<Page>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A
                                (Amendment No. 1)

              ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended July 31, 2004           Commission file number 0-11736

                              THE DRESS BARN, INC.
             (Exact name of registrant as specified in its charter)

              Connecticut                                      06-0812960
    (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization)                        Identification No.)

  30 Dunnigan Drive, Suffern, New York                           10901
(Address of principal executive offices)                       (Zip Code)

                                 (845) 369-4500
              (Registrant's telephone number, including area code)

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

                               Title of each class
                           Common Stock $.05 par value

Indicate 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 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 the definitive proxy incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [_].

Indicate by check mark whether the registrant is an accelerated filer.
Yes [X] No [_].

As of October 13, 2004, 29,660,087 shares of voting common shares were
outstanding. The registrant does not have any authorized or issued or
outstanding non-voting common stock. The aggregate market value of the voting
common shares (based upon the October 13, 2004 closing price of $17.73 on the
NASDAQ Stock Market) of The Dress Barn, Inc. held by non-affiliates was
approximately $387.4 million. For the purposes of such calculation, all
outstanding shares of Common Stock have been considered held by non-affiliates,
other than the 7,808,105 shares beneficially owned by Directors and Executive
Officers of the registrant. In making such calculation, the registrant does not
determine the affiliate or non-affiliate status of any shares for any other
purpose.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held on November 17, 2004 are incorporated into Parts I and
III of this Form 10-K/A.

                                   Cover Page


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                                EXPLANATORY NOTE

     This Amendment on Form 10-K/A to The Dress Barn, Inc. and its wholly-owned
subsidiaries (the "Company") for the fiscal year ended July 31, 2004, is being
filed in order to correct its previously issued consolidated financial
statements for fiscal 2002, 2003 and 2004. The corrections are to properly
account for construction allowances, rent holidays and for scheduled rent
escalation clauses over the lease term in accordance with accounting principles
generally accepted in the United States of America. In addition, the Company
corrected certain other balance sheet and statement of earnings classification
errors. See Note 2 to the Company's consolidated financial statements for
additional discussion. In response to comments from the Staff of the Securities
and Exchange Commission with respect to future periodic filings by the Company,
this Form 10K/A also includes certain incremental disclosures. Except as
otherwise expressly stated, the information in the Amendment is as of October
15, 2004, the date on which the original Form 10-K was filed, and this Amendment
does not purport to provide an update or discussion of any developments
subsequent to the original filing.

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

                              THE DRESS BARN, INC.
                                   FORM 10-K/A
                         FISCAL YEAR ENDED JULY 31, 2004
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                          <C>
PART I
   Item 1     Business
                 General                                                      4
                 Company Strengths and Strategies                             4
                 Merchandising                                                7
                 Buying and Distribution                                      8
                 Store Locations and Properties                               8
                 Operations and Management                                   10
                 Advertising and Marketing                                   11
                 Management Information Systems                              11
                 Trademarks                                                  11
                 Employees                                                   12
                 Seasonality                                                 12
                 Forward-Looking Statements and Factors Affecting Future
                    Performance                                              12

   Item 2     Properties                                                     13

   Item 3     Legal Proceedings                                              14

   Item 4     Submission of Matters to a Vote of Security Holders            15

   Item 4A    Executive Officers of the Registrant                           16
</TABLE>


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<TABLE>
<S>                                                                          <C>
PART II
   Item 5     Market for Registrant's Common Stock,
                 Related Security Holders Matters and Issuer
                 Purchases of Equity Securities                              17

   Item 6     Selected Financial Data                                        18

   Item 7     Management's Discussion and Analysis of
                 Financial Condition and Results of Operations               20

   Item 7A    Quantitative and Qualitative Disclosures About Market Risk     31

   Item 8     Financial Statements and Supplementary Data                    31

   Item 9     Changes in and Disagreements with Accountants
                 on Accounting and Financial Disclosure                      31

   Item 9A    Controls and Procedures                                        32

   Item 9B    Other Information                                              32

PART III
   Item 10    Directors and Executive Officers of the Registrant             33

   Item 10A   Code of Business Conduct and Ethics                            33

   Item 11    Executive Compensation                                         33

   Item 12    Security Ownership of Certain Beneficial Owners
                 and Management                                              33

   Item 13    Certain Relationships and Related Transactions                 33

   Item 14    Principal Accountant Fees and Services                         33

PART IV
   Item 15    Exhibits and  Financial Statement Schedule                     34
</TABLE>


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<Page>



                                     PART I

ITEM 1. BUSINESS

General

     The Dress Barn, Inc. and its wholly-owned subsidiaries (the "Company", or
"dressbarn") operates a chain of women's apparel specialty stores. The stores,
operating principally under the names "Dress Barn" and "Dress Barn Woman", offer
in-season, moderate to better quality career and casual fashion to the working
woman at value prices. The Company differentiates itself from (i) off-price
retailers by its carefully edited selection of unique, in-season, first-quality
merchandise, service-oriented salespeople and its comfortable shopping
environment, (ii) department stores by its value pricing, sales and convenient
locations and (iii) other specialty apparel retailers by its unique,
lifestyle-oriented merchandise and its continuous focus on Dress Barn's target
customer. As part of this focus, the Company has successfully developed its own
brand, which constituted virtually all of its net sales for the fiscal year
ended July 31, 2004 ("fiscal 2004").

     The Company operates primarily combination Dress Barn/Dress Barn Woman
stores ("Combo stores"), which carry both Dress Barn and larger-sized Dress Barn
Woman merchandise, as well as freestanding Dress Barn and Dress Barn Woman
stores. As of July 31, 2004, the Company operated 776 stores in 45 states and
the District of Columbia, consisting of 545 Combo stores, 178 Dress Barn stores
and 53 Dress Barn Woman stores. The Dress Barn and Dress Barn Woman stores
average approximately 4,500 and approximately 4,000 square feet, respectively,
and the Combo stores average approximately 8,500 square feet.

Company Strengths and Strategies

     Dress Barn strives to be the preferred career and casual women's specialty
store for the moderate customer (size 4 to 24), providing differentiated current
fashion merchandise at value prices in a comfortable easy to shop environment
with a strong focus on sales. The Company caters to the time-pressured working
women who want their shopping trips to be efficient by offering one stop
shopping from career to casual sportswear, as well as dresses, suits, special
occasion clothing, accessories, jewelry and shoes. To accommodate this customer,
the Company locates its stores primarily in nearby strip shopping centers and
operates most of these stores seven days and six nights a week. The Company
seeks to maintain a distinct fashion point of view, with unique merchandise not
found at other stores, editing its assortments frequently in accordance with its
targeted customer's tastes. Merchandise is arranged conveniently by lifestyle
and category. Customers develop a high degree of confidence that they will
quickly find the styles that match their preferences. This, along with attentive
service, which Dress Barn is known for, helps to create a loyal repeat customer.

     The Company same store sales increased 1.9% in fiscal 2004 after declines
in both fiscal 2003 and 2002. To achieve continued growth in same store sales,
the Company strategy is to increase customer traffic to its store locations by
(a) bringing into its stores more unique, fashion-forward quality merchandise
not found at its competitors while maintaining its value prices, (b) investing
in technology and training to enhance its already well-known friendly sales
associates and the product knowledge of its sales associates and (3) increasing
its marketing and advertising budget as a percentage of sales, to focus on
communicating the brand, as an image and a lifestyle, and on special promotions
and rewards to current and potential customers and its Dress Barn credit card
holders.


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     Dress Barn is one of the largest national specialty store chains offering
in-season women's career and casual fashions at value prices. Dress Barn
attributes its success to its: (i) national brand recognition and loyal customer
base; (ii) long-standing relationships with vendors and manufacturers of quality
merchandise, both domestic and overseas; (iii) strong, consistent customer
focus; (iv) low cost operating structure; (v) experienced merchandise management
team and (vi) strong balance sheet.

     Since the Company's formation in 1962, Dress Barn has established and
reinforced its image as a source of fashion and value, focusing on its target
customer - fashion minded working women. The Company has built its brand image
as a core resource for a lifestyle-oriented, stylish, value-priced assortment of
career and casual fashions tailored to its customers' needs. The Company's 776
store locations in 45 states provide it with a nationally recognized brand name.
The Company has developed long-standing relationships with its existing
customers, enjoying strong customer loyalty.

     The Company has developed and maintains strong and lasting relationships
with its domestic and offshore vendors and manufacturers, including its buying
agents, often being one of their largest accounts. These relationships, along
with the Company's buying power and strong credit profile, enable the Company to
receive favorable purchasing terms, exclusive merchandise and expedited delivery
times.

     Over the past several years, the Company has been gradually repositioning
itself to appeal to a more fashion conscious customer while maintaining the
Company's focus on its target customer. This repositioning includes enhancing
the existing Dress Barn image, building brand awareness through various
marketing and advertising campaigns, adopting a new logo and creating a
personality and a voice for the Dress Barn brand and communicating this
friendlier, more feminine spirit to customers, potential customers and
associates. To enhance the development of the Dress Barn brand, the Company
changed and updated its in-store graphics, and developed a new prototype store
design. During this period, the Company has expanded the use of its dressbarn'r'
label to virtually all its merchandise offerings, emphasizing quality, value and
fashion.

     To strengthen the Company's brand image and marketing effectiveness, the
Company has moved away from reliance on weekly newspaper advertising in favor of
targeted national magazine advertising and expanded direct mail. In addition,
the Company increased its marketing spending to 1.6% of sales in fiscal 2004
from 1.4% of sales in fiscal 2003. The Company advertises in approximately 10
national magazines, using ads designed to enhance brand awareness as well as to
bring new customers into its stores. The Company is also a national sponsor for
the American Cancer Society, and the marketing department has an active public
relations effort, which has led to more public awareness through increased press
coverage for Dress Barn.

     The Company's merchandise offerings reflect a focused and balanced
assortment of career and casual fashions tailored to its customers' demands. The
Company believes it offers its customers unique merchandise, generally fashion
forward with constantly updated looks and colors. The merchandise mix has
evolved to a more updated contemporary style, shifting in focus from structured,
career looks to softer outfit dressings and assortments. The Company has
upgraded its fabrications, offering value, style and fashion while maintaining
its quality and price points. The Company attempts to insure its merchandise
sizes are true, with consistent sizing; easy to care for and of quality
construction.

     The Company's stores continue to reflect newness and fashion, with key
items accented by six floorset changes a year. Stores receive shipments daily
for a constant flow of new looks to keep the assortments fresh and exciting.
Lifestyle merchandising is key; emphasizing mix and match outfit dressing within
strong color stories. The Company has a new store design that features an easier
to shop layout, warmer colors and new wood fixtures for enhanced merchandise
presentation. During fiscal 2004, the Company utilized this design in its newly
opened stores and updated approximately 12 stores to this new design; the
Company plans to update or completely remodel approximately 15 of its store
locations during its fiscal year ending July 30, 2005 ("fiscal 2005"). At the
end of fiscal 2004, more than half of the Company's stores feature this new
design.

     Dress Barn continues to invest in technology to improve merchandising and
sales, reduce costs and enhance productivity. The Company utilizes a field
information system for all its Regional and District Sales Managers via laptop
computers, providing sales, inventories and other operational data. The Company
upgraded its back-office store system software to include such features as
inventory scanning, quick credit approval for new applications, automated new
hire entry and store email. The Company utilizes a DVDi Learning Management
System (LMS), where sales associates are able to take tests and the Company
plans to have the results tracked centrally for consistency across all of its
stores. In


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addition, the Company began a rollout of a new point-of-sale ("POS") system with
many enhanced features to all its stores in the fourth quarter of fiscal 2004,
which was completed in the first quarter of fiscal 2005. This rollout included
the installation of a wide area network. This new system allows the Company to
add functionality to its POS system with the ability to capture debit card
transactions, centralize credit authorizations, improve promotion transactions
handling, and speed up customer transaction time. The Company's distribution
center systems continue to be refined to reduce per-unit distribution costs.

     All aspects of Dress Barn's stores are designed to be responsive to the
Dress Barn customer. In past customer surveys, sales was viewed as superior to
its competition and was a competitive advantage. Since 1962, the Company has
been consistent in targeting price-conscious and fashion-minded working women.
The convenient locations of the Company's stores primarily in strip and outlet
centers, carefully edited coordinated merchandise arranged for ease of shopping,
comfortable store environment and friendly sales associates embody Dress Barn's
strong focus on its customers. Dress Barn's training program encourages its
sales associates to assist customers in a low-key and friendly manner. The
Company has various programs to recognize and reward its best sales associates.
The Company believes it enhances its customers' shopping experience by avoiding
aggressive sales tactics that would result from a commission-based compensation
structure.

     The Company continually seeks to reduce costs in all aspects of its
operations and to create cost-consciousness at all levels. The Company believes
that its highly liquid cash and investments and its internally generated funds
provide a competitive advantage that enables the Company to pursue its long-term
strategies regarding new stores, capital expenditures and marketing and brand
development.

     In January 2003, the Company, through a wholly owned subsidiary, purchased
for approximately $45.3 million a distribution/office facility in Suffern, New
York (the "Suffern Facility"), of which the major portion is the Company's
corporate offices and distribution center. The acquisition of the Suffern
Facility provides flexibility for future expansion and has resulted in
significant savings in its home office and distribution center occupancy costs.

     Based on the economic success of its larger size Combo stores, most fiscal
2005 store openings will be Combo stores between 7,000 and 8,000 square feet.
Combo stores provide the Company with greater presence in shopping centers, give
the Company more leverage in negotiating lease terms, enable the Company to
achieve lower operating cost ratios and offer increased flexibility in
merchandise presentation. The Company has in the past also purchased locations
from bankrupt retailers, some of which were too small for a Combo store and were
opened as freestanding locations. Of the 53 stores the Company opened during
fiscal 2004, 48 were Combo store locations and 5 were freestanding locations.
The Company has an ongoing program of converting its older freestanding stores
to Combo stores. Six stores were converted to Combo stores during fiscal 2004.
The Company expects to continue to open stores primarily in strip centers, as
well as in downtown and outlet locations. In fiscal 2005, the Company plans to
open approximately 50 new stores and convert a few existing stores to Combo
stores, including expanding into new markets.


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     In conjunction with its strategy of adding mostly Combo stores, the Company
continues to close or relocate its underperforming locations and closed 47 such
locations during fiscal 2004, compared to 28 closed in fiscal 2003. The Company
also plans to close approximately 30 to 40 more such locations in fiscal 2005.
The Company has the option under a substantial number of its store leases to
terminate the lease at little or no cost if specified sales volumes are not
achieved, affording the Company greater flexibility to close certain
underperforming stores. The Company's continued opening of new stores, net of
store closings, resulted in an aggregate store square footage increase of
approximately 1.2% in fiscal 2004, after a 4.5% increase in fiscal 2003. Net of
store closings, the Company currently plans to increase its aggregate store
square footage in the low single-digits in fiscal 2005.

     The Company's marketing programs focus on developing stronger relationships
with its existing customers, increasing their loyalty by making them feel better
about Dress Barn. Concurrently, the programs try to create awareness among those
who are not already customers and inspire them to visit its stores and see what
Dress Barn has to offer. One major source of marketing information is the Dress
Barn credit card, with almost 2.7 million cardholders, the Company continues to
segment its best customers and target them with exclusive offers and
recognition. The credit card purchasing information, combined with transactional
data from the stores, has created a customer database for our customer
relationship management ("CRM") system. The CRM database tracks customer
transactions, with the ability to target customers with specific offers and
promotions, including coupons, pre-sale announcements, and special events. The
CRM database is used for the Company's direct mail program, providing more
productive direct mail lists as well as targeting potential customers within
each store's trading area and for new stores.

     The Company utilizes its web site (www.dressbarn.com) for reinforcing store
promotions and providing store and product information, helping to drive store
traffic and communicate with its retail customers. In addition, the Company
sells gift certificates on its website.

Merchandising

     Virtually all merchandising decisions affecting the Company's stores are
made centrally. Day to day store merchandising is under the direction of Keith
Fulsher, the General Merchandise Manager, and six additional merchandise
managers. The Company utilizes a Visual Merchandising Department to communicate
various floorsets and presentations to the stores. The Company generally has six
complete floorset changes per year to keep its merchandise presentation fresh
and exciting. There is a constant flow of new merchandise to the stores to
maintain newness. Store prices and markdowns are determined centrally but may be
adjusted locally in response to competitive situations. Generally, the majority
of the merchandise sold by the Company is uniformly carried by all stores, with
a percentage varied by management according to regional or consumer tastes or
the volume of a particular store. To keep merchandise seasonal and in current
fashion, inventory is reviewed weekly and markdowns are taken as appropriate to
expedite selling. The Company offers first-quality, in-season merchandise, with
approximately 60% of the Company's sales volume derived from sportswear,
including sweaters, knit and woven tops, pants and skirts. The remainder of the
Company's sales volume includes dresses, suits, blazers, outerwear and
accessories. In fiscal 2003, sportswear accounted for approximately 65% of sales
volume. The decrease in fiscal 2004 was due primarily to increases in the
jewelry and blouse categories. Dress Barn Woman merchandise features larger
sizes of styles similar to Dress Barn merchandise. The Company's Petite
departments feature merchandise similar to Dress Barn merchandise in petite
sizes. In addition to the Company's broad assortment of career and casual wear,
the Company offers other items in selected stores including hosiery, handbags
and shoes. There are separate merchandising teams for Dress Barn and Dress Barn
Woman.

     The Company's direct sourcing of its merchandise improves its control over
the flow of merchandise into its stores and enables the Company to better
specify quantities, styles, colors, size breaks and delivery dates. In addition,
the Company believes its direct sourcing provides it with more flexibility by
allowing for higher initial mark-ons. The Company believes it has the expertise
to execute its brand strategy due to its extensive experience sourcing goods,
its position as a merchandiser of established fashions, and its prior experience
with private brands. Virtually all of the Company's sales are generated from its
private brand labels.


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     The Company continues to expand the number of its stores with shoe and
petite-size departments. As of July 31, 2004, 340 stores had shoe departments
and 198 stores featured petite-sized departments.

Buying and Distribution

     Buying is conducted on a departmental basis for Dress Barn and Dress Barn
Woman by the Company's staff of over 45 buyers and assistant buyers supervised
by the General Merchandise Manager and six merchandise managers. The Company
also uses independent buying representatives in New York and overseas. The
Company obtains its merchandise from approximately 200 vendors, and no vendor
accounted for over 5% of the Company's purchases. In fiscal 2004, imports
accounted for over 50% of merchandise purchases and no vendor accounted for over
5% of the Company's import purchases. Typical lead times for the Company in
making purchases from its vendors range from approximately one month for items
purchased domestically versus up to six months for merchandise purchased
overseas.

     All merchandise for its stores is received from vendors at the Company's
central warehouse and distribution facility in Suffern, New York, where it is
inspected, allocated and shipped to its stores. The Company uses its strong
relationships with vendors to lower its operating costs by shifting freight and
insurance costs to the vendors and typically requires them to provide ancillary
services. For example, over 90% of the Company's merchandise is pre-ticketed by
vendors and over half of the hanging garments purchased by the Company are
delivered on floor-ready hangers. In addition, 45% of its merchandise receipts
are pre-packaged for distribution to stores, which allows for efficiencies in
its distribution center by using cross-docking.

     The Company generally does not warehouse store merchandise, but distributes
it promptly to stores. There are instances where the Company does hold basic
merchandise for future distribution. Turnaround time between the receipt of
merchandise from the vendor and shipment to the stores is usually three days or
less, and shipments are made daily to most stores, maintaining the freshness of
merchandise. Because of such frequent shipments, the stores do not require
significant storage space.

