SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K
              ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended July 25, 1998           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)

                                 (914) 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. [X].

As of October 16, 1998, 22,741,616 shares of common shares were outstanding. The
aggregate  market  value of the common  shares  (based upon the October 16, 1998
closing  price of $14.875 on the NASDAQ  Stock  Market) of The Dress Barn,  Inc.
held by  non-affiliates  was approximately  $276.6 million.  For the purposes of
such  calculation,  all outstanding  shares of Common Stock have been considered
held by  non-affiliates,  other than the 4,148,055 shares  beneficially owned by
Directors  and  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 December 14, 1998 are  incorporated  into Parts I and
III of this Form 10-K.
                              Page 1 of Cover Page


<PAGE>


<TABLE>
                              THE DRESS BARN, INC.
                                    FORM 10-K
                         FISCAL YEAR ENDED JULY 25, 1998
                                TABLE OF CONTENTS
<CAPTION>
PART I                                                                                  PAGE
<S>                                                                                    <C>        
        Item 1  Business
                   General                                                                3
                   Company Strengths and Strategies                                       3
                   Merchandising                                                          5
                   Buying and Distribution                                                6
                   Store Locations and Properties                                         7
                   Store Development, Operations and Management                           9
                   Management Information Systems                                        10
                   Trademarks                                                            10
                   Employees                                                             11
                   Seasonality                                                           11
                   Forward-Looking Statement and Factors Affecting Future Performance    11

        Item 2  Properties                                                               13

        Item 3  Legal Proceedings                                                        14

        Item 4  Submission of Matters to a Vote of Security Holders                      14

        Item 4A Executive Officers of the Registrant                                     15

PART II
        Item 5  Market for Registrant's Common Stock and                                 16
                 Related Security Holders Matters

        Item 6  Selected Financial Data                                                  17

        Item 7  Management's Discussion and Analysis of                                  18
                 Financial Condition and Results of Operations

        Item 8  Financial Statement and Supplementary Data                               21

        Item 9  Changes in and Disagreements with Accountants                            21
                 on Accounting and Financial Disclosure

PART III
 
        Item 10 Directors and Executive Officers of the Registrant                       21

        Item 11 Executive Compensation                                                   21

        Item 12 Security Ownership of Certain Beneficial Owners                          21
                 and Management

        Item 13 Certain Relationships and Related Transactions                           21

PART IV
        Item 14  Exhibits, Financial Statement Schedules and Reports on Form 8-K         22

</TABLE>

<PAGE>


                                     PART I

ITEM 1.  BUSINESS

General

     Dress Barn  operates  a national  chain of  value-priced  specialty  stores
offering in-season, moderate to better quality career apparel and accessories to
the fashion-conscious  working woman. In addition,  the Company's stores carry a
broad  assortment of casual wear to suit its customers'  total lifestyle  needs.
Over the past several years,  the Company has evolved from an off-price chain to
a value-priced  specialty retailer.  The Company  distinguishes  itself from (i)
off-price   retailers  by  its   carefully   edited   selection  of   in-season,
first-quality  merchandise,  service-oriented  salespeople  and its  comfortable
shopping environment, (ii) department stores by its value pricing and convenient
locations and (iii) other specialty apparel retailers by its continuous focus on
Dress Barn's target customer for more than 35 years. As part of this focus,  the
Company  has  successfully  developed  its own  line of  private  brands,  which
constituted  approximately  65% of net sales for the fiscal  year ended July 25,
1998 ("fiscal 1998").

     The Company's stores operate primarily under the names Dress Barn and Dress
Barn Woman,  the latter  featuring larger sizes of styles similar to those found
in the Dress Barn stores. The Company also operates combination Dress Barn/Dress
Barn Woman stores ("Combo  Stores"),  which carry both Dress Barn and Dress Barn
Woman  merchandise.  As of July 25, 1998, the Company  operated 669 stores in 43
states and the District of  Columbia,  consisting  of 341 Dress Barn stores,  68
Dress Barn  Woman  stores  and 260 Combo  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  9,000 square feet.
Based on the success of its Combo Stores,  the Company is focusing its expansion
strategy  on opening new Combo  Stores and  converting  existing  Dress Barn and
Dress Barn Woman stores to the  combination  format.  The Company  plans to open
approximately  60  additional  Combo Stores by the end of its fiscal year ending
July 31, 1999 ("fiscal 1999").


Company Strengths and Strategies

     Dress Barn is one of the largest  national  specialty store chains offering
women's career  fashions at value prices.  Dress Barn  attributes its success to
its: (i) strong name  recognition  and loyal customer base;  (ii)  long-standing
relationships with vendors of quality merchandise;  (iii) experienced management
team; (iv) commitment to technology; (v) strong, consistent customer focus; (vi)
low cost operating structure; and (vii) 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 for the working woman. The
Company's 669 store locations in 43 states and the District of Columbia  provide
it with a nationally  recognized name. In addition,  the Company believes it has
developed high awareness among its target customers through on-going advertising
and local marketing activities.

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


<PAGE>

     The three senior  members of the Company's  merchandising  team have worked
together at Dress Barn for over 15 years, with each having substantial  previous
fashion retailing experience.  This team engineered the Company's evolution from
an off-price retailer to a value-priced specialty store. The Company's executive
officers have an average tenure at Dress Barn of 16 years.  The stability of its
management has enabled the Company to develop a shared culture and vision and to
maintain its focus on growing and refining its business.

     Dress  Barn has used  technology  to  improve  merchandising  and  customer
service, reduce costs and enhance productivity. The Company continues to enhance
its  management  information  systems,  which  include an IBM AS/400  integrated
financial system and IBM 4694 point-of-sale  system. The enhanced  point-of-sale
system  allows the Company to provide  better  service to  customers by reducing
paperwork and decreasing the average  transaction  processing time. This enables
sales associates to spend more time assisting  customers.  The Company continues
to enhance its laptop system that delivers  up-to-date store related information
to its regional  sales  managers.  The  Company's  distribution  center  systems
continue to be refined, further reducing per-unit distribution costs.

     All aspects of Dress Barn's  business are designed to be  responsive to the
Dress Barn customer.  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
merchandise  arranged for ease of shopping,  comfortable  store  environment and
friendly  customer  service  embody Dress Barn's strong focus on its  customers.
Dress Barn's  comprehensive  training program encourages its sales associates to
assist  customers  in a low-key and  friendly  manner.  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  balance sheet and internally  generated  funds provide a
competitive   advantage  that  enables  the  Company  to  pursue  its  long-term
strategies  regarding new stores,  capital  expenditures and  acquisitions.  The
Company  has an ongoing  strategy  of  supplementing  the  Company's  growth and
enhancing shareholder value through expansion into related businesses, including
through   acquisitions.   The  Company  considers  three  types  of  acquisition
opportunities:   (i)  real  estate  oriented  acquisitions  to  gain  access  to
attractive  sites and favorable lease terms;  (ii) other retail  operations that
could benefit from Dress Barn's  management and expertise,  and (iii)  alternate
channels of distribution,  such as mail order catalogs. The Company is currently
developing its own mail order catalog,  with the first mailing planned for Fall,
1999.

     The  Company's  objective  is to  become  the  leading  national  chain  of
value-priced  specialty  apparel stores offering career fashions to the moderate
income  working  woman.  The Company has developed  the following  strategies to
achieve this goal: (i) further  development of Dress Barn's private brands; (ii)
maintenance of Dress Barn's  merchandise  focus; (iii) continuation of the Combo
Store roll-out; (iv) further development of customer targeted marketing; and (v)
further improvement of customer service.

     The Company has  gradually  increased  the  percentage  of sales from goods
manufactured  under Dress Barn's  private  brands,  as well as goods produced by
national brand  manufacturers  exclusively for Dress Barn, to approximately  65%
and 10%,  respectively,  of the Company's  net sales for fiscal 1998.  While the
Company  intends to continue to offer a balanced mix of both national brand name
and private brand  merchandise,  it plans to continue to increase the percentage
of private  brand  merchandise  sold by its  stores,  including  its  successful
Westport(R)  Princeton  Club(R),  Atrium(R) brands, as well as its Dress Barn(R)
label.  Dress  Barn's  private  brands  typically  provide  more  value  for its
customers.


<PAGE>

     The Company's  stores carry a broad  assortment  of career wear,  including
dresses,  suits,  separates,  blouses,  sweaters and other knitwear,  as well as
casual wear items,  that are carefully edited to suit the lifestyle needs of its
target customer.  Dress Barn does not seek to dictate fashion trends;  rather it
offers current styles but avoids fashion-forward  merchandise that is subject to
rapidly  changing  trends.  While career fashions  remain the Company's  primary
focus,  it continues to adapt to the evolving  definition  of "career,"  such as
casual  Fridays.  In  addition,  the  Company  seeks to  broaden  its  appeal by
expanding its merchandise mix.

     Based on the success of its larger size Combo Stores,  the Company  expects
most future store  openings to be Combo Stores  between  9,000 and 10,000 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.  Of the  approximately  80 additional  Combo units
which the Company plans to open by the end of fiscal 1999, 60 are expected to be
new stores and 20 are expected to be  conversions  from  existing  Dress Barn or
Dress  Barn  Woman  stores.  The  Company  expects to  continue  to open  stores
primarily in strip centers, while also seeking downtown locations.

