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 28, 2001           Commission file number 0-11736

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

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

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

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

           Securities registered pursuant to Section 12(g) of the Act:
                               Title of each class
                           Common Stock $.05 par value

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

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

     As  of  October  25,  2001,   18,323,447   shares  of  common  shares  were
outstanding.  The  aggregate  market value of the common  shares (based upon the
October  24, 2001  closing  price of $21.20 on the NASDAQ  Stock  Market) of The
Dress Barn, Inc. held by non-affiliates  was approximately  $301.9 million.  For
the purposes of such  calculation,  all outstanding  shares of Common Stock have
been  considered  held  by  non-affiliates,  other  than  the  4,082,995  shares
beneficially  owned by Directors and Executive  Officers of the  registrant.  In
making such  calculation,  the  registrant  does not  determine the affiliate or
non-affiliate status of any shares for any other purpose.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the  registrant's  Proxy  Statement  for the Annual  Meeting of
Shareholders to be held on December 10, 2001 are  incorporated  into Parts I and
III of this Form 10-K.

                                   Cover Page
<PAGE>
                              THE DRESS BARN, INC.
                                    FORM 10-K
                         FISCAL YEAR ENDED JULY 28, 2001
                                TABLE OF CONTENTS

PART I                                                                      PAGE
     Item 1   Business
              General                                                         3
              Company Strengths and Strategies                                3
              Merchandising                                                   6
              Buying and Distribution                                         7
              Store Locations and Properties                                  8
              Operations and Management                                       10
              Advertising and Marketing                                       11
              Management Information Systems                                  11
              Trademarks                                                      12
              Employees                                                       12
              Seasonality                                                     12
              Forward-Looking Statement and Factors Affecting Future          13
                 Performance
     Item 2   Properties                                                      15
     Item 3   Legal Proceedings                                               16
     Item 4   Submission of Matters to a Vote of Security Holders             16
     Item 4A  Executive Officers of the Registrant                            17

PART II
     Item 5   Market for Registrant's Common Stock and                        19
                 Related Security Holders Matters
     Item 6   Selected Financial Data                                         20
     Item 7   Management's Discussion and Analysis of                         21
                 Financial Condition and Results of Operations

     Item 8   Financial Statement and Supplementary Data                      25
     Item 9   Changes in and Disagreements with Accountants                   25
                 on Accounting and Financial Disclosure

PART III
     Item 10  Directors and Executive Officers of the Registrant              25
     Item 11  Executive Compensation                                          25
     Item 12  Security Ownership of Certain Beneficial Owners                 25
                 and Management
     Item 13  Certain Relationships and Related Transactions                  25

PART IV
     Item 14  Exhibits, Financial Statement Schedules and Reports
                 on Form 8-K                                                  26

<PAGE>

                                     PART I

ITEM 1.  BUSINESS


General


     Dress  Barn  operates  a  national  chain  of  specialty   stores  offering
in-season,  moderate to better  quality career and casual fashion to the working
woman at value  prices.  The Company  differentiates  itself from (i)  off-price
retailers  by  its  carefully  edited  selection  of  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.   As  part  of  this  focus,  the  Company  has
successfully  developed  its  own  line of  private  brands,  which  constituted
approximately  80% of net sales for the fiscal year ended July 28, 2001 ("fiscal
2001").

     The Company  operates  primarily  combination  Dress  Barn/Dress Barn Woman
stores ("Combo Stores"), which carry both Dress Barn and larger-sized Dress Barn
Woman  merchandise,  as well as  freestanding  Dress  Barn and Dress  Barn Woman
stores.  As of July 28, 2001,  the Company  operated 720 stores in 43 states and
the District of Columbia,  consisting of 441 Combo Stores, 224 Dress Barn stores
and 55 Dress Barn  Woman  stores.  The Dress  Barn and Dress  Barn Woman  stores
average  approximately 4,500 and approximately 4,000 square feet,  respectively,
and the Combo Stores average  approximately 9,000 square feet. The Company sells
through its mail-order catalog and its internet site (www.dressbarn.com),  which
gives the Company multiple  channels of distribution,  and the ability to target
multiple groups of potential  customers  while  providing its current  customers
with the convenience of seeing and buying its merchandise in new ways.

Company Strengths and Strategies

     Dress Barn is one of the largest  national  specialty store chains offering
in-season  women's  career  and  casual  fashions  at value  prices.  Dress Barn
attributes  its success to its: (i) 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 over 700 store locations 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 targeted marketing activities.

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


<PAGE>

     The senior members of the Company's  management  team,  with one exception,
have  worked  together  at Dress  Barn for many  years,  with each  also  having
substantial  previous  fashion  retailing  experience.  During fiscal 2001,  the
Company added another  experienced  executive to its  management  team.  Kathryn
Bufano Foster joined the company as President and Chief  Merchandising  Officer.
Refer to Executive Officers of the Registrant, below.

     The Company has repositioned itself to appeal to a younger-feeling customer
while maintaining the Company's focus on its target customer. This repositioning
included  evolving  the existing  Dress Barn image,  building  brand  awareness,
adopting a new logo and creating a  "personality"  for Dress Barn that is unique
and proprietary to the marketplace.  This included  developing Dress Barn into a
national brand, enhancing its merchandise and its stores. During fiscal 2000 the
Company  undertook  a  national  "lifestyle"   marketing  campaign,  to  further
strengthen  and  develop the Dress Barn  brand.  During  fiscal 2001 the Company
expanded  the  use  of its  Dress  Barn(R)  label  to  approximately  80% of its
merchandise offerings. During the year ending July 27, 2002 ("fiscal 2002"), the
Company  intends  to expand  its Dress  Barn(R)  label to  virtually  all of its
private brand merchandise offerings,  emphasizing quality, value and fashion. In
addition,  during fiscal 2002, the Company plans to conduct  extensive  customer
surveys  and launch a  comprehensive  brand image  campaign  for the Spring 2002
selling season.

     The  Company's   merchandise  offerings  reflect  a  focused  and  balanced
assortment of career and casual fashions tailored to its customers' demands. The
merchandise mix has evolved to more  younger-feeling  and contemporary in style.
Assortments are narrower to provide better edited,  but deeper,  assortments for
added depth in stock and more appealing merchandise  presentation.  In addition,
the Company has developed a new store design  prototype  that features an easier
to shop layout,  warmer colors and redesigned fixtures for enhanced  merchandise
presentation.  During  fiscal  2001,  the Company  updated to the new  prototype
design or  remodeled  approximately  75 stores;  the Company  plans to update or
remodel approximately 100 of its store locations during fiscal 2002.

     In September 1999, the Company  launched its mail order catalog.  In Spring
2000,   the   Company   launched   e-commerce   sales  on  its   internet   site
(www.dressbarn.com).  Over eleven  million  catalogs  were mailed  during fiscal
2001,  with a larger  number  planned to be mailed  during  fiscal  2002 to both
existing  and  prospective  customers,  with the hope of  driving  them into the
store, as well as offering the opportunity to purchase by phone, mail or online.
The Company  believes these sales channels will help to increase overall revenue
growth,  as well as drive store  traffic.  In August 2001, the Company moved its
fulfillment   operations   in-house  to  enhance  customer  service  and  reduce
fulfillment costs. In addition,  to reduce  merchandising and overhead costs and
promote a cohesive brand image,  the Company is closely  integrating its catalog
and  e-commerce  operations  with its retail  operations  for fiscal 2002.  This
includes  sharing  merchandising  functions  and the  utilization  of only store
merchandise  in its catalogs,  plus  coordinating  its  promotions and marketing
efforts with corresponding retail operations.

     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.  The Company utilizes a field  information
system for all its Regional and District  Sales  Managers via laptop  computers,
providing  immediate sales,  inventories and other operational data. The Company
recently upgraded all of its store personal computers and related software,  and
plans to complete the upgrade of its  back-office  store system  software during
fiscal  2002.  In  addition,  the  Company  plans to begin  upgrading  its store
locations'  cash register  software and hardware to an enhanced  PC-based system
during fiscal 2002. The Company's  distribution  center  systems  continue to be
refined, further reducing per-unit distribution costs.

<PAGE>


     All aspects of Dress  Barn's  stores 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  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.

     The  Company   believes  it  has  become  the  leading  national  chain  of
value-priced  specialty stores offering  in-season career and casual fashions to
the moderate-income  working woman. Dress Barn seeks to be the destination value
specialty  retailer  brand  in the  immediate  trading  area  of its  units  for
consumers at moderate  price  points.  The Company has  developed  the following
strategies:  (i) utilize  Dress  Barn(R) as a brand,  have it  recognized  as an
authority in its core categories with  merchandise  that provides  shoppers with
desired quality at value prices;  (ii) gradually evolve Dress Barn's merchandise
focus to include more fashion with a "soft separates"  focus;  (iii) continue to
open Combo Stores with added concentration on downtown and urban locations; (iv)
further develop customer targeted  marketing,  utilizing cross marketing between
its retail,  catalog and e-commerce customers,  and (v) further improve customer
service.

     The  Company  has  gradually   increased  the   percentage  of  merchandise
manufactured for sale under the Dress Barn(R) label as well as its other private
brands,  to  approximately  80% of the  Company's  net sales for fiscal 2001. In
fiscal 2002 the Company intends to further increase the percentage of sales from
its private brand  merchandise,  of which the vast majority will carry the Dress
Barn(R)  label.  In addition,  approximately  10% of the Company's net sales are
from merchandise produced by national brand manufacturers  exclusively for Dress
Barn.

     The  Company's  stores carry a broad  assortment of career and casual wear,
including casual, career and special occasion dresses, sweaters,  knitwear, both
casual and career pants and skirts,  separates  and suits,  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  trendy
merchandise that is subject to rapidly changing consumer tastes.

