Securities and Exchange Commission
                             Washington, D.C. 20549

                                    Form 10-K

[X] Annual Report Pursuant To Section 13 or 15(d) of The Securities Exchange Act
of 1934 for the fiscal year ended February 1, 1997 ("Fiscal 1996").

[ ] Transition Report Pursuant To Section 13 or 15(d) of The Securities Exchange
Act of 1934 for the transition period from to ______.

                        [Commission file number 0-23874]

                          JOS. A. BANK CLOTHIERS, INC.
            (Exact name of registrant as specified in its character)

                  Delaware                              36-3189198
           (State of Incorporation)         (I.R.S. Employer Identification No.)

500 Hanover Pike, Hampstead, MD                            21074
 (Address of principal executive offices)                (zip code)

                                 (410) 239-2700
              (Registrant's telephone number, including area code)


<TABLE>
<S> <C>
Securities registered pursuant to Section 12(g) of the Act:      Securities registered pursuant to Section 12(b) of the Act:

                  Title of each class                                                            None
                  -------------------
Common Stock (the "Common Stock") par value $.01 per share
</TABLE>

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

Yes  X             No
    ---               ---

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

The  aggregate  market  value of the voting stock held by  nonaffiliates  of the
registrant,  based  upon the  closing  price of shares  of  Common  Stock on the
National  Association  of  Securities  Dealers  Automated  Quotation  ("NASDAQ")
National Market System at April 25, 1997 was approximately $25,891,267.

The number of shares of Common Stock, par value $0.01 per share,  outstanding on
April 25, 1997 was 6,791,152.

DOCUMENTS INCORPORATED BY REFERENCE:
Portions of Definitive  Proxy Statement for Annual Meeting of Shareholders to be
held on June 10, 1997 are incorporated by reference into Part III hereof.

Index to the exhibits appears on Page 18.


<PAGE>

                                     PART I
Item 1.           BUSINESS

General

         Jos. A. Bank Clothiers, Inc., (the "Company"),  established in 1905, is
a retailer, cataloger and manufacturer of Men's tailored and casual clothing and
accessories.  The Company's products are sold exclusively under the Jos. A. Bank
label  through its 68  Company-operated  retail  stores,  4 outlet  stores and 8
franchise  stores  located   throughout  the  Northeast,   Midwest,   South  and
Mid-Atlantic  regions of the U.S., as well as through the  Company's  nationwide
catalog  operations.  The  Company's  products  are  targeted at the male career
professional,  and its  marketing  emphasizes  the Jos.  A. Bank line of quality
tailored  and  casual  clothing,  which is  offered  at price  points  typically
established  at 20-30%  below those of its  principal  competitors  for items of
comparable quality. The Company believes that it is able to achieve this pricing
advantage for its men's suits, sport coats and pants, primarily by its designing
and  manufacturing  capabilities,  and for other  clothing  and  accessories  by
effectively   sourcing  and  negotiating  with  vendors.  The  Company  has  two
principal,  wholly owned  subsidiaries,  The Joseph A. Bank Mfg. Co., Inc., (the
"Manufacturer") and National Tailoring Services, Inc. ("NTS").

History

         In May 1991,  the Company  completed a debt and capital  restructuring,
under which the Company issued a combination  of new preferred  stock and Common
Stock in exchange  for all of its then  outstanding  preferred  stock and Common
Stock,  senior   subordinated  notes  and  subordinated   debentures  issued  in
connection  with the 1986 leveraged  acquisition of the Company.  As a result of
this restructuring, JAB Holdings, Inc., a Delaware corporation ("Holdings"), was
created and issued $47.4 million aggregate  principal amount of 8% Secured Notes
due December 31, 1998 (the "Notes") to the Company's former  debtholders.  There
were no cash  proceeds  from the  issuance of the Notes.  During its  existence,
Holdings had no operations  and did not incur any costs or expenses on behalf of
the Company.  As a result of this  restructuring,  Holdings became the holder of
90% of the Company's Common Stock.

         As of January 29, 1994,  the Company and  Holdings  completed a capital
restructuring,  the overall  substantive effect of which was to eliminate all of
the debt  incurred in  connection  with the 1986  leveraged  acquisition  of the
Company.  In  connection  with  such  restructuring,  Holdings  entered  into an
exchange  agreement  (the  "Exchange  Agreement")  with the holders of its Notes
pursuant  to which  all Notes  were  exchanged  for  common  stock of  Holdings.
Concurrently with the execution of the Exchange  Agreement,  the Company entered
into a merger and exchange agreement (the "Merger and Exchange  Agreement") with
Holdings  and the  Company's  other  stockholders.  Pursuant  to the  Merger and
Exchange Agreement:  (i) the Company's preferred stock was converted into Common
Stock;  (ii)  Holdings'  common stock was converted  into the  Company's  Common
Stock;  (iii) all existing  shares of the Company's  Common Stock other than the
shares issued in exchange for the Company's  preferred stock or Holdings' common
stock were canceled; and (iv) Holdings was merged into the Company.

         On May 10, 1994, the Company sold 2,000,000  shares of its Common Stock
for  $10.00  per  share in  connection  with an  initial  registration  with the
Securities Exchange Commission. The net proceeds of $16,894,000 were used to pay
off  long-term  debt of  approximately  $8,100,000  and for the  opening  of new
stores.

         In the  first  half of fiscal  1995,  the  men's  and  women's  apparel
industries began suffering a significant  down-turn.  In the face of a potential
cash shortage and other  factors  affecting  the women's  business,  the Company
decided to  discontinue  the  women's  product  line (which was sold in the same
stores as the men's  products)  to  generate  cash.  The  women's  product  line
represented  approximately  $33  million and $26 million of sales in fiscal 1994
and 1995, respectively (or 19% and 15% of sales,  respectively).  With this loss
of the women's volume,  and with the men's business  experiencing a decline (but
improving) certain  previously-profitable  stores became  unprofitable since the
store  rents  remained  basically  unchanged.  Given these  events,  the Company
performed a store-by-store  analysis to determine which stores were losing money
and not expected to generate  future cash flows that were  sufficient to support
the book values of the  related  store  assets.  Based upon this  analysis,  the
Company  determined  that (a) certain stores needed to be closed,  down-sized or
relocated  and (b) a  provision  of $3.5  million  was  required  to  write-down
specific  store  leasehold  improvements  and  equipment  and to cover  costs of
exiting several store locations.

         During fiscal year 1996, the Company focused on its core men's business
after discontinuing the women's business in 1995.  Operating income for the year
ended  February 1, 1997 improved  $18.0  million to an operating  income of $2.4
million from

                                       2

<PAGE>

an operating loss of $15.6 million in 1995.  The Company  improved its operating
income in each quarter during fiscal 1996 compared to the same quarter in fiscal
1995.  The  turnaround in operating  results for the year ended February 1, 1997
was due  primarily to a) higher  maintained  margins which were driven by strong
suit  sales,  b) the  elimination  of the  unprofitable,  lower  margin  women's
business,  c) men's  comparable  store sales  increase of 9.3 percent,  d) lower
operating  expenses  and e) the  closure of  several  unprofitable  stores.  The
Company also  restructured  several leases to support its  men's-only  business,
adjusted  its  manufacturing  capacity,  relocated  three stores and lowered its
store selling expenses. The increased men's comparable store sales was generated
on men's average  inventory  levels that were  approximately  $5.6 million lower
than the prior year as the Company  improved its inventory  turns as well as its
product selection.

         The Company has not  completely  replaced  the volume  generated by the
women's  division which generated sales of  approximately  $26 million in fiscal
1995. To increase  sales and improve the leverage of its assets,  the Company is
opening new  stores,  including  six stores  that were opened in fall 1996.  The
Company expects to open up to ten new stores in 1997.

Strategy

         The Company's  strategy is to further enhance its competitive  position
in men's  proprietary  label,  updated apparel,  including a full line of casual
wear, and accessories and to capitalize on the strength of the Jos. A. Bank name
and reputation through enhanced product offerings within its existing store base
and to increase the number of full-line stores, primarily in existing markets.

         Store and Catalog  Operations and Growth.  The Company's strategy is to
         operate  its stores  and  catalogs  as an  integrated  business  and to
         provide the same  personalized  service to its customers  regardless of
         whether  merchandise is purchased  through its stores or catalogs.  The
         Company  believes  that the  synergy  between  the  Company  stores and
         catalogs  offers  an  important  convenience  to  its  customers  and a
         competitive advantage to the Company in identifying new store sites and
         testing new  business  concepts.  The Company  also uses its catalog to
         communicate the Jos. A. Bank image,  to provide  customers with fashion
         guidance in  coordinating  outfits and to generate store  traffic.  The
         Company believes there are  opportunities to develop spin-off  catalogs
         to the existing customer base to grow the catalog volume.

         The Company  believes that it has  substantial  opportunity to increase
         its store base by adding  stores in its  existing  markets and entering
         new  markets.  The  Company  opened four new  full-line  stores and two
         franchise  stores  in fall  1996 and it  expects  to open up to ten new
         stores in 1997.  Substantially  all of the  stores to be opened in 1997
         will be placed in existing markets which allows the Company to leverage
         its existing advertising, management and distribution.

         Competitive  Pricing and Aggressive  Promotion.  The Company is a value
         oriented retailer with price points typically established at 20% to 30%
         below  those of its  principal  competitors  for  items  of  comparable
         quality.  In addition to the Company's everyday values, the Company has
         a Corporate  Card program,  which provides  employees of  participating
         businesses  and  their  families  with  discounts  on all Jos.  A. Bank
         merchandise,  and runs promotions throughout the year, such as wardrobe
         and  trade-in  sales,  designed  to generate  store  traffic and create
         shopping excitement.


Merchandising

         The Company's target customer is a professional  man, age 25 to 55, who
is well-educated and relatively affluent.  The Company's  merchandising strategy
focuses on achieving  an updated  classic  look.  The  Company's  stores offer a
distinctive  collection  of  proprietary  label,  classic  career  clothing  and
accessories,  as well as casual wear for men, all made exclusively by or for the
Company in  predominantly  natural fibers.  The men's line includes all clothing
and  accessories  necessary to dress the career man from head to toe,  including
suits,  shirts,  vests,  ties,  sport  coats,  pants,  formal  wear,  overcoats,
mufflers, sweaters, belts and braces, socks and underwear.

         The market for classic  quality men's  clothing is segmented at various
points in men's  careers and the Company has  designed  special  collections  to
target these segments:

                                       3

<PAGE>

         "Signature Collection" - is designed for the man who has achieved
         success and is willing  to pay for the value of the best  fabric,
         superior  quality  and extra details.

         "Corporate  Collection" - was created for the confident  executive who
         is making his mark and is looking to set  himself  apart.  It features
         updated,  tailored clothing  and dress  furnishings  offered in a range
         of fabrics and  silhouettes that reflect current trends in the men's
         market.

         "Executive  Collection" - is designed for the executive creating or
         replenishing his wardrobe essentials.  It includes tailored clothing
         and dress furnishings in a broad range of basic fabrics and styles at
         affordable prices.

         "Joe's  Casual" - was created for the man who seeks the same quality
         for leisure wear as for their working lives. Classic sportswear
         featuring quality,  styling, fabric and details comparable to brands
         which are considerably more expensive.

         Since  Spring  1991,  the Company has  offered its male  customers  its
Business  Express line, a concept for purchasing  suits that allows customers to
customize their wardrobe by selecting separate,  but perfectly matched,  jackets
and pants from one of three coat  styles,  plain  front or  pleated  pants,  and
numerous fabric choices.  Matching vests are also available in selected fabrics.
The  Business  Express  line  allows  a  customer  to  buy a suit  with  minimal
alteration that fits their unique body size, similar to a custom-made suit. Jos.
A.  Bank  is one of the few  retailers  in the  country  that  has  successfully
developed this concept which the Company believes is a competitive advantage.

         The Company also signed a five-year agreement with David Leadbetter,  a
world-renowned  golf  professional,  to produce golf and other apparel under his
name.  This line will be available in the  Company's  stores and catalog in fall
1997.

Design and Purchasing

         The Jos.  A. Bank  merchandise  is  designed  through  the  coordinated
efforts of the Company's  merchandising and buying staffs working in conjunction
with either the Company's manufacturing division or contract manufacturers.  The
merchandising and buying staffs oversee the development of each product in terms
of style,  color and fabrication.  Because the Company's  designs are focused on
updated classic  clothing,  the Company  experiences much less fashion risk than
other retailers. The process of creating a new garment begins approximately nine
months  before the  product's  expected  in-store  date.  In  addition  to being
responsible  together with the merchandising  staff for selecting and developing
appropriate  products,  the  Company's  buying  staff  is also  responsible  for
providing the catalog  operations and stores with the correct amount of products
at all times.

         The Company  believes that it gains a distinct  advantage  over many of
its  competitors  in terms of quality and price by  effectively  sourcing  piece
goods and then having  merchandise  manufactured  to its own  specifications  by
contract   manufacturers,   either   domestically  or  abroad,  or  in  its  own
manufacturing  facility. For example, the Company currently buys quality English
and Italian  wool for some of its suits and Italian silk for its  neckwear,  and
then has the suits  made at its  factory  and  neckwear  hand  sewn by  contract
manufacturers  in the U.S.  The Company  buys its shirts from  leading  U.S. and
overseas  shirt  manufacturers  who also supply  shirts to many of the Company's
competitors. All clothing manufactured for the Company by contract manufacturers
must  conform  to  the  Company's  rigorous   specifications   with  respect  to
standardized sizing and quality.