     In  conjunction  with its  strategy  of adding  Combo  Stores,  the Company
continues  to close or relocate  its  underperforming  locations  and expects to
close  approximately 40 such locations during fiscal 1999, compared to 60 closed
in fiscal  1998.  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 Combo
Stores,  net of store  closings,  is expected to result in an  approximately  8%
increase in the Company's aggregate store square footage for fiscal 1999.

     The Company uses several  marketing tools,  such as transactional  analyses
through  point-of-sale  systems and customer surveys,  in order to determine the
preferences  of its target  customers,  working  women ages  25-55.  The Company
continues  to collect  data from its credit  card  program and is  developing  a
marketing program utilizing such data. Management believes that these tools will
further  improve the Company's  ability to align its operations with the demands
of its target customers on a consistent basis.

     Dress Barn continually seeks to improve the customer's shopping experience.
For example, the Company's enhanced management information systems enables store
managers and sales associates to spend more time serving customers.  The Company
utilizes an ongoing video-training program to improve customer service and sales
associates' product knowledge and selling skills.


Merchandising

     In addition to the  Company's  broad  assortment  of career wear and casual
wear, the Company offers other wardrobe items  including  accessories,  jewelry,
hosiery  and shoes.  Dress Barn and Dress Barn Woman are  organized  as separate
divisions, each with a separate merchandising team.


<PAGE>

     A key component of the Company's  merchandising strategy is to increase the
percentage of its sales derived from private  brands.  Private  brands allow the
Company to differentiate  itself from other retailers by providing an assortment
of  merchandise  that is not  available  elsewhere  and to improve the Company's
control over the flow of merchandise  into its stores by enabling the Company to
better specify  quantities,  styles,  colors, size breaks and delivery dates. In
addition,  the Company  believes private brands provide it with more flexibility
in the marketing  process by allowing for higher  initial  mark-ons and limiting
the ability of customers to compare prices with competing retailers. The Company
believes it has the expertise to execute its private  brand  strategy due to its
extensive  experience  sourcing  goods,  primarily  overseas,  its position as a
merchandiser of established  fashions and its already successful line of private
brands.  The percentage of the Company's sales generated from private brands has
increased to  approximately  65% in fiscal 1998 from 55% in fiscal 1997, and 40%
in fiscal 1996.

     The  Company  continues  to expand  its  successful  shoes and  petite-size
departments.  As of July 25, 1998, 194 stores had shoe departments and 75 stores
featured  petites.  The Company  expects to add another  approximately  100 shoe
departments and approximately 25 petite departments in fiscal 1999.

     Virtually all  merchandising  decisions  affecting the Company's stores are
made centrally. Merchandising policy is under the direction of the Chairman, the
President and six  merchandise  managers.  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  size  of  particular  stores.  To  keep
merchandise  seasonal and in current  fashion,  inventory is reviewed weekly and
markdowns are taken as appropriate  to expedite  selling.  The Company's  stores
offer  first-quality  current  merchandise,   with  approximately  half  of  the
Company's sales volume derived from sportswear,  and the remainder consisting of
dresses, suits, blazers and accessories.


Buying and Distribution

     Buying is conducted on a departmental  basis for each of the Dress Barn and
Dress  Barn  Woman  divisions  by the  Company's  staff  of over 35  buyers  and
assistant buyers supervised by the President and six merchandise  managers.  The
Company also uses independent  buying  representatives in New York and overseas.
The Company obtains its nationally  branded  merchandise from  approximately 350
vendors and its private  brand  merchandise  from more than 50 vendors.  Typical
lead  times for the  Company in making  purchases  from its  vendors  range from
approximately  one month for  items  such as  t-shirts,  socks  and  hosiery  to
approximately  six months for items such as suits and dresses.  Generally,  lead
times do not  vary  significantly  between  the  Company's  private  brands  and
nationally branded merchandise.

     The  Company  has in the  past  always  been  able to  purchase  sufficient
quantities of  first-quality  domestic  merchandise  at  attractive  prices from
vendors who typically  sell to department and specialty  stores,  and management
believes that there will continue to be an adequate  supply of such  merchandise
available.  The  Company  has also  established  strong  relationships  with its
private  label  manufacturers,  and  does not  anticipate  any  difficulties  in
obtaining  sufficient  quantities  of its private label  merchandise.  No vendor
accounted for as much as 5% of the Company's purchases in fiscal 1998.


<PAGE>


     All merchandise 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  seeks to use its strong  relationships
with  vendors to lower its  operating  costs by shifting  freight and  insurance
costs to the vendors and by requiring them to provide  ancillary  services.  For
example,  over 90% of the Company's  merchandise is  pre-ticketed by vendors and
over 35% is pre-packaged for distribution to stores,  which allows cross-docking
in the  distribution  center to the  stores.  In  addition,  nearly  half of the
hanging garments purchased by the Company are delivered on floor-ready hangers.

     The Company  generally does not warehouse  merchandise,  but distributes it
promptly to stores.  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.
The Company may on occasion buy certain  basic  clothing that does not change in
style from year to year at  attractive  prices and  warehouse  such items at its
distribution center until needed.

Store Locations and Properties


     As of July 25, 1998,  the Company  operated 669 stores in 43 states and the
District  of  Columbia.  334 of the stores  were  conveniently  located in strip
centers and 258 stores were located in outlet  centers.  During  fiscal 1998, no
store  accounted for as much as 1% of the Company's  total sales.  

<TABLE>
     The following  table  indicates the type of shopping  facility in which the
stores were located:
<CAPTION>
                                                                                          Dress Barn
                                                                  Dress Barn                Woman                 Combo
      Type of Facility                                               Stores                 Stores                Stores
<S>                                                               <C>                     <C>                     <C>
Strip Shopping Centers                                                  198                    32                   104
Outlet Malls and Outlet Strip Centers                                    97                    32                   129
Free Standing, Downtown and Enclosed Malls                               46                     4                    27

Total                                                                   341                    68                   260
</TABLE>
<PAGE>
<TABLE>
     The following table  indicates the states in which the stores  operating on
July 25, 1998 were located, and the number of stores in each state:
<CAPTION>
Location                                                                   DB                 DBW              Combos
<S>                                                                       <C>                 <C>              <C>
Alabama                                                                     1                   -                   3
Arizona                                                                     6                   1                   5
Arkansas                                                                    1                   -                   2
California                                                                 25                   4                  16
Colorado                                                                    5                   1                   4
Connecticut                                                                14                   3                  12
District of Columbia                                                        -                   -                   1
Delaware                                                                    3                   -                   2
Florida                                                                    13                   1                   7
Georgia                                                                    12                   3                  12
Idaho                                                                       2                   1                   1
Illinois                                                                   10                   -                  14
Indiana                                                                     8                   -                   3
Iowa                                                                        -                   -                   2
Kansas                                                                      2                   1                   4
Kentucky                                                                    4                   -                   4
Louisiana                                                                   -                   -                   2
Maine                                                                       2                   1                   -
Maryland                                                                    9                   2                  10
Massachusetts                                                              21                   3                  14
Michigan                                                                   16                   1                  11
Minnesota                                                                   1                   -                   2
Mississippi                                                                 1                   -                   3
Missouri                                                                    3                   1                   8
Nebraska                                                                    -                   -                   2
Nevada                                                                      2                   -                   3
New Hampshire                                                               3                   -                   4
New Jersey                                                                 25                  12                  12
New Mexico                                                                  -                   -                   -
New York                                                                   35                   7                  21
North Carolina                                                             18                   6                   6
Ohio                                                                        7                   1                   9
Oklahoma                                                                    1                   -                   1
Oregon                                                                      2                   2                   1
Pennsylvania                                                               31                   7                  13
Rhode Island                                                                1                   -                   -
South Carolina                                                             14                   1                   3
Tennessee                                                                   8                   3                   7
Texas                                                                      13                   1                  14
Utah                                                                        2                   1                   3
Vermont                                                                     1                   -                   -
Virginia                                                                   20                   3                   9
Washington                                                                  2                   1                   4
West Virginia                                                               -                   -                   1
Wisconsin                                                                   -                   -                   5

Total                                                                     341                  68                 260
</TABLE>

<PAGE>


Store Development, Operations and Management

     In  considering  new store  locations,  the  Company  typically  focuses on
several  criteria,  such as 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.  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 each new lease. The committee 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 of the
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  complete  outfits
coordinated from among the stores' fashion offerings.

     All stores are directly managed and operated by the Company.  Each store is
staffed by a supervisor,  who may be the store  manager,  and at least one sales
associate  during non-peak  hours,  with additional  sales  associates  added as
needed at peak hours.  The  supervisors and 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 90 District Sales Managers.  District
sales  managers  typically  visit  each  store  at least  once a week 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.   The  Company  utilizes
comprehensive  training  programs at the store level in order to ensure that the
customer will receive friendly and helpful  service,  which include (i) on-going
video  training,  (ii)  workbooks and manuals and (iii)  one-on-one  training of
sales associates by store managers.