Store Locations and Properties

     As of July 31, 2004, the Company operated 776 stores in 45 states and the
District of Columbia. 492 of the stores were conveniently located in strip
centers and 225 stores were located in outlet centers. During fiscal 2004, no
store accounted for as much as 1% of the Company's total sales. The table below
indicates the type of shopping facility in which the stores were located:

<TABLE>
<CAPTION>
                                                          Dress Barn
                                             Dress Barn      Woman      Combo
             Type of Facility                  Stores       Stores     Stores   Total
------------------------------------------   ----------   ----------   ------   -----
<S>                                              <C>          <C>        <C>    <C>
Strip Shopping Centers                           105          26         361    492
Outlet Malls and Outlet Strip Centers             47          22         156    225
Free Standing, Downtown and Enclosed Malls        26           5          28     59(1)

Total                                            178          53         545    776
</TABLE>

(1)  Includes 29 downtown locations


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     The table on the following page indicates the states in which the stores
operating on July 31, 2004 were located, and the number of stores in each state:

<TABLE>
<CAPTION>
                                    Dress Barn    Combo
Location               Dress Barn      Woman     Stores
--------               ----------   ----------   ------
<S>                       <C>           <C>        <C>
Alabama                    --           --           7
Arizona                     1           --           9
Arkansas                   --           --           4
California                 17            2          31
Colorado                    3            1          10
Connecticut                 6            3          20
District of Columbia        2            1           1
Delaware                    2            1           3
Florida                    12            2          14
Georgia                     2                       20
Idaho                      --           --           3
Illinois                    3            1          29
Indiana                     4           --          11
Iowa                       --           --           6
Kansas                     --           --           6
Kentucky                    1           --           7
Louisiana                  --           --          10
Maine                       2            1          --
Maryland                    6            3          19
Massachusetts               7            2          25
Michigan                    7            1          22
Minnesota                  --           --          11
Mississippi                --           --           6
Missouri                    4            2          18
Nebraska                   --           --           4
Nevada                      1           --           5
New Hampshire              --           --           6
New Jersey                 17            8          24
New Mexico                 --           --           1
New York                   24            5          39
North Carolina              8            4          17
North Dakota               --           --           1
Ohio                        3           --          17
Oklahoma                    1           --           2
Oregon                      2            2           4
Pennsylvania               18            6          23
Rhode Island                1           --           3
South Carolina              4            1          11
Tennessee                   3            2          11
Texas                       5            1          42
Utah                       --           --           4
Vermont                    --           --           2
Virginia                    9            3          20
Washington                  2            1           5
West Virginia              --           --           2
Wisconsin                   1           --          10
Total                     178           53         545
                          ---          ---         ---
</TABLE>


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Operations and Management

     In considering new store locations, the Company's focus is on expanding in
its existing major trading and high-density markets, in certain cases seeking
downtown or urban locations and/or adding to a cluster of suburban or other
locations. Downtown and urban locations are considered based on pedestrian
traffic and daytime population, proximity to major corporate centers and
occupancy costs at the location, which are substantially higher than in suburban
locations. With respect to suburban and other locations the Company considers
the concentration of the Company's target customer base, the average household
income in the surrounding area and the location of the proposed store relative
to competitive retailers and anchor tenants in the shopping center. The Company
also seeks to expand into new markets. Within the specific strip or outlet
center, the Company evaluates the proposed co-tenants, the traffic count of the
existing center and the location of the store within the center. The Company's
real estate committee, which includes members of senior management, must approve
all new leases. The committee also receives input from field management.

     The Company's stores are designed to create a comfortable and pleasant
shopping environment for its customers. Merchandise and displays at all stores
are set up according to uniform guidelines and plans distributed by the Company.
The Company's merchandise is carefully arranged by lifestyle category (e.g.,
career, casual and weekend wear) for ease of shopping. The stores also have
private fitting rooms, drive aisles, appealing lighting, carpeting, background
music and centralized cashier desks. Strategically located throughout the stores
are "lifestyle" posters showing the customer models wearing outfits coordinated
from among the stores' fashion offerings. The Company's interior graphics and
racktop signs are designed to provide for a more open and easier to shop
environment.

     All stores are directly managed and operated by the Company. The store
manager staffs each store with at least one sales associate during non-peak
hours, with additional sales associates added as needed at peak hours. The sales
associates perform all store operations, from receiving and processing
merchandise and arranging it for display, to assisting customers. Each store
manager reports to a District Sales Manager who, in turn, reports to a Regional
Sales Manager. Dress Barn employs 10 Regional Sales Managers and approximately
100 District Sales Managers. District Sales Managers visit each store on a
regular basis to review merchandise levels and presentation, staff training and
personnel performance, expense control, security, cleanliness and adherence to
Company operating procedures.

     The Company motivates its sales associates through promotion from within,
creative incentive programs, competitive wages and the opportunity for bonuses.
Sales associates compete in a broad variety of Company-wide contests involving
sales goals and other measures of performance. The contests are designed to
boost store profitability, create a friendly competitive atmosphere among
associates and offer opportunities for additional compensation. Management
believes that Dress Barn's creative incentive programs provide an important tool
for building cohesive and motivated sales teams at each store. The Company
utilizes comprehensive training programs at the store level in order to ensure
that the customer will receive friendly and helpful service. They include (i)
its DVDi LMS training system (ii) ongoing DVDi training and (iii) one-on-one
training of sales associates by store managers and district sales managers.

     Almost 70% of the Company's sales in fiscal 2004 and fiscal 2003 were paid
for by credit card, with the remainder being paid by cash or check. Consistent
with the other credit cards it accepts, the Company assumes no credit risk with
respect to the Dress Barn credit card but pays a percentage of sales as a
service charge to the third party financial institution. As of July 31, 2004,
the number of cardholders was approximately 2.7 million. The average dollar
value per transaction on the Dress Barn credit card during fiscal 2004 was
approximately 50% greater than the average dollar value of all other
transactions, versus 30% in fiscal 2003 and represented approximately 20% of the
Company's sales in fiscal 2004. The increase in the average dollar value per
transaction in 2004 was due to higher units per transaction.

     Virtually all of the Company's stores are open seven days a week. Stores
located in strip and outlet centers conform to the hours of other stores in the
center and are open most evenings.


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Advertising and Marketing

     As the lifestyles of its customers changed, the Company determined it was
more cost effective to utilize direct mail to communicate its promotions and
merchandise focuses to its customers, supplemented with selected "image"
advertising in national magazines. The Company has increased and continues to
increase its direct mail program. The Company utilizes a customer relationship
management ("CRM") system to track customer transactions and utilizes it as a
basis for its direct mail efforts. The Company believes focused, targeted
marketing utilizing direct mail is the most effective means to reach and build
relationships with its customers as well as drive customers into its stores. The
marketing department sends "Fashion Flashes" to the stores which contain full
color pictures of coordinated merchandise groups and facts about the products,
boosting employee product knowledge.

     The Company also utilizes select national advertising, including major
lifestyle magazines, to build its brand image as a primary source for a
lifestyle-oriented, fashionable, value-priced assortment of career and casual
fashions tailored to its customers' needs. The national ads are designed to
create awareness of the dressbarn'r' brand and increase the loyalty of our
existing customers by making them feel better about dressbarn'r' and its brand
philosophy.

Management Information Systems

     The Company has made a significant investment in technology to improve
sales, gain efficiencies and reduce operating costs. Dress Barn has a management
information system, which integrates all major aspects of the Company's
business, including sales, distribution, purchasing, inventory control,
merchandise planning and replenishment, and financial systems. All stores
utilize a point-of-sale ("POS") system with price look-up capabilities for both
inventory and sales transactions. The Company installed a new wide area network
in fiscal 2004. In addition, the Company began a rollout of a new POS system
with many enhanced features to all its stores in the fourth quarter of fiscal
2004, which was completed in the first quarter of fiscal 2005. This rollout
included the installation of a wide area network. This new system allows the
Company to add functionality to its POS system with the ability to capture debit
card transactions, centralize credit authorizations, improve promotion
transactions handling, and speed up customer transaction time. In addition, the
Company began to sell gift cards and use merchandise credit cards in the first
quarter of fiscal 2005.

     The Company's merchandising system tracks merchandise from the inception of
the purchase order, through receipt at the distribution center, through the
distribution planning process, and ultimately to the point of sale. To monitor
the performance of various styles, management reviews sales and inventory
levels, organized by department, class, vendor, style, color and store. The
system enables the Company to identify slow-moving merchandise to mark down or
efficiently transfer to stores selling such items more rapidly. The Company
analyzes historical hourly and projected sales trends to efficiently schedule
store personnel, minimizing labor costs while allowing for a high level of
sales. The Company believes that investments in technology enhance operating
efficiencies and position Dress Barn for future growth. The Company utilizes a
DVDi Learning Management System (LMS), where sales associates are able to take
tests for consistency across all of its stores. The LMS system was part of the
new back-office store system which also included automated time and attendance,
quicker processing of credit card applications and integrated email and
messaging.

Trademarks

     The Company has previously been issued U.S. Certificates of Registration of
Trademark for the operating names of its stores and its major private label
merchandise (Dress Barn'r' and Westport Ltd.'r'). During fiscal 2003, the
Company filed applications to register a number of additional trademarks, the
most significant being dressbarn'r' and its new logo. In fiscal 2004, the
dressbarn'r' trademark registration was completed. The Company believes its
Dress Barn'r' and dressbarn'r' trademarks are materially important to its
business. The Company operates a small number of outlet stores under the names
Westport Ltd.'r' and SBX'r'.


                                       11





<Page>



Employees

     As of July 31, 2004, the Company had approximately 8,500 employees of whom
approximately 5,000 worked part time. As of July 26, 2003, the Company had
approximately 9,100 employees of whom approximately 5,500 worked part time. The
decrease in employees from fiscal 2003 was the result of fewer part time
employees utilized by the Company. A number of temporary employees are usually
added during the peak selling periods. None of the Company's employees are
covered by any collective bargaining agreement. The Company considers its
employee relations to be good.

Seasonality

     The Company's sales are evenly split between its Fall and Spring seasons.
Though the Company does not consider its business seasonal, it has historically
experienced substantially lower earnings in its second fiscal quarter ending in
January than during its other three fiscal quarters, reflecting the intense
promotional atmosphere that has characterized the holiday shopping season in
recent years. In addition, the Company's quarterly results of operations may
fluctuate materially depending on, among other things, increases or decreases in
comparable store sales, adverse weather conditions, shifts in timing of certain
holidays, the timing of new store openings, net sales contributed by new stores,
and changes in the Company's merchandise mix.

Forward-Looking Statements and Factors Affecting Future Performance

     This Annual Report on Form 10-K/A contains within the "Business" section,
the "Properties" section, the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section and elsewhere, forward looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. These statements reflect the Company's current views with
respect to future events and financial performance. The Company's actual results
of operations and future financial condition may differ materially from those
expressed or implied in any such forward looking statements as a result of
certain factors set forth in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section below.

     The women's retail apparel industry is subject to rapid change and is
highly competitive. The industry is subject to changes in the retail environment
which may be affected by overall economic conditions, women's apparel fashions,
demographics, macroeconomic factors such as consumer confidence that may affect
the level of spending for the types of merchandise sold by the Company, as well
as other factors. The Company's sales and results of operations may also be
affected by unusual weather patterns in areas where the Company has its greatest
concentration of stores. The level of occupancy costs, merchandise, labor and
other costs will affect future results of operations.

     The Company competes primarily with department stores, specialty stores,
discount stores, mass merchandisers and off-price retailers, many of which have
substantially greater financial, marketing and other resources than the Company.
Many department stores offer a broader selection of merchandise than the
Company. In addition, many competitors continue to be promotional and reduce
their selling prices, and in some cases are expanding into markets in which the
Company has a significant market presence. The Company's sales and results of
operations may also be affected by closeouts and going-out-of-business sales by
other women's apparel retailers. The Company may face periods of strong
competition in the future, which could have an adverse effect on its financial
results.

     The Company's continued success is largely dependent on the efforts and
abilities of its senior management team. Also, the continued success of the
Company will depend upon a number of factors, including the identification of
suitable markets and sites for new stores, negotiation of leases on acceptable
terms, construction or renovation of sites in a timely manner at acceptable
costs, and maintenance of the productivity of the existing store base. In
addition, the Company must be able to hire, train and retain competent managers
and personnel and manage the systems and operational components of its growth.
The failure of the Company to open new Combo stores on a timely basis, attract
qualified management and personnel or appropriately adjust operational systems
and procedures would adversely affect the Company's future operating results. In
addition, there can be no assurance that the opening of new Combo stores in
existing markets will not have an adverse effect on sales at existing stores in
these markets. There can be no assurance that the Company will be able to


                                       12





<Page>



successfully implement its growth strategy of continuing to introduce the Combo
stores or to maintain its current growth levels.

     Failure of the Company to maintain its existing customer base or the
failure to attract new customers may negatively impact sales and profits.

     The Company's success also depends in part on its ability to anticipate and
respond to changing merchandise trends and consumer preferences in a timely
manner. Accordingly, any failure by the Company to anticipate, identify and
respond to changing fashion trends could adversely affect consumer acceptance of
the merchandise in the Company's stores, which in turn could adversely affect
the Company's business and its image with its customers. If the Company
miscalculates either the market for its merchandise or its customers' purchasing
habits, it may be required to sell a significant amount of unsold inventory at
below average markups over the Company's cost, or below cost, which would have
an adverse effect on the Company's financial condition and results of
operations.

     The Company imports a significant portion of its merchandise from
manufacturers in Asia, the Middle East and Africa, among others. Importing
involves risks including potential disruptions resulting from economic and
political problems in countries from which merchandise is imported, and duties,
tariffs and quotas on imported merchandise. The Company's ability to manage the
importing of goods from overseas, their production, timing of deliveries and US
Customs-related compliance is an important component of its merchandising
strategy. Failure of the Company to manage its import activities would have an
adverse effect on the Company's financial condition and results of operations.
The effect of the expiration of quotas in January 2005 on the Company's result
of operations is uncertain.

     The Company relies upon its existing management information systems in
operating and monitoring all major aspects of the Company's business, including
sales, warehousing, distribution, purchasing, inventory control, merchandising
planning and replenishment, as well as various financial systems. Any disruption
in the operation of the Company's management information systems, or the
Company's failure to continue to upgrade, integrate or expend capital on such
systems as its business expands, would have a material adverse effect on the
Company. In addition, any disruption in the operations of the Company's
distribution center would have a material adverse effect on the Company's
business.

     The Company is committed to being more productive. The Company is planning
to continue to close or relocate underperforming stores and maintain tight cost
controls in all areas with a goal of increasing shareholder value. There can be
no assurance that the Company's strategy will result in a continuation of
revenue and profit growth. Future economic and industry trends that could impact
revenue and profitability remain difficult to predict.

ITEM 2. PROPERTIES

     The Company leases all its stores. Store leases generally have an initial
term ranging from 5 to 10 years with one or more 5-year options to extend the
lease. The table below, covering all stores operated by the Company on July 31,
2004, indicates the number of leases expiring during the period indicated and
the number of expiring leases with and without renewal options:

<TABLE>
<CAPTION>
                                     Leases      Number with      Number Without
Fiscal Years                        Expiring   Renewal Options   Renewal Options
-------------------                 --------   ---------------   ---------------
<S>                                    <C>           <C>               <C>
2005                                   143            80                63
2006                                   139           122                17
2007-2009                              363           319                44
2010 and thereafter                    131           118                13
                                       ---           ---               ---

Total                                  776           639               137
                                       ---           ---               ---
</TABLE>


                                       13





<Page>



     New store leases generally provide for a base rent of between $15 and $25
per square foot per annum. Most leases have formulas requiring the payment of a
percentage of sales as additional rent, generally when sales reach specified
levels. The Company's aggregate minimum rentals under operating leases in effect
at July 31, 2004, and excluding locations acquired after July 31, 2004, for
fiscal 2005 are approximately $92 million. In addition, the Company is also
responsible under its store leases for its pro rata share of maintenance
expenses and common charges in strip and outlet centers.

     Most of the store leases give the Company the right to terminate the lease
at little or no cost if certain specified sales volumes are not achieved. This
affords the Company greater flexibility to close underperforming stores. Usually
these provisions are operative only during the first few years of the lease.

     The Company's investment in new stores consists primarily of inventory,
leasehold improvements, fixtures and equipment. Dress Barn often receives tenant
improvement allowances from the landlords to offset these initial investments.
The Company's stores are typically profitable within the first 12 months of
operation.

     The Company leases its 510,000 square foot office and distribution center
in Suffern, New York from Dunnigan Realty, LLC, a wholly-owned subsidiary which
was formed solely to purchase, own and operate the entire Suffern Facility
including the portion occupied by the Company. The Suffern facility consists of
approximately 65 acres of land, with a current total of approximately 900,000
square feet of rentable distribution and office space, the majority of which is
occupied by the Company. The remainder of the rentable square footage is 100%
leased through 2012. The Company's lease with Dunnigan Realty, LLC expires in
2023, which coincides with the term of the underlying mortgage that Dunnigan
Realty, LLC utilized to finance the purchase of the Suffern facility. The
Dunnigan Realty, LLC mortgage loan (the "mortgage") is collateralized by a
mortgage lien on the Suffern facility. Payments of principal and interest on the
mortgage, which is a 20-year fully amortizing loan with a fixed interest rate of
5.33%, net of closing costs, are due monthly through July 2023. Dunnigan Realty,
LLC receives rental income and reimbursement for taxes and common area
maintenance charges from the Company and two additional tenants that occupy the
Suffern facility that are not affiliated with the Company. The rental income
from the other tenants is shown as "other income" on the Company's Consolidated
Statements of Earnings. All intercompany transactions are eliminated in
consolidation.

ITEM 3. LEGAL PROCEEDINGS

     On May 18, 2000, Alan M. Glazer, GLZR Acquisition Corp. and Bedford Fair
Industries, Ltd. commenced an action against the Company in the Superior Court
of Connecticut, Stamford Judicial District, seeking compensatory and punitive
damages in an unspecified amount for alleged unfair trade practices and alleged
breach of contract arising out of negotiations for the acquisition of the
Bedford Fair business which the Company never concluded.

     On April 10, 2003, after a trial in the Superior Court of Connecticut,
Waterbury District, a jury returned a verdict of $30 million of compensatory
damages in the lawsuit described above. The court, on July 7, 2003, entered a
judgment of approximately $32 million in compensatory damages and expenses,
which is subject to post-judgment interest. The trial court ruled against the
plaintiffs' motion for any punitive damages or pre-judgment interest. The
Company continues to strongly believe there is no merit in the jury verdict and
both sides have appealed. The appeal is expected to be heard by the Supreme
Court of the State of Connecticut towards the end of calendar 2004.

     In addition to the original litigation charge of $32 million, the Company
accrued interest through July 31, 2004 of $3.3 million. The amount that was
deposited into escrow was dictated by the court to include the $35.3 million
judgment and accrued interest as well as six months of prefunded interest ($1.5
million) and an additional 5% of the amount due (including interest) at the time
of the funding of such escrow (5% of $36.8 million or $1.8 million), totaling
$38.6 million which is recorded in restricted cash on the Company's balance
sheet at July 31, 2004.

     On March 17, 2003 the Company was served with a class action lawsuit in
California. This class action lawsuit is a wage and hour case and was brought on
behalf of all Managers, Assistant Managers and Associate Managers who worked for
Dress Barn in California. The complaint alleges that Dress Barn improperly
classified these employees as "salaried exempt." The Company is in settlement
discussions with the plaintiff. Whether or not the settlement is effected, the
Company does not expect the outcome to have a material adverse effect.


                                       14





<Page>



     Except for the above cases, there are no material pending legal
proceedings, other than ordinary routine litigation incidental to the business,
to which the Company or any of its subsidiaries is a party or of which any of
their property is the subject.

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

     No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year.


                                       15





<Page>



ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth the name, age and position with the Company
of the Executive Officers of the Registrant:

<TABLE>
<CAPTION>
Name              Age   Positions
----              ---   ---------
<S>                <C>  <C>
Elliot S. Jaffe    78   Chairman of the Board,
                        Co-Founder and Director
David R. Jaffe     45   President,
                        Chief Executive Officer and Director
Vivian Behrens     51   Senior Vice President and Chief
                        Marketing Officer
Armand Correia     58   Senior Vice President and Chief
                        Financial Officer
Keith Fulsher      50   Senior Vice President
                        And General Merchandise Manager
Eric Hawn          54   Senior Vice President
                        Store Operations
Elise Jaffe        49   Senior Vice President
                        Real Estate
</TABLE>

     Mr. Elliot S. Jaffe was Chief Executive Officer of the Company from 1966
until February 2002.

     Mr. David R. Jaffe became President and Chief Executive Officer in February
2002. Previously he had been Vice Chairman, Chief Operating Officer and a member
of the Board of Directors since September 2001. He had been Vice Chairman since
February 2001. He joined the Company in 1992 as Vice President-Business
Development and became Senior Vice President in 1995 and Executive Vice
President in 1996. Mr. Jaffe is the son of Elliot S. and Roslyn S. Jaffe,
Secretary, Treasurer and Director of the Company.

     Ms. Vivian Behrens started with the Company in September 2002 as Senior
Vice President, Marketing. Previously, Ms. Behrens was President of Vivian B
Consulting, a marketing consultant to several retail and consumer product
companies. She was Chief Executive Officer of Posh & Sticks, Ltd., a consumer
products multi-channel retailer, from 1999 to 2000. From 1998 to 1999 she was
Senior Vice President-Marketing of the Foot Locker Division of Venator, Inc.
From 1994 to 1997 she was Vice President-Marketing of Charming Shoppes, Inc.
Previously she held senior marketing positions at Limited Inc. and Avon
Products, Inc. and was a member of the Company's Board of Directors from 2001 to
2002.