         The Company transacts business on an order-by-order  basis and does not
maintain any long-term or exclusive  contracts,  commitments or  arrangements to
purchase  from any piece goods vendor or contract  manufacturer.  During  fiscal
1996, Burlington  Industries,  Inc., Warren Corporation,  Eighteen International
1981,  Ltd.,  and High Mill  Textiles  accounted for over 70% of the piece goods
purchased by the Company.  The Company does  business with all of its vendors in
U.S.  currency and has not experienced any material  difficulties as a result of
any foreign political,  economic or social  instabilities.  The Company believes
that is has good  relationships  with  its  piece  goods  vendors  and  contract
manufacturers  and that there will be adequate  sources to produce a  sufficient
supply of quality goods in a timely manner and on satisfactory economic terms.

                                       4

<PAGE>


Marketing, Advertising and Promotion

Strategy

         Historically,  the  Company  pursued a  traditional  or mass  marketing
approach in support of it's retail locations.  In 1996, in addition to employing
print and radio medias to convey its message,  direct mail usage was enhanced to
achieve improved marketing  efficiency.  Core to each campaign,  while primarily
promotional,  is the  identification of the Jos. A. Bank name as synonymous with
high  quality,  updated  classic  clothing  offered  at price  points  typically
established  at 20-30%  below those of its  principal  competitors  for items of
comparable quality. The Company has a database of over one million customers who
have made purchases  from either the catalog  and/or retail stores.  The Company
selects names from this database based on  expectations  of response to specific
promotions  which  allows the Company to more  efficiently  use its  advertising
dollars.

         In  1997,  the  Company  is  allocating  a  portion  of  its  marketing
expenditures  to image  advertising on CNN Headline  News. The Company  believes
that it has strong brand  recognition and wants to increase the awareness of its
name as a complement to its store opening strategy.

Product Specific Sales and Promotional Events

         Throughout  each  season,   the  Company  promotes  specific  items  or
categories at specific  prices that are below the normal retail price.  Examples
are the trade-in sale whereby a customer receives $75 off the purchase of a suit
by  "trading-in" an old suit which is donated to charity and the $199 suit sale.
These sales are used to complement  promotional  events and to meet the needs of
the customers. These events also include the wardrobe sale and the clearance and
roundup sales.  Twice a year the Company stores conduct  wardrobe sales in which
customers  who purchase  certain  levels of  merchandise  receive an  additional
amount of  merchandise  selected  free.  At the end of each season,  the Company
stores conduct clearance sales to promote the sale of that season's merchandise.

Corporate Card

         Through  the  Corporate  Card  program,  the Company  issues  corporate
discount cards to employees of major companies. The card provides the holder and
members of his or her immediate  family with a discount on all regularly  priced
merchandise.  The Company believes that this program  enhances  customer loyalty
from a core base of customers.

Apparel Incentive Program

         Jos. A. Bank Clothiers  apparel incentive gift certificates are used by
various  companies  as a  reward  for  achievement.  The  Company  also  redeems
proprietary  gift  certificates  marketed by major  premium/incentive  companies
through its stores and catalogs.

Jos. A. Bank Credit Card

         In addition to accepting  cash,  checks and major credit  cards,  since
1992 the Company has offered  customers its own credit card. The Company pays an
independent contractor to administer the Jos. A. Bank credit card and assume all
credit  risks.  The Company  believes that the Jos. A. Bank credit card enhances
customer loyalty while providing the customer with additional credit. At the end
of fiscal 1996, the Company had approximately  97,000 credit card accounts,  and
sales through the Jos. A. Bank credit card represented approximately 5% of total
retail  sales for the year.  The Jos.  A. Bank  credit  card also  provides  the
Company with an important tool for building its customer mailing list.

Stores

         At April 18, 1997,  the Company  operated 68 retail stores and 4 outlet
stores and had 8 franchise locations in a total of 30 states and the District of
Columbia.  The following table sets forth the region and market of the 80 stores
that were open at such date.

                                       5


<PAGE>


JOS. A. BANK STORES


                                    Total #
Region & Market                     Of Stores
---------------                  --------------

Northeast
Connecticut                         2
New York                            5
Massachusetts                       2
New Hampshire                       1
Rhode Island                        1
                                  ----
         Subtotal ...............  11
                                  ----

Mid-Atlantic
Delaware                            1
New Jersey                          3
Maryland                            6(b)
Pennsylvania                        5(b)
Washington, D.C.                    1
                                  ----
         Subtotal ...............  16
                                  ----


West
Denver, Colorado                    1
                                  ----
         Subtotal ...............   1
                                  ----


Midwest
Kansas                              1
Illinois                            6(a)
Indiana                             1
Michigan                            3
Minnesota                           1
Missouri                            1
Ohio                                4
Wisconsin                           1
                                  ----
         Subtotal ................ 18



                                    Total #
Region & Market                     Of Stores
---------------                  --------------

South
Alabama                             2(a)
Florida                             3
Georgia                             3(a)
North Carolina                      5(a)
South Carolina                      1
Kentucky                            1
Louisiana                           1(a)
Mississippi                         1(a)
Tennessee                           3(a)
Texas                               6
Virginia                            7(a),(b)
West Virginia                       1
                                  ----
         Subtotal ..............   34
                                  ----

                  TOTAL            80
                                  ====

(a) Indicates one or more franchise stores.
(b) Indicates one or more outlet stores.

                                       6



<PAGE>


         During  1996,  the  Company  opened four new  full-line  stores and two
franchise stores, and closed two unprofitable  full-line stores and five catalog
stores.  The stores that were closed  represented  approximately  2% of sales in
fiscal 1995.

         The  Company-operated  stores  are  located  in  a  variety  of  retail
settings, including high income shopping areas, malls, specialty village centers
and urban locations.  In general,  the store space in existing stores is divided
as follows:  71% selling space,  10%  stockroom,  9% tailor shop and 10% service
area. The full-line  stores  average 8,500 square feet,  with sizes ranging from
4,500 square feet to 19,000 square feet. A new store model has been developed to
support the mens-only business which requires  approximately  5,000 square feet.
The  selling  space  in newer  stores  is  typically  higher  than the  average,
(approximately  80%),  as the  Company  decreased  the  space  dedicated  to the
stockroom,  service  area and tailor  shop.  The newer  stores are  designed  to
utilize  regional  overflow  tailor shops which allows the use of smaller tailor
shops  within each store.  Each  store's  selling  area is designed to present a
broad  selection  of  products  with great  depth of  inventory,  and is divided
generally as follows: 35% men's tailored clothing;  40% other men's clothing and
accessories; and 5% fitting rooms.

         The  Company's  principal  consideration  in  selecting  store sites is
finding  locations with excellent sales potential coupled with reasonable rental
rates.  Stores in  suburban  areas are  usually  not  located  in malls,  but in
high-income  shopping  areas near major malls.  In urban  locations,  stores are
generally located in major retail or financial areas. Since the Company believes
that its stores are  destination  stores and that its customer do not like to be
inconvenienced,  the Company stores are generally  most  successful in locations
that are easily accessible and provide sufficient parking. Thus, when stores are
located within a mall, they often have a private entrance to the parking area.

         The Company  has  developed  a standard  store  design to appeal to the
Company's  quality  oriented  customers  while  remaining  consistent  with  the
Company's  value image.  The design is based on the use of wooden  fixtures with
glass  shelving,  Shaker style furniture with numerous tables to feature fashion
merchandise,  carpet,  quilted wall hangings and abundant accent lighting and is
intended to promote a pleasant and comfortable shopping environment. The Company
developed  this  standard  design to  effect  cost  savings  in the  design  and
construction of new stores.

         Stores  normally  employ a total of 5 to 25 full- and  part-time  sales
associates depending on their size. Store management consists of a store manager
and two or three department managers who are also sales associates.  The typical
store manager has ten to fifteen  years of  experience in the tailored  clothing
industry.  Store management  receives  compensation in the form of a base salary
plus a bonus based on  achieving  targeted  profit  goals.  In  addition,  store
managers  are required to meet sales  quotas.  Sales  associates  receive a base
salary  against a  commission.  A number of programs  offer  incentives  to both
management and sales associates to increase sales.

         The  Company  attributes  part of its success to its  customer  service
policies.   The  Company  encourages  sales  associates  to  develop  one-on-one
relationships with their customers.  Sales associates maintain personal business
planners containing  information on customers' sizes, favorite styles and colors
and are encouraged to call their customers when new items are stocked and before
special  promotions.  The Company strives to create an environment in its stores
in which sales associates are responsive to customers'  needs.  Sales associates
are  encouraged  to assist  customers  in  merchandise  selection  and  wardrobe
coordination, and thereby encourage multiple purchases.

         Each  full line  store  has a tailor  shop  which  provides  a range of
tailoring  services.  Approximately  79% of the  tailor  shops  are owned by the
Company,  and the remainder are leased to independent tailors. The Company plans
to convert most of the leased shops to Company-owned  shops in 1997. The Company
guarantees all the tailoring work and controls the pricing structure used in all
stores.  In addition,  NTS, the  Company's  wholly-owned  tailoring  subsidiary,
provides  alteration services primarily to the Company's stores and, to a lesser
extent,  outside retailers.  NTS has four locations - Houston (leased location),
Atlanta  (leased  location),  Chicago (in present store) and  Hampstead,  MD (in
distribution  facility).  Operating  NTS has  allowed  the Company to reduce the
number of  tailors  in the stores by sending  all  overflow  work to NTS.  These
overflow shops experience higher productivity as the tailors are not interrupted
by store  personnel  during the  course of the day.  In every  store,  the store
manager and certain  additional staff have been trained to fit tailored clothing
for alterations.

         The  Company  has eight  franchise  locations.  Generally,  a franchise
agreement  between the Company and the  franchisee  provides for a ten-year term
with an option,  exercisable by the franchisee under certain  circumstances,  to
extend the term for an additional  ten-year period.  Franchisees pay the Company
an initial fixed  franchise  fee and then a percentage of sales.  To assure that
customers at franchise  locations receive the same personalized  service offered
at Company operated stores,  the Company

                                       7

<PAGE>

typically  requires certain  franchisee  employees to attend a Company sponsored
training  program.  In  addition,  franchisees  are required to present and sell
merchandise according to the Company standardized procedures and to maintain and
protect the Company's reputation for high quality, classic clothing. Franchisees
purchase substantially all merchandise offered for sale in their stores from the
Company.

         The  Company  presently  has  four  outlet  stores  which  are  used to
liquidate  excess  merchandise and typically  offer first quality  products at a
reduced price. Because of the classic character of the Company's merchandise and
aggressive  store  clearance  promotions,  historically  the Company has not had
significant quantities of merchandise to sell through its outlet stores.

Catalog

         The  Company's   catalogs  offer   potential  and  existing   customers
convenience in ordering the Company's  merchandise.  In fiscal 1996, the Company
distributed  approximately  7.5 million  catalogs,  including  catalogs  sent to
stores for display and general  distribution.  During fiscal 1996, catalog sales
represented  approximately  11% of net sales.  The Company divides the year into
two  merchandise  seasons,  Spring  and Fall,  and mails its  catalog  to active
customers as often as every four weeks.  Catalog  circulation has  traditionally
included base  catalogs  offering a  representative  assortment of the Company's
entire range of merchandise.  In addition to providing customers  convenience in
ordering   merchandise,   the  Company  generally  uses  its  catalogs  to:  (i)
communicate its image of quality  clothing;  (ii) provide customers with fashion
guidance in coordinating outfits; (iii) generate store traffic; and (iv) provide
the Company with market data, including identification of new store locations.

         To make  catalog  shopping  as  convenient  as  possible,  the  Company
maintains a toll-free  telephone number  accessible 24 hours a day, seven days a
week. The Company utilizes  on-line computer  terminals to enter customer orders
and to retrieve  information  about  merchandise and its  availability.  Catalog
sales  associates are generally able to help select  merchandise and can provide
detailed information  regarding size, color, fit and other merchandise features.
In most cases,  sample  merchandise is available for catalog sales associates to
view, thereby allowing them to better assist customers.  Clothing purchased from
the catalog may be returned to any Company store or to the Company by mail.

         To process catalog orders, sales associates enter orders on-line into a
computerized  catalog order entry system which automatically  updates all files,
including the Company's customer mailing list and permits the Company to measure
the response to individual merchandise and catalog mailings. Sales and inventory
information  is  available  to the  Company's  buyers  the  next  day.  Computer
processing  of orders is  performed  by the  warehouse  management  system which
permits  efficient  picking  of  inventory  from the  warehouse.  The  Company's
efficient order entry and fulfillment systems permit the shipment of most orders
the following  day.  Orders are shipped  primarily by second day delivery or, if
requested, by expedited delivery services, such as UPS priority.

Distribution

         Inventory of basic  merchandise  in the Company  stores is  replenished
regularly  based on sales  tracked  through its  state-of-the-art  point-of-sale
terminals.  The Company uses a centralized  distribution system, under which all
merchandise  is  received,  processed  and  distributed  through  the  Company's
principal  distribution  facility  located in Hampstead,  Maryland.  Merchandise
received at the  distribution  center is promptly  inspected to insure  expected
quality in  workmanship  and conformity to Company  sizing  specifications.  The
merchandise  is then  allocated to  individual  stores,  packed for delivery and
shipped to the stores, principally by common carrier, usually within two days of
receipt.  Each store generally  receives a shipment of merchandise  twice a week
from the distribution center;  however, when necessary because of a store's size
or volume, a store can receive  shipments more frequently.  Shipments to catalog
customers are also made from the central distribution facility.

