Destination XL Group, Inc. – ‘PRER14A’ on 8/13/99

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Revised Preliminary Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRER14A     Revised Preliminary Proxy Solicitation Material       41±   197K 

Document Table of Contents

SCHEDULE 14A INFORMATION    

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES     
EXCHANGE ACT OF 1934    

FILED BY THE REGISTRANT |X| FILED BY A PARTY OTHER THAN THE REGISTRANT |  | 
----------------------------------------------------------------------------

Check the appropriate box:                                                      
|X|  Preliminary Proxy Statement                                                
| |  Definitive Proxy Statement                                                 
| |  Definitive Additional Materials                                            
| |  Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12          
1.      |  |  Confidential, for Use of the Commission Only (as permitted by     
Rule 14a-6(e)(2))                                   

DESIGNS, INC.     
(Name of Registrant as Specified In Its Charter)    

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)    

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):                              
|X| No fee required.                                                            
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.    

1)   Title of each class of securities to which transaction applies:    
2)   Aggregate number of securities to which transaction applies:       
3)   Per unit price or other underlying value of transaction computed   
   pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4)   Proposed maximum aggregate value of transaction:                   
5)   Total fee paid:                                                    

| | Fee paid previously with preliminary materials.                             

| | Check box if any part of the fee is offset as provided by Exchange Act      
Rule 0-11(a)(2) and identify the filing for which the offsetting fee    
was paid previously. Identify the previous filing by registration       
statement number, or the Form or Schedule and the date of its filing.   

1)   Amount Previously Paid:                                            
2)   Form, Schedule or Registration Statement No.:                      
3)   Filing Party:                                                      
4)   Date Filed:                                                        

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DESIGNS, INC.     
66 B Street     
Needham, Massachusetts 02494    

                                                      __________, 1999

Dear Stockholder,                                                               

 We are pleased to invite you to attend the 1999 Annual Meeting of
Stockholders of Designs, Inc., which will be held on Wednesday, September       
22, 1999, at 1:00 p.m., local time, at One Post Office Square, Boston,          
Massachusetts 02109. The items to be considered and voted upon at the           
Annual Meeting are described in the notice of Annual Meeting of                 
Stockholders and Proxy Statement accompanying this letter.                      

Your vote is important, regardless of the size of your holdings.
Whether or not you plan to attend the Annual Meeting and vote in person,        
please take a moment and complete, sign and date our enclosed BLUE proxy        
card and return it in the enclosed postage-paid envelope. Instructions for      
voting are contained on the BLUE proxy card. Voting in advance of the           
Annual Meeting will not limit your right to vote in person should you wish      
to attend the Annual Meeting.                                                   

We understand that you may receive proxy solicitation materials 
from dissident stockholder Seymour Holtzman and certain entities controlled     
by him, including Jewelcor Management, Inc., in connection with items Mr.       
Holtzman intends to present at the Annual Meeting. These items are a slate      
of director nominees chosen by Mr. Holtzman and a proposal relating to the      
Company's Shareholder Rights Plan. Your Board of Directors believes that        
these proposals are not in the best interests of the Company and its            
stockholders and urges you to reject his solicitation and not sign any of       
his white proxy cards.                                                          

YOUR VOTE IS IMPORTANT. WE ENCOURAGE YOU TO VOTE YOUR SHARES AS 
SOON AS POSSIBLE. IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING        
YOUR SHARES, PLEASE CALL OUR PROXY SOLICITOR, INNISFREE M&A INCORPORATED,       
TOLL FREE AT 1-888-750-5834.                                                    

Thank you for your support, and we look forward to seeing you at
the Annual Meeting.                                                             

        Sincerely,

              Joel H. Reichman
                                   President and Chief Executive Officer

DESIGNS, INC.     

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT    

_________, 1999     

   The Annual Meeting of Stockholders of Designs, Inc. (the "Company")
will be held at One Post Office Square, Boston, Massachusetts 02109, at         
1:00 p.m., local time, on Wednesday, September 22, 1999 for the following       
purposes:                                                                       

 1.     To elect five directors to serve on the Company's Board of
        Directors until the 2000 Annual Meeting of Stockholders of
       the Company. The Board of Directors recommends a vote FOR
    the election of each of the existing director nominees
          proposed for reelection by the Company, as further described
in the accompanying Proxy Statement.              

 2.     To vote on a stockholder proposal by dissident stockholder
     Jewelcor Management, Inc., and its indirect controlling
       stockholder, Mr. Seymour Holtzman, if properly presented,
          relating to the Company's Shareholder Rights Plan. The Board
   of Directors recommends a vote AGAINST this proposal.

3.     To transact such further business as may properly come   
  before the Annual Meeting and at any adjournments or
postponements thereof.                            

   The Board of Directors has fixed the close of business on August 5,
1999 as the record date for the determination of stockholders entitled to       
notice of, and to vote at, the Annual Meeting. Accordingly, only                
stockholders of record at the close of business on that date will be            
entitled to vote at the Annual Meeting. A list of the stockholders of           
record as of the close of business on August 5, 1999 will be available for      
inspection by any stockholder of record at the Annual Meeting and,              
beginning on September 12, 1999, at One Post Office Square, Boston,             
Massachusetts 02109. The transfer books will not be closed.                     

The Proxy Statement which follows contains more detailed        
information as to the matters described above. This Notice of Annual            
Meeting of Stockholders is first being mailed to stockholders on or about       
__________, 1999.                                                               

PLEASE SIGN, DATE AND RETURN THE ENCLOSED BLUE PROXY CARD IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. IF YOU HAVE RECEIVED A WHITE PROXY CARD         
FROM A DISSIDENT GROUP OF STOCKHOLDERS, WE URGE YOU NOT TO SIGN OR RETURN       
ANY WHITE PROXY CARD SENT TO YOU.                                               

                               By order of the Board of Directors,

          SCOTT N. SEMEL
     Secretary

Needham, Massachusetts                                                          
__________, 1999                                                                

DESIGNS, INC.     
66 B STREET     
NEEDHAM, MASSACHUSETTS 02494    
(781) 444-7222    

PROXY STATEMENT     
ANNUAL MEETING OF STOCKHOLDERS    

SEPTEMBER 22, 1999    

   This Proxy Statement and the enclosed form of proxy are first being
mailed to stockholders of Designs, Inc. (the "Company" or "Designs") on or      
about __________, 1999 in connection with the solicitation by the Board of      
Directors of Designs of proxies to be used at the Annual Meeting of             
Stockholders to be held on September 22, 1999, and at any and all               
adjournments or postponements thereof (the "Annual Meeting"). You are urged     
to sign and date the enclosed BLUE proxy card and return it in the enclosed     
prepaid envelope whether or not you plan to attend the Annual Meeting. Any      
stockholder may revoke such stockholder's proxy at any time before it has       
been exercised by attending the Annual Meeting and voting in person or by       
filing with the Secretary of the Company either an instrument in writing        
revoking the proxy or another duly executed proxy bearing a later date.         

   At the close of business on August 5, 1999, the record date for the
Annual Meeting (the "Record Date"), the Company's outstanding voting            
securities consisted of _______________ shares of common stock, par value       
$.01 per share ("Common Stock"). Each share of Common Stock is entitled to      
one vote on all matters properly brought before the Annual Meeting. With        
respect to the election of directors, a stockholder may: (i) vote for the       
election of all named director nominees, (ii) withhold authority to vote        
for all named director nominees or (iii) vote for the election of all named     
director nominees other than any nominee(s) with respect to whom the            
stockholder withholds authority to vote by so indicating in the appropriate     
space on the BLUE proxy card.                                                   

  Seymour Holtzman, a dissident stockholder of the Company, his wife
Evelyn Holtzman, and certain entities controlled by them, including             
Jewelcor Management, Inc. (collectively, the "Holtzman Group"), have            
proposed their own slate of nominees for election to the Board of Directors     
in opposition to the Company's nominees. The Holtzman Group also has stated     
that it intends to present a proposal concerning a non-binding                  
recommendation that the Company's Board of Directors terminate the              
Company's Shareholder Rights Plan (the "Holtzman Proposal"). The Board of       
Directors is soliciting votes FOR the Company's slate of nominees for           
election to the Board of Directors and AGAINST the Holtzman Proposal.           
Unless contrary instructions are indicated on the BLUE proxy card, all          
shares represented by valid proxies received pursuant to this solicitation      
(and not revoked) will be voted FOR the election of all of the Company's        
nominees for directors named in this Proxy Statement and AGAINST the            
Holtzman Proposal. If you specify a different choice on the proxy card,         
your shares will be voted as specified.                                         

 A quorum is necessary to hold a valid meeting of stockholders. If
stockholders holding at least a majority of the shares of Common Stock          
outstanding as of the Record Date are present in person or by proxy, a          
quorum will exist for purposes of transacting business at the Annual            
Meeting, other than a vote to adjourn (for which a quorum need not be           
present). Any stockholder who attends the Annual Meeting may not withhold       
such stockholder's shares from the quorum count by declaring such shares        
absent from the Annual Meeting. Abstentions and shares of Common Stock as       
to which a nominee (such as a broker holding shares in street name for a        
beneficial owner) has not received voting instructions from the beneficial      
owner thereof and does not have discretionary authority with respect to a       
particular matter ("broker non-votes") will be counted as present for the       
purpose of establishing a quorum.                                               

  The Company's By-Laws provide that directors shall be elected by a
plurality of the votes of the shares of Common Stock properly cast. The         
affirmative vote of a majority of the votes properly cast at the Annual         
Meeting on the Holtzman Proposal will be required to approve the Holtzman       
Proposal. Abstentions and broker-non votes with respect to any proposal         
will not be counted as votes cast on such proposal. Proxies withholding         
authority with respect to the election of one or more director nominees         
will not be counted as votes cast for those individual nominees.                

YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT.
PLEASE SIGN AND DATE THE ENCLOSED BLUE PROXY CARD AND RETURN IT IN THE          
ENCLOSED ENVELOPE PROMPTLY.                                                     

 WE URGE YOU NOT TO SIGN OR RETURN ANY PROXY CARD THAT MAY BE SENT
TO YOU BY THE HOLTZMAN GROUP, EVEN AS A PROTEST VOTE AGAINST THE HOLTZMAN       
GROUP. If you previously voted on a Holtzman Group proxy card, you have         
every legal right to change your vote. You can do so simply by signing,         
dating and returning the enclosed BLUE proxy card. ONLY YOUR LATEST DATED       
PROXY CARD WILL COUNT.                                                          

   IMPORTANT: If your shares of Common Stock are held in the name of a
brokerage firm, bank, nominee or other institution, only it can sign a BLUE     
proxy card with respect to your shares and only upon specific instructions      
from you. Please contact the person responsible for your account and give       
instructions for a BLUE proxy card to be signed representing your shares of     
Common Stock. We urge you to confirm in writing your instructions to the        
person responsible for your account and to provide a copy of such               
instructions to the Company's proxy solicitor, Innisfree, M&A Incorporated,     
at the address indicated below so that Innisfree can attempt to ensure that     
your instructions are followed.                                                 

If you have any questions about executing your proxy or require 
assistance, please contact:                                                     

INNISFREE M&A INCORPORATED    
501 Madison Avenue, 20th Floor    
New York, New York 10022    
Call Toll Free: (888) 750-5834    

Banks and Brokerage Firms please call collect: (212) 750-5833     

PROPOSAL 1. ELECTION OF DIRECTORS     

The Board of Directors has determined, in accordance with the   
By-Laws of the Company, as amended (the "By-Laws"), that the Board of           
Directors to be elected at the Annual Meeting shall consist of five             
members. The Board of Directors has nominated five persons, each of whom        
currently serves as a member of the Board of Directors of the Company, for      
election to serve on the Board until the 2000 Annual Meeting of                 
Stockholders or Special Meeting in lieu thereof. Although management            
expects all nominees to accept nomination and to serve if elected, the          
persons designated as proxies on the enclosed proxy card will have full         
discretion to vote the shares represented by proxies held by them for a         
substitute if a nominee is unable to serve at the time of election.             

The nominees for directors are:                                 

                                                                  DIRECTOR
NAME                       AGE       POSITION                         SINCE     

Joel H. Reichman.......    49    President, Chief Executive           1987      
          Officer and Director
James G. Groninger.....    55    Director                             1987      
Bernard M. Manuel......    52    Director                             1990      
Melvin I. Shapiro......    84    Director                             1990      
Peter L. Thigpen.......    59    Director                             1994      

   The Board of Directors recommends that you vote FOR the election of
the five individuals named above as directors of the Company.                   

