Edison Brothers Stores Inc. operates apparel and footwear stores
     serving the young, young-minded and special-size markets with a
     focused selection of quality private-label and name-brand
     merchandise. With nearly 1,600 stores and 14,000 associates in
     the United States, Canada, Puerto Rico and the Virgin Islands,
     Edison is one of the largest specialty retailers in North
     America.

     1997 was a most difficult year for Edison. After filing for
     bankruptcy Nov. 3, 1995, and spending 22 months under Chapter 11
     protection, Edison emerged on Sept. 26, 1997. The company closed
     140 stores in 1997, bringing the number of closed stores to more
     than 1,000 since the bankruptcy filing. Sales continued to be
     disappointing with store-for-store sales declining 2 percent. The
     net loss for the year was $62.3 million.

     Shoes
     449 stores

     Bakers *
     Wild Pair
     *Some stores operate under the LeedsR name.

     Juniors
     260 stores

     5-7-9

     Men's
     880 stores

     J. Riggings
     JW
     Coda
     Oaktree
     REPP Ltd.

     Merchandise Mix
     Shoes          31%
     Juniors   14
     Men's          55<PAGE>




     <TABLE>

     Operating Results
     <CAPTION>

                       1997           1996           1995
     <S>               <C>            <C>            <C>
     Net sales         $949,900,000   $1,090,400,000 $1,389,400,000
     Net loss          (62,300,000)   (143,200,000)   (222,000,000)
     Number of stores year-end 1,605          1,743           2,077
     Number of employees      14,600           17,700        24,600

     <fn2>
     A discussion of results is included in Management's Discussion
     and Analysis in the back of this book.
     1997 represents the combined results for the 17 weeks ended Jan.
     31, 1998, and the 35 weeks ended Oct. 4, 1997.

     </fn2>
     </TABLE>

     Dear Shareholders and Fellow Employees:

     As our company enters its 76th year of serving customers, its
     clear we've come to a crossroads. In this letter, I will describe
     our chosen path and how we can measure our progress, financially
     and otherwise.

     We have a good foundation to build upon -- a salute to the
     contributions of 50,000 associates who have worked for the
     corporation since the first Chandlers shoe store opened in
     Atlanta. Our chains have solid identities you can read about in
     the following pages. We have mall locations among the best in the
     industry. The company has a team of seasoned associates who can
     contribute to the growth of this company. And, most important,
     almost half a million customers are coming into our stores every
     week -- I spend 15 to 20 hours a week meeting some of them in
     locations across the country.

     But we won't get anywhere without significant changes -- changes
     in the way we do business and in the corporate culture. Right
     now, our goal is progress, not perfection. We are starting to
     make progress with a sense of urgency and deliberateness because
     the past -- the recent past -- is grim. In combined 1997, Edison
     lost $62.3 million, on a comparable-store sales decline of 2.0
     percent, which accelerated to 2.5 percent in the fourth quarter.

     Looking back, we see a company that put into place a service
     superstructure designed to purchase or incubate and then fund
     interesting retail concepts, each of which developed its own
     specific support services. For a glorious few years, it worked.
     But the complex lattice was too inflexible to respond to industry
     changes such as shifting international sources of merchandise. It
     was too flimsy to shore up crumbling chain performance. And it is
     too costly.<PAGE>



     To correct these problems, we've refocused Edison as a group of
     retail chains similar enough to share support services. Yet each
     has well-defined customer segments served by excellent
     merchandising. To begin achieving this concept, we have three
     objectives for 1998:

     1. Improve the merchandise content in each chain. Our model for
     future merchandising success in each business is three-pronged.
     First, establish a sizable platform of fashion basics such as
     khaki pants, T-shirts or branded sneakers. Currently a very small
     part of our business, fashion basics should provide 15 percent to
     25 percent of the volume. Second, layer on top a key-item
     component -- possibly sweater vests, carpenter jeans or hooded
     polar fleece jackets. Our goal is for key items to make up about
     2 percent to 5 percent of our business. Third, provide more
     interesting, imaginative merchandise to a broader range of
     customers. This means better selection of colors and fabrics. We
     cannot continue to pursue fringe ideas or cater to fringe
     customers. Our stores are not yet destination stores, and we must
     appeal to the large audience of mall traffic.

     An important component we have put into place is the Edison
     Merchandising Committee, chaired by Karl Michner, whose role is
     to institutionalize the trend merchandising process. As further
     help, we are deep in the process of reformulating the buyers'
     roles, to ensure that these critical three dozen executives --
     our path to the customer's soul -- have clear support for their
     jobs and understand how best to achieve the sales, margin and
     turnover objectives.

     2. Build strong alliances with quality suppliers worldwide,
     including key brands. Currently, Edison buys merchandise from
     almost 600 sources in more than 75 countries. Our objective is to
     have far fewer relationships and more domestic suppliers so that
     we can focus on improved quality, shorter lead times and faster
     reordering of quick-selling goods. We are working now to
     determine the most appropriate avenues for our importing
     activities, with the goal of improving our ability to count on a
     timely flow of quality merchandise. Peter Hirschhorn and Alison
     Talbot -- our only two senior executives based outside St. Louis
     -- run our foreign offices.

     Domestically, Edison needs to increase branded content by 10 to
     20 percentage points. Our faster businesses -- especially 5-7-9,
     Coda, JW and J. Riggings -- require quicker turnaround time for
     fresh merchandise, and the brands are best at that. Our chains
     will continue to develop deeper and more meaningful partnerships
     with such companies as Levi's and Levi Dockers, Fubu, Steve
     Madden Ltd., DKNY, Skechers, Mecca, Mia, Paris Blues, Mudd,
     Enyce, Lugz and Pivot Rules.

     3. Centralize, simplify and cut costs in half. Edison must
     significantly sharpen the performance of its departments and cut
     costs by about half. We are centralizing and simplifying our
     support services. In stores, we have tapped Tim Brannon to
     consolidate what were five separate store organizations into one.
     Marketing -- previously confined to sales promotions -- has
     similarly been consolidated under Kim Richmond. In our
     administrative functions, we are fortunate to have attracted Jack<PAGE>



     Burtelow as Chief Administrative Officer and Chief Financial
     Officer. He has started to build a core financial team under the
     leadership of Tom McCain; improve our information systems and
     reports working with Larry Pyles; and speed our logistics
     pipeline with the help of George Spreiser. Mark Brown leads our
     efforts to secure great mall locations at attractive rents. Our
     legal department is headed by Alan Sachs. Reporting to me are two
     critical administrative functions: human resources under Lee
     Johnson and planning and allocation under Denise Parker.

     Further, to simplify the company and concentrate on fewer, bigger
     items, we have closed or will exit several businesses including
     Precis, Terrasystems, Shifty's and Oaktree.

     As I write this in my 10th week of service, let me describe how I
     see our company in a few years. I see a customer-driven,
     merchandising intensive company. I see as close to a _virtual
     company_ as possible, with strong merchants helping us compete
     nimbly in a land of giants. I see a bias toward outsourcing, so
     that we can be financially flexible. I see a fun place to work, a
     cool place to shop, and fashion leadership in enough places with
     enough frequency to keep us fun and cool. We will be a strong
     factor in Internet marketing -- because 30 percent of our
     customers use the Net more than five hours a week. We want some
     of their time -- and money. Finally, I see a handsomely
     profitable company experiencing solid comparable-store growth
     consistently in the high single digits and earning an above-
     average return on your investment. I say _finally_ because these
     will be the natural results of our efforts; already, however,
     what I have labeled final is top-of-mind in our offices and
     stores every day.

     The vision won't become a reality without the chain presidents --
     Paul Eisen, Mike Fine, John Oehler, Steve Thomas and Carol
     Williams. Through their partnership, leadership and friendship,
     we will achieve our collective but very personal goal: creating
     stores where our children and friends are eager to shop and that
     competitors are eager to shop.

     Sincerely,

     /s/Lawrence E. Honig
     Chairman and CEO

     The lifeblood of Edison is its customers. How do we maintain
     their loyalty?
     Hear what they say,
     watch what they do,
     learn what they want,
     and deliver fashion they make their own,
     with service they can count on,
     in stores they can make their favorites ...

     5-7-9
     Number of stores: 260
     Number of field associates: 2,100

     Walk into 5-7-9 to check out what's cool! The chain offers
     midpriced trendy sportswear and dresses for girls 11 to 16 years<PAGE>



     old. As size specialists, the chain is becoming a destination for
     fashion looks. In 1997, it was successful in categories where it
     had a strong position such as fashion denim. Similar stances are
     being taken in basic items like tees and tanks, and going
     forward, 5-7-9 plans to become the place to find the cool item it
     wants to stand for in each category.
     The 5-7-9 target customer looks to 5-7-9 for those fashion ideas.
     She comes into the store with her friends while they're hanging
     out at the mall. She values what her friends think but wants to
     maintain her own identity and opinions. She wants to be cool.

     _I love your store. ... It's always the first shop on my list,
     and I only shop at malls that have a 5-7-9!_ -- Jackie, Ohio

     Bakers
     Number of stores: 291
     Number of field associates: 3,200

     Bakers offers moderately priced, updated casual sport and dress
     footwear with work-to-weekend flexibility for adventuresome young
     women. From Bakers_-label tailored shoes to No Parking athletic-
     inspired styles, Bakers' target customer can find what she needs
     to complete her shoe wardrobe. And, she'll find all these styles
     and a selection of national brands in a new, sophisticated store
     design that's just her speed with an open feel created by light
     wood, matte metal fixtures and glass.
     The Bakers target customer wants sensible fashion. She'll shop at
     Bakers primarily during two phases of her life: as a high-school
     and college student with a fast-paced lifestyle who likes
     affordable hipness; and as a young woman with professional and
     social fashion needs as she concentrates on her career, family or
     both.

      _I love your store! I love your shoes!_ -- Emily, Pennsylvania

     Wild Pair
     Number of stores: 155
     Number of field associates: 1,390

     Trend-setters check out Wild Pair for casual shoes. To attract
     these fashion-forward customers, in 1997 Wild Pair introduced
     three brands: Skechers, Robert Wayne and London Underground, each
     supported by special marketing programs and in-store fixtures.
     Customers can also find private-label merchandise with fresh
     materials, new textures and exciting visual and sole treatments.
     Attitude and a full-on approach to fashion make the Wild Pair
     customer a more aggressive shopper. The chain's target customers,
     women and men ages 17 to 25, could be single, independent club-
     hoppers who always buy the latest trends or fashion leaders who
     like brand names and are influenced by styles in music videos.

     _Good service, GREAT shoes._ -- Kalilah, Florida

     JW
     Number of stores: 297
     Number of field associates: 2,140

     Image is everything for JW's target customer. JW attracts and
     keeps him with the Results label, a chain exclusive. Going into<PAGE>



     1998, a new palette of intense colors such as true red will
     appeal to the customers' visual orientation. Treatments like
     zipper tags, patches and logos pull together the denim pieces to
     create the coordinated look the JW target customer prefers.
     He wants his outfits to _hook up,_ where the pieces match each
     other by fabric, color and detail treatment -- to the point of
     coordinating his shoes with his casual outfit. He shops a lot,
     likes music and always has plans for the weekend.

     _The good music makes JW an enjoyable place to shop, and the
     excellent threads don't hurt either._ -- Rory, Hawaii

     Coda
     Number of stores: 29
     Number of field associates: 285

     Coda's potential for growth is promising because through a
     refocused merchandise mix it answers the urban-minded customer's
     desire for top brands. Coda gives its customers labels like Fubu,
     DKNY, Mecca, Enyce, Lugz, Kani and Pure Playaz.

     Oaktree
     Number of stores: 66
     Number of field associates: 590

     Fashion leaders have looked to Oaktree for contemporary,
     European-inspired looks since the chain's debut in 1976. The
     chain offers club and dress wear looks to customers who set the
     trend rather than follow it. Oaktree is being phased out during
     1998, and its stores are being converted to Coda.

     J. Riggings
     Number of stores: 312
     Number of field associates: 2,580

     J. Riggings meets its target customers' needs with updated,
     traditional merchandise at a value price. The chain offers a
     tightly edited selection of weekend casual, and sportswear and
     jackets for dress and dressy casual. Quality standards have been
     raised in all areas including construction, fabric weight and
     stitching -- to the point that each item in each department must
     earn J. Riggings' _Best Quality_ Stamp of Approval.
     The fashion-forward young professional, on average 24 years old,
     single, in his first job out of school and living in an
     apartment, is J. Riggings' target customer. Working hard and
     playing hard define his life. His active lifestyle means he's
     athletic, social and fashion-aware. He's a shopper who
     understands value and quality.

