<PAGE>

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

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

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

                                   FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934. FOR THE QUARTERLY PERIOD ENDED MARCH 30, 2002.

                                      or

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934. FOR THE TRANSITION PERIOD FROM ____________ TO
    ____________ .


                        Commission File Number 0-16611

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

                              GLOBAL SPORTS, INC.
            (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                      <C>
                Delaware                               04-2958132
---------------------------------------- ---------------------------------------
    (State or other jurisdiction of      (I.R.S. Employer Identification Number)
     incorporation or organization)

 1075 First Avenue, King of Prussia, PA                   19406
---------------------------------------- ---------------------------------------
(Address of principal executive offices)               (Zip Code)
</TABLE>

                                 610-265-3229
                              -------------------
                        (Registrant's telephone number,
                             including area code)

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

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

   Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 7, 2002:

<TABLE>
                <S>                          <C>
                Common Stock, $.01 par value  38,577,190/(1)/
                ---------------------------- ------------------
                   (Title of each class)     (Number of Shares)
</TABLE>
--------
/(1)/ Excludes approximately 62,000 shares of the registrant's Common Stock
      which are issuable to former shareholders of Ashford.com, Inc. in
      connection with the registrant's acquisition of Ashford.com, but which,
      as of May 7, 2002, had not yet been issued.

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

<PAGE>

                                   FORM 10-Q
                     FOR THE QUARTER ENDED MARCH 30, 2002

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                     Page
                                                                                                     ----
<S>                                                                                                  <C>
PART I--FINANCIAL INFORMATION

Item 1.  Financial Statements:
   Condensed Consolidated Balance Sheets as of December 29, 2001 and March 30, 2002 (Unaudited).....   3
   Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2001
     and March 30, 2002 (Unaudited).................................................................   4
   Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31,
     2001 and March 30, 2002 (Unaudited)............................................................   5
   Notes to Unaudited Condensed Consolidated Financial Statements...................................   6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations......  16
Item 3.  Quantitative and Qualitative Disclosures About Market Risk.................................  33

PART II--OTHER INFORMATION

Item 1.  Legal Proceedings..........................................................................  34
Item 2.  Changes in Securities and Use of Proceeds..................................................  34
Item 3.  Defaults Upon Senior Securities............................................................  34
Item 4.  Submission of Matters to a Vote of Security Holders........................................  34
Item 5.  Other Information..........................................................................  34
Item 6.  Exhibits and Reports on Form 8-K...........................................................  34

SIGNATURES..........................................................................................  35
</TABLE>

   For all years prior to 1999, our fiscal year ended on December 31. Effective
for 1999, we changed our fiscal year from the last day of December to the
Saturday nearest the last day of December. Accordingly, references to fiscal
1999, fiscal 2000, fiscal 2001 and fiscal 2002 refer to the years ended January
1, 2000, December 30, 2000, December 29, 2001 and the year ending December 28,
2002.

   Although we refer to the retailers, manufacturers, media companies and
professional sports organizations for which we develop and operate e-commerce
businesses as our "partners," we do not act as an agent or legal representative
for any of our partners. We do not have the power or authority to legally bind
any of our partners. Similarly, our partners do not have the power or authority
to legally bind us. In addition, we do not have the types of liabilities for
our partners that a general partner of a partnership would have.

   We intend to change our name from Global Sports, Inc. to GSI Commerce, Inc.
in May 2002, subject to stockholder approval at our 2002 Annual Meeting of
Stockholders. In connection with our name change, we also intend to change our
Nasdaq symbol from "GSPT" to "GSIC".

                                      2

<PAGE>

                         PART I--FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands, except share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                              December 29, March 30,
                                                                                  2001       2002
                                                                              ------------ ---------
<S>                                                                           <C>          <C>
                                   ASSETS
Current assets:
   Cash and cash equivalents.................................................  $ 105,896   $  80,048
   Short-term investments....................................................        842       2,255
   Marketable securities.....................................................         --         565
   Accounts receivable, net of allowance of $239 and $657, respectively......      6,973       5,963
   Inventory.................................................................     17,779      28,837
   Prepaid expenses and other current assets.................................      1,502       3,086
                                                                               ---------   ---------
       Total current assets..................................................    132,992     120,754
Property and equipment, net..................................................     28,929      29,802
Goodwill, net................................................................     13,453      22,268
Other assets, net of accumulated amortization of $377 and $544, respectively.     15,391      15,159
                                                                               ---------   ---------
       Total assets..........................................................  $ 190,765   $ 187,983
                                                                               =========   =========
                    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable..........................................................  $  22,356   $  11,935
   Accrued expenses and other................................................      8,196      10,497
   Deferred revenue..........................................................      8,193      10,824
   Current portion - note payable............................................         39          39
   Current portion - capital lease obligations...............................        506         414
                                                                               ---------   ---------
       Total current liabilities.............................................     39,290      33,709
Note payable.................................................................      5,208       5,197
Commitments and contingencies
Stockholders' equity:
   Preferred stock, $0.01 par value, 5,000,000 shares authorized; 400 shares
     issued as mandatorily redeemable preferred stock and outstanding as of
     December 29, 2001 and March 30, 2002, respectively......................         --          --
   Common stock, $0.01 par value, 90,000,000 shares authorized; 37,673,808
     and 38,532,105 shares issued as of December 29, 2001 and March 30,
     2002, respectively; 37,672,598 and 38,530,895 shares outstanding as of
     December 29, 2001 and March 30, 2002, respectively......................        377         385
   Additional paid in capital................................................    277,628     285,737
   Accumulated other comprehensive loss......................................         --          (2)
   Accumulated deficit.......................................................   (131,738)   (137,043)
                                                                               ---------   ---------
                                                                                 146,267     149,077
   Less: Treasury stock, at par..............................................         --          --
                                                                               ---------   ---------
       Total stockholders' equity............................................    146,267     149,077
                                                                               ---------   ---------
       Total liabilities and stockholders' equity............................  $ 190,765   $ 187,983
                                                                               =========   =========
</TABLE>

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

                                      3

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                    Three Months Ended
                                                                                    ------------------
                                                                                    March 31, March 30,
                                                                                      2001      2002
                                                                                    --------- ---------
<S>                                                                                 <C>       <C>
Net revenues.......................................................................  $16,215   $31,925
Cost of revenues...................................................................   11,149    20,355
                                                                                     -------   -------
       Gross profit................................................................    5,066    11,570
                                                                                     -------   -------
Operating expenses:
   Sales and marketing, exclusive of $63 and $252 reported below as stock-based
     compensation, respectively....................................................    7,441     9,192
   Product development, exclusive of $0 and $74 reported below as stock-based
     compensation, respectively....................................................    2,370     2,336
   General and administrative, exclusive of $390 and $206 reported below as stock-
     based compensation, respectively..............................................    2,540     3,302
   Stock-based compensation........................................................      453       532
   Depreciation and amortization...................................................    1,627     1,835
                                                                                     -------   -------
       Total operating expenses....................................................   14,431    17,197
                                                                                     -------   -------
Other (income) expense:
   Interest expense................................................................      147       132
   Interest income.................................................................   (1,116)     (454)
                                                                                     -------   -------
       Total other (income) expense................................................     (969)     (322)
                                                                                     -------   -------
Net loss...........................................................................  $(8,396)  $(5,305)
                                                                                     =======   =======
Losses per share--basic and diluted:
   Net loss........................................................................  $ (0.26)  $ (0.14)
                                                                                     =======   =======
Weighted average shares outstanding--basic and diluted.............................   31,926    38,050
                                                                                     =======   =======
</TABLE>



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

                                      4

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                Three Months Ended
                                                                                ------------------
                                                                                March 31, March 30,
                                                                                  2001      2002
                                                                                --------- ---------
<S>                                                                             <C>       <C>
Cash Flows from Operating Activities:
   Net loss.................................................................... $ (8,396) $ (5,305)
   Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization...........................................    1,627     1,835
       Stock-based compensation................................................      453       532
   Changes in operating assets and liabilities:
       Accounts receivable, net................................................    1,870     3,178
       Inventory...............................................................    1,754       896
       Prepaid expenses and other current assets...............................     (349)   (1,034)
       Accounts payable and accrued expenses and other.........................  (17,982)  (16,234)
       Deferred revenue........................................................     (147)    2,318
                                                                                --------  --------
       Net cash used in operating activities...................................  (21,170)  (13,814)
                                                                                --------  --------
Cash Flows from Investing Activities:
   Acquisition of property and equipment, net..................................   (1,162)   (1,017)
   Reductions to goodwill and other assets, net................................      253       787
   Net cash paid for acquisition of Ashford....................................       --    (8,775)
   Purchases of marketable securities..........................................       --      (567)
   (Purchases) sales of short-term investments.................................      983       (13)
                                                                                --------  --------
       Net cash provided by (used in) investing activities.....................       74    (9,585)
                                                                                --------  --------
Cash Flows from Financing Activities:
   Repayments of capital lease obligations.....................................      (25)      (93)
   Payment on revolving credit facility........................................       --    (3,123)
   Repayments of mortgage note.................................................      (10)      (11)
   Proceeds from exercises of common stock options and warrants................        3       778
                                                                                --------  --------
       Net cash used in financing activities...................................      (32)   (2,449)
                                                                                --------  --------
Net decrease in cash and cash equivalents......................................  (21,128)  (25,848)
Cash and cash equivalents, beginning of period.................................   92,012   105,896
                                                                                --------  --------
Cash and cash equivalents, end of period....................................... $ 70,884  $ 80,048
                                                                                ========  ========
</TABLE>



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

                                      5

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--BASIS OF PRESENTATION

   Global Sports, Inc. ("Global" or the "Company"), a Delaware corporation,
develops and operates e-commerce businesses including on-line retail stores and
direct response television campaigns for retailers, manufacturers, media
companies and professional sports organizations. The Company currently derives
virtually all of its revenues from sales of goods through its partners' online
stores and direct response television campaigns, toll-free telephone number
sales, business-to-business and group sales and related outbound shipping
charges, net of allowances for returns and discounts, as well as from fixed and
variable fees earned in connection with the development and operation of its
partners' e-commerce businesses and the provision of marketing services. Each
of the Company's partners owns the URL address of its Web site. Based upon the
terms of the agreements with its partners, the Company owns certain components
of the Web sites and the partners own other components.

   The accompanying condensed consolidated financial statements of Global have
been prepared in accordance with accounting principles generally accepted in
the United States of America for interim financial information and in
accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all information and footnotes required by
accounting principles generally accepted in the United States of America for
complete financial statements.

   The accompanying financial information is unaudited; however, in the opinion
of the Company's management, all adjustments (consisting solely of normal
recurring adjustments and accruals) necessary to present fairly the financial
position, results of operations and cash flows for the periods reported have
been included. The results of operations for the periods reported are not
necessarily indicative of those that may be expected for a full year.

   This quarterly report should be read in conjunction with the financial
statements and notes thereto included in the Company's audited financial
statements presented in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission on April 4, 2002.

   Certain reclassifications have been made to the prior year condensed
consolidated financial statements to conform to those used in the current
period.

NOTE 2--ACCOUNTING POLICIES

   Marketable securities:  Marketable securities are classified as
available-for-sale and are reported at fair value, with unrealized gains and
losses recorded in stockholders' equity. Realized gains or losses and declines
in value judged to be other than temporary, if any, on available-for-sale
securities are reported in other income or loss. As of March 31, 2001 and March
30, 2002, the Company recorded unrealized losses on its marketable securities
of $0 and $2,000, respectively.

   Change in Useful Life of Property and Equipment:  During the three-month
period ended March 31, 2001, the Company increased its estimate of the useful
lives of its computer hardware and software from two years to four years. This
change had the effect of decreasing the net loss for the three-month periods
ended March 31, 2001 and March 30, 2002 by $1.4 million, or $0.04 per share and
by $538,000, or $0.01 per share, respectively. The increase in estimated useful
lives was based on the Company's then-current analysis of its historical
operating experience, which indicated that the original estimate was no longer
appropriate.

