Item 1. BUSINESS
General
Edison Brothers Stores, Inc. (the "company") owns and operates chains of specialty stores in forty-nine of the United States, Puerto Rico, the Virgin Islands, Mexico, and Canada. The company conducts its principal operations through subsidiaries and divisions in two business segments: apparel and footwear. Both the apparel and the footwear segments feature primarily private label merchandise in the moderate price range. The stores operated by the company are located primarily in shopping malls. During 1995 the company opened 91 stores including 39 acquired by purchase, sold 98 stores, and closed 656 stores.
Proceedings under Chapter 11
On November 3, 1995 (the "Petition Date"), the company and 65 of its subsidiaries and affiliates (the "Debtors") filed petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in Wilmington, Delaware. The Debtors are presently operating their respective businesses as debtors-in-possession. A statutory creditors committee has been appointed in the Chapter 11 cases. The Chapter 11 cases of the Debtors are being jointly administered for procedural purposes only.
Subsequent to the filing of the Chapter 11 petitions, the company sought and obtained several orders from the Bankruptcy Court which were intended to stabilize its business. The most significant of these: 1) authorized the company to conduct store closing sales, 2) approved a $200 million unsecured debtor-in-possession financing agreement with BankAmerica Business Credit, 3) approved the sale of substantially all of the assets of the company's mall entertainment division to Namco Cybertainment, and 4) authorized a $21.6 million principal payment on prepetition liabilities, payments of prepetition wages and vacation pay, and up to $6.0 million to foreign vendors to aid the company in maintaining the normal flow of merchandise to its stores.
The company and Edison Brothers Apparel Stores, Inc., as debtors-in- possession, entered into a Loan Agreement dated effective November 9, 1995 (the "DIP facility"), with BankAmerica Business Credit, Inc., as Agent and Lender ("BankAmerica"), under which the company may borrow up to $200 million to fund ongoing working capital needs. The DIP facility, subject to collateral restrictions, has a sublimit of $150 million for the issuance of letters of credit. The company expects that the DIP facility will provide it with the cash and liquidity to conduct its operations and pay for merchandise shipments at normal levels while it prepares a reorganization plan.
At the company's option, the company may borrow under the DIP facility at the Reference Rate (as defined) plus .25% or at the Eurodollar Rate (as defined) plus 1.5%. The maximum borrowing, up to $200 million, is limited to 50% of the value of eligible inventory (as defined) plus 95% of the amount of cash deposited with the Agent. The company is required to pay a commitment fee of .375% per annum of the unused portion of the DIP facility. The DIP facility contains restrictive covenants including, among other things, a limitation on store closings of 850, limitations on the incurrence of additional liens and indebtedness, limitations on capital expenditures and the sale of assets, the maintenance of minimum operating earnings ("EBITDA") and inventory levels, and a prohibition on paying dividends.
The lenders under the DIP facility have a "super-priority" administrative expense claim against the estate of the company. The DIP facility expires on the earlier of November 9, 1997, or the effective date of a reorganization plan that is confirmed by the Bankruptcy Court.
Description of Business
Apparel Segment
Edison Brothers' men's apparel chains and other operations include J. Riggings, JW/Jeans West, Oaktree, Zeidler & Zeidler, Coda, Repp Ltd., and Phoenix catalog operations. The womenswear chain is 5-7-9 Shops.
J. Riggings focuses on providing updated traditional apparel to a broad age group of 16 to 40 year-old men. Its mainstream merchandise and classic store design are targeted at a more conservative customer. J. Riggings operated 419 and 498 stores at the end of fiscal 1995 and 1994, respectively.
The JW/Jeans West (JW) chain had 360 and 425 stores at the end of fiscal 1995 and 1994 respectively. JW stores are generally smaller than stores in the company's other menswear chains and are designed to maximize the amount of apparel displayed on the sales floor. This chain targets young men in the 14 to 25 year-old age group.
Oaktree offers a mix of sportswear for 18 to 29 year-old men. Its larger store size accommodates Oaktree's presentation on custom fixtures in a modern setting. Oaktree operated 84 and 279 stores at the end of fiscal 1995 and 1994, respectively.