     Mr. Armand Correia has been Senior Vice President and Chief Financial
Officer of the Company since 1991.

     Mr. Keith Fulsher has been with the Company for over ten years, serving as
Merchandise Manager, Sportswear, before being promoted to Senior Vice President
and General Merchandise Manager in February 2002. Previously he was at Macy's
for 18 years, leaving as Group Vice-President of Better Sportswear.

     Mr. Eric Hawn has been Senior Vice President of the Company since 1989.

     Ms. Elise Jaffe has been Senior Vice President of the Company since January
1, 1995. She previously was Vice President. Ms. Jaffe is the daughter of Elliot
S. and Roslyn S. Jaffe.

     The Company's officers are elected by the Board of Directors for one-year
terms and serve at the discretion of the Board of Directors.


                                       16





<Page>



                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK, RELATED SECURITY HOLDER MATTERS
and ISSUER PURCHASES OF EQUITY SECURITIES

Market Prices of Common Stock

     The Common Stock of The Dress Barn, Inc. (the "Company") is traded
over-the-counter on the NASDAQ National Market System under the symbol DBRN.

     The Company's Board of Directors approved a 2-for-1 stock split in the form
of a 100% stock dividend on the Company's issued and outstanding common stock in
May 2002. The stock split was distributed on May 31, 2002 to shareholders of
record on May 17, 2002. All historic share and per share information contained
in this report have been adjusted to reflect the impact of the stock split.

     The table below sets forth the high and low bid prices as reported by
NASDAQ for the last eight fiscal quarters. These quotations represent prices
between dealers and do not include retail mark-ups, mark-downs or other fees or
commissions and may not represent actual transactions.

<TABLE>
<CAPTION>
                   Fiscal 2004        Fiscal 2003
                    Bid Prices        Bid Prices
                 ---------------   ----------------
Fiscal Period     High      Low     High      Low
--------------   ------   ------   ------   -------
<S>              <C>      <C>      <C>      <C>
First Quarter    $14.53   $12.30   $15.90   $11.06
Second Quarter   $15.86   $13.90   $16.19   $13.09
Third Quarter    $18.72   $14.74   $15.00   $12.43
Fourth Quarter   $18.10   $15.56   $15.23   $12.20
</TABLE>

Number of Record Holders

     The number of record holders of the Company's common stock as of October 1,
2004 was approximately 2,100.

Dividend Policy

     The Company has never paid cash dividends on its common stock. Payment of
dividends is within the discretion of the Company's Board of Directors.

Securities Authorized for Issuance Under Equity Compensation Plans

     The following table summarizes our equity compensation plans as of July 31,
2004.

<TABLE>
<CAPTION>
                                                                                                   Number of securities
                                                                                                 remaining available for
                                                                                                  future issuance under
                                                                                                   equity compensation
                                                 Number of securities to     Weighted average        plans (excluding
                                                 be issued upon exercise    exercise price of    securities reflected in
                    Plan Category                 of outstanding options   outstanding options         column (a))
------------------------------------------------------------------------------------------------------------------------
                                                           (a)                     (b)                     (c)
<S>                                                     <C>                       <C>                   <C>
Equity compensation plans approved by security
   holders                                              2,673,979                 $10.46                3,530,616
Equity compensation plans not approved by
   security holders                                            --                     --                       --
                                                        ---------                 ------                ---------
Total                                                   2,673,979                 $10.46                3,530,616
                                                        =========                 ======                =========
</TABLE>


                                       17





<Page>



Issuer Purchases of Equity Securities(1)
Quarter Ending July 31, 2004

<TABLE>
<CAPTION>
                                                          Total Number of       Maximum Number
                                                        Shares Purchased      of Shares that May
                                                        as Part of Publicly   Yet Be Purchased
                Total Number of    Average Price Paid    Announced Plans or   Under the Plans or
   Period       Shares Purchased        per Share             Programs            Programs (2)
-------------------------------------------------------------------------------------------------
<S>                  <C>                 <C>                   <C>                 <C>
May 1, 2004--
May 31, 2004         19,700              $15.87                19,700              2,881,725
</TABLE>

(1) The Company has a $75 million Stock Buyback Program (the "Program") which
was originally announced on April 5, 2001. Under the Program, the Company may
repurchase its shares from time to time, either in the open market or through
private transactions, whenever it appears prudent to do so. The Program has no
expiration date.

(2) Based on the closing price of $16.75 at July 30, 2004.

Item 6. Selected Financial Data

In thousands, except earnings per share and store operating data

     The following selected financial data is derived from the consolidated
financial statements of The Dress Barn Inc. (the "Company") and have been
restated to reflect adjustments to the original Form 10-K that are further
discussed in "Explanatory Note" in the forepart of this Form 10-K/A and in Note
2: "Restatement of Financial Statements" under Notes to Consolidated Financial
Statements included in Item 15, "Exhibits and Financial Statement Schedule" of
this Form 10-K/A. The data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the section "Certain Additional Risks and Uncertainties" in the
Company's Annual Report on Form 10-K/A and the Company's consolidated financial
statements and notes thereto.


                                       18





<Page>



Dollars in thousands except per share information

<TABLE>
<CAPTION>
                                                     Fiscal Year Ended
                                   -----------------------------------------------------
                                   July 31,   July 26,   July 27,   July 28,   July 29,
                                     2004       2003       2002       2001       2000
                                   -----------------------------------------------------
<S>                                <C>        <C>        <C>        <C>        <C>
   Net sales                       $754,903   $707,121   $717,136   $695,008   $656,174
   Cost of sales, including
      occupancy and buying costs    472,198    451,579    452,216    440,817    419,013
                                   -----------------------------------------------------
   Gross profit                     282,705    255,542    264,920    254,191    237,161

   Selling, general and
      administrative expenses       212,477    194,005    188,056    182,598    169,817
   Depreciation & amortization       23,197     22,262     24,631     25,146     18,803
   Litigation charge                     --     32,000         --         --         --
                                   -----------------------------------------------------

   Operating income                  47,031      7,275     52,233     46,447     48,541

   Interest income                    2,204      3,332      5,458      8,949      7,667
   Interest expense                  (5,288)      (164)        --         --         --
   Other income                       1,526        779         --         --         --
                                   -----------------------------------------------------

      Earnings before
         income taxes                45,473     11,222     57,691     55,396     56,208

   Income taxes                      14,541      4,039     20,769     20,219     20,516
                                   -----------------------------------------------------

      Net earnings                 $ 30,932   $  7,183   $ 36,922   $ 35,177   $ 35,692
                                   =====================================================

Earnings per share - basic (1)     $   1.05   $   0.23   $   1.01   $   0.96   $   0.94
                                   =====================================================
Earnings per share - diluted (1)   $   1.03   $   0.22   $   0.98   $   0.94   $   0.92
                                   =====================================================

Balance sheet data:
   Working capital                 $153,106   $126,138   $234,576   $201,241   $162,270
   Total assets                    $489,316   $449,787   $487,838   $434,082   $408,803
   Long-term debt                  $ 31,988   $ 33,021   $      0   $      0   $      0
   Shareholders' equity            $252,958   $217,421   $325,642   $289,005   $252,113

Percent of net sales:
   Cost of sales, including
      occupancy and buying costs       62.6%      63.9%      63.1%      63.4%      63.9%
   Gross profit                        37.4%      36.1%      36.9%      36.6%      36.1%
   Selling, general and
      Administrative expenses          28.1%      27.4%      26.2%      26.3%      25.9%
   Litigation charge                     --        4.5%        --         --         --
   Operating income                     6.2%       1.0%       7.3%       6.7%       7.4%
   Net earnings                         4.1%       1.0%       5.1%       5.1%       5.4%
</TABLE>

(1) All earnings per share amounts reported above reflect the effect of the
2-for-1 stock split, distributed May 31, 2002.


                                       19





<Page>



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

     This Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the financial
statements and accompanying notes appearing elsewhere in this report. As used in
this report, the terms "fiscal 2004," "fiscal 2003," and "fiscal 2002" refer to
our fiscal years ended July 31, 2004, July 26, 2003, and July 27, 2002,
respectively. Fiscal 2004 consisted of 53 weeks. Fiscal 2003 and fiscal 2002
consisted of 52 weeks. The term "fiscal 2005" refers to our fiscal year that
will end on July 30, 2005. For comparison purposes, it is more meaningful for
certain items to use fiscal 2004's results less the extra week, or the fifty-two
week period ended July 24, 2004 ("fifty-two week" period or "fifty-two weeks").

Restatement of Financial Statements

     On February 7, 2005, the Office of the Chief Accountant of the Securities
and Exchange Commission ("SEC") issued a letter to the American Institute of
Certified Public Accountants expressing its views regarding certain operating
lease-related accounting issues and their application under accounting
principles generally accepted in the United States of America ("GAAP"). In light
of this letter, the Company's management initiated a review of its lease
accounting and determined that its then-current method of accounting for
leasehold improvements funded by landlord incentives or allowances under
operating leases (construction allowances) and its then-current method of
calculating straight-line rent expense for its operating leases was not in
accordance with GAAP. As a result, the Company restated its consolidated
financial statements for each of the fiscal years ended July 31, 2004, July 26,
2003, and July 27, 2002 in the Annual Report on Form 10K/A.

     The Company had historically accounted for construction allowances as
reductions to the related leasehold improvement asset on the consolidated
balance sheets and presented construction allowances received as a reduction in
capital expenditures in investing activities on the consolidated statements of
cash flows. Management determined that Financial Accounting Standards Board
("FASB") Technical Bulletin No. 88-1, "Issues Relating to Accounting for
Leases," requires these allowances to be recorded as a deferred rent liability
on the consolidated balance sheets and allowances received as a component of
operating activities on the consolidated statements of cash flows. Additionally,
this adjustment results in a reclassification of the deferred rent amortization
to increase "Depreciation and amortization expenses" and a corresponding
decrease to "Cost of sales including occupancy and buying costs" on the
consolidated statements of earnings.

     The Company had historically recognized its straight-line rent expense for
its operating leases over the lease term generally commencing with the opening
date for the store, which generally coincided with the commencement of the lease
payments per the lease. The store opening date also coincided with the
commencement of business operations, which corresponds to the intended use of
the property. Management re-evaluated FASB Technical Bulletin No. 85-3,
"Accounting for Operating Leases with Scheduled Rent Increases," and determined
that the lease term should commence on the date the Company takes possession of
the leased space for construction purposes, which is generally two months prior
to a store opening date. Furthermore, the Company determined that it should
recognize rent expense on a straight-line basis for rent escalations over the
appropriate period, including option periods where failure to exercise such
options would result in an economic penalty. Excluding tax impacts, the
correction of this accounting required the Company to record additional deferred
rent in "Other accrued expenses" and "Deferred rent" and to adjust "Retained
earnings" on the consolidated balance sheets as well as to correct amortization
in "Costs of sales including occupancy and buying costs" and "Depreciation and
amortization" on the consolidated statements of earnings for each of the three
years in the period ended July 31, 2004. In addition, the Company corrected
certain other balance sheet classification errors which resulted in an increase
to "Property and equipment" and a corresponding increase to beginning "Retained
earnings", which were included in the cumulative effect adjustment, related to
the reversal of an impairment reserve. The Company also reclassified premiums
paid upfront when entering into certain lease agreements that had been
classified as "Property and equipment" to "Other assets" in 2004 and 2003,
respectively. In addition, the Company reclassified its provision for
impairments and asset disposals from "Depreciation and amortization" to
"Selling, general and administrative" expenses. The cumulative effect of these
accounting corrections is a reduction to retained earnings of $11.9 million as
of the beginning of fiscal 2002 and decreases to earnings of $1.0 million and
$0.9 million for the fiscal years ended 2002 and 2003 and an increase of $0.8
million for fiscal year 2004, respectively.


                                       20





<Page>



     See Note 2 to the consolidated financial statements of this Report for a
summary of the significant effects of these restatements on the Company's
consolidated balance sheets as of July 31, 2004, and July 26 2003, as well as on
the Company's consolidated statements of earnings and cash flows for fiscal
years 2004, 2003, and 2002. The accompanying Management's Discussion and
Analysis gives effect to these corrections.

                               Management Overview

     This Management Overview section of Management's Discussion and Analysis of
Financial Condition and Results of Operations provides a high level summary of
the more detailed information elsewhere in this Report and an overview to put
this information in context. This section is also an introduction to the
discussion and analysis that follows. Accordingly, it necessarily omits details
that appear elsewhere in this Report. It should not be relied upon separately
from the balance of this Report.

     Management uses a number of key indicators of financial condition and
operating performance to evaluate the performance of our business, including the
following:

<TABLE>
<CAPTION>
                                            Fiscal Year Ended
                                     ------------------------------
                                     July 31,   July 26,   July 27,
                                       2004       2003       2002
                                     --------   --------   --------
<S>                                    <C>        <C>        <C>
Net sales growth                         6.8%      (1.4%)      3.2%
Comparable store sales growth            1.9%      (4.6%)     (1.9%)
Merchandise margins                     55.1%      54.7%      54.5%
Square footage growth                    2.9%         4%         6%
Total store count                        776        772        754
Diluted earnings per share             $1.03      $0.22      $0.98
S,G & A as a percentage of sales        28.1%      27.4%      26.2%
Capital expenditures (in millions)     $35.8      $68.0      $33.0
</TABLE>


                                       21





<Page>



     The Company's methodology for determining same store sales is calculated
based on the sales of stores open throughout the full period and throughout the
full prior period (including stores relocated within the same shopping center
and stores with minor square footage changes). If a single-format store is
converted into a Combo store, the additional sales are not included in the
calculation of same store sales. The determination of which stores are included
in the same store sales calculation only changes at the beginning of each fiscal
year except for stores that close during the fiscal year which are excluded from
same store sales beginning with the fiscal month the store actually closes.

     The Company includes in its cost of sales line item all costs of
merchandise (net of purchase discounts and vendor allowances), freight on
inbound, outbound and internally transferred merchandise, merchandise
acquisition costs, (primarily commissions and import fees), all occupancy costs
excluding depreciation and all costs associated with their buying and
distribution functions. The Company's cost of sales and gross profit may not be
comparable to those of other entities, since some entities include all costs
related to their distribution network and all buying and occupancy costs in
their cost of sales, while other entities such as the Company exclude a portion
of these expenses from cost of sales and include them in selling, general and
administrative expenses or depreciation.

Forward-Looking Statements

     Sections of this Annual Report, including this Management's Discussion and
Analysis of Financial Condition and Results of Operations, contain various
forward-looking statements, made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The forward-looking statements
reflect the Company's current expectations concerning future events, and actual
results may differ materially from current expectations or historical results.
Any such forward-looking statements are subject to various risks and
uncertainties, including failure by the Company to predict accurately client
fashion preferences; decline in the demand for merchandise offered by the
Company; competitive influences; changes in levels of store traffic or consumer
spending habits; effectiveness of the Company's brand awareness and marketing
programs; general economic conditions or a downturn in the retail industry; the
inability of the Company to locate new store sites or negotiate favorable lease
terms for additional stores or for the expansion of existing stores; a
significant change in the regulatory environment applicable to the Company's
business; the impact of quotas, and the elimination thereof; an increase in the
rate of import duties or export quotas with respect to the Company's
merchandise; financial or political instability in any of the countries in which
the Company's goods are manufactured; the impact of health concerns relating to
severe infectious diseases, particularly on manufacturing operations of the
Company's vendors in Asia and elsewhere; acts of war or terrorism in the United
States or worldwide; work stoppages, slowdowns or strikes; the inability of the
Company to hire, retain and train key personnel, and other factors set forth in
the Company's filings with the SEC. The Company does not assume any obligation
to update or revise any forward-looking statements at any time for any reason.

Critical Accounting Policies and Estimates

     The Company's accounting policies are more fully described in Note 1 of the
Notes to Consolidated Financial Statements. Management's discussion and analysis
of the Company's financial condition and results of operations are based upon
the Company's consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires the Company to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, income taxes and related disclosures of
contingent assets and liabilities. On an ongoing basis, the Company evaluates
estimates, including those related primarily to merchandise inventories,
investments, long-lived assets, insurance reserves, income taxes, sales return
allowance, stock based employee compensation, claims and contingencies and
litigation. The Company bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. Management believes the following accounting
principles are the most critical because they involve the most significant
judgments, assumptions and estimates used in preparation of the Company's
financial statements.


                                       22





<Page>



Revenue Recognition

     While the Company's recognition of revenue does not involve significant
judgment, revenue recognition represents an important accounting policy of the
Company. As discussed in Note 1 to the Consolidated Financial Statements, the
Company recognizes sales at the point of purchase when the customer takes
possession of the merchandise and pays for the purchase, generally with cash or
credit card. Sales from purchase made with gift certificates and layaway sales
are also recorded when the customer takes possession of the merchandise. Gift
certificates and merchandise credits are recorded as a liability until they are
redeemed. The Company has reserved for estimated sales returns.

Merchandise Inventories

     The Company's inventory is valued using the retail method of accounting and
is stated at the lower of cost, on a First In First Out (FIFO) basis, or market.
Under the retail inventory method, the valuation of inventory at cost and
resulting gross margin are calculated by applying a calculated cost to retail
ratio to the retail value of inventory. The retail inventory method is an
averaging method that has been widely used in the retail industry due to its
practicality. The Company includes in the cost of sales line item all costs of
merchandise (net of purchase discounts and vendor allowances), freight on
inbound, outbound and internally transferred merchandise, merchandise
acquisition costs, primarily commissions and import fees, all occupancy costs
excluding depreciation and all costs associated with their buying and
distribution functions. Inherent in the retail method are certain significant
management judgments and estimates including, among others, initial merchandise
markup, markdowns and shrinkage, which significantly impact the ending inventory
valuation at cost as well as the resulting gross margins. Physical inventories
are conducted in January and July to calculate actual shrinkage and inventory on
hand. Estimates are used to charge inventory shrinkage for the first and third
fiscal quarters of the fiscal year. The Company continuously reviews its
inventory levels to identify slow-moving merchandise and broken assortments,
using markdowns to clear merchandise. A provision is recorded to reduce the cost
of inventories to its estimated net realizable value. Consideration is given to
a number of quantitative factors, including anticipated subsequent markdowns and
aging of inventories. To the extent that actual markdowns are higher or lower
than estimated, the Company's gross margins could increase or decrease and,
accordingly, affect its financial position and results of operations. A
significant variation between the estimated provision and actual results could
have a substantial impact on the Company's results of operations.

Impairment of Long-lived Assets

     The Company primarily invests in property and equipment in connection with
the opening and remodeling of stores. When facts and circumstances indicate that
the carrying values of such long-lived assets may be impaired, an evaluation of
recoverability is performed by comparing the carrying values of the assets to
projected future cash flows, in addition to other quantitative and qualitative
analyses. Upon indication that the carrying values of such assets may not be
recoverable, the Company recognizes an impairment loss as a charge against
current operations. Property and equipment assets are grouped at the lowest
level for which there are identifiable cash flows when assessing impairment.
Cash flows are identified at the individual store level. Judgments made by the
Company related to the expected useful lives of long-lived assets and the
ability of the Company to realize undiscounted cash flows in excess of the
carrying amounts of such assets are affected by factors such as the ongoing
maintenance and improvements of the assets, changes in economic conditions and
changes in operating performance. As the Company assesses the ongoing expected
cash flows and carrying amounts of its long-lived assets, these factors could
cause the Company to realize material impairment charges. In addition, the
Company regularly evaluates its computer-related and other assets and may
accelerate depreciation over the revised useful life if the asset is no longer
in use or has limited future value. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation or amortization are
removed from the accounts, and any resulting gain or loss is reflected in income
for that period.


                                       23





<Page>



Insurance Reserves

     The Company uses a combination of insurance and self-insurance mechanisms
to provide for the potential liabilities for workers' compensation and employee
healthcare benefits. Liabilities associated with the risks that are retained by
the Company are estimated, in part, by considering historical claims experience,
demographic factors, severity factors and other actuarial assumptions. Such
liabilities are capped through the use of stop loss contracts with insurance
companies. The estimated accruals for these liabilities could be significantly
affected if future occurrences and claims differ from these assumptions and
historical trends. As of July 31, 2004 and July 29, 2003, these reserves were
$5.6 million and $5.4 million, respectively, and were included in "Other accrued
expenses" on the consolidated balance sheets.

