<PAGE>

                       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, 2003 OR

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

                         COMMISSION FILE NUMBER 0-19714

                              E COM VENTURES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

     FLORIDA (State or other jurisdiction of incorporation or organization)

               65-0977964 (I.R.S. Employer Identification Number)

    11701 NW 101 ST. ROAD, MIAMI, FL (Address of principal executive offices)

                                33178 (Zip Code)

       (305) 889-1600 (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value
                                (Title of Class)

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

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

    Indicate by check mark whether the  registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes |_| No |X|

    As of April 17, 2003, the number of shares of the registrant's  Common Stock
outstanding was 2,462,237.  The aggregate  market value of the Common Stock held
by non affiliates of the registrant as of August 3, 2002 was approximately  $5.9
million,  based on the closing  price of the Common Stock ($4.00) as reported by
the  NASDAQ  National  Market  on  such  date.  For  purposes  of the  foregoing
computation,  all executive officers,  directors and 5% beneficial owners of the
registrant are deemed to be affiliates.  Such determination should not be deemed
to be an admission  that such  executive  officers,  directors or 5%  beneficial
owners are, in fact, affiliates of the registrant.

DOCUMENTS INCORPORATED BY REFERENCE
    Certain  information  called for by Part III is incorporated  from the Proxy
Statement for the Annual Meeting of Shareholders  of the company,  which will be
filed no later than 120 days after the close of the fiscal year end.


                                       1
<PAGE>



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


<S>         <C>                                   <C>                                            <C>
  ITEM                                                                                          PAGE
  ----                                                                                          ----

                                                 PART I

   1.       Business                                                                              3
   2.       Properties                                                                            8
   3.       Legal Proceedings                                                                     8
   4.       Submission of Matters to a Vote of Security Holders                                   8


                                                PART II

   5.       Market for Registrant's Common Equity and Related Stockholder Matters                 9
   6.       Selected Financial Data                                                              10
   7.       Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                                        11
  7A.       Quantitative and Qualitative Disclosures About Market Risk                           21
   8.       Financial  Statements and Supplementary  Data                                        22
   9.       Changes in and Disagreements with Accountants on                                     45
                Accounting and Financial Disclosure


                                                PART III

  10.       Directors and Executive Officers of the Registrant                                   46
  11.       Executive Compensation                                                               46
  12.       Security Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters                                                              46
  13.       Certain Relationships and Related Transactions                                       46
  14.       Controls and Procedures                                                              46
  15.       Principal Accountant Fees and Services                                               46

                                                PART IV

  16.        Exhibits, Financial Statement Schedules and Reports on Form 8-K                     47
</TABLE>


<PAGE>


                           FORWARD-LOOKING STATEMENTS

       Certain  statements  within  this Form 10-K  constitute  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  All  forward-looking  statements  are  based on  current  expectations
regarding  important  risk  factors.  Accordingly,  actual  results  may  differ
materially  from those  expressed  in the  forward-looking  statements,  and the
making of such  statements  should not be  regarded as a  representation  by the
Company or any other person that the results expressed in the statements will be
achieved. See "Risk Factors That May Affect Future Results" in Item 7.


                                     PART I.


ITEM 1.  BUSINESS


                               BUSINESS STRATEGY

       E Com Ventures,  Inc., a Florida corporation  ("ECOMV" or the "Company"),
is a holding company that operates two  wholly-owned  subsidiaries,  Perfumania,
Inc.  ("Perfumania"),  a Florida corporation,  which is a specialty retailer and
wholesaler  of  fragrances  and related  products  and  perfumania.com,  inc., a
Florida  corporation  which is an  Internet  retailer  of  fragrances  and other
specialty items.

       Perfumania is a leading specialty retailer and wholesale distributor of a
wide  range of brand  name and  designer  fragrances.  As of  February  1, 2003,
Perfumania  operated a chain of 238 retail  stores  specializing  in the sale of
fragrances at  discounted  prices up to 75% below the  manufacturer's  suggested
retail  prices.  Perfumania's  wholesale  division  distributes  fragrances  and
related   products  to  national  and  regional   chains  and  other   wholesale
distributors  throughout  North  America  and  overseas.  Our  E-commerce  site,
www.perfumania.com  offers a selection of our more popular products for sale and
serves as an extension of the Perfumania shopping experience.  For a description
of  perfumania.com's  September  1999  initial  public  offering,  the sale of a
majority of our interest in perfumania.com and our subsequent repurchase of that
interest,  see Note 11 of Notes to Consolidated Financial Statements included in
Item 8.

       Perfumania and perfumania.com,  inc., are the sole operating subsidiaries
of the Company.  Perfumania operates its wholesale business as an unincorporated
division.  Its retail  business is managed and owned by Magnifique  Parfumes and
Cosmetics,  Inc.  ("Magnifique"),  a wholly-owned subsidiary of Perfumania.  For
ease of  reference  in this Form 10-K,  our retail and  wholesale  business  are
referred to as  divisions;  our Internet  sales are  included  with those of our
retail business. See Item 6 for Selected Financial Data by division.

RETAIL DIVISION

       MARKETING AND MERCHANDISING. Each of Perfumania's retail stores generally
offers  approximately  175 different  brands of fragrances  for women and men at
prices up to 75% below the manufacturer's  suggested retail prices. Stores stock
brand name and designer  brands such as Estee  Lauder(R),  Fendi(R),  Yves Saint
Laurent(R), Fred Hayman(R), Calvin Klein(R), Giorgio Armani(R),  Gucci(R), Ralph
Lauren/Polo(R),  Perry Ellis(R),  Liz  Claiborne(R),  Giorgio(R),  Hugo Boss(R),
Halston(R), Christian Dior(R), Chanel(R) and Cartier(R). Perfumania also carries
a private  label line of bath & body  treatment  products  under the name Jerome
Privee(R),  and a private  label line of cosmetics,  treatment and  aromatherapy
under the name Nature's Elements(R).

       The  cornerstone  of  Perfumania's   marketing   philosophy  is  customer
awareness  that its  stores  offer an  extensive  assortment  of brand  name and
designer  fragrances at discount  prices.  Perfumania posts highly visible price
tags for each item in its  stores,  listing  both the  manufacturers'  suggested
retail prices and  Perfumania's  discounted  prices to enable  customers to make
price comparisons.  In addition,  we utilize sales promotions such as "gift with
purchase" and "purchase with purchase" offers. From time to time, we test market
in our stores additional specialty gift items.

       Perfumania's  stores  are  "full-service"  stores.   Accordingly,   store
personnel are trained to establish personal rapport with customers,  to identify
customer  preferences  with  respect to both  product  and price  range,  and to
successfully  conclude  a sale.  Management  believes  that  attentive  personal
service  and  knowledgeable  sales  personnel  are key factors to the success of

                                       3
<PAGE>

Perfumania's  retail stores.  Perfumania's  store personnel are compensated on a
salary plus bonus basis.  Perfumania  has several  bonus  programs  that provide
incentives  for store  personnel to sell  merchandise  which have higher  profit
margins.  In addition,  to provide an incentive to reduce  expenses and increase
sales,  district managers are eligible to receive a bonus if store profitability
and  operational  goals are met.  Management  believes  that a key  component of
Perfumania's  ability to  increase  profitability  will be its  ability to hire,
train and retain store  personnel  and district  managers.  Perfumania  conducts
comprehensive training programs designed to increase customer satisfaction.

       Perfumania  primarily  relies on its distinctive  store design and window
displays  to attract  the  attention  of  prospective  customers.  In  addition,
Perfumania  distributes  advertising  flyers  and  brochures  by mail and in its
stores  and malls in which its  stores are  located.  The amount of  advertising
varies with the seasonality of the business.

       RETAIL  STORES.  Perfumania's  standard  store design  includes signs and
merchandise  displays  which are  designed to enhance  customer  recognition  of
Perfumania's  stores.  Perfumania's  stores average  approximately  1,400 square
feet; however,  stores located in manufacturer's  outlet malls tend to be larger
than  Perfumania's  other  stores.  Each store is managed by one manager and one
assistant  manager.  The average  number of employees  in a Perfumania  store is
five,  including  part-time  help.  District  managers visit stores on a regular
basis in an effort to ensure  knowledgeable  and attentive  customer service and
compliance with operational policies and procedures.

       INFORMATION  SYSTEMS.  Perfumania  has an integrated  information  system
including  E-commerce,  retail  outlet  and  corporate  systems.  These  systems
encompass every significant phase of our operations and provide  information for
planning,  purchasing,   pricing,  distribution,   finance  and  human  resource
decisions.  E-mail and other information are communicated  between the corporate
office  and  store  locations  through  an   enterprise-wide   Intranet.   Daily
compilation of sales,  gross margin,  and inventory levels enables management to
analyze  profitability  and  sell-through  by item and  product  line as well as
monitor the success of sale promotions.  Inventory is tracked through its entire
life cycle.  During 2003, a new Point of Sale system is being implemented in all
stores.  This system enables improved pricing and promotion  programs,  time and
attendance reporting, and enhanced inventory control.

       STORE  LOCATION  AND  EXPANSION.  Perfumania's  stores are  located in 35
states, the District of Columbia and Puerto Rico, including 47 in Florida, 26 in
New York,  18 in  California,  14 in Texas and 14 in Puerto  Rico.  Perfumania's
current  business  strategy  focuses on maximizing  sales by raising the average
dollar sale per transaction,  reducing expenses at existing stores,  selectively
closing  under-performing  stores and on a limited basis,  opening new stores in
proven geographic markets.  When opening new stores,  Perfumania seeks locations
primarily in regional and  manufacturers'  outlet malls and,  selectively,  on a
stand-alone basis in suburban shopping centers in metropolitan areas. To achieve
economies of scale with respect to advertising and management costs,  Perfumania
evaluates  opening  additional stores in markets where it already has a presence
or expanding into additional  markets that it believes have a population density
to support a cluster of stores.

       Perfumania's  current  average cost for opening a store is  approximately
$130,000,  including furniture and fixtures, build-out costs and other items. In
addition,  initial inventory in a new store ranges from  approximately  $150,000
during the first fiscal quarter to  approximately  $200,000 during the Christmas
holiday season. To support inventory in its stores,  Perfumania carries at least
four months supply of inventory in its warehouse.

       In fiscal years 2002, 2001 and 2000, Perfumania opened 4 stores, 5 stores
and 9 stores (including 6 acquired stores) respectively. Perfumania continuously
monitors  store  performance  and from time to time has closed  under-performing
stores, which typically have been older stores in undesirable locations.  During
fiscal years 2002, 2001 and 2000, Perfumania closed 13 stores, 15 and 28 stores,
respectively.  For  fiscal  year  2003,  Perfumania  will  continue  to focus on
improving the  profitability of its existing stores;  and management  expects to
open a maximum of 10 stores and close up to 10 stores.

WHOLESALE DIVISION

       Perfumania  distributes  fragrances on a wholesale  basis to national and
regional retail chains and other wholesale distributors throughout North America
and overseas.  During fiscal years 2002,  2001 and 2000, the wholesale  division
sold  to  approximately  5, 9 and 13  customers,  respectively.  One  Perfumania
customer, unaffiliated with the Company, accounted for 49.4%, 92.0% and 62.9% of
net wholesale sales during fiscal years 2002, 2001 and 2000, respectively. There
were no foreign wholesale sales during fiscal years 2002 and 2001; during fiscal
2000,  there was $1.1  million  of  foreign  wholesale  sales.  The  absence  of
wholesale sales was due to our continuing  strategic  initiative to redirect our
managerial,  administrative and inventory resources to our retail operations. We
expect the wholesale business will not increase significantly during fiscal year
2003.

                                       4
<PAGE>

PERFUMANIA.COM

       Perfumania.com  provides a number of advantages  for retail and wholesale
fragrance  sales.  Our Internet  site  enables us to display a larger  number of
products than  traditional  store-based  or catalog  sellers.  In addition,  the
ability to frequently  adjust  featured  selections and edit content and pricing
provides significant merchandising flexibility.  Our Internet site benefits from
the  ability  to  reach a large  group of  customers  from a  central  location.
Additionally,  we can also easily  obtain  demographic  and  behavioral  data of
customers,  increasing  opportunities  for  direct  marketing  and  personalized
services.  Because  brand  loyalty is a primary  factor  influencing a fragrance
purchase,  the ability to physically sense the fragrance product is not critical
to the purchasing decision. Perfumania.com's online store provides its customers
with value, selection, pricing and convenience.

       Our online store offers  visitors  several special  features  arranged in
simple,  easy-to-use formats to enhance product search, discovery and selection.
By clicking on the  displayed  products and product  categories,  users can move
directly to the location of the site that contains  details about the particular
products.  In  addition,  customers  can browse  the online  store by linking to
specially  designed  pages  dedicated  to  products of well known  national  and
specialty brands.  Customers can also link to pages by product category, such as
women's and men's brand name perfumes and colognes,  children's fragrances, gift
set specials and bath and body products.

       Customers  are offered a choice of over 2,000  designer and private label
fragrances,  fragrance related products,  accessories and bath and body products
for men and women at  discounted  prices.  High levels of  customer  service and
support are  critical  to retain and expand our  customer  base.  Perfumania.com
monitors  orders from the time they are placed  through  delivery  by  providing
numerous  points  of  electronic,   telephonic  and  personal  communication  to
customers.  All orders and shipments are confirmed by e-mail.  Customer  service
representatives are available during regular business hours by telephone.

       A variety of  relationships  have been  established with several Internet
sites to build traffic and attract customers.  Although  perfumania.com  obtains
most of its inventory from  Perfumania,  it may obtain  inventory from suppliers
depending on which offers the most  favorable  selection,  pricing,  quality and
terms.  Products are generally shipped within 24 hours of customer's orders. For
a description of  perfumania.com's  September 1999 initial public offering,  the
sale  of a  majority  of our  interest  in  perfumania.com  and  our  subsequent
repurchase  of that  interest,  see Note 11 of Notes to  Consolidated  Financial
Statements included in Item 8.

       In  September  2001,  we  entered  into a  licensing  agreement  with  an
affiliate to license our retail fragrance Internet Web site. In January 2003, we
issued a letter of default regarding the licensing agreement.  In February 2003,
we regained control of the retail fragrance Internet web site. See Investment in
Nimbus Group, Inc. in this Item 1 and Note 6 of Notes to Consolidated  Financial
Statements included in Item 8.

SOURCES OF SUPPLY

       During fiscal years 2002 and 2001,  Perfumania  purchased fragrances from
approximately 100 and 140 different suppliers, respectively,  including national
and  international  manufacturers,   distributors,  wholesalers,  importers  and
retailers.  Perfumania generally makes its purchases based on the most favorable
available  combination  of prices,  credit  terms,  quantities  and  merchandise
selection and, accordingly, the extent and nature of Perfumania's purchases from
its various  suppliers  change  constantly.  As is  customary  in the  fragrance
industry, Perfumania has no long-term or exclusive contracts with suppliers.

       Approximately 10% and 17% of Perfumania's total merchandise  purchased in
fiscal  years  2002 and  2001,  respectively,  was from  our  affiliate,  Parlux
Fragrances,   Inc.  ("Parlux"),  a  manufacturer  and  distributor  of  prestige
fragrances and related beauty products.  Ilia Lekach,  our Chairman of the Board
and  Chief  Executive  Officer  and one of our  principal  shareholders,  is the
Chairman  of the Board and Chief  Executive  Officer of Parlux and  beneficially
owns  approximately 27% of Parlux's  outstanding common stock. No other supplier
accounted for more than 10% of our merchandise purchases during 2002 or 2001.

       Approximately 9% and 4% of Perfumania's  total  merchandise  purchased in
fiscal  years 2002 and 2001, respectively, was from Grupo Tulin, a company owned
by  a former Director and brother of Ilia Lekach. Approximately 5% and less than
1%,  respectively,  of  Perfumania's total merchandise purchased in fiscal years
2002 and 2001 was acquired from S&R Fragrances, Inc., a company owned by another
brother  of  Ilia Lekach. Purchases from these affiliates are at lower prices or
on  better  terms  than  would  otherwise be available from other sources. These
purchases  do  not  include  products  manufactured  or  distributed  by Parlux.

                                       5
<PAGE>

       A  substantial  portion of  Perfumania's  merchandise  is purchased  from
secondary  sources such as distributors,  wholesalers,  importers and retailers.
Merchandise   purchased  from  secondary   sources   includes   trademarked  and
copyrighted  products  that were  manufactured  in the  United  States,  sold to
foreign  distributors and then  re-imported  into the United States,  as well as
trademarked  and  copyrighted  products  manufactured  and  intended for sale in
foreign  countries.  From time to time, U.S.  trademark and copyright owners and
their   licensees  and  trade   associations   have   initiated   litigation  or
administrative agency proceedings,  based on U.S. Customs Service regulations or
trademark or copyright  laws,  seeking to halt the  importation  into the United
States of such "gray market" merchandise or to restrict its resale in the United
States,  and some of these actions have been successful.  However,  but the U.S.
courts  remain  divided on the  extent to which  trademark,  copyright  or other
existing laws or regulations  can be used to restrict the importation or sale of
"gray market" merchandise. In addition, from time to time federal legislation to
restrict the importation or sale of "gray market" merchandise has been proposed,
but no such legislation has been adopted.

       As is often the case in the fragrance and cosmetics business, some of the
merchandise  purchased by  Perfumania  may have been  manufactured  by entities,
particularly  foreign  licensees  and  others,  who are not  the  owners  of the
trademarks or copyrights  for the  merchandise.  Perfumania's  secondary  market
sources generally will not disclose the identity of their suppliers,  which they
consider to be proprietary trade  information,  and Perfumania may not always be
able to demonstrate  that the  manufacturer  of specific  merchandise had proper
authority  from the trademark or copyright  owner to produce the  merchandise or
permit it to be resold in the United States.  Accordingly,  there is a risk that
if  Perfumania  were  called  upon or  challenged  by the owner of a  particular
trademark or copyright to demonstrate that specific merchandise was produced and
sold with the proper  authority  and it was unable to do so,  Perfumania  could,
among other things,  be restricted from reselling the particular  merchandise or
be subjected to other liabilities.

       Perfumania's  business  activities  could  become the subject of legal or
administrative actions brought by manufacturers,  distributors or others, any of
which actions could have a material  adverse effect on our business or financial
condition.  In addition,  future judicial,  legislative or administrative agency
action,  including possible import,  export, tariff or other trade restrictions,
could limit or eliminate some of Perfumania's secondary sources of supply or any
of its business activities.

DISTRIBUTION

       Perfumania's   retail  and  wholesale   operations   are  served  by  its
distribution  facility in Miami,  Florida. The lease for the facility expires in
July 2003,  at which  time the  distribution  facility  will be  relocated  to a
facility in Sunrise,  Florida.  The current  facility is  approximately  139,000
square feet of which 20,000 square feet is utilized as office space. The Sunrise
facility has  approximately  179,000 square feet of which  approximately  20,000
square  feet will be  utilized  as office  space,  and is  expected  to have the
capacity for our future growth.

       Perfumania  utilizes  independent  national trucking companies to deliver
merchandise  to its stores.  Deliveries  generally  are made  weekly,  with more
frequent  deliveries during the Christmas holiday season. Such deliveries permit
the stores to minimize  inventory storage space and increase the space available
for display and sale of merchandise.  Perfumania  generally ships merchandise to
wholesale customers by truck or ship. To expedite delivery of merchandise to its
customers,  Perfumania  sometimes  instructs its  suppliers to ship  merchandise
directly to wholesale division customers.

COMPETITION

       Retail  and  wholesale   perfume   businesses  are  highly   competitive.
Perfumania's retail competitors include department stores, regional and national
retail chains,  independent  drug stores,  duty-free  shops and other  specialty
retail  stores.  Perfumania  is the largest  specialty  retailer  of  discounted
fragrances  in the  United  States  in  terms  of  number  of  stores.  Some  of
Perfumania's competitors sell fragrances at discount prices and some are part of
large national or regional chains that have substantially  greater resources and
name recognition than  Perfumania.  Perfumania's  stores compete on the basis of
selling price, promotions, customer service, merchandise variety, store location
and ambiance. Perfumania believes that its perfumery concept, full-service sales
staff,  discount  prices,  large and varied selection of brand name and designer
fragrances and attractive shopping  environment are important to its competitive
position.

       Perfumania's  wholesale  division  competes  directly  with other perfume
wholesalers and perfume manufacturers,  some of which have substantially greater
resources  or  merchandise  variety  than  Perfumania.  The  wholesale  division
competes principally on the basis of merchandise selection,  price, availability
and delivery.

EMPLOYEES


                                       6
<PAGE>

       At February 1, 2003, we had 1,564 employees,  of whom 1,392 were employed
in Perfumania's  retail stores,  73 were employed in Perfumania's  warehouse and
distribution  operations and 99 were employed in executive,  administrative  and
other positions. Temporary and part-time employees are usually added during peak
sales periods  (principally  between  Thanksgiving  and Christmas).  None of our
employees are covered by a collective  bargaining  agreement and we consider our
relationship with our employees to be good.

