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SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





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FORM 10-Q





|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|- |  | -------------------------------------------------------

| |  | SECURITIES EXCHANGE ACT OF 1934
| |  | -------------------------------




| |  | For the quarterly period ended August 3, 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 0-21406.





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BROOKSTONE, INC.


(Exact name of registrant as specified in its charter)





Delaware

06-1182895(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)





17 Riverside Street, Nashua, NH 03062


(address of principal executive offices, zip code)





603-880-9500


(Registrants telephone number, including area code)





(Former name, former address and former fiscal year, if changed since last report)





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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  ̈





APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS DURING THE PRECEDING FIVE YEARS





Indicate by check mark whether the registrant
has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes  ̈ No  ̈





APPLICABLE ONLY TO CORPORATE ISSUERS:





Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: 8,514,597 shares of common stock as of
September 6, 2002.





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##### Table of Contents




BROOKSTONE, INC.





INDEX TO FORM 10-Q





Page No.Part I:

Financial InformationItem 1:

Consolidated Balance Sheet as of August 3, 2002, February 2, 2002 and August 4, 2001

3Consolidated Statement of Operations for the thirteen & twenty-six weeks ended August 3, 2002 and August 4, 2001

4Consolidated Statement of Cash Flows for the twenty-six weeks ended August 3, 2002 and August 4, 2001

5Notes to Consolidated Financial Statements

6Item 2:

Managements Discussion and Analysis of Financial Condition and Results of Operations

9Item 4:

Controls and Procedures

11Part II:

Other InformationItem 1:

Legal Proceedings

12Item 2:

Change in Securities

12Item 3:

Defaults by the Company upon its Senior Securities

12Item 4:

Submission of Matters to a Vote of Security Holders

12Item 5:

Other Information

12Item 6:

Exhibits and Reports on Form 8-K

12Signatures

13Certification of Chief Executive Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

14Certification of Chief Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

15Certification of Chief Executive Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002

16Certification of Chief Executive Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002

17




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BROOKSTONE, INC.





CONSOLIDATED BALANCE SHEET


(In thousands, except share data)





August 3, 2002


February 2, 2002


August 4, 2001(Unaudited)





(Unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
16,096


$
28,928


$
2,391Receivables, net


4,722



8,170



4,421Merchandise inventories


56,547



55,629



61,969Deferred income taxes


9,290



3,447



8,775Other current assets


5,417



4,933



6,044Total current assets


92,072



101,107



83,600Deferred income taxes, net


4,536



4,536



3,662Property and equipment, net


40,985



45,058



44,592Intangible assets, net


4,588



4,812



5,086Other assets


1,884



1,592



1,866$
144,065


$
157,105


$
138,806LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Short-term borrowings

$



$



$
2,050Accounts payable


9,795



11,232



13,199Other current liabilities


18,907



22,569



14,309Total current liabilities


28,702



33,801



29,558Other long-term liabilities


12,656



13,246



11,954Long-term obligation under capital lease


2,203



2,273



2,360Commitments and contingenciesShareholders equity:Preferred stock, $0.001 par value:Authorized2,000,000 shares; issued and outstanding0 shares at August 3, 2002, February 2, 2002 and August
4, 2001Common stock, $0.001 par value: Authorized 50,000,000 shares; issued and outstanding8,514,597 shares at August 3, 2002, 8,369,720 shares at February 2, 2002 and 8,369,720 shares at August 4, 2001


8



8



8Additional paid-in capital


52,151



50,666



50,654Accumulated other comprehensive income


(447
)


(447
)


Retained earnings


48,839



57,605



44,319Treasury stock, at cost-3,616 shares at August 3, 2002, February 2, 2002 and August 4, 2001


(47
)


(47
)


(47
)Total shareholders equity


100,504



107,785



94,934$
144,065


$
157,105


$
138,806





Note:    The accompanying notes are an integral part of
these financial statements.




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BROOKSTONE, INC.