     Based on the success of its larger size Combo Stores,  the Company  expects
most  fiscal  2002 store  openings to be Combo  Stores  between  8,000 and 9,000
square feet.  Future Combo store openings will likely include expanded areas for
shoes,  petites and other new merchandise  categories.  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.  If  sufficient  space is not  available  in a desirable  shopping
center for a Combo  store,  the Company may open a separate  Dress Barn or Dress
Barn Woman location in that center.  Of the  approximately 60 additional  stores
that the Company plans to open by the end of fiscal 2002,  approximately  50 are
expected to be new stores and approximately 10 are expected to be conversions to
Combo locations from existing Dress Barn or Dress Barn Woman stores. The Company
expects to continue to open stores  primarily  in strip  centers,  as well as in
downtown and outlet locations.

<PAGE>

     In  conjunction  with its strategy of adding  primarily  Combo Stores,  the
Company continues to close or relocate its underperforming locations and expects
to close  approximately  40 such  locations  during fiscal 2002,  compared to 37
closed in fiscal 2001. 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,  resulted in an aggregate  store square footage
increase of  approximately  7% in fiscal 2001, and is expected to result in a 7%
increase in fiscal 2002.

     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. In Fall 2001, the
Company is implementing a customer  relationship  management program,  headed by
two  experienced   executives.   This  system  is  designed  to  track  customer
transactions,  with the  ability  target  customers  with  specific  offers  and
promotions,  including coupons, pre-sale announcements,  and special events. The
Company  believes  these  efforts can lead to  increased  sales and a more loyal
customer  base.  In addition,  the Company is actively  marketing its Dress Barn
private label credit card membership, with 1.5 million cardholders as of the end
of fiscal 2001. The credit card purchasing information, combined with those from
store,  catalog and  e-commerce  transactions,  is creating a valuable  customer
database for targeted marketing programs.  The Company believes it complies with
current  consumer  privacy  rules  and  regulations  for the  protection  of its
customers.

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

     To further enhance  shareholder value, in October 1998, the Company's Board
of  Directors  authorized  the  Company to  repurchase  up to $75 million of the
Company's common stock. The Company completed this  authorization  during fiscal
2000, purchasing a total of 4.8 million shares at an average price of $15.62 per
share. In March 2000, the Company's Board of Directors approved an authorization
to repurchase an additional $50 million of the Company's common stock, which was
increased  to $75 million in April 2001.  Through  the end of fiscal  2001,  the
Company had repurchased  782,700 shares (or  approximately 21% of the additional
authorization) at an aggregate cost of approximately $15.9 million.


Merchandising

     In addition to the  Company's  broad  assortment of career and casual wear,
the Company offers other wardrobe items including accessories,  jewelry, hosiery
and shoes. There are separate  merchandising teams for Dress Barn and Dress Barn
Woman.  Starting in fiscal  2002,  the Company  intentention  is that all of its
catalog  and  e-commerce  merchandise  offerings  will  consist  only  of  store
merchandise,   utilizing  the  stores'   merchandising  teams.  The  Company  is
developing  cross-marketing  strategies  covering store,  catalog and e-commerce
merchandise.  This includes featuring the same merchandise,  pricing, promotions
and return policies across all three channels.

<PAGE>

     The use of its own  label  and  private  brands  in  general  improves  the
Company's  control over the flow of merchandise  into its stores and enables the
Company to better specify quantities,  styles,  colors, size breaks and delivery
dates. In addition, the Company believes its private brands provide it with more
flexibility in the marketing  process by allowing for higher  initial  mark-ons.
The  Company  believes  it has the  expertise  to  execute  its Dress Barn brand
strategy due to its extensive  experience  sourcing goods (primarily  overseas),
its position as a merchandiser of established fashions, and its prior experience
with private  brands.  The percentage of the Company's  sales generated from all
private brand labels has increased to approximately 80% in fiscal 2001, from 75%
in fiscal 2000 and 70% in fiscal 1999.

     The Company continues to expand its shoe and petite-size departments. As of
July 28, 2001, 290 stores had shoe departments and 113 stores featured  petites.
The  Company  currently  plans to  increase  by a net of  approximately  20 shoe
departments and approximately 10 petite departments in fiscal 2002.

     Virtually all  merchandising  decisions  affecting the Company's stores are
made  centrally.  Day to day store  merchandising  is under the direction of the
President and five merchandise managers. Catalog and e-commerce merchandising is
under  the  direction  of the  Company's  President  and the  Catalog's  General
Manager. Store prices and markdowns are determined centrally but may be adjusted
locally in response to competitive  situations.  Generally,  the majority of the
merchandise  sold by the  Company is  uniformly  carried by all  stores,  with a
percentage varied by management  according to regional or consumer tastes or the
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  offers   first-quality  in  season  merchandise,   with
approximately  60%  of the  Company's  sales  volume  derived  from  sportswear,
including sweaters,  knit and woven tops, pants and skirts. The remainder of the
Company's  sales  volume  consists of dresses,  suits,  blazers,  outerwear  and
accessories.  Dress  Barn  Woman  merchandise  features  larger  sizes of styles
similar to Dress Barn merchandise.


Buying and Distribution


     Buying is conducted on a  departmental  basis for Dress Barn and Dress Barn
Woman by the Company's staff of over 45 buyers and assistant  buyers  supervised
by the  President  and five  merchandise  managers.  Buying for the catalogs and
e-commerce  is shared with the buyers of store  merchandise,  supervised by both
the Company's President and the Catalog's General Manager. The Company also uses
independent buying representatives in New York and overseas. The Company obtains
its  nationally  branded  merchandise  from  approximately  200  vendors and its
private brand merchandise from approximately 65 vendors, and no vendor accounted
over 5% of the Company's  purchases.  In fiscal 2001, imports accounted for over
50% of  merchandise  purchases  and  no  vendor  accounted  for  over  5% of the
Company's purchases. Typical lead times for the Company in making purchases from
its  vendors  range  from  approximately  one month for items  such as  dresses,
t-shirts,  socks and hosiery to approximately six months for items such as suits
and sweaters.

<PAGE>

     All  merchandise  for its stores is received  from vendors at the Company's
central  warehouse and distribution  facility in Suffern,  New York, where it is
inspected,  allocated  and  shipped to its stores.  The Company  uses its strong
relationships  with vendors to lower its operating costs by shifting freight and
insurance costs to the vendors and typically  requires them to provide ancillary
services.  For example, over 90% of the Company's merchandise is pre-ticketed by
vendors and over 40% is pre-packaged  for  distribution to stores,  which allows
cross-docking in the distribution  center to the stores. In addition,  over half
of the hanging  garments  purchased by the Company are delivered on  floor-ready
hangers.  Beginning in August 2001,  merchandise  for the catalog and e-commerce
operations is also being received at the Company's Suffern  location,  where the
merchandise  is stored,  processed  and shipped  directly to the  customer.  The
Company  no  longer  utilizes  a third  party  for the  catalog  and  e-commerce
operations' fulfillment functions.

     The Company generally does not warehouse store 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 28, 2001,  the Company  operated 720 stores in 43 states and the
District  of  Columbia.  404 of the stores  were  conveniently  located in strip
centers and 250 stores were located in outlet  centers.  During  fiscal 2001, no
store  accounted for as much as 1% of the Company's  total sales.  The following
table indicates the type of shopping facility in which the stores were located:

<TABLE>
<CAPTION>
                                                                                   Dress Barn
                                                              Dress Barn                Woman              Combo
      Type of Facility                                            Stores               Stores             Stores            Total
<S>                                                              <C>                   <C>               <C>              <C>
Strip Shopping Centers                                               126                   24                254              404
Outlet Malls and Outlet Strip Centers                                 67                   26                157              250
Free Standing, Downtown and Enclosed Malls                            31                    5                 30               66(*)

Total                                                                224                   55                441              720
                                                                     ---                   --                ---              ---
<FN>
(*) Includes 25 downtown locations
</FN>
</TABLE>

     The table on the  following  page  indicates the states in which the stores
operating on July 28, 2001 were located, and the number of stores in each state:

<PAGE>
<TABLE>
<CAPTION>
Location                                                                    DB                DBW              Combos
                                                                       -------            -------              ------
<S>                                                                    <C>                <C>                  <C>
Alabama                                                                      -                  -                   6
Arizona                                                                      3                  -                   6
Arkansas                                                                     -                  -                   2
California                                                                  19                  3                  16
Colorado                                                                     4                  1                   8
Connecticut                                                                  8                  3                  21
District of Columbia                                                         1                  -                   1
Delaware                                                                     3                  1                   3
Florida                                                                     11                  1                  15
Georgia                                                                      4                  2                  20
Idaho                                                                        -                  -                   2
Illinois                                                                     3                  -                  24
Indiana                                                                      5                  -                   5
Iowa                                                                         -                  -                   3
Kansas                                                                       -                  -                   4
Kentucky                                                                     1                  -                   6
Louisiana                                                                    -                  -                   4
Maine                                                                        2                  1                   -
Maryland                                                                     7                  2                  17
Massachusetts                                                               11                  2                  23
Michigan                                                                     8                  1                  23
Minnesota                                                                    1                  -                   4
Mississippi                                                                  -                  -                   6
Missouri                                                                     3                  2                  12
Nebraska                                                                     -                  -                   4
Nevada                                                                       2                  -                   4
New Hampshire                                                                1                  -                   5
New Jersey                                                                  21                  9                  18
New York                                                                    27                  4                  35
North Carolina                                                              10                  5                  16
Ohio                                                                         6                  1                  14
Oklahoma                                                                     -                  -                   2
Oregon                                                                       2                  2                   2
Pennsylvania                                                                24                  6                  18
Rhode Island                                                                 2                  -                   2
South Carolina                                                               9                  2                   7
Tennessee                                                                    4                  2                  11
Texas                                                                        6                  1                  37
Utah                                                                         2                  1                   4
Vermont                                                                      -                  -                   2
Virginia                                                                    13                  2                  18
Washington                                                                   1                  1                   5
West Virginia                                                                -                  -                   1
Wisconsin                                                                    -                  -                   5
Total                                                                      224                 55                 441
                                                                           ---                 --                 ---
</TABLE>

<PAGE>


Operations and Management


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

     The  Company's  stores are  designed to create a  comfortable  and pleasant
shopping  environment for its customers.  Merchandise and displays at all 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.  The Company has updated
its  interior  signage  and  fixturing  for a  more  open  and  easier  to  shop
environment.  During fiscal 2001 the Company  updated 50 of its existing  stores
and plans over time to update the many of its remaining stores.

