<PAGE>


     FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 14, 1999


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    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 JULY 31, 1999



                         Commission file number 0-21869

                                  DELIA*S INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

         DELAWARE                                       13-3914035
(STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

                   435 HUDSON STREET, NEW YORK, NEW YORK 10014
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                   (ZIP CODE)

                                 (212) 807-9060
              (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

Number of shares of Common Stock outstanding as of September 1, 1999: 14,893,472


<PAGE>


     STATEMENTS CONTAINED IN THIS DOCUMENT, INCLUDING, WITHOUT LIMITATION,
INFORMATION APPEARING UNDER "PART I ITEM 2 - MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," MAY BE
FORWARD-LOOKING STATEMENTS (WITHIN THE MEANING OF SECTION 27A OF THE AMENDED
SECURITIES ACT OF 1933 AND SECTION 21E OF THE AMENDED SECURITIES EXCHANGE ACT OF
1934). WHEN USED IN THIS DOCUMENT, THE WORDS "BELIEVE," "PLAN," "INTEND,"
"EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS, WHICH APPLY ONLY AS OF THE DATE OF THIS REPORT.
THESE STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN THE FORWARD-LOOKING
STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO,
GENERAL ECONOMIC CONDITIONS; CHANGES IN CONSUMER SPENDING PATTERNS; INCREASES IN
THE COST OF MATERIALS, PRINTING, PAPER, POSTAGE, SHIPPING AND LABOR; TIMING OF
CATALOG MAILINGS; CUSTOMER RESPONSE RATES; OPPORTUNITIES TO EXPAND AND THE
ABILITY TO INCREASE COMPARABLE STORE SALES; LEVELS OF COMPETITION; DIFFICULTIES
IN INTEGRATING ACQUISITIONS; THE ABILITY TO LOCATE AND OBTAIN ACCEPTABLE STORE
SITES AND LEASE TERMS OR RENEW EXISTING LEASES; THE ABILITY TO OBTAIN ADDITIONAL
CAPITAL TO FUND THE BUILD-OUT OF NEW STORES; ACCEPTANCE OF NEW RETAIL CONCEPTS;
ADVERSE WEATHER CONDITIONS, CHANGES IN WEATHER PATTERNS AND OTHER FACTORS
AFFECTING RETAIL STORES; AND OTHER FACTORS OUTSIDE OUR CONTROL. THESE FACTORS,
AND OTHER FACTORS THAT APPEAR IN THIS REPORT OR IN OUR OTHER SECURITIES AND
EXCHANGE COMMISSION FILINGS, INCLUDING OUR ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED JANUARY 31, 1999, COULD AFFECT OUR ACTUAL RESULTS AND COULD CAUSE OUR
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING
STATEMENTS MADE BY US OR ON OUR BEHALF.

     ALL REFERENCES IN THIS REPORT TO A PARTICULAR FISCAL YEAR PRIOR TO FISCAL
1999 REFER TO THE YEAR ENDED JANUARY 31 FOLLOWING THE PARTICULAR CALENDAR YEAR
(E.G., "FISCAL 1998" REFERS TO THE FISCAL YEAR ENDING JANUARY 31, 1999).
EFFECTIVE FEBRUARY 1, 1999, WE CHANGED OUR FISCAL YEAR TO END ON THE SATURDAY
CLOSEST TO JANUARY 31 (E.G., "FISCAL 1999" REFERS TO THE FISCAL YEAR ENDING
JANUARY 29, 2000).


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                        2

<PAGE>


                          DELIA*S INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                                                 JANUARY 31, 1999   JULY 31, 1999
                                                                                 ----------------   -------------
                                                                                       *             (UNAUDITED)
<S>                                                                                <C>              <C>
                                                      ASSETS
CURRENT ASSETS
     Cash and cash equivalents..................................................   $   10,981       $   29,423
     Short-term investments.....................................................           --           55,517
     Merchandise inventories ...................................................       21,232           29,850
     Prepaid expenses and other current assets .................................       11,352           16,883
                                                                                   ----------       ----------
         Total current assets ..................................................       43,565          131,673
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
     $3,191 at January 31, 1999 and $4,059 at July 31, 1999.....................       12,542           17,536
DEFERRED TAX ASSETS.............................................................           --            9,682
INTANGIBLE ASSETS...............................................................       25,308            6,255
OTHER ASSETS  ..................................................................          729            1,451
                                                                                   ----------       ----------
TOTAL ASSETS  .................................................................    $   82,144       $  166,597
                                                                                   ----------       ----------
                                                                                   ----------       ----------
                                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable, accrued expenses and other current liabilities ..........   $   18,085       $   23,746
     Accrued restructuring......................................................           --            2,662
                                                                                   ----------       ----------
         Total current liabilities..............................................       18,085           26,408

DEFERRED TAX LIABILITY..........................................................           --           28,991
OTHER LONG-TERM LIABILITIES ....................................................          452            1,507

MINORITY INTEREST...............................................................           --           26,832

STOCKHOLDERS' EQUITY
     Preferred stock, par value $.01 per share; Authorized - 1,000,000 shares;
         Issued and outstanding - none..........................................           --               --
     Common stock, par value $.01 per share; Authorized - 50,000,000 shares;
         Issued and outstanding - 14,185,425 and 14,890,022 shares at
         January 31, 1999 and July 31, 1999, respectively.......................          142              149
     Additional paid-in capital.................................................       54,133           72,340
     Retained earnings..........................................................        9,332           28,104
     Common stock in treasury - 551,046 shares at July 31, 1999.................           --          (17,734)
                                                                                   ----------       ----------
         Total stockholders' equity.............................................       63,607           82,859
                                                                                   ----------       ----------
</TABLE>

                                       3

<PAGE>


<TABLE>
<S>                                                                                <C>              <C>
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .....................................   $   82,144       $  166,597
                                                                                   ----------       ----------
                                                                                   ----------       ----------
</TABLE>

* Condensed from audited financial statements


    See Notes to Unaudited Condensed Consolidated Financial Statements

                                       4

<PAGE>


                          DELIA*S INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                              THREE MONTHS         THIRTEEN WEEKS
                                                                                  ENDED                 ENDED
                                                                              JULY 31, 1998         JULY 31, 1999
                                                                              -------------        ---------------
                                                                                          (UNAUDITED)
<S>                                                                              <C>                 <C>
NET SALES     .................................................................  $ 26,451            $  33,375
COST OF SALES ..................................................................   13,712               20,450
                                                                                 --------            ---------
GROSS PROFIT  ..................................................................   12,739               12,925
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES....................................   13,499               23,908
INTEREST AND OTHER INCOME, NET..................................................     (300)              (1,027)

MINORITY INTEREST...............................................................       --                 (493)
                                                                                 --------            ---------

LOSS BEFORE INCOME TAXES........................................................     (460)              (9,463)
BENEFIT FOR INCOME TAXES........................................................     (317)              (3,399)
                                                                                 --------            ---------

NET LOSS      .................................................................. $   (143)           $  (6,064)
                                                                                 --------            ---------
                                                                                 --------            ---------
BASIC AND DILUTED NET LOSS PER SHARE............................................ $  (0.01)           $   (0.42)
                                                                                 --------            ---------
                                                                                 --------            ---------
SHARES USED IN THE CALCULATION OF BASIC AND DILUTED
     NET LOSS PER SHARE.........................................................   13,498               14,330
                                                                                 --------            ---------
                                                                                 --------            ---------
</TABLE>
<TABLE>
<CAPTION>

