SEC Info - Tween Brands, Inc. - ‘424B1’ on 5/21/02

SEC Info℠

Home

Help

Please Sign In

Tween Brands, Inc. – ‘424B1’ on 5/21/02

On: Tuesday, 5/21/02, at 8:59am ET · Accession #: 950168-2-1519 · File #: 333-87188

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/21/02  Tween Brands, Inc.                424B1                  1:183K                                   Donnelley Financial/FA

Prospectus — Rule 424(b)(1)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Too, Inc. (424(B)(1))                                 66    274K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Business Capitalization Caution Regarding Forward-Looking Statements Credit Facility Experts General, administrative and store operating expenses Gross income Index to Consolidated Financial Statements Inventories Legal Matters Management Management's Discussion and Analysis of Financial Condition and Results of Operations Net sales Offering, The Operating income Price Range of Common Stock and Dividends Report of Independent Accountants Risk Factors Selected Consolidated Financial and Operating Data Shareholders' equity Store Leases Agreement The Offering Too, Inc Underwriting Use of Proceeds Where You Can Find More Information
1	1st Page - Filing Submission
6	Risk Factors
7	The Offering
9	Caution Regarding Forward-Looking Statements
17	Use of Proceeds
18	Price Range of Common Stock and Dividends
19	Capitalization
"	Shareholders' equity
20	Selected Consolidated Financial and Operating Data
21	Management's Discussion and Analysis of Financial Condition and Results of Operations
22	Net sales
"	Gross income
23	General, administrative and store operating expenses
"	Operating income
26	Store Leases Agreement
27	Credit Facility
30	Business
40	Management
42	Underwriting
44	Legal Matters
"	Experts
"	Where You Can Find More Information
45	Too, Inc
46	Index to Consolidated Financial Statements
47	Report of Independent Accountants
52	Inventories

424B1 1st Page of 66 TOC ↑Top Previous Next ↓Bottom Just 1st
PROSPECTUS Filed pursuant to Rule 424(b)(1)
Registration No. 333-87188

2,400,000 Shares

[LOGO] Too, inc.

Common Stock

Too, Inc. is selling all of the shares of common stock in this offering.

Our common stock is listed on the New York Stock Exchange under the symbol
"TOO." On May 20, 2002, the last sale price of our common stock as reported on
the New York Stock Exchange was $33.70 per share.

Investing in our common stock involves risks. See "Risk Factors" beginning
on page 7 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

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

[Download Table]

Per Share Total
--------- -----

Public offering price................. $32.500 $78,000,000
Underwriting discount................. $ 1.706 $ 4,094,400
Proceeds to Too, Inc., before expenses $30.794 $73,905,600

The underwriters may purchase up to an additional 360,000 shares of our
common stock from us at the public offering price less underwriting discount to
cover over-allotments, if any.

The underwriters expect to deliver the shares against payment in New York,
New York on May 24, 2002.

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

Joint Lead and Book-Running Managers

Bear, Stearns & Co. Inc. JPMorgan

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

The date of this Prospectus is May 20, 2002

424B1 2nd Page of 66 TOC 1st Previous Next ↓Bottom Just 2nd
[Inside front cover artwork: images of 'tween girls wearing Limited Too
products; images of limitedtoo.com website; and image of mishmash/(R)/
storefront and interior.]

424B1 3rd Page of 66 TOC 1st Previous Next ↓Bottom Just 3rd
[Enlarge/Download Table]

Page

Prospectus Summary................................................................... 1
Caution Regarding Forward-Looking Statements......................................... 6
Risk Factors......................................................................... 7
Use of Proceeds...................................................................... 14
Price Range of Common Stock and Dividends............................................ 15
Capitalization....................................................................... 16
Selected Consolidated Financial and Operating Data................................... 17
Management's Discussion and Analysis of Financial Condition and Results of Operations 18
Business............................................................................. 27
Management........................................................................... 37
Underwriting......................................................................... 39
Legal Matters........................................................................ 41
Experts.............................................................................. 41
Where You Can Find More Information.................................................. 41
Index to Consolidated Financial Statements........................................... F-1

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

Limited Too(R) is a registered trademark of The Limited, Inc., licensed to
us. mishmash(R) and GirlCare(R) are registered trademarks of Too, Inc. and Too
Bucks/SM/ is a registered service mark of Too, Inc. All other trademarks,
service marks and trade names referred to in this prospectus are the property
of their respective owners.

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

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK OF
THE COMPANY, INCLUDING STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS AND
THE IMPOSITION OF PENALTY BIDS. FOR A DISCUSSION OF THESE ACTIVITIES, SEE
"UNDERWRITING." IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND
SELLING GROUP MEMBERS (IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN
PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NEW YORK STOCK
EXCHANGE IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE "UNDERWRITING."

Table of Contents

424B1 4th Page of 66 TOC 1st Previous Next ↓Bottom Just 4th
Prospectus Summary

This summary highlights information contained elsewhere in this prospectus.
Because it is a summary, it may not contain all of the information that is
important to you. To understand this offering fully, you should read this
entire prospectus carefully, including the risk factors and consolidated
financial statements included elsewhere in this prospectus and the documents
incorporated by reference into this prospectus. For the purposes of this
prospectus, unless the context otherwise requires, "Too, Inc.," "Too," "we,"
"our," "the Company" and "us" refer to Too, Inc. and our subsidiaries. Our
fiscal year ends on the Saturday closest to January 31 of the following year.
Fiscal years are designated in this prospectus by the calendar year in which
the fiscal year commences.

Overview

We are a leading specialty retailer of branded apparel and lifestyle
products for 'tween girls, ages 7 to 14, and recently introduced a new retail
concept for teen girls ages 14 to 19. As of February 2, 2002, we operated 459
Limited Too stores, targeting the 'tween segment, and seven mishmash stores,
targeting the teen girl segment. We design, source and market our products
under our proprietary brands, Limited Too and mishmash, for sale exclusively in
our stores. Our sales strategy is to integrate our retail, direct mail and
website channels to provide marketing vehicles and sources for the latest
fashion and trends. Both store concepts are located primarily in high-traffic
mall locations.

Our store design, merchandise assortments and marketing initiatives are
intended to create lifestyle brands that capture the latest trends for our
fashion-aware customers. With Limited Too, we have created destination retail
stores that showcase our brands and the scope of our product offerings,
encouraging customers to spend time experimenting with and trying on products
before making purchases. We believe our target customers want a broad
assortment of merchandise for their wardrobes, including apparel for school,
leisure and special occasions, as well as non-apparel merchandise, such as
footwear, candy, jewelry, cosmetics and lifestyle products. We have
historically relied on colorful in-store graphics and window displays to convey
our fun and "cool" image. We intend to leverage these successful marketing
efforts to continue to promote brand awareness on a national level, including
engaging in cross-promotions with major media companies such as Disney and
Universal Studios and consumer product companies.

In 1996, our management team recognized that our core customer had her own
emerging sense of style and revised our strategy to focus on girls 7 to 14
years of age as our target customer group. Since then, we have implemented an
aggressive store opening campaign to capitalize on our business strengths and
have grown our Limited Too store base from 308 stores at the end of fiscal 1996
to 459 stores in 46 states at the end of fiscal 2001. Our net sales have
increased at a compound annual growth rate in excess of 18%, from $256.7
million in fiscal 1996 to $602.7 million in fiscal 2001. Over the same period,
our operating income rate has increased from (3.5%) to 11.0%. We intend to
continue our expansion program and plan to open approximately 50 to 55 new
Limited Too stores in fiscal 2002 and remodel about 10 stores to enhance their
sales and profitability. We expect to open these stores in our existing markets
as well as in markets in which we do not currently have a presence.
Additionally, we intend to continue to develop our mishmash concept. Based on
positive customer response to our first seven mishmash stores, we plan to open
at least four more mishmash stores in fiscal 2002 and 30 to 50 stores during
fiscal 2003.

424B1 5th Page of 66 TOC 1st Previous Next ↓Bottom Just 5th
Our Competitive Strengths

We attribute our success to date and our opportunities to increase sales,
profits and market share to the following strengths:

. Customer focus. By staying close to our customer, we have developed a
detailed knowledge of the fashion tastes, purchasing habits and
attitudes of the 'tween consumer. We believe our knowledge of the
customer allows us to rapidly respond to her evolving needs and provide
her with unique and fashionable merchandise as she grows older and into
our mishmash concept.

. Brand development expertise. We believe our unique merchandising and
creative marketing have made Limited Too a focused and differentiated
brand within the 'tween segment. We have demonstrated an ability to
effectively communicate this brand image through all aspects of our
business, including store environments, merchandise assortments, direct
mail and our website. We intend to develop our mishmash concept so it
can be expanded in the same manner.

. Proprietary design and merchandising capabilities. As a
vertically-integrated specialty retailer, we develop substantially all
of our merchandise assortment through our design group, which allows us
to create a vast array of exclusive merchandise under our proprietary
brands and enables us to respond quickly to changing fashion trends.

. Store design and creation. A major element of our success is the
consistent store-level execution of our brand strategy. We tightly
control our in-store presentation through detailed and comprehensive
store plans. These plans use visual displays and fixtures designed to
brand our stores in a manner tailored to appeal to our target customer
group. We design our Limited Too stores to provide a "theme park"
destination in the mall and to encourage our customers to touch and
sample our products.

. Integrated sales channels. We offer our products through three
integrated sales channels for Limited Too: our stores, catazines (which
incorporate editorial content with product our catalog), and website. We
believe that our three sales channels, which we refer to as our
360-degree brand, allow us to leverage our experience in customer
service and increase the visibility of our brand.

. Proven management team. Our management team has increased the level of
brand awareness and consistently delivered improved financial results
over the past five years.

Our Growth Strategy

Our growth strategy focuses on four goals:

. Limited Too stores. We intend to continue our store expansion program by
opening approximately 50 to 55 new Limited Too stores per year and
remodeling approximately 10 stores per year. In the long term, we expect
Limited Too to become a 650- to 700-store chain.

. mishmash stores. In addition to our expansion of Limited Too, we are
developing and expanding our new mishmash store concept. During 2002, we
intend to continue to refine our merchandise assortment and build the
infrastructure to support our mishmash roll-out. We expect that these
steps will enable us to open 30 to 50 mishmash stores in fiscal 2003.

424B1 6th Page of 66 TOC 1st Previous Next ↓Bottom Just 6th
. Direct mail and other marketing initiatives. We are committed to
enhancing our brand recognition and plan to continue the expansion of
our catazine and direct mail contact strategy. We expect our total
fiscal 2002 circulation to exceed 34 million catazines, representing an
increase of approximately 55% from fiscal 2001. Our ongoing analysis of
the catazine's impact on sales demonstrates that it drives additional
sales into our stores. We have created, and have plans for, other direct
marketing initiatives, which we believe will increase brand loyalty and
encourage repeat customer visits.

. Merchandise and sourcing strategies. We plan to develop new ways to
expand existing merchandise categories and introduce new product
offerings. We also intend to open our first direct sourcing office, in
Hong Kong, by the summer of 2002. Over the long-term, we expect to
realize meaningful cost savings from this initiative beginning in fiscal
2003 as we establish direct relationships with factories.

Recent Developments

On May 13, 2002, we reported the following results:

For the quarter ended May 4, 2002, net income increased 53% to $5.8 million,
or $0.18 per diluted share, from $3.8 million, or $0.12 per diluted share, for
the first quarter of fiscal 2001. The increase in net income was primarily
attributable to the 13.7% increase in aggregate store square footage of our
Limited Too stores, higher merchandise margins and lower distribution-related
expenses.

Net sales for the first quarter of fiscal 2002 increased 16% to $158.6
million, compared to $136.7 million for the first quarter of fiscal 2001.
Comparable store sales increased 4% for the first quarter of fiscal 2002,
compared to a 2% decrease for the same period last year.

During the first quarter of fiscal 2002, we opened 13 new Limited Too
stores, remodeled two stores and closed one store. We opened two new mishmash
stores, one in Columbus, Ohio and one in Durham, North Carolina.

Risk Factors

For a discussion of some of the risks you should consider before purchasing
shares of our common stock, see "Risk Factors" beginning on page 7 of this
prospectus.

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

Our principal executive offices are located at 8323 Walton Parkway, New
Albany, Ohio 43054. Our telephone number is (614) 775-3500. The information
contained on our website at www.limitedtoo.com is not part of this prospectus
and is not incorporated by reference in this prospectus.

424B1 7th Page of 66 TOC 1st Previous Next ↓Bottom Just 7th
The Offering

Shares of common stock
offered (1)............. 2,400,000 shares

Shares of common stock to
be outstanding after
the offering (2)........ 33,879,254 shares

Use of proceeds........... To repay outstanding
indebtedness and for
general corporate
purposes.

New York Stock Exchange
symbol.................. TOO
--------
(1) Does not include 360,000 shares of common stock that we will sell if the
underwriters exercise their over-allotment option in full. Unless otherwise
indicated, the information in this prospectus assumes that the underwriters
will not exercise their option.

(2) Based on the number of shares outstanding as of May 20, 2002. Excludes
3,261,269 shares of common stock issuable upon the exercise of outstanding
options and 1,332,381 shares of common stock available for future issuance
under our stock option plans.

424B1 8th Page of 66 TOC 1st Previous Next ↓Bottom Just 8th
Summary Consolidated Financial and Operating Data

[Enlarge/Download Table]

Fiscal Year Ended
------------------------------------------------------------
February 2, February 3, January 29, January 30, January 31,
2002 2001 (1) 2000 1999 1998
----------- ----------- ----------- ----------- -----------
(in thousands, except per share data, number of
stores, annual sales per average square foot and percentages)

Statement of Income Data:
Net sales.................................. $602,689 $545,040 $450,426 $374,637 $320,228
Gross income (2)........................... 217,522 192,581 158,189 122,908 93,325
General, administrative and store operating
expenses................................. 150,976 137,285 115,734 95,027 81,459
Operating income........................... 66,546 55,296 42,455 27,881 11,866
Net income................................. 39,563 32,245 24,576 16,681 7,166
Earnings per share-basic................... $ 1.28 $ 1.05 $ 0.80 $ 0.54 $ 0.23
Earnings per share-diluted................. $ 1.23 $ 1.02 $ 0.79 $ 0.54 $ 0.23

Selected Operating Data:
Comparable store sales increase (3) (6).... 0 % 4 % 9 % 15 % 20 %
Total net sales growth..................... 10.6 % 21.0 % 20.2 % 17.0 % 24.7 %
Gross income rate (4)...................... 36.1 % 35.3 % 35.1 % 32.8 % 29.1 %
Operating income rate (4).................. 11.0 % 10.1 % 9.4 % 7.4 % 3.7 %
Total number of stores open at year end.... 459(7) 406 352 319 312
Total square feet at year end.............. 1,881(7) 1,669 1,441 1,281 1,244
Annual sales per average square foot (5)... $ 336(7) $ 341 $ 329 $ 299 $ 258
Net cash provided by operating activities.. $ 65,457 $ 29,209 $ 69,547 $ 17,361 $ 30,294
Capital expenditures....................... $ 63,598 $ 36,308 $ 31,424 $ 14,294 $ 4,780

Balance Sheet Data:
Inventories................................ $ 44,537 $ 45,715 $ 34,656 $ 27,565 $ 18,661
Total assets............................... 265,577 209,111 178,593 90,769 73,574
Total debt................................. 50,000 50,000 50,000 -- --
Total shareholders' equity................. 128,209 79,711 45,467 50,017 37,065

--------
(1) Represents the 53-week fiscal year ended February 3, 2001.

(2) Gross income equals net sales less cost of goods sold, buying and occupancy
costs.

(3) A store is included in our comparable store sales calculation once it has
completed 52 weeks of operation. Further, stores that have changed more
than 20% in square feet are treated as new stores for the purposes of this
calculation.

(4) Calculated as a percentage of net sales.

(5) Annual sales per average square foot is the result of dividing net sales
for the fiscal year by average gross square feet, which reflects the impact
of opening and closing stores throughout the year.

(6) For purposes of calculating comparable store sales, fiscal 2000 is
considered to be the 52 weeks ended January 27, 2001.

(7) Amount excludes seven mishmash stores.

424B1 9th Page of 66 TOC 1st Previous Next ↓Bottom Just 9th
Caution Regarding Forward-Looking Statements

We caution that any forward-looking statements (as such term is defined in
the Private Securities Litigation Reform Act of 1995) included or incorporated
by reference in this prospectus involve risks and uncertainties and are subject
to change based on various important factors, many of which may be beyond our
control. Forward-looking statements are indicated by words such as
"anticipate," "estimate," "expect," "intend," "plan," "risk," "could," "may,"
"will," "pro forma," "likely," "possible," "potential" and similar words and
phrases and the negative forms and variations of these words and phrases, and
include statements relating to anticipated capital expenditures for opening new
stores, including both Limited Too and mishmash, the remodeling or expansion of
existing stores, and the related funding, as well as the establishment of a
procurement subsidiary and its anticipated impact on our procurement operations
and effective tax rate. The following factors, among others, in some cases have
affected, and in the future could affect, our financial performance and actual
results and could cause future performance and financial results to differ
materially from those expressed or implied in any forward-looking statements
included or incorporated by reference in this prospectus: our ability to
achieve comparable sales growth; our ability to identify and respond to fashion
trends and satisfy customer demands; the impact of competition; changes in mall
traffic volume; the availability of suitable lease space; our ability to
protect our intellectual property; losses of key personnel; increases in
mailing, paper or printing costs; our ability to sustain our growth rate; our
ability to grow mishmash profitably; seasonal fluctuations in our results;
changes in consumer spending patterns, consumer preferences and overall
economic conditions; changes in weather patterns; potential disruptions
relating to distribution of our products; currency and exchange risks; changes
in existing or potential trade restrictions, duties, tariffs or quotas; changes
in political or financial stability; and/or other risk factors that are
included or incorporated by reference in this prospectus. Future economic and
industry trends that could potentially impact revenue and profitability are
difficult to predict. Therefore, there can be no assurance that the
forward-looking statements included or incorporated by reference in this
prospectus will prove to be accurate. In light of the significant uncertainties
in the forward-looking statements included or incorporated by reference in this
prospectus, the inclusion of such information should not be regarded as a
representation that our objectives will be achieved. The forward-looking
statements included or incorporated by reference in this prospectus are based
on information presently available to our management. We assume no obligation
to publicly update or revise the forward-looking statements after the date of
this prospectus even if experience or future changes make it clear that any
projected results expressed or implied herein will not be realized.

424B1 10th Page of 66 TOC 1st Previous Next ↓Bottom Just 10th
Risk Factors

Before investing in our common stock, you should carefully consider the
various risks described below together with all of the other information in
this prospectus. If any of these risks occur, our business, prospects, results
of operations and financial condition could be adversely affected. In that
case, the trading price of our common stock could decline, and you could lose
all or part of your investment.