TRADE NAME AND SERVICE MARK

       Perfumania's  stores use the trade name and service  mark  Perfumania(R);
Perfumania  also  operates 1 store  under the trade name  "Also  Perfumania,"  2
stores  under the trade name "Class  Perfumes"  in malls where we also operate a
Perfumania(R)  store,  one store under the trade name "Touch at Perfumania," one
store under the trade name "Perfumania Too," and 8 stand-alone  stores under the
trade  name  "Perfumania  Plus".  Perfumania  has common law rights to its trade
names and service mark in those general  areas in which its existing  stores are
located and has registered the service mark  Perfumania(R)  with the U.S. Patent
and Trademark  Office.  The registration  expires in 2009 and may be renewed for
10-year terms thereafter.

INVESTMENT IN NIMBUS GROUP, INC.

       During fiscal year 2000, we purchased  314,000  shares of common stock of
Take to Auction.Com,  Inc. ("TTA"),  an Internet auction site, for approximately
$2.5  million.  Our  Chairman  of the Board and Chief  Executive  Officer,  Ilia
Lekach, was also the Chairman of the Board and Chief Executive Officer of TTA at
that time.  In June 2000,  we  acquired  approximately  139,000  shares of TTA's
common stock upon  conversion  of a $1.0  million  convertible  promissory  note
receivable.  See "Item 7"  Management's  Discussion  and  Analysis of  Financial
Condition and Results of Operations - Liquidity and Capital Resources."

       In January  2001,  we  received  250,000  shares of TTA  common  stock as
partial payment on a loan receivable from Ilia Lekach.  These shares were valued
at $252,500 ($1.01 per share).

       As of February 3, 2001, the market price for TTA's common stock was below
our average cost per share of $5.38.  In  consideration  of accounting  guidance
that   considers   a  six  to  nine  month   decline   in  stock   price  to  be
other-than-temporary,  we valued  the  shares at $1.01 per share and  recorded a
non-cash charge of approximately $3.1 million to realized loss on investments on
the consolidated statement of operations for fiscal year 2000. As of November 2,
2002,  the market  price of the shares was again  below our  carrying  value and
approximately  $700,000  was recorded as a non-cash  charge to realized  loss on
investments on the consolidated statement of operations for fiscal year 2002.

       In   September   2001,   TTA   effected   a   corporate    reorganization
("Reorganization")  as a result of which TTA became a wholly owned subsidiary of
Nimbus Group, Inc. ("Nimbus"). As a result of the Reorganization;  our shares of
TTA common stock were  exchanged  for an equal number of shares of Nimbus common
stock.  Ilia Lekach was Chairman of the Board of TTA from October 1999 until the
Reorganization  and  has  been  Chairman  of  the  Board  of  Nimbus  since  the
Reorganization and was Interim Chief Executive Officer until March 21, 2003.

       In January  2002,  we received  300,000  shares of Nimbus common stock as
partial payment on a loan receivable from Ilia Lekach.  These shares were valued
at $357,000 ($1.19 per share).

       As of  February  1,  2002,  the  amount  due from  TTA was  approximately
$811,000,  and was included in prepaid  expenses and other current assets in the
accompanying  consolidated  balance sheet as of February 1, 2002.  During fiscal
year 2002, the amount due from TTA increased to  approximately  $2 million and a
provision for  impairment of the  receivable  was recorded.  In January 2003, we
issued a letter of default to TTA regarding the licensing agreement. In February
2003, we regained control of our retail Internet website.

       As of February 1, 2003, we owned approximately 1,003,000 shares of Nimbus
common stock  representing  approximately  13% of its total  outstanding  common
stock.  The  investment in Nimbus is shown on our balance  sheet as  investments
available  for sale in the amount of  approximately  $211,000  representing  the
market value of $0.21 per share at that date.




                                       7
<PAGE>

ITEM 2.           PROPERTIES


       Our executive  offices and distribution  facility are leased through July
2003  pursuant  to a  lease,  which  currently  provides  for  monthly  rent  of
approximately  $78,000 and specified annual  increases.  The option to renew the
existing lease will not be exercised.  Alternatively,  the executive offices and
distribution  facility  will be relocated to a 179,000  square foot  facility in
Sunrise,  Florida.  We entered into an  approximate  fifteen-year  lease for the
Sunrise  location  effective  September  2002. The current  monthly rent for the
Sunrise location is approximately $73,000 with specified future increases.

       All of Perfumania's retail stores are located in leased premises. Most of
the store  leases  provide for the payment of a fixed amount of base rent plus a
percentage of sales,  ranging from 3% to 15%, over certain minimum sales levels.
Store leases typically require Perfumania to pay all utility charges,  insurance
premiums, real estate taxes and certain other costs. Some of Perfumania's leases
permit the  termination  of the lease if specified  minimum sales levels are not
met. See Note 13 to our  Consolidated  Financial  Statements  included in Item 8
hereof, for additional information with respect to our store leases.


ITEM 3.  LEGAL PROCEEDINGS

       We are involved in legal  proceedings in the ordinary course of business.
Management  cannot  presently  predict  the outcome of these  matters,  although
management  believes that the ultimate  resolution  of these matters  should not
have a  materially  adverse  effect  on our  financial  position  or  result  of
operations.


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

       On January 24, 2003, we held our annual meeting of  shareholders.  At the
annual meeting, the shareholders  elected Ilia Lekach,  Donovan Chin, Carole Ann
Taylor,  Joseph  Bouhadana,  Miles  Raper,  and  James  Fellus  to the  Board of
Directors.  In addition, the shareholders ratified the appointment of Deloitte &
Touche LLP as our independent auditors. The following table reflects the results
of the meeting:

    ELECTION OF DIRECTORS:
    ---------------------

<TABLE>
<CAPTION>
                                           SHARES       SHARES VOTED       SHARES VOTED      ABSTAIN/
            TOTAL                          VOTED             FOR              AGAINST        WITHHELD         NON-VOTES
    ---------------------                  -----     -----------------  -----------------  ------------     -------------

<S>                                      <C>             <C>                  <C>              <C>              <C>
    Ilia Lekach                          2,316,892       2,297,125             --             19,767           92,439

    Donovan Chin                         2,316,892       2,298,350             --             18,542           92,439

    Carole Ann Taylor                    2,316,892       2,298,350             --             18,542           92,439

    James Fellus                         2,316,892       2,298,365             --             18,527           92,439

    Joseph Bouhadana                     2,316,892       2,298,365             --             18,527           92,439

    Miles Raper                          2,316,892       2,298,365             --             18,527           92,439
</TABLE>

    RATIFICATION OF AUDITORS:
    ------------------------

<TABLE>
<CAPTION>
                                                SHARES         SHARES VOTED     SHARES VOTED      ABSTAIN/
             TOTAL                               VOTED              FOR            AGAINST        WITHHELD       NON-VOTES
    ----------------------                     ---------    ----------------  -----------------  ------------  ------------

<S>                                            <C>             <C>                 <C>             <C>           <C>
    Ratify Appointment of Deloitte &           2,316,892       2,310,048           3,744           3,100         92,439
    Touche LLP

</TABLE>



                                       8
<PAGE>

                                    PART II.


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


MARKET INFORMATION

       Our Common  Stock is traded on the NASDAQ  Stock  Market under the symbol
ECMV.  The following  table sets forth the high and low closing sales prices for
our Common  Stock for the periods  indicated,  as  reported by the NASDAQ  Stock
Market. All prices have been adjusted to give effect to the one-for-four reverse
stock-split effective March 20, 2002.

                  FISCAL 2002            HIGH           LOW
               -----------------    ------------   ------------

               First Quarter              $3.32          $2.00
               Second Quarter              5.45           2.40
               Third Quarter               5.50           3.80
               Fourth Quarter              4.25           3.69

                 FISCAL 2001            HIGH           LOW
               -----------------    ------------   ------------

               First Quarter              $4.76          $2.12
               Second Quarter              4.48           2.80
               Third Quarter               4.40           2.20
               Fourth Quarter              4.12           2.04




       As of April 17,  2003,  there were 67 holders of record,  which  excluded
Common Stock held in street name.  The closing  sales price for the Common Stock
on April 17, 2003 was $3.15 per share.

REVERSE STOCK-SPLIT

       Our Board of Directors  authorized a one-for-four  reverse stock-split of
our outstanding  shares of common stock for  shareholders of record on March 20,
2002.  Accordingly,  all share and per share  data  shown in this Form 10-K have
been retroactively adjusted to reflect this reverse stock split.

DIVIDEND POLICY

       We have not declared or paid any dividends on our Common Stock and do not
currently  intend to declare or pay cash  dividends in the  foreseeable  future.
Payment  of  dividends,  if  any,  will be at the  discretion  of the  Board  of
Directors  after taking into account  various  factors,  including our financial
condition,  results of operations,  current and anticipated cash needs and plans
for expansion.  Perfumania is prohibited  from paying cash  dividends  under its
line of credit agreement with GMAC Commercial Finance LLC.







                                       9
<PAGE>



ITEM 6.  SELECTED FINANCIAL DATA

       The  selected  financial  data  presented  below for the last five fiscal
years  and as of the  end of  each  such  fiscal  years  are  derived  from  our
consolidated  financial  statements and should be read in conjunction  with such
financial statements and related notes.

       Our  fiscal  year  ends  on the  Saturday  closest  to  January  31.  All
references  herein to fiscal years are to the calendar  year in which the fiscal
year begins; for example,  fiscal year 2002 refers to the fiscal year that began
on February 3, 2002 and ended on February 1, 2003.  Fiscal year 2000 included 53
weeks as compared to 52 weeks for all other years presented.

<TABLE>
<CAPTION>
                                                                             FISCAL YEAR ENDED
                                               -----------------------------------------------------------------------------------

                                               FEBRUARY 1, 2003 FEBRUARY 2, 2002 FEBRUARY 3, 2001 JANUARY 29, 2000 JANUARY 30, 1999
                                               ---------------- ---------------- ---------------- ---------------- ----------------

<S>                                            <C>              <C>              <C>              <C>              <C>
                                                            (IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
STATEMENT OF OPERATIONS DATA:
Net sales, retail division                     $       199,369  $      184,142   $       185,371  $       155,953  $       134,790
Net sales, wholesale division                            2,145           9,210            21,199           36,975           40,466
                                               ---------------- ---------------- ---------------- ---------------- ----------------
  Total net sales                                      201,514         193,352           206,570          192,928          175,256
                                               ---------------- ---------------- ---------------- ---------------- ----------------
Gross profit, retail division                           84,159          78,468            79,218           68,613           57,072
Gross profit, wholesale division                           435           1,767             4,216            7,019            7,545
                                               ---------------- ---------------- ---------------- ---------------- ----------------
  Total gross profit                                    84,594          80,235            83,434           75,632           64,617
                                               ---------------- ---------------- ---------------- ---------------- ----------------
Selling, general & administrative expenses              76,178          72,918            79,884           71,354           72,502
Provision for doubtful accounts                              -              55                55               60                -
Provision for impairment of receivable from afiliate     1,961               -                 -                -                -
Provision (recovery) for impairment of assets
  and store closings                                       663             727              (506)           3,427            1,035
Depreciation & amortization                              6,024           6,825             5,819            4,725            4,480
                                               ---------------- ---------------- ---------------- ---------------- ----------------
  Total operating expenses                              84,826          80,525            85,252           79,566           78,017
                                               ---------------- ---------------- ---------------- ---------------- ----------------
Loss from operations before other
  income (expense)                                        (232)           (290)           (1,818)          (3,934)         (13,400)
Other income (expense)
  Interest expense, net                                 (1,883)         (3,095)           (8,179)          (6,589)          (4,882)
  Share of loss of partially-owned affiliate                 -               -            (1,388)          (3,165)               -
  Gain on sale of affiliate's common stock                   -               -             9,999           14,974                -
  Realized loss on investments                            (711)              -            (4,819)               -                -
  Miscellaneous (expense) income, net                        -             (18)               85             (118)             645
                                               ---------------- ---------------- ---------------- ---------------- ----------------
Income (loss) before income taxes                       (2,826)         (3,403)           (6,120)           1,168          (17,637)
Benefit (provision) for income taxes                         -             211                 -             (124)          (1,337)
                                               ---------------- ---------------- ---------------- ---------------- ----------------
Net income (loss)                              $        (2,826) $       (3,192)  $        (6,120) $         1,044  $       (18,974)
                                               ================ ================ ================ ================ ================
Weighted average shares outstanding:
  Basic                                              2,528,326       2,420,467         2,360,456        2,054,660        1,664,971
  Diluted                                            2,528,326       2,420,467         2,360,456        2,566,905        1,664,971

Basic income (loss) per share                  $         (1.12) $        (1.32)  $         (2.59)  $         0.51  $        (11.40)
Diluted income (loss) per share                $         (1.12) $        (1.32)  $         (2.59)  $         0.41  $        (11.40)

SELECTED OPERATING DATA:
Number of stores open at end of period                     238             247               257              276              289
Comparable store sales increase                           10.2%            2.5%             16.9%            12.9%             0.0%

BALANCE SHEET DATA:
Working capital (deficiency)                   $         1,804  $        2,760   $       7,015     $        8,687  $        (3,835)
Total assets                                           103,423         102,559         107,329            105,656           95,129
Long-term debt, less current portion (1)                 7,600           5,204          11,531              5,032            3,404
Total shareholders' equity                              21,853          22,603          26,395             30,689           17,636

</TABLE>


(1) Amount indicates redeemable common equity of $471 as of January 30, 1999 but
does not include  long-term  severance  payables of $284,  $191 and $1,038 as of
February 3, 2001, January 29, 2000 and January 30, 1999, respectively.







                                       10
<PAGE>

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


GENERAL

       Perfumania's retail division accounts for most of our net sales and gross
profit. Perfumania's overall profitability depends principally on our ability to
attract  customers  and  successfully   conclude  retail  sales.  Other  factors
affecting our profitability  include general economic  conditions,  competition,
availability of volume discounts, number of stores in operation, timing of store
openings  and  closings  and  the  effect  of  special   promotions  offered  by
Perfumania.

       The following table sets forth items from our Consolidated  Statements of
Operations  expressed  as a  percentage  of  total  net  sales  for the  periods
indicated:

<TABLE>
<CAPTION>

                                            PERCENTAGE OF NET SALES

                                                                                         FISCAL YEAR
                                                                             ---------------------------------
                                                                               2002        2001         2000
                                                                             --------    --------     --------
<S>                                                                            <C>         <C>          <C>
          Net sales, retail division..................................         98.9%       95.2%        89.7%
          Net sales, wholesale division...............................          1.1         4.8         10.3
                                                                             --------    --------     --------
             Total net sales..........................................        100.0       100.0        100.0
                                                                             --------    --------     --------
          Gross profit, retail division...............................         42.2        42.6         42.7
          Gross profit, wholesale division............................         20.3        19.2         19.9
                                                                             --------    --------     --------
             Total gross profit.......................................         42.0        41.4         40.4
                                                                             --------    --------     --------
          Selling, general and administrative expenses                         37.8        37.7         38.7
          Provision  for impairment of receivable from affiliate                1.0          --           --
          Provision (recovery) for impairment of assets and
             store closings...........................................          0.3         0.4         (0.2)
          Depreciation and amortization...............................          3.0         3.5          2.8
                                                                             --------    --------     --------
             Total operating expenses.................................         42.1        41.6         41.3
                                                                             --------    --------     --------
          Loss from operations before other income (expense)..........         (0.1)       (0.2)        (0.9)
                                                                             --------    --------     --------
          Other income (expense):
             Interest expense, net....................................         (0.9)       (1.6)        (4.0)
             Equity in loss of partially-owned affiliate                         --          --         (0.7)
             Gain on sale of affiliate's common stock                            --          --          4.9
             Realized loss on investments.............................         (0.4)         --         (2.3)
             Miscellaneous expense, net...............................           --          --           --
                                                                             --------    --------     --------
          Loss before income taxes....................................         (1.4)       (1.8)        (3.0)
          Benefit for income taxes....................................           --         0.1           --
                                                                             --------    --------     --------
          Net loss....................................................         (1.4)%      (1.7)%       (3.0)%
                                                                             --------    --------     --------
</TABLE>











RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

       Some of the  statements  in this  annual  report,  including  those  that
contain  the  words  "anticipate,"   "believe,"  "plan,"  "estimate,"  "expect,"
"should,"  "intend"  and  other  similar   expressions,   are   "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Those  forward-looking  statements  involve  known and unknown  risks,
uncertainties  and other factors that may cause actual  results,  performance or
achievements of our company or our industry to be materially  different from any
future  results,  performance  or  achievements  expressed  or  implied by those
forward-looking statements.

WE MAY HAVE PROBLEMS RAISING MONEY NEEDED IN THE FUTURE


                                       11
<PAGE>

       Our growth  strategy  includes  selectively  opening  and  operating  new
Perfumania  retail  locations and increasing the average retail sales per store.
We may need to  obtain  funding  to  achieve  our  growth  strategy.  Additional
financing  may not be  available  on  acceptable  terms,  if at all. In order to
obtain additional financing, we may be required to issue securities with greater
rights than those  currently  possessed by holders of our common  stock.  We may
also be required to take other  actions which may lessen the value of our common
stock, including borrowing money on terms that are not favorable to us.

PERFUMANIA'S BUSINESS IS SUBJECT TO SEASONAL  FLUCTUATIONS,  WHICH COULD LEAD TO
FLUCTUATIONS IN OUR STOCK PRICE

       Perfumania  has   historically   experienced   and  expects  to  continue
experiencing  higher sales in the third and fourth  fiscal  quarters than in the
first and second fiscal quarters. Purchases of fragrances as gift items increase
during the Christmas holiday season which results in significantly higher fourth
fiscal  quarter  retail  sales.  If our  quarterly  operating  results are below
expectations  of stock  market  analysts,  our stock  price might  decline.  Our
quarterly  results may also vary as a result of the timing of new store openings
and store  closings,  net sales  contributed by new stores and  fluctuations  in
comparable sales of existing stores. Sales levels of new and existing stores are
affected by a variety of factors,  including the retail sales  environment,  the
level  of  competition,  the  effect  of  marketing  and  promotional  programs,
acceptance of new product introductions,  adverse weather conditions and general
economic conditions.

PERFUMANIA MAY EXPERIENCE  SHORTAGES OF THE MERCHANDISE IT NEEDS BECAUSE IT DOES
NOT HAVE LONG-TERM AGREEMENTS WITH SUPPLIERS

       Perfumania's  success depends to a large degree on our ability to provide
an extensive assortment of brand name and designer fragrances. Perfumania has no
long-term purchase contracts or other contractual assurance of continued supply,
pricing or access to new products. If Perfumania is unable to obtain merchandise
from one or more key  suppliers  on a timely  basis,  or if there is a  material
change in Perfumania's ability to obtain necessary  merchandise,  our results of
operations could be seriously harmed.

PERFUMANIA NEEDS TO SUCCESSFULLY MANAGE ITS GROWTH

       Perfumania  may not be able to sustain the growth in revenues that it has
achieved  historically.  Perfumania's  growth is somewhat dependent upon opening
and operating new retail stores on a profitable basis,  which in turn is subject
to, among other things,  securing  suitable store sites on  satisfactory  terms,
hiring, training and retaining qualified management and other personnel,  having
adequate capital resources and successfully integrating new stores into existing
operations.  It is possible that Perfumania's new stores might not achieve sales
and  profitability  comparable to existing  stores,  and it is possible that the
opening of new locations might adversely affect sales at existing locations.

PERFUMANIA COULD BE SUBJECT TO LITIGATION BECAUSE OF THE MERCHANDISING ASPECT OF
ITS BUSINESS

       Some  of  the   merchandise   Perfumania   purchases  from  suppliers  is
manufactured  by entities who are not the owners of the trademarks or copyrights
for the  merchandise.  The owner of a  particular  trademark  or  copyright  may
challenge  Perfumania to demonstrate that the specific  merchandise was produced
and sold with the proper  authority and if  Perfumania is unable to  demonstrate
this, it could,  among other things, be restricted from reselling the particular
merchandise.  This  type of  restriction  could  adversely  affect  Perfumania's
business and results of operations.



FUTURE GROWTH MAY PLACE  STRAINS ON OUR  MANAGERIAL,  OPERATIONAL  AND FINANCIAL
RESOURCES

       If  we  grow  as  expected,  a  significant  strain  on  our  managerial,
operational  and financial  resources may occur.  Further,  as the number of our
users,  advertisers  and other  business  partners  grow, we will be required to
manage multiple  relationships  with various  customers,  strategic partners and
other third  parties.  Future  growth or increase in the number of our strategic
relationships could strain our managerial,  operational and financial resources,
inhibiting our ability to achieve the rapid execution  necessary to successfully
implement our business plan. In addition, our future success will also depend on
our  ability  to expand our sales and  marketing  organization  and our  support
organization commensurate with the growth of our business and the Internet.

WE ARE SUBJECT TO INTENSE COMPETITION

                                       12
<PAGE>

       Some of Perfumania's  competitors  sell fragrances at discount prices and
some are part of large  national  or  regional  chains  that have  substantially
greater  resources and name  recognition than  Perfumania.  Perfumania's  stores
compete on the basis of selling price, customer service, merchandise variety and
store  location.  Many of our current and  potential  competitors  have  greater
financial,  technical,  operational, and marketing resources. We may not be able
to compete  successfully against these competitors in developing our products or
services.