Management Information Systems

         Since November 1991, the Company has replaced  substantially all of its
management information systems with updated technology.  The new systems provide
for automated stock replenishment and distribution,  integrated accounts payable
and general ledger  maintenance,  purchase  order  management,  forecasting  and
planning,  extensive management  reporting  capabilities through interactive and
batch processing and a comprehensive  human  resource/payroll  system to support
future growth plans. The Company uses IBM AS\400 systems for  substantially  all
applications.

         In January  1993, a complete new mail order  system was  installed  and
integrated into the merchandising system and later

                                       8

<PAGE>

into the warehouse  management system.  Consistent with industry  practice,  the
Company uses an outside  service to analyze and provide data in connection  with
its catalog operations. The Company's last remaining mainframe system is used in
its  manufacturing  operation  and has  been  modified  to  interface  with  its
merchandising  systems.  The Company plans to eliminate this remaining mainframe
system in 1997.

         In order to assure  the  accuracy  of  inventory  from  purchase  order
through the sale of an item to the consumer,  the Company employs  sophisticated
scanning, modern point-of-sale systems and updated distribution facilities.  For
any item to be moved between  stores and for all sales in the stores a bar-coded
tag must be scanned,  which then  causes the price to be captured  via the price
look-up feature in the IBM 4680 point-of-sale  terminal.  A warehouse management
system was  installed  in August  1993 to improve  the  accuracy  and control of
warehouse  inventory.   Since  Fall  1993,  warehouse  distributions  have  been
controlled through the use of a "pick-to-light" system.

         In connection with the  millennium,  the systems in many companies will
require  significant  modification to properly handle  transactions.  A thorough
review of the impact of this change is expected in the next year.

Manufacturing

         Through its  subsidiary,  Manufacturer,  the Company makes men's suits,
sport coats and pants at its two  facilities  located in the  greater  Baltimore
area. (See Item 2-Description of Properties) As of April 18, 1997, 383 employees
worked at these manufacturing  facilities.  From the initial inspection of piece
goods through  final  finishing and  distribution,  the Company's  manufacturing
capabilities  allow it complete  control over merchandise  flow,  consistency of
sizing,  and quality.  The Company believes that its manufacturing  capabilities
also allow the Company generally to achieve greater flexibility than it would be
able to  achieve if the  Company  purchased  items of  comparable  quality  from
outside sources.  In addition,  the Company is using contract  manufacturers for
certain  categories  of its  clothing  which can  provide a quality  product  at
competitive prices.

         The Company  believes  that the  equipment and machinery it uses in its
manufacturing processes provide for efficient production and, in many instances,
represent the  state-of-the-art in the industry.  The Company currently utilizes
50% of its  cutting  capacity  based on one shift per day and 75% of its  sewing
capacity  based on one shift per day. In fiscal 1996,  the Company  manufactured
approximately  50% of its tailored  clothing  which accounts for over 60% of the
Company's sales.

Competition

         The  Company  competes   primarily  with  other  specialty   retailers,
department  stores and other  catalogers  engaged in the retail sale of apparel,
and to a lesser degree with other retailers of men's apparel.  Among others, the
Company's store and catalog operations  compete with Brooks Brothers,  Nordstrom
and Lands End, as well as local  competitors  in each  store's  market.  Many of
these major competitors are considerably  larger and have substantially  greater
financial, marketing and other resources than the Company.

         In general,  the Company  believes  that it maintains  its  competitive
position based not only on its ability to offer its quality  career  clothing at
price  points  typically  established  at 20-30%  below  those of its  principal
competitors for items of comparable  quality,  but also on greater  selection of
merchandise within the Company's focus on classic career clothing,  the quality,
consistency and value of the Jos. A. Bank brand, and superior  customer service.
The Company  believes that it is able to achieve this pricing  advantage for its
men's suits,  sports coats and pants  primarily by designing  and  manufacturing
substantially all of these items and for other men's clothing and accessories by
effectively  sourcing and  negotiating  with vendors.  In addition,  the Company
believes that its Business Express program gives the Company distinct advantages
relative to its competition.

Trademarks

         The Company is the owner in the United States of the trademark "Jos. A.
Bank".  This  trademark is  registered in the United States Patent and Trademark
Office.  A federal  registration  is renewable  indefinitely if the trademark is
still in use at the time of renewal.  The  Company's  rights in the Jos. A. Bank
trademark are a significant  part of the Company's  business.  Accordingly,  the
Company  intends to maintain its  trademark  and the related  registration.  The
Company is not aware of any claims of  infringement  or other  challenges to the
Company's  right to use its trademark in the United States.  The Company is also
the owner of pending  applications for "The Miracle Tie Collection" (U.S. Serial
No. 75/219,824) and "Joe's Casual" (U.S. Serial No. 74/726,017).

                                       9

<PAGE>

Employees

         As of April 18, 1997, the Company had 1,139 full-time employees and 281
part-time employees.

         As  of  April  18,  1997,   383  employees   worked  at  the  Company's
manufacturing facilities, approximately 97% of whom are represented by the Union
of  Needletrades   Industrial  &  Textile  Employees.   The  current  collective
bargaining agreement, which was extended in 1997, expires on April 30, 2001. The
Company  believes that union relations are good.  During the past 48 years,  the
Company has had only one work  stoppage,  which occurred more than 18 years ago.
The Company  believes that its relations  with its non-union  employees are also
good. A small number of our sales associates are union members.

Item 2.  DESCRIPTION OF PROPERTY

         Except as noted below, the Company owns its manufacturing, distribution
and corporate office facilities located in the Maryland area, subject to certain
financing liens. See "Notes to Consolidated Financial Statements -- Note 6." The
Company  believes that its existing  facilities are well  maintained and in good
operating  condition.  The table below presents certain information  relating to
the Company's corporate properties as of April 18, 1997:

<TABLE>
<CAPTION>
Location                     Gross Square Feet    Owned/Leased   Primary Function
--------                     -----------------    ------------   ----------------

<S> <C>                                                                 
Hampstead, Maryland.........      210,000            Owned       Corporate offices, distribution center,
                                                                 catalog fulfillment and regional tailoring
                                                                 overflow shop
Baltimore, Maryland.........      118,000            Owned       Coat and  pants  sewing  plant  and
                                                                 central pressing.
Baltimore, Maryland.........       51,000            Leased      Cutting facility
</TABLE>

         As of April 18,  1997,  the  Company  had 72  Company-operated  stores,
including  its outlet  stores,  all of which were  leased.  The full line stores
average 8,500 square feet, including selling ,storage,  tailor shop, and service
areas. The full line stores range in size from  approximately  4,500 square feet
to approximately 19,000 square feet. The leases typically provide for an initial
term of between 10 and 15 years, with renewal options  permitting the Company to
extend the term for between 5 and 10 years thereafter. The Company generally has
been  successful in renewing its store leases as they expire.  In most cases the
Company  pays a fixed  annual  base rent  plus a  percentage  rent  based on the
store's annual sales in excess of specified levels. Most leases also require the
Company to pay real estate taxes,  insurance and utilities  and, other than free
standing  locations,  to make  contributions  toward the common  area  operating
costs.  Most of the  Company's  lease  arrangements  provide  for an increase in
annual fixed rental payments during the lease term.

         In July 1996,  the  Company  sold a 35,000  square  foot  manufacturing
facility in Hampstead, Maryland.

Item 3.  LEGAL PROCEEDINGS

         The Company has been named as a defendant in legal actions arising from
its normal business activities.  Although the outcome of these lawsuits or other
proceedings against the Company cannot be accurately predicted, the Company does
not expect that any such  liability  will have a material  adverse effect on the
business, net assets or financial position of the Company.

         On December 14,  1995,  the Company  filed a Verified  Complaint in the
United States District Court for the Northern District of Maryland (case No. MJG
95-3826) against J.A.B. of Lexington, Inc. and its principals (the "Defendants")
alleging federal trademark  infringement,  common law trademark and service mark
infringement,  statutory  unfair  competition,  common law  unfair  competition,
breach of franchise  agreement,  breach of lease,  breach of promissory note and
breach of security  agreement.  Damages  sought in the  Verified  Complaint  are
unspecified.  The Defendants  have  counterclaimed  against the Company  seeking
declaratory  judgements,  compensatory damages and punitive damages. The Company
denies the  allegations in the  counterclaims  and intends to vigorously  defend
same.

The unfair labor  practice  charge filed by the Regional  Joint Board,  Union of
Needletrades,  Industrial  and Textile  Employees  (Baltimore  Regional  Office,
National Labor  Relations Board Case No.  5-CA-26484,  as noted in the Company's
third  quarter  10-Q,  has been  withdrawn by the Union.

                                       10

<PAGE>

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

         No matters were submitted to a vote of the Company's  security  holders
during the quarter ended February 1, 1997.

                                     PART II


Item 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) Price Range of Common Stock,  subsequent to its initial  public  offering in
May 3, 1994

         The Common Stock is quoted on the National  Association  of  Securities
Dealers Automated Quotation  ("NASDAQ") National Market System under the trading
symbol "JOSB".  The following table sets forth, for the periods  indicated,  the
range of high and low bid prices for the Common  Stock,  as  reported on NASDAQ.
The  approximate  high and low bid prices for the Common Stock  tabulated  below
represent  inter-dealer   quotations  which  do  not  include  retail  mark-ups,
mark-downs  or  commissions.  Such prices do not  necessarily  represent  actual
transactions.

                                Fiscal 1995         Fiscal 1996
                              ---------------     ---------------
                               High      Low       High      Low
                               ----      ---       ----      ---

1st Quarter ................  $4.25     $2.50     $2.50     $1.63
2nd Quarter ................   3.63      2.09      6.13      2.50
3rd Quarter ................   4.88      2.50      4.88      2.94
4th Quarter ................   3.00      1.50      5.00      3.00

1st Quarter (through April 25, 1997)              $4.38     $3.63
On April 25, 1997 the closing sale price of the Common Stock was $3.81.

(b)      Holders of Common Stock

         At April 25,  1997,  there were 169 holders of record of the  Company's
Common Stock.

(c)      Dividend Policy

         The Company  intends to retain its earnings to finance the  development
and expansion of its business and for working  capital  purposes,  and therefore
does not anticipate  paying any cash  dividends in the  foreseeable  future.  In
addition,  the Company's Credit Agreement prohibits the Company from paying cash
dividends.

Item 6.  SELECTED CONSOLIDATED FINANCIAL DATA

         The following selected consolidated financial data with respect to each
of the fiscal years in the  five-year  period  ended  February 1, 1997 have been
derived from the Company's audited  Consolidated  Financial  Statements.  Fiscal
years 1992 through 1994 and fiscal year 1996 were 52-week years, and fiscal year
1995 was a 53-week year, each of which ended on the Saturday  closest to the end
of January of the respective year. The information should be read in conjunction
with the  Consolidated  Financial  Statements  and  Notes  thereto  that  appear
elsewhere  in the 10-K and  "Management's  Discussion  and Analysis of Financial
Condition and Results of Operations."

                                       11


<PAGE>

<TABLE>
<CAPTION>
                                                                         Fiscal Year
                                          --------------------------------------------------------------------------
                                              1992          1993             1994             1995          1996
                                          -----------    -----------     -----------      ------------  ------------
                                                             (in thousands, except per share data)
<S><C>
Consolidated Statements of Income (Loss) Information:

Net Sales:
  Men's......................               $99,461       $121,319          $143,465       $143,659       $155,058
  Women's....................                23,895         28,259            32,589         25,908             --
--------------------------------------------------------------------------------------------------------------------
Net Sales (a)................               123,356        149,578           176,054        169,567        155,058
Cost of goods sold...........                65,120         79,580            94,199        100,789         84,866
--------------------------------------------------------------------------------------------------------------------
Gross profit.................                58,236         69,998            81,855         68,778         70,192
--------------------------------------------------------------------------------------------------------------------
Operating Expenses:
  General and administrative.                15,258         15,168            16,817         17,852         16,720
  Sales and marketing........                37,540         47,156            59,375         63,013         50,924
  Store opening costs........                   240          1,064             1,025             --            192
  Termination of executive equity plan           --          3,425(c)             --             --             --
  Termination of participation in
    multi-employer pension plan                  --          3,300(b)             --             --             --
  Store repositioning costs..                    --             --                --          3,500(e)          --
--------------------------------------------------------------------------------------------------------------------
 Total operating expenses....                53,038         70,113            77,217         84,365         67,836
--------------------------------------------------------------------------------------------------------------------
Operating income (loss)......                 5,198           (115)            4,638        (15,587)         2,356
Interest  expense, net.......                (2,043)        (2,075)           (2,430)        (3,444)        (1,946)

Income (loss) before benefit (provision)
  for income  taxes, extraordinary item
  and cumulative effect of change in
  accounting principle                        3,155         (2,190)            2,208        (19,031)           410
(Provision) benefit  for income taxes        (1,222)         3,833              (861)         5,845           (159)
--------------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary item and
 cumulative effect of change in accounting
  principle                                   1,933          1,643             1,347        (13,186)           251
Extraordinary Item:
   Utilization of tax operating loss
   carryforward                               1,086             --                --             --             --
Cumulative effect of change in
   accounting principle......                    --          2,127                --             --             --
--------------------------------------------------------------------------------------------------------------------
Net income (loss)............                $3,019         $3,770            $1,347       $(13,186)          $251
--------------------------------------------------------------------------------------------------------------------

Per Share Information:
  Income (loss) before extraordinary
    items and cumulative effect of
    change in accounting  principle           $0.40          $0.34             $0.22         ($1.94)         $0.04
  Extraordinary items........                  0.22             --                --             --             --
  Cumulative effect of change in
    accounting principle                         --           0.44                --             --             --
--------------------------------------------------------------------------------------------------------------------
Net income (loss) per share..                 $0.62          $0.78             $0.22         ($1.94)         $0.04
--------------------------------------------------------------------------------------------------------------------
Weighted average number of
 shares outstanding (d).....                  4,862          4,862             6,241          6,790          6,824

Balance Sheet Information (As of End of
  Fiscal Year):
  Working capital............               $26,547        $36,138           $45,089        $35,722        $28,631
  Total assets...............                62,707         83,803           101,783         90,671         81,410
  Total debt ................                19,492         27,525            23,975         30,245         18,433
  Total long-term obligations                21,013         31,730            28,180         33,632         21,366
  Shareholder`s equity.......                25,115         30,390            48,631         35,445         35,699
</TABLE>

                                       12

<PAGE>

(a) In 1995,  the Company  discontinued  its womens  product line to concentrate
    solely on its men's business.
(b) During fiscal 1993, the Company recognized an expense  and  a  corresponding
    liability  of  $3.3  million  relating  to  its termination of participation
    in a multi-employer pension plan.
(c) As of January 29, 1994, the employment  agreements between the Company and
    two executives were amended to surrender the executives'  rights to receive
    certain payments related to  increases in the equity  value of the Company
    in exchange  for,  among other things,  373,553 shares of the Company's
    Common Stock.
(d) Gives effect to the exercise  of all stock  options  and all  shares  issued
    in the  initial  public offering in May 1994.
(e) In fiscal  1995,  the Company  recorded an expense of $3.5 million related
    to the early adoption of Statement of Financial  Accounting Standards No.
    121 and costs to exit certain leases and reposition stores.