We may not be able to achieve comparable store sales growth.

Our comparable store sales performance has declined in the past,
particularly during the recent recession. Our comparable store sales growth
decreased from 9% for fiscal 1999 to 4% for fiscal 2000 and 0% for fiscal 2001.
For the fourth quarter of fiscal 2001, our comparable store sales declined 2%.
Our comparable store sales will continue to fluctuate and may be affected by
many factors, including:

. economic conditions;

. weather conditions;

. our ability to keep up with fashion trends;

. competition;

. new store openings in existing markets;

. store remodelings and expansions;

. customer response to new and existing styles; and

. procurement and management of merchandise inventory.

As a result of these and other factors, we may not achieve or be able to
maintain comparable store sales growth in the future. Our stock price may be
materially adversely affected by declines and fluctuations in our comparable
store sales.

We must identify and respond to fashion trends and satisfy customer demands in
order to continue to succeed.

Our success depends in part on our management's ability to anticipate the
fashion tastes of our customers and offer merchandise which appeals to them on
a timely and affordable basis. We expect our customers' fashion tastes to
change frequently. If we are unable to successfully anticipate, identify or
react to changing styles or trends, our sales may be adversely affected and we
may have excess inventories. In response, we may be forced to increase our
marketing promotions or take markdowns, which could have a material adverse
effect on our business. Our brand image may also suffer if our customers
believe that our merchandise misjudgments indicate that we are no longer able
to offer them the latest fashions.

We may be unable to compete successfully in our highly competitive segment of
the retail industry.

The girls retail apparel and accessories industry is highly competitive. We
expect competition in this market to increase because there are few barriers to
entry and our success may attract additional competitors. In addition, the
population of our primary target market, 'tween girls, is expected to remain
relatively flat over the near term. Increased competition could result in
pricing pressures, increased marketing expenditures and loss of our market
share, all of which could have a material adverse effect on our financial
condition and results of operations.

We compete for sales primarily with specialty apparel and accessory
retailers, such as GapKids and Claire's, department stores, such as Nordstrom
and discount retailers, such as Target. Other specialty retailers,

424B1 11th Page of 66 TOC 1st Previous Next ↓Bottom Just 11th
including Wet Seal and Abercrombie & Fitch, have entered the market for
pre-teen apparel. In addition to the traditional store-based retailers, we also
compete with direct marketers who target customers through catalogs and
Internet shopping. Direct marketers also include traditional store-based
retailers like us who are expanding or have expanded into catalogs and the
Internet as additional distribution channels.

Some of our competitors may have greater financial, marketing and other
resources available to them. In many cases, our primary competitors are located
in the same shopping centers as our stores and, in addition to competing for
sales, we compete for favorable site locations and lease terms.

We depend on a high volume of mall traffic to generate sales.

Substantially all of our stores are located in shopping malls. Our sales are
derived, in part, from the high volume of traffic in those malls. We benefit
from the ability of the malls' anchor tenants, generally large department
stores, and other area attractions to generate consumer traffic in our stores'
vicinity and on the continuing popularity of malls as shopping destinations.
Sales volume and mall traffic may be adversely affected by economic downturns
in a particular area, competition from non-mall retailers and other malls where
we do not have stores and the closing of anchor tenants. In addition, a decline
in the desirability of the shopping environment in a particular mall or a
decline in the popularity of mall shopping among our target consumers could
have a material adverse effect on our business.

We depend on the availability of suitable lease space to sustain our growth.

Our future growth significantly depends on our ability to open new stores in
desirable locations. We estimate that approximately 200 to 250 sites meet our
selection criteria and will be available for new Limited Too stores over the
next several years. If we open approximately 50 to 55 Limited Too stores per
year, our selection of desirable locations may become limited. We cannot assure
you as to when or whether additional desirable locations will become available.

In addition, as of February 2, 2002 we shared lease space in 107 locations
with The Limited. If any of these leases are terminated or defaulted upon by
The Limited, we might be forced to move to a different and potentially less
desirable store location with less traffic in the same mall, in a different
mall or to close the store. This may adversely impact sales at that location
and could have a material adverse effect on our financial condition and results
of operations.

Our licensed Limited Too and registered mishmash brands are integral to our
brand strategy, competitive position and sales.

We currently license the Limited Too brand name and have a federal
registration for the mishmash trademark and other trademarks in the United
States and have applied for or obtained a registration for mishmash in most of
the foreign countries in which our vendors are located.

We cannot assure you that the registrations we have obtained will be
adequate to prevent the imitation of our products or infringement of our
intellectual property rights by others. If a third party imitates our products,
consumers may be confused and that third party may gain sales at our expense,
and if any such products are manufactured or marketed in a manner that projects
lesser quality or carries a negative connotation, our brand image could be
adversely affected.

In addition, our right to operate under the Limited Too brand is governed by
an exclusive trademark and service mark licensing agreement with The Limited.
The agreement is for an initial term of five years, ending in

424B1 12th Page of 66 TOC 1st Previous Next ↓Bottom Just 12th
August 2004, and is renewable annually thereafter at our option. In return, we
are required to provide The Limited with the right to inspect our stores and
distribution facilities and the ability to review our advertising. The Limited
has the right to terminate the agreement under certain circumstances,
specifically if:

. we breach any of our obligations under the agreement and do not cure the
breach within 60 days after receiving notice of the breach;

. we become bankrupt or insolvent; or

. we experience a change of control.

The agreement also restricts the way in which we use the licensed brand in
our business. We may only use the brand name "Limited Too" in connection with
any business in which we sell to our current Limited Too target customer group
or to infants and toddlers.

If in the future we are unable to use the Limited Too brand, we will be
forced to change our brand name. Because much of our merchandise is currently
sold under the Limited Too label in stores called "Limited Too," a name change
might cause confusion for our customers and adversely affect our brand
recognition and our sales. We would need to expend substantial resources, which
we cannot estimate at this time, to rename our stores, to produce new
merchandise and to establish brand recognition if we were required to change
our brand.

We rely on key personnel.

Our continued success depends, to a significant degree, upon the services of
our key personnel, particularly our senior executive officers. The loss of any
member of senior management could have a material adverse effect on our
business, financial condition and results of operations. Our success in the
future will also depend upon our ability to attract and retain qualified
personnel.

Increases in costs of mailing, paper or printing may impact our business.

Postal rate increases and paper and printing costs affect the cost of our
catazine and direct mail promotions. The U.S. Postal Service has announced an
increase in its rates, effective June 30, 2002, and this increase will have an
impact on our costs. In addition, although we do not generally use the U.S.
Postal Service for fulfillment of orders made from our catazines and our
website or for delivery of merchandise from our vendors to us or from our
distribution center to our stores, postal rate increases may have an indirect
impact on these operations due to potential competitive increases by other
delivery services. Furthermore, these delivery services periodically raise
their rates independent of the U.S. Postal Service, and the U.S. Postal Service
may raise its rates further in the future.

We are not party to any long-term contracts for the supply of paper or
printing services. Future paper, printing and postal rate increases would
adversely impact our earnings if we were unable to pass such increases directly
on to our customers or offset such increases by raising prices or by
implementing more efficient printing, mailing, delivery and order fulfillment
systems.

We may not be able to sustain a growth rate sufficient to implement our
expansion strategy.

We have grown rapidly over the past few years. We may not be able to
continue to grow profitably or at rates consistent with our recent past. Our
future growth prospects depend upon a number of factors, including our ability
to:

. find suitable markets and sites for our stores and negotiate leases on
acceptable terms for those stores;

. fulfill our plans to open new stores and remodel or expand existing
stores;

424B1 13th Page of 66 TOC 1st Previous Next ↓Bottom Just 13th
. continue to develop our sales channels, including our catazines and
website operations;

. attract and retain talented personnel and expand our infrastructure to
accommodate our growth, including maintaining high levels of customer
service by hiring and training qualified sales associates;

. manage our inventory effectively, maintain sufficient distribution
capacity and deliver our merchandise in a timely manner;

. keep up with constantly shifting fashion trends and develop new and
appealing merchandise; and

. successfully introduce and build upon the mishmash store brand.

We will require substantial capital expenditures to implement our business
strategy, in particular our opening of new stores and remodeling or expansion
of our existing stores, which we estimate will require capital expenditures of
approximately $17 million to $20 million in fiscal 2002. If we do not generate
sufficient cash flow from operations or if we are unable to obtain sufficient
financing under our credit facility or from other sources on acceptable terms,
we may be required to reduce our planned capital expenditures, which could have
a material adverse effect on our growth prospects.

We may not be able to grow mishmash profitably.

In fiscal 2001, we opened seven mishmash stores, which target girls between
the ages of 14 and 19, a slightly older customer than our Limited Too customer.
We expect to continue to devote significant management and other resources to
mishmash, including for development of the concept and the planned opening of
four new mishmash stores in fiscal 2002 and, if the mishmash concept is
successful, 30 to 50 new mishmash stores in fiscal 2003. We have a short
operating history with mishmash and with the teen girl customer segment. The
teen girl apparel market has historically been more competitive than the 'tween
girl apparel market. Some of these competitors are larger and more established
than we are and may have greater financial and other resources available to
compete with us. Due to these factors, we cannot assure you that we will be
successful in this market or that our mishmash stores will prove profitable
over the short or long term. In addition, as we expand our mishmash concept, it
may divert management's attention from our core Limited Too business and may
require substantial capital expenditures.

Our net sales, net income and inventory levels fluctuate on a seasonal basis.

We experience seasonal fluctuations in our net sales and net income, with a
disproportionate amount of our net sales and a majority of our net income
typically realized during our fourth quarter due to sales from the Christmas
holiday shopping period. We also generate significant net sales during the
back-to-school period in the third quarter. Any decrease in sales or margins
during those periods could have a material adverse effect on our financial
condition and results of operations.

Seasonal fluctuations also affect our inventory levels because we typically
order merchandise in advance of the peak selling periods and often before new
fashion trends are confirmed by customer purchases. We must carry a significant
amount of inventory, especially before the Christmas holiday and back-to-school
selling periods. Forecasting errors may result in excess inventory, which may
lead to markdowns and inventory valuation adjustments.

Our business is sensitive to economic conditions and consumer spending patterns.

Our business is sensitive to changes in overall economic conditions and
consumer spending patterns. Our growth, sales and profitability may be
adversely affected by unfavorable local, regional, national or international
economic conditions, including the effects of war, terrorism or the threat
thereof. In addition, shifts in our customers' discretionary spending to other
goods, including music, entertainment and electronic products, could also
adversely affect our business.

424B1 14th Page of 66 TOC 1st Previous Next ↓Bottom Just 14th
We may experience potential disruptions in the receipt and distribution of our
merchandise associated with the relocation of our distribution center to our
new facility.

On February 15, 2002, we opened our own newly-constructed 470,000 square
foot distribution center in Etna, Ohio. Previously, we received distribution
services from The Limited. Our new distribution facility has been operating for
only a short period of time, and its reliability and capacity, particularly
during peak sales seasons, are unproven. It is possible that complications with
our new warehouse management systems could result in a significant interruption
in the receipt and distribution of our merchandise and an increase in our
distribution costs. Any such disruption could have a material adverse effect on
our business.

Our merchandise is shipped directly from manufacturers through freight
consolidators to our distribution facility in Etna, Ohio. Our operating results
depend in large part on the orderly operation of our receiving and distribution
process, which depends on manufacturers' adherence to shipping schedules and
our effective management of our new distribution facility. In addition, we
cannot assure you that we have anticipated, or will be able to anticipate, all
of the changing demands which our expanding operations will impose on our
receiving and distribution system. Furthermore, it is possible that events
beyond our control, such as a strike or other disruption affecting the parcel
service that delivers substantially all of our merchandise to our stores, could
result in delays in delivery of merchandise to our stores. Any such event could
have a material adverse effect on our business.

We rely on foreign sources of production.

In fiscal 2001, we sourced approximately 70% of our merchandise from foreign
factories located primarily in East and Southeast Asia. We do not have any
long-term merchandise supply contracts and many of our imports are subject to
existing or potential duties, tariffs or quotas, which may limit the quantity
of goods which may be imported into the United States from countries in that
region. We compete with many other companies for production facilities and
import quota capacity.

Our business also faces a variety of other risks generally associated with
doing business in foreign markets and importing merchandise from abroad,
including:

. political instability;

. currency and exchange risks;

. local business practice and political issues, including issues relating
to compliance with domestic or international labor standards; and

. potential delays or disruptions in shipping and related pricing impacts,
including as a result of a possible longshoremen's strike on the West
Coast during the summer of 2002.

Our future performance will depend upon these factors, which are beyond our
control. These factors may have a material adverse effect on our business.

We source a significant portion of our merchandise from a limited number of
vendors.

Nearly 60% of our apparel was sourced from two vendors in fiscal 2001, with
each supplying nearly 30% of our apparel. One of these vendors is Mast
Industries, Inc., a wholly-owned subsidiary of The Limited. We expect to open
our first direct sourcing office, in Hong Kong, by the summer of 2002. Any
disruption in our relationship with Mast Industries or other key vendors or
suppliers could have a material adverse effect on our business.

424B1 15th Page of 66 TOC 1st Previous Next ↓Bottom Just 15th
We will need to comply with existing and new regulations that govern us.

Currently, much of our personal care and lifestyle merchandise is subject to
various regulations promulgated by the U.S. Food and Drug Administration, the
Federal Trade Commission and the U.S. Consumer Product Safety Commission.

For example, we are required to meet federal flammability standards for
children's sleepwear. These standards require sleepwear to be flame-resistant,
and if the fabric ignites, the flame on the garment must self-extinguish.
Failure to meet the flammability standards presents a risk of serious burn
injuries to children. We require our suppliers to take measures including
testing to assure us that these standards are met; however, they may source
products from other suppliers, in particular foreign suppliers, who, despite
our best efforts, may not adhere to these standards. If standards are not met,
we may be held liable for any resulting damages and may be subject to fines and
other penalties. In addition, we may be forced to voluntarily recall the
merchandise in question and give full refunds to our customers if the
merchandise fails to comply.

As we expand our merchandise assortment and increase the number of our
suppliers to accommodate our growth, it may become more difficult or costly to
comply with existing and new regulations.

Provisions in our corporate documents and license agreement with The Limited
could delay or prevent a change in control of our company, which could cause
the price of our common stock to decline.

Our certificate of incorporation and bylaws contain a number of provisions
that could impede a merger, consolidation, takeover or other business
combination involving us or discourage a potential acquiror from making a
tender offer or otherwise attempting to obtain control of us. Those provisions
include:

. a requirement that the holders of at least 75% of our outstanding common
stock must approve:

. a merger or consolidation with persons or entities that beneficially
own at least 5% of our common stock,

. a sale of all or substantially all of our assets to those persons or
entities, and

. other change in control transactions,

unless, in each case, the proposed transaction is approved by a majority
of the directors who were in office immediately before the time such
ownership was acquired, or by their approved successors;

. a classified board of directors in which the board members are divided
into three classes, each of which serves a staggered three-year term;

. a requirement that only the holders of at least 75% of our outstanding
common stock may approve any amendment or repeal of our bylaws and
specified provisions of our certificate of incorporation; and

. an authorization to adopt a rights plan that may be redeemed only by a
majority of the directors who were in office when the rights plan was
adopted, or by their approved successors. We currently have such a plan
in place.

In addition, our trademark and service mark licensing agreement with a
subsidiary of The Limited, under which we license the trademark "Limited Too,"
grants the subsidiary the right to terminate our license upon a change in
control of our company. If we were unable to continue using the brand name
"Limited Too," we would be forced to change our brand name. Because our brand
name has significant value to us, this provision could also discourage a
potential acquirer from attempting to obtain control of us.

424B1 16th Page of 66 TOC 1st Previous Next ↓Bottom Just 16th
We do not expect to pay dividends in the foreseeable future.

We anticipate that future earnings will be used principally to support
operations and finance the growth of our business. Thus, we do not intend to
pay cash dividends on our common stock in the foreseeable future. Payment of
dividends is also restricted by provisions in our credit facility. If our
lenders permit us to declare dividends, the dividend amounts, if any, will be
determined by our board. Our board will consider a number of factors, including
our financial condition, capital requirements, funds generated from operations,
future business prospects, applicable contractual restrictions and any other
factors our board may deem relevant.

Our stock price may fluctuate significantly and you could lose all or part of
your investment as a result.

Our stock price has fluctuated significantly in the past and we do not know
how our common stock will trade in the future. The market price of our common
stock may fluctuate significantly due to a number of factors, some of which may
be beyond our control, including:

. fluctuations in our operating results;

. reduction in the number of securities analysts who cover our company and
distribute research and investment recommendations about our company;

. changes in earnings estimated by securities analysts or our ability to
meet those estimates;

. the operating and stock price performance of other comparable companies;

. overall stock market fluctuations;

. the retail environment; and

. economic conditions.

In particular, the realization of any of the risks described in these "Risk
Factors" could have a material adverse impact on the market price of our common
stock. In addition, the stock market in general has experienced extreme
volatility that has often been unrelated or disproportionate to the operating
performance of particular companies. These broad market fluctuations may
adversely affect the trading price of our common stock, regardless of our
actual operating performance. Additionally, if our quarterly results of
operations fluctuate significantly as a result of the seasonality of the retail
industry, the timing and costs of new store openings and remodelings or
expansions of existing stores, the performance of new and existing stores,
merchandise mix or fashion trends, the market price of our common stock may be
affected.

424B1 17th Page of 66 TOC 1st Previous Next ↓Bottom Just 17th
Use of Proceeds

We estimate that the net proceeds to us from this offering of 2,400,000
shares of our common stock at a public offering price of $32.50 per share to be
approximately $73.4 million ($84.5 million if the underwriters exercise their
over-allotment option in full) after deducting the underwriting discount and
other estimated expenses of this offering. We intend to use the net proceeds of
this offering to repay the $50 million term loan under our $100 million credit
facility. The remainder of the net proceeds from this offering will be used for
general corporate purposes.

We entered into the credit facility in August 1999 in connection with our
spin-off from The Limited to finance a $50 million dividend to The Limited, as
well as to repay a portion of working capital advances made by The Limited
prior to the spin-off. The credit facility matures on August 13, 2004 and had
an interest rate of 3.74% as of May 20, 2002.

