<PAGE>

      FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 2000

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-K

[X]                              ANNUAL REPORT

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

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [No fee Required]

                   FOR THE FISCAL YEAR ENDED JANUARY 29, 2000

                         Commission file number 0-21869
                                  dELiA*s INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN OUR CHARTER)

         DELAWARE                                       13-3914035
(STATE OR OTHER JURISDICTION OF            (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

                   435 HUDSON STREET, NEW YORK, NEW YORK 10014
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                   (ZIP CODE)

                                 (212) 807-9060
              (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:
                     Common Stock, $.01 par value per share
                                (TITLE OF CLASS)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/

     The aggregate market value of common stock held by non-affiliates of the
registrant as of April 3, 2000 was $40,666,007.

     The number of shares outstanding of the registrant's common stock as of
April 3, 2000 was 15,085,011.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement pursuant to Regulation
14A, which statement will be filed not later than 120 days after the end of the
fiscal year covered by this Report, are incorporated by reference in Part III
hereof.


<PAGE>

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

================================================================================


                                       2
<PAGE>

         STATEMENTS CONTAINED IN THIS DOCUMENT, INCLUDING, WITHOUT LIMITATION,
INFORMATION APPEARING UNDER "PART I--ITEM 1--BUSINESS" AND "PART II--ITEM
7--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" MAY BE FORWARD-LOOKING STATEMENTS (WITHIN THE MEANING OF SECTION 27A
OF THE AMENDED SECURITIES ACT OF 1933 AND SECTION 21E OF THE AMENDED SECURITIES
EXCHANGE ACT OF 1934). WHEN USED IN THIS DOCUMENT, THE WORDS "BELIEVE," "PLAN,"
"INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON
THESE FORWARD-LOOKING STATEMENTS, WHICH APPLY ONLY AS OF THE DATE OF THIS
REPORT. THESE STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN THE
FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT
LIMITED TO, GENERAL ECONOMIC CONDITIONS; CHANGES IN CONSUMER SPENDING PATTERNS;
THE CONDITION OF THE FINANCIAL MARKETS GENERALLY AND THE MARKET FOR OUR
SECURITIES AND THOSE OF ITURF INC.; INCREASES IN THE COST OF MATERIALS,
PRINTING, PAPER, POSTAGE, SHIPPING AND LABOR; TIMING AND QUANTITY OF CATALOG
MAILINGS AND ELECTRONIC MAILINGS; CUSTOMER RESPONSE RATES; OPPORTUNITIES TO
EXPAND AND THE ABILITY TO INCREASE COMPARABLE STORE SALES; CHANGES IN THE GROWTH
RATE OF INTERNET USAGE AND ONLINE USER TRAFFIC LEVELS; LEVELS OF COMPETITION;
DIFFICULTIES IN INTEGRATING ACQUISITIONS OF NEW BUSINESSES AND TECHNOLOGY; THE
INTERPRETATION OF BY RELEVANT TAX AUTHORITIES OF CURRENT AND FUTURE TAX RULES
AND REGULATIONS, INCLUDING RULES AND REGULATIONS GOVERNING CORPORATE
REORGANIZATIONS; ABILITY TO LOCATE AND OBTAIN ACCEPTABLE STORE SITES AND LEASE
TERMS OR RENEW EXISTING LEASES; ACCEPTANCE OF NEW RETAIL CONCEPTS; ADVERSE
WEATHER CONDITIONS, CHANGES IN WEATHER PATTERNS AND OTHER FACTORS AFFECTING
RETAIL STORES; AND OTHER FACTORS OUTSIDE OUR CONTROL. THESE FACTORS, AND OTHER
FACTORS THAT APPEAR IN THIS REPORT, INCLUDING, WITHOUT LIMITATION, UNDER THE
"ITEM 1--BUSINESS--RISK FACTORS," COULD AFFECT OUR ACTUAL RESULTS AND COULD
CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY
FORWARD-LOOKING STATEMENTS MADE BY US OR ON OUR BEHALF. THIS REPORT INCLUDES
MARKET DATA RELATED TO THE INDUSTRIES IN WHICH WE ARE INVOLVED. THIS DATA HAS
BEEN DERIVED FROM STUDIES PUBLISHED BY MARKET RESEARCH FIRMS, TRADE ASSOCIATIONS
AND OTHER ORGANIZATIONS. THESE ORGANIZATIONS SOMETIMES ASSUME EVENTS, TRENDS AND
ACTIVITIES WILL OCCUR AND PROJECT INFORMATION BASED ON THOSE ASSUMPTIONS. IF ANY
OF THEIR ASSUMPTIONS ARE WRONG, THEIR PROJECTIONS MAY ALSO BE WRONG. WE
UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE ANY FORWARD-LOOKING STATEMENTS,
WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. YOU ARE
ADVISED, HOWEVER, TO CONSULT ANY ADDITIONAL DISCLOSURES WE MAKE IN OUR REPORTS
TO THE SEC ON FORMS 10-K, 10-Q AND 8-K.


         ANY REFERENCE IN THIS REPORT TO A PARTICULAR FISCAL YEAR AFTER 1998 IS
TO THE YEAR ENDED ON THE SATURDAY CLOSEST TO JANUARY 31 FOLLOWING THE
CORRESPONDING CALENDAR YEAR. FOR EXAMPLE, "FISCAL 1999" MEANS THE PERIOD FROM
FEBRUARY 1, 1999 TO JANUARY 29, 2000. ANY REFERENCE IN THIS REPORT TO A
PARTICULAR FISCAL YEAR BEFORE 1999 IS TO THE YEAR ENDED JANUARY 31 FOLLOWING THE
CORRESPONDING CALENDAR YEAR. FOR EXAMPLE, "FISCAL 1998" MEANS THE PERIOD FROM
FEBRUARY 1, 1998 TO JANUARY 31, 1999.


                                     PART I


ITEM 1. BUSINESS.


                                       3
<PAGE>

OVERVIEW

     We are a leading marketer of casual apparel, accessories, soccer
merchandise and Internet content and community services to young men and women
between the ages of 10 and 24, an age group known as "Generation Y."

     Through our dELiA*s catalog, Web site, full-priced stores and discount
outlet stores, we are a leading marketer of casual apparel, related accessories,
home furnishings and cosmetics to Generation Y girls and young women. Through
our TSI SOCCER catalog, retail stores and Web site, we are a leading marketer of
specialty soccer merchandise to Generation Y boys and girls. Our other catalogs
with related Web sites include DROOG, an apparel and accessories title that
targets Generation Y young men, and STORYBOOK HEIRLOOMS, which primarily targets
girls ages 4 to 11 and their mothers with fashionable, upscale special occasion
outfits, casual apparel and accessories. In addition, we targeted young men and
women with our Screeem! and Jean Country retail stores, all of which will soon
be converted to dELiA*s full-priced stores or closed.

         On April 14, 1999, we completed an initial public offering of 28% of
the common stock of iTurf, our Generation Y Internet subsidiary. iTurf is a
leading provider of Internet community, content and electronic commerce, or
e-commerce, services focused primarily on teens and young adults, based on sales
and traffic on our Web sites. The iTurf network of Web sites includes sites that
offer interactive web/zines with proprietary content, chat rooms, posting
boards, personal homepages and e-mail, as well as online shopping opportunities.
The network is currently comprised of our the following community sites:
gURL,OnTap, TheSpark and SparkNotes as well as the following commerce sites that
offer a wide range of apparel, accessories, footwear, athletic gear and home
furnishings: dELiAs.com, tsisoccer.com, discountdomain.com, droog.com, and
StorybookHeirlooms.com. The net proceeds of the iTurf offering were $97.4
million of which iTurf used $17.7 million to purchase 551,046 shares of our
common stock from us. Of the 12,500,000 shares of iTurf's Class B common stock
that was held by dELiA*s following the initial public offering, we sold
1,075,000 shares during the fourth quarter of fiscal 1999. As a result of such
sales and new issuances by iTurf, we owned 60% of the value of iTurf at January
29, 2000.

     The following table sets forth our principal product categories:

<TABLE>
<CAPTION>

                                                            Percentage of Sales
Product Category                                                Fiscal 1999
----------------                                                -----------
<S>                                                         <C>
Apparel.....................................................      71%
Footwear....................................................      14%
Soccer equipment, home furnishings and other................      15%
</TABLE>

     MERCHANDISING AND MARKETING. Our dELia*s and DROOG catalogs, our dELiA*s,
Screeem! and Jean Country retail stores and our related e-commerce Web sites
offer carefully selected assortments of recognized and emerging brands of teen
apparel and accessories, complemented by our own proprietary brands. We believe
teens are very brand-conscious, particularly in their apparel choices, and rely
on their favorite brands to help them project an image to their peers. We
monitor leading teen magazines (including TEEN, SEVENTEEN and YM), television
channels (such as MTV) and other trend-setting media to identify brands and
styles that we believe are attracting the attention of the teen market. Our
buyers regularly attend apparel shows and meet with vendors and, in some cases,
the editorial staffs of teen magazines, to stay abreast of popular brands,
fashions and styles.

     These catalogs, retail stores and Web sites feature a broad assortment of
merchandise, ranging from basics, such as jeans, shorts and t-shirts to more
fashion-oriented apparel and accessories, such as woven and knit junior dresses,
swimwear, sunglasses, watches, costume jewelry and cosmetics to enable our


                                       4
<PAGE>

customers to fulfill many of their fashion needs. dELia*s also offers home
furnishings, light furniture and household articles to teen girls and young
women. Merchandise is presented in a manner that reflects the specific style of
the catalog, store or Web site. We present merchandise in coordinated groupings
to encourage customers to create outfits, which we believe increases average
purchase size and enhances sales.

     Our STORYBOOK HEIRLOOMS catalog and Web site market a carefully selected
assortment of proprietary product including upscale girls' dresses, special
occasion outfits, casual outfits, sportswear separates and related accessories.
The catalog and site are targeted at girls age 4 to 11 and their parents and
therefore represent strong feeders of customers for our dELia*s properties.

     Our TSI SOCCER catalog, retail stores and Web site offer a full range of
soccer merchandise, including footwear, apparel and equipment, almost all of
which consists of products from the leading suppliers of athletic footwear and
apparel, as well as manufacturers of well-known specialty brands. We offer
difficult-to-find sizes, men's, women's and children's styles, and special team
colors and product color combinations. We occasionally offer exclusive products,
designs or color combinations from leading suppliers. As we have grown, we have
been able to provide a greater breadth and depth of new products. We believe
that few other marketers currently offer as complete a line of soccer footwear,
apparel and equipment covering the depth of products we offer.

     CATALOG PUBLISHING. In fiscal 1999, combined catalog circulation was 72
million. We publish distinctive catalogs that include detailed product
descriptions and specifications, full color photographs and pricing information.
Our catalogs are designed to create a unique and entertaining shopping
experience and to offer customers more than the typical apparel catalog by
combining the feel and editorial flair of a magazine with the convenience of
direct mail shopping.

     We mail our catalogs to persons listed in our proprietary database, as well
as to persons from rented lists. We believe we can leverage our proprietary
database to develop additional targeted mailings to specific customer segments,
and may expand our strategy of more frequent mailings of supplemental catalogs
to repeat customers.

     INTERNET SALES. We have experienced significant migrations of our
catalog and retail customers to iTurf's Web sites which has had, and is
expected to continue to have, a material adverse effect on our financial
position and results of operations. Through certain intercompany agreements
with iTurf, dELiA*s Inc. has given iTurf exclusive licenses to sell our
products through the Web. Due to promotional pricing at iTurf and similar
factors, we may make a lower gross margin on these sales than if the sales
had been made directly to our catalog and retail customers. In addition, we
do not get the full benefit of the sale as we only own 60% of iTurf as of
January 29, 2000. Cash provided by Web sales is restricted to use by iTurf
and is not available for use in our other businesses.

     RETAIL STORES.  The following table summarizes our retail stores as of
January 29, 2000.

<TABLE>
<CAPTION>

CONCEPT               STORES      SIZE RANGE      AVERAGE SIZE    LOCATIONS
-------               ------      ----------      ------------    ---------
                                         (square feet)
<S>                   <C>       <C>               <C>             <C>
TSI Soccer              24      2,100 - 4,600         3,400       California, Delaware, Georgia, Maryland,
                                                                  New Jersey, New York, North Carolina,
                                                                  Pennsylvania, Virginia

dELiA*s                 17      2,900 - 5,100         3,900       Connecticut, Illinois, Maryland,
                                                                  Massachusetts, New Jersey, New York,
                                                                  Pennsylvania, Rhode Island

Screeem!/               19      2,100 - 6,500         4,000       Massachusetts, New Jersey, New York,
Jean Country


                                       5
<PAGE>

                                                                  Pennsylvania

dELiA*s outlet          4       2,800 - 4,000         3,300       New Jersey, New York, Pennsylvania
</TABLE>

     All of our retail stores have point-of-sale terminals that transmit
information daily on sales by item, color and size. We evaluate this
information, together with weekly merchandise statistics reports, prior to
making merchandising decisions regarding reorders of fast-selling items and the
allocation of merchandise.

     TEAM SALES. We sell customized soccer apparel in team-sized lots to amateur
and scholastic soccer teams and leagues. We screen print customized lettering
and logos on branded apparel produced by our leading suppliers. These products
are typically sold at a discount to equivalent non-customized products found in
our TSI Soccer catalogs and retail stores.

     PROPRIETARY DATABASE DEVELOPMENT. We have historically developed our
proprietary customer database primarily through referrals, word-of-mouth,
returns of catalog request cards, on-line program membership and targeted
classified advertising in selected magazines, including, for the dELia*s
catalog, SEVENTEEN and YM. During fiscal 1999, approximately 1.6 million new
names were added to our database through such channels. As of January 29,
2000, our proprietary database included approximately 12 million names, 7
million of which were customers. Our database contains a person's name,
gender, residence, age, family status and historical transaction data
(including, among other things, referral source, history of orders, payment
method, average order size and product purchase information). Whenever
possible, we also gather additional demographic data including e-mail
addresses.

     TELESERVICES AND ORDER ENTRY. We provide our catalog and Internet customers
with 24-hour, seven-day-a-week, toll-free telephone access. Teleservice
representatives process orders directly into our management information system.
These representatives are versed in product sizes, colors and features and are
trained to cross-sell accessories and related products and provide information
about promotional items.

     We believe our customers are particularly sensitive to the way merchants
and salespeople communicate with them. We strive to hire energetic,
service-oriented teleservice representatives who can understand and relate to
our customers.

     We currently have over 400 in-house phone stations between our three call
center facilities. Our approximately 500 (as of January 29, 2000) full- and
part-time teleservice representatives have the capacity to handle nearly 5,000
calls per hour. We also use an outside teleservices provider for overflow calls.
We process telephone orders in an average of under five minutes, depending upon
the nature of the order and whether the customer is a first-time or repeat
customer.

     CUSTOMER SERVICE AND RETURNS. We maintain separate catalog and Internet
customer service departments. Customer service inquiries are principally
concerned with order and refund status. Customer service representatives are
carefully screened, specially trained and often promoted from within based on
level of product knowledge, service ability and order accuracy. Return
experience is closely monitored to identify trends in product offerings, product
defects and quality issues.

     DISTRIBUTION AND FULFILLMENT. Except for our Storybook Heirlooms products,
which are shipped from a separate warehouse in Foster City, our customer orders
and retail stock shipments are processed through our warehouse and fulfillment
center in Hanover, Pennsylvania. From this center, we have the capacity to ship
35,000 packages per day. We use an integrated picking, packing and shipping
system with a live connection to our order entry and retail systems. The system
monitors the in-stock status of


                                       6
<PAGE>

each item ordered, processes the order and generates warehouse selection tickets
and packing slips for order fulfillment operations and retail stocking.

     We have excess inventory in varying degrees over the course of the year. We
mail sales catalogs, run promotional sales of excess items and sell excess
inventory through our outlet stores and discount Web site. We have also used
third-party liquidators, event sales and charitable donations to dispose of
excess inventory and may consider other liquidation options in the future.

     A majority of our catalog orders are shipped within 48 hours of credit
approval. In cases in which the order is placed using another person's credit
card and it exceeds a specified threshold, the order is shipped only after we
have received confirmation from the cardholder. Customers generally receive
orders within three to five business days after shipping. Our shipments are
generally made through United Parcel Service or the United States Postal Service
although we are currently evaluating other distribution alternatives that might
provide the same level of customer satisfaction in a more cost-efficient manner.


INTELLECTUAL PROPERTY

     We have registered the dELiA*s name, stylized logo and daisy symbol ("*"),
among other trademarks, with the U.S. Patent and Trademark Office. We also own
the Storybook Heirlooms name and logo. We use the TSI name under a royalty-free
license from a third party. Applications for registration of our other
trademarks, including Droog, Discount Domain, OnTap, dotdotdash, gURL and
TheSpark are currently pending or have been accepted in the United States, Japan
and other international territories. We also use the trademarks, tradenames,
logos and endorsements of our suppliers with their permission. While we do from
time to time receive notices of alleged infringement of other people's
intellectual property rights, we are not aware of any pending material conflicts
concerning our marks or our use of others' intellectual property rights.