     _I love the selection of sport, casual and businesswear._ --
     Fernando, Minnesota


     REPP
     Number of stores: 176
     Number of field associates: 1,000

     REPP Ltd. operates on the philosophy that size shouldn't
     compromise style for the big and tall man. REPP offers moderately<PAGE>



     priced, traditional sportswear and dressy casual clothing with
     the goal of becoming the top-of-mind resource for everything big
     and tall men need to look and feel their best.
     REPP meets its customers' lifestyle needs with resources such as
     the _Big and Tall Man's Survival Guide,_ direct mail pieces and
     personal phone calls. REPP features the REPP Classic label for
     the mature customer who's concerned with comfort more than
     fashion, Canyon Ridge_ for the weekend customer, REPP Ltd. label
     for the business casual customer and Ferracci for the fashion
     customer.
     REPP's target customers are over 6 feet tall, have more than a
     40-inch waist, or both. They are generally salaried, 30 or more
     years old and most dress conservatively.

     _I had no idea what I was doing. ... Your salesperson took charge
     and fixed me up perfectly._ -- Tom, Florida


     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS
     (Dollars in Millions)


     On November 3, 1995, Edison Brothers Stores, Inc. (the Company)
     and 65 of its subsidiaries filed petitions for reorganization
     under Chapter 11 of the U.S. Bankruptcy Code.  An Amended Joint
     Plan of Reorganization (the Plan) was confirmed by the Bankruptcy
     Court on September 9, 1997.  The Company emerged from Chapter 11
     on September 26, 1997.  During the period from November 3, 1995,
     through September 26, 1997, the Company conducted business as
     debtor-in-possession.  For financial reporting purposes, the
     effective date of the Company's emergence from bankruptcy is
     considered to be the close of business on October 4, 1997.  For
     further discussion of the reorganization and restructuring, see
     Notes 3 and 4 to the consolidated financial statements.

     BUSINESS

     The Company owns and operates chains of specialty retailing
     stores located in forty-seven states, the District of Columbia,
     Puerto Rico, the Virgin Islands and Canada.  The Company conducts
     its principal operations through subsidiaries in two segments:
     apparel and footwear.  Stores within the apparel and footwear
     segments, with the exception of the Repp Ltd. chain of
     big-and-tall menswear stores, are almost exclusively mall-based
     and generally range in size from 1,200 to 3,000 square feet. 
     Merchandise for all segments is acquired from many vendors and
     the Company is not dependent on any one supplier.  Three main
     distribution centers serve as receiving points for merchandise
     and coordinate the distribution of shipments to the stores via
     common or contract carriers.  In 1997, the Company closed its two
     remaining mall-based entertainment centers and completed the
     phase out of its Terrasystems concept.  The Company announced  in
     January 1998 that the Shifty's chain will be phased out during
     1998.

     During 1997, the Company closed 200 apparel and footwear stores.
      The Company has identified another group of approximately 44
     stores that may be closed during 1998, and has recorded a charge<PAGE>



     associated with these closings in the 1997 consolidated financial
     statements.

     At year-end 1997, the apparel segment operated 1,156 stores in
     five chains.  Four chains focus on menswear: JW Group (including
     JW, Oaktree and Coda), J. Riggings, Repp Ltd. and Phoenix, the
     Company's catalog operations.  Each menswear chain targets a
     specific age group of men, with a different product mix.  The
     womenswear chain, 5-7-9 Shops, primarily markets casual wear and
     accessories to teens and preteens.  The footwear segment operated
     449 stores in two chains at January 31, 1998.  The footwear
     chains are Bakers/Leeds, which offers popular-priced women's
     fashion shoes, and Wild Pair, which focuses on advanced shoe
     fashion for young men and women.

     The Company experiences peak selling periods, such as Easter
     (early spring), back-to-school (July to August), and Christmas
     (Thanksgiving to Christmas), with the Christmas selling season
     accounting for a significant portion of the full year sales
     (13.8% for Combined 1997).

     RESULTS OF OPERATIONS

     Net retail sales of $336.1 and $613.8 for the 17 weeks ended
     January 31, 1998, and 35 weeks ended October 4, 1997 (_Combined
     1997_), respectively, were on a combined basis $140.5 or 12.9%
     less than net retail sales for the 52 weeks ended February 1,
     1997 (_1996_) due to the numerous store closings that occurred at
     the end of 1996 and during 1997 as well as a 2% reduction in
     same-store sales.  During Combined 1997, the apparel segment
     experienced a 2.8% decrease in same-store sales.  The footwear
     segment's same-store sales were flat for the year.  Compared to
     1996, the Company averaged approximately 127 or 7.0% fewer stores
     in operation during Combined 1997.  Net sales for 1996 decreased
     by $299.0 or 21.5% from the 53 weeks ended February 3, 1996
     (_1995_).  Same-store sales declined 1.9% between 1996 and 1995.

     Cost of goods sold, including occupancy and buying expenses, as a
     percentage of sales were 73.0% for the 17 weeks ended January 31,
     1998, 70.9% for the 35 weeks ended October 4, 1997, and 71.6% in
     Combined 1997, compared with 72.6% and 74.0% in 1996 and 1995,
     respectively.  The improvement from 1996 to Combined 1997
     primarily came from the reduction of occupancy expense due to the
     closing of unprofitable stores and savings in occupancy
     throughout 1997 due to rent renegotiations in 1996.  The decrease
     in cost of goods sold from 1995 to 1996 was due primarily to the
     Company successfully renegotiating approximately 300 leases,
     which reduced occupancy and buying costs as a percentage of sales
     by 1.6%.


     Store operating and administrative expenses were 24.5% and 28.4%
     of sales for the 17 weeks ended January 31, 1998, and 35 weeks
     ended October 4, 1997, respectively, and 27.0% of sales in
     Combined 1997, compared to 25.3% in 1996 and 24.7% in 1995.  The
     increase in expense as a percentage of sales from 1996 to
     Combined 1997 was attributable to the 12.9% decrease in sales
     from 1996 to Combined 1997 and an increase in store payroll
     expense.  The increase in expense as a percentage of sales from<PAGE>



     1995 to 1996 was attributable to the 21.5% decrease in sales
     offset by a decrease in store operating expenses in 1996 as
     underperforming stores were closed at the end of 1995 and
     throughout 1996.  Expenses as a percentage of sales in 1995 were
     higher as a result of there being a partial year of results for
     Dave & Buster's, which was spun-off in June 1995.  Dave &
     Buster's had significantly higher store expenses as a percentage
     of sales compared to the Company's other operations.

     Depreciation and amortization expense of $12.0 and $20.5 for the
     17 weeks ended January 31, 1998, and 35 weeks ended October 4,
     1997, respectively, was on a combined basis $8.7 million less
     than 1996.  Depreciation and amortization expense for Combined
     1997 decreased due to store closing and the Combined 1997 and
     1996 provisions made for asset impairments as required by SFAS
     No. 121.  This decrease was partially offset by depreciation on
     the $41 in capital expenditures incurred in 1997 and amortization
     of the reorganization value in excess identifiable assets and
     favorable lease rights recorded in the Company's adoption of
     Fresh Start Accounting.  Depreciation and amortization expense
     decreased $21.6 between 1995 and 1996 due to the closing of 419
     stores in 1996.

     Interest expense of $4.9 and $4.3 for the 17 weeks ended
     January 31, 1998, and 35 weeks ended October 4, 1997,
     respectively, was on a combined basis $6.8 more than 1996, as
     interest expense was not recognized on prepetition liabilities
     prior to emergence.  Interest expense would have been $9.1 higher
     in 1995, if interest on prepetition obligations had been accrued.
      Interest income earned on the Company's cash and investment
     balances subsequent to the Chapter 11 filing of $5.9, $8.2 and
     $0.9 for the 35 weeks ended October 4, 1997, and the fiscal years
     1996 and 1995, respectively, was recorded as a credit to
     restructuring and reorganization expenses in the consolidated
     statements of operations.

     Restructuring and reorganization expenses for the 35 weeks ended
     October 4, 1997, totaled $44.7, including $5.4 for early lease
     termination costs and write-offs of fixtures and equipment,
     leasehold improvements and related intangible assets, $19.2 for
     legal and consulting fees, $15.8 for severance and related
     benefits, and $10.2 for various other bankruptcy and
     reorganization related expenses, reduced by $5.9 of interest
     income.  Restructuring and reorganization expenses totaled $36.3
     for 1996, including $13.7 for early lease termination costs and
     write-offs of fixtures and equipment, leasehold improvements and
     related intangible assets, $19.8 for legal and consulting fees,
     and $11.0 for various other bankruptcy and reorganization related
     expenses, reduced by $8.2 of interest income.  Of the $248.1 in
     restructuring and reorganization expense incurred since the
     petition date, $126.3 were noncash charges.  Total cash payments
     of $19.1, $20.7 and $3.7 were made in 1997, 1996 and 1995,
     respectively.

     The Company recorded charges of $2.1 for the 17 weeks ended
     January 31, 1998, $2.5 for the 35 weeks ended October 4, 1997,
     and $74.0 for 1996, to recognize the impairment of certain
     long-lived assets in accordance with SFAS 121.  Furniture and
     fixtures, goodwill and several corporate properties were written<PAGE>



     down to their fair market value.  See Note 7 to the consolidated
     financial statements.

     The efficient operation of the Company's business is dependent in
     part on its computer software programs and operating systems
     (collectively, _Programs and Systems_).  These Programs and
     Systems are used in several key areas of the Company's business,
     including merchandise purchasing, inventory management, pricing,
     sales, distribution and financial reporting, as well as in
     various administrative functions.  The Company has been
     evaluating its Programs and Systems to identify potential _Year
     2000_ compliance problems.  These actions are necessary to ensure
     that the Programs and Systems will recognize and process the year
     2000 and beyond.  It is anticipated that modification or
     replacement of most of the Company's Programs and Systems will be
     necessary to make such Programs and Systems _Year 2000_
     compliant. The Company is also communicating with suppliers,
     financial institutions and others to coordinate year 2000
     conversion.

     Based on present information, the Company believes that it will
     be able to achieve such _Year 2000_ compliance through a
     combination of modification of some existing Programs and
     Systems, and the replacement of other Programs and Systems with
     new Programs and Systems that are already _Year 2000_ compliant.
      However, no assurance can be given that these efforts will be
     successful.  The Company expects that the remediation expenses
     and capitalized costs for the installation of new software
     systems with achieving _Year 2000_ compliance will have a
     material effect on its financial results in 1998 and 1999. 
     Remediation expenses for 1998 are estimated to be $9.5 and 1999
     expenses are estimated to be $2.9.  The Company estimates that
     capitalized costs associated with the installation of new
     software systems will be $8.0 in the aggregate for 1998 and 1999.


     FINANCIAL CONDITION

     Cash, cash equivalents and investments at year-end 1997 decreased
     $145.9 from the prior year.  This reduction was primarily due to
     the cash payments made pursuant to the Plan.  As part of the
     Funding Escrow Agreement (see Note 12), the Company deposited
     $17.6 in the escrow account and reclassified $10.4 of assets held
     for sale to assets held for the escrow account.  The balance of
     the escrow account and the assets held for sale included in the
     consolidated balance sheet as of January 31, 1998, was $21.5.

     Merchandise inventories decreased by 20.3% between 1996 and 1997
     due to the numerous store closings, tighter inventory controls in
     JW and J. Riggings, and the liquidation of seasonal merchandise
     in season by various chains.

     The decrease in property and equipment, net is due to the
     Company's transfer of title to the Corporate Headquarters
     Building to the creditors, pursuant to the Plan, the recognition
     of asset impairment losses in accordance with SFAS 121 and 202
     fewer stores in operation.  Intangible assets, net increased due
     to impairments recorded in 1996, net of the impact of fresh start
     adjustments.  Additionally, the Company recorded $29.4 in<PAGE>



     Reorganization Value in Excess of Identifiable Assets based on
     Fresh Start Accounting upon emergence from bankruptcy.  Capital
     expenditures of $13.8 and $27.2 for the 17 weeks ended
     January 31, 1998, and 35 weeks ended October 4, 1997,
     respectively, were on a combined basis $19.1 greater than 1996. 
     This increase was principally related  to information systems
     development projects.

     CAPITAL RESOURCES AND LIQUIDITY

     Upon emergence from Chapter 11, the Company entered into a Loan
     Agreement (_Credit Facility_) under which the Company may borrow
     up to $200 to fund ongoing working capital needs.  The Credit
     Facility has a sublimit of $150 for the issuance of letters of
     credit.  The Credit Facility is secured by liens on inventory and
     other assets, and contains restrictive covenants including
     limitations, among other things, on store closings, additional
     liens and indebtedness, restrictions on dividend payments and
     minimum net worth requirement. As of January 31, 1998, the
     Company had  $43.1 available for borrowing under the Credit
     Facility, excluding excess letters of credit related to the
     Company's previous credit facility of $40.3.

     During April 1998, the Company finalized an amendment to its
     Credit Facility to reduce the $100 minimum net worth requirement
     (as defined) to $70 during the period January 31, 1998, to
     February 3, 2003, which improved the Company's financial
     flexibility.  The Company expects that its cash and investments
     and the Credit Facility will continue to provide it with
     sufficient liquidity to conduct its operations and pay for
     merchandise shipments.