   Change in Accounting for Goodwill:  The Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 141, "Business Combinations" as of
July 1, 2001. The Company accounted for its acquisition of

                                      6

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Ashford.com, Inc. ("Ashford") under SFAS No. 141 (see Note 3).

   Effective December 30, 2001, the Company adopted the provisions of SFAS No.
142, "Goodwill and Other Intangible Assets." SFAS No. 142 changes the
accounting for goodwill from an amortization method to an impairment-only
approach. Under an impairment-only approach, goodwill and certain intangibles
are not amortized into results of operations, but instead reviewed for
impairment and written down and charged to results of operations only in the
periods in which the recorded value of goodwill and certain intangibles is more
than its fair value. SFAS No. 142 requires the Company to complete a two-step
impairment test of goodwill. The first step determines if an impairment exists,
and is required to be completed by June 29, 2002. The second step (if
necessary) measures the impairment, and is required to be completed by December
28, 2002. The Company is in the process of completing the first step of the
impairment test. Any impairment loss resulting from the transition impairment
test will be recorded as a cumulative effect of a change in accounting
principle. In addition, upon adoption of SFAS No. 142, the Company evaluated
its goodwill and intangibles acquired prior to June 30, 2001 using the criteria
in SFAS No. 141, and determined that no change in previously recognized
goodwill was required.

   The following is a reconciliation of reported net loss to net loss adjusted
to reflect the impact of the discontinuance of the amortization of goodwill for
the three-month periods ended March 31, 2001 and March 30, 2002:

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                          ------------------
                                                          March 31, March 30,
                                                            2001      2002
                                                          --------- ---------
                                                            (in thousands)
   <S>                                                    <C>       <C>
   Net loss:
      Reported net loss..................................  $(8,396)  $(5,305)
      Goodwill amortization..............................      173        --
                                                           -------   -------
          Adjusted net loss..............................  $(8,223)  $(5,305)
                                                           =======   =======
   Loss per share--basic and diluted:
      Reported net loss per share........................  $ (0.26)  $ (0.14)
      Goodwill amortization..............................     0.01        --
                                                           -------   -------
          Adjusted loss per share--basic and diluted.....  $ (0.25)  $ (0.14)
                                                           =======   =======
</TABLE>

   Other Assets, Net:  Other assets, net consists primarily of deferred partner
revenue share charges, resulting from the exercise of a right to receive
1,600,000 shares of the Company's common stock in lieu of future cash partner
revenue share payments. The 1,600,000 shares of Global Sports common stock
issued are subject to restrictions which prohibit the transfer of such shares.
These restrictions lapse as to 10% of such shares on December 31, 2002 and as
to an additional 10% of such shares on the last day of each quarter thereafter,
becoming free of all such transfer restrictions on March 31, 2005. Deferred
partner revenue share charges were $14.1 million and $13.9 million as of
December 29, 2001 and March 30, 2002, respectively, and are being amortized as
stock-based compensation expense as the partner revenue share expense is
incurred. The partner revenue share expense incurred is based on actual
revenues recognized in a given period and the imputed partner revenue share
percentage, which is based on the value of the Company's common stock that was
issued upon exercise of the right. Stock-based compensation expense related to
the amortization of deferred partner revenue share charges was $0 and $158,000
for the three-month periods ended March 31, 2001 and March 30, 2002,
respectively.

                                      7

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Shipping and Handling Costs:  The Company defines shipping and handling
costs as only those costs incurred for a third-party shipper to transport
products to the customer and these costs are included in cost of revenues. In
some instances, shipping and handling costs exceed shipping charges to the
customer and are subsidized by the Company. Additionally, the Company
selectively offers promotional free shipping whereby it ships merchandise to
customers free of all shipping and handling charges. The cost of promotional
free shipping and subsidized shipping and handling was $558,000 and $141,000
for the three-month periods ended March 31, 2001, and March 30, 2002,
respectively, and was charged to sales and marketing expense.

   Fulfillment Costs:  The Company defines fulfillment costs as personnel,
occupancy and other costs associated with its Kentucky and Texas fulfillment
centers, personnel and other costs associated with its logistical support and
vendor operations departments and third-party warehouse and fulfillment
services costs. Fulfillment costs were $2.8 million and $2.4 million for the
three-month periods ended March 31, 2001 and March 30, 2002, respectively, and
are included in sales and marketing expense.

  New Accounting Pronouncements

   Impairment or Disposal of Long-Lived Assets:  In October 2001, the FASB
issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." This statement supercedes SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and the
accounting and reporting provisions of Accounting Principals Board ("APB")
Opinion No. 30, "Reporting the Results of Operations--Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual, and
Infrequently Occurring Events and Transactions," for the disposal of a segment
of a business. SFAS No. 144 retains the requirement in APB No. 30 to report
separately discontinued operations and extends that reporting to a component of
an entity that either has been disposed of or is classified as held for sale.
This statement is effective for fiscal years beginning after December 15, 2001
and interim periods within those fiscal years. The Company adopted this
statement in the first quarter of fiscal 2002, and it did not have a
significant impact on the Company's financial position or results of operations.

   Consideration Given by a Vendor to a Customer or Reseller:  In November
2001, the Emerging Issues Task Force ("EITF") reached a consensus on EITF No.
01-09, "Accounting for Consideration Given by a Vendor to a Customer or a
Reseller of the Vendor's Products." EITF No. 01-09 addresses the accounting for
consideration given by a vendor to a customer or reseller and is a codification
of EITF No. 00-14, "Accounting for Certain Sales Incentives," EITF No. 00-22,
"Accounting for 'Points' and Certain Other Time-Based or Volume-Based Sales
Incentive Offers, and Offers for Free Products or Services to be Delivered in
the Future" and EITF No. 00-25, "Vendor Income Statement Characterization of
Consideration Paid to a Reseller of the Vendor's Products." The Company adopted
this statement in the first quarter of fiscal 2002, and it did not have a
significant impact on the Company's financial position or results of operations.

NOTE 3--ACQUISITION

   On March 14, 2002, the Company completed its acquisition of all of the
outstanding common stock of Ashford pursuant to a definitive merger agreement
executed on September 13, 2001. The Company's primary reason for the
acquisition was to extend its outsource business model into the jewelry, luxury
goods and corporate gifts categories. The primary factors that contributed to
recognition of goodwill were the reduction of the book value of Ashford's net
assets from the measurement date to the date the merger was completed, the
adjustment of Ashford's inventory and certain liabilities to fair value.

                                      8

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   As consideration for the purchase, the Company issued to the stockholders of
Ashford $7.2 million and approximately 435,000 shares of the Company's common
stock valued at $7.0 million based on a value of $16.00 per share, which is the
average closing price of the Company's common stock for the period from
September 6 to 18, 2001.

   The acquisition has been accounted for under SFAS No. 141 as a purchase and
the acquisition costs of $15.7 million have been allocated to the assets
acquired and the liabilities assumed based upon estimates of their respective
fair values. A total of $8.8 million, representing the excess of the purchase
price over fair value of the net tangible assets acquired, has been allocated
to goodwill.

   The Company is in the process of obtaining third-party valuations and
additional information for certain of these assets and liabilities. The
allocation of the purchase price for the acquisition is subject to refinement
pending receipt of the valuations and additional information.

   The Company's consolidated results of operations incorporates Ashford's
results of operations commencing upon the March 14, 2002 acquisition date.

   The unaudited pro forma combined information below presents the combined
results of operations of the Company as if the acquisition had occurred at the
beginning of the respective periods presented. The unaudited pro forma combined
information, based upon the historical consolidated financial statements of the
Company and Ashford, is based on an acquisition cost of $15.7 million and
assumes that an estimated $8.8 million of acquisition cost over the book value
of Ashford's net tangible assets is allocated to goodwill.

<TABLE>
<CAPTION>
                                           Three Months Ended
                                      ----------------------------
                                      March 31, 2001 March 30, 2002
                                      -------------- --------------
                                        (in thousands, except per
                                             share amounts)
             <S>                      <C>            <C>
             Revenues................    $ 30,543       $ 38,462
             Net loss................    $(25,360)      $(10,904)
             Net loss per share /(1)/    $  (0.78)      $  (0.28)
</TABLE>
--------
/(1)/ Net loss per share is calculated using the weighted average number of
      common shares outstanding, including the issuance of approximately
      435,000 shares to stockholders of Ashford as if such event had occurred
      on December 31, 2000.

   The unaudited pro forma combined information is not necessarily indicative
of the results of operations of the combined company had the acquisition
occurred at the beginning of the periods presented, nor is it necessarily
indicative of future results.

NOTE 4--MARKETABLE SECURITIES

   Marketable securities, at estimated fair value, consist of the following as
of March 30, 2002:

<TABLE>
<CAPTION>
                                       Gross      Gross
                           Amortized Unrealized Unrealized Estimated
                             Cost      Gains      Losses   Fair Value
                           --------- ---------- ---------- ----------
                                         (in thousands)
           <S>             <C>       <C>        <C>        <C>
           Corporate bonds   $567       $--        $(2)       $565
                             ====       ===        ===        ====
</TABLE>

                                      9

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

NOTE 5--CHANGES IN STOCKHOLDERS' EQUITY

   The following table summarizes the changes in stockholders' equity for the
three-month periods ended March 31, 2001 and March 30, 2002:

<TABLE>
<CAPTION>
                                                                                             Accumulated
                                         Common Stock  Additional                               Other     Treasury Stock
                                        --------------  Paid in   Accumulated Comprehensive Comprehensive --------------
                                        Shares Dollars  Capital     Deficit       Loss          Loss      Shares Dollars
                                        ------ ------- ---------- ----------- ------------- ------------- ------ -------
                                                                              (in thousands)
<S>                                     <C>    <C>     <C>        <C>         <C>           <C>           <C>    <C>
Consolidated balance at
 December 30, 2000..................... 31,925  $319    $217,124   $(101,143)                    $--        --     $--
Net loss...............................                               (8,396)    $(8,396)
Unrealized losses on available-for-sale
 securities............................                                               --          --
                                                                                 -------
Comprehensive loss.....................                                          $(8,396)
                                                                                 =======
Issuance of options and warrants to
 purchase common stock in exchange
 for services..........................                      457
Issuance of common stock upon
 exercise of options and warrants......      2    --           3
                                        ------  ----    --------   ---------                     ---        --     ---
Consolidated balance at
 March 31, 2001........................ 31,927  $319    $217,584   $(109,539)                    $--        --     $--
                                        ======  ====    ========   =========                     ===        ==     ===
Consolidated balance at
 December 29, 2001..................... 37,674  $377    $277,628   $(131,738)                    $--         1     $--
Net loss...............................                               (5,305)    $(5,305)
Unrealized losses on available-for-sale
 securities............................                                               (2)         (2)
                                                                                 -------
Comprehensive loss.....................                                          $(5,307)
                                                                                 =======
Issuance of common stock in acquisition
 of Ashford.com, Inc...................    435     4       6,957
Issuance of options and warrants to
 purchase common stock in exchange
 for services..........................                      377
Issuance of common stock upon
 exercise of options and warrants......    423     4         775
                                        ------  ----    --------   ---------                     ---        --     ---
Consolidated balance at
 March 30, 2002........................ 38,532  $385    $285,737   $(137,043)                    $(2)        1     $--
                                        ======  ====    ========   =========                     ===        ==     ===
</TABLE>
<TABLE>
<CAPTION>



                                         Total
                                        --------

<S>                                     <C>
Consolidated balance at
 December 30, 2000..................... $116,300
Net loss...............................   (8,396)
Unrealized losses on available-for-sale
 securities............................       --

Comprehensive loss.....................