COMPETITION

     The apparel, accessories and soccer specialty merchandise industries, as
well as the online content and community industries, are highly competitive and
we expect competition in these markets to increase. We compete with traditional
department-store retailers, as well as specialty apparel, accessory, soccer and
general athletic merchandise retailers, for teen and young-adult customers. We
also compete with other direct marketers and other Internet companies, some of
which may specifically target our customers. Many of our competitors are larger
than us and have substantially greater financial, distribution and marketing
resources. Increased competition could result in pricing pressures, increased
marketing expenditures and loss of market share. We believe our success will
depend, in part, on our ability to adapt to new technologies and to respond to
competitors' actions in these areas.


EMPLOYEES

     As of January 29, 2000, we had approximately 2,447 employees. None of our
employees are represented by a collective bargaining unit. We consider our
relations with our employees to be good.


RISK FACTORS

     THE FOLLOWING PRINCIPAL RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS REPORT BY PROSPECTIVE
INVESTORS OR CURRENT STOCKHOLDERS EVALUATING AN


                                       7
<PAGE>

INVESTMENT IN OUR COMMON STOCK. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE DESCRIBED. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO THESE DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED BELOW AND IN THE SECTION
ENTITLED "ITEM 7--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS."

     HISTORICAL RESULTS MAY NOT BE INDICATIVE OF FUTURE RESULTS DUE TO SEASONAL,
CYCLICAL AND QUARTERLY FLUCTUATIONS. We experience seasonal fluctuations in our
revenues and results of operations. In addition, due to the cyclical nature of
our business and our sensitivity to consumer spending patterns, purchases of
apparel and accessories tend to decline during recessionary periods and may
decline at other times. Our quarterly results may fluctuate as a result of
numerous factors, including
     -   general economic conditions;
     -   changes in consumer spending patterns;
     -   increases in the cost of materials, printing, paper, postage, shipping
         and labor;
     -   the timing, quantity and cost of catalog and online mailings and
         response rates to those mailings;
     -   market acceptance of our merchandise (including new merchandise
         categories or products introduced) and online content and community
         offerings;
     -   opportunities to expand, including the ability to locate and obtain
         acceptable store sites and lease terms or renew existing leases, and
         the ability to increase comparable store sales;
     -   levels of competition;
     -   the timing of merchandise deliveries;
     -   difficulties in integrating acquisitions;
     -   adverse weather conditions, changes in weather patterns and other
         factors affecting retail stores; and
     -   other factors outside our control.

     OUR GROWTH STRATEGY MAY PRESENT OPERATIONAL, MANAGEMENT AND INVENTORY
CHALLENGES. Our historical growth has placed significant demands on our
management and other administrative, operational and financial resources. We
intend to continue to pursue a growth-oriented strategy for the foreseeable
future and our future operating results will largely depend on our ability to
open and operate new retail stores, appropriately expand our Internet business
and to manage a larger business. Managing our growth will require us to continue
to implement and improve our operations and financial and management information
systems and to continue to expand, motivate and effectively manage our
workforce. Operation of new retail concepts and a greater number of new stores
as well as expansion into new retail markets and online expansion may present
competitive and merchandising challenges that are different from those we
currently encounter in our existing businesses. Continued expansion will also
require additional capital for investment in infrastructure. There can be no
assurance that we will be able to obtain financing on acceptable terms. In
addition, expansion of our retail and Internet concepts within our existing
markets may adversely affect the individual financial performance of existing
stores or our consolidated results. New stores may not achieve sales and
profitability levels consistent with existing stores. Investments in
infrastructure for our catalog, retail and Internet businesses will increase
our operating expenses, which could have a material adverse effect on the
results of our business if anticipated sales do not materialize. Furthermore,
as our sales increase, we anticipate maintaining higher inventory levels.
This anticipated increase in inventory levels will expose us to greater risk
of excess inventories and inventory obsolescence, which could have a material
adverse effect on our business. If we are unable to grow our business as
planned, we may will not be able to leverage the fixed costs we incur in
connection with the infrastructure we have put in place.

     WE MAY FAIL TO ANTICIPATE AND RESPOND TO FASHION TRENDS. Our failure to
successfully anticipate, identify or react to changes in styles, trends or brand
preferences of our customers may result in lower revenue from reduced sales and
promotional pricing. Our success depends, in part, on our ability to anticipate
the frequently-changing fashion and online community and content tastes of our
customers and


                                       8
<PAGE>

to offer merchandise and services that appeals to their preferences on a timely
and affordable basis. If we misjudge our offerings, our image with our customers
would be materially adversely affected. Poor customer reaction to our products
and services or our failure to effectively source these products would
materially affect our business.

     WE MAY EXPERIENCE DECLINES IN PROFITABILITY DUE TO MIGRATION OF SALES
FROM OUR CATALOG AND RETAIL CHANNEL TO OUR INTERNET BUSINESS. We have
experienced significant migrations of our catalog and retail customers to
iTurf's Web sites which has had, and is expected to continue to have, a
material adverse effect on our financial position and results of operations.
Through certain intercompany agreements with iTurf, dELiA*s Inc. has given
iTurf exclusive licenses to sell our products through the Web. Due to
promotional pricing at iTurf and similar factors, we may make a lower gross
margin on these sales than if the sales had been made directly to our catalog
and retail customers. In addition, we do not get the full benefit of the sale
as we only own 60% of iTurf as of January 29, 2000. Cash provided by Web
sales is restricted to use by iTurf and is not available for use in our other
businesses.

     WE MAY NOT BE ABLE TO ATTRACT NEW BUYERS TO REPLENISH OUR CUSTOMER BASE.
Our customers are primarily teens and young adults. As these individuals age
beyond their teens, they may no longer purchase products and use online
offerings aimed at younger individuals. Accordingly, we must constantly update
our marketing efforts to target new, prospective teen and young adult customers.
Failure to do so would have a material adverse effect on our business.

     OUR CATALOG RESPONSE RATES MAY DECLINE. Response rates will usually decline
when we mail additional catalog editions within the same fiscal period. In
addition, as we continue to increase the number of catalogs distributed and mail
our catalogs to a broader group of new potential customers, we have observed
that these new potential customers respond at lower rates than our existing
customers have historically responded. This trend in response rates has had and
is likely to continue to have an adverse effect on our rate of sales growth and
on our profitability.

     PROPOSED LEGISLATION MAY LIMIT OUR ABILITY TO CAPTURE CUSTOMER INFORMATION.
Recently, there has been increasing public concern regarding the compilation,
use and distribution of information about teens and children. Federal
legislation has been introduced in the U.S. Congress that proposes restrictions
on persons, principally list brokers, that sell, purchase or otherwise use for
commercial purposes personal information about teens (under the age of 16) and
children. List brokerage is not currently a material part of our business but we
do market to persons whose names were derived from purchased or rented lists. We
may increase our use of purchased and rented lists or, in the future, decide to
increase our list brokerage business. Consequently, the proposed legislation, or
other similar laws or regulations that may be enacted, could impair our ability
to collect customer information, use that information in the course of our
business or profit from future plans to sell customer information, which could
have a material adverse effect on our business.

     Comparable store sales results may fluctuate. A variety of factors affect
our comparable store sales, including among others, fashion trends, the general
retail sales environment, our ability to efficiently source and distribute
products, changes in our merchandise mix and our ability to execute our business
strategy efficiently. Comparable store sales may fluctuate significantly, which
would adversely affect our business.

     WE MAY FACE CHALLENGES IN IDENTIFYING, COMPLETING, INTEGRATING AND
FINANCING ACQUISITIONS. We expect from time to time to consider making
additional acquisitions within and outside the direct mail, retail and apparel
and Internet industries, but may not be able to make these acquisitions, either
on favorable terms or at all. In addition, recent acquisitions or future
acquisitions may not prove successful.

     Acquisitions involve a number of special risks, including the diversion of
management's attention to the integration of operations and the assimilation and
retention of the personnel of acquired companies


                                       9
<PAGE>

and potential adverse short-term effects on our operating results. In addition,
we may require additional debt or equity financing for future acquisitions,
which may not be available on favorable terms, or at all. Our inability to
successfully finance, complete and integrate acquisitions in a timely manner
would have a material adverse effect on our business.

     WE RELY ON THIRD PARTY SHIPPERS. We rely on third party shippers (including
the United States Postal Service, United Parcel Service and FedEx) to ship
merchandise to our customers and retail stores. Strikes or other service
interruptions affecting our shippers would have a material adverse effect on our
ability to deliver merchandise on a timely basis.

     WE DEPEND ON KEY VENDORS. Our business depends, in part, on our ability to
purchase current-season brand-name apparel, accessories and soccer merchandise
at competitive prices, in sufficient quantities and of acceptable quality. While
no vendor accounted for more than 6% of our consolidated fiscal 1999 sales, two
vendors accounted for approximately 61% of sales of our soccer business in
fiscal 1999. One of those vendors, adidas, accounted for approximately 6% of our
consolidated sales in fiscal 1999. We do not have a long-term contract with
adidas or any other supplier. In addition, many of our smaller vendors have
limited resources, production capacities and operating histories. The failure of
key vendors to expand with us, the loss of one or more key vendors including
adidas, a material change in our current purchase terms or a limitation on our
ability to procure products would have a material adverse effect on our
business.

     WE MAY FAIL TO RETAIN AND INTEGRATE OUR KEY PERSONNEL TO OPERATE OUR
BUSINESS, AND WE MAY BE UNABLE TO HIRE AND RETAIN QUALIFIED PERSONNEL AS OUR
BUSINESS GROWS. Our success depends upon the continued service of our key
technical, sales and senior management personnel. Loss of the services of
Stephen I. Kahn, Chairman of our board of directors and Chief Executive Officer,
Christopher C. Edgar, Vice Chairman and Chief Operating Officer, and Evan
Guillemin, President, or other key employees would have a material adverse
effect on our business.

     Our success also depends on our ability to continue to attract, retain and
motivate skilled employees. We may be unable to retain our key employees or
attract, assimilate or retain other qualified employees in the future. Our
business will be materially adversely affected if we fail to attract and retain
key employees.

     OUR INDUSTRIES ARE HIGHLY COMPETITIVE. The apparel, accessories and soccer
specialty merchandise and Internet content and community industries are highly
competitive, and we expect competition in these markets to increase. We compete
with traditional department-store retailers, as well as specialty apparel,
accessory, soccer and general athletic merchandise retailers, for teen and young
adult customers. We also compete with other direct marketers and Internet
companies, some of which may specifically target our customers. Many of our
competitors are larger than us and have substantially greater financial,
distribution and marketing resources.

     There are few barriers to entry in the teen apparel and accessories market,
in the soccer specialty market and in the online content and community market.
We believe that our success in the teen market has attracted other catalog and
Internet direct marketers, store-based retailers and apparel manufacturers to
this market. We could also face competition from manufacturers of apparel and
accessories (including our current vendors) who could market their products
directly to retail customers or make their products more readily available in
competitor catalogs, Web sites and retail stores. In addition, competitors could
enter into exclusive distribution arrangements with our vendors and deny us
access to their products. Increased competition could result in pricing
pressures, increased marketing expenditures and loss of market share, and would
have a material adverse effect on our business.


                                       10
<PAGE>

     Our industry is being affected by technological changes in distribution and
marketing methods, such as on-line catalogs, retail kiosks and Internet
shopping. We believe our success will depend, in part, on our ability to adapt
to new technologies and to respond to competitors' actions in these areas.
Adapting to new technologies could require significant capital expenditures.

     POSTAGE AND PAPER EXPENSES FLUCTUATE. Significant increases in paper or
catalog delivery costs would have a material adverse effect on our business.

     WE RELY ON INFORMATION SYSTEMS WHICH ARE SUBJECT TO DISRUPTION. Our success
depends, in part, on our ability to provide prompt, accurate and complete
service to our customers on a competitive basis, and to purchase and promote
products, manage inventory, ship products, manage sales and marketing and
maintain efficient operations through our telephone and management information
systems. A significant disruption in our telephone and management information
systems could adversely affect our relations with our customers and vendors and
our ability to manage our operations. Furthermore, extended or repeated reliance
on our back-up computer and telephone systems would have a material adverse
effect on our business.

     WE MAY BECOME SUBJECT TO CURRENCY, POLITICAL, TAX AND OTHER UNCERTAINTIES
AS WE EXPAND INTERNATIONALLY. We distribute our dELiA*s and STORYBOOK HEIRLOOMS
catalogs in Japan and Canada and plan to explore distribution opportunities in
other international markets. Our international business is subject to a number
of risks of doing business abroad, including:
     -   fluctuations in currency exchange rates;
     -   the impact of recessions in economies outside the United States;
     -   regulatory and political changes in foreign markets;
     -   reduced protection for intellectual property rights in some countries;
     -   potential limits on the use of some of our vendors' trademarks outside
         the United States;
     -   exposure to potentially adverse tax consequences or import/ export
         quotas;
     -   opening and managing distribution centers abroad;
     -   inconsistent quality of merchandise and disruptions or delays in
         shipping; and
     -   difficulties in developing customer lists and marketing channels.

     In addition, some of our vendors procure products from outside the United
States and we purchase merchandise for our dELiA*s-branded apparel directly from
non-U.S. manufacturers. Furthermore, expansion into new international markets
may present competitive and merchandising challenges different from those we
currently face. We cannot assure you that we will expand internationally or that
any such expansion will result in profitable operations.

     WE DEPEND ON INTELLECTUAL PROPERTY. The actions we take to establish and
protect our trademarks and other proprietary rights may not prevent imitation of
our products and services or infringement of our intellectual property rights by
others. In addition, others may resist or seek to block our product sales or
service offerings by claiming violation of their trademark and proprietary
rights.

     WE MAY BE REQUIRED TO COLLECT SALES TAX. At present, we do not collect
sales or other similar taxes in respect of direct shipments of goods to
consumers into most states. However, various states have sought to impose state
sales tax collection obligations on out-of-state direct mail companies. A
successful assertion by one or more states that we should have collected or be
collecting sales taxes on the direct sale of products would have a material
adverse effect on our business.

     OUR PRINCIPAL STOCKHOLDER MAY EXERT CONTROL OVER OUR BUSINESS. As of April
1, 2000, Stephen I. Kahn, our Chairman and Chief Executive Officer, beneficially
owned approximately 40% of the outstanding shares of our common stock, including
shares he owns directly and additional shares covered


                                       11
<PAGE>

by a stockholders agreement among some of our existing stockholders. Therefore,
Mr. Kahn can control the election of our directors and the outcome of all issues
submitted to a vote of our stockholders. The foregoing, together with provisions
in our certificate of incorporation, may make it more difficult for a third
party to acquire, and may discourage acquisition bids for, dELiA*s and could
limit the price that investors might be willing to pay for shares of our common
stock. In addition, a majority of stockholders may take any action in writing
without a meeting according to Delaware law and our bylaws, which may allow Mr.
Kahn to direct corporate action without advance notice to other stockholders.

     ANTI-TAKEOVER PROVISIONS MAY HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF
OUR COMMON STOCK. Some provisions of our certificate of incorporation and bylaws
may make it more difficult for a third party to acquire, or may discourage
acquisition bids for, dELiA*s and could limit the price that investors might be
willing to pay in the future for shares of our common stock. In addition, the
rights of holders of our common stock will be subordinate to, and may be
adversely affected by, the rights of any holders of preferred stock that may be
issued in the future and that may be senior to the rights of the holders of
common stock. Under certain conditions, Section 203 of the General Corporation
Law of the State of Delaware would prohibit us from engaging in a "business
combination" with an "interested stockholder" (in general, a stockholder owning
15% or more of our outstanding voting stock) for a period of three years from
the date that the stockholder becomes an "interested stockholder."

     OUR STOCK PRICE HAS BEEN PARTICULARLY VOLATILE. Our stock price has
fluctuated substantially since our initial public offering in December 1996. We
believe factors such as reaction to our Internet business activity, actions of
competitors and quarterly variations in operating results, as well as changes in
market conditions, analysts' estimates and the stock market may cause the market
price of our common stock to fluctuate significantly. Further, the stock market
has historically experienced volatility that sometimes has been unrelated to a
company's operating performance.

ITEM 2.  PROPERTIES

     The following table sets forth information regarding our principal
facilities, excluding retail stores. Except for the building in Hanover, PA,
which was purchased during fiscal 1999, all such facilities are currently
leased.

<TABLE>
<CAPTION>

         LOCATION                                    USE                         APPR. SQ.          LEASE
         --------                                    ---                         ---------          -----
                                                                                  FOOTAGE      EXPIRATION DATE
                                                                                  -------      ---------------
<S>                          <C>                                                 <C>           <C>
New York, NY                 Corporate offices                                     45,000           2007
New York, NY                 iTurf offices                                         20,000           2000
Long Island City, NY         Call center                                           25,000           2010
Hanover, PA                  Warehouse, fulfillment and distribution center       400,000            -
Durham, NC                   Corporate offices and call center                     65,000           2007
Foster City, CA              Corporate offices and call center                     20,000           2001
Hayward, CA                  Warehouse, fulfillment and distribution center        33,000           2000
</TABLE>

     iITurf currently leases approximately 20,000 square feet of office space
located at One Battery Park Plaza, New York, New York 10004. While the current
space is leased on a month-to-month basis, iTurf recently entered into a 10-year
lease for approximately 25,000 square feet of office space at the same address.

     We are currently evaluating our options regarding the pending expiration of
our lease of the Storybook Heirlooms warehouse, fulfillment and distribution
center in Hayward, California. We are considering the costs and benefits of
moving the operations performed there to our Hanover, Pennsylvania facility.


