and
	the September 1999 Transaction.                                  

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Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations.

The following is managements discussion and analysis of
the financial condition and results of operations of Holdings for
 the fiscal years ended January 29, 2000 (fiscal
2000), January 30, 1999 (fiscal 1999) and
January 31, 1998 (fiscal 1998). For purposes of
this discussion and analysis, the financial condition and results
 of operations of Holdings for fiscal 1998 represent the combined
 results of Holdings and its predecessor, unless otherwise
indicated. This discussion and analysis should be read in
conjunction with, and is qualified in its entirety by,
Selected Financial Data and the consolidated
financial statements and accompanying notes thereto included in
Item 8 of this Annual Report on Form 10-K.

Overview

Holdings primary business is the specialty distribution of
safety, work, uniform and non-slip related shoes directly to end
users under the Iron Age, Knapp and Grabber brand
names, which comprised 94% of fiscal 2000 sales. Holdings also
distributes footwear directly to retail and wholesale customers
through its wholesale division and its manufacturing subsidiary
Falcon. Falcon manufactures approximately 22% of total pairs of
shoes sold by Holdings. In addition, Holdings began distributing
prescription safety eyewear, on a limited basis, in conjunction
with the acquisition of a regional distributor in April 1998.
Holdings net sales decreased by 3.2% in fiscal 2000. The
decrease in net sales was due primarily to decreased wholesale
sales due in part to the Dunham Sale, a decrease in net sales
related to the Holdings safety and medical products
business line which was sold in May 1999 and store closures
in fiscal 2000. Holdings net sales growth has averaged 6.6%
 over the last three fiscal years, excluding the impact of an
additional week in fiscal 1998.

Holdings has an extended history of sales and income growth.
Historically, Holdings growth has been generated both
internally and through the acquisition of regional independent
distributors. From fiscal 1987 to fiscal 2000, Holdings net
 sales and EBITDA have increased at a compound annual growth rate
 (CAGR) of 12.8% and 19.0%, respectively.

September 1999 Transaction

On September 22, 1999, Holdings purchased $9.0 million
in principal amount of its Senior Subordinated Notes for
$7.13 million. The purchase was funded by $4.7 million
of borrowings under the New Credit Facility and the issuance of
$2.375 million of Series B Preferred Stock of Holdings
(the Holdings Series B Preferred Stock) to
Holdings majority stockholder, Fenway. Holdings recorded an
 extraordinary gain of $0.88 million, net of unamortized
deferred financing costs of $0.35 million, and income taxes
of $0.64 million. Following the purchase, such principal
amount of the Senior Subordinated Notes was retired. Holdings
may, under favorable market conditions, purchase additional
Senior Subordinated Notes.

July 1999 Transaction

On July 20, 1999, Holdings purchased $9.64 million in
principal amount of its Senior Subordinated Notes for
$7.66 million. The purchase was funded by $5.1 million of
borrowings under the New Credit Facility and the issuance of
$2.563 million of Holdings Series B Preferred Stock to
Holdings majority stockholder, Fenway. Holdings recorded an
 extraordinary gain of $0.92 million, net of unamortized
deferred financing costs of $0.38 million, and income taxes
of $0.67 million. Following the purchase, such principal amount
of the Senior Subordinated Notes was retired.

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Acquisitions and Capital Restructuring

The Fenway Acquisition occurred on February 26, 1997.
Concurrent with the Fenway Acquisition, (i) Holdings and
Iron Age entered into the Old Credit Facility, (ii) Iron Age
 issued the Old Subordinated Notes in the amount of
$14.55 million (net of a $0.45 million discount),
(iii) Holdings issued 1,500 shares of the Holdings
Series A Preferred Stock for an aggregate consideration of
$14.9 million, (iv) Holdings issued 88,625 shares of
Common Stock for an aggregate consideration of approximately
$32.2 million, (v) Holdings issued warrants to acquire
approximately 7,000 shares of Common Stock of Holdings at an
exercise price of $185.52 per share for an aggregate
consideration of $0.1 million, and (vi) management
rolled over certain options to acquire approximately 6,000 shares
 of the predecessor company at an exercise price of $62 per share
 into options to acquire approximately 11,500 shares of Common
Stock of Holdings at an exercise price of $36.36 per share and
were granted additional options to acquire shares of Common Stock
 of Holdings at an exercise price of $363.60 per share. The total
 fair value of the exchanged options was recognized as a capital
contribution to Holdings because the exchanged options
represented a portion of the purchase price for Holdings. The
Fenway Acquisition was accounted for by the purchase method and
the purchase price has been allocated to Holdings assets
and liabilities based on fair market value. The Fenway
Acquisition resulted in goodwill of approximately
$84.1 million, which is being amortized over 40 years.
The exercise price of the options which were rolled over by
management is $36 per share and represents the difference
between the fair market value of Holdings Common Stock at
the date of grant and the total fair value of the exchanged
options which was recognized as a capital contribution to
Holdings of $3,772,700, or $328 per share.

The Knapp Acquisition occurred on March 14, 1997. As part of
 the Knapp Acquisition, Fenway and certain other stockholders of
Holdings contributed an additional $4.0 million of common
equity. The Knapp Acquisition was accounted for under the
purchase method for business combinations and, accordingly, the
results of operations for Knapp are included in Holdings
financial statements only from the date of the Knapp Acquisition.

On April 24, 1998, in the April 1998 Transactions,
(i) Holdings consummated the sale of the Discount Notes, in
an aggregate principal amount at maturity of $45.14 million,
 in a transaction exempt from the registration requirements of
the Securities Act, (ii) Iron Age issued the Senior
Subordinated Notes, in an aggregate principal amount of
$100 million in a transaction exempt from the registration
requirements of the Securities Act, and (iii) Holdings and
Iron Age entered into the New Credit Facility, which, as amended,
 provides for a $61.6 million senior secured credit facility
 consisting of a $30.0 million revolving working capital
facility and a $31.6 million revolving acquisition facility.
 Holdings and Iron Age used excess cash and net proceeds from the
 Discount Notes, the Senior Subordinated Notes and the New Credit
 Facility to repay the Old Credit Facility and the Old
Subordinated Notes, to make compensation payments to certain
members of management, to pay a dividend to Holdings
stockholders and to redeem the Holdings Series A Preferred
Stock.

On October 21, 1998, Holdings consummated an exchange offer
of Discount Notes registered under the Securities Act of 1933, as
 amended. The Discount Notes and the notes exchanged therefor are
 referred to as the Discount Notes.

In April 1998, Holdings, through its subsidiary IA Vision,
acquired the stock of Safety Supplies & Service Co., Inc.
(Safety Supplies) and Holdings acquired certain
assets and assumed certain liabilities of Safety Depot Ltd., ACT
Safety, Inc. and J. Mars Knapp Shoes (the First Quarter
1999 Acquisitions). The combined purchase price for the
First Quarter 1999 Acquisitions was approximately
$4.64 million, including transactions costs of approximately
 $0.15 million. In addition, on July 7, 1998, the
Company acquired certain assets of Work-Saf, Inc. for
approximately $0.75 million (the Second Quarter 1999
Acquisition). The First Quarter 1999 Acquisitions and the
Second Quarter 1999 Acquisition have been accounted for using the
 purchase method of accounting for business combinations, and
accordingly, (i) the results of operations for each of the
acquired companies are included in Holdings financial
statements from the date of the respective acquisitions and
(ii) the purchase price has been allocated to Holdings
 net assets based upon their fair market values. The First
Quarter 1999 Acquisitions and the Second Quarter 1999 Acquisition
 resulted in goodwill of approximately $2.8 million, which
is being amortized over 40 years.

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Divestitures

On May 25, 1999, Holdings sold the assets of its safety and
medical products line, a component of Safety Supplies
business, which consisted primarily of inventory, with a carrying
 value of approximately $0.4 million to Stratford Safety
Products, Inc. for $0.5 million. The sale resulted in a gain
 of $0.1 million, which was reflected as a reduction of
goodwill that was recorded in connection with the acquisition of
Safety Supplies. Holdings net income from the safety and
medical products line was not material from the date of the
acquisition to the date of sale.

Effective August 31, 1998, Holdings sold the Dunham
trademark and related trademarks with no carrying value to New
Balance for $2.0 million and recorded a gain of
$1.7 million, net of certain transaction costs (the
Dunham Sale). Dunham wholesale sales were
$3.1 million in fiscal 1999, consisting of Dunham sales of
$1.3 million prior to the Dunham Sale, sales of on-hand
inventory to New Balance for approximately $0.6 million in
conjunction with the Dunham Sale and sales of Dunham products of
$1.2 million to New Balance after the Dunham Sale. In
conjunction with the Dunham Sale, Falcon agreed to manufacture
for New Balance certain products which New Balance will continue
to sell under the Dunham brand name pursuant to a two year
 supply agreement with New Balance. The supply agreement does not
 contain a minimum purchase quantity and prices under the supply
agreement are based upon the volume purchased annually by New
Balance.

Results of Operations

The following table sets forth for the period indicated certain
historical income statement data derived from the consolidated
statement of income of Holdings and its predecessor. The
application of the purchase method of business combinations
resulted in a presentation of the results of operations for
fiscal 1998 in two periods: a one-month period prior to the
Fenway Acquisition and an 11-month period following the date of
the Fenway Acquisition.

|                                             |  |             |         |               |  |                  |         |                   |  |   |         |   |  |   |        |   
|-------------------------------------------- |  | ----------- | ------- | ------------- |  | ---------------- | ------- | ----------------- |  | - | ------- | - |  | - | ------ | --
|                                             |  |             |         |              
|                                             |  | Successor   |         | Predecessor  
|                                             |  |             |         |              
|                                             |  |             |         | Feb. 27, 1997 |  | January 26, 1997
|                                             |  |             |         | through       |  | through         
|                                             |  | Fiscal 2000 |         | Fiscal 1999   |  | January 31, 1998 |         | February 26, 1997
|                                             |  |             |         |               |  |                  |         |                  
|Income Statement Data:                       |  |             |         |               |  |                  |         |                   |  |   |         |   |  |   |        |   
|                                            
|                                            
|                                            
|                                            
|Net sales                                    |  | $           | 120,351 |               |  | $                | 124,294 |                   |  | $ | 107,769 |   |  | $ | 10,937 |   
|                                            
|                                            
|                                            
|                                            
|Gross profit                                 |  |             | 60,826  |               |  |                  | 61,066  |                   |  |   | 54,465  |   |  |   | 5,327  |   
|                                            
|                                            
|                                            
|                                            
|Selling, general and administrative          |  |             | 41,515  |               |  |                  | 46,854  |                   |  |   | 36,541  |   |  |   | 5,120  |   
|                                            
|                                            
|                                            
|                                            
|Depreciation and amortization                |  |             | 5,454   |               |  |                  | 5,193   |                   |  |   | 4,426   |   |  |   | 238    |   
|                                            
|                                            
|                                            
|                                            
|Operating income (loss)                      |  |             | 13,857  |               |  |                  | 9,019   |                   |  |   | 13,498  |   |  |   | (31    | ) 
|                                            
|                                            
|                                            
|                                            
|Gain on divestiture                          |  |             |        |               |  |                  | 1,678   |                   |  |   |        |   |  |   |       |   
|                                            
|                                            
|                                            
|                                            
|Interest expense                             |  |             | 15,740  |               |  |                  | 14,844  |                   |  |   | 9,855   |   |  |   | 1,116  |   
|                                            
|                                            
|                                            
|                                            
|Provision (benefit) for income taxes         |  |             | 211     |               |  |                  | (874    | )                 |  |   | 1,686   |   |  |   | (452   | ) 
|                                            
|                                            
|                                            
|                                            
|Extraordinary gain (loss), net of tax effect |  |             | 1,804   |               |  |                  | (4,015  | )                 |  |   |        |   |  |   |       |   
|                                            
|                                            
|                                            
|                                            
|                                            
|Other Data:                                  |  |             |         |               |  |                  |         |                   |  |   |         |   |  |   |        |   
|                                            
|                                            
|                                            
|                                            
|Gross profit margin                          |  |             | 50.5    | %             |  |                  | 49.1    | %                 |  |   | 50.5    | % |  |   | 48.7   | % 
|                                            
|                                            
|                                            
|                                            
|Operating income margin                      |  |             | 11.5    | %             |  |                  | 7.2     | %                 |  |   | 12.5    | % |  |   | (0.3   | )%

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Fiscal 2000 Compared to Fiscal 1999

Net Sales.Net sales for fiscal 2000 were
$120.4 million compared to $124.3 million for fiscal
1999, a decrease of $3.9 million, or 3.2%. The decrease in
fiscal 2000 was primarily attributable to decreased wholesale
sales of $2.9 million, or 2.3%, including a decrease in
Dunham wholesale sales, related to the Dunham Sale and a decrease
 in sales to Holdings other wholesale customers. In
addition, $0.9 million, or 0.7%, of the decrease was due to
the sale of Holdings safety and medical products business
line and $0.8 million, or 0.6%, of the decrease was related
to store closings in fiscal 2000. The decrease in net sales was
partially offset by increased sales of $0.2 million in
Holdings primary footwear distribution business line and
increased sales of $0.5 million, or 0.4%, relating to
increased sales in Holdings vision products business line.

Gross Profit.Gross profit for fiscal 2000 was
$60.8 million compared to $61.1 million for fiscal
1999, a decrease of $0.3 million, or 0.5%. Total gross
profit percentage increased 1.4% to 50.5% in fiscal 2000 compared
 to fiscal 1999. Gross profit percentage increased in
Holdings primary footwear distribution business line by
0.6% in fiscal 2000. The increase in gross profit percentage was
also attributable to a decrease in sales related to the lower
gross profit margin wholesale and safety and medical product
business lines.

Selling, General and Administrative Expenses.Selling,
general and administrative expenses for fiscal 2000 were
$41.5 million compared to $46.9 million for fiscal
1999, a decrease of $5.4 million, or 11.5%. Excluding the
effect of $2.2 million of compensation payments to certain
members of management in connection with the April 1998
Transactions, selling, general and administrative expenses
decreased by $3.2 million, or 7.2%, due primarily to the
effect of cost containment initiatives which included the
consolidation of the Knapp division into Holdings primary
footwear distribution business line, store closings and the sale
of the Companys safety and medical products business line.
In addition, selling, general and administrative expenses for
fiscal 1999 included a $0.2 million charge related to store
closings and $0.2 million of recruitment fees.

Operating Income.Operating income for fiscal 2000 was
$13.9 million, or 11.5% of net sales, compared to
$9.0 million, or 7.2% of net sales, for fiscal 1999. The
increase was attributable to the decreased selling, general and
administrative expenses as discussed above.

Gain On Divestiture.Gain on divestiture for fiscal 1999
was $1.7 million which was related to the gain on the Dunham
 Sale discussed above.

Interest Expense.Interest expense for fiscal 2000 was
$15.7 million compared to $14.8 million for fiscal
1999, an increase of $0.9 million, or 6.1%. The increase in
interest expense was primarily attributable to increased
indebtedness of Holdings resulting from the April 1998
Transactions. The increase was partially offset by decreased
indebtedness of Holdings related to the repurchase of a portion
of the Senior Subordinated Notes in the July 1999
Transaction and the September 1999 Transaction.

Income Tax Expense.Income tax expense for fiscal 2000 was
 $0.2 million compared to income tax benefit of
$0.9 million for fiscal 1999. Income tax expense for fiscal
2000 differs from that of the statutory income tax rate due
primarily to nondeductible goodwill amortization. Holdings
recognized a state income tax benefit of $1.1 million from
net operating loss carryforwards for fiscal 1999,
$0.2 million of which was offset against state income tax
liabilities in fiscal 2000.

Holdings needs to generate $8.0 million of state taxable
income to realize this benefit before expiration of the net
operating loss carryforward periods, which begin in fiscal 2002
through fiscal 2019. Holdings evaluates the adequacy of the
valuation reserve and the realization of the deferred tax benefit
 on an ongoing basis. Management believes that future taxable
income will more likely than not allow Holdings to realize this
benefit.

Extraordinary Item.For fiscal 2000, Holdings recorded an
extraordinary gain of $1.8 million, net of a
$1.3 million tax expense, due to the repurchase, at a
discount, and subsequent retirement of a portion of the Senior
Subordinated Notes in the July 1999 Transaction and the
September 1999 Transaction. For fiscal 1999, Holdings
recorded an extraordinary loss of $4.0 million, net of a
$2.9 million tax benefit, due to the early extinguishment of
 indebtedness resulting from the repayment of the Old
Subordinated Notes and the Old Credit Facility in the April

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1998 Transactions.

Fiscal 1999 Compared to Fiscal 1998

Net Sales.For comparability with fiscal 1999, net sales
for the predecessor and successor periods in fiscal 1998 have
been discussed on a combined basis. Management believes that a
combined discussion of predecessor and successor periods is
reasonable and appropriate because there were no adjustments to
net sales for a change in basis resulting from the Fenway
Acquisition. Holdings net sales for fiscal 1999 were
$124.3 million compared to $118.7 million for fiscal
1998, an increase of $5.6 million, or 4.7%. Excluding the
impact of the additional week in fiscal 1998, sales increased
$7.8 million, or 6.7%. The increase in fiscal 1999 was
primarily attributable to growth in the Companys primary
business of $6.0 million, or 5.6%. Sales of prescription
safety eyewear and safety and medical products were
$2.1 million in fiscal 1999. Growth in net sales was
partially offset by a $2.5 million decrease in wholesale
sales, including a $0.9 million decrease in Dunham wholesale
 sales. Dunham wholesale sales were $3.1 million in fiscal
1999, consisting of Dunham sales of $1.3 million prior to
the Dunham Sale, sales of on-hand inventory to New Balance for
approximately $0.6 million in conjunction with the Dunham
Sale and sales of Dunham products of $1.2 million to New
Balance after the Dunham Sale, compared to Dunham wholesale sales
 of $4.0 million in fiscal 1998.

Gross Profit.For comparability with fiscal 1999, gross
profit for the predecessor and successor periods in fiscal 1998
has been discussed on a combined basis. Management believes that
a combined discussion of predecessor and successor periods is
reasonable and appropriate because there were no adjustments to
gross profit for a change in basis resulting from the Fenway
Acquisition. Holdings gross profit for fiscal 1999 was
$61.1 million compared to $59.8 million for fiscal
1998, an increase of $1.3 million, or 2.2%. Total gross
profit percentage decreased 1.3% to 49.1% in fiscal 1999 compared
 to fiscal 1998. Gross profit percentage increased in the
Companys primary business by 0.3% in fiscal 1999. The
overall decrease in the gross profit percentage was primarily
related to integrating the operations of the prescription safety
eyewear and safety and medical products business and an increase
in lower gross profit margin private label Dunham sales resulting
 from the Dunham Sale. Gross profit on Dunham product sales
decreased $0.5 million in fiscal 1999 compared to fiscal
1998. The decrease primarily related to decreased Dunham
wholesale sales as discussed above and lower gross profit margin
on sales in conjunction with the Dunham Sale.

Selling, General and Administrative Expenses.For
comparability with fiscal 1999, selling, general and
administrative expenses for the predecessor and successor periods
 in fiscal 1998 have been discussed on a combined basis.
Management believes that a combined discussion of predecessor and
 successor periods is reasonable and appropriate because there
were no adjustments to selling, general and administrative
expenses for a change in basis resulting from the Fenway
Acquisition. Selling, general and administrative expenses for
fiscal 1999 were $46.9 million compared to
$41.7 million for fiscal 1998, an increase of
$5.2 million, or 12.5%. Selling, general and administrative
expenses for fiscal 1999 include non-recurring charges of
$2.2 million of compensation payments to certain members of
management in connection with the April 1998 Transactions, a
 $0.2 million charge related to store closings scheduled for
 the first and second quarter of fiscal 2000 and
$0.2 million of recruitment fees. Selling, general and
administrative expenses for fiscal 1998 include a non-recurring
charge of $2.1 million of stock compensation expense and
compensation payments to certain members of management in
connection with the Fenway Acquisition. Selling, general and
administrative expenses increased $4.6 million, or 11.6%, from
fiscal 1998 to fiscal 1999, excluding non-recurring charges in
both fiscal 1999 and fiscal 1998. The increase in fiscal 1999 was
 primarily related to the First Quarter 1999 Acquisitions and
infrastructure added in the Knapp distribution channel since the
first half of fiscal 1998. Growth in selling, general and
administrative expenses in the primary business was
$1.8 million, or 6.1% in fiscal 1999, excluding the
non-recurring charges discussed above.

Operating Income.Operating income for fiscal 1999 was
$9.0 million, or 7.2% of net sales, compared to
$13.5 million, or 12.5% of net sales, for the period from
February 27, 1997 through January 31, 1998. The
decrease was attributable to the increased selling, general and
administrative expenses as discussed above. Operating loss and
operating loss as a percentage of net sales for the predecessor
period January 26, 1997 through February 26, 1997 were
$0.03 million and 0.3%, respectively. Operating income for
the successor period included increased selling, general and
administrative expenses, as discussed above, and additional
depreciation and amortization of $0.8 million. The
additional depreciation and amortization is primarily due to the
increase in basis of goodwill,

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customer lists and other intangible and tangible assets
capitalized as a result of the Fenway Acquisition, the Knapp
Acquisition, the First Quarter 1999 Acquisitions and the Second
Quarter 1999 Acquisition.

Gain on Divestiture.Gain on divestiture for fiscal 1999
was $1.7 million which was related to the gain on the Dunham
 Sale discussed above.

Interest Expense.Interest expense for fiscal 1999 was
$14.9 million compared to $9.9 million for the period
from February 27, 1997 through January 31, 1998, an increase
 of $5.0 million, or 50.5%. Interest expense for the
predecessor period January 26, 1997 through
February 26, 1997 was $1.1 million. Interest expense
for the successor periods prior to April 25, 1998 reflect
the additional indebtedness of Holdings incurred in connection
with the Fenway Acquisition and the Knapp Acquisition. The
successor periods subsequent to April 24, 1998 reflect
interest incurred in connection with the April 1998
Transactions.

