---------------------------------------------------------------------
---------------------------------------------------------------------

                SECURITIES AND EXCHANGE COMMISSION
                ----------------------------------
                      Washington, D.C. 20549

                             FORM 10-K
                             ---------
(Mark One)

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

            FOR THE FISCAL YEAR ENDED FEBRUARY 1, 2003

                                OR
                                --

|_| TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE
    ---------------------------------------------------------------
    SECURITIES EXCHANGE ACT OF 1934.
    -------------------------------

                    COMMISSION FILE NO. 1-11980


                          ANNTAYLOR, INC.
                          ---------------
      (Exact name of registrant as specified in its charter)


       DELAWARE                                   51-0297083
       --------                                   ----------
(State or other jurisdiction of     (I.R.S. Employer Identification Number)
 incorporation or organization)


   142 WEST 57TH STREET, NEW YORK, NY                       10019
    ----------------------------------                      -----
  (Address of principal executive offices)                (Zip Code)


                          (212) 541-3300
                          --------------
       (Registrant's telephone number, including area code)

                          ---------------

    SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                               None.

    SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                               None.
                          ---------------


      Indicate by check mark whether  registrant  (1) has filed all
reports  required  to be  filed  by  Section  13 or  15(d)  of  the
Securities  Exchange  Act of 1934  during the  preceding  12 months
(or for such  shorter  period that 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    .
                                         ---        ---
      Indicate  by  check  mark  whether  the   registrant   is  an
accelerated  filer  (as  defined  in  Rule  12b-2  of the  Exchange
Act).  Yes      No  X  .
           ---     ----



      As of February 28, 2003, 1 share of the  registrant's  common
stock was outstanding.


               DOCUMENTS INCORPORATED BY REFERENCE:
                               NONE.


      The registrant meets the conditions set forth in General
Instruction I(1)(a) and (b) of Form 10-K and is therefore filing
this form with the reduced disclosure format.


---------------------------------------------------------------------
---------------------------------------------------------------------
================================================================================
<PAGE>1

                                  PART I
                                  ------


ITEM 1. BUSINESS
-------

GENERAL

      AnnTaylor, Inc. (the "Company" or "Ann Taylor"),  through its
wholly  owned   subsidiaries,   is  a  leading  national  specialty
retailer of better quality women's  apparel,  shoes and accessories
sold  primarily  under the "Ann Taylor" and "Ann Taylor Loft" brand
names.   The  Company  believes  that  "Ann  Taylor"  is  a  highly
recognized  national  brand that defines a distinct  fashion  point
of  view.  Ann  Taylor   merchandise   represents  classic  styles,
updated to reflect  current fashion  trends.  The Company's  stores
offer a full range of career and casual separates,  dresses,  tops,
weekend  wear,  shoes  and  accessories,  coordinated  as part of a
total  wardrobing  strategy.  This  total  wardrobing  strategy  is
reinforced  by an  emphasis  on client  service.  Ann Taylor  sales
associates are trained to assist  clients in merchandise  selection
and  wardrobe  coordination,  helping  them achieve the "Ann Taylor
look" while  reflecting the clients'  personal  styles.  Unless the
context indicates  otherwise,  all references herein to the Company
include the Company and its wholly owned subsidiaries.

      As of  February  1, 2003,  the  Company  operated  584 retail
stores in 42 states,  the  District  of  Columbia  and Puerto  Rico
under  the  names  Ann  Taylor,  Ann  Taylor  Loft  and Ann  Taylor
Factory  Stores.  The Company's  350 Ann Taylor  stores  compete in
the  "better"-priced  market.  Approximately  62% of  these  stores
are located in regional  malls,  26% are located in village  shops,
and 12% are located in downtown  areas.  The Company  believes that
the client base for its Ann Taylor  stores  consists  primarily  of
relatively  affluent,  fashion-conscious  women from the ages of 25
to 55,  and that  the  majority  of its  clients  are  professional
women with  limited time to shop,  who are  attracted to Ann Taylor
by its  focused  merchandising  and  total  wardrobing  strategies,
personalized   client   service,   efficient   store   layouts  and
continual flow of new merchandise.

      As of February 1, 2003,  the Company  operated 207 Ann Taylor
Loft  stores.  Approximately  52% of these  stores  are  located in
regional  malls,  33% are located in  lifestyle  centers,  with the
remaining  15% located in downtown and mill  locations.  Ann Taylor
Loft  stores  compete in the  "upper-moderate"-priced  market.  Ann
Taylor Loft is  designed  for women with a more  relaxed  lifestyle
and work  environment,  who appreciate the Ann Taylor style but are
more price  sensitive.  Merchandise  is created  uniquely for these
stores  and is sold  under the Ann  Taylor  Loft  label.  The first
Ann  Taylor  Loft  stores  opened by the  Company  were  located in
factory  outlet  centers.  In 1998,  the Company  began opening Ann
Taylor Loft  stores  outside the  factory  outlet  environment,  in
regional  malls,  lifestyle  centers and urban and  village  street
locations.  During  Fiscal  2002,  the  Company  converted  18  Ann
Taylor  Loft  stores  located  in  outlet  centers  to  Ann  Taylor
Factory   stores.   Management   believes   that  Ann  Taylor  Loft
represents  a  significant  opportunity  for the Company to compete
in the upper-moderate-priced women's apparel market.

      At February 1, 2003,  the Company also operated 27 Ann Taylor
Factory  stores in factory  outlet  centers,  including  the 18 Ann
Taylor  Loft stores  located in factory  outlet  centers  that were
converted  during Fiscal 2002.  Ann Taylor  Factory stores serve as
a  brand-appropriate  clearance  vehicle for merchandise  from both
Ann Taylor and Ann Taylor  Loft  stores.  Additionally,  Ann Taylor
Factory  stores  handle an  assortment  of  current  season  styles
created  uniquely  for these  stores  and sold under the Ann Taylor
Factory store label.

       In Fiscal  2000,  the Company  launched  anntaylor.com  (the
"Online  Store"),  making  Ann  Taylor  merchandise  available  for
direct  retail  sale to  clients  over  the  Internet.  The  Online
Store was designed as an extension of the in-store  experience  and
offers a wide  selection of each  season's  Ann Taylor  collection.
The Company  believes that the Online Store further  builds the Ann
Taylor  brand  and  enhances  the  Company's   relationships   with
clients,  as well as creates the  opportunity  for sales to new and
existing clients.

      In January  2003,  the  Company  launched  anntaylorloft.com.
The site  currently  offers  clients a search  vehicle for locating
stores,  as well as the opportunity to sign up to receive  catalogs
and other  promotional  materials  via regular  mail or email.  The
site is scheduled for e-commerce in early 2004.

      The Company was  incorporated  under the laws of the state of
Delaware  in  1986.  All of the  outstanding  capital  stock of the
Company,  consisting  of one  share of  common  stock,  is owned by


================================================================================
<PAGE>2

AnnTaylor  Stores  Corporation  ("ATSC").  The Company was acquired
by ATSC in a leveraged buyout transaction in 1989.


STATEMENT REGARDING FORWARD-LOOKING DISCLOSURES

      Sections of this annual  report on Form 10-K contain  various
forward-looking  statements,  made  pursuant  to  the  safe  harbor
provisions  of the  Private  Securities  Litigation  Reform  Act of
1995. The  forward-looking  statements may use the words  "expect",
"anticipate",  "plan", "intend",  "project",  "believe" and similar
expressions.   These   forward-looking   statements   reflect   the
Company's  current  expectations   concerning  future  events,  and
actual results may differ  materially from current  expectations or
historical  results.  Any  such   forward-looking   statements  are
subject to various risks and  uncertainties,  including  failure by
the  Company  to predict  accurately  client  fashion  preferences;
decline  in the  demand for  merchandise  offered  by the  Company;
competitive  influences;  changes  in  levels of store  traffic  or
consumer  spending  habits;  effectiveness  of the Company's  brand
awareness and marketing  programs;  general economic  conditions or
a downturn in the retail  industry;  the  inability  of the Company
to locate new store sites or  negotiate  favorable  lease terms for
additional  stores or for the  expansion of existing  stores;  lack
of sufficient  consumer  interest in the Company's  Online Store; a
significant  change in the  regulatory  environment  applicable  to
the  Company's  business;  an increase in the rate of import duties
or  export  quotas  with  respect  to  the  Company's  merchandise;
financial  or  political  instability  in any of the  countries  in
which  the  Company's  goods  are  manufactured;  acts  of  war  or
terrorism  in the  United  States  or  worldwide;  work  stoppages,
slowdowns  or  strikes;   and  other   factors  set  forth  in  the
Company's  filings  with the SEC.  The Company  does not assume any
obligation  to update or revise any  forward-looking  statements at
any  time  for  any  reason.   See  "Management's   Discussion  and
Analysis  of  Financial  Condition  and  Results  of  Operations  -
Statement Regarding Forward-Looking Disclosures".


ITEM 2. PROPERTIES
------

      As of February 1, 2003, the Company operated 584 stores,  all
of which were leased.  Store leases  typically  provide for initial
terms of ten years,  although  some leases  have  shorter or longer
initial  periods.  Some of the leases  grant the  Company the right
to extend  the term for one or two  additional  five-year  periods.
Some leases also contain early  termination  options,  which can be
exercised by the Company  under  specific  conditions.  Most of the
store leases  require the Company to pay a specified  minimum rent,
plus a  contingent  rent based on a  percentage  of the store's net
sales  in  excess  of a  specified  threshold.  Most of the  leases
also require the Company to pay real estate  taxes,  insurance  and
certain common area and maintenance costs.

      The Company leases corporate  offices at 142 West 57th Street
and 1372  Broadway  in New  York  City.  The  Company  also  leases
office space in New Haven, Connecticut.

      The   Company's    wholly   owned    subsidiary,    AnnTaylor
Distribution   Services,   Inc.,   owns  its  256,000  square  foot
distribution  center  located in Louisville,  Kentucky.  Nearly all
Ann Taylor  merchandise  is  distributed  to the  Company's  stores
through  this   facility.   The  parcel  on  which  the  Louisville
distribution  center is located  comprises  approximately  20 acres
and could accommodate possible future expansion of the facility.


ITEM 3. LEGAL PROCEEDINGS
------

      The Company is a party to routine litigation  incident to its
business.  Although  the amount of any  liability  that could arise
with respect to these actions  cannot be accurately  predicted,  in
the  opinion of the  Company,  any such  liability  will not have a
material  adverse effect on the  consolidated  financial  position,
consolidated results of operations, or liquidity of the Company.

                                       2
================================================================================
<PAGE>3

                              PART II
                              -------


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

      There  is no  public  market  for  the  common  stock  of the
Company.  All of the outstanding  stock of the Company,  consisting
of one share of common stock, is owned by ATSC.

      The payment of  dividends by Ann Taylor to ATSC is subject to
certain   restrictions   under  the   Company's   Credit   Facility
described  below under  "Management's  Discussion  and  Analysis of
Financial  Condition  and  Results  of  Operations--Liquidity   and
Capital   Resources".   From  time  to  time,   the  Company   pays
dividends to ATSC in amounts  sufficient  to fund ATSC's  operating
expenses.


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

SALES

      The  following  table sets forth certain sales and store data
for the periods indicated:

                                                       FISCAL YEAR
                                        ---------------------------------------
                                            2002         2001           2000
                                            ----         ----           ----

                                        (52 weeks)    (52 weeks)     (53 weeks)

Net sales ($000) ...................... $1,380,966    $1,299,573    $1,232,776

Total net sales increase
   percentage (52-week basis) .........        6.3%          6.8%         12.2%

Total comparable store sales decrease
   decrease percentage
  (52-week basis) .....................       (3.9)%        (6.1)%        (0.5)%

Net sales per average
   gross square foot .................. $      434    $      452    $      496

Total store square footage
   at end of period....................  3,305,000     3,057,000     2,695,000

Number of:
   New stores .........................         49            67            81
   Expanded stores ....................        ---             6             4
   Closed stores ......................          3             7             8
Total stores open at end of period ....        584           538           478

      The  Company's  net  sales do not show  significant  seasonal
variation,   although   net  sales  in  the  fourth   quarter  have
historically  been  higher  than  in  the  other  quarters.   As  a
result,  the Company  has not had  significant  overhead  and other
costs generally associated with large seasonal variations.

                                       3
================================================================================
<PAGE>4

RESULTS OF OPERATIONS

      The following table sets forth consolidated  income statement
data  expressed  as a  percentage  of net  sales  for  the  periods
indicated:

                                      FISCAL YEAR
                                ------------------------
                                 2002     2001     2000
                                 ----     ----     ----

Net sales .................     100.0%   100.0%   100.0%
Cost of sales .............      45.9     50.2     50.5
                                 ----     ----     ----
    Gross margin ..........      54.1     49.8     49.5
Selling, general and
    administrative expenses      44.3     44.4     40.7
Amortization of goodwill ..       ---      0.8      0.9
                                 ----     ----     ----
    Operating income ......       9.8      4.6      7.9
Interest income ...........       0.2      0.1      0.2
Interest expense ..........       0.5      0.5      0.6
                                 ----     ----     ----
Income before income taxes        9.5      4.2      7.5
Income tax provision ......       3.7      2.0      3.3
                                 ----     ----     ----
Net income ................       5.8%     2.2%     4.2%
                                 ====     ====     ====


FISCAL 2002 COMPARED TO FISCAL 2001

      The  Company's  net sales  increased to  $1,380,966,000  from
$1,299,573,000  in Fiscal  2001,  an  increase of  $81,393,000,  or
6.3%.  Comparable  store  sales for  Fiscal  2002  decreased  3.9%,
compared to a  comparable  store  sales  decrease of 6.1% in Fiscal
2001. By division,  Fiscal 2002  comparable  store sales  decreased
5.3% for Ann  Taylor  and 1.0% for Ann Taylor  Loft.  The  increase
in net sales  was  primarily  attributable  to the  opening  of new
stores,  partially  offset  by the  decrease  in  comparable  store
sales in Fiscal  2002.  Management  believes  that the  decrease in
comparable   store  sales  was,  in  part,  the  result  of  client
dissatisfaction  with certain of the  Company's  product  offerings
and  merchandise  assortment  available in Ann Taylor stores in the
Fall  2002  season.   Sales  were  also   impacted  by  an  overall
reduction  in  client  spending  caused  by  the  current  economic
environment.