                                                                               SIX MONTHS         TWENTY-SIX WEEKS
                                                                                  ENDED                 ENDED
                                                                              JULY 31, 1998         JULY 31, 1999
                                                                              -------------       ----------------
                                                                                          (UNAUDITED)
<S>                                                                              <C>                 <C>
NET SALES     .................................................................  $ 57,645            $  75,187
COST OF SALES ..................................................................   27,935               43,473
                                                                                 --------            ---------
GROSS PROFIT  ..................................................................   29,710               31,714
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES....................................   27,591               47,658
RESTRUCTURING CHARGE............................................................       --               22,907

GAIN ON SUBSIDIARY INITIAL PUBLIC OFFERING......................................       --              (70,091)

INTEREST AND OTHER INCOME, NET..................................................     (641)              (1,167)

MINORITY INTEREST...............................................................       --                 (485)
                                                                                 --------            ---------

INCOME BEFORE INCOME TAXES......................................................    2,760               32,892
PROVISION FOR INCOME TAXES......................................................      903               14,120
                                                                                 --------            ---------

NET INCOME    .................................................................  $ 1,857             $  18,772
                                                                                 --------            ---------
                                                                                 --------            ---------
BASIC NET INCOME PER SHARE...................................................... $   0.14            $    1.31
                                                                                 --------            ---------
                                                                                 --------            ---------
DILUTED NET INCOME PER SHARE.................................................... $   0.14            $    1.19
                                                                                 --------            ---------
                                                                                 --------            ---------
SHARES USED IN THE CALCULATION OF BASIC NET
     INCOME PER SHARE...........................................................   13,410               14,280
                                                                                 --------            ---------
                                                                                 --------            ---------
SHARES USED IN THE CALCULATION OF DILUTED NET
     INCOME PER SHARE...........................................................   13,618               15,790
                                                                                 --------            ---------
                                                                                 --------            ---------
</TABLE>


     See Notes to Unaudited Condensed Consolidated Financial Statements


                                       5

<PAGE>

                          DELIA*S INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  SIX MONTHS       TWENTY-SIX WEEKS
                                                                                      ENDED            ENDED
                                                                                  JULY 31, 1998     JULY 31, 1999
                                                                                  -------------    -----------------
                                                                                            (UNAUDITED)
<S>                                                                                 <C>              <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
     Net income.................................................................    $   1,857        $  18,772
     Adjustments to reconcile net income to net cash used in operating activities:
       Depreciation and amortization............................................          762            1,911
       Gain on subsidiary initial public offering...............................           --          (70,091)
       Restructuring charge (includes reserve for inventory liquidation)........           --           23,407
       Deferred taxes...........................................................           --           19,309
       Minority interest........................................................           --             (485)
       Amortization of investments..............................................          136             (139)
       Compensation expense related to issuance of restricted stock and
          stock appreciation rights.............................................           44               --
       Changes in operating assets and liabilities:
              Merchandise inventories...........................................       (6,753)          (9,118)
              Prepaid expenses and other current assets.........................       (4,650)          (5,642)
              Other assets......................................................          (24)            (241)
              Current liabilities ..............................................       (2,714)           5,272
              Deferred credits..................................................           55              120
                                                                                    ---------        ---------
     Net cash used in operating activities......................................      (11,287)         (16,925)
                                                                                    ---------        ---------
                                                                                    ---------        ---------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
     Acquisition of businesses..................................................     (10,303)               --
     Capital expenditures.......................................................       (2,257)          (9,186)
     Purchases of available-for-sale investment securities......................      (43,281)              --
     Purchases of held-to-maturity investment securities........................           --          (55,378)
     Proceeds from the maturity of held-to-maturity investment securities.......       30,024               --
     Proceeds from the sale of available-for-sale investment securities.........       37,209               --
                                                                                    ---------        ---------
Net cash provided by (used in) investing activities.............................       11,392          (64,564)
                                                                                    ---------        ---------
                                                                                    ---------        ---------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
     Net proceeds from issuance of subsidiary common stock......................           --           97,749
     Proceeds from long-term debt and capital leases............................           --            1,169
     Exercise of 7,375 and 187,335 stock options, respectively..................           82            1,088
     Principal payments of long-term debt and capital lease obligations.........           (69)            (75)
                                                                                    ---------        ---------
Net cash provided by financing activities.......................................           13           99,931
                                                                                    ---------        ---------
                                                                                    ---------        ---------
INCREASE IN CASH & CASH EQUIVALENTS.............................................          118           18,442

CASH & CASH EQUIVALENTS--BEGINNING OF PERIOD.....................................        4,485           10,981
                                                                                    ---------        ---------
CASH & CASH EQUIVALENTS--END OF PERIOD...........................................    $   4,603        $  29,423
                                                                                    ---------        ---------
                                                                                    ---------        ---------
</TABLE>

                                       6

<PAGE>


SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES: Issuance
of 812,501 shares of common stock in connection with the July 1998 Screeem!
acquisition.

Purchase price adjustment in June 1999 attributable to the SCREEEM!
acquisition, canceling 33,784 shares of common stock.

       See Notes to Unaudited Condensed Consolidated Financial Statements




                                       7
<PAGE>


                          DELIA*S INC. AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.    BUSINESS

     dELiA*s Inc., through its catalogs, retail stores and Web sites, is a
leading marketer of casual apparel, accessories, soccer merchandise and home
furnishings to young men and young women between the ages of 10 and 24, an age
group known as "Generation Y."

     We are subject to seasonal fluctuations in our merchandise sales and
results of operations. We expect our net sales and operating results generally
to be lower in the first and second quarters than in the third and fourth
quarters (which include the majority of the back-to-school season and the
holiday season) of each fiscal year.

     On April 14, 1999, we completed an initial public offering of approximately
4.8 million shares of class A common stock of iTurf Inc., our Internet-focused
subsidiary. Immediately following the offering, we controlled approximately 72%
of the value and 94% of the vote of iTurf. Accordingly, the public ownership of
iTurf is reflected as minority interest in the accompanying financial
statements. iTurf used $17.7 million of the total $97.8 million in net offering
proceeds to purchase 551,046 shares of dELiA*s common stock from dELiA*s, which
we have treated as treasury stock in consolidation. As a result of the offering,
we recognized a pre-tax gain of approximately $70 million. On September 1, 1999,
iTurf issued 1,586,996 new shares of its Class A common stock in connection with
its acquisition of T@ponline.com, Inc. ("Taponline"). As a result of this
transaction, our interest in iTurf was reduced to 92% of vote and 66% of value.
See Note 6, "Subsequent Events", for a description of the Taponline transaction.

     Effective February 1, 1999, we changed our fiscal year from the year ending
January 31 to the 52 weeks ending on the Saturday closest to January 31.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

     PRINCIPLES OF CONSOLIDATION--The condensed consolidated financial
statements include the accounts of dELiA*s Inc. and subsidiaries, all of which,
except iTurf, are wholly owned. The accounts of iTurf are included in the
consolidated financial statements while the public ownership of iTurf is
reflected as minority interest on the balance sheet and income statement. All
significant intercompany balances and transactions have been eliminated in
consolidation.