     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 95 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.  They include (i) ongoing
video training,  (ii) manuals and (iii) one-on-one  training of sales associates
by store managers.


<PAGE>

     Approximately  64% of the  Company's  sales in fiscal  2001,  versus 61% in
fiscal 2000, were paid for by credit card, with the remainder being paid by cash
or check.  This increase was partially due to the catalog and e-commerce  sales,
which are virtually all credit card sales, and the Company's increased promotion
of the Dress Barn card.  Consistent with the other credit cards it accepts,  the
Company  assumes no credit  risk with  respect to the Dress Barn card but pays a
percentage  of sales as a service  charge.  As of July 28,  2001,  the number of
cardholders was approximately 1.5 million.  The average transaction on the Dress
Barn credit  card during  fiscal  2001 was  approximately  28% greater  than the
average  of all other  transactions  and  represented  approximately  11% of the
Company's sales.

     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.

Advertising and Marketing

     The Company markets through three channels;  retail,  catalog and Internet.
For its retail locations,  the Company primarily uses print advertising.  At the
store level, the store managers host local marketing programs, including fashion
shows and in-store events  designed to create greater  awareness of Dress Barn's
merchandise.  The Company also uses direct mail  programs,  with eight  mailings
during  fiscal 2001,  each to  approximately  800,000  households  including its
active  credit card  holders.  In  addition,  there were several  smaller,  more
targeted  mailings  during fiscal 2001. In fiscal 2000, the Company  conducted a
national brand awareness  campaign,  using cable,  local television and radio to
promote  Dress  Barn as a  national  brand and as a  "lifestyle"  to help  drive
customer traffic. The Company plans to launch a national campaign in 2002, after
conducting extensive customer research and surveys during Winter 2001.

     Marketing for the Company's  catalog and e-commerce  operations are closely
coordinated with its retail operations.  Beginning in fiscal 2002, the Company's
catalogs will carry only Dress Barn retail  merchandise.  This has many benefits
including  ease of  inventory  control,  since the  customer  can  exchange  her
purchase at her nearby  store,  or come into a store to see and handle the item.
The Company  plans to mail over 15 million  catalogs  during the fiscal 2002, to
both existing and prospective customers,  with the hope of driving them into the
store, as well as offering the opportunity to purchase by phone, mail or online.

     The Company  believes that  identifying its customers and their  purchasing
patterns is essential to its business.  During fiscal 2002, the Company  intends
to  implement a customer  relationship  management  program,  to track  customer
transactions.  The Company intends to incorporate  data from its stores,  credit
card program,  catalog and internet site (www.dressbarn.com) to develop targeted
marketing efforts, tailoring offers and promotions to its best customers.


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 a management  information  system,  which  integrates all
major  aspects  of  the  Company's  business,   including  sales,  distribution,
purchasing,  inventory  control,  merchandise  planning and  replenishment,  and
financial systems.  All stores utilize a point-of-sale system with price look-up
capabilities for both inventory and sales transactions. The Company continues to
refine its laptop system that delivers up-to-date  store-related  information to
its Regional and District Sales  Managers and automates many of their  reporting
functions.

<PAGE>



     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.  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.  In  fiscal  2002,  the  Company  will  complete  the  upgrade  of  its
back-office store system software and other information  systems to enable store
managers  and sales  associates  to spend  more time  servicing  customers.  The
Company  believes  that  such  investments  in  technology   enhance   operating
efficiencies and position Dress Barn for future growth.

     Beginning  in fiscal  2002,  the catalog  and  e-commerce  operations  will
utilize their own computer  operating  system,  which it purchased  from a third
party, for the call center and fulfillment operations,  which tracks merchandise
from the initial purchase order to the eventual  fulfillment of customer orders.
The  catalog  and  e-commerce   operations  also  use  their  own  planning  and
forecasting  system to determine  optimal mailing patterns to maximize  response
rates for catalog  mailings,  and to properly plan  merchandise  and  assortment
levels for the highest  potential order fulfillment rates with a minimum of back
orders.


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 its Dress Barn (R)  trademark is  materially
important to its business.  A small number of the Company's  stores currently in
operation,  primarily located in outlet centers, operate under the name Westport
Ltd. and Westport Woman.


Employees

     As of July 28, 2001, the Company had approximately  7,800 employees of whom
approximately  4,300  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,
the catalog and e-commerce operations,  and changes in the Company's merchandise
mix.

<PAGE>


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 in the  "Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations" section below.

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

     The Company competes  primarily with department  stores,  specialty stores,
discount stores, mass merchandisers and off-price retailers,  many of which have
substantially greater financial, marketing and other resources than the Company.
The Company's catalog and e-commerce  operations  compete with other catalog and
other multi-channel retailers.  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 closeouts and going-out-of-business sales by other women's apparel retailers.
The Company may face periods of strong  competition  in the future,  which could
have an adverse effect on its financial results.

     The Company's  success is largely dependent on the efforts and abilities of
its senior  management team.  During fiscal 2001, the Company added a key member
to its management team, Kathy Bufano Foster as President and Chief Merchandising
Officer.  Burt Steinberg,  previously Vice Chairman and Chief Operating Officer,
will continue with the Company as Executive  Director.  In this new position Mr.
Steinberg  will focus on  special  projects  including  overseeing  all  foreign
sourcing  and  updating  the  Company's  distribution  process,  as  well as new
business  opportunities.  The Company's results of operations may be impacted by
the effect, if any, of these changes on its day-to-day operations, merchandising
and store  activities,  growth  plans and  ability  to  continue  servicing  its
existing customer base.

     The Company's results of operations were negatively impacted in fiscal 2000
and fiscal 2001 by the costs of creating an  infrastructure  for its catalog and
e-commerce operations and from their continued  operations.  During fiscal 2002,
the Company is taking various  measures to reduce their operating  costs.  These
include  purchasing  new  operating  systems  for  its  catalog  and  e-commerce
operations,  moving the receipt  and  processing  of all catalog and  e-commerce
merchandise  and  customer   shipments  to  its  Suffern  facility  and  closely
integrating its catalog and e-commerce operations with its retail operations. If
sales of these  operations do not achieve their  planned  levels,  the Company's
operating results will continue to be negatively  impacted.  The Company may not
be able to operate the  catalog  and  e-commerce  operations  at a  satisfactory
profit level regardless of the measures it takes to reduce its costs. E-commerce
for specialty apparel retailers is relatively new, with few success stories.

<PAGE>

     The growth of the Company's store  operations is dependent,  in large part,
upon the Company's  ability to  successfully  execute its strategy of adding new
stores and expanding into related businesses, such as the catalog and e-commerce
operations.  The success of the  Company's  growth  strategy for its stores 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,  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  expansion  of the  Dress  Barn(R)  brand to the vast  majority  of the
Company's  merchandise  offerings  and the  marketing  campaign  to promote  the
Company's brand and image may not generate  positive reaction from its customers
and may not  increase  sales.  Failure of the Company to maintain  its  existing
customer base may negatively impact sales.

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

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

     The Company is committed to being 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.

<PAGE>

ITEM  2.  PROPERTIES


     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 28,
2001,  indicates the number of leases expiring  during the period  indicated and
the number of expiring leases with and without renewal options:

<TABLE>
<CAPTION>
                                                        Leases                    Number with                  Number Without
Fiscal Years                                           Expiring                 Renewal Options                Renewal Options

<S>                                                    <C>                      <C>                          <C>
2002                                                      135                          80                            55
2003                                                      131                         116                            15
2004                                                      126                         110                            16
2005-2007                                                 227                         192                            35
2008 and thereafter                                       101                          96                             5
                                                          ---                         ---                           ---

Total                                                     720                         594                           126
                                                          ---                         ---                           ---
</TABLE>

     New store leases  generally  provide for a base rent of between $15 and $25
per square foot per annum. Most leases have formulas  requiring the payment of a
percentage of sales as additional  rent,  generally  when sales reach  specified
levels. The Company's aggregate minimum rentals under operating leases in effect
at July 28, 2001,  and excluding  locations  acquired  after July 28, 2001,  for
fiscal 2002 are approximately  $78.2 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  used 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 current  expansion plans for its stores,  catalog and
e-commerce  businesses.  The catalog and e-commerce  call center and fulfillment
operations were moved to the Suffern  facility in August 2001, both staffed with
the Company's own personnel.  The Company  believes any substantial  increase in
the Company's  store base and  substantial  increases in catalog and  e-commerce
revenues   resulting  from  expansion  or  acquisition  may  require  additional
distribution facilities.

<PAGE>

ITEM  3.  LEGAL PROCEEDINGS

     On May 18, 2000, Alan M. Glazer,  GLZR  Acquisition  Corp. and Bedford Fair
Industries,  Ltd.  commenced an action against the Company in the Superior Court
of Connecticut,  Stamford Judicial District,  seeking  compensatory and punitive
damages in an unspecified  amount for alleged unfair trade practices and alleged
breach of contract  arising out of negotiations  before Bedford Fair Industries'
Chapter 11  bankruptcy  liquidation  for the  acquisition  of the  Bedford  Fair
business  which the Company never  concluded.  The Company  believes there is no
merit in any of the plaintiffs'  asserted  claims,  is vigorously  defending the
litigation,  and, in any event, does not expect the outcome of these proceedings
to have a material adverse effect on the Company.