      Gross margin as a percentage of net sales  increased to 54.1%
in Fiscal  2002 from 49.8% in Fiscal  2001.  The  increase in gross
margin  is the  combined  result  of higher  full  price  sales and
higher  margin  rates  achieved  on full price and  non-full  price
sales at both  divisions.  Fiscal  2001 gross  margin was  impacted
by  approximately   $4,100,000  in  pre-tax  nonrecurring  charges,
which  related  to the  inventory  write-off  associated  with  the
discontinuation  of the Ann Taylor  cosmetics  line,  and inventory
costs  associated with canceling  certain Fall 2001 and Spring 2002
merchandise orders.

      Selling,    general   and   administrative    expenses   were
$612,479,000,  or 44.3% of net sales in Fiscal  2002,  compared  to
$576,584,000,  or  44.4%  of  net  sales,  in  Fiscal  2001.  Lower
internet  costs and reduced  marketing  spending  were offset by an
increase in the  provision  for  management  performance  bonus and
higher  tenancy   expenses.   Fiscal  2001  selling,   general  and
administrative  expenses  included  approximately   $12,900,000  in
pre-tax  nonrecurring  charges.  Approximately  $7,200,000  of this
amount related to the write-down of certain  anntaylor.com  assets,
based upon  projected  cash flows,  which were not deemed  adequate
to support the carrying  value of the assets  associated  with this
ongoing  business.  An additional  $3,300,000  related to the cost,
net of  insurance  proceeds,  of settling a class  action  lawsuit.
The  remaining  $2,400,000  represented  the  write-off  of certain
fixed  assets  related  to the  discontinuation  of the Ann  Taylor
cosmetics  line, and severance  costs  associated  with  reductions
made in the Company's store and home office workforce.

      Operating income  increased to  $135,014,000,  or 9.8% of net
sales in Fiscal 2002,  from  $60,141,000,  or 4.6% of net sales, in
Fiscal  2001.  There  was  no  goodwill  amortization  recorded  in
Fiscal 2002,  in  accordance  with SFAS No. 142,  which the Company
adopted  in   February   2002.   The  Company   recorded   goodwill
amortization  of $11,040,000,  or 0.8% of net sales,  during Fiscal
2001.

      Interest  income was  $3,279,000 in Fiscal 2002,  compared to
$1,390,000   in   Fiscal   2001.   The   increase   was   primarily
attributable  to higher  cash on hand during  Fiscal 2002  compared
to Fiscal 2001, partially offset by lower interest rates.

                                       4
================================================================================
<PAGE>5


      Interest  expense was $6,886,000 in Fiscal 2002,  compared to
$6,869,000 in Fiscal 2001.  The weighted  average  interest rate on
the  Company's  outstanding  indebtedness  at  February 1, 2003 was
3.75%.

      The income tax provision was $51,249,000,  or 39.0% of income
before  income taxes in Fiscal 2002,  compared to  $25,557,000,  or
46.8% of income  before  income taxes in Fiscal 2001.  The decrease
in the  effective  income  tax  rate is  primarily  the  result  of
non-deductible  goodwill  expense  incurred in Fiscal 2001,  which,
as previously discussed, was not recorded in Fiscal 2002.

      As a result of the  foregoing  factors,  the  Company had net
income  of  $80,158,000,  or 5.8% of net  sales  for  Fiscal  2002,
compared to net income of  $29,105,000,  or 2.2% of net sales,  for
Fiscal 2001.


CHANGES IN FINANCIAL POSITION

      Accounts  receivable  decreased to  $10,367,000 at the end of
Fiscal  2002  from  $65,598,000  at  the  end  of  Fiscal  2001,  a
decrease of  $55,231,000,  or 84.2%.  This  decrease was  primarily
attributable to the sale of the Company's  proprietary  credit card
accounts receivable.

      Merchandise   inventories   increased  to   $185,484,000   at
February  1,  2003  from  $180,117,000  at  February  2,  2002,  an
increase  of  $5,367,000  or  3.0%.   Merchandise   inventories  at
February  1,  2003 and  February  2,  2002  included  approximately
$41,771,000 and $37,558,000,  respectively, of inventory associated
with  the  Company's  sourcing   division,   which  is  principally
finished  goods  in  transit  from   factories.   The  increase  in
merchandise  inventories  is primarily  due to inventory  purchased
to  support  new stores  opened  since the  beginning  of the year.
Total store square  footage  increased to  approximately  3,305,000
square  feet at  February  1,  2003  from  approximately  3,057,000
square  feet  at  February  2,  2002.  Merchandise  inventory  on a
per-square-foot  basis,  excluding  inventory  associated  with the
Company's  sourcing  division,  was approximately $43 at the end of
Fiscal   2002,   compared  to  $47  at  the  end  of  Fiscal  2001.
Inventory  turned 4.4 times in Fiscal  2002,  compared to 4.7 times
in Fiscal 2001,  excluding inventory  associated with the Company's
sourcing  division.  Inventory  turnover is  determined by dividing
cost of  sales  by the  average  of the  cost of  inventory  at the
beginning  and end of the period  (excluding  inventory  associated
with the sourcing division).

      Accounts  payable  increased  to  $57,058,000  at the  end of
Fiscal  2002  from  $52,011,000  at the  end  of  Fiscal  2001,  an
increase of $5,047,000,  or 9.7%. The increase in accounts  payable
is primarily due to the timing of payments to vendors.

      Accrued  liabilities  increased to  $94,137,000 at the end of
Fiscal  2002  from  $82,007,000  at the  end  of  Fiscal  2001,  an
increase  of  $12,130,000,   or  14.8%.  The  increase  in  accrued
liabilities  is  primarily  attributable  to  an  increase  in  the
provision for management performance bonus.


LIQUIDITY AND CAPITAL RESOURCES

      The Company's  primary source of working capital is cash flow
from operations.  The following table sets forth material  measures
of the Company's liquidity:

                                                        FISCAL YEAR
                                              ---------------------------------
                                                2002          2001        2000
                                                ----          ----        ----
                                                    (DOLLARS IN THOUSANDS)

    Cash provided by operating activities.    $155,499     $ 77,598    $ 76,625
    Working capital.......................    $304,076    $ 190,798    $172,767
    Current ratio.........................      3.01:1       2.41:1      2.22:1
    Debt to equity ratio..................       .17:1        .20:1       .20:1

                                       5
================================================================================
<PAGE>6


      Cash  provided by operating  activities  in Fiscal  2002,  as
presented on the consolidated  statements of cash flows,  primarily
resulted  from   earnings,   non-cash   charges  and  increases  in
accounts  payable and accrued  liabilities,  partially offset by an
increase in merchandise inventories.

      On April 30,  2001,  the Company  entered into an Amended and
Restated  $175,000,000  senior secured  revolving  Credit  Facility
(the "Credit  Facility")  with Bank of America N.A. and a syndicate
of lenders.  This  Credit  Facility  was  amended on  December  20,
2001 and on August 29,  2002 to adjust  certain  ratio  provisions,
and amend certain  definitions  used in the  calculation  of ratios
required in the Credit  Facility.  The Credit  Facility  matures on
April 29, 2004.

      Maximum  availability  for loans and letters of credit  under
the  Credit  Facility  is  governed  by a monthly  borrowing  base,
determined by the  application  of specified  advance rates against
certain eligible  assets.  Based on this  calculation,  the maximum
amount  available  for loans and letters of credit under the Credit
Facility  at  February  1, 2003 was  $175,000,000.  Commercial  and
standby  letters of credit  outstanding  under the Credit  Facility
as of  February  1,  2003  were  approximately  $97,114,000.  Loans
outstanding  under the Credit  Facility  at any time may not exceed
$75,000,000.  In addition,  the Credit  Facility  requires that the
outstanding  loan  balance be  reduced to zero for a 30-day  period
each calendar  year.  There were no loans  outstanding  at any time
during Fiscal 2002.

      Amounts  outstanding  under the Credit Facility bear interest
at a rate equal to, at the  Company's  option,  the Bank of America
Base  Rate,  defined as the  higher of (a) the  Federal  Funds Rate
plus  one-half  of 1% and (b) the  Prime  Rate  for  such  day,  or
Eurodollar  Rate;  plus,  in either  case,  a margin  ranging  from
0.25% to 2.00%.  The  Company is also  required  to pay the lenders
a  quarterly   commitment   fee  on  the  unused   revolving   loan
commitment  amount  at a rate  ranging  from  0.30%  to  0.50%  per
annum.  Fees for  outstanding  commercial  and  standby  letters of
credit  range  from  0.50%  to  0.875%  and from  1.25%  to  2.00%,
respectively.  Premiums  ranging  from 0.125% to 0.50% may apply to
all  interest and  commitment  fees,  depending  on the  calculated
Leverage ratio.

      The Credit Facility  contains  financial and other covenants,
including  limitations  on  indebtedness,  liens  and  investments,
restrictions  on dividends or other  distributions  to stockholders
and maintenance of certain  financial  ratios  including  specified
levels of tangible net worth.

      The lenders  have been  granted a pledge of the common  stock
of ATSC and certain of its  subsidiaries,  and a security  interest
in  substantially   all  other  tangible  and  intangible   assets,
including trademarks,  inventory,  store furniture and fixtures, of
the Company and its  subsidiaries,  as collateral for the Company's
obligations under the Credit Facility.

      During Fiscal 1999, the Company issued a promissory  note, as
amended,  to  ATSC,  in  an  aggregate  of  $199,072,000  principal
amount  at  maturity  (the  "Note  Payable  to  ATSC").   The  Note
Payable to ATSC was issued by the  Company for value  received  and
has interest and payment terms  substantially  similar to the terms
of the Convertible  Debentures Due 2019 ("Convertible  Debentures")
that  were  issued  in 1999 by  ATSC.  ATSC  has  pledged  the Note
Payable  to  ATSC  to  the  lenders  under  the  Company's   Credit
Facility  as  collateral  for  ATSC's  guarantee  of the  Company's
performance of its obligations under the Credit Facility.

      During  Fiscal 2002 the  seven-year  mortgage loan related to
the   Company's   distribution   center   land  and   building   in
Louisville,  Kentucky  was paid in full.  Ann Taylor and its wholly
owned  subsidiary,  AnnTaylor  Distribution  Services,  Inc.,  were
parties to the $7,000,000 seven-year mortgage loan.

      The  Company's  capital   expenditures  totaled  $45,450,000,
$83,693,000   and  $83,310,000  in  Fiscal  2002,  2001  and  2000,
respectively.  Capital  expenditures  were  primarily  attributable
to the Company's  store  expansion,  renovation  and  refurbishment
programs,  as well as the  investment  the Company  made in certain
information  systems and the  Company's  corporate  offices.  These
expenditures  also  include,   in  Fiscal  2001  and  Fiscal  2000,
capital  expenditures  related to the Company's Internet e-commerce
Web  site,  and  related  enhancements  to  the  material  handling
system at the  Company's  distribution  center.  See  "Management's
Discussion  and  Analysis  of  Financial  Condition  and Results of
Operations - Fiscal 2001  Compared to Fiscal 2000" for  information
regarding  the  asset  write-off   associated  with  the  Company's
Online Store.  The Company  expects its total  capital  expenditure
requirements  in  Fiscal  2003 will be  approximately  $85,000,000,
including  capital for new store  construction for a planned square
footage increase of  approximately  400,000 square feet, or 12%, as

                                       6

================================================================================
<PAGE>7


well as capital to support  continued  investments  in  information
systems and a  refurbishment  program for its existing  store base.
The  actual  amount  of the  Company's  capital  expenditures  will
depend  in  part on the  number  of  stores  opened,  expanded  and
refurbished  and on  the  amount  of  construction  allowances  the
Company receives from the landlords of its new or expanded stores.

      The Company  occupies  its retail  stores and  administrative
facilities   under   operating   leases,    most   of   which   are
non-cancelable.  Some leases  contain  renewal  options for periods
ranging  from one to ten years under  substantially  the same terms
and  conditions  as the original  leases.  Some leases also contain
early  termination  options,  which can be exercised by the Company
under  specific  conditions.  Most  of  the  store  leases  require
payment of a specified  minimum rent,  plus a contingent rent based
on a  percentage  of the store's net sales in excess of a specified
threshold.  In  addition,  most of the  leases  require  payment of
real  estate  taxes,   insurance   and  certain   common  area  and
maintenance   costs  in  addition  to  the  future   minimum  lease
payments shown below.

      Future minimum lease payments under non-cancelable  operating
leases as of February 1, 2003 are as follows:

      FISCAL YEAR                             (IN THOUSANDS)
      -----------
       2003..................................$   145,759
       2004..................................    144,982
       2005..................................    136,510
       2006..................................    115,689
       2007..................................    106,621
       2008 and thereafter...................    386,832
                                               ---------
       Total.................................$ 1,036,393
                                               =========

      On January 26, 2000,  the Company  declared a cash  dividend,
authorized  by its  Board of  Directors,  to ATSC in the  amount of
$89,944,612  to  facilitate  the  repurchase,  by  ATSC,  of  up to
$90,000,000  of its  common  stock  and/or  Convertible  Debentures
through   open   market   purchases   and   privately    negotiated
transactions.   As  of  January  29,  2000,   3,012,500  shares  of
ATSC's common stock had been repurchased for an aggregate  purchase
price  of   $89,900,900   (exclusive  of  brokerage   commissions),
completing  ATSC's  repurchase  program.  All  of  the  repurchased
shares became  treasury  shares of ATSC and may be used for general
corporate  and  other  purposes.  No  Convertible  Debentures  were
purchased.

      In order to finance its operations and capital  requirements,
the Company  expects to use  internally  generated  funds and trade
credit and funds  available  to it under the Credit  Facility.  The
Company   believes  that  cash  flow  from   operations  and  funds
available  under the Credit  Facility are  sufficient  to enable it
to meet its  ongoing  cash  needs for its  business,  as  presently
conducted, for the foreseeable future.