Claims and Contingencies

     The Company is subject to various claims and contingencies related to
insurance, taxes and other matters arising out of the normal course of business.
The Company is self-insured for expenses related to its employee medical and
dental plans, and its worker's compensation plan, up to certain thresholds.
Claims filed, as well as claims incurred but not reported, are accrued based on
management's estimates, using information received from plan administrators,
historical analysis, and other relevant data. The Company has stop-loss
insurance coverage for individual claims in excess of $250,000. The Company
accrues its estimate of probable settlements of Federal and State tax audits. At
any one time, many tax years are subject to audit by various taxing
jurisdictions. The results of these audits and negotiations with taxing
authorities may affect the ultimate settlement of these issues. The Company
believes its accruals for claims and contingencies are adequate based on
information currently available, however, it is possible that actual results
could significantly differ from the recorded accruals for claims and
contingencies.

Litigation

     The Company is subject to various claims and contingencies relating to
litigation arising out of the normal course of business. If the Company believes
the likelihood of an adverse legal outcome is probable and the amount is
estimable it accrues a liability in accordance with FASB Statement No. 5,
"Accounting for Contingencies". The Company consults with legal counsel on
matters related to litigation and seeks input from other experts both within and
outside the Company with respect to matters in the ordinary course of business.
On July 7, 2003, after an unforeseen jury verdict, a trial court entered a final
judgment of approximately $32 million in compensatory damages and expenses
against the Company in a previously disclosed lawsuit. As a result, the Company
recorded a litigation charge of $32 million for the judgment, even though the
Company continues to strongly believe there is no merit in the jury verdict and
is vigorously pursuing an appeal. If upon appeal the entire judgment or a
portion thereof is modified, the Company will adjust its litigation accrual
accordingly (see note 6 of the Notes to the Consolidated Financial Statements
for additional information). In addition to the original litigation charge of
$32 million, the Company accrued interest through July 31, 2004 of $3.3 million.
In the fourth quarter of fiscal 2004, as required as part of the above legal
judgment the Company deposited $38.6 million in an escrow account, utilizing its
operating funds. Such amount was dictated by the court to include the $32
million judgment, the accrued interest of $3.3 million, six months of prefunded
interest totaling $1.5 million, and an additional 5% of the amount due
(including interest) of $1.8 million (5% of $36.8 million). The escrow account
is an interest bearing account and is included in restricted cash on the
Company's balance sheet. This escrow will terminate when a final non-appealable
judgment is entered. At that time, the amount of the judgment, if any, will be
paid to the plaintiff with any balance returned to the Company.

     On March 17, 2003 the Company was served with a class action lawsuit in
California. This class action lawsuit is a wage and hour case and was brought on
behalf of all Managers, Assistant Managers and Associate Managers who worked for
Dress Barn in California. The Company is in settlement discussions with the
plaintiff. Whether or not the settlement is effected, the Company does not
expect the outcome to have a material adverse effect.

Operating Leases

     The Company leases retail stores under operating leases. Most lease
agreements contain construction allowances, rent holidays, lease premiums, rent
escalation clauses and/or contingent rent provisions. For purposes of
recognizing incentives, premiums and minimum rental expenses on a straight-line
basis over the terms of the leases, the Company


                                       24





<Page>



uses the date of initial possession to begin amortization, which is generally
when the Company enters the space and begins to make improvements in preparation
of intended use.

     For construction allowances and rent holidays, the Company records a
deferred rent liability in "Other accrued expenses" and "Deferred rent" on the
consolidated balance sheets and amortizes the deferred rent over the terms of
the leases as reductions to "Cost of sales including occupancy and buying costs"
on the consolidated statements of earnings.

     For premiums paid upfront to enter a lease agreement, the Company records a
deferred rent asset in "Other assets" on the consolidated balance sheets and
then amortizes the deferred rent over the terms of the leases as additional rent
expense on the consolidated statements of earnings.

     For scheduled rent escalation clauses during the lease terms or for rental
payments commencing at a date other than the date of initial occupancy, the
Company records minimum rental expenses on a straight-line basis over the terms
of the leases on the consolidated statements of earnings.

     Certain leases provide for contingent rents, which are determined as a
percentage of gross sales in excess of specified levels. The Company records a
contingent rent liability in "Other accrued expenses" on the consolidated
balance sheets and the corresponding rent expense when specified levels have
been achieved or when management determines that achieving the specified levels
during the fiscal year is probable.

Inflation

     The Company does not believe that inflation has had a material effect on
the results of operations during the periods presented. However, there can be no
assurance that the Company's business will not be affected by inflation in the
future.

Income Taxes

     The Company does business in various jurisdictions that impose income
taxes. Management determines the aggregate amount of income tax expense to
accrue and the amount currently payable based upon the tax statutes of each
jurisdiction. This process involves adjusting income determined using generally
accepted accounting principles for items that are treated differently by the
applicable taxing authorities. Deferred tax assets and liabilities are reflected
on the Company's balance sheet for temporary differences that will reverse in
subsequent years. If different judgments had been made, the Company's tax
expense, assets and liabilities could be different.

Stock Split

     The Company's Board of Directors approved a 2-for-1 stock split in the form
of a 100% stock dividend on the Company's issued and outstanding common shares
in May 2002 (the "stock split"). The stock dividend was distributed on May 31,
2002 to shareholders of record on May 17, 2002. All historic share and per share
information contained in this report have been adjusted to reflect the impact of
the stock split.


                                       25





<Page>



Results of Operations

     The table below sets forth certain financial data of the Company expressed
as a percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>
                                                         Fiscal Year Ended
                                                  ------------------------------
                                                  July 31,   July 26,   July 27,
                                                    2004       2003       2002
                                                  --------   --------   --------
<S>                                                <C>        <C>        <C>
Net sales                                          100.0%     100.0%     100.0%
Cost of sales, including
   occupancy and buying costs                       62.6%      63.9%      63.1%
Selling, general and
   administrative expenses                          28.1%      27.4%      26.2%
Depreciation and amortization                        3.1%       3.1%       3.4%
Litigation charge                                     --        4.5%        --
Interest income                                      0.3%       0.5%       0.7%
Interest (expense)                                  -0.7%        --         --
Earnings before income taxes                         6.0%       1.6%       8.0%
Net earnings                                         4.1%       1.0%       5.1%
</TABLE>

Fiscal 2004 Compared to Fiscal 2003

     The results of the Company for fiscal 2004 were favorably impacted by the
extra reporting week. Net sales increased by 6.8% to $754.9 million for fiscal
2004, from $707.1 million in fiscal 2003. Net sales for the fifty-two week
period ended July 24, 2004, were $743.2 million, an increase of $36.1 million or
5.1% from the prior year. The increase from fiscal 2003 was due to a 1.9%
increase in same store sales, as well as a 2.9% increase in average store square
footage. Same store sales are the primary means most retailers use to evaluate
their sales performance. Same store sales represented approximately 86% of total
sales for fiscal 2004. The increase in store square footage was due to the
opening of 53 new stores, primarily combination Dress Barn/Dress Barn Woman
stores ("Combo stores"), which carry both Dress Barn and Dress Barn Woman
merchandise, offset in part by the square footage reduction from the closings of
47 underperforming stores. The Company had 776 stores in operation at July 31,
2004 compared to 772 stores in operation as of July 26, 2003.

     The sales increase was the result of several factors. More customer traffic
to its stores resulted in more customer transactions and higher sales associate
productivity and increased jewelry sales resulted in increased units sold per
transaction. These factors were partially offset by a slight decrease in the
average price per transaction due primarily to an increase in jewelry sales. The
Company believes the increase in the number of customer transactions was the
result of greater customer acceptance of the Company's more updated and
fashionable merchandise assortment and intensified marketing and store
presentation efforts.

     The Company's real estate strategy for fiscal 2005 is to continue opening
primarily Combo stores and converting its existing single-format stores into
Combo stores, while closing its underperforming locations. In addition, the
Company will target certain Combo stores to increase sales productivity by
enhancing the merchandise selection with an expanded "missy" presentation
through the layering on of new and expanded classifications. Store expansion
will focus on both expanding in the Company's existing major trading areas and
developing and expanding into new markets. For fiscal 2005 the Company is
currently projecting net square footage growth in the low single-digit
percentage range.


                                       26





<Page>



     Gross profit (net sales less cost of goods sold, including occupancy and
buying costs), increased 10.6% to $282.7 million, or 37.4% of net sales, in
fiscal 2004 from $255.5 million, or 36.1% of net sales in fiscal 2003. The
increase in gross profit as a percentage of net sales, is due to higher
maintained margins, the leverage on buying costs gained from increased same
store sales, and the leverage from the extra fifty-third week of net sales on
fixed occupancy costs. For the fifty-two weeks, gross profit was 36.6% of net
sales.

     Selling, general and administrative (SG&A) expenses increased by 9.5% to
$212.5 million, or 28.1% of net sales, in fiscal 2004 from $194 million or 27.4%
of net sales, in fiscal 2003. For the fifty-two weeks, SG&A increased by 8% to
$209.6 million, or 27.8% of net sales from $194 million, or 27.4% of net sales
last fiscal year. The increase of 40 basis points reflects lack of sales
leverage, increased marketing expense, a higher number of closed stores (47
stores closed in fiscal 2004 versus 28 stores closed in fiscal 2003) and related
write-offs ($4.9 million in fiscal 2004 versus $1.5 million in fiscal 2003), as
well as increased costs associated with impending Sarbanes-Oxley compliance and
training costs for the Company's new POS system. The Company continues to focus
on controlling its costs and enhancing productivity.

     Other income for fiscal 2004 increased 95.9% to $1.5 million from $0.8
million in fiscal 2003. The Company received a full year's rent versus a partial
year in fiscal 2003 by Dunnigan Realty, LLC from the unaffiliated tenants of the
Suffern facility. In January 2003 Dunnigan Realty, LLC, a wholly-owned
subsidiary of the Company, acquired a distribution/office facility in Suffern,
New York (the "Suffern facility"), of which the major portion is the Company's
corporate offices and distribution center.

     Depreciation expense increased by 4.2% to $23.2 million in fiscal 2004,
versus $22.3 million in fiscal 2003. The increase resulted from a higher number
of closed stores, the increase resulted from the first year depreciation of the
new Point of Sale (POS) system, and the first full year of depreciation of the
Company headquarters.

     Interest income decreased by 33.9% to $2.2 million for fiscal 2004 from
$3.3 million for fiscal 2003. The decrease was due primarily to a reduction in
funds available for investment for most of the fiscal year after the purchase of
the Company headquarters for $45.4 million in the fourth quarter of 2003,
partially offset by an increase in interest rates.

     Interest expense for the fiscal year was $5.3 million. Interest expense
includes a $3.3 million charge related to the $32 million legal accrual recorded
in fiscal 2003. This legal accrual was necessary as the result of court judgment
against the Company relating to a previously disclosed lawsuit arising from an
unsuccessful acquisition. On July 7, 2003, after a jury trial the trial court
entered a final judgment of approximately $32 million in compensatory damages
and expenses, which is subject to post-judgment interest. The trial court ruled
against the plaintiffs' motion for any punitive damages or pre-judgment
interest. The Company believes there is no merit in the jury verdict. Both
parties have appealed, with the plaintiff seeking prejudgment interest from
1997. If upon appeal the judgment is subsequently modified, the Company will
adjust its litigation accrual accordingly (see Note 6 of the Notes to the
Consolidated Financial Statements). Interest accrues on the unpaid judgment at
the statutory rate of 10% annually which the Company has provided for at the
rate of approximately $800,000 each quarter in its litigation accrual. The
remaining interest expense represents the mortgage interest from the financing
of the Suffern facility in July 2003 (a 5.3% fixed rate over a 20 year term).

     The effective tax rate for fiscal 2004 was 32.0% versus 36.0% in fiscal
2003. The decrease resulted from the reversal of certain income tax reserves of
approximately $2.0 million. Such reversal resulted from the Company finalizing
certain pending tax audits. Going forward, the Company expects the effective tax
rate to remain in the 36% range.

     Net earnings for fiscal 2004 increased to $30.9 million from $7.2 million
in fiscal 2003. Net earnings were favorably impacted by approximately $1.6
million or $0.05 per share by the extra reporting week in fiscal 2004. Diluted
earnings per share also increased to $1.03 per share versus $0.22 per share in
fiscal 2003. Diluted earnings in fiscal 2003 were negatively impacted by a $32.0
million litigation charge (or $20.3 million or $0.64 per diluted share after
tax). Operating income for fiscal 2004 increased to $47.0 million from $7.3
million in fiscal 2003. The change in operating income was primarily due to the
$32.0 million litigation charge recorded in fiscal 2003.


                                       27





<Page>



Fiscal 2003 Compared to Fiscal 2002

     Net sales decreased by 1.4% to $707.1 million for fiscal 2003, from $717.1
million for fiscal 2002. The sales decrease from fiscal 2003 was due to a 4.6%
decrease in same store sales, offset by approximately 4% increase in total
selling square footage. The increase in store square footage was due to the
opening of 46 new stores, primarily combination Dress Barn/Dress Barn Woman
stores ("Combo stores"), which carry both Dress Barn and Dress Barn Woman
merchandise, offset in part by the square footage reduction from the closing of
28 underperforming stores. The number of stores in operation increased to 772
stores as of July 26, 2003, from 754 stores in operation as of July 27, 2002.
The Company believes the sales decrease was the result of less customer traffic
to its stores resulting in fewer customer transactions. The Company believes the
war, the economy, unemployment, as well as unseasonable weather all affected its
customer traffic.

     The Company suspended all mailing of catalogs and e-commerce sales in
November 2001. The Company discontinued all e-commerce operations, choosing to
utilize its internet site to reinforce store promotions and provide store and
product information, helping to drive store traffic and communicate with its
retail customers. Fiscal 2002 earnings per diluted share were reduced by
approximately $0.11 due to the operating costs of the catalog and e-commerce
operations.

     Gross profit (net sales less cost of goods sold, including occupancy and
buying costs) decreased by 3.5% to $255.5 million, or 36.1% of net sales, in
fiscal 2003 from $264.9 million, or 36.9% of net sales, in fiscal 2002. The
decrease in gross profit as a percentage of sales was primarily due to negative
leverage on buying and occupancy costs from decreased same store sales. In
addition, fiscal 2003 markdowns were higher as a percentage of sales due to
lower than expected sales volumes requiring increased promotional activities to
maintain inventory levels in line with sales trends. These additional markdowns
were slightly offset by higher initial margins due to continued sourcing
improvements and efficiencies. Inventory levels as of the end of fiscal 2003
were more current and lower per store than the prior year.

     Selling, general and administrative ("SG&A") expenses increased by 3.2% to
$194 million, or 27.4% of net sales, in fiscal 2003 from $188.1 million, or
26.2% of net sales, in fiscal 2002. The increase in SG&A as a percentage of net
sales for fiscal 2003 was primarily due to negative same store sales leverage on
SG&A expenses. SG&A expenses increased primarily due to increased store
operating costs, primarily selling, benefits, maintenance and repair and
insurance costs resulting from the increase in the Company's store base. In
addition, the colder than normal winter in most parts of the country put added
pressure on utility costs in the second and third quarters. The Company
continues to focus on controlling its costs and enhancing productivity.

     Depreciation expense decreased by 9.4% to $22.3 million in fiscal 2003,
versus $24.6 million in fiscal 2002. Fiscal 2003 was favorably impacted by the
fiscal 2002 fourth quarter writedown of obsolete software and equipment. This
offset the increase in depreciation from the acquisition by Dunnigan Realty,
LLC, a wholly-owned subsidiary of the Company, of a distribution/office facility
in Suffern, New York (the "Suffern facility"), of which the major portion is the
Company's corporate offices and distribution center. Fiscal 2003 also benefited
from lower store construction costs than the prior year as the Company opened 50
stores in fiscal 2003 versus 74 stores opened during the prior year.

     The litigation charge of $32 million is the result of court judgment
against the Company relating to a previously disclosed lawsuit arising from an
unsuccessful acquisition.

     Interest income - net decreased by 39.0% to $3.3 million for fiscal 2003
from $5.5 million for fiscal 2002. This decrease was due to lower investment
rates versus last year coupled with less cash available for investments. During
fiscal 2003, the Company used approximately $120.8 million for the Dutch Auction
Tender Offer completed at the end of October 2002 (the "Tender Offer"), in which
the Company repurchased 8 million of its common shares. The Company used
approximately $45 million to acquire the Suffern facility in January 2003.

     Other income for fiscal 2003 was approximately $0.8 million. Other income
represents rental income by Dunnigan Realty, LLC from the unaffiliated tenants
of the Suffern facility.


                                       28





<Page>



     Net earnings for fiscal 2003 decreased 80.5% to $7.2 million versus $36.9
million in fiscal 2002. Diluted earnings per share also decreased 77.6% to $0.22
per share versus $0.98 in fiscal 2002. Net earnings were negatively impacted by
the above-mentioned litigation charge of $32.0 million (or $20.3 million or
$0.64 per diluted share after tax). Operating income was $7.3 million, a
decrease of $44.9 million compared to operating income of $52.2 million last
year. The change in operating income from year to year was primarily due to the
$32.0 million litigation charge.

Liquidity and Capital Resources

     The Company has generally funded, through internally generated cash flow,
all of its operating and capital needs. These include the opening or acquisition
of new stores, the remodeling of existing stores, and the continued expansion of
its Combo stores. In fiscal 2004, total capital expenditures were $35.8 million.
Excluding the $45.3 million for the acquisition of the Suffern facility in
fiscal 2003, capital expenditures were $22.7 million and $33.0 million in fiscal
2003 and fiscal 2002, respectively. The increase in fiscal 2004 capital
expenditures was due to the investment in new store point of sale equipment and
more total store remodelings. The Company repurchased 19,700 outstanding shares
of its stock for a total cost of $0.3 million on the open market in fiscal 2004.
In fiscal 2003, the Company repurchased 8,000,000 outstanding shares of its
stock in the Tender Offer for a total cost of $120.8 million. The Company
repurchased in the open market 757,600 outstanding shares of its stock for a
total cost of $9.0 million during fiscal 2002. In fiscal 2003 and 2002, shares
repurchased were retired and treated as authorized but unissued shares, with the
cost of the reacquired shares debited to retained earnings and the par value
debited to common stock.

     The Company funds inventory expenditures through cash flows from operations
and the favorable payment terms the Company has established with its vendors.
The Company's net cash provided by operations in fiscal 2004 decreased to $21.0
million as compared to $61.6 million in fiscal 2003 and $77.0 million in fiscal
2002. The decrease in fiscal 2004 was primarily due to the required funding of
the escrow account of $38.6 million (see following paragraph), while the
decrease in fiscal 2003 versus fiscal 2002 was primarily due to the decrease in
net earnings.

     In the fourth quarter of fiscal 2004, as required as part of an outstanding
legal judgment (see Note 6 of the Notes to the Consolidated Financial
Statements) the Company deposited $38.6 million in an escrow account, utilizing
its operating funds. The escrow account is an interest bearing account and is
included in restricted cash on the Company's balance sheet. The amount deposited
includes interest on the unpaid judgment through December 31, 2004. This escrow
will terminate when a final non-appealable judgment is entered. At that time,
the amount of the judgment, if any, will be paid to the plaintiff with any
balance returned to the Company.

     In January 2003, Dunnigan Realty, LLC, a wholly-owned consolidated
subsidiary of the Company, purchased the Suffern facility, of which the major
portion is the Company's corporate offices and distribution center, for
approximately $45.3 million utilizing the Company's internally generated funds.
In July 2003, Dunnigan Realty, LLC borrowed $34.0 million under a favorable
fixed rate mortgage loan. The mortgage has a twenty-year term with annual
payments of $2.8 million including principal and interest and is secured by a
first mortgage lien on the Suffern facility. Dunnigan Realty, LLC receives
rental income and reimbursement for taxes and common area maintenance charges
from the Company and two additional tenants that occupy the Suffern facility
that are not affiliated with the Company. These rental payments are more than
sufficient to cover the mortgage payments and planned capital and maintenance
expenditures.

     At July 31, 2004, the Company had $122.7 million in marketable securities
and other investments. The portfolio consists primarily of municipal bonds that
can readily be converted to cash. The Company held no options or other
derivative instruments at July 31, 2004. Working capital was approximately
$153.1 million at July 31, 2004. In addition, the Company had available $70
million in unsecured lines of credit bearing interest below the prime rate. The
Company had no debt outstanding under any of the lines at July 31, 2004.
However, potential borrowings were limited by approximately $43 million of
outstanding letters of credit primarily to vendors for import merchandise
purchases. The Company does not have any off-balance sheet arrangements or
transactions with unconsolidated, limited purpose entities, other than operating
leases entered into in the normal course of business and letters of credit. The
Company does not have any undisclosed material transactions or commitments
involving related persons or entities.