Income Tax Expense.Income tax benefit for fiscal 1999 was
 $0.9 million compared to income tax expense of
$1.7 million for the period from February 27, 1997
through January 31, 1998. Income tax benefit for the
predecessor period January 26, 1997 through
February 26, 1997 was $0.5 million. Income tax benefit
for fiscal 1999 differs from that of the statutory income tax
rate due primarily to nondeductible goodwill amortization.
Holdings recognized a state income tax benefit of
$1.1 million from net operating loss carryforwards for
fiscal 1999.

Extraordinary Item.For fiscal 1999, Holdings recorded an
extraordinary loss of $4.0 million, net of a
$2.9 million tax benefit, due to the early extinguishment of
 indebtedness resulting from the repayment of the Old
Subordinated Notes and the Old Credit Facility in April 1998
 in connection with the April 1998 Transactions.

Liquidity and Capital Resources

Holdings primary cash needs are working capital, capital
expenditures and debt service. Holdings anticipates that it may
use cash in the future to finance acquisitions. Holdings has
financed cash requirements primarily through internally generated
 cash flow and funds borrowed under Holdings and Iron
Ages credit facilities.

Net cash provided by operating activities was $8.7 million
in fiscal 2000, as compared to net cash provided by operating
activities of $1.4 million in fiscal 1999 and net cash used
in operating activities of $0.5 million in fiscal 1998. The
increase in cash from operating activities in fiscal 2000 is
primarily the result of improved operating results and overall
reductions in working capital. The increase in cash provided by
operating activities in fiscal 1999 was the result of overall
reductions in working capital.

Holdings investing activities for fiscal 2000 consisted of
capital expenditures of approximately $1.8 million for
improvements in footwear and vision retail stores, vision vans,
information technology equipment and the remaining cost of the
Falcon and Knapp factory integration and expenditures of
approximately $1.3 million related to the acquisition of
software for internal use. Excluding cash paid for acquisitions
and proceeds from the divestiture, Holdings investing
activities consisted of capital expenditures of $2.3 million
 in fiscal 1999 compared to $2.5 million in fiscal 1998.
Holdings capital expenditures for fiscal 1999 included
$0.2 million in remaining costs related to an addition to
Holdings central distribution center building. The
remaining $2.1 million in capital expenditures was related
to improvements in retail stores, shoemobiles and equipment in
the core business and installing the POS hardware in stores and
trucks acquired in connection with the First Quarter 1999
Acquisitions and the Second Quarter 1999 Acquisition.

Holdings used approximately $6.0 million from financing
activities in fiscal 2000, which consisted of net working capital
 payments of approximately $5.5 million, excluding the
July 1999 Transaction and the September 1999
transaction. Holdings financing activities also included a
borrowing of $5.1 million on the New Credit Facility in
July 1999 and a borrowing of $4.7 million in
September 1999. The proceeds were used to pay for the
repurchase of a portion of the Senior Subordinated Notes in the
July 1999 Transaction and the September 1999 Transaction.
The remaining portion of the repurchase was provided by a
$4.938 million aggregate equity contribution from
Holdings majority stockholder, Fenway, for which Fenway
received Holdings Series B Preferred Stock. Excluding cash
paid for regional distributor acquisitions and proceeds from the
divestiture, Holdings used

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approximately $3.0 million from financing activities in
fiscal 1999, due primarily to the April 1998 Transactions.
In fiscal 1998, Holdings generated cash of $3.7 million due
primarily to borrowings under the Old Credit Facility.

Holdings total working capital as of January 29, 2000
was $44.2 million. At January 30, 1999, working capital
 was $47.5 million. The primary reason for the decrease to
working capital was a reduction in inventory and the receipt of
an income tax refund related to the April 1998 Transactions.

Holdings is a holding company, and its ability to pay interest on
 the Discount Notes in the future is dependent upon the receipt
of dividends from its subsidiaries. Holdings does not have, and
may not in the future have, any assets other than the common
stock of Iron Age (which is pledged to secure the obligations of
Iron Age under the New Credit Facility). Iron Age is a party to
the New Credit Facility and the indenture for the Senior
Subordinated Notes, each of which imposes substantial
restrictions on Iron Ages ability to pay dividends to
Holdings.

Cash flow from operations for fiscal 2000 was sufficient to cover
 debt service requirements under the New Credit Facility.
Holdings ability to make scheduled payments of principal,
or to pay the interest or premium (if any) on, or to refinance,
its indebtedness (including the Discount Notes), or to fund
planned capital expenditures will depend on its future
performance, which, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and
other factors that are beyond its control. Based upon the current
 level of operations, management believes that cash flow from
operations and available cash, together with available borrowings
 by Iron Age under the New Credit Facility, will be adequate to
meet Holdings anticipated future requirements for working
capital, budgeted capital expenditures and scheduled payments of
principal and interest on its indebtedness for the next several
years. There can be no assurance that Holdings business
will generate sufficient cash flow from operations or that future
 borrowing will be available under the New Credit Facility in an
amount sufficient to enable Holdings to service its indebtedness,
 including the Discount Notes, or to make capital expenditures.

As of January 29, 2000 Holdings debt consisted of the
Discount Notes, the Senior Subordinated Notes, the New Credit
Facility and certain other debt. As of January 29, 2000, the
 New Credit Facility, as amended, consisted of a $31.6 million
multiple draw acquisition term loan facility (the
Acquisition Credit Facility) and approximately
$30.0 million in revolving credit loans, letters of credit
and swing line loans (the Revolving Credit Facility).
 Holdings other debt of $0.9 million consisted of
capital leases and other notes. As of January 29, 2000,
approximately $21.1 million of the Acquisition Credit
Facility and approximately $5.9 million of the Revolving
Credit Facility were outstanding. Holdings had additional
borrowing availability of $10.5 million under the
Acquisition Credit Facility and under the Revolving Credit
Facility of approximately $24.1 million. The Acquisition
Credit Facility matures in quarterly installments from
July 2001 until final payment in April 2004. The
Revolving Credit Facility will mature in April 2004 and has
no scheduled interim principal payments.

The Senior Subordinated Notes are fully and unconditionally
guaranteed on an unsecured, senior subordinated basis by each
Domestic Restricted Subsidiary that is a Material Subsidiary (as
such terms are defined in the indenture for the Senior
Subordinated Notes (the Senior Subordinated Notes
Indenture)) (whether currently existing, newly acquired or
created). Each such subsidiary guaranty (a Subsidiary
Guaranty) will provide that the subsidiary guarantor, as
primary obligor and not merely as surety, will irrevocably and
unconditionally guarantee on an unsecured, senior subordinated
basis the performance and punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all obligations
 of Iron Age under the Senior Subordinated Notes Indenture and
the Senior Subordinated Notes, whether for payment of principal
or of interest on the Senior Subordinated Notes, expenses,
indemnification or otherwise. As of January 29, 2000, none
of Iron Ages Domestic Restricted Subsidiaries was a
Material Subsidiary, and therefore no Subsidiary Guaranty was in
force or effect.

Subsequent Event

On February 7, 2000, subsequent to fiscal 2000, Fenway
purchased Discount Notes in the market. The purchase results in a
 gain to Holdings for income tax purposes only and a
corresponding income tax liability to Holdings of approximately
$1.3 million which is payable in May 2000. In order to
mitigate any financial impact to Holdings, Fenway has agreed to
make an equity contribution of approximately $1.3 million to
 Holdings, concurrent with the payment of Holdings first
quarter income tax installment.

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Amendments to the New Credit Facility

On February 26, 1999, the New Credit Facility was amended to
 (i) amend the definition of EBITDA for fiscal
2000 for certain purposes of the New Credit Facility,
(ii) add as a condition to drawing on the Acquisition Credit
 Facility prior to April 2000 certain required interest
coverage ratios and leverage ratios, (iii) amend required
interest coverage ratios applicable to fiscal 2000, and
(iv) add to the financial covenants applicable to fiscal
2000 certain required senior coverage ratios.

On June 23, 1999, the New Credit Facility was amended to
(i) permit the use of up to $13,300,000 of the Acquisition
Credit Facility to repurchase Senior Subordinated Notes at or
below par value; provided that no more than two-thirds of the
purchase price of such Senior Subordinated Notes comes from
borrowings under the Acquisition Credit Facility; (ii) amend
 the definition of Fixed Charge Coverage Ratio to
eliminate the tax effect of any permitted repurchases of the
Senior Subordinated Notes; (iii) add as a permitted use of
proceeds of the Acquisition Credit Facility the permitted
repurchases of the Senior Subordinated Notes; (iv) reduce
the borrowing base availability under the Revolving Credit
Facility by $3,000,000 from the time the Company first borrows
under the Acquisition Credit Facility to repurchase Senior
Subordinated Notes until the lenders consent to terminate such
restriction on availability; (v) amend the required interest
coverage ratios applicable to fiscal year 2000; and
(vi) amend the required senior leverage ratios applicable to
 fiscal 2000.

On March 17, 2000, the New Credit Facility was amended to
(i) permit the use of up to $1,500,000 of the Acquisition
Credit Facility to repurchase Discount Notes at or below par
value; (ii) extend the right to purchase the Senior
Subordinated Notes and the Discount Notes through August 31,
 2000; (iii) amend the definition of Fixed Charge Coverage
Ratio to eliminate the tax effect of any permitted
repurchases of the Discount Notes; (iv) add as a permitted
use of proceeds of the Acquisition Credit Facility the permitted
repurchases of the Discount Notes; and (v) reinstate the
borrowing base availability under the Revolving Credit Facility
by $3,000,000.

Year 2000 Issue

Holdings completed its Year 2000 readiness plan in the fourth
quarter of fiscal 2000. As a result of its planning and
implementation efforts, Holdings has not experienced any Year
2000 problems. Holdings will continue to monitor its mission
critical computer applications and those of its vendors and
suppliers through fiscal 2001, to ensure that any Year 2000
matters that may arise are properly addressed. The total cost
expended in the Year 2000 readiness plan was approximately
$0.06 million. Certain portions of these expenditures
included the replacement of systems which were capitalized as new
 hardware and software, in accordance with EITF 96-14.

Recently Issued Accounting Standards

In June 1998, the Financial Accounting Standards Board
(FASB) issued Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities (the
Statement). As amended by FASB Statement
No. 137, Deferral of the Effective Date of FASB Statement
No. 133, the Statement is required to be adopted for all
fiscal quarters in years beginning after June 15, 2000. The
Statement permits early adoption as of the beginning of any
fiscal quarter after its issuance. Holdings expects to adopt the
Statement effective with the first fiscal quarter of fiscal year
2002. The Statement will require Holdings to recognize all
derivatives on the balance sheet at fair value. Derivatives that
are not hedges must be adjusted to fair value through income. If
a derivative is a hedge, depending upon the nature of the hedge,
changes in the fair value of the derivative will either be offset
 against the change in fair value of the hedged asset, liability
or firm commitment through earnings, or recognized in other
comprehensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivatives change
in fair value will be immediately recognized in earnings.
Holdings does not anticipate that the adoption of this Statement
will have a significant effect on its results of operations or
financial position.

In December 1999, the Staff of the Securities and Exchange
Commission released Staff Accounting Bulletin
(SAB) No. 101, Revenue Recognition, to
provide guidance on the recognition, presentation and disclosure
of revenues in financial statements. Holdings revenue
recognition practices are in conformity with SAB No. 101.

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Inflation and Changing Prices

Holdings sales and costs are subject to inflation and price
 fluctuations. However, they historically have not, and in the
future are not expected to have, a material adverse effect on
Holdings results of operations.

Forward Looking Statements

When used in this Annual Report on Form 10-K, the words
believes, anticipates,
expects and similar expressions are used to identify
forward looking statements. Such statements are subject to risks
and uncertainties which could cause actual results to differ
materially from those projected. Holdings wishes to caution
readers that the following important factors in some cases have
affected and in the future could affect Holdings actual
results and could cause Holdings actual results to differ
materially from those expressed in any forward looking statements
 made by Holdings: (i) economic conditions in the safety
shoe market, (ii) availability of credit,
(iii) increase in interest rates, (iv) cost of raw
materials, (v) inability to maintain state-of-the-art
manufacturing facilities, (vi) heightened competition,
including intensification of price and service competition, the
entry of new competitors and the introduction of new products by
existing competitors, (vii) inability to capitalize on
opportunities presented by industry consolidation,
(viii) loss or retirement of key executives, (ix) loss
or disruption of Holdings relationships with its major
suppliers, including Holdings largest supplier in China and
 (x) inability to grow by acquisition of additional safety
shoe distributors or to effectively consolidate operations of
businesses acquired.




Item 7A. Quantitative and Qualitative Disclosures About
Market Risk.

Holdings is exposed to market risk primarily from changes in
interest rates and foreign exchange rates.

The following discussion of Holdings exposure to various
market risks contains forward looking statements that
 are subject to risks and uncertainties. These projected results
have been prepared utilizing certain assumptions considered
reasonable in the circumstances and in light of information
currently available to us. Nevertheless, because of the inherent
unpredictability of interest rates and foreign currency
translation rates, actual results could differ materially from
those projected in such forward looking statements.

Interest Rates

At January 29, 2000, Holdings had fixed-rate debt totaling
$127.4 million in principal amount and having a fair value
of $72.1 million. These instruments bear interest at a fixed
 rate and, therefore, do not expose Holdings to the risk of
earnings loss due to changes in market interest rates. However,
the fair value of these instruments would decrease by
approximately $6.3 million if interest rates were to
increase by 10% from their levels at January 29, 2000 (i.e.,
 an increase from the weighted average interest rate of 10.7% to
a weighted average interest rate of 11.7%). At January 30,
1999, Holdings had fixed-rate debt totaling $146.1 million
in principal amount and having a fair value of
$91.8 million, which would have decreased to
$84.0 million had interest rates increased 10% from
January 30, 1999 levels.

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At January 29, 2000, Holdings had variable-rate debt
totaling $27.0 million in principal amount and having a fair
 value of $27.0 million. These instruments are entered into
for purposes other than trading. These borrowings are under the
New Credit Facility (see Notes to Consolidated Financial
StatementsNote 7, Long-term debt). If
interest rates were to increase by 10% from their levels at
January 29, 2000, Holdings would incur additional annual
interest expense of approximately $0.2 million. At
January 30, 1999, Holdings had variable-rate debt totaling
$22.7 million in principal amount and having a fair value of
 $22.7 million. Holdings would have incurred additional
interest expense of approximately $0.2 million had interest
rates increased by 10% from their levels at January 30,
1999.

Holdings has entered into interest rate swap agreements with a
combined notional amount of $50.0 million to reduce its
exposure to adverse fluctuations in interest rates relating to
this floating-rate debt, rather than for trading purposes.
Holdings has not entered into any derivative financial
instruments for trading purposes. If floating rates were to
increase by 10% from their levels at January 29, 2000 and
January 30, 1999, Holdings would incur additional annual
interest expense of approximately $0.1 million after taking
into account the effect of the interest rate swap agreements.

Foreign Exchange Rates

A substantial majority of Holdings sales, expenses and cash
 flows are transacted in U.S. dollars. For the fiscal year ended
January 29, 2000, sales denominated in currencies other than
 U.S. dollars (primarily Mexican peso and the Canadian dollar)
totaled $7.4 million, or approximately 6.2% of total sales.
Net loss denominated in currencies other than U.S. dollars
totaled $0.1 million, or approximately 5% of total net loss
before extraordinary item. An adverse change in exchange rates of
 10% would have resulted in a decrease in sales of
$0.7 million and an immaterial decrease in net loss for the
fiscal year ended January 29, 2000. Holdings
subsidiaries that operate in Mexico and Canada have certain
accounts receivable and payable accounts in their home currencies
 which further mitigate the impact of foreign exchange rate
changes. Holdings has no foreign currency exchange contracts.

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Item 8. Financial Statements and Supplementary Data.

Iron Age Holdings Corporation

Consolidated Financial Statements

Years ended January 29, 2000 and January 30, 1999

Contents

|                                                                          |  |  |    | 
|------------------------------------------------------------------------- |  |  | -- | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Report of Independent Auditors                                            |  |  | 20 | 
|                                                                         
|Audited Consolidated Financial Statements                                 |  |  |    | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Consolidated Balance Sheets                                               |  |  | 21 | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Consolidated Statements of Income                                         |  |  | 22 | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Consolidated Statements of Stockholders Equity and
	Comprehensive Income |  |  | 23 | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Consolidated Statements of Cash Flows                                     |  |  | 24 | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Notes to Consolidated Financial Statements                                |  |  | 26 | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Schedule II-Valuation and Qualifying Accounts                             |  |  | 50 | 

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REPORT OF INDEPENDENT AUDITORS

Board of Directors



We have audited the accompanying consolidated balance sheets of
Iron Age Holdings Corporation (Holdings) as of
January 29, 2000 and January 30, 1999, and the related
consolidated statements of income, stockholders equity and
comprehensive income, and cash flows for the years ended
January 29, 2000 and January 30, 1999, the period
February 27, 1997 through January 31, 1998 and the
period January 26, 1997 through February 26, 1997. Our
audits also included the financial statement schedule listed in
the index at Item 8. These financial statements and schedule
 are the responsibility of Holdings management. Our
responsibility is to express an opinion on these financial
statements and schedule based upon our audits.

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

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Iron Age Holdings Corporation at
January 29, 2000 and January 30, 1999, and the
consolidated results of their operations and their cash flows for
 the years ended January 29, 2000 and January 30, 1999,
 the period February 27, 1997 through January 31, 1998
and the period January 26, 1997 through February 26,
1997, in conformity with accounting principles generally accepted
 in the United States. Also, in our opinion, the related
financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.

Ernst & Young LLP

Pittsburgh, Pennsylvania



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Iron Age Holdings Corporation

Consolidated Balance Sheets

|                                     |                                            |                                                                                                                                                             |       |             |         |   |   |         |         |  
|------------------------------------ | ------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ----------- | ------- | - | - | ------- | ------- | -
|                                     |                                            |                                                                                                                                                            
|                                     |                                            | Successor                                                                                                                                                  
|                                     |                                            |                                                                                                                                                            
|                                     |                                            | January 29,                                                                                                                                                 |       | January 30,
|                                     |                                            | 2000                                                                                                                                                        |       | 1999       
|                                     |                                            |                                                                                                                                                            
|                                     |                                            |                                                                                                                                                            
|                                     |                                            |                                                                                                                                                            
|                                     |                                            | (In Thousands)                                                                                                                                             
|                                    
|                                    
|                                    
|                                    
|Assets                               |                                            |                                                                                                                                                             |       |             |         |   |   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Current assets:                            |                                                                                                                                                             |       |             |         |   |   |         |        
|                                     |                                            | Cash and cash equivalents                                                                                                                                   |       | $           | 269     |   |   | $       | 517     |  
|                                     |                                            | Accounts receivable, net                                                                                                                                    |       |             | 17,204  |   |   |         | 16,965  |  
|                                     |                                            | Inventories                                                                                                                                                 |       |             | 34,410  |   |   |         | 36,681  |  
|                                     |                                            | Prepaid expenses                                                                                                                                            |       |             | 1,728   |   |   |         | 4,469   |  
|                                     |                                            | Deferred income taxes                                                                                                                                       |       |             | 875     |   |   |         | 861     |  
|                                     |                                            |                                                                                                                                                            
|                                     | Total current assets                       |                                                                                                                                                             |       | 54,486      |         |   |   | 59,493  |        
|                                     | Other noncurrent assets                    |                                                                                                                                                             |       | 1,537       |         |   |   | 431     |        
|                                     | Property and equipment, net                |                                                                                                                                                             |       | 10,463      |         |   |   | 11,008  |        
|                                     | Intangible assets, net                     |                                                                                                                                                             |       | 104,267     |         |   |   | 109,100 |        
|                                     |                                            |                                                                                                                                                            
|                                     | Total assets                               |                                                                                                                                                             | $     | 170,753     |         |   | $ | 180,032 |        
|                                     |                                            |                                                                                                                                                            
|                                     |                                            |                                                                                                                                                            
|                                    
|Liabilities and Stockholders Equity |                                            |                                                                                                                                                             |       |             |         |   |   |        
|                                    
|                                    
|                                    
|                                    
|Current liabilities:                 |                                            |                                                                                                                                                             |       |             |         |   |   |        
|                                     |                                            | Current maturities of long-term debt                                                                                                                        |       | $           | 458     |   |   | $       | 544     |  
|                                     |                                            | Accounts payable                                                                                                                                            |       |             | 2,573   |   |   |         | 3,307   |  
|                                     |                                            | Accrued expenses                                                                                                                                            |       |             | 7,216   |   |   |         | 8,134   |  
|                                     |                                            |                                                                                                                                                            
|                                     | Total current liabilities                  |                                                                                                                                                             |       | 10,247      |         |   |   | 11,985  |        
|                                     | Long-term debt, less current maturities    |                                                                                                                                                             |       | 139,530     |         |   |   | 150,514 |        
|                                     | Other noncurrent liabilities               |                                                                                                                                                             |       | 430         |         |   |   | 516     |        
|                                     | Deferred income taxes                      |                                                                                                                                                             |       | 3,762       |         |   |   | 4,956   |        
|                                     |                                            |                                                                                                                                                            
|                                     | Total liabilities                          |                                                                                                                                                             |       | 153,969     |         |   |   | 167,971 |        
|                                    
|Commitments and contingencies        |                                            |                                                                                                                                                             |      |             |         |   |  |        
|Redeemable preferred stock           |                                            |                                                                                                                                                             | 5,361 |             |         |   |  |        
|                                    
|                                    
|                                    
|                                    
|                                    
|Stockholders equity:                |                                            |                                                                                                                                                             |       |             |         |   |   |        
|                                     |                                            | Common stock, $.01 par value, 200,000 shares authorized,
	99,992 and 99,625 issued and outstanding at January 29, 2000
	 and January 30, 1999, respectively |       |             | 1       |   |   |         | 1       |  
|                                     |                                            | Additional paid-in capital                                                                                                                                  |       |             | 38,099  |   |   |         | 38,086  |  
|                                     |                                            | Accumulated deficit                                                                                                                                         |       |             | (26,553 | ) |   |         | (25,840 | )
|                                     |                                            | Other comprehensive loss                                                                                                                                    |       |             | (124    | ) |   |         | (186    | )
|                                     |                                            |                                                                                                                                                            
|                                     | Total stockholders equity                 |                                                                                                                                                             |       | 11,423      |         |   |   | 12,061  |        
|                                     |                                            |                                                                                                                                                            
|                                     | Total liabilities and stockholders equity |                                                                                                                                                             | $     | 170,753     |         |   | $ | 180,032 |        
|                                     |                                            |                                                                                                                                                            
|                                     |                                            |                                                                                                                                                            

See accompanying notes.