      On February 4, 2002, the Company sold its proprietary  credit
card  portfolio  to World  Financial  Network  National  Bank  (the
"Bank").  The associated gain of $2,095,000 is reported in selling,
general   and   administrative   expenses   in   the   Consolidated
Statements  of Income  for  Fiscal  2002.  In  connection  with the
sale,   the  Company   contracted   with   Alliance   Data  Systems
Corporation  ("ADS"),  the Bank's affiliated  servicer,  to provide
private  label  credit  card  services  to  proprietary  Ann Taylor
credit card clients.  Under the terms of the transaction,  ADS will
manage the Ann Taylor  credit card  program,  and pay the Company a
percentage of all collected finance charges.

      The  Company is party to a 3-year  contract  for  services to
provide training to store  associates,  and maintenance and support
for  related   software.   Payments   under  this  contract   total
$6,500,000 in each of Fiscal 2003 and Fiscal 2004,  and  $5,000,000
in Fiscal 2005.


      Substantially  all  full-time  employees  of the  Company are
covered  under a  noncontributory  defined  benefit  pension  plan.
The Company's  funding  obligations  and liability  under the terms
of the plan are  determined  using certain  actuarial  assumptions,
including a discount rate of 6.75% and an expected  long-term  rate
of return on plan assets of 8.5%.  The discount  rate  selected was
determined  based on the change in the  Moody's Aa  corporate  bond
yields,  which have  decreased  by 59 basis  points over the course

                                       7
================================================================================
<PAGE>8


of Fiscal  2002.  On this basis,  the  discount  rate  utilized was
adjusted  from 7.50% at  February  2, 2002 to 6.75% at  February 1,
2003.  The  market-related  value of plan  assets  for  determining
pension  expense  is  equal  to the  fair  value  of  plan  assets,
recognizing  gains or  losses  as they  occur.  Plan  assets  as of
February  1,  2003  are  allocated  50% in  equities,  33% in  bond
related  funds and 17% in short-term  investments.  For purposes of
developing  long-term  rates of  return,  it was  assumed  that the
short-term  investments  were  reallocated  to  equities,  yielding
assumed  long-term  rates of return of 10% and 6% for  equities and
bond-related   funds,   respectively.   In  selecting  an  expected
long-term  rate of return on plan assets,  consideration  was given
to the  Company's  historical  annual  rate of return over a 7-year
period,  which  averaged  8.8% per year.  In light of this,  and in
view of current market  conditions,  the expected long-term rate of
return  on plan  assets  utilized  was  reduced  from  9.0% for the
fiscal  year ended  February  1, 2003 to 8.5% for the  fiscal  year
ending January 31, 2004.

     The  Company  is  self-insured  for  expenses  related  to its
employee  point  of  service  medical  and  dental  plans,  and its
worker's  compensation  plan,  up  to  certain  thresholds.  Claims
filed,  as well as claims  incurred but not  reported,  are accrued
based on management's  estimates,  using information  received from
plan  administrators,   historical  analysis,  and  other  relevant
data.  Management  believes that it has taken  reasonable  steps to
ensure that the Company is  adequately  accrued for costs  incurred
related to these programs at February 1, 2003.


RECENT ACCOUNTING PRONOUNCEMENTS

      Effective  February 3, 2002 the Company adopted SFAS No. 142,
"Goodwill  and Other  Intangible  Assets".  SFAS No.  142  requires
that  ratable  amortization  of  goodwill  be  replaced by periodic
tests for  impairment  within six  months of the date of  adoption,
and then on a periodic  basis  thereafter.  Based on the impairment
testing  performed in February  2003,  management  determined  that
there was no impairment  loss related to the net carrying  value of
the Company's recorded goodwill.

      In July 2001, the Financial  Accounting  Standards Board (the
"FASB")  issued  SFAS No.  143,  "Accounting  for Asset  Retirement
Obligations",    which   provides   accounting   requirements   for
retirement   obligations   associated   with  tangible   long-lived
assets.  SFAS No.  143 is  effective  for  fiscal  years  beginning
after June 15,  2002.  The  adoption  of SFAS No. 143 has not had a
significant   impact  on  the  Company's   consolidated   financial
statements.

      In August  2001,  The FASB issued  SFAS No. 144,  "Accounting
for  the  Impairment  or  Disposal  of  Long-Lived  Assets".   This
statement  addresses  accounting  and reporting for the  impairment
or disposal of long-lived  assets,  other than goodwill,  including
discontinued  operations.  SFAS No.  144 is  effective  for  fiscal
years  beginning  after  December  15,  2001.  The adoption of SFAS
No. 144 has had no impact on the Company's  consolidated  financial
statements.

      In April 2002,  the FASB issued SFAS No. 145,  "Rescission of
FASB  Statements  No. 4, 44, and 64,  Amendment  of FASB  Statement
No.  13,  and  Technical  Corrections".   SFAS  No.  145  primarily
affects the  reporting  requirements  and  classification  of gains
and  losses  from  the   extinguishment   of  debt,   rescinds  the
transitional  accounting  requirements  for  intangible  assets  of
motor  carriers,  and  requires  that certain  lease  modifications
with economic  effects  similar to  sale-leaseback  transactions be
accounted  for in the same manner as  sale-leaseback  transactions.
SFAS No. 145 is effective  for  financial  statements  issued after
April 2002,  with the  exception of the  provisions  affecting  the
accounting  for lease  transactions,  which  should be applied  for
transactions  entered into after May 15, 2002,  and the  provisions
affecting   classification   of   gains   and   losses   from   the
extinguishment  of debt,  which  should be applied in fiscal  years
beginning  after May 15, 2002.  Management has determined  that the
adoption  of SFAS No.  145 will  have no  immediate  impact  on the
Company's consolidated  financial statements,  but will evaluate in
future  periods  the  classification  of  any  debt  extinguishment
costs  in  accordance  with  APB  Opinion  No.  30  "Reporting  the
Results of  Operations  -  Reporting  the  Effects of Disposal of a
Segment   of   a   Business,   and   Extraordinary,   Unusual   and
Infrequently Occurring Events and Transactions".

      In June 2002, the FASB issued SFAS No. 146,  "Accounting  for
Costs  Associated with Exit or Disposal  Activities".  SFAS No. 146
requires  companies  to  recognize  costs  associated  with exit or
disposal  activities  when they are  incurred,  rather  than at the
date of a  commitment  to an exit or  disposal  plan.  Examples  of
costs covered by the standard include lease  termination  costs and

                                       8

================================================================================
<PAGE>9


certain  employee  severance  costs  that  are  associated  with  a
restructuring,  discontinued  operation,  plant  closing,  or other
exit  or  disposal  activity.   Previous  accounting  guidance  was
provided  by  Emerging   Issues  Task  Force   ("EITF")  No.  94-3,
"Liability  Recognition for Certain Employee  Termination  Benefits
and  Other  Costs  to Exit an  Activity  (including  Certain  Costs
Incurred  in a  Restructuring)".  SFAS No.  146  replaces  EITF No.
94-3,  and is  required  to be  applied  prospectively  to  exit or
disposal   activities   initiated  after  December  31,  2002.  The
Company  adopted  SFAS No. 146 during the fourth  quarter of Fiscal
2002  with  no  material  impact  on  the  Company's   consolidated
financial statements.

      In  November  2002,  the  FASB  issued  FASB   Interpretation
("FIN")   No.   45,   "Guarantor's    Accounting   and   Disclosure
Requirements  for  Guarantees,  Including  Indirect  Guarantees  of
Indebtedness  of  Others".  FIN No. 45  clarifies  and  expands  on
existing  disclosure  requirements  for  guarantees,  and clarifies
that a guarantor  is required to  recognize,  at the  inception  of
the  guarantee,  a  liability  equal  to  the  fair  value  of  the
obligation  undertaken  in  issuing  the  guarantee.   The  initial
recognition   and   measurement   provisions  of  FIN  No.  45  are
applicable  on  a  prospective   basis  for  guarantees  issued  or
modified after December 31, 2002.  The disclosure  requirements  of
FIN No. 45 are  effective  for  financial  statements  issued after
December  15,  2002.  The  Company  adopted  FIN No. 45 during  the
fourth  quarter  of  Fiscal  2002  with no  material  impact on the
Company's consolidated financial statements.

      In January 2003,  the FASB issued FIN No. 46,  "Consolidation
of Variable  Interest  Entities - an  Interpretation  of Accounting
Research  Bulletin  No.  51".  FIN No. 46  requires  unconsolidated
variable  interest  entities to be  consolidated  by their  primary
beneficiaries  if the  entities  do not  effectively  disperse  the
risks  and  rewards  of  ownership  among  their  owners  and other
parties  involved.  The  provisions  of FIN No.  46 are  applicable
immediately  to  all  variable   interest  entities  created  after
January  31,  2003  and  variable  interest  entities  in  which  a
company   obtains  an  interest   after  that  date.  For  variable
interest  entities  created before January 31, 2003, the provisions
of this  interpretation  are effective July 1, 2003.  Management is
currently  evaluating  the provisions of this  interpretation,  and
does not  believe  that it will  have a  significant  impact on the
Company's consolidated financial statements.


CRITICAL ACCOUNTING POLICIES

      On  December  12,  2001,  the United  States  Securities  and
Exchange   Commission  (the  "SEC")  issued   Financial   Reporting
Release ("FRR") No. 60,  "Cautionary  Advice  Regarding  Disclosure
About  Critical   Accounting   Policies",   which   encourages  the
identification  and  disclosure  of the  most  critical  accounting
policies  applied  in  the  preparation  of a  company's  financial
statements.  In response to FRR No. 60,  management  has determined
that the  Company's  most  critical  accounting  policies are those
related  to  merchandise  inventory  valuation,   intangible  asset
impairment,   and  income   taxes.   These   policies  are  further
described in the Notes to the  Consolidated  Financial  Statements,
and in relevant sections of this discussion and analysis.

      Inventory  is valued at the lower of average  cost or market,
at the  individual  item level.  Market is determined  based on the
estimated   net   realizable   value,   which  is   generally   the
merchandise  selling  price.  Inventory  levels  are  monitored  to
identify  slow-moving  merchandise and broken assortments (items no
longer in stock in a sufficient  range of sizes) and  markdowns are
used  to  clear  such  merchandise.   Inventory  value  is  reduced
immediately   when  the  selling   price  is  marked   below  cost.
Physical  inventory  counts are  performed  annually  each January,
and estimates are made for shortage  during the period  between the
last physical inventory count and the balance sheet date.

      Pursuant to the  adoption  of SFAS No. 142 in February  2002,
management   performed  impairment  testing  which  considered  the
Company's net discounted  future cash flows in determining  whether
an  impairment   charge  related  to  the  carrying  value  of  the
Company's  recorded  goodwill was  necessary,  and  concluded  that
there  was no  such  impairment  loss.  This  will  be  reevaluated
annually,   or  more   frequently  if   necessary,   using  similar
testing.  In  the  case  of  long-lived  tangible  assets,  if  the
undiscounted  future cash flows  related to the  long-lived  assets
are less than the  assets'  carrying  value,  a similar  impairment
charge would be  considered.  Management's  estimate of future cash
flows is based on  historical  experience,  knowledge,  and  market
data.  These  estimates  can be affected  by factors  such as those
outlined in the Statement Regarding Forward-Looking Disclosures.

                                       9
================================================================================
<PAGE>10


      The  Company  follows  SFAS No.  109  "Accounting  for Income
Taxes," which  requires the use of the liability  method.  Deferred
tax   assets  and   liabilities   are   recognized   based  on  the
differences  between  the  financial  statement  carrying  value of
existing  assets and  liabilities  and their  respective tax bases.
Inherent  in  the  measurement  of  these  deferred   balances  are
certain  judgments  and  interpretations  of  existing  tax law and
other  published  guidance as applied to the Company's  operations.
No valuation  allowance  has been provided for deferred tax assets,
since  management  anticipates that the full amount of these assets
should be realized  in the  future.  The  Company's  effective  tax
rate considers  management's  judgment of expected tax  liabilities
in the various taxing  jurisdictions  within which it is subject to
tax.  The  Company  has also  been  involved  in both  foreign  and
domestic  tax  audits.  At any  given  time,  many  tax  years  are
subject to audit by various taxing authorities.

      Management   believes  these  critical   accounting  policies
represent the more  significant  judgments  and  estimates  used in
the   preparation   of   the   Company's   consolidated   financial
statements.


STATEMENT REGARDING FORWARD-LOOKING DISCLOSURES

      Sections of this Annual  Report on Form 10-K,  including  the
preceding   Management's   Discussion  and  Analysis  of  Financial
Condition   and   Results   of    Operations,    contain    various
forward-looking  statements,  made  pursuant  to  the  safe  harbor
provisions  of the  Private  Securities  Litigation  Reform  Act of
1995. The  forward-looking  statements may use the words  "expect",
"anticipate",  "plan", "intend",  "project",  "believe" and similar
expressions.   These   forward-looking   statements   reflect   the
Company's  current  expectations   concerning  future  events,  and
actual results may differ  materially from current  expectations or
historical  results.  Any  such   forward-looking   statements  are
subject to various risks and  uncertainties,  including  failure by
the  Company  to predict  accurately  client  fashion  preferences;
decline  in the  demand for  merchandise  offered  by the  Company;
competitive  influences;  changes  in  levels of store  traffic  or
consumer  spending  habits;  effectiveness  of the Company's  brand
awareness and marketing  programs;  general economic  conditions or
a downturn in the retail  industry;  the  inability  of the Company
to locate new store sites or  negotiate  favorable  lease terms for
additional  stores or for the  expansion of existing  stores;  lack
of sufficient  consumer  interest in the Company's  Online Store; a
significant  change in the  regulatory  environment  applicable  to
the  Company's  business;  an increase in the rate of import duties
or  export  quotas  with  respect  to  the  Company's  merchandise;
financial  or  political  instability  in any of the  countries  in
which  the  Company's  goods  are  manufactured;  acts  of  war  or
terrorism  in the  United  States  or  worldwide;  work  stoppages,
slowdowns  or  strikes;   and  other   factors  set  forth  in  the
Company's  filings  with the SEC.  The Company  does not assume any
obligation  to update or revise any  forward-looking  statements at
any time for any reason.


ITEM 7A.   QUANTITATIVE  AND QUALITATIVE  DISCLOSURES  ABOUT MARKET RISK
--------

      The  Company  maintains  the  majority  of its  cash and cash
equivalents in financial  instruments with original  maturity dates
of three months or less.  These  financial  instruments are subject
to interest  rate risk and will decline in value if interest  rates
increase.   Due  to  the   short   duration   of  these   financial
instruments,  a change of 100 basis points in interest  rates would
not have a material effect on the Company's financial condition.