CONSOLIDATED STATEMENT OF OPERATIONS


(In thousands, except per share data)


(Unaudited)





Thirteen Weeks Ended


Twenty-Six Weeks EndedAugust 3, 2002


August 4, 2001


August 3, 2002


August 4, 2001Net sales

$
71,231


$
69,612


$
127,864


$
124,609Cost of sales


49,813



48,840



93,555



89,681Gross profit


21,418



20,772



34,309



34,928Selling, general and administrative expenses


25,367



25,044



48,465



47,692Gain on curtailment of retiree medical plan


(642
)






(642
)


Loss from operations


(3,307
)


(4,272
)


(13,514
)


(12,764
)Interest expense, net


318



210



625



149Loss before taxes


(3,625
)


(4,482
)


(14,139
)


(12,913
)Income tax benefit


(1,378
)


(1,721
)


(5,373
)


(4,959
)Net Loss

$
(2,247
)

$
(2,761
)

$
(8,766
)

$
(7,954
)Basic/ diluted loss per share:Net loss

$
(0.26
)

$
(0.33
)

$
(1.04
)

$
(0.95
)Weighted average shares outstandingbasic/diluted


8,500



8,357



8,454



8,346





Note:    The accompanying notes are an integral part of
these financial statements.




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BROOKSTONE, INC.





CONSOLIDATED STATEMENT OF CASH FLOWS


(In thousands)


(Unaudited)





Twenty-Six Weeks EndedAugust 3, 2002


August 4, 2001Cash flows from operating activities:Net loss

$
(8,766
)

$
(7,954
)Adjustments to reconcile net loss to net cash used by operating activities:Depreciation and amortization


6,008



5,288Gain on curtailment of retiree medical plan


(642
)


Amortization of debt issuance costs


120



92Deferred income taxes


(5,843
)


(5,142
)Related tax benefits on exercise of stock options


470



183Decrease in other assets






637Increase in other long-term liabilities


52



199Changes in working capital:Accounts receivable, net


3,448



3,056Merchandise inventories


(918
)


(6,910
)Other current assets


(276
)


(2,014
)Accounts payable


(1,437
)


(323
)Other current liabilities


(3,662
)


(14,657
)Net cash used for operating activities


(11,446
)


(27,545
)Cash flows from investing activities:Expenditures for property and equipment


(1,711
)


(7,651
)Net cash used for investing activities


(1,711
)


(7,651
)Cash flows from financing activities:Borrowings from revolving credit






2,050Payments for capitalized lease


(70
)


(54
)Payment for debt issuance costs


(620
)


Proceeds from exercise of stock options


1,015



194Net cash provided by financing activities


325



2,190Net decrease in cash and cash equivalents


(12,832
)


(33,006
)Cash and cash equivalents at beginning of period


28,928



35,397Cash and cash equivalents at end of period

$
16,096


$
2,391





Note:    The accompanying notes are an integral part of
these financial statements.




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BROOKSTONE, INC.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





1.  The results of the twenty-six
week period ended August 3, 2002 are not necessarily indicative of the results for the full fiscal year. The Companys business, like the business of retailers in general, is subject to seasonal influences. Historically, the Companys
fourth fiscal quarter, which includes the winter holiday selling season, has produced a disproportionate amount of the Companys net sales and substantially all of its income from operations. The Company expects that its business will continue
to be subject to such seasonal influences.





2.  As of June 11, 2002, the Board of Directors approved an
amendment to the eligibility requirement of the Retiree Health Plan (The Plan). This amendment restricts regular full time associates from continuing to accrue points towards eligibility if those associates have not accumulated a minimum
of 10 years of services as of December 31, 2002. As a result, during the quarter, the Company recorded a gain on curtailment of $642 thousand, which is stated separately on the Statement of Operations.





3.  The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted
accounting principles and practices consistently applied in the United States of America. In the opinion of the Company, these financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly
the financial position and the results of operations for the periods reported. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles have been
condensed or omitted. It is suggested that the accompanying unaudited consolidated financial statements be read in conjunction with the annual financial statements and notes thereto which may be found in the Companys Fiscal 2001 annual report.





4.  Total comprehensive income is composed of net income plus minimum pension liability. For the
twenty-six week period ended August 3, 2002 there was no change in the accumulated other comprehensive income balance of $447 thousand. As of August 4, 2001, there was no minimum pension liability.





5.  The exercise of stock options, which have been granted under the Companys stock option plans, gives rise to
compensation, which is includable in the taxable income of the optionees and deductible by the Company for tax purposes upon exercise. Such compensation reflects an increase in the fair market value of the Companys common stock subsequent to
the date of grant. For financial reporting purposes, the tax effect of this deduction is accounted for as a credit to additional paid-in capital rather than as a reduction of income tax expense. Such exercises resulted in a tax benefit of
approximately $470 thousand for the twenty-six week period ended August 3, 2002.