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##### Table of Contents



Iron Age Holdings Corporation

Consolidated Statements of Income

|                                               |  |                  |         |                   |  |                  |         |                   |  |   |         |  |  |   |        |  
|---------------------------------------------- |  | ---------------- | ------- | ----------------- |  | ---------------- | ------- | ----------------- |  | - | ------- |  |  | - | ------ | -
|                                               |  |                  |         |                  
|                                               |  | Successor        |         | Predecessor      
|                                               |  |                 
|                                               |  |                 
|                                               |  |                  |         | February 27, 1997 |  | January 26, 1997
|                                               |  | Year ended       |         | through           |  | through         
|                                               |  | January 29, 2000 |         | January 30, 1999  |  | January 31, 1998 |         | February 26, 1997
|                                               |  |                 
|                                               |  |                 
|                                               |  | (In Thousands)  
|Net sales                                      |  | $                | 120,351 |                   |  | $                | 124,294 |                   |  | $ | 107,769 |  |  | $ | 10,937 |  
|Cost of sales                                  |  |                  | 59,525  |                   |  |                  | 63,228  |                   |  |   | 53,304  |  |  |   | 5,610  |  
|                                               |  |                 
|Gross profit                                   |  |                  | 60,826  |                   |  |                  | 61,066  |                   |  |   | 54,465  |  |  |   | 5,327  |  
|                                              
|Selling, general and administrative            |  |                  | 41,515  |                   |  |                  | 46,854  |                   |  |   | 36,541  |  |  |   | 5,120  |  
|Depreciation                                   |  |                  | 1,816   |                   |  |                  | 1,670   |                   |  |   | 1,443   |  |  |   | 121    |  
|Amortization of intangible assets              |  |                  | 3,638   |                   |  |                  | 3,523   |                   |  |   | 2,983   |  |  |   | 117    |  
|                                               |  |                 
|Operating income (loss)                        |  |                  | 13,857  |                   |  |                  | 9,019   |                   |  |   | 13,498  |  |  |   | (31    | )
|                                              
|Gain on divestiture                            |  |                  |        |                   |  |                  | 1,678   |                   |  |   |        |  |  |   |       |  
|Interest expense                               |  |                  | 15,740  |                   |  |                  | 14,844  |                   |  |   | 9,855   |  |  |   | 1,116  |  
|                                               |  |                 
|                                              
|(Loss) income before income taxes              |  |                  | (1,883  | )                 |  |                  | (4,147  | )                 |  |   | 3,643   |  |  |   | (1,147 | )
|                                              
|Provision (benefit) for income taxes           |  |                  | 211     |                   |  |                  | (874    | )                 |  |   | 1,686   |  |  |   | (452   | )
|                                               |  |                 
|(Loss) income before extraordinary gain (loss) |  |                  | (2,094  | )                 |  |                  | (3,273  | )                 |  |   | 1,957   |  |  |   | (695   | )
|Extraordinary gain (loss), net of tax          |  |                  | 1,804   |                   |  |                  | (4,015  | )                 |  |   |        |  |  |   |       |  
|                                               |  |                 
|Net (loss) income                              |  | $                | (290    | )                 |  | $                | (7,288  | )                 |  | $ | 1,957   |  |  | $ | (695   | )
|                                               |  |                 
|                                               |  |                 

See accompanying notes.

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Iron Age Holdings Corporation

Consolidated Statements of Stockholders Equity and
Comprehensive Income

|                             |                       |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  |         |  
|---------------------------- | --------------------- | --------------------------------------------------- | ------- | ------- | ------ | ------------ | - | ------------- | - | ------------- | ------ | ----- | ------ | - | ------- | - | ------- | - | ---- | - | ---- | - | ------ |  | ------- | -
|                             |                       |                                                     |         |         |        | Retained     |   |               |   |              
|                             |                       | Common Stock                                        |         |         |        | Earnings     |   | Other         |   |              
|                             |                       |                                                     |         | Paid-in |        | (Accumulated |   | Comprehensive |   |              
|                             |                       | Shares                                              |         | Amounts |        | Capital      |   | Deficit)      |   | (Loss) Income |        | Total
|                             |                       |                                                    
|                             |                       |                                                    
|                             |                       | (In Thousands)                                     
|                            
|                            
|                            
|                            
|Predecessor                  |                       |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        | 
|Balance at January 25, 1997  |                       |                                                     | 101,020 |         |        | $            | 1 |               |   | $             | 7,328  |       |        | $ | 9,310   |   |         | $ | (223 | ) |      | $ | 16,416 | 
|                            
|                            
|                            
|                            
|                             | Comprehensive loss:   |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  |        
|                             |                       | Net loss                                            |         |         |       |              |   |               |  |               |        |       |       |   |         |   | (695    | ) |      |   |     |   |        |  | (695    | )
|                             |                       | Foreign currency translation adjustment, net of tax |         |         |       |              |   |               |  |               |        |       |       |   |         |   |        |   |      |   | (22  | ) |        |  | (22     | )
|                             |                       |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        | 
|                             |                       | Comprehensive loss                                  |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  | (717    | )
|                             |                       | Stock-based compensation                            |         |         |       |              |   |               |  |               |        |       | 1,054  |   |         |   |        |   |      |   |     |   |        |  | 1,054   |  
|                             |                       |                                                    
|Balance at February 26, 1997 |                       |                                                     | 101,020 |         |        | $            | 1 |               |   | $             | 8,382  |       |        | $ | 8,615   |   |         | $ | (245 | ) |      | $ | 16,753 | 
|                             |                       |                                                    
|                             |                       |                                                    
|Successor                    |                       |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        | 
|Balance at February 27, 1997 |                       |                                                     |        |         |        | $            |  |               |   | $             |       |       |        | $ |        |   |         | $ |     |   |      | $ |       | 
|                            
|                            
|                            
|                            
|                             | Comprehensive income: |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  |        
|                             |                       | Net income                                          |         |         |       |              |   |               |  |               |        |       |       |   |         |   | 1,957   |   |      |   |     |   |        |  | 1,957   |  
|                             |                       | Foreign currency translation adjustment, net of tax |         |         |       |              |   |               |  |               |        |       |       |   |         |   |        |   |      |   | (65  | ) |        |  | (65     | )
|                             |                       |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        | 
|                             |                       | Comprehensive income                                |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  | 1,892   |  
|                             |                       | Capital contribution                                |         |         | 99,625 |              |   |               | 1 |               |        |       | 38,086 |   |         |   |        |   |      |   |     |   |        |  | 38,087  |  
|                             |                       | Dividend accrued on Preferred stock                 |         |         |       |              |   |               |  |               |        |       |       |   |         |   | (2,131  | ) |      |   |     |   |        |  | (2,131  | )
|                             |                       |                                                    
|Balance at January 31, 1998  |                       |                                                     | 99,625  |         |        |              | 1 |               |   |               | 38,086 |       |        |   | (174    | ) |         |   | (65  | ) |      |   | 37,848 | 
|                            
|                            
|                            
|                            
|                             | Comprehensive loss:   |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  |        
|                             |                       | Net loss                                            |         |         |       |              |   |               |  |               |        |       |       |   |         |   | (7,288  | ) |      |   |     |   |        |  | (7,288  | )
|                             |                       | Foreign currency translation adjustment, net of tax |         |         |       |              |   |               |  |               |        |       |       |   |         |   |        |   |      |   | (121 | ) |        |  | (121    | )
|                             |                       |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        | 
|                             |                       | Comprehensive loss                                  |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  | (7,409  | )
|                             |                       | Dividends paid on preferred stock                   |         |         |       |              |   |               |  |               |        |       |       |   |         |   | (633    | ) |      |   |     |   |        |  | (633    | )
|                             |                       | Dividends paid on common stock                      |         |         |       |              |   |               |  |               |        |       |       |   |         |   | (17,745 | ) |      |   |     |   |        |  | (17,745 | )
|                             |                       |                                                    
|Balance at January 30, 1999  |                       |                                                     | 99,625  |         |        |              | 1 |               |   |               | 38,086 |       |        |   | (25,840 | ) |         |   | (186 | ) |      |   | 12,061 | 
|                             |                       |                                                    
|                             | Comprehensive loss:   |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  |        
|                             |                       | Net loss                                            |         |         |       |              |   |               |  |               |        |       |       |   |         |   | (290    | ) |      |   |     |   |        |  | (290    | )
|                             |                       | Foreign currency translation adjustment, net of tax |         |         |       |              |   |               |  |               |        |       |       |   |         |   |        |   |      |   | 62   |   |        |  | 62      |  
|                             |                       |                                                     |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        | 
|                             |                       | Comprehensive loss                                  |         |         |        |              |   |               |   |               |        |       |        |   |         |   |         |   |      |   |      |   |        |  | (228    | )
|                             |                       | Stock option exercise                               |         |         | 367    |              |   |               |  |               |        |       | 13     |   |         |   |        |   |      |   |     |   |        |  | 13      |  
|                             |                       | Dividends accrued on preferred stock                |         |         |       |              |   |               |  |               |        |       |       |   |         |   | (423    | ) |      |   |     |   |        |  | (423    | )
|                             |                       |                                                    
|Balance at January 29, 2000  |                       |                                                     | 99,992  |         |        | $            | 1 |               |   | $             | 38,099 |       |        | $ | (26,553 | ) |         | $ | (124 | ) |      | $ | 11,423 | 
|                             |                       |                                                    
|                             |                       |                                                    

See accompanying notes

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##### Table of Contents



Iron Age Holdings Corporation

Consolidated Statements of Cash Flows

|                                                                                                    |                                                              |                                         |         |                  |        |                  |          |                   |      |   |          |       |        |   |        |       |       |  
|--------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------- | ------- | ---------------- | ------ | ---------------- | -------- | ----------------- | ---- | - | -------- | ----- | ------ | - | ------ | ----- | ----- | -
|                                                                                                    |                                                              |                                         |         |                  |        |                 
|                                                                                                    |                                                              | Successor                               |         | Successor        |        | Predecessor     
|                                                                                                    |                                                              |                                        
|                                                                                                    |                                                              |                                        
|                                                                                                    |                                                              |                                         |         | February 27      |        | January 26      
|                                                                                                    |                                                              | Year Ended                              |         | Year Ended       |        | 1997 through     |          | 1997 through     
|                                                                                                    |                                                              | January 29, 2000                        |         | January 30, 1999 |        | January 31, 1998 |          | February 26, 1997
|                                                                                                    |                                                              |                                        
|                                                                                                    |                                                              |                                        
|                                                                                                    |                                                              | (In Thousands)                         
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Operating Activities                                                                                |                                                              |                                         |         |                  |        |                  |          |                   |      |   |          |       |        |   |        |      
|Net (loss) income                                                                                   |                                                              | $                                       | (290    | )                |        | $                | (7,288   | )                 |      | $ | 1,957    |       |        | $ | (695   | )    
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Adjustments to reconcile net (loss) income to net cash provided
	by (used in) operating activities: |                                                              |                                         |         |                  |        |                  |          |                   |      |   |          |       |        |   |        |      
|                                                                                                    | Extraordinary (gain) loss, net of tax                        |                                         |         | (1,804           | )      |                  |          | 4,015             |      |   |          |      |        |   |        |      |      
|                                                                                                    | Gain on divestiture                                          |                                         |         |                 |        |                  |          | (1,678            | )    |   |          |      |        |   |        |      |      
|                                                                                                    | Depreciation and amortization                                |                                         |         | 5,943            |        |                  |          | 5,592             |      |   |          | 4,727 |        |   |        | 246   |      
|                                                                                                    | Amortization of deferred financing fees included in interest |                                         |         | 897              |        |                  |          | 606               |      |   |          | 613   |        |   |        | 16    |      
|                                                                                                    | Accretion of original issue discount                         |                                         |         | 3,421            |        |                  |          | 2,400             |      |   |          |      |        |   |        |      |      
|                                                                                                    | Provision for losses on accounts receivable                  |                                         |         | 174              |        |                  |          | (107              | )    |   |          | 30    |        |   |        | 10    |      
|                                                                                                    | Deferred income taxes                                        |                                         |         | (1,208           | )      |                  |          | (2,383            | )    |   |          | (596  | )      |   |        |      |      
|                                                                                                    | Stock-based compensation                                     |                                         |         |                 |        |                  |          |                  |      |   |          |      |        |   |        | 1,054 |      
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                    | Changes in operating assets and liabilities:                 |                                         |         |                  |        |                  |          |                   |      |   |          |       |        |   |        |       |      
|                                                                                                    |                                                              | Accounts receivable                     |         |                  | (413   | )                |          |                   | 85   |   |          |       | 372    |   |        |       | (954  | )
|                                                                                                    |                                                              | Inventories                             |         |                  | 2,271  |                  |          |                   | 502  |   |          |       | (6,976 | ) |        |       | 797   |  
|                                                                                                    |                                                              | Prepaid expenses                        |         |                  | 2,741  |                  |          |                   | 99   |   |          |       | 232    |   |        |       | 65    |  
|                                                                                                    |                                                              | Other noncurrent assets and liabilities |         |                  | (34    | )                |          |                   | (15  | ) |          |       | (14    | ) |        |       | 20    |  
|                                                                                                    |                                                              | Accounts payable                        |         |                  | (734   | )                |          |                   | (981 | ) |          |       | (1,375 | ) |        |       | (573  | )
|                                                                                                    |                                                              | Accrued expenses                        |         |                  | (2,224 | )                |          |                   | 593  |   |          |       | (882   | ) |        |       | 1,450 |  
|                                                                                                    |                                                              |                                        
|Net cash provided by (used in) operating activities                                                 |                                                              |                                         | 8,740   |                  |        |                  | 1,440    |                   |      |   | (1,912   | )     |        |   | 1,436  |      
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Investing Activities                                                                                |                                                              |                                         |         |                  |        |                  |          |                   |      |   |          |       |        |   |        |      
|Net cash used in business acquisitions                                                              |                                                              |                                         |        |                  |        |                  | (5,241   | )                 |      |   | (141,717 | )     |        |   |       |      
|Capitalization of internal use software costs                                                       |                                                              |                                         | (1,277  | )                |        |                  |         |                   |      |   |         |       |        |   |       |      
|Proceeds from divestiture                                                                           |                                                              |                                         |        |                  |        |                  | 2,544    |                   |      |   |         |       |        |   |       |      
|Purchases of property and equipment                                                                 |                                                              |                                         | (1,760  | )                |        |                  | (2,338   | )                 |      |   | (2,365   | )     |        |   | (117   | )    
|                                                                                                    |                                                              |                                        
|Net cash used in investing activities                                                               |                                                              |                                         | (3,037  | )                |        |                  | (5,035   | )                 |      |   | (144,082 | )     |        |   | (117   | )    
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Financing Activities                                                                                |                                                              |                                         |         |                  |        |                  |          |                   |      |   |          |       |        |   |        |      
|Borrowing under revolving credit agreement                                                          |                                                              |                                         | 24,925  |                  |        |                  | 49,150   |                   |      |   | 44,450   |       |        |   | (1,909 | )    
|Proceeds from senior term notes                                                                     |                                                              |                                         |        |                  |        |                  |         |                   |      |   | 65,000   |       |        |   |       |      
|Proceeds from senior subordinated notes                                                             |                                                              |                                         |        |                  |        |                  | 100,000  |                   |      |   | 14,550   |       |        |   |       |      
|Proceeds from senior discount notes                                                                 |                                                              |                                         |        |                  |        |                  | 25,001   |                   |      |   |         |       |        |   |       |      
|Capital contribution                                                                                |                                                              |                                         |        |                  |        |                  |         |                   |      |   | 40,000   |       |        |   |       |      
|Issuance of common stock                                                                            |                                                              |                                         | 13      |                  |        |                  |         |                   |      |   |         |       |        |   |       |      
|Issuance of Series B redeemable preferred stock                                                     |                                                              |                                         | 4,938   |                  |        |                  |         |                   |      |   |         |       |        |   |       |      
|Issuance of Series A preferred stock                                                                |                                                              |                                         |        |                  |        |                  |         |                   |      |   | 14,900   |       |        |   |       |      
|Issuance of stock purchase warrants                                                                 |                                                              |                                         |        |                  |        |                  |         |                   |      |   | 100      |       |        |   |       |      
|Principal payments on debt                                                                          |                                                              |                                         | (35,460 | )                |        |                  | (127,683 | )                 |      |   | (23,531  | )     |        |   | (357   | )    
|Payment of financing costs                                                                          |                                                              |                                         | (317    | )                |        |                  | (6,897   | )                 |      |   | (7,468   | )     |        |   |       |      
|Call premium on early extinguishment of old subordinated notes                                      |                                                              |                                         |        |                  |        |                  | (1,562   | )                 |      |   |         |       |        |   |       |      
|Redemption of Holdings Series A Preferred Stock, including
	cumulative unpaid dividends             |                                                              |                                         |        |                  |        |                  | (17,664  | )                 |      |   |         |       |        |   |       |      
|Dividends paid on common stock                                                                      |                                                              |                                         |        |                  |        |                  | (17,745  | )                 |      |   |         |       |        |   |       |      
|Principal payments on capital leases, net                                                           |                                                              |                                         | (112    | )                |        |                  | (333     | )                 |      |   | (328     | )     |        |   | (33    | )    
|                                                                                                    |                                                              |                                        
|Net cash (used in) provided by financing activities                                                 |                                                              |                                         | (6,013  | )                |        |                  | 2,267    |                   |      |   | 147,673  |       |        |   | (2,299 | )    
|Effect of exchange rate changes on cash and cash equivalents                                        |                                                              |                                         | 62      |                  |        |                  | (224     | )                 |      |   | (110     | )     |        |   | (37    | )    
|                                                                                                    |                                                              |                                        
|(Decrease) increase in cash and cash equivalents                                                    |                                                              |                                         | (248    | )                |        |                  | (1,552   | )                 |      |   | 1,569    |       |        |   | (1,017 | )    
|Cash and cash equivalents at beginning of year                                                      |                                                              |                                         | 517     |                  |        |                  | 2,069    |                   |      |   | 500      |       |        |   | 1,517  |      
|                                                                                                    |                                                              |                                        
|Cash and cash equivalents at end of year                                                            |                                                              | $                                       | 269     |                  |        | $                | 517      |                   |      | $ | 2,069    |       |        | $ | 500    |      
|                                                                                                    |                                                              |                                        
|                                                                                                    |                                                              |                                        

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##### Table of Contents



Consolidated Statements of Cash Flows (continued)

|                                                                          |                                        |                               |     |                  |   |                  |     |                   |        |   |     |         |         |   |   |     |   | 
|------------------------------------------------------------------------- | -------------------------------------- | ----------------------------- | --- | ---------------- | - | ---------------- | --- | ----------------- | ------ | - | --- | ------- | ------- | - | - | --- | - | 
|                                                                          |                                        |                               |     |                  |   |                 
|                                                                          |                                        | Successor                     |     | Successor        |   | Predecessor     
|                                                                          |                                        |                               |     |                  |   |                 
|                                                                          |                                        |                               |     | February 27      |   | January 26      
|                                                                          |                                        | Year Ended                    |     | Year Ended       |   | 1997 through     |     | 1997 through     
|                                                                          |                                        | January 29, 2000              |     | January 30, 1999 |   | January 31, 1998 |     | February 26, 1997
|                                                                          |                                        |                              
|                                                                          |                                        |                              
|                                                                          |                                        | (In Thousands)               
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Supplemental disclosures of cash flow information                         |                                        |                               |     |                  |   |                  |     |                   |        |   |     |         |         |   |   |    
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Cash paid during the period for:                                          |                                        |                               |     |                  |   |                  |     |                   |        |   |     |         |         |   |   |    
|                                                                          | Interest                               |                               | $   | 11,728           |   |                  | $   | 10,377            |        |   | $   | 7,837   |         |   | $ | 552 |  
|                                                                          | Income taxes                           |                               | $   | 2,371            |   |                  | $   | 1,254             |        |   | $   | 1,138   |         |   | $ | 7   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Supplemental schedule of noncash investing and financing
	activities      |                                        |                               |     |                  |   |                  |     |                   |        |   |     |         |         |   |   |    
|Dividends accrued on redeemable preferred stock                           |                                        | $                             | 423 |                  |   | $                |    |                   |        | $ |    |         |         | $ |  |    
|Write-off of deferred financing costs                                     |                                        | $                             | 730 |                  |   | $                |    |                   |        | $ |    |         |         | $ |  |    
|Capital lease agreements for equipment                                    |                                        | $                             | 226 |                  |   | $                | 373 |                   |        | $ | 206 |         |         | $ |  |    
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Assets acquired and liabilities assumed in connection with
	acquisitions: |                                        |                               |     |                  |   |                  |     |                   |        |   |     |         |         |   |   |    
|                                                                          |                                        | Fair value of assets acquired |     | $                |  |                  |     | $                 | 6,626  |   |     | $       | 171,328 |   |   | $   |  | 
|                                                                          |                                        | Liabilities assumed           |     |                  |  |                  |     |                   | (1,236 | ) |     |         | (21,946 | ) |   |     |  | 
|                                                                          |                                        |                              
|                                                                          |                                        | Cash paid                     |     |                  |  |                  |     |                   | 5,390  |   |     |         | 149,382 |   |   |     |  | 
|                                                                          |                                        | Less fees and expenses        |     |                  |  |                  |     |                   | (149   | ) |     |         | (7,468  | ) |   |     |  | 
|                                                                          |                                        | Less cash acquired            |     |                  |  |                  |     |                   |       |   |     |         | (197    | ) |   |     |  | 
|                                                                          |                                        |                              
|                                                                          | Net cash used in business acquisitions |                               | $   |                 |   |                  | $   | 5,241             |        |   | $   | 141,717 |         |   | $ |    |  
|                                                                          |                                        |                              
|                                                                          |                                        |                              

See accompanying notes.