The Zeidler & Zeidler store group markets upscale contemporary clothing for men. Zeidler & Zeidler had 102 and 152 stores at the end of fiscal 1995 and 1994, respectively.
Coda presents branded and private label current fashion to 18 to 29 year- old men. Coda's larger stores utilize a variety of merchandising techniques, including visual displays and advanced sound systems. At the end of fiscal 1995 and 1994 Coda operated 35 and 39 stores.
Repp Ltd. is a chain of 214 big and tall mens stores up from 185 in 1994. Repp Ltd. markets sportswear and clothing to men who are 6 foot 3 inches or taller or have a 44 inch or larger waist.
Phoenix Big & Tall is a catalog operation that markets sportswear and clothing to big and tall men.
5-7-9 Shops primarily markets sportswear, dresses, and accessories to the small size junior customer. 5-7-9 Shops operated 283 and 363 stores at the end of fiscal 1995 and 1994, respectively.
Footwear Segment
The company's footwear chains include Bakers/Leeds, Precis, and Wild Pair.
The Bakers/Leeds stores, which are operated as a single chain, form the company's third largest chain with 347 and 418 stores at the end of fiscal 1995 and 1994, respectively. Bakers/Leeds offers a wide selection of popularly priced fashion shoes and accessories for the junior customer as well as the contemporary woman.
Precis offers reasonably priced footwear and accessories in a boutique setting, catering to contemporary women in their 20's, 30's and 40's. Precis operated 39 and 29 stores at the end of fiscal 1995 and 1994, respectively.
Wild Pair offers advanced shoe fashion for young women and men and a selection of trend setting accessories. Wild Pair operated 194 and 234 stores at the end of fiscal 1995 and 1994, respectively.
Entertainment
Effective June 29, 1995, the company distributed all of the outstanding shares of common stock of Dave & Buster's, Inc. owned by the company to Edison Brothers' stockholders of record as of June 19, 1995. Prior to the distribution, Dave & Buster's had been a majority-owned subsidiary engaged in the ownership and operation of restaurant/entertainment complexes.
In January 1996 the company sold substantially all of the assets of its mall entertainment division to Namco Cybertainment, a wholly owned subsidiary of Namco Ltd., of Tokyo, Japan. The company will dispose of the remaining operations in fiscal 1996. The company's mall entertainment division included family entertainment centers and operations involved with the marketing of new interactive entertainment technologies.
Additional information on the company's principal business segments is set forth under "Note 16: Business Segments" of the Notes to Consolidated Financial Statements in the 1995 Annual Report. Such information is incorporated herein by reference.
Operations, Inventory and Distribution
The specialty retailing business is subject to fluctuations resulting from changes in customer preferences dictated by fashion and season. This is especially true for stores emphasizing fashion over classic basics. In addition, merchandise usually must be ordered a significant time in advance of the season and sometimes before fashion trends are evidenced by customer purchases. It has been the general practice of the company and other apparel retailers to build up inventory levels prior to peak selling seasons, which further increases the vulnerability of the company to demand and pricing shifts and to errors in selection and timing of the purchases of merchandise.
Substantially all of the company's merchandise information, accounting, and financial control systems are operated centrally from the company's headquarters in St. Louis, Missouri. Daily polling of activity from the point-of-sale registers in each store provides current data for updated sales, merchandise, and bank activity reporting. Integration of this data with the company's merchandise system enables each chain's team of merchandise controllers and distributors to monitor performance and replenish and control inventory.
The company must carry large amounts of inventory to meet the rapid delivery requirements of its stores. The company operates three main distribution centers located in Washington, Missouri; Rialto, California; and Princeton, Indiana. The centers are receiving points for merchandise from foreign and domestic suppliers and coordinate distribution of individual shipments via common carrier to the stores serviced by the center.
Purchasing
The company purchases approximately three quarters of its merchandise from foreign suppliers and the balance from domestic suppliers. The company has no long-term purchase commitments with any of its suppliers, and is not dependent on any one supplier. The company's importing operations are subject to the contingencies generally associated with foreign operations, including fluctuations in currency values, customs duty increases, quota limitations, and any other foreign development that could cause a disruption of supply. The company has international buying offices in Taiwan, Hong Kong, China, Indonesia, Korea, Honduras, and the Philippines.