424B1 18th Page of 66 TOC 1st Previous Next ↓Bottom Just 18th
Price Range of Common Stock and Dividends

Our common stock is traded on the New York Stock Exchange under the symbol
"TOO." The following table sets forth, for the fiscal periods indicated, the
range of high and low sale prices per share for our common stock, as reported
by the New York Stock Exchange:

[Download Table]

High Low
------ ------

Fiscal 2000
First Quarter, ended April 29, 2000... $36.25 $15.50
Second Quarter, ended July 29, 2000... $32.38 $17.75
Third Quarter, ended October 28, 2000. $29.00 $19.13
Fourth Quarter, ended February 3, 2001 $23.75 $11.00

Fiscal 2001
First Quarter, ended May 5, 2001...... $21.53 $15.27
Second Quarter, ended August 4, 2001.. $27.40 $18.43
Third Quarter, ended November 3, 2001. $29.10 $18.00
Fourth Quarter, ended February 2, 2002 $30.23 $23.00

Fiscal 2002
First Quarter, ended May 4, 2002...... $32.00 $24.80
Second Quarter (through May 20, 2002). $34.50 $29.75

On May 20, 2002, the last reported sale price of the common stock as
reported by the New York Stock Exchange was $33.70 per share. As of May 20,
2002, there were approximately 22,200 holders of record of our common stock.

We have not paid any cash dividends historically and do not intend to pay
cash dividends on our common stock in the foreseeable future.

424B1 19th Page of 66 TOC 1st Previous Next ↓Bottom Just 19th
Capitalization

The following table sets forth our actual cash and cash equivalents, current
portion of long-term debt and capitalization as of February 2, 2002 and as
adjusted to reflect the receipt of the estimated net proceeds from the issuance
and sale of the 2,400,000 shares of common stock offered hereby at a public
offering price of $32.50 per share and the application of the estimated net
proceeds therefrom:

[Enlarge/Download Table]

February 2, 2002
---------------------
Actual As Adjusted
--------- -----------
(in thousands)

Cash and cash equivalents........................................................ $ 63,538 $ 86,919
======= ========

Current portion of long-term debt................................................ $ 17,500 --
======= ========

Long-term debt, less current portion............................................. $ 32,500 --
--------- --------

Shareholders' equity:
Common stock, $.01 par value: 100 million shares authorized, 31.3 million shares
issued and outstanding, actual; 33.7 million outstanding, as adjusted (1)..... 313 337
Additional paid-in capital...................................................... 35,338 108,695
Retained earnings............................................................... 92,558 92,558
--- --------
Total shareholders' equity....................................................... 128,209 201,590
------ --------
Total capitalization............................................................. $160,709 $201,590
======== ========

--------
(1) Excludes an aggregate of 3,261,269 shares issuable upon exercise of options
outstanding at May 20, 2002 granted under our stock option plans, at a
weighted average exercise price of $16.23 per share. Also excludes an
aggregate of 1,332,381 additional shares reserved for issuance under these
plans.

424B1 20th Page of 66 TOC 1st Previous Next ↓Bottom Just 20th
Selected Consolidated Financial and Operating Data

The following balance sheet data as of February 2, 2002 and February 3,
2001, and statement of income data for each of the three fiscal years in the
period ended February 2, 2002, are derived from our audited consolidated
financial statements, which were audited by PricewaterhouseCoopers LLP,
independent accountants, and are included elsewhere herein. The following
balance sheet data as of January 29, 2000, January 30, 1999 and January 31,
1998, and statement of income data for each of the two fiscal years in the
period ended January 30, 1999, were derived from our audited consolidated
financial statements for such years. The information set forth below should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," our consolidated financial statements and
related notes thereto and other financial information included or incorporated
by reference in this prospectus.

[Enlarge/Download Table]

--------
(1) Represents the 53-week fiscal year ended February 3, 2001.
(2) Gross income equals net sales less cost of goods sold, buying and occupancy
costs.
(3) A store is included in our comparable store sales calculation once it has
completed 52 weeks of operation. Further, stores that have changed more
than 20% in square feet are treated as new stores for the purposes of this
calculation.
(4) Calculated as a percentage of net sales.
(5) Annual sales per average square foot is the result of dividing net sales
for the fiscal year by average gross square feet, which reflects the impact
of opening and closing stores throughout the year.
(6) For purposes of calculating comparable store sales, fiscal 2000 is
considered to be the 52 weeks ended January 27, 2001.
(7) Amount excludes seven mishmash stores.

424B1 21st Page of 66 TOC 1st Previous Next ↓Bottom Just 21st
Management's Discussion and Analysis of Financial Condition and Results of
Operations

You should read the following discussion and analysis of our financial
condition and results of operations in conjunction with our consolidated
financial statements and the related notes to those consolidated financial
statements.

General

Since our spin-off from The Limited in August 1999, we have made solid
progress on several of our financial and strategic initiatives designed to
improve our financial performance and to build and strengthen our 360-degree
brand. During fiscal 2001, we:

. increased sales 11% to $602.7 million

. increased net income 23% to $39.6 million or $1.23 per diluted share
versus net income of $32.2 million or $1.02 per diluted share in fiscal
2000

. mailed 21.7 million "catazines," which not only generated sales into
their own channel, but served to drive sales to the stores

. launched a brand new business, "mishmash," a lifestyle brand for young
women 14 to 19 years of age

Additionally, we have nearly eliminated most support functions provided by
The Limited after the spin-off that were covered by the Transitional Services
and Separation Agreements. This means that we are self-sufficient except for
distribution services provided by one of The Limited's subsidiaries. We
completed construction of our new distribution center and commenced operations
on February 15, 2002. We have completed construction of our new home office
facilities, which we moved into during April 2002. We are in the process of
establishing a subsidiary to handle our merchandise procurement operations for
both domestic and international sourcing. We expect this to streamline our
procurement process. In addition, we may receive side benefits that will
include, among other things, expense savings in our effective tax rate.

Results of Operations

Our results of operations, expressed as a percentage of sales, follow:

[Enlarge/Download Table]

Fiscal Year Ended
-----------------------------------
February 2, February 3, January 29,
2002 2001 (1) 2000
----------- ----------- -----------

Net sales........................................... 100.0% 100.0% 100.0%
Costs of goods sold, buying and occupancy costs..... 63.9 64.7 64.9
----- ----- -----
Gross income........................................ 36.1 35.3 35.1
General, administrative and store operating expenses 25.1 25.2 25.7
----- ----- -----
Operating income.................................... 11.0 10.1 9.4
Interest expense, net............................... 0.1 0.3 0.3
----- ----- -----
Income before income taxes.......................... 10.9 9.9 9.1
Provision for income taxes.......................... 4.4 3.9 3.6
----- ----- -----
Net income.......................................... 6.6% 5.9% 5.5%
===== ===== =====

--------
(1) Represents the 53-week fiscal year ended February 3, 2001.

424B1 22nd Page of 66 TOC 1st Previous Next ↓Bottom Just 22nd
Net income increased 23% in fiscal 2001 to $39.6 million, or $1.23 per
diluted share, versus net income of $32.2 million, or $1.02 per diluted share,
in fiscal 2000. An increase in gross income and a reduction, as a percent of
sales, in general, administrative and store operating expenses resulted in a 90
basis point improvement in operating income for fiscal 2001.

Financial Summary

Summarized annual financial data for the last three fiscal years is
presented below:

[Enlarge/Download Table]

Fiscal Year Ended % Change
---------------------------------- ------------------
February 2, February 3, January 29,
2002 2001 (1) 2000 2000-2001 1999-2000
----------- ----------- ----------- --------- ---------

Net sales (millions)........................ $ 603 $ 545 $ 450 11 % 21 %
Comparable store sales
increase (2) (3).......................... 0% 4 % 9 %
Annual sales per average square foot (4).... $ 336(5) $ 341 $ 329 (1)% 4 %
Sales per average store (thousands)......... $1,374(5) $1,418 $1,347 (3)% 5 %
Average store size at year end (square feet) 4,098(5) 4,111 4,094 0% 0 %
Total square feet at year end (thousands)... 1,881(5) 1,669 1,441 13 % 16 %
Number of Limited Too stores:
Beginning of year........................... 406 352 319
Opened................................... 57 58 42
Closed................................... (4) (4) (9)
------ ------ ------
End of year................................. 459 406 352
====== ====== ======
Stores remodeled............................ 6 10 18
Stores with Girl Power format............... 216 156 89
Percentage of stores in Girl Power format... 47 % 38 % 25 %

--------
(1) Represents the 53-week fiscal year ended February 3, 2001.

(2) A store is included in our comparable store sales calculation once it has
completed 52 weeks of operation. Further, stores that have changed more
than 20% in square feet are treated as new stores for purposes of this
calculation.

(3) Comparable store sales for fiscal 2000 are for the 52 weeks ended January
27, 2001.

(4) Annual sales per average square foot is the result of dividing net sales
for the fiscal year by average gross square feet, which reflects the impact
of opening and closing stores throughout the year.

(5) Amount excludes our seven mishmash stores.

Fiscal Year Ended February 2, 2002 Compared to Fiscal Year Ended February 3,
2001

Net sales. Net sales for 2001 increased 11% to $602.7 million from $545.0
million for 2000. The increase was primarily a result of the net addition of 53
Limited Too and seven mishmash stores. Within merchandise categories, sales of
cut and sewn casual tops and Active apparel, led by Active bottoms and tees,
increased significantly. Also, the Add-on category (principally innerwear,
underwear, bras and swimwear) posted solid sales increases.

Gross income. The gross income rate, expressed as a percentage of net
sales, increased to 36.1% in fiscal 2001 from 35.3% for 2000. The increase in
rate was primarily attributable to a higher merchandise margin arising from
improved initial markups which were partially offset by an increase in
markdowns. This increase in merchandise margin was partially offset by an
increase in buying and occupancy costs, expressed as a percentage of net sales,
due to increased store occupancy costs and incremental catazine costs. We
mailed approximately 21.7 million catazines in fiscal 2001 compared to 12.5
million in 2000.

424B1 23rd Page of 66 TOC 1st Previous Next ↓Bottom Just 23rd
General, administrative and store operating expenses. General,
administrative and store operating expenses, expressed as a percentage of net
sales, decreased to 25.1% from 25.2% for 2000. This decrease was primarily due
to lower home office expenses, expressed as a percentage of sales.

Operating income. Operating income, expressed as a percentage of net sales,
increased to 11.0% for 2001 from 10.1% for 2000. The increase was attributable
to higher gross income and lower general, administrative and store operating
expenses, expressed as a percentage of sales.

Interest expense, net. Interest expense, net of interest income, decreased
to $583,000 in fiscal 2001 from $1.55 million in 2000. Interest expense was for
the term portion of borrowings under our credit facility, while interest income
was earned on the short-term investment of cash balances. Interest expense
amounted to $3.8 million and $5.0 million for the fiscal years 2001 and 2000,
respectively. The decrease in expense was due to lower interest rates, as well
as capitalization of interest on the construction of the distribution center
and home office. Interest expense also includes the amortization of financing
fees and related costs incurred in connection with the credit facility.

Interest income amounted to $3.2 million and $3.5 million for the fiscal
years 2001 and 2000, respectively. The decrease in interest income was due to
lower interest rates available on short-term securities.

Income taxes. Income tax expense amounted to $26.4 million for 2001 compared
to $21.5 million for 2000. The annual effective tax rate remained unchanged at
40% for fiscal 2001.

Fiscal Year Ended February 3, 2001 Compared To Fiscal Year Ended January 29,
2000

Net sales. Net sales for 2000 increased 21% to $545.0 million from $450.4
million for 1999. The increase was primarily a result of a 4% increase in
comparable store sales and the net addition of 54 stores. Additionally, over 1%
of the increase was due to an increase in catazine and e-commerce sales. Net
sales productivity increased 4% to $341 per average square foot due in part to
the increase in the number of stores operating under the Girl Power format.

Within merchandise categories, sales of Active apparel increased
significantly led by Active bottoms and tees. Also, the entire Add-on category
(principally underwear, bras, sleepwear and swimwear) posted solid sales
increases as did cut and sewn knit tops.

Gross income. The gross income rate, expressed as a percentage of net sales,
increased to 35.3% in fiscal 2000 from 35.1% for 1999. The increase in rate was
primarily attributable to a higher merchandise margin arising from improved
initial markups which were partially offset by an increase in markdowns. This
increase in merchandise margin was partially offset by an increase, expressed
as a percentage of net sales, in buying and occupancy costs due to incremental
catazine costs. The Company mailed approximately 12.5 million catazines in
fiscal 2000 compared to 1.5 million in 1999.

General, administrative and store operating expenses. General,
administrative and store operating expenses, expressed as a percentage of net
sales, decreased to 25.2% from 25.7% for 1999. The leveraging of store expenses
associated with a 4% increase in comparable store sales and lower home office
expenses, expressed as a percentage of sales, was partially offset by higher
catazine and e-commerce related costs.

Operating income. Operating income, expressed as a percentage of net sales,
increased to 10.1% for 2000 from 9.4% for 1999. The increase was attributable
to higher gross income and lower general, administrative and store operating
expenses, expressed as a percentage of sales.

424B1 24th Page of 66 TOC 1st Previous Next ↓Bottom Just 24th
Interest expense, net. Interest expense, net of interest income, amounted to
$1.55 million in fiscal 2000 compared to $1.48 million in 1999. Interest
expense was for the term portion of borrowings under our credit facility, while
interest income was earned on the short-term investment of cash balances.
Interest expense and interest income amounted to $5.04 million and $3.49
million, respectively for the year ended February 3, 2001 and $2.62 and $1.14
million, respectively, for the year ended January 29, 2000. Interest expense
also includes the amortization of financing fees and related costs incurred in
connection with the credit facility.

Income taxes. Income tax expense amounted to $21.5 million for 2000 compared
to $16.4 million for 1999. The annual effective tax rate remained unchanged at
40% for fiscal 2000.

Financial Condition

Our balance sheet remains strong due to a substantial increase in operating
income and positive cash flow from operations. We were able to finance all
capital expenditures with working capital generated from operations and ended
the year with approximately $63.5 million in cash and equivalents. Our
debt-to-equity ratio decreased substantially to 39% at February 2, 2002, from
63% at February 3, 2001, as total debt (incurred in connection with our
spin-off from The Limited) remained unchanged while equity increased,
principally due to a 23% increase in net income. A more detailed discussion of
liquidity, capital resources, and capital requirements follows.

Liquidity and Capital Resources

Cash provided from operating activities provided the resources to support
operations, including projected growth, seasonal working capital requirements
and capital expenditures. A summary of the Company's working capital position
and capitalization follows:

[Enlarge/Download Table]

Fiscal Year Ended
-----------------------------------
February 2, February 3, January 29,
2002 2001 (1) 2000
----------- ----------- -----------
(in thousands)

Net cash provided by operating activities.............................. $ 65,457 $ 29,209 $69,547
======== ======== =======
Working capital, including current portion of long-term debt of $17,500
at February 2, 2002.................................................. 23,815 40,762 26,098
======== ======== =======
Capitalization:
Long-term debt........................................................ 32,500 50,000 50,000
Shareholders' equity.................................................. 128,209 79,711 45,467
-------- -------- -------
Total capitalization................................................... $160,709 $129,711 $95,467
======== ======== =======
Additional amounts available under the revolving portion of the credit
facility............................................................. $ 50,000 $ 50,000 $50,000

--------
(1) Represents the 53-week fiscal year ended February 3, 2001.

In connection with our spin-off from The Limited in 1999, we entered into a
$100 million credit facility used to finance a $50 million dividend to The
Limited as well as the repayment of a portion of working capital advances made
by The Limited prior to our spin-off from The Limited. At February 2, 2002,
February 3, 2001, and January 29, 2000, only the $50 million five-year term
portion of the credit facility was outstanding. We intend to use the net
proceeds of this offering to repay our $50 million term loan under this credit
facility.

424B1 25th Page of 66 TOC 1st Previous Next ↓Bottom Just 25th
Operating Activities

Net cash provided by operating activities increased to $65.5 million for
fiscal 2001 from $29.2 million for fiscal 2000. An increase in net income plus
depreciation and amortization, the timing of income taxes paid and a decreased
investment in inventory were the primary causes for the increase. Net cash
provided by operating activities decreased to $29.2 million for fiscal 2000
from $69.5 million for fiscal 1999. An increase in net income plus depreciation
and amortization was more than offset by the timing of cash payments related to
accounts payable and accrued expenses in fiscal 2000 and 1999.

Investing Activities

Capital expenditures amounted to $63.6 million, $36.3 million and $31.4
million for fiscal years 2001, 2000 and 1999, respectively. We expended
approximately $46 million and $10 million in connection with the construction
of our new home office and distribution center in fiscal years 2001 and 2000,
respectively. The balance of capital expenditures in fiscal 2001 was incurred
primarily to construct new stores and remodel existing stores as was the case
for 2000 and 1999.

We anticipate spending between $45 million and $50 million in fiscal 2002
for capital expenditures, of which $17 million to $20 million will be for new
stores, remodeling or expansion of existing stores and related fixtures and
equipment. We intend to add 210,000 to 220,000 square feet in 2002, which will
represent an 11% to 12% increase over year-end 2001. We anticipate that the
increase will result from opening approximately 50 to 55 new Limited Too stores
and expanding approximately ten stores identified for remodeling. Additionally,
we plan to open at least four new mishmash stores during fiscal 2002.

We estimate that the average cost for leasehold improvements, furniture and
fixtures for Limited Too stores to be opened in fiscal 2002 will be between
$175,000 and $190,000 per store, after giving effect to landlord allowances.
Average pre-opening costs per store, which will be expensed as incurred, are
expected to approximate $10,000 while inventory purchases are expected to
average approximately $75,000 per store. We also anticipate capital
expenditures between $21 million and $24 million in fiscal 2002, principally
related to the completion of a new distribution center and home office
scheduled for completion in the first quarter of 2002.

We expect that substantially all capital expenditures in 2002 will be funded
by cash on hand and net cash provided by operating activities.

Financing Activities

Financing activities in 2001 and 2000 principally consisted of the issuance
of common shares related to restricted stock and stock options plans. Financing
activities in 1999 included an increase of $20.9 million in the net investment
by The Limited representing $32.9 million of working capital advances through
the date of our spin-off from The Limited, of which $12 million was repaid in
August 1999 with proceeds from the $100 million credit facility. Additionally,
we paid a $50 million cash dividend to The Limited with proceeds from the
credit facility in August 1999. In connection with our spin-off from The
Limited, the balance of the net investment by The Limited was converted to
common stock and paid in capital based on the 30.7 million shares issued with a
par value of $.01 per share. We also paid off borrowings under the revolving
portion of the $100 million credit facility during the third quarter of 1999.

Transitional Services and Separation Agreements

In connection with our spin-off from The Limited, we entered into several
Transitional Services and Separation Agreements (the "Transitional Services
Agreements") with The Limited that govern certain aspects of our ongoing
relationship. We believe that the terms of these agreements are similar to
terms achievable through arm's length negotiations with third parties.