     UNAUDITED INTERIM FINANCIAL STATEMENTS--The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with the requirements for Form 10-Q and in accordance with generally accepted
accounting principles for interim financial reporting. In the opinion of
management, the accompanying condensed consolidated financial statements are
presented on a basis consistent with the audited consolidated financial
statements and reflect all adjustments (consisting of normal recurring items)
necessary for a fair presentation of results for the interim periods presented.
The financial statements and footnote disclosures should be read in conjunction
with our January 31, 1999 audited consolidated financial statements and the
notes thereto, which are included in our annual report on Form 10-K for the year
ended January 31, 1999, which was filed under the Securities Exchange Act of
1934. Results for the interim periods are not necessarily indicative of the
results to be expected for the year.

3.    SEGMENT INFORMATION


                                       8

<PAGE>


     dELiA*s determines operating segments in accordance with Statement of
Financial Accounting Standards No. 131. Our reportable segments are generally
defined by their method of distribution; different segments may offer similar
products to similar customers, but are managed separately because of their
distribution methods. Commencing in fiscal 1999, dELiA*s has three reportable
segments: catalog, retail and iTurf. Each of these segments earns revenues
primarily from the sale of apparel, accessories and soccer equipment to
consumers. The catalog segment takes phone and mail orders from our customers
and mails merchandise directly to those customers. Our retail stores display
merchandise in mall and strip mall stores and sell directly to customers who
visit those locations. iTurf sells merchandise through our various Web sites and
also recognizes advertising, subscription and licensing revenues. Sales outside
of the United States were insignificant.

     The Company evaluates performance and allocates resources primarily based
on profit and loss after expense allocations for shared resources but before
unusual items, income taxes, interest and other income and minority interest.
There are no material differences between accounting policies used by the
reportable segments in preparation of this information and those described in
the summary of significant accounting policies in this report and in our annual
report on Form 10-K for the year ended January 31, 1999.

     In connection with the iTurf initial public offering in April 1999, dELiA*s
and iTurf entered into intercompany agreements that govern the transactions
between iTurf and the other segments. Intercompany profit or loss generated by
such agreements is eliminated in consolidation. For transactions between the
other segments, and for transactions involving iTurf prior to its initial public
offering, inter-segment product sales are recorded at cost and shared costs are
allocated on a basis believed by management to be reasonable.

     The segment disclosure for fiscal 1998 has been restated to reflect the
operating segments as defined for fiscal 1999.

<TABLE>
<CAPTION>
(in thousands)

THREE MONTHS ENDED JULY 31, 1998                   CATALOG           RETAIL            ITURF              TOTAL
                                                   -------           ------            -----              -----
<S>                                                <C>               <C>              <C>               <C>
Revenues from external customers                   $  20,489         $   5,202        $    760          $  26,451
Operating profit (loss)                                 (876)              140             (24)              (760)


THIRTEEN WEEKS ENDED JULY 31, 1999                  CATALOG           RETAIL            ITURF              TOTAL
                                                    -------           ------            -----              -----
Revenues from external customers                   $  19,915         $  10,508        $   2,952         $  33,375
Operating loss                                        (4,887)           (3,345)          (2,751)          (10,983)

SIX MONTHS ENDED JULY 31, 1998                      CATALOG           RETAIL            ITURF             TOTAL
                                                    -------           ------            -----             -----
Revenues from external customers                   $ 48,969          $ 7,847          $     829         $ 57,645
Operating profit (loss)                               2,128               90                (99)           2,119

Property & equipment, net                             6,384            3,421                212           10,017

TWENTY-SIX WEEKS ENDED JULY 31, 1999                CATALOG           RETAIL            ITURF             TOTAL
                                                    -------           ------            -----             -----
Revenues from external customers                   $ 49,764          $ 19,856         $ 5,567           $ 75,187
Operating loss                                       (6,154)           (6,569)         (3,221)           (15,944)
Property & equipment, net                             8,017             7,651           1,868             17,536
</TABLE>
<TABLE>
<CAPTION>


                                                                                              SIX         TWENTY-SIX
                                                         THREE MONTHS   THIRTEEN WEEKS       MONTHS          WEEKS
                                                             ENDED          ENDED            ENDED           ENDED
                                                         JULY 31, 1998  JULY 31, 1999    JULY 31, 1998  JULY 31, 1999
                                                         -------------  -------------   --------------  -------------
<S>                                                        <C>             <C>            <C>            <C>
</TABLE>

                                       9

<PAGE>


<TABLE>
<S>                                                        <C>             <C>            <C>            <C>
Operating profit (loss) for reportable segments            $      (760)    $   (10,983)   $     2,119    $   (15,944)
Restructuring charges                                               --              --             --        (22,907)
Gain on subsidiary initial public offering                          --              --             --         70,091
Interest and other income, net                                     300           1,027            641          1,167
Minority interest                                                   --             493             --            485
                                                           -----------     -----------    -----------    -----------
Total income before taxes                                  $      (460)    $    (9,463)   $     2,760    $    32,892
                                                           -----------     -----------    -----------    -----------
                                                           -----------     -----------    -----------    -----------
Property and equipment for reportable segments                                            $    10,017    $    17,536
Other assets                                                                                   67,330        149,061
                                                                                          -----------    -----------
Total consolidated assets                                                                 $    77,347    $   166,597
                                                                                          ===========    ===========
</TABLE>

4.    RESTRUCTURING CHARGE

     During the first quarter of fiscal 1999, we recorded a charge of
approximately $23.4 million in connection with our restructuring plan to exit
our Screeem! and Jean Country retail operations. The charge is comprised of the
following:

-    $18.0 million for the write-off of the remaining unamortized balance of
     goodwill and other intangibles relating to our acquisition of the Screeem!
     and Jean Country retail operations;

-    $4.2 million for the shut-down or conversion of certain retail stores to
     the dELiA*s retail concept with the related adjustment for assets that will
     no longer be used;

-    $0.7 million for the elimination of jobs at the Screeem! corporate office
     and the store locations to be closed, resulting in costs incurred to sever
     employees; and

-    $0.5 million for the liquidation of inventory carried at stores to be
     converted or closed (reflected in cost of sales).

     We expect the restructuring plans associated with these costs to be
substantially completed by the end of the first quarter of fiscal 2000.

     The total charge of $23.4 million includes $22.9 million that is included
in operating expenses as a restructuring charge and $500,000 included as cost of
sales. In addition, as part of our acquisition of the Screeem! and Jean Country
retail operations, we agreed that if the mean of the intraday high and low bid
prices for the Company's common stock for the 20 consecutive trading days
immediately preceding January 10, 2000 (the "18-Month Price") is less than
$18.00, we will issue to the sellers that number of additional shares of dELiA*s
common stock that is equal to (i) the excess of (x) the product of 174,550
shares multiplied by $18.00 over (y) the product of 174,550 shares multiplied by
the greater of the 18-Month Price or $10.00 divided by (ii) the 18-Month Price.
If we are required to issue additional shares, the value of those shares will
result in a charge to earnings in the fourth quarter of fiscal 1999.

     During the second quarter, we have not made any significant changes in our
estimate of the above restructuring charge, nor have we yet incurred any of the
estimated store shut-down/ conversion or job elimination expenses. We expect
such costs to be incurred primarily in the fourth quarter of fiscal 1999 and
first quarter of fiscal 2000. As our plans progress, we anticipate that we may
need to record additional losses on inventory liquidation and other
restructuring-related costs, as well as store operating losses during the
transition period.

5.    COMMITMENTS AND CONTINGENCIES

                                       10

<PAGE>

     In May 1999, iTurf entered into a strategic marketing alliance with America
Online, Inc. Over the two-year term of the agreement, iTurf has agreed to pay
America Online a total of approximately $8,100,000.