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

Overview

         During fiscal year 1996, the Company focused on its core men's business
after discontinuing the women's business in 1995.  Operating income for the year
ended  February 1, 1997 improved  $18.0  million to an operating  income of $2.4
million from an operating  loss of $15.6 million in 1995.  The Company  improved
its  operating  income in each quarter  during  fiscal 1996 compared to the same
quarter in fiscal 1995.

         The turnaround in operating results for the year ended February 1, 1997
was due  primarily to a) higher  maintained  margins which were driven by strong
suit  sales,  b) the  elimination  of the  unprofitable,  lower  margin  women's
business, c) men's comparable store sales increase of approximately 9.3 percent,
d) lower operating expenses and e) the closure of several  unprofitable  stores.
The  Company has also  restructured  several  leases to support  its  men's-only
business,  adjusted  its  manufacturing  capacity,  relocated  three  stores and
lowered its store selling expenses. The increase in men's comparable store sales
was generated on men's average  inventory  levels that were  approximately  $5.6
million lower than the prior year as the Company improved its inventory turns.

         The Company has not  completely  replaced  the volume  generated by the
women's  division  which  generated  sales of $25.9  million in fiscal 1995.  To
increase  sales and improve the  leverage of its assets,  the Company is opening
new stores,  including  six stores  that were  opened in fall 1996.  The Company
expects to open up to ten new stores in 1997.

         The  Company's  availability  in excess of  outstanding  borrowings  as
supported  by the  existing  borrowing  base  under  its  Credit  Agreement  has
increased  to $13.4  million at April 18, 1997  compared to $7.2  million at the
same time in 1996.  In April 1996 the Company  extended  its $40 million  Credit
Agreement to April 1999, which reduced the financial  covenant  requirements and
provides for a seasonal  over-advance.  An additional  $7.3 million of potential
availability exists to support additional inventory purchases, if required.

Results of Operations

         The  following  table  is  derived  from  the  Company's   Consolidated
Statements of Income (Loss) and sets forth, for the periods indicated, the items
included  in the  Consolidated  Statements  of  Income  (Loss),  expressed  as a
percentage of net sales.

                                       13

<PAGE>



                                                 Percentage Of Net Sales
                                                       Fiscal Years
                                           -------------------------------------
                                             1994         1995         1996
Sales:
  Men's ..................................   81.5%        84.7%       100.0%
  Women's ................................   18.5         15.3           --
--------------------------------------------------------------------------------

Net Sales ................................  100.0        100.0        100.0
Cost of goods sold .......................   53.5         59.4         54.7
--------------------------------------------------------------------------------

Gross profit .............................   46.5         40.6         45.3
General and administrative expenses ......    9.6         10.5         10.8
Sales and marketing expenses .............   33.7         37.2         32.8
Store opening costs ......................    0.6           --           .1
Store repositioning costs ................     --          2.1           --
--------------------------------------------------------------------------------

Operating income (loss) ..................    2.6         (9.2)         1.5
Interest expense, net ....................   (1.3)        (2.0)         1.2
--------------------------------------------------------------------------------

Income (loss) before income taxes ........    1.3        (11.2)         0.3
Income taxes .............................   (0.5)         3.4          0.1
--------------------------------------------------------------------------------

Net income (loss) ........................    0.8%        (7.8)%        0.2%
--------------------------------------------------------------------------------

Fiscal 1996 Compared to Fiscal 1995

  Net Sales - Men's  sales  showed a strong  improvement  over the prior year as
reflected in the men's total sales increase of $11.4 million or 7.9% on sales of
$155.1  million in fiscal  1996 as compared  to $143.7  million in fiscal  1995.
Men's comparable store sales also posted an increase of $10.6 million or 9.3% in
fiscal 1996,  from $114.4 million to $125.0  million,  while men's catalog sales
posted a $1.3 million  increase or 8.3% on sales of $16.9 million in fiscal 1996
and $15.6 million in fiscal 1995.  The increase in men's sales can be attributed
to favorable apparel trends, an improved  merchandising mix, reduced competition
from  attrition  within the industry and improved  efficiency  in the  Company's
marketing approach, among other factors.

Total sales  decreased  $14.5  million or 8.5% to $155.1  million in fiscal 1996
from  $169.6  million in fiscal  1995 due to the  discontinuance  of the women's
product line which generated $25.9 million of net sales in fiscal 1995.

  Gross  Profit - Gross  profit as a  percentage  of net sales  rose to 45.3% in
fiscal  1996  from  40.6%  in  fiscal  1995.  This  improvement  was  due to the
elimination  of the women's  product line and the  improvement of margins in the
continuing men's business through better sourcing and fresher product  offering,
particularly  in the higher  margin suit and tie  categories.  Gross profit also
improved as the Company  consolidated  its in-store  tailoring  operations  into
several  Company-owned  overflow  shops.  The 1996 cost of goods sold includes a
non-recurring  cost of  approximately  $.4  million  relating  to cost  overruns
associated with the manufacturing of formal wear on a contract basis,  which the
Company has discontinued.

  General  and  Administrative  Expenses - General and  administrative  expenses
decreased  $1.2  million to $16.7  million  for fiscal  1996  compared  to $17.9
million for fiscal 1995.  Approximately  $.7 million of the decrease was related
to  severance  in the  first  quarter  of 1995  for  terminated  employees.  The
remainder of the  improvement was due primarily to lower  professional  fees and
payroll and related  expenses  which reflects the Company's  continued  focus on
controlling  overhead costs.  These  reductions were partially  offset by higher
employee relocation expenses and performance incentive compensation in 1996.

                                       14

<PAGE>

  Sales and Marketing  Expenses - Sales and Marketing  expense  decreased  $12.1
million to $50.9 million in fiscal 1996 from $63.0 million in fiscal 1995. These
expenses  also  decreased  to  32.8% of  sales  in 1996  from  37.2% in 1995 due
primarily to a) more efficient retail store advertising  expenditures  resulting
from a shift in  strategy  putting a greater  emphasis  on direct  mail,  b) the
elimination of the women's  product line and its related costs, c) the reduction
of the number of catalogs  mailed to prospects in the first half of 1996, and d)
a $.3 million expense reduction related to a lease settlement.

  Store Opening Costs - The Company  opened four new full-line  stores in fiscal
1996 and incurred  approximately  $.2 million of new store opening expense.  The
Company expects the new store opening cost per store in 1997 to be comparable to
the costs in 1996 as its  strategy  is to open new  stores in  existing  markets
which requires lower incremental costs of opening compared to a new market.

 Interest  Expense - The decrease of $1.5 million in interest expense for fiscal
1996 is  attributable  to lower  inventories  and $.6 million of interest income
related to an income tax refund received from the Company's pre-1986 parent. The
Company expects  interest expense to increase in fiscal 1997 as it increases its
borrowings to finance new store openings.

  Income Taxes - The Company has net tax operating loss carryforwards  (NOLs) of
approximately  $19.6 million which expire  through 2010. The NOLs were generated
during periods in which the Company operated its women's business along with the
men's business.  In 1995, the Company discontinued its women's business to focus
its efforts on its men's business. Realization of the future tax benefits of the
NOLs is dependent on the Company's ability to generate taxable income within the
carryforward period.  Management has determined,  based on the Company's history
of  earnings  and its  repositioning  strategy  discussed  earlier,  that future
earnings of the Company  will more likely than not be  sufficient  to utilize at
least  $16  million  of the NOLs  prior to their  expiration.  Accordingly,  the
Company  has  recorded  a deferred  tax asset of $6.1  million  and a  valuation
allowance  of $1.4 million  relating to the NOLs.  The average  minimum  taxable
income that the Company  would need to generate  prior to the  expiration of the
NOLs would be less than the  average  taxable  income  that the  Company  earned
during  fiscal  years 1992  through  1994,  as  adjusted  for  unusual  charges.
Management  believes that although the prior earnings and current year operating
results might justify a higher amount,  the $6.1 million represents a reasonable
estimate of the future utilization of the NOLs and will continue to evaluate the
likelihood  of future  profit and the  necessity  of future  adjustments  to the
deferred  tax  asset  valuation  allowance.  No  assurance  can  be  given  that
sufficient taxable income will be generated for full utilization of the NOLs.

Fiscal 1995 Compared to Fiscal 1994

  Net Sales - Net sales  decreased  $6.5  million  or 3.7% to $169.6  million in
fiscal  1995 from  $176.1  million in fiscal  1994.  Total men's sales of $143.7
million in fiscal 1995 were  comparable  to the prior  year,  and sales from the
women's  business  declined  $6.7 million from $32.6 million to $25.9 million as
the  Company  was  exiting  this  product  line.  Men's  comparable  store sales
increased  $4.1  million,  or 3.6%,  in fiscal  1995 while men's  catalog  sales
decreased $5.1 million,  or 21.8%.  The increase in men's comparable store sales
was  primarily due to an increase in  promotional  activity and the expansion of
the  sportswear  offering.  The decrease in catalog  sales was  primarily due to
decreased  circulation  as the Company  reacted to  increased  paper and postage
costs.

  Gross Profit - Gross profit as a percentage of net sales  declined to 40.6% in
fiscal 1995 from 46.5% in fiscal 1994 due primarily to the significant  erosions
in  the  women's  gross  margins  resulting  from  the  Company's   decision  to
discontinue  its women's  product  line and the  resulting  need to sell off the
inventory  (which was completed in fiscal 1995).  Men's gross profit  percentage
declined  slightly  from  1994  to  1995  primarily  as a  result  of  increased
promotional  activity  as  the  Company  incurred  startup  costs  for  its  new
sportswear line and competitive pressures in the men's apparel market.

  General and Administrative  Expenses - General and administrative  expenses of
$17.9  million  increased  $1.1  million  from $16.8  million in fiscal 1995 due
primarily to severance pay of $1.0 million,  related to staff reductions  during
1995.

 Sales and  Marketing  Expenses - Sales and  marketing  expenses  increased as a
percentage  of net sales to 37.2% in  fiscal  1995  from  33.7% in  fiscal  1994
primarily as a result of higher marketing  expenses for image advertising of the
increased sportswear offering, higher catalog costs due to increased postage and
paper costs and increased advertising  necessitated by the promotional nature of
the men's clothing industry in fiscal 1995.

  Store  Opening  Costs - The Company did not incur  significant  store  opening
costs in fiscal 1995, compared to fiscal 1994 when it incurred $1.0 million.

                                       15

<PAGE>

 Store  Repositioning  Costs - The Company has  recorded a $3.5  million  charge
which  includes a $2.3 million  impairment of assets  associated  with the early
adoption of  Statement  of  Financial  Accounting  Standards  No. 121 and a $1.2
million charge to exit certain leases and reposition stores.

  Interest Expense - Interest expense increased $1.0 million in fiscal 1995. The
increase was due primarily to increased interest rates on the revolving loan and
an increase in the outstanding balance.

 Income Taxes -The Company has net tax operating  loss  carryforwards  (NOLs) of
approximately  $20 million which expire through 2010.  SFAS No. 109 - Accounting
for Income Taxes  requires  that the tax benefit of such NOL's be recorded as an
asset to the extent that management assesses the utilization of such NOL's to be
"more likely than not".  Realization  of the future tax benefits is dependent on
the Company's ability to generate taxable income within the carryforward period.
Future  levels  of  operating   income  are  dependent  upon  general   economic
conditions,  including  interest rates and general levels of economic  activity,
competitive  pressures  on sales  and  margins  and  other  factors  beyond  the
Company's control,  and no assurance can be given that sufficient taxable income
will be generated for full utilization of the NOL's.  Management has determined,
based on the Company's history of prior operating  earnings and its expectations
for the future,  that operating  income of the Company will more likely than not
be sufficient to utilize at least $16 million NOL's prior to their expiration.