                                       12
<PAGE>

     We believe our facilities are well maintained and in good operating
condition.


ITEM 3.  LEGAL PROCEEDINGS.

     In 1999, two separate purported securities class action lawsuits were filed
against us and certain of our officers and directors and one former officer of a
subsidiary. The original complaints were filed in Federal District Court for the
Southern District of New York by Allain Roy on June 1, 1999 and by Lorraine
Padgett on June 3, 1999. The suits were consolidated into a single class action
and an amended and consolidated complaint was filed on March 22, 2000. The
complaintin this lawsuit purports to be a class action on behalf of the
purchasers of our securities during the period January 20, 1998 through
September 10, 1998. The complaint generally alleges that the defendants violated
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
by making material misstatements and by failing to disclose certain allegedly
material information regarding trends in our business. The complaint also
alleges that the individual defendants are liable for those violations under
Section 20(a) of the Securities Exchange Act. The complaint seeks unspecified
damages, attorneys' and experts' fees and costs, and such other relief as the
court deems proper. On April 14, 2000, dELiA*s Inc. and the other named
defendants filed a motion to dismiss the lawsuit. Since that date, we are not
aware of any changes in the status of the lawsuit.

     We intend to vigorously defend against these actions. Based upon
information presently known to management, we do not believe that the ultimate
resolution of these lawsuits will have a material adverse effect on our
financial condition, results of operations or cash flow.

     In connection with our acquisition of the Hanover, PA distribution
facility, we hired an environmental consultant to perform an assessment of the
facility. As a result of that assessment, the seller of the property performed
certain soil remediation and created a groundwater remediation plan, each
relating to the presence of underground fuel oil, waste oil and gasoline tanks
located on the property and subsequently removed by the seller. The Pennsylvania
Department of Environmental Protection has released the seller from liability
with respect to soil contamination and has approved the ground water remediation
plan. The seller has set funds aside in escrow to cover up to $250,000 in ground
water remediation costs. We do not believe that the environmental conditions at
the facility will have a material adverse effect on our consolidated financial
condition, results of operations or cash flows.


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

     There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal 1999.


                                       13
<PAGE>

                                     PART II

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

     Our common stock is traded on the NASDAQ National Market under the symbol
DLIA. The following table sets forth the high and low sales prices for our
common stock as reported by NASDAQ for the periods indicated. These quotations
reflect interdealer prices without adjustments for retail markups, markdowns, or
commissions and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>

                                                                                     HIGH          LOW
                                                                                     ----          ---
<S>                                                                                  <C>           <C>
FISCAL YEAR ENDED JANUARY 31, 1999
         1st Quarter..............................................................   $30.188       $22.125
         2nd Quarter..............................................................    28.000        14.500
         3rd Quarter..............................................................    19.000         4.125
         4th Quarter..............................................................    22.938         7.500
FISCAL YEAR ENDED JANUARY 29, 2000
         1st Quarter..............................................................   $40.000       $16.000
         2nd Quarter..............................................................    21.938         9.500
         3rd Quarter..............................................................    10.125         5.500
         4th Quarter..............................................................    13.250         6.000
</TABLE>

     On April 3, 2000, there were 168 holders of record of our common stock and
approximately 6,800 beneficial owners of our common stock.


DIVIDEND INFORMATION

     Since our initial public offering in December 1996, we have neither
declared nor paid any cash dividends on our common stock. We currently intend to
retain our earnings for future growth and, therefore, do not anticipate paying
any cash dividends in the foreseeable future. Our First Union credit facility
prohibits us from paying dividends. We expect that our new credit facility will
have a similar restriction.


SALES OF UNREGISTERED SECURITIES IN THE FOURTH QUARTER OF FISCAL 1999

     On December 17, 1999, we issued 5,000 shares of our common stock to the
three New York State residents who were shareholders of gURL, Interactive Inc.
as partial payment for all of the outstanding capital stock of that entity. The
issuance of such securities was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933.


                                       14
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA.

     The selected financial data set forth below have been derived from our
consolidated financial statements, which have been prepared according to
generally accepted accounting principles. The following selected data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements
and notes thereto appearing elsewhere in this report. All financial and
operating data have been restated to give effect to our 1996 conversion from a
limited liability company to a C corporation in connection with our initial
public offering and our December 1997 acquisition of TSI Soccer Corporation. Pro
forma net income is computed for the year ended January 31, 1997 and all prior
periods to reflect the effect of pro forma tax provisions related to our 1996
conversion to a C corporation.

<TABLE>
<CAPTION>
                                                   FISCAL 1995     FISCAL 1996     FISCAL 1997     FISCAL 1998     FISCAL 1999
                                                             (IN THOUSANDS, EXCEPT PER SHARE AND RETAIL STORE DATA)
<S>                                                <C>             <C>             <C>             <C>             <C>
INCOME STATEMENT DATA:
   Net sales ................................      $  23,391       $  54,224       $ 113,049       $ 158,364       $ 190,772
   Cost of sales ............................         13,652          28,291          57,811          78,368         108,148
                                                   ---------       ---------       ---------       ---------       ---------
   Gross profit .............................          9,739          25,933          55,238          79,996          82,624
   Selling, general and administrative
     expenses ...............................          9,720          22,194          47,943          71,711         124,339
   Merger related costs .....................             --              --           1,614              --              --
   Restructuring charge .....................             --              --              --              --          23,668
   Gain on subsidiary IPO and sale of
     subsidiary stock .......................             --              --              --              --         (78,117)
   Minority interest ........................             --              --              --              --          (4,865)
   Other expense (income), net ..............             56            (103)         (1,201)           (962)         (2,429)
                                                   ---------       ---------       ---------       ---------       ---------
   Income (loss) before income taxes ........            (37)          3,842           6,882           9,247          20,028
   Provision (benefit) for income taxes .....             (5)           (351)          2,456           3,405           9,070
                                                   ---------       ---------       ---------       ---------       ---------
   Net income (loss) ........................      $     (32)      $   4,193       $   4,426       $   5,842       $  10,958
                                                   =========       =========       =========       =========       =========
   Basic net income (loss) per share ........      $   (0.00)      $    0.40       $    0.34       $    0.42       $    0.77
                                                   =========       =========       =========       =========       =========
   Diluted net income (loss) per share ......      $   (0.00)      $    0.40       $    0.34       $    0.41       $    0.71
                                                   =========       =========       =========       =========       =========
   Pro forma net income (loss) ..............            (22)      $   2,257
                                                   =========       =========
   Pro forma basic and diluted net
     income (loss) per share ................      $   (0.00)      $    0.22
                                                   =========       =========
   Shares used in the calculation of
     basic net income (loss) per share ......         10,263          10,477          12,941          13,779          14,315
                                                   =========       =========       =========       =========       =========
   Shares used in the calculation of
     diluted net income (loss) per share ....         10,263          10,499          13,083          14,318          15,380
                                                   =========       =========       =========       =========       =========
BALANCE SHEET DATA AT END OF FISCAL
     YEAR:
   Cash and cash equivalents ................            726          21,717           4,485          10,981          24,985
   Working capital ..........................            349          19,099          37,959          25,480          83,952
   Total assets .............................          4,381          32,660          64,572          82,144         184,040
   Total stockholders' equity ...............            916          21,024          44,144          63,607          82,921
SELECTED OPERATING DATA:
   Number of catalogs distributed ...........          5,400          13,050          39,850          61,320          71,810
   House names (1) ..........................            690           1,870           4,190          10,670          12,300
   Direct Mail Buyers (2) ...................            270             640           1,310           6,070           6,750
   Retail stores at end of fiscal year ......              2              10              14              43              64
</TABLE>

(1)  House names represent the number of customers who have made at least one
     purchase or have requested a catalog determined at the end of the
     applicable fiscal period. The numbers presented include names purchased
     from Fulcrum, but are net of duplicate names based on management estimates.

(2)  Buyers represent the number of customers who have made at least one
     purchase determined at the end of the applicable fiscal period. The numbers
     presented include names purchased from Fulcrum, but are net of duplicate
     names based on management estimates.

                                       15
<PAGE>

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

         THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION
WITH "ITEM 6--SELECTED FINANCIAl DATA" AND OUR CONSOLIDATED FINANCIAL STATEMENTS
AND NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT. EXCEPT FOR THE HISTORICAL
INFORMATION PRESENTED, THE DISCUSSION IN THIS REPORT CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES, SUCH AS STATEMENTS OF OUR
PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS. THE CAUTIONARY STATEMENTS MADE
IN THIS REPORT SHOULD BE READ AS BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING
STATEMENTS WHEREVER THEY APPEAR IN THIS REPORT. OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE DISCUSSED HERE. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO
THESE DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED BELOW AND
UNDER "ITEM 1--BUSINESS--RISK FACTORS" AS WELL AS THOSE DISCUSSED ELSEWHERE IN
THIS REPORT.

OVERVIEW

     Through our catalogs, retail stores and Web sites, we are a leading
marketer of casual apparel, accessories, soccer merchandise and Internet content
and community services to young men and women between the ages of 10 and 24, an
age group known as "Generation Y."

     Through our dELiA*s catalog, Web site, full-priced stores and discount
outlet stores, we are a leading marketer of casual apparel, related accessories,
home furnishings and cosmetics to Generation Y girls and young women. Our new
full-priced dELiA*s retail concept was launched with our first premiere store
opening in February 2000 and expanded to 17 stores by January 29, 2000. Through
our TSI SOCCER catalog, retail stores and Web site, we are a leading marketer of
specialty soccer merchandise to Generation Y boys and girls. Our other catalogs
with related Web sites include DROOG, an apparel and accessories title that
targets Generation Y young men, and STORYBOOK HEIRLOOMS, which primarily targets
girls ages 4 to 11 and their mothers with fashionable, upscale special occasion
outfits, casual apparel and accessories. During fiscal 1999, we also tested DOT
DOT DASH, another pre-teen apparel catalog and Web site, but suspended
publication to focus our resources . In addition, we targeted young men and
women with our Screeem! and Jean Country retail stores, all of which willl soon
have been converted to dELiA*s full-priced stores or closed.

     On April 14, 1999, we completed an initial public offering of 28% of the
common stock of iTurf, our Generation Y Internet subsidiary which currently
consists of our www.iTurf.com, www.gURL.com, www.OnTap.com, www.theSpark.com and
www.SparkNotes.com content and community Web sites as well as our
www.dELiAs.cOm, www.TSISoccer.com, www.discountdomain.com, www.Droog.com and
www.StorybookHeirlooms.com e-commerce sites. iTurf used $17.7 million of the
proceeds to purchase 551,046 shares of our common stock from us. At January 29,
2000, as a result of several transactions described herein, our ownership of
iTurf has declined to approximately 60% of value.

         On September 1, 1999, iTurf acquired T@ponline.com, Inc. As a result of
the transaction, Taponline.com became a wholly-owned subsidiary of iTurf and was
renamed OnTap.com Inc. The merger consideration consisted of 1,586,996 shares of
iTurf's Class A common stock.


     RESTRUCTURING During fiscal 1999, we recorded a charge of approximately
$24.2 million in connection with our restructuring plan to exit our Screeem! and
Jean Country retail operations. The charge is comprised of the following:
     -   $19.4 million for the write-off of the remaining unamortized balance of
         goodwill and other intangibles relating to our acquisition of the
         Screeem! and Jean Country retail operations;


                                       16
<PAGE>

     -   $3.6 million for the shut-down of certain retail stores of which
         $2.3 million represented the write-off of assets that would no
         longer be used and $1.3 million, primarily relating to future lease
         costs, was accrued;;
     -   $700,000 for the elimination of approximately 50 jobs at the Screeem!
         corporate office and the store locations to be closed, resulting in
         employee severance costs; and
     -   $500,000 for the liquidation of inventory carried at stores to be
         converted or closed (reflected in cost of sales).

     The total charge of $24.2 million includes $23.7 million that is included
in operating expenses as a restructuring charge and $500,000 included as cost of
sales.

     During fiscal 1999, we incurred approximately $200,000 for costs relating
to store shut-down, $300,000 for inventory liquidation and $100,000 for employee
severance. We expect the $1.7 million that remains accrued at January 29, 2000
for store shut-down and employee severance costs and the $200,000 that remains
as an offset to inventory to be incurred in early fiscal 2000.

     CAPITAL INVESTMENTS. During fiscal 1999 and into fiscal 2000, we have made
and continue to make significant capital expenditures for store buildout in
connection with our new dELiA*s retail concept and expansion of other retail
concepts.

     In addition, in order to support our direct marketing and Internet
operations, we have made and continue to make significant capital expenditures
for telephone and management information systems and have hired and maintained
an in-house workforce of teleservice representatives.

     We have made, and expect to continue to make, significant capital
expenditures to build infrastructure, including high-performance sophisticated
retail management systems, to support the additional sales volume expected as a
result of expected growth in our various businesses.

     RISKS. Growth in our revenue base and further penetration of our target
market may negatively affect our levels of percentage annual growth in net sales
and operating income. In addition, when we increase the number of catalogs we
mail, new customers respond at lower rates than our existing customers have
historically responded. We have also observed that when customers receive
multiple editions of catalogs within the same fiscal quarter, aggregate response
rates have declined.

     A variety of factors affects our comparable store sales, including, among
others, fashion trends, the general retail sales environment, our ability to
efficiently source and distribute products, changes in our merchandise mix and
our ability to execute our business strategy efficiently. Comparable store sales
may fluctuate significantly as we roll out new retail concepts and enter new
markets. In addition, our ability to expand our retail business may be limited
by our ability to locate and obtain acceptable store sites and lease terms or
renew existing leases.

     Our plans to expand both retail and catalog operations depend on obtaining
additional capital. There can be no assurance that the company will be able to
raise capital as it grows. While we have invested in infrastructure to support
substantial growth, in the event our expansion plans are delayed or curtailed,
we may not develop a volume of business that will allow us to recognize fully
the efficiencies we had planned to achieve from such investments.

     Our business generally depends on our ability to anticipate the frequently
changing fashion tastes of our customers and to offer merchandise that appeals
to their preferences on a timely and affordable basis. If we misjudge our
merchandise selection, our image with our customers could be materially
adversely affected.


                                       17
<PAGE>

     We believe that the continued growth of our Internet segment will depend in
large part on our ability to increase awareness of our brand names, to provide
our customers with superior Internet community and e-commerce experiences and to
continue to enhance our systems and technology to support increased traffic to
our Web sites. Accordingly, we intend to maintain a high level of marketing and
promotional expenditures and to invest heavily to develop our Web sites,
technology and operating infrastructure. Slower revenue growth than we
anticipate or operating expenses that exceed our expectations could have a
material adverse effect on our business.

     Sales made through iTurf instead of through our other channels produce
lower earnings for dELiA*s after accounting for promotional pricing and
minority interest. In addition, cash provided by such sales is restricted to
use by iTurf and is not available for use in our other businesses. The rapid
rate of migration has had a material adverse effect on the financial position
and results of operations of dELiA*s non-Internet operations.


RESULTS OF OPERATIONS

     On December 10, 1997, we acquired TSI Soccer Corporation in a transaction
accounted for as a pooling of interests. Accordingly, our historical results
have been restated to include the historical operations of TSI.

     The following table sets forth, for the periods indicated, the percentage
relationship of items from our income statement to net sales. Any trends
reflected by the following table may not be indicative of future results.

<TABLE>
<CAPTION>

                                                                        PERCENTAGE OF NET SALES
                                                       ---------------------------------------------------------
                                                       FISCAL YEAR 1997     FISCAL YEAR 1998    FISCAL YEAR 1999
                                                             ENDED               ENDED               ENDED
                                                       JANUARY 31, 1998     JANUARY 31, 1999    JANUARY 29, 2000
                                                       ----------------     ----------------    ----------------
<S>                                                    <C>                  <C>                 <C>
Net sales.........................................            100.0%               100.0%              100.0%
Cost of sales.....................................             51.1                 49.5                56.7
                                                               ----                 ----                ----
Gross profit......................................             48.9                 50.5                43.3
Selling, general, and administrative expenses                  42.4                 45.3                65.2
Merger related costs..............................              1.4                  --                  --
Restructuring charge..............................              --                   --                 12.4
Gain on subsidiary IPO and sale of subsidiary stock             --                   --                (40.9)
Minority interest.................................                                                      (2.6)
Interest and other income, net....................             (1.0)                (0.6)               (1.3)
                                                               ----                 ----                ----
Income before income taxes........................              6.1                  5.8                10.5
Provision (benefit) for income taxes..............              2.2                  2.1                 4.8
                                                               ----                 ----                ----
Net income........................................              3.9%                 3.7%                5.7%
                                                               ====                 ====                ====
</TABLE>

COMPARISON OF FISCAL YEARS 1998 AND 1999


                                       18
<PAGE>

     NET SALES. Net sales increased approximately $32.4 million, from $158.4
million in fiscal 1998 to $190.8 million in fiscal 1999. The increase is a
result of new stores and catalog titles as well as growth in Internet sales,
some of which represents a shift from our catalog channel.