     Overall, cash provided (used) from operating activities of $40.5
     for the 17 weeks ended January 31, 1998, and $(37.7) for the 35
     weeks ended October 4, 1997, respectively, decreased on a
     combined basis by $82.7 from 1996.  The decrease was principally
     attributable to: (1) a tax refund of $37.6 in 1996,
     (2) reorganization and bankruptcy emergence payments, and
     (3) financing of inventory through short-term borrowings instead
     of merchandise accounts payable.

     Overall, cash from operating activities remained constant between
     1995 and 1996, although the components varied from 1995 to 1996.
      Merchandise inventories decreased during 1996, but not to the
     same extent as in 1995, when the Company experienced inventory
     flow disruptions after the Chapter 11 filing.  Cash flow from
     operations increased in 1996 because of the receipt of the income
     tax refund.  In 1995 the increase was primarily attributable to a
     $71.0 decrease in inventory offset by the deterioration in 1995
     net income.

     Fiscal year 1998 capital expenditures are expected to decrease by
     approximately 40% from Combined 1997 levels.  As the Company
     continues to focus on improving merchandise content in its
     existing store base, fewer remodelings and conversions of
     existing stores are expected in 1998 compared to 1997.  Current
     business plans anticipate as few as 38 new stores and conversions
     for 1998 depending on market opportunities and successful lease
     negotiations.  Overall, cash and cash equivalents balances are<PAGE>



     expected to be lower in 1998 as compared to 1997, since Combined
     1997's activity included $78.5 from the liquidation of short-term
     investments.

     The Company operated at a net loss of $15.4 million during the 17
     weeks ended January 31, 1998, which is typically the strongest
     quarter of the year.  During this period of time, store for store
     sales declined from the prior year in each of the months.  Due to
     the Company's poor operating results, management has defined
     certain aspects of its business strategy (Note 2).  It is
     expected that these actions will increase store traffic and store
     for store sales and reduce expenses.  However, the Company's
     ability to improve its performance will depend upon a variety of
     other factors, some of which are beyond its control, including
     significantly improving store sales performance and operating
     results, the apparel and footwear retailing environment, general
     economic conditions, customer response to its new merchandising
     strategies and continued cost reductions.


     This Report contains _forward-looking statements_ within the
     meaning of Section 21E of the Securities Exchange Act of 1934, as
     amended.  The words _anticipate,_ _believe,_ _expect,_ _will,_
     _could_ and similar expressions are intended to identify certain
     forward-looking statements.  Such statements reflect the
     Company's current views with respect to future events and
     financial performance and involve risks and uncertainties,
     including, without limitation, the risks described above.  Should
     one or more of these risks or uncertainties occur, or should
     underlying assumptions prove incorrect, actual results may vary
     materially and adversely from those anticipated, believed or
     otherwise indicated.  Consequently, these cautionary statements
     qualify all of the forward-looking statements made in this
     Report.



     MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION


     Management is responsible for the integrity and objectivity of
     the financial statements and other information included in this
     annual report.  The financial statements have been prepared in
     conformity with generally accepted accounting principles. 
     Information that is not subject to objective determination has
     been developed based upon management's best judgment.

     The Company maintains accounting systems that management believes
     are sufficient to provide reasonable assurance of reliable
     financial statements and to maintain accountability for assets. 
     These systems are supported by careful selection and training of
     qualified personnel.  The extent of internal accounting controls
     implemented must be related to the benefits derived, and the
     balancing of the cost of controls to the benefits derived
     requires management's estimates and judgments.  Management
     continually reviews, modifies and improves its systems of
     accounting and controls in response to changes in business
     conditions and operations, and in response to recommendations in
     the reports prepared by the independent public accountants.<PAGE>




     The Board of Directors has an Audit Committee, which is comprised
     totally of members of the board who are not employees of the
     Company.  The committee meets with the independent auditors and
     representatives of management to discuss auditing and financial
     reporting matters.  The independent auditors meet with the Audit
     Committee, with and without management representatives present,
     to discuss the scope and results of their examinations, the
     quality of financial reporting, and the propriety of management's
     conduct of the business.

     Management is committed to conducting its business affairs in
     accordance with the highest ethical standards and in conformity
     with the law.




     REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



     To the Stockholders and Board of Directors of
     Edison Brothers Stores, Inc.:


     We have audited the accompanying consolidated balance sheet of
     Edison Brothers Stores, Inc. (a Delaware corporation) and
     subsidiaries as of January 31, 1998, and the related consolidated
     statements of operations, common stockholders' equity (deficit)
     and cash flows for the 17 weeks ended January 31, 1998 (as
     reorganized), and the 35 weeks ended October 4, 1997
     (pre-confirmation).  These financial statements are the
     responsibility of the Company's management.  Our responsibility
     is to express an opinion on these financial statements based on
     our audit.

     We conducted our audit in accordance with generally accepted
     auditing standards. 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.

     As discussed in Notes 3 and 4 to consolidated financial
     statements, the Company emerged from bankruptcy and adopted
     fresh-start reporting as of October 4, 1997, in accordance with
     American Institute of Certified Public Accountants Statement of
     Position 90-7, _Financial Reporting by Entities in Reorganization
     under the Bankruptcy Code._  The effects resulting from the
     adoption of fresh-start reporting and the forgiveness of debt
     have been reflected in the statement of operations for the 35
     weeks ended October 4, 1997.  Accordingly, all consolidated
     financial statements prior to October 4, 1997, are not comparable<PAGE>



     to the consolidated financial statements for periods after the
     implementation of fresh-start reporting.

     In our opinion, the financial statements referred to above
     present fairly, in all material respects, the financial position
     of Edison Brothers Stores, Inc. and subsidiaries as of
     January 31, 1998, and the results of their operations and their
     cash flows for the 17 weeks ended January 31, 1998, and the 35
     weeks ended October 4, 1997, in conformity with generally
     accepted accounting principles.

     The accompanying financial statements have been prepared assuming
     that the Company will continue as a going concern.  As discussed
     in Note 2 to the consolidated financial statements, the Company
     has continued to suffer recurring losses which raises substantial
     doubt about the Company's ability to continue as a going concern.
      Management's plans in regard to these matters are also described
     in Note 2.  The financial statements do not include any
     adjustments that might result from the outcome of this
     uncertainty.




     /s/Arthur Andersen LLP

     St. Louis, Missouri,
          April 24, 1998



     REPORT OF ERNST & YOUNG LLP,
     INDEPENDENT AUDITORS


     Stockholders and Board of Directors
     Edison Brothers Stores, Inc.


     We have audited the consolidated balance sheets of Edison
     Brothers Stores, Inc. (the Company and its principal operating
     subsidiaries in reorganization under Chapter 11 of the United
     States Bankruptcy Code since November 3, 1995, see Note 1 to the
     consolidated financial statements) as of February 1, 1997, and
     February 3, 1996, and the related consolidated statements of
     operations, common stockholders' equity (deficit), and cash flows
     for each of the three years in the period ended February 1, 1997.
      These financial statements are the responsibility of the
     Company's management.  Our responsibility is to express an
     opinion on these financial statements based on our audits.

     We conducted our audits in accordance with generally accepted
     auditing standards. 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<PAGE>



     the overall financial statement presentation.  We believe that
     our audit provides a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above
     present fairly, in all material respects, the consolidated
     financial position of Edison Brothers Stores, Inc. at February 1,
     1997, and February 3, 1996, and the consolidated results of its
     operations and its cash flows for each of the three years in the
     period ended February 1, 1997, in conformity with generally
     accepted accounting principles.

     The accompanying consolidated financial statements have been
     prepared on a going concern basis which contemplates continuity
     of the Company's operations and realization of its assets and
     payment of its liabilities in the ordinary course of business. 
     As described more fully in Note 1, on November 3, 1995, Edison
     Brothers Stores, Inc. filed a voluntary petition for relief under
     Chapter 11 of the United States Bankruptcy Code and is currently
     operating its business as a debtor-in-possession under the
     supervision of the Bankruptcy Court.  The Chapter 11 filing was
     the result of violation of certain debt covenants, recurring
     operating losses, deterioration of vendor support, and cash flow
     problems.  These conditions raise substantial doubt about the
     Company's ability to continue as a going concern.  Management's
     plans to finance operating activities and further reorganize
     operations are also described in Notes 2 and 3.  The
     appropriateness of using the going concern basis is dependent
     upon, among other things, approval of a plan of reorganization by
     the Bankruptcy Court, attainment by the Company of profitable
     future operations, and its ability to generate sufficient cash
     from operations and other financing sources to support its
     business activities.  As a result of the reorganization
     proceedings, the Company may sell or otherwise dispose of assets
     and liquidate or settle liabilities for amounts other than those
     reflected in the financial statements referred to above. 
     Further, a plan of reorganization, as finally approved by the
     Bankruptcy Court, could materially change the amounts currently
     recorded.  The accompanying consolidated financial statements do
     not reflect further adjustments that might be necessary to the
     carrying value of assets and the amounts and classification of
     liabilities or stockholders' equity (deficit) as a consequence of
     these bankruptcy proceedings.

     As discussed in Note 1, in fiscal 1996, the Company charged its
     method of accounting for the impairment of long-lived assets and
     for long-lived assets to be disposed of.

     /s/Ernst and Young LLP

     St. Louis, Missouri,
          March 14, 1997

     <TABLE>

     CONSOLIDATED STATEMENTS OF OPERATIONS
     (Dollars in Millions, except per share data)

     CAPTION
<PAGE>



                                 As         Pre-Confirmation
                                 Reorganiz
                                 ed
                                                       Year      Year
                                 17 Weeks   35 Weeks   Ended     Ended
                                 Ended      Ended      Februar   Februar
                                 January    October    y 1,      y 3,
                                 31, 1998   4, 1997    1997      1996
     <S>                          <C>        <C>       <C>       <C>
     Net Retail Sales              $ 336.1    $ 613.8   $1,090.4  $ 1,389.4
     Costs and Expenses:
     Cost of goods sold,              245.2      435.2    791.9   1,027.7
     occupancy and buying
     expenses
     Store operating and               82.3      174.2    276.3     343.7
     administrative expenses
     Depreciation and                  12.0       20.5     41.2      62.8
     amortization
     Interest expense, net              4.9        4.3      2.4      25.2
     Restructuring and                  ---       44.7     36.3     167.1
     reorganization expenses
     Pension settlement gain            ---     (15.8)      ---       ---
     Impairment of long-lived           2.1        2.5     74.0       ---
     assets
     Other operating expenses           3.9        6.0      8.1      14.0
     Total                            350.4      671.6  1,230.2   1,640.5
     Loss before income taxes,
     extraordinary item and the      (14.3)     (57.8)  (139.8)   (251.1)
     effects of fresh start
     adjustments
     Income tax (benefit)               1.1        0.3      3.4    (29.1)
     provision
     Loss before extraordinary
     item and the effects of         (15.4)     (58.1)  (143.2)   (222.0)
     fresh start adjustments
     Extraordinary item:
     Gain on debt forgiveness           ---        8.3      ---       ---
     Fresh start adjustments            ---        2.9      ---       ---
     Net Loss                     $  (15.4)  $  (46.9)  $ (143.2)  $(222.0)
                                                                 
     Net Loss Per Common Share
     Loss before extraordinary
     item and fresh start              $          $          $          $
     adjustments                     (1.51)     (2.62)   (6.46)   (10.06)
     Extraordinary item                 ---        .38      ---       ---
     Fresh start adjustments            ---        .13      ---       ---
     Net Loss per basic &              $          $          $          $
     diluted share                   (1.51)     (2.11)   (6.46)   (10.06)
     Basic & diluted average
     shares outstanding                10.2       22.2     22.2      22.1
     (millions)
     <fn3>
     See accompanying notes.
     </fn3>
     </TABLE>

     TABLE
<PAGE>



     CONSOLIDATED BALANCE SHEETS
     (Dollars in Millions, except per share data)
     <CAPTION>

                                                 As         Pre-
                                                 Reorganize Confirmatio
                                                 d          n
                                                 January 31 February 1,
                                                 ,          1997
                                                 1998
     <S>
     ASSETS

     Current Assets:                                 <C>          <C>
     Cash and cash equivalents                     $   58.2     $ 125.6
     Investments                                        ---        78.5
     Merchandise inventories                          167.9       210.7
     Other current assets                              28.1        21.7

          Total Current Assets                        254.2       436.5

     Property and Equipment                           121.1       146.0

     Reorganization Value in Excess of
     Identifiable Assets, net of accumulated           28.4         ---
     amortization of $1.0

     Other Assets                                      39.3        62.4
          Total Assets                              $ 443.0     $ 644.9

      LIABILITIES AND COMMON STOCKHOLDERS' EQUITY (DEFICIT)

     Current Liabilities:
     Merchandise accounts payable                  $   43.2    $   50.7
     Expense accounts payable                          29.3        28.1
     Other current liabilities                         72.8        41.0

          Total Current Liabilities                   145.3       119.8

     Liabilities Subject to Settlement under            ---       508.3
     Reorganization Proceedings

     Long-Term Debt                                   127.7         ---

     Postretirement and Other Employee Benefits        46.7         ---

     Other Liabilities                                  1.6        18.9
          Total Liabilities                           321.3       647.0