6.  In March, 2002,
the Company was served with a lawsuit brought in California superior court in Los Angeles as a class action on behalf of current and former managers and assistant managers of the Companys California stores, alleging that they were improperly
classified as exempt employees. The lawsuit seeks damages including overtime pay, restitution and attorneys fees. The Company has filed an answer denying the allegations and opposing class certification. At the present time, no class has been
certified, nor has there been any determination regarding exempt classification or the extent to which overtime pay may or may not be owed. The Company is vigorously investigating and defending this litigation, but because the case is in the very
early stages, the financial impact to the Company, if any, cannot be predicted at this time.





7.  Business conducted by the Company can be segmented into two distinct areas determined by the method of distribution channel. The retail segment is comprised of all retail stores including all temporary stores and
kiosks. Retail product distribution is conducted directly through the store location. The direct marketing segment is comprised of three catalog titles (Hard-to-Find Tools,Brookstone Catalog and Gardeners Eden), the Internet
site www.Brookstone.com and corporate sales. Direct marketing product distribution is conducted through the Companys direct marketing call center and distribution facility located in Mexico,




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Missouri or by the Companys vendors. Both segments of the Company sell similar products, although not all Company products are fully
available within both segments.





All costs directly attributable to the direct marketing segment are charged
accordingly while all remaining operating costs are charged to the retail segment. The Companys management does not review assets by segment.





The tables below disclose segment net sales and pre-tax loss for the thirteen-week and twenty-six week periods ended August 3, 2002 and August 4, 2001 (in thousands).





Thirteen Weeks:





Net Sales

Pre-tax LossAugust 3, 2002

August 4, 2001

August 3, 2002


August 4, 2001Reportable segment:Retail

$
58,598

$
58,059

$
(3,497
)

$
(3,493
)Direct marketing


12,633


11,553


190



(779
)Reconciling items:Interest expense








(393
)


(272
)Interest income








75



62Consolidated:

$
71,231

$
69,612

$
(3,625
)

$
(4,482
)





Twenty-six Weeks:





Net Sales

Pre-tax LossAugust 3, 2002

August 4, 2001

August 3, 2002


August 4, 2001Reportable segment:Retail

$
104,911

$
102,377

$
(13,349
)

$
(10,719
)Direct marketing


22,953


22,232


(165
)


(2,045
)Reconciling items:Interest expense








(811
)


(563
)Interest income








186



414Consolidated:

$
127,864

$
124,609

$
(14,139
)

$
(12,913
)




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8.  Basic and diluted earnings per share (EPS) were calculated for the
thirteen-week and twenty-six week periods ended August 3, 2002 and August 4, 2001 as follows:





Thirteen Weeks Ended


Twenty-Six Weeks EndedAugust 3, 2002


August 4, 2001


August 3, 2002


August 4, 2001Net loss

$
(2,247
)

$
(2,761
)

$
(8,766
)

$
(7,954
)Weighted average number of common shares outstanding


8,500



8,357



8,454



8,346Effect of dilutive securities:Stock options














Weighted average number of common shares as adjusted


8,500



8,357



8,454



8,346Net loss per sharebasic/diluted

$
(0.26
)

$
(0.33
)

$
(1.04
)

$
(0.95
)





For the thirteen-week and twenty-six week periods ended August 3,
2002, antidilutive shares of 155,260 and 148,224 respectively were excluded from the computations of diluted earnings per share. For the thirteen-week and twenty-six week periods ended August 4, 2001, antidilutive shares of 168,427 and 532,462
respectively were excluded from the computations of diluted earnings per share.





9.  Recent Accounting
Pronouncements:





In April 2002, the Financial Accounting Standards Board (FASB) issued
Statement No. 145 (SFAS 145), Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections, was issued. This statement provides guidance on the classification of gains and
losses from the extinguishments of debt and the accounting for certain specified lease transactions. The Company does not expect the provisions of SFAS 145 to have a material impact, if any, on the Companys consolidated financial statements.





In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or
Disposal Activities (SFAS No. 146). This statement provides guidance on the recognition and measurement of liabilities associated with disposal activities and is effective for the Company on January 1, 2003. The Company does
not expect the provisions of SFAS 146 to have a material impact, if any, on the Companys consolidated financial statements.