     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


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

<CAPTION>
Name                                              Age                                 Positions
<S>                                               <C>                      <C>
Elliot S. Jaffe                                    75                       Chairman of the Board,
                                                                            Chief Executive Officer and Director

David R. Jaffe                                     42                       Vice Chairman,
                                                                            Chief Operating Officer and Director

Kathryn Bufano Foster                              49                       President and Chief Merchandising Officer

Burt Steinberg                                     56                       Executive Director and
                                                                            Director

Armand Correia                                     55                       Senior Vice President and Chief
                                                                            Financial Officer

Eric Hawn                                          51                       Senior Vice President
                                                                            Store Operations

Elise Jaffe                                        46                       Senior Vice President
                                                                            Real Estate


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

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

     Ms.  Bufano  Foster  joined the Company in February  2001 as President  and
Chief Merchandising Officer.  Before joining the Company, she was Executive Vice
President and GMM of Women's Apparel for Macy's Department Stores.  Prior to her
six years with Macy's,  she spent 17 years at Lord and Taylor and left as Senior
Vice President and GMM of Ladies Sportswear, Special Sizes and Juniors.

     Mr. Steinberg  became Executive  Director of the Company in August 2001. He
had been  President  and Chief  Operating  Officer of the Company since 1989 and
Vice Chairman since February 2001.

     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.

<PAGE>

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

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

</FN>
</TABLE>
<PAGE>




                                     PART II

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


Market Prices of Common Stock

     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.


<TABLE>
<CAPTION>
                                                     Fiscal 2001                         Fiscal 2000
                                                      Bid Prices                         Bid Prices
                                                   High           Low                  High          Low
Fiscal Period

<S>                                              <C>           <C>                   <C>          <C>
         First Quarter                              $25.38        $19.88                $19.63       $14.00
         Second Quarter                             $31.00        $23.25                $18.25       $15.06
         Third Quarter                              $30.75        $21.38                $22.69       $13.56
         Fourth Quarter                             $28.92        $21.55                $24.94       $16.25

</TABLE>

Number of Record Holders

     The number of record holders of the Company's common stock as of October 1,
2001 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
Dollars in thousands except per share information
<CAPTION>
                                                                                 Fiscal Year Ended
                                                ------------------------------------------------------------------------------------
                                                        July 28,        July 29,         July 31,         July 25,         July 26,
                                                            2001            2000             1999             1998             1997
                                                ------------------------------------------------------------------------------------

<S>                                                  <C>             <C>              <C>              <C>              <C>
     Net sales                                          $695,008        $656,174         $615,975         $598,175         $554,843
     Cost of sales, including
       occupancy and buying costs                        443,426         419,479          398,282          381,354          358,093
                                                ------------------------------------------------------------------------------------

     Gross profit                                        251,582         236,695          217,693          216,821          196,750

     Selling, general and
       administrative expenses                           180,991         165,336          150,897          142,098          135,384

     Depreciation & amortization                          23,916          21,164           23,104           17,758           16,139
                                                ------------------------------------------------------------------------------------

     Operating income                                     46,675          50,195           43,692           56,965           45,227

     Interest income- net                                  8,949           7,667            8,787            6,385            4,800
                                                ------------------------------------------------------------------------------------

        Earnings before
          income taxes                                    55,624          57,862           52,479           63,350           50,027

     Income taxes                                         20,303          21,120           19,155           23,123           18,260
                                                ------------------------------------------------------------------------------------

        Net earnings                                     $35,321         $36,742          $33,324          $40,227          $31,767
                                                ====================================================================================

     Earnings per share - basic                            $1.94           $1.94            $1.56            $1.75            $1.40
                                                ====================================================================================

     Earnings per share - diluted                          $1.88           $1.89            $1.53            $1.70            $1.33
                                                ====================================================================================

Balance sheet data:
     Working capital                                    $197,257        $159,105         $159,089         $170,412         $153,579
     Total assets                                       $402,282        $374,236         $363,579         $341,154         $309,502
     Long-term debt                                           --              --               --               --           $3,500
     Shareholders' equity                               $296,597        $259,561         $253,600         $265,608         $232,822

Percent of net sales:
     Cost of sales, including
       occupancy and buying costs                          63.8%           63.9%            64.7%            63.8%            64.5%
     Gross profit                                          36.2%           36.1%            35.3%            36.2%            35.6%
     Selling, general and
       administrative expenses                             26.0%           25.2%            24.5%            23.8%            24.4%
     Operating income                                       6.7%            7.6%             7.1%             9.5%             8.2%
     Net earnings                                           5.1%            5.6%             5.4%             6.7%             5.7%

<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


Forward-Looking Statements

     Certain statements  contained in this Annual Report are forward-looking and
involve a number of risks and uncertainties.  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,  including  consumers'
reaction  to global  political  instability;  competitive  factors  and  pricing
pressures,  including the  promotional  activities of major  department  stores;
consumer  apparel  buying  patterns,  such as the  ongoing  shift to more casual
apparel;  import risks, including potential disruptions,  economic and political
problems in countries from which  merchandise is imported,  and duties,  tariffs
and quotas on imported  merchandise;  the Company's  ability to predict  fashion
trends; the availability,  selection and purchasing of attractive merchandise on
favorable terms;  inadequate growth in the sales from the catalog and e-commerce
operations;  new or increased  competition in the catalog or e-commerce channels
of distribution;  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.


Results of Operations

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

                                              Fiscal Year Ended
                                July 28,          July 29,          July 31,
                                    2001              2000              1999
                                ---------         ---------          --------

Net sales                          100.0%            100.0%            100.0%
Cost of sales, including
  occupancy and buying costs        63.8%             63.9%             64.7%
Selling, general and
  administrative expenses           26.0%             25.2%             24.5%
Depreciation and amortization        3.5%              3.2%              3.8%
Interest income - net                1.3%              1.2%              1.4%
Earnings before income taxes         8.0%              8.8%              8.5%
Net earnings                         5.1%              5.6%              5.4%


Fiscal 2001 Compared to Fiscal 2000

     Net sales  increased by 5.9% to $695.0  million for the 52 weeks ended July
28, 2001 ("fiscal  2001"),  from $656.2  million for the 52 weeks ended July 29,
2000  ("fiscal  2000").  The  sales  increase  from  fiscal  2000  was due to an
approximately  7% increase in total selling square footage,  offset in part by a
1.2% decrease in comparable  store sales.  The increase in store square  footage
was due to the opening of 68 new stores,  primarily combination Dress Barn/Dress
Barn Woman stores ("combo  stores"),  which carry both Dress Barn and Dress Barn
Woman  merchandise,  offset in part by the  square  footage  reduction  from the
closing  of 37  underperforming  stores.  The  number  of  stores  in  operation
increased to 720 stores as of July 28, 2001,  from 689 stores in operation as of
July 29, 2000.  The Company  believes its strategic  initiatives,  including the
development of its Dress Barn(R) brand  merchandise and brand image  contributed
to a  strong  Fall  selling  season.  Sales  slowed  in the  Spring,  reflecting
diminished consumer confidence and continuing concerns over the slowing economy,
resulting in an overall 1.2% decline in comparable  store sales for fiscal 2001.
The Company's  strategy for fiscal 2002 is to continue  opening  primarily combo
stores and converting its existing single-format stores into combo stores, while
closing  its  underperforming  locations.  Store  expansion  will  focus on both
expanding in the  Company's  existing  major trading  markets,  in certain cases
seeking a downtown  location  and/or  adding to a cluster of  suburban  or other
locations, and developing new markets.
<PAGE>

     The Company mailed a total of 11 million Dress Barn catalogs  during fiscal
2001.  The  Company  also sells  merchandise  on the  internet  via its web site
(www.dressbarn.com).  The Company's fiscal 2001 earnings per share-diluted  were
reduced by  approximately  $.41 due to the  operating  costs of the  catalog and
e-commerce  operations.  The Company is integrating  these  operations  with its
store  operations.   The  Company  believes  both  the  catalog  and  e-commerce
operations represent complementary channels of distribution to its existing core
business,  and help to drive store  traffic.  During fiscal 2002, the Company is
taking the  fulfillment  operations  in-house  to improve  customer  service and
reduce operating costs.

     Gross profit (net sales less cost of goods sold,  including  occupancy  and
buying costs)  increased by 6.3% to $251.6  million,  or 36.2% of net sales,  in
fiscal 2001 from $236.7  million,  or 36.1% of net sales,  in fiscal  2000.  The
increase in gross profit as a percentage  of sales was  primarily  due to higher
initial  margins from the  Company's  increased  mix to more Dress Barn(R) brand
merchandise and lower markdowns due to tight  inventory  controls,  which helped
increase  inventory turns and minimize  markdowns.  This was offset, in part, by
higher store  occupancy  costs as a percentage  of sales  resulting  from higher
rents for new stores, store expansions and lease renewals.

     Selling,  general and administrative ("SG&A") expenses increased by 9.5% to
$181.0 million,  or 26.0% of net sales,  in fiscal 2001 from $165.3 million,  or
25.2% of net sales, in fiscal 2000. Cost controls and productivity  improvements
were not sufficient to offset a combination  of negative  leverage from the 1.2%
decrease  in  comparable  store sales and its impact on fixed  costs,  increased
store operating costs and catalog and e-commerce expenses.

     Depreciation  expense  increased by 13.0% to $23.9  million for fiscal 2001
from $21.1 million for fiscal 2000. Fiscal 2001's depreciation  expense included
the write-off of certain obsolete computer equipment and software.  Depreciation
expense for both periods also includes certain write-offs related to the closure
of 37 stores and 47 stores during fiscal 2001 and fiscal 2000, respectively.