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##### Table of Contents



Iron Age Holdings Corporation

Notes to Consolidated Financial Statements

January 29, 2000 and January 30, 1999

1. Organization and Significant Accounting Policies

Organization and Activities

The accompanying consolidated financial statements include the
accounts of Iron Age Holdings Corporation and its wholly owned
subsidiaries, Iron Age Corporation (Iron Age), Falcon
 Shoe Mfg. Co. (Falcon), Iron Age Investment Company,
 Iron Age Mexico S.A. de C.V., Iron Age Canada Ltd., IA Vision
Acquisition Co., and Safety Supplies and Service Company, Inc.
(together, Holdings). All significant intercompany
accounts and transactions have been eliminated in consolidation.

Holdings is majority-owned by Fenway Partners Capital Fund, L.P.
(Fenway). Holdings was acquired by the Fenway and
certain other investors, in partnership with certain members of
management, effective February 26, 1997 (the Fenway
Acquisition) (see Note 2).

The accompanying consolidated financial statements present the
twelve-month period ended January 31, 1998 in two
components. The period January 26, 1997 through
February 26, 1997 includes the historical results of Iron
Age Holdings Corporation prior to the Fenway Acquisition and the
period after February 26, 1997 includes the results of Iron
Age Holdings Corporation after the Fenway Acquisition. In these
financial statements, Iron Age Holdings Corporation is referred
to as the Predecessor prior to February 26, 1997
 and as the Successor or Holdings after
such date.

Effective April 24, 1998, Holdings refinanced its old credit
 facility (the Old Credit Facility) and its old
subordinated notes (the Old Subordinated Notes) with
a new credit facility (the New Credit Facility),
9 7/8% senior subordinated notes due 2008 (the Senior
Subordinated Notes), and 12 1/8% senior discount notes
 due 2009 (the Discount Notes) (collectively, the
April 1998 Transactions) (see Note 7).

Holdings distributes and manufactures work footwear with
operations concentrated in North America. As a percentage of
sales, 97% and 3% of Holdings operations are related to
distributing and manufacturing, respectively. Holdings has one
reportable segment, distribution of work footwear in the United
States.

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##### Table of Contents



1. Organization and Significant Accounting Policies
(continued)

Fiscal Year

Holdings fiscal year ends on the last Saturday in January.
The 1999 and 2000 fiscal years include 52 weeks. The
combined periods of January 26, 1997 through
February 26, 1997 and February 27, 1997 through
January 31, 1998 include 53 weeks.

Cash and Cash Equivalents

Holdings considers all highly liquid investments with a maturity
of 90 days or less at the time of original purchase to be
cash equivalents.

Inventories

Approximately 93% of inventories at January 29, 2000 and
January 30, 1999 are stated at the lower of last-in,
first-out (LIFO) cost or market. The remaining
inventories are stated at the lower of first-in, first-out
(FIFO) cost or market.

Catalog Costs

Holdings produces periodic catalogs and amortizes the mailing and
 production costs over the related revenue stream, generally four
 to twelve months. Holdings has $789,000 and $766,000 of
unamortized catalog costs at January 29, 2000 and
January 30, 1999, respectively. For the year ended
January 29, 2000, the year ended January 30, 1999 and
the periods February 27, 1997 through January 31, 1998
and January 26, 1997 through February 26, 1997,
advertising expense recorded by Holdings was $2,126,000,
$2,455,000, $1,801,000, and $110,000, respectively.

Property and Equipment

Property and equipment are stated at cost less accumulated
depreciation. Depreciation is provided on the straight-line
method based on estimated useful lives, as follows:

|                          |  |           
|------------------------- |  | ----------
|Building and improvements |  | 40 years  
|Machinery and equipment   |  | 3-10 years

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##### Table of Contents



1. Organization and Significant Accounting Policies
(continued)

Property and Equipment (continued)

Leasehold improvements are amortized over the shorter of the
useful life of the asset or the term of the lease. Expenses for
repairs, maintenance and renewals are charged to operations as
incurred. Expenditures which improve an asset or extend its
useful life are capitalized.

Intangible Assets

GoodwillGoodwill represents the excess of amounts paid and
liabilities assumed over the fair value of identifiable tangible
and intangible assets acquired in purchase business combinations.
 This amount is amortized using the straight-line method over a
period of 40 years. Holdings evaluates the carrying value of
 goodwill for potential impairment on an ongoing basis. Such
evaluation considers projected future operating results, trends
and other circumstances. If factors indicated that goodwill could
 be impaired, Holdings would use an estimate of the related
undiscounted future cash flows over the remaining life of the
goodwill in measuring whether the goodwill is recoverable. If
such an analysis indicated that impairment had occurred, Holdings
 would adjust the book value of the goodwill to fair value.

Customer ListsCustomer lists represent the estimated cost
of replacing Holdings customer base and are being amortized
 by the straight-line method over 15 years. The amortization
 period of 15 years approximates Holdings historical
customer loss experience.

Deferred Financing CostDeferred financing costs relate to
the costs of obtaining financing. These costs are being amortized
 over the period the related loans are outstanding.

Internal Use Software Costs

Effective February 1, 1998, Holdings adopted Statement of
Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. Holdings capitalized
approximately $1,277,000 and $233,000 related to internal use
software costs for the fiscal years ended January 29, 2000
and January 30, 1999, respectively. Internal use software
costs are being amortized by the straight-line method over three
to five years.

Foreign Currency Translation

The assets and liabilities of Holdings foreign subsidiaries
 are measured using the local currency as the functional currency
 and are translated into U.S. dollars at exchange rates as of the
 balance sheet date. Income statement amounts are translated at
the weighted average rates of exchange during the year. The
translation adjustment is accumulated in other
comprehensive income (loss). Foreign currency transaction
gains and losses are included in determining net income. Such
amounts are not material.

Revenue Recognition

Revenue from product sales is recognized at the time products are
 shipped.

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##### Table of Contents



1. Organization and Significant Accounting Policies
(continued)

Financial Instruments

Holdings periodically enters into interest rate swap agreements
to moderate its exposure to interest rate changes. Holdings has
effectively converted $25 million of its New Credit Facility to a
 fixed rate basis and $25 million of its Senior Subordinated
 Notes to a floating rate basis. The interest rate swap agreement
 related to the New Credit Facility has a notional amount of
$25 million and involves the payment of amounts at a fixed
rate of 6.225% in exchange for floating rate interest payments
computed at the LIBOR rate through March 14, 2000. The
interest rate swap agreement related to the Senior Subordinated
Notes has a notional amount of $25 million and involves the
payment of floating rate amounts computed at 4.16% above the
LIBOR rate in exchange for fixed interest payments at a rate of
9.875% through May 1, 2003. Interest payment amounts are
exchanged over the lives of the agreements without an exchange of
 the underlying principal amounts. The differential to be paid or
 received is accrued as interest rates change and recognized as
an adjustment to interest expense related to the debt. The
related amount payable to or receivable from counterparties is
included in accrued interest. Based upon the terms of the
agreements, the fair values of the interest rate swap agreements
are not recognized in the financial statements. The fair value of
 the interest rate swap agreements are $(190,000) and $225,000 at
 January 29, 2000 and January 30, 1999, respectively.
Approximately 36% or $50 million of Holdings
outstanding long-term debt was subject to interest rate swap
agreements at January 29, 2000.

Stock-Based Compensation

Certain members of Holdings management are granted options
to purchase stock in Holdings. Holdings recognizes stock-based
compensation using the intrinsic value method. Compensation
expense related to stock option grants is reflected in
Holdings financial statements as a charge to income and as
an addition to paid-in capital. For disclosure purposes, pro
forma net income is provided as if the fair value method had been
 applied.

Income Taxes

Deferred income taxes are provided for the tax consequences of
temporary differences between financial statement carrying
amounts and the tax bases of assets and liabilities. The effect
on deferred taxes of a change in tax rates is recognized in
income in the period of the enactment.

Other Comprehensive Income

As of February 1, 1998, Holdings adopted Financial
Accounting Standards Board Statement No. 130, Reporting
Comprehensive Income. Statement No. 130 establishes rules
for the reporting and display of comprehensive income and its
components. Statement No. 130 requires foreign currency
translation gains and losses, which are reported separately in
stockholders equity, to be included in other comprehensive
income. The adoption of this statement had no impact on
Holdings net income or stockholders equity.

-29-



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1. Organization and Significant Accounting Policies
(continued)

Use of Estimates

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

2. Acquisitions and Divestitures

Iron Age Holdings Corporation (Predecessor)

On February 26, 1997, the Predecessor was acquired in a
leveraged buyout transaction by Holdings through an acquisition
corporation for approximately $143,550,000, including transaction
 costs of $6,962,000. Holdings was formed by Fenway and other
investors, including certain members of management, to effect the
 acquisition. The acquisition was financed by capital
contributions of approximately $34,037,000 (net of carryover
basis adjustment of $1,963,000), mandatorily redeemable preferred
 stock issued for $14,900,000 (the Holdings Series A
Preferred Stock), common stock purchase warrants issued for
 $100,000, borrowings under the Old Credit Facility of
$79,000,000, and the Old Subordinated Notes issued to certain
Outside Investors (see Note 12) in the amount of $14,550,000
 (net of a $450,000 discount).

The Fenway Acquisition of the Predecessor was accounted for under
 the purchase method of accounting because on a fully diluted
basis, 90% of the existing voting interest of Holdings common
stock was acquired through a new holding company which was
capitalized by a group of new shareholders, constituting a change
 in control of voting interest. The new holding company was
capitalized through the issuance of 88,625 shares of common stock
 and was owned 100% by Fenway prior to the acquisition of
Holdings. The new holding company was subsequently renamed Iron
Age Holdings Corporation. Accordingly, the purchase price was
allocated to the assets and liabilities assumed based on their
relative fair values. However, since certain members of
management had ownership in the Predecessor, the net assets
acquired were recorded at the reinvesting stockholders
carryover basis. Therefore, in allocating the purchase price of
Holdings among its net assets, the difference between the fair
values of the net assets acquired has been proportionately
reduced by approximately $1,963,000 with such amount being
charged against the gross stockholders equity of
$36,100,000. The adjustment to stockholders equity
represents the difference between the fair value of
managements 10% ownership and the carryover basis. Holdings
 recorded goodwill of approximately $84,073,000 in connection
with the transaction, which is being amortized on a straight-line
 basis over 40 years. The 40-year amortization period was
established based upon the characteristics of Holdings, its
distribution system and its products. Because of this purchase
price allocation, the accompanying consolidated financial
statements of Holdings are not directly comparable to those of
the Predecessor.

Holdings 1998 financial statements include the
Predecessors operations from the date of acquisition.

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2. Acquisitions and Divestitures (continued)

Knapp Shoes, Inc.

On March 14, 1997, Holdings acquired certain assets and
assumed certain liabilities of Knapp Shoes, Inc.
(Knapp) for approximately $5,832,000, including
transaction costs of approximately $506,000 (the Knapp
Acquisition). The Knapp Acquisition was funded with capital
 contributions from Fenway, New York Life Insurance Company,
American Home Assurance Company, and Banque Nationale de Paris of
 $4,000,000 and additional borrowings under the Old Credit
Facility of $1,326,000. The results of operations for Knapp are
included in the consolidated statement of income from the date of
 acquisition. Knapp was a distributor and manufacturer of work
and safety footwear. The Knapp Acquisition has been accounted for
 using the purchase method of accounting and, accordingly, the
purchase price and transaction costs have been allocated to
assets acquired and liabilities assumed based on their estimated
fair values. The excess of consideration paid over the estimated
fair value of assets acquired and liabilities assumed of
approximately $4,885,000 is being amortized on the straight-line
basis over 40 years.

Other Acquisitions

During the year ended January 30, 1999, Holdings acquired
the stock of Safety Supplies & Service Co., Inc.
(Safety Supplies), and acquired certain assets and
assumed certain liabilities of Safety Depot Ltd., ACT Safety,
Inc., J. Mars Knapp Shoes and Work-Saf, Inc. for
approximately $5,390,000, including transaction costs of
approximately $150,000. The results of operations are included
from the date of the acquisitions. The acquisitions have been
accounted for using the purchase method of accounting and,
accordingly, the purchase price and transaction costs have been
allocated to assets acquired and liabilities assumed based upon
their estimated fair values. The excess of consideration paid
over the estimated fair value of assets acquired and liabilities
assumed of approximately $2,849,000 is being amortized on the
straight-line basis, over 40 years.

Divestitures

On May 25, 1999, Holdings sold the assets of its safety and
medical products line, a component of Safety Supplies
business, which consisted primarily of inventory, with a carrying
 value of approximately $0.4 million to Stratford Safety
Products, Inc. for $0.5 million. The sale resulted in a gain
 of $0.1 million, which was reflected as a reduction of goodwill
that was recorded in connection with the acquisition of Safety
Supplies. Holdings net income from the safety and medical
products line was not material from the date of the acquisition
to the date of sale.

On September 9, 1998, Holdings announced the sale of the
Dunham trademark and related trademarks with no carrying value to
 New Balance Athletic Shoes, Inc. and New Balance Trading
Company, Ltd. (New Balance), effective
August 31, 1998, for $2.0 million and recorded a gain
of $1.7 million, net of certain transaction costs (the
Dunham Sale). Dunham wholesale sales were
$3.1 million in fiscal 1999, consisting of Dunham sales of
$1.3 million prior to the Dunham Sale, sales of on-hand
inventory to New Balance for approximately $0.6 million in
conjunction with the Dunham Sale and sales of Dunham products of
$1.2 million to New Balance after the Dunham Sale. In
conjunction with the sale, Holdings Falcon manufacturing
subsidiary agreed to manufacture for New Balance certain products
 which New Balance will continue to sell under the Dunham brand
name pursuant to a two-year supply agreement with New Balance.
The supply agreement does not contain a minimum purchase quantity
 and prices under the supply agreement are based upon the volume
purchased annually by New Balance.

3. Accounts Receivable

Accounts receivable are presented net of allowance for doubtful
accounts of approximately $444,000 and $275,000 as of
January 29, 2000 and January 30, 1999, respectively.
Holdings does not require collateral for its trade accounts
receivable. Management continually evaluates its accounts
receivable and adjusts its allowance for doubtful

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##### Table of Contents



accounts for changes in potential credit risk. Holdings serves a
diverse customer base and believes there is minimal concentration
 of credit risk.

4. Inventories

The major components of inventories are as follows:

|                                                      |  |                |        |             |  |   |        | 
|----------------------------------------------------- |  | -------------- | ------ | ----------- |  | - | ------ | 
|                                                      |  |               
|                                                      |  | Successor     
|                                                      |  |               
|                                                      |  |                |        |            
|                                                      |  | January 29,    |        | January 30,
|                                                      |  | 2000           |        | 1999       
|                                                      |  |               
|                                                      |  |               
|                                                      |  |               
|                                                      |  | (In Thousands)
|Finished products                                     |  | $              | 32,134 |             |  | $ | 33,814 | 
|Raw materials                                         |  |                | 2,602  |             |  |   | 3,143  | 
|                                                      |  |               
|                                                      |  |                | 34,736 |             |  |   | 36,957 | 
|Less excess of current cost over LIFO inventory value |  |                | 326    |             |  |   | 276    | 
|                                                      |  |               
|                                                      |  | $              | 34,410 |             |  | $ | 36,681 | 
|                                                      |  |               
|                                                      |  |               

5. Property and Equipment

Property and equipment consist of the following:

|                                               |  |                |        |             |  |   |        | 
|---------------------------------------------- |  | -------------- | ------ | ----------- |  | - | ------ | 
|                                               |  |               
|                                               |  | Successor     
|                                               |  |               
|                                               |  | January 29,    |        | January 30,
|                                               |  | 2000           |        | 1999       
|                                               |  |               
|                                               |  |               
|                                               |  |               
|                                               |  | (In Thousands)
|Land and buildings                             |  | $              | 3,314  |             |  | $ | 3,217  | 
|Vehicles                                       |  |                | 4,217  |             |  |   | 3,727  | 
|Furniture and fixtures                         |  |                | 1,380  |             |  |   | 1,234  | 
|Machinery and equipment                        |  |                | 6,217  |             |  |   | 5,471  | 
|Leasehold improvements                         |  |                | 1,310  |             |  |   | 1,060  | 
|                                               |  |               
|                                               |  |                | 16,438 |             |  |   | 14,709 | 
|Less accumulated depreciation and amortization |  |                | 5,975  |             |  |   | 3,701  | 
|                                               |  |               
|Net property and equipment                     |  | $              | 10,463 |             |  | $ | 11,008 | 
|                                               |  |               
|                                               |  |               

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6. Intangible Assets

Intangible assets consist of the following:

|                              |  |                |         |             |  |   |         | 
|----------------------------- |  | -------------- | ------- | ----------- |  | - | ------- | 
|                              |  |               
|                              |  | Successor     
|                              |  |               
|                              |  |                |         |            
|                              |  | January 29,    |         | January 30,
|                              |  | 2000           |         | 1999       
|                              |  |               
|                              |  |               
|                              |  |               
|                              |  | (In Thousands)
|Goodwill                      |  | $              | 91,999  |             |  | $ | 91,823  | 
|Customer lists                |  |                | 17,042  |             |  |   | 17,188  | 
|Deferred financing costs      |  |                | 6,370   |             |  |   | 6,897   | 
|Other                         |  |                | 214     |             |  |   | 236     | 
|                              |  |               
|                              |  |                | 115,625 |             |  |   | 116,144 | 
|Less accumulated amortization |  |                | 11,358  |             |  |   | 7,044   | 
|                              |  |               
|                              |  | $              | 104,267 |             |  | $ | 109,100 | 
|                              |  |               
|                              |  |               

In connection with the Transactions, Holdings expensed
approximately $4,927,000 of unamortized deferred financing costs
related to the Old Credit Facility and the Old Subordinated
Notes. Such costs are included in Holdings extraordinary
loss, net of tax, for the year ended January 30, 1999.
Financing costs incurred in connection with obtaining the Senior
Subordinated Notes, the Discount Notes and the New Credit
Facility of approximately $6,370,000 have been deferred by
Holdings as of January 29, 2000 and will be amortized over
the period the Senior Subordinated Notes, the Discount Notes and
the New Credit Facility are outstanding (see Note  7).

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7. Long-term Debt

Long-term debt consists of the following:

|                                          |                      |                |         |             |  |   |         |        | 
|----------------------------------------- | -------------------- | -------------- | ------- | ----------- |  | - | ------- | ------ | 
|                                          |                      |               
|                                          |                      | Successor     
|                                          |                      |               
|                                          |                      |                |         |            
|                                          |                      | January 29,    |         | January 30,
|                                          |                      | 2000           |         | 1999       
|                                          |                      |               
|                                          |                      |               
|                                          |                      |               
|                                          |                      | (In Thousands)
|9 7/8% Senior Subordinated Notes due 2008 |                      | $              | 81,360  |             |  | $ | 100,000 |       
|12 1/8% Senior Discount Notes due 2009    |                      |                | 45,140  |             |  |   | 45,140  |       
|New Credit Facility                       |                      |                | 26,961  |             |  |   | 22,700  |       
|Other notes                               |                      |                | 178     |             |  |   | 178     |       
|Capitalized lease obligations             |                      |                | 684     |             |  |   | 796     |       
|                                          |                      |               
|                                          |                      |                | 154,323 |             |  |   | 168,814 |       
|                                         
|                                         
|                                         
|                                         
|Less:                                     |                      |                |         |             |  |   |         |       
|                                          | Current maturities   |                |         | 458         |  |   |         | 544    | 
|                                          | Unamortized discount |                |         | 14,335      |  |   |         | 17,756 | 
|                                          |                      |               
|                                          |                      | $              | 139,530 |             |  | $ | 150,514 |       
|                                          |                      |               
|                                          |                      |               

9 7/8% Senior Subordinated Notes Due 2008

On April 24, 1998, Iron Age issued $100,000,000 of Senior
Subordinated Notes. Iron Age used the net proceeds from the
issuance of the Senior Subordinated Notes, approximately
$21,600,000 of borrowings under its New Credit Facility and
approximately $1,200,000 of cash to (i) extinguish certain
existing indebtedness, (ii) redeem a portion of the Holdings
 Series A Preferred Stock, and (iii) pay fees and
expenses related to these transactions. These transactions
resulted in the recording of an extraordinary loss during April
1998 of approximately $6,923,000, excluding related tax effect of
 $2,908,000. The extraordinary loss on the extinguishment of debt
 is comprised of prepayment penalties on the Old Subordinated
Notes of $1,562,000; unamortized deferred financing fees of
$4,927,000; and unamortized discount on the Old Subordinated
Notes of $434,000.

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7. Long-term Debt (continued)

9 7/8% Senior Subordinated Notes Due 2008 (continued)

The Senior Subordinated Notes accrue interest at the rate of
9 7/8% per annum and are payable semiannually in arrears on
May 1 and November 1, commencing on November 1, 1998.

The Senior Subordinated Notes are subordinated in right of
payment to all existing and future senior indebtedness of Iron
Age.

The Senior Subordinated Notes are redeemable at the option of
Iron Age on and after May 1, 2003 at prices decreasing from
104.938% of the principal amount thereof to par on May 1,
2006 and thereafter. Iron Age is required to redeem the
outstanding Senior Subordinated Notes based upon certain events
as described in the indenture for the Senior Subordinated Notes.

The indenture for the Senior Subordinated Notes requires Iron Age
 and its subsidiaries to comply with certain restrictive
covenants, including a restriction on dividends and limitations
on incurrence of indebtedness, certain payments and distributions
 and sales of Iron Ages assets and stock.