     In June 1999, two separate purported class action complaints were filed
against dELiA*s, certain of our officers and directors, and a former officer of
one of our subsidiaries, alleging violations of the federal securities laws. The
class periods run from May 21, 1998 through June 17, 1998 and January 20, 1998
through September 10, 1998, respectively. On August 3, 1999, the plaintiffs in
both suits filed a motion to consolidate the suits. We intend to vigorously
defend against the allegations. Based upon information presently known to
management, we do not believe that the ultimate resolution of these lawsuits
will have a material adverse effect on our financial condition or results of
operations.

6.    SUBSEQUENT EVENTS

     On August 6, 1999, we purchased for $6.2 million an approximately 415,000
square foot distribution facility in Hanover, Pennsylvania, of which we were
leasing approximately 360,000 square feet. We borrowed $5.3 million from
Allfirst Bank in the form of a mortgage loan on the property, to pay for $4.9
million of the purchase price and $400,000 of planned capital improvements. We
are subject to certain covenants under the loan agreement, including a covenant
to maintain a fixed charge coverage ratio. The loan includes a variable
LIBOR-based interest rate. On August 10, 1999 we entered into an interest-rate
swap agreement with Allfirst Bank under which we effectively converted the
mortgage to a fixed-rate loan with an interest rate of approximately 8.78%.

     In connection with the acquisition of the distribution facility, our
environmental consultant performed an assessment of the facility. As a result of
their assessment, the seller of the property performed certain soil remediation
and created a groundwater remediation plan, each relating to the presence of
underground fuel oil, waste oil and gasoline tanks located on the property and
subsequently removed by the seller. The Pennsylvania Department of Environmental
Protection has released the seller from liability with respect to soil
contamination and has approved the ground water remediation plan. The seller has
set funds aside in escrow to cover up to $250,000 in ground water remediation
costs. We do not believe that the environmental conditions at the facility will
have a material adverse effect on our consolidated financial condition, results
of operations or cash flows.

     On September 1, 1999, iTurf acquired Taponline pursuant to an Agreement and
Plan of Merger dated August 10, 1999 by and among iTurf, iTurf Acquisition
Corporation, Taponline, the shareholders of Taponline and MarketSource
Corporation ("MarketSource"). As a result of the transaction, Taponline became a
wholly owned subsidiary of iTurf. The aggregate consideration paid consisted of
1,586,996 newly issued shares of iTurf Class A common stock, which reduced our
ownership of iTurf to 92% of vote and 66% of value. The transaction, which was
structured as a tax-free reorganization, will be accounted for under the
purchase method of accounting. In connection with the transaction, MarketSource,
which is owned by certain of the shareholders of Taponline, including Martin
Levine, who was recently elected as a member of iTurf's board of directors,
entered into an arrangement to purchase advertising and other inventory on
iTurf's network of sites for resale to MarketSource's clients. Separately, iTurf
has agreed to enter into a marketing alliance with MarketSource to promote
iTurf's network of sites through MarketSource's offline marketing channels.
iTurf committed to purchasing approximately $6.5 million in promotional
opportunities through these channels over the next three years.

                                       11

<PAGE>


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

     THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH
OUR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED
ELSEWHERE IN THIS REPORT. THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING
STATEMENTS THAT REFLECT DELIA*S PLANS, ESTIMATES AND BELIEFS. OUR ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED BELOW AND ELSEWHERE IN THIS REPORT AND THOSE
DISCUSSED IN OUR OTHER SECURITIES AND EXCHANGE COMMISSION FILINGS, INCLUDING OUR
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JANUARY 31, 1999.

OVERVIEW

     We are a teen-focused marketer of casual apparel, accessories, cosmetics,
home furnishings and soccer merchandise. Through the dELiA*s catalog and Web
site, which target girls and young women between the ages of 10 and 24 (an age
group known as "Generation Y"), we believe we are the leading direct marketer of
casual apparel, related accessories and cosmetics focused on Generation Y. In
February 1999, we opened our first full-priced dELiA*s store in New York. We
opened four additional dELiA*s stores during the second quarter of fiscal 1999
and five more stores in August and September, bringing the total number of
full-price dELiA*s brand stores currently in operation to ten. We plan to
continue the expansion of this concept through new store openings and the
conversion of certain of our Screeem! and Jean Country stores. Through our TSI
Soccer catalog, retail stores and Web site, we are a leading direct marketer and
retailer of specialty soccer and other athletic merchandise to Generation Y boys
and girls. Our other catalog titles include Contents, which offers home
furnishings to Generation Y, and Droog, which offers apparel and accessories to
Generation Y boys and young men. We also target pre-teen girls with our
Storybook Heirlooms and dot dot dash catalogs.

     On April 14, 1999, we completed an initial public offering of approximately
4.8 million shares of Class A common stock of iTurf Inc., our Internet-focused
subsidiary. As a result of that offering, we controlled approximately 72% of the
value and 94% of the vote of iTurf through July 31, 1999. Accordingly, the
public ownership of iTurf is reflected as minority interest in the accompanying
financial statements. iTurf used $17.7 million of the total $97.8 million in net
offering proceeds to purchase 551,046 shares of dELiA*s common stock from
dELiA*s, which we have treated as treasury stock in consolidation. As a result
of the offering, we recognized a gain of approximately $70 million before taxes
($41 million, or $2.57 per share on a diluted basis, after taxes).

     On September 1, 1999, iTurf acquired Taponline in exchange for 1,586,996
newly issued shares of iTurf Class A common stock. As a result of that
transaction, our ownership of iTurf decreased to approximately 66% of value and
92% of vote.

     dELiA*s maintains its corporate and Internet headquarters and a
telemarketing and customer service group in New York, New York, additional
telemarketing and corporate facilities in Durham, North Carolina and a
fulfillment facility for processing merchandise in Hanover, Pennsylvania. The
Storybook Heirlooms business is based in the San Francisco, California area.

     RISKS. As our revenue base grows and we further penetrate our target
market, we will probably not be able to sustain the levels of percentage annual
growth in net sales and operating income experienced historically. In addition,
as we have increased the number of catalogs we mail, we have observed that new
customers respond at lower rates than our existing customers have historically
responded. We have also observed that when customers receive multiple editions
of catalogs within the same fiscal quarter, aggregate response rates have
declined. In addition, increases in the cost of materials, printing, paper,
postage, shipping and labor may adversely affect the profitability of our
catalog business.


                                       12

<PAGE>


     A variety of factors affects our comparable store sales, including, among
others, fashion trends, the general retail sales environment, our ability to
efficiently source and distribute products, changes in our merchandise mix and
our ability to execute our business strategy efficiently. Comparable store sales
may fluctuate significantly as we roll out new retail concepts and enter new
markets. In addition, our ability to expand our retail business may be limited
by our ability to locate and obtain acceptable store sites and lease terms or
renew existing leases.

     In addition, our plans to expand both retail and catalog operations depend
on obtaining additional capital and recruiting experienced managers. There can
be no assurance that the company will be able to raise capital or recruit
managers as it grows.

     Our business generally depends on our ability to anticipate the frequently
changing fashion tastes of our customers and to offer merchandise that appeals
to their preferences on a timely and affordable basis. If we misjudge our
merchandise selection, our image with our customers could be materially
adversely affected.

     We believe that the continued growth of our internet segment will depend in
large part on our ability to increase awareness of our brand names, to provide
our customers with superior internet community and e-commerce experiences, and
to continue to enhance our systems and technology to support increased traffic
to our web sites. Accordingly, we intend to maintain a high level of marketing
and promotional expenditures and to invest heavily to develop our Web sites,
technology and operating infrastructure. Slower revenue growth than we
anticipate or operating expenses that exceed our expectations could have a
material adverse effect on our business.