     Common Stockholders' Equity (Deficit):
     Common stock                                       0.1        22.2
     Capital in excess of par value                   130.5        76.9
     Common stock warrants                              7.0         ---
     Accumulated deficit                             (15.4)     (101.6)
     Foreign currency translation adjustment          (0.5)         0.4
          Total Common Stockholders' Equity           121.7       (2.1)
     (Deficit)

          Total Liabilities and Common              $ 443.0     $ 644.9<PAGE>



     Stockholders' Equity (Deficit)
     <fn4>
     See accompanying notes

     Common stock has a par value of $.01 and $1 per share at
     January 31, 1998, and February 1, 1997, respectively.  At
     January 31, 1998, 10,225,000 shares were outstanding (Note 13). 
     At February 1, 1997, 22,201,778 shares were outstanding and
     5,352,454 were held in treasury.
     </fn4>
     </TABLE>

     <TABLE>

     CONSOLIDATED STATEMENTS OF CASH FLOWS
     (Dollars in Millions)

     <CAPTION>
                                   As         Pre-Confirmation
                                   Reorganiz
                                   ed
                                                         Year      Year
                                   17 Weeks   35 Weeks   Ended     Ended
                                   Ended      Ended      February  Februar
                                   January    October     1,       y 3,
                                   31, 1998   4, 1997    1997      1996
     <S>                            <C>        <C>     <C>       <C>
     Cash Flows from Operating
     Activities:
     Net loss                       $ (15.4)   $ (46.9)  $(143.2)  $(222.0)
     Adjustments to reconcile net
     loss to net cash provided by
     (used in) operating
     activities:
     Extraordinary item and fresh
     start adjustments                   ---     (11.2)       ---      ---
     Depreciation and                   12.0       20.5      41.2     62.8
     amortization
     Restructuring and                   ---        3.3      11.7    111.3
     reorganization expenses
     Loss on disposal of property        1.5        3.1       ---      ---
     and equipment
     Provision for deferred
     income taxes, net of                ---        ---       ---      4.5
     valuation allowance and
     acquisitions
     Impairment of long-lived            2.1        2.5      74.0      ---
     assets
     Pension settlement gain             ---     (15.8)       ---      ---
     Changes in assets and
     liabilities, net of effects
     from acquisitions and
     dispositions:
     Merchandise inventories            37.2      (0.1)      39.9     71.0
     Other assets                        0.6        3.0      49.9   (16.8)
     Accounts payable, accrued
     expenses and other                  2.5        3.9       5.4     67.7
     liabilities<PAGE>



     Other                               ---        ---       6.6      6.9
          Total Operating               40.5     (37.7)      85.5     85.4
     Activities

     Cash Flows from Investing
     Activities:
     Capital expenditures             (13.8)     (27.2)    (21.9)   (37.2)
     (Increase) decrease in              ---       78.5    (78.5)      ---
     investments
     Net proceeds from disposal          ---        1.7       ---     17.1
     of subsidiaries
     Payment for companies and
     assets purchased, net of            ---        ---       ---   (14.1)
     cash acquired
     Other                               ---        0.9       0.8      2.7
          Total Investing             (13.8)       53.9    (99.6)   (31.5)
     Activities

     Cash Flows from Financing
     Activities:
     Payments on liabilities           (5.8)     (96.9)       ---      ---
     subject to compromise
     (Increase) decrease in              6.4     (17.6)       ---      ---
     senior note interest escrow
     Proceeds from prepetition           ---        ---       ---     60.0
     debt issuance
     Net prepetition short-term          ---        ---       ---     11.4
     debt borrowings
     Dividends on common stock           ---        ---       ---    (9.3)
     Other                               5.9      (2.3)       0.1      6.2
          Total Financing                6.5    (116.8)       0.1     68.3
     Activities
     Effect of exchange rate             ---        ---       ---    (9.6)
     changes on cash

     Cash Provided (Used)               33.2    (100.6)    (14.0)    112.6

     Beginning cash and cash            25.0      125.6     139.6     27.0
     equivalents

     Ending Cash and Cash            $  58.2  $    25.0  $  125.6   $ 139.6
     Equivalents

     Cash Payments (Receipts)
     for:
     Interest                       $    7.6     $  0.9    $  0.4     $23.9   
                                                   
     Income taxes                   $    0.1     $ 0.1    $ (37.9)  $ (0.7)
     <fn5>
     See accompanying notes
     </fn5>
     </TABLE>

     <TABLE>
     CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY (DEFICIT)
     (Dollars in Millions, except per share data)
     <CAPTION>
                                                  Retaine<PAGE>



                                   Capital Commo  d         Foreign
                            Commo  in      n      earning   currency
                            n      Excess  Stock  s         Translati
                            Stock  of      Warra  (accumu   on
                                   Par     nts    lated     Adjustmen
                                   Value          deficit   t
                                                  )
     <S>                    <C>    <C>     <C>    <C>       <C>
     Balance at
     January 28, 1995 _     $      $       $ --   $ 303.8   $ (15.1)
     Pre-Confirmation       22.0   76.5

     Net loss               ---    ---     ---    (222.0)   ---
     Stock options
     exercised and          0.1    0.2     ---    ---       ---
     employee benefit
     plans
     Spin-off of            ---    ---     ---    (30.9)    ---
     subsidiary
     Foreign currency
     translation            ---    ---     ---    ---       15.1
     adjustment
     Dividends on common
     stock - $.42 per       ---    ---     ---    (9.3)     ---
     share

     Balance at February    22.1   76.7    ---    41.6      ---
     3, 1996 _ Pre-
     Confirmation

     Net loss               ---    ---     ---    (143.2)   ---
     Employee benefit       0.1    0.2     ---    ---       ---
     plans
     Foreign currency
     translation            ---    ---     ---    ---       0.4
     adjustment

     Balance at February
     1, 1997 - Pre-         22.2   76.9    ---    (101.6)   0.4
     Confirmation

     Net loss before
     extraordinary item
     and the effect of      ---    ---     ---    (58.1)    ---
     fresh start
     adjustments
     Restricted stock       ---    0.1     ---    ---       ---
     Fresh start
     adjustments and        (22.2  (77.0)  ---    159.7     ---
     extraordinary item     )
     New stock and warrant  0.1    130.5   7.0    ---       ---
     issuance
     Foreign currency
     translation            ---    ---     ---    ---       (0.4)
     adjustment

     Balance at October 4,
     1997 _ Emergence Date  0.1    130.5   7.0    ---       ---<PAGE>



     Net loss               ---    ---     ---    (15.4)    ---
     Foreign currency
     translation            ---    ---     ---    ---       (0.5)
     adjustment

     Balance at January
     31, 1998 - As          $      $ 130.5 $ 7.0  $         $  (0.5)
     Reorganized            0.1                   (15.4)
     <fn6>
     See accompanying notes
     </fn6>
     </TABLE>

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     (Dollars in Millions, except shares and per share data)

     Note 1:  Description of Business and Summary of Significant
     Accounting Policies


     Business _ Edison Brothers Stores, Inc. (the _Company_) owns and
     operates chains of specialty retailing stores located in forty-
     seven states, the District of Columbia, Puerto Rico, the Virgin
     Islands, and Canada.  The Company conducts its principal
     operations in two segments, apparel and footwear.  On November 3,
     1995 (the _Petition Date_), the Company and 65 of its
     subsidiaries (the _Debtors_) filed petitions for relief under
     Chapter 11 of the United States Bankruptcy Code (the _Bankruptcy
     Code_) in the United States Bankruptcy Court (the _Court_) in
     Wilmington, Delaware.  The Debtors' Amended Joint Plan of
     Reorganization (the _Plan_) was confirmed by the Court on
     September 9, 1997.  The Company emerged from Chapter 11 on
     September 26, 1997 (for financial reporting purposes, the
     effective _Emergence Date_ is October 4, 1997).  During the
     period from November 3, 1995, through September 26, 1997, the
     Company operated as debtor-in-possession.

     Fiscal Year _ The Company's fiscal year ends on the Saturday
     closest to January 31.  References to 1996 and 1995 are to the 52
     weeks ended February 1, 1997, and 53 weeks ended February 3,
     1996, respectively.  References in 1997 to the new Reorganized
     Company are for the period from October 5, 1997, through
     January 31, 1998, and references to the Pre-Confirmation Company
     are for the period from February 2, 1997, to October 4, 1997.

     Fresh Start Accounting - The Company adopted Fresh Start
     Accounting as prescribed in _Statement of Position 90-7 of the
     American Institute of Certified Public Accountants,_ entitled
     _Financial Reporting by Entities in Reorganization under the
     Bankruptcy Code (SOP 90-7),_ which resulted in the creation of a
     new reporting entity without any accumulated deficit and
     restatement of the Company's assets and liabilities to their
     estimated fair market values (Note 4).  Because of the
     applications of Fresh Start Accounting, the financial statements
     for periods after reorganization are not comparable to the
     financial statements for periods prior to reorganization.  A
     black line has been drawn on the accompanying consolidated
     financial statements to distinguish between the Reorganized
     Company and the Pre-Confirmation Company.<PAGE>




     The accounting policies described below represent the accounting
     policies for all periods presented.

     Consolidation _ The financial statements include the accounts of
     all subsidiaries; intercompany accounts and transactions have
     been eliminated.

     Income Taxes _ The liability method as described in Statement of
     Financial Accounting Standards (_SFAS_) No. 109, _Accounting for
     Income Taxes,_ is used to compute deferred income taxes resulting
     from temporary differences in the recognition of income and
     expense items for tax and financial reporting purposes.

     Interest Expense _Interest expense for the 17 weeks ended
     January 31, 1998, has been reduced by $.5 of interest income and
     in 1995 (prior to the Petition Date) interest expense has been
     reduced by $1.8 of interest income.  Interest income incurred
     during the period the Company operated as a debtor-in-possession
     is $5.9 for the 35 weeks ended October 4, 1997, $8.2 and $0.9 for
     1996 and 1995, respectively, is included in restructuring and
     reorganization expenses.

     Store Preopening and Closing Costs _ Store preopening costs are
     expensed as incurred.  Closing costs are accrued at the time the
     decision is made to close a store.

     Net Loss Per Common Share _ The Company adopted the provisions of
     SFAS 128, _Earnings Per Share,_ under which earnings per share is
     measured at two levels: basic earnings per share and diluted
     earnings per share.  The Company reported a loss for all years
     presented and, therefore, shares issuable under stock option
     plans are antidilutive.

     Cash and Cash Equivalents _ Short-term investments with
     maturities of three months or less at the time of purchase are
     reported as cash equivalents.

     Investments _ As of January 31, 1998, the Company had no
     investments.  Investments at February 1, 1997, consisted of U.S.
     government debt securities which mature in less than one year,
     and are classified as available-for-sale. The amortized cost,
     which approximates fair value, of these securities is adjusted
     for amortization of premiums and accretions of discounts to
     maturity. Amortization, interest and dividends are included as a
     reduction in interest expense or as a reduction in restructuring
     and reorganization expense.

     Merchandise Inventories _ Inventories are stated at the lower of
     cost or market, primarily determined by the retail inventory
     method.

     Depreciation and Amortization - The Company utilizes the
     straight-line method of depreciation and amortization.  Property
     and equipment is amortized over the lesser of the estimated
     useful life of the asset or the life of the lease (Note 7).  The
     Company amortizes its Reorganization Value in Excess of
     Identifiable Assets (Note 4) over 10 years and the Fair Value of<PAGE>



     Lease Rights (Note 8) over the remaining life of the respective
     leases.

     Long-Lived Assets and Reorganization Value in Excess of
     Identifiable Assets _ SFAS 121, _Accounting for Long-Lived Assets
     and for Long-Lived Assets to be Disposed of,_ requires that
     long-lived assets be reviewed for impairment whenever events or
     changes indicate that the carrying amount of an asset may not be
     recoverable.  The Company considers such factors as management's
     plans for future operations, recent operating results and
     projected cash flows in evaluating an impairment (Note 7).

     Foreign Currency Translation - Assets and liabilities of the
     Company's foreign affiliates are translated at current exchange
     rates while revenues and expenses are translated at average rates
     prevailing during the year.  Translation adjustments are reported
     as a component of common stockholders' equity.

     Estimates _ The preparation of financial statements in conformity
     with generally accepted accounting principles requires management
     to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and revenues and expenses
     during the reporting period.  Actual amounts could differ from
     those estimates.

     Reclassifications _ Certain prior-year items have been
     reclassified to conform to the current-year presentation.

     Effect of New Accounting Standards

     In 1997, the FASB issued SFAS No. 130, _Reporting Comprehensive
     Income,_ which requires that the amounts of certain items,
     including gains and losses on certain securities, be reported in
     the enterprise's financial statements, and SFAS No. 131,
     _Disclosures about Segments of an Enterprise and Related
     Information,_ which establishes annual and interim reporting and
     disclosure standards for an enterprise's operating segments. 
     Adoption of these statements will not significantly impact the
     Company's consolidated financial position, results of operations
     or cash flows, and will be limited to the form and content of its
     disclosures.  Both statements are effective commencing in the
     1998 fiscal year.