     In fiscal 1998,  approximately  57% of the Company's sales were paid for by
credit card, with the remainder being by cash or check. The Company utilizes its
own Dress Barn credit card.  Consistent  with the other credit cards it accepts,
the Company  assumes no credit risk with respect to its Dress Barn card but pays
a  percentage  of sales as a  service  charge.  The  number of  cardholders  has
steadily  increased  to  approximately  1.1  million   currently.   The  average
transaction  on the Dress Barn credit card during fiscal 1998 was  approximately
50%  more  than  the  average  of  all  other   transactions   and   represented
approximately 13% of the Company's sales.

     The Company mainly uses print  advertising that emphasizes  current fashion
apparel at value prices. The Company also uses direct mail programs,  with seven
mailings  during  fiscal  1998,  each to  approximately  one million  households
including its credit card  holders.  At the store level,  the store  supervisors
host local  marketing  programs,  including  fashion  shows and in-store  events
designed to create greater awareness of Dress Barn's  merchandise.  In addition,
the Company  considers its credit card program to be a significant  component in
the  development  of its  targeted  marketing  efforts,  enabling  it to develop
segmented marketing programs.

     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,  while downtown and  freestanding  stores are
usually open two nights per week.

Management Information Systems

     In the past several years, the Company has made a significant investment in
technology to improve customer  service,  gain efficiencies and reduce operating
costs.  Dress Barn has installed an IBM AS/400  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.  In August 1997,  the Company  completed
rolling out to all its stores IBM 4694 point-of-sale  systems with price look-up
capabilities  for both  inventory  and sales  transactions.  These  systems  can
accommodate  substantial  growth in additional  stores with minimal  incremental
investment.  The Company has also  developed  and  continues  to refine a laptop
system that delivers up-to-date store-related  information to its Regional Sales
Managers.

     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
on-line,  organized by department,  class,  vendor,  style, color and store. The
system enables the Company to mark down  slow-moving  merchandise or efficiently
transfer it to stores selling such items more rapidly. Through sophisticated yet
inexpensive  off-the-shelf  systems,  the Company analyzes historical hourly and
projected sales trends to efficiently schedule sales personnel, minimizing labor
costs while producing a higher level of customer  service.  The Company believes
that such investments in technology enhance operating  efficiencies and position
Dress Barn for future growth.

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.  The Company  believes  the  following  trademarks  are  materially
important to its business:


Trademark                                                     Registration Date
---------                                                     -----------------
Dress Barn                                                        March 5, 1985
Westport, Ltd.                                                  August 20, 1985
Atrium                                                           March 16, 1993
Princeton Club                                                   April 30, 1985
Lise J.                                                       February 15, 1984
Lee David Ltd.                                                      May 7, 1985


     Approximately 5% of the Company's stores currently in operation, located in
outlet centers, operate under the name Westport Ltd. and Westport Woman. Subject
to landlord  approval and  underlying  lease  restrictions,  if any, the Company
intends  to  convert as many of these  stores as  possible  to the Dress Barn or
Dress Barn Woman name by the end of fiscal 1999.


<PAGE>

Employees

     As of July 25, 1998, the Company had approximately  7,000 employees of whom
approximately  4,000  worked  part time.  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 Christmas  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 contains in the "Business"  section, in the
"Properties" section, in the "Management's  Discussion and Analysis of Financial
Condition and Results of Operations" 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 below and elsewhere in this Form 10-K.

     Among the factors that could cause actual results to differ materially are,
but are not limited to, the following:  general economic conditions and consumer
confidence;   competitive  factors  and  pricing  pressures;  the  availability,
selection and purchasing of attractive  merchandise on favorable  terms;  import
risks,  including  potential  disruptions  and  duties,  tariffs  and  quotas on
imported  merchandise,  including  economic and political  problems in countries
from which  merchandise is imported;  the Company's  ability to predict  fashion
trends; consumer apparel buying patterns; adverse weather conditions;  inventory
risks due to shifts in market  demand and other factors that may be described in
the Company's filings with the Securities and Exchange  Commission.  The Company
does not undertake to publicly update or revise the  forward-looking  statements
even if  experience or future  changes make it clear that the projected  results
expressed or implied therein will not be realized.

     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.


<PAGE>

     The Company competes primarily with department stores, off-price retailers,
specialty  stores,  discount stores and mass  merchandisers,  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  department  stores  continue to be promotional and
reduce  their  selling  prices,  and certain of the  Company's  competitors  and
vendors  have opened  outlet  stores  which  offer  off-price  merchandise.  The
Company's sales and results of operations may also be affected by close-outs 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 growth of the Company is dependent,  in large part,  upon the Company's
ability to successfully  execute its strategy of adding new stores and expanding
into related  businesses.  The success of the  Company's  growth  strategy  will
depend  upon a number of  factors,  including  the  identification  of  suitable
markets  and sites for new Combo  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,  obtain
acceptance in markets in which it currently has limited or no presence,  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
successfully  implement its growth strategy of continuing to introduce the Combo
Stores or to maintain its current growth levels.

     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.  In addition,  the Company has increased its use of private  brands.
The nature of the Company's  obligations with respect to private brand purchases
may make it more  difficult  to respond to  changing  trends by  reducing  order
quantities.  These  factors  could  result in higher  markdowns  and lower gross
profits to the extent  that sales of private  brand  merchandise  are lower than
expected.

     The Company's  success is largely dependent on the efforts and abilities of
its executive  officers,  particularly  Elliot S. Jaffe,  its Chairman and Chief
Executive  Officer,  and Burt  Steinberg,  its  President  and  Chief  Operating
Officer.  The loss of the services of any of its executive officers could have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of operations.

     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.


<PAGE>

     The Company is committed to being leaner and more  productive.  The Company
is planning to continue to close or relocate underperforming stores and maintain
tight cost  controls in all areas with a view to 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

<TABLE>
     The Company leases all its stores.  Store leases  generally have an initial
term  ranging  from 5 to 15 years with one or more 5-year  options to extend the
lease. The table below,  covering all stores operated by the Company on July 25,
1998,  indicates the number of leases expiring  during the period  indicated and
the number of expiring leases with and without renewal options:

<CAPTION>
                                                        Leases                    Number with                  Number Without
Fiscal Years                                           Expiring                 Renewal Options                Renewal Options
<S>                                                   <C>                       <C>                            <C>
1999                                                     129                          75                            54
2000                                                     150                         135                            15
2001                                                      98                          87                            11
2002-2004                                                240                         204                            36
2005 and thereafter                                       52                          45                             7
                                                         ---                         ---                           ---

Total                                                    669                         546                           123
                                                         ---                         ---                           ---
</TABLE>


     New store leases  generally  provide for a base rent of between $10 and $20
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 25, 1998,  and excluding  locations  acquired  after July 25, 1998,  for
fiscal 1999 are approximately  $54.2 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 option 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 executive  offices and  distribution  facilities in
Suffern, New York. The Suffern facility has a total of 510,000 square feet, with
100,000  square  feet  of  office  space  and  the  remainder  for   merchandise
distribution. This lease expires on April 30, 2007, with three five-year options
to extend the lease.  Management  believes the Suffern facility is sufficient to
meet its current needs and any foreseeable  increase in the Company's store base
resulting from expansion or acquisition.



<PAGE>


ITEM  3.  LEGAL PROCEEDINGS

     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.



<PAGE>



ITEM 4A.   EXECUTIVE OFFICERS OF THE REGISTRANT


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


Name                  Age                 Positions

Elliot S. Jaffe       72                  Chairman of the Board,
                                          Chief Executive Officer and Director

Burt Steinberg        53                  President, Chief Operating Officer and
                                          Director

David R. Jaffe        39                  Executive Vice President

Armand Correia        52                  Senior Vice President and Chief
                                          Financial Officer

Eric Hawn             48                  Senior Vice President
                                          Store Operations

Elise Jaffe           43                  Senior Vice President
                                          Real Estate


     Mr. Elliot S. Jaffe has been Chief  Executive  Officer of the Company since
1966.

     Mr. Steinberg has been President and Chief Operating Officer of the Company
since 1989.

     Mr. David R. Jaffe has been  Executive  Vice President of the Company since
1996. He joined the Company in 1992 as Vice President  Business  Development and
became  Senior Vice  President  in 1995.  Mr.  Jaffe is the son of Elliot S. and
Roslyn S. Jaffe, Secretary, Treasurer and Director of the Company.

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

     Mr. 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, Secretary, Treasurer and Director of the Company.

         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.



<PAGE>

                                     PART II

ITEM  5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
              SECURITY HOLDER  MATTERS


Market Prices of Common Stock

<TABLE>
     The Common Stock of The Dress Barn, Inc. is traded  over-the-counter on the
NASDAQ National Market System under the symbol DBRN.

     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.

<CAPTION>

                                                         Fiscal 1998                             Fiscal 1997
                                                          Bid Prices                              Bid Prices
                                                     High            Low                    High             Low
Fiscal Period
<S>                                                 <C>             <C>                     <C>             <C>  
         First Quarter                                $26.38         $19.00                  $13.88           $8.63
         Second Quarter                               $28.38         $21.75                  $17.00          $13.38
         Third Quarter                                $32.38         $25.75                  $18.75          $13.38
         Fourth Quarter                               $31.00         $22.50                  $22.00          $14.75
</TABLE>


Number of Record Holders

     The number of record  holders of the  Company's  common stock as of October
15, 1998 was approximately 2,000.

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.