RESTRUCTURING CHARGE

     During the first quarter of fiscal 1999, we recorded a charge of
approximately $23.4 million in connection with our restructuring plan to exit
our Screeem! and Jean Country retail operations. The charge is comprised of the
following:

-    $18.0 million for the write-off of the remaining unamortized balance of
     goodwill and other intangibles relating to our acquisition of the Screeem!
     and Jean Country retail operations;

-    $4.2 million for the shut-down or conversion of certain retail stores to
     the dELiA*s retail concept with the related adjustment for assets that will
     no longer be used;

-    $0.7 million for the elimination of jobs at the Screeem! corporate office
     and the store locations to be closed, resulting in costs incurred to sever
     employees; and

-    $0.5 million for the liquidation of inventory carried at stores to be
     converted or closed (reflected in cost of sales).

     We expect the restructuring plans associated with these costs to be
substantially completed by the end of the first quarter of fiscal 2000.

     The total charge of $23.4 million includes $22.9 million that is included
in operating expenses as a restructuring charge and $500,000 included as cost of
sales. In addition, as part of our acquisition of the Screeem! and Jean Country
retail operations, we agreed that if the mean of the intra-day high and low bid
prices for the Company's common stock for the 20 consecutive trading days
immediately preceding January 10, 2000 (the "18-Month Price") is less than
$18.00, we will issue to the sellers that number of additional shares of dELiA*s
common stock that is equal to (i) the excess of (x) the product of 174,550
shares multiplied by $18.00 over (y) the product of 174,550 shares multiplied by
the greater of the 18-Month Price or $10.00 divided by (ii) the 18-Month Price.
If we are required to issue additional shares, the value of those shares will
result in a charge to earnings in the fourth quarter of fiscal 1999.

                                       13

<PAGE>


     During the second quarter, we have not made any significant changes in our
estimate of the above restructuring charge, nor have we yet incurred any of the
estimated store shut-down/ conversion or job elimination expenses. We expect
such costs to be incurred primarily in the fourth quarter of fiscal 1999 and
first quarter of fiscal 2000. As our plans progress, we anticipate that we may
need to record higher than anticipated losses on inventory liquidation and other
restructuring-related costs, as well as additional store operating losses during
the transition period.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, the percentage
relationship of certain items from our statement of operations to net sales. Any
trends reflected by the following table may not be indicative of future results.

<TABLE>
<CAPTION>
                                                      THREE MONTHS  THIRTEEN WEEKS     SIX MONTHS    TWENTY -SIX WEEKS
                                                          ENDED          ENDED            ENDED            ENDED
                                                      JULY 31, 1998  JULY 31, 1999    JULY 31, 1998    JULY 31, 1999
                                                      -------------  -------------    -------------    -------------
<S>                                                      <C>            <C>              <C>              <C>
Net sales                                                100.0%         100.0%           100.0%           100.0%
Cost of sales                                             51.8           61.3             48.4             57.8
                                                        ------          -----           ------            -----
Gross profit                                              48.2           38.7             51.6             42.2
Selling, general and administrative expenses              51.0           71.6             47.9             63.4
Restructuring charge                                       --             --               --              30.5
Gain on subsidiary initial public offering                 --             --               --             (93.2)
Interest and other income, net                            (1.1)          (3.1)            (1.1)            (1.5)
Minority interest                                          --            (1.5)             --              (0.7)
                                                        ------          ------          ------            ------
Income (loss) before income taxes                         (1.7)         (28.3)             4.8             43.7
Provision (benefit) for income taxes                      (1.2)         (10.2)             1.6             18.8
                                                        -------         ------          ------            -----
Net income (loss)                                         (0.5)%        (18.1)%            3.2%            24.9%
                                                        -------         ------          ------            -----
                                                        -------         ------          ------            -----
</TABLE>

COMPARISON OF THIRTEEN WEEKS ENDED JULY 31, 1999 AND THREE MONTHS ENDED
JULY 31, 1998

     NET SALES. Net sales increased approximately $6.9 million, or 26% to $33.4
million in the second quarter of fiscal 1999 from $26.5 million in the second
quarter of fiscal 1998. The increase in sales is primarily due to increased
revenues from our retail segment as a result of our acquisition of the Screeem!
and Jean Country business in July 1998 and introduction of dELiA*s brand
full-price stores beginning in February 1999, as well as from the growth of our
Internet segment. The increase was partially offset by a decline in sales from
our catalog segment. Lower circulation, reduced response rates and the migration
of sales to our internet sites reduced catalog sales despite the introduction of
our Storybook Heirlooms catalog in January 1999.

     GROSS MARGIN. Gross margin decreased to 38.7% of net sales in the second
quarter of fiscal 1999 from 48.2% in the second quarter of fiscal 1998. The
decrease is primarily due to a higher proportion of discounted catalog sales,
significant markdowns on merchandise sold through our Screeem! stores and lower
pricing on selected catalog merchandise. We expect gross margins to continue to
be affected by discounted Screeem! sales through the remainder of fiscal 1999.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased approximately $10.4 million to $23.9 million
in the second quarter of fiscal 1999, or 71.6% of net sales, from $13.5 million
in the second quarter of fiscal 1998, or 51% of net sales. Selling, general and
administrative expenses increased primarily as a result of spending on corporate
infrastructure and marketing to support retail and Internet growth and to
improve the efficiency of our distribution processes, as well as additional
expenses related to the introduction of new catalogs. We expect such
expenditures to continue and selling, general and administrative expenses to
remain high throughout fiscal 1999.

                                       14

<PAGE>


COMPARISON OF TWENTY-SIX WEEKS ENDED JULY 31, 1999 AND SIX MONTHS ENDED
JULY 31, 1998

     NET SALES. Net sales increased approximately $17.6 million, or 30.6%, to
$75.2 million in the first half of fiscal 1999 from $57.6 million in the first
half of fiscal 1998. The increase in sales is primarily due to increased
revenues from our retail segment as a result of our acquisition of the Screeem!
and Jean Country business in July 1998 and the introduction of dELiA*s brand
full-price stores beginning in February 1999, as well as from the growth of our
Internet segment. The increase was partially offset by a decline in sales from
our catalog segment. Lower circulation, reduced response rates, lower fill rates
and the migration of sales to our internet sites reduced catalog sales, despite
the introduction of our Storybook Heirlooms catalog in January 1999.

     GROSS MARGIN. Gross margin excluding a $500,000 charge related to the first
quarter 1999 Screeem! restructuring decreased to 42.9% of net sales in the first
half of fiscal 1999 from 51.6% in the first half of fiscal 1998. The decrease is
primarily due to a higher proportion of discounted catalog sales, significant
markdowns on merchandise sold through our Screeem! stores, lower pricing on
selected catalog merchandise and, in the first quarter of fiscal 1999, higher
freight costs resulting from lean inventory levels. We expect gross margins to
continue to be affected by discounted Screeem! sales through the remainder of
fiscal 1999.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased approximately $20.1 million to $47.7 million
in the first half of fiscal 1999, or 63.4% of net sales, from $27.6 million in
the first half of fiscal 1998, or 47.9% of net sales. Selling, general and
administrative expenses increased primarily as a result of spending on corporate
infrastructure and marketing to support retail and Internet growth and to
improve the efficiency of our distribution processes, as well as additional
catalog expenses related to the introduction of new catalogs. We expect such
expenditures to continue and selling, general and administrative expenses to
remain high throughout fiscal 1999.