424B1 26th Page of 66 TOC 1st Previous Next ↓Bottom Just 26th
A summary of some of the more significant Transitional Services Agreements
follows:

Trademark and Service Mark Licensing Agreement

We have entered into an exclusive trademark and service mark licensing
agreement, which we refer to in this document as the Trademark Agreement, with
The Limited that will allow us to operate under the "Limited Too" brand name.
The agreement had an initial term of five years after our spin-off from The
Limited, renewable annually at our option. All licenses granted under the
agreement will be granted free of charge. In return, we will be required to
provide The Limited with the right to inspect our stores and distribution
facilities and an ability to review and approve our advertising. Under the
Trademark Agreement, we will only be able to use the brand name "Limited Too"
in connection with any business in which we sell to our current Limited Too
target customer group or to infants and toddlers. In addition, we may not use
the "Limited Too" brand name or its derivative that competes with merchandise
currently offered by The Limited or its subsidiaries, unless it is for our
current target customer group. The Limited has the right to terminate the
Trademark Agreement under certain limited conditions.

Services Agreement

The Services Agreement relates to transitional services that The Limited or
its subsidiaries or affiliates provides or provided to us subsequent to our
spin-off from The Limited. Under this agreement, The Limited provides services
in exchange for fees which we believe are similar in material respects to what
a third-party provider would charge, and are based on several billing
methodologies. Under one of these billing methodologies, which is the most
prevalent, The Limited provides us with services at costs comparable to those
charged to other businesses operated by The Limited from time to time. We are
generally obligated to purchase those services at fees equal to The Limited's
costs of providing the services plus 5% of these costs. However, third-party
cost components are not subject to the 5% mark-up. Subsequent to fiscal 2000,
the services that The Limited provides to us principally relate to merchandise
distribution covering flow of goods from factory to store through the third
anniversary of our spin-off from The Limited.

Store Leases Agreement

At February 2, 2002, 83 of our stores were adjacent to The Limited's stores,
many of which were included in 107 stores subject to sublease agreements (the
"Store Leases Agreement") with The Limited for stores where we occupy space
that The Limited leases from third-party landlords (the "Direct Limited
Leases"). Under the terms of the Store Leases Agreement, we are responsible for
our proportionate share, based on the size of our selling space, of all costs
(principally rent, excess rent, if applicable, maintenance and utilities).

All termination rights and other remedies under the Direct Limited Leases
will remain with The Limited. If The Limited decides to terminate any of the
Direct Limited Leases early, The Limited must first offer to assign such lease
to us. If, as a result of such early termination by The Limited, we are forced
to remodel our store or relocate within the mall, The Limited will compensate
us with a combination of cash payments and loans which will vary depending on
the remaining term of the affected store lease at the time The Limited closes
its adjacent store as follows:

[Download Table]

Cash Payment Loan Amount
------------ -----------

Remaining Lease Term:
---------------------
Less than one year..... $ - $100,000
One to two years....... 50,000 100,000
Three to four years.... 100,000 100,000
Greater than four years 100,000 150,000

424B1 27th Page of 66 TOC 1st Previous Next ↓Bottom Just 27th
Approximately 54 of the Direct Limited Leases of which we are a part are
scheduled to expire during 2006 or later. We may not assign or sublet our
interest in those premises, except to an affiliate, without The Limited's
consent. If The Limited intends to sublet or assign its portion of the leased
premises under any of the Direct Limited Leases to any non-affiliate, it will
be required to give us 60 days notice, and we will be allowed to terminate our
interest on that basis.

Approximately 51 of our direct leases are guaranteed by The Limited.
Pursuant to the Store Leases Agreement, we are required to make additional
payments to The Limited as consideration for the guarantees that The Limited
provides under such leases along with amounts for adjacent stores based on
those locations achieving certain performance targets.

Credit Facility

In August 1999, we entered into a five-year, $100 million collateralized
credit facility. The credit facility consists of a $50 million five-year term
loan and a $50 million, five-year revolving credit commitment. The credit
facility's interest rates, which reflect matrix pricing, are based on the
London Interbank Offered Rate or Prime plus a spread as defined in the
agreement. The term loan is interest only until the end of the third year at
which time the amortization of the outstanding principal balance will begin.
The credit facility contains customary representations and warranties as well
as certain affirmative, negative, and financial covenants.

In November 2001, we amended the credit facility. The amendment allows for
the investment of cash in short-term, AAA-rated municipal bonds, as well as
less stringent limitations on 2001 capital expenditures and on indebtedness
incurred in relation to lease agreements.

As of February 2, 2002, only the $50 million five-year term portion of the
credit facility was outstanding, and the entire amount of the $50 million
revolving credit commitment was available to fund working capital requirements
and for general corporate purposes. We intend to use the net proceeds of this
offering to repay our $50 million term loan under this facility.

Impact of Inflation

Our results of operations and financial condition are presented based upon
historical cost. While it is difficult to accurately measure the impact of
inflation due to the imprecise nature of the estimates required, we believe
that the effects of inflation, if any, on our results of operations and
financial condition have been minor.

Critical Accounting Policies

As described in Note 2 to the Consolidated Financial Statements, inventories
are valued at the lower of average cost or market, on a first-in, first-out
basis, utilizing the retail method. Under the retail method, the valuation of
inventories at cost and the resulting gross margins are calculated by applying
a calculated cost-to-retail ratio to the retail value of inventories. The
retail method is an averaging method that has been widely used in the retail
industry due to its practicality. Also, it is recognized that the use of the
retail method will result in valuing inventories at lower of cost or market if
markdowns are currently taken as a reduction of the retail value of inventories.

Inherent in the retail method are certain significant management judgments
and estimates including, among others, initial merchandise markup, markdowns
and shrinkage, which significantly impact the ending inventory valuation at
cost as well as the resulting gross margins. The Company calculates inventory
valuations on an individual item-class basis to ensure a high degree of
accuracy in estimating the cost. Management regularly reviews inventories for
slow-moving items and records markdowns and reserves to properly state
inventory valuations at the lower of cost or market.

424B1 28th Page of 66 TOC 1st Previous Next ↓Bottom Just 28th
Property and equipment are stated at cost, net of accumulated depreciation
and amortization. As described in Note 2 to the Consolidated Financial
Statements, service lives are established for store assets ranging from 5 to 10
years for building improvements and 3 to 10 years for other property and
equipment. Assets are reviewed on an annual basis for impairment, and based on
management's judgment, are written down to the estimated fair value based on
anticipated future cash flows. No impairment charges have been recorded based
on management's review.

Recently Issued Accounting Standards

EITF Issue No. 00-14, "Accounting for Certain Sales Incentives," became
effective in the first quarter of 2002 and addresses the accounting for, and
classification of, various sales incentives. The Company has determined that
adopting the provisions of this EITF Issue will not have a material impact on
its consolidated financial statements.

Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting
for Asset Retirement Obligations," will be effective in the first quarter of
2003. The standard requires entities to record the fair value of a liability
for an asset retirement obligation in the period in which it is incurred. When
the liability is initially recorded, the entity capitalizes the corresponding
estimated retirement cost by increasing the carrying amount of the related
long-lived asset. Over time, the liability is accreted to its present value
each period, and the capitalized cost is depreciated over the useful life of
the related asset. Upon settlement of the liability, an entity either settles
the obligation for its recorded amount or incurs a gain or loss upon
settlement. Because costs associated with exiting leased properties at the end
of the lease terms are minimal, the Company believes that when the statement is
adopted, it will not have a significant effect on the Company's results of
operations or its financial position.

In October 2001, the Financial Accounting Standards Board issued SFAS No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No.
144 supercedes SFAS 121 and applies to all long-lived assets (including
discontinued operations) and consequently amends Accounting Principles Board
Opinion No. 30 (APB 30), "Reporting Results of Operations Reporting the Effects
of Disposal of a Segment of a Business." SFAS 144 develops one accounting model
(based on the model in SFAS 121) for long-lived assets that are to be disposed
of by sale. This model requires that long-lived assets that are to be disposed
of by sale be measured at the lower of book value or fair value less cost to
sell. Additionally, SFAS 144 expands the scope of discontinued operations to
include all components of an entity with operations that (1) can be
distinguished from the rest of the entity and (2) will be eliminated from the
ongoing operations of the entity in a disposal transaction. SFAS 144 is
effective for the Company's first quarter in fiscal 2002. The Company is
currently evaluating the impact of adopting SFAS 144 but the Company's
management does not expect the adoption of SFAS 144 to have a significant
impact on the results of operations, cash flows or the financial position of
the Company.

424B1 29th Page of 66 TOC 1st Previous Next ↓Bottom Just 29th
Seasonality and Quarterly Fluctuations

As illustrated in the table below, our business is highly seasonal, with
significantly higher sales, gross income, and net income realized during the
fourth quarter, which includes the December holiday selling season.

[Download Table]

First Second Third Fourth
-------- -------- -------- --------
(in thousands, except percentages)

2001 Quarters
Net sales......... $136,657 $125,468 $148,763 $191,801
% of full year. 22.7 % 20.8 % 24.7 % 31.8 %
Gross income...... $ 44,963 $ 40,974 $ 51,382 $ 80,203
% of full year. 20.7 % 18.8 % 23.6 % 36.9 %
Net income........ $ 3,815 $ 2,877 $ 8,040 $ 24,831
% of full year. 9.6 % 7.3 % 20.3 % 62.8 %

2000 Quarters (1)
Net sales......... $118,753 $108,315 $133,829 $184,143
% of full year. 21.8 % 19.9 % 24.5 % 33.8 %
Gross income...... $ 39,472 $ 34,731 $ 45,257 $ 73,121
% of full year. 20.5 % 18.0 % 23.5 % 38.0 %
Net income........ $ 3,142 $ 1,921 $ 6,378 $ 20,804
% of full year. 9.7 % 6.0 % 19.8 % 64.5 %

1999 Quarters
Net sales......... $ 94,598 $ 86,365 $114,236 $155,227
% of full year. 21.0 % 19.2 % 25.4 % 34.4 %
Gross income...... $ 31,274 $ 28,107 $ 37,756 $ 61,052
% of full year. 19.8 % 17.8 % 23.9 % 38.5 %
Net income........ $ 1,622 $ 1,004 $ 4,740 $ 17,210
% of full year. 6.6 % 4.1 % 19.3 % 70.0 %

--------
(1) The fourth quarter of fiscal year 2000 represents the 14-week period ended
February 3, 2001.

424B1 30th Page of 66 TOC 1st Previous Next ↓Bottom Just 30th
Business

Overview

We are a leading specialty retailer of branded apparel and lifestyle
products for 'tween girls, ages 7 to 14, and recently introduced a new retail
concept for teen girls ages 14 to 19. As of February 2, 2002, we operated 459
Limited Too stores, targeting the 'tween segment, and seven mishmash stores,
targeting the teen girl segment. We design, source and market our products
under our proprietary brands, Limited Too and mishmash, for sale exclusively in
our stores. Our sales strategy is to integrate our retail, direct mail and
website channels, to provide marketing vehicles and sources for the latest
fashion and trends. Both store concepts are located primarily in high-traffic
mall locations.

Our Competitive Strengths

We combine our trend-sensitive design capabilities and our
vertically-integrated operations to design and market products for
fashion-aware 'tween and teen girls. We attribute our success to date and our
opportunities to increase sales, profits and market share to the following
strengths:

Customer focus. A cornerstone of our business strength has been our ability
to develop, cultivate and satisfy a base of loyal, repeat customers. By staying
close to our customer, we have developed a detailed knowledge of the fashion
tastes, purchasing habits and attitudes of the 'tween consumer. We conduct
focus groups, hang out at malls, shop the competition and attend concerts to
observe and interact with our customers. Our internal database includes over
six million customer names. Approximately 2.5 million of these customers have
made purchases from us in the past 12 months. We believe our knowledge of the
customer allows us to rapidly respond to her evolving needs and provide her
with unique and fashionable merchandise as she grows older and into our
mishmash concept.

424B1 31st Page of 66 TOC 1st Previous Next ↓Bottom Just 31st
Brand development expertise. We believe our unique merchandising and
creative marketing have made Limited Too a focused and differentiated brand
within the 'tween segment. Our Limited Too brand appeal is driven by, augmented
by and should continue to benefit from, trends that emphasize the latest
fashions and the aspirational lifestyle of today's 'tween girls who want to
look and dress like older girls who wear the latest trends in junior fashions.
We have demonstrated an ability to effectively communicate this brand image
through all aspects of our business, including store environments, merchandise
assortments, direct mail and our website. We believe our integrated approach to
brand management provides us the opportunity to cross-sell and increase our
penetration of current merchandise categories and facilitates entry into new
product categories. We intend to develop our mishmash concept with distinct
images so it can be expanded in the same manner.

Proprietary design and merchandising capabilities. As a
vertically-integrated specialty retailer, we develop substantially all of our
merchandise assortment through our design group, which allows us to create a
vast array of exclusive merchandise under our proprietary brands and enables us
to respond quickly to changing fashion trends. Additionally, because our
merchandise is sold exclusively in our stores, we are able to control the
presentation and pricing of our merchandise and provide a high level of
customer service. Our merchandising strategy of offering broad assortments
allows us to constantly introduce new and fresh elements of the latest fashion
trends. We believe that these capabilities provide us with a competitive
advantage over other brand manufacturers that market their goods through
department and other specialty apparel stores.

Store design and creation. A major element of our success is the consistent
store-level execution of our brand strategy. We tightly control our in-store
presentation through detailed and comprehensive store plans. These plans use
visual displays and fixtures designed to brand our stores in a manner tailored
to appeal to our target customer group. We design our Limited Too stores to
provide a "theme park" destination in the mall and to encourage our customers
to touch and sample our products. All of our Limited Too stores contain a wide
variety of merchandise for a "one-stop shopping" experience, which has been
specifically designed to embody a "store for her" theme. Our stores feature
colorful window displays, photographic sticker booths, gumball machines and
eye-catching photographs and marketing. Additionally, all Limited Too stores
opened or remodeled since mid-1997 have our Girl Power format, which includes
photographs of our target customer on the front-of-the-store signage and
creates a cool, girl-friendly environment. It provides a flexible store format
to frequently change our merchandise presentations. We are applying a similar
philosophy and execution discipline in connection with our development of
mishmash.

Integrated sales channels. We offer our products through three integrated
sales channels for Limited Too: our stores, catazines, which incorporate
editorial content with product in our catalog, and website. We believe that our
three sales channels, which we refer to as our 360-degree brand, allow us to
leverage our experience in customer service and increase the visibility of our
brand. Our catazines and website give our customers additional opportunities to
preview our products and current fashion trends. Though customers have the
opportunity to buy directly through all three channels, we believe the direct
channels serve primarily to build our brand's exposure and to drive store
traffic.

Proven management team. Our management team has increased the level of brand
awareness and consistently delivered improved financial results over the past
five years. We believe that our management has a distinct understanding of our
customers and is able to execute design, sourcing and marketing strategies to
profitably penetrate our target customer groups. Our executive officers have
extensive experience in the retail industry and have demonstrated a track
record of highly profitable growth, which positions us well for the future.

Our Growth Strategy

Our growth strategy focuses on four goals: (i) expanding the Limited Too
store base with continued store openings and remodelings, (ii) expanding our
mishmash concept, (iii) driving sales growth through direct mail and other
marketing initiatives and (iv) executing merchandise and sourcing strategies to
satisfy our target customers' needs while improving our gross income rate.

424B1 32nd Page of 66 TOC 1st Previous Next ↓Bottom Just 32nd
Limited Too stores. As of February 2, 2002, we operated 459 Limited Too
stores. Given the strength of our brand and our customer demographics, our
management team believes that there are approximately 200 to 250 sites
available for new stores, including regional malls, outlet centers, specialty
centers and major urban locations. We intend to continue our store expansion
program by opening approximately 50 to 55 new stores per year and remodeling
approximately 10 stores per year. In the long term, we expect Limited Too to
become a 650- to 700-store chain.

mishmash stores. In addition to our expansion of Limited Too stores, we are
developing and expanding our new mishmash store concept. We currently have nine
mishmash stores throughout the United States, offering personal care, shoes,
intimate apparel, accessories and lifestyle products for teen girls ages 14 to
19. mishmash stores currently average approximately 2,300 square feet, and we
anticipate future stores will average in excess of 3,000 square feet as we
expand the sportswear portion of our merchandise assortment. During 2002, we
intend to continue to refine our merchandise assortment and build the
infrastructure to support our mishmash roll-out. We expect that these steps
will enable us to open 30 to 50 mishmash stores in fiscal 2003.

Direct mail and other marketing initiatives. We are committed to enhancing
our brand recognition and plan to continue the expansion of our catazine and
direct mail contact strategy. The Limited Too catazine is our primary direct
mail vehicle, and we plan on increasing the number of catazine editions to
eight in fiscal 2002, from seven in 2001 and five in 2000. We expect our total
fiscal 2002 circulation to exceed 34 million catazines, representing an
increase of approximately 55% from fiscal 2001. Our ongoing analysis of the
catazine's impact on sales demonstrates that it drives additional sales into
our stores. We have created, and have plans for, other direct mail initiatives,
including expansion of our personalized birthday program, creating eight
million additional points of contact in fiscal 2002.

We intend to complement our direct mail initiatives with a variety of
marketing strategies. We have multiple marketing relationships that promote our
brand and have recently expanded our marketing efforts to focus on national
television advertising, including cross-promotions with major media companies
such as Disney and Universal Studios and consumer product companies. In the
future, we also intend to continue many of our current initiatives, such as our
frequent buyer and Too Bucks programs. We believe our direct mail and marketing
initiatives will increase brand loyalty and encourage repeat customer visits to
our stores.

Merchandise and sourcing strategies. We believe that our ability to design,
source and market merchandise quickly and effectively has been a key element of
our success. We plan to develop new ways to expand existing merchandise
categories and to introduce new product offerings. As part of our plan to
continue to improve our gross income rate, we intend to open our first direct
sourcing office, in Hong Kong, by the summer of 2002. This will allow us to
substantially reduce the involvement of agents, brokers and middlemen as we
establish increased direct relationships with factories. We expect to realize
meaningful cost savings beginning in fiscal 2003 as a result of this long-term
initiative.

Our Industry

Our 'tween market. As the leading specialty retailer that focuses on 7 to 14
year-old 'tween girls, we believe we are benefiting from several positive
demographics. Our Limited Too stores target a stable 'tween population that is
composed of nearly 16 million girls. According to NPD, the 7 to 14 year-old
girls apparel market, including discount, specialty, chain and department
stores, was $9.9 billion in 2000. Additionally, the specialty channel, which
represented 20.4% of this overall market in 1998, increased to 26.6% of the
market in 2000, while chain and department stores declined as a percentage of
the market.