      The Company's  outstanding  long-term  debt as of February 1,
2003  bears  interest  at fixed  rates;  therefore,  the  Company's
consolidated  results  of  operations  would  only be  affected  by
interest  rate  changes to the extent that  fluctuating  rate loans
are  outstanding  under the  Credit  Facility.  As of  February  1,
2003,  the Company has no such amounts  outstanding.  The effect of
interest  rate  changes on the Company  would  depend on the amount
of  indebtedness  outstanding  at the time and the  amount  of such
change.

                                       10
================================================================================


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------

     The  following   consolidated   financial  statements  of  the
 Company  for the years ended  February  1, 2003,  February 2, 2002
 and  February  3, 2001 are  included as a part of this Report (See
 Item 15):

      Consolidated  Statements of Income for the fiscal years ended
         February 1, 2003, February 2, 2002 and February 3, 2001.

      Consolidated  Balance  Sheets  as of  February  1,  2003  and
         February 2, 2002.

      Consolidated  Statements  of  Stockholder's  Equity  for  the
         fiscal years ended February 1, 2003,  February 2, 2002 and
         February 3, 2001.

      Consolidated  Statements  of Cash Flows for the fiscal  years
         ended  February 1, 2003,  February 2, 2002 and February 3,
         2001.

      Notes to Consolidated Financial Statements.


ITEM 9. CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
------
        FINANCIAL DISCLOSURES

      None.

                                       11
================================================================================
<PAGE>12

                                PART III
                                --------



ITEM 14. CONTROLS AND PROCEDURES
-------

      Under  the  supervision  and  with the  participation  of the
Company's  management,  including the Chief  Executive  Officer and
Chief  Financial  Officer,  the Company has conducted an evaluation
of  the   effectiveness   of  the  design  and   operation  of  its
disclosure  controls  and  procedures  (as such term is  defined in
Rules  13a-14(c) and 15d-14(c)  under the  Securities  Exchange Act
of 1934,  as amended (the  "Exchange  Act")) as of a date within 90
days  of  the  filing  of  this  annual  report  (the   "Evaluation
Date").  There are inherent  limitations  to the  effectiveness  of
any system of  disclosure  controls and  procedures,  including the
possibility of human error and the  circumvention  or overriding of
the   controls  and   procedures.   Accordingly,   even   effective
disclosure  controls and  procedures  can only  provide  reasonable
assurance  of achieving  their  control  objectives.  Based on such
evaluation,   the  Chief  Executive  Officer  and  Chief  Financial
Officer  have  concluded  that,  as of  the  Evaluation  Date,  the
Company's  disclosure  controls  and  procedures  are  effective in
alerting  them on a timely basis to material  information  relating
to the Company (including its consolidated  subsidiaries)  required
to be included in the Company's  reports  filed or submitted  under
the  Exchange  Act.  There  were  no  significant  changes  in  the
Company's   internal  controls  or  in  other  factors  that  could
significantly  affect such controls  subsequent  to the  Evaluation
Date,  including any corrective  actions with regard to significant
deficiencies and material weaknesses.

                                       12
================================================================================
<PAGE>13

                              PART IV
                              -------


 ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
--------

 (a)    List of documents filed as part of this Annual Report:

        1.  The  following  consolidated  financial  statements  of the
            Company are filed as part of this Annual Report:

            Independent Auditors' Report;  Consolidated Statements of
            Income  for the  fiscal  years  ended  February  1, 2003,
            February  2,  2002 and  February  3,  2001;  Consolidated
            Balance  Sheets as of  February  1, 2003 and  February 2,
            2002;  Consolidated  Statements of  Stockholder's  Equity
            for the fiscal years ended February 1, 2003,  February 2,
            2002 and  February 3, 2001;  Consolidated  Statements  of
            Cash Flows for the fiscal  years ended  February 1, 2003,
            February  2,  2002  and   February  3,  2001;   Notes  to
            Consolidated Financial Statements.

        2.  Schedules  other than the above have been  omitted  because
            they are either not applicable or the required  information
            has   been   disclosed   in  the   consolidated   financial
            statements or notes thereto.

        3.  The  exhibits  filed as a part of this  Annual  Report  are
            listed in the exhibit index below.


 (b)    Reports on Form 8-K:

            The Company filed the  following  report on Form 8-K during
            the quarter ended February 1, 2003:

                  Date of Report                            Item(s) Reported
                  --------------                            ----------------
                     1/23/03                                Item 5 and Item 7

 (c)    Exhibit Index.


EXHIBIT NUMBER
--------------

 3.1    Certificate  of  Incorporation  of  the  Company,  as  amended.
           Incorporated   by   reference  to  Exhibit  3.3  to  the
           Registration  Statement  of ATSC and Ann Taylor filed on
           May 3, 1989 (Registration No. 33-28522).

 3.2    By-Laws of the  Company.  Incorporated  by reference to Exhibit
           3.4  to the  Registration  Statement  of  ATSC  and  Ann
           Taylor   filed  on  May  3,   1989   (Registration   No.
           33-28522).

 4.1    Indenture,  dated as of June 18,  1999,  between  the  Company,
           ATSC,   and  the   Bank  of  New   York,   as   Trustee.
           Incorporated   by  reference  to  Exhibit  4.01  to  the
           Registration  Statement of ATSC filed on  September  13,
           1999 (Registration No. 333-86955).

 4.2    Rights  Agreement,  dated as of May 18, 2000,  between ATSC and
           Continental    Stock    Transfer   &   Trust    Company.
           Incorporated  by  reference  to Exhibit 4 of Form 8-K of
           ATSC filed on May 23, 2000.

10.1    Lease,  dated as of March 17, 1989, between Carven Associates
           and  Ann  Taylor   concerning   the  West  57th   Street
           headquarters.   Incorporated  by  reference  to  Exhibit
           10.21  to the  Registration  Statement  of ATSC  and Ann
           Taylor   filed  on  May  3,   1989   (Registration   No.
           33-28522).

                                       13
================================================================================
<PAGE>14


EXHIBIT NUMBER
--------------

  10.1.1  First Amendment to Lease, dated as of November 14, 1990,
           between Carven Associates and Ann Taylor.  Incorporated
           by reference to Exhibit 10.17.1 to the Registration
           Statement of ATSC filed on April 11, 1991 (Registration
           No. 33-39905).

  10.1.2  Second  Amendment to Lease,  dated as of February 28, 1993,
           between Carven  Associates and Ann Taylor.  Incorporated
           by reference to Exhibit  10.17.2 to the Annual Report on
           Form 10-K of ATSC filed on April 29, 1993.

  10.1.3  Extension  and Amendment to Lease dated as of October 1,
           1993,   between   Carven   Associates  and  Ann  Taylor.
           Incorporated  by reference to Exhibit  10.11 to the Form
           10-Q of the Company for the  Quarter  ended  October 30,
           1993 filed on November 26, 1993.

  10.1.4  Modification of Amendment and Extension to Lease,  dated
           as of April 14, 1994 between  Carven  Associates and Ann
           Taylor.  Incorporated  by reference  to Exhibit  10.15.4
           to the  Annual  Report  on Form  10-K of ATSC  filed  on
           April 28, 1995.

  10.1.5  Fifth  Amendment  to Lease,  dated as of March 14, 1995,
           between Carven  Associates and Ann Taylor.  Incorporated
           by reference to Exhibit  10.15.5 to the Annual Report on
           Form 10-K of ATSC filed on April 28, 1995.

  10.1.6  Sixth  Amendment to Lease,  dated as of January 5, 1996,
           between   Pacific   Metropolitan   Corporation  and  Ann
           Taylor.  Incorporated  by reference to Exhibit 10.8.6 to
           the  Annual  Report on Form 10-K of ATSC  filed on April
           30, 1998.

  10.1.7  Seventh  Amendment  to Lease,  dated as of June 5, 1996,
           between   Pacific   Metropolitan   Corporation  and  Ann
           Taylor.  Incorporated  by reference to Exhibit 10.8.7 to
           the  Annual  Report on Form 10-K of ATSC  filed on April
           30, 1998.

  10.1.8  Eighth  Amendment  to Lease,  undated,  between  Pacific
           Metropolitan  Corporation  and Ann Taylor.  Incorporated
           by reference to Exhibit  10.8.8 to the Annual  Report on
           Form 10-K of ATSC filed on April 30, 1998.

  10.1.9  Ninth  Amendment  to  Lease,  dated as of May 13,  1997,
           between   Pacific   Metropolitan   Corporation  and  Ann
           Taylor.  Incorporated  by reference to Exhibit 10.8.9 to
           the  Annual  Report on Form 10-K of ATSC  filed on April
           30, 1998.

  10.1.10 Tenth  Amendment  to  Lease,  dated as of May 21,  1997,
           between   Pacific   Metropolitan   Corporation  and  Ann
           Taylor.  Incorporated  by reference  to Exhibit  10.8.10
           to the  Annual  Report  on Form  10-K of ATSC  filed  on
           April 30, 1998.

  10.1.11 Eleventh  Amendment to Lease,  dated as of May 15, 1998,
           between   Pacific   Metropolitan   Corporation  and  Ann
           Taylor.  Incorporated  by reference  to Exhibit  10.3.11
           to the  Annual  Report  on Form  10-K of ATSC  filed  on
           March 29, 1999.

  10.1.12 Sublease  Agreement,  dated  as of  February  23,  1999,
           between Societe Air France  (formerly known as Compagnie
           Nationale Air France) and the Company.  Incorporated  by
           reference  to Exhibit  10.2.12  to the Annual  Report on
           Form 10-K of ATSC filed on April 18, 2000.

  10.2    Tax Sharing  Agreement,  dated as of July 13, 1989, between
           ATSC  and  Ann  Taylor.  Incorporated  by  reference  to
           Exhibit  10.24 to  Amendment  No. 2 to the  Registration
           Statement  of ATSC and Ann Taylor filed on July 13, 1989
           (Registration No. 33-28522).


                                       14
================================================================================
<PAGE>15


 EXHIBIT NUMBER
 --------------

 +10.3    The  AnnTaylor  Stores  Corporation  1992 Stock  Option and
           Restricted  Stock  and  Unit  Award  Plan,  Amended  and
           Restated  as of  February  23,  1994 (the "1992  Plan").
           Incorporated  by  reference  to  Exhibit  10.15  to  the
           Annual  Report  on Form  10-K of  ATSC  filed  on May 1,
           1997.

 +10.3.1  Amendment  to  the  AnnTaylor  Stores  Corporation  1992
           Plan,  as approved  by  stockholders  on June 18,  1997.
           Incorporated  by  reference  to  Exhibit  10.15.1 to the
           Form 10-Q of ATSC for the Quarter  ended  August 2, 1997
           filed on September 12, 1997.

 +10.3.2  Amendment to the AnnTaylor Stores  Corporation 1992 Plan
           dated  as  of  January   16,   1998.   Incorporated   by
           reference  to  Exhibit  10 of Form 8-K of ATSC  filed on
           March 12, 1998.

 +10.3.3  Amendment to the AnnTaylor Stores  Corporation 1992 Plan
           dated as of May 12, 1998.  Incorporated  by reference to
           Exhibit  10.16.3  to the  Form  10-Q  of  ATSC  for  the
           Quarter ended April 2, 1998 filed on June 16, 1998.

 +10.3.4  Amendment to the AnnTaylor Stores  Corporation 1992 Plan
           dated as of March 10,  2000.  Incorporated  by reference
           to Exhibit  10.8.4 to the Annual  Report on Form 10-K of
           ATSC filed on April 18, 2000.

 +10.4    The  AnnTaylor  Stores  Corporation  2000 Stock  Option and
           Restricted   Stock   Award  Plan  (the   "2000   Plan").
           Incorporated  by reference to Exhibit 10.4 to the Annual
           Report on Form 10-K of ATSC filed on April 1, 2003.

 +10.4.1  First  Amendment  to the 2000  Plan,  adopted  January  29,
           2002.  Incorporated  by reference to Exhibit  10.18.1 to
           the  Annual  Report on Form 10-K of ATSC  filed on April
           4, 2002.

 +10.5    AnnTaylor   Stores   Corporation   2002  Stock  Option  and
           Restricted  Stock and Unit Award Plan.  Incorporated  by
           reference to Exhibit  10.9 to the Annual  Report on Form
           10-K of ATSC filed on April 4, 2002.

 +10.6    AnnTaylor   Stores   Corporation   Amended   and   Restated
           Management  Performance  Compensation  Plan, as approved
           by  stockholders  on  June  18,  1997.  Incorporated  by
           reference to Exhibit  10.16 to the Form 10-Q of ATSC for
           the Quarter  ended August 2, 1997 filed on September 12,
           1997.

 +10.6.1  Amendment to the AnnTaylor  Stores  Corporation  Amended
           and Restated  Management  Performance  Compensation Plan
           dated as of March 12,  1998.  Incorporated  by reference
           to Exhibit  10.17.1 to the Annual Report on Form 10-K of
           ATSC filed on April 30, 1998.

 +10.6.2  Amendment to the AnnTaylor  Stores  Corporation  Amended
           and Restated Management  Performance  Compensation Plan,
           dated as of March 10,  2000.  Incorporated  by reference
           to Exhibit  10.9.2 to the Annual  Report on Form 10-K of
           ATSC filed on April 18, 2000.

 +10.7    AnnTaylor Stores  Corporation  Deferred  Compensation  Plan
           ("Deferred   Compensation   Plan").    Incorporated   by
           reference to Exhibit  10.33 to the Annual Report on Form
           10-K of ATSC filed on April 28, 1995.

 +10.7.1  Amendment to the Deferred  Compensation Plan as approved
           by  the  Board  of   Directors   on  August  11,   1995.
           Incorporated  by  reference  to  Exhibit  10.33.1 to the
           Form 10-Q of ATSC for the  Quarter  ended July 29,  1995
           filed on September 11, 1995.

 +10.7.2  Amendment to the Deferred  Compensation Plan,  effective as
           of  January  1,  2002.   Incorporated  by  reference  to
           Exhibit  10.11.2  to the  Annual  Report on Form 10-K of
           ATSC filed on April 4, 2002.