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                                 

The following named persons were the only persons or entities   
believed by the Company to be the beneficial owners of more than five           
percent of the issued and outstanding shares of Common Stock as of July 16,     
1999. The Company is informed that, except as indicated, all of them have       
sole voting and investment power with respect to all shares of Common Stock     
shown as beneficially owned by them, subject to community property laws         
where applicable.                                                               

                                                                [Download Table]


                                               NUMBER OF SHARES   ERCENTAGE(1) OF
NAME AND ADDRESS OF BENEFICIAL OWNER          BENEFICIALLY OWNED  COMMON STOCK   
                                            --------------------  ------------   
                                                                                 
Grace & White, Inc.                                                              
  515 Madison Avenue                                                             
  New York, New York 10022 .................      2,057,100(2)        12.9%      
Franklin Resources, Inc.                                                         
  777 Mariners Island Boulevard                                                  
  San Mateo, California 94403 ..............      1,900,000(3)        11.9       
Jewelcor Management, Inc.                                                        
  100 North Wilkes-Barre Boulevard                                               
  Wilkes-Barre, PA 18702....................      1,570,200(4)         9.9       
Stanley I. Berger                                                                
  100 Essex Road                                                                 
  Chestnut Hill, Massachusetts 02467........      1,205,437(5)         7.4       
Dimensional Fund Advisors Inc.                                                   
  1299 Ocean Avenue, 11th Floor                                                  
  Santa Monica, California 90401............        838,400(6)         5.3       

------------------                                                               
(1)     Beneficial ownership is determined in accordance with the rules of       
        the Securities and Exchange Commission (the "SEC") and generally         
        includes voting or investment power with respect to securities.          
        Except as indicated, each person possesses sole                          
        voting and investment power with respect to all of the shares of         
        Common Stock owned by such person, subject to community property         
        laws where applicable. In computing the number of shares                 
        beneficially owned by a person and the percentage ownership of that      
        person, shares of Common Stock subject to options held by that           
        person that are currently exercisable, or become exercisable by          
        September 14, 1999 (60 days after July 16, 1999), are deemed             
        outstanding. Such shares, however, are not deemed outstanding for        
        the purpose of computing the percentage ownership of any other           
        person. Percentage ownership is based on 15,963,948 shares of            
        Common Stock outstanding on July 16, 1999, plus securities deemed        
        to be outstanding with respect to individual stockholders pursuant       
        to Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as        
        amended (the "Exchange Act"). The information as to each person has      
        been furnished by such person.                                           
(2)     The Company received an Amendment No. 1 to Schedule 13G dated            
        February 8, 1999, stating that Grace & White, Inc. ("Grace &             
        White") was the beneficial owner of the number of shares of Common       
        Stock set forth opposite its name in the table above. The report         
        indicates that at December 31, 1998 Grace & White had sole voting        
        power with respect to 194,000 shares and that Grace & White may be       
        deemed to beneficially own, within the meaning of Rule 13d-3 of the      
        Exchange Act, 2,057,100 shares over which it had sole dispositive        
        power. The report indicates that the shares were acquired in the         
        ordinary course of Grace & White's investment advisory business and      
        not with the purpose of changing or influencing the control of the       
        Company.                                                                 
(3)     The Company received a report on Schedule 13G/A dated May 8, 1999        
        and filed jointly by Franklin Resources, Inc. ("FRI"), Franklin          
        Advisory Services, Inc. ("FASI"), Charles B. Johnson and Rupert H.       
        Johnson, Jr.  FASI is an investment adviser;                             
        FRI is the parent holding company of FASI; and Charles B. Johnson        
        and Rupert H. Johnson, Jr. each own in excess of 10% of the              
        outstanding stock, and are the principal stockholders, of FRI. The       
        report states that FASI had sole voting power and sole dispositive       
        power over 1,900,000 shares as of that date. The report further          
        states that the shares were beneficially owned by one or more open       
        or closed-end investment companies or other managed accounts which       
        are advised by direct and indirect investment adviser subsidiaries       
        of FRI. The report indicates that the shares were acquired in the        
        ordinary course of business and not with the purpose of changing or      
        influencing the control of the Company. The report describes the         
        relationship among Franklin, FASI, Charles B. Johnson and Rupert H.      
        Johnson, Jr., but it does not affirm the existence of a "group" as       
        that term is used in Section 13(d)(3) of the Exchange Act;               
        nevertheless, the Company believes that FRI, FASI, Charles B.            
        Johnson and Rupert H. Johnson, Jr. may be deemed to constitute a         
        group under Section 13(d)(3) of the Exchange Act and that such           
        group may be deemed to be the beneficial owner of the shares             
        described in this footnote.                                              
(4)     The Company has received reports on Schedule 13D, initially dated        
        as of November 27, 1998 and amended through July 19, 1999 and filed      
        jointly on behalf of Jewelcor Management, Inc. ("JMI"), Jewelcor,        
        Inc., S.H. Holdings, Inc., Seymour Holtzman and Evelyn Holtzman.         
        JMI is a wholly-owned subsidiary of Jewelcor, Inc. Jewelcor, Inc.        
        is a wholly-owned subsidiary of S.H. Holdings, Inc. Seymour              
        Holtzman and Evelyn Holtzman own, as tenants by the entirety, a          
        controlling interest of S.H. Holdings, Inc. The last report filed        
        before the date of this table, filed as of July 19, 1999, states         
        that JMI had sole voting power and sole dispositive power over           
        1,570,200 shares as of that date. The report describes the               
        relationship among JMI, Jewelcor, Inc., S.H. Holdings, Inc.,             
        Seymour Holtzman and Evelyn Holtzman, but it does not affirm the         
        existence of a "group" as that term is used in Section 13(d)(3) of       
        the Exchange Act; nevertheless, the Company believes that JMI,           
        Jewelcor, Inc., S.H. Holdings, Inc., Seymour Holtzman and Evelyn         
        Holtzman may be deemed to constitute a group under Section 13(d)(3)      
        of the Exchange Act and that such group may be deemed to be the          
        beneficial owner of the shares described in this footnote.               
(5)     Includes 241,500 shares issuable pursuant to outstanding stock           
        options exercisable within 60 days of July 16, 1999. Mr. Berger          
        filed a Schedule 13D with the SEC, dated as of December 29, 1998,        
        stating that he had consented or would consent in his capacity as a      
        stockholder to the proposals described in the Consent Solicitation       
        Statement of JMI dated December 21, 1998. See "THE HOLTZMAN GROUP        
        SOLICITATION -- Background" below. JMI's consent solicitation            
        expired without any of its proposals being approved by the               
        Company's stockholders.                                                  
(6)     The Company received a report on Schedule 13G dated February 12,         
        1999 stating that Dimensional Fund Advisors Inc. ("DFAI") was            
        reporting the beneficial ownership of an aggregate of 838,400            
        shares by four investment companies to which DFAI furnishes              
        investment advice and certain other investment vehicles to which         
        DFAI serves as an investment adviser. These investment companies         
        and other investment vehicles are referred to as the "Portfolios"        
        in the Schedule 13G filed by DFAI. The Schedule 13G states that all      
        securities reported in the Schedule 13G are owned by advisory            
        clients of DFAI, none of which, to DFAI's knowledge, owns more than      
        five percent of the outstanding shares of Common Stock of the            
        Company. The report on Schedule 13G indicates that at December 31,       
        1998 DFAI had sole voting power and with respect to all 838,400          
        shares reported and that DFAI may be deemed to beneficially own          
        such shares within the meaning of Rule 13d-3 of the Exchange Act in      
        that it had sole dispositive power over them. The report indicates       
        that the shares were acquired in the ordinary course of business         
        and not with the purpose of changing or influencing the control of       
        the Company. The report describes the relationship among DFAI and        
        its advisory clients but does not affirm the existence of a "group"      
        as that term is used in Section 13(d)(3) of the Exchange Act. DFAI       
        disclaims beneficial ownership of the shares; nevertheless, the          
        Company believes that DFAI and its advisory clients may be deemed        
        to constitute a group under Section 13(d)(3) of the Exchange Act         
        and that such group may be deemed to be the beneficial owner of the      
        shares described in this footnote.                                       


SECURITY OWNERSHIP OF MANAGEMENT                                                

As of July 16, 1999, the following directors of the Company, the
Named Executive Officers (as defined below) and the directors and Named         
Executive Officers as a group were the beneficial owners of the indicated       
amount of issued and outstanding shares of Common Stock. Except as              
indicated, all of them have sole voting and investment power with respect       
to all shares of Common Stock shown as beneficially owned by them, subject      
to community property laws where applicable.                                    

                                                        [Enlarge/Download Table]


                                                        NUMBER OF                         
                                                        SHARES OF          PERCENTAGE OF  
NAME AND TITLE OF BENEFICIAL OWNER                     COMMON STOCK        COMMON STOCK   
                                                       BENEFICIALLY         OUTSTANDING   
                                                          OWNED                 (1)       
                                                   --------------------  -----------------
                                                                                          
Stanley I. Berger                                                                         
  Chairman of the Board and Director...............        1,205,437(2)        7.4%       
Joel H. Reichman                                                                          
  President, Chief Executive Officer and                     416,455(3)        2.6        
Director...........................................                                       
Scott N. Semel                                                                            
  Executive Vice President, General                          310,537(4)        1.9        
Counsel and Secretary..............................                                       
Carolyn R. Faulkner                                                                       
  Vice President, Chief Financial Officer                     80,000(5)         *         
and Treasurer......................................                                       
James G. Groninger                                                                        
  Director.........................................           80,765(6)         *         
Melvin I. Shapiro                                                                         
  Director.........................................           65,187(7)         *         
Bernard M. Manuel                                                                         
  Director.........................................           90,885(8)         *         
Peter L. Thigpen                                                                          
  Director.........................................           61,551(9)         *         
All directors and executive officers as a                                                 
group (8 persons).................................         2,310,817(10)      13.5%       
------------------                                                                        
*       Less than 1.0%.                                                                   
(1)     Beneficial ownership is determined in accordance with the rules of                
        the SEC and generally includes voting or investment power with                    
        respect to securities. Except as indicated, each person possesses                 
        sole voting and investment power with respect to all of the shares                
        of Common Stock owned by such person, subject to community property               
        laws where applicable. In computing the number of shares                          
        beneficially owned by a person and the percentage ownership of that               
        person, shares of Common Stock subject to options held by that                    
        person that are currently exercisable, or become exercisable by                   
        September 14, 1999 (60 days after July 16, 1999), are deemed                      
        outstanding. Such shares, however, are not deemed outstanding for                 
        the purpose of computing the percentage ownership of any other                    
        person. Percentage ownership is based on 15,963,948 shares of                     
        Common Stock outstanding as of July 16, 1999, plus securities                     
        deemed to be outstanding with respect to individual stockholders                  
        pursuant to Rule 13d-3(d)(1) under the Exchange Act. The                          
        information as to each person has been furnished by such person.                  
(2)     Includes 241,500 shares issuable pursuant to outstanding stock                    
        options exercisable within 60 days of July 16, 1999. Mr. Berger                   
        filed a Schedule 13D with the SEC, dated as of December 29, 1998,                 
        stating that he had consented or would consent in his capacity as a               
        stockholder to the proposals described in the Consent Solicitation                
        Statement of JMI dated December 21, 1998. See "THE HOLTZMAN GROUP                 
        SOLICITATION -- Background" below. JMI's consent solicitation                     
        expired without any of its proposals being approved by the                        
        Company's stockholders.                                                           
(3)     Includes 370,500 shares issuable pursuant to outstanding stock                    
        options exercisable within 60 days of July 16, 1999, as well as 280               
        shares owned by Mr. Reichman's wife and 427 shares owned by Mr.                   
        Reichman's children, as to which 707 shares Mr. Reichman disclaims                
        beneficial ownership.                                                             
(4)     Includes 272,500 shares issuable pursuant to outstanding stock                    
        options exercisable within 60 days of July 16, 1999, as well as 450               
        shares owned by Mr. Semel's daughter, as to which he disclaims                    
        beneficial ownership.                                                             
(5)     Includes 67,000 shares issuable pursuant to outstanding stock                     
        options exercisable within 60 days of July 16, 1999, as well as                   
        12,000 shares beneficially owned by Mrs. Faulkner's husband, as to                
        which she disclaims beneficial ownership.                                         
(6)     Includes 43,500 shares issuable pursuant to outstanding stock                     
        options exercisable within 60 days of July 16, 1999.                              
(7)     Includes 43,500 shares issuable pursuant to outstanding stock                     
        options exercisable within 60 days of July 16, 1999 and 450 shares                
        owned by Mr. Shapiro's wife as to which he disclaims beneficial                   
        ownership.                                                                        
(8)     Includes 43,500 shares issuable pursuant to outstanding stock                     
        options exercisable within 60 days of July 16, 1999.                              
(9)     Includes 22,000 shares issuable pursuant to outstanding stock                     
        options exercisable within 60 days of July 16, 1999.                              
(10)    Includes 1,104,000 shares issuable pursuant to outstanding stock                  
        options exercisable within 60 days of July 16, 1999. See also Notes               
        2 through 9 above for further details concerning such options.                    

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

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE                         

 Section 16(a) of the Exchange Act requires the Company's officers
and directors, and persons who own more than 10% of a registered class of       
the Company's equity securities, to file reports of ownership and changes       
in ownership with the Commission. Officers, directors and greater-than-10%      
stockholders are required by SEC regulations to furnish the Company with        
copies of all Section 16(a) forms they file. Based solely upon a review of      
Forms 3 and 4 and amendments thereto furnished to the Company during fiscal     
year 1998 and Forms 5 and amendments thereto furnished to the Company with      
respect to fiscal year 1998, the Company believes that all Section 16(a)        
filing requirements applicable to its officers, directors and                   
greater-than-10% stockholders were fulfilled in a timely manner, except for     
the late filing of a Form 5 by Mrs. Faulkner.                                   