424B1 33rd Page of 66 TOC 1st Previous Next ↓Bottom Just 33rd
7 to 14 Year Old 'Tween Girl Apparel
Market Share by Segment

[Download Table]

1998 1999 2000
----- ----- -----

Specialty........ 20.4% 23.5% 26.6%
Department/Chain. 35.7 33.1 30.0
Discount......... 30.2 29.1 28.8
Other............ 13.7 14.3 14.6
----- ----- -----
Total..... 100.0% 100.0% 100.0%

--------
Source: NPD Group.

Our teen market. Our new mishmash retail concept targets a slightly older
(14 to 19 years old) female customer which enables us to extend our target
demographics and utilize our existing database of six million 'tween girls as
Limited Too customers get older. According to the U.S. Census Bureau, the
teenage population in the United States, which is defined as persons 12 to 19
years old, will grow approximately 37% faster than the overall population, from
approximately 32 million in 2000 to approximately 34 million in 2005. According
to Teenage Research Unlimited, an independent research firm, total spending by
teenagers (boys and girls) has grown to $172 billion in 2001 from $141 billion
in 1998, reflecting a compound annual growth rate of 6.8%, more than double the
rate of inflation during this period. Of that spending, an estimated 46% was
spent on apparel and personal care products. With our mishmash expansion, we
will be able to extend our target demographic.

Our Stores

As of February 2, 2002, we operated 459 Limited Too and seven mishmash
stores in 46 states. Our stores are primarily located in traditional malls.
Included are 14 stores located in specialty centers, which generally contain
traditional mall-type stores in an outdoor setting, and 11 stores located in
outlet centers. Regardless of setting, all of our stores maintain consistent
marketing, merchandise and layout characteristics. The following table shows
the number of Limited Too stores operated by us over the past five fiscal years.

[Enlarge/Download Table]

Fiscal Year Ended
----------------------------------------------------------
February 2, February 3, January 29, January 30, January 31,
2002 (1) 2001 2000 1999 1998
----------- ----------- ----------- ----------- -----------

Number of stores:
Beginning of year.......................... 406 352 319 312 308
Opened..................................... 57 58 42 10 7
Closed..................................... (4) (4) (9) (3) (3)
------ ------ ------ ------ ------
459 406 352 319 312
------ ------ ------ ------ ------
Stores remodeled........................... 6 10 18 15 -
Stores in Girl Power format................ 216 156 89 29 4
% in Girl Power format..................... 47% 38% 25% 9% 1%
Total square feet at period end (thousands) 1,881 1,669 1,441 1,281 1,244
Average store size at period end (square
feet).................................... 4,098 4,111 4,094 4,015 3,987
Annual sales per average square foot (2)... $ 336 $ 341 $ 329 $ 299 $ 258

--------
(1) Amounts exclude mishmash stores.
(2) Annual sales per average square foot is the result of dividing net sales
for the fiscal year by average gross square feet, which reflects the impact
of opening and closing stores throughout the year.

424B1 34th Page of 66 TOC 1st Previous Next ↓Bottom Just 34th
Limited Too stores. Our Limited Too stores and point-of-sale marketing are
designed to convey the principal elements and personality of our "Limited Too"
brand - creativity, fashion awareness and excitement for increasingly
independent girls. We plan and coordinate our store design, furniture, fixtures
and music to create a shopping experience that is consistent with the
fashionable and energetic lifestyle of our target customer group. Our design
embodies a "store for her" concept, featuring an abundance of light, lower and
accessible fixtures, bright colors and popular music appropriate for our 'tween
customers. We believe that our customers consider our stores to be entertaining
and a multi-sensory overload, in which they feel welcomed and "cool."

We vary slightly the inventory mix of our stores depending on the regional
climate, fashion taste or traffic volume of a particular mall. This enables us
to be cost-effective in recognizing each store's ability to support additional
inventory while maintaining a uniformly positive shopping experience for our
customers. We maintain a uniform appearance throughout our store base in terms
of marketing and merchandise display and location on the selling floor. Store
managers receive detailed store plans that dictate fixture and merchandise
placement to ensure uniform execution of our merchandising strategy at the
store level and the portrayal of our brand in a manner designed to appeal to
our target customer group. Standardization of store design and merchandise
presentation also creates cost savings in store furnishings and marketing,
maximizes usage and productivity of selling space and allows us to open new
stores efficiently.

Each year, we have four major floor sets with matching window displays to
correspond with our spring, summer, back-to-school and Christmas holiday
shopping periods. Every two to three weeks, our management coordinates and
directs our stores to modify these floor sets and usually the coordinated
window displays, highlighting different merchandise and moving displays to
different areas within the store. These frequent changes enable us to profile
new merchandise while fostering our brand image as featuring the "hottest"
fashions.

Our sales associates are a central element in creating our stores'
distinctive atmosphere. In addition to providing a high level of friendly
customer service, our sales associates reinforce the fashion-awareness of our
brand and cater to the energetic lifestyle of today's girls.

Our 2001 store openings are trending to achieve an annualized first-year
after tax cash return on investment, or ROI, of approximately 65%, representing
our fourth consecutive year of improved return on new store openings. We
estimate that the average cost for leasehold improvements, furniture and
fixtures for stores to be opened in fiscal 2002 will be between $175,000 and
$190,000 per store, after giving effect to landlord allowances. Average
pre-opening costs per store, which will be expensed as incurred, are expected
to be approximately $10,000, while inventory purchases are expected to average
approximately $75,000 per store. Due to lower occupancy costs, our outlet
locations produced a substantially higher first year after-tax ROI than that of
our mall-based stores in fiscal 2001. Accordingly, we expect that outlet
locations will make up a higher proportion of our new store openings in the
future. Our costs for remodeling or expanding existing stores range from
$250,000 to $450,000 per store.

mishmash stores. We currently have nine mishmash stores throughout the
United States, offering personal care, shoes, intimate apparel, accessories and
lifestyle products for teen girls ages 14 to 19. mishmash stores currently
average approximately 2,300 square feet, and we anticipate future stores will
average in excess of 3,000 square feet as we expand the sportswear portion of
our merchandise assortment. During 2002, we intend to continue to refine our
merchandise assortment and build the infrastructure to support our mishmash
roll-out. We expect these steps will enable us to open 30 to 50 mishmash stores
in 2003. Our mishmash concept allows us to leverage our existing database of
six million 'tween girls and continue to capture these customers as they get
older by providing a new, unique shopping destination that appeals to more
mature teen girls. The store design is "retro-cool" and is inspired by the
colors and sensations of Miami's South Beach. The design was recently awarded
first place by the well-respected Visual Merchandising and Store Design
magazine. We offer a breadth of products that enables the teen customer to
complement her fashionable appearance with accessories, intimate

424B1 35th Page of 66 TOC 1st Previous Next ↓Bottom Just 35th
apparel, cosmetics, sportswear and shoes, as well as other novelty items
expressive of her distinct personality and tastes. We have expanded our
merchandising team and will leverage our knowledge of teen girls to refine our
merchandising strategy and store concept for mishmash. We have not yet launched
any advertising or promotional initiatives for our mishmash stores. However, as
with our Limited Too concept, we intend to employ an integrated brand
management strategy including unique in-store designs, seasonal promotional
programs, creative signage and window displays and complementary direct mail
and website initiatives.

Point-of-sale system. By the end of the back-to-school selling season in
July 2002, we expect to complete the installation of a new point-of-sale
system. This planned technology upgrade will enable us to provide a greater
level of customer service, enhance the communication link with our stores,
improve back-office operations and offer the opportunity to automate
promotional programs such as our Frequent Buyer program and gift certificates.

Our Direct to Consumer Channels

Direct mail. We mailed our first catazine during the 1999 back-to-school
period. Catazines, which incorporate a magazine format and style with a product
catalog, promote our Limited Too brand's lifestyle image and offer our
customers the opportunity to shop by mail or in the store. Each edition is
mailed to coincide with either key shopping seasons: (spring break, summer,
back-to-school and the Christmas holiday) or changes in our floorset. Catazines
include a similar merchandise assortment as our retail stores and, along with
our website, offer expanded sizes in fitted bottoms for the slightly larger
girl that are not available in our stores. We have found that our customers
often identify items in the catazine that they want to purchase and then use
the catazine as a "shopping guide" when they visit our stores. Other direct
mail initiatives also include personalized birthday card mailings and themed
coupons for in-store purchases. We engage third parties to assist us with print
production and other creative services, circulation and fulfillment.

Website. Our Limited Too website offers another point of purchase for our
customers. We offer online the same selected assortment of merchandise as in
our catazines, including larger sizes, as well as clearance items. Our website
is designed to be easy to navigate, with links to products sorted by category.
Customers can also place orders from our catazines online and apply for our
private label credit card. The site's colorful graphics and photographs of
girls engaging in popular lifestyle activities capture the energy and
excitement of our Limited Too stores.

Our Merchandising Philosophy

Product mix. We design and sell all of our apparel under our proprietary
Limited Too and mishmash brands. In addition, we source and purchase
merchandise from over 350 suppliers.

Our Limited Too store merchandise assortment covers a broad array of
classifications in girls apparel, including jeans and other jeanswear, bottoms,
knit tops, T-shirts, shorts, skirts, dresses and outerwear. For many of these
products, we have both fashion basic and fashion-forward versions. Because our
customer grows out of her top and bottom clothing items at roughly the same
time and in order to make our customers feel more secure in their fashion
choices, we display our merchandise as complete outfits, instead of displaying
garments together by product. Our outfits are displayed with complementary
matching accessories and other related items, which we believe helps promote
higher sales volume through multiple unit sales. In addition to apparel, we
offer accessory products such as key chains, wallets, backpacks, purses and
watches, as well as lifestyle products. Our lifestyle products include products
for her room such as inflatable furniture, candles, lamps and posters, as well
as small toys, candy, stickers and stationery.

Our GirlCare line includes toiletries, such as shower gel and body splash,
accessories, such as hairbrushes and manicure sets, and cosmetics, such as
glitter nail polish and lip gloss. These GirlCare products are generally

424B1 36th Page of 66 TOC 1st Previous Next ↓Bottom Just 36th
arranged in our stores so that our customers can experiment with our products
and consult their friends and our sales associates. A substantial portion of
our GirlCare line is under $10 so that our target customer can spend her own
money. In addition, our Limited Too stores' assortment includes approximately
3% of third-party branded merchandise, predominantly in the footwear and
accessories categories.

Our mishmash stores offer lifestyle and accessory products including
cosmetics, intimate wear, shoes, candy, hair accessories, watches and picture
frames, as well as a limited apparel selection, including graphic tees,
underwear and sleepwear. While most of the merchandise is sold under the
mishmash label, our cosmetics and shoe categories include third-party brands.

We believe that there are significant opportunities to increase volume
through both increased penetration of existing merchandise classifications and
addition of new classifications. Management believes that our ability to design
and market new merchandise quickly and effectively has been a key element of
our success. In recent years, we have broadened our Limited Too product
assortment in existing categories to increase volume and productivity. We will
continue to expand key categories.

Distribution and sourcing. Our vertically-integrated operations allow us to
control the process from the design stage through delivery to our stores. This
control allows us to respond quickly to changing trends and customer
preferences and insures that our merchandise is unique.

In the first quarter of 2002, we transitioned our distribution operations to
a new distribution center in Etna, Ohio. Our new distribution center,
approximately 470,000 square feet, is the processing center for merchandise
that is shipped to our stores. The new facility is specifically designed to
support our retail operations, and has sufficient capacity to service 800
stores and can be expanded to support another 200 stores. Additionally, we own
adjacent land for further expansion. Owning and operating our own distribution
center will improve control of our distribution needs, and better facilitate
our long-term supply and logistics needs.

We use a variety of vendors to produce our merchandise. In fiscal 2001, we
purchased merchandise from approximately 350 suppliers. Historically, our
largest apparel supplier has been Mast Industries, Inc., a wholly-owned
subsidiary of The Limited. Mast Industries supplied approximately 30% of the
merchandise that we purchased in fiscal 2001. We intend to open our first
direct sourcing office, in Hong Kong, by the summer of 2002. This will allow us
to substantially reduce the involvement of agents, brokers and middlemen as we
establish increased direct relationships with factories. We expect to realize
meaningful cost savings as a result of this long-term initiative. Additionally,
we believe that we have strong and loyal relationships with our vendors, which
provides us short lead times and greater flexibility for inventory
replenishment. Our catazine and website orders are fulfilled through an
outsourced distribution and fulfillment center in Texas.

Inventory management. Our approach to inventory management emphasizes rapid
turnover, historically averaging in excess of eight times per year, which we
believe is faster than most of our competitors. In addition, we take markdowns
where required to keep merchandise fresh and current with fashion trends. Our
policy is to maintain sufficient quantities of inventory on hand in our retail
stores and distribution center so that we can offer customers a full selection
of current merchandise.

In November, we began testing a new point-of-sale system. This planned
technology upgrade will enable us to provide a greater level of customer
service, enhance the communication link with our stores, and improve
back-office operations. All stores are expected to have the new system
installed before the back-to-school selling season commencing in July 2002.

We view the retail apparel market as having two principal selling seasons,
spring and fall. As is generally the case in the apparel industry, we
experience our peak sales activity during the fall season. This seasonal sales

424B1 37th Page of 66 TOC 1st Previous Next ↓Bottom Just 37th
pattern results in increased inventory during the back-to-school and Christmas
holiday shopping periods. During fiscal 2001, our highest inventory level
approximated $61 million at the end of November 2001 and the lowest inventory
level approximated $32 million at the end of May 2001.

Marketing and Promotion

Our marketing and promotional strategies are consistent with our focused and
differentiated brands. In the future, we intend to continue many of our current
in-store advertising and promotional initiatives that appeal to the fun loving
nature of our Limited Too stores' target customer group. Historically, we have
employed several marketing initiatives that we intend to continue. These
include:

Cross-promotions. We have multiple marketing relationships that promote our
brand and have engaged in cross-promotions with major media companies such as
Disney and Universal Studios and consumer product companies. We recently
completed a "15th Birthday Bash Sweepstakes" contest offering a Universal
Studios trip for the winner and her friends. In 2001, our "Passion for Fashion
Tour" included events such as fashion shows, contests and musical performances
by popular music stars.

Colorful window displays. We place large, bright, cheerful graphics or
photographs in at least one of our display windows. We change our displays
frequently and often pursue seasonal themes. We believe our window displays
attract customer attention in a busy mall environment and immediately allow
shoppers to recognize our store as a place for young girls. Our in-store
displays include a series of distinctive color photographs that are enlarged
and prominently displayed throughout the stores. These photographs contain
images of young girls engaged in popular lifestyle activities, which we believe
reinforce the peer-acceptance quality of our brand.

Frequent Buyer program. Our ongoing Frequent Buyer program uses a
wallet-sized punch card (the Frequent Buyer Card) that can be punched up to ten
times for every $20 increment spent in our stores. On the first and third
Tuesday of every month, through our "Too Punch Toosday" program, customers
receive double punches on their Frequent Buyer Card for each qualifying
purchase. After 10 punches, a customer can redeem the card for a $20 discount.
Approximately 1.8 million fully-punched Frequent Buyer Cards were redeemed in
fiscal 2001. In that same period, approximately 70% of all eligible
transactions (transactions over $20) used a Frequent Buyer Card in the
purchase, and a Frequent Buyer Card was redeemed in over 12% of all
transactions. In order to receive a Frequent Buyer Card, our customers are
asked to provide their name, address, birthday and their sister's name. This
program is the primary source for our customer information database.

Too Bucks program. Our event-oriented bounceback program occurs three times
a year: spring (around Easter), the fall back-to-school period and the
Christmas holiday shopping season. The program provides customers who purchase
$50 or more in any of our sales channels with $25 coupons, which can be used
toward purchases over $50 made during the two or three weeks after
distribution. Aggregating the three campaigns, the coupons are distributed for
approximately 18 weeks and redeemable for nine weeks; therefore, the campaign
is a part of our promotion strategy for 27 weeks of the year. For fiscal 2001,
nearly 50% of the coupons were redeemed.

Credit card program. We began our private label credit card program in
September 2000. We estimate that our Limited Too credit card customers spend
nearly twice as much per trip as our average customer. In fiscal 2001, our
first full year of the card, 300,000 new Limited Too credit cards were issued
and Limited Too credit card purchases represent an increasing proportion of our
sales.

Other promotions. Customers who successfully pass all classes at the end of
the grading period can bring in their report cards to redeem a $5 coupon that
can be used in the stores. We also send birthday cards to customers in our
database, which include a coupon that can be redeemed in our stores. In
addition, through our catazine mailings, we send out coupons with various
themes that can be used in our stores.

424B1 38th Page of 66 TOC 1st Previous Next ↓Bottom Just 38th
Our Relationship with The Limited

In August 1999, The Limited distributed to its shareholders in a spin-off
all of its interest in us on the basis of one share of our common stock for
each seven shares of The Limited's common stock. As a result of the spin-off,
we became an independent, separately traded, public company. In connection with
the spin-off, we entered into several agreements with The Limited which
continue to cover certain aspects of our ongoing relationship with The Limited,
including our license of the "Limited Too" brand name and arrangements with The
Limited under certain store leases.

Trademarks and Service Marks

We own trademarks and service marks, including mishmash, used to identify
our merchandise and services, other than our brand name, "Limited Too." Many of
these marks are registered with the U.S. Patent and Trademark Office. These
marks are important to us, and we intend to, directly or indirectly, maintain
and protect these marks and their registrations. However, we may choose not to
renew a registration of one or more of our merchandise marks if we determine
that the mark is no longer important to our business.

We also conduct business in foreign countries, principally because a
substantial portion of our merchandise is manufactured outside the United
States. We have registered marks in foreign countries to the degree necessary
to protect these marks, although there may be restrictions on the use of these
marks in a limited number of foreign jurisdictions.

A wholly-owned subsidiary of The Limited owns the brand name "Limited Too,"
which is registered in the United States and in numerous foreign countries.
This subsidiary licenses the brand name to one of our wholly-owned
subsidiaries. In connection with the spin-off, these subsidiaries entered into
a trademark and service mark licensing agreement that allows us to operate
under the "Limited Too" brand name in connection with our 'tween business. The
agreement is for an initial term of five years after the spin-off, renewable
annually thereafter at our option.