     Note 2:  Going Concern


     The accompanying consolidated financial statements have been
     prepared on a going concern basis, which assumes continuity of
     operations and realization of assets and liquidation of
     liabilities in the ordinary course of business.

     As shown in the accompanying statement of operations, the Company
     incurred a net loss of $15.4 million in the 17 weeks since it
     emerged from bankruptcy.  In order to improve the Company's
     operating results, management has, over the last several months,
     defined certain aspects of its new business strategy, including
     an improved focus on merchandise selection and reorganization of
     certain operational functions.  The Company has consolidated the<PAGE>



     key support functions of store management, merchandise planning
     and allocation and marketing in order to better leverage critical
     skills and reduce costs.  Additionally, the Company has recently
     reduced the staffing in its headquarters office by approximately
     15%.

     The Company's ability to improve its financial position will be
     influenced by, among other things, store sales performance and
     operating results, the overall apparel and footwear retailing
     environment, general economic conditions and customer response to
     its new merchandising strategies and continued cost reductions. 
     The Company's ability to continue operations as a going concern
     is dependent upon its ability to generate sufficient cash flow
     and earnings to meet its obligations on a timely basis, to comply
     with the terms of its financing agreements (Note 12), and to
     obtain additional financing or refinancing as may be required in
     the future.


     Note 3:  Reorganization


     On November 3, 1995, the Company filed a voluntary petition for
     relief under Chapter 11 of the U.S. Bankruptcy Code and operated
     its business as a debtor-in-possession under the supervision of
     the Bankruptcy Court from November 3, 1995, to September 26,
     1997.  On September 9, 1997, the Bankruptcy Court entered an
     order confirming the Company's Plan of Reorganization.  The
     Company emerged from Chapter 11 on September 26, 1997 (for
     financial reporting purposes, the effective Emergence Date is
     October 4, 1997).

     The Plan provided for general unsecured creditors to receive: 
     (i) $99.0 ($96.9 distributed to creditors and $2.1 distributed to
     the Limited Liability Companies established pursuant to the
     Plan); (ii) 10 year, 11% unsecured notes in the principal amount
     of $120 (with approximately the first three years of interest
     pre-funded and no scheduled principal payments until maturity in
     2007) (_Senior Notes_); (iii) 10,000,000 shares of new common
     stock of the Company (_New Common Stock_); (iv) title to the
     Company's headquarters building in downtown St. Louis (_Corporate
     Headquarters Building_), which the Company continues to occupy
     (Note 11); and (v) $51.2 from the Company's pension plan less any
     taxes and other expenses attributable to the termination of the
     pension plan (_Pension Plan Proceeds_).  The Company also
     terminated its pension plan as of May 31, 1997, and has
     established a replacement plan effective January 1, 1998
     (Note 10).

     All of the Company's shares of common stock existing at the
     Emergence Date were cancelled.  The Plan provided for holders of
     equity interests in the Company existing as of the Emergence Date
     to receive eight-year warrants to purchase a total of
     approximately nine percent of the New Common Stock at an exercise
     price of $16.40 (Note 13).

     

     <TABLE>

     Liabilities Subject to Settlement under Reorganization
     Proceedings

     The principal categories of claims classified as liabilities
     subject to settlement under reorganization proceedings are
     identified below.
     <CAPTION>
                                                    Pre-Confirmation
                                                    35 Weeks   Februar
                                                    Ended      y 1,
                                                    October    1997
                                                    4, 1997
     <S>                                              <C>      <C>
     Long-term senior notes payable                   $ 150.0  $ 150.0
     Notes payable _ banks                              205.9    205.9
     Cash set-off applied to debt                       (3.6)    (3.6)
     Capital lease obligations                            8.4     12.4
     Accrued interest payable                             4.6      4.3
     Deferred debt costs                                (4.3)    (4.3)
     Postretirement and other employee benefits           ---     47.7
     (Note 10)
     Accounts payable                                    37.3     36.1
     Lease termination claims                            44.6     42.8
     Taxes                                                3.8      6.0
     Other                                                4.2     11.0
     Distributions and debt forgiveness               (450.9)      ---

     Total liabilities subject to settlement under    $   ---  $ 508.3
     reorganization proceedings

     </TABLE>     

     Prior to the bankruptcy filing and certain agreements, the
     Company's debt consisted of $150.0 of senior notes held by
     various institutional lenders.  The unsecured senior notes had
     maturities from 7 to 15 years, with interest rates ranging from
     7.09% to 8.04%.  The Company also had outstanding borrowings
     under a $125.0 revolving credit facility, as well as $80.9 of
     short-term and demand notes under uncommitted bank lines with
     varying interest rates and maturity dates.  In addition, the
     Company had $8.4 in capital lease obligations relating to its
     Washington, Missouri distribution center.

     During 1995, the Company entered into override agreements with
     its existing lenders.  The override agreements covered existing
     1995 financial covenants and deferred principal repayments
     otherwise due December 1, 1995.  Furthermore, the Company's
     primary existing letter of credit bank agreed to continue to
     provide letters of credit through the override period.  In
     exchange for these concessions, the Company paid a one-time
     forbearance fee of $3.6 and agreed to increase the interest rate
     on the outstanding debt to 9.75%.

     Contractual interest related to the above debt not paid or
     accrued was $23.6 for the 35 weeks ended October 4, 1997, $35.0
     and $9.1 for the years ended 1996 and 1995, respectively.

     During 1997, postretirement benefit accruals of $42.2 and pension
     accruals of $5.5 were reclassified from liabilities subject to<PAGE>



     settlement under reorganization proceedings to other noncurrent
     liabilities.  Under the Plan, the Company has assumed these
     liabilities, subject to the Company's ability to amend or
     otherwise modify these plans (Note 10).

     As part of the Chapter 11 reorganization process, the Company
     attempted to notify all known or potential creditors of the
     Filing for the purpose of identifying all prepetition claims
     against the Company.  Generally, creditors whose claims arose
     prior to the Petition Date had until August 1, 1996, to file
     claims or be barred from asserting claims in the future.  Claims
     arising from rejection of executory contracts by the Company on
     or after July 1, 1996, and claims related to certain other items
     were permitted to be filed by other dates set by the Bankruptcy
     Court.

     Pursuant to the an order of the Bankruptcy Court dated May 13,
     1997, the assets and liabilities of the Debtors were deemed to be
     substantively consolidated for purposes of the Plan.  As a
     result, among other things, for purposes of the Plan, all
     duplicative claims against the Debtors were consolidated and all
     guarantee and similar claims were eliminated.  Substantive
     consolidation, however, does not affect, among other things, the
     separate legal and corporate structure of the individual Debtors.

     <TABLE>

     Restructuring and Reorganization

     The Company recorded restructuring and reorganization expenses in
     accordance with SOP 90-7 prior to emergence from Chapter 11. 
     Restructuring and reorganization expenses are summarized below:
     <CAPTION>
                                      Pre-Confirmation
                                      35 Weeks   Year        Year
                                      Ended      ended       ended
                                      October    February    February
                                      4, 1997    1, 1997     3, 1996
     <S>                              <C>        <C>         <C>
     Payroll and related expenses         $ 15.8    $   5.6    $   ---
     Consulting fees                        13.0       15.4        2.2
     Legal fees                              6.2        4.4        1.5
     Estimated costs of store                5.4       13.7      101.6
     closings
     Relocation and other                    4.2        1.1        ---
     facility-related expenses
     Loss on sale of subsidiaries            0.3        0.9       33.0
     Interest income                       (5.9)      (8.2)      (0.9)
     Accelerated goodwill                    ---        ---       15.1
     amortization
     Other                                   5.7        3.4       14.6
     Total restructuring and              $ 44.7     $ 36.3    $ 167.1
     reorganization expenses

     </TABLE>

     Note 4:  Fresh Start Accounting and Reporting<PAGE>



     Pursuant to SOP 90-7, the Company adopted Fresh Start Accounting
     which resulted in the creation of a new reporting entity.  Also,
     the Company's assets and liabilities were recorded at estimated
     fair market value as of the Emergence Date.

     As a result of the implementation of Fresh Start Accounting, the
     financial statements of the Reorganized Company are not
     comparable to the financial statements of the Pre-Confirmation
     Company.

     The new common stock issued on the Emergence Date has been
     recorded at the value contained in the Plan of $137.6 million and
     represented the Company's estimated enterprise value less the
     fair value of its debt.

     The difference between the value of the Company's stock and the
     fair value of assets and liabilities as of the Emergence Date was
     $29.4 and is reflected as Reorganization Value in Excess of
     Identifiable Assets in the accompanying balance sheet.

     <TABLE>

     The Reorganization and the adoption of Fresh Start Accounting
     resulted in the following adjustments to the Company's condensed
     consolidated balance sheet as of October 4, 1997:
     <CAPTION>
                    October 4, 1997
                                Debt       Fresh      Other      As
                    Pre-        Forgivene  Start      Adjustmen  Reorgan
                    Confirmati  ss (a)     Adjustmen  ts (c)     ized
                    on                     ts (b)
     <S>            <C>         <C>        <C>        <C>        <C>
     ASSETS

     Total Current     $ 368.6        $      $  (5.8)     $ 63.3  $ 327.1
     Assets                        (99.0)

     Assets Held          10.8        ---         ---     (10.8)      ---
     for Sale
     Escrowed              ---        ---        (.4)       10.8     10.4
     Assets
     Property and
     Equipment, net      140.8     (19.8)         ---        ---    121.0
     Intangible            ---        ---         ---        5.2      5.2
     Assets, net
     Reorganization
     Value in
     Excess of             ---        ---         ---       29.4     29.4
     Identifiable
     Assets
     Prepaid              58.6        ---        24.3     (63.3)     19.6
     Pension
     Expense
     Other Assets          9.7        ---       (3.3)        ---      6.4
     Total Assets      $ 588.5  $ (118.8)      $ 14.8     $ 34.6  $ 519.1
     LIABILITIES
     AND COMMON
     STOCKHOLDERS'
     EQUITY<PAGE>



     (DEFICIT)

     Total Current     $ 133.9     $           $ 12.7     $ 50.6  $ 206.1
     Liabilities                      8.9

     Liabilities
     Subject to
     Settlement
     under               450.9    (400.3)         ---     (50.6)      ---
     Reorganization
     Proceedings
     Long-Term Debt        1.3      126.7         ---        ---    128.0
     Postretirement
     and Other            48.0        ---       (1.4)        ---     46.6
     Employee
     Benefits
     Other                14.5        ---         0.6     (14.3)       .8
     Liabilities
     Common
     Stockholders'
     Equity
     (Deficit):
     Common Stock         22.2         .1         ---     (22.2)      0.1
     Capital in
     excess of par        77.0      130.5         ---     (77.0)    130.5
     value
     Common stock
     warrants              ---        7.0         ---        ---      7.0
     Accumulated       (159.7)        8.3         2.9      148.5      ---
     deficit
     Foreign
     currency
     translation
     adjustment and        0.4        ---         ---      (0.4)      ---
     other
     Total
     Liabilities
     and Common
     Stockholders'     $ 588.5  $ (118.8)      $ 14.8     $ 34.6  $ 519.1
     Equity
     (Deficit)

     <fn7>
     (a)  Records the discharge of indebtedness pursuant to the Plan.
      Liabilities Subject to Settlement under Reorganization
     Proceedings of $450.9 were reduced by new equity of $137.6,
     Senior Note and other long-term debt of $126.7, cash payments of
     $96.9 and other settlements.  The excess of indebtedness
     eliminated over the fair value of securities issued in settlement
     of those claims, $8.3, is reflected as an extraordinary item in
     the 35 weeks ended October 4, 1997.