The company does not manufacture any merchandise, but it markets most of its merchandise under private labels. Each chain of stores maintains a staff of buyers, and buying decisions are made at the chain level.
Competition
The apparel and footwear retailing industries are highly competitive. The company's stores are in competition with numerous other independent retailers, department stores, mail order companies and discount and manufacturer's outlets, many of which have greater sales, assets and financial resources than the company. Because the company's stores are primarily in regional shopping malls, each faces several nearby competitors. In competing for customers, the company emphasizes the fashion orientation of its merchandise, customer service, store appearance, and price.
Employees
During fiscal 1995, the company employed an average of 24,600 persons with approximately 23,100 of them engaged in retail operations at the store level (approximately 34% full-time and 66% part-time). In addition, a substantial number of temporary employees are hired during peak selling seasons. The company believes its employee benefits package is competitive with those offered in the industry. The company's employees are virtually all non-union with minor exceptions in certain foreign operations. The company believes that its employee relations are good.
Seasonal Business
The company experiences a significant peak in sales during the Christmas selling season. Sales during that season accounted for 16.5% of total sales during 1995 compared with 16.8% in 1994. The company's inventory is generally increased significantly prior to this peak selling period.
Trademarks
The company holds a number of trademarks covering its products. The company believes that the loss of any of these trademarks would not have a material effect on the company's business.
Item 2.

Item 2. PROPERTIES
Stores are located nationwide, and most are leased with initial terms generally from five to ten years. The rentals under most leases are based upon a minimum annual rental with a provision for additional rental based upon a percentage of sales to the extent sales exceed a threshold amount. Many of the leases provide for additional payments for real estate taxes and other items. The stores generally range in size from 1,300 to 4,000 square feet.
The company-owned headquarters building in St. Louis, Missouri, was completed in 1985 and is the home office for all divisions. The building contains approximately 500,000 square feet, a portion of which the company leases to others. The Rialto, California, and Princeton, Indiana, distribution centers are owned by the company. The distribution center in Washington, Missouri, is operated under a long term lease arrangement. The Rialto and Washington centers service primarily the apparel segment while Princeton services primarily the footwear segment. Another distribution center in Rome, Georgia, was closed in January 1996.
Item 3.

Item 3. LEGAL PROCEEDINGS
The company and 65 of its subsidiaries and affiliates filed petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on November 3, 1995. Additional information related to the filing is set forth under Part 1, Item 1 of this Form 10-K and under the captions "To Our Shareholders", "Note 1: Proceedings under Chapter 11" of the Notes to Consolidated Financial Statements, and "Management's Discussion and Analysis" in the 1995 Annual Report. Such information is incorporated herein by reference.
Other Legal Matters
The company is not a party to any other material pending legal proceedings.
Item 4.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the fourth quarter.
PART II
Item 5.

Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Information required by Item 5 is contained in "Note 9: Common Stock" and "Note 6: Financing Arrangements" of the Notes to Consolidated Financial Statements and under the caption "Quarterly Information" in the 1995 Annual Report. Such information is incorporated herein by reference.
Item 6.

Item 6. SELECTED FINANCIAL DATA
Information required by Item 6 is contained under the caption "Five- Year Financial Summary" in the 1995 Annual Report. Such information is incorporated herein by reference.
Item 7.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information required by Item 7 is presented under the captions "To Our Shareholders" and "Management's Discussion and Analysis" in the 1995 Annual Report. Such information is incorporated herein by reference.
Item 8.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by Item 8, as listed below, is included in the 1995 Annual Report. Such information is incorporated herein by reference.
Consolidated Statements of Income - fiscal years 1995, 1994, and 1993
Consolidated Balance Sheets - 1995 and 1994 fiscal year-ends
Consolidated Statements of Cash Flows - fiscal years 1995, 1994, and
Consolidated Statements of Common Stockholders' Equity - fiscal years 1995, 1994, and 1993
Notes to Consolidated Financial Statements
Quarterly Information
Item 9.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding nominees for director as set forth under the caption "Election of Directors" in the proxy statement for the 1996 annual stockholders' meeting is incorporated by reference.
Information regarding executive officers is included as Item 4a hereof.