Competition

The sale of apparel and personal care products through retail stores and
direct-to-consumer channels is a highly competitive business with numerous
competitors, including individual and chain fashion specialty stores,
department stores, discount retailers and direct marketers. Depth of selection,
colors and styles of merchandise, merchandise procurement and pricing, ability
to anticipate fashion trends and customer preferences, inventory control,
reputation, quality of merchandise, store design and location, advertising and
customer services are all important factors in competing successfully in the
retail industry. We believe that our focused and differentiated brand provides
us an ability to compete successfully in our industry.

Associate Relations

As of February 2, 2002, we employed approximately 8,400 associates, none of
whom were parties to a collective bargaining agreement, approximately 6,400 of
whom were part-time. In addition, temporary associates are hired during peak
periods, such as the back-to-school and Christmas holiday shopping seasons.

Properties

Our home office facilities are located in New Albany, Ohio, within 10 miles
of our previous headquarters in Columbus, Ohio. In February 2002 we
transitioned our distribution operations to our new distribution center in
Etna, Ohio, within 15 miles of our new home office facilities. Our new
distribution center is approximately 470,000 square feet. We own both our new
distribution center and home office facilities.

424B1 39th Page of 66 TOC 1st Previous Next ↓Bottom Just 39th
As of February 2, 2002, we operated 459 Limited Too and seven mishmash
stores, which are located primarily in shopping malls throughout the United
States. Of these stores, 359 were leased directly from third
parties, principally shopping mall developers, and 107 were governed by leases
where the primary tenant is The Limited or an affiliate of The Limited. Of the
359 stores directly leased, 51 are guaranteed by The Limited. The leases expire
at various dates between 2002 and 2012. In fiscal 2001, total store rent was
$43.7 million. Minimum rent commitments under non-cancellable leases as of
February 2, 2002 totalled $48.5 million, $48.3 million, $46.6 million, $41.6
million and $34.6 million for fiscal years 2002 through 2006, respectively, and
$81.4 million thereafter.

Typically, when space is leased for a retail store in a shopping center, all
improvements, including interior walls, floors, ceilings, fixtures and
decorations, are supplied by the tenant. In certain cases, the landlord of the
property may provide a construction allowance to fund all or a portion of the
cost of improvements. The cost of improvements varies widely, depending on the
size and location of the store. Lease terms are typically ten years and usually
include a fixed minimum rent plus a contingent rent based on the store's annual
sales in excess of a specified amount. Certain operating costs such as common
area maintenance, utilities, insurance and taxes are typically paid by tenants.

Leases with The Limited or an affiliate of The Limited are on terms that
represent the proportionate share of the base rent payable in accordance with
the underlying lease plus the portion of any contingent rent payable in
accordance with the underlying lease attributable to our performance.
Additionally, The Limited provides guarantees on certain leases and assesses a
fee based on those stores' sales exceeding defined levels.

Litigation

Too, Inc. is involved from time to time in litigation incidental to its
business. Management believes that the outcome of current litigation will not
have a material adverse effect upon the operations or financial condition of
Too, Inc.

424B1 40th Page of 66 TOC 1st Previous Next ↓Bottom Just 40th
Management

Directors and Executive Officers

The following table sets forth the name, age and position of each of our
directors and executive officers:

[Download Table]

Name Age Position
---- --- --------

Michael W. Rayden... 53 Chairman of the Board of Directors, President and Chief
Executive Officer
Kent A. Kleeberger.. 50 Director, Executive Vice President-Chief Financial Officer,
Logistics and Systems, Secretary and Treasurer
Sally A. Boyer...... 41 Executive Vice President of Planning, Allocation and
Merchant Operations
James C. Petty...... 43 Senior Vice President-Stores
Ronald Sykes........ 60 Senior Vice President-Human Resources
Nancy J. Kramer..... 46 Director
David A. Krinsky.... 53 Director
Philip E. Mallott... 44 Director
Kenneth J. Strottman 53 Director

Mr. Rayden has served as our President and Chief Executive Officer since
March 1996. He was elected Chairman of the Board of the Company in August 1999.
Before joining the Company, he served as President, Chief Executive Officer and
Chairman of the Board of Pacific Sunwear of California, Inc. from 1990 to 1996,
President and Chief Executive Officer of The Stride Rite Corporation from 1987
to 1989 and President and Chief Executive Officer of Eddie Bauer Inc. from 1984
to 1987. Mr. Rayden is also on the board of directors of Strottman
International, Inc., a privately held company. Mr. Rayden was first elected to
the Board of Directors in August 1999.

Mr. Kleeberger has served as our Executive Vice President-Chief Financial
Officer, Logistics and Systems since February 2001. He also serves as our
Secretary and Treasurer. Mr. Kleeberger joined the Company as Vice President
and Chief Financial Officer in March 1998 following a 10-year career with The
Limited, Inc., including as Vice President-Controller of Victoria's Secret
Catalogue from 1991 to 1995 and Corporate Controller of The Limited, Inc. from
1995 to 1998. Mr. Kleeberger was first elected to the Board of Directors in
February 2000.

Ms. Boyer has served as our Executive Vice President of Planning, Allocation
and Merchant Operations since February 2001. Previously, Ms. Boyer served as
our Senior Vice President-Merchandising Operations since June 2000, and as Vice
President Merchandising Operations since May 1998. Ms. Boyer also held various
positions with us and The Limited, Inc., including Vice President-Planning and
Distribution from 1995 to 1998. Before joining The Limited, Inc. in 1991, she
served as a Financial Consultant for Andersen Consulting from 1990 to 1991, a
Merchandise Planner for The Limited, Inc. from 1989 to 1990 and Merchandise
Controller of Youthland, Inc. from 1984 to 1989.

Mr. Petty has served as our Senior Vice President-Stores since June 2000.
Previously, Mr. Petty served as our Vice President-Stores since June 1997. Mr.
Petty also held various positions involving store management and operations
with Old Navy, Inc., Banana Republic, Inc. and The Gap, Inc. during his 13-year
tenure with The Gap and its subsidiaries, including Vice President-Store
Operations of Old Navy, Inc. from 1994 to 1997 and Vice President-Store
Operations of Banana Republic, Inc. from 1991 to 1994.

424B1 41st Page of 66 TOC 1st Previous Next ↓Bottom Just 41st
Mr. Sykes has served as our Senior Vice President-Human Resources since
October 2000. Prior to joining the Company, he had been a principal since
October 1999 at Walker-Sykes Associates, LLC, an executive search firm. Mr.
Sykes owned his own executive search firm, Ron Sykes & Associates, from August
1998 to October 1999. From April 1995 to August 1998, he was a senior human
resources executive with The Limited Stores Inc. Mr. Sykes has held similar
positions with F & R Lazarus, Stride Rite Corporation, Jordan Marsh, A &
S/Jordan Marsh and Macy's East.

Ms. Kramer is President and Chief Client, Creative and Culture Officer of
Ten/Resource, a marketing firm specializing in integrated marketing solutions
for high technology clients. Ten/Resource was founded by Ms. Kramer in 1981 and
became part of the Ten Worldwide group of companies in 2001. Ms. Kramer was
first elected to the Board of Directors in August 1999.

Mr. Krinsky is a partner at the law firm of O'Melveny and Myers LLP in
Newport Beach, California. Before joining the firm as a partner in 1994, he was
a partner at the law firm of Pettis, Tester, Kruse & Krinsky. Mr. Krinsky
practices business and securities law. Mr. Krinsky was first elected to the
Board of Directors in August 1999.

Mr. Mallott is an independent financial consultant. He retired as Vice
President, Finance and Chief Financial Officer of Intimate Brands, Inc. in
February 2000, a position he held since 1995. Prior to joining Intimate Brands
in 1995, Mr. Mallott had been Chief Financial Officer of Structure, Inc., a
business operated by The Limited, Inc. From 1991 to 1994, Mr. Mallott was Vice
President-Finance at Structure. Mr. Mallott was first elected to the Board of
Directors in February 2000.

Mr. Strottman is the founder, President and Chief Executive Officer of
Strottman International, Inc., a marketing agency specializing in developing
promotional programs targeting children and families. Before founding his firm
in 1983, Mr. Strottman served as Vice President, Marketing, at Mattel, Inc. Mr.
Strottman was first elected to the Board of Directors in August 1999.

The Stock Option and Compensation Committee of the Board of Directors
consists of David A. Krinsky, Chairman, Nancy J. Kramer and Kenneth J.
Strottman. The Audit Committee of the Board of Directors consists of Philip E.
Mallott, Chairman, David A. Krinsky and Kenneth J. Strottman. Our former
director and member of the Audit Committee, James U. McNeal, submitted his
resignation from the Board of Directors to us on April 15, 2002. The Nominating
Committee of the Board of Directors, which consists of Kenneth J. Strottman,
Chairman, Nancy J. Kramer and Michael W. Rayden, is in the process of
identifying qualified candidates to fill the Board vacancy created by his
resignation.

424B1 42nd Page of 66 TOC 1st Previous Next ↓Bottom Just 42nd
Underwriting

Subject to the terms and conditions set forth in an underwriting agreement,
the underwriters named below have severally agreed to purchase, and we have
agreed to sell to each underwriter, the number of shares of common stock set
forth opposite their respective names below.

[Download Table]

Name Number of Shares
---- ----------------

Bear, Stearns & Co. Inc.... 1,200,000
J.P. Morgan Securities Inc. 1,200,000
---------
Total................... 2,400,000

The underwriting agreement provides that the obligations of the underwriters
to purchase shares of our common stock included in this offering are subject to
the approval of the validity of the common stock by counsel and other
conditions. The underwriters are obligated to take and pay for all of the
shares (other than those covered by the over-allotment option described below)
if any are taken. No underwriter is obligated to take any shares allocated to a
defaulting underwriter except under limited circumstances.

We have granted to the underwriters an option, exercisable at any time or
from time to time for 30 days from the date hereof, to purchase up to an
additional 360,000 shares of common stock at the public offering price less the
underwriting discount set forth on the cover page of this prospectus. The
underwriters may exercise that option solely for the purpose of covering
over-allotments, if any, made in connection with this offering.

The following table shows the per share and total underwriting discount to
be paid to the underwriters by us. These amounts are shown assuming both no
exercise and full exercise of the underwriters' option to purchase additional
shares.

[Download Table]

No Exercise Full Exercise
----------- -------------

Per Share $ 1.706 $ 1.706
Total.... $4,094,400 $4,708,560

Shares sold by the underwriters to the public will initially be offered at
the public offering price set forth on the cover of this prospectus. Any shares
sold by the underwriters to securities dealers may be sold at a discount of up
to $1.02 per share from the public offering price. Any such securities dealers
may resell any shares purchased from the underwriters to certain other brokers
or dealers at a discount of up to $0.10 per share from the public offering
price. If all the shares are not sold at the public offering price, the
representatives may change the offering price and the other selling terms.

We and our executive officers and directors have agreed that, during the
period beginning from the date of this prospectus and continuing to and
including the date 90 days after the date of this prospectus, none of us will,
directly or indirectly, offer, sell, offer to sell, contract to sell or
otherwise dispose of any shares of common stock or any of our securities which
are substantially similar to the common stock, including but not limited to any
securities that are convertible into or exchangeable for, or that represent the
right to receive, common stock or any such substantially similar securities or
enter into any swap, option, future, forward or other agreement that transfers,
in whole or in part, the economic consequence of ownership of common stock or
any securities substantially similar to the common stock, other than pursuant
to employee stock option plans existing on the date of this prospectus without
the prior written consent of the underwriters.

424B1 43rd Page of 66 TOC 1st Previous Next ↓Bottom Just 43rd
We have agreed to indemnify the underwriters against, or contribute to
payments that the underwriters may be required to make in respect of, certain
liabilities, including liabilities under the Securities Act of 1933, as amended.

The underwriters have advised us that they may make short sales of our
common stock in connection with this offering, resulting in the sale by the
underwriters of a greater number of shares than they are required to purchase
pursuant to the underwriting agreement. The short position resulting from those
short sales will be deemed a "covered" short position to the extent that it
does not exceed the 360,000 shares subject to the underwriters' over-allotment
option and will be deemed a "naked" short position to the extent that it
exceeds that number. A naked short position is more likely to be created if the
underwriters are concerned that there may be downward pressure on the trading
price of the common stock in the open market that could adversely affect
investors who purchase shares in this offering. The underwriters may reduce or
close out their covered short position either by exercising the over-allotment
option or by purchasing shares in the open market. In determining which of
these alternatives to pursue, the underwriters will consider the price at which
shares are available for purchase in the open market as compared to the price
at which they may purchase shares through the over-allotment option. Any naked
short position will be closed out by purchasing shares in the open market.
Similar to the other stabilizing transactions described below, open market
purchases made by the underwriters to cover all or a portion of their short
position may have the effect of preventing or minimizing a decline in the
market price of our common stock following this offering. As a result, our
common stock may trade at a price that is higher than the price that otherwise
might prevail in the open market.

The underwriters have advised us that, pursuant to Regulation M under the
Securities Act of 1933, they may engage in transactions, including stabilizing
bids, that may have the effect of stabilizing or maintaining the market price
of the shares of common stock at a level above that which might otherwise
prevail in the open market. A "stabilizing bid" is a bid for or the purchase of
shares of common stock on the behalf of the underwriters for the purpose of
fixing or maintaining the price of the common stock. The underwriters have
advised us that stabilizing bids and open market purchases may be effected on
the New York Stock Exchange, in the over-the-counter market or otherwise and,
if commenced, may be discontinued at any time.

One or more of the underwriters may facilitate the marketing of this
offering online directly or through one of its affiliates. In those cases,
prospective investors may view offering terms and a prospectus online and,
depending upon the particular underwriter, place orders online or through their
financial advisors.

We estimate that our share of the total expenses of this offering, excluding
underwriting discount, will be approximately $525,000.

We may use more than 10% of the net proceeds from the sale of the common
stock in this offering to repay indebtedness owed by us to affiliates of J.P.
Morgan Securities Inc. Therefore, this offering will be made in compliance with
the requirements of Rule 2710(c)(8) of the National Association of Securities
Dealers, Inc. Conduct Rules.

424B1 44th Page of 66 TOC 1st Previous Next ↓Bottom Just 44th
Legal Matters

The validity of the common stock will be passed upon for us by Porter,
Wright, Morris & Arthur LLP, Columbus, Ohio and certain other legal matters
related to the offering will be passed upon for us by O'Melveny & Myers LLP,
Menlo Park, California. A partner of O'Melveny & Myers LLP is one of our
directors and has been granted options to purchase 20,000 shares of our common
stock in connection with his service as a director, of which 3,750 are
currently exercisable. Certain legal matters related to the offering will be
passed upon for the underwriters by Davis Polk & Wardwell, New York, New York.

Experts

The financial statements as of February 2, 2002 and February 3, 2001 and for
each of the three years in the period ended February 2, 2002 included in this
prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

Where You Can Find More Information

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file with the SEC at its public reference facilities at
450 Fifth Street, N.W., Washington, D.C. 20549. You can also obtain copies of
the documents at prescribed rates by writing to the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for further information on the operation of the public
reference facilities. Our SEC filings are also available at the office of the
New York Stock Exchange. For further information on obtaining copies of our
public filings at the New York Stock Exchange, you should call (212) 656-5060.

We "incorporate by reference" into this prospectus the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. We incorporate by reference the documents
listed below and any filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 that we file with the SEC
after the date of the initial filing of the registration statement and prior to
the time we sell all of the securities offered by this prospectus:

. Our Annual Report on Form 10-K for the fiscal year ended February 2,
2002;

. Our Current Report on Form 8-K, filed on May 13, 2002; and

. The description of our common stock contained in our registration
statement on Form 10, dated August 18, 1999, and any amendments and
reports filed for the purpose of updating that description, including
our Registration Statement on Form 8-A, dated August 27, 2001, as
amended by Amendment No. 1 dated September 28, 2001, to that
Registration Statement on Form 8-A, containing a description of our
Rights Agreement, dated as of August 14, 2001, by and between Too, Inc.
and EquiServe Trust Company, N.A., as Rights Agent.

The information in this prospectus about Too, Inc. is not comprehensive and
you should also read the information in the documents incorporated by reference
into this prospectus. Information that we file later with the SEC and that is
incorporated by reference into this prospectus will automatically update and
supersede information in this prospectus.

424B1 45th Page of 66 TOC 1st Previous Next ↓Bottom Just 45th
You may request a copy of any or all of the documents incorporated by
reference in this prospectus at no cost, by writing to or telephoning us at the
following address:

Too, Inc.
8323 Walton Parkway
New Albany, Ohio 43054
Attention: Robert A. Atkinson, Director, Investor Relations
(614) 775-3500

You should rely only on the information included or incorporated by
reference in this prospectus. We have not authorized anyone else to provide you
with different information. We are only offering these securities in states
where the offer is permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the front of
this prospectus. Information on our website is not a part of this prospectus.