Issuance of options and warrants to
 purchase common stock in exchange
 for services..........................      457
Issuance of common stock upon
 exercise of options and warrants......        3
                                        --------
Consolidated balance at
 March 31, 2001........................ $108,364
                                        ========
Consolidated balance at
 December 29, 2001..................... $146,267
Net loss...............................   (5,305)
Unrealized losses on available-for-sale
 securities............................       (2)

Comprehensive loss.....................

Issuance of common stock in acquisition
 of Ashford.com, Inc...................    6,961
Issuance of options and warrants to
 purchase common stock in exchange
 for services..........................      377
Issuance of common stock upon
 exercise of options and warrants......      779
                                        --------
Consolidated balance at
 March 30, 2002........................ $149,077
                                        ========
</TABLE>

NOTE 6--STOCK OPTIONS AND WARRANTS

   The Company maintains incentive and non-incentive stock option plans for
certain employees, directors and other persons (the "Plans"). Under the terms
of the Plans, the Company may grant incentive and non-incentive options and
restricted stock awards to purchase up to 7,762,571 shares of common stock to
employees, directors and others. The options vest at various times over periods
ranging up to five years. The options, if not exercised, expire up to ten years
after the date of grant. Stock appreciation rights ("SARs") may be granted
under the Plans either alone or in tandem with stock options. Generally,
recipients of SARs are entitled to receive, upon exercise, cash or shares of
common stock (valued at the then fair market value of the Company's common
stock) equal to such fair market value on the date of exercise minus such fair
market value on the date of grant of the shares subject to the SAR, although
certain other measurements also may be used. A SAR granted in tandem with a
stock option is exercisable only if and to the extent that the option is
exercised. No SARs have been granted to date under the Plans.

                                      10

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The following table summarizes the stock option activity for the three-month
periods ended March 31, 2001 and March 30, 2002:

<TABLE>
<CAPTION>
                                               Three Months Ended
                                 -----------------------------------------------
                                     March 31, 2001          March 30, 2002
                                 ----------------------- -----------------------
                                                Weighted                Weighted
                                                Average                 Average
                                   Number of    Exercise   Number of    Exercise
                                     Shares      Price       Shares      Price
                                 -------------- -------- -------------- --------
                                 (in thousands)          (in thousands)
<S>                              <C>            <C>      <C>            <C>
Outstanding, beginning of period     4,552       $ 9.29      5,527       $ 8.02
   Granted......................     1,723         5.60        322        17.43
   Exercised....................        (2)        1.16       (143)        5.43
   Cancelled....................      (228)       21.88        (44)       10.59
                                     -----                   -----
Outstanding, end of period......     6,045         7.45      5,662         8.59
                                     =====                   =====
Exercisable, end of period......     1,873         8.44      2,303         8.74
                                     =====                   =====
</TABLE>

   The following table summarizes the warrant activity for the three-month
periods ended March 31, 2001 and March 30, 2002:

<TABLE>
<CAPTION>
                                               Three Months Ended
                                 -----------------------------------------------
                                     March 31, 2001          March 30, 2002
                                 ----------------------- -----------------------
                                                Weighted                Weighted
                                                Average                 Average
                                   Number of    Exercise   Number of    Exercise
                                     Shares      Price       Shares      Price
                                 -------------- -------- -------------- --------
                                 (in thousands)          (in thousands)
<S>                              <C>            <C>      <C>            <C>
Outstanding, beginning of period     7,251       $9.50       7,817       $ 9.27
   Granted......................        --          --          --           --
   Exercised....................        --          --        (280)       10.62
   Cancelled....................        --          --        (354)       10.62
                                     -----                   -----
Outstanding, end of period......     7,251        9.50       7,183         9.15
                                     =====                   =====
Exercisable, end of period......     7,250        9.50       6,933         9.39
                                     =====                   =====
</TABLE>

   During the three-month period ended March 30, 2002, the Company granted to
employees options to purchase an aggregate of 322,220 shares of the Company's
common stock at prices ranging from $14.00 to $19.94 per share. The weighted
average fair value and the weighted average exercise price of the options
granted with exercise prices at the then-current market prices of the
underlying stock during the three-month period ended March 30, 2002 was $11.99
and $17.43 per share, respectively. For the three-month period ended March 30,
2002, the Company recorded $321,000 of stock-based compensation expense
relating to options and restricted stock.

   During the three-month period ended March 30, 2002, warrants to purchase an
aggregate of 634,557 shares of the Company's common stock were net-exercised.
There were no cash proceeds as a result of the net exercises and the Company
issued a net of 279,724 shares of its common stock. The Company recognized
$53,000 of stock-based compensation expense for the three-month period ended
March 30, 2002 relating to these net exercises.

   During the three-month period ended March 31, 2001, the Company granted to
employees options and restricted stock awards to purchase an aggregate of
1,627,375 shares of the Company's common stock at prices ranging from $0.01 to
$5.56 per share and granted to consultants options to purchase an aggregate of
95,500

                                      11

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

shares of the Company's common stock at prices ranging from $5.69 to $6.94 per
share. The weighted average fair value and the weighted average exercise price
of the options granted with exercise prices at the then-current market prices
of the underlying stock during the three-month period ended March 31, 2001 was
$3.71 and $5.56 per share. The weighted average fair value and the weighted
average exercise price of the options granted with exercise prices below the
then-current market prices of the underlying stock during the three-month
period ended March 31, 2001 was $6.29 and $0.01 per share. The weighted average
fair value and the weighted average exercise price of the options granted with
exercise prices above the then-current market prices of the underlying stock
during the three-month period ended March 31, 2001 was $3.02 and $6.94 per
share. For the three-month period ended March 31, 2001, the Company recorded
$536,000 of stock-based compensation expense relating to options and restricted
stock.

   During the three-month period ended March 31, 2001, the Company modified the
exercise price of 11,500 options. The exercise prices were changed to $6.94 per
share. These options required certain counterparty performance conditions and
were subject to variable accounting since their issuance. The Company
recognized a $5,000 reduction in stock-based compensation expense for the
three-month period ended March 31, 2001, which is included in the amount of
stock-based compensation expense relating to options described above. The
amount of stock-based compensation expense recognized for the three-month
period ended March 30, 2002 and to be recognized in future periods is $0 as the
modified options have expired unexercised.

   The following table summarizes information regarding options and warrants
outstanding and exercisable as of March 30, 2002:

<TABLE>
<CAPTION>
                                      Outstanding                                  Exercisable
                  ---------------------------------------------------- -----------------------------------
                                     Weighted Average
                                        Remaining
Range of Exercise                    Contractual Life Weighted Average                    Weighted Average
     Prices       Number Outstanding     In Years      Exercise Price  Number Exercisable  Exercise Price
----------------- ------------------ ---------------- ---------------- ------------------ ----------------
                    (in thousands)                                       (in thousands)
<S>               <C>                <C>              <C>              <C>                <C>
 $ 0.59--$ 6.00          3,498             7.77            $ 4.59            1,529             $ 4.66
 $ 6.13--$ 8.15          3,044             4.83              7.87            2,356               8.06
 $ 9.00--$10.00          4,493             3.20              9.91            4,360               9.93
 $10.60--$25.00          1,788             6.68             16.05              973              15.37
 $30.56--$74.54             22             3.87             38.01               18              38.17
                        ------                                               -----
 $ 0.59--$74.54         12,845             5.30              8.90            9,236               9.22
                        ======                                               =====
</TABLE>

   As of March 30, 2002, 1,065,504 shares of common stock were available for
future grants under the Plans.

   The Company accounts for incentive stock options granted to employees under
the Plans in accordance with APB Opinion No. 25 and, therefore recognizes
compensation cost using the intrinsic method for those options. If compensation
cost for such awards had been determined consistent with SFAS No. 123, the
Company's pro forma net loss and losses per share for the three-month periods
ended March 31, 2001 and March 30, 2002 would have been as follows:

<TABLE>
<CAPTION>
                                                 As Reported Pro Forma
                                                 ----------- ---------
                                                    (in thousands)
         <S>                                     <C>         <C>
         Three Months Ended March 31, 2001
            Net loss............................   $(8,396)  $(11,165)
                                                   =======   ========
            Losses per share--basic and diluted.   $ (0.26)  $  (0.35)
                                                   =======   ========
         Three Months Ended March 30, 2002
            Net loss............................   $(5,305)  $ (6,960)
                                                   =======   ========
            Losses per share--basic and diluted.   $ (0.14)  $  (0.18)
                                                   =======   ========
</TABLE>

                                      12

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The fair value of options and restricted stock awards granted under the
Plans during the three-month periods ended March 31, 2001 and March 30, 2002
were estimated on the date of grant using the Black-Scholes multiple option
pricing model, with the following weighted average assumptions:

<TABLE>
<CAPTION>
                                              Three Months Ended
                                         ----------------------------
         Assumption                      March 31, 2001 March 30, 2002
         ----------                      -------------- --------------
         <S>                             <C>            <C>
         Dividend yield.................         None           None
         Expected volatility............        99.00%        102.00%
         Average risk free interest rate         3.83%          4.32%
         Average expected lives.........   3.61 years    3.80  years
</TABLE>

NOTE 7--LOSSES PER SHARE

   Losses per share for all periods have been computed in accordance with SFAS
No. 128, "Earnings Per Share." Basic and diluted losses per share are computed
by dividing net loss by the weighted average number of shares of common stock
outstanding during the period. Outstanding common stock options and warrants
have been excluded from the calculation of diluted losses per share because
their effect would be antidilutive.

   The amounts used in calculating losses per share data are as follows:

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                            ----------------------------
                                                            March 31, 2001 March 30, 2002
                                                            -------------- --------------
                                                                   (in thousands)
<S>                                                         <C>            <C>
Net loss...................................................    $(8,396)       $(5,305)
                                                               =======        =======
Weighted average shares outstanding--basic and diluted.....     31,926         38,050
                                                               =======        =======
Outstanding common stock options having no dilutive effect.      6,045          5,662
                                                               =======        =======
Outstanding common stock warrants having no dilutive effect      7,251          7,183
                                                               =======        =======
</TABLE>

NOTE 8--COMPREHENSIVE LOSS

   The following table summarizes the components of comprehensive loss:

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                       ----------------------------
                                                       March 31, 2001 March 30, 2002
                                                       -------------- --------------
                                                              (in thousands)
<S>                                                    <C>            <C>
Net loss..............................................    $(8,396)       $(5,305)
Other comprehensive loss:
   Unrealized losses on available-for-sale securities.         --             (2)
                                                          -------        -------
Other comprehensive loss..............................         --             (2)
                                                          -------        -------
Comprehensive loss....................................    $(8,396)       $(5,307)
                                                          =======        =======
</TABLE>

NOTE 9--SIGNIFICANT TRANSACTIONS/CONCENTRATIONS OF CREDIT RISK

   For the three-month periods ended March 31, 2001 and March 30, 2002, net
revenues included $406,000 and $8.3 million from sales of one of our partner's
products sold primarily through its direct response television campaigns in
addition to Web site and toll-free number sales. As of March 30, 2002, the
Company had $2.2 million included in accounts receivable related to these sales.

                                      13

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Cash equivalents potentially subject the Company to credit risk. As of March
30, 2002, the Company had $9.0 million of operating cash and $71.0 million of
cash equivalents invested with four financial institutions. The composition of
these investments are regularly monitored by management.

NOTE 10--COMMITMENTS AND CONTINGENCIES

  Legal Proceedings

   The Company is involved in various litigation relating to its business,
including litigation relating to Ashford.com. The Company believes that the
disposition of these matters will not have a material adverse effect on the
financial position or results of operations of the Company.

  Employment Agreements

   As of March 30, 2002, the Company had employment agreements with several of
its employees for an aggregate annual base salary $2.4 million plus bonuses and
increases in accordance with the terms of the agreements. Remaining terms of
such contracts range from two to three years.