     RESTRUCTURING CHARGE. During the first quarter of fiscal 1999, we recorded
a charge of approximately $23.4 million in connection with our restructuring
plan to close our Screeem! and Jean Country retail operations. This charge
includes approximately $500,000 related to inventory and recorded as cost of
sales. As our plans progress, we anticipate that we may need to record
additional losses on inventory liquidation and other restructuring-related costs
as well as additional store operating losses during the transition period.

     GAIN ON SUBSIDIARY INITIAL PUBLIC OFFERING. On April 14, 1999, we completed
an initial public offering of approximately 4.8 million shares of class A common
stock of iTurf Inc., our publicly-traded Internet-focused subsidiary. As a
result of the transaction, we recognized a one-time gain of approximately $70.1
million before taxes.

SELECTED QUARTERLY RESULTS OF OPERATIONS

     The following table sets forth certain unaudited statement of operations
data for the six fiscal quarters ended July 31, 1999, as well as such data
expressed as a percentage of total net sales for the periods indicated. This
data has been derived from our unaudited financial statements that, in the
opinion of management, include all adjustments (consisting only of normal
recurring adjustments) necessary for fair presentation of such information when
read in conjunction with our annual audited financial statements and notes
thereto.

<TABLE>
<CAPTION>

                                                               FISCAL QUARTER ENDED
                                                    FISCAL 1998                                  FISCAL 1999
                                 APR. 30,      JULY 31,      OCT. 31,      JAN. 31,          MAY 1,       JULY 31,
                                   1998          1998          1998          1999             1999          1999
                                   ----          ----          ----          ----             ----          ----
                                                                  (IN THOUSANDS)
<S>                                                 <C>         <C>         <C>         <C>         <C>         <C>
</TABLE>

                                       15

<PAGE>


<TABLE>
<S>                                                 <C>         <C>         <C>         <C>         <C>         <C>
Net sales .......................................   $ 31,194    $ 26,451    $ 40,821    $ 59,898    $ 41,812    $ 33,375
Cost of sales ...................................     14,223      13,712      19,979      30,454      23,023      20,450
                                                    --------    --------    --------    --------    --------    --------
Gross profit ....................................     16,971      12,739      20,842      29,444      18,789      12,925
Selling, general and
  administrative expenses .......................     14,092      13,499      19,691      24,429      23,750      23,908
Restructuring charge ............................       --          --          --          --        22,907        --
Gain on subsidiary initial public offering ......       --          --          --          --       (70,091)       --
Interest and other income, net ..................       (341)       (300)       (126)       (195)       (140)     (1,027)
Minority interest ...............................       --          --          --          --             8        (493)
                                                    --------    --------    --------    --------    --------    --------
Income (loss) before income taxes ...............      3,220        (460)      1,277       5,210      42,355      (9,463)
Provision (benefit) for income taxes ............      1,220        (317)        530       1,972      17,519      (3,399)
                                                    --------    --------    --------    --------    --------    --------

Net income (loss) ...............................   $  2,000    $   (143)   $    747    $  3,238    $ 24,836    $ (6,064)
                                                    --------    --------    --------    --------    --------    --------
                                                    --------    --------    --------    --------    --------    --------
Per share data:
Basic net income (loss) per share ...............   $   0.15    $  (0.01)   $   0.05    $   0.23    $   1.75    $  (0.42)
                                                    --------    --------    --------    --------    --------    --------
                                                    --------    --------    --------    --------    --------    --------
Shares used in the
 calculation of basic net income (loss) per share     13,321      13,498      14,139      14,159      14,231      14,330
                                                    --------    --------    --------    --------    --------    --------
                                                    --------    --------    --------    --------    --------    --------
Diluted net income (loss) per share .............   $   0.15    $  (0.01)   $   0.05    $   0.21    $   1.56    $  (0.42)
                                                    --------    --------    --------    --------    --------    --------
                                                    --------    --------    --------    --------    --------    --------
Shares used in calculation
 of diluted net income (loss) per share .........     13,569      13,498      14,735      15,300      15,966      14,330
                                                    --------    --------    --------    --------    --------    --------
                                                    --------    --------    --------    --------    --------    --------

                          PERCENTAGE OF TOTAL NET SALES

Net sales .......................................        100.0%      100.0%      100.0%      100.0%      100.0%      100.0%
Cost of sales ...................................         45.6        51.8        49.0        50.8        55.0        61.3
                                                    --------    --------    --------    --------    --------    --------
Gross profit ....................................         54.4        48.2        51.0        49.2        45.0        38.7
Selling, general, and administrative expenses ...         45.2        51.0        48.2        40.8        56.8        71.6
Restructuring charge ............................       --          --          --          --            54.8      --
Gain on subsidiary initial public offering ......       --          --          --          --          (167.6)     --
Interest and other income, net ..................         (1.1)       (1.1)       (0.3)       (0.3)       (0.3)       (3.1)
Minority interest ...............................       --          --          --          --             0.0        (1.5)
                                                    --------    --------    --------    --------    --------    --------
Income (loss) before income taxes ...............         10.3        (1.7)        3.1         8.7       101.3       (28.3)
Provision (benefit) for income taxes ............          3.9        (1.2)        1.3         3.3        41.9       (10.2)
                                                    --------    --------    --------    --------    --------    --------
Net income (loss) ...............................          6.4%       (0.5)%       1.8%        5.4%       59.4%      (18.1)%
                                                    --------    --------    --------    --------    --------    --------
                                                    --------    --------    --------    --------    --------    --------
</TABLE>

     dELiA*s is subject to seasonal fluctuations in our merchandise sales and
results of operations. We expect our net sales and results of operations
generally to be lower in the second quarter and higher in the fourth quarter
(which includes the holiday season) of each fiscal year. Our quarterly results
may fluctuate as a result of numerous factors, including the timing, quantity
and cost of catalog mailings, responses to those mailings, the timing of sale
circulars and liquidations, sales performance in comparable stores
year-over-year, our ability to open new stores, the timing of merchandise
deliveries, market acceptance of merchandise (including new merchandise
categories or products introduced), the mix of products sold, the hiring and
training of additional personnel, the timing of inventory write downs, the
integration of acquisitions, the incurring of other operating costs and factors
beyond control, such as general economic conditions and actions of competitors.
Accordingly, the results of operations in any quarter will not necessarily be
indicative of the results that may be achieved for a full fiscal year or any
future quarter.

LIQUIDITY AND CAPITAL RESOURCES

                                       16

<PAGE>

     Cash used in operations in the first half of fiscal 1999 and 1998 was $16.9
million and $11.3 million, respectively. The increase in cash used in operations
primarily relates to operating losses and an increase in inventory levels in an
effort to improve catalog fill rates and in anticipation of greater sales due to
the growth of our retail segment.

     Investing activities used $64.6 million for the purchase of short-term
investments and capital expenditures in the first half of fiscal 1999. For the
first half of fiscal 1998, investing activities provided $11.4 million, which
reflects the sale of short-term investments in fiscal 1998. During the second
half of fiscal 1999, we expect to make additional capital expenditures of
approximately $19 million for the purchase of, and improvements to, our
warehouse and distribution facility, expansion of our retail concepts and
conversion of stores between our retail concepts, investment in the
infrastructure of iTurf, new telecommunications equipment for our New York and
North Carolina call centers and other information system projects, as well as
leasehold improvements and purchase of and improvements to other equipment
relating to new corporate office leases. We expect to fund these capital
expenditures through equipment leases, a mortgage loan secured by our
distribution facility, our credit facility and cash from operations. We expect
that we will incur indebtedness under our credit facility with First National
Bank in the third and fourth quarters of fiscal 1999 to finance working capital
and a portion of our planned capital expenditures.