The Senior Subordinated Notes are fully and unconditionally
guaranteed on an unsecured, senior subordinated basis by each
Domestic Restricted Subsidiary that is a Material Subsidiary (as
such terms are defined in the indenture for the Senior
Subordinated Notes (the Senior Subordinated Notes
Indenture)) (whether currently existing, newly acquired or
created). Each such subsidiary guaranty (a Subsidiary
Guaranty) will provide that the subsidiary guarantor, as
primary obligor and not merely as surety, will irrevocably and
unconditionally guarantee on an unsecured, senior subordinated
basis the performance and punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all obligations
 of Iron Age under the Senior Subordinated Notes Indenture and
the Senior Subordinated Notes, whether for payment of principal
or of interest on the Senior Subordinated Notes, expenses,
indemnification or otherwise. As of January 29, 2000, none
of Iron Ages Domestic Restricted Subsidiaries was a
Material Subsidiary, and therefore no Subsidiary Guaranty was in
force or effect.

Effective September 15, 1998, Iron Age filed a registration
statement on Form S-4 under the Securities Act of 1933, as
amended (the Securities Act), with respect to its
offer to exchange an aggregate principal amount of up to
$100,000,000 of its 9 7/8% Senior Subordinated Notes due
2008 (the Exchange Notes), which have been registered
 under the Securities Act, for a like principal amount of its
Senior Subordinated Notes, which have not been so registered. The
 terms of the Exchange Notes are identical in all material
respects to the Senior Subordinated Notes, except for certain
transfer restrictions and registration rights relating to the
Senior Subordinated Notes.

On September 22, 1999, Holdings purchased $9.0 million
in principal amount of its Senior Subordinated Notes for
$7.13 million (the September 1999
Transaction). The purchase was funded by $4.7 million
of borrowings under the New Credit Facility and the issuance of
$2.375 million of Holdings Series B Preferred Stock to
Holdings majority stockholder, Fenway. Holdings recorded an
 extraordinary gain of $0.88 million, net of unamortized
deferred financing costs of $0.35 million, and income taxes
of $0.64 million. Following the purchase, such principal
amount of the Senior Subordinated Notes was retired. The
transactions described in this paragraph are referred to herein
as the September 1999 Transaction.

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On July 20, 1999, Holdings purchased $9.64 million in
principal amount of its Senior Subordinated Notes for
$7.66 million (the July 1999 Transaction).
The purchase was funded by $5.1 million of borrowings under
the New Credit Facility and the issuance of $2.563 million
of Holdings Series B Preferred Stock to Holdings
majority stockholder, Fenway. Holdings recorded an extraordinary
gain of $0.92 million, net of unamortized deferred financing
 costs of $0.38 million, and income taxes of
$0.67 million. Following the purchase, such principal amount
 of the Senior Subordinated Notes was retired. The transactions
described in this paragraph are referred to herein as the
July 1999 Transaction.

12 1/8% Senior Discount Notes Due 2009

On April 24, 1998, Holdings issued $45,140,000 principal
amount at maturity of Discount Notes, the proceeds of which were
used (i) to pay a dividend to Holdings stockholders of
 $17,745,000, (ii) to redeem a portion of the Holdings
Series A Preferred Stock, (iii) to make a capital
contribution to Iron Age of approximately $2,245,000 for
compensation payments to certain members of management and
(iv) to pay fees and expenses related to these transactions.
 The Discount Notes accrete at a rate of 12 1/8% per annum
compounded semiannually until May 1, 2003. No interest will
accrue prior to May 1, 2003. Interest will accrue thereafter
 at a rate of 12 1/8% per annum and is payable semiannually
in arrears on May 1 and November 1, commencing on
November 1, 2003. The Discount Notes mature on May 1,
2009.

The Discount Notes are subordinated in right of payment to all
existing and future senior indebtedness of Holdings.

The Discount Notes are redeemable at the option of Holdings on
and after May 1, 2003 at prices decreasing from 106.063% of
the principal amount thereof to par on May 1, 2006 and
thereafter. Holdings is required to redeem the outstanding
Discount Notes based upon certain events as described in the
indenture for the Discount Notes.

The indenture for the Discount Notes requires Holdings and its
subsidiaries to comply with certain restrictive covenants,
including a restriction on dividends and limitations on the
incurrence of indebtedness, certain payments and distributions
and sales of Holdings assets and stock.

The ability of Holdings to pay principal and interest on the
Discount Notes and to satisfy other existing and future debt
obligations will depend on Iron Ages ability to distribute
dividends to Holdings. Iron Age is party to the New Credit
Facility and the indenture for the Senior Subordinated Notes,
each of which imposes substantial restrictions (including the
satisfaction of certain financial conditions) on Iron Ages
ability to pay dividends or make other payments to Holdings. The
ability of Iron Age to comply with such conditions under the New
Credit Facility and the indenture for the Senior Subordinated
Notes may be affected by events that are beyond the control of
Holdings. Future borrowings by Iron Age can be expected to
contain restrictions or prohibitions on the payment of dividends
by Iron Age to Holdings. Applicable state laws may also, under
certain circumstances, impose significant restrictions on the
payment of dividends by Iron Age or Holdings other
subsidiaries.

Effective September 15, 1998, Holdings filed a registration
statement on Form S-4 under the Securities Act with respect to
its offer to exchange an aggregate principal amount of up to
$45,140,000 at maturity of its 12 1/8% Senior Discount Notes
 due 2009 (the Exchange Discount Notes), which have
been registered under the Securities Act, for a like principal
amount at maturity of its Discount Notes, which have not been so
registered. The terms of the Exchange Discount Notes are
identical in all material respects to the Discount Notes, except
for certain transfer restrictions and registration rights
relating to the Discount Notes.

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Long-term Debt (continued)

New Credit Facility

On April 24, 1998, Iron Age and Holdings entered into a New
Credit Facility with a syndicate of lenders and a financial
institution, as agent for itself and the other lenders which, as
amended, provides for a $61,560,600 senior secured credit
facility that is comprised of a $30,000,000 revolving working
capital facility and, as amended, a $31,560,600 revolving
acquisition facility. The working capital facility matures on
April 24, 2004. The balance of the revolving acquisition
facility converts into a term loan on April 30, 2001 and
matures in quarterly installments from July 31, 2001 to
April 30, 2004. Under the working capital facility, Iron Age
 has a $2,000,000 letter of credit and a $3,000,000 swing line
facility which will expire April 24, 2004. Outstanding
obligations under the letter of credit and the swing line
facility were $195,000 and $0, respectively, at January 29,
2000.

Borrowings under the New Credit Facility may be used to fund Iron
 Ages working capital requirements, finance certain
permitted acquisitions and general corporate requirements of
Holdings and pay fees and expenses related to the foregoing. Iron
 Age is required to pay a 0.4375% fee on the average daily unused
 portion of the New Credit Facility. Iron Age is also subject to
mandatory prepayment terms as described in the New Credit
Facility.

Borrowings under the New Credit Facility accrue interest, at the
option of Iron Age, at either LIBOR plus 2.25% or the greater of
the financial institutions prime rate and the federal funds
 rate plus 0.75%. Borrowings on the New Credit Facility accrue
interest at 9.25% for prime rate borrowings and between 8.06% and
 8.69% for LIBOR borrowings, at January 29, 2000.

Iron Age has classified its borrowings under the New Credit
Facility as long-term as of January 29, 2000 due to its
ability and intent to maintain such borrowings on a long-term
basis.

The New Credit Facility is guaranteed on a senior basis by
Holdings and is collateralized by substantially all of Iron
Ages and its subsidiaries assets. The New Credit
Facility contains certain covenants which require Iron Age to
maintain leverage ratios, fixed charge coverage ratios and
interest coverage ratios. The New Credit Facility further limits
capital expenditures and sales of assets, declaration of
dividends and other restricted payments, and additional
indebtedness. The New Credit Facility also restricts the sale or
transferring of Iron Ages assets or capital stock.

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Long-term Debt (continued)

Other Notes

Holdings has other notes of approximately $178,000 at
January 29, 2000 and January 30, 1999, respectively.
The notes accrue interest at 9.5%.

Future Maturities of Long-term Debt

Five-year maturities of long-term debt are as follows (in
thousands):

|           |  |   |         | 
|---------- |  | - | ------- | 
|2001       |  | $ | 458     | 
|2002       |  |   | 4,925   | 
|2003       |  |   | 6,439   | 
|2004       |  |   | 7,976   | 
|2005       |  |   | 8,025   | 
|Thereafter |  |   | 112,165 | 
|           |  |   |         | 
|           |  | $ | 139,988 | 
|           |  |   |         | 

8. Fair Values of Financial Instruments

The following methods and assumptions were used by Holdings in
estimating its fair value disclosures for financial instruments:

Cash and cash equivalentsThe carrying amount
reported in the balance sheet for cash and cash equivalents
approximates its fair value.

Long-term debt and interest rate swap agreementsThe
carrying amounts of Holdings borrowings under its New
Credit Facility approximate its fair value because the New Credit
 Facility is a variable rate debt instrument. The fair values of
Holdings Senior Subordinated Notes and Senior Discount
Notes are estimated based upon quoted market prices. The fair
values of Holdings capital lease obligations, other notes
and interest rate swap agreements are estimated using discounted
cash flow analysis, based on Holdings current incremental
borrowing rates for similar types of borrowing arrangements.

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The carrying amounts and fair values of Holdings financial
instruments at January 29, 2000 and January 30, 1999
are as follows:

|                                          |  |                  |        |                  |  |          |        |       |  |   |         |  |  |   |        | 
|----------------------------------------- |  | ---------------- | ------ | ---------------- |  | -------- | ------ | ----- |  | - | ------- |  |  | - | ------ | 
|                                          |  |                 
|                                          |  | Successor       
|                                          |  |                 
|                                          |  |                  |        |                 
|                                          |  | January 29, 2000 |        | January 30, 1999
|                                          |  |                  |        |                 
|                                          |  | Carrying         |        | Fair             |  | Carrying |        | Fair 
|                                          |  | Amount           |        | Value            |  | Amount   |        | Value
|                                          |  |                 
|                                          |  | (In Thousands)  
|                                         
|                                         
|                                         
|                                         
|Cash and cash equivalents                 |  | $                | 269    |                  |  | $        | 269    |       |  | $ | 517     |  |  | $ | 517    | 
|                                         
|                                         
|                                         
|                                         
|9 7/8% Senior Subordinated Notes due 2008 |  |                  | 81,360 |                  |  |          | 58,579 |       |  |   | 100,000 |  |  |   | 75,000 | 
|                                         
|                                         
|                                         
|                                         
|New Credit Facility                       |  |                  | 26,961 |                  |  |          | 26,961 |       |  |   | 22,700  |  |  |   | 22,700 | 
|                                         
|                                         
|                                         
|                                         
|12 1/8% Senior Discount Notes due 2009    |  |                  | 30,805 |                  |  |          | 12,639 |       |  |   | 27,384  |  |  |   | 15,799 | 
|                                         
|                                         
|                                         
|                                         
|Other notes                               |  |                  | 178    |                  |  |          | 178    |       |  |   | 178     |  |  |   | 178    | 
|                                         
|                                         
|                                         
|                                         
|Interest rate swap agreements             |  |                  |       |                  |  |          | (190   | )     |  |   |        |  |  |   | 225    | 
|                                         
|                                         
|                                         
|                                         
|Capital lease obligations                 |  |                  | 684    |                  |  |          | 689    |       |  |   | 796     |  |  |   | 802    | 

9. Employee Benefit Plans

Holdings sponsors a 401(k) profit sharing defined contribution
pension plan. Contributions to the plan are based on a percentage
 of profits, but may be increased or decreased at the discretion
of the Board of Directors. The plan covers substantially all of
its salaried employees. For the fiscal years ended
January 29, 2000 and January 30, 1999, and the periods
February 27, 1997 through January 31, 1998 and
January 26, 1997 through February 26, 1997, pension and
 profit sharing expenses were approximately $523,000, $520,000,
$820,000, and $156,000, respectively.

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10. Income Taxes

Income tax expense before extraordinary gains and losses consists
 of the following:

|              |           |                  |        |                   |        |                  |        |                   |        |   |       |   |       |   |      |   |      |  
|------------- | --------- | ---------------- | ------ | ----------------- | ------ | ---------------- | ------ | ----------------- | ------ | - | ----- | - | ----- | - | ---- | - | ---- | -
|              |           |                  |        |                  
|              |           | Successor        |        | Predecessor      
|              |           |                 
|              |           |                 
|              |           |                  |        | February 27, 1997 |        | January 26, 1997
|              |           | Year Ended       |        | through           |        | through         
|              |           | January 29, 2000 |        | January 30, 1999  |        | January 31, 1998 |        | February 26, 1997
|              |           |                 
|              |           |                 
|              |           |                 
|              |           | (In Thousands)  
|             
|             
|             
|             
|Income taxes: |           |                  |        |                   |        |                  |        |                   |        |   |       |   |       |   |      |  
|             
|             
|             
|             
|              | Current:  |                  |        |                   |        |                  |        |                   |        |   |       |   |       |   |      |   |     
|              |           | Federal          |        | $                 | 1,641  |                  |        | $                 | 533    |   |       | $ | 2,306 |   |      | $ | (450 | )
|              |           | State            |        |                   | (283   | )                |        |                   | 145    |   |       |   | (24   | ) |      |   | (2   | )
|              |           |                 
|              |           |                  | 1,358  |                   |        |                  | 678    |                   |        |   | 2,282 |   |       |   | (452 | )
|             
|             
|             
|             
|             
|              | Deferred: |                  |        |                   |        |                  |        |                   |        |   |       |   |       |   |      |   |     
|              |           | Federal          |        |                   | (1,270 | )                |        |                   | (1,098 | ) |       |   | (458  | ) |      |   |     |  
|              |           | State            |        |                   | 123    |                  |        |                   | (454   | ) |       |   | (138  | ) |      |   |     |  
|              |           |                 
|              |           |                  | (1,147 | )                 |        |                  | (1,552 | )                 |        |   | (596  | ) |       |   |     |  
|              |           |                 
|              |           | $                | 211    |                   |        | $                | (874   | )                 |        | $ | 1,686 |   |       | $ | (452 | )
|              |           |                 
|              |           |                 

A reconciliation of U.S. income tax computed at the statutory
rate and actual expense is as follows:

|                                  |                                                          |                  |      |                   |   |                  |        |                   |   |   |       |      |   |   |      |     |  
|--------------------------------- | -------------------------------------------------------- | ---------------- | ---- | ----------------- | - | ---------------- | ------ | ----------------- | - | - | ----- | ---- | - | - | ---- | --- | -
|                                  |                                                          |                  |      |                  
|                                  |                                                          | Successor        |      | Predecessor      
|                                  |                                                          |                 
|                                  |                                                          |                 
|                                  |                                                          |                  |      | February 27, 1997 |   | January 26, 1997
|                                  |                                                          | Year Ended       |      | through           |   | through         
|                                  |                                                          | January 29, 2000 |      | January 30, 1999  |   | January 31, 1998 |        | February 26, 1997
|                                  |                                                          |                 
|                                  |                                                          |                 
|                                  |                                                          |                 
|                                  |                                                          | (In Thousands)  
|Amount computed at statutory rate |                                                          | $                | (640 | )                 |   | $                | (1,410 | )                 |   | $ | 1,239 |      |   | $ | (390 | )  
|                                  | State and local taxes less applicable federal income tax |                  |      | (106              | ) |                  |        | (203              | ) |   |       | (107 | ) |   |      | (1  | )
|                                  | Goodwill and other amortization                          |                  |      | 830               |   |                  |        | 788               |   |   |       | 657  |   |   |      | 26  |  
|                                  | Other                                                    |                  |      | 127               |   |                  |        | (49               | ) |   |       | (103 | ) |   |      | (87 | )
|                                  |                                                          |                 
|                                  |                                                          | $                | 211  |                   |   | $                | (874   | )                 |   | $ | 1,686 |      |   | $ | (452 | )  
|                                  |                                                          |                 
|                                  |                                                          |                 

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10. Income Taxes (continued)

The components of the net deferred tax asset and liability are as
 follows:

|                               |                                        |                |       |             |  |   |       |       | 
|------------------------------ | -------------------------------------- | -------------- | ----- | ----------- |  | - | ----- | ----- | 
|                               |                                        |               
|                               |                                        | Successor     
|                               |                                        |               
|                               |                                        |                |       |            
|                               |                                        | January 29,    |       | January 30,
|                               |                                        | 2000           |       | 1999       
|                               |                                        |               
|                               |                                        |               
|                               |                                        |               
|                               |                                        | (In Thousands)
|                              
|                              
|                              
|                              
|Deferred tax liabilities:      |                                        |                |       |             |  |   |       |      
|                               | Inventory                              |                | $     | 2,244       |  |   | $     | 2,244 | 
|                               | Property and equipment                 |                |       | 1,096       |  |   |       | 1,147 | 
|                               | Customer lists                         |                |       | 5,068       |  |   |       | 5,584 | 
|                               | Other                                  |                |       | 385         |  |   |       | 257   | 
|                               |                                        |               
|Total deferred tax liabilities |                                        |                | 8,793 |             |  |   | 9,232 |      
|                              
|                              
|                              
|                              
|                              
|Deferred tax assets:           |                                        |                |       |             |  |   |       |      
|                               | Interest expense                       |                |       | 3,895       |  |   |       | 2,788 | 
|                               | State net operating loss carryforwards |                |       | 880         |  |   |       | 1,100 | 
|                               | Inventory                              |                |       | 509         |  |   |       | 556   | 
|                               | Accrued expenses                       |                |       | 530         |  |   |       | 553   | 
|                               | Other                                  |                |       | 92          |  |   |       | 140   | 
|                               |                                        |               
|Total deferred tax assets      |                                        |                | 5,906 |             |  |   | 5,137 |      
|                               |                                        |               
|Net deferred tax liabilities   |                                        | $              | 2,887 |             |  | $ | 4,095 |      
|                               |                                        |               
|                               |                                        |               

State net operating loss carryforwards (NOLs) were
generated during the 1999 fiscal year. Approximately $831,000
relates to the state income tax benefit from extraordinary losses
 incurred in connection with the early debt extinguishment (see
Note 7). The NOLs expire at various times beginning in fiscal
year 2002 through 2019.

11. Commitments and Contingencies

Purchase Commitments

Holdings purchases the majority of its inventory through purchase
 order commitments which are denominated in U.S. dollars.
Holdings purchased approximately 29%, 24%, 20%, and 17% of its
inventory from one vendor for the fiscal years ended
January 29, 2000 and January 30, 1999, and the periods
February 27, 1997 through January 31, 1998 and
January 26, 1997 through February 26, 1997, respectively. At
 January 29, 2000 and January 30, 1999, Holdings had
outstanding inventory purchase commitments of approximately
$13,446,000 and $16,189,000, respectively.

A significant amount of Holdings products are produced in
the Far East. As a result, Holdings operations could be
adversely affected by political instability resulting in the
disruption of trade from the countries in which these suppliers
are located or by the imposition of additional duties or
regulations relating to imports or by the suppliers
inability to meet Holdings production requirements.

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11. Commitments and Contingencies (continued)

Lease Commitments

Holdings leases substantially all of its vehicles and certain
other equipment and facilities. These leases are subject to
renewal options for varying periods. Future minimum payments, by
year and in the aggregate, under capital leases and noncancelable
 operating leases with initial or remaining terms of one year or
more consisted of the following:

|           |                                                      |                              |     |                  |     |   |       |   |       | 
|---------- | ---------------------------------------------------- | ---------------------------- | --- | ---------------- | --- | - | ----- | - | ----- | 
|           |                                                      | Capital                      |     |                 
|           |                                                      | Leases                       |     | Operating Leases
|           |                                                      |                             
|           |                                                      |                             
|2001       |                                                      | $                            | 350 |                  |     | $ | 3,179 |  
|2002       |                                                      |                              | 238 |                  |     |   | 2,429 |  
|2003       |                                                      |                              | 155 |                  |     |   | 1,688 |  
|2004       |                                                      |                              | 94  |                  |     |   | 914   |  
|2005       |                                                      |                              | 23  |                  |     |   | 486   |  
|Thereafter |                                                      |                              |    |                  |     |   | 429   |  
|           |                                                      |                             
|           |                                                      | Total minimum lease payments |     |                  | 860 |   |       | $ | 9,125 | 
|           |                                                      |                              |     |                  |     |   |       |  
|           | Less amounts representing interest                   |                              |     | 176              |     |   |       |   |      
|           |                                                      |                              |     |                  |     |   |       |  
|           | Present value of future minimum lease payments       |                              |     | 684              |     |   |       |   |      
|           | Less current maturities of capital lease obligations |                              |     | 280              |     |   |       |   |      
|           |                                                      |                              |     |                  |     |   |       |  
|           | Capital lease obligations                            |                              | $   | 404              |     |   |       |   |      
|           |                                                      |                              |     |                  |     |   |       |  

Operating lease expense under such arrangements was approximately
 $3,521,000, $3,972,000, $3,785,000 and $203,000 for the fiscal
years ended January 29, 2000 and January 30, 1999, and
the periods February 27, 1997 through January 31, 1998
and January 26, 1997 through February 26, 1997,
respectively. Amortization of assets recorded under capital
leases is included with depreciation expense in Holdings
results of operations.

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11. Commitments and Contingencies (continued)

Lease Commitments (continued)

At January 29, 2000 and January 30, 1999, property and
equipment include capitalized vehicle leases of approximately
$1,823,000 and $1,627,000, respectively, and accumulated
amortization of approximately $1,075,000 and $592,000,
respectively.

Litigation

Holdings is involved from time to time in lawsuits that arise in
the normal course of business. Holdings actively and vigorously
defends all lawsuits. Management believes that there are no
lawsuits that will have a material effect on Holdings
financial position, results of operations or liquidity.