Liquidity and Capital Resources

         The  Company's  availability  in excess of  outstanding  borrowings  as
supported  by the  existing  borrowing  base  under  its  Credit  Agreement  has
increased  to $13.4  million at April 18, 1997  compared to $7.2  million at the
same time in 1996.  In April 1996 the Company  extended  its $40 million  Credit
Agreement to April 1999, which reduced the financial  covenant  requirements and
provides for a seasonal  over-advance.  An additional  $7.3 million of potential
availability exists to support additional  inventory purchases if required.  The
Company's  availability at April 18, 1997 has increased by $6.2 million compared
to the same time in 1995  principally by a) lower  inventory  levels,  b) better
terms with  vendors,  c) the tax refund from its pre-1986  parent and d) reduced
letter of credit  requirements from several  landlords.  The Company reduced its
total debt by $11.8  million in 1996 to $18.4  million at  February 1, 1997 from
$30.2 million at February 3, 1996.

         The following table  summaries the Company's  sources and uses of funds
as reflected in the condensed consolidated statements of cash flows:
                                                         Year Ended
                                                 February 3,     February 1,
                                                    1996            1997
                                                 -----------     -----------

      Cash provided by (used in):
      Operating activities ................       $(3,564)       $ 13,582
      Investing activities, net ...........        (2,094)         (1,373)
      Financing activities ................         5,565         (12,134)
--------------------------------------------------------------------------------

Net (decrease) increase in cash and
  cash equivalents ........................       $   (93)       $     75
--------------------------------------------------------------------------------


         Cash provided by the Company's  operating  activities was due primarily
to improved operating results,  the income tax refund received from its pre-1986
parent, improved vendor terms and lower inventory levels. Cash used in investing
activities  relates  primarily to leasehold  improvements  in new and  relocated
stores and continued consolidation of the Company's tailoring operations, net of
proceeds from the sale of one of the Company's three manufacturing  plants. Cash
used in financing  activities  represents  primarily repayments of the revolving
loan under the Credit Agreement.

         The Company spent $2.2 million on capital  expenditures  in fiscal year
1996 as it implemented its program to reposition its existing store base,  which
included $1.1 million to open four new company-owned stores in fall 1996 and $.8
million to relocate  three  stores.  The Company  also opened two new  franchise
stores. The Company closed two unprofitable full-line stores in 1996, as well as
five catalog stores.  These closed stores accounted for less than 2% of sales in
1995.

                                       16

<PAGE>

         The Company  expects to spend  between $4.0 and $5.0 million in capital
expenditures to open up to ten new stores and renovate  existing stores in 1997.
The Company  believes that its current  liquidity and Credit  Agreement  will be
adequate to maintain its currently  anticipated  working  capital and investment
needs.  The Company's  plans and beliefs  concerning  1997 contained  herein are
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995.  Actual results may differ materially from those
forecast due to a variety of factors  that can  adversely  affect the  Company's
operating results, liquidity, and financial condition.

Seasonality

         Unlike many other retailers,  the Company's  operations are not greatly
affected by seasonal fluctuations. Although variations in sales volumes do exist
between  quarters,  the Company believes the nature of its merchandise  helps to
stabilize demand between the different periods of the year. The Company does not
expect seasonal fluctuation to materially affect its operations in the future.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENT DATA

         The financial  statements  listed in Item 14(a) 1 and 2 are included in
the Report beginning on page F-1.

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

         None.

                                    PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The  information  included under the captions  "Directors",  "Executive
Officers"  and  "Compliance  with  Section  16(a)  of the  Exchange  Act" in the
Company' proxy statement for the 1997 Annual Meeting of Shareholders to be filed
with  the  Commission  (the  "Proxy  Statement")  are  incorporated   herein  by
reference.

Item 11. EXECUTIVE COMPENSATION

         The information  included under the captions "Executive  Compensation",
"Executive Employment Agreements",  "Compensation of Directors",  "Report of the
Compensation Committee of the Board of Directors" and "Performance Graph" in the
Company's Proxy Statement are incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  information  included  under the caption  "Security  Ownership  of
Directors and Officers" in the Company's Proxy Statement is incorporated  herein
by reference.

Item 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS

         The information  included under the caption  "Certain  Transactions" in
the Company's Proxy Statement is incorporated herein by reference.

                                       17

<PAGE>


                                     PART IV

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

(a) The following  Financial  Statements of Jos. A. Bank  Clothiers,  Inc.,  the
notes  thereto,  and the  related  reports  thereon  of the  independent  public
accountants are filed under Item 8 of this report:

<TABLE>
<CAPTION>
1.   Financial Statements                                                        Page
<S> <C>
     Report of Independent Public Accountants...................................  F-1
     Consolidated Balance Sheets as of February 3, 1996 and February 1, 1997....  F-2
     Consolidated Statements of Income (Loss)  for the Years Ended
       January 28, 1995, February 3, 1996 and February 1, 1997..................  F-3
     Consolidated Statement of Shareholders' Equity for the Years Ended
       January 28, 1995, February 3, 1996 and February 1, 1997..................  F-4
     Consolidated Statements of Cash Flows for the Years Ended
       January 28, 1995, February 3, 1996 and February 1, 1997..................  F-5
     Notes to Consolidated Financial Statements.................................  F-6
</TABLE>

2.       Financial Statement Schedules

         All required information is included within the Consolidated  Financial
Statements and the notes thereto.

(b)  Forms 8-K

         No reports on Form 8-K were filed  during the last  quarter of the year
covered by this Annual Report on Form 10-K, which ended on February 1, 1997.

<TABLE>
<S> <C>
(c)      Exhibits
3.1      --  Restated Certificate of Incorporation of the Company.*......................................
3.2      --  By-laws of the Company, together with all amendments thereto.*..............................
4.1      --  Form of Common Stock certificate.*..........................................................
4.2      --  Amended and Restated Stockholders Agreement, dated as of January 29, 1994,
               among the parties named therein.*.........................................................
10.4(a)  --  Second Amendment to Third Amended and Restated Credit
               Agreement, dated as of October 24, 1994, by and among the
               Company, Wells Fargo Bank, N.A. National Association and other
               lenders named therein **..................................................................
10.4(b)  --  Third Amendment to Third Amended and Restated Credit Agreement,
               dated as of April 26, 1995, by and among the Company, Wells Fargo
               Bank, N.A. and other lenders named therein. **............................................
10.4(c)  --  Fourth Amendment to Third Amended and Restated Credit Agreement,
               dated as of June 30, 1995, by and among the Company, Wells Fargo
               Bank, N.A. and other lenders named therein. **............................................
10.4(d)  --  Fifth Amendment to Third Amended and Restated Credit Agreement,
               dated as of July 28, 1995, by and among the Company, Wells Fargo
               Bank, N.A. and other lenders named therein. **............................................
10.4(e)  --  Sixth Amendment to Third Amended and Restated Credit Agreement,
               dated as of August 15, 1995, by and among the Company, Wells Fargo
               Bank, N.A. and other lenders named therein. **............................................
10.4(f)  --  Fourth Amended and Restated Credit Agreement, April 30, 1996, by and
               among the Company, Wells Fargo Bank, N.A. ***.............................................
21.1     --  Company subsidiaries *
10.5(b)  --  Amendment  to Finley  Employment Agreement, dated as of January 29,
               1994, filed herewith......................................................................
10.6(b)  --  Amendment to Schwartz Employment Agreement, dated as of January 29, 1994,
               filed herewith............................................................................
</TABLE>

                                       18

<PAGE>

<TABLE>
<S> <C>                               
10.5(a)  --  Employment  Agreement,  dated as of March 31, 1994, between Timothy F. Finley and
               Jos. A. Bank Clothiers, Inc., filed herewith..............................................
10.6(a)  --  Employment  Agreement,  dated as of March 31, 1994, between Henry C. Schwartz and
               Jos. A. Bank Clothiers, Inc., filed herewith..............................................
10.6(c)  --  Amendment to Employment Agreement, dated February 3, 1996, by and between
               Henry C. Schwartz and Jos. A. Bank Clothiers, Inc., filed herewith........................
10.7     --  Employment Agreement, dated February 5, 1996, between Frank Tworecke and Jos. A.
               Bank Clothiers, Inc., filed herewith......................................................
10.8     --  Employment Agreement, dated February 5, 1996, between David E. Ullman and Jos. A.
               Bank Clothiers, Inc., filed herewith......................................................
10.9     --  Jos. A. Bank Clothiers, Inc. Retirement and Savings Plan and Trust Agreement as
               amended and restated effective April 1, 1994., filed herewith.............................
10.10    --  Collective  Bargaining Agreement between Retail Employees Union Local 340,
               Amalgamated Clothing and Textile Workers Union, AFL-CIO and Jos. A. Bank Clothiers
               Inc., filed herewith......................................................................
10.11    --  Union Agreement, dated  May 1, 1995, by and between Joseph A. Bank Mfg. Co., Inc. and
               Baltimore Regional Joint Board, Amalgamated Clothing and Textile Workers Union (also known
               as U.N.I.T.E.), filed herewith............................................................
</TABLE>

---------------
*    Incorporated by  reference to the Company's  Registration Statement on Form
     S-1 filed May 3, 1994.
**   Incorporated  by  reference to the Company's Annual Report on Form 10-K for
     the year ended January 28, 1995.
***  Incorporated  by reference to the Company's  Annual Report on Form 10-K for
     the year ended February 3, 1996.

         Pursuant  to the  requirements  Section 13 and 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its  behalf  by the  undersigned,  thereunto  duly  authorized,  in the  City of
Hampstead, State of Maryland, on April 18, 1997.

                                       19

<PAGE>


                          JOS. A. BANK CLOTHIERS, INC.
                                  (registrant)
                           By: /s/: Timothy F. Finley
                               ----------------------

                                TIMOTHY F. FINLEY
                CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER

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


<TABLE>
<CAPTION>

NAME                                TITLE                                                        DATE
<S><C>
/s/: Timothy F. Finley      Director, Chairman of the Board and Chief
-----------------------     Executive Officer (Principal Executive Officer)...              April 18, 1997

/s/: Frank Tworecke         President and Chief Merchandising Officer.........              April 18, 1997
-----------------------

/s/: David E. Ullman        Executive Vice President, Chief Financial Officer.              April 18, 1997
-----------------------

/s/: Thomas E. Polley       Vice President, Controller (Principal
-----------------------     Accounting Officer), Treasurer....................              April 18, 1997


/s/: Robert B. Bank         Director..........................................              April 18, 1997
-----------------------

/s/: Andrew A. Giordano     Director..........................................              April 18, 1997
-----------------------

/s/: Gary S. Gladstein      Director..........................................              April 18, 1997
-----------------------

/s/: Peter V. Handal        Director..........................................              April 18, 1997
-----------------------

/s/: David A. Preiser       Director.........................................               April 18, 1997
-----------------------

/s/: Robert N. Wildrick     Director.........................................               April 18, 1997
-----------------------

</TABLE>



                                       20



<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



                   To the Board of Directors and Shareholders
                        of Jos. A. Bank Clothiers, Inc.

We have audited the  accompanying  consolidated  balance  sheets of Jos. A. Bank
Clothiers,  Inc. (a Delaware  corporation)  and  subsidiaries  as of February 3,
1996,  and February 1, 1997, and the related  consolidated  statements of income
(loss),  shareholders'  equity and cash flows for the years  ended  January  28,
1995, February 3, 1996, and 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 the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the  financial  statements  referred to above  present  fairly,
in all material  respects,  the financial position of Jos. A. Bank  Clothiers,
Inc. and  subsidiaries  as of February 3, 1996, and February 1, 1997, and the
results of its  operations  and its cash flows for the years ended  January 28,
1995,  February 3, 1996,  and February 1, 1997,  in conformity with generally
accepted accounting principles.

/s/ Arthur Andersen LLP
-----------------------


Baltimore, Maryland,
  March 11, 1997



                                      F-1


<PAGE>


                  JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
                  ---------------------------------------------

                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------

                   AS OF FEBRUARY 3, 1996 AND FEBRUARY 1, 1997
                   -------------------------------------------
                    (In Thousands, Except Share Information)

<TABLE>
<CAPTION>

ASSETS
                                                          February 3, 1996       February 1, 1997
                                                          ----------------       ----------------
<S><C>
CURRENT ASSETS:
     Cash and cash equivalents                              $       644           $       719
     Accounts receivable                                          3,866                 3,300
     Inventories                                                 43,273                40,883
     Prepaid expenses and other current assets                    4,333                 4,874
     Deferred income taxes                                        5,200                 3,200
-------------------------------------------------------------------------------------------------
        Total current assets                                     57,316                52,976

NON-CURRENT ASSETS:
     Property, plant and equipment, net                          25,671                22,840
     Other noncurrent assets, net                                 1,717                 1,511
     Deferred income taxes                                        5,967                 4,083
-------------------------------------------------------------------------------------------------
        Total assets                                        $    90,671           $    81,410
-------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                       $     8,929           $    12,357
     Accrued expenses                                            10,896                10,484
     Current portion of long-term debt                              856                   685
     Current portion of capital lease obligations                   183                    16
     Current portion of pension liability                           730                   803
-------------------------------------------------------------------------------------------------
        Total current liabilities                                21,594                24,345

NON-CURRENT LIABILITIES:
     Long-term debt                                              29,389                17,748
     Long-term capital lease obligations                             16                    --
     Deferred rent                                                2,666                 2,860
     Pension liability                                            1,561                   758
-------------------------------------------------------------------------------------------------
        Total liabilities                                        55,226                45,711
-------------------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
     Common stock, $.01 par, 20,000,000 shares authorized,
        6,999,567 issued and 6,790,152 outstanding as of
        February 3, 1996 and 7,000,567 issued and 6,791,152
        outstanding as of February 1, 1997                           70                    70
     Preferred stock, $1.00 par, 500,000 shares authorized,
        none outstanding                                             --                    --
     Additional paid-in capital                                  56,333                56,336
     Accumulated deficit                                        (19,038)              (18,787)
     Less 209,415 shares of common stock held in treasury,
        at cost                                                  (1,920)               (1,920)
-------------------------------------------------------------------------------------------------
        Total shareholders' equity                               35,445                35,699
-------------------------------------------------------------------------------------------------
        Total liabilities and shareholders' equity          $    90,671           $    81,410
-------------------------------------------------------------------------------------------------

        The accompanying notes are an integral part of these consolidated balance sheets.