                                       29





<Page>



     In fiscal 2005, the Company plans to open approximately 50 additional
stores and continue its store remodeling program. Total fiscal 2005 capital
expenditures, which are primarily attributable to the Company's store opening,
renovation and refurbishment programs, are expected to be approximately $25
million. The Company intends to focus on both expanding in the Company's
existing major trading markets and developing and expanding into new markets.
The Company believes that its cash, cash equivalents, marketable securities and
investments, together with cash flow from operations, will be adequate to fund
the Company's proposed capital expenditures and other anticipated obligations.

Contractual Obligations and Commercial Commitments

     The estimated significant contractual cash obligations and other commercial
commitments at July 31, 2004 are summarized in the following table:

<TABLE>
<CAPTION>
                                  ----------------------------------------------------------------
                                                  Payments Due by Period (000's)
                                  ----------------------------------------------------------------
Contractual                                     Fiscal   Fiscal 2006-   Fiscal 2008-   Fiscal 2010
Obligations                         Totals       2005        2007           2009        And Beyond
--------------------------------------------------------------------------------------------------
<S>                               <C>          <C>         <C>            <C>            <C>
Operating lease obligations       $  960,302   $93,751     $187,449       $186,261       $492,841
Mortgage principal and interest       52,583     2,768        5,535          5,535         38,745
                                  ----------------------------------------------------------------
                                  $1,012,885   $96,519     $192,984       $191,796       $531,586
                                  ================================================================
</TABLE>

<TABLE>
<CAPTION>
                                  ----------------------------------------------------------------
                                            Amount of Commitment Expiration Period (000's)
                                  ----------------------------------------------------------------
Other Commercial                                Fiscal   Fiscal 2006-   Fiscal 2008-   Fiscal 2010
Commitments                         Totals       2005        2007           2009       And Beyond
--------------------------------------------------------------------------------------------------
<S>                                 <C>        <C>           <C>             <C>           <C>
Trade letters of credit             $38,048    $38,048       $--             $--           $--
Standby letters of credit             4,575      4,575        --              --            --
Firm purchase orders                    130        130        --              --            --
                                  ----------------------------------------------------------------
                                    $42,753    $42,753       $--             $--           $--
                                  ================================================================
</TABLE>

     In addition to the commitments represented in the above table, the Company
enters into a number of cancelable and non-cancelable commitments during the
year. Typically, these commitments are for less than a year in duration and are
principally focused on the construction of new retail stores and the procurement
of inventory. The Company does not maintain any long-term or exclusive
commitments or arrangements to purchase merchandise from any single supplier.
Preliminary commitments with the Company's private label merchandise vendors
typically are made five to seven months in advance of planned receipt date.
Substantially all of the Company's merchandise purchase commitments are
cancelable up to 30 days prior to the vendor's scheduled shipment date.


                                       30





<Page>



Seasonality

     The Company has historically experienced substantially lower earnings in
its second fiscal quarter ending in January than during its other three fiscal
quarters, reflecting the intense promotional atmosphere that has characterized
the Christmas shopping season in recent years. The Company expects this trend to
continue for fiscal 2005. In addition, the Company's quarterly results of
operations may fluctuate materially depending on, among other things, increases
or decreases in same store sales, adverse weather conditions, shifts in timing
of certain holidays, the timing of new store openings, net sales contributed by
new stores, and changes in the Company's merchandise mix.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's portfolio of investments consisting of cash, cash equivalents
and marketable securities can be affected by changes in market interest rates.
The escrow account referred to in Note 6 is invested in short term money market
instruments. The remainder of the marketable securities in the portfolio
consists primarily of municipal bonds that can readily be converted to cash.
Financial instruments, which potentially subject the Company to concentrations
of credit risk, are principally bank deposits and short-term money market
investments. Cash and cash equivalents are deposited with high credit quality
financial institutions. Short-term investments principally consist of triple A
or double A rated instruments. The carrying amounts of cash, cash equivalents,
short-term investments and accounts payable approximate fair value because of
the short-term nature and maturity of such instruments.

     Currently, we maintain approximately 57% of our cash and investments in
financial instruments with original maturity dates of three months or less, 9%
in financial instruments with original maturity dates of greater than three
months and less than one year, and the remaining 34% in financial instruments
with original maturity dates of equal to or greater than one year and less than
five years. These financial instruments are subject to interest rate risk and
will decline in value if interest rates increase. We estimate that a change of
100 basis points in interest rates would result in a $2.2 million decrease or
increase in the fair value of our cash and investments.

     Our outstanding long-term liabilities as of July 31, 2004 consisted of
$33.0 million of our 5.3% mortgage loan due July 1, 2023. As the mortgage loan
bears interest at a fixed rate, our results of operations would not be affected
by interest rate changes. Although future borrowings may bear interest at a
floating rate, and would therefore be affected by interest rate changes, at this
point we do not anticipate any significant future borrowings, and therefore do
not believe that a change of 100 basis points in interest rates would have a
material effect on our financial condition.

     Accordingly, we do not believe that there is any material market risk
exposure with respect to derivative or other financial instruments that would
require disclosure under this item.

     The Company holds no options or other derivative instruments at July 31,
2004. Other information required by this item is incorporated by reference to
the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Financial Risk Management" in Item 7 of
this Report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The consolidated financial statements of The Dress Barn, Inc. and
subsidiaries are filed together with this report: See Index to Financial
Statements, Item 15.

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

     None.


                                       31





<Page>



ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     During the fourth quarter of fiscal 2004, there were no changes in the
Company's internal control over financial reporting that materially affected or
are reasonably likely to materially affect internal control over financial
reporting.

     However, on February 7, 2005, the Office of the Chief Accountant of the
Securities and Exchange Commission ("SEC") issued a letter to the American
Institute of Certified Public Accountants expressing its views regarding certain
operating lease-related accounting issues and their application under accounting
principles generally accepted in the United States of America ("GAAP"). In light
of this letter, the Company's management initiated a review of its lease
accounting and determined that its then-current method of accounting for
leasehold improvements funded by landlord incentives or allowances under
operating leases (construction allowances) and its then-current method of
calculating straight-line rent expense for its operating leases was not in
accordance with GAAP, and that a review of all lease-related accounting
practices was underway.

     In a meeting with the Company's management and its independent registered
public accountants, management determined that the Company's accounting for
construction allowances and rent escalations was incorrect. Management
determined that the Company's audited consolidated financial statements for the
years ended July 31, 2004, July 26, 2003, and July 27, 2002 should be restated.
In addition, the Company reported on Form 8-K that such financial statements
filed in its Annual Report on Form 10-K for the year ended July 31, 2004 and its
quarterly report on Form 10-Q for the quarter ended October 30, 2004 should no
longer be relied upon.

     Based on the definition of "material weakness" in the Public Company
Accounting Oversight Board's Auditing Standard No. 2, An Audit of Internal
Control Over Financial Reporting Performed in Conjunction With an Audit of
Financial Statements, restatements in prior filings with the SEC is a strong
indicator of the existence of a "material weakness" in the design or operation
of internal control over financial reporting in the Company's store lease
accounting practices. Based on that, management concluded that a material
weakness existed in the Company's internal control over financial reporting due
to its store lease accounting practices, and disclosed this to the Audit
Committee and to the independent registered public accountants. The Company is
in the process of remediating its internal control over financial reporting in
it's store lease accounting practices by conducting a review of its internal
controls related to operating leases and correcting its method of accounting for
construction allowances.

     The Company also carried out an evaluation, under the supervision and with
the participation of the Company's management, including the chief executive
officer and the chief financial officer, of the effectiveness of the design and
operation of the disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15 (e) under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"). Based upon that evaluation, which included the
matter discussed above, the Company's chief executive officer and chief
financial officer concluded that the Company's disclosure controls and
procedures were not effective, due to its store lease accounting practices,
discussed above, as of the end of the period covered by this Report (March 18,
2005), in ensuring that material information relating to The Dress Barn, Inc.,
including its consolidated subsidiaries, required to be disclosed by the Company
in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms.

     At the end of fiscal 2005, Section 404 of the Sarbanes-Oxley Act will
require the Company's management to provide an assessment of the effectiveness
of the Company's internal control over financial reporting, and the Company's
independent registered public accountants will be required to audit management's
assessment. The Company is in the process of performing the system and process
documentation, evaluation and testing required for management to make this
assessment and for its independent registered public accountants to provide
their attestation report. The Company has not completed this process or its
assessment, and this process will require significant amounts of management time
and resources. In the course of evaluation and testing, management may identify
deficiencies that will need to be addressed and remediated.

ITEM 9B. OTHER INFORMATION

None.


                                       32





<Page>



                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information with respect to this item is incorporated by reference from the
Registrant's definitive Proxy Statement to be filed with the Commission not
later than 120 days after the end of the registrant's fiscal year.

ITEM 10A. CODE OF BUSINESS CONDUCT AND ETHICS

     The Company has adopted a Code of Ethics for the Chief Executive Officer
and Senior Financial Officers. The Code of Ethics for the Chief Executive
Officer and Senior Financial Officers is posted on the Company's website,
www.dressbarn.com (under the "Governance" caption). The Company intends to
satisfy the disclosure requirement regarding any amendment to, or a waiver of, a
provision of the Code of Ethics by posting such information on its website. The
Company undertakes to provide to any person a copy of this Code of Ethics upon
request to the Secretary of the Company at the Company's principal executive
offices.

ITEM 11. EXECUTIVE COMPENSATION

     Information with respect to this item is incorporated by reference from the
Registrant's definitive Proxy Statement to be filed with the Commission not
later than 120 days after the end of the registrant's fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information with respect to this item is incorporated by reference from the
Registrant's definitive Proxy Statement to be filed with the Commission not
later than 120 days after the end of the Registrant's fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information with respect to this item is incorporated by reference from the
Registrant's definitive Proxy Statement to be filed with the Commission not
later than 120 days after the end of the Registrant's fiscal year.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information with respect to this item is incorporated by reference from
the Registrant's definitive Proxy Statement to be filed with the Commission not
later than 120 days after the end of the Registrant's fiscal year.


                                       33





<Page>



                                     PART IV

ITEM 15. EXHIBITS and FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
ITEM 15.  (a)(1)  FINANCIAL STATEMENTS                              PAGE NUMBER
                                                                     -----------
<S>                                                                  <C>
Report of Independent Registered Public Accounting Firm                  F-1
Consolidated Balance Sheets                                              F-2
Consolidated Statements of Earnings                                      F-4
Consolidated Statements of Shareholders' Equity and
   Comprehensive Income                                                  F-5
Consolidated Statements of Cash Flows                                    F-6
Notes to Consolidated Financial Statements                           F-7 to F-22
</TABLE>

ITEM 15. (b)(1) FINANCIAL STATEMENT SCHEDULE

Schedule II-Valuation and Qualifying Accounts for the years ended July 31, 2004
and July 26, 2003

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

ITEM 15. (a)(3) LIST OF EXHIBITS

     The following exhibits are filed as part of this Report and except Exhibits
10(mm), 10(xx), 21, 23, 31.1, 31.2, 32.1 and 32.2 are all incorporated by
reference (utilizing the same exhibit numbers) from the sources shown.

<TABLE>
<CAPTION>
Exhibit                                                          Incorporated By
Number                     Description                            Reference From
-------                    -----------                           ---------------
<S>       <C>                                                          <C>
3(c)      Amended and Restated Certificate of Incorporation             (1)

3(e)      Amended and Restated By-Laws                                 (13)

3(f)      Amendments to Amended and Restated Certificate of
          Incorporation                                                 (5)

4.        Specimen Common Stock Certificate                             (1)

10        Purchase and Sale Agreement- 30 Dunnigan Drive,
          Suffern NY                                                   (17)

10(a)     1993 Incentive Stock Option Plan                             (10)

10(b)     Employment Agreement With Burt Steinberg                     (14)

10(f)     Agreement Terminating Agreement for Purchase of
          Certain Stock from Elliot S. Jaffe upon death                 (6)

10(g)     Agreement Terminating Agreement for Purchase of
          Certain Stock from Roslyn S. Jaffe upon death                 (6)
</TABLE>


                                       34





<Page>



<TABLE>
<CAPTION>
                                                                 Incorporated By
                                                                 Reference From
                                                                 ---------------
<S>      <C>                                                           <C>
Leases of Company premises of which the lessor is Elliot S.
Jaffe or members of his family or related trusts:
         10(l) Danbury, CT store                                        (1)
         10(hh) Norwalk, CT  Dress Barn/Dress Barn Woman store          (8)

10(aa)   The Dress Barn, Inc. 1987 Non-Qualified Stock Option
         Plan                                                           (5)

10(dd)   Nonqualified Stock Option Agreement with Armand
         Correia                                                        (7)

10(ff)   Nonqualified Stock Option Agreement with Elliot Jaffe          (7)

10(gg)   Nonqualified Stock Option Agreement with Burt Steinberg        (7)

10(mm)   Lease between Dress Barn and Dunnigan Realty, LLC for
         Office and Distribution Space in Suffern, New York

10(nn)   The Dress Barn, Inc. 1995 Stock Option Plan                   (11)

10(oo)   Split Dollar Agreement between Dress Barn and                 (12)
         Steinberg Family Trust f/b/o Michael Steinberg

10(pp)   Split Dollar Agreement between Dress Barn and                 (12)
         Steinberg Family Trust f/b/o Jessica Steinberg

10(qq)   Split Dollar Agreement between Dress Barn and                 (12)
         Jaffe 1996 Insurance Trust

10(ss)   The Dress Barn, Inc. 2001 Stock Option Plan                   (14)

10(tt)   Employment Agreement with Elliot S. Jaffe                     (15)

10(uu)   Employment Agreement with David R. Jaffe                      (15)

10(ww)   Employment Agreement with Vivian Behrens                      (16)

10(xx)   Mortgage Agreement- Dunnigan Realty, LLC

14.      Code of Ethics for the Chief Executive Officer and
         Senior Financial Officers

21.      Subsidiaries of the Registrant

23.      Independent Auditors' Consent

31.1     Section 302 Certification of President and Chief
         Executive Officer

31.2     Section 302 Certification of Chief Financial Officer

32.1     Section 906 Certification of President and Chief
         Executive Officer

32.2     Section 906 Certification of Chief Financial Officer

References on following page:
</TABLE>


                                       35





<Page>



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

(1)  The Company's Registration Statement on Form S-1 under the Securities Act
     of 1933 (Registration No. 2-82916) declared effective May 4, 1983.

(2)  The Company's Annual Report on Form 10-K for the fiscal year ended July 28,
     1984.

(3)  The Company's Annual Report on Form 10-K for the fiscal year ended July 27,
     1985.

(4)  The Company's Annual Report on Form 10-K for the fiscal year ended July 26,
     1986.

(5)  The Company's Annual Report on Form 10-K for the fiscal year ended July 30,
     1988.

(6)  The Company's Annual Report on Form 10-K for the fiscal year ended July 28,
     1990.

(7)  The Company's Annual Report on Form 10-K for the fiscal year ended July 27,
     1991.

(8)  The Company's Annual Report on Form 10-K for the fiscal year ended July 25,
     1992.

(9)  The Company's Annual Report on Form 10-K for the fiscal year ended July 31,
     1993.

(10) The Company's Registration Statement on Form S-8 under the Securities Act
     of 1933 (Registration No. 33-60196) filed on March 29, 1993.

(11) The Company's Annual Report on Form 10-K for the fiscal year ended July 27,
     1996.

(12) The Company's Annual Report on Form 10-K for the fiscal year ended July 25,
     1998.

(13) The Company's Annual Report on Form 10-K for the fiscal year ended July 29,
     2000.

(14) The Company's Annual Report on Form 10-K for the fiscal year ended July 28,
     2001.

(15) The Company's Annual Report on Form 10-K for the fiscal year ended July 27,
     2002.

(16) The Company's Quarterly Report on Form 10-Q for the quarter ended October
     26, 2002.

(17) The Company's Quarterly Report on Form 10-Q for the quarter ended January
     26, 2003.

ITEM 15.  (c) EXHIBITS

     All exhibits are incorporated by reference as shown in Item 14(a)3, except
Exhibits 10(mm), 10(xx), 21, 23, 31.1, 31.2, 32.1 and 32.2 which are filed as
part of this Report.


                                       36





<Page>



                                   SIGNATURES

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

                                                  The Dress Barn, Inc.


                                                  by /s/ ELLIOT S. JAFFE
                                                     ---------------------------
                                                     Elliot S. Jaffe
                                                     Chairman of the Board

     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>


/s/ ELLIOT S. JAFFE           Chairman of the Board                 03/18/05
-------------------
Elliot S. Jaffe


/s/ ROSLYN S. JAFFE           Director and Secretary and            03/18/05
-------------------           Treasurer
Roslyn S. Jaffe


/s/ DAVID R. JAFFE            Director, President                   03/18/05
------------------            and Chief Executive Officer
David R. Jaffe                (Principal Executive Officer)


/s/ BURT STEINBERG            Director and Executive Director       03/18/05
------------------
Burt Steinberg


/s/ KLAUS EPPLER              Director                              03/18/05
----------------
Klaus Eppler


/s/ EDWARD D. SOLOMON         Director                              03/18/05
---------------------
Edward D. Solomon


/s/ JOHN USDAN                Director                              03/18/05
--------------
John Usdan


/s/ KATE BUGGELN              Director                              03/18/05
----------------
Kate Buggeln


/s/ MARC LASRY                Director                              03/18/05
--------------
Marc Lasry


/s/ ARMAND CORREIA            Chief Financial Officer               03/18/05
------------------            (Principal Financial and
Armand Correia                Accounting Officer)
</TABLE>


                                       37





<Page>



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
The Dress Barn, Inc.
Suffern, New York

     We have audited the accompanying consolidated balance sheets of The Dress
Barn, Inc. and Subsidiaries (the "Company") as of July 31, 2004 and July 26,
2003, and the related statements of earnings, shareholders' equity and
comprehensive income, and cash flows for each of the three years in the period
ended July 31, 2004. Our audits also included the financial statement schedule
for the years ended July 31, 2004 and July 26, 2003 listed in the index at
15(b)1. These consolidated financial statements and financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

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

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of The Dress Barn, Inc. and
Subsidiaries as of July 31, 2004 and July 26, 2003, and their results of
operations and their cash flows for each of the three years in the period ended
July 31, 2004 in conformity with accounting principles generally accepted in the
United States of America. Also in our opinion, such 2004 and 2003 financial
statement schedule, which is considered in relation to the basic 2004 and 2003
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.

     As discussed in Note 2, the accompanying consolidated financial statements
have been restated.