PERFUMANIA'S BUSINESS MAY BE AFFECTED BY THE CONTINUING ECONOMIC DOWNTURN

       Sales levels at  Perfumania's  retail  stores may be  adversely  affected
during  fiscal  year 2003 and beyond by the  continuing  economic  downturn  and
recession in the United States. Due to increased unemployment, stagnant business
growth rates and the continuing poor  performance of the stock market,  consumer
spending in general and  especially on  discretionary  items,  may decline.  The
length of this  economic  downturn  may  adversely  impact our  business and the
results of our operations in the future.

EFFECT OF WAR IN IRAQ

       The recent  military  action taken by the United States and other nations
in Iraq may cause a disruption to commerce  throughout the world.  To the extent
that such  disruptions  further slow the global  economy and  negatively  impact
consumer  spending in the United  States,  our  business  and the results of our
operations  in fiscal  year 2003 and beyond may be  adversely  affected.  We are
unable to  predict  whether  the threat of new  terrorist  attacks in the United
States or the military  action in Iraq will have a long-term  adverse  effect on
our business.

EXPANDING OUR BUSINESS THROUGH  ACQUISITIONS AND INVESTMENTS IN OTHER BUSINESSES
AND TECHNOLOGIES PRESENTS SPECIAL RISKS

       We may  expand  through  the  acquisition  of  and  investment  in  other
businesses. Acquisitions involve a number of special problems, including:

          o    difficulty  integrating acquired  technologies,  operations,  and
               personnel with our existing business;
          o    diversion  of  management's  attention  in  connection  with both
               negotiating the acquisitions and integrating the assets;
          o    the need for additional financing;
          o    strain on  managerial  and  operational  resources as  management
               tries to oversee larger operations; and
          o    exposure to unforeseen liabilities of acquired companies.


       We may not be able to successfully address these problems.  Moreover, our
future operating  results will depend to a significant  degree on our ability to
successfully manage growth and integrate acquisitions.

CRITICAL ACCOUNTING POLICIES

       Our  consolidated  financial  statements have been prepared in accordance
with accounting  principles  generally accepted in the United States of America.
Preparation  of these  statements  requires  management  to make  judgments  and
estimates.  Some  accounting  policies  have a  significant  impact  on  amounts
reported in these  financial  statements.  A summary of  significant  accounting
policies can be found in Notes to the Consolidated  Financial Statements as Note
2.

       We have also  identified  certain  accounting  policies  that we consider
critical to  understanding  our business and our results of operations  and have
provided below additional information on those policies.

Inventory Adjustments and Reserves

       Inventories  are  stated at the lower of cost or  market.  We review  our
inventory on a regular basis for excess and  potentially  slow moving  inventory
based on prior sales, future sales forecasts and through specific identification
of obsolete or damaged merchandise.

Impairment of Long-Lived Assets

When facts and  circumstances  indicate  that the values of  long-lived  assets,
including  intangibles,  may be impaired,  an  evaluation of  recoverability  is
performed by comparing the carrying value of the assets to projected future cash
flows in addition to other  quantitative and qualitative  analyses.  Inherent in
this process is significant  management judgment as to the projected cash flows.

                                       13
<PAGE>

Upon  indication  that the carrying value of such assets may not be recoverable,
the  Company   recognizes  an  impairment  loss  as  a  charge  against  current
operations.  Cash flows for retail assets are identified at the individual store
level. Judgments are also made as to whether  under-performing  stores should be
closed. Even if a decision has been made not to close an under-performing store,
the assets at that store may be impaired.

COMPARISON OF FISCAL YEARS 2002 AND 2001

       Net sales  increased  4.2% from  $193.4  million  in fiscal  year 2001 to
$201.5 million in fiscal year 2002. The increase in net sales during fiscal year
2002 was due to an 8.3% increase in retail sales (from $184.1  million to $199.4
million) and a decrease in wholesale  sales (from $9.2 million to $2.1 million).
The  increase in sales was  principally  due to a 10.2%  increase in  comparable
store sales.  The average  number of stores  operated  decreased from 250 during
fiscal  year 2001 to 242 in fiscal  year  2002.  The  increase  in  Perfumania's
comparable store sales was due to an improved merchandise assortment and product
promotions  at our retail  stores.  The decrease in  wholesale  sales was due to
management's decision to concentrate on the more profitable retail operations.

       Gross profit increased 5.4% from $80.2 million in fiscal year 2001 (41.4%
of total net  sales) to $84.6  million in fiscal  year 2002  (42.0% of total net
sales) as a result of higher  sales  and  gross  profit in the  retail  division
offset by lower sales and gross profit in the wholesale division.

       Gross profit for the retail division increased 7.3% from $78.5 million in
fiscal year 2001 to $84.2 million in fiscal year 2002,  principally  as a result
of higher retail sales volume. As a percentage of net retail sales, gross profit
for the retail  division  decreased  slightly  from 42.6% in fiscal year 2001 to
42.2% in fiscal year 2002.

       Gross profit for the wholesale  division  decreased  from $1.8 million in
fiscal year 2001 to $0.4 million in fiscal year 2002.  The wholesale  division's
gross margin in fiscal 2002 was 20.3% compared to 19.2% in fiscal year 2001. The
decrease  in gross  profit was due to lower  wholesale  sales.  Wholesale  sales
historically yield a lower gross margin compared to retail sales.

       Selling,  general and  administrative  expenses increased 4.5% from $73.0
million  in  fiscal  year  2001 to $76.2  million  in  fiscal  year  2002.  As a
percentage of net sales, selling,  general and administrative expenses increased
slightly  from  37.7% in  fiscal  year 2001 to 37.8% in fiscal  year  2002.  The
increase  is  attributable  primarily  to higher  employee  compensation  costs,
including  incentive  compensation  paid to store personnel due to higher retail
sales. The majority of our selling,  general and administrative  expenses relate
to the retail division.

       Provision for impairment of receivable from an affiliate was $2.0 million
during  fiscal year 2002 and  represents  a  provision  for a  receivable  which
management  has  determined  may not be  collectible.  No comparable  receivable
impairment was recorded during fiscal year 2001. See further  discussion at Note
6 of the Notes to Consolidated Financial Statements.

       A provision for  impairment of assets and store  closings of $0.7 million
was recorded in both fiscal years 2002 and 2001. The asset impairment charges in
both fiscal years relate to retail store locations with negative cash flows that
were either closed or are targeted for closure.

       Loss from  operations  was $0.2 million in fiscal year 2002 compared with
$0.3  million in fiscal  year 2001  despite  the  provision  for  impairment  of
receivable from an affiliate of $2.0 million in fiscal year 2002.

       We  define  EBITDA(a),  as loss from  operations  less  depreciation  and
amortization. EBITDA decreased 11.4% or $0.7 million from $6.5 million in fiscal
year 2001 to $5.8  million  in  fiscal  year  2002.  The  decrease  was due to a
provision  for  impairment  of  receivable  from an affiliate and an increase in
selling,  general and  administrative  expenses,  offset by an increase in gross
profit. EBITDA should not be considered as an alternative to, or more meaningful
than, operating income as determined in accordance with GAAP, or as a measure of
liquidity. Management believes EBITDA provides meaningful additional information
on our operating results. Because EBITDA is not calculated in the same manner by
all  companies,  the  representation  herein  may  not be  comparable  to  other
similarly titled measures of other companies.

       Depreciation and amortization decreased $0.8 million, or 11.7%, in fiscal
year 2002 compared to fiscal year 2001 due primarily to the adoption of SFAS 142
on February 3, 2002 which  eliminated  the  amortization  of goodwill  and other
intangible assets with indefinite useful lives.


                                       14
<PAGE>

       Interest expense (net) decreased from $3.1 million in fiscal year 2001 to
$1.9  million in fiscal  year 2002.  The  decrease  was  primarily  due to lower
interest rates and a reduction in the outstanding  balance of convertible  notes
payable.

       Realized loss on  investments  of $0.7 million in fiscal year 2002 is due
to a  decline  in the  market  prices on  securities  available  for sale  which
resulted in the Company recording a non-cash charge.  See further  discussion at
Note 11 of the Notes to Consolidated Financial Statements.

       As a result of the foregoing, we had a net loss of $2.8 million in fiscal
year 2002 compared to a net loss of $3.2 million in fiscal year 2001.

COMPARISON OF FISCAL YEARS 2001 AND 2000

       Net sales  decreased  6.4% from  $206.6  million  in fiscal  year 2000 to
$193.4 million in fiscal year 2001. The decrease in net sales during fiscal year
2001 was due to a slight decrease in retail sales (from $185.4 million to $184.1
million)  and a 56.6%  decrease in wholesale  sales (from $21.2  million to $9.2
million).  The  decrease in retail  sales was due to a reduction  in the average
number of stores  operated,  from 264 during  fiscal  year 2000 to 250 in fiscal
year 2001 as well as weakness in the United States  economy.  Comparable  retail
store sales  increased  2.5% in fiscal year 2001 compared with fiscal year 2000.
The  increase  in  Perfumania's  comparable  store  sales was due to an improved
merchandise assortment and product promotions at our retail stores. The decrease
in wholesale  sales was due to our continuing  strategic  initiative to redirect
our managerial, administrative and inventory resources to our retail operations.

       Gross profit decreased 4.0% from $83.4 million in fiscal year 2000 (40.4%
of total net  sales) to $80.2  million in fiscal  year 2001  (41.4% of total net
sales) as a result  of lower  sales and  gross  profit  in both the  retail  and
wholesale divisions.

       Gross profit for the retail division decreased 1.1% from $79.2 million in
fiscal year 2000 to $78.5 million in fiscal year 2001,  principally  as a result
of lower retail sales volume. As a percentage of net retail sales,  gross profit
for the retail  division  decreased  from 42.7% in fiscal  year 2000 to 42.5% in
fiscal year 2001.

       Gross profit for the wholesale  division  decreased  from $4.2 million in
fiscal year 2000 to $1.8 million in fiscal year 2001.  The wholesale  division's
gross margin in fiscal 2001 was 19.2% compared to 19.9% in fiscal year 2000. The
decrease  in gross  profit was due to lower  wholesale  sales.  Wholesale  sales
historically yield a lower gross margin when compared to retail sales.

       Selling,  general and  administrative  expenses decreased 8.7% from $79.9
million in fiscal year 2000 to $72.9  million in fiscal year 2001.  The decrease
was attributable to lower store operating expenses resulting from a reduction in
the average number of stores operated from 264 during fiscal year 2000 to 250 in
fiscal year 2001 as well as better expense  control.  Also,  approximately  $1.1
million of severance  costs were incurred in fiscal year 2000 for various senior
management  whose  employment  with the Company was  terminated in that year. We
also incurred additional payroll and other  administrative costs associated with
our  reorganization  into a holding company in fiscal year 2000. As a percentage
of net sales, selling,  general and administrative expenses decreased from 38.7%
in fiscal year 2000 to 37.7% in fiscal year 2001.  The  majority of our selling,
general and administrative expenses relate to the retail division.

       A provision for  impairment of assets and store  closings of $0.7 million
was  recorded in fiscal year 2001  compared  with a recovery of $0.5  million in
fiscal year 2000. The recovery in fiscal year 2000 was  attributable to the $1.0
million reversal of a write-off on a convertible note receivable  offset by $0.5
million of  impairment  charges for assets  related to retail  stores which were
closed  during  fiscal year 2000.  The asset  impairment  charges in fiscal 2001
relate to retail  store  locations  with  negative  cash flows that were  either
closed or are targeted for closure.

       As a result of the  foregoing,  loss from  operations was $0.3 million in
fiscal year 2001 compared with $1.8 million in fiscal year 2000.

       EBITDA(a)  increased  63.3% or $2.5  million  from $4.0 million in fiscal
year 2000 to $6.5  million  in fiscal  year 2001.  The  increase  was  primarily
attributable  to  decreases  in  selling,  general and  administrative  expenses
described above.


                                       15
<PAGE>

       Depreciation and amortization increased $1.0 million, or 17.3%, in fiscal
year 2001 compared to fiscal year 2000 due primarily to amortization of goodwill
related to the acquisition of  perfumania.com  in May 2000 (see Note 11 of Notes
to Consolidated  Financial  Statements) and to increases in capital spending for
systems improvements over the past two years.

       Interest expense (net) decreased from $8.2 million in fiscal year 2000 to
$3.1 million in fiscal year 2001. The decrease was primarily due to the issuance
of $9.0 million of  convertible  notes in March 2000 and the resulting  non-cash
interest charges of approximately  $2.6 million in fiscal year 2000, a reduction
in the  outstanding  balance of  convertible  notes  payable and a lower average
outstanding balance and interest rate on our bank line of credit. See "Liquidity
and Capital Resources."

       Gain on the sale of an affiliate's  common stock totaled $10.0 million in
fiscal year 2000;  the gain was  attributable  to the sale of 600,000  shares of
Envision  Development  Corporation ("EDC") and the exchange of 400,000 shares of
EDC common stock for the acquisition of perfumania.com.

       Realized  loss on  investments  totaled $4.8 million in fiscal year 2000.
The losses were primarily  attributable to realized losses of approximately $1.1
million  on the  sale of  securities  and a  decline  in the  market  prices  on
securities available for sale which resulted in the Company recording a non-cash
charge of $3.7 million.

       As a result of the foregoing, we had a net loss of $3.2 million in fiscal
year 2001 compared to a net loss of $6.1 million in fiscal year 2000.

<TABLE>
<CAPTION>

                                                      FISCAL YEARS
                                   ----------------------------------------------------
EBITDA Reconciliation (a):              2002               2001              2000
--------------------------------   ----------------------------------------------------


<S>                                <C>                 <C>               <C>
Loss from operations               $     (232,183)     $   (290,050)     $  (1,817,450)

Depreciation and amortization           6,024,400         6,824,861          5,818,964
                                   ---------------     -------------     --------------

EBITDA                             $    5,792,217      $  6,534,811      $   4,001,514
                                   ===============     =============     ==============

</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

       Our principal  capital  requirements  for operating  purposes are to fund
Perfumania's inventory purchases,  renovate existing stores and selectively open
new stores.  During fiscal years 2002 and 2001, we financed  these  requirements
primarily  through  cash flows  from  operations,  borrowings  under our line of
credit, capital equipment leases and other short-term borrowings.

       Perfumania's   three  year  senior  secured  credit  facility  with  GMAC
Commercial  Finance LLC ("GMAC") provides for borrowings of up to $40.0 million,
of which $32.1  million was  outstanding  and $0.9  million was  available as of
February 1, 2003,  to support  normal  working  capital  requirements  and other
general  corporate  purposes.  Advances  under the line of credit are based on a
formula of eligible  inventories  and bears  interest at a floating rate ranging
from (a) prime  less  0.75% to prime  plus 1% or (b) LIBOR  plus  1.75% to 3.50%
depending on a financial ratio test. As of February 1, 2003, the credit facility
bore interest at 3.4%.  Borrowings  are secured by a first lien on all assets of
Perfumania  and the  assignment of a life  insurance  policy on our Chairman and
Chief Executive Officer.  The credit facility contains limitations on additional
borrowings, capital expenditures and other items, and contains various covenants
including  maintenance of minimum net worth, and certain key ratios,  as defined
by the lender.  As of February 1, 2003,  Perfumania  was in compliance  with all
financial covenants of the credit facility.

       Pursuant  to the terms of the  credit  agreement  with  GMAC,  the credit
facility was extended from May 13, 2003 to May 13, 2004.

       In October 2000, we entered into a capital  lease of  approximately  $3.9
million of new point-of-sale equipment for our retail stores. The lease is for a
thirty-six  month term.  Approximately  $1.1 million  remains  outstanding as of
February 1, 2003.

       In April  1999 and July  1999,  we issued an  aggregate  of $2.0  million
Series A and $2.0 million Series B Convertible Notes, respectively. The Series A
and Series B Notes were convertible  into our common stock,  bore interest at 8%
and any  remaining  non-redeemed  portion  was payable in full in April 2002 and
July 2002, respectively. In April 2002 and December 2002, we repaid the Series A
and Series B debt, respectively. The conversion price was the lower of (A) $4.35
per  share for the  Series A Notes  and $3.41 per share for the  Series B Notes,

                                       16
<PAGE>

subject  to  adjustment  or  (B)  a  floating  conversion  price  determined  by
multiplying  (1) the average closing bid price of the common stock for the three
trading  days  immediately  preceding  the  date of  determination,  by (2) 80%,
subject to adjustment. The conversion price could have been adjusted pursuant to
antidilution provisions in the convertible notes.

       On March 9, 2000 and  March 27,  2000,  we  issued an  aggregate  of $4.0
million of Series C  Convertible  Notes and $5.0 million of Series D Convertible
Notes,  respectively.  The notes are  convertible  into our common  stock,  bear
interest at 8% and were payable in full in March 2003. The  conversion  price is
the lower of (A) $9.58  per share for the  Series C and $7.76 for the  Series D,
subject  to  adjustment  or  (B)  a  floating  conversion  price  determined  by
multiplying  (1) the average closing bid price of the common stock for the three
trading  days  immediately  preceding  the  date of  determination,  by (2) 80%,
subject  to  adjustment.  The  conversion  price  may be  adjusted  pursuant  to
antidilution provisions in the convertible notes.

         In February 2001, we entered into a Convertible Note Option  Repurchase
Agreement (the "Agreement") with the holders of our outstanding  Series A, B, C,
and D Convertible  Notes. The Agreement  provided that we had the monthly option
to  repurchase  the then  outstanding  $8.8  million  convertible  notes over an
eleven-month period, at a price equal to the unpaid principal balance plus a 20%
premium. The portion of the notes redeemable in each of the eleven months varied
as per a specified  redemption  schedule.  In the event that we made  redemption
payments as per the schedule,  the note holders were  restricted from converting
any part of the  remaining  outstanding  and  unpaid  principal  balance of such
holder's  notes into our common  stock.  During fiscal year 2001, we repaid $4.1
million  to the  note  holders.  As of  February  1,  2003  the  Series  A and B
Convertible Notes had been repaid in full.

       In February  2002, we entered into a Convertible  Note Option  Repurchase
Agreement (the "Agreement")  with the holders of our outstanding  Series C and D
Convertible  Notes.  The Agreement  provides that we have the monthly  option to
repurchase the approximate $4.9 million  outstanding  notes over an eleven month
period beginning February 2002, at a price equal to the unpaid principal balance
plus a 20% premium.  The portion of the notes  redeemable  in each of the eleven
months  varies as per a  specified  redemption  schedule.  In the event  that we
exercise our monthly option, the note holders are restricted from converting any
part of the remaining  outstanding and unpaid principal balance of such holder's
notes into our common stock.  During  fiscal year 2002, we repaid  approximately
$4.2 million to the note-holders.

       In December  2002,  we entered into an  Amendment  to the  February  2002
Convertible  Note  Option  Repurchase  Agreement.   The  Amendment  provides  an
extension  of the  maturity  date of the  Series  C and D  Convertible  Notes to
September 15, 2003 with a monthly  option to repurchase the  approximately  $1.2
million in Notes over the extended maturity date.

       The holders of all the remaining  Convertible  Notes are restricted  from
converting to the extent that the holder owns more than 9.9% of our  outstanding
common stock.

       In accordance with accounting  literature,  when debt is convertible at a
discount from the then current common stock market price, the discounted  amount
represents an incremental  yield, or a "beneficial  conversion  feature",  which
should be recognized as a return to the debt holders.  Based on the market price
of our common stock at the date of issuance, our Series C and Series D Notes had
beneficial  conversion  features of approximately $1.2 million and $1.4 million,
respectively,  at such point in time which represented a non-cash charge that is
included in  interest  expense on the  accompanying  consolidated  statement  of
operations in fiscal year 2000.

       In December  1999, we loaned $1.0 million to TTA pursuant to the terms of
a convertible  promissory note. The principal balance of the note was payable on
December 20, 2001,  and interest,  which accrued at a rate of 6% per annum,  was
payable  semi-annually  commencing June 2000. We had the right to convert, for a
period of 14 days after TTA's  initial  public  offering,  all of the  principal
amount of the note into shares of TTA's common  stock at a conversion  price per
share equal to the initial  public  offering  price.  TTA  commenced its initial
public  offering on June 13, 2000 and we  converted  the $1.0  million note into
138,889 shares of TTA's common stock.

       Due  to  the   uncertainty   of  TTA's   initial   public   offering  and
collectability  of the note, we wrote off the principal  balance of the note and
related  interest  receivable  as of  February  3,  2001.  As a result  of TTA's
successful  initial  public  offering  which occurred on June 13, 2000, the $1.0
million  principal  balance  and  related  interest  previously  written off was
reversed in the first quarter of fiscal 2000.

       In March 2000, we loaned TTA an additional  $1.0 million  pursuant to the
terms of a convertible  promissory  note. The terms of the note were the same as
the December 1999 note  described  above except that the  principal  balance was
payable on March 8, 2002 and  interest  was  payable  semi-annually,  commencing

                                       17
<PAGE>

September  2000.  The note was repaid in full in June 2000.  As an  incentive to
provide the loans,  TTA granted us  warrants to purchase  200,000  shares of its
common stock at its initial public offering price. The warrants were exercisable
in whole or in part until June 13, 2001 but were not exercised.