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BROOKSTONE, INC.





MANAGEMENTS DISCUSSION AND ANALYSIS OF


FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR


THE THIRTEEN-WEEK AND TWENTY-SIX WEEK PERIODS ENDED AUGUST 3, 2002





Results of Operations





For the thirteen-week and twenty-six week periods ended August 3,
2002, net sales increased 2.3% and 2.6% respectively over the comparable periods last year. The retail sales increases for the thirteen-week and twenty-six week periods of 0.9% and 2.5% respectively reflected the results of opening 20 new stores
subsequent to the second quarter of Fiscal 2001. The net sales from these new store openings were partially offset by the closing of three stores since the second quarter of Fiscal 2001 and a decrease in comparable store sales for the thirteen-week
and twenty-six week periods of 3.7% and 3.5% respectively. This decrease is principally related to weakness in travel-related products, and locations dependent on travel, such as airport and tourist locations, which experienced same-store sales
decreases approximately twice that of the Companys other stores. The total number of stores open at the end of the twenty-six week period ended August 3, 2002 was 248 versus 231 at the end of the comparable period in Fiscal 2001. Direct
marketing sales for the thirteen-week and twenty-six week periods ended August 3, 2002 increased 9.3% and 3.2% respectively over the comparable periods ended August 4, 2001 on relatively unchanged circulation for the quarter and a year-to-date
circulation decrease of 9.0% compared to the same periods last year.





For the thirteen-week and twenty-six week
periods ended August 3, 2002, gross profit as a percentage of net sales was 30.1% and 26.8% respectively versus 29.8% and 28.0% for the comparable periods last year. The increase in the gross profit percentage for the thirteen-week period was
primarily attributable to a decrease in net material costs, partially offset by an increase in occupancy costs relating to new stores and increased order postage expense. The twenty-six week decrease in gross profit as a percentage of net sales was
primarily attributable to increases in occupancy costs and order postage expense. By operating segment the retail channel experienced a 10 basis point decrease for the quarter while the direct segment realized an increase of 70 basis points. For the
twenty-six week period the retail channel gross profit decreased 160 basis points with the direct channel increasing 50 basis points.





Selling, general and administrative expenses as a percentage of net sales for the thirteen-week and twenty-six week periods ended August 3, 2002 were 35.6% and 37.9% respectively versus 36.0% and 38.3% respectively for the
comparable periods last year. The thirteen-week and twenty-six week period decreases in percentage were principally related to a decrease in catalog costs and good expense control. By operating segment the retail channel experienced a 100 basis
point increase for the quarter while the direct segment realized a decrease of 750 basis points. For the twenty-six week period the retail channel selling, general and administrative expenses increased 130 basis points with the direct channel
decreasing 800 basis points.





During the quarter ended August 3, 2002, the Company recorded a gain of $642
thousand related to the curtailment of the Companys retiree medical plan (see Note 2 of the Notes to Consolidated Financial Statements).





Net interest expense for the thirteen-week and twenty-six week periods ended August 3, 2002 was $318 thousand and $625 thousand respectively compared to $210 thousand and $149 thousand during the
comparable periods last year. The increase for the thirteen-week period was primarily the result of higher interest expense associated with The Amended and Restated Credit Agreement in Fiscal 2002. The increase for the twenty-six week period
resulted from higher interest expense as well as lower interest income earned on invested cash balances in Fiscal 2002 as compared to the same period in Fiscal 2001.





As a result of the foregoing, the Company reported a net loss of $2.2 million, or $0.26 per basic and diluted share (after reflecting a one time gain of $642 thousand or
$0.05 per basic and diluted share related to the curtailment of the Companys retiree medical plan), for the thirteen-week period ended August 3, 2002, as compared to a net loss of $2.8 million, or $0.33 per basic and diluted share, for the
comparable period last year. For the twenty-six week period ended August 3, 2002 the Company reported a net loss of $8.8 million, or $1.04 per basic and diluted share as compared to an $8.0 million net loss, or $0.95 per basic and diluted share, for
the comparable period last year.