</TABLE>


                                      F-2

<PAGE>



                 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
                 ---------------------------------------------

                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                    ----------------------------------------

  FOR THE YEARS ENDED JANUARY 28, 1995, FEBRUARY 3, 1996 AND FEBRUARY 1, 1997
  ---------------------------------------------------------------------------
                    (In Thousands, Except Share Information)

<TABLE>
<CAPTION>
                                                                                        Years Ended
                                                                         ----------------------------------------------
                                                                         Jan. 28, 1995    Feb. 3, 1996     Feb. 1, 1997
                                                                         -------------    ------------     ------------
<S><C>
NET SALES:
  Men's                                                                   $  143,465       $  143,659        $  155,058
  Women's                                                                     32,589           25,908                --
-----------------------------------------------------------------------------------------------------------------------

NET SALES                                                                    176,054          169,567           155,058

COST OF GOODS SOLD                                                            94,199          100,789            84,866
-----------------------------------------------------------------------------------------------------------------------
       Gross profit                                                           81,855           68,778            70,192
-----------------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES:
     General and administrative                                               16,817           17,852            16,720
     Sales and marketing                                                      59,375           63,013            50,924
     Store opening costs                                                       1,025               --               192
     Store repositioning costs                                                    --            3,500                --
-----------------------------------------------------------------------------------------------------------------------
       Total operating expenses                                               77,217           84,365            67,836
-----------------------------------------------------------------------------------------------------------------------

OPERATING INCOME (LOSS)                                                        4,638          (15,587)            2,356

     Interest expense, net                                                    (2,430)          (3,444)           (1,946)
-----------------------------------------------------------------------------------------------------------------------
       Income (loss) before (provision) benefit for
          income taxes                                                         2,208          (19,031)              410

     (Provision) benefit for income taxes                                       (861)           5,845              (159)
-----------------------------------------------------------------------------------------------------------------------

NET INCOME (LOSS)                                                         $    1,347       $  (13,186)       $      251
-----------------------------------------------------------------------------------------------------------------------

PER COMMON SHARE:
   Fully diluted earnings (loss) per common share                         $      .22       $    (1.94)       $      .04
-----------------------------------------------------------------------------------------------------------------------

WEIGHTED AVERAGE SHARES OUTSTANDING                                        6,240,700        6,790,152         6,824,117
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.



                                      F-3


<PAGE>


                 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
                 ---------------------------------------------

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                -----------------------------------------------

  FOR THE YEARS ENDED JANUARY 28, 1995, FEBRUARY 3, 1996 AND FEBRUARY 1, 1997
  ---------------------------------------------------------------------------
                    (In Thousands, Except Share Information)


<TABLE>
<CAPTION>
                                                                   Additional                                  Total
                                            Common     Preferred     Paid-In   Accumulated   Treasury      Shareholders'
                                             Stock       Stock       Capital     Deficit       Stock          Equity
                                            ------     ---------   ----------  -----------   --------      -------------
<S><C>
BALANCE, January 29, 1994                 $      50   $     --    $   39,459   $   (7,199)   $  (1,920)    $    30,390

  Net proceeds from issuance of
    common stock (2,000,000 shares)
    pursuant to initial public offering          20         --        16,874           --           --          16,894

  Net income                                     --         --            --        1,347           --           1,347
------------------------------------------------------------------------------------------------------------------------

BALANCE, January 28, 1995                        70         --        56,333       (5,852)      (1,920)         48,631

  Net loss                                       --         --            --      (13,186)          --         (13,186)
------------------------------------------------------------------------------------------------------------------------

BALANCE, February 3, 1996                        70         --        56,333      (19,038)      (1,920)         35,445

  Net proceeds from issuance of
    common stock (1,000 shares)
    pursuant to Incentive Option Plan            --         --             3           --           --               3

  Net income                                     --         --            --          251           --             251
------------------------------------------------------------------------------------------------------------------------

BALANCE, February 1, 1997                 $      70   $     --    $   56,336   $  (18,787)   $  (1,920)    $    35,699
------------------------------------------------------------------------------------------------------------------------
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.



                                      F-4


<PAGE>


                 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
                 ---------------------------------------------
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     -------------------------------------

  FOR THE YEARS ENDED JANUARY 28, 1995, FEBRUARY 3, 1996 AND FEBRUARY 1, 1997
  ---------------------------------------------------------------------------
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                                   Years Ended
                                                                               --------------------------------------------------
                                                                               Jan. 28, 1995       Feb. 3, 1996      Feb. 1, 1997
                                                                               -------------       ------------      ------------
<S><C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                                         $       1,347      $      (13,186)     $       251
     Adjustments to reconcile net income (loss)
       to net cash provided by (used in) operating
       activities:
     Deferred tax (benefit) expense                                                      427              (5,533)           3,884
     Depreciation and amortization                                                     4,088               4,668            3,901
     (Gain) loss on disposition of assets                                                 --                 168              (25)
     Store repositioning costs                                                            --               3,500               --
     Changes in assets and liabilities:
        (Increase) decrease in accounts receivable                                    (1,082)                679              566
        (Increase) decrease in inventories                                            (8,941)              8,609            2,390
        (Increase) decrease  in prepaid expenses and
          other current assets                                                        (2,278)              3,491             (541)
        (Increase) decrease in other non-current assets                                   --                (776)             101
        Increase (decrease) in accounts payable                                        3,794              (5,386)           3,428
        Increase (decrease) in long-term pension liability                              (665)               (665)            (730)
        Increase (decrease) in accrued expenses                                         (350)                406              163
        Increase in deferred rent                                                        385                 461              194
---------------------------------------------------------------------------------------------------------------------------------
        Net cash provided by (used in) operating
          activities                                                                  (3,275)             (3,564)          13,582
---------------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                                                             (9,377)             (2,231)          (2,152)
     Proceeds from disposal of assets                                                     --                 137              779
---------------------------------------------------------------------------------------------------------------------------------
        Net cash used in investing activities                                         (9,377)             (2,094)          (1,373)
---------------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Borrowings under revolving loan agreement                                        67,310              54,364           29,786
     Repayment of borrowings under revolving loan
       agreement                                                                     (62,710)            (47,550)         (40,680)
     Proceeds from issuance of other long-term debt                                      324                  --               --
     Repayment of other long-term debt                                                (8,474)               (544)            (918)
     Net proceeds from issuance of common stock                                       16,894                  --                3
     Principal payments under capital lease obligations                                 (196)               (212)            (183)
     Payments related to debt financing                                                 (130)               (493)            (142)
---------------------------------------------------------------------------------------------------------------------------------
        Net cash provided by financing activities                                     13,018               5,565          (12,134)
---------------------------------------------------------------------------------------------------------------------------------
        Net increase (decrease) in cash and cash
          equivalents                                                                    366                 (93)              75

CASH AND CASH EQUIVALENTS, beginning of year                                             371                 737              644
---------------------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, end of year                                         $         737      $          644      $       719
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.

                                      F-5



<PAGE>


                 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
                 ---------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
            JANUARY 28, 1995, FEBRUARY 3, 1996 AND FEBRUARY 1, 1997
            -------------------------------------------------------

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
         -------------------------------------------

Description of Business - Jos. A. Bank Clothiers, Inc. (Clothiers) is a
manufacturer and nationwide retailer of classic men's clothing through
conventional retail stores, including catalog direct marketing and franchisees.

Fiscal Year - The Company  maintains  its accounts on a  fifty-two / fifty-three
week fiscal year ending on the Saturday  nearest to January 31. The fiscal years
ended  January 28, 1995 (fiscal 1994) and February 1, 1997 (fiscal  1996),  each
contained  fifty-two  weeks and the fiscal year ended  February 3, 1996  (fiscal
1995) contained fifty-three weeks.

Basis of  Presentation - 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 disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation - The consolidated financial statements include the
accounts of Clothiers and its wholly-owned subsidiaries, The Joseph A. Bank Mfg.
Co., Inc. and National Tailoring Services, Inc. (collectively referred to as the
Company).  All significant intercompany balances and transactions have been
eliminated in consolidation.

Cash  and  Cash  Equivalents  - Cash  and  cash  equivalents  include  overnight
investments.

Supplemental  Cash Flow  Information  - Interest  and income  taxes paid were as
follows (in thousands):

                                        Years Ended
                           -------------------------------------
                           January 28,  February 3,  February 1,
                              1995          1996        1997
                           -----------  -----------  -----------
Interest paid                 $2,125       $2,679       $2,784
Income taxes paid                323           30          100

Inventories - Inventories are stated at the lower of first-in first-out, cost or
market.  The  Company  capitalizes  into  inventories  certain  warehousing  and
delivery  costs   associated  with  getting  its   manufactured   and  purchased
merchandise to the point of sale.

Catalogs and  Promotional  Materials - Costs related to mail order  catalogs and
promotional materials are included in prepaid expenses and other current assets.
These costs are amortized  over the expected  periods of benefit,  not to exceed
six  months.  At  February 3, 1996 and  February  1, 1997,  prepaid  catalog and
promotional   materials   were   approximately    $1,375,000   and   $1,505,000,
respectively.

Property,  Plant and  Equipment - Property,  plant and  equipment  are stated at
cost. The Company depreciates and amortizes  property,  plant and equipment on a
straight-line basis over the following estimated useful lives:

                                    Estimated
               Asset Class          Useful Lives
         ----------------------     --------------
         Buildings                  25 years
         Equipment                  3-10 years
         Furniture and fixtures     10 years
         Leasehold improvements     Initial term of
                                    lease, not to
                                    exceed 10 years

Other Noncurrent Assets - Other noncurrent  assets includes  deferred  financing
costs of $620,000  and  $514,000  as of  February 3, 1996 and  February 1, 1997,
respectively.  Deferred  financing  costs were incurred in  connection  with the
Company's bank credit  agreement  described in Note 6 and are being amortized as
additional  interest  expense over the remaining term of the agreement using the
effective interest method. Other noncurrent assets include $776,000 and $675,000
of notes receivable as of February 3, 1996 and February 1, 1997, respectively.

Franchise Revenue Recognition - Initial franchise fees for a store are generally
recognized  as revenue  when the  Company  has  provided  substantially  all the
initial  franchise  services.  Inventory  sales  (and  cost  of  sales)  to  the
franchisees are recognized when the inventory is shipped. Monthly franchise fees
are recorded when earned under the franchise agreements.

Lease Expense - The Company  records lease expense in accordance  with Statement
of Financial  Accounting  Standards  (SFAS) No. 13 -- Accounting for Leases.  As
such, rent expense on leases is recorded on a straight-line  basis over the term
of the lease and the excess of expense over cash  amounts paid are  reflected as
"deferred rent" in the accompanying balance sheets.

Store Opening Costs - Costs  incurred in connection  with start-up and promotion
of new store openings are expensed as incurred.

                                      F-6


<PAGE>


Income Taxes - The Company accounts for income taxes in accordance with SFAS No.
109 -- Accounting for Income Taxes. Under SFAS 109, the liability method is used
in accounting for income taxes. Deferred tax liabilities are determined based on
differences  between  the  financial  reporting  and tax  basis  of  assets  and
liabilities and are measured using tax rates and laws that are expected to be in
effect when the differences are scheduled to reverse.

Earnings Per Share - Net income  (loss) per common  share was computed  based on
the net income (loss)  divided by the weighted  average  number of common shares
outstanding.  Primary income (loss) per share  approximates fully diluted income
per share in each year presented. For net income per common share, the effect of
stock  options is  factored  into the  calculation  of weighted  average  shares
outstanding using the treasury stock method.

Accounting for Stock Based Compensation - In October 1995, the Financial
Accounting Standards Board issued SFAS No. 123, "Accounting for Stock Based
Compensation."  With respect to stock options granted to employees, SFAS No. 123
permits companies to continue using the accounting method promulgated by the
Accounting Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock
Issued to Employees", to measure compensation expense or to adopt the fair value
based method prescribed by SFAS No. 123.  If APB No. 25's method is continued,
pro forma disclosures are required as if SFAS No. 123 accounting provisions were
followed.  Management has elected to continue to measure compensation expense
under APB No. 25, with pro forma footnote disclosures of the expense under the
SFAS No. 123 method (See Note 11).

Reclassifications - Certain  reclassifications have been made to the February 3,
1996,  financial  statements  in order to  conform  with the  February  1, 1997,
presentation.

New Accounting  Pronouncement - In February 1997, the FASB issued  Statement No.
128 (SFAS 128),  "Earnings  per Share,"  which  establishes  new  standards  for
computing and presenting earnings per share. SFAS 128 is effective for financial
statements  for periods  ending  after  December  15,  1997,  including  interim
periods.