424B1 46th Page of 66 TOC 1st Previous Next ↓Bottom Just 46th
Index to Consolidated Financial Statements

[Download Table]

Page

Report of Independent Accountants......................... F-2
Consolidated Balance Sheets............................... F-3
Consolidated Statements of Income......................... F-4
Consolidated Statements of Changes in Shareholders' Equity F-5
Consolidated Statements of Cash Flows..................... F-6
Notes to Consolidated Financial Statements................ F-7

F-1

424B1 47th Page of 66 TOC 1st Previous Next ↓Bottom Just 47th
Report of Independent Accountants

To the Board of Directors and Shareholders of Too, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, shareholders' equity and cash flows present
fairly, in all material respects, the financial position of Too, Inc. and its
subsidiaries at February 2, 2002 and February 3, 2001, and the results of their
operations and their cash flows for each of the three years in the period ended
February 2, 2002 in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Columbus, Ohio
February 20, 2002

F-2

424B1 48th Page of 66 TOC 1st Previous Next ↓Bottom Just 48th
Too, Inc.
Consolidated Balance Sheets

[Enlarge/Download Table]

February 2, February 3,
2002 2001
----------- -----------
(in thousands except
share amounts)

Assets

Current assets:
Cash and equivalents......................................................... $ 63,538 $ 54,788
Receivables.................................................................. 2,547 2,422
Inventories.................................................................. 44,537 45,715
Store supplies............................................................... 10,357 9,050
Deferred income taxes........................................................ -- 2,898
Other........................................................................ 2,409 1,408
-------- --------
Total current assets............................................................ 123,388 116,281

Property and equipment, net..................................................... 126,415 81,184
Deferred income taxes........................................................... 14,786 10,321
Other assets.................................................................... 988 1,325
-------- --------

Total assets.................................................................... $265,577 $209,111
======== ========

Liabilities and shareholders' equity

Current liabilities:
Current portion long-term debt............................................... $ 17,500 $ --
Accounts payable............................................................. 23,341 24,213
Accrued expenses............................................................. 39,036 37,703
Income taxes payable......................................................... 19,696 13,603
-------- --------
Total current liabilities....................................................... 99,573 75,519

Long-term debt, less current portion............................................ 32,500 50,000

Other long-term liabilities..................................................... 5,295 3,881

Commitments and contingencies................................................... -- --

Shareholders' equity
Preferred stock, 50 million shares authorized................................... -- --
Common stock, $.01 par value, 100 million shares authorized, 31.3 million and
30.8 million shares issued and outstanding at February 2, 2002 and February 3,
2001.......................................................................... 313 308
Paid in capital................................................................. 35,338 26,408
Retained earnings............................................................... 92,558 52,995
-------- --------

Total shareholders' equity...................................................... 128,209 79,711
-------- --------
Total liabilities and shareholders' equity...................................... $265,577 $209,111
======== ========

The accompanying notes are an integral part of these Consolidated Financial
Statements

F-3

424B1 49th Page of 66 TOC 1st Previous Next ↓Bottom Just 49th
Too, Inc.
Consolidated Statements of Income

[Download Table]

2001 2000 1999
-------- -------- --------
(in thousands except
per share amounts)

Net sales............................................ $602,689 $545,040 $450,426
Costs of goods sold, buying and occupancy costs..... 385,167 352,459 292,237
-------- -------- --------
Gross income......................................... 217,522 192,581 158,189
General, administrative and store operating expenses 150,976 137,285 115,734
-------- -------- --------
Operating income..................................... 66,546 55,296 42,455
Interest expense, net................................ 583 1,551 1,479
-------- -------- --------
Income before income taxes........................... 65,963 53,745 40,976
Provision for income taxes........................... 26,400 21,500 16,400
-------- -------- --------
Net income........................................... $ 39,563 $ 32,245 $ 24,576
======== ======== ========
Net income per share:
Basic............................................... $ 1.28 $ 1.05 $ 0.80
Diluted............................................. $ 1.23 $ 1.02 $ 0.79
Weighted average common shares:
Basic............................................... 31,020 30,740 30,674
Diluted............................................. 32,038 31,737 30,974

The accompanying notes are an integral part of these Consolidated Financial
Statements.

F-4

424B1 50th Page of 66 TOC 1st Previous Next ↓Bottom Just 50th
Too, Inc.
Consolidated Statements of Changes
in Shareholders' Equity

[Enlarge/Download Table]

Common Shares
-------------
Net
Investment Total
Paid in by The Retained Shareholders'
Shares Amount Capital Limited Earnings Equity
------ ------ ------- ---------- -------- -------------
(in thousands)

Balances, January 30, 1999............. $ 50,017 $ 50,017
Net income prior to spin-off........... 3,826 3,826
Cash dividend to The Limited........... (50,000) (50,000)
Distribution of Too, Inc. common
stock by The Limited................. 30,674 $307 $24,410 (24,717) --
Transfers from The Limited, net........ 20,874 20,874
Net income after spin-off.............. $20,750 20,750
------ ---- ------- -------- ------- --------

Balances, January 29, 2000............. 30,674 307 24,410 -- 20,750 45,467
Net income............................. 32,245 32,245
Issuance of common stock under
stock option and restricted stock
plans................................ 85 1 1,100 1,101
Other, including tax benefit related to
issuance of stock under stock
option and restricted stock plans.... 898 898
------ ---- ------- -------- ------- --------

Balances, February 3, 2001............. 30,759 308 26,408 -- 52,995 79,711
Net income............................. 39,563 39,563
Issuance of common stock under
stock option and restricted stock
plans................................ 582 5 6,371 6,376
Other, including tax benefit related to
issuance of stock under stock
option and restricted stock plans.... 2,559 2,559
------ ---- ------- -------- ------- --------
Balances, February 2, 2002............. 31,341 $313 $35,338 $ -- $92,558 $128,209
====== ==== ======= ======== ======= ========

The accompanying notes are an integral part of these Consolidated Financial
Statements.

F-5

424B1 51st Page of 66 TOC 1st Previous Next ↓Bottom Just 51st
Too, Inc.
Consolidated Statements of Cash Flows

[Enlarge/Download Table]

2001 2000 1999
-------- -------- --------
(in thousands)

Cash flows from operating activities:
Net income.............................................. $ 39,563 $ 32,245 $ 24,576
Impact of other operating activities on cash flows:
Depreciation and amortization........................... 17,950 16,536 13,804
Changes in assets and liabilities:
Inventories............................................. 1,178 (11,059) (7,091)
Accounts payable and accrued expenses................... 536 (6,646) 40,075
Income taxes............................................ 6,569 (2,319) 980
Other assets............................................ (1,753) (1,386) (2,999)
Other liabilities....................................... 1,414 1,838 202
-------- -------- --------
Net cash provided by operating activities................ 65,457 29,209 69,547
-------- -------- --------
Investing activities:
Capital expenditures.................................... (63,598) (36,308) (31,424)
-------- -------- --------
Net cash used for investing activities................... (63,598) (36,308) (31,424)
-------- -------- --------
Financing activities:
Stock options, restricted stock and other equity changes 6,891 1,903 --
Net increase in investment by The Limited............... -- -- 20,874
Proceeds from borrowings under the credit facility...... -- -- 64,235
Payment of dividend to The Limited...................... -- -- (50,000)
Repayment of borrowings under the credit facility....... -- -- (14,235)
-------- -------- --------
Net cash provided by financing activities................ 6,891 1,903 20,874
-------- -------- --------
Net increase (decrease) in cash and equivalents.......... 8,750 (5,196) 58,997
Cash and equivalents, beginning of year.................. 54,788 59,984 987
-------- -------- --------
Cash and equivalents, end of year........................ $ 63,538 $ 54,788 $ 59,984
======== ======== ========

The accompanying notes are an integral part of these Consolidated Financial
Statements

F-6

424B1 52nd Page of 66 TOC 1st Previous Next ↓Bottom Just 52nd
Too, Inc.
Notes to Consolidated Financial Statements

1. Basis of Financial Statement Presentation

Too, Inc., (referred to herein as "Too" or the "Company") is the operator of
two specialty retailing businesses, Limited Too and mishmash. Limited Too sells
apparel, underwear, sleepwear, swimwear, footwear, lifestyle and personal care
products for fashion-aware, trend-setting young girls ages seven to fourteen
years. mishmash, launched by the Company in late September 2001, sells
cosmetics, sportswear, intimate apparel and footwear to young women ages
fourteen to nineteen. The assortment also includes accessories, jewelry, room
decor furnishings and lifestyle products. The accompanying consolidated
financial statements include the accounts of Too, Inc. and its subsidiaries and
reflect the Company's assets, liabilities, results of operations and cash flows
on a historical cost basis. The Company was established in 1987 and, prior to
the August 1999 spin-off, was a wholly-owned subsidiary of The Limited, Inc.
("The Limited").

Effective August 23, 1999, The Limited distributed to its shareholders of
record as of August 11, 1999, all of its interest in Too on the basis of one
share of Too common stock for each seven shares of The Limited common stock
(the "spin-off"). The spin-off resulted in 30.7 million shares of Too common
stock outstanding as of August 23, 1999. As a result of the spin-off, the
Company became an independent, separately traded, public company. In connection
with the spin-off, Too and The Limited entered into certain agreements which
are more fully described in Note 8. From the time of the spin-off until
December 31, 2001 (the most recent date for which the Company has been provided
beneficial ownership information for the shareholder), the Company's largest
shareholder was also the largest shareholder of The Limited.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Too and all
subsidiaries which are more than 50% owned. All significant intercompany
balances and transactions have been eliminated in consolidation. The Company
has one reportable segment which includes all of its products.

Fiscal Year

The Company's fiscal year ends on the Saturday closest to January 31. Fiscal
years are designated in the financial statements and notes by the calendar year
in which the fiscal year commences. The results for fiscal years 2001 and 1999
represent the 52-week periods ended February 2, 2002 and January 29, 2000,
respectively, while the 2000 fiscal year represents the 53-week period ended
February 3, 2001.

Cash Equivalents

The Company considers short-term investments with original maturities of
three months or less to be cash equivalents.

Inventories

Inventories are principally valued at the lower of average cost or market,
on a first-in, first-out basis, utilizing the retail method.

F-7

424B1 53rd Page of 66 TOC 1st Previous Next ↓Bottom Just 53rd
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

Store Supplies

The initial inventory of supplies for new stores including, but not limited
to, hangers, signage, security tags, packaging and point-of-sale supplies is
capitalized at the store opening date. In lieu of amortizing the initial
balance, subsequent shipments are expensed, except for new merchandise
presentation programs, which are capitalized. Store supply balances are
periodically reviewed and adjusted as appropriate for changes in supply levels
and costs.

Catalog and Advertising Costs

Catalog costs, principally catalog production and mailing costs, are
amortized over the expected revenue stream, which is generally three months
from the date that the catalogs are first mailed. All other advertising costs,
including costs associated with in-store photographs and direct mail campaigns,
are expensed at the time the promotion first appears in media or in the store.
Advertising costs amounted to $14.8 million, $8.4 million and $1.7 million for
fiscal years 2001, 2000 and 1999, respectively.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are
computed on a straight-line basis, using service lives ranging principally from
5 to 10 years for building improvements and 3 to 10 years for other property
and equipment. The cost of assets sold or retired and the related accumulated
depreciation or amortization are removed from the accounts, with any resulting
gain or loss included in net income. Interest costs associated with the
construction of certain long-term projects are capitalized. Maintenance and
repairs are charged to expense as incurred. Major renewals and betterments that
extend service lives are capitalized.

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that full recoverability is questionable. The store
assets are reviewed by district, in accordance with the method by which
management reviews store performance. Factors used in the valuation include,
but are not limited to, management's plans for future operations, recent
operating results and projected cash flows. Impaired assets are written down to
estimated fair value with fair value generally being determined based on
discounted expected future cash flows. No impairment charges have been recorded
based on management's review.

Income Taxes

The Company accounts for income taxes using the liability method. Under this
method, deferred tax assets and liabilities are recognized based on the
difference between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates in effect in the years when
those temporary differences are expected to reverse. The effect on deferred
taxes of a change in tax rates is recognized in income in the period that
includes the enactment date.

Prior to the spin-off, the Company was included in The Limited's
consolidated federal and certain state income tax returns for income tax
reporting purposes. However, income taxes in the Company's consolidated
financial statements were calculated as if the Company had filed separate
income tax returns for all periods presented. In connection with the spin-off,
the Company entered into a tax separation agreement with The Limited. The
purpose of this agreement was to reflect each party's rights and obligations
relating to payment and refunds of taxes attributable to periods up to and
including the year of the spin-off.

F-8

424B1 54th Page of 66 TOC 1st Previous Next ↓Bottom Just 54th
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

Revenue Recognition

Sales are recorded when the customer takes possession of merchandise -- that
is, the point of sale. Markdowns associated with the Frequent Buyer and Too
Bucks Programs are recognized upon redemption in conjunction with a qualifying
purchase. Catalog sales are recorded upon shipment to the customer. A reserve
is provided for projected merchandise returns based on prior experience.

In the fourth quarter 2000, the Company adopted Emerging Issues Task Force
(EITF) No. 00-10 "Accounting for Shipping and Handling Fees and Costs" which
changed its classification of shipping revenue. Amounts relating to shipping
and handling billed to customers in a sale transaction are now classified as
revenue. The Company considers related shipping and handling costs to be the
direct shipping charges associated with catalog and e-commerce sales. Such
costs are reflected in cost of goods sold, buying and occupancy costs. The
Company also changed the classification of employee discounts as a reduction of
revenue. Previously, shipping revenues and the related expenses and employee
discounts were included in SG&A. Prior periods' financial statements presented
for comparative purposes have been reclassified to comply with these new
reporting guidelines. These reclassifications had no impact on the results of
operations, cash flows or the financial position of the Company.

The Company adopted Staff Accounting Bulletin ("SAB") No. 101, "Revenue
Recognition in Financial Statements" during the fourth quarter of 2000. SAB No.
101 provides the Securities and Exchange Commission's views in applying
generally accepted accounting principles to selected revenue recognition
issues. The adoption of SAB No. 101 did not have a material effect on the
Company's results of operations, cash flows or financial position.

Store Pre-Opening Expenses

Pre-opening expenses related to new store openings are charged to operations
as incurred.

Financial Instruments

The recorded values of financial instruments, including cash and cash
equivalents, receivables, the current portion of long-term debt and accounts
payable, approximate fair value due to their short maturity. The recorded value
of long-term debt approximates fair value as the interest rate on such debt was
reset near the end of fiscal 2001.

Stock-Based Compensation

The Company accounts for stock options using Accounting Principle Board
Opinion No. 25 (APB 25) and has provided pro forma disclosures in accordance
with Statement of Financial Accounting Standards No. 123 (SFAS 123).

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding for the period. Diluted earnings
per share reflects the potential dilution that could occur if stock options or
restricted stock were converted into common stock using the treasury stock
method.

F-9

424B1 55th Page of 66 TOC 1st Previous Next ↓Bottom Just 55th
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

Earnings per share, as presented in the Consolidated Statements of Income,
for periods prior to the spin-off was calculated by dividing net income by the
30.7 million common shares issued in connection with the spin-off as if these
shares were outstanding for such periods. A reconciliation of basic and diluted
common shares used in the determination of earnings per share follows (in
thousands):

[Download Table]

2001 2000 1999
------- ------- -------

Net income........................................... $39,563 $32,245 $24,576

Weighted average common shares -- basic.............. 31,020 30,740 30,674
Dilutive effect of stock options and restricted stock 1,018 997 300
------- ------- -------
Weighted average common shares -- diluted............ 32,038 31,737 30,974
======= ======= =======

Options to purchase 208,000, 174,200 and 9,000 common shares were not
included in the computation of net income per diluted share for the fiscal
years ended February 2, 2002, February 3, 2001 and January 29, 2000,
respectively, as the options' exercise prices were greater than the average
market price of the common shares for the reported periods.

Use of Estimates in the Preparation of the Consolidated Financial Statements

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Because
actual results may differ from those estimates, the Company revises its
estimates and assumptions as new information becomes available.

Recently Issued Accounting Standards

EITF Issue No. 00-14, "Accounting for Certain Sales Incentives," will be
effective in the first quarter of 2002 and addresses the accounting for, and
classification of, various sales incentives. The Company has determined that
adopting the provisions of this EITF Issue will not have a material impact on
its consolidated financial statements.

F-10

424B1 56th Page of 66 TOC 1st Previous Next ↓Bottom Just 56th
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

No. 30 (APB 30), "Reporting Results of Operations Reporting the Effects of
Disposal of a Segment of a Business." SFAS 144 develops one accounting model
(based on the model in SFAS 121) for long-lived assets that are to be disposed
of by sale. This model requires that long-lived assets that are to be disposed
of by sale be measured at the lower of book value or fair value less cost to
sell. Additionally, SFAS 144 expands the scope of discontinued operations to
include all components of an entity with operations that (1) can be
distinguished from the rest of the entity and (2) will be eliminated from the
ongoing operations of the entity in a disposal transaction. SFAS 144 is
effective for the Company's first quarter in fiscal 2002. The Company is
currently evaluating the impact of adopting SFAS 144, but the Company's
management does not expect the adoption of SFAS 144 to have a significant
impact on the results of operations, cash flows or the financial position of
the Company.

Reclassifications

Certain reclassifications have been made to the prior years' financial
statements to conform to the classifications used in the current year.

3. Property and Equipment

Property and equipment, at cost, consisted of (in thousands):

[Download Table]

February 2, February 3,
2002 2001
----------- -----------

Land.............................. $ 7,797 $ 7,691
Furniture, fixtures and equipment. 105,554 93,880
Leaseholds improvements........... 45,408 42,528
Construction-in-progress.......... 49,069 3,643
-------- --------
Total.......................... 207,828 147,742
Less: accumulated depreciation and
amortization.................... (81,413) (66,558)
-------- --------
Property and equipment, net....... $126,415 $ 81,184
======== ========

4. Leased Facilities and Commitments

The Company operated stores under lease agreements expiring on various dates
through 2012. The initial terms of leases are generally 10 years. Annual store
rent is generally composed of a fixed minimum amount, plus contingent rent
based on a percentage of sales exceeding a stipulated amount. Many of the
leases provide for future rent escalations and renewal options. Most leases
require the Company to pay taxes, common area costs and certain other expenses.

At February 2, 2002, the Company operated 107 stores under sublease
agreements with The Limited. These sublease agreements require the Company to
pay a proportionate share, based on selling space, of all costs, principally
rent, maintenance, taxes and utilities. Pursuant to the sublease agreements,
the Company is required to pay contingent rent to The Limited if stores' sales
exceed a stipulated amount. The Limited also provides guarantees on 51 store
leases and assesses a fee based on stores' sales exceeding defined levels.

In addition, the Company leases certain equipment under operating lease
agreements that expire at various dates through 2006.

F-11

424B1 57th Page of 66 TOC 1st Previous Next ↓Bottom Just 57th
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

A summary of rent expense for the fiscal years 2001, 2000 and 1999 follows
(in thousands):

[Download Table]

2001 2000 1999
------- ------- -------

Fixed minimum......... $42,448 $36,881 $32,515
Contingent............ 1,290 1,649 1,037
------- ------- -------
Total store rent... 43,738 38,530 33,552
Equipment and other... 1,311 1,074 1,077
------- ------- -------
Total rent expense. $45,049 $39,604 $34,629
======= ======= =======

A summary of minimum rent commitments under noncancellable leases as of
February 2, 2002 follows (in thousands):

[Download Table]

2002...... $48,463
2003...... 48,289
2004...... 46,618
2005...... 41,633
2006...... 34,610
Thereafter 81,403

5. Accrued Expenses

Accrued expenses consisted of (in thousands):

[Download Table]

February 2, February 3,
2002 2001
----------- -----------

Compensation, payroll taxes and benefits $16,474 $16,057
Rent.................................... 7,225 8,276
Deferred revenue........................ 6,120 4,973
Taxes, other than income................ 3,727 3,864
Other................................... 5,490 4,533
------- -------
Total................................ $39,036 $37,703
======= =======

6. Credit Facility

During August 1999, the Company entered into a $100-million, five-year
credit agreement (the "Credit Facility") with a syndicate of banks. The Credit
Facility is collateralized by virtually all assets of the Company and comprises
a $50-million, five-year term loan and a $50-million revolving loan commitment.
The entire amount of the term portion was drawn in order to fund a $50-million
dividend to The Limited.