  Advertising and Media Agreements

   As of March 30, 2002, the Company was contractually committed for the
purchase of future advertising totaling approximately $667,000 through the
fiscal year ending December 28, 2002. The expense related to these commitments
will be recognized in accordance with the Company's accounting policy related
to advertising.

  Partner Revenue Share Payments

   As of March 30, 2002, the Company was contractually committed to minimum
cash revenue share payments of $375,000 per fiscal quarter through July, 2011
and annual minimum cash revenue share payments of $150,000 in February, 2003,
$200,000 in February, 2004 and $250,000 in February, 2005.

NOTE 11--SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                                    Three Months Ended
                                                                               ----------------------------
                                                                               March 31, 2001 March 30, 2002
                                                                               -------------- --------------
                                                                                      (in thousands)
<S>                                                                            <C>            <C>
Cash paid during the period for interest......................................      $147         $    132
Acquisition of Ashford:
   Fair value of assets acquired (including goodwill).........................      $ --         $ 27,291
   Liabilities assumed........................................................        --          (11,555)
   Stock issued...............................................................        --           (6,961)
                                                                                    ----         --------
   Cash paid..................................................................        --            8,775
   Cash acquired..............................................................        --               --
                                                                                    ----         --------
       Net cash paid for acquisition of Ashford...............................      $ --         $  8,775
                                                                                    ====         ========

Noncash Investing and Financing Activities:

Unrealized losses on available-for-sale securities............................      $ --         $     (2)
Issuance of common stock upon exercises of options granted to employees of the
  discontinued operations.....................................................      $ --         $      4
</TABLE>

                                      14

<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Concluded)


NOTE 12--RELATED PARTY TRANSACTIONS

   The Company has entered into a strategic alliance to provide procurement and
fulfillment services for QVC, Inc., who along with Comcast Corporation forms
Interactive Technology Holdings, LLC ("ITH"), which is a principal shareholder
of the Company. The Company recognized net revenues of $270,000 and $203,000 on
sales to this related party for the three-month periods ended March 31, 2001
and March 30, 2002, respectively. The terms of these sales are comparable to
those with other partners of the Company, and the amount included in accounts
receivable as a result of these sales was $183,000 as of March 30, 2002.

NOTE 13--SUBSEQUENT EVENT

   On April 30, 2002, the Company purchased its Kentucky fulfillment center,
which it previously leased, for $8.8 million.

                                      15

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

Forward-Looking Statements

   All statements made in this Quarterly Report on Form 10-Q, other than
statements of historical fact, are forward-looking statements. The words
"anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "will",
"would", "should", "guidance", "potential", "continue", "project", "forecast"
and similar expressions typically are used to identify forward-looking
statements. These forward-looking statements are based on then-current
expectations, beliefs, assumptions, estimates and forecasts about our business
and the industry and markets in which we operate. These statements in this
Quarterly Report on Form 10-Q are not guarantees of future performance and
involve risks, uncertainties and assumptions which are difficult to predict.
Therefore, actual outcomes and results may differ materially from what is
expressed or implied by these forward-looking statements. Factors which may
affect our business, financial condition and operating results include the
effects of changes in the economy, consumer spending, the stock market and the
industries in which we operate, changes affecting the Internet and e-commerce,
including online retailing and direct response marketing, our ability to
maintain relationships with strategic partners and suppliers, our ability to
timely and successfully develop, maintain and protect our technology and
product and service offerings and execute operationally, our ability to attract
and retain qualified personnel and our ability to successfully integrate any
acquisitions we may make, including our recent acquisition of Ashford.com. More
information about potential factors that could affect us are described below.
We expressly disclaim any intent or obligation to update these forward-looking
statements.

Overview

   We develop and operate e-commerce businesses, including online retail stores
and direct response television campaigns, for retailers, manufacturers, media
companies and professional sports organizations. We enable our partners to
capitalize on their existing brands to exploit e-commerce opportunities. We
customize the design of our partners' e-commerce businesses with a broad range
of characteristics that includes differentiated user interfaces on partners'
Web sites, partner-specific content, an extensive electronic catalog of product
descriptions and images, partner specific products for direct response
television campaigns and partner specific customer service and fulfillment. We
currently derive virtually all of our revenues from the sale of goods through
our partners' online stores and direct response television campaigns, toll-free
telephone number sales, business-to-business and group sales and related
outbound shipping charges, net of allowances for returns and discounts, as well
as from fixed and variable fees earned in connection with the development and
operation of partners' e-commerce businesses and the provision of marketing
services.

Financial Presentation

   Our financial statements present:

  .   net revenues, which are derived from sales of goods through our partners'
      online stores and direct response television campaigns, toll-free
      telephone number sales, business-to-business and group sales and related
      outbound shipping charges, net of allowances for returns and discounts,
      as well as from fixed and variable fees earned in connection with the
      development and operation of partners' e-commerce businesses and the
      provision of marketing services. Net revenues include the revenues of
      Ashford.com from March 14, 2002, the date our acquisition of Ashford.com
      was completed.

  .   cost of revenues, which include the cost of products sold and inbound
      freight related to these products, as well as outbound shipping and
      handling costs, other than those related to promotional free shipping and
      subsidized shipping and handling which are included in sales and
      marketing expense.

  .   sales and marketing expenses, which include advertising and promotional
      expenses, including promotional free shipping and subsidized shipping and
      handling costs, online marketing fees, commissions to affiliates,
      fulfillment costs, customer service costs, credit card fees,
      merchandising costs

                                      16

<PAGE>

      and payroll and related expenses. These expenses also include partner
      revenue share charges, which are royalty payments made to our partners in
      exchange for the use of their brands, the promotion of our partners'
      URLs, Web sites and toll-free telephone numbers in their marketing and
      communications materials, the implementation of programs to provide
      incentives to customers to shop through the e-commerce businesses that we
      operate and other programs and services provided to the customers of the
      e-commerce businesses that we operate.

  .   product development expenses, which consist primarily of expenses
      associated with planning, maintaining and operating our partners'
      e-commerce businesses and payroll and related expenses for engineering,
      production, creative and management information systems.

  .   general and administrative expenses, which consist primarily of payroll
      and related expenses associated with executive, finance, human resources,
      legal and administrative personnel, as well as occupancy costs for our
      headquarters and other offices.

  .   stock-based compensation expense, which consists of the amortization of
      deferred compensation expense for options granted to employees and
      certain non-employees, the value of the options or warrants granted to
      certain partners and investors and amortization of deferred partner
      revenue share charges.

  .   depreciation and amortization expenses, which relate primarily to the
      depreciation of our corporate headquarters, the depreciation and
      amortization of the capitalized costs for our technology, hardware and
      software and the depreciation of improvements, furniture and fixtures at
      our corporate headquarters and our fulfillment centers.

  .   other income and expense, which consists primarily of interest income
      earned on cash, cash equivalents, short-term investments and marketable
      securities, interest expense paid primarily in connection with the
      mortgage on our corporate headquarters and interest expense on capital
      leases.

Results of Operations

  Comparison of the three-month periods ended March 30, 2002 and March 31, 2001

   Net Revenues.  Net revenues increased $15.7 million from $16.2 million for
the three-month period ended March 31, 2001, to $31.9 million for the
three-month period ended March 30, 2002. Of this increase, $8.3 million was due
to an increase in sales through direct response television campaigns primarily
from the sale of one of our partner's products, $4.3 million was due to the net
addition of online retail stores that were not operated for the entirety of
both periods, $2.5 million was due to an increase in service fee revenue, and
$949,000 was due to sales from partners' online retail stores that were
operated for the entirety of both periods, offset, in part, by a decrease of
$512,000 in sales from our company owned stores and sites.

   Cost of Revenues.  We incurred cost of revenues of $20.4 million for the
three-month period ended March 30, 2002 and $11.1 million for the three-month
period ended March 31, 2001. As a percentage of net revenues, cost of revenues
from continuing operations was 63.8% for the three-month period ended March 30,
2002 and 68.8% for the three-month period ended March 31, 2001.

   Gross Profit.  We had gross profit of $11.6 million for the three-month
period ended March 30, 2002 and $5.1 million for the three-month period ended
March 31, 2001. As a percentage of net revenues, gross profit from continuing
operations was 36.2% for the three-month period ended March 30, 2002 and 31.2%
for the three-month period ended March 31, 2001. The increase in gross profit
dollars for the three-month period ended March 31, 2002 compared to the
comparable period in fiscal 2001 was due to the increase in net revenues and
the increase in gross profit percentage. The increase in gross profit
percentage was due primarily to a $2.5 million increase in service fee revenue
and, to a lesser extent, volume and price discounts on merchandise purchased by
us.

                                      17

<PAGE>

   Sales and Marketing Expenses.  Sales and marketing expenses increased $1.8
million from $7.4 million for the three-month period ended March 31, 2001 to
$9.2 million the three-month period ended March 30, 2002. This increase was
primarily due to a $1.0 million increase in advertising costs, an $823,000
increase in partner revenue share charges due to increased sales volume
primarily related to one of our direct response television campaign partners, a
$347,000 increase in other sales and marketing-related personnel costs and a
$303,000 increase in personnel costs associated with our merchandising,
customer service and vendor operations departments, offset, in part, by a
$456,000 decrease in personnel, occupancy and other costs associated with our
Kentucky fulfillment center and a $417,000 decrease in subsidized shipping and
handling costs.

   Product Development Expenses.  Product development expenses decreased
$34,000 from $2.4 million for the three-month period ended March 31, 2001 to
$2.3 million for the three-month period ended March 30, 2002. This decrease was
primarily due to a $299,000 decrease in personnel costs, offset, in part, by a
$288,000 increase in equipment and software maintenance costs associated with
the increased number of e-commerce businesses that we operated and maintained.

   General and Administrative Expenses.  General and administrative expenses
increased $762,000 from $2.5 million for the three-month period ended March 31,
2001 to $3.3 million for the three-month period ended March 30, 2002. This
increase was primarily due to a $719,000 increase in bad debt and chargeback
activity primarily as a result of higher direct response television campaign
activity and its associated higher bad debt rate, and to a lesser extent,
higher chargeback activity related to the increased sales volume through our
partners online stores.

   Stock-Based Compensation Expense.  Stock-based compensation expense
increased $79,000 from $453,000 for the three-month period ended March 31, 2001
to $532,000 for the three-month period ended March 30, 2002. This increase was
a result of $158,000 related to the amortization of deferred partner revenue
share charges, offset, in part, by a decrease of $79,000 in charges related to
options subject to variable accounting. As of March 30, 2002, we had an
aggregate of $2.5 million of deferred stock-based compensation remaining to be
amortized. We had stock-based compensation expense related to the amortization
of deferred partner revenue share charges of $158,000 and $0 for the
three-month periods ended March 30, 2002 and March 31, 2001, respectively.

   Depreciation and Amortization Expenses.  Depreciation and amortization
expenses increased $208,000 from $1.6 million for the three-month period ended
March 31, 2001 to $1.8 million for the three-month period ended March 30, 2002.
The increase in depreciation and amortization expenses was due to a $373,000
increase in depreciation expense related to our corporate headquarters, our
Kentucky fulfillment center and the assets purchased to build, manage and
operate our e-commerce business, offset, in part, by a $173,000 decrease in
amortization of goodwill associated with our acquisition of Fogdog. The
decrease in amortization is due to the discontinuance of amortization of
goodwill in accordance with Statement of Financial Accounting Standards, or
SFAS, No. 142, "Goodwill and Other Intangible Assets."

   Interest (Income) Expense.  We had interest income of $454,000 and interest
expense of $132,000 for the three-month period ended March 30, 2002 compared to
interest income of $1.1 million and interest expense of $147,000 for the
three-month period ended March 31, 2001. The decrease in interest income of
$662,000 was due to lower interest rates, offset by higher average balances of
cash, cash equivalents and short-term investments during the three-month period
ended March 30, 2002 compared to the three-month period ended March 31, 2001.