DELOITTE & TOUCHE LLP
Stamford, Connecticut
October 13, 2004 (March 18, 2005 as to the effects of the restatement discussed
in Note 2)


                                       F-1





<Page>



The Dress Barn, Inc. and Subsidiaries

Consolidated Balance Sheets
Amounts in thousands, except share data

<TABLE>
<CAPTION>
                                                           July 31,        July 26,
                                                             2004            2003
                                                        (as restated,   (as restated,
                                                         see Note 2)     see Note 2)
                                                        -------------   -------------
<S>                                                        <C>             <C>
ASSETS
Current Assets:
   Cash and cash equivalents                               $ 15,141        $ 37,551
   Restricted cash and cash equivalents (see Note 1)         38,661              --
   Marketable securities and investments (see Note 3)       122,700         113,897
   Merchandise inventories                                  116,912         110,348
   Deferred income tax asset (see Note 8)                    14,845          17,336
   Prepaid expenses and other                                 8,898           7,383
                                                           --------        --------
      Total Current Assets                                  317,157         286,515

Property and Equipment:
   Land and buildings                                        45,391          45,391
   Leasehold improvements                                    93,289          91,030
   Fixtures and equipment                                   173,466         164,163
   Computer software                                         23,302          19,369
                                                           --------        --------
                                                            335,448         319,953
   Less accumulated depreciation and amortization
                                                            172,244         164,406
                                                           --------        --------
                                                            163,204         155,547

Other Assets                                                  8,955           7,725
                                                           --------        --------
   TOTAL ASSETS                                            $489,316        $449,787
                                                           ========        ========
</TABLE>


                                       F-2





<Page>



The Dress Barn, Inc. and Subsidiaries

Consolidated Balance Sheets
Amounts in thousands, except share data

<TABLE>
<CAPTION>
                                                                       July 31,        July 26,
                                                                         2004            2003
                                                                    (as restated,   (as restated,
                                                                     See Note 2)     see Note 2)
                                                                    -------------   -------------
<S>                                                                    <C>             <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
   Accounts payable- trade                                             $ 66,776        $ 65,090
   Accrued salaries, wages and related expenses                          21,349          18,882
   Litigation accrual (see Note 6)                                       36,128          35,592
   Other accrued expenses                                                24,247          25,462
   Customer credits                                                       8,970           7,284
   Income taxes payable                                                   5,548           7,088
   Current portion of long-term debt                                      1,033             979
                                                                       --------        --------
      Total Current Liabilities                                         164,051         160,377

Long-Term Debt (See Note 4)                                              31,988          33,021
Deferred Rent                                                            40,319          38,968
                                                                       --------        --------
      Total Liabilities                                                 236,358         232,366
                                                                       --------        --------

Commitments and Contingencies (See Note 9)

Shareholders' Equity:
   Preferred stock, par value $.05 per share:
      Authorized- 100,000 shares
      Issued and outstanding- none                                           --              --
   Common stock, par value $.05 per share:
      Authorized- 50,000,000 shares
      Issued- 29,638,360 and 29,169,559 shares, respectively
      Outstanding- 29,618,660 and 29,169,559 shares, respectively         1,482           1,458
   Additional paid-in capital                                            63,554          58,200
   Retained earnings                                                    188,757         157,825
   Treasury stock, to be retired                                           (313)              0
   Accumulated other comprehensive loss                                    (522)            (62)
                                                                       --------        --------
                                                                        252,958         217,421
                                                                       --------        --------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       $489,316        $449,787
                                                                       ========        ========
</TABLE>

See notes to consolidated financial statements


                                       F-3





<Page>



The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings
Amounts in thousands, except per share amounts

<TABLE>
<CAPTION>
                                                                    Fiscal Year Ended
                                                      ---------------------------------------------
                                                         July 31,        July 26,        July 27,
                                                           2004            2003            2002
                                                      (as restated,   (as restated,   (as restated,
                                                       see Note 2)     see Note 2)     see Note 2)
                                                      ---------------------------------------------
<S>                                                      <C>            <C>              <C>
Net sales                                                $754,903       $707,121         $717,136
Cost of sales, including occupancy and buying costs       472,198        451,579          452,216
                                                      ---------------------------------------------

Gross profit                                              282,705        255,542          264,920

Selling, general and administrative expenses              212,477        194,005          188,056
Depreciation and amortization                              23,197         22,262           24,631
Litigation charge (see Note 6)                                 --         32,000               --
                                                      ---------------------------------------------

Operating income                                           47,031          7,275           52,233

Interest income                                             2,204          3,332            5,458
Interest expense                                           (5,288)          (164)              --
Other income                                                1,526            779               --
                                                      ---------------------------------------------

Earnings before provision for income taxes                 45,473         11,222           57,691

Provision for income taxes                                 14,541          4,039           20,769
                                                      ---------------------------------------------

Net earnings                                             $ 30,932       $  7,183         $ 36,922
                                                      =============================================

Earnings per share:
   Basic                                                 $   1.05       $   0.23         $   1.01
                                                      =============================================
   Diluted                                               $   1.03       $   0.22         $   0.98
                                                      =============================================

Weighted average shares outstanding:
   Basic                                                   29,413         31,219           36,495
                                                      =============================================
   Diluted                                                 30,120         31,942           37,516
                                                      =============================================
</TABLE>

See notes to consolidated financial statements


                                       F-4





<Page>



The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Shareholders' Equity and Comprehensive Income
Amounts and shares in thousands.

<TABLE>
<CAPTION>
                                                        Common Stock    Additional
                                                      ---------------     Paid-In    Retained
                                                      Shares   Amount     Capital    Earnings
---------------------------------------------------------------------------------------------
<S>                                                   <C>      <C>        <C>        <C>
Balance, July 28, 2001 (previously reported)          36,474   $2,566     $44,056    $364,491
Prior year adjustment (see Note 2)                                                     (7,592)
----------------------------------------------------------------------------------------------
Balance, July 28, 2001 (as restated, see Note 2)      36,474    2,566      44,056     356,899
----------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings (as restated, see Note 2)                                              36,922
   Unrealized holding gain on marketable securities

      Total comprehensive income (restated, Note 2)

Deferred compensation                                                         291
Tax benefit from exercise of stock options                                  2,953
Employee Stock Purchase Plan activity                      9        1          90
Shares issued pursuant to exercise of stock options      783       39       4,819
Purchase of treasury stock                              (758)
Retirement of treasury stock                                     (781)               (122,760)
----------------------------------------------------------------------------------------------
Balance, July 27, 2002 (as restated, see Note 2)      36,508    1,825      52,209     271,061
----------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings (as restated, see Note 2)                                               7,183
   Unrealized holding loss on marketable securities

      Total comprehensive income (restated, Note 2)

Deferred compensation                                     20        1         264
Tax benefit from exercise of stock options                                  1,381
Employee Stock Purchase Plan activity                      7                   87
Shares issued pursuant to exercise of stock options      635       32       4,259
Purchase of treasury stock - Tender Offer             (8,000)
Retirement of treasury stock                                     (400)               (120,419)
----------------------------------------------------------------------------------------------
Balance, July 26, 2003 (as restated, see Note 2)      29,170    1,458      58,200     157,825
----------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings (as restated, see Note 2)                                              30,932
   Unrealized holding loss on marketable securities

      Total comprehensive income (restated, Note 2)

Deferred compensation                                     (1)                  67
Tax benefit from exercise of stock options                                  1,460
Employee Stock Purchase Plan activity                      6                   83
Shares issued pursuant to exercise of stock options      464       24       3,744
Purchase of treasury stock                               (20)
----------------------------------------------------------------------------------------------
Balance, July 31, 2004 (as restated, see Note 2)      29,619   $1,482     $63,554    $188,757
==============================================================================================

<CAPTION>
                                                                   Accumulated
                                                                      Other            Total
                                                       Treasury   Comprehensive   Shareholders'
                                                        Stock     Income (Loss)       Equity
-----------------------------------------------------------------------------------------------
<S>                                                   <C>              <C>           <C>
Balance, July 28, 2001 (previously reported)          ($114,577)        $61          $296,597
Prior year adjustment (see Note 2)                                                     (7,592)
-----------------------------------------------------------------------------------------------
Balance, July 28, 2001 (as restated, see Note 2)       (114,577)         61           289,005
-----------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings (as restated, see Note 2)                                              36,922
   Unrealized holding gain on marketable securities                     486               486
                                                                                     --------
      Total comprehensive income (restated, Note 2)                                    37,408
                                                                                     --------
Deferred compensation                                                                     291
Tax benefit from exercise of stock options                                              2,953
Employee Stock Purchase Plan activity                                                      91
Shares issued pursuant to exercise of stock options                                     4,858
Purchase of treasury stock                               (8,964)                       (8,964)
Retirement of treasury stock                            123,541                            --
-----------------------------------------------------------------------------------------------
Balance, July 27, 2002 (as restated, see Note 2)             --         547           325,642
-----------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings (as restated, see Note 2)                                               7,183
   Unrealized holding loss on marketable securities                    (609)             (609)
                                                                                     --------
      Total comprehensive income (restated, Note 2)                                     6,574
                                                                                     --------
Deferred compensation                                                                     265
Tax benefit from exercise of stock options                                              1,381
Employee Stock Purchase Plan activity                                                      87
Shares issued pursuant to exercise of stock options                                     4,291
Purchase of treasury stock - Tender Offer              (120,819)                     (120,819)
Retirement of treasury stock                            120,819                            --
-----------------------------------------------------------------------------------------------
Balance, July 26, 2003 (as restated, see Note 2)             --         (62)          217,421
-----------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings (as restated, see Note 2)                                              30,932
   Unrealized holding loss on marketable securities                    (460)             (460)
                                                                                     --------
      Total comprehensive income (restated, Note 2)                                    30,472
                                                                                     --------
Deferred compensation                                                                      67
Tax benefit from exercise of stock options                                              1,460
Employee Stock Purchase Plan activity                                                      83
Shares issued pursuant to exercise of stock options                                     3,768
Purchase of treasury stock                                 (313)                         (313)
-----------------------------------------------------------------------------------------------
Balance, July 31, 2004 (as restated, see Note 2)          ($313)      ($522)          252,958
===============================================================================================
</TABLE>

See notes to consolidated financial statements


                                      F-5





<Page>



<TABLE>
<CAPTION>
                                                                                 Fiscal Year Ended
                                                                   ---------------------------------------------
The Dress Barn, Inc. and Subsidiaries                                 July 31,        July 26,       July 27,
Consolidated Statements of Cash Flows                                   2004            2003           2002
Amounts in thousands                                               (as restated,   (as restated,   (as restated,
                                                                    see Note 2)     see Note 2)     see Note 2)
                                                                   ---------------------------------------------
<S>                                                                  <C>            <C>              <C>
Operating Activities:
Net earnings                                                         $ 30,932       $   7,183        $ 36,922
                                                                   ---------------------------------------------
Adjustments to reconcile net earnings to net cash provided by
   operating activities:
      Depreciation and amortization of property and equipment          23,197          22,262          24,631
      Provision for impairments and asset disposals                     4,906           1,539           1,681
      Deferred income tax expense (benefit)                             2,491          (5,871)            836
      Deferred rent expense                                             1,351           1,899           2,972
      Tax benefit on exercise of unqualified stock options              1,460           1,381           2,953
      Amortization of debt issuance cost                                  152               0               0
      Increase in cash surrender value of  life insurance                (600)         (1,060)           (566)
      Deferred compensation                                                67             265             291
      Changes in assets and liabilities:
         Increase in restricted cash                                  (38,661)              0               0
         (Increase) decrease in merchandise inventories                (6,564)          3,023          (8,884)
         (Increase) decrease in prepaid expenses and other             (1,515)         (3,790)          1,910
         Decrease in other assets                                         208             456             154
         Increase in accounts payable- trade                            1,686           1,056           4,484
         Increase in accrued salaries and wages                         2,467             793             870
         Increase in litigation accrual                                   536          31,544           1,600
         (Decrease) increase in accrued expenses                       (1,215)          1,811          (1,114)
         Increase in customer credits                                   1,686             634             839
         (Decrease) increase in income taxes payable                   (1,540)         (1,568)          7,468
                                                                   ---------------------------------------------
      Total adjustments                                                (9,888)         54,374          40,125
                                                                   ---------------------------------------------
         Net cash provided by operating activities                     21,044          61,557          77,047
                                                                   ---------------------------------------------
Investing Activities:
   Purchases of property and equipment                                (35,760)        (68,069)        (33,010)
   Sales and maturities of marketable securities and investments       62,741         138,346         109,142
   Purchases of marketable securities and investments                 (72,004)        (93,803)        (94,278)
   Purchases of long term investments                                    (900)              0               0
                                                                   ---------------------------------------------
         Net cash used in investing activities                        (45,923)        (23,526)        (18,146)
                                                                   ---------------------------------------------
Financing Activities:
   (Repayment of) proceeds from long-term debt                           (979)         34,000               0
   Payment for debt issuance cost                                         (90)         (1,730)              0
   Purchase of treasury stock                                            (313)       (120,819)         (8,964)
   Proceeds from Employee Stock Purchase Plan                              83              88              91
   Proceeds from stock options exercised                                3,768           4,291           4,858
                                                                   ---------------------------------------------
         Net cash provided by (used in) financing activities            2,469         (84,170)         (4,015)
                                                                   ---------------------------------------------
Net (decrease) increase in cash and cash equivalents                  (22,410)        (46,139)         54,886
Cash and cash equivalents- beginning of year                           37,551          83,690          28,804
                                                                   ---------------------------------------------
Cash and cash equivalents- end of year                               $ 15,141       $  37,551        $ 83,690
                                                                   =============================================
Supplemental Disclosure of Cash Flow Information:
   Cash paid for income taxes                                        $ 12,130       $  10,206        $  9,511
                                                                   =============================================
   Cash paid for interest                                            $  1,789       $      35        $      0
                                                                   =============================================
</TABLE>

See notes to consolidated financial statements


                                       F-6





<Page>



                      The Dress Barn, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                         Three Years Ended July 31, 2004

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

     The Dress Barn, Inc. (including The Dress Barn, Inc. and its wholly-owned
subsidiaries (the "Company") operates a chain of women's apparel specialty
stores. The stores, operating principally under the names "Dress Barn" and
"Dress Barn Woman", offer in-season, moderate to better quality fashion apparel.
The Company is a specialty retailer of women's apparel (in both regular and
large sizes), including shoes and accessories. Given the similarities of the
economic characteristics and how the Company manages its different store
formats, the operations of the Company are aggregated into one reportable
segment.

Principles of consolidation

     The consolidated financial statements include the accounts of the Company
and its subsidiaries. All material intercompany balances and transactions are
eliminated in consolidation. The Company reports on a 52-53 week fiscal year
ending on the last Saturday in July. Fiscal year ended July 31, 2004 consists of
53 weeks. Fiscal years 2003 and 2002 consist of 52 weeks. Certain
reclassifications have been made to the prior years' consolidated financial
statements to conform to fiscal 2004's presentation.

     Dunnigan Realty, LLC, a wholly-owned subsidiary of the Company, was formed
in fiscal 2003 to purchase, own and operate a distribution/office facility in
Suffern, New York (the "Suffern facility"), of which the major portion is the
Company's corporate offices and distribution center. Dunnigan Realty, LLC
receives rental income and reimbursement for taxes and common area maintenance
charges from the Company and two additional tenants that occupy the Suffern
facility that are not affiliated with the Company. The rental income from the
unaffiliated tenants is shown as "other income" on the Company's Consolidated
Statements of Earnings. Intercompany rentals between the Company and Dunnigan
Realty, LLC are eliminated in consolidation.

Revenue recognition

     Revenues from retail sales, net of returns, are recognized at the point of
purchase upon delivery of the merchandise to the customer and exclude sales
taxes. Sales from purchases made with gift certificates and layaway sales are
also recorded when the customer takes possession of the merchandise. The
Company's gift certificates and merchandise credits do not have expiration
dates, and the Company's current policy is that it does not reduce its liability
for unredeemed gift certificates or merchandise credits that will eventually be
remitted to the states under their escheat laws until such time amounts are
remitted to the state. The Company records a reserve for estimated product
returns based on historical return trends.

Cash and cash equivalents

     For purposes of the statement of cash flows, the Company considers its
highly liquid investments with maturities of three months or less when purchased
to be cash equivalents. These amounts are stated at cost, which approximates
market value. The majority of the Company's money market funds at July 31, 2004
were maintained with one financial institution. The Company's cash management
process provides for the daily funding of checks as they are presented to the
bank.

Restricted cash and cash equivalents

     Restricted cash consists of $38.6 million held in escrow as required as
part of an outstanding legal judgment. The escrow account is an interest bearing
account at the current Federal funds rate plus a margin.


                                       F-7





<Page>



Marketable securities and investments

     The Company has categorized its marketable securities as available for
sale, stated at market value. The unrealized holding gains and losses are
included in other comprehensive income, a component of shareholders' equity,
until realized. The amortized cost is adjusted for amortization of premiums and
discounts to maturity, with the net amortization included in interest income.

Merchandise inventories

     The Company values its merchandise inventories at the lower of cost, on a
First In First Out (FIFO) basis, or market, as determined by the retail
inventory method. The Company includes in cost of sales, including occupancy and
buying costs line item, all costs of merchandise (net of purchase discounts and
vendor allowances), all costs associated with its buying and distribution
functions, freight on inbound, outbound and internally transferred merchandise,
merchandise acquisition costs, commissions and import fees, and all occupancy
costs excluding depreciation.

Property and equipment

     Property and equipment are carried at cost less accumulated depreciation.
Depreciation of fixtures and equipment, and software is provided on the
straight-line method over estimated useful lives, generally ranging from 5 to 10
years and 25 years for the building. Leasehold improvements are amortized over
the shorter of their estimated useful lives or the related lease life, generally
10 years. For leases with renewal periods at the Company's option, the Company
generally uses the original lease term, excluding renewal option periods to
determine estimated useful lives; if failure to exercise a renewal option
imposes an economic penalty to the Company, management determines at the
inception of the lease that renewal is reasonably assured and include the
renewal option period in the determination of appropriate estimated useful
lives. The costs of repairs and maintenance are expensed when incurred, while
expenditures for refurbishments and improvements that significantly add to the
productive capacity or extend the useful life of an asset are capitalized. When
assets are retired or sold, the asset cost and related accumulated depreciation
are eliminated with any remaining gain or loss reflected in net earnings.

Impairment of long-lived assets

     The Company primarily invests in property and equipment in connection with
the opening and remodeling of stores. When facts and circumstances indicate that
the carrying values of such long-lived assets may be impaired, an evaluation of
recoverability is performed by comparing the carrying values of the assets to
projected future cash flows, in addition to other quantitative and qualitative
analyses. Upon indication that the carrying values of such assets may not be
recoverable, the Company recognizes an impairment loss as a charge against
current operations. Property and equipment assets are grouped at the lowest
level for which there are identifiable cash flows when assessing impairment.
Cash flows are identified at the individual store level. Judgments made by the
Company related to the expected useful lives of long-lived assets and the
ability of the Company to realize undiscounted cash flows in excess of the
carrying amounts of such assets are affected by factors such as the ongoing
maintenance and improvements of the assets, changes in economic conditions and
changes in operating performance. As the Company assesses the ongoing expected
cash flows and carrying amounts of its long-lived assets, these factors could
cause the Company to realize material impairment charges. In addition, the
Company regularly evaluates its computer-related and other assets and may
accelerate depreciation over the revised useful life if the asset is no longer
in use or has limited future value. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation or amortization are
removed from the accounts, and any resulting gain or loss is reflected in income
for that period. Based on the review of certain under performing stores, the
Company recorded impairment charges and store closings that are included in
selling, general, and administrative expenses of $4.9 million, $1.5 million and
$1.7 million in fiscal 2004, fiscal 2003 and fiscal 2002, respectively. These
impairment losses reflect this amount of book value over fair market value of
store related assets in certain locations where market conditions limit the
Company's ability to recover its investments.


                                       F-8





<Page>



Insurance reserves

     The Company uses a combination of insurance and self-insurance mechanisms
to provide for the potential liabilities for workers' compensation and employee
healthcare benefits. Liabilities associated with the risks that are retained by
the Company are estimated, in part, by considering historical claims experience,
demographic factors, severity factors and other actuarial assumptions. Such
liabilities are capped through the use of stop loss contracts with insurance
companies. The estimated accruals for these liabilities could be significantly
affected if future occurrences and claims differ from these assumptions and
historical trends. As of July 31, 2004 and July 29, 2003, these reserves were
$5.6 million and $5.4 million, respectively, and were included in "Other accrued
expenses" on the consolidated balance sheets.

Income taxes

     The Company accounts for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes. Deferred taxes are provided using the asset and
liability method, whereby deferred income taxes result from temporary
differences between the reported amounts in the financial statements and the tax
basis of assets and liabilities, as measured by presently enacted tax rates. The
Company establishes valuation allowances against deferred tax assets when it is
more likely than not the realization of those deferred tax assets will not
occur.

Store preopening costs

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

Earnings per share (EPS)

     The Company calculates EPS in accordance with the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share". SFAS
No. 128 requires dual presentation of basic EPS and diluted EPS on the face of
all income statements for all entities with complex capital structures. Basic
EPS is computed as net income divided by the weighted average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur from common shares issuable through stock options, warrants and
other convertible securities.

Marketing and advertising costs

     Marketing and advertising costs are included in selling, general and
administrative expenses and are expensed the first time the advertising campaign
takes place. Marketing and advertising expenses were $12.3 million, $10.1
million and $10.0 million for fiscal 2004, 2003 and 2002, respectively.

Operating leases

     The Company leases retail stores under operating leases. Most lease
agreements contain construction allowances, and rent escalations. For purposes
of recognizing incentives and minimum rental expenses on a straight-line basis
over the terms of the leases, the Company uses the date of initial possession to
begin amortization, which is generally when the Company enters the space and
begins to make improvements in preparation of intended use.

     For construction allowances, the Company records a deferred rent liability
in "Other accrued expenses" and "Deferred rent" on the consolidated balance
sheets and amortizes the deferred rent over the terms of the leases as
reductions to "Cost of sales including occupancy and buying costs" on the
consolidated statements of earnings.

     For premiums paid upfront to enter a lease agreement, the Company records a
deferred rent asset in "Other assets" on the consolidated balance sheets and
then amortizes the deferred rent over the terms of the leases as additional rent
expense on the consolidated statements of earnings.

     For scheduled rent escalation clauses during the lease terms or for rental
payments commencing at a date other than the date of initial occupancy, the
Company records minimum rental expenses on a straight-line basis over the terms
of the leases on the consolidated statements of earnings.