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Financial Condition





For the twenty-six week period ended August 3, 2002, net cash used by operating activities totaled $11.4 million, primarily as a result of the net loss and the payment of
income taxes, partially offset by a decrease in accounts receivable. Cash used for investment activities during the first twenty-six weeks of Fiscal 2002, representing the purchase of property and equipment, amounted to $1.7 million. Cash from
financing activities during the twenty-six week period of Fiscal 2002 amounted to $325 thousand, resulting primarily from the exercise of stock options, partially offset by payment of debt issuance costs and capitalized lease payments.





For the twenty-six week period ended August 4, 2001, net cash used by operating activities totaled $27.5 million, primarily as
a result of the net loss, the payment of income taxes and the purchase of inventory, partially offset by a decrease in accounts receivable. Cash used for investment activities during the first twenty-six weeks of Fiscal 2001, representing the
purchase of property and equipment, amounted to $7.7 million. Cash from financing activities during the twenty-six week period of Fiscal 2001 amounted to $2.2 million, acquired primarily through borrowings under the Companys revolving credit
agreement and the exercise of stock options.





Receivables decreased 42.7% to $4.7 million at August 3, 2002
compared to $8.2 million at February 2, 2002 as a result of the collection of landlord allowances and decreases in debit memos and trade receivables. The accounts payable balance was $9.8 million at August 3, 2002 compared to $11.2 million at
February 2, 2001.





The Companys capital expenditures in the second quarter of Fiscal 2002 were principally
related to the remodeling of two stores, which were completed during the second quarter. Capital expenditures were also made during the second quarter of Fiscal 2002 that are related to new store openings and the remodeling of current stores which
are scheduled for completion during the third and fourth quarters of Fiscal 2002. The Company anticipates opening approximately 15 new stores, of which approximately half will be airport locations, and expects to remodel approximately six stores
during Fiscal 2002.





The Company maintains a revolving credit agreement to finance inventory purchases, which
historically peak in the third quarter in anticipation of the winter holiday selling season. At August 3, 2002, the Company had no outstanding borrowings under its Revolving Credit Agreement. At August 4, 2001 the Company had approximately $2.1
million in outstanding borrowings under its revolving credit agreement.





In March, 2002, the Company was served
with a lawsuit brought in California superior court in Los Angeles as a class action on behalf of current and former managers and assistant managers of the Companys California stores, alleging that they were improperly classified as exempt
employees. The lawsuit seeks damages including overtime pay, restitution and attorneys fees. The Company has filed an answer denying the allegations and opposing class certification. At the present time, no class has been certified, nor has there
been any determination regarding exempt classification or the extent to which overtime pay may or may not be owed. The Company is vigorously investigating and defending this litigation, but because the case is in the very early stages, the financial
impact to the Company, if any, cannot be predicted at this time.





The Company believes that available borrowings,
cash on hand and anticipated cash generated from operations will be sufficient to finance operations and planned retail store openings, remodelings and other capital requirements throughout Fiscal 2002.





Recent Accounting Pronouncements:





In April 2002, the Financial Accounting Standards Board (FASB) issued Statement No. 145 (SFAS 145), Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections, was issued. This statement provides guidance on the classification of gains and losses from the extinguishments of debt and the accounting for certain specified lease transactions. The Company does
not expect the provisions of SFAS 145 to have a material impact, if any, on the Companys consolidated financial statements.





In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS No. 146). This statement provides guidance on the recognition and measurement of
liabilities associated with disposal activities and is effective for the Company on January 1, 2003. The Company does not expect the provisions of SFAS 146 to have a material impact, if any, on the Companys consolidated financial statements.




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Outlook: Important Factors and Uncertainties





Statements in this quarterly report which are not historical facts, including statements about the Companys confidence or
expectations, plans for opening new stores, capital needs and liquidity and other statements about the Companys operational outlook, are forward-looking statements subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, risks of changing market conditions in the overall economy and the retail industry, consumer demand, the availability of
appropriate real estate locations and the ability to negotiate favorable lease terms in respect thereof, customer response to the Companys direct marketing initiatives, availability of products, availability of adequate transportation of such
products and other factors detailed from time to time in the Companys annual and other reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date thereof. The Company undertakes no obligations to publicly release any revisions to these forward-looking statements or reflect events or circumstances after the date hereof.





Item 4:Controls and Procedures





There were no significant changes in the Companys internal controls or in any
other factors that could significantly affect the Companys internal controls, and there were no corrective actions taken with regard to any significant deficiencies or material weaknesses in the Companys internal controls, subsequent to
the date of the most recent evaluation of the Companys internal controls by the principal executive officer and principal financial officer.