The $50-million revolving loan commitment is available to fund working
capital requirements and for general corporate purposes. Interest on borrowings
under the Credit Facility is based on matrix pricing applied to either the
London Interbank Offered Rate or Prime, as defined in the agreement. Payments
of principal under the

F-12

424B1 58th Page of 66 TOC 1st Previous Next ↓Bottom Just 58th
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

term loan are due at various dates from July 2002 to August 2004. A commitment
fee based on matrix pricing is charged on the unused portion of the revolving
loan commitment. The commitment fee is up to 1/2 of 1% of the unused revolving
credit commitment per annum. Under the terms of the Credit Facility, the
Company is required to comply with certain financial ratios. The Credit
Facility limits the Company from incurring certain additional indebtedness and
restricts substantial asset sales, capital expenditures above approved limits
and cash dividends. The Company is in compliance with all applicable terms of
the Credit Facility. As of February 2, 2002, there were no amounts outstanding
under the revolving portion of the Credit Facility.

The aggregate amount of future maturities for long-term debt are as follows:
$17.5 million in 2002; $20.0 million in 2003; and $12.5 million in 2004.

Net interest expense consisted of the following (in thousands):

[Download Table]

2001 2000 1999
------- ------- -------

Interest expense.... $ 3,787 $ 5,044 $ 2,622
Interest income..... (3,204) (3,493) (1,143)
------- ------- -------
Net interest expense $ 583 $ 1,551 $ 1,479
======= ======= =======

Interest paid in fiscal 2001, 2000 and 1999 amounted to $3.0 million, $4.7
million and $2.1 million, respectively.

7. Income Taxes

The provision for income taxes consisted of the following (in thousands):

[Download Table]

2001 2000 1999
------- ------- -------

Current:
Federal................... $21,877 $19,534 $13,631
State..................... 5,073 4,443 3,447
------- ------- -------
Total current............. 26,950 23,977 17,078
Deferred:
Federal................... (626) (2,347) (621)
State..................... 76 (130) (57)
------- ------- -------
Total deferred............ (550) (2,477) (678)
------- ------- -------
Total income tax provision $26,400 $21,500 $16,400
======= ======= =======

A reconciliation between the statutory federal income tax rate and the
effective income tax rate follows:

[Download Table]

2001 2000 1999
---- ---- ----

Federal income tax rate................... 35.0% 35.0% 35.0%
State income taxes, net of federal benefit 4.5 4.5 4.5
Other items, net.......................... 0.5 0.5 0.5
---- ---- ----
Total effective income tax rate........... 40.0% 40.0% 40.0%
==== ==== ====

F-13

424B1 59th Page of 66 TOC 1st Previous Next ↓Bottom Just 59th
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

The effect of temporary differences which give rise to net deferred tax
asset balances was as follows (in thousands):

[Download Table]

February 2, February 3,
2002 2001
--------------------------- -----------
Assets Liabilities Total
------- ----------- -------

Book depreciation in excess of tax.. $ 3,764 $ -- $ 3,764 $ 2,787
Rent................................ 1,366 -- 1,366 1,679
Inventory........................... 1,495 -- 1,495 1,149
Accrued expenses.................... 5,679 -- 5,679 4,558
Store supplies -- basis differential -- (2,594) (2,594) --
Other, net.......................... 4,059 -- 4,059 3,046
------- ------- ------- -------
Total deferred income taxes...... $16,363 $(2,594) $13,769 $13,219
======= ======= ======= =======

No valuation allowance has been provided for deferred tax assets because
management believes that it is more likely than not that the full amount of the
net deferred tax assets will be realized in the future.

Income taxes payable included net current deferred tax liabilities of $1.0
million in fiscal year 2001.

Subsequent to the spin-off, the Company began filing its tax returns on a
separate basis. Prior to the spin-off, income tax obligations were treated as
being settled through the intercompany accounts as if the Company was filing
its income tax returns on a separate company basis. Amounts paid to The Limited
related to income tax liabilities incurred prior to the spin-off totaled
$640,000, $8.5 million and $12.0 million in fiscal years 2001, 2000 and 1999,
respectively. Subsequent to the spin-off, the Company made income tax payments
directly to taxing authorities amounting to $21.4 million, $16.1 million and
$2.7 million in fiscal years 2001, 2000 and 1999, respectively.

8. Related Party Transactions

Prior to the spin-off, the Company and The Limited entered into service
agreements for generally a term of up to one year with most of the agreements
having expired during fiscal 2000. The remaining service agreements are for the
continued use by the Company of its home office space and distribution services
covering flow of goods from factory to store. These agreements are for a term
of up to three years from the spin-off date. Costs for these services are The
Limited's costs of providing the services plus 5% of these costs, excluding any
markup on third-party costs.

Significant merchandise purchases were made from Mast, a wholly-owned
subsidiary of The Limited. In fiscal year 2000 and 1999, merchandise purchases
were also made from Gryphon, an indirect subsidiary of The Limited. Mast is a
contract manufacturer and apparel importer while Gryphon was a developer of
fragrance and personal care products as well as a contract manufacturer. Prices
are negotiated on a competitive basis by merchants of Too with Mast, Gryphon
and manufacturers.

The Company does not anticipate that costs to replace the remaining service
agreements with The Limited will have a material adverse impact on its
financial condition.

F-14

424B1 60th Page of 66 TOC 1st Previous Next ↓Bottom Just 60th
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

Prior to the spin-off, transactions between the Company and The Limited and
its subsidiaries and affiliates primarily consisted of merchandise purchases,
capital expenditures, inbound and outbound shipping, store leasing,
construction and management, distribution center, information systems and
certain other home office and corporate services expenses. Management believes
that the charges and allocations related to the services as described above
were reasonable. However, these charges and allocations were not necessarily
indicative of the amounts that would have been recorded by Too on a stand-alone
basis.

The following table summarizes amounts incurred related to transactions
between Too and The Limited (in thousands):

[Download Table]

2001 2000 1999
-------- -------- --------

Merchandise purchases............................. $ 67,441 $ 74,866 $ 71,235
Capital expenditures.............................. -- 9,038 29,867
Inbound and outbound shipping..................... 8,359 8,717 6,790
Store leasing, construction and management........ 19,144 34,799 58,471
Distribution center, MIS and home office expenses. 8,571 12,325 12,508
Corporate services and centrally managed functions -- -- 8,723
-------- -------- --------
Total............................................. $103,515 $139,745 $187,594
======== ======== ========

Amounts payable to the Limited were $8.0 million at February 2, 2002 and
$13.2 million at February 3, 2001.

The following table summarizes activity in the net investment by The Limited
account for fiscal year 1999 (in thousands):

[Download Table]

1999
---------

Beginning balance................................... $ 50,017
Transactions with related parties................... 107,197
Centralized cash management, dividends and transfers (173,040)
Settlement of income taxes.......................... 12,000
Net income.......................................... 3,826
---------
Ending balance...................................... $ --
=========

9. Retirement Benefits

The Company sponsors a qualified defined contribution retirement plan and a
nonqualified supplemental retirement plan. Participation in the qualified plan
is available to all associates who have completed 1,000 or more hours of
service with the Company during certain 12-month periods and attained the age
of 21. Participation in the nonqualified plan is subject to service and
compensation requirements. The Company's contributions to these plans are based
on a percentage of the associates' eligible annual compensation. The cost of
these plans was $4.9 million, $4.2 million and $2.9 million in fiscal years
2001, 2000 and 1999, respectively.

F-15

424B1 61st Page of 66 TOC 1st Previous Next ↓Bottom Just 61st
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

10. Stock-Based Compensation

The Company has various stock option and restricted stock plans which
provide incentive stock options, non-qualified stock options and restricted
stock to officers and key associates. Stock options are granted at the fair
market value of the Company's common shares on the date of grant and generally
have 10-year terms. The options generally become exercisable in installments of
25% on each of the first four anniversaries of the grant date.

Prior to the spin-off, certain associates of the Company participated in The
Limited's stock option and restricted stock plans. In connection with the
spin-off, Too associates were allowed to exercise vested Limited options within
90 days of the spin-off date. All unvested Limited stock options and restricted
shares held by Too associates were replaced with Too stock options and
restricted shares (collectively, the "awards"). The awards have the same ratio
of the exercise price per option to the market value per share and the same
vesting provisions, option periods and other terms as The Limited's awards that
they replaced. The Company granted additional awards on the date of spin-off to
certain associates and independent directors with exercise prices equal to the
market value of Too's common stock at the date of spin-off.

Approximately 100,000 and 524,000 restricted shares were granted in 2000 and
1999 (inclusive of The Limited's restricted shares converted to Too restricted
shares in connection with the spin-off) with total market value at the grant
date of $2.7 million and $8.9 million, respectively. All 100,000 restricted
shares granted in 2000 and 399,000 of the restricted shares granted in 1999
were subject to performance requirements all of which have been met. Restricted
shares generally vest on a graduated scale over four years. The market value of
restricted shares, as adjusted at the measurement date for shares with
performance requirements, is being amortized over the vesting period.
Compensation expense related to restricted shares amounted to $2.7 million,
$4.3 million and $1.7 million for 2001, 2000 and 1999, respectively. No
restricted shares were granted in 2001.

A summary of changes in the Company's stock option plans for fiscal years
2001, 2000 and 1999 is presented below:

[Enlarge/Download Table]

2001 2000 1999
---------------------- ---------------------- ----------------------
Weighted Weighted Weighted
Average Average Average
Number of Option Number of Option Number of Option
Shares Price/Share Shares Price/Share Shares Price/Share
--------- ----------- --------- ----------- --------- -----------

Outstanding at beginning of year.. 2,336,200 $14 1,897,400 $11 -- --
Granted and converted.......... 499,100 $17 614,300 $26 1,913,600 $11
Exercised...................... (393,800) $10 (38,400) $10 -- --
Canceled....................... (36,500) $17 (137,100) $16 (16,200) $ 9
--------- --- --------- --- --------- ---
Outstanding at end of year..... 2,405,000 $16 2,336,200 $14 1,897,400 $11
========= === ========= === ========= ===
Options exercisable at end of year 662,000 $15 514,200 $11 25,300 $10
========= === ========= === ========= ===

F-16

424B1 62nd Page of 66 TOC 1st Previous Next ↓Bottom Just 62nd
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

The following table summarizes information about stock options outstanding
at February 2, 2002:

[Enlarge/Download Table]

Options Outstanding Options Exercisable
--------------------------------- ------------
Weighted
Average Weighted Weighted
Number Remaining Average Number Average
Range of Exercise Price Outstanding Contractual Life Exercise Price Exercisable Exercise Price
----------------------- ----------- ---------------- -------------- ----------- --------------

$ 5 - $10 580,000 5.3 $7 140,200 $7
$10 - $15 462,200 6.4 $11 259,700 $11
$15 - $20 784,000 8.3 $16 128,000 $17
$20 - $25 71,300 9.0 $23 9,100 $24
$25 - $32 507,500 8.3 $27 125,000 $27
---- --- --- ------- ---
2,405,000 7.2 $16 662,000 $15
========= === === ======= ===

The weighted average fair value per-share of options granted is estimated
using the Black-Scholes option-pricing model and the following weighted average
assumptions for fiscal years 2001, 2000 and 1999, respectively: price
volatility of 40%, 45% and 35%, risk-free interest rate of 4.0%, 5.5% and 7.0%,
and expected life of 5.0, 5.5 and 5.2 years. Additionally, for fiscal years
2001, 2000 and 1999, no expected dividends are assumed and the forfeiture rate
is 20%.

Shares reserved under the various plans amounted to 5.4 million as of
February 2, 2002, and 3.8 million as of February 3, 2001 and January 29, 2000.
The weighted average fair value of options granted during fiscal years 2001,
2000 and 1999, respectively, was $6.99, $13.29 and $4.82.

Under APB 25, no compensation expense is recognized in the financial
statements for stock options. Had compensation expense been recognized for
stock-based compensation plans in accordance with the Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation," the
Company would have recorded net income of $37.7 million, $30.9 million and
$24.0 million, and diluted earnings per share of $1.18, $.97 and $.78, for
fiscal years 2001, 2000 and 1999, respectively.

11. Legal Matters

There are various claims, lawsuits and pending actions against Too incident
to the operations of its business. It is the opinion of management that the
ultimate resolution of these matters will not have a material adverse effect on
Too's results of operations, cash flows or financial position.

F-17

424B1 63rd Page of 66 TOC 1st Previous Next ↓Bottom Just 63rd
Too, Inc.
Notes to Consolidated Financial Statements -- (Continued)

12. Quarterly Financial Data

[Enlarge/Download Table]

First Second Third Fourth
(Unaudited, in thousands except per-share amounts) -------- -------- -------- --------

2001
Net sales............................... $136,657 $125,468 $148,763 $191,801
Gross income............................ 44,963 40,974 51,382 80,203
General, administrative and
store operating expenses.............. 38,516 35,720 37,968 38,772
Net income.............................. 3,815 2,877 8,040 24,831
Earnings per share--basic............... $ 0.12 $ 0.09 $ 0.26 $ 0.79
Earnings per share--diluted............. $ 0.12 $ 0.09 $ 0.25 $ 0.77
Market price per share:
-- High.............................. $ 21.53 $ 27.40 $ 29.10 $ 30.23
-- Low............................... $ 15.27 $ 18.43 $ 18.00 $ 23.00
-- Close............................. $ 19.04 $ 23.20 $ 27.35 $ 27.16

First Second Third Fourth
-------- -------- -------- --------
2000 (1)
Net sales............................... $118,753 $108,315 $133,829 $184,143
Gross income............................ 39,472 34,731 45,257 73,121
General, administrative and
store operating expenses.............. 33,858 31,133 34,118 38,176
Net income.............................. 3,142 1,921 6,378 20,804
Earnings per share -- basic............. $ 0.10 $ 0.06 $ 0.21 $ 0.68
Earnings per share -- diluted........... $ 0.10 $ 0.06 $ 0.20 $ 0.66
Market price per share:
-- High.............................. $ 36.25 $ 32.38 $ 29.00 $ 23.75
-- Low............................... $ 15.50 $ 17.75 $ 19.13 $ 11.00
-- Close............................. $ 29.94 $ 22.00 $ 23.75 $ 18.60

--------
(1) In the fourth quarter 2000, the Company adopted Emerging Issues Task Force
(EITF) No. 00-10 "Accounting for Shipping and Handling Fees and Costs"
which changed its classification of shipping revenue. Amounts relating to
shipping and handling billed to customers in a sale transaction are now
classified as revenue. The Company considers related shipping and handling
costs to be the direct shipping charges associated with catalog and
e-commerce sales. Such costs are reflected in cost of goods sold, buying
and occupancy costs. The Company also changed the classification of
employee discounts as a reduction of revenue. Previously, shipping revenues
and the related expenses and employee discounts were included in SG&A.
Prior periods' financial statements presented for comparative purposes have
been reclassified to comply with these new reporting guidelines. These
reclassifications had no impact on the results of operations, cash flows or
the financial position of the Company.

F-18

424B1 64th Page of 66 TOC 1st Previous Next ↓Bottom Just 64th
[This page intentionally left blank]

424B1 65th Page of 66 TOC 1st Previous Next ↓Bottom Just 65th
[Inside back cover artwork: images of Limited Too catazines; image of 'tween
girls wearing Limited Too products; image of 'tween girls in bedroom decorated
with Limited Too products; and image of mishmash interior.]

424B1 Last Page of 66 TOC 1st Previous Next ↓Bottom Just 66th
================================================================================

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with this
offering other than those contained in this prospectus and, if given or made,
such information or representations must not be relied upon as having been
authorized by us or any underwriter. This prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, any securities other than
the registered securities to which it relates or an offer to, or a solicitation
of, any person in any jurisdiction in which such an offer or solicitation would
be unlawful. Neither the delivery of this prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in our affairs since the date hereof or that information
contained herein is correct as of any time subsequent to the date hereof.

2,400,000 Shares

[LOGO] Too, inc.

Common Stock

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

PROSPECTUS

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

Joint Lead and Book-Running Managers

Bear, Stearns & Co. Inc. JPMorgan

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

May 20, 2002

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

424B1	1st Page of 66	TOC	↑Top	Previous	Next	↓Bottom	Just 1st

424B1	2nd Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 2nd

424B1	3rd Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 3rd

424B1	4th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 4th

424B1	5th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 5th

424B1	6th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 6th

424B1	7th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 7th

424B1	8th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 8th

424B1	9th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 9th

424B1	10th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 10th

424B1	11th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 11th

424B1	12th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 12th

424B1	13th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 13th

424B1	14th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 14th

424B1	15th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 15th

424B1	16th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 16th

424B1	17th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 17th

424B1	18th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 18th

424B1	19th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 19th

424B1	20th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 20th

424B1	21st Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 21st

424B1	22nd Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 22nd

424B1	23rd Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 23rd

424B1	24th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 24th

424B1	25th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 25th

424B1	26th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 26th

424B1	27th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 27th

424B1	28th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 28th

424B1	29th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 29th

424B1	30th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 30th

424B1	31st Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 31st

424B1	32nd Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 32nd

424B1	33rd Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 33rd

424B1	34th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 34th

424B1	35th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 35th

424B1	36th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 36th

424B1	37th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 37th

424B1	38th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 38th

424B1	39th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 39th

424B1	40th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 40th

424B1	41st Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 41st

424B1	42nd Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 42nd

424B1	43rd Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 43rd

424B1	44th Page of 66	TOC	1st	Previous	Next	↓Bottom	Just 44th

Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘424B1’ Filing	Date	First	Last	Other Filings

	8/13/04	17
	6/30/02	12
	5/24/02	1
Filed on:	5/21/02			DEF 14A
	5/20/02	1	66
	5/13/02	6	44	8-K, S-3/A
	5/4/02	6	18	10-Q
	4/15/02	41		DEF 14A
	2/20/02	47
	2/15/02	14	21	SC 13G/A
	2/2/02	4	62	10-K
	1/31/02	33
	12/31/01	52		11-K, 11-K/A
	11/3/01	18		10-Q
	9/28/01	44		8-A12B/A
	8/27/01	44		8-A12B, 8-A12G, 8-K
	8/14/01	44		8-K
	8/4/01	18		10-Q
	5/5/01	18		10-Q
	2/3/01	8	62	10-K
	1/27/01	8	22
	10/28/00	18		10-Q
	7/29/00	18		10-Q
	4/29/00	18		10-Q
	1/29/00	20	62	10-K405
	8/23/99	52		8-K, 8-K/A
	8/18/99	44		10-12B/A
	8/11/99	52
	1/30/99	20	50
	1/31/98	20
				List all Filings

↑Top

Filing Submission 0000950168-02-001519 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Tween Brands, Inc. – ‘424B1’ on 5/21/02

On: Tuesday, 5/21/02, at 8:59am ET · Accession #: 950168-2-1519 · File #: 333-87188

Prospectus — Rule 424(b)(1)Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Prospectus — Rule 424(b)(1)
Filing Table of Contents