                                       F-9





<Page>



     Certain leases provide for contingent rents, which are determined as a
percentage of gross sales in excess of specified levels. The Company records a
contingent rent liability in "Other accrued expenses" on the consolidated
balance sheets and the corresponding rent expense when specified levels have
been achieved or when management determines that achieving the specified levels
during the fiscal year is probable.

Recent accounting pronouncements

     In January 2003, the FASB issued Interpretation No. 46 "Consolidation of
Variable Interest Entities, an Interpretation of Accounting Research Bulletin
No. 51, Consolidated Financial Statements". This interpretation applies
immediately to variable interest entities created after January 31, 2003 and to
variable interest entities in which an enterprise obtains an interest after that
date. It applies in the first fiscal year or interim period beginning after
December 15, 2003, to variable interest entities in which an enterprise holds a
variable interest it acquired before February 1, 2003. The Company has no
variable interest entities; therefore, the implementation of this interpretation
has not impacted the Company's financial statements.

     In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure" ("SFAS 148"). SFAS 148 amends Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), to
provide alternative methods of transition for companies that voluntarily change
to a fair value-based method of accounting for stock-based employee
compensation. SFAS 148 also amends the disclosure provisions of SFAS 123 for
both interim and annual financial statements. The disclosure provisions of SFAS
148 are effective for annual reports for fiscal years ending after December 15,
2002, and for interim financials for periods beginning after December 15, 2002.
The Company adopted the interim reporting provisions of SFAS 148 for its third
quarter ended April 26, 2003 and the annual reporting provisions for fiscal
2003.

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies the accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities
under SFAS 133, "Accounting for Derivative Instruments and Hedging Activities."
SFAS No. 149 is generally effective for contracts entered into or modified after
June 30, 2003 and for hedging relationships designated after June 30, 2003. The
adoption of SFAS No. 149 on July 1, 2003, as required, had no impact on the
Company's financial statements.

     In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity." SFAS
No. 150 establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. SFAS
No. 150 requires that certain financial instruments be classified as liabilities
that were previously considered equity. The adoption of this standard on July 1,
2003, as required, had no impact on the Company's financial statements.

     In March 2004, the Emerging Issues Task Force ("EITF") reached a consensus
on Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairments and Its
Application to Certain Investments" ("EITF 03-1"). EITF 03-1 provides a
three-step impairment model for determining whether an investment is
other-than-temporarily impaired and requires the Company to recognize such
impairments as an impairment loss equal to the difference between the
investment's cost and fair value at the reporting date. The guidance is
effective for the Company during the first quarter of fiscal 2005. The Company
does not believe that the adoption of EITF 03-1 will have a significant effect
on its financial statements.

Use of estimates

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

Comprehensive income

     Comprehensive income consists of net earnings and unrealized holding gains
and losses on marketable securities, net of tax.


                                      F-10





<Page>



Stock-based compensation

     The Company uses the intrinsic value method to account for stock-based
compensation in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", where compensation expense, if any,
is measured as the excess of the market price of the stock over the exercise
price on the measurement date. No compensation expense is recognized for the
Company's option grants that have an exercise price equal to the market price on
the date of grant or for the Company's Employee Stock Purchase Plan. In
accordance with SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-An Amendment of SFAS No. 123" ("SFAS
148"), the Company discloses the pro forma effects of recording stock-based
employee compensation plans at fair value on net earnings and net earnings per
common share--basic and diluted as if the compensation expense was recorded in
the financial statements.

     Had compensation cost for the Company's stock option plans been determined
based on the fair value at the option grant dates for awards in accordance with
the accounting provisions of SFAS No. 148 (which does not apply to awards prior
to fiscal 1996), the Company's net earnings and earnings per share for fiscal
2004, fiscal 2003 and fiscal 2002 would have been reduced to the pro forma
amounts indicated below:

<TABLE>
<CAPTION>
                                                                Fiscal Year Ended
                                                         ------------------------------
                                                         July 31,   July 26,   July 27,
(In thousands, except per share amounts)                   2004       2003       2002
                                                         ------------------------------
<S>                                                       <C>        <C>        <C>
   Net earnings as reported                               $30,932    $ 7,183    $36,922
   Deduct: Total stock-based employee compensation
      expense determined under fair value based
      method for all awards net of related tax effects     (2,060)    (1,939)    (1,429)
                                                         ------------------------------
   Pro forma net earnings                                 $28,872    $ 5,244    $35,493
                                                         ==============================

   Earnings per share
      Basic - as reported                                 $  1.05    $  0.23    $  1.01
                                                         ------------------------------
      Basic - pro forma                                   $  0.98    $  0.17    $  0.97
                                                         ------------------------------
      Diluted - as reported                               $  1.03    $  0.22    $  0.98
                                                         ------------------------------
      Diluted - pro forma                                 $  0.96    $  0.16    $  0.95
                                                         ------------------------------
</TABLE>

     The fair values of the options granted under the Company's fixed stock
option plans were estimated on the date of grant using the Black-Scholes option
pricing model with the following assumptions:

<TABLE>
<CAPTION>
                                                        Fiscal Year Ended
                                                 ------------------------------
                                                 July 31,   July 26,   July 27,
                                                   2004       2003       2002
                                                 --------   --------   --------
<S>                                                <C>        <C>        <C>
Weighted average risk-free interest rate            3.3%       3.1%       4.0%
Weighted average expected life (years)              5.0        5.0        5.0
Expected volatility of the market price of the
   Company's common stock                          39.1%      43.9%      43.9%
</TABLE>

     The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting restrictions
and are fully transferable. In addition, option valuation models require input
of highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in subjective input
assumptions can materially affect the fair value estimate, the actual value
realized at the time the options are exercised may differ from the estimated
values computed above.


                                      F-11





<Page>



Financial instruments

     Concentration of Credit Risk - Financial instruments, which potentially
subject the Company to concentrations of credit risk, are principally bank
deposits and short-term investments. Cash and cash equivalents are deposited
with high credit quality financial institutions. Short-term investments
principally consist of "triple A" or "double A" rated instruments. The Dunnigan
Realty LLC mortgage loan is a 20-year fully amortizing loan with a fixed rate of
5.33%.

     Fair Value of Financial Instruments - The carrying amounts of cash, cash
equivalents, short-term investments and accounts payable approximate fair value
because of the short-term nature, and maturity of such instruments.

Stock split

     The Company's Board of Directors approved a 2-for-1 stock split in the form
of a 100% stock dividend on the Company's issued and outstanding common stock in
May 2002. The stock dividend was distributed on May 31, 2002 to shareholders of
record on May 17, 2002. All historic share and per share information contained
in this report have been adjusted to reflect the impact of the stock split.

Treasury (reacquired) shares

     Shares repurchased are usually retired and treated as authorized but
unissued shares, with the cost of the reacquired shares debited to retained
earnings and the par value debited to common stock.

2.   Restatement of Financial Statements

     On February 7, 2005, the Office of the Chief Accountant of the Securities
and Exchange Commission ("SEC") issued a letter to the American Institute of
Certified Public Accountants expressing its views regarding certain operating
lease-related accounting issues and their application under accounting
principles generally accepted in the United States of America ("GAAP"). In light
of this letter, the Company's management initiated a review of its lease
accounting and determined that its then-current method of accounting for
leasehold improvements funded by landlord incentives or allowances under
operating leases (construction allowances) and its then-current method of
calculating straight-line rent expense for its operating leases was not in
accordance with GAAP. As a result, the Company restated its consolidated
financial statements for each of the fiscal years ended July 31, 2004, July 26,
2003, and July 27, 2002, in the Annual Report on Form 10K/A.

     The Company had historically accounted for construction allowances as
reductions to the related leasehold improvement asset on the consolidated
balance sheets and presented construction allowances received as a reduction in
capital expenditures in investing activities on the consolidated statements of
cash flows. Management determined that Financial Accounting Standards Board
("FASB") Technical Bulletin No. 88-1, "Issues Relating to Accounting for
Leases," requires these allowances to be recorded as a deferred rent liability
on the consolidated balance sheets and allowances received as a component of
operating activities on the consolidated statements of cash flows. Additionally,
this adjustment results in a reclassification of the deferred rent amortization
from "Depreciation and amortization expenses" to "Cost of sales including
occupancy and buying costs" on the consolidated statements of earnings.


                                      F-12





<Page>



     The Company had historically recognized its straight-line rent expense for
its operating leases over the lease term generally commencing with the opening
date for the store, which generally coincided with the commencement of the lease
payments per the lease. The store opening date also coincided with the
commencement of business operations, which corresponds to the intended use of
the property. Management re-evaluated FASB Technical Bulletin No. 85-3,
"Accounting for Operating Leases with Scheduled Rent Increases," and determined
that the lease term should commence on the date the Company takes possession of
the leased space for construction purposes, which is generally two months prior
to a store opening date. Furthermore, the Company determined that it should
recognize rent expense on a straight-line basis for rent escalations over
appropriate renewal periods, including option periods where failure to exercise
such options would result in an economic penalty (which is generally ten years
from the date of opening). Excluding tax impacts, the correction of this
accounting required the Company to record additional deferred rent in "Other
accrued expenses" and "Deferred rent" and to adjust "Retained earnings" on the
consolidated balance sheets as well as to correct amortization in "Costs of
sales including occupancy and buying costs" and "Depreciation and amortization"
on the consolidated statements of earnings for each of the three years in the
period ended July 31, 2004. In addition, the Company corrected certain other
balance sheet classification errors which resulted in an increase to "Property
and equipment" and a corresponding increase to "Retained earnings", which were
included in the cumulative effect adjustment, related to the reversal of an
impairment reserve. The Company also reclassified premiums paid upfront when
entering into certain lease agreements that had been classified as "Property and
equipment" to "Other assets" in 2004 and 2003, respectively. In addition, the
Company reclassified it's provision for impairments and asset disposals from
"Depreciation and amortization" to "Selling, general and administrative". The
cumulative effect of these accounting corrections is a reduction to retained
earnings of $11.9 million as of the beginning of fiscal 2002 and decreases to
earnings of $1.0 million and $0.9 million for the fiscal years 2002 and 2003 and
an increase of $0.8 million for fiscal year 2004, respectively.

     Following is a summary of the significant effects of these restatements on
the Company's consolidated balance sheets as of July 31, 2004, and July 26,
2003, as well as on the Company's consolidated statements of earnings and cash
flows for fiscal years 2004, 2003, and 2002 (in thousands, except share data):

<TABLE>
<CAPTION>
                                                         Consolidated Statements of Earnings
                                                      -----------------------------------------
                                                      As previously
Fiscal year ended July 31, 2004                          Reported     Adjustments   As restated
---------------------------------------------------   -------------   -----------   -----------
<S>                                                      <C>           <C>            <C>
Cost of sales, including occupancy and buying costs      $476,952       ($4,754)      $472,198
Gross profit                                              277,951         4,754        282,705
Selling, general and administrative                       207,570         4,907        212,477
Depreciation & amortization                                24,645        (1,448)        23,197
Operating income                                           45,736         1,295         47,031
Earnings before provision for income taxes                 44,178         1,295         45,473
Provision for income taxes                                 14,037           504         14,541
Net earnings                                               30,141           791         30,932
Earnings per share - basic                               $   1.02      $   0.03       $   1.05
Earnings per share - diluted                             $   1.00      $   0.03       $   1.03
                                                      =========================================
</TABLE>

<TABLE>
<CAPTION>
                                                      As previously
Fiscal year ended July 26, 2003                          Reported     Adjustments   As restated
---------------------------------------------------   -------------   -----------   -----------
<S>                                                      <C>            <C>           <C>
Cost of sales, including occupancy and buying costs      $453,178       ($1,599)      $451,579
Gross profit                                              253,943         1,599        255,542
Selling, general and administrative                       192,466         1,539        194,005
Depreciation & amortization                                20,856         1,406         22,262
Operating income                                            8,621        (1,346)         7,275
Earnings before provision for income taxes                 12,568        (1,346)        11,222
Provision for income taxes                                  4,524          (485)         4,039
Net earnings                                                8,044          (861)         7,183
Earnings per share - basic                               $   0.26        ($0.03)      $   0.23
Earnings per share - diluted                             $   0.25        ($0.03)      $   0.22
                                                      =========================================
</TABLE>


                                      F-13





<Page>



<TABLE>
<CAPTION>
                                                      As previously
Fiscal year ended July 27, 2002                          Reported     Adjustments   As restated
---------------------------------------------------   -------------   -----------   -----------
<S>                                                      <C>           <C>            <C>
Cost of sales, including occupancy and buying costs      $453,428      ($1,212)       $452,216
Gross profit                                              263,708        1,212         264,920
Selling, general and administrative                       186,375        1,681         188,056
Depreciation & amortization                                23,508        1,123          24,631
Operating income                                           53,825       (1,592)         52,233
Earnings before provision for income taxes                 59,283       (1,592)         57,691
Provision for income taxes                                 21,342         (573)         20,769
Net earnings                                               37,941       (1,019)         36,922
Earnings per share - basic                               $   1.04       ($0.03)       $   1.01
Earnings per share - diluted                             $   1.01       ($0.03)       $   0.98
                                                      =========================================
</TABLE>

<TABLE>
<CAPTION>
                                                                 Consolidated Balance Sheets
                                                      -----------------------------------------
                                                      As previously
July 31, 2004                                            Reported     Adjustments   As restated
---------------------------------------------------   -------------   -----------   -----------
<S>                                                      <C>           <C>           <C>
Deferred income tax asset                                $  10,583     $ 4,262       $  14,845
Leasehold improvements                                      60,978      32,311          93,289
Accumulated depreciation and amortization                 (162,346)     (9,898)       (172,244)
Property and equipment, net                                140,791      22,413         163,204
Other assets                                                 8,149         806           8,955
Total assets                                               461,835      27,481         489,316

Other accrued expenses                                      27,089      (2,842)         24,247
Long-term deferred tax liability                             1,315      (1,315)              0
Deferred rent                                                    0      40,319          40,319
Total liabilities                                          200,196      36,162         236,358
Retained earnings                                          197,438      (8,681)        188,757
Total shareholders' equity                                 261,639      (8,681)        252,958
Total liabilities and shareholders' equity                 461,835      27,481         489,316
                                                      =========================================
</TABLE>

<TABLE>
<CAPTION>
                                                      As previously
July 26, 2003                                            Reported     Adjustments   As restated
---------------------------------------------------   -------------   -----------   -----------
<S>                                                      <C>           <C>           <C>
Deferred income tax asset                                $  11,437     $  5,899      $  17,336
Leasehold improvements                                      61,014       30,016         91,030
Accumulated depreciation and amortization                 (154,033)     (10,373)      (164,406)
Property and equipment, net                                135,904       19,643        155,547
Other assets                                                 6,625        1,100          7,725
Total assets                                               423,145       26,642        449,787

Other accrued expenses                                      28,134       (2,672)        25,462
Deferred rent                                                    0       38,968         38,968
Deferred income tax liability                                  182         (182)             0
Total liabilities                                          196,252       36,114        232,366
Retained earnings                                          167,297       (9,472)       157,825
Total shareholders' equity                                 226,893       (9,472)       217,421
Total liabilities and shareholders' equity                 423,145       26,642        449,787
                                                      =========================================
</TABLE>


                                      F-14





<Page>



<TABLE>
<CAPTION>
                                                      Consolidated Statements of Shareholder's Equity
                                                      -----------------------------------------------
                                                         As previously
As of July 28, 2001                                         Reported     Adjustments   As restated
---------------------------------------------------   -----------------------------------------------
<S>                                                         <C>           <C>           <C>
Retained earnings                                           $364,491      ($7,592)      $356,899
                                                      ===============================================
</TABLE>

<TABLE>
<CAPTION>
                                                              Consolidated Statements of Cash Flows
                                                      -----------------------------------------------
                                                         As previously
Fiscal year ended July 31, 2004                             Reported     Adjustments   As restated
---------------------------------------------------   -----------------------------------------------
<S>                                                         <C>           <C>           <C>
Net cash provided by operating activities                   $ 14,671      $ 6,373       $ 21,044
Net cash used in investing activities                        (39,550)      (6,373)       (45,923)
                                                      ===============================================
</TABLE>

<TABLE>
<CAPTION>
                                                      As previously
Fiscal year ended July 26, 2003                          Reported     Adjustments   As restated
---------------------------------------------------   -----------------------------------------
<S>                                                      <C>           <C>           <C>
Net cash provided by operating activities                $ 56,822      $ 4,735       $ 61,557
Net cash used in investing activities                     (18,791)      (4,735)       (23,526)
                                                      =========================================
</TABLE>

<TABLE>
<CAPTION>
                                                      As previously
Fiscal year ended July 27, 2002                         reported      Adjustments   As restated
---------------------------------------------------   -----------------------------------------
<S>                                                      <C>           <C>           <C>
Net cash provided by operating activities                $ 72,373      $ 4,674       $ 77,047
Net cash used in investing activities                     (13,472)      (4,674)       (18,146)
                                                      =========================================
</TABLE>

3.   MARKETABLE SECURITIES AND INVESTMENTS

     The Company purchases short-term investments and marketable securities
which have been designated as "available-for-sale" as required by Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". Available-for-sale securities are carried at fair
value with the unrealized gains and losses reported in shareholders' equity
under the caption "Accumulated Other Comprehensive Income (Loss)". The cost of
securities sold is based on the specific identification method.

     The amortized cost, gross unrealized gains and losses and estimated fair
value based on published closing prices of securities at July 31, 2004 and July
26, 2003, by contractual maturity, are shown below.

<TABLE>
<CAPTION>
                               July 31, 2004           July 26, 2003
                           ---------------------   ---------------------
                            Estimated               Estimated
(In 000's)                 Fair Value     Cost     Fair Value     Cost
                           ----------   --------   ----------   --------
<S>                         <C>         <C>         <C>         <C>
Money Market Funds          $  4,676    $  4,676    $ 10,301    $ 10,301
Short-Term Investments        35,545      35,545      27,581      27,581
Tax Free Municipal Bonds      80,746      81,176      74,286      74,199
US Govt. Securities Fund       1,733       1,878       1,729       1,878
                            --------    --------    --------    --------
                            $122,700    $123,275    $113,897    $113,959
                            ========    ========    ========    ========
</TABLE>


                                      F-15





<Page>



     The scheduled maturities of marketable securities and investments at July
31, 2004 are:

<TABLE>
<CAPTION>
                               Estimated
Due In (in 000's)             Fair Value     Cost
                              ----------   --------
<S>                            <C>         <C>
One year or less               $ 62,746    $ 63,002
One year through five years      59,954      60,273
Six years through ten years          --          --
Over ten years                       --          --
                               --------    --------
                               $122,700    $123,275
                               ========    ========
</TABLE>

     Unrealized holding losses at July 31, 2004 were approximately $575,000.
Proceeds and gross realized (losses) gains from the sale of securities in fiscal
2004, 2003 and 2002 were $62.9 million and $0.8 million, $138.3 million and
$(0.7) million, $109.1 million and $1.0 million, respectively. For the purposes
of determining gross realized gains and losses, the cost of securities is based
upon specific identification.

     Gross unrealized losses and fair values of the Company's investments in the
US Government Securities Fund have been in a continuous unrealized loss position
deemed to be temporary for more than 12 months. The gross unrealized losses and
fair value of these securities were $145 and $1,733 and $149 and $1,729 as of
July 31, 2004, and July 26, 2003, respectively.

     The Company did not have any other investments in individual securities
that were in a continuous unrealized loss position deemed to be temporary for
more than 12 months at July 31, 2004 or July 26, 2003.

     The Company periodically reviews its investment portfolio to determine if
there is an impairment that is other than temporary, and to date, has not
experienced any impairments in its investments that were other than temporary.

     In evaluating whether the individual investments in the investment
portfolio are not other than temporarily impaired, the Company considered the
credit rating of the individual securities, the cause of the impairment of the
individual securities which are primarily related to interest rate increases and
the severity of the impairment of the individual securities which are all less
than 5% of the book value of the security.


