The Company leases approximately 20,000 square feet in an office complex in Las Vegas,
Nevada, as an additional telemarketing facility. The lease expires March 31, 2005. The Company
is responsible for its share of operating expenses, real estate taxes and utility charges. Due to the
Company's restructuring plan (See "Management's Discussion and Analysis of Financial
Condition and Results of Operations"), the Nevada facility was closed in May, 2001. The
Company has attempted to sublease the facility, but has been unable to do so. On April 24,
2002, the Company decided to reactivate the facility as a seasonal call center for the upcoming
peak holiday selling season.
The Company leases 11,000 square feet in an office building in New Rochelle, New York, which
has been used as a seasonal telemarketing facility. The current lease runs through December 31,
2002. The Company does not plan to renew this lease at the end of its term.
The Company leases eighteen retail locations, which principally serve as outlet stores, in the
states of Virginia, New York, Delaware, South Carolina, Rhode Island, Vermont and Tennessee.
The typical retail store is approximately 3,000 square feet. The retail store leases expire from
fiscal 2003 through fiscal 2007, and contain various renewal options through fiscal 2011. The
Company leases additional outlet store locations on a short-term basis, particularly during the
holiday season.
The Company believes that its facilities are adequate and that its properties are in good
condition.
ITEM 3. LEGAL PROCEEDINGS
The Company knows of no material legal proceedings, pending or threatened, or judgments
entered against the Company or any Director or Officer of the Company in his or her capacity as
such. See "Government Regulations" for additional discussion.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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L I L L I A N V E R N O N