Information regarding the filing of reports required by Section 16(a) of the Securities Exchange Act as set forth under the caption "Filings under Section 16(a)" in the proxy statement for the 1996 annual stockholders' meeting is incorporated by reference.
Item 11.

Item 11. EXECUTIVE COMPENSATION
Information regarding executive compensation, except for the sections titled "Report of the Compensation Committee" and "Stock Price Performance" as set forth under the caption "Executive Compensation", and information regarding compensation of directors under the caption "Additional Information Concerning the Board of Directors" in the proxy statement for the 1996 annual stockholders meeting is incorporated by reference.
Item 12.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners and management as set forth under the captions "Security Ownership of Management" and "Security Ownership of Certain Beneficial Owners" in the proxy statement for the 1996 annual stockholders meeting is incorporated by reference.
Item 13.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions as set forth under the caption "Transactions Involving Directors and Officers" in the proxy statement for the 1996 annual stockholders meeting is incorporated by reference.
PART IV
Item 14.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) and (2) The response to this portion of Item 14 is submitted as a separate section of this report.
(a) (3) Listing of exhibits:
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EDISON BROTHERS STORES, INC. (Registrant)
By /s/ Alan D. Miller 4/30/96 By /s/ David B. Cooper Jr. 4/30/96 Chairman of the Board, President Executive Vice President and and Chief Executive Officer Chief Financial Officer
By /s/ James W. Shaffer 5/1/96 Vice President and Controller Financial Reporting
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following directors on behalf of the registrant on the dates indicated.
By /s/ David B. Cooper, Jr. 4/30/96 By /s/ Julian I. Edison 5/3/96
By /s/ Peter A. Edison 4/30/96 By /s/ Jane Evans 4/29/96
By /s/ Michael H. Freund 4/30/96 By /s/ Karl W. Michner 5/1/96
By /s/ Alan D. Miller 4/30/96 By /s/ Andrew E. Newman 5/1/96
By /s/ Eric P. Newman 5/3/96 By /s/ Alan A. Sachs 5/1/96
By /s/ Craig D. Schnuck 4/28/96 By /s/ Martin Sneider 4/30/96
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following director on behalf of the registrant and on the date indicated.
By /s/ Jane Evans 4/29/96
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following director on behalf of the registrant and on the date indicated.
By /s/ Craig D. Schnuck 4/28/96
ANNUAL REPORT ON FORM 10-K
ITEM 14(a) (1) and (2) and ITEM 14(d)
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
YEAR ENDED FEBRUARY 3, 1996
EDISON BROTHERS STORES, INC.
ST. LOUIS, MISSOURI
FORM 10-K - ITEM 14(a) (1) and (2) and Item 14(d)
EDISON BROTHERS STORES, INC. AND SUBSIDIARIES
INDEX OF FINANCIAL STATEMENTS AND SCHEDULES
The following consolidated financial statements of Edison Brothers Stores, Inc. and subsidiaries, included in the 1995 annual report of the registrant to its stockholders, are incorporated by reference in Item 8:
Consolidated Statements of Income - fiscal years 1995, 1994, and 1993
Consolidated Balance Sheets - 1995 and 1994 fiscal year-ends
Consolidated Statements of Cash Flows - fiscal years 1995, 1994, and
Consolidated Statements of Common Stockholders' Equity - fiscal years 1995, 1994, and 1993
Notes to consolidated financial statements
The following consolidated financial statement schedules of Edison Brothers Stores, Inc. and subsidiaries is included in item 14(d):
Schedule II - Valuation and qualifying accounts
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions, or are inapplicable, and therefore have been omitted.
Individual financial statements of the registrant have been omitted as the registrant is primarily an operating company and all subsidiaries included in the consolidated financial statements filed, in the aggregate, do not have minority equity interests and/or indebtedness to any person other than the registrant or its consolidated subsidiaries in amounts which together (excepting indebtedness incurred in the ordinary course of business which is not overdue and matures within one year from the date of its creation, whether or not evidenced by securities, and indebtedness of subsidiaries which is collateralized by the registrant by guarantee, pledge, assignment, or otherwise) exceed five percent of the total assets as shown by the most recent year-end consolidated balance sheet.