     Interest  income - net  increased  by 16.7% to $8.9 million for fiscal 2001
from $7.7  million  for  fiscal  2000.  This was the result of  increased  funds
available for investment during the year, partially offset by decreased interest
rates.

     Net earnings for fiscal 2001  decreased  3.9% to $35.3 million versus $36.7
million in fiscal 2000,  while diluted earnings per share fell 0.5% to $1.88 per
share versus $1.89 in fiscal 2000. The earnings per share decrease was less than
the decrease in net earnings  primarily  due to the  Company's  repurchase of .3
million  and 2.4  million  shares of its common  stock in fiscal  2001 and 2000,
respectively.


<PAGE>

Fiscal 2000 Compared to Fiscal 1999

     Net sales  increased by 6.5% to $656.2 million for fiscal 2000, from $616.0
million for the 53 weeks ended July 31, 1999  ("fiscal  1999").  On a comparable
52-week basis sales would have  increased  8.2%.  The sales increase from fiscal
1999 was  primarily  due to a 1.8%  increase  in  comparable  store sales and an
approximately 9% increase in total selling square footage.  The Company believes
the  increase in  comparable  store sales  resulted in part from a number of its
strategic  initiatives,  including  the  development  of its Dress Barn(R) brand
merchandise  and brand image and the  Company's  ability to react to the growing
customer  preference for casual career wear and adapt its merchandise  offerings
accordingly.  The increase in store square footage was due to the opening of new
combo  stores and the  conversion  of  single-format  stores into combo  stores,
offset  in  part  by  the  square   footage   reduction   from  the  closing  of
underperforming  stores.  The  number of stores in  operation  increased  to 689
stores as of July 29, 2000, from 674 stores in operation as of July 31, 1999.

     The Company mailed its first Dress Barn catalog in September  1999,  with a
total of 6 million  catalogs mailed during fiscal 2000.  During Spring 2000, the
Company  also  started  its  e-commerce  business,  selling  merchandise  on the
internet  via  its web  site  (www.dressbarn.com).  The  Company's  fiscal  2000
earnings  per  share-diluted  were  reduced  by  approximately  $0.22 due to the
startup costs of launching the catalog and  e-commerce  operations  and building
the infrastructure to support their continued expansion.

     Gross profit increased by 8.7% to $236.7 million, or 36.1% of net sales, in
fiscal 2000 from $217.7  million,  or 35.3% of net sales,  in fiscal  1999.  The
increase in gross profit as a percentage  of sales was  primarily  due to higher
initial  margins from the  continued  increase in the  percentage  of sales from
private  brands and lower  markdowns as a percentage of sales.  Increased  store
sales more than offset higher store  occupancy costs resulting from the increase
in square  footage and higher rents for new stores,  store  expansions and lease
renewals.

     SG&A expenses  increased by 9.6% to $165.3 million,  or 25.2% of net sales,
in fiscal 2000 from $150.9 million,  or 24.5% of net sales, in fiscal 1999. Cost
controls, productivity improvements and increases in comparable store sales were
not sufficient to offset increases in store operating costs  (primarily  selling
costs  resulting from the tight labor market) and increases in  advertising  and
marketing expenses.  In addition,  SG&A expenses included start-up costs for the
Dress Barn catalog and the e-commerce operations.

     Depreciation  expense  decreased  by 8.5% to $21.2  million for fiscal 2000
from $23.1 million for fiscal 1999. Fiscal 1999's depreciation  expense included
additional provisions for future store closings and an additional charge for the
replacement of its store  personal  computers  during fiscal 2000.  Depreciation
expense for both periods also includes certain write-offs related to the closure
of 47 stores and 56 stores during fiscal 2000 and fiscal 1999, respectively.

     Interest  income - net  decreased  by 12.7% to $7.7 million for fiscal 2000
from $8.8  million for fiscal 1999.  During  fiscal 2000,  funds  available  for
investment  were  consistent  with fiscal 1999,  but fiscal 1999  included  $1.2
million of net capital gains from the redemption of equity funds made during the
fiscal year.

     Net earnings for fiscal 2000 increased  10.3% to $36.7 million versus $33.3
million in fiscal 1999,  while  diluted  earnings per share  increased  23.5% to
$1.89 per share  versus $1.53 in fiscal  1999.  The earnings per share  increase
exceeded the increase in net earnings primarily due to the Company's  repurchase
of 2.4  million and 3.0  million  shares of its common  stock in fiscal 2000 and
1999, respectively.


<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, the continued expansion of its
successful  combination  store  format  and  the  building  of its  catalog  and
e-commerce  capabilities.  Total capital expenditures were $25.8 million,  $22.3
million and $22.7 million in fiscal 2001, 2000 and 1999,  respectively.  Capital
expenditures  increased  $3.5  million  in  fiscal  2001  primarily  due  to the
investment  in new store  technology  and back  office  operating  systems.  The
Company also  repurchased  310,000  outstanding  shares of its stock for a total
cost of $7.4 million  during  fiscal 2001 and 2,399,400  outstanding  shares for
$33.9 million during fiscal 2000.

     The Company funds inventory expenditures through cash flows from operations
and the favorable  payment terms the Company has  established  with its vendors.
The Company's net cash provided by operations in fiscal 2001  increased to $63.2
million as compared to $61.5  million in fiscal 2000 and $84.5 million in fiscal
1999.  The large increase in fiscal 1999 versus both fiscal 2001 and fiscal 2000
was due  primarily  to the $21.0  million  increase in accounts  payable  (while
inventory  increased  $7.4  million)  and to a decrease  in taxes paid in fiscal
1999.

     At July 28, 2001, the Company had $177.5  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 approximately $197.3 million at July
28, 2001. In addition, the Company had available $115 million in unsecured lines
of credit  bearing  interest  below  the prime  rate.  The  Company  had no debt
outstanding  under  any of the  lines  at  July  28,  2001.  However,  potential
borrowings were limited by approximately  $22 million of outstanding  letters of
credit primarily to vendors for import merchandise purchases.

     In fiscal  2002,  the Company  plans to open  approximately  60  additional
stores,  convert approximately 15 single-format stores to its larger combo store
format and continue its store remodeling  program.  The Company intends to focus
on its current markets, and enter into new markets where economically justified.
The Company  intends to pursue  downtown  locations as these  stores  complement
existing suburban locations in its trading markets.  The Company also intends to
continue developing its catalog and e-commerce  capabilities.  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.


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 2002.  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, the catalog and e-commerce operations, and changes in
the Company's merchandise mix.


<PAGE>


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 2001 Annual Meeting of Shareholders.


<PAGE>



                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


ITEM 14.  (a) (1)  FINANCIAL STATEMENTS                             PAGE NUMBER
---------------------------------------                             -----------

    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

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


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

<TABLE>
<CAPTION>
         The following exhibits are filed as part of this Report and except
Exhibits 10(b), 10(ss), 21 and 23 are all incorporated by reference (utilizing
the same exhibit numbers) from the sources shown.

                                                                                                            Incorporated By
                                                                                                            Reference From

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

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

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

4.                Specimen Common Stock Certificate                                                                   (1)

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

10(b)             Employment Agreement With Burt Steinberg

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

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


</TABLE>
<PAGE>


<TABLE>
                                                                                                            Incorporated By
                                                                                                            Reference From

Leases of Company premises of which the lessor is Elliot S. Jaffe or members of
his family or related trusts:
<S>               <C>                                                                                        <C>
                  10(l)   Danbury, CT store                                                                           (1)

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

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

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

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

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

10(mm)            Lease between Dress Barn and  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

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

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

10(rr)            Employment Agreement With Kathryn Bufano Foster                                                    (14)

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

21.               Subsidiaries of the Registrant

23.               Independent Auditors' Consent

<FN>
References on following page:
</FN>
</TABLE>

<PAGE>



--------------------------------------------------------------------------------
(1)  The Company's  Registration  Statement on Form S-1 under the Securities Act
     of 1933  (Registration No. 2-82916) declared effective May 4, 1983. (2) The
     Company's  Annual  Report on Form 10-K for the  fiscal  year ended July 28,
     1984.
(3)  The Company's Annual Report on Form 10-K for the fiscal year ended July 27,
     1985.
(4)  The Company's Annual Report on Form 10-K for the fiscal year ended July 26,
     1986.
(5)  The Company's Annual Report on Form 10-K for the fiscal year ended July 30,
     1988.
(6)  The Company's Annual Report on Form 10-K for the fiscal year ended July 28,
     1990.
(7)  The Company's Annual Report on Form 10-K for the fiscal year ended July 27,
     1991.
(8)  The Company's Annual Report on Form 10-K for the fiscal year ended July 25,
     1992.
(9)  The Company's Annual Report on Form 10-K for the fiscal year ended July 31,
     1993.
(10) The Company's  Registration  Statement on Form S-8 under the Securities Act
     of 1933  (Registration  No.  33-60196)  filed on March 29,  1993.  (11) The
     Company's  Annual  Report on Form 10-K for the  fiscal  year ended July 27,
     1996.
(12) The Company's Annual Report on Form 10-K for the fiscal year ended July 25,
     1998.
(13) The Company's Annual Report on Form 10-K for the fiscal year ended July 29,
     2000.
(14) The Company's Quarterly Report on Form 10-Q for the quarter ended April 29,
     2001.


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 28, 2001.


ITEM 14.  (c)  EXHIBITS


     All exhibits are incorporated by reference as shown in Item 14(a)3,  except
Exhibits 10(b), 10(ss), 21 and 23 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

     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.