                                       15

================================================================================
<PAGE>16


EXHIBIT NUMBER
--------------

  10.8    Amended   and   Restated    Credit    Agreement    ("Credit
           Agreement"),   dated  as  of  April  30,   2001,   among
           AnnTaylor,  Inc., as Borrower, Bank of America, N.A., as
           Administrative  Agent,  The CIT  Group/Business  Credit,
           Inc.,  Firstar Bank,  N.A.,  and  Transamerica  Business
           Capital Corporation,  as Co-Agents,  The Chase Manhattan
           Bank and  First  Union  National  Bank,  as  Syndication
           Agents,  Fleet  National Bank, as  Documentation  Agent,
           and Bank of America,  N.A.,  The Chase  Manhattan  Bank,
           and First Union  National Bank, as Issuing Banks and the
           Lenders  from time to time party  thereto.  Incorporated
           by reference  to Exhibit  10.18 to the Form 10-Q of ATSC
           for the  Quarter  ended  May 5,  2001  filed on June 18,
           2001.

  10.8.1  Amendment No. 1 to Credit  Agreement,  dated as of December
           20, 2001, by and among  AnnTaylor,  Inc., the Guarantors
           and Bank of America,  N.A., as Administrative  Agent for
           each of the Lenders  pursuant  to the Credit  Agreement.
           Incorporated  by  reference  to Exhibit 10.1 on Form 8-K
           of the Company filed on January 10, 2002.

  10.8.2  Amendment  No.  2 to  the  Credit  Agreement,  dated  as of
           August  29,  2002,  by and among  AnnTaylor,  Inc.,  the
           Guarantors and Bank of America,  N.A., as Administrative
           Agent for each of the  Lenders  pursuant  to the  Credit
           Agreement.  Incorporated by reference to Exhibit 10.1 on
           Form 8-K of the Company filed on September 4, 2002.

 +10.9    AnnTaylor  Stores  Corporation   Long-Term  Cash  Incentive
           Compensation  Plan, as approved by  stockholders on June
           17,  1998.  Incorporated  by  reference  to Exhibit A to
           the Proxy  Statement  of ATSC dated May 1, 1998 filed on
           May 6, 1998.

 +10.9.1  Amendment to the AnnTaylor Stores Corporation  Long-Term
           Cash Incentive  Compensation Plan, dated as of March 10,
           2000.  Incorporated  by reference to Exhibit  10.16.1 to
           the  Annual  Report on Form 10-K of ATSC  filed on April
           18, 2000.

 +10.10   AnnTaylor Stores Corporation  Special Severance Plan, dated
           as of March  10,  2000.  Incorporated  by  reference  to
           Exhibit  10.18 to the Annual Report on Form 10-K of ATSC
           filed on April 18, 2000.

  +10.11  Employment  Agreement  dated  as  of  February  1,  1994
           between  ATSC and Sally Frame  Kasaks.  Incorporated  by
           reference  to Exhibit  10.8 to the Form 10-Q of ATSC for
           the  Quarter  ended  October  29, 1994 filed on December
           12, 1994.

  +10.12  Employment  Agreement,   dated  as  of  January  29,  2002,
           between ATSC and J. Patrick  Spainhour.  Incorporated by
           reference to Exhibit  10.5 to the Annual  Report on Form
           10-K of ATSC filed on April 4, 2002.

  +10.13  Employment  Agreement,   dated  as  of  March  7,  2001,
           between  ATSC  and  Barry  Erdos  ("Erdos   Agreement").
           Incorporated  by  reference  to  Exhibit  10.17  to  the
           Annual  Report  on Form  10-K of ATSC  filed on April 5,
           2001.

 +10.13.1 Amendment,  dated  as of  June  1,  2001,  to the  Erdos
           Agreement.   Incorporated   by   reference   to  Exhibit
           10.17.1 to the Form 10-Q of ATSC for the  Quarter  ended
           May 5, 2001 filed on June 18, 2001.

 +10.13.2 Amendment  No. 2, dated as of November 25, 2001,  to the
           Erdos  Agreement.   Incorporated  by  reference  Exhibit
           10.19.2 to the Annual  Report on Form 10-K of ATSC filed
           on April 4, 2002.

 +10.14   Employment  Agreement,  dated as of April 24, 2001, between
           ATSC  and Kim Roy  ("Roy  Agreement").  Incorporated  by
           reference to Exhibit  10.19 to the Form 10-Q of ATSC for
           the Quarter ended May 5, 2001 filed on June 18, 2001.

                                       16
================================================================================
<PAGE>17


EXHIBIT NUMBER
--------------

+10.14.1  Amendment  No. 1, dated as of November 25, 2001,  to the
           Roy  Agreement.  Incorporated  by  reference  to Exhibit
           10.20.1 to the Annual  Report on Form 10-K of ATSC filed
           on April 4, 2002.

+10.15   Employment  Agreement,  dated  as of May 3,  2001,  between
           ATSC and Katherine  Lawther  Krill ("Krill  Agreement").
           Incorporated  by reference to Exhibit  10.20 to the Form
           10-Q of ATSC for the Quarter  ended May 5, 2001 filed on
           June 18, 2001.

+10.15.1  Amendment  No. 1, dated as of November 25, 2001,  to the
           Krill  Agreement.  Incorporated  by reference to Exhibit
           10.21.1 to the Annual  Report on Form 10-K of ATSC filed
           on April 4, 2002.

 14       Business Conduct  Guidelines.  Incorporated by reference to
           Exhibit  14 to the  Annual  Report  on Form 10-K of ATSC
           filed on April 1, 2003.

*23      Consent of Deloitte & Touche LLP.

*99.1    Certification  of  chief  executive   officer  pursuant  to
           Section 906 of the Sarbanes-Oxley Act of 2002.

*99.2    Certification  of  chief  financial   officer  pursuant  to
           Section 906 of the Sarbanes-Oxley Act of 2002.


* Filed electronically herewith.
+ Management contract or compensatory plan or arrangement.

                                       17
================================================================================
<PAGE>18

                            SIGNATURES
                            ----------


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

                                        ANNTAYLOR, INC.


                                        By:  /s/J. Patrick Spainhour
                                             -------------------------
                                                J. Patrick Spainhour
                                                Chairman and Chief
                                                Executive Officer

Date: March 14, 2003
      ----------------

    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.


/s/ J. Patrick Spainhour      Chairman and Chief Executive       March 14, 2003
------------------------         Officer                         --------------
    J. Patrick Spainhour                                               Date



/s/ Barry Erdos               Senior Executive Vice              March 14, 2003
------------------------         President, Chief Operating     --------------
    Barry Erdos                  Officer and Director                  Date



/s/ James M. Smith            Senior Vice President,             March 14, 2003
------------------------         Chief Financial Officer        --------------
    James M. Smith               Treasurer and Director                Date



/s/ Barbara K. Eisenberg      Senior Vice President,             March 14, 2003
------------------------         General Counsel, Secretary    --------------
    Barbara K. Eisenberg         and Director                          Date



/s/ Sallie A. DeMarsilis      Vice President and Controller      March 14, 2003
------------------------                                         --------------
    Sallie A. DeMarsilis                                               Date

                                       18
================================================================================
<PAGE>19


                           CERTIFICATION
                           -------------



I, J. Patrick Spainhour, certify that:

1. I have reviewed this annual report on Form 10-K of AnnTaylor,
   Inc.;

2. Based on my knowledge, this annual report does not contain any
   untrue statement of a material fact or omit to state a material
   fact necessary to make the statements made, in light of the
   circumstances under which such statements were made, not
   misleading with respect to the period covered by this annual
   report;

3. Based on my knowledge, the financial statements, and other
   financial information included in this annual report, fairly
   present in all material respects the financial condition, results
   of operations and cash flows of the registrant as of, and for, the
   periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible
   for establishing and maintaining disclosure controls and
   procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
   for the registrant and have:

   a) designed such disclosure  controls and procedures to ensure that
      material  information  relating to the registrant,  including
      its consolidated subsidiaries,  is made known to us by others
      within  those  entities,  particularly  during  the period in
      which this annual report is being prepared;

   b) evaluated the effectiveness of the registrant's
      disclosure controls and procedures as of a date within 90
      days prior to the filing date of this annual report (the
      "Evaluation Date"); and

   c) presented in this annual report our conclusions about
      the effectiveness of the disclosure controls and procedures
      based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
   based on our most recent evaluation, to the registrant's auditors
   and the audit committee of registrant's board of directors (or
   persons performing the equivalent functions):

   a) all  significant  deficiencies  in the  design or  operation  of
      internal   controls   which   could   adversely   affect  the
      registrant's  ability  to  record,  process,   summarize  and
      report   financial   data   and  have   identified   for  the
      registrant's  auditors  any material  weaknesses  in internal
      controls; and

   b) any fraud, whether or not material,  that involves management or
      other   employees  who  have  a   significant   role  in  the
      registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated
   in this annual report whether there were significant changes in
   internal controls or in other factors that could significantly
   affect internal controls subsequent to the date of our most recent
   evaluation, including any corrective actions with regard to
   significant deficiencies and material weaknesses.



Date:     March 14, 2003               /s/J. Patrick Spainhour
       ---------------------           -------------------------
                                          J. Patrick Spainhour
                                          Chairman and Chief Executive
                                          Officer

                                       19
================================================================================
<PAGE>20

                           CERTIFICATION
                           -------------



I, James M. Smith, certify that:

1. I have reviewed this annual report on Form 10-K of AnnTaylor,
   Inc.;

2. Based on my knowledge, this annual report does not contain any
   untrue statement of a material fact or omit to state a material
   fact necessary to make the statements made, in light of the
   circumstances under which such statements were made, not
   misleading with respect to the period covered by this annual
   report;

3. Based on my knowledge, the financial statements, and other
   financial information included in this annual report, fairly
   present in all material respects the financial condition, results
   of operations and cash flows of the registrant as of, and for, the
   periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible
   for establishing and maintaining disclosure controls and
   procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
   for the registrant and have:

   a) designed such disclosure  controls and procedures to ensure that
      material  information  relating to the registrant,  including
      its consolidated subsidiaries,  is made known to us by others
      within  those  entities,  particularly  during  the period in
      which this annual report is being prepared;

   b) evaluated the effectiveness of the registrant's
      disclosure controls and procedures as of a date within 90
      days prior to the filing date of this annual report (the
      "Evaluation Date"); and

   c) presented in this annual report our conclusions about
      the effectiveness of the disclosure controls and procedures
      based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
   based on our most recent evaluation, to the registrant's auditors
   and the audit committee of registrant's board of directors (or
   persons performing the equivalent functions):

   a) all  significant  deficiencies  in the  design or  operation  of
      internal   controls   which   could   adversely   affect  the
      registrant's  ability  to  record,  process,   summarize  and
      report   financial   data   and  have   identified   for  the
      registrant's  auditors  any material  weaknesses  in internal
      controls; and

   b) any fraud, whether or not material,  that involves management or
      other   employees  who  have  a   significant   role  in  the
      registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated
   in this annual report whether there were significant changes in
   internal controls or in other factors that could significantly
   affect internal controls subsequent to the date of our most recent
   evaluation, including any corrective actions with regard to
   significant deficiencies and material weaknesses.




Date:  March 14, 2003                  /s/ James M. Smith
      ----------------                 --------------------
                                           James M. Smith
                                           Senior Vice President,
                                           Chief Financial Officer and
                                           Treasurer


                                       20
================================================================================
<PAGE>21

                          ANNTAYLOR, INC.
                          ---------------
            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
            ------------------------------------------




                                                                    PAGE NO.
                                                                    --------

Independent Auditors' Report........................................    22

Consolidated Financial Statements:

     Consolidated Statements of Income for the fiscal years ended
       February 1, 2003, February 2, 2002 and February 3, 2001......    23

     Consolidated Balance Sheets as of February 1, 2003 and
       February 2, 2002.............................................    24

     Consolidated Statements of Stockholder's Equity for the
       fiscal years ended February 1, 2003, February 2, 2002
       and February 3, 2001.........................................    25

     Consolidated Statements of Cash Flows for the fiscal years
       ended February 1, 2003, February 2, 2002 and
       February 3, 2001.............................................    26

     Notes to Consolidated Financial Statements.....................    27

                                       21

================================================================================
<PAGE>22


                   INDEPENDENT AUDITORS' REPORT
                   ----------------------------



To the Stockholder of
   ANNTAYLOR, INC.:

      We  have  audited  the  accompanying  consolidated  financial
statements of AnnTaylor,  Inc. and its subsidiaries,  listed in the
accompanying   index.   These   financial    statements   are   the
responsibility  of the  Company's  management.  Our  responsibility
is to express an opinion  on these  financial  statements  based on
our audits.

      We  conducted   our  audits  in   accordance   with  auditing
standards  generally  accepted  in the  United  States of  America.
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,  such  consolidated   financial  statements
present fairly, in all material  respects,  the financial  position
of the  Company  and its  subsidiaries  at  February  1,  2003  and
February  2, 2002 and the  results  of their  operations  and their
cash flows for each of the three  fiscal  years in the period ended
February  1,  2003  in  conformity   with   accounting   principles
generally accepted in the United States of America.

      As  discussed  in  Note  1  to  the  consolidated   financial
statements,  the  Company  changed  its  method of  accounting  for
goodwill  to  conform  to   Statement   of   Financial   Accounting
Standards No. 142.


/s/  DELOITTE & TOUCHE LLP


Deloitte & Touche LLP
New York, New York
February 28, 2003


                                       22

================================================================================
<PAGE>23



                           ANNTAYLOR, INC.
                           ---------------
                  CONSOLIDATED STATEMENTS OF INCOME
                  ---------------------------------
  FOR THE FISCAL YEARS ENDED FEBRUARY 1, 2003, FEBRUARY 2, 2002 AND
                           FEBRUARY 3, 2001






                                       FISCAL YEARS ENDED
                              -------------------------------------
                              FEBRUARY 1,  FEBRUARY 2,  FEBRUARY 3,
                                 2003          2002         2001
                                -------      -------      -------
                             (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


Net sales ................   $1,380,966   $1,299,573   $1,232,776
Cost of sales ............      633,473      651,808      622,036
                                -------      -------      -------
Gross margin .............      747,493      647,765      610,740
Selling, general and
  administrative expenses       612,479      576,584      501,460
Amortization of goodwill .         --         11,040       11,040
                                -------      -------      -------
Operating income .........      135,014       60,141       98,240
Interest income ..........        3,279        1,390        2,473
Interest expense .........        6,886        6,869        7,315
                                -------      -------      -------
Income before income taxes      131,407       54,662       93,398
Income tax provision .....       51,249       25,557       41,035
                                -------      -------      -------
    Net income ...........   $   80,158   $   29,105   $   52,363
                                =======      =======      =======









    See accompanying notes to consolidated financial statements.