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PART II





OTHER INFORMATION





Item 1:Legal Proceedings





In March, 2002, the Company was served with a lawsuit brought in California superior
court in Los Angeles as a class action on behalf of current and former managers and assistant managers of the Companys California stores, alleging that they were improperly classified as exempt employees. The lawsuit seeks damages including
overtime pay, restitution and attorneys fees. The Company has filed an answer denying the allegations and opposing class certification. At the present time, no class has been certified, nor has there been any determination regarding exempt
classification or the extent to which overtime pay may or may not be owed. The Company is vigorously investigating and defending this litigation, but because the case is in the very early stages, the financial impact to the Company, if any, cannot
be predicted at this time.





Brookstone is also involved in various routine legal proceedings incidental to the
conduct of its business. The Company does not believe that any of these legal proceedings will have a material adverse effect on Brookstones financial condition or results of operations.





Item 2:Changes
in Securities





None





Item 3:Default Upon Senior Securities





None





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





A)  The 2002
Annual Meeting of Stockholders of the Company was held on June 11, 2002.





B)  The following persons were
elected Directors at the 2002 Annual Meeting for a one-year term expiring at the 2003 Annual Meeting of Stockholders.





For

WithheldMichael F. Anthony

6,910,630

842,752Mone Anathan, III

7,750,425

2,957Michael L. Glazer

7,751,451

1,931Kenneth E. Nisch

6,251,219

1,502,163Andrea M. Weiss

7,747,651

5,731





C)  The appointment of PricewaterhouseCoopers LLP as the
independent accountants to examine the financial statements of the Company and its subsidiaries for the fiscal year ending February 1, 2003 was ratified.





For

Against

Abstain7,645,328

108,054

0





Item 5:Other Information





None





Item 6:Exhibits and Reports on Form 8-K





A)  Reports on Form 8-K





No reports on Form 8-K were filed during the period for which this report is filed.




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SIGNATURES





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 thereunto duly authorized.





BROOKSTONE, INC. (Registrant)/s/    PHILIP W.
ROIZINPhilip W. Roizin Executive Vice President, Finance and Administration, Treasurer and Secretary (Principal Financial Officer and duly authorized to sign on behalf of registrant)





September 13, 2002




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CERTIFICATION PURSUANT TO


SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002





I, Michael F. Anthony, certify that:





1.  I have reviewed this quarterly report on Form 10-Q of Brookstone, Inc.;





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





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





/s/    MICHAEL F.
ANTHONYMichael F. Anthony Chairman, President and Chief Executive Officer





Date: September 13, 2002




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CERTIFICATION PURSUANT TO


SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002





I, Philip W. Roizin, certify that:





1.  I have reviewed this quarterly report on Form 10-Q of Brookstone, Inc.;





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





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





/s/    PHILIP W.
ROIZINPhilip W. Roizin Executive Vice President, Finance and Administration, Treasurer and Secretary and Chief Financial Officer





Date:    September 13, 2002




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CERTIFICATION PURSUANT TO


SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,


AS ADOPTED PURSUANT TO


SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002





Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, the undersigned, as Chief Executive Officer of Brookstone, Inc. (the Company), does hereby certify that to the undersigneds knowledge:





1)  the Companys Form 10-Q for the quarterly period ended August 3, 2002 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and





2)  the information contained in the
Companys Form 10-Q for the quarterly period ended August 3, 2002 fairly presents, in all material respects, the financial condition and results of operations of the Company.





/s/    MICHAEL F.
ANTHONYMichael F. Anthony Chairman, President and Chief Executive Officer








Dated:    September 13, 2002




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##### Table of Contents




CERTIFICATION PURSUANT TO


SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,


AS ADOPTED PURSUANT TO


SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002





Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, the undersigned, as Chief Financial Officer of Brookstone, Inc. (the Company), does hereby certify that to the undersigneds knowledge:





3)  the Companys Form 10-Q for the quarterly period ended August 3, 2002 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and





4)  the information contained in the
Companys Form 10-Q for the quarterly period ended August 3, 2002 fairly presents, in all material respects, the financial condition and results of operations of the Company.





/s/    PHILIP W.
ROIZINPhilip W. Roizin Executive Vice President, Finance and Administration, Treasurer and Secretary and Chief Financial Officer





Dated:    September 13, 2002




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