Signature                    Title                                        Date

/s/ ELLIOT S. JAFFE                                                     10/26/00
--------------------
Elliot S. Jaffe           Chairman of the Board and
                          Chief Executive Officer
                          (Principal Executive Officer)

/s/ ROSLYN S. JAFFE                                                     10/26/00
---------------------
Roslyn S. Jaffe           Director and Secretary and Treasurer

/s/ DAVID R. JAFFE                                                      10/26/00
---------------------
David R. Jaffe            Director, Vice Chairman
                          and Chief Operating Officer

/s/ BURT STEINBERG                                                      10/26/00
---------------------
Burt Steinberg            Director and Executive Director

/s/ KLAUS EPPLER                                                        10/26/00
-----------------------
Klaus Eppler              Director

/s/ DONALD JONAS                                                        10/26/00
----------------
Donald Jonas              Director

/s/ EDWARD D. SOLOMON                                                   10/26/00
---------------------
Edward D. Solomon         Director

/s/VIVIAN BEHRENS                                                       10/26/00
------------------
Vivian Behrens            Director

/s/ ARMAND CORREIA                                                      10/26/00
---------------------
Armand Correia            Chief Financial Officer (Principal
                          Financial and Accounting Officer)


<PAGE>



                          INDEPENDENT AUDITORS' REPORT



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


     We have audited the accompanying  consolidated  balance sheets of The Dress
Barn,  Inc. and  Subsidiaries  (the  "Company") as of July 28, 2001 and July 29,
2000, and the related consolidated statements of earnings,  shareholders' equity
and cash flows for each of the three  years in the period  ended July 28,  2001.
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  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

     In our opinion,  such consolidated  financial statements present fairly, in
all material respects,  the consolidated financial position of the Company as of
July 28, 2001 and July 29, 2000, and the consolidated  results of its operations
and its consolidated  cash flows for each of the three years in the period ended
July 28, 2001 in conformity with accounting principles generally accepted in the
United States of America.



Deloitte & Touche LLP
New York, New York
September 12, 2001

<PAGE>

<TABLE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Balance Sheets
Amounts in thousands, except share data
<CAPTION>
                                                                                  July 28,                 July 29,
                                                                                      2001                     2000
                                                                         ------------------       ------------------
<S>                                                                      <C>                      <C>
ASSETS
Current Assets:
     Cash and cash equivalents                                                    $ 16,834                   $2,978
     Marketable securities and investments (Note 2)                                177,474                  154,050
     Merchandise inventories                                                       104,487                  111,901
     Prepaid expenses and other                                                      4,147                    4,851
                                                                         ------------------       ------------------
        Total Current Assets                                                       302,942                  273,780
                                                                         ------------------       ------------------
Property and Equipment:
     Leasehold improvements                                                         59,019                   54,749
     Fixtures and equipment                                                        144,468                  128,300
     Computer software                                                              14,277                   12,294
     Automotive equipment                                                              547                      560
                                                                         ------------------       ------------------
                                                                                   218,311                  195,903
     Less accumulated depreciation
       and amortization                                                            129,712                  109,146
                                                                         ------------------       ------------------
                                                                                    88,599                   86,757
                                                                         ------------------       ------------------
Deferred Income Taxes (Note 4)                                                       7,278                    9,864
                                                                         ------------------       ------------------
Other Assets                                                                         3,463                    3,835
                                                                         ------------------       ------------------
                                                                                  $402,282                 $374,236
                                                                         ==================       ==================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
     Accounts payable- trade                                                      $ 53,681                  $64,780
     Accrued expenses                                                               45,006                   39,633
     Customer credits                                                                5,811                    5,255
     Income taxes payable                                                            1,187                    5,007
                                                                         ------------------       ------------------
        Total Current Liabilities                                                  105,685                  114,675
                                                                         ------------------       ------------------
Commitments (Note 5)
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- 25,656,232 and 25,094,847
             shares, and outstanding- 18,237,032 and
             17,985,647 shares, respectively                                         1,283                    1,255
     Additional paid-in capital                                                     45,339                   37,083
     Retained earnings                                                             364,491                  329,170
     Treasury stock, at cost                                                     (114,577)                (107,162)
     Accumulated other comprehensive income (loss)                                      61                    (785)
                                                                         ------------------       ------------------
                                                                                   296,597                  259,561
                                                                         ------------------       ------------------
                                                                                  $402,282                 $374,236
                                                                         ==================       ==================

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

<PAGE>
<TABLE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings
Amounts in thousands, except per share amounts
<CAPTION>
                                                                                     Fiscal Year Ended
                                                               ------------------------------------------------------------
                                                                          July 28,            July 29,            July 31,
                                                                              2001                2000                1999
                                                               ------------------------------------------------------------
<S>                                                             <C>                      <C>                 <C>
     Net sales                                                            $695,008            $656,174            $615,975
     Cost of sales, including
       occupancy and buying costs                                          443,426             419,479             398,282
                                                               ------------------------------------------------------------

     Gross profit                                                          251,582             236,695             217,693

     Selling, general and
       administrative expenses                                             180,991             165,336             150,897

     Depreciation and amortization                                          23,916              21,164              23,104
                                                               ------------------------------------------------------------

     Operating income                                                       46,675              50,195              43,692

     Interest income- net                                                    8,949               7,667               8,787
                                                               ------------------------------------------------------------

     Earnings before
          income taxes                                                      55,624              57,862              52,479

     Income taxes                                                           20,303              21,120              19,155
                                                               ------------------------------------------------------------

     Net earnings                                                          $35,321             $36,742             $33,324
                                                               ============================================================

     Earnings per share:
            Basic                                                            $1.94               $1.94               $1.56
                                                               ============================================================
            Diluted                                                          $1.88               $1.89               $1.53
                                                               ============================================================

     Weighted average shares outstanding:
            Basic                                                           18,240              18,958              21,336
                                                               ------------------------------------------------------------
            Diluted                                                         18,747              19,408              21,758
                                                               ------------------------------------------------------------

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

<PAGE>

<TABLE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Shareholders' Equity
Dollars and shares in thousands.
<CAPTION>
                                                                                                          Accumulated
                                                       Common Stock     Additional                           Other         Total
                                                     ------------------    Paid-In   Retained  Treasury  Comprehensive Shareholders'
                                                     Shares      Amount    Capital   Earnings    Stock    Income(Loss)     Equity
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>         <C>       <C>       <C>        <C>          <C>        <C>
Balance, July 25, 1998                               22,839      $1,225    $25,175   $259,104   ($21,005)    $ 1,109    $265,608
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                                                                        33,324
   Unrealized holding loss on marketable securities                                                           (1,692)
                                                                                                                        ----------
    Total comprehensive income                                                                                            31,632
                                                                                                                        ----------
Deferred compensation                                    10         --         164                                           164
Tax benefit from exercise of stock options                                   2,431                                         2,431
Employee Stock Purchase Plan activity                    10         --         133                                           133
Shares issued pursuant to exercise of stock options     119          7         894                                           901
Purchase of treasury stock                           (3,042)                                     (47,269)                (47,269)
------------------------------------------------------------------------------------------------------------------------------------
Balance, July 31, 1999                               19,936      1,232      28,797    292,428    (68,274)       (583)    253,600
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                                                                        36,742
   Unrealized holding loss on marketable securities                                                             (202)
                                                                                                                        ----------
    Total comprehensive income                                                                                            36,540
                                                                                                                        ----------
Tax benefit from exercise of stock options                                   4,050                                         4,050
Employee Stock Purchase Plan activity                     7          1         109                                           110
Shares issued pursuant to exercise of stock options     442         22       4,127                                         4,149
Purchase of treasury stock                           (2,399)                                     (38,888)                (38,888)
------------------------------------------------------------------------------------------------------------------------------------
Balance, July 29, 2000                               17,986      1,255      37,083    329,170   (107,162)       (785)    259,561
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                                                                        35,321
   Unrealized holding gain on marketable securities                                                              846
                                                                                                                        ----------
    Total comprehensive income                                                                                            36,167
                                                                                                                        ----------
Deferred compensation                                     8         --         183                                           183
Tax benefit from exercise of stock options                                   1,668                                         1,668
Employee Stock Purchase Plan activity                     5         --         102                                           102
Shares issued pursuant to exercise of stock options     548         28       6,303                                         6,331
Purchase of treasury stock                             (310)                                      (7,415)                 (7,415)
------------------------------------------------------------------------------------------------------------------------------------
Balance, July 28, 2001                               18,237     $1,283     $45,339   $364,491  ($114,577)       $ 61    $296,597
===================================================================================================================================
<FN>
See notes to consolidated financial statements
</FN>
</TABLE>

<PAGE>

<TABLE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Dollars in thousands
<CAPTION>
                                                                                                   Fiscal Year Ended
                                                                                ---------------------------------------------------
                                                                                         July 28,         July 29,        July 31,
                                                                                             2001             2000            1999
                                                                                ---------------------------------------------------
<S>                                                                               <C>                <C>             <C>
Operating Activities:
Net earnings                                                                              $35,321          $36,742         $33,324
                                                                                ---------------------------------------------------
Adjustments to reconcile net earnings to net cash provided by operating
    activities:
      Depreciation and amortization of property and
          equipment (net)                                                                  22,309           16,481          16,296
      Write-down of non-trading equity investment                                             ---              ---           3,000
      Loss on disposal of closed store assets                                               1,607            4,683           6,808
      Decrease (increase) in deferred income tax assets                                     2,586                2          (6,790)
      Deferred compensation                                                                   183              ---             164
      Changes in assets and liabilities:
         Decrease (increase) in merchandise inventories                                     7,414           (1,763)         (7,432)
         Decrease (increase) in prepaid expenses and other                                    704           (2,813)          2,163
         Decrease (increase) in other assets                                                  372             (545)            120
        (Decrease) increase in accounts payable- trade                                    (11,099)           2,565          21,004
         Increase in accrued expenses                                                       5,373            1,129           6,996
         Increase in customer credits                                                         556            1,891             537
        (Decrease) increase in income taxes payable                                        (2,152)           3,160           8,327
                                                                                ---------------------------------------------------
       Total adjustments                                                                   27,853           24,790          51,193
                                                                                ---------------------------------------------------