2.       CAPITAL STRUCTURE AND INITIAL PUBLIC OFFERING
         ---------------------------------------------

Effective  January 29,  1994,  the Company  changed  its  capital  structure  by
authorizing  20,000,000  shares of new  Common  Stock,  $.01 par value per share
(Common Stock),  and 500,000 shares of new preferred stock,  $1.00 par value per
share (Preferred Stock).

The Company then issued 3,912,363 shares of its new Common Stock in exchange for
all of its previously  issued  preferred  stock. The Company also issued 713,651
shares of its new Common Stock to the holders of its former common stock. All of
the previously issued preferred and common stock of the Company was canceled.

On May 10,  1994,  the Company  sold  2,000,000  shares of its Common  Stock for
$10.00 per share in connection with an initial  registration with the Securities
Exchange Commission.  In connection with this transaction,  the Company incurred
costs of $3,106,000 consisting  principally of underwriting,  legal,  accounting
and other fees. The net proceeds of  $16,894,000  were used to pay off long-term
debt of approximately $8,100,000 and for the opening of new stores.

3.       INVENTORIES:
         ------------

Inventories  at February 3, 1996 and February 1, 1997,  consist of the following
(in thousands):

                  February 3, 1996          February 1, 1997
                  ----------------          ----------------

Finished goods      $     35,650               $  32,104
Work in process            2,331                   4,717
Raw materials              5,292                   4,062
------------------------------------------------------------
  Total             $     43,273               $  40,883
------------------------------------------------------------

4.       PROPERTY, PLANT AND EQUIPMENT:
         ------------------------------

Property,  plant and equipment at February 3, 1996 and February 1, 1997, consist
of the following (in thousands):

                           February 3, 1996    February 1, 1997
                           ----------------    ----------------

Land                        $         671       $         475
Buildings and
 improvements                      28,112              28,062
Equipment,
 furniture and fixtures            20,088              19,541
---------------------------------------------------------------
                                   48,871              48,078
Less: Accumulated
 depreciation and
  amortization                    (23,200)            (25,238)
---------------------------------------------------------------
    Property, plant and
      equipment, net        $      25,671       $      22,840
---------------------------------------------------------------

5.       ACCRUED EXPENSES:
         -----------------

Accrued  expenses  at  February  3, 1996 and  February  1, 1997,  consist of the
following (in thousands):

                                      F-7


<PAGE>

                           Feb. 3, 1996     Feb. 1, 1997
                           ------------     ------------

Accrued compensation
 and benefits               $     3,129      $    4,595
Accrued store
 repositioning costs              1,200             273
Accrued advertising               2,961           2,142
Gift certificate
 payable                          1,108           1,135
Other accrued expenses            2,498           2,339
--------------------------------------------------------
     Total                  $    10,896      $   10,484
--------------------------------------------------------

Other accrued  expenses  consist  primarily of liabilities  related to interest,
sales taxes, customer deposits, and percentage rent.

6.       LONG-TERM DEBT:
         ---------------

Long-term  debt at  February  3,  1996 and  February  1,  1997,  consist  of the
following (in thousands):

                                February 3,      February 1,
                                   1996             1997
                              --------------    -------------
Bank credit agreement-
    Borrowings under
    long-term revolving
    loan agreement            $     28,904      $    18,010

Note related to lease
    termination, discounted
    at 10.5%, payable in
    variable installments
    through  January 15, 1998          396               89

Notes related to lease-
    hold improvements,
    interest at 2% plus
    prime and 13.0%,
    payable in monthly
    installments through
    June 1, 2012                       484              134

Notes related to
    building improve-
    ments, interest at 10%,
    payable in monthly
    installments through
    July 1, 1997                       233               85

Mortgages payable,
    interest at 3%, payable
    in monthly installments
    through September 1,
    1999; secured by related
    land and building                  158              115


Mortgage payable, interest
    at 6.5%, payable in
    monthly installments
    through May 1, 2000;
    secured by related
    properties                          70               --
-------------------------------------------------------------
    Total debt                      30,245           18,433

      Less:  Current maturities        856              685
-------------------------------------------------------------
      Long-term debt          $     29,389      $    17,748
-------------------------------------------------------------

Bank  Credit  Agreement  - The  Company  maintains  a $40  million  bank  credit
agreement  (the "Credit  Agreement"),  which provides for a revolving loan whose
limit is determined by a formula  based on the Company's  inventories,  accounts
receivable  and real estate and  equipment  values.  In April 1996,  the Company
extended  the Credit  Agreement  to April  1999.  The amended  Credit  Agreement
changed the maximum  borrowing  under the revolver  facility to $38,000,000  and
provided a term loan  facility  of  $2,000,000  payable in monthly  installments
based on a  five-year  amortization  with any  outstanding  balance due in April
1999. The Credit  Agreement  also includes  financial  covenants  concerning net
worth and working capital, among others, limitations on capital expenditures (up
to $7 million in fiscal 1997) and additional  indebtedness  and a restriction on
the payment of dividends.  Interest rates under the amended agreement range from
prime plus 1.5% to prime plus 2.0% or LIBOR plus  3.5%.  The  amended  agreement
also  includes  an  early   termination   fee  and  provisions  for  a  seasonal
over-advance.

As of February 3, 1996 and February 1, 1997 the Company's availability in excess
of outstanding  borrowings  under the formula was  $5,500,000  and  $13,750,000,
respectively.  Substantially all assets of the Company are collateralized  under
the Credit Agreement.

During the years ended January 28, 1995 and February 3, 1996,  borrowings  under
the Credit Agreement bore interest ranging from prime plus 1.5% to prime plus 2%
or LIBOR plus 3%. Amounts  outstanding under the Credit Agreement as of February
1, 1997,  bear  interest at rates ranging from 9.0% to 10.75% which will vary in
the future depending upon prime and LIBOR.

In addition to  borrowings  under the Credit  Agreement,  the Company has issued
letters of credit  aggregating  approximately  $517,000 at February 1, 1997,  to
secure the payment of certain liabilities.

The aggregate maturities of the Company's long-term debt as of February 1, 1997,
are as follows: year ending 1998-$685,000; 1999-$479,000; 2000-$17,269,000;

                                      F-8


<PAGE>

7.       COMMITMENTS AND CONTINGENCIES:
         ------------------------------

Litigation - Lawsuits and claims are filed from time to time against the Company
in its ordinary course of business.  Management, after reviewing developments to
date with legal counsel, is of the opinion that the outcome of such matters will
not have a  material  adverse  effect on the net  assets of the  Company  or the
accompanying financial statements taken as a whole.

Employment  Agreements - The Company has employment  agreements  with certain of
its executives expiring between 1998 and 1999,  aggregating base compensation of
$2,177,000  over the term. The contracts  also provide for additional  incentive
payments  subject to performance  standards.  In addition,  other  employees are
eligible for  incentive  payments  based on  performance.  For fiscal 1996,  the
Company  expensed  approximately  $925,000 in incentive  payments.  No incentive
payments were expensed in fiscal years 1994 and 1995.

Lease Obligations - The Company has numerous noncancelable  operating leases for
retail  stores,  certain  office space and equipment.  Certain  facility  leases
provide for annual base minimum rentals plus contingent  rentals based on sales.
Renewal options are available under the majority of the leases.  The Company has
also entered into certain capital leases.

Future minimum lease payments under  noncancelable  operating and capital leases
together with the present value of net minimum lease  payments of capital leases
at February 1, 1997, are as follows (in thousands):

                  Operating          Capital
                     Leases           Leases
                  ---------          -------
1998          $      10,185    $          20
1999                  9,944               --
2000                  9,895               --
2001                  8,487               --
2002                  7,843               --
2003 and thereafter  30,731               --
--------------------------------------------
     Total    $      77,085               20
--------------------------------------------
Less:  Executory costs                     3
--------------------------------------------

Net minimum lease payments                17
Less:  Amounts representing interest       1
--------------------------------------------

Present value of net minimum lease
 payments                      $          16
--------------------------------------------

The minimum  rentals  above do not include  additional  payments for  percentage
rent,  insurance,  property  taxes  and  maintenance  costs  that  may be due as
provided for in the leases.  Many of the noncancelable  operating leases include
scheduled rent increases.

Total rental expense for operating leases,  including contingent rentals and net
of sublease payments received, was $8,903,000,  $ 10,189,000 and $10,224,000 for
the years  ended  January  28,  1995,  February  3, 1996 and  February  1, 1997,
respectively.  Minimum  rentals were  $8,893,000,  $ 10,023,000 and  $9,986,000,
respectively.  Contingent  rentals,  which are based on a  percentage  of sales,
approximated  $259,000,  $ 353,000  and  $395,000,  respectively.  Additionally,
sublease  payments  received  approximated  $249,000,   $187,000  and  $156,000,
respectively.

The Company  has signed a  five-year  agreement  with David  Leadbetter,  a golf
professional,  to produce golf and other  apparel  under his name.  Payments are
based on sales volumes.  The minimum annual  commitment  under this agreement is
$150,000.

8.       BENEFIT PLANS:
         --------------

Multi-Employer  Pension  Plan - Through  the year ended  January 29,  1994,  the
Company's employees covered by a collective bargaining agreement participated in
plans with pension and post-retirement benefits administered by the national and
local Union of  Needletrades  Industrial & Textile  Employees.  The Company made
contributions  to  the  plans  in  accordance  with  the  collective  bargaining
agreement.

During the year ended  January 29, 1994,  the  Company's  Board of Directors and
management   decided  to   terminate   the   Company's   participation   in  the
multi-employer   pension  plan.  The  related   liability  is  being  repaid  in
installments over four years through October, 1998. As of February 1, 1997 , the
Company owed approximately $1,240,000 related to the termination.

Defined  Benefit Pension Plan - In connection  with the above  termination,  the
Company adopted a new noncontributory  defined benefit pension plan to cover the
above-mentioned  union employees with equivalent  benefits to the multi-employer
plan.  The  Company's  contributions  are intended to provide for both  benefits
attributed  to service  to date and for  benefits  expected  to be earned in the
future. The annual contributions are not less than the minimum funding standards
set forth in the Employee  Retirement  Income  Security Act of 1974, as amended.
The plan provides for eligible  employees to receive benefits based  principally
on years of service with the Company.

The following  table sets forth the plan's funded status as of December 31, 1995
and 1996, the date of the latest actuarial valuations (in thousands).


                                      F-9


<PAGE>


Actuarial present value of benefit obligations:

                                        Feb. 3,      Feb. 1,
                                         1996         1997
                                        -------      -------
Accumulated benefit obligation,
including vested benefits of $520
 and $605                             $    564     $    728
------------------------------------------------------------
Projected benefit obligation for
  service rendered to date            $   (564)    $   (728)
Fair value of plan assets                  250          531
------------------------------------------------------------
Fair value of plan assets less
  than projected benefit obligation       (314)        (197)
Unrecognized net loss                      (18)          --
Unrecognized net transition liability      328          303
Adjustment required to recognize
  minimum liability                       (328)        (303)
------------------------------------------------------------
Accrued pension cost                  $   (332)    $   (197)
------------------------------------------------------------

Net periodic  pension expense for the years ended January 28, 1995,  February 3,
1996 and February 1, 1997, includes the following components (in thousands):

                        Jan. 28,    Feb. 3,     Feb. 1,
                          1995       1996        1997
                        --------    -------     -------
Normal service
 cost-benefits earned
 during the period     $     74    $   101     $    84
Interest cost on
 projected benefit
 obligation                  20         40          48
Actual return on plan
 assets                      (1)       (29)        (48)
Net amortization
 and deferral                14         42          37
-------------------------------------------------------
Net periodic pension
 expense               $    107    $   154     $   121
-------------------------------------------------------

The Company  recorded  minimum  pension  liabilities of $328,000 and $303,000 at
February  3, 1996 and  February  1, 1997,  respectively,  which is  included  in
"non-current  pension  liability",  representing  the  excess  of  the  unfunded
accumulated   benefit  obligation  over  previously  accrued  pension  costs.  A
corresponding  intangible  asset was  recorded  as an offset to this  additional
liability, which is included in "other non-current assets".

In determining the actuarial present value of the projected benefit  obligation,
the weighted average discount rate used was 7.75% fiscal 1996 and 8.0% in fiscal
1995 and the  expected  long-term  rate of  return on plan  assets  was 8.0% for
fiscal years 1995 and 1996.

Post-retirement   Benefit  Plan  -  In  connection   with  the   termination  of
participation  in the  multi-employer  pension plan described above, the Company
adopted a new post-retirement  benefit plan to cover the  above-mentioned  union
employees with equivalent benefits to the multi-employer  plan. The Company does
not pre-fund these benefits.