       On  October  12,  2000,  we  borrowed  $500,000  from  TTA.  The loan was
unsecured, matured on December 31, 2000 and bore interest at the rate charged by
our major lender. The loan was repaid in December 2000.

       On September 30, 2002 and June 30, 2001,  Perfumania  signed $3.0 million
subordinated  note agreements with Parlux.  The notes were in consideration  for
the  reduction of $3.0 million in trade  payables due to Parlux.  The notes were
due on March 31,  2003 and  March  31,  2002  with  various  periodic  principal
payments,  bore  interest  at  prime  plus 1% and was  subordinated  to all bank
related  indebtedness.  As of  February  1,  2003  and  February  2,  2002,  the
outstanding  principal  balance  due on the notes was  $100,000.  The notes were
repaid in full in April 2003 and April 2002, respectively.

       In fiscal  year 2002,  net cash  provided  by  operating  activities  was
approximately  $8.7 million compared with $14.3 million in fiscal year 2001. The
decrease in net cash provided by operating  activities was  principally a result
of the net change in our accounts payable to affiliates and non-affiliates.

       Net  cash  used  in  investing   activities   in  fiscal  year  2002  was
approximately $1.9 million,  principally due to capital  expenditures related to
opening  new  stores  and  renovating  existing  stores.  We  intend to focus on
continuing to improve the  profitability  of our existing  stores and anticipate
that we will open no more than 10 stores in fiscal 2003. Currently,  our average
capital  expenditure for opening a store is  approximately  $130,000,  including
furniture and fixtures, equipment, build-out costs and other items. In addition,
initial inventory (not including inventory  replenishment) in a new store ranges
from  approximately  $150,000  during the first fiscal quarter to  approximately
$200,000 during the Christmas holiday season.

       In fiscal  year  2002,  net cash used in  financing  activities  was $5.4
million.  This  was  principally  due  to the  use of  $4.2  million  to  redeem
convertible  notes payable,  $3.0 million to repay  subordinated  debt, and $1.8
million for capital lease obligations.  These amounts paid were partially offset
by the net proceeds from a note  receivable and interest from Ilia Lekach in the
amount of $3.0 million and bank borrowings of approximately $0.9 million.

       In December 1999,  our Board of Directors  approved the repurchase by the
Company of up to 375,000 shares of our common stock,  reflecting its belief that
our common stock  represented  a significant  value at its then current  trading
price.  In January 2001, the Board approved an increase in the stock  repurchase
program by an additional 250,000 shares and in February 2002, the Board approved
an increase in the stock  repurchase  program by an additional  250,000  shares.
Pursuant to these  authorizations,  we have  repurchased  approximately  780,000
shares of common stock for  approximately  $7.1 million during fiscal 2000, 2001
and 2002, including approximately 13,000 shares for $47,000 in fiscal year 2002.

       Management believes that Perfumania's borrowing capacity under the credit
facility,  projected cash flows from  operations and other short term borrowings
will be sufficient to support our working  capital needs,  capital  expenditures
and debt service for at least the next twelve months.

SEASONALITY AND QUARTERLY RESULTS

       Our operations  historically have been seasonal, with higher sales in the
fourth fiscal quarter than the other three fiscal quarters. Significantly higher
fourth  quarter  retail sales result from  increased  purchases of fragrances as
gift items during the Christmas  holiday season.  Our quarterly results may vary
due to the timing of new store openings, net sales contributed by new stores and
fluctuations  in  comparable  sales of existing  stores.  Results of any interim
period are not necessarily indicative of the results that may be expected during
a full fiscal year.

RECENT ACCOUNTING STANDARDS

       In July 2001, the Financial  Accounting  Standards  Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other
Intangible  Assets.  This Statement affected our treatment of goodwill and other
intangible assets at the start of fiscal year 2002. The Statement  requires that
goodwill  existing at the date of adoption be reviewed for  possible  impairment
and that impairment tests be periodically repeated, with impaired assets written
down to fair value.  Additionally,  existing goodwill and intangible assets must

                                       18
<PAGE>

be  assessed  and  classified   consistent   with  the   Statements'   criteria.
Amortization  of goodwill and other  intangible  assets with  indefinite  useful
lives will cease. Intangible assets with estimated useful lives will continue to
be  amortized  over  those  periods.  Goodwill  amortization  will no  longer be
recorded.  The  adoption  of SFAS No.  142 in  fiscal  year  2002 did not have a
significant impact on our financial position or results of operations.

       In accordance with SFAS No. 142, we conducted an internal valuation based
on  discounted  future  cash  flows of  perfumania.com  (see Note 3 for  further
discussion).  Based on this valuation, no significant impairment was identified.
SFAS No. 142 does not permit the  restatement  of  previously  issued  financial
statements, but does require the disclosure of prior results adjusted to exclude
amortization  expense  related to goodwill and intangible  assets,  which are no
longer  being  amortized.  On an as adjusted  basis,  basic and diluted loss per
share for fiscal  years  2002,  2001 and 2000,  respectively,  are  adjusted  to
exclude amounts no longer being amortized under the provisions of SFAS No. 142.

<TABLE>
<CAPTION>
                                                             FISCAL YEARS
                                            ------------------------------------------------
                                                2002              2001            2000
                                            --------------   ---------------  --------------

<S>                                         <C>              <C>              <C>
Net loss as reported                        $  (2,825,700)   $   (3,191,657)  $  (6,120,291)
Goodwill amortization                                   -           573,051         436,236
                                            --------------   ---------------  --------------
  Adjusted net loss                         $  (2,825,700)   $   (2,618,606)  $  (5,684,055)
                                            ==============   ===============  ==============

Basic loss per share
  Reported basic loss per share             $       (1.12)   $        (1.32)  $       (2.59)
  Goodwill amortization                                 -              0.24            0.18
                                            --------------   ---------------  --------------
  Adjusted basic loss per share             $       (1.12)   $        (1.08)  $       (2.41)
                                            ==============   ===============  ==============

Diluted loss per share
  Reported diluted loss per share           $       (1.12)   $        (1.32)  $       (2.59)
  Goodwill amortization                                 -              0.24            0.18
                                            --------------   ---------------  --------------
  Adjusted diluted loss per share           $       (1.12)   $        (1.08)  $       (2.41)
                                            ==============   ===============  ==============

</TABLE>

       In July  2001,  the  FASB  issued  SFAS No.  143,  Accounting  For  Asset
Retirement  Obligations.  This Statement  requires  capitalizing  any retirement
costs as part of the total cost of the related long-lived asset and subsequently
allocating  the total expense to future  periods using a systematic and rational
method.  Adoption of this Statement is required for fiscal years beginning after
June 15, 2002. We do not expect a significant  impact on our financial  position
and results of operations from the adoption of this Statement.

       In  October  2001,  the FASB  issued  SFAS No.  144,  Accounting  For The
Impairment Or Disposal Of Long-Lived Assets. This Statement supersedes Statement
No.  121 but  retains  many of its  fundamental  provisions.  SFAS No.  144 also
supersedes the accounting and reporting  provisions of APB Opinion 30, Reporting
the Results of Operations - Reporting the Effects of a Segment of a Business and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions,  for
the disposal of a segment of a business.  Additionally,  this Statement  expands
the scope of discontinued operations to include more disposal transactions.  The
adoption of SFAS No. 144 in fiscal year 2002 did not have a  significant  impact
on our financial position and results of operations.

       In  April  2002,  the  FASB  issued  SFAS  No.  145,  Rescission  of FASB
Statements  No. 4, 44 and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections.  SFAS No. 145 which all but eliminates the  presentation  in income
statements of debt  extinguishments as extraordinary items. SFAS No. 145 will be
effective  for fiscal years  beginning  after May 15, 2002.  SFAS No. 145 is not
expected to have a significant  effect on our financial  position and results of
operations.

       In June  2002,  the  FASB  issued  SFAS No.  146,  Accounting  for  Costs
Associated with Exit or Disposal  Activities.  SFAS No. 146 addresses  financial
accounting and reporting for costs  associated with exit or disposal  activities
and  nullifies   Emerging  Issues  Task  Force  (EITF)  Issue  94-3,   Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity.  The  provisions  of the  Statement are effective for exit of disposal
activities that are initiated  after December 31, 2002,  with early  application
encouraged.  We do not expect a significant impact on our financial position and
results of operations from the adoption of this Statement.


                                       19
<PAGE>

       In September  2002,  the FASB Emerging  Issues Task Force issued EITF No.
02-16,  Accounting by a Reseller for Cash Consideration  Received from a Vendor.
EITF No. 02-16  addresses how a reseller of a vendor's  products  should account
for cash consideration (as that term is defined in EITF No. 01-9, Accounting for
Consideration  Given by a Vendor to a  Customer  or a Reseller  of the  Vendor's
Products)  received from a vendor.  EITF 02-16 did not have a material effect on
our financial position and results of operation.

       In November  2002,  the FASB issued  Interpretation  No. 45,  Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees of Indebtedness to Others,  an  interpretation of FASB Statements No.
5,  57  and  107  and  a  rescission  of  FASB   Interpretation   No.  34.  This
Interpretation  elaborates on the  disclosures  to be made by a guarantor in its
interim and annual financial  statements about its obligations  under guarantees
issued.  The  Interpretation  also  clarifies  that a  guarantor  is required to
recognize,  at inception of a guarantee,  a liability  for the fair value of the
obligations  undertaken.  The initial recognition and measurement  provisions of
the  Interpretation  are  applicable  to  guarantees  issued or  modified  after
December  31,  2002  and  are not  expected  to have a  material  effect  on the
Company's   financial  position  and  results  of  operations.   The  disclosure
requirements  are  effective  for  financial  statements  of interim  and annual
periods ending after December 31, 2002.

       In  December  2002,  the  FASB  issued  SFAS  No.  148,   Accounting  for
Stock-Based  Compensation  -  Transition  and  Disclosure,  an amendment of FASB
Statement No. 123. This Statement amends FASB Statement No. 123,  Accounting for
Stock-Based  Compensation,  to provide  alternative  methods of transition for a
voluntary change to the fair value method of accounting for stock-based employee
compensation.  In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require  prominent  disclosures  in both annual and interim
financial statements.  Certain of the disclosure  modifications are required for
fiscal  years  ending  after  December 15, 2002 and are included in the notes to
these consolidated financial statements.

<TABLE>
<CAPTION>

                                                                            FISCAL YEARS
                                                      ---------------------------------------------------------
                                                            2002                2001               2000
                                                      ------------------  -----------------  ------------------
<S>                                                   <C>                 <C>                     <C>
Net loss as reported:                                 $      (2,825,700)  $     (3,191,657)  $      (6,120,291)
 Deduct: Total stock based employee
  compensation expense included in reported
  net loss, net                                                       -                  -                   -
 Add: Total stock based employee
  compensation expense not included in reported
  net loss, net                                       $        (478,449)  $       (396,704)  $        (565,061)
                                                      ------------------  -----------------  ------------------

Proforma net loss:                                    $      (3,304,149)  $     (3,588,361)  $      (6,685,352)
                                                      ==================  =================  ==================

Proforma net loss per share:
 Basic                                                $           (1.31)  $          (1.47)  $           (2.84)
                                                      ==================  =================  ==================
 Diluted                                              $           (1.31)  $          (1.47)  $           (2.84)
                                                      ==================  =================  ==================

</TABLE>

CHANGES IN FOREIGN EXCHANGE RATES CREATE RISK

       Although  large  fluctuations  in  foreign  exchange  rates  could have a
material  effect on the prices we pay for  products  purchased  from outside the
United  States,  such  fluctuations  have not been  material  to our  results of
operations  to date.  Transactions  with foreign  suppliers are in United States
dollars.  We believe  inflation has not had a material  impact on our results of
operations  and  we are  generally  able  to  pass  through  cost  increases  by
increasing sales prices.




                                       20
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       We conduct business in the United States where the functional currency of
the country is the United States dollar.  As a result, we are not at risk to any
foreign exchange translation exposure on a prospective basis.

       Our  exposure  to market  risk for  changes  in  interest  rates  relates
primarily to our bank line of credit.  The bank line of credit bears interest at
a variable rate, as discussed above under "Liquidity and Capital Resources".  We
mitigate interest rate risk by continuously  monitoring the interest rates. As a
result of borrowings associated with our operating and investing activities,  we
are exposed to interest  rate risk. As of February 1, 2003 and February 2, 2002,
our  primary  source of funds for  working  capital and other needs is a line of
credit that provides for borrowings up to $40.0 million.

       Of the $42.1  million  and $39.2  million  of  short-term  and  long-term
borrowings  on our balance  sheet as of  February 1, 2003 and  February 2, 2002,
respectively,  approximately  23.7% and 20.4%,  respectively,  represented fixed
rate  instruments.  The line of credit bears interest at a floating rate ranging
from (a) prime less  .075% to prime  plus 1.0%,  or (b) LIBOR plus 1.75% to 3.5%
depending on a financial  ratio test. For fiscal year 2002, the credit  facility
bore  interest at an average  rate of 4.1%. A  hypothetical  10% adverse move in
interest  rates would  increase  fiscal years 2002 and 2001 interest  expense by
approximately $0.1 million and $0.3 million, respectively.


                                       21
<PAGE>





ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       The financial information and the supplementary data required in response
to this Item are as follows:

<TABLE>
<CAPTION>
                                                                                                            PAGE
                                                                                                            ----

<S>                                                                                                          <C>
                   E Com Ventures, Inc. and Subsidiaries

                   Independent Auditors' Report........................................................      23

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

                   Consolidated Statements of Operations for the Fiscal Years Ended February 1, 2003,
                   February 2, 2002 and February 3, 2001...............................................      25

                   Consolidated Statements of Changes in Shareholders' Equity for the Fiscal Years Ended
                   February 1, 2003,   February 2, 2002, and February 3, 2001..........................      26

                   Consolidated Statements of Cash Flows for the Fiscal Years Ended February 1, 2003,
                   February 2, 2002, and February 3, 2001..............................................      27

                   Notes to Consolidated Financial Statements..........................................      28
                   Schedule II - Valuation and Qualifying Accounts and Reserves........................      45

</TABLE>

                                       22
<PAGE>

INDEPENDENT AUDITORS' REPORT



To the Board of Directors of
E Com Ventures, Inc.:


We have audited the accompanying  consolidated balance sheets of E Com Ventures,
Inc. and  subsidiaries  (the  "Company")  as of February 1, 2003 and February 2,
2002,  and  the  related  consolidated  statements  of  operations,  changes  in
shareholders'  equity and cash  flows for each of the three  years in the period
ended  February  1, 2003.  Our audits  also  included  the  financial  statement
schedule listed in the Index at Item 14(a)(2).  These  financial  statements and
financial statement schedule are the responsibility of the Company's management.
Our  responsibility  is to express an opinion on these financial  statements and
financial statement schedule based on our audits.

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

In  our  opinion,  such consolidated financial statements present fairly, in all
material  respects,  the  financial  position  of  E  Com  Ventures,  Inc.  and
subsidiaries  as  of  February  1, 2003 and February 2, 2002, and the results of
their  operations and their cash flows for each of the three years in the period
ended  February  1,  2003,  in  conformity  with accounting principles generally
accepted  in  the United States of America. Also, in our opinion, such financial
statement  schedule,  when  considered  in  relation  to  the basic consolidated
financial  statements  taken  as  a  whole,  presents  fairly,  in  all material
respects,  the  information  set  forth  therein.

As discussed in Note 2 to the  consolidated  financial  statements,  the Company
changed its method of accounting for  intangible  assets to conform to Statement
of Financial Accounting Standard No. 142.


/s/ DELOITTE & TOUCHE LLP
Certified Public Accountants


Miami, Florida
April 18, 2003




                                       23
<PAGE>

                      E COM VENTURES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS:                                                        FEBRUARY 1, 2003                FEBRUARY 2, 2002
                                                         -----------------------------     -------------------------
<S>                                                      <C>                               <C>
Current assets:
Cash and cash equivalents                                $                  2,964,645      $              1,600,787
Trade receivables, net                                                        744,456                       635,240
Advances to suppliers                                                       1,814,935                     3,426,525
Inventories, net                                                           68,717,163                    68,387,570
Prepaid expenses and other current assets                                   1,169,524                     1,336,287
Receivable from affiliate                                                           -                       811,169
Investments available for sale                                                210,607                     1,313,740
                                                         -----------------------------     -------------------------
  Total current assets                                                     75,621,330                    77,511,318

Property and equipment, net                                                24,556,691                    21,348,967
Goodwill and other intangible assets                                        2,508,775                     2,740,315
Other assets, net                                                             735,828                       958,026
                                                         -----------------------------     -------------------------
  Total assets                                           $                103,422,624      $            102,558,626
                                                         =============================     =========================

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:
Bank line of credit                                      $                 32,081,831      $             30,734,662
Current portion of long-term debt                                              31,860                       454,219
Accounts payable, non-affiliates                                           20,905,826                    17,924,889
Accounts payable, affiliates                                               13,331,718                    16,767,667
Accrued expenses and other liabilities                                      5,168,634                     5,956,743
Subordinated note payable, affiliate                                          100,000                       100,000
Current portion of obligations under capital leases                           981,784                     1,664,827
Current portion of convertible notes payable                                1,215,215                     1,148,429
                                                         -----------------------------     -------------------------
  Total current liabilites                                                 73,816,868                    74,751,436

Long-term debt, less current portion                                                -                        31,860
Long-term portion of obligations under capital leases                       7,752,315                     1,076,106
Convertible notes payable                                                           -                     4,095,811
                                                         -----------------------------     -------------------------
  Total liabilities                                                        81,569,183                    79,955,213
                                                         -----------------------------     -------------------------

Commitments and contingencies

Shareholders' equity:
Preferred stock, $0.10 par value, 1,000,000
   shares authorized, none issued                                                   -                             -
Common stock, $.01 par value, 6,250,000 shares
   authorized; 3,215,761 and 2,980,305 shares issued
   in fiscal years 2002 and 2001, respectively                                 32,158                        29,803
Additional paid-in capital                                                 71,387,794                    71,455,401
Treasury stock, at cost, 779,952 and 766,802 shares
   in fiscal years 2002 and 2001, respectively                             (7,085,940)                   (7,038,638)
Accumulated deficit                                                       (42,028,563)                  (39,202,863)
Notes and interest receivable from shareholder and officer                   (311,604)                   (2,881,624)
Accumulated other comprehensive (loss) income                                (140,404)                      241,334
                                                         -----------------------------     -------------------------
  Total shareholders' equity                                               21,853,441                    22,603,413
                                                         -----------------------------     -------------------------
  Total liabilities and shareholders' equity             $                103,422,624      $            102,558,626
                                                         =============================     =========================
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       24
<PAGE>


                      E COM VENTURES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                      FOR THE FISCAL YEARS ENDED
                                                     -------------------------------------------------------------
                                                     FEBRUARY 1, 2003     FEBRUARY 2, 2002      FEBRUARY 3, 2001
                                                     ------------------   ------------------   -------------------

<S>                                                  <C>                  <C>                  <C>
Net sales                                            $     201,513,897    $     193,351,611    $      206,569,581
Cost of goods sold                                         116,919,385          113,116,861           123,135,117
                                                     ------------------   ------------------   -------------------
Gross profit                                                84,594,512           80,234,750            83,434,464
                                                     ------------------   ------------------   -------------------

Operating expenses:
  Selling, general and administrative expenses              76,177,549           72,972,938            79,938,537
  Provision for impairment of receivable
      from an affiliate                                      1,961,355                    -                     -
  Provision (recovery) for impairment of
      assets and store closings                                663,391              727,001              (505,587)
  Depreciation and amortization                              6,024,400            6,824,861             5,818,964
                                                     ------------------   ------------------   -------------------
    Total operating expenses                                84,826,695           80,524,800            85,251,914
                                                     ------------------   ------------------   -------------------

Loss from operations                                          (232,183)            (290,050)           (1,817,450)
                                                     ------------------   ------------------   -------------------

Other income (expense):
  Interest expense:
    Affiliates                                                 (43,049)            (102,269)             (308,545)
    Other                                                   (2,029,290)          (3,293,929)           (8,230,910)
                                                     ------------------   ------------------   -------------------
                                                            (2,072,339)          (3,396,198)           (8,539,455)
                                                     ------------------   ------------------   -------------------
  Interest income:
    Affiliates                                                 173,526              272,944               287,649
    Other                                                       16,176               28,065                73,240
                                                     ------------------   ------------------   -------------------
                                                               189,702              301,009               360,889
                                                     ------------------   ------------------   -------------------

  Share of loss of partially-owned affiliate                         -                    -            (1,388,248)
  Gain on sale of affiliate's common stock                           -                    -             9,998,454
  Realized loss on investments                                (710,880)                   -            (4,819,441)
  Miscellaneous income (expense), net                                -              (17,716)               84,960
                                                     ------------------   ------------------   -------------------
    Total other income (expense)                              (710,880)             (17,716)           (4,302,841)
                                                     ------------------   ------------------   -------------------