        Net cash provided by operating activities                                          63,174           61,532          84,517
                                                                                ---------------------------------------------------

Investing Activities:
    Purchases of property and equipment - net                                             (25,758)         (26,565)        (22,724)
    Sales and maturities of marketable securities and investments                         119,697           22,132          84,078
    Purchases of marketable securities and investments                                   (142,275)         (36,984)        (85,176)
                                                                                ---------------------------------------------------
       Net cash used in investing activities                                              (48,336)         (41,417)        (23,822)
                                                                                ---------------------------------------------------

Financing Activities:
    Purchase of treasury stock                                                             (7,415)         (38,888)        (47,269)
    Proceeds from Employee Stock Purchase Plan                                                102              110             133
    Proceeds from stock options exercised                                                   6,331            4,149             901
                                                                                ---------------------------------------------------
      Net cash used in financing activities                                                  (982)         (34,629)        (46,235)
                                                                                ---------------------------------------------------

Net increase (decrease) in cash and cash equivalents                                       13,856          (14,514)         14,460
Cash and cash equivalents- beginning of period                                              2,978           17,492           3,032
                                                                                ---------------------------------------------------
Cash and cash equivalents- end of period                                                  $16,834           $2,978         $17,492
                                                                                ===================================================

Supplemental Disclosure of Cash Flow Information:
    Cash paid for income taxes                                                            $20,005          $18,047         $16,730
                                                                                ===================================================
<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 28, 2001

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 is a  specialty  retailer  of women's  apparel (in both  regular and
large  sizes),  including  shoes and  accessories.  Given the  similar  economic
characteristics of the Company's different store formats,  the similar nature of
the products sold,  gross margins,  type of customer and method of distribution,
the operations of the Company are aggregated into one reportable segment.

         Principles of consolidation

     The consolidated  financial  statements include the accounts of the Company
and its subsidiaries.  All material  intercompany  balances and transactions are
eliminated.  The Company  reports on a 52-53 week fiscal year ending on the last
Saturday in July. The fiscal year ended July 31, 1999 consisted of 53 weeks; the
other years presented consisted of 52 weeks.

         Revenue recognition

     Revenues from retail sales, net of returns, are recognized upon delivery of
the merchandise to the customer and exclude sales taxes.

         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.

         Marketable securities and investments

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

         Merchandise inventories

     Merchandise  inventories  are  valued  at the  lower of cost 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.


<PAGE>

         Income taxes

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

         Store preopening costs

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

         Earnings per share (EPS)

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

         Advertising costs

     Advertising  costs are  expensed in the period in which they are  incurred.
Advertising expenses were $8.6 million, $8.8 million and $6.8 million for fiscal
2001, 2000 and 1999, respectively.

         Recent Accounting Pronouncements

     In  July  2001,  Statements  of  Financial  Accounting  Standards  No.  141
"Business Combinations" ("SFAS 141") and No. 142, "Goodwill and Other Intangible
Assets"  ("SFAS 142) were released.  The related  statements  address  financial
accounting  and reporting for business  combinations  and acquired  goodwill and
other  intangible  assets.  SFAS 141 is effective for all business  combinations
initiated  after June 30,  2001.  SFAS 142 is  effective  for all  fiscal  years
beginning  after  December 15, 2001,  however early  adoption is permitted.  The
Company is required to adopt SFAS 142 in fiscal  2003.  The Company is currently
assessing  the  impact  that SFAS 142 will have on its  financial  position  and
results of operations.

     Effective  July 30,  2000,  the  Company  adopted  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities"  ("SFAS  133").  SFAS 133, as amended,  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments  embedded in other contracts and for hedging activities.  Under SFAS
133,  certain  contracts that were not formerly  considered  derivatives may now
meet the  definition of a  derivative.  The adoption of SFAS 133 did not have an
impact on the consolidated  financial position,  results of operations,  or cash
flows of the Company

     In October 2001,  SFAS No. 144, " Accounting for the Impairment or Disposal
of  Long-Lived  Assets"  (SFAS  144") was  released.  This  statement  addresses
financial  accounting and reporting for the impairment or disposal of long-lived
assets and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for  Long-Lived  Assets to Be Disposed Of". In August 2001,  SFAS No.
143,  "Accounting for Asset  Retirement  Obligations"  (SFAS 144") was released.
This Statement establishes  accounting standards for recognition and measurement
of a liability  for an asset  retirement  obligation  and the  associated  asset
retirement  cost.  The  Company  is  required  to adopt SFAS 144 and SFAS 143 in
fiscal 2003.  The Company has not yet assessed  what  impact,  if any,  that the
adoption  of SFAS  144 and  SFAS 143 will  have on its  financial  position  and
results of operations.


<PAGE>

         Use of estimates

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

         Comprehensive income

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

         Valuation of long-lived assets

     The  Company  periodically  reviews  its  long-lived  assets for  potential
impairment,  where  events or  changes  in  circumstances  indicate  that  their
carrying  amount may not be  recoverable.  In that event,  a loss is  recognized
based on the amount the  carrying  amount  exceeds the fair market  value of the
long-lived asset.

         Stock based compensation

     The  Company  follows  the  disclosure-only   provisions  of  Statement  of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation" ("SFAS 123"). SFAS 123 encourages, but does not require, companies
to  adopt  a  fair  value  based  method  for  determining  expense  related  to
stock-based  compensation.  The disclosures are set forth in Note 6. The Company
continues to account for  stock-based  compensation  using the  intrinsic  value
method  as  prescribed  under   Accounting   Principles  Board  Opinion  No  25,
"Accounting for Stock Issued to Employees," and related interpretations.

         Financial instruments

     Concentration  of Credit Risk - Financial  instruments,  which  potentially
subject the Company to  concentrations  of credit  risk,  are  principally  bank
deposits and short-term  investments.  Cash and cash  equivalents  are deposited
with  high  credit  quality  financial   institutions.   Short-term  investments
principally consist of triple A or double A rated instruments.

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


<PAGE>

2.       MARKETABLE SECURITIES AND INVESTMENTS

     The amortized  cost and estimated  fair value of marketable  securities and
investments consisted of the following:

<TABLE>
<CAPTION>
                                                                 July 28, 2001                    July 29, 2000
                                                                 -------------                    -------------
(In 000's)                                              Estimated                          Estimated
                                                       Fair Value            Cost         Fair Value           Cost
                                                       ----------          --------       ----------         --------
<S>                                                    <C>               <C>               <C>              <C>
Money Market Funds                                        $33,189           $33,189           $5,553           $5,553
Short Term Investments                                     60,985            60,985           44,975           44,975
Tax Free Municipal Bonds                                   81,592            81,366          101,896          102,429
US Govt. Securities Fund                                    1,708             1,878            1,626            1,878
                                                       ----------          --------       ----------         --------
                                                         $177,474          $177,418         $154,050         $154,835
                                                       ==========          ========       ==========         ========

</TABLE>

     The scheduled  maturities of marketable  securities and investments at July
28, 2001 are:

<TABLE>
<CAPTION>
                                                                                           Estimated
Due In                     (in 000's)                                                     Fair Value                  Cost
------                                                                                   -----------                --------
<S>                                                                                      <C>                     <C>
One year or less                                                                            $122,409                $122,510
One year through five years                                                                   45,398                  45,257
Six years through ten years                                                                    1,112                   1,111
Over ten years                                                                                 8,555                   8,540
                                                                                           ---------                --------
                                                                                            $177,474                $177,418
                                                                                           =========                ========
</TABLE>

     Unrealized  holding  gains  and  losses  at  July  29,  2001  netted  to an
unrealized  gain of  approximately  $60,000.  Proceeds and gross  realized gains
(losses) from the sale of  securities in fiscal 2001,  2000 and 1999 were $119.7
million and $0.3 million, $22.1 million and ($0.1) million and $84.1 million and
$1.2 million, respectively. For the purposes of determining gross realized gains
and losses, the cost of securities is based upon specific identification.


3.       EMPLOYEE BENEFIT PLANS

     The Company has established a defined contribution  retirement savings plan
(401(k))  covering  all eligible  employees.  This plan  succeeded  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 2001,  2000, and 1999
the  Company  incurred  expenses  of  $1,619,000,   $1,980,000  and  $1,493,000,
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.