     GROSS MARGIN. Gross margin decreased from 50.5% in fiscal 1998 to 43.3% in
fiscal 1999. The decrease in gross margin was primarily due to greater markdowns
and increased promotions at dELiA*s and iTurf and liquidations at our Screeem!
stores in connection with our restructuring as well as increased freight
costs.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased approximately $52.6 million, from $71.7
million in fiscal 1998 to $124.3 million in fiscal 1999. Selling, general and
administrative expenses increased as a percentage of net sales from 45.3% in
fiscal 1998 to 65.2% in fiscal 1999. The increase in selling, general and
administrative expenses was primarily due to expansion of our Internet and
retail businesses as well as spending on greater catalog circulation. In
addition, lower dELiA*s catalog sales were not accompanied by a direct
reduction in expenses.

     RESTRUCTURING CHARGE. During fiscal 1999, we recorded a charge of
approximately $24.2 million in connection with our restructuring plan to close
our Screeem! and Jean Country retail operations. This charge includes
approximately $500,000 related to inventory and recorded as cost of sales.

     GAIN ON SUBSIDIARY IPO AND SALE OF SUBSIDIARY STOCK. In connection with the
April 1999 iTurf initial public offering, we recognized a one-time pre-tax gain
of approximately $70.1 million. During the fourth quarter of fiscal 1999, we
recorded an additional $8.0 million pre-tax gain on our sale of 1,075,000 shares
of iTurf stock for cash.

     MINORITY INTEREST. Since the iTurf initial public offering in fiscal 1999,
we reflect the outside ownership of that subsidiary as minority interest. As of
January 29, 2000, we owned 60% of the value and controlled 90% of the vote of
iTurf.

     INTEREST AND OTHER INCOME, NET. The significant increase in interest and
other income from $1.0 million in fiscal 1998 to $2.4 million in fiscal 1999
relates to the purchase of marketable securities with the proceeds of the iTurf
initial public offering offset, in part, by increased interest expense due to
additional borrowings.

     INCOME TAXES. The increase in our effective income tax rate from 37% of
pre-tax income in fiscal 1998 to 45% of pre-tax income in fiscal 1999 relates
primarily to the iTurf losses. Although iTurf is consolidated in the dELiA*s
Inc. financial statements for reporting purposes, iTurf is no longer a part
of our consolidated group for tax purposes and the deferred tax assets
arising from its net operating loss are fully reserved.

COMPARISON OF FISCAL YEARS 1997 AND 1998

     NET SALES. Net sales increased approximately $45.4 million, from $113.0
million in fiscal 1997 to $158.4 million in fiscal 1998. The increase in net
sales was primarily due to our fiscal 1998 acquisitions and an increase in the
number of catalogs mailed offset in part by reduced response rates to our
catalogs.

     GROSS MARGIN. Gross margin increased from 48.9% in fiscal 1997 to 50.5% in
fiscal 1998. The increase in gross margin was primarily due to a larger
proportion of higher-margin apparel sales compared to relatively lower-margin
soccer merchandise sales. Gross margin also increased due to improved sourcing
of merchandise, including larger volume discounts from suppliers and a greater
proportion of private label products sourced directly from overseas contract
manufacturers.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased approximately $23.8 million, from $47.9
million in fiscal 1997 to $71.7 million in fiscal 1998. Selling, general and
administrative expenses increased as a percentage of net sales from 42.4% in
fiscal 1997 to 45.3% in fiscal 1998. The increase in selling, general and
administrative expenses was primarily due to greater marketing expenditures on
catalog circulation and greater spending on our corporate infrastructure,
including expenditures to support retail and Internet growth.


                                       19
<PAGE>

     MERGER RELATED COSTS. Merger related costs of $1.6 million were incurred in
fiscal 1997 in connection with the TSI acquisition and included professional
fees, costs related to consolidation of distribution facilities, the write-off
of property and equipment and cancellation of contracts.

     INTEREST AND OTHER INCOME, NET. The decrease in interest and other income,
net from $200,000 in fiscal 1997 to $1.0 million in fiscal 1998 primarily due to
our use of the net proceeds from our 1996 initial public offering and a
secondary public offering completed in 1997. These proceeds were previously
invested before being used for our 1998 acquisitions.


                                       20
<PAGE>

SELECTED QUARTERLY RESULTS OF OPERATIONS AND SEASONALITY

     The following table sets forth unaudited income statement data for the
eight quarters ended January 29, 2000, as well as the data expressed as
percentages of our total net sales for the periods indicated. The data have been
derived from unaudited consolidated financial statements that, in the opinion of
management, include all adjustments consisting only of normal recurring
adjustments necessary for fair presentation when read in conjunction with our
annual audited consolidated financial statements and notes thereto.

<TABLE>
<CAPTION>

                                       -------------------------------------------------------------------------------------------
                                                                     QUARTER OR THIRTEEN WEEKS ENDED
                                       -------------------------------------------------------------------------------------------
                                       APR. 30,  JULY 31,   OCT. 31,   JAN. 31,       MAY 1,     JULY 31,    OCT. 30,    JAN. 29,
                                         1998      1998       1998       1999          1999        1999        1999        2000
                                         ----      ----       ----       ----          ----        ----        ----        ----
                                                                (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                    <C>        <C>       <C>        <C>           <C>        <C>         <C>          <C>
Net sales..........................    $31,194    $26,451   $40,821    $59,898       $41,812    $33,375     $48,085      $67,500
Cost of sales......................     14,223     13,712    19,979     30,454        23,023     20,450      25,776       38,899
                                       -------    -------   -------    -------       -------    -------     -------      -------
Gross profit.......................     16,971     12,739    20,842     29,444        18,789     12,925      22,309       28,601
Selling, general and
     administrative expenses.......     14,092     13,499    19,691     24,429        23,750     23,908      32,395       44,286
Restructuring charge...............         --         --        --         --        22,907         --          --          761
Gain on subsidiary IPO and sale
     of subsidiary stock...........         --         --        --         --       (70,091)       --           --       (8,026)
Minority interest..................         --         --        --         --             8       (493)     (2,125)      (2,255)
Interest and other income, net            (341)      (300)     (126)      (195)         (140)    (1,027)       (703)        (559)
                                       -------    -------   -------    -------       -------    -------     -------      -------
Income (loss) before income taxes..      3,220       (460)    1,277      5,210        42,355     (9,463)     (7,258)      (5,606)
Provision (benefit) for income
     taxes *.......................      1,220       (317)      530      1,972        17,519     (3,399)     (1,257)      (3,793)
                                       -------    -------   -------    -------       -------    -------     -------      -------
Net income (loss)..................    $ 2,000    $  (143)  $   747    $ 3,238       $24,836    $(6,064)    $(6,001)     $(1,813)
                                       =======    =======   =======    =======       =======    =======     =======      =======
Per share data:
Basic net income (loss) per share..    $  0.15    $ (0.01)  $  0.05    $  0.23       $  1.75    $ (0.42)    $ (0.42)     $ (0.13)
                                       =======    =======   =======    =======       =======    =======     =======      =======
Diluted net income (loss) per
     share.........................    $  0.15    $ (0.01)  $  0.05    $  0.21       $  1.56    $ (0.42)    $ (0.42)     $ (0.13)
                                       =======    =======   =======    =======       =======    =======     =======      =======
Shares used in calculation of
     basic net income (loss) per
     share.........................     13,321     13,498    14,139     14,159        14,231     14,330      14,342      14,356
Shares used in calculation of
     diluted net income (loss)
     per share.....................     13,569     13,498    14,735     15,300        15,966     14,330      14,342      14,356


                                                                    PERCENTAGE OF TOTAL NET SALES
                                       -------------------------------------------------------------------------------------------
Net sales..........................      100.0%     100.0%    100.0%     100.0%        100.0%     100.0%      100.0%       100.0%
Cost of sales......................       45.6       51.8      49.0       50.8          55.0       61.3        53.6         57.6
                                       -------    -------   -------    -------       -------    -------     -------      -------
Gross profit.......................       54.4       48.2      51.0       49.2          45.0       38.7        46.4         42.4
Selling, general, administrative
     and merger related expenses...       45.2       51.0      48.2       40.8          56.8       71.6        67.4         65.6
Restructuring charge...............         --         --        --         --          54.8         --          --          1.1
Gain on subsidiary IPO and sale
     of subsidiary stock...........         --         --        --         --        (167.6)        --          --        (11.9)
Interest and other income, net.....       (1.1)      (1.1)     (0.3)      (0.3)         (0.3)      (3.1)       (1.5)        (0.8)
Minority interest..................         --         --        --         --           --        (1.5)       (4.4)        (3.3)
                                       -------    -------   -------    -------       -------    -------     -------      -------
Income (loss) before income taxes..       10.3       (1.7)      3.1        8.7         101.3      (28.3)      (15.1)       (8.3)
Provision (benefit) for income
     taxes.........................        3.9       (1.2)      1.3        3.3          41.9      (10.2)       (2.6)        (5.6)
                                       -------    -------   -------    -------       -------    -------     -------      -------

Net income (loss)..................        6.4%      (0.5)%     1.8%       5.4%         59.4%     (18.1)%     (12.5)%      (2.7)%
                                       =======    =======   =======    =======       =======    =======     =======      =======

</TABLE>


* The income tax provision recorded in the fourth quarter of fiscal 1999
includes significant adjustments to estimates booked earlier in the fiscal year.

     We experience seasonal fluctuations in our merchandise sales and results of
operations. We expect our sales and operating results generally to be lower in
the first half and higher in the second half of each fiscal year.
Our quarterly results may fluctuate as a result of numerous factors, including

    -   the timing, quantity and cost of catalog and electronic mailings;
    -   the timing of new store openings;
    -   the timing of sale circulars and liquidations;
    -   the timing of merchandise deliveries;


                                       21
<PAGE>

    -   market acceptance of our merchandise, including new merchandise
        categories or products introduced, and response rates to catalog
        mailings;
    -   the mix of products sold;
    -   the timing of inventory writedowns;
    -   the incurrence of other operating costs; and
    -   factors beyond our control, such as general economic conditions, changes
        in consumer spending patterns; actions of competitors and weather and
        other factors affecting retail stores.


     Accordingly, the results of operations in any quarter will not necessarily
be indicative of the results that may be achieved for a full fiscal year or any
future quarter.


LIQUIDITY AND CAPITAL RESOURCES

     On April 28, 2000, we entered into the Amended and Restated Credit
Agreement with Congress Financial Corporation. The Agreement amends and
restates the terms of our credit facility with First Union National Bank, the
parent company of Congress. The Congress credit facility consists of a
revolving line of credit permitting us to borrow up to $25 million and
provides for the issuance of documentary and standby letters of credit up to
$10 million. Our obligations under the Congress credit agreement are secured
by a lien on substantially all of our assets, except specified real property,
the Class B common stock of iTurf that we own and the assets of iTurf and its
subsidiaries. (See below for restrictions on distribution of iTurf shares.) As
with the First Union Credit facility, the availability of the revolving line
of credit is limited to specified percentages of the value of our eligible
inventory determined under the credit agreement, which percentages are
subject to reductions and reserves in certain circumstances. However, the
Congress credit facility provides us with a higher initial borrowing base
than that provided by the First Union facility. At our option, borrowings
under this facility bear interest at First Union National Bank's prime rate
plus 25 basis points or at LIBOR plus 225 basis points. The credit agreement
contains covenants and default provisions customary for credit facilities of
this nature, including limitations on our payment of dividends and sales of
assets. A fee of 0.375% per year is assessed monthly on the unused portion of
the line of credit. The Congress credit agreement contains controls on our
cash management and certain limits on our ability to distribute assets. In
particular, we will be prohibited from distributing any iTurf shares to our
shareholders prior to November 1, 2000, and may be similarly restricted
thereafter if we have not met, among other things, minimum borrowing capacity
availability requirements.

     There were no funds borrowed under our credit agreements prior to fiscal
1999. During fiscal 1999, we borrowed $9 million under the First Union credit
facility and repaid $6 million by January 29, 2000.

     On August 6, 1999, we purchased for $6.2 million an approximately 400,000
square foot distribution facility in Hanover, Pennsylvania, the majority of
which space we were previously leasing. We borrowed $5.3 million from Allfirst
Bank in the form of a mortgage loan on the property to pay for $5.0 million of
the purchase price and $300,000 of planned capital improvements. We are subject
to certain covenants under the loan agreement, including a covenant to maintain
a fixed charge coverage ratio. Interest on the


                                       22
<PAGE>

loan is calculated using a variable LIBOR-based interest rate. On August 10,
1999 we entered into an interest-rate swap agreement with Allfirst Bank under
which we effectively converted the mortgage to a fixed-rate loan with an
interest rate of approximately 8.78%. We do not expect to meet the fixed
charge coverage ratio covenant for the first quarter of fiscal 2000. We have
received a waiver of such covenant through the first quarter of fiscal 2001.

     Cash used by operations was $36.5 million in fiscal 1999 compared to
$9.2 million in fiscal 1998. This change primarily relates to our increased
operating losses.

     In fiscal 1999, investing activities used cash of $65.0 million, which
primarily relates to the purchase of marketable securities with the iTurf
offering proceeds and capital expenditures. In fiscal 1998, investing
activities, primarily the sale of marketable securities, provided $15.6 million.
During fiscal 2000, we expect to make capital expenditures in excess of $9.0
million for the expansion of our retail concepts, investment in information
system projects at iTurf and other subsidiaries as well as leasehold
improvements and other equipment relating to new corporate office leases. We
expect to fund these capital expenditures through equipment leases, the sale of
shares of iTurf common stock currently held by dELiA*s Inc., our credit facility
and cash from operations.

     We believe that our cash on hand and cash generated by operations, together
with the funds available under our credit agreement, will be sufficient to meet
our capital and operating requirements through fiscal 2000. Our future capital
requirements depend on numerous factors, including, without limitation, the
success of our marketing, sales and distribution efforts. Additional funds, if
required, may not be available to us on favorable terms or at all.

     In addition to capital expenditures, iTurf expects to spend significant
amounts for marketing and other alliances. In May 1999, iTurf entered into a
strategic alliance agreement with America Online, Inc. under which we are
committed to future cash payments of approximately $3.1 million. In August 1999,
iTurf entered into a strategic marketing alliance with Microsoft Corporation
under which we have committed to pay Microsoft $2.6 million in fiscal 2000. In
connection with the September 1999 Taponline transaction, iTurf agreed to
promote our network of sites through MarketSource's offline marketing channels
for future payments of $5.0 million

     Cash provided by financing activities of $115.5 million in fiscal 1999
relate primarily to the iTurf initial public offering and borrowings under our
credit facility; financing activities were not significant in fiscal 1998.

     RECENT ACCOUNTING PRONOUNCEMENTS - In June 1999, the Financial Accounting
Standards Board approved deferral of Statement No. 133 - Accounting for
Derivative Instruments and Hedging Activities, which we are required to adopt in
fiscal year beginning February 2001. SFAS No. 133 requires that all derivative
instruments be recorded on the balance sheet at fair value. We do not expect our
adoption of SFAS No. 133 to have a material impact on our consolidated position,
results of operations and cash flows.


YEAR 2000 COMPLIANCE

         To date, no Year 2000 related events had occurred that materially
affected either the Company's operations or its financial statements. The total
cost of the Company's Year 2000 compliance program was less than $200,000.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.


                                       23
<PAGE>

     We maintain the majority of our excess funds in marketable securities.
These financial instruments are subject to interest rate risk and will decline
in value if interest rates increase. We do not believe that a change of 100
basis points in interest rates would have a material effect on our financial
condition.

     Our outstanding long-term debt as of January 29, 2000 when offset by our
interest rate hedge bears interest at a fixed rate; therefore, our results of
operations would only be affected by interest rate changes to the extent that
fluctuating rate loans are outstanding under our credit facility. As of January
29, 2000, we had $3 million outstanding under such facility. We do not believe
that a change of 100 basis points in interest rates would have a material effect
on our financial condition.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     See Item 14 of Part IV of this report.


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

     On May 14, 1999, the audit committee of our board of directors approved the
dismissal of Deloitte & Touche LLP, the principal accountant previously engaged
to audit our financial statements. Neither of the reports provided by Deloitte &
Touche LLP for the past two years contained an adverse opinion or a disclaimer
of opinion, or was qualified or modified as to uncertainty, audit scope, or
accounting principles. During our two most recent fiscal years and the
subsequent period, there were no disagreements with the former accountant on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreement, if not resolved to the
satisfaction of the former accountant, would have caused it to make reference to
the subject matter of the disagreement in connection with its report.

     On May 14, 1999, the audit committee approved the engagement of
Ernst & Young LLP as the principal accountant to audit our financial statements.
During our two most recent fiscal years and the subsequent period prior to
such appointment, we had not consulted the newly engaged accountant regarding
either the application of accounting principles to a specified transaction or
the type of audit opinion that might be rendered on our financial statements,
nor on any matter that was either the subject of a disagreement or a
reportable event.

                                       24
<PAGE>


                                    PART III


     The information required by Part III (Items 10 through 13) is incorporated
by reference to the captions "Beneficial Ownership of Voting Securities,"
"Election of Directors," "Management" and "Certain Transactions" in our
definitive Proxy Statement to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A within 120 days after the end of our
fiscal year covered by this report.


                                     PART IV

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

     (a) See Index to Financial Statements on page F-1.

         All schedules are omitted either because they are not applicable or
         the required information is disclosed in the consolidated financial
         statements or notes thereto.