Loss before income taxes                                    (2,825,700)          (3,402,955)           (6,120,291)
Benefit for income taxes                                             -              211,298                     -
                                                     ------------------   ------------------   -------------------
    Net loss                                         $      (2,825,700)   $      (3,191,657)   $       (6,120,291)
                                                     ==================   ==================   ===================

Basic loss per common share                          $           (1.12)   $           (1.32)   $            (2.59)
                                                     ==================   ==================   ===================
Diluted loss per common share                        $           (1.12)   $           (1.32)   $            (2.59)
                                                     ==================   ==================   ===================

Weighted average number of shares
  outstanding:
  Basic                                                      2,528,326            2,420,467             2,360,456
                                                     ==================   ==================   ===================
  Diluted                                                    2,528,326            2,420,467             2,360,456
                                                     ==================   ==================   ===================
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       25
<PAGE>

<TABLE>
<CAPTION>

                      E COM VENTURES, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
 FOR THE FISCAL YEARS ENDED FEBRUARY 1, 2003, FEBRUARY 2, 2002 AND FEBRUARY 3, 2001


                                                                                             Accumulated
                                    Common Stock        Additional      Treasury Stock          Other
                                  --------------------   Paid-In    ----------------------  Comprehensive    Accumulated
                                    Shares    Amount     Capital     Shares      Amount     Income (Loss)      Deficit
                                  ---------- --------- -----------  --------  ------------  -------------   -------------
<S>                                <C>        <C>      <C>           <C>      <C>           <C>             <C>
Balance at January 29, 2000        2,320,597  $23,205  $65,509,755   203,912  $(3,419,957)   $          -   $(29,890,915)

Components of comprehensive loss:
  Net loss                                 -        -            -         -            -               -     (6,120,291)
  Unrealized loss on investments           -        -            -         -            -        (150,095)             -
  Total comprehensive loss                 -        -            -         -            -               -              -

Exercise of stock options             46,056      461      148,502         -            -               -              -
Purchase of treasury stock                 -        -            -   204,720   (2,223,420)              -              -
Conversion of debt and
  accrued interest to common
   stock                             563,917    5,640    3,719,252         -            -               -              -
Net change in notes
  and interest receivable from
  shareholder and officer                  -        -            -         -            -               -              -
Beneficial conversion
   feature of notes payable                -        -    2,636,764         -            -               -              -
                                  ---------- --------- -----------  --------  ------------  -------------   -------------


Balance at February 3, 2001        2,930,570   29,306   72,014,273   408,632   (5,643,377)       (150,095)   (36,011,206)

Components of comprehensive loss:
  Net loss                                 -        -            -         -            -               -     (3,191,657)
  Unrealized gain
    on investments                         -        -            -         -            -         391,429              -
  Total comprehensive loss                 -        -            -         -            -               -              -

Exercise of stock options              4,750       48        9,452         -            -               -              -
Purchase of treasury stock                 -        -            -   358,170   (1,395,261)              -              -
Conversion of debt and
  accrued interest to
  common stock                        44,985      449      115,009         -            -               -              -
Net change in notes and
  interest receivable from
  shareholder and officer                  -        -            -         -            -               -              -
Premium repayment of
  convertible notes payable                -        -     (683,333)        -            -               -              -
                                  ---------- --------- -----------  --------  ------------  -------------   -------------


Balance at February 2, 2002        2,980,305   29,803   71,455,401   766,802   (7,038,638)        241,334    (39,202,863)

Components of comprehensive loss:
  Net loss                                 -        -            -         -            -               -     (2,825,700)
  Unrealized loss
    on investments                         -        -            -         -            -        (381,738)             -
  Total comprehensive loss                 -        -            -         -            -               -              -

Exercise of stock options             59,808      598      112,949         -            -               -              -
Purchase of treasury stock                 -        -            -    13,150      (47,302)              -              -
Conversion of debt and
  accrued interest to
  common stock                       175,648    1,757      515,277         -            -               -              -
Net change in notes and
  interest receivable from
  shareholder and officer                  -        -            -         -            -               -              -
Premium repayment of
  convertible notes payable                -        -     (695,833)        -            -               -              -
                                  ---------- --------- -----------  --------  ------------  -------------   -------------

Balance at February 1, 2003        3,215,761  $32,158  $71,387,794   779,952  $(7,085,940)  $    (140,404)  $(42,028,563)
                                  ========== ========= ===========  ========  ============  =============   =============

</TABLE>

<TABLE>
<CAPTION>

                                     Notes and
                                Interest Receivable
                                 From Shareholders
                                    and Officers         Total
                                 ----------------- --------------
<S>                                <C>             <C>
Balance at January 29, 2000        $  (1,532,649)  $   30,689,439
                                                   --------------
Components of comprehensive loss:
  Net loss                                     -      (6,120,291)
  Unrealized loss on investments               -        (150,095)
                                                   --------------
  Total comprehensive loss                     -      (6,270,386)
                                                   --------------
Exercise of stock options                      -         148,963
Purchase of treasury stock                     -      (2,223,420)
Conversion of debt and
  accrued interest to common
   stock                                       -       3,724,892
Net change in notes
  and interest receivable from
  shareholder and officer             (2,311,629)     (2,311,629)
Beneficial conversion
   feature of notes payable                    -       2,636,764
                                 ---------------   --------------

Balance at February 3, 2001           (3,844,278)     26,394,623
                                                   --------------
Components of comprehensive loss:
  Net loss                                     -      (3,191,657)
  Unrealized gain
    on investments                             -         391,429
                                                   --------------
  Total comprehensive loss                     -      (2,800,228)
                                                   --------------

Exercise of stock options                      -           9,500
Purchase of treasury stock                     -      (1,395,261)
Conversion of debt and
  accrued interest to
  common stock                                 -         115,458
Net change in notes and
  interest receivable from
  shareholder and officer                962,654         962,654
Premium repayment of
  convertible notes payable                    -        (683,333)
                                                   --------------

Balance at February 2, 2002           (2,881,624)     22,603,413
                                 ---------------   --------------

Components of comprehensive loss:
  Net loss                                     -      (2,825,700)
  Unrealized loss
    on investments                             -        (381,738)
                                                   --------------
  Total comprehensive loss                     -      (3,207,438)
                                                   --------------

Exercise of stock options                      -         113,547
Purchase of treasury stock                     -         (47,302)
Conversion of debt and
  accrued interest to
  common stock                                 -         517,034
Net change in notes and
  interest receivable from
  shareholder and officer              2,570,020       2,570,020
Premium repayment of
  convertible notes payable                    -        (695,833)
                                 ---------------   --------------
Balance at February 1, 2003      $      (311,604)  $  21,853,441
                                 ===============   ==============

</TABLE>


 References to share amounts in the schedule above reflect the effect of the one
                          for four reverse stock-split.
          See accompanying notes to consolidated financial statements.

                                       26


<PAGE>
                      E COM VENTURES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    FOR THE FISCAL YEARS ENDED
                                                               ----------------------------------------------------------------
                                                                February 1, 2003      February 2, 2002      February 3, 2001
                                                               --------------------  --------------------  --------------------

<S>                                                                   <C>                   <C>                   <C>
Cash flows from operating activities:
Net loss                                                              $ (2,825,700)         $ (3,191,657)         $ (6,120,291)
Adjustments to reconcile net loss to net cash
    provided by operating activities:
  Provision for doubtful accounts                                                -                55,000                55,000
  Provision for impairment of receivable from affiliate                  1,961,355                     -                     -
  Gain on sale of affiliate's common stock                                       -                     -            (9,998,454)
  Provision (recovery) for impairment of assets and store closings         663,391               727,001              (505,587)
  Depreciation and amortization                                          6,024,400             6,824,861             5,818,964
  Share of loss of partially-owned affiliate                                     -                     -             1,388,248
  Realized loss on investments                                             710,880                     -             3,727,022
  Beneficial conversion feature of convertible notes payable                     -                     -             2,636,764
  Change in operating assets and liabilities:
    Trade receivables                                                     (109,215)            1,216,166              (731,026)
    Advances to suppliers                                                1,611,590             2,510,581            (3,381,647)
    Inventories                                                           (329,593)           (5,885,858)            8,656,891
    Prepaid expenses and other current assets                              166,763             1,515,592            (1,981,881)
    Due from affiliate                                                  (1,150,186)             (659,623)                    -
    Other assets                                                           216,091               278,757               507,663
    Accounts payable, non-affiliate                                     (4,593,171)            8,471,392            (3,728,334)
    Accounts payable, affiliate                                          7,138,159             3,438,808             7,062,496
    Accrued expenses and other liabilities                                (788,111)             (933,988)             (687,614)
    Income taxes payable                                                         -               (72,707)             (150,391)
                                                               --------------------  --------------------  --------------------
Net cash provided by operating activities                                8,696,653            14,294,325             2,567,823
                                                               --------------------  --------------------  --------------------

Cash flows from investing activities:
  Additions to property and equipment                                   (1,893,664)           (1,614,636)           (4,298,081)
  Acquisition, net of cash acquired                                              -                     -            (1,534,769)
  (Purchases) proceeds of investments available for sale                    10,515                     -            (1,497,027)
                                                               --------------------  --------------------  --------------------
Net cash used in investing activities                                   (1,883,149)           (1,614,636)           (7,329,877)
                                                               --------------------  --------------------  --------------------

Cash flows from financing activities:
  Net borrowings and (repayments) under bank line
    of credit and notes payable                                            892,950            (3,954,816)              691,439
  Principal payments under capital lease obligations                    (1,771,037)           (1,479,795)             (853,735)
  Net advances to shareholders and officers                               (400,000)             (171,000)           (2,311,629)
  Proceeds from note and interest receivable, shareholder and officer    2,970,020               692,702               779,594
  Repayments under subordinated debt                                    (3,000,000)           (2,900,000)           (6,500,000)
  Issuance of convertible notes payable                                          -                     -             9,000,000
  Repayments of convertible notes payable                               (4,207,824)           (4,100,000)             (245,000)
  Proceeds from sale of affiliate's common stock                                 -                     -             6,500,000
  Proceeds from exercise of stock options                                  113,547                 9,500               148,963
  Purchases of treasury stock                                              (47,302)           (1,395,261)           (2,223,420)
                                                               --------------------  --------------------  --------------------
    Net cash (used in ) provided by financing activities                (5,449,646)          (13,298,670)            4,986,212
                                                               --------------------  --------------------  --------------------
(Decrease) increase in cash and cash equivalents                         1,363,858              (618,981)              224,158
Cash and cash equivalents at beginning of period                         1,600,787             2,219,768             1,995,610
                                                               --------------------  --------------------  --------------------
Cash and cash equivalents at end of period                            $  2,964,645          $  1,600,787          $  2,219,768
                                                               ====================  ====================  ====================

</TABLE>

          See accompanying notes to consolidated financial statements.


                                       27

<PAGE>


                      E COM VENTURES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE FISCAL YEARS ENDED FEBRUARY 1, 2003,
                     FEBRUARY 2, 2002 AND FEBRUARY 3, 2001


NOTE 1 - NATURE OF BUSINESS

       E  Com  Ventures,  Inc.,  a  Florida  Corporation  (the  "Company"),   is
structured  as  a  holding  company  that  owns  and  operates  Perfumania  Inc.
("Perfumania"),  a Florida  Corporation,  a specialty retailer and wholesaler of
fragrances and related products, and perfumania.com,  inc., an Internet retailer
of fragrance and other specialty items.

       Perfumania  is  incorporated  in  Florida  and  operates  under  the name
Perfumania.   Perfumania's   retail  stores  are  located  in  regional   malls,
manufacturers'  outlet malls,  airports and on a  stand-alone  basis in suburban
strip shopping centers.  The number of retail stores in operation at February 1,
2003,   February  2,  2002,  and  February  3,  2001  were  238,  247  and  257,
respectively.


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

       Significant  accounting  principles  and practices used by the Company in
the preparation of the  accompanying  consolidated  financial  statements are as
follows:

FISCAL YEAR END

       The  Company's  fiscal  year ends the  Saturday  closest to January 31 to
enable the  Company's  operations  to be reported in a manner which more closely
coincides with general retail  reporting  practices and the financial  reporting
needs of the Company. In the accompanying notes, fiscal year 2002, 2001 and 2000
refer to the years  ended  February 1, 2003,  February  2, 2002 and  February 3,
2001, respectively.  The fiscal year ended February 3, 2001 included 53 weeks as
compared to 52 weeks for the fiscal years ended February 1, 2003 and February 2,
2002.

MANAGEMENT ESTIMATES

       The  preparation of financial  statements in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported 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.  The most  significant  estimates made by
management in the accompanying  consolidated  financial statements relate to the
allowance for doubtful accounts,  inventory  reserves,  self-insured health care
reserves,  long-lived  asset  impairments and estimated useful lives of property
and equipment. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

       The consolidated financial statements include the accounts of the Company
and its wholly owned  subsidiaries.  All significant  intercompany  balances and
transactions  have been eliminated in consolidation.  The Company's  accumulated
deficit as of February  1, 2003 of  approximately  $42.0  million  includes  the
Company's  share  of  the  cumulative  net  loss  of  perfumania.com,   inc.  of
approximately $1.4 million prior to May 2000 when perfumania.com became a wholly
owned subsidiary of the Company (see Note 11).

REVENUE RECOGNITION

       Revenue from retail sales is recorded,  net of  discounts,  upon customer
purchase.  Revenue from  wholesale  transactions  is recorded  upon  shipment of
inventory.




CASH AND CASH EQUIVALENTS


                                       28
<PAGE>

       The Company  considers all highly liquid  investments  purchased  with an
original maturity of three months or less to be cash equivalents.

ADVANCES TO SUPPLIERS

       Advances  to  suppliers  represent  prepayments  to  vendors  on  pending
inventory purchase orders.

INVENTORIES

       Inventories,  consisting  of finished  goods,  are stated at the lower of
cost or market, cost being determined on a weighted average cost basis. The cost
of  inventory   includes  product  cost  and  freight  charges.   Provision  for
potentially  slow moving or damaged  inventory is recorded based on management's
analysis of  inventory  levels,  future  sales  forecasts  and through  specific
identification  of obsolete or damaged  merchandise.  The Company's  reserve for
inventory was approximately $1.2 million and $1.7 million as of February 1, 2003
and February 2, 2002, respectively.

PROPERTY AND EQUIPMENT

       Property and equipment is carried at cost, less accumulated  depreciation
and amortization. Depreciation is calculated using the straight-line method over
the estimated  useful lives of the related assets.  Leasehold  improvements  are
amortized over the shorter of the term of the lease including  probable  renewal
periods, or the estimated useful lives of the improvements, generally ten years.
Costs of major additions and  improvements  are capitalized and expenditures for
maintenance  and  repairs  which do not extend the useful  life of the asset are
expensed when incurred.  Gains or losses  arising from sales or retirements  are
included in income currently.

GOODWILL AND OTHER INTANGIBLE ASSETS

       Goodwill and other intangible  assets represent the excess purchase price
paid over net assets of businesses  acquired and identifiable  intangible assets
resulting from the  application of the purchase  method of accounting  (see Note
3). As a result of a new accounting  rule adopted in fiscal year 2002,  goodwill
will no longer be  amortized  but will be tested  annually for  impairment  (see
Recent  Accounting  Pronouncements).  For each year  through  fiscal  year 2001,
goodwill was  amortized on a  straight-line  basis over five years.  Accumulated
amortization for goodwill and other intangible assets as of February 1, 2003 and
February 2, 2002 was approximately $1.6 million and $1.3 million, respectively.

INCOME TAXES

       Income tax  expense is based  principally  on pre-tax  financial  income.
Deferred tax assets and liabilities  are recognized for the differences  between
the  financial  reporting  carrying  values  and the tax  bases  of  assets  and
liabilities  and are measured  using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. A valuation allowance is
recognized to reduce net deferred tax assets to amounts that management believes
are expected to be realized.

BASIC AND DILUTED INCOME (LOSS) PER SHARE

       Basic  income  (loss) per common  share is computed  by  dividing  income
(loss)  attributable to common  shareholders  by the weighted  average number of
common shares  outstanding  during the period.  Diluted income (loss) per common
share includes,  in periods in which they have a dilutive  effect,  the dilutive
effect of those common stock  equivalents  where the average market price of the
common shares  exceeds the exercise  prices for the  respective  years,  and the
dilutive effect of those  convertible  notes which are  convertible  into common
stock.  For all periods  presented in the  accompanying  consolidated  financial
statements  of  operations,   incremental  shares  attributed  to  common  stock
equivalents and convertible notes were not included because the results would be
anti-dilutive.






                                       29
<PAGE>

         Basic and diluted loss per share are computed as follows:

<TABLE>
<CAPTION>
                                                              FISCAL YEAR
                                            ------------------------------------------------
                                                2002              2001            2000
                                            --------------   ---------------  --------------
<S>                                         <C>              <C>              <C>
Numerator:
  Net loss:                                 $  (2,825,700)   $   (3,191,657)  $  (6,120,291)
                                            ==============   ===============  ==============

Denominator:
  Denominator for basic loss per share          2,528,326         2,420,467       2,360,456

Effect of dilutive securities:
  Options to purchase common
    stock and convertible notes                         -                 -               -
                                            --------------   ---------------  --------------
  Denominator for dilutive  loss per share      2,528,326         2,420,467       2,360,456
                                            ==============   ===============  ==============

Antidilutive securities not included
  in the diluted loss per share computation:
  Options to purchase common stock                666,501           606,594         570,115
  Exercise price                            $1.64 - $21.52   $1.64 - $21.52   $1.64 - $21.52

</TABLE>


FAIR VALUE OF FINANCIAL INSTRUMENTS

       Statement of Financial  Accounting  Standards No. 107 "Disclosures  about
Fair Value of Financial  Instruments"  ("SFAS 107"),  requires disclosure of the
fair value of financial  instruments  held by the Company.  SFAS 107 defines the
fair value of a financial instrument as the amount at which the instrument could
be exchanged in a current  transaction  between willing  parties.  The following
methods and assumptions were used to estimate fair value:

-      The carrying amounts of cash and cash  equivalents,  accounts  receivable
       and  accounts  payable  approximate  fair  value due to their  short-term
       nature;

-      The fair  value of  investments  are based on quoted  market  prices,  if
       available, and;

-      The fair value of the Company's  bank line of credit,  convertible  notes
       payable,  obligations under capital leases and loans payable are based on
       current interest rates and repayment terms of the individual notes.

ASSET IMPAIRMENT

       The  Company  reviews   long-lived  assets  and  makes  a  provision  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
projected cash flows of related activities may not provide for cost recovery. An
impairment loss is generally  recorded when the net book value of assets exceeds
projected  undiscounted  future cash flows.  The  impairment  loss is determined
based on the  difference  between  the net book  value and the fair value of the
assets. The estimated fair value is based on anticipated  discounted future cash
flows.  Any  impairment  is charged to  operations  in the period in which it is
identified.

STOCK BASED COMPENSATION

       The Company  accounts for  stock-based  compensation  using the intrinsic
value  method  prescribed  in  Accounting   Principles  Board  Opinion  No.  25,
"Accounting  for Stock Issued to Employees"  ("APB 25"),  and provides  proforma
disclosure  of net income  and  earnings  per share as if the fair  value  based
method prescribed by Statement of Financial  Accounting Standards No. 123 ("SFAS
123") had been applied in measuring  compensation expense for options granted to
employees and directors in fiscal years 2002,  2001 and 2000. In accordance with
APB 25,  compensation  cost for stock options is measured as the excess, if any,
of the quoted market price of the Company's  stock at the date of the grant over
the amount an employee  or  director  must pay to acquire the stock (See Note 11
for proforma disclosure).


                                       30
<PAGE>

UNREALIZED GAIN (LOSS) ON INVESTMENTS

       Equity  securities  classified as available for sale are adjusted to fair
market value as of the balance  sheet date based on quoted  market  prices.  The
related   unrealized   gain  (loss)  on   investments   is  reflected  in  other
comprehensive income (loss) and accumulated other comprehensive income (loss) on
the consolidated  statements of changes in shareholders' equity and consolidated
balance sheets, respectively.  Realized losses on investments resulting from the
sale or  other-than-temporary  declines  in fair  market  values  of  securities
classified as available for sale are included in the results of operations.

PRE-OPENING EXPENSES

       Pre-opening  expenses  related to opening  new  stores  are  expensed  as
incurred.

SHIPPING AND HANDLING FEES AND COSTS

       Income  generated  from  shipping  and  handling  fees is  classified  as
revenues.  The Company  classifies the costs related to shipping and handling as
cost of goods sold.

ADVERTISING COSTS

       Advertising  costs are  charged to  expense  when  incurred.  Cooperative
advertising  of  approximately  $120,000 has been  received  from vendors and is
recorded as an offset to advertising expense.