     Cash flows from financing activities in the first half of fiscal 1999 were
$99.9 million, primarily as a result of the initial public offering of iTurf
common stock. We did not engage in significant financing activities in the first
half of fiscal 1998.

     On August 6, 1999, we purchased for $6.2 million an approximately 415,000
square foot distribution facility in Hanover, Pennsylvania, of which we were
leasing approximately 360,000 square feet. We borrowed $5.3 million from
Allfirst Bank in the form of a mortgage loan on the property, to pay for $4.9
million of the purchase price and $400,000 of planned capital improvements. We
are subject to certain covenants under the loan agreement, including a covenant
to maintain a fixed charge coverage ratio. The loan includes a variable
LIBOR-based interest rate. On August 10, 1999 we entered into an interest-rate
swap agreement with Allfirst Bank under which we effectively converted the
mortgage to a fixed-rate loan with an interest rate of approximately 8.78%.

     Our credit facility with First Union National Bank, which terminates on
December 7, 2001, consists of a revolving line of credit permitting us to borrow
up to $25 million and provides for the issuance of documentary and standby
letters of credit up to $10 million. Our ability to borrow under the credit
agreement is contingent on a number of conditions including our compliance with
tangible net worth, fixed charge coverage ratio and debt to cash flow covenants.
The availability of the unused revolving line of credit is limited to specified
percentages of the value of our eligible inventory determined under the credit
agreement. At our option, borrowings under this facility bear interest at First
Union National Bank's prime rate or at LIBOR plus 200 basis points.

     In April 1999, we amended our credit agreement with First Union National
Bank in connection with the iTurf initial public offering such that iTurf is no
longer considered a borrower under such agreement. Accordingly, First Union
National Bank released its security interest in the assets of iTurf as well as
its pledge, assignment and security interest in the 12,500,000 shares of Class B
common stock of iTurf currently held by us.

YEAR 2000

     We are heavily dependent upon complex computer software and systems for our
operations. Many existing computer programs and systems use only two digits to
identify a year in the date field. These programs and systems were designed and
developed without considering the impact of the upcoming change in the century.
If not corrected, many computer applications could fail or create erroneous
results by or at the Year 2000.

     STATE OF READINESS. All of our material operating software and our
information technology and other systems, including telecommunications and
warehouse systems, were developed by and are supported by third party vendors.
Each of the third party vendors of our mission-critical operating software has
provided a written warranty or assurance that such software will not be affected
by the changes in the century. We have modified certain of our mission-critical
software provided by third party vendors, but we believe that such modifications
will not affect the ability of such software to account for the change in the
century. The

                                       17

<PAGE>


majority of the third party vendors of our other material operating software and
systems have also provided warranties or assurances that such software and
systems are able to account for the change in the century.

     We have prepared a Year 2000 compliance program, which involves:

-    identifying the material operating software and systems on which we depend,
     whether used by us or by our service providers;

-    obtaining written warranties or assurances from third party software and
     system vendors and service providers;

-    monitoring the compliance efforts of those vendors and service providers;
     and

-    testing our material operating software and systems.

     We began performing tests in the second quarter of fiscal 1999 of our
material operating software and systems to verify the assurances given by third
party vendors and ensure Year 2000 compliance. We have not yet begun to perform
these tests on certain of our software and systems and we may not be able to
test all of our material operating systems. As a result of this timing, we have
not identified any material software or systems as requiring remediation or
replacement. We cannot assure you that all of our material operating software
and systems will be Year 2000 compliant.

     In addition to the operating systems and software we use directly, our
operations are also dependent upon the performance of operating software and
systems used by our significant service providers, including providers of
financial, telecommunications and parcel delivery services. We have contacted
each of our significant service providers and have obtained written assurances
from the majority of such providers that their relevant operating software and
systems are or would be Year 2000 compliant. We are monitoring the status of all
our significant service providers' Year 2000 compliance efforts to minimize the
risk of any material adverse effect on our operations resulting from compliance
failures. However, there can be no assurance that our service providers have, or
will have, operating software and systems that are Year 2000 compliant.

     RISKS. The failure of our software or systems to be Year 2000 compliant
could prevent us from being able to process or fulfill orders from our customers
or being able to distribute merchandise to stores in a timely manner and could
disrupt our financial and management controls and reporting systems. Any such
worst-case scenario, if not quickly remedied, would have a material adverse
effect on our business. Therefore, we are developing contingency plans with
respect to our systems and software. We expect our contingency plans to be
completed by the end of the third quarter of fiscal 1999.

     In addition, a significant portion of our merchandise sales are made with
credit cards, and our operations may be materially adversely affected to the
extent our customers are unable to use their credit cards due to Year 2000
issues that are not rectified by the customers' credit card vendors.

     We have not identified significant exposure to Year 2000 problems outside
of the information technology issues identified above.

     COSTS. To date, we have spent approximately $110,000 on Year 2000
compliance. We expect our total costs of addressing Year 2000 issues to be
approximately $250,000. We believe that we have sufficiently budgeted for
technology investments, including Year 2000 compliance, and that our cash from
operations, our equipment lease arrangements and the proceeds of the iTurf
initial public offering and our credit facility, as necessary, will fund such
investments. However, given our dependence on third-party software and system
vendors and service providers, including our customers' vendors, there can be no
assurance to that effect.

                                       18

<PAGE>


                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     In June 1999, two separate purported securities class action lawsuits were
filed against us and certain of our officers and directors and one former
officer of a subsidiary. The complaints in these lawsuits purport to be class
actions on behalf of the purchasers of our securities during the period May 21,
1998 through June 17, 1998 and January 20, 1998 through September 10, 1998,
respectively. The complaints generally allege that the defendants violated
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
by making material misstatements and by failing to disclose certain allegedly
material information regarding trends in our business. The complaints also
allege that the individual defendants are liable for those violations under
Section 20(a) of the Securities Exchange Act. The complaints seek unspecified
damages, attorneys' and experts' fees and costs, and such other relief as the
court deems proper. The complaints were filed in Federal District Court for the
Southern District of New York by Allain Roy on June 1, 1999 and by Lorraine
Padgett on June 3, 1999. On August 3, 1999, the plaintiffs in both suits filed a
motion to consolidate the suits.

     We intend to vigorously defend against these actions. Based upon
information presently known to management, we do not believe that the ultimate
resolution of these lawsuits will have a material adverse effect on our
financial condition, results of operations or cash flow.

ITEM 2. CHANGES IN SECURITIES

     None.

ITEM 3. DEFAULT 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

     See "Exhibit Index" following the signature page.

(b)  The Company filed a Current Report on Form 8-K, dated May 17, 1999,
     reporting Item 4 (Changes in Certifying Accountant) and Item 8 (Change in
     Fiscal Year).

                                       19

<PAGE>


                                   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.