NOMINEES FOR DIRECTOR AND EXECUTIVE OFFICERS                                    

DIRECTORS                                                       

  Joel H. Reichman has been President and Chief Executive Officer of
the Company since December 1994. Prior to that time, he served as the           
Company's President and Chief Operating Officer since January 1993. Mr.         
Reichman has been employed by the Company since 1976 and served as its          
Executive Vice President from 1985 until January 1993. Mr. Reichman has         
been a director of the Company since 1987. Mr. Reichman has worked in the       
retail clothing business for more than 25 years.                                

 James G. Groninger was elected a director of the Company in 1987.
Mr. Groninger is the founder and president of The BaySouth Company, a           
financial advisory firm. Prior to becoming associated with The BaySouth         
Company, from 1988 through 1994, Mr. Groninger held various positions with      
PaineWebber Incorporated, an investment banking and brokerage firm,             
including the position of Managing Director. Mr. Groninger is a member of       
the Board of Directors of Cygne Designs, Inc., a private label designer and     
manufacturer of clothing for women, and NPS Pharmaceuticals, Inc., a            
research and development pharmaceutical company.                                

Bernard M. Manuel was elected a director of the Company in 1990.
Mr. Manuel is the Chairman of the Board and Chief Executive Officer of          
Cygne Designs, Inc., and Chairman of the Board and Chief Executive Officer      
of Amvent, Inc., an international financial consulting company. Mr. Manuel      
has been associated with these companies since prior to 1990.                   

Melvin I. Shapiro was elected a director of the Company in 1990.
Mr. Shapiro retired from the independent accounting firm of Tofias,             
Fleishman, Shapiro & Co., P.C. in April 1998. Until his retirement, Mr.         
Shapiro had been a partner in that firm for more than 25 years.                 

Peter L. Thigpen was elected a director of the Company in March 
1994. Mr. Thigpen is a partner and a founder of Executive Reserves, a           
consulting firm specializing in marketing strategy, quality processes and       
the development of strategic business plans. Prior to becoming associated       
with Executive Reserves, Mr. Thigpen held various positions with Levi           
Strauss & Co. ("Levi Strauss") covering a period of more than 23 years,         
including the position of Senior Vice President, U.S. Operations. Mr.           
Thigpen has been a lecturer at the Haas School of Business at the               
University of California, Berkeley since 1992. Mr. Thigpen is presently a       
member of the Board of Directors of Radica Games Limited, a developer,          
manufacturer and distributor of electronic handheld and table top games.        

All directors hold office until the next Annual Meeting of      
Stockholders or Special Meeting in lieu thereof. Executive officers, once       
elected, serve at the discretion of the Board of Directors.                     

EXECUTIVE OFFICERS                                              

Scott N. Semel, 43, has been employed as General Counsel to the 
Company since 1986. Mr. Semel was elected Secretary and Vice President of       
the Company in March 1990, and Senior Vice President of the Company in          
March 1994. Mr. Semel was elected Executive Vice President of the Company       
in April 1996.                                                                  

Carolyn R. Faulkner, 37, joined the Company as its Controller in
June 1993. In March 1994, Mrs. Faulkner was elected as a Vice President of      
the Company. In July 1996, Mrs. Faulkner was elected Chief Financial            
Officer. On January 20, 1998, Mrs. Faulkner was elected Treasurer of the        
Company. Prior to joining the Company, from 1985 through May 1993, Mrs.         
Faulkner held various positions with Coopers & Lybrand L.L.P., an               
independent accounting firm, including the position of Business Assurance       
Manager.                                                                        

DIRECTOR COMPENSATION                                                           

During the Company's fiscal year ended January 30, 1999 ("fiscal
year 1998"), non-employee directors of the Company were, and during the         
fiscal year ending January 29, 2000 ("fiscal year 1999") such directors         
will continue to be, eligible to participate in the Company's 1992 Stock        
Incentive Plan, as amended (the "1992 Stock Incentive Plan"). The 1992          
Stock Incentive Plan provides that each non-employee director of the            
Company who is elected by the stockholders to the Board initially will          
automatically be granted, upon such election, a stock option to purchase up     
to 10,000 shares of Common Stock at the then fair market value of Common        
Stock. Each non-employee director of the Company who is re-elected by the       
stockholders to the Board is granted, upon such re-election, a stock option     
to purchase up to 3,000 shares of Common Stock at the then fair market          
value of Common Stock. The 1992 Stock Incentive Plan further provides that      
each of such stock options becomes exercisable in three equal annual            
installments commencing twelve months following the date of grant and has a     
ten year term.                                                                  

   During fiscal year 1998, non-employee directors of the Company were
entitled to receive, in addition to reimbursement of expenses, fees for         
each meeting of the Board of Directors or committees of the Board in which      
they participated, as follows: $3,000 for each meeting of the Board of          
Directors; $3,000 for each Compensation Committee meeting; $1,500 for each      
Audit Committee meeting; $1,500 for each Corporate Governance Committee         
meeting; and $3,000 for each meeting of the Special Committee. The 1992         
Stock Incentive Plan also provides that non-employee directors of the           
Company may elect to receive all or a portion of their directors' fees, on      
a current or deferred basis, in shares of Common Stock that are free of any     
restrictions under the 1992 Stock Incentive Plan ("Unrestricted Stock").        
Non-employee directors who are members of the Audit Committee received cash     
payments as their full compensation for two Audit Committee meetings in         
fiscal year 1998 that occurred before April 13, 1998. On April 13, 1998 the     
Board of Directors amended the 1992 Stock Incentive Plan expressly to           
provide the Compensation Committee of the Board of Directors (the               
"Compensation Committee") with the authority to waive the requirement that      
such an irrevocable agreement be delivered prior to the beginning of the        
calendar year in which a non-employee director wishes to receive shares of      
Unrestricted Stock in lieu of directors' fees otherwise due. On April 13,       
1998 the Compensation Committee waived, with respect to calendar year 1998,     
compliance with the requirement that such irrevocable agreements be             
delivered prior to the beginning of the calendar year. This waiver was          
applicable to meetings of the Board of Directors and its committees held on     
April 13, 1998 and thereafter through the end of calendar year 1998. All        
non-employee directors elected to receive one-half of their directors' fees     
(excluding reimbursement of expenses) in shares of Unrestricted Stock for       
meetings of the Board of Directors and its committees in which they             
participated in fiscal year 1998, beginning with the meetings held on April     
13, 1998.                                                                       

EXECUTIVE COMPENSATION    

SUMMARY COMPENSATION TABLE                                                      

The following Summary Compensation Table sets forth certain     
information regarding compensation paid or accrued by the Company with          
respect to the Chief Executive Officer of the Company during fiscal year        
1998 and the other two executive officers of the Company as of January 30,      
1999 (collectively, the "Named Executive Officers"), for fiscal year 1998       
and the fiscal years ended January 31, 1998 ("fiscal year 1997") and            
February 1, 1997 ("fiscal year 1996").                                          

                                                        [Enlarge/Download Table]


                                                                         LONG-TERM                     
                                               ANNUAL                   COMPENSATION                   
                                             COMPENSATION(1)               AWARDS                      
                                           ------------------           ------------                   
                                                                         SECURITIES         ALL OTHER  
       NAME AND           FISCAL                                         UNDERLYING          COMPEN-   
  PRINCIPAL POSITION       YEAR            SALARY($)     BONUS($)        OPTIONS(#)        SATION($)(2)
  ------------------      ------           ---------     --------       ------------      -------------

                                                                                                       
Joel H. Reichman.....      1998             $375,000        $0                         0        $3,671 
  President and Chief      1997              375,000         0                   270,000         3,621 
  Executive Officer        1996              375,000         0                    40,000         2,451 

Scott N. Semel.........    1998             $290,000        $0                         0        $3,610 
  Executive Vice           1997              290,000         0                   150,000         3,566 
  President,               1996              290,000         0                    40,000         3,472 
  General Counsel and                                                                                  
  Secretary(3)                                                                                         

Carolyn R. Faulkner....    1998             $210,000        $0                         0        $3,497 
  Vice President,          1997              210,000         0                    80,000         3,453 
  Chief Financial          1996              158,808         0                    20,000         2,412 
  Officer and                                                                                          
  Treasurer(4)                                                                                         

----------------------                                                                                 
(1)     Other than as described in this table or the footnotes to this                                 
        table, the Company did not pay any Named Executive Officer any                                 
        compensation, including incidental personal benefits, in excess of                             
        10% of such Named Executive Officer's base salary.                                             
(2)     The amounts disclosed in this column covering fiscal year 1998                                 
        represent: (i) payments by the Company of insurance premiums for                               
        term life insurance for the benefit of the executive officers (Mr.                             
        Reichman, $471; Mr. Semel, $410; and Mrs. Faulkner, $297); and (ii)                            
        matching contributions equal to $3,200 that were made by the                                   
        Company for the benefit of each of the Named Executive Officers to                             
        the Company's retirement plan (the "401(k) Plan") established                                  
        pursuant to Section 401(k) of the Internal Revenue Code of 1986, as                            
        amended (the "Internal Revenue Code").                                                         
(3)     Mr. Semel was elected Executive Vice President of the Company on                               
        April 17, 1996.                                                                                
(4)     Mrs. Faulkner was elected Chief Financial Officer of the Company on                            
        July 16, 1996 and was elected Treasurer of the Company on January                              
        20, 1998.                                                                                      

OPTIONS/SAR GRANTS                                                              

   The Company did not grant any stock options during fiscal year 1998
to any of the Named Executive Officers.                                         

OPTION EXERCISES AND FISCAL YEAR-END VALUES                                     

The following Fiscal Year-End Option Table sets forth certain   
information regarding stock options held as of January 30, 1999 by the          
Named Executive Officers. None of the Named Executive Officers exercised        
any stock options during fiscal year 1998:                                      

                                                        [Enlarge/Download Table]


                                                     COMMON STOCK                                           
                                                UNDERLYING UNEXERCISED              VALUE OF UNEXERCISED    
                                                    OPTIONS HELD AT               IN-THE-MONEY OPTIONS HELD 
                                                  FISCAL YEAR-END(1)               AT FISCAL YEAR-END($) (2)
                                                -----------------------           --------------------------

NAME                                      EXERCISABLE      UNEXERCISABLE     EXERCISABLE      UNEXERCISABLE 
----                                      -----------      -------------     -----------      ------------- 

                                                                                                            
Joel H. Reichman                              303,166           229,334            $0                $0     
Scott N. Semel                                229,166           133,334             0                 0     
Carolyn R. Faulkner                            42,333            73,667             0                 0     

--------------                                                                                              
(1)     Includes 270,000, 150,000 and 80,000 options for Mr. Reichman, Mr.                                  
        Semel and Mrs. Faulkner, respectively, which are subject to                                         
        forfeiture if the per share price of Common Stock does not close at                                 
        or above $12.00 for at least five trading days ending on or prior                                   
        to April 28, 2002.                                                                                  
(2)     "Value" means the difference between the option exercise price and                                  
        the market value, as of the fiscal year-end, of the shares of                                       
        Common Stock acquired upon exercise. Based on the last sale price                                   
        of Common Stock ($2.81 per share) on Friday, January 29, 1999, as                                   
        reported by The Nasdaq Stock Market, less the applicable option                                     
        exercise price, no option held by a Named Executive Officer was "in                                 
        the money" as of the end of fiscal year 1998.                                                       


EMPLOYMENT AGREEMENTS                                                           

The Company entered into employment agreements, effective as of 
October 16, 1995, with each of Joel H. Reichman and Scott N. Semel for          
three-year terms ending October 15, 1998, and an employment agreement,          
effective as of May 9, 1997, with Carolyn R. Faulkner for a three-year term     
ending May 8, 2000. Each of these employment agreements (collectively, the      
"Employment Agreements") provides for automatic renewal for successive          
one-year terms unless either party notifies the other to the contrary at        
least 90 days prior to expiration of the then current term. Each of Mr.         
Reichman's and Mr. Semel's employment agreements renewed pursuant to this       
automatic renewal provision as of October 15, 1998 and will renew again         
pursuant to such provision on October 15, 1999.                                 