RECLASSIFICATION

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

RECENT ACCOUNTING PRONOUNCEMENTS

       In July 2001, the Financial  Accounting  Standards  Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other
Intangible Assets.  This Statement affected the Company's  treatment of goodwill
and other  intangible  assets at the start of fiscal  year 2002.  The  Statement
requires that goodwill existing at the date of adoption be reviewed for possible
impairment and that  impairment  tests be periodically  repeated,  with impaired
assets  written  down  to  fair  value.  Additionally,   existing  goodwill  and
intangible   assets  must  be  assessed  and  classified   consistent  with  the
Statements' criteria.  Amortization of goodwill and other intangible assets with
indefinite  useful lives will cease.  Intangible  assets with  estimated  useful
lives will continue to be amortized  over those periods.  Goodwill  amortization
will no longer be recorded. The adoption of SFAS No. 142 in fiscal year 2002 did
not have a significant impact on the Company's  financial position or results of
operations.

       In  accordance  with SFAS No.  142,  the  Company  conducted  an internal
valuation based on discounted  future cash flows of  perfumania.com  (see Note 3
for further discussion).  Based on this valuation, no significant impairment was
identified.  SFAS No. 142 does not permit the  restatement of previously  issued
financial statements,  but does require the disclosure of prior results adjusted
to exclude amortization expense related to goodwill and intangible assets, which
are no longer being amortized.  On an as adjusted basis,  basic and diluted loss
per share for fiscal years 2002,  2001 and 2000,  respectively,  are adjusted to
exclude amounts no longer being amortized under the provisions of SFAS No. 142.


                                       31
<PAGE>

<TABLE>
<CAPTION>
                                                           FISCAL YEARS
                                            ------------------------------------------------
                                                2002              2001            2000
                                            --------------   ---------------  --------------

<S>                                         <C>              <C>              <C>
Net loss as reported                        $  (2,825,700)   $   (3,191,657)  $  (6,120,291)
Goodwill amortization                                   -           573,051         436,236
                                            --------------   ---------------  --------------
  Adjusted net loss                         $  (2,825,700)   $   (2,618,606)  $  (5,684,055)
                                            ==============   ===============  ==============

Basic loss per share
  Reported basic loss per share             $       (1.12)   $        (1.32)  $       (2.59)
  Goodwill amortization                                 -              0.24            0.18
                                            --------------   ---------------  --------------
  Adjusted basic loss per share             $       (1.12)   $        (1.08)  $       (2.41)
                                            ==============   ===============  ==============

Diluted loss per share
  Reported diluted loss per share           $       (1.12)   $        (1.32)  $       (2.59)
  Goodwill amortization                                 -              0.24            0.18
                                            --------------   ---------------  --------------
  Adjusted diluted loss per share           $       (1.12)   $        (1.08)  $       (2.41)
                                            ==============   ===============  ==============
</TABLE>


       In July  2001,  the  FASB  issued  SFAS No.  143,  Accounting  For  Asset
Retirement  Obligations.  This Statement  requires  capitalizing  any retirement
costs as part of the total cost of the related long-lived asset and subsequently
allocating  the total expense to future  periods using a systematic and rational
method.  Adoption of this Statement is required for fiscal years beginning after
June 15, 2002. We do not expect a significant impact on the Company's  financial
position and results of operations from the adoption of this Statement.

       In  October  2001,  the FASB  issued  SFAS No.  144,  Accounting  For The
Impairment Or Disposal Of Long-Lived Assets. This Statement supersedes Statement
No.  121 but  retains  many of its  fundamental  provisions.  SFAS No.  144 also
supersedes the accounting and reporting  provisions of APB Opinion 30, Reporting
the Results of Operations - Reporting the Effects of a Segment of a Business and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions,  for
the disposal of a segment of a business.  Additionally,  this Statement  expands
the scope of discontinued operations to include more disposal transactions.  The
adoption of SFAS No. 144 in fiscal year 2002 did not have a  significant  impact
on the Company's financial position and results of operations.

       In  April  2002,  the  FASB  issued  SFAS  No.  145,  Rescission  of FASB
Statements  No. 4, 44 and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections.  SFAS No. 145 which all but eliminates the  presentation  in income
statements of debt  extinguishments as extraordinary items. SFAS No. 145 will be
effective  for fiscal years  beginning  after May 15, 2002.  SFAS No. 145 is not
expected to have a  significant  effect on the Company's  financial  position or
results of operations.

       In June  2002,  the  FASB  issued  SFAS No.  146,  Accounting  for  Costs
Associated with Exit or Disposal  Activities.  SFAS No. 146 addresses  financial
accounting and reporting for costs  associated with exit or disposal  activities
and  nullifies   Emerging  Issues  Task  Force  (EITF)  Issue  94-3,   Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity.  The  provisions  of the  Statement are effective for exit of disposal
activities that are initiated  after December 31, 2002,  with early  application
encouraged.  We do not expect a significant  impact on the  Company's  financial
position and results of operations from the adoption of this Statement.

       In September  2002,  the FASB Emerging  Issues Task Force issued EITF No.
02-16,  Accounting by a Reseller for Cash Consideration  Received from a Vendor.
EITF No. 02-16  addresses how a reseller of a vendor's  products  should account
for cash consideration (as that term is defined in EITF No. 01-9, Accounting for
Consideration  Given by a Vendor to a  Customer  or a Reseller  of the  Vendor's
Products) received from a vendor.  EITF 02-16 is not expected to have a material
effect on the Company's financial position and results of operation.

       In  December  2002,  the  FASB  issued  SFAS  No.  148,   Accounting  for
Stock-Based  Compensation  -  Transition  and  Disclosure,  an amendment of FASB
Statement No. 123. This Statement amends FASB Statement No. 123,  Accounting for
Stock-Based  Compensation,  to provide  alternative  methods of transition for a

                                       32
<PAGE>

voluntary change to the fair value method of accounting for stock-based employee
compensation.  In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require  prominent  disclosures  in both annual and interim
financial statements.  Certain of the disclosure  modifications are required for
fiscal  years  ending  after  December 15, 2002 and are included in the notes to
these consolidated financial statements.


NOTE 3 - ACQUISITION

       In August 2000,  Perfumania  purchased six fragrance retail locations for
approximately  $2.2  million.  The purchase  price was offset  against  advances
previously  paid  to the  seller  to  source  merchandise  for  Perfumania.  The
acquisition was accounted for as an asset purchase and accordingly,  the results
of  operations  are  included  in  the  Company's  consolidated   statements  of
operations  from the date of  acquisition.  The cost of the acquisition has been
allocated to the assets acquired based on their relative fair values at the date
of acquisition as determined by management with the assistance of an independent
valuation  consultant.  The excess of the purchase  price over the fair value of
net assets acquired of approximately  $1.1 million was recorded as an intangible
asset and is  currently  being  amortized  over 5 years.  The  retail  locations
acquired  were not material to the Company's  results of  operations  for fiscal
year 2000; therefore no proforma results are presented.

       In addition,  in May 2000, the Company  acquired 100% of the  outstanding
common stock of perfumania.com  which resulted in goodwill of approximately $2.9
million. See Note 11 for further discussion.


NOTE 4 - STATEMENTS OF CASH FLOWS

Supplemental disclosures of non-cash investing and financing activities:

<TABLE>
<CAPTION>
                                                                     FISCAL YEAR ENDED
                                             -------------------------------------------------------------------
          NON-CASH TRANSACTIONS                February 1, 2003       February 2, 2002       February 3, 2001
------------------------------------------   ---------------------  ---------------------  ---------------------
<S>                                          <C>                    <C>                    <C>
Equipment and building under capital leases  $          7,764,203   $             68,201   $          3,980,471
Unrealized gain (loss) on investments                    (381,738)               391,429               (150,095)
Subordinated debt issued to affiliate                   3,000,000              3,000,000              3,000,000
Change in investment as a result of
  transfer of shares in an affiliate                            -                440,952                      -
Conversion of debt and accrued interest
  payable in exchange for common stock                    517,034                115,458              3,724,892

Cash paid during the period for:
  Interest                                   $          2,196,062    $         3,466,420   $          6,116,313
  Income taxes                               $                  -    $           150,000   $            150,391
</TABLE>






                                       33
<PAGE>

NOTE 5 - PROPERTY AND EQUIPMENT

       Property and equipment includes the following:

<TABLE>
<CAPTION>

                                                                                                  Estimated Useful Lives
                                               February 1, 2003       February 2, 2002                (In Years)
                                             ---------------------  ---------------------     --------------------------------

<S>                                          <C>                    <C>                                   <C>
Furniture, fixtures and equipment            $         21,017,998   $         21,274,751                  5-7
Leasehold improvements                                 21,758,680             21,591,254                  10
Equipment under capital leases                          6,774,897              6,374,908      shorter of 5 years or lease term
Building under capital lease                            7,310,790                      -                   15
                                             ---------------------  ---------------------
                                                       56,862,365             49,240,913
Less:
  Accumulated depreciation and amortization           (32,305,674)           (27,891,946)
                                             ---------------------  ---------------------
                                             $         24,556,691   $         21,348,967
                                             =====================  =====================
</TABLE>

       See Note 13 for further discussion of capital leases.


       Depreciation  and  amortization  expense for fiscal years 2002, 2001, and
2000  was  $6,024,400,  $6,019,720  and  $5,229,185,  respectively.  Accumulated
depreciation for equipment under capital leases was $4,208,728 and $2,901,101 as
of February 1, 2003 and February 2, 2002, respectively.


NOTE 6 - RELATED PARTY TRANSACTIONS

       Notes  receivable  from a  shareholder  and  officer  were  $311,604  and
$2,881,624  as of  February  1, 2003 and  February  2, 2002,  respectively.  The
remaining  notes are unsecured,  mature in five years and bear interest at prime
plus 1% per annum. Principal and interest are payable in full at maturity. Total
interest  income  recognized  during  fiscal  years  2002,  2001,  and  2000 was
approximately $174,000,  $264,000 and $236,000,  respectively.  Accrued interest
receivable was  approximately  $12,000 at February 1, 2003. There was no accrued
interest receivable as of February 2, 2002.

       During fiscal year 2000, we purchased  314,000  shares of common stock of
Take to Auction.Com,  Inc. ("TTA"),  an Internet auction site, for approximately
$2.5 million.  Our Chairman of the Board and Chief Executive Officer Ilia Lekach
was also the  Chairman of the Board and Chief  Executive  Officer of TTA at that
time. In June 2000,  we acquired  approximately  139,000  shares of TTA's common
stock upon conversion of a $1.0 million convertible promissory note receivable.

       In January 2001, the Company  received 250,000 shares of TTA common stock
as partial  payment on a loan  receivable  from Ilia  Lekach.  These shares were
valued at $252,500 ($1.01 per share).

       As of February 3, 2001, the market price for TTA's common stock was below
the Company's  average cost per share of $5.38. In  consideration  of accounting
guidance  that  considers  a six to nine  month  decline  in  stock  price to be
other-than-temporary,  the  Company  valued  the  shares  at $1.01 per share and
recorded a non-cash  charge of  approximately  $3.1 million to realized  loss on
investments on the consolidated statement of operations for fiscal year 2000. As
of  November  2,  2002,  the  market  price of the  shares  was again  below the
Company's  carrying value and approximately  $700,000 was recorded as a non-cash
charge  to  realized  loss  on  investments  on the  consolidated  statement  of
operations for fiscal year 2002.

       In   September   2001,   TTA   effected   a   corporate    reorganization
("Reorganization") as a result of which TTA became a wholly-owned  subsidiary of
Nimbus Group, Inc. ("Nimbus"). As a result of the Reorganization,  the Company's
shares of TTA  common  stock  were  exchanged  for an equal  number of shares of
Nimbus common stock.  Ilia Lekach has been Chairman of the Board of Nimbus since
the Reorganization and was Interim Chief Executive Officer until March 21, 2003.

       In January 2002,  the Company  received  300,000  shares of Nimbus common
stock as partial  payment of a loan  receivable  from Ilia Lekach.  These shares
were valued at $357,000 ($1.19 per share).


                                       34
<PAGE>

       As of February 1, 2003 the Company owned  approximately  1,003,000 shares
of Nimbus common stock  representing  approximately 13% of its total outstanding
common stock.  The investment in Nimbus is shown on the Company's  balance sheet
as  investments  available  for sale in the  amount  of  approximately  $211,000
representing the market value of $0.21 per share at that date.

       Purchases of products  from Parlux  Fragrances,  Inc.  ("Parlux"),  whose
Chairman of the Board of Directors and Chief  Executive  Officer is Ilia Lekach,
amounted to  approximately  $11,613,000,  $19,598,000  and $22,149,000 in fiscal
years  2002,  2001  and  2000,  representing  approximately  10%,  17% and  20%,
respectively,  of the  Company's  total  purchases.  The amount due to Parlux on
February  1,  2003 and  February  2,  2002  was  approximately  $10,739,000  and
$14,673,000,   respectively,   of  which  both   amounts   included  a  $100,000
subordinated  interest  bearing  secured note payable.  Accounts  payable due to
Parlux are non-interest bearing.

       On September  30, 2002 and June 30, 2001,  Perfumania  signed  $3,000,000
subordinated  note agreements with Parlux.  The notes were in consideration  for
the  reduction of  $3,000,000 in trade payable due to Parlux during fiscal years
2002 and 2001, respectively.  The notes were due on March 31, 2003 and March 31,
2002 with various periodic  principal  payments,  bore interest at prime plus 1%
and were subordinated to all bank related  indebtedness.  As of February 1, 2003
and  February  2, 2002 the  outstanding  principal  balance due on the notes was
$100,000.  The  notes  were  repaid  in full  in  April  2003  and  April  2002,
respectively.

       The  Company  purchased  approximately   $10,562,000  and  $4,491,000  of
merchandise in fiscal years 2002 and 2001, respectively, from a company owned by
Zalman Lekach,  a former director of the Company,  and a brother of Ilia Lekach.
The amount due to Zalman  Lekach's  company at February 1, 2003 and  February 2,
2002 was approximately $1,383,000 and $2,025,000, respectively, and are included
in accounts payable affiliates in the accompanying consolidated balance sheets.

       The  Company   purchased   approximately   $6,021,000   and  $170,000  of
merchandise in fiscal years 2002 and 2001,  respectively from a company owned by
another brother of Ilia Lekach. The amount due to this brother was approximately
$1,310,000 and $170,000,  respectively, at February 1, 2003 and February 2, 2002
and are included in accounts payable affiliates in the accompanying consolidated
balance sheets.

       In  December  1999,  the Company  loaned  $1,000,000  to TTA.  Due to the
uncertainty  of  collectability  of the note, the Company wrote off the note and
the related  interest  receivable  which  together  totaled  approximately  $1.0
million as of February 3, 2001. The related expense is included in the provision
for  impairment of assets and store  closings in the  accompanying  consolidated
statements  of operations  in fiscal year 1999.  The Company  converted the loan
into 138,889  shares of TTA's common stock and, as a result of TTA's  successful
initial public offering, the $1.0 million principal balance and related interest
previously expensed was reversed in the first quarter of fiscal 2000.

       In March 2000,  the Company  loaned an additional  $1,000,000 to TTA. The
note was repaid in full in June 2000. In connection  with both the December 1999
and March 2000 loans to TTA, the Company was granted  warrants (the  "Warrants")
to  purchase  a total of  200,000  shares of the  common  stock of TTA at $8 per
share.  The Warrants were exercisable in whole or in part at any time commencing
on the business day  immediately  following  the  effective  date of the initial
public offering registration  statement and expiring on the first anniversary of
the effective date of that registration statement.  The Company did not exercise
the Warrants.

       In October 2000, TTA loaned the Company $500,000.  The loan was unsecured
with  interest at the rate  charged by the  Company's  major  lender.  The loan,
including interest, was repaid in December 2000.

       In October 2000, the Company entered into a six-month  service  agreement
with TTA to provide distribution and logistics functions. This agreement, unless
otherwise  terminated,  would automatically renew for successive one-year terms.
This service  agreement  provided for order  processing,  inventory  management,
warehousing,  fulfillment and shipping of product.  The service fee was variable
based on the volume of TTA sales.  Monthly  minimum  fees  applied if  specified
volume levels were not obtained.  Total fees earned during fiscal years 2001 and
2000  were  approximately  $177,000  and  $72,000,   respectively.  The  service
agreement was terminated effective September 1, 2001.

       In September  2001, the Company  entered into a licensing  agreement with
TTA to license the Company's retail fragrance Internet Web site. Under the terms
of the agreement,  TTA pays the Company a royalty of 5% of defined product sales
for sales up to $8 million per annum,  decreasing  to 3% on sales  exceeding $11
million  per  annum.  Royalty  income  under this  agreement  for the year ended
February 1, 2002 was approximately  $88,000.  As of February 1, 2002, the amount
due from TTA was  approximately  $811,000,  and was included in prepaid expenses
and other current assets in the  accompanying  consolidated  balance sheet as of
February 1, 2002.


                                       35
<PAGE>

       During   fiscal  year  2002,   the  amount  due  from  TTA  increased  to
approximately  $2 million and a provision for  impairment of the  receivable was
recorded.  In  January  2003,  the  Company  issued a letter of  default  to TTA
regarding  the  licensing  agreement.  In February  2003,  the Company  regained
control of the Company's retail Internet website.

       In January 2001, the Company  entered into a severance  agreement with an
executive officer and incurred a charge of approximately $371,000. Additionally,
in May 2000 and July 2000, the Company  entered into severance  agreements  with
two executive officers.  Based upon the borrowing interest rate on the Company's
line of credit,  the Company  discounted the future  payments  required by these
agreements  resulting  in a charge  of  approximately  $724,000.  The  resulting
expense is  reflected  in selling,  general and  administrative  expenses in the
accompanying consolidated statements of operations for fiscal year 2000.


NOTE 7 - BANK LINE OF CREDIT AND NOTES PAYABLE

       The bank line of credit and notes payable consist of the following:

<TABLE>
<CAPTION>
                                                                                   February 1, 2003       February 2, 2002
                                                                                 ---------------------  ---------------------
<S>                                                                              <C>                    <C>
Bank line of  credit,  which is  classified  as a  current  liability,  interest
  payable monthly, expiring May 2004, secured by a pledge of substantially all
  of Perfumania's assets (see below)                                             $         32,081,831   $         30,734,662
                                                                                 =====================  =====================

Note  payable  bearing  interest  at 9.7%  payable in a monthly  installment  of
  $11,050 including interest, through March 2003,
  secured by fixtures                                                            $             31,860   $            154,836

Severances payable bearing interest at 9.5% payable in monthly installments
  ranging from $4,000-$22,000 including interest, through December 2002                             -                331,243
                                                                                 ---------------------  ---------------------
                                                                                               31,860                486,079
Less:  current portion                                                                        (31,860)              (454,219)
                                                                                 ---------------------  ---------------------
Long-term portion                                                                $                  -   $             31,860
                                                                                 =====================  =====================

</TABLE>

       Perfumania's   three-year   senior  secured  credit  facility  with  GMAC
Commercial Finance LLC ("GMAC") provides for borrowings of up to $40 million, of
which $32.1  million  was  outstanding  and $0.9  million  was  available  as of
February 1, 2003,  to support  normal  working  capital  requirements  and other
general  corporate  purposes.  Advances  under the line of credit are based on a
formula of eligible  inventories  and bears  interest at a floating rate ranging
from (a) prime  less  0.75% to prime  plus 1% or (b) LIBOR  plus  1.75% to 3.50%
depending on a financial ratio test. As of February 1, 2003, the credit facility
bore interest at 3.4%.  Borrowings  are secured by a first lien on all assets of
Perfumania  and the  assignment of a life  insurance  policy on the Chairman and
Chief Executive Officer of the Company. The credit facility contains limitations
on additional  borrowings,  capital  expenditures  and other items, and contains
various  covenants  including  maintenance of minimum net worth, and certain key
ratios,  as defined by the lender.  As of February  1, 2003,  Perfumania  was in
compliance with all financial covenants of the line.

       Pursuant  to the terms of the  credit  agreement  with  GMAC,  the credit
facility was extended from May 13, 2003 to May 13, 2004.






NOTE 8 - CONVERTIBLE NOTES PAYABLE

       In April  1999 and July  1999,  the  Company  issued an  aggregate  of $2
million Series A and $2 million Series B Convertible  Notes,  respectively.  The
Series A and Series B Notes were  convertible  into the Company's  common stock,
bore interest at 8% and the remaining  non-redeemed portion were payable in full
in April 2002 and July 2002, respectively. The conversion price was the lower of
(A) $4.35 per share for the  Series A Notes and $3.41 per share for the Series B
Notes,  subject to adjustment or (B) a floating  conversion  price determined by
multiplying  (1) the average closing bid price of the common stock for the three
trading  days  immediately  preceding  the  date of  determination,  by (2) 80%,

                                       36
<PAGE>

subject  to  adjustment.  The  conversion  price  may be  adjusted  pursuant  to
antidilution  provisions  in the  convertible  note.  In April 2002 and December
2002, the Company repaid the Series A and Series B debt, respectively.