     (b)  Adjustments made to record assets and liabilities at
     estimated fair market values.  Significant adjustments include
     the termination of the old pension plan (settlement gain less
     excise taxes and income taxes) which resulted in a $2.9 credit
     for the 35 weeks ended October 4, 1997.<PAGE>



     (c)  Adjustments to reflect the elimination of the remaining
     deficit in stockholders' equity after the adjustments arising
     from (a) and (b) above and to reflect the associated excess of
     reorganization value over amounts allocable to identifiable
     assets.  Also reflects the termination of the Company's pension
     plan pursuant to the Plan and capitalization of favorable lease
     rights related to the transfer of the Corporate Headquarters
     Building and store locations.
     </fn7>
     </TABLE>

     Note 5:  Income Taxes

     <TABLE>
     The provision (benefit) for income taxes consists of:
     <CAPTION>
                            As         Pre-Confirmation
                            Reorganiz
                            ed
                            17 Weeks   35 Weeks   Year       Year
                            Ended      Ended      Ended      Ended
                            January    October    February   February
                            31, 1998   4, 1997    1, 1997    3, 1996
     <S>                    <C>        <C>        <C>        <C>
     Current expense
     (benefit):
     Federal                    $ 0.7      $ ---    $   0.5    $ (35.6)
     Foreign                      0.2        ---        0.7         0.3
     State and local              0.2        0.3        2.5         1.7
     Deferred expense           (4.8)        3.1     (13.5)      (39.0)
     (benefit)
     Deferred tax                 4.8      (3.1)       13.2        43.5
     valuation allowance
     Total provision            $ 1.1     $  0.3    $   3.4    $ (29.1)
     (benefit)
     </TABLE>
     <TABLE>
     Significant components of the deferred tax liabilities and assets
     in the consolidated balance sheets are as follows:
     <CAPTION>
                                                 As         Pre-
                                                 Reorganiz  Confirmati
                                                 ed         on
                                                 January    February
                                                 31,        1,
                                                 1998       1997
     <S>                                         <C>        <C>
     Accelerated depreciation                       $   3.4     $   4.9
     Pension income                                     4.3        15.6
     Other                                              1.4         2.6
     Total deferred tax liabilities                     9.1        23.1
     Inventory capitalization                           4.0         5.2
     Rent expense accruals                              0.3         6.3
     Postretirement benefits                           16.2        16.6
     Restructuring reserves                             1.8        17.9
     Net operating loss carryforward                   28.0        13.8
     Other                                             17.2        20.0
     Total deferred tax assets                         67.5        79.8
     Less:  Deferred tax valuation allowance           58.4        56.7<PAGE>



     Net deferred tax asset                           $ ---       $ ---
     </TABLE>
     During 1997 and 1996, the Company concluded that it likely would
     not be able to realize its deferred tax assets.  Accordingly,
     allowances against the net deferred tax asset balance of $58.4
     and $56.7, respectively, and are reflected in the consolidated
     financial statements.
     <TABLE>
     Reconciliation of federal statutory rates to effective income tax
     rates:
     <CAPTION>
                            As         Pre-Confirmation
                            Reorganiz
                            ed
                            17 Weeks   35 Weeks   Year       Year
                            Ended      Ended      Ended      Ended
                            January    October    February   February
                            31, 1998   4, 1997    1, 1997    3, 1996
     <S>                    <C>        <C>        <C>        <C>
     Federal corporate      (35.0%)    (35.0%)    (35.0%)    (35.0%)
     statutory rate
     State and local
     income taxes, net of   1.4        0.5        0.5        (0.4)
     federal benefit
     Goodwill amortization  2.4        ---        4.5        3.3
     and write off
     Increase in net
     operating loss
     carryforwards and      32.6       35.0       32.4       17.3
     change in valuation
     allowance
     Other                  6.3        ---        ---        3.2
     Actual tax expense     7.7%       0.5%       2.4%       (11.6%)
     (benefit)
     </TABLE>
     Pretax earnings from foreign subsidiaries were $2.9 in 1997, $1.9
     in 1996 and $0 in 1995.

     As of January 31, 1998, the Company had a net operating loss
     carryforward for federal income tax purposes of approximately
     $71.4, which is available to offset future taxable income through
     2013.  The Company also had a capital loss carryforward for
     federal income tax purposes of $11.9 which is available to offset
     future capital gains through 2001.  In addition, the Company had
     an alternative minimum tax credit carryforward of approximately
     $1.4, which is available to reduce future regular income taxes
     over an indefinite period.  Implementation of the Company's plan
     of reorganization may significantly reduce the various
     carryforward items.

     The Company is currently undergoing an examination by the
     Internal Revenue Service (_IRS_) of its income tax returns for
     1992 through 1996.  Also, the IRS has asserted deficiencies
     against the income tax returns of the Company for the tax years
     1986 through 1991, which the Company is contesting.  The Company
     believes that the ultimate resolution of these matters will not
     have a material adverse impact on its financial condition.

     TABLE
<PAGE>



     Note 6:  Other Current Assets


     Components of other current assets include:
     <CAPTION>
                                                  As          Pre-
                                                  Reorganize  Confirmati
                                                  d           on
                                                  January     February
                                                  31,         1,
                                                  1998        1997
     <S>                                          <C>         <C>
     Prepaid expenses                             $ 13.7      $ 16.1
     Senior note interest escrow (Note 12)        11.2        ---
     Other                                        3.2         5.6
     Other Current Assets                         $ 28.1      $ 21.7

     </TABLE>

     Note 7:  Property and Equipment

     <TABLE>
     Property and equipment are stated at cost as follows:
     <CAPTION>
                                        Estimat
                                        ed        As         Pre-
                                        Useful    Reorganiz  Confirmati
                                                  ed         on
                                        Life      January    February
                                                  31, 1998   1, 1997
     <S>                                <C>       <C>        <C>
     Land                               ---       $ 1.8      $  4.9
     Buildings                          10-47     6.0        24.0
                                        years
     Leasehold improvements             1-15      67.6       170.3
                                        years
     Furniture and equipment            3-8       52.8       137.3
                                        years
     Property held under capital leases 10-50     2.3        9.6
                                        years
     Total cost                                   130.5      346.1
     Accumulated depreciation and                 (9.4)      (200.1)
     amortization
     Property and equipment                       $ 121.1    $ 146.0

     </TABLE>

     Depreciation and amortization expense was $10.1 for the 17 weeks
     ended January 31, 1998, $20.4 for the 35 weeks ended October 4,
     1997, and $35.3 and $52.1 for fiscal years 1996 and 1995,
     respectively.

     During 1996, the Company implemented SFAS 121, _Accounting for
     Long-Lived Assets and for Long-Lived Assets to be Disposed of._ 
     Provisions made for impairments of long-lived assets were as
     follows:

     <TABLE>
     CAPTION
<PAGE>



                                      As         Pre-Confirmation
                                      Reorganiz
                                      ed
                                      17 Weeks   35 Weeks   Year
                                      Ended      Ended      Ended
                                      January    October    February
                                      31, 1998   4, 1997    1, 1997
     <S>                              <C>        <C>        <C>
     Assets held for sale (corporate  $ ---      $ ---      $   4.8
     land and buildings)
     Buildings                        ---        ---        21.5
     Furniture, equipment and         2.1        2.3        5.3
     leasehold improvements
     Intangibles                      ---        0.2        42.4
     Impairment of long-lived assets  $   2.1    $   2.5    $ 74.0
     </TABLE>

     Note 8:  Other Assets

     <TABLE>

     Components of other assets include:

     <CAPTION>

                                                  As         Pre-
                                                  Reorganiz  Confirmati
                                                  ed         on
                                                  January    February
                                                  31,        1,
                                                  1998       1997
     <S>                                          <C>        <C>
     Assets held for senior note interest escrow  $ 10.3     $ 10.9
     Intangible assets, net of accumulated        4.3        ---
     amortization of $1.0
     Prepaid pension expense (Note 9)             16.3       41.3
     Other                                        8.4        10.2
     Other Assets                                 $ 39.3     $ 62.4

     </TABLE>

     Pursuant to the Plan, the Company transferred assets held for
     sale into an escrow account.  The escrow assets consist of
     corporate properties, some of which are no longer used by the
     Company. Proceeds from the sale of these escrowed assets will be
     used to pay interest obligations on the Senior Notes (Note 12).

     Intangible assets consists of favorable lease rights for the
     Corporate Headquarters Building and store locations, and are
     being amortized over the remaining life of the leases.

     <TABLE>

     Note 9:  Other Current Liabilities

     Components of other current liabilities includes:

     <CAPTION>
                                                As          Pre-<PAGE>



                                                Reorganiz   Confirmatio
                                                ed          n
                                                January 31  February 1,
                                                1998        1997
     <S>                                        <C>         <C>
     Assumed prepetition reclamation            $   3.0     $  --
     Accrued payroll and vacations              10.2        10.7
     Other taxes                                28.2        5.7
     Other                                      31.4        24.6
     Other Current Liabilities                  $ 72.8      $ 41.0

     </TABLE>

     Other taxes as of January 31, 1998, include $12.7 in excise taxes
     and $7.0 of income taxes related to the termination of the Old
     Pension Plan (Note 10).


     Note 10:  Postretirement and Other Employee Benefits


     On May 31, 1997, the Company's qualified pension plan existing as
     of that date (the _Old Plan_) was terminated and a new qualified
     plan (the _New Plan_) was implemented effective January 1, 1998.
      Participants receiving benefits under the Old Plan received
     annuity contracts purchased on their behalf.  All participants
     who were not receiving benefits under the Old Plan were fully
     vested upon termination of the Old Plan.  Such participants had
     the option to have the net present value of their vested benefits
     transferred into the New Plan, or converted into an annuity
     contract.  The Company, as a result of purchasing annuities for
     retirees, recorded a pension settlement gain of $15.8 net of
     excise taxes which is included in the consolidated statement of
     operations for the 35 weeks ended October 4, 1997.

     The New Plan covers employees who have met certain age and
     service eligibility requirements.  Qualified employees receive an
     age-based credit calculated as a percentage of prior year
     earnings.  Interest is credited to participant accounts at the
     average yield on 10-year U.S. Treasury securities.

     In determining the actuarial present value of projected future
     benefits for the 17 and 35 weeks of 1997 and for fiscal years
     1996 and 1995, the weighted-average discount rate was 7.25%, 7.5%
     and 7.0%, respectively, and the rate of increase in future
     compensation levels was assumed to be 5.65% for each such period.
      For the 17 and 35 weeks of 1997 and fiscal years 1996, and 1995,
     the assumed rate of return on assets was 7.5%, 9.5% and 9.5%,
     respectively.  Plan assets consist primarily of equity and fixed
     income securities.

     <TABLE>

     The plans' funded status was as follows:

     <CAPTION>
                                                   (New       (Old Plan)
                                                   Plan)      Pre-
                                                   As         Confirmati<PAGE>



                                                   Reorganiz  on
                                                   ed
                                                   January    February
                                                   31, 1998   1, 1997
     <S>                                           <C>        <C>
     Actuarial present value:
     Vested benefit obligation                     $ 21.3     $   45.8
     Nonvested benefit obligation                  ---        3.4
     Accumulated benefit obligation                21.3       49.2
     Projected benefit obligation (PBO)            23.0       60.0
     Plan assets at market value                   38.9       137.9
     Plan assets in excess of PBO                  15.9       77.9
     Unrecognized net asset existing at year-end   0.4        (36.6)
     Prepaid pension expense                       $ 16.3     $   41.3

     </TABLE>

     <TABLE>

     Net pension (income) expense includes the following components:

     <CAPTION>
                                     As         Pre-Confirmation
                                     Reorganiz
                                     ed
                                     17 Weeks   35 Weeks  Year    Year
                                     Ended      Ended     Ended   Ended
                                     January    October   1996    1995
                                     31, 1998   4, 1997
     <S>                             <C>        <C>       <C>     <C>
     Service cost                    $  0.6     $  1.6    $       $  
                                                          1.9     1.5
     Interest cost                   0.4        2.3       4.2     3.5
     Actual return on assets         (0.5)      (10.5)    (24.3)  (30.7)
     Net amortization and deferrals  (0.2)      4.0       13.6    21.5
     Net pension (income) expense    $  0.3     $  (2.6)  $       $
                                                          (4.6)   (4.2)

     </TABLE>

     The Company provides supplemental pension benefits under non-
     qualified plans which are not funded.  The total liability for
     these plans was $5.2 as of January 31, 1998, and $5.5 as of
     February 1, 1997.  Net pension expense for these plans was $.1
     for the 17 weeks ended January 31, 1998, $.6 for the 35 weeks
     ended October 4, 1997, and $1.1 and $1.0 for fiscal years 1996
     and 1995, respectively.  The non-qualified pension liability is
     classified as liabilities subject to settlement under
     reorganization proceedings as of February 1, 1997, and included
     in postretirement and other employee benefits as of January 31,
     1998.

     The Company provides an employee savings plan that permits
     employees to make contributions in accordance with Internal
     Revenue Code Section 401(k).  Employees who meet age and service
     requirements are eligible to participate by contributing up to
     15% of their pretax compensation or the dollar threshold
     established by the Internal Revenue Service.  For 1997, 1996 and
     1995, the Company matched a portion of the employee's<PAGE>



     contribution under a predetermined formula based on the Company's
     return on equity.  Beginning January 1, 1997, the Company
     matches, with cash, 25 cents for every dollar a participant
     saves, up to 6% of his or her annual pay.  The Company's expense
     related to the plan was $.2 for the 17 weeks ended January 31,
     1998, $.4 for the 35 weeks ended October 4, 1997, $.4 for fiscal
     1996, and $.2 for fiscal 1995.

     The Company at its discretion provides a defined-dollar benefit
     health and life plan to its retirees and their eligible spouses
     and dependents.  To qualify, generally an employee must retire at
     age 55 or later with at least 15 years of credited service under
     the pension plan.  The health care portion of the plan is
     contributory, with retiree contributions subject to an annual
     adjustment.  The life insurance portion of the plan is
     noncontributory.  The Company funds, as needed, plan costs in
     excess of retiree contributions.  The Company has reserved the
     right to modify or terminate these benefits.