12. Redeemable Preferred Stock and Stock Purchase Warrants

On December 29, 1999, in connection with the
September 1999 Transaction and the July 1999
Transaction as described in Note 7, Holdings authorized
2,500 shares of Series B non voting, cumulative, redeemable
preferred stock with a par value of $0.01 per share (the
Holdings Series B Preferred Stock). Holdings
issued 1,000 shares of Holdings Series B Preferred Stock to
Fenway during fiscal 2000 for approximately $4.9 million,
with a liquidation preference of $4,938 per share plus an
additional amount of $2,044,325 divided by the total number of
outstanding and accrued shares of Holdings Series B
Preferred Stock as of the event of liquidation. A sale of all or
substantially all of Holdings assets, merger or other
change of control constitutes a liquidation. Dividends are
cumulative at an annual rate of $953.97 per share and are payable
 in-kind, semi annually in arrears on February 21 and
August 21, beginning February 21, 2000. The Holdings
Series B Preferred Stock ranks junior to outstanding
Holdings Series A Preferred Stock, if any, and is senior to
Holdings common stock in dividends and liquidation. The
Holdings Series B Preferred Stock is redeemable upon a
change of control or a public offering, as defined in the
indenture governing the Senior Subordinated Notes. The redemption
 price will be equal to the amount that would be paid to the
Holdings Series B Preferred Stock under a liquidation. The
difference between the carrying value and redemption amount is
being accreted as a charge to retained earnings using an the
interest method.

In connection with the Fenway Acquisition and the Knapp
Acquisition described in Note 2, Holdings issued to New York Life
 Insurance Company and American Home Assurance Company (the
Outside Investors) 9,818 shares of Holdings common
stock for an aggregate consideration of approximately $3,570,000,
 or $363.64 per share, and common stock purchase warrants
(Warrants) to acquire 6,962 shares of Holdings common
 stock for an aggregate consideration of $100,000. The Warrants
can be exercised at any time through February 26, 2007 for
an exercise price of approximately $186 per share.

13. Stock Options

Successor

The 1997 Stock Option Plan (the Option Plan) provides
 for the granting of either incentive stock options or
nonqualified stock options to purchase shares of Holdings common
stock and for other stock-based awards to

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officers, directors, key employees, consultants and advisors who,
 in the opinion of Holdings Board of Directors, are in a
position to make a significant contribution to the success of
Holdings and its subsidiaries. The Option Plan authorized the
issuance of options to purchase up to an aggregate of 20,245
shares of Holdings common stock, 11,528 of which shall be for
Series A Options and 8,717 of which shall be for
Series B Options.

Nonqualified Series A Options of 11,528 were granted to
certain officers of Iron Age in connection with the Fenway
Acquisition effective February 26, 1997 in exchange for
options to acquire shares of the Predecessor to Holdings. The
exercise price of Series A Options is approximately $36 per
share and represents the difference between the fair market value
 of Holdings common stock at the date of grant and the
total fair value of the exchanged options which was recognized as
 a capital contribution to Holdings of approximately $3,772,700,
or approximately $328 per share. The total fair value of the
exchanged options was recognized as a capital contribution to
Holdings because the exchanged options represented a portion of
the purchase price of Holdings. The basis used to determine the
fair market value of Holdings common stock was the purchase price
 paid by Fenway as of the date of the Fenway Acquisition, which
was the date of grant of the Series A Options. During the
year ended January 29, 2000, 367 Series A Options were
exercised. The 11,161 remaining Series A Options are fully
vested and exercisable as of January 29, 2000.

Nonqualified Series B Options of 8,567 were granted in
August 1997 in connection with the Fenway Acquisition to
certain officers of Iron Age with an exercise price of
approximately $364 per share. Approximately 65% of the options
(Series B Basic) become exercisable, subject to the
achievement of certain target earnings by Holdings and continued
employment of the optionholder, at the rate of 20% per year
commencing with Holdings fiscal year ended January 31,
 1998. Holdings is deemed to have achieved the target earnings in
 a given fiscal year if Holdings net income before
interest, taxes, depreciation, amortization, extraordinary or
unusual gains or losses, management fees payable to Fenway,
directors fees and expenses payable to Fenway representatives and
 fees and expenses associated with acquisitions equals or exceeds
 the target amount set by the Board of Directors for such fiscal
year. The remaining 35% of Series B Options
(Series B Extra) vest upon a change of control
of Iron Age and the attainment of certain internal rate of return
 objectives by Holdings stockholders as defined in the
Option Plan. The exercise price of Series B Options granted
in August 1997 was approximately $364 per share at the time
such Series B Options were granted. On April 24, 1998,
in connection with the April 1998 Transactions, the exercise
price of Series B Options that were not vested as of
April 24, 1998 was reduced. The exercise price of
(i) Series B Options of 7,465 that were not vested (as
such term is defined in the Option Plan) as of April 24,
1998 is approximately $186 per share and (ii) Series B
Options of 1,102 that were vested (as such term is defined in the
 Option Plan) as of April 24, 1998 is approximately $364 per
share. Upon the vesting of the Series B Options, as defined
in the Option Plan, Holdings will recognize compensation expense
related to the Series B Options based upon the difference,
if any, between the estimated fair value of Holdings common stock
 at the time such options vest and the exercise prices of $186 or
 $364, respectively. During the year ended January 29, 2000,
 904 nonvested Series B Basic options were reclassified from
 vesting , subject to the achievement of certain target earnings,
 to options which vest upon a change of control of Iron Age and
the attainment of certain internal rate of return objectives by
Holdings stockholders. During the year ended
January 29, 2000, 452 non vested Series B Basic options
 became vested and exercisable at an exercise price of $186 per
share. No Series B Options became exercisable during the
year ended January 30, 1999.

Holdings applies APB Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations in accounting
for its stock option plan. For the fiscal years ended
January 29, 2000 and January 30, 1999 and the period
February 27, 1997 through January 31, 1998, no compensation
cost has been recognized in the Holdings financial
statements.

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13. Stock Options (continued)

Successor (continued)

Had compensation cost for Holdings stock option plan been
determined based on the fair value of such awards at the grant
date, consistent with Financial Accounting Standards Board
Statement No. 123, Accounting for Stock-Based Compensation,
Holdings total net income would have been as follows:

|            |             |                  |   |                   |   |                  |   |        |   |  |   |       | 
|----------- | ----------- | ---------------- | - | ----------------- | - | ---------------- | - | ------ | - |  | - | ----- | 
|            |             |                  |   |                  
|            |             | Year Ended       |   | February 27, 1997
|            |             |                  |   |                   |   | Through         
|            |             | January 29, 2000 |   | January 30, 1999  |   | January 31, 1998
|            |             |                 
|            |             |                 
|            |             | (In Thousands)  
|           
|           
|           
|           
|Net income: |             |                  |   |                   |   |                  |   |        |   |  |   |      
|            | As reported |                  | $ | (290              | ) |                  | $ | (7,288 | ) |  | $ | 1,957 | 
|            | Pro forma   |                  |   | (303              | ) |                  |   | (7,366 | ) |  |   | 1,801 | 

The fair values of options granted were estimated at the date of
grant using the minimum value option-pricing model based on the
following assumptions:

|                        |  |                  |                |                   |  |                  |                |  |  |  |                | 
|----------------------- |  | ---------------- | -------------- | ----------------- |  | ---------------- | -------------- |  |  |  | -------------- | 
|                        |  |                  |                |                  
|                        |  | Year Ended       |                | February 27, 1997
|                        |  |                  |                |                   |  | Through         
|                        |  | January 29, 2000 |                | January 30, 1999  |  | January 31, 1998
|                        |  |                 
|                        |  |                 
|                        |  | (In Thousands)  
|Risk-free interest rate |  |                  | 6.0            |                   |  |                  | 6.0            |  |  |  | 6.0            | 
|Dividend yield          |  |                  | 0.0            |                   |  |                  | 0.0            |  |  |  | 0.0            | 
|Expected life           |  |                  | 5 years        |                   |  |                  | 3 years        |  |  |  | 3 years        | 
|Volatility              |  |                  | Not applicable |                   |  |                  | Not applicable |  |  |  | Not applicable | 

A summary of the status of the shares under Holdings stock
option plan is as follows:

|                                   |  |                  |        |                   |  |                  |        |   |  |  |        | 
|---------------------------------- |  | ---------------- | ------ | ----------------- |  | ---------------- | ------ | - |  |  | ------ | 
|                                   |  |                  |        |                  
|                                   |  | Year Ended       |        | February 27, 1997
|                                   |  |                  |        |                   |  | Through         
|                                   |  | January 29, 2000 |        | January 30, 1999  |  | January 31, 1998
|                                   |  |                 
|                                   |  |                 
|                                   |  | (In Thousands)  
|Outstanding, beginning of year     |  |                  | 20,095 |                   |  |                  | 20,095 |   |  |  |       | 
|Exercised                          |  |                  | (367   | )                 |  |                  |       |   |  |  |       | 
|Granted                            |  |                  | 1,145  |                   |  |                  | 100    |   |  |  | 20,095 | 
|Forfeited                          |  |                  | (2,358 | )                 |  |                  | (100   | ) |  |  |       | 
|                                   |  |                 
|Outstanding, end of year           |  |                  | 18,515 |                   |  |                  | 20,095 |   |  |  | 20,095 | 
|                                   |  |                 
|                                   |  |                 
|Options exercisable at end of year |  |                  | 12,590 |                   |  |                  | 12,610 |   |  |  | 12,630 | 
|                                   |  |                 
|                                   |  |                 

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13. Stock Options (continued)

Successor (continued)

Additional information regarding stock options granted in
connection with the 1997 stock option plan is outlined below:

|                                                                                  |  |                  |        |                  |  |                   |       |        |  |        |       |        |  |        |        |        |  |        |       |  |  |  |       |  |  |  |        |  |  |  |       |  |  |  |       | 
|--------------------------------------------------------------------------------- |  | ---------------- | ------ | ---------------- |  | ----------------- | ----- | ------ |  | ------ | ----- | ------ |  | ------ | ------ | ------ |  | ------ | ----- |  |  |  | ----- |  |  |  | ------ |  |  |  | ----- |  |  |  | ----- | 
|                                                                                  |  |                  |        |                  |  |                   |       |        |  |        |       |        |  |       
|                                                                                  |  |                  |        |                  |  | February 27, 1997
|                                                                                  |  | Year Ended       |        | Year Ended       |  | through          
|                                                                                  |  | January 29, 2000 |        | January 30, 1999 |  | January 31, 1998 
|                                                                                  |  |                 
|                                                                                  |  |                 
|                                                                                  |  |                  |        | Series           |  | Series            |       |        |  | Series |       | Series |  |        |        | Series |  | Series
|                                                                                  |  | Series           |        | B                |  | B                 |       | Series |  | B      |       | B      |  | Series |        | B      |  | B     
|                                                                                  |  | A                |        | Basic            |  | Extra             |       | A      |  | Basic  |       | Extra  |  | A      |        | Basic  |  | Extra 
|                                                                                  |  |                 
|                                                                                  |  |                 
|Weighted average fair value of options at grant date                              |  |                  |       |                  |  |                   | 52    |        |  |        |      |        |  |        | 5      |        |  |        | 51    |  |  |  | 26    |  |  |  | 5      |  |  |  | 51    |  |  |  | 26    | 
|Weighted average exercise price of all outstanding options                        |  |                  | 36     |                  |  |                   | 220   |        |  |        | 186   |        |  |        | 36     |        |  |        | 228   |  |  |  | 186   |  |  |  | 36     |  |  |  | 364   |  |  |  | 364   | 
|Weighted average exercise price of options exercisable                            |  |                  | 36     |                  |  |                   | 307   |        |  |        |      |        |  |        | 36     |        |  |        | 364   |  |  |  |      |  |  |  | 36     |  |  |  | 364   |  |  |  |      | 
|Weighted average exercise price of options granted during the
	year               |  |                  |       |                  |  |                   | 186   |        |  |        |      |        |  |        |       |        |  |        | 186   |  |  |  |      |  |  |  | 36     |  |  |  | 364   |  |  |  | 364   | 
|Weighted average exercise price of options exercised during the
	year             |  |                  | 36     |                  |  |                   |      |        |  |        |      |        |  |        |       |        |  |        | 186   |  |  |  |      |  |  |  |       |  |  |  |      |  |  |  |      | 
|Weighted average exercise price of options expired and forfeited
	during the year |  |                  |       |                  |  |                   | 194   |        |  |        |      |        |  |        |       |        |  |        | 186   |  |  |  |      |  |  |  |       |  |  |  |      |  |  |  |      | 
|Weighted average remaining contractual life of options
	outstanding               |  |                  | 7.1    |                  |  |                   | 7.6   |        |  |        | 7.1   |        |  |        | 8.1    |        |  |        | 8.1   |  |  |  | 8.1   |  |  |  | 9.1    |  |  |  | 9.1   |  |  |  | 9.1   | 
|Options outstanding at end of year                                                |  |                  | 11,161 |                  |  |                   | 4,850 |        |  |        | 2,504 |        |  |        | 11,528 |        |  |        | 5,508 |  |  |  | 3,059 |  |  |  | 11,528 |  |  |  | 5,508 |  |  |  | 3,059 | 
|Options exercisable at end of year                                                |  |                  | 11,161 |                  |  |                   | 1,429 |        |  |        |      |        |  |        | 11,528 |        |  |        | 1,082 |  |  |  |      |  |  |  | 11,528 |  |  |  | 1,102 |  |  |  |      | 

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Predecessor

The Predecessor had an option plan (the Prior Plan)
for eligible officers and key management personnel. The Prior
Plan authorized the issuance of up to 12,212 shares of
Predecessors Class A common stock. A summary of
Predecessors stock option activity and related information
for the period January 26, 1997 through February 26,
1997 is as follows:

|                                 |  |                          |        |                  |  |   |    | 
|-------------------------------- |  | ------------------------ | ------ | ---------------- |  | - | -- | 
|                                 |  |                         
|                                 |  | January 26, 1997 through
|                                 |  | February 26, 1997       
|                                 |  |                         
|                                 |  |                          |        | Weighted Average
|                                 |  | Options                  |        | Exercise Price  
|                                 |  |                          |        |                 
|Outstanding, beginning of period |  |                          | 12,212 |                  |  | $ | 62 | 
|Exercised                        |  |                          | 12,212 |                  |  |   | 62 | 
|                                 |  |                          |        |                  |  |   |    | 
|Outstanding, end of period       |  |                          |       |                  |  |   |    | 
|                                 |  |                          |        |                  |  |   |    | 
|Exercisable, end of period       |  |                          |       |                  |  |   |    | 
|                                 |  |                          |        |                  |  |   |    | 

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##### Table of Contents



13. Stock Options (continued)

Predecessor (continued)

For the period January 26, 1997 through February 26,
1997, the Predecessor recognized compensation expense of
$1,054,000 for vesting of stock options and warrants issued to
employees in accordance with APB Opinion No. 25, based on
the intrinsic value between the exercise prices of
performance-based and fixed option grants and the fair value of
the Predecessors common stock at the measurement dates.

Had compensation expense for the Prior Plan been determined based
 on the fair value of stock option awards at the grant date,
consistent with the methods of Financial Accounting Standards
Board Statement No. 123, Accounting for Stock-Based
Compensation, Predecessors net income on a pro forma basis
for the period January 26, 1997 through February 26,
1997 would have been as follows (in thousands):

|                                           |                                                                 |                                          |      |        |     | 
|------------------------------------------ | --------------------------------------------------------------- | ---------------------------------------- | ---- | ------ | --- | 
|Net loss before stock options and warrants |                                                                 | $                                        | (695 | )     
|                                           | Recorded APB No. 25 compensation expense                        |                                          |      | (1,054 | )  
|                                          
|                                          
|                                          
|                                          
|                                           | Pro forma compensation expense from stock options and warrants: |                                          |      |        |    
|                                           |                                                                 | Fiscal year ended January 27, 1996 grant |      |        | 108 | 
|                                           |                                                                 |                                          |      |       
|                                           | Pro forma net income                                            |                                          | $    | 251    |    
|                                           |                                                                 |                                          |      |       

The fair values of options granted under the Prior Plan were
estimated at the date of grant using the minimum value
option-pricing model based on the following assumptions:

|                        |  |               
|----------------------- |  | --------------
|Risk-free interest rate |  | 6.0           
|Dividend yield          |  | 0.0           
|Expected life           |  | 3 years       
|Volatility              |  | Not applicable

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##### Table of Contents



14. Related Party Transactions

In connection with the April 1998 Transactions, members of
management of Iron Age holding vested options received aggregate
payments of $2,245,000 which reflects the decrease in the equity
value of the Company as a result of the cash distribution to the
stockholders of Holdings in the April 1998 Transactions.

Fenway provides management services to Holdings and Iron Age
pursuant to an amended and restated management agreement (the
Management Agreement) among Holdings, Iron Age and
Fenway. Pursuant to the Management Agreement, Fenway provides
Holdings and Iron Age with general management, advisory and
consulting services with respect to Iron Ages business and
with respect to such other matters as Holdings may reasonably
request from time to time, including, without limitation,
strategic planning, financial planning, business acquisition and
general business development services. Holdings paid management
fees of $262,500, $250,000, $250,000 and $0 in the fiscal years
ended January 29, 2000 and January 30, 1999, and the
periods February 27, 1997 through January 31, 1998 and
January 26, 1997 through February 26, 1997,
respectively, for management and other advisory services. In
addition, Holdings has reimbursed Fenway for certain related
expenses incurred in connection with rendering such services in
an amount equal to $135,000 for the year ended January 29,
2000 and $16,000 for the year ended January 30, 1999.

In connection with the Fenway Acquisition and the Knapp
Acquisition, Holdings paid $2,070,000 and $200,000, respectively,
 to Fenway for financial advisory fees.

Holdings, Fenway, the Outside Investors, Iron Age management and
all of the other stockholders and optionholders of Holdings are
party to a stockholders agreement (the
Stockholders Agreement) that, among other
things, provides for tag-along rights, take-along rights,
registration rights, restrictions on the transfer of shares held
by parties to the Stockholders Agreement, certain rights of
 first refusal for Holdings and certain preemptive rights for
certain stockholders. The Stockholders Agreement also
provides that the parties thereto will vote their shares in the
same manner as Fenway in connection with certain transactions and
 that Fenway will be entitled to fix the number of directors of
Holdings. Pursuant to the Stockholders Agreement, Fenway is
 entitled to designate a sufficient number of directors to
maintain a majority of the board of directors of Holdings and
Donald R. Jensen is entitled to designate one director.

15. Subsequent Event

On February 7, 2000, subsequent to fiscal 2000, Fenway
purchased Discount Notes in the market. The purchase results in a
 gain to Holdings for income tax purposes only and a
corresponding income tax liability to Holdings of approximately
$1.3 million which is payable in May 2000. In order to
mitigate any financial impact to Holdings, Fenway has agreed to
make an equity contribution of approximately $1.3 million to
 Holdings, concurrent with the payment of Holdings first
quarter income tax installment.

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SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS

IRON AGE HOLDINGS CORPORATION


January 29, 2000

|                             |                                |                                 |  |            |         |            |  |             |         |                |  |  |   |  |  |   |         |     |  |   |         | 
|---------------------------- | ------------------------------ | ------------------------------- |  | ---------- | ------- | ---------- |  | ----------- | ------- | -------------- |  |  | - |  |  | - | ------- | --- |  | - | ------- | 
|                             |                                |                                 |  |            |         |            |  |            
|COL. A                       |                                | COL. B                          |  | COL. C     |         | COL. D     |  | COL. E     
|                             |                                |                                 |  |            |         |            |  |            
|                             |                                |                                 |  |            |         |            |  |            
|                             |                                |                                 |  | Additions  |         |            |  |            
|                             |                                |                                 |  |            |         |            |  |            
|                             |                                |                                 |  |            |         | Charged to |  |             |         |               
|                             |                                | Balance At                      |  | Charged to |         | Other      |  |             |         |               
|                             |                                | Beginning of                    |  | Costs and  |         | Accounts-  |  | Deductions- |         | Balance At End
|Descriptions                 |                                | Period                          |  | Expenses   |         | Describe   |  | Describe    |         | of Period     
|                             |                                |                                 |  |            |         |            |  |             |         |               
|Year ended January 29, 2000: |                                |                                 |  |            |         |            |  |             |         |                |  |  |   |  |  |   |         |     |  |  
|                            
|                            
|                            
|                            
|                             | Deducted from assets accounts: |                                 |  |            |         |            |  |             |         |                |  |  |   |  |  |   |         |     |  |   |        
|                             |                                | Allowance for doubtful accounts |  | $          | 275,000 |            |  | $           | 274,000 |                |  |  |  |  |  | $ | 105,000 | (2) |  | $ | 444,000 | 
|                            
|                            
|                            
|                            
|                            
|Year ended January 30, 1999: |                                |                                 |  |            |         |            |  |             |         |                |  |  |   |  |  |   |         |     |  |  
|                            
|                            
|                            
|                            
|                             | Deducted from assets accounts: |                                 |  |            |         |            |  |             |         |                |  |  |   |  |  |   |         |     |  |   |        
|                             |                                | Allowance for doubtful accounts |  | $          | 382,000 |            |  | $           | 151,000 |                |  |  |  |  |  | $ | 258,000 | (1) |  | $ | 275,000 | 
|                            
|                            
|                            
|                            
|                            
|Year ended January 31, 1998: |                                |                                 |  |            |         |            |  |             |         |                |  |  |   |  |  |   |         |     |  |  
|                            
|                            
|                            
|                            
|                             | Deducted from assets accounts: |                                 |  |            |         |            |  |             |         |                |  |  |   |  |  |   |         |     |  |   |        
|                             |                                | Allowance for doubtful accounts |  | $          | 352,000 |            |  | $           | 40,000  |                |  |  |  |  |  | $ | 10,000  | (2) |  | $ | 382,000 | 



|    |                                                                                                   
|--- | --------------------------------------------------------------------------------------------------
|(1) | Uncollectible accounts written off, net of recoveries and
	adjustments related to the Dunham Sale.
|   
|(2) | Uncollectible accounts written off, net of recoveries.                                            




Item 9. Changes in and Disagreements With Accountants On
Accounting and Financial Disclosure.

None.

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PART III




Item 10. Directors and Executive Officers of the
Registrant.