<PAGE>

4.       INCOME TAXES

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

<TABLE>
<CAPTION>
                                                                          Fiscal Year Ended
(In 000's)                                                     July 28,          July 29,         July 31,
                                                                   2001              2000             1999
                                                             ----------        ----------        ---------
<S>                                                          <C>               <C>              <C>
Federal:
         Current                                                $16,210           $18,420          $21,800
         Deferred                                                  (749)           (2,128)          (6,652)
                                                             ----------        ----------        ---------
                                                                 15,461            16,292           15,148
                                                             ----------        ----------        ---------
State:
         Current                                                  5,562             5,734            5,502
         Deferred                                                  (720)             (906)          (1,495)
                                                             ----------        ----------        ---------
                                                                  4,842             4,828            4,007
                                                             ----------        ----------        ---------

Provision for income taxes                                      $20,303           $21,120          $19,155
                                                             ==========        ==========        =========

</TABLE>

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

<TABLE>
<CAPTION>
                                                                                 July 28,         July 29,         July 31,
(in 000's)                                                                           2001             2000             1999
                                                                                ---------        ---------        ---------
<S>                                                                              <C>              <C>              <C>
Deferred tax assets:
   Inventory capitalization for tax purposes                                       $2,822           $3,130           $5,695
   Capital loss carryover                                                           2,622            2,775            2,574
   Employee benefits                                                                1,494            1,973            1,564
   Other items                                                                      8,382            8,808            7,510
                                                                                ---------        ---------        ---------
     Total deferred tax assets                                                     15,320           16,686           17,343
                                                                                ---------        ---------        ---------
Deferred tax liabilities:
   Depreciation                                                                     4,630            3,961            4,125
   Other items                                                                      3,412            2,861            3,352
                                                                                ---------        ---------        ---------
     Total deferred tax liabilities                                                 8,042            6,822            7,477
                                                                                ---------        ---------        ---------

Net deferred tax assets                                                            $7,278           $9,864           $9,866
                                                                                =========        =========        =========

</TABLE>

     The net deferred tax assets were comprised of  approximately  $1,488,000 in
state deferred taxes and $5,790,000 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:

<TABLE>
<CAPTION>
                                                                           Fiscal Year Ended
                                                               July 28,          July 29,         July 31,
                                                                   2001              2000             1999
                                                             ----------        ----------        ---------
<S>                                                          <C>               <C>              <C>
Statutory tax rate                                               35.0 %            35.0 %           35.0 %
State taxes - net of federal
  Benefit                                                         5.5 %             5.4 %            5.0 %
Other - net, primarily tax-free interest                         (4.0)%            (3.9)%           (3.5)%
                                                             ----------        ----------        ---------

Effective tax rate                                               36.5 %            36.5 %           36.5 %
                                                             ==========        ==========        =========

</TABLE>
<PAGE>


5.       COMMITMENTS

Lease commitments

     The Company leases all of its stores and its distribution  center.  Certain
leases provide for additional  rents based on percentages of net sales,  charges
for real  estate  taxes,  insurance  and other  occupancy  costs.  Store  leases
generally  have an  initial  term  ranging  from 5 to 15 years  with one or more
5-year  options to extend the lease.  Some of these leases have  provisions  for
rent escalations  during the initial term. The Company leases its 510,000 square
foot  office and  distribution  center in  Suffern,  New York.  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>
                                                                           Fiscal Year Ended
                                                               July 28,          July 29,         July 31,
(in 000's)                                                         2001              2000             1999
                                                             ----------        ----------        ---------
<S>                                                          <C>               <C>              <C>
Base rentals                                                    $78,920           $74,450          $69,661
Percentage rentals                                                2,192               842               58
Other occupancy costs                                            23,114            21,168           23,862
                                                             ----------        ----------        ---------

Total                                                          $104,226           $96,460          $93,581
                                                             ==========        ==========        =========
</TABLE>

     The following is a schedule of future minimum rentals under  noncancellable
operating leases as of July 28, 2001 (dollars in thousands):

             Fiscal Year                                     Amount
            -------------                                 ----------
                2002                                       $  78,246
                2003                                          65,111
                2004                                          53,124
                2005                                          42,331
                2006                                          31,727
         Subsequent years                                     58,598
                                                          ----------

         Total future minimum rentals                       $329,137
                                                          ==========

     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 two stores from its Chief  Executive  Officer or related
trusts.  Future  minimum  rentals  under leases with such related  parties which
extend beyond July 28, 2001,  included in the above schedule,  are approximately
$237,000  annually and in the aggregate  $0.8  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 2001, 2000 and 1999 under
these  leases  amounted  to  approximately  $346,000,   $426,000  and  $464,000,
respectively.

<PAGE>

Lines of credit

     At July 28,  2001,  the  Company had  unsecured  lines of credit with three
banks totaling $115 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 28,
2001.  However,  approximately  $22  million  of  outstanding  letters of credit
reduced the credit lines available.

Legal proceedings

     The Company is involved in various  routine legal  proceedings  incident to
the ordinary  course of business.  On May 18, 2000,  an action was filed against
the Company seeking  compensatory and punitive damages in an unspecified  amount
for alleged unfair trade practices and alleged breach of contract arising out of
negotiations  for an  acquisition  the  Company  never  concluded.  The  Company
believes  there  is no  merit  in any of the  plaintiffs'  asserted  claims,  is
vigorously  defending  the  litigation,  and, in any event,  does not expect the
outcome of these  proceedings to have a material  adverse effect on the Company.
The  Company  believes  that the outcome of all  pending  and  threatened  legal
proceedings  will,  on the  whole,  not have a  material  adverse  effect on its
financial condition or results of operations.


6.       STOCK-BASED COMPENSATION PLANS

     At July 28, 2001, 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 the date of grant. At July 28,
2001, there were 526,701 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 28, 2001, there were 82,900 shares
under the 1995 plan  available for future grant.  The Company's  Employee  Stock
Purchase Plan allows  employees to purchase shares of the Company's common stock
during each quarterly  offering period at a 10% discount  through weekly payroll
deductions.

<PAGE>

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

<CAPTION>
                                               July 28, 2001                   July 29, 2000                   July 31, 1999
                                               -------------                   -------------                   -------------
                                                          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                                        1,820,643        $12.31        1,439,167         $10.37        1,275,435          $9.83
Granted                                       358,469         20.99          884,743          14.05          319,250          11.64
Cancelled                                     (47,924)        13.83          (61,231)         12.63          (36,432)         11.89
Exercised                                    (548,753)        11.54         (442,036)          9.39         (119,086)          7.56
                                    ------------------------------------------------------------------------------------------------
Outstanding end of year                     1,582,435        $14.51        1,820,643         $12.31        1,439,167         $10.37
                                    ================================================================================================

Options exercisable
at year-end                                   234,522        $11.22          319,496         $11.37          448,523         $10.36
                                    ------------------------------------------------------------------------------------------------

Weighted-average fair
value of options granted
during the year
                                                              $9.84                           $6.31                           $5.09
                                                      --------------                 ---------------                 ---------------
</TABLE>


<TABLE>
         The following table summarizes information about stock options
outstanding at July 28, 2001:


<CAPTION>
                                                                                                               Weighted
                                    Number                             Weighted Average       Number           Average
                              Outstanding as of    Weighted Average     Exercise Price    Exercisable as    Exercise Price
  Range of Exercise Prices         7/28/01          Remaining Life                          of 7/28/01
----------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                <C>                    <C>              <C>                <C>
$5.00                              120,000            5.03 years             $5.00            60,000             $5.00
 8.25  -   9.15                    142,943            5.03 years             $8.70            66,950             $8.74
10.50  -  11.44                    182,792            6.51 years            $11.31            41,132            $11.06
14.06  -  15.63                    705,700            8.05 years            $14.08            18,140            $14.07
19.50  -  22.63                    431,000            8.71 years            $21.15            48,300            $21.44
                              ----------------------------------------------------------------------------------------------

$5.00  - $22.63                   1,582,435           7.55 years            $14.51            234,522           $11.22
                              ==============================================================================================
</TABLE>


     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.

<PAGE>

     Had compensation  cost for the Company's stock option plans been determined
based on the fair value at the option grant dates for awards in accordance  with
the  accounting  provisions  of SFAS No. 123,  the  Company's  net  earnings and
earnings per share for fiscal 2001,  fiscal 2000 and fiscal 1999 would have been
reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                                              Fiscal Year Ended
                                                                                 July 28,         July 29,         July 31,
                                                                                     2001             2000             1999
                                                                                ---------        ---------        ---------
<S>                                                                             <C>              <C>              <C>
Net earnings (in 000's):
         As reported                                                              $35,321          $36,742          $33,324
         Pro forma                                                                $33,959          $35,082          $32,372

Earnings per share - basic:
         As reported                                                                $1.94            $1.94            $1.56
         Pro forma                                                                  $1.86            $1.85            $1.52

Earnings per share - diluted:
         As reported                                                                $1.88            $1.89            $1.53
         Pro forma                                                                  $1.81            $1.81            $1.49

</TABLE>

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

<TABLE>
<CAPTION>
                                                                                              Fiscal Year Ended
                                                                                 July 28,         July 29,         July 31,
                                                                                     2001             2000             1999
                                                                                ---------        ---------        ---------

<S>                                                                             <C>              <C>              <C>
Weighted average risk-free interest rate                                             5.4%             5.9%             5.8%
Weighted average expected life (years)                                               5.0              5.0              5.0
Expected volatility                                                                 44.8%            41.0%            40.9%
</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 No.  123 does not apply to  awards  prior to fiscal  1996,  and  additional
awards in future years are anticipated.


<PAGE>


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

<CAPTION>
                                                        Fourth             Third           Second             First
                                                       Quarter           Quarter          Quarter           Quarter
                                                     ---------         ---------        ---------         ---------
<S>                                                 <C>               <C>              <C>               <C>
Fiscal Year ended July 28, 2001
Net Sales                                             $177,335          $165,111         $164,234          $188,328
Gross Profit,
  less occupancy
  and buying costs                                      64,409            60,087           59,777            67,309
Income Taxes                                             4,724             3,556            4,674             7,349
Net Earnings                                             8,250             6,155            8,130            12,786
Earnings Per Share
       Basic                                             $0.45             $0.34            $0.44             $0.71
       Diluted                                           $0.44             $0.33            $0.43             $0.68

</TABLE>

<TABLE>
<CAPTION>
                                                        Fourth             Third           Second             First
                                                       Quarter           Quarter          Quarter           Quarter
                                                     ---------         ---------        ---------         ---------
<S>                                                 <C>               <C>              <C>               <C>
Fiscal Year ended July 29, 2000
Net Sales                                             $175,696          $162,992         $149,548          $167,938
Gross Profit,
  less occupancy
  and buying costs                                      67,351            58,114           52,296            58,934
Income Taxes                                             7,217             4,827            3,561             5,515
Net Earnings                                            12,555             8,398            6,193             9,596
Earnings Per Share(*)
       Basic                                             $0.70             $0.45            $0.32             $0.48
       Diluted                                           $0.68             $0.44            $0.31             $0.47


<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.
</FN>
</TABLE>