       On March 9, 2000 and March 27, 2000,  the Company  issued an aggregate of
$4 million of Series C Convertible  Notes and $5 million of Series D Convertible
Notes, respectively.  The notes are convertible into the Company's common stock,
bear interest at 8% and were payable in full in March 2003. The conversion price
is the lower of (A) $9.58 per share for the Series C and $7.76 for the Series D,
subject  to  adjustment  or  (B)  a  floating  conversion  price  determined  by
multiplying  (1) the average closing bid price of the common stock for the three
trading  days  immediately  preceding  the  date of  determination,  by (2) 80%,
subject  to  adjustment.  The  conversion  price  may be  adjusted  pursuant  to
antidilution provisions in the convertible note.

       The holders of all the  Convertible  Notes are restricted from converting
to the extent that the holder owns more than 9.9% of the  Company's  outstanding
common stock.

       In February  2001,  the Company  entered into a  Convertible  Note Option
Repurchase  Agreement  (the  "Agreement")  with  the  holders  of the  Company's
outstanding Series A, B, C, and D Convertible Notes. The Agreement provided that
the Company had the monthly  option to repurchase the  outstanding  $8.8 million
convertible  notes over an eleven month period  beginning  February  2001,  at a
price equal to the unpaid principal  balance plus a 20% premium.  The portion of
the notes  redeemable  in each of the eleven  months  varied as per a  specified
redemption schedule. In the event that the Company exercised its monthly option,
the note holders  were  restricted  from  converting  any part of the  remaining
outstanding  and  unpaid  principal  balance  of such  holder's  notes  into the
Company's common stock. During fiscal year 2001, the Company repaid $4.1 million
to the note  holders.  The premium paid of  approximately  $0.7 million upon the
repurchase of the  convertible  notes has been  reflected in additional  paid in
capital.

       In February  2002, we entered into a Convertible  Note Option  Repurchase
Agreement (the  "Agreement")  with certain holders of the Company's  outstanding
Series C and D Convertible  Notes.  The Agreement  provides that the Company had
the monthly option to repurchase the approximate $4.9 million  outstanding notes
over an eleven month period  beginning  February  2002,  at a price equal to the
unpaid principal balance plus a 20% premium. The portion of the notes redeemable
in each of the eleven months varies as per a specified redemption  schedule.  In
the event that the Company  exercises its monthly  option,  the note holders are
restricted  from  converting  any part of the remaining  outstanding  and unpaid
principal balance of such holder's notes into the Company's common stock. During
fiscal  year 2002,  the  Company  repaid  $4.2  million to the note  holders and
approximately  $0.5 million of Series A and B  Convertible  Notes  principal and
interest were  converted  into common stock.  The premium paid of  approximately
$0.7 million upon the repurchase of the convertible  notes has been reflected in
additional paid in capital.

       In December 2002,  the Company  entered into an Amendment to the February
2002 Convertible Note Option  Repurchase  Agreement.  The Amendment  provides an
extension  of the  maturity  date of the  Series  C and D  Convertible  Notes to
September 15, 2003 and a monthly  option to repurchase  the  approximately  $1.2
million in Notes over the extended maturity date.

       In accordance with accounting  literature,  when debt is convertible at a
discount from the then current common stock market price, the discounted  amount
represents an incremental  yield, or a "beneficial  conversion  feature",  which
should be recognized as a return to the debt holders.  Based on the market price
of the Company's common stock at the date of issuance, our Series C and Series D
Notes had beneficial  conversion features of approximately $1.2 million and $1.4
million, respectively, at such point in time which represented a non-cash charge
that is included in interest expense on the accompanying consolidated statements
of operations in fiscal year 2000.




NOTE 9 - IMPAIRMENT OF ASSETS

       Based on a review of the Company's  retail store  locations with negative
cash flows, the Company recognized  non-cash  impairment charges relating to its
retail  operation of approximately  $0.7 million,  $0.7 million and $0.5 million
during  fiscal  years 2002,  2001 and 2000,  respectively.  These  charges  were
determined  based on the difference  between the carrying amounts of the assets,
representing primarily fixtures and leasehold improvements,  at particular store
locations  and the fair  values of the  assets on a  store-by-store  basis.  The
estimated fair values are based on anticipated future cash flows discounted at a
rate commensurate  with the risk involved.  These impairment losses are included

                                       37
<PAGE>

in  provision  (recovery)  for  impairment  of assets and store  closings in the
accompanying consolidated statements of operations.


NOTE 10 - INCOME TAXES

       The benefit for income taxes is comprised of the following amounts:

                                       FISCAL YEAR ENDED
                    ---------------------------------------------------------
                    February 1, 2003    February 2, 2002    February 3, 2001
                    ------------------  ------------------  -----------------

Current:
  Federal           $               -   $         211,298   $              -
  State                             -                   -                  -
                    ------------------  ------------------  -----------------
                                    -             211,298                  -
                    ------------------  ------------------  -----------------

Deferred:
  Federal                           -                   -                  -
  State                             -                   -                  -
                    ------------------  ------------------  -----------------
                                    -                   -                  -
                    ------------------  ------------------  -----------------

Total tax
  benefit           $               -   $         211,298   $              -
                    ==================  ==================  =================



       The  fiscal  year 2001 tax  benefit is  primarily  due to a change in the
Federal tax law.


       The income tax benefit  differs from the amount  obtained by applying the
statutory Federal income tax rate to pretax income as follows:

<TABLE>
<CAPTION>
                                                                    FISCAL YEAR ENDED
                                                ---------------------------------------------------------
                                                February 1, 2003   February 2, 2002    February 3, 2001
                                                -----------------  ------------------  ------------------

<S>                                             <C>                <C>                 <C>
Benefit at federal statutory rates              $        960,738   $       1,157,005   $       2,080,899
Non-deductible expenses                                 (283,319)         (1,326,569)         (2,221,453)
Reduction (increase) in the valuation allowance          584,247             372,561             (44,370)
Other                                                 (1,261,666)              8,301             184,924
                                                -----------------  ------------------  ------------------
Benefit for income taxes                        $              -   $         211,298   $               -
                                                =================  ==================  ==================

</TABLE>

       Net  deferred  tax  assets  reflect  the  tax  effect  of  the  following
differences between financial statement carrying amounts and tax basis of assets
and liabilities:

                                       38
<PAGE>

<TABLE>
<CAPTION>
                                                           FISCAL YEAR ENDED
                                                -------------------------------------
                                                February 1, 2003   February 2, 2002
                                                -----------------  ------------------
<S>                                             <C>                <C>
Assets:
  Net operating loss & tax credit carryforwards $      5,518,987   $       5,121,307
  Inventories                                            820,368             942,835
  Property and equipment                               2,343,692           3,389,797
  Allowance for doubtful accounts & other                110,295             120,444
  Reserves                                                83,566             188,837
  Goodwill                                               322,933             340,030
  Unrealized loss on securities                        1,508,416           1,076,905
  Other                                                   46,902             159,251
                                                -----------------  ------------------
Total deferred tax assets                             10,755,159          11,339,406
Valuation allowance                                  (10,755,159)        (11,339,406)
                                                -----------------  ------------------
Net deferred tax assets                         $              -   $               -
                                                =================  ==================
</TABLE>



       A valuation  allowance is provided for deferred tax assets as  management
believes  that the  benefit of the  deferred  tax asset may not be  realized  in
accordance with SFAS No. 109, Accounting for Income Taxes. Realization of future
tax benefits  related to the  deferred tax assets is dependent on many  factors,
including  the  Company's  ability to  generate  taxable  income  within the net
operating loss carryforward  period.  Management has considered these factors in
reaching its  conclusion as to the valuation  allowance for financial  reporting
purposes.   As  of  February  1,  2003,  the  Company  has  net  operating  loss
carryforwards of approximately $14.4 million,  which begin to expire in the year
2017.


NOTE 11 - SHAREHOLDERS' EQUITY

REVERSE STOCK SPLIT

       The Company's Board of Directors  authorized a one-for-four reverse stock
split of the Company's  outstanding  shares of common stock for  shareholders of
record as of March 20,  2002.  Accordingly,  all data shown in the  accompanying
consolidated  financial statements and notes have been retroactively adjusted to
reflect this change.

INVESTMENT IN AFFILIATE

       During   September  1999,   perfumania.com,   inc.,  the  Company's  then
wholly-owned  subsidiary,  completed an initial public offering (the "Offering")
of  its  common  stock  representing  approximately  47%  of  the  common  stock
outstanding  following  the Offering.  perfumania.com,  inc.  offered  3,500,000
shares of its common stock, which included 1,000,000 shares held by the Company.

       The  Company  recorded  a gain on its  sale of the  1,000,000  shares  of
perfumania.com,  inc. common stock in the Offering totaling  approximately  $5.9
million.  The gain  recorded  was net of issuance  costs of  approximately  $1.1
million which  included the Company's  portion of the fair value of common stock
warrants  issued by  perfumania.com,  inc.  (approximately  $0.4 million) and is
included  in gain  on  sale of  affiliate's  common  stock  in the  accompanying
consolidated statement of operations for fiscal year 2000.

       In  connection  with the public  offering,  the  Company  recorded a $9.7
million increase in additional  paid-in capital  representing its then 53% (four
million shares) interest in  perfumania.com,  inc.'s net proceeds in the initial
public  offering  under the  equity  method of  accounting.  On October 4, 1999,
Perfumania sold certain assets to perfumania.com,  inc. consisting  primarily of
an  e-commerce  greeting  card  website  for  $500,000,  of which  $450,000  was
reflected as a dividend,  since the Company's cost basis in such assets amounted
to $50,000.

       During  December  1999,   Perfumania  signed  an  Option  Agreement  (the
"Agreement") with an investment firm granting the investment firm two options to
acquire up to  2,500,000  shares of  perfumania.com,  inc.  from the Company for
consideration  in the amount of  $12,500.  The first  option  provided  that the
investment firm could purchase  2,000,000 shares for $6.00 per share on or prior
to January 15, 2000 and provided that this option was exercised, a second option
to  purchase  500,000  shares for $8.00 per share on or prior to the  earlier to
occur of December 31, 2000 or various other events, as defined in the Agreement.
The  investment  firm  exercised  the first option for the  2,000,000  shares on
January 11, 2000 and the Company realized proceeds of $12,000,000.  As a result,

                                       39
<PAGE>

the Company recognized a gain of approximately $9.1 million which is included in
the accompanying  consolidated statement of operations for fiscal year 1999 as a
gain on sale of affiliate's  common stock. The Agreement  provided that when the
first option was exercised,  nominees of the investment  firm would be appointed
to  constitute  the  majority  of the  members  of the  Board  of  Directors  of
perfumania.com,  inc.  subject to  satisfaction  of applicable SEC  regulations.
Subject to the exercise of the first option, the Agreement limited the amount of
shares of perfumania.com, inc. that could be sold by the Company, as well as the
timing of these sales.

       On February 10, 2000,  Envision  Development  Corporation ("EDC") entered
into a plan of merger with perfumania.com,  inc. The plan of merger provided for
among other  things,  the merger of EDC with  perfumania.com,  inc. As a result,
perfumania.com,  inc.  became a direct  wholly owned  subsidiary of EDC and each
share of common stock, par value $0.01 per share, of perfumania.com, inc. issued
and  outstanding  before the plan of merger was converted into and exchanged for
one share of common stock, (par value $0.01 per share), of EDC.

       In May 2000, the Company acquired 100% of the outstanding common stock of
perfumania.com,  inc.  from EDC in  exchange  for  400,000  shares of EDC common
stock. As a result, perfumania.com, inc. became a wholly owned subsidiary of the
Company.  The  acquisition of  perfumania.com,  inc. was accounted for using the
purchase method of accounting, and accordingly, the purchase price was allocated
to the assets acquired and liabilities assumed based on their estimated relative
fair  values  at  the  acquisition  date.  Tangible  assets  acquired  consisted
primarily of merchandise  inventories.  Based on an independent  appraisal,  the
transaction was valued at approximately  $4.7 million.  As a result, the Company
recognized  a gain of  approximately  $4.5  million,  which is  included  in the
accompanying consolidated statement of operations for fiscal year 2000 as a gain
on sale of affiliate's  common stock.  The excess of the purchase price over the
fair value of tangible  net assets  acquired of  approximately  $2.9  million is
included in  goodwill in the  accompanying  consolidated  balance  sheets and is
being amortized over 5 years. The results of operations for perfumania.com, inc.
are included with the Company's  results from the date of acquisition.  Prior to
May 2000,  the  Company's  ownership in EDC was  accounted  for under the equity
method of accounting.  The acquisition of perfumania.com,  inc. was not material
to the  Company's  results of operation,  and therefore no proforma  results are
presented.

       Additionally,  in May 2000, the Company sold 100,000 shares of EDC common
stock  for  $2.5  million  to a  majority  shareholder  of  EDC.  In  a  related
transaction,  the second option of the Agreement was exercised and an investment
firm acquired from the Company  500,000  shares of EDC common stock at $8.00 per
share.  As a result of these  transactions,  the  Company  received  total  cash
proceeds of $6.5 million and realized a gain of approximately  $5.5 million.  As
of February 3, 2001,  Perfumania's investment in and advances to partially-owned
equity  affiliates  consisted  of a 26.67%  (two  million  shares)  interest  in
perfumania.com,  inc. which totaled  approximately  $2.6 million and advances in
the amount of  approximately  $0.2 million.  Effective May 2000,  perfumania.com
became a wholly-owned subsidiary of the Company.

       In December 2000,  the Company wrote off the remaining  investment in EDC
of  approximately  $0.6 million,  representing  1,000,000 shares of EDC's common
stock, due to EDC ceasing operations.  This loss is included in realized loss on
investments on the accompanying  consolidated statement of operations for fiscal
year 2000.

INVESTMENTS AVAILABLE FOR SALE

       During  fiscal year 2000,  the Company  purchased  314,000  shares of TTA
common stock for approximately $2.5 million.  In June 2000, the Company acquired
approximately  139,000  shares of TTA's  common  stock upon  conversion  of a $1
million  convertible  promissory  note receivable from them. In January 2002 and
2001, the Company  received 300,000 and 250,000,  respectively,  shares of TTA's
common  stock as  partial  payment on a loan  receivable  from Ilia  Lekach.  In
September 2001, TTA effected a corporate  reorganization  ("Reorganization") and
as a  result  TTA  became  a  wholly-owned  subsidiary  of  Nimbus  Group,  Inc.
("Nimbus").

       As of February 1, 2003, the Company owned approximately  1,003,000 shares
of  Nimbus'  common  stock   representing   approximately  13%  of  their  total
outstanding  shares. See also TTA Reorganization in Note 6 to these consolidated
financial statements.

       The investment in Nimbus is shown on the Company's  consolidated  balance
sheets as  investments  available for sale.  As of February 1, 2003,  the market
price for Nimbus' common stock was below the Company's average cost per share of
$4.13.  In  consideration  of accounting  guidance that  considers a six to nine
month decline in stock price to be other than temporary,  the Company recorded a
non-cash charge of approximately $0.7 million in realized loss on investments on
the consolidated  statements of operations for fiscal year 2002 and $3.1 million
for fiscal year 2000.


                                       40
<PAGE>

       During  fiscal  year  2000,  the  Company  purchased  for  cash  totaling
approximately $1.6 million  approximately  343,000 shares of common stock of The
Sportsman's  Guide,  Inc.  ("SGI"),  representing  approximately  7.0% of  SGI's
outstanding  shares of common stock.  SGI is a marketer of value priced  outdoor
gear and  general  merchandise.  During  fiscal  year  2000,  the  Company  sold
approximately  340,000  shares of SGI and  realized  a loss on the sale of these
securities of approximately $1.1 million,  which is included in realized loss on
investments  on the  accompanying  consolidated  statements of  operations.  The
remaining shares of SGI were sold in fiscal year 2002.

       All  investments are accounted for as  available-for-sale  securities and
are carried at fair value based on quoted market prices pursuant to Statement of
Financial  Accounting  Standards No. 115, "Accounting for Certain Investments in
Debt and  Equity  Securities".  Unrealized  gains and  losses  are  included  in
comprehensive   income  (loss)  and  is  included  in  shareholders'  equity  as
accumulated  other   comprehensive  loss  in  the  amount  of  $140,404  on  the
accompanying consolidated balance sheet as of February 1, 2003.

PREFERRED STOCK

       The Company's  Articles of Incorporation  authorize the issuance of up to
1,000,000 shares of preferred stock. The preferred stock may be issued from time
to time at the  discretion  of the  Board  of  Directors  without  stockholders'
approval.  The  Board of  Directors  is  authorized  to issue  these  shares  in
different  series and,  with respect to each series,  to determine  the dividend
rate, and provisions regarding redemption,  conversion,  liquidation  preference
and other rights and privileges.  As of February 1, 2003, no preferred stock had
been issued.

TREASURY STOCK

       As of February 2, 2001, the Company's board of Directors had approved the
repurchase by the Company of up to 625,000 shares of the Company's common stock,
reflecting  management's  belief that the Company's  common stock  represented a
significant value at its then current trading price. In February 2002, the Board
approved an increase in the stock  repurchase  program by an additional  250,000
shares.   Pursuant  to  these   authorizations,   the  Company  has  repurchased
approximately 780,000 shares of common stock for approximately  $7,086,000 as of
February 1, 2003,  including  approximately  13,000  shares for $0.1  million in
fiscal year 2002 and  approximately  358,000  shares for $1.4  million in fiscal
year 2001.

STOCK OPTION PLANS

       Under the Company's  2000 Stock Option Plan (the "Stock Option Plan") and
2000  Directors  Stock Option Plan (the  "Directors  Plan")  (collectively,  the
"Plans"),  both of which  superseded  the previously  existing  plans  effective
October 2000,  375,000 shares of common stock and 30,000 shares of common stock,
respectively,  are reserved for issuance upon exercise of options. Additionally,
the number of shares  available under the Stock Option Plan shall  automatically
increase  each  year  by 3% of  the  shares  of  common  stock  of  the  Company
outstanding at the end of the immediate  preceding  year. The Company's Board of
Directors,  or a committee thereof,  administers and interprets the Stock Option
Plan. The Stock Option Plan provides for the granting of both  "incentive  stock
options"  (as  defined  in  Section  422A  of the  Internal  Revenue  Code)  and
non-statutory stock options.  Options can be granted under the Stock Option Plan
on such terms and at such prices as determined by the Board, except that the per
share  exercise  price of options will not be less than the fair market value of
the common stock on the date of grant. Only non-employee  directors are eligible
to receive  options under the Directors Plan. The Directors Plan provides for an
automatic  grant of an option to  purchase  500  shares  of  common  stock  upon
election as a director of the Company and an automatic  grant of 1,000 shares of
common stock upon such  person's  re-election  as a director of the Company,  in
both  instances at an exercise price equal to the fair value of the common stock
on the date of grant.

       Had  compensation  cost for options granted been determined in accordance
with the fair value  provisions  of SFAS No. 123, the Company's net loss and net
loss per share would have been increased to the proforma amounts presented below
for fiscal years 2002, 2001 and 2000:


                                       41
<PAGE>


<TABLE>
<CAPTION>

                                                                            FISCAL YEARS
                                                      ---------------------------------------------------------
                                                            2002                2001               2000
                                                      ------------------  -----------------  ------------------
<S>                                                   <C>                 <C>                     <C>
Net loss as reported:                                 $      (2,825,700)  $     (3,191,657)  $      (6,120,291)
 Deduct: Total stock based employee
  compensation expense included in reported
  net loss, net                                                       -                  -                   -
 Add: Total stock based employee
  compensation expense not included in reported
  net loss, net                                       $        (478,449)  $       (396,704)  $        (565,061)
                                                      ------------------  -----------------  ------------------

Proforma net loss:                                    $      (3,304,149)  $     (3,588,361)  $      (6,685,352)
                                                      ==================  =================  ==================

Proforma net loss per share:
 Basic                                                $           (1.31)  $          (1.47)  $           (2.84)
                                                      ==================  =================  ==================
 Diluted                                              $           (1.31)  $          (1.47)  $           (2.84)
                                                      ==================  =================  ==================

</TABLE>


       In calculating  the proforma net loss per share for 2002,  2001 and 2000,
the fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the  following   weighted  average
assumptions used for grants in fiscal years 2002, 2001 and 2000:

<TABLE>
<CAPTION>
                                            2002                2001                2000
                                      ------------------  ------------------  -----------------

<S>                                        <C>                 <C>                 <C>
Expected life (years)                      7 years             7 years             7 years
Interest rate                               4.88%               4.80%              6.07%
Volatility                                  148%                158%                101%
Dividend yield                               0%                  0%                  0%

</TABLE>

       Options  granted  under the Stock Option Plan are  exercisable  after the
period or periods specified in the option  agreement,  and options granted under
the Directors Plan are exercisable immediately.  Options granted under the Plans
are not exercisable after the expiration of 10 years from the date of grant.