In accordance  with SFAS No. 106,  "Employers'  Accounting  for  Post-retirement
Benefits Other than  Pensions",  the Company  records the expected cost of these
benefits as expense during the years that employees render service.  The Company
has adopted the standards on a  prospective  basis as  permitted.  As such,  the
Company amortizes the related transition  liability over 20 years. The following
table sets  forth the  post-retirement  benefit  program's  funded  status as of
December 31, 1995 and 1996, the dates of the latest actuarial valuations for the
related periods (in thousands):

Accumulated post-retirement benefit:
                                           Feb. 3,    Feb. 1,
                                             1996       1997
                                           -------    -------

Retirees                                $      --   $    --
Fully eligible active plan participants    (1,440)   (1,145)
-------------------------------------------------------------
                                           (1,440)   (1,145)
Unrecognized net transition liability         985       931
Unrecognized net gain (loss)                   68      (418)
-------------------------------------------------------------
Accrued post-retirement benefit
  cost                                  $    (387)  $  (632)
-------------------------------------------------------------

Net periodic  post-retirement  benefit  expense for the years ended  January 28,
1995, February 3, 1996 and February 1, 1997,  includes the following  components
(in thousands):

                            Jan. 28,    Feb. 3,      Feb. 1,
                              1995       1996         1997
                            --------    -------      -------

Normal service cost -
 benefits earned during
 the period               $    69    $     99      $  115
Interest cost on
 accumulated post-
 retirement benefit
 obligation                    57          90          88
Net amortization and
 deferral                      36          43          42
------------------------------------------------------------
Net periodic post-
 retirement benefit
 expense                  $   162    $    232      $  245
------------------------------------------------------------

For measurement purposes, a 5% annual rate of increase in the per capita cost of
covered health care benefits was assumed.

                                      F-10

<PAGE>



The health  care cost  trend rate  assumption  has a  significant  effect on the
amounts  reported.  Increasing  the  assumed  health care cost trend rate by one
percentage  point  would  increase  the  accumulated   post-retirement   benefit
obligation by $190,000 and would increase net periodic  post-retirement  benefit
cost by $35,000.  The weighted  average  discount rate used in  determining  the
accumulated post-retirement benefit obligation was 7.75%.

Profit Sharing Plan - The Company maintains a defined contribution 401(k) profit
sharing plan for its employees.  All employees are eligible to participate after
one year of service.  Employee  contributions  to the plan are limited  based on
applicable  sections of the Internal  Revenue  Code.  The Company is required to
match a portion of employee  contributions  to the plan and may make  additional
contributions  at the discretion of the directors of the Company.  Contributions
by the Company to the plan were  approximately  $182,000,  $239,000 and $223,000
for the years  ended  January 28,  1995  February 3, 1996 and  February 1, 1997,
respectively.

9.       STORE REPOSITIONING COSTS:
         --------------------------

In the fourth quarter of fiscal 1995, the Company elected early adoption of SFAS
No.121 -- "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be  Disposed  of".  In the first  half of fiscal  1995,  the men's and
women's apparel industries began suffering a significant down-turn.  In the face
of a potential cash shortage and other factors  affecting the women's  business,
the Company  decided to discontinue  the women's product line (which was sold in
the same stores as the men's  products) to generate  cash.  The women's  product
line  represented  approximately  $33 million and $26 million of sales in fiscal
1994 and 1995, respectively (or 18% and 15% of sales,  respectively).  With this
loss of the women's volume,  and with the men's business  experiencing a decline
(but improving) certain  previously-profitable  stores became unprofitable since
the store rents remained basically unchanged.

Given these events, the Company performed a store-by-store analysis to determine
which stores were losing  money and not  expected to generate  future cash flows
that were  sufficient  to support the book values of the related  store  assets.
Based upon this analysis,  the Company determined that (a) certain stores needed
to be closed, down-sized or relocated and (b) a write-down of the specific store
leasehold  improvements  and equipment was  required.  As a result,  the Company
recorded an impairment loss of $2,300,000  representing  the writedown of assets
to fair value.  The fair values were determined  based on estimated  future cash
flows and market  value of the  assets.  In  addition,  the  Company  recorded a
$1,200,000 charge  representing an estimate of costs to be incurred to implement
the Company's plan to reposition its store base and to exit certain leases as it
discontinued  the  women's  business  and  re-aligned  its stores to support the
remaining men's-only business.  These costs are included in "store repositioning
costs" in the accompanying consolidated statement of income (loss) for the year
ended February 3, 1996 (fiscal 1995).

During fiscal 1996, the Company  closed two  unprofitable  full-line  stores and
five  catalog  stores  and  relocated  three  stores at a cost of  approximately
$930,000,  which included lease settlement payments and moving costs. The stores
that were closed in 1996  represented  approximately 2% of sales in fiscal 1995.
In 1997,  the  Company  expects  to  fully  utilize  the  remaining  reserve  by
relocating an additional full-line store and close up to three remaining catalog
stores.

10.      INCOME TAXES:
         -------------

At February 1, 1997, the Company had approximately $19.6 million of tax net
operating  loss  carryforwards  (NOLs) which expire as follows:  In the year
2006 - $4.6 million,  2009 - $4.4 million and 2010 - $10.6 million.  SFAS No.
109 requires that the tax benefit of such NOLs be recorded as an asset to the
extent that management  assesses the utilization of such NOLs to be "more likely
than not".  Realization  of the future tax benefits is dependent on the
Company'  ability to generate  taxable  income  within the  carryforward period.
Future,  levels of operating income are dependent upon general economic
conditions,  including  interest rates and general levels of economic  activity,
competitive  pressures  on sales  and  margins  and  other  factors  beyond  the
Company's  control.  Therefore no assurance can be given that sufficient taxable
income will be generated for full utilization of the NOLs.

Management has  determined,  based on the Company's  history of earnings and its
repositioning  results in fiscal 1996,  that future earnings of the Company will
more likely than not be sufficient to utilize at least $16 million NOLs prior to
their expiration.  Accordingly, the Company has recorded a deferred tax asset of
$6.1 million and a valuation allowance of $1.4 million relating to the NOLs. The
average  minimum taxable income that the Company would need to generate prior to
the  expiration of the NOLs would be less than the average  taxable  income that
the Company  earned  during  fiscal  years 1992  through  1994,  as adjusted for
unusual  charges.  Management  believes  that  although  the prior  earnings and
current year operating  results might justify a higher amount,  the $6.1 million
represents  a  reasonable  estimate  of the  future  utilization  of  the  NOLs.
Management  will  continue to evaluate the  likelihood  of future profit and the
necessity of future adjustments to the deferred tax asset valuation allowance.

During the year ended  January 29, 1994,  the Company filed for a prior year net
operating  loss  carryback  to a year in which the Company  was  included in the
consolidated  federal  income tax return of its pre-1986  parent and the Company
recorded a deferred tax asset of $3,000,000 in  anticipation  of collecting  the
refund.  In March 1996, the refund plus interest was collected.  Included in the
fiscal 1996 Financial  Statements is $600,000 of interest  income related to the
refund.


                                      F-11

<PAGE>

The  (provision)  benefit for income taxes was  comprised of the  following  (in
thousands):

                                 Years Ended
                  ------------------------------------------
                    January 28,   February 3,    February 1,
                       1995          1996           1997
                    -----------   -----------    -----------
Federal:
Current           $     (57)    $        74    $      (15)
Deferred               (372)          4,824          (126)

State:
Current                (377)            238            --
Deferred                (55)            709           (18)
------------------------------------------------------------
Net (provision)
 benefit for
income taxes      $    (861)    $     5,845    $     (159)
------------------------------------------------------------

The  differences  between the recorded  income tax  (provision)  benefit and the
"expected"  tax  (provision)  benefit based on the statutory  federal income tax
rate is as follows (in thousands):

                                   Years Ended
                         --------------------------------
                         Jan. 28,    Feb. 3,      Feb. 1,
                           1995       1996         1997
                         --------    -------      -------
Computed federal
  tax (provision)
  benefit at
  statutory rates      $   (773)  $    6,470   $     (140)
State income taxes,
  net of federal
  income tax effect        (285)         626          (23)
Valuation allowance          --       (1,365)          --
Other, net                  197          114            4
---------------------------------------------------------
Net (provision)
  benefit for income
   taxes               $   (861)  $    5,845   $     (159)
---------------------------------------------------------

Temporary  differences  between the financial reporting carrying amounts and tax
basis of assets  and  liabilities  give rise to  deferred  income  taxes.  Total
deferred  tax  assets  and  deferred  tax  liabilities  stated by sources of the
differences  between financial  accounting and tax basis of the Company's assets
and  liabilities  which give rise to the  deferred  tax assets and  deferred tax
liabilities are as follows (in thousands):

                           Feb. 3, 1996   Feb.1, 1997
                           ------------   -----------
Deferred Tax Assets:
 Long-term pension
  liability                   $   768     $   484
 Inventories                      956         487
 Property, plant
  and equipment                   897         163
Accrued liabilities             1,919       2,085
 Operating loss
  carryforwards and
  carrybacks                    9,270       6,092
Valuation allowance            (1,365)     (1,365)
-----------------------------------------------------
                               12,445       7,946
-----------------------------------------------------
Deferred Tax Liabilities:
  Prepaid expenses
   and other current
   assets                        (252)       (628)
  Property, plant and
   equipment                     (902)         --
 Miscellaneous                   (124)        (35)
-----------------------------------------------------
                               (1,278)       (663)
-----------------------------------------------------
Net Deferred Tax Asset        $11,167     $ 7,283
-----------------------------------------------------

11.       INCENTIVE OPTION PLAN:
          ----------------------

Effective  January 28, 1994,  the Company  adopted an Incentive Plan (the Plan).
The Plan  generally  provides for the granting of stock,  stock  options,  stock
appreciation  rights,  restricted  shares or any combination of the foregoing to
the eligible  participants,  as defined.  Approximately 954,000 shares of Common
Stock have been reserved for issuance  under the Plan.  The exercise price of an
option  granted under the Plan may not be less than the fair market value of the
underlying shares of Common Stock on the date of grant and the options expire at
the earlier of termination of employment or ten years from the date of grant.

As of February 1, 1997 options for approximately 826,300 shares had been granted
under the plan at exercise  prices  ranging  from $1.875 to $7.375 per share and
options for  approximately  409,000 shares were exercisable at February 1, 1997.
In addition there are 209,415 options outstanding at $9.170 per share which were
issued in fiscal 1993 under employment agreements.

The Company has  computed  for pro forma  disclosure  purposes  the value of all
compensatory  options  granted  during  fiscal  year  1995 and  1996,  using the
Black-Scholes  option  pricing model as prescribed by SFAS No. 123.  Assumptions
used for the pricing model include 7.8% for the risk-free interest rate in 1996,
expected  lives of 5-10  years,  expected  dividend  yield  of 0% each  year and
expected  volatility of 70% each year. Options were assumed to be exercised upon
vesting for the  purposes of this  valuation.  Adjustments  are made for options
forfeited prior to vesting. Had compensation costs for compensatory options been
determined  consistent  with SFAS No. 123,  the  Company's  pro forma (loss) net
income  would  have  been a loss of  $(13,203,000)  in 1995  and net  income  of
$223,000 in 1996.

                                      F-12

<PAGE>


Pro forma (loss)  earnings per share would have been $(1.94) in 1995 and $.03 in
1996.

The  following  table  summaries  the stock option  activity for the years ended
February 3, 1996 and February 1, 1997:

                     Number of   Exercise Price
                      Shares       Per Share
                     ---------   --------------
Outstanding as of
 January 28, 1995     741,965   $ 4.00 - 9.170
     Granted           29,000    1.875 - 3.875
     Exercised             --               --
     Terminated            --               --
-----------------------------------------------
Outstanding as of
 February 3, 1996     770,965    1.875 - 9.170
     Granted          265,750    1.625 - 4.750
     Exercised         (1,000)            3.25
     Terminated            --               --
-----------------------------------------------
Outstanding as of
 February 1, 1997   1,035,715    1.625 - 9.170
-----------------------------------------------


Weighted  average fair value of options  granted for the years ended February 3,
1996 and February 1, 1997, was $1.40 and $1.78, respectively.

12.       RELATED PARTY TRANSACTIONS:
          ---------------------------

The Company has an  executive  who is the  Chairman of the Board of a consulting
group.  The Company paid the group  approximately  $78,000 , $69,000 and $31,000
for the years ended  January 28,  1995,  February 3, 1996 and  February 1, 1997,
respectively, for professional services rendered.

The Company has also made a $200,000 loan to its  President in  accordance  with
his employment  contract which is included in "other  noncurrent  assets" in the
accompanying consolidated balance sheet.

13.      QUARTERLY FINANCIAL INFORMATION (Unaudited)
         -------------------------------------------

<TABLE>
<CAPTION>
                               FIRST                   SECOND           THIRD             FOURTH
                               QUARTER                 QUARTER          QUARTER           QUARTER          TOTAL
                               -------                 -------          -------           -------          -----
                                             (In Thousands Except Per Share Amounts)
<S><C>
FISCAL 1996
-----------
  Men's Sales                  $      37,346     $      33,770    $       36,817    $      47,125    $   155,058
  Women's Sales                           --                --                --               --             --
     Net sales                        37,346            33,770            36,817           47,125        155,058
  Gross profit                        17,681            14,378            17,275           20,858         70,192
  Income (loss) from operations        1,088              (878)              840            1,306          2,356
  Net Income (loss)                      228              (559)              109              473            251
  Net Income (loss) per share            .03              (.08)              .02              .07            .04

FISCAL 1995
-----------
  Men's Sales                  $      36,200     $      31,788    $       30,822    $      44,849    $   143,659
  Women's Sales                        8,223             9,483             7,016            1,186         25,908
     Net sales                        44,423            41,271            37,838           46,035        169,567
  Gross profit                        16,450            16,893            16,040           19,395         68,778
  Store repositioning costs               --                --                --           (3,500)        (3,500)
  Income (loss) from operations       (6,168)           (2,422)           (2,364)          (4,633)       (15,587)
  Net Income (loss)                   (4,203)           (1,990)           (2,043)          (4,950)       (13,186)
  Net Income (loss) per share          (0.62)            (0.29)            (0.30)           (0.73)         (1.94)
</TABLE>

                                      F-13