<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
<CAPTION>
Dollars in thousands except per share information                                  Fiscal Year Ended
                                               -------------------------------------------------------------------------------------
                                                       July 25,         July 26,         July 27,         July 29,         July 30,
                                                           1998             1997             1996             1995             1994
                                               -------------------------------------------------------------------------------------
<S>                                                    <C>              <C>              <C>              <C>              <C>     
     Net sales                                         $598,175         $554,843         $515,522         $500,836         $457,325
     Cost of sales, including
       occupancy and buying costs                       381,354          358,093          337,998          327,166          301,154
                                                ------------------------------------------------------------------------------------

     Gross profit                                       216,821          196,750          177,524          173,670          156,171

     Selling, general and
       administrative expenses                          142,098          135,384          132,176          133,253          120,131

     Depreciation & amortization                         17,758           16,139           15,828           14,063           12,127

     Write-down of underperforming
       and closed store assets                             ----             ----            2,848             ----             ----
                                                ------------------------------------------------------------------------------------

     Operating income                                    56,965           45,227           26,672           26,354           23,913

     Interest income- net                                 6,385            4,800            3,343            2,670            1,727
                                                ------------------------------------------------------------------------------------

        Earnings before
          income taxes                                   63,350           50,027           30,015           29,024           25,640

     Income taxes                                        23,123           18,260           11,106           10,739            9,487

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

        Net earnings                                    $40,227          $31,767          $18,909          $18,285          $16,153

                                               =====================================================================================
     Earnings per share - basic                           $1.75            $1.40            $0.84            $0.82            $0.73
                                               =====================================================================================
                                               =====================================================================================
     Earnings per share - diluted                         $1.70            $1.33            $0.84            $0.82            $0.73
                                               =====================================================================================

Balance sheet data:
     Working capital                                   $170,412         $153,579         $122,730         $103,310          $89,051
     Total assets                                      $345,129         $309,502         $265,723         $243,521         $217,863
     Long-term debt                                          --           $3,500           $3,500           $3,500               --
     Shareholders' equity                              $265,608         $232,822         $199,096         $178,938         $159,198

Percent of net sales:
     Cost of sales, including
       occupancy and buying costs                         63.8%            64.5%            65.6%            65.3%            65.9%
     Gross profit                                         36.2%            35.6%            34.4%            34.7%            34.1%
     Selling, general and
       administrative expenses                            23.8%            24.4%            25.6%            26.6%            26.3%
     Operating income                                      9.5%             8.2%             5.2%             5.3%             5.2%
     Net earnings                                          6.7%             5.7%             3.7%             3.7%             3.5%

<FN>
Certain  reclassifications  have been made to prior  years' data to conform with
the current year's presentation
</FN>
</TABLE>


<PAGE>

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

Results of Operations

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

<CAPTION>
                                                                                              Fiscal Year Ended
                                                                                July 25,           July 26,           July 27,
                                                                                    1998               1997               1996
<S>                                                                             <C>                <C>                <C>   
Net sales                                                                          100.0%             100.0%             100.0%
Cost of sales, including
  occupancy and buying costs                                                        63.8%              64.5%              65.6%
Selling, general and
  administrative expenses                                                           23.8%              24.4%              25.6%
Depreciation and amortization                                                        3.0%               2.9%               3.1%
Write-down of underperforming and
  closed store assets (see footnote 8)                                                 --                 --               0.6%
Interest income - net                                                                1.1%               0.9%               0.6%
Earnings before income taxes                                                        10.6%               9.0%               5.8%
Net earnings                                                                         6.7%               5.7%               3.7%
</TABLE>


Fiscal 1998 Compared to Fiscal 1997

     Net sales  increased by 7.8% to $598.2  million for the 52 weeks ended July
25, 1998 ("fiscal  1998"),  from $554.8  million for the 52 weeks ended July 26,
1997 ("fiscal  1997"),  due  primarily to a 3.6%  increase in  comparable  store
sales.  The  increase in  comparable  store sales  resulted  primarily  from the
positive  reaction by customers to the Company's  merchandise  offerings and the
generally   improved   retail  climate  for  apparel  during  fiscal  1998.  The
improvement in net sales was also  attributable to an  approximately 6% increase
in total selling square footage.  This increase in square footage was due to the
opening of new combination  Dress Barn/Dress Barn Woman stores ("combo stores"),
which carry both Dress Barn and Dress Barn Woman merchandise, and the conversion
of single-format stores into combo stores. This offset the square foot reduction
from the closing of  underperforming  stores.  The number of stores in operation
declined to 669 stores as of July 25,  1998,  from 690 stores in operation as of
July 26, 1997.  The  Company's  strategy for fiscal 1999 is to continue  opening
primarily  combo stores and  converting its existing  single-format  stores into
combo stores, while closing its underperforming locations.

     Gross profit (net sales less cost of goods sold,  including  occupancy  and
buying costs)  increased by 10.2% to $216.8  million,  or 36.2% of net sales, in
fiscal 1998 from $196.7  million,  or 35.5% of net sales,  in fiscal  1997.  The
increase  in gross  profit as a  percentage  of net sales was  primarily  due to
decreased  markdowns,  higher  initial  margins  resulting  from  the  increased
percentage of private brand merchandise and lower shrinkage.

<PAGE>

     Selling,  general and administrative ("SG&A") expenses increased by 5.0% to
$142.1 million,  or 23.8% of net sales,  in fiscal 1998 from $135.4 million,  or
24.4% of net  sales,  in  fiscal  1997.  The  Company's  continued  productivity
improvements from the larger-size  combo stores,  focus on controlling costs and
the comparable  store sales increase all contributed to the decline in SG&A as a
percentage of sales.

     Depreciation  expense  increased by 10.0% to $17.8  million for fiscal 1998
from $16.1  million for fiscal 1997.  This was  primarily due to the increase in
fixed asset  additions  in fiscal 1998 to $21.7  million  from $16.7  million in
fiscal  1997.  Depreciation  expense  for both  periods  also  includes  certain
write-offs  related to the closure of 60 stores and 61 stores during fiscal 1998
and fiscal 1997, respectively.

     Interest  income - net  increased  by 33.0% to $6.4 million for fiscal 1998
from $4.8  million for fiscal  1997.  The increase  resulted  primarily  from an
increase in the Company's investment portfolio.


Fiscal 1997 Compared to Fiscal 1996

     Net sales  increased by 7.6% to $554.8  million for the 52 weeks ended July
26, 1997 ("fiscal  1997"),  from $515.5  million for the 52 weeks ended July 27,
1996 ("fiscal  1996"),  due  primarily to a 5.4%  increase in  comparable  store
sales.  The increase in comparable  store sales  resulted  primarily from better
weather  conditions during fiscal 1997 and positive reaction by customers to the
Company's  merchandise  offerings.   The  improvement  in  net  sales  was  also
attributable to an approximately  3.5% increase in total selling square footage,
which was due to the  opening of new  combination  Dress  Barn/Dress  Barn Woman
stores  ("combo  stores"),  which  carry  both  Dress  Barn and Dress Barn Woman
merchandise,  and the conversion of single-format stores into combo stores. This
offset the closing of  underperforming  stores,  which resulted in the number of
stores in operation declining to 690 stores as of July 26, 1997, from 726 stores
in operation as of July 27, 1996.

     Gross profit (net sales less cost of goods sold,  including  occupancy  and
buying costs)  increased by 10.8% to $196.7  million,  or 35.5% of net sales, in
fiscal 1997 from $177.5  million,  or 34.4% of net sales,  in fiscal  1996.  The
increase  in gross  profit as a  percentage  of net sales was  primarily  due to
higher initial margins resulting from the increased  percentage of private brand
merchandise,  decreased  markdowns  and lower  shrinkage.  Occupancy  costs also
decreased as a percentage  of sales as leverage  from the increase in comparable
store sales offset higher rents paid for new stores and lease renewals.

     Selling,  general and administrative ("SG&A") expenses increased by 2.4% to
$135.4 million,  or 24.4% of net sales,  in fiscal 1997 from $132.2 million,  or
25.6% of net  sales,  in  fiscal  1996.  The  Company's  continued  productivity
improvements from the larger-size  combo stores,  focus on controlling costs and
the comparable  store sales increase all contributed to the decline in SG&A as a
percentage of sales.

     Depreciation  expense  increased  by 2.0% to $16.1  million for fiscal 1997
from $15.8 million for fiscal 1996.  Depreciation  expense for both periods also
includes  certain  writeoffs  related to the  closure of 61 stores and 72 stores
during fiscal 1997 and fiscal 1996, respectively.

     Interest  income - net  increased  by 44.0% to $4.8 million for fiscal 1997
from $3.3  million for fiscal  1996.  The increase  resulted  primarily  from an
increase in the Company's investment portfolio.

<PAGE>

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 successful  combination store format.  Total capital expenditures were $21.7
million,  $16.5  million  and  $17.1  million  in  fiscal  1998,  1997 and 1996,
respectively.

     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  quick ratio (i.e.,  the ratio of current assets less inventory to
current liabilities) has improved steadily over the past three years (1.85, 1.75
and 1.54 at the end of fiscal 1998, 1997 and 1996, respectively).  The Company's
net cash  provided by  operations  in fiscal 1998  increased to $62.1 million as
compared to $48.4 million in fiscal 1997 and $35.6  million in fiscal 1996.  The
increase in fiscal 1998 was due primarily to the increase in earnings, offset by
an increase in taxes paid.