   Income Taxes.  Since the sales of our discontinued operations, we have not
generated taxable income. Net operating losses generated have been carried back
to offset income taxes paid in prior years. The remaining net operating losses
will be carried forward. The use of certain net operating loss carryforwards
are subject to annual limitations based on ownership changes of our stock, as
defined by Section 382 of the Internal Revenue Code. We expect that net
operating losses of approximately $34.1 million will expire before they can be
utilized. Any otherwise recognizable deferred tax assets have been offset by a
valuation allowance for the net operating loss carryforwards.

                                      18

<PAGE>

Certain Related Party Transactions

   We have entered into a strategic alliance to provide procurement and
fulfillment services for QVC, Inc., who along with Comcast Corporation forms
Interactive Technology Holdings, LLC, or ITH, which is one of our principal
shareholders. We recognized net revenues of $270,000 and $203,000 on sales to
this related party for the three-month periods ended March 31, 2001 and March
30, 2002, respectively. The terms of these sales are comparable to those with
our other partners, and the amount included in accounts receivable as a result
of these sales was $183,000 as of March 30, 2002.

Liquidity and Capital Resources

   Our principal source of liquidity is our cash and cash equivalents. Our cash
and cash equivalents balance was $80.0 million and $105.9 million as of March
30, 2002 and December 29, 2001, respectively.

   We raised an aggregate of $176.3 million in gross proceeds through equity
financings in fiscal 1999, fiscal 2000 and fiscal 2001, as well as $5.3 million
in gross proceeds through a mortgage financing in fiscal 2000. We received an
aggregate of $23.5 million in proceeds from the sales of our discontinued
operations in fiscal 1999 and fiscal 2000, as well as $35.7 million in net cash
from the acquisition of Fogdog in fiscal 2000. We used the proceeds of these
transactions to finance our e-commerce business.

   We have incurred substantial costs to develop our e-commerce businesses and
to recruit, train and compensate personnel for our creative, engineering,
business development, marketing, merchandising, customer service, management
information systems and administrative departments. In addition, during fiscal
2000, we invested in the required technology, equipment and personnel to make
our Kentucky fulfillment center fully operational, and in April 2002, we
purchased for $8.8 million in cash our Kentucky fulfillment center, which we
previously leased. We intend to spend approximately $6.0 million in the second
and third quarters of fiscal 2002 to expand our Kentucky fulfillment center. As
of March 30, 2002, we had cash and cash equivalents of $80.0 million, working
capital of $87.0 million and an accumulated deficit of $137.0 million.

   We used approximately $13.8 million and $21.2 million in net cash for
operating activities during the three-month periods ended March 30, 2002 and
March 31, 2001, respectively. Net cash used for operating activities during the
three-month period ended March 30, 2002 was primarily the result of net losses
and changes in prepaid expenses and other current assets, accounts payable, and
accrued expenses and other offset, in part, by changes in accounts receivable,
inventory, deferred revenue, stock-based compensation, and depreciation and
amortization. Net cash used for operating activities during the three-month
period ended March 31, 2001 was primarily the result of net losses and changes
in prepaid expenses and other current assets, deferred revenue, accounts
payable, and accrued expenses and other offset, in part, by changes in accounts
receivable, inventory, stock-based compensation, and depreciation and
amortization.

   Our investing activities during the three-month period ended March 30, 2002
consisted primarily of $8.8 million paid for the acquisition of Ashford.com
including acquisition costs. Also during the three-month period ended March 30,
2002, we made capital expenditures of $1.0 million and we purchased $567,000 of
marketable securities. During the three-month period ended March 31, 2001, we
made capital expenditures of $1.2 million and we received $983,000 in cash
proceeds from sales of short-term investments.

   Our financing activities during the three-month period ended March 30, 2002
consisted primarily of a $3.1 million payment on a revolving credit facility
with Congress Financial Corporation, a unit of First Union National Bank. We
assumed the credit facility as part of our acquisition of Ashford.

   We had the following commitments as of March 30, 2002 concerning our debt
obligations, lease obligations, employment agreements, advertising and media
agreements, partner revenue share payment obligations and our anticipated
payments associated with our purchase and expansion of our Kentucky fulfillment
center.

                                      19

<PAGE>

<TABLE>
<CAPTION>
                                 Nine Months Ending                  Fiscal Year
                                    December 28,    ----------------------------------------------
                                        2002         2003   2004   2005   2006  Thereafter  Total
                                 ------------------ ------ ------ ------ ------ ---------- -------
                                                          (in thousands)
<S>                              <C>                <C>    <C>    <C>    <C>    <C>        <C>
Mortgage principal..............      $    28       $   42 $   45 $   50 $   54  $ 5,018   $ 5,237
Mortgage interest...............          339          447    444    439    435    1,446     3,550
Capital leases..................          452           --     --     --     --       --       452
Operating leases................        1,293          540     42      3     --       --     1,878
Employment agreements...........        1,918        2,531  1,451     --     --       --     5,900
Advertising and media agreements          667           --     --     --     --       --       667
Partner revenue share payments..        1,125        1,650  1,700  1,750  1,500    6,750    14,475
Purchase and expansion of KY
  fulfillment center............       14,750           --     --     --     --       --    14,750
                                      -------       ------ ------ ------ ------  -------   -------
   Total commitments............      $20,572       $5,210 $3,682 $2,242 $1,989  $13,214   $46,909
                                      =======       ====== ====== ====== ======  =======   =======
</TABLE>

   To date, we have financed our e-commerce operations primarily from the sale
of equity securities. Management expects that our current cash and the
collection of accounts receivable will be sufficient to meet our anticipated
cash needs for the foreseeable future. In addition, we expect that we will
realize income from continuing operations, excluding non-cash charges for
stock-based compensation and depreciation and amortization, for fiscal 2002.
However, in order to fund our anticipated operating expenses and realize income
from continuing operations, including non-cash charges, our revenues must
increase significantly. If cash flows are insufficient to fund these expenses,
we may in the future need to raise additional funds in future periods through
public or private debt or equity financings or other arrangements to fund our
operations until we achieve profitability. Failure to raise future capital when
needed could seriously harm our business and operating results. If additional
funds are raised through the issuance of equity securities, the percentage
ownership of our stockholders would be reduced. Furthermore, these equity
securities might have rights, preferences or privileges senior to our common
stock.

Seasonality

   We expect to experience seasonal fluctuations in our revenues. These
seasonal patterns will cause quarterly fluctuations in our operating results.
In particular, we expect that the fourth fiscal quarter will account for a
disproportionate percentage of our total annual sales. We believe that results
of operations for a quarterly period may not be indicative of the results for
any other quarter or for the full year.

Risk Factors

   Any investment in our common stock or other securities involves a high
degree of risk. You should carefully consider the following information about
these risks, together with the other information contained in this Quarterly
Report on Form 10-Q. If any of the following risks occur, our business could be
materially harmed. In these circumstances, the market price of our common stock
could decline, and you may lose all or part of the money you paid to buy our
common stock.

   All statements made in this Quarterly Report on Form 10-Q, other than
statements of historical fact, will be forward-looking statements. The words
"anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "will",
"would", "should", "guidance", "potential", "continue", "project", "forecast"
and similar expressions typically are used to identify forward-looking
statements. Forward-looking statements are based on then-current expectations,
beliefs, assumptions, estimates and forecasts about our business and the
industry and markets in which we operate. Those statements are not guarantees
of future performance and involve risks, uncertainties and assumptions which
are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or implied by these forward-looking
statements. Factors which may affect our business, financial condition and
operating results include the effects of changes in the economy, consumer
spending, the

                                      20

<PAGE>

stock market and the industries in which we operate, changes affecting the
Internet, online retailing and direct response marketing, our ability to
maintain relationships with strategic partners and suppliers, our ability to
timely and successfully develop, maintain and protect our technology and
product and service offerings and execute operationally, our ability to attract
and retain qualified personnel and our ability to successfully integrate our
acquisitions of other businesses, including our recent acquisition of
Ashford.com, Inc. More information about potential factors that could affect us
are described below. We expressly disclaim any intent or obligation to update
these forward-looking statements, except as otherwise specifically stated by
Global Sports.

   Our future success cannot be predicted based upon our limited e-commerce
operating history.

   Although we commenced operations in 1987, we did not initiate our e-commerce
business until the first quarter of 1999 and did not begin operating our
e-commerce business until the fourth quarter of 1999. Prior to the fourth
quarter of 1999, when we launched the e-commerce businesses we operate for our
partners, 100% of our revenues had been generated by our discontinued
operations. The sale of the discontinued operations was completed in May 2000.
Accordingly, 100% of our revenues are currently generated through our
e-commerce business. In addition, the nature of our e-commerce business has
undergone rapid development and change since we began operating it. Based on
our limited experience with our e-commerce business, it is difficult to predict
whether we will be successful. Thus, our chances of financial and operational
success should be evaluated in light of the risks, uncertainties, expenses,
delays and difficulties associated with operating a business in a relatively
new and unproven market or a new business in an existing market, many of which
may be beyond our control. If we are unable to address these issues, we may not
be financially or operationally successful.

   We expect increases in our operating expenses and continuing losses.

   We incurred substantial losses in fiscal 1999, fiscal 2000, fiscal 2001 and
during the first quarter of fiscal 2002, and as of March 30, 2002, we had an
accumulated deficit of $137.0 million. Except for the fourth quarter of fiscal
2001, we have not achieved profitability from our continuing operations. We may
not obtain enough customer traffic or viewers or a high enough volume of
purchases from the e-commerce businesses that we operate to generate sufficient
revenues to achieve profitability. We could continue to incur operating and net
losses. There can be no assurances that we will be able to achieve
profitability from our continuing operations.

   We will continue to incur significant operating expenses and capital
expenditures as we:

  .   enhance our distribution and order fulfillment capabilities;

  .   further improve our order processing systems and capabilities;

  .   develop enhanced technologies and features to improve our partners'
      e-commerce businesses;

  .   enhance our customer service capabilities to better serve customers'
      needs;

  .   increase our general and administrative functions to support our growing
      operations; and

  .   continue our business development, sales and marketing activities.

   Because we will incur many of these expenses before we receive any revenues
from our efforts, our losses will be greater than the losses we would incur if
we developed our business more slowly. In addition, we may find that these
efforts are more expensive than we currently anticipate, which could further
increase our losses. Also, the timing of these expenses may contribute to
fluctuations in our quarterly operating results.

   Prior to the recent expansion of our relationship with Bluelight.com,
establishment of our media and entertainment division and our recent
acquisition of Ashford.com, our business had been limited to the sporting goods
industry. Through the expansion of our Bluelight.com relationship and the
acquisition of Ashford.com, we have expanded or intend to expand our operations
into other categories. We may not be able to successfully expand our operations
into new categories.

                                      21

<PAGE>

   Until recently, our business had been limited to the sporting goods
industry. Through the recent expansion of our relationship with Bluelight.com,
we have begun to expand our operations into other categories, including
consumer electronics, home products, jewelry, toys, books and music. Through
the establishment of our media and entertainment division, we have begun to
create and work with third parties to manufacture unique products related to
direct response television programming. Through our acquisition of Ashford.com,
we intend to further expand our business into the jewelry, luxury goods and
corporate gifts categories. In order to successfully expand our business into
these categories, we must develop and maintain relationships with manufacturers
and other sources of product in these categories and hire and retain skilled
personnel to help manage these areas of our business. Our failure to
successfully expand our business into these categories could limit our ability
to increase revenues.

   Our success is tied to the success of the retail industry and the partners
for which we operate e-commerce businesses.

   Our future success is substantially dependent upon the success of the retail
industry and the partners for which we operate e-commerce businesses. From time
to time, the retail industry has experienced downturns. Any downturn in the
retail industry could adversely affect our revenues. In addition, if our
partners were to have financial difficulties or seek protection from their
creditors, or if we are unable to replace our partners or obtain new partners,
it could adversely affect our ability to grow our business.