     (b) We filed the following reports on Form 8-K during fiscal 1999:

                  (i)   current report on Form 8-K, dated May 17, 1999,
                        reporting Item 4 (Changes in Certifying Accountant) and
                        Item 8 (Change in Fiscal Year)

                  (ii)  current report on Form 8-K, dated August 12, 1999,
                        reporting Item 5. This report contained information
                        iTurf's agreement to acquire T@ponline.com, Inc.

                  (iii) current report on Form 8-K, dated September 7, 1999,
                        reporting Item 5 and Item 7 Exhibits. This report
                        contained information about iTurf's acquisition
                        T@ponline.com, Inc.

                  (iv)  current report on Form 8-K, dated November 17, 1999,
                        reporting Item 5. This report contained information
                        about our agreement to sell iTurf common stock to
                        Kistler Joint Venture

                  (v)   current report on Form 8-K, dated December 7, 1999,
                        reporting Item 2. This report contained information
                        about our agreement to sell iTurf common stock to
                        Deutsche Bank Securities

     (c) See Exhibit Index immediately following Signature Page.


                                       25
<PAGE>

                         dELiA*s INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                                                               PAGE
<S>                                                                                                            <C>
REPORTS OF INDEPENDENT AUDITORS.........................................................................          F-2

FINANCIAL STATEMENTS:

   Consolidated Balance Sheets as of January 31, 1999 and January 29, 2000..............................          F-4

   Consolidated Statements of Income for the fiscal years ended January 31, 1998, January 31,
     1999 and January 29, 2000..........................................................................          F-5

   Consolidated Statements of Stockholders' Equity for the fiscal years ended January 31, 1998,
     January 31, 1999 and January 29, 2000.............................................................           F-6

   Consolidated Statements of Cash Flows for the fiscal years ended January 31, 1998,
     January 31, 1999 and January 29, 2000.............................................................           F-7

   Notes to Consolidated Financial Statements..........................................................           F-8
</TABLE>


                                      F-1
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Stockholders of dELiA*s Inc.


We have audited the accompanying consolidated balance sheet of dELiA*s Inc. and
subsidiaries (the "Company") as of January 29, 2000 and the related consolidated
statements of income, stockholders' equity, and cash flows for the fiscal year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
dELiA*s Inc. and subsidiaries as of January 29, 2000 and the consolidated
results of the Company's operations and cash flows for the fiscal year then
ended in conformity with accounting principles generally accepted in the
United States.



                                                           ERNST & YOUNG LLP
New York, New York
March 29, 2000,
(except for Notes 5 and 15,
as to which the date is April 28, 2000)


                                      F-2
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of dELiA*s Inc.
New York, New York

We have audited the consolidated balance sheet of dELiA*s Inc. and subsidiaries
(the "Company") as of January 31, 1999 and the related consolidated statements
of income, stockholders' equity, and cash flows for each of the two fiscal years
in the period ended January 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements based on our audits. The consolidated
financial statements give retroactive effect to the merger between a
wholly-owned subsidiary of the Company and TSI Soccer Corporation ("TSI"), which
has been accounted for as a pooling of interests as described in Note 3 to the
consolidated financial statements.

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, based on our audits, the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of dELiA*s Inc. and subsidiaries as of January 31, 1999, and the
results of their operations and their cash flows for each of the two fiscal
years in the period ended January 31, 1999 in conformity with accounting
principles generally accepted in the United States of America.




DELOITTE & TOUCHE LLP
March 30, 1999
(April 14, 1999 as to Note 1)
New York, New York


                                      F-3
<PAGE>

                          dELiA*s INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      JANUARY 31, 1999 AND JANUARY 29, 2000
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                                    JANUARY 31, 1999   JANUARY 29, 2000
<S>                                                                                 <C>                <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents ...................................................          $  10,981          $  24,985
   Short-term investments ......................................................                  -             32,893
   Merchandise inventories .....................................................             21,232             28,322
   Prepaid expenses and other current assets ...................................             11,237             15,014
   Deferred tax assets .........................................................                115             12,063
                                                                                          ---------          ---------
         Total current assets ..................................................             43,565            113,277

PROPERTY AND EQUIPMENT - Net ...................................................             12,542             35,483

LONG-TERM INVESTMENTS ..........................................................                  -             11,024

GOODWILL AND OTHER ASSETS ......................................................             26,037             24,256
                                                                                          ---------          ---------

TOTAL ASSETS ...................................................................          $  82,144          $ 184,040
                                                                                          =========          =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable and accrued expenses .......................................             14,924             21,643
   Liabilities due to customers ................................................              1,763              2,278
   Accrued restructuring .......................................................                  -              1,685
   Bank loan payable ...........................................................                  -              3,000
   Other current liabilities ...................................................              1,398                719
                                                                                          ---------          ---------
         Total current liabilities .............................................             18,085             29,325

LONG-TERM DEBT AND CAPITAL LEASES ..............................................                  -              6,756

DEFERRED TAX LIABILITIES .......................................................                  -             23,901

OTHER LONG-TERM LIABILITIES ....................................................                452                403

MINORITY INTEREST ..............................................................                  -             40,734

STOCKHOLDERS' EQUITY
   Preferred stock, par value $.01 per share; Authorized - 1,000,000 shares;
     Issued - none .............................................................                  -                  -
   Common stock, par value $.01 per share; Authorized - 50,000,000 shares;
     Issued - 14,185,425 and 14,914,472 shares, respectively ...................                142                149
   Additional paid-in capital ..................................................             54,133             80,216
   Less common stock in treasury, at cost (551,046 shares at January 29, 2000)..                  -            (17,734)
   Retained earnings ...........................................................              9,332             20,290
                                                                                          ---------          ---------
         Total stockholders' equity ............................................             63,607             82,921
                                                                                          ---------          ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .....................................          $  82,144          $ 184,040
                                                                                          =========          =========
</TABLE>

                 See notes to consolidated financial statements


                                      F-4
<PAGE>

                          dELiA*s INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
   FISCAL YEARS ENDED JANUARY 31, 1998, JANUARY 31, 1999 AND JANUARY 29, 2000
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                                            Fiscal
                                                                       ----------------------------------------------
                                                                           1997             1998            1999
                                                                       -------------    -----------     -------------
<S>                                                                    <C>              <C>             <C>
NET SALES ................................................             $     113,049    $   158,364     $    190,772

COST OF SALES ............................................                    57,811         78,368          108,148
                                                                       -------------    -----------     ------------
GROSS PROFIT .............................................                    55,238         79,996           82,624

SELLING, GENERAL AND ADMINISTRATIVE
   EXPENSES ..............................................                    47,943         71,711          124,339

MERGER RELATED COSTS (Note 3) ............................                     1,614              -                -

RESTRUCTURING CHARGE (Note 14) ...........................                         -              -           23,668

GAIN ON SUBSIDIARY IPO AND SALE OF SUBSIDIARY STOCK ......                         -              -          (78,117)

MINORITY INTEREST ........................................                         -              -           (4,865)

INTEREST AND OTHER INCOME, NET ...........................                    (1,201)          (962)          (2,429)
                                                                       --------------   ------------    -------------
INCOME BEFORE PROVISION FOR INCOME TAXES .................                     6,882          9,247           20,028

PROVISION FOR INCOME TAXES ...............................                     2,456          3,405            9,070
                                                                       -------------    -----------     ------------

NET INCOME ...............................................             $       4,426    $     5,842     $     10,958
                                                                       =============    ===========     ============


BASIC NET INCOME PER SHARE ...............................             $        0.34    $      0.42     $       0.77
                                                                       =============    ===========     ============


DILUTED NET INCOME PER SHARE .............................             $        0.34    $      0.41     $       0.71
                                                                       =============    ===========     ============
</TABLE>



                 See notes to consolidated financial statements.


                                      F-5
<PAGE>

                          dELiA*s INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
   FISCAL YEARS ENDED JANUARY 31, 1998, JANUARY 31, 1999 AND JANUARY 29, 2000
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>


                                                Common Stock      Additional                                     Total
                                               ---------------      Paid-In     Retained  Treasury           Stockholders'
                                               Shares   Amount      Capital     Earnings   Stock       Other    Equity
                                               ---------------      -------     --------   -----       -----    ------
<S>                                           <C>        <C>      <C>          <C>        <C>      <C>       <C>
BALANCE, JANUARY 31, 1997 .................   12,315,127 $  124   $  20,886    $   211         -   $   (197) $  21,024

Cancellation of common stock ..............      (49,523)    (1)         (4)         -         -          5          -
Net proceeds from issuance of common
   stock in public offering ...............    1,000,000     10      19,415          -         -          -     19,425
Issuance of common stock (Note 7) .........       35,300      -         638          -         -          -        638
Payments to statutory dissenters (Note 3) .            -      -        (730)         -         -          -       (730)
Payment of note receivable from
   stockholder ............................            -      -           -          -         -         50         50
Issuance of common stock in connection
   with acquisition (Note 3) ..............        5,000      -         108          -         -          -        108
Exercise of stock options .................        2,250      -          25          -         -          -         25
Issuance of common stock in satisfaction
   of Stock Appreciation Rights (Note 3) ..       10,760      -         233          -         -          -        233
Deferred compensation expense (Note 7) ....            -      -           -          -         -         92         92
Net income ................................            -      -           -      4,426         -          -      4,426
Adjustment to conform fiscal year
   of pooled company (Note 3) .............            -      -           -     (1,147)        -          -     (1,147)
                                              ----------  -----   ---------   -------- ---------   --------  ---------

BALANCE, JANUARY 31, 1998 .................   13,318,914    133      40,571      3,490         -        (50)    44,144

Deferred compensation expense (Note 7) ....            -      -           -          -         -         50         50
Issuance of common stock in connection
   with acquisitions (Note 3) .............      817,501      8      13,242          -         -          -     13,250
Exercise of stock options .................       49,010      1         320          -         -          -        321
Net income ................................            -      -           -      5,842         -          -      5,842
                                              ----------  -----   ---------   -------- ---------   --------  ---------

BALANCE, JANUARY 31, 1999 .................   14,185,425    142      54,133      9,332         -          -     63,607

Issuance of common stock in connection
   with acquisitions (Note 3) .............        5,000      -       1,396          -         -          -      1,396
Issuance of iTurf common stock for
   acquisition (Note 3) ...................            -      -       6,919          -         -          -      6,919
Cancellation of common stock (Note 3) .....      (33,784)     -        (608)         -         -          -       (608)
iTurf purchase of common stock (Note 1) ...      551,046      5      17,729          -  $(17,734)         -          -
Exercise of stock options .................      206,785      2       1,199          -         -          -      1,201
Tax effect of equity transactions .........            -      -        (552)         -         -          -       (552)
Net income ................................            -      -           -     10,958         -          -     10,958
                                              ----------  -----   ---------   -------- ---------   --------  ---------

BALANCE, JANUARY 29, 2000 .................   14,914,472 $  149  $  80,216     $20,290  $(17,734) $           $ 82,921
                                             =========== ======  ==========  ========= =========  =========  =========
</TABLE>



                 See notes to consolidated financial statements.


                                      F-6
<PAGE>

                          dELiA*s INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
   FISCAL YEARS ENDED JANUARY 31, 1998, JANUARY 31, 1999 AND JANUARY 29, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                      Fiscal
                                                              -------------------------------------------------------
                                                                    1997               1998                1999
                                                              ---------------     ---------------    ----------------
<S>                                                           <C>                 <C>                <C>
OPERATING ACTIVITIES:
   Net income ...............................................   $       4,426     $         5,842    $         10,958
   Adjustment to conform fiscal year of pooled company                 (1,147)                  -                   -
   Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
     Depreciation ...........................................             656               2,128               4,133
     Amortization of intangibles ............................             201                 549               2,270
     Restructuring charge ...................................               -                   -              24,168
     Gain on subsidiary IPO and sale of subsidiary stock ....               -                   -             (78,117)
     Minority interest ......................................               -                   -              (4,865)
     Deferred taxes .........................................            (514)                985              11,953
     Amortization of investments ............................             204                 160                (473)
     Compensation expense related to restricted stock and
       stock appreciation rights ............................             325                  50                   -
     Loss on disposition of fixed assets ....................              85                   -                   -
   Changes in operating assets and liabilities:
       Merchandise inventories ..............................          (4,228)             (6,888)             (7,590)
       Prepaid expenses and other current assets ............          (2,940)             (7,176)             (3,888)
       Other assets .........................................            (130)             (1,007)                (71)
       Current liabilities ..................................           9,317              (4,023)              5,111
       Long-term liabilities ................................             296                 142                 (49)
                                                                -------------     ---------------    -----------------
Net cash provided by (used in) operating activities .........           6,551              (9,238)            (36,460)
INVESTING ACTIVITIES:
   Capital expenditures .....................................          (4,839)             (6,158)            (21,009)
   Purchase of investment securities:
     Held-to-maturity .......................................         (62,782)                  -             (73,952)
     Available-for-sale .....................................         (49,501)            (46,513)                  -
   Other investments ........................................              -                    -              (1,000)
   Proceeds from maturity or sale of investment securities:
     Held-to-maturity .......................................          32,555              30,024              31,508
     Available-for-sale .....................................          42,450              53,404                   -
   Acquisition of businesses, net of cash acquired ..........            (843)            (15,203)               (547)
                                                                -------------     ---------------    ----------------
Net cash provided by (used in) investing activities .........         (42,960)             15,554             (65,000)
FINANCING ACTIVITIES:
   Net proceeds from issuance of dELiA*s common stock .......          20,063                   -                   -
   Net proceeds from issuance of subsidiary common stock ....               -                   -              97,496
   Disposition of subsidiary stock ..........................               -                   -              14,090
   Exercise of stock options ................................              23                 321               1,201
   Borrowings (repayments) under line of credit agreement ...            (503)                  -               3,000
   Principal payments on long-term debt and capital
     lease obligations ......................................            (406)               (141)               (323)
                                                                -------------     ---------------    ----------------
Net cash provided by financing activities ...................          19,177                 180             115,464
                                                                -------------     ---------------    ----------------

INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS ..............................................         (17,232)              6,496              14,004
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ..............          21,717               4,485              10,981
                                                                -------------     ---------------    ----------------
CASH AND CASH EQUIVALENTS, END OF PERIOD ....................         $ 4,485        $     10,981         $    24,985
                                                                =============     ===============    ================

SUPPLEMENTARY CASH FLOW INFORMATION:
   Income taxes paid ........................................   $       1,738     $         3,328    $             80
                                                                =============     ===============    ================
   Interest paid ............................................   $         255     $            13    $            615
                                                                =============     ===============    ================
</TABLE>

NON-CASH INVESTING AND FINANCING ACTIVITIES - Issuance of stock for acquisitions
- See Note 3.
                 See notes to consolidated financial statements.


                                      F-7
<PAGE>

                          dELiA*s INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                JANUARY 29, 2000

1. BUSINESS AND BASIS OF PRESENTATION

dELiA*s Inc., through our catalogs, retail stores and Web sites, is a leading
marketer of casual apparel, accessories and soccer merchandise to young men and
women between the ages of 10 and 24, an age group known as "Generation Y."

On April 14, 1999, we completed an initial public offering of approximately 28%
of the common stock of iTurf Inc., our Internet-focused subsidiary. iTurf used
$17.7 million of the total $97.4 million in net offering proceeds to purchase
from us 551,046 shares of our common stock, which we treat as treasury stock in
consolidation. In connection with the offering, we recognized a pre-tax gain of
approximately $70.0 million. During the fourth quarter of fiscal 1999, we sold
an additional 1,075,000 shares of iTurf stock for cash and recorded a related
gain of $8.0 million. As a result of these transactions and iTurf's acquisition
of T@ponline.com for stock (see Note 3), we owned 90% of the vote and 60% of the
value of iTurf as of January 29, 2000. Subsequently, our interest in iTurf has
been reduced as a result of iTurf's February 2000 acquisition of theSpark.com.
(See Note 15.)


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FISCAL YEAR - Any reference in this report to a particular fiscal year after
1998 is to the year ended on the Saturday closest to January 31 following the
corresponding calendar year. For example, "fiscal 1999" means the period from
February 1, 1999 to January 29, 2000. Any reference in this report to a
particular fiscal year before 1999 is to the year ended January 31 following the
corresponding calendar year. For example, "fiscal 1998" means the period from
February 1, 1998 to January 31, 1999.

PRINCIPLES OF CONSOLIDATION - Our condensed consolidated financial statements
include the accounts of dELiA*s and subsidiaries, all of which, except iTurf,
were wholly owned for all periods presented. The accounts of iTurf are included
in the consolidated financial statements while the outside ownership of iTurf is
reflected as minority interest on the balance sheet and income statement. All
significant intercompany balances and transactions have been eliminated in
consolidation.


                                      F-8
<PAGE>

                          dELiA*s INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION - Revenue is recognized when merchandise is shipped to
customers or at the point of sale for retail sales. iTurf's advertising and
sponsorship revenue is recognized at either the ratio of impressions delivered
to total guaranteed impressions or on a straight-line basis over the term of the
contract provided that iTurf does not have any significant obligations
remaining. Sales of iTurf's advertising inventory by third parties under
revenue-sharing arrangements are recorded at the amounts reported by the
revenue-sharing partners, which are net of agreed-upon commission fees, when the
advertising has been provided. When iTurf licenses the use of our brands,
content or other intangible assets to third parties for specific projects,
rather than for a period of time, licensing revenue is recognized upon
fulfillment of all material contractual obligations. Subscription revenue
related to DiscountDomain.com, iTurf's membership based discount shopping
service, is billed monthly, subsequent to the earlier of a customer's first
purchase or one month from the date of initial subscription. Subscriptions are
cancelable at any time and revenue is recognized on a monthly basis. We do not
incur any direct costs associated with advertising, licensing or subscription
revenue. Accordingly, all indirect expenses incurred in connection with these
revenue sources are included in operating expenses. We accrue a sales return
allowance in accordance with our return policy for estimated returns of
merchandise subsequent to the balance sheet date that relate to sales prior to
the balance sheet date. At January 31, 1999 and January 29, 2000, the sales
return allowance was $681,000 and $604,000, respectively. These amounts are
included in other current liabilities.

USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires us to make estimates and
assumptions that affect the amounts reported in our financial statements and
footnotes thereto. Actual results could differ from those estimates.

STATEMENTS OF CASH FLOWS - We consider all highly liquid investments with
maturities of 90 days or less when purchased to be cash equivalents. Cash
equivalents are stated at cost, which approximates market value. Non-cash
investing and financing activities include the issuance of common stock for
acquisitions as described in Note 3.

INVESTMENTS - Our short-term and long-term investments consist of debt and
equity securities, principally instruments of the U.S. Government and its
agencies, of municipalities and of short-term mutual municipal and corporate
bond funds.

Securities that may be sold as part of our asset management strategy, in
response to or in anticipation of changes in interest rates, or for other
similar factors, were classified as available- for-sale and carried at fair
value. Unrealized holding gains and losses on such securities were reported net
of related taxes, if any, as a separate component of stockholders' equity.
Securities that we have the ability and positive intent to hold to maturity are
classified as held- to-maturity and carried at amortized cost. Realized gains
and losses on sales of securities are reported in earnings and computed using
the specific identification cost basis.

MERCHANDISE INVENTORIES - Merchandise inventories, which are primarily finished
goods, are stated at the lower of cost (determined on a first-in, first-out
basis) or market value.


                                      F-9
<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CATALOG COSTS - Catalogs costs, which primarily consist of catalog production
and mailing costs, are capitalized and amortized over the expected life of the
related future revenue stream, which principally covers three to five months
from the date catalogs are mailed. We account for catalog costs in accordance
with AICPA Statement of Position ("SOP") 93-7, "Reporting on Advertising Costs."
SOP 93-7 requires that expense relating to capitalized advertising costs should
be computed using the ratio of current period revenues for the catalog cost pool
to the total of current and estimated future period revenues for that catalog
cost pool. Deferred catalog costs as of January 31, 1999 and January 29, 2000
were $6.4 million and $5.9 million, respectively. Catalog costs, which are
included in selling, general and administrative expenses, were $22.6 million,
$31.0 million and $40.1 million for fiscal 1997, 1998 and 1999, respectively.

ADVERTISING COSTS - Advertising expenses that are not direct-response catalog
costs are expensed as incurred. For fiscal 1999, such expenses amounted to
$10.6 million and related primarily to iTurf.

LONG-LIVED ASSETS -- In accordance with the Statement of Financial Accounting
Standards Board ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to Be Disposed Of," we periodically review
long-lived assets and certain identifiable intangibles for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows (on
an undiscounted basis) expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized would be measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets.

GOODWILL AND OTHER ASSETS - Goodwill and costs related to trademarks and
licenses are amortized on a straight-line basis over their expected useful
lives, which range from five to 30 years. Significant changes to intangible
assets are described in Notes 3 and 14. Accumulated amortization at January 31,
1999 and January 29, 2000 was approximately $570,000 and $2,289,000,
respectively.

RECLASSIFICATIONS -- Certain amounts have been reclassified to conform to the
current period presentation.

INCOME TAXES - We use the liability method of accounting for income taxes,
whereby deferred income taxes are provided on items recognized for financial
reporting purposes over different periods than for income taxes purposes.
Valuation allowances are provided when the expected realization of tax assets
does not meet a more likely than not criteria. Deferred income tax assets and
liabilities are recorded in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes." See Note 6.


                                      F-10
<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECOGNITION OF GAIN ON ISSUANCE OF SUBSIDIARY STOCK - In accordance with the SEC
Staff Accounting Bulletin "Accounting for Sales of Stock by a Subsidiary,"
dELiA*s recorded a gain on the issuance of subsidiary stock transaction for the
excess of the offering price per share over the carrying amount where the sale
of such shares by a subsidiary is not a part of a broader corporate
reorganization contemplated or planned by the registrant. During the fourth
quarter of fiscal 1999, we announced our intention to spin off our iTurf
interest to our shareholders. Accordingly, no gain was recognized or will be
recognized in connection with subsequent issuances of iTurf stock.

STOCK-BASED COMPENSATION -- We grant stock options for a fixed number of shares
to certain employees with an exercise price generally equal to the fair value of
the shares at the date of grant. We account for stock options in accordance with
Accounting Principles Board ("APB") No. 25, "Accounting for Stock Issued to
Employees," and, accordingly, do not recognize compensation expense. In October
1995, the FASB issued SFAS No. 123, "Accounting for Stock Based Compensation"
("SFAS 123"), which provides an alternative to APB Opinion No. 25 in accounting
for stock-based compensation. As permitted by SFAS No. 123, the Company
continues to account for stock-based compensation in accordance with APB Opinion
No. 25 and has elected the pro forma alternative of SFAS No. 123.
(See Note 12.)

COMPUTATION OF HISTORICAL NET INCOME (LOSS) PER SHARE -- We calculate earnings
per share in accordance with SFAS NO. 128, "Computation of Earnings Per Share"
and SEC Staff Accounting Bulletin No. 98. Accordingly, basic earnings per share
is computed using the weighted average number of common and dilutive common
stock equivalent shares outstanding during the period. Common equivalent shares
consist of the incremental common shares issuable upon the exercise of stock
options (using the treasury stock method.) Common equivalent shares are excluded
from the calculation if their effect is anti-dilutive.

RECENT ACCOUNTING PRONOUNCEMENTS - In June 1999, the Financial Accounting
Standards Board approved deferral of Statement No. 133 - Accounting for
Derivative Instruments and Hedging Activities, which we are required to adopt in
fiscal year beginning February 2001. SFAS No. 133 requires that all derivative
instruments be recorded on the balance sheet at fair value. We do not expect our
adoption of SFAS No. 133 to have a material impact on our consolidated position,
results of operations and cash flows.


                                      F-11
<PAGE>

3.   ACQUISITIONS

TSI SOCCER CORPORATION
On December 10, 1997, dELiA*s acquired TSI Soccer Corporation in a transaction
accounted for as a pooling of interests. In connection with the TSI transaction,
we issued an aggregate of 308,687 shares of our common stock, including 297,927
shares to certain shareholders of TSI and 10,760 shares to employees of TSI
pursuant to a "change of control" provision in TSI's stock appreciation rights
plan. We also made cash payments of approximately $730,000 to former
stockholders of TSI. The $730,000 of cash payments, which were made to
stockholders exercising statutory dissenters rights, was recorded by dELiA*s as
a reduction in equity. These dissenting stockholders held 104,737 shares (or
9.2% of the outstanding shares) out of an aggregate of 1,134,411 shares of TSI
outstanding immediately prior to consummation of the acquisition. None of these
dissenting stockholders received consideration other than the cash referred to
above. The holders of the remaining outstanding shares (or 90.8% of the
outstanding shares) of TSI received only dELiA*s common stock as consideration
for their TSI shares, other than cash payments of approximately $137 made for
fractional shares. In accordance with pooling-of-interests accounting, we have
restated our prior financial statements and information to include TSI as if the
companies had been combined for all periods presented.

Prior to the acquisition, TSI's fiscal year ended on December 31. For fiscal
1997, the combined companies reported on the basis of dELiA*s fiscal year.
Accordingly, our Consolidated Statement of Income for the fiscal year ended
January 31, 1998 includes the results of TSI for the year ended December 31,
1997. As a result, TSI's operations for the one-month period ended January 31,
1998 are not reflected in our Consolidated Statements of Income and Cash Flows
for the year ended January 31, 1998. TSI's operating results for the one-month
period ended January 31, 1998, comprising of total revenues and a net loss of
approximately $1.0 million and $1.1 million respectively, are reflected as an
adjustment to retained earnings. The results for this one-month period reflect
no unusual items and the seasonal nature of the business.

Merger related costs totaling $1.6 million included professional fees and costs
related to the consolidation of distribution facilities, the writeoff of
property and equipment and cancellation of contracts.

The table below sets forth the unaudited separate and combined results of
dELiA*s and TSI for the fiscal year ended January 31, 1998.

<TABLE>
<CAPTION>

                                        Total Revenues    Net Income (Loss)
                                        --------------    -----------------
<S>                                     <C>               <C>
                  dELiA*s               $   86,610,000    $       5,861,000
                  TSI                       26,439,000           (1,435,000)
                                        --------------    -----------------
                  Total                 $  113,049,000    $       4,426,000
                                        ==============    =================
</TABLE>


                                      F-12
<PAGE>

3. ACQUISITIONS (CONTINUED)

gURL, INTERACTIVE INC.
On December 17, 1997, a wholly-owned subsidiary of dELiA*s acquired the net
assets of gURL, Interactive Inc., an interactive entertainment Web site, for
cash, 5,000 shares of dELiA*s common stock and rights to receive an additional
5,000 shares in fiscal 1998 and 5,000 in fiscal 1999 subject to the satisfaction
of certain performance targets. Such targets were achieved prior to fiscal 1999
and the value of the shares subsequently issued was recorded as increases to
goodwill and stockholder's equity at the time of achievement. The acquisition
was accounted for by the purchase method and the results of the operations of
the acquired business have been included in the consolidated financial
statements since the date of acquisition. Our operating results would not have
been materially different on a pro forma basis assuming the acquisition had
occurred on the first day of each fiscal year reported.

THE SCREEEM! BUSINESS
In July 1998, dELiA*s, through two wholly-owned subsidiaries, acquired assets
located in 26 retail stores operated under the Screeem! and Jean Country names,
as well as the leases for such stores and several related trademarks (together,
the "Screeem! Business") from American Retail Enterprises, L.P. The purchase
price for the acquisition consisted of $10.0 million in cash and 946,756 shares
of dELiA*s Inc. common stock.

The total 946,756 shares issued for the acquisition includes the original
issuance of 812,501 shares in fiscal 1998 as well as an additional issue of
168,039 shares in February 2000 net of the cancellation in fiscal 1999 of 33,784
shares for a working capital adjustment. The $1.4 million value of the shares
issued in February 2000 was recorded as an increase to goodwill and an
adjustment to stockholder's equity in fiscal 1999 as the contingencies relating
to such issuance had been satisfied by January 29, 2000. The acquisition was
accounted for as a purchase. Accordingly, the operating results of the Screeem!
Business have been included in our consolidated financial statements since the
date of acquisition. The excess of the aggregate purchase price over the fair
market value of net assets acquired of $20.2 million was allocated to goodwill
and was being amortized over thirty years. During fiscal 1999, we recorded a
restructuring charge in connection with our plan to exit the Screeem! and Jean
Country retail operations which included the write-off of the related goodwill.
See Note 14.

On a pro forma basis, assuming the acquisition had occurred on the first day of
each fiscal year, our net sales, net income and diluted earnings per share would
have been approximately $147.8 million, $5.6 million and $0.41, respectively,
for the year ended January 31, 1998 and $172.9 million, $4.7 million and $0.32,
respectively, for the year ended January 31, 1999. These results are presented
for informational purposes only and do not necessarily represent results which
would have occurred nor are they indicative of future results of combined
operations.


                                      F-13
<PAGE>

3. ACQUISITIONS (CONTINUED)

ASSETS OF FULCRUM DIRECT, INC.
In September 1998, dELiA*s acquired certain assets from the estate of Fulcrum
Direct, Inc. for approximately $4.75 million in cash. The primary assets
included the trademarks and customer lists for the ZOE, STORYBOOK HEIRLOOMS,
PLAYCLOTHES, AFTER THE STORK and JUST FOR KIDS catalogs. We also purchased
selected inventory and assumed certain Storybook Heirlooms customer refund
liabilities. The acquisition has been accounted for as a purchase with the
operating results of the acquired business included in our consolidated
financial statements since the date of acquisition and the excess of the
aggregate purchase price over the fair market value of net assets acquired
allocated to goodwill. Our operating results would not have been materially
different on a pro forma basis assuming the acquisition had occurred on the
first day of each fiscal year reported.

T@PONLINE.COM
On September 1, 1999, iTurf acquired T@ponline.com, Inc. which hosts a leading
global Internet portal Web site with information and community services directed
at college and university students. The aggregate consideration paid consisted
of 1,586,996 newly issued shares of iTurf Class A common stock. The transaction
was accounted for under the purchase method of accounting with the operating
results of the acquired business included in our consolidated financial
statements since the date of acquisition and the excess of the aggregate
purchase price over the fair market value of net assets acquired of $19.0
million allocated to goodwill. The goodwill is being amortized over five years.
In connection with this issuance of our subsidiary's common stock, we recorded a
deferred gain of $6.9 million to additional paid in capital.

4. PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and are depreciated on the
straight-line method over the estimated useful lives or, for leasehold
improvements, the shorter of the estimated useful lives or the remaining term of
the lease. Major classes of property and equipment are as follows:

<TABLE>
<CAPTION>

                                                                 Estimated              January 31,      January 29,
                                                               Useful Lives                1999             2000
                                                               ------------           ------------     -------------
<S>                                                            <C>                    <C>              <C>
         Furniture, fixtures and equipment                     5 - 10 years           $ 10,862,000     $  20,233,000
         Leasehold improvements                                Term of lease             4,871,000        15,564,000
         Building                                                40 years                        -         5,448,000
         Land                                                       n/a                          -           873,000
                                                                                      ------------     -------------
         Total - at cost                                                                15,733,000        42,118,000
         Less accumulated depreciation                                                   3,191,000         6,635,000
                                                                                      ------------     -------------
         Total property and equipment - net                                           $ 12,542,000     $  35,483,000
                                                                                      ============     =============
</TABLE>


                                      F-14
<PAGE>

5. LONG-TERM DEBT AND CREDIT FACILITIES

On August 6, 1999, we purchased for $6.2 million an approximately 400,000 square
foot distribution facility in Hanover, Pennsylvania, the majority of which space
we previously leased. We borrowed $5.3 million from Allfirst Bank in the form of
a mortgage loan on the property to pay for $5.0 million of the purchase price
and $300,000 of planned capital improvements. We are subject to certain
covenants under the loan agreement, including a covenant to maintain a fixed
charge coverage ratio. On August 10, 1999 we entered into an interest-rate swap
agreement with Allfirst Bank under which we effectively converted the
LIBOR-based variable interest rate mortgage to a fixed rate loan with an
interest rate of approximately 8.78%. At January 29, 2000, the principal balance
on the mortgage was $5.3 million. The mortgage principal payments at January 29,
2000 for the next five fiscal years are summarized as follows: 2000 - $105,000;
2001 - $114,000; 2002 - $125,000; 2003 - $136,000; and 2004 - $149,000.

dELiA*s had no long-term debt balances at January 31, 1999.

During fiscal 1999, we borrowed a total of $9.0 million under our credit
facility with First Union National Bank. By January 29, 2000, we had repaid
$6.0 million so the remaining balance was $3.0 million, all of which is
classified as current. The facility consisted of a revolving line of credit
permitting us to borrow up to $25 million and provided for the issuance of
documentary and standby letters of credit up to $10 million. At both January
31, 1999 and January 29, 2000, outstanding letters of credit were $1.3
million. Our obligations under the Credit Agreement were secured by a lien on
substantially all of our assets, except certain real property and the assets
of iTurf. Our ability to continue to borrow under the credit agreement was
contingent on a number of conditions including our compliance with tangible
net worth, fixed charge coverage ratio and debt to cash flow covenants. In
addition, amounts outstanding under the facility were limited to specified
percentages of the value of our eligible inventory as determined under the
credit agreement. At our option, borrowings under this facility bore interest
at First Union National Bank's prime rate or at LIBOR plus 200 basis points.
The Credit Agreement contained certain covenants and default provisions
customary for credit facilities of this nature, including limitations on our
payment of dividends. A fee of 0.375% per year was assessed monthly on the
unused portion of the line of credit. There were no funds borrowed under our
credit agreements during fiscal 1998.

Subsequent to January 29, 2000, we entered into an Amended and Restated
Credit Agreement with Congress Financial Corporation that amends and restates
the terms of our First Union facility. See Note 15.

During fiscal 1999, interest expense was $670,000.