     At July 25, 1998, the Company had $140.0  million in marketable  securities
and other investments.  The portfolio consists primarily of municipal bonds that
can  readily  be  converted  to cash.  The  Company  holds no  options  or other
derivative instruments.  Working capital was $170.4 million at July 25, 1998. In
addition,  the Company had available  $100 million in unsecured  lines of credit
bearing  interest at below the prime rate.  The Company had no debt  outstanding
under any of the lines at July 25,  1998.  However,  potential  borrowings  were
limited by approximately $32 million of outstanding  letters of credit primarily
to vendors for import merchandise purchases.

     In fiscal  1999,  the Company  plans to open  approximately  60  additional
stores,  convert approximately 20 single-format stores to its larger combination
store format and continue its store remodeling  program.  The Company intends to
look at new  markets,  and expects to enter the  Southern  California  market in
fiscal  1999.  In  addition,   the  Company  continues  to  pursue   acquisition
opportunities. 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 any other
operating requirements.

     Other assets, as of July 25, 1998, include a $3 million non-trading, equity
investment,  which is net of a $7 million write-off to reflect its estimated net
realizable value.

Inflation

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

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 1999.  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.
<PAGE>

Information Systems and "Year 2000" Compliance

     The Company has completed a comprehensive review of its information systems
and is involved in an  enterprise-wide  program to update  computer  systems and
applications  in preparation for the year 2000. The Company expects this process
to be completed  in early 1999.  The Company has and will incur  internal  staff
costs as well as  outside  consulting  and other  expenditures  related  to this
initiative.  Total costs related to  remediation  to bring current  systems into
compliance,  testing,  conversion,  the  purchase  of new  package  systems  and
upgrading system  applications  are not expected to be material.  The Company is
surveying  its  service  providers  and others  whom it relies on to assure that
their  systems will be converted  in a timely  fashion.  Based on the results of
this survey, the Company will develop  appropriate  contingency plans.  However,
there can be no  assurance  that the  systems  of other  companies  on which the
Company's  systems rely will also be converted in a timely fashion,  or that any
such failure to convert by another  company would not have an adverse  effect on
the Company's systems. Furthermore, no assurance can be given that any or all of
the Company's  systems are or will be Year 2000 compliant,  or that the ultimate
costs  required  to address  the Year 2000 issue or the impact of any failure to
achieve substantial Year 2000 compliance will not have a material adverse effect
on the Company's financial condition.


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 14.


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

     None.


                                    PART III


         The  information  called for by Items 10, 11, 12 and 13 is incorporated
herein by  reference  from the  definitive  proxy  statement  to be filed by the
Company in connection with its 1998 Annual Meeting of Shareholders.



<PAGE>

                                    PART IV

<TABLE>
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
<CAPTION>
ITEM 14.  (a) (1)  FINANCIAL STATEMENTS                                                              PAGE NUMBER
---------------------------------------                                                              -----------

<S>                                                                                                 <C>
    Independent Auditors' Report                                                                       F-1
    Consolidated Balance Sheets                                                                        F-2
    Consolidated Statements of Earnings                                                                F-3
    Consolidated Statements of Shareholders' Equity                                                    F-4
    Consolidated Statements of Cash Flows                                                              F-5
    Notes to Consolidated Financial Statements                                                       F-6 to F-11

<FN>
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.
</FN>
</TABLE>


ITEM 14.  (a) (3) LIST OF EXHIBITS

<TABLE>
     The following exhibits are filed as part of this Report and except Exhibits
22 and 24 are all incorporated by reference (utilizing the same exhibit numbers)
from the sources shown.
<CAPTION>
                                                                                                           Incorporated By
                                                                                                            Reference From

<C>                                                                                                        <C>
3(c)              Amended and Restated Certificate of Incorporation                                               (1)

3(e)              Amended and Restated By-Laws                                                                    (1)

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

3(g)              Amendments to Amended and Restated By-Laws                                                      (5)

3(h)              Amendments to Amended and Restated By-Laws                                                      (6)

4.                Specimen Common Stock Certificate                                                               (1)

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

10(b)             Employment Agreement With Burt Steinberg                                                        (1)

10(e)             Agreement for Issuance of Stock to  Arthur Ziluck                                               (1)

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


<PAGE>

10(g)             Agreement terminating Agreement for Purchase of Certain Stock
                  from Roslyn S. Jaffe upon death                                                                 (6)

Leases of Company  premises of which the lessor is Elliot S. Jaffe or members of
his family or related trusts:

                  10(k)   Wilton, CT store                                                                        (1)

                  10(l)   Danbury, CT store                                                                       (1)

                  10(m)   Branford, CT store                                                                      (1)

                  10(o)   Mt. Kisco, NY store                                                                     (1)

                  10(hh) Norwalk, CT  Dress Barn Woman store                                                      (8)

                  10(ii)  Branford, CT  Dress Barn Woman store                                                    (8)

10(r)             Amendments to Employment Agreement with Burt Steinberg                                          (2)

10(v)             Employment Agreement with Eric Hawn                                                             (4)

10(w)             Agreement for Advances with Eric Hawn                                                           (4)

10(z)             Extension of Employment Agreement with Burt Steinberg                                           (5)

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

10(cc)            Employment Agreement with Armand Correia                                                        (7)

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(kk)            Employment Agreement with David Jaffe                                                           (8)

10(mm)            Lease between Dress Barn and  AT&T for                                                          (9)
                  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


<PAGE>

 
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

22.               Subsidiaries of the Registrant

24.               Independent Auditors' Consent
<CAPTION>

-------------------------------------------------------------------------------------------
<S>   <C>                       
(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 26, 1997.

</TABLE>

ITEM 14.  (b)  REPORT ON FORM 8-K

         The  Company  has not filed any  reports  on Form 8-K  during  the last
quarter of the fiscal year ended July 25, 1998.



ITEM 14.  (c)  EXHIBITS


     All exhibits are incorporated by reference as shown in Item 14(a)3,  except
Exhibits 22 and 24 which are filed as part of this Report.


<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

<TABLE>
     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.
<CAPTION>
         Signature                                           Title                                           Date
<S>                                                  <C>                                                  <C>
/s/ ELLIOT S. JAFFE                                                                                       10/23/98
Elliot S. Jaffe                                      Chairman of the Board and
                                                     Chief Executive Officer
                                                     (Principal Executive Officer)

/s/ ROSLYN S. JAFFE                                                                                       10/23/98
Roslyn S. Jaffe                                      Director and Secretary and Treasurer


/s/ BURT STEINBERG                                                                                        10/23/98
Burt Steinberg                                       Director and President
                                                     and Chief Operating Officer


/s/ KLAUS EPPLER                                                                                          10/23/98
Klaus Eppler                                         Director


/s/ DONALD JONAS                                                                                          10/23/98
Donald Jonas                                         Director


Mark S. Handler                                      Director


/s/ EDWARD D. SOLOMON                                                                                     10/23/98
Edward D. Solomon                                    Director


/s/ ARMAND CORREIA                                                                                        10/23/98
Armand Correia                                       Chief Financial Officer (Principal
                                                     Financial and Accounting Officer)

</TABLE>
<PAGE>


                          INDEPENDENT AUDITORS' REPORT



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  as of July 25, 1998 and July 26,  1997,  and the related
consolidated  statements of earnings,  shareholders'  equity, and cash flows for
each of the three  years in the period  ended  July 25,  1998.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of The Dress Barn, Inc.
and Subsidiaries as of July 25, 1998 and July 26, 1997, and the results of their
operations  and their cash flows for each of the three years in the period ended
July 25, 1998, in conformity with generally accepted accounting principles.



Deloitte & Touche LLP
Stamford, Connecticut
September 17, 1998

<PAGE>

<TABLE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Balance Sheets
Dollars in thousands, except share data
<CAPTION>
                                                                                 July 25,                July 26,
ASSETS                                                                               1998                    1997
                                                                        ------------------        ----------------
<S>                                                                     <C>                       <C>    
Current Assets:
     Cash and cash equivalents                                                     $3,032                  $1,124
     Marketable securities and investments (Note 2)                               139,994                 122,888
     Merchandise inventories                                                      102,706                  99,835
     Prepaid expenses and other                                                     4,201                   2,469
                                                                        ------------------        ----------------
        Total Current Assets                                                      249,933                 226,316
                                                                        ------------------        ----------------
Property and Equipment:
     Leasehold improvements                                                        58,176                  54,261
     Fixtures and equipment                                                       104,500                  92,438
     Computer software                                                              9,018                   7,924
     Automotive equipment                                                             415                     301
                                                                        ------------------        ----------------
                                                                                  172,109                 154,924
     Less accumulated depreciation
       and amortization                                                            86,399                  73,171
                                                                        ------------------        ----------------
                                                                                   85,710                  81,753
                                                                        ------------------        ----------------
Deferred Income Taxes (Note 5)                                                      3,076                      --
                                                                        ------------------        ----------------
Other Assets                                                                        6,410                   1,433
                                                                        ------------------        ----------------
                                                                                 $345,129                $309,502
                                                                        ==================        ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
     Accounts payable- trade                                                      $41,211                 $40,168
     Accrued expenses                                                              35,483                  27,814
     Customer credits                                                               2,827                   2,489
     Income taxes payable                                                              --                   2,266
                                                                        ------------------        ----------------
        Total Current Liabilities                                                  79,521                  72,737
                                                                        ------------------        ----------------
Deferred Income Taxes (Note 5)                                                         --                     443
                                                                        ------------------        ----------------
Long-Term Debt (Note 3)                                                                --                   3,500
                                                                        ------------------        ----------------
Commitments (Note 6)
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- 30,000,000 shares
       Issued- 24,506,559 and 23,887,538
               shares, respectively
       Outstanding- 22,839,059 and 22,742,538
               shares, respectively                                                 1,225                   1,194
     Additional paid-in capital                                                    25,175                  19,856
     Retained earnings                                                            259,104                 218,877
     Treasury stock, at cost                                                     (21,005)                 (8,214)
     Unrealized holding gain (loss) on marketable securities                        1,109                   1,109
                                                                        ------------------        ----------------
                                                                                  265,608                 232,822
                                                                        ==================        ================
                                                                                 $345,129                $309,502
                                                                        ==================        ================
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>