The following table sets forth certain information regarding
Holdings directors and executive officers, including their
respective ages, as of April 18, 2000.

|                   |  |     |    |          |  |                                                       
|------------------ |  | --- | -- | -------- |  | ------------------------------------------------------
|Name               |  | Age |    | Position
|                   |  |     |    |         
|William J. Mills   |  |     | 40 |          |  | President and Director                                
|Donald R. Jensen   |  |     | 62 |          |  | Chairman and Director                                 
|Keith A. McDonough |  |     | 41 |          |  | Vice President-Finance and Chief Financial Officer    
|Joseph J. Sebes    |  |     | 40 |          |  | Executive Vice President/ Corporate Accounts, Iron Age
|Peter Lamm         |  |     | 48 |          |  | Director                                              
|Andrea Geisser     |  |     | 57 |          |  | Vice President and Director                           
|Reza R. Satchu     |  |     | 30 |          |  | Director                                              

William J. Mills is President of Holdings and President
and Chief Executive Officer of Iron Age. Prior to
February 1, 1999, he was the Executive Vice President of
Holdings and President and Chief Operating Officer of Iron Age.
Mr. Mills joined Iron Age in 1987 as a District Manager
before moving on to manage all national accounts and assume the
position of National Sales Manager. He was promoted to regional
Vice President of Sales in 1991 and to Executive Vice President
in 1994. Prior to 1987, he held various positions at Endicott
Johnson in product development, sales, importing and sales
management.

Donald R. Jensenis Chairman of Holdings and Iron Age.
Mr. Jensen has been Chairman of Holdings and Iron Age since
1994. Mr. Jensen retired as President and Chief Executive
Officer of Holdings and as Chief Executive Officer of Iron Age on
 February 1, 1999. He joined Iron Age as its President and
Chief Executive Officer in 1986. Prior to that time,
Mr. Jensen worked in the automotive parts supply business
from 1960 to 1970 and held various positions with Endicott
Johnson Corporation from 1970 to 1985, beginning as a territory
salesman. At Endicott Johnson Corporation, he served as Vice
President in charge of the product development, importing,
athletic footwear and rubber footwear divisions before being
named Executive Vice President in 1985.

Keith A. McDonoughis Vice President-Finance and Chief
Financial Officer of Holdings. Mr. McDonough joined Iron Age
 in 1981. He was appointed to Executive Vice President of Iron
Age in May 1997 and has been Iron Ages Chief Financial
 Officer since 1990. Mr. McDonough is responsible for all
financial matters, including Accounting, Treasury, Taxes and
Investor Relations. Mr. McDonough also has direct oversight
of Information Technology and Human Resources.

Joseph J. Sebesbecame Executive Vice President/ Corporate
 Accounts of Iron Age on February 1, 1999. Mr. Sebes is
 responsible for Iron Ages Corporate Accounts group,
including the management and solicitation of all Corporate and
National Account Agreements. From 1997 to 1999, he served as Vice
 President/ National Sales. From 1992 to 1997, he was Regional
Vice President of Sales. Mr. Sebes joined Iron Age in 1990
as the District Sales Manager in North Carolina and South
Carolina. Prior to that time, he held various sales and
management positions in the food and beverage industry with
Hilton Hotels Corporation and Kraft Foods.

Peter Lammbecame a director of Holdings and Iron Age in
1997. Mr. Lamm is Chairman and Chief Executive Officer of
Fenway, a New York-based direct investment firm for institutional
 investors with a primary objective of acquiring leading
middle-market companies. From February 1982 to
April 1994, Mr. Lamm was a member of Butler Capital
Corporation, a private investment firm, most recently as Senior
Direct Investment Officer and Managing Director. Mr. Lamm
currently serves as a director of Aurora Foods, Inc., Simmons
Company, Delimex, Quality

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##### Table of Contents



Stores, Inc. and Blue Capital.

Andrea Geisserbecame a director and Vice President of
Holdings and director of Iron Age in 1997. Mr. Geisser has
been a Managing Director of Fenway since its formation in 1994.
From February 1989 to June 1994, Mr. Geisser was a
 Managing Director of Butler Capital Corporation. From 1986 to
1989, Mr. Geisser served as a Managing Director of Onex
Investment Corporation, the largest Canadian leveraged buyout
company. Mr. Geisser currently serves as a director of
Aurora Foods, Inc., Decorative Concepts and Valley Dynamo, LLP.

Reza R. Satchubecame a director of Holdings and Iron Age
in April 1999. Mr. Satchu has been a Managing Director
of Fenway since December 1999 and was a Vice President of
Fenway from December 1997 to December 1999 and an
Associate of Fenway from May 1996 until November 1997.
Prior to that time, Mr. Satchu was a financial analyst in
the high yield finance and restructuring group at Merrill Lynch
& Co. Mr. Satchu currently serves as a director and
officer of Supplier Market.com and as a director of Decorative
Concepts.

All directors are elected and serve until a successor is duly
elected and qualified or until the earlier of his death,
resignation or removal. There are no family relationships among
any of the directors or executive officers of Holdings or Iron
Age other than that Mr. Sebes is married to
Mr. Jensens daughter. The executive officers of
Holdings and Iron Age are elected by and serve at the discretion
of their respective Boards of Directors.

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##### Table of Contents






Item 11. Executive Compensation.

The following table sets forth information concerning the
compensation earned in fiscal 1998, 1999 and 2000 by
Mr. Jensen,, Mr. Mills, Holdings President since
February 1, 1999, and each of the other four most highly
compensated executive officers of Holdings (collectively, the
Named Executive Officers). The current compensation
arrangements, if any, for these officers are described in
Employment Agreements.

Summary Compensation Table

|                                       |  |          |      |                     |  |                 |         |                 |  |  |           |      |  |  |          |  |  |  |        |     
|-------------------------------------- |  | -------- | ---- | ------------------- |  | --------------- | ------- | --------------- |  |  | --------- | ---- |  |  | -------- |  |  |  | ------ | ----
|                                       |  |          |      |                     |  | Long Term       |         | All Other      
|                                       |  |          |      | Annual Compensation |  | Compensation($) |         | Compensation($)
|                                       |  |          |      |                    
|                                       |  |          |      |                    
|                                       |  |          |      |                     |  | Number of       |         |                
|                                       |  |          |      |                     |  | Securities      |         |                
|                                       |  |          |      |                     |  | Underlying      |         |                
|Name and Position                      |  | Year (1) |      | Salary ($)          |  | Bonus($)        |         | Options(2)      |  | 
|                                       |  |          |      |                     |  |                 |         |                 |  | 
|William J. Mills (3)                   |  |          | 1998 |                     |  |                 | 167,857 |                 |  |  | 237,200   | (4)  |  |  | 3,189.75 |  |  |  | 9,956  | (6) 
|President                              |  |          | 1999 |                     |  |                 | 172,780 |                 |  |  | 431,394   | (5)  |  |  |         |  |  |  | 11,085 | (7) 
|                                       |  |          | 2000 |                     |  |                 | 200,793 |                 |  |  |          |      |  |  | 138      |  |  |  | 20,507 | (8) 
|                                      
|Donald R. Jensen (9)                   |  |          | 1998 |                     |  |                 | 404,740 |                 |  |  | 554,900   | (10) |  |  | 9,351.60 |  |  |  | 9,956  | (6) 
|Chairman                               |  |          | 1999 |                     |  |                 | 397,961 |                 |  |  | 1,488,774 | (11) |  |  |         |  |  |  | 23,307 | (12)
|                                       |  |          | 2000 |                     |  |                 | 240,248 |                 |  |  |          |      |  |  |         |  |  |  | 26,571 | (13)
|                                      
|Keith A. McDonough                     |  |          | 1998 |                     |  |                 | 118,269 |                 |  |  | 224,760   | (4)  |  |  | 3,129.75 |  |  |  | 7,464  | (15)
|Vice President-Finance and             |  |          | 1999 |                     |  |                 | 122,777 |                 |  |  | 416,495   | (14) |  |  |         |  |  |  | 10,437 | (16)
|Chief Financial Officer                |  |          | 2000 |                     |  |                 | 124,011 |                 |  |  |          |      |  |  | 118      |  |  |  | 20,833 | (17)
|                                      
|Theodore C. Johanson (18)              |  |          | 1998 |                     |  |                 | 193,123 |                 |  |  | 20,000    | (19) |  |  | 200      |  |  |  | 5,075  | (21)
|President and Chief Executive Officer, |  |          | 1999 |                     |  |                 | 191,361 |                 |  |  | 39,079    | (20) |  |  |         |  |  |  | 4,485  | (22)
|Falcon                                 |  |          | 2000 |                     |  |                 | 181,447 |                 |  |  |          |      |  |  |         |  |  |  | 7,735  | (23)
|                                      
|Joseph J. Sebes                        |  |          | 1998 |                     |  |                 | 84,683  |                 |  |  | 26,000    | (24) |  |  | 150      |  |  |  | 7,467  | (25)
|Executive Vice President/ Corporate    |  |          | 1999 |                     |  |                 | 85,943  |                 |  |  |          |      |  |  |         |  |  |  | 5,329  | (26)
|Accounts, Iron Age                     |  |          | 2000 |                     |  |                 | 106,282 |                 |  |  | 8,000     |      |  |  | 80       |  |  |  | 7,668  | (27)



|    |                                          
|--- | -----------------------------------------
|(1) | 1998: Fiscal year ended January 31, 1998.







|    |                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Options to acquire common stock of Holdings.                                                                                                                                                                                      
|   
|(3) | Prior to February 1, 1999, Mr. Mills served as
	President and Chief Operating Officer of the Company.                                                                                                                             
|   
|(4) | Includes $175,000 bonus paid by Iron Age in connection with the
	Fenway Acquisition.                                                                                                                                              
|   
|(5) | Includes $367,881 bonus paid by Iron Age in connection with the
	April 1998 Transactions.                                                                                                                                         
|   
|(6) | Includes Iron Age allocations of $9,309 under defined
	contribution plan for the Plan Year ended December 31, 1997
	and group term life insurance premiums of $647 paid by Iron Age
	during the Plan Year ended December 31, 1997.
|   
|(7) | Includes Iron Age allocations of $8,000 under defined
	contribution plan for the Plan Year ended December 31, 1998
	and group term life insurance premiums of $330 paid by Iron Age
	during the Plan Year ended December 31, 1998.
|   
|(8) | Includes Iron Age allocations of $15,609 under defined
	contribution plan for the Plan Year ended December 31, 1999
	and group life insurance premiums of $300 paid by Iron Age during
	 the Plan Year ended December 31, 1999.   

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|     |                                                                                                                                                                                                                                      
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(9)  | In addition to serving as Chairman of the Company,
	Mr. Jensen also served as the Companys Chief Executive
	 Officer until February  1, 1999                                                                                        
|    
|(10) | Includes $275,000 bonus paid by Iron Age in connection with the
	Fenway Acquisition.                                                                                                                                                 
|    
|(11) | Includes $1,202,966 bonus paid by Iron Age in connection with the
	 April 1998 Transactions.                                                                                                                                         
|    
|(12) | Includes Iron Age allocations of $8,000 under defined
	contribution plan for the Plan Year ended December 31, 1998
	and group term life insurance premiums of $3,510 paid by Iron Age
	 during the Plan Year ended December 31, 1998.
|    
|(13) | Includes Iron Age allocations of $15,311 under defined
	contribution plan for the Plan Year ended December 31, 1999
	and group life insurance premiums of $1,980 paid by Iron Age
	during the Plan Year ended December 31, 1999.     
|    
|(14) | Includes $365,685 bonus paid by Iron Age in connection with the
	April 1998 Transactions.                                                                                                                                            
|    
|(15) | Includes Iron Age allocations of $6,948 under defined
	contribution plan for the Plan Year ended December 31, 1997
	and group term life insurance premiums of $516 paid by Iron Age
	during the Plan Year ended December 31, 1997.   
|    
|(16) | Includes Iron Age allocations of $8,000 under defined
	contribution plan for the Plan Year ended December 31, 1998
	and group term life insurance premiums of $386 paid by Iron Age
	during the Plan Year ended December 31, 1998.   
|    
|(17) | Includes Iron Age allocations of $16,496 under defined
	contribution plan for the Plan Year ended December 31, 1999
	and group life insurance premiums of $300 paid by Iron Age during
	 the Plan Year ended December 31, 1999.      
|    
|(18) | Retired January 31, 2000.                                                                                                                                                                                                            
|    
|(19) | Includes $20,000 bonus paid by Iron Age in connection with the
	Fenway Acquisition                                                                                                                                                   
|    
|(20) | Includes $7,321 bonus paid by Iron Age in connection with the
	April 1998 Transactions.                                                                                                                                              
|    
|(21) | Represents Falcon allocations under defined contribution plan for
	 the Plan Year ended December 31, 1997.                                                                                                                           
|    
|(22) | Represents Falcon allocations under defined contribution plan for
	 the Plan Year ended December 31, 1998.                                                                                                                           
|    
|(23) | Includes Falcon allocations of $4,485 under defined contribution
	plan for the Plan Year ended December 31, 1999 and group
	life insurance premiums of $3,250 paid by Falcon during the Plan
	Year ended December 31, 1999.          
|    
|(24) | Includes $10,000 bonus paid by Iron Age in connection with the
	Fenway Acquisition.                                                                                                                                                  
|    
|(25) | Includes Iron Age allocations of $6,391 under defined
	contribution plan for the Plan Year ended December 31, 1997
	and group life insurance premiums of $205 paid by Iron Age during
	 the Plan Year ended December 31, 1997.       
|    
|(26) | Includes Iron Age allocations of $4,301 under defined
	contribution plan for the Plan Year ended December 31, 1998
	and group life insurance premiums of $224 paid by Iron Age during
	 the Plan Year ended December 31, 1998.       
|    
|(27) | Includes Iron Age allocations of $5,632 under defined
	contribution plan for the Plan Year ended December 31, 1999
	and group life insurance premiums of $310 paid by Iron Age during
	 the Plan Year ended December 31, 1999.       

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##### Table of Contents



Option Grants in Fiscal 2000

|                                              |  |                   |     |                             |  |           |       |           |  |            |        |                            |  |    |        |     |  |  |          |  |  |  |   |  |  |   |        |  |  |   |        | 
|--------------------------------------------- |  | ----------------- | --- | --------------------------- |  | --------- | ----- | --------- |  | ---------- | ------ | -------------------------- |  | -- | ------ | --- |  |  | -------- |  |  |  | - |  |  | - | ------ |  |  | - | ------ | 
|                                              |  |                   |     |                             |  |           |       |           |  |            |        |                           
|                                              |  |                   |     |                             |  |           |       |           |  |            |        | Potential Realizable Value
|                                              |  |                   |     |                             |  |           |       |           |  |            |        | At Assumed Annual Rates   
|                                              |  |                   |     | of Stock Price Appreciation
|                                              |  | Individual Grants |     | for Option Term (2)        
|                                              |  |                  
|                                              |  |                  
|                                              |  |                   |     | Fair                        |  |          
|                                              |  | Number of         |     | % of Total                  |  |           |       | Market    |  |           
|                                              |  | Securities        |     | Options                     |  |           |       | Value At  |  |           
|                                              |  | Underlying        |     | Granted to                  |  | Exercise  |       | Time of   |  |           
|                                              |  | Options           |     | Employees in                |  | Price     |       | Grant     |  | Expiration |        |                           
|Name                                          |  | Granted (1)       |     | Fiscal Year                 |  | Per Share |       | Per Share |  | Date       |        | 0%                         |  | 5% |        | 10%
|                                              |  |                   |     |                             |  |           |       |           |  |            |        |                            |  |    |        |    
|William J. Mills
	Series B  Basic B (3)(4)   |  |                   | 138 |                             |  |           | 12.78 | %         |  | $          | 185.52 |                            |  | $  | 185.52 |     |  |  | 02/28/07 |  |  |  |  |  |  | $ | 11,923 |  |  | $ | 24,705 | 
|                                             
|Keith A. McDonough
	Series B  Basic B (3)(4) |  |                   | 118 |                             |  |           | 10.93 | %         |  |            | 185.52 |                            |  |    | 185.52 |     |  |  | 02/28/07 |  |  |  |  |  |  |   | 10,195 |  |  |   | 21,125 | 
|                                             
|Joseph J. Sebes
	Series B  Basic B (3)(4)    |  |                   | 80  |                             |  |           | 7.41  | %         |  |            | 185.52 |                            |  |    | 185.52 |     |  |  | 02/28/07 |  |  |  |  |  |  |   | 6,912  |  |  |   | 14,322 | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Options to acquire common stock of Holdings.                                                                                                                                                                                                                                                                                                                                                                 
|   
|(2) | The 5% and 10% assumed annual rate of return do not reflect
	actual changes in the value of the common stock of Holdings. The
	assumed rates are not intended to be a forecast of future
	performance, but reflect projections required by Securities and
	Exchange Commission (the SEC) regulations.                                                                                                      
|   
|(3) | 20% of Series  Basic B Options (as defined) are
	exercisable on the last of each fiscal year in which certain
	target earning are met. The Series B -Basic B Options are
	also exercisable upon a sale transaction by the Fenway Fund of
	all stock or assets of Holdings (Sale Transaction) if
	 the net sales proceed equal or exceed the initial purchase price
	 plus certain internal rate of return.
|   
|(4) | Effective June 19, 1999, Messrs. Mills, McDonough and
	Sebes acquired 264.67, 264.67 and 44.27 Series A Options and
	 25, 25 and 25 Series B-Basic B Options, respectively,
	from Willie Taaffe who resigned from Holdings in June 1999.                                                                                                                                                                     

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##### Table of Contents



Aggregated Fiscal Year-end Option Values

The following table sets forth information concerning the value
of unexercised stock options at the end of fiscal 2000 for the
Named Executive Officers.

Aggregated Fiscal Year-end Option Values

|                     |                  |                        |  |                      |  |  |  |           | 
|-------------------- | ---------------- | ---------------------- |  | -------------------- |  |  |  | --------- | 
|                     |                  | Number of Securities   |  | Value of Unexercised
|                     |                  | Underlying Unexercised |  | In-the-Money Options
|                     |                  | Options At             |  | at Fiscal Year      
|                     |                  | Fiscal Year End(#)(1)  |  | End($)(2)           
|                     |                  |                        |  |                     
|                     |                  | Exercisable/           |  | Exercisable/        
|Name                 |                  | Unexercisable          |  | Unexercisable       
|                     |                  |                        |  |                     
|William J. Mills     |                  |                        |  |                      |  |  |  |          
|                    
|                    
|                    
|                    
|                     | Series A         |                        |  | 2,194.43/0           |  |  |  | 327,321/0 | 
|                    
|                    
|                    
|                    
|                     | Series BBasic B |                        |  | 248/575              |  |  |  | 0/0       | 
|                    
|                    
|                    
|                    
|                     | Series BExtra B |                        |  | 0/600                |  |  |  | 0/0       | 
|Donald R. Jensen     |                  |                        |  |                      |  |  |  |          
|                    
|                    
|                    
|                    
|                     | Series A         |                        |  | 6,404.83/0           |  |  |  | 955,345/0 | 
|                    
|                    
|                    
|                    
|                     | Series BBasic B |                        |  | 340/600              |  |  |  | 0/0       | 
|                    
|                    
|                    
|                    
|                     | Series BExtra B |                        |  | 0/1,248.77           |  |  |  | 0/0       | 
|Keith A. McDonough   |                  |                        |  |                      |  |  |  |          
|                    
|                    
|                    
|                    
|                     | Series A         |                        |  | 2,194.42/0           |  |  |  | 327,321/0 | 
|                    
|                    
|                    
|                    
|                     | Series BBasic B |                        |  | 227/516              |  |  |  | 0/0       | 
|                    
|                    
|                    
|                    
|                     | Series BExtra B |                        |  | 0/600                |  |  |  | 0/0       | 
|Theodore C. Johanson |                  |                        |  |                      |  |  |  |          
|                    
|                    
|                    
|                    
|                     | Series BBasic B |                        |  | 0/0                  |  |  |  | 0/0       | 
|Joseph J. Sebes      |                  |                        |  |                      |  |  |  |          
|                    
|                    
|                    
|                    
|                     | Series A         |                        |  | 367.05/0             |  |  |  | 54,749/0  | 
|                    
|                    
|                    
|                    
|                     | Series BBasic B |                        |  | 80/175               |  |  |  | 0/0       | 
|                    
|                    
|                    
|                    
|                     | Series BExtra B |                        |  | 0/55                 |  |  |  | 0/0       | 



|    |                                                                        
|--- | -----------------------------------------------------------------------
|(1) | Options to acquire common stock of Holdings.                           
|   
|(2) | Value based on assumed value at January 29, 2000 of $185.52
	per share.

Compensation of Directors

Holdings pays no compensation to its independent directors and
pays no additional remuneration to its employees or to executives
 of Holdings for serving as directors.

Employment Agreements

Mr. Mills is currently employed by Iron Age pursuant to an
agreement dated November 20, 1995. Under this agreement,
which is extended from year to year in the absence of a notice of
 non-renewal given at least 90 days prior to end of each
fiscal year, Mr. Mills receives an annual salary of
$210,000, subject to annual increases, and is eligible for a
bonus of not less than $75,000 based upon Iron Ages
achievement of EBITDA targets. If Mr. Mills is terminated
other than for cause or resigns voluntarily for good reason, he
is entitled to receive continued salary for 18 months and
continued coverage under group health plans for one year
following his termination or resignation. If Mr. Mills
employment is terminated by reason of his death and he is
survived by his spouse, his surviving spouse is entitled to
receive continued coverage under group health plans until the
earlier of her 65th birthday or January 31, 2000. If
Mr. Mills employment is terminated by reason of his
incapacity, Mr. Mills is entitled to receive continued
coverage under group health plans until January 31, 2000.