                                       23
================================================================================
<PAGE>24

                          ANNTAYLOR, INC.
                          ---------------
                    CONSOLIDATED BALANCE SHEETS
                    ---------------------------
               FEBRUARY 1, 2003 AND FEBRUARY 2, 2002





                                                    FEBRUARY 1,   FEBRUARY 2,
                                                        2003         2002
                                                   ----------   ----------
                       ASSETS                        (IN THOUSANDS, EXCEPT
                                                       PER SHARE AMOUNTS)
Current assets
  Cash and cash equivalents ....................   $  212,821   $   30,037
  Accounts receivable, net .....................       10,367       65,598
  Merchandise inventories ......................      185,484      180,117
  Prepaid expenses and other current assets ....       46,599       50,314
                                                   ----------   ----------
      Total current assets .....................      455,271      326,066
Property and equipment, net ....................      247,115      250,735
Goodwill, net ..................................      286,579      286,579
Deferred financing costs, net ..................        4,170        5,044
Other assets ...................................       17,691       14,742
                                                   ----------   ----------
      Total assets .............................   $1,010,826   $  883,166
                                                   ==========   ==========

        LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
  Accounts payable .............................   $   57,058   $   52,011
  Accrued salaries and bonus ...................       27,567       12,121
  Accrued tenancy ..............................       10,808       10,151
  Gift certificates and merchandise
      credits redeemable .......................       25,637       21,828
  Accrued expenses .............................       30,125       37,907
  Current portion of long-term debt ............         --          1,250
                                                   ----------   ----------
      Total current liabilities ................      151,195      135,268
Long-term debt, net ............................      121,652      118,280
Deferred lease costs and other liabilities .....       23,561       17,489

Stockholder's equity
  Common stock, $1.00 par value;
      1,000 shares authorized
      1 share issued and outstanding ...........            1            1
  Additional paid-in capital ...................      417,568      392,683
  Retained earnings ............................      296,849      219,445
                                                   ----------   ----------
      Total stockholder's equity ...............      714,418      612,129
                                                   ----------   ----------
      Total liabilities and stockholder's equity   $1,010,826   $  883,166
                                                   ==========   ==========



      See accompanying notes to consolidated financial statements.

                                       24
================================================================================
<PAGE>25


                          ANNTAYLOR, INC.
                          ---------------
          CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
          -----------------------------------------------
 FOR THE FISCAL YEARS ENDED FEBRUARY 1, 2003, FEBRUARY 2, 2002 AND
                          FEBRUARY 3, 2001
                           (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                    ADDITIONAL               TOTAL
                                           COMMON    PAID-IN    RETAINED   STOCKHOLDER'S
                                            STOCK    CAPITAL    EARNINGS     EQUITY
                                            ----   ---------   ---------    ---------
                                                         (IN THOUSANDS)
<S>                                         <C>    <C>         <C>          <C>
Balance at January 29, 2000 .............   $  1   $ 377,155   $ 138,466    $ 515,622
   Net income ...........................     --          --      52,363       52,363
   Parent company contributions .........     --       6,044         ---        6,044
                                            ----   ---------   ---------    ---------
Balance at February 3, 2001 .............      1     383,199     190,829      574,029
   Net income ...........................     --          --      29,105       29,105
   Parent company contributions (charges)     --       9,484        (489)       8,995
                                            ----   ---------   ---------    ---------
Balance at February 2, 2002 .............      1     392,683     219,445      612,129
   Net income ...........................     --          --      80,158       80,158
   Parent company contributions (charges)     --      24,885      (2,754)      22,131
                                            ----   ---------   ---------    ---------
Balance at February 1, 2003 .............   $  1   $ 417,568   $ 296,849    $ 714,418
                                            ====   =========   =========    =========
</TABLE>



      See accompanying notes to consolidated financial statements.


                                       25
================================================================================
<PAGE>26

                          ANNTAYLOR, INC.
                          ---------------
               CONSOLIDATED STATEMENTS OF CASH FLOWS
               -------------------------------------
 FOR THE FISCAL YEARS ENDED FEBRUARY 1, 2003, FEBRUARY 2, 2002 AND
                          FEBRUARY 3, 2001


                                                   FISCAL YEARS ENDED
                                          -------------------------------------
                                          FEBRUARY 1,   FEBRUARY 2,  FEBRUARY 3,
                                             2003           2002       2001
                                            -------       ------        ------
                                                      (IN THOUSANDS)

Operating activities:
   Net income ..........................  $  80,158    $  29,105     $  52,363
   Adjustments to reconcile net
     income to net cash provided
     by operating activities
       Amortization of deferred
           compensation.................      5,931        1,841         1,133
       Amortization of goodwill ........       --         11,040        11,040
       Deferred income taxes ...........     12,008       (5,115)       (3,864)
       Depreciation and amortization ...     47,687       43,529        35,033
       Gain on sale of proprietary
           credit card .................     (2,095)        --            --
       Loss on disposal and write-down
           of property
           and equipment ...............      1,384        9,483         1,884
       Non-cash interest ...............      4,261        4,140         4,247
       Provision for loss on accounts
           receivable ..................       --          1,443         1,154
       Changes in assets and liabilities:
         Accounts receivable ...........       (475)      (8,750)         (457)
         Merchandise inventories .......     (5,367)      (9,486)      (30,605)
         Prepaid expenses and other
            current assets .............       (898)       6,948       (12,106)
         Other non-current assets and
            liabilities, net ...........     (4,272)      (2,303)       (3,918)
         Accounts payable and accrued
            expenses ...................     17,177       (4,277)       20,721
                                            -------       ------        ------
   Net cash provided by
         operating activities ..........    155,499       77,598        76,625
                                            -------       ------        ------
Investing activities:
   Proceeds from sale of proprietary
         credit card ...................     57,800          ---           ---
   Purchases of property and equipment .    (45,450)     (83,693)      (83,310)
                                            -------       ------        ------
   Net cash provided (used) by
         investing activities ..........     12,350      (83,693)      (83,310)
                                            -------       ------        ------
Financing activities:
   Parent company activity .............     16,200        7,154         4,911
   Payment of financing costs ..........        (15)      (1,583)          (45)
   Payments on mortgage ................     (1,250)      (1,401)       (1,300)
                                            -------       ------        ------
   Net cash provided by financing
         activities ....................     14,935        4,170         3,566
                                            -------       ------        ------
Net increase (decrease) in cash ........    182,784       (1,925)       (3,119)
Cash, beginning of year ................     30,037       31,962        35,081
                                            -------       ------        ------
Cash, end of year ......................  $ 212,821    $  30,037     $  31,962
                                            =======       ======        ======

Supplemental disclosures
   of cash flow information:
   Cash paid during the year
         for interest ..................  $   1,307    $   2,504     $   2,418
                                            =======       ======        ======
   Cash paid during the year
         for income taxes ..............  $  40,088    $  19,170     $  43,393
                                            =======       ======        ======


    See accompanying notes to consolidated financial statements.

                                       26
================================================================================
<PAGE>27

                          ANNTAYLOR, INC.
                          ---------------
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            ------------------------------------------



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      AnnTaylor,  Inc. (the "Company" or "Ann Taylor") is a leading
national  specialty  retailer of better  quality  women's  apparel,
shoes and  accessories  sold  principally  under the Ann Taylor and
Ann Taylor  Loft brand  names.  Its  principal  market  consists of
the  United  States.   The  Company  sells  its  products   through
traditional  retail  stores  and  over  the  Internet  through  its
Online Store.

      All  of  the  outstanding   capital  stock  of  the  Company,
consisting  of one share of  common  stock,  is owned by  AnnTaylor
Stores Corporation ("ATSC").


BASIS OF PRESENTATION

      The consolidated  financial  statements  include the accounts
of the  Company and its  subsidiaries.  All  intercompany  accounts
have been eliminated in consolidation.


FISCAL YEAR

      The Company  follows the  standard  fiscal year of the retail
industry,  which is a 52-or  53-week  period ending on the Saturday
closest to January 31 of the following  calendar  year.  All fiscal
years  presented  include 52 weeks,  except  the fiscal  year ended
February 3, 2001, which included 53 weeks.


USE OF ESTIMATES

      The  preparation of financial  statements in conformity  with
accounting  principles  generally  accepted in the United States of
America  requires  Management  to make  estimates  and  assumptions
that  affect  the  reported  amount of assets and  liabilities  and
disclosures  of contingent  assets and  liabilities  at the date of
the financial  statements  and the reported  amounts of revenue and
expenses  during  the  reporting   period.   Actual  results  could
differ from these estimates.


REVENUE RECOGNITION

      The  Company  records  revenue  as  merchandise  is  sold  to
clients.  The  Company's  policy with respect to gift  certificates
is  to  record  revenue  as  the   certificates  are  redeemed  for
merchandise.  Prior  to  their  redemption,  the  certificates  are
recorded  as  a   liability.   Amounts   related  to  shipping  and
handling  billed to clients in a sales  transaction  are classified
as revenue  and the costs  related to  shipping  product to clients
(billed  and  unbilled)  are  classified  as  cost of  goods  sold.
Reserves  for  estimated  discounts,  returns  and  allowances  are
provided when sales are recorded.


CASH AND CASH EQUIVALENTS

      Cash and short-term  highly liquid  investments with original
maturity  dates of three  months  or less  are  considered  cash or
cash equivalents.


MERCHANDISE INVENTORIES

      Merchandise  inventories  are  valued at the lower of average
cost or market, at the individual item level.


                                       27
================================================================================
<PAGE>28

                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

COST OF SALES

      Cost of sales is  comprised  of  direct  inventory  costs for
merchandise  sold,  including  all costs to  transport  merchandise
from third party suppliers to the Company's distribution center.


STORE PRE-OPENING COSTS

      Non-capital  expenditures,  such as  advertising  and payroll
costs  incurred  prior to the opening of a new store are charged to
expense in the period they are incurred.


PROPERTY AND EQUIPMENT

      Property and  equipment  are  recorded at cost.  Depreciation
and  amortization  are computed on a  straight-line  basis over the
following estimated useful lives:

       Building...........................40 years
       Leasehold improvements.............3-10 years or term of
       lease, if shorter
       Furniture, fixtures and equipment..2-10 years
       Software...........................5 years


DEFERRED RENT OBLIGATIONS

      Rent  expense  under  non-cancelable  operating  leases  with
scheduled rent  increases and landlord  incentives is accounted for
on a  straight-line  basis  over the  lease  term.  The  excess  of
straight-line  rent  expense  over  scheduled  payment  amounts and
landlord incentives is recorded as a deferred liability.


DEFERRED FINANCING COSTS

      Deferred  financing  costs  are  being  amortized  using  the
interest  method  over the term of the  related  debt.  Accumulated
amortization   at  February  1,  2003  and  February  2,  2002  was
$4,458,000 and $3,569,000, respectively.


FINANCE SERVICE CHARGE INCOME

      Income  from  finance  service  charges  relating to customer
receivables,   which  is  deducted   from   selling,   general  and
administrative  expenses,  amounted to  $1,820,000,  $9,354,000 and
$8,614,000   in  Fiscal  2002,   Fiscal  2001,   and  Fiscal  2000,
respectively.

      On February 4, 2002, the Company sold its proprietary  credit
card  portfolio  to World  Financial  Network  National  Bank.  The
associated  gain of $2,095,000 is reported in selling,  general and
administrative   expenses  in  the   Consolidated   Statements   of
Income.  In connection  with the sale, the Company  contracted with
Alliance  Data  Systems  ("ADS") to provide  private  label  credit
card services to  proprietary  Ann Taylor credit card clients.  ADS
pays the Company a percentage of all collected finance charges.

                                       28
================================================================================
<PAGE>29

                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

GOODWILL AND OTHER LONG-LIVED ASSETS

     ATSC acquired Ann Taylor in a leveraged buyout in 1989. As a
result of that transaction,  $380,250,000,  representing the excess
of the allocated  purchase price  over the fair value of the Ann
Taylor's  net  assets,  was  recorded  as goodwill and has been
amortized  on a  straight-line  basis  through the end of Fiscal 2001
using an assumed 40 year  life.  In  addition,  as a result of the
September 1996 acquisition of the operations that became the
Company's  sourcing division,  $38,430,000  of goodwill  was  recorded
and has been  amortized on a straight-line  basis  through  the end
of Fiscal  2001  using an assumed 25 year life. The Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 142,  "Goodwill
and Other  Intangible  Assets" on February 3, 2002. SFAS No.142 requires
that ratable  amortization  of goodwill be replaced  with periodic
tests of the goodwill's  impairment.  The Company performed impairment
testing which  considered  the Company's net  discounted  future cash
flows to determine whether an  impairment  charge  related to the
carrying  value of the  Company's recorded goodwill was necessary,
and concluded that there was no such impairment loss at February 1, 2003.
This will be reevaluated  annually, or more frequently if necessary,
using similar testing. In the case of long-lived tangible assets,
if the undiscounted  future cash flows related to the long-lived
assets are less than  the  assets'  carrying  value,  a  similar
impairment  charge  would  be considered.  Management's  estimate of
future cash flows is based on  historical experience, knowledge,
and market data.

   Net  Income,   adjusted  to  exclude  the  after-tax  effect  of
goodwill amortization,  was $39,750,000 and $63,005,000, for Fiscal
2001 and Fiscal 2000, respectively.

ADVERTISING

      Costs associated with the production of advertising,  such as
printing  and  other  costs,   are  expensed  as  incurred.   Costs
associated with  communicating  advertising that has been produced,
such as magazine  ads,  are  expensed  when the  advertising  first
takes  place.  Costs of direct  mail  catalogs  and  postcards  are
expensed   when  the   advertising   arrives  in  clients'   homes.
Advertising  costs were  $30,600,000,  $34,000,000  and $32,000,000
in Fiscal 2002, 2001 and 2000, respectively.