<PAGE>
<TABLE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings
Dollars in thousands except per share amounts
<CAPTION>
                                                                                           Year Ended
                                                               -----------------------------------------------------------
                                                                          July 25,           July 26,            July 27,
                                                                              1998               1997                1996
                                                               -----------------------------------------------------------
<S>                                                                      <C>                <C>                 <C>     
     Net sales                                                            $598,175           $554,843            $515,522
     Cost of sales, including
       occupancy and buying costs                                          381,354            358,093             337,998
                                                               -----------------------------------------------------------

     Gross profit                                                          216,821            196,750             177,524

     Selling, general and
       administrative expenses                                             142,098            135,384             132,176

     Depreciation and amortization                                          17,758             16,139              15,828

     Write-down of underperforming
       and closed store assets (Note 8)                                       ----               ----               2,848
                                                               -----------------------------------------------------------

     Operating income                                                       56,965             45,227              26,672

     Interest income- net                                                    6,385              4,800               3,343
                                                               -----------------------------------------------------------

        Earnings before
          Income taxes                                                      63,350             50,027              30,015

     Income taxes                                                           23,123             18,260              11,106
                                                               -----------------------------------------------------------

        Net earnings                                                       $40,227            $31,767             $18,909
                                                               ===========================================================

     Earnings per share:
            Basic                                                            $1.75              $1.40               $0.84
                                                               ===========================================================
            Diluted                                                          $1.70              $1.33               $0.84
                                                               ===========================================================

<FN>
See notes to consolidated financial statements
</FN>
</TABLE>

<PAGE>

<TABLE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of
     Shareholders' Equity                                                                                                          
<CAPTION>
Dollars and shares in thousands                                                                         Unrealized 
                                                                                                       Holding Gain
                                                                     Additional                         (Loss) On         Total
                                                    Common Stock      Paid-In    Retained    Treasury   Marketable     Shareholders'
                                                   Shares    Amount   Capital    Earnings     Stock     Securities       Equity
                            --------------------------------------------------------------------------------------------------------
<S>                                                <C>      <C>        <C>       <C>        <C>             <C>            <C>     
Balance, July 29, 1995                             22,314   $1,166     $15,056   $168,201    $(5,706)        $221          $178,938
Deferred compensation                                  43        3         183                                                  186
Employee Stock Purchase Plan activity                  21        1         226                                                  227
Shares issued pursuant to exercise of stock options   190        9       1,065                                                1,074
Unrealized holding loss on marketable securities                                                             (238)             (238)
Net earnings                                                                       18,909                                    18,909
                        ------------------------------------------------------------------------------------------------------------

Balance, July 27, 1996                             22,568    1,179      16,530    187,110     (5,706)         (17)          199,096
Deferred compensation                                                    1,160                                                1,160
Employee Stock Purchase Plan activity                  13        1         149                                                  150
Shares issued pursuant to exercise of stock options   302       14       2,017                                                2,031
Purchase of treasury stock                           (140)                                    (2,508)                        (2,508)
Unrealized holding gain on marketable securities                                                            1,126             1,126
Net earnings                                                                       31,767                                    31,767
                        ------------------------------------------------------------------------------------------------------------

Balance, July 26, 1997                             22,743    1,194      19,856    218,877    (8,214)        1,109           232,822
Deferred compensation                                                       18                                                   18
Tax benefit from exercise of stock options                                 404                                                  404
Employee Stock Purchase Plan activity                   5       --         131                                                  131
Shares issued pursuant to exercise of stock options   613       31       4,766                                                4,797
Purchase of treasury stock                           (522)                                  (12,791)                        (12,791)
Unrealized holding gain on marketable securities                                                               --                --
Net earnings                                                                      40,227                                     40,227
                        ------------------------------------------------------------------------------------------------------------
Balance, July 25, 1998                             22,839   $1,225     $25,175  $259,104   ($21,005)       $1,109          $265,608
                        ============================================================================================================
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>

<PAGE>

<TABLE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<CAPTION>
Dollars in thousands                                                                                   Year Ended
                                                                               ---------------------------------------------------
                                                                                        July 25,          July 26,       July 27,
                                                                                            1998              1997           1996
                                                                               ---------------------------------------------------
<S>                                                                                    <C>               <C>            <C>    
Operating Activities:
Net earnings                                                                             $40,227           $31,767        $18,909
                                                                               ---------------------------------------------------
Adjustments  to  reconcile  net  earnings  to net  cash  provided  by  operating
    activities:
      Depreciation and amortization of property and
        equipment (net)                                                                   14,489            13,351         12,855
      Write-down of underperforming and
        closed store assets (Note 8)                                                         ---               ---          2,848
      Write-down of non-trading equity investment                                          7,000               ---            ---
      Loss on disposal of closed store assets                                              3,269             2,788          2,973
      (Decrease) increase in deferred income taxes                                       (3,519)           (1,548)            873
      Deferred compensation                                                                   18             1,159            185
      Changes in assets and liabilities:
         Increase in merchandise inventories                                             (2,871)          (10,044)        (1,746)
         (Increase) decrease in prepaid expenses                                         (1,732)               301            670
         Increase in other assets                                                        (1,977)             (480)          (331)
         Increase (decrease) in accounts payable- trade                                    1,043             2,969        (1,225)
         Increase in accrued expenses                                                      7,669             6,410          1,403
         Increase in customer credits                                                        338               427            575
         (Decrease) Increase in income taxes payable                                     (1,862)             1,294        (2,430)
                                                                               ---------------------------------------------------
       Total adjustments                                                                  21,865            16,627         16,650
                                                                               ---------------------------------------------------

        Net cash provided by operating activities                                         62,092            48,394         35,559
                                                                               ---------------------------------------------------

Investing Activities
    Purchases of property and equipment - net                                           (21,715)          (16,487)       (17,109)
    Sales and maturities of marketable securities and investments                        118,686            38,911        110,613
    Purchases of marketable securities and investments                                 (135,792)          (78,885)      (128,226)
    Purchase of non-trading equity investment                                           (10,000)               ---            ---
                                                                               ---------------------------------------------------
       Net cash used in investing activities                                            (48,821)          (56,461)       (34,722)
                                                                               ---------------------------------------------------

Financing Activities
    Repayment of long term debt                                                          (3,500)               ---            ---
    Purchase of treasury stock                                                          (12,791)           (2,508)            ---
    Proceeds from Employee Stock Purchase Plan                                               131               150            227
    Proceeds from stock options exercised                                                  4,797             2,032          1,074
                                                                               ---------------------------------------------------
      Net cash (used in) provided by financing activities                               (11,363)             (326)          1,301
                                                                               ---------------------------------------------------

Net increase (decrease) in cash and cash equivalents                                       1,908           (8,393)          2,138
Cash and cash equivalents- beginning of period                                             1,124             9,517          7,379
                                                                               ---------------------------------------------------
Cash and cash equivalents- end of period                                                  $3,032            $1,124         $9,517
                                                                               ===================================================

Supplemental Disclosure of Cash Flow Information:
    Cash paid for income taxes                                                           $28,190           $16,966        $13,840
                                                                               ===================================================
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>

<PAGE>


                      The Dress Barn, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                         Three Years Ended July 25, 1998


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Business

     The Dress Barn, Inc.  (including The Dress Barn, Inc. and it's 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 operates in one business 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.  The Company  reports on a 52-53 week fiscal year ending on the last
Saturday in July.

         Merchandise inventories

     Merchandise  inventories  are valued at the lower of cost,  on a  first-in,
first-out basis, or market as determined by the retail method.

         Property and equipment

     Property and equipment are stated at cost.  Depreciation  and  amortization
are computed using the  straight-line  method over the estimated useful lives of
the  related  assets  which range from 3 to 10 years.  For income tax  purposes,
accelerated methods are generally used.

         Income taxes

     Deferred  income taxes are provided  using the asset and liability  method,
whereby deferred income taxes result from temporary  differences between the tax
basis of assets and  liabilities  and their  reported  amounts in the  financial
statements.

         Store preopening costs

     Expenses  associated  with the opening of new stores are charged to expense
as incurred.