                                      F-16





<Page>



4. LONG-TERM DEBT

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                     July 31,   July 26,
(In 000's)                             2004       2003
                                     --------   --------
<S>                                   <C>        <C>
Dunnigan Realty, LLC mortgage loan    $33,021    $34,000
Less: current portion                  (1,033)      (979)
                                      -------    -------
Total                                 $31,988    $33,021
                                      =======    =======
</TABLE>

     The Dunnigan Realty, LLC mortgage loan (the "mortgage") is collateralized
by a mortgage lien on a distribution/office facility in Suffern, New York (the
"Suffern facility"), of which the major portion is the Company's corporate
offices and distribution center. Dunnigan Realty, LLC, a wholly owned subsidiary
of the Company, receives rental income and reimbursement for taxes and common
area maintenance charges from the Company and two additional tenants that occupy
the Suffern facility that are not affiliated with the Company. All intercompany
transactions are eliminated. Payments of principal and interest on the mortgage,
a 20-year fully amortizing loan with a fixed interest rate of 5.33%, are due
monthly through July 2023. In connection with the mortgage, the Company paid
approximately $1.7 million in debt issuance costs. These costs were capitalized
and will be amortized over the life of the mortgage. Scheduled maturities of the
mortgage in each of the next five fiscal years are as follows: 2005-$1.0
million; 2006-$1.1 million; 2007-$1.1 million; 2008-$1.2 million and 2009-$1.4
million; 2010 and thereafter- $27.4 million. Interest expense relating to the
mortgage for fiscal 2004 and 2003 was approximately $1.8 million and $0,
respectively.

5. EARNINGS PER SHARE

     Basic earnings per share are computed based upon the weighted average
number of common shares outstanding. Diluted earnings per share are computed
based upon the weighted average number of common and common equivalent shares
outstanding. Common equivalent shares outstanding consist of shares covered by
stock options.

     A reconciliation of basic and diluted weighted average number of common
shares outstanding is presented below:

<TABLE>
<CAPTION>
                                                                        Fiscal Year Ended
                                                                 ------------------------------
                                                                 July 31,   July 26,   July 27,
(In 000's)                                                         2004       2003       2002
                                                                 --------   --------   --------
<S>                                                               <C>        <C>        <C>
Weighted average number of common shares outstanding - basic      29,413     31,219     36,495
Net effect of dilutive stock options based on the treasury
   Stock method using the average market price                       707        723      1,021
                                                                  ------     ------     ------
Weighted average number of common shares outstanding - diluted    30,120     31,942     37,516
                                                                  ======     ======     ======
</TABLE>

     Common stock equivalents of 2,000, 170,000 and 150,000 for the fiscal years
ended July 31, 2004, July 26, 2003 and July 27, 2002, respectively, were
excluded because such common stock equivalents were anti-dilutive.


                                      F-17





<Page>



6.   LITIGATION

     The Company is involved in various routine legal proceedings incident to
the ordinary course of business. On May 18, 2000, an action was filed against
the Company seeking compensatory and punitive damages for alleged unfair trade
practices and alleged breach of contract arising out of negotiations for an
acquisition the Company never concluded. The case went to a jury trial in 2003,
and a jury verdict of $30 million of compensatory damages was awarded against
the Company. On July 7, 2003, the court entered a final judgment of
approximately $32 million in compensatory damages and expenses, which is subject
to post-judgment interest. The trial court ruled against the plaintiffs' motion
for any punitive damages or pre-judgment interest.

     Based on this judgment, the Company recorded a litigation charge of $32
million in its fiscal 2003 fourth quarter results. The Company believes there is
no merit in the jury verdict and is vigorously pursuing an appeal. Plaintiffs
have cross-appealed seeking an increase in the amount of the judgment. If upon
appeal the judgment is subsequently modified or reversed, the Company will
adjust its litigation charge accordingly. Interest accrues on the unpaid
judgment at the statutory rate of 10% annually which the Company has provided
for at the rate of approximately $800,000 each quarter in its litigation
accrual. In the fourth quarter of fiscal 2004, as required as part of an
outstanding legal judgment, the Company deposited $38.6 million in an escrow
account, utilizing its operating funds. Such amount was dictated by the court to
include the $32 million judgment and accrued interest of $3.3 million, as well
as six months of prefunded interest ($1.5 million) and an additional 5% of the
amount due (including interest) at the time of the funding of such escrow (5% of
$36.8 million or $1.8 million), totaling $38.6 million. The escrow account is an
interest bearing account and is included in restricted cash and cash equivalents
on the Company's consolidated balance sheet.

     The Company believes that the outcome of all pending and threatened legal
proceedings (except for the matter as discussed above) will, on the whole, not
have a material adverse effect on its financial condition or results of
operations.

7.   EMPLOYEE BENEFIT PLANS

     The Company sponsors a defined contribution retirement savings plan
(401(k)) covering all eligible employees. The Company also sponsors an Executive
Retirement Plan for certain officers and key executives. Both plans allow
participants to defer a portion of their annual compensation and receive a
matching employer contribution on a portion of that deferral. During fiscal
2004, 2003 and 2002 the Company incurred expenses of $1,815,000, $1,363,000, and
$1,156,000, respectively, relating to the contributions to and administration of
the above plans. The Company also sponsors an Employee Stock Purchase Plan,
which allows employees to purchase shares of Company stock during each quarterly
offering period at a 10% discount through weekly payroll deductions. The Company
does not provide any additional postretirement benefits.

8.   INCOME TAXES

     The components of the provision for income taxes were as follows:

<TABLE>
<CAPTION>
                                    Fiscal Year Ended
                             ------------------------------
                             July 31,   July 26,   July 27,
(In 000's)                     2004       2003       2002
                             --------   --------   --------
<S>                           <C>        <C>        <C>
Federal:
   Current                    $10,268    $ 7,772    $16,517
   Deferred                     1,603     (4,778)       541
                              -------    -------    -------
                               11,871      2,994     17,058
                              -------    -------    -------
State:
   Current                      1,782      2,138      3,416
   Deferred                       888     (1,093)       295
                              -------    -------    -------
                                2,670      1,045      3,711
                              -------    -------    -------
Provision for income taxes    $14,541    $ 4,039    $20,769
                              =======    =======    =======
</TABLE>


                                      F-18





<Page>



     Significant components of the Company's deferred tax assets and liabilities
were as follows:

<TABLE>
<CAPTION>
                                                          July 31,   July 26,   July 27,
(In 000's)                                                  2004       2003       2002
                                                          --------   --------   --------
<S>                                                        <C>        <C>        <C>
Deferred tax assets:
   Inventory capitalization and inventory-related items    $ 4,121    $ 4,293    $ 1,927
   Capital loss carryover                                       85      2,847      2,759
   Employee benefits                                         3,050      2,438      2,754
   Litigation accrual                                       14,248     14,308          0
   Other items                                              15,605     14,277     14,925
                                                           -------    -------    -------
      Total deferred tax assets                             37,109     38,163     22,365
                                                           -------    -------    -------
Deferred tax liabilities:
   Depreciation                                             20,489     16,322      9,468
   Other items                                               1,690      1,658      1,432
                                                           -------    -------    -------
      Total deferred tax liabilities                        22,179     17,980     10,900
                                                           -------    -------    -------
Valuation allowance                                            (85)    (2,847)        --
                                                           -------    -------    -------
Net deferred tax assets                                    $14,845    $17,336    $11,465
                                                           =======    =======    =======
</TABLE>

     The fiscal 2004 total net deferred tax asset is presented on the balance
sheet as a current asset of $14.8 million. For fiscal 2003, the net deferred tax
asset is presented on the balance sheet as a current asset of $17.3 million. The
net deferred tax assets were comprised of approximately $2.3 million in state
deferred taxes and $12.5 million in federal deferred taxes. In fiscal 2003, a
valuation allowance of approximately $2.8 million had been established relating
to the capital loss carryforward, as it was more likely than not that the
utilization of such amount will not occur. In addition, the Company successfully
resolved several State and Federal audits during fiscal 2004 and 2003, resulting
in credits to its tax provision for approximately $2.0 million and $2.7 million,
respectively. The majority of the capital loss carryforward expired during
fiscal 2004 resulting in a reduction in the deferred tax asset and related
valuation allowance.

     Following is a reconciliation of the statutory Federal income tax rate and
the effective income tax rate applicable to earnings before income taxes:

<TABLE>
<CAPTION>
                                                        Fiscal Year Ended
                                                 ------------------------------
                                                 July 31,   July 26,   July 27,
                                                   2004       2003       2002
                                                 --------   --------   --------
<S>                                                <C>       <C>         <C>
Statutory tax rate                                 35.0%      35.0%      35.0%
State taxes - net of federal benefit                3.8%       6.1%       4.2%
Valuation allowance - loss carryforward              --       25.7%        --
Provision adjustment - resolution of tax audits    (4.5%)    (25.7%)       --
Other - net, primarily tax-free interest           (2.3%)     (5.1%)     (3.2%)
                                                   ----      -----       ----
Effective tax rate                                 32.0%      36.0%      36.0%
                                                   ====      =====       ====
</TABLE>


9.   COMMITMENTS AND CONTINGENCIES

Lease commitments

     The Company leases all of its stores and its distribution center. Certain
leases provide for additional rents based on percentages of net sales, charges
for real estate taxes, insurance and other occupancy costs. Store leases
generally have an initial term ranging from 5 to 15 years with one or more
5-year options to extend the lease. Some of these leases have provisions for
rent escalations during the initial term. The Company leases its 510,000 square
foot office and distribution center in Suffern, New York from Dunnigan Realty,
LLC, a wholly-owned subsidiary which was formed solely to purchase, own and
operate the entire facility (the "Suffern facility") including the portion
occupied by the Company. The Company's lease with Dunnigan Realty, LLC expires
in 2023, which coincides with the term of the underlying mortgage Dunnigan
Realty, LLC utilized to finance the purchase of the Suffern facility (see Note 4
for additional information regarding the mortgage). Dunnigan Realty, LLC
receives rental income and reimbursement for taxes and common area maintenance
charges from two additional tenants that occupy the Suffern facility that are
not affiliated with the Company. The rental income from the other tenants is
shown as "other income" on the Company's Consolidated Statements of Earnings.
All intercompany transactions are eliminated.


                                      F-19





<Page>



     A summary of occupancy costs follows:

<TABLE>
<CAPTION>
                                                Fiscal Year Ended
                                         ------------------------------
                                         July 31,   July 26,   July 27,
(in 000's)                                 2004       2003       2002
                                         --------   --------   --------
<S>                                      <C>        <C>        <C>
Base rentals                             $ 91,655   $ 88,807   $ 86,573
Percentage rentals                          2,761      3,898      2,591
Other occupancy costs                      30,056     29,069     25,349
                                         --------   --------   --------
                                          124,472    121,774    114,513
Less: Rental income from third parties     (1,527)      (779)        --
                                         --------   --------   --------
Total                                    $122,945   $120,995   $114,513
                                         ========   ========   ========
</TABLE>

     The following is a schedule of future minimum rentals under noncancellable
operating leases as of July 31, 2004, (in thousands):

<TABLE>
<CAPTION>
Fiscal Year                      Total
-----------                    --------
<C>                            <C>
2005                           $ 93,751
2006                             93,699
2007                             93,750
2008                             93,836
2009                             92,425
Subsequent years                492,841
                               --------
Total future minimum rentals   $960,302
                               ========
</TABLE>

     Although the Company has the ability to cancel certain leases if specified
sales levels are not achieved, future minimum rentals under such leases have
been included in the above table. The rent payable to Dunnigan Realty, LLC is
$2.8 million per fiscal year through fiscal year ending 2023.

Leases with related parties

     The Company leases two stores from its Chairman or related trusts. Future
minimum rentals under leases with such related parties which extend beyond July
31, 2004, included in the above schedule, are approximately $247,000 annually
and in the aggregate $1.0 million. The leases also contain provisions for cost
escalations and additional rent based on net sales in excess of stipulated
amounts. Rent expense for fiscal years 2004, 2003 and 2002 under these leases
amounted to approximately $308,000, $309,000 and $288,000, respectively.

Lines of credit

     At July 31, 2004, the Company had unsecured lines of credit with two banks
totaling $70 million with interest payable at rates below prime. None of the
Company's lines of credit contain any significant covenants or commitment fees.
The Company had no debt outstanding under any of the lines at July 31, 2004.
However, approximately $43 million of outstanding letters of credit reduced the
credit lines available.

Contractual obligations and commercial commitments

     The estimated significant contractual cash obligations and other commercial
commitments at July 31, 2004 are summarized in the following table:


                                      F-20





<Page>



<TABLE>
<CAPTION>
                                  ----------------------------------------------------------------
                                                    Payments Due by Period (000's)
                                  ----------------------------------------------------------------
Contractual                                     Fiscal   Fiscal 2006-   Fiscal 2008-   Fiscal 2010
Obligations                         Totals       2005        2007           2009        And Beyond
--------------------------------------------------------------------------------------------------
<S>                               <C>          <C>         <C>            <C>            <C>
Operating lease obligations       $  960,302   $93,751     $187,449       $186,261       $492,841
Mortgage principal and interest       52,583     2,768        5,535          5,535         38,745
                                  ----------------------------------------------------------------
                                  $1,012,885   $96,519     $192,984       $191,796       $531,586
                                  ================================================================
</TABLE>

<TABLE>
<CAPTION>
                                  -------------------------------------------------------------
                                          Amount of Commitment Expiration Period (000's)
                                  -------------------------------------------------------------
Other Commercial                             Fiscal   Fiscal 2006-   Fiscal 2008-   Fiscal 2010
Commitments                        Totals     2005        2007           2009        And Beyond
-----------------------------------------------------------------------------------------------
<S>                               <C>       <C>            <C>            <C>           <C>
Trade letters of credit           $38,048   $38,048        $--            $--           $--
Standby letters of credit           4,575     4,575         --             --            --
Firm purchase orders                  130       130         --             --            --
                                  -------------------------------------------------------------
                                  $42,753   $42,753        $--            $--           $--
                                  -------------------------------------------------------------
</TABLE>

     In addition to the commitments represented in the above table, the Company
enters into a number of cancelable and non-cancelable commitments during the
year. Typically, these commitments are for less than a year in duration and are
principally focused on the construction of new retail stores and the procurement
of inventory. The Company does not maintain any long-term or exclusive
commitments or arrangements to purchase merchandise from any single supplier.
Preliminary commitments with the Company's private label merchandise vendors
typically are made five to seven months in advance of planned receipt date.
Substantially all of the Company's merchandise purchase commitments are
cancelable up to 30 days prior to the vendor's scheduled shipment date.

10.  STOCK-BASED COMPENSATION PLANS

     At July 31, 2004, the Company had five stock-based compensation plans. The
Company's 1993 Incentive Stock Option Plan provides for the grant of incentive
stock options ("ISO's") to purchase up to 2,500,000 shares of the Company's
common stock. As of July 31, 2004, there were no shares under the 1993 plan
available for future grant. The Company's 1995 Stock Option Plan provides for
the granting of either ISO's or non-qualified options to purchase up to
4,000,000 shares of common stock. As of July 31, 2004, there were 98,949 shares
under the 1995 plan available for future grant. The Company's 2001 Stock Option
Plan provides for the granting of either ISO's or non-qualified options to
purchase up to 4,000,000 shares of common stock. As of July 31, 2004, there were
3,431,667 shares under the 2001 plan available for future grant.

     The exercise price of ISO's granted under any of the option plans may not
be less than the market price of the common stock at the date of grant.
Generally, all options granted under these plans vest over a five-year period
and expire after ten years from the date of grant.

     The Company's 1983 Incentive Stock Option Plan expired on April 4, 1993,
and the Company's 1987 Non-Qualified Stock Option Plan expired December 7, 1997.
Accordingly, the Company can no longer grant options under either of the two
expired plans. The Company's Employee Stock Purchase Plan allows employees to
purchase shares of the Company's common stock during each quarterly offering
period at a 10% discount through weekly payroll deductions.


                                      F-21





<Page>



     The following table summarizes the activities in all Stock Option Plans and
changes during each of the fiscal years presented:

<TABLE>
<CAPTION>
                                      July 31, 2004          July 26, 2003          July 27, 2002
                                  --------------------   --------------------   --------------------
                                              Weighted               Weighted               Weighted
                                               Average                Average                Average
                                              Exercise               Exercise               Exercise
                                   Options      Price     Options      Price     Options     Price
                                  ------------------------------------------------------------------
<S>                               <C>          <C>       <C>          <C>       <C>          <C>
Options outstanding - beginning
   of year                        2,950,495    $ 9.80    2,734,352    $ 8.14    3,164,870    $ 7.26
Granted                             269,625     13.82      909,883     12.54      797,266     10.95
Cancelled                           (81,860)    10.92      (59,200)     8.27     (444,580)    10.26
Exercised                          (464,281)     8.11     (634,540)     6.76     (783,204)     6.21
                                  ------------------------------------------------------------------
Outstanding end of year           2,673,979    $10.46    2,950,495    $ 9.80    2,734,352    $ 8.14
                                  ==================================================================
Options exercisable at year-end     860,647    $ 8.77      528,208    $ 7.56      334,108    $ 4.09
                                  ==================================================================
Weighted-average fair
   value of options granted
   during the year                             $ 5.50                 $ 5.34                 $ 4.81
                                               ======                 ======                 ======
</TABLE>

     The following table summarizes information about stock options outstanding
at July 31, 2004:

<TABLE>
<CAPTION>
                                 Number                                                   Number           Weighted
                           Outstanding as of   Weighted Average   Weighted Average    Exercisable as       Average
Range of Exercise Prices     July 31, 2004      Remaining Life     Exercise Price    of July 31, 2004   Exercise Price
----------------------------------------------------------------------------------------------------------------------
<S>                            <C>                <C>                  <C>                <C>               <C>
$2.50 - $ 5.69                   152,336          2.58 years           $ 3.50             151,536           $ 3.49
 7.03 -   7.81                   621,700          5.04 years             7.04             288,040             7.06
 9.75 -  11.25                   952,885          7.23 years            10.50             236,031            10.38
11.30 -  13.25                   109,100          7.81 years            12.51              25,940            11.34
13.51 -  15.90                   837,958          8.48 years            13.94             159,100            14.11
                           -------------------------------------------------------------------------------------------
$2.50 - $15.90                 2,673,979          6.87 years           $10.46             860,647           $ 8.77
                           ===========================================================================================
</TABLE>

                                    * * * * *


                                      F-22





<Page>



QUARTERLY RESULTS OF OPERATIONS (unaudited)
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
                             Fourth Quarter             Third Quarter            Second Quarter             First Quarter
                         -----------------------------------------------------------------------------------------------------
                            (As      (Previously      (As      (Previously      (As      (Previously      (As      (Previously
                         Restated)    Reported)    Restated)    Reported)    Restated)    Reported)    Restated)    Reported)
                         ---------   -----------   ---------   -----------   ---------   -----------   ---------   -----------
<S>                       <C>         <C>           <C>          <C>          <C>         <C>           <C>          <C>
Fiscal Year Ended
   July 31, 2004
Net sales                 $207,975    $207,975      $188,331     $183,331     $171,053    $171,053      $192,544     $192,544
Gross profit,
   including occupancy
   and buying costs         82,794      81,260        65,194       64,251       64,932      63,535        69,785       68,905
Provision for income
   taxes                     4,783       4,539         3,169        3,098        2,769       2,592         3,820        3,808
Net earnings                13,806      13,472         5,514        5,389        4,820       4,510         6,792        6,770
Earnings per share (1)
   Basic                  $   0.47    $   0.45      $   0.19     $   0.18     $   0.16    $   0.15      $   0.23     $   0.23
   Diluted                $   0.46    $   0.44      $   0.19     $   0.18     $   0.16    $   0.15      $   0.23     $   0.23
</TABLE>

<TABLE>
<CAPTION>
                             Fourth Quarter             Third Quarter            Second Quarter             First Quarter
                         -----------------------------------------------------------------------------------------------------
                            (As      (Previously      (As      (Previously      (As      (Previously      (As      (Previously
                         Restated)    Reported)    Restated)    Reported)    Restated)    Reported)    Restated)    Reported)
                         ---------   -----------   ---------   -----------   ---------   -----------   ---------   -----------
<S>                       <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
Fiscal Year Ended
   July 26, 2003
Net sales                 $188,131     $188,131     $165,692     $165,692     $167,372     $167,372     $185,926     $185,926
Gross profit,
   including occupancy
   and buying costs         72,207       72,278       55,836       55,338       60,634       60,107       66,865       66,220
Provision (benefit)
   for income taxes         (4,983)      (4,498)       1,468        1,468        2,627        2,627        4,927        4,927
Net earnings (loss)         (8,505)      (7,992)       2,436        2,609        4,493        4,668        8,759        8,759
Earnings (loss) per
   share (1)
   Basic                    ($0.24)      ($0.27)    $   0.08     $   0.09     $   0.15     $   0.16     $   0.24     $   0.24
   Diluted                  ($0.24)      ($0.27)    $   0.08     $   0.09     $   0.15     $   0.15     $   0.23     $   0.23
</TABLE>

(1) Earnings per share is computed independently for each period presented. As a
result, the total of the per share earnings for the four quarters does not equal
the annual earnings per share.


                                      F-23




                           STATEMENT OF DIFFERENCES

The registered trademark symbol shall be expressed as....................    'r'