 INCOME TAXES

      The Company  accounts  for income  taxes in  accordance  with
SFAS No. 109,  "Accounting  for Income  Taxes",  which requires the
use of the liability  method.  Deferred tax assets and  liabilities
are  recognized  based on the  differences  between  the  financial
statement  carrying value of existing  assets and  liabilities  and
their  respective  tax  bases.  No  valuation  allowance  has  been
provided  for  deferred tax assets,  since  management  anticipates
that the  full  amount  of these  assets  will be  realized  in the
future.  Under  the  asset  and  liability  method,   deferred  tax
assets and  liabilities  are  recognized,  and income or expense is
recorded,  for the estimated future tax  consequences  attributable
to differences  between the financial  statement  carrying  amounts
of  existing  assets  and  liabilities  and  their  respective  tax
bases.   The  Company  and  its   domestic   subsidiaries   file  a
consolidated   Federal  income  tax  return,  while  the  Company's
foreign subsidiaries file in their respective local jurisdictions.

                                       29
================================================================================
<PAGE>30


                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 INCOME TAXES (CONTINUED)

      Pursuant  to a Tax  Sharing  Agreement,  ATSC and the Company
have  agreed to elect to file  consolidated  income tax returns for
federal  income tax  purposes and may elect to file such returns in
states  and  other  relevant  jurisdictions  that  permit  such  an
election,   for  income  tax   purposes.   With   respect  to  such
consolidated   income  tax  returns,   the  Tax  Sharing  Agreement
generally  requires  the  Company  to pay to ATSC  the  entire  tax
shown to be due on such  consolidated  returns,  provided  that the
amount  paid by the  Company  shall not  exceed the amount of taxes
that would have been owed by the Company on a stand-alone basis.


SEGMENTS

      The   Company's   brands  have  been   aggregated   into  one
reportable   segment,   given  the   similarity   of  the  economic
characteristics between the operations represented by its brands.


COMPREHENSIVE INCOME

      SFAS  No.   130,   "Comprehensive   Income",   requires   the
presentation of comprehensive  income,  in addition to the existing
income  statement.  Comprehensive  income is  defined as the change
in equity  during a period  from  transactions  and  other  events,
excluding   changes   resulting  from  investments  by  owners  and
distributions  to  owners.  For all years  presented,  there are no
material items  requiring  separate  disclosure in accordance  with
this statement.


RECLASSIFICATION

      Certain  Fiscal  2001  and  Fiscal  2000  amounts  have  been
reclassified to conform to the Fiscal 2002 presentation.


RECENT ACCOUNTING PRONOUNCEMENTS

      Effective  February 3, 2002 the Company adopted SFAS No. 142,
"Goodwill  and Other  Intangible  Assets".  SFAS No.  142  requires
that  ratable  amortization  of  goodwill  be  replaced by periodic
tests for  impairment  within six  months of the date of  adoption,
and then on a periodic  basis  thereafter.  Based on the impairment
testing  performed in February  2003,  management  determined  that
there was no impairment  loss related to the net carrying  value of
the Company's recorded goodwill.

      In July 2001, the Financial  Accounting  Standards Board (the
"FASB")  issued  SFAS No.  143,  "Accounting  for Asset  Retirement
Obligations",    which   provides   accounting   requirements   for
retirement   obligations   associated   with  tangible   long-lived
assets.  SFAS No.  143 is  effective  for  fiscal  years  beginning
after June 15,  2002.  The  adoption  of SFAS No. 143 has not had a
significant   impact  on  the  Company's   consolidated   financial
statements.

      In August  2001,  the FASB issued  SFAS No. 144,  "Accounting
for  the  Impairment  or  Disposal  of  Long-Lived  Assets".   This
statement  addresses  accounting  and reporting for the  impairment
or disposal of long-lived  assets,  other than goodwill,  including
discontinued  operations.  SFAS No.  144 is  effective  for  fiscal
years   beginning   after   December  15,  2001.   Management   has
determined  that the  adoption of SFAS No. 144 has had no impact on
the Company's consolidated financial statements.

                                       30
================================================================================
<PAGE>31

                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

      In April 2002,  the FASB issued SFAS No. 145,  "Rescission of
FASB  Statements  No. 4, 44, and 64,  Amendment  of FASB  Statement
No.  13,  and  Technical  Corrections".   SFAS  No.  145  primarily
affects the  reporting  requirements  and  classification  of gains
and  losses  from  the   extinguishment   of  debt,   rescinds  the
transitional  accounting  requirements  for  intangible  assets  of
motor  carriers,  and  requires  that certain  lease  modifications
with economic  effects  similar to  sale-leaseback  transactions be
accounted  for in the same manner as  sale-leaseback  transactions.
SFAS No. 145 is effective  for  financial  statements  issued after
April 2002,  with the  exception of the  provisions  affecting  the
accounting  for lease  transactions,  which  should be applied  for
transactions  entered into after May 15, 2002,  and the  provisions
affecting   classification   of   gains   and   losses   from   the
extinguishment  of debt,  which  should be applied in fiscal  years
beginning  after May 15, 2002.  Management has determined  that the
adoption  of SFAS No.  145 will  have no  immediate  impact  on the
Company's consolidated  financial statements,  but will evaluate in
future  periods  the  classification  of  any  debt  extinguishment
costs  in  accordance  with  APB  Opinion  No.  30  "Reporting  the
Results of  Operations  -  Reporting  the  Effects of Disposal of a
Segment   of   a   Business,   and   Extraordinary,   Unusual   and
Infrequently Occurring Events and Transactions".

      In June 2002, the FASB issued SFAS No. 146,  "Accounting  for
Costs  Associated with Exit or Disposal  Activities".  SFAS No. 146
requires  companies  to  recognize  costs  associated  with exit or
disposal  activities  when they are  incurred,  rather  than at the
date of a  commitment  to an exit or  disposal  plan.  Examples  of
costs covered by the standard include lease  termination  costs and
certain  employee  severance  costs  that  are  associated  with  a
restructuring,  discontinued  operation,  plant  closing,  or other
exit  or  disposal  activity.   Previous  accounting  guidance  was
provided  by  Emerging   Issues  Task  Force   ("EITF")  No.  94-3,
"Liability  Recognition for Certain Employee  Termination  Benefits
and  Other  Costs  to Exit an  Activity  (including  Certain  Costs
Incurred  in a  Restructuring)".  SFAS No.  146  replaces  EITF No.
94-3,  and is  required  to be  applied  prospectively  to  exit or
disposal   activities   initiated  after  December  31,  2002.  The
Company  adopted  SFAS No. 146 during the fourth  quarter of Fiscal
2002  with  no  material  impact  on  the  Company's   consolidated
financial statements.

      In  November  2002,  the  FASB  issued  FASB   Interpretation
("FIN")   No.   45,   "Guarantor's    Accounting   and   Disclosure
Requirements  for  Guarantees,  Including  Indirect  Guarantees  of
Indebtedness  of  Others".  FIN No. 45  clarifies  and  expands  on
existing  disclosure  requirements  for  guarantees,  and clarifies
that a guarantor  is required to  recognize,  at the  inception  of
the  guarantee,  a  liability  equal  to  the  fair  value  of  the
obligation  undertaken  in  issuing  the  guarantee.   The  initial
recognition   and   measurement   provisions  of  FIN  No.  45  are
applicable  on  a  prospective   basis  for  guarantees  issued  or
modified after December 31, 2002.  The disclosure  requirements  of
FIN No. 45 are  effective  for  financial  statements  issued after
December  15,  2002.  The  Company  adopted  FIN No. 45 during  the
fourth  quarter  of  Fiscal  2002  with no  material  impact on the
Company's consolidated financial statements.

      In January 2003,  the FASB issued FIN No. 46,  "Consolidation
of Variable  Interest  Entities - an  Interpretation  of Accounting
Research  Bulletin  No.  51".  FIN No. 46  requires  unconsolidated
variable  interest  entities to be  consolidated  by their  primary
beneficiaries  if the  entities  do not  effectively  disperse  the
risks  and  rewards  of  ownership  among  their  owners  and other
parties  involved.  The  provisions  of FIN No.  46 are  applicable
immediately  to  all  variable   interest  entities  created  after
January  31,  2003  and  variable  interest  entities  in  which  a
company   obtains  an  interest   after  that  date.  For  variable
interest  entities  created before January 31, 2003, the provisions
of this  interpretation  are effective July 1, 2003.  Management is
currently  evaluating  the provisions of this  interpretation,  and
does not  believe  that it will  have a  significant  impact on the
Company's consolidated financial statements.


                                       31
================================================================================
<PAGE>32


                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


2.  LONG-TERM DEBT

      The following table summarizes  long-term debt outstanding at
February 1, 2003 and February 2, 2002:

                                    FEBRUARY 1, 2003       FEBRUARY 2, 2002
                                  ---------------------  ---------------------
                                  CARRYING   ESTIMATED   CARRYING   ESTIMATED
                                   AMOUNT    FAIR VALUE    AMOUNT   FAIR VALUE
                                   -------     -------     -------    -------
                                                (IN THOUSANDS)
Mortgage ..................       $    ---    $    ---    $  1,250   $  1,250
Note Payable to ATSC, net .        121,652     121,652     118,280    118,280
                                   -------     -------     -------    -------
       Total debt .........        121,652     121,652     119,530    119,530
Less current portion ......            ---         ---       1,250      1,250
                                   -------     -------     -------    -------
       Total long-term debt       $121,652    $121,652    $118,280   $118,280
                                  ========    ========    ========   ========

      In  accordance  with  the   requirements  of  SFAS  No.  107,
"Disclosures  about  Fair  Value  of  Financial  Instruments",  the
Company  determined  the  estimated  fair  value  of its  financial
instruments  using quoted  market  information,  as  available.  As
judgment  is   involved,   the   estimates   are  not   necessarily
indicative  of the amounts the Company  could  realize in a current
market exchange.

      On April 30,  2001,  the Company  entered into an Amended and
Restated  $175,000,000  senior secured  revolving  Credit  Facility
(the "Credit  Facility")  with Bank of America N.A. and a syndicate
of lenders.  This  Credit  Facility  was  amended on  December  20,
2001 and on August 29,  2002 to adjust  certain  ratio  provisions,
and amend certain  definitions  used in the  calculation  of ratios
required in the Credit  Facility.  The Credit  Facility  matures on
April 29, 2004.

      Maximum  availability  for loans and letters of credit  under
the  Credit  Facility  is  governed  by a monthly  borrowing  base,
determined by the  application  of specified  advance rates against
certain eligible  assets.  Based on this  calculation,  the maximum
amount  available  for loans and letters of credit under the Credit
Facility  at  February  1, 2003 was  $175,000,000.  Commercial  and
standby  letters of credit  outstanding  under the Credit  Facility
as of  February  1,  2003  were  approximately  $97,114,000.  Loans
outstanding  under the Credit  Facility  at any time may not exceed
$75,000,000.  In addition,  the Credit  Facility  requires that the
outstanding  loan  balance be  reduced to zero for a 30-day  period
each calendar  year.  There were no loans  outstanding  at any time
during fiscal 2002.

      Amounts  outstanding  under the Credit Facility bear interest
at a rate equal to, at the  Company's  option,  the Bank of America
Base  Rate,  defined as the  higher of (a) the  Federal  Funds Rate
plus  one-half  of 1% and (b) the  Prime  Rate  for  such  day,  or
Eurodollar  Rate;  plus,  in either  case,  a margin  ranging  from
0.25% to 2.00%.  The  Company is also  required  to pay the lenders
a  quarterly   commitment   fee  on  the  unused   revolving   loan
commitment  amount  at a rate  ranging  from  0.30%  to  0.50%  per
annum.  Fees for  outstanding  commercial  and  standby  letters of
credit  range  from  0.50%  to  0.875%  and from  1.25%  to  2.00%,
respectively.  Premiums  ranging  from 0.125% to 0.50% may apply to
all  interest and  commitment  fees,  depending  on the  calculated
Leverage ratio.

      The Credit Facility  contains  financial and other covenants,
including  limitations  on  indebtedness,  liens  and  investments,
restrictions  on dividends or other  distributions  to stockholders
and maintenance of certain  financial  ratios  including  specified
levels of tangible net worth.

      The lenders  have been  granted a pledge of the common  stock
of ATSC and certain of its  subsidiaries,  and a security  interest
in  substantially   all  other  tangible  and  intangible   assets,
including  accounts  receivable,   trademarks,   inventory,   store
furniture and  fixtures,  of the Company and its  subsidiaries,  as
collateral   for  the  Company's   obligations   under  the  Credit
Facility.

                                       32
================================================================================
<PAGE>33

                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


2.  LONG-TERM DEBT (CONTINUED)

      During Fiscal 1999, the Company issued a promissory  note, as
amended,  to  ATSC,  in  an  aggregate  of  $199,072,000  principal
amount  at  maturity  (the  "Note  Payable  to  ATSC").   The  Note
Payable to ATSC was issued by the  Company for value  received  and
has interest and payment terms  substantially  similar to the terms
of the Convertible  Debentures Due 2019 ("Convertible  Debentures")
that  were  issued  in 1999 by  ATSC.  ATSC  has  pledged  the Note
Payable  to  ATSC  to  the  lenders  under  the  Company's   Credit
Facility  as  collateral  for  ATSC's  guarantee  of the  Company's
performance of its obligations under the Credit Facility.

      During  Fiscal 2002,  the seven year mortgage loan related to
the   Company's   distribution   center   land  and   building   in
Louisville,  Kentucky  was  paid  in  full.  The  Company  and  its
wholly owned subsidiary,  AnnTaylor  Distribution  Services,  Inc.,
were parties to the  $7,000,000 seven-year mortgage loan.


3.  PREFERRED SECURITIES

      In April and May of Fiscal 1996,  ATSC  completed the sale of
an aggregate of $100,625,000 of 8-1/2% Company-Obligated Mandatorily
Redeemable   Convertible   Preferred   Securities  (the  "preferred
securities")  issued by its financing  vehicle,  AnnTaylor  Finance
Trust,  a  Delaware  business  trust  (the  "Trust").  On June  29,
1999,  the  Trust  redeemed  all  of  the   outstanding   preferred
securities.  All but  $100,000  of the  liquidation  amount  of the
preferred   securities   was  tendered  for   conversion   into  an
aggregate  of  7,675,076  shares of ATSC common  stock prior to the
redemption  date,  at a  conversion  price of  $13.10  per share of
ATSC common  stock,  or 3.817  shares of ATSC common  stock per $50
liquidation   amount  of  the   security.   Holders  of   preferred
securities that were not tendered for conversion  received  105.95%
of the  liquidation  amount of the preferred  securities  redeemed,
plus accrued distributions.