         Cash and cash equivalents

     For purposes of the  statement  of cash flows,  the Company  considers  its
highly liquid investments with a maturity 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 are  maintained
with one financial institution.

<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 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.  Other  investments,  due to their
nature, are carried at cost.

         Earnings per share (EPS)

     Earnings per share is  calculated  by dividing net earnings by the total of
the  weighted  average  number of common  shares  and common  share  equivalents
outstanding  during the period,  assuming the dilutive  effect of stock options,
computed in accordance with the treasury stock method.

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS128).  SFAS
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.  The number of shares used in the computation of
basic  earnings per share was  23,032,400,  22,738,322 and 22,413,267 for fiscal
1998,  fiscal 1997 and fiscal 1996,  respectively.  The number of shares used in
the  computation of diluted  earnings per share was  23,653,899,  23,941,070 and
22,631,574  for fiscal  1998,  fiscal 1997 and fiscal  1996,  respectively.  All
periods presented reflect the adoption of SFAS128

         Recent Accounting Pronouncements

     In June  1997,  the FASB  issued  SFAS No.  130,  "Reporting  Comprehensive
Income."  This  statement   requires   companies  to  classify  items  of  other
comprehensive income by their nature in the financial statements and display the
accumulated  balance of other  comprehensive  income  separately  from  retained
earnings and additional  paid-in-capital in the equity section of a statement of
financial  position.  SFAS No. 130 is effective for financial  statements issued
for fiscal years  beginning  after December 15, 1997. The Company will adopt the
provisions of SFAS No. 130 in fiscal 1999.

         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.

         Stock based compensation

     In October  1995,  Statement of  Financial  Accounting  Standards  No. 123,
"Accounting for Stock Based  Compensation",  ("SFAS 123"), was issued.  SFAS 123
requires  the  Company  elect  to  either  adopt  a  fair  value  based  expense
recognition method of accounting for stock-based  compensation plans or continue
to use the current valuation methods with pro forma disclosure of net income and
earnings  per share as if the fair value based method of  accounting  defined in
SFAS 123 had been applied.  The Company has elected to retain its current method
of accounting for stock-based  compensation and provide the required disclosures
in its financial statements.


<PAGE>

     The  company  accounts  for  stock-based  awards  to  employees  using  the
intrinsic  value method in accordance  with APB Opinion No. 25,  "Accounting for
Stock Issued to  Employees".  Compensation  expense,  if any, is measured as the
excess  of the  market  price  of the  stock  over  the  exercise  price  on the
measurement date.

         Disclosure about fair value of financial instruments

     The fair value of financial  instruments  classified  as current  assets or
liabilities  approximate  carrying amount due to the short-term  maturity of the
instruments.  The  fair  value  of long  term  debt,  discounted  using  current
borrowing rates  available for financing with similar terms and maturities,  was
approximately $2.1 million at the end of the 1997 fiscal year.

     Other assets, as of July 25, 1998, include a $3 million non-trading, equity
investment,  which is net of a $7 million write-off to reflect its estimated net
realizable value.


2.       MARKETABLE SECURITIES AND INVESTMENTS

<TABLE>
     Marketable securities and investments included the following:

<CAPTION>
                                                                July 25, 1998                      July 26, 1997
                                                                -------------                      -------------
(In 000's)                                                  Fair         Amortized             Fair         Amortized
                                                           Value              Cost            Value              Cost
<S>                                                     <C>               <C>            <C>               <C>   
Money Market Funds                                          $732              $732           $1,893            $1,893
US Govt. Bonds & Notes                                        --                --            8,010             7,983
Short Term Investments                                    22,313            22,313           24,642            24,642
Other Investments                                          9,298             8,987            9,108             8,917
Tax Free Municipal Bonds                                 105,921           104,966           77,524            76,457
US Govt. Securities Fund                                   1,730             1,887            1,711             1,887
                                                       ---------         ---------        ---------          --------
                                                        $139,994          $138,885         $122,888          $121,779
                                                       =========         =========        =========          ========
</TABLE>
<TABLE>

     The scheduled  maturities of marketable  securities and investments at July
25, 1998 are:
<CAPTION>
Due In                                                                                  Fair Value           Amortized Cost
-------------------                                                                     -----------          --------------
(in 000's)
<S>                                                                                     <C>                   <C>    
One year or less                                                                            $54,764                 $54,443
One year through five years                                                                  80,703                  79,934
Six years through ten years                                                                   2,467                   2,454
Over ten years                                                                                2,060                   2,054
                                                                                          ---------                --------
                                                                                           $139,994                $138,885
                                                                                          =========                ========
</TABLE>

     Unrealized  holding  gains  and  losses  at  July  25,  1998  netted  to an
unrealized  gain of  approximately  $1.1  million.  Proceeds and gross  realized
losses from the sale of  securities  in fiscal  1998,  1997 and 1996 were $118.7
million and $0.1 million,  $38.9 million and $0.3 million and $110.6 million and
$0.6 million, respectively. For the purposes of determining gross realized gains
and losses, the cost of securities is based upon specific identification.

<PAGE>

3.       LONG-TERM DEBT

     During fiscal 1998, the Company repaid its $3.5 million unsecured loan from
the New York State Urban Development  Corporation.  This loan was due October 1,
2004,  with  interest at rates  ranging from 0% to 3% over the term of the loan.
The Company had no other long-term debt outstanding at any time during the three
years ended July 25, 1998.

     At July 25,  1998,  the  Company had  unsecured  lines of credit with three
banks totaling $100 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 25,
1998.  However,  the credit lines  available were reduced by  approximately  $32
million of outstanding letters of credit.


4.       EMPLOYEE BENEFIT PLANS

     In August 1995, the Company established a defined  contribution  retirement
savings plan (401(k))  covering all eligible  employees.  This plan succeeds the
previous  discretionary  profit-sharing  plan, with all prior individual account
balances and vesting  terms  transferred  to the new plan.  The Company has also
established an Executive Retirement Plan for certain officers and key executives
not  participating in the 401(k) plan. 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 1998, 1997 and 1996,
the Company incurred expenses of $982,000, $738,000 and $712,000,  respectively,
relating to the  contributions  to and  administration  of the above plans.  The
Company also has 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.


5.       INCOME TAXES

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

<CAPTION>
                                                                               Year Ended
(In 000's)                                                     July 25,         July 26,          July 27,
                                                                   1998             1997              1996
<S>                                                            <C>              <C>                <C>   
Federal:
         Current                                                $20,349          $15,986            $8,428
         Deferred                                                (2,477)          (1,240)              169
                                                               --------          -------            ------
                                                                 17,872           14,746             8,597
State:
         Current                                                  5,872            3,822             2,742
         Deferred                                                  (621)            (308)             (233)
                                                                --------          -------            ------                       
                                                                  5,251            3,514             2,509

Provision for income taxes                                      $23,123          $18,260           $11,106
                                                              =========        =========           =======
</TABLE>


<PAGE>

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

<CAPTION>
                                                                                July 25,          July 26,
(in 000's)                                                                          1998              1997
                                                                               ---------         ---------
<S>                                                                             <C>               <C>   
Deferred tax assets:
Inventory capitalization for tax purposes                                         $2,246            $1,449
Other items                                                                       11,168             6,055
                                                                                  ------             -----
   Total deferred tax assets                                                      13,414             7,504
Deferred tax liabilities:
Depreciation                                                                       6,618             6,627
Other items                                                                        3,720             1,320
                                                                --                ------             -----
   Total deferred tax liabilities                                                 10,338             7,947

Net deferred tax assets (liabilities)                                             $3,076             $(443)
                                                                                  ======             ======
</TABLE>

<TABLE>
     The net deferred tax assets were  comprised  of  approximately  $490,000 in
state deferred taxes and $2,586,000 in federal  deferred  taxes.  Following is a
reconciliation of the statutory Federal income tax rate and the effective income
tax rate applicable to earnings before income taxes:

<CAPTION>
                                                                             Year Ended
                                                               July 25,         July 26,          July 27,
                                                                   1998             1997              1996
                                                              ---------        ---------         ---------
<S>                                                            <C>              <C>               <C>   
Statutory tax rate                                               35.0 %           35.0 %            35.0 %
State taxes - net of federal
  Benefit                                                         5.8 %            5.1 %             5.6 %
Other - net                                                      (4.3)%           (3.6)%            (3.6)%

Effective tax rate                                               36.5 %            36.5 %           37.0 %
                                                                 =====             =====            =====
</TABLE>

6.  COMMITMENTS

Lease commitments

     The  Company  leases all 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.  The lease has an
initial term expiring in 2007 with three 5-year options to extend the lease.
<TABLE>

     A summary of occupancy costs follows:

<CAPTION>
                                                                               Year Ended
                                                               July 25,         July 26,          July 27,
(in 000's)                                                         1998             1997              1996
                                                              ---------        ---------         ---------
<S>                                                           <C>              <C>               <C>    
Base rentals                                                    $62,880          $59,906           $56,113
Percentage rentals                                                  378              229                94
Other occupancy costs                                            22,477           19,526            19,626
                                                                 ------           ------            ------

Total                                                           $85,735          $79,661           $75,833
                                                               ========         ========           =======
</TABLE>


<PAGE>



     The following is a schedule of future minimum rentals under  noncancellable
operating leases as of July 25, 1998 (dollars in thousands):

             Fiscal Year                                Amount
            -------------                            ------------
                1999                                $   54,244
                2000                                    48,160
                2001                                    37,342
                2002                                    29,229
                2003                                    17,625
         Subsequent years                               24,070

         Total future minimum rentals                 $210,670


     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.
Leases with related parties

     The Company leases five stores from the Chief Executive  Officer or related
trusts.  Future  minimum  rentals  under leases with such related  parties which
extend beyond July 25, 1998,  included in the above schedule,  are approximately
$404,000 annually and aggregate $1.7 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 1998,  1997 and 1996 under
these  leases  amounted  to  approximately  $438,000,   $443,000  and  $492,000,
respectively.