  The Employment Agreements require each executive officer to devote
substantially all of the executive officer's time and attention to the          
business of the Company as necessary to fulfill his or her duties. Pursuant     
to the Employment Agreements, Messrs. Reichman and Semel and Mrs. Faulkner      
were initially entitled to be paid base salary at an annual rate of             
$375,000, $255,000 and $210,000, respectively. The Employment Agreements        
provide that the executive officers' annual rate of base salary for the         
remaining years of employment may be increased by the Compensation              
Committee in its sole discretion. The Employment Agreements further provide     
that, effective as of the first day of each fiscal year of the Company,         
each executive officer's annual rate of base salary will be increased by at     
least the percentage increase in the cost of living in Boston,                  
Massachusetts. Each of Messrs. Reichman and Semel and Mrs. Faulkner waived      
their right to receive this increase for fiscal 1998. The Employment            
Agreements also provide for the payment of bonuses in such amounts as may       
be determined by the Compensation Committee. While an executive officer is      
employed by the Company, the Company provides the executive officer with a      
full-size automobile for the executive officer's personal use and for use       
in performance of his or her employment duties and obligations, including       
maintenance of and fuel for such automobile. Each executive officer is          
entitled to vacations and to participate in and receive any other benefits      
customarily provided by the Company to its senior executives (including any     
bonus, retirement, short and long-term disability insurance, major medical      
insurance and group life insurance plans in accordance with the terms of        
such plans), including stock option plans, all as determined from time to       
time by the Compensation Committee.                                             

 The Employment Agreements provide that in the event the executive
officer's employment is terminated by the Company at any time for any           
reason other than "justifiable cause" (as defined in the Employment             
Agreements), disability or death, or in the event that the Company shall        
fail to renew the Employment Agreement at any time within two years             
following the date of a "Change in Control of the Company," the Company is      
required, upon such termination or failure to renew, immediately to pay to      
the executive officer, in a lump sum, a severance payment equal to the          
greater of (i) one-twelfth of the executive officer's then annual base          
salary multiplied by the number of months remaining in the term of the          
Employment Agreement or (ii) a sum equal to his or her annual base salary       
then in effect multiplied by two. In addition, in the event the executive       
officer's employment is terminated under such circumstances, the executive      
officer is also entitled to continue to participate, at the Company's           
expense, in the Company's health insurance and disability insurance             
programs to the extent permitted by such programs for a period of two           
years. The Employment Agreements also provide that in the event the Company     
elects not to renew the Employment Agreement (other than within two years       
following a Change of Control of the Company), the Company will pay the         
executive officer a sum equal to the greater of (i) one year's annual base      
salary or (ii) two months' base salary plus one-sixth of the executive          
officer's bonus, if any, relating to the most recently completed fiscal         
year, for each year the executive officer has been employed by the Company.     
If an executive officer dies while he or she is on Company business, then       
the Company is required to pay such executive officer's estate one-half of      
his or her then annual base salary.                                             

Each Employment Agreement contains confidentiality provisions   
pursuant to which each executive officer agrees not to disclose                 
confidential information regarding the Company. Each Employment Agreement       
also contains covenants pursuant to which each executive officer agrees         
during the term of his or her employment and for a one-year period              
following the termination of his or her employment, not to have any             
connection with any business which competes with the business of the            
Company. Each Employment Agreement provides that in the event of                
termination of employment (unless such termination is because the Company       
fails to renew the Employment Agreement or the Company terminates the           
executive officer's employment within two years following a Change in           
Control of the Company), the executive officer will be available on a           
part-time basis to advise and consult with the Company, with respect to the     
affairs of the Company, for up to one year following termination of             
employment. In the event the Company elects not to renew an executive           
officer's Employment Agreement, or terminates the executive officer's           
employment within two years following a Change in Control of the Company,       
or fails to make the required severance payments described above, then the      
non-competition covenants contained in such executive officer's Employment      
Agreement will automatically terminate.                                         

Under the Employment Agreements, the executive officer may      
terminate his or her employment at any time upon 30 days' prior notice.         
Upon the executive officer's termination of employment or election not to       
renew his or her Employment Agreement, the non-competition covenants            
contained in such executive officer's Employment Agreement will terminate       
unless the Company pays the executive officer the severance payments            
described above. In such event, the executive officer will be entitled to       
receive such portion of his or her annual base salary and bonus, if any, as     
had been accrued to date.                                                       

  For purposes of the Employment Agreements, a "Change in Control of
the Company" is deemed to occur if: (i) there is consummated (a) any            
consolidation or merger of the Company in which the Company is not the          
continuing or surviving corporation or pursuant to which shares of the          
Company's Common Stock would be converted into cash, securities or other        
property, other than a merger of the Company in which the holders of the        
Company's Common Stock immediately prior to the merger have the same            
proportionate ownership of common stock of the surviving corporation            
immediately after the merger, or (b) any sale, lease, exchange or other         
transfer (in one transaction or a series of related transactions) of all,       
or substantially all, of the assets of the Company; or (ii) the                 
stockholders of the Company approve any plan or proposal for liquidation or     
dissolution of the Company; or (iii) any person (as such term is used in        
Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the beneficial         
owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act)     
of 40% or more of the Company's outstanding Common Stock other than             
pursuant to a plan or arrangement entered into by such person and the           
Company; or (iv) during any period of two consecutive years, individuals        
who at the beginning of such period constitute the entire Board of              
Directors of the Company cease for any reason to constitute a majority          
thereof unless the election, or the nomination for election by the              
Company's stockholders, of each new director was approved by a vote of at       
least two-thirds of the directors then still in office who were directors       
at the beginning of the period.                                                 

  The Employment Agreements also provide that if, in connection with
a change of ownership or control of the Company or a change in ownership of     
a substantial portion of the assets of the Company (all within the meaning      
of Section 280G(b)(2) of the Internal Revenue Code), an excise tax is           
payable by the executive officer under Section 4999 of the Internal Revenue     
Code, then the Company will pay to the executive officer additional             
compensation which will be sufficient to enable the executive officer to        
pay such excise tax as well as the income tax and excise tax on such            
additional compensation, such that, after the payment of income and excise      
taxes, the executive officer is in the same economic position in which he       
would have been if the provisions of Section 4999 of the Internal Revenue       
Code had not been applicable.                                                   

  In May 1999, the Company established a trust (the "Trust") for the
purpose of securing already existing obligations of the Company to Messrs.      
Reichman and Semel and Mrs. Faulkner (the "Trust Executives") under the         
Employment Agreements, the "Indemnification Agreements" (as defined below       
under "Additional Information Concerning Executive Compensation-Limitation      
of Liability; Indemnification") and the Company's By-Laws. The Company          
deposited $2.3 million in the Trust for these obligations. The funds will       
be held in the Trust to pay the amounts due under the Employment Agreements     
to the Trust Executives in the event of a Change in Control of the Company      
and also to pay any amounts due to the Trust Executives pursuant to the         
Indemnification Agreements or the Company's By-Laws.                            

 The Trust may be revoked by the Company, and the funds withdrawn,
after (i) November 11, 1999, if no Change in Control of the Company has         
occurred or (ii) a period of twenty-eight months following a Change in          
Control of the Company. On July 7, 1999, the Board of Directors of the          
Company adopted resolutions providing that the Trust will automatically be      
revoked, and the funds withdrawn, on November 12, 1999 if no Change in          
Control of the Company has occurred before such date. In addition, the          
\Trust may terminate on the date on which the Trust Executives and their        
beneficiaries are no longer entitled to benefits under the terms of the         
Employment Agreements, the Indemnification Agreements or the Company's          
By-Laws, unless sooner revoked by the Company as described above. The Trust     
may not be amended by the Company in any manner adverse to the Trust            
Executives and their beneficiaries following a Change in Control of the         
Company.                                                                        

  The Trust Executives have no preferred claim on, or any beneficial
ownership interest in, any assets of the Trust. Any rights created under        
the Employment Agreements, the Indemnification Agreements or the Company's      
By-Laws and the Trust are unsecured contractual rights of the Trust             
Executives against the Company. Any assets of the Trust are subject to the      
claims of the Company's creditors in the event the Company becomes              
insolvent or in certain circumstances if the Lenders (as defined herein)        
accelerate time for payment under the Amended and Restated Loan and             
Security Agreement dated as of June 4, 1998, by and among the Company and       
BankBoston Retail Finance Inc. and Norwest Business Credit Inc. now known       
as Wells Fargo Business Credit Inc. (collectively, the "Lenders").              

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

 James G. Groninger, Bernard M. Manuel and Peter L. Thigpen served
on the Compensation Committee during all of fiscal year 1998. Persons           
serving on the Compensation Committee had no relationships with the Company     
in fiscal year 1998 other than their relationship to the Company as             
directors entitled to the receipt of standard compensation as directors and     
members of certain committees of the Board and their relationship to the        
Company as beneficial owners of shares of Common Stock and options              
exercisable for shares of Common Stock. No person serving on the                
Compensation Committee or on the Board of Directors is an executive officer     
of another entity for which an executive officer of the Company serves on       
the board of directors or on that entity's compensation committee.              

ADDITIONAL INFORMATION CONCERNING EXECUTIVE COMPENSATION                        

401(K) PLAN                                                     

On January 27, 1993, the Board of Directors adopted the 401(k)  
Plan. All eligible employees of the Company are entitled to participate in      
the 401(k) Plan. The 401(k) Plan permits each participant to defer up to        
fifteen percent of such participant's annual salary up to a maximum annual      
amount ($9,500 in calendar year 1997 and $10,000 in calendar year 1998).        
The Board of Directors of the Company may determine, from fiscal year to        
fiscal year, whether and to what extent the Company will contribute to the      
401(k) Plan by matching contributions made to the Plan by eligible              
employees. During fiscal year 1998, the matching contribution by the            
Company continued to be 50% of contributions by eligible employees up to a      
maximum of six percent of salary.                                               

SENIOR EXECUTIVE INCENTIVE PLAN                                 

The Company's Senior Executive Incentive Plan (the "SEIP") was  
initially adopted by the Board of Directors of the Company during fiscal        
year 1996. The SEIP is an incentive compensation plan under which executive     
officers of the Company may be eligible to receive annual cash bonus            
payments. The Compensation Committee determined that none of the Named          
Executive Officers were eligible to participate, and did not designate any      
Named Executive Officers as participants in the SEIP for fiscal 1998.           

KEY MAN INSURANCE                                               

The Company has obtained a key man life insurance policy in the 
amount of $2,000,000 on the life of Mr. Reichman. The Company pays the          
premium for such policy and is the sole beneficiary thereof.                    

LIMITATION OF LIABILITY; INDEMNIFICATION                        

The Company's Restated Certificate of Incorporation, as amended 
(the "Certificate of Incorporation"), provides that no director of the          
Company shall be personally liable to the Company or to any of its              
stockholders for monetary damages arising out of such director's breach of      
fiduciary duty, except to the extent that the elimination or limitation of      
liability is not permitted by the Delaware General Corporation Law. The         
Delaware General Corporation Law, as currently in effect, permits charter       
provisions eliminating the liability of directors for breach of fiduciary       
duty, except that directors remain liable for (i) any breach of the             
directors' duty of loyalty to a company or its stockholders, (ii) acts or       
omissions not in good faith or which involve intentional misconduct or a        
knowing violation of law, (iii) any payment of a dividend or approval of a      
stock repurchase that is illegal under Section 174 of the Delaware General      
Corporation Law, or (iv) any transaction from which the directors derived       
an improper personal benefit. The effect of this provision of the               
Certificate of Incorporation is that directors cannot be held liable for        
monetary damages arising from breaches of their duty of care, unless the        
breach involves one of the four exceptions described in the preceding           
sentence. The provision does not prevent stockholders from obtaining            
injunctive or other equitable relief against directors, nor does it shield      
directors from liability under federal or state securities laws.                

The Certificate of Incorporation and the By-Laws further provide
for indemnification of the Company's directors and officers to the fullest      
extent permitted by Section 145 of the Delaware General Corporation Law,        
including circumstances in which indemnification is otherwise                   
discretionary.                                                                  

 On December 10, 1998, the Company's Board of Directors authorized
the Company to enter into indemnification arrangements (the                     
"Indemnification Agreements") with each of the Company's directors and          
executive officers (collectively, the "Indemnitees"). The Indemnification       
Agreements provide for the indemnification of, and advancing of expenses        
incurred by, each Indemnitee, by reason of any event or occurrence (an          
"Indemnificable Event") related to the fact that such Indemnitee is or was      
a director or officer of the Company. Such expenses include attorneys' fees     
and all other costs or obligations paid or incurred in connection with          
investigating, defending or being a witness in or preparing to defend, be a     
witness in or participate in, any claim relating to an Indemnificable           
Event.                                                                          

COMPENSATION COMMITTEE REPORT     

Decisions concerning the compensation of the Company's executive
officers generally are made by the three-member Compensation Committee.         
Each member of the Compensation Committee is a non-employee director of the     
Company. This Report summarizes the Company's executive officer                 
compensation practices and policies for fiscal year 1998.                       

COMPENSATION POLICIES                                           

  The Company's compensation policies are designed to link executive
officer compensation to the annual and long-term performance of the Company     
and to provide industry-competitive compensation for such officers. The         
compensation mix reflects a balance of annual cash payments, consisting of      
annual base salary payments and annual incentive bonus payments, and            
long-term stock-based incentives in the form of stock options. Annual           
incentive cash bonuses may be earned by eligible executive officers under       
the SEIP adopted in fiscal year 1996 based upon the achievement of              
measurable corporate performance goals established prior to or in the first     
quarter of each fiscal year. However, emphasis in incentive compensation is     
placed on the more strategic stock-based plans which more closely align the     
interests of the executive officers with those of the stockholders of the       
Company and which provide incentives to attract individuals and to motivate     
and retain executive officers over the long-term.                               

The Company's executive officer compensation consists of two key
components: (1) an annual component, consisting of base salary and bonus,       
if any, and (2) a long-term component consisting of the grant of stock          
options. The policies with respect to each of these elements, as well as        
the bases for determining the compensation of the Company's Chief Executive     
Officer, Joel H. Reichman, are described below.                                 