       A summary of the Company's option activity,  and related  information for
each of the three fiscal years ended February 1, 2003 is as follows:

<TABLE>
<CAPTION>

                                           2002                    2001                    2000
                                 ------------------------  ----------------------  -----------------------
                                              Weighted                 Weighted                Weighted
                                               Average                  Average                 Average
                                             Exercisable              Exercisable             Exercisable
                                    Shares     Price          Shares     Price       Shares      Price
                                 ----------- ------------  ---------- -----------  ---------- ------------
<S>                                 <C>        <C>           <C>        <C>          <C>        <C>
Outstanding at beginning of year    606,594    $ 5.60        570,115    $ 6.44       496,713    $ 5.24
Granted                             160,000      3.67         78,625      3.40       147,625     11.20
Exercised                           (59,807)     1.90         (4,750)     2.00       (46,056)     2.72
Cancelled                           (40,286)     8.19        (37,396)    14.12       (28,167)    16.32
                                 -----------               ----------              ----------
Outstanding at end of year          666,501    $ 5.32        606,594    $ 5.60       570,115    $ 6.44
                                 ===========               ==========              ==========

Options exercisable at end of year  449,714    $ 5.80        480,304    $ 5.24       460,824    $ 5.36
Weighted-average fair value
of options granted during
 the year                           160,000    $ 3.31         78,625    $ 3.31       147,625    $ 9.36

</TABLE>


       The  following   table   summarizes   information   about  stock  options
outstanding at February 1, 2003:

                                       42
<PAGE>

                                 OPTIONS OUTSTANDING   OPTIONS EXERCISABLE
                                            Weighted                Weighted
                                 Weighted   Average                  Average
                                  Average  Remaining                Remaining
  RANGE OF          NUMBER       Exercise  Contractual   NUMBER      Exercise
EXERCISE PRICES   OUTSTANDING      Price      Life     EXERCISABLE    Price
---------------- -------------  ----------  --------   ----------  ---------
 $1.64 - $2.00       251,572      $ 1.81      5        251,572     $ 1.81
 $2.27 - $4.00       227,665        3.60      9         28,571       3.48
 $4.09 - $12.52      163,068       11.28      7        150,376      11.43
 $12.88 - $20.00      22,944       17.72      7         17,943      17.08
 $21.52 - $21.52       1,252       21.52      7          1,252      21.52
                -------------                        ----------
                     666,501      $ 5.32      7        449,714     $ 5.80
                =============                        ==========



NOTE 12- EMPLOYEE BENEFIT PLANS

       The  Company  has a 401(k)  Savings  and  Investment  Plan ("the  Plan").
Pursuant to such Plan,  participants may make  contributions to the Plan up to a
maximum of 20% of total  compensation  or $10,500,  whichever  is less,  and the
Company, at its discretion, may match such contributions to the extent of 25% of
the  first  6%  of  a  participant's   contribution.   The  Company's   matching
contributions vest over a 4-year period. In addition to matching  contributions,
the Company may make additional  contributions on a discretionary basis in order
to  comply  with  certain   Internal   Revenue  Code   regulations   prohibiting
discrimination in favor of highly compensated employees.  The Company's matching
contributions during fiscal years 2002, 2001 and 2000 were not significant.


NOTE 13 - COMMITMENTS AND CONTINGENCIES

       The Company is  self-insured  for  employee  medical  benefits  under the
Company's  group  health  plan.  The Company  maintains  stop loss  coverage for
individual  medical claims in excess of $80,000 and for annual  Company  medical
claims  which exceed  approximately  $2.2  million in the  aggregate.  While the
ultimate  amount of claims  incurred are  dependent on future  developments,  in
management's opinion, recorded reserves are adequate to cover the future payment
of claims. However, it is possible that recorded reserves may not be adequate to
cover the future payment of claims.  Adjustments,  if any, to estimates recorded
resulting  from ultimate  claim  payments will be reflected in operations in the
periods  in which such  adjustments  are known.  The  self-insurance  reserve at
February 1, 2003 and February 2, 2002 was  approximately  $220,000 and $166,000,
respectively, which is included in accrued expenses and other liabilities in the
accompanying consolidated balance sheets.

       The Company leases space for its office, warehouse and retail stores. The
lease terms vary from one to ten years,  in some cases with options to renew for
longer periods. Various leases contain clauses which adjust the base rental rate
by the prevailing  Consumer Price Index,  as well as additional  rent based on a
percentage of gross sales in excess of a specified amount.

       Rent  expense for fiscal  years 2002,  2001,  and 2000 was  approximately
$15,879,000,  $15,482,000, and $16,156,000,  respectively.  Future minimum lease
commitments  under  non-cancelable  operating  leases at February 1, 2003 are as
follows:

             FISCAL YEAR
--------------------------------------
2003                                    $         11,463,949
2004                                               9,086,013
2005                                               7,707,243
2006                                               5,984,030
2007                                               3,990,538
Thereafter                                         2,632,432
                                        ---------------------
Total future minimum lease payments     $         40,864,205
                                        =====================


       The  Company's  capitalized  leases  consist  of a  corporate  office and
distribution facility to which the Company will relocate in fiscal year 2003, as
well as computer  hardware and software.  The lease for the corporate office and


                                       43
<PAGE>

distribution  facility is for  approximately  15 years with monthly rent ranging
from approximately $73,000 to $104,000.  Included in the capitalized cost of the
corporate  office  and   distribution   facility  as  of  February  1,  2003  is
approximately  $360,000 of interest.  The lease terms for the computer  hardware
and software vary from one to three years. The following is a schedule of future
minimum lease payments  under capital leases  together with the present value of
the net minimum lease payments, at February 1, 2003:

              FISCAL YEAR
----------------------------------------
2003                                      $           1,939,001
2004                                                  1,156,061
2005                                                  1,106,246
2006                                                  1,084,058
2007                                                  1,072,752
Thereafter                                           12,069,295
                                          ----------------------
Total future minimum lease payments                  18,427,413
Less: Amount representing interest                   (9,693,314)
                                          ----------------------
Present value of minimum lease payments               8,734,099
Less: Current portion                                  (981,784)
                                          ----------------------
                                          $           7,752,315
                                          ======================



       The  depreciation  expense  relating  to capital  leases is  included  in
depreciation   and  amortization   expense  in  the  accompanying   consolidated
statements of operations.

       The Company is party to irrevocable  standby  letters of credit  totaling
approximately  $0.6  million as of February 1, 2003 which serves as security for
performance of equipment  leases.  Management  believes that the carrying values
approximate  fair  value and does not  expect  any  material  losses  from their
resolution since performance is not likely to be required.

       The Company is  involved in various  legal  proceedings  in the  ordinary
course of business.  Management  cannot  presently  predict the outcome of these
matters,  although  management  believes  that the ultimate  resolution of these
matters should not have a materially  adverse effect on the Company's  financial
position or result of operations.


NOTE 14- QUARTERLY FINANCIAL DATA (UNAUDITED)

       Unaudited  summarized  financial  results for fiscal  years 2002 and 2001
follows (in thousands, except for per share data):
<TABLE>
<CAPTION>

2002 QUARTER                               FIRST        SECOND         THIRD          FOURTH
                                     -------------  -------------  ------------   -------------

<S>                                      <C>            <C>           <C>             <C>
Net sales                                $ 40,169       $ 48,089      $ 43,112        $ 70,144
Gross profit                               17,329         19,999        17,902          29,364
Net income (loss)                          (1,940)          (686)       (4,960)          4,760
Net income (loss) per basic share           (0.80)         (0.28)        (1.92)           1.81
Net income (loss) per diluted share         (0.80)         (0.28)        (1.92)           1.81


2001 QUARTER                               FIRST        SECOND         THIRD          FOURTH
                                     -------------  -------------  ------------   -------------

Net sales                                $ 40,583       $ 44,202      $ 41,865        $ 66,702
Gross profit                               16,662         18,667        17,319          27,587
Net income (loss)                          (3,402)        (1,715)       (2,945)          4,870
Net income (loss) per basic share           (1.35)         (0.70)        (1.24)           1.97
Net income (loss) per diluted share         (1.35)         (0.70)        (1.24)           1.97

</TABLE>


    The Company realizes higher sales, gross profit and net income in the fourth
fiscal quarter than the other three fiscal  quarters due to increased  purchases
of fragrances as gift items during the Christmas holiday season.



                                       44
<PAGE>
                      E COM VENTURES, INC. AND SUBSIDIARIES
          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

<TABLE>
<CAPTION>
                                          ADDITIONS
                                    ---------------------

                         BALANCE AT   CHARGED TO     CHARGED TO                      BALANCE
                         BEGINNING      COSTS &         OTHER                         AT END
                         OF PERIOD     EXPENSE        ACCOUNTS       DEDUCTIONS     OF PERIOD
                       ------------  ------------  ------------   ---------------  ------------
<S>                    <C>           <C>           <C>            <C>              <C>
FOR THE YEAR ENDED
FEBRUARY 3, 2001
Inventories            $ 2,369,953   $         -   $        -     $   (167,110)(3) $   2,202,843
Self-insurance             363,552     1,054,170      713,137(1)    (1,681,056)(2)       449,803

FOR THE YEAR ENDED
FEBRUARY 2, 2002
Inventories            $ 2,202,843   $         -   $        -         (509,674)(3) $   1,693,169
Self-insurance             449,803     1,257,446      864,731(1)    (2,405,759)(2)       166,221

FOR THE YEAR ENDED
FEBRUARY 1, 2003
Inventories            $ 1,693,169   $         -   $        -     $   (503,435)(4) $   1,189,734
Self-insurance             166,221     1,539,984      928,267(1)    (2,414,331)(2)       220,141

</TABLE>


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


(1) Represents employee contributions.

(2) Represents payments of claims and fees.

(3) Represents amounts written off against inventory.

(4) Represents reductions of expense and amounts written off against inventory.




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

       None.












                                       45
<PAGE>
                                    PART III.

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

       The information called for by this item is incorporated by reference from
E Com Ventures, Inc. Annual Meeting of Shareholders - Notice and Proxy Statement
- 2003 (to be filed pursuant to Regulation 14A not later than 120 days after the
close of the fiscal year) in accordance with General Instruction 6 to the Annual
Report on Form 10-K.

ITEM 11.      EXECUTIVE COMPENSATION

       The information called for by this item is incorporated by reference from
E Com Ventures, Inc. Annual Meeting of Shareholders - Notice and Proxy Statement
- 2003 (to be filed pursuant to Regulation 14A not later than 120 days after the
close of the fiscal year) in accordance with General Instruction 6 to the Annual
Report on Form 10-K.

ITEM 12.      SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT
              AND RELATED STOCKHOLDER MATTERS

       The information is required by Item 403 of Regulation S-K relating to the
ownership of our common stock by certain beneficial owners and management and is
incorporated  by  reference  from  E  Com  Ventures,   Inc.  Annual  Meeting  of
Shareholders  - Notice  and  Proxy  Statement  - 2003 (to be filed  pursuant  to
Regulation  14A not later than 120 days  after the close of the fiscal  year) in
accordance with General Instruction 6 to the Annual Report on Form 10-K.

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       The information is  incorporated  by reference from E Com Ventures,  Inc.
Annual Meeting of  Shareholders - Notice and Proxy Statement - 2003 (to be filed
pursuant to Regulation 14A not later than 120 days after the close of the fiscal
year) in  accordance  with General  Instruction  6 to the Annual  Report on Form
10-K.

ITEM 14.      CONTROLS AND PROCEDURES

         Our Chief Executive Officer and Chief Financial Officer have concluded,
based on their evaluation within 90 days of the filing date of this report, that
our disclosure  controls and  procedures are effective for gathering,  analyzing
and disclosing the  information we are required to disclose in our reports filed
under the  Securities  Exchange  Act of 1934.  There  have  been no  significant
changes in our internal  controls or in other  factors that could  significantly
affect  these  controls  subsequent  to the  date  of the  previously  mentioned
evaluation.

ITEM 15.      PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

         The aggregate fees billed by Deloitte & Touche LLP for the audit of our
annual  financial  statements for the fiscal year ended February 1, 2003 and for
its  reviews of the  financial  statements  included  in our Form 10-Q's for the
fiscal year ended February 1, 2003, were approximately $221,400.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

         The  Company  was not billed by  Deloitte  & Touche  LLP for  financial
information systems design and implementation for the fiscal year ended February
1, 2003.

OTHER FEES

         The  aggregate  of all other fees billed to us by Deloitte & Touche LLP
were approximately $15,000 for the fiscal year ended February 1, 2003.



                                       46
<PAGE>
                                    PART IV.

ITEM 16.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.


              (a) The following documents are filed as part of this report:

                   (1)     Financial Statements

       An index to financial  statements  for the fiscal years ended February 1,
2003, February 2, 2002 and February 3, 2001 appears on page 22.

                   (2)     Financial Statement Schedule

       The following  statement  schedule for the fiscal years ended February 1,
2003, February 2, 2002 and February 3, 2001 are submitted herewith:

                                                                 ITEM
                                                               FORM 10-K
                                                                NUMBER
                                                                 PAGE
                                                               ---------
           Schedule II - Valuation and Qualifying Accounts
           and
           Reserves                                               45


       All  other   financial   schedules  are  omitted  because  they  are  not
applicable,  or the required  information  is otherwise  shown in the  financial
statements or notes thereto.

(3)        Exhibits

<TABLE>
<CAPTION>
                                                                                                        PAGE NUMBER
                                                                                                       OR INCORPORATED
                                                                                                        BY REFERENCE
           EXHIBIT                                       DESCRIPTION                                       FROM
           -------                                       -----------                                       ----


<S>            <C>       <C>                                                                               <C>
               3.1       Amended and Restated Articles of Incorporation                                    (12)

               3.2       Bylaws                                                                             (2)

              10.1       Executive Compensation Plans and Arrangements

                         (a) Employment Agreement, dated as of February 16, 2001, between                  (11)
                         the Company and A. Mark Young

                         (b) Employment Agreement, dated as of February 1, 2002, between                   (12)
                         the Company and Ilia Lekach

              10.5       1991 Stock Option Plan, as amended                                                 (6)

              10.6       1992 Directors Stock Option Plan, as amended                                       (6)

              10.7       Series A Securities Purchase Agreement                                             (3)

              10.8       Series B Securities Purchase Agreement                                             (4)

              10.9       Series C Securities Purchase Agreement                                             (5)

              10.10      Series D Securities Purchase Agreement                                             (5)

              10.11      2000 Stock Option Plan                                                            (10)

              10.12      2000 Directors Stock Option Plan                                                  (10)

              10.13      Revolving Credit and Security Agreement with GMAC Commercial Credit LLC,           (9)
                         dated May 12, 2000

              10.14      Waiver and  Amendment to the  Revolving  Credit and  Security  Agreement          (11)
                         with
                         GMAC Commercial Credit LLC, dated November 8, 2000

              10.15      Waiver and  Amendment to the  Revolving  Credit and  Security  Agreement          (11)
                         with
                         GMAC Commercial Credit LLC, dated April 26, 2001

              10.16      Lease agreement with Victory  Investment  Group,  LLC, dated October 21,          (13)
                         2002
</TABLE>

                                       47
<PAGE>

<TABLE>
<CAPTION>
<S>            <C>       <C>                                                                               <C>
               21.1      Subsidiaries of the Registrant                                                    (13)

               23.1      Consent of Deloitte & Touche LLP                                                  (13)

               99.1      Certification  of  the  Chief  Executive  Officer  and  Chief  Financial          (13)
                         Officer  pursuant  to 18 U.S.C.,  Section  1350 as adopted  pursuant  to
                         Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>

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

(1)  Incorporated by reference to the exhibit of the same description filed with
     the Company's 1993 Form 10-K (filed April 28, 1994).

(2)  Incorporated by reference to the exhibit of the same description filed with
     the Company's Registration Statement on Form S-1 (No. 33-46833).

(3)  Incorporated by reference to the exhibit of the same description filed with
     the Company's  Registration  Statement on Form S-1 filed June 11, 1999 (No.
     333-80525).

(4)  Incorporated by reference to the exhibit of the same description filed with
     the Company's  Registration  Statement on Form S-1/A, filed August 31, 1999
     (No. 333-80525).

(5)  Incorporated by reference to the exhibit of the same description filed with
     the Company's  Registration Statement on Form S-3 filed April 25, 2000 (No.
     333-35580).

(6)  Incorporated by reference to the exhibit of the same description filed with
     the Company's 1995 Form 10-K (filed April 26, 1996).

(7)  Not used.

(8)  Incorporated by reference to the exhibit of the same description filed with
     the Company's 1999 Form 10-K/A (filed May 30, 2000).

(9)  Incorporated by reference to the exhibit of the same description filed with
     the Company's 1999 Form 10-Q (filed June 13, 2000).

(10) Incorporated by reference to the exhibit of the same description filed with
     the Company's Proxy Statement (filed October 6, 2000).

(11) Incorporated by reference to the exhibit of the same description filed with
     the Company's 2000 Form 10-K (filed May 4, 2001).

(12) Incorporated by reference to the exhibit of the same description filed with
     the Company's 2001 Form 10-K (filed May 3, 2002).

(13) Filed herewith.

    (b)  Reports on Form 8-K

         On  April  25,  2003,  the  Company  filed a Form  8-K  disclosing  its
         financial results for the fiscal year ended February 1, 2003.

                                       48
<PAGE>


                                   SIGNATURES

    Pursuant  to the  requirements  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, April 28, 2003.


                                  E Com Ventures, Inc.

                                  By: /s/ ILIA LEKACH
                                  ----------------------------------------
                                  Ilia Lekach, Chairman of the Board
                                  and Chief Executive Officer
                                  (Principal Executive Officer)


                                  By: /s/ A. MARK YOUNG
                                  ----------------------------------------
                                  A. Mark Young, Chief Financial Officer
                                   (Principal Accounting Officer)

POWER OF ATTORNEY

       We, the undersigned,  hereby constitute Ilia Lekach and A. Mark Young, or
either of them,  our true and lawful  attorneys-in-fact  with full power to sign
for us in our name and in the capacity  indicated  below any and all  amendments
and supplements to this report, and to file the same, with exhibits thereto, and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,  hereby ratifying and confirming all that said  attorneys-in-fact or
their  substitutes,  each acting  alone,  may lawfully do or cause to be done by
virtue hereof.

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

<TABLE>
<CAPTION>

          SIGNATURE                                                 TITLE                             DATE
          ---------                                                 -----                             ----

<S>       <C>                                             <C>                                   <C>
          /s/ ILIA LEKACH                                 Chairman of the Board and              April 28, 2003
          ------------------------------
          Ilia Lekach                                     Chief Executive Officer,
                                                        (Principal Executive Officer)


          /s/ JEFFREY GELLER                            President and Chief Operating Officer    April 28, 2003
          ------------------------------
          Jeffrey Geller                                     of Perfumania, Inc.



          /s/ A. MARK YOUNG                               Chief Financial Officer,               April 28, 2003
          ------------------------------
          A. Mark Young                                (Principal Accounting Officer)



          /s/ DONOVAN CHIN                                 Chief Financial Officer               April 28, 2003
          ------------------------------
          Donovan Chin                                        Perfumania, Inc.,
                                                           Secretary and Director


          /s/ CAROLE ANN TAYLOR                                   Director                       April 28, 2003
          ------------------------------
          Carole Ann Taylor


          /s/ JOSEPH BOUHADANA                                    Director                       April 28, 2003
          ------------------------------
          Joseph Bouhadana


          /s/ MILES RAPER                                         Director                       April 28, 2003
          ------------------------------
          Miles Raper

</TABLE>


                                       49
<PAGE>


                                 CERTIFICATIONS

            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002




I, Ilia Lekach, certify that:

(1)  I have reviewed this annual report on Form 10-K of E Com Ventures, Inc.;

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

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

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

     (a)  designed  such internal  controls to ensure that material  information
          relating to the registrant,  including its  consolidated  subsidiaries
          (collectively the "Company") is made known to the Certifying  Officers
          by others within the Company,  particularly during the period in which
          this annual report is being prepared;

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

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

(5)  The  registrant's  Certifying  Officers have  disclosed,  based on our most
     recent evaluation,  to the registrant's auditors and the audit committee of
     registrant's board of directors:


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


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


(6)  The registrant's  Certifying  Officers have indicated in this annual report
     whether or not there were  significant  changes in internal  controls or in
     other factors that could significantly  affect internal controls subsequent
     to the date of our most recent evaluation, including any corrective actions
     with regard to significant deficiencies and material weaknesses.





Date: April 28, 2003


By:  /S/ ILIA LEKACH
--------------------
Ilia Lekach
Chief Executive Officer

                                       50
<PAGE>


                                 CERTIFICATIONS

            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002




I, A. Mark Young, certify that:

(1)  I have reviewed this annual report on Form 10-K of E Com Ventures, Inc.;

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

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

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

     (a)  designed  such internal  controls to ensure that material  information
          relating to the registrant,  including its  consolidated  subsidiaries
          (collectively the "Company") is made known to the Certifying  Officers
          by others within the Company,  particularly during the period in which
          this annual report is being prepared;

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

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

(5)  The  registrant's  Certifying  Officers have  disclosed,  based on our most
     recent evaluation,  to the registrant's auditors and the audit committee of
     registrant's board of directors:


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


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


(6)  The registrant's  Certifying  Officers have indicated in this annual report
     whether or not there were  significant  changes in internal  controls or in
     other factors that could significantly  affect internal controls subsequent
     to the date of our most recent evaluation, including any corrective actions
     with regard to significant deficiencies and material weaknesses.





Date: April 28, 2003


By:  /S/ A. MARK YOUNG
----------------------
A. Mark Young
Chief Financial Officer


                                       51


<PAGE>