7.       STOCK-BASED COMPENSATION PLANS

     At July 25, 1998, the Company had five stock-based  compensation plans. The
Company's  1983  Incentive  Stock  Option  Plan  expired on April 4,  1993,  and
accordingly,  the  Company  can no longer  grant  options  under such plan.  The
Company's 1993 Incentive Stock Option Plan, which contains provisions similar to
the expired plan,  provides for the grant of options to purchase up to 1,250,000
shares of the Company's  common stock. The exercise price of the options granted
under both plans may not be less than the  market  price of the common  stock at
the date of grant.  All options  granted  under both plans vest over a five year
period and  generally  expire  after ten years  from date of grant.  At July 25,
1998,  there were 663,000 shares under the 1993 plan available for future grant.
The Company's 1987  Non-Qualified  Stock Option Plan,  which expired December 7,
1997, provides for the granting of options to purchase up to 1,000,000 shares of
Common Stock to key employees. The Company's 1995 Stock Option Plan provides for
the  granting of either  incentive  or  non-qualified  options to purchase up to
2,000,000 shares of Common Stock. As of July 25, 1998,  340,000 options had been
issued under the 1995 Stock Option Plan.  The Company's  Employee Stock Purchase
Plan allows  employees to purchase shares of company stock during each quarterly
offering period at a 10% discount through weekly payroll deductions.


<PAGE>



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

<CAPTION>
                                               July 25, 1998                  July 26, 1997                   July 27, 1996
                                               -------------                  -------------                   -------------
                                                          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      1,746,992          $8.09        1,273,293         $8.39         1,392,633         $7.04
Granted                                        167,750          19.99          882,055          7.43           124,750          9.15
Cancelled                                     (12,769)          10.65        (106,154)         10.11          (55,261)          8.28
Exercised                                    (626,538)           7.65        (302,202)          6.68         (188,829)          5.69
                                      ----------------------------------------------------------------------------------------------

Outstanding end of year                      1,275,435          $9.83        1,746,992         $8.09         1,273,293         $8.39
                                      ==============================================================================================

Options exercisable at year-end                187,209         $10.51          484,460         $8.23           675,914         $7.50
                                      ----------------------------------------------------------------------------------------------

Weighted-average fair
value of options granted
during the year
                                                                $8.53                          $3.79                           $4.00
                                                       ---------------                 --------------                  -------------
</TABLE>


<TABLE>
     The following table summarizes  information about stock options outstanding
at July 25, 1998:


<CAPTION>
  Range of Exercise Prices          Number         Weighted Average                                           Weighted
                              Outstanding as of     Remaining Life    Weighted Average        Number           Average
                                   7/25/98                             Exercise Price   Exercisable as of  Exercise Price
                                                                                             7/25/98
---------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                <C>                   <C>                                 <C>  
$5.00  -  $6.00                    240,000            8.06 years            $5.00              ---              $ ---
 6.50  -  $8.68                    572,188            7.64 years             8.64             36,828             8.50
 8.75  -  12.50                    302,997            6.14 years            10.36            150,381            11.01
12.50  -  22.63                    160,250            9.45 years            20.28              ---               ---
                              ---------------------------------------------------------------------------------------------

$5.00  - $22.63                   1,275,435           7.59 years            $9.83            187,209           $10.51
                              =============================================================================================

</TABLE>


<PAGE>


<TABLE>
     In fiscal 1997,  the Company  granted  300,000  options at $5.00 per share,
which was less than the market price on the date of grant,  and had a fair value
of $5.36 per share. The Company records compensation expense for all stock-based
compensation  plans using the method  prescribed by Accounting  Principles Board
Opinion No. 25, 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. 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 123, the
Company's  net earnings and earnings per share for fiscal 1998,  fiscal 1997 and
fiscal 1996 would have been  reduced to the pro forma  amounts  indicated below:
<CAPTION>
                                                                                              Year Ended
                                                                           July 25,            July 26,           July 27,
                                                                               1998                1997               1996
                                                                          ---------           ---------          ---------
<S>                                                                         <C>                 <C>                <C>    
Net earnings (in 000's):
         As reported                                                        $40,227             $31,767            $18,909
         Pro forma                                                          $39,530             $31,241            $18,872

Earnings per share - basic:
         As reported                                                          $1.75               $1.40              $0.84
         Pro forma                                                            $1.72               $1.37              $0.84

Earnings per share - diluted:
         As reported                                                          $1.70               $1.33              $0.84
         Pro forma                                                            $1.67               $1.30              $0.84
</TABLE>


<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:

<CAPTION>
                                                                                            Year Ended
                                                                           July 25,            July 26,           July 27,
                                                                               1998                1997               1996
                                                                          ---------           ---------          ---------

<S>                                                                         <C>                 <C>                <C> 
Weighted average risk-free interest rate                                       4.6%                5.7%               5.7%
Weighted average expected life (years)                                         5.0                 5.0                5.0
Expected volatility                                                           38.6%               39.6%              39.6%


</TABLE>

     These pro forma  adjustments  are not indicative of future period pro forma
adjustments,  when the calculation  will apply to all applicable  stock options.
SFAS 123 does not apply to awards prior to fiscal 1996, and additional awards in
future years are anticipated.


8.       WRITE-DOWN OF UNDERPERFORMING AND CLOSED STORE ASSETS

     In fiscal 1996,  the Company  implemented  the  provisions of SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed  Of." This  statement  addresses the timing of  recognition  and the
measurement  of  impairment  of  (a)  long-lived  assets,  certain  identifiable
intangibles,  and goodwill  related to those assets to be held and used, and (b)
long-lived  assets and certain  identifiable  intangibles to be disposed of. The
statement  requires that such assets be reviewed for impairment  whenever events
or changes in  circumstances  indicate  that  their  carrying  amount may not be
recoverable, and that such assets be reported at the lower of carrying amount or
fair value.


<PAGE>



<TABLE>
QUARTERLY RESULTS OF OPERATIONS (unaudited)
(in thousands except per share amounts)


<CAPTION>
                                                        Fourth             Third           Second             First
                                                       Quarter           Quarter          Quarter           Quarter
Year ended July 25, 1998
<S>                                                   <C>               <C>              <C>               <C>     
Net Sales                                             $153,430          $144,341         $144,210          $156,194
Gross Profit,
  less occupancy
  and buying costs                                      56,896            53,545           49,904            56,476
Income Taxes                                             6,512             5,627            4,606             6,378
Net Earnings                                            11,327             9,794            8,010            11,096
Earnings Per Share(*)
       Basic                                             $0.49             $0.42            $0.35             $0.49
       Diluted                                           $0.48             $0.41            $0.34             $0.47

<CAPTION>
                                                        Fourth             Third           Second             First
                                                       Quarter           Quarter          Quarter           Quarter
Year ended July 26, 1997
<S>                                                   <C>               <C>              <C>               <C>     
Net Sales                                             $146,527          $134,103         $131,457          $142,755
Gross Profit,
  less occupancy
  and buying costs                                      54,533            48,309           43,947            49,960
Income Taxes                                             6,446             4,232            3,028             4,554
Net Earnings                                            11,211             7,364            5,268             7,924
Earnings Per Share(*)
       Basic                                             $0.49             $0.32            $0.23             $0.35
       Diluted                                           $0.47             $0.31            $0.23             $0.34

<FN>
(*) 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 in fiscal 1998 and fiscal 1997.
</FN>
</TABLE>


<PAGE>



                                   EXHIBIT 22


                              THE DRESS BARN, INC.

                         SUBSIDIARIES OF THE REGISTRANT
                                (All 100% Owned)


                                                            State of
          Subsidiary                                      Incorporation




D.B.R., Inc.                                                Delaware

The Dress Barn, Inc. of
New Hampshire, Inc. (**)                                    New Hampshire

Raxton Corp. (**)                                           Massachusetts

JRL Consulting Corp. (**)                                   New Jersey

D.B.X. Inc.                                                 New York






(**) Inactive Subsidiary



<PAGE>



                                   EXHIBIT 24


                          INDEPENDENT AUDITORS' CONSENT



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



We consent to the  incorporation  by reference in  Registration  Statement  Nos.
33-16857,  33-47415,  33-60196,  333-18135  and  33-17488  (on Form  S-8) of our
report,  dated September 17, 1998,  appearing in this Annual Report on Form 10-K
of The Dress Barn, Inc. and Subsidiaries for the year ended July 25, 1998.








Deloitte & Touche LLP
Stamford, Connecticut
October 21, 1998