(1)    ANNUAL COMPONENT: BASE SALARY AND ANNUAL BONUS           

Base Salary: The Employment Agreements described above specify  
initial base salaries and annual cost of living increases for the three         
executive officers who had such agreements in fiscal year 1998 and permit       
increases in such base salaries by the Compensation Committee. The              
Compensation Committee reviews all base salaries for executive officers and     
establishes them by reviewing the performance of each executive officer,        
evaluating the responsibilities of each executive officer's position and        
comparing the executive officers' salaries with salaries of executive           
officers of other companies in the retail apparel industry (the                 
"Industry"). The Compensation Committee defines the Industry as public          
companies in the retail apparel business with similar sales and market          
capitalization. Annual base salary adjustments are influenced by the            
Company's performance in the previous fiscal year and the individual's          
contribution to that performance, the individual's performance, promotions      
of the individual that may have occurred during the fiscal year, and any        
increases in the individual's level of responsibility (which is measured by     
various factors including, but not limited to, the number of departments        
and employees for which the executive officer is responsible). Each of the      
three executive officers have declined to accept cost of living increases       
set forth in their Employment Agreements: Mr. Reichman has declined for the     
past three fiscal years, Mr. Semel has declined for the past two fiscal         
years and Mrs. Faulkner declined for fiscal year 1998.                          

Annual Bonus: The concept underlying the SEIP is to link        
compensation to the performance of the Company based on measurable              
corporate performance criteria. Generally, an executive officer's               
eligibility is determined based upon an assessment of such officer's            
performance during the previous fiscal year as well as other factors which      
members of the Compensation Committee may take into account. The                
Compensation Committee determined that none of the Named Executive Officers     
would be eligible to participate in the SEIP for fiscal year 1998.              

(2)    LONG-TERM COMPONENT: STOCK OPTIONS                       

To align executive officers' interests more closely with the    
interests of the stockholders of the Company, the Company's long-term           
compensation program emphasizes the grant of stock options exercisable for      
shares of Common Stock. The amount of such awards is determined one or more     
times in each fiscal year by the Compensation Committee. Stock options          
normally are granted to executive officers in amounts based largely upon        
the size of stock-based awards of other companies in the Industry for           
comparable positions as well as the availability of shares of Common Stock      
under the 1992 Stock Incentive Plan. The Compensation Committee may take        
into account other factors in determining the size of stock option grants,      
including, but not limited to, the need to attract and retain individuals       
the Compensation Committee perceives to be valuable to the Company.             

In light of the Company's performance in fiscal year 1998, the  
Compensation Committee did not award stock options to the Company's             
executive officers in fiscal year 1998.                                         

In addition to the foregoing, the Company's executive officers  
receive benefits under certain group health, long-term disability and life      
insurance plans which are generally available to the Company's eligible         
employees. After one year of service with the Company, the executive            
officers are eligible to participate in the 401(k) Plan. Benefits under         
these plans are not tied to corporate performance.                              

The Commission requires that this Report comment upon the       
Compensation Committee's policy with respect to Section 162(m) of the           
Internal Revenue Code, which limits the Company's tax deduction with regard     
to compensation in excess of $1 million paid to the chief executive officer     
and the four most highly compensated executive officers (other than the         
chief executive officer) at the end of any fiscal year unless the               
compensation qualifies as "performance-based compensation." The                 
Compensation Committee's policy with respect to Section 162(m) is to make       
every reasonable effort to cause compensation to be deductible by the           
Company while simultaneously providing executive officers of the Company        
with appropriate rewards for their performance.                                 

CHIEF EXECUTIVE OFFICER COMPENSATION                            

  Mr. Reichman served as the Company's President and Chief Executive
Officer during all of fiscal year 1998. The following discussion sets forth     
the bases for Mr. Reichman's compensation during fiscal year 1998 and the       
relationship between his compensation and the performance of the Company.       

  Annual Base Salary: Mr. Reichman's base salary was initially fixed
in October 1995 by his employment agreement at $375,000 per year. Mr.           
Reichman earned the same base salary for fiscal year 1998. Mr. Reichman's       
salary is subject to increase by the Compensation Committee. The                
Compensation Committee authorized a $25,000 salary increase for fiscal year     
1996. Mr. Reichman declined to accept the salary increase. Pursuant to the      
terms of his employment agreement, as of the first day of each fiscal year      
Mr. Reichman's salary is to be increased by at least the percentage             
increase in the cost of living in Boston, Massachusetts. The Compensation       
Committee reviewed the Company's performance during fiscal year 1998 and        
the contributions of Mr. Reichman to that performance, as well as Mr.           
Reichman's anticipated responsibilities in fiscal year 1999. Given the          
Company's continued losses, the Compensation Committee did not authorize an     
increase in Mr. Reichman's base salary for fiscal year 1998. Mr. Reichman       
has declined to accept a cost of living increase set forth in his               
Employment Agreement for the last three fiscal years.                           

Annual Bonus: As stated above, the Compensation Committee       
determined that none of the Named Executive Officers would be eligible to       
participate in the SEIP for fiscal year 1998.                                   

Stock Options: Mr. Reichman was not awarded any stock options   
during fiscal year 1998.                                                        

 In fiscal year 1998, Mr. Reichman continued to lead the Company's
return to its core competency as a single-branded outlet operator by            
increasing the number of stores devoted exclusively to selling Levi Strauss     
brand apparel and accessories to 95 by the end of the year. In furtherance      
of the Company's focus on its outlet business, the Company purchased 25         
Levi's(R) and Dockers(R) outlets from a subsidiary of Levi Strauss in           
September 1998. The Company also dissolved and wound up its joint venture       
with a subsidiary of Levi Strauss in fiscal 1998, and assumed full              
ownership of the joint venture's eleven Levi's(R) Outlets stores in October     
1998. In connection with these transactions, the Company renegotiated its       
key trademark license with Levi Strauss, among other things, to permit the      
Company to substitute new stores for underperforming outlet stores, to          
extend the term of the license generally and to extend it for additional        
periods as to outlet stores that the Company remodels. During fiscal year       
1998, the Company also closed additional unprofitable mall-based specialty      
stores and planned and implemented significant overhead reductions. The         
Committee believes that Mr. Reichman's successful completion of these           
important steps in the Company's strategic transition will contribute           
significantly to the Company's efforts to regain profitability.                 

Throughout fiscal year 1998, the Company continued to face the  
challenges imposed by the difficult market for Levi Strauss brand apparel.      
The Company's operating performance, like that of other apparel retailers       
that are heavily dependent on sales of Levi's(R) brand merchandise,             
continued to be affected by reduced consumer demand in the United States        
for Levi's(R) brand products. Mr. Reichman directed the Company's response      
to these market conditions, with primary responsibility for store               
operations, store construction and design and real estate, as well as           
merchandising and marketing. The Company's operating performance and the        
performance of its Common Stock during the fiscal year were disappointing.      
The Committee believes that, although the Company did not become profitable     
in fiscal year 1998, performance improved in that the Company's losses          
decreased from those incurred in fiscal year 1997.                              

The Compensation Committee is satisfied that Mr. Reichman's     
contributions to the Company in fiscal year 1998, particularly the steps he     
has taken to return the Company to profitability in fiscal year 1999,           
warrant his compensation for fiscal year 1998.                                  

THE COMPENSATION COMMITTEE    
James G. Groninger    
Bernard M. Manuel     
Peter L. Thigpen    

PERFORMANCE GRAPH     

 The following Performance Graph compares the Company's cumulative
stockholder return with that of a broad market index (Standard & Poor's         
Industrials Index), one published industry index (Standard & Poor's Retail      
(Specialty-Apparel) Index) and a selected peer group for each of the most       
recent five years ended January 31. The peer group consists of Big Dog          
Holdings, Inc.; Philip Van Heusen Corporation; the Cato Corporation;            
Charming Shoppes, Inc.; Filene's Basement Corp.; and Catherine's Stores         
Corporation. The cumulative stockholder return for shares of Common Stock       
and for each of the indices and the peer group is calculated assuming that      
$100 was invested on January 31, 1994. The Company paid no cash dividends       
during the periods shown. The performance of the indices is shown on a          
total return (dividends reinvested) basis. The graph lines merely connect       
January 31 of each year and do not reflect fluctuations between those           
dates.                                                                          

COMPARISON OF FIVE-YEAR CUMULATIVE RETURN     

[GRAPH]     

                                                                [Download Table]


                                                             S&P RETAIL            
                                                 S&P        (SPECIALTY-            
 MEASUREMENT PERIOD                           INDUSTRIALS    APPAREL)              
 (FISCAL YEAR COVERED)       DESIGNS, INC.      INDEX         INDEX      PEER GROUP

                                                                                   
       1994                  100.00              100.00        100.00    100.00    
       1995                   58.0               102.00        80.00     50.00     
       1996                   45.0               140.00        95.00     30.00     
       1997                   47.0               176.00        121.00    40.00     
       1998                   17.0               223.00        219.00    42.00     
       1999                   22.00              306.00        372.00    32.00     

        The graph and other data used above were prepared by Standard &            
Poor's Compustat Services, a division of The McGraw-Hill Companies.                


THE HOLTZMAN GROUP SOLICITATION     

 The Holtzman Group has nominated five individuals for election to
the Board of Directors in opposition to the Company's nominees and has also     
stated that it intends to present the Holtzman Proposal. On July 19, 1999,      
the Holtzman Group filed a preliminary proxy statement with the SEC for the     
purpose of soliciting proxies in favor of its nominees for the Board of         
Directors and the Holtzman Proposal.                                            

THE COMPANY BELIEVES THAT THE ELECTION OF THE HOLTZMAN GROUP'S  
SLATE OF NOMINEES AND THE APPROVAL OF THE HOLTZMAN PROPOSAL WOULD BE            
HARMFUL TO THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT                 
STOCKHOLDERS VOTE ON THE ENCLOSED BLUE PROXY CARD IN FAVOR OF THE SLATE OF      
DIRECTORS NOMINATED BY THE BOARD (SEE PAGE 2) AND AGAINST THE HOLTZMAN          
PROPOSAL. THE COMPANY ALSO URGES STOCKHOLDERS NOT TO VOTE ON ANY PROXY CARD     
THAT MAY BE FURNISHED BY THE HOLTZMAN GROUP.                                    

BACKGROUND. On December 7, 1998, the Holtzman Group filed a     
preliminary Consent Solicitation Statement with the Securities and Exchange     
Commission for the purpose of seeking stockholder consents to remove,           
without cause, five of the six members of the Company's Board of Directors      
and replace them with its own nominees and to approve certain other             
proposals with respect to the Company's By-Laws. The Holtzman Group's           
consent solicitation expired on February 11, 1999 without any of its            
proposals being approved by the Company's stockholders.                         

 In December 1998, the Board of Directors of Designs determined to
maximize stockholder value in the short term through a sale of the Company.     
At that time, the Board established a Special Committee consisting solely       
of independent outside Directors to direct the sale process. To assist in       
this process, the Board authorized the engagement of Shields & Company,         
Inc. as financial advisor.                                                      

In early 1999 the Special Committee, acting through Shields &   
Company, contacted 72 third parties which Shields & Company and the Special     
Committee believed might be interested in purchasing the Company. Of these      
72 third parties, 17 expressed interest and thereafter received a detailed      
memorandum describing the Company and its business. Potential buyers who        
indicated that they wished to proceed further, including Mr. Holtzman,          
received additional financial information concerning the Company. In            
addition, the Company established a data room that was available to             
potential buyers, including Mr. Holtzman. A draft definitive acquisition        
agreement was distributed on April 1, 1999 to interested parties, who were      
requested to submit a mark-up of the agreement along with their bids on or      
before April 15, 1999.                                                          

   On April 28, 1999, Mr. Holtzman submitted a conditional proposal to
explore the purchase of Designs for $3.65 per share. The proposal indicated     
that the purchase would be funded with approximately $20 million of equity      
and $40 million of debt. In his proposal letter, Mr. Holtzman indicated         
that he was "highly confident that the debt financing required for the          
transaction is available." Mr. Holtzman's proposal was subject to several       
conditions:                                                                     

(1)    "completion of a satisfactory inventory appraisal";      
   (2)    "satisfactory resolution of the $5 million tax assessment by
     the Internal Revenue Service for the year ending 1992";
   (3)    the prior written consent of Levi Strauss to the assignment,
       sublicense or transfer of Designs' rights and obligations
        under the Amended and Restated Trademark License Agreement
  dated as of October 31, 1998, with Levi Strauss (the
"License Agreement") to JMI or its affiliates;    
(4)    obtaining debt and equity financing; and                 
(5)    an amendment to Designs' Shareholder Rights Agreement to 
provide that "it is not applicable to the proposed
transaction."                                     

In a May 5, 1999 letter responding to Mr. Holtzman, the Special 
Committee advised Mr. Holtzman of its decision to pursue his proposal and       
its willingness to negotiate a definitive acquisition agreement, but            
indicated that the first three conditions to Mr. Holtzman's proposal            
described above should be resolved prior to entering into a definitive          
agreement. The Special Committee indicated that it had directed management      
and its legal and financial advisors to cooperate with JMI in satisfying        
these conditions expeditiously. The Special Committee also said it would        
recommend to the Designs Board of Directors that the Designs Shareholder        
Rights Agreement be amended so as to be inapplicable to the proposed            
transaction.                                                                    

 In its response, the Special Committee also urged Mr. Holtzman to
submit a mark-up of the draft definitive agreement that had been previously     
sent to him. In addition, it stated that before entering into a definitive      
agreement with Mr. Holtzman, the Special Committee would need access to his     
proposed funding sources "to assess the viability of the proposed financing     
arrangement."                                                                   