     <TABLE>

     The Company's accrued benefit costs for postretirement benefits
     are as
     follows:

     <CAPTION>
                                                 As         Pre-
                                                 Reorganiz  Confirmati
                                                 ed         on
                                                 January    February
                                                 31,        1,
                                                 1998       1997
     <S>                                         <C>        <C>
     Accumulated postretirement benefit
     obligation:
     Retirees                                    $ 29.0     $ 35.7
     Fully-eligible active plan participants     1.6        1.9
     Other active plan participants              3.2        3.3
     Unrecognized net gain                       6.8        1.4
     Prior service cost                          1.2        ---
     Accrued contributions                       (0.3)      (0.1)
     Accrued postretirement benefit cost         $ 41.5     $ 42.2

     </TABLE>

     The accrued benefit cost was classified as liabilities subject to
     settlement under reorganization proceedings as of February 1,
     1997.

     <TABLE>

     Postretirement benefit expense consists of:

     <CAPTION>
                           As         Pre-Confirmation
                           Reorganiz
                           ed
                           17 Weeks   35 Weeks   Year       Year
                           Ended      Ended      Ended      Ended<PAGE>



                           January    October    February   February
                           31, 1998   4, 1997    1, 1997    3, 1996
     <S>                   <C>        <C>        <C>        <C>
     Service cost          $ 0.1      $ 0.1      $ 0.2      $ 0.2
     Interest cost         0.8        2.2        3.1        3.2
     Postretirement        $ 0.9      $ 2.3      $ 3.3      $ 3.4
     benefit expense

     </TABLE>

     The weighted average health care cost trend rate used in
     measuring the accumulated postretirement benefit obligation is
     7.5% for 1998, declining gradually to 5% by the year 2003 and
     remaining at that level thereafter.  A 1% increase in the assumed
     health care cost trend rate would increase the accumulated
     postretirement benefit obligation by $1.3 as of January 31, 1998,
     and the net periodic postretirement benefit cost the 35 weeks
     ended October 4, 1997, and the 17 weeks ended January 31, 1998,
     by $0.1.  The weighted average discount rate used in determining
     the accumulated postretirement benefit obligation was 7.25% and
     7.50% as of January 31, 1998, and February 1, 1997, respectively.


     Note 11:  Leases


     Most of the Company's store operations are conducted in leased
     premises.  Some of the leases include options for renewal or
     extension on various terms.  Additionally, as part of the Plan,
     the Company entered into a three year lease with renewal options
     for the Corporate Headquarters Building. Minimum rentals for
     operating leases were $29.1 for the 17 weeks ended January 31,
     1998, $59.1 for the 35 weeks ended October 4, 1997 and $101.2 and
     $136.3 for fiscal years 1996 and 1995, respectively.  Additional
     percentage rentals based on retail sales were $.4 for the 17
     weeks ended January 31, 1998, $1.0 for the 35 weeks ended
     October 4, 1997, $2.0, and $3.5 for fiscal years 1996 and 1995,
     respectively.  Most leases also require the payment of common
     area expenses and real estate taxes.

     <TABLE>

     <CAPTION>

     Future minimum lease payments at January 31, 1998, were as
     follows:

           <S>                                       <C>
           1998                                      $
                                                     80.2
           1999                                      71.8
           2000                                      60.6
           2001                                      46.8
           2002                                      34.8
           Thereafter                                57.3
           Total future minimum lease payments       $351.
                                                     5

     /TABLE
<PAGE>




     Note 12:  Financing Arrangements

     SENIOR NOTES

     Pursuant to the Plan, the Company issued senior notes in the
     aggregate principal amount of $120 due on September 26, 2007
     (_Senior Notes_).  The Senior Notes bear interest at a fixed rate
     of 11% per annum from July 31, 1997, payable semi-annually on
     January 31 and July 31 of each year, commencing January 31, 1998.
      At January 31, 1998, the estimated fair value of the Senior
     Notes was $112.8.  To secure the payment of approximately the
     first three years of interest on the Senior Notes, the Company,
     entered into a Funding Escrow Agreement.  Additionally, the
     Company transferred assets held for sale into the escrow account
     (Note 6 and Note 8).

     The Senior Notes may be redeemed, at the option of the Company,
     in increments of not less than $5 at the following Redemption
     Prices (expressed as percentages of the principal amount):

           Emergence Date through June 30, 1998          100% of par
           July 1, 1998 through June 30, 1999104% of par
           July 1, 1999 through June 30, 2000103% of par
           July 1, 2000 through June 30, 2001102% of par
           July 1, 2001 through June 30, 2002101% of par
           July 1, 2002 through September 26, 2007       100% of par

     In the event a change in control occurs (as defined in the Trust
     Indenture and First Supplemental Trust Indenture (together, the
     _Indenture_) pursuant to which the Senior Notes were issued),
     each Senior Note holder may, at the option of the holder, require
     the Company to repurchase all or any of such holder's Senior
     Notes at a price equal to 101% of par plus accrued interest.  In
     the event the Company makes extraordinary asset sales (as defined
     in the Indenture) and if the net proceeds thereof not otherwise
     required to be paid to other lenders exceeds $5, 50% of such net
     sale proceeds must be used to pay principal under the Senior
     Notes.

     The Indenture limits, without prior consent, the incurrence of
     new indebtedness and liens, disposition of assets and the payment
     of dividends.  As of January 31, 1998, the Company was in
     compliance with these covenants.

     CREDIT FACILITY

     At the Emergence Date, the Company entered into a loan agreement
     with Congress Financial Corporation as agent (the _Agent_) and
     the CIT Group/Business Credit, Inc. as co-agent for a $200
     revolving credit facility secured by inventory and other related
     assets, to fund ongoing working capital needs and to provide
     letter of credit financing (the _Credit Facility_).  The Credit
     Facility has a sublimit of $150 for the issuance of letters of
     credit.  The Credit Facility is intended to provide the Company
     with the cash and liquidity to conduct its operations and expires
     on September 26, 2002.<PAGE>



     At the Company's option, the Company may borrow under the Credit
     Facility at the Prime Rate (as defined in the Credit Facility),
     or at the Eurodollar Rate (as defined in the Credit Facility)
     plus 2.25%.  The borrowing rate as of January 31, 1998, was 8.5%.

     The maximum borrowing, up to $200, is limited to 60% of the value
     of eligible inventory (as defined in the Credit Facility) or 85%
     of the Net Recovery Cost Percentage of the inventory (as defined
     in the Credit Facility) multiplied by the cost of eligible
     inventory, plus 95% of the aggregate amount of cash held by the
     Agent as collateral, less any availability reserves established
     by the Agent.  During the period commencing August 1 through and
     including December 15 of each year, the borrowing limit
     calculation uses 70% of eligible inventory and 100% of the Net
     Recovery Cost Percentage.

     The Company is required to pay an unused line of credit fee of
     .375% per annum.

     The Credit Facility as amended, contains covenants including,
     among other restrictions, a limitation on store closings,
     limitations on the incurrence of additional liens and
     indebtedness, limitations on sales of assets, required minimum
     adjusted net worth, as defined, and a prohibition on paying
     dividends.

     As of January 31, 1998, there were no outstanding borrowings
     under the Credit Facility.  Outstanding letters of credit were
     $98.8 and available borrowings were $43.1, excluding excess
     letters of credits related to the Company's previous credit
     facility of $40.3.  The weighted average of outstanding
     borrowings and average interest rate was $6.6 and 8.5%,
     respectively, for the 17 weeks ended January 31, 1998.  On
     April 13, 1998, the Credit Facility was amended to reduce the
     minimum net worth requirement from $100 million to $70 million
     during the period January 31, 1998, to February 3, 2001.

     Other

     The Company has outstanding promissory notes of $6.7, bearing
     interest at rates between 6.25% and 6.5%.  Certain of these notes
     contain a put option, exercisable on January 1, 2000 and on each
     January 1 thereafter, whereby, at the option of the noteholders,
     the Company would be required to redeem in full the then
     outstanding principal.


     Note 13:  Common Stock


     The Reorganized Company is authorized to issue 100,000,000 shares
     of common stock.  At January 31, 1998, 9,291,900 shares had been
     issued.  Approximately 933,100 additional shares will be issued
     upon completion of distributions under the Plan. 

     A total of 225,000 shares of restricted New Common Stock were
     issued as of the Emergence Date to certain executives of the
     Company.  Such stock vests over periods up to two years from such
     date and compensation is recognized over the vesting period based<PAGE>



     on the fair value of the New Common Stock as of the issuance
     date.  Some of the stock issued to certain executives was vested
     as of January 31, 1998, in connection with the termination of
     their employment.

     All per share data for the Reorganized Company in the financial
     statements has been computed using the 10,225,000 total shares
     expected to be issued under the terms of the Plan.

     Stock Option Plans

     Pursuant to the Plan, the 1997 Stock Option Plan (the _1997 Stock
     Option Plan_), the 1997 Directors Stock Option Plan (the
     _Directors Stock Option Plan_) and certain Restricted Stock
     Agreements were approved.

     The 1997 Stock Option Plan makes available for the granting of
     options to key employees an aggregate of 800,000 shares of New
     Common Stock.  As of January 31, 1998, options with respect to
     753,500 shares were outstanding under the 1997 Stock Option Plan.
      The exercise price of these options is between $5.58 and $6.125
     per share.

     The Directors Stock Option Plan makes available for the granting
     of options to members of the Board of Directors who are not
     employees of the Company an aggregate of 200,000 shares of New
     Common Stock.  As of January 31, 1998, options with respect to
     17,500 shares had been issued under the Directors Stock Option
     Plan.  The exercise price under these options is $5.58.

     Outstanding stock options on January 31, 1998, were 771,000
     shares at $5.58 to $6.125 per option.  The weighted average
     remaining contractual life was 9.8 years at a weighted average
     exercise price of $5.78, no options were exercisable on January
     31, 1998.  Under the Plan, all options of the Pre-Confirmation
     Company existing at September 26, 1997, were canceled.

     Outstanding stock options on June 29, 1995, were adjusted, as a
     result of the Dave & Buster's, Inc. spin-off.  The number of
     shares subject to each option was increased by 33.1% and the
     exercise price was reduced by 24.9%.

     During 1995, 175,050 options with exercise prices ranging from
     $25.38 to $37.25 were canceled and reissued at an exercise price
     of $14.81.

     <TABLE>

     Activity under these plans was as follows:

     <CAPTION>

                 As Reorganized
                 17 Weeks Ended      35 Weeks Ended
                 January 31, 1998    October 4, 1997
                           Weighted
                           average             Option
                 Number of price     Number    price
                 Options   per       of        per share<PAGE>



                           share     Options
     <S>         <C>       <C>       <C>       <C>
     Outstandin
     g at
     beginning   ---       $ ---     629,601   $ 4.31-
     of period                                 27.98
     Granted     826,500   5.77      ---       ---
     Exercised   ---       ---       ---       ---
     Canceled    (55,500)  5.58      (629,601  4.31-27.98
                                     )
     Outstandin
     g at end    771,000   5.78      ---       ---
     of period
     Shares
     exercisabl
     e at end    ---       ---       ---       ---
     of period

     </TABLE>

     <TABLE>

     <CAPTION>

                 Year Ended           Year Ended
                 February 1, 1997     February 3, 1996

                           Option              Option
                 Number    price      Number   Price
                 of        per share  of       Per share
                 Options              Options
     <S>         <C>       <C>        <C>      <C>
     Outstanding
     at
     beginning   1,108,0   $4.31-     1,068,2  $16.13-
     of period   96        27.98      31       37.25
     Granted     ---       ---        902,080  4.31-27.98
     Exercised   ---       ---        ---      ---
     Canceled    (478,49   11.13-     (862,21  11.13-
                 5)        27.98      5)       37.25
     Outstanding
     at end of   629,601   4.31-      1,108,0  4.31-27.98
     period                27.98      96
     Shares
     exercisable
     at end of   195,391   ---        321,153  ---
     period

     </TABLE>

     The Company has elected to account for stock options using
     Accounting Principles Board Opinion No. 25, _Accounting for Stock
     Issued to Employees_ (_APB 25_).  Under APB 25, because the
     exercise price of the Company's stock options generally equals
     the market price of the underlying stock at the date of grant, no
     compensation expense is recognized.

     The fair value of options granted was estimated using the
     Black-Scholes option-pricing model with the following<PAGE>



     assumptions:  expected dividend yield of 0%, expected volatility
     of 50%, risk-free interest rate of 6.2% and expected option life
     of 10 years.  Had compensation expense been determined using
     SFAS 123, the Company's net loss for the 17 weeks ended
     January 31, 1998, would have been $15.6 and basic and diluted
     loss per share would have been $1.52.  As a result of changing
     assumptions and future option grants, these hypothetical
     calculations are not expected to be representative of future
     calculations.

     Common Stock Warrants

     Pursuant to the Warrant Agreement entered into in accordance with
     the Plan, the Company has issued 1,008,791 warrants to purchase
     shares of New Common Stock (the _Warrants_).  Each Warrant
     entitles the holder thereof to purchase one share of New Common
     Stock at an exercise price of $16.40 per share, subject to
     adjustments in certain circumstances.  The Warrants expire on
     September 26, 2005.