                                      F-15
<PAGE>

6. INCOME TAXES

The provision for income taxes is comprised of the following:

<TABLE>
<CAPTION>

                                                           Fiscal 1997           Fiscal 1998         Fiscal 1999
                                                           -----------           -----------         -----------
<S>                                                       <C>                   <C>                <C>
         Federal:
              Current                                     $   2,262,000         $   1,700,000      $  (2,463,000)
              Deferred                                         (498,000)              918,000         13,185,000
         State and local:
              Current                                           694,000               575,000                  -
              Deferred                                           (2,000)              212,000         (1,652,000)
                                                          -------------         -------------      -------------
      Total provision (benefit)                           $   2,456,000         $   3,405,000      $   9,070,000
                                                          =============         =============      =============
</TABLE>

The effective income tax rates differed from the federal statutory income tax
rates as follows:

<TABLE>
<CAPTION>

                                                            FISCAL 1997           FISCAL 1998        FISCAL 1999
                                                            -----------           -----------        -----------
<S>                                                       <C>                   <C>                <C>
         Federal taxes at statutory rates                 $   2,340,000         $   3,144,000      $   6,810,000
         State and local taxes net of federal benefit           451,000               519,000         (1,090,000)
         iTurf valuation allowance                                    -                     -          4,777,000
         Minority interest                                            -                     -         (1,646,000)
         Tax-exempt interest income                            (346,000)             (252,000)                 -
         Other                                                   11,000                (6,000)           219,000
                                                          -------------         -------------      -------------
                                                          $   2,456,000         $   3,405,000      $   9,070,000
                                                          =============         =============      =============
</TABLE>

The significant components of our net deferred tax assets are as follows:

<TABLE>
<CAPTION>

                                                                              January 31, 1999      January 29, 2000
                                                                              ----------------      ----------------
<S>                                                                           <C>                   <C>
      Deferred tax assets:
         Inventory reserves                                                      $   611,000        $  1,043,000
         Net operating loss                                                          595,000           7,510,000
         Uniform capitalization - inventories                                        523,000             594,000
         Reserves and accruals                                                       348,000             385,000
         Sales return allowance                                                      277,000             156,000
         Accrued restructuring                                                             -           9,707,000
         Stock option deduction                                                            -           1,534,000
         Property and equipment                                                            -             224,000
         Valuation allowance                                                               -          (7,795,000)
         Other                                                                        94,000           1,043,000
                                                                                 -----------        ------------
           Total deferred tax assets                                               2,448,000          14,401,000
      Deferred tax liabilities:
         Catalog costs                                                            (2,296,000)         (2,015,000)
         Property and equipment                                                      (37,000)                  -
         Gain on subsidiary IPO                                                            -         (24,125,000)
         Other                                                                             -             (99,000)
                                                                                 -----------        ------------
           Total deferred tax liabilities                                         (2,333,000)        (26,239,000)
                                                                                 -----------        ------------
      Net deferred tax assets (liabilities)                                      $   115,000        $(11,838,000)
                                                                                 ===========        ============
</TABLE>

dELiA*s had a net operating loss carryover ("NOL") of approximately $1.4 million
at January 29, 2000 representing the separate company loss of TSI existing at
the date of acquisition. Although this NOL is subject to limitations under
provisions of the Internal Revenue Code, we expect to fully utilize this NOL in
future periods.
The NOL expires in 2012.

During fiscal 1999, we generated a NOL of approximately $12.2 million related to
our iTurf subsidiary. This NOL expires in 2020. In addition, a state NOL of
approximately $22.1 million was established in connection with the Screeem!
restructuring. We have established a valuation allowance of $7.8 million against
the federal NOL and a portion of the state NOL.


                                      F-16
<PAGE>

7. STOCKHOLDERS' EQUITY

During the fiscal year ended January 31, 1997, Class B restricted membership
interests were granted to certain employees at no cost to these employees. The
cost of restricted membership interests, based upon their $217,000 fair market
value at the award date, was credited to stockholders' equity and was amortized
against earnings over the vesting period of 30 months. Deferred compensation
expense recognized during the fiscal years ended January 31, 1998 and 1999 was
$92,000 and $50,000, respectively. Immediately prior to our initial public
offering in December 1996, the Class B restricted membership interests converted
into 704,474 shares of restricted dELiA*s Inc. common stock. During the fiscal
year ended January 31, 1998, TSI issued 134,409 additional shares of TSI common
stock. Of the 134,409 shares issued, 23,834 shares were used to repay $113,400
of subordinated unsecured notes payable to TSI stockholders. Net proceeds from
the sale of the balance of 110,575 shares at $4.75 per share were used
principally to fund working capital. The 134,409 shares of TSI common stock were
exchanged for 35,300 shares of dELiA*s common stock in the TSI acquisition. See
Note 3.

During fiscal 1999, additional paid-in capital was increased $1.8 million for
the tax effect of stock option exercises and decreased $2.4 million for the tax
effect of the issuance of iTurf common stock in connection with the OnTap
acquisition.

8. EARNINGS PER SHARE

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

<TABLE>
<CAPTION>

                                                      Fiscal 1997             Fiscal 1998            Fiscal 1999
                                                      -----------             -----------            -----------
<S>                                                <C>                       <C>                   <C>
         Net income                                $    4,426,000            $  5,842,000          $  10,958,000
                                                   ==============            ============          =============
         Weighted-average shares                       12,941,000              13,779,000             14,315,000
         Effect of dilutive securities:
           Stock options                                  142,000                 492,000                948,000
           Contingent stock - acquisitions                      -                  47,000                117,000
                                                    -------------            ------------            -----------
         Denominator for diluted earnings per share
           (adjusted weighted-average and
              assumed conversions)                     13,083,000              14,318,000             15,380,000
                                                    =============            ============          =============
         Basic net income per share                 $        0.34            $       0.42          $        0.77
                                                    ==============           ============          =============
         Diluted net income per share               $        0.34            $       0.41          $        0.71
                                                    ==============           ============          =============
</TABLE>

For fiscal 1997, 1998 and 1999, options to purchase 7,000, 165,000 and 883,000
shares, respectively, were outstanding at the end of the period but not included
in the computation of diluted earnings per share because their effect would have
been antidilutive.

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value amounts reported in our balance sheets for cash and cash
equivalents and long-term debt approximate fair values. Except for iTurf's
$1.0 million investment in a start-up Internet company that is accounted for
on the cost method, our total investments of $43.9 million represents iTurf's
debt securities that are classified as held-to-maturity and carried at
amortized cost. The fair value of our debt security investments at January
29, 2000 is $42.7 million based on quotes obtained from brokers for those
instruments while the market value of our other investment is believed to
approximate cost.


                                      F-17
<PAGE>

10. COMMITMENTS AND CONTINGENCIES

LEASES
As of January 29, 2000, dELiA*s was obligated under various long-term
non-cancelable leases for office, retail, and warehouse and distribution space
and equipment requiring minimum annual rental payments in future periods as
follows:

<TABLE>
<CAPTION>

                                                     Capital             Operating
                   Fiscal                            Leases               Leases             Total
                   ------                          -----------         ------------     ------------
<S>                                                <C>                <C>              <C>
                  2000                                $614,000           $7,003,000    $   7,617,000
                  2001                                 614,000            5,870,000        6,484,000
                  2002                                 544,000            5,499,000        6,043,000
                  2003                                 521,000            5,537,000        6,058,000
                  2004                                 130,000            5,356,000        5,486,000
                  2005 and thereafter                        -           22,129,000       22,129,000
                                                    ----------        -------------    -------------
                  Minimum lease payments            $2,423,000        $  51,394,000    $  53,817,000
                                                    ==========        =============    =============
</TABLE>

The total minimum payments for capital leases include approximately $200,000 for
imputed interest which reduces the total future payments to $2.2 million present
value. Amortization of assets recorded under capital leases is classified as
depreciation expense.

Our retail store leases typically include contingent rent clauses that will
result in higher payments if the store sales exceed expected levels. Some of our
operating leases also include renewal options and escalation clauses with terms
that are similar to our current leases and typical for the industry. In
addition, we are obligated to pay a proportionate share of increases in real
estate taxes and other occupancy costs for space covered by our operating
leases. Rent expense for the fiscal years ended January 31, 1998, January 31,
1999 and January 29, 2000 was $2.1 million, $4.9 million and $10.3 million,
respectively.

BENEFIT PLAN
During fiscal 1999, dELiA*s began a 401(k) retirement plan covering all eligible
employees. Under the plan, employees can defer 1% to 15% of compensation. We may
make matching contributions on a discretionary basis. The employee's
contribution is 100% vested and the employer's matching contribution vests over
a five-year period. The new plan replaces a similar plan previously offered to
employees of TSI. The employer's contribution was $13,000, $24,000 and $46,000
in fiscal 1997, 1998 and 1999, respectively.

INTERNET MARKETING ALLIANCES
In May 1999, iTurf entered into a strategic marketing alliance with America
Online, Inc. Over the two-year term of the agreement, iTurf has agreed to pay
America Online a total of approximately $8.1 million, of which $5.0 million was
paid as of January 29, 2000.

In August 1999, iTurf entered into a strategic marketing alliance with Microsoft
Corporation. Over the one-year term of the agreement, iTurf has agreed to pay
Microsoft a total of at least $4.6 million, of which approximately $2.0 million
was paid as of January 29, 2000.


                                      F-18
<PAGE>

10. COMMITMENTS AND CONTINGENCIES (CONTINUED)

INTERNET MARKETING ALLIANCES (CONTINUED)
In connection with the September 1999 Taponline transaction, iTurf entered into
a marketing alliance with MarketSource Corporation, which is owned by certain of
the sellers of T@ponline, to promote our network of sites through MarketSource's
offline marketing channels. iTurf has committed to purchasing approximately $6.5
million in promotional opportunities through these channels over the next three
years. Of this amount, $1.5 million was paid as of January 29, 2000.

LITIGATION
     In 1999, two separate purported securities class action lawsuits were filed
against us and certain of our officers and directors and one former officer of a
subsidiary. The original complaints were filed in Federal District Court for the
Southern District of New York by Allain Roy on June 1, 1999 and by Lorraine
Padgett on June 3, 1999. The suits were consolidated into a single class action
and an amended and consolidated complaint was filed on March 22, 2000. The
complaint in this lawsuit purports to be a class action on behalf of the
purchasers of our securities during the period January 20, 1998 through
September 10, 1998. The complaint generally alleges that the defendants violated
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
by making material misstatements and by failing to disclose certain allegedly
material information regarding trends in our business. The complaint also
alleges that the individual defendants are liable for those violations under
Section 20(a) of the Securities Exchange Act. The complaint seeks unspecified
damages, attorneys' and experts' fees and costs, and such other relief as the
court deems proper. On April 14, 2000, dELiA*s Inc. and the other named
defendants filed a motion to dismiss the lawsuit. Since that date, we are not
aware of any changes in the status of the lawsuit.

         We intend to vigorously defend against these actions. Based upon
information presently known to management, we do not believe that the ultimate
resolution of these lawsuits will have a material adverse effect on our
financial condition, results of operations or cash flow.

OTHER
     In connection with our acquisition of the distribution facility, we hired
an environmental consultant to perform an assessment of the facility. As a
result of that assessment, the seller of the property performed certain soil
remediation and created a groundwater remediation plan, each relating to the
presence of underground fuel oil, waste oil and gasoline tanks located on the
property and subsequently removed by the seller. The Pennsylvania Department of
Environmental Protection has released the seller from liability with respect to
soil contamination and has approved the ground water remediation plan. The
seller has set funds aside in escrow to cover up to $250,000 in ground water
remediation costs. We do not believe that the environmental conditions at the
facility will have a material adverse effect on our consolidated financial
condition, results of operations or cash flows.


                                      F-19
<PAGE>

11. SEGMENTS

dELiA*s determines operating segments in accordance with Statement of Financial
Accounting Standards No. 131. Our reportable segments are generally defined by
their method of distribution; different segments may offer similar products to
similar customers, but are managed separately because of their distribution
methods. Commencing in fiscal 1999, dELiA*s has three reportable segments:
catalog, retail and iTurf. Each of these segments earns revenues primarily from
the sale of apparel, accessories and soccer equipment to consumers. The catalog
segment takes phone and mail orders from our customers and mails merchandise
directly to those customers. Our retail stores display merchandise in mall and
strip mall stores and sell directly to customers who visit those locations.
iTurf sells merchandise through our various Web sites and also recognizes
advertising, subscription and licensing revenues. Sales outside of the United
States are insignificant.

We evaluate performance and allocate resources primarily based on profit and
loss after expense allocations for shared resources but before unusual items,
income taxes, interest and other income and minority interest. There are no
material differences between accounting policies used by the reportable segments
in preparation of this information and those described in the summary of
significant accounting policies in this report.

In connection with the iTurf initial public offering in April 1999, dELiA*s and
iTurf entered into intercompany agreements that govern the transactions between
iTurf and the other segments. Intercompany profit or loss generated by such
agreements is eliminated in consolidation. For transactions between the other
segments, and for transactions involving iTurf prior to its initial public
offering, inter-segment product sales are recorded at cost and shared costs are
allocated on a basis believed by management to be reasonable.

The segment disclosure for fiscal 1997 and 1998 has been restated to reflect the
operating segments as defined for fiscal 1999.

<TABLE>
<CAPTION>

                                                               (in thousands)
FISCAL 1997                                 Catalog        Retail         iTurf         Total
                                            -------        ------         -----         -----
<S>                                       <C>           <C>           <C>           <C>
Revenues from external customers          $ 104,020     $   8,895     $     134     $ 113,049
Operating profit (loss)                       7,301        (1,571)          (49)        5,681

FISCAL 1998                                 Catalog        Retail         iTurf         Total
                                            -------        ------         -----         -----
Revenues from external customers          $ 116,322     $  38,028     $   4,014     $ 158,364
Operating profit                              6,238         1,226           821         8,285
Property & equipment, net, at year-end        7,118         5,010           414        12,542

FISCAL 1999                                 Catalog        Retail         iTurf         Total
                                            -------        ------         -----         -----
Revenues from external customers          $ 111,275     $  54,676     $  24,821     $ 190,772
Operating loss                              (12,675)      (11,643)      (17,397)      (41,715)
Property & equipment, net, at year-end       16,416        15,781         3,286        35,483
</TABLE>


                                      F-20
<PAGE>

11. SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                                          FISCAL 1997    FISCAL 1998     FISCAL 1999
                                                          -----------    -----------     -----------
                                                                       (in thousands)
<S>                                                        <C>           <C>             <C>
      Operating profit (loss) for reportable segments      $7,295        $ 8,285         $(41,715)
      Merger related costs (Note 3)                         1,614             --               --
      Restructuring charge (Note 14)                         --               --           23,668
      Gain on subsidiary IPO and sale of subsidiary stock    --                           (78,117)
      Minority interest                                      --                            (4,865)
      Interest and other income, net                       (1,201)          (962)          (2,429)
                                                           ------        -------         --------
      Total income before taxes                            $6,882        $ 9,247         $ 20,028
                                                           ======        =======         ========

                                                                    JANUARY 31, 1999  JANUARY 29, 2000
                                                                    ----------------  ----------------
                                                                              (in thousands)
      Property and equipment for reportable segments                     $12,542         $ 35,483
      Other assets                                                        69,602          148,557
                                                                         -------         --------
      Total consolidated assets                                          $82,144         $184,040
                                                                         =======         ========
</TABLE>

12. STOCK OPTIONS

Prior to our initial public offering, we approved and adopted the 1996 Stock
Incentive Plan. Such plan was amended and restated in July 1998. On December 1,
1998, our board of directors approved and adopted the 1998 Stock Incentive Plan.
The 1996 Stock Incentive Plan, as amended, and the 1998 Stock Incentive Plan
(collectively, the "Incentive Plans") provide for the following types of awards
to eligible employees: (i) stock options, including incentive stock options and
non-qualified stock options; (ii) stock appreciation rights, in tandem with
stock options or freestanding; and (iii) restricted stock. Awards may be granted
singly, in combination or in tandem, as determined by a committee of our board
of directors. The maximum number of shares of common stock that may be issued
pursuant to the Incentive Plans is 3,500,000. The maximum number of shares of
common stock subject to each of the stock options or stock appreciation rights
that may be granted to any individual under the Incentive Plans is 200,000 for
each fiscal year under the 1996 Stock Incentive Plan, as amended, and 400,000
under the 1998 Stock Incentive Plan. If a stock appreciation right is granted in
tandem with a stock option, it shall apply against the individual limits for
both stock options and stock appreciation rights, but only once against the
maximum number of shares available under the Incentive Plans.

An executive is party to a stock option agreement with us pursuant to which the
we granted such executive an option to purchase up to an aggregate of 250,000
shares of our common stock at an exercise price of $11.00 per share, the fair
market value on the date of grant. The option becomes exercisable as to 50,000
shares on each of July 21, 1997, 1998, 1999, 2000 and 2001.

On June 22, 1998 and September 15, 1998, in an effort to retain employees at a
time when a significant percentage of employee stock options had exercise prices
that were above fair market value, we reduced the exercise price of outstanding
common stock options held by our employees, consultants and directors to the
fair market value per share as of the date of the reduction in price. All
options maintained the same vesting and expiration terms. Not all grants to
officers were repriced. Executive officers forfeited a portion of prior grants
in connection with the repricing.


                                      F-21
<PAGE>

12. STOCK OPTIONS (CONTINUED)

On September 16, 1998, two employees and a financial advisor were granted
options to purchase stock in a wholly-owned subsidiary. The options become
exercisable two years after the date of grant and expire ten years after the
date of grant. The defined exercise price is equal to the fair market value at
the date of grant.

On January 1, 1999, iTurf established a stock incentive plan, reserved shares
for grant under the plan and issued employees options to purchase stock at the
fair market value at that date. Additional options were granted during fiscal
1999. The majority of these options vest 20% per year beginning one year from
the date of grant, while some of the options vest in eight six-month intervals
generally beginning six months from the date of grant. At January 29, 2000,
options to purchase approximately 3.0 million shares of iTurf stock remained
outstanding with options to purchase approximately 10% of those shares
exercisable.