4.  ALLOWANCE FOR DOUBTFUL ACCOUNTS

      As a  result  of the  February  2002  sale  of the  Company's
proprietary  credit card  portfolio,  as further  described in Note
1, the  Company  no longer  maintains  an  allowance  for  doubtful
accounts,  since the balance in accounts  receivable at February 1,
2003   represents   credit  card  accounts   receivable   due  from
third-party  processors.  A summary of  activity  in the  allowance
for doubtful  accounts for the fiscal years ended  February 2, 2002
and February 3, 2001 is as follows:

                                                       FISCAL YEARS ENDED
                                                    -------------------------
                                                    FEBRUARY 2,   FEBRUARY 3,
                                                        2002         2001
                                                       ------       ------
                                                          (IN THOUSANDS)
      Balance at beginning of year.............      $   621      $   666
      Provision for loss on accounts receivable        1,443        1,154
      Accounts written off.....................       (1,501)      (1,199)
                                                      ------       ------
      Balance at end of year...................      $   563      $   621
                                                      ======       ======
                                       33
================================================================================
<PAGE>34


                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


5.  COMMITMENTS AND CONTINGENCIES

LEASES

      The Company  occupies  its retail  stores and  administrative
facilities   under   operating   leases,    most   of   which   are
non-cancelable.  Some leases  contain  renewal  options for periods
ranging  from one to ten years under  substantially  the same terms
and  conditions  as the original  leases.  Some leases also contain
early  termination  options,  which can be exercised by the Company
under  specific  conditions.  Most  of  the  store  leases  require
payment of a specified  minimum rent,  plus a contingent rent based
on a  percentage  of the store's net sales in excess of a specified
threshold.  In  addition,  most of the  leases  require  payment of
real  estate  taxes,   insurance   and  certain   common  area  and
maintenance   costs  in  addition  to  the  future   minimum  lease
payments shown below.

      Future minimum lease payments under non-cancelable  operating
leases as of February 1, 2003 are as follows:

      FISCAL YEAR                           (IN THOUSANDS)
      -----------
       2003..................................$   145,759
       2004..................................    144,982
       2005..................................    136,510
       2006..................................    115,689
       2007..................................    106,621
       2008 and thereafter...................    386,832
                                             -----------
       Total.................................$ 1,036,393
                                             ===========

      Rent  expense for the fiscal  years  ended  February 1, 2003,
February 2, 2002 and February 3, 2001 was as follows:

                                               FISCAL YEARS ENDED
                                 ----------------------------------------------
                                 FEBRUARY 1,       FEBRUARY 2,      FEBRUARY 3,
                                     2003             2002              2002
                                   --------         --------         --------
                                                (IN THOUSANDS)

     Minimum rent ..............   $123,322         $107,858         $ 91,482
     Percentage rent............      1,617            2,006            3,534
                                   --------         --------         --------
          Total ................   $124,939         $109,864         $ 95,016
                                   ========         ========         ========


OTHER

      The  Company is party to a 3-year  contract  for  services to
provide training to store  associates,  and maintenance and support
for  related   software.   Payments   under  this  contract   total
$6,500,000 in each of Fiscal 2003 and Fiscal 2004,  and  $5,000,000
in Fiscal 2005.

      The Company has been named as a  defendant  in several  legal
actions  arising  from its  normal  business  activities.  Although
the  amount of any  liability  that  could  arise  with  respect to
these  actions  cannot be accurately  predicted,  in the opinion of
the Company,  any such liability  will not have a material  adverse
effect  on  the  consolidated   financial  position,   consolidated
results of operations, or liquidity of the Company.


                                       34
================================================================================
<PAGE>35

                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


6.  PROPERTY AND EQUIPMENT

      Property and equipment consists of the following:

                                               FISCAL YEARS ENDED
                                       ----------------------------------
                                       FEBRUARY 1, 2003  FEBRUARY 2, 2002
                                       ----------------  ----------------
                                                 (IN THOUSANDS)
Land and building ..................      $ 10,040        $    9,415
Leasehold improvements .............       171,404           161,210
Furniture and fixtures .............       277,917           246,731
Construction in progress ...........        19,134            20,181
                                           -------           -------
                                           478,495           437,537
Less accumulated depreciation
    and amortization ...............       231,380           186,802
                                           -------           -------
    Net property and equipment......      $247,115          $250,735
                                          ========          ========


7.  INCOME TAXES

      The  provision  for income  taxes for the fiscal  years ended
February 1, 2003,  February 2, 2002 and  February 3, 2001  consists
of the following:

                                           FISCAL YEARS ENDED
                                    -----------------------------------
                                    FEBRUARY 1, FEBRUARY 2, FEBRUARY 3,
                                       2003       2002         2001
                                      ------     ------       ------
                                             (IN THOUSANDS)
    Federal:
     Current.......................  $32,959    $27,492     $38,082
     Deferred......................   10,467     (4,359)     (3,047)
                                      ------     ------      ------
       Total federal...............   43,426     23,133      35,035
                                      ------     ------      ------
    State and local:
     Current.......................    5,726      2,589       6,476
     Deferred......................    1,569       (756)       (817)
                                      ------     ------      ------
       Total state and local.......    7,295      1,833       5,659
                                      ------     ------      ------
    Foreign:
     Current.......................      577        591         471
     Deferred......................      (49)       ---        (130)
                                      ------     ------      ------
       Total foreign...............      528        591         341
                                      ------     ------      ------
     Total.........................  $51,249    $25,557     $41,035
                                      ======     ======      ======


      The  reconciliation  between the  provision  for income taxes
and the  provision for income taxes at the federal  statutory  rate
for the fiscal years ended  February 1, 2003,  February 2, 2002 and
February 3, 2001 is as follows:

                                                   FISCAL YEARS ENDED
                                          -------------------------------------
                                          FEBRUARY 1,   FEBRUARY 2,  FEBRUARY 3,
                                             2003           2002         2001
                                          ---------     ---------     ---------
                                            (IN THOUSANDS, EXCEPT PERCENTAGES)

Income before income taxes ............   $ 131,407     $  54,662     $  93,398
Federal statutory rate ................          35%           35%           35%
                                          ---------     ---------     ---------
Provision for income
   taxes at federal statutory rate ....   $  45,993     $  19,132     $  32,689
State and local income taxes,
   net of federal income tax benefit ..       5,364         2,916         4,751
Non-deductible amortization of goodwill         ---         3,500         3,500
Earnings of foreign subsidiaries ......         (89)           29            78
Other .................................         (19)          (20)           17
                                          ---------     ---------     ---------
Provision for income taxes ............   $  51,249     $  25,557     $  41,035
                                          =========     =========     =========

                                       35
================================================================================
<PAGE>36

                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


7.  INCOME TAXES (CONTINUED)

      The  tax  effects  of   significant   items   comprising  the
Company's  deferred  tax assets as of February 1, 2003 and February
2, 2002 are as follows:

                                       FEBRUARY 1, 2003  FEBRUARY 2, 2002
                                       ----------------  ---------------
                                                 (IN THOUSANDS)
    Current:
     Inventory............................  $  5,585         $ 5,929
     Accrued expenses.....................     2,540           6,666
     Real estate..........................    (2,928)         (2,819)
                                             -------          ------
    Total current.........................  $  5,197         $ 9,776
                                             =======          ======
    Noncurrent:
     Accrued expenses.....................  $  1,108         $   ---
     Depreciation and amortization........   (10,282)        (1,970)
     Rent expense.........................     6,950           6,057
     Other................................      (332)            765
                                             -------          ------
    Total noncurrent......................  $ (2,556)        $ 4,852
                                             =======          ======

      Income  taxes  provided  reflect the current and deferred tax
consequences  of events that have been  recognized in the Company's
consolidated  financial  statements  or tax returns.  U.S.  federal
income taxes are provided on unremitted  foreign  earnings,  except
those  that  are  considered  permanently   reinvested,   which  at
February 1, 2003  amounted to  approximately  $7,008,000.  However,
if these  earnings  were  not  considered  permanently  reinvested,
under  current  law,  the  incremental  tax on  such  undistributed
earnings would be approximately $2,161,000.


 8. RETIREMENT PLANS

SAVINGS PLAN

      The Company maintains a defined  contribution  401(k) savings
plan for substantially  all full-time  employees of the Company and
its  subsidiaries.  Participants  may  contribute  to the  plan  an
aggregate  of up to 10%  of  their  annual  earnings.  The  Company
makes a matching  contribution  of 50% with respect to the first 3%
of each  participant's  annual  earnings  contributed  to the plan.
The  Company's  contributions  to the plan for Fiscal 2002,  Fiscal
2001  and  Fiscal  2000  were  $972,000,   $950,000  and  $792,000,
respectively.


PENSION PLAN

      Substantially  all  full-time  employees  of the  Company are
covered  under a  noncontributory  defined  benefit  pension  plan,
which calculates  benefits based on a career average  formula.  The
Company's  funding  policy for the plan is to  contribute  annually
the amount  necessary  to  provide  for  benefits  based on accrued
service  and  projected   pay   increases.   Plan  assets   consist
primarily of cash, equity and fixed income securities.

      The Company's  funding  obligations  and liability  under the
terms  of  the  plan  are   determined   using  certain   actuarial
assumptions,  including  a discount  rate of 6.75% and an  expected
long-term  rate of return  on plan  assets  of 8.5%.  The  discount
rate  selected  was  determined  based on the change in the Moody's
Aa corporate  bond yields,  which have decreased by 59 basis points
over the course of Fiscal 2002.  On this basis,  the discount  rate
utilized  was  adjusted  from 7.50% at February 2, 2002 to 6.75% at
February  1,  2003.  The  market-related  value of plan  assets for
determining  pension  expense  is equal  to the fair  value of plan
assets,  recognizing  gains or losses as they  occur.  Plan  assets


                                       36
================================================================================
<PAGE>37

                          ANNTAYLOR, INC.
                          ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


8. RETIREMENT PLANS

PENSION PLAN (CONTINUED)

as of February 1, 2003 are allocated  50% in equities,  33% in bond
related  funds and 17% in short-term  investments.   For  purposes
of  developing  long-term rates of return,  it was assumed that the
short-term investments were reallocated to equities, yielding assumed
long-term rates of return  of  10%  and  6%  for  equities
and  bond-related   funds, respectively.  In  selecting an expected
long-term  rate of return on  plan  assets, consideration  was given
to  the   Company's historical  annual rate of return over a  7-year
period, which averaged 8.8% per year.  In light of this, and in view
of current market  conditions, the expected long-term rate of return
on plan assets utilized was reduced from 9.0% for the fiscal year ended
February  1, 2003 to 8.5% for the fiscal  year  ending  January 31,
2004.

      The  following  table  provides  information  for the pension
plan at February 1, 2003, February 2, 2002 and February 3, 2001:

                                                    FISCAL YEARS ENDED
                                          --------------------------------------
                                          FEBRUARY 1,   FEBRUARY 2,  FEBRUARY 3,
                                              2003         2002          2001
                                           --------      --------      --------
                                                       (IN THOUSANDS)
Change in benefit obligation:
Benefit obligation,
  beginning of year ..................     $  9,023      $  6,782      $  4,954
Service cost .........................        2,116         1,524         1,206
Interest .............................          735           523           442
Actuarial loss .......................        2,458         1,458           879
Benefits paid ........................       (1,422)       (1,264)         (699)
                                           --------      --------      --------
Benefit obligation,
  end of year ........................     $ 12,910      $  9,023      $  6,782
                                           ========      ========      ========
Change in plan assets:
Fair value of plan assets,
  beginning of year ..................     $  9,127      $  9,644      $  9,489
Actual return on plan assets .........       (1,339)       (1,091)          854
Employer contribution ................        9,522         1,838          --
Benefits paid ........................       (1,422)       (1,264)         (699)
                                           --------      --------      --------
Fair value of plan assets,
   end of year .......................     $ 15,888      $  9,127      $  9,644
                                           ========      ========      ========
Funded status (fair value
  of plan assets less
  benefit obligation) ................     $  2,978      $    104      $  2,862
Unrecognized net actuarial
  (gain) loss ........................        7,268         2,710          (763)
Unrecognized prior service
  cost ...............................           44            51            57
                                           --------      --------      --------
Prepaid benefit cost .................     $ 10,290      $  2,865      $  2,156
                                           ========      ========      ========



      Net pension cost includes the following components:

                                                      FISCAL YEARS ENDED
                                             -----------------------------------
                                             FEBRUARY 1, FEBRUARY 2, FEBRUARY 3,
                                                  2003       2002        2001
                                                -------     -------     -------
                                                         (IN THOUSANDS)

Service cost ...............................    $ 2,116     $ 1,524     $ 1,206
Interest cost ..............................        735         523         442
Expected return on assets ..................     (1,021)       (924)       (831)
Amortization of prior losses (gains) .......        261        --            (1)
Amortization of prior service cost .........          6           6           6
                                                -------     -------     -------
Net periodic pension cost ..................    $ 2,097     $ 1,129     $   822
                                                =======     =======     =======
                                       37
================================================================================
<PAGE>38

                           ANNTAYLOR, INC.
                           ---------------
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
      -------------------------------------------------------


8. RETIREMENT PLANS (CONTINUED)

PENSION PLAN (CONTINUED)

      For the fiscal years ended February 1, 2003,  February 2, 2002
and  February 3, 2001,  the  following  actuarial  assumptions  were
used:

                                                   FISCAL YEARS ENDED
                                            ----------------------------------
                                            FEBRUARY 1, FEBRUARY 2,FEBRUARY 3,
                                               2003        2002       2001
                                               ----        ----       ----

Discount rate...............................   7.50%       7.75%      8.25%
Long-term rate of return on assets..........   9.00%       9.00%      9.00%
Rate of increase in future compensation.....   4.00%       4.00%      4.00%