   On June 24, 1999, Mr. Holtzman withdrew his proposal, alleging that
the Special Committee was not committed to the sale of the Company and was      
impeding the due diligence process. The Special Committee has categorically     
denied those allegations, and believes that Holtzman's assertions are           
nothing more than an attempt to distract attention from the fact that he        
was unable or unwilling to satisfy major contingencies to his proposal. Mr.     
Holtzman failed to obtain the required consent from Levi Strauss & Co.          
under its license agreement with the Company. In fact, in the Special           
Committee's view, Mr. Holtzman did not even make a good faith attempt to        
seek the Levi Strauss & Co. consent. In connection with its consideration       
of whether or not to consent to the proposed change in ownership of             
Designs, Levi Strauss & Co. requested certain information from Mr. Holtzman     
and Mr. Holtzman never supplied Levi Strauss & Co. with the requested           
information. Mr. Holtzman never responded to the Special Committee's            
request, made on May 5, 1999 and repeated several times thereafter, that        
Mr. Holtzman provide comments on the draft acquisition agreement that the       
Special Committee delivered to Mr. Holtzman on April 1st. Further, despite      
Holtzman's assertion that he was "highly confident" that debt financing for     
his proposal would be available, he failed to provide any evidence to the       
Special Committee that he was able to secure commitments for such               
financing.                                                                      

 Following the withdrawal by Holtzman of his acquisition proposal,
the Special Committee recommended to the Designs Board of Directors that        
its Shareholder Rights Agreement be amended to permit Mr. Holtzman to speak     
with the five largest shareholders of Designs for the purpose of                
ascertaining their interest in participating with Mr. Holtzman in the           
acquisition of Designs. The Special Committee also recommended that the         
amendment become effective upon Mr. Holtzman's satisfaction of the              
following three conditions: (1) that he formally request the consent of         
Levi Strauss & Co. for his proposed acquisition of control of Designs and       
provide Levi Strauss & Co. with all the information that Levi Strauss & Co.     
had requested; (2) that he set forth in writing any material information        
concerning Designs that he believes he has not already received; and (3)        
that he provide a mark-up of the draft acquisition agreement, which the         
Special Committee had been requesting since April. The Special Committee        
also recommended to the Designs Board of Directors that the Designs             
Shareholder Rights Agreement be amended to exempt from the Agreement any        
acquisition of Common Stock made on or before November 7, 1999 pursuant to      
an all-cash tender offer for any and all outstanding shares at a price of       
not less than $3.65 per share where the purchaser has irrevocably committed     
to effect a second-step cash-out merger for the same per share cash             
consideration paid in the tender offer (any such offer, a "qualifying           
offer")                                                                         

On July 6, 1999, the Special Committee sent a letter to Designs 
stockholders describing the foregoing events and stating in the letter that     
if within a reasonable period of time Mr. Holtzman could obtain the consent     
of Levi Strauss & Co. and firm up his financing, the Special Committee          
would recommend to the Board of Directors that Designs enter into a             
definitive acquisition agreement with Mr. Holtzman at $3.65 per share in        
cash. On July 7, 1999, the Board of Directors approved all of the               
amendments to the Shareholder Rights Agreement proposed by the Special          
Committee.                                                                      

 DESPITE THE EFFORTS OF THE SPECIAL COMMITTEE TO FACILITATE A SALE
OF DESIGNS TO MR. HOLTZMAN, HE EITHER COULD NOT OR WOULD NOT DELIVER ON HIS     
PROPOSAL TO ACQUIRE DESIGNS AT $3.65 PER SHARE.                                 

   ELECTION OF DIRECTORS. For the reasons discussed below, the Company
believes that it is not in the best interests of Designs stockholders to        
elect the Holtzman Group nominees to the Board.                                 

According to the Holtzman Group's own proxy materials, one of   
Holtzman's plans if the Holtzman Group nominees are elected is to cause         
Designs to implement a share repurchase program. The Company believes that,     
if the Holtzman Group nominees are elected, Holtzman would acquire              
effective control of Designs at an average cost materially below the $3.65      
per share previously offered by him. Mr. Holtzman would enhance his             
ownership position through a reduction in the number of outstanding shares      
caused by the repurchase program, coupled with any additional purchases by      
JMI. The Company considers this to be a classic "creeping acquisition"          
strategy that we strongly believe is not in the best interests of the           
stockholders of Designs.                                                        

   Holtzman states that if his nominees are elected, they will seek to
enhance shareholder value through a sale of Designs. In the Board's view,       
this is an empty promise. Designs, through its financial advisor, contacted     
72 potential buyers. Moreover, the fact that Designs was for sale was           
publicly disclosed. Nonetheless, no credible offer to acquire Designs           
emerged despite an intensive effort to seek a buyer. The Company believes       
that Holtzman's purported plan is utterly without credibility and that his      
real agenda is to acquire effective control of Designs "on the cheap"           
through a creeping acquisition.                                                 

   The Company also believes that its relationship with Levi Strauss &
Co. is the most significant asset of the Company. The License Agreement         
prohibits any assignment or transfer by the Company of any of its rights or     
obligations under the License Agreement, including in connection with "a        
direct or indirect transfer of control" of the Company, without the prior       
approval of Levi Strauss & Co. Accordingly, in connection with any              
transaction involving such a transfer of control, the Company would be          
required to obtain the prior consent of Levi Strauss & Co. in order to          
avoid a breach of the terms of the License Agreement. The Holtzman Group        
asserts that the proposed election of JMI Nominees is not a "transfer of        
control" under the License Agreement with Levi Strauss & Co. In a letter to     
the Company and Jewelcor Management, Inc. dated July 29, 1999, Levi Strauss     
& Co. takes the position that the proposed displacement of the Designs          
board in its entirety, and a sale of Designs to a third party, are              
triggering events under the prohibition against transfers without the           
consent of Levi Strauss & Co. Additionally, the letter states that Levi         
Strauss & Co. will not waive its rights under the License Agreement and         
presently intends to exercise them fully. The Company currently takes no        
position on this interpretation of the License Agreement. In light of the       
letter and Holtzman's previous conduct in connection with the matter of         
obtaining consent from Levi Strauss & Co., and in particular his failure to     
provide information that was specifically requested by Levi Strauss & Co.,      
Designs believes there is a material risk that Levi Strauss & Co. would not     
give its consent to any transaction constituting "a direct or indirect          
transfer of control" to Holtzman. In the Company's view, the key point is       
not rights under a contract. Given the importance of Levi Strauss & Co. to      
Designs, the Company believes that any erosion of the relationship with         
Levi Strauss & Co. also erodes the value of the Company and is not in the       
stockholder's best interests.                                                   

   THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT ELECTION OF THE
HOLTZMAN NOMINEES IS NOT IN THE BEST INTERESTS OF THE COMPANY'S                 
STOCKHOLDERS AND URGES STOCKHOLDERS TO REJECT HIS SOLICITATION. YOUR BOARD      
OF DIRECTORS THEREFORE REQUESTS THAT YOU SIGN, DATE AND RETURN THE ENCLOSED     
BLUE PROXY CARD, WHETHER OR NOT YOU HAVE PREVIOUSLY SIGNED AND RETURNED THE     
WHITE PROXY CARD SOLICITED BY THE HOLTZMAN GROUP.                               

PROPOSAL 2. HOLTZMAN PROPOSAL RELATING TO RIGHTS PLAN     

The Holtzman Group is also proposing that the Company's         
stockholders approve a resolution recommending that the Board of Directors      
of the Company terminate the Company's Shareholder Rights Agreement dated       
as of May 1, 1995, together with any amendments thereto (the "Rights            
Plan").                                                                         

  The Board of Directors adopted the Rights Plan in 1995 in response
to its concerns that a person or group could acquire control of the             
Company, in the open market or otherwise, without paying an appropriate         
premium for control and without offering a fair and adequate price to all       
stockholders. The Rights Plan is designed to deter coercive takeover            
tactics and to otherwise encourage third parties interested in acquiring        
the Company to negotiate with the Board of Directors. In particular, the        
Rights Plan is intended to (i) reduce the risk of coercive two-tiered,          
front-end loaded or partial offers which may not offer fair value to all        
stockholders; (ii) mitigate against market accumulators who through open        
market and/or private purchases may achieve a position of substantial           
influence or control without paying to selling or remaining stockholders a      
fair control premium; (iii) deter market accumulators who are simply            
interested in putting the Company into "play"; (iv) restrict self-dealing       
by a substantial stockholder; and (v) preserve the Board of Directors'          
bargaining power and flexibility to deal with third-party acquirors and to      
otherwise seek to maximize values for all stockholders.                         

As recent events demonstrate, the Rights Plan is not intended to
prevent or deter a proxy contest or an offer to acquire the Company at a        
price and on terms that would be in the best interests of all stockholders.     
If the Board of Directors determines that an unsolicited offer is fair and      
on terms that are otherwise in the best interests of stockholders, the          
Board of Directors can redeem the rights issued under the Rights Plan or        
amend the Rights Plan in order to permit the offer to proceed. Furthermore,     
as discussed above, the Company amended the Rights Plan so that it would        
not apply to any offer that meets the criteria of a "qualifying offer."         

   In light of Mr. Holtzman's previous conditional "offers" to acquire
the outstanding Common Stock of the Company and his intent, as disclosed in     
his proxy statement, to cause the Company to repurchase up to five million      
shares of Common Stock held by stockholders other than himself concurrently     
with his own accumulation of additional shares of Common Stock in the open      
market, stockholders should consider whether Mr. Holtzman is attempting to      
gain control of the Company without paying any control premium to all the       
stockholders. If so, this is the very scenario that the Rights Plan was         
intended to prevent.                                                            

THE BOARD OF DIRECTORS CONSIDERS THE CONTINUATION OF THE RIGHTS 
PLAN, AS AMENDED, TO BE IN THE BEST INTERESTS OF ITS STOCKHOLDERS AND           
THEREFORE RECOMMENDS A VOTE AGAINST THE HOLTZMAN PROPOSAL (PROPOSAL 2).         

ADDITIONAL INFORMATION    

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                  

The Company entered into a consulting agreement with Mr. Berger 
dated as of December 21, 1994 (the "Consulting Agreement") in which he          
agreed to provide an average of four days per week of consulting services       
to the Company until December 20, 1997. As compensation for such services,      
among other things, the Company agreed to pay Mr. Berger at the rate of         
$250,000 per annum and to provide him and his spouse health benefits during     
and after the term of the Consulting Agreement. The Consulting Agreement        
contains covenants pursuant to which Mr. Berger agreed during the term of       
the Consulting Agreement and for a two year period following expiration of      
the agreement, not to have any connection with any business that competes       
with the business of the Company in the eastern United States. Under the        
Consulting Agreement, the Company also agreed, during the term of the           
agreement, to make available to Mr. Berger an automobile for use in             
connection with his work for the Company and to reimburse him for the           
expenses of operation of the automobile. The Company further agreed to          
transfer title to such automobile to Mr. Berger, without charge to him,         
promptly after expiration of the term of the agreement, and such                
automobile, having a value of approximately $19,800 at the time of              
transfer, was transferred to Mr. Berger in January 1998. From January 1,        
1998 through December 31, 1998, Mr. Berger was paid to provide consulting       
services to the Company on a month-to-month basis at the rate of $50,000        
per annum. During this period and thereafter, the Company has provided, and     
will continue to provide, health benefits to Mr. Berger and his spouse          
pursuant to the Consulting Agreement. The Company paid Mr. Berger $45,833       
in consulting fees pursuant to this arrangement for his services in fiscal      
year 1998.                                                                      

BOARD OF DIRECTORS AND COMMITTEE MEETINGS                                       

The Board of Directors met seven times during fiscal year 1998. 
Messrs. Reichman, Groninger and Manuel attended all meetings of the Board,      
Messrs. Thigpen and Berger attended six meetings and Mr. Shapiro attended       
four meetings.                                                                  

   The Board of Directors has an Audit Committee consisting of Messrs.
Berger, Groninger, Shapiro, and Thigpen, a Compensation Committee               
consisting of Messrs. Groninger, Manuel and Thigpen, and a Corporate            
Governance Committee consisting of Messrs. Berger, Groninger, Manuel,           
Shapiro and Thigpen.                                                            

The Audit Committee meets periodically with management and the  
Company's independent accountants to review matters relating to the             
Company's financial reporting, the adequacy of internal accounting controls     
and the scope and results of audit work. The Audit Committee met four times     
during fiscal year 1998. Mr. Thigpen attended all meetings of the Audit         
Committee, Messrs. Groninger and Berger attended three meetings and Mr.         
Shapiro attended two meetings.                                                  

 The Compensation Committee meets periodically to review executive
and employee compensation and benefits (including stock-based compensation      
awards under the 1992 Stock Incentive Plan), supervise benefit plans and        
make recommendations regarding them to the Board of Directors. The              
Compensation Committee met twice in fiscal year 1998 and all members            
attended each meeting.                                                          

The Corporate Governance Committee is responsible for performing
functions related to governance of the Company, including, but not limited      
to, planning for the succession and promotion of executive officers of the      
Company, nominating individuals for election to the Board of Directors and      
establishing, coordinating and maintaining the Company's corporate              
compliance programs. The Corporate Governance Committee met once during         
fiscal year 1998 and all members attended the meeting.                          