   We have an e-commerce agreement with Bluelight.com, a subsidiary of Kmart,
pursuant to which we operate the Bluelight.com Web site. Kmart's recent
bankruptcy filing may mean that we may not realize all of the economic benefits
of that agreement.

   Kmart, as well as Bluelight.com, recently filed for bankruptcy protection.
The bankruptcy court permitted Bluelight.com to pay us all amounts due prior to
the bankruptcy filing and to continue business as usual with us. Bluelight.com
has the ability to reject its agreement with us, thereby, terminating our
relationship with Bluelight.com. If Bluelight.com rejects the e-commerce
agreement or does not emerge from bankruptcy, we will not realize all of the
economic benefits of that agreement.

   We enter into contracts with our partners. Some of these partners' online
retail stores account for a significant portion of our revenue. If we do not
maintain good working relationships with our partners or perform as required
under these agreements, it could adversely affect our business. Additionally,
if our partners terminate their contracts with us, it could negatively affect
our business.

   The contracts with our partners establish new and complex relationships
between us and our partners. We spend a significant amount of time and effort
to maintain our relationships with our partners and address the issues that
from time to time may arise from these new and complex relationships. For
fiscal 2001, sales to customers through one of our partner's e-commerce
business accounted for 25% of our revenue, sales to customers through another
of our partner's e-commerce business accounted for 19% of our revenue and sales
to our top five partners' e-commerce businesses accounted for 62% of our
revenue. For fiscal 2000, sales to customers through one of our partner's
e-commerce business accounted for 45% of our revenue, sales to customers
through another of our partner's e-commerce business accounted for 20% of our
revenue and sales to customers through our top three partners' e-commerce
businesses accounted for 71% of our revenue. If we do not maintain a good
working relationship with our partners or perform as required under these
agreements, our partners could seek to terminate the agreements prior to the
end of the term or they could decide not to renew the contracts at the end of
the term. This could adversely affect our business, financial condition and
results of operations. Moreover, our partners could decide not to renew these
contracts for reasons not related to our performance.

                                      22

<PAGE>

   Our operating results are difficult to predict. If we fail to meet the
expectations of public market analysts and investors, the market price of our
common stock may decline significantly.

   Our annual and quarterly operating results may fluctuate significantly in
the future due to a variety of factors, many of which are outside of our
control. Because our operating results may be volatile and difficult to
predict, quarter-to-quarter comparisons of our operating results may not be a
good indication of our future performance. In some future quarter, our
operating results may fall below the expectations of securities analysts and
investors. In this event, the trading price of our common stock likely will
decline significantly.

   Factors that may harm our business or cause our operating results to
fluctuate include the following:

  .   our inability to retain existing partners or to obtain new partners;

  .   our inability to obtain new customers at a reasonable cost, retain
      existing customers or encourage repeat purchases;

  .   decreases in the number of visitors to or viewers of the online retail
      stores and direct response television campaigns operated by us or the
      inability to convert these visitors and viewers into customers;

  .   our failure to offer an appealing mix of products;

  .   our inability to adequately maintain, upgrade and develop our partners'
      Web sites or the technology and systems we use to process customers'
      orders and payments;

  .   the ability of our competitors to offer new or superior e-commerce
      businesses, services or products;

  .   price competition that results in lower profit margins or losses;

  .   our inability to obtain or develop specific products or brands or
      unwillingness of vendors to sell their products to us;

  .   unanticipated fluctuations in the amount of consumer spending on various
      products that we sell, which tend to be discretionary spending items;

  .   increases in the cost of advertising;

  .   increases in the amount and timing of operating costs and capital
      expenditures relating to expansion of our operations;

  .   unexpected increases in shipping costs or delivery times, particularly
      during the holiday season;

  .   technical difficulties, system security breaches, system downtime or
      Internet slowdowns;

  .   seasonality;

  .   our inability to manage inventory levels or control inventory theft;

  .   our inability to manage distribution operations or provide adequate
      levels of customer service;

  .   an increase in the level of our product returns;

  .   government regulations related to the Internet, online retailing or
      direct response marketing, which could increase the costs associated with
      operating our businesses; and

  .   unfavorable economic conditions specific to the Internet, online
      retailing, direct response marketing or the industries in which we
      operate, which could reduce demand for the products sold through the
      businesses operated by us.

   Seasonal fluctuations in sales could cause wide fluctuations in our
quarterly results.

   We expect to experience seasonal fluctuations in our revenues. These
seasonal patterns will cause quarterly fluctuations in our operating results.
In particular, we expect that our fourth fiscal quarter will account for a
disproportionate percentage of our total annual revenues. In anticipation of
increased sales activity during our fourth fiscal quarter, we may hire a
significant number of temporary employees to supplement our permanent staff and
significantly increase our inventory levels. For this reason, if our revenues
were below seasonal expectations during the fourth fiscal quarter, our
operating results could be below the expectations of securities analysts and
investors.

                                      23

<PAGE>

   Due to the limited operating history of our e-commerce business, it is
difficult to predict the seasonal pattern of our sales and the impact of this
seasonality on our business and financial results. In the future, our seasonal
sales patterns may become more pronounced, may strain our personnel, product
distribution and shipment activities and may cause a shortfall in revenues as
compared to expenses in a given period.

   We have been unable to fund our e-commerce operations with the cash
generated from our business. If we do not generate cash sufficient to fund our
operations, we may in the future need additional financing to continue our
growth or our growth may be limited.

   Because we have not generated sufficient cash from operations to date, we
have funded our e-commerce businesses primarily from the sale of equity
securities. Cash from revenues must increase significantly for us to fund
anticipated operating expenses internally. If our cash flows are insufficient
to fund these expenses, we may in the future need to fund our growth through
additional debt or equity financings or reduce costs. Further, we may not be
able to obtain financing on satisfactory terms. Our inability to finance our
growth, either internally or externally, may limit our growth potential and our
ability to execute our business strategy. If we issue securities to raise
capital, our existing stockholders may experience additional dilution or the
new securities may have rights senior to those of our common stock.

   We must develop and maintain relationships with key manufacturers to obtain
a sufficient assortment and quantity of quality merchandise on acceptable
commercial terms. If we are unable to do so, it could adversely affect our
business, results of operations and financial condition.

   We primarily purchase the products we offer directly from the manufacturers
of the products. If we are unable to develop and maintain relationships with
these manufacturers, we may be unable to obtain or continue to carry a
sufficient assortment and quantity of quality merchandise on acceptable
commercial terms and our business could be adversely impacted. We do not have
written contracts with most of our manufacturers. In addition, during fiscal
2001, we purchased 23% and 16% of the total amount of inventory we purchased
during fiscal 2001 from two manufacturers. Manufacturers could stop selling
products to us and may ask us to remove their products or logos from our
partners' Web sites. In some circumstances, our partners purchase products
directly from manufacturers for sale on their Web sites. If we or our partners
are unable to obtain products directly from manufacturers, especially popular
brand manufacturers, we may not be able to obtain the same or comparable
merchandise in a timely manner or on acceptable commercial terms. For example,
we currently are not authorized to offer some popular brands of sporting goods,
such as Nike, although we are authorized to sell the remaining Nike inventory
held by Fogdog on the fogdog.com Web site. There can be no assurance that we
will be able to offer these brands in the future or that we will continue to be
able to offer brands we currently offer. If we are unable to offer a sufficient
assortment and quantity of quality products at acceptable prices, we may lose
sales and market share.

   We may not be successful in finding, developing and marketing products that
consumers of the direct response television campaigns we operate will want to
purchase.

   For the direct response television campaigns we operate, our success depends
on our ability to select products that consumers will want to purchase. We
promote these products on our partners' Web sites as well as through direct
response television programming. If we do not select products that consumers
want to purchase, this could result in lost opportunities which could reduce
sales.

   We may be unable to source product for direct response television campaigns
on favorable terms. Additionally, the products we are able to source may not be
profitable.

   For direct response television campaigns, our financial performance depends
on our ability to develop products or acquire the rights to products that will
be appealing to consumers. We select products based on management's retail
experience. We may not be successful in finding, developing and marketing
products that

                                      24

<PAGE>

consumers will want to purchase. Any failure to meet consumers' desires could
result in lost opportunities and excess inventory which could reduce our
revenues. Additionally, we may select products that are not profitable which
could result in lower margins.

   Capacity constraints or system failures could materially and adversely
affect our business, results of operations and financial condition.

   Any system failure, including network, telecommunications, software or
hardware failure, that causes interruption of the availability of our partners'
online retail stores or direct response television campaigns could result in
decreased usage of these stores or access to these campaigns. If these failures
are sustained or repeated, they could reduce the attractiveness of our
partners' online retail stores and direct response television campaigns to
customers, vendors and advertisers. Our operations are subject to damage or
interruption from:

  .   fire, flood, earthquake or other natural disasters;

  .   power losses, interruptions or brown-outs;

  .   Internet, telecommunications or data network failures;

  .   physical and electronic break-ins or security breaches;

  .   computer viruses; and

  .   other similar events.

   We have been operating e-commerce businesses for our partners for less than
three years. The limited time during which we have been operating these
businesses, as well as the inherent unpredictability of the events described
above, makes it difficult to predict whether the occurrence of any of these
events is likely. If any of these events do occur, they could result in
interruptions, delays or cessations in service to users of our partners' online
retail stores or viewers of our partners' direct response television campaigns.

   In addition, we maintain our computers on which we operate our partners'
online retail stores at the facility of a third-party hosting company. We
cannot control the maintenance and operation of this facility, which is also
susceptible to similar disasters and problems. Our insurance policies may not
adequately compensate us for any losses that we may incur. Any system failure
that causes an interruption in our service or a decrease in responsiveness
could harm our relationships with our customers and result in reduced revenues.

   We may be unable to protect our proprietary technology or keep up with that
of our competitors.

   Our success depends to a significant degree upon the protection of our
software and other proprietary intellectual property rights. We may be unable
to deter misappropriation of our proprietary information, detect unauthorized
use or take appropriate steps to enforce our intellectual property rights. In
addition, our competitors could, without violating our proprietary rights,
develop technologies that are as good as or better than our technology.

   Our failure to protect our software and other proprietary intellectual
property rights or to develop technologies that are as good as our competitors'
could put us at a disadvantage to our competitors. In addition, the failure of
our partners to protect their intellectual property rights, including their
trademarks and domain names, could impair our operations. These failures could
have a material adverse effect on our ability to generate revenues.

   If we do not respond to rapid technological changes, our services could
become obsolete and we could lose customers.

   Due to costs and management time required to introduce new services,
products and enhancements, we may be unable to respond to rapid technological
changes in a timely enough manner to avoid our services becoming

                                      25

<PAGE>

uncompetitive. If this happens, our customers may forgo the use of our
partners' e-commerce businesses and use those of our competitors. To remain
competitive, we must continue to enhance and improve the functionality and
features of our partners' online retail stores and direct response television
campaigns. The Internet, online retailing and the direct response marketing are
constantly changing. If competitors introduce new products and services using
new technologies or if new industry standards and practices emerge, our
partners' existing online retail stores and direct response television
campaigns and our proprietary technology and systems may become uncompetitive.

   Developing our partners' e-commerce businesses and other proprietary
technology entails significant technical and business risks. We may use new
technologies ineffectively or we may fail to adapt our partners' online retail
stores and direct response television campaigns, our order processing systems
and our computer and telecommunications network to meet customer requirements
or emerging industry standards.

   We may be subject to intellectual property claims or competition or trade
practices claims that could be costly and could disrupt our business.