A summary of dELiA*s stock option activity for the three most recent fiscal
years is as follows:

<TABLE>
<CAPTION>

                                                  Fiscal 1997              Fiscal 1998             Fiscal 1999
                                           ----------------------- -----------------------  -----------------------
                                                        Weighted                Weighted                  Weighted
                                           Options   Exercise Price  Options  Exercise Price  Options   Exercise Price
                                           -------   --------------  -------  --------------  -------   --------------
<S>                                        <C>       <C>            <C>       <C>            <C>        <C>
      Outstanding at beginning of period     383,750   $  11.00       744,437    $ 14.96     3,039,110   $   6.77
         Granted (excludes repricing)        362,937      19.13     2,496,183      15.83       847,033      13.61
         Exercised                            (2,250)     11.00       (49,010)      6.56      (206,785)      5.81
         Canceled (excludes repricing)             -          -      (152,500)     18.04      (292,725)      9.74
                                           ---------                ---------                ---------
      Outstanding at end of period           744,437   $  14.96     3,039,110    $  6.77     3,386,633    $  8.28
                                           =========   ========     =========    =======     =========    =======

      Options exercisable at end of period   107,500   $  11.24       351,327    $  5.75     1,230,930    $  6.21
                                           =========   ========     =========    =======     =========    =======
</TABLE>

The following summarizes dELiA*s stock option information at January 29, 2000:

<TABLE>
<CAPTION>

                                             Options Outstanding                         Options Exercisable
                                         --------------------------------------    ---------------------------------
                                         Weighted-Average
      Range of                Number         Remaining       Weighted-Average         Number      Weighted-Average
     Exercise Prices      Outstanding    Contractual Life    Exercise Price        Exercisable    Exercise Price
<S>                       <C>            <C>                 <C>                   <C>            <C>
      $5.75 to $8.63         2,536,600       9 years              $6.19              1,136,432         $5.86
      $8.54 to $12.94          285,000       9 years             $10.29                 85,998         10.09
      $12.95 to $19.38         527,600       9 years             $16.07                  8,500         13.75
      $19.39 to $28.88          37,433       9 years             $24.86                      -           -
                          ------------                                            ------------
      Total                  3,386,633       9 years              $8.28              1,230,930         $6.21
                          ============                                            ============
</TABLE>

dELiA*s applies APB No. 25 and related interpretations in accounting for the
Incentive Plans and the iTurf plan. Accordingly, no compensation expense has
been recognized for these plans in fiscal 1997, 1998 or 1999. Had compensation
expense been determined based on the fair value of stock option grants on the
date of grant in accordance with SFAS No. 123, grants of options to purchase our
common stock would have had the following effect on our net income and earnings
per share:

<TABLE>
<CAPTION>

                                                                Fiscal 1997          Fiscal 1998        Fiscal 1999
                                                                -----------          -----------        -----------
<S>                                                             <C>                  <C>                <C>
         Pro forma net income                                   $     3,345          $     1,663        $     5,484
                                                                ===========          ===========        ===========
         Pro forma basic net income per share                   $      0.26          $      0.12        $      0.38
                                                                ===========          ===========        ===========
         Pro forma diluted net income per share                 $      0.26          $      0.12        $      0.36
                                                                ===========          ===========        ===========
</TABLE>

The average estimated fair market value of options granted during fiscal 1997,
1998 and 1999 was $7.30, $3.00 and $7.34 per share, respectively. In preparing
such estimates, we used the Black-Scholes option-pricing model with the
following weighted average assumptions used: no dividend yield; expected
volatility of 45%, 65% and 65%, respectively, risk-free interest rate of 5.5%,
4.6% and 5.5%, respectively; expected lives of three to five years.


                                      F-22
<PAGE>

12. STOCK OPTIONS (CONTINUED)

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
our stock options have characteristics significantly different from those of
traded options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable single measure of the fair value of
its stock options.

13. FAMILY STOCKHOLDERS AGREEMENT

Immediately prior to our initial public offering in December 1996, certain
stockholders (the "Family Holders") and a stockholder/executive of dELiA*s (the
"Executive") entered into a stockholders' agreement with dELiA*s (the "Family
Stockholders Agreement"). The Family Holders are permitted to transfer shares of
dELiA*s stock owned by them in accordance with the requirements of Rule 144
under the Securities Act of 1933. The Family Stockholders Agreement also permits
each of the Family Holders to cause us to register shares of our common stock
under some circumstances concurrently with offerings of common stock by us.
dELiA*s will generally be required to bear the expenses of all such
registrations, except underwriting discounts and commissions. In addition, the
Family Stockholders Agreement gives the Executive the right to vote all of the
shares of dELiA*s common stock owned by the Family Holders on all matters that
come before our stockholders. The Family Holders collectively owned 20.2 percent
of the outstanding dELiA*s common stock as of January 29, 2000. The Family
Stockholders Agreement will expire in December 2006.

14. RESTRUCTURING CHARGE

During fiscal 1999, we recorded a charge of approximately $24.2 million in
connection with our restructuring plan to exit our Screeem! and Jean Country
retail operations. The charge is comprised of the following:
        -   $19.4 million for the write-off of the remaining unamortized balance
            of goodwill and other intangibles relating to our acquisition of the
            Screeem! and Jean Country retail operations;
        -   $3.6 million for the shut-down of certain retail stores of which
            $2.3 million represented the write-off of assets that would no
            longer be used and $1.3 million, primarily relating to future lease
            costs, was accrued;
        -   $700,000 for the elimination of approximately 50 jobs at the
            Screeem! corporate office and the store locations to be closed,
            resulting in employee severance costs; and
        -   $500,000 for the liquidation of inventory carried at stores to be
            converted or closed (reflected in cost of sales).

The total charge of $24.2 million includes $23.7 million that is included in
operating expenses as a restructuring charge and $500,000 included as cost of
sales.


                                      F-23
<PAGE>

14. RESTRUCTURING CHARGE (CONTINUED)

During fiscal 1999, we incurred approximately $200,000 for costs relating to
store shut-down, $300,000 for inventory liquidation and $100,000 for employee
severance. We expect the $1.7 million that remains accrued at January 29, 2000
for store shut-down and employee severance costs and the $200,000 that remains
as an offset to inventory to be incurred in early fiscal 2000.

15. SUBSEQUENT EVENTS

On February 15, 2000, iTurf acquired theSpark.com, Inc. The aggregate
consideration paid consisted of 1,099,988 newly issued shares of iTurf Class A
common stock. The transaction was accounted for under the purchase method of
accounting.

On April 26, 2000, we received a waiver through the first quarter of fiscal
2001 of the fixed charge coverage ratio convenant under our Allfirst mortgage
loan.

On April 28, 2000, we entered into an Amended and Restated Credit Agreement
with Congress Financial Corporation that amends and restates the terms of our
First Union credit facility and goes through April 2003. The new facility has
similar terms to the First Union facility but provides us with a higher
initial borrowing base and contains controls on our cash management and
certain limits on our ability to distribute assets.

                                      F-24
<PAGE>

                                   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
our behalf by the undersigned thereunto duly authorized.



                                        /s/ Stephen I. Kahn
                                        -----------------------------
                                        Stephen I. Kahn
                                        Chairman of the Board and
                                        Chief Executive Officer
Date:  April 28, 2000



     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.

<TABLE>
<CAPTION>

SIGNATURES                                  TITLE                                 DATE

<S>                            <C>                                                <C>
/s/ Stephen I. Kahn                   Chairman of the Board and                   April 28, 2000
-------------------------      Chief Executive Officer
Stephen I. Kahn                       (principal executive officer)

/s/ Evan Guillemin                    President, Chief Financial                  April 28, 2000
-------------------------             Officer and Treasurer
Evan Guillemin                        (principal financial and accounting officer)


/s/ Christopher C. Edgar              Vice Chairman, Chief                        April 28, 2000
-------------------------             Operating Officer and Director
Christopher C. Edgar


/s/ Clare Copeland
-------------------------             Director                                    April 28, 2000
Clare Copeland

/s/ S. Roger Horchow                  Director                                    April 28, 2000
-------------------------
S. Roger Horchow

/s/ Geraldine Karetsky                Director                                    April 28, 2000
-------------------------
Geraldine Karetsky

/s/ Joseph J. Pinto                   Director                                    April 28, 2000
-------------------------
Joseph J. Pinto
</TABLE>


<PAGE>

                                  EXHIBIT INDEX

2.1     Bill of Sale and Contribution and Assumption Agreement between dELiA*s
        LLC and dELiA*s Inc. (incorporated by reference to Exhibit 2.1 to the
        dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
        333-15153))

 3.1    Certificate of incorporation of dELiA*s Inc. (incorporated by reference
        to Exhibit 3.1 to the dELiA*s Inc. Registration Statement on Form S-1
        (Registration No. 333-15153))

 3.2    Bylaws of dELiA*s Inc. (incorporated by reference to Exhibit 3.2 to the
        dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
        333-15153))

10.1    Form of Employment Agreement between dELiA*s Inc. and Stephen I. Kahn
        (incorporated by reference to Exhibit 10.1 to the dELiA*s Inc.
        Registration Statement on Form S-1 (Registration No. 333-15153))

10.2    Employment Agreement between dELiA*s Inc. and Christopher C. Edgar
        (incorporated by reference to Exhibit 10.2 to the dELiA*s Inc.
        Registration Statement on Form S-1 (Registration No. 333-15153))

10.3    Employment Agreement between dELiA*s Inc. and Evan Guillemin
        (incorporated by reference to Exhibit 10.3 to the dELiA*s Inc.
        Registration Statement on Form S-1 (Registration No. 333-15153))

10.4    Form of Family Stockholders Agreement among dELiA*s Inc., Stephen I.
        Kahn and the persons listed on Exhibit A thereto (incorporated by
        reference to Exhibit 10.4 to the dELiA*s Inc. Registration Statement on
        Form S-1 (Registration No. 333-15153))

10.5    Amended and Restated 1996 Stock Incentive Plan (incorporated by
        reference to the dELiA*s Inc. Schedule 14A filed on June 12, 1998)

10.6    Restricted Stock Plan (incorporated by reference to Exhibit 10.6 to the
        dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
        333-15153))

10.7    Stock Option Agreement between dELiA*s Inc. and Evan Guillemin
        (incorporated by reference to Exhibit 10.7 to the dELiA*s Inc.
        Registration Statement on Form S-1 (Registration No. 333-15153))

10.8    Transitional Services Agreement, dated as of July 10, 1998, among
        American Retail Enterprises, L.P., Screeem Inc., and dELiA*s Inc.
        (incorporated by reference to Exhibit 10.8 to the dELiA*s Inc. Quarterly
        Report on Form 10-Q for the fiscal quarter ended October 31, 1998)

10.9    Lease Agreement dated May 3, 1995 between dELiA*s Inc. and The Rector,
        Church Wardens and Vestrymen of Trinity Church in the City of New York
        (the "Lease Agreement"); Modification and Extension of Lease Agreement
        dated September 26, 1996 (incorporated by reference to Exhibit 10.9 to
        the dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
        333-15153))

10.10   Form of Restricted Stock Agreements between dELiA*s Inc. and holders of
        Common Stock subject to the Restricted Stock Plan (incorporated by
        reference to Exhibit 10.10 to the dELiA*s Inc. Registration Statement on
        Form S-1 (Registration No. 333-15153))

10.11   Employment Agreement dated April 5, 1999 between iTurf Inc. and Stephen
        I. Kahn (incorporated by reference to Exhibit 10.10 to the iTurf Inc.
        registration statement on Form S-1 (Registration No. 333-71123))

10.12   Lease Agreement dated April 11, 1997 between dELiA*s Inc. and Keystone
        Distribution Center, Inc. (incorporated by reference to Exhibit 10.12 to
        the dELiA*s Inc. Annual Report on Form 10-K for the fiscal year ended
        January 31, 1997)


<PAGE>

10.13   Agreement dated April 4, 1997 between dELiA*s Inc. and The Rector,
        Church Wardens and Vestrymen of Trinity Church in the City of New York
        amending the Lease Agreement (incorporated by reference to Exhibit 10.13
        to the dELiA*s Inc. Annual Report on Form 10-K for the fiscal year ended
        January 31, 1997)

10.14   Agreement dated October 7, 1997 between dELiA*s Inc. and The Rector,
        Church Wardens and Vestrymen of Trinity Church in the City of New York
        amending the Lease Agreement (incorporated by reference to Exhibit 10.14
        to the dELiA*s Inc. Quarterly Report on Form 10-Q for the fiscal quarter
        ended October 31, 1997)

10.15   Amendment No. 1 to Employment Agreement between dELiA*s Inc. and
        Christopher C. Edgar, dated September 15, 1998 (incorporated by
        reference to Exhibit 10.15 to the dELiA*s Inc. Quarterly Report on Form
        10-Q for the fiscal quarter ended October 31, 1998)

10.16   Amendment No. 1 to Employment Agreement between dELiA*s Inc. and Evan
        Guillemin, dated September 15, 1998 (incorporated by reference to
        Exhibit 10.16 to the dELiA*s Inc. Quarterly Report on Form 10-Q for the
        fiscal quarter ended October 31, 1998)

10.17   Credit Agreement dated December 7, 1998 between First Union National
        Bank, dELiA*s Inc. and the subsidiaries listed on Schedule 1 thereto
        (incorporated by reference to Exhibit 10.17 to the dELiA*s Inc.
        Quarterly Report on Form 10-Q for the fiscal quarter ended October 31,
        1998)

10.18   1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.17 to
        the dELiA*s Inc. Quarterly Report on Form 10-Q for the fiscal quarter
        ended October 31, 1998)

10.19   Intercompany Services Agreement between dELiA*s Inc. and iTurf Inc.,
        dated April 8, 1999 (incorporated by reference to Exhibit 10.1 to the
        iTurf Inc. registration statement on Form S-1 (Registration No.
        333-71123))

10.20   Trademark License Agreement between dELiA*s Inc. and iTurf Inc., dated
        April 8, 1999 (incorporated by reference to Exhibit 10.2 to the iTurf
        Inc. registration statement on Form S-1 (Registration No. 333-71123))

10.21   Amendment No. 1, dated April 8, 1999, to Credit Agreement between First
        Union National Bank, dELiA*s Inc. and our subsidiaries listed on the
        signature page thereto (incorporated by reference to Exhibit 10.21 to
        the dELiA*s Inc. annual report on Form 10-K for the fiscal year ended
        January 31, 1999)

10.22   Advertising Agreement between iTurf and America Online, Inc., dated May
        4, 1999 (incorporated by reference to Exhibit 10.16 to the iTurf Inc.
        Quarterly Report on Form 10-Q for the fiscal quarter ended May 1,
        1999)**

10.23   Construction Loan Agreement dated August 6, 1999, among dELiA*s
        Distribution Company, dELiA*s Inc. and Allfirst Bank (incorporated by
        reference to Exhibit 10.23 to the dELiA*s Inc. Quarterly Report on Form
        10-Q for the fiscal quarter ended July 31, 1999)

10.24   Mortgage Note dated August 6, 1999 made by dELiA*s Distribution Company
        in favor of Allfirst Bank (incorporated by reference to Exhibit 10.24 to
        the dELiA*s Inc. Quarterly Report on Form 10-Q for the fiscal quarter
        ended July 31, 1999)

10.25   Online Advertising Authorized Reseller Agreement between iTurf,
        Taponline and MarketSource Corporation, dated September 1, 1999
        (incorporated by reference to Exhibit 99.1 of iTurf's Current Report on
        Form 8-K dated September 7, 1999)


<PAGE>

10.26   Offline Advertising Purchase Agreement between iTurf and MarketSource
        Corporation, dated September 1, 1999 (incorporated by reference to
        Exhibit 99.2 of iTurf's Current Report on Form 8-K dated September 7,
        1999)

10.27   Registration Rights Agreement between iTurf and Marketsource Corporation
        (incorporated by reference to Exhibit 10.19 to the iTurf Inc.
        Registration Statement on Form S-1 (Registration No. 333-90435))

10.28   Amendment No. 2 to Employment Agreement between dELiA*s Inc. and
        Christopher C. Edgar, dated October 18, 1998 (incorporated by reference
        to Exhibit 10.28 to the dELiA*s Inc. Quarterly Report on Form 10-Q for
        the fiscal quarter ended October 31, 1999)

10.29   Amendment No. 2 to Employment Agreement between dELiA*s Inc. and Evan
        Guillemin, dated October 18, 1998 (incorporated by reference to
        Exhibit 10.29 to the dELiA*s Inc. Quarterly Report on Form 10-Q for the
        fiscal quarter ended October 31, 1999)

10.30   Employment Agreement dated August 1998 between Storybook Inc. (a
        wholly-owned subsidiary of dELiA*s Inc.) and Estelle DeMuesy
        (incorporated by reference to Exhibit 10.30 to the dELiA*s Inc.
        Quarterly Report on Form 10-Q for the fiscal quarter ended October 31,
        1999)

10.31*  Employment Agreement dated February 2, 2000 between dELiA*s Inc. and R.
        James Cooper

21*     Subsidiaries of the Registrant

23.1*   Consent of Ernst & Young LLP

23.2*   Consent of Deloitte & Touche LLP

27.1*   Financial Data Schedule

------------------
*   Filed herewith
**  Confidential treatment granted as to certain portions, which portions have
    been omitted and filed separately with the SEC.