   The Corporate Governance Committee is responsible for reviewing the
nomination of individuals for election to the Board of Directors by             
stockholders of the Company. Stockholders wishing to nominate an individual     
for election to the Board of Directors must send a letter to the Secretary      
of the Company stating the name and qualifications of the proposed nominee.     
The letter must be received by the Company within the time limits set by,       
and must in all other respects comply with, Section 4.16 of the By-Laws in      
order for the proposed nominee to be considered for election to the Board       
of Directors. Any stockholder who has complied with the timing,                 
informational and other requirements set forth in Section 4.16 and who          
seeks to make such a nomination, or such stockholder's representative, must     
be present in person at the Annual Meeting of Stockholders of the Company       
at which such nominee's election is to be considered.                           

On December 11, 1998, the Board of Directors formed a Special   
Committee in accordance with Section 4.5 of the By-Laws for the purpose of      
managing the process of seeking a buyer for the Company. The Special            
Committee consists of Messrs. Groninger, Manuel and Thigpen. The Special        
Committee met five times during fiscal year 1998 and all members attended       
each of such meetings.                                                          

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS                                

 On June 19, 1998, the Company dismissed its principal independent
accountants, Coopers & Lybrand L.L.P. ("Coopers & Lybrand"). On June 24,        
1998, the Company engaged Arthur Andersen LLP ("Arthur Andersen") as its        
new principal independent accountants. The Company's Board of Directors and     
its Audit Committee unanimously approved the change of principal                
independent accountants.                                                        

Since January 28, 1995 to date Arthur Andersen has served and   
continues to serve as the principal independent accountant of The               
Designs/OLS Partnership (the "OLS Partnership"), the joint venture              
partnership between a subsidiary of the Company and a subsidiary of Levi's      
Only Stores, Inc., a subsidiary of Levi Strauss. For financial reporting        
purposes, the OLS Partnership's assets, liabilities and results of              
operations are consolidated with those of the Company.                          

 During fiscal year 1996 and fiscal year 1997 and thereafter until
its engagement of Arthur Andersen, the Company did not consult Arthur           
Andersen regarding the type of audit opinions that might be rendered on the     
Company's financial statements relating to such periods. Throughout those       
same periods, there were no matters that occurred that constituted either a     
disagreement or the kind of event described in Item 304(a)(1)(v) of             
Regulation S-K promulgated by the SEC.                                          

   During fiscal year 1996 and fiscal year 1997 and thereafter through
June 19, 1998, there were no disagreements between the Company and Coopers      
& Lybrand on matters of accounting principles or practices, financial           
statement disclosure, or auditing scope or procedure which, if not resolved     
to the satisfaction of Coopers & Lybrand, would have caused Coopers &           
Lybrand to make reference to the subject matter thereof in its reports.         
During the fiscal year 1996 and fiscal year 1997 and thereafter through         
June 19, 1998, there was no occurrence of the kinds of events described in      
Item 304(a)(1)(v) of Regulation S-K promulgated by the SEC. In addition,        
none of the reports issued by Coopers & Lybrand concerning the Company's        
financial statements for the Company's fiscal years ended February 1, 1997      
and January 31, 1998 and thereafter through June 19, 1998 contain any           
adverse opinion or disclaimer of opinion. Such reports were not qualified       
or modified as to uncertainty, audit scope, or accounting principles.           

SOLICITATION OF PROXIES     

Proxies may be solicited, without additional compensation, by   
directors, officers or employees of the Company by mail, telephone,             
facsimile, telegram, in person or otherwise. The Company will bear the cost     
of the solicitation of proxies, including the preparation, printing and         
mailing of the proxy materials. In addition, the Company will request           
banks, brokers and other custodians, nominees and fiduciaries to forward        
proxy material to the beneficial owners of the Common Stock and obtain          
their voting instructions. The Company will reimburse those firms for their     
expenses in accordance with the rules of the SEC and The New York Stock         
Exchange. In addition, the Company has retained Innisfree M&A Incorporated      
("Innisfree") to assist in the solicitation of proxies for a fee of [ ]         
plus out-of-pocket expenses. Innisfree will employ approximately 25 people      
to solicit the Company's stockholders.                                          

  Expenses related to the solicitation of stockholders, in excess of
those normally spent for an annual meeting, are expected to aggregate           
approximately [_______,] of which approximately [_______] has been spent to     
date.                                                                           

PARTICIPANTS IN THE SOLICITATION    

 Under applicable regulations of the SEC, each member of the Board
of Directors, certain executive officers of the Company and certain other       
corporate officers of the Company may be deemed to be a "participant" in        
the Company's solicitation of proxies. The principal occupation and             
business address of each person who may be deemed a participant are set         
forth in Appendix A hereto. Information about the present ownership by the      
directors and named executive officers of the Company of the Company's          
securities is provided in this Proxy Statement and the present ownership of     
the Company's securities by other participants is listed in Appendix A.         

STOCKHOLDER PROPOSALS     

  Pursuant to the Company's By-Laws, the Company generally holds its
annual meeting of stockholders in June. The date of the 1999 Annual Meeting     
was delayed due to the Company's efforts to negotiate a sale transaction        
with JMI. The Company intends to hold its 2000 annual meeting of                
stockholders in June. If the Company does so, the deadline for submitting       
stockholder proposals for inclusion in the Company's proxy materials will       
be a reasonable time before the Company begins to print and mail its proxy      
materials. If the Company does not hold the 2000 annual meeting of              
stockholders on a date that is more than 30 days from the date of the           
Annual Meeting, then stockholder proposals for inclusion in the proxy           
materials related to the 2000 Annual Meeting of Stockholders must be            
received by the Company at its executive offices no later than _______,         
2000.                                                                           

 In addition, the By-Laws provide that for business to be properly
brought before an Annual Meeting of Stockholders (or any Special Meeting in     
lieu of an Annual Meeting of Stockholders), a stockholder must: (i) give        
timely written notice to the Secretary of the Company describing any            
proposal to be brought before such meeting; and (ii) be present at such         
Annual Meeting, either in person or by a representative. Such procedural        
requirements are fully set forth in Section 3.14 of the By-Laws. A              
stockholder's notice will be timely if delivered to, or mailed to and           
received by, the Company not less than seventy-five days nor more than one      
hundred twenty days prior to the anniversary date of the immediately            
preceding Annual Meeting (the "Anniversary Date"). To bring an item of          
business before the 2000 Annual Meeting, a stockholder must deliver the         
requisite notice of such item to the Secretary of the Company not before        
May 25, 2000 nor later than July 9, 2000. In the event the Annual Meeting       
is scheduled to be held on a date more than thirty days before the              
Anniversary Date or more than sixty days after the Anniversary Date,            
however, a stockholder's notice will be timely if delivered to, or mailed       
to and received by, the Company not later than the close of business on the     
later of (a) the seventy-fifth day prior to the scheduled date of such          
Annual Meeting or (b) the fifteenth day following the day on which public       
announcement of the date of such Annual Meeting is first made by the            
Company.                                                                        

OTHER MATTERS     

   As of this date, management knows of no business which may properly
come before the Annual Meeting other than that stated in the Notice of          
Annual Meeting. Should any other business arise, proxies given in the           
accompanying form will be voted in accordance with the discretion of the        
person or persons voting them. The Annual Report for fiscal year 1998 is        
being delivered to stockholders with this Proxy Statement, but is not           
incorporated herein and is not to be deemed a part hereof.                      

IMPORTANT     

1. If your shares are registered in your own names, please sign,
date and mail the enclosed BLUE Proxy Card to Innisfree in the postage-paid     
envelope provided.                                                              

2. If your shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can sign a BLUE Proxy Card with           
respect to your shares and only after receiving your specific instructions.     
To ensure that your shares are voted, you should also contact the person        
responsible for your account and give instructions for a BLUE Proxy Card to     
be issued representing your shares.                                             

If you have any questions about giving your proxy or require    
assistance, please call:                                                        

INNISFREE M&A INCORPORATED    
501 MADISON AVENUE, 20th FLOOR    
NEW YORK, NEW YORK 10022    
CALL TOLL FREE: (888) 750-5834    
BANKS & BROKERS CALL COLLECT: (212) 750-5833    

                                                            APPENDIX A

INFORMATION CONCERNING THE DIRECTORS AND CERTAIN EXECUTIVE OFFICERS     
AND EMPLOYEES OF DESIGNS AND OTHER PARTICIPANTS WHO MAY     
ALSO SOLICIT PROXIES ON BEHALF OF DESIGNS     

   The following table sets forth the name, principal business address
and the present office or other principal occupation or employment, and the     
name, principal business and the address of any corporation or other            
organization in which such employment is carried on, of the directors and       
certain executive officers of Designs and certain employees and other           
representatives of Designs who may also solicit proxies from stockholders       
of Designs (collectively, the "Participants"). Unless otherwise indicated,      
the principal occupation refers to such person's position with Designs and      
the business address is 66 B Street, Needham, MA 02494.                         

DIRECTORS                                                                       

  The principal occupations of the Company's directors are set forth
on pages 6 and 7 of this Proxy Statement. The principal business address of     
Mr. Reichman is that of the Company. The name, business and address of the      
other director-participants' organization of employment are as follows:         

Name                                   Address                                  

Stanley I. Berger                      100 Essex Road                           
                     Chestnut Hill, MA 02467

James G. Groninger                     The Bay South Company                    
                       101 Shockoe Slip, Suite M
                 Richmond, VA  23219

Bernard M. Manuel                      Cygne Designs, Inc.                      
           1372 Broadway
                 New York, NY  10018

Melvin I. Shapiro                      2044 Beacon Street                       
              Waban, MA  02168

Peter L. Thigpen                       Executive Reserves                       
                                    700 Larkspur Landing Circle, Suite 273
                 Larkspur, CA  94939

EXECUTIVE OFFICERS AND MANAGEMENT                                               

The principal occupation of the Company's executive officers and
certain other members of management and employees who are deemed                
participants in the solicitation of proxies are set forth below. Except as      
otherwise specified below, the principal business address of each of such       
persons is that of the Company.                                                 

Name                                 Principal Occupation                       

Scott N. Semel                       Executive Vice President, General          
               Counsel and Secretary

Carolyn R. Faulkner                  Vice President, Chief Financial Officer    
       and Treasurer

Anthony E. Hubbard                   Vice President and Deputy General Counsel  

Shelly E. Mokas                      Controller                                 

SHIELDS & COMPANY, INC.                                                         

In December 1998, Designs retained Shields & Company, Inc.      
("Shields") to act as its financial advisor in connection with the proposed     
sale of the Company, for which Shields may receive substantial fees, as         
well as reimbursement of reasonable out-of-pocket expenses. In addition,        
Designs has agreed to indemnify Shields and certain persons related to it       
against certain liabilities arising out of their engagement. Shields is an      
investment banking and advisory firm that provides a range of financial         
services for institutional and individual clients. Shields does not admit       
that it or any of its directors, officers or employees is a "participant"       
(as defined in Schedule 14A promulgated under the Exchange Act) in the          
solicitation of proxies by the Company, or that Schedule 14A requires the       
disclosure of certain information concerning Shields. In connection with        
its role as financial advisor to Designs, certain investment banking            
employees of Shields may communicate in person, by telephone or otherwise       
with a limited number of institutions, brokers or other persons who are         
stockholders of Designs. Shields, through an affiliate, may trade               
securities of Designs for its own account and the account of its customers      
and, accordingly, may at any time hold a long or short position in such         
securities. As of July 16, 1999, Shields did not hold a position in shares      
of Common Stock for its own account. Additionally, in the normal course of      
its business, Shields may finance securities positions by bank and other        
borrowings and repurchase and securities borrowing transactions.                