                                     dELiA*s Inc.
                                     (Registrant)

Date: September 14, 1999

                                     By: /s/ STEPHEN I. KAHN
                                        ----------------------------------------
                                             Stephen I. Kahn
                                             Chairman of the Board and
                                             Chief Executive Officer


                                     By: /s/ EVAN GUILLEMIN
                                        ----------------------------------------
                                             Evan Guillemin
                                             President, Chief Financial Officer
                                             and Treasurer (principal financial
                                             and accounting officer)


                                       20

<PAGE>


                                  EXHIBIT INDEX
<TABLE>
<S>      <C>
 2.1      Bill of Sale and Contribution and Assumption Agreement between dELiA*s LLC and dELiA*s
          Inc. (incorporated by reference to Exhibit 2.1 to the dELiA*s Inc. Registration Statement
          on Form S-1 (Registration No. 333-15153))

 3.1      Certificate of incorporation of dELiA*s Inc. (incorporated by reference to Exhibit 3.1 to
          the dELiA*s Inc. Registration Statement on Form S-1 (Registration No. 333-15153))

 3.2      Bylaws of dELiA*s Inc. (incorporated by reference to Exhibit 3.2 to the dELiA*s Inc.
          Registration Statement on Form S-1 (Registration No. 333-15153))

10.1      Form of Employment Agreement between dELiA*s Inc. and Stephen I. Kahn (incorporated by
          reference to Exhibit 10.1 to the dELiA*s Inc. Registration Statement on Form S-1
          (Registration No. 333-15153))

10.2      Employment Agreement between dELiA*s Inc. and Christopher C. Edgar (incorporated by
          reference to Exhibit 10.2 to the dELiA*s Inc. Registration Statement on Form S-1
          (Registration No. 333-15153))

10.3      Employment Agreement between dELiA*s Inc. and Evan Guillemin (incorporated by reference to
          Exhibit 10.3 to the dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
          333-15153))

10.4      Form of Family Stockholders Agreement among dELiA*s Inc., Stephen I. Kahn and the persons
          listed on Exhibit A thereto (incorporated by reference to Exhibit 10.4 to the dELiA*s Inc.
          Registration Statement on Form S-1 (Registration No. 333-15153))

10.5      Amended and Restated 1996 Stock Incentive Plan (incorporated by reference to the dELiA*s
          Inc. Schedule 14A filed on June 12, 1998)

10.6      Restricted Stock Plan (incorporated by reference to Exhibit 10.6 to the dELiA*s Inc.
          Registration Statement on Form S-1 (Registration No. 333-15153))

10.7      Stock Option Agreement between dELiA*s Inc. and Evan Guillemin (incorporated by reference
          to Exhibit 10.7 to the dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
          333-15153))

10.8      Transitional Services Agreement, dated as of July 10, 1998, among American Retail
          Enterprises, L.P., Screeem Inc., and dELiA*s Inc. (incorporated by reference to Exhibit
          10.8 to the dELiA*s Inc. Quarterly Report on Form 10-Q for the fiscal quarter ended July
          31, 1998)

10.9      Lease Agreement dated May 3, 1995 between dELiA*s Inc. and The Rector, Church Wardens and
          Vestrymen of Trinity Church in the City of New York (the "Lease Agreement"); Modification
          and Extension of Lease Agreement dated September 26, 1996 (incorporated by reference to
          Exhibit 10.9 to the dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
          333-15153))

10.10     Form of Restricted Stock Agreements between dELiA*s Inc. and holders of Common Stock
          subject to the Restricted Stock Plan (incorporated by reference to Exhibit 10.10 to the
          dELiA*s Inc. Registration Statement on Form S-1 (Registration No. 333-15153))

10.11     Employment Agreement dated April 5, 1999 between iTurf Inc. and Stephen I. Kahn
          (incorporated by reference to Exhibit 10.10 to the iTurf Inc. registration statement on
          Form S-1 (Registration No. 333-71123))

10.12     Lease Agreement dated April 25, 1997 between dELiA*s Inc. and Keystone Distribution
          Center, Inc. (incorporated by reference to Exhibit 10.12 to the dELiA*s Inc. Annual Report
          on Form 10-K for the fiscal year ended January 31, 1997)
</TABLE>

                                       21

<PAGE>


<TABLE>
<S>      <C>

10.13     Agreement dated April 4, 1997 between dELiA*s Inc. and The Rector, Church Wardens and
          Vestrymen of Trinity Church in the City of New York amending the Lease Agreement
          (incorporated by reference to Exhibit 10.13 to the dELiA*s Inc. Annual Report on Form 10-K
          for the fiscal year ended January 31, 1997)

10.14     Agreement dated October 7, 1997 between dELiA*s Inc. and The Rector, Church Wardens and
          Vestrymen of Trinity Church in the City of New York amending the Lease Agreement
          (incorporated by reference to Exhibit 10.14 to the dELiA*s Inc. Quarterly Report on Form
          10-Q for the fiscal quarter ended October 31, 1997)

10.15     Amendment No. 1 to Employment Agreement between dELiA*s Inc. and Christopher C. Edgar,
          dated September 15, 1998 (incorporated by reference to Exhibit 10.15 to the dELiA*s Inc.
          Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 1998)

10.16     Amendment No. 1 to Employment Agreement between dELiA*s Inc. and Evan Guillemin, dated
          September 15, 1998 (incorporated by reference to Exhibit 10.16 to the dELiA*s Inc.
          Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 1998)

10.17     Credit Agreement dated December 7, 1998 between First Union National Bank, dELiA*s Inc.
          and the subsidiaries listed on Schedule 1 thereto (incorporated by reference to Exhibit
          10.17 to the dELiA*s Inc. Quarterly Report on Form 10-Q for the fiscal quarter ended
          October 31, 1998)

10.18     1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.17 to the dELiA*s Inc.
          Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 1998)

10.19     Intercompany Services Agreement between dELiA*s Inc. and iTurf Inc., dated April 8, 1999
          (incorporated by reference to Exhibit 10.1 to the iTurf Inc. registration statement on
          Form S-1 (Registration No. 333-71123))

10.20     Trademark License Agreement between dELiA*s Inc. and iTurf Inc., dated April 8, 1999
          (incorporated by reference to Exhibit 10.2 to the iTurf Inc. registration statement on
          Form S-1 (Registration No. 333-71123))

10.21     Amendment No. 1, dated April 8, 1999, to Credit Agreement between First Union National
          Bank, dELiA*s Inc. and our subsidiaries listed on the signature page thereto (incorporated
          by reference to Exhibit 10.21 to the dELiA*s Inc. annual report on Form 10-K for the
          fiscal year ended January 31, 1999)

10.22     Advertising Agreement between iTurf and America Online, Inc., dated May 4, 1999
          (incorporated by reference to Exhibit 10.16 to the iTurf Inc. Quarterly Report on Form
          10-Q for the fiscal quarter ended May 1, 1999)**

10.23*    Construction Loan Agreement dated August 6, 1999, among dELiA*s Distribution Company,
          dELiA*s Inc. and Allfirst Bank

10.24*    Mortgage Note dated August 6, 1999 made by dELiA*s Distribution Company in favor of
          Allfirst Bank

10.25     Online Advertising Authorized Reseller Agreement between iTurf, Taponline and MarketSource
          Corporation, dated September 1, 1999 (incorporated by reference to Exhibit 99.1 of iTurf's
          Current Report on Form 8-K dated September 7, 1999).

10.26     Offline Advertising Purchase Agreement between iTurf and MarketSource Corporation, dated
          September 1, 1999 (incorporated by reference to Exhibit 99.2 of iTurf's Current Report on
          Form 8-K dated September 7, 1999).

27*       Financial Data Schedule
</TABLE>

                                       22

<PAGE>


--------------------------------
*   Filed herewith

**  Confidential treatment requested as to certain portions, which portions have
    been omitted and filed separately with the SEC.

                                                 23