   Third parties may assert that our business or technologies infringe their
intellectual property rights. From time to time, we may receive notices from
third parties questioning our right to present specific images or logos on our
partners' online retail stores or direct response television campaigns, or
stating that we have infringed their trademarks or copyrights. We may in the
future receive claims that we are engaging in unfair competition or other
illegal trade practices. We may be unsuccessful in defending against these
claims, which could result in substantial damages, fines or other penalties.
The resolution of a claim could also require us to change how we do business,
redesign our partners' e-commerce businesses or enter into burdensome royalty
or licensing agreements. These license or royalty agreements, if required, may
not be available on acceptable terms, if at all, in the event of a successful
claim of infringement. Our insurance coverage may not be adequate to cover
every claim that third parties could assert against us. Even unsuccessful
claims could result in significant legal fees and other expenses, diversion of
management's time and disruptions in our business. Any of these claims could
also harm our reputation.

   We rely on our ability to enter into marketing and promotion agreements with
online services, search engines, directories and other Web sites to drive
traffic to the e-commerce businesses we operate. If we are unable to enter into
or properly develop these marketing and promotional agreements, our ability to
generate revenue could be adversely affected.

   We have entered into marketing and promotion agreements with online
services, search engines, directories and other Web sites to provide content,
advertising banners and other links that link to our partners' online retail
stores. We expect to rely on these agreements as significant sources of traffic
to our partners' online retail stores and to generate new customers. If we are
unable to enter into satisfactory agreements on acceptable terms, our ability
to attract new customers could be harmed. Further, many of the parties with
which we may have online advertising arrangements could provide advertising
services for other marketers of goods. As a result, these parties may be
reluctant to enter into or maintain relationships with us. Failure to achieve
sufficient traffic or generate sufficient revenue from purchases originating
from third parties may result in termination of these types of agreements.
Without these relationships, we may not be able to sufficiently increase our
market share.

   Our success is dependent upon our executive officers and other key personnel.

   Our success depends to a significant degree upon the contribution of our
executive officers and other key personnel, particularly Michael G. Rubin,
Chairman, President and Chief Executive Officer. We have employment agreements
with some of our executive officers and key personnel. Due to the costs
associated with compensating executive officers and key personnel and the
competition for highly qualified personnel, we cannot be sure that we will be
able to retain or attract executive, managerial and other key personnel. We
have obtained key person life insurance for Mr. Rubin in the amount of $8.0
million. We have not obtained key person life insurance for any of our other
executive officers or key personnel.

                                      26

<PAGE>

   We may be unable to hire and retain the skilled personnel necessary to
develop our business.

   We intend to continue to hire a number of skilled personnel. Due to intense
competition for these individuals from our competitors and other employers, we
may not be able to attract, assimilate or retain highly qualified personnel in
the future. Our failure to attract and retain the highly trained personnel that
are integral to our business may limit our growth rate.

   We may not be able to compete successfully against current and future
competitors, which could harm our margins and our business.

   Online retailing and direct response marketing are constantly evolving and
are extremely competitive. Increased competition could result in price
reductions, reduced gross margins and loss of market share, any of which could
seriously harm our business, financial condition and results of operations. We
compete with companies that may be able to provide solutions to companies that
wish to establish e-commerce businesses, including:

  .   third party providers, such as Amazon.com, USA Networks and Digital
      River; and

  .   third-party fulfillment and customer services providers, such as Federal
      Express, UPS, Newroads and Submitorder.com.

   We also compete with the online and offline businesses of a variety of
companies, including:

  .   specialty retailers, including sporting goods and jewelry and luxury
      goods retailers, such as Footlocker, REI.com and Tiffany's;

  .   general merchandise retailers, such as Target, WalMart and Nordstrom;

  .   catalog retailers, such as L.L. Bean and Eastbay; and

  .   manufacturers, such as Nike.

   If we experience problems in our fulfillment, warehouse and distribution
operations, we could lose customers.

   Although we operate our own fulfillment center, we rely upon multiple third
parties for the shipment of our products. We also rely upon certain vendors to
ship products directly to our customers. As a result, we are subject to the
risks associated with the ability of these vendors to successfully and timely
fulfill and ship customer orders and to successfully handle our inventory
delivery services to meet our shipping needs. The failure of these vendors to
provide these services, or the termination or interruption of these services,
could adversely affect the satisfaction of our customers, which could result in
reduced sales.

   Sporting goods and apparel and jewelry and luxury goods are subject to
changing consumer preferences. If we fail to anticipate these changes, we could
experience lower sales, higher inventory markdowns and lower margins.

   Our success depends, in part, upon our ability to anticipate and respond to
trends in sporting goods and jewelry and luxury goods merchandise and
consumers' participation in sports and fashion. Consumers' tastes in sporting
goods equipment, apparel, jewelry and luxury goods are subject to frequent and
significant changes, due in part to manufacturers' efforts to influence
purchases. In addition, the level of consumer interest in a given sport or type
of fashion can fluctuate dramatically. If we fail to identify and respond to
changes in merchandising and consumer preferences, our sales could suffer and
we could be required to mark down unsold inventory. This would depress our
profit margins. In addition, any failure to keep pace with changes in
consumers' tastes could result in lost opportunities which could reduce sales.


                                      27

<PAGE>

   High merchandise returns could adversely affect our business, financial
condition and results of operations.

   Our policy for allowing our customers to return products is generally
consistent with the policies of each of our partners for which we operate
e-commerce or direct response television businesses. If merchandise returns are
significant, our revenues could be adversely affected.

   We may be subject to product liability claims that could be costly and
time-consuming.

   We sell products manufactured by third parties, some of which may be
defective. If any product that we sell were to cause physical injury or injury
to property, the injured party or parties could bring claims against us as the
retailer of the product. Our insurance coverage may not be adequate to cover
every claim that could be asserted. Similarly, we could be subject to claims
that users of our partners' online retail stores or viewers of our partners'
direct response television campaigns were harmed due to their reliance on our
product information, product selection guides, advice or instructions. If a
successful claim were brought against us in excess of our insurance coverage,
it could adversely affect our business. Even unsuccessful claims could result
in the expenditure of funds and management time and could have a negative
impact on our business.

   We may be liable if third parties misappropriate our customers' personal
information.

   If third parties are able to penetrate our network or telecommunications
security or otherwise misappropriate our customers' personal information or
credit card information or if we give third parties improper access to our
customers' personal information or credit card information, we could be subject
to liability. This liability could include claims for unauthorized purchases
with credit card information, impersonation or other similar fraud claims. They
could also include claims for other misuses of personal information, including
unauthorized marketing purposes. These claims could result in litigation.
Liability for misappropriation of this information could be significant. In
addition, the Federal Trade Commission and state agencies have been
investigating various companies regarding their use of customers' personal
information. We could incur additional expenses if new regulations regarding
the use of personal information are introduced or if government agencies
investigate our privacy practices.

   We are controlled by certain principal stockholders.

   As of April 1, 2002, Michael G. Rubin, our Chairman, President and Chief
Executive Officer, beneficially owned 18.9%, funds affiliated with SOFTBANK
America Inc., or SOFTBANK, beneficially owned 25.0% and Interactive Technology
Holdings, LLC, or ITH, a joint venture company of Comcast Corporation and QVC,
Inc., beneficially owned 31.8% of our outstanding common stock, including
currently exercisable warrants and options to purchase common stock. Should
they decide to act together, Mr. Rubin, SOFTBANK and ITH would be in a position
to exercise control over most matters requiring stockholder approval, including
the election or removal of directors, approval of significant corporate
transactions and the ability generally to direct our affairs. Furthermore, the
stock purchase agreements pursuant to which SOFTBANK and ITH acquired their
shares of our common stock provide that SOFTBANK and ITH each have the right to
designate up to two members of our board of directors. This concentration of
ownership and SOFTBANK's and ITH's right to designate members to our board of
directors may have the effect of delaying or preventing a change in control of
us, including transactions in which stockholders might otherwise receive a
premium over current market prices for their shares.

   From time to time, we may acquire or invest in other companies. There are
risks associated with potential acquisitions and investments. As a result, we
may not achieve the expected benefits of potential acquisitions.

   If we are presented with appropriate opportunities, we may make investments
in complementary companies, products or technologies or we may purchase other
companies. On March 14, 2002, we acquired all of the outstanding shares of
Ashford.com, an online jewelry, luxury goods and corporate gifts retailer. We
may not realize the anticipated benefits of the acquisition of Ashford or any
other investment or acquisition. We may not

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be able to successfully assimilate the additional personnel, operations,
acquired technology or products into our business. Any acquisition, including
the acquisition of Ashford.com, may further strain our existing financial and
managerial controls and reporting systems and procedures. If we do not
successfully integrate the business of Ashford.com, the expenditures on
integration efforts will reduce our cash position without us being able to
realize the expected benefits of the merger. In addition, key personnel of an
acquired company may decide not to work for us. These difficulties could
disrupt our ongoing business, distract our management and employees and
increase our expenses. Further, the physical expansion in facilities that would
occur as a result of the acquisition of Ashford.com and any other acquisition
may result in disruptions that seriously impair our business. Finally, we may
have to incur debt or issue additional equity securities to pay for other
acquisitions or investments, the issuance of which could be dilutive to our
stockholders.

   There are certain risks associated with our acquisition of Ashford.com as a
result of litigation pending or threatened against Ashford.com at the time of
the acquisition.

   The staff of the Securities and Exchange Commission has been conducting an
investigation concerning Ashford.com's accounting and disclosures relating to
its marketing agreement with Amazon.com during its fiscal years 2000 and 2001
for the purpose of determining whether the Commission should commence
enforcement proceedings in federal district court. Ashford.com has made a
submission to the staff of the Commission explaining why such a proceeding
should not be initiated. The staff has advised Ashford.com that it plans to
recommend that the Commission commence such enforcement proceedings, although
no final decision has been made. Ashford.com's audit committee completed an
internal review of certain matters relating to the staff's review prior to the
acquisition. Ashford.com has maintained that none of the accounting issues
raised by the Commission would have a material adverse effect on its financial
statements. Based on our review of the matter, we have no reason to disagree
with Ashford.com's assessment, although there can be no assurance as to the
ultimate outcome of this matter.

   Since July 11, 2001, several stockholder class action complaints have been
filed in the United States District Court of the Southern District of New York
against Ashford.com, several of Ashford.com's officers and directors, and
various underwriters of Ashford.com's initial public offering. The purported
class actions have all been brought on behalf of purchasers of Ashford.com
common stock during various periods beginning on September 22, 1999, the date
of Ashford.com's initial public offering. The plaintiffs allege that
Ashford.com's prospectus, included in Ashford.com's Registration Statement on
Form S-1 filed with the Securities and Exchange Commission, was materially
false and misleading because it failed to disclose, among other things, certain
fees and commissions collected by the underwriters or arrangements designed to
inflate the price of the common stock. The plaintiffs further allege that
because of these purchases, Ashford.com's post-initial public offering stock
price was artificially inflated. As a result of the alleged omissions in the
prospectus and the purported inflation of the stock price, the plaintiffs claim
violations of Sections 11 and 15 of the Securities Act of 1933 and Section
10(b) of the Securities Exchange Act of 1934. The complaints have been
consolidated into a single action. Ashford.com has maintained that it has
meritorious defenses against these actions and intends to vigorously defend
them. Ashford.com is also subject to various other claims and legal actions
arising in the ordinary course of business. Ashford.com also has maintained
that the ultimate disposition of these matters would not have a material effect
on Ashford.com's business, financial condition or results of operations. Based
on our review of these matters, we have no reason to disagree with
Ashford.com's assessment, although there can be no assurances as to the
ultimate outcomes of these matters.

   We may expand our business internationally, causing our business to become
increasingly susceptible to numerous international business risks and
challenges that could affect our profitability.