Information with respect to the employees of Shields who may be 
deemed "Participants" is set forth below. None of the individuals named         
below owns any shares of Common Stock or has engaged in any transaction         
involving Designs Common Stock during the past two years. The principal         
business address of each of the persons listed below is 150 Federal Street,     
Boston, MA 02110.                                                               

Name                          Principal Occupation              

      Thomas J. Shields             Investment Banking and Advisory Services

      Jeffrey C. Bloomberg          Investment Banking and Advisory Services

INFORMATION REGARDING OWNERSHIP OF THE COMPANY'S SECURITIES BY PARTICIPANTS     

None of the Participants owns any of the Company's securities of
record but not beneficially. The number of shares of Common Stock held by       
directors and the Named Executive Officers is set forth on pages 5 and 6 of     
this Proxy Statement. The number of shares of Common Stock held by the          
other Participants is set forth below:                                          

               Share
Name                                 Ownership                  

Thomas J. Shields                    None                       

Jeffrey C. Bloomberg                 None                       

  Anthony E. Hubbard                   12,000 shares of Common Stock

Shelly E. Mokas                      6,400 shares of            
                      Common Stock

MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS                               

 Except as described in the Proxy Statement or in this Appendix A,
to the knowledge of the Company none of the Participants nor any of their       
respective affiliates or associates (together, the "Participant                 
Affiliates"), (i) directly or indirectly beneficially owns any shares of        
Common Stock of the Company or any securities of any subsidiary of the          
Company or (ii) has had any relationship with the Company in any capacity       
other than as a stockholder, employee, officer and director. Furthermore,       
except as described in the Proxy Statement or in this Appendix A, no            
Participant or Participant Affiliate is either a party to any transaction       
or series of transactions since the beginning of fiscal 1998, or has            
knowledge of any currently proposed transaction or series of transactions,      
(i) to which the Company or any of its subsidiaries was or is to be a           
party, (ii) in which the amount involved exceeds $60,000, and (iii) in          
which any Participant Affiliate had, or will have, a direct or indirect         
material interest.                                                              

Except for the employment and consulting agreements described in
the Proxy Statement, to the knowledge of the Company no Participant or          
Participant Affiliate has entered into any agreement or understanding with      
any person respecting any future employment by the Company or its               
affiliates or any future transactions to which the Company or any of its        
affiliates will or may be a party. Except as described in this Appendix A       
or in the Proxy Statement, to the knowledge of the Company there are no         
contracts, arrangements or understandings by any Participant Affiliate          
within the past year with any person with respect to the Company's              
securities.                                                                     

INFORMATION CONCERNING CERTAIN TRANSACTIONS IN COMMON STOCK BY PARTICIPANTS     
WITHIN THE PAST TWO YEARS                                                       

The following table sets forth all purchases and sales of Common
Stock by the Participants during the last two years:                            

                                                        [Enlarge/Download Table]


                                   NUMBER OF SHARES                DATE OF               
NAME                              PURCHASED (OR SOLD)          PURCHASE OR SALE  FOOTNOTE

                                                                                         
Stanley I. Berger                       (4,000)                     10/1/97        (3)   
                                        (5,780)                     12/5/97        (3)   
                                         1,090                      4/13/98        (4)   
                                         1,000                      6/1/98         (4)   
                                         1,440                      6/9/98         (4)   
                                         3,000                      6/9/98         (1)   
                                         1,200                      8/13/98        (4)   
                                         1,846                      9/28/98        (4)   
                                         1,297                     12/10/98        (4)   
                                          600                       2/8/99         (4)   
                                          387                       3/19/99        (4)   
                                          639                       4/8/99         (4)   
                                          615                       5/12/99        (4)   
                                          750                       5/19/99        (4)   
                                         1,043                      7/7/99         (4)   

Joel H. Reichman                        14,998                      11/7/97        (7)   
                                         5,000                      6/9/98         (2)   
                                        10,000                     11/23/98        (2)   

Scott N. Semel                          18,750                     11/14/97        (7)   
                                        (4,837)                    11/14/97        (8)   
                                        (1,161)                    12/30/97        (3)   
                                         5,000                     11/23/98        (2)   

Carolyn R. Faulkner                       200                       7/15/97        (2)   
                                          800                      10/15/97        (2)   
                                        12,000                     12/08/98        (2)*  

James G. Groninger                       1,818                      4/13/98        (4)   
                                         1,000                      6/1/98         (4)   
                                         1,440                      6/9/98         (4)   
                                         3,000                      6/9/98         (1)   
                                         1,200                      8/13/98        (4)   
                                         1,846                      9/28/98        (4)   
                                         1,297                     12/10/98        (4)   
                                          750                      12/28/98        (4)   
                                          705                       1/4/99         (4)   
                                          727                       1/11/99        (4)   
                                          631                       1/19/99        (4)   
                                         1,930                      1/25/99        (4)   
                                          539                       2/1/99         (4)   
                                         1,200                      2/8/99         (4)   
                                          695                       2/15/99        (4)   
                                          644                       2/22/99        (4)   
                                          750                       3/1/99         (4)   
                                          685                       3/8/99         (4)   
                                          761                       3/15/99        (4)   
                                          387                       3/19/99        (4)   
                                          750                       3/22/99        (4)   
                                         1,573                      3/29/99        (4)   
                                          666                       4/5/99         (4)   
                                          639                       4/8/99         (4)   
                                          695                       4/12/99        (4)   
                                          666                       4/19/99        (4)   
                                          727                       4/26/99        (4)   
                                          615                       4/30/99        (4)   
                                         1,200                      5/5/99         (4)   
                                         1,230                      5/12/99        (4)   
                                         1,500                      5/19/99        (4)   
                                          738                       5/26/99        (4)   
                                          786                       6/2/99         (4)   
                                          774                       6/9/99         (4)   
                                          923                       6/16/99        (4)   
                                          888                       6/24/99        (4)   
                                         1,090                      6/28/99        (4)   
                                         1,000                      7/1/99         (4)   
                                         2,086                      7/7/99         (4)   

Melvin I. Shapiro                       27,000                      10/8/97        (7)   
                                       (10,000)                    10/14/97        (5)   
                                        (5,000)                    10/15/97        (5)   
                                         1,090                      4/13/98        (4)   
                                         1,440                      6/9/98         (4)   
                                         3,000                      6/9/98         (1)   
                                         1,846                      9/28/98        (4)   
                                          827                       1/25/99        (4)   
                                          600                       2/8/99         (4)   
                                          387                       3/19/99        (4)   
                                          639                       4/8/99         (4)   
                                          615                       5/12/99        (4)   
                                          750                       5/19/99        (4)   
                                         1,043                      7/7/99         (4)   

Bernard M. Manuel                       16,200                      10/6/97        (7)   
                                         1,818                      4/13/98        (4)   
                                         1,000                      6/1/98         (4)   
                                          960                       6/9/98         (4)   
                                         3,000                      6/9/98         (1)   
                                         1,200                      8/13/98        (4)   
                                         1,846                      9/28/98        (4)   
                                         1,297                     12/10/98        (4)   
                                          750                      12/28/98        (4)   
                                          705                       1/4/99         (4)   
                                          727                       1/11/99        (4)   
                                          631                       1/19/99        (4)   
                                         1,655                      1/25/99        (4)   
                                          539                       2/1/99         (4)   
                                         1,200                      2/8/99         (4)   
                                          695                       2/15/99        (4)   
                                          644                       2/22/99        (4)   
                                          750                       3/1/99         (4)   
                                          685                       3/8/99         (4)   
                                         1,573                      3/29/99        (4)   
                                          639                       4/8/99         (4)   
                                          695                       4/12/99        (4)   
                                          666                       4/19/99        (4)   
                                          727                       4/26/99        (4)   
                                          615                       4/30/99        (4)   
                                         1,200                      5/5/99         (4)   
                                         1,500                      5/19/99        (4)   
                                          738                       5/26/99        (4)   
                                          786                       6/2/99         (4)   
                                          923                       6/16/99        (4)   
                                          888                       6/24/99        (4)   
                                         1,090                      6/28/99        (4)   
                                         1,000                      7/1/99         (4)   
                                         1,043                      7/7/99         (4)   

Peter L. Thigpen                          500                       8/20/97        (2)   
                                         1,000                      1/20/98        (2)   
                                         1,818                      4/13/98        (4)   
                                         1,440                      6/9/98         (4)   
                                         3,000                      6/9/98         (1)   
                                         1,200                      8/13/98        (4)   
                                         1,846                      9/28/98        (4)   
                                         1,297                     12/10/98        (4)   
                                          750                      12/28/98        (4)   
                                          705                       1/4/99         (4)   
                                          727                       1/11/99        (4)   
                                          631                       1/19/99        (4)   
                                         1,930                      1/25/99        (4)   
                                          539                       2/1/99         (4)   
                                         1,200                      2/8/99         (4)   
                                          695                       2/15/99        (4)   
                                          644                       2/22/99        (4)   
                                          750                       3/1/99         (4)   
                                          685                       3/8/99         (4)   
                                          761                       3/15/99        (4)   
                                          387                       3/19/99        (4)   
                                          750                       3/22/99        (4)   
                                         1,573                      3/29/99        (4)   
                                          666                       4/5/99         (4)   
                                          639                       4/8/99         (4)   
                                          695                       4/12/99        (4)   
                                          666                       4/19/99        (4)   
                                          727                       4/26/99        (4)   
                                          615                       4/30/99        (4)   
                                         1,200                      5/5/99         (4)   
                                         1,230                      5/12/99        (4)   
                                         1,500                      5/19/99        (4)   
                                          738                       5/26/99        (4)   
                                          786                       6/2/99         (4)   
                                          774                       6/9/99         (4)   
                                          923                       6/16/99        (4)   
                                          888                       6/24/99        (4)   
                                         1,090                      6/28/99        (4)   
                                         1,000                      7/1/99         (4)   
                                         2,086                      7/7/99         (4)   

Anthony E. Hubbard                       2,500                      10/6/97        (1)   
                                         2,500                      6/9/98         (1)   
                                         3,000                      6/9/98         (6)   

Shelly E. Mokas                          1,000                      10/6/97        (1)   
                                         1,000                      6/9/98         (1)   
                                         3,000                      6/9/98         (6)   
                                          500                       9/28/98        (1)   
                                         1,000                      12/9/98        (2)   
Footnotes:                                                                               

(1)     Stock option award.                                                              
(2)     Open market or private purchase.                                                 
(3)     Disposition pursuant to a bona fide gift.                                        
(4)     Acquisition of shares via Director compensation.                                 
(5)     Open market or private sale.                                                     
(6)     Issued pursuant to conditioned stock award.                                      
(7)     Acquisition of shares via exercise of a stock option.                            
(8)     Tender of shares toward purchase of a stock option exercise.                     
*       Purchased by spouse's IRA                                                        


PROXY     

DESIGNS, INC.     

ANNUAL MEETING OF STOCKHOLDERS      

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS     

FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON      
SEPTEMBER 22, 1999                                                              

The undersigned stockholder of Designs, Inc. hereby appoints        
______________, and each of them with full power of substitution and to         
each substitute appointed pursuant to such power, as proxy or proxies, to       
cast all votes, as designated hereon, which the undersigned stockholder is      
entitled to cast at the Annual Meeting of the Stockholders of Designs, Inc.     
to be held at 1:00 p.m. local time on September 22, 1999, at One Post           
Office Square, Boston, Massachusetts 02109, and, at any and all                 
adjournments and postponements thereof, with all powers which the               
undersigned would possess if personally present (i) as designated below         
with respect to the matters set forth below and described in the                
accompanying Notice and Proxy Statement, and (ii) in their discretion with      
respect to any other business that may properly come before the Annual          
Meeting. The undersigned stockholder hereby revokes any proxy or proxies        
heretofore given by the undersigned to others for such Annual Meeting.          

THIS PROXY WHEN PROPERLY EXECUTED AND RETURNED WILL BE VOTED IN THE 
MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,        
THIS PROXY WILL BE VOTED (1) FOR THE ELECTION OF ALL NOMINEES LISTED IN         
PROPOSAL 1 AND (2) AGAINST PROPOSAL 2.                                          

PLEASE ACT PROMPTLY     
PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY CARD      
AND RETURN IT IN THE ENCLOSED ENVELOPE TODAY      

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE    
NOMINEES LISTED IN PROPOSAL 1 BELOW AND AGAINST PROPOSAL 2.                     

1.    Election of the nominees named below to the Board of Directors
of the Company.                                         

        For              Withhold         For All Except
   [ ]                [ ]                  [ ]

Nominees:     Joel H. Reichman,             
   James G. Groninger,
  Bernard M. Manuel,
      Melvin I. Shapiro, and
 Peter L. Thigpen.

   INSTRUCTION:      To withhold authority to vote
for any individual nominee, mark "For All   
Except" and write that nominee's name in the
space provided below.                       

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

2.    Holtzman proposal to terminate the Shareholder Rights         
Agreement.                                              

FOR           AGAINST         ABSTAIN       
[ ]              [ ]             [ ]        

 This proxy may be revoked prior to the time it is voted by delivering
to the Secretary of the Company either a written revocation or a proxy          
bearing a later date or by appearing at the Annual Meeting and voting in        
person.                                                                         

                  Dated: ___________________

                  Signature: _______________

                  Signature: _______________

                  Title: ___________________

                            Please date and sign here exactly as
                            name appears hereon. When signing as
                           attorney, administrator, trustee or
                              guardian, give full title as such; and
                              when stock has been issued in the name
                              of two or more persons, all must sign.

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘PRER14A’ Filing		Date		Other Filings
		4/28/02
		7/9/00
		5/25/00
		5/8/00
		1/29/00		10-K405
		11/12/99
		11/11/99
		11/7/99
		10/15/99
		9/22/99		DFAN14A,  PRE 14A
		9/14/99		10-Q,  DFAN14A
		9/12/99
Filed on:		8/13/99
		8/5/99
		7/29/99
		7/19/99		PREC14A
		7/16/99
		7/7/99		8-K,  DEFA14A
		7/6/99
		6/24/99		10-Q/A,  SC 13D/A
		5/8/99
		5/5/99
		4/28/99
		4/15/99
		4/1/99
		2/12/99
		2/11/99		PRE 14A,  SC 13G
		2/8/99		SC 13G
		1/30/99		10-K/A,  10-K405
		1/29/99
		12/31/98
		12/29/98		DEFA14A,  SC 13D
		12/21/98		DEFC14A
		12/11/98		8-K,  DEFA14A,  PREC14A
		12/10/98		8-K,  SC 13G/A
		12/7/98		PREN14A,  SC 13D/A
		11/27/98		SC 13D
		10/31/98		10-Q
		10/15/98
		6/24/98
		6/19/98
		6/4/98
		4/13/98
		1/31/98		10-K
		1/20/98
		1/1/98
		12/20/97
		5/9/97
		2/1/97		10-K405
		7/16/96
		4/17/96
		10/16/95
		5/1/95		8-K
		1/28/95		10-K,  ARS
		12/21/94
		1/31/94
		1/27/93
				List all Filings