Mr. Jensen is currently employed as Chairman of the Board of
 Directors of Holdings and Iron Age pursuant to

-56-



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##### Table of Contents



an agreement dated February 26, 1997. Under this agreement,
Mr. Jensen is entitled to receive an annual salary of
$250,000. In addition, Mr. Jensen is eligible for an annual
bonus of up to $100,000 determined by Iron Ages achievement
 of EBITDA targets. If Mr. Jensen is terminated other than
for cause or resigns voluntarily for good reason, he is entitled
to receive continued salary until December 31, 2001 and
continued coverage under group health plans for himself and his
spouse until his 65th birthday, or until his spouses 65th
birthday if he dies prior to age 65. If Mr. Jensens
employment is terminated by reason of his death and he is
survived by his spouse, his surviving spouse is entitled to
receive a continuation of his salary until the month of his 62nd
birthday and continued coverage under group health plans until
her 65th birthday. If Mr. Jensens employment is
terminated by reason of his incapacity, Mr. Jensen is
entitled to receive continued salary less amounts received by him
 under group disability plans and social security disability
benefits until earlier of his death or his 65th birthday and
continued coverage under group health plans for him and his
spouse until his 65th birthday if he dies prior to age 65.

Mr. McDonough is currently employed by Iron Age pursuant to
an agreement dated November 20, 1995. Under this agreement,
which is extended from year to year in the absence of a notice of
 non-renewal given at least 90 days prior to end of each
fiscal year, Mr. McDonough receives an annual salary of
$136,000, subject to annual increases, and is eligible for a
bonus of not less than $50,000 based upon Iron Ages
achievement of EBITDA targets. If Mr. McDonough is
terminated other than for cause or resigns voluntarily for good
reason, he is entitled to receive continued salary for
18 months and continued coverage under group health plans
for one year following his termination or resignation. If Mr.
McDonoughs employment is terminated by reason of his death
and he is survived by his spouse, his surviving spouse is
entitled to receive continued coverage under group health plans
until the earlier of her 65th birthday or January 31, 2000.
If Mr. McDonoughs employment is terminated by reason
of his incapacity, Mr. McDonough is entitled to receive
continued coverage under group health plans until
January 31, 2000.

Prior to his retirement on January 31, 2000,
Mr. Johanson was employed by Falcon pursuant to an agreement
 dated August 1, 1994. Under this agreement, Mr. Johanson
received an annual salary of $190,000 and was eligible for a
bonus of 25-35% of base salary determined by Falcons
achievement of operating income targets. Effective
February 1, 2000, Mr. Johanson became a consultant to
Falcon under a five-year agreement which provides for a
consulting fee of $10,000 for the first year and reimbursement of
 reasonable and necessary business expenses.

Compensation Committee Interlocks and Insider Participation

Messrs. Lamm, Geisser and Jensen were appointed to the
Compensation Committee by Holdings Board of Directors on
September 15, 1998. Mr. Jensen is an executive officer
of Holdings. Mr. Jensens compensation for fiscal 2000
was previously established by the terms of his employment
agreement.

Concurrent with the formation of the Compensation Committee on
September 19, 1998, the Audit Committee was formed. Membership as
 of January 29, 2000 consists of Messrs. Geisser,
Jensen and Satchu.

-57-



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##### Table of Contents






Item 12. Security Ownership of Certain Beneficial Owners
and Management.

As of April 18, 2000, the outstanding capital stock of
Holdings consisted of 99,991.94 shares of common stock, par value
 $0.01 per share, and 1,000 shares of Holdings Series B
 Preferred Stock, par value $0.01 per share.

The following table sets forth certain information as of
April 18, 2000 regarding the beneficial ownership of
(i) each class of voting securities of Holdings by each
person known to Holdings to own more than 5% of any class of
outstanding voting securities of Holdings and (ii) the
equity securities of Holding by each director of Holdings, each
Named Executive Officer of Holdings, and the directors and
executive officers of Holdings as a group. To the knowledge of
Holdings, each such stockholder has sole voting and investment
power as to the shares owned unless otherwise noted. Beneficial
ownership of the securities listed in the table has been
determined in accordance with the applicable rules and
regulations promulgated under the Securities Exchange Act of
1934, as amended.

|                                                                                    |                               |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |   | 
|----------------------------------------------------------------------------------- | ----------------------------- | ------------------------------------- | --------- | ------------- |  | --------- | ----- | ------------- |  |  | ----- |  |  |  | --- | - | 
|                                                                                    |                               |                                      
|                                                                                    |                               | Shares Beneficially Owned(1)         
|                                                                                    |                               |                                       |           |              
|                                                                                    |                               | Common Stock Series B Preferred Stock
|                                                                                    |                               |                                      
|                                                                                    |                               | Number of                             |           | Percentage of |  | Number of |       | Percentage of
|Name and Address                                                                    |                               | Shares                                |           | Class         |  | Shares    |       | Class        
|                                                                                    |                               |                                       |           |               |  |           |       |              
|Principal Stockholders:                                                             |                               |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Fenway Partners Capital Fund, L.P.(2)                                               |                               |                                       | 88,431.57 |               |  |           | 88.44 | %             |  |  | 1,000 |  |  |  | 100 | %
|                                                                                    | 152 West 57th Street          |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |   | 
|                                                                                    | New York, New York 10019      |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |   | 
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|New York Life Insurance Company(3)                                                  |                               |                                       | 11,187.21 |               |  |           | 10.69 |               |  |  |      |  |  |  |    |  
|                                                                                    | 51 Madison Avenue             |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |   | 
|                                                                                    | New York, NY 10010            |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |   | 
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|American Home Assurance Company(4)                                                  |                               |                                       | 5,593.61  |               |  |           | 5.47  |               |  |  |      |  |  |  |    |  
|                                                                                    | c/o AIG Global Investment Co. |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |   | 
|                                                                                    | 200 Liberty Street            |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |   | 
|                                                                                    | New York, NY 10281            |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |   | 
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Directors and Executive Officers:                                                   |                               |                                       |           |               |  |           |       |               |  |  |       |  |  |  |     |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|William J. Mills(5)                                                                 |                               |                                       | 2,442.43  |               |  |           | 2.38  |               |  |  |      |  |  |  |    |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Donald R. Jensen(6)                                                                 |                               |                                       | 6,744.83  |               |  |           | 6.32  |               |  |  |      |  |  |  |    |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Keith A. McDonough(7)                                                               |                               |                                       | 2,421.42  |               |  |           | 2.36  |               |  |  |      |  |  |  |    |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Theodore C. Johanson                                                                |                               |                                       |          |               |  |           | *     |               |  |  |      |  |  |  |    |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Joseph J. Sebes(8)                                                                  |                               |                                       | 447.05    |               |  |           | *     |               |  |  |      |  |  |  |    |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Peter Lamm(9)                                                                       |                               |                                       |          |               |  |           |      |               |  |  |      |  |  |  |    |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Andrea Geisser(9)                                                                   |                               |                                       |          |               |  |           |      |               |  |  |      |  |  |  |    |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Reza R. Satchu(9)                                                                   |                               |                                       |          |               |  |           |      |               |  |  |      |  |  |  |    |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|All directors and executive officers as a group, including the
	above named persons |                               |                                       | 12,055.73 |               |  |           | 10.76 |               |  |  |      |  |  |  |    |  



|    |                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Less than one percent.                                                                                                                                                                                                                                                     
|   
|(1) | As used in this table, beneficial ownership means the sole or
	shared power to vote, or to direct the voting of a security, or
	the sole shared power to dispose, or direct the disposition, of a
	 security and includes options and warrants exercisable within
	60 days.
|   
|(2) | Includes shares of common stock held by Fenway and its affiliated
	 entities FPIP, LLC and FPIP Trust, LLC.                                                                                                                                                                
|   
|(3) | Includes 4,641.66 shares of common stock subject to acquisition
	from Holdings at a purchase price of $185.52                                                                                                                                                              

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per share pursuant to a warrant that expires
on February 26, 2007.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Includes 2,320.83 shares of common stock subject to acquisition
	from Holdings at a purchase price of $185.52 per share pursuant
	to a warrant that expires on February 26, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(5) | Includes 2,194.43 shares of common stock that may be acquired
	upon the exercise of outstanding Series A Options at an
	exercise price of $36.36 per share and 248 shares that may
	be acquired upon the exercise of outstanding Series B
	Options at an exercise price of $363.60 per share pursuant to the
	 Option Plan of Holdings. See Management Equity
	Arrangements.                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(6) | Includes 6,404.83 shares of common stock that may be acquired
	upon the exercise of outstanding Series A Options at an
	exercise price of $36.36 per share and 340 shares that may
	be acquired upon the exercise of outstanding Series B
	Options at an exercise price of $363.60 per share pursuant to the
	 Option Plan (as defined) of Holdings. See Management
	Equity Arrangements.                                                                                                                                                                                                                                                                                                                                                                                
|   
|(7) | Includes 2,194.42 shares of common stock that may be acquired
	upon the exercise of outstanding Series A Options at an
	exercise price of $36.36 per share and 227 shares that may
	be acquired upon the exercise of outstanding Series B
	Options at an exercise price of $363.60 per share pursuant to the
	 Option Plan of Holdings. See Management Equity
	Arrangements.                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(8) | Includes 367.05 shares of common stock that may be acquired upon
	the exercise of outstanding Series A Options at an exercise
	price of $36.36 per share and 80 shares that may be acquired
	 upon the exercise of outstanding Series B Options at an
	exercise price of $363.60 per share pursuant to the Option Plan
	of Holdings. See Management Equity Arrangements.                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(9) | Includes shares of common stock owned by Fenway and its
	affiliated entities, FPIP, LLC and FPIP Trust, LLC.
	Messrs. Lamm, Geisser and Satchu are limited partners of
	Fenway Partners, L.P., the general partner of Fenway.
	Accordingly, Messrs, Lamm, Geisser and Satchu may be deemed to
	beneficially own shares owned by Fenway. Messrs. Lamm,
	Geisser and Satchu are members of FPIP, LLC and FPIP Trust, LLC
	and, accordingly, may be deemed to beneficially own shares owned
	by such funds. Messrs.  Lamm, Geisser and Satchu disclaim
	beneficial ownership of any such shares in which they do not have
	 pecuniary interests. The business address of each of the
	foregoing is c/o Fenway Partners, Inc., 152 West 57th
	Street, New York, New York 10019.

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##### Table of Contents






Item 13. Certain Relationships and Related Transactions.

Management Equity Arrangements

Holdings adopted a Stock Option Plan (the Option
Plan) for the benefit of directors, executive officers,
other employees, consultants and advisors of Holdings and its
subsidiaries on February 26, 1997. The Plan provides for
issuance of Series A options (Series A
Options) and Series B options (Series B
Options). Series B Options are designated as either
Series B-Basic B Options or
Series B-Extra B Options. Series A
Options vest immediately in full on the date such options are
granted, Series B-Basic B Options are subject to certain
time and performance vesting restrictions and
Series B-Extra B Options vest only in connection with
the consummation by Fenway of a sale, other than to one of its
affiliates, of its entire equity interest in Holdings and the
attainment of certain internal rate of return objectives.
Holdings has reserved 20,244.70 shares of Holdings common stock
for issuance under the Option Plan, 11,527.78 of which shares are
 reserved for Series A Options and 8,716.92 of which shares
are reserved for Series B Options.

In February 1997, Holdings granted Series A Options to
certain management employees to purchase an aggregate of
11,527.78 shares of common stock at an exercise price of $36.36
per share. These Series A Options were issued in exchange
for existing options for shares of the parent of the predecessor
in connection with the Fenway Acquisition. The Series A
Options granted expire on February 28, 2007. In
August 1997, Holdings granted to certain management
employees Series B-Basic B Options to purchase an aggregate
of 5,508 shares of common stock and Series B-Extra B Options
 to purchase an aggregate of 3,058.77 shares of common stock. All
 of the Series B Options granted expire on February 28,
2007. The exercise price of Series B Options granted in
August 1997 (i) that were not vested (as such term is
defined in the Option Plan) as of April 24, 1998 is
approximately $186 per share and (ii) that were vested (as
such term is defined in the Option Plan) as of April 24,
1998 is approximately $364 per share. 367.05 of the Series A
 Options granted under the Option Plan have been exercised.

In connection with the April 1998 Transactions, members of
management of Iron Age holding vested options received aggregate
payments of $2,245,000 which reflects the decrease in the equity
value of the Company as a result of the cash distribution to the
stockholders of Holdings in the April 1998 Transactions.

Stockholders Agreement

Holdings, Fenway and all of the other stockholders and
optionholders of Holdings entered into a stockholders agreement
(the Stockholders Agreement) that, among other
things, provides for tag-along rights, take-along rights,
registration rights, restrictions on the transfer of shares held
by parties to the Stockholders Agreement, certain rights of first
 refusal for Holdings and certain preemptive rights for certain
stockholders. The Stockholders Agreement also provides that the
parties thereto will vote their shares in the same manner as
Fenway in connection with certain transactions and that Fenway
will be entitled to fix the number of directors of Holdings.
Pursuant to the Stockholders Agreement, Fenway is entitled to
designate a sufficient number of directors to maintain a majority
 of the board of directors of Holdings and Donald R. Jensen is
entitled to designate one director.

Management Agreement

Holdings and Iron Age are party to the amended and restated
management agreement (the Management Agreement) with
Fenway Partners, Inc., an affiliate of Fenway (Fenway
Partners) pursuant to which Fenway Partners agreed to
provide management and advisory services to Holdings and Iron
Age. In exchange for such services, Holdings and Iron Age agreed
to pay Fenway Partners (i) annual management fees equal to
$250,000 for fiscal 1999 and fiscal 1998, $275,000 for fiscal
2000, $300,000 for fiscal 2001 and, for each subsequent fiscal
year, 0.25% of the net sales for the immediately preceding fiscal
 year which annual management fees shall be increased by an
amount to be negotiated in good faith in the event of an
acquisition of a business with an enterprise value in excess of
$50 million, (ii) fees in connection with the
negotiation and consummation by Fenway Partners of senior
financing for any acquisition transactions, which fees shall not
exceed the greater of $1 million or 1.5% of the

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---



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aggregate transaction value and (iii) certain fees and
expenses, including legal and accounting fees and any
out-of-pocket expenses incurred by Fenway Partners in connection
with providing services to Holdings and Iron Age. Holdings and
Iron Age also agreed to indemnify Fenway Partners under certain
circumstances. In addition, pursuant to the Management Agreement,
 Fenway Partners received $2,070,000 in connection with the
structuring of the Fenway Acquisition and the related senior
secured financing. Holdings believes that the fees payable
pursuant to the Management Agreement are comparable to fees
payable to unaffiliated third parties for similar services.






Part IV





Item 14. Exhibits, Financial Statement Schedules, and
Reports On Form 8-K.

(a)(1) Financial Statements

See Index to Financial Statements appearing at page 19.

(a)(2) Financial Statement Schedules

The following Financial Statement Schedule is included at
page 50:

Schedule II  Valuation and Qualifying Accounts.



| |                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Information required by other schedules called for under
	Regulation S-X is either not applicable or is included in
	the consolidated financial statements or notes thereto.

(a)(3) Exhibit Index

|       |  |                                                                                                                                                            
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1*   |  | Holdings Certificate of Incorporation, as amended.                                                                                                         
|3.2*   |  | Holdings By-laws.                                                                                                                                          
|4.1*   |  | Indenture dated as of April 24, 1998.                                                                                                                      
|10.1*  |  | Credit Agreement dated as of April 24, 1998.                                                                                                               
|10.2*  |  | Security Agreement dated April 24, 1998.                                                                                                                   
|10.3*  |  | Intellectual Property Security Agreement dated April 24,
	1998.                                                                                            
|10.4*  |  | Canadian Security Agreement dated April 24, 1998.                                                                                                          
|10.5*  |  | Mortgage, Assignment of Leases and Rents, Fixture Filing,
	Security Agreement and Financing Statement dated February 
	26, 1997, as amended April 24, 1998.
|10.6*  |  | Intercompany Subordination agreement dated April 24, 1998.                                                                                                 
|10.7*  |  | Subsidiary Guaranty dated April 24, 1998.                                                                                                                  
|10.8*  |  | Iron Age Trademark License Agreement with W.L. Gore &
	Associates, Inc. dated August 15, 1994.                                                             
|10.9*  |  | Falcon Trademark License Agreement with W.L. Gore &
	Associates, Inc. dated July 25, 1994.                                                                 
|10.10* |  | Falcon Manufacturing Certification Agreement with W.L. Gore &
	 Associates, Inc. dated July 25, 1994.                                                      
|10.11* |  | General Services Administration Contract effective July 26,
	1994, as modified May 24, 1995.                                                               
|10.12* |  | Amended and Restated Management Agreement dated as of
	February 26, 1997.                                                                                  
|10.13* |  | Stockholders Agreement dated as of February 26, 1997.                                                                                                      
|10.14* |  | Amendment No. 1 to Stockholders Agreement dated as of
	March 25, 1997.                                                                                     
|10.15* |  | American Home Assurance Company Joinder to the Stockholders
	Agreement dated as of March 25, 1997.                                                         
|10.16* |  | Banque Nationale de Paris Joinder to the Stockholders Agreement
	dated as of March 25, 1997.                                                               
|10.17* |  | Stock Option Plan dated February 26, 1997.                                                                                                                 
|10.18* |  | Securities Purchase Agreement dated February 26, 1997.                                                                                                     
|10.19* |  | Stock Purchase Agreement dated as of December 26, 1996.                                                                                                    
|10.20* |  | Amendment No. 1 to the Stock Purchase Agreement dated as of
	February 26, 1997.                                                                            
|10.21* |  | Pittsburgh, Pennsylvania Lease Agreement dated March 1,
	1993, as amended June 2, 1994, as amended June 12,
	1996, as amended December 10, 1997.           

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##### Table of Contents



|         |  |                                                                                                                                               
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|10.22*   |  | Jerusalem, New York Lease Agreement dated December 9, 1992,
	as amended January 1, 1994, as amended April 1997.                               
|10.23*   |  | Jerusalem, New York Lease Agreement dated June 20, 1997, as
	amended January 9, 1998.                                                         
|10.24*   |  | Lewiston, Maine Lease Agreement dated January 14, 1994.                                                                                       
|10.25*   |  | Lewiston, Maine Lease Agreement dated November 30, 1990, as
	amended June 8, 1994.                                                            
|10.26*   |  | Ontario, Canada Lease Agreement dated June 11, 1991, as
	amended November 23, 1995.                                                           
|10.27*   |  | Jensen Employment Agreement dated February 26, 1997.                                                                                          
|10.28*   |  | Mills Employment Agreement dated November 20, 1995.                                                                                           
|10.29*   |  | McDonough Employment Agreement dated November 20, 1995.                                                                                       
|10.30*   |  | Johanson Employment Agreement date August 1, 1994.                                                                                            
|10.31*   |  | Johanson Non-Competition Agreement dated August 1, 1994.                                                                                      
|10.32**  |  | Taaffe Severance Agreement dated January 13, 1999.                                                                                            
|10.33**  |  | Taaffe Agreement and General Release dated January 13, 1999.                                                                                  
|10.34**  |  | Letter Waiver to Banque Nationale de Paris Credit Agreement dated
	 August 28, 1998.                                                          
|10.35**  |  | Amendment No. 2 and Waiver to Banque Nationale de Paris
	Credit Agreement dated February  26, 1999.                                           
|10.36**  |  | Election to reduce Acquisition Commitment of Banque Nationale de
	Paris Credit Agreement dated March 5, 1999                                  
|10.37*** |  | Amendment No. 3 to Banque Nationale de Paris Credit
	Agreement dated June 23, 1999.                                                           
|10.38    |  | Amendment No. 4 to Banque Nationale de Paris Credit
	Agreement dated March 17, 2000.                                                          
|10.39    |  | Amendment No. 1 to Stock Option Plan dated April 8,
	1999.                                                                                    
|10.40    |  | Amendment No. 2 to Stock Option Plan dated January 29,
	2000.                                                                                 
|10.41    |  | Johanson Consulting Agreement dated February 1, 2000.                                                                                         
|10.42    |  | Certificate of Designation, Preferences and Rights of the
	Series B Preferred Stock of Iron Age Holdings Corporation
	dated December 29, 1999.
|21.1*    |  | Subsidiaries of Holdings.                                                                                                                     
|27.1     |  | Financial Data Schedules.                                                                                                                     






|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Incorporated by reference to the similarly numbered exhibit in
	the Companys Registration Statement on Form S-4,
	No. 333-57009, filed June 17, 1998.
|   
|**  | Incorporated by reference to the similarly numbered exhibit in
	the Companys Annual Report on Form 10-K, filed
	April 30, 1999.                      
|   
|*** | Incorporated by reference to the similarly numbered exhibit in
	the Companys Quarterly Report on Form 10-Q, filed
	September 14, 1999.               

(b) Reports On Form 8-K.

No reports on Form 8-K were filed during the fourth quarter
of the fiscal year ended January 29, 2000.

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##### Table of Contents



Signatures

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.



| |                              
| | -----------------------------
| | Iron Age Holdings Corporation

Dated: April 18, 2000

| |                           
| | --------------------------
| | By: /S/ KEITH A. MCDONOUGH
| | Vice President Finance,   
| | Chief Financial Officer   
| | (Principal Financial and  
| | Accounting Officer)       

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

|                                           |  |                                                                                                |  |               
|------------------------------------------ |  | ---------------------------------------------------------------------------------------------- |  | --------------
|SIGNATURE                                  |  | TITLE                                                                                          |  | DATE          
|/S/ WILLIAM J. MILLS
	William J. Mills     |  | President and Director
	(principal executive officer)                                          |  | April 18, 2000
|                                          
|/S/ DONALD R. JENSEN
	Donald R. Jensen     |  | Chairman and Director                                                                          |  | April 18, 2000
|                                          
|/S/ KEITH A. MCDONOUGH
	Keith A. McDonough |  | Vice President Finance,
	Chief Financial Officer
	(principal financial and accounting officer) |  | April 18, 2000
|                                          
|/S/ JOSEPH J. SEBES
	Joseph J. Sebes       |  | Executive Vice President/
	Corporate Accounts, Iron Age                                        |  | April 18, 2000
|                                          
|/S/ PETER LAMM
	Peter Lamm                 |  | Director                                                                                       |  | April 18, 2000
|                                          
|/S/ ANDREA GEISSER
	Andrea Geisser         |  | Vice President and Director                                                                    |  | April 18, 2000
|                                          
|/S/ REZA R. SATCHU
	Reza R. Satchu         |  | Director                                                                                       |  | April 18, 2000

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