     Holders of the Warrants have no voting rights, and are not
     entitled to receive dividends or other distributions on the New
     Common Stock.  Also, holders of the Warrants will not be entitled
     to share in any of the assets of the Company upon liquidation,
     dissolution or winding up of the Company.  If at any time the
     daily market price of the New Common Stock, as calculated
     pursuant to the terms of the Warrant Agreement, exceeds 200% of
     the then current exercise price, the Company will have the right
     upon written notice to repurchase the Warrants for a purchase
     price of $1.00 per Warrant.


     Note 14:  Acquisitions and Dispositions


     During 1995, the Company made acquisitions for an aggregate cash
     consideration of $14.1.  Assets of $19.9 and liabilities of $5.8
     were recorded in connection with the acquisitions.  The
     acquisitions were accounted for by the purchase method, and
     operating results of the acquired entities have been included in
     the consolidated financial statements since their respective
     acquisition dates.

     Effective June 29, 1995, the Company distributed all of the
     outstanding shares of common stock of Dave & Buster's, Inc. owned
     by the Company to the Company's stockholders of record as of June
     19, 1995.  Prior to the distribution, Dave & Buster's had been a
     majority-owned subsidiary engaged in the ownership and operation
     of restaurant/entertainment complexes.  No gain or loss was
     recorded as a result of the distribution.  The distribution was
     recorded as a dividend and, accordingly, the Company reduced
     retained earnings by the net book value distributed.  Through the
     distribution date, Dave & Buster's reported 1995 net income of
     $1.0.  As of June 29, 1995, it had total assets of $49.2 and a
     net book value of $30.9.

     In January 1996, the Company sold substantially all of the assets
     of its mall entertainment division.  At the date of the sale, the
     mall entertainment division had total assets of $51.8 and a net<PAGE>



     book value of $44.9.  The Company recorded a loss of $24.7 in
     1995 in connection with the sale.  The Company disposed of the
     remaining mall entertainment division in September 1997. 
     Provisions of $.1, $.9 and $8.3 were recorded for the 35 weeks
     ended October 4, 1997, 1996 and 1995, respectively, related to
     the remaining assets to be disposed.  For the 35 weeks ended
     October 4, 1997, fiscal years 1996 and 1995, the mall
     entertainment division reported net losses of $.5, $.5, and $1.8,
     respectively.


     Note 15:  Business Segments


     The Company conducts its business in two segments:  apparel and
     footwear.  Apparel's operations include J. Riggings, JW/Jeans
     West Group, Repp, Ltd, and 5-7-9.  Footwear's operations include
     Bakers/Leeds and Wild Pair.  Corporate includes the results of
     some experimental concepts that are no longer in operation.

     <TABLE>

     <CAPTION>
               Net retail sales                Operating loss
               As                              As
               Reorga Pre-Confirmation         Reorga Pre-Confirmation
               nized                           nized
               17     35                       17     35
               Weeks  Weeks  Year     Year     Weeks  Weeks   Year    Year
               Ended  Ended  Ended    Ended    Ended  Ended   Ended   Ended
               Januar Octob  Februar  Februar  Januar Octobe  Februar Februar
               y 31,  er 4,  y 1,     y 3,     y 31,  r 4,    y 1,    y 3,
               1998   1997   1997     1996     1998   1997    1997    1996
     <S>       <C>    <C>    <C>      <C>      <C>    <C>     <C>     <C>
     Apparel        $ $421.  $ 765.9  $ 952.3  $(4.0) $(4.8)  $(44.4) $(129.5
                237.0      8                                                 )
     Footwear    99.1  190.7   320.7    367.9   (1.8)  (3.7)   (15.5)    (8.9)
                336.1  612.5 1,086.6  1,320.2   (5.8) (18.5)   (59.9)  (138.4)
     Corporat     ---    1.3     3.8     69.2   (3.6) (35.0)   (77.5)   (87.5)
     e and
     other
     Interest     ---    ---     ---      ---   (4.9)  (4.3)    (2.4)   (25.2)
     expense,
     net
                    $ $613.  $1,090.  $1,389.  $(14.3 $(57.8  $(139.8 $(251.1
                336.1      8       4        4       )      )        )        )
     </TABLE>

     <TABLE>

     <CAPTION>

               Depreciation and amortization   Capital expenditures
               As                              As
               Reorga  Pre-Confirmation        Reorga  Pre-Confirmation
               nized                           nized
               17      35                      17      35
               Weeks   Weeks    Year   Year    Weeks   Weeks   Year     Year
               Ended   Ended    Ended  Ended   Ended   Ended   Ended    Ended<PAGE>



               Januar  Octobe   Februa Februa  Januar  Octobe  Februa   Febru
               y 31,   r 4,     ry 1,  ry 3,   y 31,   r 4,    ry 1,    ary
               1998    1997     1997   1996    1998    1997    1997     3,
                                                                        1996
     <S>       <C>     <C>      <C>    <C>     <C>     <C>     <C>      <C>
     Apparel       $    $ 13.6  $ 28.6  $ 36.9     $    $ 16.0  $ 15.7      $
                   6.3                             9.1                   11.2
     Footwear      2.4     5.3     9.4    10.1     2.6     4.1     5.0   10.4
                   8.7    18.9    38.0    47.0    11.7    20.1    20.7   21.6
     Corporate     3.3     1.6     3.2    15.8     2.1     7.1     1.2   15.6
     and other
                $ 12.0  $ 20.5  $ 41.2  $ 62.8  $ 13.8  $ 27.2  $ 21.9      $
                                                                         37.2

     </TABLE>
     <TABLE>
     <CAPTION>

                 Identifiable assets
                 As
                 Reorgan Pre-Confirmation
                 ized
                 January Februar   Februar
                 31,     y 1,      y 3,
                 1998    1997      1996
     <S>         <C>     <C>       <C>
     Apparel     $ 224.3  $ 267.1   $ 362.2
     Footwear      101.6    100.9     131.2
                   325.9    368.0     493.4
     Corporate     117.1    276.9     268.1
     and other
                 $ 443.0  $ 644.9   $ 761.5

     </TABLE>

     <TABLE>

     Note 16:  Quarterly Information (Unaudited)
     (Dollars in Millions, except per share data)

     <CAPTION>

               1st Quarter  2nd Quarter   3rd Quarter           4th Quarter
               13 Weeks     13 Weeks      13 Weeks              13 Weeks
               Pre-         Pre-          As     Pre-           As      Pre-
               Confirmation Confirmation  Reorg  Confirmation   Reorga  Confir
                                          anize                 nized   mation
                                          d
                                          4      9
                                          Weeks  Weeks
                                          Ended  Ended
                                          Novem  Octobe
                                          ber    r 4,
                                          1,
               1997   1996  1997   1996   1997   1997    1996   1997    1996
     <S>       <C>    <C>   <C>    <C>    <C>    <C>     <C>    <C>     <C>
     Net       $224.  $258. $236.  $268.  $      $       $      $       $
     retail    0      1     6      8      62.7   153.2   255.2  273.4   308.3
     sales<PAGE>



     Cost of
     goods
     sold,     158.1  183.7 165.4  207.3  48.7   111.7   182.9  196.5   221.0
     occupanc
     y and
     buying
     expenses
     Net       (17.1  (17.7 0.2    (25.2  (6.8)  (30.0)  (11.5) (8.6)   (88.8)
     income    )      )            )
     (loss)

     Per
     common
     shares:
     Net       (0.77  (0.80 0.01   (1.14  (0.67  (1.35)  (0.52) (0.84)  (4.00)
     income    )      )            )      )
     (loss)
     Dividend  ---    ---   ---    ---    ---    ---     ---    ---     ---
     s

     Common
     stock
     market
     price:
     High      1.94   2.94  1.19   3.88   0.50   0.56    1.81   9.25    2.19
     Low       0.45   1.31  0.25   1.63   0.13   0.38    1.06   0.13(a  1.06
                                                                )

     <fn8>

     (a)  The market price of the new Common Stock was between $4.75
     and $9.25 during the 4th quarter of 1997.
     </fn8>
     </TABLE>

     <TABLE>
     FIVE YEAR FINANCIAL SUMMARY (Unaudited)
     (Dollars in Millions, except per share data)

     <CAPTION>

                           As      Pre-Confirmation
                           Reorga
                           nized
                           As of   As of
                           and     and for Year     Year      Year    Year
                           for     the     Ended    Ended     Ended   Ended
                           the     35      Februar  Februar   January January
                           17      Weeks   y 1,     y 3,      28,     29,
                           Weeks   Ended   1997     1996      1995    1994
                           Ended   October
                           Januar  4,
                           y 31,   1997
                           1998
     <S>                   <C>     <C>     <C>      <C>       <C>     <C>
     Stores at the end of   1,605    1,634    1,745    2,077    2,761    2,866
     the period
     Net retail sales      $336.1   $613.8 $1,090.  $1,389.   $1,476. $1,462.
                                                  4        4        4        9<PAGE>



     Income (loss) before
     extraordinary item    (15.4)   (58.1)  (143.2)  (222.0)     20.5     20.9
     and effects of fresh
     start adjustments
     Total assets           443.0    519.1    644.9    761.5    893.8    873.1
     Long-term debt         127.7    128.0      ---      ---    173.5    159.2
     Common stockholders'   121.7    137.6    (2.1)    140.4    387.2    407.9
     equity (deficit)

     Per basic common
     share:
     Income (loss) before
     extraordinary item    $(1.51        $        $        $      $       $   
     and effects of fresh       )   (2.62)   (6.46)  (10.06)     0.93     0.95
     start adjustments
     Dividends on common      ---      ---      ---     0.42     1.24     1.24
     stock
     <fn9>

     Long-term debt has been reclassified to liabilities subject to
     settlement under reorganization proceedings in 1996 and 1995
     (Note 3 to the consolidated financial statements).
     </fn9>
     </TABLE>

      Board of Directors
      Jeffrey A. Cole
       Chairman and Chief Executive Officer,
       Cole National Corporation
      Jacob W. Doft
       Managing Director,
       Highline Capital Management, L.L.C.
      H. Michael Hecht
       President and Chief Executive Officer,
       Dickson Trading (North America) Inc.
      Lawrence E. Honig
       Chairman and Chief Executive Officer,
       Edison Brothers Stores Inc.
      Randolph I. Thornton
       Managing Director and Senior Credit Officer,
       Citibank N.A.
      Stephen E. Watson
       President and Chief Executive Officer,
       Gander Mountain, L.L.C.


      Edison Senior Management
      Lawrence E. Honig, Chairman and Chief Executive Officer
      Karl W. Michner, Chairman, Edison Merchandising Committee
      Carol Williams, President, 5-7-9
      Michael Fine, President, Edison Footwear Group
      Paul Eisen, President, JW/Coda/Oaktree Group
      John Oehler, President, J. Riggings
      Steve Thomas, President, REPP Ltd.
      Peter Hirschhorn, Co-general Manager, Edison Brothers Stores
       International
      Alison Talbot, Co-general Manager, Edison Brothers Stores
       International<PAGE>



      John F. Burtelow, Executive Vice President, Chief
       Administrative Officer and Chief Financial Officer
      Timothy W. Brannon, Senior Vice President, Stores
      Kimberly Richmond, Senior Vice President, Marketing
      Lee Johnson, Senior Vice President, Human Resources
      Mark H. Brown, Senior Vice President, Real Estate and
       Construction
      Alan A. Sachs, Senior Vice President, General Counsel and
      Secretary
      Lawrence Pyles, Vice President, Chief Information Officer
      Thomas McCain, Vice President, Controller
      Denise R. Parker, Vice President, Planning and Allocation
      George M. Spreiser, Vice President, Logistics

      Corporate Headquarters
      Edison Brothers Stores Inc.
      501 N. Broadway
      St. Louis, MO 63102-2102
      (314) 331-6000

      Transfer Agent and Registrar
      ChaseMellon Shareholder Services, L.L.C.
      85 Challenger Rd.
      Overpeck Center
      Ridgefield Park, NJ 07660

      For correspondence, use:
      P.O. Box 3315
      South Hackensack, NJ 07607-1900

      Independent Auditors
      Arthur Andersen, L.L.P.
      St. Louis, MO

     Annual Meeting
     The Annual Meeting of Stockholders will take place Wednesday,
     June 10, 1998, at 11 a.m. at Edison Brothers Stores Inc.
     headquarters at the address listed above.

     Common Stock
     The common stock of Edison Brothers Stores Inc. is listed on the
     Nasdaq National Market under the trading symbol _EDBR._ 

     Information Requests
     To obtain news releases, sales releases and SEC reports
     (including Form 10-K), please call (314) 331-6000 or visit the
     company Web site at www.edisonbrothers.com. Additional queries
     may be directed to Shareholder Relations at the corporate
     headquarters address listed above.


     Edison Brothers' more than 14,000 associates salute our
     shareholders, vendors and customers, and we look forward to
     continuing the partnership that will build the company's future
     success.