   We believe that the current globalization of the economy requires businesses
to consider pursuing international expansion. In the future, we may expand into
international markets. International sales are subject to inherent risks and
challenges that could adversely affect our profitability, including:

  .   the need to develop new supplier and manufacturer relationships,
      particularly because major manufacturers may require that our
      international operations deal with local distributors;

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<PAGE>

  .   unexpected changes in international regulatory requirements and tariffs;

  .   difficulties in staffing and managing foreign operations;

  .   longer payment cycles from credit card companies;

  .   greater difficulty in accounts receivable collection;

  .   potential adverse tax consequences;

  .   price controls or other restrictions on foreign currency; and

  .   difficulties in obtaining export and import licenses.

   To the extent we generate international sales in the future, any negative
impact on our international business could negatively impact our business,
operating results and financial condition as a whole. In particular, gains and
losses on the conversion of foreign payments into United States dollars may
contribute to fluctuations in our results of operations and fluctuating
exchange rates could cause reduced revenues and/or gross margins from
non-dollar-denominated international sales.

   Our success is tied to the continued growth in the use of the Internet and
the adequacy of the Internet infrastructure.

   Our future success is substantially dependent upon continued growth in the
use of the Internet. The number of users and advertisers on the Internet may
not increase and commerce over the Internet may not become more accepted and
widespread for a number of reasons, including:

  .   actual or perceived lack of security of information or privacy protection;

  .   lack of access and ease of use;

  .   congestion of traffic on the Internet;

  .   inconsistent quality of service and lack of availability of
      cost-effective, high-speed service;

  .   possible disruptions, computer viruses or other damage to the Internet
      servers or to users' computers;

  .   excessive governmental regulation;

  .   uncertainty regarding intellectual property ownership; and

  .   lack of high-speed modems and other communications equipment.

   Published reports have also indicated that growth in the use of the Internet
has resulted in users experiencing delays, transmission errors and other
difficulties. As currently configured, the Internet may not support an increase
in the number or requirements of users. In addition, there have been outages
and delays on the Internet as a result of damage to the current infrastructure.
The amount of traffic on our partners' Web sites could be materially affected
if there are outages or delays in the future. The use of the Internet may also
decline if there are delays in the development or adoption of modifications by
third parties that are required to support increased levels of activity on the
Internet. If any of the foregoing occurs, or if the Internet does not become a
viable commercial medium, the number of our customers could decrease. In
addition, we may be required to spend significant capital to adapt our
operations to any new or emerging technologies relating to the Internet.

   The technology of the Internet is changing rapidly and could render the
online retail stores which we operate obsolete.

   The technology of the Internet and online retailing is evolving rapidly for
many reasons, including:

  .   customers frequently changing their requirements and preferences;


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<PAGE>

  .   competitors frequently introducing new products and services; and

  .   industry associations and others creating new industry standards and
      practices.

   If the costs associated with the changing technology of the Internet
prevents us from enhancing the online retail stores that we operate, those
stores could become less effective, which would reduce our competitive
advantage and put our ability to attract and retain customers at risk. While we
sell products through the direct response television campaigns, the primary
channel through which we sell products is the online retail stores that we
operate. Therefore, the potential negative impact of these stores becoming less
effective would affect us to a greater extent than it would affect a company
that has other significant channels for the sale or distribution of its
products.

   In order to keep the Web sites that we operate from becoming obsolete, and
maintain our ability to attract and retain customers, we must accomplish the
following tasks:

  .   continuously enhance and improve our partners' Web sites;

  .   identify, select and obtain leading technologies useful in our business;
      and

  .   respond to technological advances and emerging industry standards in a
      cost-effective and timely manner.

   Customers may be unwilling to use the Internet to purchase goods.

   Our long-term future depends heavily upon the general public's willingness
to use the Internet as a means to purchase goods. The failure of the Internet
to develop into an effective commercial tool would seriously damage our future
operations. Online retailing is a relatively new concept, and large numbers of
customers may not begin or continue to use the Internet to purchase goods. The
demand for and acceptance of products sold over the Internet are highly
uncertain, and most online retailers have a short track record. If consumers
are unwilling to use the Internet to conduct business, our business may not
develop profitably. The Internet may not succeed as a medium of commerce
because of delays in developing elements of the needed Internet infrastructure,
such as a reliable network, high-speed modems, high-speed communication lines
and other enabling technologies.

   The security risks of online retailing may discourage customers from
purchasing goods from us.

   In order for online retailing to develop successfully, we and other market
participants must be able to transmit confidential information securely over
public networks. Third parties may have the technology or know-how to breach
the security of customer transaction data. Any breach could cause customers to
lose confidence in the security of our partners' online retail stores and
choose not to purchase from those stores. If someone is able to circumvent our
security measures, he or she could destroy or steal valuable information or
disrupt the operation of our partners' online retail stores. Concerns about the
security and privacy of transactions over the Internet could inhibit the growth
of the Internet and online retailing. Our security measures may not effectively
prohibit others from obtaining improper access to the information on our
partners' online retail stores. Any security breach could expose us to risks of
loss, litigation and liability and could seriously disrupt our operations.

   We need to continuously acquire and effectively use media space to market
and sell our direct response television campaign products.

   We generally enter into exclusive agreements with media companies,
manufacturers and other sellers of products to run the direct response
television portion of their e-commerce businesses. In those agreements, the
media companies, manufacturers and other sellers of products generally agree to
certain marketing, advertising and air-time commitments for the promotion of
products sold through direct response television as well as promotion of their
online retail stores. Air-time is very valuable and is essential for the
success of direct response television campaigns. If we are unable to negotiate
favorable marketing, advertising and air-time commitments in our agreements
with our partners or if our partners do not fulfill their commitments, the
amount of products we could sell likely would be lower which would cause our
revenues to be lower.

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<PAGE>

   Credit card fraud could adversely affect our business.

   We do not carry insurance against the risk of credit card fraud, so the
failure to adequately control fraudulent credit card transactions could
increase our general and administrative expenses. We have put in place
technology and processes to help us detect the fraudulent use of credit card
information. To date, we have not suffered material losses related to credit
card fraud. However, we may in the future suffer losses as a result of orders
placed with fraudulent credit card data even though the associated financial
institution approved payment of the orders. Under current credit card
practices, we are liable for fraudulent credit card transactions because we do
not obtain a cardholder's signature.

   If one or more states successfully assert that we should collect sales or
other taxes on the sale of our merchandise, our business could be harmed.

   We do not currently collect sales or other similar taxes for goods sold by
us and shipped into states other than Kentucky, Pennsylvania and Texas in which
we collect and remit applicable sales taxes. One or more local, state or
foreign jurisdictions may seek to impose sales tax collection obligations on us
and other out-of-state companies that engage in e-commerce. Our business could
be adversely affected if one or more states or any foreign country successfully
asserts that we should collect sales or other taxes on the sale of our
merchandise.
   Existing or future government regulation could harm our business.

   We are subject to the same federal, state and local laws as other companies
conducting e-commerce and direct response television businesses. Today there
are relatively few laws specifically directed towards conducting these types of
businesses. However, due to the increasing growth and popularity of the
Internet, online retailing and direct response television, many laws and
regulations relating to these businesses, particularly the Internet, are
proposed and considered at the state and federal levels. These laws and
regulations could cover issues such as user privacy, freedom of expression,
pricing, fraud, quality of products and services, taxation, advertising,
intellectual property rights and information security. Applicability of
existing laws governing issues such as property ownership, copyrights and other
intellectual property issues, taxation, libel, obscenity and personal privacy
could also harm our business. For example, United States and foreign laws
regulate our ability to use customer information and to develop, buy and sell
mailing lists. Many of these laws may not contemplate or address the unique
issues raised by the Internet, online retailing or direct response marketing.
Some laws that do contemplate or address those unique issues, such as the
Digital Millennium Copyright Act, are only beginning to be interpreted by the
courts and their applicability and reach are therefore uncertain. These current
and future laws and regulations could reduce our ability to operate efficiently.

   Laws or regulations relating to user information and online privacy may
adversely affect the growth of our Internet business or our marketing efforts.

   We are subject to increasing regulation at the federal and state levels
relating to privacy and the use of personal user information. Several states
have proposed legislation that would limit the uses of personal user
information online or require collectors of information to establish privacy
policies. The Federal Trade Commission has adopted regulations regarding the
collection and use of personal identifying information obtained from children
under 13. In addition, bills pending in Congress would extend online privacy
protections to adults. Laws and regulations of this kind may include
requirements that we establish procedures to disclose and notify users of
privacy and security policies, obtain consent from users for collection and use
of information, or provide users with the ability to access, correct and delete
personal information stored by us. Even in the absence of those regulations,
the Federal Trade Commission has settled several proceedings resulting in
consent decrees in which Internet companies have been required to establish
programs regarding the manner in which personal information is collected from
users and provided to third parties. We could become a party to a similar
enforcement proceeding. These regulatory and enforcement efforts could also
harm our ability to collect demographic and personal information from users,
which could be costly or adversely affect our marketing efforts.


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   We have never paid dividends on our common stock and do not anticipate
paying dividends in the foreseeable future.

   We have never paid cash dividends on our common stock and do not anticipate
that any cash dividends will be declared or paid in the foreseeable future. As
a result, holders of our common stock will not receive a return, if any, on
their investment unless they sell their shares of our common stock.

   It may be difficult for a third party to acquire us and this could depress
our stock price.

   Pursuant to our amended and restated certificate of incorporation, we have
authorized a class of 5,000,000 shares of preferred stock, which our board of
directors may issue with terms, rights, preferences and designations as the
board may determine and without any vote of the stockholders, unless otherwise
required by law. Issuing the preferred stock, depending upon the terms, rights,
preferences and designations set by our board, may delay, deter or prevent a
change in control of us. In addition, issuing additional shares of common stock
could result in dilution of the voting power of the current holders of our
common stock. Moreover, "anti-takeover" provisions of Delaware law may restrict
the ability of the stockholders to approve a merger or business combination or
obtain control of us. As many investors consider a change of control as a
desirable path to liquidity, delaying or preventing a change in control of our
company may reduce the number of investors interested in our common stock,
which could depress our stock price.

   There are limitations on the liabilities of our directors.

   Pursuant to our amended and restated certificate of incorporation and under
Delaware law, our directors are not liable to us or our stockholders for
monetary damages for breach of fiduciary duty, except for liability for breach
of a director's duty of loyalty, acts or omissions by a director not in good
faith or which involve intentional misconduct or a knowing violation of law,
dividend payments or stock repurchases that are unlawful under Delaware law or
any transaction in which a director has derived an improper personal benefit.
In addition, we have entered into indemnification agreements with each of our
directors. These agreements, among other things, require us to indemnify each
director for certain expenses including attorneys' fees, judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by us or in our right, arising out of the person's
services as one of our directors. Our directors are not currently subject to
legal action that would require us to indemnify them; however, if any such
actions were brought, the costs associated with such actions could be harmful
to our business.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   There have been no significant changes in market risk for the quarter ended
March 30, 2002. See the information set forth in Item 7A of the Company's
Annual Report on Form 10-K for the fiscal year ended December 29, 2001 filed
with the Securities and Exchange Commission on April 4, 2002.

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                          PART II--OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

   We are involved in various litigation relating to our business, including
litigation relating to Ashford.com. We believe that the disposition of these
matters will not have a material adverse effect on our financial position or
results of operations.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

   None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

   None.

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

   None.

ITEM 5.  OTHER INFORMATION

   None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a) Exhibits

  None

   (b) Reports on Form 8-K

   On March 27, 2002, we filed a Form 8-K with the Securities and Exchange
Commission regarding the completion of the acquisition of Ashford.com, Inc. in
a merger transaction.

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                                   SIGNATURE

   Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.

                                               GLOBAL SPORTS, INC.

                                               By:    /s/  JORDAN M. COPLAND
                                                   -----------------------------
                                                         Jordan M. Copland
                                                    Executive Vice President &
                                                      Chief Financial Officer

Date:  May 14, 2002

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